GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | OCTOBER 2019
Vermont Insurance Agents Association is a statewide trade association representing nearly 100 independent insurance agencies in Vermont, with more than 900 employees. VIAA member independent insurance agents represent more than one insurance company, and as a result, can offer clients a wider choice of auto, home, business, life and employee benefits.t
Green Mountain Agent is a publication of
CONTENT ________________ October 2019
04 Letter from the President
600 Blair Park Road, Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912
06 Evolve19
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10 Feature: Agency Operations
VIAA Officers
15 On the Hill
President Alan K. Kinney
20 E&O Corner
Vice President Dan Rodliff Secretary/Treasurer Michael Barrett
24 YAC News Brief
National Director Ron Bixby
26 Feature: Knowledge
Directors 34 Insurance Commentary
Chip Ams Erin Odell, CIC Paul Plunkett Jessica Fleury Ex-Officio
39 Company & Agency News
Staff Executive Director Mary Eversole mary@viaa.org
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LETTER FROM THE PRESIDENT ______________________________ October 2019 Thank you for the opportunity to serve as the VIAA President for the coming year. I am pleased to be working with such an engaged and enthusiastic Board of Directors who clearly have your best interests in mind! Thank you to Paul Plunkett for his leadership this past year and to Mary Eversole for her continued hard work for the association. We just completed our 113th Annual Event – Evolve 2019! This year we took a leap of faith and made significant changes the format and content and it was a resounding success. From the outstanding speakers and fun social activities, everyone valued the camaraderie and learning opportunities. A special thank you to our Sponsors and Exhibitors. Without your support, we couldn’t offer this outstanding program for our members. We’ve got a big year ahead and I look forward to continuing the traction we’ve gained in recent years to bring you the best programs, products and services available and to represent you in the Vermont legislature.
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Alan Kinney VIAA President
AGENCY OPERATIONS &O
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R E N BACKLOG SHOULD NEVER BE R O
ACCEPTABLE IN YOUR AGENCY By Kel Plasket, CPCU, AAI During most of my agency visits, there appears to be a common theme regarding backlog. When I ask, “Do you have any backlog?”, the staff looks at me as though I have asked a really stupid question. They answer something to the effect, “Of course we have backlog. This is the insurance business, isn’t it? If I were caught up, they’d only give me something else to do.” Many agencies have been backlogged for so long, it has actually become acceptable not only to the service providers, but to management as well. They no longer consider backlog a problem. For those who accurately identify backlog as a problem, they either do not know how to fix it or lack the patience to solve it. There are too many other things going on in the course of a day. By not dealing with the problem, they are in effect saying, “…we don’t have time right now to concern ourselves with our employees’ well-being, our agency’s ability to provide superior customer service, the overall agency production and revenue, or the potential E&O minefield that awaits us.” Backlog is a ticking time bomb. It may be an individual that is behind, a service team or an entire department. One person’s backlog may also create a bottleneck for other individuals or departments, depending on the process involved, which compounds the situation. In extreme circumstances, the entire agency may be affected. Backlog is normally quite obvious. It defines itself as piles of paper. This is the initial tip-off that there is a problem. It can be one large pile or numerous smaller piles neatly arranged. Some service
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providers will begin to create sub-piles from their big piles. The work doesn’t get processed any quicker this way, but in some strange way the service providers feel more organized. A major problem with all of this paper lying around is that the information has not yet been entered into the agency management system, and thus, the database has not been updated. This results in the service providers having to look through all the papers to find a specific item before they can answer a client’s question. Eventually, the service providers will find themselves going to the pile and the file for every transaction, whether they need to or not, because the integrity of the database is now in question. There are a number of consequences to an agency as a result of a processing backlog. The most costly in terms of an agency’s time, money and reputation is the increased probability of an errors and omissions claim. Unprocessed paperwork could mean a missing or inadequate coverage. It is also very difficult to provide excellent customer service
Backlog Not Acceptable continued when the client file in your system database does not provide current information. In today’s competitive marketplace given the available technology, it is almost embarrassing for an agency to be unable to provide an immediate response to a client’s request. Backlog forces the service provider to take down the client’s question or information with a promise to “…research the situation and get back to you when the policy has been located.” This response certainly distinguishes your agency from the competition, but not in the way you had hoped. Backlog has a direct effect on the staff’s morale, attitude and how they interact with the client. A frustrated service provider representing your agency will have difficulty in projecting a smiling face and happy voice to your clients. The agency’s failure to adequately address the backlog situation will ultimately result in turnover. The sad part in this scenario is that many times your best workers are routinely given more work to do than their peers and their backlog never subsides, no matter how much extra time they put in. The agency should consider the consequences of having one of its star employees leave the agency. When an agency admits it has a backlog problem and commits to resolving the issue, it normally does one of four things: Throw more people at the backlog from other parts of the agency Hire additional employees Pay overtime Arrange quiet-time All of the above solutions have inherent problems. If you add more people to help eliminate the backlog, you have not solved the underlying issue that initially created the problem. While the old piles may eventually disappear, the process has not changed to avoid the creation of new piles.
