New York, N.Y.—The International Insurance Society (IIS) has announced that Guy Carpenter, the founder of Guy Carpenter & Company, has been elected to the 2011 Insurance Hall of Fame. Mr. Carpenter, who received the award posthumously, will be inducted at the June 20 gala dinner during the 47th IIS Annual Seminar at the Fairmont Royal York Hotel in Toronto, Canada, June 19 – 22, 2011. The Insurance Hall of Fame award honors insurance leaders who have made a broad, encompassing and lasting contribution to the insurance industry and who are recognized by their peers as successful leaders, innovators or visionaries. Posthumous Laureates of the Insurance Hall of Fame are selected by the IIS Honors Committee, a body of senior insurance executives and academics.

“Mr. Carpenter laid the foundation for reinsurance brokerage as we know it today, which is an outstanding contribution to our industry, and Guy Carpenter & Company is now a global reinsurance intermediary giant,” says Bernhard Fink, IIS Honors Committee Chairman. “Mr. Carpenter was also the inventor of The Carpenter Plan,” adds Michael J. Morrissey, IIS President and CEO, “a simple yet brilliant concept which revolutionized the industry by looking at losses over the span of multiple years rather than a single year.” Born in 1869 in New Orleans, Louisiana, Guy Carpenter began his career at Sun Mutual Insurance Company in 1884. In 1893 he was an agent for Liverpool & London & Globe Insurance Company, and in 1912 he was Southern Manager for American Central, Western Assurance and British America. Shortly thereafter, in 1913 Guy Carpenter became manager of the Cotton Insurance Association, a pool of insurance companies that handled insurance for cotton in the southern United States.

As manager of the Cotton Insurance Association, Guy Carpenter was dissatisfied with the process of attaining the group’s reinsurance, which was done on a flat-rate treaty basis. He developed an entirely new way to manage risk and cost to the mutual benefit of both cedent and reinsurer. The “Carpenter Plan” considered loss experience over a number of years and automatically adjusted premiums based on the rolling average loss. The Carpenter Plan could also be substituted for the oldform treaty reinsurance…a revolutionary concept that could foster improved risk management. In 1920 the first “Carpenter Plan” was written for the Cotton Insurance Association after much resistance by the marketplace, which was reluctant to begin conducting business differently. The automatic adjustment within the “Carpenter Plan” was the forerunner of all other experience rated reinsurance to follow.

In 1922 Guy Carpenter decided to help insurers take advantage of this new form of reinsurance by forming Guy Carpenter & Company, the reinsurance intermediary. Guy Carpenter hired a former colleague from the Cotton Insurance Association to help manage the new broker firm. George Nichols was an extraordinary businessman, and the two formed a partnership that helped build a company, achieve Guy Carpenter’s vision and change an industry.

In 1923, with his health failing, Guy Carpenter sailed from New York to London in order to conduct business. Among the ship’s passengers were Henry W. Marsh and Donald R. McLennan. The now famous transatlantic voyage was the backdrop for an agreement that joined Guy Carpenter & Company with Marsh & McLennan by June 14 of that same year. From the beginning, Guy Carpenter & Company was a global business, since nearly all of its initial reinsurance was placed in Lloyds and the London market.

In the years that followed, Guy Carpenter & Company would be renowned for the innovative and persistent nature of its founder. Its culture provided unprecedented access to the leaders of the firm and open communication. Management was obsessed with detail and accuracy and rewrote policies and contracts that altered the way wording was subsequently adopted by the industry. Guy Carpenter died suddenly in 1935 and was succeeded by George Nichols as president of Guy Carpenter & Company. Guy Carpenter left a legacy that lives on in the firm that bears his name. It remains true to its founder’s entrepreneurial spirit, his client focus and perseverance. The company he established continues to change the industry, much as its founder did some 90 years.

The Insurance Hall of Fame, administered by the IIS, was created in 1957 and today boasts more than 100 Laureates from around the globe. The IIS, a non-profit corporation founded in 1965, has a membership of almost 900 leading insurance executives, academics and regulators, from 90 countries