2018 Power Broker


A Joint Venture Pioneer

Danette Beck, CPCU, ARM, CRIS
Managing Director
Marsh, Los Angeles

In a pioneering effort, Marsh’s Danette Beck borrowed a practice from engineering and brought it to the construction sector.

“We work often through joint ventures, and we don’t construct low-risk projects,” said the risk manager at one client. “Our incumbent carriers were not giving us competitive terms, and that was making us uncompetitive in bidding for work.”

Beck went to several markets and assembled a small group of underwriters willing to be a ready pool to evaluate and write specific joint venture projects individually or jointly.

“I knew this technique from engineering, but it has not been done in construction for general liability,” said another risk manager. “We had meetings with the carriers and site visits. Everyone at the table knew everyone else, and we were able to connect with them at the correct level for them to understand our business.”


For another client, Beck’s achievements make her stand out from the crowd.

“Our company had been underserved by a large brokerage house,” said the general counsel for the client. “We decided to go through an elaborate request-for-quote process whereby we interviewed numerous national and local brokerage firms.

“Since we selected Danette, she has exceeded our expectations. We have secured better insurance programs under her advice with significant costs savings. It is one thing to be good at selling yourself, it’s entirely different to be good at performance. She is innovative, responsive and anticipates our every need.”

The Power of Hearing

Justin Johnson
Account Executive
Aon, Pittsburgh, Pa.

Four simple words convey a simple act. Amid all the ringing endorsements and table-pounding testimonials, it was a powerful statement about Aon’s Justin Johnson: “He listened to me.”

The insurance manager elaborated, “Justin took over as account executive of our property/casualty agreement a little over half way through a very difficult first year and turned the account around due to his superior service.

“Since he took over the account, the rest of the year has been easy. Justin enthusiastically stepped in to a very difficult situation, which had not gone well and turned the relationship around almost immediately. Justin listened to me. He asked me questions. He worked with me.

“I am the only one in the insurance department at this organization and to have someone like Justin to reach out to for knowledge or even something as simple as a double check on a matter is invaluable to me.”

At another client, the director of risk management called Johnson a rising star: “Justin was introduced to our account [this year] through the departure of a colleague. He managed several billion-dollar construction clients while providing top-notch service.”

For another client, the key was creativity. In a placement for a large infrastructure project, each stage of completion required step changes in coverage.

In an unusual twist, the client wanted very specific portions of the project covered, with detailed sub-limits and named perils. Johnson was able to bind the coverage, with secure pricing through the project stages.

Batting One Thousand

Matias Ormaza
Senior Vice President
EPIC/Greyling Insurance Brokerage, Alpharetta, Ga.

Power Broker ® is an annual accolade, not a lifetime-achievement award. Often the actions that resulted in the recognition happen in the same year.

For Matias Ormaza, 2017 saw several major victories for a client, including a privatization, a refinancing and a first renewal under a new captive. In crediting Ormaza, the client emphasized the years of work that culminated in those triumphs.

“Matias is three for three with us,” said the chief risk officer.

“The first of those was his support in our conversion from a public company to private. We completed that in June 2017. Second was a credit facility refinancing that we conducted at the beginning of the year, for which he was of great assistance. Third was due diligence and tail coverage strategy for a large acquisition.

“He knows how to use the power of his firm to bring our strategy to the finish line. I can count on him to work with our project managers on specific insurance coverage or with an outside law firm on a big conference call debating the merits of an insurance issue in an acquisition.

“That is powerful and valuable, and in my view, the definition of a Power Broker.”


The manager at another client’s risk management and insurance department stated, “Matias and his team were able to make recommendations that saved us over $1 million in premium this year. He is tireless in his pursuit of finding efficiencies and savings for our firm.

“Insurance is one of our top overhead costs. We are a bunch of engineers and it is vital that we understand what is driving our premium.”

