The Future of Insurance Podcast – Vern Steiner
President & CEO, State Compensation Fund of California
Season 3, Episode 6, July 12, 2022
Vernon Steiner was appointed President and CEO of State Fund on June 9, 2014. Vern has 30 years of insurance industry experience, the majority in workers’ compensation. As the President and CEO, he reports directly to the Board of Directors and is responsible for the day-to-day operations at State Fund.
Vern began his career in 1990, as a Claims Examiner. Early in his career, Vern experienced the workers’ compensation system from the point of view of a third party administrator, a self-insured/self-administered employer and a managed care organization. In 1995, Vern joined AIG as a Service Center Manager, and by 2003, when he left AIG, he was the Regional Vice President, Northwest. He worked for CNA from 2003 to 2007, starting as the Vice President, Field Operations and ultimately Vice President, Workers’ Compensation. Prior to joining State Fund, Vern served as Senior Vice President, Claims at Zenith Insurance from 2007 to 2014.
Vern was a member of the Workers’ Compensation Research Institute’s (WCRI) advisory board from 2009 to 2016, and he served as the California Workers’ Compensation Institute’s (CWCI) Board of Directors Chairman and as a member of the Fraud Assessment Commission from 2014 to 2016. He is currently on the CWCI board, the executive committee of the board, and has served on the WCIRB Governing Committee since 2014.
Vern received his Bachelor of Arts in Philosophy from the University of California, Los Angeles. He also earned the Leadership Fellow designation from the National Association of Corporate Directors (NACD).
Highlights from the Show
- The State Comp Fund was setup to provide Workers Compensation insurance to businesses in California that weren’t able to find it elsewhere
- What they’ve really focused on over the past few years, they’ve realized they can’t just be a market of last resort if they wanted to genuinely meet the needs of businesses that turn to them for coverage
- SCIF swelled to being the largest carrier in California, and the country overall due to market conditions
- Due to restrictions on hiring and investment in tools, they weren’t able to scale their staff to meet the surge in business, and feel they were not serving the market acceptably, and that hurt their brand and the organization’s morale
- For the past 8 years, they’ve been working to transform the culture and brand by accepting their past shortcomings and working to do better
- They started an effort around innovation that engaged the entire organization, training everyone on design thinking (which they called Experience by Design) and running Challenges for employees to come up with new ideas to improve the company
- They also took a look at their 10 core values, like Honesty, that were good, but were hard to identify with or see how they really applied to the business; they come up with four new ones that came from the people and were more action-oriented, like Be Innovative
- They also embrace the ideas that don’t move ahead for various reasons like prioritization calls that have to be made, and ensure people are still engaged even if their idea isn’t taken up
- We discussed SCIF’s innovation in their direct business, which was essentially the same process and approach as their broker business, but without an advisor to guide you through something very long, arduous and confusing for most business owners
- SCIF realized that the way people buy insurance will be disrupted and change, and they need to able to engage in that shift themselves
- Simplifying things a bit, SCIF doesn’t actually underwrite since they’re a Take All Comers market; instead they just need to develop a price, allowing them to cut out more questions than a carrier doing risk selection in addition to pricing might have to do
- When they built and launched their new direct, digital journey, they learned that people buy insurance around the clock, even on Thanksgiving and Christmas
- They’ve since found additional ways to simplify the process and automate things like post-bind data validation and re-underwriting so they make better calls about what risks need to be reworked, and then to do that more effectively
- One major lesson they learned from all of this is the need for the right person to own and champion an innovation project, who has the appetite to take risks and push the team to keep moving ahead even when it’s tough, while also staying open to feedback and insights from all around them
- They also created Innovation Design Centers, a team that is dedicated to looking at what’s out there through the lens of the problems and needs of the business, and it’s tended to have more success on specific solutions for specific parts of the business than things that look across multiple functions of the business at once
- They also played with a metaverse-like solution to help with remote working and the way that can make casual collaboration tougher, but people didn’t really take to it despite there really being a need
- Part of this is likely because it was yet another change on top of lots of others during the pandemic
- But it was still worth trying, learning from it, and making good decisions about what you keep doing and what you realize won’t be a winner and need to move on from
- Vern things the future will vary by market segment, and most of their business is small business, which is generally more interested in self-service than perhaps larger accounts are, so you need to meet those on-demand needs digitally today