Most brokers will provide a service to clients--for a fee, of course--but Power BrokerTM winners will do whatever it takes--and sometimes for free.
From holding an underwriter's hand--literally--during an unexpected slip and fall, to whipping up a manuscripted media liability contract faster than a speeding bullet, the best commercial brokers in the business know their customers sometimes better than customers know themselves.
So, just who belongs to this vaunted group of middlemen and women? Highlights of the 2008 Power BrokerTM lineup include the following statistics:
- Number of winners: 151
- Men: 103; Women: 48
- Average age: 47
- Winners under age 40: 24
- Number of brokers with at least one professional designation: 56
- Brokers working for their second or third brokerage firm: 96
- Brokerage firm breakdown: Marsh--47, Aon--41, Willis--14, Arthur J. Gallagher--12
In addition, a total of 89 new brokers joined the Power BrokerTM ranks in 2008.
Just 20 brokers have been named Power BrokerTM winners in each of the following years: 2006, 2007 and 2008.
As for trends within the trends, our researchers found six new brokers--people who did not make the list in 2006 or 2007--who deserved an award for their outstanding performance serving the healthcare industry over the last year.
Other names just continue to pop up year after year. These brokers have truly mastered the tools of the trade. They are constantly in demand to service the largest companies in their field and to provide industry expertise to others at their brokerage firms.
Our three-time award winners are: Peter Breitstone, a standout at Aon for the environmental industry; Dennis Donovan, a sports guru at Marsh; gaming guy John Bullock at Willis; pharmaceuticals phenom Bruce Belzak at Marsh; hospitality hotshot Stephen Levene at Lockton; automotive experts Carol Williams and Anthony DeFelice at Aon and Meredith Elvidge at Marsh; James Beardsley, a transportation-railroad specialist at Aon; Marshall Nadel, a utilities expert at Aon; techies Joshua Jiang at Marsh and Michael Lamprecht at Aon; marine man John Rathmell at Lockton; retail kings Gary Bull at Marsh and Joe Vineis at Hilb Rogal & Hobbs; education specialists Jean Demchak at Marsh and Anne Mulholland at Aon; and three fine-art fanatics, Steven Pincus at DeWitt Stern and Robert Salmon and Eric Fischer at Willis.
Some brokers have been difficult to place in just one category because they excel in more than one area. Take Lockton's Stephen Levene, for example, a previous winner in both the Hospitality and Telecommunications categories. Or take perennial technology standouts like Marsh's Josh Jiang and Aon's Michael Lamprecht, who have jumped from the Technology-Software category in 2006 to the broader Technology-General category this year and last.
Aon's Carol Murphy, a 2006 winner in the Financial Institutions category, found gold again this year in our newest category, Workers' Compensation.
Still other brokers could win in multiple categories because their specialty is a line of business--property or liability, for example--rather than an industry.
Aon's National Casualty Practice Managing Director Anthony DeFelice, for example, a winner in this year's Automotive category, would probably be deserving in any industry with complicated casualty issues, such as pharmaceuticals or healthcare.
Stephen Hackenburg, senior vice president with Aon's National Complex Casualty Practice, is in the same boat. He won in Aviation/Aerospace, but top risk managers in hospitality also recommended him as a winner in their category.
Also noteworthy this year is the rising influence of Integro, formed more than two years ago to challenge the big institutional brokers Aon, Marsh and Willis in the wake of the contingent-commission scandal. The firm has 12 Power BrokerTM winners this year, including the young and ambitious Jenny Gallagher. That's up from five brokers last year.
BUYERS OPEN UP
This year, it seemed as if risk managers were more receptive and eager to talk about their brokers. Even if it was in confidence, we thank them still for their forthrightness. Buyers have done the industry a service, and to brokers they've done a favor, dropping hints on what they expect from their service providers. Buyers shared more details about the challenges in their insurance programs and how their brokers overcame the problems in creative ways.
True, the occasional risk manager was unhappy with their current broker and refused to nominate anyone for an award. What, after all, would a competition be worth without an occasional curmudgeon weighing in on the deliberations? Maybe it was the case that these risk executives still hadn't found their ideal broker with which to develop a lasting relationship.
"They're doing more of a sales job versus really looking at what clients need," complained one healthcare industry risk manager. "I've had the experience of them saying, 'This is what you need,' rather than analyzing who we are and what we're trying to accomplish."
Another risk manager was even harsher. "They're just getting greedier and greedier," she said of some of the brokers she's worked with.
A risk manager for a Native American gaming outfit even wondered aloud whether brokers just are let-downs in his niche or across all of gaming--or if that is the default setting no matter what industry a broker specialized in.
And certainly, buyers and carriers in Europe, at least, were not happy about brokers trying to squeeze yet more commission out of their deals. Buyers were in no mood to hear soft-market sob stories about how 15 percent in 2007 didn't go as far as it did in 2002, and that that was the reason to ask for another 2 percent or 3 percent on the deal.
Still, more risk managers compared their current stellar brokers to others recently dumped for their poor performance.
But more often than complaints we heard praise. Many risk managers told tales of brokers who were the total package--having superior knowledge of the client's industry, constantly broaching new ideas for solving clients' problems, committed to maintaining client relationships, dedicated to sharing benchmarking data and initiating educational opportunities.
Scores of risk managers credited their brokers with reconfiguring their contracts with better terms and lower prices.
