Presented by:
Quarterly Magazine - Autumn • 2023
How AI Is Disrupting
Major Industries
HARNESSING THE POWER OF ARTIFICIAL INTELLIGENCE
BRANCHES WORLDWIDE
How Businesses Can Benefit from AI while Mitigating Risk
Empowering Entrepreneurs to Impact Communities Globally
UNDERSTANDING HARD AND SOFT INSURANCE MARKETS And how you can guide your company through our current hard market
SOFT SKILL SPOTLIGHT:
WHY CLARITY IS A CRITICAL LEADERSHIP TRAIT
EXPLORING THE IT WORLD • FINANCIAL MARKET UPDATE • HR COMPLIANCE SNAPSHOT
What Is Foresight? Quarterly Magazine - Autumn • 2023
Foresight: The ability to see what is likely to happen in the future and to take appropriate action. At Hummel, we draw on our decades of experience, varied expertise, and relationships to help our clients exercise foresight to protect their financial futures. We hope you enjoy a small taste of that foresight through this quarterly publication.
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AI IS HERE. WHAT HAPPENS NEXT? How AI Is Disrupting Major Industries BY ChatGPT
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EXPLORING THE IT WORLD An Interview with Rochelle Yoder, Hummel IT Director BY Jolene Taggart - Hummel Marketing Coordinator
AI SURVEY RESULTS Artificial Intelligence and Its Impact on the World
HARNESSING THE POWER OF ARTIFICIAL INTELLIGENCE How Business Can Benefit from AI while Mitigating Risk BY Cody Kiser, CPA Rea & Associates
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WHY CLARITY IS A CRITICAL LEADERSHIP TRAIT And How It Can Be Developed to Better Lead Organizations BY Vaughn Troyer - President of Hummel
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UNDERSTANDING HARD AND SOFT INSURANCE MARKETS Factors Influencing Pricing and Coverage BY Matt Yost – Hummel Principal & Director of Sales
BRANCHES WORLDWIDE Empowering Entrepreneurs to Impact Communities Globally BY Jolene Taggart - Hummel Marketing Coordinator
FINANCIAL MARKET UPDATE INTEREST RATES! INTEREST RATES! INTEREST RATES! BY Peyton Gentry, AIF – Hummel Financial Advisor
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HR COMPLIANCE SNAPSHOT Compensating Employees for Time in Lectures, Meetings, and Training under the FLSA
How AI Is Disrupting Major Industries BY: ChatGPT
Artificial intelligence (AI) has rapidly evolved in recent years, revolutionizing numerous industries and transforming the way we live and work. As AI technologies continue to advance, they have the potential to disrupt major industries, presenting both risks and benefits to humanity. In this article, we will explore the disruptive impact of AI on key sectors and examine the associated risks and benefits, incorporating insights from experts and reliable sources.
The advent of AI has the potential to disrupt major industries, promising numerous benefits while posing risks to humanity.
HEALTHCARE INDUSTRY AI’s potential in healthcare is immense, offering improved diagnostics, personalized medicine, and efficient patient care. AI has the ability to analyze vast amounts of medical data, leading to early disease detection and more accurate treatment options. However, concerns arise regarding patient privacy and the ethical implications of relying solely on AI-driven diagnoses and decision-making processes.
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TRANSPORTATION AND LOGISTICS The transportation industry stands at the brink of disruption due to AI-powered technologies. Self-driving vehicles, advanced route optimization algorithms, and intelligent traffic management systems promise enhanced safety and efficiency. AI can revolutionize the way we travel, reducing accidents and congestion while improving fuel efficiency. Nonetheless, the integration of AI in this sector raises concerns about job displacement and potential security vulnerabilities.
MANUFACTURING AND AUTOMATION AI-driven automation is set to transform the manufacturing landscape. With machine learning algorithms and robotics, production processes can become faster, more accurate, and adaptable. AI-powered machines can greatly enhance productivity, resulting in cost savings and increased competitiveness. However, the displacement of human workers and the potential for AI systems to malfunction or be manipulated are important concerns that need to be addressed. The transportation industry stands at the brink of disruption due to AI-powered technologies.
FINANCIAL SERVICES The financial industry is embracing AI for risk assessment, fraud detection, and customer service. Intelligent algorithms can analyze vast amounts of data to identify patterns and anomalies, mitigating potential risks. AI has the potential to improve decision-making and streamline processes, leading to greater accuracy and reduced fraud. Yet, the reliance on AI in finance raises concerns about data security, algorithmic biases, and the potential for systemic risks in highly interconnected markets. AI-powered machines can greatly enhance productivity, resulting in cost savings and increased competitiveness
RETAIL AND CUSTOMER SERVICE AI technologies are revolutionizing the retail industry, from chatbots providing customer support to personalized product recommendations. AI-powered algorithms can analyze consumer behavior, leading to improved customer experiences and increased sales. It can help retailers understand consumer preferences better, resulting in more targeted marketing strategies. Yet, privacy concerns, job displacement, and the risk of algorithmic manipulation warrant attention.
