2016 Power Broker

Employee Benefits

Extraordinary Assistance

Kristy Arciszewski, CEBS Area Vice President Arthur J. Gallagher, St. Louis

Kristy Arciszewski, CEBS
Area Vice President
Arthur J. Gallagher, St. Louis

One of Kristy Arciszewski’s clients includes a large union that rejected a proposed Post-65 Medicare exchange solution for 2015. Arciszewski then developed a strategy that involved evaluating a consortium of local vendors that could meet the needs of this client and the union.

In order for this project to be successful, Arciszewski developed an understanding of the client’s culture and how its values should align with its benefits program. She worked with the director of labor relations and the union president to develop the best possible solution and communicate it to the members.

Arciszewski was new to both the client and Gallagher, and had to “hit the ground running” at full speed to meet necessary deadlines. Her Post-65 Medicare exchange solution exceeded the client’s expectations.


“We made the decision to move from a broker we had for 15 years because Kristy Arciszewski presented a solid knowledge of our company background, culture and benefit needs,” said Dave Toben, director of benefits at Bi-State Development Agency.

“She provided a solid implementation plan and exceeded all expectations in transitioning 15 years of history and work product seamlessly while jumping into key projects providing innovative solutions that helped us manage multimillion dollar issues on our balance sheet.”

“Kristy Arciszewski is an outstanding business partner and extraordinary to work with,” said Kim Nowell, chief people officer at Ingram Marine Group.

A True Partner

Kelly Bonanno Area Executive Vice President Arthur J. Gallagher, Rochester, N.Y.

Kelly Bonanno
Area Executive Vice President
Arthur J. Gallagher, Rochester, N.Y.

Kelly Bonanno was instrumental in crafting a creative voluntary benefits solution for a large mid-Atlantic hospital group that was merging its network and employee benefits plans. While this change eventually made it easier to manage the plan, there was a short-term problem: As of January the following year, roughly 2,400 employees would lose their current long-term sick care benefit and not be able to replace it with similar coverage until the following April.

Working with Bonanno and the client’s other Gallagher consultants, the hospital group decided to introduce voluntary benefits to bridge the gap in coverage for the affected employees.

The solution included introducing a voluntary short-term disability plan, negotiating with the carrier to waive the pre-existing condition clause, educating the staff on the new program on short notice, and providing staff with access to a call center to answer their questions.

As a result, 98 percent of the employees were educated on the new plan offering in three weeks, and 65 percent of employees who were previously covered elected the new voluntary benefits, mitigating their risk of exposure during the gap period. Moreover, there was no pre-existing condition requirement on the competitively priced plan.

“Kelly Bonanno is brilliant, hard-working, very responsive and really, a partner not just a vendor,” said a grocery store chain client.

Inspiring Transformation

Christine Brown Senior Consultant, Public Entity Team Leader Arthur J. Gallagher, Radnor, Pa.

Christine Brown
Senior Consultant, Public Entity Team Leader
Arthur J. Gallagher, Radnor, Pa.

Christine Brown managed an affiliation that consisted of 32 municipalities and authorities that were fully insured under an affiliation rating methodology that became unsustainable due to health care reform mandates.

Brown developed a strategy to partner with the incumbent carrier and the current affiliated groups to transform the fully insured affiliation into a self-insured trust.

After Brown received buy-in from all 32 entities, the affiliation accessed an existing trust that Brown had been instrumental in building for local school districts, leveraging the current infrastructure to roll out a program that maintained benefits and managed costs.

Each municipal entity’s renewal decreased by approximately 7 percent; all 32 entities maintained their current level of benefits with no plan changes. The trust’s first-year financial results achieved a projected trust reserve of two months of claims and a renewal adjustment of less than 5 percent.


“Christine Brown is an excellent broker for us,” said Joseph Driscoll, chairman of the Delaware County Public Schools Health Care Trust. “Talk about saving money — the trust avoided approximately $35 million over the past two years, versus being fully insured.”

“The service provided by Christine Brown and her staff is outstanding,” said Thomas J. Judge Jr., chief administrative officer of Upper Darby Township in Pennsylvania.

