The 2019 Traditional Energy Power Brokers

James Bennett, ARM
Vice President
Aon, Houston

James Bennett, Vice President, Aon

“In the second half of this year, we had many changes. [We] spun-off one business segment into its own public entity,” said one risk manager.“ Then, just a few weeks later, we were purchased by a major global corporation.

“To meet all contractual requirements, we had to develop and obtain a stand-alone program for the spun-off company and also develop and obtain a new insurance program for the remaining business unit.

“James consistently came up with solutions to various issues, maintained excellent professionalism in very stressful situations and delivered on placing two excellent programs for two very different business units.”

One manager of insurance and risk in pipelines and processing noted, “With the limited available markets in the primary midstream segment, we have been able to replace some old carriers and configure our primary policy with London markets for savings.

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In 2018, James was able to get us a 10 percent rate decrease for our workers’ comp program and an overall 5 percent rate decrease for our excess tower.”

The key was a total-cost-of-risk approach. Given the client’s recent claims history, Bennett was able to develop credible loss forecasts for the client’s primary casualty programs. He proposed two unique alternative structures for the client’s excess liability program to improve the pollution coverage, which was most relevant to the operation.

During the renewal the client used this analysis to decide to increase retentions to save over $1 million in premium.

Paul Chirchirillo
Senior Director
Willis Towers Watson, New York

Paul Chircirillo, Senior Director, Willis Towers Watson

To put Paul Chirchirillo’s 2018 accomplishments into context, one manager of global insurance had to summarize a difficult 2017.

“Our property and business-interruption placement has $2 billion in limits. Our 2017 renewal was severely impacted by the three large hurricanes, Harvey, Irma and Maria.

“Even though our company has not had a property loss in over 10 years and the commercial markets do not provide windstorm coverage, our renewal was caught up with several carriers using this opportunity to achieve rate increases.”

Because the client buys very large limits, there wasn’t much capacity to replace tough carriers: “Rate decreases were non-existent and most accounts experienced rate increases upon renewal. Prior to our renewal in second half of 2018, Paul devised a strategy that allowed the market to recognize we overpaid in 2017.

“We were successful in obtaining a premium credit in 2018, remarkable in a market with no rate decreases. Paul devised a strategy whereby we renew the policy for 54 weeks, but markets only receive premium based on [a] 52-week policy.” All markets accepted. Not one left the account.

“We have a very large property program that is placed as a quota share and is competitively priced,” said one director of risk management.

“This year we anticipated an increase of some degree as that’s what the market was indicating. However, our pricing remained flat, and Paul got us a multi-year program out of it. So we are guaranteed stability on our program for three years out now.”

Gavin Hurd, CPCU, OTA
Managing Director
Marsh, Houston

Gavin Hurd, Managing Director, Marsh

“Gavin led us through a very complicated builder’s risk loss at one of our major construction projects,” said one director of risk management of Marsh Wortham’s Gavin Hurd.

“That loss involved not only property damage, but [also] business interruption and extra expense components that were very difficult to prove and settle with insurers. Gavin’s knowledge of the policy … was tremendous. In the end, we recovered almost every dollar we were claiming.

“Further, Gavin has been instrumental in helping us price insurance for multi-billion-dollar builder’s risk and marine cargo projects in multiple countries. His understanding of the market and contacts with key underwriters and wholesale brokers enable him to simplify and expedite the complicated process of pricing coverage.”

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Another client is building a multi-billion-dollar energy processing facility in a developing region.

“In 2018, we placed an early works insurance program, presented proposed insurance programs to partners and lenders, negotiated lender terms, negotiated a litany of agreements, worked through government and local content issues, created the final program budget and completed coverage analyses. Gavin was integral in each of the above activities.”

Following a large loss at one of another client’s facilities, Hurd identified a material time-element issue for property that had not been damaged, said the risk manager. “Because Gavin is so familiar with both our operational and construction insurance placements, he presented his findings to us.”

