Industry the October 2024 issue

Best in Class

Never losing sight of the customer drove Ken Crerar through three decades of success representing commercial insurance brokers.

By Ken Crerar, Joel Wood, Catherine Richardson Posted on October 2, 2024

A few weeks ago, Council of Insurance Agents & Brokers executive chairman Ken Crerar sat down with Council president and CEO Joel Wood and chief operating officer Catherine Richardson at The Council offices in Washington, D.C.

The trio discussed 30-plus years of insurance industry and leadership history, sharing memories of challenges, lessons learned, and a dogged focus on building a best-in-class association to support commercial insurance brokers.

Wood: So, Ken, how weird is this?

Crerar: This is really weird.

Wood: It’s the first time you've walked into the office where that desk wasn’t yours. And you designed this office. So this is a very personal space for you.

Crerar: It is a very personal space, but it’s a great space. It’s meant for people to live in it.

Wood: I first met you when you were the lobbyist for the Footwear Industries Association and I was working for a junior member of the hopeless minority Republican Party. We had looser ethics restrictions at the time, and you always had a little list where you could get some Cole Haan shoes at a discount price. That made you a very popular lobbyist.

Crerar: There was nothing like lobbying by sitting in a Senate office and fitting the senator with a pair of shoes.

Wood: You came to Washington working for former Senator Chris Dodd (D-Conn.) in 1980?

Crerar: It was the ’80 election, I graduated from college and I spent a year and a half in admissions at Connecticut College and then went off to work for Dodd. Mark Warner, now senator from Virginia, was the person who hired me along with Dodd.

Wood: You started at [Council predecessor] the old NACSA, the National Association of Casualty and Surety Agents in what, 1988? ’89?

Crerar: It was Nov. 1, 1987. NACSA executive vice president Bruce Wallace called me from the Greenbrier and offered me the job. And I spent 20 minutes talking with him.

Wood: I’ve characterized NACSA as a niche within a niche. It was an association that had a storied history of doing this premier event that was largely social at the Greenbrier resort for decades, that gathered together the leading company execs and the leading brokerage execs. What was the association like when you came to work for it?

Crerar: Bruce co-managed two groups. It was NACSA and the National Association of Surety Bond Producers. All we did was government affairs. That’s all we had. We focused on government affairs and were really tied into the Big I and PIA, the smaller firms.

Wood: And then very suddenly and tragically, the executive vice president of the association [Bruce Wallace] passed away, and you were shoved into the spotlight.

Crerar: There were two senior people, Martin Huber and me. He was offered the surety bond producer slot, and I was offered this one. And we decided the two organizations should split. It made sense. They were two different organizations that, just through the convenience of the administrative function, had been working together for all those years. I was 32 years old when I got handed this job. And it was a decision whether I wanted someone above me or not. Do I want to work for somebody? There are 50 people here now. When I took over, there were six full-time equivalents and I was handed a checkbook, basically, and I had to fill the place. I did the best I could with what I had.

Catherine Richardson: What is it that you learned from your former jobs that you took forward when you assumed this role?

Crerar: One of the things that I learned was to be consumer driven. The closer you are to the customer, the better off you are. And that was something that I took with me because I had a boss who felt that I had this marketing sense. And I always have had a marketing sense. I love retail, I love shoes. Shoes were great, but I always looked at it strategically and thought, well, everybody wears a pair of shoes, why don’t we represent them? [Leadership] made some decisions focusing in on manufacturing. I didn’t care where it was made. I just wanted to represent shoes.

Wood: One of the observations that I’ve had, that I know I could never replicate, is the value you place on the look and feel [of The Council] . It’s very reflective, I think, of the higher quality of individuals and firms that we represent.

Crerar: It’s the best of the best. And I think that look and feel is reflected in everything that we do, not to undercut the substance and the depth, whether it be in membership, whether it be in marketing, communications, whether it be in talent and leadership development, government affairs, meetings. I just always felt like that was the thing that you held most dear. And a lot of the success that we had flowed from that.