Creative Solutions Across the Board

Stewart Durant Area Vice President Arthur J. Gallagher, Miami

Stewart Durant
Area Vice President
Arthur J. Gallagher, Miami

Costs were skyrocketing within the Archdiocese of Miami’s self-funded medical plan, and the ability to simply change the plan design or shift costs to the employees was not acceptable to the board of directors.

Stewart Durant and his team developed a program called “Bend the Trend,” looking at a number of strategic audits of employer, employee and third-party administrator processes. The team evaluated and implemented practices and programs to reduce ever-increasing claims and administrative costs with no impact to the employees’ or dependents’ plan design.

Durant and his team were successful in reducing the trend line on base claims from more than 10 percent to near zero over a two-year period.

For 2016, Durant is working with the archdiocese to add an onsite claims/service advocate provided by and paid for by the carrier/TPA; implement a new pharmacy benefit process to handle higher-cost specialty drugs; and enhance communication to help employees better understand how to use their plans, creating a true culture of wellness.

“Stewart Durant listens to the issues and finds creative solutions,” said Susan Waddell, director of the archdiocese’s health plan.

“A lot of times it takes an act of Congress to reach brokers, but Stewart Durant is so accessible,” said Angela Pettus, benefits and operations manager at Nations Roof LLC. “It doesn’t matter what the question is, his response time is almost immediate.”

Taming the ACA

Ken Fetterman Vice President Assured Neace Lukens, Columbus, Ohio

Ken Fetterman
Vice President
Assured Neace Lukens, Columbus, Ohio

One of Ken Fetterman’s clients was concerned about its employee benefit plan meeting the employer mandate and compliance requirements of the Affordable Care Act.

When Fetterman initially met this client, no carriers were willing to take on the company due to the low participation rate of 10 to 15 percent and a 400 percent loss ratio.

Employees were stuck with a plan where they were being balance billed every time they had a claim and costs were skyrocketing.

Fetterman used Assured Neace Lukens’ compliance officer to help bring the client into compliance, including assisting with the filing of a Form 5500 Annual Return/Report of Employee Benefit Plan. He then educated employees on the proper utilization of their insurance and how to maximize their benefits while maintaining the integrity of the plan.


Fetterman also utilized Assured Neace Lukens’ health and productivity team to educate employees on how their lifestyle choices impact them and the overall group. Employee participation more than tripled and the loss ratio fell below 60 percent. He secured an ACA-compliant plan with better benefits that reduced employer cost by more than 29 percent per employee.

“Ken has been a great resource to us, especially navigating through the ACA,” said Alexa Tabak-Baugh, director of business resources at Insights Consulting.
“He and his team have gotten to know us and understand our needs as a business.”

Major Savings

Sallie Giblin Executive Vice President Lockton, La Jolla, Calif.

Sallie Giblin
Executive Vice President
Lockton, La Jolla, Calif.

Sallie Giblin began partnering with a large mortgage company based out of San Diego, which wanted to reduce its $17 million-plus employee benefits spend.
Giblin and her team were able to successfully move the client to a self-funded platform that allowed the client to access its data and opened up new strategies and solutions that were not previously available. First-year savings to the client were in excess of $1.5 million.

“Sallie Giblin is very dynamic, incredibly knowledgeable, motivated and also just extremely fun,” said Carolyn Frank, vice president of human resources at Guild Mortgage Co.

“It’s also about the delivery of the results, and at the end of the day, she is able to deliver on her word and back up her promise.”

“Sallie Giblin came out to help us with open enrollment and her support was unbelievable,” said M.G. Kristian, senior vice president of human resources at Mitchell International Inc.

“For the amount of changes we had, it ended up being a non-event. We could not have done it without her significant quality of customer service — she came in and literally saved us.”

Giblin focuses on large and middle-market clients looking for more creative ways to structure their programs. Because she is playing upmarket, her time is spent dealing with more complex risks and solutions on a daily basis.

Giblin has also recently started mentoring other women producers at Lockton.

