As a global insurer, Starr Companies was in the unique position of having employees on the ground in China this year when the coronavirus began its deadly spread. Since February, the situation in that country has improved, though a second and third wave of the virus in other parts of the world has continued, creating challenges for insureds.
Amid this environment, Starr has found a way to move forward and find success.
“Our business is doing quite well,” said Maurice R. Greenberg, chairman of Starr, during an interview at the Future of Insurance USA event. “We had a great year overall and budgets look pretty good for the coming year.”
The ‘star of Starr’ also said that he believes the remote work model and related evolutions that most insurance companies have had to make over the past year will stick around for the long-term – and that this development is a good thing.
“We learned a lot during this period. We have new tools and equipment that we didn’t have before, and people don’t have to be in the office and can work from home,” explained Greenberg. “And that will change a lot of things – it will change the expense ratio of many companies for the better,” adding that, for instance, Starr has found that it doesn’t need to occupy the same amount of office space as it did before the pandemic, especially in pricier locales like New York City.
The coronavirus pandemic was far from the only challenge that impacted the insurance world during the past 12 months, however. Ongoing natural catastrophes, social unrest from the revival of the Black Lives Matter movement, and ongoing business interruption lawsuits stemming from the pandemic made 2020 an extraordinary year. Greenberg shed light on how Starr has navigated this period.
“We have not underwritten anything that is controversial, from our point of view, and we have not been involved in any of these lawsuits that some companies are involved in because they wrote policies that are a problem now,” he explained, adding that, nonetheless, many insurers have generally been in a good position amid the BI lawsuits because “they already knew that it’s a dangerous thing to underwrite and they didn’t underwrite many things that gave rise to claims, although many are trying to find fault in the insurance industry [in the courts].”
The chairman likewise sees a very important role for governments when it comes to insuring the pandemic risk moving ahead, since, he explained “It’s very difficult for the private sector to come up with a premium that a company can afford, so it’s got to be something you work out with government,” particularly in terms of the public sector providing reinsurance. Meanwhile, he recommends that any insurers currently being sued for BI-related losses need to examine their policy language to ensure that in the future, they avoid running into similar problems.
Overall, however, Greenberg says that he believes the insurance industry has a lot to look forward to in the coming years.
“Our industry has a good future and we [at Starr] particularly do – we operate worldwide quite successfully and we’re growing rather rapidly, and I expect that to continue,” he said.