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Steve Yahn

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at

P&C Revenues

Top P&C Brokers Ranked

The top 150 brokers earned total global revenues of $28.5 billion from commercial P&C activity.
By: | November 11, 2014 • 5 min read

A first-ever ranking of the world’s top 150 brokerage groups by revenues earned from commercial non-life (P&C) insurance has been calculated by London-based market research firm Finaccord.

The top 150 brokers earned total global revenues of $28.5 billion from commercial P&C activity — or 59 percent of the estimated $48.5 billion total global revenues in 2013, according to the firm.


Aon ranked at the top of the list, with commercial lines revenue of $6.1 billion worldwide, followed by Marsh at $5.1 billion.

Overall, the top 15 brokerage groups together earned revenues of $20.9 billion (or 43 percent) of the worldwide market.

Finaccord’s research also showed that across the world’s top 150 commercial non-life insurance brokerage groups, 67 (45 percent) were headquartered in the U.S., with a further 24 based in the U.K., 14 in France, 12 in Germany and eight in Canada.

“The strong presence of North American brokers in the ranking is primarily due to the huge size of the U.S. and Canadian commercial property and casualty markets, and the fact that brokers, including independent agents, dominate distribution in both the U.S. and Canada,” said Bernd Bergmann, a consultant at Finaccord.


The Finaccord ranking of top 15 commercial non-life (P&C) insurance brokers by estimated commercial non-life broking revenues in 2013, in order, are:

  • Aon: $6.1 billion
  • Marsh: $5.1 billion
  • Willis: $2.05 billion
  • Arthur J. Gallagher & Co., $1.2 billion
  • Wells Fargo Insurance Services: $960 million
  • BB&T Insurance Services: $932 million
  • HUB International: $932 million
  • JLT Group: $878.6 million
  • Lockton: $791 million
  • Gras Savoye: $464.7 million
  • USI Insurance Services: $390.4 million
  • Brown & Brown: $382.4 million
  • Alliant Insurance Services: $288.2 million
  • Towergate: $267.7 million
  • OAMPS Insurance Brokers: $210 million


Mike O’Connor, CEO of Aon Risk Solutions in Chicago, said the magnitude, complexity and speed of risk are increasing everywhere.

“Even without the uncertainty that is caused by natural catastrophe, economic slowdown, or legislative and regulatory changes, companies are operating in a challenging environment where the pace of change is unparalleled,” O’Connor said.

“Protecting people and property has become more difficult,” he said. “Clients want solutions that will enable cross-border trade and alleviate security concerns in addition to solutions that will help them seek rapid recovery and capital after natural catastrophes.”

Bergmann noted that “a number of large brokers in North America are driving their growth through acquisitions, while the majority of their counterparts in Europe rely more on organic growth.”

Martin Mankabady, partner, Clyde & Co.

Martin Mankabady, partner, Clyde & Co.

“I would say in terms of M&A activity, it is still quite patchy,” said Martin Mankabady, London-based partner in the insurance group at international law firm Clyde & Co. “We still haven’t hit the levels of activity we saw prior to the global financial crisis.

“In large part that is due to lack of confidence and market sentiment. The M&A market is particularly sensitive to that, and with the tensions at this moment in the world, plus talk of certain economies slowing down, all of that inevitably has an impact on M&A.”

He said “real pressure on income and margins being squeezed” has led some brokers to be active in the M&A market. Also driving M&As are brokers looking to achieve greater scale and what they hope will be more clout in the market.

“You can’t help but think that [the small and midsize] market should be ripe for consolidation — that could help them achieve some economies of scale and to potentially be more competitive,” said Mankabady.

“But we haven’t seen that wave of consolidation though there is some talk of it,” he said. “You may see a ripple of consolidation, but I’m not sure it will be a wave.”

He noted that “a number of sellers don’t want to sell unless they have to as they’re worried about not getting the right price, and buyers are worried about overpaying.”

Acquisitions Fuel Growth

Finaccord noted that 61 of the 150 brokers made at least one acquisition relevant to commercial brokerage business lines, and 10 made at least 10 such acquisitions between January 2012 and June 2014.

