DII Dallas Insurance Insider
Five Dangerous Myths of Network Security A Deeper Look at The Ponemon Cost of Data Breach Analysis 21st Century Digital Agency IIAD’s New TRIIAD Program Digital Marketing Trends in 2015 Spring 2015
Official Publication of the Independent Insurance Agents of Dallas
TABLE OF CONTENTS
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Presidential address
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EXECUTIVE ADDRESS
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FIVE DANGEROUS MYTHS OF NETWORK SECURITY
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2015 IIAD GOLF TOURNAMENT
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INSURANCE EMPLOYMENT SERVICES
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WORKERS COMPENSATION OR NON-SUBSCRIPTION: IS THERE A THIRD OPTION?
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FIVE TIPS FOR SOCIAL MEDIA ENGAGEMENT
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LARGE VALUE PROPERTY AND EARTHQUAKE: WHAT LIMITS ARE ENOUGH?
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INSURANCE EMPLOYMENT SERVICES: TRIIAD PROGRAM
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DEFINING DIGITAL MARKETING
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DIGITAL MARKETING TRENDS IN 2015
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FEBRUARY LUNCHEON Make a Wish Send Off Party
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IIAD’S AMCL PROGRAM
young agents presidential address
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YOUNG AGENTS OF DALLAS A DEEPER LOOK AT THE PONEMON COST OF DATA BREACH ANALYSIS IIAD MEMBERSHIP BENEFITS
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IIAD’S NEW MEMBERS
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21ST CENTURY DIGITAL AGENCY
IF YOU ARE INTERESTED IN CONTRIBUTING AN ARTICLE, PLEASE CONTACT ELIZABETH NELSON AT 214-217-2900 OR ELIZABETH@IIADALLAS.ORG 3
© 2014 Texas Mutual Insurance Company
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We have chosen wisely as independent agents anD the fruits of our labor are abundant and rewarding
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exas Agents like most Independent Agents across America have advanced their agencies with technological change to help stream line their processes and beef up profitability.
However, I have stated many times to my Staff that nothing happens service wise or process wise until a “Sale Happens” which in turn kick starts Agency service activity. We are merely kidding ourselves to think that we are a service organization first. Independent Agents bring Value to their Agency when we establish a culture of sales that permeates the very being and fabric of our Agency Operations. When we lose sight of that we begin the demise of our operation and the slow path of diminished top line revenue and eventual bottom line disgust. I read an article recently that stated “If an agency can’t create an effective sales organization, it can’t create enough growth to satisfy its insurance carriers. And if it can’t create enough growth, the Top Producers in the Agency could very well bolt for greater opportunities”. The owners of sales-driven agencies incorporate steps to perpetuate their sales culture and enhance their growth: 1. Employ incredible talent with an inherent drive to search out prospective clients. 2. Incorporate a sales training program that helps build a solid foundation for your incredible talent. 3. Develop and implement workflows for marketing, selling and processing business. 4. Apply proper technology to manage these workflows. Somewhere at the very genesis of an agency was an individual or two that embraced a Sales Culture allowing the Agency to grow and sustain itself. Agencies must find a way to reinvent those individuals in order to continue its growth and profitability.
PRESIDENTIAL ADDRESS Independent Insurance Agents of Dallas and its Board of Directors along with its Executive Director and Staff have no better goal than to help foster the success and wellbeing of its Agent members by providing information and a platform to enhance the Sales Culture of our Agent Members and Associate Members. In turn we must be provided input via our IIAD Survey to understand the challenges and needs of our Members. I encourage all of our membership to complete our annual Survey and provide the Board of Directors information that could lead to added benefits to enhance the Prosperity of our Member Agencies. We are all Blessed to be born, live and work in a Country that allows us the freedom and independence to choose a vocation of our choice unencumbered by forces that would push us in any particular direction other than our own choosing. We have chosen wisely as Independent Agents and the fruits of our labor are abundant and rewarding; which we should never take for granted. Though we are fiercely independent we do band together as an Association for the enrichment of ourselves and one another, and in doing so we strengthen our independence in ways we could not otherwise. Thanks for your participation in IIAD.
