Building Upon Strengths
Craig Graham secured an unheard-of deal for a contractor that was building a tunnel underneath a rail yard for a railroad, while simultaneously constructing several high-rise buildings that rested on a platform over the yard, for a real estate developer. An owner-controlled insurance program covered the building project, but it was not economically feasible for Graham to roll the tunneling project into that program, as the railroad’s coverage demands did not give consideration to the world’s “most difficult” New York construction insurance market.
Graham, senior vice president at Alliant Insurance Services, then convinced the OCIP carriers to also participate in a “relatively affordable” contractor-controlled insurance program for the tunnel, by demonstrating how the contractor could enhance safety on both projects, and how claims management could be coordinated.
“Craig Graham crafted some really creative solutions to the more problematic markets, such as New York State with its challenging labor laws,” said Bill Buchan, vice president, risk management, at Tutor Perini Corp. “Often the coverages can be very expensive and placing them is a challenge, but he’s been very creative structuring a solution to minimize costs and maximize coverages.”
Graham was able to secure a comprehensive OCIP with “very fair pricing” for the Los Angeles Unified School District, by thoroughly explaining the district’s claims and safety services, said Robert Reider, director of risk finance.
Changing the Game
One of Paul Healy’s clients wanted to bid on construction projects on U.S. military bases in Japan, but the bid specifications referenced the Japan Ministry of Finance approved list of surety companies — which didn’t actually exist, making it impossible for non-Japanese companies to bid on the work. Given the U.S. Army Corps of Engineers was the ultimate owner for these projects and a U.S.-based company with a local office in Japan wanted to bid the work, Healy had to get the agency to change the bid specifications.
To accomplish this, Healy, national practice leader, Construction Services Group at Aon, prompted several U.S. surety companies and their industry trade association to lobby for some political pressure on the Corps’ head office in D.C., to prevail upon the agency’s Japan-based representatives to make the bid requirements reasonable. The agency eventually agreed to change the bid specifications to accept surety bonds from companies on the U.S. Treasury list of approved sureties, in addition to the referenced Japan Ministry of Finance list.
“Paul Healy has been very helpful getting us a bond in Japan,” the client said. “He’s also helped us evaluate various prospective joint-venture partners from a financial perspective.”
“Paul Healy is a strong advocate for us,” said Robert Alger, president and chief executive officer of Lane Construction Corp. “He’s been fabulous to work with and really has the clients’ best interests at heart.”
“Paul was very helpful in placing three new, fairly complex surety agreements for us,” another client said.
Last year, Keith Jurss was hired to help secure a cutting-edge professional liability policy for a Fortune 100 “diversified international family entertainment and media enterprise” that had started to use the integrated project delivery method on its capital improvement projects.
The IPD method, which requires a multiparty contract between the project owner, designer and contractor, incorporates mutual waivers of liability and financial incentives for the parties to work collaboratively to deliver the project on-time and on-budget.
However, because of select contractual provisions, the corporate professional liability policies of the design and construction team would not respond appropriately, thus requiring a project-specific alternative.
Jurss, senior vice president at Willis, was able to help underwriters understand the contractual incentives built into the program, and to convince them that the IPD team was truly committed to working collaboratively. Jurss then customized the project solution utilizing a variety of coverages from select carriers. The result was a solution that gave the design and construction team protection for rectifying design and construction errors without having to bring suit against each other. The solution also incorporated best-in-class professional liability coverage to protect against potential third-party claims.
“The challenging element of an IPD is the lack of a mature insurance marketplace,” the client said. “Since my organization has a very active creative and design process on some pretty unique projects, we had a short timeline to have something in place by May.”
En Route to Top-Notch Service
Jamie Pincus, vice president and account executive commercial at Wells Fargo, goes far beyond the call of duty.
For the Metropolitan Washington Airports Authority — which oversees the Dulles International and Ronald Reagan National airports, the Dulles Toll Road, and Dulles Corridor Metrorail Project in the D.C. area — Pincus helped with the transition of the aviation owner-controlled insurance program and the implementation of a rail OCIP.
On the authority’s projects, Pincus scheduled vendor, contractor and subcontractor information sessions to ensure that “clear, open communication occurs internally and externally.” She has also deployed a Wells Fargo Insurance loss control/safety specialist to ensure protocols are being followed at the authority’s numerous worksites. Pincus and her team provided similar attentive services for the OCIP of the Maryland Transit Administration.
