Cover Story

Evan Greenberg

A Risk & Insurance® exclusive interview, with insights from Peter Zaffino, John Keogh, Greg Case and Hank Greenberg.
By: | May 1, 2014 • 10 min read

Evan Greenberg oversees a company with $95 billion in assets, operating in 54 countries.

So one might think the president, CEO and chairman of ACE Limited would be stretched to capacity leading global strategy and directing execution.

Despite the vast reach of ACE, however, Greenberg’s appetite for detail is so keen that he could show up just about anywhere.

Peter Zaffino, the president and CEO of Marsh, said he has walked into a room anticipating a meeting with ACE practice leaders or regional managers and found Greenberg at the table.

It doesn’t matter the topic, the audience or the geography. If he can, those who know and observe him say that Greenberg will dive into the layers and seek to understand the topic as well as anyone in the room.

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“He is tireless in his pursuit and it is quite impressive,” said Zaffino.

“His mind is never at rest and it is almost always thinking about our company and our industry,” said John Keogh, ACE’s chief operating officer and vice chairman.

“There is an unbelievable capacity I have noticed in him to seek more information, whether it is company information or more information about the world.”

This May marks 10 years since Evan Greenberg became the president and CEO of ACE. He added the title of chairman in 2007.

In March, Risk & Insurance® sat down with Greenberg in an exclusive interview to discuss his career and personal interests.

Disciplined Underwriting

One might never encounter anyone quite like Evan Greenberg. His intensity, drive and intelligence are immediately apparent.

In conversation, Greenberg displays depth and range and is as animated in discussing his views on leadership and international politics as he is talking about what he treasures in his personal life.

A primary focus of Greenberg’s is the art and science of underwriting.

John Keogh, COO of ACE Limited

John Keogh, COO of ACE Limited

“This is a company of underwriters,” Greenberg said when asked about some of the keys to ACE’s success.

“We are managed by underwriters. All of senior leadership has a very strong underwriting background. We don’t take that lightly.”

ACE’s results support that statement.

From 2009 through 2013, the company recorded an average combined ratio of 91.4. In 2013, a record year for the company, ACE recorded a combined ratio of 88 and $3.8 billion in net income.

Those are superior results. You get them through vigilance, Greenberg will tell you.

“You know that you have to be standing on this business with two feet at all times,” Greenberg said.

“ACE prides itself on being a superb underwriting company, able to attract very smart and passionate underwriting talent,” said Greg Case, the president and CEO of global brokerage Aon plc.

“They are good at deploying their talent around a client where solutions are needed for risks that are difficult to transfer through conventional underwriting,” he added.

“A true leader is someone who recognizes the need for top talent and Evan has surrounded himself with an exceptional leadership team that is completely aligned.” — Greg Case, president and CEO of Aon plc.

Greenberg admits that his expectations are high and that he can sometimes be difficult.

“When I know it’s the right thing, I won’t compromise, even though it may be painful,” Greenberg said, in talking about what he demands of himself and the people that work for him.

“Evan can be demanding but it is always demanding from the point of view of being informed,” John Keogh said.

“He’s somebody you respect because usually what he wants out of you is no more than what he expects out of himself.”

ACE grew significantly in the past five years. It increased net premiums by nearly 30 percent and doubled its market value.

As the company grows, Keogh said its leaders keep a sharp eye out for the impediments of bureaucracy.

The company recently catalogued the number of committees it has to make sure they serve a purpose. Instead of bureaucracy, the focus at ACE is on individual accountability.

“We want to be a meritocracy,” Keogh said.

“We want to reward people and promote them based on what they have done, not based on the politics of who they know or who dislikes them,” he said.

Greenberg said he is loyal to those who prove themselves.

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Keogh said the loyalty Greenberg engenders can be seen in how few upper level executives leave ACE.

“I have been here eight years and there has been very little turnover in the most senior ranks of the company,” Keogh said.

“Not only has he recruited top talent, he has also developed and advanced existing talent,” Marsh’s Zaffino said.

“A true leader is someone who recognizes the need for top talent and Evan has surrounded himself with an exceptional leadership team that is completely aligned,” said Aon’s Greg Case.

“Quite frankly, ACE moves as fast as any company that I interact with,” Zaffino said.

“And this has really been driven by Evan’s leadership. He carefully thinks through the strategy, decides to execute and then moves very quickly,” he said.

John Keogh said Greenberg pushes to get the details he needs to make decisions.

“He is definitely very involved in that company, he is not just some big picture guy,” said Cliff Gallant, an insurance analyst with Nomura Securities.

“Having a highly respected management team beneath him depends on having a guy who can press them and push them. That comes from many years of experience. Certainly his pedigree is unique. There is no one who has quite got his resume,” Gallant said.

