Binder Vol. 43 No.1 Spring 2018 by Aviation Insurance Association

VOL. 43 NO. 1 - SPRING 2018

THE BINDER AUSTIN 2018 ARRIVAL OF COMMERCIAL JETS PROTECTING ADDITIONAL INSUREDS

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IN THIS ISSUE Editor Nigel Wright

XL Catlin nigel.wright@xlcatlin.com

ARRIVAL OF COMMERCIAL JETS

PROTECTING ADDITIONAL INSUREDS

WATTLES FELLOWSHIP

UNDERWRITER DIRECTORS REPORT

President’s message

EXCESS LIABILITY

AVIATION HISTORY

LA REGIONAL RECEPTION

ATTORNEY DIRECTOR’S REPORT

CLAIMS REPORT

YOU CAN DO IT, WE CAN HELP

AGENT/BROKER DIVISION REPORT DEALING WITH CHANGE

The ideas and opinions expressed by authors of articles published in The Binder are wholly their own and do not necessarily represent those of the Aviation Insurance Association. The articles are not provided as legal advice.

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Published by the Aviation Insurance Association 7200 W. 75th St. Overland Park, KS 66204

PRESIDENT’S MESSAGE

AIA’s Recent Year, Austin 2018, and The Year Ahead Paul Herbers - AIA PRESIDENT, Cooling and Herbers

We can’t wait to see you all at our annual conference in Austin. The AIA started in Texas in 1977 and has returned to that great state five times since, the last being twelve years ago. We return again in April, but – we are going to Austin for the first time ever, and it will be special indeed. If you don’t know Austin, you will be both surprised and impressed. Whatever your mental image of Texas may be, Austin will bend it. Their motto is “Keep Austin Weird,” and they do. Politically, even as Austin is the capital of the Lone Star State, with its young high-tech population it is nonetheless a blue dot in a sea of red. This year’s conference offers a powerhouse of keynote speakers, plus a particularly strong program of CIE presentations, and lots of networking fun in a beautiful new hotel, with night life in the center of Austin’s bustling live music district. Saturday golf at Falconhead, just outside the city, will be stunning and challenging. The sporting clays event at Copperhead Creek offers great scenery in a large venue well laid out for novice and expert shooters alike. Musically, Austin is its own country. We will visit Austin City Limits and the statue of Willie Nelson for our Monday

Night Extravaganza with the ever-popular (and steadily growing) AIA Smooth Limits Band! Your Board of Directors has much to report about the year we have completed since our conference in San Diego. We have embarked on an ambitious long-term program to attract new members. We do this, not necessarily with the idea that the conference itself needs to grow, but more so with the idea that we can reach out to many more of the professionals in our industry. Our annual conference has been, and always will be, at the very heart of the AIA. The size of our conference may be optimal now, giving all our members time and opportunity to network with everyone they want to. We welcome your thoughts on that, as well as anything we can do to improve the conference. But, what can we offer to those who do not make it to the annual conference? In response to this question, the Board launched this last year’s program of regional receptions, all based upon the model of our established biennial London Reception. Those receptions were open to anyone who wished to come, and provided at no cost. We were delighted with the results.

Our first regional reception in Dallas in June brought us a surprising number of new members who had not been exposed to the AIA before. Our second regional reception in Atlanta in September brought us even more. Then in November your Board traveled to the London Reception, which was perfectly situated at Lloyds. Finally, we held a fourth regional reception in Santa Monica, California, in February, at which we met yet another encouraging group of potential new members. For the year ahead, following our annual conference in Austin, we have still more regional receptions in the planning stages for additional new cities, and we hope to continue to see growth and success in welcoming additional newer and younger professionals in our association. But we have much more in mind, and we will keep you updated on the Board’s plans toward both growing membership and improving the membership experience for you and those new members who join us.

Chairman Frank Kimmel in his plans for developing new educational opportunities for our membership. In recent years your Board and Education Committee, working with Immediate Past President David Sales, have strengthened the AIA’s educational programs and offerings in a very significant way, so that we are now well positioned for new initiatives. We hope to coordinate and streamline the efforts of AIA’s Education Committee along with those of the Educational Foundation as we go forward.

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We hope to have exciting announcements for you in Austin about our plans for the coming year and years to follow.

All in all, we have much to be proud of with our association, and many membership opportunities to pursue. See you in Austin!

In addition to all this, your AIA in 2017 made a donation to the AIA Foundation of $50,000, to aid our new Foundation

Excess Liability

An Important Tool in a Dynamic Market

JASON RILEY - Menger Underwriting Services LLC

Transitioning Market

Even today, I am hesitant to say it out loud. I prefer the term “transitioning market.” The Hard Market has almost joined the ranks of Sasquatch, Nessie, and the infamous Snipe Hunt. Industry veterans talk about it with reverence, while many people in our industry have never actually seen one. Although, after the year of wildfires and H.I.M in 2017, all signs indicate that we may indeed see The Hard Market happen in 2018. In running an excess facility for the last 20 years, we have seen the signs developing that indicated the shift was coming. The market started shifting through limits management, especially in the P&B / Piston space. Then, as the losses piled up through 2017, it has begun to manifest itself in rates as well. The Hard Market cometh. Excess liability is always a useful tool for both the agent and underwriting communities. For agents, it gives an option to your clients for increased liability limits, and when it comes to potential errors and omissions claims, excess liability is certainly one option to demonstrate that the agency did everything possible to provide higher limits. For underwriters, it provides the ability to maintain underwriting integrity and discipline regarding increased exposure. When underwriters know that excess options are available, they can feel more

comfortable that they are not putting a valued producer in a predicament where the producer cannot provide solutions to their clients. However, as this market continues to stiffen, excess liability becomes an even more necessary option in order to provide clients the limits that they need and reinforce the underwriting discipline that the markets want to maintain.

Underwriter Tool

During the extended soft market, excess facilities really were not a tool for primary underwriters at all. In the end, their capacity “was what it was.” The market was driving reduced rates and what I have termed “limits inflation.” Twenty years ago, P&B risks were effectively limited to $1,000,000 CSL and that was it. Underwriting discipline was firm and pricing was conservative. As we have all witnessed, this extended soft market not only eroded rates but also allowed for expansion of liability limits that were previously unheard of; especially when it came to owner-flown aircraft. As this environment continued on, the need for excess became less and less.

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However, as this market continues to stiffen, excess liability becomes an even more necessary option in order to provide clients the limits that they need and reinforce the underwriting discipline that the markets want to maintain.

In the wake of 2017 and the tremendous losses that were experienced, the Transitioning Market is upon us and we are beginning to see a return to profit-based underwriting. As this continues forward, excess liability becomes an excellent tool for the markets to maintain that discipline with regard to both rate and limits management. Most people really do not like to tell someone “No” but sometimes it is necessary. With excess capacity available to bridge that gap, there are still options to provide the client with what they need and (or) want.

