2015 Power Broker

Technology

Not a Know-It-All

Tom Draper Technology & Cyber Practice Leader Arthur J. Gallagher, London

Tom Draper
Technology & Cyber Practice Leader
Arthur J. Gallagher, London

Table stakes among Power Brokers is an authoritative, if not encyclopedic, knowledge of the industry.

How refreshing, then, to hear from clients that Tom Draper has no pretense to mastery in cyber risk.

In sharp contrast, they credit him with listening and learning, working collegially through his contacts, and putting his greatest efforts into keeping current in the fast-moving field.

“Tom really came to the fore for us this year,” said one risk manager. “We completely revamped our program, bought additional limits, and broadened our coverage. All of that was happening while the news was full of massive breaches at major retail operators and even government agencies.”

It would have been easy for Draper to encourage an already eager client to go as big as it could. Instead, Draper worked his industry sources and contacts, learned what was realistic and practical, and helped secure broader and deeper coverage, but not more than was necessary.

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Draper placed a single policy with a $100 million limit, which is among the larger, if not the largest cyber limit placed to date. It was done on a manuscripted wording that created a global breach-response team, among other features.

Again under the aegis of learning and growing, Draper is credited with helping to craft an admitted policy through Lloyd’s syndicates that taps into broad support in the underwriter community but also risk-mitigation expertise that can flow back to the insured.

A Great Partner

Eric Long Founding Principal ABD, San Mateo, Calif.

Eric Long
Founding Principal
ABD, San Mateo, Calif.

Eric Long presented a broader business case for one of his clients to its incumbent carrier, enabling the client to realize over $100,000 in annual savings.

For another client that was effectively forced into moving its 1,000 employees under a co-employer arrangement,

Long advised the client on contract terms and pricing that resulted in more than $200,000 in annual savings — even though this meant a number of policies would be transitioned away from ABD Insurance & Financial Services.

“I work in a challenging industry, which is not always easy to understand,” said Chris Lowe, chief financial officer at Hansen Medical.

“Eric is an outstanding advocate to ensure underwriters are making an informed decision about our coverage. His ability to educate and facilitate the underwriting process has been by far my best experience in 20-plus years in the industry. Eric has successfully supported our risk management programs, ensuring adequate coverage from high quality underwriters, while also ensuring cost effectiveness as well.”

“We’ve worked with a number of brokers over the years and Eric Long is the best risk management partner we’ve ever had,” said Doug Farrell, senior vice president, investment relations, corporate communications and treasury at Affymetrix. “He’s helped us to strengthen our coverage every year and he has done this in a consistently cost-effective manner.”

“With the problems I try to solve, I don’t have time for insurance, so Eric looks out for me — like turning around a 500-page document,” said a client at a flash storage solutions company. “He also understands my risks.”

Just the Right Touch

Phil Norton National Managing Director Arthur J. Gallagher, Chicago

Phil Norton
National Managing Director
Arthur J. Gallagher, Chicago

Sometimes there is nothing fancy to being a Power Broker®. Nothing more than getting down and grappling with a complex claim.

“Phil has worked on several claims for us in the past,” said one corporate insurance manager of a major technology firm.

“It had been a while, but we recently had a claim that was going nowhere fast. And there was no light at the end of the tunnel. We asked Phil to step in, to see what he could do.”

Norton spent time with the people he determined could help resolve the stalemate.

“Among the people he met with were the person who was in charge of all claims, the team who was directly managing our claim, the person the team reported to, other senior claims professionals providing input, and finally the outside counsel to determine common legal ground where the two sides could meet.”

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The client concluded, “When you have argued all of the valid legal aspects of the policy and there doesn’t seem to be a way out, a broker’s personal touch is and can be critical to ensure the best possible outcome.”

That’s power.

That said, Norton is not afraid to be gentle. Several clients are large consumer operations, but not technology driven.

As those firms expand their presence online, they encounter new exposures, and laud Norton for providing tech-savvy insight without being condescending to their legacy operations.

Quick and Effective

Jason Peery, CPCU Senior Vice President Aon, Newport Beach, Calif.

Jason Peery, CPCU
Senior Vice President
Aon, Newport Beach, Calif.

Many Power Brokers have handled a big acquisition or divestiture for a client. Often, large acquisitions involve expanding the acquirer’s program to accommodate new, larger exposures.

In contrast, Aon’s Jason Peery had to tackle the more ticklish task of integrating two programs, the extant one for an existing client, and one that came with a nearly half-billion-dollar acquisition.

The client said that the answer was a combined approach that integrated much of the existing two programs, supplemented by independent run-offs.

The plan saved the combined company a third of a million dollars over the pro-forma programs.

In another situation, a client’s perils extended beyond cyber threats to physical threats to employees in another country. The incident involved a complex claim, issues of physical security of people and property, and litigation in addition to the claims process for a loss that ran close to a million dollars.

“Jason is a true extension of our risk management department — which otherwise is just me,” said one client with a laugh.

That risk manager detailed how Peery won a large portion of the client’s business, but not casualty. The broker trying to place that business got two extensions, but could not find coverage that included electromagnetic frequency.

Peery’s team stepped in. Given just a month to place the casualty coverage, they did so, including the frequency cover on better terms than had originally been sought.

Wise Beyond His Years

Brent Rieth Assistant Vice President Aon, San Francisco

Brent Rieth
Assistant Vice President
Aon, San Francisco

Stepping in as a new broker on an existing account can be daunting, but Brent Rieth’s fresh eye yielded big benefits.

“It was my first time working with Brent this year as he took over for a colleague who left the firm,” said one risk manager.

“We were able to increase our limits significantly this year working with new markets in an accelerated timeline and staying within budget. Also being new on our account, Brent performed a detailed review of our policy wording in collaboration with coverage counsel and achieved various coverage enhancements.”

Rieth is credited with being “wise beyond his years,” by a client for whom he handled a simultaneous claim and renewal.

“He went over and beyond for us this year, placing an existing coverage with an incumbent while in the midst of a possible high-dollar claim. I placed this line of coverage with him for the first time this year, and he hit the ground running. This was one of the smoothest renewals with a nominal increase due to possible claims activity.”

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Another client is a cloud-based firm that handles customers’ confidential information.

“E&O is an important coverage for us as it is our primary source of cyber risk coverage particularly as it relates to data breaches,” said the company’s director of enterprise risk management.

“We hear from Brent frequently outside the renewal cycle. Only a few weeks ago, Brent took the initiative to reach out with some industry cost and remediation data.”

Setting the Pace in Cyber

Robert Rosenzweig, RPLU Assistant Vice President DeWitt Stern, New York

Robert Rosenzweig, RPLU
Assistant Vice President
DeWitt Stern, New York

“Robert was instrumental in helping us assess the correct coverage for our growing technology firm which acts as a pass-through for client revenue,” said a vice president for business affairs.

“We needed a consultative approach, and he was able to give this to us, which prompted us to leave our prior broker. Robert is especially knowledgeable in the area of errors and omissions — a coverage area in which we had minimal understanding, especially given the recent data breaches in multiple industries.

“I am impressed that he understood our business without a lot of explanation. Our relationship is still new, and I expect that we will receive excellent direction from now on. I finally feel that we’re in good hands.”

Expanding on that theme, other clients recognized Rosenzweig for his ability to customize and manuscript coverage to keep pace with the rapidly changing exposures in the high-tech sector. Clients said that responses that they get from the market are often different from what they believe their risks to be, especially in E&O, cyber liability, and professional services.

“Up to this year,” said one client, “we relied upon our media clients to provide wrap insurance [for completion of a show or film].

“Clients would have to provide us with proof of that coverage, but we would have to pay for it, and we would have to take their word that it was sufficient. Sometimes it was, sometimes not. Robert was able to secure wrap insurance for us directly, increasing our security and cutting our costs.”

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]