Juliana Keaton had no idea when she started off as a lawyer litigating commercial insurance claims that her career path would someday lead her to be the risk manager of one of the largest railroad companies in the country.
But Keaton, who served as director of risk management for Jacksonville, Fla.-based CSX Transportation for five years before leaving the position earlier this year, has no regrets on where she ended up.
“I have to say I really loved what I was doing. It’s very exciting and I think the railroad industry, in and of itself, is just fascinating,” Keaton said.
Keaton began her law career as an attorney in Los Angeles, and says her experience working in risk management – from looking at programs to meeting with clients – has been “just as exciting as doing an entertainment deal.”
“I know that sounds crazy, but coming from Los Angeles originally, I can say that without any equivocation,” Keaton said. “You get the same excitement in solving a problem for a large company or for an industry that you do when you put together any kind of deal.”
Keaton was originally hired by CSX – the largest Class I railroad east of the Mississippi servicing 23 states, Canada, and a small part of Mexico – in 2011 as counsel in the law department. Keaton’s experience as a lawyer included litigating commercial and environmental insurance claims, including for a law firm that was in essence a captive of Lloyd’s, which she said fueled her passion for insurance.
Keaton said because of that experience, she jumped at the opportunity to shadow CSX’s then-director of insurance in 2013 as he recovered from a biking accident.
“I’ve always found the history of insurance really exciting from that risk management perspective – and careers change,” she said.
Over the course of the year until her predecessor retired, Keaton got firsthand exposure to the company and the workings of the insurance group as acting director of insurance and eventually as the director.
Keaton was responsible for ensuring appropriate terms and conditions and placement of the enterprise’s insurance programs, consisting of hundreds of policies with more than 20 lines of coverage.
She also ran the company’s captive, a wholly-owned subsidiary of CSX that re-domiciled to South Carolina in 2004, which issues 14 policies and writes more than $40 million in premium annually. In 2015, her role expanded to include the function of business risk management.
Restructured Out of Job
She parted ways with CSX in March of this year after the new CFO restructured positions at the company. Shortly before her departure, Keaton found out she was being named to the Risk and Insurance Management Society’s (RIMS) Risk Management Honor Roll 2017 in celebration of her work at CSX.
Part of that work included creating new products with the company’s captive provider that specifically addressed catastrophic rail incidents involving toxic chemicals, a “cyber rail” liability policy, as well as sabotage and terrorism coverage.
Under her leadership, the three largest insurance programs – property, liability and D&O – also achieved record premium reductions, while incorporating enhancements to coverage to address the enterprise’s exposures. Since 2013, those three programs’ premiums have decreased 24 percent or nearly $10 million.
Keaton and her team were responsible for reducing the CSX claim count by more than 30 percent, legal spend by more than 60 percent and reserves by more than 20 percent over the last three years, which helped the captive company pay nearly $70 million in dividends.
Though Keaton didn’t originally start out in insurance, she says her experience as a lawyer helped her navigate the many complicated scenarios that could arise as risk manager for a huge railroad company.
“Quite frankly, I think that the fact that I am a lawyer, and the fact that I have litigated a number of coverage issues and disputes, it’s very helpful in the sense that I know what a company’s obligations are in terms of disclosure,” Keaton said. “I know, on the one hand, there’s no sense in hiding anything because if you do end up in litigation, one, it’s going to come out. But more importantly, it allows an underwriter to get that sense of comfort, and it allows them to fully appreciate what it is that you do and what it is that you’re concerned about, and it helps them.”
Keaton said she worked closely with the underwriters at renewal time or in handling any new risks that could arise, such as the transport of toxic chemicals.
“This is one of the things that was so gratifying for me in my role,” Keaton said. “[Helping] them to craft new products that really address your actual concerns. Instead of buying something off the shelves that everybody else is buying, you’re able to create something that is fine tailored just for your specific risks.”
Keaton said that risk management is one of the areas that is being undervalued when companies take cost-cutting measures. She said in many ways there are a lot of companies that don’t fully understand how critical risk management is to almost any decision that’s made within a company – whether it’s related to cyber, terrorism, casualty or property.
“I think one of the things we’re finding is that there, unfortunately, are some situations where companies are being forced to make the very hard choice between risk management and some other things such as safety, for example, and simply the cost of doing business,” Keaton said. “I certainly am not speaking on behalf of CSX, but personally… I think companies are doing themselves a disservice.”
The disconnect, she said, can be between how insurance and risk management can have a positive impact on a company’s safety culture, particularly for an industry like transportation. But, she said, having an active and engaged risk management platform not only creates a better outcome at the company, but helps to form a stronger relationship with the insurance underwriter that the company works with.
She added that her own relationship with her prior employer’s insurance team was critical to placing important insurance policies.
“We had a somewhat tumultuous renewal not too long ago and many of the underwriters, when I saw them at a conference shortly thereafter said, ‘We would not have done this for anybody but you,'” Keaton said. “Frankly, because they know me, and they know my company…they know if they have a question, we will answer it. There is absolutely no question in my mind that the relationships are paramount.”
She encourages those in the insurance industry to also become specialists in the risk management needs of their clients.
“The whole industry needs to be not only privy to, but educated regarding the risks of a company,” she said.
Despite having parted ways with CSX, Keaton said she believes the risk management industry has a strong outlook, and she hopes to be able to continue in a risk management and insurance role in her next move.
“I think very highly of the risk management community,” she said. “We’re all striving to really address so many things that are happening and constantly changing, and trying to help people and solve problems. Being recognized for that just means the world to me.”
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