INSURANCE CASE STUDY: The Power of Team Performance

Creating a Predictive Model to Improve Underwriting Team Effectiveness

Executive Summary

The successful identification of the factors influencing underwriting performance was a major step forward in understanding. The study, designed and conducted by Christina Griffiths & Birkbeck University, with the support of one of the leading players in the insurance industry, clearly established a link between cognitive ability, decision making styles and risk attitudes that directly impacted and predicted job performance.

The identification of the psychometric measures was a first in the academic world and the underwriting industry. Combining Christina’s strong business focus and academic acumen, she focused the next phase of her work on using the job performance factors to develop a ‘Team Effectiveness Framework’ to predict the performance of underwriting teams.

The selected organization, a large global insurance company (LGIC), which had already demonstrated their commitment to the project as a way of driving industry knowledge further, continued their support of the work and provided access to several of their high-performing underwriting teams as participants in the study.

As a result of this second phase of research, a highly efficient Team Effectiveness Framework supported by a set of established and well-tested psychometric instruments was developed.  Taking a comprehensive approach, these tools enabled the identification of a broad set of variables, which identified team performance in terms of conditions, processes, outputs and feedback.

The efficacy of the framework was tested on multiple teams within the LGIC and proved to have a strong ability to predict team performance. This in turn had an impact on recruitment, retention and long-term development of the teams.

Premise

The 2012 study on Underwriter Job Performance conducted with Insurance Underwriters, provided some ground-breaking insights into the drivers of individual underwriting performance. The driving premise behind the research was that, statistically speaking, human beings do not tend to make good decisions about the perceptions, abilities and behaviours of other human beings.

Psychometrics provide a dispassionate means of assessing these factors, and, in turn, provide insights that are more accurate than those available through simple, and often short-term interactions.

The successful identification of the individual factors, lead to the second phase of the research, which focused on using these factors in a team environment to predict team performance.

The Research

The support of the LGIC during the research process was critical in testing the framework in a live environment. In providing access to several of its underwriting teams, managers and underwriters, the LGIC enabled the study to be a practical, result-focused endeavour. The research was divided into two phases:

Phase 1

  1. Using a Job Performance measure, developed through detailed discussions with the Group Underwriting Board, the UK Underwriting teams were ranked in order, independently of the research team.
  2. Two underwriting teams of differing performance were selected from the same insurance business category.
  3. A series of psychometric tests were selected, adapted and administered to the selected underwriting teams.
  4. The data provided had to predict the relative performance of the selected teams and relate this assessment back to the Job Performance measure.

Phase 2

Using the psychometric tests developed and then tested during Phase 1, the next step was to use and improve the psychometrics and delivery process by running the project again, but selecting two underwriting teams from two different business insurance categories.

In both phase 1 & 2, the research was undertaken by the researcher without knowing where each team was ranked in terms of the team job performance measure.

For Phase 1, Psychometric tests based on the predictive job performance factors identified in the earlier study were tested and shown to provide reliable insight into individual ability and behaviour. Additional research enabled the identification of the Team Effectiveness Framework that was able to identify and measure team performance among Underwriters across 4 key indicators. Team based psychometric tests were used to test the efficacy of the model across its components.

Once the results of Phase 1 were reviewed and found to be an accurate predictor of team performance, Phase 2, which focused on two different underwriting teams was implemented.  The analysis focused on the 4 components identified as a part of the Team Effectiveness Model.

  • Conditions: Representing the context and people components, measuring “demand vs. capabilities”. Teams are considered effective when the capabilities of the team are considered equal to or greater than the demands placed upon it.
  • Processes: Different task and team focused behaviors including managing information, making decisions, maintaining vision and intent while motivating and adapting to the needs of the team. These behaviors utilize the strengths inherent in the capabilities component of the model.
  • Outcomes: These were considered on the basis of the team achieving its goals, its “Task Outcomes” and continuing to develop itself “Team Outcomes”.
  • Feedback: The model provided multiple feedback loops within it to enable adjustments on processes, conditions and overall organizational learning.

Results and Application

The two phases of the research identified clear, actionable differences among high-performing teams of Underwriters. The Team Effectiveness Framework and accompanying instruments took a comprehensive approach to evaluating teams and identifying a wide variety of variables that can provide insight into what is happening within a team in terms of its conditions, processes, outputs and feedback.

