1. Keynote – Unconventional Warfare Techniques Applied to Insurance Markets Lt. Colonel Michael Barth, Associate Professor of Finance, The Citadel School of Business May 9, 2016

2. What is Unconventional Warfare? Conventional Warfare Large units operating to scale in mutually supporting and coordinated fashion to achieve an objective Rules and formula based warfare Established strategies and tactics Logistics heavy Traditional military forces Large units operating to scale in mutually supporting and coordinated fashion to achieve an objective Rules and formula based warfare Established strategies and tactics Logistics heavy Traditional military forces Unconventional Warfare Small units operating with a high degree of independence but with a clear understanding of ultimate purpose Relatively less logistic support Asymmetric warfare Force multipliers Special operations forces Small units operating with a high degree of independence but with a clear understanding of ultimate purpose Relatively less logistic support Asymmetric warfare Force multipliers Special operations forces

3. Conventional or Unconventional – It Is Not About One Being “Better” Than The Other, It is About One Being More Appropriate To A Specific Situation Than The Other. Use the Right Tool For The Job.

4. (Un)Conventional Insurance Markets? ConventionalUnconventional One of these two homes is probably easier to underwrite, easier to value, easier to handle claims on. Is one of them “better” than the other?

5. (Un)Conventional Insurance Markets? Conventional Unconventional Lots of Camrys on the road and lots of ordinary people driving them. Basically, a mass-produced car for a mass-produced population of average people that are “conventional” for all intents and purposes. Not quite so many Jaguars on the highway, and the folks driving them are not necessarily the same folks you run into at the WalMart on Saturday. Not better. Not worse. Just different.

6. Who Are Special Operations Forces? Army Rangers Army Special Forces 160 th Special Operations Aviation Regiment Naval Special Warfare Groups (SEALs) 1 st SF Operations Detachment - Delta Air Force Special Operations Wings Marine Raider Battalions Coast Guard Deployable Operations Group

7. U.S. Army Special Forces

8. What Attributes Makes Special Forces Soldiers Special? High level of intelligence (book smarts) The ability to work independently in an unstructured workplace (street smarts) The ability to operate effectively in small teams The stamina to operate under high stress An affinity for cultures other than their own Inquisitiveness, initiative and self-motivation Moral and physical courage A laser focus on “Get ‘er Done!”

9. What Are Some Things That They Do NOT Do So Well? Routine and repetitious tasks Follow the rules Conform Get along with the program Accept things as they are Defer to others Stay put Like many stereotypes, it is not appropriate to apply these traits (either good or bad) to ALL SF solders, but the type of individual that is drawn to SF and that stays in SF tend to exhibit more of these traits than the average soldier. The traits are not good or bad, they are what they are, but that means that there are some jobs that are a better fit for this type of individual. Assigning the right people to the right jobs is the key to success in any organization.

10. What Special Forces Strategies & Tactics Are We Talking About Here? 1.Recruit the right people to the right job 2.First train individuals, then train teams 3.Focus teams on specific areas 4.Articulate what success looks like, but defer to the team to decide what tactics are needed to get to that point 5.Write stuff down

11. Before I ask you to simply drink the Kool Aid, let’s look at some examples of translating military skills and tactics into business skills and tactics

