2017 Power Broker

Employee Benefits

A Knack for Finding Unexpected Savings

John Byers
Vice President
Aon, Franklin, Tenn.

One of John Byers’ clients had been going directly to a carrier for its elective benefits, but the outdated strategy caused its employees to pay up to four times the market price for an inferior product.

Byers, who is also director of sales, and his Aon team were able to save them an average of 35 percent on premiums while improving benefits by 50 percent. The broker also negotiated three additional benefits: telehealth services, employee advocacy and medical bill saver.

A new client told Byers that it had received a 49 percent increase on its medical plan. Byers and his team redesigned the plan, increasing the deductible of the primary coverage and subsidizing the difference with a secondary carrier, saving the client nearly $1 million.

One employee had her out-of-pocket costs for maternity care cut from $4,100 to $1,000, and 80 percent of employees spent nothing more than their premium contributions on their medical costs in 2016.

“I think John does a better job asking questions that really get to the heart of the issue, helping those clients that I work with save in places that they didn’t even think they could,” said Colby Jubenville, senior consultant at Brent Consulting Group. “Secondly, he helps them manage risk in ways in ways they didn’t think was possible.”

“John is really a great guy to work with,” said a benefits director at a restaurant company. “He has the company and the employees’ best interests at heart, and he does a really good job in our space.”

Solid Strategies for Global Challenges

Jeff Clymer, FSA, MAAA, EA
Senior Partner
Aon, Waltham, Mass.

One of Jeff Clymer’s clients recently separated from a large U.S. company and needed to create new global retirement plans. The challenge was meeting certain financial objectives in the allocation of unfunded pension liabilities across over 100 pension plans in over 25 countries. The solutions had to vary by country and the concentration of employees in each country.

Specific challenges included legal restrictions; assets that couldn’t be transferred between plans; defined benefit plans that couldn’t be efficiently provided; and new funding vehicles that had to be established.


Where defined benefit plans could not be efficiently delivered, Clymer and his team developed alternative arrangements to deliver comparable benefits. When future benefits were provided as defined contribution, the defined benefit obligations were not shifted to the new company. Due to the design of these plans and the various stakeholders involved, there were many challenges as the team balanced cost with acceptance of the new designs.

“This was a huge effort … and Jeff’s expertise and knowledge was instrumental in ensuring we met critical deliverables and milestones in record time,” said the client’s director of compensation and benefits.

“Jeff has the ability to help us strategize, work through the business transition that we’re doing throughout the organization, how that impacts our employees, presenting options we could take to mitigate that,” said the client’s VP, global benefits and employee mobility.

Tops at Turning Rate Trends Around

Joseph Colombo
Area Vice President
Arthur J. Gallagher, Princeton, N.J.

Colombo worked to create two self-funded programs for his clients: the N.J. RX Shared Services Program and the N.J. Dental Shared Service Programs. Clients’ percentage rate increases in the N.J. RX Shared Services Program fell to single digits, even below forecasts.

By joining the  NJ Dental Shared Service program, all groups reduced administrative expenses by 30 percent. This program also implemented a transparent three-tier provider network that reduced claim expenses by 15 percent to 20 percent. The three-tier network is unique to the program and was not offered to the school boards in previous years.

“I’m thrilled with the services provided by Joseph Colombo,” said a board secretary and business administrator at a K-12 school district. “He does an excellent job negotiating renewal rates with the carriers on our behalf. During our collective bargaining, Mr. Colombo provided the board numerous alternative strategies to introduce what would help the district reduce their health insurance costs.”

“He’s very attentive to clients’ demands,” said Derek Jess, board secretary and business administrator at Perth Amboy Board of Education. “He and his team have always provided great service and he always makes sure the client gets the best possible rate for their insurance benefits.”

Guiding Clients Toward a Better Path

Lori DeVore, FSA, EA
Aon, Columbus, Ohio

A restaurant client of Lori DeVore wanted to move from a 100 percent employer-paid retirement benefits program to a culture where employees share the responsibility of saving for retirement.

