Risk Manager Focus

Longtime Risk Manager Janice Ochenkowski Talks to Kevin Maloney of Allied World

Those wishing to move up the risk management ranks need to make a keen study of their business, she said.
By: | August 16, 2018 • 9 min read

As Janice Ochenkowski heads into retirement after 37 years running the risk management team at Jones Lang LaSalle, her risk management partners at Allied World wanted to congratulate her and seek to gain some additional wisdom and insight from an industry leader.   

Janice served most recently as the International Director of Global Risk Management at Jones Lang LaSalle, the global commercial real estate and investment company.  Headquartered in Chicago, Janice and her team helped manage risk for 70,000-plus employees operating in 80 countries across the globe.

Janice is a regular as an expert panelist at several of the most prestigious real estate insurance industry forums and conferences each year. She is a previous recipient of the Harry & Dorothy Goodell Award and serves as a co-chair of the Board of Trustees at Cardinal Stritch University.

Ms. Ochenkowski was interviewed for this piece by Kevin Maloney, a Senior Vice President, Real Estate and Financial Institutions Practice Leader for Allied World.

Janice, in 37 years in risk management at Jones Lang LaSalle, what are some of the biggest changes that you have seen in the field of risk management?

When I began in risk management at JLL in 1980, the discipline of risk management was evolving from an insurance purchasing department to risk assessment and management. As that evolution continued, the role of risk management in corporations and institutions evolved too, so that at its best, risk management is a valued resource within the organization.

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Insurance companies and brokers have changed too, as the discipline changed. Each is more willing to work with risk managers in a collaborative fashion. When I started in the industry, most brokers were reluctant to have risk managers meet with underwriters, and underwriters did not welcome direct contact by risk managers. Today there is far more collaboration and transparency within the industry with brokers, insurers and risk managers forming partnerships and approaching issues as a team, rather than as separate entities.

These are only a couple of examples, but risk management has evolved dramatically in many ways and those changes have made their organizations and the insurance industry better.

You have been out in front leading the industry on the importance of ERM – Enterprise Risk Management.  How important is ERM? What role do you see ERM playing in major corporations going forward, given Sarbanes Oxley and the ongoing focus on corporate responsibility at all levels? 

ERM is a critical component of any risk management program. At its core, ERM is simply a holistic view of the risks of a company. The risk assessment includes identifying the upside and downside of an issue and a review of options regarding the best way to manage the risk or opportunity.  The way that an organization does that assessment and the conclusions they draw will vary from entity to entity.

At JLL, ERM is done by the Global Operating Board because of the assumption that the stakeholders that comprised the group could together assess the risks and implement the best management technique. Our view was that no one individual had all the expertise necessary to properly analyze and evaluate a risk or opportunity.

The model worked well within the collaborative and somewhat entrepreneurial environment of JLL. There are other models used successfully by organizations; the key is that the structure and process should fit into the organization’s operational and management style.

You may be a junior analyst or a claim administrator, but you should understand what your organization does, how it makes money or what its service objectives are, who its major competitors are, and the emerging issues that will or could impact it.

What role has technology played in bettering our industry and helping to take it to the next level?  What changes have you seen in that regard? Where do you see it going in the future?

Technology has played a huge role in all industries including the risk managers’ organizations and the insurance industry. Those changes have dramatically affected the way in which we conduct business.

For the insurance industry and the insurance process, including policy purchase and claims, communication is streamlined and the information flow is more efficient. Each part of the insurance purchase process has improved significantly with technology and as new technologies continue to be developed, that efficiency and effectiveness can only improve.

The administrative aspects of the insurance industry have needed the most innovation, as they traditionally have been tedious and costly. The inherent inefficiency in their operation bog down the operational efficiency of the clients the industry serves.

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Issuing insurance policies, certificates of insurance, loss runs, claim data, allocations and invoicing — each is a critical component that can be administratively burdensome, yet critically important to the smooth operation of a plant, construction site or real estate transaction.

There have been dramatic improvements in the processes since I began. But frankly, further improvement is needed.

Data management is the next frontier — all insurers and brokers are working on strategies to use data to make their operations more efficient and to better understand their markets and clients.

There are, of course, parallels to the risk managers’ organizations.  Efficient data collection — and, more importantly, analysis — is becoming more readily available, thus enhancing the information flow to insurers. Improved communication streams allow for the effective transmission of claim and loss information.

What role has diversity in the workplace played in bettering our industry and helping to take it to the next level? What changes have you seen in that regard? Where do you see it going in the future?

