Insurance Business America issue 5.03 by Key Media

IBAMAG.COM ISSUE 5.03

TOO LATE FOR TECH? Brokers are jumping on the tech bandwagon – but can they catch up?

CALM WATERS

How to capitalize on the sea of opportunity in marine insurance

BREAKING GROUND Why specializing in the construction industry isn’t as easy as it looks

THE POWER OF THE NICHE Tokio Marine HCC’s Bill Hubbard on coupling specialty expertise with global resources G RISK AMERICA’S LEADIN

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America’s Risk professionals from 71 of the issues and largest corporations reveal 17 threats on their radar for 20

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ISSUE 5.03

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CONTENTS

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UPFRONT 03 Editorial

AMERICA’S

The adaptability of the insurance broker

LEADING RISK

MANAGERS 2017

SPECIAL REPORT

FEATURES

65 YEARS OF SUCCESS

Founded on a passion for stock-car racing, K&K Insurance has grown into a powerhouse in the sports and leisure sector

PEOPLE

INDUSTRY ICON

Bill Hubbard, head of Tokio Marine HCC Specialty Group, reflects on the broader reach of his company post-acquisition

A look at the world’s biggest risks – and how companies are managing them

06 Head to head

Finding the silver lining on the arrival of driverless cars

07 Opinion

If your new producers are failing, it might be your fault, not theirs

08 News analysis

Insurance brokers are embracing technology, but is it too little, too late?

10 Intelligence

This month’s big movers, shakers and new products

12 Workers’ comp update

AMERICA’S LEADING RISK MANAGERS

Find out what’s on the minds of risk management bosses from 71 of the country’s biggest companies

04 Statistics

FEATURES

FROM THE GROUND UP

How can brokers best position themselves to serve the thriving construction industry?

Employers are increasingly recognizing the benefits of value-based care

14 Technology update

How brokers can use data to drive cyber sales

FEATURES 50 Agency insight

How Hotchkiss Insurance Agency’s culture has driven 40 years of growth

PEOPLE 55 Career path

Throughout his career, Todd Johnson has had a passion for helping others

16 2

FEATURES

SMOOTH SAILING AHEAD Expert advice for navigating the waters of marine insurance

56 Other life

Insurance exec and trombone player John Alberts hits all the right notes

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UPFRONT

www.ibamag.com APRIL 2017 EDITORIAL Managing Editor Paul Lucas Journalists Maryvonne Gray, Jordan Lynn, Lucy Hook, Will Koblensky, Ryan Smith News Writers Lyle Adriano, Louie Bacani, Mina Martin, Gabriel Olano, Allie Sanchez Staff Writers Tim Garratt, Libby McDonald, Joe Rosengarten, Heather Turner Editorial Researcher Hannah Go Copy Editor Clare Alexander

CONTRIBUTORS Peter Kochenburger, Karen Gately, Janine Garner

ART & PRODUCTION Design Manager Daniel Williams Designer Joenel Salvador Production Manager Alicia Chin Traffic Manager Monica Lalisan

SALES & MARKETING Vice President Cathy Masek Media Sales Managers Chris Wills, Chris Anderson, Megan Roth Mktg & Comms Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries cathy.masek@keymedia.com, chris.wills@keymedia.com chris.anderson@keymedia.com, megan.roth@keymedia.com

Key Media 78O7 E. Peakview Ave., Suite 115 Centennial, CO 80111, USA tel: +1 720 316 0151 www.keymedia.com Offices in Denver, London, Toronto, Sydney, Auckland, Manila, Singapore, Bengaluru

Insurance Business America is part of an international family of B2B publications and websites for the insurance industry Insurance Business Canada john.mackenzie@kmimedia.ca T +1 416 644 874O Insurance Business UK jonathan.connelly@keymedia.com T +44 20 7193 0935 Insurance Business Australia peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business NZ peter.smith@keymedia.com.au T +61 2 8437 47OO

EDITORIAL

Why the cup is half full

t was Benjamin Franklin who said that “there are only two certainties in life: death and taxes.” Perhaps if he had been around today, he would have contemplated a third: the adaptability of the insurance broker. It seems no matter how gloomy the picture may be for society, insurance brokers prove flexible enough to adjust to their new environment. In today’s unsettled climate, there is evidence of this adaptability around the world. In Canada, there is an expectation of recovery after the Fort McMurray wildfires, the direct and indirect costs of which a MacEwan University survey estimated at close to $9 billion. In New Zealand, the sentiment is that brokers and insurers have reacted much more positively to the Kaikoura earthquake of 2016 than they did to the Christchurch rumble in 2011. In the UK, the initial doom and gloom of the Brexit vote has largely been replaced by feelings of resilience, boosted by the fact that even after so much time has passed, little to nothing has changed.

It seems no matter how gloomy the picture may be for society, insurance brokers prove flexible enough to adjust to their new environment And while other nations may question the arrival of Donald Trump into the world’s most lauded hot seat, a survey from Reagan Consulting revealed that among brokers in the US, there is optimism for the year ahead, even though growth last year fell to its lowest levels since 2011. Why? Because, in the eyes of many brokers, the new president marks the arrival of an economically focused administration – those in the sector are projecting 6% organic growth during 2017. Additionally, although reports of robots and automation have cast a shadow over future job security in the insurance industry worldwide, 42% of those surveyed in the Guy Carpenter Annual Market Pulse Survey 2017 suggested that technological innovation actually represented the biggest opportunity to grow their business in the year ahead – placing it ahead of new products (25%) and new geographic markets (13%). So what stands behind this incredible resilience, positivity and bounce-backability? Perhaps we need look no further than America’s leading risk managers, the subject of this edition of Insurance Business America. It is their ability to identify potential risks, find weaknesses in business processes and identify brokers who can become trusted partners that provides companies with a solid foundation on which to build. With their support, the cup will remain half full, and never half empty, for brokers. The team at Insurance Business America

Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

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UPFRONT

STATISTICS

What lies ahead

Canada

79.20

Overall risk score, 2017

84%

of finance professionals say forecasting risk is as hard or harder than three years ago

51%

anticipate that forecasting risk will be more challenging three years from now

Overall risk score, 2016

77.30

Overall risk score, 2017

78.30

What issues, trends and factors pose the greatest threats to the world in 2017? THE WORLD is no stranger to political risk in 2017. China and Russia top the list of countries most likely to influence the risk landscape this year, due to factors such as succession risks, conflict and regional instability. But the West is by no means immune from events that stoke geopolitical risk – the ongoing ramifications of the UK’s Brexit vote are still playing out on one side of the Atlantic, while

80.30

Overall risk score, 2016

the consequences of last year’s US presidential election continue to be felt on the other. Both events – along with contentious elections in places like France and the Netherlands – point to the rise of protectionism, nationalism and anti-establishment parties in countries worldwide. This apparent turning of the tide raises new concerns for insurers – and therefore brokers and their clients.

67%

of companies have made efforts to mitigate exposure in response to current and emerging threats

WHICH COUNTRIES ARE MOST AT RISK? In looking at political, economic and operational risk worldwide, Marsh found that Africa, the Middle East and parts of South America are still the least stable in terms of their ability to deal with such shocks as economic calamity or abrupt political changes. However, a closer look at some key countries reveals that stability has fallen slightly across the globe over the past year. RISK SCORE

60%

< 49

of organizations have maintained liquidity due to the threat of geopolitical risks

50-59

60-69

70-79 80-100

Unstable

Stable

Source: Marsh & McLennan/Association for Financial Professionals, January 2017

MITIGATING RISK WITH DATA Given the current climate, more companies are committing to using risk data and analytics to inform decision-making.

How is your organization using risk data and analytics? To improve risk identification (50%) To inform the overall business strategy (43%) To enhance risk mitigation (34%)

WHICH RISKS ARE MOST LIKELY? According to the World Economic Forum’s Global Risks Report, geopolitical risks (shown in orange below) have taken on more prominence in recent years in terms of the risks businesses feel are most likely to happen.

2012

To support major transactions (25%) To facilitate risk reporting (21%) To optimize insurance programs (17%) Source: Marsh & McLennan/Association for Financial Professionals, January 2017

2014

Income disparity

Chronic fiscal imbalances

Extreme weather events

Rising greenhouse emissions

Cyber attacks Water supply crisis

To understand risk-bearing capacity (28%) To inform decisions on specific risks (26%)

2013

2015 Interstate conflict with regional consequences Extreme weather events

2016

2017

Large-scale involuntary migration

Extreme weather events

Large-scale involuntary migration

Unemployment or underemployment

Failure of national governance

Failure of climatechange mitigation and adaption

Major natural disaster

Water supply crisis

Climate change

State collapse or crisis

Interstate conflict with regional consequences

Large-scale terrorist attacks

Mismanagement of population aging

Cyber attacks

Unemployment or underemployment

Major natural catastrophes

Massive incident of data fraud/ theft

Societal

Economic

Environmental

Geopolitical

Technological Source: World Economic Forum

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Germany

Russia

Overall risk score, 2017

77.40

60.60

78.60

59.10

Overall risk score, 2016

China

France

68.40

72.30

Overall risk score, 2017

67.70

74.80

Overall risk score, 2016

Singapore

Brazil

56.70

81.10

India

Overall risk score, 2017

Overall risk score, 2016

Overall risk score, 2017

62.70

57.20

Overall risk score, 2016

83.00

63.60

Overall risk score, 2016

New Zealand

77.60

South Africa

Australia

Overall risk score, 2017

Overall risk score, 2016

56.50

74.60

58.30

77.00

74.90

Overall risk score, 2016

Overall risk score, 2016 Source: Marsh/BMI Research

WHICH RISKS WILL HAVE THE MOST IMPACT? When it comes to the risks that would have the greatest impact, recent Global Risks Reports put environmental calamities right up there with societal and gepolitical risks, while economic risks have taken a backseat.

2012

2013

2015

2016

2017

Fiscal crisis

Water supply crisis

Failure of climatechange mitigation and adaption

Weapons of mass destruction

Climate change

Rapid and massive spread of infectious diseases

Weapons of mass destruction

Water supply crisis

Weapons of mass destruction

Water supply crisis

Weapons of mass destruction

Unemployment or underemployment

Interstate conflict with regional consequences

Large-scale involuntary migration

Failure of climatechange mitigation and adaption

Critical information infrastructure breakdown

Failure of climatechange mitigation and adaption

Severe energy price shock

Major systemic financial failure

Water supply crisis

Food shortage crisis Chronic fiscal imbalances Volatility in energy and agricultural prices

2014

Chronic fiscal imbalances

Societal

Economic

Environmental

Geopolitical

VIEW FROM THE C-SUITE Almost half of the executives at companies surveyed by Marsh & McLennan are concerned about geopolitical risks, especially those at larger and public companies. All companies

Extreme weather events Water supply crisis Major natural disaster Failure of climatechange mitigation and adaption

Technological

46% 42%

15%

42%

16%

Annual revenue at least $1 billion 53%

35%

13%

Publicly owned 52%

31%

17%

Privately held 45%

Concerned Source: World Economic Forum

39%

Annual revenue less than $1 billion

42%

Not concerned

13%

Unsure

Source: Marsh & McLennan/Association for Financial Professionals, January 2017

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UPFRONT

HEAD TO HEAD

Will driverless cars be good or bad for insurance? Technology is leading automotive insurance down a new road – but are brokers prepared to travel it?

David Williams

Teresa Cracas

John Matley

Technical director AXA Insurance

Senior vice president and chief risk officer The Cincinnati Insurance Companies

Insurance leader Future of Mobility Practice Deloitte Consulting

“Automated vehicle technology could drastically reduce the number of accidents on our roads, and insurers are at the heart of making that happen. In addition, driverless vehicles could impact society in a number of positive ways – providing modes of transport for those currently unable to drive, tackling congestion, lowering emissions and reforming city planning. Motor insurance has been compulsory in the UK for more than 80 years, but the industry has only made an underwriting profit once since 1993. We should be welcoming any disruption with open arms – and with insurers leading the charge in driverless, it puts us very much in control of our destiny.”

“The insurance industry has always supported innovations that help save lives. We’re learning that potential life-saving benefits could come from removing distracted humans from driving. And risks related to cars will still need to be managed, even if the potential liability shifts from driver to manufacturer. While it’s still too early to know exactly what impact driverless cars will have on our industry, we know that we cannot sit and wait for this change – or any change – to happen. Carriers need to understand what’s coming and develop strategies that help agents serve their clients as the world around us evolves.”

“We believe we will see a seismic shift from traditional personal lines policies to a future in which personal and commercial lines will blur and combine very closely as car-sharing and ridesharing begin to change lifestyles. For the players who are extremely focused on personal auto policies and don’t have commercial lines capabilities, without a strategy to adapt, driverless cars represent a long-term existential crisis. For those who are have strong commercial lines capabilities, knowledge on how to underwrite and price product liability, and who are dynamic in their thinking, the change driverless cars represent is potentially very good.”

THE NEW KINGS OF THE ROAD It’s just a matter of time before driverless cars dominate the world’s highways, according to a study from IHS Automotive, which foresees a future in which 76 million vehicles with some level of autonomy are sold globally between now and 2035. The study predicted that autonomous vehicles that allow for driver control will be on roads worldwide before 2025, and that vehicles with no means of driver control will follow by 2030. IHS Automotive believes that at some point after 2050, almost all vehicles on the road will be self-propelled.

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UPFRONT

OPINION

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Are you training to fail? You might be hiring the right people, but if you fail to train them, you’re training to fail, writes Preston Diamond THINKING ABOUT starting your own agency? First comes, well, you. Then your carriers. Next up is E&O insurance (a must). Now maybe you’re ready to hire account managers. Finally, it’s time for producer number one. But more often than not, that first producer will fail. So the question is: Why do so many agencies hire producers who fail? You have several major obstacles to overcome when starting an agency, and not hiring the right person is just one of them. Giving the right person the right training is also vitally important. As Apple guru Steve Jobs once said, “You cannot mandate productivity; you must provide the tools to let people become their best.”

Obstacle #1: Lack of an automatic client acquisition program You’ve found your candidate, a new producer you like, but who doesn’t have experience in the insurance industry. You tested her, liked the results and interviews, and hire her. But in-house testing can only go so far. It is important that you now let the new hire ‘get in the game’ and actually reach out to new customers, to the point that it becomes second nature to her. This can only be successfully achieved if you have a solid client ‘getter’ plan, supported by an autopilot sales system. By putting such a plan in place and thoroughly testing it, you’ve removed obstacle number one in helping your new producer succeed, which you will be able to gauge by how quickly she reaches her comfort level.

Obstacle #2: The need for instant gratification Everyone covets instant gratification – owners and new producers. Instant gratification for producers promotes success. However, your new producer needs training, and the way to accomplish this is to let the training be hands-on. Let her shadow a successful producer, soaking up both knowledge and

The underwriting is more consistent. Workers’ comp premiums are a large part of any employer’s insurance wallet; however, few employers and agencies spend much time on it because it is mandated in most states, there is no policy difference, and commissions are lower than with most other lines of insurance. However, when done right, workers’ comp can and will improve people’s lives. So, consider no other training for at least the first year. No insurance schools unless they focus exclusively on workers’ comp. No designation programs except workers’ comp. If you choose another coverage, the same rules apply. You or another agency team member will be the expert in other lines of insurance.

Obstacle #4: Drowning in the sea of insurance sameness If workers’ comp is your new producer’s focus, it’s time to build your Intelligent Distinction to stop her from drowning in this sea of sameness, and to become the go-to agency for employers you target.

“Learning too much, too soon isn’t healthy – your new producer may feel overwhelmed, insecure and pressured to produce” technique. Soon it will come to a point where she can read body language (a lost trait in a world of Twitter and Instagram), which often triggers getting the order.

Obstacle #3: Overwhelmed and pressured to produce After this new producer earns her license, somewhere in her near future is an insurance school, designation program or both. But learning too much, too soon isn’t healthy – she will return with information overload, and may feel overwhelmed, insecure and pressured to produce. Why not train your new producer exclusively in workers’ comp? Comp coverage is comp coverage, regardless of the insurance company. Every employer (with very few exceptions) is a prospect. Applications are fairly standard and more quickly completed.

You must be able to demonstrate your Intelligent Distinction. This does not have to be – nor should it be – insurance-related. It can be something as simple as how you frame a conversation. For instance, consider how “May I ask you some questions?” compares to “May I check a few points with you?” Which changes the conversation? Many customers feel “checking a few points” is not as intimidating as “asking a few questions.” Words that change the conversation in your favor are your life jacket to ensure you do not drown in the sea of sameness.

