The 2019 Fine Arts Power Brokers

Kierstin Johnsen
Account Manager
Risk Strategies/DeWitt Stern, Richmond, Va.

Kierstin Johnsen, Account Manager, Risk Strategies/DeWitt Stern

“Kierstin doesn’t just do it by the book or with the best practices; she’s doing her job at the highest level in extreme circumstances. Effortlessly, it seems,” Louie Lane, studio manager, IDY, LLC said.

His studio sends art all over the world, and this past year, Lane had several last-minute changes with a show on exhibit in Brazil. “They’re very strict with their policies. If any ‘i’ isn’t dotted or ‘t’ isn’t crossed, there would be trouble.”

Lane’s show had to move locations, leaving little time to prepare, and since he could not purchase the needed insurance, Kierstin Johnsen stepped in and worked with the studio and the institutions in Brazil to keep the art safe.

“She’s understanding of the circumstances that come with a living artist who houses their own artwork,” said Steve Polaner, studio manager, LaMonte Fine Art Inc. Polaner’s wife is that artist.

When the couple wanted to switch storage facilities, Johnsen knew what to do. “Through the convoluted turns, she was rock steady and stopped the enormous feelings of stress of the artwork being moved.”

“She is diligent, extremely responsive and timely,” added Marilu Knode, director, exhibitions and programs, Milwaukee Downtown Inc./Sculpture Milwaukee. As an outdoor exhibition of artwork, Milwaukee has to be up-to-date on insurance policy changes.

“Kierstin knows the nuances of our artwork, which is helpful in her giving me feedback on the additional security measures we take to protect the work and the public,” said Knode.

Rose Proby
Senior Vice President, Head of Fine Art
Marsh, London

Rose Proby, Senior Vice President, Head of Fine Art, Marsh

“This year happened to be a year of dynamic change,” said Charles Reno, VP, risk management, Sotheby’s.

Broker Rose Proby was tasked with some major changes from Sotheby’s: Negotiate 14 different renewal options while facilitating approval support for a new art collector’s New York-based storage facility, all while securing a global art risks cover program for the record-breaking wine division that Sotheby’s recently entered.

“Her team provided us with extraordinarily clear diagrams of the year-over-year savings. When putting together our renewal program, Rose spoke with over 40 individual representatives who make up our program. And getting 40 representatives to the table is a Herculean feat itself,” Reno said.

“We have an eight-hour time difference, and I still get an almost always immediate response,” said Linda Somerville, risk manager, The J. Paul Getty Trust. Getty needed to increase its limits in what Somerville described as a very hard market.

Proby was able to increase coverage within 48-hours. “She loves art, so she understands art and the nuances behind it. It’s not just a desk that needs to be insured; its Louis XVI’s desk that needs to be insured. She knows her stuff.”

A third client said her institution’s policy is placed on behalf of a department that understands very little about insurance. “Rose responds to the wide variety of queries and concerns [that] come her way immediately and is able to explain in a way that speaks the language of her clients.”

Anne Rappa
Senior Vice President
Aon, New York

Anne Rappa, Senior Vice President, Aon

Anne Rappa of Aon/Huntington T. Block likes to meet face to face. It’s a method that works for her.

“I met Anne through a class I was taking,” said one client. “Anne came to speak with the class, and afterwards I had her give a presentation to my team.”

“We’ve had Anne come and visit the museum to meet with the finance committee and review their collection coverages,” said Warren Bunn, collections and exhibitions manager, The Corning Museum of Glass.

David Gray, executive director, The Greenwich Collection, added, “She is glad to attend board meetings, explaining to the board what insurance options are best.”

But face-to-face isn’t where Rappa’s service stops; after speaking with her clients, she strives to get things done right.

The Greenwich Collection, for example, is a nonprofit, and “Anne works with incredible detail to ensure the coverages are the best fit for our nonprofit needs,” said Gray.

One senior director said that after a serious hurricane damaged an apartment under her company’s care, she leaned on Rappa. “She helped us source a local warehouse, movers, and she helped us source conservators at a moment’s notice.”

Right now, Bunn and his team are working on a 2019 exhibition featuring a survey of contemporary glass pieces. There are 100 artists across the globe being featured in the exhibit, and Bunn has been in constant conference with Rappa, trying to make certain they have the right coverage to get the pieces to the exhibit safely and within budget.

Molly Slattery
Account Executive
Aon, Washington, D.C.

Molly Slattery, Account Executive, Aon

Private art collector David Werner had to ship a two-piece antique chair set from Finland to Sweden and then to the U.S. While they were in transit, Werner got the call — the package was lost.

“It was a 130-pound, 5-foot package,” Werner explained. “I called up Molly and she reassured me; ‘Don’t worry, we have them covered.’ Then she immediately put me in touch with the person who handles claims.” Within five hours, Molly Slattery made him feel comfortable about the situation. And luckily, a day later, the chairs were found.

Jeanne Jarvaise, another private art collector, was working to secure her father’s artwork after he passed but ran into a challenge: Some family members didn’t understand why she wanted to insure the art and took legal action. Because she could not get the art appraised, Jarvaise did not want to transport it off her father’s estate.

“My stress levels were super high, but Molly made it all easier, and she worked with me.” When a decision was reached, Jarvaise had four days to get the work inspected, appraised and transported. “She knew what needed to happen and the order it needed to happen in,” Jarvaise said.

Another client, Alvaro Leal, owner/corporate art collector, Global Pacifica LTD, has a large show to protect this year: “We put together a major exhibition, featuring artworks from Warhol, Basquiat, Haring, Clemente and B. Kruger.

“The insurance value was over $20 million, and we were working with multiple collectors. Molly worked very hard to obtain the proper coverage for this show in record time.”

Casey Wigglesworth
Assistant Vice President
Aon, Washington, D.C.

Casey Wigglesworth, Assistant Vice President, Aon

What makes a good broker great? “I want to know that when I put the information together for an exhibition, that they will respond quickly and get all certificates of insurance together on time,” said Karen Frederick, curator of museum collections, Greenwich Historical Society.

For Frederick, Casey Wigglesworth fits that bill. The society was considering purchasing an expensive painting from a private collector and decided to house it on loan. The process set in motion two last-minute certificates of insurance.

First, to house the painting for a week, and then again for a two-month period. “Casey had to get the same certificate with the same amount of coverage for the same painting in just one week,” Frederick said.

The society had another instance where they borrowed paintings for an armory exhibition: “All I wanted to do was sleep here and make sure nothing happened to those paintings. But Casey made sure everything was in order and taken care of on time,” said Frederick. “When we’re talking about housing major paintings — paintings worth over $1 million — I’m happy to know it’s Casey getting it done, both in transit and onsite.”

Grant Quertermous, curator, Tudor Place Historic House & Garden, couldn’t agree more: “Any curator or collections manager will tell you that objects in the museum are like children — caring for them is expensive.

“When they travel, you’re concerned about their well-being from the minute they leave your museum until the minute they return. Casey shares that concern, so I always feel better knowing she’s looking out for the objects in our collection.”

Blair Wunderlich
Account Executive
Aon, Washington, D.C.

Blair Wunderlich, Account Executive, Aon

Hillwood Museum wanted to include a Fabergé-exclusive exhibit in its facilities.

“These were rare artifacts to be borrowed from private collectors, museums around the world and the Prince of Monaco,” explained MJ Hagan, collections manager.

Broker Blair Wunderlich worked directly with the institute’s lawyers for each piece’s loan contract. She guided Hagan on whether adding the collection under their overall blanket policy made sense or if they should take out a separate policy just for the Fabergé.

“She facilitated meetings with other agents who worked on similar projects in larger museums to get us the advice we needed to take on this collection,” Hagan said.

And now, Fabergé artifacts — from the world-famous eggs to handcrafted sculptures — have a home at the Hillwood exhibition.

Kele McComsey, director, museum division at Mana Contemporary, said Wunderlich is great to work with: “She’s on top of things,” he said.

“And that’s really what your agent should be doing — going out and being active in your business.” For example, Wunderlich was integral in reviewing Mana’s policies. “She helped us navigate through recent claims,” and has been able to lower premium year over year while giving advice on best practices.

“Blair took over our account from a previous agent who retired,” said a third client. “We were having issues with our renewal due to claims from the year before, and Blair did incredible research to get us what we needed. She has been an invaluable resource to us.”

The complete list of 2019 Power Broker® winners can be found here.

Finalists:

Michelle Abecasis
Account Executive, Fine Art & Special Risks
HUB International, New York

Margaret Bussiere
Vice President, Fine Arts
DeWitt Stern, A Risk Strategies Company, New York

Kristina Marcigliano
Senior Account Executive
DeWitt Stern, A Risk Strategies Company, New York

Ever Song
Account Executive
Aon, Washington, D.C.

How a Carrier Partner Can Help Navigate a Challenging Management and Professional Liability Market

A combination of a choppy economy with increased claims frequency and severity could lead to rate increases in the Management & Professional Liability market.

By: Risk & Insurance | April 3, 2024

Rates in the management & professional liability (M&PL) markets were on the rise from 2020 to early 2023 and are now falling rapidly.

M&PL divisions manage a number of different insurance products including management liability (D&O), professional liability (E&O), employment practices liability (EPL), fiduciary liability policies, cyber, etc. In 2023 and into 2024, a big influence on the marketplace has been the extremely aggressive and softening public company D&O market.

Though these rates have been softening for management liability, that may change over the next few years as companies continue to adjust their business models motivated by economic uncertainty. Layoffs were up nearly 200% last year, Forbes reported, even as other recession indicators, like the inflation rate, improved. A recession could lead to an increased claim activity and force carriers to raise rates.

“Whenever there is a meaningful downturn in the economy, we tend to see claim frequency pop up,” said George Schalick, Jr., senior vice president of the Management and Professional Liability Division at Philadelphia Insurance Companies (PHLY).

With continued fiscal uncertainty, businesses potentially already burdened with pandemic-related claims should seek a carrier with a long history in M&PL products. They will provide much-needed risk management guidance and be better positioned to support their insureds during market fluctuations.

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.

The 2019 Fine Arts Power Brokers

Kierstin Johnsen, Account Manager, Risk Strategies/DeWitt Stern