Business Insurance | RIMS 2019 | Monday, April 29

Boston | April 28-May 1 MONDAY 20 19 SHOW DAILY APRIL 29, 2019 Q&A: TRACY RYAN Insurtech takes center stage as RIMS returns to Boston Liberty Mutual claims executive BY LOUISE ESOLA discusses goals for RIMS 2019, The Risk & Insurance Man- as a “Shark Tank”-style show- insurtech solutions that allow how technology agement Society Inc.’s annual down in which startups will organizations to gather and is changing the conference in Boston will cover demonstrate their risk-focused analyze better data, search for insurance claims a broad range of key topics, technology solutions before a trends and root causes of risks, process and, as including cyber risk and diver- panel of risk professionals, on and improve functions, accord- a long-time Boston resident, offers sity and inclusion in the insur- Wednesday. The competition ing to organizers. some tips for conference attendees ance and risk management sec- looking to explore the city. tor, but the industry’s insurtech RIMS President Gloria Brosius Cyber risk will also be at the PAGE 6 wave will receive megabytes of forefront with a record nine attention. said insurtech “is really sessions offered at this year’s Disaster test runs conference — several of which spark solutions That’s according to RIMS Pres- taking the industry by storm, were added in recent weeks to for the real thing ident Gloria Brosius, who called keep up with demand, said Ms. the latest wave of technology and in recent history this is Brosius. “That’s an ever-evolv- BY GLORIA GONZALEZ in insurance one of the biggest ing exposure that we all have. things to hit the industry in her the biggest thing out there.” I don’t think any company is CHEPACHET, Rhode Island 30-year career. immune to cyber exposures.” — FM Global engineers spend will highlight technological a lot of time lighting things on “Technology is changing our advancements in artificial intel- Diversity and inclusion is fire and blowing things up to profession,” said Ms. Brosius, ligence, the “internet of things,” another major focus, as last figure out the best ways to pre- who works out of Loveland, mobile applications and other year’s events were “standing vent things from catching fire or Colorado, as the director of blowing up. risk management and insur- See PREVIEW page 15 ance for Pinnacle Agriculture FM Global engineers simulate a Distribution Inc. “Every year 7.1-magnitude earthquake. there is something new in the risk profession. There’s always During a tour of the 1,600-acre something new in insurance. FM Global Research Campus, (Insurtech) is really taking the built in 2003, engineers for the industry by storm, and in recent Johnston, Rhode Island-based history this is the biggest thing mutual insurer replicated the out there.” impact of the 2017 hurricanes — demonstrating the damage that RIMS, which is holding its can be caused by projectiles hurl- annual conference in Boston for ing at windows at wind speeds of the third time following previ- about 110 miles per hour, as well ous conferences in the city in 1990 and 2010, will feature its See FM GLOBAL page 15 first-ever Insurtech Competi- tion, described by organizers GOLF TOURNAMENT PAR EXCELLENCE PHOTO GALLERY Annual outing benefits Annual Marsh survey Snapshots from RIMS Spencer Foundation on risk management weekend events PAGE 3 PAGE 4 PAGE 10 Entire contents copyright by Business Insurance Holdings. All rights reserved.

Better Understood. Better Protected.™ We develop risk management Monday’s Speakers strategies and insurance solutions to help protect companies today Is your construction crew going “green”? so they can focus on tomorrow. Medical marijuana and your liability Matt Rodliff, Sr. Claims Manager, Construction, Liberty Mutual Welcome to what’s next — 11:40 a.m. – 12:00 p.m. | Innovation Hub from here, go anywhere. Side effects and risks of artificial intelligence Ian Mackenzie, Director, Corporate Strategy & Research, Liberty Mutual 1:45 – 2:05 p.m. | Innovation Hub Leveraging D&I to uncover a gold mine of talent, growth and profit opportunities Clive McCarthy, Sr. Branch Manager, PI Distribution, Liberty Mutual 3:00 – 4:00 p.m. | Room 253A Some policies may be placed with a surplus lines insurer. Surplus lines insurers generally do not participate in state guaranty funds and coverage may only be obtained through duly licensed surplus lines brokers. © 2019 Liberty Mutual Insurance. Insurance underwritten by Liberty Mutual Insurance Co., Boston, MA, or its affiliates or subsidiaries. Proud supporter of RIMS, visit us at booth 733.

