2015 Power Broker

Best Brokers of 2015

Creative risk solutions, industry knowledge and superior customer service are hallmarks of the 2015 Power Broker®
By: and | February 19, 2015 • 12 min read

One certainty about our annual Power Broker® contest, now in its 10th year, is that it is never the same contest twice.

Brokers who seemed to have a lock on certain industry categories in past years have seen their grip loosened as new challengers rise to compete with them.

PowerBrokerLOGOJudging the contest, never an easy task, with hundreds of strong candidates annually, becomes more demanding every year as different risks emerge, and market capacity and appetite shifts.

But there are some things about Power Broker® that remain a constant. Every year, we talk to hundreds of risk managers across a broad spectrum of the economy to get their opinions on which brokers did the best work for them in the past year. It’s their testimonials that elevate a competent broker to a Power Broker®.

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When we talk to those risk managers we ask them to discuss the brokers who serve them in line with three key criteria.

Most importantly, we want to find brokers who were creative and tireless in finding recent risk solutions for their clients. Risk managers find reasons to sing brokers’ praises when they go to bat for them when the chips are down; when coverage is scant, underwriters rebuff them, or when acquisitions or business expansions make a puzzle of their risk exposures.

It took a team of 10 editors and more than 1,000 phone calls/emails to select the 2015 Power Broker® winners.

A second criteria is customer service. Believe it or not, we hear stories every year about brokers not returning risk managers’ calls when they are in a tight spot and need assistance. Leaders of brokerages swear that heads will roll if that’s found to be the case in their business, yet we hear it year after year.

The third criteria is industry knowledge, and by that we can assume insurance industry knowledge, but more importantly, deep knowledge of the business brokers are arranging cover for. When risk managers speak of the best brokers, they talk about how the brokers know their business so well that they become extensions of the organization. That entrepreneurial approach is a key trait of a Power Broker®.

This year, we identified 172 Power Brokers, an increase from previous years, because rather than exclude brokers who didn’t fit into a specific category, we expanded our At-Large category to capture brokers whose specialty isn’t well-defined by one sector or another.

Last year, the machinations of the Affordable Care Act caught our eye as a broad challenge for brokers and consultants. This year, we delved into an area that the industry doesn’t talk about enough; that area is claims conflict and resolution.

When the carrier balks and the customer yelps, Power Brokers step up to set things straight.

The State of Claims Conflict

For the population served by this year’s Power Brokers, 2014 was a tumultuous year across multiple lines of business. Many insureds have been faced with the one-two punch of a devastating loss followed by an unexpected claim denial. Some of those same entities were later left feeling raked over the coals when that claims activity — or other woes — led to harsher terms or even a cold shoulder from carriers with a diminished appetite for the risk. Enter the Power Brokers to bring everyone back to common ground.

In the aftermath of a loss 20 years ago, the question, “Are we covered for this?”, might have elicited a simple yes or no answer. Now there is far more gray area to sift through.

Resolving conflicts on behalf of clients has always been a part of the job for brokers. But brokers acknowledge that in recent years, the nature of these conflicts has changed.

In many areas, claims severity has experienced a slow upward climb, brokers said, leaving carriers more likely to balk at paying increasingly large sums. But there is also larger force in play that is making a state of conflict the new norm for a great many brokers and their clients.

There has been a rapid level of change occurring over the past decade or two, most of it connected to advances in technology.

As a result, risk exposures have deepened in complexity, and so have the meticulously crafted programs used to insure those risks. In the aftermath of a loss 20 years ago, the question, “Are we covered for this?”, might have elicited a simple yes or no answer. Now there is far more gray area to sift through.

“Is the same claim I had 20 years ago more contentious to settle today? I’d have to say no,” said Drew Haaser, U.S. technology practice leader at Marsh and a 2015 Power Broker® in the Utilities/Alternative Energy category.

“What I think we’re seeing is that it’s not the same claim from two decades ago.”

Haaser said that the constantly changing environment is moving faster than policy language can be adapted to keep up with it. The emergence of the sharing economy is one example.

“There’s no way the personal lines underwriter was anticipating that a private automobile was suddenly going to be doing ride-sharing. … At the same time, the commercial underwriter did not anticipate he was going to be insuring auto liability exposure for a fleet of vehicles that are unknown, driven by a cohort of drivers that are not professionally licensed.

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“What’s coming up are just new wrinkles, new gray areas that really need to be debated,” Haaser continued. But many are still thinking of claims in terms of the old paradigms, he said, and that friction is creating conflicts.

These new wrinkles mean a significant rise in coverage ambiguities. Brokers are seeing more instances where a claim could potentially fall under two or even three different policies depending upon how the parties interpret the circumstances.

“A lot of people just get into their rut and see their way of thinking. You have to take them beyond that.” — Amy Fedena, director of commercial accounts, Arthur J. Gallagher & Co.