The analysis also enabled the identification of clear steps to be taken to enhance performance on an individual, team and organizational level, including skills training, changes to business strategy and how talent was retained and engaged.

The Team Effectiveness Framework provided a range of reports to support future activity:

  • Team Effectiveness reporting to identify gaps for under-performing teams
  • Team Member Effectiveness reporting to be used during the recruitment of team members into new teams, or the restructuring of existing teams
  • Targeted Team Effectiveness program to action the key findings from the Team Effectiveness report.
  • Team Intelligence Model, where intelligence gathered from the team reporting is used to build a model that better predicts the company Team Job Measure

Some of the specific benefits of using this model included:

  • Improved Underwriting Team performance, based on the Job Performance Measure
  • Leveraging existing talent and enhancing engagement by focusing on building up existing strengths of team members
  • Improved ability to attract and retain new talent to the strong teams, offering high levels of morale and cohesion
  • Development of additional programs to improve how teams operate within the organisation

Conclusion

The development of the Team Effectiveness framework is a great stride forward in the world of Insurance Underwriting. With the ability to analyse and understand the drivers of individual and team performance, the quality of recruitment, development, and retention is enhanced, leading to stronger performance across the board. The Team Effectiveness Framework provides insight and practical, actionable intelligence, and enables a more effective way forward for the management of high-performing underwriting teams.

The Partner Organization

The LGIC was a P&C insurer and reinsurer with six underwriting hubs in London, Bermuda, the United States, Asia Pacific, Europe, and Canada. Domiciled in Bermuda and listed on the London Stock Exchange, it owned and managed the largest Lloyd’s syndicate since 2000 and had a network of offices in more than 50 cities with more than 2,300 employees in 25 countries. It had a deep commitment to research and innovation and furthering the state of knowledge in the industry within which it operated.  Since the time of this study, it has merged with another large global insurance company to form one of the world’s largest providers of insurance underwriting services.

About Christina Griffiths

Christina is a globally oriented and innovative NED and consultant psychologist, with extensive experience in the insurance, technology, and consultancy sectors. She has a track record in improving the performance and productivity of revenue-critical professionals. By combining her scientific expertise and commercial acumen with emotional sensitivity and natural curiosity, she is able to improve the capability of organisations, teams and individuals.  As a result of collaborating with her clients, they report that they find the insight and courage to make the changes required to improve performance and raise their game

INSURANCE CASE STUDY: The Power of Individual Performance

CATLIN CASE STUDY – Predicting Individual Underwriting Job Performance

Introduction and Executive Summary

As one of the market leaders in the global insurance market, Catlin has always been at the forefront of performance with some of the most highly skilled underwriters in the world. The approach by Consultant Psychologist Christina Griffiths, in conjunction with Birkbeck University London, to be a part of a research study into the factors determining underwriter job performance, was viewed by Catlin as an opportunity to support cutting-edge academic research focused on furthering the state of knowledge for the Underwriting Industry.

The study was developed as a scientific research project, with a strong business focus and impact. It focused on using psychometric tools to identify predictive factors of job performance among underwriters within the USA and UK, including the Lloyds market. With Catlin’s support, the project was completed successfully and Christina became the first person to establish a clear link between cognitive ability, behaviour, decision-making styles, risk attitudes and job performance.

The 8 factors identified demonstrated a strong link towards predicting underwriter job performance. Using psychometric testing, these factors enable organisations to make more informed recruitment, talent management, and professional development decisions for enhanced Underwriter effectiveness.

The Premise

Job performance is a critical aspect of any business. This is especially true in the world of insurance underwriting, which has always relied on the skills of its underwriters as the key drivers of business success. The underwriting market continues to grow and shift, with greater automation of simple analytical tasks, creating avenues of opportunity in more complex, high- value underwriting areas.

As the opportunities for underwriters demand more skills and higher levels of effectiveness, the talent pool for these critical skills is actively shrinking. Finding, developing and retaining talent is critical, but in the absence of clear parameters for job performance, the decisions made tend to be biased.

