2016 Power Broker
Proactively Enabling Acquisitions
Two of Christopher Cancro’s insurance company clients acquired large peer companies, significantly increasing their respective revenue base and market share. As part of that process, both clients had to integrate coverage for the newly acquired entities into their existing errors and omissions programs.
Cancro was able to negotiate full prior acts coverage for the acquired entities’ E&O for no increase in premium. The key to achieving this result was leveraging the buying power of the new, larger combined entities and adopting a high-disclosure marketing approach that forced the carriers to underwrite the risk on the merits including specific line of business exposure, client loss history and go-forward retentions — rather than simply rely on the fallback response that acquisitions equaled premium.
“Chris is responsive, provides measured advice and shares valuable experience and information,” said a client in the insurance industry. “With his assistance, we renewed and expanded our management liability program in a prudent and cost-effective manner.”
“Chris Cancro is extremely diligent,” said another insurance company client. “He is persistent and tenacious on behalf of his clients and his understanding of products is extremely deep.”
“Chris Cancro is a valued and trusted partner,” said a financial institution client. “He consistently delivers effective and leading-edge solutions for our ever-evolving risk profile.”
Instilling Confidence Among Carriers
One of Edward Conlon’s private equity clients received an offer to purchase one of its portfolio companies. However, another party that was suing the PE firm in a securities case filed a temporary restraining order to stop the sale. The PE firm wished to immediately distribute sales proceeds to its limited partners before the trial ended, so Conlon helped create a very large tower insuring against an adverse judgment.
This entailed answering very difficult questions from multiple carriers, convincing them to get over the “blanket denial” of insuring against litigation outcomes by highlighting the best aspects of the risk profile, leveraging relationships for capacity, working through nine rounds of drafting the primary policy, and creating the quota-share manuscript policy from scratch.
The risk transfer permitted his client to monetize its internal rate of return and distribute proceeds to its limited partners without any caveats or holdbacks — and raise a new fund.
“We had a very difficult project and Ed and his team took it on and did not give up until they got it done,” the client said. “They did a great job.”
“Edward Conlon has given us great service,” said another PE client. “We had a really complex transaction, spinning off one division of a company at the same time we were merging with another company, and our risk profile changed. Ed helped prepare us through that, and that helped management through a very complicated process. He brought resources from his firm to help us rethink issues and stretch targets up front.”
Working with several London syndicates, Dennis Gustafson last year created Bank ExecShield, which offers coverage for civil penalties against bank directors or officers as long as they pay for the coverage themselves. This was in response to regulations stating that such penalties could neither be indemnified by the bank nor covered under the bank’s directors and officers policy.
Gustafson was also able to successfully negotiate a renewal for a client that had a $2.5 million claim. He recommended inviting competing carriers to the underwriter meeting, and after seeing all of the interested parties, the incumbent carrier offered a renewal with a mild rate increase. Gustafson was also able to place a new carrier on the excess layer at enough of a rate decrease to generate an overall flat renewal.
“By drumming up interest from other carriers, this keeps the incumbent carriers very price competitive,” said a bank client.
“Dennis has provided excellent customer service to AmeriNat this past year,” said Adrienne Thorson, chair and chief executive of AmeriNational Community Services. “As we transitioned into a new ownership structure in a very tightly regulated industry, Dennis walked us through step by step what needed to be done to ensure there would be no lapse in coverage.”
“Dennis is a dedicated, passionate, and knowledgeable insurance professional,” said Jeff A. Paolucci, chief financial officer at First Reliance Bank.
A Voyage Across the Pond
One of James Jackson’s clients, Aegon, conducted a request for proposals for its global errors and omissions policy placement, inviting three brokers to compete — including Willis Towers Watson, which has been Aegon’s broker since 2004.
As the lead broker and working closely with colleagues in both London and Bermuda, Jackson proposed restructuring the program out of the London market and reducing Aegon’s relatively high retention. The placement had previously been led from the U.S. market, as that’s where Aegon first purchased the policy and believed they had the greatest exposure.
Jackson and his team retained the business as a result of the proposed solutions. The placement was moved to London, incorporating several unique coverage enhancements, such as loss mitigation costs, that were previously unavailable to them. Aegon is now considering two retention options and two quoted towers presented by Jackson.
“We gave him a pretty significant challenge last year, moving a $300 million program from the U.S. to Europe with some 20 different carriers, and he did an amazing job for us,” said Barry White, Aegon’s global insurance manager.
“James Jackson has been extremely knowledgeable, both in relation to the insurance he places for us, as well as understanding us as a company and the risks we face,” said a client in the life insurance and annuity industry.
They Said It Couldn’t Be Done
Georgina Serio obtained regulatory coverage for one bank client that had a consent order in place, after the prior broker proclaimed that it couldn’t be done. Serio was then able to get the client’s executive liability premium reduced by $250,000, and saved the client more than 20 percent in its regular insurance program by including property owned by the bank that was not directly related to its business.
“I met her several years ago when our bank was ‘troubled,’” the client said. “We had been told that the bank could not get regulatory insurance coverage because of its condition. She said, “Come to New York City with me, make a presentation to 12 underwriters and I will get you regulatory coverage.’”
“I did what she asked and she delivered what she promised,” the client said. “Plus she got us kidnap and extortion coverage and cyber coverage without increasing our premiums over the previous year’s cost. At our next renewal, she was able to reduce our cost about $250,000.”
For Pacific National Bank, which was also operating under consent order, Serio not only was able to obtain coverage, but she was also able to reduce the renewal premium by 35 percent.
“Ms. Serio really had to step up to the plate and diligently work with the carriers to ensure she could secure the appropriate coverage under reasonable terms,” said a client.
Attuned to New Solutions
One of Timothy Sullivan’s financial services clients was buying a bank. After analyzing all of the exposures, Sullivan aggressively pre-negotiated the additional directors and officers policy premium for the acquisition that would be due upon closing of the transaction. This was on top of achieving a significant reduction in the D&O premium for the client, as well as numerous meaningful coverage enhancements, resulting in overall premium savings.
Sullivan also successfully negotiated the inclusion of prior acts coverage for the acquiring bank under the client’s banker’s professional liability program, at a very competitive cost. Moreover, he was able to successfully secure market leading coverage for his client that no other BPL insurer was willing to offer for a financial services firm of that type and size.
Sullivan was also able to negotiate a comprehensive program for the client’s employment practices liability program using the same Bermuda market as the acquiring bank. The cost savings enabled the client to more than double its limits. Indeed, the client increased limits across all lines of coverage, and Sullivan was able to secure all new layers without the requirement of warranty letters.
“Tim is extraordinarily responsive across all management professional liability lines of coverage,” said Arlene Lasagna, senior vice president, corporate insurance at CIT Group Inc. “He gives meaning to the concept of collaboration.”