Back in 1999, around the time of the dot.com bubble, when the internet was becoming increasingly integrated into daily life, David Bowie sat down with British interviewer Jeremy Paxman to discuss the revolutionary potential of the internet in terms of the way we deal with one another, particularly with artists. Although Jeremy Paxman characterised the internet as little more than a delivery mechanism, the late pop star was adamant that the scope of change is enormous.
“The context and the state of content is going to be so different to anything we can envisage at the moment,” Bowie said, “where the interplay between the user and the provider will be so in sympatico, it’s going to crush our ideas of what mediums are all about.”
Bobby Lehane, CEO of strata insurance provider CHU Underwriting Agencies, brings up said interview as a display of prescience, but he goes a step further than David Bowie. Bobby believes that whatever impact the internet had on music, it was equally transformative for business.
The technology changed the way customers deal with businesses – not just altering communication but the relationship itself. As he looks forward, he sees the next series of technological innovations being similarly transformative.
“I believe the impact of the Fourth Industrial Revolution – artificial intelligence, robotics, 5G, quantum computing, machine learning and so on – is going to be huge on business in the same way that the impact of the internet was huge on business,” Bobby explains. “The difference is, I believe, that that impact, that change, is going to accelerate over the next five to 10 years. That’s a fascinating challenge.
“For me, as the CEO of an insurance business, an industry that I believe is going to be brutally changed as a result of these developments, it’s an exciting challenge. It’s also an opportunity to ensure that we are the organisation that not only survives but also thrives through that change, into a prosperous future where others will undoubtedly fall by the wayside.”
“It’s an exciting challenge and opportunity to ensure that we are the organisation that not only survives but also thrives.”
CHU provides insurance that protects an individual’s most valuable asset – their home. However, CHU specifically offers insurance to homes forming part of a strata scheme rather than any standalone structures, such as duplexes, high-rises and everything in between.
It’s a safe market; strata insurance is mandatory and about 10% of Australia’s population lives in apartments with an insured value of A$1 trillion. But CHU doesn’t just rely on the fact it offers an essential service. The key is ensuring that the company is seen as the best in the market.
Having been named Underwriting Agency of the Year at the Australian Insurance Industry Awards for the past two years, it’s clear that this ambition has indeed been achieved. Besides being the best, CHU is also the biggest and oldest strata insurance provider in Australia, having been founded in 1978. At that time, strata living was just starting to grow in popularity and it was CHU that created the first strata insurance policy on offer.
Despite the company’s longevity, disruption has informed a great deal of CHU’s strategic direction since Bobby began in the role in April 2015. When he last spoke to The CEO Magazine two years ago, he painted a picture of a company that refused to be static, but constantly changing, so that competitors couldn’t imitate their style. It was a far cry from the stagnant 40-year-old company he’d inherited.
“The interesting thing about CHU is that it’s actually a turnaround story for a number of reasons,” Bobby says. “When I started here, the company was shrinking, but over the past two years we’ve grown by 40%, which is phenomenal. That success is built with people who are engaged and good at what they do. Working in that kind of environment is hugely stimulating.”
“Over the past two years we’ve grown by 40%, which is phenomenal.”
Once Bobby had taken over in 2015, CHU established a strategy to 2020, examining disruption and diversification. Always with one eye fixed firmly on the horizon, the insurance provider has already started to work towards a 2025 strategy, but even its current strategic direction is one of innovation, taking a proactive approach to disruption – disrupting rather than being disrupted.
Under Bobby’s guidance, the company rapidly reoriented into digital services, with an online underwriting agency called CHUiSAVER introduced in November 2016. Providing a low-cost option for residential strata customers and an alternative to the traditional low-excess, high-premium policy, the business has since evolved into Flex Insurance, a revolutionary digital insurance company that allows customers to have total freedom to tailor their own level of cover.
“In terms of being the strata insurance market leader, we continue to change the core product,” he says. “Why is that important? Historically, every strata insurance product looked the same and, whether you wanted it all or not, you got it all and you paid for it all. Through Flex Insurance, we’ve made the product flexible. Options that you don’t want can now be taken out of the package. It sounds rudimentary, but that’s a change to the strata insurance market because it does make insurance more affordable and more applicable to what the customer needs.”
