Interview: Stewart Ower: Going with the flow

Having started what is now OHES Environmental from the spare bedroom of his house in 2002, Stewart Ower understands the challenges of running a small business.

However, the task awaiting him as chairman of UK Spill, the 100-strong organisation that represents the UK’s oil spill response and clean-up professionals, will be on an altogether different scale.

The OHES founder, who joined broker Arthur J Gallagher as part of its acquisition of Oamps in April 2014, begins his two-year tenure as chairman this week, with the aim of raising the profile of the organisation among insurance professionals.

He will also oversee several ambitious projects, including the extension of the body’s reach beyond oil into other hazardous materials.

The role he steps into will not be an unfamiliar one – he has already spent three terms on the UK Spill board, the last of which saw him chair the trade body’s technical advisory group. But he nevertheless expects to have his work cut out.

“My aim is to take UK Spill into the insurance arena and promote the use of its members for environmental claims. There is still a way to go,” he says. “Some sectors within the industry are very aware of UK Spill and have used its services to good effect. Our challenge is to take that wider, so that at the point of first notification of loss, any environmental aspects of a claim are recognised so that proactive intervention can be taken to control claims costs.”

The benefits of early intervention following a spill cannot be underestimated, according to Ower. “If a claim goes through the traditional handling process you lose the opportunity to influence the very early stage of the incident. It’s during the so-called ‘emergency phase’ that you have [the ability] to influence the severity of the incidents, to control claims costs and also to protect the reputation of your client,” he says.

Excellent track record
As evidence of this, Ower points to OHES’ own record. In 13 years and more than 8000 claims managed, it has never had a client prosecuted for causing pollution – despite some very significant pollution being caused, he says.

While not wanting to tempt fate, he attributes this unblemished record to proactive management, particularly during the emergency phase of the claim “to protect the environment, thereby reducing the risk of pollution occurring, reducing the risk of prosecution for our client and reducing the claims spend for the insurer”.

Though he intends to approach all tasks with equal fervour, one UK Spill objective particularly close to Ower’s heart is the establishment of an accreditation module for chemical spill responders, designed to highlight the types of chemicals they are able to respond to.

Specialist response
While oil spillages remain the bulk of the work UK Spill members are involved with, the severity of chemical incidents means a prepared specialist response force is vital, he says: “[Chemical incidents] are fewer and farther between but when they do happen they can have a significant impact on the environment and pose a serious risk to the public.

“It is a well-regulated industry, but accidents occur and we want to make sure there are the right responders available with the right training and equipment to mobilise in the event of those incidents, as there are for oil incidents.”

The impetus for this standard came from chemical industry specialists themselves, who felt “vulnerable” because of the dearth of commercial operators capable of responding to chemical spills, Ower says.

“There is a shortage of those with the expertise and geographical coverage. Therefore, response times are far greater and there is more damage and potentially higher claims costs in that initial phase,” he says.

Ower’s journey to a major broker has been an eventful one. After completing a degree in biology, he first entered the food industry, joining a poultry processing plant in Bury St Edmunds as a graduate production manager.

“It wasn’t the most pleasant environment – there were 32,000 chickens a day. But it had a very good management trainee scheme and it was a unique environment to work in,” he says.

He then joined the National Rivers Authority, where his role was to investigate incidents where rivers and streams had become polluted, and prosecute those responsible.

Ower’s next move took him to the Environment Agency where he broadened his remit to include incident management, and found himself working extensively with the fire and rescue service to educate them on the environmental impact of fire-fighting methods.

“At that time [firefighters] were responding to incidents where the environment was an aspect of it and sometimes their actions, such as hosing things away, were actually making the damage worse,” he explains.

“We spent a lot of time educating the fire service that there’s no such place as ‘away’. The water goes somewhere.”

He adds: “I spent a lot of time at the Fire Service College in Moreton-in-Marsh [Gloucestershire] training specialist fire officers on how to deal with incidents with an environmental aspect [and] I wrote a lot of the courses that the fire service still uses.”

It was during this role that Ower first came into contact with his future employer.

“My role at the Environment Agency was to provide equipment and specialist vehicles to the fire service, and that took me into speaking at conferences about that subject. One day I went right into the lion’s den to speak to a group of oil distributors about the new oil storage regulations. Their insurance broker was there, which happened to be Oamps.

“They felt my skills matched their need for a specialist insurance scheme they had running and the rest is history,” he explains.

What became OHES Environmental was initially established as a field extension of the Oamps claims team, which insured the majority of independent oil distributers in the UK and had claims management authority for the scheme at the time.

Specialist field team
Recognising that a number of claim types were resulting in large losses – particularly costly spillage claims – a decision was taken to set up a field team that would be involved in managing claims from the very early stages.

Ower says: “The service was embedded and because clients recognised that, when they had a spillage they phoned within minutes. We noticed spillage claims costs coming down, client retention going up and ultimately the insurance scheme becoming more profitable.”

The scheme was such a success that OHES decided to work commercially for some of the loss adjuster partners it had been working with previously on the Oamps scheme, which opened up a new avenue dealing with oil loss claims, mainly for private individuals’ premises.

After initially covering the whole country from the office in his spare bedroom, an encounter between a household pet and a senior industry figure alerted him to the fact that this arrangement was no longer tenable, he says.

“My dog ate the QBE claims director’s sandwich off his lap when he was sitting in my bedroom office and that was the turning point when we decided, ‘right, we need a proper office’.”

While OHES has seen significant growth from the one-man band to the 80 staff it now employs, joining the Gallagher stable presents the opportunity to expand its remit even further. And although some may consider the environmental outfit a strange fit within the global broker, it is actually a natural fit – particularly with Gallagher’s direct brand Pen Underwriting, Ower says.

“Our exciting challenge and opportunity is to look at how we can use our skills and expertise across the different offerings within Pen Underwriting to see where it would be appropriate for the client base to have some environmental knowledge and access to that emergency response to an environmental incident. There may be many sectors we haven’t been working with because we have previously been focused on Oamps petrochemical,” he says.

Although the opportunity over the long term is “open-ended” the initial plan is to “look for matches within the existing portfolio to see where our services would be appropriate, add value and differentiate the product,” Ower says.

Outsourcing avoidance
The underwriting side is not the only place where Ower hopes to deploy his team’s environmental expertise. “Looking more widely within the Gallagher group it’s something we’re able to offer to other parts of the business, working with Gallagher Bassett, for example, on managing claims where it wouldn’t have had in-house environmental expertise before and would probably have had to outsource.”

Along with its insurance services, OHES also plans to launch a new series of commercial products targeted at end clients.

Ower says: “One is our 123 Spill Response product, which is an advice and spillage response service. We give that away for free. It is there to establish links with industry so we can move into another product called Spill Protect, designed to reduce the risk of spillages occurring and mitigate the damage should one occur. [It includes] things like the environmental risk management audit to do a health check on their site, to produce an incident response plan for the site and to provide them with spillage equipment to allow them to manage small spillages themselves with telephone advice.”

He adds: “We are also continuing the environmental monitoring we do, working with companies to monitor their water discharges from a site on a routine basis. We do a lot of work with airports and then provide the reactive side should there be a problem.”

One thing Ower certainly expects to be is busy. While the environment was at one time a niche issue, increasingly stringent standards have seen it move up the agenda and led many companies to take a more proactive approach to managing their own risk.

“A lot of companies are now accredited under ISO 14001 and environmental compliance is a major part of that. It’s giving people a competitive edge so more and more companies are taking that route and looking at their organisations more proactively,” he says.

“An environmental prosecution is not good to see on a company’s trading history and is something that is asked about during most tenders now. So if you’re a supplier to a much larger chain, it’s one of those things that is [highlighted]. So we’re seeing a greater awareness of environmental issues.”

This article was published in the 5 February edition of Post magazine.