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Welcome to the Pride,

CFOs, let's be real.

Insurance is a pain.

It's complex, time consuming, and feels like just another box to check on your endless to-do list.

What if we told you it doesn't have to be that way?
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That with the right approach, insurance can be a powerful tool to protect your company's balance sheet—and your own reputation.

Take Steve, for example. As CFO of a regional insurer, he came to us facing $2 million in potential uncovered exposure after his carriers denied coverage for a bad faith claim. (Steve is not his real name)

In this no-BS guide, we'll show you how elite CFOs like Steve are flipping the script on insurance:

• The one factor that matters more than price (why most brokers won't tell you about it)
• How to escape the 150-day renewal fire drill that makes you want to pull your hair out
• The coverage hierarchy every CFO must understand
• The five questions every CFO should ask to stress-test their coverage
• Actionable steps to turn insurance from a cost center into a strategic lever

We want this to be the last article you ever read on insurance.

When Your Own Insurance Becomes the Problem

"We thought we were covered," Steve said, his voice tight with frustration.

The denial letters sat stacked on his desk…

• Their reinsurer claimed the ECO/XPL cover for bad faith wasn't triggered yet.
• Their commercial E&O policy cited exclusions for claims handling.
• Neither program clearly covered mounting defense costs.

What started as a straightforward claim turned into a two-year battle. Steve wasn't just fighting the claimant—he was fighting his own insurance carriers over $2 million in potential uncovered exposure.

"The worst part wasn't even the financial hit," Steve later told us. "It was watching our executive team get pulled away from growth initiatives, seeing our reputation take hits with stakeholders, and losing sleep wondering what other gaps might be hiding in our program."

The real costs mounted beyond just the potential uncovered claim:

• Executive time diverted from core business
• Legal fees fighting battles on multiple fronts
• Reputational damage with stakeholders
• Budget strains during the prolonged resolution
• Missed strategic opportunities while leadership focused on claims issues

Does this scenario sound familiar?

Take our quick self-assessment below to see if your company might be vulnerable to similar risks.

Welcome to the Insurance Paradox

Insurance companies face a fascinating contradiction.

You're experts at providing risk solutions to others.

Yet when it comes to your own corporate coverage, blind spots emerge in surprising places.

In our 25+ years working exclusively with Chief Financial Officers of Financial Institutions, we've seen this scenario play out repeatedly. This paradox creates vulnerabilities that can cost your organization millions when claims hit.

Why Even Sophisticated Buyers Miss Critical Coverage Gaps?

1. Structural complexity - the interplay between ECO/XPL coverage in reinsurance towers and commercial policies creates numerous coordination points where gaps can emerge
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2. Organic evolution - as companies expand, their insurance programs often grow in a piecemeal fashion rather than being developed holistically
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3. Documentation overload - policies contain hundreds of pages and dozens of endorsements, making critical details easy to overlook
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4. Form misalignment - standard commercial forms weren't designed with insurers' exposures in mind, creating inherent mismatches with your business model
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The most sophisticated insurance company CFOs recognize this misalignment and address it proactively.

The Insurance Company CFO's Self-Assessment

Rate your confidence in each area on a scale of 1-5:

• 1: Significant concern
• 3: Moderate confidence
• 5: Complete confidence

Scoring:

• 30-35: Your program demonstrates elite risk management
• 23-29: Your program is solid but has potential improvement areas
• 16-22: Your program has concerning vulnerabilities that need attention
• Under 16: Your program has significant exposure requiring immediate review

The Elite CFO's Approach to Insurance Excellence

In this guide, we'll show you how elite insurance company CFOs transform their corporate insurance from an expense into a competitive advantage.
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Over three decades, we’ve seen the most sophisticated master these six strategies:

1. Reverse-Engineered Program Design: Starting with Claims Scenarios

Most insurance programs start with standard market forms.

Forward-thinking CFOs take the opposite approach.

• They analyze claims patterns specific to insurers, including emerging bad faith claims, regulatory actions, and class action developments
• They model scenarios, simulating how different policy structures would respond
• They design coverage to comprehensively address these scenarios

Real-world example: A regional insurer modeled a hypothetical regulatory action combined with shareholder litigation. They discovered their program would leave them with significant uncovered defense costs due to allocation issues.

