Executive Spotlight

What Working on a Nuclear Submarine Taught Joe Tocco about Teamwork, Talent and Trust

The Navy veteran turned carrier executive discusses his unique introduction to insurance, the risks and challenges facing the industry, and the importance of cultivating talent.
By: | May 16, 2018 • 6 min read

Things are moving fast, and the insurance industry is perpetually challenged to keep up with emerging and evolving risks, advancing technology, and fluctuating market conditions. But companies that take proactive steps to embrace change and make efforts to attract, train and retain the right people will be equipped to succeed no matter what.


Risk & Insurance talked to Joe Tocco, XL Catlin’s Head of North America, about the big issues facing the industry, and how tapping into a broader pool of talent can help drive the innovation carriers need to stay ahead of the curve.

R&I: How did you get your start in the insurance industry?

Joe Tocco: I spent almost nine years in the Navy and got my education there. Towards the end of my career, I was a nuclear field service engineer doing useful life studies on submarines. When I got out of the Navy, that experience afforded me the opportunity to work for Hartford Steam Boiler as a boiler engineer.

After about a year of that, I moved to New York and got connected with Industrial Risk Insurers. I started out there doing boiler inspections and eventually became an account engineer, working side-by-side with the underwriter. That’s when I really started to learn about insurance.

Then the opportunity came up to do property facultative underwriting for Munich Re. It was all tech risk stuff — boiler machine, oil & gas, etc. — so it allowed me to use my experience. I eventually moved to Zurich and ran property for North America and spent about 15 years there before coming to XL Catlin.

R&I: How did your experience in the Navy benefit your career?

JT: I learned a lot about teamwork and leadership. I was stationed on an attack submarine for about five years. The way we would test for any repairs was to go down to test depth and monitor the leak rate. Everything would be cracking and creaking. You quickly realize at any given moment something really bad can happen, and you have to trust that everybody around you is going to know exactly what to do. And that’s not an easy thing to develop, that trust.

Joe Tocco, Head of North America, XL Catlin

For me, I carry that through in life now. It makes you prepared for the unexpected, and when it happens, you better be able to trust the people around you.

I’m about building teams of people that are willing to work together and are willing to go the extra mile. I try to cultivate that trust so that if things go south, we have the team here that’s going to solve the problem and solve it quickly. Getting a team to believe in each other and trust each other, I feel that’s what I bring to the table.

I’m about building teams of people that are willing to work together and are willing to go the extra mile. I try to cultivate that trust so that if things go south, we have the team here that’s going to solve the problem and solve it quickly.

R&I: What are the top challenges facing the insurance industry?

JT: Cyber has everyone’s attention because the industry is constantly trying to keep up and wrap our heads around it, but the risk is always evolving, which creates coverage issues. There’s unintentional coverage that’s embedded in products historically, and there are standalone products. Determining how the two interact when it comes to exposures like cyber-related business interruption and property damage is an ongoing challenge. As an industry, we’re still figuring out how to build meaningful products that will meet clients’ unique needs.


After the natural catastrophes of 2017, I think another big risk challenge is the sheer amount of uninsurable exposure. We tend to think of this as a problem for third-world countries. When they get ravaged by a storm, there is no backstop to help them rebuild. But it’s a problem in the U.S. too.

A typical Fortune 100 risk manager today will say they can transfer around 20 to 25 percent of their risk via an insurance product. Everything else, they have to find other ways to mitigate.
That raises a more systemic problem for the industry — the ability to stay relevant. Alternative capital has changed the playing field quite a bit. The development of models that allow non-traditional players to model a loss and sell insurance at a different price point also adds pressure. The traditional insurance cycle is dead, and traditional carriers have to get smarter and be able to access cheaper and more efficient capacity.

That raises a more systemic problem for the industry — the ability to stay relevant

R&I: How does talent shortage affect the industry’s fight to stay relevant?

JT: In order to innovate, we need to attract more young people with tech skills as well as underwriting talent.

We’ve had a 10 to 20-year gap where the industry has not attracted talented underwriting minds. When I first started in the industry there were great training programs, but most of them have disappeared due to budget cuts.

In recent years, corporations have increased their efforts to reach into academia and introduce the industry to college students, representing insurance as a place where you can build a great career. But we still have an image problem; we have to do more to portray this industry as not just “solid,” but interesting and essential and full of great people.

