2017 Power Broker

Public Sector

A Hard Negotiator

Karen Bartak, CPCU, ARM, ASLI
President
Bedford Falls Insurance, Napa, Calif.

Blazing a trail for an independent brokerage, Karen Bartak impresses with her connections in the excess casualty markets.

“I rely on her to get me access to the big players in the public entity space,” said Greg Kildare, executive director of risk at the LA Metro Transportation Authority. “I regularly sit down with senior executives to whom I can sell our risk as best in class. I didn’t get this with a lot of the bigger brokers.

“And she negotiates hard,” he added. Indeed, Bartak recently secured LA Metro a flat renewal with a higher limit despite adding two new train lines.

Bartak also helped Contract Cities of Los Angeles retain its existing retention this year despite adverse claims, bad public sentiment toward police and delayed implementation of body cameras, saving hundreds of thousands in additional reserve expenses.

And she was instrumental in helping Sonoma Marin Area Rail Transit (SMART) insure its new rail line through various stages of development, including negotiating policy extensions during testing phases and keeping premiums as-is for its first full year of operations.

With SMART soon taking its first passengers, this is a crucial time. “Karen has done an awesome job, particularly on the rail liability,” said CFO Erin McGrath.

“Karen, in partnership with our team at Alliant, has done a lot of hand-holding as we’ve gone from virtually no insurance program to a very robust $200 million liability policy, from 20 employees to 120, and from almost no assets to 44 miles of property.”

A Benchmarking Power Broker®

Marcus Henthorn, CLCS
Area Vice President
Arthur J. Gallagher, Itasca, Ill.

In late 2015, Marcus Henthorn designed a software tool that transformed the working lives of not only his clients but dozens of Gallagher insurance pools and brokers.

Henthorn’s data collection and questionnaire software aggregates schedules and statement of values, and digitizes applications on large complex accounts. By late 2016, more than 60 Gallagher pools in the U.S. and Canada, (insuring over 2,200 individual pool members) and numerous large clients were launched on the system. The data’s underwriting benchmarking offers a distinct advantage in the marketplace. Meanwhile, the platform is an invaluable administrative time-saver, allowing easy aggregation of forms.

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“The renewal process is now much quicker and efficient. It’s saved literally months of work,” said Bob McDermott, president of the Prairie State Insurance Cooperative.

“Time is our biggest asset — saving time allows us to focus on the things we need to,” added Brad Goldstein, executive board member of the Collective Liability Insurance Cooperative. “We are a large pool and need to benchmark against others, and now we can access information to learn from other pools.”

Henthorn gets the basics right too.

“He has far exceeded my expectations of a broker, and I deeply appreciate how much I’ve learned because of Marcus. I didn’t understand what a risk pool was, but I do now,” said Tina Hubert, executive director of the Six Mile Regional Library District.

Creating the Parametric Trigger

David Marcus, ARM, ARM-P
Area Chairman
Arthur J. Gallagher, Boca Raton, Fla.

Changes in Federal Emergency Management Agency rules meant David Marcus had to get creative last year for hurricane-exposed clients in Florida.

Facing reduced protection, but unable to afford higher premiums or larger deductibles, both Miami-Dade and Broward county public school systems needed fast, creative solutions.

Marcus worked with Swiss Re to restructure Miami-Dade’s program, combining a multiyear structured insurance program (MYSIP) and a new parametric trigger insurance product that allowed the system to cover its “obtain and maintain” obligations at a reasonable cost. “We have to find unique solutions to find adequate insurance without breaking the taxpayer’s back. It’s a tightrope,” said Michael Fox, Miami-Dade’s executive director of risk and benefits. “It would have been very expensive buying first dollar coverage, so this solution was a win-win. David’s knowledge is top of the line.”

Broward was less keen on parametrics, so Marcus instead created a new MYSIP with Lexington to house part of the system’s primary layer, and through negotiations with carriers, lowered Broward’s hurricane deductible by 25 percent for no change in premium.

Marcus also helped the district implement a six-year master rolling builder’s risk program to cover all property risk on major renovations taking place across the system.

“We needed that badly,” said risk management director Aston Henry. “David saves us money every year. He knows the public sector really well — especially the school systems.”

Increasing the Cover, Cutting the Rate

Duncan Milne, LLB, ACII
Senior Broker
Aon, New York

By the spring of 2016, the Commonwealth of Virginia, with total insured values exceeding $30 billion, outgrew its single domestic carrier and wanted to take its program global.

