Hugh McGowan sees new insurer managements as more stable
By Bruce D. Hicks, CPCU
The new Society of CPCU President, Hugh McGowan, owner and principal of the McGowan Insurance Group, Inc., in Indianapolis, Indiana.
A highlight of each Society of CPCU Annual Meeting is the introduction of the new president. This year, with the exotic sounds and sights of New Orleans as a backdrop, Hugh B. McGowan, CPCU, was handed the reins of that preeminent insurance organization.
McGowan, owner and principal of the McGowan Insurance Group, Inc., in Indianapolis, Indiana, has dedicated his working life to the insurance industry. He takes over the presidency at a time when the Society of CPCU is positioning itself to thrive in the new century. The latest in a long and distinguished line of Society presidents, McGowan is well aware of the obstacles faced by many insurance professionals in meeting their personal and organizational objectives.
While tending to his duties during the Society's annual meeting, he graciously made time to talk about a number of issues related to insurance and the Society of CPCU.
State of the P-C industry
Asked about the challenges to insurer profitability and overall industry strength, McGowan says, "Today I see that more companies are being driven by financial people rather than marketing people and this is a good thing. Financial (services) leadership is more stable than traditional (insurance) management which seems to have resulted in a more cyclical behavior. I also feel that changes in liability claims and reserving practices will help us stay financially strong."
McGowan definitely thinks that the industry will be bolstered by harder-nosed leadership and by increasing its accuracy in acknowledging financial obligations to insurance consumers.
On the issue of state vs. federal regulation, McGowan says, "That is an area where I am traditional. I believe that regulation on the state level has served the insurance industry and the public quite well. One change I am in favor of is seeing a higher level of reciprocity between states."
In other words, rather than having a federal authority manage the industry, he would encourage continued state regulation (which typically reflects unique state market needs), accompanied by each state showing more willingness to adopt forms and programs approved by their peer state insurance authorities. McGowan's opinion is in sync with others who want to preserve state-level insurance regulation but make it more responsive to companies transacting business on a regional or nationwide basis.
When asked what has driven his insurance career, McGowan says, "It's a wonderful industry that is responsible for rebuilding businesses and lives. Our industry has to do a better job of getting this message across. We sell a great, though intangible, product."
McGowan says that his feeling for the insurance business hasn't changed. He still enjoys being a part of the insurance industry because "It's so important to support other businesses."
Of course if insurance is to continue its role of facilitating the rest of the economy, it is critical that new members join the ranks of insurance professionals. McGowan has his own opinion on young people and insurance.
"Young people who are coming into the industry today are bright and motivated to stay with the industry. I feel that we have a good group of young people. The industry has been quite successful with its Young Agents programs and I'm proud of it. However, I also think that agency perpetuation is an important issue that still needs to be addressed."
Society of CPCU
McGowan has been actively involved with the Society of CPCU since he received his designation in 1976. As is the case with all Society presidents, he rose to his position after many years of serving at the local, regional and national levels.
"The biggest benefit of the Society of CPCU is the people involved (in the organization). Many CPCUs are quite dedicated to the industry, and networking opportunities are important. Also, different people bring different aspects to the industry."
An aside on diversity
McGowan doesn't just preach the message of involvement and working with others, he is a role model of that approach. For example, he was a surprise visitor to the meeting of the Diversity Implementation Task Force. He sat in and listened to the group as it worked through its agenda. Before leaving for another appointment, McGowan asked if he could have the floor. He then thanked each person for serving on the task force. He also mentioned how excited he was about the strides the Society was making in recognizing the importance of a diverse membership. He also said how it is critical to actively promote more diversity.
"I believe that regulation on the state level has served the insurance industry and the public quite well. One change I am in favor of is seeing a higher level of reciprocity between states."
--Hugh B. McGowan
Society of CPCU challenges
Like all the former CPCU national presidents, beginning with Robert Babbitt in the Society's founding year of 1944, McGowan is a strong believer in the Society of Chartered Property and Casualty Underwriters and its importance to the insurance industry.
"I think that we are a preeminent insurance organization. I think that it's important that the Society preserve it preeminence because it is through ethics and education (that we have) built a legacy of excellence. It's important to continue to provide education and technical programs to (our) members."
"We must continue to reach out to (insurance) companies and agencies to tell 'our story' about what we provide through education. A CPCU is a very positive designation to have. It enhances job opportunities."
In order for an organization to remain successful, it needs to have an aggressive set of standards, according to McGowen. Rather than stand pat with the way it measures its performance, the Society's national leadership has completely revised its recognition program. It created the Circle of Excellence program, which provides a template for performance excellence. It consists of several major performance areas that are broken down into objectives that a chapter can choose to meet. Depending upon the tasks selected and completed, the chapter may qualify for a Brass, Silver or Gold award. McGowan's own chapter (Central Indiana) qualified for a Gold award in 2003.
McGowan says, "The Circle of Excellence program appears to be working quite well to support local chapters. Over a hundred chapters won Circle of Excellence Awards. I attend the awards luncheon and I was very impressed by the pride and energy shown by the winning chapters. It's working very well."
Besides the vitality of the local chapters, McGowan is also pleased by how well the Society is being served by its Special Interest Sections. There are 14 such sections (Underwriting, Claims, Information Technology, Reinsurance and others) that allow CPCUs to get involved in an area that aligns with their job responsibilities or with their particular area of interest. Each section focuses on issues that affect its area, and the sections also participate in the Circle of Excellence program. Several sections participate in the Society's annual meeting, providing speakers and panelists for a variety of educational sessions.
Being a leader means balancing an appreciation of the past with a concern for the future. McGowan points out, "Another interesting and important trend is the high number of local chapters and Interest Sections that have established Web sites. These sites are further evidence of the vitality of our chapters and interest sections. Along with our continued commitment to education, such initiatives help to attract new Society members." *
For more information:
Society of CPCU
Web site: www.cpcusociety.org