2017 Power Broker

Energy, Renewable

Helping New Business in a Big Way

Susan Garrard, AIS, AINS
Senior Vice President
Beecher Carlson, Boston

Few brokers can say they were present at the creation of a new business.

“I formed a company about a year ago that acquires pre-construction solar projects and funds the construction and operations,” said the company’s managing partner. Since then, he said, “Susan has essentially served as our in-house insurance expert. She helped us purchase a very cost-effective policy. She led the review process by the independent insurance consultant required by our financing partners, and helped ensure that we didn’t purchase any unnecessary coverage. She’s helped us start thinking about corporate insurance that will be needed to protect our firm and other special requests such as the purchase of decommissioning bonds required for our projects.”

When Garrard is not helping to found whole new entities, she is supporting ongoing concerns in their efforts to launch new lines of business. In one case, that was literally new lines, as in a fiber-optic smart grid for one client.

“We had to battle both federal and state bureaucracies that had a lot of different concerns,” said the risk manager. “We were largely self-insured, and we were going to the market for the new venture.

“It was Susan who was not afraid to step in and tell our story. Her ability to think outside-the-box and communicate in a non-cookie-cutter way won the day for us,” the risk manager said.

Sweetening the Deal

Robert Logan
Vice President
Aon, Dallas

“Rob is new with us, so 2016 was his first full renewal cycle,” said one risk and finance manager. “With the backdrop of several years of material premium increases and some ‘know your customer’ issues with the primary insurer, Rob proactively clarified and resolved the issues and fostered a best-price negotiation for the current renewal.”

In changing the tone and the parameters of a longstanding relationship between carrier and insured, “Rob set the expectations for an improved casualty 2017 renewal price point upon achievement of improved claims performance.”

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Coming back for a second helping, Logan also took in hand errors and omissions coverage for the same client. “He oversaw a study of the differences between the standard electric and gas utility offer from our mutual and the commercial markets. In the final hours of renewal, he secured for us an 11.9 percent reduction when the expectation from other peers was flat to 2 percent reduction.”

The vice president at another renewable energy client confirmed that Logan was instrumental in assisting the company in winning new business for itself. The client operated its own power plants, as well as some owned by other entities. The client already had what they felt was a competitive property program, and Logan suggested they could gain new operating contracts by offering property coverage as part of its proposals. The client was able to secure new business with the help of that sweetener to its bids.

Providing Room to Grow

Charles Long
Area Senior Vice President
Arthur J. Gallagher, Boston

While some energy sectors are struggling, a common challenge in renewables is managing rapid expansion. “We have grown significantly from about 300 employees four years ago to more than 850 today,” said the director of finance at one such company.

“As we expanded beyond our core business into solar it was obvious after the first year that our incumbent broker needed help. We sought an expert in the renewables market. When we found Charlie, he first created a very efficient program for us by consolidating some policies and putting others out to market to get the best pricing. Beyond that, he created a program within which it is easy for us to add new projects. That extends from builder’s risk to property, general liability and umbrella once projects are operational.”

The client credited Long with a diligent gap analysis that led to wider gains. “He reviewed our policy and found several holes in coverage for a solar project. In refining our policy, Charlie was able to get us the coverage we needed at no additional cost. He has also been creative in the use of new policies.” Some recent examples are a potential revenue guarantee on the production of solar power and advanced payment coverage for large projects.

Another client credited Long with “flawless execution” on the insurance that underpins the participation of their tax-credit equity investors. “It is a very complex structure. If we suffer a loss, we could have to pay back our tax credits. He had to tailor-make the policy with clear guarantees.”

Tackling Complexities With an Analytical Eye

Mark Nelson, AFSB, CPCU
Senior Vice President
AssuredPartners NL, Cincinnati

Bonding is a challenge for many small firms. There are always strict qualifications even to apply, along with specific limits and restrictions. The irony is that many programs demand more administrative capability than can be supported by the companies that the programs are supposed to be helping.

“Mark assisted our firm to structure our energy-savings contract so that the performance and payment bond was limited to the initial project and not the ongoing preventive maintenance,” said one company president.

“He also assisted in reviewing our contracts to help make sure our bond and insurance risks were properly mitigated and provided relevant comments. Further, he assisted in mitigating our owners’ indemnification based on our working capital and net worth.” Altogether, that was huge material help to a growing company with many irons in the fire.

“We are an $80 to 90 million company and I am banging up against my bonding limit,” the president of another client company said. “When we stretched, he went to the mat for us. He was very analytical in his approach, which makes him very different from other salespeople.”

The vice president of finance at another firm credited Nelson with being proactive in addressing the complexities of bonding.

“Mark organized a meeting this year with all our lawyers and accountants. They have all the information, but then what?  Mark doesn’t wait for us to call him. If he leaves his agency, I’m going with him wherever he goes.”

Enabling Startups to Succeed

Blake Parrish
Vice President
Marsh, Los Angeles

Startups and venture initiatives are common, but that does not mean that they are openly welcomed by the insurance market. Quite the contrary, investors and underwriters alike demand assurances.

“Insurance for a green development is a challenge,” said a principal of one investment firm. “We backed a small development with seven projects and no track record. Blake went to the market for us, and then went back after every few deals to canvass the market and see if we were getting the best coverage at the best price and terms. I don’t think anyone else would do that, retrace his steps like that.”

The principal also noted that in the middle of one project, the client had to switch general contractors, which is usually highly disruptive to the project and to the insurance program. “Blake took it in stride. We had lots of stress points, but insurance was not one of them.”

A different client had a highly technical scientific development project. More complex still, it was an international collaboration. “Blake demonstrated how Marsh would mitigate the wide range of issues that stem from our distinctive technical objectives and from the project’s global makeup of collaborators,” said the lead contract specialist on the project.

“He is insuring the importation of hundreds of technical components as they cross oceans, and then are driven up remote mountain roads. It takes a particularly savvy broker to learn not only how we will safely transport these components, but to also educate insurance carriers on these same details.”

Helping Green Energy Happen

Tim Pierce, ARM
Senior Vice President
Marsh, San Francisco

In the past few years, large utilities have started to embrace renewable energy. In their newfound enthusiasm to go green, traditional power generators and distributors have had to rely on their brokers to guide them through a very different insurance and risk management environment.

Tim Pierce earned his spurs this year in part working with one major utility and a large government entity on a photovoltaic project. The utility brought him in early as part of the feasibility study for the plan, which would be adjacent to and provide power for the government installation.

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As a greenfield plan in green energy, it was something like three-dimensional chess, with engineering plans being reviewed for safety, security, insurability and risk management.

The director of insurance for the utility confirmed that the end result was a solid understanding of the exposure presented by the government site and the planned solar array. That in turn underpinned the assumed risk and design features and also confirmed that the insurability of the project would not present unacceptable financial risk or premium issues over the lifetime of the solar array.

Another important win for Pierce this year involved a client that had a routine renewal become highly complex unexpectedly. “Underwriters don’t like uncertainly,” the client said. Pierce was able to complete the renewal in a player-to-be-named-later fashion: Coverage was bound with wording to allow for adjustments as necessary by the carriers.

Finalist:

Monica Brecka
Managing Director, Southern Region Manager, Umbrella & Excess Casualty Practice
Aon, Lutherville, Md.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]