The ability to identify the parameters that drive job performance and the use of psychometric tests to look for these skills in potential underwriters would be invaluable. The objective of the study was to use scientific methods to create a model of high performers in the Underwriting industry based on specific behaviours and abilities

The Research

As one of the leading providers of Insurance Underwriting services, Catlin’s strong support of the research extended to providing Christina with access to some of its most valuable resources, its Underwriters and their Supervising Managers.  Due to the nature of the research, participation was on a strictly voluntary basis across two geographies, the UK and the US.

It was also essential to reassure the participants, both underwriters and their managers of the confidential nature of their individual responses.  A series of confidence building steps were undertaken to maximize the comfort level of the participants and the researcher was available on a personal level throughout the project to address any questions on a 1-2-1 basis.

An initial brief of the purpose and aims of the study was provided by Paul Brand, the Chief Underwriting Officer of Catlin to participants in the UK and US offices. Detailed instructions in video and written format were also provided to all participants to foster a common understanding of the requirements of the online questionnaires.

The focus of the research was on identifying and measuring indicators of cognitive ability, personality, decision-making and background styles. A second, separate questionnaire was also sent to their supervising managers to gain an external perspective of job performance.

The Results

The analysis of the data revealed eight factors that demonstrated an impact on job performance amongst insurance underwriters:

  1. Cognitive Ability: High performers are likely to be better at abstract thinking, reasoning and problem solving in complex working environments
  2. Emotional Stability: Higher performers are more likely to demonstrate behavior, which is hardy and generally relaxed, even under stressful conditions
  3. Risk Ability: High performers are likely to have strong statistical numeracy and risk literacy, and therefore be better able to evaluate claims and interpret forecasts
  4. Decision Making Confidence: High performers are less likely to feel confident in decisions they make for themselves compared to lower performers, creating a false image of confidence among low performers in their dealings while being less effective
  5. Decision Making Option Generation: Higher performers see themselves as being able to create alternative options rather than simply accepting those available, leading them to provide better solutions when carrying out core tasks and responsibilities.
  6. Decision Making Avoidance: High performers are likely to see themselves as less constrained, and more decisive in their decision-making. Once a choice has been made they do not delay putting those decisions into practice
  7. Risk Attitude to Ethics: High performers saw themselves as being more risk adverse in attitude when it comes to situations which might involve compromising moral standards
  8. Risk Attitude to Health and Safety: Higher performers are more likely to see themselves as having a greater appetite for risk when pertaining to or dealing with the general condition of the body or mind relative to the other sample groups

Application Potential

The identification of these eight factors is critical, as it identifies a practical, unbiased way of assessing potential job performance in the critical field of insurance underwriting. Christina was the first person to identify a clear link between decision-making styles, risk attitudes and underwriter job performance.

The applications for this research are far reaching. Using psychometric testing for these factors would help companies identify, hire and develop the right underwriting talent for the short and long-term. While these factors are not the sole determinants of performance, they do present a significant step forward in the process.

Catlin’s role in supporting this research has been critical to its success, indicative of its forward thinking and commitment to furthering the state of knowledge in the underwriting industry.

About Catlin

Catlin Group Limited was a global P&C insurer and reinsurer with six underwriting hubs in London, Bermuda, the United States, Asia Pacific, Europe, and Canada. Domiciled in Bermuda and listed on the London Stock Exchange, Catlin owned and managed the largest Lloyd’s syndicate since 2000 and had a network of offices in more than 50 cities with more than 2,300 employees in 25 countries. Catlin had a deep commitment to research and innovation and furthering the state of knowledge in the industry within which it operated.  Since the time of this study, it has merged with XL to form XL Catlin one of the world’s largest providers of insurance underwriting services.

About Christina Griffiths

Christina is a globally oriented and innovative NED and consultant psychologist, with extensive experience in the insurance, technology, and consultancy sectors. She has a track record in improving the performance and productivity of revenue-critical professionals. By combining her scientific expertise and commercial acumen with emotional sensitivity and natural curiosity, she is able to improve the capability of organisations, teams and individuals.  As a result of collaborating with her clients, they report that they find the insight and courage to make the changes required to improve performance and raise their game.

