From Capitol Hill to Catalyzing Innovation: Joan Woodward on Insurance, and Driving Societal Impact

Right, yeah, it is. It is. Well, look, thank you for joining me.

Sure. So I landed at Travelers about 16 years ago and our CEO and vice chairman, who is now CEO Alan Schnitzer, had the brilliant idea of starting a think tank and it's called The Travelers Institute. We're more of a do tank than a think tank, we'll get into that later. So I was asked to come over from Goldman Sachs, where I ran the Global Markets Institute for 10 years, and start a think tank at Travelers. So my background is I worked on Capitol Hill, I worked in the government for 12 years, Chief Economist on the House Budget Committee and Finance Committee, and played a role in creating the Roth IRA, which in the US is an instrument for saving for retirement. I worked with Senator from Delaware, Bill Roth, he was Senator for 30 years with Biden on the other side. So I've had a wonderful career, I feel very lucky. I didn't know much about the insurance industry 20 years ago, but I sure do now.

Yeah, so the concept is this is to help raise awareness about really important public policy topics for regulators and legislators and the general public at large. So we have several different platforms. Again, I say we're a think tank, we do write white papers, of course we do, because that's kind of bread and butter, but we like to get out in the communities and engage with our agent and broker partners to raise awareness around topics. I'm going to give you an example of a couple. One in our personal lines business is Every Second Matters, which is raising awareness around distracted driving and the dangers and things you could do to prevent that. On our business insurance side, it's raising awareness around cyber security threats. And of course, insurance plays a very large role in cyber security, it is that backstop for businesses to recover and be resilient in the case of a breach or a data hack, which is happening more and more around the world. So we're raising awareness to not just the public, but agents and brokers, regulators, legislators about our industry. And look, we have 30,000 experts and we want to share that knowledge in a nonpartisan way, in an unbiased way, knowledge sharing about our industry. Because frankly, people do it once a year and they don't think about it, right? They sign up for a policy, they don't read the policy. So understanding what's in there and why it benefits society and talking about it in those terms. And look, we're a GDP-driven industry, we want more trucks on the road, we want more people working. So from the macroeconomic standpoint, we touch everything. That's always been the thing that I found interesting about insurance from day one.

Look, an educated electorate, educated consumer, an educated person of the world is always better off knowing more versus knowing less. And again, I think we at Travelers that the insurance industry provides great benefits to society, not just personal insurance but business insurance, some of the specialty insurance products, some of the new products coming out. Look, 20 years ago we didn't have a cyber security insurance policy, right? So we evolve and we innovate as the world changes. So I think what's really exciting about our education and awareness platform is we're providing a benefit to society who is better educated, more informed. You always want that about your consumer, to have the most information at their fingertips so they can make that informed decision about their buying power.

Well, other than my airline frequent flyer miles, it is getting out into the community, and globally actually, we have a large presence in Canada and the UK, and talking to people about their lives, about their businesses, understanding risk. We have a couple of platforms right now at the Institute. We've just launched a new one I'm very excited about, it's called Workforce Risk. So understanding everything that's going on with your employees, right? How they think about their jobs, their engagement level. If you have an engaged workforce, they're going to be more productive, they're going to be happier. Thinking about mental health and other things that can happen to your employees along the way. And that translates back to the business, always tied to the business. Kind of workers compensation. So if you think about a worker who takes workers' comp because of a tragic accident and they're sitting at home recovering as they should be, isolated, right? And just wondering, what's my job going to be like when I get back? So mental health issues, even PTSD comes into place in a lot of the more traumatic accidents that happen out there in the workforce. So our Workforce Risk and understanding what risks are in your employee base, you could better price products, you could better anticipate health care costs. So again, being educated about these issues for employers. So we do events throughout the country. We were in Philadelphia a couple weeks ago, we had 250 agent and broker partners talking about cyber security. And we've had partnerships with, for example, the Department of Homeland Security, the FBI in the US, understanding the threat landscape for cyber security risk for a business. And then again, educating, making people more aware of their risk. Again, we want an educated consumer.

