2014 Power Broker

Gaming and Hospitality

The Show Must Go On

Marlene Benoit Vice President Marsh, Las Vegas

Marlene Benoit
Vice President
Marsh, Las Vegas

Events and promotions usually fall outside the scope of general liability policies and can demand some very unique coverage.

Marlene Benoit, a vice president at Marsh, has helped clients hold weekend-long concerts with overnight camping, sponsor death-defying stunts at the Indy 500, and host a Survivor-esque competition on a tropical island.

Policies for event cancellation, weather and prize indemnity insurance are all necessary to ensure smooth sailing.

“She really helps me a lot with weather insurance, group sales and pyrotechnics with group shows,” said Veronica Fuentes, risk manager at the M Resort in Las Vegas. “I look to her for help with special shows including tightrope walkers, pyrotechnics and other liabilities including ‘act of God’ possibilities. She’ll send me three bids for everything I ask for.”

Sixteen years in the events and promotions space, including marketing experience, have helped Benoit identify what coverage terms are crucial and how organizations can best plan events for increased revenue and minimized risk.

Timeliness also matters should an event encounter any last-minute changes. Holly Delinski, vice president of the corporate executive financial department at Edelman, called Benoit’s responsiveness “reassuring.”

“Marlene is always willing to find the best solution possible to our insurance-related situations in the timeliest manner possible,” Delinski said.

Going the Extra Mile

Reiner Braun, CPCU Managing Director Marsh, Los Angeles

Reiner Braun, CPCU
Managing Director
Marsh, Los Angeles

It’s easy to be proactive when business is going well, but digging out of a hole can box brokers into survival mode, fighting against premium increases rather than searching for better, more cost-efficient solutions.

Reiner Braun, managing director and senior client advisor at Marsh, had to be creative for a client with an adverse loss history, broadening coverage for minimum cost. He did so by creating two separately sized primary layers and a larger excess program, allowing the client to take advantage of increased competition in the excess market.

Braun has also helped clients expand, sometimes changing the company’s risk profile dramatically. One hotel chain, for example, added a new coastal property to the program right at the beginning of windstorm season. On short notice, Braun had to attract a large number of underwriters to accept the heightened risk.

Finding underwriter support is not always easy. The hospitality sector faces unique insurance challenges, such as a transactional business model, dependency on lenders, and exposure to natural catastrophes such as windstorm, earthquake and flood.

Lisa Campanaro, COO and executive vice president of Raleigh Enterprises, praised Braun’s willingness to go the extra mile. Other clients also praised his availability and work ethic.

“He’s on everybody’s speed dial,” Campanaro said.

Gourmet Service for Gourmet Food

Denton Christner, CIC Vice President BayRisk, Alameda, Calif.

Denton Christner, CIC
Vice President
BayRisk, Alameda, Calif.

Gourmet food trucks have been rising in popularity, giving hopeful restaurateurs a chance to get into the business without the cost and risk of opening a storefront location. But the niche is chronically underinsured. Denton Christner, vice president of BayRisk Insurance Brokers and founder of InsureMyFoodTruck.com, sought to fill the gap.

By mid-2012, he helped build a program addressing risks specific to food truck operations, incorporating loss of business income coverage, equipment breakdown and spoilage. Christner and his team now serve more than 400 mobile food vendors in multiple states. His website receives between 60 and 125 quote requests per month and has so far attracted almost 8,000 unique visitors.

Much of the site’s success grew from social media promotion and interaction. Christner connected with clients on Facebook or Twitter before meeting them in person to learn about them socially, which builds a stronger bond. Clients also were served quickly — getting full policies, certificates and identification cards within 48 hours — thanks to the company’s digital platform.

“On his website, he has a spot where you sign in and fill in the blanks and within 24 hours you get a certificate for endorsing another insurance for the day, which some locations require,” said Alan Jong, president of Slightly Skewed, a food truck in Sacramento, Calif. “The 24-hour turnaround is a great solution because sometimes I’ll get a call asking me to bring my truck down to a location in two days.”

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Bringing a Fresh Take on Client Service

There may be no better example of the innovation and fresh air the insurance industry craves than the work Denny Christner has done with BayRisk. By insuring hundreds of gourmet food trucks, Christner has not only displayed a sharp eye for new business, but has helped to cover a sector of the economy that speaks to new generations. If insurance is an enabler of commerce, then Christner is an enabler of good taste.

He also breaks the mold by using modern channels of communication with his clients: Facebook, Twitter and Instagram. Promoting and advocating for his always-on-the-go customers via social media speaks to his ability to adapt traditional business models to modern demands. That demonstrates a level of media savvy not typically seen from seasoned brokers.