Tenacious and Creative

Jill Goldstone Area Vice President Arthur J. Gallagher, Cherry Hill, N.J.

Jill Goldstone
Area Vice President
Arthur J. Gallagher, Cherry Hill, N.J.

When Jill Goldstone’s client, Glenmede, received feedback that employees were not satisfied with the company’s high-deductible/HSA plan and wanted the copay plan back, Goldstone suggested engaging the employees in the potential redesign or modification to the existing plan options.

First, actuarial modeling was conducted to determine new health care options and pricing. Glenmede then reintroduced a copay plan as an option to the high-deductible plan, giving employees an online interactive decision support tool that

Goldstone and her team implemented. The tool collected information about employees’ personal situations, family sizes and expected expenses, and then recommended the plan that best fit their needs.

Goldstone also recommended adding an incentive to keep employees in the high-deductible plan, and Glenmede also added supplemental critical illness and accident coverage offerings to offset costs.


As a result, only about 4 percent of the population migrated to the new copay option.

“Jill Goldstone is fantastic,” said Ann Marie Bell, director of human resources at Glenmede. “She is timely, very proactive in dealing with issues, and does a great job of finding solutions for individual employees as well as the HR team.”

“Jill is an amazing person,” said Charelle Hirsh, director, compensation and benefits at Dr. Reddy’s Laboratories Inc. “She is very creative, innovative, and down-to-earth.”

Solutions for the Costliest Challenges

Bev Gregory Senior Vice President HUB, San Diego

Bev Gregory
Senior Vice President
HUB, San Diego

A client of Bev Gregory’s had an employee with an incredibly rare genetic disorder requiring weekly life-sustaining infusion treatments — claims were in excess of $2 million a year.

Gregory coordinated a meeting with the respective stakeholders to explore options. First, the treatment modality was changed from inpatient to an outpatient facility.

The employee was actually thrilled with the outpatient location, as it was closer to both work and home. Claims costs were reduced by $1 million annually, and Gregory’s client received an initial renewal of 42 percent that was negotiated to 18.9 percent. With the midyear adjustment, the overall renewal was 9 percent.

“Bev Gregory has been the most phenomenal broker I’ve ever worked with,” said Susan Seaman, associate director, benefits and employee programs — human resources at ACADIA Pharmaceuticals Inc. “ACADIA had challenges locating a consultant for our HRIS implementation and I reached out to Bev to see if she could help. She introduced us to ihouse, a consulting business within HUB International specializing in HR and recruitment systems.

“Within four weeks we had someone from Rochester, N.Y. dedicated to our project because of Bev.”

“Bev Gregory is awesome,” said a biotech client. “She’s extremely responsive to clients’ needs and looks for innovative ways to solve problems.”

A Benefit Captives Leader

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

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

Karin Landry championed employee benefit captives as they progressed from a niche to a mainstream funding option.

For several years there was uncertainty surrounding employee benefit captives related to “prohibited transaction exemptions” (PTEs), the regulatory approval that employers need to secure from the Labor Department in order to place ERISA-covered benefits in captives.

The original expedited process (EXPRO) for securing a PTE had sunset a few years earlier and without it, employers were faced with a nine month-plus approval process rather than the 78 days the expedited process provided.

Landry spent much of the past year working with the Labor Department to get her clients’ PTEs approved, as well as to re-establish the expedited process. EXPRO 2.0 is now modeled, in part, on the work done by Landry on behalf of Intel Corp. One of the first cases to be approved this year under the new process was another Landry client, Sealed Air.


This work not only benefited her clients, but also the entire captive industry.

Landry also assumed a leadership role in employee benefit captive funding, speaking on the subject at more than 10 conferences in the past year, as well as teaching a course for the International Center for Captive Insurance Education.

She also conducts education webinars attended by hundreds of risk managers, human resource managers, brokers, captive managers and consultants.

Helping Clients Take Control

Sandy McCoy, FSA, EA Partner Aon Hewitt, Chicago

Sandy McCoy, FSA, EA
Aon Hewitt, Chicago

A client whose pension plan was 65 percent of market cap performed de-risking actions, but needed help to determine how to further reduce the size of the pension plan to be a smaller percentage of overall market cap.

