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2018 Power Broker

Nonprofit

Above and Beyond

Brandon Cole, CIC, CRM, CPCU, RPLU, ARM, CISR, CSRM, AINS
Area Vice President
Gallagher, Irvine, Calif.

Last year, KIPP NYC was asked to join a larger group insurance portfolio that offered significant savings — up to 30 percent — but they would have to change their coverage.

Katina Grays, managing director, data & operations, had a good relationship with her broker Brandon Cole and was transparent about the possibility of moving to a more cost-effective group insurance.

Cole knew he needed to get KIPP NYC an even more competitive rate than ever before.

“He truly wanted us on his portfolio and he worked to preserve our business,” said Grays.

“We were able to keep the levels of coverage we had for a lot less money.”

Cole uses that above-and-beyond approach with everything he does. Another client, Homeboy Industries, gives recently freed incarcerated men and women the opportunity to work and move on from the trauma of gang life.

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Their insurance needs change frequently, as they are constantly adding new enterprises to their portfolio.

“We do a number of fundraising events at some unusual venues as well,” said Jack Faherty, CFO.

“Brandon is extremely helpful. I see him as a critical business advisor.”

This year, Homeboy acquired a for-profit entity.

“It was a unique situation for us, because we are a nonprofit with nonprofit insurance. We had to ask, ‘How do we fold a for-profit into our nonprofit?’”

Brandon was there, “a true business confidante,” according to Faherty.

The Risk Manager’s Risk Manager

Joan Dove, CPCU
Area Executive Vice President
Gallagher, San Francisco

Joan Dove strives to make risk awareness a part of every client’s focus.

“Joan stepped in and educated me and my team,” said Henry Roth, CFO & VP of administration, Notre Dame De Namur University.

Recently, the university launched a multi-million-dollar construction project. Roth, while well-versed in risk management and insurance, was not fully up to speed on the nuances of construction and the insurance that comes with it.

Dove’s ability to come in and teach him was, to him, the ultimate sign of industry knowledge.

“It’s the trademark of a good teacher,” he said. And her teaching doesn’t stop there. She’s done presentations for various departments at the university, including one on transportation safety with the sports coaches.

“We’re a small account, but she makes us feel important.”

Kelley Maltais, VP of human resources, YMCA of the East Bay, said Dove also helped raise risk awareness, particularly when it came to worker safety.

“We have a safety issue,” said Maltais. “We have workers’ comp claims that come in weekly, and Joan knows we have to turn that around.”

That’s why Dove has been implementing annual safety and risk management training sessions.

“I really think she’s the broker of choice for the Y,” said Maltais.

Believing in the Client’s Mission

Adam Sammons, CIC
Account Executive
Marsh & McLennan Agency, Dallas

Johnny Gonzalez, operations director, The Village Church, oversaw the annual church trunk-or-treat event, which included bounce houses, rock walls and other like activities for the enjoyment of parishioners.

“We are a church of 12,000 people across five campuses. At any given event, we can have 500 or more people attending.”

Because the rock wall was new, Gonzalez turned to Adam Sammons to review their policy. Sammons quickly realized the insurance didn’t cover events of 500 people or more.

“Adam was able to get the terms and conditions changed last minute, and we were able to move forward with the event,” said Gonzalez.

Sarah Proctor, CFO for ACH Child & Family Services, said Sammons has “always attended to our insurance and risk management needs, but that has become only a small part of the total service and partnership he has provided for us.”

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ACH provides services for children who have been abused or neglected. The agency is working with the state of Texas to redefine its foster care system.

Sammons, said Proctor, is actively engaged in their overall mission and even volunteers for the agency outside of work.

“Adam’s support is valuable, because he does not just bring us suggestions for us to pursue. Adam shares his ideas with us, does the research, talks to other people who can offer expertise and pursues solutions on behalf of foster children and foster families.”

Top Negotiator

Lori Wheeler
Managing Director
Wortham, Houston

When the Rio Texas Conference, a United Methodist Church serving more than 400 Texan churches, aimed to switch brokers, they didn’t have to look further than Wortham Insurance’s Lori Wheeler.

Her presentation with the organization sealed the deal, and immediately Wheeler got to work.

“Our insurers didn’t know what they were actually insuring until Lori came along,” said Tina Whitaker, property and liability administrator, Rio Texas Conference.

The organization didn’t have a clear understanding of how its missions were covered under its existing policies. The missions, Whitaker explained, are group worship sessions throughout the local community where congregations gather to learn from and collaborate with each other.

