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In a career that has spanned nearly 50 years, Kevin Kelley has seen a lot of change in the world of insurance, and as a leader in one of the industry’s most dynamic sectors he’s played a key role in its development.
Starting out in the early 1970s, he’s experienced the ups and downs of pricing cycles, the emergence of new liabilities, the challenges of the financial crisis, the influx of new capital into the industry and the consolidation that followed.
And it has been Mr. Kelley’s ability to adapt and thrive amid all the transitions in the excess and surplus lines market through his time at Lexington Insurance Co., Ironshore Inc. and most recently Liberty Mutual Insurance Co. that has marked him out as a top industry leader, said Shaun Kelly, a former senior executive at all three insurers and longtime colleague of Mr. Kelley.
“He always had a notion of innovation, whether it be product or approach to the market. In the E&S market innovation is a key quality and Kevin has that in spades,” he said.
In recognition of his industry leadership and numerous achievements, Mr. Kelley was presented with the Business Insurance Lifetime Achievement Award during the virtual U.S. Insurance Awards event last month.
In addition to his work in the insurance sector, Mr. Kelley, who retired as vice chairman of Liberty Mutual Insurance Co.’s Global Risk Solutions business in January, has served on the boards of many community organizations in New England and elsewhere.
Born in Boston, he grew up in West Bridgewater, Massachusetts, and attended Cardinal Spellman High School in nearby Brockton, where he now chairs the board of trustees.
After graduating from Boston University in 1972 with a degree in business administration, he initially considered a career in commercial real estate, commercial banking or urban development, but in a tough job market he joined Fireman’s Fund and went through the insurer’s underwriter training program.
He left to join Lexington as a casualty underwriter in 1975 and remained with the American International Group Inc. surplus lines unit for more than 30 years.
After a few years with Lexington he was asked to design a new department.
“I was able to design a department around the more specialized areas within the E&S world and that was about half of our casualty business,” Mr. Kelley said.
Four years later he was placed in charge of all of Lexington’s casualty business, and in early 1987 AIG’s then CEO, Maurice R. Greenberg, named Mr. Kelley CEO of Lexington.
“I was only 36 at the time, so it was a phenomenal opportunity,” Mr. Kelley said.
Mr. Greenberg, who now heads Starr Insurance Cos., is a strategic leader who also has a knack for spotting problems as soon as they arise, Mr. Kelley said.
“At AIG, you really did run your business, so you were exposed to really significant executive opportunity. Obviously, you were being challenged quite a bit by (Mr. Greenberg) and others, and if things got a little off track you were held accountable,” he said. “That was a PhD; there’s no question about the value of the experience.”
In the 21 years he headed Lexington, the insurer grew from under $1 billion a year in gross written premium to more than $10 billion and about a 20% share of the excess and surplus lines market, Mr. Kelley said.
“We knew clients were always looking for solutions of a different type, so we listened. We were very willing to work with brokers who had those clients, and we were able to come up with novel solutions,” he said.
During Mr. Kelley’s tenure, the insurer faced several major tests, including Hurricane Katrina in 2005, he said.
“In an event like that, insurance is the first responder of liquidity. We had five major clients in New Orleans, and we knew we had total losses for all five of them, so we made the decision to just pay the full limit because, No. 1, they are not going to be able to get the documentation because it’s ruined and, No. 2, they need the dough. Probably to this day they’ve never forgotten that,” Mr. Kelley said.
The insurer also grew by launching new products in response to new liabilities arising out of changes in federal law.
“A new federal act can create liabilities, and if you are the first one to understand what those liabilities are and you can design a product that helps clients understand what those liabilities are, and you can help the client mitigate those exposures, you really have something,” he said.
For example, after the Civil Rights Act of 1991 expanded the right for workers to bring discrimination claims against their employers, Lexington launched an employment practices liability insurance coverage, which has since become a staple purchase for many corporations.
“We always challenged ourselves to be creative. We always had a goal that a certain percentage of our top line would come from things that we didn’t do three or five years ago,” Mr. Kelley said.
While Lexington remains the largest surplus lines insurer, AIG has faced tougher times. In the early 2000s it came under attack during investigations in the insurance industry led by then-New York Attorney General Eliot Spitzer. In 2005, Mr. Greenberg retired.
Mr. Kelley said he felt an obligation to the Lexington staff and AIG’s new leadership to remain after Mr. Greenberg left, but in 2008, when AIG came under even more pressure during the financial crisis, he decided it was time to leave.
“It was gut-wrenching, but the chief reason why I left was because I began to see the brokers and the clients select against us, and you can’t run an insurance company when that happens,” he said.
Mr. Kelley soon had a chance to return to the market, when the late Bob Clements, a longtime Marsh & McLennan Cos. Inc. executive who helped launch several insurers, asked him to be CEO of Ironshore, a specialty insurer launched in 2006.
With the Ironshore offer and some other opportunities on the table, Mr. Kelley went out on a Sunday run to consider his options. A longtime marathoner, Mr. Kelley ran his first in the late 1970s and another in the 1990s, but after the Sept. 11, 2001, terrorist attacks he ran them regularly after deciding to do something each year that personified perseverance and has now completed 18 marathons.
Coming back from the run that Sunday, he decided to take Mr. Clements’ offer.
When Mr. Kelley became CEO of Ironshore, he adopted a similar strategy as he had at Lexington but was able to write lines such as directors and officers liability and environmental liability, which had been handled by different companies at AIG.
In addition, Mr. Kelley recruited talented people from rival insurers. “It’s the people you gather that determines the outcome, and we were able to attract a real high level of people, and, perhaps most importantly, they didn’t leave,” he said.
Mr. Kelley and his team built on their relationships with senior brokerage executives and always tried to be “loud in the market,” he said.
The company grew from about $400 million in gross written premium in 2008 to about $2.3 billion when Liberty Mutual bought Ironshore in 2017.
After a couple of years as a senior executive in Liberty Mutual’s large account business, Mr. Kelley decided to retire at the beginning of this year.
“It’s been a phenomenal learning experience. I enjoyed being a CEO, but I also enjoy no longer being a CEO,” he quipped.
Seven years ago, when supposed retiree Patrick G. Ryan launched what is now the third-largest wholesaler in the United States, no one should have been surprised.