A Seamless Transition

Tariq Taherbhai
Chief Operating Officer
Global Construction, Aon, Chicago

Ending a longterm relationship and moving to a new broker and new carriers can be nerve-wracking for clients. But Aon’s Tariq Taherbhai puts clients’ minds at ease.

“Under [Tariq’s] leadership, Aon seamlessly repositioned our entire insurance and risk management platform to a host of global carriers and contacts,” said a client executive.

“Our business is challenging, laden with various risks spread across a spectrum of jurisdictions and engaging a variety of levels of risk management sophistication throughout the company.

“He mobilized a team of subject-matter experts on short notice to deliver on an aggressive renewal strategy that was tailored to our needs locally and abroad.”

Taherbhai, of Aon’s global construction and infrastructure group, won praise for another complicated negotiation on behalf of a different client.

“Tariq has great ability in building strong teams, and he always leads by example,” said the risk manager. “That was displayed during our most recent bid in 2017, where Tariq managed several conflicting interests.”

The manager added, “Tariq went above and beyond on another recent pursuit to ensure proper coverage in our final bid package.

“We made several last-minute changes to our bid, which caused changes to our insurance program that the bid team had not anticipated. Tariq spotted the discrepancy and worked around the clock for the final 48 hours, which resulted in a competitive and fully compliant program.”

Pride in the Details

Kristen Long
Managing Director
Gallagher, Chicago

A Power Broker® like Gallagher’s Kristen Long is often praised for their exacting attention to detail.

“Kristen sorted through an amazing amount of accounting that the previous broker got wrong,” said a financial executive for one client. “She put it straight. She said she would, and she did.

“She did not just identify the problems, but fixed them. I am sure she absorbed hours and hours of time, and she has my loyalty from now on.”

For a beleaguered client of Long, its insurance was working backward, opening the company up to millions of dollars of risk instead of transferring it away.


The client relies heavily on subcontractors, but Long found substantial gaps in coverage, ranging from technical definitions of coverage to exclusions, pollution coverage and omissions, such as the subcontractor’s duty to defend the general contractor.

Long placed the liability coverage into a single wrap and had the client designated as named insured rather than additional insured. Deductible was reduced by an order of magnitude, and overall insurance cost by more than 5 percent.

A third client is a large municipality. “As one can imagine, our insurance program is extremely complex,” said the risk manager.

“Kristen handles several areas for us and also consults on others. She was instrumental this year in handling some major issues, especially in guidance on how to get more and better coverage. She is the manager for one of our owner-controlled insurance programs. That has been extremely successful.”

Impressive Skills

Andrew Canning
Senior Vice President
Marsh, New York

A client of Marsh’s Andrew Canning needed guidance establishing and managing its owner-controlled insurance programs (OCIPs).

“Andrew was instrumental in helping us with two key initiatives this year,” said one risk manager. One was overseeing the placement of an OCIP covering a large downtown project in the center of a major city that included a public-private partnership.

“The second OCIP involved the renovation and conversion from apartments to condominiums of another building in our real estate portfolio. We couldn’t have done either without him.”

Another client lauded Canning for resolving a complication between his OCIP and the program of the company managing the project. “I was immensely impressed this year by the skill and dedication of Andrew in helping our organization,” said the client.

“We ran into significant hurdles with one construction manager’s insurance program and its relationship to the OCIP. Andrew was instrumental in identifying gaps in information and contributing to the resolution of the problem that resulted in substantial savings.

“Andrew was willing to explain repeatedly the circumstances to many individuals, to come to multiple out-of-state meetings on short notice, and make himself available to all stakeholders to achieve the best result for our institution. Andrew knows his stuff.

“What’s more important, however, was his attitude and demeanor throughout the process. He has been a great asset to us.”

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


Louis Cipollo
Account Executive
Aon, Philadelphia

Brian Mack
Senior Vice President, Construction Practice Manager
Lockton, Washington, D.C.

Ryan McClafferty
Risk Consultant
INSURICA, Little Rock, Ark.

John Wagner
Area President, National Construction Director
Gallagher, Hunt Valley, Md.

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.