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Risk Management

Tales of an Aviation Risk Manager

Faced with an abrupt change in circumstances, Chris Thorn rose to the challenge.
By: | September 11, 2014 • 9 min read

Aviation broker David Ekes remembers very well the moment months of hard work flew out the window.

It was 30 minutes before the autumn 2010 renewal meetings between Southwest Airlines Co. and the London insurance markets when the Willis aviation practice brokers and Southwest Airlines’ risk manager Chris Thorn received news that would have unnerved a lesser team of professionals.


The group was standing in the foyer of Willis’ global headquarters in London when Southwest’s treasurer turned to them and said the company would announce in five minutes its purchase of AirTran Airways.

At that moment, practically every line of the renewal documentation the Southwest risk management team held in their briefcases became meaningless. The team had carefully prepared its renewal pitch on what had been Southwest’s traditional business model, one which stressed organic growth, not growth through acquisitions.

And now, the Southwest team was going to announce the acquisition of an Orlando, Fla.-based low-cost competitor for $1.4 billion.

“It was humorous to the market,” said Ekes, an executive vice president for global aviation for Willis.

“We told them, ‘Look we spent weeks preparing this thing and I guess you can use this as a coaster now,’ ” Ekes said.

It may have been shocking and humorous, but to the quick-witted Thorn and his longstanding team of brokers, the acquisition of AirTran was also an insurance opportunity.

“The one thing in business in good times and bad they need accountants, so all of a sudden, I became an accountant.” − Chris Thorn, senior manager, payments and risk, for Southwest Airlines

“We knew that this was going to be a great opportunity to try to save some money on our aviation placement,” Thorn said.

In short order, Thorn and his risk management partners created the first savings for the merged airline. AirTran and Southwest went into the market as a joint placement. That resulted in lower pricing for both sets of risk exposures.

AirTran, which was founded back in 1992 as ValueJet Airlines, had grown into an airline serving 25 million passengers a year to and from 70 cities coast to coast. At the time of the merger in 2010, Air Tran was offering 700 flights a day, and employing more than 8,500 people. Its safety record was very good.

“It also helped that AirTran was a very good risk as well,” Thorn said.

Southwest, with more than 3,300 flights a day, 37,000 employees, and 88 million passengers carried in 2010, remains the pre-eminent success story in the low-fare airline category.

“The only reason their rates were higher than ours was that they didn’t have our size and they didn’t have the long history we had,” Thorn said.

Southwest, founded in 1967 as Air Southwest Co., did have year after year of good results to show for itself, and its underwriters well knew that. But that day in the Willis foyer was saved for another reason that has less to do with numbers that can be set down on a page.

Savings were achieved because of the intangibles that Chris Thorn brings to his work. As much as anything else, his long-time brokers said, he is a risk manager that has a deep understanding of the strategic value of relationships.

“I would argue that really pays off in the long term,” said Garrett Hanrahan, CEO of Willis Global Aviation, Americas.

“When something happens or there is a loss, those insurers or those brokers, or whomever is involved in the transaction take great pride at the end of the day that Chris and Southwest Airlines get exactly what they deserve,” Hanrahan said.

It’s true that in the successes that Chris Thorn has achieved, he has two brands working for him: the respected brand of Southwest and the brand and reputation of Chris Thorn, which he has built in 12 years as an aviation risk manager.


That reputation is built on having smarts, but not hitting people over the head with how smart he is, on being a great listener, and on placing a premium on long-term relationships and getting long-term value.

“Some people, when you interact with them, they need to prove to the other party that they know something,” said Peter R. Taffae, a Los Angeles-based directors’ and officers’ specialist and managing director of Executive Perils Inc.

Peter Taffae, managing director, ExecutivePerils

Peter Taffae, managing director, ExecutivePerils

“He has never been that way. He is a great listener and he asks great questions that always get to the heart of the issue,” Taffae said.

The Beginnings

Like many who have ended up in positions of responsibility in insurance and risk management, Thorn didn’t set out to become a risk manager.

His father headed up the accounting department at the University of Arkansas in Fayetteville, Ark. When Chris went off to school, he didn’t think he wanted to follow in his father’s footsteps. He initially had his heart set on engineering.

But calculus has a way of deterring people, intimidating them perhaps, and Chris, like many of us, didn’t take to that discipline. So he headed for a business degree. But there, another twist of fate occurred that would change his flight path.

He was an undergraduate in Fayetteville on Oct. 19, 1987, when Black Monday struck. The crash of the U.S. and global stock markets that wiped more than 20 percent from the value of the Dow Jones Industrial Average by the end of that month had a domino effect on young people who were graduating with business degrees.