“We’re definitely getting more gray,” agreed Phil Norton, national managing director, Arthur J. Gallagher & Co. and a 2015 Power Broker® in the Technology category.

Phil Norton, national managing director, Arthur J. Gallagher & Co.

Phil Norton, national managing director, Arthur J. Gallagher & Co.

“Gray is where people are more likely to make their stances and be stubborn. … The ability of these claims to cross over into as many as three separate types of policies could potentially have different carriers pointing fingers at each other saying, ‘It’s your claim,’ and then the client’s upset because no one’s paying it … they’re all too busy pointing fingers at each other.”

Newer technologies are also making for more challenging placements and renewals, especially when insureds are breaking new ground.

“If you’re a technology underwriter, you’re used to thinking about a product from a company that, say, makes routers, and the router goes into a data center and provides IT services — that you can wrap your mind around, that’s technology,” said Haaser.

“But suddenly that same technology underwriter is being asked to cover a product that’s going down-well in hydraulic fracturing, and they freak out:  ‘That’s not technology, that’s fracking!’ But it is [technology].”

The current speed of business can amp up conflicts as well, he pointed out. If an insured makes a component that goes into someone else’s product and something goes wrong, there’s a real need to get the claim settled quickly to keep the other party satisfied. But underwriters want to do all the testing and get to the root causes, said Haaser.

“They want to go slower.”

The Emotional Factor

Resolving conflicts, said Amy Fedena, director of commercial accounts with Arthur J. Gallagher & Co., is a matter of “being able to figure out exactly what the pain points are — what is everyone trying to accomplish.” That’s where brokers’ deep knowledge of their customers’ industries comes into play, as well as a serious attention to detail, and strong listening and analytical skills.

The next level is understanding the people involved — how they think, what motivates them and what they need to make decisions. That takes an exceptionally high level of emotional intelligence — what is often called EQ. In order to be successful at resolving conflicts, you have to understand what makes people tick.

Drew Haaser, U.S. technology practice leader, Marsh

Drew Haaser, U.S. technology practice leader, Marsh

“It’s so important in these types of negotiations to let the other party present their ideas first and get it off their chest,” said Haaser.

“I find they don’t listen if they’re thinking about what their counterpoint is, or what they have to say. [You have to] allow the other party to get their opinion out there before you can start to build the win for each side.”

Brokers said there’s an underlying cultural difference that makes adversaries out of insureds, underwriters and claims handlers. Haaser quipped that he’s often reminded of the famous line from Cool Hand Luke: “What we have here is a failure to communicate.”

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On the carrier side, every calculation and every bit of language that goes into policies and premiums is arrived at methodically and with careful precision. Insureds, on the other hand, are  thinking, “I’ve paid my premium to this underwriter for 10 years and never had a claim. Now I have an issue and I want it paid.”

Risk managers’ expectations are based on their understanding of the larger institutional relationship, said Haaser.

“So both sides are attacking it from this very different worldview,” he said.

Amy Fedena, director of commercial accounts, Arthur J. Gallagher & Co.

Amy Fedena, director of commercial accounts, Arthur J. Gallagher & Co.

“A lot of people just get into their rut and see their way of thinking. You have to take them beyond that,” said Fedena, a 2015 Power Broker® in the Construction category.

Citing a complicated conflict she dealt with in 2014, Fedena said the bottom line was everybody thought the situation was one way, but when they boiled down the details, they found that it wasn’t at all what it looked like on the surface.

That’s often what it takes to get people to look further than their own perspective.

Haaser agreed: “You need to be smart about how you pitch the claim, and that calls for digging into the details and presenting it in a way that will break the insurer out of their preconceived notions of whether it is or isn’t covered.

“I think underwriters have a tendency to jump to conclusions about which bucket something might fall into.”

“If I can get the client to see the carrier’s side,” Norton said, “[and] the carrier to see the client’s side — put them in each other’s shoes — then we might actually have two sides with a little bit of compassion … to the point where they’re looking toward a resolution rather than a fight.”

Cutting Through the Noise

There are also times when brokers need to shake things up in order to get a conflict resolved. Norton recounted a dispute he faced this past year involving large industry players and a multimillion-dollar claim with a lot of gray area getting in the way of getting the claim paid.

With such high stakes involved, not to mention an excessive number of lawyers, Norton decided to take things to a different level. He eschewed email, flying to New York and then to California to meet with the carrier and the insured personally.

“If you’ve got a claim that everybody, frankly, thinks is not going to get covered, and you get it paid? That’s like winning the Super Bowl.” — Drew Haaser, U.S. technology practice leader, Marsh

He convinced them to participate in a call without consulting attorneys present.

Prior to the call, he prepped his client by explaining the top three reasons the carrier was denying the claim. Then he gave them three reasons why those arguments weren’t entirely valid.

