L U 30 stUdy toUr - lloydsunder30s.coms U30s 2011... · Locke Lord LLP ... hosted by John Schmidt...

WEST COAST: 8 MAY – 21 MAY 2011

LLoyd’s Under 30s

stUdy toUr

STUDY TOUR | WEST COAST: 8 MAY – 21 MAY 2011 .3

contentS

Background ..................................................................................................4

LLoYd’S u30S PartIcIPantS ........................................................................5

BoeIng ..............................................................................................................6

SPace needLe SIte VISIt ..............................................................................8

SurPLuS LIneS drInkS recePtIon ...........................................................10

uSgS – unIted StateS geoLogIcaL SurVeY ........................................12

oPuS one WInerY ..........................................................................................18

LLoYd’S .............................................................................................................22

unIon Bank MeetIng ...................................................................................26

LIBertY MutuaL .............................................................................................29

aIr WorLdWIde ..............................................................................................31

arIa reSort and caSIno ............................................................................35

roBInS, kaPLan, MILLer & cIreSI ..............................................................37

Locke Lord LLP .............................................................................................51

rSuI ....................................................................................................................54

York LoSS adJuSterS .................................................................................56

tHe WaLt dISneY coMPanY .........................................................................65

tHank You .......................................................................................................69

STUDY TOUR | WEST COAST: 8 MAY – 21 MAY 2011.4

The Lloyd’s Non-Marine Under 30s Group was established over 32 years ago, and is an organisation that is open to all those under 30 years of age who are engaged in the Lloyd’s Non-Marine market.

The aims and objectives of the group are to provide a forum for topical comment and to encourage members to be aware of the many rapidly changing facets of the insurance industry as a whole, and in particular those that affect the Lloyd’s Non-Marine community.

The group has always believed that one of the most effective ways of enhancing this awareness amongst its membership is to hold bi-annual trips abroad to visit markets, new and old, that are important to the Lloyd’s Non-Marine community. These trips are of great value in strengthening contacts in these markets, and in promoting understanding within the Lloyd’s community itself.

Due to the importance of the North American Insurance Markets to London, and especially Lloyd’s, this year, the committee travelled to the West Coast for the Spring 2011 study tour, visiting Seattle, San Francisco, Las Vegas & Los Angeles.

The party was made up of 32 people from a wide section of the market, including underwriters and brokers of varying classes of Non-Marine insurance and reinsurance business, as well as representatives of Lloyd’s itself.

We wish to express our thanks and appreciation to the syndicates and broking houses, without whose support, this tour would not have been possible.

on behalf of all the Lloyd’s under 30s participants we would like to thank the many people in the uS who have spent a lot of time organising the meetings, visits and activities. It is very much appreciated and we hope that the following reports will show a snapshot of what we each took away on this memorable West coast tour.

Background


** Have since moved companies or contact details have changed, if you would like there contact details please email Angela Whybrow or Jonathan Powell.

LLoYd’S u30S PartIcIPantS

Name Company Email

Jonathan Powell Validus Talbot Group [email protected]

Angela Whybrow Equinox Underwriting [email protected]

Lucy Samuelson Black Tomato [email protected]

**Wil Cooper THB [email protected]

David Marsh Integro Group [email protected]

**Lauren Moseley AonBenfield [email protected]

Rebecca Thompson ACE European Group [email protected]

**Michael Williams Pembroke Managing Agency / Ironshore

[email protected]

David Lavery Lloyd's [email protected]

Colette Murphy Brit Insurance [email protected]

Krystina Wallis Lancashire Insurance Company [email protected]

Stuart Wilson Argo International [email protected]

**Simon Wilson Barbican Insurance Group [email protected]

Sarah Callow Canopius Managing Agents [email protected]

Nicola Golder BMS Group [email protected]

**Charlie London Hiscox [email protected]

Neil Robertson Kiln Group [email protected]

Laura Jayne Wraight Apollo Syndicate for Flagstone Re. [email protected]

**James Barrett Chaucer Syndicates [email protected]

Antoine Campbell Miller Insurance [email protected]

Laura Clarke Axco Insurance Information Services [email protected]

**Lauren Oliver Atrium Underwriters [email protected]

Rob Thomas Price Forbes and Partners [email protected]

Claire Gower Cooper Gay [email protected]

Andrew Howse Validus Talbot Group [email protected]

Charlie Outram THB [email protected]

Sadie Taylor W.R.Berkley Syndicate 1967 [email protected]

Jenny Tucker Aspen Insurance (UK) Ltd [email protected]

Laura Billinge Oxford Insurance Brokers Ltd [email protected]

Laura Gadd Price Forbes and Partners [email protected]

Tom Going Lonmar [email protected]

**Alex Hardy MSF Pritchard [email protected]


BoeIngMonday May 9, 2011Everett, Washington

In Seattle, we were fortunate enough to go on a tour of the Boeing 747, 787, and 777 production facilities as well as explore the ‘Future of Flight’ Museum. The 90 minute tour featured information about the building and facility itself as well as interesting facts about the different model aircraft.

FacILItYThe Boeing production facility holds the Guinness World Record for the largest building in the world by volume - 472 cubic feet, which is over 90 acres. You could fit over 14 football pitches or 9 baseball fields in the building as well as 2,100 average sized American homes. The factory is like a small city as it has its own fire department, security force, medical clinic, childcare facilities, restaurants and cafes (that serve over 17,000 meals per day), water treatment facility, and electrical substations. Over 30,000 employees work at the plant, 44% of which are women. Employees can utilize the 2 miles of underground tunnels and walkways or 1300 bicycles in the factory to get around. Parking spaces immediately outside the factory are reserved for employees who have given 25 years to the company. The oldest employee is an 84 year old woman.

The building has no air conditioning or heating and the building temperature stays warm in the winter from the heat of the 1 million light bulbs and the body heat of the thousands of employees in the building. In the summer they open the hanger doors (which are each the size of an American football field - 100 yards), and the breeze keeps the temperature regulated.

The Boeing production facility


aIrPLaneSAt the Everett facility, Boeing currently produces the 747 jumbo jets, the 777, and the brand new 787 Dreamliner. Parts for the aircraft are shipped in from Boeing’s 2500 suppliers around the world and the planes are assembled using a modern day assembly line approach. Once the Dreamliner has been approved by the FAA and delivery/mass production begins, they expect it will take 3 days from start to finish for the plane to be assembled. Currently it takes about 8 weeks to assemble the 747s and 777s and around 7 to 8 months for an order to be delivered. The costs of a new 787 is between $185M and $220M, the cost of a new 777 is between $230M and $270M, and the cost of a new 747 is between $315M and $320M. Boeing requires 1/3 of the payment at the placement of an order, 1/3 for the plane to be painted once assembled, and the final 1/3 is paid upon delivery. Delivery of the planes is made with about 6-8 hours of flight time some of which time is flown by the customer’s chief pilot. Upon the final test flight the customer can accept or reject the plane. Although the job may sound a bit risky, test pilots are paid about half of what regular pilots are paid because they are able to work 9pm-5pm and return home every evening.

787 dreaMLInerThe much delayed 787 is Boeing’s newest plane which is taking thousands of orders because of its efficiency. It is a mid-size plane with long-range capabilities, using 20% less fuel than other planes for similar journeys. The increased efficiency is due to more effective engines made by GE or Rolls Royce (customers get to choose), as well as the composition of the airplane. Whereas the 777 is made up of 12% composite materials with the majority being aluminium, the 787 is made up of 50% composite and 20% aluminium — giving it a much lighter body. The wings of the 787 were designed to be able to withstand 10 inches of up and down movement in the air, thus absorbing more turbulence and making a smoother ride for passengers. Additionally the new electric architecture allows the extracts 35% less power from the engines than comparable airplanes. The 747 uses just over 150 miles of wiring in its plane, while the 787 will only need 90 miles of wiring.

dreaMLIFterWe were also able to view one of Boeing’s 4 Dreamlifters which are converted 747s used to bring the fuselage of the 787 from Japan to Everett. This plane reduces the delivery time from 30 days to 1. It has a hinge off fuselage door that allows it to transport up to 803,000 lbs of cargo and amazingly it is still able to fly at 0.82 mach.

Boeing 787 Dreamliner Boeing Dreamlifter


SPace needLe SIte VISItMonday May 9th, 2011Seattle

IntroductIonAfter visiting the Boeing plant on the first day of the Lloyd’s Under 30 study tour, the group headed to the Seattle’s iconic Space Needle building where we were hosted by John Schmidt and Geoff Jolly who work for a local brokerage firm called Parker Smith Feek (PSF).

PSF is responsible for placing both the property cover and the stand alone terrorism cover for Space Needle. The members of the Lloyd’s Under 30 study tour were kindly given a guided tour by Ernie Blundell, General Manager of Space Needle Operations.

oVerVIeW oF tHe SPace needLeBuilt in 1962, the Space Needle served as the symbol of that year’s World’s Fair which at the time was heavily influenced by the Space Race between the United States and the Soviet Union. It has since become the symbol of Seattle, and one of the most recognisable structures in the world. The privately owned Space Needle is managed by Space Needle LLC and has been for 49 years.

The Space Needle was built to withstand wind speeds of 200 mph, double the requirements in the building code of 1962. An earthquake registering 6.8 on the Richter scale jolted the Space Needle enough in 2001 for water to slosh out of the toilets in the bathrooms. The Space Needle can escape serious structural damage during earthquakes of magnitudes below 9, was also made to withstand Category 5 hurricane-force winds, and will sway 1 inch per 10 mph of wind speed.

The earthquake stability of the Space Needle was ensured when a hole was dug 30 feet (9.1 m) deep and 120 feet (37 m) across, and 467 concrete trucks took one full day to fill it. The foundation weighs 5850 tonnes, including 250 tonnes of reinforcing steel. The Space Needle features an observation deck at 520 feet (160 m), and a gift shop with the rotating Sky City restaurant at 500 feet (150 m).

The Space Needle


InSurance IMPLIcatIonSThe schedule of values also includes two offices and two storage areas; not just the Space Needle alone, however, the needle does account for the bulk of the total insurable values.

The confidence in the structural engineering of this building and the benign catastrophe loss record has been a huge factor in the successful placement of its insurance over the years.

The property cover which is highly competitive, has been placed locally for more than 10 years, hence the programme is not seen in London at present other than the terrorism cover which is placed in London via Price Forbes, with Lloyd’s syndicates such as Hiscox, Liberty, MAP and Talbot participating.

The Space Needle


SurPLuS LIne aSSocIatIon drInkS recePtIonMonday May 9, 2011Seattle

Ed Buckovinsky (RT Specialty) and Bob Hope (Executive Director, Surplus Line Association of Washington), were kind enough to take the time to arrange networking drinks for our Under 30s tourists and a number of surplus lines brokers. We have taken the viewpoint of one tour member and would like to thank again all the people that took the time to meet with us in Seattle. Please note that therefore, this is only a snapshot of the people we met and what we learnt.

The first meeting of the 2011 Lloyd’s Under 30s Study Tour was with the Surplus Line Association of Washington in Seattle who hosted us for an informal drinks reception on Monday the 9th of May.

Formally launched on the 16th of April 1941, the SLA is a not-for-profit corporation whose purpose is to:

■ Promote a stable Non-Admitted insurance market in the State of Washington to offer viable options to the insurance buying public.

■ Encourage and facilitate compliance by its members, with the laws of the State of Washington and of the United States of America relative to surplus line insurance coverage, and with the laws, rules and regulations of the Office of the Insurance Commissioner of the State of Washington.

■ Provide means for the examination of surplus line policies placed by members on Washington risks in accordance with rules as established by the Association, and as may be amended from time to time, and provide assistance, as appropriate, to members in filing and compliance.

■ Supply educational support to the members of the Association including dissemination of information regarding laws, rules and regulations relevant to surplus lines insurance. Support insurance education relative to surplus lines insurance in the State of Washington through sponsorship of training classes and seminars, or grants of money or expertise to educational institutions.

■ Communicate with the Legislature and Office of the Insurance Commissioner in support of our members and the Non-Admitted Marketplace.


Bob Hope: Bob is the current Executive Director for the Surplus Line Association of Washington and had generously agreed to host the Under 30s for the evening’s drinks. He said a few words accordingly, outlining the basic function of the Surplus Line Association and its involvement with the Lloyd’s market over the years.

