2014 Power Broker

Alternative Energy

High-Energy Client Focus

Clayton Corbett, ARM Broker Aon, Houston

Clayton Corbett, ARM
Broker
Aon, Houston

Alternative energy, especially renewable energy, is more than just high-tech vehicles and lab-bench demonstrations. Some forms, such as hydro power and geothermal, have been around for many decades. And while those use well-established building and operating techniques, they still require sophisticated insurance and risk management. That’s where Clayton Corbett comes in.

“We put our renewal out for bid in July, and Clayton showed himself to be an exceptionally effective negotiator in his ability to build bridges between parties,” said the insurance buyer for one geothermal contractor. “Our workers’ comp is a large placement, so I imagine it is sought after by the underwriters, but we have found there is a lot of play in the rates. Clayton was able to secure for us very favorable terms.”

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That was not the end of the story, however. Soon after the renewal was completed, an audit turned up an error in some of the insured’s numbers. It was a simple clerical error, innocent of intent, but could have caused a big problem nonetheless. “We just referred the whole thing to Clayton,” said the buyer. “He got it resolved. Did an excellent job. All very smooth.”

Another client is a geothermal operator, but a new one. After buying an existing facility and beginning an expansion, the client ran into trouble because coverage of the existing plant only covered minor construction and maintenance, not a major capital project. The client credits Corbett for handling the situation on the fly, keeping the construction going, and getting the necessary coverage in place to satisfy all parties.

The Experience to Face the Winds of Change

Peter J. Mavraganis Senior Vice President Marsh, New York

Peter J. Mavraganis
Senior Vice President
Marsh, New York

“Peter has been providing us with invaluable guidance in putting together an appropriate risk management and insurance program for our very specialized business as a developer of offshore wind power projects,” said one CFO. “Because there have not yet been any offshore wind power projects yet built in North America, every aspect of what we do requires innovative thinking and a customized approach.”

Specifically, the client credits Mavraganis, leader of Marsh’s Global Renewable Energy Practice, with supporting “every aspect of risk management and insurance. He has also guided us through the planning process to understand the types, amounts and costs of insurance coverage we will need in the future during the construction and operating phases of our projects. His understanding of the very unique aspects of our industry, which includes both maritime and power-generation elements, has enabled him to provide us with an outstanding level of advice and service.”

Another wind-power client added, “No one is doing things in the U.S. like we are doing. In Europe, maybe, but we are really pushing the envelope. Peter has been able to get us nonbinding, soft quotes throughout our development, backed up with expert testimony to regulatory agencies, to keep the project moving. He has been able to put together evaluations with vendors and engineers that have identified risks for our carriers.”

Mavraganis also gets accolades for a $3.5 billion clean coal project that was an underwriter’s nightmare, with mining, generation, environmental and manufacturing risks.

Finding Savings in Unexpected Places

Laura Hunter Rubin Assistant Vice President Beecher Carlson, Boston

Laura Hunter Rubin
Assistant Vice President
Beecher Carlson, Boston

Many brokers get kudos for swinging into action at a moment’s notice, so it is unusual and thought-provoking that Laura Hunter Rubin’s clients champion her tenacity and energy. “We, as a team, like her persistence and can-do attitude,” said one client, a wind-energy company.

“Laura has saved us an incredible amount of money by being diligent and focusing on our needs as a wind-farm developer. Our needs are very specific and greatly varied. She was able to negotiate our policies in a timely manner, give us more for our money than we had with the old policies and follow up to make sure we are more than adequately covered.”

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The client continued, “Laura accomplished all that in the space of a month, which is not easy when you consider how many wind farms we have. She has successfully negotiated a return on monies paid previously to another broker, furthering our cost savings.”

As reported in the Risk & Insurance® cover story on wind energy last June, nacelle (wind turbine) fires are a persistent peril for wind farms and seem to defy predictive modeling. As early-generation installations approach 30 and 40 years in service, their losses have been rising. Clients say that Hunter Rubin’s innovative approach has been unbundling coverage, which takes persistence and diligence, and reforming packages to address the protection needs of operators and investors that have changed over the life of the facility. Clients explain that the same comprehensive level of coverage that was required when an installation was new may not still be necessary later in the life of the wind farm.