This insight allowed them to restructure before experiencing an actual claim.

2. The Coverage Hierarchy: Prioritizing Protection Where It Matters Most

Not all insurance policies carry equal weight.

Sophisticated CFOs establish a clear hierarchy of coverage priorities:

• Directors & Officers protection - Protects leadership's personal assets and the company's balance sheet
• Errors & Omissions - Covers claims arising from professional services
• Cyber Liability - Addresses exposures from data breaches and system failures
• Employment Practices Liability - Protects against workplace claims
• Fiduciary Liability - Covers claims related to employee benefit plan management
• Crime Coverage - Addresses employee dishonesty and fraud

The hierarchy isn't just about which coverages to prioritize—it's about how they interact.

Elite CFOs ensure seamless coordination between these coverages, particularly at the intersection between D&O and E&O policies.

3. The Hidden Factor: Claims Handling vs. Premium Cost

Most organizations fixate on premium cost when evaluating carrier options.

Experienced CFOs know better. Premium is only one component of the total cost of risk.

The differentiating factor that truly impacts your bottom line? Claims handling approach.

Consider this example:

A regional insurer selected a carrier offering premiums 15% below market for their D&O coverage. When they experienced a significant claim, that carrier's adversarial approach and delayed responses extended litigation by 18 months, increased defense costs by over $1 million, and diverted countless executive hours.

The "savings" from the lower premium were dwarfed by the true costs of poor claims handling.

Elite CFOs evaluate carriers on multiple dimensions:

• Claims payment philosophy - does the carrier have a reputation for fair and prompt handling?
• Claims staff experience - do they have dedicated teams familiar with insurance company exposures?
• Coverage interpretation approach - how do they handle policy ambiguities and novel claim scenarios?
• Financial strength - do they have the capacity to respond to catastrophic losses?

By selecting partners based on these criteria rather than premium alone, Elite CFOs often achieve significant long-term savings despite potentially higher initial premiums.

4. Contractual Engineering: The Devil’s in the Details

Policy wording matters—particularly for insurance companies whose operations create specialized exposures not contemplated in standard forms.

Elite CFOs scrutinize exclusionary language and definitions that could impact coverage for their specific operations.

Three critical areas demand scrutiny…

Professional Services Exclusions in D&O Policies - Standard D&O policies typically exclude claims arising from professional services. This creates a potentially devastating gap for insurers whose core business is providing professional services.

Sophisticated CFOs ensure their D&O coverage includes carve-backs for:

• Claims alleging inadequate reserving
• Regulatory actions related to market conduct
• Shareholder claims related to underwriting practices

Insured vs. Insured Exclusions - Most D&O policies exclude claims brought by one insured against another.

This creates unexpected gaps for insurance companies, particularly in:

• Disputes between affiliated companies in a holding company structure
• Claims involving former officers who remain affiliated with the company
• Regulatory actions where former executives cooperate with investigations

To address these gaps, best-in-class policies include “Entity vs. Insured” language and incorporate appropriate carve-backs.

Regulatory Investigation Coverage - Insurance companies face specialized regulatory scrutiny. Standard policy language often limits coverage for regulatory investigations to formal proceedings against named individuals, potentially leaving significant defense costs uncovered during critical early stages.

Forward-thinking CFOs ensure their program includes:

• Coverage for informal inquiries and requests for information
• Protection for the entity during regulatory investigations
• Coverage for internal investigations triggered by regulatory interest should be covered as a specific line item within your policy

Coverage for informal investigations/inquiries for information may come at an additional premium.

Depending upon the exposure, it may be worth investigating.

5. Six-Month Renewal Orchestration: The Strategic Advantage of Time

Most organizations approach renewals reactively, beginning 90 days before expiration.

This compressed timeline forces them into a position of weakness. Elite CFOs implement a strategic, 150-day renewal process.

