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Managing Director
Aon, Atlanta

Selling the Actuarial Story

As Southeast Region Casualty Practice Leader of an Aon Casualty team, Thomas Sewell faced the quandary of the escalating cost of letters of credit (LOC) for workers' compensation programs for clients which had fallen below investment grade.

The fact that LOC costs were higher than the premiums in their program became a major focus at renewal both for the risk management teams and senior management.

Sewell's goal was for each client to add in another year of workers' comp losses into their program without an increase in collateral requirements.

To accomplish this Sewell and his team met with the risk manager and claims and safety managers to develop what he termed their "actuarial story." Sewell wanted to be able to present both qualitative and quantitative reasons why the clients' past loss experience, which was high, was not representative of their currently lower cost experience. Next, the collateral advisory team met with the CFO of each client to develop a similar "financial story."

After the insurance company's actuaries developed their loss pick, Sewell and his team met with credit officers of various companies to develop the client's financial story, in an effort to maximize paid loss liquidation credits. For the most part, clients did not suffer an increase in collateral costs, and in some cases even saw premiums drop.

"Tom's services were invaluable this year when it came time negotiate our insurance program," said one client.

Principal
Aon, Melbourne, Australia

Three Decades of Expertise

While relatively new to insurance brokerage, Peter Law has worked in the Australian workers' compensation arena for the more than 30 years. His work for carriers in underwriting, claims management and business development has provided him with a vast set of skills for his current clients to take advantage of.

For example, one automotive client faced a 60 percent premium rate increase as a result of its loss history. As Law looked into the issue more thoroughly, he found that the carrier had not actually surveyed the client to fully grasp its risk profile.

Seeking an alternative insurer was not an option because of past claims involving asbestos. When it came renewal time, Law arranged, at the insurer's expense, for Aon to undertake an independent claims and risk survey review. As a result, the client's premium renewal was up 30 percent, half the expected increase.

In another instance, Law's interpretation of a complex dispute involving policy triggers enabled a client of his, the Seacare Authority, which administers workers' comp coverage for Australian marine employees, to obtain coverage where they had not previously been able to.

One client who was new on the job but knew Law in the past consulted him on her excess of loss coverage, with which she was not satisfied. Law placed the business with another carrier for considerable savings, and the client found a solution to her problem with minimal inconvenience.

Managing Director--Director of Claims
Beecher Carlson, Atlanta

Staying Trend Focused

Janet Warren used Beecher Carlson's technology and processes to figure out a plan to not only reduce her automotive partner's loss costs, but to make sure the procedures were in place so the reductions could be realized year after year.

Warren obtained the buy-in from the client's senior management along with the claims administrator and medical management team. She then implemented an ongoing measurement protocol designed to drive claims to a timely resolution.

In addition to program and vendor oversight for her many clients, Warren provides in-depth technical assistance on individual claims issues resulting in speedier settlements. Warren's improved processes helped her clients' managers resolve their claims more effectively as conditions in their businesses constantly evolve.

Warren has also initiated a vendor contract and staffing review process that has resulted in significant savings. In addition, a claims management and closure process has helped reduce those claims that were at risk for adverse development.

One client who has worked with Warren for a decade noted that her ability to keep up with the latest trends in her field, along with the close professional relationships she has maintained, has helped her speed up many a difficult negotiation.

Partner, WC Brand Leader
Neace Lukens, Southfield, Mich.

Prevention Trumps the Cure

For Maureen Gallagher, workers' compensation issues are a fairly good barometer of what is working and not working within a corporate culture. She thinks the myths surrounding workers' compensation have caused employers to focus on the wrong things and mismanage their comp programs.

Gallagher's extensive training has helped her create a seamless arrangement between the efforts of her team and her clients' teams to better manage their workers' comp programs. She sees her role primarily as a problem preventer rather than a problem solver, and does so by teaching her clients to become more proactive in their own risk management programs.

Such seemingly arcane matters as returning overcharges due to classification and modification errors, and uncovering and negotiating less transparent costs in loss sensitive programs have helped Gallagher achieve cost reductions well over the 50 percent mark in several instances.