Preston Diamond is the founding member and current managing director of the Institute of WorkComp Professionals, which educates, certifies and mentors insurance agents in workers’ compensation insurance.

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UPFRONT

NEWS ANALYSIS

The tech revolution? From mobile apps to digital signatures to social media content – the broker channel is embracing the technologies it once feared. But has it caught up with the pace? IT’S NOTHING new to say that technology is drastically changing the landscape for businesses across all industries and continents. But while insurance – and specifically the broker channel – is often criticized for being too slow to adapt to the technologies that are revolutionizing other markets, the signs suggest that the industry might finally be having its moment. “I actually think it’s a little bit of a myth that insurance in general, and our broker channel in particular, are averse to technology,” says Michael Howe, senior vice president of product management at insurance software provider Applied Systems. Howe says two years ago, he would have agreed that some in the industry remained

forward. All the things that [businesses are] trying to do, technology can help them. And it seems obvious to say that, but we actually see people acting on that.” While tools such as mobile apps and digital management systems can make brokers’ jobs easier, technology is also revolutionizing the way they can engage with clients – who, in turn, are expecting a higher level of customer service in the digital age. Consumers are becoming more and more accustomed to immediate, 24/7 accessibility, and increasingly expect service providers to offer apps in which they can access their information and take action at any time of the day, says Matt

“People now get that technology, and enabling their business with technology, is no longer optional” Michael Howe, Applied Systems tech-phobic, but changes in the last couple of years suggest that’s no longer the case. Applied saw the user base for its mobile app surge by 162% year-overyear, the company announced last month, suggesting that brokers are not just going digital, but are also embracing mobile. “I think there’s a general recognition now that technology is not to be feared,” Howe says. “The opposite – it’s actually the way

Bevan, president of brokerage D.G Bevan. He points to digital signatures as a great example of how a simple technology is enabling brokers to provide a speedier, more convenient service. “Many brokers are moving in this direction, especially for personal lines,” Bevan says. “This is a solution that provides efficiencies on both the broker and client sides of the transaction. A prospect can

find our company from a search on their phone, after a quick call or online chat, we can email them an e-signature document. A few taps on their phone, and they have a policy.” Social media – not typically considered an essential function in the insurance industry – is also fast becoming a vital part of a brokerage’s offering. More and more brokers are feeling the pressure to keep their social media presence up-to-date, says Stanislav Kojokin, partner at brokerage KASE Insurance. “Just like any service industry, brokers would like to stay connected with their clients and engage them in the activities of the business,” he says, adding that there are firms that produce insurance-related content for brokers to make online media easier to manage. “As a result, many brokers are making sure to have mobile-friendly websites and active social media accounts,” Kojokin says.

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THE CONSUMER MIGRATION

71%

of consumers use some form of digital research before buying insurance

76%

of millennials believe having a mobile service is very important

64%

of millennials believe social media is an effective customer service channel, compared to 27% of baby boomers But despite undeniable steps forward in the digital space, the outside perception of the industry as a whole may not have caught up just yet. “The insurance industry has developed

tive to see the industry moving forward.” The pace at which technology is growing is forcing a new perspective in the industry, according to Kaufman, but with a large portion of its workers “graying and looking

“The insurance industry has developed a reputation for lagging behind in regard to embracing new technology” Daniel J. Kaufman, Burns & Wilcox a reputation for lagging behind in regard to embracing new and emerging technology,” says Daniel J. Kaufman, senior vice president and managing director at Burns & Wilcox. More insurers in both the standard and specialty markets are investing in technologies ranging from mobile tools to predictive analytics, Kaufman says, and while investment has been slow, he adds that “it’s posi-

toward retirement,” a lot more needs to be done to attract the next generation of digital natives. “It’s no secret that the insurance industry is facing an inevitable talent shortfall,” Kaufman says. “Young, tech-savvy professionals cannot be expected to follow an insurance career path unless it is recognized that our industry is heavily investing in emerging technology.”

71%

of consumers who have had a good social media service experience with a brand are likely to recommend it to others Sources: PwC, IDG Research Services, Microsoft, Ambassador

Looking ahead, the consensus is that technology will continue to drive the pace across the globe. Kaufman believes technology and big data present a significant opportunity for all lines in the insurance industry to enhance operational proficiencies and better understand the risks and needs of client. “People now get that technology, and enabling their business with technology, is no longer optional,” Howe says. “They know they can’t bury their head in the sand and hope it goes away.”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Arthur J. Gallagher

Kelly Financial

Founder Scott Kelly will continue to lead the company

Fairfax Financial Holdings

Tower Ltd.

Fairfax will pay $144 million for the New Zealand insurer

Fifth Third Bank

RG McGraw Insurance Agency

McGraw is the first of the bank’s planned insurance acquisitions in the coming years

Global Bankers Insurance

Pavonia Holdings

The $120 million deal includes Pavonia Life Insurance Company of Michigan, Pavonia Life Insurance Company of New York and Enstar Life

HUB International

Denali Alaskan Insurance

The Alaskan insurer specializes in property & casualty lines

RSG Underwriting Managers

Trident Marine Managers

Trident provides nationwide coverage for marine and energy operations

Willis Towers Watson

Office d’Assurances Aériennes G. de Cugnac

The French firm has a long-term relationship with the insurer

Chubb and MGA partner for new restaurant product

Hospitality MGA Innovative Coverage Concepts [ICC] has announced a partnership with major insurer Chubb to provide a new program for the upscale restaurant market. Program coverage includes $2 million aggregate liquor liability, broader wind and coastal capacity, and efficient quote turnaround times. “Partnering with Chubb … enables us to expand capacity and improve the limits, terms and conditions that make our program’s coverage significantly more attractive to commercial insurance brokers,” said Dean Carras, president of ICC.

H.W. Kaufman merges US and Canadian risk solutions operations

H.W. Kaufman Financial Group has combined its US-Reports and Canadian Reports divisions under one name, consolidating the loss control inspection, premium audit and risk mitigation services provided by both entities. The new resulting company, Afirm, “has the resources, technical expertise, training systems and technology to provide predictive analytics for its clients,” the company said in a statement. Afirm will also leverage the expertise of Torontobased Technical Risk Services, acquired by H.W. Kaufman in 2016, as well as Colorado-based Essential Insurance Services, acquired earlier this year.

Hippo prepares to launch home insurance offerings

Insurtech startup Hippo has appointed three fintech veterans to key leadership positions as it prepares for the commercial launch of its home insurance product in California. The company has already secured regulatory approval from the California Department of Insurance to provide its offerings in the state and is “currently in the middle of a closed beta program,” according to a company statement. Hippo raised $14 million in Series A funding last December and plans to roll out its product to homeowners in early 2017.

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PEOPLE Insurer covers ridesharing in Texas

Texas drivers will now get coverage for their cars as they offer ridesharing services. Mercury Insurance has announced the availability of the ridesharing insurance in the state to fill gaps in a driver’s car and commercial coverage. The cost of insurance starts at 50 cents a day, the company said. The policy will extend the driver’s personal auto insurance during the three periods of the ridesharing cycle: when drivers have turned on the app but haven’t taken a fare, when they are on their way to pick up a passenger and when they are driving passengers to their destination.

French insurer, automaker offer P2P car rental

PSA Group, the maker of Peugeot and Citröen cars, hopes to conquer the American market with a peer-to-peer car rental service. A key partner in the venture is French insurance firm MAIF, which will provide insurance on the vehicles. The service will be facilitated by TravelCar, another French company that provides a P2P car rental service at airports and train stations in Europe, which raised almost $16 million in capital from the automaker and the insurer. The service will begin April 1 at Los Angeles International Airport.

Insurance firms offer joint private flood program

Prospect General Insurance has announced a partnership with Palomar Specialty Insurance to provide flood coverage as an alternative to the National Flood Insurance Program. The Flood Guard product is based on advanced algorithms and is offered via an online platform; the companies have described the product as an “affordable” alternative to federal insurance. Flood Guard is also able to provide enhancements relative to the NFIP, including dwelling coverage up to $5 million and personal property coverage up to $1 million.

NAME

LEAVING

JOINING

NEW POSITION

Kim Ayers

Galaxy America

Leavitt Recreation & Hospitality Insurance

Agent

Robert Davis

RR Donnelly & Sons

Crystal & Company

Director, national sales and marketing team

John Fowle

N/A

Chaucer Syndicates

CEO

Jim George

N/A

Swiss Re Corporate Solutions

Global head of claims

Ryan Heimbold

Brown & Brown Insurance

Willis Towers Watson

Senior vice president of corporate risk and broking

Kris L. Hill

Liberty Mutual Surety

QBE North America

Chief financial officer

Andre Keller

N/A

XL Group

Chief investment officer

Michael O'Malley

O’Malley Public Policy Collaborations

American Insurance Association

Senior vice president for public policy

Mike Price

ESIX

Integro Insurance Brokers

Head, global sport team

Imran Qureshi

N/A

Willis Towers Watson

Midwest region leader

Stephen Robb

N/A

XL Group

Chief financial officer

Scott Weber

Stroz Friedberg

CNA Financial Corp.

Senior vice president, worldwide property & casualty claims unit

Jim White

Willis Towers Watson

JLT Specialty

Senior vice president

Major international Lloyd’s syndicate gets new CEO

The Hanover Insurance Group has announced the appointment of John Fowle as CEO of its member firm Chaucer Syndicates. Fowle succeeds Johan Slabbert, who left to pursue opportunities outside the company. Fowle joined Chaucer in 2002 and has held various leadership roles in the company, most recently as chief underwriting officer, where he facilitated the development and execution of Chaucer’s underwriting strategy.

Swiss Re Corporate Solutions appoints new global head of claims

Swiss Re Corporate Solutions has promoted Jim George to global head of claims. A licensed attorney who has been with the company since 1995, George previously served as head of claims for North America, where he was instrumental in creating the Corporate Solutions Claims Commitment. In his new role, George will oversee Swiss Re Corporate Solutions’ global claims organization and serve as a member of its Management and Business Management Committees.

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UPFRONT

WORKERS’ COMP UPDATE NEWS BRIEFS Nevada approves biggest workers’ comp decrease since 2004

Nevada insurance commissioner Barbara D. Richardson has approved an average decrease of 10.7% for voluntary insurance loss costs and an average 10.5% decrease for insurance assigned risk rates, following a filing from the National Council on Compensation [NCCI]. The decreases are attributed to improving workplace safety conditions in the state, and are the biggest since the NCCI’s 2004 filing, when loss costs decreased by 12.3%. Meanwhile, the decrease in assigned risk rates is the largest in the state’s history since workers’ compensation insurance was privatized in 1999.

Former California deputy convicted of insurance fraud

A California court has sentenced a former Orange County Sherriff’s Department deputy to six months in jail and three years of informal probation. Nicholas Zappas pled guilty to six misdemeanor counts of insurance fraud for not disclosing his true physical abilities to his healthcare providers. He was also ordered to pay almost $35,000 in restitution to the county and $1,000 to the Workers’ Compensation Fraud Assessment Fund. The ruling also requires Zappas to relinquish his 2011 and 2015 workers’ compensation claims.

Medical providers suspended from California system

California’s Division of Workers’ Compensation said it has suspended seven medical practitioners from the state’s workers’ compensation system following their conviction of workers’ comp fraud and medical fraud. The seven healthcare workers

are responsible for the filing of 8,500 liens worth at least $59 million. “We are moving quickly to use new anti-fraud tools at our disposal to suspend those proven to game the workers’ comp system at the expense of injured workers and employers,” said Division of Workers’ Compensation acting administrative director George Parisotto.

Florida launches online employer assistance program

The Florida Division of Workers’ Compensation has launched the Coverage Assistance Program, an online insurance company database, to assist business owners who want to get coverage for their employees. The database allows employers to search for suitable workers’ compensation insurance products from companies that offer them within the state. “Ensuring that Florida businesses have proper workers’ compensation coverage is crucial to the success of the entire workers’ compensation system,” said Tanner Holloman, director of the Florida Division of Workers’ Compensation.

Texas insurer gives grants to emergency responders

Texas Mutual Insurance Company and VFIS of Texas have teamed up to provide more than $200,000 in grants to almost 100 volunteer fire department and nonprofit emergency medical service organizations across Texas. The need-based grants will reimburse employees for various expenses, including certifications, training, and health and wellness programs. “These grants demonstrate our commitment to the prevention of accidents and the overall safety and wellness of volunteer firefighters and EMS workers in Texas,” said Rich Gergasko, president and CEO of Texas Mutual Insurance Company.

Valuebased care gains traction A new report reveals that more employers are looking to overhaul standard WC practices The US market loses serious dollars in lost productivity due to health-related conditions – more than $225 billion, according to a report by Carlos Luna, director of government affairs for MDGuidelines. In response, Luna says employers are looking for alternatives that would deliver the “best medical results at the best prices” for workers on the mend. That’s a key reason why the concept of value-based care is gaining traction among employers. In his report, Luna revealed that 40% of employers are exploring the possibility of implementing value-based care or highperforming networks in the coming year. “Specifically, industry leaders stress that the nearly 10-year movement to replace unsustainable fee-for-service models is finally making inroads and becoming a reality,” he said. “The majority of today’s physicians are still primarily paid for each patient encounter – a model that contributes to lengthy utilization reviews for treatment, rising costs and patient dissatisfaction.” Given this reality, Luna noted that stakeholders increasingly feel a need to jump-start value-based models. “As this shift continues, workers’ comp leaders will continue to see that value-based care ties provider payments to patient and financial outcomes,” he said. Luna cited two major benefits of the valuebased model. First, it standardizes care and reduces variations in its delivery. “One of the keys to controlling costs and improving

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outcomes is eliminating unnecessary variations in care, which can prolong health problems and delay an employee’s return to health,” he explained. Second, because the model relies on evidence-based protocols, it’s easier to achieve

Luna said. “But when physicians are paid for performance, compensation is based on the value of services and the overall impact on patients’ health.” In a broader context, Luna pointed out that 55% of Medicare accountable care organiza-

“As this shift continues, workers’ comp leaders will continue to see that value-based care ties provider payments to patient and financial outcomes” desirable cost and quality outcomes. Finally, value-based care provides incentives for better outcomes, in contrast to the fee-for-service model, where physicians are compensated based on the volume of services they provide. “More treatment equals more money – and is associated with more fragmentation, waste, redundancies and no assurance of quality,”

tions [ACOs] that adopted the model in 2015 realized shared savings, while nearly one-third earned shared savings bonuses. Another report published on the website Health Affairs concurred, saying that “while more ACOs are succeeding under the program, there continues to be substantial variation in financial performance and quality results. This

variation underscores that payment reform alone is not enough to improve quality and reduce costs, but rather that organizations must also transform the way care is delivered.” “Workers’ comp shouldn’t be left behind in this transformation,” Luna said, “and the good news is that there are more data and tools to support the shift than ever before.”

.®

www.summitholdings.com

Member of Great American Insurance Group

Policies are underwritten by Bridgeﬁeld Casualty Insurance Company and Bridgeﬁeld Employers Insurance Company, authorized insurers in AL, AR, FL, GA, IN, KY, LA, MS, NC, SC, TN and TX; BusinessFirst Insurance Company, authorized in FL, GA, KY, NC, SC and TN. RetailFirst Insurance company, authorized in FL; Retailers Casualty Insurance Company, authorized in AR, LA, MS and TX. ©2016 Summit Consulting LLC | 2310 Commerce Point Drive, Lakeland, FL 33801

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17/03/2017 6:08:23 AM

UPFRONT

TECHNOLOGY UPDATE

Lack of data is restricting cyber sales Deloitte advises insurers to tap cybersecurity data to maximize market opportunities

cyberattacks that makes providers circumspect when offering coverage. Thomas advised carriers to tap their own cybersecurity resources to break out of this cycle. “Insurers have robust security controls themselves,” Beazley cyber specialist Bob Wice told the Financial Times. “But it is amazing how few of the people on the product side spoke with their own security teams.” Meanwhile, a separate Deloitte report noted that “insurers have started to imple-

“Organizations are getting smarter about the coverage they buy”

There’s no doubt that cyber insurance has massive potential. However, a recent analysis from consulting firm Deloitte reveals that this segment is not realizing its full potential and is set for change as the market becomes more selective. “Organizations are getting smarter about the coverage they buy,” Deloitte principal Adam Thomas told the Financial Times.

