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Six insurance executives sat around the table at a strategy offsite. Five of them had spent their entire careers in insurance. They knew the business intuitively and they were extremely influential in the industry. The sixth member of the team, the head of human resources, had joined the organization two months before, after a diverse career that had most recently included a stint as an executive in retail.
This was a team of smart, driven people, always looking for new ways to get an advantage over the competition. They found innovative ways to mine their data for information that would help them answer the central question in insurance: How do you set a rate that's low enough to win the customer's business but high enough to cover the cost of the customer's claims? If you get that balance wrong, you either don't grow because you're too expensive, or you grow unprofitably because you're paying out too much. This team led the industry in developing sophisticated actuarial techniques aimed at getting this balance just right.
The team generated lots of ideas at their planning session. Everyone chimed in with insights, issues, and opportunities. The new head of human resources participated right from the start, but I could see that she was more focused on soaking up information and understanding the business than on trying to impress anyone. After a while, I could see that something was bugging her. I think it took her a little while to put her finger ...