And Christner is also serving the insurance industry and the economy in other ways. He has served on the Young Brokers & Agents Committee of Independent Insurance Agents and Brokers of California and chaired that committee in 2011. In that leadership position, he hosted events geared to younger agents that encouraged them to discuss their progress and offer mutual support. Christner has also accepted a board position with the IIABCal in 2014.

“I continually engage young professionals and those entering the workforce to consider an insurance profession,” Christner said, calling the field personally rewarding, but often overlooked by young talent.

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Dominating D&O Challenges

Anne Corona Managing Director Aon, San Francisco

Anne Corona
Managing Director
Aon, San Francisco

Renewal time can often weigh down the workload and demand extra creativity from brokers, but completely restructuring a program with new insurers within 60 days is quite a unique challenge. That’s what Anne Corona, managing director at Aon, did for one Fortune 100 company.

The client wanted to overhaul its D&O program to eliminate some coverages and increase its total limits by more than 20 percent, while switching to insurers with better credit quality.

In a challenging marketplace, she was able to create a more efficient program with fewer insurers and reduce the company’s premium by 20 percent despite that significant increase in total limits. The new program was also more tax compliant and included an improved international risk transfer strategy.

“Anne partnered effectively with our team to rethink the program in the context of our unique goals and objectives. The result was outstanding,” said Robert Gordan, assistant treasurer, Insurance division, at Chevron Corp.

Other clients also value her knowledge of the D&O marketplace and high level of honest, open communication.

“I’ve worked with her for about a year and a half now, and I find her very professional. There are a lot of brokers who can do the wining and dining, but she’s always been very professional and very knowledgeable about the coverages,” said Maila Aganon, director, Risk and Insurance, for Caesars Entertainment Corp.

Thinking Ahead and Enabling Growth

Angela Giunto Senior Vice President Aon, Denver

Angela Giunto
Senior Vice President
Aon, Denver

Growth is good. But it also presents risk management challenges in terms of taking on greater assets and more liability. In the past year, Diamond Resorts International Inc. increased its portfolio by 30 percent, acquired two companies, and went public.

Angela Giunto, senior vice president and AE leader for Aon, was there to make sure every transition went smoothly. By working with the companies prior to them being acquired, she was able to roll policies into Diamond’s existing programs with no gaps, and ensured a seamless renewal as the company went public.

That kind of diligence allows businesses to take advantage of opportunities and flourish.

The hospitality industry can be daunting to insurers, one client said, but Giunto has educated the marketplace about the exposures.

“She has to creatively market our program to entice carriers to work with us so we’re not at the mercy of their prices,” the client said. “Carriers are glad they stuck with us. They price us differently now.”

Giunto’s legal background also works to her advantage when it comes to client service. She will ask to see major contracts in early draft stages, which allows her to proactively make suggestions on coverage or indemnification.

“She’s very forward-thinking” said Nusrat Andersen, vice president, enterprise risk management for Diamond Resorts. “The creativity and solutions she offers us are for needs today, which she had identified and brought to our attention over 24 months ago.”

Keeping Costs Down

Sean Murphy, AAI, ARM Account Executive Arthur J. Gallagher, Houston

Sean Murphy, AAI, ARM
Account Executive
Arthur J. Gallagher, Houston

When a hotel with more than 10,000 rooms wanted to reduce their liability exposure at the property level, Sean Murphy came up with a creative approach. He and his team put together an “Accident Investigation Briefcase” consisting of a camera, standardized forms, a ruler and caution tape, among other items. The kit was distributed to 50 locations and helped to reduce the company’s exposure through consistent use.

Drawing on underwriter relationships built over a career solely devoted to the hospitality sector has also given Murphy an advantage in negotiating better deals for his customers.

“We had a large loss at one of our properties and it was occurring around the same time as our property insurance renewal, so understandably some of the underwriters from our insurance providers were a little skittish about what that could potentially do to their ratios,” said Matt Partridge, vice president of finance for Pebblebrook Hotel Trust.

“Sean and his team came up with a creative structure that allowed us to complete the renewal with only a nominal increase, when we otherwise would have experienced a 10 to 15 percent year-over-year increase,” he said.

“We’re a demanding company. We call all hours of the day, on weekends,” said Bob Provost, president for Murphy’s client, Provost & Associates. “And he’s always been responsive. He’s very customer service oriented.”

Despite having clients on both coasts, Murphy makes it a priority to respond to any issues or questions within 24 hours.

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]