As the result of an environment where frankness is encouraged and the need for bureaucracy challenged, ACE is earning a reputation as a company that makes careers.

“If you are a senior manager at ACE, you are asked to do a lot and you are asked to know a lot,” said Gallant.

“All of the executives that I hear about coming out of ACE, are highly respected industry-wide.”

Natural Leader

Evan Greenberg started his insurance career at AIG working for his father, Hank Greenberg, but nothing was handed to him there, his father recalls.

Hank Greenberg, the chairman and CEO of the Starr Cos.

Hank Greenberg, the chairman and CEO of the Starr Cos.

“I ran the company in such a way that I treated everybody the same,” Hank Greenberg said.

“Nobody got special privileges and that’s what made AIG what it was at the time,” he said.

Hank Greenberg said Evan Greenberg took full advantage of his background and went on to distinguish himself through his own hard work.

“He has done a great job,” Hank Greenberg said.

“In many companies, the higher the individual goes, the less they are involved in the business and that has never been true in the Greenberg family.” — Hank Greenberg, chairman and CEO of the Starr Cos.

“I’m very proud of what he has achieved. He certainly has demonstrated that he has the skills, the insight and the maturity to lead a big company.”

Not many insurance leaders earn the same degree of praise from Hank Greenberg.

“In many companies, the higher the individual goes, the less they are involved in the business and that has never been true in the Greenberg family,” Hank Greenberg said.

Evan Greenberg is also an industry leader, sources said, someone who is willing to address global regulatory and economic issues.

For example, he returns time and again to the topic of global financial services regulation and the shortcomings of Solvency II, the European-based financial regulation regime which he views as unnecessarily costly and bureaucratic.

Greenberg is vocal on the importance of the renewal of TRIA, and on the need for a strong U.S. foreign policy.

Few insurance leaders are making public statements like that these days, said Paul Newsome, an analyst with Sandler O’Neill.

“The industry over the last several years lost a number of leaders who would come out and make political comments that would have impacts for the industry,” he said.

“I wouldn’t say it’s completely unique, but he is definitely one of a relatively small number of individuals running big companies who will publicly take positions,” Newsome said.

“He is very comfortable taking his positions on key issues to public forums in an effort to encourage an industry-wide focus, and I have always found him to be willing to listen to opposing points of view,” said Aon’s Case.

Case said that is true not only for regulatory topics but in the area of innovation.

“Evan is right about the need for continued innovation — it is what clients expect from our industry,” Case said.

A Unique Path

After high school, Greenberg eschewed the beaten path and took to the road.

“I spent three and a half years living in a lot of different places and doing a lot of different jobs,” Greenberg said.

“And I learned a few things. I learned it’s not so bad to have nothing,” he said.

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He also learned that anyone who takes their job seriously can find themselves in the work.

“It’s something that someone has the discipline to find, or not,” he said.

After getting his start at AIG, Evan Greenberg rose through the ranks, eventually becoming president and COO from 1997 through 2000 before leaving to join ACE in 2001.

Hank Greenberg says going over to ACE was a good move for Evan.

“Evan decided at one point that he wanted to strike out on his own and I don’t blame him for that,” Hank Greenberg said.

“I think it was the right thing to do. He did it and he has done very well at it,” Hank Greenberg said.

R5-14p26-28_Greenberg.inddA big reason Evan Greenberg does so well in insurance is because he loves the business, numerous sources said.

“As the magnitude, complexity and speed of risk continue to grow, the leadership roles in our industry become even more challenging,” said Greg Case.

“But whenever Evan and I meet or talk on the phone, you can tell he is really enjoying what he is doing,” Case said.

ACE’s John Keogh said that’s also evidenced by the speed at which Evan Greenberg works and how much he packs into a day.

“You have to love what you are doing to be that committed, day in and day out, the way I observe him,” Keogh said.

“You know I think there is no substitute for hard work,” Greenberg said.

“There is no substitute for truly knowing your craft and loving it. To really know it, you have to love it.”

If you don’t have a genuine passion for what you are doing, he said, those who report to you can tell.

In Private

Evan Greenberg is as multi-faceted as the company he runs. He expresses a love of nature and activities that require quick and precise action.

He is an avid skier and horseback rider.

“I am a curious cat and my natural state is not at rest,” he said.

“I love nature and animals. When I am not working in an urban environment you will find me in nature,” he said.

And he’s a blues rock fan.

“I think Gary Clark Jr. is the best guitarist on the planet today,” he said.

Greenberg places a great emphasis on family. In his New York office, family photographs line the book shelves.

“I don’t have the need for lots of friends,” Greenberg said.

“But I have a real need for my wife and children. I love my family and I love spending time with them,” he said.

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John Keogh said that Greenberg picks his spots when it comes to charity work and other activities outside the workplace.

