2017 Power Broker

Environmental

Track Record: On Time and Under Budget

Laura Decker
Broker
Aon, New York

With less than two weeks before a client needed to conclude a major real estate acquisition, Laura Decker got to work. First she reviewed hundreds of environmental Phase I reports on the property.

Of even greater concern was the fact that many of the property’s environmental exposures fell outside of most insurers’ appetites. Subsurface investigations into historic contaminations at the site were infrequent. Worse still, lenders were starting to question if they should proceed with the deal altogether because of the potential exclusions.

Having gone through the reports and drawn up an action plan, Decker negotiated terms that satisfied all parties, walking the client through each property and its exclusions so that they could relay that information to the lender, enabling the transaction to move forward.

“Even with all of these challenges Laura was able to get us the coverage we needed under budget in a tight time frame,” said the client. “She’s good at getting a quick turnaround and has an extensive knowledge of the market and the products available.”

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Another client said, “We had two major challenging acquisitions over the past 18 months, where due to timing, we couldn’t get the necessary information to Laura on time.

“But she was savvy enough to organize and prioritize the data and get the carriers to allocate additional resources to not only get the renewal completed ahead of time under budget, but to get the best terms and conditions for the majority of these properties.”

Adapting to Rapid Growth

Brian Finnegan
Director
Aon, New York

When his client’s insurer decided not to renew its site pollution program after nine years, Brian Finnegan acted quickly.

The client owned more than 400 properties, including bulk petroleum storage terminals, port locations and gas stations. It also transported petroleum products, mostly in Alaska. This was no small task.

Added to which, the client, Saltchuk Resources, wanted to keep identical limits, terms and retention all at the same premium, while ensuring there was no coverage gap between the old and new programs.

Finnegan needed to learn the existing program as well as the business and its operating companies before going to market. To add to his task, he needed to carry out a comprehensive marketing effort during a time in which the client expanded rapidly.

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To meet this growth, he recommended higher limits and found a solution that combined two programs to maintain the retroactive dates of the old program, while keeping the same retentions.

It doubled limits for the highest exposures and reduced premium by 50 percent.

“We were left in a vulnerable position, but thanks to Brian it was an amazing result,” said Lisa McQueen, senior director of risk management at Saltchuk.

“Because of his environmental background he was able to understand our exposures and sit down and work out a solution that gave us the best of both worlds.”

Expertise in Environmental Risk

Allan Jackson, ARM, CPCU
Associate Director
Aon, Atlanta

With more than 600,000 borrowers from across the farming sector on its books, it’s almost impossible for FCC Services to know the full extent of its environmental exposure.

The government-sponsored enterprise provides credit to farmers, ranchers and other rural enterprises. It faces daily risks associated with its members’ large animal operations, power and waste management systems, and on-site air quality concerns.

So it was difficult to find an insurer willing to provide blanket coverage. Allan Jackson stepped in, quickly grasped the organization’s structure and found the best program.

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“We struggled for years to find a broker that could articulate the unique structure of our organization in the commercial insurance marketplace and the uniqueness of our program to our customers and board,” said Debbie Dettmer, FCC’s managing director of risk management and insurance services. “Thank goodness for Allan. He has used his relationships within the industry and his understanding of our exposure and structure to expand our potential markets from one insurer to four. Needless to say, this has resulted in better terms and conditions as well as more favorable pricing.”

Another client said, “Allan has a distinct knowledge of the environmental insurance marketplace and awareness of the specific appetite and competency of each underwriter he works with. He was able to navigate the marketplace to locate the right trading partner for our risk and tailor our policy to fit our specific needs.”

Leveraging Captives to Handle Complexity

Kimberly Mann
Vice President
Marsh, Philadelphia

Tasked with conducting a feasibility study into a global specialty chemical client’s insurance needs, Kimberly Mann first determined if all its stand-alone environmental policies could be integrated into one program.

She then looked into leveraging its captive to create a global program for all its operations. Having engaged the underwriter to review the engineering reports for each of the locations, she added these exposures to the captive, then renegotiated the excess layers of risk transfer with the carriers, structuring the captive as an excess program so as not to disrupt the elements already in place.

This insulated the carrier from the exposure until its policies expired. She was able to improve the terms for each of the facilities, including the addition of first-party trigger, legacy risk exposure, and refined exclusions for known contamination.

She also managed to increase the total limits for several of the sites, while reducing the premium by 77 percent.

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“Kim was instrumental in the leveraging and integration of our programs,” said her client. “She’s detail-oriented, a strong problem-solver and has been very responsive to our needs.”

Another client said, “Kim is a wealth of knowledge that we rely heavily upon in evaluating new construction projects and their specific needs, creating and implementing corporate-wide programs or creating specific programs that fulfill lender requirements.”

Coming Through in a Time Crunch

James Vetter
Managing Director
Marsh, Salt Lake City

Headache doesn’t even begin to explain the scale of the task facing James Vetter. He needed to help his client liquidate the assets of a refinery that was being sold through bankruptcy — all within a six-week window.

The sale of the multi-thousand-acre site involved multiple stakeholders, including the buyer and seller, and six different lawyers representing various aspects of its environmental issues and coverage. But to enable the sale and subsequent operation of the site, $100 million in pollution legal liability insurance first needed to be placed.

Drawing up a schedule for every task and the responsibilities of each stakeholder, Vetter held bi-weekly calls to coordinate the project. The end result suited all parties, and was placed on time and with superior coverage enhancements and policy wording.

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“This was a 50-year-old refinery that had not operated in over four years,” said his client. “I was amazed that Jim was able to not only get the policy in place, but get it done within the time frame we needed.”