CONFERENCE COVERAGE | MONDAY,APRIL29 Boston | April 28-May 1 Players rise to the top in Spencer/ Gallagher golf outing Spencer/Gallagher golf outing winners are, from left: Andy Hixson, president; Dave Pearson, vice president; Bobby Chiasson, vice president of sales and marketing; and Austin Stone, head of national business development, for Northstar Recovery Services. Panel stresses importance of diversity, inclusion BY CLAIRE WILKINSON at the second annual diversity and director of risk manage- necticut-based Christopher J. and inclusion meetup at the ment for Novartis Pharmaceu- Swift, chairman and CEO, The Diversity and inclusion is no RIMS annual conference in Bos- tical Corp.; and Hartford, Con- Hartford. longer just about gender, race ton on Sunday. and sexual orientation, it’s a much bigger topic that requires “Inclusion includes more than action from everybody, includ- talking about race, gender or ing risk managers, experts say. sexual orientation,” he said. “It includes thought.” Risk management needs to understand why diversity and A panel discussion featured inclusion is so important, said New York-based John Doyle, Robert Cartwright Jr., Exton, president and CEO of Marsh Pennsylvania-based safety and LLC; Hartford, Connecti- health manager at Bridgestone cut-based Susan Johnson, chief Retail Operations LLC and diversity and inclusion officer, immediate president of the The Hartford Financial Ser- Risk & Insurance Management vices Group Inc.; East Hanover, Society Inc.’s board of directors New Jersey-based Jennifer Santiago, RIMS board member BUSINESS INSURANCE RIMS 2019 3

Boston | April 28-May 1 CONFERENCE COVERAGE | MONDAY,APRIL29 Better use of data, analytics seen as No. 1 priority BY MATTHEW LERNER earmarking about $1 trillion to get ied, a third of them are saying their own changing risk profiles,” involved in risk finance, he said. that they’re using alternative risk he added. Improving the use of data transfer methodologies already, and analytics was the top risk At the same time, “there’s defi- and another 8% expect to do so Similarly, “some of those alter- management priority in the nitely explosive growth in data over the next two years,” Mr. native capital sources don’t have Excellence in Risk Management and analytics,” and the study Elowe said. “That combination of longstanding underwriting and XVI survey released by Marsh this year “is really about the things evidenced to us that this claims divisions, so for them it’s LLC on Monday. connection between the two,” was an area worth diving into a all about the modeling in order to Mr. Elowe said. little bit more deeply.” attract their capital,” much like Nearly half of respondents, catastrophe bond investors seek 47%, made it their top pick in the Growth in the use of alternative “For those organizations that robust hurricane modeling, Mr. survey, which is based on more risk transfer helped spur the are marshaling the data, it helps Elowe said. than 600 responses and a series decision, he said. them understand and model out of focus groups with leading “Formalize/expand risk man- risk executives in January and “Of the organizations we stud- agement training/education February 2019. across the organization” was the second-highest risk management The Strategic Risk Finance in priority in the survey, selected by the Era of Big Data report also 33% of respondents. focuses on how data and analytics can be used to make alternative “We see a real opportunity for risk transfer decisions, accord- risk executives to help their orga- ing to Brian Elowe, Boston-based nizations by educating them,” North American chief client offi- Mr. Elowe said. “There wasn’t cer for Marsh LLC. enough knowledge about the products and how they can best There is a rising level of capital be used inside an organization. available for risk financing, with That creates a big opportunity capital providers such as pension for the risk executive and risk funds and sovereign wealth funds managers to become educators.” Risk managers view economy as top concern BY MATTHEW LERNER with managing risk at many of ly now are ones where a cyber es become more acute,” he said. the world’s companies. trigger leads to a business dis- Aging workforce and related An economic slowdown or ruption as opposed to loss of data slow recovery is the top concern Meanwhile, damage to reputa- or data theft,” Mr. Moloney said. health issues moved to 20th from among businesses and risk tion or brand slipped to second 37th and is expected to move managers, according to the Aon place from first place in the pre- Disruptive technologies rose into the top 10 risks by 13 of the Global Risk Management Survey vious survey. to 14th from 20th previously. industries surveyed by the year 2019. Technology is widely seen as an 2022, Mr. Moloney said. “In some economies like Asia enabler of greater efficiency and “Changes in the macro econo- ... (workforce) shortages other advantages, but it must Loss of intellectual property my and concerns about interna- become more acute.” also be looked at through a “risk fell to 34th place from 29th place tional trade conditions are mak- lens,” Mr. Moloney said. in the previous survey despite ing businesses more sensitive to Rory Moloney, the fact