Ridesharing, peer-to-peer payment apps, self-driving cars - these are just some of the innovations that came about in the last decade, and insurance helped to make them happen long before they reached consumers, says Sandra Bograd, lecturer for the new Insurance Management master’s program at Columbia University.
What kind of phone did you have in 2010? Were you regularly transferring money virtually? How about using it to commission a stranger to drive you to an event or appointment? Sandra Bograd says that’s because while most consumers were still doing simple tasks on their smartphones like reading emails, early startups were engaging with insurance providers to find ways to manage the risks of introducing new and disruptive products to the marketplace. Bograd shares insights from her career as well as projections for what the future will hold for professionals entering insurance enterprises.
You have a J.D. What led you to work in insurance and risk management?
I had no idea that I would be going into insurance. I had a business degree when I entered law school. After a judicial clerkship, I became a public prosecutor, prosecuting and later defending individuals and companies charged with corporate crimes. At about that time, the U.S. Sentencing Guidelines for Organizations came into effect and I became very interested in working with corporations to proactively find problematic corporate behaviors before they happen. I would introduce interventions and controls into the corporate processes that would help to minimize the risk that bad conduct introduces into a business and work with their insurance coverages on how they could have coverage for that.
A few years later, I went to work for a global insurance company that was at the forefront of creating new products to cover the risks of new and disruptive technologies and commercial behaviors. Once I got there, I just fell in love with the insurance business. What I discovered is that insurance is a really intricate part of the how and why new strategies, technologies, services and even emerging economies develop. Sure, an insurance policy is a protective measure, but it is also a license to innovate, to disrupt, and to adapt to our rapidly changing world. Inventors, investors, and users venture into new technologies – and create new opportunities and ways of doing things – only if they can hedge against uncertainty by covering the myriad of risks from introducing something new and different. Forward-thinking, industry-leading insurance companies are there to develop new products to cover the emerging risk as well as the established risks. All of this is really interesting to me.
Even though I went to AIG to help them with my specialty in anti-corruption and anti-fraud, the business of insurance became very interesting to me in the process. Ultimately, insurance and conduct risk management became my specialty and the main vehicle by which I helped push companies to do better, be better, and have more proactive compliance programming in place to minimize financial crimes, fraud, and corruption.
Students who enroll in this program will see that the industry is alive with possibilities to bring new ideas to meet the new ways of doing business. Insurance products and insurance rates are built on risk assessment and modeling."
How do you explain the vitality of the insurance business to a person who’s unfamiliar with the industry?
The insurance industry offers so many opportunities. Whether you are analytical or technical, tactical or strategic, right-brained or left-brained, technically savvy, or just looking for a career that could take you around the world, the insurance industry has a role for you.
Let me give you a new technology example: Cryptocurrency is sometimes known as the distributed ledger economy. Say an individual engages in a crypto transaction. For some reason, the transaction goes wrong. Product development teams and futurists at insurance companies have already anticipated the potential problems that could arise and are starting to offer cyber coverage to provide the protections that businesses and individuals will need to be willing to take on new disclosures, new technologies, and to really be forward-thinking. If the business, in our example the cryptocurrency industry, feels like something could go wrong – like the theft of crypto coins by a cyber-hacker or the collapse of a crypto exchange – they will need coverage to avoid incurring liabilities.
So if you are someone who is interested in being part of the rapidly changing way business gets done these days, the insurance industry gives you a front-row seat and in most cases a speaking part in its development. You’ll see it happening wherever there’s a new trend because it’s new and it’s different. If you are interested in finance, there are many roles in the insurance industry on the internal investment side as well as the product side. Capital wants to move into a new industry, but it wants to know that it has some protection and a hedge against the things that can and sometimes will go wrong.
If you are someone who is interested in being part of the rapidly changing way business gets done these days, the insurance industry gives you a front-row seat and in most cases, a speaking part in its development.”
How do you advise entities to close the gender gap in leadership roles in insurance?
I’m not sure that we’ve even gotten to the point where everyone fully understands what the problem is. For a long time, I think the answer was... ‘‘Look! There are four women in our management class - none of whom are actually making real decisions - but there are four women on our management team.’
My particular passion is about behavior in the workplace and how it creates additional liabilities for companies and society, frankly. Companies need to understand their culture and what’s either stopping people from advancing or stopping people from behaving properly; it’s interactive and it will be different in every one of these companies.”
Diverse thought makes good business. It just does! If you are global or a strictly domestic company, diverse thought is going to make you better. I think this is going to take all of that diverse thought and taking all the talent within the company and have it focused on understanding what is the problem - first of all, understanding that you have a problem - why you have this problem, and then walking the nine steps to getting better and resolving it. Individual companies can minimize the impact on their business by having everybody available and ready to take on leadership positions.
