Building a Culture of Innovation & Diversity in Insurance: Abel Travis, VP & Head of Fundamental Underwriters

Insurance Industry News & Views - June 2 2021

Abel Travis is Vice President and Head of Fundamental Underwriters, a division of AF Group. A 17-year veteran of the commercial insurance industry, Travis started his career in insurance as a multiline underwriter for The Hartford. Prior to joining AF Group, he was head of Commercial Lines Product Management at The Hanover. He also hosted the long-running podcast series “The Insurance Innovators Unscripted” and is a top 50 InsurTech Influencer and InsurTech mentor. We caught up with Abel to ask a few questions about how insurance companies can build a culture of innovation, attract new talent, and ensure diversity and inclusion in insurance leadership.

Abel, we recently curated our second annual crowdsourced eBook Commercial Insurance Underwriting Priorities 2021 and Beyond. What’s your take on which technologies and digital transformation initiatives commercial lines carriers should focus on to make their underwriting processes more efficient, profitable, and responsive to customers?

The state of innovation in the insurance industry has changed, and a lot of the customer expectations we are witnessing have nothing to do with the industry itself. According to a study conducted by McKinsey, we’ve seen digital adoption and acceleration in North America increase multi fold and, as of the end of 2020, 65% of consumers maintained digital interactions across their daily lives, and 90% of consumers preferred to interact with carriers on a digital basis.

Because of this, at its core, carriers must drive digital transformation and enablement within their own organizations, just to be able to consume new technologies that require a scalable and flexible digital infrastructure. Agents have been one of the most important conduits to industry customers, and single threaded carrier integrations are no longer viable for agents, meaning that carriers must deploy an API strategy or be faced with the inability to engage with agents who are going digital, and face more limited distribution. Agents are partnering together – take BrokerTech Ventures, for example – to invest in their own future and digitized capabilities, and they have been selectively disengaging with carriers that have limited and archaic digital infrastructure.

Data and analytics insights based on the massive amounts of data collected by our industry offer a treasure trove of insights into the customer and portfolio experience. Customers are seeking a frictionless experience that makes it easy for them to get insurance, and carriers should consider how to make that experience a reality. Leveraging 3rd party data from insurtechs or integrating IOT data to mitigate losses from auto technology providers enables a more well-rounded view of the customer needs and streamlined coverage offering.

Finally, a flexible infrastructure is key, to enable cloud scalability, and enough power to synthesize and trend the immense amounts of digital data being produced by customers, agents and carriers. The significant amount of unstructured data requires AI and cognitive capabilities to support trending and patterns to serve the customer and improve the portfolio.

You’ve said that the biggest limiting factor in successful digital transformation “is not the technology; it’s the culture.” How do you develop a culture of innovation within an established insurance organization and get people to buy in to the change?

Creating a diverse culture of innovation is quickly becoming a differentiator in a more competitive industry landscape. The support for creating an innovative culture must come from executive leadership, and everyone within an organization must be empowered to innovate. Organizations must be open to rapid piloting of new capabilities and must be willing to be accepting of the “fail fast, learn fast” philosophy.

Employees tend to be rewarded for successes, but what if an initiative failed, but the learnings from that initiative subsequently lead to a successful outcome in another? Would you still consider that a failed initiative? I wouldn’t. Employees need the space to confidently try new things, the space to think and be creative.

The employees within the organization also must understand how their innovative work connects to the business need. Culture should dictate the positive ways organizations collaborate, communicate, and engage one another – both engaging within and outside of an organization. At AF Group, early on in my tenure, many employees had heard about “insurtech,” but not many knew of the tremendous opportunities that can be gained by engaging with insurtech innovators. Instead of being “theoretical,” we created a day dedicated to bringing insurtechs onsite to essentially engage the enterprise on the new innovations driving their value proposition. Not only did they help the enterprise understand innovation in the industry, but we took it one step further and partnered with them on several initiatives, bringing in folks from the business, corporate underwriting, and other areas within the organization to participate in the initiatives. They became change agents and influenced a much more pervasive culture of innovation.