12. Robert Roger’s Standing Orders http://www.goarmy.com/ranger/heritage/rodgers-orders.html 1. Don’t forget nothing. 2. Have your musket clean as a whistle, hatchet scoured, sixty rounds powder and ball, and be ready to march at a minute’s warning. 3. When you are on the march, act the way you would if you were sneaking up on a deer. See the enemy first. 4. Tell the truth about what you see and what you do. There is an army depending on us for correct information. You can lie all you please when you tell other folks about the rangers, but don’t never lie to a ranger or officer. 5. Don’t never take a chance you don’t have to. 6. When we’re on march we march single file, far enough apart so no one shot can go through two men. 7. If we strike swamps, or soft ground, we spread out abreast, so it’s hard to track us. 8. When we march, we keep moving till dark, so as to give the enemy the least possible chance at us. 9. When we camp, half the party stays awake while the other half sleeps. 10. If we take prisoners, we keep ‘em separate till we have time to examine them, so they can’t cook up a story between ‘em. 11. Don’t ever march home the same way. Take a different route so you won’t be ambushed. 12. No matter whether we travel in big parties or little ones, each party has to keep a scout 20 yards ahead, 20 yards on each flank, and 20 yards in the rear, so the main body can’t be surprised and wiped out. 13. Every night you’ll be told where to meet if surrounded by a superior force. 14. Don’t sit down to eat without posting sentries. 15. Don’t sleep beyond dawn. Dawn’s when the French and Indians attack. 16. Don’t cross a river at a regular ford. 17. If somebody’s trailing you, make a circle, come back onto your own tracks, and ambush the folks that aim to ambush you. 18. Don’t stand up when the enemy’s coming against you. Kneel down, lie down, hide behind a tree. 19. Let the enemy come till he’s almost close enough to touch. Then let him have it and jump out and finish him up with your hatchet.

13. Rule #1: Don’t Forget Nothing Plan for the expected and plan for the unexpected, based on the mission at hand Check on the small stuff as well as the big stuff Remember the lessons learned in the past and foster a culture of remembering failures as well as successes There is a difference between remembering and obsessing – remember lessons learned from failure, but forget about assigning blame Write stuff down so you don’t forget it

14. Rule #4: Tell the truth about what you see and what you do. There is an army depending on us for correct information. You can lie all you please when you tell other folks about the rangers, but don’t never lie to a ranger or officer. Honest communications up and down the line are imperative for successful business operations Mistakes happen, but as long as they don’t become habits, they remain learning opportunities for EVERYONE Assigning blame is counterproductive unless the goal is to prevent future errors Be completely honest within the team

15. Rule #6: When we’re on march we march single file, far enough apart so no one shot can go through two men. Risk management matters Space in between men reduces risk but impedes mutual support as well as command and control – there is a tradeoff Overlap and redundancy are conventional tactics, but come with a cost in both dollars and efficiency Diversify the tasks so that failures in one area do not contaminate other areas

16. Rule #13: Every night you’ll be told where to meet if surrounded by a superior force. Again with the risk management! Get into the habit of continual contingency planning Have a culture of recovery Don’t forget to plan for both big and small catastrophes Communicate -- everyone needs to know the fallback (Plan B) and they need to know it before it has to be implemented

17. Rule #16: If somebody’s trailing you, make a circle, come back onto your own tracks, and ambush the folks that aim to ambush you. When you are operating without a lot of support, you have to be able to react quickly Be proactive in responding to competitors, rather than reactive or submissive Wargame your possible responses before you need to practice them for real Although the circle ambush is a valuable tactic, it really depends on the situation Google Poised to Enter U.S. Auto Insurance Market: Report Giant search engine Google, which already offers auto insurance online in the United Kingdom, could soon be selling auto insurance online in the U.S. Google Compare Auto Insurance Services Inc., its online auto insurance shopper, has been licensed to sell insurance in at least 26 states and is working with several insurers including Dairyland, MetLife and Mercury Insurance, Forester Research’s Ellen Carney reported in her blog this week. http://www.insurancejournal.com/news/national/2015/01/09/3535 93.htm Google Poised to Enter U.S. Auto Insurance Market: Report Giant search engine Google, which already offers auto insurance online in the United Kingdom, could soon be selling auto insurance online in the U.S. Google Compare Auto Insurance Services Inc., its online auto insurance shopper, has been licensed to sell insurance in at least 26 states and is working with several insurers including Dairyland, MetLife and Mercury Insurance, Forester Research’s Ellen Carney reported in her blog this week. http://www.insurancejournal.com/news/national/2015/01/09/3535 93.htm

18. So Back To The KoolAid… The bulk of insurance is sold and serviced by conventional forces (State Farm, Liberty Mutual, GEICO, etc.) The unconventional market is smaller but more complex, and to be successful in these markets requires many of the same skills practiced by Special Forces Adapt the skills to fit your markets, and adapt your training accordingly

