View this article online: https://www.claimsjournal.com/news/national/2008/03/10/88064.htm
William R. Berkley runs W.R. Berkley Corp., his $5 billion insurance holding company of diverse specialty and regional insurers, a lot like a family business where the parents trust their kids to behave.
Diversity and decentralized management have worked well for W.R. Berkley Corp., the founder notes in an excerpt from an exclusive video interview with Insurance Journal.
“I like to tell people we’re a very unique combination of a family business that’s a public company that’s run like a large company with some of the strengths of a small, autonomous unit. It’s just a very unique combination that looks so simple. But it’s the day-to-day implementation of that combination, that humanist approach that fits common sense goals that makes it a very special place,” Berkley says in the interview.
W.R. Berkley Corp. is a Fortune 500 company, with more than 30 commercial lines specialty and regional insurers and revenues topping $5 billion.
The company has five business segments – specialty, regional, alternative markets, reinsurance and international – each segment has individual operating units that serve a market defined by geography, products, services or types of customers and distribution systems.
Berkley says the diversity of his operations didn’t just happen:
“It was always part of the plan to spread the risk. Mistakes are something that is inherent within the insurance business. You can’t run the business without taking risks and recognizing mistakes. So, what you need to do is manage the business with diversity and putting wind fences around the kinds of risks you take.”
Diversity has its advantages.
“[W]hat it does is it lets you avoid a single mistake multiplying in a vast area because if you have a small company, they’re not going to do the same thing over and over again in a huge size. So it gives us protection and diversity. And it minimizes the cost of the inevitable mistakes,” the executive says.
W.R. Berkley Corp. is also known for its decentralized management, a commitment which Berkley thinks sets his company part in the marketplace.
“[W]e believe that you want to make as many decisions as close to the customer as possible,” he says.
In the interview, Berkley notes that while there are times when it is tempting to centralize operations and decision-making, to do that would be a mistake.
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