Risk Scenario

The Toxic Balloon

An injured EMT starts down a dangerous path of addiction to narcotic painkillers.
By: | October 17, 2012 • 13 min read
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

Part One

It was 9:30 p.m. on a sweltering Miami night.


The emergency medical response team had just pulled into the parking lot of the Maki Madness pickup sushi restaurant when their scanner went off.

“Attention all northwest emergency medical personnel, we have a one-car accident involving a late model Pontiac Bonneville near the intersection of Opa Locka Boulevard and Northwest 135th Street. Victim is a large Hispanic male with a head injury. The victim is conscious, but believed to be intoxicated, possible drug user, please advise as to proximity and availability …over.”

Patty Broomhilde, the ambulance’s driver, snatched up the radio transmitter before her partner, medical technician Rick Cornell, could grab it.

“Unit 457 responding, we are in that vicinity, we’ll take it, over…”

Patty rolled her eyes at Rick and wheeled the ambulance around. Their much-anticipated Miami Maki rolls with stone crab, yellow tail and avocado would have to wait.

Rick, who wasn’t supposed to smoke on duty, had a cigarette on the way over to help temper his appetite.


That very same evening, Rick’s older brother Petey, a hard drinking blues guitarist, pulled out of the Purple Rose, a Miami waterfront blues club. To most guys, three beers was plenty. Petey had four in him already, plus two shots of 100-proof bourbon. Petey gunned the engine on his Harley, and with a cigarette in his mouth and his guitar strapped to his back, motored out of the parking lot and onto a busy two-lane road.


Scenario Partner

Petey wore his blond hair long and he didn’t even own a helmet. The draft from a passing truck whipped his ponytail into his eyes for just a second. Petey, buzzed from the booze, took his right hand off of the bike to clear his vision and temporarily lost control just long enough for the Harley to swerve into the path of a landscaper’s pickup that was hauling a trailer. The truck caught Petey and his bike and t-boned him. Petey was killed almost instantly.


The emergency medical team was only two blocks from the scene of the Pontiac accident when they heard sharp scanner chatter about a fatal involving a motorcyclist who wasn’t wearing a helmet.

“Wouldn’t want that one,” Patty said stoically as she slowed down to where the wine-red Pontiac had slammed into a telephone pole.

There was steam coming up from the Pontiac’s engine and the smell of gasoline was strong.

Rick got out of the unit first and ran to get close. The odor of marijuana and brandy in the car almost eclipsed the smell of gas.

¡Dónde le duele! ¡Dónde le duele! (Where does it hurt?)” Rick shouted at the driver, who had blood streaming from a cut on his forehead.

Me duele la cabeza,” said the driver.

¿Le duele otra parte de su cuerpo? (Does anything else hurt?)” Rick said.

“Nah…nah…jus’ my head,” the driver said, switching inexplicably to English and letting a bleary, stoned smile cross his face.

Rick had to move the driver now based on the information he had. There was too much risk that the car could explode with that much gas coming out of it.

He reached in under the driver’s arm pits and started to move him. The man’s t-shirt was soaked with blood and he was hot and sweaty. This was going to be tough!

Rick set his feet and pulled. The man came with him.

Rick grunted. He was strong but this guy weighed a ton.

Rick was still bearing most of the man’s weight when he felt something pop in his lower back and a buzzing, sickening pain shot down his left side and into his leg.

“Ahhh…cripe,” Rick said as the patrolman and Patty came to his aid and they all brought the injured driver fully out of the car. Rick didn’t let go of the driver despite his pain.


Rick was sitting in the waiting room of a general medicine practice waiting for his X-Ray results when he got the phone call from Petey’s friend Buddy.

Petey and Rick weren’t exactly close. They came from a dysfunctional family. But your brother is your brother.

Petey had always done his best to look out for Rick. Now Buddy was saying Petey was gone. His death hit Rick deep inside.