Navigating Disruption

Wood: When you brought me in to succeed you in government affairs in 1993, on the one hand, the global brokers were members of ours, but we largely were an association representing the large regional firms. The globals had their own playing ground in the National Association of Insurance Brokers, NAIB. And so you had two competing organizations as this industry was starting to really converge.

Crerar: The resulting merger between the two organizations [CIAB and NAIB] really was caused by, one, a financial concern, and two, there was a need for coverage on some issues politically and there was just a duplication of effort.

Wood: By the time that merger had been achieved, you had already had the name changed to the broader CIAB. It sounds pretty easy, that everybody just came together and decided that they’re not going to duplicate efforts and we should join up the organizations. In fact, that was a very difficult multiyear process.

Crerar: It took a couple years. It was a merger of the two leaderships. And we had co-chairmen for a couple years and it all worked out fine. But it was because the decision was made early on who was going to run it and how it was going to be run. And that was really critical. I think there was a point where there was a distrust between the big firms and the regionals, and they created some committees that were put together for that reason. But it dissipated so fast because we’re all in the same business. The trust was there.

Wood: I do recall that there was that tension between the global brokers and the regional players. But as I look back in 30-plus years in the organization, I only recall two times when we had members that just flat-out disagreed with one another. One of them was over the issue of whether or not wholesalers would be allowed to join the organization. I think that was like a 15 to 14 vote, and we came very close to not even allowing wholesalers, which would have been, when you look at the vibrant wholesale engagement that we have today, would have been awful.

The other time, though, where there was a considerable amount of tension and it was extremely difficult to navigate, was when we had the Eliot Spitzer inquisition into broker compensation in 2004 and 2005 and that spilled out into class-action lawsuits that even we had to defend ourselves on. And you had the global brokers in Marsh, Aon, and then Willis, that all struck their settlements with ,then-New York state Attorney General, Eliot Spitzer. And part of the settlements included a highly difficult transparency regime where they had to essentially report to the offices of the state attorney general and understandably, Marsh, Aon, and Willis thought, well, if we’re having to do this, the smaller brokers should have to do the same. How did you manage to stay above that without losing any membership?

Crerar: We hired a crisis management firm, and they did a great job at giving us the tools to get through that. And transparency was the answer. We didn’t care how the transparency looked. We just said, we’re for transparency. And that saved us, I think, ultimately, because if we had not done that, we would have had the conflict or the tensions between the two ,groups of, firms. But we would say, we just want transparency, we don’t care how you do it.

Wood: There have been all kinds of other disruptions that have come our way. We had so many different compensation inquisitions. You had disruptors like Zenefits that came along and said that they came across a rotting corpse in the desert called commercial insurance brokerage. You’ve had insurtechs that are revolutionizing the marketplace. We’ve had this massive amount of convergence where what used to be 30 member firms of the old National Association of Insurance Brokers is basically three or four now. Do you ever feel like the basic industry model is under threat?

Crerar: At the end of the day, I believe that the organization or the person who’s closest to the customer wins, period. It doesn’t matter if you’re Zenefits or you’re an insurtech. It depends on the relationship. This is a relationship business. And I have always believed that. And I still believe it.

Regulating the Regulators

Wood: You often talk about how leadership is about looking around the corner and anticipating what the needs of the member firms are going to be, as opposed to responding to the lowest common denominator of all of your members.

Crerar: Well, if you assume associations are like unions, and I do, you protect your lowest common denominator as an association. But if you look around the corner and you break some glass and you try to be a little bit innovative, people will notice. We were a tiny organization that this industry kind of chuckled about. And you remember the days when we filed our first lawsuits on countersignatures.

