The San Diego Union-Tribune

Ten days after Trindl Reeves was appointed managing director of the Marsh & McLennan insurance office in San Diego, she was on her way to meet a friend for breakfast when she heard a radio report about a plane crashing into a building in New York.

“I just caught part of the story and it wasn’t clear what it was about,” she said. “When I got to the restaurant, my friend asked me what I’d heard about the crash. We both realized something horrible had happened, so we skipped breakfast and went to our offices to find out what was going on.”

It was Sept. 11, 2001, and the first of two jetliners had struck the World Trade Center. The first plane scored a direct hit on Marsh’s information technology and corporate finance offices. None of the 300 employees survived.

In the next building, 1,900 other Marsh workers were hastily evacuating the firm’s main headquarters.

“When I got to my office, a guy from our New York offices was pacing in the lobby,” she said. “I brought him inside and set up a TV and other people gathered around. We sat with this gentleman and watched our colleagues perish. Soon he was crying and then we were all crying.”

For Reeves, 38, whose clients range from Amylin Pharmaceuticals to the San Diego Regional Airport Authority, the terrorist attack was the darkest of many challenges she would face as head of one of San Diego’s largest insurance brokerages.

Reeves’ efforts have ranged from pressing for changes to the California workers’ compensation system to coping with the effects of a New York criminal case against some of her company’s top executives.

These days, her most pressing task is to warn customers that their insurance rates might go up because of hurricanes Katrina and Rita.

Last week, she sent a letter to warn top clients that some insurance costs may rise sharply as reinsurers — who provide underwriting for insurance policies — post new rates July 1.

“Be prepared to make tough decisions regarding the trade-off between coverage and price,” Reeves warned.

Reeves started her career in insurance in the late 1980s while studying for a bachelor’s degree in psychology at the University of California Irvine. Her goal was to become an industrial psychologist: helping improve corporate organizational structures.

She thought that before she advised companies, she should get some experience working inside a company. So she took a job as a telemarketer for an insurance firm in Orange County. She soon decided she liked insurance, so she asked her grandmother for advice.

“She told me she had never met a psychologist who was truly happy with what they were doing, but that every insurance person she knew had money and was happy,” Reeves said.

Once Reeves got her degree, she was picked as one of 10 college graduates for a three-year training program sponsored by The St. Paul Cos. During the program, she was based at the Orange County offices of San Diego’s John Burnham & Co.

After the training program, Reeves was hired at the Sedgwick James insurance brokerage, setting up its Southern California technology practice. In 1996, she
joined Johnson & Higgins as vice president. Less than two years later, Johnson &
Higgins was acquired by Marsh & McLennan.

For a while, Reeves worked as a senior client manager for Marsh’s offices in Newport Beach, where she headed the firm’s regional technology group. But on Sept. 1, 2001, she was named managing director of Marsh’s offices in San Diego.

“Running the San Diego office is a pretty powerful position, since Marsh controls so much business here,” said Andy Barile, an insurance industry consultant in Rancho Santa Fe.

Reeves estimates that her client base includes about half of the area’s publicly traded companies.

Reeves was just settling into her job when terrorists attacked the World Trade Center. Reeves said the terrorist attack did not have much of a direct impact on her office.

But the attack transformed what had been a low-priced, competitive market for property insurance into a tight market, with rising price tags. And costs are shooting up again because of last year’s hurricanes.

The insured losses for the two hurricanes totaled about $45 billion, compared with $37.5 billion for the 9/11 attacks. When reinsurers begin drafting new “treaties” with insurers starting July 1, the price tag on some of the riskiest forms of property insurance — such as earthquake coverage — could rise 50 to 100 percent, Reeves said.

Industry critics say insurers are overstating the weather’s impact on insurance in order to raise rates.

“It’s a way for the insurance companies to panic the public into spending more than they should have to pay,” said Harvey Rosenfield, who heads the Foundation for Taxpayer and Consumer Rights in Santa Monica. “Californians shouldn’t have to pay for hurricanes on the East Coast or floods on the Gulf Coast.”

Reeves concedes that “there are times when some insurance companies are opportunistic and might raise rates larger than they should.” But she adds that reinsurers “have to make their money back or there’ll be no insurance.”

Reeves’ customers say she is watching out for their interests.

“Trindl’s been a wonderful counselor in evaluating our insurance rates,” said Julie Meier Wright, chief executive of the San Diego Regional Economic Development Corp. Reeves is a member of the board at the agency as well as being its insurance consultant.

“As a small operation, it’s hard to command a lot of attention from the big insurers,” Wright said. “When you have 12 to 15 people, you’re not in a position to aggressively negotiate rates. But Trindl’s been a great help.”

In 2003, Reeves participated in the battle to curb soaring prices for workers’ compensation insurance. She said she talked with Assemblyman Juan Vargas — head of the Assembly Committee on Insurance — a number of times as he worked on changes to workers’ comp laws.

Since the changes were introduced, workers’ comp premiums have fallen 46 percent. Critics complain that companies are using the reforms to block injured workers from receiving the help they need. California Insurance Commissioner John Garamendi last week said the law was being used to “unreasonably delay and deny medical care.”

But Reeves remains a firm proponent of the changes. “This was a win for employers,” she said. “We shouldn’t be paying as much money for people to stay home watching TV as they could be making at work. But I guess I’m sounding like a Republican.”

In the past couple of years, Marsh has gone through a rough period after New York Attorney General Eliot Spitzer charged that some of its leading New York executives manipulated insurance bids to steer clients to insurers that were paying Marsh the highest commissions.

Spitzer argued that Marsh’s actions violated laws requiring insurers to act in the customers’ best interests and not their own.

Last year, Marsh settled the dispute by agreeing to pay up to $850 million in restitution — including $100 million earmarked for California customers — and pledging not to take contingent commissions from insurers. Seventeen executives in five insurance companies, including eight former Marsh employees, pleaded guilty to various charges. Five other Marsh executives were indicted.

Even though all the alleged wrongdoing occurred in New York, the firm’s California operations felt the effects.

“After the Spitzer case — which involved just a handful of our people in New York — we went through a massive restructuring that required two rounds of layoffs,” Reeves said. “Our stock price dropped 40 percent, which was devastating for our employees. And we ended up sending some major clients to competitors because we could no longer service them.”

Marsh’s decision to drop commissions cut off a lucrative funding stream for
the company. The San Diego offices of Marsh were trimmed from 143 employees to
110, although hiring recently restarted.

“Our business has recovered from Spitzer, although things have been slower than normal, since we’ve narrowed our targets to our biggest companies,” she said. “We’re doing better than we did last year, but we’re still anemic compared to where we want to be.”

As Reeves tries to rebuild her business, she networks with potential customers at a variety of community organizations. Among other things, Reeves sits on the boards of the San Diego County YMCA, the high-tech entrepreneurial group Connect, the San Diego Venture Group, and the biotech trade group BioCom.

“She’s very clever, working her way onto those boards, especially the board of a venture capital group,” Barile said. “That’s the way a retail broker gets business right away — meeting a company as it’s starting up. She knows all the tricks.”