Sound Policy: For aerospace giant Embraer, ‘the easy part is to buy insurance’

Brian Amaral (Host)
Every 10 seconds in an Embraer airplane takes to the skies somewhere in the world. And to help get them there, Embraer must navigate a growing set of complexities and challenges, from supply chains to regulatory requirements. A team of professionals based in Brazil and elsewhere is helping the company do that, and we are delighted to welcome one of those professionals to the Sound Policy podcast today. Juliana Fernandez Loiacono is a global insurance manager for Embraer, and she joins the show today. Juliana, thanks so much for being here.

Juliana Fernandez Loiacono (Guest)
Thank you. Thank you for having me.

Brian Amaral (Host)
So, you are the global insurance manager for Embraer, which is one of the leaders in, in aerospace, also an iconic company of Brazil. It sounds like an interesting job. What's your day-to-day?

Juliana Fernandez Loiacono (Guest)
My day-to-day business, it's not as interesting as being inside of the manufacturing side. I'm mostly at the São Paulo office working in front of a computer. But one of my biggest challenges is trying to understand the business inside the factory. So, I spend my days reaching out to our engineers, my colleagues working at the factory to understand what they're doing—the new projects—and trying to understand better what we do and make sure that we are covered, regarding the, the coverages that we have on our policies. And making sure that our partners and insurers understand what we do. Because as probably you may know, we don't only build aircraft. We do a lot of other things as well. So, that's my main job, trying to understand everything that we do.

Brian Amaral (Host)
How did you get involved in this line of work?

Juliana Fernandez Loiacono (Guest)
I'm a fashion designer who decided to work with insurance 10 years ago. My dad works with insurance and have been working with insurance for his whole life. And since I had this particular major, I wanted to do something different, but I didn't know what to do, so, I just asked him if I could work with insurance. And he said, “Yes, sure.” I mean, it's not easy. You don’t–I didn't have the background. I didn't understand anything about insurance. But he said, if you want to do it, I may introduce you to some people and I can help you get a job. And that's what he did. I got in a school to understand a little bit about insurance. And then he helped me get my first job. And 10 years later, here I am, working at Embraer, and it is pretty amazing because I never would have imagined being here. I started working in an insurance company, and then I got to understand that the clients also have an insurance department inside the company. And that, for me, was something that looked very, I don't know, cool and interesting. I was interested in learning more about insurance.

Brian Amaral (Host)
Fashion design. Is there anything that you learned from fashion design that is applicable to insurance?

Juliana Fernandez Loiacono (Guest)
Not really. I don't think so. But I think that actually having this experience before helped me be a better professional today. I came into the industry more mature. And this helped me understand a little bit better my, my strengths and where I can improve to be a better professional.

Brian Amaral (Host)
So, that sounds like there is some, something you took to this profession. Do you still do that?

Juliana Fernandez Loiacono (Guest)
And I am the most fashionable person at Embraer, for sure.

Brian Amaral (Host)
You're the most fashionable person on this podcast currently, too. So, I mean, the bar is low there. But you've cleared it with some space to give.

Juliana Fernandez Loiacono (Guest)
Ok, good to know that I'm raising the bar.

Brian Amaral (Host)
Absolutely. Absolutely. You've been at Embraer for about five years now.

Juliana Fernandez Loiacono (Guest)
Yeah.

Brian Amaral (Host)
Has that changed your perspective on the aerospace industry at all? What, what have you learned in the last five years that's maybe most surprised you?

Juliana Fernandez Loiacono (Guest)
Yes, absolutely. I mean, before joining Embraer, I enjoyed aviation as a traveler. I was actually the kind of a passenger who unfastened the seat belt as soon as the plane took off. And today, this is unimaginable. I'm always now obviously thinking about everything that goes behind the scenes. So, not only the design process, but all the work with suppliers and everything that is necessary to not actually build an aircraft, but to, to do it in the safe way. So, I'm always thinking about all the people that really contribute to, to a very disciplined work and, yeah, to, to make it safer to be on the skies.

Brian Amaral (Host)
Yeah, that seat belt. Now that you know what went into getting that in that airplane, it's probably a little bit harder to take that off mid-flight.

Juliana Fernandez Loiacono (Guest)
Yeah, I never do that. And, and when I tell this story for people who works at Embraer or in the industry, they say, “How? Why would you do that?” But I mean, I didn't think it was that important. And now, I didn't understand all the risks involved. I still don't, obviously. But it's, it’s, it’s very interesting how, how little—like, people get in planes every day, but if you are not involved in the, in the industry, sometimes it's very difficult to understand everything that's—like, why do they ask you to put your, your back seat in the straightforward position? Everything has a reason. Because the airplane was designed to take off with a certain weight, with the, with the seats in the certain position, with anything underneath. Because if something happens, you have a clear path to get out of the plane.

Brian Amaral (Host)
Do you like flying?

Juliana Fernandez Loiacono (Guest)
Yes, I do. Nowadays, it's the safest way of transport.

Brian Amaral (Host)
What do you think people misunderstand about your role, or the role in general of managing insurance for a company like Embraer?

Juliana Fernandez Loiacono (Guest)
Mostly people think that it's only buying insurance and handling claims. But as I said, it's way more than that, right? I, I spend most of my time trying to understand what we do, and not only reading the, the, the conditions on my policy and handling claims, because thankfully we don't, we don’t have that many claims at Embraer. But yeah, most of the time, I'm talking to people— from the, from the manufacturing sites, from the engineering teams. I read a lot of contracts. I need to review what we are negotiating with our suppliers, our clients. So, insurance is the last line of defense. And we actually try to deal with it as we don't have it, because I don't want to use it. So, yeah, the, the easy part is to buy insurance. The hard part is to really understand the different operations that we have, because it's a lot of things that we do.

Brian Amaral (Host)
There is a phrase I saw in doing research for this podcast on Embraer's website, “Ready for the future.” What does that mean for you, being ready for the future?

Juliana Fernandez Loiacono (Guest)
Being ready for the future is being ready to embrace the challenges that are coming. I think we work in a very complex and, and innovative industry. So, we need to be ready to face the challenges and keep doing the things that we do, keeping safety first and quality always. That is another model that we have at Embraer. So, it's very challenging to—trying to build new technologies, but keeping that in mind, that we always have to keep safety first and quality always.

Brian Amaral (Host)
What are some of those challenges? What are the big ones that you're thinking about right now?

Juliana Fernandez Loiacono (Guest)
I mean, electrification, obviously. We are developing the eVTOLs. So, we need to understand how to better storage the batteries, for instance. So, this is something that is one of our challenges, right, trying to understand the people that are working on this project, what they are trying to do, where they are building these aircraft, or where they want to storage the batteries. And we work together with them to—not say what they should do—but make it easier for them to make better decisions and safer decisions.

Brian Amaral (Host)
You said EVTOL. What is an eVTOL?

Juliana Fernandez Loiacono (Guest)
eVTOL, it’s a branch of Embraer. We have a company called Eve, and they are developing this, this vehicle that is supposed to change the air mobility in the big cities.

Brian Amaral (Host)
What do they look like?

Juliana Fernandez Loiacono (Guest)
They look like a helicopter, yeah. And they will be using the existing helipads in the big cities. But they are more silent than the helicopters.

Brian Amaral (Host)
And they run on electricity. They don't use jet fuel. They don't use the typical fuel that people are accustomed to. Speaking of electrification, there's sustainability challenges. There's sustainability opportunities. How is that playing out at Embraer? The sustainability questions?

Juliana Fernandez Loiacono (Guest)
ESG in general is very important for Embraer. I think that more and more, the, the investors, stakeholders, insurers, and customers, they want more transparency regarding sustainability, governance, operational resilience. So, this is something that is very embedded in, in Embraer. I work very closely with the manager of ESG and FM as well, to understand how the world is changing, the climate, et cetera. So, we want to be prepared for what's coming. And we want people to understand how Embraer deals with this topic. Publicly, Embraer uses internationally frameworks to, to, to show how we are dealing with these, and we have working on a lot of different fronts to, to be a better company for the future.

Brian Amaral (Host)
You also mentioned supply chain earlier. How are supply chains in aerospace changing right now? And how is that posing challenges?

Juliana Fernandez Loiacono (Guest)
Supply chain is a very subject that every year it has a different challenge. We, we always have a specific product that it’s, is difficult to get on time because everyone has the same suppliers, right? So, the supply chain is very diverse, dynamic, and everyone uses the same. So, we have been learning that we need to work closely to, to the key suppliers to understand their difficulties, to help them be better and try to, to deliver the, the part on time. So, it's not something that, oh, this one is not working, I'm going to change. Because it's not like that, right? The technology is very complex. It takes a lot of years to build a new engine or a specific windshield. So, we need to see our suppliers as partners and work very closely with them. They, they are part of Embraer, right, so we need to be there. That’s why we have, like, special groups from Embraer. They go inside of the supplier to help them understand what is going on, right? Not what they are doing wrong, but what’s happening and how can we help you be better, deliver on time, and not only trying to change a supplier or moving from one supplier to another. So, it is a very collaborative work between Embraer and all the suppliers, actually, because we have to be ready and plan ahead if something happens, and be ready for possible disruptions inside the supply chain. So, that's why it's very important to work very closely with them, and actually to, to work with them as they are part of Embraer.

Brian Amaral (Host)
Yeah, you mentioned seat belts. And I'm just thinking of the seat belt supply chain. I mean, you never—you don't really think about that when you step on an airplane, about every little thing that goes into it. Is there one particular part of it that really surprised you when you learned, wow, that is a, that is such an important part of the airplane.

Juliana Fernandez Loiacono (Guest)
I never thought about the seat belt, but I mentioned the windshield. This is something that, right—you think that it's easy. But we don't have that many of suppliers supplying the windshield. And it's something that, obviously, it's very important as well. I mean, nothing can, nothing can go wrong. Nothing can go wrong.

Brian Amaral (Host)
Right. Right.

Juliana Fernandez Loiacono (Guest)
So, that's why it's very surprising for me to see how, how the work needs to be a collaboration from everyone. So, everyone needs to collaborate. Even if you have a competitor or something like that, everyone is working to do the same.

Brian Amaral (Host)
Embraer is known in the aerospace world for really strong engineering, but this is FM's podcast, so we have to talk about loss prevention engineering, too. Why is loss prevention really important to Embraer?

Juliana Fernandez Loiacono (Guest)
Because the best loss is the one that never happens. I think that insurance can help a company recover financially, but it won't help with production time, with our ability to deliver on time, and this is something that—it, it is the most important for us. I mean, we are a client-based company, so we always think about our clients first. So, that's why I think it's very important. I try to work very closely with my colleagues internally to explain. That's why we have insurance, not only to get our money back to recover financially, but also to use the expertise of FM to help us not have a loss, not have a flood, not have a fire.

Brian Amaral (Host)
And you hear that a lot, that you can't insure against certain reputational damage. You can't insure against if you lose a client, if they decide to go somewhere else. Is that particularly relevant in aerospace where…

Juliana Fernandez Loiacono (Guest)
Definitely.

Brian Amaral (Host)
…a lot of competition,  your customers are also, you know, including airlines and people with really high stakes. Is that, is that particularly challenging?

Juliana Fernandez Loiacono (Guest)
Yeah, it is. It is. It is. I think that the delivery is one of the most important parts of the, of the sale, right? They want to get a product in time. Because if they don't, they are losing money because they are not flying. So, it is very important.

Brian Amaral (Host)
Yeah, nobody likes when their flight is delayed, and nobody likes when their aircraft delivery is delayed either, I'm sure. You mentioned a little bit the work with FM on loss prevention engineering. What sorts of things are you working on these days?

Juliana Fernandez Loiacono (Guest)
We are working on different fronts. FM is very good at it, like trying to—they are always giving us idea on how to be better, how to engage better with our, with our internal customers. So, we do a lot of workshops. We do a lot of trainings. Me being here is a very important part of my job because I'm here seeing everything that you guys do in person. Having this network is very important. What else? We actually are having our second workshop for ESG internally. So, we have guys from FM coming into, into Embraer to talk with, with our ESG people and explain how—you have tools that can help us better understand the natural hazards on our sites all over the world. And actually, we had, I had a very interesting news last week regarding a simple initiative that we had two years ago. We were introduced to an FM approved product by a supplier. I think it was a, a, a vegetable-based fuel to use in our transformer. And we, we made the introduction to our leadership, explaining how the benefits of using this fuel will bring to our facility. And just last week, like two years later, I got an email from the colleague that I, I brought with me to this presentation saying that we are acquiring a transformer to use with this technology. So, this, for me, is the best part of the partnership that we have with FM. Like, a simple initiative that happened two years ago helped us make a better decision, a safer decision. So, this, for me, is very, a successful story on how we need to be resilient even in our partnership because sometimes we don't see the result right away. We need to wait like two, three years to actually see the results of everything that we're doing internally.

Brian Amaral (Host)
When people hear your title, Global Insurance Manager, do you think that they appreciate—like, everything that you just described seems so much more than: I got a policy; here are limits and deductibles, I'm going to go home. Do you think people get how, how much more it is?

Juliana Fernandez Loiacono (Guest)
I think at Embraer yes. I mean, when, when I got to Embraer, the insurance department was already known. For a lot of people—there are a lot of people that still don't know what we do. But we have—thank God we have—a good relationship with all leaders inside different sides of Embraer. So, this helps us make stick everything that we do, right? So, when we have the list of recommendations from FM, obviously, everyone's, “Oh my God, we have to do everything.” No, we don't. Right, so they, but they understand the importance of it. They understand that everything that is listed is to make us safer, is to make us better. But this is a work that needs time to, to, to get to the place that we are today. So, I think that even when FM started the partnership with Embraer like eight or nine years ago, how much we evolved during these years, it is amazing. And one of the things that I like to do, me and my team, we like to schedule a little go- and-sees with different departments of the company to introduce ourselves and to explain what we do and the different policies that we have, because we don't only handle with the property insurance, right, we handle with a lot of bigger and small programs. So, we try to explain to them what we do so they can understand and help us in the future when they have a new project coming on the way, a new logistic or operation system that they want to introduce to us to, to, to make us help them understand the gaps during the operation.