“He will not do something unless he can give it his full energy and attention,” Keogh said.

Despite the high position he holds in business, Greenberg sees himself as “just a guy,” someone who can relate to anybody.

“I believe most people want to live their life with a sense of dignity and a sense of pride,” he said.

“And what you do, not what you may think you do, is the key to life.”

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The End of Summer

A failure to purchase product contamination insurance results in a crushing blow.
By: | October 15, 2018 • 9 min read
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: THE HEAT IS ON

Reilly Sheehan, the Bethlehem, Pa., plant manager for Shamrock Foods, looks up in annoyance when he hears a tap on his office window.

Reilly has nothing against him, but seeing the face of his assistant plant operator Peter Soto right then is just a case of bad timing.

Sheehan, whose company manufactures ice cream treats for convenience stores and ice cream trucks, just got through digesting an email from his CFO, pushing for more cost cutting, when Soto knocked.

Sheehan gestures impatiently, and Soto steps in with a degree of caution.

“What?” Sheehan says.

“I’m not sure how much of an issue this will be, but I just got some safety reports back and we got a positive swipe for Listeria in one of the Market Streetside refrigeration units.”

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Sheehan gestures again, and Soto shuts the office door.

“How much of a positive?” Sheehan says more quietly.

Soto shrugs.

“I mean it’s not a big hit and that’s the only place we saw it, so, hard to know what to make of it.”

Sheehan looks out to the production floor, more as a way to focus his thoughts than for any other reason.

Sheehan is jammed. It’s April, the time of year when Shamrock begins to ramp up production for the summer season. Shamrock, which operates three plants in the Middle Atlantic, is holding its own at around $240 million in annual sales.

But the pressure is building on Sheehan. In previous cost-cutting measures, Shamrock cut risk management and safety staff.

Now there is this email from the CFO and a possible safety issue. Not much time to think; too much going on.

Sheehan takes just another moment to deliberate: It’s not a heavy hit, and Shamrock hasn’t had a product recall in more than 15 years.

“Okay, thanks for letting me know,” Sheehan says to Soto.

“Do another swipe next week and tell me what you pick up. I bet you twenty bucks there’s nothing in the product. That swipe was nowhere near the production line.”

Soto departs, closing the office door gingerly.

Then Sheehan lingers over his keyboard. He waits. So much pressure; what to do?

“Very well then,” he says to himself, and gets to work crafting an email.

His subject line to the chief risk officer and the company vice president: “Possible safety issue: Positive test for Listeria in one of the refrigeration units.”

That night, Sheehan can’t sleep. Part of Shamrock’s cost-cutting meant that Sheehan has responsibility for environmental, health and safety in addition to his operations responsibilities.

Every possible thing that could bring harmful bacteria into the plant runs through his mind.

Trucks carrying raw eggs, milk and sugar into the plant. The hoses used to shoot the main ingredients into Shamrock’s metal storage vats. On and on it goes…

In his mind’s eye, Sheehan can picture the inside of a refrigeration unit. Ice cream is chilled, never really frozen. He can almost feel the dank chill. Salmonella and Listeria love that kind of environment.

Sheehan tosses and turns. Then another thought occurs to him. He recalls a conversation, just one question at a meeting really, when one of the departed risk management staff brought up the issue of contaminated product insurance.

Sheehan’s memory is hazy, stress shortened, but he can’t remember it being mentioned again. He pushes his memory again, but nothing.

“I don’t need this,” he says to himself through clenched teeth. He punches up his pillow in an effort to find a path to sleep.

PART TWO: STRICKEN FAMILIES

“Toot toot, tuuuuurrrrreeeeeeeeettt!”

The whistles of the three lifeguards at the Bradford Community Pool in Allentown, Pa., go off in unison, two staccato notes, then a dip in pitch, then ratcheting back up together.

For Cheryl Brick, 34, the mother of two and six-months pregnant with a third, that signal for the kids to clear the pool for the adult swim is just part of a typical summer day. Right on cue, her son Henry, 8, and his sister Siobhan, 5, come running back to where she’s set up the family pool camp.

Henry, wet and shivering and reaching for a towel, eyes that big bag.

“Mom, can I?”

And Cheryl knows exactly where he’s going.

“Yes. But this time, can you please bring your mother a mint-chip ice cream bar along with whatever you get for you and Siobhan?”

Henry grabs the money, drops his towel and tears off; Siobhan drops hers just as quickly, not wanting to be left behind.

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“Wait for me!” Siobhan yells as Henry sprints for the ice cream truck parked just outside of the pool entrance.

It’s the dead of night, 3 am, two weeks later when Cheryl, slumbering deeply beside her husband Danny, is pulled from her rest by the sound of Siobhan crying in their bedroom doorway.

“Mom, dad!” says Henry, who is standing, pale and stricken, in the hallway behind Siobhan.

“What?” says Danny, sitting up in bed, but Cheryl’s pregnancy sharpened sense of smell knows the answer.

Siobhan, wailing and shivering, has soiled her pajamas, the victim of a severe case of diarrhea.

“I just barfed is what,” says Henry, who has to turn and run right back to the bathroom.

Cheryl steps out of bed to help Siobhan, but the room spins as she does so.

“Oh God,” she says, feeling the impact of her own attack of nausea.

A quick, grim cleanup and the entire family is off to a walk-up urgent care center.

A bolt of fear runs through Cheryl as the nurse gives her the horrible news.

“Listeriosis,” says the nurse. Sickening for children and adults but potentially fatal for the weak, especially the unborn.

And very sadly, Cheryl loses her third child. Two other mothers in the Middle Atlantic suffer the same fate and dozens more are sickened.

Product recall notices from state regulators and the FDA go out immediately.

Ice cream bars and sandwiches disappear from store coolers and vending machines on corporate campuses. The tinkly sound of “Pop Goes the Weasel” emanating from mobile ice cream vendor trucks falls silent.

Notices of intent to sue hit every link in the supply chain, from dairy cooperatives in New York State to the corporate offices of grocery store chains in Atlanta, Philadelphia and Baltimore.

The three major contract manufacturers that make ice cream bars distributed in the eight states where residents were sickened are shut down, pending a further investigation.

FDA inspectors eventually tie the outbreak to Shamrock.

Evidence exists that a good faith effort was underway internally to determine if any of Shamrock’s products were contaminated. Shamrock had still not produced a positive hit on any of its products when the summer tragedy struck. They just weren’t looking in the right place.

PART THREE: AN INSURANCE TANGLE

Banking on rock-solid relationships with its carrier and brokers, Shamrock, through its attorneys, is able to salvage indemnification on its general liability policy that affords it $20 million to defray the business losses of its retail customers.

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But that one comment from a risk manager that went unheeded many months ago comes back to haunt the company.

All three of Shamrock’s plants were shuttered from August 2017 until March 2018, until the source of the contamination could be run down and the federal and state inspectors were assured the company put into place the necessary protocols to avoid a repeat of the disaster that killed 3 unborn children and sickened dozens more.

Shamrock carried no contaminated product coverage, which is known as product recall coverage outside of the food business. The production shutdown of all three of its plants cost Shamrock $120 million. As a result of the shutdown, Shamrock also lost customers.

The $20 million payout from Shamrock’s general liability policy is welcome and was well-earned by a good history with its carrier and brokers. Without the backstop of contaminated products insurance, though, Shamrock blew a hole in its bottom line that forces the company to change, perhaps forever, the way it does business.

Management has a gun to its head. Two of Shamrock’s plants, including Bethlehem, are permanently shuttered, as the company shrinks in an effort to stave off bankruptcy.

Reilly Sheehan is among those terminated. In the end, he was the wrong person in the wrong place at the wrong time.

Burdened by the guilt, rational or not, over the fatalities and the horrendous damage to Shamrock’s business. Reilly Sheehan is a broken man. Leaning on the compassion of a cousin, he takes a job as a maintenance worker at the Bethlehem sewage treatment plant.

“Maybe I can keep this place clean,” he mutters to himself one night, as he swabs a sewage overflow with a mop in the early morning hours of a dark, cold February.

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Swiss Re Corporate Solutions to produce this scenario. Below are their recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

Shamrock Food’s story is not an isolated incident. Contaminations happen, and when they do they can cause a domino effect of loss and disruption for vendors and suppliers. Without Product Recall Insurance, Shamrock sustained large monetary losses, lost customers and ultimately two of their facilities. While the company’s liability coverage helped with the business losses of their retail customers, the lack of Product Recall and Contamination Insurance left them exposed to a litany of risks.

Risk Managers in the Food & Beverage industry should consider Product Recall Insurance because it can protect your company from:

  • Accidental contamination
  • Malicious product tampering
  • Government recall
  • Product extortion
  • Adverse publicity
  • Intentionally impaired ingredients
  • Product refusal
  • First and third party recall costs

Ultimately, choosing the right partner is key. Finding an insurer who offers comprehensive coverage and claims support will be of the utmost importance should disaster strike. Not only is cover needed to provide balance sheet protection for lost revenues, extra expense, cleaning, disposal, storage and replacing the contaminated products, but coverage should go even further in providing the following additional services:

  • Pre-incident risk mitigation advocacy
  • Incident investigation
  • Brand rehabilitation
  • Third party advisory services

A strong contamination insurance program can fill gaps between other P&C lines, but more importantly it can provide needed risk management resources when companies need them most: during a crisis.



Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]