Jim Huckeba: Jim has been at Fairhaven since its inauguration in 1995, working on the commercial lines and homeowner’s side of the business. Jim alluded to what the perceived strengths were when it came to dealing with the Lloyd’s market. Good quality of service, quick response times and the width and breadth of business in which Lloyd’s can handle were some of the key considerations.

gary galeotti: Gary has more than 38 years’ experience working in the insurance industry as a president, agent, broker, and a surplus lines broker. He is currently the President for the Island Financial Insurance Associates which provides Surplus Lines Filings and consulting services for the creation, operation and administration of insurance programmes and Risk Purchasing Groups. Gary was keen to highlight the lasting relationship that has existed between Lloyd’s and the Association, given that some of the binders date back to the Second World War, whilst he also stated the importance of the current relationship, given that last year, Lloyd’s wrote – mainly through binding authorities - in and around a third of the insurance policies in the state.

connie divelbliss: Connie has been in the insurance industry since 1980. Her experiences have led her to work in some of the most challenging and demanding insurance environments, where she has excelled. Her involvement in the implementation of sales marketing programmes, both at prior agencies and at MIS, has proven to be instrumental in increasing the company’s revenue. Connie was one of the founders of MIS and has remained employed there since inception.

John r. adams, Jr: Owner and President of Seattle General Agency Inc. John began his career as an insurance professional with the Hartford Insurance Group and has experience in interfacing with underwriting, brokerage, company and managing general agents. His expertise is in marine, new product research and development, although as the current owner and President of the Seattle General Agency Inc, (a Washington Corporation since 1989), John has expertise with a broad range of coverage, especially those with commercial, recreational and marine connections.

eugene Horton: Principal of Eugene Horton, LLC, Eugene Horton, has had the advantage of extensive training and experience in the maritime industry going back to the military services in 1961, merchant marine experience and vessel sales. He has been in the marine insurance business since 1976, acting in the capacity of underwriter and broker, and uses his experience to better present customers to underwriters while maintaining excellent working relationships with underwriters. Eugene holds all insurance licenses: agent, broker, and surplus lines and, having handled accounts throughout the world, has access to all the major insurance underwriters (including the London and European markets,) claims representatives, surveyors and attorneys on a global basis.


uSgS – unIted StateS geoLogIcaL SurVeY Tuesday May 10, 2011Science information Services, OCAP, U.S.G.S 345, Middlefield road, Menlo Park, CA, 94025Hosts: Ross S. Stein, Geophysicist (specialising in earthquakes); Anne Wein, Geophysicist (specialising in flooding); Jonathan Stock, Geophysicist (specialising in landslides)

The USGS is a science organisation that provides impartial information on the health of the United States’ ecosystems and environment, the natural hazards that threaten the States, the natural resources the States rely on, the impacts of climate and land use change, and the core science systems that help them provide timely, relevant, and useable information.

By integrating their diverse scientific expertise, the 10,000 scientists, technicians, and support staff of the USGS are able to understand complex natural science phenomena and provide scientific products that lead to solutions.

eartHQuakeS and HoW tHeY WorkRoss Stein started by explaining the basics of the San Andreas Fault by using a model, known as the “brick and bungee” earthquake simulation machine, which illustrates the stress build up between two tectonic plates sliding past each other.

The apparatus consists of a heavy object that is dragged steadily with an elastic cord. Although pulled with a constant velocity, the heavy object repeatedly slides and then stops. This can be seen with the human eye as well as in more technical studies; a small vibration sensor, attached to a computer display, graphically monitoring the intermittent motion. This shows the level of stress build up and once this level overpowers the friction, it shows the sudden release, which is the resulting earthquake. During the simulated earthquakes, Ross marked off “rupture length” during each “earthquake” by seeing how far the brick slipped. Just like real life earthquakes we found that the lengths and time between “earthquakes” were not consistent.

This intermittent sliding motion mimics the intermittent fault slippage that characterises the earthquake fault zones. In tectonically active regions, such as California, the Earth’s outer brittle shell, which is about 50 km thick, is slowly deformed elastically along active faults. As the deformation increases, stress also increases, until fault slippage releases the stored elastic energy. This process of slow deformation followed by rapid release is called ‘Elastic Rebound’ and was first proposed by H. F. Reed following studies of the 1906 San Francisco earthquake.

The second model Ross showed was the ‘Stress redistribution model. When stress is sufficient, the first brick moves forward, increasing stress on the second brick. Eventually the second brick slips, reducing the backwards force on the first brick, and the first brick can slip again. Therefore when one area of stress is released via an earthquake this transfers the stress to other parts of the fault line.


Is there a chance of an earthquake happening today?

Ross explained that there’s a 100 percent chance of an earthquake today. Though millions of people may never experience an earthquake, especially in England, they are very common occurrences on this planet. So today, somewhere, an earthquake will occur. It may be so light that only sensitive instruments will perceive its motion; it may shake houses, rattle windows, and displace small objects; or it may be sufficiently strong to cause property damage, death, and injury. It is estimated that about 700 shocks each year have this capability when centred in a populated area.

Since a major portion of the world’s earthquakes each year are centred around the rim of the Pacific Ocean (Ring of Fire), this is the most probable location for today’s earthquake. Stating that an earthquake is going to occur today is not really “predicting earthquakes”. To date, they cannot be predicted. But anyone, on any day, could make this statement and it would be true.

Earthquake prediction is a future possibility, though. Just as the Weather Bureau now predicts hurricanes, tornadoes, and other severe storms, one day there may be forecasts on earthquakes and the USGS and Ross are looking into this.

couLd a tSunaMI SucH aS tHe one tHat aFFected tHe IndIan ocean on deceMBer, 26, 2004 HaPPen In tHe unIted StateS? What are tsunamis?

Tsunamis are ocean waves caused by large earthquakes and landslides that occur near or under the ocean. Scientists at the USGS do not use the term “tidal wave” because these waves are not caused by tides. As with many natural phenomena, tsunamis can range in size from micro-tsunamis detectable only by sensitive instruments on the ocean floor, to mega-tsunamis that can affect the coastlines of entire oceans.

Earthquake damage


the data we can use to answer whether it could happen on the uS West coast?

There are three primary sources of information we can use: (1) Tsunami catalogues of historic events, (2) the age of geological deposits left by great earthquakes and tsunamis, and (3) computer simulations of tsunamis from potential great earthquake and landslides around the world. Two types of measurements are used: run up observations from eyewitness accounts, and wave height readings from tide gauge stations, most often located in harbours. In scientific terms, run up refers to the vertical height a wave reaches above a reference sea level as it washes ashore. Wave height is the vertical measurement of the wave before it reaches shore. Inundation distance is the horizontal distance a tsunami reaches landward from the shoreline.

u.S. West coast

The historic record of tsunamis along the U.S. West Coast includes mainly teletsunamis, generated from large earthquakes around the Pacific Rim. Nevertheless, potentially tsunamigenic fault structures do exist locally offshore the U.S. West Coast, most notably from the Cascadia subduction zone. The Cascadia subduction zone is a 750 miles (1,200 km) long offshore fault that extends from northern California to southern Canada and accommodates motion between the Pacific and North American plates at a rate of about 40 mm/yr (1.6 inches/year). Of the teletsunamis that have struck the West Coast, the 1964 Gulf of Alaska tsunami caused the most extensive damage, particularly in Crescent City, California. Overall, approximately 28 tsunamis with run-up > 1 metre have occurred along the U.S. West Coast since 1812.

What would happen if the past California floods of 1861 & 1862 occurred today?

The 1861-62 series of storms were probably the largest and longest California storms on record. However, geological evidence suggests that earlier, prehistoric floods were probably even bigger. There is no scientific evidence to suggest that such extreme storms could not happen again. The USGS Multi Hazards Demonstration Project (MHDP)’s full scenario, called ARkStorm, addresses massive U.S. West Coast storms analogous to those that devastated California in 1861–62. Storms of this magnitude are projected to become more frequent and intense as a result of climate change.

This is ARkStorm from USGS Multi Hazards. The MHDP assembled experts to design the large, but scientifically plausible, hypothetical storm scenario that would provide emergency responders, resource managers, and the public with a realistic assessment of what is historically possible.


In the past, the flooding only affected North & South California, but climate change is a factor which means we should expect more severe rainfall. Anne Wein, USGS Geophysicist specialising in flooding, wants to show the devastation to encourage people to plan for an extensive flood before it happens. There would not only be property damage, but the loss of crops and livestock would take away food from the area and could be very expensive from a business point of view. Although lots of business would be affected due to disruption, we must remember that other sectors may gain (i.e. Insurers)

Further events would help Anne to demonstrate whether her workings and assumptions are correct. Obviously, amendments can be made to these assumptions if a ‘real event’ has different consequences, but the main findings are:

1. Megastorms are california’s other “big one.”

A severe California winter storm could realistically flood thousands of square miles of urban and agricultural land, result in thousands of landslides, disrupt lifelines throughout the state for days or weeks, and cost in the order of $725 billion. This figure is more than three times that estimated for the same earthquake scenario, which has roughly the same annual occurrence probability as an ARkStorm-like event. The $725 billion figure comprises approximately $400 billion in property damage and $325 billion in business-interruption losses. An event like the ARkStorm could require the evacuation of 1,500,000 people. Because the flood depths in some areas could realistically be on the order of 10-20 ft, without effective evacuation there could be substantial loss of life.

2. an arkStorm would be a statewide disaster.

Extensive flooding is deemed realistic in the California Central Valley, San Francisco Bayshore, San Diego, Los Angeles and Orange Counties, several coastal communities, and various riverine communities around the state. Both because of its large geographical size, and the state’s economic interdependencies, an ARkStorm would affect all California counties and all economic sectors.

3. an arkStorm could produce an economic catastrophe.

25% of buildings in the state could experience some degree of flooding in a single severe storm. Only perhaps 12% of California property is insured, so millions of building owners may have limited or no ability to pay for repairs. That degree of damage would threaten California with a long-term reduction in economic activity, and raise insurance rates statewide — perhaps nationwide or more — afterwards.

4. an arkStorm is plausible, perhaps inevitable.

Such storms have happened in California’s historic record (1861-62), but 1861-62 is not a freak event, not the last time the state will experience such a severe storm, and not the worst case. The geological record shows 6 megastorms more severe than 1861-1862 in California in the last 1800 years, and there is no reason to believe similar events won’t occur again.

5. the arkStorm is to some extent predictable.

Unlike for earthquakes, we have the capability to partially predict key aspects of the geophysical phenomena that would create damages in the days before an ARkStorm strikes. Enhancing the accuracy, lead time, and the particular measures that these systems can estimate is a great challenge scientifically and practically.


6. Californian flood protection is not designed for an ARkStorm-like event.

Much has been done to protect the state from future flooding, but the state’s flood-protection system is not perfect. The existing systems are designed among other things to protect major urban areas from fairly rare, extreme flooding. The level of protection varies: some places are protected from flooding that only occurs on average once every 75 years; others, on average every 200 years. But the levees are not intended to prevent all flooding, such as the 500-year streamflows, shown by the graph below, that are deemed realistic throughout much of the state in ARkStorm.

7. Planning for arkStorm would complement planning for earthquakes

The Shakeout exercise has become an annual activity in California, with more than 7 million people participating in an earthquake drill each year. Many of the same emergency preparations are useful for a severe winter storm: laying in emergency food and water, shelter preparations, exercising emergency corporate communications, testing mutual aid agreements, and so on.

A model of an atmospheric river channelling water vapour from a decaying typhoon over the western North Pacific to deposit copious rains over the central coast of California.


JonatHan Stock’S oVerVIeW on LandSLIde HaZardSJonathan Stock spoke on how landslides constitute a major geological hazard because they are widespread, occur in all 50 states and U.S. territories, and cause $1-2 billion in damages and more than 25 fatalities on average each year. Expansion of urban and recreational developments into hillside areas leads to more people that are threatened by landslides each year. Landslides commonly occur in connection with other major natural disasters such as earthquakes, volcanoes, wildfires, and floods.

Sticky forces allow soil to ‘sit’ on steep slopes on top of other soil particles. The soil is however, locked in by little friction. If enough rain falls, the soil floats and moves fast down the steep valleys it once sat on. This type of event is difficult to predict and landslides are not insured in the state of California.

Landslides are increased in an area where there is a removal of trees. California forest fires leave ground exposed and root strength starts to die away as well as the foliage, reducing the direct impact of the rain attrition on the soil surface. Landslides cannot be triggered in the same way a ski resort would initiate an avalanche in the snow, as water would be needed and landslides obviously have consequences of blocking roads.

The primary objective of the National Landslide Hazards Program (LHP) is to reduce long-term losses from landslide hazards, by improving our understanding of the causes of ground failure and suggesting mitigation strategies. The results of these efforts have led to significant improvements in understanding the nature and scope of ground-failure problems nationally and worldwide to save lives and dollars. It is difficult to predict the cost of landslides due to the fluctuating cost of highway repair and business interruption. Results show that the biggest losses from landslides come from business interruption as opposed to damaged buildings.

With the US being such a large source of risks to the London market and members of the Under 30s, this educational talk was extremely valuable to all of the tour party present.

