2017 Power Broker

Entertainment

Setting the Bar for Brokers

Seth Cohen, ARM, CPCU
Vice President
HUB, Encino, Calif.

No project is too challenging for Seth Cohen and his team to insure, as his clients can attest to.

“One of our clients was producing the ‘Heaven Sent’ jump, in which Luke Aikins jumped out of a plane at 25,000 feet without a parachute or a wing suit. The only thing catching him was a net the size of a football field,” said Marcia Jacobson, president, The Jacobson Group.

“We were not covering Luke, but cameramen who were perched on a ledge on the side of a mountain and sound guys located on the ground. There was concern for their safety, and it was a potential workers’ comp nightmare. Seth, as usual, was able to make the coverage work for our client and the jump went off without a hitch.”

Another client, the producer of a television series, described how Cohen worked through ongoing negotiations with insurers after an injury to an actor caused setbacks in the schedule. Coverage had to be adjusted last-minute, and Cohen figured out the most cost-effective way to make the changes and get all of the necessary coverage in place.

“He’s set the bar for other brokers I work with as well. And those other brokers often don’t meet the expectations that I have because of Seth,” the producer said.
Casey Spira, executive in charge, Irwin Entertainment, said the time and care that Cohen and his team take with each client is not commonly found.

“They’re available 24/7, and that’s not something you can get with everyone,” Spira said.

Minimizing Risk to Enable Growth

John Galanis, ARM
Account Executive
Aon, New York

John Galanis spent time in both the Los Angeles and the New York offices of Aon subsidiary Albert G. Ruben Insurance Services. He’s worked on everything from television and film to magazine publishing and advertising. As a result, he can create solutions best suited to each unique scenario that arises.

Christine Busch, senior risk manager for the Hearst Corp., said, “I have thrown multiple projects at him over the past year and he is always quick to respond, quick to provide quotes, and great with explaining, following up, and getting the job done. We have had odd situations come up that have involved unusual locations, stunts or race cars, and nothing seems to faze John. He listens and then goes out to the market to find creative solutions.”

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“It’s a very last-minute, seat-of-the-pants industry,” said Nancy Perkins, director, insurance risk management at AOL, which started to create more original content in-house in 2016. “John and his team worked with me as our program grew from a small package policy to more of a production program that a larger size company would need.”

Similarly, Danielle Zubriksi, director of business affairs for advertising agency 22Squared, said, “John’s knowledge and willingness to talk me through insurance concerns has been key to our growth. He has been instrumental in helping my agency — a small, independent shop — institute production wrap-up policies that were previously only available to holding company agencies.”

A True Client Advocate

Robert Jellen
Managing Director
HUB, Encino, Calif.

For a recent movie production, HUB’s Robert Jellen recognized that the mere threat of bad weather could halt filming for days at a time, so he arranged for a policy enhancement that covered delays in production due to a threat of damage, even if no physical damage was sustained.

The enhancement proved critical. The movie lost production time due to threat of lightning on 27 days, resulting in a claim in excess of $1 million.

For Steve Burkow, a partner with Ziffren Brittenham LLP, Jellen came through with a life insurance policy that helped to seal an endorsement deal.

“We were working with an advertiser that wanted life insurance for the client, but was concerned about privacy. Bob created a structure under which the client could take over the policy on favorable terms. He does this consistently — advocates for the client to find a solution that works for everyone and either adds value or saves costs.”

Peter Oillataguerre, executive in charge of production for MGM Studios, said Jellen will answer a phone call at any time of day.

“We’ve had more than a few conversations at extremely inappropriate hours and he has always accommodated me,” he said.

“His knowledge of the industry is unparalleled. I’ve been working in this industry for 20 years and have had the pleasure of working with several different brokers, and Bob has more industry knowledge than anyone I’ve come across.”

Keeping Coverage on Pace with Production

Daniel R’bibo, ARM
Area Senior Vice President
Arthur J. Gallagher, Glendale, Calif.

Daniel R’bibo can conjure up innovative solutions in no time flat.

