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Maureen Steinwall participated in the Executive Forum at the 2005 Professional Development Conference in New Orleans, Louisiana. She spoke of business, business owners, entrepreneurs and loss control consultants. She also spoke of the optimism that business owners must have—what great things “could” happen and how the insurance industry tends to look at what bad things “might” happen. I specifically recall how she wanted to reach out to safety people and to pass her message along.

She implored loss control consultants to talk with entrepreneurs about the good things they see and to not drive right into doom and despair. She said that entrepreneurs do not want to hear the negatives—they avoid negative people.

As a loss control consultant, this struck a nerve. I called Ms. Steinwall, and we had several great telephone conversations. She is deeply involved in her business and in her community. She is a student of life, and she will soon receive her doctoral degree.

The Risk Management/Insurance Practice Specialty plans to work more with Ms. Steinwall in the future. She is our eye into the entrepreneur, our “spy” into the inner workings of the mind of the person who is ultimately responsible for making payroll. She can teach us how to be better communicators, how to greater impact our customers and how to become more valuable to our profession and to our companies.

Given below is an interview with Ms. Steinwall that focuses on an insurance company loss control survey. It may smart a bit, but it may also bring back memories of what went well and what did not. Hopefully, it will spark reflection and discussion with your peers. I think we can learn from Ms. Steinwall—we are all students.

Mark D. Oldham, CSP
Assistant Administrator
Risk Management/Insurance Practice Specialty

You have met with many carrier loss control representatives. What behavior, communication and preparation styles do loss control representatives exhibit during positive carrier surveys? As business owners, how do these loss control representatives differ from others?

In my observation, there are two types of loss control representatives: the “team player” and the “expert.” “Team player” loss control representatives approach their job with the understanding that they represent one leg of a chair. The decision-making “chair” or team includes members from both the customer and the insurance company. The team needs to balance risk, cost, probabilities and services. The “team player” loss control representative's role is to provide information to aid in the decision-making process.

“Expert” loss control representatives have a teaching style. They like to teach the proven methods, equipment, techniques and practices to their students. However, a problem arises when the expert-style loss control representative is sent into the decision-making team. If the customer's frame of mind is to purchase insurance, teaching is not appropriate—information is. The expert-style loss control representative is better-positioned after the sale and only when the customer is ready to hear the message.

You discussed the conflict between entrepreneurial optimism and the negative “what-ifs” of carrier loss control representatives. Do you believe that most loss control representatives are attuned to fault-finding during surveys? What can be done to change this attitude?

All people like compliments, no matter their age or position. Why not start there? Why not start by highlighting all of the good things that a company is doing to ensure safe practices? My experience has been that loss control representatives like to quickly point out opportunities for improvement. Communicating improvement opportunities takes a lot of upfront time because you need to prepare your listener. If the listener is not ready to hear the messages in the proper context, it will be heard as criticism.

I have yet to meet a business owner or manager who refuses to implement cost-effective improvement programs. But keep in mind that not everything can be accomplished. Prioritizing improvement programs is the business manager's job, and there are always more opportunities for improvement than there are resources available. And although safety issues are extremely important, they will compete with corporate survival issues, which are even more important.

Does it seem that most loss control representatives look for what is wrong rather than what is right? Why do you or why do you not believe this?

It is true based on my experience that fault always seems to be the first place people target in general. This is not a limited issue with loss control representatives. Remember that fault can lead to blame, which taps into shame and guilt. These emotional responses should be avoided in the workplace in all activities, including safety programs. How many times do we do our job 99% correctly, yet our supervisor points out the one percent that we did poorly? Why not acknowledge the 99% first? The listener will accept the one percent improvement opportunity more appropriately. This is true for teachers, parents, ministers, bosses—anyone with a position of power over others. Look for the good first.

Did you ever feel that a loss control representative had overlooked things your company was doing right? If so, how do you think it impacted your insurance cost of risk?

The business manager involved in purchasing insurance knows that the loss control representative influences the underwriter, which in turn impacts the company's insurance cost. If the loss control representative appears to be focusing solely on the negative, this behavior could be interpreted as a negative impact to the profitability of the company, and that taps into a fundamental corporate survival issue. Balancing the comments between the things that are good and the opportunities for improvement show that the loss control representatives (and the insurance company) understand their partnering role appropriately and that a fair price for their products is forthcoming.

In general, do you find that loss control representatives are familiar with publicly available information about your company? How does this affect your willingness to share more information?