We are getting better at recruiting though. We’re bringing in some smart people. I often think ‘If I were a kid today, I wouldn’t get hired!”

R&I: Do you think the traditional cycle has been altered?

JT: The pricing challenge is not going to go away. We’re selling products across the industry at a cost that’s not sustainable because there’s too much capital out there to get the price we need, and the losses just keep getting bigger. We have to get more disciplined in our underwriting, and more efficient in our operations across the board. That’s where innovation and Insurtech can help take some cost out of the equation.

R&I: What does the innovation landscape look like right now? How are insurers making efforts to innovate?

JT: Lots of companies are making investments both internally and externally to develop and execute new ideas. We’ve gotten serious about it under Mike McGavick’s watch here in the last four or five years and have taken it to a new level.

In order to innovate, we need to attract more young people with tech skills as well as underwriting talent.

At XL Catlin, it’s an expectation that every day, in addition to your day job, you’re responsible for thinking innovatively and trying to come up with new ways of doing things or improving a product. Several years ago we launched XL Innovate, our joint-venture investment and start-up firm. This group gets pitched new ideas every day, so it gives us a front row seat to watch what’s going on, and then pick and choose where we want to make investments.

We also have a group internal to us called Accelerate that works directly with our business units to leverage new ideas. They quickly vet ideas, match them with the business unit that has a need, and gauge interest. Last year we introduced about 25 new products or services, and this year we’ve launched about a dozen so far.

R&I: What’s appealing to you about working in insurance?

JT: I love being able to solve problems for our clients and build relationships. Some of the people that I’ve met in this industry are some of my very, very dear friends that were business acquaintances at one time.


To get exposure to all these different people from different walks of life and different industries all over the world, and understand a little bit about each one of them, makes every day a new adventure. There’s something new to learn every day. I feel blessed to have been given this opportunity to work in this industry.

R&I: What’s next in your career journey?

JT: XL Catlin was recently acquired by AXA Insurance, and I think that will bring us some additional capital to enable us to move faster. We share a similar long-term vision for what we want to build. I’m personally very excited for the opportunity that it’s going to present to us here in North America particularly, but also for the organization on a whole. And I think that that excitement is very much felt throughout the organization. &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Report: Manufacturing

More Robots Enter Into Manufacturing Industry

With more jobs utilizing technology advancements, manufacturing turns to cobots to help ease talent gaps.
By: | May 1, 2018 • 6 min read

The U.S. manufacturing industry is at a crossroads.

Faced with a shortfall of as many as two million workers between now and 2025, the sector needs to either reinvent itself by making it a more attractive career choice for college and high school graduates or face extinction. It also needs to shed its image as a dull, unfashionable place to work, where employees are stuck in dead-end repetitive jobs.


Added to that are the multiple risks caused by the increasing use of automation, sensors and collaborative robots (cobots) in the manufacturing process, including product defects and worker injuries. That’s not to mention the increased exposure to cyber attacks as manufacturers and their facilities become more globally interconnected through the use of smart technology.

If the industry wishes to continue to move forward at its current rapid pace, then manufacturers need to work with schools, governments and the community to provide educational outreach and apprenticeship programs. They must change the perception of the industry and attract new talent. They also need to understand and to mitigate the risks presented by the increased use of technology in the manufacturing process.

“Loss of knowledge due to movement of experienced workers, negative perception of the manufacturing industry and shortages of STEM (science, technology, engineering and math) and skilled production workers are driving the talent gap,” said Ben Dollar, principal, Deloitte Consulting.

“The risks associated with this are broad and span the entire value chain — [including]  limitations to innovation, product development, meeting production goals, developing suppliers, meeting customer demand and quality.”

The Talent Gap

Manufacturing companies are rapidly expanding. With too few skilled workers coming in to fill newly created positions, the talent gap is widening. That has been exacerbated by the gradual drain of knowledge and expertise as baby boomers retire and a decline in technical education programs in public high schools.

Ben Dollar, principal, Deloitte Consulting

“Most of the millennials want to work for an Amazon, Google or Yahoo, because they seem like fun places to work and there’s a real sense of community involvement,” said Dan Holden, manager of corporate risk and insurance, Daimler Trucks North America. “In contrast, the manufacturing industry represents the ‘old school’ where your father and grandfather used to work.

