2016 Power Broker
Earning Industry Respect
Arranging a meeting with 30 underwriters with less than a week’s notice sounds next to impossible. But Danette Beck pulled it off, thanks to the respect she has earned serving construction clients for nearly two decades.
In this case, a major contractor, serving as the lead manager on a publicly funded project, called on Beck to place a Contractor Controlled Insurance Program and separate Builder’s Risk program at the right price.
The quickly assembled meeting to market the client resulted in proposals that “were much more competitive than our previous indications,” according to the company’s risk manager. “Ultimately, the savings achieved have put the project in a much better position to move forward.”
Beck’s technical knowledge and involvement in the construction industry has earned underwriters’ trust. As one client said, “They understand that if she is involved, the project is a legitimate opportunity, and in most cases the project will go forward.”
Beck participates in the programming committee of the Construction Financial Managers Association’s Orange County Chapter, and serves as a national board member of the Women Construction Owners and Executives organization.
Not only has that participation fostered relationships in the industry and kept her knowledge sharp, but it has also given her a front-row seat to hear what most concerns her clients and prepare for the challenges that lie ahead.
Experience and Expertise
Clients rely on Richard Floyd’s expertise in wrap-up insurance to take some worry off their plates.
“I don’t have a background in insurance, so he’s been a tremendous help to me,” said Laura Hahn, president of Hudson Asset Management.
“We’ve done more development deals this year as opposed to buying operating properties, so he’s helped us with wrap-up insurance and dealing with labor laws in New York, which are very complicated.”
Strong negotiating skills also differentiate Floyd from his competitors. When one carrier repeatedly refused coverage on the basis of a project’s term and location, Floyd and his client put together a marketing plan and brought in four other carriers, all of whom were willing to accept the insured’s requirements.
When Floyd presented the competing deals to the incumbent carrier, they agreed to the term and location, and even reduced rates.
For Jeffrey Barker, senior director, global risk manager and claims for Hilton Worldwide, Floyd helped produce an OCIP on a tight deadline, with a limit of more than $200 million.
“He negotiated a reduction in the deductible from $100,000 down to $25,000, and increased the Limited Repair Work timeframe from 3 years to 10 years to match the state statute of repose. He did all this while reducing the premium 7 percent from the original quote,” Barker said.
Proactive and Responsive
A running theme among Power Brokers is their ability to anticipate clients’ needs, proactively communicate and get the job done in the blink of an eye.
Jonathan Kosin, Aon Risk Solutions’ Detroit CSG Practice Leader, does this time and again, even when that job is building or restructuring an entire stand-alone program.
“My company is a large spinoff of a Fortune 500 company. When the spinoff was announced, Jonathan Kosin reached out to me immediately to start the planning phase of creating an independent new insurance program,” said the director of risk management for a home building contractor.
Creating the new program meant developing clear marketing that presented the parent and spinoff entities — including their loss histories and risk exposures — as separate and distinct, and carefully negotiating with carriers to ensure premiums reflected the reduced risk on both sides.
In only nine months, Kosin and his team successfully completed the program on time and under budget.
Mary Murphy, director of risk management for ColourOz TopCo SCA, also relies on Kosin’s proactive nature and speed. With no staff of her own, she sees Kosin’s support as critical to the performance of her job.
“He has a knack for being able to satisfy a request almost immediately,” she said.
New construction projects were scarce during the lowest points of the recession, but Alliant’s Eamonn Long was able to help clients stay afloat and keep projects moving.
According to Frank Connors, CFO of home-building company EYA Inc., Long “played a critical role in our ability to move our projects forward during the depths of the great recession.”
In the past year, EYA launched a large development project that required the largest bond ever requested of the company — about three times the size of any other bond it has needed. Incumbent sureties declined the bond because the level of indemnity was lower, but Long was able to adjust the indemnity and find a new surety market to issue the bond.
When another client made an acquisition and had to replace all of its bonds, his “proactive communication” allowed him to anticipate the situation and get all the required bonds in place in time to close the deal, the client said.
Knowing the ins and outs of the construction business helps Long understand his clients’ needs and deliver solutions quickly.
To further that knowledge, Long has taken classes in bidding, blueprint reading, surety material, contract law and other issues related to construction risk to better grasp his clients’ point of view and build specialized expertise.
“Since we can’t start a job without the bond in hand, customer service is crucial to us and Eamonn has never let us down,” Connors said.
Tackling Complexity With Ease
New York’s labor laws make construction projects of any size a coverage challenge. Kevin McBride has always impressed his clients when tackling that complex environment.
“Kevin was instrumental in producing and then coordinating the broker services for the Hudson Rail Yards — a $3 billion construction project in New York City, for which he designed an Owner Controlled Insurance Program,” said Dan Zirpoli, director of risk management for Starwood Capital Group, a private investment firm with a focus in global real estate.
For another one million square foot, $500 million New York project, McBride successfully delivered a project-specific policy rather than a wrap-up program, which is typical for large-scale projects.
In addition, McBride placed a policy that included separate coverage for workers, saving $45 million, while providing the owner with the coverage it needed to stay on schedule.
His eye toward cost savings allows his clients to stay competitive.
For Urban Foundation/Engineering LLC, a foundation contracting company which often faces insurance needs different than those of a traditional developer, McBride tours every project to make sure he understands the exposures and coverage needs.
On one project, he was able to negotiate coverage at pre-renewal rates, saving the company about $700,000.
On top of that, his clients say he gives them top priority.
The ‘Point Man’
Public-private partnerships are becoming more common for large projects, but having multiple parties involved with different risk appetites creates a coverage conundrum.
For Kiewit Corp., a major North American contractor, Adrian Pellen serves as the “point person” to determine the complexities and respond with comprehensive coverage, said Tammy Pike, group insurance manager for the company.
“He’s been the quarterback of the Aon team,” she said. “He knows the right people to go to for answers he doesn’t have.”
For one P3, Kiewit took responsibility to design-build, operate and maintain the project, including capital improvements over a 30-year term. Pellen needed to carefully determine the long-term exposures for each aspect of the project, the allocation of risk, and the alignment of carriers to prevent any coverage gaps.
It was a particularly complex contract structure, with the project owner assuming responsibility for certain specified perils, such as windstorm, flood, fire and earthquake, while Kiewit retained responsibility for certain other perils.
The result was a premium that was one-fifth of the estimated cost if it had been procured under a standard market structure.
Another client similarly praised Pellen’s attention to detail and thorough understanding of every project.