Agency Tool

Of course, many clients think they do not need to carry any meaningful liability limits because they (or their company) maintain an umbrella policy. Most understand that aviation is universally excluded from effectively all umbrellas policies, but many do not. While there are rare instances where an umbrella policy can be endorsed to remove the exclusion, it typically requires primary limits that are expensive or unattainable. It is important to have this discussion with clients and make sure that they understand the difference between umbrella vs. excess coverage and potential gap in coverage between the two. Another common thought with insureds is that the aircraft is registered under an LLC and therefore, they have insulated themselves from liability. However, we all know that an LLC is not a magical bullet that protects everyone from litigation. There are a variety of scenarios where an LLC simply is not enough to protect the client. One very clear scenario is that an owner/operator has personal liability while they are acting as Pilot In Command. If they are flying the aircraft when an accident occurs, the real question becomes, “How much coverage is enough?” Excess liability provides agents with a necessary tool to provide these clients with a solution for these exposures. Moreover, if agents are NOT giving their clients the alternatives for those increased limits, they leave their client exposed to potentially catastrophic losses. Not only is excess a tool for the client but an important piece of the agency processes to make sure that their insured’s understand their options and available limits.

As this transitioning market continues, it also provides agents with one more opportunity to deepen the relationship with their client. We all want to know that our advisors are taking care of us, and presenting options for more and better coverages gives agents an opportunity to demonstrate that value to their clients.

E&O and Professional Liability Tool

First and foremost, agents should feel a responsibility to let their clients know what their options are and let them decide what is appropriate for them in terms of coverage and expense. It is the right thing to do. We unfortunately live in a world where Errors & Omissions and Professional Liability are an ever-present concern for agents and agencies, but excess liability can help to address is a claim that there was inadequate coverage provided. Whether dealing in the P&B / Piston Aircraft space where many clients will change markets over nominal premium differences and often do not take any time to consider higher limits due to expense or with sophisticated owners/operators that are conscientious about their flight operations and the coverage that they carry, agents must at least let their clients know that higher limits may be available. Continuing Education and other industry courses certainly make known the need to provide options for higher limits. However, agency owners in particular, and agents in general, should incorporate this into agency workflows and checklists. At a minimum, clients should be made aware of the options available to them. Excess liability is another tool available in this endeavor, especially in the aviation space. The next 12-24 months will be very interesting for our industry. Hard markets are historically short lived. We have seen consolidation on the distribution side of our industry (agencies), and it would seem that the only way to sustain the current heading would be for supply consolidation (carriers). Who knows where it goes from here, but it will certainly be an interesting ride. Along the way, whether agent or underwriter, remember that excess is an excellent tool to navigate these waters.

aviation history

ARRIVAL OF ALEX WELLS - AIA Education Consultant

orty-four years to the day after the first flight by the Wright Brothers, the first XB-47 took to the air on 17 December, 1947. The subsequent B-47 Stratojet ushered in the jet age for the newly formed United States Air Force (USAF). It provided the United States with a quick strike nuclear deterrence at the start of the cold war with the Soviet Union. The B-47 never dropped a bomb in anger – a testament to its deterrent capability. While designed primarily as a bomber, the B-47 also served in a variety of reconnaissance roles until the last airplane was retired on December 29, 1967. A total of 2,384 B-47s were built by Boeing, Douglas and Lockheed between 1947 and 1956. Boeing was awarded an engineering study and preliminary design study contract for the B-52 Stratofortress in June 1946. Numerous major design configurations were developed by Boeing until the final result was obtained. Lessons learned from the B-47 were incorporated into the B-52 design. Improvements in power, structural materials used, range and other features included, enhanced the capability. A total of 744 B-52s were produced between 1952 and 1962. These venerable airplanes stood alert and provided this nation and the free world with a nuclear deterrent force for over 60 years. With the introduction of jet aircraft into the USAF inventory, inflight refueling became a tricky operation of matching speeds between propeller-driven tankers and jet-powered bombers. Anticipating the needs of the USAF, Boeing used its initiative to privately develop a suitable tanker for the jet age. Hence, the famous Model 387-80 or commonly referred to simply as the Dash 80. The Dash 80 was the progenitor of both the commercial Model 707 and the Model 717, known as the KC-135 in the USAF. The first Model 707 was rolled out of the Seattle factory on May 14, 1954 largely based on faith alone because Pan American World Airways didn’t place an order until October 13, 1955. Pan Am initially placed an order for six 707-120s. However,

the 707 provided the airframe for the Air Force’s KC-135 Stratotanker which they ordered in August 1954. The KC-135 provided the needed fueler for the B-52 in flight. The B-52 had entered production in April 1953. While the airlines were pleased with their propeller aircraft and did not expect jets to enter the fleet for another ten years or so, John Allen, Boeing’s president at the time invested, or as the media reported, gambled $135 million on the 707 programs or more than the net worth of Boeing at the time. Gamble or not, Boeing was a year ahead of the next American-designed jet airliner to appear, the Douglas DC-8. Convair was close behind with their Model 880, the first of which entered service with Delta in January 1960. Lockheed did not enter the market until the early 1970s with their L-1011 TriStar. Boeing clearly dominated the jet airline market world-wide for 20 years after the first 707 was put in service on Pan Am’s New York-London route on October 26, 1958. Initial orders for the B-707 came in slowly because the airlines were still flying fairly new piston-powered aircraft that they still needed to recoup their investment from; therefore, the first 29 aircraft were built as KC-135A fuel tankers. It wasn’t long before the airlines started ordering jets and then a flood of orders came in from airlines all over the world after a large order was placed by Pan Am for 20 707s. Production centered on two major series, the 707-120 medium range versions for up to 181 passengers, and the 707-320 long-range version for 189 passengers. When production ended in 1978, a total of 1,011 Boeing 707 airliners were produced and were operating in every continent of the world. The 707 quickly became the most popular jetliner of its time. The popularity led to rapid development in airport terminals, runways, airline catering, baggage handling, reservation systems and other transport infrastructures. The advent of the 707 also led to the upgrading of air traffic control systems to

COMMERCIAL JETS prevent interference with military jet operations. These events were none too soon. In 1956, a United Airlines DC-7 collided with a TWA L-1049, Super Constellation over the Grand Canyon resulting in a loss of 128 passengers and crew; the first airline crash resulting in more than 100 deaths and led to sweeping changes with the passage of the 1958 Federal Aviation Act that created the Federal Aviation Agency. Like so many other events in the relatively short period of aviation insurance history, introduction of commercial jets had a significant impact on our industry. In the early 1960s, there were only two major insurance markets that could entertain the risk of insuring airline jet equipment. They were USAIG and AAU. USAIG, founded in 1928 by two entrepreneurial individuals, David C. Beebe and Major Reed M. Chambers. Both had served as pilots in WWI. Beebe had marine insurance experience and was a broker with Marsh & McLennon and spent some time in Europe studying the aviation insurance market. His partner, Major Chambers, was a leading figure in American aviation following the war. An ace in WWI and winner of the Distinguished Flying Cross, he was a founder of the Air National Guard in the United States. Major Chambers, along with Captain Eddie Rickenbacker, another member of the 94th Aero Squadron during the war, organized Florida Airways, the forerunner of Pan American World Airways. Major Chambers knew the technical end of aviation and the industry had immediate confidence in his judgment. Juan Tripp, President of Pan Am and another Yale alumni with Beebe and Chambers served in WWI as a pilot in the Navy. After the war he became manager of the Colonial Air Transport Company, winner of the first Contract Air Mail route and would eventually organize Pan American World Airways. Another one of the war-spawned aircraft industries was a Seattle-based company formed by a young engineer, William Boeing. During WWI he changed his company to the Boeing Airplane Company and sold the Navy 50 airplanes. In 1919 he would win the first Contract Air Mail route between Victoria, Canada and Seattle. One of his biggest breakthroughs was developing the Boeing B-40 in the early 1920s which not only carried mail (the prime income source) but two passengers; a