EDUCATION AND LEARNING AI applications in education range from personalized learning platforms to virtual tutors. Adaptive learning algorithms can tailor educational content to individual needs, enhancing student engagement and outcomes. AI can help democratize access to education, making it more accessible to marginalized communities. However, concerns exist about data privacy, the role of human educators, and the potential for AI to reinforce existing inequalities.
Conclusion The advent of AI has the potential to disrupt major industries, promising numerous benefits while posing risks to humanity. AI can drive innovation, enhance efficiency, and revolutionize various sectors, including healthcare, transportation, manufacturing, finance, education, and retail. However, concerns persist regarding privacy, ethics, job displacement, algorithmic biases, and security vulnerabilities. As AI continues to evolve, it is crucial to establish robust regulations, ethical frameworks, and responsible practices to harness the transformative power of AI while safeguarding human interests and societal well-being.
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What Is ChatGPT? ChatGPT is a language model developed by OpenAI. It is based on the GPT (Generative Pre-trained Transformer) architecture and is designed to generate human-like text responses given a prompt or a conversational context. ChatGPT can be used for a wide range of applications, including:
CONVERSATIONAL AGENTS
EDUCATION AND TUTORING
CREATIVE BRAINSTORMING
ChatGPT can be used to build chatbots or virtual assistants that engage in natural language conversations with users. It can provide information, answer questions, and assist with various tasks.
ChatGPT can be used as an educational tool to provide explanations, answer questions, and support learning in various subjects. It can simulate conversations with students, providing personalized guidance and assistance.
ChatGPT can serve as a creative collaborator, helping users generate ideas, explore possibilities, and overcome creative blocks in various fields such as design, marketing, or problem-solving.
CONTENT GENERATION
CUSTOMER SUPPORT
ChatGPT can generate humanlike text for creative writing, story generation, content creation, and more. It can help authors, marketers, and content creators come up with ideas or draft text.
ChatGPT can be employed in customer support systems to handle common inquiries, provide basic troubleshooting steps, and assist customers in finding relevant information.
WILL AI START MAKING SALES CALLS? AIR AI thinks so. They’ve developed an AI program that can handle 10-40-minute-long phone calls for sales and customer service. One of their demo calls is an AI bot calling up an individual in an “abandoned cart” scenario for a pair of $3,000 Apple Vision Pro goggles. You can listen to it by scanning the QR code below. Is it exciting or scary how good the AI sales bot is? Probably a bit of both! Either way, one thing we can agree on is that AI is going to have a major impact on how businesses conduct sales and customer service.
Scan to listen to an AI bot make a sales call! AUTUMN
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Exploring the IT World An Interview with Rochelle Yoder, Hummel IT Director
Gain insight on cybersecurity, the future of technology, and the one thing business owners must do to secure their networks.
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What drew you into the IT world? When I was trying to decide on a major and what to study in college, I had various interests. However, I was concerned that if I pursued any of those interests as a career, they might lose their appeal. For example, I was involved in church and thought that if I became a pastor, it would become a job rather than a passion. Similarly, I loved working with children, but I worried that a career in teaching or childcare might dampen my enjoyment. Since I excelled in math and had a curiosity about computers, I decided to study computer science in college. I figured it would be a way to explore my interest in technology and see if it resonated with me. Eventually, I found my niche in IT hardware, networking, and systems, which led me to pursue a career in the IT world.
How long have you been the IT director at Hummel Group? And what is your IT history? I’ve held the position of IT director at Hummel Group for about three years. Before that, I started as an IT specialist and gradually progressed to IT manager before assuming the director role. In total, I’ve been with Hummel for a little over six years, not including the two years at an IT firm that supported the company. Prior to that, I spent some time doing some work as an IT specialist and some programming, giving me a total of fourteen years in the IT industry.
What are your favorite and least favorite aspects of your job? Until recently, my least favorite part of the job was managing people. However, Hummel has been investing in leadership training, which has made managing more enjoyable. It can also be difficult being on call 24/7 if something comes up. As for my favorite part, I appreciate the variety that comes with working in IT. Instead of performing the same task repeatedly, there’s always something different to tackle, which keeps things interesting.
Rochelle Yoder
Cultivate a security-focused culture within the organization. What advice would you give someone entering a leadership position in the IT world? My advice would be to prioritize continuous education and stay updated on technology and cybersecurity. Whether it’s through daily news podcasts, professional magazines, or other relevant sources, it’s crucial to remain informed. Additionally, focus on making your IT team both efficient and secure. Balancing security and efficiency is key to ensuring the smooth operation of your department while mitigating risks.