19. 1. Recruiting the Right People for the Right Job Hiring folks straight out of college means training them in the basics (e.g., what’s a premium?) Hiring experienced people from other organizations means retraining costs, but it also brings in fresh perspectives Establishing a “special” culture within an organization helps recruit the right people Perceptions matter

20. 2. First train individuals, then train teams SF individual training takes up to a year to get the soldier qualified in ONE skill set, but training is continuous and never stops SF soldiers train their fellow team members Enlisted SF can stay in the same place for decades and grow huge expertise in their job, but captains come and go like the seasons Realistic training = valuable training, unrealistic training = wasted time Language training is team-building

21. Structure of a Special Forces A team Team Leader (Captain) Heavy Weapons NCO Light Weapons NCO Senior Engineer NCO Junior Engineer NCO Senior Commo NCO Junior Commo NCO Senior Medical NCO Junior Medical NCO Executive Officer (Warrant) Team Sergeant Operations & Intelligence NCO Each basic skills position has a built-in redundancy, so that a 12 man A team can operate as two 6-man split teams. Each member is cross-trained in at least one of the other basic skills specialties, and the warrant officer, team sergeant, and O&I sergeant have come up through the ranks and have served in at least one of the four basic skills positions.

22. Team Training Training is split into cycles – about one-third to individual training, one-third to team training, and one-third to operations Training becomes a culture of continuous improvement, and thereby second nature Nobody is ever “too proficient” Team training accomplishes multiple goals at one time – cross-training for the team plus teacher training for the instructor plus brain-storming Area studies gives the team a common focus

23. Parallels in Insurance World Teambuilding events like company softball games, company picnic, host the agents events, and group dinners Interviewing skills training CPCU recognition and rewards Company-paid degree completion and/or graduate school courses Secondments (loaning employees)

24. 3. Focus Teams on Specific Areas Teams focus on particular areas, although they are flexible enough to go anywhere Team members learn to appreciate (not embrace) the culture of the target area of interest Area studies are continually updated and revised Time spent in the other culture is time well spent, because book learning only goes so far SF soldiers work with many different people and cultures, including some that are more tolerant of US assistance than eager for US assistance.

25. Insurance Industry Parallels State Specialists Coverage Specialists Risk Retention Groups Surplus lines carriers Managing general agents Captives

26. Intelligence Gathering Skills Current intelligence is important for both conventional and unconventional operations as well as strategic national planning Intelligence gathering has long been a bread-and- butter mission for special forces – Open source intelligence gathering (area studies) – Living, visiting and working in areas of interest – Intelligence networks among the population – Direct intelligence gathering in denied areas Operations & Intelligence is one of the ten enlisted slots on an A Team

27. Parallel Intelligence Gathering in the Insurance Business Marketing Reps Field trips Agency visits Familiarity with regulators Legislative Industry events

28. 4. Articulate Success, Not Methods Establish the mission objective Describe commanders intent Outline restrictions Allow appropriate planning Pre-Launch Briefback Mission Launch Post-Mission After Action Report

29. Authority and Responsiveness An SF team on the ground may be asked to make fairly high-level decisions with fairly low-level authority. The ability to communicate the needs and wants of the clients and to get quick responses from higher up the food chain is critical towards building trust and achieving long term goals A key skill is reading people – both the foreign client and the US authority Special Forces (and others) escorting Hamid Karzai back into Afghanistan in late 2001 as the U.S. worked to oust the Taliban and re-establish a friendly government.

30. Parallels in Insurance Pure Captive – cost center or a profit center? Association Captive – walking the line between cooperative efforts and competition Managing General Agency – what can they do and what can they NOT do? Coverage Specialist and State Specialist Surplus lines – when to get in, when to get out

31. Unconventional Missions Not every problem requires an unconventional solution When you are a hammer, everything else tends to look like a nail Clear intentions lead to fewer distractions Trust… but verify There is no “I” in team, but there is in “weareallinthistogether”

32. 5. Write Stuff Down Know the mission Know the team responsibilities Collective memory is more often collective amnesia History doesn’t repeat itself, but it does rhyme Acknowledge errors and own them Collective after-action reports versus one-person after-action reports

33. Questions and Comments