Yeah, so we get most of our topics and ideas from what's percolating in the business, what's new in the business, and what risks they're seeing that are not fully aware of. Risk managers and CFOs, we did a big CFO study recently and we released it at RIMS, the risk management global conference, talking about what keeps CEOs and CFOs up at night. So we write a white paper there, then we take it on the road. We've been to 200 cities in the last 15 years. We're celebrating our 15th anniversary at The Travelers Institute and we've hosted, I'm going to say, more than 500 programs. This year alone I have been to 30 cities, talking to agent and broker partners, hosting events, listening to their concerns, and then bringing back and trying to talk to policymakers and regulators in Washington and state capitals. You know, the insurance industry is regulated by the states in individual states in the United States, understanding the risks that are unique to each of these states like wildfire risk in California and Colorado. So we roll out wildfire prevention platforms, we write white papers on that, we take it on the road, we have webinars. I host a Wednesday webinar, Wednesdays with Woodward, if you haven't tuned in. So just like you, we're trying to get the word out and trying to educate.

Yeah, when you talk about an image problem, I think certain circumstances, okay, one incident could change the perception of what insurance plays in people's lives. But we're there on your darkest day. We're there when your house is burned down, a hurricane has just come through and leveled your house. We're there when a business gets interrupted by a cyber security hack. And just bringing businesses back from a hack is not easy, right? And recovering data and being that trusted advisor for consumers and businesses. So being there on your darkest day and then having an excellent claim service that executes every single day, day in and day out, with complete care for the customer. But there will be instances, of course, in any business that don't turn out like the consumer or the businesses had hoped. But then again, are they understanding what insurance product they actually bought? Right? Are they understanding their coverages? Did they get the right coverages for them? So I'm going to say this, this sounds negative, but it's like going to the dentist. You know, you have to go to the dentist right once a year or twice a year. It's good for you, the dentist provides incredible amount of services for your health and well-being, but you don't like to do it. So not a lot of people like to pay that insurance premium once a year, right? It's just, but you know it's going to be there for you if you need it. So I don't know if the insurance industry should be put in the same bucket as the dental industry, but that's the way I think about it. It's good for you but you don't like to write that check every year. But we're going to be there when you need us in your darkest hour. So again, raising awareness about all the good companies do in society. Think about workers' compensation claims. You've been injured in an accident that wasn't your fault and we completely take care of your health care, again your mental well-being. So we wrap our arms around businesses and people to provide services when they need us most. And I think that's a good way to think about it.

Yeah, look, 10, 20 years ago when direct to consumer was kind of a big thing and coming on the scene, a lot of our agent broker partners were worried that their jobs were going to be taken away all of a sudden. But the world has gotten more complex and risks have gotten more complex, especially for business owners. So having that trusted advisor to rely on for advice, because I will guarantee you your broker or your agent has seen everything, right? They've seen every possible scenario that has come before all their many clients. So what might happen to you next week in your business, that agent and broker has had experience with that risk, right? And knows how to handle it, knows what's right and what's wrong in terms of the coverages for you and your unique situation. So I think about it like this: you know, I never bought an insurance rider on my jewelry, right, until I had jewelry. Never even dawned on me to buy that. So think about wedding insurance, like on your most precious day, if something goes wrong, you have insurance to back you up. Now it's not going to the memories are going to be there that your caterer didn't show up or your photographer, but the point is that insurance products and we've innovated so much recently in the last 10 years of insurance products and we continue to innovate in the business. I'm circling around your question, but to say that I think there's a lot that the agent and the broker is there for you. And whatever small commissions being paid or whatever, their value is just so invaluable to get that perspective because you want to run your business, you don't want to have to worry about every single risk that could hit you in your business. You want to be running whatever business it is for profitability. So having that trusted partner next to you, and that's why we're such a big advocate of independent insurance agent brokers.

Yeah, let's take self-driving cars. So insurance products are made to allow for innovation. Let's just say that. In the beginning, when an innovation occurs in a sector or an industry, that new product that was just developed must be insured. Anything of value should have insurance, right? So our industry is innovating and allowing for innovation in different industries. So products, insurance products can be written and can be new to allow for innovation in the future, right? So think about SpaceX and things that have happened, just mind-blowing things you never thought would happen 5, 10 years ago that are happening in the world today. So we have people thinking, in fact we have an Innovation Jam every year. I think it was over a thousand people at the company participated in an innovation jam and we all get together. Of course we have winners and not losers, everyone's a winner, but we award those best innovations that allow for innovation in different industries and different sectors. So we feel a culture of innovation and an innovation mindset for our company anyway has propelled us and given us that advantage in the marketplace. So I think any business who's not innovating every single day to think about what's around the corner, and sometimes it's hard to see around the corners, but you know that corner is going to happen to your business and you want to be ahead of the curve. And our insurance products have to be ahead of the curve to allow for innovation in many different industries as you say.