UK-based Towergate ranked first with 48 acquisitions, ahead of Arthur J. Gallagher & Co. and HUB International with 43 each, USI Insurance Services with 27 and AssuredPartners with 26.


“The global ranking may see some important changes in the future if competitors such as Arthur J. Gallagher & Co., HUB International and Towergate continue purchasing other brokers at such a rapid rate,” said Bergmann.

“In particular, given some of the acquisitions announced recently by Arthur J. Gallagher & Co, which include Noraxis Corp. in Canada and The Oval Group in the UK as well as OAMPS Insurance Brokers, the U.S.-based brokerage may substantially shorten the gap to Willis which is currently ranked third,” said Bergmann.

Commercial Lines Revenue Breakout

For a majority of the 150 brokers in the ranking, commercial non-life insurance is the most important source of revenues.

Of those 150 brokers, 22 of them earned more than 90 percent of their total revenue from commercial lines in 2013, while this activity made up at least half of the revenue for 122 brokers.

When ranked according to the proportion of commercial non-life brokerage revenues secured outside of their home market, Willis came in first with a figure of 90 percent in 2013.

Willis was followed by Howden Broking Group (80 percent); JLT Group (78 percent); and RKH Group (74 percent), meaning that the top four groups by this measure were all UK-based firms.

In total, nine groups earned more than 50 percent of their commercial non-life brokerage revenues from international markets in 2013.

Finaccord is a market research, publishing and consulting company specializing in financial services. It provides information about activity in the UK, Europe and globally.

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at
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Regulatory Risk

Leading on Compliance

Corporate risk managers are well positioned to take the lead on compliance responsibilities.
By: | November 3, 2014 • 7 min read

There has been a long-standing debate about where compliance responsibilities should fall in an organization, but with the spread of enterprise risk management (ERM) in particular, corporate risk managers are increasingly being seen as the natural owners of compliance.

“I like to use an umbrella as the analogy for ERM,” said Grace Crickette, senior vice president, chief risk and compliance officer for Emeryville, Calif.-based AAA Northern California, Nevada and Utah. “Compliance comes under it because non-compliance is a risk event.”

Grace Crickette, senior vice president, chief risk and compliance officer for Emeryville, Calif.-based AAA Northern California, Nevada and Utah

Grace Crickette, senior vice president, chief risk and compliance officer, AAA Northern California, Nevada and Utah

“The focus of compliance is on governance whereas ERM looks at risk holistically as the ability of the organization to identify, manage, monitor and mitigate corporate risks,” Crickette added.

In the compliance realm, risk management can help all departments that have some compliance responsibilities on a particular regulation to coordinate with each other.

“One of the advantages risk management has over individual departments in an organization is that they have a bird’s eye view of the complete organizational structure and who is responsible for what,” said Elizabeth Carmichael, director of compliance and risk management at Five Colleges Inc. at Mount Holyoke College in South Hadley, Mass. “This approach can ensure that everyone is brought into the compliance conversation who should be there.”

David Theron Smith, divisional vice president, risk management for Charlotte, N.C.-based Family Dollar Stores Inc. sees two key types of compliance in an organization.

The first is regulatory compliance, which is, no bones about it, compliance that you’ve got to do or you’re in violation of some statute.


Then there is what he calls corporate compliance, which is not necessarily dictated by statutes but by processes or procedures in support of corporate strategic initiatives.

“Corporate compliance speaks more to making sure we are executing a strategic risk management initiative in the organization or a strategic process within a department in support of the mission,” said Smith. “Perhaps you could call this ‘corporate brand compliance.’ ”

In a mature, sophisticated organization, risk management is understood to be very strategic rather than compliance or audit driven, Smith added.

At Pleasanton, Calif.-based supermarket chain Safeway Inc., Vice President of Risk Management William Zachry sees himself and his team as “enablers” of the company’s compliance network.

“We’re working very closely with them but they have to own it,” he said. “My team’s job is to make sure we provide compliance with enough data and information so they’re able to have the right level of resources to focus in on the compliance requirements.”

Zachry said he doesn’t want to go through the field “whacking the people who are bad, I want to make sure we enable the people who are supposed to be doing it correctly to get it done properly.”

