Risk Insider: Joe Boren

The Truth About The Keystone Pipeline

By: | May 11, 2015 • 2 min read
Joseph L. Boren is Chairman of the Environmental product line at Ironshore Holdings (U.S.) Inc., Executive Vice President of Ironshore Insurance Services, LLC, President of U.S. Field Operations and Director of Strategic Relations. He has experience in every segment of the environmental market; a regulator, practitioner, and insurer. Joe can be reached at joe.boren@ironshore.com.

Did you know that the Keystone Pipeline is actually in operation?

Most people don’t.

But then again, most people believe that TRIA has actually covered terror events — but that will be a different article.

Maybe we should start with the facts:

  • Phase I of the pipeline runs from Hardesty, Alberta, to Steele City, Nebraska (2147 miles), then on to a refinery in Wood River, Illinois. This was finished in 2010.
  • Phase II runs 300 miles from Steele City to storage facilities in Oklahoma. This was finished in 2011.
  • Phase III is from Oklahoma to Port Arthur, Texas, where it finished in 2014 with a lateral pipeline connected to refineries at Houston, Texas, to be finished in mid-2015.

So what is it that we keep hearing about? Well that would be Phase IV of the pipeline project. This would start in the same place in Canada, go to the same place in Nebraska, but be wider and have a shorter route. It is this phase that has been the focus of all the discussion, for what seems like forever.

Those who are opposed to the pipeline say, “It’s BAD. It’s bad for the climate, for health, for the environment, for the economy … just BAD.” Those who are for the pipeline say it will create 40,000 jobs, albeit temporary. (But aren’t all construction jobs temporary anyway?) It is also built without government financing. It helps our neighbors to the North, who have approved the project, and helps our economy.

In the United States, we have made it a political question. Congress has approved it, the President has vetoed it, but as the great philosopher Yogi Berra said: “It ain’t over ’til it’s over.”

Only in dreams can we live risk free, so we manage the risks to the best of the industry’s ability.

As for the alternatives, nothing really provides a consensus of agreement. For example, move it by rail. This can and has caused problems. In July of 2013, a parked train of crude oil came loose, rolled down a hill and exploded in a ball of fire in the town of Lac-Megantic in Quebec. The inferno claimed 47 people and the town was practically destroyed. Groups opposed to moving crude by rail commonly refer to the trains as “bomb trains.”

How about by water? In March of 2014, a barge carrying 924,000 gallons of crude oil collided with a ship in Galveston Bay, spilling 170,000 gallons along a route heavily travelled by birds during their seasonal migration.

Ok, let’s move it by truck … well, you get the point.

As a nation, we are now energy independent — something we have talked about since 1973. But we need to move the product from where it is, to where it is needed. We need to do it as safely as possible, human life is sacrosanct and our precious environment needs to be protected.

Only in dreams can we live risk free, so we manage the risks to the best of the industry’s ability. We insure them, we regulate them. What we can’t do is to say “no” to everything.

Let’s finish the pipeline.

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Opportunities in Cuba

Greenberg on Cuba

The easing of travel restrictions to Cuba is bound to open up opportunities.
By: | May 6, 2015 • 3 min read
Havana

On a visit to Moscow in 1964, Hank Greenberg noticed a picture of a Havana office building on the desk of an official with the Soviet insurance company Ingosstrakh.

“That looks like the building where my company housed its insurance operations,” Greenberg — who was in Moscow seeking a travel risk reinsurance deal — told the official.

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The C.V. Starr Companies had an office in Havana – pictured above – between 1943 and 1958.

“That may be,” the Soviet official replied. “Now it is the building where Ingosstrakh houses the Soviet Union’s Cuban operations,” he added.

“Please take care of that building,” Greenberg told the official. “We will get it back … soon.”

More than 50 years after Greenberg made that bold statement, as recounted in his 2013 book “The AIG Story,” the day that Starr Companies takes possession of its former property in Havana is not yet here.

“Change must come about, but how fast? I can’t answer that.” – Hank Greenberg, CEO and Chairman of the Starr Companies.

With the recent easing of travel restrictions to Cuba by the U.S. government, however, Starr Companies’ executives are checking on the condition and ownership of the building just the same.

Untangling the history of that Havana building is just one of the opportunities that are on the minds of business people in the United States since travel restrictions to Cuba were eased in January.

Greenberg expresses the hope that his company can one day re-open an insurance operation in Havana. At the same time, Greenberg said that there is much work yet to be done, on the part of both the public and the private sector, before anything like that can happen.

“Both governments have got to agree on the speed by which normalization would come into being,” Greenberg said.

Hank Greenberg CEO and Chairman Starr Companies

Hank Greenberg
CEO and Chairman
Starr Companies

Since the restrictions were eased, Greenberg reports that the Starr Companies’ travel services subsidiary Assist-Card International Holdings, which it acquired in 2011, is already seeing an uptick in inquiries from businesspeople interested in its travel protection services in Cuba.

“From what we can discern, there is a great deal of interest and a pent-up need to travel,” Greenberg said.

The hotel and restaurant business, agriculture and travel-related industries like cruise shipping and aviation are just a few of the industries that will see opportunities in nearby Cuba as relationships between that country and the United States open up.

There will also be an intense interest, Greenberg said, for people of Cuban descent who are United States citizens eager to visit their origin country.

However, more evolution in government relations must occur before many of those dreams can become a reality.

