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2017 Power Broker

Financial Services

No Jargon, Just Action

Edward Conlon
Senior Vice President
Aon, New York

Edward Conlon became the broker of a registered investment adviser and a related broker-dealer after a spinoff and merger at the holding company level.

Despite a difficult loss history on the broker-dealer side, Conlon saved the combined entity 55 percent on its premium by showing carriers how the client improved its controls, including terminating problematic employees.

He was also able to get a carrier to reverse a claim denial dating back to before Conlon had taken on the account. The carrier ultimately contributed a significant sum of the applicable limit toward settlement.

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Ken Rizzuto, vice president, risk management, at iHeartMedia Inc., said that he oversees an “extremely complex” D&O program that services elements of a public and private company with two boards of directors and 23 layers of coverage.

“Each year, Ed has put together a very comprehensive program with all the coverage enhancements that the market has to offer,” Rizzuto said. “Ed’s keen familiarity and good relations with the markets allow him to assemble the best program at the best price for his clients.”

“He’s able to explain complicated issues, bringing it to the level of an average accountant,” said a director of accounting operations at a financial services software firm. “When I’m talking to him, I don’t feel like I’m talking to an insurance agent — no jargon.”

Enthusiastic and Determined

Craig Glendinning
Senior Vice President
Marsh, London

Craig Glendinning developed Marsh’s commodity document fraud (CDF) policy last year in response to client demand following the $1.4 billion Qingdao port fraud in China in 2014, which involved the use of metals for collateral. The new policy addresses the lack of coverage provided by traditional fraud policies, by insuring organizations against financial loss sustained when accepting fraudulent title documents and receipts from clients or third-party vendors.

The CDF policy was developed in close collaboration with a number of Marsh’s U.K. and U.S. commodities industry clients, and is now being purchased by organizations in the banking and trading sector. Clients seeking to expand into emerging markets are particularly interested in the new product.

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“Craig helped us develop a bespoke insurance solution that was aligned precisely to the risk that we were trying to mitigate,” said Emily Jenner, head of insurable operational risk at Standard Chartered Bank. “He went over and above to ensure he understood the issue and worked hard to get the best possible solution from the insurance market. As a result of Craig’s enthusiasm and determination, the bank now benefits [from] an insurance policy that helps reduce what we consider to be one of our top five risks.”

“Craig is a tremendous partner,” said Kevin Nye, senior vice president at Royal Bank of Canada. “He is client-oriented, understands the industry and market, and is always focused on value-added solutions and approaches — I can’t say enough about him.”

Superior Service

Craig Goesel
Senior Vice President
Alliant/Mesirow Insurance, Chicago

One of Craig Goesel’s regional bank clients wanted to obtain full-limit coverage for the type of social engineering scams that involve executive impersonation, but carriers were reluctant to provide a substantial limit for the exposure.

Goesel convinced carriers to meet at the bank’s “wire room” to understand its loss prevention measures, enabling carriers to gain a high level of comfort with the bank’s controls. He also helped the bank strategize ways to improve its risk profile, which resulted in an offer of a full-limit program for crime insurance, including full limits for social engineering/executive impersonation theft.

The day after the renewal presentation, the bank announced it was to be acquired by a large international bank. Goesel leveraged his relationships with the carriers to ensure that the favorable renewal terms previously negotiated were not invalidated.

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Michael Saturley, director of the treasurer’s office at the National Futures Association, said that Goesel was on hand at NFA’s underwriting renewal meeting, the same day that all of its carriers dropped their coverage after the “Wall Street Journal” published an unfavorable article on it.

“Craig was able to find in a timely manner new coverage for us, and each year since that event, he has worked to rebuild our professional liability program to a sound program,” Saturley said.

“He has been able to aggressively market the program and get competitive bids.”

Comfortable With Complexity

Alex Muralles
Senior Vice President, FINEX
Willis Towers Watson, Chicago

After analyzing the management liability program of Robert W. Baird, a wealth management and private equity firm based in Dana Point, Calif., Alex Muralles identified several program deficiencies including outdated exclusions, a tie-in of limits across all lines, and a narrow regulatory claims investigations trigger.