later “stretched” Model B-40-B could accommodate four passengers. Boeing went on to build the Model 247 during the mid-1930s that featured control surface trim tabs, an automatic pilot and deicing equipment. It could carry ten passengers and 400 pounds of mail coast to coast in 20 hours with seven intermediate stops. In 1934 Boeing developed the Model 299, a four-engine heavy bomber as a private venture to meet a 1934 U.S. Army Corps requirement for a multi-engine bomber which led to the famous B-17. A total of 12,726 were built during the war years. Since the very early days of aviation insurance another individual, and the company he organized, continuously played an important role in the U.S. market. This man was J. Brooks B. Parker. The firm he organized, Parker & Co., International, Inc. (later the Parker Aviation Division of Frank B. Hall and Company, now a part of the AON Risk Services) has been recognized as the world’s first brokerage house specializing in aviation insurance and a pioneer in aviation since its founding in 1919. One of the original founders of the Aero Club of the University of Pennsylvania in 1908, Mr. Parker joined Chubb and Son as a marine underwriter upon graduation in 1911. He entered the first class of Army flying schools in May 1917; graduated as a pilot and because of his marine insurance training he established his own brokerage firm. In exploring ever-broadening coverages to meet the insurance needs of clients, Parker & Co., working with the insurance markets, originated many of the forms and methods of writing aviation insurance. In addition to his insurance qualifications, Mr. Parker knew aircraft manufacturing and airliners from having assisted in the formation of several carriers. For example, Parker & Co. placed insurance coverages for Pan American World Airways through USAIG from its formative days and for many years afterwards. Parker & Co. induced the Continental Casualty Company to enter the aviation insurance field so that flight insurance for international air passengers could be sold by Pan Am ticket agents. Later, Parker & Co. expanded its operations in the international market, particularly in Lat-

in American countries, and became a significant reinsurance broker. The development of commercial jet transportation presented an unprecedented challenge to USAIG and AAU to provide coverage for the aircraft and liability it presented. To meet the huge requirements both groups utilized the full capacities of its member companies and turned in a big way to the world insurance market, including Lloyd’s and other British companies and those in continental Europe. Against this background of limited capacity in the domestic market, the Subcommittee on Antitrust and Monopoly of the Committee of the Judiciary of the United States Senate held hearings from August 6, 1958 through August 15, 1958. The overriding concern was the extent and effectiveness of competition in the aviation insurance industry. In response to the hearings, the aviation insurance

A catastrophic loss always has its effect on insurance but even more so during the period of introduction of new equipment when spread of risk is at a minimum, thereby making the peaks of exposure more evident. Estimated delivery during the late 1950s and early 1960s was slow and consequently proper spread of risk was slow in developing. In addition to the catastrophe hazard and lack of spread, experience had taught the industry that there is a higher loss frequency per unit at risk during period of introduction of new models. It takes considerable time, and in some cases years, to correct minor design and mechanical errors and develop the proper operating skills. All of these factors made it necessary that the insurers look at the results on the basis of a period of years rather than a year or two, if stability in rates was to

“The aviation industry by its very nature has always created problems for insurers uncommon to other forms of insurance.” market expanded over the subsequent years but primarily in the general aviation segment. In preparation for airline jets, the aviation insurers had to acquire underwriting knowledge concerning the requirements of aircraft manufacturers, parts manufacturers, airport authorities and servicing organizations as well as airlines so that their insurance facilities might be used in the best interest of the insurance and aviation industries. The ability to have the proper staff and facilities might be used in the best interest of the insurance and aviation industries. The ability to have the proper staff and facilities to accomplish this supported the theory that the insurance needs of the aviation industry would be best served by the group method of aviation underwriting.

be maintained. If aviation underwriters failed to take the catastrophe hazard into account, the airlines insurance cost as a direct consequence would have undue fluctuation at the least convenient time. The loss of an aircraft is always costly to an airline in the form of loss revenue, poor publicity and possibly not being able to take delivery of a replacement equipment for months. This is the least convenient time for a large increase in insurance costs. New policy clauses and wording had to be introduced to conform to the characteristics of the turbine engine. The more serious of these characteristics was extreme operating temperatures and ingestion of foreign matter which could cause extensive engine damage.

It is always easier to review the past than predict the future. Despite the anticipated growth and ever-changing conditions, underwriters were still faced with the challenge of developing a reasonable profit to insurers and reinsurers and yet a financially sound, stable, yet flexible, long-term insurance market for the insurance industry.

High-valued jet aircraft required costly maintenance and handling equipment. In the early days this created a concentration of aircraft at a few large maintenance and passenger terminal locations. Underwriters had to include a catastrophe limit in each policy that reflected the exposures of other insureds using the same locations.

Aviation underwriters’ most serious concern has always been the catastrophe hazard. This concern has always intensified during the period of introducing a new type of equipment particularly with airline jet aircraft and their higher values and greater passenger seating capacity. A mid-air collision, particularly over a metropolitan area, could exacerbate any loss.

The aviation industry by its very nature has always created problems for insurers uncommon to other forms of insurance. Add to this a new type of transport with problems unique to even aviation and it became apparent that in the future to properly understand our problems, it would be necessary to keep abreast of aviation developments and to have close coop-

eration among aviation insurers and reinsurers in the Western Hemisphere. Insurance on airline fleets including jet transports required a high percentage of reinsurance as well as technical underwriting knowledge. On November 1, 1957, USAIG, as the lead underwriter with a 50% share, offered the first hull insurance quotation on a Boeing 707 production model aircraft with inception on or about January 1, 1958. It was very similar to the prototype coverage. The amount of insurance for each 707 aircraft would be the contract sale price plus value of installed “customer furnished equipment” less completed work, as declared monthly by the insured and be not less than $4,300,000 nor more than $5,500,000 (latter figure including up to $200,000 in customer furnished equipment). The deductible was $50,000 or 1% whichever was the greater, each and every claim, each aircraft. There were many special conditions including a Waiver of Subrogation against engine manufacturers to the extent required by the engine sales contract. Waiver of Subrogation was also included against the airline customer and its observers during pre-delivery flights as required by the Boeing Sales Contract. The pilot warranty included named pilots approved by the Aviation Managers or by Boeing’s Chief Pilot, A.M. “Tex” Johnston. Incidentally it was Johnston who completed a complete loop in a 707 while demonstrating the aircraft before a wideeyed group of airline observers. While impressing the audience, Mr. Boeing was heard to say “now we know it can be done-but don’t do it again”.