The 2005 La Conchita Landslide Landslide damage


oPuS one WInerYWednesday 11th May 20117900 St. Helena Highway, P.O. Box 6, Oakville, CA 94562Tour Guide: Hank Jaspar

HIStorYOpus One Winery was founded in 1979 by Baron Philippe de Rothschild and Robert Mondavi. The Rothschilds is the best known European wine family with Philippe de Rothschild the best known of this great family. Philippe took on the management of Chateau Mouton Rothschild from his father Baron Henri at the age of 20. Philippe’s vision changed the world of wine with his invention of Chateau bottling, commissioning great artists to illustrate his wine labels and the creation of Opus One Winery with Robert Mondavi. Philippe’s daughter Baroness Philippine de Rothschild joined Opus One in 1984 bringing her own exquisite style and creativity to the design, construction and the operation of Opus One.

Robert Mondavi is an international icon among great New World wine pioneers, with a passion for excellence. Robert led a revival in Californian fine wine for over 6 decades. Among other accomplishments Robert introduced temperature-controlled fermentation, French oak barrel aging and high-density viticulture to a fledging American wine industry. Robert broadened the American cultural palate by marrying fine wine with food, music and the arts. Robert is one of only a few Americans to have received the French medal of Legion of Honour.

The name “Opus” a musical expression denoting the first masterwork of a composer is of Latin origin and was chosen by Robert and Philippe for the easy recognition in both English and French. The word “One”, was added to “Opus” 2 days later.

In 1979, the partners’ first vintage at the winery was made and in 1981 a single case of the joint venture wine sold for $24,000 at the first Napa Valley Wine Auction; the highest price ever paid for a Californian wine. The 1979 and 1980 vintages were unveiled in 1984 as Opus One’s first release. Opus One then became known as America’s first ultra-premium wine. Wine is priced at $50 and above per bottle.In 1988, after the death of Philippe in January at the age of 85, Opus One exported a share of its 1985 vintage and became the first ultra-premium California wine to be sold in France, UK, Germany and Switzerland. There was an international demand for the wine and in 1999, Opus One celebrated its 20th Anniversary.

The construction of the winery began in July 1989 and took 2 years to complete. The winery blends in with the quiet surrounding vineyards and rolling hills of the Napa Valley. Scott Johnson of Johnson, Fain & Pereira was the design architect. The architecture of the building is a through mix of classical European and contemporary Californian. The winery is defined by colonnades on either side of the central courtyard. Modern materials such as Californian redwood and stainless steel contrast against cream-coloured Texas limestone. The winery is spacious and light and has a formal but elegant feel, with a mix of contemporary and modern features.


Opus One Winery

Opus One Vineyards


WIne MakIng ProceSSOpus One aims to produce an extraordinary wine, with every cluster of grapes hand-harvested, and just as much care is taken when transporting them from the vineyards to the winery. There are 1,100 vines per acre, made up of 4 hedged vineyards spanning across 169 acres. The vines are planted in higher densities than is typical in California; the reason being that the vines produce smaller berries with a higher skin-to-juice ratio which produces more intense flavours and aromas. 20 tons of berries can produce between 2,000 and 3,000 gallons of wine.

During the harvesting months between September and October, 4 to 5 tonnes of grapes are picked hourly and up to 40 tons are picked per day. The quality of the grape is assured by placing the clusters in small picking boxes that hold no more than 16kgs. The quality process continues by placing the grapes on a vibrating table and any imperfect grapes are then discarded. The grapes are then moved into the destemmer where silicon rollers are used to crush the grapes ready for fermentation.

Opus One only makes one wine; meaning each tank can be dedicated to a single lot of grapes and each tank is used only once during harvest. This means fermentation and maceration can never be rushed. The maceration process draws out many rich flavours and colours from the skins, seeds and pulp of the grapes. The tanks in which the maceration takes place are temperature controlled and raised so the free run wine can flow into the new French oak barrels. The skins, seeds and pulp are also pressed to provide the backbone to the wine and a portion of the pressed pulp is often added to the final blend.

Once the wine is safely in the barrel, the topping, racking and fining process begins. During the first year the wine is continually tested for taste from each French oak barrel. This is done to evaluate the effect the wood is having on the wine. The fining process involves egg whites being carefully added to more turbid vintages which attract the small particles that would otherwise remain in suspension. This clarifies and polishes the wine and begins after the final racking is completed.

The wine is then left to mature in French oaked barrels. 1,000 barrels are arranged side by side in the Grand Chai which is the cool semi-circular cellar where the wine is matured and aged for a year and half before it is then bottled. Once bottled, the wine has a further year and a half of bottle age before Opus One releases the wine, 3 years after harvest.

Opus One French oaked barrels


oPuS one WIneOpus One’s ultimate goal, is to create a wine of ultimate quality that reflects the traditions and the innovations of both Philippe and Robert; French in style but Californian in execution. Opus One is produced with uncompromised attention to detail from the way in which the vineyard is planted and maintained, to the quality of the cork that seals the bottle. Opus One is most often a blend of five grape varieties; Cabernet Sauvignon 79%, Cabernet Franc 6%, Merlot 8%, Malbec 1% and Petit Verdot 6%. There are a variety of aromas that can be enjoyed from Opus One wines including: nutmeg, cassis, raspberries and dark chocolate. Opus One recommends that the optimal temperature its wine should be served at is 17c.

oPuS InSuranceOpus One buys Cargo Insurance through London, this includes All Risks for inland transit, marine transit and stock in Europe. Only the wine is insured and not the grapes.

Opus One Wine


LLoYd’S2011Sheraton Hotel – San FranciscoAntony Joseph

keY dateS In LLoYd’S HIStorY

1688 First known reference

1688 Marine Hull and Cargo underwritten for the first time

1691 Coffee House moves to Lombard Street

1713 Edward Lloyd dies

1769 First group of professional underwriters

1774 Subscribers rent rooms

1811 Lloyd’s Constitution created

1871 Incorporated by a private act of parliament

1887 First Non Marine classes written by Cuthbert Heath

1906 San Francisco earthquake, Cuthbert Heath ordered all claims to be paid regardless of cover

1907 Cuthbert Heath devises excess of loss reinsurance

1908 Annual Audits and Premium trust funds begin

1911 Aviation insurance started

1925 Central Fund established

1939 Lloyd’s American trust fund established for all USD premiums

1958 Lloyd’s moves to new Lime Street

1960 First satellite policy

1982 Lloyd’s bill receives royal assent

1996 Equitas set up for years 1992 and prior

2001 Lloyd’s incurs largest loss of any insurer from World Trade Centre attacks

2001 Regulation of Lloyd’s passed to FSA

2002 New franchise board set up to manage market operations

2002 Franchise board is appointed

2003 Franchise Director appointed

2005 Annual accounting implemented

2007 Equitas bought by Berkshire Hathaway

keY StaFF

Lord Levene Chairman

richard Ward CEO

Luke Savage Director

tom Bolt Director

Sean Mcgovern Director

Jose riberio Director

Sue Langley Director


Lloyd’s operates in 200 countries and has licenses to issue direct and reinsurance policies in 79 of those countries. The largest producer of business is the USA and Canada with 43% of the annual premium written in 2010; 20% comes from the UK, with 16% from Europe, 10% from Central Asia and the Asian Pacific and 11% from the rest of the world. The developing Asian branch of Lloyd’s has 22 syndicates writing about USD 340m annually.

The Lloyd’s market participates in the majority of the world’s largest companies:

■ 97% of Dow Jones industrial average

■ 94% of FTSE 100

■ 90% of the Top 50 European Companies

■ 84% of Fortune 500 US Companies

Lloyd’s is a mutualised market where members join together to form syndicates that insure risks. Much of Lloyd’s business is written on a subscription basis, with more than one syndicate taking a share of the same risk.

Currently Lloyd’s has 178 accredited brokers, 55 managing agents running 85 syndicates writing USD 35,000,000,000 of premium in 2010.

LLoYd’S – uS PreMIuM BreakdoWnIn 2010, the USA produced 37% of Lloyd’s global premiums. It is also responsible for 14% of global facultative RI and 46% of the global treaty (proportional and non proportional) reinsurance accounts.

In 2009, Lloyd’s maintained second position in the excess & surplus (E&S) lines segment by writing almost 20% of the $33bn worth of E&S market premium.

2010 Lloyd’s Premium split by Class of Business.


tHe roLe oF LLoYd’S aMerIcaThe main role of Anthony Joseph and the people at Lloyd’s America is to facilitate access to Lloyd’s by educating the US market about ways to access Lloyd’s and highlight the benefits of using it as an insurance market. In addition, Lloyd’s America works with managing agents and London brokers to develop and maintain productive relationships that are mutually beneficial.

Lloyd’s America works with the following key groups:

■ Risk and Insurance Management Society

■ The Council of Insurance Agents and Brokers

■ NAPLSO

■ Property Casualty Insurers Association of America

■ AAMGA

■ Intermediaries & Reinsurance Underwriters Association

■ Association of Lloyd’s Brokers

Lloyd’s America provides each of these groups with market intelligence and data to support their business development efforts and to ensure a positive profile of Lloyd’s within the US insurance community.

It is also responsible for Lloyd’s relationship with insurance regulators and state/federal regulators, as well as continuously driving operational efficiencies to ensure the reduction in cost of operating admitted licenses in Kentucky and Illinois.

cHaLLengeS oF LLoYd’S aMerIcaA large amount of time is spent trying to dispel rumours about Lloyd’s being a complicated and remote market. It also trys to ensure that the Lloyd’s market, as opposed to the alternative US platforms of Lloyd’s underwriters, is still perceived as the best way to place business in Lloyd’s as it offers a number of benefits. Lloyd’s America also advises potential and existing clients that the improvements made in the technologies used by Lloyd’s will be of great benefit and only go towards improving the overall service that they receive.

PerForMance ManageMentThe Lloyd’s Performance Management Directorate (PMD) is required by the Lloyd’s Franchise Board to oversee the performance of the market against agreed business plans and the franchise standards relating to the management of claims and underwriting.


The main objectives include the following:

■ Ensuring that managing agents meet Lloyd’s underwriting standards

■ Reviewing and approving syndicates’ business plans

■ Monitoring the performance of syndicate business plans

■ Assisting with the review of Individual Capital Assessments (ICA’s)

■ Engaging with the market in a fair and consistent manner while effectively managing the risks posed by the range of businesses competing within a diverse market

■ Facilitating maximum performance of the syndicates while protecting the interests of the Lloyd’s market.

Careful management of catastrophe risk is a business imperative at Lloyd’s and as such, the Corporation of Lloyd’s devised a set of Realistic Disaster Scenarios (RDS), to stress test both individual syndicates and the market as a whole to see how they stand up to chains of accumulated exposure in very extreme cases – contemplating over USD 100bn of insurance industry losses.

ratIngSThe three largest rating agencies, recognise Lloyd’s strength, robust capitalisation and the financial strength of the market.

Agency Rating Date

Fitch Ratings A+ July 2010

Standard and Poor’s A+ September 2010

A.M. Best A July 2010


unIon Bank MeetIng Head of Risk Management - John M Bell

10,000 employeesWholly owned subsidiaryFounded in 1864Mainly CA, OR, WA with some branches in TX

Union Bank, N.A., a commercial bank, provides financial services to businesses and individuals. It offers checking accounts, savings accounts, individual retirement accounts, and certificates of deposit. The company also provides private banking, business financing, home equity, mortgage, vehicle loans, and credit cards. In addition, it offers investment and financial management, trust, insurance, global custody, trust and estate plan administration, and deposit and cash management services. Further, the company provides online banking and telephone banking services. It serves consumer, small businesses, middle market, real estate, corporate, correspondent, and trade finance, as well as communications, media, entertainment, energy, public utility, retailing, and other specialty industries. The company was founded in 1864 as The Bank of California, N.A. and changed its name to Union Bank of California, N.A. in 1996. The company is headquartered in San Francisco, California with additional offices in Oregon and Washington. Union Bank, N.A operates as a subsidiary of UnionBanCal Corporation.

SPecIaLtIeSFull-service commercial bank, investment and financial management, trust services, private banking, insurance services, and global custody services.

caLIFornIa’S econoMY & tHe IMPact oF JaPan’S dISaSter

Speaker: Kei Matsuda

■ 3rd largest state in US (area) – 4th of US

■ California makes up 12% of the US population; or 1 in 8 Americans in the USA.

■ 37m people (2009) – 12% of US

■ $1.9 trillion – economy output ’10 (GDP) – 13% of US/85% of UK

■ If its own country – CA would be World’s 9th largest economy

■ 3rd major regional economy

1 – San Francisco/San Jose Electronics, software, finance, tourism 2 – LA/San Diego Manufacturing, film & TV, tourism, international trade 3 – Fresno/Bakersfield Agriculture, distribution, manufacturing, mining

According to Union Bank, California is currently lagging in recovery from the economic crash. The national average unemployment rate currently stands at 8.8%; 12% of that being in California and 13% in Nevada. Recovery, if any, is slow and there are a high number of Government sector jobs being lost, however, employment is slowly rising in the education and professional sectors.


In terms of trade, California is the 2nd largest exporting state after Texas, followed by NY, FL, WA, IL and MI trading predominantly with Mexico and Canada. In terms of tourism, most visitors to CA are from the UK then Japan, Australia and then Germany.

eFFectS oF tHe recent JaPaneSe eartHQuake

Union Bank went on to speak about the effect the Japanese earthquake had on both the Japanese and subsequently, California’s economy.

When comparing the recent earthquake to previous world disasters, the extent of the damage is put into perspective.

Kobe Earthquake USD 12BN9/11 USD 40BNKatrina USD 90-150BNTohoku Earthquake USD 195-300BN, 14,700 deaths, approx. 250 housing units

6.4% of Japan’s GDP came from Tohuku and 4% of the Japanese GDP was wiped out after the earthquake. The Japanese earthquake interrupted economic activities worldwide, for example:

■ Parts and material shortages for global production

■ Production capacity reduced or in some cases lost entirely

■ Permanent relocation of jobs

What effect does this have on california?

Despite the extent of physical damage and business interruption for Japan, the net impact on the global economy was limited.

Long-term, the diminishing output for Japan could mean greater opportunity for increasing business elsewhere in the world (California included), with a potential rise in imports and reduced surplus laws and regulations.

PerSPectIVeS FroM PrIVacY PractItIonerS In FInancIaL SerVIceS

Speaker: Janet F Chapman (SVP, Chief Privacy Officers)

Subjects covered included:

■ Financial services subject to state, federal & global privacy/data security laws and regulations

■ Dealing with a host of regulators - .OCC, FRB, SEC, FDIC, state AGs, DPAs

■ Exams and audits are frequent and increasingly granular

■ Regulators are starting to look for tighter controls and proof of adherence

■ Union Bank subject to “large bank rule”


BaSeL II caPItaL accord

Speaker: Jennifer O’Reily

“Basel” named after a city in Switzerland.Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. The purpose of Basel II, which was initially published in June 2004, is to create an international standard that banking regulators can use, when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face.

Basel II is split into three pillars;

Pillar 1 Capital RequirementPillar 2 Capital AdequacyPillar 3 Market discipline own internal modelling/stats based approach to regulation

■ Each country must implement its own laws for Basel, based on requirements provided

■ In US only, banks with $250bil credit or $10m international have to comply with Basel II regulation

■ Union Bank does not have to comply but chooses to ‘opt in’

■ US is behind the rest of world

■ Basel II – 2004

■ US Regulations – 2007

■ Barclays (UK) compliant - 2008

■ Basel III – 2010

■ Liquidity coverage ratios

■ Setting a floor for reserves and can be used to lower capital requirement

■ Same structure for Solvency II

InSurance PurcHaSed BY unIon Bank

■ Tokio Marine – liability

■ Lex London – property

■ Lloyd’s – property

■ AIG – property

■ Bermuda – property

■ 10m SIR. 5% d/d

■ Purchase up to 100M of FI limit

LoSSeS

$26m + $22m Ponzi scheme$2m Property Copper stripped from buildings$lots Workers comp


LIBertY MutuaLThursday 12th May 2011353 Sacramento Street, San Francisco, CA, 94111

Liberty opened its office to us in San Francisco and we were able to take the 30 Lloyd’s Under 30 representatives into the Liberty home, where ‘the Liberty way’ was discussed in detail - giving us a greater knowledge of how it works;

Liberty Mutual Group, more commonly known by the name of its primary line of business Liberty Mutual, is a diversified global insurer and the fifth largest property and casualty insurer in the United States based on 2009 direct written premium. It was the 71st company on the Fortune 500 list for 2010. Based in Boston, Massachusetts, at present, it employs over 45,000 people in more than 900 locations throughout the world.

The company, founded in 1912, offers a wide range of insurance products and services, including personal automobile, homeowners, workers compensation, commercial multiple peril, commercial automobile, general liability, global specialty, group disability and fire and surety. The Liberty Mutual Creed was written by Bennett Moore, who started drafting it in 1937. Moore was Director of Advertising and Public Relations and a Vice President. The Creed was approved and painted on the wall of the 175 Berkeley Street lobby in 1944 and first published in the 1943 Annual Report. It was painted in the main lobby in Boston in 1962 to celebrate the company’s 50th anniversary. The current Chairman and CEO is Edmund F Kelly.

current FInancIaL StrengtH ratIngS: ■ Excellent (A) from the A.M. Best Company

■ Good (A2) from Moody’s Investors Service

■ Strong (A-) from Standard & Poor’s

BuSIneSS unItSPersonal Markets – auto, home, liability, life (400 US Offices)

Commercial Markets – P&C Group Benefits Commercial Insurance Coverage, through independent agents, brokers, & benefits consultants.

Commercial Markets P&C provides commercial lines products to mid-sized and large businesses (with an annual cost of risk of $150,000 or more). Group Benefits provides mid-sized and large businesses with short- and long-term disability insurance products, administrative services and group life insurance through

The Creed


Liberty Life Assurance Company of Boston. Summit provides workers’ compensation in the Southeast (mainly Florida) primarily to small businesses. The Company is also a servicing carrier for state based workers’ compensation involuntary market pools.

Liberty Mutual has made several large acquisitions over the past several years, including the most recent acquisition of Safeco Corporation in 2008. Currently, Liberty International owns, wholly or in part, local insurance companies in Argentina, Brazil, Chile, China (including Hong Kong), Colombia, India, Poland, Portugal, Singapore, Spain, Thailand, Turkey, Venezuela, Vietnam and Lloyd’s of London.


aIr WorLdWIdeThursday 12th May 2011

aBout aIrAIR produced its first catastrophe modelling software in 1987 and today models the risk from natural catastrophes and terrorism in more than 50 countries. It introduced a new approach to aggregate and portfolio management, with the first fully probabilistic catastrophe model, capable of providing credible, scientifically-based loss estimates for thousands of potential scenarios representing the probability distribution of losses—including losses for the most extreme events and extreme years that may not have occurred historically.

Air has more than 400 insurance, reinsurance, financial, corporate, and government clients across the globe using the software for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, agricultural risk management, and property replacement-cost valuation. It is headquartered in Boston with additional offices in North America, Europe, and Asia.

reSearcH and deVeLoPMentAIR’s mission is to help its client “mitigate the impact of catastrophes and develop risk management strategies that promote financial stability, maximize growth, and improve overall results.” The AIR scientists endeavour to keep up to date on scientific literature, evaluate the latest research findings, and conduct original research of their own. As a result, the models produced incorporate the most current scientific knowledge in climate science, meteorology, hydrology, seismology, and wind and earthquake engineering.

AIR is also committed to eliminating the perception that catastrophe models are “black boxes”, to that end it produces several papers on its models that include explicit scientific formulae, detailed descriptions of analytical techniques and validation, and references for source documents.

aIr cataStroPHe ModeLSThe table below shows the range of modelling capabilities available within the AIR software:


PuBLIcatIonSAlongside their catastrophe modelling capabilities AIR regularly release a variety of articles, write papers, case studies and presentations aimed to keep their clients up to date with developments within AIR and the wider scientific community. Recent releases within the AIR Currents monthly publication include:

■ Remodelling Services: A Boon to Cat Bond Issuers and Investors Alike

■ The 1976 Friuli, Italy, Earthquake

In addition AIR provides weekly email updates on recent events and publications via CATWeek and event updates and information through NewsALERT.

U.S HURRiCAne model - VeRSion 12.0Since 1987 when AIR created the first U.S. Hurricane model, there have been various updates to the model taking into account the latest scientific research.


The overall change to the model from 2009-2010 is not that great due to the understanding of hurricanes not really changing. The important thing to acknowledge is that there is an inland risk. It has been observed that about 5%-10% of all storms go through inland reintensification at some point, and 2%-5% do so over the US.

As can be seen from the diagram below, new states have been added (being Illinois, Indiana & Missouri);

■ The Version 12.0 model enables significantly more precise risk differentiation based on;

- Geography

- Construction

- Occupancy

- Year built

- Individual building characteristics

■ Version 12.0 features an updated Basinwide Catalog for all North Atlantic Tropical Cyclone Models.

■ The updated model makes use of high-resolution radar imagery for estimation of Rmax.

■ LULC (Land Use Land Cover) database contains the most recent satellite derived information which is essential for estimating the roughness and turbulence generated by land and water sur faces. Updated land use data from the USGS has been used to update local wind adjustments at a finer resolution and provide more detail in urban areas.

■ Directional Dependence of Surface Friction is explicitly modelled. In many areas, surface friction is highly dependent on the direction from which the winds emanate.

■ AIR employs a component-based approach that determines the overall damageability of various kinds of industrial facilities based on the damageability of assets that comprise the facility.


AIR also undertook a study to understand the building codes and standards that exist. For each location and year-built, model buildings were defined in terms of secondary risk features such as roof covering type.

Because building age can play a key role in loss, AIR have carried out a detailed assessment of building code changes which allows for comparative tools for each state.

As a final test, AIR validated the existing approach with new claims data. Validation is performed not only at the company level, but by geographic region, by event, by line of business, and by coverage.


arIa reSort and caSInoFriday 13th May 2011Las Vegas

Speaker- Peter Magllone and othersA tour around the background of a Las Vegas casino and the security and safety measures in place.

FIre SaFetYFire safety is a major concern in the casino due to the number of people occupying the building at any one time, coupled with the amount of machinery running at any one time. The fire safety system is controlled from one room. There are 15 fire pumps on site and a disconnect button which can cut all of the power at any time.

There is a smoke control system which is very sophisticated and the first of its kind to be signed off. It features touch screen demand controls which can zoom into areas and guide individuals out of the casino in the event of a fire. Response time in such an event would be less than 1 minute. There are 54,000 machines that monitor for fires and a team of 11 people who work 40hrs per week inspecting fire maintenance equipment.

There have been a couple of small fires in the casino (i.e. smoke in rubbish bins). Luckily for ARIA, there has been nothing of a significant size.

SurVeILLance

The surveillance team works together to combat fraudulent cheating, but also protects all members of the public working and socialising in the casino. The CCTV technology used by the casino was founded by a UK company. Most employees who are working in the fraudulent cheating surveillance team have experience in gaming and must know how the games are played. This is because the head of surveillance team wanted to ensure that all members of his team had an interest and expertise in the gaming arena. These employees are not allowed to gamble in the casino.

Aria Resort and Casino


Due to the casino’s close focus on the gaming tables, approximately 120 people were asked to leave last year. The reason for this was suspected cheating. Three separate checks for identity matches are made by the surveillance team to ensure that the correct person is asked to leave the building.

The surveillance team has uncovered many different types and techniques of cheating. More recently, cheats have been operating in groups and the casino is currently dealing with cheats who are becoming more and more sophisticated. As technology advances, so do the criminals.

The casino is very protective of its image and as such, all guest complaints go to security where 16 people are behind the scenes at all times observing behaviour. Up until now, the human eye has been the best form of facial recognition.

The security team keep a ‘wall of shame’ in their security room which shows all thieves, cheats, and troublemakers who have entered the resort in the past. This makes it easier for the team to spot repeat offenders quickly and take the appropriate action.

It is well known that people often lose their sense of reality in Vegas. The security teams are aware of this and so take it upon themselves to protect vulnerable people.The casino’s largest problem is intoxication. Drinks are free when gambling at the tables.

The security team, does have the power of arrest, but they do not advertise this!

If cash is taken at the tables, this has to be accompanied by security and the operation is always recorded on camera. All video footage is kept for 7 days or forever if it captures an incident.

The casino has very little in the way of either terrorist threat or employee fraud.

The security cost is very expensive for the casino. This is because all the equipment is digital with instant feedback, ARIA uses some of the most advanced technology available.

SecurItYThe security team, is assigned to protect all the people who work and socialise within the casino. It is their primary focus to make this environment a safe place to be in. Plain-clothed security personnel are in attendance throughout the casino. It is these security personnel who work with a total of 3,000 cameras to spot unreasonable behavior. 1,000 of the cameras mentioned are used only for the surveillance of the tables. Aria Resort and Casino Security


roBInS, kaPLan, MILLer & cIreSITuesday 17th May 2011Las Vegas

Robins, Kaplan, Miller & Ciresi L.L.P. (RKMC) is one of the US’ premier trial firms. With over 250 attorneys in Minneapolis, New York, Los Angeles, Atlanta, Boston and Naples, it represents some of the world’s largest companies, start-ups, and individuals from virtually every industry. For over 75 years, RKMC has helped shape the course of legal history while protecting its clients’ rights. It is RKMC’s belief that everyone should have equal access to the civil justice system, regardless of their personal or economic situation.