Your presdient,
Brook CRAWFORD
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EXECUTIVE ADDRESS April is a monumental month for our work
with the Academy of Finance at Woodrow Wilson High School. In addition to InVEST volunteer teaching in the classroom, we are also hosting an Expo where students will learn about building a great resume, making a good impression with dress and interview and creating a solid future for themselves in our industry. Additionally, we are coordinating with Travelers for a Job Shadow Day, collecting donations for the WWHS Professional Dress Clothes Closet, facilitating the Myron Steves scholarship awards presentations, identifying area independent agents and carriers willing to hire summer interns and pushing the students to complete InVEST scholarship applications. Why spend so much energy and time with the Academy of Finance at WWHS? What better way to encourage young people to consider insurance as a career? The initial feedback from our recent agency survey indicates that attracting and hiring new talent is the first priority of our members.
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Many of these students will have an interest in studying insurance in college or starting an insurance job immediately upon their graduation from High School as a direct result of our members’ time spent as role models with them. Your involvement is critical to perpetuating our industry. We love our relationship with WWHS, but the need for new blood in our industry cannot be met by one school. If you have a friend, neighbor or relative that works at another school/district, please tell them about the good work we are doing at WWHS. And please keep our new IES initiative TRIIAD (Training & Recruiting for IIAD) in mind for any young people you know that are looking for a way to get into insurance. The program will license, train, educate and then place new talent in entry-level positions. Please complete your agency surveys if you have not already done so. Your input drives our initiatives. Thank you!
Your involvement is critical to perpetuating our industry.
EXECUTIVE DIRECTOR OF IIAD,
TAMMY LAND
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YOUNG AGENTS PRESIDENTIAL ADDRESS I
n March, the Young Agents of Dallas hosted the annual sponsor recognition luncheon at Bent Tree Country Club to express gratitude for the generous financial contributions and the partnership of the Young Agents annual sponsors:
AmWins, Burns and Wilcox, Chubb, CRC, Great American Insurance, Hanover, Philadelphia, Republic, Travelers, Texas Mutual, and Union Standard.
Through the assistance of the annual sponsors, the Young Agents have provided food to the homeless, Christmas gifts to needy and sick children, and facilitated networking opportunities among young professionals in the Dallas insurance industry. These accomplishments could not have happened without the unwavering support of the Dallas Young Agent committee members; a collective group of devoted, selfless, and inspirational young professionals. Our Young Agents committee members tirelessly arrange funding, discover and schedule charitable endeavors, and facilitate site preparation for events. Thank you again to everyone who selflessly donates their time:
Vice-President – David Shotts with USI Southwest; Treasury – Jason Merritt with Patterson & Associates and Jose Flores with AIG; Philanthropy – Laura Gazette with Chubb and Erin Eisenrich with Hanover; Education – Annabel Williams with AIG and Shanda Swallers with Baldwin & Cox; Recruitment – Lindsey Kluempers with Boyd, Shackelford, & Barnett, Oscar Silva with Great American, and Shaunte; Leguin with Cathey Insurance Services; Social – Jake Scott with CRC and Aaron Blain with Berkshire Hathaway Lastly, I would like to recognize Jose Flores, the 2014 Young Agent of the Year. Jose Flores was the 2013-2014 President of the Dallas Young Agents. We are grateful for your inspiration, motivation, dedication, and friendship.
Young agents president,
Gary LINDSEY
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With more than 30 of the top brokers and underwriters in Texas, providing resources to help you win business and grow is always on our to-do list. AmWINS Brokerage of Texas has expertise in a variety of industries and coverage types including: Property – all lines including catastrophe perils Casualty – all lines including energy, construction and manufacturing Financial Services – D&O, E&O, cyber and professional Energy – upstream & downstream and control of well Transportation – short haul, long haul and commercial auto Worker Injury – workers’ compensation and non-subscription (TX and OK) Binding Authorities – property, casualty, transportation and packages Contact any AmWINS Brokerage of Texas broker or underwriter for assistance.
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Email: holden@commercial-ideas.com P: 214.207.7386
INSURANCE EMPLOYMENT SERVICES Dedicated to bringing people and companies together in a working relationship IIAD STAFFING SERVICES Annual Salary
F
12% placement fee
20% placement fee
member savings
IIAD Member Rate
Other Placement Staffing Rate
$30,000.00
$3,600.00
$5,000.00
$2,400.00
$35,000.00
$4,200.00
$7,000.00
$2,800.00
$40,000.00
$4,800.00
$8,000.00
$3,200.00
$45,000.00
$5,400.00
$9,000.00
$3,600.00
Visit the Staffing Services tab at IIADallas.org for more information on job postings, job descriptions, resume and interview tips, and more.
