In remembrance of the 20^th anniversary of the Sept. 11, 2001 terrorist attacks, we are republishing an August 2018 article, which contains the recollections of Britt Newhouse, former chairman of reinsurance broker, Guy Carpenter. Newhouse worked in the second World Trade Center tower destroyed that day, when 295 colleagues from Marsh McLennan Cos. and 63 consultants lost their lives. His story follows here. Some dates and details have been updated.

Everybody has career-changing events and life-changing events—and sometimes, as with the case of Britt Newhouse, events from those two worlds collide. Newhouse, the former chairman of reinsurance broker Guy Carpenter, was in the South Tower of the World Trade Center on Sept. 11, 2001. He admits he was lucky to get out alive, but 295 of his colleagues died that day.

Even after [20 years], it’s obvious that memories of that day are still raw for Newhouse. He recalls that morning’s events as if they were yesterday. Ironically, in the midst of a tragedy brought by the worst of human behavior, he also saw humans at their best: people helping each other as they escaped the building and lower Manhattan. And later, colleagues, clients and reinsurers all pulled together to help the company rebuild.

Following his retirement at the end of 2017, Newhouse sat down with Carrier Management to discuss the influences and events that had a personal and professional impact during his 38-year career at Guy Carpenter, a subsidiary of Marsh & McLennan Cos. In addition to 9/11, he recalled the devastating impact of the investigation and lawsuits filed against Marsh and other brokers by then-New York Attorney General Eliot Spitzer. Of course, he has a lot of positive recollections as well—about an interesting, diverse career and the life-long friendships he has developed with people across the industry.

Perhaps the best place to start with a Newhouse career retrospective is with how he chose a career in the insurance industry. Newhouse says, wryly and without hesitation, that he joined the industry via nepotism—”It was absolutely nepotism.”

He landed his first insurance job at American International Group (AIG) because his father, Robert J. Newhouse Jr., a former chairman of Marsh, was friends with Maurice “Hank” Greenberg, AIG’s ex-CEO.

Yes, Newhouse is part of an insurance dynasty. His grandfather owned an agency in New York City, and his father, who died [in 2017] , spent a long career at both Guy Carpenter and Marsh. One of his brothers, Robert J. Newhouse III, now retired, was a Marsh broker, and two of his nephews (James and Gray Newhouse) are currently working at Guy Carpenter. And last but not least, Newhouse’s son, Andrew, works for AXIS Capital. [Editor’s note: In 2021, James and Gray Newhouse are working at Guy Carpenter and Cysurance, respectively, while Newhouse’s son, Andrew, now works for Aspen Re.]

When he graduated from college as a Russian studies major in 1976, Newhouse had a choice of becoming a teacher or joining the Central Intelligence Agency, given that the Cold War was in full flow. “I got confused and ended up joining AIG, but it was very much like the CIA,” he said with a laugh.

“I decided to give the insurance business a try to see if I liked it before I moved to Vermont to become a hippie plumber,” he added. Newhouse thought AIG might have some use for his Russian language skills because it did business, even then, with the Soviet Union.

He found he liked working at AIG and moved to Carpenter in 1979 when Frank Tasco, who was running the broker at the time, convinced him to join the company despite the fact that Newhouse’s father was still a Marsh executive.

He spent most of his career at Guy Carpenter, although Newhouse did leave the broker briefly in 1993 when he joined a new company called Zurich Reinsurance Centre (ZRC), a subsidiary of Zurich Insurance (which ultimately became Converium and later was purchased by SCOR). He decided to leave Guy Carpenter because he had been traveling on business at least 100 days of the year and felt he needed a change.

However, the experience wasn’t a happy one. “I learned a lot, particularly that I hated being on the underwriting side. I preferred the seat I had in the reinsurance transaction, which was working with the clients, understanding the clients’ needs and problems and what was driving them,” Newhouse emphasized.

“I like working with a client to make the solution, package it up, present it to the reinsurers, negotiate with them, close the deal, put it to bed and make sure it works,” he added. “Whereas, as a reinsurer, you’re just sitting at the end, waiting to be told, ‘Here’s the deal, take it or leave it.’ I didn’t like the separation and removal from client management.”

