2017 Power Broker


The ‘Go-To’ Broker

Michael Calhoun
Managing Director
Aon, Chicago

Michael Calhoun is my “go-to guy for aerospace-related business,” said the vice president of administration of an aircraft manufacturer. Calhoun’s work, he said, is “extraordinarily creative” and the broker is always available whenever “a peculiar or unusual” issue might arise.

Calhoun, who is also Midwest region manager, took a lead role in negotiating and placing an aviation firm’s comprehensive insurance program after an acquisition by private equity. He also worked closely with an aircraft manufacturer through the development, testing and certification of a new airplane. And he helped a start-up drone manufacturer with a program that satisfied the demands of the company’s key vendor.


“For me, it’s a one-man show,” said Tracy Seabaugh, director of insurance at StandardAero. “I rely on brokers a lot and he has exceeded my expectations. Our last renewal was rather complex and there were some decisions we had to make. There were some tough conversations Mike had to have with underwriters.”

“With Mike,” said Ken Ross, president of One Aviation, “you get much more personalized service than the cookie-cutter approach that many brokers take. He’s very good at creating solutions to save premium dollars and broadening the coverage we originally had.

“As a customer, I am fairly demanding,” Ross said.

“I won’t support somebody who doesn’t really deserve it. Mike really does care about his customers.”

Going Above and Beyond

Bradley Meinhardt
Area President
Arthur J. Gallagher, Las Vegas

“There’s an old saying: People can move mountains with their attitudes. Brad always has a tremendous attitude,” said Joseph Seitz, president of Chandelle Investment Corp., speaking about Bradley Meinhardt, who is also managing director of aviation.

Last year, Chandelle contracted to acquire a brand new aircraft, requiring a “substantial amount of coordination,” he said.

“There were so many parties involved. Brad did a yeoman’s job. Even at the last minute there were calls from attorneys associated with the lenders. He just handled it.”

Mike Quinn, CEO of Asia Pacific Airlines Inc. until his recent retirement, said that Meinhardt “has always been particularly attentive to our business even though I think we are probably on the smaller side of his clients. We’ve had any number of insurance issues over the years that he’s been deeply involved with to our benefit. We like him — a lot.”

When the airline recently added a 757 freighter, it required a substantial increase in coverage, and policy changes to comply with the requirements of various airports and agencies, Quinn said. Meinhardt handled the challenges with persistence and poise.

“He is always going above and beyond,” said John Buch, president, Maverick Aviation Group, “and that’s why we have stuck with him and not looked at anyone else.”

Whether it’s familiarizing underwriters with the company, finding gaps in coverage, simplifying the renewal process, attention to detail or being available for questions, Meinhardt “is always there,” Buch said.

Part of the Team

Nicholas Pooley, ACII (UK)
Senior Vice President
Marsh, New York

Whether it’s helping with contract negotiations or devising innovative solutions for cutting-edge aerospace applications, Nicholas Pooley gets the job done.

Clients applaud his talent for designing creative risk transfer solutions — even for risks that are still largely experimental.

Armed with considerable aerospace expertise, he works with forward-thinking underwriters that are open to the potential of the projects and agree to provide flexible and competitive coverage solutions.

“To me, the perfect broker is someone who takes time to know your company, to understand it and how we do business, has a great relationship with the markets and is responsive to our risks,” said the senior risk manager of a major technology company.


“As we explore new and innovative technology, it’s incredibly important to have a broker who is engaged and understanding of privacy concerns,” she said.

Karen Kraus, global risk manager of Moog Inc., said Pooley “has been a great support.” Pooley aided her team and the company’s legal department on “some very contentious contract negotiations” as the components company dealt with contract demands from its much-larger customers.

“I view Nick as an extension of our small risk management department. It’s as if he is an employee with us. He pays attention to our company news. Sometimes, he brings things to my attention before anyone else does,” Kraus said.

Taking the Lead

Richard Terlecki, CPCU, ARM, ARe
Area Senior Vice President
Arthur J. Gallagher, Orlando, Fla.

Clients depend on Rich Terlecki to protect their interests.

“He never tries to sell insurance,” said Stephen Duarte, director of fiscal services for Kent County, Mich. “He lays out what the problems are and some things you want to consider. If issues come up, he’s there to give you an honest answer.”

In 2016, the Gerald R. Ford Aviation Authority split off from its prior owner, Kent County, Mich. In a win-win situation, Terlecki kept the authority and county on the same insurance program.

That allowed the authority to secure the coverage it needed, which would have been impossible on a stand-alone basis. In the same stroke, the county took advantage of a highly protected property rate, which it stood to lose if the authority was not part of the program.

For Harold Blattie, executive director of Montana Association of Counties, Terlecki ensured a large claim got paid even though the property schedule listed the wrong address.

“Rich was all over that before we even knew that had happened,” said Blattie.

Terlecki also figured out how to cost-effectively procure builder’s risk and owner’s professional indemnity coverage for two successive billion-dollar capital improvement plans for an aviation authority.

“These were very complicated procurements with lots of coverage issues,” said an authority official.

“Rich took the lead and simplified it from our end.”

