LeadingEdge > EVEREST INSURANCE
A Steady Climb
Everest calls itself the patient company. And for good reason.
BY CHERYL ARVIDSON
FAST FOCUS
>> Everest Group’s board
brought in Jonathan Zaffino
18 months ago to revitalize
Everest Insurance.
>> Everest’s leadership
remains focused on adding
new product lines in chosen
market areas and expanding
existing lines of business and
industry solutions.
Photo: Getty Images
>> In the past year, Everest
has hired more than 130
people from 53 companies.
62 LEADER’S EDGE SEPTEMBER 2016
Until relatively recently, Everest Insurance was a sleepy company, a niche player
known more for the financial strength, stability and reinsurance operations of its parent,
Everest Group, than for its own insurance offerings.
But that started to change in February 2015 when
Everest Group’s board hired as president Jonathan
Zaffino, a 20-year insurance and underwriting veteran,
to revitalize Everest Insurance. Key to that effort has
been the hiring of a host of experienced and well
known industry players in the past 18 months who
have been integral in developing a dozen new lines of
specialty insurance, with more to come.
“We are in the early stages of a transformation
of our insurance operations, most notably with the
addition of new colleagues, an expanded geographic
reach and an enhanced infrastructure,” Zaffino says.
Early stages, perhaps, but Everest Insurance is
already creating a buzz in the marketplace where there
once was none.
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“Everest had not been a major factor in the casualty
marketplace except on the West Coast, where they have
been a big player in workers compensation, particularly
in California,” says Joseph Peiser, executive vice president
and head of casualty broking for Willis Towers Watson.
“Other than that, from my perspective, they were not
a factor. We never thought about them. We never did
anything with them. We never saw them.
“When Jon Zaffino joined and started changing their
profile in the casualty market and making significant
hires, it completely changed the game. We now view
Everest as an up-and-comer. We encourage our brokers
to give Everest a look for accounts that are looking for
alternatives and to consider Everest for more difficult
casualty risks. It has been a complete sea change in the
SEPTEMBER 2016 LEADER’S EDGE 63
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with an
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team
OUR COMMITMENT:
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Everest Insurance™
LeadingEdge > EVEREST INSURANCE
A bold, nimble, and collaborative
casualty market from last year to
“We have a risk appetite that is
this year.”
broad but also is not afraid of the
“It is a totally different company
tough risks,” says Lopes. “We will
from our perspective,” agrees
write the tough product risks, and
Tim Turner, chairman and CEO of
that makes us a meaningful trading
R-T Specialty of Chicago. “They
partner to both brokers and insureds.
can consider a lot of creative and
Where there are unmet needs or
innovative types of solutions.
difficult risks, we think that is a
Today they have attracted so much
significant opportunity for us.”
underwriting talent that they have
Connie Germano, senior vice
gone from being a good market to
president and head of specialty
being one of our top trading partners
casualty, said one thing she noticed
in a very short time.”
after joining Everest was the company
Everest’s reinvention rests
did not have a group dedicated to
firmly on growing the company
writing stand-alone umbrella. “That
— William Thygeson Jr.,
organically. Leadership remains
was the first group we developed
chief administrative officer,
Everest Insurance
focused on both adding new
organically,” she says. “When I
product lines in chosen market
looked across the horizon, it seemed
areas and thoughtfully expanding existing lines of
the opportunity to write stand-alone umbrella and excess
business and industry solutions. Some of these may be
in the current marketplace made a lot of sense. With our
areas not well served by the current market or segments
broad lead appetite, a $25 million umbrella and excess
where Everest’s global reach, underwriting and claims
capacity provides a nice solution to our customers.”
expertise, or financial strength can enhance the coverage
Another new area is a product called “Peak Protect”
offerings. As other insurers have been growing through
that is filed in all 50 states and provides a coverage
mergers and acquisitions, Everest has capitalized on
enhancement over and above umbrella coverage for crises.
other organizations’ reductions in force and shifts in
The product provides as much as $250,000 in coverage to
management structure to add underwriting talent. In the
help defray some of the initial costs of a liability disaster.
past year, Everest has hired more than 130 people from
Germano said it is different from policies offered by
53 companies.
competitors because, if the initial $250,000 limit is used
“Lots of companies have engaged in mergers
up in one crisis, the limit can be reinstated to cover the
and acquisitions or have undergone significant
insured in the event of another crisis.
changes resulting in RIFs,” says Dane Lopes, senior
Everest officials also have spent a great deal of time
vice president and head of sales and distribution.
engaging with their major trading partners to identify
“Consequently, it has made more talent available to
broker “pain points” and develop strategies that can
us and also has created new account possibilities and
lessen that pain, enabling Everest to quickly respond to
business opportunities for us to consider.”
the market.
