2014 Power Broker

Financial Services

Good One Day, Great the Next

James Kardaras, RPLU Senior Vice President Marsh, New York

James Kardaras, RPLU
Senior Vice President
Marsh, New York

One of James Kardaras’ life insurance clients was facing a potential price increase and coverage restrictions due to a hardening financial institutions bond market, but Kardaras was able to negotiate a 15 percent premium reduction by inserting a new non-incumbent insurer into the renewal competition. He also secured broader coverage enhancements, particularly in connection with the ever-growing exposure of electronic crime. Kardaras, FINPRO Crime Insurance product leader, then negotiated an agreement with the other excess insurers to follow suit with more competitive renewal terms. Kardaras did all this without having to replace a single insurer on the program, maintaining the ties and goodwill that had existed for the client. The next day, Kardaras negotiated an almost 10 percent premium reduction on a crime-related renewal with another insurer for the client, while also broadening coverage, despite the fact that the client’s exposure in a key area had increased considerably from last renewal.

“Kardaras is an excellent broker,” a client said. “He suggests ways to enhance coverage and he proactively identifies issues.”

“He’s very knowledgeable about the market, and he understands the complexities of the issues,” another client said. “He’s very effective at negotiating the right terms.”

“James Kardaras is very detail oriented and knowledgeable about his product line,” another client said. “He’s been in the business for many years and understands the complexities of financial institutions.”

Making Her Own Shoes

  Lisa Loughlin Senior Vice President Marsh, New York

Lisa Loughlin
Senior Vice President
Marsh, New York

When there was turnover on the Marsh team handling his business, one current client of Lisa Loughlin’s said he had his share of concerns.

“Because the team I had worked with had been great, Lisa had big shoes to fill,” the client said.

“But she actually just threw those shoes out and created her own. She’s an advocate for us. She knows how to marshal Marsh resources to our benefit, and she was instrumental in quickly assembling additional capacity that was a financially sound insurer at a very competitive price,” the client said.

A mutual with more than $7 billion in 2013 revenue came to Loughlin and asked her to create a broad, blended E&O program for all of its different adviser subsidiaries.

In addition, one of the adviser subsidiaries sponsored various funds that were uninsured. Loughlin was able to structure a program that addressed the current insured and uninsured exposures, saving her client money in the bargain.

“Lisa Loughlin is absolutely spectacular in this space,” a client said.

“She is just very attuned to understanding our risk and counseling us about different ways to deal with that,” said another.

“She is very aggressive with the markets and is really good, analytically, in terms of producing peer comparisons,” that client said.

Loughlin prides herself with having focused on the financial space for more than 20 years and being a keen student who devours information that may help her clients.

 A Winning Combination

James McCue Managing Director Aon, New York

James McCue
Managing Director
Aon, New York

James McCue’s client, Credit Suisse Group AG, was undergoing a corporate restructuring that included combining its private banking and asset management segments, as well as its separate professional liability policies. The private banking program, comprised of Swiss, U.K. and Bermuda insurers, consisted of E&O policies. The asset management program, comprised solely of U.S. insurers, was blended E&O and D&O policies and had a retention significantly lower than the private banking policy.

While the client wanted to place the latter with a Swiss carrier within the former program, McCue recommended having the private banking insurers use the asset management policy instead as the basis for combined coverage. The carriers preferred their European E&O language to the U.S. D&O/E&O language, but McCue was able to negotiate a strong combined policy led by a Swiss insurer, using the U.S. policy language. That saved the client more than 20 percent in combined premiums, doubled the asset management limits and inserted unique allocation language, allowing the asset management business to continue benefiting from the lower retention.

“We were able to combine two legacy complicated programs into a combined contract, which commenced coverage in conjunction with the launch of the division,” said Timothy McAlindin, Credit Suisse’s managing director and head of group insurance. “Credit Suisse also saved significant premium dollars.”

“He’s out in front of the trends and emerging coverages,” another client said, “so he keeps me up to date on the things I need to know to make smart business decisions.”

Getting the Structure Right

Phil Norton Vice Chairman, Midwest Region Arthur J. Gallagher, Chicago

Phil Norton
Vice Chairman, Midwest Region
Arthur J. Gallagher, Chicago

Wintrust Financial Corp. was facing the possibility of 20 percent price increases from its primary carrier at renewal, due to a harder market for D&O and E&O coverages. Moreover, the modest management liability program utilized only four carriers and had a lot of claims activity in its recent history.