A partially ruptured disc was the word the doctor gave Rick that day. Along with that news he gave Rick prescriptions for hydrocodone, a semi-synthetic opioid, tramadol, a synthetic pain reliever, ibuprofen and metaxalone, a muscle relaxant.


As the weeks rolled by, Rick, off work now, tried to make a go of it in physical therapy and by sticking to his prescribed medications.

But the combination of his injury, not working his job and Petey’s death was wearing on him. He felt like he was down and couldn’t get up.

His back injury was extremely painful, it felt like someone, or something, was driving a knife into his lower back at times. Sometimes the jolts of pain would hit him so bad he would collapse and fall to the floor.

Rick didn’t much like spending time around doctors, but he felt so down he sought out his group health plan doctor for help with the sleeplessness and the depression he was experiencing.

“Are you on any medications?” the doctor said.

“No,” Rick said.

Rick left that doctor with prescriptions for Prozac, an anti-depressant and Ambien, a sleep aid.

“Why did I just lie about that?” he asked himself.

In that moment, he had no answer.

Part Two

From what Nancy Strolich, a claims professional for the Kankakee, Ill.-based Birchwood Underwriters was seeing, on paper anyway, Rick Cornell’s workers’ compensation case was no different from many others.

Among the 220 cases she reviewed each month, Rick’s was one of those that she flagged because he was on an opioid analgesic. But there wasn’t much else there to worry about, at least not yet.

Still, Rick was in Florida and although she was licensed in Florida and her firm had an office there, she didn’t have face to face contact with him.


What Nancy couldn’t see was the inside of Rick’s body, which was beginning to resemble a chemical lab on tilt.

Five months after his work-related injury, Rick’s back injury was acutely painful and he was struggling to control the pain.

Rather than use the medications that he was given in the prescribed way, Rick was doubling up on his dosages.

Nancy could see that Rick was beginning to use more and more pain killers. But she couldn’t see evidence that he was taking Ambien and Prozac because those prescriptions were filled through his group health plan.

Rick worked in the medical field, but he was no student of pharmacy. So he wasn’t aware that taking all those drugs, the hydrocodone, the tramadol, the ibuprofen, the metaxalone, the Prozac and the Ambien was in some cases limiting the properties of individual drugs and amplifying the impacts of some of the other drugs in concert.

Nor would he acknowledge the fact that because he, his father and brother were all smokers, that meant that he had traits that predisposed him to becoming addicted to opioids.

All Rick knew was that less pills meant more pain. His dependency and use had gotten so strong and voluminous that he was beginning to feel withdrawal effects like sweating and nausea if he went without ingesting an opioid for more than five hours.

He knew he should cool it with the pills, but with his brother Petey gone, Rick just wasn’t in a mind frame to be self-preserving, despite the fact that he was married with two young children.  Rick had always told himself that he would never be a heavy drinker like his father or take drugs, like he knew Petey did on occasion.

Scenario_TheToxicBalloonBut the combination of ongoing pain and increased physical dependency on drugs was mastering Rick. So back Rick went to another doctor, recommended by Petey’s friend Buddy.  “Dr. Limon’s the man. He gives you the pills right there,” Buddy said.

“Cash and carry, baby,” Buddy said.

“I like it. You got his number?” Rick said.

Rick told Dr. Limon a different story. He told him he was agitated, he couldn’t sleep from the pain and quite frankly, was now suffering from constipation.

More tales, more pills, and Rick was out the door with some Xanax, an anti-anxiety medication, the narcotic pain reliever Oxycontin IR and a laxative.

Rick wasn’t about to ask what the doctor was charging for the dispensing out of his office.

It was several weeks until Nancy got the bill for those prescriptions on paper and her eyes nearly jumped out of her head. Dr. Limon was charging for the Xanax and the Oxycontin IR at a 200 percent premium compared to what is usually charged at the retail pharmacy. He had even billed a 100 percent premium on the laxative.

In addition to using physical therapy, Rick was also seeing a chiropractor. He had been off work now for nine months and indications were that his back was still weak and he was still experiencing significant pain levels.


