2017 Power Broker

Private Client

A Fast Mover

Jay Brancaleone
Senior Account Executive
Aon
Boston

When one of Jay Brancaleone’s clients sees something they like, they tend to buy it and pay cash. Whether it’s a car or an investment property, the clients move quickly and they ask a lot of Brancaleone in making sure the correct coverages are in place.

“Off the charts,” is how the client described Brancaleone’s professionalism.

“I’d give him a 10,” said another client of Brancaleone’s level of customer service.

For one particular client, Brancaleone came through in a big way. The client’s wife discovered a crack in her 3-karat, $75,000 engagement ring. The problem was the ring wasn’t covered under the client’s jewelry policy.

Undeterred, Brancaleone researched the client’s high net worth homeowner’s policy. Catching his eye was the phrase “special limits of insurance.” Brancaleone filed a claim under that policy. The claim was initially denied, but Brancaleone wasn’t done.

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He escalated the claim to the vice president of claims at the carrier and got it paid in full as a contents loss. Adding to the client’s delight was the fact that the $5,000 deductible was waived because the size of the loss exceeded $50,000.

Yet another client benefited when Brancaleone went to bat for him and resolved a water leak claim in excess of $150,000.

This client to tends to buy and sell things at a quick pace.

“He can stop and start as I require him to do so,” the client said.

Proven Skills

Steve Kent
Managing Director
Crystal & Company
New York

When the situation demands it, Steve Kent can vault back and forth between private client and commercial work and deliver great service in both disciplines.

Witness what happened when Kent’s high net worth client, who also owns a music festival, experienced a business loss when poor weather punched a hole in the festival revenues.

An initial look from a commercial broker pegged the losses at around $200,000. The client thought her loss was higher than that but wasn’t sure; then Kent jumped in.

Using his Crystal & Company colleagues as resources, Kent engaged a forensic accountant and helped the client recoup more than $1 million.

“I would rate him extremely highly,” said a family office risk manager who has authoritative knowledge of the high net worth insurance carriers and the brokers that work with them. “He has been instrumental in managing our accounts,” the risk manager said.

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“I would say that we are very reliant on him,” said a client. Kent provided excellent service to the client’s wife in managing insurance considerations after the death of an in-law as well as with an unrelated incident, a residential fire.

“He is very attentive and responsive,” said yet another client.

That same client said that Kent displays an in-depth knowledge of the insurance carriers and their products.

Data Driven

Kelly Nash, CISCR, CIC
Managing Director
Marsh
Chicago

Using data to determine the likelihood of loss and to properly price coverage makes perfect sense. So why not use data to benchmark high net worth exposures and programs, reasoned an executive with a large family office.

Executives at Marsh asked themselves the same question and put Kelly Nash on the job. She brought in Marsh Global Analytics to create CAT modeling for the family’s multiple property locations. She also pioneered a family office benchmarking study, which provided her clients with the first-ever comparisons of family office insurance coverages, claims and standards.

Rate her customer service on a scale of one to 10, we asked a senior risk analyst.

“It is probably a 20,” responded the analyst, who in a former life worked on the agency side. “She is always willing to try things even though the request may be untouchable,” the analyst went on. “She is one of the main reasons we are with [Marsh],” she said.

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“I have always been impressed by what she does and am confident that my customers will be taken care of the way I would like to be taken care of,” said an executive with a wealth management firm who never hesitates to put Nash in touch with her clients.

A businessman who has seen his company and his wealth expand over the years trusts Nash to identify coverage gaps and bring him up to speed on the latest products.

He also knows she is there when he needs her.

“She is immediate,” he said.

A Winner, Twice Over

Laura Sherman
Founding Partner
Baldwin, Krystyn, Sherman
Tampa, Fla.

This is our second year naming Power Brokers from the ranks of private client brokers, and it’s Laura Sherman who’s hit the winners’ circle twice.

Sherman, a founding partner of Baldwin Krystyn Sherman Partners, is revered not only by her clients, but also by her peers.

A client who knows just enough about insurance to be dangerous thought he was doing the right thing by canceling the flood insurance on his mother’s Long Island, N.Y., property 30 days in advance of selling it.

You can guess what happened after he canceled the policy, can’t you? Superstorm Sandy and massive flood damage to the house.

Sherman talked the panicked client off of the ledge by letting him know that the federal flood insurance program has a 30-day grace period. Just reinstate the policy and cut your premium check and you’ll be good, she counseled. And so it was.