I believe that this approach coupled with others can really drive a culture of innovation. I know other organizations that adopt this strategy. Start at the top, ensure the enterprise understands how it impacts them, and ensure innovation is owned by everyone.

Carly Burnham of Insurance Nerds argues that the insurance industry has “earned the reputation of being pale, male, and stale through the image that we portray and the leaders that we promote.” As a Black insurance executive, you’ve been vocal about the need for greater diversity in P&C insurance leadership. What has to happen to change the face of the industry and make it more diverse, equitable, and inclusive?

First and foremost, I believe support for diversity, equity and inclusion (DEI) starts at the top of the organization. Leaders must believe in its benefits and display the traits necessary to drive a diverse, inclusive and equitable environment. Managers must be educated on how and why D&I is important and be held accountable for successfully creating and maintaining a diverse environment within their organizations.

Intentionally fostering DEI makes organizations much more likely to increase the bottom line. That means that having a diverse employee base can be the difference between a profitable year, and producing a positive revenue outcome for an organization. I believe organizations that make DEI a strategic pillar and hold their leadership teams accountable to outcomes are much more successful. What gets tracked gets measured, so creating a trackable metric such as diverse hiring requirements improve diversity across organizations, or instituting DEI training, while holding leaders accountable will absolutely help to incrementally improve on diversity in our industry.

I also know that, while we’ve made very incremental improvements on diverse leadership across the industry, what has been done is not enough. I’ve had plenty of dialogues with future leaders that I mentor who do not see themselves as someone that would work within insurance, because they don’t see themselves reflected in the executive leadership across our industry. They would rather go to organizations that have visible diversity, as that visibility in reflection of themselves enforces their ability to successfully grow their careers.

I believe the industry needs to embrace mentorship and sponsorship of future leaders. As a mentor, you have opportunities to drive transformation with your mentee, and bring them to the door of leadership. As a sponsor you can open that door, immediately impact the makeup of leadership, and help other future leaders see themselves in our industry – with leaders that they resemble.

The industry should embrace recruiting from universities that cater to educating diverse talent, such as HBCUs, as well as support affinity-based leadership programs to intentionally train diverse leaders to be future successors within an enterprise. Finally, diversity committees or employee resource groups can be used to create champions of change and drive the message of DEI to the entire organization.

These opportunities, coupled with cultural competency training and accountability of DEI outcomes across all leadership, can really help to shift the dialogue and actionably improve our industry’s diversity and inclusiveness.  

Do you see any connections between fostering a diverse culture and an innovative one? Do insurance organizations that have embraced diversity have an edge when it comes to innovation?

Without a doubt, yes. A recently published BCG study showed that diverse leadership teams and staffing drive 19% more revenue due to innovation. That’s like giving your organization a 19% wider advantage, due to just ensuring diversity within your culture. Different experiences and perspectives foster innovation, that’s needed to meet the needs of an increasingly diverse customer base. Customers are expecting that the culture within an organization they engage with is reflective of themselves and the communities which they serve and where they reside.

Insurance organizations that have embraced diversity stand to get the benefit of diversity of thought, and the experiences their employees have gained, which can be applied to the diverse customer base that our industry serves. Employees feel more accepted and at home in work environments where there is this actualization of acceptance. A diverse work environment will help employees thrive, delivering their best, which can lead to happier, more engaged employees, and outsized returns for the employer. Diversity leads to more engagement, better collaboration, communication, and successful outcomes due to the diverse perspectives.

While I was in college, I worked for a fortune 100 leader as an intern, and one statement which this leader conveyed was to bring your “whole self” to work. This allows others to understand your culture, and celebrate the differences across an enterprise, creating a sense of belonging as an inclusive organization, and enabling employees to want to embrace values that can help a company become market leading. Our industry needs more of this inclusivity and diversity to better deliver on the mission of Insurance.

Fundamental Underwriters are specialists in commercial auto, which is being disrupted by technologies like self-driving vehicles and telematics. What do you think commercial auto insurance will look like in 5-10 years?

