Clients’ Secret Weapon
Clients can’t help but rave about Chris Demetroulis of Arthur J. Gallagher’s transportation division. One client, a maritime energy and logistics services provider, was suffering through a situation where its auto workers’ comp policy carrier was in liquidation — and the insurer kept $800,000 in collateral. That’s serious money for any business. Broker after broker tried and failed to get the money back, but after “grinding away” for months, as the client said, Demetroulis was able to return that money to the hands of his client company.
But it doesn’t stop there. For Western Dairy Transport, he was able to secure coverage against a claim that some of the milk it transported had black specks in it — even though it was moved in clean, stainless steel trucks, and Western Dairy couldn’t find any evidence of the black specks. They reached out to Demetroulis, who secured “protection that several other brokers claimed didn’t even exist,” said David Shelton, CEO of Western Dairy.
If that weren’t enough, Demetroulis moved the company’s workers’ comp program to a captive, saving 25 percent on a $7.5 million bill. “He’s one of my trade secrets,” said Shelton. “He’s probably the sharpest guy I’ve seen in this space and we’ve been very fortunate to have him on our team.” Another client said that Demetroulis takes the time to understand their business rather than “trying to cram us into a neat package to make it easy on him.” Instead he “takes time to understand how we function and works with underwriters and partners to tailor programs to fit us — not the other way around.”
Putting a Program Back on the Rails
A major rail company faced the harsh reality that one of its trains had derailed, leaving several people dead and hundreds injured. It just so happened to occur at the time the rail company was working through its request for proposal for its insurance program. So who did they call when times got tough? Joseph Peiser, head of casualty broking at Willis Towers Watson, who succeeded the incumbent broker. Thinking creatively, Peiser led a cancel-and-rewrite of the insurance program and took the rail company on a “whirlwind tour” to update markets on its safety improvements, according to a company representative.
Although Peiser had to carefully navigate plenty of difficult negotiations, he was able to construct a deal where losses from the derailment fell on the old policy and a new policy started with fresh limits. It led to premium savings of $15 million over two years compared to the reinstatement option.
“We were in an uncomfortable position. Nobody wants to have claims as large as we did. Joe gave us a level of comfort with his ideas to change the way we structured our insurance program — and we did some very courageous things,” said the rail company executive. “Had we not aligned ourselves with Joe, we would have faced a $25 million additional expense and would have been at risk for having our casualty insurance program either reduced or eliminated by our insurers.” In summation, Peiser turned a very difficult situation into premium savings and better carrier relationships, the client said.
Bringing Energy and Enthusiasm
With taxpayer money on the line, public transportation companies must be nimble and need brokers that can get them the best deals and coverage possible. One public transit company had a particularly difficult renewal in the wake of Superstorm Sandy, after it suffered a $300 million loss and markets were being understandably reactionary. So they called on Tricia Piccinini of Aon, who had particularly strong relationships with insurance markets.
She was able to combine the complex policy’s 30 different carriers onto one form, and it led to a 9.2 percent increase in the value of coverage combined with a premium decrease of 12.4 percent — amounting to a savings of more than $1.3 million. Another client, Juliana Keaton, president of CSX Insurance Co. called Piccinini “a ball of energy” and said “it’s so clear she loves what she’s doing and cares about her clients.” Keaton also said.
Piccinini is among the most responsive brokers she’s ever dealt with, one time taking her call while on a trip to Germany without a single complaint or fuss.
“She’s very consistent and very responsive. Sometimes we have situations that are very urgent and even though she travels frequently for work, we don’t ever worry about trying to reach her because she’s always available,” said a client.
Piccinini also works to understand her clients’ business, not make her own commissions. “You don’t hear, ‘you should really spend the money’ and never feel like she’s missing out on a sale,” said Keaton. “Plus, she has an infectious and incredible laugh.”
Crunching the Numbers
Clients say that you’d be hard-pressed to find a broker who’s better with numbers or more creative than Tony Reynolds of Marsh. For a truckload carrier, Reynolds was able to create a three-year policy where the client could retroactively cancel the policy and get premium dollars back if there were no big losses. It was a win-win for his company and the insurer. “We have a lot of skin in the game with this plan but the insurer is still guaranteed to make money.”
Reynolds said that such programs achieve cost savings of 50 percent or more versus conventional policies and risk no more than 15 percent above the cost of conventional premiums if claims costs are much higher than expected. An executive at the truckload carrier said he was impressed with Reynolds’ depth of industry knowledge.
“Tony is more of a finance guy by trade,” the client said. “I picture him in a basement somewhere working out complex math problems on graph paper. He’s brilliant and fantastic with numbers. He’s just so intelligent that when he speaks everyone is engaged whether a front-line analyst or a CEO or CFO. Tony can speak the language.”
For a multinational trucking company, Reynolds adjusted a multi-year program that was in its second year, providing the client with a 7 percent premium reduction. “It was Tony’s creative ideas and ability to work with the insurance carrier that created the savings for our organization,” the client said. “Tony’s understanding of complex structures allows him to guide the carriers into structures that are beneficial to all parties involved.”
Digging Deeper Into Coverage
Ask any client and they’ll tell you that Jeremiah White of Aon is nothing short of an expert at the rail business and rail insurance. In fact, he’s frequently tapped to speak at industry conferences because he’s such an authority on the subject. A problem-solver by nature, White prefers face-to-face meetings with clients rather than communicating via phone or email. An executive at a railroad operator called White “the best of the best” because he “has a clear understanding of our distinct needs, and always offers high-value solutions at a cost savings.”
For a large railway company, White was concerned that it didn’t have adequate insurance coverage for contractors working on its property. Previously, the company had been depending on the contractor to provide evidence of insurance and had no way to know whether the contractor’s coverage would actually protect the rail company in the event of an accident.
Sure enough, White dug into the policies and identified plenty of exposures. So he created a blanket coverage policy to cover those risks — and even got them at a discounted rate. For another rail company, White was asked to intervene when the company felt it was being forced into buying new lines of coverage to secure a deal with a Canadian landfill company.
But White was able to use his expertise and powers of persuasion to show the landfill owner that the company did, indeed, have proper coverage — saving his client a lot of money and aggravation.