$50,000.00
$6,000.00
$10,000.00
$4,000.00
$55,000.00
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for information, contact:
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inding the right person with the right skills and personality for your team is difficult. Posting ads, sorting through applications and resumes, conducting interviews, checking references, and testing skills takes time away from your regular duties. IES empowers you to focus on core job functions while we find you qualified workers.
JAIMEE GOEHRING, CIC, CISR IIAD STAFFING SERVICES - IES OFFICE: (214) 360-0794 FAX: (214) 360-9989 JAIMEE@IIADALLAS.ORG
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Western Security Surplus
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Cheers! © 2012 Western Security Surplus, WSS is a licensed Surplus Lines Broker and MGA dealing exclusively with licensed and appointed Retail Insurance Brokers. California Insurance License #0622580 • Texas License: #15210
University of North Texas graduates who are currently working in the Risk Management and Insurance Industry: We are building a database and network of UNT RMI alumni. Please forward your full name, position at your agency or company, email, phone number, and the year you graduated to Erin.Welch@ UNT.edu. We are calling all graduates of UNT regardless of major to enlist; more information to follow. -Ron Patterson, Patterson & Associates Class of 1972
The Young Agents of Dallas have had an impactful year from philanthropic and educational efforts to networking events. The Young Agents committee is open to insurance professionals under the age of forty. They host a brown bag lunch on the first Wednesday of every month to discuss events and assign tasks. If you are interested in joining and participating, please email Elizabeth Nelson at elizabeth@iiadallas.org to be added to the mailing list.
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A Deeper Look at The Ponemon Cost of Data Breach Analysis
Matthew Sheehan CPCU,RPLU,MLIS Vice President- Sheehan/Collins Team | CRC|Crump
T
he Ponemon Institute recently released its annual dissection of data breaches entitled 2014 Cost of Data Breach: Global Analysis. You may ascertain your own copy here: http://www-935.ibm.com/services/
likely not insurable or does not have an adequate insurance solution yet, a significant portion is still insurable. Even if the insurable costs are reduced to $150, or even $100 per record, the calculations are enough to make any prospect take notice.
The Ponemon study’s conclusions surface in the majority of Cyber/ Privacy insurance marketing materials, so it is worthwhile to take a deeper look into the study’s findings. $201 is the average cost paid for each lost or stolen record containing sensitive and confidential information in the United States, which contemplates the indirect costs of “extrapolated value of customer loss resulting from turnover or diminished customer acquisition rates.” Lost business income has had a number of coverage approaches in the Cyber marketplace, but customer attrition is hard to measure and indemnify. Evidence of a policy that has paid for customer attrition as a result of a breach, and the forensic accounting used to arrive at an indemnity payment would be welcome to lend credence to the product. Also, the number includes opportunity costs, which is lost time (often of key employees) that could have been used to grow the top or bottom line at a given business. These opportunity costs are significantly defrayed by the purchase of a Cyber/ Privacy policy as the policy supplies experts to handle post breach duties. While all of the $201 per record is
The study does not include breaches of 100,000 or more compromised records as these “are not typical of the breaches most organizations experience.” The analysis is aimed at middle market entities across the globe, and it is not speaking to large breaches like TJ Maxx, Target, or Michaels, which should make it a little more credible to your clients. With “headline breaches” excluded, the average breach costs a company in the United States $5.4 million and has 29,000 records lost or stolen.
us/en/it-services/security-services/cost-of-databreach/
Polling of professionals at the firms in the study calculated a 22% chance of a breach of ten thousand records in the next 24 months. The professionals polled most likely saw a lot less probability of a breach until they had one happen to their organization. In addition, one would think that these professionals and their respective organizations have increased the time and money spent on information security, yet they still see a significant probability of loss in spite of their heightened data security measures. Organizations in healthcare and educational sectors are left with little
excuse not to purchase Cyber/Privacy insurance. The mean breach cost per record across the globe in the study was $145, but Healthcare and Education came in at $359 and $294 per record respectively. We are still seeing both sectors opting to self-insure at an alarming rate. While most insured’s and a majority of insurance practitioners first think of hackers when trying to grapple with Cyber/Privacy exposures, only 44% of breaches in the United States are malicious or criminal with 25% due to system glitches and 31% owed to human error. Technical Safeguards and strong IT budgets can only do so much. People make mistakes, lose data, or give personal information away unintentionally. Also, of note is that the study includes lost data. Lost data may not result in any harm to the breached individuals, but in the event that no one can account for the lost data, breach response costs must be incurred according to state and federal privacy laws and regulations. While most clients have little time to devote to insurance, someone will educate them on cyber/privacy. Being proactive in educating your clients will go a long way towards loyalty and differentiation on this class of business.
