The Fate of SMB Insurers Depends on Leadership

The Fate of SMB Insurers Depends on Leadership

I sat down with Joe Burgess, a veteran workers’ compensation and long-time self-insurance program executive now serving on the board of CHSI Technologies, Inc., and asked him to share some insights on how leadership within the small- to medium-insurance industry is changing, and how insurers in the market space can best respond.


Joe Burgess

Joe Burgess

Q: Why is leadership so important in the small- to medium-size (SMB) insurance arena?


A: Small and mid-sized insurance programs exist to meet specialized needs that are poorly met by the broader industry. Insurance is considered another commodity in the marketplace. If insurance is all the same, the commodity model is reinforced. Against this tide rise the specialized insurance programs that address needs. Inherently, value, highly focused service, is built into their design. Yet the pressure of commodity pricing is always there, a pressure that is very real because buyers are educated to purchase that way. Leadership in small and mid-sized programs – the vision, the go to market strategy – is critical and is tested continuously. The deep reserve of operating funds, capable of absorbing an abundance of errors, may not be there. Leaders must see opportunities and be both strong and nimble in their leadership to exploit them.


Q: Why is leadership so important now–what types of changes have you seen in the small- to medium-size commercial market?


A: The insurance industry continues to consolidate as smaller companies become absorbed by larger operations. For some smaller companies, this may be part of their game plan – and the effectiveness of leadership in the enterprise is going to be a difference maker. In this circumstance, the strength of leadership will help to determine whether the brand of the acquired company continues to be strong. Rolling up smaller companies strictly for their market share is a short-term play. Smaller companies offer a personal identity to which larger companies aspire. It is a noisy marketplace, crowded with large players – leaders at small and mid-sized companies can be a breath of fresh air for the consumer when they lead with their teams and when they pay genuine attention to the many little things that comprise exceptional service.


Q: Do the tenets of leadership differ at larger carriers? Is it easy to “get lost” in the mix at a big carrier?


A: Leaders at large insurance companies strive to be connected and relevant, just as they do at smaller operations. Nonetheless, the many layers between the leader and the street present challenges. In smaller companies, leaders can be closer to the action. It is a double-edged sword – accountability is critical for everybody, and when you’re leading a smaller team you’re out there, there is less cushioning to absorb the hits.


Q: How does leadership benefit the IT team when it comes to technology selection?


A: The challenLeadershipge for leaders in IT decision-making is perspective – a vision of where the company needs to go, translated to business goals, and finding that balance where the IT team has real ownership in those goals, meaning that they have a real voice, without letting go of the higher responsibility. A leader is not supported by an IT team that just does what they’re told – and it is a mark of strong leadership when the team is really at the table. In most cases, the practical knowledge of the IT team is much greater but the perspectives are narrower, the aptitudes don’t stretch to the broader goals. Leaders always have their eye on the budget – yet critical mistakes are made when IT decisions are commoditized. How do you predict what is going to happen after a decision is made, after an implementation is begun? Understanding what comes next is a core responsibility of the leadership team.


Q: What are some of the ways SMB insurers can develop leadership from within their ranks?


A: Leaders are developed through training/mentoring and through actual delegation, on a gradient basis. Many leaders cannot resist the urge to intervene and “do it better.” They will not develop leaders and in fact, they won’t lead. There are many different approaches in coaching and team development – you need structure, you need to talk about it and have engagement.  In working with people, the first thing to recognize is that you are working with their willingness – and successful companies will channel that willingness to areas where there is the greatest opportunity for effective contribution. Naturally not every individual is going to be a leader in your company – but nothing that gets done right in your company is trivial. Something that is true in any organization – people in leadership positions can naturally like to be validated, to hear that they are doing the right thing. Many organizations have crashed and burned with leaders who were surrounded by lap dogs. The ability to communicate directly and honestly is one positive feature of a future leader.


Q: What value do industry associations hold for SMB insurers? Should they be more involved?


A: Small companies are about relationships. Large companies are, of course, similarly focused – it is the lifeblood of small business. Getting involved in industry associations is essential, remembering that providing support without expectation of direct return is a fundamental of that involvement. The opportunity is to do what comes naturally – engage in activities that resonate with you, look for the opportunity to serve in a real way that aligns with your values.


Q: How else can this type of networking play forward to improve leadership within a SMB insurer?


A: Networking is not just a business opportunity, it’s a growth opportunity. It is not easy for everybody to put themselves out there – every little bit they do helps them get a little stronger. People can surprise themselves – networking and getting involved can inspire purpose and people can learn new things about themselves and their capabilities. Confidence comes with contribution and production and is a seed of leadership.


Jim Leftwich has more than 30 years of leadership experience in risk management and insurance. In 2010, Jim founded CHSI Technologies, which offers affordable SaaS enterprise management software for small insurance operations & government risk pools and is in use at more than 45 insurance operations in 25+ states. For more information visit