Days 150-120: Development

• Schedule renewal strategy meetings
• Perform comprehensive exposure analysis
• Complete marketplace reviews and carrier evaluations
• Develop submission strategies

Days 120-90: Alignment

• Conduct renewal strategy meetings with stakeholders
• Align on strategy and marketing plans
• Finalize applications and submission materials

Days 90-60: Negotiation

• Submit to selected carriers
• Conduct preliminary negotiations
• Provide regular marketing updates to leadership

Days 60-30: Finalization

• Evaluate quotes and terms
• Complete subjectivities
• Prepare comprehensive renewal proposals

Days 30-0: Decisions

• Present final options to leadership
• Bind coverage
• Distribute policies and coverage summaries

This extended timeline provides a strategic advantage—approaching the market from a position of strength rather than necessity. It gives underwriters time to thoroughly evaluate your submission rather than making quick, conservative decisions based on limited information.

6. Measuring Success: The Insurance Company CFO's Dashboard

How do you know if your corporate insurance program truly delivers?

Elite CFOs track specific metrics beyond simple premium comparisons…

Total Cost of Risk (TCOR) as a Percentage of Revenue - this comprehensive metric includes premiums paid, self-insured losses, risk management expenses, captive operating costs, and claims administration expenses.

Coverage Coordination Score - a proprietary metric that evaluates how seamlessly your various policies work together, identifying potential gaps or overlaps at critical intersection points such as:

• ECO/XPL coverage vs. commercial E&O
• Entity coverage under D&O vs. E&O
• Cyber coverage across multiple policies

Claims Recovery Ratio - measuring the percentage of submitted claims dollars ultimately recovered through your insurance program. Elite CFOs target recovery ratios above 80% for covered claims.

Renewal Efficiency Index - tracking resources expended during the renewal process, including executive time commitment, documentation burden, information request response time, and submission quality.

Program Resilience Score - this forward-looking metric assesses how your program would respond to emerging risks and changing market conditions.

By tracking these metrics over a couple of renewal cycles, elite CFOs transform insurance from a transaction into a strategic asset that builds strength year over year.

How Steve's Story Ended: The Three-Phase Resolution

Remember Steve, our client from the insurance company in the Midwest?

After two years of frustration, he sought specialized help. A proven response protocol was implemented.

Phase 1: Damage Control

• Assembled a claims advocacy team with ECO/XPL expertise
• Conducted comprehensive analysis of both coverage programs
• Found policy sections that support coverage despite unclear and ambiguous wording
• Leveraged senior relationships to escalate above frontline adjusters

Phase 2: Strategic Negotiation

• Presented comprehensive coverage analysis highlighting policy ambiguities
• Applied relevant legal principles to address policy ambiguities in the client's favor
• Facilitated direct discussions between the carrier’s senior management and his company’s executive team

Phase 3: Program Restructuring

• Created clear delineation between response for their ECO/XPL coverage and commercial market ICPL program
• Replaced convoluted policy language with streamlined manuscript forms
• Reduced documentation from 250+ pages to under 60
• Structured excess layers to truly follow form on key provisions
• Moved coverage to carriers with proven track records of fair claims handling

The Results

Within four months:

• Carriers agreed to cover the claim
• The company saved over $2 million in potential exposures
• Legal fees for coverage disputes disappeared
• Executive time refocused on core business strategies
• The restructured program closed all identified coverage gaps
• Renewal negotiations began six months in advance with comprehensive actuarial support
• New claim protocols established with carriers to prevent future disputes

"What impressed me most wasn't just that they solved our immediate crisis," Steve reflected. "It was how they transformed our entire approach to insurance. As insurers ourselves, we have sophisticated risk knowledge, but they brought expertise in structuring insurance and claims advocacy that was superior to even what we’ve experienced with some of the global brokers. They didn't just fix our policy. They gave us a competitive edge we didn't have before."

The CFO's Strategic Insurance Framework

As a CFO, your corporate insurance program touches every aspect of your role.

Ready to transform your corporate insurance program? Let's talk.​

White Glove Service: Why Specialized Expertise Matters

The most sophisticated insurance companies recognize a fundamental reality.

Despite their internal expertise, specialized brokers bring essential perspective, strategy, and execution to their corporate insurance programs.

This specialization manifests in several ways...

Technical depth and coverage acumen

• Understanding things like ECO/XPL coverage structures and reinsurance contract interplay
• Knowledge of commercial market appetite for insurer exposures
• Tracking of emerging claim trends affecting insurance companies
• Monitoring of regulatory developments impacting coverage needs

Proprietary analytics and benchmarking

• Data-driven insights supporting program improvement
• Peer benchmarking specific to insurers of similar size and structure
• Claims trend analysis identifying emerging exposures
• Carrier performance metrics evaluating claims handling approach

Market access and leverage

• Relationships with markets having appetite for insurer risks
• Ability to counter adverse underwriting assumptions with historical performance data
• Identification of alternative risk transfer options for difficult-to-place exposures
• Strategic timing of submissions to capitalize on market conditions

Claims advocacy as core competency

• Deep understanding of coverage interpretations specific to insurer exposures
• Relationships with senior claims personnel at key carriers
• Experience with similar claim scenarios informing resolution strategies
• Resources to analyze complex coverage interactions

Proactive risk intelligence

• Weekly market updates on emerging trends
• Regulatory bulletins highlighting evolving coverage needs
• Peer network insights revealing common challenges
• Thought leadership illuminating evolving practices

Your Path Forward: Four Steps to Insurance Excellence

You can transform your corporate insurance program from a necessary expense into a strategic advantage.

The execution begins with these four steps…

1. Comprehensive Assessment

[ ] Identify coverage gaps and potential exposures not adequately addressed

[ ] Evaluate how your various policies work together, particularly at critical intersection points

[ ] Analyze your carriers' track record of claims handling and payment

[ ] Assess whether your program is structured for current market conditions

[ ] Review your policy documentation for clarity and consistency

2. Strategic Roadmap Development

[ ] Prioritize coverage enhancements based on exposure severity and probability

[ ] Create a phased implementation plan aligned with renewal cycles

[ ] Develop custom manuscript wording addressing insurer-specific exposures

[ ] Design carrier selection criteria emphasizing claims handling philosophy

[ ] Establish metrics for ongoing program evaluation

3. Implementation and Execution

[ ] Initiate renewal process 150 days before expiration

[ ] Engage underwriters based on strategic carrier selection criteria

[ ] Execute comprehensive negotiation strategy

[ ] Implement technical wording enhancements

[ ] Document program structure and coverage intent

4. Ongoing Optimization

[ ] Track key performance metrics (TCOR, coordination score, claims recovery ratio)

[ ] Conduct annual stress testing using evolving claim scenarios

[ ] Update program based on emerging exposures and market conditions

[ ] Share insights across risk management and underwriting functions

[ ] Leverage program sophistication in rating agency discussions

Beyond Just Another Cost Center

Insurance isn't merely a cost center for Financial Institutions and Insurance Companies.

It's a strategic tool that protects capital, enhances resilience, and supports institutional growth when properly structured.

In an industry defined by managing risk for others, ensuring your own protection deserves the same strategic focus and specialized expertise.

Our team exclusively serves sophisticated financial institutions, including insurers. With over three decades of experience and more than $250 million in claims recoveries for clients, we bring specialized expertise to insurance companies seeking to strengthen their own protection.

Ready to transform your corporate insurance program? Let's talk.​

The Bottom Line

Not quite ready to talk…?

Check out our personal asset protection blueprint.

If you're a director or officer at an FI - your personal assets are on the line if your company faces a major claim.

That's why we created the D&O Contract Vigilance Blueprint. It’s a 5-day email course to help you:

• Secure better D&O insurance: Learn how to avoid common policy mistakes and identify overlooked coverage gaps.
• Protect your personal assets: Understand your potential liability and take steps to mitigate your risks.

​>>> Get the D&O Contract Vigilance Blueprint​

Don't wait until a claim hits to find out you're under-protected.

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Stay Covered,

Natasha & Mark

Co-Founders and Managing Partners

LION Specialty

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P.S. Want to see how your insurance program stacks up? Contact us for a free, no-BS review. We'll benchmark you against your peers and show you exactly how to optimize your coverage and costs. Book your consultation here.
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