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Managing Director
Marsh, New York
Paul.A.Chirchirillo@marsh.com

Guiding Light

Many brokers make the final cut for the Power Broker^TM Awards by continuing service to existing clients, others by winning new clients. Even more impressive is winning new business from an existing client. That was the case for two of Chirchirillo's big chemical company clients.

"Paul helped us save more than $1 million in property insurance premiums this year, and also helped us reduce layers of risk coverage," said the risk manager of one international chemical producer. "He guided us in successfully presenting our company's improvement in risk quality to the market. This is his first year handling our company's property insurance renewal. His experience and energy really made a big difference."

Specifically, in this case Chirchirillo took over a "deficiently structured program" and was able to deliver increased limits on extra expense, a concurrent signed and delivered policy form prior to inception, and an improved structure, all despite two losses outstanding, one within a month of binding.

For another client Chirchirillo handled a multibillion divestiture of assets happening concurrently with an expiring policy. Just to add a twist, the divested assets were physically within the bounds of larger retained plants. This is not unusual within the chemical industry, where business units are arranged by end-use markets, but manufacturing facilities are arranged by common precursor materials. It does, however, make windstorm, flood and explosion coverage extremely complex. Another multibillion asset transition is already under way.

Executive Director
RK Harrison Insurance Brokers Ltd., London
edward.longfield@rkharrison.com

Reaching Deep Into the U.S. Marketplace

The chemical industry has always been among the most global of industries. And while energy and utility companies may occasionally get to the Lloyd's universe for windstorm or maritime capacity, chemical companies need international expertise as a matter of everyday basic coverage.

"We run three separate programs," said the risk manager for one chemical company. "We have production in the United States, as well as a joint-venture in the Caribbean and another in the United Kingdom." His firm is midsize in the whole process industry but is one of the largest in its sector.

"Just in December we renewed one program," he said. "Ed and his colleague Tim Batchelor were able to work in partnership with a broker in the United States. They improved our liability terms, added limits on our plant on the Gulf Coast and were able to maintain our price."

The client explained that the complexity of his programs isn't with geographic reach, but with processes, products and feedstocks.

"From one angle our products are essential to modern society. From another angle they are hazardous materials," he said. "Marketing our exposures to the underwriters is essential. It is also essential that our brokers are able to work closely with their counterparts in all countries."

Director
Aon, Philadelphia
manny_pereira@ars.aon.com

The Bruiser

Sometimes there is no substitute for getting down and dirty. That is never more the case than with a long, complicated claim that had dragged--on the Gulf Coast they say "drug"--out for years.

And so it was with one big integrated process company that was dickering with a carrier over a claim from Hurricane Rita.

"Manny was a very strong claims advocate for us," said a risk manager. "We disagreed with the carrier over what the coverage was and what their obligation should be. This was the most difficult part of a very long claim."

The dispute turned on lost sales. "In our industry," said the risk manager, "you don't manufacture for specific customers, you manufacture for inventory. And customers buy out of industry. So when parts of our process were knocked out, that had an impact on the rest of our manufacturing."

But it was difficult to establish the lost sales out of inventory, so the claim festered. "Manny really got in there with the claims people for us."

In the end Pereira was able to recover for the client by applying a different wording in the contract than the one over which the dispute had arisen.

Pereira's skills were even demonstrated after the bruising dispute; he was able to turn around and retain the client for the carrier.

Managing Director, North East Chemical Industry Practice Leader
Marsh, Morristown, N.J.
mary.russell@marsh.com

The Reel Russell

Landing a big one ... even for people who have never been fishing, the expression is evocative. In 2008, Russell did just that. She brought in a new client in the petrochemical sector, one with significant exposures both upstream and down. The client credits Russell with fixing a badly neglected program. This client had been with another broker for many years, so Russell's immediate task was addressing deficiencies.

"Mary really showed her total dedication to the client service," said the risk manager. "She pointed out many improvement opportunities our prior broker failed to notice." Those included total limits purchased that did not address the maximum dietary exposures to specified chemicals, insufficient sublimits, layered structures, the lack of participation from insurers knowledgeable of the client's business risks and competitive pricing.

"Mary made and continues to make many critical suggestions to help us shape up our risk management policies," said the client. "I remember she even called us from vacation to follow up on certain actions."

Reworking the program was made all the more complicated by two significant property losses in the preceding four years. Then, three weeks before the renewal, another big loss dented the company's insurance program. Handling a major claim simultaneously with a renewal is a broker's nightmare. But Russell was able to complete the renewal on time, bringing in additional capacity at a minimum change in premium and deductible.

Area President
Arthur J. Gallagher, White Plains, N.Y.
pat_walsh@ajg.com

A Broker Who Delivers an All-Out Effort

Like some bittersweet Western where the hero doesn't ride off with the girl, Walsh got the highest of praise for his work on a claim that does not look like it is going his client's way.

"There is not much anyone can do when the underwriter seeks a declaratory action," said the client.

"Pat worked his tail off, but unfortunately this claim is not yet resolved. He really did everything in his power. He was even able to have the chairman of his brokerage call the chairman of the carrier. He's the best broker I've ever run into. He's never afraid to get into it. The underwriter's claims reps went into hiding, and he managed to get them to a meeting. Unfortunately, our arguments fell on deaf ears."

It also bears mentioning that Walsh won that admiration, if not the case, while he was taking over a big new territory as area president based north of New York in affluent Westchester County.

And Walsh did have some solid wins. In one case, carriers sought to increase premiums because of a denied potential loss. He prevailed on the underwriters to reduce the price and allow more favorable terms.

In addition, he's established a reputation for savvy placements and manuscripts in international markets.

Managing Director, Life Sciences Group
Aon, Philadelphia
James_Walters@ars.aon.com

The Client Advocate

"Jim has done an excellent job for our company," said the risk manager of a biotech/pharmaceutical firm. "We experienced major product liability claims on one of our first-in-class products during 2008. The renewal of our product liability program anticipated several areas of possible coverage disputes, (but) negotiations resulted in manuscript language which protected our company from the recent litigation."

The risk manager added that "no reservation of rights letters have been issued by the insurers on this litigation, which was a first-time experience after a long career in the risk management industry. The insurer is providing a defense and indemnity in line with our renewal objectives from last year."

He credited Walters and his team at Aon with that "excellent claims advocacy consulting."

Specialty chemicals and pharmaceuticals are a highly regulated but global business, and clients noted in particular the efforts by Walters and his team to compile a Global Clinical Trials Risk Map that covered 71 countries. The focus was on insurance requirements and risk management assessments that often differed greatly from country to country.

In particular, clients liked the graphic and visual features that made the data easy to use. In a related development, Walters was heavily involved in Aon's development of an online system that allows clients to manage insurance documentation for clinical trials.

Marsh
Senior Vice President
Philadelphia