Muralles worked with a new carrier to manuscript a policy that incorporated the existing policy language of Baird’s incumbent carrier, with the addition of proposed enhancements and the broader terms of both carrier policies.

The customized policy removed tie-in limits, increased the aggregate from $10 million to $40 million, broadened notice provisions, and expanded regulatory investigations coverage.

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Muralles saved Baird 20 percent in premiums and negotiated a two-year policy paid in annual installments with a refreshed aggregate — not typically offered for errors and omissions policies.

“We have very complex businesses and he’s been able to help us through the complexities of transferring risk and protecting the firm,” said Angela Johnson, Baird’s insurance risk manager.

“Alex provides unmatched, outstanding service on a regular basis,” said Heather Myerscough, corporate insurance director at Huntington Bank.

“We’re not just an account to him, he really cares about how the bank works and what the bank needs.”

Providing Fantastic Results

Phil Norton
Vice Chairman, Midwest Region
Arthur J. Gallagher, Chicago

One of Phil Norton’s clients, a global insurance company recovering from the fallout of the financial crisis, is striving to be leaner, smarter and more efficient.

Norton and his team were tasked with reducing the client’s premiums at the same time the company fully collected on significant outstanding claims.

The brokers demonstrated to the program’s carriers the operational improvements and reductions in risk achieved by the client. They then convinced the carriers to buy into multiple years of large premium decreases as part of a new level setting of the overall risk metric.

Norton was personally involved in working with one carrier that had not fully reserved a significant claim and was questioning the amount. Norton took the issue all the way up to the carrier’s chief executive, who then fast-tracked the claim payment.

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“One of the values Phil brings is extensive benchmark analysis,” said the client. “He will factor in not only what peers are maintaining in limits and retentions, but he’ll also factor in our claims experience, as well as industry claims experience. Because of his Ph.D. and actuarial experience, he gives us a much more robust analysis than the average broker.”

“Phil went above and beyond for us when we had a disagreement over the value of a claim with an insurance carrier,” said a risk manager of an insurance company in the Midwest. “He was able to bring a creative approach that gave us a fantastic result and made our CEO happy.”

Fighting for His Clients

Eric Seyfried
Senior Vice President
Aon, New York

Last year, Eric Seyfried was presented with the most challenging renewal of his career as a professional liability broker. His client agreed to a nine-figure settlement with the California Public Employee Retirement System over allegedly inflated ratings on residential-mortgage bond deals.

By presenting detailed analyses of profitability, and pulling in other lines of coverage sold to the client by the carriers, Seyfried and his team convinced the markets to accept a longer “payback” horizon and crafted a complex multiyear deal that involved various “out” triggers for both parties. The client was able to obtain full continuity with all its incumbent carriers with no increase in premium.

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“I’ve always had a very good team at Aon who have managed my risks very well,” said the risk manager for the client. “With the addition of Eric to the team, I now have the benefit of a new perspective — someone who has added value with his ability to think outside of the box to develop solutions to unique problems that arise.”

“Eric has incredible attention to detail and is very responsive,” said Maria Diaz, risk manager at Xerox. “He’s also extremely strategic. He’s my right-hand person when it comes to this line of coverage, which is currently a challenging line for us.”

“Eric provides good guidance and he puts our concerns in front of the carrier, and fights for us to get better coverage and lower premiums,” said Le Andra Holly, senior manager, risk management, at Staples.

Finalists:

Vincent Flood
Eastern Region Property Practice Leader
Aon, New York

Nick Kalist
Managing Director
Aon, St. Louis

Eileen Yuen
Managing Director, National Practice Leader, Financial Institutions
Arthur J. Gallagher, Whippany, N.J.

Matt Kupiec
Vice President, FINEX
Willis Towers Watson, New York

Philip Dunn
Vice President
Aon
Philadelphia

 

More from Risk & Insurance

More from Risk & Insurance

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.