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Leading From the Ground Up

Claims supervisors, transformational leadership, and inspiring a staff of adjusters

January 27, 2021 Photo

Many companies encourage forward-thinking and innovative solutions from their employees. Unfortunately, in my experience over the last decade, the insurance claims industry has lagged behind other industries. Insurance supervisors lead teams in the efficient adjustment of high volumes of claims while adhering to strict standard operating procedures. It is a demanding field and often understaffed, with little time to focus on anything beyond the day’s full workload. Time is of the essence, and many supervisors already feel like they are asking too much of employees since, as one claim is settled, a new one quickly replaces it on the claims professional’s desk.

However, while change and improvements are discussed in this industry, they rarely include the input of claims adjusters working on the ground floor. Why are new ideas only generated from tech entrepreneurs who proclaim that their new startups will benefit the insurance world when most have never handled a claim in their lives? The insurance industry evolves by the day, and just this year has brought new challenges, such as pronounced gaps in coverage and business-interruption claims stemming from the COVID-19 pandemic.

As the claims industry evolves, so, too, should the duties of claims supervisors to change their approach to inspire and encourage their team members to provide their creative solutions to the industry. How can managers create such an environment, fuel lean thinking, and generate new ideas from their existing workforce? Transformational leadership is the answer.

Transformational leadership in a business environment can be defined as positively motivating, influencing, and stimulating a staff. In turn, such attitudes foster and support organizational change to simplify current processes and achieve goals more efficiently. One can further describe transformational leadership by looking at four key factors. First is idealized influence, which focuses on leaders being role models to gain trust and respect. Next is inspiration motivation, which focuses on having a clear vision while encouraging others to accomplish their goals. Third is that leaders need to provide intellectual stimulation and encourage new approaches by acknowledging different and competing viewpoints. Finally, individualized consideration is an essential factor, which requires supervisors to become cognizant of the needs and abilities of a staff while spending time coaching and developing.

Of course, not all supervisors are always capable or even comfortable with such leadership. This is an industry that focuses on a checklist of best practices to balance a considerable workload. It takes tapping into one’s emotional intelligence to identify feelings and sentiments. Then, in turn, supervisors can apply these social skills to understand and guide employees’ unique behaviors. Handling these interpersonal relationships may assist in creating influential leaders in the industry, and these skills are the ingredients required to identify areas of change and inspire fellow workers to excel above their standard day-to-day duties.

To further illustrate the benefit of this form of leadership, Panagiotis Polychroniou in 2009 studied the emotional intelligence and transformational leadership of supervisors and how they impacted their team’s effectiveness. In Polychroniou’s 2009 research and resulting write-up “Relationship Between Emotional Intelligence and Transformational Leadership of Supervisors: The Impact on Team Effectiveness,” which appeared in Team Performance Management, 267 professionals in the service, merchandising, financial, and manufacturing sectors were provided questionnaires during anonymously structured interviews. They were questioned about their supervisor’s emotional intelligence and transformational leadership. The results showed that supervisors and their emotional intelligence traits were positively associated with transformational leadership qualities that increased their team’s effectiveness. Of further importance, company culture was mentioned, which played a vital role in the support of employees and specific leadership traits.

In 2000, Julian Barling et al. also explored emotional intelligence as it associates with the use of transformational leadership through a study that appeared in the Leadership & Organization Development Journal, entitled, “Transformational Leadership and Emotional Intelligence: An Exploratory Study.” The study involved 49 high-ranking officials from a paper organization. Vice presidents, general managers, and supervisors were provided questionaries to assess their levels of emotional intelligence. This was followed by their own subordinates rating the managers’ transformational leadership qualities. The research showed that three aspects of transformational leadership—idealized influence, inspirational motivation, and individualized consideration—differed according to the emotional intelligence level exhibited. Supervisors with emotional intelligence traits were viewed positively as leaders, while those who utilized a more passive management approach did not correlate similarly. 

The applications to the insurance-claims arena are apparent. There is a need to have supervisors focus on emotional intelligence competencies and transformational leadership traits to run a more effective and empowered team of claims representatives. There are always problems to be fixed, especially in insurance. Merely counting on professionals to handle claims with one specific line of thinking is not enough. Managers must be self-aware, empathetic, and wise to the emotions of their claims staff. Communicating one’s vision, motivating, and leading the way with ideas will help encourage change. Remember that employees and their unique perspectives are the difference-maker, and they are one of the most valuable resources that insurance carriers have when it comes to remaining competitive. 

About The Authors
Chris Casaleggio

Chris Casaleggio is a senior consulting professional for H2M Associates, Inc. He is also author of “Adjusting” to a Career in Property & Casualty Claims.  ccasaleggio@h2m.com

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