Young Talent Pushing Forward
Many insurance professionals say they “fell into” the industry. Our Power Broker® winners and finalists under age 40 are no different, crediting their introduction to the business largely to family members who got them an “in.” Their experiences entering and working their way up through the ranks demonstrate both the strengths and weaknesses of the industry, and paint a picture of what the future may hold.
2014 Under-40 rankings sponsored by:
Denton Christner, 36, a Power Broker® in the Gaming and Hospitality category, started working as a file clerk in his father’s Allstate agency as a high school student. He stayed with Allstate through college and eventually became an agent at the age of 21.
After agency consolidation left him and other brokers with smaller books looking for other options, he took a tip from another family member and went the independent route, joining BayRisk Insurance Brokers at 24.
Eleven years later, Christner is vice president and has helped BayRisk build its biggest new business source: a program for food truck insurance. Taking advantage of social media and online marketing, he has used the Internet as a primary sales driver, bringing InsureMyFoodTruck.com to the top of search engine results lists.
“Trying to sell commercial insurance to business owners who are oftentimes 10, 20 or 30 years my senior was very difficult. That was a big obstacle as a young agent, trying to prove my professionalism.”
— Denton Christner, vice president, Bay Risk Insurance Brokers
“It was an amazing experience; totally life-changing,” Christner said. “I pretty much ate, slept and breathed food trucks for 18 months getting it launched.”
Lindsay Roos, 30, and a Power Broker® in the Pharmaceutical category, secured an internship with Marsh as a college junior with the help of a family member. In fact, internships and early training programs are a common thread among our young success stories.
“I interned in our Morristown, N.J., office for two years,” said Roos, a vice president and excess casualty placement broker at Bowring Marsh. “It was my first real work experience, and I really liked the work and the company. Most importantly, I really liked the people.” Marsh hired Roos into a graduate training program that gave her a well-rounded and formalized immersion in the industry alongside her peers.
Kate Simons, a 28-year-old Power Broker® finalist in the Retail category, took a summer internship with Aon as a college student “without really knowing what it was at first.” But the program drew her in, opening up the world of learning opportunities that the insurance industry has to offer.
“In this job, the thing I like is that you ultimately get to learn about all the industries your clients are in, whether it’s retail, real estate, manufacturing, food, and the list goes on and on,” she said.
Like Roos, Simons participated in an early career development program at the company. The 18-month training helped her home in on what aspects of insurance most appealed to her and exposed her to key mentors, leading her to her current position as senior broker.
“I also felt that the industry had a really good focus on developing young talent and investing in the future,” Simons said.
Indeed, internships and intensive training programs continue to be key tools in bringing new grads into the fold.
Big brokers like Aon, Marsh and Beecher Carlson reach out to colleges to find prospective talent and introduce them to the industry. If all goes according to plan, those interns become full-time hires.
A year or two of initial training for new employees gets their feet wet in every aspect of the business. Those onboarding programs help young brokers find what niche appeals to them, and in what function they can excel.
For many, that process helps young professionals move on from simply “falling into” insurance to really embracing it as a rewarding and exciting career.
As evidence of these programs’ successes, notice that this year’s “Under 40” class of winners and finalists includes 60 brokers, as opposed to last year’s 40. More young brokers are thriving in the business.
“The best experience comes from clinging onto some good people who are willing to teach you.”
— Lindsay Roos, vice president, Bowring Marsh
Yet, for an industry that invests considerable time and resources in developing new talent, the concern remains that not enough young people realize the benefits of working in insurance. In spite of a wealth of opportunity, the influx of new grads remains troublingly low.
“There are not enough young people getting into insurance, unfortunately,” Christner said. “It takes a lot of convincing and hand-holding and mentorship to get new producers settled into their career.”
Roos echoed that thought, noting that most college students aren’t necessarily looking for a professional career in insurance, but end up there via a tangential skill or interest.
That’s how a career in insurance brokering developed for Blythe O’Brien Hogan, a director in the Global Fine Arts Practice at Aon. O’Brien Hogan majored in art history as an undergraduate, then pursued a master’s degree in art business at Sotheby’s Institute of Art in London. That got her interested in art protection, both for personal collections as well as in transit or on display in a gallery or museum. She eventually wrote her master’s thesis on the development of insurance and risk management for fine art.