A Valuable Colleague

Lou Timpanaro
Senior Managing Director
Crystal & Company, New York

“You don’t get a chance to brag about the good people that often,” said Jim Tolzien, CEO of Eastern Air Lines.

But for Lou Timpanaro, he was more than willing.

“Even though Eastern Air Lines is an old brand, it was only resurrected 18 months ago. As a startup, Lou Timpanaro and Crystal & Company got the insurance markets to embrace us almost from the beginning. He has proven to be as valuable to us as anyone I can think of,” Tolzien said.

More recently, Timpanaro broached the idea of doing an early cancellation and a longer policy term to get ahead of a market that was expected to tighten, he said.


“He was successful reducing premium almost 25 percent and renewing for an 18-month period of time,” Tolzien said. “I could not be happier.”

The CFO of a large private jet operator said Timpanaro “has earned his stripes with us,” noting that the company owns and operates 40-plus aircraft, has a fleet portfolio of nearly 1,000 aircraft and more than 5,000 clients.

Managing the insurance certifications and the required standards and qualifications is “very manually intensive,” he said.

“We are ultra-competitive,” the CFO said. “His peers are constantly trying to convince us to shift our business. The fact that he has retained us for 10 years or longer is a testament to his capabilities.”

Creative and Proactive

Ed Wagner
Senior Vice President
Marsh, Chicago

Ed Wagner “takes a super creative and proactive approach,” said the vice president of risk management at a national casino operation that operates multiple airplanes as well as drones.

“He took multiple policies, removed some gaps and condensed them into one aviation policy,” she said. “That improved coverage consistency, contract certainty and actually reduced cost in the process and increased my limits.”

“When I have an urgent request, like we have done twice this year, he’s left in the middle of his dinner to go back to his hotel room, pull up the policy and help us out,” she said.

Sally Buxman, senior manager, insurance, corporate, at AECOM, relies on Wagner’s guidance for her engineering company’s “weird aviation-related projects.”

“We use drones to go to remote places in Northwest Canada Territory and even subway tunnels in New York,” she said. “Ed knows the nuances of which carriers and markets and programs are best suited so we can get the broadest coverage at the best price.”

AECOM used to be challenged when allocating insurance premium costs for refurbishing or maintaining aircraft for federal projects, but Wagner created a spreadsheet that gave the company insight into the costs, Buxman said.

Wagner shines, she said, in getting the company the capacity and coverage AECOM needs. He was also able to put together a master program that put many of the company’s projects under one policy.


John Geisen
Senior Vice President, Aviation Practice Group
Aon Risk Solutions, Minneapolis


More from Risk & Insurance

More from Risk & Insurance

Risk Focus: Cyber

Expanding Cyber BI

Cyber business interruption insurance is a thriving market, but growth carries the threat of a mega-loss. 
By: | March 5, 2018 • 7 min read

Lingering hopes that large-scale cyber attack might be a once-in-a-lifetime event were dashed last year. The four-day WannaCry ransomware strike in May across 150 countries targeted more than 300,000 computers running Microsoft Windows. A month later, NotPetya hit multinationals ranging from Danish shipping firm Maersk to pharmaceutical giant Merck.


Maersk’s chairman, Jim Hagemann Snabe, revealed at this year’s Davos summit that NotPetya shut down most of the group’s network. While it was replacing 45,000 PCs and 4,000 servers, freight transactions had to be completed manually. The combined cost of business interruption and rebuilding the system was up to $300 million.

Merck’s CFO Robert Davis told investors that its NotPetya bill included $135 million in lost sales plus $175 million in additional costs. Fellow victims FedEx and French construction group Saint Gobain reported similar financial hits from lost business and clean-up costs.

The fast-expanding world of cryptocurrencies is also increasingly targeted. Echoes of the 2014 hack that triggered the collapse of Bitcoin exchange Mt. Gox emerged this January when Japanese cryptocurrency exchange Coincheck pledged to repay customers $500 million stolen by hackers in a cyber heist.

The size and scope of last summer’s attacks accelerated discussions on both sides of the Atlantic, between risk managers and brokers seeking more comprehensive cyber business interruption insurance products.

It also recently persuaded Pool Re, the UK’s terrorism reinsurance pool set up 25 years ago after bomb attacks in London’s financial quarter, to announce that from April its cover will extend to include material damage and direct BI resulting from acts of terrorism using a cyber trigger.

“The threat from a cyber attack is evident, and businesses have become increasingly concerned about the extensive repercussions these types of attacks could have on them,” said Pool Re’s chief, Julian Enoizi. “This was a clear gap in our coverage which left businesses potentially exposed.”

Shifting Focus

Development of cyber BI insurance to date reveals something of a transatlantic divide, said Hans Allnutt, head of cyber and data risk at international law firm DAC Beachcroft. The first U.S. mainstream cyber insurance products were a response to California’s data security and breach notification legislation in 2003.

Jimaan Sané, technology underwriter, Beazley

Of more recent vintage, Europe’s first cyber policies’ wordings initially reflected U.S. wordings, with the focus on data breaches. “So underwriters had to innovate and push hard on other areas of cyber cover, particularly BI and cyber crimes such as ransomware demands and distributed denial of service attacks,” said Allnut.