Brian Amaral (Host)
Walk us through an Embraer facility. What sorts of risks are you looking out for when you're, when you’re walking through one of these facilities?

Juliana Fernandez Loiacono (Guest)
Our facilities, they are very—like, the high technology that it is inside is very impressive, and the, all the facilities, they are very clean. It's, it’s very impressive to see like, the aircrafts being built. And when I'm looking with my property insurer eyes, I'm always looking for fire hazards, right? I know that FM has put inside my brain the importance of having sprinklers wherever, whenever we, we, we can have. But depending on, on the size. Like, in Brazil, I think we look a lot—we look to the fire hazards. In the US, obviously, the natural hazards. We have a, we have a big facility in Florida. So, the flood, hurricanes, they are very important to, to, to look for. But I like to think that we have a very safe environment.

Brian Amaral (Host)
The same way you mentioned working for Embraer, you now no longer take off your seat belts. I work for FM, so I always look for sprinklers, wherever I go.

Juliana Fernandez Loiacono (Guest)
I know. I do that as well.

Brian Amaral (Host)
I walk into a building…

Juliana Fernandez Loiacono (Guest)
I do that as well.

Brian Amaral (Host)
Do you have a favorite Embraer airplane? When you’re walking around the facilities, seeing them? I’m just, I’m just imagining, especially the big ones?

Juliana Fernandez Loiacono (Guest)
Oh yeah, the KC.

Brian Amaral (Host)
Yeah, the KC. Do you have a favorite one that you like to see…?

Juliana Fernandez Loiacono (Guest)
The KC, definitely. It is very impressive. I mean, they are all very impressive. The KC, it’s huge.

Brian Amaral (Host)
And then the eVTOLs, when those come in, it’s, it’s like both ends of the spectrum. It must be like a kind of futuristic…

Juliana Fernandez Loiacono (Guest)
Especially because they are, they are being built to, to move people from the big cities to the airport, and especially, like in São Paulo, it can take you like two hours from Guarulhos to the center of São Paulo. When we have the eVTOLs, it can take us like thirty minutes.

Brian Amaral (Host)
Not bad.

Juliana Fernandez Loiacono (Guest)
Not bad at all.

Brian Amaral (Host)
What's it like to see one of those KCs in person when it's being built? Like, walk us through what you would see if you were walking through an Embraer facility.

Juliana Fernandez Loiacono (Guest)
First of all, you would be very impressed just looking from the outside, because it is very huge. But fortunately, I had the opportunity to go inside of one of the KCs three years ago, I think. And actually, inside is not as impressive as the outside, because inside is very raw. It's very different from a, a commercial aircraft, obviously, because depending of the Air Force, they are building for a different purpose. But they have room to put many seats as they want, to put bunk beds. And it can fit even a helicopter inside of it. So, it is very raw at, at first sight. And then they are building depending on the Air Force needs. But as I said, it is very impressive, not only because of its size, but because of the, the size of the program itself. It is an aircraft that it was built in the partnership with the Brazilian Air Force. It is very impressive, right, like having an aircraft that a lot of other countries wants to have it. And it can do so many things. They have a different range of operation. And it is very interesting to see such a complex product built by Embraer and having delivered all over the world.

Brian Amaral (Host)
So, you've done this whole podcast in English. We're going to level the playing field a little bit, and I'd like to ask you a question in Portuguese. Como a Embraer deixa os brasileiros orgulhosos? [How does Embraer make Brazilians proud?]

Juliana: Ah, eu acredito que para os brasileiros saberem que nós temos uma empresa de alta tecnologia dentro do Brasil e que compete no mesmo nível de empresas como os nossos competidores é motivo de sobra para deixar todos os brasileiros orgulhosos.  [I believe that for Brazilians to know we have a high-tech company right here in Brazil that competes on the same level as our competitors is more than enough reason to make all Brazilians proud.]

Brian Amaral (Host)
Let's end this on a high note. We've talked about some of the challenges that this industry faces right now. But as you're getting ready for the future, what are you most excited about with Embraer?

Juliana Fernandez Loiacono (Guest)
I never dreamed being here where I am right now. But I think that when you work with passion and always trying to make better and make valuable, I think it can surprise you. So, working in Embraer and seeing everything that has been happening—Embraer has been growing so much—everything is happening. And I'm growing with Embraer. So, I'm just excited to be here and keep doing my job, keep doing it better, and trying to leave it better than the way that I found.

Brian Amaral (Host)
Juliana, thanks so much for being on the show.

Juliana Fernandez Loiacono (Guest)
Thank you. Thank you. It was my pleasure.

Brian Amaral (Host)
If you’d like to reach the show, email [email protected].

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