RKMC hosted the Lloyd’s Under 30s on Tuesday, 17th May 2011 in order to discuss dispute resolutions and perform a ‘mock earthquake arbitration’. Our day consisted of an initial background presentation on dispute resolution and the science behind California earthquakes, and this was followed by a mock arbitration. The presentations are summarised below:

dISPute reSoLutIonRKMC discussed a number of types of dispute resolutions, and their potential advantages and disadvantages:

Mediation

Mediation is a voluntary and confidential form of dispute resolution. It involves an independent, impartial person helping two or more individuals or groups, to reach a solution that’s acceptable. The mediator can talk to both sides separately or together. Mediators do not make judgements or determine outcomes - they ask questions that help to uncover underlying problems, assist the parties to understand the issues and help them to clarify the options for resolving their difference or dispute.

Advantages:

■ Mediation is much less costly than civil litigation

■ Mediation is a much faster process than civil litigation

■ In mediation, the parties are full participants and can express their own opinions and concerns, whereas in civil litigation, the parties’ attorneys are the only ones who represent their party unless the party “takes the stand” and is subject to cross-examination by the opposing attorney

■ Mediation is a private process and not subject to public knowledge and possible media attention as can be the case with civil litigation

Disadvantages:

■ Either party can withdraw from the proceedings at any time

■ Lack of definitive result – the parties can attend mediation and not come away with a settlement


arbitration

Arbitration is a technique for the resolution of disputes, where the parties refer to one or more persons by whose decision they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides. Arbitration can be either voluntary or mandatory. Non-binding arbitration is, on the surface, similar to mediation. However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground on which to compromise, the (non-binding) arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable.

Advantages:

■ Arbitration is much less costly than civil litigation

■ Arbitration is a much faster process than civil litigation

■ When the subject matter of the dispute is highly technical, arbitrators with an appropriate degree of expertise can be appointed

■ In most legal systems there are very limited avenues for appeal of an arbitral award

Disadvantages:

■ Arbitration may become highly complex

■ Arbitration may be subject to pressures from powerful law firms representing the stronger and wealthier party

■ If the arbitration is mandatory and binding, the parties waive their rights to access the courts and to have a judge or jury decide the case

■ Although usually thought to be speedier, when there are multiple arbitrators on the panel, juggling their schedules for hearing dates in long cases can lead to delays

trial

A trial is when parties to a dispute come together to present information (in the form of evidence), to a tribunal - a formal setting with the authority to adjudicate claims or disputes. One form of tribunal is a court. In many cases, the decision makers to a dispute are a jury – where (typically) 12 members of the public from surrounding counties to the court are brought in to listen to a dispute, evaluate the evidence presented, decide on the facts, and make a decision in accordance with the rules of law and their jury instructions.

Advantages:

■ Provides certainty of decision making

■ Majority verdicts allow justice when there is a “rogue” juror

■ Local knowledge and local standards are important factors in the resolution of disputes


Disadvantages:

■ Litigation can be very costly and time consuming

■ Stronger personalities can overrule more timid jurors

■ Pre-trial publicity can bias jury

■ Little control over the make-up of the jury panel

■ The jury panel may have little to no knowledge of the subject matter or law surrounding the dispute

eartHQuakeS In caLIFornIaEarthquakes in California are common occurrences as the state is located on the San Andreas Fault, which cuts across California and forms the tectonic boundary between the Pacific and the North American Plate. The last significant earthquake on the Southern California stretch of the San Andreas Fault was in 1857, and there has not been a rupture of the fault along its southern end from San Bernardino to the Salton Sea since 1690. It is still storing energy for some future earthquake, but we don’t need to wait for a “big one” to experience earthquakes. Southern California has thousands of smaller earthquakes every year. A few may cause damage, but most are not even felt. And most of these are not on the major faults. The earthquake map below, shows that earthquakes can occur almost everywhere in the region, on more than 300 additional faults that can cause damaging earthquakes, and countless other small faults:

This is mostly due to the “big bend” of the San Andreas Fault, from the southern end of the San Joaquin Valley to the eastern end of the San Bernardino Mountains (shown in diagram right). Where the fault bends, the Pacific and North American plates push into each other, compressing the earth’s crust into the mountains of Southern California and creating hundreds of additional faults. These faults produce thousands of small earthquakes each year, and the other half of our significant earthquakes. Examples include the 1994 Northridge and 1987 Whittier Narrow’s earthquakes.

Earthquake locations


The San Andreas Fault is a continental transform fault that runs a length of roughly 810 miles (1,300 km) through California. The San Andreas Fault can be divided into three segments; the southern segment, the northern segment and the central segment:

According to current research, there is a 99% chance of a 7.6 magnitude + earthquake in the next 30 years. There is a 70% chance that this could occur in the southern CA region of the fault line. Additionally, there is a 50% chance of a magnitude 9 earthquake which, as Tohoku has shown, will cause an extensive loss to the insurance market.

The first strong recorded earthquake occurred in the Los Angeles region in 1769, with four violent shocks about 30 miles southeast of Los Angeles.

Seven hundred people died on April 18, 1906, in one of the greatest earthquakes ever to hit California. Damage was extensive in San Francisco and was increased perhaps tenfold by raging fires. Total damage was estimated at over $500 million ($200bn in today’s value).

The most recent significant quake in California occurred in Northridge on January 17, 1994. This quake displaced more than 20,000 people from their homes in a modern urban environment generally designed for seismic resistance. There were 57 deaths and economic losses were estimated at $20 billion.

Despite this significant exposure to earthquake in the state of California, only 17% of the 24 million homeowners in the state purchase earthquake cover with their insurance policy.

The San Andreas Fault


Mock eartHQuake arBItratIon:Once the initial presentations were finished we began the mock earthquake arbitration. We were provided with some material about the facts of the case which are summarised below.

Background:

On June 15th 2009, a catastrophic 6.7 magnitude earthquake affected over 2,000 square miles of the greater Los Angeles area. The earthquake occurred during the height of the tourist season; fortunately it was early morning before most tourist attractions were open. Although a number of bridges and multistorey buildings collapsed, casualties were relatively low. 14,000 aftershocks were reported affecting the surrounding area. In addition to inland damage, the earthquake caused a tsunami which radiated westwards from Southern California and affected islands off the coast of California, including Santa Catalina Island.

The Insured California Hotel Partners (CHiPs) is owned by members of the Sheen family. It operates many hotels in Southern California and has placed its insurance within the London market for a number of years.

One of its hotels is the Disneyland Hotel in Anaheim, California. This hotel has 2,000 guest rooms, five separate themed restaurants, and three bars. It is one of many hotels located near, but not within the Disneyland resort. The hotel has been in operation since 1985 and has not undergone extensive remodelling for several years. It is not considered a luxury or high end hotel.

CHiPs also owns a hotel located on Santa Catalina Bay, an island off the coast of Southern California. The Santa Catalina Hotel was originally constructed in 1993, has 100 rooms, and has not been updated or remodelled. It is primarily used in the summer months.

Both of CHiPs’ hotels sustained damage after the June 15th 2009 earthquake and it submitted a claim for the following damages to certain underwriters at Lloyd’s:

Physical damage to Disneyland Hotel USD 2,500,000 Business interruption loss at the Disneyland Hotel USD 10,000,000 Contingent business interruption loss at the Disneyland Hotel caused by the closure of Disneyland. USD 25,000,000 Property damage at the Santa Catalina Island Hotel USD 1,200,000 Business interruption at the Santa Catalina Island Hotel USD 800,000 Total claim amount: USD 39,500,000

The policy clearly states that coverage includes cover for all risk of physical loss or damage, including business interruption, and contingency business interruption, however, the contract terms are under dispute by both parties.

In respect of the Disneyland Hotel, underwriters have paid the property damage claim submitted in full and this is not an area of official dispute, despite the fact that underwriters feel repairs were carried out without sufficient notice to allow underwriters to have a representative on site to monitor the repairs.


Therefore, the key area of dispute is for business interruption (BI), as after the application of the 30 day deductible, CHiPs feels it is entitled to 90 days’ coverage for its BI loss at the Disneyland Hotel which equates to $10,000,000, while underwriters claim it is only entitled to 30 days’ coverage which actually only equates to $1,542,250.

In respect of contingent business interruption (CBI), underwriters denied coverage for a significant proportion of the loss, as they contend that the $5,000,000 sublimit applies for unnamed locations rather than the $15,000,000 sublimit for named properties that CHiPs argues should be applied.

In respect of the property damage claim at the Santa Catalina Hotel, underwriters have excluded coverage under the policy, as investigations carried out by underwriters proved that the water covering the entire first floor of the hotel was from the “overflow of a body of water”, namely the Pacific Ocean, caused by the Tsunami. This peril is specifically excluded from the policy. Even if the ocean water mixed with water from broken supply lines, the tsunami/overflow of a body of water was the efficient proximate cause of the loss. Under California law, if an excluded cause is the efficient proximate cause of a loss, there is no coverage under an all-risk policy. CHiPs contends that the efficient proximate cause was not an excluded peril as it was caused by the rupturing of several water lines in the hotel and it is therefore entitled to $1,200,000.

CHiPs also feels that underwriters should pay $800,000 for its BI loss at the Santa Catalina Hotel, but underwriters denied the claim as the hotel was in decline prior to the earthquake, as shown by the fact that the hotel was failing to meet its profit projections every month between January and May 2009, by tens of thousands of dollars. The hotel had also received numerous bad reviews on social media sites from customers. Therefore, the loss of revenue was not solely the result of the interruption of business from a covered peril (which is under dispute), but instead was also the result of decline in the property which began before the earthquake.

arbitration Hearing

In order to make decisions on these key areas of dispute, we were asked to consider the testimonies of the following people: Eric Estrada the risk manager, Gemma Middleton the broker, Ima Adjuster the claims adjuster and Jamison Bonnet the forensic accountant. The key points of their testimonies are outlined below.

First to the stand was Eric Estrada (played by Simon Wilson), the risk manager for CHiPs. Taylor Davis examined Mr Estrada and his testimony, and established that the Disneyland Hotel was in good condition and that the hotel’s business was heavily dependent on guests visiting the Disneyland theme park. Mr Estrada then stated that the Santa Catalina Hotel was in good condition prior to the events of 15th June 2009. He described the events of the earthquake and the damage and destruction that it caused. We were then shown pictures of the hotel before and after the earthquake to highlight the magnitude of the event. Under examination, Eric explained why it had taken 4 months for the damages to be repaired which explained the final quantum of the BI loss amounting to $10,000,000. It was further established that it took 18 months for the Disneyland Theme park to reopen and that CHiPs did not start making money at its hotel until this had occurred.


Mr Estrada then went on to talk about the Santa Catalina water damage claim, and referred to the photographic evidence that he claimed showed that the damage was caused by broken pipes as well as the ensuing Tsunami. He then stated that it took 5 months to repair the damage caused at the Hotel, due to the supply problems that were occurring throughout the State and that this was further hampered by the hotel being on an island.

Mr Estrada then belittled the Trip Advisor reviews as being meaningless and not a fair reflection of the hotel. Finally, it was established that he had relied on his broker to obtain the coverage that was required for its hotels and that he had expressed to her that the Disneyland Theme park should be noted as a named property on the policy.

Under cross-examination by Meredith Whigham, it was established that Eric Estrada had relied on his broker to obtain the coverage that was required, especially in relation to the Disneyland Hotel and that he had reviewed and signed the policy confirming that the coverage was as he requested. He was then questioned in relation to the time it took to repair the damage at the hotel and it was contended that this would have taken 60 days in total if they had acted more quickly.

The cross-examination then moved onto the Santa Catalina loss, and looked at the photos and questioned whether broken pipes could cause the entire first floor of the hotel to be 9 feet underwater. Mr Estrada was forced to concede that the majority of the damage was probably caused by the Pacific Ocean after the tsunami, but he did not state that this was the efficient proximate cause of the loss.

Second to the stand was Gemma Middleton (played by Lauren Oliver), the Lloyd’s Broker. Under initial examination by Jon Mutch it was established that Eric Estrada, approached Ms Middleton directly, foregoing the use of a retail or wholesale broker. It was noted that Ms Middleton visited the insured properties and that the Disneyland Hotel is dependent on Disneyland for much of its business. Ms Middleton was asked if they discussed business interruption coverage in respect of the theme park’s closure. She confirmed that such coverage was requested for $15,000,000 per annum and the fact that it was not included as a named property was her error.

The RKMC team with Wil Cooper and Rob Thomas


Finally, the issue is raised about who the broker was acting on behalf of. It was agreed that as the broker’s commission was negotiated with underwriters and taken from the premium collected on behalf of underwriters, it was essentially paid by the underwriters. It was also pointed out that the policy is drafted by the broker and then issued through Lloyd’s; suggesting that when preparing the policy the broker is doing so on behalf of underwriters and not the insured.