that “intellectual prop- volatility,” said Rory Moloney, Aon Global Risk Consulting Concerns about workforce erty for businesses is increas- CEO of Aon Global Risk Consult- shortages and an aging work- ingly becoming a strategic issue ing in London. Business interruption rose to force and the impact of costs and a risk issue,” Mr. Moloney fourth from eighth in the last associated with related health said, and represents a potential- Such changes and forces also survey. “I think a lot of that is issues are part of what Mr. Molo- ly “underrated risk by the risk drove concerns over accelerated spurred by the cyber linkage and ney calls “people-related risks.” management community.” rates of change in market factors the fact that a lot of the cyber Workforce shortage moved to up to third place in the survey incidents we are seeing global- 18th place from 30th, and “In This year’s report encompasses from 38th in 2017, according the some economies like Asia, where nearly 2,700 businesses in 60 latest biennial report comprising there’s less available talent than countries spanning 33 industries responses from those charged in North America, those shortag- and eight languages, Mr. Moloney said. 4 RIMS 2019 BUSINESS INSURANCE

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Boston | April 28-May 1 CONFERENCE COVERAGE | MONDAY,APRIL29 Tracy Ryan LIBERTY MUTUAL Tracy Ryan is executive vice president and chief claims officer of global risk solutions at Liberty Mutual Insurance Co. and a 25-year Boston resident. Ms. Ryan, who has served on the boards of the National Council on Compensation Insurance Inc. and the Workers Compensation Research Institute, recently spoke to Business Insurance Reporter Angela Childers about her favorite things about Boston, the Risk & Insurance Management Society Inc.’s annual conference and how she believes technology will affect the future of claims. Edited excerpts follow. “One of my favorite places in Q What are your goals Q How do you see technology A I think it’s the change man- (Boston) is called Mapparium. for RIMS this year? improving claims agement aspect of it. As a It’s this enormous inside-out management in the future? large claims operation, we A My No. 1 goal is always to have 3,500 people, and they’ve glass globe. You can stand make sure that I have the A Technology is infiltrating been doing things in a certain in it and it almost feels like opportunity to engage with all aspects of our lives. way. The pace of change is cer- you’re inside a Christmas our customers and hear how Within claims, there’s a lot of tainly faster than we’ve seen they’re doing and what is on power coming into the technol- in the past. We’ve had to make ornament. My favorite their mind. I love that custom- ogy that our claims profession- sure we have a very robust museum is the Isabella er-broker engagement. It’s a als use every day … enabling change management process Stewart Gardner Museum … little more personal and one- improved outcomes, access within the organization so our it’s absolutely beautiful.” on-one. I like to go to some of to data and making us more people are ready and able to the sessions and sit around efficient. Just think about all adapt to changes in processes and be with risk managers, the documents that come in. and how they do their work. some of the other carriers and (third-party administrators) We now can extract the data Q Can you share any of your and learn about the new top- and use artificial intelligence favorite hidden gems in ics that are hot in the industry. to provide better insights to Boston for conferencegoers? And … to see which vendors adjusters faster. We’re also are in the exhibit hall. now using automation to A One of my favorite places streamline our processes, to in the city is called Map- Q What role do you think free up our claims teams to parium. It’s this enormous technology will play focus on the more complex inside-out glass globe. You can at this year’s RIMS? part of their jobs. stand in it and it almost feels like you’re inside a Christmas A I think it’s just front of mind Q What are the biggest ornament. My favorite muse- for everybody, whether challenges in fully utilizing um is the Isabella Stewart you’re a broker, risk manager, technology in the claims Gardner Museum … it’s abso- carrier or TPA. I can’t imag- process? lutely beautiful. ine there will be a meeting at RIMS where some aspect of Q What should be the city technology and digital capa- of Boston’s greatest bilities isn’t being discussed. concern in hosting RIMS? People want access to their data … people are looking for A The weather! Boston is a fun faster and easier ways to have city to walk in. Hopefully if that data managed effectively. the weather is nice, people can Customers are going through get out and explore. Another this technology revolution as thing the city should be worried well, and understanding how about is a lot of people descend- that changes their exposure is ing … who may not all be Red a big piece of the discussion. Sox, Patriots and Bruins fans! 6 RIMS 2019 BUSINESS INSURANCE