I guess the one thing I'll say is, you know, working on Capitol Hill for 12 years as a younger person in my 20s and 30s, government entities who have never been in the private sector, they just don't know how industries work. They just don't know because they've never lived that. Or maybe they've lived in a small way. Actually, what's interesting about our current Congress, there's a lot of members of Congress who actually had a background in insurance, which we think is a very good thing. But a lot of government entities, for example when I helped my boss Senator Bill Roth writing the Roth IRA, we had to rely on the Wall Street investment managers to help inform where those Roth IRA cutoffs for, you know, are you going to allow $5,000 a year to be put away for your savings? So we had to rely on the mounds of data and analytics that this industry had done to inform how Congress was going to write this law, right? So working with government and private sector in industries to inform what, for example, a law should be that's going to affect hundreds of millions of people for decades to come. So I think again, partnering with government entities to ensure they understand what each business, and I'd say this for any business you're in, if you're in the oil and gas business, having regulators and policymakers in Washington and around the state capitals understand exactly what your business is trying to achieve. And look, we're the largest employer. The government is not employing as many people as the private sector. There's a lot of evidence out there that people don't trust institutions these days, the institution of government or of higher education or the healthcare system. People are not trusting us to do the right thing for them and their families. And the insurance industry, if you think about it, is always going to do the right thing for the business and for the individual. That's our job. So I've threaded through my career of government, Wall Street, and insurance. And I say the common theme really is to always try to understand the other person on the side of the table you're negotiating with or you're working with. Understand what shoes they've walked in in their industry and learn as much as you can about different things you don't necessarily think you know about. Try to know more about those things and the different industries, the government role, the private sector role, and then your role. What is your role? You have a responsibility as an employee of a company or as a person walking in. And again, through our claim department, the claim people who go out in the field after a disaster and save people's lives, they're out there. So our industry has a very, very large role to play. But again, I'd say the theme is be as educated as you can, and that's what we're trying to do with The Travelers Institute, which is to help people become aware of their environments.

Yeah, I would say first of all the macroeconomic environment, and this is a global thing, right? Not just contained to the US. Supply chain issues and supply chain disruption, we all suffered during the pandemic and really opened our eyes to how dependent we are on other countries to provide really basic things, right? And the chips or the semiconductors and things like that. So knowing your vulnerabilities, which is kind of the number one risk, understanding that risk and how you can mitigate that risk in your business or in your personal life. Again, I talked about cyber security, it's a very big issue for the industry and for every single business out there. So it cuts across all industries. And a cyber insurance product for a business can differ greatly. What they need to insure, whether they have data, whether they have hard assets. Look, in the United States and I know around the world, a lot of the, for example, the electrical grid, the electrical grid is not owned by the federal government here, it is owned by private sector businesses that cut across state lines. And the common threat of a cyber threat to those businesses could affect all of us if the electrical grid goes down or the waterways, right? So we're focused on the big picture issues with a specific risk management eye, if you will. So Workforce Risk we talked about, the employee, the whole of the employee. And look, human capital is your biggest asset in any business, right? And you want to make sure those employees are engaged. So Workforce Risk, cyber security, we talked about distracted driving a lot. This is another big risk to society. If we could just save 10% of lives of the 42,000 fatalities in the United States, and that has now morphed into pedestrian deaths because of distracted driving, cyclist deaths, more people are cycling to work. So we try very hard to work on themes across our business and then draw on that expertise, deep expertise we have over our 30,000 people.

No, that's fatalities total. So obviously driving while intoxicated is still the number one cause of fatalities in the country. I'm not putting that aside, but I'm saying the rise in distraction, mostly because of our phones, let's face it, our phones are our biggest friend or our biggest enemy. But now we have something called telematics. Again, educate and inform. Telematics tells you how you're driving. So are you hard braking? Are you speeding? Are you distracted and going between lanes? So all the new technologies in our cars today, the lane avoidance thing where it kind of buzzes if you get in someone else's lane, people are turning that off. These safety features that are new and innovative, they're turning it off because it's annoying, right? So we have to train, we have to talk about the dangers of distracted driving, but also the safety features in our cars are there for a reason. And I do think government mandates in certain circumstances, having a mandated safety feature like hard braking, have really come a long way. And we incorporate those new safety features in our insurance products as well. So again, always innovating, thinking what's around the corner.

