Direct General Insurance’s Chief Claims Officer discusses his background in law enforcement, the importance of rotational assignments, and new pressures for the industry.
Where did you grow up?
I grew up in the inner city of Cleveland and lived there all the way through college. I only moved after I had my first management job with Progressive. My dad worked for the two Cleveland newspapers. I went to a Catholic school where many of my friends’ fathers were either police officers or firefighters, which got me interested in law enforcement.
How did you get started in claims?
During college I did a co-op program with the U.S. Customs Service and became an import specialist, a person who basically assesses import tax and enforces various laws on importations to the U.S. After that, I became a police officer in Cleveland Heights. During my tenure on the force, I became more and more familiar with Progressive Insurance because so many drivers whom I stopped had insurance with Progressive. That made me think it must be a company that is growing.
Then I saw an ad in the newspaper for a claims representative position at Progressive. The ad talked about what a claims rep did—investigations, managing the claim from cradle to grave, and independence in the field. All these things seemed attractive to me given my background. And, the position came with a company car—in my case, a choice between a silver or gray Dodge Omni.
Because I had such an interest in auto theft investigation, which I had done a lot of as a police officer, my goal was to get on board as a claims rep, convince the company that there was such a thing as insurance fraud, and then get involved in suspicious loss investigations. So that’s how I got started.
What kind of training did you receive when you started with Progressive?
The first couple of weeks I rode along with a claims representative. Then I went through three weeks of intense training on coverage, liability, bodily injury, negotiations, and many other areas. We handled all kinds of claims, so we learned a little bit about everything. After another two weeks in the office, we went for physical damage training. We went into the field and wrote crash estimates on autos and motorcycles. We were tested frequently during the process. If you didn’t pass the course, you didn’t have a job, so we were all pretty motivated. It was a very good training program.
What kind of work did you do at first?
Because we had a big auto theft problem in Cleveland and my supervisor knew about my interest in that area, I was assigned almost every auto theft claim that came into the office. I spent a lot of time investigating auto theft claims and bodily injury claims.
Did your police training help in your claims role?
Absolutely. It really helped to have the perspective that a bad day in claims is nothing like a bad day as a police officer in which you could be seriously hurt. Also, I was used to being in stressful situations and was comfortable talking to people and telling them things they might not want to hear. As a claims rep, you sometimes have to deliver bad news.
When did you move into management?
Back in 1984, if you survived a year or so at Progressive, you had an opportunity to open a new office location or fill in for a manager who was promoted to a larger branch. After my first year at Progressive, there was an opportunity for me to manage the Progressive branch in South Bend, Ind., followed by one year later starting the Special Investigation Unit in Florida.
What was the most challenging part of moving into management?
One of my biggest challenges was working with a remote manager. My manager at the time was in Madison, Wis., so I had to learn to make more decisions on my own rather than walking over to my boss’s desk. I learned to fully research all the issues myself and rely on my training and experience to make good decisions. That independence early in my career served me very well.
Do you recommend claims professionals learn about other disciplines within their company?
Yes, I believe as claims leaders we can always do a better job of explaining the intent of our actions rather than just saying that’s the way it’s done. It’s critically important for employee growth for everyone to understand more than just the work they do. If we can understand how all the pieces of the company fit together and how various actions affect the company as a whole, we will have better employees.
It’s also important for employees to develop a broad perspective on claims, so I like to have them rotate through various claim functions. I like for them to have exposure to all facets of claims—coverage, negotiations, audit, etc. That also helps keep employees interested and fosters the development of the next generation of leaders. It’s also critical that managers rotate between field leadership and home office process roles so they don’t lose perspective on the challenges that face both co-workers and the organization.
What do you look for when promoting someone to management?
An important element, of course, is that the person does his or her current job very well. Often people are so busy looking for their next opportunity that they neglect to focus on their current role. After that, it’s a matter of establishing a career path for an individual and identifying how that meshes with the needs of the organization.
It’s also important, in my view, that managers and supervisors set the appropriate tone—namely that they are willing to roll up their sleeves and work hard. They need to be good role models and be relentless in communicating a consistent and aligned message across their team. They need to set clear expectations and goals. It’s also very important to be curious in our business. For me, that means asking the second, third, and fourth level of questions so you have the information you need to make the right decision.
Is it more difficult to find claims talent today?
I don’t think we have a lack of talent. I believe there are entry-level people out there who can be great claims professionals, but as an industry, we need to develop claims managers so they understand all facets of the business.
What are some of the new pressures the industry is facing?
Being in Florida, there are always concerns about the legal and regulatory environment. Those issues have always been there, but it seems that they’ve escalated recently. It also seems that we’re getting a “storm of the century” every few months. When you are a small or even midsize company, you don’t have excess resources to assemble a CAT team for each event. I think the ability to adjust to reported claim fluctuation is critical in today’s environment and represents a real challenge.
Social media also presents some challenges. Customers will sometimes post something negative on social media, and we have to respond appropriately while also maintaining privacy for all concerned. Situations can escalate quickly with social media, so we have to fast-track our response. Strong claim organizations need to be able to do that.
Are there any associations or industry groups that you are deeply involved in?
Yes, I sit on the Board of Governors for the National Insurance Crime Bureau, which is a group that I supported even before I started in the industry. And, of course, I like very much the work that the CLM Alliance is doing relative to the training and development of claim professionals. This will help address the current shortcomings in the industry.
Can you tell us a bit about you personally? Are you married? Children?
Yes, I’ve been married for 23 years. We met at Progressive, and she now works at Farmers Insurance. So, we’re both in the claims field.
I have five children. My oldest son works for the Cleveland Indians. One of my daughters is a police officer, a senior corporal with the Dallas Police Force. One daughter works in South Korea teaching English to South Korean naval officers. I have a son at the University of Florida who is spending the summer “studying” in Italy. My youngest daughter is 12 and a travel lacrosse player.
What hobbies do you enjoy?
I run and bike a lot and enjoy the outdoors a great deal. Every year a group of insurance friends plan out several challenging events. We have run marathons and climbed Mount Shuksan, which is a glacier in the North Cascades National Park, and recently, we competed in the Ragnar Relay Series. We took turns running from Miami to Key West, Fla. I ran about 20 miles of the 200 miles. Basically you run, drive, and then repeat until you arrive at the southernmost point in the U.S. Last year, we also started an Appalachian Trail hike that I hope we’ll do again on an annual basis.