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Managing Director
Marsh, New York
jonathan.E.ball@marsh.com

The Dark Knight

Actual losses don't phase most risk managers. Those are part of the job. But there are two instances when a risk manager will flash the emergency Bat Signal to their brokers. It's when the claim check is unexpectedly small or when the premium bill is surprisingly high. The latter was the case last year with one big utility.

"It's true that rates are softening in most markets," said the risk manager, "but not for us! Our mutual issued a blanket increase on premiums." But luckily for the client, on the other end of the Bat Phone was the man with the most essential gadget of all packed away in his utility belt: a calculator.

"Jonathan put together a list summarizing all of our losses and claims back to the 1970's," said the client. "He also put together a compilation of all of our premium payments. We presented a straight ratio to the insurer showing that we were a very profitable client even at the old rate. Jonathan got our premium increase cut in half."

Ball is also credited with resolving long-standing issues, not just emergencies. "I have been trying for several years to get a fronted policy," said a client. It seemed that even within the large Marsh organization, no one seemed able to get it done. Jonathan picked up on the problem, and within a few weeks had gotten it done--and at a very attractive premium." And so far as this client was concerned, this broker's services were put to good use.

Senior Vice President
Aon, Calgary
marv.inkster@aon.ca

The Broker With a Marvelous Touch

Brokers are often essential intermediaries between clients that find themselves in straightened circumstances after a loss and need help placing and affording a new program. But this year financial markets are upside down, and Inkster was recognized in part for his retention abilities when the underwriters came, cap-in-hand.

"At the beginning of the year one of our insurers had a bit of financial difficulty," said a risk manager.

"Marvin was able to arrange a meeting, but more importantly, was able to get all of our questions answered and concerns addressed in a very subtle but effective way. He was open and honest, but he got the straight goods for us on the insurer's position."

The client adds that the carrier in question was a very big underwriter for his firm and he did not want to lose them. However, his management team could not for a moment compromise his company's coverage.

"That is where the personal touch from Marvin came in. He asked all the important questions without insulting us or them."

With that for an opener, the challenges of placing comprehensive but adaptable coverage for utilities in multiple jurisdictions were a relative respite for Inkster over the rest of the year. One highlight has been a global liability program where coverage and documentation are designed to expedite claims.

Managing Director, Power & Utilities
Aon, Dallas
marshall_nadel@ars.aon.com

A Broker With Decades of Shelf Life

When Marshall Nadel asked one client what his single biggest risk is, the client's response was, "you retiring."

The resurgence of activity in the nuclear power sector in 2008 has put a premium on Nadel, one of the few active brokers who was around during the first big wave of nuke construction more than 20 years ago. That makes him unique not just among brokers, but among construction companies, utilities and underwriters.

"All of the building is at existing sites," said one client. "Coordinating the coverage between nuke and non-nuke is very complex. Also, the transition from builder's risk to operating risk is not at all clear for anyone. We also have very large limits, capacity issues and questions of where carriers want to be on the pyramid versus where we need them, base or excess."

Clients recall in particular the moment when the industry mutual, Nuclear Electric Insurance Ltd., raised windstorm deductibles for all its members.

"Within a week, Marshall put in place a buyback program and placed it with a carrier that did not usually write nuclear coverage," said a risk manager. On this Power Broker^TM, the industry has voted with its feet. In response to the rising demands on his skills, Nadel organized a seminar on nuclear construction insurance and risk management. Turnout, not surprisingly, was overwhelming. Risk executives from major utilities, energy firms, construction companies, as well as underwriters all attended.

Managing Director
Beecher Carlson, Darien, Conn.
cpierpont@beechercarlson.com

A Perspicacious Angel

When the devil is in the details, insureds need an angel on their shoulder like Pierpont. Consider the following.

A major Northeastern utility was about to get delivery of two large generating components, each as heavy as a locomotive but both extremely delicate. The delivery would involve multiple transfers between rail and barge, as well as crossing an international boundary.

"The shipper's plans caught us a little by surprise," said the utility risk manager. "It's a good thing that Charlie is constantly on the alert. The shipper's insurance covered them through delivery, but the actual language of their policy specified 'unloading,' as opposed to 'unloaded.' "

A subtle distinction, no doubt. But these are huge, heavy components that weight tons. The replacement values alone are worth $15 million to $20 million each.

"We could have had a serious gap just when the equipment was most vulnerable," said the risk manager. "Charlie framed the issue for us, and was able to get the shipper, our construction company, and the heavy haulers to agree exactly where the manufacturer's coverage stopped and ours picked up."

Pierpont also gets kudos for his perspicacity. In one recent case he was able to craft a master program for a utility with about half a dozen different projects all insured by different carriers and with different effective dates, terms, and conditions. The master program reduced rates and premiums.

Senior Vice President
Aon, Calgary
gary.tom@aon.ca

A Broker with a Radioactive Curiosity

"Because of Gary's relationship with us and our carriers, and his knowledge of the power generation markets, our renewal was quite successful this year where our requirements were not only met, but exceeded," said the risk manager of one power generation firm.

"There was capacity still available in the market and there were players eager to get a piece of our account," the risk manager added. "That situation was taken one step further when an insurer needed to be replaced midterm on our account and he successfully did so in less than 48 hours without compromising capacity, rates, or relationships."

Clients gave Tom top marks in topics outside of risk and insurance as well. "He can speak to economy, politics, sports, everything," said one risk manager. "Gary epitomizes the level of knowledge, service, and professionalism that our company demands. He knows the history of our company, the history of our insurance program, and is attuned to the industry as a whole. Gary has solid relationships with his markets and underwriters and is educated in the types of coverage that are available, the ones that are pertinent to our business, and where they are available."

Another specific challenge that Tom handled this year was the unexpected strengthening of the Canadian dollar against the U.S. dollar. While differing legal requirements on either side of the border are normal, wide currency fluctuations are not. Tom got credit for staying nimble while handling consolidated accounts.

Managing Director
Marsh, Washington, D.C.
paul.c.whitstock@marsh.com

Broker Rides Surge of Power

Retentions and new clients are the yin and yang of the brokerage business. With havoc in the financial markets, it is not surprising that brokers picking up entirely new accounts are more prevalent this year. So it was for Whitstock. He got a boost in 2008 for gaining a big new client and then promptly expanding his client's business.

"We changed brokers to Marsh last year," said the firm's risk manager. "Paul evaluated our previous programs and developed a strategy to improve our relationships with the markets and reduce our cost. He coordinated road shows with domestic and London markets."

One of the major hurdles for brokers courting new clients is high transfer costs. In this case, Whitstock brought his power to bear and saved the clients $1 million dollars in potential transfer costs.

Once the programs placed, Whitstock continued to implement the strategy for overall premium reductions. "He successfully reduced our cost by nearly 22 percent as well as improved our overall coverage programs," said the client. "He also coordinated our effort to procure power protection program derivatives."

Under that structure price protection was wrapped around an existing energy hedge. The placement enabled the client to fill a gap in its risk management plan and ensure a stable return for investors. For a capper, "we restructured our company last year as well," said the risk manager. "Paul was there to assist us in defining our directors' and officer's insurance requirements at a reasonable price."