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Managing Director
Retail/Wholesale Industry Practice Leader
Marsh, San Francisco
Gary.Bull@Marsch.com

Dominant in the Retail Bullring

A Power Broker^TM doesn't necessarily have to spend time in the market looking for the best insurance deals. "He's carved out a niche there," said the risk manager of the largest U.S. conventional grocery store chain. "No other brokerage in the world does what he's done." And just what is Gary Bull's niche?

"The service he provides us is benchmarking, and there aren't any others like him," the risk manager said. He also convenes retail roundtable meetings, an annual retail advisory council meeting and networking opportunities for his retail clients. No wonder Bull has been a Power Broker^TM for the past three years.

For example, last year Bull and his team compiled and distributed a benchmark report, based on data from more than 500 Marsh retail clients. The report benchmarked property "all risk" and terrorism, primary casualty, umbrella/excess, directors' and officers' liability, employment practices liability, fidelity, fiduciary and pollution, legal and storage tank liability.

"He's a facilitator who can get me to my peers," said the risk manager. "For example, he does an interface for the risk managers from Costco and Safeway and others, and gives us a way to communicate best practices. It's very unique for the retail industry." The client is referring to Bull's retailer networking group, which has grown to 92 participants, and allows them to share information with their peers. Bull also convened Marsh's first retailer roundtable for safety directors last year.

Director
Aon, Chicago
allison_firth@ars.aon.com

A Deft Handler

There's nothing like negotiating broader coverage and saving the client "significant" premium dollars to keep the client happy. That's what Allison Firth did for this major multinational retail chain. "For our primary and excess coverage, she replaced our lead umbrella carrier and brought new markets into our program," said the risk manager of the retail chain.

More specifically, she provided value by securing professional liability coverage for the retailer's exposures to be included in the umbrella and excess liability tower at no additional premium. With this approach to the program, that meant she achieved major coverage enhancements not only in the lead umbrella but throughout the entire excess liability placement.

This line of attack is considered a unique coverage enhancement to the current marketplace offering of professional liability coverage. It also eased the retailer's own contract negotiations with its vendors by having these limits available for opportunities, such as certificates of insurance.

"We had too much of our program with one carrier," said the risk manager. "We realized it and she was able to help us act on it. She has a great handle on the market, and she's willing to do what's necessary."

Aon originally took over this retailer's account at the end of 2007, and successfully kept the business at the competitive 2008 renewal. "They just did a great job," said the risk manager.

Vice President
Marsh, Louisville, Ky.
Todd.Lanham@Marsh.com

Lending a Helping Hand

So here was this family-owned business--a Marsh client for its general liability--operating in an industry where there were very few markets. "Few companies actually wanted to write our business," said the risk manager of a Midwest farming supply retailer.

The retailer had nearly 400 employees and 500 vehicles, more than one vehicle per employee. Some of the vehicles were specialized, designed only for delivering certain products. So auto was the retailer's largest exposure.

Enter Todd Lanham. After much research he determined that a group captive program was the best way to go. "In 2003, we knew we had to do better, so Todd began educating us in captives and we had never even heard of them," the risk manager said. Initially the captive included 98 different types of companies. Today there are 250 members. "It's been that successful and there are less fixed costs," said the happy risk manager.

The retailer's premium now averages 5 percent to 10 percent less than what they used to pay because the retailer was able to break from its industry, mix its business with other best- in-class operations and return significant underwriting and investment profits to the company for controlling costs. The retailer had instituted safety and security procedures.

So last year it received dividends of more than $500,000. The captive covers general liability, commercial auto and workers' comp. According to the risk manager, last year Lanham sent in fleet specialists to the retail stores "to look at how we handled our fleet and showed us things we didn't have a clue about." Now they do.

Managing Director
Marsh, Chicago
Elsa.M.Lynch@Marsh.com

Linchpin of Clients' Insurance Programs

A broker can't buy this kind of compliment from a client: "I hope in your career you find an Elsa. She's your wingman!" That's from the senior director of risk management at a national retail chain talking about Elsa Lynch, who's been this risk manager's broker for more than 20 years.