“From there I segued into the very dynamic, but a little bit niche, risk management insurance industry for fine art collections,” she said.
Aon’s Global Fine Arts Practice, launched in 2005, allowed O’Brien Hogan, a Power Broker® in the Fine Arts category, to work more closely with all players in the art industry, from handlers, shippers, storage facilities, and conservators to appraisers and tax attorneys.
Despite being given opportunities and responsibilities early in their careers, many young brokers have had to overcome ageism in order to move ahead.
“Trying to sell commercial insurance to business owners who are oftentimes 10, 20 or 30 years my senior was very difficult,” Christner said. “That was a big obstacle as a young agent, trying to prove my professionalism.”
“It is challenging at times to get people to look past your age,” Simons said. “Being younger and still successful; sometimes, people tend to look for a little gray hair.”
Ultimately, though, a sound working knowledge of clients’ industries wins out, gaining their trust and building a positive reputation.
Seth Cohen, 30, and an Entertainment Power Broker®, worked around the challenges of youth and inexperience by focusing on educational opportunities and industry training.
“I realized I could really accelerate my experience beyond my years,” said Cohen, an entertainment area vice president with Arthur J. Gallagher. “I got my ARM and CPCU as quickly as I could. I took a UCLA filmmaking and production course that was very intensive. I continue to attend media law conferences. Staying on top of current affairs helps to stay ahead of your inexperience.”
A little persistence never hurt either.
“Hard work and perseverance, being creative and asking questions has been the way to work through all that,” Simons said.
Younger brokers also have the advantage of greater familiarity with changing technologies, which shape industry best practices in a number of ways. Social media and online marketing are becoming increasingly common and important ways to reach clients, as Christner proved with the success of his food truck program. Sophisticated data analysis and modeling are now equally invaluable items in the broker’s toolbox.
“The younger generation probably embraces it more and adapts better,” Simons said. “They have more innovative thoughts as far as asking, ‘What else can I do with this technology and data to look at things a different way?’ ”
Tips for Success
So what can entry-level brokers learn from our Under 40 winners and finalists? First and foremost: Pounce on every new venture.
“I would say take advantage of every single opportunity, meaning every chance to be involved with other professionals [in the industry],” O’Brien Hogan said.
Simons echoed that advice. “Jump on every opportunity, and there are many in the industry, but you have to make the most of them,” she said. “Work hard. Be confident.”
And that uncle, sister or cousin with experience in the field? Tap into their knowledge base, and pick mentors’ brains as often as possible.
“The best experience comes from clinging onto some good people who are willing to teach you,” Roos said.
Finally, the best brokers — no matter what their age — always have an in-depth knowledge of their customers’ industries. Specializing in areas of interest helps develop expertise that clients covet.
“Knowing the industry is key,” O’Brien Hogan said. “From all different angles — not just insurance, but all the little components that go into risk management.”
While challenges remain for the industry’s stability and growth potential, the growing number of Under 40 Power Broker® winners and finalists offers hope that the industry will remain dynamic for the future.
Listing of Power Broker Winners and Finalists Under 40:
Driving Success for GM
Al Gier, GM’s director of Global Risk Management & Insurance, felt so strongly about Elisa Black’s work in 2013 that he nominated her personally as a Power Broker®. That’s quite an endorsement. In fact, Gier and Frida Berry, GM’s manager of Liability Risk Financing, agree that not only did Black manage that critical global juggling act, but she did it with her professional, focused style.
“Elisa was instrumental in helping reduce collateral requirements and improving the efficiency of the global claims handling process,” Gier said. “Her client philosophy focuses on being prepared and setting the marketing standard at the forefront of the negotiation.”
Gier explained that any broker can negotiate with a carrier post-quote. More impressive is doing the legwork so you come to the table prepared to negotiate ahead of time, a Black trademark. Also, for a large global enterprise, he said, timing is everything. So finalizing financial negotiations early allows the time to fulfill the administrative and contractual obligations of an insured — the lifeline of most international programs.
Gier said Black is great at articulating obligations and time constraints.
Bermuda Excess Market Wizardry
With the automotive market continuing to recover, the Bermuda excess market is looking to boost premiums come renewal time. To help alleviate that pricing stress, Chris Heinicke and his Aon team do their best to negotiate with markets to keep premiums from climbing.
