In August of 2020, the third party administrator Sedgwick announced that it was naming Mike Arbour as its new CEO. Arbour came to the organization via its acquisition of Vericlaim in 2014.
This summer, Risk & Insurance interviewed Arbour about his position and perspective on the company’s opportunities. What follows is an edited transcript of that discussion.
Risk & Insurance: First off, congratulations on the appointment, Mike. As you take the reins at Sedgwick, what opportunities are you excited about?
Mike Arbour: If you walked through the halls of Sedgwick, you’ve got as many of our leadership team as excited about the opportunities that are in front of us in the marketplaces we’ve ever been.
Very often, our most compelling new opportunities come from listening to the evolving and changing needs of our clients. In some ways, the changes that have been forced on the world as a result of the pandemic have caused risk managers and insurance companies to have to think in very new ways and better ways about solving an array of both traditional and rapidly changing challenges.
In my view, I think much of the world has spent the last 15 or 16 months waiting to return to normal. We have not, and are not. Declaratively are not. We don’t talk about normal.
There’s no old normal, no new normal, no return to normal, there’s only change.
In this case there were a different set of exogenous factors that caused the change, but it’s just change. The world has always changed and at Sedgwick, culturally, we embrace change. We love change. We thrive on the opportunity to stay ahead of and stay in touch with our client’s needs as they start to think really differently about protecting their physical assets, protecting their employee and people assets and protecting their brands.
Today, we’ve got the broadest array of things we can do for clients around the world. We’ve got more than 150 different distinct service lines today to offer clients around the world. The opportunities in front of us are to bring more solutions and more innovation to the market as it continues to change.
R&I: Over the past 14 months and again, coming into the present time, in doing what you want to do and respond to customers, where were the biggest challenges for you?
MA: I would tell you that challenge number one for us almost always, is around people in talent. At its simplest level, our objective is to make Sedgwick the best place to work for the best claims talent in the world.
The theory is, if we’ve got all the most awesome claims people in the world, then people are going to want to work with us.
We see a clear value in the office, but it wasn’t driven by anything that we saw inherently wrong about this work at home environment, if that makes sense.
The job and the challenge then becomes, how do you make it an unbelievably awesome place to work?
Consequently, we spend an extraordinary amount of time with our leadership teams trying to create a great and positive work environment and a great and positive work experience for our colleagues. To make it a place where they can thrive and grow and collaborate and provide the very best service experience to our clients in each one of the markets we work in around the world.
If the talent issue isn’t job one or challenge one, it’s present almost all the time. I think secondly, in today’s world, I think most companies wish they had more capital available to spend on technology and innovation.
I don’t think we’re much different in that regard. The possibilities enabled by new and evolving technology feel almost limitless. The problem is nobody’s budget is limitless, so creating more capacity for ourselves to invest in those areas is both a challenge and opportunity for us.
R&I: That can be a tricky one, isn’t it? Because we know the stories about companies that have loaded tens of millions into technology and it didn’t work out too well.
MA: Absolutely. Today, the world is spending just as much on analytics, decision-making, intelligence and mobility and it hasn’t bifurcated the spend, but what it’s done is it’s created this new need that didn’t use to exist.
The breadth of our customer base, the breadth of our scale today allows us to make a lot of investments in all of those areas. We wake up and we think about claims every single day. It’s why I believe we’re a great partner for our clients. We’ve got the ability to make significant investments in the areas of predictive analytics, virtual capabilities, automation, mobility. I’ll tell you, we’re so committed to the potential of data and analytics that we have completely separated it out from normal IT infrastructure, communication, software and applications. It is its own thing at Sedgwick.
R&I: Looking at performance in claims and you think about pre-COVID, you think about the brunt of COVID, is it possible to gauge, Mike, how Sedgwick’s team performed pre-peak and now, was there a drop-off? Do you think you’ve improved performance? How would you qualify that?
MA: I can qualify it. I definitely cannot quantify it. Anecdotally, I don’t believe we saw any disruption in productivity, service levels, service experience, quality results impact at all. I think part of that was the whole world got a hall pass for a month or so as everyone kind of figured it out, but the empirical evidence comes from our clients and what they say and how they behave and how they feel about what we do.
We have had awesome results on programs with our clients, whether it’s self-insured corporations, municipalities or big commercial insurance companies. I’m careful not to put what I think or believe into too many situations. Despite what I might ordinarily think, the performance has been spectacular.
I think the biggest challenge is when you are a manager and leader of people and those people are not around, that is a hard job. It’s a hard job on a Tuesday. It’s a really hard job doing it remotely.
I think we’ve got 3000-plus people managers in the company and they crushed it. They were fantastic during a really, really challenging set of circumstances. I think we all have some inherent beliefs about productivity in a work at home environment. It’s hard to fathom, but what I think people have done is just figured out a different rhythm and we still philosophically, and will continue to place a lot of value on the office.
What the pandemic has allowed us to do is think about the why of the office. Today, the why is really clear to us. I’m going to use five C’s here. The office for us is a place for collaboration, culture, cooperation and communication and for career development. You need some element of an office to foster those things.
If you are a young professional in this industry, the communication piece is important. As a company leader, culture’s super important and I can talk about culture, but I don’t make the culture in the office. Those colleagues make the culture. They make it fantastic. They’ve got to be there a little bit to do that and for those concerned about career advancement, career development and training, you’ve got to have some component of in-person.
Then ultimately when it comes to delivering consistent value and great service to clients, we’ve got to be able to collaborate as a team and all our businesses require that. We see a clear value in the office, but it wasn’t driven by anything that we saw inherently wrong about this work at home environment, if that makes sense.
R&I: I think a lot of people had that experience, it crystallized, what do I need the office for? Well, here’s what I need the office for.
MA: I promise you, I couldn’t have answered that question very clearly two years ago as clearly as I can now.
R&I: Speaking of career paths, we were curious about the things that influenced you, that brought you to this point in time.
MA: I will tell you the single most valuable thing from an experiential standpoint is the time I spend listening and meeting and seeing and hearing both our clients and our colleagues. It is the best chance to learn.
What I tell people all the time is I’ve got a touchpoint with the world. I have a touchpoint with our clients. I have a touch point with you guys, a touchpoint with our colleagues, but they have touchpoints too.
Their touch points are a lot closer to our people and our clients and the challenges in the marketplace and the challenges in the business of our clients. I will tell you, it is energizing, awe-inspiring to hear what they say and just as importantly, see what they do day to day.
Those experiences are very real. They give me personally, a lot of clarity of focus on things we need to be concentrating on and the relationships they have.
You guys know what our client base looks like. It is big and diverse and they are all important. Those relationships are all important and getting a chance to listen direct… Almost like a work from home scenario, we talked about a minute ago. It is easy to throw a little conjecture into thinking about what they want to fix, what they need to solve, what is their challenge.
If I handle 10 big retailer accounts over here, and then I go to the 11th here, it’s easy for me to assume that I know what they need to solve, but if you are not careful about how much you’re listening instead of prescribing, it’s hard.
I don’t know if it’s interesting or not, but I did not grow up in the insurance business or the claims business.
As a result, that deep technical expertise that 26,999 of our other colleagues all have, I don’t have, but it also means I don’t have the bias of walking into a client meeting with a perspective on how a worker’s compensation program needs to run or how a property program needs to run. As a result, culturally, we listen hard because the needs are all different and they change fast.
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