Which course will you be teaching? What excites you about your course and what’s one thing that students will be able to apply immediately in their careers?
I will be teaching The Global Legal and Regulatory Ecosystem. The law should breathe and live and be something that you understand so that you can do business in a way that comports with the law and, in some cases, drives the law for better. I’m really excited about talking about how the law, insurance, and regulators work together to foster organizational behavior and societal norms. We’ll start with some basics so that students understand the structure of how law and regulation come to be and impacts the insurance business, but then we’ll also cover how insurance impacts the creation of laws as much as the law impacts the way insurance is regulated; they work symbiotically.
We’ll talk about how global companies need to understand how to conduct business in the multitude of jurisdictions in which they operate, keeping in mind various national, state, and provincial laws. The class will also cover law and regulation as it impacts the other modules in the master’s program, so it’s designed to serve as an application of the concepts and knowledge the students will have gained from the other courses.
Making a profit in the business of insurance is really important, but perhaps even more important is being able to keep the profit that you made because you didn’t have a regulatory mishap. That covers everything from establishing the company to getting appropriate licenses where you’d like to do business to understanding the regulations to having people that are out in the field and are marketing insurance the right way so that there are no flags and penalties. Insurance is, at its core, a promise to be there when the insured needs you. If the insurance company is there in the breach, trust is established. Once an insurance company loses that trust, they’ve lost their main asset. So we’re going to talk about how to make sure that that doesn’t happen. We are also going to talk about the ethics of the professionals in the insurance business and how their conduct impacts the company’s reputation amongst regulators, business partners, and policyholders.
People in this industry have to be futurists because the future of risk is having foresight in a rapidly developing world that we don't know yet.”
Which skills are more useful and relevant now than when you entered insurance? Which skills will endure in the future of the work?
Critical and analytical thinking skills and being able to see around corners into the future are most relevant. Seeing around corners is a skill that anyone in insurance will need to have to be able to understand future risks. People in this industry have to be futurists, in a sense, because the future of risk is having foresight in a rapidly developing world that we don't know yet.
Students who enroll in this program will see that the industry is alive with possibilities to bring new ideas to meet the new ways of doing business. Insurance products and insurance rates are built on risk assessment and modeling. Being technologically savvy as a skill set is more important now than it ever has been for the underlying business of insurance and beyond. The marketing and distribution of insurance products is also changing very quickly, and the way people want to shop for insurance is also changing. Being able to bring new technological solutions to the table is important. But with these commercial changes come new laws and regulations and one thing that will not change is that the industry will continue to be highly regulated. Understanding the regulatory landscape and understanding how to conduct business within the bounds of the law is paramount.
With commercial changes come new laws and regulations. One thing that will not change is that the insurance industry will continue to be highly regulated. Understanding the regulatory landscape and understanding how to conduct business within the bounds of the law is paramount.”
Lastly, there is value in the ability to be immersed in the world around you and the world beyond that. When evaluating risk, it's important to be cognizant of our natural inclination to curate what we hear generally in the news; you can’t live in a box. It’s really easy to live in a bubble today, but it’s important not to.
What’s something that you’ve done in your career that was unexpected or atypical?
I never expected my work in insurance to be so involved in emerging markets. Originally, I had international interests and so I thought that I might work in the field of multinational taxation or development, but never thinking it would be in the insurance industry. But once I entered the industry, I found myself in the position to work with and live in emerging markets as they developed. It makes sense to me; economies want to have order around financial services and developing businesses want to protect the assets they build in an emerging economy. Being able to be on the ground and adding – even in a small way – to growth in emerging economies has really impacted the way I see the world and my sheer enjoyment of being a citizen of the world.
Inventors, investors, and users venture into new technologies – and create new opportunities and ways of doing things – only if they can hedge against uncertainty… Forward-thinking insurance companies are there to cover the risks before people even know they have it.”
What advice would you have for people that are working in insurance, specifically those who may be considering a Master’s in Insurance Management? What advice would you share with professionals about balancing experience with traditional learning?
If you are intellectually curious and see no boundaries to what you’re doing or where you are right now, you can drive and own your career. The reality is that you can only drive towards a goal if you know what direction you are driving toward. You have to know where you want to get to and then map out your course. This program is not designed for box-checking; it’s made to help people provocatively think about what the insurance industry is about, how law, regulations, and ethics impact the industry, and how to be prepared for the enormous changes that will come. The program will help professionals be better futurists in insurance, headed in the right direction.
This program is not designed for box-checking; it’s made to help people provocatively think about what the insurance industry is about, how law, regulations, and ethics impact the industry, and how to be prepared for the enormous changes that will come. The program will help professionals be better futurists in insurance.”