The 2019 Traditional Energy Power Brokers
James Bennett, Vice President, Aon
“In the second half of this year, we had many changes. [We] spun-off one business segment into its own public entity,” said one risk manager.“ Then, just a few weeks later, we were purchased by a major global corporation.
“To meet all contractual requirements, we had to develop and obtain a stand-alone program for the spun-off company and also develop and obtain a new insurance program for the remaining business unit.
“James consistently came up with solutions to various issues, maintained excellent professionalism in very stressful situations and delivered on placing two excellent programs for two very different business units.”
One manager of insurance and risk in pipelines and processing noted, “With the limited available markets in the primary midstream segment, we have been able to replace some old carriers and configure our primary policy with London markets for savings.
In 2018, James was able to get us a 10 percent rate decrease for our workers’ comp program and an overall 5 percent rate decrease for our excess tower.”
The key was a total-cost-of-risk approach. Given the client’s recent claims history, Bennett was able to develop credible loss forecasts for the client’s primary casualty programs. He proposed two unique alternative structures for the client’s excess liability program to improve the pollution coverage, which was most relevant to the operation.
During the renewal the client used this analysis to decide to increase retentions to save over $1 million in premium.
Paul Chircirillo, Senior Director, Willis Towers Watson
To put Paul Chirchirillo’s 2018 accomplishments into context, one manager of global insurance had to summarize a difficult 2017.
“Our property and business-interruption placement has $2 billion in limits. Our 2017 renewal was severely impacted by the three large hurricanes, Harvey, Irma and Maria.
“Even though our company has not had a property loss in over 10 years and the commercial markets do not provide windstorm coverage, our renewal was caught up with several carriers using this opportunity to achieve rate increases.”
Because the client buys very large limits, there wasn’t much capacity to replace tough carriers: “Rate decreases were non-existent and most accounts experienced rate increases upon renewal. Prior to our renewal in second half of 2018, Paul devised a strategy that allowed the market to recognize we overpaid in 2017.
“We were successful in obtaining a premium credit in 2018, remarkable in a market with no rate decreases. Paul devised a strategy whereby we renew the policy for 54 weeks, but markets only receive premium based on [a] 52-week policy.” All markets accepted. Not one left the account.
“We have a very large property program that is placed as a quota share and is competitively priced,” said one director of risk management.
“This year we anticipated an increase of some degree as that’s what the market was indicating. However, our pricing remained flat, and Paul got us a multi-year program out of it. So we are guaranteed stability on our program for three years out now.”
Gavin Hurd, Managing Director, Marsh
“Gavin led us through a very complicated builder’s risk loss at one of our major construction projects,” said one director of risk management of Marsh Wortham’s Gavin Hurd.
“That loss involved not only property damage, but [also] business interruption and extra expense components that were very difficult to prove and settle with insurers. Gavin’s knowledge of the policy … was tremendous. In the end, we recovered almost every dollar we were claiming.
“Further, Gavin has been instrumental in helping us price insurance for multi-billion-dollar builder’s risk and marine cargo projects in multiple countries. His understanding of the market and contacts with key underwriters and wholesale brokers enable him to simplify and expedite the complicated process of pricing coverage.”
Another client is building a multi-billion-dollar energy processing facility in a developing region.
“In 2018, we placed an early works insurance program, presented proposed insurance programs to partners and lenders, negotiated lender terms, negotiated a litany of agreements, worked through government and local content issues, created the final program budget and completed coverage analyses. Gavin was integral in each of the above activities.”
Following a large loss at one of another client’s facilities, Hurd identified a material time-element issue for property that had not been damaged, said the risk manager. “Because Gavin is so familiar with both our operational and construction insurance placements, he presented his findings to us.”
Jilian Rossow, Vice President, Marsh
Although her clients laud her customer service and her industry knowledge, Marsh’s Jilian Rossow wants to be known first and foremost as a team player.
“My clients and my colleagues are my ‘team’,” says Rossow.
But even given that, her clients still single her out for praise.
“She has proven to be very nimble,” said one client.
When our underwriters pushed for more premium, because we have grown and our payroll has increased, she countered that at the same time our claims have gone down.”
In the end, the client said Jilian Rossow was able to achieve a significant premium decrease of 30 percent for their excess tower, even though the company’s payroll increased 40 percent.
Often clients with losses face a double whammy of claims and then renewal. “We were faced with a very difficult renewal because of several adverse events this past year,” said one director of treasury services and risk management.
“Jilian and her team developed a contingency plan of viable alternatives as a fail-safe for the renewal and then guided us through the challenging discussions with carriers.
“A lot went on behind the scenes between Jilian and her team and our underwriters, but in the end, a win-win result was achieved. Jillian pays great attention to detail on our renewals and is also very responsive when claims and coverage questions pop up or when we need input regarding indemnity provisions in our contracts.”
Austin Sims, Vice President, Aon
“In 2018, we certainly got superior service from Austin Sims,” said a director of global insurance.
“He was able to manage the cost of our property damage and business interruption program in the aftermath of Hurricane Harvey claims … and keep away the premium increase we expected and realize a five percent reduction while locking in part of our program for two years.”
Another director of risk management and insurance said, “Austin’s 2018 accomplishments have been nothing short of outstanding. He developed a new rating methodology for new assets to allow for lower rates at non-CAT locations instead of simply adding them at the composite account rate.
“One of our programs was renewed with a 32 percent composite rate reduction from expiring; 150 percent capacity available, including replacement option [not taken up]; and policy limit increased from $66 million to $75 million.”
Sims worked hard for their affiliates, added the risk manager: “We purchased a large hangar at the airport, then acquired a large ocean marine service company in which Austin was instrumental in at least 25 percent pricing improvements over the existing programs.”
Another client is developing a $300-million marine terminal: “In the engineering, procurement and construction, some gray areas are included,” said the treasury manager.
“Austin took us by the hand from the start, explained and identified the potential risks, helped us with the mitigating strategy and explained to us the differences between a contractor-controlled plan and an owner-controlled plan.”
Lee Snelgrove, U.S. FINPRO Energy Industry Leader, Marsh
Most energy brokers specialize in one segment of the industry, but Lee Snelgrove was lauded by clients upstream, downstream and in the services sector: “When Lee and his team at Marsh were hired as our new broker, our company had experienced a major organizational transformation that dramatically changed our risk profile,” said one chief risk and compliance officer.
“The team took the initiative to learn our company history and evaluate the complexities of our program. Their efforts resulted in the simplification of our insurance program structure, reducing risk management’s impact on the business.
“We saw significant premium reductions, policy language enhancements, lower retentions and other cost savings this year.”
Another risk manager said, “Our company was part of a merger in 2017 and that made for a completely different renewal cycle in 2018. On the back of placing the runoff coverage for our previous company, Lee had to get all incoming members of the board comfortable with the new program.
“He was also part of the coverage counsel that scrubbed our previous program. Then [he] enabled us to minimize the cost and complication of outside counsel.”
In another case, Snelgrove won the business of a major producer for directors and officers, as well as fiduciary insurance, by promising a significant premium savings and coverage improvements across all financial and professional lines.
At the 2018 renewals, he was able to beat the pricing targets comfortably and achieved overall premium savings in excess of 40 percent.