The 2019 Agriculture Power Brokers

Jodie DeVries, CIC
Senior Vice President
Marsh, Grand Rapids, Mich.

Jodie DeVries, Senior Vice President, Marsh

Power Brokers distinguish themselves by being more than insurance salespeople; they are true client advocates whose work enables companies to achieve their goals.

When Graceland Fruit made an acquisition early in 2018, for example, the company had enough pieces of the puzzle to fit together on the operational side without having to also worry about the impact to its insurance program.

Marsh’s Jodie DeVries was able to take this piece off their plate, combining the two programs to achieve a savings of roughly $100,000 along with stable premiums, while maintaining full coverage. This all while her team was short-staffed.

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“She lost one of her right-hand team members this past year, but it was almost seamless how she was able to pull together the right resources to keep servicing clients,” said Laura Reznich, director of finance, Graceland Fruit.

When another client suffered a big loss, DeVries stepped in to ensure the claim process was as painless as possible.

“For a risk manager, this is really the moment of truth. We bound the coverage, we paid the premiums and now it is time for the insurance carrier to deliver and pay the claim,” said Cheryl Schmandt, director of credit and risk management, Michigan Milk Producers.

“Jodie organized and monitored a team of Marsh professionals working on our behalf to successfully resolve the large and complicated claim.”

Sandra Gulick, CPCU
Senior Vice President
Aon, Southfield, Mich.

Sandra Gulick, Senior Vice President, Aon

In 2018, Sandra Gulick, director of Middle Market Brokerage with Aon, was handed the challenge of restructuring a franchisee program including more than 350 franchises and nearly 3,000 individual policies. The client wanted a lower-cost program that was easier to administrate and did not sacrifice breadth of coverage.

“Sandra was instrumental in moving our corporate franchise program to a new a carrier, setting up the coverage enhancements and getting it launched. She helped us finalize all the technical details,” said Mike Niehaus, director, insurance and risk management, Ilitch Holdings.

“She brings a lot of experience to the table and is always on top of the latest changes and exposures we bring and how they interact with our insurance program.”
RPT Realty also called on Gulick to help reorganize their program halfway through the year.

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“We underwent a big name change and had a lot of transition in our senior management. It happened really fast, and Sandra and her team went above and beyond to make sure there were no hiccups in coverage,” said Sophia Loveless, risk management analyst for the real estate investment trust.

“Our company owns a strip mall, and our general liability losses were getting pretty high. Sandra got us in a pool with other shopping centers to help reduce our premium. And she put me at ease, because she always had a backup plan. If we got thrown out of the pool or it wasn’t working for whatever reason, she knew what to do.”

Katherine Glancy Johnston
Assistant Director
Aon, Chicago

Katherine Glancy Johnston, Assistant Director, Aon

Heavy catastrophe losses in 2017 made many companies nervous about 2018 property renewals. Even those that sustained no significant losses anticipated rising rates across the board.

“Heading into our year-end property renewal last year, we were quite concerned. There had been a number of large CAT losses, which had us afraid there might be a large premium increase or potentially not enough capacity to underwrite our program,” said Marty Breese, VP and global treasurer for logistics company HAVI.

“[Aon’s Katherine Glancy Johnston] proactively got out in front of this issue and was able to secure us an early renewal of the existing property coverage at a flat renewal rate.”
The property challenge was even more acute for expanding organizations taking more facilities into their portfolios.

“We went through a complete marketing exercise from 2017 into 2018, and through that process, Katherine identified opportunities to enhance our current global insurance program and made sure the structure fit the growth of the organization,” said Robert Greiber, VP of risk management, Reyes Holdings.

That process involved facilitating meetings with new markets and getting them comfortable with new property exposures by hosting facility tours and presenting detailed engineering data. Johnston was able to secure a rate reduction despite rising average rates. For another retail client, Johnston was similarly able to restructure a property program.

John Riley
Regional Director
Gallagher, White Plains, N.Y.