Part of the core strategy has been diversification of products. Some of the products CHU has been looking into include landlord insurance, contents insurance and so on. Bobby says the insurance provider is working alongside its intermediaries to share in the benefits of providing these products, with the distributor.
CHU has also reoriented itself by completely disrupting and rebuilding its claims process. The transformation was the work of Andy Martindale, Head of Claims at CHU, who joined the company three years ago. Part of the upheaval involved setting up CHU’s Strata Service Centre, a national centre that can process claims within four hours from anywhere across the nation.
Although the insurance provider maintains its local teams, the change has taken considerable pressure off them, with 40% of claims now being processed in the Strata Service Centre. About 40 to 50% of claims are still processed by local centres, but the reduced volume means local claims staff can handle claims with greater care and attention.
Large-loss claims have also been reworked, with a team dedicated to handling claims over A$50,000. Due to the complexity of strata insurance and the numerous parties involved (lot owners, strata managers and brokers), a dedicated team with relevant experience is key to processing large claims smoothly – as of April, the largest claim processed was A$2.4 million.
Another facet of this disruption was reducing third-party loss adjusting by offering CHU’s own loss adjusting service (CHUAssess, introduced in mid-2018). The reasoning behind the move is that the loss adjusting process is often the moment when insurance claimants typically have a negative experience around the claim process. CHU has thus taken control of that experience, putting their own service and brand at the forefront of the process, rather than that of the external loss adjuster.
CHUAssess will handle the entire experience from start to finish, serving as the contact point for all involved, including claimants, strata managers and brokers. These CHU assessors are able to make faster decisions, since they’ll visit sites with a builder to facilitate a quicker turnaround. The shift has greatly reduced the time it takes to manage a claim, no doubt a welcome improvement for anyone dealing with claims and the unfortunate circumstances that so often precede such processes.
Bobby’s fascination with disruption extends to more than just technology – he’s passionate about ensuring diversity and inclusion within CHU and hopes to take the lead within the industry in that regard. He believes that, by calling this out and sharing the numbers on diversity, he can make diversity a strategic imperative for organisations, putting it at the forefront of the industry.
Indeed, Bobby did an industry presentation in Auckland this year called “Diversity, Inclusion and 180 Middle-Aged Irishmen” (Bobby himself being Irish). “The idea was that if everybody at CHU was a middle-aged Irishman, would we have been underwriting agency of the year for two years in a row?” Bobby explains.
“Of course we wouldn’t have, because we’d have such a lack of diversity. We’d have all the stereotypes – drinking, fighting, singing – but nobody looking after our customers and everybody would be right about everything. In preparing for that keynote, I did a lot of research into diversity and inclusion because, while I’m passionate about it, it’s important to be able to substantiate with actual numbers why it’s good for business.”
As proof, Bobby cites the evidence from countless organisations, such as Diversity Council Australia, Deloitte and McKinsey, that a diverse, inclusive culture is a tremendous benefit to a company. For example, a Boston Consulting Group study found that diverse management teams correlate with 19% higher revenue. American-based industry analyst Josh Bersin, meanwhile, found that inclusive companies were 1.7 times more likely to be innovation leaders in their field.
This is all part of Bobby’s efforts to lead the strata insurance industry – and the strata industry – in driving change and discussion around important issues. His ambition is for CHU to be a thought leader, educating about disruption and innovation and helping to futureproof the industry in much the same way CHU has been futureproofing itself.
It’s evidence that the insurance provider maintains a sense of duty that extends beyond its own financial interests. “Within CHU, we have a strong culture,” Bobby says. “We have a genuine need to contribute to the communities in which we operate. We’ve got a clear and strong strategy, and to witness the validation of the strategy and our strategic direction over the past couple of years has been great. We’ve got no tolerance for complacency. While we’re the largest in the business, we are extremely humble and hungry.”
“We’ve got no tolerance for complacency. While we’re the largest in the business, we are extremely humble and hungry.”