“As a production company, things are always changing. We don’t need him once a year for renewal; we need his services 50 times a year,” said Gretchen Stockdale, COO and general counsel for Pilgrim Media Group. “It’s important for him to really know our business and form relationships in the industry.”

“Daniel knows all the key players and is aware of all the different approaches that we need to take on each project,” said Ellen Schwartz, head of production at Black Label Media.

The insurance needs of each project are highly dependent on the actors involved and the production locations, and schedules are always subject to change.

“He was amazing in helping us come up with creative solutions for obtaining insurance on a movie with an actor who was also committed to another project at the time,” which made his travel and schedule hectic and presented coverage challenges, Schwartz said.

R’bibo sometimes acts as an educator to other brokers. Stockdale described one project in which a co-producing company was receiving inaccurate information from their broker, and R’bibo stepped in to get everyone on the same page and move the project forward.

On another show involving more than two dozen stunts, R’bibo proactively involved the loss control team and created a streamlined process for submitting information on each stunt first to loss control and then to the carrier, which expedited clearance of the stunts and made the carrier more comfortable providing coverage.

Behind the Scenes of the Big Game

Amy Walters, ARM
Senior Vice President
Marsh, San Francisco

Amy Walters knows that insuring a high-profile event like the Super Bowl means planning for every contingency and then some.

John Mitchell, COO at Future Fires and a member of the Super Bowl 50 Host Committee in San Francisco, said, “Amy and her team helped the Host Committee understand the risks involved in producing an event that saw more than a million visitors in 9 days. It was also taking place right around a number of unrelated national and international security incidents that made us want to make sure we were totally prepared.”

Danielle DeLancey, chief of staff for the San Francisco Super Bowl 50 Host Committee, also cited the challenges in creating “Super Bowl City” — a free-to-the-public, open access area in downtown San Francisco created to celebrate the big game.

“Insurers were either declining coverage or offering quotes beyond the budget,” she said. “Amy and her team worked tirelessly over the holiday season with their underwriters across the globe to secure coverage for our events. The result was a successful, safe event.”

A host committee member for a different Super Bowl echoed Mitchell’s and DeLancey’s sentiments. In need of event cancellation insurance, he turned to Walters to get carriers, the bank requiring the insurance, and a state reimbursement program on the same page.

“Amy and her team negotiated unique terms, communicated to underwriters the uniqueness of our event and our funding, and got insurance bound without delaying our loan closing,” he said.

Blazing His Own Trail

Paul Jones
Director
Aon, Sherman Oaks, Calif.

A production company client of Paul Jones was concerned that it would not receive a sizable tax credit it relied on to help fund its budget. Jones and his team with Aon subsidiary Albert G. Ruben Insurance Services set out to build a product that insured 85 percent of the multimillion dollar credit if the state couldn’t pay.

While difficult to bring together — the policy required several carriers to get on board even after a few rejections —the new product removed a lot of guesswork over the final budget and provided much needed peace of mind.

Kevin Drozdowski, vice president, treasury and risk management, AMC Networks, also relies on Jones for more than standard production coverage.

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“In addition to covering our production needs, he also places all of our cyber and events coverage. If I could use him for all of my insurance needs, I would. He’s the best broker I’ve worked with and I’ve worked with all the major brokerage houses.

“On a scale of one to 10, I’d rate his customer service a 15 and his industry knowledge a 20,” said the risk manager of another major production company. “He comes up with out-of-the-box solutions — not the expected standard policy — to handle complex problems.”

Kumi Maemura, director, production, BBC Worldwide Productions, also lauded Jones for his availability and quick responses, as well as his ability to put himself in his clients’ shoes.

“He brings creative ways to make sure we have the coverage we need for the exposure while being conscious of what we want to get on camera.”

Finalists:

Lorrie McNaught
Senior Vice President, Aon/Albert G. Ruben Insurance Services
Sherman Oaks, Calif.

George Walden
Resident Managing Director, Aon/ Albert G. Ruben Insurance Services
New York

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

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Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

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We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

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Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

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Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

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More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]