“But nothing could be further from the truth: We offer almost limitless opportunities in engineering and IT, working in fields such as electric cars and autonomous driving.”

To dispel this myth, Holden said Daimler’s Educational Outreach Program assists qualified organizations that support public high school educational programs in STEM, CTE (career technical education) and skilled trades’ career development.

It also runs weeklong technology schools in its manufacturing facilities to encourage students to consider manufacturing as a vocation, he said.

“It’s all essentially a way of introducing ourselves to the younger generation and to present them with an alternative and rewarding career choice,” he said. “It also gives us the opportunity to get across the message that just because we make heavy duty equipment doesn’t mean we can’t be a fun and educational place to work.”

Rise of the Cobot

Automation undoubtedly helps manufacturers increase output and improve efficiency by streamlining production lines. But it’s fraught with its own set of risks, including technical failure, a compromised manufacturing process or worse — shutting down entire assembly lines.


More technologically advanced machines also require more skilled workers to operate and maintain them. Their absence can in turn hinder the development of new manufacturing products and processes.

Christina Villena, vice president of risk solutions, The Hanover Insurance Group, said the main risk of using cobots is bodily injury to their human coworkers. These cobots are robots that share a physical workspace and interact with humans. To overcome the problem of potential injury, Villena said, cobots are placed in safety cages or use force-limited technology to prevent hazardous contact.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them.” — David Carlson, U.S. manufacturing and automobile practice leader, Marsh

“Technology must be in place to prevent cobots from exerting excessive force against a human or exposing them to hazardous tools or chemicals,” she said. “Traditional robots operate within a safety cage to prevent dangerous contact. Failure or absence of these guards has led to injuries and even fatalities.”

The increasing use of interconnected devices and the Cloud to control and collect data from industrial control systems can also leave manufacturers exposed to hacking, said David Carlson, Marsh’s U.S. manufacturing and automobile practice leader. Given the relatively new nature of cyber as a risk, however, he said coverage is still a gray area that must be assessed further.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them,” he said. “Therefore, companies need to think beyond the traditional risks, such as workers’ compensation and product liability.”

Another threat, said Bill Spiers, vice president, risk control consulting practice leader, Lockton Companies, is any malfunction of the software used to operate cobots. Then there is the machine not being able to cope with the increased workload when production is ramped up, he said.

“If your software goes wrong, it can stop the machine working or indeed the whole manufacturing process,” he said. “[Or] you might have a worker who is paid by how much they can produce in an hour who decides to turn up the dial, causing the machine to go into overdrive and malfunction.”

Potential Solutions

Spiers said risk managers need to produce a heatmap of their potential exposures in the workplace attached to the use of cobots in the manufacturing process, including safety and business interruption. This can also extend to cyber liability, he said.

“You need to understand the risk, if it’s controllable and, indeed, if it’s insurable,” he said. “By carrying out a full risk assessment, you can determine all of the relevant issues and prioritize them accordingly.”

By using collective learning to understand these issues, Joseph Mayo, president, JW Mayo Consulting, said companies can improve their safety and manufacturing processes.

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it.” — Joseph Mayo, president, JW Mayo Consulting

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it,” Mayo said. “They can also use detective controls to anticipate these issues and react accordingly by ensuring they have the appropriate controls and coverage in place to deal with them.”


Manufacturing risks today extend beyond traditional coverage, like workers’ compensation, property, equipment breakdown, automobile, general liability and business interruption, to new risks, such as cyber liability.

It’s key to use a specialized broker and carrier with extensive knowledge and experience of the industry’s unique risks.

Stacie Graham, senior vice president and general manager, Liberty Mutual’s national insurance central division, said there are five key steps companies need to take to protect themselves and their employees against these risks. They include teaching them how to use the equipment properly, maintaining the same high quality of product and having a back-up location, as well as having the right contractual insurance policy language in place and plugging any potential coverage gaps.

“Risk managers need to work closely with their broker and carrier to make sure that they have the right contractual controls in place,” she said. “Secondly, they need to carry out on-site visits to make sure that they have the right safety practices and to identify the potential claims that they need to mitigate against.” &

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]