That curious mix of ambition and humility has been shaped by countless colleagues through Bobby’s career; he lists CHU Chairman Robert Kelly as one vital influence, given Robert’s status as one of the most senior figures in Australian insurance.
But for sheer dedication, there’s no doubt that Bobby’s mother has been a central figure – having given birth to 14 children, she continues to work at the family business (a small village store in Ireland) every day at the age of 77.
Back in the day, Bobby himself worked in the store, and its centrality to the local community gave the future CEO the “gift of the gab”. It was an invaluable life experience, but his career path eventually led him further abroad, taking him to Japan, Tanzania and England. Unfortunately, as significant a city though it is, London wasn’t an experience that drew him in.
Fortunately, a two-year gig soon landed him in Australia, a country he describes as a land of opportunity. “I’ve always been in search of adventure and diversity and so, after the richness of Japan and Tanzania, I was in London,” he says.
“But I found it grey and not all that inclusive. So when I was offered an exciting role in Sydney, I took it and I remember walking the streets that first weekend. It was winter, the sun was shining, people were happy. I’d been invited to a colleague’s house for a barbecue and I thought, ‘Holy cow, I can’t believe people live like this.’ I haven’t fallen out of love with Australia since.”
Though he was only meant to be there two years, two decades later he’s living with his family on Sydney’s Northern Beaches. Befitting the location, he starts each work day with a swim, and such is his dedication to the practice that he finds somewhere to swim, no matter where he is in the country.
Throughout the remainder of his day, he’s a hands-on CEO, meeting with staff and customers. He estimates almost a third of his time is spent “in the markets” – outward-facing work that entails dealing with clients or attending industry events.
But the most crucial task he has involves “thinking, researching and strategising”, futureproofing CHU against the evolution of business. As an example, he’s been researching 5G, given the industry conversation around it and its implications for business, but it’s not enough to simply be aware of 5G. Bobby believes “to be able to truly understand what it might be able to add to a business is worthy of research”.
“The world is changing at a ridiculous rate,” he says. “The technology geeks of the 1990s, the likes of Bill Gates and so on, have become some of the world’s most powerful, wealthiest, influential business leaders. I innately understood a long time ago that business leaders of the future would be more closely aligned to technologists than to accountants. I believe that business is continuing to change in that way.”
In February this year, the Queensland city of Townsville was devastated by floodwaters in the wake of particularly heavy rain. The floods led to several fatalities, enormous losses to the area’s cattle industry, and many residents had to evacuate while floodwaters remained high.
Naturally, insurance companies represent a major component of the recovery process, assessing claims and losses to help residents rebuild. For CHU, the key to helping the city through the disaster was to maintain a presence on the ground. Indeed, Head of Claims Andy Martindale spent some time in Townsville himself.
That physical presence and communication allowed CHU to better support lot owners, strata managers and CHU’s own brokers. For example, the insurance provider held a meeting with one of Townsville’s largest strata managers, walking them through the process of loss adjusting and restoration so they’d be better able to communicate this to the lot owners.
At the same time, CHU brought in hydrologists to assess water damage – specifically to identify storm water inundation. The reasoning there was to provide cover for those who didn’t have protection against flood damage, essentially trying to find additional reasons to assist those affected and providing them with hope.
Some months after the floods, the CHU team was happy with the progress made – claims were being reviewed with efficiency, work to restore property was underway and senior CHU staff continued to personally inspect Townsville.
The path Bobby took into leadership was unlike most others – he’d been educated in computer science in Limerick and started his career with Microsoft, before writing trading software for Lehman Brothers in Tokyo.
Later, as he progressed through roles within Zurich, Switzerland’s largest insurer, he gradually moved from tech-focused positions into leadership, eventually heading up the SME and Commercial Insurance segment as an Executive General Manager. CHU was the next step, and Bobby’s grounding in insurance, tech and leadership made him a perfect, if unorthodox, fit.
Few CEOs today have the same technological background, but fast forward 20 years from now, Bobby says, and there’ll be far more executives with that training, “by necessity and virtue of the way that business and technology is changing”.