“The scope and size of our projects and the amount of administrative detail is staggering, but Jamie does an excellent job,” a client said. “She’s very adept at coverage analytics and has superior technical abilities.”
For Swire Properties’ Brickell CityCentre construction project in Miami, Pincus advocated for the placement of webcams with 24/7 surveillance and a process to badge contractors for secure worksites. “Jamie Pincus is outstanding — she has been able to put in a very unique insurance program for us and she’s saved us a lot of money,” said David Gross, construction accountant for Swire Properties.
Wells Fargo’s Jamie Pincus is a firm believer that the best insurance policy is the one that you might never need.
“In the construction industry, it’s not just about the insurance placement, it’s about the people working on the construction site, providing a safe environment and seeing something develop that others will benefit from and there must be a business understanding of what our client is looking to accomplish,” Pincus said.
Pincus is a big believer in voice-to-voice communication with clients.
“Email is efficient but a lot gets lost in electronic delivery,” she said.
Pincus serves as a mentor to young professionals, not just handing down instructions but giving them the tools to do their jobs better.
“I lead by example. There is nothing I like better than digging into a policy to learn about what coverage is provided and researching a client’s exposure to have a complete understanding about their risk,” she said.
“I’ll do this as a mentor on a daily basis to demonstrate good service.”
In her community, Pincus involves her family in her efforts to help the less fortunate. Her eldest daughter recently joined her and other Wells Fargo team members to deliver groceries and prepared meals to 77 families in the Washington, D.C. area.
She brought all three of her daughters along for a more recent project, painting and repairing the house of a family in need.
Expertise in Action
One of Susan Schwartz’s clients partnered with two other contractors for a large construction project, but the disparity between the contractors on how to handle insurance for the newly formed limited liability company was holding up finalizing the contract.
To help get the $70 million project started, Schwartz, a director at Aon, discussed the completed operations extension with underwriters, negotiated more favorable coverage and pricing terms, met with the contractors and their brokers to discuss the insurance program, and worked out an equitable broker compensation solution.
Schwartz met regularly with another client to discuss estimates for coverage and pricing of a contractor-controlled insurance program at various loss ratio levels, and detailed the merits of project-specific coverage for various lines including professional liability, pollution liability, builders risk and contractor default insurance, potentially saving the client more than $500,000.
“With short notice, Sue was able to work with my company and team leaders from other companies and brokerage firms to develop a comprehensive strategy and risk solution for a complex joint venture project,” said Kathy Norris, director of risk management at Fred Weber Inc. “Her clear view and analysis of situations coupled with her can-do attitude, professionalism, and her willingness and ability to listen to the opinions of others and share ideas make her a valuable resource.”
“Sue Schwartz is by far the most knowledgeable when it comes to construction issues and coverage,” said Monica Settle, insurance risk manager at Western Construction Group.
Matthew Walsh was tasked to respond to a significant uptick in large, complex construction projects undertaken by both private and public sector clients throughout the world.
Walsh, managing director, brokerage practice leader, global/complex clients, Construction Services Group at Aon, built a unique analytics and brokerage platform to address the risks in these complex global projects, including rapidly changing laws impacting construction risk, geographic challenges from catastrophe, and increasingly complex project delivery methods that blur the lines of responsibility between project owners, designers and contractors. It can be used to address various unique legal challenges in some of the world’s most challenging construction liability jurisdictions, or structured for global responsiveness to a single owner undertaking projects simultaneously.
“Matt Walsh goes above and beyond to meet his clients’ needs,” said Ted Wickenhauser, vice president, risk management at McCarthy Building Cos. “He does a phenomenal job at being a client advocate as well as liaison between the markets and his clients. He is never afraid to confront any challenging situation head-on, take ownership of it and move it toward resolution.”
“Matt is very knowledgeable on construction management, as well as the insurance industry,” another client said. “I also think he’s extremely talented from a people skills standpoint, and he’s highly regarded at all levels of the insurance industry.”
The global upturn in commercial construction is, on the face of it, good news.
But many of our risk management sources caution that there is great risk in this upturn. Geographic challenges in catastrophe-prone areas and rapid changes in laws governing construction risk are just a few of these factors. Aon’s Matthew Walsh has built a unique analytics and brokerage platform tailored to address the risks of stakeholders in complex, global undertakings.