Just a few days after seeing Dr. Limon, Rick still wasn’t feeling right, so back he went to the doctor he used in his group health plan.

“Don’t you have anything that will help me sleep at night?” he said, using his voice to be a little accusative. After all, it was the doctor’s job to help him feel better.

“The Ambien’s not cutting it for you, eh?” the doctor said.

“No. Not really,” Rick said.

“Okay, try Lunesta.”

Nancy was now starting to see the volume of medications Rick was taking under his workers’ comp claim increase. But she had no indication of whether he was getting any better, or how his combined prescription regimen was affecting him.

Rick was now taking Xanax from one source and Prozac from another. Nancy was able to see that Rick was increasing his prescription frequency of hydrocodone, tramadol and metaxalone. She decided to place a call to the workers’ comp network physician to open up a dialogue.

This is what she got in her first attempt.

“Hello, you have reached Fountainebleu Medical Associates, where your health is our No. 1 priority. Due to high call volume, we are not available to answer your call at this time. Para Espanol, oprima el dos. If you are experiencing a medical emergency, dial 911. To fill a prescription, press one, to get lab results, press two, to speak to a medical associate, press three.”

Nancy dutifully pressed three.

“There is no one available to receive your call at this time. Please leave a message with your name, date of birth, social security number…”

Nancy’s other line buzzed. She had to answer it. She’d have to try that doctor in Florida again sometime. “Social security number? My social security number?”

Part Three

“Rick!” his wife said from upstairs where she had apparently logged on to their bank account from the family’s desk top computer.

“What?” Rick said from the living room where he was putting on his shoes as fast as he could, given how weak and pain-ridden his back was.

“What’s this charge from Williams Sonoma for a sea salt grinder?”

“Unnnhh…it’s a present for my mom.”

“Your mom uses a sea salt grinder? You think we can afford that? We’re putting diapers and formula on credit cards for God’s sake!”

Rick didn’t say anything.


Too late, Rick was out the door. Somewhere behind him in the Miami night was what used to be his life; what used to be his children and his wife.

He well knew where the sea salt grinder was and who it was for. When he got to the pain clinic in Hialeah, Rick ground up an Oxycontin pill and snorted it, using a plastic spoon he got with some ice cream.

Inside, things went as smoothly. Rick was in drug heaven and feeling no pain..

The pain clinic had two physicians on staff who wrote him prescriptions for what he wanted.  The main doctor, the one with the beard, wrote him a prescription for Exalgo, another narcotic pain killer, plus Oxycontin IR, plus hydrocodone, a morphine equivalent dose of 360 much higher than the 120 threshold that is medically suggested.

Rick walked out into the humid night with the prescription folded up in his jeans pocket.

He had his phone turned off. He wasn’t answering anybody’s calls tonight.

The kids were asleep. She had no business nagging him.

He’d heard her on the phone with that guy anyway, whoever he was. Mr. Emotionally Supportive: Whatever. He didn’t care who she babbled to.

Rick was feeling agitated from the pill he had just snorted. That and the heat were making him thirsty.

Nothing like an icey six pack of beer to cool everything off.

The bright lights of a nearby liquor store beckoned. Rick smugly congratulated himself for having the good sense to pick a pain clinic in the same strip mall as a liquor store.

As he walked in, Rick caught just a peripheral glimpse of himself in the mirror that was in the corner of the liquor store ceiling. He looked almost like Petey had looked, with his beard and as thin as he was. Heh, a regular Southern rocker. Just like Petey.


Nancy had made some headway in her battle with the in-network physician practice to stop giving Rick hydrocodone refills. Dealing with Dr. Limon had been next to impossible. Now these billings from the pain clinic were really concerning and frustrating her.

She had now flagged Rick’s case for intervention but he wasn’t returning her calls.

Rick was so far past Nancy’s efforts to get a grip on what he was ingesting and the effect it was having on his mental and physical health that she might as well have closed the file.