“I saw all of these folks who had job offers have them taken away, and that had a huge impact,” Thorn said.

Thorn was about to get one of his great first lessons in pragmatism. Yes, he had told himself he wasn’t keen on doing what his father did, but that’s what he ended up doing.

“The one thing in business in good times and bad they need accountants, so all of a sudden, I became an accountant,” Thorn said.

Thorn turned a senior year internship in the accounting department at Tyson Foods into a job offer from Coopers & Lybrand, then one of the Big Eight accounting firms. But he preferred working as part of a company’s internal accounting team to working as an accounting service provider, so he eventually went back to working at Tyson Foods.

He was five years into his job as an internal auditor at Tyson when a friend who was relocating to Dallas told him about a job interview she had at Southwest Airlines. The company was looking for an internal auditor and did she know anybody? She knew somebody.

Southwest Airlines' Chris Thorn depends on solid, long-term relationships

Southwest Airlines’ Chris Thorn depends on solid, long-term relationships

Thus it was that in 1996, Thorn packed his bags for Dallas, where he spent a year and half in the internal auditing department at Southwest, before moving over to the fixed assets department.

In 2000, Southwest’s then-treasurer Laura Wright was looking to create a full-time risk management position. There was Thorn, already putting his analytical accounting skills to work for the company. He applied for the job of risk manager and got it.

In doing so, he had already put himself on his current path, using his relationships with his brokers to learn the business. “I did know the brokers because of working with them as the manager of fixed assets accounting and I knew that they were very friendly and knowledgeable and willing to help me,” Thorn said.

Thorn and Innovation

He was also looking for a challenge and a challenge was what he got.

Within a year of Thorn becoming an aviation risk manager, terrorists would fly commercial jets into the World Trade Center and the Pentagon, and aviation insurance would be turned upside down.

At dawn on Sept. 11, 2001, the global aviation premium stood at just under $2 billion, Thorn said. Before the day was over, the reserves had shot up to $4.5 billion. War risk coverage, which for the most part had been thrown in for free as a policy endorsement, was cancelled immediately for all airlines, worldwide.

“That becomes very problematic because it’s not coverage that you want to have it’s coverage that you are required to have,” Thorn said.

Thorn and his fellow aviation risk managers banded together and with the help of their general counsels, drafted language for war risk hull and liability coverage backed by the U.S. government. That coverage became part of the Air Transportation Safety and System Stabilization Act, which was passed by Congress before the end of September 2001.


Southwest’s lead insurer at the time had attempted to reinstate a layer of war risk coverage that was priced at $1.25 per revenue passenger mile. Perhaps unintentionally, the formula penalized an airline like Southwest, which flies tens of millions of passengers relatively shorter distances. Average aircraft trip length is 658 miles, or 1 hour, 55 minutes, according to the airline.

“All it was was an allocation on all the airlines in the world to collect a large sum of cash quickly to pay these claims,” Thorn said.

Southwest replaced the incumbent carrier as lead and instead took on a carrier that it felt better understood its business model.

That replaced carrier has proven to be the exception in Chris Thorn’s long risk management tenure at Southwest.

“We have pretty much had a longstanding partnership with all of the insurance companies that we have worked with,” Thorn said. And he has had to innovate at times to keep those relationships.

When the credit crunch threatened to wreck AIG in 2008, Thorn and his brokering partners came up with a solution to keep AIG as a carrier on Southwest’s program.

Dubbed the “supercontinuity option,” their innovation, for pennies on the directors’ and officers’ premium dollar, gave the insured the option of switching directors’ and officers’ coverage to a backup carrier if the primary carrier on the insured’s first directors’ and officers’ layer suffered a crippling ratings downgrade. The solution was designed specifically to address AIG’s instability at the time.

“I felt it allowed us to stick by AIG and we have a very good relationship with AIG to this day,” Thorn said.

Greg LeJune, partner and president of commercial property/casualty of Catto & Catto LLP, an Assurex Global partner based in San Antonio, Texas, recalls the same sense of reasonableness governing Thorn when Southwest sought to resolve a business loss claim due to Hurricane Katrina at the New Orleans airport.

“We could only get so far with real data and we had to settle the claim based on some assumptions,” LeJune recalled. He said Thorn allowed him to go forward and settle a sizable claim where others might have balked due to the absence of hard data.

“He was reasonable,” LeJune said.

“He understood that there were going to be limitations on the facts,” he said.

