As one of the oldest industries, insurance has evolved significantly since its inception and grown to include new, niche offerings. Throughout Vince Tizzio’s long career in insurance, he has developed a deep understanding of the specialty insurance space and proved he can develop strong organizational cultures. As the president and CEO of AXIS, Tizzio constantly strives to deliver premium growth for small and mid-size specialty businesses, expanding AXIS’s offerings and establishing the company as a top player in this field. In this episode of McKinsey on Insurance, Tizzio speaks to Ari Libarikian, a McKinsey senior partner and the global leader of McKinsey’s Insurance Practice. They discuss Tizzio’s leadership style, his approach to growing AXIS’s digital capabilities, and how he plans to further scale its global platform. An edited version of their conversation follows.
Ari Libarikian: You have been an influential figure in the insurance industry for some time, with previous roles at Hartford, Navigator, Zurich, and AIG. To what do you owe your passion for the insurance industry?
Vince Tizzio: My father, who has now passed, worked for AIG for almost 40 years, and I watched his example every day. When he came home each evening, I would see the excitement he had for the business, the trends, and the things he was working on. I was excited to learn from him, and that inspired me to choose my path in this industry.
Ari Libarikian: How do you think about the evolution of the insurance industry? How has innovation helped the industry be better at its core job of transferring risk?
Vince Tizzio: When approached in different ways, innovation reveals a different answer to a problem. For example, in the context of product innovation, the industry has responded in important ways across auto insurance, environmental insurance, errors and omissions insurance, and cyber insurance. Companies can also use innovation to harness insights to help them be more profitable and consistent in terms of pricing. We’ve made progress, but we have a long way to go.
Ari Libarikian: What about the future of the industry excites you?
Vince Tizzio: Right now, there are multiple fusions going on. We have interested third-party capital providers coming to the industry, looking for returns that are historically better than what we’ve produced. Also, insurance companies generally are adopting the use of data and analytics, AI, and digitization as methods to convey their businesses in a more measured and consistent manner. Stakeholders have become more insistent on receiving returns that are consistent and justify the trust they’re making in their investment thesis.
Last, I believe the interplay of the globalization of risk and customization offers exciting opportunities for insurance companies that serve customers’ needs. Altogether, it’s an exciting time to be in this business.
Ari Libarikian: This is one of the oldest industries, having been around for hundreds of years. AXIS is a relative newcomer to the industry, having been founded in 2001. When you reflect on the company’s history so far, what has been the key differentiator for AXIS, and what will drive differentiation going forward?
Vince Tizzio: We’re using history as a tool to evaluate where we’re going in the future. AXIS has undertaken a transformation journey these past 15 months to reposition its brand and its underwriting craft to provide more tangibly consistent financial results and meet clients’ needs. I’ve looked at our historical growth as an organization and how we were formed in the aftermath of a tragic event in America. The role of providing specialty offerings is exciting. We’re leaning into that in our go-forward strategy. The difference is being felt by our policyholders, intermediaries, and shareholders.
Ari Libarikian: How does AXIS help companies improve their resilience? How does AXIS approach it?
Vince Tizzio: First, our customers have to have the trust and confidence that our company has the resilience and capability to meet them where they are when they notify us with a claim. Second, within our own operating organization, we have to have resilience to adapt to change and hear different points of view on how to solve problems. Ultimately, resilience should take the form of consistent products that are supported by a balance sheet that’s strong enough to meet our financial obligations and innovative enough to bring new product propositions that meet dynamic and emerging exposures to loss.
Ari Libarikian: There’s no real transformation today for clients or for insurance carriers without technology. Many consider tech to be at the center of all transformations nowadays. Can you give us your view on tech-based transformations?
Vince Tizzio: Technology is fundamental to a midcap specialist like AXIS. The products we bring to market are all largely specialized offerings that cover unique exposures to loss. The role that technology can play, not only from the cost dimension but also the conveyance dimension, is incredibly important. For example, we have a transactional business called LMM within the family of AXIS. Our customers expect speed, simplified offerings with applications that respond to questions easily, and consistency in price. Technology facilitates all of that. In more of our complicated businesses, technology enables the fusion of data insights and the analytics that inform our pricing and risk assessment. At the heart of our operating model is the role that technology plays in our company, and that’s dynamic.
Ari Libarikian: On this topic of technology, as a specialty insurance company, how do you think AI will transform the specialty space and the commercial insurance space more broadly?
Vince Tizzio: Our chairman, Marty Becker, has been a major advocate in ensuring our organization has a strategy to capture the benefits offered by AI. We do that in that in three ways. First, we think about how AI can inform our risk selection and the risk insights we need to understand before we price our business for a long-term relationship. Second, we think about how AI can help optimize our cost structure and our ability to be responsive. Third, we look at how AI can help us identify new and emerging exposures to loss that our current product portfolio doesn’t adequately address or consider.
Ari Libarikian: There is a lot of opportunity and change in the world today and in the industry. It all requires strong leadership skills. In your role as CEO, how would you describe your own leadership style?
Vince Tizzio: First, I try to have big emotional intelligence. I’ve seen and have been benefited by many mentors whose leadership model I’ve observed closely, and I’ve tried to integrate their qualities into my own style in a natural way. Second, I try to be action-oriented and performance-oriented. This leadership model is suitable for a specialist insurance company that’s going through a transformation like ours and trying to meet and solve the needs of our insurers and create value for our stakeholders.
Ari Libarikian: You’re a passionate advocate for mental health. You make it a priority through your various roles on boards and through AXIS’s partnership with Project Healthy Minds. How should CEOs leading thousands of employees approach conversations around mental health?
Vince Tizzio: There needs to be stronger advocacy from the public company CEO arena. More than 615 million people are going through some mental health challenge. The productivity loss caused by mental health challenges is estimated to be as much as $1 trillion. It’s imperative that all of us who have the privilege of leading companies find and embrace deeper ways to help our employees bring their most authentic and consistent selves to work. We can do that in a variety of ways: we can listen, learn, share, and deepen our own provision of care to our employees. But ultimately, engaging in a conversation and lessening the destigmatization that surrounds mental health will go a long distance.
Ari Libarikian: Reflecting on your journey as CEO, what advice would you give to other leaders?
Vince Tizzio: First, surround yourself with people you trust and who care about you. Second, have a plan: know where you want to take your company, why you want to take it in that direction, and what results will reasonably form in doing so. Third, be a good listener. Listen to your customers, stakeholders, and employees, and be responsive. Last, show up as consistent as possible to meet the challenges that you are inevitably going to face every day.