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The money saved — which nearly came right out of the client’s pocket — amounted to more than $75,000.

“Laura Sherman came to the rescue,” said the adoring client.

“She exceeds my expectations by far, she is far and away the best,” said another client, singing Sherman’s praises.

“All I can say is that if it weren’t for Laura I would be in a world of hurt,” said yet another client. “She does not know the word ‘no,’ ” he said.

Among the Best in the Business

Kimberly Lucarelli, CIC, CAPI
Senior Vice President
Oswald Cos
Cleveland

An executive in the Midwest saw a bad dream come true when a wicked storm blew through his neighborhood and sent a tree crashing down into his house.

Others in his neighborhood, who had also suffered damage, endured push-back from the insurance carriers when they filed their claims. Not him.

He credited Kimberly Lucarelli and her associates at Oswald Cos. with handling his claim smoothly and professionally, and very importantly, with no chop from the underwriter. “Which has been great,” he said. “She made a great result for me.”

Lucarelli also proved her worth to this client by consolidating his insurance program and saving him money in the bargain. As a businessman, this client worked with many insurance brokers over the years on the commercial side and the personal lines side, and rates Lucarelli highly.

“She really knows the carriers and their products inside and out,” the client said.

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A carrier executive who is in a position to know rates Lucarelli among the top five in the business.

Lucarelli’s value is to the carrier as well as the insured. The executive said that Lucarelli gives the carrier candid feedback about how their products are working for clients and how they could be improved.

“It’s very helpful for me and most agents don’t take the time,” the carrier executive said.

It Got Handled

Diane Giles
Senior Vice President
Marsh
New York

An executive with a family office faced a dilemma. Their client owned more than a dozen properties and sought a more tailored approach than having to hold separate policies for each property with renewal dates “all over the place,” as the family office executive put it.

“Makes sense, but no one offers it,” is what a couple of brokers told him, and left it at that. Not Marsh’s Diane Giles.  She said it makes sense, no one offers it, but let’s get it done anyway.

And that is what she did. The result was a blanket policy with cheaper pricing and loads of coverage. Pull a property out, the blanket policy resets. Put one in, it resets again. One premium. One limit.

“Our principal thought it was a spectacular outcome,” the family office executive said.

An insurance executive who works in the personal lines space said Giles is one of the top brokers in this area, and is aided by the fact that she was on the carrier side before she was on the agent side.

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“She is very much about customer service and putting together solutions for her customers,” the carrier executive said.

“She never mismanages your expectations,” added the family office executive.

He said Giles expertly walks that line between giving him space and giving him the information he needs to keep his client informed and trusting.

Finalists:

Monica Griffy, CISR
Vice President
Risk Consulting Partners
Clayton, Mo.

Cecilia Graveran, AAI, ACA, AIS, etc.
Account Executive
Aon
Miami

Sarah Aguirre
Vice President
Marsh
New York

Jennifer Silva
Vice President
USI
Houston

Tim Weyerich, CAPI
Midwest Regional Director
Aon
Clayton,  Mo.

 

 

 

More from Risk & Insurance

More from Risk & Insurance

Cyber Liability

Fresh Worries for Boards of Directors

New cyber security regulations increase exposure for directors and officers at financial institutions.
By: | June 1, 2017 • 6 min read

Boards of directors could face a fresh wave of directors and officers (D&O) claims following the introduction of tough new cybersecurity rules for financial institutions by The New York State Department of Financial Services (DFS).

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Prompted by recent high profile cyber attacks on JPMorgan Chase, Sony, Target, and others, the state regulations are the first of their kind and went into effect on March 1.

The new rules require banks, insurers and other financial institutions to establish an enterprise-wide cybersecurity program and adopt a written policy that must be reviewed by the board and approved by a senior officer annually.

The regulation also requires the more than 3,000 financial services firms operating in the state to appoint a chief information security officer to oversee the program, to report possible breaches within 72 hours, and to ensure that third-party vendors meet the new standards.

Companies will have until September 1 to comply with most of the new requirements, and beginning February 15, 2018, they will have to submit an annual certification of compliance.

The responsibility for cybersecurity will now fall squarely on the board and senior management actively overseeing the entity’s overall program. Some experts fear that the D&O insurance market is far from prepared to absorb this risk.