 

 

INSURANCE CASE STUDY – Leadership Teams

The Power of Effective Collaboration and Groups Within a Matrix Structure in a Global Insurance Company

Background

The client is a large Global Insurance Company based in Europe with executive offices in several other locations including the United States. It specialises in Property and Casualty insurance and reinsurance and serves clients that range from large corporations to specialised businesses across more than 200 countries.

The focus for the organisation lies in serving clients with collaboration and ingenuity, providing smart answers to complex risks. The strong client focus means that it relies on its people to provide the drive and knowledge to deliver the highest standards of service. Both internal and external trust are a cornerstone of ongoing performance.

The Engagement Environment

A little over 18 months ago, the client acquired another large global insurance company, increasing its size and footprint substantially. The new consolidated Insurance Leadership Team (ILT) brought together leaders from both organisations into a new “federated matrix structure” The Chair of the team instigated a program with CGA Management to support the ILT during the emergent changes demanded of the teams to align with the new structure.  Involvement in the programme was voluntary, attracting leaders and their groups who were keen to fast track their progress towards high performance.

Overall ten (10) members of the ILT, from different geographical and functional areas of the organisation chose to engage with CGA during the process. The objective of the participating ILT members was tofast-trackk the development of their groups and teams to reduce employee uncertainty so that they could:

  • Keep focused on achieving ambitious business objectives
  • Lead by example
  • Actively shape the emerging new organisational culture

The Challenge

During the organisational transition, employees wanted to feel a greater sense of certainty, both in terms of understanding their place within the organisation, but also of how things get done within the new organisational structure. Whilst the merging organisations had agreed that they shared similar cultural aims, the newly formulated federated matrix structure demanded greater collaboration, both virtual and multi-cultural, and more developed multi-functional working than either organisation had experienced before.

The Solution

The objective of working with CGA Management and Christina was to fast-track the teams and groups to a higher level of performance, using a mix of appropriate support and interventions.  This notion, supported by academic and practitioner evidence, would enable the teams to accelerate the benefits received, as opposed to if the developmental process had simply been left to chance, time or trial and error.

After discussions with the members of the ILT team involved, key stakeholders and critical HR Business Partners, Christina developed a programme that met the following design requirements:

  • Create an understanding of the team’s strengths and challenges and actionable points on which to make progress
  • Give a framework and common language to chart progress of group and team development
  • Provide deeper understanding of how to operate effectively within the Federated Matrix Structure
  • Ensure suitability for multi-cultural and virtual work environments
  • Deliver maximum value with minimal impact on participants’ schedules
  • Be flexible enough to meet the differing demands of each of the groups
  • Help the participants feel supported and empowered
  • Provided individual, team, group and organisational levels of analysis.

The vehicle for delivering these requirements included a range of diagnostic tools and workshops.

The Results

Overall participants reported that they experienced powerful results in three main areas:

  1. Gaining insight into their own strengths and challenges both as an individual and as a collaborator within a matrix structure.
  2. Understanding of the facets that describe the current level of effectiveness in a group or team
  3. The mix of team roles and competencies that contribute to delivering high performance

When asked to rank the results of the program across key parameters, individuals noticed they felt more patient when working with different people, more hopeful that their peers would be able to work more collaboratively with them and that they had greater feeling of confidence on what action to take in order to become more effective.

Specific results from the engagement indicated that:

  • 92% reported that the programme as a good/excellent use of time and resources
  • 92% reported that the programme provided insight into their personal strengths and areas of challenge as a collaborator in different Teams and Groups.
  • 96% reported that the programme had helped them understand how to improve group/team performance
  • 96% reported that the programme helped identify group/team strengths and areas of challenge
  • 88% reported that the programme helped clarify the key themes that will assist the organisation in becoming more capable
  • 88% reported that the programme had given them confidence to take action

Leadership Comments

The leaders shared the following advice for others considering using this service:

‘it is an excellent tool to start the process of embedding teams that are new to each other to help create better understanding, break down initial barriers and create a directional improvement in interactions’

 ‘Do it, it’s is an eye-opener and very valuable for teams working under “urgency”-mode’

‘Very worthwhile but invest time and be open to receive the results/feedback’

‘I think it adds clarity to items many people may already be thinking but have not verbalized or do not know are common throughout the company.’