The 2019 Utilities Power Brokers
Jonathan Ball, Managing Director, Marsh
“We started putting our general, umbrella and excess liability into a captive in 2017,” said one manager of risk and insurance. “It should not have been difficult but our carrier really struggled with how to handle the paper.
“We talked to them about it months in advance and every time we spoke with them they wanted it handled it a different way. So for our 2018 renewal [Marsh’s Jonathan Ball] got the carrier to issue their paper under our captive’s name.”
The benefits are significant, the risk manager detailed. “The captive does not have to issue a complicated GL policy with loads of endorsements. The markets above in the excess tower recognize the coverage form and it makes it easier for them.
“Our upper management can trust that terms and conditions are known and negotiated with the carrier and yet have our captive name as insurer.”
In a benefit to a broader segment, the risk manager added, “I have heard from the carrier that Jon’s efforts are likely to help it offer similar programs more readily to other insureds. Jon was instrumental in helping lay a path of paper that others will likely benefit from in the future.”
For another client, “Jon evaluated each of our assets this year for unique inherent risks particularly in the area of general liability,” said the company’s risk manager.
That client saw its risk profile and premiums reduced.
Clifton Chan, Senior Vice President, Marsh
“Cliff faced two huge obstacles with our 2018 conventional property renewal,” said one insurance manager. “One of our units had suffered a large loss, one of the largest claims we have ever had.
“Beyond that, several incumbent markets have taken on initiatives that put much of our existing capacity at risk.”
Marsh’s Clifton Chan “went to work early and mapped out a plan that would provide us with as favorable terms as possible and minimizing the rate increase,” the insurance manager said.
“Cliff was able to deliver on the plan and ensure we had the coverage we needed at a reasonable price.”
Not content to place one tough renewal, Chan took up another.
“On our last renewal, Cliff was proactive in reaching out to the markets early in the renewal process to get a read on what they were seeing in the wake of the major storms Harvey, Irma, and Maria [HIM],” said the insurance manager.
“He was able to identify what concerns the carriers had for our upcoming renewal and set a course on how best to address those concerns. Cliff was excellent in bringing us up to speed on the state of the market and managing our expectations and those of our senior management.
“Cliff was able to minimize the impacts of the HIM storms and open claims from the previous year by setting up meetings with our insurers and our internal teams,” the client said. The entire program was renewed en masse.
Mike Gaudet, Managing Director, Marsh
“Mike has helped us tackle a very difficult and unusual cyber situation whereby we operate another company that is a public entity in another state,” said one insurance and risk manager about Mike Gaudet.
“Most coverages are purchased entirely separate for this entity per our operating agreement. However, we were at a loss for how best to handle this convergence of ownership, operations and systems when it came to the IT operations of the entity.
“Mike worked with our senior leadership,” the manager continued, “the public entity’s senior leadership, and ultimately the insurance carriers to create a clear understanding of how this exposure could be addressed and to make sure there were not any insurance gaps for cyber.
“With a dedicated sublimit for the public entity’s exposure and an endorsement detailing the coverage itself, both companies were happy.”
Another insurance director reported that “Mike worked to improve our cyber form, adding new coverage. We are a regulated utility that makes frequent use of the industry mutuals. He also got all three insurers to work together to move from a tower to a pro-rata share of our coverage.”
A third client took a different approach to its renewal, opting to move from a layered insurance tower to a quota-share program.
Christine Palomba, Senior Vice President, Aon
“We recently significantly increased our limits, as many operators in our sector are doing or at least looking at doing,” said one director of risk management.
Fortunately, he said, Aon’s Christine Palomba “was able to pull together large blocks of capacity at reasonable terms and conditions. “Further, she was critical in restoring a relationship with a carrier that had been broken for many years. That was no small feat.
“One of Christine’s greatest strengths is her ability to drive consistency throughout the tower. Any risk manager who has suffered a large loss knows the value of such consistency.”
Another client, a manager of risk and loss prevention, said: “Christine is gifted when it comes to facilitating understanding and agreement.
“She was able to assist us in reaching a named-insured change across multiple lines and carriers in the middle of our coverage year. And she did it with no hiccups.
“Christine also analyzed the potential benefits of moving from a self-insured to a high-deductible workers’ compensation structure based on premium and staffing changes.”
The client said, “Christine set up calls with key underwriters and personnel at our company to talk through the change with each carrier, assuring no one had any concerns. She then provided the affirmative change to any carriers that balked at a mid-year change.
“Christine talked to multiple markets and obtained cursory quotes for moving to a primary program,” said the client, who opted to stay self-insured.
Michael J. Perron, Power Generation Lead, Willis Towers Watson
“We own and operate a large cogeneration power plant built nearly 30 years ago,” said one company president. “The generator was working fine, but was old and recommended for replacement.
“A test led the manufacturer to recommend replacement of the stator, which we chose not to do for economic reasons. The property insurers wanted to exclude coverage associated with it. However, most policies tie [generators and turbines] together in their exclusions, so our carriers intended to exclude the turbine as well.
“The turbine is by far the most important piece of equipment in the plant, and we would not purchase insurance if it were not covered.”
The client lauds Willis Towers Watson’s Michael Perron for working with third-party engineering companies and underwriters “to ensure that all parties understood the exposures.
Most carriers initially would not provide coverage for the turbine, seeing the generator as ‘bad.’ However, Mike and his team were able to demonstrate that the turbine is not directly coupled to the generator.
“Thus, it was unlikely that a generator event would impact the turbine. Further, they challenged insurers to name one generator event where a similar test finding led to a turbine event, and those polled could not. Ultimately, several insurers agreed to provide the needed coverage to the turbine.”
For another client with an outstanding claim, Perron got coverage with only a modest premium increase.
Ross Wheeler, Regional Managing Director, Aon
“We had a challenging year,” said a manager of insurance, “which has provided ample opportunity for our broker to shine.
“One subsidiary declared bankruptcy. When that type of catastrophic event is on the horizon, the stress and anxiety for leadership is nearly incalculable. D&O liability rapidly came to the forefront as questions regarding coverage, potential claims, and scenario planning came in rapid succession.
“[Aon’s Ross Wheeler] and his team made themselves constantly available, even at strange hours, and demonstrated their knowledge and expertise consistently.
“Ross, in particular, provided excellent guidance and demonstrated a great amount of agility and thinking outside the box to allow us to plan well in advance for some of the potential pitfalls we would eventually face.
“Ross has always delivered on the blocking and tackling of our renewals, but this year he demonstrated his true value, helping us navigate some unknown and quite frightening waters with confidence.”
Another client had emerged from bankruptcy several years ago, and then was acquired. There remained pending litigation and outstanding D&O claims that made renewal extremely difficult. The client credits Wheeler with being able to secure coverage in a matter of days, and at favorable terms.
In particular, he changed their access points for engaging all markets.