2018 Power Broker

Traditional Energy

Negotiating in the Nick of Time

Robert Battenfield
Senior Vice President
JLT Specialty USA, Houston

“We recently switched our broker of record to JLT primarily due to Rob,” said a treasury official at one client.

“He had some great ideas on how to improve our insurance program. One specific item he proposed and we implemented was adding our terrorism coverage back into our property policy and ensuring the CL380 exclusion was removed. That enabled us to increase our coverage while decreasing our exposure to cyber terrorism.”

The company is in a high-profile industry sector, and the client had a separate terrorism and property program. This created a potential gap in coverage for a multi-billion dollar facility because of a complete cyber exclusion on the stand-alone terrorism option.

Battenfield, JLT’s downstream energy leader, went to the commercial market and secured a limit three times as high as the previous one. He also achieved full terrorism coverage for resultant damage from cyber for less than the cost of stand-alone coverage.

Advertisement

Negotiations for the revised and expanded coverage took place even though the client was still within the timeframe of a two-year contract.

Separately, a large developer was remediating a brownfield site for a specific environmental condition before construction and redevelopment could begin.

Battenfield was able to place a comprehensive pollution program for the project, crucial because once the remediation work began, the contamination was found to be more extensive than originally estimated.

Diving Deep to Find Savings

Andy Bullock
Senior Vice President
Marsh, Boston

Andy Bullock’s specialty is large-scale, high-capital projects in heavy industry. “Andy coordinates our project-specific insurance placements across all of our business lines, including oil, gas, chemicals, industrial, infrastructure and power,” said one client.

“These projects typically range in value from the hundreds of millions to the billions and are very complex, with many involving several joint-venture partners. Andy is able to navigate through a voluminous amount of material on these proposals and provide a more concise picture for the insurance markets.”

“Most recently Andy was able to provide valuable insight on ways to reduce premium costs on a coverage extension for a large project. His attention to detail when accumulating our project information led to a substantial premium savings of roughly a million dollars.”

In another big-ticket effort, the senior vice president of finance at a large client said, “Earlier this year, Andy worked extensively and tirelessly in helping us set up an owner-controlled insurance program for a $1 billion project.

“He provided expert guidance on structuring and implementing this plan and was able to squeeze substantial premium savings from several carriers.”

The SVP added, “We continue to rely heavily on Andy for a broad range of advice and guidance on the various complex insurance issues regarding the development project and also on a number of corporate risk management issues.

“I have been impressed with Andy’s willingness to take the deep dive on complicated issues … and his friendly demeanor.”

Showing Regulatory Savvy

Logan Couch, ARM
Vice President
Aon, Houston

“I am the only insurance and risk manager for a company outside our home country, and I have no local staff,” said one of Logan Couch’s energy clients.

“Logan helped us achieve double-digit rate savings on the energy package program for the third straight year. He placed our program for less than a third of the premium we paid three years ago, and we added more coverage, more limits and more assets.”

The client has on-shore and off-shore operations across North America, so the program includes different national jurisdictions. The company also added some assets as the result of the financial distress of a previous owner, further complicating the placement.

“Logan was also instrumental in helping us provide satisfactory forms of evidence of financial assurance in several instances,” said the client.

“One was an off-shore regulatory requirement. That saved us from placing letters of credit or bonds, which creates substantial savings to our enterprise.

Advertisement

“The other was instrumental to our providing assurances to trustees and regulators involved in an acquisition of assets from a distressed company. That made the transaction a reality.”

The risk manager also credits Couch with reducing the client company’s bond premiums with one surety, “which will create substantial savings over time.”

The risk manager also gave Couch the nod for providing insight and guidance on “dozens of requests for vendor contract reviews.”

Meticulous Attention to Detail

Lisa Harris, ARM
Senior Vice President
JLT Specialty USA, Houston

“We brought JLT on mid-term, and Lisa was still able to achieve significant rate reductions with existing underwriters by negotiating substantial credits for idle assets,” said the general counsel at one client. Lisa Harris added real value with her dedicated representation of her client’s interests, while maintaining a constructive relationship with underwriters.

The counsel added, “Lisa displayed a meticulous attention to detail and forward thinking and planning along with an impressive work ethic. She was able to reposition our premium structure to better protect the company against an anticipated tightening market while still achieving impressive rate reductions.

“She was able to help our company from both a cost and administrative standpoint. Lisa also showed a detailed knowledge of coverage and policy wording and applied her knowledge of our business to better position the company’s scope of coverage.”

Another client lauded Harris for her tactical skills in helping to close an asymmetrical acquisition for his firm.

“We completed an acquisition of a much smaller firm, and we saw that their pricing and terms were significantly different from ours. There has been a dramatic downturn in the offshore market, but Lisa’s ability to differentiate us in what has become a small industry is very important.

“The sector has become not the most palatable to underwriters, but she has gotten us in front of the markets and gotten them to come out to our facilities.”

Enabling Global Growth

Mary Russell
U.S. Chemical Practice Leader
Marsh, Morristown, N.J.

“Our company made an acquisition that tripled our size and transformed the company from a domestic company to a global one,” said the director of insurance for one of Mary Russell’s clients.

“Mary worked with us to understand the scope of the new company and redesigned each of our insurance programs to be global.

It has been a huge effort in 2016 and 2017. With her help, we have a smoothly running insurance program supporting our growing company.”

The director detailed several specific wins. “We started producing 16 new materials. Mary analyzed the risks associated with those and summarized the programs that we had to mitigate those risks. That information was shared with underwriters.”

With the new loss portfolio, and the financial strength of the new company, Russell supported a decision for substantially higher retentions appropriate for a larger company.

Advertisement

“We increased our retentions by a factor of five based on financial and actuarial analysis provided,” said the client. “We were also able to increase limits. Given the analysis of risks and financial strength, Mary assisted us in increasing our limits consistent with a substantially larger corporation.”

Russell also implemented foreign coverage for general liability, cargo, D&O and employers’ liability, as well as miscellaneous exposures.

“Mary assisted us in evaluating the regulatory insurance requirements in 25 countries. She helped us set up our internal system to administer the program.”

Persevering in the Face of Catastrophe

Christopher Shorter
Senior Vice President
Aon, Houston

The severe hurricanes late in the 2017 season figured large in several brokers winning their laurels for the year. In this case, Shorter had already been asked by a new client to seek a premium reduction of 15 to 20 percent.

The renewal date was just a few weeks after one of the big storms hit, leaving the region flooded. Both Aon’s and the client’s offices were closed for a protracted period. The client credits Shorter and the firm with persevering despite the loss of mobility and, in some cases, power.

The third leg of the stool was the market, and the client also credits Shorter for his close relations with underwriters to keep them on task for the renewal, meeting with insurers wherever and whenever they were available. That simpatico drew from his prior experience as an underwriter.

Under these circumstances it would have been an accomplishment to close the deal and bind the renewal in time regardless of the costs and terms. But Shorter was able to do those things and still achieve the premium savings that the client sought.

The risk manager at another client testified, “Chris has been working in our account for a few years, and this year in particular, he was able to negotiate a good price and better market alternatives for our program renewal.

“Chris is a great resource, and we utilize him for special projects all the time. Also in 2017, we worked together on a new construction project in Texas, and Chris was instrumental in the placement of the insurance program.”

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

Advertisement




That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

Advertisement




Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]