Nancy began moving to file the paperwork to deny some of Rick’s medication bills under the grounds that they had become medically unnecessary, but sadly, she was too late.


Rick had three beers in him and was reaching for his fourth when it happened.

He was trying to make a left on West 12th Street when everything just melted out from under him. His car ran right into the side of a parked pickup truck and Rick’s reflexes were so impacted he didn’t even have time to hit the brakes.

Rick’s head hit the rear view mirror, but he was more drunk and numb from narcotics then he was impacted by the crash. He closed his eyes, giving in to the booze and the drugs, the flash from the police lights and the EMT vehicle coming to him through closed eyelids.

“Where are you hurt? Where are you hurt?” he heard the EMT saying to him.

“Nowhere,” Rick answered.

“I don’t know what pain is,” Rick added with an eerie giggle.

He felt strong arms lifting him out of the car.

“I got him, he’s light,” the EMT said.


Nancy Strolich, a workers’ compensation claims professional for a carrier, is doing what she feels is a diligent job in tracking the pharmacy intake and quality of care for an injured emergency medical technician. But the case spins out of control when the injured worker displays a voracious appetite for narcotic pain killers. While this Risk Scenario depicts a case example that could be considered an outlier type of scenario, there are several significant situations and opportunities illustrated that are very common.

Video Insights: Cyril Tuohy sat down with Daryl Corr, President of Healthesystems who is the sponsor of this scenario, for an in-depth discussion of “The Toxic Balloon”. Highlights of their conversation are integrated into the summary below.

1. Establish a comprehensive pharmacy management process: In this scenario, Nancy is blindsided by bills that come to her through different mediums and from different billing sources and she isn’t provided with any alerts or visibility about the escalating prescription activity until it is too late. Nancy needed much greater transparency into the number of prescriptions Rick was getting filled, who was prescribing them and where they were being filled. In addition, she needed more tools that would have enforced prior authorizations of certain retail dispensed scripts while providing her with the capability to deny payments of scripts being received on paper.

2. Screen for addiction predisposition: The fact that Rick was a smoker, combined with his brother Petey and his father both being smokers and excessive drinkers was valuable information that could have helped alert Nancy to about Rick’s potential for becoming addicted to opioids. Had Nancy’s claims best practices included processes such as monitoring whether prescribing physicians were screening injured employees for risks of opioid addiction, it could have provided earlier warning sings to intervene and challenge the appropriateness and safety of certain prescriptions being used in Rick’s therapy much sooner.

3. Aggressive intervention and treatment analysis: The prescribing activity occurring in Rick’s case escalated over a period of time and Nancy was ill-equipped to slow it down or reverse course. Several prescribing physicians were writing scripts, many of which made the combined therapies excessive if not potentially lethal.

4. Monitor jurisdictional trends and new legislation: Cases based in a state like Florida, which has become a hot bed of physician drug dispensation and drug repackaging, should warrant extra attention. States that allow the proliferation of such pill mills are a dangerous environment for an injured worker and for the payer who is paying for their prescriptions. Prescription costs for physician-dispensed drugs can dwarf those of drugs obtained at a pharmacy. Legislation is one of the key areas of focus that can help regain control over challenges such as physician dispensing and repackaged drugs.

5. Consider urine drug monitoring: Had Nancy been able to get a chemical picture of what was going on inside Rick she would have been shocked and perhaps motivated to intervene in his case much sooner. Monitoring bills is one thing, but getting biological evidence of the state of an injured employee can go a long way in determining whether the worker is taking too many drugs, or in some cases, obtaining the lucrative drugs, not taking them and selling them on the black market.

6. Assess the mind set: In many cases, assessing the mind set of an injured employee can be just as important as monitoring the injured employee’s physical recovery process. In Rick’s case, his depression over his brother’s death led him to seek additional physicians and additionally prescriptions, greatly complicating his workers’ compensation case and negatively impacting his recovery.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

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.


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.


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?


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.


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.


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]