LeJune’s partner said the fact that Thorn didn’t set out to be in risk management must be aiding him.

“He didn’t come into the job with some preconceived notions about how he was supposed to do the job,” said Jaimie Hayne, the CEO of Catto & Catto.

“I felt it allowed us to stick by AIG and we have a very good relationship with AIG to this day.” − Chris Thorn, senior manager, payments and risk for Southwest Airlines

“We were really able to work together and work on that relationship and figure out where each other’s strengths and weaknesses are and it has worked out beautifully,” Hayne said.


The roots of Thorn’s abilities as a problem solver, Hayne said, may be his understanding and compassion for his fellow professionals, and their personal and professional limitations.

“At the end of the day it’s Chris’ view that everybody is trying to do the right thing. It’s just helping everybody get to that spot,” Hayne said.

“He realizes that everybody has got struggles and everybody has people that they report to, and because of his experience he understands the political dynamics between companies and the decision making process,” Hayne said.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at
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Expedition Exposures

Brokers Bankrolling Adventures

Retracing the route of Amelia Earhart is the most recent adventure made possible by brokers.
By: | September 2, 2014 • 7 min read

When it comes to great adventures, youth will be served by large insurance brokerages.

On June 26, weather permitting, 31-year-old aviatrix Amelia Rose Earhart will embark on an around-the-world flight retracing the route of her famous namesake. If successful, Earhart will become the youngest woman to circumnavigate the globe in a single-engine aircraft.


Earhart and her aircraft will be insured on a pro bono basis through policies structured and secured by Kansas City, Mo.-based Lockton Cos., the world’s largest privately held insurance broker.

“Lockton is thrilled to be a part of this legendary journey,” said Ty Carter, aviation producer at Lockton and the liaison coordinating the insurance protection for Earhart and for the Pilatus aircraft that she will be flying.

“We are passionate about aviation and appreciate Amelia’s efforts to raise awareness of the opportunities and experiences she provides. Her tenacity and spirit are truly inspiring.”

Though she is not a blood relative of the late Amelia Earhart, Amelia Rose Earhart has had a love of flying from an early age.

“I started dreaming of flying when I was 18 years old, and I’ve been flying for 10 years,” said Earhart, who planned the entire 17-stop route of her flight, which originates in Oakland, Calif.

Journey to the South Pole

Explorer Parker Liautaud and Willis Global Director of Communications

Explorer Parker Liautaud and Willis Global Director of Communications Nathan Hambrook-Skinner at the South Pole.

This venture was preceded by another headline-making adventure that teamed Willis Group Holdings plc with Parker Liautaud, a 19-year-old sophomore at Yale University who on Christmas Eve became the youngest man to ski to the South Pole.

Liautaud and companion Doug Stoup set a new speed record for the fastest-ever unsupported walk from the edge of Antarctica to the South Pole in 18 days, four hours and 43 minutes.

Known as the Willis Resilience Expedition, the venture was jointly sponsored by Willis and EMC, a large global technology company.

On their expedition, Liautaud and Stoup were tracked by sophisticated communications housed in Ice Broker, a custom-built Toyota Hilux six-wheel truck that broadcast live around the world and on the expedition’s website. The truck was created by a team assembled by Willis and tested in Iceland.

“It was Parker who first approached Willis,” said Nathan Hambrook-Skinner, London-based director of communications for Willis Global. “He came to us early in 2013 with the idea that he wanted to ski to the South Pole.”

For Liautaud, it was the end of a long journey.

Until he connected with Willis, Liautaud spent 8 p.m. to 1:45 a.m. “every night without fail in the basement of the nearest library sending out emails seeking support for the venture,” he said.

As part of Willis’ aid for Liautaud’s adventure, the global insurer handled all insurance aspects.

“Risk management was a key focus for us.” — Nathan Hambrook-Skinner, Willis global director of communications

“Risk management was a key focus for us,” said Hambrook-Skinner. “You can’t really go to Antarctica without full evacuation insurance, which you’ll need to cover you if there’s any accident. Obviously we had that fully covered.”

Willis, a leading global risk adviser and insurance and reinsurance broker operating on every continent, also handled the insurance for the Ice Broker. And of course Liautaud and four other expedition members, including Hambrook-Skinner, were covered by insurance.


“We had a crisis risk management consulting team in London that was constantly monitoring our progress,” said Hambrook-Skinner. “If anything had gone wrong, they would have covered the expedition.”

Along with the snow-skiing record, major accomplishments of the venture included:

• Liautaud took snow samples along the journey that formed a valuable contribution to current studies on climate change.