Then under cross-examination by Jim Koelzer it was established that the broker’s role was to negotiate policy conditions on behalf of ChiPs with underwriters. He confirmed that Ms Middleton had taken on the role of CHiP’s representative in Lloyd’s for a number of years, suggesting that she should have been well aware of the coverage requirements of the insured.

It was also agreed that when CHiPs paid the premium to the broker, the sum included the broker’s fee as well as the premium due to underwriters. This means that it was CHiPs who was paying the broker for its services, which included paying forward premium to the underwriter.Then the negotiation process was discussed. It was once again confirmed that the terms of policy did not include Disneyland as a named location. Referring back to the previous point that the broker was working on behalf of CHiPs, it was postulated that in this case, underwriters could not be held liable for a broker error.

Finally, it was recognised that the terms offered by underwriters could be rejected, or amendments requested. Despite several weeks passing before the loss occurred, no attempt was made by the broker to have the policy amended to include Disneyland Theme park as a named assured. This should be considered plenty of time for the broker and the insured to note the error and request that it be corrected.Next to the stand was Ima Adjuster (played by Amy Churan), the Claims Adjuster. Under examination by Jon Mutch she noted her assessment of the Santa Catalina Hotel loss and referred to the photographic evidence that clearly showed the property damage was caused by flood rather than by burst/broken pipes. Ms Adjuster recommended denying this part of the claim.

Ms Adjuster agreed with the settlement of the property damage claim in respect of the Disneyland Hotel and recommended that it be paid in full, despite the insured’s failure to notify insurers. However, in respect of the business interruption, there were several issues with the claim. Ms Adjuster suggested that the repairs required were not completed with due diligence and dispatch because CHiPs did not have a contractor look at the damages until two weeks after the earthquake. Also, several weeks passed between estimates for the repairs being obtained and construction crews beginning work on the site. The materials needed for the repairs were also not obtained until weeks after the earthquake. Once the repair work finally started, it only took 60 days to complete. Therefore, the period of restoration was thirty days (after the application of the deductible) and the insured may only be compensated for business interruption losses incurred during the first thirty days after the loss and the valuation of the claim was calculated to be $1,542,250.

Ms Adjuster supported the testimony of Ms Middleton and stated that the unnamed property sublimit applies in respect of CBI and that there was insufficient evidence for the BI coverage being longer than the 30 day limitation.

Ms Adjuster did not cope well under cross-examination and the defence highlighted her limited experience and the fact she had never previously adjusted hotel claims. This called into question her suitability to


adjust the Santa Catalina Hotel claim and it was concluded by the arbitration chair, that her testimony in respect of the cause of the flood damage at the hotel, be stricken from the record. Therefore, in deciding the cause of damage the only available evidence was the photographic evidence provided and Eric Estrada’s testimony.

In regards to the BI loss and the delay in starting the repair work, the defence highlighted the damage that occurred at the same time to many of the surrounding properties and that the demand for materials and repairs would surely have made it difficult for Mr Estrada to secure a contractor, as they would have been in short supply. Ms Adjuster’s response was to agree this was possible, but to also accuse Mr Estrada of being lazy although she had no evidence to support this accusation. Finally, the defence lawyers noted the importance of the Disneyland Theme park to the operation of the Disneyland Hotel in respect of the CBI loss.

Lastly Dr. Jamison Bonnet (played by James Barrett) was called to the stand, a certified public accountant, he was testifying as an expert witness to give his opinion regarding the valuation of the ChiPs’ insurance claim. Initially, Dr. Bonnet’s credentials were established to confirm that his testimony regarding the issue in question was reliable and accurate, the questions then moved on to the specifics of the case.

Dr Bonnet stated that the business interruption claim CHiPs submitted for the Disneyland hotel was vastly overstated, based on the financial documents he reviewed. From the financial information he received from CHiPs, he concluded that the total loss for the BI and CBI losses at the Disneyland Hotel were $13,077,499, based on the period June 15, 2009 to December 31 2010. There was insufficient documentation to support a higher amount. Dr Bonnet then went on to specifically explain how he calculated the business interruption damages for the 30 day BI period and that this totalled $1,542,250.

Dr. Bonnet continued to discuss the BI loss at the Santa Catalina Hotel and highlighted a large difference between the Projected Gross Profits and the Actual Gross Profits. This is evidence that the hotel was performing below expectations before the loss occurred. He summarised that the losses were not entirely attributable to the tsunami, as the figures show that the hotel was in decline. This is further supported by the reports on the Trip Advisor website that highlight the poor service and upkeep of the hotel.

Under cross-examination, the defence could not fully discredit Dr Bonnet but they did highlight that he was employed by insurers to perform this analysis and that it is in his interest to find in their favour as he relies on their business for his employment. They did discredit the reviews on Trip Advisor due to the anonymity of the reviewers and the fact that people generally only go on these sites to complain.

conclusion

In determining the outcome of this arbitration hearing, we were asked to come to conclusions on the key elements under dispute, taking into consideration the facts of the case, the testimonies and the cross-examinations that we had heard.

The lawyers in their closing remarks reminded us to consider each element with regard to California law and to bear in mind that within the State each of the elements being claimed by CHiPs would be considered


and judged against the ‘reasonable expectations of the insured.’ So, when applied to this case, each pointneeded to be judged as to whether it was reasonable for CHiPs to expect this coverage to be in place and whether it performed all its duties as the insured.

We were each handed a verdict form on which we were asked to decide on the key points of dispute in the case. We were divided into 6 groups and each group came to their own conclusions and we then discussed our decisions within the entire group. No one answer was correct as each point could be effectively argued from either standpoint.

The first area to consider was in regards to the Disneyland Hotel Business Interruption claim. The question we were asked was “How long is the Indemnity Period, after the application of the thirty-day waiting period? A) 90 days or B) 30 days?”

The key here was business interruption condition B which states that:

“The Indemnity Period is defined as only such length of time as would be required with the exercise of due diligence and dispatch to rebuild, repair or replace such described property as has been damaged or destroyed plus such additional length of time, not to exceed 30 days, incurred to restore the Insured’s business to the condition that would have existed had no loss occurred and not limited by the date of expiration of this Insurance. However, the Company’s liability for loss shall not exceed an indemnity period for twenty-four (24) months after application of the Excess”.

In judging the application of this condition, we needed to consider the testimony of Eric Estrada and Ima Adjuster. The key point of contention was whether CHiPs had exercised due diligence and dispatch to rebuild, replace or repair the damaged property.

Group 2 – David Lavery, Colette Murphy, Stuart Wilson, Krystina Wallis & Simon Wilson


Eric Estrada claimed that due to the earthquake, CHiPs was unable to obtain the materials required to begin the rebuilding of the damaged property. The resulting limit in supplies had led to the indemnity period taking 120 days in all.

The underwriters at Lloyd’s claimed that the relatively minor repairs were not completed with due diligence and dispatch, so only wanted the 30 day indemnity period to apply. This was based on the loss adjuster’s findings and outlined in her letter dated 1st March 2010.

A key consideration was Jim’s examination of Ima Adjuster where it was established that it was her first time as a lead adjuster on a case, in which she had no structural engineering qualifications and no previous adjusting experience for BI claims in regards to property indemnity periods.

Therefore, 5 out of the 6 groups went for the 90 days indemnity period while only 1 group went for the 30 days indemnity period as they felt 4 months to repair minimal damage was still unjustifiable.

In speaking to the lawyers after we had reached our conclusions, although they agreed that 90 days was possibly an excessive period of time to carry out minor repairs, they felt that a California court would have taken the insured’s side and found in favour of the 90 day indemnity period. A key factor here was that there was no testimony that adequately contradicted Eric Estrada and it therefore appeared that it was a reasonable expectation of CHiPs to have 120 days indemnity coverage.

The second area of dispute was the Disneyland Hotel contingent business interruption claim. The first question associated with this was whether “The broker, Gemma Middleton, was acting as the agent of: A) CHiPs or B) Underwriters.”

In deciding who the broker was acting as agent for in this situation, we needed to consider the testimony of Gemma Middleton and Eric Estrada. Underwriters argued that the broker appeared to be an advocate of the policyholder’s interests and highlighted the strong working relationship they had developed over a number of years. This was shown by the fact that no US retail or wholesale broker was used in placing the contract of insurance.

Underwriters also contended that Gemma had to make the risk seem attractive to the insurers in order to obtain coverage, which could have been a reason why she had neglected to name Disneyland as a lead property in the Policy. This appears to support the contention that she was working as an agent of the insured.

However, Eric Estrada stated that when discussing the policy specifications with Gemma, he had clearly said that Disneyland needed to be a lead contributor as the hotel relied on the clientele of the Theme Park to maintain business at their hotel. So she had also not performed her duties as an agent of the insured.

Jim elicited testimony from Gemma that a broker is “paid” by underwriters since their commission is agreed with underwriters and is deducted from the gross premium payment and that therefore Gemma must have been working for the insurer and not the insured.


Ultimately she had failed in her duties as agent of both the insured and the insurer, but after considering the evidence, 6 out of 6 groups felt that the broker, Gemma Middleton was working for A) CHiPs.

In deciding who she was agent for in this case, each group considered the tripartite relationship between the insured, broker and underwriter which states that the broker is the agent of the insured and underwriter at different times during the insurance transaction. Therefore in this case, based on the testimony given, it was clear that Gemma was acting on behalf of Eric Estrada when placing the risk. Underwriters could only respond to the information that they were provided with and price the risk accordingly. If this had been incorrect, Eric Estrada could have declined to purchase the policy or refused to sign the policy presented to him.

However, in our discussions with the lawyers, the lawyers clarified that they often see insureds argue that the broker is the agent of underwriters. The insureds’ argument is often based on the multifaceted relationship between brokers and underwriters, where brokers perform some responsibilities on behalf of underwriters (e.g. collecting premium and maintaining placing files), but otherwise generally represent the interests of the insured. The lawyers also noted that, with limited exception, California law presumes that the broker’s commission is paid by underwriters (not the insured) and that brokers act as the fiduciaries of insurers when collecting and refunding premiums. Depending on the issues in a particular case, a California court might conclude a broker was acting as the agent of underwriters. The only recourse then for underwriters would be to claim against the broker once they have settled with the insured.

The second question in regards to CBI was “Which limit applies to the contingent business interruption claim? A) $15 million for Named Properties or B) $5 million for all others.”

Both parties agreed that there is coverage provided under the policy for CBI under the dependent properties coverage section. They also agreed that Disneyland is a leader property for the CHiP’s Disneyland Hotel.

Underwriters argued that the limits show that if a leader property is not designated as a named property in the policy, the policyholder is subject to a $5,000,000 sublimit under the dependent properties coverage.

CHiPs argued that it specified to the broker that the Disneyland Theme Park was a leader property and that the hotel’s business was dependent on the theme park so therefore it should be a named property under the policy. Although Eric Estrada signed the policy, he was under the assumption that this coverage was given under the policy and that Disneyland fell under the sublimit for named properties. It was also noted that no properties were named within the policy and that a California court would have asked the question “why have a sublimit within the policy that does not apply?” and this would have supported CHiPs’ case.

As this is closely linked to the previous question, it is not surprising that 4 of 6 groups decided that the $5 million sublimit would apply as once you establish that Gemma was acting on behalf of CHiPs and you note that Disneyland is not a named property in the policy the unnamed CBI sublimit would apply.

However, 2 groups felt that a California court would have found in favour of CHiPs as they thought it was clear that the nature of the hotel’s business, which is apparent from the hotel’s name (“Disneyland Hotel”), meant that it was dependent on the Theme Park. It was therefore a reasonable expectation of the insured to assume that the higher level of cover was provided.


In this situation, the lawyers also felt that a California court would have found in favour of CHiPs and stated that the $15 million sublimit would most likely have been applied.

The final area of consideration was in relation to the Santa Catalina Island Hotel and the loss that occurred there. The key question for the arbitration hearing was “Does the exclusion for water damage resulting from flood, rain, waves, tsunami, tidal water, overflow of a body of water, or spray, apply to preclude all coverage for the Santa Catalina Hotel?”

Under California law, Garvey v. State Farm Fire & Casualty Co., when a loss is caused by a combination of a covered risk and a specifically excluded risk, the loss is covered only if the covered risk was the ‘efficient proximate cause’ of the loss which has been defined as the ‘most important’ cause of loss.

Based on Eric Estrada’s testimony, CHiPs claimed that the water damage to the hotel was caused from pipes that broke due to the earthquake. They argued that the entire first floor was flooded to a level of several feet due to the release of water supply pipes within the hotel and/or water from municipal supply lines. They also contended that even if water from the ocean mixed with water from the broken pipes to cause the flood, the broken pipes were the efficient proximate cause of the loss.