The Client’s Champion

Susan Garrard Assistant Vice President Beecher Carlson, Boston

Susan Garrard
Assistant Vice President
Beecher Carlson, Boston

An essential element of being a Power Broker® is explaining the client to the underwriters and vice versa. Usually, that is done by the client educating the broker, but Garrard’s new clients are surprised and delighted by her research. “Susan has taken countless hours to get to know our company, our operations, our business plan and our story,” said one risk manager. “Not many brokers would take the enormous amount of time with their clients that she has expended on us. She actually gets to know the folks at our company and how we function. She relays our accomplishments in her market approach, which saves us thousands of premium dollars. There is no cookie-cutter approach to Susan’s service, which is rare at a major national brokerage.”

Another risk manager brought Garrard with him when he moved companies, and asked her to handle an international placement. “She has assisted the company with a unique placement in Africa. In that particular country, there were unique restrictive demands.” Garrard made the necessary connections and assisted with negotiations with the local insurance authority, in addition to helping the client understand the relevant law. Explained the client, Garrard “placed both an international and local policy, which was rated well and was cost effective.”

Closer to home, a solid-waste-to-energy operation had “a difficult renewal on our property policy this year due to a significant loss. One of the 50 percent carriers made the decision not to renew our property policy due to the loss. Susan worked very hard with other carriers to write the coverage” — close to a quarter-billion dollars.

Enabling an Industry’s Evolution

Mike McMullen Managing Principal PowerGuard Irvine, Calif.

Mike McMullen
Managing Principal
PowerGuard
Irvine, Calif.

For this year’s Power Broker® competition, Mike McMullen had a tough act to follow — himself. McMullen took the honor last year for his innovative work helping operators backstop shaky warranties from panel makers in China. This year, he has continued applying his expertise on behalf of clients in the fast-growing, highly fragmented solar-power business.

One risk manager followed the onshore trend in the sector by moving to a U.S.-based panel manufacturer. “Mike provided great assistance at my old firm, and Mike has provided great best-practice assistance to my new firm, a startup using new technology. Mike has helped us with the types of best practice in manufacturing, particularly what we need in place to be insurable. That has also helped us with manufacturing excellence and customer assurance.”

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In contrast to McMullen’s previous innovations in writing coverage, he got kudos this time around for helping insureds gain acceptance for new technology, which is a constant challenge in this rapidly evolving field. “Having that product assurance opens the door to a U.S. manufacturer with innovative technology in a space dominated by Chinese manufacturing,” said the risk manager.

Panel warranties are still a major source of concern for operators and for underwriters, one client noted. PowerGuard has launched a new website that allows customers to verify coverage. That is particularly important in the solar segment because some manufacturers have been less than forthright about the true nature of their coverage.

Working to Keep Coverage Within Reach

Marc Toy Senior Account Manager Beecher Carlson, Seattle

Marc Toy
Senior Account Manager
Beecher Carlson, Seattle

Lots of questions swirl around the alternative energy business and solar in particular, including siting, size and storage. While investors and operators can handle those issues on their own, the puzzle they can’t solve is why insurance seems to be so unaffordable. Carriers counter that underwriting is still evolving, and invite insureds and their brokers to make their case. Insureds say that’s one of the areas where Marc Toy excels.

“Marc intervened several times this year on our behalf,” said one client, a solar-power developer. “We had a great renewal this year, and Marc really brought down our premium. He made a strong presentation to the market about the changes in our business and was able to modify our program while staying with the same underwriters. That was important because we have highly unusual assets, even for the solar field. We thought we had to accept high premiums and tight terms and conditions, but Marc proved we did not.”

Other clients relate similar stories, of how well-developed and well-backed projects can be imperiled because Cat coverage can be unaffordable. In one case, a solar project was planned on an island subject to hurricanes.

Toy has encountered other situations where lenders or project investors have demanded high rates of coverage to protect their interests, in excess of what the project would otherwise require. In either circumstance, clients laud Toy’s ability to keep all sides engaged and focused. “Marc keeps everyone posted and informed. We appreciate that, but it’s especially important to the market,” said one client.

BlackBarFinalist:

Dimitrios Parikos,  Vice President,  Marsh

Dimitrios Parikos,
Vice President,
Marsh

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]