Polling of professionals at the firms in the study calculated a 22% chance of a breach of ten thousand records in the next 24 months. 19
MEMBERSHIP BENEFITS Recruiting
Networking
Education
Save money by using IIAD’s in-house recruiter, Jaimee Goehring! Not only will your find your future star employee, but you’ll do it for a fraction of a traditional recruiter’s Finders Fee!
No need to search out carriers throughout the Dallas-Fort Worth metroplex, meet them at one of our networking events!
Attend our lectures and seminars held throughout the year and learn more about topics that regularly affect your business.
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We at IIAD are very proud of the services and benefits we bring to our industry. From recruiting and networking to education and young professional forums, IIAD is here to serve. Tammy Land, IIAD Executive Director
WELCOME NEW IIADIIAD MEMBERS! NEW MEMBERS ACE Group (Associate) Tim Rau 225 E. John Carpenter Freeway, Suite 1300 Irving, TX 75062 972-465-7500 Fiorella.clerke@acegroup.com ICW Group (Associate) Raeshel Parker 9442 Capital of Texas Highway North Arboretum Plaza One, Suite 500 Austin, TX 78759 940-999-1632 rparker@icwgroup.com Starr Companies (Associate) Dr. Fred Lapointe 8401 N. Central Expressway, Suite 515 Dallas, TX 75225 972-204-5005 Fred.lapointe@starrcompanies.com
Cathey Insurance Services (Agency) Shaunte LeGuin 8150 North Central Expressway, Suite 1450 Dallas, TX 75206 214-416-8681 sleguin@sbii.net Essential Insurance Concepts (Agency) John Hosea 2940 N. O’Connor #120 Irving, TX 76062 469-647-4020 john@essentialinsuranceconcepts.com MG Risk Advisors DBA MGRA (Agency) Mireya Hawthorne 10000 N. Central Expressway, Suite 290
English Insurance Group, LLC. (Agency) Chris English 2231 Ridge Rd., #200 Rockwall, TX 75087 214-893-3455 chris@englishinsgroup.com
Dallas, TX 75231
National Federation of Independent Business (Associate) Deborah Isch 400 W. 15th St., Suite 804 Austin, TX 78701 512-476-9847 Deborah.isch@nfib.org
5400 E. Mockingbird Ln, Suite 224
The Parks Group, Inc. (Associate) Lana Parks P.O. Box 1670 Arlington, TX 76004 817-608-0150 lparks@parksgroup.com
972-720-0700 Mireya.gonzalez@tx.rr.com Love Insurance Agency (Agency) Ross Love III Dallas, TX 75206 214-824-8050 ross@loveinsurance.net Weatherby-Eisenrich Insurance (Agency) Eric Bua 540 Silicon Dr., Suite 102 Southlake, TX 76092 817-578-8884 eric@weinsure4you.com
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echnology is improving and streamlining internal operations, driving efficiency and accuracy of information. It is evolving customer engagement, creating expectations for constant communication and customer servicing through multiple channels. With the insurance industry’s high rate of both organic growth and consolidation, it is essential for agencies to develop differentiated offerings to remain competitive in today’s consolidating marketplace. Simultaneously, new, non-traditional entrants are disrupting the insurance industry, forcing agents to further elevate their individualized business proposition and reiterate their value as a trusted advisor to avoid commoditization in the marketplace. To deliver this differentiated level of client service and maintain effective and efficient internal operations, the 21st century agency must continue to evolve into a digital workspace. Paper files will be replaced by digital archives. Mobile devices will deliver access to client information while away from the office. The cloud will provide increased security and flexibility for growth. And the adoption of business intelligence solutions will tap into the abundance of building data to enable more informed decision making.