What keeps you up at night in terms of IT security? Security breaches, particularly ransomware attacks, are a major concern. While we have processes in place to recover from such incidents, they still pose significant challenges. Knowing that the potential for breaches exists is something that can keep me up at night. AUTUMN
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What’s one thing you’d recommend businesses implement to make the biggest impact on their network security? The most impactful measure would be to cultivate a security-focused culture within the organization. This is also the most challenging aspect to address. Ensuring that every employee is vigilant about security, from verifying phone calls and not divulging sensitive information to recognizing phishing emails and assessing the authenticity of websites, is crucial. Security awareness training plays a vital role in creating a culture shift so that employees realize they are the last line of defense. A quote I read recently is, “Cybersecurity is a culture not a product.” All the security products in the world cannot protect against all vulnerabilities.
“Cybersecurity is a culture not a product.” Two-factor authentication can be annoying and cumbersome for companies to implement. Why is it worth it? While implementing two-factor authentication (2FA) may require some additional effort, it is absolutely worth it for enhancing security. 7
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The primary benefit of 2FA is that it adds an extra layer of protection beyond just a password. Let’s consider a scenario where someone falls for a phishing attack or their computer is compromised with a keylogger. Even if the attacker obtains their password, they still can’t gain access to the account without the second factor of authentication.
Studies have shown that 2FA is highly effective in preventing breaches, with an estimated 95-99 percent of attacks being thwarted by its implementation. The second factor can be in the form of a text message, a code from an authenticator app, or a similar method. This additional step significantly reduces the chances of unauthorized access because the attacker would need physical possession of the user’s device or access to their phone number. Implementing 2FA across all systems provides an added layer of security for employees. If someone’s password is compromised, the system will send them a 2FA code without their initiation, alerting them that someone is trying to access their account. This allows us to quickly identify a potential security breach and take appropriate action.
Studies have shown that 2FA is highly effective in preventing breaches, with an estimated 95-99 percent of attacks being thwarted by its implementation. It serves as a powerful deterrent against unauthorized access and significantly reduces the risk of account compromise. In addition to implementing 2FA, using a password manager can further enhance security. It allows users to have unique and complex passwords for each system without the need to memorize them. Instead, users only need to remember the password for their password manager, which grants them access to all their stored passwords securely.
It can help automate routine tasks, freeing up time for IT professionals to focus on more complex issues. However, AI-powered attacks could also become more prevalent, with malicious actors using AI algorithms to exploit vulnerabilities and develop new attack vectors. As an IT director, I believe AI will require us to continually adapt and enhance our cybersecurity measures. We’ll need to stay ahead of the curve by leveraging AI ourselves to strengthen our defenses and develop countermeasures against AI-driven threats. It’s a constant cat-andmouse game, but with the right strategies and a proactive approach, AI can be a valuable asset in our fight against cybercrime. BY: Jolene Taggart, Hummel Marketing Coordinator
Overall, while implementing 2FA may introduce some inconvenience, the benefits it brings in terms of security far outweigh the initial effort. Alongside other security measures, such as regular training and fostering a securityconscious culture, implementing 2FA is one of the most effective steps organizations can take to protect their systems and data.
How do you see the advancement of AI affecting the cybersecurity world? Will it make your job harder or easier? Like any technology, AI can be used for both positive and negative purposes. AI tools can aid in advancing security, but they can also be leveraged by cybercriminals to launch more sophisticated attacks. On the one hand, AI can enhance threat detection by analyzing vast amounts of data and identifying patterns that humans might miss.
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STATISTICS
Our AI Survey Results We surveyed individuals in a wide range of industries, ages, and careers to see how people feel about AI and its impact on the world.
9.2%
9.2 percent of responders are currently using AI in their workplace.
70%
Over 70 percent of respondents feel that AI is going to be a significant threat to humanity.
80%
Almost 80 percent of respondents are less than excited about trying AI at their workplace, with 22 percent saying they won’t use AI at all.
The majority of respondents felt that AI will have an average impact on their industry but 20% of respondents were concerned about disruptions to their industry due to AI while 46% felt a little to a moderate amount of concern.
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Harnessing the Power of Artificial Intelligence How Businesses Can Benefit from AI while Mitigating Risk BY: Cody Kiser, CPA – Rea & Associates
AI has become a buzzword in the tech industry, and with the emergence of platforms similar to ChatGPT, AI is becoming more accessible to businesses of all sizes. These platforms are designed to mimic human conversations, making it possible for businesses to automate customer service, marketing, and even accounting. Platforms like Microsoft’s Azure AI, Google Cloud AI, Amazon’s AWS, and open-source AI like TensorFlow and PyTorch are revolutionizing the way businesses operate. AI’s momentum stems from the availability of data and computing power, demand for automation and personalization, affordability of open-source tools, and growing interest and investment in AI research and development. However, with all these tools gaining in popularity, there are concerns about how they treat sensitive or proprietary information and how data are collected and used.