The investigation of underwriters conducted by Ima Adjuster, concluded that the efficient proximate cause of loss was due to the ‘overflow of a body of water’ namely the Pacific Ocean, caused by tsunami. This testimony was restricted from the record as her testimony was exceptionally poor and showed a lack of professionalism and knowledge. Therefore, in reaching a conclusion we could only consider the evidence in exhibits 9 – 12.

We had to consider what we felt was the efficient proximate cause of the loss. The loss adjuster’s evidence was precluded from our deliberations, but given the photographical evidence of windows blown inwards and water reaching the ceiling, 6 out of 6 groups concluded that the efficient proximate cause of loss was the tsunami. Consequently the exclusion did apply.

The lawyers were in agreement with this conclusion but noted that this has not always been the case in the California courts and that previous case law had established a principle of concurrent causation analysis. Under concurrent cause theory, there was coverage if at least one of the identified causes was a non-excluded peril and if this principle had been applied in this case, a different conclusion would most likely have been reached.

Although the forensic accountant’s testimony was not a major aspect of our deliberations, Jamison Bonnet did call into question the moral hazard associated with the insured and any awards for greater quantum in favour of the insured, could well have been under further dispute as CHiPs was claiming far in excess of the actual figures as noted in his business interruption analysis.

It should also be noted that the trip advisor exhibits were discussed in relation to the state of the Santa Catalina Hotel. However, it was felt that they could not be used to support the dispute discussed above as they were unreliable sources of evidence with false names attached to the comments.


This concluded our mock earthquake arbitration hearing with Robins, Kaplan, Miller & Ciresi L.L.P. It was a very beneficial day and a highlight of our tour. However, it did make every member of the Under 30s hope that we would never have to be a part of a real arbitration hearing.

The RKMC Team and the Lloyd’s Under 30s after the Mock Arbitration Hearing


Locke Lord LLPLos Angeles

We were fortunate enough to meet with Locke Lord who hosted us for the day. On arrival, Susan Welde welcomed the Lloyd’s Under 30s group and gave us a very useful introduction into Locke Lord. We were honoured that a number of experienced lawyers had travelled from all over the US to meet with the Lloyd’s Under 30s group for the day and we were very appreciative of them taking time out from their own schedules to meet with us.

BackgroundLocke Lord is a full-service, national law firm with offices in Atlanta, Austin, Chicago, Dallas, Hong Kong, Houston, London, Los Angeles, New Orleans, New York, Sacramento, San Francisco and Washington, D.C. With over 650 employees, it has a reputation in dealing with complex litigation, regulatory and transactional work. Locke Lord and Lloyd’s have a long standing relationship with links to the London insurance market for three quarters of a century.

The close tie between both Lloyd’s and Locke Lord is supported by both parties specialising in similar classes of business, for example Locke Lord has strong practice areas in:

■ Aviation

■ Business litigation

■ Energy

■ Environmental

■ Financial services

■ Health care

■ Intellectual property

■ Litigation

■ Mergers and acquisitions

■ Private equity

■ Public law

■ Real estate

■ REITs

Our introduction to the firm was largely based around discussion of the US legal system, the contrast between different countries’ legal interpretation of insurance language and current market conditions.

We were fortunate enough to be taken to the Los Angeles court to see first-hand just how legal proceedings take place in Los Angeles. Each group was then able to discuss the case with a Locke Lord representative. It was fascinating to pull apart each piece of information with an experienced lawyer.

Locke Lord LLP Head Office


an account FroM a MeMBer oF our tourA group of us were very kindly taken to the LA county courtrooms for a day to listen in on a trial. We went through a metal detector and all bags were searched. We took the lift to our specific courtroom’s floor and went through a second metal detector accompanied by a full body pat down search. All items that we were carrying were scanned and then given back to us as safety was obviously paramount inside the courtrooms.

We entered our chosen courtroom, where there was a murder trial taking place of two LA inmates from the ‘18th Street’ gang, who were being tried for the supposed murder of an inmate.

We all took our seats in the audience stalls and observed the courtroom. It was smaller and more sterile than expected with the jury to one side, the judge in the back middle the courtroom stenographer sat in front and the prosecution team and defence team sat on separate tables side by side in front of the judge. The judge read out the case and explained the purpose of the courtroom stenographer, who was defined as the person who records the testimony in the courtroom. Every criminal trial and most civil trials will have a stenographer to record the questions, answers, conversations between the judges, the judge and the lawyers and the instructions that the judge gives to witnesses or lawyers or to the jury. Essentially, the court will have a complete verbal record of what occurred.

The state prosecution lawyer stood, introduced herself to the judge and the jury and started by giving a brief history on the charges against these two men in the past and present and their gang’s history:

The charges ranged from assault, grand theft auto, robbery and supposedly, in this instance, murder as well. A summary of the Gang’s history was explained to us. The 18th Street gang was formed by Mexican-American youths who were not accepted in the existing American gangs. 18th Street gang members often identify themselves with the number 18 on their jerseys and clothing. 18th Street will use the symbols XV3, XVIII, 666 and 3-dots in their graffiti and tattoos. It is common for members of the gang, to be tattooed all over their bodies and faces. According to the FBI, some factions of the 18th Street gang have developed a high level of sophistication and organisation ranging from the streets to jail and back again. They are seen as one of the most violent street gangs and one of the most prolific in the United States.

The Prosecution then went on to present a slide show of evidence. After the prosecution’s case had been

An Example of the LA Courtroom


The Team at the LA Dodgers stadium

heard, the two murder suspects were lead into the court. Both the men were of Mexican descent and were dressed in orange prison issue jump suits, hand cuffs and ankle chains and were escorted by security officers, who were heavily armed. The men had numerous gold teeth and had head and face tattoos displaying their ‘18th Street’ gang signs.

It was then the defense’s turn to take the stand and prove that the accused men were innocent of their supposed crime. The lawyer did not use any props when defending his clients but merely kept repeating, recapping and emphasising particular words and points. He used long, purposeful silences and pronounced key phrases to draw attention to his persuasive repertoire. This technique kept all jurors’ eyes on him and they waited on his every word. It created quite a powerful atmosphere in the courtroom.

The defense then began to dissect and attack the evidence. The jury then left the room for discussion as the inmates were led away to a holding cell. The judge asked our group to come forth and welcomed us to the courtroom, and explained how personal emotion did not count for a great deal in the courtroom as evidence and proof were the key aspects to prove anything.

We later learnt that the outcome of the trial was that the jury found the two suspects ‘not guilty’ of murder due to lack of evidence.

This was one account from the four different trials our Under 30s group went to and to experience this trial was a truly amazing insight into the judiciary system as well as a privilege to be able to witness such a thing.

After what was a great day with the Locke Lord team and an interesting insight into the US legal system (one that not many people get to see), we were then taken by the team to the Dodgers baseball stadium, which was a fantastic ending to a superb day.


rSuIWednesday 18th May 2011Los AngelesSpeaker – Andrew Whittington

RSUI is a leading underwriter of wholesale specialty insurance. The group underwrites a variety of commercial property/casualty specialty insurance products, including professional liability, D&O liability and inland marine policies. RSUI works exclusively with wholesale brokers who sell its products to retail brokers, who then in turn, sell to clients ranging from Fortune 500 firms to non-profit organisations.

BrIeF oVerVIeW ■ RSUI does business through RSUI Indemnity Company and Landmark American Insurance

Company and Covington Specialty Insurance Company.

■ In 2003 Alleghany Corporation acquired the company, formerly known as Resurgens Specialty Underwriting, from Royal & Sun Alliance Insurance Group and renamed the unit RSUI Group.

■ The purchase cost Alleghany roughly $115m, and capitalised it at more than $500m.

■ RSUI Indemnity Company and Landmark American, the companies of RSUI Group, Inc, are rated “A XII” (“Excellent”) by A.M. Best.

■ They are the 6th largest E & S writer in the United States earning roughly $1b of premium a year.

■ Approximately 50% of premium earned comes from property business.

■ Typical property risks handled by RSUI are - multi-location layered programmes, difference in conditions, foreclosed property, vacant property, high and aggregate deductibles, apartment/ condominium risks, institutional and public entity schedules, and large corporate and real estate schedules.

■ Headquarters in Atlanta –produces 85% of the business.

■ LA office opened in 1992. – 15% of the business.

rISk aPPetIteRSUI opened its main office 23 years ago in Atlanta. Its philosophy is based on handling only product lines in which its underwriters have strong underwriting expertise. RSUI generally focuses on higher severity, lower frequency specialty risks that can be effectively desk underwritten.

RSUI writes a complete line of wholesale specialty products from binding authority, casualty insurance (primary and excess), D & O, professional liability and of course property (commercial, manufacturing, municipal and institutional).


JaPan Quake/rMS 11 aFFectSAt the time of the meeting Andrew made it clear that the Tohoku earthquake has had little to no effect on RSUI. He was quick to point out that the new release of RMS 11 may have an impact on wind rates. The general consensus is that renewal business remains flat, and whilst underwriters are pushing for increases they have limited success. However, Andrew does believe that the market is in transition. Model driven companies will be hit hard by the changes as this will have an impact on treaty renewals. Companies like Lexington could turn the market if they are forced to reduce risk appetite.

RSUI uses the model as a part of its overall portfolio management and NOT to price individual risk. He feels that the RMS update will have a limited impact on the way RSUI does business.


York LoSS adJuSterSThursday 19th May 2011Los Angeles

On Thursday 19th May 2011, The Lloyd’s Under 30s study tour was hosted by York Loss Adjusters in Los Angeles. York provided the study tour with two comprehensive site visits to the Los Angeles Emergency Operations Centre and the Los Angeles Central Heating Co-Generation and Refrigeration Facility.

The hosts from York were:

■ William Walter

■ Bob Barnett

■ Rodney Winkler

■ C.A. Burchey

■ Brent Parish

■ Danny Miller

■ Chris Moore

The day began with a brief presentation from Laurie Milheiser, the current Los Angeles County Risk Manager and ex Los Angeles School District Risk Manager. She outlined the ethos behind risk management in the county and set the scene for the day’s site visits.

CenTRAl HeATinG Co-GeneRATion And ReFRiGeRATion FACiliTYThe Central Heating Co-Generation and Refrigeration Facility was built in 1966 and is responsible for providing much of downtown Los Angeles with both electricity and chill water to control the temperature of the buildings.

MaIn coMPonent oF tHe centraL HeatIng FacILItY

■ GE LM2500 Gas Turbine Generator.

■ Base loaded to generate 21 MW/hr of power at 13,800 Volts.

■ Facility uses MW/hr for heating and cooling of neighbouring buildings.

■ Excess power is fed into the DWP electrical grid and helps reduce the electrical costs for the county.

■ Exhaust gases from the Gas Turbine are used to generate 85,000 lbs/hr steam for use in the facility.

■ Primary use of the steam is supplies to the neighbouring buildings, for heating and hot water purposes.

■ The plant saves $1 million/month in electricity but costs $1 million in gas per month.


SteaM uSe at tHe FacILItY

■ The refrigeration side of the facility has two steam driven Centrifugal Refrigeration Units (CRU).

■ These units use the 260 psi steam to make 44˚F water and exhaust the steam to the low pressure header at 13 psi.

■ The combined cooling capacity of the two steam driven CRU’s is 3,500 tons of chill water. They also consume 65,000 lbs/hr steam if both are online together.

■ From the low pressure header, the facility has four absorber refrigeration units.

■ Two of the units can cool 1,350 tons of chill water each while consuming 50,000 lbs/hr of low pressure steam.

■ The other two units can cool 800 tons of chill water each while consuming 25,000 lbs/hr of low pressure steam.

■ Overall steam driven refrigeration equipment has a total cooling capacity of 7,800 tons/hr.

SteaM ProductIon ■ When the Gas Turbine Generator is online,

steam is produced in a Heat Recovery Steam Generator (HRSG).

■ The HRSG produces both high pressure steam (260 psi) and it also produces low pressure steam (13 psi) for use in the De-aerators.

■ Emission control devices are located inside the HRSG to limit the amount of pollutants that the facility generates by burning natural gas.

■ Whether or not the facility is generating electricity with the Gas Turbine Generator, the facility still needs to make steam.

■ Four auxiliary boilers can provide approximately 22,000 lbs/hr of steam each to the main steam header.

■ Each boiler stands alone with its own control panel and firing rate can be control from in side the control room.

Boiler Control Panel


addItIonaL SteaM uSe and reFrIgeratIon eQuIPMent

■ When the refrigeration load is not very heavy the facility generates more steam than it can use for refrigeration.

■ The facility is equipped with a steam turbine that generates electricity.

■ The current unit was not properly sized for the facility but it still provides additional electrical revenue from excess steam.