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Boston | April 28-May 1 CONFERENCE COVERAGE | MONDAY,APRIL29 Digital contingent business interruption cover responds to cyber risks in supply chains BY JUDY GREENWALD Supply chain-related cyber National Institute of Standards al sales leader for cyber insur- focused on supply chain risks, risks are an increasing con- and Technology. ance with Aon PLC. but as we go down the lines of cern for organizations as cyber the smaller and medium-sized attacks become more sophisti- A study issued in November But there remains a lack of businesses, they are less focused cated, but risk management and 2018 by Traverse City, Michi- awareness with some buyers, on cyber risk management.” insurance strategies to address gan-based Ponemon Institute say many experts. the problem vary. LLC reported that 59% of 1,038 Contingent cover companies said they had expe- “Not enough due diligence is Large policyholders often rienced a data breach caused going on to understand the IT More insurers are starting to seek coverage for the expo- by one of their vendors or third security makeup” of entities “to offer contingent business inter- sure, but smaller policyholders parties. make sure there’s no cross-con- ruption coverage as an inte- remain exposed, cyber insurance tamination,” said Bernard gral part of their coverage, say experts say. Cyber-related supply chain Regan, director at BTVK Adviso- experts. risks are often associated with ry LLP, a London-based forensic Insurers are meeting the ransomware attacks, experts say. accounting firm. Bob Wice, Farmington, Con- demand for protection by provid- This was the case in the recent necticut-based head of the U.S. ing contingent business interrup- incident involving Norwegian “I don’t think it’s necessari- cyber underwriting team for Bea- tion coverage within cyber poli- aluminum maker Norsk Hydro ly being effectively sold, and zley PLC, said the market typical- cies, sometimes for higher rates. ASA, which recently reported there’s a lot of education and fur- ly covers “that initial step down But such risks create underwrit- it was back to near normal sev- ther understanding that needs to with the dependent business.” ing challenges for insurers, par- eral weeks after a ransomware happen before the demand will ticularly surrounding the prob- attack. The attack impacted really kick up,” said Brad Gow, Robert Parisi, New York-based lem of risk aggregation. parts of its production. Purchase, New York-based cyber managing director and cyber product leader for Sompo Inter- product leader for Marsh LLC, Organizations are vulnerable Norsk Hydro’s experience has national Holdings Ltd. said the cyber market is “step- to cyber-related disruptions at raised awareness of the issue, ping up to fill” the void created their critical vendors, which may say observers. John Farley, New York-based by property insurers because sometimes be caused by crimi- managing director of the cyber that market “is no longer being nals or state actors that use a “We’re having a lot of dialogue liability practice for Arthur J. vendor as the first step in reach- with first-time buyers,” said Gallagher & Co., said, “Proba- See SUPPLY CHAIN page 17 ing a target victim, experts say. Stephanie Snyder, Chicago-based bly the larger, more sophisticat- senior vice president and nation- ed companies are going to be “Not enough due diligence is going on to understand the IT security makeup” of entities “to make sure there’s no cross-contamination.” Bernard Regan, BTVK Advisory LLP A cyber breach can have a “waterfall effect throughout the supply chain,” said Jon M. Boy- ens, cyber supply chain manage- ment program manager at the Gaithersburg, Maryland-based 8 RIMS 2019 BUSINESS INSURANCE

SPONSOREDSECTION Customer-focused approach helps QBE differentiate Uwe Schoberth | Global Head of Market Management for QBE Insurance Group Uwe Schoberth, Global Head of Market Man- enhance customer engagement, and deliver a ing) experience to be as frictionless as possible. agement for QBE Insurance Group, recently sat consistent level of outstanding service across We’re here to help them explore innovative ways down to discuss the large international insurer’s our global footprint. to manage all of this, designing bespoke poli- investments to create a more unified customer cy forms, helping them form captives, creating experience, from sales through client services. Q. Tell us a bit more about the GMM team’s new products to transfer and manage emerging Australia-based QBE, one of the world’s major plans to enhance client and broker experience. risks, and so on. insurers, employs more than 12,000 people in A. We want client and distribution partners to 31 countries. The company recently launched come to us because they view QBE as a valued Q. An insurer’s reputation for innovation the Global Market Management (GMM) a new partner that delivers relevant insights, advice has become a crucial component in the ‘centre of excellence’, demonstrating a clear and support with industry leading tools and re- considerations of brokers and clients. statement that QBE puts the customer, including sources at different touchpoints—not just 30 Do you agree? clients and distribution partners, at the centre of days before the policy renewals. To make good A. Absolutely. Carriers must step up and be as everything it does. on this commitment, the