OK, enough with the kudos, of which there are reams in the pages that follow. Before brokers puff out their chests with pride in being named a Power BrokerTM, it's worth reminding that the property/casualty market is in the midst of a softening cycle.
Brokers are expected to do a good job and get their clients better rates and better terms. Without taking anything away from their hard work, keep in mind that doing very well is par for the course as rates continue to drop thanks in part to a quiet hurricane season.
Brokers, who do well in hard and soft markets, don't need reminding that, just two years ago, some buyers considered them heroes for keeping rates from going up more than 15 percent in certain lines.
One theme that carried through this year's issue was the significance risk managers placed on smarts. "The most important thing you can find in a broker is someone who's smarter than you," said one retail client of Marsh broker Elsa Lynch, a graduate of DePaul University, where she earned a bachelor's of science degree in commerce. "That's Elsa. That's what she brings to the table."
Another risk manager was equally impressed with public-entity Power BrokerTM Peter Persuitti at Arthur J. Gallagher & Co. "He is the most intellectually challenging person in insurance," said the client. As well this client should be, given Persuitti's advanced degrees in classics and postgraduate work in Rome and Athens.
Power BrokerTM winners aren't rocket scientists by any stretch, though one or two may be worthy of the moniker. But neither are they dolts, not by a long shot. Let's compromise, and just call them an accomplished lot.
Many, but not all, of this year's winners have graduate degrees. Those serving risk managers working for financial institutions all have M.B.A.s, which is what you'd expect for servants of the financial services sector. But many brokers, those working with risk executives in the construction sector, for example, don't have and don't need advanced degrees.
Intellect may be one brand of smarts, but risk managers seemed just as admiring of street smarts--that is, brokers' ability to handle anything that comes their way. These brokers, nimble and adaptable, act quickly and deftly, without a hint of panic.
"She is so on top of what she's doing," said one television production company client of Marsh's Denver-based Kathryn Dorton. "In our business that's crucial, because we need everything yesterday. And then, of course, our clients will overnight change their concept for a commercial. Today, it will be a herd of zebras; tomorrow, it will be six elephants."
TO PROTECT AND SERVE
A lot of risk managers want an aggressive shark of a broker, someone who is persistent and persuasive with insurance carriers and fights to get the best deal. Yet predatory instincts are by no means a requirement, perhaps because we're not talking about a low-margin retail sale here. The average age of a Power BrokerTM is 47, and many of them are working for their third brokerage firm. For many, business relationships have existed for decades.
Buyers need to know they can deal with someone they can trust and, unfortunately, still harbor lingering images of brokers as oily transactional animals ready to slither out of sight after closing a renewal. It's really only when it comes time to file a claim that buyers really find out whether their brokers are worth the commission they've been paid.
But this year we heard a few clients--at influential Fortune 500 companies no less--say that a bedside manner is not only appreciated in a broker, but it can be the tipping point on the scale. You might be surprised at how much a big-time risk manager values the unlikely quality of compassion in a broker.
Take marine broker Patrick Muls, based in Antwerp, Belgium, for example. "Patrick doesn't cut his people out of the picture," said an operations manager at a privately run energy trading company. "Patrick has an excellent supporting cast. I just don't have to be concerned about the status of things at Marsh."
A good thing too, considering the turmoil at Marsh during the past six months was enough to keep everyone guessing at who'd be gone next.
But the carnage at the white-shoe firm, which over the past four months has cost the jobs of a handful of the broker's executives including CEO Brian Storms, hasn't affected the ranks of its commercial brokers.
A total of 47 Power BrokerTM winners were listed with Marsh, more than any other firm, which shows that clients will stay with a broker who looks after them, whatever happens in the executive suite. Yes, indeed, service is still king, and brokers who can deliver it will get the business, as buyers will often follow their broker to other firms when a broker jumps ship.
"Their promptness of responses is what really sets them apart," said one executive vice president at a shipping company in Houston about his top brokers. "Within a day we hear back from them on any matter. That's part of what makes it fun to work with them."
Joked another U.S. buyer about his broker: "I don't know how his family feels about us calling 24/7, but we've come to expect that kind of service."
The risk manager for one of New York's top media firms didn't mince words when he explained why the company turned to DeWitt Stern to handle one of its programs, which helps find financing and insurance for as many as 150 independently produced films.
"There was no room for kids," he said. "Having had so much experience with the institutional brokers, it was refreshing to see an owner, Jolyon Stern, who is personally committed to his business and wants to reach out and touch clients."
Sometimes service has nothing to do with terms and prices, and everything to do with hand-holding, especially a broken hand.
Take Valerie Schmalzried, a New York-based broker for Integro. She helped a pharmaceutical client plan a trip for underwriters to tour the company's Puerto Rico facilities. While boarding the bus for departure, one underwriter tripped and fell, breaking her wrist. Schmalzried was immediately at her side, making sure everything was taken care of.
After the injured undewriter had recuperated, Schmalzried followed up with a lunch meeting to wish her a safe return to the workforce.
"I haven't seen anything like that from a New Yorker before," said the risk manager. The incident, he said, proved that his broker was a professional, provided top-shelf service, but also believed in bringing the human aspect to the broker-client relationship.
More interesting and compelling stories of Power BrokerTM heroism can be found beginning on Page 44, as we profile winners in 27 different industry categories.
All profiles and additional exclusive content can also be accessed on our Web site, www.riskandinsurance.com.
ERIN GAZICA is associate editor of Risk & Insurance®. Staff contributed to this story.
February 14, 2008
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