Duncan Milne  knew price was a key motivator. Leveraging his experience in the London market, he introduced Virginia to world-leading carriers. He improved terms, conditions and catastrophe limits, including critical wind and flood enhancements, and also updated its cyber policy — all while reducing premiums— in the space of just one month.

“Aon’s Duncan Milne did a terrific job putting together a package with some outstanding companies. It was an excellent deal for us — we saved a lot of money and have a solid program in place,” said risk management director Don LeMond.

“We put a lot of pressure on brokers. We see how far we can push them and ask them questions they don’t necessarily want us to ask, but Duncan and his team have raised our expectations,” said LeMond.

Milne is widely regarded as an expert in his field. When a real estate client added 40 percent to its property portfolio with a single acquisition in March 2016, Milne renegotiated the firm’s rate structure and terms to meet lending requirements, while also securing a 15 percent rate reduction off the back of a 20 percent saving the previous year.

“Duncan has a great temperament,” said the firm’s risk manager. “We are in and out of deals all the time. It’s great to work with someone who is so responsive and level-headed.”

Michigan’s Finest

Joseph Perry, CIC, ARM, LIC, CWCP, CWCA, CRM, CPCU
Vice President
Aon, Southfield, Mich.

“Joe Perry is one of the most knowledgeable people in the State of Michigan as far as public entity risks and insurance is concerned,” according to Detroit Public Community School District risk manager Doug Gniewek.

When the district was instructed by the state to purchase excess workers’ compensation cover, having self-administered for 20 years, the placement proved difficult. Perry secured coverage in less than 30 days.

He also helped veteran risk manager Michael Tilley transform the risk profile of Great Lakes Water Authority (GLWA), which recently spun out of Detroit’s bankruptcy. With no underwriting information and no WC license to self-insure, Perry first secured a temporary multiple lines program that included a workers’ comp deductible program. GLWA later obtained a license to self-insure and Perry converted the workers’ comp coverage to an excess workers’ compensation policy as part of a new permanent multiple lines program.

Detroit’s $100 million self-administered scheme was undisciplined and overpaid on coverage for 20 years. But Perry helped construct GLWA’s first ever commercial insurance program across multiple property and casualty lines, securing $750 million of coverage at a 40 percent premium discount.

“It was phenomenal, and couldn’t have been done without someone like Joe who knows the market and the public sector. I rely on Joe almost as if he is an extension of the department.” said Tilley.

Getting Culver City Out of the Pool

Julie Theirl, CSP
Senior Vice President
Aon, San Francisco

Culver City, Calif.’s 25-year membership in an insurance pool was no longer beneficial. Premiums were spiraling and the city’s concerted risk management efforts were being overlooked. Fortunately, the city found an ally in Aon’s Julie Theirl.

Formerly a local government risk manager and a consultant to pools herself, Theirl was uniquely positioned to help.

Despite an excellent loss history, Culver City’s excess GL premiums had risen 17 percent and 35 percent at its last two renewals, and were slated to rise 29 percent in 2016-2017. With the GL placement the top priority, Theirl went to market with the city’s superior loss experience and found massive savings. After much soul searching, the city entrusted Theirl with withdrawing it from the pool entirely.

Under pressure to place the city’s whole program commercially, Theirl aggressively marketed with outstanding results. The city saved close to $1 million in insurance costs — a near 50 percent reduction — with many lines enjoying broader coverage and higher limits.

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“Costs were becoming astronomical. It seemed our city was subsidizing other cities, because we were considered a good risk,” said Culver City’s HR Director Serena Wright.

“Julie exceeded our expectations of a broker, not just in cost saving but also the exceptional service and level of care she has shown us.

“Under the risk pool everything was taken care of. We entered into a new relationship with trepidation, but I am happy to say Julie and Aon still hold our hands.”

Finalists:

John Chino
Area Senior Vice President
Arthur J. Gallagher, Costa Mesa, Calif.

Jean Cofield
Broker/Account Executive
Aon, Washington, DC

George Gionis
Director
Aon, Philadelphia

Michael McHugh
Area Senior Executive Vice President
Arthur J. Gallagher, Itasca, IL

More from Risk & Insurance

More from Risk & Insurance

The Profession

For This Pharmaceutical Risk Director, Managing Risk Means Being Part of the Mission to Save Lives

Meet Eric Dobkin, director, insurance and risk management, for Merck & Co. Inc.
By: | September 28, 2018 • 5 min read

R&I: What was your first job?
My first job out of undergrad was as an actuarial trainee at Chubb.I was a math major in school, and I think the options for a math major coming out are either a teacher or an actuary, right? Anyway, I was really happy when the opportunity at Chubb presented itself. Fantastic company. I learned a lot there.

