Thought Leaders II

Essential to Success: Educating Your Customers

Elizabeth McDaid could clearly see that insurance agents needed executive education programs. She had worked for an insurance agency before coming to Chubb, and was working closely with agents in Chubb's marketing organization when she helped lead the development of The Chubb Agents & Brokers Academy in 2001.

"One agency principal came to me and said that when they did the analysis, the program saved them more than a million dollars."

–Elizabeth McDaid, Vice President of Agency Education, Chubb Group; Doctoral candidate, Executive Program in Work-Based Learning Leadership

It was a radical idea — offering education to independent agents who represented Chubb's products in the market. Most insurance companies saw these agents as customers, independent entrepreneurs who were responsible for their own staff development. McDaid and colleagues at Chubb realized that these agents were essential partners, and it made sense to give them the business knowledge and skills they needed to be successful. From this insight, the Academy was born, an innovation that competitors are just now catching up to seven years later.

"In the insurance industry, education is vital for two reasons," says McDaid, now vice president of agency education, who recently completed her master's degree through the Executive Program in Work-Based Learning Leadership and is a doctoral candidate in the program. "First, because of the complexity of the product we sell. Second, because the people who work in our industry have to be knowledgeable about not only the insurance industry, but also the industries their clients operate in — manufacturing widgets, running a golf course or winery, or operating a museum or educational institution."

Despite the need, many independent agencies did not have the resources to set up their own education programs. "They have to stay on top of the business, while understanding how to look at another industry to determine risks and mitigate exposure," McDaid says. "This requires depth and breadth."

Broadening the Pool of Hires

The Chubb Academy started with a program, developed with the Wharton School, for a select group of agency executives. "It met with such success that we realized there is a need for learning opportunities throughout the entire agency — from experienced executives to a new person just coming in the door," she says. The programs help agencies hold onto good people and improve the performance of staff and managers.

Chubb created a "producers" school for new hires just entering the industry. This program explains the insurance industry from the ground up. This allowed agencies to hire employees fresh out of school or with experience in a specific industry, and quickly bring them up to speed. "We brought in experts from around the industry, and this helped to jump-start people," McDaid says. "It freed the agents to broaden their pool of potential hires."

Measuring Payoffs

The Chubb Academy programs clearly have helped the agents thrive. During the program, executives create business plans and then track the results of these plans. Sometimes the benefits are direct and dramatic. "One agency principal came to me and said that when they did the analysis, the program saved them more than a million dollars," McDaid says. The leader was about to consummate a merger, but after attending a class by Wharton Professor Harbir Singh on mergers and acquisitions, he realized it was not a good idea and called off the deal. He said it would have been a "million-dollar mistake."

The participants also build networks with other independent agents, often hard to do with competitors fighting for the same business in a specific geographic region. Participants from across the country can interact more freely, allowing them to share ideas with a network of peers.

While almost all the programs charge tuition, they are subsidized by Chubb. Given that independent agents represent many different insurers, including Chubb's competitors, does the company receive a good return on the investment?

McDaid points out that the program builds relationships with the agents and helps them succeed in their businesses, which helps Chubb. The Academy is a "differentiator" for Chubb. One sign of its success is that other companies are now beginning to imitate the model. And it is just the right thing to do. "There is honestly a feeling by senior managers here at Chubb that we want the independent agency distribution channel to remain viable," McDaid says. "This is our commitment to helping them thrive."

Continuous Learning

McDaid has made a strong commitment to learning in her own career. This year, she completed her master's degree through the Executive Program in Work-Based Learning Leadership, offered by the Wharton School and Penn's Graduate School of Education. She says the program gave her new insights on her work at Chubb.

"The program stresses that you are not a learning professional; you are a business professional who happens to specialize in learning," she says. "If the learning strategy is not aligned with the corporate strategy, I am wasting everyone's time."

With rapid changes in the current business environment, learning strategy needs to be more flexible. "In a soft market, we are learning to be more nimble and agile," she says. "For example, we are shifting more attention from leadership to sales right now, as agents seek to bring in more business. Every plan is a fluid organism. We have to keep adjusting to meet the needs of two clients — Chubb's strategic business units, and the agents and brokers. How can I support what the business units want to do and as a result serve the needs of agents and brokers?"

During the Executive Program in Work-Based Learning Leadership McDaid also worked with her learning team on a business plan for an "m-learning" initiative, using mobile devices as channels for learning. This opened her eyes to new possibilities in her own business.

"We are seriously looking at m-learning as another piece of the education here," she says. "The Penn program keeps you abreast of change so that you stay right on the top of your game. It is easy to put that aside at work if the phone is ringing. I applaud the Graduate School of Education and the Wharton School for having the courage to develop the program."