Phil Norton, president of Gallagher’s Professional Liability Group, concluded that Wintrust had the right carriers but the wrong structure. Through optimizing the structure and applying personal clout, Norton and his team brought the renewal in for less than the expiring coverage and more than $500,000 less than initial pricing indications. Norton also negotiated a total of 30 significant new improvements to the D&O policy.

“Phil Norton is extraordinary when it comes to his expertise and attention to detail,” said Wintrust’s John S. Fleshood, executive vice president and chief risk officer. “He’s also very diligent and thorough in the way he approaches negotiations with carriers.”

“Phil’s genuine concern for Five Star Bank as a client was obvious in providing us advice and negotiating the professional liability lines’ policies,” said Sonia Dumbleton, the bank’s senior vice president, controller and corporate secretary.

“Getting competitive quotes for cyber liability and achieving expanded coverage at comparable premiums from the incumbent carrier was very important to us in this ever-increasing area of risk. Also, the management and professional liability policy language and coverage has been improved with Phil’s expertise and diligence,” she said.

Respect in the Market

Jamie Powell Managing Director Aon, London and Bermuda

Jamie Powell
Managing Director
Aon, London and Bermuda

One of Jamie Powell’s health insurance clients made a significant acquisition that called for an outside-the-box approach to the client’s risk transfer requirements. This particular transaction involved complex regulatory and legal considerations, all of which Powell had to clearly articulate to worldwide insurance markets — or else the client would have faced financial and coverage consequences.

Powell was able to engage directly with the carriers’ executive decision-makers, and secure enhanced policy protection that incorporated the acquisition, with the ultimate economics being far more advantageous to the insured than prevailing market conditions at that time.

“Jamie has the ability to work with our insurance carriers to see the right picture of risk — or lack thereof,” the client said. “Through this guidance we have been able to provide information that explains the business properly and drives a real cost savings in the programs.”

“Jamie Powell is easily one of the top three broker professionals I have had the pleasure of working with in my 25 years of insurance risk management,” said Timothy McAlindin, Credit Suisse’s managing director and head of group insurance. “In the past 24 months alone, Jamie played a pivotal role in helping Credit Suisse implement three important products … that not only contain unique elements of risk transfer but contain Basel capital relief as well.”

“Jamie has earned the market’s respect and due to his presence in the market,” another client said. “He has been able to negotiate very favorable terms for my firm on a multitude of programs.”

Banking on Good Relationships

Steven Quinterno, ARM Executive Vice President Willis, New York

Steven Quinterno, ARM
Executive Vice President
Willis, New York

When Superstorm Sandy ravaged New York and New Jersey in 2012, an insurance company’s key facilities were impacted, resulting in significant property and time element losses. This led the company to rethink its insurance program.

Working within a tight time frame, Steve Quinterno worked directly with the client to quantify exposures and understand its risk philosophy. Recognizing that the client’s expiring program had an overly complex structure, Quinterno led a global re-marketing exercise, introducing new carriers to the placement and streamlining the program.

Quinterno worked closely with incumbent carriers to address their concerns, and demonstrate the steps taken by the client to help mitigate future losses. This differentiated the client in the market and contributed to securing a sizable increase in Cat limits, meaningful coverage improvements and substantial premium savings.

“Steve Quinterno of Willis has in-depth knowledge on property insurance with the ability to explain coverage in an easy-to-follow manner,” the client said. “He has good rapport with underwriters and the decision-makers at the insurance company, and the ability to negotiate favorable terms and pricing for clients.”

“One of the things I like about Steve is that he is very creative in his approach to problem-solving,” another client said. “I also like the fact that he has relationships with the underwriting community, which helps from both a pricing and coverage standpoint.”


Ariel Duris Senior Vice President Aon

Ariel Duris
Senior Vice President

John Graham Senior Vice President Aon

John Graham
Senior Vice President

Krista Cinotti Vice President Marsh

Krista Cinotti
Vice President

Paul Huelbig Managing Director Marsh

Paul Huelbig
Managing Director

Stefanie Pearl Senior Vice President Marsh

Stefanie Pearl
Senior Vice President

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.


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.


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?


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.


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.


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]