Words of wisdom: Pinnacol Assurance CEO Phil Kalin

From health care to shooting hoops with The Dead, discover how Kalin’s vast & varied experiences informed his approach to leading an insurance company.

“Back in the day, the businesses oftentimes determined what we thought the customer needed. Henry Ford once said: ‘You can have any color car you want, as long as it’s black.’ That thinking has flipped on its head. Any business which isn’t obsessed with understanding the customer needs and wants will eventually be obsolete,” says Phil Kalin, of Pinnacol Assurance. (Credit: Pinnacol Assurance)

From health care to private schools and technology startups, Phil Kalin had a winding career path that led to his current position as CEO of workers’ comp-focused Pinnacol Assurance, a company he will retire from in March 2022.

“One aspect of my character is that I’m always curious about learning new things. I’ve had a very nonlinear career path,” Kalin says. “I’ve gone from running hospital systems to two different technology startups to even running a private school for a few years. I’ve also done some real estate development. All involved a mission, significant personal growth and challenging, complex business challenges. And when I’ve had success, it then allows me to go off and do things that allow me to give back — like running a school or doing nonprofit work.”

An enthusiastic traveler, Kalin and his family have voyaged extensively through Africa, the Middle East and Europe. More sojourns are in the works, with Hawaii being the first destination following the end of his professional life, he tells PropertyCasualty360.com. Kalin is also hoping to make it to South Africa soon after having to delay a previously planned trip due to the pandemic.

Although his varied professional background might surprise some who know him as Pinnacol’s CEO, Kalin says the thing most people would be surprised to learn about would be the pick-up basketball game he played with Jerry Garcia and the rest of the Grateful Dead in the early 1970s.

“They were doing sound checks for a concert while we were playing in the University of Iowa field house. Suddenly Jerry and the band jumped off the stage and started playing with us,” Kalin says, adding with a laugh: “Jerry was only about 5’8. It’s a good thing he was such a good guitar player!”

PC360: While guarding Jerry Garcia on the court might not have been a difficult task, what were some of the challenges you have faced and how did you overcome them?

Kalin: When I first came into Pinnacol, I think it would be fair to say that we were experiencing a reputational crisis with the business community and other stakeholders. And, our financial position was mediocre at best.

Coming in, I had to quickly figure out the changes we had to make in terms of how we run our business. I helped focus the company on two key strategies: lowering the cost to the customer and exceeding customer expectations.

On the business side, we improved through lean performance improvement and lowering operational costs such that Pinnacol has been named in Ward’s Top 50 best-performing P&C carriers for four years running. This also allowed us to grow our surplus from around $600 million up to $1.6 billion, which gives us some much-needed flexibility.

On the customer side, we brought a laser-like focus to understanding and measuring how well we met customer expectations. This in turn has led to best in class performance in the industry for customer and injured worker satisfaction.

PC360: Where did you see the biggest changes during your career?

Kalin: Two things come to mind. First, one of the biggest changes has been in IT and the digitization of nearly every aspect of our business and personal lives. Remember, when I first started working, neither the fax machine nor email had been invented! Everything about business moved dramatically slower, often at the pace of the mail.

The other major change has been in how business now focuses on what the customer wants and how they want it. Back in the day, the businesses oftentimes determined what we thought the customer needed. Henry Ford once said, “you can have any color car you want, as long as it’s black.” That thinking has flipped on its head. Any business which isn’t obsessed with understanding the customer needs and wants will eventually be obsolete.

One of the other changes that has been too long in coming is the work we are doing with diversity, equity and inclusion (DEI). Business leaders including I have too often paid lip service to DEI without seeing real change. Over my career, I’ve watched the roles for women in the workforce evolve as a result of their fight for equity. And now, I have a glimmer of hope that businesses and society have reached a tipping point that will lead to real change, particularly for those who are often on the outside looking in. This is an area for which every leader should be measured as to making real progress on all aspects of diversity, equity and inclusion. It’s time!

PC360: What do you think are some of the biggest misconceptions about the insurance industry?

Kalin: People do not understand the basic business principles of insurance, which are essentially the understanding and transfer of risk. One oftentimes hears negative stories about egregious insurance behaviors – claims that were not approved or unseemly practices. But what has impressed me most about this industry is that our people absolutely committed to doing the right things to support their stakeholders and customers while managing all of the complexities of insurance behind the scenes. Most people do not appreciate everything that goes into risk management.

Insurance companies have an important role in helping their policyholders manage risks whether that’s keeping people safe at work for in our worker’s compensation line, or keeping people safe in their autos, avoiding property damage, etc. If we fulfill the commitment, to doing the right things for policyholders it will in turn be good for the company.

  1. What surprised you the most while working in the industry?

The importance of collaboration with our agent partners, the complexity of insurance, and the opportunity for big leaps and improvement, both in technology and service.

PC360: Working in the industry can seem all-consuming at times. What do you enjoy doing outside of work?

Kalin: Besides my wife, Lynnie and our two kids, I’ve got four grandsons with whom I like to spend a lot of time. I’m also a big road and mountain biker; I love to travel and go on adventures. I have worked very hard to try to find balance in my life and try to emulate my mentor, Stan Nelson, who focused on doing the right work rather than the most. I haven’t always been successful in doing that, but certainly, my intention was to, not has always been to work smarter rather than harder.

PC360: What’s ahead for you in this next chapter?

Kalin: After nearly 50 years of running businesses, I want to dial things back and ensure that I leave time for enjoying whatever comes next. We’ve got some travel already lined up. I will continue to be very active in some board work, particularly in non-profits. I’ll also be looking for some opportunities to do some consulting and CEO mentoring as I go forward.

This interview was edited for length and clarity.

Related: