If you want to find people with insurance experience, one of the last places to look is inside the boardrooms of the country's insurance companies. AIG recently appointed new directors, none of which have significant insurance backgrounds. The lack of relevant expertise on insurance company boards -- and even captive insurance company boards -- is troublesome, given the complexity of the insurance distribution system. A lot needs to be done in order to find more experienced directors.
There is a need for executive education for insurance company directors. Insurance company shareholders will benefit if boards look beyond a chief executive title and open up the now rarefied boardroom club to include more executive officers with experience in the industry. Former reinsurance executives make good board members for insurance companies. Reinsurance security, insurance pricing methodology, channel distribution disputes, loss reserving methodology and composition of an insurer's investment portfolio all need to be examined by experienced insurance company board members.
The boards of insurance companies need expertise that allows them to evaluate the people and businesses they oversee. Regulatory authorities, rating agencies and insurance stock analysts are all demanding more insurance-experienced board members for insurers, reinsurers, offshore and domestic captive insurance companies, and risk retention groups. Expand the boardroom club to add value to your insurance company. Don't deny your board the incredible wealth of insurance knowledge and extraordinary insurance experience that the experienced independent board member brings to the table.
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