Well, in 1980 I was generally one of the only women in the room. Thankfully that’s changed. However, we haven’t seen the same speed of improvement in racial and other diversity. I can only hope that at some time in the hopefully near future, organizations will hire, retain and promote individuals based solely on merit — and questions regarding diversity and inclusion will be viewed as “old-fashioned.”

What do you see as the biggest challenges to our industry at present and going forward?

The biggest challenge for the insurance industry is innovation. The insurance industry needs to innovate in the same way that its clients are innovating. Insurers and brokers need to forget about how “it’s always been done” and think about how advances in technology can be used to identify, mitigate and create solutions for their clients.

Hearing about disruption to existing systems and processes is almost a cliché today, but it is a reality. Unless the insurance industry adapts to new processes and systems, it will be challenged to remain viable and profitable.

What advice would you give a young professional just starting out in the field of risk management?      

I’ll begin by saying that this is a fantastic time to be starting in risk management! Risk management is a mature discipline and its necessity and contributions are well established within organizations. However, once you begin in the field, there are a couple of critical things to keep in mind — no matter what level or position you hold.

It’s also critical to be flexible when working with internal groups. Risk managers too often take a rigid stance on risk rather than a strategic or operational view. Be the problem solver within your organization.

The first is to always know and understand the business of your business, whether it’s a corporation, public entity or government.

You may be a junior analyst or a claim administrator, but you should understand what your organization does, how it makes money or what its service objectives are, who its major competitors are, and the emerging issues that will or could impact it.

Kevin Maloney, Senior Vice President, Real Estate and Financial Institutions Practice Leader for Allied World

Also, while your main responsibility may be to buy insurance, within your organization you should not align yourself as part of the insurance industry; you are part of your organization’s business.

However, you do have to understand the insurance products and services that are suited for your risks with all their nuances — only in that way can you be a discriminating insurance buyer.

I’ve always viewed the role as a kind of translator – explaining my business operations and risks to the insurers and brokers and then translating the insurance jargon back to our business teams using their language.

It’s also critical to be flexible when working with internal groups. Risk managers too often take a rigid stance on risk rather than a strategic or operational view. Be the problem solver within your organization.

Understand the risks, but also understand that taking that risk can have significant upside potential for your organization. Help them to find a way to take the risk while not risking it all. If you can do that, you’ll be seen as a valued team player and the person that business groups will want to talk to when they’re faced with a problem.

If you view your role as a “gatekeeper” against risk, business groups won’t bring problems to you — they’ll tell you what they’ve done after the fact.

Become involved in your organization’s industry groups and with RIMS. I’ve participated in various real estate associations and risk forums.

For me personally, RIMS was a fantastic opportunity to learn leadership and management skills without directly sabotaging my career. Throughout my career, I developed relationships with the risk managers of our competitors and others in the real estate and financial services industry, as well as with our clients, vendors and contractors.

RIMS offers plenty of opportunities to meet senior insurance industry leaders. Take those opportunities — because at JLL, when I could offer my contacts as resources to management or business groups when they needed insights or information, they viewed me as a key resource, and I became an important part of the business team.

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None of this is easy — none of it is done quickly — it’s the work of a career. But it’s extremely rewarding and can help you to move forward in your career.

Finally, I do have to speak about ethics and integrity, which I view as critical to any career. A risk manager has the responsibility to be honest with their brokers, underwriters and claim professionals. You may get away with providing bad underwriting data, failing to fully report, and omitting key claim facts for a while, but not for long.

Dishonesty when dealing with peers, clients, vendors and contractors can have long-term repercussions for your career and your organization.  The world of insurance and risk management is a relatively small one and today’s broker is tomorrow’s underwriter and next month’s client.  Your reputations will move with that person and getting clear of a bad view is a very difficult task.

Concluding thoughts?

If you asked me to look into a crystal ball 37 years ago, I could never have imagined the fantastic opportunities and experiences I’ve enjoyed as JLL’s risk manager.

At JLL I traveled globally, met our clients and JLL colleagues and was promoted to the highest level within the company. Serving as RIMS President, I testified to the U.S. Congress and spoke at forums throughout the world. I have to admit, 37 years ago even my dreams weren’t that grand.

But throughout those years and experiences, I’ve been fortunate to work with and develop friendships with amazing people and it’s those friendships and experiences whose memories will be with me through my retirement.  I’m so very grateful for the opportunities that my career has provided. &

Kevin A. Maloney joined Allied World in 2012 as Senior Vice President, Real Estate and Financial Institutions Practice Leader. He also serves as a Regional Executive within Excess Casualty responsible for helping the regional offices to continue to achieve sustained profitable growth. He can be reached at [email protected]

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]