New MGA built on need for better corporate governance

Although the new Executive Risk Services Ltd. is a managing general agent (MGA) focused on the directors’ and officers’ (D&O) market, its CEO says the company is also committed to helping organizations practice better risk management.Executive Risk has been up and running for more than a month, writing D&O cover backed fully by Lloyd’s of London underwriters, and CEO Elan Pratzer says the response thus far has exceeded his expectations. He attributes this in part to the company’s willingness to look at a variety of risks which may have experienced reluctance on the part of other underwriters for example start-ups and those in industries perceived as “high risk”. Pratzer says the company is focused on thorough, individualized underwriting of companies. In this respect, it has developed a series of more than 100 questions for prospective clients, to complement other due diligence in the underwriting process, determined to uncover any “smoking guns” in terms of corporate governance issues. Corporate governance, he says, must move beyond mere compliance with securities exchange rules.Clients are actually eager to undertake this thorough vetting process, adds Scott Saddington, senior vice president and chief underwriting officer. “Addressing the deficiencies in board effectiveness help you [as a risk manager] improve your risk.” The payoff is, “if you improve your board effectiveness, I will improve your coverage and premium.” And the analysis of corporate governance is a value-added process risk managers can bring to their organizations, he adds.Executive Risk, Saddington says, has developed its own policy form, borrowing from the best elements of international D&O policies and including many endorsements difficult to obtain in other markets, such as severability of directors and pollution defense. The reaction on the part of brokers to this broader coverage is to say “finally”, he explains. “This new domestic capacity has been welcomed with open arms.” He adds that the company is committed to providing clear, error-free policies, with all commissions disclosed, to clients in a timely manner.Saddington is an industry veteran, having worked with AIG and Liberty International Underwriters here in Canada, as well as in the U.S. and Australia, and also with experience in Asian markets. Pratzer comes from the executive search world where he had face-to-face involvement with corporate governance issues working with organizations to place senior executives and board members.