In 2013, Heinicke faced a specific challenge for a client that was in the midst of a claims issue with one market that had a sizable amount of capacity on the excess casualty program. The issue was on a completely separate line of business, but was enough of a problem that the client had made the decision to cut this market from all of their lines of business. That decision was made after the entire program had already been quoted at the expiring premium and there was little to no capacity left in Bermuda. Heinicke and his team worked quickly by increasing capacity with the only market in Bermuda that had something available, and then worked with the U.S. and London teams to get the terms, pricing and capacity needed to replace the market. In the end, the client was pleased with the results and impressed at the quick response.
“Chris’ knowledge of the Bermuda markets helped us structure a program with the broadest coverage,” said the liability risk financing manager from another large automaker. “We have a very good risk profile, and Chris ensures we aren’t being charged improperly.”
A risk manager from a third automaker credited Heinicke with doing a “fantastic job” in helping the company identify critical areas the Bermuda markets focus on, as well as what is needed to communicate those key areas to underwriters.
Marshalling the Marsh Resources
In this case, the product over-shipment would create a much larger balance sheet exposure than the client would normally face. Also, the client’s treasury department wanted to use the large shipment to enhance cash flow as well as its borrowing base. Kowalski found a solution involving both private insurance and governmental support to manuscript a program that not only provided vital risk mitigation, but also enhanced this client’s cash flow management needs.
To make things happen, Kowalski often collaborates with Marsh brokerage teams on a global scale — from Detroit, New York, and Chicago to Bermuda, London, Zurich and various offices throughout Asia. Along the way, he has successfully placed complex risk finance programs involving more than 73 global markets and billions of dollars of capacity for a single line of coverage.
“Michael is our client executive and we have worked together for a number of years,” said Al Gier, director, Global Risk Management & Insurance at General Motors. “He has the skills we like to see in a broker — mainly, responsiveness and delivering the proper resources quickly.”
7 Questions to Answer before Choosing a Captive Insurance Domicile
Risk managers: Do your due diligence!
It seems as if every state in America, as well as many offshore locations, believes that they can pass captive legislation and declare, “We are open for business!”
In fact, nearly 40 states and dozens of offshore locations have enabling captive insurance legislation to do just that.
With so many choices how do you decide who is experienced enough to support the myriad of fiscal and regulatory requirements needed to ensure the long term success of your captive insurance company?
“There are certainly a lot of choices,” said Mike Meehan, a consultant with Milliman, an actuarial firm based out of Boston, Massachusetts, “but not all domiciles are created equal.”
Among the crowd, there are several long-standing domiciles that offer the legislative, regulatory and infrastructure support that makes captive ownership not only a successful risk management tool but also an efficient entity to manage and operate.
Selecting a domicile depends on many factors, but answering these seven questions will help focus your selection process on the domiciles that best fit your needs.
1. Is the domicile stable, proven and committed to the industry for the long term?
The more economic impact that the captive industry has on the domicile, the more likely it is that captives will receive ongoing regulatory and legislative support. The insurance industry moves very quickly and a domicile needs to be constantly adapting to stay up to date. How long has the domicile been operating and have they been consistent in their activity over the long term?
The number of active captive licenses, amount of gross premium written in a domicile and the tax revenue and fees collected can indicate how important the industry is to the jurisdiction’s bottom line. The strength of the infrastructure and the number of jobs created by the captive industry are also very relevant to a domicile’s commitment.
“It needs to be a win – win situation between the captives and the jurisdiction because if not, the domicile is often not committed for the long term,” said Dan Kusalia, Partner with Crowe Hortwath LLP focused on insurance company tax.
Vermont, for example, has been licensing captives since 1981 and had 589 active captives at the end of 2015, making it the largest domestic domicile and third largest in the world. Its captive insurance companies wrote over $25 billion in gross written premiums. The Vermont State Legislature actively supports an industry that creates significant tax revenue, jobs and tourist activity.
2. Are the domicile’s captives made up of your peer group?
The demographics of a domicile’s captive companies also indicate how well-suited the location may be for a business in a particular industry sector. Making sure that the jurisdiction has experience in the type and form of captive you are looking to establish is critical.
“Be among your peer group. Look around and ask, ‘Who else is like me?’” said Meehan. “Does the jurisdiction have experience licensing and regulating the lines of coverage for other businesses in your industry sector?”
3. Are the regulators experienced and consistent?
It takes captive-specific expertise and broad experience to be an effective regulator.
A domicile with a stable and long-term, top-tier regulator is able to create a regulatory environment that is consistent and predictable. Simply put, quality regulation and longevity matter a lot.
“If domicile regulators are inexperienced, turnaround time will be slower with more hurdles. More experience means it is much easier operating your business, especially as your captive grows over time,” said Kusalia.
For example, over the past 35 years, only three leaders have helmed Vermont’s captive regulatory team. Current Deputy Commissioner David Provost is one of the longest tenured chief regulators and is a 25-year veteran in the captive insurance industry. That experienced and consistent leadership enables the domicile to not only attract quality companies, but also to provide expert guidance on the formation process and keep the daily operations running smoothly.
4. Are there world-class support services available to help manage your captive?
The quality of advisors and managers available to assist you will have a large impact on the success of your captive as well as the ease of managing the ongoing operations.
“Most companies don’t have the expertise to operate an insurance company when you form a captive, so you need to help build them a team,” Jeffrey Kenneson, a Senior Vice President with R&Q Quest Management Services Limited.
Vermont boasts arguably the most stable and experienced captive infrastructure in the world. Many of the leading captive management companies have their headquarters for their Global, North America and U.S. operations based in Vermont. Experienced options for captive managers, accountants, auditors, actuaries, bankers, lawyers, and investment professionals are abundant in Vermont.
5. Can the domicile both efficiently license and provide on-going support to your captive as it grows to cover new lines of coverage and risks?
Licensing a new captive is just the beginning. Find out how long it takes for the application to get approved and how long it takes for an approval of a plan change of your captive’s operations.
A company’s risks will inevitably change over time. The captive will need to make plan changes which can include adding new lines of business. The speed with which your domicile’s regulatory branch reviews and approves these plan changes can make a critical difference in your captive’s growth and success.
The size of a captive division’s staff plays a big role in its speed and efficiency. Complex feasibility studies and actuarial analyses required for an application can take a lot of expertise and resources. A larger regulatory team will handle those examinations more efficiently. A 35-person staff like Vermont’s, for example, typically licenses a completed application within 30 days and reviews plan changes in a matter of days.
6. What are the real costs to establishing and managing your captive?
It is important to factor in travel costs, the local costs of service providers, operating fees, and examination fees. Some states that do not impose a premium tax make up for it in high exam fees, which captives must be prepared for. Though Vermont does charge a premium tax, its examination fees are considered some of the least expensive options in the marketplace.
It is also important to consider the ease and professionalism of doing business with a domicile in the ongoing operations of your captive insurance company.
“The cost of doing business in a domicile goes far beyond simply the fixed cost required. If you can’t efficiently operate due to slow turn-around time or added obstacles, chances are you have made the wrong choice,” said Kenneson.
7. What is the domicile’s reputation?
Make sure to ask around and see what industry experts with experience in multiple domiciles have to say about the jurisdiction. Make sure the domicile isn’t known for only licensing certain types of captives that don’t fit your profile. Will it matter to your board of directors if your local newspaper decides to print a story announcing your new insurance subsidiary licensed in some far away location?
Are companies leaving the jurisdiction in high numbers and if so, why? Is the domicile actively licensing redomestications — when an existing captive moves from one domicile to another? This type of movement can often be a positive indicator to trends in a domicile. If companies of a particular size or sector are consistently moving to one state, it may indicate that the domicile has expertise particularly suited to that sector.
Redomestications made up 11 of the 33 new captives in Vermont in 2015. This trend is a positive one as it speaks to the strength of Vermont. It reinforces why Vermont is known throughout the world as the ‘Gold Standard’ of domiciles.
Asking the right questions and choosing a domicile that meets your needs both today and for the long term is vital to your overall success. As a risk manager you do not want surprises or headaches because you did not ask the right questions. Do the due diligence today so that you can ensure your peace of mind by choosing the right domicile to meet your needs.
For more information about the State of Vermont’s Captive Insurance, visit their website: VermontCaptive.com.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with the State of Vermont. The editorial staff of Risk & Insurance had no role in its preparation.