First year hull rates were as follows:

Production, Acceptance, Customer Demonstrations $.045 per $100 per hour, first 500 hours; $.05 per and Delivery Flying and high-speed taxiing $100 per hour thereafter All other flying and high-speed taxiing

$.075 per $100 per hour, first 500 hours; $.05 per $200 per hour thereafter

All aircraft, ground risk

$.005 per $100 per day

As was the case of the original coverage on the Prototype, there was a partial advance of the Minimum Premiums. The aviation insurance industry has always been able to fulfill its obligations to the aviation industry and the arrival of Commercial jet aircraft was just another example. This will not change if we follow sound underwriting principles and use our experience to its fullest extent in keeping up with developments in the industry regarding its future requirements and hazards.

WATTLES

FELLOWSHIP A

IA Education Foundation Supports Walter C. Wattles Fellowship

As part of the efforts of the AIA Education Foundation, the Foundation supplies additional financial support to the Fellows who specifically work in an Aviation Insurance related field. Below is a letter written by the two recipients who earned the Walter C Wattles Fellowship. The AIA Education Foundation provided additional financial support of USD $2,500 each of the recipients.

the aerospace claims team, various underwriters and a number of clients, from start-ups to established airlines, gaining a well-rounded view of the business. Hannah has found the London aviation market to be a dynamic and interesting one,

The 2018 recipients, Hannah Bush and Antonia Scherer, are spending a year working in the London aviation insurance market. Both graduated from Vanderbilt University in Nashville, Tennessee in May 2017 and moved to London shortly after to begin their year in London. It was a privilege to meet Jim Gardner and David Sales in Lloyd’s recently and thank them in person for AIA’s generous contributions to our time here in London. We are both very appreciative of AIA’s support of us and the Wattles Fellowship and recognize its importance to our success as we start out in the business. Antonia has enjoyed her time working on the XL Catlin Aviation team as an Underwriting Assistant. She has been given opportunities to help out in every area of aerospace, including general aviation, products, space and claims in addition to her role on the airline team. A further rotation through the various areas in January gave her a better understanding of the different components of XL Catlin’s aviation department. Antonia was able to attend a 3-day aviation claims course in October 2017 that included a trip to the Cotswold Airport, learning about the inside of planes and engines, and a visit to the Air Accident Investigation Branch, where she was able to inspect crashed planes. In addition, Antonia has enjoyed the social aspect of the London market and has had the chance to attend events with various groups including brokers, claims adjustors and lawyers. During her time in London, Hannah has served as a broker on the Aviation team at JLT Specialty. She assists primarily on airline and general aviation accounts but has been fortunate to help out in other areas, as well. Throughout her time she has also had the opportunity to spend valuable time with

full of energetic, highly knowledgeable people. She has immensely enjoyed her time as a broker, particularly the opportunity to build relationships with underwriters. She recognises how unique it is to have the opportunity to work in the London market as a university graduate from the US, and is especially thankful to AIA for supporting her experience this year. Thank you again. Your support means so much to me and Antonia, and to the future aviation Wattles women!

2018

R E I M

E R P

AIA

S R E MB

FRANK ANTON Aviation Assurance, Inc. Ft. Lauderdale, FL ZACHARY BALLARD Salmon, Ricchezza, Singer & Turchi LLP Philadelphia, PA GRAHAM BARDEN Lockton Companies LLP London CAROLYN BELTON Belton Aviation Insurance Group, Inc. Advance, NC JOHN BLOOMSTINE Insurance Management Company Erie, PA TIMOTHY BONNELL JR Aeris Insurance Solutions Overland Park, KS SCOTT BRADBURY Atrium Underwriters Ltd London THOMAS BRADSHAW Halton Hall & Associates/Menger Underwriting Services, LLC Fort Worth, TX

ALAN FARKAS SmithAmundsen Aerospace Chicago, IL

JEFF CARR Unico Group, Inc. Lincoln, NE

DEBI FLEISCHER AvQuest Insurance Service Gold River, CA

ROB CHEEK Cheek and Company, Inc. Covina, CA

KEN FORSYTH Crawford Aviation Sunrise, FL

MICHAEL CHEVRETTE Great American Insurance Company East Brunswick, NJ

THOMAS FRY Howard Fry & Son, Inc. Carmel, IN

DAVID CHIPPERSON Great American Insurance Group East Brunswick, NJ

LAWRENCE GALIZI Aviation Risk Management Associates, Inc. Crystal Lake, IL

HONG-SUB CHOI Korean Reinsurance Company Seoul, Korea WILLIAM J COATES Commodore Insurance New York, NY CHARLES CONOUR, JR. Conour Insurance, Inc. Birmingham, AL PATRICK COSTELLO Costello Insurance Associates, Inc. Tempe, AZ

TERRY BRITT Eastern Aviation Insurance Services, LLC Lilburn, GA

JOHN CUNNINGHAM Beacon Aviation Insurance Services Sarasota, FL

SEAN EMMETT Charles Taylor Adjusting - Aviation Miami, FL

DAVID FEIGELSON Petkoff and Feigelson, PLLC Memphis, TN

DAVEION CRAIGIE AXA Insurance Company New York, NJ

THOMAS J. BYRNE Byrne, Kiely & White LLC Denver, CO

CANDACE EICHENBERGER Avinsure Agency, Inc. Powell, OH

DOUGLAS S. CARR EBCO Aviation Underwriters, Inc. Memphis, TN

MARK BREITENBACH XL Catlin Atlanta, GA

JEFFREY S. BRUNO Global Aerospace Parsippany, NJ

BARRY DOWLEN Falcon Insurance Agency, Inc. Kerrville, TX

DOUG DAVIDSON Davidson Solid Rock Insurance Clinton, AR MICHAEL DERY Alexander Holburn Beaudin + Lang LLP Vancouver, BC

KEVIN GRUYS Aircraft & Marine Insurance Agency, Inc. Burnsville, MN PETER GUY QBE Atlanta, GA CINDY HALES HUB International Northwest, LLC Bothell, WA MIKE HANSEN Allianz Global, Corporate & Specialty London JON R. HARDEN Aviation Insurance Resources Frederick, MD LAURA HEFT Butler Weihmuller Katz Craig LLP Chicago, IL THOMAS HOLLINGER Elevon Aviation Insurance Solutions Kennesaw, GA SIMON HOOPER Precision Autonomy Austin, TX

CHARLES GALLAGHER Charles Gallagher Insurance Tiburon, CA

MARION HOPE Hope Aviation Insurance, Inc. Columbia, SC

JIM GARDNER The James A Gardner Company Inc. Marietta, GA

JOHN HOWARD Silver Eagle Agency, Inc. Glenview, IL

DOUGLAS GAUDET Stratus Risk Underwriters Oldsmar, FL

CLAY HOXTON The Hoxton Agency, Inc. Shepherdstown, WV

STEFAN GLUTTING Munich Reinsurance Company Munich, Germany

MURRAY ISON Pinnacle Air Insurance, LLC Scottsdale, AZ

BRETT GODFREY Godfrey Johnson, P.C. Englewood, CO

THOMAS C. JOHNSON Airpower Insurance, LLC Phoenix, AZ

NANCY GRATZER Marsh USA Inc. Atlanta, GA

DAVID KAY The Hotaling Group New York, NY

DAVID GRAY QBE North America Atlanta, GA

MATTHEW KEMP Robson Forensic Denver, CO

TIMOTHY GRIFFITHS Verto Syndicate 2689 London

PHIL KENNEDY Servco Pacific Insurance Seattle, WA

SCOTT KENNEDY Parrish-O’Neill & Associates, Inc Mount Vernon, OH ROBERT KERN Kern Wooley, P.C Los Angeles, CA FRANK KIMMEL, III Kimmel Aviation Insurance Agency, Inc. Greenwood, MS RUSSELL A. KLINGAMAN Hinshaw & Culbertson Milwaukee, WI MATTHIAS KNAPPITSCH XL Catlin Re Zurich, Switzerland SCOTT LANGEVIN Avion Insurance Agency, Inc. Lake Mary, FL EFRAIN LEON GUY CARPENTER Mexico Intermediario de Reaseguro Mexico City, Mexico PAUL LEONARD CHARLES TAYLOR Adjusting (Aviation) Addison,TX TREVOR LIGHT Crawford Aviation Limited London MICHAEL C. LINDBERG Counsineau, Van Bergen, McNee & Malone, P.A. Minnetonka, MN PAM LIPSEY Lockton Companies Houston, TX DANIEL LUNDY Lundy & Clark Insurance Group, LLC Pompano Beach, FL DONALD CHANCE MARK, JR. Fafinski Mark & Johnson, P.A. Eden Prairie, MN BEN MARTIN Norton White Lawyers Sydney, Australia

DAVID S. MCCREDIE McCredie Insurance Agency, Inc. Flint, MI

JAMES ROE Arlington/Roe & Company, Inc. Indianapolis, IN

WILLIAM L. MCDONOUGH, JR. Copeland, Cook, Taylor & Bush, PA Gulfport, MS

STEPHAN ROESS Marsh Canada Ltd. Calgary AB

MINDY MCFARLAND Advanced Aviation Insurance Services Roseville, CA TWYLIA MCKEE Marsh and McLennan Agency, LLC Anchorage, AK J. BRUCE MCKISSOCK Marshall Dennehey Warner Coleman & Goggin Philadelphia, PA ALEXANDER MORRIS Airways International Insurance Service, LLC Mickleton, NJ DOUGLAS MORRISON Arch Reinsurance Company Morristown, NJ ROBERT MOTTA Aviation Insurance Advisors LLC Fort Lauderdale, FL JIM MUETHING Great American Insurance Group Cincinnati, OH JOHN MURRAY Murray, Morin & Herman, P.A. Tampa, FL BRIAN NEAL QBE Aviation Atlanta, GA DARRYL PANKRATZ Alexander Holburn Beaudin + Lang LLP Vancouver, BC CHRIS PEDDY JLT Re London

LOUIS R. MARTINEZ Martinez & Ritorto, PC New York, NY

PARKER PRICE Parker Price Insurance Agency Gulf Breeze, FL

EUGENE MASSAMILLO Kaplan, Massamillo, & Andrews LLC New York, NY

DAVID R. RIGG Parrish-O’Neill & Associates, Inc. Mt. Vernon, OH

NNA SMITH XL Catlin Zurich, Switzerland CHARLES H. SMITH Cantey Hanger LLP Dallas, TX

BRYAN ROSE Rose Walker, L.L.P. Denver, CO

JOEL SMITH U.S. Aerospace Defense Group Madison, MS

MARTIN E. ROSE Rose Walker, L.L.P. Dallas, TX

PAUL SMITH JLTRE London

PETER ROTA Aviators Insurance Agency, Inc. Van Nuys, CA

RALPH SOHL Old Republic Aerospace Kennesaw, GA

ROBERT F. RUCKMAN Jackson Walker L.L.P. Dallas, TX MICHAEL RUST Gray, Rust, St. Amand, Moffett & Brieske LLP Atlanta, GA JERRY RUTH CHUBB New Orleans, LA

ANDREA SOMMERLAD SCOR Zurich Switzerland MICHAEL SPARBER Riemer Insurance Group, Inc. Hallandale Beach, FL MICHAEL STASZEL McLarens Aviation Park Ridge, IL

LISA J. SAVITT The Axelrod Firm, P.C. Washington, DC

LORRETTA STEFFETER All Access Aviation Markets, Inc. Chicago, IL

SCOTT SCAMMELL Wings, LLC Stockton, NJ

JAMES STRAWINSKI Strawinski & Stout, P.C. Atlanta, GA

MICHAEL J. SCHOFIELD Clark Partington Pensacola, FL

THOMAS STRUEBER Weinberg Wheeler Hudgins Gunn & Dial, LLC Atlanta, GA

JAMES SHAW Butler Weihmuller Katz Craig LLP Tampa, FL LORRI SHUEY Nason Associates, Inc. Shawnee Mission, KS J. DENNY SHUPE Schnader Harrison Segal & Lewis LLP Philadelphia, PA NICHOLAS SIRIANNI Insurance Aviation LLC Miami, FL ANDREW SMITH AvPac Insurance Services, Inc. Santa Ana, CA

BRIAN SULLIVAN Dinsmore & Shohl Cincinnati, OH JEFFREY SUTTON London Aviation Underwriters, Inc. Federal Way, WA LESLY THATCHER Thatcher Aviation Risk Services & Insurance Solutions, LLC Walnut Creek, CA PETE TORELL Torell Aviation Insurance Agency, Inc.

Port Saint Lucie, FL TRACY TORO Aon Risk Services New York, NY ROBERTO A. TORRICELLA JR Torricella Law, PLLC Coral Gables, FL GLENNON TRAVERS Travers Aviation St. Louis, MO RICK TURNER Aerospace Risk Management Group Grand Ledge, MI EDMUND W. UNDERWOO Avsurance Corporation Ann Arbor, MI NICK VINE Lockton Companies Porter, TX WAYNE WAITE Poling Law Dayton, OH STEPHEN WAKEMAN Marsh Canada Limited Calgary AB JASON WISSMILLER Regal Aviation Insurance Hillsboro, OR IAN WRIGGLESWORTH Guy Carpenter & Company, Inc. London KEITH WRIGHT Sompo International Insurance Alpharetta, GA JENNIFER ZAK Shannon & Luchs Insurance Agency, Inc. Gaithersburg, MD ROBERT ZAVAGLIA, JR. Treece Alfrey Musat P.C. Denver, CO JONATHAN ZISS Goldberg Segalla LLP Philadelphia, NY

NOW!

