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2018 Power Broker

Automotive

Call Her Maestro

Jenny Charles
Senior Broker
Aon, St. Louis

Jenny Charles is a master at getting the right people together in a room and orchestrating business relationships and deals that wouldn’t happen if each party was singing their own tune.

Says one source, “Jenny orchestrated a meeting between one of her clients and a major firm. It was a win-win for everyone involved.

“The client got an introduction to a company that could write maybe nine lines for them. The credit people in the room got to know her client and become more comfortable with them and left with a better understanding of their needs.”

The result: Charles’ client received preferential consideration and ultimately better credit terms, and the company got to write a whole lot of coverage.

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Another client said, “Jenny is extremely knowledgeable, which I feel is built by her experience and dedication. She’s also very customer focused. She makes herself available at a moment’s notice. Even though she is [an] Aon employee, she acts like an ‘arm’ for us and projects our high values.”

“We have tremendous confidence in Jenny, which is key,” said one managing director who sang Charles’ praises.

He added, “Jenny managed the placement of our 2017 umbrella program where she brought a new and creative structure with individual company primary umbrellas and a shared excess, which resulted in tremendous balance sheet protection in addition to year-over-year savings.”

In the Driver’s Seat

Greg Myers
Executive Managing Director
Beecher Carlson, New York

“If you are in the auto insurance industry, you know Greg Myers,” said one client, a director of risk management. “And if you don’t know him, you should.

“Greg has tremendous knowledge, and he works closely with those of us in the risk area of the auto business. He thinks out-of-the-box and has alternative solutions” she added.

One of Myers’ ideas was designed to help manufacturers. “Greg came up with the idea to have a group of manufacturers come together and pool resources across the industry. And he got us

all talking about risk management and sharing information.”

A recent risk solution involved a German original equipment manufacturer (OEM).

The goal was to convert its private label customer insurance program to a self-insured program, which meant leaping over hurdles such as controlling risks, meeting sales goals and developing a product that satisfied the vehicle purchaser and dealers.

Greg got in the driver’s seat and took off! He became part of the client’s risk management team and performed a consulting study. Then he led his client through the program design, program structure, the development of a national sales team and the formation of the captive insurance company and obligor company.

Additionally, Greg led the expansion of cyber and media liability coverage for one OEM and the marketing of cyber liability coverage for yet another OEM.

Look for Myers at RIMS where he’ll once again lead industry discussions.

Manufacturing Cyber Coverage

Carrie Yang, ARM
Assistant Vice President
Aon, Chicago

Bringing property and casualty components into cyber coverage for the manufacturing industry — who knew? Carrie Yang, of course.

“Carrie’s industry knowledge is impressive,” said Lynn Haigler, director, insurance and risk financing, BJC Healthcare.

“We didn’t know a lot about cyber risk and liability, and Carrie has been instrumental in educating us.”

For traditional manufacturing companies, cyber data breach exposure is not where the big risk lives. Instead, property damage, general liability and products liability resulting from cyber incidents are what keeps these risk managers up at night.

But typical cyber policies on the market explicitly exclude property damage and bodily injury, which makes cyber policies less attractive to manufacturers. Yang knew they needed it, and  her team set out to make sure they got it.

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Aon’s team developed a new program — entirely manuscript — to address uncovered exposures. Yang and a specially formed Aon team spent a year developing the form, which incorporates property and casualty components into cyber. Yang played a key role in drafting the policy and broking the placement, making Aon a leader in this coverage.

Craig Coluzza, insurance risk manager, AIG, said, “Carrie and I worked on manuscript policy language for weeks. It was difficult enough to create this language, but then she had to negotiate the acceptance of this broad policy language with several insurance carriers.

“I was pleasantly surprised that Carrie was able to maintain the majority of our original policy language after intense negotiations with carriers.”

Guiding His Team and Clients

Bruce Ludwig
Managing Director
Marsh, Chicago

Following a successful outcome of a defensive and offensive RFP, Bruce Ludwig aligned his team to deconstruct a fragmented global liability program and aggressively market to new global carriers. They delivered better coverage at pricing nearly 75 percent below the incumbent terms.

Utilizing Ludwig’s highly consultative approach to client service, the team worked to align the program with other global coverages, ensuring consistency and streamlined administration.

“Bruce is very responsive,” said Marc Brinkschulte, director, corporate risk and insurance management, Robert Bosch, LLC. “You can always reach out to him and get a quick response. He is very familiar with and very interested in a broad spectrum of issues across the automotive and technology industries.”

Ludwig blends a technical knowledge of complex global insurance programs with an intense focus on aligning the client and Marsh service teams to achieve and deliver stretch objectives. Understanding what good and great results look like leads to a thoughtful discussion of what a stretch outcome could possibly be.

Ludwig has 35 years’ experience in the industry and has been an underwriter, product line broker and client executive for the last 22 years. Most of his clients utilize captives as a foundational core of their risk financing strategy and as such, Ludwig helps align clients’ captives into the program efficiently.

Plan More, Worry Less

Kathy Weaver, CIC, CRM
Managing Director
Aon, Southfield, Mich.

Hope for the best and plan for the worst. It is good advice in any industry, but Kathy Weaver is helping clients apply it in the automotive space.

One such example: Weaver was asked by client Delphi to provide an in-depth review of their Mexico facilities from an asset valuation and business interruption perspective.

They found that a critical component of Delphi manufacturers was made at only one location, which meant that a loss or business interruption at that one location could potentially be detrimental to the company as a whole.

“Kathy’s best strength is her customer service. She listens to what I’m looking for and provides well thought out solutions on how to address the particular issue at hand,” said Brian Eichenlaub, Delphi’s treasurer, America, and director of risk management finance.

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Weaver and her team also guided another client, a global automotive supplier, through a move abroad.

They helped the client address named insured wording in their policies as well as manage their insurance once the leadership team relocated.

More recently, Weaver and her team assisted the same client with a business interruption analysis post fire loss at one of their Mexico locations.

They procured a $1 million advance, and at press time, they were working to finalize the remaining payment with the adjustor.

The complete list of 2018 Power Broker® winners can be found here.

More from Risk & Insurance

More from Risk & Insurance

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.

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In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.

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Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”

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How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.

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One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]