When risk management is functioning properly to solve compliance problems, one of its great advantages is its ability to quickly and smoothly form multi-program task forces to identify and mitigate compliance risks.

A Bridge Between Departments

At Rochester, N.Y.-based Paychex Inc., one of the first companies to put the compliance function under the risk function, one of the values of ERM gathering together individuals from various departments is that they share best practices, almost in peer group fashion.

“So let’s say you’ve got a credit manager, or a collections manager, or a compliance manager or an operating risk manager and if they’re working together as a team on a problem — many times, even though they come from a different risk family, the solution to go after that risk is similar,” said Frank Fiorille, senior director of risk management for the company, which provides payroll, HR and benefits outsourcing solutions.

Elizabeth Carmichael, director of compliance and risk management, Five Colleges Inc.

Elizabeth Carmichael, director of compliance and risk management, Five Colleges Inc.

Five Colleges’ Carmichael added that the risk management department can serve as a bridge between divisions and departments to insure that all of the compliance requirements are appropriately addressed within the institution.

“Where third-party [non-governmental or audit] complaints or claims arise from compliance failures, particularly those that involve students or visitors to the campus, one cause can be communication failures between divisions and departments,” she said.

Fiorille said that an enterprise risk management discipline that includes compliance considerations “forces you to take all these risks in a funnel per se and then they go through a pipeline and then you’re categorizing them all and you’re rating them based on impact and probability and velocity and all this other stuff so it then spits out a risk heat map, so you can see which are the big ones you want to go after versus the little ones that pose very low risk.”

Although Paychex is not as heavily regulated as a bank, its products and risk challenges are similar to a financial institution, he said.

“So it seemed logical to bring together groups that are looking at the regulatory risks to team up with folks looking at credit risk and operating risk and reputational risk and the other kinds of things we manage on a day-to-day basis,” Fiorille said.


Risk management has an advantage over compliance in two important ways: access to top management and access to money, said Glenn Klinksiek, knowledge center content manager for the Bloomington, Ind.-based University Risk Management and Insurance Association (URMIA) and former assistant vice president for risk management and audit at the University of Chicago.

“I think risk management might be better situated organizationally to advocate for more dollars to get better compliance.” — Glenn Klinksiek, knowledge center content manager, University Risk Management and Insurance Association

“Often, risk management departments have access to senior management and that’s where oftentimes improvements need to be pushed from the top down, so that’s an advantage risk management departments have,” Klinksiek said.

Also, risk management departments are more often than not involved in the financial function of an organization.

“And compliance often means increased expense for whatever fixes are necessary and so sometimes in looking at ordinary department budgets there might not be an appreciation for what the importance of the increased expense is,” Klinksiek said.

“I think risk management might be better situated organizationally to advocate for more dollars to get better compliance,” he added.

Carmichael stressed the value of an ERM-type approach in establishing clear lines of communication within an organization.

“Clear communications across the board is one of the most important things that risk management can do, to make sure that different departments are talking to each other,” she said.

Smith noted that the success of ERM depends on ERM’s broad acceptance by all business silos within the organization and the recognition of the value ERM brings to each business unit, to the corporation’s bottom line and the corporate brand.

But too many organizations still view ERM as a compliance-based, audit-based function, he noted. “It becomes a ‘check the box’ exercise, something to get through, to make internal audit and the board of directors happy rather than driving a daily way of management and business execution,” he said.

Smith added that he believed the heart of a successful ERM initiative is grounded in a collaborative relationship between risk management and internal audit, with risk management taking the leadership role because it has the overall risk management experience, resources, understanding of the financial impact of decision-making and strategic risk program development.

Managing risk on an interdepartmental basis is an important part of the job, Fiorille said.

“Risks are continuing to evolve and change and rarely, if ever, fit squarely into one discipline, so it’s critical to ensure your risk apparatus can adjust and adapt as needed,” he noted.

If you’ve got one group responsible for looking at regulatory risk and another that’s managing all the other risks working collaboratively, from a flow and synergy standpoint it just makes sense, he said.


