When the chief executive officer of reinsurance broker Holborn read a recent article in Carrier Management introducing a series of articles on trust in insurance, it struck a chord with the leader.

Frank Harrison had “just literally” come back from attending a program devoted to the topic, he reported, referring to a multiday off-site meeting called the “Trusted Advisor Program.” The program, taught by a retired marine who often commands leadership courses for Holborn executives, was arranged by those executives to help all the younger and newer employees understand what Harrison and other veterans already know: “We’re in the trust business.”

“Reinsurance contracts are merely our vehicle. We believe that,” Harrison said during a recent interview.

“What is the one asset that takes years to build, can be lost in minutes and never appears on a balance sheet? The answer, of course, is trust,” he said, recalling a saying he’s heard over the years and offering a teachable moment to Carrier Management.

Teaching trust at Holborn starts on Day 1. Harrison said he openly discusses it with “every individual who comes into our company.”

“They’re generally well educated from university, or they have prior experience. They’re good people. They have all the tools necessary to succeed. But the job starts with trust,” which is something that Harrison shines the light on by encouraging new colleagues to bring their non-business life experiences with trust to mind.

“I want you to forget about insurance and reinsurance. I want you to think about just your own life. Who in your own private life do you really, genuinely trust? A parent? A sibling? A best friend? Was it a priest, a coach?”

“Now think about why,” he said, encouraging self-awareness.

Offering some of the common answers, he said, “No. 1 is they seem to be people that never let you down no matter what. Through thick and thin, they’re accountable. And they understand you. They get you and your uniqueness. They care about you.”

“The people you trust the most are the ones you can speak most freely with, right? You can tell them your innermost secrets.” The why is sometimes hard to define, but you feel it.

“Analytics matter. Capital matters. Contracts matter. But trust rises above all of it. There has to be a strong basis of trust.”

Frank Harrison, Holborn Corporation

“When you can become more self-aware, therein lies the keys to success in our end of the industry,” he said. “When you’re talking about reinsurance treaties, protecting the income statements and balance sheets of a diverse group of insurance companies throughout the U.S., analytics matter, capital matters, contracts matter. But trust rises above all of it. There has to be a strong basis of trust.”

It Starts With a Handshake

Harrison, who is also chairman of Holborn, has been involved in the reinsurance industry for more than 40 years. “I started with a company that at the time was called Cole, Booth and Potter. It was the first acquisition made by Pat Ryan in what would become Aon,” he reported, providing some details of the history of the industry during our interview—and later bringing the 100-plus history of Holborn into the conversation.

The reinsurance broker CEO read a reminiscence from a retired P/C insurance company CEO from a history book published in Holborn’s centennial year—Steve Rasmussen, who was CEO of Allied Group in Des Moines, Iowa, when the group’s relationship with Holborn began.

“‘We had a dispute with our existing broker. We had to look at other brokers, and it was getting late in the renewal season.’ So, he met with me and the then CEO of Holborn, John Gilbert. ‘I gave them authority based on a handshake and trust. We had a hard conversation, and we agreed to give them the account.'”

“‘It was because I knew and trusted them. Everything worked out fine, and we have done business with them ever since,'” Rasmussen said in the book.

Closing the page and interpreting the excerpt, Harrison said, “When folks are putting risk on the table, continuity and trust matter… That says it all. The business remains based on trust and relationships.”

While Carrier Management has not seen the Holborn history book, it’s hardly a leap to conclude that Rasmussen was the speaker of the quoted passage. Just before he retired in 2019, Rasmussen, who was then CEO of Nationwide (years after an Allied-Nationwide merger), penned an article with similar insights about customer-facing relationships exclusively for Carrier Management.

“When we approach relationships with partners—whether for distribution, product creation or innovation—trust is the key to winning. Can you be trusted to keep your promises? Can you be trusted to be accountable? Can you be trusted to deliver consistently? Can you be trusted to partner together so that both parties gain value from the relationship?” Rasmussen wrote in his article, “Relationships Remain the Required Human Element of the Industry.”

Taking things down to the business-to-consumer level, Rasmussen wrote, “Technology is making it easier for consumers to shop and transact. But when there’s complexity, most people still want to talk to someone they trust before they make the decision to buy an insurance policy, an annuity or a mutual fund. If you’re that someone, how are you building that trust?”

The article concluded: “Every day we come to work striving to empathize with our members so we can better serve them, anticipate their needs and innovate to create more value for them. As our industry and our companies adopt new technologies and create new products, services and ways to interact, my advice to you is focus on relationships, the required element of our industry.”

Harrison is of like mind, delivering the same message from the business-to-business side of the industry. “At Holborn, we’ve been very blessed to work with a number of CEOs [where] things are done because we relate to one another well. We trust each other. We actually don’t need a contract. We’ll shake hands,” he said, even reporting that he’s become an extension of their families. “So many times I travel on the road, I don’t even stay in hotels; I stay in their homes,” he said, noting that taking a nice walk on a dock and talking about the things that matter most to his customers’ businesses is valuable.