GMM team will facili- innovative if not more so than the dozens of tate building a global framework that provides InsurTech startups that have raised nearly $5 Q. You recently were appointed to head up a easy access to all of QBE’s global capabilities billion over the past six years to reimagine insur- new organization within QBE—Global Market and resources. ance. In doing this, we must consider each cli- Management (GMM). Tell us about GMM and ent’s unique risk profile to provide more targeted its focus. But that’s only part of the picture. We want and innovative insurance products and services. A. GMM is a center of excellence comprised of to institutionalize the relationships we have more than two-dozen representatives drawn to- with customers, communicating with them on a Q. Technology offers a means to do that, gether from various company and functions like regular cadence to cultivate a closer and more of course. distribution, underwriting, claims and technolo- value-added relationship. A. That’s true but the important thing is data gy. The team’s mandate is to further embed a first, technology second. There has been an unified culture into QBE with a Global Customer Q. Is helping clients with their total cost of explosion in both internal and publicly available Commitment approach as the foundation. This risk a key GMM imperative? data, in addition to increasingly innovative soft- will be accomplished by collaborating with the A. It is, indeed. We perceive the GMM team as ware tools to collect and analyze this informa- Divisions to create consistent customer-centric an extension of our clients’ risk assessment tion for decision-making purposes. Underwriters practices and then replicating them across our and risk engineering practices. For example, using predictive analytics can better segment international operations. We believe the GMM if we see an exposure emerging, we’ll directly and price risks. Claims professionals can more team has the knowledge, experience and exper- engage brokers and risk managers to ensure easily detect possible fraud, reducing aggregate tise to move the needle on all our strategic prior- they’re mindful of this risk and potential mit- claims costs for the benefit of all policyholders. ities in 2019 and beyond. igation strategies. We want to become more Lastly, the analytics present a tremendous op- than an insurer in the traditional sense—to be portunity to ease and simplify interactions with Q. What was the impetus for forming this a trusted partner that really knows the clients’ customers, from sales and policy submission global team at this particular juncture in time? business models and operations, can identify through the filing of claims. A. Our industry is clearly at a crossroads. key risks to these processes, and, above all, can Competition is intense and growing, pressuring help them improve business resilience. Q. Will the GMM team be involved in a need for market differentiation. By investing in developing innovative cyber risk solutions to new technology tools like predictive analytics, we Q. Is it fair to say that QBE, through GMM, enhance clients’ risk resiliency? will be able to provide more efficient, seamless is developing a differentiating customer value A. Cyber security is of increasing concern for and frictionless experiences to current and proposition? businesses of every size, right around the world. prospective clients, helping us stand out in the A. I would say that we are looking to provide We plan to more closely align our technical re- increasingly crowded marketplace. Our view of more than traditional insurance products that sources to help risk managers better prepare for digital and data transformation is that it must transfer client risks. We want to help clients bet- cyber incidents and mitigate the outcomes. be driven by what is best for customers—not ter manage their total cost of risk—not just their just in the products we offer, but also how risk financing costs via insurance but also direct Many growing small and medium sized busi- we offer them. We are also working closely loss costs like retained risks and uninsured nesses, for whom data is central to their opera- with our distribution partners to identify joint losses, their indirect costs like reputation and tions, too often lack the resources to effectively opportunities for collaboration by leveraging the workforce morale, and even their taxes, admin- manage it. This creates significant risk. QBE al- best of our data and analytic strategic offerings istrative costs, and so on. With today’s market ready offer cyber-insurance in some regions, and which could create value for our mutual clients. volatility, clients want more options than a tra- through our partnership with Zeguro, we have The enhanced focus with our technology and ditional insurance product that transfers their the potential to augment our position globally, internal industry expertise will continually risks. Many clients are looking for coverages leveraging the power of Zeguro’s platform. strengthen our ability to simplify processes, tailored closely to their unique exposures and risk appetites. And they want the (insurance-buy- That’s just another benefit of our ‘working together’ approach.