Wood: We had over 30 states that had countersignature laws, many of which required that if you, for example, were a Georgia agent who lived at the Georgia-Florida line and you were selling a policy to any consumer, personal or corporate, in Florida, by law, you had to have a resident agent of Florida stamp that policy who was not held liable for it and who, by law, would receive 50% of the commission or fee income. We went out and started suing these states, much to the displeasure of other insurance organizations that worshipped at the holy altar of state insurance regulations.

Crerar: And I got phone calls from people saying, how could you sue a regulator? I didn’t care. I wanted to get rid of it. It didn’t make any sense.

Wood: Then, in the aftermath of the financial collapse, Dodd-Frank was passed, and, due to your friendship with Chris Dodd, who was chairman of the Senate Banking Committee, we were probably the only industry association in the financial services world that actually got positive provisions for ourselves as opposed to stiffer regulations, which was to make sure to rationalize the state laws that governed access to the surplus lines marketplace. And… surplus lines placements have more than doubled in the last decade as a result of that. I’m convinced that would not have happened had we not won those provisions in Congress.

And the other thing that you led the way on, again, your willingness to break glass, to antagonize regulators if there’s a bigger cause at stake, is on the very frustrating issue, decades-long, of non-resident licensure. However, the passage of that first NARAB provision, which incentivized the states to move to a reciprocity regime, has made life a lot better. We wouldn’t have the National Producers Registry.

Crerar: It’s still not where it needs to be.

Richardson: I have you both in the room right now, and together you have over 30 years of history. Maybe it’s possible I could get you guys to disagree. What do you think was the greatest regulatory threat that would have basically inhibited our members from serving their clients that you’ve seen in the course of that period?

Wood: To me, the ever-evolving fiduciary responsibilities that we are seeing in health and benefits, we’ve seen that on the retirement side for many decades. All kinds of litigation there. We’re now starting to see the proliferation of litigation on employers for fiduciary responsibilities and therefore potentially bringing in brokers. You see all kinds of pressures from the Labor Department on that. And this is not too far removed from the state AG investigations of [Richard] Blumenthal in Connecticut and Spitzer in New York from decades ago. And I think that the reality is there are multiple income sources and contingent commissions that are still out there and the overzealous regulators who would prefer to commoditize the role of the broker. I think those are the greatest threats. You agree?

Crerar: No, I don’t agree. Accept the fiduciary responsibility and be compensated any way you get compensation, but don’t hide it.

Wood: Well, a fiduciary standard says that policy, if you could have found a cheaper price on it and sent them to a substandard insurer as opposed to a first-class one, you’re subjecting yourself to a massive amount [of litigation]. We are for suitability. We are for acting in the best interest of the client. We do not need to set up a whole new class of lawsuits aimed at insurance brokers.

Crerar: At the end of the day, it’s the customer. If the customer says, I need such and such, or I want… If I say to you, we could save 10% on a policy if we go with this company, but let me tell you about this company…. Wood: I’m all for unfettered free market capitalism with brokers, carriers.

Crerar: As long as it doesn’t lead to litigation, well, I love this.

The Insurance Leadership Forum

Wood: Well, whoever owns the relationship with the customer is the marketplace winner. That being said, we have dear allies and great partners, and still the core of what we do is networking and advocacy. And the Insurance Leadership Forum [ILF] at the Broadmoor is the preeminent international gathering of the commercial insurance industry.

Crerar: And it should be. The industry needs to meet. It needs to come together and that’s why it happened. That meeting has always been motivated by something else. We didn’t need to change it. We let it evolve.

Wood: It is unusual, though, in that while other trade associations are scaling down their annual conventions, this is one that has almost universal participation from all the leading brokerage firms and all the leading commercial insurers. And it’s been very difficult for you to manage this, to make sure that it is the thought leaders, the industry leaders on the brokerage side and on the carrier side.

Crerar: I don’t know how many times I’ve talked to a CEO who said to me, the [attendance] limits are OK because it allows me to say no to people that don’t need to be there. That’s important to understand. It’s important to have a sense that it’s got to be the right people at the meeting. And we really focused on that.

