“Insights from the Top: 3 Questions with PLM Leaders.” Every month, we’ll feature a different member of our leadership team, offering their perspectives on industry trends and the crucial role PLM plays in addressing the needs of the wood niche.
In this month’s edition, we are joined by John K. Smith, President And CEO.
Q. Insights from the Top: What has been your biggest challenge at PLM this year?
A: John Smith: When managing a company or business, it’s challenging to pinpoint just one significant hurdle. We have several areas that demand my attention: reinsurance, cybersecurity, investments, and underwriting profitability. However, the most pressing challenge we face is sourcing exceptional talent. We’re not just seeking good people but great individuals who can deliver top-notch service, possess deep insurance expertise, and effectively communicate with our insureds. Our business revolves around providing insurance coverage and peace of mind, which hinges on the capabilities of our team. While we’ve had some success in recruiting talent last year, the ongoing quest for exceptional individuals remains a constant struggle. As we encounter departures or retirements, our focus shifts not just to replacement but to finding individuals who can exceed the contributions of their predecessors. People are a critical aspect of our operation and securing them is always a formidable task.
Q. Insights from the Top: What can businesses in the lumber and wood industries expect in 2024?
A: John Smith: I anticipate a slowdown in the economy, with interest rates decreasing but possibly not enough to stimulate the mortgage market and home building. Ideally, we need around 1.5 million new homes constructed this year to meet demand, which is crucial for our insured businesses and our own. Finding skilled personnel is a concern shared by both our insureds and those in the wood industry, as they require staff proficient in customer service and unafraid of hard work. Additionally, there’s a growing need to focus on cybersecurity, particularly within the wood niche, as businesses become more automated and vulnerable to cyber threats. So, it’s essential to address these challenges in the upcoming year and beyond.
Q, Insights from the Top: What is your biggest piece of advice to insureds?
A. John Smith: It’s crucial to acknowledge that when I engage with a room full of insureds or attend dinners among insureds, I often represent the largest insurance buyer, namely PLM. Our investment in reinsurance programs this year could exceed $200 million. While this aspect operates behind the scenes, it’s akin to how insureds manage their insurance programs, or rather, how they should manage them effectively. I will delve into our approach and the successes we’ve achieved.
Firstly, it’s essential to cultivate the right partnerships and identify key partners. We invest significant effort in nurturing relationships with underwriters from a diverse array of reinsurance companies, numbering between 20 to 30 globally. It’s imperative to present a comprehensive picture of risks and opportunities to these companies to ensure profitability. Loss control measures are paramount to minimizing frequency and severity, thereby safeguarding against losses. Familiarity with claims personnel is also vital to streamline claim processes.
While certain reinsurers may entail higher costs, the value they offer in terms of financial strength and protection against losses outweighs the expenditure. Our reinsurance procurement process spans the entire year, commencing as early as May with visits to reinsurers, culminating in renewals on January 1st. Establishing and nurturing relationships with providers is integral, a practice that insureds should also adopt.
Many insureds may solely interact with brokers, which is acceptable, but fostering relationships with insurance companies providing coverage is equally crucial. It’s important to ascertain the added value brokers bring and to communicate this effectively. The parallels between what insureds should do with insurance companies and what we do with reinsurers underscore the significance of this topic.
The tendency of some insurers and insurance companies to procrastinate until the last minute in issuing policies and quotes poses a challenge. However, with proactive management, this challenge is surmountable.
