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Senior Vice President
Willis, Seattle

Broker Exhibits Personality and Talent

Linda Clifford appreciates John Claeys' sense of humor. It helps him "keep his perspective even in the face of the most challenging surety issues," said Clifford, chief financial officer at C.C. Myers Inc. of Rancho Cordova, Calif.

Claeys, a senior vice president in Willis' Seattle office, has had plenty to keep in perspective. Myers signed onto the troubled Galena Creek bridge project in Nevada. The original contractor exited the project following a disagreement with the state over the safety of raising bridge trusses in the consistent winds at the site. Meanwhile, some senior insurance executives publicly expressed relief they were not bonding the work.

Claeys, however, arranged bonds for the new contract, exceeding $200 million, by fostering communication between the contractor and sureties. That allowed underwriters to understand how design modifications would ensure safe completion of the bridge.

Washington state also faced a problematical surety market when it wanted a new generation of car ferries. Inadequate reinsurance support--because of the safety, financial and pollution risks that many shipyards pose--makes shipbuilding a prohibited surety risk except for small projects. Again, Claeys brought an acceptable surety contract to market by establishing a strong relationship between the state and a surety. Claeys' client won the project bid and delivered the state its first vessel in late 2010.

Noting Claeys' people skills and technical knowledge, Clifford said: "When you get that much personality with that much talent, it's really a great find."

Executive Vice President, Managing Director
Aon, Irvine, Calif.

Making the Pieces Fit

A trusted broker sometimes will do more for a client than find a willing surety during tough economic conditions. As Michael D. Parizino has demonstrated, a broker also can help a client resolve an issue that must be addressed before procuring insurance.

With one client, American Civil Constructors of Littleton, Colo., Parizino played a role in the company's financial retooling, which ultimately helped attract the new surety.

ACC's incumbent surety already had been uncomfortable with how the construction company's balance sheet was leveraged. But ACC had to assume more debt so it could take on new work to survive, a move that led the incumbent surety to stop writing new bonds for the company.

Before securing another surety, ACC had to work out a financial plan. Parizino, executive vice president at Aon, facilitated a relationship between the contractor and a private-equity firm and then brought in a surety, all of whom worked together to hammer out an arrangement that allowed the client to return to profitability in 2010 by securing tens of millions of dollars in new contracts.

Another construction client noted Parizino's importance to its operation.

"(We) feel comfortable to bring him questions, concerns and having him stay in touch with the pulse of our surety and insurance providers," said Rick Stafford, president and chief financial officer with Murray Co. of Rancho Dominguez, Calif.

Senior Vice President
Aon, New York

Speedy With Surety Pays Off

A custom window manufacturer and installer had survived the nation's economic crisis. But to remain profitable in the new economy, it needed a surety program to allow it to expand beyond the hard-pressed private construction sector and into government work. It needed Tom Ricketts.

The company, Skyline Windows of New York, had been without a surety program for seven years, despite efforts by its former broker to secure bonding. Until the financial crisis, Skyline's private-sector work, for which the company did not need a surety program, sufficed. After learning of the situation in passing, Ricketts, senior vice president at Aon, set out to find a solution for the company. A key element of a program would have to be no requirement for financial guarantees by Skyline's owners.

"Tom got up to speed quickly on our company and industry, and then located the right sources to address the opportunity--both inside and outside Aon," said James Locker, operating partner of Scarsdale, N.Y.-based Linx Partners, one of Skyline's owners.

As Ricketts, senior vice president, worked on finding a surety program, Skyline underscored the stakes of his effort by bidding on and winning a lucrative government contract.

With assistance from Allied North America, a large surety and construction insurance brokerage Aon had acquired in late 2009, the surety program was placed.

The program allowed Skyline to take on the large government project--a hospital--and that put the company in line to win more government projects, Locker pointed out.