Richardson: Ken, one of the most heated debates we’ve had during my tenure was over whether we should host ILF, which is traditionally a 1,200-person-strong meeting, in the fall of 2021. And I’m loath to say this, but you were right. We did host a meeting, and it was a very successful meeting that I do think is going to lead to the next evolution of ILF. But when you were tasked with that decision, what was really important to you? What were you thinking about in hosting that in that climate?

Crerar: Well, there were a couple things. One is the need was there, and I’m always conscious of the fact that if there’s a need, someone will fill it. There was a need at the time to do that meeting, whatever it looked like, and people wanted to come together. And even though we did have a 40 or 50% drop-off in full participation, those who came found it to be just more of a fulsome experience.

Wood: Well, let me go back even beyond that. Twenty years before, 9/11 occurred three weeks before our annual meeting. The global reinsurance marketplace, on Sept. 12, 2001, went away, and we found ourselves in a crisis. You made the decision to cancel the meeting, but we substituted it with almost daily marketplace meetings for our members to participate in. And we worked with the industry at large in the creation of a public-private partnership through TRIA. Terrorism Risk Insurance Act, to solve the terrorism reinsurance problem.

Crerar: It was an issue of providing what the market needed at the time. They needed information, they had no information. They couldn’t come together because it would have looked bad to their customers, but it made a whole lot of sense to provide them information. They had information to give to their clients, they had something to say. And that’s all I wanted to do. I wanted to make sure that they had something to say. And then we started those conversations with the CEOs of insurance companies to talk about appetite. But my core concern was the client, it’s the customer. And if you focused on that customer, it’s a thread that just pulls back.

Entrepreneur

Wood: We’ve talked about willingness to break glass and try things that may not work out. And while you’ve had a couple of areas of entrepreneurship that didn't work out, you’ve had far more entrepreneurial successes.

We always hear that the No. 1 problem in insurance is talent. You created the Insurance Professional School and a lot of the best-in-class programs, but I think we still have unfinished business in terms of providing scale in those programs.

Crerar: If we are an association of professionals and we’re serving customers, it takes people and it always takes people.

We spent $19,000 to create the substance behind an insurance school at Wharton. And I remember it was a lot of money for us, but at the time, there was nobody. We went through a transition period where the CEOs of most of the firms that we had were salespeople.… The natural sort of evolution has occurred where now we have managers. I remember at the time, it was [Council past chair] Jake Wallace who said to me, ‘Ken, we’ve got a problem, because the guys that are running these things aren’t managers. We need to create a management program.’ And that’s why we went to Wharton, because at the time, Wharton was the best of the best.

But Elizabeth McDaid ran Chubb’s very acclaimed producer school and she put us out of business.

Wood: So what did you do? You went out and stole her?

Crerar: I suggested that she come to visit me, and I suggested that maybe she’d like to work for us. And she did.[Elizabeth McDaid was hired as senior vice president of leadership and management resources for The Council and in 2024 became executive vice president of The Council Foundation].

Wood: Also on the entrepreneurship front, you were the founder of the World Federation of Insurance Intermediaries, which is going to be experiencing its 25th anniversary here in Washington next year. I attended on your behalf the WFII meeting in Mexico earlier this year, and that is where all the leading agent broker associations worldwide get together and compare notes on what they’re experiencing and what trends they’re seeing.

Crerar: When we created the World Federation, I kept saying, I know there’s something here because of my shoe industry days, but I don’t know what it is. But it was the fact that we all talk together. And the reason to keep the World Federation going and why we spend the money that we spend is because at the end of the day, we need to be able to pick up the phone and call each other because we share the same issues. And some start earlier in one country versus another, but we all have the same issues. And the business has become more international, it’s become more global, but it’s been an evolution. And so it’s a mechanism, and it’s an important mechanism, to gather once a year to collect the trend lines.

