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Principal
EPIC Inc., San Mateo, Calif.

Broker Delivers Major Accomplishments

A value sometimes can be placed on outstanding service, broad knowledge and years of experience. For one of Allen Amos' clients, that number was about $500,000 dollars last year.

Amos, principal with Edgewood Partners Insurance Center Inc., previously had introduced the client to a captive insurance program that is managed by a third party. Since it began participating in the captive, the client sustained its largest-ever loss, which involved workers' compensation, auto liability and physical damage claims.

As the captive manager prepared to close a policy year in which the claim was still open, Amos -- a former underwriter -- stepped in and worked out a delay that resulted in a huge financial return for his client.

The claim against the client had open reserves on the workers' compensation portion of the loss, but the client anticipated settling that loss for less than the outstanding reserves based on surveillance videos. Closing the policy year as planned also would have prevented the client from reducing its incurred-but-not-reported losses. "(It) would have resulted in a large monetary hit to our company," the client said.

"Partially as a result, we received a refund of approximately $450,000," in 2011. "This was a major accomplishment for us," said the client, noting that the refund represented more than a quarter of its annual insurance premiums.

Another client gives Amos equally high marks for his service as well as his knowledge and expertise. "He has excellent knowledge of our industry, and that is the main reason we went with him."

Director
Aon, Sarasota, Fla.

Broker Opens Minds

The problem was simple; the solution wasn't. Monica Brecka, director, Umbrella & Excess Casualty Brokerage with Aon Risk Solutions, was charged with sorting through and sorting out an excess liability program cobbled together for divergent companies that had amalgamated over three decades.

The expiring program involved various insurer forms that provided coverage for limited exposures. The client wanted a simplified program and improved coverage at, if possible, a reduced cost. After reviewing the client's risks and program, Brecka identified a host of potential coverage gaps and developed three simplified coverage structures. Brecka, limited by the client to specific market assignments, then met with underwriters in New York, Bermuda and London to outline her proposed solutions. The program that Brecka hammered out with underwriters addressed all of the client's demands.

It was simpler, so it reduced the client's administrative burden of retaining a large volume of historical data, and it provided expanded coverage, mitigating potential coverage gaps.

The client's secondary goal of reducing costs was not realized in 2011, but Brecka set up the program to reduce costs later. Costs remained stable last year due to a one-time payment for an extended claims-made reporting period. However, the program is undergoing a conversion to an occurrence form, which is designed to reduce coverage costs in future years. Brecka demonstrated her knowledge about legacy and current forms and a commitment to client service.

Senior Vice President
Marsh, St. Louis

A Railroad Man

Before John Durante, senior vice president with Marsh Inc., was a railroad broker, he was a railroad man, spending eight years in a railroad's risk management department. His background enabled him to serve his clients well last year by negotiating expanded coverage, cutting insurance costs, improving risk identification and favorably resolving a claim dispute.

For one client, Durante negotiated $25 million of additional property limits, greater business interruption coverage and a more than two-fold increase in various sublimits for the expiring premium. Durante achieved that by educating the incumbent insurer about the superior condition of the railroad's infrastructure.

"John was able to make us much more comfortable that were we to suffer a catastrophic loss, our coverage would be much more robust than it previously was," the client said.

The client also said that Durante ensures that the railroad has "considered contingencies that might not otherwise have come to light."

Durante also negotiated improved executive risk coverage for the railroad. In addition, he led negotiations with a contractor's insurer that had denied coverage for a loss the railroad contended rested with the contractor as a result of a series of provisions in a web of contracts involving several parties. The insurer eventually covered the loss.

For another client, he negotiated enhanced coverage and the elimination of an annual aggregate deductible -- again for a lower premium. The improved program kicked in before last spring's spate of tornadoes, during which the client lost a bridge.

Senior Vice President
Wells Fargo, San Carlos, Calif.

Jumping Into It

Barbara Goodwin, senior vice president with Wells Fargo Insurance Services Inc., jumps down into the risk management trenches right along with clients.

For Goodwin, that means more than placing clients' risks with insurers. For a public transit client that has made transferring risk to its contractors and vendors a central element of its operational and risk management strategy, Goodwin toiled last year on perfecting the process. The client manages about 300 vendors annually and assumes only vicarious, rather than direct, liability for each contract through a contractual risk-transfer program.

"One of our organization's greatest risk management problems centers on assuring that vendors, contractors and funding recipients appropriately share risk by meeting the insurance requirements in the contracts we enter with them," the client said.

"This year, Barbara devoted an exceptional amount of time and applied extraordinary diligence to the organizational transition of our contract insurance compliance review program to a more efficient and accurate process in order to resolve our risk management problem through adequate, consistent applied and regularly monitored contractual risk sharing," the client said.

In addition, Goodwin helped her client launch a Web-based version of the contract management system, incorporating an insurance component coordinated with Wells Fargo Insurance Services.

Senior Vice President
Marsh, London

A Fraction of the Cost

To an executive for a railroad client with operations in Australia, Bowring Marsh's Mark Ladbrook's property renewal effort last summer went beyond the ultimate in professionalism.

"You really know when someone is passionately working for you -- not just professionally but when it's personally important to them," the client said.

As it prepared for its Aug. 1 renewal, the railroad faced numerous challenges. It recently had sustained losses in Australia, which had been pummeled in the past year by a cyclone and flooding. Australia's insurance market for railroads, which had provided 20 percent of the client's capacity, dropped off the placement. Meanwhile, insurers worldwide had sustained a series of catastrophic property losses.

The railroad initially faced a market that demanded a 300 percent premium increase and that the railroad assume five times as much risk as it had previously. The client had anticipated a tighter market, but not one that threatened to squeeze its balance sheet so significantly.

But the renewal was "brokered in fantastic fashion," the client said. Ladbrook brought all of his resources to bear on the renewal. Facing the loss of a significant portion of the original dozen or so insurers on the account, Ladbrook and his team approached insurers around the world. Ladbrook ultimately lined up around three dozen insurers, including many that previously had not written much if any rail business previously, to cobble together all the capacity his client previously had. The railroad did not have to assume a higher deductible, and its cost increased only 50 percent -- or one-sixth the amount it had feared.

Vice President
Aon, Baltimore

Broker Prefers a Road Not Taken

Sometimes the best risk management move is the one that isn't made -- although that might not be so evident if it's not understood throughout an organization prior to a loss.

Patricia Piccinini, vice president with Aon Risk Solutions, understands this and helps clients determine through critical analysis which risks to insure and which to retain.

Laura McWeeney, former director of Maryland's Insurance Division and now associate general counsel to the University of Maryland University College, was in her previous role fielding numerous questions from a state public transportation agency about the benefits and drawbacks of purchasing business interruption insurance for its rail lines through two existing coverages: An inland marine rail car floater and an excess property policy.

"Ms. Piccinini suggested a conference call with myself, the rail risk manager, and the carrier for these coverages so we could have an open discussion with potential scenarios on both policies and see if (the agency) had resources to handle the situation if a loss occurred, or if the business interruption coverage was a cost-effective and necessary route to go," McWeeney said.

Ultimately, the state agency decided to retain the business interruption risk and not purchase coverage, but that decision in no way diminishes the value of Piccinini's coordination of the coverage examination, McWeeney said. "Had the broker not helped us with this issue, there could have been a claim involving loss of revenue, and there would have been much turmoil about not having the coverage and why didn't we have it."