Municipalities are catching on to their cyber risks too. Just ask Jennifer Deshaies, risk manager for the city of Nashua, N.H.
She had to learn the hard way. Not by having a breach and a claim. No, she had to listen to HUB’s Bill Brouillard try to teach her about it, over and over, until she got it.
It took a while, as she recalled, jokingly.
She would tell him, “We are a municipality; no exposure!” He would introduce her to a gentleman from a cyber insurance company. “I was dead set against it.”
He introduced her to his own brokerage’s cyber experts and made her sit through PowerPoint presentations.
“I was taught how and why things could go wrong. Bill gained nothing but a headache from me on this issue. I gained security and peace of mind. Priceless,” Deshaies said.
Ask Patricia Kabiltz, as well, director of risk management services for the Maine Municipal Association, a group self-insurer for more than 450 municipalities.
The pool had been actively seeking cyber liability coverage for years. Brouillard delivered two strong proposals in 2014, one a stand-alone policy with a national company and the other that would add coverage to their current casualty reinsurance contract at a reasonable price.
Both afforded them pricing and underwriting control — essentially all the things Kabiltz was searching for.
“We would not have been able to accomplish this without Bill’s perseverance and assistance,” she said.
A Major Force
Perhaps the best way to describe John Chino’s role in public sector insurance is as a “major force.” That’s how Bob Coontz, president and CEO of risk pool CharterSAFE, described the veteran public sector broker.
Coontz had always admired Chino from somewhat of a distance. CharterSAFE worked with AJG but with another broker (who Chino supervised), but it wasn’t until that broker departed that Coontz finally saw Chino’s forcefulness up close.
In fact, Coontz traveled the country with Chino, witnessing the relationships he’d built with underwriters. Chino’s impact was so immediate, so impressive, that CharterSAFE has since put his name on their marketing materials.
Chino continues to impress even those risk professionals he’s worked with for years.
“He never says no,” said Matt Hansen, the director of San Francisco’s risk management division.
Hansen had to find coverage for mobile mammography and methadone vans in San Francisco, which he described as the toughest things to place on his program. Not for Chino.
Rick Ferguson, executive director at the Idaho Counties Risk Management Program (ICRMP), has worked with Chino for more than 13 years.
In the past year, ICRMP expanded by nearly 25 percent after moving into a new schools program. That translated into a doubling of its property exposures. Chino assisted in rewriting their existing coverage document to meet the schools’ demands, then in procuring additional limits in excess property coverage.
Tiny municipalities. Call them hamlets or villages, or maybe even a town, but to call them a city might be a stretch. And to say that they are prime targets for public entity underwriters is a stretch as well.
Yet tiny municipalities have a savior. AJG’s Jessica Govic specializes in working with them and bringing them sophisticated risk management tools and tactics from larger municipalities.
For Kevin McNamara, administrator for the village of Dwight, Ill., Govic led the effort to bring his town together with other area municipalities into their own insurance cooperative.
“Jessica has been the leader of this collaboration from day one, and after one year in the newly formed co-op, we are more than satisfied with the results,” he said.
Matt Fritz, administrator for the village of Coal City, Ill., said Govic served to re-galvanize the entire region’s risk management community. Back in 2008, Coal City pursued a stand-alone insurance coverage and saved tens of thousands, tempting other towns to leave the co-op. Yet Fritz sought to return to a cooperative for years. It wasn’t until 2014 that a new cooperative was realized.
“It was not until Jessica became involved that this occurred,” Fritz said.
The newly formed 13-member Illinois Municipal Insurance Cooperative went through its first renewal in 2014.
“The 13 initial members of IMIC are learning more than they care to about insurance, but Jessica continues to help anyone with anything as questions occur,” he said.
Vickie Novak, director of Glenview Public Library, has been a library director for 40 years.
She knows why libraries traditionally have not built insurance programs through pools. Managed by a local board of trustees, libraries traditionally place a lot of currency in autonomy.
“It takes someone who is forward-thinking enough to put this together and give it a push,” Novak said, to change the minds of a library’s board of directors.
Enter Marcus Henthorn, an “exceptional” broker who wowed Novak’s board to the point of inspiring them to become a charter member of the pool he was constructing: Libraries of Illinois Risk Agency (LIRA).
The pool launched on Dec. 31, 2013, with a total of 23 member libraries, and has grown to nearly three dozen members in one year. Members like Glenview can rely on LIRA for all of their coverages, from boiler and machinery, volunteer coverage, workers’ comp, D&O, crime and standard property & casualty.
The library’s results also speak to another reason that normally independent libraries have teamed together. Glenview has saved 27 percent on its premiums by approaching renewal as a group member, rather than a sole entity.