Scalability, Flexibility, and Productivity To support growth goals and continue to attract and retain new clients and employees, agencies require an agency management system that delivers consistent workflows, standardized data, and a modern architecture that is scalable for growth. Consistent workflows provide universal procedures across locations and office branches, as well as simplify employee on-boarding and training. Standardized data provides a single view into an agency’s book of business, enabling them to better service their clients and identify opportunities to cross/upsell. By leveraging a modern agency management system, agencies can quickly scale business operations across multiple locations and more easily integrate acquired entities. Additionally, through digitally-driven interactions and seamless workflows, leading agencies have gone paperless – cutting costs associated with paper filing and creating additional physical space to expand their employee base. From a systems standpoint, technology like the cloud can provide agencies flexible access to information while protecting important data in a secure online environment that is not located within the physical office. Cloud solutions provide hardware,
networks, storage, services, applications and interfaces across the Internet, centralizing critical business intelligence and providing on-demand, remote access to information. By leveraging cloud technologies, insurance agencies capitalize on its benefits, including better user experiences, lower IT costs, increased business operations flexibility and stronger IT security.
21st Century Digital Agency The proliferation of digital technology into society and the global economy has begun to blur the physical and digital worlds, triggering every industry to redefine their technology strategies to maintain and grow business profitability.
A recent Accenture study also reflected this online movement when it found that 72% of consumers would prefer to research products and pricing online. The 21st century agency provides online self-service quoting and pricing for their clients, which is seamlessly linked to an agency management system for automated exchange of information. To ensure agents continue to act as the insured’s trusted advisor, insurance technology is available to document new quoting activities, triggering personal outreach from the agent to the insured for follow-up advice and product guidance. While operating a digital workplace, agencies need to maintain the personal element of their multichannel service, differentiating their business proposition from that of direct writers.
To improve agent productivity, mobile technologies are breaking down the traditional workspace dynamics and enabling agents to deliver personalized client service away from the office while maintaining access to the latest client information. By removing the need to make multiple phone calls back to the office to verify information, agencies increase employee productivity and reduce time spent on duplicative administrative tasks. Additionally, the next wave of insurance professionals are statistically more mobileconnected than any other generation, agencies leveraging mobile capabilities as part of their daily operations will attract and retain top talent to drive business growth and profitability.
Connecting with the Digital Consumer
As 21st century agencies automate internal business operations and digitalize their workplace, their clients will expect the same amount of online and mobile access to quote, renew, and document their policies and file claims. According to Bain and Company, Inc., more than 40% of Canadian P&C consumers will move purchasing behavior online in the next 3–5 years. To deliver superior online client servicing, leading Canadian insurance agencies have built out their company website and amplified their social presence to provide multichannel servicing.
Article Contribution Courtesy of
“As 21st century agencies automate internal business operations and digitalize their workplace, their clients will expect the same amount of online and mobile access to quote, renew, and document their policies and file claims.” 23
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continued from page 23 “Business intelligence solutions enable agencies to change criteria on the fly and drill deeper into a segment of the business or a subject matter to obtain greater business insights, as well as offer predictive statistical models to estimate likely future outcomes.” Leveraging Digital Data
For 2014, Gartner predicted that business intelligence and analytics would remain CIO’s top technology priority. With the exponential growth of data, leading agencies are now evaluating ways to extract and analyze pre-existing data in an intuitive visual format to make more informed business decisions. Agencies can evaluate their book of business, enabling them to better understand retention rates, growth markets, and leading lines of business. Business intelligence solutions also provide information about business metrics such as how efficiently is the business operating, how quickly are tasks being completed, workflow bottlenecks, and which employees are hitting sales goals. Business intelligence builds upon the capabilities of the traditional reporting that agencies have relied on to date. Whereas traditional reporting allows agencies to examine “what happened” using data based on a defined set of criteria at a specific moment in time; advanced business intelligence solutions allow agencies to study “why something happened” by using visual representations of their data that are interactive and dynamic. Business intelligence solutions enable agencies to change criteria on the fly and drill deeper into a segment of the business or a subject matter to obtain greater business insights, as well as offer predictive statistical models to estimate likely future outcomes. Today, the agency channel needs to harness the benefits of advanced technology to manage their businesses. Insurance consumers expect greater access to information and more control over their decisions, while insurers continually seek new and better ways to market and sell insurance products. The future of insurance will be shaped by independent agencies ability to lower the cost required to sustain revenue growth and properly service their clients. By implementing technology innovations and becoming a 21st century digital agency, independent agencies enhance an organization’s growth, profitability and agility both now and in the future.
Agency Gone Digital
Swingle Collins & Associates, one of the largest independent Commercial & Personal insurance agencies in Texas, focuses on providing key benefits to businesses and families, providing customized coverage, the best claims representation, and the finest customer service – all while keeping premiums low. To enhance customer service options, Swingle Collins & Associates employs advanced technology to streamline tasks, automate carrier communications, and provide online client self-service capabilities, successfully modernizing daily business operations and creating a paperless work environment.
Increasingly, Swingle Collins & Associate’s clients expect sophisticated technology and capabilities, including on-demand self-service for insurance policy information and certificate management. “Time is a valuable commodity, and we understand that it is not always practical to wait for a certificate request to be processed,” said Frank Swingle, founder and president of Swingle Collins & Associates. “Through our Certificate Services, our agents are able to extend this amenity to our valued clients 24/7 by providing a time-effective means to obtain certificates of insurance. In addition to the daily convenience of being able to issue a certificate online, this unique service allows our customers to manage their business in a hassle free and organized fashion, something that is increasingly important as policy renewal time approaches.”
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Workers Compensation or Non- Subscription: Is There A Third Option?
W
hat is Workers Compensation? Simply, it is an Occupation Injury Benefit Program with the benefits determined by the state.
What is Non-Subscription: an Occupational Injury Benefit Program with the benefits determined by the Employer. If the explanation is this simple, why is Nonsubscription considered so complicated? Let’s go back to the beginning. If you look up “Non- Subscription” or “Non- Subscriber” in the dictionary or Wikipedia, you will find those words do not exist. They were made up in the 1980’s to describe employers who did not purchase Workers Compensation (WC).
Whoever made up those words did a lousy job. Why would anyone begin a word with the term “non”, a term that can be defined as “against”? What was non-subscription supposed to be “against”? Some agencies felt non-subscription was “against WC”, and thus could not support it, especially with an aggregate policy limit that still prevails today. Other felt they needed to support non-subscription to provide employers an option. CPro Associates, Inc. and our A+ XV partner decided to eliminate the old terms and start from scratch. If WC is truly an occupational injury benefit program with the benefits determined by each state, then any Agency should feel comfortable working with an occupational injury benefit program with benefits determined
by the Employer and no policy aggregate. We started with the name. We are anything but a traditional non- subscriber benefit program: we are “The CPro Texas Option”. 33% of all Texas employers—Companies like WalMart and Home Depot, Baylor and Hermann Hospitals, Neiman Marcus and Macy’s, Sonic and McDonald’s, as well as your local garage, the nearest manufacturing or machine shop, and the Bar-B-Q restaurant just down the street--chose an option other than WC; the three main ones being: 1. Pricing generally 25-40% less than WC, even for credit mod accounts 2. Adoption of advanced risk management techniques and claims control generally unavailable within the WC system 3. WC experience mods drop off after 3 years. Debit mod accounts love this feature. We also looked at the five main reasons we found Employers choose WC:
1. Contractually or legally (i.e. public entities) required to carry WC 2. Agent/Insured unaware that another option exists 3. Insufficient protection to employer for legal liability claims 4. Insufficient benefits to injured employees 5. Participating in a WC dividend plan
A comparison with WC is beyond the occurrence, one employee’s benefit scope of this Article, but it is easily does not reduce benefits to another acknowledged that WC provides employee involved in the same certain unparalleled occupational occurrence. “The CPro Texas injury benefits: among them lifetime Option” provides every employee medical and 401 week disability their own individual benefits. benefits for total disability. Clearly - WC does not have an the more hazardous classes should aggregate: neither does “The CPro never consider anything other than Texas Option”. WC. In CPro’s estimation, those - Under WC, the EL section protects the employer on a per classes include, but are not limited to, person basis, and usually at a certain oil and gas classes, airlines, maximum of $1,000,000. “The CPro things that go “boom” (refineries, Texas Option” provides legal liability explosive mfg., etc.) and height protection to the Employer on a per exposures above two stories (roofers, person basis. With the maximum etc.). Because we feel these classes $5,000,000 limit and a 20 person should remain with WC, we do not occurrence, up to $100,000,000 of offer “The CPro Texas Option” to legal liability them. ($5mil x 20 employees) would be available to the employer. To provide the greatest benefit to both large and small non- hazardous “The CPro Texas Option” is employers who are focused on not a substitute for WC. It is an employee safety, reduced expenses Occupational Injury Benefit and excellent employee benefits, Program that provides options not there was much we learned from generally available within the WC WC to simplify and update a system, such as: quarter century old product. What we adopted into “The CPro Texas - WC provides disability Option” are: benefits of up to 70% (75% for employees making less than WC provides benefits for $8.50/hour) of the average weekly medical, disability, death, and wage. “The CPro Texas Option” employers liability. So does “The allows the employer to choose CPro Texas Option”. benefit levels from 70% to 90%. - WC provides No Dollar - The current maximum Limit Medical. “The CPro Texas weekly disability limit under WC is Option” also provides “No $861. For higher wage industries, Dollar Limit” Medical. “The CPro Texas Option” provides - Each benefit has its own weekly benefits up to $1,000. limits; one benefit does not reduce - WC provides up to 401 any other. “The CPro weeks of disability benefits for total Texas Option” also provides separate disability. “The CPro limits for each benefit. Texas Option” provides the - Under WC, every employee employer choices of 2, 3, or 5 year has their own benefits. In a common benefit periods. -
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Legal liability claims under WC must be filed in the courts. “The CPro Texas Option” provides mandatory arbitration. Under WC, legal liability requires a death and gross negligence. For employers not purchasing WC, to have legal liability, an employer’s negligence must be the proximate cause of the injury.
