2017 Power Broker

Health Care

Long-Term Risk Management

Martha Acker, CIC, CRM, CHSP
Area Senior Vice President
Arthur J. Gallagher, Birmingham, Ala.

For 30 years, Arthur J. Gallagher’s Martha Acker mitigated risk and helped insure the long-term care market.

Last year, Acker further fortified the industry when she established a risk purchasing group (RPG) program for the property and liability environmental exposures of long-term care.

Long-term care has an inherent risk for environmental claims such as mold, mildew and Legionella because of the compromised health of most residents.

The RPG program presented a simplified underwriting process, broader coverage and a lower price to the LTC clients.

The program also was designed around loss control resources to assist clients in identifying and reducing their exposure to loss in this area.

Acker also developed and managed two captive insurance programs for the PL/GL exposure. The first captive was established during the industry crisis of 2000 as a group captive. The second is a single parent captive established in 2013.

Her clients in this industry view her expertise and dedication as unmatched.

“I have never come across anyone that even comes close to what Martha does,” said Richard Brockman, an attorney who sits on the board of Associated Long Term Care Insurance Company.

“She’s there, soup to nuts, with her clients up and down the line,” Brockman said.

A ‘Visionary’ Broker

Chris Ainscough
Account Executive
Aon, Cleveland

A client of Aon’s Chris Ainscough faced a large property loss. The client shared concerns with Ainscough: How would the carrier’s policy respond to the loss? How could they quickly get whole again after the business interruption? Finally, how would this recent setback affect the upcoming property renewal?

Ainscough quickly got to work and confirmed coverage with the carrier, set meetings between the carrier and client, and assisted throughout the process to make sure the claim was adequately adjusted.

Next, he collected the data needed to make sure the client recovered fully from the business interruption. Ainscough worked to have the insurer allow Aon to act as a consultant, all the while having the policy cover the funds for the consulting services.

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Finally, the insurer agreed to a two-year term with a flat renewal rate in the first year, and a low single-digit rate increase the following year.

“I really enjoy working with Chris,” said one client, Chet Porembski, system vice president and deputy general counsel for OhioHealth Corp. “I can always rely on him.  When he tells me he’s going to do something, he does it. Chris is always trying to think ahead about our business to bring value to our organization.”

Ainscough’s preparation and foresight left an impression with other clients as well.

“He is a visionary,” said Kimberly Baughman, the director of risk & compliance at Wood County Hospital. “He always thinks five to 10 years out.”

The Unflappable Mr. DePriest

Tim DePriest, ARM
Managing Director
Arthur J. Gallagher, Glendale, Calif.

Clients value Tim DePriest for the significant amount of time he puts into education, planning and negotiating creative solutions with the carriers. They know he’ll pore over policies to find weaknesses and ways to reduce premiums.

When the CFO of a mental health services center invited DePriest to review its P&C program, DePriest found significant coverage gaps and issues throughout the program.

DePriest created a comprehensive marketing overview for carriers, working to educate them on the strength of the  management team, their risk management philosophy and their strategic operational plans.

Coverage for many areas such as earthquakes, board directors and cyber liability was expanded and improved. A claims management, loss control and safety education services plan was created to prevent workplace injuries and manage claims. All of these coverage enhancements as well as substantial improvements in client service, were achieved while reducing annual premiums by 25 percent.

DePriest will go the extra mile to get policies to work in his client’s favor, said Carl Coan, CEO of White Memorial Community Health Center. DePriest helped Coan sort through malpractice coverage issues for health care workers acquired through a recent merger.

“He was really helpful as we were trying to work through the malpractice issues,” Coan said. “He’s unflappable.”

Big in Telemedicine

Larry Hansard
Regional Managing Director
Arthur J. Gallagher, Dallas

This year, Larry Hansard designed a comprehensive telemedicine medical professional liability program. It offers global protection for U.S. health care providers who, in the past, had coverage that was limited by location.

The new liability responds in the jurisdiction where the patient resides around the globe and provides defense in nearly every venue, allowing the emerging telemedicine sector to provide health care internationally.

Matt Scalo, head of finance at Doctor on Demand, Inc., said Hansard was able to get his company a more than 50 percent discount on medical malpractice coverage. Doctor on Demand offers a mobile application that provides mental health care to patients in all 50 states. As a startup, it struggled to find affordable insurance coverage.

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Hansard educated carriers on the business model, making them far more comfortable insuring the business.

“Part of our challenge with our original broker is they didn’t understand our business,” Scalo said. “Larry … spent the time to understand what we do and how we do it.”

Hansard frequently reconnects with Scalo to learn about any new products the company is developing and suggest ways to incorporate risk and insurance issues early on, before they go too far down any path.

“What Larry and his team have done is really build a partnership,” Scalo said. “I don’t worry about insurance, he really owns the insurance process.”

Exclusive Treatment

Coleen Kelly
Vice President, Program Management
Aon, Hatboro, Pa.

Aon’s Coleen Kelly was contacted by a colleague seeking her help: Could Kelly help provide a solution for a specific exposure faced by a client with multiple franchise operations?

