State Fund CEO Tom Rowe: Embrace Change and Don't Look Back

By Nicole Zaro Stahl, Hacienda Network Staff Writer

If you ever go hiking with Tom Rowe, you had better be in good shape. His favorite trail is full of twists and turns and steep elevation changes. Such a vigorous workout is a good way for the recently appointed President, CEO, and member of the Executive Committee of State Compensation Insurance Fund to shift gears after a busy work week, often spent traveling across the state.

Rowe officially took the helm of State Fund, California's largest provider of workers compensation insurance, on August 2, 2010. Established by the state legislature in 1914, the self-supporting, nonprofit State Fund operates "with no financial obligation from the public," Rowe points out. He is keenly sensitive both to the historical and economic impact of the organization. With approximately 160,000 policyholders, more than $1.2 billion in premium, and nearly $20 billion in assets, the nonprofit public enterprise provides workers compensation insurance at cost and is seen as a stabilizing force in California's economy, ensuring that all employers have a strong and dependable option for their workers compensation needs.

"We are here to be an open and stable market for all California employers," Rowe emphasizes. "Our first goal is to reduce the frequency and severity in workplace injuries. We have a huge investment in that. When injuries do occur our goal is to provide benefits and help the injured worker return to the workplace as quickly as possible."

This orientation to serve is reminiscent of the original motivation that attracted Rowe to the business from the beginning. "I fell in love with the Property and Casualty insurance industry right away, not only because it is substantive and very complex work, but also because of the value it provides to the economy at large," he comments. "I respect and take pride in what it does. It's been the work of my life for my entire professional career, which spans more than 30 years."

Building a Career

A native of Baltimore, Rowe attended nearby Towson State College (now Towson University, the second largest school in the University of Maryland system), earning his undergraduate degree in business administration in the early 1970s. His first insurance job was with the Hartford Insurance Company as an underwriting trainee. Insurance captured his interest and his passion, and after becoming a Chartered Property and Casualty (P&C) Underwriter, he decided to make it his life's work.

His next big step was a move to Fireman's Fund Insurance Company, where he was to stay for almost 25 years, occupying a succession of progressively responsible positions. In 1986 he was named Senior Vice President of National Accounts, leading large account underwriting, marketing, and services for the company. Over the next six years, he redefined his organization's business strategy, ultimately transforming it into the company's most profitable segment.

In 1992 Rowe became President of Fireman's Commercial Insurance Division. It was at this point that the Marylander switched coasts. He, his wife, and four children - three sons and a daughter - moved to Marin County to be near Fireman's Novato headquarters. While his physical surroundings changed considerably, he was very comfortable in his new role, where he was responsible for underwriting, marketing, and policyholder services for all standard commercial lines of insurance. Again he turned in a stellar performance, leading his division to account for two-thirds of the company's premium revenue. His responsibilities expanded as he was appointed to the Board of Directors of Fireman's Fund Insurance Companies, and later, the board of Allianz Insurance Company, following its purchase of Fireman's.

The Lure of Technology

Despite these deep ties, in 2002 the pull of an opportunity to delve further into new industry technology became irresistible, and Rowe left Fireman's Fund for the top spot at Trilogy Insurance Services. This unit of Trilogy Inc. was formed expressly to "design, develop, and deploy innovative technology and business services for the Property and Casualty insurance industry." There he oversaw the launch of the P&C business practice, including the redesign of marketing services for rules-based business segments, enabling carriers and agencies to improve the way they work together, "efficiently capturing and keeping the right business at the best price, well ahead of the competition."

With his original mission at Trilogy complete, Rowe moved on to another industry powerhouse, becoming Area President at Arthur J. Gallagher and Company in July 2007. The multifaceted international enterprise, encompassing brokers, consultants and third-party administrators, had been heavily involved in a series of technology initiatives earlier in the decade and, in 2008, reported a record 37 acquisitions. The company was also named to the Fortune 1000 that year. Rowe himself occupied a key role, leading a strategic initiative to redesign the business process for middle market/small commercial clients, integrating customer-centric value analysis, establishing data transfer protocols, and refining the focus on relationships with targeted markets.

After a year and half, Rowe decided to strike off on his own, establishing T. Rowe Strategies, a consulting practice focused exclusively on the Property and Casualty Insurance industry. He describes his specialty as "distribution initiatives for rules/model-based segments of the P&C industry," built on his 30-plus years of experience in the field.

Still, he acknowledges it takes a lot more than mere experience to get the kind of results that ensure business success. The ability to embrace change and forge ahead decisively is vital. Asked about his most important leadership lesson, he replies: "You never move fast enough. Whenever you look back in retrospect, whatever issue you are confronting you always wish you moved faster than you did. The pace of change ends up being governed by people's fear of change. Once you know you are right-get on with it!"

Downtime

When Rowe joined State Fund, the top spot had been open for several months. He tackled the job with gusto. "Staff here has definitely noted that I am an early riser," he reports. "I like to beat the Bay Area traffic and I usually get in by 6:30 am."

His busy work schedule and frequent travel prompt him to make the most of his downtime over the weekend. He finds inspiration and relaxation in reading. "I am working my way through some Pulitzer Prize-winning fiction from the 1930's to the present," he notes.

He also makes time to get outdoors for a chance to stretch his legs. "I like downhill skiing, and from time to time I play some golf. My three sons also golf; I like that foursome," he says.

However, it is the allure of trekking through the Marin hills that beckons most often. "I live just outside of Novato, and literally outside my front door is a seven-mile round-trip hike. The trail changes elevation pretty quickly-it goes up 1,000 feet in those seven miles."

He takes advantage of the strenuous climb for both conditioning and pleasure. "I actually use it for exercise, and the fact that it takes place in spectacularly beautiful surroundings is pretty cool." A true multi-tasker, he has discovered another way to use that time productively. "While I prefer the old-fashioned way of reading, I also like audio books, especially on a particularly tough hike." It obviously does not slow him down.

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