“Overall, we were able to do much more in terms of data gathering and scientific exploration in previously unexplored and untouched part of Antarctica,” said Hambrook-Skinner.

• The expedition partnered with EMC to create data visualizations to engage the public in a better understanding of the science behind climate change and the importance to society.

• A lightweight weather station was tested for the first time in Antarctica.

“The objective of the venture for us as a global risk adviser and insurance broker at the forefront of supporting businesses and individuals all around the world was to help build resilience to extreme events and natural disasters, this being one of those events,” said Hammond-Skinner.

“So it was very natural for us to help support an expedition like this which was seeking to enhance understanding of how the world is changing and how climate matters might be changing over time and help shed some light on that,” Hammond-Skinner said.

Policy Parameters

For “The Amelia Project,” Earhart and her aircraft are structured and secured by Lockton through Global Aerospace. The policy provides a combined single limit for property damage and bodily injury, as well as physical damage to the aircraft.

“One of the key parameters essential to the primary policy was the inclusion of ‘worldwide territory.’ ” — Ty Carter, aviation producer, Lockton

“One of the key parameters essential to the primary policy was the inclusion of ‘worldwide territory’ ” said Lockton’s Carter. “Due to the nature of this trip, which will occur over approximately 19 days and include 28,000 miles, having a policy that allowed for flexibility in routing was critical to the program’s success.”

Lockton was chosen to handle all aspects of the expedition’s insurance because of Carter’s long-standing and close relationship with Pilatus aviation.

“I’ve owned two Pilatus planes and I’ve also been the former president of the Pilatus Owners and Pilots Association,” said Carter. “I’ve had thousands of hours flying Pilatus aircraft.”

In financing the project, Earhart was greatly aided by Pilatus, which donated a Pilatus PC-12 NG single-engine aircraft for the flight.

In addition, with some help from Lockton, Earhart was able to sell 20 sponsorships to help pay for the flight.

“We were able to put their logos on the outside of the aircraft and also on my flight jacket as well as that of my co-pilot Shane Jordan,” said Earhart.

“I took it upon myself to bring in the sponsorships. I had never done any selling prior to that. I really knew nothing about the process getting started but I learned along the way.”

Lockton is dedicating a team of aviation experts to assist Earhart 24/7 during her flight, with regard to any insurance issue, “or for that matter any question to support her while she is making this journey,” Carter said.

“Our group internally is a mix of pilots, people who have been involved in the maintenance side and former underwriters,” he said. “We have a couple of people on our team who are fully dedicated to the project, literally from the time Amelia leaves until she returns.”

Prior to launching her flying career, Earhart was a helicopter traffic co-anchor for NBC affiliate KUSA in Denver, where she also is president of the Fly With Amelia Foundation, which grants flight scholarships to girls between the ages of 16 and 18 and supports the advancement of general aviation opportunities.

Round Two for Solar Impulse

In another aviation promotional undertaking, Swiss Re Corporate Solutions will join Solar Impulse in a joint venture to launch the Solar Impulse 2 airplane in 2015, in an effort to fly around the world using only solar power.

It took 12 years of calculations, simulations, construction and testing to arrive at the launch of Solar Impulse 2, one of the most technologically advanced aircraft of our time, company officials said.

In 2012, Swiss Re became the sole insurer of Solar Impulse 2. The plane was considered uninsurable by others and yet made the first coast-to-coast crossing of the United States by a solar plane. See R&I’s story on that journey here.


“Insurance plays an important role in supporting pioneering projects in the renewable energy sector,” said Agostino Galvagni, CEO of Swiss Re Corporate Solutions.

“We believe that advancing renewable energy and clean technologies, and establishing them as integral components of the global energy mix, is crucial to ensuring a sustainable future.

“The intent of the Solar Impulse-Swiss Re Corporate Solutions partnership is to endorse and promote this message,” he said.

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at
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Sponsored Content by Riskonnect

A Dreaming Team

Chris Thorn of Southwest Airlines got creative with his risk management program. Now, the sky's the limit.
By: | September 15, 2014 • 4 min read

Chris Thorn is known as one of the most creative risk managers in the business. After all, his risk management program hit the cover of Risk & Insurance® in March, 2012.

Now the senior manager, payments and risk, for Southwest Airlines is working with Riskonnect, a technology partner that he thinks can take his program to new heights.

“For us, it’s a platform that gives you so many different tools that if you can dream it, you can build it,” said Thorn.

Claims administration

Thorn ditched his legacy risk management information system in 2012 and started working with Riskonnect, initially using the platform solely for liability claims management.

