The 2019 Aviation Power Brokers
Michael Calhoun, Managing Director, Aon
Constriction in the aerospace sector was a common theme this year. “Major carriers have left,” said one director of insurance.
“We had a very difficult time this year, trying to get a renewal with 65 percent of the previous market capacity left out there. Michael was able to go to new markets for us, not just domestically but in London. We also had some loss deterioration this year, and that made the renewal even more difficult.”
“Michael has done a great job of leading us through a market-lead review in the face of a challenging liability market in aviation,” said one manager of risk and treasury. “Coming off unexpected increases to our prior year renewal, the lead review was done to be sure we were in the best spot in the market.
“Michael ensured that the correct markets were included in the review and looked to make sure this process went off according to schedule and that our corporate culture was communicated throughout the review.
“Once making a decision on a lead market, the challenging renewal was another endeavor Michael led to get to a point that we were able to renew our coverage with time to spare ahead of our expiration date.”
Another client asked Calhoun to manage a re-marketing of their aviation program in anticipation of significant growth in their fleet size and exposure. Calhoun led the initiative to identify potential market candidates. He conducted the review for qualifications and capabilities review of each, then coordinated interviews with the selected prospective finalists.
Matthew Donohue, Vice President, Aon
“Matthew has improved our program and discovered many potential liability exposures through site visits and in-depth interviews,” said one company director. He has developed an expertise in drones, helicopters and leased aircraft. “This has resulted in us being able to insure these once-unknown liability exposures.”
Being new to the insurance industry, a risk manager said, “Matthew has been patient with me and assisted me. He has done a great job with getting us extra coverage at no cost.” There were also concerns that the rate would increase, because the client had a very large claim in 2017.
“Not only did Matt get the renewal done, it was for about the same amount, and he was also able to negotiate drone coverage as well at no cost. Also, during the negotiation, he was able to lock in pricing for two years.”
The founder and CEO of another client is a staunch environmentalist. “So, being a visionary and green, she has us exploring the development of an ambitious venture,” said the vice president of risk management.
“It is not an easy feat to get insurance for such a venture. To further complicate matters, we were under a time crunch to get coverage placed so the research could begin. Matt secured options for significant limits and broad coverage at a rate that was far less than we expected.
“In another example, a hurricane was bearing down on the place where we base our corporate aircraft. Matt reminded us that our policy covers expenses for moving the plane out of harm’s way.”
Brad Meinhardt, Area President, Gallagher
“We just acquired another airline and Brad did an absolutely wonderful job,” said one CFO.
“That was after he did a superb job turning around our whole program. Our previous broker had given us five days to respond to a renewal, and I did not want to take that. I contacted Brad, and he got us a 60-day extension.”
Another CFO said, “Brad was instrumental in reviewing and placing insurance for our international acquisition in 2018. Brad also assisted with placement and coverage with our new expansion of operations and setting up coverage with our new subsidiary.”
One client replaced a midsized jet with a larger craft: “While it is commonplace for larger airlines, for us it was significant,” said the company president. It was also a busy year for complex claims on several aircraft that Meinhardt handled smoothly, he added.
“Brad worked through that entire process with me and consulted with me regularly on the repairs, the lay-up credits and getting the aircraft back into service.
“Brad made sure we were issued the lay-up credits for the entire time the aircraft had been out of commercial service and was able to save us a substantial amount of money.”
In addition, Meinhardt was able to work through a comprehensive policy that provides more extensive coverage for the client’s aircraft, “while providing the improvements at a lower rate during a period that all rates for commercial aircraft are moving up and several of our policyholders actually dropped us,” the president stressed.
Rob Scheige, Vice President, Willis Towers Watson
“We have a first-of-its-kind space system that required a very complicated loss formula to cover,” said one VP.
“Rob structured it in a way that was comprehensible to carriers. He developed several boundary conditions and was instrumental in preparing the policy language. We were also impressed by his ability to take such a complex placement to so wide a market. There is only a subset of aviation that writes space insurance, and Rob was still able to negotiate with about 20 markets. He went beyond just domestic carriers to London, Paris and even Asia.”
Another client’s advanced satellite experienced an anomaly in 2017, said one CFO.
“Rob’s understanding of the technical issues associated with the anomaly and the corrective actions taken by our team, combined with his ability to communicate these issues to the underwriter community, enabled [us] to successfully place renewal policies in 2017 and 2018 at premium reductions of 5 percent and 10 percent, respectively, despite underwriter concerns.
“Rob helped drive an average annual premium reduction of 14 percent over the last seven years, while maintaining a consistent sum insured amount.”
Another client had to complete its annual renewals in the face of several significant technical issues that were experienced in operations. “Rob was great,” said one vice president.
“Rob helped us present a complete, informative and transparent message addressing all the technical concerns of our underwriters. The net result was a placement at the full coverage level we desired and at favorable rates.”
Dana Smith, Assistant Vice President, JLT Specialty USA
“We are a small company, and things are flying all over the place,” said the CEO of one of Dana Smith’s client companies.
“The infrastructure for operating an airline is extensive, and we do not have the resources to handle our own insurance needs at the same time. That was true before we doubled our revenue through an acquisition in 2018. Dana handled all of that before, during and after.
“She became the broker of record on the existing policies, cancelling or winding down as was necessary. At the same time she had to handle a few claims for us as well. And those were multi-party claims.”
Another client had a placement that might seem uninsurable: an international aerospace competition.
Flight teams are required to provide proof of insurance, but most do not have it, so Smith worked with the clients, their carriers and with the organizations sponsoring the competing teams to get them covered on a one-off policy.
“We have teams and people coming in from all over the world,” said the general counsel for the client. “And we have to have coverage that all of them can afford, even college students. There is a lot of work with our organization and with our insurers, but also with the teams and their organizations.”
Most clients rave about their brokers’ availability, but one testified they needed a certification of insurance on Christmas Eve. Smith was in a deer blind in the Texas Hill Country but was able to get the certificate from the field so the client could secure their charter.
William Willer, Executive Advisor, Gallagher
John Woolley is the executive vice president of Swift Air, which bought the legendary name of Eastern Airlines and is resurrecting the storied brand. The legacy of both the original Eastern and of Swift Air is complicated, including some recourse to court protection.
“Bill was the broker for Swift when it emerged from Chapter 11,” said Woolley. “We were being held hostage to pay previous underwriters and broker to stay out of Chapter 7.”
He explained that Willer was able to save several million dollars on the current placement, freeing tight capital to pay off obligations. “It is all completely non-standard, but Bill got it done. I never thought it was possible. He knew the rates were way too high. We have a new ownership and new management. Bill is part of a great story.”
Another client grew from three aircraft in 2014 to 30 by the first quarter of 2019, said the company’s CEO.
“In 2018 alone, we increased our fleet by 11 aircraft, almost doubling in size. During this process, we had a major incident with one plane in Europe with in excess of $3 million of damages.
“During all of this, Bill accommodated our expansion and handled the aircraft claim without causing any disruption or major issues with our insurance. Across the whole organization we now have a revised system of measurement for 2018 and that was 100 percent driven by Bill.”