Walsh’s base in his 25 years in the business is Chicago, which as a venue ranks as either first or second in construction liability risk from year to year. He feels he’s learned a lot about the business, which is why he is so passionate about passing his knowledge on to a new generation of brokers.
“What has remained constant is that you need a vast team, with vast knowledge and access to vast resources to deliver in these environments,” Walsh said.
“Going it alone was, and never is, an option; it’s all about our team and always will be,” he said.
“At present, I am privileged to have a talented group of young people recruited from our career development program, and young leaders from the construction risk management community, to develop a new generation of construction risk tools delivered through a web portal environment.”
Young Talent Pushing Forward
Many insurance professionals say they “fell into” the industry. Our Power Broker® winners and finalists under age 40 are no different, crediting their introduction to the business largely to family members who got them an “in.” Their experiences entering and working their way up through the ranks demonstrate both the strengths and weaknesses of the industry, and paint a picture of what the future may hold.
2014 Under-40 rankings sponsored by:
Denton Christner, 36, a Power Broker® in the Gaming and Hospitality category, started working as a file clerk in his father’s Allstate agency as a high school student. He stayed with Allstate through college and eventually became an agent at the age of 21.
After agency consolidation left him and other brokers with smaller books looking for other options, he took a tip from another family member and went the independent route, joining BayRisk Insurance Brokers at 24.
Eleven years later, Christner is vice president and has helped BayRisk build its biggest new business source: a program for food truck insurance. Taking advantage of social media and online marketing, he has used the Internet as a primary sales driver, bringing InsureMyFoodTruck.com to the top of search engine results lists.
“Trying to sell commercial insurance to business owners who are oftentimes 10, 20 or 30 years my senior was very difficult. That was a big obstacle as a young agent, trying to prove my professionalism.”
— Denton Christner, vice president, Bay Risk Insurance Brokers
“It was an amazing experience; totally life-changing,” Christner said. “I pretty much ate, slept and breathed food trucks for 18 months getting it launched.”
Lindsay Roos, 30, and a Power Broker® in the Pharmaceutical category, secured an internship with Marsh as a college junior with the help of a family member. In fact, internships and early training programs are a common thread among our young success stories.
“I interned in our Morristown, N.J., office for two years,” said Roos, a vice president and excess casualty placement broker at Bowring Marsh. “It was my first real work experience, and I really liked the work and the company. Most importantly, I really liked the people.” Marsh hired Roos into a graduate training program that gave her a well-rounded and formalized immersion in the industry alongside her peers.
Kate Simons, a 28-year-old Power Broker® finalist in the Retail category, took a summer internship with Aon as a college student “without really knowing what it was at first.” But the program drew her in, opening up the world of learning opportunities that the insurance industry has to offer.
“In this job, the thing I like is that you ultimately get to learn about all the industries your clients are in, whether it’s retail, real estate, manufacturing, food, and the list goes on and on,” she said.
Like Roos, Simons participated in an early career development program at the company. The 18-month training helped her home in on what aspects of insurance most appealed to her and exposed her to key mentors, leading her to her current position as senior broker.
“I also felt that the industry had a really good focus on developing young talent and investing in the future,” Simons said.
Indeed, internships and intensive training programs continue to be key tools in bringing new grads into the fold.
Big brokers like Aon, Marsh and Beecher Carlson reach out to colleges to find prospective talent and introduce them to the industry. If all goes according to plan, those interns become full-time hires.
A year or two of initial training for new employees gets their feet wet in every aspect of the business. Those onboarding programs help young brokers find what niche appeals to them, and in what function they can excel.
For many, that process helps young professionals move on from simply “falling into” insurance to really embracing it as a rewarding and exciting career.
As evidence of these programs’ successes, notice that this year’s “Under 40” class of winners and finalists includes 60 brokers, as opposed to last year’s 40. More young brokers are thriving in the business.
“The best experience comes from clinging onto some good people who are willing to teach you.”
— Lindsay Roos, vice president, Bowring Marsh
Yet, for an industry that invests considerable time and resources in developing new talent, the concern remains that not enough young people realize the benefits of working in insurance. In spite of a wealth of opportunity, the influx of new grads remains troublingly low.
“There are not enough young people getting into insurance, unfortunately,” Christner said. “It takes a lot of convincing and hand-holding and mentorship to get new producers settled into their career.”