How does AI work? AI platforms are powered by deep learning, a subfield of machine learning that utilizes artificial neural networks to perform complex tasks. These platforms are trained on large datasets and can generate human-like responses based on the data they have learned. ChatGPT, for example, has been trained on a vast corpus of text, including books, articles, and online forums, making it possible for the platform to generate coherent and relevant responses to a wide range of queries.
Cody Kiser
What concerns are there with AI platforms? One of the main concerns surrounding AI platforms is how they treat sensitive or proprietary information. While platforms such as ChatGPT are designed to provide personalized and relevant responses to users, they can also collect and process vast amounts of data. This data may include sensitive information such as customer names, contact details, and financial information. As such, businesses need to ensure that the platforms they use are compliant with data privacy regulations and that the data they collect is stored and processed securely. To ensure the privacy of sensitive data, some AI platforms use techniques like end-to-end encryption and data anonymization. Endto-end encryption ensures that data are encrypted from the point of origin to the point of consumption, making it impossible for unauthorized users to access the data. On the other hand, data anonymization involves removing any identifying information from the data, making it impossible to link the data to a specific individual or organization. AUTUMN
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How can AI help businesses? AI platforms are helping businesses in a variety of ways, including: AUTOMATING TASKS – AI platforms can automate repetitive tasks, allowing employees to focus on more complex and valuable tasks. ENHANCING CUSTOMER EXPERIENCE – AI-powered chatbots and virtual assistants can handle customer queries and provide personalized recommendations, improving customer experience and satisfaction. INCREASING EFFICIENCY – AI algorithms can analyze large amounts of data and identify patterns, allowing businesses to make better decisions and optimize their operations. IMPROVING MARKETING CAMPAIGNS – AI platforms can analyze customer behavior and preferences, allowing businesses to create more targeted and effective marketing campaigns. PREDICTING OUTCOMES – AI algorithms can analyze past data and predict future outcomes, helping businesses make informed decisions and identify new opportunities. STREAMLINING SUPPLY CHAINS – AI can optimize supply chain management, reducing waste and improving delivery times.
Overall, AI platforms are helping businesses operate more efficiently, make better decisions, and enhance customer experience, ultimately leading to increased revenue and growth.
What are the risks of using AI in business? AI platforms can certainly help businesses to identify potential tax savings opportunities and ensure compliance with tax regulations. But can AI replace people?
careful consideration and proper implementation, AI platforms can help businesses to improve efficiency, save time and resources, and ultimately increase profitability.
There are potential drawbacks to using AI platforms to handle tax and accounting information. One concern is the risk of errors or inaccuracies in automated processes, which could result in incorrect tax filings or financial statements.
As AI technology continues to evolve, it is likely that we will see more sophisticated platforms. It is essential for businesses to stay informed and adapt accordingly to remain competitive in the market. In accounting services, these platforms will offer more advanced features and capabilities, making it easier for businesses to manage their finances and comply with tax regulations. However, businesses must continue to prioritize data privacy and security, ensuring that the information
You shouldn’t be afraid of AI platforms, but be cautious. Ensure that the platforms you use are reliable and accurate and that you fully understand any potential risks or drawbacks before implementation. With 11
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collected and processed by these platforms is protected from unauthorized access or use. By doing so, businesses can reap the benefits of AI while minimizing the potential risks and drawbacks. AI is still new and uncharted territory for businesses. While it has the potential to revolutionize business with interesting and impactful technology, there are imperfections that can be harmful to your business if improperly used. It will be important to remain informed. Reach out to your Rea advisor to learn how you can use AI for your business. - Cody Kiser, CPA, Rea & Associates, New Philadelphia office
SOFT SKILL SPOTLIGHT:
Why Clarity Is a Critical Leadership Trait And how it can be developed to better lead organizations
BY: Vaughn Troyer - President of Hummel
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Clarity Is Kindness Has this ever happened to you? Your spouse/ manager/teacher asks you to complete an assignment or project, and you dive in with urgency and motivation. Perhaps it’s to mulch your flower beds. You spend an entire morning in the hot sun edging, weeding, and mulching the beds, and by noon they look terrific! Later that day, when reviewing the finished project with your spouse, you are dismayed to be told that the mulch selection is wrong and needs to be removed and replaced. All the hours of work of which you were so proud suddenly feel pointless and wasted. I ask the question: who bears the responsibility for this miscommunication—the manager or the one doing the work? Over the last couple of years, the word that has floated to the top of my list of crucial leadership characteristics is CLARITY. I believe that a leader must provide clarity to those they are leading to create an environment of success. I’ve heard it said, “Clarity is kindness,” and I want to be that “kind” of leader. Successful leaders have learned to communicate clarity to those around them. This may be as elementary as explaining the importance of why a process must be completed, the order and manner of completion, along with specific written details. Or it may be as complex as the five-year strategic plan for an organization developed by the leadership team, with the details of how to share the plan with the entire organization. Each of these provides valuable clarity to those teammates that are invested in completing the work.