Every long-term client relationship Holborn has “began with someone deciding we were worthy of their trust. That’s what it gets down to. All the technical analyses, all the creative reinsurance structuring, all the actuarial work, all the capital modeling, all the rating agency advisory, all of the stuff we may do—it gets down to trust. Somebody has to decide that they trust us.”

Collaboration, an ESOP and Servant Leadership

Harrison started the interview noting that he has trust in every employee at Holborn—”every last one of them, and especially my senior group. …Trust is literally the spine of our operation,” he said.

Carrier Management asked him to delve further into dynamics of trust within the walls of the company.

“We’re owned by the employees,” he said, also highlighting a collaborative environment. “Everything is done as a team, and nobody cares who gets the credit. And we always put the interests of others ahead of our own, especially our clients,” he said.

Is it an employee stock ownership plan that drives the collaboration?

“The culture is really important in our company. When you come in, we’ll use trite phrases like ‘check your ego at the door.’ Some people get that, and some don’t,” Harrison said, adding that “an ‘it’s-all-about-me attitude'” just doesn’t work at Holborn. “Not everybody has made it at Holborn. We have had to flush out periodically those who become a little bit too self-absorbed.”

Transparency is another trust-building tenet of the Holborn culture that leaders instill in the workforce. Individuals “may come into the company thinking that they’re meant to know everything already when, in fact, they know nothing. And we expect them to know nothing.”

“We openly teach them that it is a strength, not a weakness, to admit that you don’t know something or understand it. But go find out and follow up.”

“The worst thing you can do is act like you know it. When you’re found out, there goes trust.”

In addition to onboarding talks and offsite meetings, Harrison said he tries to employ a servant leadership style. “We’re humble always, and we always say we put the needs of our clients ahead of our own.”

Turning to the ESOP, he said that everybody is a shareholder, right down to the people in the mail room—and that does create bonds that enhance the culture. He drew a comparison to a mutual insurer that works on behalf of the policyholders, not public shareholders.

“In fact, our clientele is dominated by mutual insurance companies and some reciprocals. So, these things do tie together.”

Tying the culture and trust aspect of Holborn’s business to the bottom line, Harrison reported, “We’ve had 10 consecutive years of share price appreciation, the last eight of which have set new all-time records.”

“People now buy in. They get it. And it’s tangible. They see the value in their account. And as they see it, it creates a mindset,” he said. “We’re not wasteful,” he said, offering one of the beneficial outcomes of the spirit of collaboration.

“The most significant growth period in our now 107-year history has occurred over the last decade. The ESOP for us is a tremendous vehicle because it allows succession planning and perpetuation,” he said, noting that his shares, for example, will go back into the firm “to be recycled for future generations” when he retires.

Ever the student of the industry’s history, Harrison keeps running count of fallen peers that he calls the “graveyard of reinsurance intermediaries” list. “Since the CEO before me started,” dating back to around 1970, 81 firms in the United States are gone. There are arguably maybe seven or eight that remain that are active in U.S. treaty broking. And we’re one of those.”

Harrison attributed their demise to a lack of succession planning. “Either they didn’t have the right people coming up, didn’t have the right structure, or the next management group didn’t have the funds to buy him out,” he said, referring to a typical aging leader of those firms from the past. “So, they merged or they sold.”

For Holborn, the ESOP became a “very important strategic device, which enabled succession planning and perpetuation while fostering this collaborative environment.”

As for Holborn’s most successful clients, Harrison didn’t immediately agree that common threads explaining their success were mutual ownership structures or regional specializations. Instead, he said, “They all have servant leaders at the top. Start with that…”

“They care about the long term. They genuinely care about their people. They put their people’s interests and needs ahead of their own. They’re not looking for the big bonus or to drive the Maserati.”

While Holborn’s clients are mainly regionals and super-regionals, “some are multibillion-dollar companies writing in almost if not all 50 states. These are sophisticated operations, but they tend to be located in comparatively obscure towns, [which] means they are quite often the largest employer in their town,” Harrison reported. “They are important corporate citizens. Most of the senior executives and certainly the CEO would commonly sit on boards of the local hospital, the local utility… They realize the importance of that,” he said, speaking about the value of building trust locally.

“They understand its significance to the community, as an employer, the lives that are at stake… They get the big picture.”

He added: “There’s a remarkable trait of humility across our clientele. I don’t know what you think or have heard of some of the guys that run the big stock companies. I don’t know them. But I get the impression there’s a slightly different approach,” he said.

The long-term relationships that Holborn has with these CEOs “is founded on trust,” he reiterated. “With it, you have everything, and without it, you have nothing.”

In Harrison’s view, “trust is the ultimate competitive advantage because it binds us with our employees. It binds us with our clients. It binds us with our trading partners. It preserves our reputation in the marketplace.”

In short, “it really is a big deal.”