NEWS BRIEFS

“They are starting to realize that cover for the masses does not apply to everyone.” Thomas added that businesses today are looking for more specific provisions, such as coverage for their supply chains, as well as third-party losses. To ride this wave of change, Deloitte said insurers must break what it calls the “vicious circle,” which stems from the lack of data on

Transportation insurer gets in on autonomous tech

Inching ever closer toward the ubiquity of self-driving cars on American roadways, Mobileye has installed collisionavoiding technology in 4,500 ridesharing vehicles in New York. The company, which specializes in autonomous driving, partnered with transportation insurer Atlas Financial Holding to outfit Uber and Lyft vehicles with the accident-prevention software. The team of vehicles will hit the roads this month, using high-resolution vision sensors to notify drivers of impending collisions in real time.

ment a more rigorous procedure for underwriting cyber insurance policies,” noting that the well defined process now includes asking the customer to take a risk selfassessment, along with a cyber risk assessment by the insurer and a third-party review of the customer’s cyber risk. Recommendations are then developed and premiums are calculated based on the assessments. Deloitte noted that current options provide for first- and third-party coverage, but that current risk models do not provide for protection from reputational risk, the removal of risk (where risk is transferred but not totally removed) or the replacement of an information security program. “Cyber insurance is only one element of risk management, and it will never be able to remove cyber risk entirely,” the firm also noted.

Liberty Mutual develops AI-enabled service

Liberty Mutual has created a portal that uses public and proprietary insurance information to help prevent accidents, and relies on artificial intelligence to assess damage and provide repair estimates. Developed through Liberty Mutual’s technology incubator, the Auto Damage Estimator uses claims photos to make a comparative analysis of the damage and provide a cost estimate. The software also analyzes public data on theft, parking citations and crashes to help drivers find the safest routes and parking spaces.

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Q&A

Christopher Ewing President and CEO

The marriage of insurance and the tech industry

ONE, INC.

Years in the industry 14 Fast fact One, Inc. raised $20 million in Series B funding in 2016, thanks to a hefty contribution from AXA’s venture capital arm

How would you assess the current climate for insurtech adoption in the US? We see the current climate for insurtech adoption in the US at an all-time high. Investors are starting to understand that insurance is a tech problem and that the reason why insurance companies are not innovating as fast as they should is a limitation. For those tech companies that can help insurance companies innovate quickly, there is a huge opportunity.

What factors would help encourage insurers to adopt technology at a faster pace? The key factors are speed to market, ease of implementation and integration, and a clear path to return on investment.

You offer software as a service [SaaS]. How is this an ideal entry point for an insurance firm to become more technologically adept? SaaS architecture allows carriers to innovate quickly and cost-effectively. On-premise, multi-year and expensive implementations do not make sense in today’s world.

You recently bagged $20 million in Series B funding from several VCs, including AXA. What are the advantages of having an insurer as a partner in your development strategy? It is critical that your investors bring more than money to the table. Insurance is a very complex business, and

Claims management software ﬁrm considering sale

Mitchell International, a firm that develops insurance claims management software, is considering a sale that will peg its value between $2.5 billion and $3 billion. Currently owned by private equity firm KKR & Co., Mitchell International has tapped Goldman Sachs and Morgan Stanley to provide advisory services on the transaction. According to a Wall Street Journal report, Mitchell’s main market is auto repair shops, which use its software to manage insurance claims and estimate repair costs, among other processes.

most investors do not really understand what it takes to win in this space and how hard it is, which can lead to bad decisions. What AXA brings to the table, as the largest global insurer in the world, is invaluable insight into the insurance space, business opportunities and a wealth of connections.

Observers fear that insurtech startups will overtake traditional insurers. But what advantages do carriers have that will help them compete in this space? The real winners in insurtech will ultimately be the companies that help traditional insurers innovate like the startups. Traditional carriers have the customers, money and brands to succeed – they need software partners and platforms that allow them to innovate.

What are some of the key points insurers should remember when developing and executing a digital transformation strategy? Don’t replace and repeat what you have been doing. Time matters. Projects that take over a year are hard, and projects that take over three years have failed before they start. To compete today, you must get things done quickly. Software matters. If you buy true software, you can leverage all the great assets that have been built before, and that will lower time, cost and risk. Try to use software as much out of the box as possible, as this will dramatically increase your chances of success.

Software solutions ﬁrm agrees to takeover

Insurance software provider StoneRiver has agreed to a $102 million takeover by Sapiens International. Sapiens will acquire StoneRiver’s product portfolio, composed of a policy administration suite, rating, underwriting, illustrations, reinsurance, and finance and compliance solutions for all major insurance business lines. “Joining forces with StoneRiver significantly expands Sapiens’ presence and scale in the North American insurance industry,” said Sapiens president and CEO Roni Al-Dor.

Data accuracy challenges hinder UBI adoption

In a recent report on usagebased insurance, Research and Markets found that the quality of data collected from telematics devices is a major hurdle to the adoption of UBI among insurers. The firm explained that the introduction of app-based UBI has provided a costeffective option, but added that “although this type of UBI eases the work for insurers, it creates challenges in the maintenance of data accuracy. It is estimated that data accuracy can vary about 50% depending on the smartphone used.”

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17/03/2017 6:08:46 AM

PEOPLE

INDUSTRY ICON

A NICHE SUCCESS STORY Tokio Marine HCC’s Bill Hubbard looks back on his career in specialty insurance – the challenging times and some extraordinary risk-transfer solutions

BILL HUBBARD entered the insurance industry in 1989, working for American Sports Underwriters, a specialist MGU writing disability for entertainers and athletes. There, Hubbard established a contingency division providing coverage for event cancellation, film, weather and prize indemnity. To reflect the diversification, the company changed its name to American Specialty Underwriters [ASU] and was subsequently acquired by the HCC Group in 2001. Asked about his career highlights, Hubbard recalls one particular event with ASU in 1998. “The 1998 Winter Olympics were in Nagano, Japan, and a sarin gas attack on a Japanese subway [a few years earlier] had created quite a panic,” he says. “As a result, the broadcaster of the Olympics wanted as much event cancellation insurance as they could get, and they came to us based on some difficult, high-limit disability placements we had done for them on a couple of unique television personalities. This was the first major international event ASU had done, so there was a lot of pressure on us to deliver. Obviously, when you attempt to put a mega-placement together after a terrorist event like that happens, there’s a great deal of noise and hysteria surrounding it. Pulling that off was a big one for us.” Hubbard also played an integral role at ASU in starting the first Lloyd’s consortium to be set up by a non-Lloyd’s entity. “In 1994, we launched The Enterprise Consortium for contingency and disability business, and that was a big game-changer for us as well, because up until then, we

had pretty much been doing mostly North American-based work,” he says. “Once we established an on-the-ground presence in the London marketplace, our reach and influence rapidly grew.” But that London operation was also the source of one of the most challenging times of Hubbard’s career, when, in 2004, its contingency team jumped ship en masse. “We were left with really no one to run the operation, and the departing team was anticipating all of our business to follow them,” he says. “We were determined to keep the operation going. So, for nine months, I worked

acquisition of HCC Insurance Holdings. Today, the combined entity is one of the world’s leading specialty insurance groups, although Hubbard points out that TMHCC is not driven by premium. “We are 100% driven by our operating profit,” he says. “Premium growth is not a statistic we are concerned with. Because of our expertise in the sports and entertainment markets, we are able to be involved in a number of ways on risk-transfer situations. Our contribution … isn’t limited to putting TMHCC’s capital at risk. Having a diverse toolbox gives us options to deal with complex,

“Because of our expertise, we are able to be involved in a number of ways on risk-transfer situations. Our contribution isn’t limited to putting TMHCC’s capital at risk” in London Monday to Friday. I’d fly back to Boston Friday night and go back Sunday night. I did that until we could find the right person to come in and lead it. That was pretty challenging and could not have been accomplished without tremendous support and understanding from my family.”

Specialist solutions Hubbard now heads the specialty division of the recently created Tokio Marine HCC [TMHCC], which formed last year following the completion of Tokio Marine’s $7.5 billion

high-risk situations in a variety of ways and has been key to our long track record of success.” Over his years in the specialty insurance business, Hubbard has been involved in a range of truly interesting risk-transfer solutions. “We have an eight-figure book of prize indemnity insurance, and it is the source of some of our more quirky writings,” he says. “For Nabisco, we insured a promotion where if someone could break the world record for stacking Oreo cookies – currently at 48 – they would win a million dollars.” He also recalls insuring a promotion for Red

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PROFILE Name: William F. Hubbard Company: Tokio Marine HCC Title: President and CEO, Specialty Group Based in: Wakefield, Massachusetts Years in insurance: 28 Fast fact: Prior to Tokio Marineâ&#x20AC;&#x2122;s acquisition of HCC Insurance Holdings, Hubbard was president and CEO of HCC Specialty Group. He has a bachelorâ&#x20AC;&#x2122;s degree and MBA from the University of Massachusetts.

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PEOPLE

INDUSTRY ICON

Robin Gourmet Burgers. “They did a promotion during the Pope’s last tour of the United States, where if the Pope came in to one of their locations and ordered food, everyone who went to a Red Robin that day would get a free crab cake.” There’s also one instance, involving insurance for a film studio, that stands out. “A movie was being filmed in Mexico, and the lead actor in that movie was in California and needed to be on set in two days,” Hubbard says. “This actor had a notorious reputation for being late [and] causing delays in these shoots. The studio wanted insurance ensuring that this person arrived on time. We wrote the risk, but

addition, we are doing some interesting things with the J-League, Japan’s professional soccer league. We’re getting a lot more phone calls from entities and people we had never traded with before.”

Looking forward Discussing the evolving risk landscape, Hubbard mentions the impact of cyber, which has become a growing concern for the insurance industry, including TMHCC’s event cancellation coverage. “Cyber risk is an area [in which] we are increasing our understanding and capabilities,” he says.

“Tokio Marine has on-the-ground operations in dozens more countries than HCC. We’re getting a lot more phone calls from entities and people we had never traded with before” with the proviso that we got to risk-manage the exposure, which we did by having one of our employees fly out to California and drive him to Mexico.” The business also has a substantial clientele of elite athletes. “We have a dominant market share of professional athletes, comprised mainly of the four major North American team sports and international football/soccer,” Hubbard says. And since last year’s acquisition, Hubbard says TMHCC’s specialty underwriting capabilities are now on the radar of a wider-reaching range of organizations. “Tokio Marine has on-the-ground operations in dozens more countries than HCC; thus, many more territories have opened up for us,” he says. “The Japanese Professional Baseball League is looking for us to use our experience with Major League Baseball to aid Tokio Marine in creating products to address the unique exposures Japanese teams face regarding the injury or illness of star players. In

Similarly, communicable disease is a major issue for events, especially conferences and trade shows. “In the past, we’ve had to deal with SARS, Legionnaire’s [and] swine flu,” Hubbard says. “Currently we are faced with Zika, and there is a potential avian flu situation that is simmering.” He also talks about a recent transaction the business completed with a view to more comprehensively protecting its insureds. “Last year, we acquired an operation called On Call, which is a travel assistance company,” Hubbard says. “They do many things, including pre-trip risk assessments, travel tracking and political/medical/natural disaster evacuations. We wanted to combine that with the kidnap and travel-related insurances we do so that we could come up with a holistic package that included not just insurance, but also delivery of the services around the insurance. “We see the world traveling more,” he adds, “but at the same time, we see the world becoming ever more dangerous and uncertain.”

TOKIO MARINE HCC BY THE NUMBERS

180

Approximate number of countries in which Tokio Marine HCC transacts business

100

Approximate number of classes of specialty insurance that Tokio Marine HCC underwrites

2,600

Approximate number of employees of Tokio Marine HCC

1974

The year in which Tokio Marine HCC (originally Houston Casualty Company) was founded

$31 billion

Market cap of Tokio Marine, the Japanese multinational insurance holding company that owns Tokio Marine HCC

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Beyond Security®

“Seasoned Professionals”

Michele Tran Production Underwriter Ultra Risk Advisors Seasoned Tourist General Star Broker

“I love to travel the world. In fact, when it comes to touring, I’m a seasoned professional! “My Med Mal partners at General Star are also seasoned professionals. Needless to say, their A++ rating and Berkshire Hathaway backing are impressive, but it’s their deep knowledge, longevity and specialization in health care risk management that are most important to me. “Whether I’m navigating Budapest for the first time, or tackling an unusual risk with General Star, I’m confident of a positive outcome. I rely on seasoned experience, including my team at General Star, to help me solve every challenge.” To locate the General Star broker nearest you, visit our website at www.generalstar.com.

© 2016 General Star National Insurance Company is licensed in the District of Columbia, Puerto Rico and all states. General Star National Insurance Company has its principal place of business in Stamford, CT and operates under NAIC Number 0031-11967. Insurance is placed with General Star National Insurance Company by licensed producers. General Star Indemnity Company is an eligible surplus lines insurer in all states, the District of Columbia, Puerto Rico, and the Virgin Islands. It has the status as an unlicensed insurer in California and operates under NAIC Number 0031-37362. Insurance is placed with the General Star Indemnity Company by licensed producers and, for risk that qualify, by licensed surplus lines brokers. Atlanta 404 239 6777

Chicago 312 267 8600

A.M. Best A++ XV

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Los Angeles 213 630 1930

S&P AA+

New York 212 859 3950

Stamford 203 328 5700

A Berkshire Hathaway Company

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17/03/2017 6:09:36 AM

SPECIAL PROMOTIONAL FEATURE

COMPANY PROFILE

Celebrating 65 years of success When Nord Krauskopf started K&K Insurance 65 years ago, no one could have envisioned just how much he and the company would achieve

SUCCEEDING IN today’s competitive insurance industry is tough. And doing so for 65 years? Almost unheard of. Try telling that to the folks at K&K Insurance in Fort Wayne, Indiana, which celebrates its 65th anniversary this year. Thanks to a staff whose bond is more like a family than colleagues, K&K’s growth over the past six and half decades has been nothing short of phenomenal. From its humble beginnings, K&K is now one of the biggest managing general underwriters in the country and is today a part of the Aon Corporation. The K&K story starts back in 1948 when an ordinary Fort Wayne businessman named Nord Krauskopf, a roofer by day, found himself drawn to the increasingly popular and highly dangerous sport of stock-car racing. He was

often spotted with his wife, Teddi, racing around local tracks. As is often the case with adrenaline junkies, consequences were pushed to back of mind. Although the racers contributed to a fund to cover medical and family costs in the event of an accident, the system was completely unsustainable; there was no true insurance coverage. So, in 1952, Krauskopf decided it was time to take action and set the goal of finding comprehensive coverage for race-car drivers. His first move was to track down a broker from Lloyd’s of London named Charles Lenz and present his vision. Most insurance companies were not prepared to take on race-car risks at the time, but Lloyd’s was interested in Krauskopf’s plan, which was to create a premium pool by

marketing his coverage to tracks and drivers across the Midwest. To qualify for K&K coverage, tracks would have to adopt a number of risk management practices, including annual track inspections, installing a blockhouse for the starter, and placing wire mesh in front of the stands and guardrails around the track. Impressed with Krauskopf ’s knowledge and attention to detail, Lloyd’s agreed to write the risks, and K&K Insurance was officially born. Now, 65 years later, the company employs more than 300 people and provides insurance to around 40% of America’s short-track facilities, 50% of its major speedways and 65% of teams racing in the major series. Since entering the insurance industry in the early ’50s, K&K has continued to inno-

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vate. “K&K went from the 1950s to the 1970s primarily focused on the motorsports area, and throughout that time, owned and sponsored the well known #71 K&K car,” says Todd Bixler, the company’s current president and CEO. “K&K helped grow the motorsports industry and grew to be the largest writer of motorsports insurance in the country. From initially offering medical coverage, we expanded into general liability and property coverage.” In 1980, Nord Krauskopf retired as chairman of K&K after developing it into a $10 million company; K&K continued to grow after being purchased by Lincoln National Corporation in 1984. “A big change occurred when Lincoln purchased K&K and provided the funding to start writing other sports and recreation orga-

Lita Mello, who’s been at the company since 1982 and is currently the senior vice president of the recreation division, credits the company’s success to its personnel. “The majority of the employees here today are experts in the industries we serve,” she says. “We have individuals who have at least 20 years of experience in areas like horse tracks, clubs, festivals and so on. That expertise not only sits in the underwriting divisions, but also in our claims department.” The fact that K&K was originally set up by a husband-and-wife team still resonates with the current staff. The firm’s underpinning philosophy of being creative and adaptable is still part of its culture. “As we’ve expanded, we’ve kept hold of the entrepreneurial spirit of serving the customers’

“We grew from program to program. We knew that if we could insure motorsports, we could insure other areas in sports and leisure that were also considered complex” Todd Bixler, K&K Insurance nizations,” Bixler says. “We grew from program to program. We knew that if we could insure motorsports, which was considered to be difficult, we could insure other areas in sports and leisure that were also considered complex.” Throughout its colorful existence, K&K has continued to pursue new opportunities, and today works with over 9,000 agents across the US in offering more than 70 specialty programs for risks such as amateur sports, arenas, aquariums and zoos, bowling centers, campgrounds, destination resorts, family fun centers, festivals, health clubs, horse and dog tracks, intercollegiate sports, dance, martial arts, and gymnastics. In 1993, the company was purchased by Aon; since then, K&K has continued to work with agents to provide coverage to individuals and organizations in the sports, leisure and entertainment industry. After 65 years in business, K&K shows no signs of slowing, but how does an organization achieve such longevity and sustained growth?

needs in customized ways,” says Mark Beck, senior vice president of K&K’s mass merchandising division. “Nord and Teddi had a mission to solve problems that existed, and insurance was the mechanism to do that. From there, we today find ways to deliver solutions and solve problems in a creative, enthusiastic way.” K&K’s history is truly impressive, but the company isn’t about to rest on its laurels. Nord Krauskopf definitely wasn’t when he took brave strides in 1952, or when he pushed K&K to new levels throughout the ’60s and ’70s, and the organization’s current leaders view accelerating K&K’s growth as a top priority. “The sports, leisure and entertainment industry is continuing to grow, and K&K intends to grow with it and expand our programs, coverages and reach,” Bixler says. “We have more programs available to agents today than 10 years ago, and I see us continuing to bring on more products and programs to our customers.”

