Sharon Donaldson: driving General Accident to new heights
Business Leader: Executive Steward NOMINEE #9
Today the Jamaica Observer publishes the ninth of 12 stories on the nominees for this year's Business Leader Award being held under the theme “Business Leader: Executive Steward”. The nominees are among the top CEOs in Jamaica.
News that Sharon Donaldson had been nominated for the Business Leader Award began filtering down to the staff of General Accident once the Jamaica Observer team showed up at her office for the interview and photo shoot on Tuesday.
The moment was at once electrifying and sobering. There were cheers and spontaneous outbursts of applause for the managing director — a nod to her accomplishments as well as a tacit recognition of the weight of the award for which she was being considered.
During her 16 years of stewardship, Donaldson led the transformation of General Accident from a minion within the general insurance industry to its current position of number two player.
For her entire professional life the chartered accountant has been a demonstrable numbers cruncher. She came to the job with an unerring grip on cash-flow management and actuarial risks, so it is no wonder that this company has enjoyed nine straight years of underwriting profit — a rarity in this business — and posted overall net income of $400 million last year.
“From my perspective, successful management of an insurance company rests on the effective management of cash flows,” declares the London University (LLB) alumnus. “As an accountant it is an essential skill that is well honed,” she continues. “It is the nature of what we do as accountants — numbers tell the real story.”
And who could question this essential truth?
But there is another compelling narrative that quickly took hold on Tuesday at the Half-Way-Tree Road headquarters; one that helped provide a more complete explanation for the success that General Accident has enjoyed under Donaldson's custody.
In her decade-and-a-half at the helm she has succeeded in infusing the 92-member workforce with a strong esprit de corps even while hard-driving it towards some very lofty goals. In short, an important skill set that this leader brought into the workspace is that of an adroit and conscientious people manager.
“We are a service provider of a product that most persons don't want to buy,” she acknowledges, “so we better be good at selling it and competing. Our employees are encouraged to invest time in knowing the business we are in — know what we sell, which is peace of mind.”
It's a stern call to action, but then this firm operates in a highly competitive nine-member marketplace and its managing director did not lift it from the bottom by complacent management.
“My personal mission is to ensure that the staff understands the strategic mission and vision and has a sense of pride working for this company,” she elaborates.
If the recent numbers underlying the company's performance are anything to go by, this urging has not gone unheeded by the team members. This year they are on target to exceed $6.5 billion in gross income; 16 years ago, the insurer was hard-pressed to generate income over $200 million and profit of $15 million.
Yet there is one bit of data on the annual spreadsheet that appears above all to animate the team leader, and this important performance index has been pointing in the right direction.
“We continue to grow our balance sheet strength, moving investment float from $2.7 billion last (financial) year to $3 billion in 2016,” she offers. The upshot has been “double-digit return on our portfolio for seven of the last 10 years”.
General Accident began as a 40/60 partnership between a Scottish insurer and the Musson Group which eventually acquired all the shares and took the enterprise to the Jamaica Stock Exchange in September 2011. Musson retains 80 per cent of the shares. Its chairman, Paul B Scott, also chairs the insurance subsidiary.
The company is a major provider of property insurance coverage, and generates 90 per cent of its business from the brokerage community.
Like most general insurance providers in Jamaica, General Accident has a business model that relies heavily on the global reinsurance market to absorb most of the risks it takes on within the local jurisdiction. A keen eye on this aspect of the business is vital to the ongoing survivability of players in the market.
Her grasp of this important element of the operation paved the way for Donaldson's ascendancy in the organisation.
“Generally the reinsurers drive the programme and profile of an insurance company,” she explains. “And because it is all driven by data and numbers it is easy to make the accountant the reinsurance manager; so I became pretty knowledgeable about our reinsurance programme, our policies, and our products.”
A former high school business teacher, Donaldson made the transition to the private sector the old-school way. She took a job as an accountant at a merchant bank, studied while working, and by the time she joined General Accident in 1989 she was qualified to be its financial controller.
“I had no such ambition,” she answers, when asked whether her focus was on the top job when she joined the company. “I was doing the final year of my professional qualifications and just wanted to be the best financial controller that I could be.”
But a promotion to the position of assistant general manager must have set that ambition in motion. In this pivotal role, she was now handling finance, treasury, reinsurance, and business development — providing her with the requisite experience that would have placed her one heartbeat from the top position.
When that moment came, Donaldson was very well-prepared. Here is how she recalls it: “In 2001, the then general manager of 16 years left to pursue other opportunities. I was promoted by our then chairman who told me that he could not have a better leader of his company. I was very humbled by his faith in me.”
Desmond Blades, the hard-nosed, no-nonsense chairman and one of Jamaica's foremost entrepreneurs, would have had the opportunity to assess this manager over many years.
As it turned out, his judgment on her abilities and his unwavering expression of confidence were not only justified, but nothing short of prescient.