Boston | April 28-May 1 CONFERENCE COVERAGE | MONDAY,APRIL29 10 RIMS 2019 BUSINESS INSURANCE

CONFERENCE COVERAGE | MONDAY,APRIL29 Boston | April 28-May 1 BUSINESS INSURANCE RIMS 2019 11

Boston | April 28-May 1 CONFERENCE COVERAGE | MONDAY,APRIL29 HEARD ON THE STREET What are you SUSAN GORDON LINCOLN ROMAIN BARRY DILLARD most looking forward to at Former risk manager and current Senior risk manager Director of risk strategies, RIMS this year? Contreras Family Executive CenturyLink Inc. insurance and compliance in Residence for Risk Management Randolph, New Jersey Walt Disney Parks St. Mary’s University and Resorts U.S. Inc. San Antonio “I’m most interested in education, Orlando, Florida networking with my colleagues and “What I’m most excited about is the of course meeting with my brokers “I think the RIMS technology opportunity that the RIMS conference and carriers … and last but not least, competition will be exciting. provides for students who are the the great parties.” It’s kind of like “Shark Tank,” next generation of risk management with six companies presenting … professionals.” it’s going to be pretty cool.” TRUST. www.businessinsurance.com Risk management executives consider Business Insurance the #1 most credible brand.* BE A PART OF THE CONVERSATION ADVERTISE & SPONSOR: [email protected] SUBSCRIBE: businessinsurance.com/membership ATTEND: businessinsurance.com/events *Signet Media Preference Study 2015 12 RIMS 2019 BUSINESS INSURANCE

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CONFERENCE COVERAGE | MONDAY,APRIL29 Boston | April 28-May 1 PREVIEW within the organization and the ing keynote, “The Culture Map: ora, who was named its 2019 Risk industry at large. Breaking Through the Invisible Manager of the Year, during Mon- Continued from page 1 Boundaries of Global Business,” day’s general session, as well as Erin Meyer, a business consul- while tennis champion Billie David Stills, who was inducted room only,” said Ms. Brosius. tant who offers managers advice Jean King will deliver the closing into the 2019 Risk Management Monday’s panel discussion on on navigating cultural differenc- keynote on Wednesday. Honor Roll, during Monday’s leveraging diversity and inclu- es in the global marketplace, will lunch event. sion efforts to uncover talent, deliver Monday morning’s open- RIMS will also honor Luke Fig- growth and profit opportuni- Meanwhile, attendees can ties will feature risk and insur- expect additional opportunities ance leaders discussing current for mini-information sessions, efforts to recruit and retain giving time-challenged risk pro- a diverse workforce and help fessionals greater options, said change the underrepresentation Ms. Brosius. of minorities in the industry. A session on taking diversity and “Another thing that RIMS is inclusion to the next level on doing really well is understand- Tuesday will update attendees ing how busy people are at on RIMS’ efforts to increase RIMS,” she said. “If people have diversity and inclusiveness both an extra 30 minutes, there’s a variety of formats that they can customize to fit their schedule through the conference.” FM GLOBAL Continued from page 1 as protective measures — in its FM Global simulates the Grenfell Tower fire, left, and a chemical fire, right, as it researches how to prevent natural hazards laboratory for such tragedies in the future. about 50 people on Sunday. tude quake that killed 370 people some things to withstand the product they decided to go with “We all know that natural in Mexico in 2017. movement of the earthquake.” would turn this building … into disasters are very fierce and a fire trap.” very violent, and there’s massive “Most of the damage from FM Global engineers also sim- potential for damage,” said Vic- earthquakes don’t happen to the ulated a combustible dust explo- For the fire that recently dam- tor Jaworski, manager of brand outside of the building, especially sion and an event similar to the aged the Notre Dame cathedral in experience for FM Global based as you’re building to a little more