2016 Power Broker

Energy, Downstream

The Insurance Geek

Jim Aylsworth Managing Director Aon, Houston

Jim Aylsworth
Managing Director
Aon, Houston

“We changed brokers to Aon, and we felt like we substantially upgraded our support,” said the chief commercial officer of one client of Jim Aylsworth’s. “If there’s such a thing as an insurance geek, Jim is one. He did pretty much a bottom up review for us which is something that we had needed to do for a while.

“The U.S. energy business is pretty tough right now so we were trying to find any way we could to have proper coverage, but not buy any more than we needed. It’s a challenging environment when your revenues in some cases have been cut by 50 percent. We still have the same equipment to run, we still have the same risks to manage, and so we have to try to find every way we can to be efficient. We have a lot of different operations. Jim looked at each of those sub-businesses, and deconstructed the risk around those so that he was able to rebuild the program.”

Another client heralded Aylsworth for clever salvage work on a difficult claim. The contention arose out of classification, and when Aylsworth was not able to get satisfaction for the client in direct talks, he brought in the National Council on Compensation Insurance and arranged a specific classification audit.

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The audit was complex, and an early trial of some new protocols, but was successful. However, under the law of unintended consequences, the reclassification triggered a significant increase in premium. So Aylsworth had to sit back down with the same underwriter to renegotiate rates. That too, was successful.

Bridging Risk

Matthew Giambagno Assistant Vice President Marsh, New York

Matthew Giambagno
Assistant Vice President
Marsh, New York

Marsh’s Matthew Giambagno has a reputation as an insurance educator. “We were very pleased that Matt was in charge of our account this year. Our company was in the midst of a significant divestiture,” said the insurance manager for a client. “Matt provided able assistance with all of the insurance negotiations and program or policy changes. His knowledge of both the property and casualty markets, and our insurance programs in particular, enabled our senior management to better understand our insurance options before and after the split,” the client said. “He was able to look ahead and ensure that there were no unexpected delays or potential issues that would delay the closing in any way.”

In another case, a client faced complications surrounding a major corporate restructuring, despite months of preparation. The worldwide operations of the company involved global banking and lending relationships, as well as the need for local insurance in each country. Although the situation seemed akin to playing whack-a-mole, Giambagno and his team were able to arrange bridge coverage through the transaction.

Giambagno “helped simplify the process for us and produced a more efficient result,” said the senior insurance analyst for one client. “He followed through on the requests we made of him and on his own promises through to the result. He provided solutions and found the answers to our questions and concerns. We went into our 2015 renewal with a very high target and with Matt’s assistance we greatly exceeded our goals.”

A Tenacious Diplomat

Chris Shorter Vice President Aon, Houston

Chris Shorter
Vice President
Aon, Houston

Aon’s Chris Shorter spent more than five years as an underwriter in the energy group of a major carrier, and so had the ideal skillset when clients battered by the plunge in energy prices came to him seeking rate relief.

“There has been a terrible decline, with oil and gas down substantially, and we told him where we needed to be on price, retentions, terms and conditions,” said one risk manager. “We also told him that we wanted to stay with our incumbent carrier. We don’t believe in jumping around.”

Even though the casualty market was softer last year than in the year before, Shorter still had to reach far into his bag of tricks from his time as an underwriter to achieve the 20 percent reduction the client sought.

He basically crafted the entire program for the underwriter, from recommended coverage and terms to structure and rate rationale. Placement turned into a granular discussion of underwriting at a very technical level.

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Shorter kept the client in the loop throughout the discussions. There were some adjustments made, but for better or worse the client stuck with its goals for reductions. In the end it worked.

“We were able to hold where we wanted to,” said the risk manager.

“Chris also worked his magic on our excess umbrella tower.”

The client credits Shorter with both tenacity and diplomacy.

Working the Market

Sean Faulkner Senior Vice President Marsh, New York

Sean Faulkner
Senior Vice President
Marsh, New York

Regulatory regimes for power generators vary widely around the country, with some states being quite laissez faire, others almost draconian. “Sean helped us a great deal this year with our excess liability renewal,” said the risk management adviser for one client.

“We operate in a state with a very tough regulatory structure, and have struggled with that for several years.”

Things came to a head in 2015. Faulkner produced a win. “Sean worked the market from three angles: the mutuals, Bermuda, and London. There are not a lot of domestic carriers willing to write. Sean was very effective in differentiating our risk profile. He was able to look at policy language to generate capacity and to get premium reduction.”

One of the particularly vexing elements of utility coverage is the emerging risk called inverse condemnation that can be interpreted to extend liability far beyond conventional understanding. Clients said that Faulkner is on the forefront of this issue.

And then there is the good, old-fashioned tussle over rates. “We had a very tricky renewal,” said one risk manager. “We had some very aggressive targets on premiums from one of our carriers, and you know that can have a cascade effect with other carriers. They felt the market could bear it. In the end we had a great renewal. Sean was able to keep that carrier to an increase we could deal with, and hold the line on the others.”

In both cases, clients said Faulkner was skilled in finding unused or under-used capacity within the existing program.

An Essential Partner

Rene Van Winden Senior Vice President Aon, Houston

Rene Van Winden
Senior Vice President
Aon, Houston

Downstream assets tend to be fraught with risk. Offshore markets, including Bermuda and Europe, are becoming an increasing presence as brokers push to differentiate their clients’ risk profiles. Clients say Aon’s Rene Van Winden meets these challenges with savvy and skill.

“Rene pulled together an effective property cover that enabled us to combine all our companies under a single umbrella, whereas previously we had required two separate silos of cover,” said the general counsel for one global client.

“He also increased environmental cover across all companies, and did this while driving deductibles and reserves down to a level that allows us to terminate our captive. All of this while negotiating a marked reduction in premium. In addition, Rene introduced us to U.S. markets which have demonstrated much more comfort with our risk profile than the European markets we had previously accessed. This was also partially responsible for the reduced premiums.”

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Other clients had similar praise. “We completely restructured our program for 2015,” said the corporate insurance manager. “That significantly reduced both our premium and our deductible. One example of how that was done was pulling our railcars out as a stand-alone, not as part of our overall program.

“Rene was also essential in an acquisition. As part of that transaction we had some new underwriters, and he has been wonderful working with them.”

Better Than Ever

David Robinson Managing Director Aon, Houston

David Robinson
Managing Director
Aon, Houston

The downstream segment of the energy business is fragmented, with companies operating in myriad small segments. It’s a complicated landscape to navigate, which is why clients value the counsel they get from David Robinson, Aon Risk Solutions Energy Global Downstream and Midstream sector leader.

“David was integral to our decision-making process regarding some recent investments for a type of transportation and distribution asset that would have been completely new to us,” said the director of property insurance for one client.

Another challenge is constantly adjusting coverage. “We included a combined single limit deductible excess of our usual deductible to our program to allow some pricing relief,” explained a director with another client. “This was one of many options that David provided. David also ensured that we maximized the value of our industry mutual and how that fits with our commercial program. David communicated on our behalf with partner companies and their consultants in transactions to close a deal or resolve a difference.

“Further, he assisted in educating our operations personnel in how certain insurance coverage works, notably builder’s risk.”

And then there is the important task of just saving clients money.

“We have been through two renewals with David,” said the chief compliance officer with one client. “He did an outstanding job in 2014 and I felt we had hit our peak. But he and his team outdid themselves in 2015.”

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]