Through the use of a new 401(k) plan, a new nonqualified supplemental executive retirement plan, and the existing profit-sharing plan to provide five years of bridge benefits to qualifying employees, DeVore and her team were able to achieve the client’s goal of reduced and predictable cost, and an average benefit replacement level of 90 percent or more for employees who participate fully in the new 401(k) plan.

A prospect in the health care industry was funding its three pension plans at the minimum required level. This allowed the prospect to utilize its cash resources in other parts of its business, but it resulted in underfunded pension plans and large required premiums to the Pension Benefit Guaranty Corp. DeVore showed the organization that it could lower overall costs and increase cash flow if it borrowed money to fully fund the plans immediately instead of contributing only the minimum required contributions. The prospect hired Aon and is currently seeking loans to fully fund the pension plans.

“Lori DeVore is one of the most dedicated representatives that we have ever worked with,” said Nina Maratto, director of benefits at White Castle Systems Inc. “She is accurate and consistent, and we can rely on her without fail. She knows parts of our benefit plans better than we do; she truly is an extended member of our team.”

Better Solutions for Maritime Challenges

Dale Finn, CHRS, CWS
Area Senior Vice President
Arthur J. Gallagher, West Palm Beach, Fla.

Dale Finn’s cruise line clients are required to comply with challenging maritime regulations regarding medical treatment for employees.

For example, if crew members need offsite medical attention in a country of which they are not a citizen, they must be met at the port-of-call with an armed guard and provide a visa letter to be escorted off the boat and treated. Cruise lines also must completely cover any care over a certain threshold, other than pre-existing conditions.

For Royal Caribbean International, Finn negotiated modifications to in-network coverage to limit care only to providers that met specific cost and quality-of-care guidelines. He also arranged for care and medical housing for non-U.S. citizen crewmembers’ families in locations around the United States, eliminated duplicate billing, and ensured the publicly traded company would receive claims reports weekly.

Overall, these changes resulted in $2 million in savings.

“Dale has been very consistent in facilitating significant contractual arrangements we have with UnitedHealthcare Global,” said Lee Thomassen, senior director, health administration, health services, at Holland America Group. “Dale provides reliable and objective information regarding what might or might not affect our business initiatives. He has a high level of integrity — he has been first-rate in following up on issues.”

“Dale is extremely knowledgeable in his field,” said the assistant general counsel of a cruise line. “Whenever we have questions, he has answers.”

Sharing a Vast Wealth of Knowledge

Karin Landry, CEBS, ACI, CLTC, GBA
Managing Partner
Spring Consulting, Boston

Karin Landry worked with the Labor Department last year to get clients’ ERISA-prohibited transaction exemptions (PTE) approved and re-establish the expedited process for securing a PTE.

Additionally, Landry oversaw a comprehensive research project focused on the evolution of each benefit captive and the lessons learned by the employers as they went through the process, implementation and maturity of the captive.

Landry subsequently penned a white paper about the results and gave a number of speeches globally about her findings. The project demonstrates to employers that captive funding of ERISA-covered benefits is more attainable than they may have thought.

Last year, Landry also authored a comprehensive chapter on employee benefit funding for the American Bar Association for its upcoming member resource on captives, as well as a “Captives 101” book and other white papers covering self-funding risk, medical stop loss in captives, captives for mid-sized businesses and cell captives.

Landry is a professor of employee benefits and a member of the finance committee for International Center for Captive Insurance Education at the University of Vermont.

“Karin Landry and her team have provided superior service to me and my company,” said the manager of risk financing at a business travel and meeting management firm. “Karin is an expert in her field and her expertise proved vital to the success of our insurance program.”

From Complicated to Mission Accomplished

Barbara Ludwig
Managing Director
Crystal & Company, New York

One of Barbara Ludwig’s clients was merging with a large national company with a different health care program.