Vaughn Troyer
Every employee has a list of the five to seven crucial objectives of their roles, along with the performance measurement expectations. Monthly, the employee meets with their manager, and the employee tells the leader how their performance metric compares to the objective. We are still new to the process, but we are seeing the value of clearly defined expectations and regular feedback.
As a leader, I want to reduce negative conflict in my teams, and one significant way I can do so is by intentionally providing clarity to everything.
Where there is a lack of clarity, there is conflict.
In contrast to the phrase “Clarity is Kindness,” I use a quote from Larry Linne, “Where there is a lack of clarity, there is conflict.” As a leader, I want to reduce negative conflict in my teams, and one significant way I can do so is by intentionally providing clarity to everything. Think of the frustration and negative emotions that could have been avoided in the landscaping example above by simply clarifying the details and expectations of improving the flower beds.
It is also critical that leaders provide clarity as it relates to an individual’s job performance. In 2023, Hummel Group began using an employee review process called Reverse Performance Leadership to improve role clarity.
I encourage each of you, as leaders, to review the processes or results for which you are responsible, and then to intentionally provide greater clarity to your teammates. Remember— clarity is kindness. - Vaughn Troyer, President of Hummel
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Understanding Hard and Soft Insurance Markets Factors influencing pricing and coverage and how you can help guide your company through our current hard market
BY: Matt Yost – Hummel Principal & Director of Sales
Insurance markets are dynamic, and their pricing fluctuations impact both businesses and individuals seeking coverage. The concepts of hard and soft markets reflect the pricing trends in the insurance industry. I will delve into the factors that contribute to these market conditions, their effects on insurance buyers, and what business owners can do to mitigate the effects of a hard market on their bottom-line.
The difference between a hard market and a soft market lies in the pricing offered by insurance carriers to their clients.
HARD MARKET VS. SOFT MARKET At its core, the difference between a hard market and a soft market lies in the pricing offered by insurance carriers to their clients. In a hard market, insurance rates are on the rise, leading to higher premiums for policyholders. Conversely, a soft market is characterized by reduced rates, resulting in lower premiums for buyers. These market conditions directly impact the affordability and accessibility of insurance coverage for businesses and homeowners.
FACTORS INFLUENCING HARD AND SOFT MARKETS 1. Insurance Analytics and Predictive Underwriting: Over the past two decades, the insurance industry has embraced data analytics and predictive modeling to assess risks and determine appropriate pricing. By analyzing claim data, risk characteristics, and other factors, insurance companies can segment businesses and individuals, tailoring premiums based on risk profiles. This approach has led to more accurate pricing and reduced market volatility.
Matt Yost
Insurance companies primarily generate profits through investment returns rather than underwriting results. AUTUMN
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2. Economic Factors: While insurance markets are influenced by broader economic conditions, such as the stock market’s performance, their connection is not always direct. Insurance companies primarily generate profits through investment returns rather than underwriting results. In a bear market, insurance companies may seek alternative revenue sources, leading to higher premiums. However, economic factors alone do not solely dictate market conditions.
Weather patterns can have a more substantial impact on insurance rates than the overall economic climate. 3. Weather Patterns and Catastrophic Events: Weather events and catastrophic occurrences play a significant role in shaping insurance markets. Increasingly frequent and severe weather patterns, such as hurricanes, tornadoes, and wildfires, impact insurance carriers’ exposure to risk. Insurance companies respond by adjusting rates to compensate for potential losses. Weather patterns can have a more substantial impact on insurance rates than the overall economic climate. According to the NOAA National Centers for Environmental Information (NCEI), there have been 24 separate weather and climate disasters through September 2023, with losses that exceed $1 billion in the United States (https://www.ncei. noaa.gov/access/billions/).
4. Legislative and Legal Environment: The legal and legislative environment in which insurance companies operate significantly influences market conditions. Jurisdictions that are less business-friendly may witness larger jury awards, known as nuclear verdicts, for liability claims. These sizable payouts can lead to increased rates as insurers strive to cover potential losses. The legal landscape plays a vital role in determining the cost of insurance coverage. According to recent loss data from Advisen (a Zywave company), the median cost of a nuclear verdict increased from $20 million to $27 million between 2015 and 2020, representing a 35 percent jump. “Nuclear verdicts have spun out of control and should concern every policymaker, business, and consumer because of the real-world impact on the price of everyday household products, services, and insurance. Moreover, nuclear verdicts can threaten the viability of a business,” said Harold Kim, president of the U.S. Chamber of Commerce Institute for Legal Reform and chief legal officer for the U.S. Chamber of Commerce. “While some might feel that a huge verdict is ‘sticking it’ to a business, the reality is that nuclear verdicts add uncertainty and layers of cost throughout our economy that we all pay and undermine the rule of law in the process.”
