Insurance Management lecturer and VP at SCOR Reinsurance Company, Marguerite DeMartino discusses the importance of recognizing insurance, reinsurance and operations as fundamentally instrumental to life and business.
How did your career lead you to insurance and reinsurance?
I found myself working in finance for a large printer company - looking at mergers, acquisitions, and initial public offerings - because my department printed all of the annual reports and prospectuses. I began a new role doing similar work with the U.S. Securities and Exchange Commission (SEC), where I had the opportunity to complete Six Sigma training. When I started at AIG, I became a Master Black Belt PMO Project Manager and that’s where I chose to pursue my interest in operations. I enjoyed leading process development and continuous improvement efforts for streamlining, so I pursued reinsurance operations.
I don’t think a lot of people understand the roles that insurance and reinsurance play in catastrophes. The fires in Australia and California and hurricanes like Harvey, Irma, and Maria are big examples. How do they put everything back? When privacy is breached in cybersecurity, how are compromised assets recovered? Insurance and reinsurance provide help when this happens; insurance comes in and protects the losses.
How would you describe the role of insurance in today’s society to someone who’s unfamiliar with the sector?
I don’t think a lot of people understand the roles that insurance and reinsurance play in catastrophes. The fires in Australia and California and hurricanes like Harvey, Irma, and Maria are big examples. How do they put everything back? When privacy is breached in cybersecurity, how are compromised assets recovered? Insurance and reinsurance provide help when this happens; insurance comes in and protects the losses.
By your estimation, how do you think emerging risks like climate change and natural disasters will shape insurance and reinsurance?
Emerging risks play a huge importance in the whole scheme of things when it comes to insurance and reinsurance, especially. If a specific insurance company has a lot of penetration in an area with lots of damage from a hurricane, for example, that insurance company alone may not have the ability to survive once all of the claims that have been paid. So instead, a group of reinsurers can collaborate to cover the costs and also profit enough individually to remain above water. Each reinsurer sets up a treaty that covers a specific area and percentage for premium and commission until 100% is covered. It’s huge right now because we’ve experienced such large and novel catastrophes in recent years, [and now we have a way] to protect people and businesses.
Which course will you be teaching? What excites you the most about it and how can students apply the concepts they’ll learn in their careers?
I’ll be teaching the course Insurance Operations: The Backbone of the Company. I want students to understand how operations play a part in every segment of an enterprise. From product development to the end, operations figures out how the product is going to be coded, and put into systems to manage premiums and policies - it's all interconnected. People underestimate operations and say “oh that just happens,” but it doesn't just happen. We have to be involved in the beginning.
I’m not asking students to know everything but to know where and how to get the answers - to know the available resources.
Students in this program will leave with the extra kick to provide employers the expertise of a Vice President or Senior Vice President.
What advice would you give to someone who is seeking to really advance in the reinsurance industry in particular?
One of the good things about the program is that it doesn’t solely depend on textbook learning. Active engagement is important and the Operations course is hands-on. It has a balance of my own stories and expertise as well as opportunities for students to explore scenarios and share what their solutions would be. It’s a growing industry. And right now, a lot of the most knowledgeable people are retiring so there’s room for a lot of career advancement here.
A lot of the most knowledgeable people are retiring so there’s room for a lot of career advancement here.
What have your previous working experiences taught you about what’s needed for the future of insurance?
Serving in the U.S. Coast Guard Reserve for 28 years placed me in public affairs and crisis management for major events such as 9/11 and the Deepwater Horizon oil spill. These events trained me to be adaptive and to develop solutions head-on. Even in insurance, you will have complex problems and war stories that you will have to figure out.
Can you share a particular experience or war story from your career in reinsurance?
As the insurance industry continues to grow, integration of technologies is essential. If you want to see an industry that has done this well, look at how the banking industry developed its online banking systems.
One of my own experiences with using technology to enhance efficiency involved a major re-coding task. In insurance, everything is coded and categorized. On an excel sheet with thousands of lines of data, we had to manually update an item on each line to complete this re-coding. I knew that there was no way anyone was going to do this without human error.
We needed money to develop an automated way to do this update. I had to constantly present this to the executive committee, almost like a lobbyist in the halls of Congress. They finally granted us the money. Once we developed a script - what had normally taken weeks to do - it took an afternoon to complete! The war was that I had to convince leadership to do this.
Insurance and reinsurance industries tend to be dominated by men, particularly at senior leadership levels. What advice would you suggest that insurance companies follow so that they can see more women advance?
This is something that the industry is trying to change while acknowledging that it is hard to tackle. When you look at the executive leadership, there's an obvious disproportion... However, as the workforce in this industry ages, I’m hoping that more women get involved over time because it’s a great career, and a lucrative industry where you can grow really quickly.
[Insurance is] a great career, and a lucrative industry where you can grow really quickly.
I’ve always been involved with developing young professionals because it is extremely important to help them understand the variety of career avenues. The reality right now is that insurance needs people. This program, upon completion, is going to help graduates rise up the ladder. I hope that there are going to be more women applying for this - and, people of color. It’s time, and we are constantly looking for people.