Jilian Rossow
Vice President
Marsh, Houston

Jilian Rossow, Vice President, Marsh

Although her clients laud her customer service and her industry knowledge, Marsh’s Jilian Rossow wants to be known first and foremost as a team player.

“My clients and my colleagues are my ‘team’,” says Rossow.

But even given that, her clients still single her out for praise.

“She has proven to be very nimble,” said one client.

When our underwriters pushed for more premium, because we have grown and our payroll has increased, she countered that at the same time our claims have gone down.”

In the end, the client said Jilian Rossow was able to achieve a significant premium decrease of 30 percent for their excess tower, even though the company’s payroll increased 40 percent.

Often clients with losses face a double whammy of claims and then renewal. “We were faced with a very difficult renewal because of several adverse events this past year,” said one director of treasury services and risk management.

“Jilian and her team developed a contingency plan of viable alternatives as a fail-safe for the renewal and then guided us through the challenging discussions with carriers.

“A lot went on behind the scenes between Jilian and her team and our underwriters, but in the end, a win-win result was achieved. Jillian pays great attention to detail on our renewals and is also very responsive when claims and coverage questions pop up or when we need input regarding indemnity provisions in our contracts.”

Austin Sims
Vice President
Aon, Houston

Austin Sims, Vice President, Aon

“In 2018, we certainly got superior service from Austin Sims,” said a director of global insurance.

“He was able to manage the cost of our property damage and business interruption program in the aftermath of Hurricane Harvey claims … and keep away the premium increase we expected and realize a five percent reduction while locking in part of our program for two years.”

Another director of risk management and insurance said, “Austin’s 2018 accomplishments have been nothing short of outstanding. He developed a new rating methodology for new assets to allow for lower rates at non-CAT locations instead of simply adding them at the composite account rate.

“One of our programs was renewed with a 32 percent composite rate reduction from expiring; 150 percent capacity available, including replacement option [not taken up]; and policy limit increased from $66 million to $75 million.”

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Sims worked hard for their affiliates, added the risk manager: “We purchased a large hangar at the airport, then acquired a large ocean marine service company in which Austin was instrumental in at least 25 percent pricing improvements over the existing programs.”

Another client is developing a $300-million marine terminal: “In the engineering, procurement and construction, some gray areas are included,” said the treasury manager.

“Austin took us by the hand from the start, explained and identified the potential risks, helped us with the mitigating strategy and explained to us the differences between a contractor-controlled plan and an owner-controlled plan.”

Lee Snelgrove, CPCU, ARM
U.S. FINPRO Energy Industry Leader
Marsh, Houston

Lee Snelgrove, U.S. FINPRO Energy Industry Leader, Marsh

Most energy brokers specialize in one segment of the industry, but Lee Snelgrove was lauded by clients upstream, downstream and in the services sector: “When Lee and his team at Marsh were hired as our new broker, our company had experienced a major organizational transformation that dramatically changed our risk profile,” said one chief risk and compliance officer.

“The team took the initiative to learn our company history and evaluate the complexities of our program. Their efforts resulted in the simplification of our insurance program structure, reducing risk management’s impact on the business.

“We saw significant premium reductions, policy language enhancements, lower retentions and other cost savings this year.”

Another risk manager said, “Our company was part of a merger in 2017 and that made for a completely different renewal cycle in 2018. On the back of placing the runoff coverage for our previous company, Lee had to get all incoming members of the board comfortable with the new program.

“He was also part of the coverage counsel that scrubbed our previous program. Then [he] enabled us to minimize the cost and complication of outside counsel.”

In another case, Snelgrove won the business of a major producer for directors and officers, as well as fiduciary insurance, by promising a significant premium savings and coverage improvements across all financial and professional lines.

At the 2018 renewals, he was able to beat the pricing targets comfortably and achieved overall premium savings in excess of 40 percent.

The complete list of 2019 Power Broker® winners can be found here.

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 and 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]