The honor for 2018 Risk Management Team of the Year went to global electrical power company AES Corp., American International Group Inc. and Marsh L.L.C. for their innovative approach of embedding terrorism and resultant damage cyber coverage within AES’ existing global captive property program, eliminating potential gaps between policies, providing additional limits and expanding cover to all AES insured assets.

“This was a particular need in the market given the increased frequency of and discussion around cyber attacks,” said Andrew Baillie, program director of global insurance for AES in Arlington, Virginia. “There was also board pressure from our company as well, who wanted to know what the situation was regarding the cyber coverage and could we confirm to the board we had affirmative coverage.”

This solution provides substantial limits for AES’ traditional property perils, in addition to terrorism coverage for all of AES subject to a per-occurrence and aggregate limit, including coverage for certified and noncertified acts of terrorism; and affirmative coverage for physical damage losses resulting from cyber terrorism events, subject to occurrence and aggregate limits, with AES accepting a substantial aggregate retention into the captive on a primary basis.

The novel structure was a ground-up undertaking.

“I think the problem was that no one had done it before, so there were a lot of different parts we had to bring together, from the issue of local policies all the way through to the reinsurance, so that everything was actually lined up and we had concurrent coverage,” Mr. Baillie said.

“Our greatest challenge was moving the market to think beyond the status quo and support a customized solution designed to meet the client’s risk transfer needs,” Donna Thomas, Baltimore-based senior vice president in Marsh’s U.S. power and utilities practice, said in an email.

Fortunately, the partners had been working together for a decade or more.

“We’ve been running this program together for about 10 years,” Mr. Baillie said.

Marsh was appointed in 2007 and AIG in 2003, “so we do have long-standing relationships with them.” 

Finalists:

• Compass Group North America, a unit of Compass Group P.L.C.
• Districts Mutual Insurance and Risk Management Services
• Henry Schein Inc.
• JLT Specialty USA/Barclays P.L.C.

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