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The Profession

Russell Johnson

Skanska USA Building’s VP of Insurance and Surety knows that sharing data helps combat risk of all kinds.
By: | September 14, 2016 • 4 min read

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R&I: What was your first job?

I was a financial analyst with Household Finance Corp. after graduating from college.

R&I: How did you come to work in risk management?

I was an accountant for a long time in the construction industry. Once I became a financial manager, that role started to take on some risk management responsibilities and sort of became a dual role. Then the opportunity came up to move to Skanska and do it full time, so that’s what I did.

R&I: What is the risk management community doing right?

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We’re taking a much more holistic view of risk instead of staying in silos, so it’s not just about insurance, it’s not just about financial risk, or any one thing. It’s about looking at the business holistically.

R&I: What could the risk management community be doing a better job of?

We could be doing a way better job of sharing data around both leading and lagging indicators of what’s driving risk decisions. We all have enough data to get an individual picture of how our businesses are doing, but we’re not sharing very well within the industry.

R&I: What was the best location and year for the RIMS conference and why?

I’ve never been to RIMS. I’ve always gone to IRMI. I would say San Diego has been the best location for that conference because of the great weather, which makes for a nice place for people to relax and get together. IRMI is usually in early November, and that time of year, not every location is nice. But in San Diego it’s almost always a nice day, and that makes people want to go out and meet each other.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

As a New York contractor, the biggest change has been the exposures in New York and emphasis on our industry there. It seems that now in construction there’s everywhere else, and then there’s New York; it’s become a separate entity.

Another change has been the sharing of risk between us and the insurance industry. When I came into the industry, we were leaving most of the risk with the insurer, and now we’re taking on much more of it ourselves and sharing it with carriers.

R&I: What emerging commercial risk most concerns you?

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Labor risk is huge. The subcontractor community is stretched very thin both in terms of labor and the number of projects that are out there. I know everyone wants to talk about cyber risk, but talent shortage is a more critical risk for our business right now. Everything else will fall apart if we don’t fix that problem first.

R&I: How much business do you do direct versus going through a broker?

We do everything through a broker.

R&I: Is the contingent commission controversy overblown?

Yes. Even if a broker bundles up a bunch of policies, they still have to sell you what you need and the policy still has to do what it has to do. If bundling together a good policy over multiple clients gives them the ability to make a few extra dollars on it, I don’t have a problem with that. It just has to be transparent.  Transparency is what it comes down to.

R&I: Are you optimistic about the U.S. economy or pessimistic and why?

I’m cautiously optimistic. I think better days are ahead if we don’t overthink or overregulate ourselves.

R&I: Who is your mentor and why?

I couldn’t identify one person, but I do have a few folks that I rely on. I’m a strong believer that you need a variety of points of view.

R&I: What have you accomplished that you are proudest of?

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From a personal perspective, it’s raising four kids that so far — knock on wood — seem to be solid citizens.

R&I: What is your favorite book or movie?

I love science fiction and fantasy movies. I have not seen the new Star Trek yet, but that’s on my list.

R&I: What’s the best restaurant you’ve ever eaten at?

There are way too many in New York to choose just one.

R&I: What is the most unusual/interesting place you have ever visited?

Prague, in the Czech Republic. I was there for business and extended the trip. I’ve been to quite a few cities in Europe, and there’s usually some area that’s historic, and in Prague that area is much larger. It’s full of shops and restaurants and interesting sights.

R&I: What about this work do you find the most fulfilling or rewarding?

Helping my folks on a day-to-day basis get through whatever roadblocks they encounter. I like to use my own expertise to help them move their day along and solve whatever problem is bogging them down.

R&I: What do your friends and family think you do?

As hard as I try, it’s tough for them to understand. Saying that I buy insurance isn’t really descriptive of what I do because it happens only occasionally. My son is a civil engineer, so he understands parts of it. I’m really working hard with my three daughters to get them interested in the construction business, because there are so many things you can do.




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

More from Risk & Insurance

More from Risk & Insurance

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.