Well, and also, speak up to that driver who's distracted. So if you're a passenger, if you're sitting in the back of an Uber or Lyft, ride share, you have the right to a distraction-free drive. So speak up. And it's not a stigma or an embarrassment to say to the driver, put your phone down, or stop talking, or turn the radio off. You deserve and I'm paying for a distraction-free drive. So speak up, even to your spouse or your partner or your kids, whoever's driving and they're distracted. And set an example for yourself. Right? Because I remember back in the 70s, yes, I'm old, when seat belts first came out. I'm sitting in the back all buckled up because my second grade teacher told me to buckle up, and my dad and my mom are in the front seat not buckled up because they've never buckled up in their 30, 40 years of life. But speaking up to someone, calling out bad behavior, that's totally acceptable and you should do that. And I called my parents out many times, sometimes they listened, sometimes they didn't.

Oh, I can talk about this for hours. So first of all, the company has a long history of diversity, and our CEO says diversity is not a nice to have, it's a must have, because our population is so diverse. And we have to be more diverse in the industry, and frankly we've not been for a lot of years. And that's not true of just insurance, it's true of banking, financial services generally. He's doubled down on it, our CEO, and he created a program about six years ago called She Travels. So it's a little play on Travelers, She Travels. And we set out to be the industry leader for women. So we have a lot of senior women at the company in different businesses across the way, and I was on the steering committee. And all of a sudden the pandemic hits. As I said, I'm on the road almost every day, I'm in an airplane, that's really no joke, I really am. And I was sitting at home and I looked at my husband and said, what am I going to do? My job is on the road. He's like, Joan, why don't you take up golf? I'm like, I don't have four hours to play golf. He's like, yes you do, you have all the time in the world. So that first two years of the pandemic, I took a ton of golf lessons. All my family is golf. I have four kids and they go off to golf with my husband and I'll work or I'll stay home and clean the house, and they're all golfing. And it dawned on me, the insurance industry is a big golfing industry as well. So I'm going to go and try this thing, I don't think I'll be good at it, but what the heck, I have all this time on my hands. I was good at it, I loved it, I became addicted to golf. I played nine holes every single day during the pandemic. I'd go out at like four or five o'clock in the afternoon. And I went to my CEO and said, it just dawned on me, I am at the end of my career, and had I been playing golf for the last 20 or 30 years in the industry because there's always a charity scramble or something, then I would always say no because I'm not a golfer. Well, I went to him and I said, look, let's stand up a women's golf program. If we build it, we'll see if they come. Well, we built a program, it's called She Golfs, and we've had almost 3,000 women go through clinics across the country. And we've rolled it out to our agent and broker partners. We have a little handbook how to roll out a golf program for women. And I'm telling you, it is the most gratifying diversity program I've ever been a part of. And so when men started showing up at our She Golfs clinics, I knew I had something. I knew we were on to something because young men are also intimidated by the game of golf, right? They don't even know where to begin sometimes. And a lot of us didn't grow up at country clubs. I certainly didn't, my dad was a coal miner for 42 years. I was never introduced to the game of golf. So broadening this availability of this tool for our business, which is having more women and young men involved in a game that is so permeating our industry, I thought it was worth a try. And it's blown up, it's just blown up. We've had more than 70 clinics, again about 3,000 people have been through it in the last two years. It's brilliant.

Yeah, it's having a seat at the table, knowing the lingo, the language, the jargon. And I have to say this, and this may be cringeworthy to some people, but I feel people treat me differently. Some men treat me with a different level of respect now that I'm a golfer. And then of course we go play golf and they're like, oh God, her drive, she just outdrove me. Oh my gosh, what's going on? The world is turned upside down that some woman would beat him on that hole. And I laugh now and it's fine. But it's true that unless you see, and one of the guys said to me, Joan, wow, your level of respect just went up for you. I'm like, because I golf? Are you real? Is that for real? But it is real. And I think just again, being in the game, whether it's tennis or skiing or whatever, sports to men is a really big thing and part of a lot of men's lives. And because women are having kids, and I say this, I might get in trouble, but I never thought spending four hours on a Saturday was worth my time. I just didn't, it wasn't a priority for me. But I also think it's self-care, taking care of yourself. If you're healthy and mentally fit, you can help your family, you can be better moms, better dads. So my self-care these days is getting on the course. I'll be out there in a few hours, by the way, and playing. Even if you get in nine, it's fine.

Alex, thanks so much for having me. And love to have you on our podcast and our webinars as well. Let's do it. I'll be there anytime, anytime you want the invite.