The unabridged version of this interview originally appeared in the Fall/Winter 2017 Edition of IASA’s Interpreter. It is the 42nd in a series of interviews conducted for the publication by Nolan’s Managing Director, Steve Discher.

STEVE DISCHER: Thank you Lisa for sharing some of the AF Group story with our readers. Could you start by telling us a little bit about AF Group?

LISA CORLESS: AF Group started over 100 years ago as Accident Fund when we were the Michigan workers’ comp state insurance fund. About 20 years ago, Blue Cross Blue Shield of Michigan (BCBSM) and its Board had the foresight to recognize there were a lot of opportunities with Accident Fund. They purchased us, and we privatized into a for-profit company and a direct subsidiary of BCBSM. I really give a lot of credit to their vision as they saw the need to diversify their business, and that permeated through our entire organization. Later at the direction of then President and CEO Liz Haar, we began developing business outside of Michigan where we could diversify and offer our services to customers elsewhere. It was Liz’s clear vision and the tremendous support of our Board that led to a significant period of growth and sustained success for our company. We started out small but are now licensed in all 50 states. 

The work, of course, did not stop there. AF Group is now the holding company that includes multiple brands of workers’ comp insurance. We have Accident Fund Insurance Company of America; United Heartland — based in New Berlin, Wisconsin; CompWest operates in California and the West; and Third Coast Underwriters focuses on the Midwest and more recently the southern U.S. We define our business model into two types of workers’ comp insurers. We have data-driven brands — Accident Fund and CompWest, and we have niche brands including Third Coast Underwriters and United Heartland. 

Finally, we just launched AF Specialty this year. It is something that we have been thinking about since 2015, and it allows us to offer solutions in the fronting and captive space. It has been received very well from our customers and our agent partners.

STEVE DISCHER: Can you talk about some of the changes you have seen in the industry?

LISA CORLESS: Back when I started, it was literally typewriters, carbon paper, copiers and fax machines. Many of the changes I’ve seen recently have been focused on technology, and there has been a lot of excitement around new startups in the insurance space. I think it is really good for our industry — it keeps us on our toes.

I also have seen more of a focus on workforce diversity, and that is something I am really passionate about. Our customer base is changing, and their needs are changing. With that, our workforce must change so we can serve our customers better. And I’m not just talking about visible diversity, but diversity of thought as well.

STEVE DISCHER: What about data and analytics? Can you comment on how this is taking hold and propelling our industry?

LISA CORLESS: The rise of data and analytics in insurance is tied directly to changing technology. The ability to embed predictive analytics in systems and work flows and to store and analyze increasingly large sets of data has been made possible through technological advances. Within the industry I see companies embracing data and analytics to drive business insights, create operating efficiencies, and support strategic plans. This is an exciting area of insurance to be in right now and an area that tends to attract younger workers to the industry.

STEVE DISCHER: Every company has its secret sauce in terms of attracting and developing people and developing that diverse workforce. Can you talk about what you do here? 

LISA CORLESS: I believe our secret sauce is our amazing culture, and I felt it when I walked into the building for my interview back in 2013. You  can  sense the warmth and creativity here. Which points to the most important element of our ‘sauce’ — our people. We have such talented individuals who genuinely care about each other and about our customers, and who partner well with our agency force. We listen, which is something that attracts people. It is not just about the bottom line; it is also about doing something bigger — helping employers, partnering with agents and helping injured workers. You can feel this commitment across our organization. In addition, we have internship programs, college partnerships and diversity and inclusion committees who are always looking for ways to educate our workforce and show that we are not just talking but are actively engaging and soliciting diverse perspectives.

We are focused on bringing in top talent. We have coined a phrase, "work anywhere, anytime." We are looking to not only provide that to our customers but also to our workforce. We really try to look at what it is that the talent of tomorrow really yearns for. Sometimes it's looking at how the work gets done and then challenging the status quo. 

STEVE DISCHER: What are some of the key principles you would use to describe your culture and what it is like to work here?

LISA CORLESS: We have a set of core values and cultural beliefs, and there are several that speak to me. Integrity is first and foremost. We want to make sure that we are doing the right thing for our agent partners, for our policyholders, for our injured workers and for each other. Integrity is paramount, and it is the foundation on which all of our values are built — our cultural beliefs. 

Another cultural belief is “speak up.” We have created a culture in which we encourage the sharing of ideas. And while sometimes this can be painful and challenging, we really want to know what people think. We recognize our front line is closer to the customer than our leaders. We also know our agent partners have tremendous perspective. So we put a great deal of credence on listening and soliciting feedback from everyone— employees, agents, policyholders and injured workers. If we are not listening carefully and we are not asking people to tell us what is on their minds, we will never improve.

