Click through to check out biographies of the brokers, carrier executives and risk managers dealing in Environmental insurance who offer their perspective throughout PC360-NU’s January digital issue. The subjects also offer additional thoughts on this line, including their views on why more clients should strongly consider this relatively inexpensive but highly valuable coverage.
Mike Benishek, an Account Executive and Risk Management Advisor at agency Lutgert Insurance in Sarasota, Fla.
Benishek has worked in risk management and in the insurance industry for nearly 40 years. He began his career as a safety technician for a midsize manufacturer and then held positions with one of the world’s largest insurance brokers and a large Workers’ Compensation insurer. Benishek then headed the risk-management and insurance department for 20 years at PTG Management Co., a large, privately held multinational agribusiness. A challenge he sees in managing Environmental risk is that it is “often hidden,” which necessitates extensive due diligence when an organization is attempting to acquire property.
“Even after [contamination] is properly disposed of” before a property acquisition is completed, “one still has to carefully review the wording of the ‘pre-existing conditions’ clause in the Pollution policy” to ensure the buyer is adequately protected, Benishek says.
Veronica Benzinger, Managing Director and Chief Broking Officer in the Environmental Services Group at Aon Risk Solutions in West Palm Beach, Fla.
Benzinger, a licensed broker since 1980, has been with Aon for nearly her entire career. She began specializing in Environmental risk in 1999, when she recognized a growing need for Environmental expertise among clients and in the insurance industry. At that time, she stepped into the Environmental field as head of the broker’s new Environmental Center of Excellence in the Northeast. The most rewarding aspect of the field for Benzinger, she says, is its inherent “creativity.” Since Environmental coverage is written in the surplus-lines market, which is free of rate and form restrictions, Benzinger can “craft insurance policies that address business issues and provide the solutions that our clients need, as well as balance-sheet protection.”
“We see more insurance companies coming into the Environmental market because it has been a more profitable line,” she adds.
John C. Gibson, Whitehouse Station, N.J.-based Senior Vice President and Environmental Product Line Manager at the Chubb Group of Insurance Cos.
Gibson has been in the insurance industry for 32 years, but he moved into the Environmental area just four years ago to take advantage of an opportunity to be a global product manager. In that capacity, he draws on his underwriting experience to help develop Environmental products. The most-rewarding part of working in the Environmental field for Gibson is “the flexibility to truly underwrite risk, since it’s underwritten on surplus-lines paper.”
“Pollution insurers have made only a small penetration of the market” of potential buyers, Gibson says. But “once they buy, they buy,” and do not drop the coverage.
Marc D. Hindman, Atlanta-based Chief Risk Control Officer and Regional Practice Leader of the Strategic Outcomes Practice at Willis North America
Hindman began focusing professionally on environmental issues in the mid-1990s, when he was an environmental consultant for Bureau Veritas, the global testing, inspection and certification company. He then was director of environmental affairs for 11 years at biotech-company Human Genome Sciences Inc., which pharmaceutical giant Glaxo-SmithKline purchased last year. Hindman, who has been with Willis five years, became interested as a college undergraduate in how companies could satisfy shareholder expectations, yet do so in a more environmentally sensitive way.
“Whether you’re private or publicly traded, Environmental insurance is an effective risk-transfer mechanism to guard against low-frequency, high-severity events. If you’re publicly traded, Environmental insurance [might even amount to] a fiduciary duty to shareholders,” Hindman says.
Claire Juliana, New York-based Director of Environmental Claims in the Environmental Services Group at Aon Risk Solutions
Juliana is an 18-year veteran of the insurance industry and has spent all of it in the Environmental field. She began her career adjusting claims for an insurer. Juliana says she “found it fascinating” and moved into underwriting before becoming a “client advocate.” Juliana, who also is an attorney, says the Environmental field is an “evolving area” in terms of its legal and regulatory framework. That dynamic is professionally rewarding, because it creates continuous challenges for those working in the field, she adds.
“There has to be communication up and down the chain so everyone in the organization knows what to do if there’s a release of a contaminant,” Juliana notes.
Bruce W. Kranz, Senior Vice President of Environmental Risk at Cleveland-based Hylant Group
Kranz has spent all of his nearly 13-year insurance career in the Environmental field and started the Environmental practice at Hylant. For 20 years before becoming an insurance broker, he was involved in environmental engineering and compliance for a coal-mining organization. His degree, in biology with an environmental focus, was earned as the environment was emerging as an area of study. Kranz says the most rewarding and enjoyable aspect of his career now is being part of the team of stakeholders in a business transaction that is dependent upon everyone being satisfied that all potential environmental issues have been addressed.
“Environmental risk often is not the most important or costly thing in a deal—but it is one of the things that can stop a deal,” notes Kranz.
William McElroy, New York-based Senior Vice President at Liberty International Underwriters, a unit of Liberty Mutual Group
McElroy, who has been interested in the environment since he was a youngster, has spent his entire 27-year insurance career in the Environmental field. He previously was with an environmental-cleanup contractor and got into insurance “accidentally” when the industry at that time recognized it had little expertise in environmental science. The most rewarding part of his career is that he is “part of the solution,” he says. “If I do the job right, there’s less environmental damage.”
Regarding Pollution insurers’ relatively low market-penetration rate of 20-30 percent, McElroy observes: “The economy is clearly a major factor in the dynamics of the market.”
Hugh McLellan, Vice President of Risk Management for Edmonton, Alberta-based PCL Constructors Inc.
McLellan says environmental contamination is “a significant risk in our thoughts. The ramifications are significant from an economic point of view.” The risk has grown over the past eight to 10 years as PCL has expanded its industrial work, especially on oil and gas and mining projects. Because of PCL’s Environmental and Pollution exposure, “we’ve learned a great deal” about loss prevention.
“The oil and gas industry is especially ‘out there’ in terms of loss prevention,” McLellan says, noting that those companies are highly regarded for developing and employing best practices.
Nancy Milkey, Project Manager of Hydrogeology at Tighe & Bond in Westfield, Mass.
Milkey, who has a master’s degree in hydrogeology, has worked in the environmental field for 19 years, focusing on the distribution and movement of groundwater in aquifers. The most rewarding and enjoyable aspect of her career is the variety of challenges she faces from project to project. “Every site is different—every site has its own challenges,” she says.
“At a heavily contaminated site, regardless of the amount of money you have to spend on it, it can’t be cleaned up in one year” because of how some contaminants move through the soil to the groundwater, says Milkey, explaining why some cleanups can continue for decades.
William Montanez, Director of Risk Management at Oak Brook, Ill.-based Ace Hardware Corp.
Montanez has managed corporate risk for more than 30 years. At Ace, Environmental risk is a smaller exposure than other risks—although the company has two paint-production facilities and a network of distribution centers across the country—because Ace has adopted best practices in loss prevention, he says. Throughout his career, which now includes a board seat with the Risk and Insurance Management Society and membership in PC360-NU’s Risk Advisory Board, Montanez has seen Corporate America develop a better understanding of its Environmental exposure and how to mitigate losses.
“I think we’ve made insurers comfortable with our [Environmental loss-prevention] policies and procedures, which can improve coverage and reduce prices,” Montanez says.
Bob Newmarker, Boston-based Head of the Environmental Practice at Zurich North America
Newmarker has spent the last 10 years of his insurance career in the Environmental area, after working eight years in the actuary and casualty fields. He moved into Environmental risk because he considered it unique and interesting as well as a challenge. It also is important, Newmarker says, given that environmental regulations can change, which then alters a client’s risk exposure.
Even with longstanding environmental law, Newmarker says: “It’s one thing to have the laws on the book, and it’s a completely different thing as to how they’ll be enforced.”
Catherine O’Leary, New York-based Vice President of the Environmental Division at Frenkel & Co. Inc.
O’Leary has worked in the Environmental field nearly her entire 12-year insurance career. She has been a broker most of that time, although she was an underwriter for two years. O’Leary says she enjoys working with clients and discussing Environmental risks “they didn’t think they could manage.” Each company has its unique risks, and “you manuscript a policy to fit the client,” she says.
Reflecting on why Pollution insurers have not deeply penetrated the market of potential buyers, O’Leary says: “I don’t think anybody buys insurance unless they think they can suffer a financial loss from the issue.”
Craig Richardson, Atlanta-based Senior Vice President in the Environmental Risk Group at Ace USA
Richardson has spent his entire 20-year insurance career in the Environmental area, with the last five years at Ace. Before moving into the insurance industry, he was a member of a consulting group that supported the National Aeronautics and Space Administration. Environmental risk underwriting is an ideal fit for his skill set because it combines his background in science and his business interest, Richardson says.
Mold is a covered peril in Pollution policies, typically by endorsement, “and we get quite a few requests,” Richardson notes. “But it’s not an automatic throw-in, and not everyone requests it.”
Rich Sheldon, Philadelphia-based Environmental Practice Leader at Willis North America
Sheldon has been in the insurance industry for 24 years, and all of his professional experience and education have been in environmental sciences. Before moving into the insurance field, he worked for a U.S. Environmental Protection Agency subcontractor, where he was approached with an opportunity to perform risk engineering for an Environmental insurer. The most rewarding aspect of his career is the opportunity to explore and implement unique ways to address Environmental risk in concert with various brokerage colleagues, underwriters, attorneys, consultants, clients and prospects, Sheldon says.
“Every day brings a new and different challenge, since Environmental risks exist in nearly every type of business,” Sheldon says.
Mary Ann Susavidge, Exton, Pa.-based Chief Underwriting Officer for the North American Property/Casualty Environmental Unit at XL Group
Susavidge is a 15-year veteran of the insurance industry—all of it in the Environmental area. Before that, she was a licensed civil engineer for eight years, designing landfills and storm sewers for various clients. Susavidge moved into the insurance sector because she wanted to apply her skills in a broader way. The most rewarding part of her work now is that she is “engaged every day in figuring out solutions for clients; there isn’t an off-the-shelf solution.”
In a real estate transaction, “the Environmental piece is often the last one that makes a deal happen”—or kills it, Susavidge says.
Chris Smy, Atlanta-based Managing Director and Global Environmental Practice Leader at Marsh Inc.
Smy has spent his entire 15-year insurance career in the Environmental field. Always having a strong interest in science and the environment, Smy earned a master’s degree in environmental management and pollution control after leaving the military. That led him initially into environmental consulting and then insurance underwriting, risk consulting and now broking. Smy says his field of work is rewarding because it presents him “an opportunity to help clients minimize and manage their impact on the environment and to help facilitate a sustainable business model.”
Regarding Pollution insurers’ market penetration, Smy says: “It’s far more significant in the United States than in the rest of the world, but there’s still the general perspective (among companies with Environmental risks) that these policies are a discretionary purchase.”
Rich Wagner, New York-based Executive Vice President and Division Head for Pollution Underwriting in the United States and Canada for AIG
Wagner, an attorney, entered the Environmental part of the insurance business in 2000 after focusing for seven years on General Liability insurance-defense litigation. After three years working on the legal side of Environmental insurance, he moved into the business end of the field in 2003. Wagner says what he likes best about his current focus compared to the legal one is that he is now helping clients complete business deals. Litigation deals “with the backside of a problem,” he says. “What’s great about what we do here is that it’s very solution-oriented.”
While Pollution insurers’ market penetration is relatively shallow, “I think there’s a continuing opportunity,” Wagner says. “The challenge is that first we have to identify the need” for insurance buyers.
Gene Wingert, Loss Control Environmental Manager at the Chubb Group of Insurance Cos. in Whitehouse Station, N.J.
Wingert has worked in the environmental area for about a quarter-century. He worked at the U.S. Environmental Protection Agency and was an environmental consultant before moving to the insurance industry and joining Chubb in 2004. Wingert had in mind a career in the environmental field while studying civil engineering in college, which was before environmental engineering was a recognized field. What he appreciates most about the field is his potential to make a difference: “One very important aspect of the environmental field is the impact those of us who work in it can have. Most of the time it’s a very positive impact.”
Property owners that did not contribute to the pollution at a site can secure pollution-cleanup waivers from federal and state environmental regulators, “but there are a lot of hurdles to go through to prove the company’s an innocent landowner,” Wingert says.
Karl Zimmel, Manager of Risk Management Services at Tucson Electric Power
For a power utility, the main environmental challenge is regulation, says Zimmel, who has professionally managed risk for 30 years. Zimmel characterizes Environmental risk as a moving target—and says that’s especially the case regarding regulation covering how the utility monitors risk and files mandated reports to regulators. “We’re such a target for EPA regulation. That always makes [Environmental risk] challenging,” Zimmel says.
“Every year we review emerging risks” for the utility, Zimmel says. “Included in that is Environmental risk, which is ever-emerging.”