Overtime rarely works unless an on-site manager closely monitors it. Most service providers will use this time to catch up on their routine work and never hit the backlog pile. In essence, the agency pays extra for its employees to do their regular job. In order for overtime to be successful, a specific action plan must be followed that has a standard against which to measure success. Quiet-time has mixed results depending on when it is scheduled, where the work is completed, what work is completed, the number of interruptions, and how the incoming phone calls are handled during this time. If quiet-time is used, it should be scheduled for specific periods of time that coincide with the agency’s “slower” times. Monday is not a good choice. It is best if a specific pile of backlogged work is taken and completed by the service provider in a secluded office or conference room away from the normal work-space. This will help to eliminate routine interruptions and the urge to work on other transactions besides the backlog. Finally, incoming phone calls during quiet-time should be handled and completed by the other service providers. The worst thing that can happen to an individual that has successfully completed a pile of backlog is to go back to her desk and find fifteen phone messages. The feeling of accomplishment disappears immediately and the frustration reaches a higher level than it was before the quiet-time. Negative attitudes can blossom quickly. Before we can solve this spiraling, potentially endless problem of backlog, it is important to identify the reasons that created this predicament in the first place. Most agencies have made the following comments: “We need more people to do the work…we don’t have the right people…we www.viaa.org
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Backlog Not Acceptable continued need more processors…we need more training…we have too many new people… we have too much work to do…we just can’t keep up…every time I think I’m catching up, I was mistaken…we’re fighting too many fires…I can’t get control over my desk… priorities are changing every hour…we were fine until we got this new system…if they actually worked instead of talking about it, more could be accomplished…I will never be caught up so I’m not going to worry about it anymore…”. Sound familiar? The truth of the matter is, backlog is a curable disease, and it can be controlled so it never reappears. One agency I worked with led the league in backlog. They had unprocessed renewals that were six months old and unprocessed endorsements that were thirteen months old. The paper took up an equivalent of four filing drawers (an entire filing cabinet!). The agency staff were very creative in arranging their piles so that they could find the piece of paper easier. They were in transaction type order by carrier by date and further split up depending upon whether the carrier had a service center. There was so much paper they began to make notes in the system that the paper had been received and where it could be located, thinking that this work-around was actually saving them time and making things easier. In fact, all it did was create more work later. The main reason agencies develop backlog is because they do not have standardized workflows in place. The service providers handle similar transactions differently, a renewal timeline is not enforced, and “fighting fires” becomes routine. The roles between the producers, CSR’s and processors overlap, creating uncertainty as to who is ultimately responsible for completing a transaction. Service providers may also have limited authority for making 12
decisions and delegating work when appropriate. Remember the agency that had the backlog? By creating standardized workflows, assigning responsibility and holding people accountable, this agency was able to process all of its incoming mail on a daily basis and keep the workload current going forward. No new backlog was created. As time became available during normal work hours and with limited overtime, the agency worked to eliminate the existing backlog in a controlled, coordinated effort. In less than twelve weeks, the entire backlog of almost 4,000 transactions had been caught up. Talk about a miracle comeback! This agency went from last to first in less than three months. The good news is that this agency has remained current over the last six months without increasing staff. As a matter of fact, two individuals have left the agency for various reasons over the last six months, and it has not been necessary to replace them. The implementation of standardized workflows, assigning responsibility for job functions, and continuous monitoring have made all the difference. So what is the moral of the story? Any agency can eliminate its backlog as long as it is willing to implement standard workflows and embrace the changes associated with this worthwhile commitment. Those agencies that step up to the plate will experience positive results and never look back! Kel Plasket is a consultant in insurance operations. He works with agencies to increase their growth, productivity and profit through analysis, solutions and implementation. He can be contacted at 256-765-9953 or kplasket@hughes.net . The author produced this article for the Agents Council for Technology which is affiliated with the Independent Insurance Agents & Brokers of America. This article reflects the views of the author and should not be construed as an official statement of ACT.