“Not only that, we had better coverage and higher limits,” Novak added.
Another director and early adopter of the pool recounted how her library shaved at least one-fifth off their premium costs in the first year, but seemed equally as excited about the loss assessment and control processes available through the pool.
A Go-To Broker
A conversation about insurance can get technical. We can talk about locking in a maximum of 3 percent rate increases over two years, in an excess workers’ compensation marketplace that has seen volatility and average annual premium raises in the double-digits.
We can discuss how a broker negotiated a single retention for communicable disease and negotiated foreign coverage in the event that the public entity’s sole employee who travels internationally were to get injured or become ill abroad.
Sandra McFarland secured such coverage in 2014 for one of the more populous counties in Georgia.
Michael Kushner, risk management director for the Polk County Board of County Commissioners, said that because of what McFarland’s accomplished for him, “I wouldn’t go to anyone else. She has gotten me some coverage over and above what I would have imagined.”
One example is cyber liability, which is currently excluded from general liability after ISO pulled the exposure from its forms. Kushner said McFarland was busy going to bat for him “as I speak.”
Her abilities aren’t limited to renewals and coverages; call her with claims too. Kushner was staring down a class action lawsuit in his detention centers that led to a multimillion-dollar claim, for which his county would not have had coverage if not for McFarland.
“She made me look great,” he said.
Calm in the Storm
A Northeast public school recently found itself in the eye of an uproar that received national media attention.
Willis’ John M. Moore had assisted the school district in placing its crisis management coverage ahead of the event.
When the crisis erupted, Moore stood by the district’s administrators and school board members as they utilized the coverage and brought in the services of a crisis management firm.
The teachers, administrators and board members could go back to the business of running the district, while specialists stepped in to handle the media.
Timothy Stys of Watchung Hills Regional High School is one business administrator grateful for Moore’s “high-quality advice” and negotiating, not to mention the broker’s ability to stand before the school board when someone needed to explain the nuances of the insurance program.
When some Watchung teachers decided to take students on a world exchange trip without prior notice this past school year, Stys called Moore. who procured the needed additional insurance.
Debra Ginetto, executive director of the Northeast Bergen School Boards Insurance Group, faced New Jersey-instituted cap limitations. Moore negotiated rate stability for Ginetto’s program, while also securing cyber liability coverage, a group safety recognition dividend and school board legal liability coverage in a marketplace seeking a 200 percent rate increase.
Ginetto called Moore “one of the most honest and forthright people that I know.”
The Snow Keeps Falling and the Snow Has Won
This season, municipalities across the northern regions of the United States have been inundated with snow and lots more is coming our way. Our overtime budgets are strapped and for the life of us we can’t seem to find enough salt or sand to help pave the roads throughout our communities.
It’s telling that Punxsutawney Phil not only saw his shadow this year earmarking another six weeks of winter, but that he tried to take a snip at his handler. One might gather he’s as sick and tired of beating back the weather as every snowplow operator across the United States.
Public risk managers are drowning in snowplow vehicular accidents, sheared mailboxes and damage from pockmarked roadways.
We know of the dangers and fear for your safety. We ask that you not call us killjoys, Scrooge or any four-letter words.
For every snow emergency called, there is a resident who claims it was never issued, and that his vehicle was completely engulfed by an unseen snow bank that he hit in the dark of the early morning appears to be everyone’s fault but his own.
Snowy hillsides whose curves are marked by dangerous conditions beckon to be sledded, skied or tobogganed. No amount of signage stops the adventurous, the folks who ignore the signs.
Municipal risk managers get it … truly we do. Yes, we were kids once although many residents now think we were spawned from the devil himself. We once sought that Radio Flyer for the holidays, fastened our mittens tight, and held on for dear life as we hopped on that sled to feel the exhilaration of the wind and the cold.
Problem is, we’ve grown up. We now get those pesky accident reports that claim our snow-covered hillsides are dangerous and cause calamity and injury.
Gone is the innocence of every risk manager’s youth.
I’m sometimes asked if I know the terrain of a hillside marked for “No Sledding.” Really? There are many dangerous hillsides marked with a “No Sledding” moniker. Do residents really expect us to map out the topography, the tree stumps, the divots, the gulleys and know exactly where they might get hurt?
How often have adults, or parents or guardians ignored the signage and said just this once … in the beauty of the snowfall … let’s take that chance?
Don’t. We know of the dangers and fear for your safety. We ask that you not call us killjoys, Scrooge or any four-letter words.
Think of the potential injuries — concussions, broken limbs and a potential loss of life — the next time you say to yourself … just this once, nothing will happen. I used to do this all the time when I was a kid.
Should you take the risk and fail, call 911, but don’t call me the next morning and tell me I should have known there was a tree stump that appeared out of nowhere and hit you in the teeth.
The patience of weather-weary risk managers is slowly waning amidst the claims of those who should have know better, but consciously decided to take a risk. Like Punxsutawney Phil, we wish we could nip back too.
Read all of Marilyn Rivers’ Risk Insider contributions.
What Is Insurance Innovation?
Truly innovative insurance solutions are delivered in real time, as the needs of businesses change and the nature of risk evolves.
Lexington Insurance exemplifies this approach to innovation. Creative products driven by speed to market are at the core of the insurer’s culture, reputation and strategic direction, according to Matthew Power, executive vice president and head of strategic development at Lexington, an AIG Company and the leading U.S.-based surplus lines insurer.
“The excess and surplus lines sector is in a growth mode due, in no small part, to the speed at which our insureds’ underlying business models are changing,” Power said. “Tomorrow’s winning companies are those being built upon true breakthrough innovation, with a strong focus on agility and speed to market.”
To boost its innovation potential, for example, Lexington has launched a new crowdsourcing strategy. The company’s “Innovation Boot Camps” bring people together from the U.S., Canada, Bermuda and London in a series of engagements focused on identifying potential waves of change and market needs on the coverage horizon.
“Employees work in teams to determine how insurance can play a vital role in increasing the success odds of new markets and customers,” Power said. “That means anticipating needs and quickly delivering programs to meet them.”
An example: Working in tandem with the AIG Science team – another collaboration focused on innovation – Lexington is looking to offer an advanced high-tech seating system in the truck cabs of some of its long-haul trucking customers. The goal is to reduce driver injury and fatigue-based accidents.
“Our professionals serving the healthcare market average more than twenty years of industry experience. That includes attorneys and clinicians combining in a defense-oriented claims approach and collaborating with insureds in this fast-moving market segment. At Lexington, our relentless focus on innovation enables us to take on the risk so our clients can take on the opportunities.”
— Matthew Power, Executive Vice President and Head of Regional Development, Lexington Insurance Company
Power explained that exciting growth areas such as robotics, nanotechnology and driverless cars, among others, require highly customized commercial insurance solutions that often can be delivered only by excess and surplus lines underwriters.
“Being non-admitted, our freedom of rate and form allows us to be nimble, and that’s very important to our clients,” he said. “We have an established track record of reacting quickly to trends and market needs.”
Lexington is a leading provider of personal lines coverage for the excess and surplus lines industry and, as Power explains, the company’s suite of product offerings has continued to evolve in the wake of changing customer needs. “Our personal lines team has developed a robust product offering that considers issues like sustainable building, energy efficiency, and cyber liability.”
Most recently the company launched Evacuation Response, a specialty coverage designed to reimburse Lexington personal lines customers for costs associated with government mandated evacuations. “These evacuation scenarios have becoming increasingly commonplace in the wake of recent extreme weather events, and this coverage protects insured families against the associated costs of transportation and temporary housing.
The company also has followed the emerging cap and trade legislation in California, which has created an active carbon trading market throughout the state. “Our new Carbon ODS product provides real property protection for sequestered ozone depleting substances, while our CarbonCover Design Confirm product insures those engineering firms actively verifying and valuing active trades.” Lexington has also begun to insure new Carbon Registries as they are established in markets across the country.
Lexington has also developed a number of new product offerings within the Healthcare space. The Affordable Care Act has brought an increased focus on the continuum of care and clinical patient safety. In response, Lexington has created special programs for a wide range of entities, as the fast-changing healthcare industry includes a range of specialized services, including home healthcare, imaging centers (X-ray, MRI, PET–CT scans), EMT/ambulances, medical laboratories, outpatient primary care/urgent care centers, ambulatory surgery centers and Medical rehabilitation facilities.
“The excess and surplus lines sector is in growth mode due, in no small part, to the speed at which our insureds’ underlying business models are changing,” Power said.
Apart from its coverage flexibility, Lexington offers this segment monthly webcasts, bi-monthly conference calls and newsletters on key risk issues and educational topics. It also provides on-site risk consultation (for qualifying accounts), access to RiskTool, Lexington’s web-based healthcare risk management and patient safety resource, and a technical staff consisting of more than 60 members dedicated solely to healthcare-related claims.
“Our professionals serving the healthcare market average more than twenty years of industry experience,” Power said. “That includes attorneys and clinicians combining in a defense-oriented claims approach and collaborating with insureds in this fast-moving market segment.”
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Lexington Insurance. The editorial staff of Risk & Insurance had no role in its preparation.