Kelly thought she could. She quickly realized that many of the coverages being sold were not aligned with the franchise requirements, nor did they address the client’s exposures.

Kelly helped to secure the commitment of the carrier with a product offering that would meet and actually exceed the clients’ need as well as offer a streamlined process to ensure compliance with the franchise requirements. Additionally, the client indicated early on that the franchisees needed a health insurance solution.

Kelly worked with a group from Aon Risk Solutions to offer ideas, gain the endorsement and launch a new product offering to the client franchisees. Kelly is now helping take to market products for all the franchisees.

Kelly also helped set up the nonemergency medical program used by R.E. Chaix & Associates. “It’s really taken off, it’s been great for us,” said Kristi Mulford, a broker at R.E. Chaix. “It allows me to not turn away as many accounts. I almost feel like I’m an exclusive, like she would do anything to help me and if I have questions, she is always available.”

“She gets things done, and gets things done quickly,” said Richard Walthall, a commercial insurance producer at Walthall Sachse & Pipes Inc. ”She is responsive, she’s accessible, she understands specifically what I want, and she’s able to negotiate what I want.”

A Great Client Asset

Charles Krauth, CIC, CRM
Vice President
Aon, Atlanta

Texas-based HNI Healthcare is a rapidly growing physician group with operations nationwide. It recently expanded to provide emergency department and anesthesia services as well as IT and management services.

Medical malpractice insurance is its largest risk and insurance cost and it is critically important for the practice to remain competitive when pursuing new contracts and recruiting new physicians.

HNI’s 2016 renewal needed to account for the company having doubled in size, entering into several new states, expanding into new specialty areas and rolling out proprietary practice management software.

Based on expiring rates, the 2016 renewal premium would have doubled.

Aon’s Charles Krauth reached out to insurers and highlighted the experience of HNI’s leadership team and new risk management strategies. He also emphasized the company’s positive five-year loss history.

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Four top medical malpractice insurance carriers offered rate cuts of between 30 percent to 50 percent. Additionally, Krauth negotiated an auditable policy provision that allowed for additional growth and an 18-month policy period, further locking in the very low rates.

“He wants to make sure he fully understands what our risks are and educates us on that,” said Skip Courtney, the chief operating officer at HNI. “We ultimately have to make the decision, but he’s brought us some things that we didn’t even think of.”

Medical Buying Power

Lee Newmark
Senior Vice President
Arthur J. Gallagher, Itasca, Ill.

This year, Arthur J. Gallagher’s Lee Newmark was asked to help integrate the insurance/risk management programs for several local gastroenterology practices into one single program.

Physicians seeking coverage face tough challenges in today’s health care market. The individual doctors know that they have to collaborate to survive. Newmark worked with the various groups and encouraged them to come together on their own terms while remaining as independent practices continuing to serve their local communities.

He helped construct a program that took advantage of the collective size of the combined gastroenterology group by offering preferred pricing. He also put together a coordinated risk management plan that would allow the group to become more efficient in its day-to-day work while offering the best patient care.

Ultimately, Newmark put together a single integrated platform that saved the doctors a significant amount in annual premiums and allowed them to establish a robust risk management plan that is already making great strides in improving patient care.

Gallagher continues to work with this group of physicians and introduced them to its employee benefits team. Now the medical group is considering a proposal that’s designed to achieve similar results in the benefits area.

“I think he does a very good job,” said Dr. Neil Friedman of the Metro Chicago Surgical Oncology group. “He’s always well researched and he’s there if we need him.”

Preserving Relationships in Tough Times

John Orr
Managing Principal
Integro, San Francisco

Integro’s John Orr found a way to structure a comprehensive insurance program by securing aligned or joint policies for three different medical companies with interconnected businesses.

“They are two companies but most of our policies are joint policies for both entities because the covered risk is shared to both of them,” said the medical group’s director of corporate real estate. “They are really married.

“We’ve done a lot of work around structuring a comprehensive program where the coverages are aligned with insurers to close those gaps identified,” the director said.

Another client faced a dicey renewal with uneasy insurers. The client had several unrelated class action lawsuits over a three-year period, giving rise to challenging D&O renewals. On top of that, the client’s market cap tripled over the same period.

Orr managed the client’s carrier relationships while reworking the positions of some insurers on the tower. In the end, Orr delivered a 10 percent premium decrease, capping off four years of reductions in the wake of increased market caps and other challenges.

More importantly, Orr preserved relationships and negotiated coverage enhancements for the client.

“He’s incredibly available to clients. He is proactive in advising about litigation trends, insurance contract clauses and the nuance of what’s going on in relevant litigation,” said David Lehman,  general counsel at Intersect ENT. “That is incredibly helpful to me.”

A Health Care Partner

Larry Reback, ARM
Managing Principal
Integro, San Francisco

After Banner Health received a large and unexpected adverse jury verdict on a medical malpractice case, its insurer claimed it was not properly advised of key developments in the case and was not afforded the opportunity to settle prior to the jury verdict.

