June 29, 2015

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VOLUME 126, NUMBER 12 / June 29, 2015

A CINN Group, Inc. Publication

Serving: New York, New Jersey, Connecticut, Pennsylvania and Washington D.C.

A Look Back‌

PIA TriState Annual Conference

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Contents [COVER STORY ] 18

2015 PIANJ/PIANY ANNUAL CONFERENCE

[FEATURES] 4

Foreword: Boundaries Steve Acunto, Publisher

6

Insight: Reflections Peter H. Bickford

10

On the Level: Fifteen Years Later, Scary Computer Threats Really Do Exist N. Stephen Ruchman, CPIA

12

The Beginning…

Chris Paradiso

15

In the Associations: IBANY’s Emerging Leader Program Honors 17 Young Insurance Professionals

24

In the News: Agency Performance Partners Celebrates One-Year Anniversary

28

In the Associations: IIABNY Honors Leaders

30

In the Associations: The TriCounty I.I.A. Installs 2015-16 O&Ds I.I.I. Receives 2015 Innovation Award

32

On My Radar: Does the AIA Construction Contract Avoid Litigation?

Barry Zalma

34

Looking Back: 1990

June 29, 2015 | volume 126 number 12 36

Guest Opinion: Dr. Caron Wants to Heal, Unite Americans Jane M. Orient, MD

37

Classifieds

[ AD FEATURES] 21

PIA: Workers’ Comp Program

25

LICONY: Life Without the Life Insurance Industry

18

10

28

Like us on Facebook…

The Insurance Advocate Magazine INSURANCE ADVOCATE / June 29, 2015 3

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[ FORE WORD ]

Steve Acunto

Boundaries ast on the heels of the announcement that Anthony Albanese will fill the role of Acting Supt. of the DFS to succeed Benjamin Lawsky comes a letter to the Governor from Elizabeth Warren calling upon him to find and name a prosecutorial czar to shake up the financial services sector – largely the banks – where they live, i.e. here. The socialist herself knows few bounds and wants that same license for prosecutors so they can hammer the sector into oblivion or into a new way of underwriting that solves her social agenda.

That’s just what the State needs, a worse reputation as being unfriendly to business and business leaders.

Meanwhile back in the sane world, Ben Lawsky issued a memo to staff explaining that he is “transitioning out of my role as superintendent next week” and that his current chief of staff, Albanese, “will take over as the acting superintendent while the governor’s office conducts a search for a permanent replacement.”

Albanese has been chief of staff since 2011 and is seen as a tough but fairminded man. Not much to interpret in the appointment. An e-mail from New York Insurance Association President Ellen Melchionni stated that the NYIA “looks forward to working with Acting Superintendent Albanese. We hope he builds on Superintendent Lawsky’s efforts to curb fraud and create efficiencies within DFS. NYIA encourages DFS during this next phase of leadership to further its mission of fostering the growth of the financial industry in New York and spur state economic development. Superintendent Lawsky acknowledged in his final address to NYIA that insurance is incredibly important to New York and is the core of DFS. NYIA believes that there is great opportunity for the state to create a robust regulatory framework that supports innovation and business-friendly initiatives.”

Speaking of the NYIA, the association (NYIA) honored Mark Prechtl with the Chair’s Distinguished Service Award at the association’s annual conference held recently. Prechtl is executive vice president and chief executive officer of Chautauqua Patrons Insurance Company. In his current role, he is the primary representative to industry and trade organizations, community and charitable organizations, government regulators and rating organizations. He joined the company in 1988 as a claim adjuster. In 1992 he was promoted to claim manager and in 1997 to his current position. He started his career in 1985 as a commercial underwriter with an independent insurance agency.

Prechtl serves on the NYIA Board of Directors, representing his company since 2009. He has served on a variety of committees during his more than 25 years of involvement with the association, currently as a member of the Education and Conference Planning Committee, Membership Committee and Public Relations Committee. He also volunteers his time with the United Way of Southern Chautauqua County. Prechtl is a graduate of LeMoyne College with a degree in business marketing. Chautauqua Patrons Insurance Company is based in Jamestown, N.Y. and has been serving New Yorkers since 1877. The company writes personal and commercial insurance, including homeowners, business owners, farmowners and inland marine coverage. Chautauqua Patrons is rated A- (Excellent) by A.M. Best.

We congratulate Mark and Patrons.[IA]

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VOLUME 126, NUMBER 12 JUNE 29, 2015

EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Peter H. Bickford Jamie Deapo Kelly Donahue-Piro Michael Loguercio Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Creative Director Gina Marie Balog 914-966-3180, x113 g@cinn.com

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PROOF READER Maria Vano mariavano9@gmail.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x117 circulation@cinn.com PUBLISHED BY CINN Group P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 966-3264 www.cinn.com | info@cinn.com President and CEO Steve Acunto

CINN G R O U P, I N C .

INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 20 times a year, and once a month in July, August, September and December by CINN ESR, Inc., 131 Alta Avenue, Yonkers, NY 10705. Periodical postage paid at Yonkers, NY and additional mailing offices.

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[ INSIGHT ]

By Peter H. Bickford

Reflections

W

hatever else you may think about Governor Cuomo’s policies, you have to appreciate his ability to be ahead of the field when it comes to tooting one’s horn. Take, for instance, his e-mail blast within minutes of the end of the legislative session. The session gaveled out at 12:18 a.m. Friday, April 25th, and less than an hour and a

ignore. Smooth to say the least.

This media-savvy flair exhibited by the Governor’s office has trickled down to the agency level unevenly at best. The Department of Financial Services, for instance, has a very checkered record when it comes to the effectiveness of its pronouncements. Yes, it does quite well in publicizing its successes in vanquishing

Press releases announcing billion dollar fines have a built-in “shock and awe” affect whether or not done with any panache.

Peter H. Bickford

half later – at 1:43 a.m. – the Governor’s e-mail with the subject line: “We’ve reached a broad, comprehensive agreement here in Albany” was in my inbox.

The e-mail included a link to a full press package detailing the end-of-session agreements reached with the legislators including videos, photos, quotations and graphics. Considering the oft-expressed belief that the session would be noted more for indictments than legislative achievements, the press package was quite remarkable. It heralded the few final legislative compromises as major triumphs of hard work and diligence by all participants and parties, even praising his opponents, while downplaying or ignoring unachieved goals, unrealized expectations or clear defeats.

This kind of instant, glossy coverage of gubernatorial achievements has come to be expected from the Cuomo camp – similar highly effective, professional packages accompanied the Gov’s State-of-theState speech and his budget unveiling, among other signature events. Sure that’s politics, but the artistry displayed – making the most minimal or mundane legislative or administrative effort appear as a grand or sublime achievement – is hard to 6 June 29, 2015 / INSURANCE ADVOCATE

wrongdoers – particularly in the banking world. Press releases announcing billion dollar fines have a built-in “shock and awe” affect whether or not done with any panache. They simply do not need to be dressed up to have the desired impact.

But even in its non-dramatic, functional efforts the DFS reports share little of the flair and style of the issuances from the Gov’s offices. Many people would argue that state agencies should not be “playing politics” with their reports and media releases, and that it would be inappropriate for DFS, for instance, to issue similar glossy, finely dressed presentations. For the Gov to do this is OK, but not for his agencies.

To argue that state agencies do not issue political statements is, of course, a fantasy. A cursory look at the press releases issued by DFS over the past several years reflects an uninhibited propensity for backslapping, with the largest portion of DFS releases issued in the name of the Governor and not in the name of the department or the superintendent. When the administration wants to make a political statement, it is not limited to the releases from the Gov’s office alone.

More to the point, however, is the fact that the DFS reports on the businesses it regulates are bland, enforcement-centric pronouncements with little effort to report on industry achievements or activity. The most depressing example is the DFS Annual Report. Although intended to be a report primarily on the businesses the DFS is charged to regulate, it is essentially a list of DFS enforcement actions and a bunch of statistics and other data that is lacking in analysis or context. It is largely devoid of meaningful narrative – other than in touting its own actions – and has all the spirit of a functionary intent on doing the least possible to comply with the requirements of the job. The report diminishes the insurance business to mere inconsequential significance, with far more attention to the banking industry, a strange result given that direct tax and assessment revenues generated by the insurance industry in the state are more than ten times those generated by state regulated banks.

Stranger still is that a quasi-agency under the control of the same superintendent has managed to issue a brilliant, professional, informative annual report. Hard as it may seem, I am referring to the annual report of the much-maligned New York Liquidation Bureau. After many years of trying to obfuscate the data on receiverships in the state, the Bureau has done an about-face the past few years to produce and post on its website a much more helpful and informative package. The irony is that this about-face at the Liquidation Bureau has occurred since the creation of the DFS and under the leadership of the same superintendent responsible for the industry-unfriendly DFS annual report. It is almost as if the Gov’s media people got lost on their way to the DFS and ended up at the Liquidation Bureau instead. Sure the report puts the best light on the efforts of the Bureau, but it also provides some valuable information in an organized, readable format. If the Liquidation Bureau can do so effectively, other agencies – particularly the superintendent’s own DFS – should take note. continued on page 8

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[ INSIGHT ] continued from page 6

This is not to say that the Liquidation Bureau is free from its well-deserved slings and arrows. It is still a rogue agency with no discernable statutory basis and replete with inconsistencies and contradictions.

