When Michael Day (pictured) took over as president and chief executive officer of Topa Insurance Group – a boutique insurance holding company based in Calabasas, California - in December 2019, he could not have known of the huge COVID-shaped challenges that lay in wait. He described 2020 as a year full of “unexpected, unusual, significant, transformative events” the likes of which he’d never seen before on such a scale. And yet, in the face of such adversity, Day steered Topa Insurance through the year with success, setting the firm up for further growth, product innovation and technological advancement in 2021.
“First and foremost, I’m very proud of how quickly we reacted to the pandemic,” said Day. “We actually moved to a remote workforce before it was mandated by the California governor. Fortunately, we have a robust enterprise risk management process in place, which includes plans for remote working through catastrophic events like earthquake, wildfire, or, in this case, a pandemic. From a tactical standpoint and a response standpoint, in terms of managing the pandemic and ensuring the safety of our workforce, we were very well positioned.
“As important as ensuring the safety of our people was our ability to maintain our culture throughout this transition, especially as we still don’t know how long the pandemic’s going to last. We’re a relatively small company and it’s important that we all continue to have the same can-do attitude so that everyone comes to work ready to perform, collaborate and provide the best possible service. We do an extraordinary amount of things every month to ensure that we stay connected (over and above regular Zoom meetings) and continue to maintain the family culture that Topa Insurance has.”
When Day took over as president and CEO of Topa Insurance Group, one of the first things he did was sit down with the executive team and re-evaluate the group’s strategy. Together, they determined that Topa Insurance would focus on the commercial insurance market, particularly small and medium-sized enterprise (SME), and would divest much of its personal lines book to Hippo Enterprises Inc, a technology-driven homeowners insurtech.
“The second overarching area of focus for us is making sure we’re efficient and easy to work with for our broker partners and also via our MGA relationships,” Day added. “In the brokerage realm especially, efficiency is paramount, because in a lot of instances, it’s the carrier that can get back most quickly with a quote, or that can work most seamlessly with a broker to place a policy that’s going to get the business.”
At present, Topa Insurance is implementing an Objectives and Key Results (OKR) process, based on three key areas: profitable growth, product innovation and technology. The first objective, Day explained, is to achieve profitable growth via strong underwriting and risk selection. He referred to basic supply and demand in a hardening insurance marketplace, where there isn’t as much capacity available for commercial risks as there has been in the past, thus creating opportunities for Topa Insurance to provide coverage, as long as it’s underpinned by disciplined underwriting.
“We’re also evaluating our risk tolerances,” he told Insurance Business. “We have a very well-capitalized balance sheet. We feel confident in our underwriting, and we’re willing to evaluate opportunities to take on new risks side-by-side with our reinsurance partners. That’s something we’ll be exploring more than we have in the past. For example, we do write on a non-admitted basis […] but we’d like to look for other business that we can write in the E&S market – especially products where we have expertise, like excess general liability, but where we don’t always have the pricing or they don’t always fit into our admitted filings.
“We’re also looking at technology in every aspect of how we do business. If there’s a solution that can cost-effectively improve our efficiency, we’re going to do it. We’re looking at claims analytics and things that help us with subrogation; we’ll be looking at things that help us with front-end evaluation of submissions; and we’ll be looking at technology that helps us with our reinsurance analysis and booking. We’re going to invest heavily in technology across the entire spectrum of our business. We’re also going to focus on more agile development internally, and we’re going to use that methodology to improve our turnaround time on products that we develop or other efforts that we undertake.”