R&I: How did you come to work in risk management?
After I went back to get my MBA, I decided I wanted to work in corporate finance. When I was interviewing, one of the opportunities was with Merck. I really liked their mission, and things worked out. Given my background, they thought a good starting job would be in Merck’s risk management group. I started there, rotated through other areas within Merck finance but ultimately came back to the Insurance & Risk Management group. I guess I’m just one of those people who enjoy this type of work.

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R&I: What is risk management doing right?
I think the community is doing a good job of promoting education, sharing ideas and advancing knowledge. Opportunities like this help make us all better business partners. We can take these ideas and translate them into actionable solutions to help our companies.

R&I: What could the risk management community be doing a better job of?
I think we have made good advancements in articulating the value proposition of investing in risk management, but much more can be done. Sometimes there is such a focus on delivering immediate value, such as cost savings, that risk management does not get appropriate attention (until something happens). We need to develop better tools that can reinforce that risk management is value-creating and good for operational efficiency, customers and shareholders.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
I’d actually say there hasn’t been as much change as I would have hoped. I think the industry speaks about innovation more often than it does it. To be fair, at Merck we do have key partners that are innovators, but some in the industry are less enthusiastic to consider new approaches. I think there is a real need to find new and relevant solutions for large, complex risks.

R&I: What emerging commercial risk most concerns you?
Cyber risk. While it’s not emerging anymore, it’s evolving, dynamic and deserves the attention it gets. Merck was an early adopter of risk transfer solutions for cyber risk, and we continue to see insurance as an important component of the overall cyber risk management framework. From my perspective, this risk, more than any other, demands continuous forward-thinking to ensure we evolve solutions.

R&I: What’s the biggest challenge you’ve faced in your career?
Sticking with the cyber theme, I’d say navigating through a cyber incident is right up there. In June 2017, Merck experienced a network cyber attack that led to a disruption of its worldwide operations, including manufacturing, research and sales. It was a very challenging environment. And managing the insurance claim that resulted has been extremely complex. But at the same time, I have learned a tremendous amount in terms of how to think about the risk, enterprise resiliency and how to manage through a cyber incident.

R&I: What advice might you give to students or other aspiring risk managers?
Have strong intellectual curiosity. Always be willing to listen and learn. Ask “why?” We deal with a lot of ambiguity in our business, and the more you seek to understand, the better you will be able to apply those learnings toward developing solutions that meet the evolving risk landscape and needs of the business.

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R&I: What role does technology play in your company’s approach to risk management?
We’re continuing to look for ways to apply technology. For example, being able to extract and leverage data that resides in our systems to evaluate risk, drive efficiencies and make things like property-value reporting easier. We’re also looking to utilize data visualization tools to help gain insights into our risks.

R&I: What are your goals for the next five to 10 years of your career?
I think, at this time, I would like to continue to learn and grow in the type of work I do and broaden my scope of responsibilities. There are many opportunities to deliver value. I want to continue to focus on becoming a stronger business partner and help enable growth.

R&I: What is your favorite book or movie?
I’d say right now Star Wars is top on my list. It has been magical re-watching and re-living the series I watched as a kid through the eyes of my children.

R&I: What is the riskiest activity you ever engaged in? When I was about 15, I went to a New York Rangers versus Philadelphia Flyers game at the Philadelphia Spectrum. I wore my Rangers jersey. I would not do that again.

Eric Dobkin, director, insurance & risk management, Merck & Co. Inc

R&I: What is it about this work you find most fulfilling or rewarding?
I am passionate about Merck’s mission of saving and improving lives. “Inventing for Life” is Merck’s tagline. It’s funny, but most people don’t associate “inventing” with medicine. But Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for a long time. It’s amazing to think the products we make can help people fight terrible diseases like cancer. Whatever little bit I can do to help advance that mission is very fulfilling and rewarding.

R&I: What do your friends and family think you do?
Ha! My kids think I make medicine. I guess they think that because I work for Merck. I suppose if even in a small way I can contribute to Merck’s mission of saving and improving lives, I am good with that. &




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