The client had one consumer-directed plan with a health reimbursement plan, with high employee participation and salary-based contributions. The national company had five medical plans, including a CDHP/HSA with almost no participation, and various contribution strategies. Ludwig and her team helped restructure contributions and the plan was simplified on a national level as a dual-option program, which included a CDHP/HSA — resulting in more than $400,000 in savings for the client.

For a private equity client, Ludwig and her team were tasked with setting up a benefits package for a company the firm was acquiring — without any claims information, just a census. She was forbidden from communicating with the seller’s employees until after the close of the deal, the day before benefits had to take effect.

Ludwig partnered with the PE firm and seller to gain an understanding of the employee population and factors that could affect the program and coverage. Ultimately, she was able to secure a comprehensive benefits program that met the client’s financial objectives.

“She goes above and beyond, getting back to me with follow-up on total business requirements, even though she doesn’t have to,” said a director of a medical management company. “She has excellent rapport with her clients and she does her job well. She’s got great initiative, great expertise and ideas — she has saved our company a lot of money.”

Pioneering Exceptional Savings

Dan McFall, FSA, MAAA
Aon, Lincolnshire, Ill.

Dan McFall invented the “spot rate” method for pension and retiree medical accounting, which gives a more precise measure of interest and service costs by applying the specific spot discount rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows.

The SEC confirmed the use of the spot rate method for companies that use a yield curve to select their traditional discount rates assumption, and companies are now seeing roughly a 15 percent to 20 percent reduction in their interest and service costs. For some large organizations, 2016 expense reduction is in the tens of millions or even hundreds of millions of dollars.


“Adoption of the new methodology resulted in a savings to our P&L in excess of $2 million in the year of adoption, and it will continue to yield annual savings for us on an ongoing basis as well,” said one client’s vice president of internal audit.

“Two words that describe Dan are ‘extraordinarily innovative,’ ” said James Beckert, executive director, pensions and benefits, at Verizon Communications. “Dan has multiple clients in different industries but remains an expert in mine, keeping abreast of changes in law, politics, accounting and, of course, actuarial sciences that could impact my company.”

“Dan helps us identify opportunities, regulatory changes, and provides clear counsel on changing industry trends,” said an accounting manager at an equipment manufacturing company. “We view Dan as a great partner.”

Keeping Clients’ Best Interests at Heart

Carol Morgan
Area Vice President
Arthur J. Gallagher, Springfield, Mo.

Carol Morgan co-administers the Missouri Educators’ Trust, a self-insured employee benefits trust for participating Missouri school districts. Eighty school districts are trust members, 11 of which were acquired in 2016. While many Missouri school districts have seen large, even double-digit, medical renewal increases in recent years, the trust saw only a 1.3 percent medical renewal increase for 2015-2016, no increase for 2016-2017, and boasts roughly $15 million in reserves.

“She is a retired educator, so she has a better understanding of our organization,” said Phil Cook, superintendent of Carl Junction R-I School District. “We formed a trust in the state of Missouri and she has been the broker who has put that thing together.

“She is so thorough and if you have questions, she is going to get back to you quickly with answers. She is one go-getter, and very approachable in this area.”

Added Michael Mason, superintendent of the Reeds Spring R-IV School District: “Carol Morgan always has the client’s best interests at heart. For her (and co-administrator Doug Jenkins) it’s not about how much money they can make by trying to push products that aren’t necessary.”

“She’s my go-to person whenever I have a potential claim or need to add a client,” said Roger Barnes, superintendent of the Chillicothe R-II School District. “She’s very responsive — her level of customer service is exceptional.”

Delivering a Holistic Approach to Success

Jim Patton
Area Vice President, Western PA
Arthur J. Gallagher, Pittsburgh

To get NFP Broadcasting’s medical plan renewal increase from 35 percent to 10 percent, Jim Patton collaborated with the carrier to find cost savings, such as allowing infusion therapy to be administered at home. He also negotiated discounts for using facilities other than hospitals for imaging, diagnostics and lab work.