“Most companies are cutting back, and they are
For example, Mike Karmilowicz, senior vice president
expanding,” Turner says. “It is a breath of fresh air.”
and head of Everest Specialty Underwriters, says brokers
Although there are many new faces at Everest,
have reported they spend as much as 20% of their time
William Thygeson Jr., chief administrative officer, says the
in pursuit of binders for their large placements. Since a
company is holding on to the underwriting standards that
majority of their large customers have 10, 15 or more
have made Everest Group one of the financially strongest
insurers providing coverage for a single tower, that pursuit
insurers in the industry.
often takes weeks, months or even longer, Karmilowicz
“Everest prides ourselves on not chasing premium or
says. And the same exhaustive effort repeats itself with the
being reckless in terms of growth, not burning our way
issuance of the policies.
into the market,” Thygeson says. “We’re a risk-taking
“We said we are going to stop issuing binders. We are
company but not at the expense of profitability. We’re
going to issue policies instead,” he says. “No longer are we
willing to write risks but not if we can’t get the right
waiting for the carriers below us to issue their policies. We
return for the risk being assumed.”
have worked with our trading partners on the account, and
In adding new product lines, the reinvented Everest
we understand what we are covering. So we now issue
is augmenting its offerings, moving into areas that other
policies at inception.”
insurers shy away from and searching for solutions to
Karmilowicz says this enables a broker to more quickly
difficult coverage needs.
construct and complete the tower of insurance, “freeing
“We’re willing to write risks
but not if we can’t get the
right return for the risk
being assumed.”
www.LeadersEdgeMagazine.com
them up to go out and spend more
areas such that we are underwriting
time on things that matter, like
a diversified palate of risk,” he
serving their customers and going
says. “We don’t want to be so niche
after new business.”
and so limited in what we do that
“The demands of the market are
we don’t achieve a threshold of
in constant flux,” he says. “As a flat
relevance with our brokers and
organization, Everest has a speedinsureds. We are a patient company.
to-market philosophy which, when
We are not interested in buying
combined with the technical expertise
market share. We are afforded that
of our team, offers an unparalleled
luxury because of the size of the
level of service.”
group, diversification of the group
For example, after a customer
and earning power of the group.
expressed concern over the costs
Underwriting is first and foremost in
it incurred to fight a frivolous
our mind.”
lawsuit, Everest responded with a
“They are a great company
—Dane Lopes, senior vice president and
new product called Rappel. Rappel
historically—very
financially strong.
head of sales and distribution,
Everest Insurance
provides a 50% reimbursement of
They have been around a long time
costs incurred to achieve dismissal of
and have proven all of that,” says
securities class action lawsuits.
R-T Specialty’s Turner. “Under the direction of the new
“There is a growing demand for this product in the
management team, they have been able to attract a much
market, and the Rappel endorsement is an example of
stronger, deeper band of underwriting talent. So today
Everest’s ability to quickly identify and respond to customer
their real strength is that they have a lot of depth and
needs with effective solutions,” Karmilowicz says.
breadth in specialty underwriting.”
The company also is seeking new opportunities in
The company’s take-it-slow approach is particularly
coverage areas that other insurers have abandoned.
important to brokers like Peiser.
“We are constantly surveilling the landscape for
“There is no indication they are doing it willy-nilly or
opportunities,” Zaffino says. “As certain capacities are
that they are being irresponsible in their underwriting,”
reduced or organizations choose to withdraw from
Peiser says. “And they are not yet winning a lot of
a market, that decision might not necessarily align
business. In our view, that is a good thing. In the casualty
with how we think of the world. If there’s a void, we
business, it often takes two or three years for accounts to
certainly will give that very strong consideration. We
move from one carrier to another. Often our clients want
have the ability to react quickly and can solve client
consistency and look for a carrier to quote an account
issues whether the voids are the result of a broad market
for a few years before moving. In my view, the fact they
contraction or are acute challenges experienced by
are not writing a lot of business is a good sign. What I
individual insureds. We’re always going to maintain that
like about their approach is they are comfortable with
nimble and dynamic sense of ourselves.”
catastrophe risk and they have a sense of how to price it.”
Everest has been able to move into areas of greater
In the first year of Zaffino’s leadership, Everest
risk because it is coming at the problems fresh, without
Insurance grew premiums by 26%, and the company is
the burden of legacy operations.
on a strong path to its target growth of 28% this year. It
“When you are building something that is new, you
remains to be seen how much more the company will
can approach it with a clean slate,” Lopes says. “We can
grow and how many more lines of insurance will be
approach many of these areas without a problematic
added to the suite of offerings.
claims legacy or past mistakes that others might have.
“We are growing our organization organically by
We can benefit from the lessons learned from the
making strategic decisions on what markets we want to be
industry’s claims or past mistakes without having to
in, by either product line or geography. You have to invest
have suffered those issues ourselves.”
the time in planning up front and execute those plans,”
Zaffino says one of the main goals in Everest’s
Thygeson says. “We haven’t defined a fixed end point, but
reinvention is to remain relevant in today’s rapidly
we’re very ambitious about where we want to take the
changing market, but he stresses that in doing so the
insurance operation in the next years.”
company will maintain underwriting discipline first
“We’re playing a long game here,” Zaffino says. “This
and foremost.
is the beginning of a multiyear story.”
“We don’t have any aspirations to be a one-stop shop,
Arvidson is a contributing writer. [email protected]
but we are certainly striving to be relevant in enough
underwriting approach
backed by our organization’s
strength and stability
over the long term.
“When you are building
something that is new,
you can approach it with
a clean slate.”
LeadingEdge is expanded editorial content sponsored by industry partners.
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