The 2020 Executives to Watch: FM Global’s Kevin Ingram

Kevin Ingram discusses FM Global's approach to risk mitigation and how this 'finance-minded guy' fits in.

Kevin Ingram’s father worked as an independent insurance agent through much of his life. But for Ingram himself, the road to insurance wasn’t as cut and dry.

When the time came for Ingram to start his own career, he chose to study accounting at Northern Illinois University. And upon leaving school, Ingram entered into the professional world as a certified public accountant.

It was a rewarding career, certainly, but it wasn’t exactly what Ingram wanted. Luckily for him, he had clients in the insurance space, and as he worked with them, he started to gain an interest the sector.

“When I made the decision to leave public accountancy,” Ingram explained, “I thought about what I wanted to do.”

Commercial property insurer Protection Mutual Insurance Company, one of his clients, was looking for an associate controller.

For five years, Ingram served as the company’s accountant, and through that relationship, Ingram was able to learn more. He asked his connections at Protection Mutual about the open position and the requirements the company was looking for in potential candidates.

As they began discussing Ingram’s qualifications, however, Protection Mutual let in on a secret: They wanted Ingram to apply even before he wanted to himself.

“The said they had thought about asking me to apply,” said Ingram. But the team at Protection Mutual pegged Ingram as a “career accountant.”

“That’s because my approach to any job is to be all-in,” explained Ingram.

But he was ready to go all-in at Protection Mutual.

Upon joining, he held the controller position within the company for five years. Ingram’s background in finance was a big asset as he grew with the company, and soon he assumed the role of treasurer, in addition to controller.

In 1999, Protection Mutual merged with Allendale Mutual Insurance Company and Arkwright Mutual Insurance Company to form FM Global.

Ingram moved into the role of vice president of financial services. Over the next 15 years, he worked in finance at the insurance company, holding roles that included, finance director of the UK entity. For a number of years of that, he was senior vice president of corporate services and oversaw the company’s Business Risk Consulting Group, Business Process Improvement team and risk management function.

Today he is the executive vice president and chief financial officer and also oversees enterprise risk management for the company. He entered into this role in 2019, making him a 2020 Risk & Insurance® Executive to Watch.

The Marriage of Engineering and Finance

FM Global uses a science-based loss prevention engineering approach to property risk management and risk transfer for its clients. It prides itself in how it recruits talent from the engineering space and brings them on board to serve its unique clientele.

Risk assessments and client site evaluations are completed by trained engineers, which is how FM Global differentiates itself from competitors that base their underwriting on actuarial tables rather than a hands-on engineering approach.

Ingram, however, did not have a background in engineering. Instead, he was “finance-minded,” as he put it.

“FM Global is analytical and methodical on how it does business,” he said. When Protection Mutual was folded into FM Global, Ingram had the opportunity to bring his background to the foreground.

“I was able to bring my finance background to help make sure that we thought about the financial implications of services and other strategies FM Global was looking to implement,” he said.

When Ingram works with FM Global’s operations teams, he is tasked with creating presentations for clients. Before he begins, Ingram takes a step back and asks himself, “What is it I would want to know from a financial perspective?”

Then, he makes certain to include that information into the presentation. “It’s a great opportunity to be working with the operations teams,” he said. And from where he sits as CFO of the company, he can see just how this marriage of engineering and finance not only benefits FM Global’s risk strategy but also its clients.

Wrestling with a Hardening Market

One of the biggest challenges of 2020 is a transitioning insurance market.

Numerous insurers, brokers, risk managers and clients alike are witnessing rising rates and bracing for what is to come.

“The market is in a different place than it has been for a number of years,” Ingram said. “But I see it as encouraging from a business perspective.”

Though the market poses challenges, insurers have a unique opportunity to work with their policyholders to get them coverage at a price point that works for them. This hardening market enables the client-insurer relationship to grow and strengthen.

Insurers have a responsibility to work with clients to get a fair premium for their exposures, Ingram explained. Before underwriting, insurers have to challenge themselves to treat each individual client in a targeted and focused approach.

“It’s client by client,” he said. “We have one constituency; policyholders are stakeholders. As we look at the market, we have to treat it like an opportunity to ensure all our clients are getting that one-on-one, fair approach.”

Innovation and the Status Quo

Looking back, Ingram added that his time spent in ERM really helped him grow into the professional he is today.

“It opened more doors for me,” he said, adding that young professionals joining the insurance profession should be as judicious as they can be when opportunities present themselves. “All opportunities presented in our career are teaching moments.”

And as Ingram settles deeper into his role as executive vice president, he’s excited to learn more from the projects and innovations in store.

“I’m excited to get more involved,” he said. “I ask different questions of our clients because of my background in finance, and I’m always looking for areas to be more innovative.”

It is his belief that the insurance industry must provide services to clients in the most efficient way possible.

“At the end of the day, I always want to be challenged,” he said.

“I don’t want to be satisfied with the status quo.” &

For the full list of Insurance Executives to Watch in 2020, click here.

Autumn Demberger is a freelance writer and can be reached at [email protected].

How a Carrier Partner Can Help Navigate a Challenging Management and Professional Liability Market

A combination of a choppy economy with increased claims frequency and severity could lead to rate increases in the Management & Professional Liability market.

By: Risk & Insurance | April 3, 2024

Rates in the management & professional liability (M&PL) markets were on the rise from 2020 to early 2023 and are now falling rapidly.

M&PL divisions manage a number of different insurance products including management liability (D&O), professional liability (E&O), employment practices liability (EPL), fiduciary liability policies, cyber, etc. In 2023 and into 2024, a big influence on the marketplace has been the extremely aggressive and softening public company D&O market.

Though these rates have been softening for management liability, that may change over the next few years as companies continue to adjust their business models motivated by economic uncertainty. Layoffs were up nearly 200% last year, Forbes reported, even as other recession indicators, like the inflation rate, improved. A recession could lead to an increased claim activity and force carriers to raise rates.

“Whenever there is a meaningful downturn in the economy, we tend to see claim frequency pop up,” said George Schalick, Jr., senior vice president of the Management and Professional Liability Division at Philadelphia Insurance Companies (PHLY).

With continued fiscal uncertainty, businesses potentially already burdened with pandemic-related claims should seek a carrier with a long history in M&PL products. They will provide much-needed risk management guidance and be better positioned to support their insureds during market fluctuations.

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.