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ON THE HILL: Big ‘I’ Reaction Mixed on Overtime Rule By Sue Nester
Members of the I Big “I", along with other employers, will have just under 100 days to comply with a final overtime rule announced yesterday by the U.S. Department of Labor (DOL). Effective January 1, 2020, the rule sets the minimum salary threshold for overtime eligibility at $35,568. The regulations implement the Fair Labor Standards Act (FLSA)'s overtime mandate and will make an estimated 1.3 million additional U.S. workers eligible for overtime pay. “While not perfect, the final rule is a significant improvement over the overtime rule proposed during the Obama administration, which would have caused a significant increase in direct compliance costs and paperwork burdens for our small business members as well as significant losses in productivity for the economy,” says Charles Symington, Big “I” senior vice president of external, industry & government affairs. “While still a challenge for many of our members, we
iappreciate that the final rule did not set any automatic updates and that employers will at least be able to count non-discretionary bonuses, incentives and commissions--up to 10% of an employee's salary--toward the threshold.” The FLSA's exemption threshold for “highly compensated employees” will be set at $107,432, lower than in DOL's initial draft but still higher than the previous threshold of $100,000. “Even with these changes, a number of our member agencies may still find it difficult to comply with these exemptions,” says Heather Eilers-Bowser, Big “I” counsel, federal government affairs. “While the new minimum thresholds for ‘white collar’ exemptions and ‘highly compensated executive’ employees are much lower than proposed during the last administration, they remain a concern for many independent agents and brokers.”
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C E O & R O N ER
DO NOT BEWARE, BE AWARE, OF SERIAL ENTREPRENEURS By Michael E. Kremen, Esq. Keidel, Weldon & Cunningham, LLP
Serial entrepreneurs are some of the best customers for insurance agents and brokers. New businesses lead to new risks to be covered, which in turn leads to more work and additional commission from premiums for agents and brokers. However, sometimes these particular gift horses prove to be just as much of a headache. In this issue of The E&O Report, we discuss a case we recently handled where the conduct of this type of client created E&O issues for the broker involved. We recently settled a lawsuit involving a broker who fulfilled the Murphy duty of care we have often written about in this space: procurement of the coverage specifically requested or informing the client in a timely fashion of the inability to do so.[1] The serial entrepreneur client, who continues to be a customer of the broker to this day, alleged when an uncovered claim occurred that the broker had taken on a further duty and failed to obtain insurance to adequately cover its businesses. In short, this client had a business selling physical stock at the time of the original procurement of the policy, which covered liability for not only the main holding company, but also for the subsidiaries doing several forms of business. Not at the first renewal, but at the second renewal, the client requested the broker add another subsidiary (practically wholly owned by the holding company) to the policy. Importantly, the client did not make clear that this subsidiary had a different business model or did anything other than what the original business did. This subsidiary was transacting business as a middleman, keeping no stock, and completing its transactions instantaneously over the internet. Not only that, the transactions were occurring at a location not listed on the policy. 20
Again, the client did not make any of this clear to the broker, nor did the client make any comments that would lead the broker to ask questions that could lead to changing the coverage provided in the renewal. During that second renewal policy period, this newly-added subsidiary experienced a loss as the result of a cyber-attack of its server. This attack did not disrupt business; in fact, the entire point of the hack was to make sure the business kept going and the hackers could piggyback on some of the transactions this subsidiary was completing in order to get value for virtually nothing (while someone else would have to pay). The hack was discovered within a 72-hour window, and the hackers were kicked out of the system and customer accounts in short order. In that short window, however, the subsidiary found itself with hundreds of thousands of dollars of