Grenfell Tower fire that killed 72 Paris, “the very early indications in Johnston. “We can’t choose modern, higher standards,” he people in London in 2017. are that it was probably an electri- where a hurricane is going to said. “It’s the internal bleeding cal fault” that started it, said Chris make landfall. We can’t choose that really gets you because, “It was a tragic fire, but prob- Johnson, an FM Global executive when an earthquake is going to unlike flood barriers that keep ably the most tragic thing about vice president based in Luxem- strike. But there is hope. Really the flood out and plywood that that fire was that it was com- bourg. “It will be very, very hard there’s a choice in how we decide keeps the wind out, you can’t pletely avoidable,” Mr. Jaworski to prove exactly how it began.” to plan for and respond to these keep the shake out. And inside said. “The management of the massive disasters.” your building, things topple and building wanted to modernize “What frustrates me is why on shatter and break. With earth- the building. They wanted to add earth can’t we put some fire pro- For example, one Houston- quake, we design some things to some insulation factors. What tection into these buildings?” he based client put up a flood bar- move with the earthquake and they didn’t know was that the said, referring to such historical rier prior to Hurricane Harvey, (aluminum composite materials) sites. which kept all its utilities dry during the storm. “And once the water receded and everybody could drive back to work, that building was operational and they could continue to serve their clients and make the reve- nues that business was designed to do,” Mr. Jaworski said. FM Global engineers also sim- ulated the impact of an earth- quake similar to the 7.1 magni- BUSINESS INSURANCE RIMS 2019 15

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CONFERENCE COVERAGE | MONDAY,APRIL29 Boston | April 28-May 1 SUPPLY CHAIN Continued from page 8 picked up in the same robust way about aggregation risk, particu- the unknown, although “the president for global cyber and it might have been” by them in larly from critical vendors, but industry is getting better at technology, global professional prior years. also from related lines such as understanding, if some events and financial risks with Lockton property that may be affected by happen, what is the ultimate Cos. LLC. “It is the systemic expo- Cyber insurers are trying “to a major event as well, even if the aggregation potential,” he said. sure across their book.” expand their policies to say coverage is “silent” and not affir- they’re one of the more com- matively written. “We just need to be “We just need to be careful prehensive carriers out there careful we’re approaching we’re approaching the risk with in terms of coverage,” said Mr. Aggregation is “the scariest the risk with adequate adequate levels of underwriting Farley. word in cyber insurance,” said levels of underwriting and data collection, and that Jim Leonard, Nashville, Ten- and data collection.” we’re comfortable with the port- “It’s a competitive market, and nessee-based director of cyber folio” as to how systemic events they want to stand out. That’s insurance solutions at Kroll LLC. James Burns, might impact it, said James one way to do it,” he said. CFC Underwriting Ltd. Burns, London-based cyber Tim Francis, Hartford, Con- product leader for CFC Under- “The coverage has been evolv- necticut-based enterprise cyber “It’s not just an aggregate expo- writing Ltd. ing, and it’s certainly been much lead for Travelers Cos. Inc., said, sure to one particular risk or one more readily available in the “We spend an awful lot of time” particular insured,” said Max Per- Aggregation is an issue of great last couple of years,” said Elissa thinking about aggregation risk, kins, Atlanta-based senior vice concern, said Shiraz Saeed, Starr Doroff, New York-based under- including how it is being mod- Insurance Cos.’ New York-based writing and product manager eled, whether the right tools are cyber risk national practice lead- for cyber and technology for Axa being brought to bear on the er, who said Starr works with XL, a unit of Axa SA. issue, and whether the tools have outside experts “to help us try the right level of maturity. to understand and gain control” Meanwhile, the Norsk Hydro of aggregation risk. attack “will certainly add more There is still some degree of scrutiny to the underwriting questions that are being asked to provide the coverage,” Ms. Doroff said. Mr. Gow said this coverage “typically isn’t priced out or offered independent of other coverages. It’s just kind of rolled into the price of the policy.” He added, however, with respect to larger companies, “usually if a company has a very complex sup- ply chain or is a heavily logistical firm, often the primary carriers will limit coverage, typically to 50% of the policy limit.” There is growing concern Vendor networks complicate business interruption analysis U nderwriting cyber-related contingent business cyber and technology, global policyholder, it “becomes murky said Shiraz Saeed, New York- interruption coverage is professional and financial risks with Lockton Cos. LLC. at best from an underwriting based cyber risk national practice standpoint,” so even if the business leader at Starr Insurance Cos. a challenge, experts say. “The interconnectiveness of can be underwritten, “it’s a very “What we underwrite to is our “Underwriters are having a the supply chain makes it very challenging discussion to have insured’s diligence in vetting hard time getting their arms difficult” to underwrite, said Eric with an insured,” Mr. Cernak said. their own suppliers and vendors around the risk,” because Cernak, Windsor, Connecticut- One of the challenges of writing and supply chains,” said Brad many policyholders do not based president of cyber at the coverage is cyber insurers Gow, Purchase, New York-based know what the risk is, said The Hanover Insurance Group “don’t usually get the same amount cyber product leader for Sompo Max Perkins, Atlanta-based Inc. As entities in the supply of underwriting information a International Holdings Ltd. senior vice president for global chain get further away from the property underwriter would get,” Judy Greenwald BUSINESS INSURANCE RIMS 2019 17

Boston | April 28-May 1 CONFERENCE COVERAGE | MONDAY,APRIL29 AROUND THE HALL CEO Adam Potter RIMS COVERAGE ONLINE PUBLISHER Business Insurance is delivering online Keith Kenner daily news reports from the Risk & Insurance Management Society Inc. (Chicago) annual conference in Boston. [email protected] www.businessinsurance.com EDITOR 18 RIMS 2019 BUSINESS INSURANCE Gavin Souter (Chicago) [email protected] DEPUTY EDITOR Gloria Gonzalez (Washington) [email protected] SENIOR REPORTER Judy Greenwald (San Jose) [email protected] REPORTER Angela Childers (Chicago) [email protected] REPORTER Louise Esola (New Orleans) [email protected] REPORTER Matthew Lerner (New York) [email protected] REPORTER Claire Wilkinson (New York) [email protected] COPY CHIEF Katherine Downing (Chicago) [email protected] COPY EDITOR Brian Gaynor (Portland) [email protected] ART DIRECTOR Jeremy Werling (Cincinnati) [email protected] DIRECTOR OF RESEARCH, PLANNING AND INSIGHTS Andy Toh (Chicago) [email protected] MAJOR ACCOUNTS DIRECTOR - NORTHEASTERN U.S. & INTERNATIONAL Ron Kolgraf (Boston) [email protected] HEAD OF SALES - EVENTS & WORKERS COMP MAGAZINE Jeremy Campbell (Cincinnati) [email protected] DIGITAL AD OPERATIONS MANAGER Arielle Bassett (Chicago) [email protected] VICE PRESIDENT OF MARKETING Brian McGann (Buffalo) [email protected] DIRECTOR OF MARKETING & EVENTS Katie Kett (Portland) [email protected] MARKETING & EVENTS MANAGER Brittany Collins (Lafayette) [email protected] REPRINT SALES MANAGER Marie LaFerrara (New York) [email protected] SUBSCRIPTIONS & SINGLE COPY SALES [email protected] 954-449-0736 Copyright © 2019 by Business Insurance Holdings, 4343 Old Grand Ave., Suite 110, Gurnee, IL 60031. PHOTOS BY MICHAEL MARCOTTE

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