The 2020 Insurance Executives to Watch: Liberty Mutual’s David Perez
Celebrated scientist Jonas Salk once said that the reward for work well done is the opportunity to do more. If that’s the case, then Liberty Mutual’s David Perez is being amply rewarded.
Perez joined Liberty Mutual in 2012 as executive vice president of National Insurance Specialty. Based on his performance in that role, he has been called “an exceptional innovator and transformation agent” by James Slaughter, chief underwriting officer for Liberty Mutual’s Global Risk Solutions (GRS), which offers traditional insurance, specialty and reinsurance risk solutions.
“When I came here to Liberty in 2012, it was part of an initiative to expand into other lines of business and drive greater diversity outside of the main line of business. … To do that, it required the ability to change a little bit of the culture, change some underwriting expertise and develop a new strategic approach to the marketplace.
“In the end, we created a very successful enterprise that grew, and grew profitably, over six years.”
Capitalizing on Perez’s strengths as a change-maker, the insurer recently tapped him for the role of chief underwriting officer, North America, for GRS. Perez now partners with underwriting leaders across GRS’s North American businesses to hone the insurer’s underwriting strategy and enhance the value of its offerings to brokers and clients.
GRS’ primary, specialty and surety operations have been successful, but siloed. Perez’ charge now is weaving the separate pieces together.
“Since the acquisition of Ironshore, our organization has been trying to streamline to yield greater value to brokers and buyers,” he said. “We want to make it easier for brokers and buyers to access the full range of our products so they don’t have to go to one place to get their primary coverage, and then talk to a different underwriting organization to get specialty.”
A significant piece of Perez’ role is the education and development of underwriters across the organization — a responsibility he sees as essential to the present and future health of the operation.
“Being able to stay on top of a very dynamic marketplace, looking at loss development, looking at how we approach pricing, how we approach our analytical perspectives … all of these things are important for us to be able to not only take on risk more effectively, but also communicate with our customers better and avoid surprises.”
An added wrinkle to that challenge is one facing the entire industry — an exodus of seasoned professionals into the realm of retirement, followed by a crop of underwriters that grew up in an analytical world and never experienced the hard market, he said.
“Our underwriters are learning new skills every day in terms of having tough conversations, trying to articulate the dynamics of the market and how they affect a given class or a given line of business, and how that relates to a given particular customer.
“Now that we have our underwriters getting this experience, how do we develop them even further to be the next round of leaders? And that’s the challenge that we’re focused on now because that’s a longer term investment.”
Developing an underwriting operation that can execute on a consistent level is challenging, said Perez. While formal education is necessary, helping them gain the necessary experience is vital.
“You can talk about making a pizza. You go to a pizza parlor, you see somebody flinging pizza dough in the air. You can get all the education you want on that on that particular process. But you’re only going to be able to do it after you after you try it and learn on your own. You have to get your hands in the dough and come to your own feeling of how to do it.”
Perez said it’s about getting to the point where they get to establish an understanding of what “good” looks like.
“That’s what every carrier in our business strives for, getting their entire underwriting team to know what ‘good’ looks like. To get to the point where you have a consistent level of execution and a consistent level of analysis is where you want to be.”
“You go to a pizza parlor, you see somebody flinging pizza dough in the air. But you’re only going to be able to do it after you after you try it and learn on your own. You have to get your hands in the dough and come to your own feeling of how to do it.” — David Perez, Chief Underwriting Officer, North America, Liberty Mutual Global Risk Solutions
But there’s a lot more to the secret sauce that underpins a successful underwriting operation, said Perez. It starts with talent selection and fostering a supportive environment.
“When it comes to talent, it’s not about putting people in seats. We can hire a lot of good, smart people. It’s a matter of whether they’ll take to our business, which is very unique. Will they thrive in our business? And if not, they’re not going to stay in our business.
“It’s about hiring people that are interested in a diverse set of experiences, and then giving them those experiences and the challenges that go along with them.”
Perez believes that the greater the challenges you give to people — even people new to the business —the greater their chance of success “provided that they feel empowered, provided they feel they always have the ability to ask a question and get answers without judgment, and provided that they can see the impact of what they’re doing on the organization.
“If you give them that opportunity, the vast majority are going to be happy and successful in this business.”
Perez is focused on making sure the organization is in lockstep communicating with our customers and brokers “on where we see trends going and how we react, and also developing mechanisms to get feedback from both brokers and customers so that we can we can improve how we look at risk during the process.”
For the near-term, he said, “It’s going to be a very difficult market for a lot of buyers for the next 12, 18 or 24 months. Having a partner/carrier that is very open, honest, frank, and also doing whatever they can to help ensure their customers get through this is very important. And that’s a key priority for us overall.”
This CUO and transformation agent isn’t just up for his newest set of challenges, he’s reveling in them.
“Coming into this role, there are a lot of new experiences that I wouldn’t have in my prior role — in terms of product line, in terms of dealing with challenges and problems, also experiences in helping the leaders of all GRS North America in achieving their goals. So for me, I think it’s it’s chock full of excitement in terms of not only what I can do, but what I can learn.
“Being in this business as long as I have, to be excited about new experiences and challenges really is a privilege. And I’m looking forward to it.” &
For the full list of Insurance Executives to Watch in 2020, click here.