invoicing that its customers would not pay, as it was not those customers who made those transactions occur. The agency's customer also claimed that the cyber-attack caused additional damages to its business amounting to several million dollars. The client, for its holding company and the injured subsidiary, submitted a claim of loss to the insurance company on the policy. After a reservation of rights and a long investigation, the insurance company declined to provide coverage for the loss. Among the reasons for the declination included there being no loss or damage to physical stock, as well as no loss at a covered location. After receiving the insurance company declination, the client then sued both the insurance company and its broker. The broker appeared to have satisfied its legal duty to the client and did nothing wrong. The
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Do not beware, be aware continued insurance company also did not appear to do anything wrong by declining to cover a loss not covered by the policy. And yet, in the end, both the broker and the insurance company paid to settle the claim from this client, albeit for a fraction of the damages claimed, in order to avoid years of litigation. The lesson that can be learned from this situation is simple. If you are faced with a client adding a new business to their commercial policy, or any other of the many transactions with a customer that occur every day, always try to get as much information concerning what the client is doing and why. Then, be sure to sufficiently document that information in the customer file. An insurance agency or brokerage that follows this practice will not only help protect itself from a potential E&O claim or lawsuit but, in the process, will also help its customer better protect itself. [1] Murphy v Kuhn, 682 N.E.2d 972 (1997). Keidel, Weldon & Cunningham, LLP concentrates its practice in the defense of insurance agentsand broker's errors and omissions claims and litigation, errors and omissions loss control counsel and education, insurance coverage analysis and litigation and insurance regulatory matters. Please direct any comments or questions to James C. Keidel, Esq. by mail to the main office of Keidel, Weldon & Cunningham, LLP, at 925 Westchester Avenue, Suite 400, White Plains, NY 10604, telephone at (914) 948-7000 or e-mail at jkeidel@kwcllp.com. The law firm also maintains offices in Syracuse, New York; New York City, New York; Wilton, Connecticut; Fair Lawn, New Jersey; Warwick, Rhode Island, Philadelphia, Pennsylvania, Williston, Vermont and Naples, Florida. Copyright 2019 Big I New York and Keidel, Weldon & Cunningham, LLP All rights reserved
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News Brief
YAC SPOTLIGHT: Sara Berry Hickok & Boardman Sara Berry grew up in the Northeast Kingdom. She studied psychology at Keene State College in NH, soon realizing that although she loved what she was studying, it wasn’t for her. She later transferred home to Lyndon State College and graduated with a Bachelor’s Degree in Business Administration. In 2013 she was looking to upgrade from a late-night store clerk position to a career based industry. Her mother helped to push her towards interviewing with Poulos Insurance, a local agency where she was able to put her motivated, energetic personality to good use. Sara explains, “What they say about people falling into the industry is true, I never dreamed of being an insurance agent but here I am!” In 2015 Sara had the chance to interview with Hickok & Boardman which she describes as being a great career move. She uses her friendly, determined, on the go (more often than not fueled by Dunkin Donuts Iced Coffee) personality to help clients & colleagues alike. After speaking with Mary Eversole, the Executive Director of the VIAA, Sara decided she wanted to pursue becoming a part of the Young Agents Committee. She has worked in 24
the past with the Make-A-Wish walk organized by fellow members. She planned & volunteered at the Young Agent’s community service day for the Vermont Foodbank in April. Most recently she had the opportunity to go the Savannah, GA to represent the Vermont YACs for the annual BIG “I” Convention. With her driven personality, she recently was offered and has accepted the position of Co-Chair for the upcoming year. Currently, Sara lives in Williston VT where she enjoys painting, photography and spending time with family & friends. She is continuing her path of growing in the insurance industry and maintaining her work/life balance as a young career woman.
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Outside the Lines: Should Your Agency Write E&S?
KNOWLEDGE
By Jacquelyn Connelly An insured comes to you with an excess & surplus lines construction product from a competitor agent. The insured is based in northern New Jersey but makes most of their revenue working in the five boroughs and surrounding counties. You review their policy—and discover it contains territory exclusions for New York. Sean Hickey, p-c practice leader and executive vice president, Rose & Kiernan, Inc., a Best Practices Agency headquartered in East Greenbush, New York, sums it up nicely: “When you have to look a prospect in the eye and ask them how they feel about the fact that they just bought a donut hole, it makes you think to yourself, ‘How can anybody make that sale in good conscience?’” But in a market segment known for unstandardized forms, scenarios like this are more common than you’d think. “Because the E&S market affords underwriters the opportunity to craft a bespoke solution for a client, sometimes those solutions are well-priced and exceptionally broad, and other times they are well-priced and extraordinarily restrictive,” Hickey points out. “The broker’s job is to differentiate.” As a top 50 privately held broker, Rose & Kiernan is licensed to write E&S business in all 50 U.S. states as well as internationally. The agency handles E&S business through its professional brokering practice, which is staffed by insurance technicians who have deep experience in the E&S marketplace. “Any time you make a submission in the E&S market, the hallmark of any solution 26
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you put together has to be broker diligence,” Hickey says. “That means understanding the fit of the product for the clients’ needs, and that takes on a multifaceted complexion—it’s pricing, it’s retentions, it’s total cost of risk, it’s breadth of coverage and it’s the ability of the product to meet its intended purpose.” E&S makes up 13% of total commercial lines revenue at the average independent agency, according to the 2018 Future One Agency Universe Study. Among agencies with revenue from E&S products, an average 62% have producers who are licensed to write E&S, ranging from 59% among small-midsize agencies to 85% among jumbo agencies. That’s significantly higher than in 2016 [see sidebar]. Looking to expand your E&S book this year? In this market, sky’s the limit, but you’re not likely to succeed without the requisite technical expertise—as Hickey puts it, a deep understanding of “what’s in the soup.” State of the Market Jim Lynch, chief actuary, vice president of research and education, Insurance Information Institute, observes that ebbs and flows in the E&S market are closely linked to the broader insurance market cycle. “The E&S base typically starts to grow when you go into a hard market cycle, because agents have to find new markets for risks they traditionally were able to place with standard markets,” Lynch explains. “We’re not in a hard market yet, but the market is definitely firming.”
KNOWLEDGE
Should Your Agency Write E&S? continued “What we’ve seen recently is a tightening of some of the appetites within the standard market, as well as some rate increase,” agrees Bryan Sanders, president of U.S. insurance, Markel, who also points to a reduction in the amount of standard carrier appointments within the current insurance marketplace.
“You see a higher level of innovation and creativity in the E&S market,” Hickey agrees. “Because those carriers are free from the regulatory irons that sometimes constrain carriers from developing products in the standard market, the E&S market has not only filled a void but also kept pace with emerging risks.”
That has led independent agents to “look elsewhere for solutions,” Sanders says, noting that E&S remains a particularly appealing option in states like California, Florida, Texas, New York and Louisiana thanks to several severe catastrophe seasons back to back.
The Benefits
“Anybody who writes on the coasts knows the challenges of trying to procure and build balance sheet protection for a client around their fixed assets,” Hickey agrees. “More and more standard carriers don’t want to write that business with the same program architecture, pricing and terms and conditions that may have been available a decade ago.” In California, for example, “insurance companies aren’t able to achieve the rates they need” in the wake of severe wildfire losses, Lynch notes—and “if you can’t get the rate to write a piece of property, you don’t write that property. There will be a number of policies that get non-renewed, and they’ll have to seek coverage elsewhere.” Similarly, in independent agent Krystal Lugg’s South Florida locale, “property insurance has historically been E&Scentered,” she says. And certain classes “will probably always remain E&S”—highhazard classes, those with frequent losses, and emerging lines like cyber, where “admitted carriers are struggling to keep up with the filings.”
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Lynch cites private flood as another area ripe for E&S involvement in the coming years; Sanders points to classes like nursing homes, product manufacturing, transactional liability and environmental, particularly risks that involve heavy trucking. From difficult classes and accounts with poor loss history to extraordinary limits and elements like named storm for coastal property owners, “the surplus market can address coverage issues the standard market will not,” says risk management consultant James R. Mahurin, who has provided fee-only risk management and insurance consulting services to insureds since 1984. Plus, because E&S business tends to be more severity-driven, “it has historically been very, very profitable,” Hickey points out. “It’s outperformed standard p-c lines as a general rule.” The E&S market grew almost 6% in 2017, comprising nearly 14% of all direct premiums written that year, according to A.M. Best—and “that has continued to pick up year over year,” notes Matt O’Malley, president, E&S casualty at AXA XL. “Agents are seeing a growing proportion of the market moving toward the E&S space.”
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KNOWLEDGE
Should Your Agency Write E&S? continued As more regional and super-regional companies form E&S units, Hickey says, “they’re affording retail commissions, providing additional product offerings and providing an opportunity for not only the broker but also the carrier to round out their portfolio.” That’s the greatest benefit of writing E&S, Lynch believes: “It gives you a diversified revenue stream. When we talk about market changes, you sometimes have to move an account from standard lines into E&S and back and forth. If you can handle both, you have a mechanism for keeping that business.” Lugg says E&S provides opportunities on both sides of the equation: when her agency can identify an account that’s in an E&S placement but doesn’t have to be, and when an account is placed in the admitted market but E&S would provide broader coverage, more cost-effectively. “We use E&S placements when it makes sense,” Lugg explains. “We’ve had instances where an admitted carrier is on a piece of business, but they have restrictive endorsements that aren’t favorable to our client, so we moved them to E&S to eliminate those exclusions. We look at the carriers and we look for stability. It’s about finding the right combination of comprehensive coverages and competitive pricing.” With that flexibility, “you create opportunity for your firm in areas where you maybe haven’t dipped your toe in the past,” Hickey says. “You’re bringing your customer the broadest slice of the marketplace you can.” The Challenges But by the same token, “you always hope that agents are looking at this through a 28
conscientious lens, saying, ‘I’ve got this license because I need to procure these products for my client, but I’m also focused on exercising that due diligence,’” Hickey says. “The devil is in the details.” “I wouldn’t say there’s necessarily more paperwork in E&S, but there’s certainly different paperwork, and it’s going to tend to be more bespoke—not as standardized as in the admitted market,” Lynch explains. “If you’re writing Main Street business, sure, one restaurant is different from another restaurant. But restaurants altogether all have a lot more in common with each other than they do with grease recyclers.” “Freedom of rate and form means the nonadmitted market is operating in an unregulated space in terms of having forms that aren’t necessarily approved,” O’Malley agrees. “Those allow an insurer to provide and tailor coverage specific to a risk, but agents need to be prepared for the fact that the forms tend to be manuscripted.” Similar to Hickey’s experience with the New Jersey contractor, Mahurin recounts a situation in which a surplus lines company charged a small business $42,000 for a commercial general liability policy that excluded all operations in the 10 states where the company worked. “As part of a commercial account exceeding $300,000 annually, the CGL effectively limited coverage to premises activities at their small office, parking lot, small warehouse and adjacent equipment yard,” Mahurin says. “Endorsements limiting coverage were almost 50 pages.” When the insured suffered a substantial six-figure property damage claim, the project owner discovered that the
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KNOWLEDGE
Should Your Agency Write E&S? continued insurance was non-compliant and kicked the contractor off all their jobs for two years. According to Mahurin, “that represented approximately 40% of their work. The agent in this case ‘specialized’ in contractors, but his knowledge of contractor exposures could have been written on a napkin.” “Rule No. 1 in our business is you must understand what you’re selling,” Hickey says. “When you get a two-page quote and it’s got a schedule of 40 endorsements, and 36 of them are nonstandard, and no one’s reviewed them? That’s malpractice.” Agencies that focus on “demonstrating competency in their procurement—those who are doing a level of analysis on coverage and building a product to meet that intended purpose for the customer— are going to thrive in the E&S space,” Hickey says. And the ones that don’t? Simple, Hickey says: “They’re going to be easy prey for the brokers that exercise that due diligence.”
Is Buying Insurance Like Ordering a Burrito?
William C. Wilson, Jr. CPCU, ARM, AIM, AMM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and Director of the Big "I" Virtual University for over 17 years. 34
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Is Buying Insurance Like Ordering a Burrito? Recently, I read this article from a venture capitalist:
“If people can buy paper towels on the internet, why not insurance?”
“Can Insurtech Reach Escape Velocity?“ The following passage, in particular, caught my eye: “In a world where we can summon a car, or our favorite Mexican restaurant’s veggie burrito, at the touch of a button; shouldn’t we be able to get insurance cover for our homes by just providing our address?” This question was reminiscent of one I blogged about two years ago when a “top insurance executive” asked, “If people can buy paper towels on the internet, why not insurance?” This was the comment I left on the ‘burrito’ article: No, because entering into a complex legal contract where significant assets and income are at stake is not even remotely similar to getting a ride to the airport or ordering delivery of a burrito.
apparently the startup was not aware that one of those structures, a $40,000 boat dock, was not actually on the “residence premises” (it was on Army Corps of Engineers property) and, therefore, according to the insurance contract was uninsured. “People who know NOTHING about insurance get all excited about the super cool technology.” The startup didn’t ask about any activities the residents were engaged in like serving on an HOA board and a child’s school athletic booster club which presented exposures that can be covered by some insurers with a policy endorsement. No umbrella coverage was offered. And the list goes on. People who know NOTHING about insurance get all excited about the super cool technology, speed and convenience. That excitement lasts until there is a 6-figure (or more) uninsured loss that could have been covered by engaging in proper exposure analysis beyond simply a street address.
I got a homeowners quote from one of these new startups that, according to this article, “gets it” simply by providing my address. According to their “big data” source, the square footage of the home was 1,200 sq. ft. less than it actually was. Think that might throw off the dwelling coverage limit? Yes, by about $180,000 in this case. A year later, I got a quote from the same startup and the living area was over 1,000 sq. ft. MORE than it actually was AND the coverage limit was STILL underinsured.
Big data is one thing. Big BAD Data is another. Copyright 2016-2019 by InsuranceCommentary.com. Reprinted with permission.
I was told for “other structures” the insured had 10% of the dwelling policy limit. But www.viaa.org
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COMPANY & AGENCY NEWS www.viaa.org
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Union Mutual Goes Solar
Union Mutual Fire Insurance Company announced today that it has begun the installation of a solar array on the roof of its headquarters at 139 State Street in Montpelier. The array will be comprised of almost one hundred and fifty solar panels on a ballasted racking system and will generate approximately 54kW of energy for the Company. The project, which received a Certificate of Public Good from the State in July, will be net-metered. Union Mutual Fire Insurance Company announced today that it has begun the installation of a solar array on the roof of its headquarters at 139 State Street in Montpelier. The array will be comprised of almost one hundred and fifty solar panels on a ballasted racking system and will generate approximately 54kW of energy for the Company. The project, which received a Certificate of Public Good from the State in July, will be net-metered. “We are very pleased to make this move toward sustainable energy, reduce the Company’s operating costs, and lower its carbon footprint,” said Union Mutual CEO Michael Nobles. “We appreciate the support that we received from the City of Montpelier and the State Capital Complex Commission.” The array, which was designed and engineered by Encore Renewable Energy, will not impact the architectural and aesthetic integrity of the historic building. The installation, which is being completed by Peck Electric, is configured in such a way that it will not be visible from points on the ground.