This map denotes the approximate location of each of the 24 separate billion-dollar weather and climate disasters that impacted the United States through Sept 2023 15
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EFFECTS ON INSURANCE BUYERS During a hard market, insurance buyers experience higher premiums as carriers aim to mitigate risks and recoup potential losses. Commercial clients, especially, may see coverage reductions, where insurers reduce policy limits or require clients to seek coverage from multiple carriers. This increased difficulty in obtaining desired coverage levels can place a financial burden on businesses. Conversely, in a soft market, buyers enjoy lower premiums and increased accessibility to coverage, leading to cost savings.
Reduced capacity from reinsurers and large verdicts in liability claims have led to decreased limits and increased rates for policyholders. In our current market, certain lines of coverage, such as excess liability insurance, are experiencing the effects of a hard market. Reduced capacity from reinsurers and large verdicts in liability claims have led to decreased limits and increased rates for policyholders. The
availability of coverage may be limited, requiring businesses to seek multiple insurers to achieve desired coverage limits. These challenges can result in higher costs and more complex insurance arrangements. The insurance industry’s shift toward data analytics and predictive underwriting has brought stability and predictability to pricing. While economic factors and weather patterns impact market conditions, insurers’ investment returns and the legal environment play significant roles in determining insurance rates. Understanding the dynamics of hard and soft markets empowers insurance buyers to make informed decisions about coverage options, ensuring adequate protection while managing costs. By staying informed and working closely with insurance advisors, businesses and individuals can navigate the insurance market more effectively and ensure adequate protection against potential risks. - Matt Yost, Hummel Principal & Director of Sales
Rate Forecast Predictions from Willis Towers Watson PROPERTY | RATE PREDICTION: CHALLENGED OCCUPANCIES: +25% TO +40%; NON-CHALLENGED OCCUPANCIES: +10% TO +20% • Pressure to obtain higher returns for deployment of catastrophe capacity/aggregate will drive premium increases for insureds while inflationary pressure, reinsurance optimization, and persistent scrutiny on valuation of assets remain. AUTOMOBILE LIABILITY | RATE PREDICTION: +5% TO +10% • 2021 AL segment combined ratio is estimated at 101.3. • NHTSA puts the fatality rate for 2021 at 42,915, up 10.5 percent from 38,829 in 2020. • Large auto verdicts: 300 percent increase over seven years in trucking claims. • Distracted driving GENERAL LIABILITY | RATE PREDICTION: -3 % TO +5% • Liberal class action certification and a highly organized plaintiffs’ bar • Desensitized jury pools & uncertainty around litigation in post-pandemic world • Those with exposures materially impacted by inflation may find more flexible rate outcomes. UMBRELLA LIABILITY | RATE PREDICTION: HIGH HAZARD/CHALLENGED CLASS: FLAT TO +15%; LOW/MODERATE HAZARD: FLAT TO +7.5% • After the peak in 2020/21, pricing adequacy has attracted greater global capacity. • Risk-specific (two-tiered) underwriting remains, with high hazard risks or lower attachment points yielding worse outcomes. • Uptick in frequency of punitive awards Source: https://www.wtwco.com/en-us/insights/2023/04/insurance-marketplace-realities-2023-spring-update Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information. AUTUMN
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Branches Worldwide Empowering Entrepreneurs to Impact Communities Globally Transforming lives and communities, one partnership at a time BY Jolene Taggart, Hummel Marketing Coordinator
- - Amen and his friends in their shared office space
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With a goal of establishing thirtyyear memberships in thirty countries, Branches is transforming lives and communities, one partnership at a time.
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In a world filled with countless organizations and initiatives, one program stands out for its unique approach to mentorship and development. Branches Worldwide, founded in 2019 by Brian Miller of ProVia (Sugarcreek, Ohio), has quickly gained recognition for its unconventional leadership development method. In a world of fast fixes and five-step programs, Branches believes that true development comes from a long-term commitment to growth in a community. It does this by connecting successful entrepreneurs in developing countries with experienced mentors through a thirty-year period. Why does Branches do this? Simply because the world needs more leaders in small local communities working to create positive social and economic change through business. At its core, Branches is a mentorship and development program that pairs aspiring entrepreneurs in developing countries with seasoned mentors
Currently, Branches has made significant progress toward its ambitious thirty-year goal. With approximately fifteen individuals already committed to the program, it is on track to reach twenty members by the end of the year. In recent years, the program has experienced substantial growth, attracting more talented entrepreneurs and mentors. Vaughn Troyer, Hummel Group’s president and a Branches worldwide ambassador, was able to meet one such entrepreneur—an aspiring business owner from Ethiopia named Amen. Faced with numerous challenges, including complex permitting processes and limited access to capital, he recognized the need for innovative solutions in his community. Having grown up witnessing the stark disparity between the privileged and the underprivileged, he developed a business model to address malnutrition among children. His idea involves producing a nutritious biscuit or bar that can be sold to schools, implementing a one-for-one model where every purchase leads to a donation. 19
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At its core, Branches is a mentorship and development program that pairs aspiring entrepreneurs in developing countries with seasoned mentors. The focus is on nurturing talent and providing resources to enable these entrepreneurs to thrive. Although many mentors are based in the United States, Branches actively seeks mentors from various locations, ensuring a diverse pool of expertise and perspectives. The impact of Branches extends far beyond individual mentorship. The program encourages its participants to leverage their business ventures as a force for positive change, treating entrepreneurship as a mission field. By impacting their employees and communities, these entrepreneurs become influential leaders who create lasting social and economic transformations. With a growing network of mentors and mentees, the potential for impact only continues to expand.
