Risk And Insurance - Power Broker®

Hospitality / Gaming

2009 Power Broker^® Winners

Richard Clark

Managing Director, Gallagher Hospitality
Arthur J. Gallagher, Houston
rich_clark@ajg.com

Keeping the Mental Light on for You

Richard Clark has been in insurance longer than some brokers in the "40 Under 40" list have been on Earth. But this "top-shelf" "A-lister," as hospitality insiders describe him, has also done more in the last year than most brokers do in a career.

Take the word of one risk manager at an upscale hotel chain. Perhaps her biggest recent issue was a first-ever violent crime claim, serious enough to impact her umbrella coverage. Clark's team responded with conference calls, public relations support and crisis management funding. The end result: a measly $4,000 out of pocket.

She was grateful Clark's response was not, "Gee, I hope that works out for you"--which she might expect from lesser brokers.

Clark and his team understand how the hospitality business needs 24/7 support, she said. Clark's practice is dedicated to hotels--with a portfolio of 1,500 hotels and 300,000 rooms. With such experience, Clark personally was able to manuscript proprietary hotel-industry-specific coverages.

One of the largest hotel-owning REITs also came to value Clark this past year more than ever. The risk manager couldn't be happier with how "unbelievably responsive" Clark was when the AIG crisis broke.

Clark set up meetings with AIG to "get their side of the story"--and meetings with 12 London carriers to explore alternatives.

"He was very even-keel, level-headed, about the thing," said the risk manager.

Robert W. Hessel

Senior Managing Director
Beecher Carlson, Atlanta
bhessel@beechercarlson.com

The Angst Killer

This long-time Beecher broker is keen to assist hotel risk managers with the industry''s latest, greatest exposures. We're not talking in the abstract, risk-mapping sense. We're talking on-the-ground, terrifying risk realizations.

In the case of one Hessel client--a hotel giant--it was a terrorist attack that killed dozens at one of its locations. All about a week before the excess liability renewal. As the risk manager put it, the attack caused a "bit of angst" among insurers.

Except Hessel helped come up with a disciplined and candid response for his carriers. The result? Said the risk manager, the terrorist attack became a "nonfactor" in the renewal. Only one market felt unsettled, and Hessel replaced it without a problem. In fact, the renewal came in with lower costs, improved conditions and in keeping with the client's long-term goals.

Though Hessel is a casualty specialist, perhaps consider him a terrorism expert too. Lauding Hessel's skills at "problem-solving from a significant distance," an international hotel risk manager explained how the broker helped utilize a captive for terrorism.

"Could we get the captive to sit alongside, or behind, TRIA without realistically having much more increase in exposure?" the risk manager said.

But it's not just creativity that draws risk managers to Hessel. It's his uprightness.

"Bob is outrageously and decently honest, and I would have no problem commending Bob to anybody," the client said, adding that Hessel helped reorganize his program, even offering solutions that might not be in the broker's best financial interests.

Gerald U. Levine, CPCU

Managing Director
Beecher Carlson, Waterford, Conn.
glevine@beechercarlson.com

The Big Player in Indian Country

Gerry Levine has been with one of the largest--if not the largest--single casinos in the world nearly since its inception. He was there when insurers wouldn't even toss a couple coins of capacity at the tribal gaming company.

The risk manager remembers those insurers that didn't want her business--just as she recognizes Levine's continual dedication.

"Gerry always gives it 110 percent every single year on every single placement," she said, citing the $8 million he saved them on an OCIP, his expertise in her nation's laws and his willingness to work with her captive (the only one domiciled in Indian Country).

As for this past year, the big placement in which he invested himself 110 percent was the casino's general liability and umbrella coverage. Working with colleagues at Beecher's new Tribal Nation Insurance Services, Levine manuscripted a new form and got underwriters to accept, among other things, the Tribal Court as the venue for disputes and the inclusion of tribal government officials as public officials.

With other clients, you hear the same thing about Levine--tales of decades of service mixed with recent examples of greatness. One industry leader said he's been with Levine for more than 20 years, though he's always tested the broker. A recent test was the D&O renewal during a "very tricky situation" for his company, which owns and/or operates more than two dozen hotels and casinos. Levine had to explore "all" markets to "get to the right place," the executive explained.