On the call, the client was completely prepped and Norton served as a facilitator. “What I saw was that a lot of the dispute was just the attorneys being overly zealous in taking their clients’ position.”

Norton repeated the process with the excess carrier as well. He was able to bring the parties to a resolution on both layers, with a result of $30 million eventually paid on the claim.

Without the buffer layer, both sides were more willing to listen and share information. And Norton’s personal visit changed the dynamic away from just being about lawyers firing emails back and forth.

“These are some of the elements that take you from zero to $30 million,” said Norton.

“Some of it’s luck and some of it’s skill and some of it is just completely handling the claim outside the box.”

Norton’s personal visit also elevated the level of trust in him and in his commitment to conflict resolution.

David Robinson

David Robinson, managing director, Aon

“Trust is probably the most critical component,” said David Robinson, managing director with Aon and a 2015 Power Broker® in the Energy/Downstream category.

“[You have to have a level of] trust with your client, that you will do the right thing on their behalf, and also develop trust with stakeholders — the underwriters, the claims adjusters.

“In order to achieve optimal outcomes for all sides,” he said, “that trust is imperative.”

Clients need that trust in their broker so they will accept when their position isn’t as strong as they assumed it was.

Or, for the client to look beyond the claim to see that maintaining a good relationship with the carrier requires reaching a resolution everyone can live with.

On the carrier side, building trust often comes down to respect and diplomacy, brokers agreed.

“There is a tendency to disrespect claims people at insurance companies,” said Haaser.

“I think many times these claims people are between a rock and a hard place, so one of the most important things is to be diplomatic and start by acknowledging how difficult their job is,” he said. Sometimes that is all that is needed to create collaboration so the claim can move forward.

It also doesn’t hurt to note, said Norton, that resolving the claim equitably might lead to future business.

It may be a matter of pointing out, he said, “Let’s think of this as a partnership rather than a dispute.”

“It’s a very effective strategy,” Fedena agreed, “to show them how it benefits them.

“[We might say], ‘Look, if you write the coverage for 18 months, and everyone’s happy, then maybe you can write the other nine lines.’ ”

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Because claims disputes are often high stakes situations for insureds, brokers said they feel clients place a significant amount of value on brokers’ ability to resolve claims.

“Getting a difficult claim paid,” Haaser said, “that’s like the playoffs … there’s more emotion around it … everything is a little heightened.

“And if you’ve got a claim that everybody, frankly, thinks is not going to get covered, and you get it paid? That’s like winning the Super Bowl.”

See the complete list of 2015 Power Broker® winners.

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at mkerr@lrp.com. Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at dreynolds@lrp.com.

More from Risk & Insurance

More from Risk & Insurance

High Net Worth

High Net Worth Clients Live in CAT Zones. Here’s What Their Resiliency Plan Should Include

Having a resiliency plan and practicing it can make all the difference in a disaster.
By: | September 14, 2018 • 7 min read

Packed with state-of-the-art electronics, priceless collections and high-end furnishings, and situated in scenic, often remote locations, the dwellings of high net worth individuals and families pose particular challenges when it comes to disaster resiliency. But help is on the way.

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Armed with loss data, innovative new programs, technological advances, and a growing army of niche service-providers aimed at addressing an astonishingly diverse set of risks, insurers are increasingly determined to not just insure against their high net worth clients’ losses, but to prevent them.

Insurers have long been proactive in risk mitigation, but increasingly, after the recent surge in wildfire and storm losses, insureds are now, too.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy,” said Laura Sherman, founding partner at Baldwin Krystyn Sherman Partners.

And especially in the high net worth space, preventing that loss is vastly preferable to a payout, for insurers and insureds alike.

“If insurers can preserve even one house that’s 10 or 20 or 40 million dollars … whatever they have spent in a year is money well spent. Plus they’ve saved this important asset for the client,” said Bruce Gendelman, chairman and founder Bruce Gendelman Insurance Services.

High Net Worth Vulnerabilities

Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

As the number and size of luxury homes built in vulnerable areas has increased, so has the frequency and magnitude of extreme weather events, including hurricanes, harsh cold and winter storms, and wildfires.

“There is a growing desire to inhabit this riskier terrain,” said Jason Metzger, SVP Risk Management, PURE group of insurance companies. “In the western states alone, a little over a million homes are highly vulnerable to wildfires because of their proximity to forests that are fuller of fuel than they have been in years past.”

Such homes are often filled with expensive artwork and collections, from fine wine to rare books to couture to automobiles, each presenting unique challenges. The homes themselves present other vulnerabilities.

“Larger, more sophisticated homes are bristling with more technology than ever,” said Stephen Poux, SVP and head of Risk Management Services and Loss Prevention for AIG’s Private Client Group.

“A lightning strike can trash every electronic in the home.”

Niche Service Providers

A variety of niche service providers are stepping forward to help.

Secure facilities provide hurricane-proof, wildfire-proof off-site storage for artwork, antiques, and all manner of collectibles for seasonal or rotating storage, as well as ahead of impending disasters.

Other companies help manage such collections — a substantial challenge anytime, but especially during a crisis.

“Knowing where it is, is a huge part of mitigating the risk,” said Eric Kahan, founder of Collector Systems, a cloud-based collection management company that allows collectors to monitor their collections during loans to museums, transit between homes, or evacuation to secure storage.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy.” — Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

Insurers also employ specialists in-house. AIG employs four art curators who advise clients on how to protect and preserve their art collections.

Perhaps the best known and most striking example of this kind of direct insurer involvement are the fire teams insurers retain or employ to monitor fires and even spray retardant or water on threatened properties.

High-Level Service for High Net Worth

All high net worth carriers have programs that leverage expertise, loss data, and relationships with vendors to help clients avoid and recover from losses, employing the highest levels of customer service to accomplish this as unobtrusively as possible.

“What allows you to do your job best is when you develop that relationship with a client, where it’s the same people that are interacting with them on every front for their risk management,” said Steve Bitterman, chief risk services officer for Vault Insurance.

Site visits are an essential first step, allowing insurers to assess risks, make recommendations to reduce them, and establish plans in the event of a disaster.

“When you’re in a catastrophic situation, it’s high stress, time is of the essence, and people forget things,” said Sherman. “Having a written plan in place is paramount to success.”

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Another important component is knowing who will execute that plan in homes that are often unoccupied.

Domestic staff may lack the knowledge or authority to protect the homeowner’s assets, and during a disaster may be distracted dealing with threats to their own homes and families. Adequate planning includes ensuring that whoever is responsible has the training and authority to execute the plan.

Evaluating New Technology

Insurers use technologies like GPS and satellite imagery to determine which homes are directly threatened by storms or wildfires. They also assess and vet technologies that can be implemented by homeowners, from impact glass to alarm and monitoring systems, to more obscure but potentially more important options.

AIG’s Poux recommends two types of vents that mitigate important, and unexpected risks.

“There’s a fantastic technology called Smart Vent, which allows water to flow in and out of the foundation,” Poux said. “… The weight of water outside a foundation can push a foundation wall in. If you equalize that water inside and out at the same level, you negate that.”

Another wildfire risk — embers getting sucked into the attic — is, according to Poux, “typically the greatest cause of the destruction of homes.” But, he said, “Special ember-resisting venting, like Brandguard Vents, can remove that exposure altogether.”

Building Smart

Many disaster resiliency technologies can be applied at any time, but often the cost is fractional if implemented during initial construction. AIG’s Smart Build is a free program for new or remodeled homes that evolved out of AIG’s construction insurance programs.

Previously available only to homes valued at $5 million and up, Smart Build recently expanded to include homes of $1 million and up. Roughly 100 homes are enrolled, with an average value of $13 million.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work.” — Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“We know what goes wrong in high net worth homes,” said Poux, citing AIG’s decades of loss data.

“We’re incenting our client and by proxy their builder, their architects and their broker, to give us a seat at the design table. … That enables us to help tweak the architectural plans in ways that are very easy to do with a pencil, as opposed to after a home is built.”

Poux cites a remote ranch property in Texas.

Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“The client was rebuilding a home but also installing new roads and grading and driveways. … The property was very far from the fire department and there wasn’t any available water on the property.”

Poux’s team was able to recommend underground water storage tanks, something that would have been prohibitively expensive after construction.

“But if the ground is open and you’ve got heavy equipment, it’s a relatively minor additional expense.”

Homes that graduate from the Smart Build program may be eligible for preferred pricing due to their added resilience, Poux said.

Recovery from Loss

A major component of disaster resiliency is still recovery from loss, and preparation is key to the prompt service expected by homeowners paying six- or seven-figure premiums.

Before Irma, PURE sent contact information for pre-assigned claim adjusters to insureds in the storm’s direct path.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work,” said Curt Goetsch, head of underwriting for Ironshore’s Private Client Group.

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“If you’ve got custom construction or imported materials in your house, you’re not going to go down the street and just find somebody that can do that kind of work, or has those materials in stock.”

In the wake of disaster, even basic services can be scarce.

“Our claims and risk management departments have to work together in advance of the storm,” said Bitterman, “to have contractors and restoration companies and tarp and board services that are going to respond to our company’s clients, that will commit resources to us.”

And while local agents’ connections can be invaluable, Goetsch sees insurers taking more of that responsibility from the agent, to at least get the claim started.

“When there is a disaster, the agency’s staff may have to deal with personal losses,” Goetsch said. &

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at riskletters@lrp.com.