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2018 Power Broker

Aviation

Helping Clients Soar

Bryan Holmgren
Vice President
Aon, Chicago

It seems like everywhere you look, businesses are finding more ways to use drones — also known as unmanned aircraft systems. It follows that the insurance industry needs to keep pace. But it wasn’t, as brokers and clients alike observed.

Getting coverage meant a time-consuming process, restrictive policy language, low liability limits and high premiums.

Bryan Holmgren of Aon’s Aviation Practice Group recognized this, and led a team as they developed an insurance solution that provides less restrictive policy wording, more competitive costs at higher coverage limits and a seamless policy placement process.

Aon Aviation’s Unmanned Aircraft Insurance Program now provides clients with a competitively priced way to cover the exposure with a best in class policy.

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One client talked about the challenges they faced and how Holmgren assisted them. “Our drone fleet has been growing faster than expected. Bryan helped us negotiate a policy that covers our fleet on a blanket basis rather than reporting each drone. This has resulted in a much easier process to manage.”

She added, “My favorite ‘Bryan story’ is when our drone carrier insisted on language that was crazy restrictive. We had to have a call with the VP of underwriting, who dug in [his heels]. Fortunately, we had Bryan on the call. He brought his expertise from the aviation world and pushed back on some of the limitations.

“Bryan’s incredible knowledge helped get us a result that made much more sense for the consumer.”

Relationships and Communication 

Drew Love, CIC
Vice President, Account Executive
Aon, Dallas

In every business, relationships matter, but never more than when there is a crisis or problem. Aon’s Drew Love knows and lives this, his clients say, and that helps him help them.

For Jesse Castilleja, insurance manager at H-E-B, storms were brewing — literally and figuratively — as Love helped them with the aftermath of Hurricane Harvey and the ever-growing risks of cyber exposure.

H-E-B did a great job preventing cyber exposure, but the carriers just didn’t recognize it. Love facilitated underwriter meetings with carriers he felt were a good fit.

After the meetings, underwriters recognized all that H-E-B brought to the table. This led to a renewal that allowed the client to purchase higher limits and enhance terms and conditions while decreasing price.

“I can use Drew as a sounding board,” Castilleja said. “He’s very knowledgeable and works hard for us and has a strong team that helps us develop risk solutions.”

Another client said that Drew immediately became an asset to them just hours after coming on board.

“Drew is very responsive to all questions and requests. He is proactive in providing solutions. He understands our business. Most important, he realizes the expectations our risk department has from our C-suite and works in tandem with us to exceed their expectations,” the client added.

Yet another client said he told Aon that he always expects the “A team.”

“Love qualifies as an ‘A team’ member,” the client said. He added that as his business grows, their risks are becoming atypical and Love is helping them navigate the new terrain.

The Knowledge They Depend On

John McCaffrey
Vice President
Aon, Dallas

With a significant suite of risk, including remote international locations and 30,000 employees and contractors who fly there, an aviation client of John McCaffrey’s needed coverage that would protect its interests and satisfy contractors as well.

It was a complex placement. The existing program consisted of six different polices covering exposures related to their worldwide operations for airport liability, products/completed operations, and non-owned liability.

“We wanted to take on more risk, but underwriters were resistant,” the client said. McCaffrey, Aon’s Southwest Region Practice Leader, negotiated with underwriters and ultimately created a restructure of their coverage that saved them 15 percent on premiums while reducing the number of policies to two, and creating clarity and coverage flexibility.

“John is top-notch,” the client said. “He is very aware of our market relative to our unique placement, and he gives us a lot of good advice about markets we can use,” she added.

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Chuck Burn, senior manager of insurance for Union Pacific, said that their aviation risks include flying to plants in the middle of nowhere — sometimes on a customer’s or supplier’s plane. McCaffrey “knows what to ask for, what to get, and how to develop a travel procedure that will help protect them.”

Burn also said that their recent increase in drone usage sparked a need for better coverage for that risk, a greater understanding of it and the ability to communicate it enterprise-wide. “John has been very responsive and helped us understand the drones as an emerging risk,” said Burn. “He’s helped us understand FAA regulations too.”

Protection for Land or Sky

Scott Thomason
Senior Vice President
Regions Insurance, Texarkana, Texas

From down on the farm to the often not-so-friendly skies, Scott Thomason puts his experience to work helping clients protect lives and livelihoods.

Darrin Henry, owner of Henry’s Aerial said. “Scott helped our company with risk solutions for all aspects of our company, from aircraft and commercial auto to workers’ compensation and property.

“Just today, I called him with a question about our pilots using his personal aircraft for travel from jobsite to jobsite. He instantly had a plan to  protect our interests and the employee’s,” Henry said.

Henry is impressed with the time Thomason has invested in his business, started by his father. Thomason is the only broker who has visited their home and field operations, even bringing underwriters to educate them about Henry’s specialized missions and to meet his pilots.

Thomason also guided Henry’s company as it expanded operations to wildland fire suppression. “Not only did Scott know the aviation industry, he was able to obtain coverage for our fire aircraft service vehicles. We had struggled with coverage for the hazmat [jet fuel],” Henry said.

Katherine Williams, owner of Cotesworth Farms Partnership, concurs. “We have a cattle farm and unusual insurance needs. Scott has covered them all.

“We had a major loss just after we switched to him. He and his staff handled things immediately and to our satisfaction. I was impressed with Scott’s knowledge and thoroughness,” she added.

Ahead of the Curve

Lou Timpanaro
Senior Managing Director
Crystal & Company, New York

Lou Timpanaro knows the insurance industry so well that he can spot trends far over the horizon — while there’s still time to help prepare clients.

Christine Zalar, president/founding partner of Emprize Group/Life Flight Eagle, can attest to that. “Lou has endless knowledge and an absolutely unique ability to get ahead of industry trends. It’s a very powerful capability.”

Timpanaro recently resolved a situation for Emprize. It required that one of their aircrafts be stored at a fixed-base operator (FBO).

“The FBO was putting everything on us,” Zalar said. “They wanted us to assume all the risk.” They were at an impasse until Timpanaro stepped in. He negotiated acceptable terms that protected his client. “Lou knew what we could do to protect our exposure,” Zalar said. “He’s king of the road.”

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Another client, an aircraft charter company, wanted to use their insurance program as a marketing tool to attract high net worth individuals — while reducing premiums and increasing protection. Not easy, but for Timpanaro, it was achievable. He reduced costs while increasing liability limits by 33 percent.

But there is one thing even Timpanaro couldn’t predict. An aircraft cleaning company accidentally set off the foam suppression system in an aircraft hangar causing a 30-foot wall of fire retardant.

Cool under pressure, Timpanaro initiated the emergency response protocol: a claims adjustor assessed damage, coverage assurances were communicated and clean up was immediate. The facility, the aircraft and operations were back to normal in four days and payments were made shortly thereafter to close out the claim.

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

More from Risk & Insurance

More from Risk & Insurance

High Net Worth

To the High Net Worth Homeowner: Build a Disaster Resiliency Plan You Can Be Proud Of

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 [email protected]