Bill Scaldaferri was appointed CEO for Allianz Global Corporate & Specialty S.E. in North America in July 2016 and is responsible for the Allianz S.E. unit's business in the U.S. and Canada, which accounts for  about 40% of AGCS's global annual gross written premium of €7.4 billion ($9 billion) in 2017. He previously ran AGCS’s alternative risk transfer group and represented that business to its board. He also managed specialty lines on a global basis for AGCS, serving as chief underwriting officer for that business. New York-based Mr. Scaldaferri recently spoke with Business Insurance Reporter Matthew Lerner about innovation, technology and other issues. Edited excerpts follow.

Q: Where are the growth opportunities in today’s market?

A: You talk about growth, growth opportunities, technology. I think everything is coming down to innovation. Tech, data, the doing your day-to-day differently. As an example, bridging the gap between capital markets and insurance — that is what we do … Providing cyber insurance, it’s what we do, but we’re doing new things in those spaces. So, innovation there, as an example, is not based on technology, necessarily, but we’re doing new things in that area.

And then I would also include culture, because I believe you can do these different things, different deals, executing different transactions that are innovative. But if you don’t have the culture of innovation, those will be one-offs and you won’t become a truly innovative entity.

If you develop that innovative culture, I think you also start to address the needs of attracting, retaining and developing the proper talent. So when I think of innovation, it goes from the obvious, which is technology, but also to the day-to-day doing what you do but doing it in a new and market-moving way, being first to market in a certain number of elements, and then also addressing the talent issue.

Q: As you adopt new data and technology, does that then require a new layer of talent to manage, implement and drive?

A: Yes. It’s interesting. What do we do with that data? If previously I said you were underwriting a risk based on 10 points of data, now you’re underwriting a risk based on 100 points of data. I’ve given you 90 new points of data. What do you do with it?

We have to make sure we’re building the skill set not only to access those additional 90 points but also to know what to do with that information. So from an evolution of the underwriting role, I believe we’re going to see the necessity to think more from a portfolio standpoint and more from a data scientist standpoint.

Q: Could this lead to a different mix of employees — more data professionals and fewer traditional underwriters?

A: I think, frankly, it’s a bit of both. I think the reality is going to be that qualifications for a role are going to evolve, and this isn’t going to happen from one day to the next. It’s going to happen over a multiyear period, and it’s going to be an evolutionary process as opposed to revolutionary.

I think that allows the current underwriting group to evolve, but we’re also going to bring in new talent. And I think by bringing in new talent, we’re going to start to look for new and different types of skills, and I think between those two you’re going to have a very interesting balance.

Q: Is recruiting and attracting talent a challenge?

A: I think it’s fair to say insurance is not a dominant major in colleges and universities. So if you’re facing that situation, that this is not a driving major in universities, how do you then count on that system to deliver to you the next generation of talent?

So what we’ve done proactively now is working on internships. We’re working with some local universities developing an internship on the cyber space. There are some schools that now have a new major which is homeland security and cyber security.

We thought, “Wouldn’t it be interesting to start bringing in some of these cyber security students into internships to see how those skills are being developed at the collegiate level and how these students could potentially work their way into becoming a cyber underwriter?” You still recruit the economics majors and finance majors, accounting. That doesn’t stop. You need those skills, but we need to start looking at people that can think of risks from a different angle.

So if you’re learning about cyber security in college, you’re learning it from a very different angle than those who have learned it from a purely underwriting standpoint or an insurance company role.

Q: Is third-party capital really “alternative” anymore? Or has it crossed that threshold?

A: We believe that capital market investors — as an example, pension funds — now look at insurance as a true asset class. If it’s reached that level, I don’t think it’s actually still “alternative” anymore.

Working with capital market investors for over a decade led us to a unique, first-tomarket offering last year called Alternus. We partnered with Marsh (L.L.C.) and Nephila (Capital Ltd.) to offer a solution to corporate property customers with natural peril exposures. AGCS writes a 10% share of the shared and layered corporate property business of Marsh and cedes the natural peril component to the capital markets. This allows each risk-assuming party to keep the risk profile in which they are interested.

Q: What has occupied most of your time during this first year in this role?

A: The first thing that popped into my head was culture, because I think we are an industry that is in the middle of a significant change. And when you think about the change that technology and data are bringing to this industry, I think in order to be successful you have to have the right culture because you must innovate. Again, not just by technology and data but also in how you execute your normal daily business in new and innovative ways.

You have to have a culture that is either like-minded or amenable to these types of changes. In order to get to that next-generation insurance company, we have to evolve into that, and you cannot evolve into that just by osmosis. You have to make a proactive effort to do that.