2018 Power Broker

Fine Arts

The Right Words

Kristina Marcigliano
Senior Account Executive
Risk Strategies/DeWitt Stern, New York

A great broker is not only well-versed in finding the right insurance but can also eloquently explain various coverages and solutions to clients outside the field — no easy task, to be sure.

Such is the case of Kristina Marcigliano.

“Kristina makes the complicated world of insurance easy to understand when she explains it to us lay people,” said Juan Angulo, controller, Bunny Williams Inc., an interior design company.

Earlier this year, Marcigliano sat down with Angulo to review the company’s insurance policies. She pointed out where they had gaps, where they could increase limits and answered questions as they arose.

Gerald Peters Gallery’s registrar Lindsey Lutz, who usually handles the gallery’s renewal process, was out of the office during renewal time this year. One of her colleagues stepped in — but she didn’t typically work with insurance and the jargon that comes with it.

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“Kristina walked my colleague through it and was extremely helpful and informative during the entire process,” Lutz said.

In another instance, another one of Marcigliano’s clients decided to begin a site renovation, turning its studio area into a place for art exhibitions.

“Kristina is there to see if there are any flags that come up that might impact our fine arts insurance,” said Susan Reynolds, director, The Milton Resnick and Pat Passlof Foundation. Her guidance provides peace of mind in the high-value world of fine art.

A Good Teacher Keeps Learning

Mary Pontillo
Senior Vice President
Risk Strategies/DeWitt Stern, Charlottesville, Va.

Mary Pontillo, DeWitt Stern’s national fine art practice leader, places value in educating her clients on the different types of insurance coverages available to them.

The Joan Mitchell Foundation was debating whether it should change its collection’s storage to a different facility. Pontillo listed the pros and cons of the possible move and was “proactive around brainstorming,” said Christa Blatchford, the foundation’s CEO.

Pontillo also took the time to build a loan and insurance rubric for the foundation, keeping the registrar, executive director, board members and lawyers on the same page during the art lending process.

“It makes the insurance conversation front-end instead of after the fact,” said Blatchford.

And like all good teachers, Pontillo never stops learning: “I was with her at a registrars’ conference,” said Thomas Burns, chief operating officer, The Fortress, which provides storage and transportation for fine art in Boston, Miami and New York. “Mary went to every possible session she could to learn as much as she could.”

One artist who was a client of The Fortress passed away last year, and his children needed to store his work. Burns planned the entire move, but the day before, he found that the family didn’t have insurance for transportation. He called Pontillo.

“Mary didn’t worry about what they didn’t do or what they didn’t have; she focused on the positives,” got the right insurance and had the art transported as planned, he said.

A Passion for Art

Adrienne Reid, CIC
Vice President
Aon/Huntington T. Block, Houston

“Adrienne Reid has a genuine interest in the pieces we have,” said Anne Breckenridge Barrett, director of collections and exhibitions, Museum of Contemporary Art Chicago.

It’s this dedication that convinced the museum to switch to Reid from their previous broker.

And this year, it proved to be the right choice. The museum held a 50-year anniversary celebration while also hosting a temporary Takashi Murakami exhibition at the same time. They had on display some of their most valuable pieces, including an original Andy Warhol.

To have both exhibitions under one roof, the museum needed to increase its policy limits and temporary policy limits. Reid got to work and kept the museum well under budget, negotiating lower premium rates with the underwriter.

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Ricardo Mazal, artist and owner of Ricardo Mazal Inc., had an exhibit in Mexico City. To cross the border, customs agents had to inspect the truck first, which meant they would need to handle the art and repackage it.

“Because of the logistics of the customs agents, it was a short time to work,” Mazal said.

Altogether, $1 million worth of paintings were handled and transported over the border. Few underwriters wanted to cover this high-risk load as it traveled through Mexico.

But Reid persevered.

“Adrienne [was] incredibly helpful; [she] was 24/7. At the end, she was able to have everything in place for us. I can count on her wherever I am with whatever we have.”

