John O’Donnell joined Pinnacol Assurance as CEO in February, bringing several decades of leadership experience to his new role leading the largest workers compensation insurer in Colorado. He was most recently an executive vice president at Allstate Corp., where he served as president, Western territory, and board chair of Allstate Canada. He previously worked at GMAC Insurance Group, now known as National General Insurance; Walt Disney Co.; and Goldman Sachs Group Inc. He says his leadership journey began as a United States Naval Academy graduate who spent several years in the Marine Corps as a pilot. Mr. O’Donnell, who is based in Denver, spoke with Business Insurance Assistant Editor Louise Esola about his transition into workers compensation and the future of the business. Edited excerpts follow.

Q: What are some of the challenges facing the insurance industry right now, particularly the workers compensation sector? 

A: A lot of this comes down to how customers’ needs are evolving; one is just the digital transformation that we’re seeing across many industries. Everyone expects it to be easy and to be able to access things on demand when it’s most convenient for them. And, unfortunately, our industry probably lags a little behind some of the other industries. I’d say banking is one that has gotten it right, and that’s something that we’re working on, to make it easy, quick, and less friction for our customers. For workers comp, what will continue to be a challenge going forward is addressing some of the comorbidities outside of the illness or the injury that’s part of the claim. Some of those, as an example, would be depression or other mental health issues. And we find that people who have these issues, especially when they’re not referred to an expert in that area, take longer to return to work, and it’s just more of an arduous process for them to get through the physical injury.

Q: As your background is not in workers compensation, are there aspects of the segment that drew you in? 

A: I worked for a couple of other insurance companies before, and I was able to connect to the mission. And, of course, having a background in the military, that’s been important for me in the roles that I’ve looked for afterwards. The mission in insurance is to protect people and then help them, in some cases, with one of the most challenging experiences that they’ll go through in their lives, whether it’s helping them when their house burns down, in personal insurance, or, in this case, caring for injured workers and making sure they get the right medical treatment and care and getting them back to work when they’re ready to go back. The combination of helping injured workers and protecting our policyholders is very important to me and something I can connect to, and it’s certainly something that our employees are very focused on. 

Q: Tell us about your military background and how it is helpful in navigating the insurance industry.

A: One of the things that you learn right away in the military, even going back as far as the Naval Academy as a leadership incubator, is what style of leadership works and doesn’t work for you as an individual. I found out early on that I function best and most effectively as a servant leader. So, rather than dictating what I want people to go do, I try and bring them together as a team, understand what they believe, what their opportunities are and their challenges, and then I try and provide the right tools, remove barriers, and help people accomplish their goals collectively. I found that has been transferable to every leadership role I’ve been in. You find that people have great ideas. Sometimes you just have to unleash those and support those and empower them to reach their potential. 

Q: What are some of Pinnacol’s goals for the coming years? 

A: One of the things that we try and do here is understand how our customers are evolving and what we’ve noticed is customers are needing more coverage, have more complex coverage needs, than they have in the past. We also find that customers are finding it more convenient sometimes to bundle other lines of insurance with workers compensation. One of the challenges that we have at Pinnacol is based on our statute. We are only allowed to write business in Colorado and workers comp, so there are some partnerships we can use to go outside of the state, but it isn’t as effective as if we could just write our own business. So that’s one of the things we’ll be working on with the legislature — trying to evolve, trying to get more flexibility to meet customers’ needs, much like our competitors can.

Q: As the pandemic wanes, what are some lessons learned in the insurance industry? 

A: There were certainly some lessons learned as we look back. One of those is that financial strength is really important, because different events come up and you have to be able to weather that storm as a company so you can be there for your policyholders and your customers. We’re proud that we had built a strong financial position, and we were able to prioritize our customers and injured workers without any interruption to the service they expect. The pandemic also accelerated many of the market forces that we were already seeing, such as the digital transformation, dispersed workers, employees’ desire to work from anywhere. And we already talked about some of the challenges with comorbidities, and we are seeing what we believe is an increase in mental health issues as an instance of those.

Q: Recruitment is an issue in the insurance industry. What can the industry do to better attract and retain talent? 

A: We’ve been very innovative with a program that we started in 2017, which is an apprenticeship program that recruits high schoolers to come work a number of days a week with Pinnacol Assurance in jobs all around the company, ranging from underwriting to developers and customer service reps. Out of that program, people go on to get full-time positions with Pinnacol. Then, we’re actually expanding that to university degree programs. At any given time we have at least 5% of our workforce in this program