“Lori made sure those groups were included. She found they were a subsidiary we could get coverage for,” said Whitaker.

Another client of Wheeler’s said she was able to get them D&O insurance at a much lower renewal rate.

The client got hit with a lawsuit one month prior to renewal, which would have upped their D&O tower premium more than 40 percent. Wheeler negotiated the overall program premium increase to less than 2 percent.

“Lori is an asset to our business,” said the client.

Leaving a Lasting Impression

Scott Konrad
Senior Vice President
Hub International, New York

HUB’s Not-for-Profit Practice Leader Scott Konrad strives to create a lasting impression of improvement. He takes great professional satisfaction in leaving every client in better condition than before he met them.

In one such case, one of Konrad’s clients decided to switch brokers this year, and he did everything in his power to make it a smooth transition.

The client said that the quality of responses they received from Konrad on every question they had showed just how knowledgeable and ready Konrad was willing to work for them.

They described his approach to brokering as, ‘I’m always ready to do what I can to make things easier and better for the client.’

With this approach, Konrad has created a bridge of trust and open communication.

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“He’s a people-connector. He’ll get you in contact with the right people and come up with the best economical solutions,” said Renee Richardson, CFAO, City Harvest.

City Harvest has a fleet of 22 trucks that transport 59 million pounds of excess food each year, delivering it to 500 soup kitchens, food pantries and other community food programs.

Road safety is their top priority, and the organization worked with Konrad to ensure their fleet and workers were protected. Konrad, said Richardson, knew the perfect connections to get them a claims adjustor who would help City Harvest achieve its goal.

A Key Player

Tim DePriest, ARM
Managing Director
Gallagher, Glenside, Calif.

Years ago, Gallagher’s Tim DePriest asked John Maceri, executive director for The People Concern: Do you consult your broker before a renovation or program expansion?

“We talk with funders and attorneys, but I hadn’t thought of contacting our insurance broker for their input,” said Maceri.

DePriest wasn’t Maceri’s broker yet, but he left a lasting impression — now he offers sage advice to The People Concern.

“He knows the market and is great in analyzing it, providing good counsel on important things we might not have otherwise considered.”

Naomi Kageyama, director of risk management and special projects with Special Service for Groups, said, “There are few people in our industry that I can unequivocally say I trust, and Tim is one of them.

“In addition to helping us with our annual renewal, he personally comes out yearly to meet with our managers and educate them on our coverage.”

Another client, Kings View, needed to buy cyber liability insurance. As a behavioral and mental health facility, keeping digital records protected from cyber threat is an imperative.

DePriest negotiated competitive rates, quoting the facility at half of what Kings View was quoted by another broker.

On top of that, DePriest knows the mental health industry, which enables him to provide the best coverage for his client’s needs: “If I bring up a nuanced question related to the services we provide, Tim knows what I’m talking about,” said Jim Rodriguez, CFO, Kings View.

More from Risk & Insurance

More from Risk & Insurance

Risk Report: Manufacturing

More Robots Enter Into Manufacturing Industry

With more jobs utilizing technology advancements, manufacturing turns to cobots to help ease talent gaps.
By: | May 1, 2018 • 6 min read

The U.S. manufacturing industry is at a crossroads.

Faced with a shortfall of as many as two million workers between now and 2025, the sector needs to either reinvent itself by making it a more attractive career choice for college and high school graduates or face extinction. It also needs to shed its image as a dull, unfashionable place to work, where employees are stuck in dead-end repetitive jobs.

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Added to that are the multiple risks caused by the increasing use of automation, sensors and collaborative robots (cobots) in the manufacturing process, including product defects and worker injuries. That’s not to mention the increased exposure to cyber attacks as manufacturers and their facilities become more globally interconnected through the use of smart technology.

If the industry wishes to continue to move forward at its current rapid pace, then manufacturers need to work with schools, governments and the community to provide educational outreach and apprenticeship programs. They must change the perception of the industry and attract new talent. They also need to understand and to mitigate the risks presented by the increased use of technology in the manufacturing process.

“Loss of knowledge due to movement of experienced workers, negative perception of the manufacturing industry and shortages of STEM (science, technology, engineering and math) and skilled production workers are driving the talent gap,” said Ben Dollar, principal, Deloitte Consulting.

“The risks associated with this are broad and span the entire value chain — [including]  limitations to innovation, product development, meeting production goals, developing suppliers, meeting customer demand and quality.”

The Talent Gap

Manufacturing companies are rapidly expanding. With too few skilled workers coming in to fill newly created positions, the talent gap is widening. That has been exacerbated by the gradual drain of knowledge and expertise as baby boomers retire and a decline in technical education programs in public high schools.