As a result, within six months he returned to Guy Carpenter. Within a few years, he worked his way up to New York branch manager, then to Eastern regional manager, then to president and CEO of the Americas, a business area that included the United States, Canada and Latin America, or two-thirds of the reinsurance broker’s business.

In 2008, he was named chairman of Guy Carpenter, which “really was a manufactured title because the company is 100 percent owned by Marsh & McLennan” and Marsh already had a chairman, explained Newhouse. Starting in 2008, he was repeatedly asked to stay in the role to provide continuity for the staff and clients and help with the transition of the business during a particularly tumultuous time in the company’s history.

He describes the role of Guy Carpenter’s chairman as “chief influencing officer” and “always the bridesmaid, but never the bride.” In other words, as titular chairman, he no longer had a real executive role, running a profit and loss center. He had a lot of seniority but no direct authority other than the influence he had over clients and colleagues.

Why was such a special role necessary to the company? Within three short years, Guy Carpenter had received two devastating blows. In addition to the rebuilding required after 9/11, there was a lot of internal turmoil and senior management changes after Spitzer filed a lawsuit against the broker Marsh and its parent, MMC.

Sept. 11, 2001

Taking those two events in succession, Newhouse first described his experiences of Sept. 11. When the first plane hit the North Tower, also known as Tower One, at 8:46 a.m., he had been sitting at his desk answering emails on the 52nd floor of the South Tower, or Tower Two.

“When the first plane hit, and we heard the explosions, we decided to close the office and send everybody home,” Newhouse recalled. “We didn’t know what had happened. We just knew that something had exploded.”

The explosions triggered memories for some. “A lot of our people had been in the tower during the first terrorist bombing of the World Trade Center in 1993, so they weren’t about to wait around and see what happened. Many went straight to the elevators and quickly got out,” he said.

“There was no reason to think anything was going to happen to Tower Two.” Newhouse and his colleagues didn’t know that in less than 20 minutes—at 9:03 a.m.—the next plane would hit their building.

He had been sitting at the receptionist’s desk, answering the phone and telling people to go home. When the plane hit Tower Two, he said the building shook violently and seemed “to lift off the ground and lean way over.” For a moment, he said, the building felt like it would topple into the plaza below.

“We all looked at each other in shock with our mouths open. Then the windows were covered with smoke and fire, which probably was a fireball from the plane’s gas tank,” he recalled.

“I shouted: ‘Okay, it’s time to go down the stairs!'” Newhouse and his colleagues walked down a packed stairwell from the 52nd floor to safety. Many of his colleagues who had been in Tower One that day weren’t so lucky: 295 colleagues from MMC and 63 consultants lost their lives.

He often ponders why some people that day were lucky and some were not. If he’d spent 10 more minutes in the building, he said he probably wouldn’t have made it out. Some people in the building managed to get down 80 flights of stairs, only to be killed by falling debris when they rushed out onto the street. “It was so sad and so unfair,” Newhouse added.

“Some of us were going to die, and some of us were going to live,” he said in a recollection of that day, which he penned in December 2001 so his children and grandchildren would have a record of his experiences. As one of the lucky ones, he wrote, it’s only right to remember and honor those who died—to think about them every day, rather than just once a year on the 9/11 anniversary.

At 6:30 a.m. the day after the attack, Newhouse went to a Marsh office in Connecticut to meet with the leadership team “to start figuring out what happened to us, how badly we were hurt and how many people we lost. It was probably a good thing that I didn’t have time to pause and think too much. I went right back to work the next morning.”

He said being busy helped him push through that terrible time. “Obviously, we had lost everything as a company. Our clients and reinsurers sent us copies of everything and helped us rebuild our files,” he said.

Spitzer Lawsuit

Ironically, he added, the company emerged stronger after both 9/11 and Spitzer’s 2004 lawsuit against MMC, which ultimately was settled when the company agreed to pay $850 million. Even after Spitzer, however, the uncertainties continued for MMC because there was a period when the company was being run by lawyers, who were focused more on compliance and targeting criminal and unethical behavior, said Newhouse. Rather than building its business, Guy Carpenter was internally focused.

