Power brokers: utilities.

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Dan McGarvey, ARM, CPCU, ARe, AMIM 

Managing Director

Marsh

Greenville, S.C.

As nuclear power has made its comeback, new companies to design, build, fuel, and operate plants have come into existence. One of them turned to Dan McGarvey to place a program protecting two separate reactor projects worth a total of $6 billion.

"We were in the design process and getting close to being ready to build," said the treasury supervisor for one new player. "Dan has a lot of credit in the nuclear industry, and he has been invaluable to us, not just in risk assessment and placement, but in training and educating us on insurance and risk management in this business."

Generally the senior brokers at a firm or in a sector confine themselves to winning the business, rather than the day-to-day details. But one client credits McGarvey with the nitty gritty of getting "down to the best contract language."

"He has even helped us work with our staff on site," said the client. "Dan has worked with everyone from our owners and managers to the people on the ground. He is willing to come down at a moment's notice if necessary."

The other growth sector of the nuclear industry is bringing idle plants back on stream. Clients say that in some ways it is more complicated to reassemble licenses and renew coverage and reassess risk management for a plant coming back then it is to start tabula rasa for a greenfield project. One client's unit was brought back into service in the Southeast last spring. McGarvey is personally responsible for placement of coverage and risk management guidance for 49 reactors at 28 generating sites.

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John L. Samuels

Managing Director

Marsh

Dallas

Wind power is making huge inroads after years in the doldrums and one of the major manufactures of turbine blades for this market is a new and very happy client of John Samuels.

"John started working for us in the summer of 2007," said the risk manager. "He has assembled a really wonderful team for an unusual industry. We are an AIM-listed company. AIM is a part of the London Stock Exchange. John helped tailor a D&O/EPL program which was much better suited to an AIM-listed company [than are some of the standard packages]."

That program "resulted in an 80 percent increase in limits with a 33 percent decrease in premium, with better coverage," said the client.

"John has been helping us develop a new risk management program," the client continued. "He has even climbed 280 feet up one of our wind turbines in a high wind. I don't know many men or women who would be willing to climb up a 280 foot tower to better understand their customer."

Perhaps Samuels feels such resonance in the wind market because he is an avid aviator, and flies his own small plane often relying on wind power from his own small propeller.

Samuels gets credit from clients not just for his willingness to go the extra mile, or 280 feet, but for his firm grounding in the power sector and his facility with carriers. "His knowledge of underwriters and coverage, as well as his knowledge of the industry and his attention to customer service all rank highly," said one client.

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Robert J. Bothwell

Executive Managing Director

Beecher Carlson

Boston

"Don't change horses in the middle of the stream," is an old adage. But in the middle of 2007 a Northeastern utility sold a large group of assets. This required a complete revamp of the insured's program.

"We had to set up all new policies," said the risk manager for the power company. She nominated Robert Bothwell for recognition because of the way he handled the revisions and replacements beginning to end.

Another client, a major electrical supplier, was seeking coverage for its installations, several of which had known operating complications. Placement was not the challenge this time, but deductibles ran very high: from more than $2 million to twice that. Bothwell was able to place the risk with competitive terms and conditions at a deductible of $1.5 million.

In another case, a client of Bothwell's did have to change horses in midstream, ironically, to keep from getting soaked.

The client was another Northeastern utility that was developing a new generating station. The contractor had been hired on a full engineering-procurement-construction basis to help control costs. But that required the utility to place builder's risk coverage for the duration of the project.

A move originally envisioned to control costs ended up seeing premiums spiral from a little more than $2 million to $4.5 million. Bothwell was able to secure a quote that returned the premium to near the original level.

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Kathy Durso-Olsson, CIC 

Senior Vice President

Lockton

Houston

Most of the Power Brokers are recommended by risk managers and insurance buyers. In the case of Kathy Durso-Olsson, it was the company CEO who weighed in on her importance to his company.

"Kathy has consistently demonstrated the ability to obtain cost-effective casualty programs for us, utilizing tough negotiating skills that do not, however, alienate the markets being approached," he said. "That is a skill that is not easily developed."

One case in point, the CEO cites, was his most recent workers' comp renewal. "At the time the underwriter dug in its heels initially regarding any rate decrease or decrease in collateral," he said. "But Kathy was able to negotiate her way into an eventual 18 percent rate decrease as well as a corresponding decrease in collateral, and still maintain a good relationship with the insurer, no small feat with the underwriter involved."

In another case, a carrier wanted to audit all prior certificates provided by a client's subcontractors. When the client could not produce the documents for prior years, the carrier wanted to charge a substantial additional audited premium. Durso-Olsson was able to convince the underwriter to waive the audit. And while she was at it, she was also able to reduce the audited premium by more than $1 million.

"Kathy's knowledge of the insurance industry as well as our particular industry, merchant energy, is of special value as we seek to optimize the most cost-efficient programs but still retain the optimal policy terms and conditions," another client said.

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Marshall Nadel, CPCU

Senior Vice President

Natural Resources Practice Leader

Aon

Dallas

"Based on your criteria, one person comes to mind immediately because he scores a perfect 10 in all categories," said the director of risk and insurance at one major Southwestern utility.

"Marshall Nadel is an acknowledged expert in nuclear insurance by his peers, and his advice has been invaluable as we, and other utilities, are gearing up for building new nuclear power plants. He is also a wealth of knowledge about the markets and resources within his brokerage."

Big utilities place muitimillion-dollar programs, and get considerable attention from brokers and underwriters. But Nadel gets credit from smaller players as well. "We don't have the size to have a stand-alone risk management department," said one insurance buyer. "That said, we do have great risks to manage. And Marshall is our risk management department. We have really leaned heavily on him and have gotten good guidance as we look to expand. Most recently that has been in the areas of construction operations, especially builder's risk."

In his main field of nuclear energy, Nadel had a busy year. One client needed gap analysis over and above the coverage from the sector mutual, Nuclear Electric Insurance Ltd. Nadel was able to develop specific business interruption coverage. Upstream to down, Nadel also placed coverage for a $2 billion uranium enrichment plant, and separately, completed a risk analysis for an offshore decontamination facility. In conventional power, Nadel led the design of a heating-degree-day swap program to cover a gas utility's weather risk.