Location JW MARIOTT, AUSTIN, TX

The 2018 AIA Annual Conference is the best venue to trade experiences, create business partnerships, and discuss the current state of the industry from each segment of the association. Network with your peers over cocktails during the opening reception and learn what is to come for the aviation insurance industry during the general education sessions. Save the dates for the 2018 AIA Annual Conference and you will be sure to see that AIA continues to be THE conference for those in the aviation insurance industry!

AIA Eagle society On behalf of the AIA Board of Directors, we are pleased to announce that the following individuals have been elected into the 2018 AIA Eagle Society

JOHN BROGAN

JOHN YOUNG

JEFFREY S.BRUNO

CARLA ZANETTE

DEBORAH ELSASSER

CHRISTOPHER R. ZANETTE

USAIG

GLOBAL AEROSPACE

CLYDE & CO LLP

JACK HARRINGTON

SMITHAMUNDSEN AEROSPACE

CHRISTOPHER C. JONES,

ACCELERATION AVIATION UNDERWRITERS, INC.

RAYMOND MARIANI

MURRAY, MORIN & HERMAN, P.A.

DAVID SALES ED BROKING LLP

IAN WRIGGLESWORTH

GUY CARPENTER & COMPANY, INC.

CHARLES TAYLOR AVIATION

ZANETTE AVIATION INSURANCE SERVICE, INC.

An AIA Eagle Society Member will have demonstrated their dedication to the AIA with their actions and deeds on behalf of the AIA, as well as having made substantial contributions to the aviation industry and/or demonstrated achievement in their career in aviation. Membership in the “AIA Eagle Society” is conferred by nomination by the President of the AIA, and awarded with the concurrence of the majority of the Board of Directors. The AIA Eagle Society award is presented annually at the AIA’s Annual Conference and has no limitations on the number of inductees. At the time of their induction, recipients shall have had at least ten (10) continuous years of membership in the AIA, unless this requirement is waived by a majority of the Board for good cause being had. The Eagle Society installation will be held during the 2018 Annual conference at the JW Marriott in Austin. Please join us in congratulating our new members of The Aviation Insurance Association’s Eagle Society.

AGENT/BROKER DIVISION REPORT

SO THE COMPANY IS BEING SOLD.

NOW WHAT? CHRIS ARNOLD - Director-Elect, Agent & Brokers Division , Sutton James, Inc.

n the current climate we live in as aviation insurance specialists, it seems like every other week there is a new rumor of a merger or acquisition. This can be a very turbulent and stressful time for everyone involved. I have spoken with various people who have gone through this process to gain a wide array of perspectives to share with the community in hopes that their experiences will help those who may be going through this same process. For this particular article I will focus mainly on the employees as this is the largest group and the group that seemingly has the least amount of control. There is also an emphasis on those agencies which are meant to keep operating not those whose accounts have been sold off. In future articles I plan to focus on both the current and the future owners. I will keep all names out of the article as I feel anonymity is the only way to get those individuals to speak honestly and openly. I want you to read the words in this article for what they are; not trying to figure out who said what. You can be assured that this is a compilation of not only my thoughts but those of many others throughout the industry. So how do you even know that change in coming? A lot of times there are signs; a comment that just doesn’t seem right, an overheard phone call. Do you work in a small agency with a principle who is approaching retirement age? If so, is there a transition plan in place? It

may not be a bad idea to ask about this plan. You may be told that it isn’t any of your business but wouldn’t you like to have an idea if the owner plans to work another 20 years or if he or she is thinking about selling the company in a year? Understand that they may not know the answer. It may be that they haven’t even given this much thought. Wouldn’t you like them to give this some thought now when they don’t have to sell rather than in 3 years when they suddenly need to? In most instances owners have been relatively forth coming with their employees. Most owners however do not go into any specifics other than the general idea. Keep in mind that this is also a very stressful time for the owner. They don’t want to deceive their employees but they can’t afford for the news to get out too early either. It could ruin a potential deal or cause undue stress on the employees. After the sale, the first thing you must come to grips with is that the only certainty is change. You must accept the fact the company you worked for does not exist. You may sit at the same desk and the people beside you may be the same but make no mistake this is not the same company. I do not say this necessarily as a bad thing; just a realization that things are going to be different. The sooner you are able to come to grips with this the better off you will be. If you try to desperately cling onto the past and pretend that nothing has changed you will begin to resent the “new company.”

Generally speaking smaller agencies seem to become part of larger agencies. This adds a whole new level of complexity and reporting that many are not used to. Suddenly something which you would normally just do has to go through the proper channels for approval. You can expect new protocols and procedures to be put into place. Along with this may come new software and management systems adding to the learning curve.

There is the potential for some really good things to come out of the sale. There is likely to be new opportunities and a new sense of energy. After all, the new owners saw something in the company to make them want to purchase and associate their name with your agency. This is a great time to present new ideas as the new ownership will likely be looking for the agency to grow.

One of the hardest things you may be asked to do is to take a customer which you have spent years cultivating your relationship with and hand them over to relative strangers in your new company for cross-selling opportunities. This is something many will struggle with. Until you are able to build a rapoir with your new coworkers it is extremely difficult to trust that someone else will give your customers the same care that you would, this is a huge leap of faith. There will be a change in the office dynamics. Your former boss may no longer be around and even if they are, they are now an employee, which is a whole new role for them. There may also be the introduction of new employees as well, which depending on the office can be a culture shock. Through all of this you must remember that your clients take priority. Through this transition you cannot allow your service to decline. It is natural for your clients to have concerns as to how this change will affect them. It is the utmost importance that you are able to assure them that their experience will not suffer as a result of the sale. You must make sure that your assurance is not mere lip service but back it up with tangible action by delivering on that assurance.

It is typical after many years that an agency may become stale and for everyone to settle into a rut becoming content with where they. The status quo becomes acceptable. Just because nothing is wrong doesnâ&#x20AC;&#x2122;t mean everything is right. Through this whole transition there will be unimaginable stress. This really is unavoidable. We are talking about your livelihood and the livelihood of your family. Change is uncomfortable there is no question about it but change is also what allows us to grow as both individuals and as professionals. The world is constantly evolving and as much as we want to hold on to the way things are we canâ&#x20AC;&#x2122;t stop time. My advice is not to dwell on what you canâ&#x20AC;&#x2122;t change or control but to embrace the new opportunities that may present themselves to you.

LOS ANGELES T

he third regional reception hosted by the Aviation Insurance Association landed at the Museum of Flying in Santa Monica and gave attendees the opportunity to tour the museum and enjoy an evening networking and learning more about the association. The keynote speaker, Lew Jennings, gave his presentation regarding his first-hand experience of being a helicopter pilot in Vietnam and his combat operations from the far South to the DMZ, including the infamous A Shau Valley, Hamburger Hill, LZ Airborne and others. Jennings, a retired Army officer, flew more than 700 Air Cavalry Cobra Gunship Helicopter missions and received Three Distinguished Flying Crosses for Valor. Following the session, the attendees enjoyed a cocktail reception to network with peers and meet the current members of the AIA Board of Directors who were in attendance. Thank you to LA-area AIA Board Members: Ernest DeSpain and Steve Teller for their assistance in making this event a success.

attorney director’s REPORT NICOLE STOUT - Director of Attorneys’ Division

he Annual Conference in Austin, Texas is just a few short months away. We are excited about the CLE offerings this year, and hope that they will be beneficial to you. We will have presentations on insurance issues related to being added as an additional insured on a business partner’s policy during the Attorneys and Claims Division meeting. Topics for our Tuesday CLE sessions will include an Air Show Panel; litigating with the FAA; Experimental Aviation claims, litigation and releases; and litigating traumatic brain injuries in aviation. We are also working on making sure that we maximize the amount of CLE credits available for the Monday sessions that are eligible for credit. Elections for the Director-Elect of the Attorneys’ Division will take place at the Annual Conference in Austin, Texas this year. Attorney members who are Premier or Executive members of AIA and have had Active Professional status in AIA for the two (2) years prior to the election are eligible to run. The election will take place during the Claims and Attorneys Division meeting on the afternoon of April 30, 2018, following a CLE for our

divisions. The election will be made by majority vote for those in the Attorneys’ Division in attendance. The office requires a commitment of three (3) years. For the first year, the position is Director-Elect and the term overlaps with the last year of the current Attorneys’ Division Director’s term. Each candidate will be given an opportunity to address those in attendance before the election. If you are interested in running for the office, please reach out to me directly to obtain the application, which will be due prior to the conference. The Board of Directors has been working diligently to update AIA’s By-Laws. The By-Laws were last updated in April of 2011. Given our vision for the future growth and enhanced benefits of AIA and the creation of new membership categories, the update is needed. With the addition of the regional conferences last year and exciting opportunities for networking and involvement, we are striving to make AIA a resource for all aviation professionals at every level. I am looking forward to seeing everyone in Austin!

CLAIMS REPORT

MIKE GRADY - Assistant Vice President and Claims Manager for U.S Specialty Insurance Company

PROTECTING

ADDITIONAL INSUREDS

nsurance policies are mutually exclusive. In other words, they are written to cover specific prop-

erty and casualty risks and exclude others that are insured elsewhere. In the same way, additional insured endorsements are written to cover specific risks, which are usually created by some sort of business relationship between the policyholder and the party seeking coverage as an additional insured. Understanding the exposure and the relationship between the parties is critical to doing this right.

Insurance underwriters are routinely asked to add business

craft define the contemplated risks for the insurer. In this

partners, airports and other entities to aircraft and airport

instance, it is appropriate for the operator (lessee) to be the

policies. This is often a contractual requirement of the

primary policyholder or named insured. The aircraft own-

business between the named insured and the entity seeking

er (lessor) should be named as a loss payee with respect to

protection. Each relationship is unique and understand-

the property coverage for damage to the aircraft and as an

ing the parties (who they are and what they are doing) will

additional insured with respect to the casualty coverage to

permit the underwriter to properly assess the risk and to

protect the owner for liability it may have as the owner. We

tailor the policy language to provide the protection that is

occasionally see policyholders get this backwards, with the

needed.

owner as the named insured and maybe the operator as a named pilot. In instances like this, the underwriter proba-

An aircraft lease is a common situation with both proper-

bly didn’t understand the true nature of the relationship or

ty and casualty elements. An aircraft owner (lessor) seeks

the contemplated use of the aircraft.

to lease an aircraft to an operator (lessee). The operator’s experience, qualifications and anticipated uses for the air-

Entities that contract with an aviation business for an aviation service may seek to be an additional insured under the aviation service provider’s liability policy to protect against any liability the entity may incur as a result of the negligence of the aviation service provider. Let’s look at some common casualty examples. An air-

vider’s liability policy to protect against any liability the en-

port, leasing space for aircraft storage wants to avoid in-

tity may incur as a result of the negligence of the aviation

curring any additional liability that it would not otherwise

service provider. In each of these examples, the party seek-

have but for the lease. Therefore, as a term of the lease,

ing additional insured status wishes to be protected for its

the airport seeks a certificate of insurance to confirm the

vicarious exposure that may come about as a result of the

tenant is insured or seeks to be an additional insured un-

negligence of the tenant or service provider. This is a rea-

der the tenant’s aircraft liability policy to protect against

sonable expectation and underwriters will typically provide

any liability they may incur as a result of the negligence of

an endorsement to meet this common request.

the tenant. Municipalities leasing airport property to fixed based operators (FBOs) or other aviation businesses may

Our customers should take the time to review and under-

seek to be an additional insured under the tenant’s airport

stand requests by their landlords and business partners

liability policy to protect against any liability the munici-

for insurance protection. Such requirements are usually

pality may incur as a result of the negligence of the FBO

described in contracts under headings of Insurance or De-

or other aviation service provider. Entities that contract

fense and Indemnity. Most such requests are reasonable,

with an aviation business for an aviation service may seek

by well-informed and sophisticated consumers who know

to be an additional insured under the aviation service pro-

exactly what they need. However, in some instances, con-

tract provisions are overly broad (seek to shift too much

erage they wish to share. We encourage policyholders to

risk) or are poorly crafted such that they are unattainable

seek legal counsel to review contracts for inappropriate

or unnecessarily place the named insured policyholder at

language (overly broad, ambiguous or contrary to law) and

risk. We have no way of knowing which situation we are

to make suggestions that will help them avoid unnecessary

dealing with unless we see the contract. Minimally, we

risks.

want to identify the parties and their respective interests. The insurance, defense and indemnity provisions will tell us about the nature and extent of the protection that is being sought. With this information, the underwriter can set the policy up correctly. Be wary of business arrangements that are not committed to writing. We often identify issues not contemplated by the parties when we encounter verbal agreements during claims handling. Ultimately, insureds must decide for themselves how much risk they are willing to accept and how much of their cov-

Michael holds a Commercial Pilot Certificate with an Instrument Rating and a Mechanic Certificate with Airframe and Powerplant Ratings. He received an Associate in Applied Science Degree in Aircraft Maintenance Technology, a Bachelor of Science Degree in Aviation Technology and a Certificate in Aviation Safety from USCâ&#x20AC;&#x2122;s Viterbi School of Engineering. Michael is currently an Assistant Vice President and Claims Manager for U.S Specialty Insurance Company (USSIC). He is a member of the International Society of Air Safety Investigators and holds the Associate in Claims designation from the Insurance Institute of America.