Newhouse said it’s ironic that all Marsh employees who had been prosecuted by Spitzer ultimately won on their appeals. Nevertheless, New York State got nearly a billion dollars out of MMC, and it cost thousands of jobs, he continued.

“At Guy Carpenter, we didn’t lose any business during the whole Spitzer period. We lost a few people, but not many,” he said. “We had two years of no new business because clients were uncertain what was going to happen to us.”

He did admit to one good result from the Spitzer episode: There is more transparency about the existence of contingent commissions and how brokers are remunerated.

Another benefit, Newhouse said, is that Guy Carpenter and Marsh became stronger after 9/11 and Spitzer.

“I have said repeatedly to colleagues that there aren’t many companies that could have withstood both of these events in a 10-year period and come out stronger,” he said.

The reason is that both events “forced us to collaborate better and more effectively because we were under a great deal of stress. And our clients wanted us to succeed.”

Realigning Business

After Spitzer, another disruption loomed. Carpenter decided to reduce its dependence on its top 30 mega-insurer clients—what Newhouse said was a necessary strategic move because these clients had grown through mergers and acquisitions and were buying less reinsurance.

In line with this strategy, Guy Carpenter successfully replaced approximately 30 percent of its revenue with revenue from many medium, regional and specialty companies around the world, he said, noting that during these years, the company still showed organic growth of 2 percent to 6 percent a year.

The result of this strategy is that Guy Carpenter’s business is now “much more distributed and diversified than it’s ever been.”

During this transitional period, Newhouse focused on developing new clients as well as the maintenance and retention of existing clients. “I spent a fair amount of my time on the segments that offered diversification to the business—growing our regional business, our specialty business and our non-U.S. business in Latin America and Europe.”

In 2007, Guy Carpenter tried to buy U.K.-headquartered reinsurance broker Benfield Group but lost out to Aon Corp., which was able to offer cash and purchased the company in 2008. “We didn’t have cash. We had stock and cash,” Newhouse said. “At the time, we were still handcuffed by the Spitzer backwash.”

See related sidebar: Newhouse’s Leadership Lessons

Guy Carpenter next decided to restructure its European operations to run and manage European business from London, using a team approach, sharing resources across the business. “Guy Carpenter’s business model was to take advantage of being a big intermediary, using the global resources of our entire firm while ensuring that clients feel like they’re dealing with a local office,” he said.

When the Spitzer cloud lifted around 2008, Guy Carpenter began showing strong top- and bottom-line organic growth, Newhouse affirmed.

He decided to retire in August last year, after he had open heart surgery and his wife had been ill.

“I had already fulfilled my commitments to the company and the people I worked with,” he said.

“I’ve had a good time in my career. I love the company and the people. When I left Guy Carpenter, I was very confident that the company was in great hands with its management and leadership. In fact, the company has probably never been healthier.”

Newhouse finds reinsurance the most fascinating sector in the insurance industry. “You get a macro, 50,000-foot altitude views of workers comp, property, marine, med mal, pollution—the list goes on. You see all of these different aspects of insurance and how it affects commerce and people’s lives, communities and economic growth. It’s fascinating.”

Massive Changes Ahead

He offered some words of caution for the industry, however.

“The insurance industry is terrible at change unless it’s forced on them. I spent most of my last few years at the company thinking and worrying about technology and what’s ahead for the industry,” he said. “When companies are faced with a technological revolution, it’s much easier to say, ‘No, you can’t prove that this technology or this business model or this new way of doing business is going to be important for us in the future.'”

If you can’t prove the long-term value of an investment, then the people who believe that inaction is less risky than action have too much power, he emphasized. He described these types as the accountants and bean counters who “aren’t facing the front lines of competition and client demands.”

“Companies better be prepared to take some risk and apply some intuition based on experience in the business if they are going to survive what’s coming in the next 20 years. It’s not going to be tomorrow, or even next year, or even in five years, but over the next 20 years, the business is going to change massively,” he continued.

“Understanding clients’ needs with respect to emerging technology and helping them adapt will be 30 percent of Guy Carpenter’s business offering in the future,” Newhouse predicted.

The original version of this article was published online by Carrier Management on Aug. 2, 2018.