But the system’s “do-it-yourself” accessibility almost immediately caught the eye of Thorn’s colleagues managing safety risk and workers’ compensation.

“They were seeking a software solution at the time and said, ‘Hey, we want to join the party,” Thorn recalls of his friends in safety and workers’ compensation.

SponsoredContent_Riskonnect“For us, it’s a platform that gives you so many different tools that if you can dream it, you can build it.”

–Chris Thorn, senior manager, payments and risk, Southwest Airlines

What was making Thorn’s colleagues so jealous was the system’s “smart question” process which allows any supervisor in the company to enter a claim, while at the same time freeing those supervisors from being claims adjusters.

The Riskonnect platform asks questions that direct the claim to the appropriate category without the supervisor having to take on the burden of performing that triage.

“They love it because all of the redundant questions are gone,” Thorn said.

The added beauty of the system, Thorn said, is that allows carriers and TPAs to work right alongside the Southwest team in claims files while maintaining rock-solid cyber security.

“This has sped up the process,” Thorn said.

“Any time you can speed up the process, the more success you’re going to have when you make offers to settle claims,” he said.

Policy management

Since that initial splash in claims management, the Riskonnect platform has gone on to become a rock star at Southwest in a number of other areas. And as Thorn suggests, the possibilities of the system are limited only by the user’s imagination.

SponsoredContent_RiskonnectWith a little creativity and help from Riskonnect as needed, a risk manager can add on system capabilities without having to go on bended knee to his own information technology department.

In the area of insurance policy management, for example, the Riskonnect platform as built by Thorn now holds data on all property values and exposures that can in turn be downloaded for use by underwriters.

Every time Southwest buys a new airplane, the enterprise platform sends out a notice to the airlines insurance broker, who in turn notifies the 16 or 17 carriers that are on the hull program.

Again, in that “anything’s possible” vein, the system has the capability of notifying the carriers, directly, a tool Thorn said he’s flirting with.

“It is capable of doing that,” he said.

“We’re testing out this functionality before we turn on it loose directly to the insurance companies.”

Carrier ratings

In alignment with the platform’s muscle in documenting, storing and reporting liability and property exposures, the system monitors and reports on insurance carrier financial strength.

If a rating agency downgrades a Southwest program carrier’s financial strength, for example, the system “pings” Thorn and his colleagues.

“Not only will we know about it, but we will also know all programs, present and past that they participated on, what the open reserves are for those policy years and policies,” Thorn said.

“That gives us even more comfort that we have good, solid financial backing of the insurance policies that are protecting us,” Thorn said.

Accounting interface

Like many of us, Chris Thorn didn’t set out to work in risk management and insurance. Thorn is a Certified Public Accountant, and it’s that background that allows him to take creative advantage of the Riskonnect platform’s malleability in yet another way.

With the help of the Riskonnect customer service team, Thorn added a function to the platform that allows him to calculate the cost of insurance policies on a monthly basis, enter them into a general ledger and send them over to his colleagues in accounting.


“It’s very robust on handling financial information, date information, or anything with that much granularity,” Thorn said.

The sky is the limit

Thorn and Southwest are only two years into their relationship with Riskonnect and there are a number of places Thorn thinks the platform can take him that have yet to be explored, but certainly will be.

“It’s basically a repository of anything that’s risk-related, it continues to grow,” Thorn said.

SponsoredContent_Riskonnect“This has sped up the process. Any time you can speed up the process, the more success you’re going to have when you make offers to settle claims.”
–Chris Thorn, senior manager, payments and risk, Southwest Airlines

Not only have Southwest’s safety and workers’ compensation managers joined Thorn in his work with Riskonnect, business continuity has come knocking as well.

Thorn met in July with members of Southwest Airline’s business continuity team, which has a whole host of concerns, ranging from pandemics to cyber-attacks that it needs help in documenting the exposures and resiliency options for.

That Enterprise Risk Management approach will in the future also involve the system’s capability to provide risk alerts, telling Thorn and his team for example, that a hurricane or fast moving wildfire is threatening one of the company’s facilities.

Supply chain resiliency and managing certificates of insurance for foreign vendors are other areas where Thorn and his team plan to put the Riskonnect platform to good use.

“That’s all stuff that’s being worked on by us,” Thorn said.

“They’ve given us the tools, but we’re trying to develop how we’re going to use it,” he said.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Riskonnect. The editorial staff of Risk & Insurance had no role in its preparation.

Riskonnect is the provider of a premier, enterprise-class technology platform for the risk management industry.
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