In the property/casualty area, Gallagher and her team have not only secured competitive pricing but are technically savvy enough to secure the correct coverage. That helps them reduce or eliminate the inevitable hassles of property loss by clarifying intent and endorsing the policy to reflect the understanding of the parties.

One satisfied client said of Gallagher and her team "even with our portfolio spanning coast to coast, they are committed to providing the best in customer service and communication."

Partner
Neace Lukens, Southfield, Mich.
Category: Workers' Compensation

The Leader

As a Detroit-area based partner in the Neace Lukens insurance brokerage, Maureen Gallagher has built a national reputation as an expert in workers' compensation issues, which one would expect from someone with such a long string of alphabet soup credentials after her name.

But that was not enough. So Gallagher decided to share her enthusiasm for her profession by establishing the Insurance Partners Academy for brokers, risk managers and insurance buyers. Many of the excellent courses already available in the marketplace focused on sales and technical issues, not on more practical risk management issues, she believed.

All insurance stakeholders, from risk managers to underwriters along with intermediaries, can take advantage of the special training offered.

"It is a very practical class. Most of the students can use the things they have learned before in class the very next day on the job," she said.

During her work with the academy and at the brokerage, Gallagher enjoys most mentoring younger folks moving up through the ranks, as they exhibit that unique combination of traits that involve traditional sales characteristics, along with the willingness to grasp some very technical complex issues.

"Being good at what you do in the top 10 percent means you have to be technically proficient, and that does not appeal to everybody," she said.

Outside the work realm, Gallagher's enthusiasm for physical fitness recently earned her the designation by a leading business journal as one of the 50 Fittest CEOs in recognition of the several spinning and fitball classes she leads each week.

--By Steve Tuckey

Senior Vice President
Willis, Long Beach, Calif.

Clients Love Broker Patrick Lucey

Five generations of insurance blood courses in Patrick Lucey's veins and it has produced a dedication to his public agency clients that includes looking for both the traditional and nontraditional solutions to risk protection issues.

In the past year, he and his teams have provided shared-layer programs, loss portfolio transfers, deductible buy-down proposals and risk-management/exposure analysis reports that have helped in the creation of these programs. His clients include two of the largest counties in California, and the largest port west of the Mississippi.

For a large public education agency, Lucey, senior vice president with Willis in Long Beach, Calif., devised a strategy that took a client from self-insurance to a fully insured program, and then back to self-insurance as the benefits of the state's adoption of open rating disappeared. Savings have been estimated at $17 million.

This year Lucey negotiated an excess workers' compensation program buy-down policy resulting in a risk protection cost savings of over 35 percent based on the expected losses within the buy-down layer.

One public agency risk official who has worked with Lucey with two different employers for more than 10 years said that Lucey's extraordinary ability to make commercial workers' comp work for her agency when so many of its counterparts were going the self-insurance route makes him a standout.

Managing Principal
Integro, Boston

An Eye for Costly Moving Parts

With more than three decades in the workers' compensation brokerage business, Mark Noonan, managing principal of Integro Insurance Brokers, has seen the kind of injuries that once killed workers now subject to cures, and the victims of those injuries back on the job.

As head of Integro's workers' comp practice, Noonan knows very well that these kinds of medical miracles come with great costs, and as a result he uses his expertise to help his clients manage them as efficiently as possible. Noonan assumed his post last year after 20 years in a comparable position with Marsh and Johnson & Higgins.

Noonan has assisted in the development of a new process that allows employers to more accurately measure the impact of their service providers on the medical component costs, allowing risk managers and financial professionals to evaluate the effectiveness of their expenditures.

Noonan provided multiple self-insurers, insurance claim departments and third-party administrators with guidance on improving their deliverables to meet the needs of insureds.

He also worked with multiple clients, as part of a team, to reduce the value of long-tail claims, both to cut exposures present and future, and to limit the demands for collateral.

Today's workers' comp universe has become so complex, with an array of medical managers, prescription managers, physical therapists and return-to-work specialists, that clients are grateful for a veteran like Noonan looking over their shoulders.