ERM is particularly helpful because it can be applied to help a risk manager effectively manage compliance and regulatory risk on a frequent basis, which is essential given the pace of regulatory and technology change, Fiorille said.

“Compliance risks sometimes can go to the top of the list so you can shift resources or put some focus on that risk versus some of the other risks,” he noted.

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at
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Substance Abuse

This Is Your Doc On Drugs

Addicted health care professionals are part of the national issue of prescription drug abuse, but the hardest to find and treat.
By: | October 15, 2014 • 7 min read

About 10 years ago, when Johnson City, Tenn., physician Stephen Loyd was practicing internal medicine, often in an intensive care unit, he was popping about 100 opioid pills a day, every day, ingesting mainly oxycodone and Vicodin.


“You’d think that if a person was taking 100 pills a day like that others would know,” Dr. Loyd said. “But six weeks before I went into rehab, I stood at a medical students’ graduation ceremony where I was honored as one of 10 faculty members out of 100 who had the most influence on the students’ previous four years of education.”

Today, a recovering addict, Dr, Loyd is the 2014 Advocate for Action for the White House’s Office of National Drug Control Policy.

The scariest thing about his heavy drug addiction, Loyd said, “was that I thought I was a better doctor. I thought I was sharper, that I didn’t need to sleep, that I didn’t need to eat. I thought I could go longer and see more patients.”

In fact, his condition was worsening, though none of his colleagues wanted to question it.

Dr. Stephen Loyd, 2014 Advocate for Action for the White House’s Office of National Drug Control Policy

Dr. Stephen Loyd, 2014 Advocate for Action for the White House’s Office of National Drug Control Policy

“Nobody said anything to me,” said Loyd, who is now chief of medicine at the Mountain Home VA Medical Center. “They didn’t want to hurt my livelihood; they didn’t want to hurt my practice.”

Finally, it was his father who intervened on his behalf. “The truth of the matter was that I was going to die,” Loyd said. “And not only that, but there was the possibility of hurting a lot of people. Now, it makes me sick to think of the damage I could have done to other people.”

Today, in addition to his work with the White House and his practice, Loyd lectures on the dangers of drug abuse in the medical profession.

Epidemic of Abuse

Almost every day, medical professionals in the United States — from doctors to nurses to pharmacists — are censured for narcotics abuse, resulting in harm to themselves and sometimes, their patients.

These individual actions are part of what the Centers for Disease Control and Prevention has classified as a national epidemic of prescription drug abuse.

Video: Dr. Stephen Loyd talks to USA Today about his addiction.

According to the latest figures from the CDC, one in 20 people aged 12 or older has used prescription painkillers for non-medical reasons, and more than 2.1 million people in the country are addicted to opioid painkillers.

Prescription painkiller abuse is estimated to cost the United States more than $125 billion annually.

Consumer Watchdog, a California citizens’ advocacy group, said it examined federal data on the combined problem of alcohol and drug abuse by medical professionals and determined that 500,000 medical professionals in a given year self-report that they abused alcohol, prescription drugs or illicit drugs.

“This is according to federal data and yet we don’t have any way to detect this,” according to Consumer Watchdog. “We don’t have any way to stop doctors and other medical professionals from this activity.”

State-Level Oversight

Several factors contribute to a prescription painkiller epidemic in the health care field, said Joanna Shepherd-Bailey, a professor at Emory University School of Law in Atlanta.


“A few rogue physicians and pharmacists enable drug abusers by illegally prescribing or supplying controlled substances,” said Shepherd-Bailey. “Other physicians do not have adequate training to recognize and address prescription drug abuse, and as a result, prescribe painkillers to illegitimate patients.”

Substance abuse among physicians, nurses, dentists and pharmacists can affect their personal lives, but it often is also linked to medical errors, liability and a decline in patient safety.

To counter such abuse, Minnesota Gov. Mark Dayton signed a new law in May that will tighten oversight of problem nurses and other licensed health care providers.

Provisions include requiring employers to report nurses who have stolen drugs, and requiring the state drug monitoring program to provide more data to the state Nursing Board about nurses who have harmed patients and stolen drugs.

