The 2019 Captives Power Brokers

Frank Baer
Agency President
AssuredPartners, Charleston, W. Va.

Frank Baer, Agency President, AssuredPartners

When a struggling captive group approached Frank Baer in 2011 to audit and produce a report on its program, little did he know that seven years later he would have turned around its fortunes.

The group was having problems with the structure of its rent-a-captive program that it had only set up two years earlier, as well as being saddled with an inequitable collateral formula. It also had a single provider acting as retail broker, captive manager, actuary and claims consultant.

Baer uncovered a multitude of problems within the program, and the group appointed him as its retail broker. Over the next six years he reformed the program, restructuring its risk sharing methodology and collateral allocation.

Baer also improved the group’s overall loss performance, focusing on its safety and risk control and active claims management.


Last year, he moved five of the group’s six participants to a mature member-owned group captive, negotiating stair-stepped collateral requirements. As a result, each of their collateral positions was stabilized and their losses were reduced by 30 percent.

Baer also helped move client Kanawha Stone Company and its sister organization TERRADON Corporation into a captive program for property and casualty lines, enabling them to make significant cost savings and benefit from knowledge sharing within the group.

Kanawha Stone Company’s president Tom Kittredge said: “As a lawyer who is also a broker, Frank is able to blend the arenas of contracts and insurance. This is extremely rare in our marketplace and has served our companies well.”

DeAnna Buck, AFSB
EPIC, Fresno, Calif.

DeAnna Buck, Principal, EPIC

Logistics and distribution firm Performance Team had grown to become one of the largest members of its group captive, building $3.5 million in equity and making millions of upfront cost savings in the space of just seven years.

But DeAnna Buck was convinced there was more she could do for her client. So she looked at the group’s operating expenses and performance during that period and concluded that it should employ a cell captive that would maximize its funding and provide it with the flexibility to add other lines it was currently self-funding. It would also give the company greater control of its total cost of risk outside of the group model.

In her final summary, Buck presented her client with an option to layer a high deductible policy with its own captive, thus reducing the expenses associated with its program.

It also enabled the client to customize its program to include its deductibles on fully insured policies, as well as to reduce its collateral drastically under the group model.

Another client of 10 years, Greystone Plastering, who Buck convinced to join a group captive, has also reaped the benefits of her experience.

“DeAnna is a great problem solver,” said company president Mike Stonehocker.

“She listens to the needs of the customer but is patient in allowing us to make the right decisions for our company. {She] is a smart individual who shows a great deal of applied talent in the area of captive insurance programs.”

Ellen Charnley, CA
President, Managing Director
Marsh, Las Vegas

Ellen Charnley, President, Managing Director, Marsh

As president of Marsh Captive Solutions, spanning 50 domiciles and 400 employees servicing more than 1,200 captives, Ellen Charnley has a lot on her plate. Her role is to ensure that the right brokers with relevant expertise are matched to the right clients. In the past year she has focused on training those brokers to equip them with the right tools for the job.

On the client side, Charnley has also prioritized bringing innovative solutions and products to market, delivering benchmarking data and analysis to enable her clients to make informed decisions, and providing networking and educational opportunities.

Last year, she hosted Marsh’s third annual captive lunch at RIMS to give clients a platform to discuss the latest trends and developments and meet with senior leadership.


Charnley also launched a set of captive owner forums throughout the year to listen to clients’ concerns and address their needs. In addition, she has worked directly with clients on everything from choosing domiciles to strategically reviewing their captive utilization.

Bill Baxley, SVP of finance and treasurer for Freeman, which has two captives in Texas and Hawaii that Charnley services, said: “Ellen understands our corporate culture, what will and will not be acceptable to our management team, and she helps us design solutions for the long run, knowing we must take baby steps when we begin a new product journey.

“Her experience in the industry gives her the breadth of knowledge to implement solutions that make sense for us while not wasting time pitching everything under the sun.”

Kathryn Christensen
Senior Consultant, Risk Finance and Captive Consulting
Aon, Los Angeles

Kathryn Christensen, Senior Consultant, Aon

A digital asset exchange approached Aon’s Kathryn Christensen to do a feasibility study into using a captive to insure the assets it holds online. That entailed looking at a host of potential onshore and offshore domiciles and finding underwriters willing to write such hard-to-insure risks.