AM Best Revises Outlooks to Positive for Concord Group Insurance Pool Members AM Best has revised the outlook to positive from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (ICRs) of “a+” for New Hampshirebased Concord Group. According to AM Best, “The ratings of Concord Group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile, appropriate enterprise risk management (ERM)… and strategic position within the AutoOwners organization, which is a highly rated, super-regional insurer with more than $11 billion in policyholders’ surplus.” “We are very pleased to have our Financial Strength Rating outlook revised from stable to positive,” said Dan McCabe, President and CEO, Concord Group Insurance. “It demonstrates that AM Best recognizes the continued progress our organization is making. This reinforces the dedication and hard work of a team committed to providing the best insurance products and services in New England.” The outlooks have been revised to positive from stable and the FSR of A (Excellent) and the LongTerm ICRs of “a+” have been affirmed for the following members of Concord Group Insurance Pool: Concord General Mutual Insurance Company Green Mountain Insurance Company, Inc. State Mutual Insurance Company Sunapee Mutual Fire Insurance Company Vermont Accident Insurance Company, Inc. The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” have been affirmed, each with a stable outlook, for Auto-Owners Insurance Company and its wholly owned property and casualty subsidiaries. The Concord Group became affiliated with Auto-Owners Insurance Company in April 2017.
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Mindy Bero selected to be in the 2019 class of Women of FIRE by Banking New England magazine Hickok & Boardman, Inc. is pleased to announce that Mindy Bero, Client Advisor, has been selected as one of 31 women from throughout New England to be named to the 2019 class of Women of FIRE by Banking New England magazine. “The FIRE (Finance, Insurance, and Real Estate) sector has emerged as a keystone of the New England economy, transforming the knowledge, wealth and dreams of the world’s most ambitious visionaries into reality. As more and more women rise to the top of the businesses and institutions in this sector, there is a growing need to shine a light on their achievements to inspire others.” Mindy is being recognized for the difference she is making in the insurance profession.
In Memory of Hull Platt Maynard, Jr.
Hull Platt Maynard, Jr. passed away peacefully on August 29, 2019. He was born August 8, 1934 in Hartford, Connecticut to Hull and Margaret (Mann) Maynard. Together with his brother Peter, Hull spent his formative years at the Loomis Chaffee School in Windsor, Connecticut. As a teenager Hull was an adventurer and explored interesting work experiences by farming in Colorado, as a ranch hand in Wyoming, medic work on a hospital ship in Newfoundland and bell hopping in Cooperstown NY. After graduating from Loomis Chaffee Hull attended Middlebury College. As a ski patroller at the Snow Bowl Hull met his future bride Joanna Taft "Taffy." After graduating from
Middlebury College Hull served as an officer in the Army during the Korean War. Returning from service abroad Hull taught at Deerfield Academy and married Taffy in 1960. Together Hull and Taffy moved to Shrewsbury in 1962 and raised their four children. Hull immediately became active in the Shrewsbury community by joining the volunteer Fire Department, becoming Overseer of the Poor and Town Moderator. He initiated an early spring cleanup effort around town "Green Up Day" in the 1970's making roadside trash pick up especially popular as he placed dollar bills under the litter. In 1978 Hull founded the Hull Maynard Insurance Agency in Rutland. He served as President of the Vermont Insurance Agents Association and served on the board of Directors of the Vermont National Bank. He was a 56-year member of Grace Congregational United Church of Christ and member of the Rutland Rotary for over 50 years and served as President. He was chairman of the Shrewsbury town Republican Committee for many years. Hull expanded his efforts to Rutland County and the State and in 1996 Hull was elected as Rutland County State Senator. He went on to be re-elected to the Senate six times and served until 2010. He served on the Agriculture, Finance, Transportation and Education committees. He recently retired from the Governors Appointed Veterans Council. Hull was an avid bike rider. During the campaign years he used his mountain bike to visit Rutland County's twenty-seven towns; stopping door to door, attending town suppers, and riding in parades. Hull found great joy and exercise while listening to and serving his fellow Vermonters. He enjoyed raising turkeys and sheep on his hobby farm, High Pastures and was known for his award winning gilfeather turnips. He was passionate about tennis and played throughout Vermont, achieving club champion at the Dorset Field club in his earlier years. He continued to enjoy playing with his Rutland tennis group into his eighties. Hull was known for his gentle nature and cherished his friends, neighbors and family. He is survived by his loving wife of 59 years Joanna "Taffy" Maynard; his four children Jill Nolan (Brian), Hull P. Maynard III (Margaret), Todd T. Maynard (Charlotte) and Sarah M. Maynard; and five grand children Margo and Isabelle Nolan and Samantha, Charles and Magdalena Maynard. www.viaa.org
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