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2017 Power Broker

Aviation

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.

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“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.

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“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.

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“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.

Finalist:

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

 

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]