2022 C-Suite Awards: Rising Star | Jack Falvey,Falvey Insurance Group chief operating officer
The global shifts created by the COVID-19 pandemic brought a new, unfamiliar phrase to our lips: “supply chain.” Many people wondered what a supply chain is and how it works.
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Among the people in Rhode Island who understand supply chains and how they work is Jack Falvey, chief operating officer at Falvey Insurance Group in North Kingstown.
Falvey and his colleagues know the supply chain because they insure parts of it all over the world.
“We provide insurance for cargo and companies moving goods worldwide,” Falvey said.
This financial protection touches on ships, tankers, barges, trucks, warehouses and even oil drilling platforms.
The company was founded in 1995 by Falvey’s father, Michael Falvey, as Falvey Cargo Underwriting. Under its current name, the company includes four divisions – Falvey Cargo Underwriting, Falvey Shippers Insurance, Safe Harbor Pollution Insurance, and Falvey Insurance Services.
Falvey Insurance Group is a managing general agent, a type of insurance agent or broker that is vested with underwriting authority from other insurers.
The company has enjoyed enormous growth since Jack Falvey came onboard eight years ago. The staff rose from 79 to 120 people from 2019 to 2021. During this period, gross revenue rose by 50%. Falvey was involved and responsible for growing the portfolio 158% over the past five years.
Falvey said the company insures one out of every three commercial vessels in the U.S.
Jack Falvey graduated from Northeastern University with a degree in international business. He worked for a while in management consulting in Boston and Shanghai, and then joined his father’s firm when more analytics expertise was needed.
Jack Falvey attributes the company’s recent growth to three actions. One was to invest more decision-making power in middle managers.
“Pushing decision-making down into the organization helped make people feel more empowered,” Falvey said.
Second, in 2019, seven Falvey executives went to Harvard Business School to take a course on transforming the customer experience.
“Certain things really matter to certain customers and other things don’t,” Falvey said. “You have to invest in what matters to the customer.”
The third action came about after 2017, when a trifecta of three massive hurricanes – Harvey, Irma and Maria – led to $8.5 billion in losses. Many insurers were charging premiums that could not cover the losses and simply closed their doors.
“The entire market contracted in terms of capital for coverage,” Falvey said. “We were able to keep the same capacity and to grow it because of our focus on profitability.”
After this shakeout, the third element in Falvey’s growth was a systematic increase in high-quality capital partners. These partners are other insurance companies that allocate a portion of their funds to Falvey. Because it’s a managing general agent and a specialist in the supply chain, other insurance companies give Falvey the authority to write policies on their behalf. The list of high-quality partners more than doubled by the end of 2018.
The company also sought and found excellent shipping clients, including Google, Apple, and Facebook (for the need to move servers), along with life sciences companies, including Moderna Inc., one of the COVID-19 vaccine manufacturers.
One of Falvey’s most significant accomplishments was to work with three other large companies to create a $175 million investment fund for MGA Safe Harbor Pollution Insurance. A 1990 federal law, after the catastrophic Exxon Valdez oil spill, placed the liability for oil spills onto the owners of vessels. The Safe Harbor Pollution Insurance fund provides coverage for very expensive spills. Falvey led the negotiations, structuring and contract reviews for the deal, a game-changer in the market.
Daryl Mackay, chief relationship officer at Falvey Insurance Group, has known Jack Falvey since Falvey was a child.
“Whatever he puts his mind to, he generally does well,” Mackay said. “He knows all aspects of the business.”
Falvey’s creativity in enhancing and developing the capacity of the company’s computerized systems helped the company evolve significantly.
“We are a high-tech insurer and Jack has taken us to the next level,” Mackay said. “People look at what we do and wish they had what we have.”