■ The facility is also equipped with electric CRU’s for emergencies and they are used when the Gas Turbine experiences sudden trips and the boilers are not creating steam.

■ The purpose of this is to ensure that surrounding buildings are supplied with chill water at all times.

■ The chill water is used to maintain building temperatures, computer rooms and cold storage units at various buildings around us.

auXILIarY eQuIPMent

■ Without high pressure gas, the Gas Turbine Generator would not be able to run.

■ A gas compressor is used to provide the Gas Turbine with 425 psi natural gas pressure.

■ Many of the controls around the facility are controlled by compressed air, so an air compressor is also needed on site.

■ Water softeners are used to remove hardness from the water to prevent the boilers from furring up – the facility has three softeners that process approximately 60,000 gallons of water per day.


cooLIng eQuIPMent ■ A vast amount of heat is generated in the facility and it needs to be disposed of.

■ The facility has two cooling towers that can provide up to 50,000 tons of cooling capacity.

■ A total of eight fans can remove enough heat from the water to ensure that all of the refrigeration equipment stays running on 110˚F each day.

eMISSIonS controL ■ The facility uses two types of emissions

controls on the Gas Turbine:

- Ultra pure water injection into the Gas Turbine to reduce NOx emissions.

- Ammonia injection into the HRSG gas path to reduce NOx emissions – ammonia was originally produced by anhydrous ammonia, however, this was deemed too hazardous and the ammonia is now created via a UREA system.


MoVIng aLL tHe Water ■ Large chill water pumps are used to move the water through the chillers and out into the

surrounding buildings.

■ A total of 14 buildings use the chill water, these include:

- Hall of Administration

- Hall of Records

- Cathedral

- Disney Centre

- Music Centre

- Law Library

- Court Houses

LoS angeLeS eMergencY oPeratIonS centre tour.Risk Manager; Laurie Milhiser

■ Los Angeles has a population of 3,792,621.

■ LA is one of the world’s centres of culture, media, business and international trade.

■ Los Angeles is subject to earthquakes due to its location on the Pacific Ring of Fire.

The Office of Emergency Management (OEM) was established by Chapter 2.68 of the County Code with responsibility for organising and directing the preparedness efforts of the Emergency Management Organization of Los Angeles County. OEM is the day to day Los Angeles County Operational Area coordinator for the entire geographical area of the county.


This broad responsibility includes:

Planning and coordination ■ Maintaining an approved Operational Area Emergency Response Plan.

■ Providing ongoing leadership and coordinating disaster plans and exercises with the 88 cities, 137 unincorporated communities and 288 special districts in the county.

■ Assisting county departments to develop department emergency plans which address how they will perform both their non-deferrable missions and Operational Area duties during disasters.

■ Assisting county departments with development of facility emergency plans for every occupied county facility.

operations ■ Maintaining the County Emergency Operations Center (CEOC) in a state of operational

readiness, in partnership with the Sheriff’s Emergency Operations Bureau.

■ Serving as on-call CEOC first responders on a 24-hour basis.

■ Providing an OEM duty officer on a 24-hour basis to address inquiries and concerns from county, local, and state officials regarding potential or escalating emergency conditions.

■ 28 centres throughout Los Angeles. Larger clients such as Walmart have their own disaster rooms that link with the central agency.

training ■ Maintaining a cadre of CEOC team members trained in section and position responsibilities and

use of the Emergency Management Information System (EMIS).

■ Providing ongoing training for county Department Emergency Coordinators and Building Emergency Coordinators.

technical operations ■ Developing and maintaining the EMIS linking county departments.

Public education ■ Conducting public education campaign for all hazards through the Emergency Survival Program

(ESP), expos, public venues and various media presentations.

■ Alert County LA Los Angeles County is implementing an emergency mass notification system that will be used to contact county residents and businesses via recorded phone messages, text mes sages and e-mail in case of emergency.


HIStorIcaL dISaSter InForMatIonearthquakes

The greatest Southern California earthquake in modern history was the Fort Tejon earthquake on January 9, 1857 that measured 8.0 on the Richter Scale. Damage was not nearly as serious as it would be today, mostly because Southern California was sparsely populated. Were the Fort Tejon shock to happen today, the damage would easily run into billions of dollars, and the loss of life would be substantial. The present day communities of Wrightwood and Palmdale lie upon or near the 1857 rupture area.

On March 10, 1933 at 5:54 p.m., a magnitude 6.4 earthquake hit the Newport-Inglewood Fault, causing serious damage in Long Beach and other communities. The earthquake resulted in 120 deaths and more than $50 million in property damage. Most of the damaged buildings were of unreinforced masonry.

More recent earthquakes have caused severe damage, but none would be classified as a “major” temblor. The San Fernando earthquake hit at 6:01 a.m. on February 9, 1971. It caused more than $500 million in damage and 65 deaths.

The Whittier Narrows earthquake struck on October 1, 1987 at 7:42 a.m. and registered magnitude 5.9. It caused eight deaths and $358 million in property damage.

The Sierra Madre earthquake was magnitude 5.8 and occurred on June 28, 1991 at 7:43 a.m. Because of its depth and moderate size, it caused no surface rupture, though it triggered rockslides that blocked some mountain roads. It caused about $40 million in property damage and two deaths, mostly in the San Gabriel Valley.

At the intersection of Broadway and Elm Streetin Long Beach, California, March 10, 1933

Damage to Long Beach Polytechnic High Schoolfollowing the 1933 earthquake


Wildfires

Los Angeles County is well known as one of the world’s great urban centres, but the county is also home to the 650,000-acre Angeles National Forest and a large portion of the Santa Monica Mountains National Recreational Area. Thousands of homes are located in foothill communities near these great natural areas, creating unique challenges for local fire agencies.

Since 1927, a total of 24 wildland fires have caused the loss of 1,502 homes, 830 other structures, 271,047 acres and five fatalities. The most recent major wildfires erupted in Los Angeles and surrounding counties starting in the Angeles National Forest above Altadena on October 27, 1993. Fires in Altadena and Malibu caused the loss of many homes.

Floods and mudslides

Los Angeles County contains some of the steepest and most erosive mountains in the world, the San Gabriels, with elevations reaching 10,000 feet above sea level. Below steeply walled canyons lie large coastal plains with a high population density. When heavy rains come, there is a significant potential for floods and mudslides.

The magnitude 6.7 Northridge earthquake struck at 4:31 a.m. on January 17, 1994. This earthquake caused 57 deaths and a FEMA-estimated $40 billion in property damage. An estimated 12,000 people were injured, and 100,000 structures were damaged. More than 600,000 individuals applied for disaster assistance.

Residence that was “red tagged” due to damage from the 1994 Northridge Earthquake


In 1914, when the population of the Los Angeles Basin was about 700,000, a four-day storm produced more than 19 inches of rain in the San Gabriel Mountains, resulting in floods causing $10 million in damage. Floods in 1938 caused $70 million in damage in Southern California, and in 1969, floods caused $400 million in damage and 60 deaths.

In the 1990s, serious flooding happened in 1992, ‘93, ‘95, and ‘98.

civil disorder

Significant events of civil disorder are uncommon in the operational area, but have occurred twice in recent history. On August 11, 1965, six days of rioting began in the Watts section of Los Angeles. In the violence, 34 people were killed and 856 injured.

On April 29, 1992, just hours after a Simi Valley jury acquitted four LAPD officers in the Rodney King trial, civil disorder erupted, resulting in 58 deaths.


tHe WaLt dISneY coMPanYFriday 20th May 2011Walt Disney Studios, 500 South Buena Vista St, Burbank, CA 91521Host: Steve Wilder, Risk Manager

IntroductIon to dISneYThe Walt Disney Company (TWDC) is divided into five major business segments: Media Networks, Studio Entertainment, Theme Parks & Resorts, Consumer Products and Disney Interactive Media Group (DIMG). The Media Networks segment is the biggest producer of revenue.

The Studios were built in 1937 from the revenue generated from Snow White and the Seven Dwarfs. Steve Wilder, Risk Manager, The Walt Disney Company, explained that when the loan was originally arranged for the previous studio no-one believed that a feature length animated film would make any money and there was a condition in the loan agreement that the studio would revert to a different use if it failed.

tHe dISneY eMergencY oPeratIonS centre Steve began by explaining to the group the history and purpose of the EOC. The Disney EOC was built after the 9/11 terrorist attacks to provide a command centre for senior executives in the event of a global disaster. The Walt Disney Company suffered a large loss after 9/11 as Disney owned ‘WABC-TV’ had two antennae on the top of the World Trade Centre. The losses were further agitated by customers being unable to fly to theme parks because of grounded airplanes.

Although (fortunately), the centre has not yet had to respond to a real event, Disney regularly conducts drills, the most recent example of which was for the California Ark storm (see USGS notes for further info on this). There are EOCs in a number of the Disney Theme Parks and facilities; however the one in Burbank is the chief one, and would take the lead in the event of a worldwide catastrophe.

Steve told us how Disney was quick to respond to the Japanese earthquake catastrophe on March 11 2011. Tokyo Disneyland suffered flooding in their parking areas and it is testament to Disney’s risk management that no visitors or employees were injured, although around 20,000 of the 69,000 visitors that day, did have

Background to tHe VISIt On the 20th May, the Lloyd’s Under 30s group were given a tour of the Disney studios in Burbank California. This is a work in production site where a number of motion pictures and television programmes aired by Disney and ABC are made, for example most recently, the hit show ‘Brothers & Sisters’. The site also contains a large selection of Disney memorabilia in the form of costumes and props. Whilst the group was familiar with the output of Disney; most obviously in terms of its programmes and theme parks, the site tour provided a fascinating insight into the workings behind the scenes, the problems associated with them, and the measures used to reduce risk.


to stay the night in the park due to the closure of Tokyo’s transportation system. The EOC in Burbank was in communication with the Tokyo site throughout the event. Following the event, Tokyo’s park was closed for 10 days for maintenance and inspections. Some of the Tokyo resorts hotels were closed for a longer period due to property damage.

Steve then went on to talk more broadly about the Disney Company and the insurance and risk management programme. He informed the group that 8 of the world’s 10 largest theme parks are owned and run by Disney and that an effective risk management programme was an essential part of being a world class company.

He then went on to outline the two insurance captive companies which Disney set up following their losses from 9/11. The first was Buena Vista Insurance Company and the second Alameda Insurance Company. Both named after the roads that the studios sit on. The two companies are managed by Aon Insurance Managers. Through these captives TWDC retains a lot of its own risk. Transferred risk tends to be catastrophic exposure. TWDC works closely with FM Global, integrating FM Global’s engineering and loss control resources throughout the company.

StudIo tourFollowing the briefing we participated in a guided tour of the premises. Almost 90% of TWDC’s buildings are classed as highly protected risks.

Outside, we got to see a small outdoor lot which had a row of shops. Then we got to see a couple of the sound stages where they had previously been filming “Brothers and Sisters” and got to look around the sets before they were dismantled.

External lot, row of shops


From the sound stages we went to the Frank G Wells Building which houses some of TWDC’s archives and several offices. This is where we were able to view several Walt Disney items such as first edition books, costumes and art work from animated films. From there we walked through the “Legends Plaza” which contained a sculpture of Walt Disney and Mickey, as well as several hand prints of people involved with the Disney films such as voice artists and animators.

On the other side of the Legends Plaza, there is the Michael D Eisner Building which was built in 1990 and the roof is held up by the seven dwarfs. This building contains the offices and boardrooms of senior people at Disney.

All in all, the group were really impressed by the Walt Disney Studios site, from the overall risk management to the immaculate presentation of the campus and the sound stages that were on site. TWDC operates an excellent top down risk management structure and clearly makes a large amount of effort to work alongside the insurance industry on its global programmes.

Michael D Eisner BuildingFrank G Wells Building


tHank You

‘The Lloyd’s Under 30s Group would like to take this opportunity to thank everyone who so kindly hosted us during the tour. We realise the time, cost and effort that goes into arranging these meetings and are always amazed by just how accommodating each company or group are, both from our initial contact a year prior to the tour, and through to meeting up in the summer.

The Under 30s has a long standing association with many of the organisations mentioned in this report, some of which date back to the first Lloyd’s tour. This relationship reaches from coast to coast, has spanned 30 years and is one we hope continues long after this latest tour.’

Tour Leaders:ANGELA WHYBROWEquinox Underwriting(An Underwriting Division of Price Forbes & Partners Ltd) E: [email protected] JONATHAN POWELLTalbotValidus GroupE: [email protected]

Designed and produced by:Green Shoots Communications Ltd. www.greenshootscomms.com

Travel Manager:LUCY SAMUELSONBlack TomatoE: [email protected]

L U 30 stUdy toUr - lloydsunder30s.coms U30s 2011... · Locke Lord LLP ... hosted by John Schmidt...

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