Donaldson immediately set about the hard task of transforming General Accident — tackling a whole range of issues on parallel tracks. Among her priorities was suffusing the organisation with a commitment to timely response to customer claims and the efficient execution of settlements. For years this had been the bane of the local industry — a most vexatious issue among customers.
“I think our approach to the claim settlement process would probably be different if someone else led the company,” she says. “I drive the fact that we promise to pay claims as quickly as we can to return the claimant to the pre-claim position. This is the time our insured need us, and this is the time when they need to feel the value of our promise. I am big on being there in a time of distress.”
Hand-in-hand with this new corporate mantra was the task of relationship building. Business partners — from reinsurers to brokers, to large customers — had an open line and ease of access to the new general manager.
Expanding the scope of the product offerings and even creating niche products for very large customers were also important elements of the urgent growth strategy. As Donaldson puts it, the company went after “every value proposition that is worth pursuing”.
There was also work to be done internally, especially having in place an effective communicating channel so that the urgent sense of mission could quickly work its way down the chain of command.
“There is constant dialogue with the management team and staff,” Donaldson explains. “I have structured schedule meetings, huddles as required, ad-hoc meetings as needed, huddles in small groupings — just as the situation demands. I ensure that I am available to provide support and leadership to all members of the team, particularly on pesky issues. There is consistent reinforcement of our mission and our objectives. I focus on outcomes.”
So the rapturous reaction of the members of staff to Donaldson's nomination for the Business Leader Award would have had its antecedence in the investment this leader made in staff relationship.
“I enjoy a super great and easy relationship with the staff,” she avers. “We are part of the same team, and every member of the team is important.”
The same spirit of camaraderie has also worked its way up into the boardroom.
Scott, the current chairman, is grandson of Blades. He took time out from what must be a blistering work schedule to appear by Donaldson's side for the photographs that accompany the Business Leader nomination story.
“I enjoy an excellent relationship with the members of the board, particularly my chairman,” says Donaldson. “A good relationship with board and staff means that evaluation of performance can be honestly done with no resulting rancour. When you know that people are in your corner, they get to tell you the unvarnished truth which can only make you better.”
It is not surprising that there is a collegiate approach to making big decisions at this organisation.
Early in her tenure, the managing director herself put together a business intelligence unit — a team of actuarial experts — that is tasked with stress-testing proposals with potentially big impact on the company's finances.
“We generated underwriting profits in nine of the last 10 years,” she says. “This we attribute to the expertise and discipline of our underwriting team — knowledge-based and focused.”
Here is how Donaldson describes how these consequential decisions work their way up the organisational chain of command.
“Big decisions are made collectively and involve participation by all portfolio managers. Following which we further sanitise the scenario by stress-testing using ratio analysis — we have a numbers-driven culture, and we employ sensitivity analysis at senior management level. We have a senior management team that takes a second look at the strategic decision and finally — when we are convinced that our position is defensible — we present to board for further interrogation; only then we roll out.”
The managing director believes that a major constraint that faces her company in offering the level of customer convenience — like being able to purchase insurance online — that is commonplace in developed economies, is not having a national database to work with.
“Jamaica is still going through a lot of teething pains,” she argues. “The day will come, though, when you can buy your insurance from the comfort of your living room.”
Still, her company has been using technology to empower customers. For example, they can now go online for quotations for motor vehicle coverage; claimants can view the status of their claims settlement.
“Our database allows us to capture processing time and so we can determine if a deliverable is being met,” she says.
Despite her heavy commitment to General Accident, this executive has found time to utilise her many skills for public good, both within and outside of her industry.
She represents the sector in discussions with the Financial Services Commission‚ its regulatory body — to help shape policy and to ensure that decisions made are in the best interest of members. She chairs the Finance and Accounting Committee of the Jamaica Association of General Insurance Companies, and is the treasurer for the Jamaica Environment Trust. She is a member of the Jamaica Anti-Doping Commission, as well as several school boards.
But one area that appears far-flung from insurance is in fact the very undertaking for which Donaldson was best known, even during her early years with General. An avid netballer, she is a former president of the Jamaica Netball Association, a job she approached with businesslike seriousness. During her presidency she actively promoted the Tri Nation Test Series between Jamaica, a Caribbean team and one of the three top-ranking netball nations.
Donaldson took lessons learned and connections forged in the world of netball back to her workplace.
“One thing I know that is uniquely me,” she asserts, “we are very competitive as I, a sports fanatic, employ many sports personnel, particularly netballers, and yes, we have an unconscious bias towards sports personnel. We feel the discipline and focus necessary to be successful in sport provides an excellent springboard for developing the corporate persona.”
So lessons from one of Jamaica's popular sports are being applied in the corporate world, helping one managing director to fulfil her ambition of building “a company that friends recommend, the company to be your risk management partner”.
— Moses Jackson is the founder of the Business Leader Award programme and chairman of the Award Selection Committee. He may be reached at email@example.com
— Freelance journalist Nazma Muller contributed to this story.