Finally, our cultural belief of “breaking boundaries” really differentiates us in the market, particularly as it relates to our unique focus on new ideas. We established a strategic effort several years ago to create a culture of innovation. It is one thing to talk about it, but it is another thing to really put it into action. And we recognize that innovative ideas do not just come from our innovation department. They come from across our organization and customer base. We believe in valuing a unique idea and not shutting it down just because it’s different from how we have done business in the past.

One example is a new idea collection tool we created called the “Idea Pipeline”—a product that has generated so much interest that we have commercialized it, and we even have customers who have requested it. It’s a simple concept: When people give you an idea, they want to know that you are listening; they want to know that you heard it. Most believe that you drop a suggestion in the box and nothing ever happens. Our tool makes sure that there are prompts so that we acknowledge and let people know, ‘Hey, we got the idea.’ And then others can endorse the idea. It is our own crowd- sourcing way to do business.

STEVE DISCHER: Would you talk about the technology innovations that you think are going to change and drive our industry? 

LISA CORLESS: Yes, autonomous vehicles immediately come to mind. For workers’ comp there will be some impact, but I think in the industry as a whole the question is: How do we regulate it? Our local insurance commissioner is the head of innovation for the National Association of Insurance Commissioners and has shared what they are looking at for the broader industry—and it’s pretty exciting.

One area that I am passionate about is sensor technology. Not just a wearable that is counting your steps, but a wearable that is telling you whether there is potential for heat exhaustion on a construction worksite. Sensor technology that can look at movements and say,  ‘How did you lift this? Did you lift this properly?’ — and give the policyholder, the injured worker or the carrier real-time feedback. This could effectively help individuals from getting hurt. Or it could let someone know that they are not tied off safely when working on a roof. I think there is great potential in sensors and wearables that we have not even scratched the surface on, and how this gets incorporated into a business operation or model will be interesting to watch and participate in.

In early 2012, we started reformulating how we wanted to continue to serve our customers in the future and challenging what we offer today versus what we need to offer down the road. So we began an IT transformation in 2014 where we took a hard look at ourselves and said, ‘Where are we going to be able to serve the future and where are we not?’ That morphed into a full-on digital transformation. You hear that phrase used frequently these days — but ours really is. We took the approach that in order to sustain, grow, and expand the way that we want to — the way that we need to, to make sure that we are delivering what our customers need — we need to transform every area of our entire digital infrastructure. With that, we said it’s not enough to simply change the technology; we need to change minds and thoughts as well.

We undertook an effort where we looked at our current operating model, examined our target operating model, brought in people from across the entire organization—and all our different brands in all the different locations — to talk about what we are today and what we need to become in the future. We did that for every area. We looked at the processes we have in place. We came up with an enterprise way, even though we have very distinct brands with very distinct appetites and personalities and cultures that fit together. We did not want to take away from what these brands offered, instead we wanted to continue to strengthen them. So our digital transformation is more than just a technology transformation. It is a new operating model. It is a process change, and we are anticipating some terrific efficiencies. We expect to be able to serve our customers like never before.

Earlier I mentioned ‘work anywhere, anytime.’ We recognize that our customers are going to have different needs for accessing and using their data, and also that the protection of that data is paramount as well. So that is part of this digital transformation, and it is a five- year effort. And it will continue through 2020 and will completely change how we do business.

We have already had one successful release, and the next is planned for launch in a couple weeks. And I am so proud of our team’s efforts. Our vendor partner told us they have never seen such an effective rollout, and it is because we are taking this deliberate approach. We have involved everyone, and they said that our organizational change  management has been like nothing they have ever seen. Again, it is about listening — listening and ensuring people have a voice and are heard and our future is defined not by just a few, but by the entire team that is making the business happen every day.

STEVE DISCHER: Changing gears, can you address the value you see and the partnership with your agency force?

LISA CORLESS: Our agency force is really an extension of us — they are part of the family. We are blessed to have terrific agents who are stellar people. I have been in this industry for 30-plus years, and our connections here represent the tightest relationships I have ever seen. Part of that is because we listen to them. We trust them; they trust us. They bring us their best business and ask us to take care of their policyholders, their workers and to keep their workplaces safe. Our commitment is to listen and deliver exceptional results.

The value they offer to the customer is significant; they really have deep domain expertise in a multitude of areas, and they can counsel their policyholders about the right decision. Any agent can say, ‘Here are four options, go with the lowest price.’ But our agents really look at things beyond that. They are thinking about their customers in ways that add value. Business owners are busy. They don’t always have time to think about their insurance needs. As I say, agents are an extension of us and they are also an extension of their policyholders.

STEVE DISCHER: What do you think about technology and channel disruption?

LISA CORLESS: We see a number of examples of where companies are trying to disrupt the distribution channels. But the bottom line is, when something happens, especially for a small- to mid-sized business owner, they need an agent to guide them through the process and to help them understand what they should expect and how they should handle things. I do not see that model going away entirely.

STEVE DISCHER: AF Group has been in Lansing for a long time. Would you talk about AF Group's local community involvement?

LISA CORLESS: Our teammates have a true spirit of generosity and are committed to giving back to the communities in which they live and work. We are very involved in the Lansing area, but we are also active in areas where we have larger locations. For instance, in all of our locations, we are working with the American Red Cross to solicit donations for the recent hurricane disasters. We have local charities in the Lansing area that we work with consistently, and each of our brands have charitable partners as well. We just completed our annual employee giving campaign, which is a week devoted entirely to giving. We had some really fun events and brought in a number of local charities to meet with our teammates—and it was one of the most successful giving campaigns in our history.

We also encourage our employees to give back; not just on a monetary basis, but with their time and their talents. We provide employees with eight hours to volunteer to organizations and charities in their respective communities. And it does not have to be an organization that we endorse. It can be whomever they want, as long as they are giving back to the community that they live in.

I have the honor of serving on the Board of the mid-Michigan chapter of the American Red Cross and the Sparrow Foundation Board at Sparrow Hospital in Lansing—an organization dedicated to providing quality, compassionate health care and shares our commitment to serving the community. Our CIO is the chair of the Capital Area IT Council, and one of the charges for that group is to attract talent to the area; not just local talent, but talent that lived here at one point and might want to come back. They held an event for young professionals in November of last year, and it was awesome for those who had come home for Thanksgiving. It was well attended, and we got to talk to some really talented young people. We connected a few of them with some of our departments, and we even made a hire from that event.

Another organization we are very involved with is the Lansing Promise, which is an organization that ensures that young people who might not have the money or resources to go to college have access to scholarships. We have been active with this organization since its inception, and former NBA star Magic Johnson is very involved because he is a product of the Lansing schools. 

We even take it one step further. We have a very effective intern development program in which we work with colleges and local high schools. Sometimes when you say ‘insurance,’ people automatically assume ‘sales.’ But there are so many different career opportunities in our industry, depending upon your skill set and what you like. If you are a data person or a numbers person, there are opportunities in finance, actuarial and data science. If you are an extrovert and you want to sell, you can explore business development. If you are someone who is extremely curious, you can be on the investigative side of the house. If you are someone who has a heart for service, you can be in our service center or claims. Or if you are a medical professional, we have many opportunities for nurses. So it is really an exciting industry with a wide variety of career options, and we enjoy promoting these opportunities to attract the best and brightest to our business and communities.

STEVE DISCHER: How is regulation impacting or not impacting AF Group? 

LISA CORLESS: We see regulatory impacts on a number different levels and have a great government affairs team who actively monitors this changing landscape. Our team works very closely with regulators across the U.S. and also engages with industry trade associations to share perspectives. We understand that our industry is going to be highly regulated, with constantly evolving regulatory policies across the nation. It’s part of the business that we have chosen. Our job is to stay abreast of this environment because, as you know, there are certain states that are much more active today. But tomorrow it could be another set of states. We try to influence industry political risks and opportunities where we can, but at the end of the day, when public policy is enacted, it is our responsibility to carry it out and take care of our customers while we are doing that.

STEVE DISCHER: Looking to the future, can you talk about what you see as being important or critical aspects of maintaining or being resilient as we reach that next unknown?

LISA CORLESS: I’ve talked about the people, I’ve talked about the partners and I’ve talked about listening. We are focused on sticking to what we’re good at—and making sure we’re doing it far superior to others and offering partnerships that others do not. By focusing on serving our customers and finding out what they need, we are going to continue to grow. By keeping our talented teammates engaged and taking care of injured workers, we will be successful. Each of these elements is critically important and because we do it well, it makes us unique.

Also, we are looking at diversifying the products and services that we offer now.  I previously mentioned the launch of AF Specialty, a new brand in the fronting and captive space. This really came about from listening to our customers who said, ‘Hey, we need some captive solutions. We need fronting partners.’ By looking closely at new products and services, we can offer not only a diversified book of business, but give options to current customers, and customers that we might have in the future.

As we were looking at areas to diversify, one of our key strategies was to “protect the core” — to make sure that our core business is not affected by other initiatives. This resonates with our team. It means constantly looking at how we protect it while encouraging our team to focus on what we do well and then asking, ‘How can we provide services that are even better than we are offering today? How can we be of more value to those we serve?’ We have a whole team of people looking to strengthen what we do. That is exciting. They come up with some pretty great ideas, and I feel fortunate to work with such a talented and committed team.

STEVE DISCHER: Lisa, congratulations on all the success AF Group is achieving, and thank you for sharing your thoughts with IASA readers.

PUBLISHER’S NOTE:  This article was originally published in the Fall/Winter 2017 issue of IASA’s Interpreter. All rights reserved. Copyright IASA ©2017