“Amen’s story exemplifies the potential for transformation that lies within each Branches participant.” Troyer continues, “The road ahead is not without its challenges, but the dedication and passion of each of the selected entrepreneurs create boundless opportunities. It’s these qualities that we look for when interviewing potential partners. In this case, Amen was disciplined, highly educated, articulate, and held the Christian values we were looking for. We were very impressed with him.”
Branches provides tangible support to its entrepreneurs through mentorship, monthly meetings, and the formation of cohorts for peer support.
- Brent Miller, Amen, and Haile Bekele, a former Holmes Co resident in front of Haile’s business in Addis Ababa.
With the support of a mentor and a nutritionist as his business partner, Amen has begun implementing his plan, with a focus on schools and nonprofits as his initial customer base. Branches provides tangible support to its entrepreneurs through mentorship, monthly meetings, and the formation of cohorts for peer support. Mentors travel to the entrepreneurs’ countries at least once a year to build relationships and provide guidance. Additionally, Branches facilitates connections, resources, and opportunities for its members, ensuring they have the necessary support to overcome challenges and achieve success. The birth of Branches can be traced back to Brian Miller, founder of Branches Worldwide, listening to a demographer forecast the state of other nations 30 years into the future. “That caught my attention,” states Miller. “And over the next couple of days, I began processing that, and I
heard God talk to me and tell me that he would like me to impact 30 individuals in 30 different countries for 30 years.” In John, Chapter 15, Jesus speaks to his disciples, likening himself to a vine and his disciples to branches. Just as the branches draw their life and sustenance from the vine, the vision for Branches Worldwide emerged—a program that would nurture Christian leaders worldwide, connecting them to a common source of life and purpose. Brian Miller envisioned a network of individuals who would draw their inspiration and strength from Christ, just as the branches derive their vitality from the vine. Branches Worldwide is how he would impact the lives of 30 individuals in 30 different countries for a span of 30 years.
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Branches is not affiliated with any specific denomination or church, but it seeks individuals who are committed to their faith. This shared foundation serves as a unifying force, allowing members to connect on a deeper level and work towards a common purpose. Branches Worldwide stands as a beacon of hope for aspiring entrepreneurs in developing countries. By pairing them with mentors and providing essential resources, the program empowers individuals to create sustainable businesses that positively impact their communities. With a vision for growth and a commitment to fostering global connections, Branches continues to make a profound difference in the lives of young entrepreneurs and the world they seek to change.
For those inspired by the mission of Branches, there are several ways to offer support. Financial contributions are always appreciated, as the program operates without any cost to its participants. These funds help cover expenses such as bringing entrepreneurs to the United States for annual meetings, broadening their perspectives, and facilitating cross-cultural exchange. Additionally, Branches is constantly seeking mentors who are willing to make a substantial commitment to guide and support aspiring entrepreneurs. Connecting Branches to potential individuals and resources in different countries is another valuable way to contribute to their mission. You can learn more at
branchesworldwide.org. Learn more about Amen Temesgen’s business BeNu Foods at
benufoodsethiopia.com.
- Jolene Taggart, Hummel Marketing Coordinator
- Vaughn Troyer of Hummel Group with Amen and a cohort of young Ethiopian entrepreneurs at lunch.
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Financial Market Update – Autumn 2023
INTEREST RATES!
INTEREST RATES!
INTEREST RATES! BY: Peyton Gentry, AIF – Hummel Financial Advisor
If you take nothing else away from this article today, I hope you remember that interest rates have been firmly in the driver’s seat of this back-and-forth market we have found ourselves in for the last 18 months or so. Before we can dig into HOW they have been swinging this market, we must first understand WHY they are rising in the first place. Which brings me to the second most important takeaway from today’s letter - INFLATION. Simply put, inflation is too many dollars chasing after too few goods and services. Simply put, inflation is too many dollars chasing after too few goods and services. During the COVID-19 pandemic, we saw money pumped into the financial system at a rate we have never seen before. This was achieved through rock-bottom interest rates, business incentive programs, and those ohso-popular rounds of stimulus checks. All of this was done to help stabilize and lubricate the economy in a time when it had seemingly ground to a screeching halt, and we had no idea if or when it would resume business as usual. Couple all that excess cash with the lack of availability of parts, materials, and service people (see the “supply chain” problems that we have all grown very tired of…), and you get the exact recipe for inflation that I laid out at the top of this paragraph. Enter the Federal Reserve. One of The Fed’s jobs is to bring some stability and balance to the financial system by keeping inflation in check. It has a couple tools it can use to do so, but the one that we all feel the most is the raising or lowering of those pesky interest
rates that we talked about at the beginning. When The Fed raises borrowing rate for commercial banks, the commercial banks we are all used to dealing with must raise their interest rates to ensure they can still maintain profitability and liquidity.
