The 2019 Retail Power Brokers
Kenneth Branigan, Senior Vice President, Marsh
One of Kenneth Branigan’s recent challenges included devising a new approach to CAT risks for a client with more than 1,000 North American locations. Many are vulnerable to windstorm, flood and earthquake (WF&E), and 2017 saw three outlets suffer storm damage.
At renewal, Branigan’s team negotiated a global marine cargo stock-throughput program to cover inventory in transit, at warehouses and at stores, with robust WF&E coverage and lower dollar deductibles.
For another client with global operations and D&O liability cover in various countries, Branigan and colleagues briefed the company well before renewal on compulsory requirements and industry best practices for each country.
A third client held multiple policies with three brokers in two states. With 30 percent annual growth, the company had outgrown its risk management program and broker service model. A redesigned program eliminated overlapping/duplicate cover, replaced three brokers with one and reduced total cost of risk by 5 percent.
“We needed a broker to help consolidate all our coverages under one umbrella,” said Dave Schroeder, CFO for Luna Grill Restaurants, which has grown from a single outlet in 2009 to nearly 50 today.
“In addition, we needed a thorough review to ensure we were properly insured. Ken and team came back with suggestions based on our current needs, future plans and industry norms. While a process like this is never easy, they made it as seamless as possible.”
Christian Ford, Chief Operating Officer, Aon
When Aon’s Christian Ford reviewed a client’s program, what he found wasn’t good: 11 open or pending claims dating back three years. Further analysis revealed that while each claim was partially settled, several outstanding issues — one common to nine claims — put $1.6 million at risk.
The issue had previously been referred to both an independent adjuster and a forensic client, who were both adamant no payment would be considered.
Ford persevered, setting up a meeting between the client and the panel of insurers on their program. This outlined how lost revenue being claimed was earned and why it was integral to the business. A week later, there was little sign of concession.
However, follow-ups with each individual insurer and a series of discussions ultimately achieved a breakthrough. Eventually the client collected around $800,000 and put the nine open claims behind them.
“Chris takes practical approaches to claims resolution,” said Julie Flannagan, global risk management director at glass-bottle producer Owens Illinois. “Claims can involve supplying mass amounts of data and support. Chris is able to bring the conversation out of the details to a level where a reasonable discussion is able to take place with insurers.”
Said a risk manager: “Chris was an integral part of the claim team in the insurance recovery by the Virgin Island Port Authority from hurricanes Irma and Maria. He has the ability to view insurance claim issues with an unbiased approach, viewing both sides.”
Cabot Lyman, Broker, Aon
Hurricane Maria devastated retail outlets, including those of a specialty name in apparel and personal care. With $20 million-plus in losses, its February 2018 renewal posed challenges for Aon’s Cabot Lyman. Yet hard work and an early start saw expiring terms and conditions maintained, with just one single-digit rate hike.
“Cabot fostered early and regular update meetings with our insurance partners to promote transparency and collaboration, while setting reasonable expectations for stakeholders,” said the company’s VP of risk management.
Drugstore chain Rite Aid already experienced challenging property renewals after losses from Katrina, Sandy and civil unrest in Baltimore.
Matters were further complicated in 2015 when rival Walgreens mounted a bid. After regulators vetoed the deal, Walgreens secured permission to acquire 1,932 Rite Aid stores and Aon returned over $1 million of premium.
Last February, amid the renewal process, Rite Aid then announced a merger with grocery chain Albertson’s. Despite the uncertainty, Aon renewed the program with incumbent markets on expiring terms and conditions and a 20 percent-plus premium decrease. The merger was ultimately rejected by Rite Aid’s shareholders.
“Cabot was a stabilizing force in a series of complicated renewals,” said the company’s VP of corporate social responsibility and risk management. “Her in-depth knowledge of our account and dogged determination helped us achieve favorable results under challenging circumstances.”
Neil Slattery, Managing Principal, EPIC
Global retailer Toys ‘R’ Us declared chapter 11 bankruptcy in September 2017. Neil Slattery quickly realized communication would be vital, as stores closed, foreign subsidiaries were spun off and contacts left the company.
In addition to regularly updating underwriters, claims adjusters, local brokers in foreign territories, loss control engineers and captive managers as the company wound down operations, Slattery had to respond to a changing risk profile as the risk management team shrank and bankruptcy lawyers and administrators moved in.
As renewal loomed, uncertainty meant the team didn’t know whether to place insurance coverage until three weeks prior to the expiration date. The program was no longer an operating multinational retail chain, but 450 vacant stores and distribution facilities — an unappealing prospect for most insurers. ‘
One of the incumbents initially issued a non-renewal, but after lengthy negotiations, it agreed to offer competitive terms the insured found compelling. Slattery revamped the program, making provisions for future developments over the next 12 months. This included negotiating time element coverage for any location sub-let before it was sold.
“Neil was instrumental in transforming our property program by delivering consecutive years of double-digit rate decreases while broadening coverage,” said a risk manager. “Not only is he an effective broker, but he is also personable and extremely responsive.”
Kyle Sliwerski, Senior Vice President, Lockton Companies
A major U.S. motor trader has traditionally carried several open-lot policies covering its dealerships, each written on a 100 percent single carrier basis and placed with a different market.
“Given the heavy losses this sector has seen over recent years, improvements to these programs would be difficult in both pricing and terms,” noted Mike Andler, property practice leader at Lockton Companies.
Nonetheless, colleague Kyle Sliwerski and his team rolled up their sleeves and got to work. Sliwerski employed Lockton’s analytics team to perform predicative analytics with RMS/AIR and an exhaustive loss analysis drilled down to help assess CAT limits.
The next challenge was to consolidate these programs into one master placement.
“After approaching more than 125 markets, we actually ended up being overlined in capacity — impressive considering the lack of generally available capital in this space,” added Andler.
Moreover, in a harder market, Sliwerski managed to minimize the impact on pricing and terms by signing markets from the U.S., UK, Bermuda and elsewhere to a large shared and layered program. The dealership now has leverage back on its side and is well primed to embark on captive development and/or a large self-insured retention.
The insurance and claims manager for a corporate client said: “Kyle provided detailed analytics during our pre-renewal strategy meeting that showed concentration of risk of our [earthquake and flood] exposures. This information helped determine appropriate limits and deductibles and assisted us with making decisions on future real estate endeavors.”
Kristi Whistle, Senior Vice President, Marsh
Marsh’s newly-launched Restaurant Center of Excellence team is led by Kristi Whistle, a two-time Power Broker® award winner. Whistle’s team assisted a retailer whose acquisition more than doubled annual revenue.
Combining the insurance programs meant evaluating self-insurance; and analyzing deductible structures, buying styles, years of stacked collateral arrangements, limits and carriers, as well as claims management and risk avoidance techniques — and it all had to be done in a few mere months.
In addition, due diligence omitted substantial details around open claims and litigation that impacted forecasts and savings projections.
Yet analytics and education, with working closely and communicating, enabled Whistle’s team to build a right-sized program for the combined company. The new single program achieved premium savings of 15 percent ($1.5 million) and will sustain itself as the company continues to grow and acquire brands.
Natalya Harvey, senior risk manager for Cooper’s Hawk Winery & Restaurants, said: “Kristi has been an absolute joy to work with. She truly cares about her clients and works diligently as an extension of their risk team.
“This past year, she presented offshore punitive damage options to eliminate gaps in our umbrella tower, facilitated our first stewardship meeting with the casualty carrier and was the driving force in securing a property renewal option for a minor increase of 5 percent.
“After Harvey, Irma and Maria and our continued growth in Florida, this was a nice win!”