Straight Talk from Travelers’ Chairman & CEO
On Mar. 21, as part of Baruch College’s Ethics Week 2013 programming, an enthusiastic audience saw Travelers Companies CEO and Chairman Jay S. Fishman (top, left) sit down with Baruch School of Public Affairs dean and media specialist David Birdsell (right) for an informal Q&A that covered such wide-ranging business topics as tough career choices and trillion-dollar federal deficits. Fishman was the guest speaker for the College’s eighth annual Burton Kossoff Business Leadership Lecture Series.
The 2013 Kossoff Lecturer has earned some of the highest accolades in his industry, with Forbes magazine featuring Fishman in a 2011 cover story titled “Wall Street’s Honest Man.” Fishman’s star rose considerably during the fall 2008 financial crisis: His conservatism is credited with having positioned Travelers to avoid the financial pitfalls that ensnared other multinational insurance corporations, such as AIG. Travelers is one of 30 major U.S. companies that comprise the Dow Jones Industrial Average.
From the very first moment of the interview, Fishman made it clear that he neither needs nor likes Forbes’s tag of “Wall Street’s honest man,” which he believes is an overstatement for effect. “There are plenty of people [on Wall Street] who do it right,” stated the publicity-shy business executive.
How did he first get interested in a career in insurance? asked Birdsell. Fishman’s response generated laughter from the crowd: “I have never met anyone who said he or she wanted to get into insurance . . . . For me, it was all accidental. I had gotten out of school and just wanted to get a job to pay the rent.” Fishman joined Travelers as CFO in 1993, when the company was acquired by Primerica Corp., which later became Citigroup. He was named president and chief executive officer of Travelers in 1998 and chairman in 2000.
In 2001, when he left Citigroup to become chairman, president, and CEO of the St. Paul Companies, his decision made news. The departure appeared to signal his throwing off the mantle of heir apparent to boss, mentor, and Wall Street legend Sanford “Sandy” Weill. In reality, Fishman had decided that leading the St. Paul Companies offered a better fit; he wasn’t comfortable at Citigroup and felt he wasn’t ready to be CEO. Fishman painted a vivid and honest picture for the students and young professionals in the audience: “The first day you take a new job it feels great; the second day you are accountable. Holy moly.” At St. Paul, Fishman gained experience. “Experience brings touch points and allows one to trust one’s instincts,” he observed. In 2004, when the St. Paul Companies and Travelers merged, Fishman became CEO of the combined company. In 2005 he also was named chairman. He had come full circle.
Fishman’s instincts guide his stewardship of Travelers, which “takes only that amount of investment risk that we need to be a top-notch insurance company,” he explained. “Our conservatism is not fear. High-growth goals may equal employee behaviors you don’t want. My experience is that most people try to please the boss; so bosses need to be careful what we ask for.” This approach also means that Fishman neither overpromises nor underpromises shareholders. Travelers’ $72 billion in assets ($40 billion in municipal bond investment) is protected by research. “It’s not magic. It’s not luck. It is truly hard work,” says Travelers’ number 1.
So if the 60-year-old businessman is not kept awake by potential extraordinary catastrophes that could upend insurance companies, what keeps him up? Trillion-dollar federal deficits, he answers. “You are sleeping too deeply if the numbers don’t scare you.” What would he advise? Start with aggressive means-testing for Social Security and Medicare and increases in the Social Security payroll tax cap. If he is encouraged at all, it is by the attention that the problem has received in the last two years—even though it was visible a decade ago. “My impression is that people are taking this seriously,” he stated.
The Burton Kossoff Business Leadership Lecture Series was created 10 years ago by Mrs. Phyllis L. Kossoff in memory of her beloved husband and his commitment to Baruch College. Mr. Kossoff, who would have been 80 years old in August, was a graduate of the class of ’47, a founding member and trustee emeritus of The Baruch College Fund, and the recipient of Baruch’s Alumni Allegiance Award. Mrs. Kossoff, on hand for the 2013 event, describes the lecture as a labor of love: “a personal fulfillment” and “a family tradition” that allows her to continue her husband’s “legacy: his belief in people and the efficacy of education.”