Roos echoed that thought, noting that most college students aren’t necessarily looking for a professional career in insurance, but end up there via a tangential skill or interest.
That’s how a career in insurance brokering developed for Blythe O’Brien Hogan, a director in the Global Fine Arts Practice at Aon. O’Brien Hogan majored in art history as an undergraduate, then pursued a master’s degree in art business at Sotheby’s Institute of Art in London. That got her interested in art protection, both for personal collections as well as in transit or on display in a gallery or museum. She eventually wrote her master’s thesis on the development of insurance and risk management for fine art.
“From there I segued into the very dynamic, but a little bit niche, risk management insurance industry for fine art collections,” she said.
Aon’s Global Fine Arts Practice, launched in 2005, allowed O’Brien Hogan, a Power Broker® in the Fine Arts category, to work more closely with all players in the art industry, from handlers, shippers, storage facilities, and conservators to appraisers and tax attorneys.
Despite being given opportunities and responsibilities early in their careers, many young brokers have had to overcome ageism in order to move ahead.
“Trying to sell commercial insurance to business owners who are oftentimes 10, 20 or 30 years my senior was very difficult,” Christner said. “That was a big obstacle as a young agent, trying to prove my professionalism.”
“It is challenging at times to get people to look past your age,” Simons said. “Being younger and still successful; sometimes, people tend to look for a little gray hair.”
Ultimately, though, a sound working knowledge of clients’ industries wins out, gaining their trust and building a positive reputation.
Seth Cohen, 30, and an Entertainment Power Broker®, worked around the challenges of youth and inexperience by focusing on educational opportunities and industry training.
“I realized I could really accelerate my experience beyond my years,” said Cohen, an entertainment area vice president with Arthur J. Gallagher. “I got my ARM and CPCU as quickly as I could. I took a UCLA filmmaking and production course that was very intensive. I continue to attend media law conferences. Staying on top of current affairs helps to stay ahead of your inexperience.”
A little persistence never hurt either.
“Hard work and perseverance, being creative and asking questions has been the way to work through all that,” Simons said.
Younger brokers also have the advantage of greater familiarity with changing technologies, which shape industry best practices in a number of ways. Social media and online marketing are becoming increasingly common and important ways to reach clients, as Christner proved with the success of his food truck program. Sophisticated data analysis and modeling are now equally invaluable items in the broker’s toolbox.
“The younger generation probably embraces it more and adapts better,” Simons said. “They have more innovative thoughts as far as asking, ‘What else can I do with this technology and data to look at things a different way?’ ”
Tips for Success
So what can entry-level brokers learn from our Under 40 winners and finalists? First and foremost: Pounce on every new venture.
“I would say take advantage of every single opportunity, meaning every chance to be involved with other professionals [in the industry],” O’Brien Hogan said.
Simons echoed that advice. “Jump on every opportunity, and there are many in the industry, but you have to make the most of them,” she said. “Work hard. Be confident.”
And that uncle, sister or cousin with experience in the field? Tap into their knowledge base, and pick mentors’ brains as often as possible.
“The best experience comes from clinging onto some good people who are willing to teach you,” Roos said.
Finally, the best brokers — no matter what their age — always have an in-depth knowledge of their customers’ industries. Specializing in areas of interest helps develop expertise that clients covet.
“Knowing the industry is key,” O’Brien Hogan said. “From all different angles — not just insurance, but all the little components that go into risk management.”
While challenges remain for the industry’s stability and growth potential, the growing number of Under 40 Power Broker® winners and finalists offers hope that the industry will remain dynamic for the future.
Listing of Power Broker Winners and Finalists Under 40:
From Coast to Coast
The 3,920-ton Left Coast Lifter, originally built by Fluor Construction to help build the new Bay Bridge in San Francisco, will be integral in rebuilding the Tappan Zee Bridge by 2018.
The Lifter and the Statue of Liberty
When he got the news, Scot Burford could see it as clearly as if somebody handed him an 8 by 11 color photograph.
On January 30, the Left Coast Lifter, a massive crane originally built by Fluor Construction to help build the new Bay Bridge in San Francisco, steamed past the Statue of Liberty. Excited observers, who saw the crane entering New York Harbor, dubbed it the “The Hudson River Hoister,” honoring its new role in rebuilding the Tappan Zee Bridge over the Hudson River.
Powered by two stout-hearted tug boats, the Lauren Foss and the Iver Foss, it took more than five weeks for the huge crane to complete the 6,000 mile ocean journey from San Francisco to New York via the Panama Canal.
