By JACK ROBERTS, editor in chief
BOSTON--Last week's abrupt announcement that Lexington Insurance's CEO Kevin Kelley and its president Shaun Kelly had joined up with Bermuda-based insurer Ironshore sent more than a few shockwaves throughout the industry. Kelley is a near icon in the business, in the mold of his former boss, Maurice "Hank" Greenberg, the former CEO of American International Group.
With Kelley's departure, however, AIG gave a vote of confidence to Lexington's remaining management team--all veterans of the Lexington and AIG organizations.
The team is now led by Peter Eastwood, who was named president and CEO. Eastwood, 41, has been with AIG for 18 years and spent the last five with Lexington, most recently heading up Lexington's healthcare insurance operations.
Although in his new position for only seven days, Eastwood said his first objective was to keep current management in place. He, along with his top executives, has been successful in that effort, he said.
The other top management team members, also with decades of experience at Lexington, include George Statts, Lexington executive vice president who, as divisional executive, heads up Lexington's property division; David Bresnahan, executive vice president, who is responsible for casualty; and Sanjay Godhwani, vice president with responsibility for the programs division.
"When I think of Lexington, when most people think of Lexington, they think of an underwriting company," Eastwood said during an exclusive interview with Risk & Insurance®. That won't change, he said, adding that Lexington will continue to be "a company that is underwriting risks that others might not, on terms that others might not."
"You'll find us, from an innovation point of view, going into niches long before others, and finding opportunities in those niches," he said.
The entire Lexington operation was initially shocked by Kelley's departure. Eastwood said that no one can really take his place. But he stressed that the management team will continue to foster the unique underwriting environment that has made Lexington, the largest excess-and-surplus carrier, a success. Lexington is the largest revenue generator for AIG commercial insurance, and Eastwood said its headquarters will remain in downtown Boston.
Bresnahan echoed Eastwood's focus on personnel.
"Lexington has more than 1,400 employees," the head of casualty operations said. "It's the ability of our people to respond from an underwriting perspective, and it's the ability to respond from a claims perspective. The operative term here is 'people' and keeping our people, people that not just built the brand but gave the brand value."
Bresnahan acknowledged that, in the current market environment, "the vast majority of our casualty business is being shown to the market." But, he added, "Our renewal retention has remained quite stable during the last few months."
Eastwood said, "We continue to believe that, despite the challenges faced by AIG, our customers and our distribution partners will continue to look to us to find products, services and capacity not otherwise offered in the marketplace."
He looked at the transition last week as an opportunity to "re-examine who we are as an organization."
"We're looking at our strategies in the current market to determine what's appropriate. Our strategy is fluid. You don't start out with a strategy on Jan. 1 and carry it all the way through to Dec. 31 without having it change to reflect market conditions during the course of the year," he said.
Eastwood and the management team put emphasis on collaboration and commitment.
"We have a long view on our business," Eastwood said. "And we have a long view from an employment standpoint. We're used to being nimble. We're used to being responsive. And we're used to working harder to capitalize on opportunities for the benefit of our clients."
And, he adds, "It's just what we do."
(Read the rest of the Dec. 19 People on the Move e-newsletter.)
December 19, 2008
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