Wood: You also had success with the creation of the Employee Benefits Leadership Forum, also held at the Broadmoor.

Crerar: There was no other place for the people who work with customers to come together. There was a need for that. And there was no one really out there who at the time understood brokers like we did. We understand what a benefits producer has to go through and we understand a client. And you put it all together and it was a natural meeting.

Wood: I remember thinking at the time, this is crazy, because at ILF we have a wide variety of commercial insurers that specialize in hundreds of different lines on a regional basis, on a national, international basis. But when it came to the benefit side, you had basically the Blues, United, Cigna, Aetna, and you had this strong dominance of just a handful of carriers. And it didn’t seem to make as much sense because a broker in Florida may not have access to Cigna network.

Crerar: Florida has the same issues that a broker in Michigan has. They’re struggling with the same issues and they’re struggling with some of the same carriers because it’s such a small market. But at the end of the day, they needed a place to share information and that’s what we’re focused on.

Wood: Let's talk about one other area of entrepreneurship. Leader’s Edge is a preeminent trade association magazine. Nobody has a magazine quite like this.

Crerar: Leader’s Edge was always my baby. This is a fascinating industry, and it covers everything. And so why wouldn’t you want a magazine that covers this industry? And I wanted one that people want to open. If someone doesn’t want to pick it up and look at it and find out what it is, then we failed.

Wood: Leader’s Edge was also very personal to you. You wrote a personal column in it for years, and you actually came out as a gay man and talked about your family in one of the stories; that’s got to be one of the highlights for you.

Crerar: It was a really hard thing to do. But at the end of the day, I had a family and I had two kids. And if I was embarrassed about who I was, then what would I expect them to think? And that’s what motivated me. It was like, I have to be who I am.

Leading On Leadership

Wood: Tell us about a few other leaders who have been great mentors to you.

Crerar: I’ve been really fortunate. I look at 30-some years of CEOs who have been my chairmen, and I’ve learned so much from so many of them. The one thing that I’m focused on right now is those that did succession really well, because succession is really critical. It’s the final peg of the leaders. It’s what you have to do.

Richardson: What’s the advice that you would give then? What are a few parting words of wisdom that you think we need to be thinking about as we move forward?

Crerar: Succession is so critical. If you’ve created an environment that you want to see continue, you can’t really focus on the specifics, but you can focus on the general approach.

Richardson: A lot of the things that you have had to lead through not only have been challenging from an industry and business perspective, but they’re highly emotional. The passing of your predecessor, 9/11, the passage of the ACA and the battle over health insurance, the pandemic. What was the process for going through the emotional part and still be the leader?

Crerar: Well, it’s interesting. All of those cases that you mentioned involve people. And if you have empathy for people as a leader, you’re listening. It’s really about listening. I heard. I listened a lot. I didn’t have the opinion that I knew everything, so I learned it from other people. And so that’s how I dealt with the emotional stuff.

Richardson: Joel, what is the most lasting piece of advice that you have gotten from Ken?

Wood: I think Ken has always been historically correct in that I am perhaps overly sensitive to making sure that everybody’s happy. And that willingness to break a little glass to try to see ahead of the curve, I think that’s the lasting testament of Ken’s influence over me.

Crerar: Well, I’m proud of you. I’m proud of Catherine. I’m proud of this office. The people, that’s what I’m proudest of. You have done an amazing job. And I urge you to keep looking around the corner. Because I think the corner is where you have to focus. And don’t be afraid. One of the things that I’ve learned a lot about, and I’ve learned this with being a parent as well as being a CEO, is you really can’t make mistakes if you’re just learning, and you can’t learn if you don’t make mistakes. And so you’ve got to focus on that. I made a lot of mistakes.

The business will become the business you want to focus on. It’s sort of like what I learned from the shoe industry. Who cares where the damn stuff is manufactured? It’s a shoe, so just represent the shoe industry. Represent the brokerage industry. Period.