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

Alternative Energy

A Shift in the Wind

As warranties run out on wind turbines, underwriters gain insight into their long-term costs.
By: | September 12, 2017 • 6 min read

Wind energy is all grown up. It is no longer an alternative, but in some wholesale markets has set the incremental cost of generation.

As the industry has grown, turbine towers have as well. And as the older ones roll out of their warranty periods, there are more claims.

This is a bit of a pinch in a soft market, but it gives underwriters new insight into performance over time — insight not available while manufacturers were repairing or replacing components.

Charles Long, area SVP, renewable energy, Arthur J. Gallagher

“There is a lot of capacity in the wind market,” said Charles Long, area senior vice president for renewable energy at broker Arthur J. Gallagher.

“The segment is still very soft. What we are not seeing is any major change in forms from the major underwriters. They still have 280-page forms. The specialty underwriters have a 48-page form. The larger carriers need to get away from a standard form with multiple endorsements and move to a form designed for wind, or solar, or storage. It is starting to become apparent to the clients that the firms have not kept up with construction or operations,” at renewable energy facilities, he said.

Third-party liability also remains competitive, Long noted.

“The traditional markets are doing liability very well. There are opportunities for us to market to multiple carriers. There is a lot of generation out there, but the bulk of the writing is by a handful of insurers.”

Broadly the market is “still softish,” said Jatin Sharma, head of business development for specialty underwriter G-Cube.

“There has been an increase in some distressed areas, but there has also been some regional firming. Our focus is very much on the technical underwriting. We are also emphasizing standardization, clean contracts. That extends to business interruption, marine transit, and other covers.”

The Blade Problem

“Gear-box maintenance has been a significant issue for a long time, and now with bigger and bigger blades, leading-edge erosion has become a big topic,” said Sharma. “Others include cracking and lightning and even catastrophic blade loss.”

Long, at Gallagher, noted that operationally, gear boxes have been getting significantly better. “Now it is blades that have become a concern,” he said. “Problems include cracking, fraying, splitting.

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“In response, operators are using more sophisticated inspection techniques, including flying drones. Those reduce the amount of climbing necessary, reducing risk to personnel as well.”

Underwriters certainly like that, and it is a huge cost saver to the owners, however, “we are not yet seeing that credited in the underwriting,” said Long.

He added that insurance is playing an important role in the development of renewable energy beyond the traditional property, casualty, and liability coverages.

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine. Weather risk coverage can be done in multiple ways, or there can be an actual put, up to a fixed portion of capacity, plus or minus 20 percent, like a collar; a straight over/under.”

As useful as those financial instruments are, the first priority is to get power into the grid. And for that, Long anticipates “aggressive forward moves around storage. Spikes into the system are not good. Grid storage is not just a way of providing power when the wind is not blowing; it also acts as a shock absorber for times when the wind blows too hard. There are ebbs and flows in wind and solar so we really need that surge capacity.”

Long noted that there are some companies that are storage only.

“That is really what the utilities are seeking. The storage company becomes, in effect, just another generator. It has its own [power purchase agreement] and its own interconnect.”

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine.”  —Charles Long, area senior vice president for renewable energy, Arthur J. Gallagher

Another trend is co-location, with wind and solar, as well as grid-storage or auxiliary generation, on the same site.

“Investors like it because it boosts internal rates of return on the equity side,” said Sharma. “But while it increases revenue, it also increases exposure. … You may have a $400 million wind farm, plus a $150 million solar array on the same substation.”

In the beginning, wind turbines did not generate much power, explained Rob Battenfield, senior vice president and head of downstream at JLT Specialty USA.

“As turbines developed, they got higher and higher, with bigger blades. They became more economically viable. There are still subsidies, and at present those subsidies drive the investment decisions.”

For example, some non-tax paying utilities are not eligible for the tax credits, so they don’t invest in new wind power. But once smaller companies or private investors have made use of the credits, the big utilities are likely to provide a ready secondary market for the builders to recoup their capital.

That structure also affects insurance. More PPAs mandate grid storage for intermittent generators such as wind and solar. State of the art for such storage is lithium-ion batteries, which have been prone to fires if damaged or if they malfunction.

“Grid storage is getting larger,” said Battenfield. “If you have variable generation you need to balance that. Most underwriters insure generation and storage together. Project leaders may need to have that because of non-recourse debt financing. On the other side, insurers may be syndicating the battery risk, but to the insured it is all together.”

“Grid storage is getting larger. If you have variable generation you need to balance that.” — Rob Battenfield, senior vice president, head of downstream, JLT Specialty USA

There has also been a mechanical and maintenance evolution along the way. “The early-generation short turbines were throwing gears all the time,” said Battenfield.

But now, he said, with fewer manufacturers in play, “the blades, gears, nacelles, and generators are much more mechanically sound and much more standardized. Carriers are more willing to write that risk.”

There is also more operational and maintenance data now as warranties roll off. Battenfield suggested that the door started to open on that data three or four years ago, but it won’t stay open forever.

“When the equipment was under warranty, it would just be repaired or replaced by the manufacturer,” he said.

“Now there’s more equipment out of warranty, there are more claims. However, if the big utilities start to aggregate wind farms, claims are likely to drop again. That is because the utilities have large retentions, often about $5 million. Claims and premiums are likely to go down for wind equipment.”

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Repair costs are also dropping, said Battenfield.

“An out-of-warranty blade set replacement can cost $300,000. But if it is repairable by a third party, it could cost as little as $30,000 to have a specialist in fiberglass do it in a few days.”

As that approach becomes more prevalent, business interruption (BI) coverage comes to the fore. Battenfield stressed that it is important for owners to understand their PPA obligations, as well as BI triggers and waiting periods.

“The BI challenge can be bigger than the property loss,” said Battenfield. “It is important that coverage dovetails into the operator’s contractual obligations.” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]