Peyton Gentry
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When The Fed raises its borrowing rate for commercial banks, the commercial banks we are all used to dealing with must raise their interest rates to ensure they can still maintain profitability and liquidity.
The rationale is that by making it a little pricier to borrow money, businesses and individual borrowers will be a little more hesitant to take out loans, thus there will be less money flying around in the economy chasing after those already scarce goods and services. If they can achieve this, it should put some pressure on the suppliers and contractors to lower their rates since they are competing for fewer and fewer dollars in the market. Alright, now that we got through that fun little economics class that none of you asked me for, I want to finish up by talking about what all of this means for the stock market, and by proxy, all our retirement accounts. Just as it has gotten more expensive for you and me to borrow money from our local banks (not to mention more expensive to put gas in the car and food in our bellies), the same is true for businesses. Ultimately, favor is on the side of the investor that can remain focused on the long term, block out the noise, and recognize that economic cycles are normal.
Over the long term, the stock market values businesses based on their profitability, both now and in the future. Therefore, negative pressures like supply chain issues, worker shortages, and higher interest rates tend to make those companies less attractive to investors in the near term, especially growing companies that are more dependent on debt to help fund their growth than the blue chip business that have withstood dozens of markets like this in the past. This is why we have been seeing the shaky,
back-and-forth market that we have been in for the last little while—because investors are trying to figure out just how much the short-term economic pains will affect the long-term health of these companies that we all invest in. The light at the end of this tunnel is that the Fed appears to be nearing the end of its tightening cycle, and hopefully in the coming months we will start returning to some level of stability and normalcy. I for one will be happy to see “unprecedented times” removed from the societal lexicon for a good long while. Ultimately, favor is on the side of the investor that can remain focused on the long term, block out the noise, and recognize that economic cycles are normal, healthy, and something that we have been through before and will undoubtedly go through again. The investor that can absorb the short-term valleys will be happy they stuck around if things head back toward the mountaintop. Happy investing! - Peyton Gentry, AIF, Hummel Financial Advisor
Hummel’s wealth management team provides investment services tailored to your specific needs and values. Whether you’re concerned about the successful succession of your business, retirement income, or saving enough for your children’s education, one of our expert advisors can be the long-term strategic planning partner you need. Visit hummelfinancialadvisors.com to learn more.
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HR COMPLIANCE SNAPSHOT Compensating Employees for Time in Lectures, Meetings, and Training under the FLSA
The federal Fair Labor Standards Act (FLSA) requires employers to compensate their employees for all hours of work. To comply with this requirement, employers must keep track of the number of compensable hours employees work during a workweek.
COMPENSABLE TIME
COMPENSABLE TIME
In general, employee attendance to lectures, meetings, training programs, and similar activities is considered compensable time unless all of the following are true:
Compensable time includes all hours during which employees:
• Employees attend outside their regular working hours; • Employee attendance is, in fact, voluntary; • The lecture, meeting, or training is not directly related to the employee’s job; and • Employees do not perform productive work while attending the meeting, seminar, lecture, or training.
• Perform productive work; and • Are required by their employers to remain available for the next assignment.
Compensable time does not include periods where individuals are relieved of all obligations and are free to pursue their own interests.
VOLUNTARY ATTENDANCE
SPECIAL SITUATIONS
The U.S. Department of Labor (DOL) has clarified that “attendance is not voluntary, of course, if it is required by the employer” and that attendance is not “voluntary in fact” if employees are led to understand or believe that their employment (including the terms and conditions of their employment) would be adversely affected if they do not attend.
The DOL has clarified that there are some special situations where the time spent attending lectures, training sessions, and courses of instruction is not regarded as hours worked.
TRAINING DIRECTLY RELATED TO EMPLOYEE JOBS The training is directly related to employee jobs if it is designed to help employees handle their jobs more effectively. This is not the same as training employees for another job or to gain a new or additional skill.
“For example, an employer may establish for the benefit of his employees a program of instruction which corresponds to courses offered by independent bona fide institutions of learning. Voluntary attendance by an employee at such courses outside of working hours would not be hours worked even if they are directly related to his job or paid for by the employer.”
This Compliance Snapshot is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2023 Zywave, Inc. All rights reserved. AUTUMN
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Quarterly Magazine - Autumn • 2023
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