Both are high bars but WC is higher. Arbitration is one of the advanced risk management techniques used by “The CPro Texas Option”. No article can provide a comprehensive overview of “The CPro Texas Option”. This discussion did not even touch upon the advanced risk management and claims handling techniques that allow “The CPro Texas Option” to offer an Aristocratic Product at a Democratic price: priced competitively with traditional non- subscriber products, even with “The CPro Texas Option’s” significantly enhanced benefits, and up to 25%40% less than WC. For additional information, or to schedule a meeting to discuss “The CPro Texas Option” in greater detail, contact Alan Hardin at ahardin@cproassociates.com. Alan Hardin is CEO of CPro Associates, Inc., an MGA specializing in “The CPro Texas Option” Occupational Injury Plan and large account three year WC policies.
ahardin@cproassociates.com 214-673-3798 www.cproassociates.com
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Following is a rule of thumb presuming that the PML method is the best practice method short of an engineering study. Example follows: a high-rise building located in an earthquake prone area (Rule of Thumb: within one hundred miles of an active fault line.) The building value is sixty million dollars and has a single foundation. PML underwriting attempts to estimate or nominate the probable maximum damage and cost associated with the repair. In this case the PML is between ten and fifteen percent of the Total Insurable Value. Hence, on this building the exposure is expected to be between a six and nine million-dollar maximum. Consequently, a maximum earthquake limit between six and nine million dollars would be recommended, but not qualified in the Proposal. Keep in mind that this example assumes to be located upon or within one hundred miles of a fault line. The PML damage estimate is based on an event of 6.0 to 7.0 magnitude. Experience suggests that building damages begin to appear at 6.0 depending on age and construction. This scenario contemplates a five percent of value deductible. As a point of information, no significant earthquake event has triggered insured claims or damages in the U S since 1992. None have ever occurred or been paid in Texas according to my sources. On buildings and locations that are not a single foundation, the exposures can increase exponentially. For example, take a condominium association located in Dallas with a Total Insurable Value of thirty million dollars and seventy-six buildings. The average building value is $394,000. At a five percent deductible per
building, the deductible would be $19,736. The overall aggregate deductible would be 1.5 million dollars. Presuming that the foundation cost on a single building is eighteen percent (my number), the exposure to damaged or totaled foundations would be about around five million dollars. overall total or $70,000 per building. Worst-case scenario, if an event damaged foundations to the extent that it triggered a tear down and rebuild, the fifty thousand dollars collected after deductible (per building) would be woefully deficient. If this were a result of ordinance, it would open a second area of discussion, which I am not addressing here. The exposure to underwriters in this scenario is much greater, hence, the cost for a million dollar primary DIC Policy would be higher, even prohibitive, and the capacity would be limited. According to my limited research, the average consumer of a single building buys an earthquake limit between two and half and five million dollars, which is usually between five and ten percent of the Total Insurable Value. The average consumer on a property with multiple or many buildings generally buys a basic one million dollar earthquake Limit and the cost is usually between five thousand and ten thousand dollars annually for that primary DIC Policy. My personal opinion is that we are 2,000 miles east of California and 600 miles west of New Madrid on the North American Tectonic Plate and have never been classified as an earthquake zone by the USGS. We have never had a case of minor earthquake damage to buildings in recorded history. DIC Coverage is not usually required by Lenders or Owners.