Contrary to logic, for instance, estates under the management of the Bureau are no longer subject to regulatory oversight, examination or statutory reporting.

Although the law now requires an annual audit of the Bureau and each estate under

its management, there is no agency or other entity responsible for reviewing the audits or their assumptions. There is no independent party legally capable of reviewing or examining the actions of the Bureau or its procedures and processes.

Court supervision is narrow, condescending and ineffective in protecting claimants or in overseeing the actions of the Bureau, and the stench of the Executive Life debacle lingers.

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and reduced staff and has fully and effectively documented its progress in its wellexecuted annual report. It is an example of how presentation can shape perceptions about a subject or the issuer. With a little more effort with its own reports, the DFS could improve perception and effectiveness in carrying out its regulatory mandate. It could also serve as a first step in improving perceptions of the DFS and its mission with the industry.[IA] Peter Bickford has over four decades of experience in the insurance and reinsurance business, with particular focus on regulatory, solvency, agency, alternative market and dispute resolution issues. In addition to his experience as a practicing attorney, he has been an executive officer of both a life insurance company and of a property/casualty insurance and reinsurance facility. A complete biography for Mr. Bickford may be accessed at www.pbnylaw.com.

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[ ON TH E LEVEL ]

By N. Stephen Ruchman, CPIA

Fifteen Years Later, Scary Computer Threats Really Do Exist

A

nyone who knows me knows that my grandsons are the joy of my life.

I spend as much time as I can with them—I go to their school events; enjoy having them visit at home; and I try to make as many games as I can to watch them play soccer. They are quite good. In fact, I would call them naturals at the sport.

Maybe in 2000-and-10-minutes everything was still working, and we were relieved that nothing happened, but cyber-crime is real and it’s happening every day. This crisis is not over-hyped. Only recently, the IRS was hacked by Russian hackers, who stole millions in refunds. Likewise, I was watching the news this week and saw a story about

While cyber-liability is probably the biggest exposure any business faces today, it amazes me that so few of us have actually invested in coverage to protect ourselves.

N. Stephen Ruchman

Recently, while I was watching my boys at a game, I began to wax nostalgic. It amazes me that they are 15 years old this year—Fifteen! The time has gone so quickly and yet so much has changed since the year 2000—or, as we may remember it, Y2K. That got me thinking back… What a tough year for insurance agents. It was so hard to sell coverage in 1999, because nobody wanted to buy insurance. The notorious Millennium bug, a computer glitch caused by programmers who set dates to automatically update with the assumption that the subsequent year would begin with 19.., kept everyone away.

You couldn’t place a risk having to do with computers or anything – the carriers were sure the world was going to blow up at midnight. People weren’t sure they would have power, and they certainly weren’t sure what would become of their coverage or their companies. So, why get insurance?

The crisis put IT on the map, and it scared the heck out of everyone.

Well, January 2000 came and went, and everything was still working. It was a huge relief, but it gave IT a black eye. To this day, we remember it as a “Chicken Little” scenario.

Now our big worry is cyber liability.

10 June 29, 2015 / INSURANCE ADVOCATE

new apps that engage owners of mobile devices, and they don’t even realize that downloading a seemingly benign program gives hackers access to enter your phone, iPad and other computers. The thought is frightening.

What’s worse is that this is only the tip of the iceberg and I don’t think hacking is going to stop. It will only become more sophisticated and prevalent, and it will not go away. I don’t think a day goes by that we don’t hear a news story about a retailer, financial institution or medical organization that has fallen victim to cyber-crime, and it’s inevitable that it will reach the insurance industry. There are very few insurance agents who can sustain the financial cost of having their system hacked into.

While cyber-liability is probably the biggest exposure any business faces today, it amazes me that so few of us have actually invested in coverage to protect ourselves.

As I’ve said in the past, all it takes is a few agents to have a claim and everyone will be running to the door to buy the coverage. But I’d hate to be that first claim.

The current New York State Department of Financial Services Superintendent, Benjamin Lawsky, has

made cyber-crime a priority. But, he is focused mainly on banks and companies, rather than agencies themselves. Agents need to take the same advice they would give their clients; do an honest assessment of your exposure and make sure you and your business are covered. And, as we would tell any of our clients, not all cyber policies in the market are equal. Some BOPs give minimal coverage and even some package policies have minimal coverage, which as far as I’m concerned is like having nothing. I suggest agents shop various products available and include the PIA product, underwritten by the Philadelphia Insurance Co., which I think is a superior product, with eight insuring agreements that allows coverage to be customized based on an agency’s unique needs.