And no wonder the risk manager feels that way. From 2005 to 2008 Lynch reduced this retail chain's overall insurance premiums by 31 percent. Over the same period, the chain's directors' and officers' liability insurance premiums plummeted by 61 percent. For workers' comp, Lynch developed a new claim-closing strategy that increased closure rates by 42 percent. The risk manager called those savings "phenomenal."

"She's done this for so long that she's got a good knowledge base. If she doesn't know the answer, she knows where to go find it," the risk manager said.

Lynch knows that not all insurance products will work for a retail operation, so she doesn't just present new products to the risk manager to build her business. "I appreciate it that when she comes to me with a new product it's something that will make sense to me and fit my business," said the risk manager.

For example, Lynch recently presented the risk manager with a transition services product designed to restructure payouts when there's a layoff (although this chain has not laid off any employees). "She's astute to know what's going on in the retail business," the risk manager said.

Managing Director
Marsh, Dunwoody, Ga.
anthony.w.reynolds@Marsh.com

In Service of Integrity and Integration

Every broker who's worth his or her salt offers excellent customer service. Saving a client more than 90 percent off the annual premium on a renegotiated, three-year integrated program after the first year, without penalties, is not too shabby either.

In Tony Reynolds' case, "he's personified customer service," said the risk manager of an international retail chain. To wit, "he was instrumental in developing cost effective creative risk financing for our casualty programs," said the risk manager.

He views Reynolds more as a consultant than a broker. Reynolds, for example, introduced this retailer to integrated risk, which the risk manager said was "unique for a retail client." The strategy was very successful as it packaged coverages such as general liability, auto and the retailer's first product liability coverage. As a result of the new approach there was sharing of limits. "It was a more cost-efficient solution," said the risk manager. That strategy continues today.

When Reynolds analyzed the retailer's risk after it divested about 30 different businesses, mostly wholesalers and professional business suppliers, that didn't fit with the retailer's primary business, Reynolds pointed out the retailer's long-tail liability exposures that needed to be addressed. As a result, the retailer was quite appreciative.

Reynolds also stepped in when the executive management changed, along with their appetite for risk, which required a substantial midterm restructuring of their integrated property, casualty and finance program on the first anniversary of the three-year program.

Senior Vice President
Director--Retail Practice
Willis HRH, New York

Comp Cost Slayer

Joseph Vineis, according to one client, is not just a broker. Vineis is the quintessential advocate for his clients. "He understands his clients," said the risk manager of a national retailing chain that includes several different brands. "He makes sure (our stores) are well represented, and that's what I appreciate. He really stands up for the customer."

He's also pretty darned good at helping to significantly reduce the retailer's workers' comp costs. "We wanted to take a deep dive with our different brands," she said. This deep dive took the shape of a root cause analysis of its rising workers' comp costs led by Vineis. He visited more than 30 stores. The analysis helped gauge loss control and safety at the store level.

"When we first started, and our costs were rising, we took all the data from the different insurers, and asked, 'do we have good data?' " the risk manager explained. As it turned out, the retailer was only using one third-party administrator at the time, and wasn't convinced that the data was accurate. So it moved its business to a different vendor for a better understanding of what was causing the comp costs to rise.

Today the retailer is finalizing and updating its data with the two new vendors--a more aggressive TPA and a medical management firm, along with new safety measures, resulting in "a very large decrease in workers' comp costs," said the risk manager. Costs are down by 35 percent and its indemnity ratio is 12 percent, "much better than we anticipated."

Marsh
Managing Director
New York

Aon
Managing Director Retail Industry Practice & COO National Casualty Brokerage
New York

Marsh
Senior Vice President
Boston

Carpenter Moore
Senior Managing Director
San Francisco

Marsh
Managing Director
San Francisco

Marsh
Northeast Zone, Retail/Wholesale Industry Practice Leader
Norwalk, Conn.