Scot took a deep breath and reflected on all the work needed to plan every aspect of the crane’s complicated journey.
A risk engineer at Liberty International Underwriters (LIU), Burford worked with a specialized team of marine insurance and risk management professionals which included John Phillips, LIU’s Hull Product Line Leader, Sean Dollahon, an LIU Marine underwriter, and Rick Falcinelli, LIU’s Marine Risk Engineering Manager, to complete a detailed analysis of the crane’s proposed route. Based on a multitude of factors, the LIU team confirmed the safety of the route, produced clear guidelines for the tug captains that included weather restrictions, predetermined ports of refuge in the case of bad weather as well as specifying the ballast conditions and rigging of tow gear on the tugs.
Of equal importance, the deep expertise and extensive experience of the LIU team ensured that the most knowledgeable local surveyors and tugboat captains with the best safety records were selected for the project. After all, the most careful of plans will only be as effective as the people who execute them.
The tremendous size of the Left Coast Lifter presented some unique challenges in preparing for its voyage.
The original intention was to dry tow the crane by loading and securing it on a semi-submersible vessel. However, the lack of an American-flagged vessel that could accommodate the Left Coast Lifter created many logistical complexities and it was decided that the crane would be towed on its own barge.
At first, the LIU team was concerned since the barge was not intended for ocean travel and therefore lacked towing skegs and other structural components typically found on oceangoing barges.
But a detailed review of the plan with the client and contractors gave the LIU team confidence. In this instance, the sheer weight and size of the crane provided sufficient stability, and with the addition of a second tug on the barge’s stern, the LIU team, with its knowledge of barges and tugs, was confident the configuration was seaworthy and the barge would travel in a straight line. The team approved the plan and the crane began its successful voyage.
As impressive as the crane and its voyage were, it was just one piece in hundreds that needed to be underwritten and put in place for the Tappan Zee Bridge project to come off.
The rebuilding of the Tappan Zee Bridge, due to be completed in 2018, is the largest bridge construction project in the modern history of New York. The bridge is 3.1 miles long and will cost more than $3 billion to construct. The twin-span, cable-stayed bridge will be anchored to four mid-river towers.
When veteran contractors American Bridge, Fluor Corp., Granite Construction Northeast and Traylor Bros. formed a joint venture and won the contract to rebuild the Tappan Zee, one of the first things the consortium needed to do was find an insurance partner with the right coverages and technical expertise.
The Marsh broker, Ali Rizvi, Senior Vice President, working with the consortium, was well known to the LIU underwriting and engineering teams. In addition, Burford and the broker had worked on many projects in the past and had a strong relationship. These existing relationships were vital in facilitating efficient communication and data gathering, particularly given the scope and complexity of a project like the Tappan Zee.
And the scope of the project was indeed immense – more than 200 vessels, coming from all over the United States, would be moving construction equipment up the Hudson River.
An integrated team of LIU underwriters and risk engineers (including Burford, Phillips, Dollahon and Falcinelli) got to work evaluating the risk and the proper controls that the project required. Given the global scope of the project, the team’s ability to tap into their tight-knit global network of fellow LIU marine underwriters and engineers with deep industry relationships and expertise was invaluable.
In addition to the large number of vessels, the underwriting process was further complicated by many aspects of the project still being finalized.
“Because the consortium had just won this account, they were still working on contracts and contractors to finalize the deal and were unsure as to where most of the equipment and materials would be coming from,” Burford said.
Despite the massive size of the project and large number of stakeholders, LIU quickly turned around a quote involving three lines of marine coverage, Marine Liability, Project Cargo and Marine Hull & Machinery.
How could LIU produce such a complicated quote in a short period of time? It comes down to integrating risk engineers into the underwriting process, possessing deep industry experience on a global scale and having strong relationships that facilitate communication and trust.
Photo Credit: New York State Thruway Authority
When completed in 2018, the Tappan Zee will be eight lanes, with four emergency pullover lanes. Commuters sailing across it in their sedans and SUVs might appreciate the view of the Hudson, but they might never grasp the complexity of insuring three marine lines, covering the movements of hundreds of marine vessels carrying very expensive cargo.
Not to mention ferrying a 3,920-ton crane from coast to coast without a hitch.
But that’s what insurance does, in its quiet profundity.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.