Agents may put off purchasing cyber coverage, assuming it’s too expensive. But not having coverage is a much more expensive risk to assume. Unlike Y2K, cybercrime is not over-hyped. I hope someday my grandsons and I will reminisce about the days when hackers were scary and the personal data we keep about ourselves and our clients was perilously exposed to criminals. Until then, I know I will sleep a little more soundly knowing there is coverage available and I’ve done all I can do to protect my business. Have you covered yours? [IA] N. Stephen Ruchman, CPIA, is a retired independent agent and founder of Ruchman Associates, Inc. the agency he started in 1961. A past president of the Professional Insurance Agents of New York State, Inc., he is an active supporter of PIANY, and he has sat on or chaired nearly every committee including the Executive Committee and the Long Island Advisory Council and PIANY’s Political Action Committee.

He can be reached via email at: nsruchman@gmail.com.

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To all persons or entities interested in the affairs of

RED ROCK INSURANCE COMPANY Notice is Hereby Given: Benjamin M. Lawsky, Superintendent of Financial Services of the State of New York (“Superintendent”), has been appointed by an order (the “Order”) of the Supreme Court of the State of New York, New York County (“Court”), entered on May 28, 2015, as the ancillary receiver (the “Ancillary Receiver”) of Red Rock Insurance Company (“Red Rock”) with all the rights and obligations granted to and imposed upon him pursuant to New York Insurance Law (“Insurance Law”) Article 74. The Ancillary Receiver has, pursuant to Insurance Law Article 74, appointed Scott D. Fischer, Acting Special Deputy Superintendent (the “Acting Special Deputy”), as his agent to carry out his duties as Ancillary Receiver. The Acting Special Deputy carries out his duties through the New York Liquidation Bureau, 110 William Street, New York, New York 10038. The Order provides: I. All persons are permanently enjoined and restrained from commencing or prosecuting any actions, lawsuits, or proceedings against Red Rock, the Superintendent as Ancillary Receiver, or the New York Liquidation Bureau, its employees, attorneys, or agents, with respect to this proceeding or in the discharge of their duties under Insurance Law Article 74.

II. All persons are permanently enjoined and restrained from obtaining preferences, judgments, attachments, or other liens, or making any levy against Red Rock’s property located in the State of New York or any part thereof.

III. All persons or entities having property, papers (including attorney work product and documents held by attorneys), and/or information located in the State of New York, including, but not limited to, insurance policies, underwriting data, claims files (electronic or paper), and/or software programs owned by, belonging to, or relating to Red Rock, shall preserve such property and/or such information and, upon the Ancillary Receiver’s request and direction, immediately assign, transfer, turn over, and deliver such property and/or information to the Ancillary Receiver.

IV. This proceeding shall terminate once the workers’ compensation claim(s) of Red Rock’s one known New York claimant is/are adjudicated, without further application to the Court.

V. Immunity is extended to the Superintendent in his capacity as Ancillary Receiver of Red Rock, and his successors in office, the New York Liquidation Bureau, and their agents and employees, for any cause of action of any nature against them, individually or jointly, for any act or omission when acting in good faith, in accordance with the orders of the Court, or in the performance of their duties pursuant to Insurance Law Article 74.

VI. The Ancillary Receiver may at any time make further application to the Court for such further and different relief as he sees fit.

VII. The court shall retain jurisdiction over this matter for all purposes.

VIII. All communications relating to Red Rock and to the Ancillary Receivership Proceeding thereof should be addressed to: New York Liquidation Bureau, 110 William Street, 15th Floor, New York, New York 10038, (212) 341-6241.

BENJAMIN M. LAWSKY, Superintendent of Financial Services of the State of New York as Ancillary Receiver of Red Rock Insurance Company. SCOTT D. FISCHER, Acting Special Deputy Superintendent and Agent for the Superintendent as Ancillary Receiver of Red Rock Insurance Company.

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[ THE SOCI AL NOTEBOOK ]

By Chris Paradiso

The Beginning…

A

re you confused and overwhelmed by social media and where to begin? Well, don’t feel bad, most insurance agency owners are. In this article I provide a few of the best social media sites for insurance agency owners and why I feel you and your agency need to be there.

First, when considering your insurance agency’s online marketing strategy, your website MUST come first. It’s very important to your marketing ROI. Agency own-

er that uses the majority of them eventually. Decide which ones (three or more) will benefit your agency most and go from there.

