Climate and Insurance.org | takefive with Peter Thompson

Mr. Thompson has more than 33 years' experience working in the insurance industry in various underwriting and management insurance positions. He has extensive strategic and business planning experience with particular expertise in energy underwriting. For the past 18 years, Mr. Thompson has been focused in the Energy Resources Department at Chubb, holding various home office positions during this time. Prior to 1984, he worked for Fireman’s Fund and USF&G.

Mr. Thompson earned a B.S. degree in business management from St. Francis College, Brooklyn Heights, N.Y.

Takefive:
Mr. Thompson, Chubb has had a long history of expertise and commitment to the renewable and green energy market. Can you begin by briefly describing some of the company’s accomplishments in this area?

Peter Thompson:
Since the 1980s, Chubb has had a dedicated group focusing on the energy industry generally and the renewable energy industry specifically. We understood then that renewable or “green” energy was an emerging growth sector and wanted to make sure we dedicated resources to develop a deep knowledge of the varied technologies being deployed.

Although many of these technologies were just starting to reach commercial application in the 1980s, we established a niche and expertise somewhat different than our competitors, who at the time were still focused on the traditional energy sources. Since then, we have been regularly developing and deploying unique products and services to wind, hydro, solar and biomass power projects.

Even today, we are the only property and casualty insurer to offer a comprehensive package insurance product to these operations, complemented by dedicated and cored loss control and claims professionals.

Takefive:
In July 2007, Chubb announced that it was forming a “green energy team.” Can you tell us something about the rationale behind the team’s formation, how it functions within the larger Chubb organization and what are some of the team's near-term goals?

Peter Thompson:
Chubb has had a specific focus on renewable energy for more than two decades. However, with the rapid development of this energy source, we identified a number of product and service providers within the renewable energy industry that would benefit from our experience and offerings. By establishing the "green team," we brought together our best resources and expertise to evaluate offerings within this sector and help bring innovative products and services to market for these companies in a quick and efficient manner.

In addition to the product and service providers, we are looking at the rapidly growing green-building environment. Many of our Chubb customers are environmentally sensitive and embracing green technologies. Our "green team" is working with the USGBC and ACORE to understand, set and promote standards in this arena. Since the 2003 rewrite of our standard property form, Chubb has addressed a number of green building considerations, such as green roofs, alternative water systems and alternative power systems. To more affirmatively provide this property coverage for our green construction customer, we are developing two new products, which we expect to available to our customers soon.

Takefive:
One area where Chubb appears to be focusing its efforts today is with alternative energy sources, and, specifically, ethanol production. Can you tell us what Chubb is doing in this arena?

Peter Thompson:
We identified biofuels — primarily ethanol and biodiesel — as a growth opportunity a few years ago and established a specific segment to support it. We have established strategies for this business in North and Latin America. Our ethanol strategy focuses on both the current grain-to-ethanol and the developing market of next generation cellulosic ethanol.

We participate in national associations, such as Renewable Fuels Association and American Coalition of Ethanol. We continue to be involved in a wide cross-section of industries and individuals who strive for growth of alternative fuels and energy independence. We are recognized as a market leader in writing ethanol risks supported by a wide range of products and specialized loss prevention services focused on unique hazards of ethanol fuel fires.

Takefive:
In late 2007, Chubb joined the U.S. Green Building Council and the American Council on Renewable Energy. What have these relationships meant for Chubb?

Peter Thompson:
These relationships have been great for Chubb, really bringing us down to the ground floor of the green energy movement. One of our key "green team" members recently received his LEED certification for new properties, and as a founding member of ACORE, we hope to have opportunities to shape and promote the way green energy is positioned across the industry through conferences or training programs. Joining these organizations was a natural step for us, as Chubb has always valued being close to our customers, staying on top of industry developments and listening to their needs.

Takefive:
Finally, what has been the reaction of agents and brokers to the announcement that Chubb was forming a “green energy team?”

Peter Thompson:
The reaction has been overwhelmingly positive. Here are some comments from a recent Rough Notes article.

John McLane, energy practice leader for the Boston-based insurance brokerage firm William Gallagher Associates, saw Chubb’s moves as “extremely positive.”

“We have a green energy practice ourselves,” McLane said. “Our clients include renewable energy companies, high-tech organizations and manufacturing companies that are involved in alternative energy products. For us, there is a great deal of opportunity. Energy is a strong growth area and, in the insurance industry, we don't have too much competition. Chubb has taken a strong lead in this area.”

Con Elfes, vice president of The Hays Companies, a broker in Minneapolis, said that the search for alternative energy sources is worldwide.

“Everyone is looking for ways to minimize their dependence on oil. The problem is that, in the insurance arena, there are not a lot of people who understand energy exposures,” Elfes said. “We need organizations like Chubb that are capable of leading the way.”