The pension liabilities were outsized relative to size of business due to recent divestitures — only 15,000 employees were carrying obligations for 95,000 participants.

Sandy McCoy and her team helped the client develop a de-risking strategy that included a deferred vested lump sum window and a spinoff of the retirees into a separate plan.

The team then helped the client sell the annuities to an insurance company, allowing the client to terminate the retiree pension plan. The pension plan spinoff and plan termination was completed in six months, instead of the typical 12-month timeframe.

McCoy also worked with the client to develop a program to cap the lump sums at $1 billion, creating a communications program to ensure participants understood they might not receive the lump sum if the cap was hit. There were very few participants over the cap.

“Sandy McCoy always responds to inquiries timely and the quality of information is superior,” said Christa Kuennen, director, financial reporting and treasury services at Wellmark Blue Cross and Blue Shield.

“Sandy McCoy is great to work with,” said a retailer client. “She went above and beyond what other consultants do.”

‘Finding’ Money, Putting It to Work

Scott McDuffie, GBDS Senior Vice President Willis Towers Watson, Birmingham, Ala.

Scott McDuffie, GBDS
Senior Vice President
Willis Towers Watson, Birmingham, Ala.

A drug research nonprofit had a voluntary employees’ beneficiary association (VEBA) trust that was used to fund retiree medical benefits. Scott McDuffie found that the language in the trust documents allowed the funds to also be used for the active employees’ benefits.

McDuffie engaged his firm’s actuarial practice to analyze the impact that withdrawals would have on projected future valuations. The size of the trust is approximately $5 million, and actuaries estimated that only about $1 million would be needed to meet retiree obligations. In essence, McDuffie found “free money” for the client to utilize.

The net employer costs for the medical plan are approximately $3.5 million annually. As such, the value of the trust exceeds one full year of medical costs. This windfall provided time for McDuffie and his team to work with the client to transition to a less expensive consumer-driven model.


The client is now in the process of implementing a high-deductible health plan with a health savings account component. Due to the successes, the client asked McDuffie and his firm to take over some of the responsibilities of the retiring benefits manager.

The team produced enrollment materials to enable employees to review benefit offerings, with the goal of educating employees on consumer-driven health.

“Scott McDuffie really does a fantastic job for us,” the client said.

Consummate Professional

Andrew Savarese Managing Director Crystal & Company, New York

Andrew Savarese
Managing Director
Crystal & Company, New York

One of Andrew Savarese’s clients faced a 29 percent increase in annual premium costs for a single plan offering on medical plans. The combination of an aggressive marketing campaign, underwriting review, and program restructuring resulted in 2 percent savings below the client’s current costs.

Moreover, Savarese found that by taking advantage of the client’s foreign ownership structure, his team could implement a life insurance/disability policy that paid an annual dividend to the U.S.-based company contingent on the performance of the parent company’s international life insurance policy.

He identified an insurer that could offer a policy which would include the performance of the U.S. plan as part of the overall dividend calculation, decreasing the U.S. employer’s annual cost for coverage by 23 percent and the amount of the potential dividend increased significantly.

“Andrew provides insightful viewpoints and perspectives on insurance and risk products, first-class service — both proactive and reactive, aggressive negotiations on our behalf and competitive fees; excellent reporting and analysis; and effective liaisons with our underwriters,” said an asset management company client.

“I personally think Andrew hung the moon,” said Bethany Spurrier, director of global benefits at Stewart & Steveson LLC. “He is the consummate professional that can speak to the executives as well as rank and file employees.”





John Byers
Vice President
Aon, Franklin, Tenn.


Bryan Ward, CFA
Aon Hewitt, Lincolnshire, Ill.


Lynn Cornwall
Senior Partner
Aon Hewitt, Lincolnshire, Ill.


Jennifer Varanese
Executive Vice President
Willis Towers Watson, Columbus, Ohio


Stephen  Pasdiora
Consultant, Chicago Benefits Practice
Cottingham & Butler, Rosemont

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]