The Profession

Ray Van Eperen

Ray Van Eperen and his Kimberly-Clark team trained more than 6,000 of their colleagues in risk mitigation.
By: | February 22, 2016 • 7 min read

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R&I: What was your first job?

I delivered newspapers for the “Appleton Post-Crescent” for three years. I am an early morning person and my lifelong start in getting up early started with my newspaper delivery job. You will see me in the office many times at 4 – 4:30 a.m.

R&I: How did you come to work in risk management?

I was in Houston (with The Hartford) and my father came down for Thanksgiving and told me that Kimberly-Clark had an opening in risk management. I thought, “Why not try that?” and sure enough it turned out great. I thought it was a good transition to go from the claims arena to the world of risk.

R&I: What are some of the keys to doing risk management well?

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I tell people that you need certain skills. I call it blocking and tackling. Meaning you need to know how to manage claims and you need to know how to place coverage. No matter where we grow from a corporate perspective or a continuous improvement perspective, you still need those blocking and tackling skills. We’re doing a good job of that so I am real proud of seeing that continue on.

R&I: Where does risk management need to sharpen its game?

I think one area that we need to improve is quantifying risk appetite. Most companies are looking to determine what impact a risk could have on the business.

It is no longer just a property and casualty risk it’s an enterprise risk. It is difficult to quantify risk appetite. It’s very easy to work in ranges, we’re good at that.

We’re getting better at quantifying risk appetite, but I think it’s an opportunity for the whole industry.

R&I: How can people do a better job of quantifying risk appetite?

You need to understand your business. If you can do that, you will have a better picture over all. Bring in other people, legal, the business team, the HR team. Have that group sit and discuss risk appetite and try to move forward on quantifying it.

R&I: What resources are you using to expand your capabilities in enterprise risk management?

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A great example is our partnering with academic institutions.  At Kimberly-Clark, we partner with the University of Wisconsin, Madison.

R&I: How do you partner with the university?

I give educational presentations at least two times per year to the school of business there. Members of the university, professors and students, visit our annual risk management conference. We also bring in risk management students to spend a couple of days with the risk management department.

We’re getting better at quantifying risk appetite, but I think it’s an opportunity for the whole industry.

R&I: What’s the value of the RIMS conference for you?

I look at the risk management conferences as a great learning opportunity. At the most recent RIMS conference in New Orleans, for example, I had eight separate meetings with the CEO or president of a carrier. They allowed me to probe them on emerging risks. I love the fact that I had access to them and they’re all right there.

R&I: What emerging risks do you see?

We discussed emerging technology risks like driverless cars and drones, but as the risk manager for a manufacturer with operations around the world I think water shortages are also going to play a big part.

Another risk is social media. It just takes one person to post a video, or some other complaint about your company and it can cause you substantial reputational damage.

R&I: The reputational risks with social media are worrisome, are they not?

They really are and I need to see some strong insurance products. I am meeting next month with a carrier to look at some reputational coverage and see how that might apply.

R&I: Is there an emerging commercial risk that you think is most concerning?

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I don’t think it is emerging as much as it is problematic and I’m talking about political risk. Turn back the clock just a few years. All of a sudden Venezuela is in the news. Last year it was Russia. This year it’s Argentina. The world changes so frequently. That’s not an emerging risk but we have to determine how to manage that proactively. We have manufacturing operations in 37 countries and sell our products in more than 150.

R&I: Are there risk management tools that are very valuable to you?

I tell people the perfect tool is face-to-face collaboration. We get into the world of emails and texts, and the problem is if you don’t have the face-to-face tools, you can’t build your negotiation skill-set. You can’t read people, you don’t know how to respond to people.

As a result of the technology dependence, you see many new members of organizations not having that negotiation skill-set.

R&I: How happy are you with your carrier relationships?

I look at our carriers and our brokers and I can say we have a good rapport with them. My team members know all of our brokers, that’s obvious, and we know all of our underwriters.

I require the team to make sure that no matter if it’s a multi-year program, or a single year program, every year, at least once, you need to see that underwriter. Spend some time, tell them about where we are going, how the risks are being managed, sell the corporation.

And learn more about them. We have seen in the past, business results or senior management can change and it can have an impact on the company over all.

R&I: Is pricing the thing that’s most affected by those changes; terms or conditions?

The biggest changes and concerns are what lines they’re going to write. They might say they’re not that active in something and if they’re saying that, what they mean is they’re really not that competitive.

They really don’t want to negotiate much in the area of coverages. So you see more of a limited product. Then you go across the street and you see carrier “X” and they say I want to be in that business.

In order to leverage those differences you need to meet with the companies and understand them.

R&I: Are you optimistic about the U.S. economy or pessimistic?

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Optimistic. Kimberly-Clark’s stock price is at an all-time high. So that shows you what’s going on from a consumer perspective. But I mentioned it before. Political instability globally could impact us any day.

R&I: Do you or did you have a risk management or insurance mentor?

Every interaction is a chance to learn something. I have learned things from my executive assistant and my CEO and from everyone in between.

R&I: What in your career are you most proud of?

No question about it. The global risk management team drove a cultural change at Kimberly -Clark. We aggressively trained Kimberly-Clark employees to take smart risks. In the past four years we have educated more than 6,000 Kimberly-Clark employees live worldwide.

R&I: Your favorite movie?

“Taken” because Liam Neeson’s character and I have very similar skill-sets (laughs).

R&I: Do you have a favorite drink?

Stella Artois (the famous Belgian beer). My parents always told me work hard, play hard so when I get a break, I’ll grab a beer and relax.

R&I: You work for a global company. What’s the most interesting country you’ve visited?

The most interesting was Thailand. I was visiting a zoo there and was shocked at the number of risks. You’re standing in front of elephants and the only thing between you and the elephant is a two by four.

When I was there something grabbed my arm; it was a monkey. That’s a part of the world that has some opportunities for risk improvement.

R&I: Does the world have a modern hero and who is it?

It’s the men and women of this country who defend us. But we have a lot of heroes in this world and there is never just one.

R&I: What about your work do you find rewarding?

Our global risk management team maintains the freedom and the authority to make decisions and drive results. With that authority, you can find incredible value and satisfaction.

R&I: What do your friends and family think you do?

If you tell somebody you work in insurance they’re going to say, “Oh my God he’s trying to sell me a life insurance policy.”  But if you tell somebody about a lawsuit or some other risk that you are working on they will say that is a world that is pretty interesting.

How can you not enjoy tackling different challenges throughout your day?




Dan Reynolds is editor-in-chief of Risk & Insurance. 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]