By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®
CHICAGO --- As Patrick G. Ryan will tell you, he was deeply engaged in the Spitzer contingent commission scandal. Greg Case came on at Aon in April 2005 as CEO, at which time Ryan dropped his CEO tag but held onto his chairman position. Even today, when he talked to us recently about it, he used the first-person plural tense.
"Spitzer targeted us," was how he put it.
Now, as CEO and chairman of Ryan Specialty Group, Ryan doesn't appear too worse for the wear post-Spitzer. He can talk about the whole event and the issue of contingent commissions without the flash of tinder in his eyes, unlike some others in the business still to this day.
Perhaps, it's because Ryan downplays the significance of what Spitzer supposedly uncovers. A "little bit" of people in the insurance and risk management world would say they didn't know that brokers were on both sides of an insurance deal, in Ryan's estimates, and a "little bit of people" might today still not believe how small contingent commissions actually amounted to.
When Aon tells clients what its contingent commissions totaled over the past five years, according to Ryan, clients typically say, "This couldn't be all about that. It's got to be much more than that."
Not to pooh-pooh Spitzer's crusade. Good things came out of it, such as an increased focus on transparency among brokers and their clients, he said.
"There's always some good that comes out of pain," Ryan said. "We're one of the few industries that tells people what they earn."
There's also regained trust. Individual brokers lost trust during the Spitzer investigations, said Ryan, and some firms have had to rebuild it.
"I don't think Aon lost trust. I think Aon gained trust," he said.
Not to downplay the current and ongoing debate on contingent commissions, which is not much ado about nothing, according to Ryan. Spitzer "obviously" invested a lot of time studying broker compensation, as did others involved. The attorney general of Illinois, however, didn't take a lot of time to study the issue, in Ryan's mind, when issuing a decree allowing contingent commissions in the Prairie State.
Still, as brokers big and small are taking contingent commissions again and disclosing them, it's a minority up in arms.
"I think there's a very small percentage of people that have a problem with that," this insurance icon said.
February 17, 2011
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