Queen of Conservation

Ever Song
Account Executive
Aon/Huntington T. Block, Washington, D.C

To prevent artwork from showing signs of the wear-and-tear of age, art conservationists take the lead in preserving and maintaining these valuable relics from the past.

And behind these conservators is Ever Song.

“I have been working with Ever for many years and couldn’t run my business without her,” said Leslie Gat, president and founder, the Art Conservation Group/Ransick Gat Fine Art Services Inc.

In 2016, she had several large projects moving in and out of the studio, which needed anywhere from $1 million to $3 million in waiver or policy coverage at different moments.

“Ever got me to bump up to half a million dollars in cost of coverage,” said Gat. “She lessened the stress and the cost didn’t go up as much as I thought it would.”

Deborah La Camera and Lorraine Bigrigg, both partners and senior conservators at Studio TKM Associates Inc., run a paper conservation studio where clients often need art procured and stored on the same day.

For instance, a collector of high-value drawings had a water issue in their storage facility and needed the art picked up and brought to the studio immediately. La Camera and Bigrigg called Song, who had to get the coverage in place while the art was transferred and stored at the studio.

“Ever streamlined the process and writes each contract to custom fit that art’s needs as well, showing clients their coverage is custom to their needs,” said La Camera.

Front and Center

Emily Weiss
Senior Account Executive
Risk Strategies/DeWitt Stern, New York

Emily Weiss likes the hands-on approach to insuring art.

When one of her clients needed to store artwork in its basement, Weiss visited with an underwriter to assess the area and any risks it posed to the safety of the pieces, and to come up with some risk mitigation strategies.

The policy in place had a basement flood exclusion, so Weiss suggested where to add water sensors and advised the client how to respond to a flood event. She also got them flood insurance, going above and beyond to secure them additional coverages for tidal waves or drain backups.

After Superstorm Sandy hit the East Coast, new insurance regulations regarding flood, wind and storm surge were implemented. Weiss’s client, Vito Schnabel Projects, wanted to review these regulations and work towards finding the best plan possible for their needs. Weiss took the reins.

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“Emily’s consultations have expanded my understanding of insurance procedures and requirements, which in turn has significantly improved our company’s coverage,” said Jenna Schneider, registrar.

She noted that, as she works with so many vendors daily, “Emily’s advice and prompt turnaround of information have allowed me to provide the best coverage to our vendors.”

“Everything she does is hands on,” said Edward Mishan, a private art dealer who sells around the world. “She’s efficient. She knows all the details.”

Problem Solver

Casey Wigglesworth
Account Executive
Aon/Huntington T. Block, Washington, D.C

The last call a museum registrar wants to receive is that a drunk driver ran into an outdoor sculpture.

Leah Reeder, registrar, Fort Wayne Museum of Art, unfortunately received that call, learning that a truck was wedged underneath an outdoor piece. Emergency officials were able to pull the truck out, but the sculpture collapsed.

Casey Wigglesworth was immediately brought on board.

“The sculpture was dismantled and sent to California for a little over a year for restoration,” said Reeder. “Casey took the time to work with me to get the piece back to us.”
Now the large sculpture sits in its Indiana home once again.

Another client, Michelle Moskal, assistant registrar, Museum of the American Revolution, detailed a recent move of facilities.

“We couldn’t transport everything all at once,” said Moskal. Their insurance covered up to a certain amount during transport, so Wigglesworth worked out what could be sent via truck together.

“We’re in the midst of an active construction site while remaining operational,” said Mark Ryan, assistant director for collections & exhibitions, the Mildred Lane Kemper Art Museum.

He said Wigglesworth provided critical insight into how to store art and keep staff and visitors safe during construction, communicating with the university and museum partners and providing information to their underwriters while the museum remained in operation.

Finalist:

Blair Wunderlich
Account Executive
Aon/Huntington T. Block
Washington, D.C.

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 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.

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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]