Ben Dollar, principal, Deloitte Consulting

“Most of the millennials want to work for an Amazon, Google or Yahoo, because they seem like fun places to work and there’s a real sense of community involvement,” said Dan Holden, manager of corporate risk and insurance, Daimler Trucks North America. “In contrast, the manufacturing industry represents the ‘old school’ where your father and grandfather used to work.

“But nothing could be further from the truth: We offer almost limitless opportunities in engineering and IT, working in fields such as electric cars and autonomous driving.”

To dispel this myth, Holden said Daimler’s Educational Outreach Program assists qualified organizations that support public high school educational programs in STEM, CTE (career technical education) and skilled trades’ career development.

It also runs weeklong technology schools in its manufacturing facilities to encourage students to consider manufacturing as a vocation, he said.

“It’s all essentially a way of introducing ourselves to the younger generation and to present them with an alternative and rewarding career choice,” he said. “It also gives us the opportunity to get across the message that just because we make heavy duty equipment doesn’t mean we can’t be a fun and educational place to work.”

Rise of the Cobot

Automation undoubtedly helps manufacturers increase output and improve efficiency by streamlining production lines. But it’s fraught with its own set of risks, including technical failure, a compromised manufacturing process or worse — shutting down entire assembly lines.

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More technologically advanced machines also require more skilled workers to operate and maintain them. Their absence can in turn hinder the development of new manufacturing products and processes.

Christina Villena, vice president of risk solutions, The Hanover Insurance Group, said the main risk of using cobots is bodily injury to their human coworkers. These cobots are robots that share a physical workspace and interact with humans. To overcome the problem of potential injury, Villena said, cobots are placed in safety cages or use force-limited technology to prevent hazardous contact.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them.” — David Carlson, U.S. manufacturing and automobile practice leader, Marsh

“Technology must be in place to prevent cobots from exerting excessive force against a human or exposing them to hazardous tools or chemicals,” she said. “Traditional robots operate within a safety cage to prevent dangerous contact. Failure or absence of these guards has led to injuries and even fatalities.”

The increasing use of interconnected devices and the Cloud to control and collect data from industrial control systems can also leave manufacturers exposed to hacking, said David Carlson, Marsh’s U.S. manufacturing and automobile practice leader. Given the relatively new nature of cyber as a risk, however, he said coverage is still a gray area that must be assessed further.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them,” he said. “Therefore, companies need to think beyond the traditional risks, such as workers’ compensation and product liability.”

Another threat, said Bill Spiers, vice president, risk control consulting practice leader, Lockton Companies, is any malfunction of the software used to operate cobots. Then there is the machine not being able to cope with the increased workload when production is ramped up, he said.

“If your software goes wrong, it can stop the machine working or indeed the whole manufacturing process,” he said. “[Or] you might have a worker who is paid by how much they can produce in an hour who decides to turn up the dial, causing the machine to go into overdrive and malfunction.”

Potential Solutions

Spiers said risk managers need to produce a heatmap of their potential exposures in the workplace attached to the use of cobots in the manufacturing process, including safety and business interruption. This can also extend to cyber liability, he said.

“You need to understand the risk, if it’s controllable and, indeed, if it’s insurable,” he said. “By carrying out a full risk assessment, you can determine all of the relevant issues and prioritize them accordingly.”

By using collective learning to understand these issues, Joseph Mayo, president, JW Mayo Consulting, said companies can improve their safety and manufacturing processes.

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it.” — Joseph Mayo, president, JW Mayo Consulting

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it,” Mayo said. “They can also use detective controls to anticipate these issues and react accordingly by ensuring they have the appropriate controls and coverage in place to deal with them.”

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Manufacturing risks today extend beyond traditional coverage, like workers’ compensation, property, equipment breakdown, automobile, general liability and business interruption, to new risks, such as cyber liability.

It’s key to use a specialized broker and carrier with extensive knowledge and experience of the industry’s unique risks.

Stacie Graham, senior vice president and general manager, Liberty Mutual’s national insurance central division, said there are five key steps companies need to take to protect themselves and their employees against these risks. They include teaching them how to use the equipment properly, maintaining the same high quality of product and having a back-up location, as well as having the right contractual insurance policy language in place and plugging any potential coverage gaps.

“Risk managers need to work closely with their broker and carrier to make sure that they have the right contractual controls in place,” she said. “Secondly, they need to carry out on-site visits to make sure that they have the right safety practices and to identify the potential claims that they need to mitigate against.” &

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]