Video: From 2003-2007, one-quarter of nurse disciplinary issues were traced to drug abuse in Nebraska.

One crucial aspect of the new legislation is tightening regulations to make it easier for health licensing boards to immediately suspend a health care worker if the board believes the person “presents an imminent risk of harm.”

“We did as much as we thought we could because legally, of course, a person has due process so there has to be a balance between a person’s right to due process and the need of the public to be safe from persons who might not be safe practitioners,” said Rep. Tina Liebling, D-Rochester, a key architect of the legislation and chair of the state’s House Health and Human Services Policy Committee.

“We did tighten things up considerably. We put in an immediate review by the board and also language that says if there’s an imminent risk of harm, they must temporarily suspend a person’s license.”

Federal Action

On a national level, the federal Drug Enforcement Administration (DEA) has proposed new restrictions that would change regulations for some of the most commonly prescribed narcotic painkillers.

The DEA proposal, open for public comment since March, would specifically affect hydrocodone-combination pills, also known as opioids, which combine hydrocodone with less potent painkillers such as acetaminophen.

Under the proposed regulations, patients would have to have a written prescription from a doctor — instead of a prescription submitted orally over the phone. Also, refills would be prohibited. Patients would have to check in with the doctor to get another prescription.


Drug-abusing health care professionals, however, can be harder to detect and deter. According to the National Council of State Boards of Nurses, “Although a drug user would usually tend to experience a decrease in work performance, or might be frequently absent, health-care professionals who are abusing drugs tend to not show impairment related to job performance until they have already developed a significant substance abuse problem.”

Detecting Abuse

Numerous state governments have what are called Prescription Drug Monitoring Programs (PDMPs). But according to Emory University School of Law’s Joanna Shepherd-Bailey, many of the programs suffer from inadequate data collection, insufficient interstate data sharing and constraints on sharing data with law enforcement and state agencies.

By contrast, third-party prescription payment systems run by pharmacy benefit managers (PBMs) or health insurers have been effective in dealing with prescription drug abuse by health care professionals.

Drugs paid for with cash are not processed by PBMs or insurers, allowing drug abusers, including health care professionals, to evade detection.

However, these systems do not currently process all painkiller prescriptions. Drugs paid for with cash are not processed by PBMs or insurers, allowing drug abusers, including health care professionals, to evade detection.

Shepherd-Bailey said that a national drug reporting plan building on existing PBM networks that are augmented to record cash purchases could be significantly more effective than existing state PDMPs in detecting prescription drug abuse by health care professionals and others.

“Such a system would close the current loophole for cash transactions and interstate purchases of prescription drugs,” Shepherd-Bailey said. “Moreover, by utilizing existing PBM systems, including data mining and advanced analytics, it could detect and deter potential drug abuse.”

Treatment Options

Though legal action is sometimes necessary, the health care profession generally aims to provide treatment rather than rely on disciplinary action to achieve recovery.

In 1982, the American Nurses Association created a resolution which urged states to create “peer assistance programs” for health care professionals as an alternative to discipline.

Since the early 1980s, all of the major professional nursing associations have advocated alternative-to-discipline programs prior to initiating more formal disciplinary proceedings.

This way, health care providers are able to focus more on treatment services rather than worry about losing their position as health care professionals.

Since the early 1980s, all of the major professional nursing associations have advocated alternative-to-discipline programs prior to initiating more formal disciplinary proceedings.

These organizations recognized that more supportive recovery efforts help keep valuable nurse practitioners in a profession facing catastrophic labor shortages.


Despite these recommendations, not all states have implemented alternative programs and there is little consistency in the approaches they use.

Another important part of successful treatment includes the use of self-help groups, such as Alcoholics Anonymous or Narcotics Anonymous, which allow for individuals to talk about their addiction stories while surrounded by a supportive group of people.

Health care professionals may also take advantage of employee assistance programs to receive individual and confidential assistance concerning issues of overcoming substance misuse in the workplace or at home.

Experts noted the need for individualized treatment. While some people may just need support from self-help groups, others may need in-patient treatment time and a change in profession to overcome their dependence on drugs.

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at
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