“Europe now has regulation coming up this May in the form of the General Data Protection Regulation across the EU, so the focus has essentially come full circle.”

Cyber insurance policies also provide a degree of cover for BI resulting from one of three main triggers, said Jimaan Sané, technology underwriter for specialist insurer Beazley. “First is the malicious-type trigger, where the system goes down or an outage results directly from a hack.

“Second is any incident involving negligence — the so-called ‘fat finger’ — where human or operational error causes a loss or there has been failure to upgrade or maintain the system. Third is any broader unplanned outage that hits either the company or anyone on which it relies, such as a service provider.”

The importance of cyber BI covering negligent acts in addition to phishing and social engineering attacks was underlined by last May’s IT meltdown suffered by airline BA.

This was triggered by a technician who switched off and then reconnected the power supply to BA’s data center, physically damaging servers and distribution panels.

Compensating delayed passengers cost the company around $80 million, although the bill fell short of the $461 million operational error loss suffered by Knight Capital in 2012, which pushed it close to bankruptcy and decimated its share price.

Mistaken Assumption

Awareness of potentially huge BI losses resulting from cyber attack was heightened by well-publicized hacks suffered by retailers such as Target and Home Depot in late 2013 and 2014, said Matt Kletzli, SVP and head of management liability at Victor O. Schinnerer & Company.


However, the incidents didn’t initially alarm smaller, less high-profile businesses, which assumed they wouldn’t be similarly targeted.

“But perpetrators employing bots and ransomware set out to expose any firms with weaknesses in their system,” he added.

“Suddenly, smaller firms found that even when they weren’t themselves targeted, many of those around them had fallen victim to attacks. Awareness started to lift, as the focus moved from large, headline-grabbing attacks to more everyday incidents.”

Publications such as the Director’s Handbook of Cyber-Risk Oversight, issued by the National Association of Corporate Directors and the Internet Security Alliance fixed the issue firmly on boardroom agendas.

“What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.” — Jimaan Sané, technology underwriter, Beazley

Reformed ex-hackers were recruited to offer board members their insights into the most vulnerable points across the company’s systems — in much the same way as forger-turned-security-expert Frank Abagnale Jr., subject of the Spielberg biopic “Catch Me If You Can.”

There also has been an increasing focus on systemic risk related to cyber attacks. Allnutt cites “Business Blackout,” a July 2015 study by Lloyd’s of London and the Cambridge University’s Centre for Risk Studies.

This detailed analysis of what could result from a major cyber attack on America’s power grid predicted a cost to the U.S. economy of hundreds of billions and claims to the insurance industry totalling upwards of $21.4 billion.

Lloyd’s described the scenario as both “technologically possible” and “improbable.” Three years on, however, it appears less fanciful.

In January, the head of the UK’s National Cyber Security Centre, Ciaran Martin, said the UK had been fortunate in so far averting a ‘category one’ attack. A C1 would shut down the financial services sector on which the country relies heavily and other vital infrastructure. It was a case of “when, not if” such an assault would be launched, he warned.

AI: Friend or Foe?

Despite daunting potential financial losses, pioneers of cyber BI insurance such as Beazley, Zurich, AIG and Chubb now see new competitors in the market. Capacity is growing steadily, said Allnutt.

“Not only is cyber insurance a new product, it also offers a new source of premium revenue so there is considerable appetite for taking it on,” he added. “However, whilst most insurers are comfortable with the liability aspects of cyber risk; not all insurers are covering loss of income.”

Matt Kletzli, SVP and head of management liability, Victor O. Schinnerer & Company

Kletzli added that available products include several well-written, broad cyber coverages that take into account all types of potential cyber attack and don’t attempt to limit cover by applying a narrow definition of BI loss.

“It’s a rapidly-evolving coverage — and needs to be — in order to keep up with changing circumstances,” he said.

The good news, according to a Fitch report, is that the cyber loss ratio has been reduced to 45 percent as more companies buy cover and the market continues to expand, bringing down the size of the average loss.

“The bad news is that at cyber events, talk is regularly turning to ‘what will be the Hurricane Katrina-type event’ for the cyber market?” said Kletzli.

“What’s worse is that with hurricane losses, underwriters know which regions are most at risk, whereas cyber is a global risk and insurers potentially face huge aggregation.”


Nor is the advent of robotics and artificial intelligence (AI) necessarily cause for optimism. As Allnutt noted, while AI can potentially be used to decode malware, by the same token sophisticated criminals can employ it to develop new malware and escalate the ‘computer versus computer’ battle.

“The trend towards greater automation of business means that we can expect more incidents involving loss of income,” said Sané. “What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.

“We’re likely to see a growing number of attacks where the aim is to cause disruption, rather than demand a ransom.

“The paradox of cyber BI is that the more sophisticated your organization and the more it embraces automation, the bigger the potential impact when an outage does occur. Those old-fashioned businesses still reliant on traditional processes generally aren’t affected as much and incur smaller losses.” &

Graham Buck is editor of gtnews.com. He can be reached at riskletters.com.