Insurance Search Specialist Sees Shift In Demand
Insurance companies are looking for different types of board members and top executives these days, says Mike Magsig, a managing director in the New York office of Korn/Ferry International Inc.
Overall demand for executive search services has remained surprisingly stable, he says.
But Magsig, who specializes in insurance and reinsurance searches and once was chairman of Cologne Life Reinsurance Company, Stamford, Conn., does see shifts in the nature of the searches clients request. This year, for example, he has noticed an increase in demand for CEOs.
Magsig also is seeing big changes in the search process and in candidate requirements.
In the 1990s, an insurance company that lost a president and had an executive who appeared to be a qualified successor might simply name the executive president, or ask an executive search firm to conduct a limited search.
Today, “boards are generally wanting a broader search,” Magsig says. “Boards are also taking a more active role in searches to show theyre performing due diligence.”
At many companies, executives who have experience with several different distribution channels are getting more attention than those who have spent their entire careers in a single channel, he says.
Because of increased scrutiny of accounting procedures and other corporate governance issues, insurers hiring Korn/Ferry to look for board members are more interested in candidates with strong accounting backgrounds.
Twenty years ago, some insurers seemed to set aside board seats for famous athletes, well-known activists and other celebrities who had little knowledge of financial services. These days, appointments of “marquee directors” have diminished considerably, Magsig says.
Insurance companies want directors who can make a real contribution, and “the marquee people have realized that this is a very complicated business,” Magsig says.
Many insurers are hiring executive search firms to help them replace chief financial officers.
So, how many of the CFOs really are leaving to take care of health problems and spend more time with their families?
“Its always very hard to know when a departure is a forced departure,” Magsig says. But he believes many of the CFO departures are voluntary.
“The CFO job has changed dramatically in the past several years,” Magsig says. “Its an area where you see people opt out.”
Over the past 12 months, a slump in mergers and acquisitions has cut M&A-related demand for high-level insurance executives.
But companies have announced several big deals in recent weeks. Magsig recommends that companies involved in mergers start talking with executive search firms about changes in executive lineups as early as possible.
“These discussions are typically made later in the process in less successful mergers,” Magsig says.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 17, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.