I think this depends on the segment of commercial auto. The auto insurance industry needs to prepare for fundamental transformation, similar to the digital revolution we’ve seen in general. For starters, I believe that auto telematics will continue to drive a culture of safety across mobility. Telematics developers will continue to improve this technology, to help correct unsafe driving behaviors in real time, thereby improving driver performance. Distracted driving will continue to be tackled by technology providers, and autonomous features will identify and correct those unsafe behaviors. Some of this is already occurring today, especially in trucking and Health and Human Services, two industries served by Fundamental Underwriters.

I believe that we will see further adoption of autonomous technology, pioneered at companies like Tesla, and adopted by companies such as Nikola. We’ve already seen the “sharing” economy begin to take hold, and the auto insurance industry isn’t immune to this long-term trend. As we’ve seen companies like Rivian move into electric and autonomous vehicles, I believe we will see more embedding of insurance with the cost of the vehicles to offer a rounded solution to consumers.

I believe that we will see insurers, manufacturers, and others collaborate to develop a way to share the massive amounts of data produced and collected by auto telematics devices, which will enable more accurate assessment of risk, claims payout accuracy, and trust in both the vehicle manufacturer and insurer. Safety will continue to improve, and commercial auto technology adoption will drive the creation of new undeveloped insurance products.  

Given the acceleration of data and analytics technology, and improved infrastructure, touchless claims will become more of a reality, leveraging AI and ML to sped up the claims process with significant accuracy. Underlying this, carriers must start to perform their own digital transformation to keep up with the transformations already being witnessed by the industry.

What positive changes have you seen since you began in your career?

Insurance is an industry which I’ve really enjoyed contributing to over the last 17 years. I’ve seen the industry begin to embrace a more diverse leadership structure, and attempt to move away from the homogeneity of leaders. Let me be clear, there is still a lot of progress to be made in insurance when it comes to diversity, equity, and inclusion, but an honest attempt has become more noticeable over the past few years.

I’ve seen a passion for this industry from those that really care about insurance and the work we perform. Insurtechs have transformed the customer experience and have worked to make insurance a transformative industry, something that hasn’t necessarily been a ubiquitous term associated with “insurance.”

The insurance industry has become one that, irrespective of background, can serve the career needs of talent across the board. Individuals can work traditionally as an underwriter or actuary, but also become a data engineer, AI technologist, or communications leader. We continue to onboard the use and adoption of innovative technologies, and I think that’s the story that will drive future generations into wanting to work in insurance.  

Abel-TravisAbel Travis serves as Vice President and Head of Fundamental Underwriters at AF Group, located in Lansing MI.  Abel Travis has deep subject matter expertise in the insurance Industry, with over 17 years of experience. Travis is an expert in innovation, designing new products and business models to drive growth and transformation. Travis has provided leadership and guidance in all aspects of the insurance industry from technology, underwriting, product management, innovation, strategy and product development.

Travis is an award winning, international keynote speaker at events including InsurTech Insights, InsurTech Connect, Dig In, InsurTech Rising, ACORD Conference, Society of Insurance Research, NAAIA Conference, Women in Insurance, and has been a featured industry contributor to The Economist, Carrier Management, Digital Insurance, Insurance CIO Magazine, etc. Travis has also contributed to numerous industry white papers including the most recently published “Reinsurance That Connects.”

Travis has a deep affinity for Insurance Innovation and seeing the proliferation of innovation change this Industry. He hosts the Insurance Innovators Unscripted podcast to provide and engage in thought leadership with insurtech innovators, influencers, and executives in insurance. Travis serves as an advisor to regional insurtech startups, provides consultation for private equity firms investing in the insurance sector and mentor’s future industry leaders and innovators.

Travis has been the recipient of many industry awards, including the 40 under 40 from the WBJ. He was named to Digital Insurance’s top Innovators to Watch, was named a Hot 100 by Insurance Business America, and was awarded the Diverse Leader of Change in Insurance recognition.

Travis earned an M.B.A. from Long Island University (Brookville, NY) and a B.A. in Finance from Clarkson University (Potsdam, NY).

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