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Texas Non-Subscription A Texan Has the Right To Choose an Alternative Form of Workers’ Compensation!
800.800.4007 txns@midman.com midlandsmgt.com
challenged IIAD members brains with his engaging topic about emerging issues. Charlie briefly touched on nanotechnology, smart cars, and the NFL.
2015 February Member Luncheon: IIAD Members Support Make a Wish Recipient with Send Off Party
Breana Bladel, IIAD’s Make-a-Wish grant recipient, was in attendance with her mother, father, two sisters, and Make-a-Wish representative. IIAD Members wore pink and decked out the Oak Room at the Bent Tree Country Club in recognition of Breana’s heart replacement that took place last year. The IIAD Board of Directors presented gifts to her, including a $500 gift card for her trip to Disneyworld. IIAD’s send off party also featured Janet Bernstein, who sang her rendition of “A Whole New World”.
At the 2015 February Member Luncheon, IIAD had a few special guests present. First was Matthew Sheahen IIAD is proud to sponsor the Bladel family’s trip to with CRC, who instructed the continuing education Disneyworld and wishes them happiness and prosperity in course. Charlie Kingdollar, Vice President and Emerging the future. Thank you, IIAD members, for your continued Issues Officer at Gen Re, was the guest speaker and he philanthropic support of our community.
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Tammy Land
Executive Director of IIAD
Jaimee Goehring
Director of Insurance Employment Services
Elizabeth Nelson
Marketing and Communications Director of IIAD
ACCOUNT MANAGER COMMERCIAL LINES
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IIAD’s Account Manager Certification Program is a blend of online and classroom training courses that will set the foundation of knowledge about Commercial lines that a new Account Manager needs to be successful in an independent agency. Each track includes online training, provided by WebCE, intended to cover an overview of the lines and two ½ day classroom courses taught by experienced IIAD members discussing the lines in more detail; adding real-world experience and examples to the concepts. Participants will need to complete the WebCE 7-hour online training first; then, register for two separate half-day sessions of classroom trainings taking place at the IIAD Conference Center. AMCL costs $300 for IIAD members and $450 for others. For more information, visit www.IIADallas.org 37
Get Lower Workers’ Comp Premiums for Your Construction Clients. Earn a $100 * Bonus. Place your Texas Mutual insureds into a Texas Construction Association (TCA) safety group, and receive $100! TCA safety groups save your clients money and build your loyal customer base — you keep all the commission and control of the account. 1. If your client is not already a TCA member, they can join TCA direct. Fill out the TCA membership application at txconstructionwc.com. Membership dues start as low as $200/year. 2. Submit a workers’ comp application directly to Texas Mutual Insurance Company, and ask them to quote it in the TCA group. * $50 for the producer/$50 for the CSR
txconstructionwc.com Gina O’Hara: info@txconstructionwc.com • 888.275.2626, ext. 6324
INDEX TO ADVERTISERS
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MYRON STEVES www.myronsteves.com
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CRC | CRC CRUMP www.crcins.com
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TEXAS MUTUAL www.texasmutual.com
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MIDLANDS www.midlandsmgt.coM
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HULL & CO www.hullco.com
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AMERISAFE www.AMERSAFE.COM
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GENESIS RESOURCES www.genesisresources.com
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chubb
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BURNS & WILCOX www.burnsandwilcox.com
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u.s. risK www.usrisk.com
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AmWINS BROKERAGE OF TEXAS www.amwins.com
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texas construction association www.texcon.org
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Commercial ideas WWW.commideas.com
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SERVICE LLOYDS INSURANCE COMPANY www.servicelloyds.com
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western security surplUS www.wssib.com
THE DALLAS INSURANCE INSIDER IS DESIGNED,
AMTRUST www.amtrustgroup.com
FOR ADVERTISING READERSHIP, INQUIRIES, AND
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www.chubb.com
EDITED, AND PUBLISHED BY ELIZABETH NELSON. ARTICLE SUBMISSIONS, PLEASE CONTACT 214-217-2900 OR ELIZABETH@IIADALLAS.ORG.
We’re still the same Texas workers compensation carrier you have counted on for over 30 years.
We’ve just updated our look. To learn more about our company call (800) 299-6977 or visit www.servicelloyds.com.