2018 Power Broker


Facing Unique Rail Risks

Jim Beardsley
Global Rail Practice Leader
Marsh, Washington, D.C.

Railroads face unique risks within transportation. Property values are high, as is liability for the cargo carried, and regulations require a certain level of coverage. Now: cyber exposure.

“We were worried about people trying to hack into our train control operation systems and concerned about theft of PII. We need someone who can consult with us if there were a breach, handling the PR and reputational impact and protecting our clients’ private information,” said the risk manager of one U.S. freight railway.

Marsh’s Jim Beardsley initiated a continuous analysis of cyber exposure for the company and worked with multiple markets to get the capacity needed. Beardsley regularly helps his clients assess their exposures, seal gaps in coverage or add more where needed.


“He would think through the different loss scenarios we might experience and consider the regulations at play, [such as] what the effects would be with regulators dictating how much coverage we have to carry. What are the implications to our business and to stipulated regulations if one market were to pull out?” said Shireen Bond, director of risk management, Trimac Transportation Service.

Beardsley is also well-versed in the risks of passenger rail.

“Amtrak is very similar to large class 1 freight railroads in terms of size, but of course we have some unique needs because we transport people. Jim is very in tune with those unique characteristics,” said Philip Balderston, director of risk management, Amtrak.

Always Exceeding Expectations

Michele Centeno
Senior Vice President
Gallagher, Boca Raton, Fla.

Gallagher’s Michele Centeno went above and beyond when she came to the rescue for one client that needed to rapidly replace a risk manager who left the company.

Centeno and her team stepped in to educate the risk manager’s replacement — a treasurer with no experience in insurance buying — and proactively arranged meetings with underwriters to address the company’s largest exposure: auto liability.

Not only was the client brought up to speed quickly, but Centeno was also able to build a competitive program and conduct a loss portfolio transfer that decreased the company’s insurance spend by hundreds of thousands of dollars.

Centeno provided similar support to Ryder System Inc., a logistics and transportation provider, when the risk management team felt they were not getting enough support from their local brokers in dealing with a complex claim in the UK.

“Michele went in and custom built a team that was better suited to our needs. After that, we were able to resolve the claim very quickly, and my risk managers in the UK were very pleased with the outcome,” said Amy Wagner, vice president of global products,  insurance and risk management, Ryder.

Wagner also attested to Centeno’s level of customer service.

“She’s always in touch, even on vacation. She’s almost like your mom — she wants to make sure all of her ‘kids’ are well-taken care of,” she said.

Around-the-Clock Innovation

James Douglas
Senior Vice President
Aon, Sacramento, Calif.

When the traditional insurance marketplace had no product or program for James Douglas to offer his client, he created his own.

Douglas helped to build a single-parent workers’ compensation captive for all of Button Transportation’s entities, including three trucking companies, a leasing company and a WASH facility.

Importantly, setting up the captive required no collateral, which is typically required in risk-sharing structures to secure self-insured losses.

“He escorted us out of the dark. We became a self-insured group,” said Rod Anstead, risk and safety director, Button Transportation. The move helped to cut workers’ comp costs by 60 percent, with the help of a reputable third-party administrator. Douglas also introduced a dashboard camera safety system to the company.

“He’s done a great job of being innovative, staying ahead on our safety risks and finding ways to help us improve our profile,” Anstead said. “He’s the best of the best.”


Eric Triolo, president and owner, Trans Valley Transport, seconded that.

“He always provides us with a competitive package. I can sleep at night knowing that we are 110 percent in the hands of an expert broker. I’ve been doing this for more than 30 years, and he’s someone who has always provided a great partnership and always delivers the competitive pricing that we’re accustomed to,” Triolo said.

“In the transportation business, your broker’s number is on speed dial. We run a 24/7 business, and so does Mr. Douglas.”

A Team Player

Lynn Givens, CIC, CRM
Senior Account Executive
Aon, Little Rock, Ark.

To her clients, Lynn Givens is not just a broker but also an extension of their risk management teams, learning the nuts and bolts of their businesses.

“I’ve been transitioning from associate vice president to the VP position. It has been challenging and difficult, but Lynn has answered my every beck and call. I don’t have a strong background in insurance, and she has been very patient and educational,” said Angela Clark, VP of risk management, P.A.M. Transport Inc.

“We just had our renewals in September, and she helped me be a rock star during presentations with underwriters,” she said. ”We were expecting double-digit increases at renewal,” said P.A.M Transport CFO Allen West.

“We expressed that concern, and she put together a consortium of companies and led a series of negotiations. We walked away with pretty much a flat renewal, which translates into hundreds of thousands in savings.”

Givens serves as a liaison with markets, helping her clients to build new relationships with carriers when there’s a need to expand coverage or seek a better deal.

“Trucking is risky and not a lot of carriers want to play ball with us. Getting it done requires relationships, clear communication and creativity,” said the risk manager for one transportation provider who needed additional coverage after suffering some major losses.

“Meeting new markets was a huge undertaking, but it was very well-planned and very efficient.”

Marketplace Knowledge Pays Off

Simon Newport
Managing Director
Aon, Hamilton, Bermuda

Between its cars, track and terminals, Illinois-based rail company Metra has about $6 billion worth of property to insure.

“We recently replaced about 140 cars for our electric line, which further increased our property value. As a government agency, we also rely heavily on tax dollars. So we had to increase our insurance coverage while keeping costs down,” said John Anderson, deputy general counsel, Metra.

Simon Newport, Aon’s property broking leader, expanded Metra’s coverage by about 25 percent and added a number of policy enhancements with a very low increase in premiums.

CSX Corporation was also facing cost constraints, considering cutting its property program.

Newport helped Juliana Keaton, former director of risk management, engage with the C-suite by isolating five compelling reasons why the program should stay. He worked with Keaton to trim and tailor the program to meet the company’s needs.


“The process forced us to nitpick every detail. The result was a more efficient program.”

With the growing importance of protecting data, Newport worked with carriers to add coverage for non-physical damage to data onto property policies for his clients. Newport’s clients also attest to his ability to leverage his knowledge of the market.

“He has a deep understanding of the Bermuda markets and knows when there’s going to be movement. He knows the politics, who the key players are and who we need to meet with,” Keaton said.

Tenacity and Attention to Detail

Annette Nitti
Senior Account Executive
Aon, Aurora, Ill.

Poor loss ratios in the transportation sector have driven some major carriers to pull out of the space altogether, leading remaining players to push up premiums further.

When one of her clients’ carriers intended to non-renew for its entire book of transportation business, Aon’s Annette Nitti stepped in. For Bulkmatic Transport, she was able to convince the insurer to stay in the game and renew coverage, and she convinced them to do it at a flat rate.

Her negotiation savvy was tested when client B-H Transfer Co., a hauler of kaolin clay, decided to expand into frozen foods. Nitti knew the company needed endorsements for food spoilage, a big-bucks charge because the risk of human error is so high.

Nitti expertly presented the scope of controls the company had in place and added the endorsement for a nominal fee.

“She does a great job analyzing the coverage of our various policies to ensure there are no gaps in coverage and is committed to getting us the best value,” said Frank Young Jr., president of B-H Transfer.

For Echo Global Logistics, a non-asset transportation provider, Nitti argued that underwriters should treat them as a tech company rather than a transportation company, given the lack of tangible assets. The pitch resulted in a 10 percent overall premium reduction at renewal.

“Her knowledge of the transportation industry is one I’ve continually been impressed by,” said Pete Rogers, Echo’s VP of finance and financial controller.


David Bell
Senior Vice President
JLT Specialty USA, Plano, Texas

Kenneth Dolan
Senior Vice President
Willis Towers Watson, New York

Louis Hefter
EPIC/The Capacity Group, Mahwah, N.J.






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.


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]