2014 Power Broker

Technology

Cutting Through Uncertainty

Stephen Becker Executive Vice President Willis, New York

Stephen Becker
Executive Vice President
Willis, New York

Just after Stephen Becker and his team were charged with securing run-off coverage for Dell Inc.’s acquisition of Quest Software within a five-day window, Michael Dell announced plans to take Dell private in one of the largest leveraged buyouts in history.

The transaction was complicated by competing bids, numerous lawsuits and some shareholder dissent. Moreover, Becker, leader of the Technology, Media and Telecommunications Practice at Willis, needed to renew Dell’s current insurance program amid uncertainty about the company’s ultimate owner.

To assure the markets of the Dell strategy, Becker and his team conducted several underwriting meetings between company leadership and the carriers to generate a better understanding of the transaction and Dell’s objective post-close.

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Becker provided benchmarking data conveying various program structure scenarios taking into account several leadership structures, assuring Dell of adequate coverage with cost certainty, regardless of ownership.

Upon completing the renewal, Becker and his team crafted the post-LBO structure, as it became clear that Michael Dell and private equity firm Silver Lake Partners were able to secure the necessary votes to become owners. Becker and his team were able to negotiate a superior insurance program, both in coverage and pricing.

“Steve Becker is a great guy,” said Julie Young, risk manager at Dell Inc. “We’ve got a lot of moving parts to deal with in terms of insurance coverage and I’m very pleased with him.”

Crafting Expansive Solutions

Tim Candy Managing Principal Integro, San Francisco

Tim Candy
Managing Principal
Integro, San Francisco

A semiconductor manufacturer had historically maintained E&O insurance coverage largely for contractual purposes, but it actually provided very limited benefit given the program’s restrictive nature. On top of that, the company was spending quite a bit for the coverage, even though the program was considered of minimal value.

The company’s broker Tim Candy, managing principal at Integro Insurance Brokers, told the risk manager that his team would like to focus on these issues to develop a better program. Candy and his team performed a comprehensive exposure and risk assessment based on an in-depth analysis of the client’s operations, and were able to craft a solution that provided extremely broad coverage to better suit the client’s risk profile. Candy also secured the unique “costs of corrections” or “loss mitigation” coverage.

This solution was out of the norm, as hardware manufacturers will often fix a problem with a product at their own expense, in order to avoid costly E&O litigation and the potential for bad press and customer run-off. However, E&O policies typically don’t cover such expenses. Candy was able to provide such “first-party” coverage to provide reimbursement for the client’s costs.

“Tim Candy of Integro has been an exceptional account executive, keeping us on track and ensuring that the rest of the team consistently delivers upon their commitments,” said John Schaefer, director of risk management at SanDisk Corp. “He led the overall renewal effort and helped us meet our objectives.”

Can He Be Cloned?

Kevin Kalinich Global Cyber Practice Leader Aon, Chicago

Kevin Kalinich
Global Cyber Practice Leader
Aon, Chicago

Kevin Kalinich knows the risks of Big Data.

Wolters Kluwer’s transition from hard-copy publishing to distribution of electronic information assets dramatically changed its risk profile, as the firm now aggregates and analyzes massive amounts of data for clients.

For example, the analysis of prescription drug instructions could potentially result in allegations of product liability, medical malpractice and bodily injury claims — even though Wolters Kluwer does not design, manufacture, distribute, prescribe or sell such drugs.

While insurance traditionally has not addressed such risks, Aon’s Kevin Kalinich, global practice leader, Cyber Risk, negotiated customized policy wording to address the exposures. When Wolters Kluwer later faced multiple mass tort claims regarding its health care information assets products and services, the client praised Kalinich’s foresight.

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“Every cell of Kevin’s being exudes positive passion for what he does,” said Elizabeth Queen, Wolters Kluwer’s global risk manager. “Nothing is impossible; it is just a matter of finding a way forward that makes sense to the customer and the market.

“Kevin not only is involved in broking deals, but he weighs in on related complex claims analysis and prevention initiatives,” she said. “On several occasions, he’s helped us design and deliver media, cyber risk and contract liability workshops for legal and sales/marketing departments. The only question that remains: Can he be cloned?”

“I think he is the best broker in the cyber liability space,” another client said.

Pushing for Better Renewals

Sharon Sotelo-Lee Principal Integro, San Francisco

Sharon Sotelo-Lee
Principal
Integro, San Francisco

Sharon Sotelo-Lee knew Zillow Inc.’s renewal would be challenging this year, as the expiring program was at an extremely competitive price point. In addition, there were other challenging factors — an open claim, rapid growth in revenue and market cap, a primary policy form that was completely manuscripted, stock market volatility and earnings sensitivity. On top of all of this, the account was still in the two-year post-initial public offering window.

Sotelo-Lee, a principal at Integro Insurance Brokers, knew she and her team had their work cut out for them, as they needed to present an alternate primary option because the terms offered by the incumbent were unsatisfactory.

The primary insurer wanted to quadruple the retention and double the premium, so Sotelo-Lee searched the market for an alternative — but other underwriters responded that the client’s current program was already competitive. So she pushed harder and was able to convince the insurers to offer better terms both in price and coverage.

“Sharon Sotelo-Lee is awesome,” said Kathleen Philips, Zillow’s chief operating officer. “She handles our renewals and did a fantastic job negotiating the best deal for us.”

“She knows the markets well, she understands dynamics on the insurers’ side and is able to leverage that across policies to achieve good results for us,” another client said. “For example, if the same insurer is in multiple lines, she will look at the program in its totality to achieve the best results.”

An Extension of the Team

Anthony Moraes Principal Integro, San Francisco

Anthony Moraes
Principal
Integro, San Francisco

After one broker failed to address supply chain exposures, Juniper Networks reached out to Anthony Moraes, a principal at Integro. Moraes and his team then discovered that locations of Juniper’s contract manufacturers were “highly protected risks.”

Moreover, Juniper had products made at multiple locations, enabling Moraes to double the company’s contingent business interruption limits. Moraes also implemented a stock throughput program to more adequately address supply chain exposure. “Tony Moraes is truly very forward thinking,” said Laura Langone, Juniper’s senior director of global risk management. “He really is an extension of our team, helping us to meet our risk management objectives.”

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Memory chip manufacturer SanDisk Corp. was unable to develop an insurance program that had adequate limits to address its exposures, because its foundry partner was purchasing considerable insurance capacity. Moraes highlighted SanDisk’s supply chain strengths to previously untapped insurance capacity in London, Asia and Europe, and secured a 50 percent increase in program and CBI limits.

“Tony Moraes has done a very good job of managing and improving a complicated property insurance program that involves around 20 insurance companies,” said John Schaefer, SanDisk’s director of risk management.

“From the marketing through the implementation, he has been diligent about understanding our business and working with us to convey a simple message to our insurers.”

Guiding Through Experience

Winnie Van Client Counsel ABD Insurance and Financial Services, San Francisco

Winnie Van
Client Counsel
ABD Insurance and Financial Services, San Francisco

Winnie Van uses her technical knowledge not only from her days as an underwriter for directors’ and officers’ insurance, but also as a forensic accountant and a transaction attorney, to provide a comprehensive perspective for clients.

Van, client counsel and founding principal at ABD Insurance and Financial Services, also leverages her experience in complex litigation and securities transactions to guide clients through their unique risk profiles, with customized recommendations and a holistic view of risk transfer.

For Qualys Inc., Van developed and executed on a strategy to deepen insurance carrier relationships for the most current program structure and for the future.

“Van and her team did an outstanding job of connecting us with a very good set of potential insurance underwriters, and of obtaining reasonable potential bids leading ultimately to the coverage we sought,” said Bruce Posey, Qualys’ vice president and general counsel.

For Fantex Holdings Inc., Van developed an innovative insurance program with better coverage and lower cost. For a law firm, she negotiated a successful path to a complex claim resolution with insurance carriers in a securities class-action suit, and SEC investigation of a mutual client.

“We have a really great working relationship with Winnie,” another law firm client said.

The client said Van saved the firm big money in negotiating with carriers unwilling to pay on a claim.

BlackBar

Finalists:

William Bogins Senior Vice President Marsh

William Bogins
Senior Vice President
Marsh

Lindy Connery Vice President Marsh

Lindy Connery
Vice President
Marsh

Dan Kabban Client Executive Barney & Barney

Dan Kabban
Client Executive
Barney & Barney

Elisabeth Case Senior Vice President Marsh

Elisabeth Case
Senior Vice President
Marsh

Doug Jones Senior Vice President Roach Howard

Doug Jones
Senior Vice President
Roach Howard

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]