K&K INSURANCE TIMELINE

1952

Nord Krauskopf starts marketing motorsports insurance

1970

Krauskopf’s team wins the Grand National Points Championship

1977

Premiums reach $5 million

1980

Nord Krauskopf retires

1984

Lincoln National buys K&K

1989

Premiums reach $100 million

1990s

K&K acquires several sports and recreation producers, expanding program offerings

1993

Aon Corporation buys K&K Insurance

1997

Premiums reach $200 million

2002

K&K celebrates its 50-year anniversary

2013

K&K insures more than 100,000 clients

2014

K&K exceeds 9,000 agent customers

2017

Premiums are expected to exceed $400 million

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS

AMERICA’S LEA D

MANAG E Protecting major companies from threats of all shapes and sizes, these 71 men and women are at the forefront of managing our nation’s growing risks

INDEX OF LEADING RISK MANAGERS COMPANY

PAGE

American Airlines Group Inc.

NAME

COMPANY

PAGE

28 Jennifer Saddy

Cleveland Clinic

Amtrak

24 Phil Balderston

Archdiocese of Indianapolis

28 Mike Witka

AT&T

Bank of America

NAME

COMPANY

PAGE

44 Charles Kolodkin

Ford Motor Company

29 Dave Webb

Columbia Sportswear

28 Cameron Williams

Fox Entertainment Group LLC

24 Kirsten Dial

Comcast

44 Donald Aspinall

GPS Hospitality

25 Sally Detter

Cook Group Inc.

32 Nada Jandrich

Hilton Worldwide

29 Denis McCarthy

24 Geoffrey S. Greener

Costco Wholesale

34 Dale Anderson

Honeywell International

25 Paul Piazza

Best Buy Co. Inc.

43 Mary Peter

Dallas/Fort Worth International Airport

37 Michael Yip

Hyatt Hotels

42 Mark Baker

BP Energy Company

43 Gary Taylor

Dole Food Company

42 Jeff Stolle

Iron Mountain

44 Jack Faer

Burberry

38 Holly Wentzel

Dollar Tree Stores

43 David Jewell

Keck Medicine of USC

32 Josh Hyatt

Caterpillar Inc.

36 Rob DeCamp

E. & J. Gallo Winery

40 Jeff Wilson

Kimberly-Clark Corporation

36 Ray Van Eperen

Charles Schwab

35 Nigel J. Murtagh

Exelon Corporation

43 Michael Mee

The Kraft Heinz Company

43 Toni Herwaldt

City of Los Angeles

25 Zernan S. Abad

Facebook

Helen Chue

Lockheed Martin

38 Scott Williams

City of Philadelphia

37 Barry Scott

Fiat Chrysler Automobiles

Sigmund E. Huber

Loews Hotels

36 Karen Beam

Jennifer De La Torre

NAME

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DING RISK

G ERS 2017 THE MODERN business world is inundated with

evolving technology and emerging risks, threatening the operations and livelihood of companies across the country and in every industry. Tasked with keeping potential threats at bay, risk managers work to create processes and procedures to mitigate and prevent loss –

COMPANY

PAGE

Lyft

COMPANY

PAGE

NAME

COMPANY

PAGE

44 Melissa Gale

Simon Property Group

Michael Horvath

UPS

25 Mike Fenlon

Merck & Co. Inc.

40 Eric Dobkin

Smithsonian Institution

39 Katherine Tkac

Verizon Enterprise Solutions

29 Mike Kimiecik

Mercy Medical Center

27 Kay Crist

Sprint Corporation

33 Cason Coplin

VW Credit

34 Richard Vassar

Merrick & Company

24 Carter Boardman

St. Joseph Health System

40 Lisa Ramthun

Walmart

42 Bob Pastore

Molson Coors Brewing Company

32 Rafael Castillo

Walgreens Boots Alliance

37 Michael McGarry

Nike

40 Lee Bradley

St. Jude Children’s Research Hospital

Walt Disney World Resort

30 Michele Adams

SunEdison

42 Sara Kane

Wawa Inc.

Tiffany & Co.

26 Laura Woop

Turner Broadcasting System

Wells Fargo & Company

30 Michael J. Loughlin

29 Neil Walls

The Wendy's Company

44 Bob Bowman

Noble Energy

NAME

and they rely on insurance brokers as a major piece of that puzzle. Representing corporations from major municipalities and museums to adventure-wear manufacturers and wineries, these 70 risk professionals are committed to protecting the integrity of some of the world’s most recognizable brands.

38 David Gresko

LaKeisha Sisco-Beck

NAME

Douglas Schultz

Oracle

30 Thomas Iurlano

PepsiCo

26 John Adams

Procter & Gamble

Christopher Gallagher

Tyson Foods

30 Brian Rogers

WGL

26 Nigeria Bloczynski

Ruby Tuesday Inc.

Michael Barrett

United Continental Holdings

34 Andy Nottestad

Zappos.com Inc.

33 Nicole Moya

Sears Holdings

38 Larry Jenchel

United Technologies

26 Connie Bartels

Zaxby's Franchising

26 Deborah Andrews

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS CARTER BOARDMAN Vice president, contracts and risk management Merrick & Company Greenwood Village, CO

PHIL BALDERSTON Director, risk management Amtrak Washington, DC

According to the National Transportation Safety Bureau, nearly 1,000 people are killed in train-related accidents each year. Since 2012, Phil Balderston has served as director of risk management for Amtrak, keeping his finger on the pulse of these

everyday risks and exposures. Operating more than 300 trains daily, Amtrak serves more than 500 destinations, covering 21,000 miles across 46 states, the District of Columbia and three Canadian provinces. Prior to joining Amtrak, Balderston worked for major insurance brokerages Arthur J. Gallagher and Marsh, and served as director of the Children’s Hospital of Philadelphia.

For 16 years, Carter Boardman has served as director of contracts and risk management for civil engineering firm Merrick & Co., and was elected as the company’s newest vice president in late 2016. He now also oversees risk management in Merrick & Co.’s UK offices, in addition to managing contract and consultant agreement preparatory work and administration for all federal, municipal and private-sector projects in the US, Mexico and Canada. As head of risk, Boardman works directly with brokers and major underwriters on the company’s insurance needs, and with outside support services for legal and other special insurance requirements. Boardman has nearly four decades of experience in contract/subcontract administration for a wide range of foreign and domestic engineering and construction projects, including hydroelectric, wastewater, mineral and oil & gas projects.

KIRSTEN DIAL Director, risk management Fox Entertainment Group Los Angeles, CA

An estimated 111 million Americans tuned into Fox to watch the Super Bowl this year. One of the most recognizable entertainment companies in the US, Fox Entertainment Group operates filmed entertainment, television stations, television broadcast networks and cable network programming. Kirsten Dial handles the corporate risk management for the media giant, which owns the 20th Century Fox film studio, Fox television network and more. An entertainment insurance broker, underwriter and risk manager, Dial oversees the risk management for feature, television, movie-of-the-week, direct-tovideo, sports, news and reality productions.

GEOFFREY S. GREENER Chief risk officer Bank of America Charlotte, NC

In 2016, Bank of America was ranked as the 11th largest company in the world by Forbes. As Bank of America’s chief risk officer, Geoffrey Greener is responsible for overseeing the company’s governance

and strategy for global risk management and compliance. Since joining the bank in 2007, Greener has held a variety of senior roles, including enterprise capital management executive and head of global markets portfolio management. He also has chaired the bank’s Global Markets Capital Committee and its Global Banking and Markets Regulatory Reform Executive Committee.

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PAUL PIAZZA Vice president, risk management Honeywell International Morristown, NJ

Paul Piazza has been with home products manufacturer Honeywell International for 11 years, serving as vice president of corporate risk management as well as assistant treasurer. He oversees the company’s global property & casualty programs, which include two captives, management/financial lines and several liability programs for the company’s various operations, including aviation, nuclear, environmental, marine/transit and professional services. Piazza and his team are also responsible for M&A due diligence and the placement of representation and warranty policies. Piazza started out in insurance as an underwriter and claims professional at AIG before taking on risk management positions in various companies, including Hilton Hotels and Barnes & Noble.

SALLY DETTER Director, risk management GPS Hospitality Atlanta, GA

Sally Detter manages all aspects of the property & casualty program, claims management, safety and loss control, and risk exposure analysis and mitigation for GPS Hospitality, which owns and operates more than 430 Burger King and Popeyes restaurants in 14 states across the country. Prior to her current role, Detter worked in risk management for several major corporations, including Hooters and Hartsfield Jackson Atlanta International Airport.

ZERNAN S. ABAD Senior risk manager City of Los Angeles Los Angeles, CA

Experienced risk management professional Zernan Abad has worked in city risk management for well over a decade, a career that has taken him across five different departments. In 2005, he took on the role of risk manager and created risk management best practices for the Los Angeles Department of Recreation and Parks. He then moved on to the risk management and audit

division of the Los Angeles Department of Transportation before taking on his current position as a senior risk manager in the city’s central risk management office, where he oversees its insurance compliance system, manages the city attorney’s Attorney Conflicts Panel Program, and provides assistance to the mayor’s office on citywide risk and liability issues. According to Abad, the city’s main risk issue for 2017 is workforce health and safety, which involves leveraging technology by implementing a risk management information system that will properly monitor the city’s risk and liability profile. “The risks to the City of LA have evolved tremendously over the past decade and in recent years,” he says. “Hazard risks are no longer the major focal point, and the city’s enterprise risk portfolio has become more diverse and complex.” Among the latest exposures facing the city, Abad highlights risks like terrorism, cyber, aircraft (use of drones), special events (LA’s bid to host the 2024 Olympics), transportation (electric vehicle ridesharing), ADA, pension, technology and increased police litigation, as well as new political risks involving the potential for federal funding removal and major immigration travel and residential policy reform.

MIKE FENLON Senior director, global risk management UPS Atlanta, GA

Mike Fenlon heads global corporate risk management for the world’s largest package delivery company, UPS, which serves more than 220 countries and territories. Since 1993, Fenlon has been responsible for a wide range of liability programs, including auto, cargo and warehouse, property, aviation, management, and general liability, as well as management of all property & casualty claims. He is also in charge of two captive insurance companies, and is a core member of the company’s Enterprise

Risk and Crisis Management Steering Committees. Fenlon has been an active member of RIMS for nearly two decades, where he has served in various capacities for the Atlanta chapter, and he is currently a member of the External Affairs Committee on the national level.

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS

LAURA WOOP Director, risk management and credit services Tiffany & Co. New York, NY

Tiffany & Co. continues to be a power luxury brand, as witnessed by its sales growth in Asia-Pacific region in late 2016 – a 7% increase in total sales and 16% for Japan alone. Laura Woop has been with Tiffany’s finance division since 1991 and took on various positions before becoming director of risk management and credit services. Woop is responsible for the company’s global insurance programs and operational risk management, and for addressing risks related to fraud, payments and credit. Woop also manages the company’s private-label credit program, which includes credit extension, customer relations and collections.

CONNIE BARTELS

NIGERIA BLOCZYNSKI

Senior director, risk management United Technologies Farmington, CT

Director, risk management WGL Washington, DC

Air-conditioning company Carrier made headlines last November after striking a deal with newly elected President Trump to keep nearly 1,000 jobs in Indiana instead of moving them overseas. As one of the companies in United Technologies’ portfolio, Carrier is just one brand that Connie Bartels oversees risk management for. Her responsibilities include managing the company’s property & casualty hazard risks through risk financing, captive funding, and insurance placements and services. Additionally, Bartels serves as a chapter officer of the Fairfield/Westchester chapter of RIMS.

A leading source for energy solutions in 30 states, WGL provides natural gas, electricity, green power and energy services. Directing the entity’s daily risk assessment is Nigeria Bloczynski, who is responsible for market, credit, enterprise and certain operational risks at the energy company. Relying on more than 15 years of experience in the capital markets, structured products and energy industry, Bloczynski has developed new business and strategy assessment processes within WGL to help identify and monitor risks associated with new initiatives before the company commits to executing transactions.

DEBBIE ANDREWS

JOHN ADAMS

Senior director, risk management and insurance Zaxby’s Franchising Athens, GA

Head of enterprise risk management PepsiCo Purchase, NY

Zaxby’s has delivered flavorful chicken meals since the 1990s. Today, the restaurant chain offers franchising opportunities for restaurateurs, and has become the fastest-growing chicken chain in the nation, boasting more than 700 locations in 17 states. As the company’s senior director of risk management and insurance, Debbie Andrews partners with Zaxby’s leadership to ensure risks are identified and proactively managed for the franchise chain.

As head of enterprise risk management at food and beverage giant PepsiCo, John Adams provides leadership to the senior management team on significant strategic, operational, financial and reputational risks, and works with the company’s businesses to develop the strategies, processes and tools for risk mitigation. Prior to his current position, Adams served in various roles at PepsiCo, including as head of investor strategy, CFO for the company’s global procurement

organization and VP of finance for its international beverage division. Adams is also a member of the Board of the Business Consortium Fund, the nation’s most comprehensive financing and business support organization dedicated exclusively to serving mid-sized to large minority-owned businesses. He also sits on the advisory committee of the Center for Excellence in Enterprise Risk Management at St. John University’s Peter J. Tobin College of Business. FAST FACT

The first American slogan for Pepsi was “Twice as much for a nickel”

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KAY CRIST Risk manager Mercy Medical Center Cedar Rapids, IA

Serving as both controller and risk manager for Cedar Rapids' Mercy Medical Center, Kay Crist’s responsibilities began with ensuring adequate coverage for the center’s buildings and equipment, and have now significantly expanded with the growth of the organization. Mercy Medical Center faces risk issues related to natural disasters such as flood and tornado, as well as the ever-present cybersecurity risk, which will remain at the top of Crist’s agenda for the near future. To help manage these risks, Crist looks for an insurer partner “that anticipates our needs and keeps abreast of changes within the organization, such as new services, so they can ask the right questions and ensure we have appropriate coverage.”

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS CAMERON WILLIAMS Director, global risk management Columbia Sportswear Portland, OR

For more than 70 years, Columbia Sportswear has designed gear that allows adventurers to enjoy the great outdoors. Since 2010, Cameron Williams has been leading risk management initiatives for Columbia, working from the company’s home base in Portland and drawing on a background in corporate risk management and insurance broking. Prior to joining Columbia, Williams was an account executive for Aon Risk Insurance Services West, before which he spent 10 years at Nike, where he was responsible for managing the sportswear giant’s global risk control function, property & casualty and executive risk coverages, and insurance captive. Williams has identified cyber-related risks as Columbia’s main concern in recent years, “like many organizations that live in the direct-to-consumer space.” To address these risks, he has had to look not only at contractual risk transfers, but also at risk mitigation with the help of the IT teams. Another major challenge for Williams is making sure that risk management and mitigation are duly integrated into Columbia’s operations outside the US, which requires his team “to understand the unique business environment at [the] country level.” Given his extensive background in insurance, Williams values a close working relationship with underwriters, and enjoys helping them to “see beyond what they find on the application, the internet or in other public-facing information” and recognize the company’s management and internal efforts toward risk mitigation.

JENNIFER SADDY Director of workers’ compensation, corporate insurance and risk management American Airlines Group Fort Worth, TX

Jennifer Saddy’s earliest involvement and first major project for American Airlines Group was overseeing workers’ compensation and risk management amidst the merger of two of the largest airlines in the country – American Airlines and US Airways – which led to the formation of the company. Saddy has been involved in workers’ compensation for more than 15 years, and this remains one of her key responsibilities within AAG. Her accomplishments have been highlighted in a number of publications and at industry events, making her a highly profiled risk professional. Saddy was one of the key presenters at the 2016 National Workers’ Compensation and Disability Conference last December, during which she shared the details of their success in claim settlements with the help of two partner companies.

FAST FACT

Together with regional partner American Eagle, AAG offers an average of almost 6,700 daily flights

MIKE WITKA Director, risk management and parish financial services Archdiocese of Indianapolis, IN

Entering the insurance business straight out of college in the 1970s, Mike Witka worked on the carrier, broker and agency sides of the industry before moving into risk management. Today, he leads the placement of insurance to protect assets and personnel for the entire Archdiocese of Indianapolis enterprise, which covers more than 39 counties, 130 parishes,

JENNIFER DE LA TORRE Executive director, risk management AT&T Dallas, TX

Previously director of workforce diversity, Jennifer De La Torre became head of risk management at AT&T in May 2015. De La Torre’s previous experience in workforce diversity has involved analyzing its effects on workers’ compensation and disability management, which has undoubtedly strengthened her understanding of this particular type of insurance and the related risk management strategies and measures. Since 2010, De La Torre has been a member and fellow of the Claims and Litigation Management Alliance, an industry organization designed for claims and litigation management professionals. 69 schools and six Catholic charities throughout central and southern Indiana. “I felt called to help the church in her need for risk management and bringing the attention of a proper blend of self-insurance, insurance, risk management and financial responsibility to the position,” Witka says. With the advent of terrorism and cyberattacks in recent years, Witka has had to think differently about handling risks for the archdiocese in today’s world. “For this year, I am concentrating on security issues in all of our locations,” he says. “Locked buildings have never been the way of the church, but society has made us more aware of the dangers to open buildings versus the safety of our employees and schoolchildren.”

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17/03/2017 7:06:28 AM

MIKE KIMIECIK Associate director Verizon Enterprise Solutions Denver, CO

DAVE WEBB Director, global risk management Ford Motor Company Dearborn, MI

Ford recently announced its intention to have fully autonomous cars on the road by 2021, following a growing trend among

automakers that will inevitably expose the industry to new risks. Responsible for managing insurable risks for Ford and its global affiliates is Dave Webb, the company’s director of global risk management. Webb is also responsible for handling foreign exchange, commodity, interest rate and counterparty risks for Ford.

DENIS MCCARTHY

NEIL WALLS

Chief risk officer Hilton Worldwide Washington, DC

Director, risk management Turner Broadcasting System Atlanta, GA

A globally recognized hotel brand, Hilton’s 13 distinct brands encompass more than 4,800 properties across 104 countries and territories. Chief risk officer Denis McCarthy has been with Hilton since 2009, first serving as SVP of finance and corporate controller. Prior to Hilton, McCarthy was EVP and chief accounting officer for Interstate Hotels and Resorts, a hotel management company with brands such as Marriott and Wyndham.

Most Americans are familiar with CNN, TBS, TNT, Cartoon Network and the many other news, sports, entertainment, animation and young adult programs that are created by Turner, a global media company. A former senior risk manager for the company, Neil Walls has served as Turner’s director of risk management since 2014. Prior to Turner, Walls held the role of regional risk manager for Macy’s.

Mike Kimiecik leads the global security management and cyber risk programs at Verizon Enterprise Solutions. With more than 25 years of experience in the telecommunications industry, Kimiecik has spent the past 15 years focused on network and cybersecurity. First starting his career on the network side of the business, Kimiecik became involved in cybersecurity engagement, responsible for security operations in the private and public sector. Prior to Verizon, Kimiecik held leadership roles with Equant, Global-One and Alcatel Data Networks, and engineering roles with Alcatel Data Networks, Sprint, GTE and the federal government. He is also a US military veteran, having served six years in the US Coast Guard. Today, Kimiecik focuses on the continued evolution and development of sales and service delivery for the company’s security management, application security and cyber risk programs. “There is always a constant state of flux with emerging technologies entering the space,” he says. “At the same time, many of the same issues continue to occur, as companies have often become more focused on compliance as oppose to risks. Security is key for everyone in an organization, not just the security teams. We have found that 80% of attacks are motivated from an opportunity for financial gain. Doing basic things to protect yourself and your assets are critical, such as reducing risk through regularly conducted assessments of your environment to identify risks, and take appropriate action to prevent or reduce the likelihood of a cyberattack.”

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS BRIAN ROGERS Manager, corporate insurance Tyson Foods Fayetteville, AK

The world’s largest processor and maker of protein food products, Tyson Foods sells to retailers throughout the US and in 130 countries worldwide. As manager of corporate insurance, Brian Rogers manages the casualty, property, cargo/marine and product recall insurance programs for Tyson. Prior to his current position, Rogers served as senior risk finance analyst for the company, managing Tyson’s $400 million subsidiary insurance company.

MICHAEL J. LOUGHLIN Senior executive vice president and chief risk officer Wells Fargo & Company San Francisco, CA

As chief risk officer and SEVP at Wells Fargo, Michael Loughlin oversees all risk-taking activities at the bank, including credit, market, operations, compliance and IT risks, as well as financial crimes risks like the bank’s recent sales scandal. Taking the helm as chief risk officer in 2006, Loughlin serves as the leader of Wells Fargo’s corporate risk group, and also serves on the company’s Operating and Management Committees.

MICHELE ADAMS Vice president, risk management services Walt Disney World Resort Orlando, FL

THOMAS IURLANO Director, global risk management Oracle Redwood Shores, CA

One of the solutions Oracle provides is governance, risk and compliance management, which the company describes as “a unified approach that equips organizations to set clear accountabilities for risk management.” This compels Oracle to demonstrate the quality of its product through its own enterprise risk management. As director of global risk management, Thomas Iurlano’s responsibilities include ensuring consistency in quality and acceptability of risk level for consulting bids across the globe, overseeing compliance for all major projects in terms of documented practices and procedures, and promoting standard risk management practices across all emerging business sectors through the help of different divisions and global service lines.

Believing it a worthy cause to help Disney keep its reputation as the happiest place on earth, Michele Adams decided early on to align her skills to the company’s needs; she first joined Disney as a claims adjuster, where she diligently took on various tasks ranging from managing provider relations to handling data analysis, and was soon promoted to director of claims management and business strategies in 1996. In early 2015, Adams became vice president of risk management services, and now leads all aspects of the resort’s risk management program while maintaining expertise on claims management, data analytics and technology. Adams is a member of the Alliance of Women in Workers’ Compensation and was recently inducted to the Florida Workers’ Compensation Hall of Fame. She is also past co-chair of the Medicare Advocacy Recovery Coalition.

FAST FACT

On opening day of Walt Disney World in 1971, an admission ticket was only $3.50

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SIGMUND E. HUBER Director, global supplier relations and risk management Fiat Chrysler Automobiles Auburn Hills, MI

A former bankruptcy and corporate lawyer, Sigmund Huber’s previous role as in-house counsel for FCA US often saw him supporting the purchasing group on risk management issues and general corporate contracts. That experience helped pave the way to his career today in supplier risk management. First joining FCA US in 2008, Huber was appointed in 2015 to his current role as director of global supplier relations and risk management, where he is responsible for improving supplier and industry relations, supplier risk management and much more. Working in such a dynamic industry allows Huber to manage unique risks and challenges related to the supply chain.

“In the auto industry, we are a little unique from other industries in that we have a very high dependence on our supply base,” he says. “If a supplier is having operations issues and can’t supply, in other industries, you can change suppliers relatively quickly. For us, that is not possible due to the complexity of the parts and the requirements to comply with safety and other regulations.” To combat the risks associated with the depth of the auto supply chain, Huber and others are working to map the best route for lower-tier suppliers. “Currently we have visibility with the companies that we have purchase orders with,” he says. “But when you get below that, our visibility gets murky. That’s one of the key trends right now in the automotive industry – to gain greater visibility in order to better manage risks in the lower tiers of the supply chain.”

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS JOSH HYATT Executive director, office of integrated risk management Keck Medicine of USC Pasadena, CA

With more than 25 years of experience in healthcare and risk management and a background in fields such as mental health, federal and state regulations, risk management, healthcare compliance, and education, Dr. Josh Hyatt currently serves as executive director of integrated risk management for Keck Medicine of USC. Starting his career as a mental health counselor, Hyatt became licensed as a healthcare risk manager after becoming interested in the diverse curriculum. Today, he leads the office in monitoring and mitigating operational risks within the health system, which includes three hospitals and multiple outpatient centers. “We have a boundless number of patient safety issues that we look at on a day-to-day basis,” he says. “In healthcare, we focus on patient safety because if you prevent harm to patients, you will often prevent loss in the long-term to the institution.” Hyatt points out that the healthcare industry is highly regulated, which ties in closely with risk management. “When you walk into a hospital, everything you do is regulated, except for when you go into the bathroom and close the stall door,” he says. “In healthcare risk management, you have to understand how everything works. This is such a dynamic and evolving discipline, and that’s why I have been in it for so long.” In addition to his role at Keck Medicine, Hyatt is also president of the Southern California Association of Healthcare Risk Management, and serves as faculty for the American Society for Healthcare Risk Management, where he teaches the Certified Professional in Risk Management [CPHRM] designation course to help a new generation enter the healthcare risk management environment.

RAFAEL CASTILLO Director, global risk management Molson Coors Brewing Company Golden, CO

Rafael Castillo joined Molson Coors as risk manager amidst the company’s national expansion in 1987, and three years later became the director of risk management. Since then, Molson Coors has grown into a global business. In 2007, Castillo introduced enterprise risk management to the company; he continues to manage that program today. For Castillo and his team, risk management is all about strategic collaboration – analyzing how risks can be dealt with and mitigated to help achieve business goals and improve the bottom line.

NADA JANDRICH Director of insurance Cook Group Bloomington, IL

Over the past three decades, Nada Jandrich has worked for Cook Group, a family-owned medical device

manufacturer serving 135 countries worldwide. She’s spent the last 12 of those years in risk management, currently serving as director of insurance for the company. “I was interested in this position because it’s so exciting and dynamic,” Jandrich says. “It allows me the opportunity to provide real value to the corporation through various risk-transfer options and strategic data analysis.” For Cook Group, which builds medical devices for more than 40 medical specialties, risks and exposures are plentiful and ever-changing. Managing a dynamic insurance program with upwards of 125 insurance policies, Jandrich relies on a wide range of insurance carriers, including accessing markets in Bermuda and London to cover exposures related to the manufacturing of medical equipment. “Tolerance is changing globally, and we are seeing more regulatory scrutiny on cyber and directors & officers liability,” she says. “Also, renewals in general are requiring more meaningful submissions. Risk concerns continue to increase exponentially. You can’t be short-sighted and manage from your desk. I now work in close partnership with brokers and insurers.”

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LAKEISHA SISCO-BECK Enterprise risk manager and counsel St. Jude Children’s Research Hospital Memphis, TN

LaKeisha Sisco-Beck found her calling when she began her first job as a registered nurse; the orientation process included a segment with the hospital risk manager. “During that session, she discussed key laws that impact the day-to-day work of healthcare providers,” Sisco-Beck says. “She also described her role in coaching staff through challenging patient/family situations, working to navigate medicalethical dilemmas, and working with

clinicians and hospital leaders to manage patient safety events and resulting claims. I knew then that I had found my niche.” After later becoming a hospital risk manager and then working as an attorney for a few years, Sisco-Beck joined St. Jude Children’s Research Hospital, the organization that pioneers the way the world understands, treats and defeats childhood cancer and other life-threatening diseases. She now works with the organization’s chief legal officer to lead risk management efforts enterprise-wide. Thanks to her unique credentials as a registered nurse, attorney and certified professional in healthcare risk management, Sisco-Beck is an expert on legal and risk management issues in the healthcare arena. “My concerns have broadened in scope over time,” she says, “moving from concerns about processes governing incident management and incident resolution to concerns about our ability to identify emerging risks and develop processes to manage emerging risks more proactively.”

NICOLE MOYA Risk manager Zappos.com Seattle, WA

CASON COPLIN Vice president, risk management and customer profitability Sprint Overland Park, KS

Cason Coplin is vice president of risk management and customer profitability at Sprint, which, with 59 million US customers, is the fourth-largest mobile network in the country. In addition to serving in a variety of roles for the mobile and internet service provider through the years, Coplin also founded EcoFit LED Lighting and was a co-founder of the Clayton Early Childhood Center.

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In an era when online retailers are quickly rising to the top of the pack, Zappos is no exception. The online shoe and clothing store reached $1 billion in annual sales in 2008; the following year, it was acquired by Amazon for a reported $1.2 billion. Dealing with online customers comes with its fair share of risks, such as the 2012 breach of Zappos’ computer system, which compromised the information of more than 24 million customers. Nicole Moya recently returned to Zappos in the role of risk manager after serving as risk analyst for Amazon; prior to that, she served as risk management manager for Zappos from 2011 to 2015.

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS ANDY NOTTESTAD Director, corporate insurance United Continental Holdings Chicago, IL

RICHARD VASSAR Director, risk management & insurance VW Credit Washington, DC

Though it has been a grueling couple of years for Volkswagen following the diesel emissions scandal, the $1.2 billion settlement by the company was recently deemed “credit positive” by Moody’s Investor Services – no doubt welcome news for Richard Vassar and his colleagues at the automaker’s financial

service arm, VW Credit. Vassar joined Volkswagen Group of America in 2008, where he served as risk manager for more than five years before moving to VW Credit in 2013. His career has primarily revolved around “the business end of the insurance transaction,” and in 2009 he received an award for his achievements at Volkswagen Group. Vassar is also the author of the book Hide! Here Comes the Insurance Guy: Understanding Business Insurance and Risk Management.

Airlines face huge risks due to myriad reasons. Recently, a number of airlines experienced power outages that not only delayed flights but also demonstrated their vulnerabilities to possible cyberattacks, thus emphasizing the need for thorough insurance coverage and seamless risk management. As director of corporate insurance for the corporation that operates United Airlines, Andy Nottestad leads a group of insurance managers and claims professionals in managing the company’s global insurable risks by performing risk assessments and mitigation, and arranging risk financing through traditional and alternative techniques. An alumnus of the University of Wisconsin, Nottestad regularly visits his alma mater to speak to students of the risk management and insurance program, sharing his industry knowledge and career insights.

compliance and safety. One notable project Anderson oversaw was compliance for Costco’s warehouses, which involved addressing the risk of

hazardous material spills and waste, along with and other management issues, through partnership with an environmental solutions provider.

DALE ANDERSON Director of risk management Costco Wholesale Issaquah, WA

Dale Anderson has worked on risk management within the hospitality industry, and has also served as general manager for projects related to government contract business. For more than two decades, he has served as director of risk management for Costco Wholesale. He holds a range of responsibilities, from corporate risk management and risk finance and control to overseeing Costco’s global insurance programs, captive and workers’ compensation. Anderson is also charged with ensuring corporate disaster preparedness and business continuity,

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17/03/2017 7:06:53 AM

NIGEL MURTAGH Executive vice president, corporate risk Charles Schwab San Francisco, CA

Originally joining investment firm Charles Schwab in 2004 as chief credit officer, Nigel Murtagh’s role expanded in 2009 to include the company’s corporate risk management program. “As a risk manager, you have to keep your eye on all the risks, even the ones you have well managed, or they will turn into problems,” Murtagh says. “Currently, it’s the types of issues that come from the outside, the risks you don’t select, that we are focusing on. For example, cybersecurity risks, where you can be attacked from anywhere in the world, and regulatory risks are not things you ‘select.’ Regulations can change the business or have meaningful impacts on the business, and it is not something you choose to enter into.” In his role as EVP of corporate risk, Murtagh is responsible for enterprise risk management for Charles Schwab, including Charles Schwab Bank, working to identify credit, market and operational risk for one of the world’s largest discount brokerages. “The key for Charles Schwab is where we started – to be the most trusted firm in financial services with the strategy to see the world through our clients’ eyes,” Murtagh says. “Having that foundation for a risk program, based on the vision and strategy for the firm, makes a tremendous difference.”

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS RAY VAN EPEREN Vice president, global risk management Kimberly-Clark Neenah, WI

ROB DECAMP Director, risk management Caterpillar Peoria, IL

Posting sales and revenue of $38.5 billion in 2016, Caterpillar is one of the world’s leading manufacturers of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. As the company’s director of risk management, Rob DeCamp leads Caterpillar’s FX, commodity and insurance risk management groups.

KAREN BEAM Vice president, risk management Loews Hotels New York, NY

While working for Kraft Foods, one of Karen Beam’s responsibilities was executing contracts for event marketing and trade shows. This allowed her the opportunity to interact with the risk management group. When a position in risk management became available, Beam applied, and “the rest is history,” she says. Today, Beam relies on her 15 years of corporate risk experience in her role as vice president of risk management for Loews Hotels, which owns and operates hotels and resorts

After starting his career in law enforcement, Ray Van Eperen joined consumer products giant Kimberly-Clark Corporation in 1991 and has served in various risk management positions at the company ever since. In his current role as VP of global risk management, Van Eperen is responsible for designing KimberlyClark’s risk strategy and implementing effective mitigation measures to protect its physical, financial and human assets while shouldering a reasonable amount of risk. In 2009, Van Eperen and his team shifted their focus to enterprise risk management while maintaining their strategies for loss prevention and property & casualty risks. “Years ago, many risk management teams just focused on insurance placements, claims handling and loss prevention,” he says, “but over time, companies recognized the values and the need to move into enterprise risk management.” According to Van Eperen, KimberlyClark, like many global corporations, faces a seemingly endless number of risk issues, but two stick out as primary concerns for this year. “We have global operations in

37 countries, so we have a constant need to track global currency fluctuations and geopolitical risks,” he says. “Emerging risks also stand out as a main concern. I am a big advocate of risk management teams needing to be on the cutting edge of managing emerging risks because they directly impact the business. If you can be proactive in analyzing those risks, it can help you create mitigation plans that lessen the impact.” Passionate about training the next generation of risk professionals, Van Eperen and his team maintain the company’s partnership with the University of WisconsinMadison’s business school by regularly conducting presentations for the students and sharing insights on how the company works to mitigate and leverage risks.

throughout the US and Canada. “There are a number of risk areas that are paramount and on my radar for 2017,” Beam says. “Understanding the nature of our business and the need to keep our guests and team members safe – not only physically, but also protecting their personal identifiable information – cyber liability is one of these issues.” In her role, Beam dedicates a majority of her time to enterprise risk management, viewing risk management through a much wider lens. To achieve desired risk management results, Beam seeks to work with an insurer that is willing to engage in a partnership with Loews.

“For me, this means that we will not only celebrate our success, but also work through difficult markets to ensure that both sides benefit and are treated fairly,” she says. “I also look for new and innovative ideas, not just engaging in ‘renewals as usual.’”

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MICHAEL YIP Vice president, risk management Dallas/Fort Worth International Airport Grapevine, TX

BARRY SCOTT Risk manager and deputy director of finance City of Philadelphia Philadelphia, PA

The City of Brotherly Love certainly had an eventful 2016. One of the foundations of the American Revolution, Philadelphia returned to its political roots last year as the host city for the 2016 Democratic National Convention. Working to ensure the safety of the thousands of politicians, celebrities, visitors and more who flooded Philadelphia last July for the

CHRISTOPHER GALLAGHER Associate director, global risk management Procter & Gamble Cincinnati, OH

From Crest and Febreze to Olay and Bounty, Americans rely on many Procter & Gamble brands to perform everyday tasks. Christopher Gallagher is the associate director of global risk management for Procter & Gamble, which has operations in approximately 70 countries. Previously, Gallagher served as the group manager of risk management for the company.

DNC was the city’s risk manager, Barry Scott. Philadelphia’s risk management division covers approximately 30,000 full- and part-time employees across 43 city departments. Scott is responsible for analyzing the city’s insurance and risk exposure issues, including workers’ compensation and claims, while providing safety and loss prevention programs.

FAST FACT

With 1.6 million residents, Philadelphia is the fifth most populous city in the US

MICHAEL MCGARRY Senior director, enterprise risk management Walgreens Boots Alliance Chicago, IL

Created in December 2014 from the merger of Walgreens and Alliance Boots, Walgreens Boots Alliance is the first global pharmacy-led health and well-being enterprise, and the largest retail pharmacy destination across the US and Europe. After working for a variety of companies such as Protiviti and Grainger, Michael McGarry joined Walgreens Boots Alliance in 2015 as its senior director of enterprise risk management.

Larger than the island of Manhattan, Dallas/ Fort Worth International Airport is one of the world’s busiest. Michael Yip has led the risk management initiatives for DFW since assuming the role of vice president of risk management in 2015. Previously, he originated the airport’s enterprise risk management framework and its supporting processes from a consulting capacity. “The focus toward using risk transfer such as insurance as a strategic risk management tool has always been a core foundation for me,” Yip says. “It has allowed me to truly leverage the power of ERM to elevate the risk management function to help drive achievement of strategic goals.” Today, in his role as a senior leader within DFW, Yip has embarked upon a comprehensive transformation of the risk management department at the airport. “As I have always been a proponent of aligning risk management to an organization’s strategy and long-term success, my overarching risk issues have evolved alongside the trends toward globalization, operational efficiencies and enhancing stakeholder value for all the organizations that I have consulted for and worked with,” Yip says. “In my effort to evolve ERM best practices to a new level of strategy integration, the principal risk issues for me in 2017 are directly correlated to elements of the airport’s strategic plan – namely, safety and security, organizational resiliency, and cyber/data privacy best practices.”

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17/03/2017 7:07:06 AM

FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS

DAVID GRESKO Risk and insurance manager Noble Energy Houston, TX

David Gresko has gone through what he calls the “technical” and “business” phases of his career, first managing the design and construction of oil & gas and petrochemical facilities before working in corporate

finance. These phases paved the way for him to enter risk management armed with a good understanding of various aspects of business. In his current role, Gresko works closely with brokers and underwriting partners to help them understand Noble Energy’s technical and financial risks. Along with many other risk managers, Gresko sees cybersecurity as a top concern for the coming years, though he admits that “every company handles cybersecurity risks differently” and that even the common risks “manifest themselves in different ways in terms of frequency and severity.” Thus, he and his team have worked hard “to demonstrate to the underwriters and their risk experts why [Noble] should be analyzed as a stand-alone risk rather than being lumped into a bigger pool of companies.” Gresko sees insurers as important business partners for Noble, recognizing an underlying interdependence between the industries that requires artful compromise. “There are things that I want that the insurers can’t give me, and there are things that the underwriters want that I can’t give them,” he says. “In the end, though, working as partners, we come to a win-win result … if we drive the insurers into bankruptcy, nobody wins.”

HOLLY WENTZEL

SCOTT WILLIAMS

Risk manager, Americas Burberry New York, NY

Director, enterprise risk management Lockheed Martin Atlanta, GA

With an extensive background in insurance, including stints at Aon and Marsh, Holly Wentzel now handles risk management for British luxury fashion brand Burberry. Part of the chief operating and chief financial officers’ organization, Wentzel develops and implements the risk management, insurance, risk control and business continuity programs for the Americas region.

After President Trump recently proposed a $54 billion increase in military spending, the Pentagon’s largest supplier, Lockheed Martin, experienced a 2% rise in its stock price. Since 2011, Scott Williams has served as the director of enterprise risk management for the global security and aerospace company, which employs approximately 97,000 people worldwide.

LARRY JENCHEL Divisional vice president, risk management Sears Holdings Hoffman Estates, IL

In his current role as divisional vice president of risk management, Larry Jenchel is responsible for the risk management function for all of Sears Holdings’ businesses, including Sears, Kmart and Lands’ End. Jenchel’s primary responsibilities include risk assessment and financing, as well as the design of Sears Holdings’ property & casualty insurance programs. He also manages the company’s risk management information systems; provides analytical support to claims, safety and operating business units; and oversees the implementation of many of the company’s process improvement projects. Jenchel has also served as risk manager in residence for Ball State University and the Illinois State University’s Katie School of Insurance and Financial Services, speaking to students about Sears’ insurable risks, insurance design and other risk management issues.

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17/03/2017 7:12:10 AM

KATHERINE TKAC Risk manager Smithsonian Institution Washington, DC

After accepting a position managing the fine art insurance program at the Smithsonian, Katherine Tkac fell in love with reviewing risks and developing methods to mitigate or reduce them. From that point, Tkac took on more responsibility and eventually became risk manager, charged with protecting the assets at the Smithsonian Institution, which is the world’s largest museum, education and research complex. “The Smithsonian has grown by several

museums in the last 20 years, and so have our risks,” Tkac says. “The Smithsonian is continually updating our standards on protection for our collection. With each museum, we have seen risk issues that we had not imagined 20 years ago.” Maintaining and protecting the ever-growing Smithsonian collection is Tkac’s top risk priority for 2017. To do that, she works with insurers and brokers who are “willing to learn the uniqueness of the Smithsonian and work with this knowledge to provide the utmost protection to our assets. Once I have the underwriter understanding the complexity of the Smithsonian, the goal is to have coverage obtained at a reasonable cost.”

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS ERIC DOBKIN Director, risk management Merck Kenilworth, NJ

Since 2002, Eric Dobkin has worked at global healthcare company Merck, which provides prescription medicines, vaccines, biologic therapies and animal health products to customers and operations in more than 140 countries. Now director of risk management, Dobkin previously held the position of associate director, where he led all aspects of financial risk management related to the company’s existing and potential global liabilities, while also designing risk-transfer and non-risk-transfer structures to manage risk.

JEFF WILSON Director, risk management E. & J. Gallo Winery Modesto, CA

LEE BRADLEY Director, global operational risk management Nike Beaverton, OR

Back to the Future came to life in December 2016, when Nike introduced its $720 HyperAdapt 1.0 self-lacing shoes. As technology and apparel become more intertwined, new risks are certain to arise for the makers of clothing and shoes. Leading Nike’s global operational risk management department into this brave new world is Lee Bradley, who has more than 15 years of experience in managing environmental, safety and health risks. Bradley’s concerns at Nike range from business continuity and crisis management to property protection, risk control and contractual risk transfer. FAST FACT

Nike’s iconic swoosh logo was designed by a Portland State University student, who was paid $35 for the design

Ever since a college internship with Chubb motivated him to pursue a major in risk management and insurance, Jeff Wilson hasn’t looked back. After graduation, Wilson took on a risk management position with Cummins, a designer and manufacturer of power generation equipment and supplies. Today, Wilson

LISA RAMTHUN Vice president, risk management St. Joseph Health System Orange, CA

After beginning her healthcare career as an emergency room nurse, Lisa Ramthun’s passion for helping people led her to her current position as VP of risk management for St. Joseph Health System. With more than 25 years of experience in healthcare, Ramthun is a recognized thought leader in the areas of risk management, healthcare reliability and patient safety. At St. Joseph, Ramthun has worked tirelessly to revolutionize the organization’s approach to risk management. “Risk used to happen in a silo,” she says. “Now we

leads a staff of six in overseeing insurance, enterprise risk management and business continuity planning for E. & J. Gallo Winery, the largest exporter of California wines. “At the beginning of my career, my focus was on insurance placement, loss prevention and claims management,” Wilson says. “Throughout my career, I have learned that these are just the minimum expectations. With everyone being a risk manager in their own right, the risk management department can, and should, be a valuable resource for the organization by providing valuable risk identification and management solutions that are meaningful, measurable and actionable.” Wilson says his latest focus for E. & J. Gallo has been on business continuity planning and disaster preparedness. “Having robust mitigation efforts and adequate insurance is fantastic, but once a loss event happens, it is critical to get back in business as soon as possible,” he says. “By thinking through the response and recovery procedures ahead of time, business continuity planning allows our operations to respond quickly and efficiently. That’s critical in the beverage industry, where keeping your product on the shelf is vital to remaining relevant to consumers.”

understand the importance and value of an enterprise risk management approach. I believe an enterprise risk model approach, where everyone is a risk manager, is vital in order to make real progress in improving the health and experience of patients and community members, making populations healthier, and reducing the rate of growth in healthcare spending and per-capita cost of healthcare.” Considering the changing landscape of healthcare, Ramthun makes sure to stay up-to-date with the industry’s evolving risks. “There’s a lot of uncertainty in healthcare right now,” she says. “As an organization, we’re monitoring the acceleration of payment reform and potential changes to the Affordable Care Act.”

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17/03/2017 7:07:20 AM

HELEN CHUE

DOUGLAS SCHULTZ

Global risk manager Facebook Menlo Park, CA

Risk and safety manager Wawa Inc. Wawa, PA

In the past few years, Facebook has made great leaps in connecting even more people around the world and addressing social issues, although the social network’s expansion projects have occurred alongside market changes and contentious issues that pose increasing risks, from net neutrality to the spread of fake news. All of these issues have made Helen Chue’s position as Facebook’s global risk manager more indispensable than ever. “Facebook is constantly evolving and expanding its programs to further the mission of making the world more open and connected,” Chue says. “[This means] spotlighting content, understanding and finding solutions to address the risk exposures from a variety of lenses, such as cyber, business interruption, media and regulatory [concerns].” For the last few years, Chue has found that risk concerns are inevitably linked to “the ever morphing political and regulatory

landscape [and] how the changes affect the business.” This has compelled Chue and her team to always stay ahead in anticipating disruptions, while doing their best to select broker and insurer partners who are equipped to thoroughly understand the nature of Facebook’s business and respond with comprehensive programs and coverage.

MICHAEL BARRETT Director of risk management Ruby Tuesday Maryville, TN

Michael Barrett serves as director of risk management for Ruby Tuesday, overseeing property & casualty claims for its 700 restaurants and more than 40,000 employees. For the past decade, Barrett’s efforts have been crucial in helping the company significantly reduce its workers’ compensation claims, increase safety awareness and thus improve the overall cost of risk. As an expert and consultant, Barrett is engaged in various client-directed counsels, and participates in RIMS and other industry organizations such as the Employer Healthcare Benefits Congress.

Douglas Schultz has served as risk and safety manager at convenience store chain Wawa for more than 15 years. At RIMS’ Annual Conference and Exhibition in 2016, Schultz spoke about the importance of innovation, pointing to how the insurance industry is drawing significant venture capital investments and explaining how the advances made in insurance tech are instrumental to innovation. Schultz also has extensive background in health and safety. He has worked on Wawa’s Fit to Fly 5 initiative, and has drawn on communication strategies and metrics to reduce accidents and illness among employees.

MICHAEL HORVATH Senior vice president, risk management Simon Property Group Indianapolis, IN

Simon Property Group, one of the largest retail real estate owners in the US and the country’s largest mall owner, has 434 department stores and more than 275 restaurants in its portfolio. As senior vice president of risk management, Michael Horvath is responsible for the direction of all commercial insurance programs at the company, as well as the formation of its risk management and safety policies and practices. Horvath pioneered the creation of three captive insurance subsidiaries that have underwritten various liability, property and worker’s compensation risks retained by the corporation over the past two decades. Outside his role at Simon Property Group, Horvath is chairman emeritus of the National Association of Real Estate Investment Trusts’ Insurance Committee. He is also an active member of the Risk and Insurance Management Society, where he has served as the real estate industry chairman for the past decade.

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS BOB PASTORE Senior director, global risk management Walmart Rogers, AR

Bob Pastore has been part of Walmart’s risk finance team since 2002, and was tasked with setting up a captive insurance program as one of his first major projects. As senior director of global risk management, his responsibilities now include managing insurance programs across 69 operations in 27 countries through traditional and alternative program structures. He is also in charge of developing risk financing strategies and overseeing complex claims resolutions, corporate compliance initiatives, risk management evaluation, and integration of pre- and post-M&A transactions.

MARK BAKER Vice president, risk management Hyatt Hotels Corporation Chicago, IL

Over the past year, Hyatt Hotels’ earnings rose by 148%. Helping to keep the company profitable by managing its various risks is Mark Baker, who entered the hospitality risk management space in 2007 after spending years in the automotive industry, working for large auto suppliers Delphi and TRW Automotive. Apart from his duties at Hyatt, Baker is also an adjunct professor in the hospitality school at DePaul University in Chicago, and has served as a guest lecturer for Illinois State University’s risk management and MBA programs. FAST FACT

The Hyatt portfolio includes 679 hotels and residences in 54 countries, including 75 four-diamond hotels

SARA KANE Director, insurance risk SunEdison New York, NY

JEFF STOLLE Director, risk management Dole Food Company Los Angeles, CA

A risk management veteran with more than 20 years of experience, Jeff Stolle leads the global risk and insurance program at Dole Foods. The company’s exposures and risks go beyond food-related ones to include everything from ocean marine and cargo risks to corporate and agricultural aircraft. In addition, Stolle is responsible for managing risk and insurance operations for Dole’s sister company, Castle & Cooke.

After spending nearly a decade on the carrier side of the industry, Sara Kane took her insurance expertise to SunEdison, the largest global renewable energy development company, where she currently serves as director of insurance risk. After getting her master’s degree, Kane went to work for AIG Environmental before moving on to GCube Insurance Services and then AXIS Capital. While at AXIS, SunEdison was Kane’s biggest client; when its risk manager job came open in 2015, she moved into that role. “I started as a former property under writer looking at an asset portfolio of 1,400 wind and solar locations around the world, and I put different risk management tools to work using an underwriter hat,” she says. Since she took the job, Kane’s position has expanded in many ways. She helped SunEdison navigate its insurance and surety obligations during a tumultuous 2016 after the company declared bankruptcy, while handling the company’s directors & officers and management insurance. For 2017, the biggest issue on Kane’s radar is “helping to set a culture among project teams to understand the role of insurance and how it can be a valuable tool when considered upfront in transactions.”

Under Stolle’s leadership, Dole has implemented a global risk management information system that assists in the collection, management and dissemination of risk data. Stolle identifies cyber risks as a top issue for 2017, and plans to make significant upgrades this year to the company’s risk management measures for first-party cyber threats. Over the years, he has witnessed massive changes in risk concerns, such that majority of organizational risks have become difficult, if not impossible, to insure. This has required Stolle and his team to strengthen risk mitigation measures, including examining “the risks within [the] entire supply chain and other external factors such as environmental and political risks.”

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17/03/2017 7:56:24 AM

MICHAEL MEE

DAVID JEWELL

Director of insurance Exelon Corporation Chicago, IL

Vice president, risk management Dollar Tree Stores Chesapeake, VA

Exelon’s companies include six utilities delivering electricity and natural gas to approximately 10 million customers in several states, as well as a sales and services company extending energy products to around 2 million residential, public-sector and business customers. In 2016, Dow Jones, Newsweek and the EPA recognized the company for its corporate sustainability and environmental performance, and Exelon ranked number one among energy and utility companies on the Security 500 list of top enterprise risk management programs for the fifth consecutive year. As Exelon’s director of insurance, Michael Mee takes the lead in helping define the corporate risk and insurance philosophy of the company, choosing the necessary insurance programs, managing loss control and identifying current risk issues, as well as reporting to the company’s Risk Management Committee and Finance and Risk Committee.

As vice president of risk management at Dollar Tree, Dave Jewell is responsible for the development and execution of short- and long-term plans for evaluation, mitigation and financing of insurable and non-insurable risks to the business. His role involves partnering with internal and external teams to develop and implement risk control solutions within business operations, setting levels of self-insurance and risk retention in relation to the company’s risk appetite, and leading the risk management staff in addressing environmental health and safety issues. Before joining Dollar Tree in 2014, Jewell served as director of risk and insurance for PetSmart and led the company to win an award in 2013 for excellence in workers’ compensation. He has varied experience in risk finance, captives, claims management, safety/ loss control and risk management process improvement.

TONI HERWALDT Senior manager, risk management The Kraft Heinz Company Chicago, IL

The makers of some of America’s most iconic brands, including Kraft, Heinz, Capri Sun, Jell-O and Oscar Mayer, the Kraft Heinz Company is the third largest food and beverage company in the US, with eight $1 billion-plus brands in its portfolio. Responsible for the procurement of property & casualty and executive insurance coverage for the $29 billion company is Toni Herwaldt. Herwaldt has revamped the company’s claims handling procedures, worked with the safety department to strengthen workers’ compensation claims handling, developed internal claims reports, streamlined data-gathering processes and more.

MARY PETER Associate director, enterprise risk management and fraud prevention Best Buy Richfield, MN

After spending more than seven years as the director of enterprise risk management for accounting firm Eide Bailly, Mary Peter joined Best Buy in August 2016, and now leads the technology retailer’s enterprise risk management program and fraud prevention initiatives. Boasting more than 20 years of experience in the risk management and insurance industry, Peter is responsible for the leadership innovation, governance and management needed to manage the company’s risk. An innovator in the ERM space, Peter is also the founder of the ERM Roundtable in Minneapolis, a past member of the US Technical Advisory Group, and frequently speaks at conferences and authors articles on ERM topics.

GARY TAYLOR Chief risk officer BP Energy Houston, TX

As one of the world’s largest energy companies, BP Energy develops and delivers oil and gas across the world. As the company’s chief risk officer, Gary Taylor is responsible for operational, market and credit risk activities for BP Energy Company and North American Gas & Power. Taylor was previously BP’s head of market risk, responsible for a staff of 10 that covered the marketing and trading of natural gas, power and NGLs in Houston, Calgary and regional US offices. In May, Taylor will be a speaker at the annual Energy Risk USA conference. FAST FACT

BP Energy expects the global consumption of energy to grow by 30% over the next two decades

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FEATURES

SPECIAL REPORT: LEADING RISK MANAGERS JACK FAER

CHARLES KOLODKIN

DONALD ASPINALL

Chief risk and security officer Iron Mountain Boston, MA

Executive director, enterprise risk and insurance The Cleveland Clinic Cleveland, OH

Vice president, global risk management Comcast Philadelphia, PA

Jack Faer leads the global safety, risk and security team at storage provider Iron Mountain, where he is responsible for all aspects of corporate security and safety, including enterprise and insurance risk management, fraud prevention, crisis management, and business continuity. Faer’s role is critical to upholding the company’s brand, especially among its client base of Fortune 1000 companies, for whom the company extends safety and security risk management services. In 2014, the company formed a Risk and Safety Committee to oversee Faer’s area of responsibility and provide greater focus to the work of his team, thus highlighting its significance. Prior to joining Iron Mountain, Faer was senior vice president of operational risk management for State Street Global Advisors; before that, he spent 17 years at Fidelity Investments in various leadership roles, including senior vice president of risk and compliance for the firm’s retirement and outsourcing business. Faer is also a certified public accountant and a former FBI special agent.

Charles Kolodkin oversees enterprise risk and insurance for the Cleveland Clinic, one of the largest healthcare organizations in the country and number two on US News & World Report’s 2016-17 list of best hospitals in the country. Kolodkin has been with the organization since 2005, and is responsible for risk financing, captive operations, claims management and administration of its ERM program. Kolodkin has more than 30 years of experience in insurance, 25 of which have been devoted exclusively to the healthcare industry. He has served as senior vice president at Arthur J. Gallagher, advising multi-hospital systems, physician’s groups and managed care institutions on risk management and finance, and has handled risk management, insurance, professional liability litigation and captive operations for the largest nonprofit healthcare system in Texas. As a thought leader in the risk management space, Kolodkin writes a healthcare professional liability insurance column for the International Risk Management Institute.

In early 2016, Donald Aspinall was promoted to vice president of global risk management at Comcast; he now oversees risk and claims management, as well as risk assessment strategy and implementation, across the Comcast and NBCUniversal businesses worldwide. He also provides direction for the brokers and insurers selected to help the company finance and manage its risks. Aspinall is a director of the company’s two captive insurers and is actively involved in various organizations within the insurance industry. Prior to joining Comcast in 2013, Aspinall served as managing director for strategic account management at Aon, where he led consulting and brokerage teams for global clients.

MELISSA GALE Senior manager, risk solutions Lyft San Francisco, CA

Ridesharing has made plenty of headlines in the insurance industry, thanks to the number of risks that exist for the passengers, drivers and even in the technology. Melissa Gale serves as Lyft’s senior manager of risk solutions, a position she ascended to in January 2016 after a stint as insurance solutions manager. Prior to Lyft, Gale was a risk management specialist for Daymon Worldwide, where she investigated and managed workers’ compensation and

general liability claims, and developed and administered safety initiatives. Gale also previously served as senior risk analyst for Gap.

BOB BOWMAN Director, risk management The Wendy’s Company Dublin, OH

Bob Bowman entered the insurance industry in 1990 with Safeco Insurance Companies and spent seven years in a variety of auto and property & casualty claims-related roles. He then moved to Macy’s, where he oversaw self-administered general liability, property and workers’ compensation claims groups; risk management systems; IT operations; business continuity planning and crisis management groups; and insurance procurement and program placement. In 2014, Bowman joined Wendy’s, where he is responsible for all aspects of risk management, including insurance coverage placement, claims and risk finance. He also shares responsibility for enterprise risk management, crisis management, and data and privacy risk management. Bowman frequently speaks at conferences and seminars on claims and litigation management.

E d e a

O p c m

F t n

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IBA Floo

FLOOD RISK 2017 TEXAS

MAY 11

DOWNTOWN CLUB AT HOUSTON CENTER HOUSTON, TX

Each year, Texas experiences cases of severe flooding that result in devastation and costly losses. With the frequency of these catastrophes expected to rise, it's critical to stay informed to better position clients ahead of risk. On May 11, Flood Risk Texas comes to Houston, and will bring together key perspectives on the state of the strained NFIP, forecasts for private market coverage options and insight into leading innovations in risk modelling and management tools to position insureds ahead of perils. Flooding poses a critical risk to Texas—don’t miss this unique opportunity to access the latest developments in flood risk and insurance, and to network with key stakeholders. Join us at the

at Houston Center on May 11.

• Network with like-minded insurance professionals • Gain insight to the NFIP, upcoming flood legislation and the impact on you • Learn how to better explain and sell flood insurance to your clients • Understand different types and causes of flood • Get the latest updates on flood mitigation strategies

Visit floodrisk.ibamag.com/texas for more information or contact ATHEENA LOPEZ 303 800 5877 Atheena.Lopez@keymedia.com

IN PARTNERSHIP WITH www.ibamag.com

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FEATURES

SECTOR FOCUS: CONSTRUCTION

From the ground up Are brokers in a position to exploit the current opportunities available in the construction industry? IBA spoke to some experts in the sector to find out THE FORECAST for the US economy in 2017 is looking increasingly positive, and economists expect continued expansion throughout the year. With the new administration in the White House proposing an aggressive fiscal stimulus plan through tax cuts and infrastructure spending, it seems as though the ghost of the Great Recession can finally be put to rest. As more new jobs get added, payrolls increase, consumer spending is boosted, and construction activity (often a barometer for the nation’s overall economic health) continues to rise. As more new projects begin construction and even more get the green light for design, spending in the sector is soaring. For insurance brokers operating in the space, the construction boom represents a great opportunity to attract a prosperous client base. More than 730,000 construction companies across the country employ upwards of 7 million employees, making the construction industry a massive contributor the country’s economy. The annual revenue of the US construction industry totals more than $1.7 trillion, and that number is only expected to rise as President Trump pursues various strategies to spur economic growth

and improve America’s infrastructure. But as the construction industry grows, so do the risk management needs of those operating in the space. “In terms of policy count growth, we’ve seen a nice spread of consistent growth across the whole country, but there has been significant growth in certain pockets, including the Midwest and the Northeast,” says Anthony Dietz, vice president at Arch

array of coverage and provide protection for all types of businesses and individuals, ranging from general contractors building homes or commercial buildings to artisan contractors performing a wide variety of specialist services. “There are even construction policies that project owners can buy, even though they’re not performing the work themselves,” says Kent Boatwright, construction risk team broker and underwriter at Quirk & Company. “The project owner hires a general contractor to carry out the work, but in many cases, will buy an owner’s and contractor’s protective policy, known as an OCP, that offers an extra layer of general liability for the project owner themselves.” Organizations and individuals operating in the construction space face many unique risk exposures – one key area is the contractual agreement requirements set forth at the beginning of a project. Boatwright gives the example of a general contractor hiring a plumber to carry out work on a project. In many cases, the two parties will enter into a contract that requires the plumber to carry certain coverages, limits and even

“The demand is high, but there is also increased competition. With the soft market, everybody is bleeding and wants to write as much business as they can” Kent Boatwright, Quirk & Company Insurance. “Nationally speaking, construction spending is at its highest rate in seven and a half years, post-recession. There are great margins and great growth, which is great for our contractors and for us.”

Risks aplenty Construction insurance policies offer a broad

endorsements, which may include general liability, excess liability, and even their own auto and workers’ compensation coverage. The plumber may also be asked to name the general contractor as an additional insured. “Another typical requirement is an endorsement that gives the subcontractor – the plumber, is this case – his own general

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aggregate for that particular project,” Boatwright adds. Getting the job finished on time is another top priority for all construction firms and individuals, and modern policies attempt to help make that a reality. Ultimately, construction firms and their subcontractors want to conduct their services with peace of mind, safe in the knowledge that any accident will not lead to a catastrophic financial or reputational loss. Every project is different, and modern policies are built to be flexible and address the various complexities that come with performing a variety of different tasks. Carriers have developed suites of products in response to the changing face of the construction industry, and brokers

strong. Homebuilders and remodelers are in particular demand at the moment as more companies either build brand-new homes or buy existing houses and then gut them. “The demand is high for those types of risks, but there is also increased competition,” Boatwright says. “With the soft market, everybody is bleeding and wants to write as much business as they can.” In addition to contractors, there are many other types of construction professionals that brokers looking to profit from the burgeoning industry should target. These include exploration companies, project managers, development companies, equipment manufacturing and services firms, geophysical services firms, and laboratory

“Brokers need to have significant in-house expertise so they can meet the client’s needs. Human capital is most important in this business” Anthony Dietz, Arch Insurance now have a range of insurance tools to offer clients, including property and business interruption, equipment breakdown, commercial general and umbrella liability, commercial automobile and fleets, directors & officers insurance, blanket or project-specific builder’s risk (including soft costs and delay in startup), blanket or project-specific wrap-up liability (including sudden and accidental pollution), and contractor’s equipment.

Built for success Although the construction insurance space is soft at the moment, and premiums are dropping, growth continues to be positive across key industries within the construction marketplace, and policy demand remains

Freberg Environmental A&E Architects & Engineers

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services organizations. The space is competitive for brokers, so to be able take advantage of the construction industry’s impressive growth, they need to focus their attention on what matters most: the client. “A lot of brokers get focused on internal matters, like expense pressures and headcount issues, but they should be keeping it simple,” Dietz says. “Keep relationships tri-party; include the underwriter. I think brokers who do that can get a really good result.” However, in order to truly succeed in a space like construction, a broker has to do more than just keep clients happy. Construction is filled with an array of specialized risks, and brokers must have the adequate tools and knowledge at their

Need environmental coverage? At Freberg Environmental all you have to do is pick your program. From Architects & Engineers, to Environmental Contractors, and Products Pollution, we have the environmental insurance program you need. For over 25 years, Freberg Environmental has become the “go-to” environmental market for innovative solutions to all kinds of environmental risk. We have earned our reputation by providing the fast, friendly and knowledgeable service you have come to expect.

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FEATURES

SECTOR FOCUS: CONSTRUCTION

disposal to attract and retain top clients. “Brokers need to have significant in-house expertise so they can meet the client’s needs,” Dietz says. “They need to have construction specialization and invest in those people. Human capital is most important in this business.” Fully committing to the field is a surefire way for brokers to differentiate themselves in this competitive yet lucrative segment of the market. In order to attract the big clients, it’s essential for brokers to have expert knowledge of the players operating in the construction arena, their different risk exposures and coverage needs. “Really knowing about construction will help brokers get the respect of the insured,” Boatwright says. “The best tip I can give is to learn the industry and develop programs

THE US CONSTRUCTION INDUSTRY BY THE NUMBERS US construction industry annual revenue $1.731 trillion Number of construction companies in the US

729,345

Number of construction company employees in the US

7,316,240

Average construction company employee salary

$45,000

THE BIGGEST STATES FOR CONSTRUCTION NUMBER OF CONSTRUCTION COMPANIES California 72,173 Florida 51,143 New York 43,409

Source: Statistic Brain

with your carriers. Gain the trust and respect of your retail agents. Let them know they can come to you on everything and that you will ensure the client has the coverage they need.”

Texas 37,200 Illinois 30,236 Pennsylvania 28,505 North Carolina 25,457 New Jersey 23,142 0

20,000

40,000

60,000

80,000

Source: Statistic Brain

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At Starr, insurance is not just something we do—it’s who we are. Starr Marine is recognized around

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FEATURES

AGENCY INSIGHT

Hotchkiss Insurance Agency Focused on protecting, building and growing the clients and communities his agency serves, CEO Michael Hotchkiss explains how Hotchkiss Insurance Agency has persevered over the past 40 years

IBA: How did Hotchkiss Insurance Agency get its start? Michael Hotchkiss: My father, Douglas Hotchkiss, founded the agency in 1976, opening our Houston and Dallas offices at the same time with the initial focus on personal lines. In the mid-1980s, he made a strategic change to evolve into a niche-specialized commercial lines agency. Then, starting in the 1990s, we began some intentional diversification into other niches and writing more general business. We also started our employee benefits and surety departments in the late 1990s, and then we opened our San Antonio office in 2007.

IBA: How has Hotchkiss persevered through challenging times? MH: When the subprime mortgage meltdown happened in 2008–2009, it hit us pretty hard with our heavy construction practice. That season was really a moment of reckoning when we were forced to examine everything we were doing and how we were doing it. In those days, we had a motto that was kind of “all hands on deck.” We needed everyone to buckle down, and our people did a really good job coming through that time. However, something we realized from that experience was that it caused us to lose some

of our culture. It taught us the importance of communicating with our staff better and letting them know what leadership was doing and how we were doing. So from that point, we started more intentional communication within the company. One area was the creation of our Hotchkiss Huddle, which is a company-wide quarterly meeting. It’s become a connection point between our leadership and our employees from all different levels. During our Hotchkiss Huddle, we discuss where we are and where we are going – the good, the bad and the ugly. What we found is that it has become valuable to our people to understand where the agency is heading.

IBA: What do you do to support and grow your staff?

MH: We are focused on our commitment to retain and attract talent, knowing we need to continually invest in our sales force by bringing in new producers, and also attract and retain our service staff. We developed robust producer training programs in each of our offices with a training leader who guides each new class of salespeople. We have found that our millennial hires really value our mentorship and one-on-one training. Another program for our employees is what we call Career Care. Each manager meets with their staff to develop career goals and a path within Hotchkiss. Education is a large part of development, so we have a Learning Management System [LMS] that we use to ensure that our people’s education reinforces their career goals. Every one of

HOW HOTCHKISS HELPS Since 2008, Hotchkiss Helps, the charitable arm of the agency led by employees, has supported numerous national and local charities. Last year alone, Hotchkiss raised more than $15,000 for the Texas Chapter of ALS with a No-Shave November drive, $5,825 for the American Cancer Society’s Relay for Life, and contributed more than $2,200 toward children’s charities throughout Houston, among many other charitable activities. “Every year we partner with different charities in the community,” says Michael Hotchkiss, “and it has been a very good bonding experience for our people that also meaningfully connects with our purpose, because we want to provide protection to those who need it.”

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FAST FACTS: HOTCHKISS INSURANCE AGENCY

Top commercial P&C segments Residential construction Commercial construction Distribution Manufacturing Churches and schools

“We are purpose-driven and dedicated to impacting our clients and the world around us. If we do it right, everything else takes care of itself ”

‘Green’ industry

Year founded: 1975 Offices: Dallas, Houston and San Antonio Number of employees: 100+

our employees is required to attend an LMS session twice a month. These sessions cover not only technical and professional topics, but also personal growth and life skills, because we want our people to be successful inside and outside of Hotchkiss. Last, we have a partnership system that gives our people the ultimate opportunity to grow and become a shareholder in the company. We want our highest-performing individuals to have the opportunity to be invested in the success of Hotchkiss.

IBA: Are there any areas where Hotchkiss is looking to grow? MH: We are constantly investing in growth. The starting point is our client service and our people. We spend significant time making

investments in our people, technology, client services and bringing value-add services in-house, such as loss control and safety. In business development, we are always looking to expand our market share and find new ways to grow. Because we often hire salespeople from other industries, sometimes they arrive with a unique skill set and background that enables us to pursue certain segments of the market. For example, we developed a church specialization because we hired a former pastor. We make strategic investments in our business so we can grow with our clients, because in today’s market, clients expect more from their insurance broker – not just negotiating limits and premiums, but adding true value and true protection.

Leadership team: Michael Hotchkiss, CEO; Ken Hotchkiss, COO; Greg Hotchkiss, CFO; Farrah Carlton, vice president of service; Wes Weatherred, vice president of sales and marketing IBA: What makes Hotchkiss stand out from other agencies? MH: Our culture. We’ve really focused on our employees and our culture in a big way. We are purpose-driven and dedicated to impacting our clients and the world around us. If we do it right, everything else takes care of itself. We work hard, but we also play hard and have fun. We have the best, brightest and hopefully the happiest people, and we are going to adapt and perform while continuing to win new business and grow.

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FEATURES

SECTOR FOCUS: MARINE

Smooth sailing ahead IBA sat down with some industry experts to find out how brokers can best ride the marine insurance wave

IN A TIME when so much business is conducted online, it’s easy to forget that the products we use and the food we consume still has to be transported to us. As a result, we remain heavily dependent on the marine and shipping industries to keep our societies functioning and our economies growing. In protecting ships and the cargo they

I would also say that not all capacity is created equally,” says John Barnwell, senior vice president of specialty lines at Allianz Global Corporate & Specialty. “Depending on the segment, there are some important services brokers can provide, whether it’s from a loss control, claims or global network perspective.”

“If you speak the clients’ language, you are going to have much better, more comfortable discussions. Clients in the marine segment want to work with brokers who understand their business” John Barnwell, Allianz Global Corporate & Specialty carry, marine insurance plays an integral role in enabling ship owners and transporters to move goods across the earth’s oceans on a daily basis. It’s a fast-paced business, and in North America, the commercial marine insurance market is also very competitive one. “There is an abundant amount of capacity for most classes of business, but

Of the four major modes of transportation – road, rail, air and water – the last is, without doubt, the most hazardous. As well as having to deal with extreme weather events that can damage and devalue the cargo and the vessel (and its occupants), organizations that transport goods across oceans encounter many other incidents that can lead to a significant financial loss,

including piracy and theft. Marine insurance plans are usually developed after considering the size and type of the ship, the routes it will cover and the type of cargo it transports. The parameters of marine policies are notoriously strict, and if a ship deviates from an agreedupon route, the transportation or shipping company may not be covered in the event of a loss. The amount of time that it takes a vessel to reach its port of destination also comes under consideration.

Challenges for 2017 Marine insurance isn’t anything new (in fact, it’s very old; the first known marine insurance agreement was executed in Genoa, Italy, in 1347), but it’s certainly had to adapt to the times. The major geopolitical upheaval and uncertainty that’s impacting many industries hasn’t left shipping unscathed. In 2015, global marine underwriting premiums dipped 10.5% from 2014; according to a report released by the International Union of Marine Insurance [IUMI] late last year, the trend is expected to linger. The IUMI report found that an increased cargo loss ratio was partly responsible, as was the Tianjin disaster, which is the largest recorded cargo loss in marine history. The IUMI expects the trend to continue, thanks to a higher probability for claims caused by natural catastrophes. IUMI described 2016 as “challenging” and said insurance firms are still wary of the possibility of major claims due to increased accumulations risk. “Commodity prices are weak and freight rates are low, and these persistent soft market conditions are challenging for marine insurers,” said Patrizia Kern-Ferretti, chair of IUMI’s Facts and Figures Committee, when the report was released. Kern-Ferretti also pointed out that the increasing and unknown risk of accumula-

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WHAT DOES MARINE INSURANCE COVER? Cargo insurance: Designed to cater specifically to the ship’s cargo and all of the belongings of those aboard.

tions and a growth in M&A activity across the globe is driving uncertainty. “Although we are hopeful that the continuing global economic recovery will strengthen world trade and therefore lend greater support to our sector, marine insurers must adapt to this changing environment if they are to survive and remain effective in the future.” Recently introduced rules around the design, construction, onboard equipment and operation of US towing vessels are also set to shake up many insureds. However, Captain Andrew Kinsey, senior marine risk consultant at Allianz Global Corporate & Speciality, calls the new legislation “long awaited and badly needed.”

Hull insurance: Mainly focused on the hull and torso of the vessel, as well as pieces of furniture and other articles on the ship. This type of coverage is usually taken out by a ship’s owner. Liability insurance: Provides coverage for a ship owner or transportation company, should compensation be sought after a ship crashes or collides with another vessel. “There is currently a big push on the liability side in terms of concern around the litigious environment we find ourselves in,” says John Barnwell of Allianz Global Corporate & Speciality. Freight insurance: This provides coverage for merchant vessels’ corporations, which have the potential to incur financial harm if cargo is lost or damaged due to an accident.

“The Coast Guard used industry feedback to develop a rule that has a lot of positive benefits for carriers and underwriters,” Kinsey says. “The legislation will help create a safer and more secure market segment

and allow carriers to differentiate themselves. Brokers can help with the implementation of the rule by giving feedback on where their clients stand on implementing the necessary changes.”

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FEATURES

SECTOR FOCUS: MARINE

MARINE INSURANCE BY THE NUMBERS

$29.9 billion

Global marine insurance underwriting premiums in 2015

10.5%

Drop in premiums from 2014 to 2015

Which regions purchase the most marine insurance?

Europe 50.4% Asia Pacific 27.1% Latin America 9.8% North America 5.9% Other 6.8%

Which business lines are most popular?

Transport/cargo 53% Global hull 25% Marine liability 7% Offshore/energy 15%

Source: International Union of Marine Insurance

Help wanted As with many segments of insurance, many leading brokers in the marine space are reaching retirement age, creating a talent void that young, ambitious brokers should step up to fill. “There are not enough brokers in the ocean marine space right now,” Barnwell says. “I was at the Council of Insurance Agents & Brokers last year, and no less than three brokerage firms said they were looking to hire marine brokers. It’s an active space, and skilled brokers are needed.” For brokers aiming to break into the space, or grow and expand their business in marine insurance, getting fully educated on the segment and becoming familiar with

owner’s main aim is to keep insurance costs to a minimum. A more lucrative area for brokers is the yacht market, where hull and P&I coverage usually ranges from total loss replacement all the way to market value. On the P&I side, most yacht policies include things like hurricane haul-out protection, full-limit wreck removal, defense costs, and search and rescue. “Generally speaking, yacht insurance offers bigger limits for standard coverages like personal effects and furniture,” says Paul Sexton, vice president of product management and development at Norman-Spencer Agency. “Most policies do a pretty good job, but some are broader than others.”

“The Coast Guard used industry feedback to develop a rule that has a lot of positive benefits for carriers and underwriters. Brokers can help with the implementation of the rule by giving feedback on where their clients stand on implementing the necessary changes” Captain Andrew Kinsey, Allianz Global Corporate & Specialty industry groups is an important first step. “If you speak the clients’ language, you are going to have much better, more comfortable discussions,” Barnwell says. “Clients in the marine segment want to work with brokers who understand their business.” As well as covering large commercial vessels, marine insurance also encompasses personal watercraft. In the small boat space, which includes anything up to 26 feet, coverage is often provided via bundled policies or endorsements on homeowner’s policies. In many cases, the small boat

The watercraft market is experiencing something of a rebound, and as a result, there is a strong demand for personal lines yacht insurance. Competition is fierce, however, and Sexton is seeing new yacht markets come into play with increasing regularity. As a result, rates are extremely soft. “It’s very competitive in the yacht world,” Sexton says. “Rates are very depressed, and that’s being driven by the everyday yacht customer shopping around more frequently because they think they can get a cheaper price elsewhere.”

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PEOPLE

CAREER PATH

THE JOY OF GIVING

Todd Johnson’s career has been marked by a mix of steady professional growth and unwavering public service As a high-school student, Johnson volunteered at a homeless shelter, which sparked a desire to help others that has continued throughout his life. Today, he is president of the local food pantry in the town where he and his family live “Since I was a teen, I’ve enjoyed giving back to those less fortunate and find it rewarding to continue doing local volunteering, both personally and at work through USI Gives Back”

1980

DEVELOPS A PASSION FOR DOING GOOD

1988

STARTS A FAMILY While in his first year of law school, Johnson married his high-school sweetheart. They raised two children – a daughter who went on to become a nurse and a son who became a police officer “Family is the most important thing to me. It’s the glue and joy of my life”

2006 STEPS UP COMMITMENT TO PUBLIC SERVICE Eleven years ago, Johnson was elected to the Board of Selectmen of Tewksbury, the governing body for his town; since this initial foray into public life, he has been re-elected three times. This achievement sits beside his four years of service on the governor’s advisory council for workers’ compensation, culminating in his recent elevation to chairman

“I believe public service is essential to the success of democracy and is a measure of citizenship” 2016 TAKES ON LEADERSHIP ROLE AT USI Promoted to property-casualty practice leader, Johnson is now responsible for the delivery of the USI ONE Advantage platform for one of the largest brokerage and risk management firms nationally “In my opinion, USI ONE will positively transform the brokerage world. It is central to how my colleagues and I deliver best-in-class solutions and financially impactful risk management options to our clients”

1988 STARTS LAW SCHOOL A determination to pay his own way at law school led to Johnson working days as an aide to a Massachusetts state senator while attending school at night. Eventually he snagged a position with the state agency administering Massachusetts’ workers’ compensation system “Dealing with contested claims exposed me to the real-life issues impacting injured workers; law school taught me analytical skills I use every day”

1994 MOVES INTO EXECUTIVE LEADERSHIP POSITION Johnson’s workers’ compensation experience led to an executive leadership position at a third-party administrator, CCMSI, where he managed the daily service delivery to selfinsured employers and municipalities “I learned enormous lessons about business management, service and team-building in this role. I found that my willingness to assume increased responsibility on behalf of my clients, employer and those who worked under my leadership reinforced my daily desire to achieve individual and team success”

2012

JOINS USI INSURANCE SERVICES When USI acquired TD Insurance, where Johnson was risk services director, the industry veteran was appointed to the post of Massachusetts senior vice president and New England technical resources director “Over the years, I’ve learned that solving problems for others, and helping them make solid business decisions based on a deeper understanding of the causes and solution options available, is what makes my job enjoyable”

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PEOPLE

OTHER LIFE

TOP BRASS Even in the midst of a thriving insurance career, John Alberts hasn’t forgotten his high-school band roots WHEN HE was 13, John Alberts went to an orientation tour of the high school that he would go on to attend, and one moment had an impact that would echo through the rest of his life. “The band was performing, and a trombonist had a solo,” Alberts recalls. “I thought, ‘That’s pretty neat’ – I wanted to see if I could do that.” Alberts, who today leads the commercial insur-

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TELL US ABOUT YOUR OTHER LIFE Email iba@keymedia.com

ance and consulting divisions of Nimble Financial Services, was in the lucky position of being able to take private lessons from a musician who played with the Chicago Symphony Orchestra. Before long, he was playing trombone, bass trombone and euphonium (a tenor tuba) concurrently with up to five different musical groups. Even today, he plays in both an orchestra and a brass ensemble. Musical performance is a passion that has stayed with Alberts, and even resulted in his founding the Union League Brass Ensemble in order to have a place to play the euphonium. “Making music is a transcendent experience,” he says. “When you work at something and it really gels, it’s a delight – but part of the process is the fraternity of the rehearsals. We’re working very hard, but there’s also a great deal of teasing and humor, and it makes for a very enjoyable evening to spend with musical friends.”

Instruments Alberts owns (a tenor trombone, two bass trombones and a euphonium)

Average number of performances Alberts plays each year

Typical number of euphoniums in an orchestra

OVER ARCHING

SUPPORT EXPERIENCED UNDERWRITERS FOR YOUR F&I PRODUCTS

Arch Lender Products Division Vehicle Service Contracts GAP Lease Excess Wear and Tear Vehicle Protection Products Limited and Lifetime Warranties Auto Deductible Reimbursement Your unique products and bundles

THE STRENGTH OF ARCH www.archinsurance.com

A.M. Best: “A+” Standard & Poor’s: “A+”

Insurance coverage is underwritten by one or more member companies of Arch Insurance Group in North America, which consists of (1) Arch Insurance Company (a Missouri corporation, NAIC # 11150) with admitted assets of $3.62 billion, total liabilities of $2.74 billion and surplus to policyholders of $875.31 million, (2) Arch Specialty Insurance Company (a Missouri corporation, NAIC #21199) with admitted assets of $515.45 million, total liabilities of $215.49 million and surplus to policyholders of $299.96 million, (3) Arch Excess & Surplus Insurance Company (a Missouri corporation, NAIC # 10946) with admitted assets of $65.14 million, total liabilities of $328,448 and surplus to policyholders of $64.82 million and (4) Arch Indemnity Insurance Company (a Missouri corporation, NAIC# 30830) with admitted assets of $62.28 million, total liabilities of $35.63 million and surplus to policyholders of $27.05 million. All figures are as shown in each entity’s respective Quarterly Statement for the quarter ended June 30, 2016. Executive offices are located at One Liberty Plaza, New York, NY 10006. Not all insurance coverages or products are available in all jurisdictions. Coverage is subject to actual policy language. This information is intended for use by licensed insurance producers. © Arch Insurance Group 2017

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Expect big things in workersâ&#x20AC;&#x2122; compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide. For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com. ÂŠ2017 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.

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