UNDERWRITER DIRECTORS REPORT

YOU CAN DO IT

WE CAN HELP GREG STERLING - AIG Aerospace In previous BINDER Articles I’ve outlined the ongoing need for our industry to embrace automation as a means of reducing transactional expenses for broker and underwriter alike as well as a way to create a better value proposition for our respective customers. While technology certainly holds great potential for improving the way we conduct our business, it will never replace the need for personal technical expertise and those all-important foundational business relationships. The upcoming 2018 AIA Conference provides professionals with an outstanding opportunity to hone their technical skills as well as a fantastic forum to renew current business relationships and establish new ones. So this month I’d like to share some thoughts on building our respective technical skills and relationships - with a little help from some friends: Bill, Earl, and Joe. Many of you may recognize the title of this month’s article as an advertising slogan of a popular home improvement store. Like many “weekend workshop warriors”

I visit one such store quite often. The particular store I frequent isn’t the closest one to my home. In fact there are at least 3 others which are closer. Their prices aren’t always the lowest and the store isn’t glitzy or chic. The reason I choose to go to this particular store is easy: Because I’ve always found the staff to be knowledgeable, friendly, and able to help me with whatever the project of the weekend is. Whether my need involves construction, electrical work, or even (gulp) plumbing, the staff in the respective sections always seem to know their stuff. I’ve been going to this same store now for eight years and have gotten to know many of the staff by name and specialty. Bill’s my hardware guy, Earl’s an electrical whiz, and Joe is my “Aquaman” – having forgotten more about plumbing than I’ll ever know (which is very, very little!) Together they provide me with the products and advice I need to get the job done. Perhaps most important of all, they do so with a smile on their faces, sometimes a joke (“You again? What’d you break now?”), and a consistent, “How can I help you today?”

attitude. We could do far worse than to emulate the examples which Bill, Earl and Joe set. The winning combination of the right products, solid technical expertise, and a “How can I help you?” attitude are the bedrock of succeeding in any business, but especially insurance. It’s been said that an insurance policy is “12 pieces of paper and a promise to pay.” Little wonder then that the prerequisite technical and relationship skills, as well as the business trust that naturally flows from their effective application have always played an important part in our business. No one understands this better than our brokers who recognize the important role that building and maintaining client relationships plays in their business success. A client engages a broker not simply for access to the insurance market but for advice and counsel on the options available to them. That’s why the broker’s knowledge of both the marketplace and its insurance products is so important.

Together they help them establish the credibility and trust which forms the basis of the customer relationship. Brokers also understand that clients can access the market via hundreds of brokers. That’s why those who have both strong client relationships and strong technical competence succeed while those who do not are quickly culled from the herd. I recall a real world example of the need for both technical expertise and relationship skills from my early days as an underwriter for a NY-based firm. While on a site visit with the owner of a large repair and services operation the client posed several technical coverage questions to the broker. The broker stumbled with answers and resorted to making a couple of nervous jokes. The client responded by saying to his broker buddy, “I know you can find your credit card is when its time to pick up the tab for dinner and that’s great, but once in a while I need you to find me answers!”

Of course the need for technical competence and a cando approach applies to underwriters as well. An underwriter who’s able to deliver competitive quotations quickly and address questions clearly helps the broker find the right product for his client. The underwriter who knows their policy forms and endorsement sets can quickly assist the broker in building the right insurance “product”. And clear underwriting intent and unambiguous policy wording helps our claims professionals to quickly and easily deliver on the “promise” made by those “12 pieces of paper”. There’s an old Irish saying that, “An Irishman can tell you to go to Hell in such a way that you’ll look forward to the trip!” While underwriters are often tasked with explaining to the broker what they cannot do in terms of limits or risk approval, the ability to do so without compromising the larger business relationship is key. Declinations and restrictions are part of our business and most brokers understand this. A clear explanation of the “why” behind a decision often tempters the difficult news of the “what”. And while once a field of few, aviation insurers are now a field of many. Brokers today have a wide variety of carriers to choose from. Therefore the manner in which we conduct our business is as important as the capital and risk financing options we’re able provide. Fortunately for those seeking to improve their technical acumen your AIA board and staff have done an outstanding job of assembling a world-class Continuing Education (CE) Program which will be presented at on Sunday at this year’s annual convention. Topics include preventing E&O’s, updates on UAV’s, an overview of space and satellite insurance, and many more - each pre-

sented by top industry experts in their fields. Combined with AIA’s ongoing Certified Aviation Insurance Professional (CAIP) curriculum Sunday’s CE program affords members the ability to sharpen their technical skills and industry knowledge in a fast-paced, enjoyable format. I hope each of you will review the content online and give strong consideration to attending. The conference also includes some amazing social and networking opportunities designed to help you build new business relationships and renew old ones. You can shoot sporting clays, play golf, or simply “bend an elbow” at the Welcome Reception with fellow professionals and industry colleagues. And the AIA Monday Night Closing Party has become a “can’t miss” tradition. This year’s event will take place at the famous “Austin City Limits” with great entertainment including performances from our very own AIA band, “Smooth Limits”. And as I’ve been known to croon a tune and drum out a beat there myself, your liberal consumption of “liquid music appreciation lessons” is not only encouraged but greatly appreciated! “You Can Do It – We Can Help”: Not just a catchy slogan but wise words to heed in the conduct of our daily duties in this great industry we’re all blessed to be a part of. By developing and maintaining our technical skills, by refining our industry network of fellow professionals, by supporting the organization that supports us, and by remembering that the “how” is at least as important as the “what” in our business we’ll be well on the way to living up to the examples set by Bill, Earl and Joe. I’ll probably see them before I (hopefully) see you,…,in Austin!

PRESIDENT PAUL HERBERS Cooling and Herbers pherbers@coolinglaw.com

VICE PRESIDENT JAMES GARDNER The James A. Gardner Company, Inc. Jim.Gardner@jagardner.com

TREASURER JON DOOLITTLE Sutton James, Inc. jdoolittle@suttonjames.com

SECRETARY ERNEST DE SPAIN W. Brown & Associates EDeSpain@wbais.com

DIRECTOR OF AGENT & BROKERS DIVISION LUKE UITHOVEN Kimmel Aviation Insurance Agency, Inc luke@kimmelinsurance.com

DIRECTOR, ATTORNEYS’ DIVISION NICOLE WOLFE STOUT, ESQ Strawinski & Stout, P.C. nws@strawlaw.com

DIRECTOR OF CLAIMS DIVISION STEVE TELLER Aviation LS steve.teller@aviationls.com

DIRECTOR OF INTERNATIONAL DIVISION BRUCE CARMAN bcarman7@googlemail.com

DIRECTOR, UNDERWRITERS’ DIVISION GREG STERLING

DIRECTOR-ELECT, AGENT & BROKERS DIVISION CHRISTOPHER ARNOLD,

AIG greg.sterling@aig.com

Sutton James, Inc. carnold@suttonjames.com

DIRECTOR OF REINSURANCE DIVISION IAN WRIGGLESWORTH Guy Carpenter & Company Ltd ian.wrigglesworth@guycarp.com

DIRECTOR-AT-LARGE CHRISTOPHER MORIN Murray, Morin & Herman cmorin@mmhlaw.com

DIRECTOR-AT-LARGE MATT ROWLEY Berkley Aviation, LLC mrowley@berkleyaviation.com

IMMEDIATE PAST-PRESIDENT DAVID SALES Ed Broking LLP david.sales@edbroking.com

AIA EXECUTIVE DIRECTOR MANDIE LOROFF Aviation Insurance Association mandie@aiaweb.org

AIA BOARD COUNSEL RAY MARIANI Murray, Morin & Herman raymarianilaw@gmail.com

SEE YOU IN

AUSTIN