“Change must come about, but how fast? I can’t answer that,” Greenberg said.

One thing Greenberg is certain of. Free trade is the quickest route to building lasting bonds between the United States and Cuba.

“I think that where trade increases between countries generally you see change in attitudes and building better trust between countries. You learn from each other, it’s a faster way to normalize relations than anything I can think of,” Greenberg said.

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Greenberg stressed that Assist-Card International isn’t the only U.S.-based insurance company or subsidiary in the travel risk business.

The Starr chairman indicated though that he expects his company to be a strong competitor.

“The challenges of doing business in Cuba are substantial,” Greenberg said.

“But Starr is well-positioned and prepared to leverage our relationships and global network to support our clients’ entry into this market.”

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at dreynolds@lrp.com.
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Sponsored: Liberty International Underwriters

Making the Marine Industry SAFE

A new initiative to help marine clients address safety risks leverages a customized, expertised approach.
By: | May 8, 2015 • 5 min read
SponsoredContent_LIU

When it comes to marine based businesses there is no one-size-fits-all safety approach. The challenges faced by operators are much more complex than land based businesses.

The most successful marine operators understand that success is dependent on developing custom safety programs and then continually monitoring, training and adapting.

After all, it’s not just dollars at stake but the lives of dedicated crew and employees.

The LIU SAFE Program: Flexible, Pragmatic and Results Driven

Given these high stakes, LIU Marine is launching a new initiative to help clients proactively identify and address potential safety risks. The LIU SAFE Program is offered to clients as a value added service.

Richard Falcinelli, vice president, LIU Marine Risk Engineering

Richard Falcinelli, vice president, LIU Marine Risk Engineering

“The LIU SAFE program goes beyond traditional loss control. Using specialized risk assessment tools, our risk engineers function as consultants who gather and analyze information to identify potential opportunities for improvement. We then make recommendations customized for the client’s business but that also leverage our knowledge of industry best practices,” said Richard Falcinelli, vice president, LIU Marine Risk Engineering.

It’s the combination of deep expertise, extensive industry knowledge and a global perspective that enables LIU Marine to uniquely address their client’s safety challenges. Long experience has shown the LIU Risk Engineering team that a rigid process will not be successful. The wide variety of operations and safety challenges faced by marine companies simply cannot be addressed with a one-size-fits-all approach.

Therefore, the LIU SAFE program is defined by five core principles that form the basis of each project.

“Our underwriters, risk engineers and claims professionals leverage their years spent as master mariners, surveyors and attorneys to utilize the best project approach to address each client’s unique challenges,” said Falcinelli.

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The LIU SAFE Program in Action

When your primary business is transporting dry and liquid bulk cargo throughout the nation’s complex inland river system, safety is always a top concern.

The risks to crew, vessels and cargo are myriad and constantly changing due to weather, water conditions and many other factors.

SCF Marine, a St. Louis-based inland river tug and barge transportation company and part of the Inland River Services business unit of SEACOR Holdings Inc., understands what it takes to operate successfully in these conditions. The company strives for a zero incident operating environment and invests significant time and money in pursuit of that goal.

SponsoredContent_LIUBut when it comes to marine safety, all experienced mariners know that no one person or company has all the answers. So in an effort to continually find ways to improve, SCF management approached McGriff, Seibels & Williams, its marine broker, to see if LIU Marine would be willing to provide their input through an operational review and risk assessment.

The goal of the engagement was clear: SCF wanted to confirm that it was getting the best return possible on its significant investment in safety management.

Using the LIU SAFE framework, LIU’s Risk Engineers began by sending SCF a detailed document request. The requested information covered many aspects of the SCF operation, including recruiting and hiring practices, navigation standards, watch standing procedures, vessel maintenance standards and more.

Following several weeks of document review the LIU team drafted its preliminary report. Next, LIU organized a collaborative meeting at SCF’s headquarters with all of the latter’s senior staff, along with McGriff brokers and LIU underwriters. Each SCF manager gave an overview of their area of responsibility and LIU’s preliminary findings were reviewed in depth. The day ended with a site visit and vessel tour.

“We sent our follow-up report after the meeting and McGriff let us know that it was well received by SCF,” Falcinelli said. “SCF is so focused on safety; we are confident that they will use the information gained from this exercise to further benefit their employees and stakeholders.”

“It was probably one of the most comprehensive efforts that I’ve ever seen undertaken by a carrier’s loss control team,” said Baxter Southern, executive vice president at McGriff, which also is based in St. Louis. “Through the collaborative efforts of all three parties, it was determined that SCF had the right approach and implementation. The process generated some excellent new concepts for implementation as the company grows.”

In addition to the benefits of these new concepts, LIU gained a much deeper understanding of SCF’s operations and is better positioned to provide ongoing loss control support.

“Effective safety management is about being focused and continuously improving, which requires complete commitment from top management,” Falcinelli added. “SCF obviously is on a quest for safety excellence with zero incidents as the goal, and has passed that philosophy down to its entire workforce.”

“SCF’s commitment to the process along with LIU’s expertise was certainly impressive and a key reason for the successful outcome,” Southern concluded.

There are many other ways that the SAFE program can help clients address safety risks. To learn more about how your company could benefit, contact your broker or LIU Marine.

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




LIU is part of the Global Specialty Division of Liberty Mutual Insurance.
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