By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®
NEW YORK---It says a lot about a man that he can take a hockey puck to the face at the same time he's making one of the most monumental career decisions of his life.
On Dec. 22, 2005, Carsten W. Scheffel was attending an outdoor practice for his son's hockey team. As a coach, Scheffel never really wore a visor at practices, and this time was no exception. So, when another coach fired an errant shot, it caught him without protection.
"And as my son said, I painted the lines at the rink," joked Scheffel, president and CEO, Allianz Global Corporate & Specialty (AGCS) Americas.
He was rushed to the hospital. Doctors sewed 16 stitches inside his mouth, 28 outside. In the ensuing days he lost 12 pounds, couldn't talk, and even endured his brother ribbing him that drinking beer out of a straw was the way to go. He has since needed two root canals.
"The moral of the story is, I am an avid Toronto Maple Leafs fan," he said.
He is, as difficult as that's been the last several years, given the Leafs' struggles in the standings. Conveniently enough, though, given their Stanley Cup championship last season, Scheffel is also a Chicago Blackhawks fan. But getting back to that puck to the cheek, the other moral of the story can be found in what else Scheffel had to deal with at the time.
In December 2005, Scheffel had just returned from a trip to Germany, where Axel Theis, CEO of AGCS, fired another kind of shot--a winning shot, as it turned out--at Scheffel.
Theis asked him to become chief underwriting officer for North America of what then was Allianz Global Risks U.S. Insurance Co. Theis advised him to take this "window." He promised Scheffel he'd never be bored.
The rub was that Scheffel had his sights on the chief agent job for the Canadian branch at AGR U.S., a position he did indeed get months before in April. Acting on Theis' advice was the toughest decision Scheffel ever had to make, he said during a face-to-face interview in the Allianz offices on Manhattan.
Another rub was that accepting the new job would require the Canadian to move to Chicago, away from his children in his native Toronto.
Oh, and Allianz's commercial insurance operations in the United States back then were in a rough spot. The insurer announced in September 2005 that it expected losses of nearly $600 million from Hurricane Katrina. It was an "ugly period of time," remembered Vinko Markovina, head of operations in the Americas for AGCS. Morale dropped. People were leaving.
Yet with black eye and stitches, Scheffel took the job and started in Chicago in January 2006. He set about healing the insurer (and face). He realized he had "no time at all" to do so, he said.
"It was far worse than I expected," Scheffel said, noting how Allianz's North American commercial operation hadn't written new business in three months when he took over.
The Allianz team felt the effects of Scheffel's leadership immediately. It was as if Scheffel was able to "literally flip a switch," said Markovina, who at the time of Scheffel's move to Chicago was regional manager for Allianz Risk Consulting.
Of course, Scheffel does not deserve all the credit. He'd be the first to tell you that he was handed a team of good, committed people at a company to which he'd devoted two decades of his life.
"I didn't do a lot of magic, honestly," he said.
For Scheffel, it's a matter of underwriting discipline and consistency. It's also a matter of expanding products and operations. A McKinsey study calculated that AGCS would need to write $1 billion in premium in the Americas to be successful. Scheffel and his lieutenants realized they wouldn't be able to achieve that with just their core business of property, energy and construction.
So, they expanded into specialty aviation lines in 2006, into liability lines in January 2008, and again into specialty marine lines in 2010. In aviation, the company rocketed to more than $250 million in written premium.
Geographically, AGCS is heading south into Latin America, particularly Mexico and Brazil. In Brazil in 2009, AGCS scored $30 million in new business. Last year, the company launched marine coverage and expanded aviation north of the border in Canada.
It's a matter of being entrepreneurial too. Scheffel pointed to the cross-selling opportunities that AGCS Americas has realized through its massive marine book of business, which grew significantly after it absorbed the marine book from Allianz subsidiary Fireman's Fund. "You have no idea," Scheffel said about these cross-selling "synergies."
"We're actually doing it," he added.
Doing it in large part because of relationships with long-standing clients, and patience. "You don't build relationships overnight," Scheffel, an adherent to the insurance-as-a-people-business mantra, said. "You have to have patience."
Like the time 10 years ago, when Scheffel was traveling to Germany with his client Daniel Desjardins, currently senior director of global risk management and insurance at Montreal-based Bombardier Inc., to renew the transportation company's liability program.
One of the Allianz underwriters at the meeting was a little "rough around the edges," as Desjardins put it. She got so far under the risk manager's skin that Desjardins kicked out the whole Allianz group.
The Germans filed out, the Canadian Scheffel as well, except that Scheffel did a U-turn, returned to the table, leaned over Desjardins' shoulder and asked, "But we're still on for dinner?"
Dinner ... and still on for the deal as well. Scheffel held onto the business from Desjardins by moving it from Germany to Canada.
In total, Desjardins has known Scheffel for more than 20 years, ever since Scheffel was his underwriter.
"The guy hasn't changed one iota. He still is very client focused," Desjardins said. "He's acting the same way he was 20 years ago."
In fact, even as head of the Americas operation, Scheffel oversees the Bombardier account, one of two he still personally has his hands in. He continues to maximize the Allianz global universe for Desjardins' benefit.
In the past year, Bombardier was in the midst of a fairly large contract in Switzerland, and Desjardins told Scheffel that he was in a bind. He needed surety. Within a couple weeks, Scheffel found a lead at Euler Hermes, another Allianz company, and 150 million euros worth of support.
"And that's Carsten," Desjardins said. "He knew I was in a bind. He knew I was looking for a solution. He canvassed their operation and managed to find the right guy."