Rarely will a new loss control representative understand my company. Many loss control representatives claim that they know the industry, but they rarely demonstrate an understanding of my particular business. I do not expect them to know the business at the beginning of a meeting, but I do expect them to have a better sensitivity of the differences between industry and my company. All companies differ from the average—50% are better, and 50% are worse. As a business manager, I work hard to point out what I believe separates us from the average in a positive way. I believe I can reduce my insurance costs if I am successful in doing so. As a selling tactic, it is a good idea to acknowledge if the underwriter is using that information in their pricing decision or not. It will validate the fact that the loss control representative was listening.

How does the quality of the insurance carrier affect your perception of the loss control representative?

The loss control representative is the insurance carrier; the insurance carrier as a corporate entity is secondary. If I cannot get along with the people who are providing the immediate service, I will conclude that I will not be successful with the carrier. The loss control representative is a salesperson more than an engineer.

Do you use value-added services from your carrier's loss control staff? If so, what services have you found most useful and why?

We rarely use any services from our carrier's loss control staff. It seems like all of the services are talked about at the purchasing stage, and then we forget about them during the rest of the year. We are fairly successful with our internal safety programs, and I presume that the loss control people are busy with their problem customers. However, it would be helpful if the carrier called us during the year to schedule a friendly visit. But be careful not to have this helpful sales call sound like an Occupational Safety and Health Administration (OSHA) audit.

Do you believe that carrier loss control representatives are salespersons? Why or why not?

There are two salespeople involved in the selling process—the broker and the loss control representative. They need to work together in their presentation to the customer. Typically, the broker is the trusted individual. The business manager usually follows the broker's advice; however, the purchasing decision is based on three factors: a) what the broker recommends, b) the total cost of insurance and c) how well the loss control representative presented the carriers' strengths, products and services.

If the loss control representative's selling skills are marginal, it is probably not a deal-breaker. However, if the loss control representative performs poorly (such as by insulting the customer), nothing a broker or carrier can say or do will heal that situation. Remember that “first impressions” are powerful images that are rarely erased. I recommend that a loss control representative and the broker team visit all customers. In my experience, the really bad loss control representative experiences have typically happened when the broker is not present.

How do you feel if a loss control representative asks you for validation of a comment or for proof? If you are not asked for validation or proof, does this impact your impression of the loss control representative? Why or why not?

Asking the “show me” questions are just fine. Business managers know that a loss control representative's job is to gain an understanding of the customer's business. A piece of that process is to gauge the level of honesty that can be established between the two companies. I would not advise checking everything out since the auditing process is time-sensitive. Often times, auditing is not viewed as an added-value activity, so limiting the validation process would be helpful.

If you owned an insurance company and had the opportunity to redesign the business model, how would you design loss control? How would you select your loss control representatives and underwriters?

I cannot claim to be an expert in the unique operations of an insurance company. But in general, all companies need to select their customer-contact people based on their interpersonal skills, emotional intelligence and coping or teaming skills—essentially, their basic ability to get along with people. This basic skill set includes patience, understanding, listening and empathy. All too often, managers hire for cognitive and technical skills, which in my opinion are less important.

If you had the chance to coach a carrier loss control representative with whom you previously met at your business, what would you say?

As important as it is to prevent bad things from happening, the fact is that bad things do happen no matter what. I understand that my company employs people who might be hurt on the job, and we go to great lengths to prevent accidents. But I also need to balance the safety decision against the probability of occurrence and the cost of prevention.

The image of bubble-wrapping our kids before they leave for school comes to mind. Protecting our children, employees and ourselves is extremely important, but so is living a full life. Being too scared to enjoy our life because bad things might happen is an emotional disability that can be just as damaging as a physical disability. I happen to think emotional disabilities are more damaging overall.

Biography

Maureen Steinwall is the President and Owner of Steinwall, Inc., a manufacturing company that specializes in process engineering and thermoplastic injection molding. This forty-year-old company generates ten million dollars in sales annually and employs 95 people in its north Minneapolis location. Steinwall also owns ATS, a tactical paintball gun manufacturing company.

Steinwall is currently working on a Ph.D. dissertation in optimism, multimedia training and empowerment. Her interest in training is evident within the systems used at Steinwall, Inc., and it has culminated in her winning a national training award in 2001 for her company's training software program. Steinwall holds a master of business administration degree from the University of Minnesota in operations management. She is a graduate of the Harvard University Graduate School of Business' Owner President Manager (OPM) program, and she also maintains a Certified Public Accountant (CPA) license.