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Q&A: Mark Herman, CNA Financial Corp.

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Q&A: Mark Herman, CNA Financial Corp.

In January, Mark Herman joined CNA Financial Corp. as president and chief operating officer of CNA Specialty, the Chicago-based insurer's $2.9 billion specialty lines business. Mr. Herman had been CEO of Everest National Insurance Co. Previously, he held leadership roles at Chubb & Son, Ace Ltd. and Ariel Holdings. He recently spoke with Business Insurance Associate Editor Bill Kenealy. Edited excerpts follow.

Q: You have had a long and varied career in insurance and joined CNA earlier this year. What attracted you to the opportunity?

A: CNA Chairman and CEO Tom Motamed and I had a great discussion about CNA. It clicked between us. I like what he's building, including the team. During our talks, it was easy to see the upside at CNA. CNA is already a powerful brand with a great combination of underwriting, claims, risk management and strong financial backing. In the eight months that I've been here, I've come to appreciate the deep diversity of our offerings in products, industry expertise, geography and risk profiles delivered through three distinct and equally valuable distribution sources—retail agencies, brokers and managing general underwriters.

Q: As we get further into the second half of the year, how would you assess the overall state of the specialty market?

A: The specialty market is competitive and much more commoditized than when I started in the business. It calls for a finely honed focus, strategy and distinct advantages, which are more critical now than ever.

CNA has a number of powerful differentiators that we use to distinguish ourselves. This is why we're fortunate to be a strong competitor in several markets where we choose to compete.

Q: As the broader economy recovers, are there particular areas of the business where you see the most opportunity for growth?

A: We like the businesses we compete in and have plans for additional growth in each. The great thing about working in such a diversified company is that we have the luxury to grow rationally in areas of greatest opportunity or where we have embedded competitive advantages.

For example, our branch network allows us to develop and deliver broad solutions across commercial and specialty lines for our chosen industry groups — manufacturing, construction, technology, small business, health care, financial institutions and professional services.

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In specialty, we also have very valuable franchises in management liability, surety and warranty businesses.

Q: What are the emerging risks you now are helping your clients address?

A: There is an increasingly challenging regulatory environment for most industries. We pride ourselves on understanding the landscape they operate in so we can offer business solutions to business problems that keep our customers up at night. Our in-house professionals help our brokers and clients manage emerging trends and offer broad sustainable solutions for each.

To be more specific, cyber is an obvious emerging risk that every business small or big faces. We've had a focus on cyber for some time and we've developed real expertise to respond to cyber risks that are evolving and emerging every day.

We're also studying shifts in the health care business due to health care reform and the changing regulatory environment. No matter the operating environment, we think that patient safety and care is a critical concern.

While we need to have a deep understanding of the industry health care organizations operate in, we also have a strong belief that helping an organization with its focus on patient safety is one of the most important things we bring to our business partners.