1. Facebook Facebook was launched in February 2004 as a website for college students. It was launched from the inside of a dorm room. Facebook has come a long way in a short eleven years. Now, with an estimated one billion active users, it is ranked as

Did you know there are more than 100 thriving social media sites online today and more popping up on a daily basis? …it’s enough to make your head spin!

Chris Paradiso

ers must think of it as sort of a “base camp” that you will connect to or from any number of external points. Your agency’s website is property owned by you the agency owner, whereas social media pages are owned by someone else. Look at social media sites as simply a vehicle to get your agency’s message or brand out there and to drive traffic back to what you have control over. Still, getting “social” is an important component to any marketing plan as social media continues to grow in popularity.

Did you know there are more than 100 thriving social media sites online today and more popping up on a daily basis?

(You can see them here at Wikipedia, http://en.wikipedia.org/wiki/Li st_of_social_networking_websites.) With so many social sites, it’s enough to make your head spin!

So, where do you start when deciding what sites to include in your marketing strategy?

Here is my personal list. You don’t have to do them all right off the bat but I would recommend that you put a strategy togeth12 June 29, 2015 / INSURANCE ADVOCATE

the most-used social networking service in the world and that stat comes from the number of active monthly users.

Luckily for you and your agency, starting a Facebook business page and tapping into the power of Facebook is very easy.

Once your agency’s page is created, users ‘like’ it (opt-in to get your posts) and your news will be posted to their ‘wall.’

Remember, you and your agency will have to create a budget because it is pay-to-play and if you want your agency’s posts to be seen, you will have to pay to promote them.

The Facebook interface makes it easy for your fans to ‘like’ or share your posts and when they do, their friends (the average Facebook user has 145 friends) will see this activity and/or post, therefore putting your agency’s brand (or your personal brand) in front of an audience that you may not normally have access to.

Why start with Facebook or why maintain an emphasis on Facebook? Well that’s easy to answer. It is because the audience is getting older on Facebook and if you’re an insurance agent, you’re not interested

in insuring 18-year-olds. You are interested in insuring the older, more mature drivers, right? With Instagram taking over the audience of 13-24-year-olds, Facebook is only improving for us agency owners and the prospect list continues to improve in this social arena.

2. Twitter: Tweet Tweet A micro-blogging social media site that was started in 2004, Twitter has an estimated 350 million users world-wide. It has been described as SMS of the internet, because posts are short, 140 characters or less, which makes it sweet and to-thepoint.

Twitter is a tidal wave of information, but it’s important to remember it only lasts seven seconds – it hits fast. Posts come in at 140 characters or less and can be organized via hashtags (#). Hashtags play a huge role in the world of Twitter so go to www.hashtags.org to learn more about popular tags that are out there. Topics range from totally practical (I often search #Insurance) to the absolutely absurd (#GymPetPeeve). You must get creative and a little bold to be seen, so have a strategy.

Twitter differs from Facebook in that users ‘follow’ each other. If someone follows you, you can follow them back, but it’s not required. Therefore it is easier to gain a following, but the followers may not be as targeted as they are on Facebook.

I have found that Twitter is an awesome way to connect with people, business owners and/or other businesses participating in the same event. Following a hashtag at a concert, insurance conference, live performance or webinar creates a richer experience (my personal feeling). As a business owner, you can utilize this at events your agency participates in (we do here at Paradiso Insurance and for our Flag Week celebration it’s #FlagsFromParadisoIns, hope you look us up). Try it! I’ll bet you’d be blown away by the response and the effect it has on you and your agency.

3. YouTube (Visual and Music) YouTube is a video sharing social media site that is owned by Google. This is a very important social site because we

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[ T H E S O C I A L NOTEBOOK ] all know Google makes the rules. Some facts on YouTube are: • YouTube has more than one billion users • Every day people watch hundreds of millions of hours on YouTube and generate billions of views • The number of hours people are watching YouTube each month is up 50%, year-over-year • 300 hours of video are uploaded to YouTube every minute • 60% of a creator’s views comes from outside their home country • YouTube is localized in 75 countries and available in 61 languages • Half of YouTube views are on mobile devices • Mobile revenue on YouTube is up over 100% (Stats provided by www.youtube.com) As an agency owner, using video in your online marketing strategy is just as important as your other online and social strategies. Our agency uses YouTube videos to say Thank You to our clients along with wishing them a happy birthday and to reach out to them for many other holidays.

YouTube will also play a huge role in your agency’s digital marketing strategy because you will have a much better email open rate with either a great visual or a YouTube video. Your agency needs to be in the YouTube world.

4. Google+ (The Power of a Circle) