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Digital EditionOne Year and a Blank Slate: How Josh Jeffers Assembled a Multibillion-Dollar Spin-Off’s New Insurance Program
In June 2023, North Dakota’s largest publicly traded company, MDU Resources, spun off a new business: Knife River Corporation. While MDUR focuses primarily on the energy and utility sectors, Knife River is focused on sales of aggregate and Department of Transportation contracts.
When it came time to assemble Knife River’s insurance program, Josh Jeffers, the new director of risk management, was given one year and a blank slate. The stakes were high: Knife River would have a large fleet, operating companies in 14 states, and roughly $3 billion in annual revenues — and the soundness of Jeffers’ new risk strategy would be a make-or-break factor in the spin-off going through.
“We had to build the insurance program essentially from zero,” Jeffers said. This included “building a GL tower and getting workers’ comp coverage and D&O and all the financial and professional liability lines. All the policies that you would imagine a large corporation having, we had to place those from scratch, because Knife River had never been an individual company, and it never had individual policies.”
“We had to build the insurance program essentially from zero … We had to place those from scratch, because Knife River had never been an individual company.” —Josh Jeffers, director of risk management,
Knife River Corp
Besides these 40-plus new policies, Jeffers also had to contend with new corporate leadership, new insurance carriers, a new captive and even new brokers: “Not only did we need a whole new market in almost every aspect of our company, but we also needed new brokers, because the brokers [we had] were experts in the energy market, not the retail market. So, we had to get a whole new team.”
To tackle this seemingly insurmountable task, Jeffers began by convening a retreat with his team and brokers at Marsh, where they hashed out all the things that would need to be in place a year later, line by line.
They then put together a profile of the new company and went to market. “The idea was to package as much information as we could and get it to as many eyes as we could,” Jeffers said. “Then came the more formal underwriter meetings. I think we had over 40 markets on one call alone.”
Auto liability proved to be a particular challenge, but the new captive proved useful: “The huge burn layer, we took into our captive. We’re keeping that volatility out of the market, and we’re keeping it for ourselves in a good, efficient way.”
Improving on that efficiency is an ongoing process: “I’m always impressed by Josh’s historical knowledge of his company and insurance program,” said Robert McDonough, U.S. construction practice leader at Marsh. “[He’s] always coming up with innovative solutions on how we can collaborate to create a more efficient risk management program.”
One year on, Jeffers is satisfied with the results: “I feel like the program that we have in place is really good, really effective, and efficient for what we spent.” &
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