It’s been beneficial, imbuing him with a unique perspective, while affording him greater understanding of change and the ability to deeply integrate technological change within a company’s functioning, rather than making token, half-hearted efforts at digital innovation. “Because of the magnitude of the change that is going to unfold, CEOs really need to have their heads around how it’s going to impact their business,” Bobby says.
“I don’t think it’s something that you can abdicate responsibility for. It is key to future business success. Now there are many other things that are paramount to future business success as well, but many people have the skills and the awareness to be able to navigate those. Not many people have the background or the expertise to be able to navigate the Fourth Industrial Revolution.”
“Not many people have the background or the expertise to be able to navigate the Fourth Industrial Revolution.”
A crucial element in the effort to drive changes like these is communication, but having acquired the ability to talk by working in his family’s store, Bobby places communication at the forefront of his work.
Appropriately, he’s often inspired by people who are oratories, who can put forward compelling cases and connect emotionally and intellectually – for Bobby, Barack Obama stands out as an individual who can communicate a point adeptly.
“We share our vision with all of the various stakeholders,” Bobby says. “We have many, many ways of engaging the community. For example, we do CHU forums around the country. This year, about two months ago, we went to every state with a live presentation to intermediaries, customers and staff. We talked about what we said we were going to do, what we did and what we’ll experience over the next 12 months. That could cover topics such as combustible cladding or a particular initiative we’re trying.
The core of CHU’s proposition, and the service it’s provided for the past 40 years, strata insurance is not only essential but mandatory, too. Strata insurance ensures customers are protected in the event of damage, whether accidental, malicious or disaster related, and whether it’s for a commercial or residential property. Repairs and replacement are covered, and although strata laws differ from state to state, CHU’s state-based teams are able to help customers regardless of how their needs might vary.
While strata insurance protects the property itself, it doesn’t cover a lot owner’s possessions. Like CHU’s other services, it caters specifically to strata or lot insurance. It can be a lifesaver when it comes to some of the most common claims (water damage) or the most expensive (legal liability – if, for example, someone injures themselves on your property). Unlike other contents insurance providers, CHU automatically provides cover for portables, where other providers might charge extra for this.
Essential for anyone with an investment property, landlord insurance can protect owners from suddenly losing out on their main source of income. After all, the most common claim type is loss of rent, where circumstances outside a landlord’s control render a property uninhabitable and thus unrentable, or if tenants should fail to produce rent. Even if the building has strata insurance, landlord insurance provides considerably more specific protection for property investors.
Arguably every kind of insurance is a necessity, but few types are more important than travel insurance. Through CHU’s online service CHUiSAVER, customers can get a free quote and instant cover across a range of different options and personal circumstances.
“But the key is communicating consistently, by telling people what we did and what we said we’d do, and what we will do. It brings them along on the journey with us.”
It’s only been two years since Bobby last spoke with The CEO Magazine, but in the world of business, that’s no short time. This is particularly true in an environment where digital technology keeps evolving and disrupting not just insurance, but all industries as well.
“We’re now on the cusp of embarking on a whole new journey, informed by different contexts.”
Two years ago, CHU had only recently introduced CHUiSAVER, which has since proved to be very successful. Since then, the radical disruption of loss adjusting has been implemented and become a similar success.
It’s pretty clear that Bobby’s predictions of a constantly fluctuating market aren’t just passive spectatorship; as CEO, he continues to actively reshape both CHU itself and the market, and the results continue to lend proof to the efficacy of these efforts.
“A lot of what I talked about the last time has come to fruition and has catapulted us to a level of success that we just hadn’t enjoyed previously,” Bobby says.
“We’re now on the cusp of embarking on a whole new journey, informed by different contexts. It’s some of the same themes, but there are new themes around artificial intelligence, diversity and inclusion, the environment, disruptors and charting a course for what is a very different future. We need to ensure that there’s no complacency around the future, because it’s going to require different skills.
“It’s the whole concept of continued relevance and leadership in a changing world,” he continues. “The impact of the Fourth Industrial Revolution. The impact of the environment and climate change and how it is that we can not only respond to it but also navigate and chart a course to hopefully assist with that. And, of course, diversity and inclusion, which isn’t just a why; it’s a how, it’s a what.
“It is absolutely key to our future business success and the future success of many other businesses.”
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