“The new rules could raise compliance risks for financial institutions and, in turn, premiums and loss potential for D&O insurance underwriters,” warned Fitch Ratings in a statement. “If management and directors of financial institutions that experience future cyber incidents are subsequently found to be noncompliant with the New York regulations, then they will be more exposed to litigation that would be covered under professional liability policies.”

D&O Challenge

Judy Selby, managing director in BDO Consulting’s technology advisory services practice, said that while many directors and officers rely on a CISO to deal with cybersecurity, under the new rules the buck stops with the board.

“The common refrain I hear from directors and officers is ‘we have a great IT guy or CIO,’ and while it’s important to have them in place, as the board, they are ultimately responsible for cybersecurity oversight,” she said.

William Kelly, senior vice president, underwriting, Argo Pro

William Kelly, senior vice president, underwriting at Argo Pro, said that unknown cyber threats, untested policy language and developing case laws would all make it more difficult for the D&O market to respond accurately to any such new claims.

“Insurers will need to account for the increased exposures presented by these new regulations and charge appropriately for such added exposure,” he said.

Going forward, said Larry Hamilton, partner at Mayer Brown, D&O underwriters also need to scrutinize a company’s compliance with the regulations.

“To the extent that this risk was not adequately taken into account in the first place in the underwriting of in-force D&O policies, there could be unanticipated additional exposure for the D&O insurers,” he said.

Michelle Lopilato, Hub International’s director of cyber and technology solutions, added that some carriers may offer more coverage, while others may pull back.

“How the markets react will evolve as we see how involved the department becomes in investigating and fining financial institutions for noncompliance and its result on the balance sheet and dividends,” she said.

Christopher Keegan, senior managing director at Beecher Carlson, said that by setting a benchmark, the new rules would make it easier for claimants to make a case that the company had been negligent.

“If stock prices drop, then this makes it easier for class action lawyers to make their cases in D&O situations,” he said. “As a result, D&O carriers may see an uptick in cases against their insureds and an easier path for plaintiffs to show that the company did not meet its duty of care.”

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One area that regulators and plaintiffs might seize upon is the certification compliance requirement, according to Rob Yellen, executive vice president, D&O and fiduciary liability product leader, FINEX at Willis Towers Watson.

“A mere inaccuracy in a certification could result in criminal enforcement, in which case it would then become a boardroom issue,” he said.

A big grey area, however, said Shiraz Saeed, national practice leader for cyber risk at Starr Companies, is determining if a violation is a cyber or management liability issue in the first place.

“The complication arises when a company only has D&O coverage, but it doesn’t have a cyber policy and then they have to try and push all the claims down the D&O route, irrespective of their nature,” he said.

“Insurers, on their part, will need to account for the increased exposures presented by these new regulations and charge appropriately for such added exposure.” — William Kelly, senior vice president, underwriting, Argo Pro

Jim McCue, managing director at Aon’s financial services group, said many small and mid-size businesses may struggle to comply with the new rules in time.

“It’s going to be a steep learning curve and a lot of work in terms of preparedness and the implementation of a highly detailed cyber security program, risk assessment and response plan, all by September 2017,” he said.

The new regulation also has the potential to impact third parties including accounting, law, IT and even maintenance and repair firms who have access to a company’s information systems and personal data, said Keegan.

“That can include everyone from IT vendors to the people who maintain the building’s air conditioning,” he said.

New Models

Others have followed New York’s lead, with similar regulations being considered across federal, state and non-governmental regulators.

The National Association of Insurance Commissioners’ Cyber-security Taskforce has proposed an insurance data security model law that establishes exclusive standards for data security and investigation, and notification of a breach of data security for insurance providers.

Once enacted, each state would be free to adopt the new law, however, “our main concern is if regulators in different states start to adopt different standards from each other,” said Alex Hageli, director, personal lines policy at the Property Casualty Insurers Association of America.

“It would only serve to make compliance harder, increase the cost of burden on companies, and at the end of the day it doesn’t really help anybody.”

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Richard Morris, partner at law firm Herrick, Feinstein LLP, said companies need to review their current cybersecurity program with their chief technology officer or IT provider.

“Companies should assess whether their current technology budget is adequate and consider what investments will be required in 2017 to keep up with regulatory and market expectations,” he said. “They should also review and assess the adequacy of insurance policies with respect to coverages, deductibles and other limitations.”

Adam Hamm, former NAIC chair and MD of Protiviti’s risk and compliance practice, added: “With New York’s new cyber regulation, this is a sea change from where we were a couple of years ago and it’s soon going to become the new norm for regulating cyber security.” &

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]