Vice President
Marsh, Philadelphia

Chipping Away at the Global Complex

The good news for Lauren Robbins' large drywall manufacturing client was its excellent product liability loss experience. But after another manufacturer faced problems, Pennsylvania's Supreme Court made construction defect insurance recoveries difficult if the problem product had not met contract specifications. Bad press about drywall made umbrella insurers even more skittish about renewing with her client, Saint-Gobain Corp. of Valley Forge, Pa. Complicating matters, that coverage was underlying a multiyear global excess liability program written in Paris. The excess insurers also would have to adopt--midterm--any umbrella coverage modifications to ensure seamless protection.

Robbins laid the groundwork by surveying all underwriters about their concerns, making sure the appropriate Saint-Gobain executives were prepared to address them. She drew on her own senior management to discuss the issue with the insurers' top executives to make certain her client's message was consistent at all levels of the insurers involved.

The umbrella underwriters agreed to the proposed coverage modifications, and the excess insurers followed. Plus, the umbrella underwriters renewed the same limits at a 3 percent lower premium.

"The level of complexity of the accounts she handles, including ours, exemplifies her deep knowledge of coverage, global markets and the many business issues that can impact our insurance program," said Saint-Gobain's Carmen A. Bodden, vice president of risk management, and Bryan Schmitt, assistant director of risk management, in a statement.

Director, Surety
Aon, San Francisco

A Broker Who Picks up and Delivers

Surety bonding in the aftermath of the financial crisis can be challenging at best. With bonding critical to growth and sometimes just to maintain business, clients demand attention from brokers.

Whenever that call comes in, Paul Rodriguez picks up, said Jeff Cappelletti, corporate treasurer and risk manager at G4S Secure Solutions USA of Palm Beach Gardens, Fla.

"I feel response time--timely responses to last-minute requests--are one of the most important aspects of a bond broker," Cappelletti said. "Paul and his team are second to none in this category."

Rodriguez, director of surety with Aon, not only picks up, he also delivers.

For example, a timeshare developer, whose cash flow was severely pinched by the credit crisis and also was embroiled in a contract dispute with a construction contractor on a completed project, had limited resources to meet sureties' collateral requirements for future bonding. Working with the client, lenders and sureties, Rodriguez negotiated a unique partial collateralization agreement that took into account among other things, the client's future revenue streams.

In addition, Rodriguez assisted a private-equity firm in lining up building surety capacity through an arrangement that allowed it to maintain its capital structure, critical for completing an acquisition of a target company pursuing public works contracts. Without the arrangement, the client could not have made the acquisition.

Executive Vice President, Managing Director
Aon, Los Angeles

Helping to Save the Fox River

Michael R. Szot, executive vice president, managing director and environmental practice leader with Aon Risk Solutions in Los Angeles, proved that the math works: 33 years equal 30 days.

For a contractor client that had won a huge contract--an eight-year river cleanup project valued at more than $700 million--Szot was asked to design a risk management plan, including loss prevention and a contractor-controlled insurance program covering a multitude of risks, for every design firm and contractor that would work on the project.

Ninety to 120 days would have been a reasonable period to pull that together. But client Tetra Tech Inc. of Pasadena, Calif., had to begin the project 30 days from when Szot was called in. And U.S. environmental regulators required Tetra to have its risk management program firmly in place by day one of the project.

Drawing on his 33 years of brokerage experience, Szot pulled the risk management plan together in the abbreviated period.

Now, more than a year into the project, Richard A. Lemmon, senior vice president of corporate administration at Tetra, noted: "The Fox River project has turned out to be one of our most successful to date, with over 3 million man-hours worked and no lost-time injuries."

Another client, Tom Barham, the senior vice president and general counsel at SCS Engineers of Reston, Va., praised Szot's accessibility, his support staff and the respect he commands from senior insurance executives.

Regional Director
Aon
Hong Kong

Managing Director
Willis
San Francisco

Executive Vice President
Willis
New York

Director, M&A
Aon
St. Louis