John C. Logan, JD, CPCU, AIC

Managing Director
Marsh, Louisville, Ky.
john.c.logan@marsh.com

Your Man at the Head of the Table

A new Fortune 1000 restaurant client leaned heavily on John Logan last year to transform her risk management program. Why Logan? Take all that he's done for her in a mere matter of months: developed best practices for litigation management; outlined how to modernize claims, bringing them in-house and saving a cool million dollars; and pushed the company toward enterprise risk management.

For that last task, Logan met with senior management armed with what the risk manager called a "placemat." But it was more than something your kids color while waiting for dinner to be served. The placemat was something that the CFO could stick in his back pocket, yet it contained peer benchmark data, a three-year risk management plan, top 10 risks and the insurance program structure.

"It was so blow-you-away," the client said.

Meanwhile, Logan got the "simple" brokering stuff done too. Marsh won the account in April. Renewal was in May. And Logan's team saved more than $1 million.

Logan's older clients have perhaps gotten used to these types of performances. Another risk manager at a restaurant chain declared his savings with Logan over the last couple years: $1.1 million in workers' comp loss savings, $2.2 million in loss savings in general liability.

He's also been instrumental in rolling out ERM and setting up a national panel counsel list.

"Anybody can go out and market your program," said this risk manager. "A Power Broker^TM takes it beyond that." Logan helps him be "legendary."

Richard A. Moore Jr.

Regional Director, Aon Surety & Financial Solutions
Aon, Chicago
Rich_moore@ars.aon.com

A Surety-Handed Must-Have Broker

Surety is one of the most arcane forms of insurance. But during this depressed economy, it's turning into one of the most powerful economic tools a risk manager can wield. Enter Rich Moore, one of the most valuable brokers a risk manager can have on his team--perhaps the most valuable if you're up to your neck in development.

Case in point: When a risk manager at a global hospitality company started a few years back, the company had about $700 million in surety credit. By January 2008, that figure increased to $1.2 billion; by 2009, up to more than $1.4 billion.

That's not based on his company's balance sheet, professed the risk manager. "That's based on what Rich brings to the table," he said.

And what's that? It's the ability to build a program among a dozen carriers. To construct it so that the hotel company can access working capital, despite the credit crunch, at lower prices than letters of credit, all while off the balance sheets. As the risk manager put it: "Surety capacity keeps our company developing and in business."

Lack of a Moore in any industry, not just hospitality, can hurt. Take chemicals. Moore saved a client in this sector well more than a million dollars on surety, according to the company's risk manager, while releasing all collateral. Moore also suggested an "alternative funding facility," cheaper than most other letters of credit, said the risk manager.

"If (you) follow his suggestions," the client said, "ultimately you're going to be happy with the end result."

Dave Nichols, AIC

Senior Account Executive
Aon, St. Louis
David_Nichols@ars.aon.com

The Go-To Quarterback

Dave Nichols is the team player who makes sure things get done for his gaming and hospitality clients. One client, who leans on a team studded with "fantastic" stars Nichols and Dana Berry, faced the challenge of putting together an OCIP that could outdo the contractor-controlled insurance program being offered.

The gaming risk executive admired how Nichols went toe-to-toe with the contractors' brokers and came out on top--with a guaranteed-cost program that saved the client $1.2 million on an overall $10 million program.

"It was our team versus their team, and we came out on top," the risk manager said.

Another gaming risk manager, owner of one of the biggest properties in Indian Country, is quick to mention how many other brokers have tried to steal her account, but she's stuck with Nichols and his team because of what they get done. Again, take this past year. The risk manager told the story of an expansion that was put on hold. Nichols provided counsel on what could be more cost-efficient: extending the OCIP or canceling it outright.

According to the client, Nichols also locked in a three-year property placement with $500,000 savings at renewal--all the more impressive because billions in property exposure are concentrated in one facility.

One reason Nichols succeeds is his ability to "quarterback" accounts, to drop everything when needed to drive his team down the proverbial field. The tribal gaming client recounted a call she made in one emergency, which Nichols took ... while deer-hunting in the hinterlands.