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Building a Customer-Focused Business

Gary Kaplan_Building a Customer-Focused Business

By Gary S. Kaplan, President -North America Construction

In June, XL Catlin’s North America Construction insurance business hit a major milestone – it surpassed its USD 2 billion gross written premium mark. In other words, in its six and a half years of existence, this dedicated team underwrote USD 2 billion of multiline insurance coverages exclusively to the construction industry. The most interesting thing about this feat is that, having hit their USD 1 billion premium milestone in late 2015, they doubled it in just a little over 18 months. This says a lot about the vitality of our current construction market but also says quite a bit about how a team, so dedicated to serving its customers, can achieve such unbelievable success. Gary Kaplan, president of XL Catlin’s North America Construction, built this team and he’s sharing his insights on why they’re succeeding big time. 

First things first. How did you even start?

In a way it was the easiest and most difficult thing I’ve ever done. The easy part was recognizing what the customer (top contractors) wanted and seeing the opportunity. The best contractors in North America want an insurance partner they can work with to help them grow profitably, provide the complete solution to their risk management needs, and be responsive by listening well. And most importantly someone that will execute on what they say through the development of products, services and talent required to deliver on those needs. It amazed me that other carriers were moving away from that. They were busy focusing on building internal efficiencies at the expense of delivering what customers needed, so there was a clear opportunity.

The hard part came in writing the actual business plan, which when done, included 6 insurance lines (Casualty, Builders Risk, Subcontractor Default Insurance, Professional , Liability Pollution and Excess Casualty) plus risk engineering. It also had a big hairy audacious goal built into it: achieve $1 billion in premium in 6 years. The company leadership agreed with my strategy and put enthusiastic support behind the plan. We launched it with a WorkOut within five months of joining XL Catlin.

So, with a plan (and goal) like that, having the right team is critical. How did you attack that?

We spent months perfecting the business plan before we officially launched the new business for a 1/1/11 start. During that time, we spoke to construction brokers, contractors and people working in construction insurance about our plan and the type of people we would need to make it successful. This was, by far, the biggest risk in the plan. Would we be able to attract the top talent we needed to a brand new business and who would share our vision to totally commit and focus on North America’s top contractors?    

When we began gearing up, we started a unique database of industry talent. This wasn’t just a file of names. We documented expertise; Construction DNA, where they learned the business; current employers and what positions they might fill. But most importantly, we included a measure of how well each person would fit on our team (more about that later). The database has almost 1200 names and we’ve used it extensively as we expand. This tool has allowed us to grow at over 45% average annually with the right people in the right geographic locations adding the right contractors to our pool of customers. This process helped us find experts in their own line of business that would also represent the entire construction vertical as we focused on building relationships with North America’s Top Contractors.

With the right talent in place, how do you go about managing a brand new team to deliver on such an aggressive goal?

We’ve adopted a project-centric leadership, planning and execution model. That’s a lot of big words that just mean we prioritize our efforts on what matters the most. This model is one I’ve been refining for most of my 38-year career. We used it from day one to start up the business and we use it every day to Plan the Work and Work the Plan. Our model provides a road map of what to do and when to do it. It does all of the following:

  • Focuses on Results

  • Provides an Effective Change Management Process

  • Incorporates the Voice of Customer

  • Leads to Better Decisions

  • Spurs Innovation and Continuous Improvement

  • Develops Talent

  • Empowers People through Accountability & Engagement

  • Boosts Morale

  • Tests Critical Assumptions

 

It takes all year to come up with a solid plan including a Strategic Plan, a Financial Plan and most importantly an Operational Plan. During that same year, leaders must work the plan that they created the prior year, executing the Operational Plan to implement the strategy and hit the financial plan. We use projects to initiate change and stimulate performance that assures we execute what matters most and helps to achieve our plans and optimally serve our customers.

 

 

How important has good communication been in your team’s success?

Over my career, I found that relying upon the chain of command organizational structure to carry out critical communications is flawed. Important messages don’t always make it to the people that need to hear them the most. We use a monthly virtual conference call with well over 100 people that work in or support our business. We’ve done this almost every month for 79 months in a row and each call is less than 60 minutes. We share the results using well designed metrics and graphs that outline trends. This meeting assures that everyone knows our vision, mission and where we are at and where we neeed to go.

Monthly 1:1 meetings with my direct reports are also important to look at performance, help with execution of operational plans and review development of our people. Everyone likes to be heard and setting up time to listen to our people is essential to make this happen. Most of the time is spent listening to what people are doing and validating that they are going in the correct direction.


 

 

"

Everyone on our team is charged with listening to the Voice of the Customer."

 

In describing your planning process, you mentioned Voice of the Customer. Tell us more about that.

Everyone on our team is charged with listening to the Voice of the Customer. We’ve invested heavily to improve our collective skills in developing and maximizing relationships, listening, consultative selling, describing our specific value proposition and more.

 

Each of our trained team members collects this feedback from the customer and feeds it to the Construction leadership team through both regular team meetings and 1:1 discussions. The Construction Leadership Team brings this information to the monthly Construction staff meeting to incorporate into our review of the ongoing Operational Plan. Any new ideas or innovations are considered and prioritized against the current portfolio of projects. In this way we are continuously improving based on what we hear and what we do to change our focus.

  



What are you hearing?

 

Several of the issues clients are facing are ones we’ve been talking about—because we were listening:

  1. The effect of the aging workforce on the construction industry both in terms of heightened risk and brain drain.

  2. How to attract millennials to (and retain them in) the construction industry

  3. Managing risks posed with a bilingual workforce.

  4. The consequences of the national opioid epidemic and how it impacts the construction industry from the standpoint of risk and workers compensation coverage.

Our most sophisticated contractors are also adopting and pioneering some pretty amazing technology. We’re keeping a close eye on the related risks and we’re also working on some high tech risk management solutions to help our clients.

 

 



And how have your business model and the team that you’ve assembled helped address your customers?

 

Our customers know better than anyone that the risks they face are complex and they need to address them by building a comprehensive insurance program tailored to their individual needs or projects. To do so, many construction industry leaders point to the benefits of working with one insurer to provide all lines of coverage. We understand and recognize better than most, the positive benefits a progressive risk management program has on the various lines of coverage. Whether it’s underwriting, risk engineering or claims, we work together as a team to deliver when our contractors need it the most.

Contract certainty, for example, is a big issue in the construction industry. Contractors need to know they can count on their insurance partner for timely issuance of policies, endorsements and certificates so they can keep their projects running on time. And with our flat structure, we do that and more.

 

 



What’s next for your team?   

 

Reach $4 billion by maintaining strong relationship with existing clients and by adding more of North America’s Top Contractors to our pool of the best performers in the business. We plan to do this right after we get done celebrating the $2B milestone.

 

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