John Riley, Regional Director, Gallagher

Compliance with the Food Safety Modernization Act is an ongoing challenge for the agriculture sector due to increased scrutiny from the FDA. Food and beverage companies are under greater pressure to verify the practices of their vendors and supply chain partners while also controlling food safety risks in their own operations. Obtaining comprehensive coverage and understanding how to transfer risk effectively is critical.

John Riley, director of Gallagher’s Food & Agribusiness Practice, helps his clients assess the scope of their exposure and ensures all their bases are covered.

“Specifically in the seafood industry, which we play in, his coverage recommendations are just spot on. He knows the industry. He knows what we need and don’t need, and he spends our money like it’s his,” said Warren Vogel, CFO of Ruggiero Seafood.

Justin Marx, CEO of Marx Foods seconded that sentiment: “He 100 percent understands our business and can help me figure out how remote or how serious any given risk is. He’s pragmatic and super realistic; he’s not just trying to sell me as much as he can. He looks at our relationship from a long-term perspective, so he makes sure I have the right products that I need and only the right products that I need.”

Communication and fast service are also two of Riley’s strong suits. Marx said he usually gets a response to a query within minutes. Vogel said, “We weren’t getting the right level of service and communication with our former broker, but John’s always been accessible.”

Brian Sebold, CIC
Senior Vice President
Aon, Dallas

Brian Sebold, Senior Vice President, Aon

Just because an insurance program is working doesn’t mean there’s no room for improvement. Aon’s Brian Sebold never takes the path of least resistance, always scouring the market for better coverage at better rates for his clients.

“He doesn’t just look at something and say ‘renew as is.’ He always strives to provide better limits and very similar prices,” said the director of risk and insurance at one supermarket client.

“This past year he helped to present our insurance program to our senior leaders — president, vice president, COO and general counsel. He’s very willing and able to break things down to the Nth degree so we understand what we’re buying. He’s become a strategic partner and someone on whom we depend when we have challenges presented by our business leaders.”

“What sets him apart in my mind is simply his tenacity.

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He’s always on target with details, and he has the relationships and experience with all of the markets to really negotiate strongly and continually on our behalf,” said Chris Mangelsdorf, corporate risk manager for Martin Sprocket & Gear Inc.

“His knowledge of what we do and how we do it is second to none.”

When one of his largest clients was acquired in 2018, Sebold went head to head with the buyer’s broker to see who could produce a stronger combined program. Sebold ultimately was able to save the company $1.4 million in premium.

Charles Storm
Director
Willis Towers Watson, Tampa, Fla.

Charles Storm, Director, Willis Towers Watson

There’s no question severe weather presents a risk to every business, but for produce farmers, packers and shippers, a bad storm can ruin a good harvest and wipe out an entire year’s profits.

After the hurricanes of 2017, one farming organization found their property coverage did not pick up business interruption losses. The risk manager, a former client, reached out to Willis Towers Watson’s Charles Storm.

Storm and his team tailored a stock throughput policy to address the business interruption loss of raw food materials, both sold and waiting for sale, and broadened transportation coverage to better reflect the farm’s operations.

“He was able to save us over 40 percent in premiums while improving coverage. Our incumbent broker had been with the company for over 15 years, and it was a difficult decision to make the switch, but Chip made it well worth it,” the client said.

Others lauded Storm for being proactive, communicative and knowledgeable. “I feel that Chip is constantly scanning the insurance universe to find new products, better deals and a different way to approach issues,” said the CFO of another vegetable grower.

“We are a pretty nimble organization. We add and subtract facilities and acquire businesses somewhat regularly. Chip is always available to handle these extraordinary events.” The COO of that company added: “Chip does a perfect job of keeping us posted.”

The complete list of Power Broker® winners can be found here.

Finalists:

Nicole Holcomb, CPCU, ARM, AIC
VP, Food and Beverage Strategy Leader
Lockton, Denver

Drew Love, CIC
Vice President
Aon, Dallas

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 and 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]