The board of governors of Florida’s Citizens Property Insurance Corp. pulled off not one, but two shockers in the past 24 hours with respect to its choice of a new permanent president to lead the state-run insurer.
First, the board announced that current Interim President Tom Grady, a former Republican state representative and head of the Florida Office of Financial Regulation, would not be among the two finalists the board considered for the job.
Then, this morning, the board voted unanimously to tap Maryland-based insurance consultant and underwriter Barry Gilway over the much better-known Glenn Pomeroy, a former North Dakota insurance commissioner, former president of the National Association of Insurance Commissioners and the current chief executive officer of the California Earthquake Authority.
For the past three years, Gilway has served as president and chief executive officer of Mattei Insurance Services Inc., a managing general underwriter for specialty property and casualty programs. He previously spent two years as a strategic consultant with Mystic Capital Advisors Group and, before that, 16 years as an executive with Zurich North America. His tenure with Zurich included stints as chief executive officer of its Zurich Canada, Maryland Insurance Group and Maryland Casualty Insurance Co. units.
In debating between Pomeroy and Gilway, board members noted that Pomeroy had not ever managed a staff larger than 70, while Citizens has more than 1,000 employees. Also, while both the CEA and Citizens are among the nation’s largest residual market entities, Pomeroy was tasked with trying to grow CEA and increase the relatively low take-up rate of earthquake insurance, whereas Citizens has the opposite challenge of attempting to shrink its book of business.
Pomeroy – who succeeded his brother, former U.S. Rep. Earl Pomeroy, as North Dakota’s elected insurance commissioner – also spent several years as a lobbyist for GE Insurance Solutions and Swiss Re.
Board members praised Gilway’s experience leading larger organizations, including quickly developing and implementing plans to downsize companies, such as Maryland Casualty, that had grown overextended.
“All of the candidates we have interviewed…have extensive experience handling risk. What struck me about Mr. Gilway was that (he) has lived through many instances where he probably had to face significant consequences if he were to mishandle risk,” said Gov. Don Glisson Jr., chairman and chief executive officer of Triad Financial Services. “That is really a fundamental difference between handling risk in the public sector and handling risk in the private sector.”
What remains to be seen is whether Gilway will be quite as aggressive as Grady in pushing efforts to depopulate Citizens, including the company’s recent suggestion that it may interpret the 2010 “glidepath” legislation that limited annual rate increases to 10 percent as not applying to new policyholders.
Meanwhile, Florida’s other state-run insurance mechanism, the Florida Hurricane Catastrophe Fund, had less attention-grabbing news that could nonetheless prove noteworthy down the road.
John Forney, who previously served as the Cat Fund’s primary financial advisor in his role as managing director of public finance with St. Petersburg-based Raymond James & Associates, will now become one of the Cat Fund’s largest clients. Forney was just named chief executive officer of United Insurance Holdings Corp., one of the largest domestic property insurers in the states. As United’s announcement put it:
From 2002 until his appointment at United, Mr. Forney served in a number of capacities at Raymond James. During his tenure, he developed special expertise in the property insurance sector through his work with government-sponsored insurance entities in Florida, California, Louisiana, and Texas, as well as a major national insurance industry consortium.
That sounds like a lot of useful information that Forney had access to, particularly given that he will now be leading a market competitor. In fact, some might even say it has the whiff of a conflict of interest.