Anthony Avitabile has been a big baseball fan ever since he was a little kid growing up in Queens, N.Y. Although his close friends and associates know which team he roots for, he's reluctant to let too many people in on that secret.
That's because as risk manager for Major League Baseball, he doesn't want anyone to think he plays favorites--he wants every team to be a winner when it comes to risk management.
It was that kind of diplomacy and tact that helped him pull off a risk management coup in 2002. In the space of little more than six months, he got baseball's 30 different clubs to agree to form a mandatory group captive and buy insurance on a collective basis.
This was no mean feat. It meant getting all 30 clubs, their chief financial officers and owners, to put aside differences of opinion, open up their vaults and dig out reams of financial data, and then agree on little details like how to split up the insurance premiums amongst themselves.
"You need State Department credentials to get some of that (financial) information," says Jonathan Mariner, CFO of Major League Baseball. And yet after months of careful planning and preparation, Mariner says, "we not only got their buy-in, but we got that without any fights of any sort."
It wasn't just a matter of getting the clubs on board with the idea. The insurance brokers and insurance marketplace at large also took a dim view of the project at first.
At the end of the day, Avitabile proved the skeptics wrong and got the group captive off the ground. It was a huge achievement and one that he also says was the biggest risk management challenge of his life.
"There were challenges internally in convincing the clubs that this is the right thing to do, there were challenges in the marketplace to overcome impediments that we faced out there," Avitabile says. "Certainly the largest challenge was to get this program off the ground."
MLB has saved $40 million over the last three years after forming a captive known as MLB BASES, which stands for MLB Burlington Assurance Exchange Society. The captive is domiciled in Vermont and was launched in January 2003.
BALANCING COMPETING INTERESTS
To pull it all off, he adroitly balanced the clubs' competing interests, carefully sidestepped political landmines, kept the process open and transparent, and made each club believe he was their own, individual risk manager.
"Anthony has no agenda. Anthony serves his clients; he absolutely serves his clients. He is the best insurance broker I've ever worked with--and he's never been an insurance broker," says Larry Geneen, who was an owner of broker Johnson & Higgins, where he worked for 23 years before it was acquired by Marsh & McLennan. He is now an independent consultant with Lawrence Geneen & Associates in Scarsdale, N.Y., and has worked closely with Avitabile in setting up the captive.
As a kid, Avitabile says he was not really thinking about a career in risk management and insurance, even though his father worked for MetLife for 34 years and his uncle, Pat Antonacci, is an insurance consultant.
"My uncle was in the business his whole life, and I never knew that until I got into the business. That's how little I knew about it," Avitabile says.
Avitabile, who is 32, married and now living in Kenilworth, N.J., decided to major in finance at Iona College in New Rochelle, N.Y. While there, he got a solid grounding in the basics of finance, but nothing specifically about insurance or risk management.
He got his start in insurance in the summer between his junior and senior year when there just happened to be an internship available in the risk management department of MetLife.
"MetLife really wasn't by chance, but risk management was," Avitabile says. After graduating from college, he says his best offer was from MetLife, and he then proceeded to get his CPCU designation. After a year or two with MetLife, he moved on to take a position at Ingersoll Rand, where he worked until February 2000 and ended up as assistant risk manager.
It was then that he learned that there was an opening at Major League Baseball--from his uncle, Pat Antonacci, who just happened to be working as a risk management consultant for the league at the time.
Avitabile recalls his interview with the former CFO of Major League Baseball. "I sort of closed the interview with my affinity for the game, and he quickly told me that if that was the reason I was taking this position, to rethink my decision-making process because at the end of the day, it's a job . . . like any other job," Avitabile says.
"That's true. However, I still believe if you are going to be in a profession, why not do it in an industry you are interested in?" Avitabile says.
In the six years since he joined Major League Baseball, his job has changed dramatically. He started off as a risk management and financial analyst, spending only a small part of his time on risk management. That's because at the time, he was only responsible for the league office itself, and those risks were fairly mundane. Today he is the full-time director of risk management for Major League Baseball.
THE 2002 BREAKTHROUGH
The watershed was in 2002 when Jonathan Mariner, the former CFO of the Florida Marlins, came on as the CFO of Major League Baseball. It was Mariner's idea for the league to set up a captive and buy insurance on a group basis. He put Avitabile in charge of the project in the summer of 2002 and gave him the almost impossible task of getting the job done before the end of the year.
Just as it was diplomacy and tact that paved the way for agreement among the 30 clubs about the captive, it was Avitabile's drive and determination that helped him get the job done in time.
After many long and stressful days working out premium allocations and negotiating with the clubs, Major League Baseball got its group program off the ground with not a minute to spare. The owner vote to approve the concept was on December 19, 2002. The program inception date was Jan. 1, 2003.
"The vote was just to approve it in concept," Avitabile says. "Then there was the matter of binding up all the coverages that were put out there conceptually and all the work that entails," he says.
"One of our challenges in our industry is that the clubs shut down the week between Christmas and New Year's, which made it doubly hard. There really wasn't much vacation there for me because I was working from home diligently trying to sew up the loose ends," he says.
All of the binders went out on Dec. 31, 2002, he says, and when the clubs came back to their offices after the holidays they had all of the confirmation of coverages.
It would have been completely understandable if Avitabile and the rest of the office heaved a sigh of relief and then went out for lunch or popped open a bottle of champagne to celebrate when the job was done.
But Avitabile says there's been no time to celebrate. There's still too much work to do.
"We haven't celebrated yet," Avitabile says. "If we continue to drive the costs of this program down, especially in the retained-loss area, I will be celebrating. Because every dollar saved on the loss side is a dollar in the clubs' pockets."
His hard work has not gone unnoticed. "He is an absolute insurance fanatic. He is relentless in his pursuit of the answer, so to speak, of getting things done right," says MLB's CFO Mariner.
"It's been his focus on working for all 30 clubs as their de facto risk manager. That really defines how he operates. They literally all think that they, 30 different clubs, have him as their risk manager," Mariner says.
Mariner says he wants to make sure Avitabile sticks around awhile. "I just have to make sure I keep paying him enough--otherwise, I'd have to hire three people," Mariner says.
In addition to getting the group purchasing program off the ground, Avitabile did a stellar job of closing down the old, voluntary captive that Major League Baseball used to use, Mariner says. Avitabile also helped create a workers' compensation quality council so that the clubs could share best practices and learn from each other.
"One of the things he did, which I think was maybe one of the most important, was put together an educational program where we went out to the teams, went out to spring training, we taught best practices, we brought in outside resources for them," says Geneen.
These days, Avitabile spends most of his time working with clubs to find ways to control losses and reduce risk. He says he likes trying to come up with creative solutions to problems and getting to know the people and all of the various parts of the organization.
"I equate it sometimes to the legal side of the house that really needs to know everything that's going on," he says. "I think risk management has a similar responsibility within an organization and I enjoy interacting with the people here at baseball and at the club level," he says. It's hard to argue with the numbers. By getting the group purchasing program up and running, Avitabile has helped saved the organization $40 million over the last three years and has made sure that the clubs--and their players--have the workers' comp, property and liability coverages that they need.
"Anthony really believes everything he does is for the benefit of his members, and his members are the teams," Geneen says. "So if he saves 30 cents, it's a penny going to every team, and if he spends 30 cents, that's a penny he's taking away from them," he says.
But, Geneen says, it's important to understand what's at the heart of it.
"Anthony believes his job is to protect the players. It's not to reduce the comp losses, it is to protect the players."
lives in New Jersey.
October 15, 2006
Copyright 2006© LRP Publications