Opportunities in Cuba

Greenberg on Cuba

The easing of travel restrictions to Cuba is bound to open up opportunities.
By: | May 6, 2015 • 3 min read
Havana

On a visit to Moscow in 1964, Hank Greenberg noticed a picture of a Havana office building on the desk of an official with the Soviet insurance company Ingosstrakh.

“That looks like the building where my company housed its insurance operations,” Greenberg — who was in Moscow seeking a travel risk reinsurance deal — told the official.

Advertisement




The C.V. Starr Companies had an office in Havana – pictured above – between 1943 and 1958.

“That may be,” the Soviet official replied. “Now it is the building where Ingosstrakh houses the Soviet Union’s Cuban operations,” he added.

“Please take care of that building,” Greenberg told the official. “We will get it back … soon.”

More than 50 years after Greenberg made that bold statement, as recounted in his 2013 book “The AIG Story,” the day that Starr Companies takes possession of its former property in Havana is not yet here.

“Change must come about, but how fast? I can’t answer that.” – Hank Greenberg, CEO and Chairman of the Starr Companies.

With the recent easing of travel restrictions to Cuba by the U.S. government, however, Starr Companies’ executives are checking on the condition and ownership of the building just the same.

Untangling the history of that Havana building is just one of the opportunities that are on the minds of business people in the United States since travel restrictions to Cuba were eased in January.

Greenberg expresses the hope that his company can one day re-open an insurance operation in Havana. At the same time, Greenberg said that there is much work yet to be done, on the part of both the public and the private sector, before anything like that can happen.

“Both governments have got to agree on the speed by which normalization would come into being,” Greenberg said.

Hank Greenberg CEO and Chairman Starr Companies

Hank Greenberg
CEO and Chairman
Starr Companies

Since the restrictions were eased, Greenberg reports that the Starr Companies’ travel services subsidiary Assist-Card International Holdings, which it acquired in 2011, is already seeing an uptick in inquiries from businesspeople interested in its travel protection services in Cuba.

“From what we can discern, there is a great deal of interest and a pent-up need to travel,” Greenberg said.

The hotel and restaurant business, agriculture and travel-related industries like cruise shipping and aviation are just a few of the industries that will see opportunities in nearby Cuba as relationships between that country and the United States open up.

There will also be an intense interest, Greenberg said, for people of Cuban descent who are United States citizens eager to visit their origin country.

However, more evolution in government relations must occur before many of those dreams can become a reality.

“Change must come about, but how fast? I can’t answer that,” Greenberg said.

One thing Greenberg is certain of. Free trade is the quickest route to building lasting bonds between the United States and Cuba.

“I think that where trade increases between countries generally you see change in attitudes and building better trust between countries. You learn from each other, it’s a faster way to normalize relations than anything I can think of,” Greenberg said.

Advertisement




Greenberg stressed that Assist-Card International isn’t the only U.S.-based insurance company or subsidiary in the travel risk business.

The Starr chairman indicated though that he expects his company to be a strong competitor.

“The challenges of doing business in Cuba are substantial,” Greenberg said.

“But Starr is well-positioned and prepared to leverage our relationships and global network to support our clients’ entry into this market.”

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at dreynolds@lrp.com.
Share this article:

Column: Risk Management

A Betrayal of Trust

By: | May 6, 2015 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at riskletters@lrp.com.

As part of my business management training, I took executive leadership courses. I lean on information from one course in particular every day. The course was entitled: Trust.

As a class, we debated the idea of trust and the importance of building trust with staff and within our organizations.

A question was posed: How does one build trust with another person specifically? Answers flew around the class: One needs to show integrity, be likeable, be good, to care, to listen, to acknowledge others. All the answers didn’t seem quite right.

Advertisement




The instructor interjected: “Trust is built when one demonstrates painfully consistent behavior.”

You don’t have to like someone to trust them. Take Mr. Grumpy-Pants who sits next to you in the office, who is gloomy and unpleasant every day. He may drag you down, but you probably can count on him. As opposed to Ms. Two-Face, who is sweet one day while the next she is stabbing you in the back. Hard to feel steady and trust her next move.

Trust problems cannot be solved by applying more technology. Trust issues are solved by actively building trust — starting with trust between pilots and their airlines.

Think of people you have difficulty trusting. Likely, it is because of their unsteady, unexpected or inconsistent behavior. Their surprising volatility impedes your ability to trust them.

This idea of trust has been front-of-mind for me lately. I write this column six days following the incomprehensible loss of 150 people on Germanwings flight 4U9525.

I watched hours of news footage that attempted to reveal what may have transpired that tragic day. Initially, the hours of analyses resulted in suggestions of increased safety measures to remove the risk of such an event ever occurring again. New technical measures were recommended including pilotless planes, remote aviation ability and flight-deck video surveillance.

Then, panel experts debated “failures” in aviation processes and safety systems including the flight deck door — a door system that was purposely redesigned post-911 to protect at all costs the most important people on the plane, the pilots.

It was suggested that the flight deck door safety system failed because the co-pilot was able to take advantage of the known impenetrability of the door to help perpetrate his plan. This insinuation bothered me on many levels.

Safety systems have goals. The design of a safety system starts with the question: What are we trying to protect? The flight deck door was designed to protect the pilots from unwanted intruders so they can do what we trusted them to do. Safely fly the plane.