Integro’s Larry Reback contacted senior underwriters on behalf of his client and got up to speed with every detail of the case. He was able to bring both sides to the table  and negotiate a full reimbursement of the verdict by the carrier.

“I’ve been in the industry for over 35 years, it’s really hard to find a good broker that you can partner with,” said Ellen Rensklev, chief risk officer at Oregon Health & Science University.

“In Larry, we get somebody who gets the big picture, who listens to what our needs are and who’s able to execute on those needs,” Rensklev said. “Then we set our goals together.”

Reback, a former insurance defense attorney, works with clients on everything from cyber to general liability to professional liability to the domestic market to international markets.

“Every time I encounter Larry, he provides advice and guidance that is thoughtful and considerate and I always feel that I am his only client,” said Yvette Carrillo, a claims director at Banner Health who has worked with Reback for about 18 years.

A Model for Others

John Selgrath, ARM
Senior Vice President,
Integro, San Francisco

Oregon Health and Science University owned a mature captive with a significant number of coverage lines.

Over the years, coverage lines were bolted on as endorsements without fully integrating the coverage into the policy. As a result, the policy coverage was often hard to determine.

Integro’s John Selgrath noticed the patchwork quality of the policy and immediately volunteered to rewrite it.

“He actually took it on his own initiative to suggest we rewrite the policy,” said Cassandra Forbess, risk and insurance manager at the university.

Selgrath was able to recommend and implement significant coverage enhancements while streamlining and clarifying the policy.

“He’s been a great resource for us,” Forbess said.

Susan Plante, senior insurance analyst at UMass Memorial Health Care, Inc., recalled the time the hospital experienced an after-hours emergency and she reached out to him for help. Selgrath responded immediately, reviewed affected policies and offered her a preliminary action plan to bring back to senior leadership within just a few hours.

Jeff Winecoff, with corporate insurance & risk at John Muir Health, added that Selgrath’s background as an attorney further enhances his value.

“Having somebody who can break down the form and also share a legal perspective is really invaluable and perhaps something all brokers should strive for,” Winecoff said.

Interpersonal Skill

Mary Walkenhorst, CPCU, ARM
Senior Account Executive
Aon, St. Louis

This year, with considerable M&A activity in the health care industry, Aon’s Mary Walkenhorst found herself in the awkward position of representing two of her clients in an acquisition.

She impressed them both by pointing out risks that neither had contemplated in the arrangement. She advised them not to seek just the least costly option for combining insurance programs, but to choose the options that made the most sense from a risk management standpoint. The clients said Walkenhorst helped make the transition as smooth as possible.

For policy renewals, clients said, Walkenhorst treats every part of the program as new business, asking, How can we improve the risk financing program? Is it still relevant? Does it position the client to accept future anticipated risks?

Walkenhorst coaches clients on how to avoid risk and better negotiate contracts, rather than always transferring risk to an insurance company,

Clients said she’s a great resource on cyber liability, stop loss coverage and financing programs through the government. She’s able to pull in additional information from industry sources and her colleagues at Aon.

“She’s just one heck of a good collaborator,” said Bill Kauffman, general counsel at St. Louis University. “She asks insightful questions. The interpersonal skill Mary possesses is one of the things that separates her from others in the industry with whom I’ve dealt.

“I would give her an A-plus in terms of service,” Kauffman said.

Capping the Losses

Julie Wisener, AINS
Vice President
Marsh, Nashville, Tenn.

Julie Wisener’s health care client was recently named in a lawsuit for alleged negligence while providing labor and delivery services for the indigent back in 2012. Since the incident involved an infant, there was potential for long-term liability.

The legal entity named in the lawsuit was only supposed to be operating in a holding capacity in Louisiana. While the entity was covered under their professional liability program, it was not enrolled in the Louisiana Patient Compensation Fund (LA PCF). Without participation in the LA PCF, the client’s liability for the claim would not be capped, and economic damages could be unlimited.

Wisener discovered that the entity could have coverage because the law considers independent contractors as employees. As long as that independent contractor was enrolled into the LA PCF, there was hope.

Wisener’s next challenge was negotiating with the LA PCF back to the year of the loss. She successful enrolled the legal entity back to 2012, allowing the known loss to be capped under the program, thus potentially saving the client a large, long-term financial payout.

Wisener helped another client properly insure a health care property while it was still under construction and the client was uncertain when it could begin seeing patients.

When construction dragged on, Wisener went back to the carrier and got a discount.

“That is something that wouldn’t normally happen with other companies,” said John Edmunds, CFO with Generations Behavioral Health.

Finalists:

Theresa Edwards
Senior Vice President, National Practice Leader Healthcare Industry Practice
Wells Fargo Insurance, Charlotte, N.C.

Nicole Francis
Senior Vice President
Marsh, Danville,Calif.

Timothy Hoover
Area Executive Vice President
Arthur J. Gallagher, Whippany, N.J.

Ruth Kochenderfer
Senior Vice President
Marsh, Washington, DC

Peter Lavery
Principal
Integro, Boston

 

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

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Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

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We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

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Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

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Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

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More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]