By CYRIL TUOHY, managing editor of Risk & Insurance®
Had you hung around the XL Insurance booth at this year's Risk and Insurance Management Society Inc. meeting in Orlando, you would have noticed the company's Chief Underwriting Officer John R. Glancy.
If he appeared slightly disheveled, even a little harried, he deserved to be cut some slack, as he was likely coming off back-to-back meetings with colleagues and clients who'd flown in from around the country just to meet with him.
One of the longest-serving, big-carrier insurance underwriters working today, Glancy's been underwriting risks for more than 30 years, first for Aetna, then for Travelers, then for CNA, then for Design Professional Insurance Co., of which he is a former CEO and finally for XL Insurance.
In a world where underwriters tend toward reserved, wear conservative suits and never stray far from the familiar habits of the button-downed set, Glancy's atypical. He doesn't sweat too much of the wardrobe details. Hell, he doesn't even wear socks.
His responsibilities have taken him around the country and around the world, often for quick jaunts of two or three days, to Zurich, Munich, London, Paris, Sao Paolo, Milan, Shanghai and Tokyo.
It was no different for him this past Memorial Day Monday. That night, Glancy flew to Zurich for a meeting with Swiss Re the following afternoon. The discussion was about the upcoming casualty treaty renewals, and then it was on to dinner. The next morning, Glancy flew to Munich for more casualty renewals, before flying back on the red eye to the United States.
It's been a lot of work, Glancy readily acknowledges, many years of 12- to 16- hour days. Clients require his attention and the kind of risks XL Insurance likes to underwrite, low in frequency but high in severity, are usually very technical.
With hard work also comes a good living. Glancy lives well, especially for a man who had no intention of entering the insurance business in the first place. His first love was advertising: creative, fast-paced, consumer-oriented, but also volatile--too volatile, as it turned out.
"I really liked it, but people were getting hired and fired all the time," he says.
If Glancy in the beginning had no love for the insurance business, the business held sway over the family. His father, an agent, managed to pay for Glancy to go to private school. Glancy's brother, Tommy, eventually ended up as head of claims at Worcester Insurance Co. His other brother, Kevin, is executive vice president of a Harleysville Insurance Co. subsidiary in Richmond, Va.
"It probably made for some of the most boring dinner discussions that we had," Glancy says. "In fact, our wives would kick us away from the table to go watch football instead of talking insurance."
Perhaps, but at least the men in the family were home in time for the guffaws and the anecdotes that accompany dinner conversation. With Glancy's advertising colleagues being shown the door every few months, Glancy saw his father and his father's friends leading more stable, if less glamorous, lives.
"They were good people," says Glancy, recalling the days before he took the plunge into the insurance industry. "They were all able to pay for their kids to go to college. None of them were really rich, but they were all good people and so I said there must be something to this."
So, after graduating college in 1973, Glancy entered Aetna's training program in Hartford, Conn. It was a good time to join, as Aetna was then among the A-list insurance carriers that still offered some of the best training programs the industry had to offer.
Young college graduates like Glancy were given the opportunity to learn the industry, all on someone else's dime. The budding underwriter jumped at the chance, starting as a casualty underwriter.
Looking back, the decision to start in casualty was a fairly arbitrary one, a mix of what a new trainee liked to do most and where young executives-in-training were most needed at the time. In any event, there would be plenty of time to change later, which turned out to be exactly the case.
Two years later, Glancy, still cutting his teeth in whatever way he could, volunteered to help Aetna start an excess liability and self-insured workers' compensation unit, where he stayed for another two years.
His first break came when he jumped to Aetna's property/casualty Fortune 500 business, where he was eventually promoted to run the large account office, based in Philadelphia, where for the first time he was faced with nonrenewals en masse, the equivalent of mass layoffs in the labor market.
"We had 38 accounts in the office in Philadelphia and we had to nonrenew 36 of the accounts and we had to rebuild the office," he says. It was the kind of mission this underwriter would become known for: rebuilding teams of underwriters as carriers kept pace with the changing needs of the marketplace.
Before long, Glancy had made a name for himself as the go-to man his bosses could rely on to retool local and regional underwriting units. After 22 years with Aetna, he left to run CNA's large-account business in the wake of Travelers' purchase of Aetna's wholesale facility.
The opportunity for Glancy was fortuitous. CNA had just completed the acquisition of Continental Insurance Co., bringing together two sizable national account books, the kind of accounts that offered Glancy a challenge in terms of scope, complexity and reward.
"It really was a good offer, and it was something I'd really wanted to do--run a full national organization and I'd never really lived in Chicago," he says. Glancy found himself running a book of business worth as much as $1.2 billion. "For a while, I was kind of the Mr. Fix-It guy," says Glancy.
Glancy gets most excited when he's fixing problems facing the large account business. The complexity of the risks faced by the largest companies often require very different approaches, even if the companies are direct competitors.
"I could write Pepsi-Cola and I could write Coke, and they were really two different risks in the way they operated and the way they presented, the way the bought risk. And it was just really fascinating, and it gave you opportunities to learn different businesses," says Glancy.
Sometimes the solution comes in the form of an insurance product, sometimes it comes in the form of a capital markets vehicle. At other times, it requires reaching into the alternative risk back of tricks. For others, insurance is just a tax play.
And so it was at CNA, the Chicago-based underwriting giant, where Glancy ended up having a five-year run, helping risk managers at the largest companies in America fix, reposition or start their insurance programs anew. In the end, it was a new boss and a subsequent falling out that forced Glancy to take a walk--literally.
"I'd made a promise to myself earlier in my life that I would never be unhappy for a day at work," Glancy says. "I might get upset but I would never be unhappy. Twelve-hour days don't get any better if you are unhappy and so I tried it for a while with this new boss and I finally walked in and told him he had no clue." Glancy walked into his boss' office and said good-bye.
The hiatus--about five months--allowed Glancy to spend time with his two young children, bringing them to school and watching them grow as young athletes on the baseball diamond and the soccer field.
Having built up a network of friends, colleagues and peers, it wasn't long before two friends, who'd just been put in charge of Royal & Sun Alliance, asked if he was interested in running a small, Monterey, Calif-based carrier underwriting professional liability exposures for architects, designers and engineers.
In terms of volume--a book of business one-fifth the size of his responsibilities at CNA--the new job was a step down. In terms of sitting atop the totem pole, Glancy couldn't have asked for more. He was CEO of Design Professional Insurance Co., a specialty underwriting company with 25 percent to 30 percent market share.
At last, 29 years after graduating from college in 1973, Glancy was running his own underwriting shop.
"Many in his shoes may have seen Design Professional Ins. Co. as a business that had been successful in its first few decades but one that could not withstand the test of time in an increasingly competitive market," says Andrea Mennenga, business development manager with DPIC, in an e-mail. "Not so with John Glancy. He deployed adisarming manner mixed with challenging questions to get to the root ofissues andthe motivations forpast decisions."
Royal & Sun Alliance, looking to quit the U.S. market in 2003-2004, was about to shut down Design Professional Insurance Co. but Glancy stepped in and convinced his bosses the company could be sold. It was. XL Insurance, a global specialty underwriter, bought the professional liability shop, and DPIC, now headquartered in Hartford, resides under the XL umbrella.
With his expertise in underwriting exposures for architects and design professionals, Glance was put in charge of the line for XL, an assignment lasting about 18 months before he was asked to run the company's entire professional lines business.
Two years later, Glancy was put in charge of all underwriting product lines: property, casualty, specialty and professional lines. A consensus builder, Glancy is given credit for a "folksy-style delivery" that almost always yields better results than the hard-charging, my-way-or-the-highway approach.
Alex Blanco, chief underwriting officer of DPIC, recalled meeting Glancy for the first time. Glancy pulled no punches: the business was about making money and delivering shareholder value, supporting the right decisions no matter how difficult and stamping out ineptitude.
The speech was delivered "all with the visual of his collar pulled up in full mast, likely a holdover from his prep school days," Blanco says.
Blanco credits Glancy with distilling complex issues to common denominators, which helps cut through what is important and what is tangential. "He aptly removes emotion from the equation in order to render sound and quick judgment," says Blanco, in an e-mail. "There are no sacred cows."
Glancy, by his own admission, is into underwriting "tough stuff." He likes it that way, having long ago tasted the plain-vanilla underwriting that typically comes with workers' comp, for example.
"Within property, we write tough, technical risk," he says. "If you're an easy risk, don't come to us. Casualty, we write tough stuff. We put out big limits." XL's specialty unit, for example, underwrites aqua farms and private zoos, which Glancy had no clue about before he joined the company.
"That's what we are, a technical underwriting company that loves complex risks and really likes to provide solutions to that complex risk," he says. "That's the DNA of XL and that attracts certain underwriters and alienates others."
Fish farms, zoos with exotic animals, space satellites--all tough risks, for sure but risks that command higher premiums as well and therefore greater profits when the claims are low.
Some of the staff who underwrite space and satellite risk at XL Insurance are former NASA employees--rocket scientists, in other works. "It's a long way from writing self-insured comp in Hartford," says Glancy.
The information technology revolution and the ease with which desktop computers crunch reams of data has also helped the underwriting community price commercial risks more accurately and efficiently.
While the decision tree governing the structure of underwriting decisions hasn't changed much over the years, the amount of data that underwriters need to sift through has exploded beyond what underwriters like Glancy could have ever imagined when they launched their careers.
"It's made me more informed and allowed me to incorporate more elements of risk that need to be evaluated and I can make a better judgment of the risk," he says. "I also think it allows me to be much more efficient on pricing on the client's behalf. I'm able to close down the variables."
With more data, of course, the intangible variables that traditionally separated the best underwriters from the rest of the pack--listening, evaluating and interpreting--have become even more important as mechanisms to filter through the thicket of information presented to them.
Glancy was promoted to chief underwriting officer in March 2008. In addition to his underwriting duties at XL, he's responsible for product management, regulatory and technical underwriting groups, and the risk management function for all the insurance product groups. The company's ceded reinsurance unit also reports to Glancy.
The appointment of Glancy "underscores XL Insurance's commitment to underwriting excellence--our core competency," said Dave Duclos, CEO of XL Insurance, at the time the move was announced.
For the moment, Glancy, the perennially inquisitive go-to guy, is once more right where he wants to be. He's in a position that requires assessing and pricing complex risks. To his job he's given much and his job has returned the satisfaction.
"I've always loved my job," he says. "I've been lucky, and I've been given a lot of opportunities. I'm sure I created some of those. But there were a lot that weren't what I would call standard."
Glancy also gives due credit to his wife and his two children, who've stuck by him for many years, putting up with the incessant travel, the moves, the down-payments on homes on which the family never even closed because of another, better job offer.
By now, Glancy and the rest of the industry have figured out that Glancy's as perfect a fit as anyone when it comes to underwriting insurance coverage.
The decision he made long ago to leave the volatile advertising world for a more stable career was the right one.
"I think there's a natural DNA in good underwriters ... it's you're just naturally inquisitive," he says. "You see things a little different."
That describes XL Insurance's chief underwriting officer perfectly--just a little bit different.
July 1, 2009
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