Patton convinced NFP to invest in wellness, and also recommended a spousal exclusion rule. Moreover, employees who completed wellness initiatives and were tobacco-free were able to get a plan equal to what they paid in 2016.

“Jim has earned the trust of our senior leadership team by delivering accurate cost projections within our defined budget and leveraging his book of business and relationships with the carriers to get us the best deals possible and competitive benefit offerings for our employees,” said Lynda Wilkes, NEP’s senior vice president, human resources.

“Not only does Jim have the executive presence and perspective, but he is also able to work effectively with my team and has a great relationship with one of the largest health insurers in the Western Pennsylvania market — which allows him to be effective in negotiations,” said Patrick Rooney, chief financial officer at Net Health.

“Jim stressed that our leadership should be 100 percent behind health and wellness and all of the initiatives done with our vendors and partners,” said Brian Llewellyn, director of human resources at Concordia Lutheran Ministries. “By improving these relationships, it’s helped to negotiate better costs and concessions.”

A Win-Win for Clients and Employees Alike

Robert Petcove
Area Vice President
Arthur J. Gallagher, Mount Laurel, N.J.

Cross Media Works’ fully insured medical plan was facing an 18.5 percent increase for 2016, at the same time the company was tasked with bringing together different benefit programs and contribution philosophies after acquiring another firm.

Robert Petcove and his team recommended a self-funded solution and an alignment of the medical plan programs. The West Coast operation used nine plan designs, while the East Coast operation had one — and neither had a high-deductible health plan. The company chose two plan options with lowered employer contributions: a PPO and an HDHP with a health reimbursement account.

Petcove and his team also helped the company implement vision, dental, group life, disability and telemedicine. Cross Media is now working on a wellness strategy that supports employee physical health, financial health, career health and community health.

The company is projecting up to 10 percent in premium savings for the year, and even more in 2017.

“Rob has saved my company a tremendous amount of money,” said CFO Jonathan Batt. “The company can now control the rising costs of health care to its employees by passing some of those savings back to them.”

“We get nothing less than 24/7 deliverables from Robert,” said Charles Sidner, vice president, corporate benefits, at Penske Automotive Group Inc. “He and his team have not let us down and they are a pleasure to work with.”

Beating the Odds

Courtney Touw, CEBS
Executive Vice President of Sales
Alliant, Seattle

The Anchorage School District’s load for health care is roughly $19,000 annually, which exceeds the income of many employees.

Courtney Touw and his team have defied the odds and held ASD’s medical spend to below 4.5 percent, a third of Alaska’s average of roughly 13.5 percent.

Central to this success is the creation of a no-cost primary care network, which will open in 2017, with convenient locations, same-day or next-day appointments, health coaching and telemedicine. Touw and his team also created health care referral networks to encourage and pay for travel to the lower 48 states, where procedures are one-third the cost with significantly higher-quality results.

As a result of the team’s efforts, delivery of primary and preventive care increased 37 percent, employee out-of-pocket costs fell 20 percent and renewals were down 5.5 percent.

“It’s been a pleasure to work with him,” said Mike Dinges, the district’s executive director of contract administration.

“Courtney and his team provide superior customer service,” said Ron McFadden, chief financial officer of Zones Inc.

“He helped us navigate the Affordable Care Act and has done so deftly. He worked with us on plan design to reduce costs without impacting the quality or integrity of the benefit offerings to our team members. He provides solutions and constantly introduces innovative ideas to drive down costs.”


Richard Carr
Senior Vice President
AssuredPartners NL, Richmond, KY

Cecille Feliciano
Managing Director
Crystal & Company, Los Angeles

Michael Menerey
Senior Vice President
Alliant Insurance Services, Inc., Los Angeles


Jeff Ries
Area Vice President
Arthur J. Gallagher & Co., Charlotte, NC

Curt Young
Senior Director Defined Contribution
Aon, Charlotte, NC

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]