The door system on the Germanwings flight did not fail. It behaved as it was designed. A redesign of the flight deck door will not reduce the risk of another pilot murder-suicide. The aviation regulator’s new requirement that at least two crew members remain in the flight deck at all times may add a new barrier but gives no guarantee.

Advertisement




The failure here was that of the co-pilot. He was in the position of utmost, blind trust for passengers. He deeply betrayed that privilege, a privilege bestowed on him by so many people. He failed; the safety systems did not.

Our interdependence with others forces our need for continued trust. Trust problems cannot be solved by applying more technology. Trust issues are solved by actively building trust — starting with trust between pilots and their airlines. If we are to revisit anything to improve risk and safety, let’s ensure there is trust — painfully consistent organizational behaviors that make flight crews truly feel safe to self-declare problems if need be. In that I trust.

Share this article:

Sponsored: Liberty International Underwriters

Making the Marine Industry SAFE

A new initiative to help marine clients address safety risks leverages a customized, expertised approach.
By: | May 8, 2015 • 5 min read
SponsoredContent_LIU

When it comes to marine based businesses there is no one-size-fits-all safety approach. The challenges faced by operators are much more complex than land based businesses.

The most successful marine operators understand that success is dependent on developing custom safety programs and then continually monitoring, training and adapting.

After all, it’s not just dollars at stake but the lives of dedicated crew and employees.

The LIU SAFE Program: Flexible, Pragmatic and Results Driven

Given these high stakes, LIU Marine is launching a new initiative to help clients proactively identify and address potential safety risks. The LIU SAFE Program is offered to clients as a value added service.

Richard Falcinelli, vice president, LIU Marine Risk Engineering

Richard Falcinelli, vice president, LIU Marine Risk Engineering

“The LIU SAFE program goes beyond traditional loss control. Using specialized risk assessment tools, our risk engineers function as consultants who gather and analyze information to identify potential opportunities for improvement. We then make recommendations customized for the client’s business but that also leverage our knowledge of industry best practices,” said Richard Falcinelli, vice president, LIU Marine Risk Engineering.

It’s the combination of deep expertise, extensive industry knowledge and a global perspective that enables LIU Marine to uniquely address their client’s safety challenges. Long experience has shown the LIU Risk Engineering team that a rigid process will not be successful. The wide variety of operations and safety challenges faced by marine companies simply cannot be addressed with a one-size-fits-all approach.

Therefore, the LIU SAFE program is defined by five core principles that form the basis of each project.

“Our underwriters, risk engineers and claims professionals leverage their years spent as master mariners, surveyors and attorneys to utilize the best project approach to address each client’s unique challenges,” said Falcinelli.

SponsoredContent_LIU

The LIU SAFE Program in Action

When your primary business is transporting dry and liquid bulk cargo throughout the nation’s complex inland river system, safety is always a top concern.

The risks to crew, vessels and cargo are myriad and constantly changing due to weather, water conditions and many other factors.

SCF Marine, a St. Louis-based inland river tug and barge transportation company and part of the Inland River Services business unit of SEACOR Holdings Inc., understands what it takes to operate successfully in these conditions. The company strives for a zero incident operating environment and invests significant time and money in pursuit of that goal.

SponsoredContent_LIUBut when it comes to marine safety, all experienced mariners know that no one person or company has all the answers. So in an effort to continually find ways to improve, SCF management approached McGriff, Seibels & Williams, its marine broker, to see if LIU Marine would be willing to provide their input through an operational review and risk assessment.

The goal of the engagement was clear: SCF wanted to confirm that it was getting the best return possible on its significant investment in safety management.

Using the LIU SAFE framework, LIU’s Risk Engineers began by sending SCF a detailed document request. The requested information covered many aspects of the SCF operation, including recruiting and hiring practices, navigation standards, watch standing procedures, vessel maintenance standards and more.

Following several weeks of document review the LIU team drafted its preliminary report. Next, LIU organized a collaborative meeting at SCF’s headquarters with all of the latter’s senior staff, along with McGriff brokers and LIU underwriters. Each SCF manager gave an overview of their area of responsibility and LIU’s preliminary findings were reviewed in depth. The day ended with a site visit and vessel tour.

“We sent our follow-up report after the meeting and McGriff let us know that it was well received by SCF,” Falcinelli said. “SCF is so focused on safety; we are confident that they will use the information gained from this exercise to further benefit their employees and stakeholders.”

“It was probably one of the most comprehensive efforts that I’ve ever seen undertaken by a carrier’s loss control team,” said Baxter Southern, executive vice president at McGriff, which also is based in St. Louis. “Through the collaborative efforts of all three parties, it was determined that SCF had the right approach and implementation. The process generated some excellent new concepts for implementation as the company grows.”

In addition to the benefits of these new concepts, LIU gained a much deeper understanding of SCF’s operations and is better positioned to provide ongoing loss control support.

“Effective safety management is about being focused and continuously improving, which requires complete commitment from top management,” Falcinelli added. “SCF obviously is on a quest for safety excellence with zero incidents as the goal, and has passed that philosophy down to its entire workforce.”

“SCF’s commitment to the process along with LIU’s expertise was certainly impressive and a key reason for the successful outcome,” Southern concluded.

There are many other ways that the SAFE program can help clients address safety risks. To learn more about how your company could benefit, contact your broker or LIU Marine.

SponsoredContent
BrandStudioLogo
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.




LIU is part of the Global Specialty Division of Liberty Mutual Insurance.
Share this article: