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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 [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.