Those abilities to listen and to make things happen for clients explain another tactic Scheffel employed soon after moving to Chicago. He created a client advisory board to get a sense for his clients' views and needs, on how Allianz could improve, on what else the insurer could do to support them.
One such critique, said Desjardins, the only non-American client on the board, was that claims and underwriting suffered from a siloed approach. Scheffel listened. He brought claims from Burbank, Calif., to Chicago so that its staff and the underwriters could interact daily.
Scheffel has the same approach for Allianz employees: listen to and advocate on behalf of the people who work for him on a day-to-day basis. Give them room to thrive. With some managers, it's mere talk about getting the right people in the job and empowering them to do their work. Not Scheffel.
"He's one of those rare managers that does speak of that but institutes that philosophy," said Markovina, who's experienced Scheffel's approach first-hand as Markovina has risen through the ranks.
"He allows people to drive their own ideas in their own areas of discipline," Markovina explained.
Scheffel especially appreciates staff who can turn ideas into action, versus just meet and talk about them.
"I am an open communicator," he said. "If I have an opinion, I'm going to tell you my opinion. We may not always agree, but you'll know where I stand."
And so, Scheffel values clarity in opinions and recommendations from his employees. "Don't come to me with a memo that says, 'What are your thoughts?' " Scheffel said.
We're talking informed thoughts. A large chunk of the reason that Scheffel still holds on and oversees two large accounts is because he wants to "personally feel what's going on in the marketplace."
Like the time last February he was at an industry function and a CEO on stage fielded a question about cutting back on catastrophe capacity. The CEO replied, no, his firm was not doing so. One hour later, that same firm's chief underwriting officer was on stage, and the very same reporter asked the same question. Except this time the answer was yes.
"I don't want to be that CEO, and I wouldn't want to be that CUO that day either," Scheffel said.
No worries there; he's doing just fine as Carsten W. Scheffel.
Theis and the bosses in Germany were pleased enough with Scheffel's performance to promote him to CEO of AGR U.S. in October 2007, then CEO of AGCS North America when that company officially formed in January 2009.
That year, Scheffel's Americas operation reached the $1 billion in written premium level. Last year was its best year ever, marking four years of solid growth. AGCS North America earned an upgrade to an A+ rating from A.M. Best in 2008. From S&P, the AA in 2007.
In its credit report of Dec. 2010, A.M. Best lauded the Americas operation in particular for diversifying its book away from natural catastrophe exposure.
"That was a proud moment for me," Scheffel said of the ratings upgrades.
Yes, Scheffel got the job Theis promised back at the meeting in December 2005, days before the puck to the face. It's the most exciting job he's ever had, he told us, one that every day challenges him, a person who needs to be challenged.
Scheffel, 53, is not done yet either. He sees huge opportunities in the Americas, which makes up about 30 percent of the overall AGCS organization by gross written premium.
In the United States, AGCS is an "unknown" market, he said. Scheffel's aspiration is to get AGCS the brand recognition in the states as a global leader in the industry segment it's operating in--similar to the recognition it gets in places like Germany, France, Canada, the United Kingdom and now even Brazil.
"We can do it. It will take time," he said.
All this patience, leading by example and open communication, however, are hard work. His kids--a boy and two girls--tell him he's a workaholic. He denies it, and even claims he's much better at the work-life balance thing now than he used to be.
Yet every week he's in the air to somewhere. At least once a quarter he does the Chicago-Brazil-Munich gauntlet.
"Probably, there are not too many people in the world, I don't think, who could keep up with the schedule that I keep in general," Scheffel said.
When he started as CEO in 2007, his kids were still small enough that he needed to be there for them. So, for his first two years as CEO, as we've heard, he continued to coach his son's hockey team. That meant sometimes hopping on a plane until 6 p.m., coaching, then getting back on a plane the next morning. Most of his weekends were in Toronto. If not, he brought his children to Chicago.
He also brought his kids on business trips. After each graduated high school, the children followed him around, everywhere he went, for three months.
Or there was the time last summer when two children accompanied him to the London market. They thoroughly enjoyed it. Scheffel didn't because, at dinner one night, the risk manager client and a broker explained how, when their kids turned 21, they bought them cars. One a Mercedes, the other a BMW.
With a straight face, Scheffel kidded, "There was enormous pressure after that trip."
Much of the "life" in his work-life balance continues to revolve around his family. He skis while the rest of his family snowboards, and in the summer, the Scheffels abscond to the vacation house on the Georgian Bay in northern Ontario.
Like the time his son and daughter and he were enjoying scuba diving there and he "fried" his BlackBerry somehow by leaving it on the dash of the boat. On that same trip, he went swimming with his other cell in his pocket.
"I really actually shut down for one week," he said.
Confident in his professional colleagues back in Chicago, he was able to relax. It wasn't missing work that could get him in trouble though. One night during the week he and his kids cruised to the mainland for dinner. Scheffel's mother was waiting for them, and he didn't even get the boat docked before his mother was yelling at him for going incommunicado. His son said, 'We're not going to get dinner, dad," but dad shushed him, then convinced his mother to get a drink at the marina, followed by some dinner after she cooled down.
Now that his kids are grown, Scheffel even has some time to himself. He started playing hockey again, a sport he enjoyed when he was younger.
"He's a poor hockey player ... and golfer. But we won't hold that against him," long-time client and friend Desjardins said.
Judge his play for yourself at the Canada versus United States game at the annual Risk and Insurance Management Society (RIMS) conference next month in Vancouver.
Perhaps he's had enough free time lately to at least learn how to duck.
April 1, 2011
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