The client said: “Kathryn is very good at listening and understanding what our needs are. That, along with her industry knowledge and contacts, has enabled her to provide us with an array of potential solutions.”

Another client, a consumer credit reporting agency, also engaged Christensen to carry out a captive feasibility study focused on its professional liability lines.

Through asking the right questions of the client, she was able to provide multiple options for where the company could deploy a captive.

The client said: “What impressed me the most was Kathryn’s ability to quickly understand our business and then ask all of the right questions. Her inquisitiveness led us to consider the different ways to structure a captive and different utilities we can derive from having one that we’ve not considered before.

“Deploying a captive in different layers of our insurance tower is not a typical solution. But what blew us away was that she not only found and explained the layers where a captive could be utilized, but she already ran pro-forma financial statements to show us what the premium and expense would look like for the captive over the next four years.”

Justin Felker, CIC, ARM, AAI
Area Assistant Vice President
Gallagher, Greenville, S.C.

Justin Felker, Area Assistant Vice President, Gallagher

Described by one client as “the best insurance broker I have ever worked with,” Justin Felker is at the forefront of the captive market.

Five years ago, he helped wholesale and retail grocery firm W. Lee Flowers & Company implement a captive strategy that has stabilized its overall cost of risk and enabled it to be more flexible with its insurance coverage.

Despite some big losses and a tough renewal season, Felker negotiated lower operational costs and expanded the primary auto limit within the captive, allowing the company to create savings in its umbrella program.

W. Lee Flowers & Company’s CFO Michael Weathersbee said: “Justin really goes above and beyond the call of duty. He makes multiple visits to our facility on an eight-hour round trip to keep up to date with the latest issues.

“His deep knowledge and experience of the industry have enabled him to quickly come to grips with the complex and multi-faceted business structure that we operate here.”


Felker also helped client Warehouse Services extend its captive program by analyzing loss trends in-house for new acquisitions. He is also assisting the company in moving from its existing rental-cell captive to a single-parent structure.

His versatility also extends to putting together a captive program for another client, a group of New York horse trainers that was struggling to find coverage in the traditional market.

Jason Flaxbeard, Executive Managing Director, Beecher Carlson

Jason Flaxbeard, CA, CPCU
Executive Managing Director
Beecher Carlson, Greenwood Village, Colo.

Global brands don’t come much bigger than Coca-Cola, so when the company asked Jason Flaxbeard to help restructure its entire captive program, he knew he’d have his work cut out for him.

But he took it in his stride, helping the company to implement a cutting-edge program, streamlining its on and offshore captives to maximize its tax efficiency and capital usage, as well as educating the markets about its reinsurance requirements.

Stacy Apter, Assistant Treasurer at Coca-Cola, said: “Jason is a truly strategic partner who delivers on the complete package — from the thought process to engagement with all levels of stakeholder. He feels just like a natural extension of our risk management team.”

Flaxbeard worked with another client, Vail Resorts, to review, amend and implement the fronting carrier arrangement in its ski pass captive program, resulting in an annual $200,000-plus cost saving.

He also helped Marriott International combine its two captives, guiding the transaction team through all the financial, legal and regulatory hurdles, delivering large cost savings and efficiencies for the parent company.

Michael Owens, vice president, risk finance at Marriott International Risk Management, said: “The captives were located in different domiciles and Jason’s considerable knowledge of and contacts in both domiciles were critical success factors in planning and completing the effort. He is also just a terrific resource for us in raising and evaluating new product offerings and the strategic use of our captives.”

The complete list of 2019 Power Broker® winners can be found here.


Justin Beidleman, CRIS
Alternative Risk Advisor
Arbor Insurance Group, Allentown, Pa.

Jeff Mentel
AssuredPartners, St. Louis

Michael Serrichio
Managing Director
Marsh, Norwalk, Conn.










Jason Wallace, CRM, CIC
Senior Vice President
Horton Group, Orland Park, Ill.

Donna Weber
Managing Director, Head of Risk Pooling and Protected Cell Companies

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 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.


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]