Jeanne Cohn-Connor, a partner at Kirkland & Ellis, said, “Jim’s strength is in knowing the players in the environmental insurance space and in directing the work so it can get done, under time pressure, in a way that keeps everyone focused on the goal.”

In another case, Cohn-Connor said, Vetter put together a program with three insurers that showcased his unique talent for negotiating with diverse stakeholders.

Skilled at Satisfying All Parties

Max West
Senior Vice President
Aon, Chicago

When Commercial Liability Partners became involved in the divestment of a former foundry site in Columbus, Ohio, it faced huge environmental challenges.

The 44-acre Columbus Castings site manufactured steel parts for rail cars for more than 100 years. There was a legacy of pollution exposures that needed to be addressed.

Working with the available data, Max West was able to customize and negotiate coverage for the known contamination, as well as insure against bodily injury risk to neighbors and diminution in the value of their properties as a result of past pollution from the site.

The final policy provided $10 million in limits for 10 years, covering all of the site’s legacy environmental problems.

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“Max was successful in obtaining a policy at a better price and coverage with minimal exclusions,” said Ron Froh, CEO of Commercial Liability Partners. “Without the policy, the acquisition wouldn’t have been successful and that’s all down to Max. His ability to grasp the situation, think outside the box and convey our needs to the underwriter to secure the best possible coverage was top-notch.”

West helped another client secure coverage for environmental contamination on its sites as well. “Max is one of the best in the business. He has successfully solved more than a dozen environmental cases for us,” said Mike Baucus, managing partner at real estate investment firm AIC Ventures. “There isn’t another broker in the country we would use.”

Finalists:

Cristin Bullen
Senior Vice President
Marsh
New York

Louis Cipollo
Account Executive
Aon, Philadelphia

Amber Fixter
Vice President
Willis Towers Watson, New York

John Kim
Managing Director
Marsh, San Francisco

Rick Ringenwald
Executive Vice President
Willis Towers Watson
Radnor, Pa.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

After 20 years in the business, Navy Pier’s Director of Risk Management values her relationships in the industry more than ever.
By: | June 1, 2017 • 4 min read

R&I: What was your first job?

Working at Dominick’s Finer Foods bagging groceries. Shortly after I was hired, I was promoted to [cashier] and then to a management position. It taught me great responsibility and it helped me develop the leadership skills I still carry today.

R&I: How did you come to work in risk management?

While working for Hyatt Regency McCormick Place Hotel, one of my responsibilities was to oversee the administration of claims. This led to a business relationship with the director of risk management of the organization who actually owned the property. Ultimately, a position became available in her department and the rest is history.

R&I: What is the risk management community doing right?

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The risk management community is doing a phenomenal job in professional development and creating great opportunities for risk managers to network. The development of relationships in this industry is vitally important and by providing opportunities for risk managers to come together and speak about their experiences and challenges is what enables many of us to be able to do our jobs even more effectively.

R&I: What could the risk management community be doing a better job of?

Attracting, educating and retaining young talent. There is this preconceived notion that the insurance industry and risk management are boring and there could be nothing further from the truth.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

In my 20 years in the industry, the biggest change in risk management and the insurance industry are the various types of risk we look to insure against. Many risks that exist today were not even on our radar 20 years ago.

Gina Kirchner, director of risk management, Navy Pier Inc.

R&I: What insurance carrier do you have the highest opinion of?

FM Global. They have been our property carrier for a great number of years and in my opinion are the best in the business.

R&I: Are you optimistic about the US economy or pessimistic and why?

I am optimistic that policies will be put in place with the new administration that will be good for the economy and business.

R&I: What emerging commercial risk most concerns you?

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The commercial risks that are of most concern to me are cyber risks, business interruption, and any form of a health epidemic on a global scale. We are dealing with new exposures and new risks that we are truly not ready for.

R&I: Who is your mentor and why?

My mother has played a significant role in shaping my ideals and values. She truly instilled a very strong work ethic in me. However, there are many men and women in business who have mentored me and have had a significant impact on me and my career as well.

R&I: What have you accomplished that you are proudest of?

I am most proud of making the decision a couple of years ago to return to school and obtain my [MBA]. It took a lot of prayer, dedication and determination to accomplish this while still working a full time job, being involved in my church, studying abroad and maintaining a household.

R&I: What is your favorite book or movie?

“Heaven Is For Real” by Todd Burpo and Lynn Vincent. I loved the book and the movie.

R&I: What’s the best restaurant you’ve ever eaten at?

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A French restaurant in Paris, France named Les Noces de Jeannette Restaurant à Paris. It was the most amazing food and brings back such great memories.

R&I: What is the most unusual/interesting place you have ever visited?

Israel. My husband and I just returned a few days ago and spent time in Jerusalem, Nazareth, Jericho and Jordan. It was an absolutely amazing experience. We did everything from riding camels to taking boat rides on the Sea of Galilee to attending concerts sitting on the Temple steps. The trip was absolutely life changing.

R&I: What is the riskiest activity you ever engaged in?

Many, many years ago … I went parasailing in the Caribbean. I had a great experience and didn’t think about the risk at the time because I was young, single and free. Looking back, I don’t know that I would make the same decision today.

R&I: What about this work do you find the most fulfilling or rewarding?

I would have to say the relationships and partnerships I have developed with insurance carriers, brokers and other professionals in the industry. To have wonderful working relationships with such a vast array of talented individuals who are so knowledgeable and to have some of those relationships develop into true friendships is very rewarding.

R&I: What do your friends and family think you do?

My friends and family have a general idea that my position involves claims and insurance. However, I don’t think they fully understand the magnitude of my responsibilities and the direct impact it has on my organization, which experiences more than 9 million visitors a year.




Katie Siegel is an associate editor at Risk & Insurance®. She can be reached at [email protected]