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.”

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The R&I Editorial Team can be reached at [email protected]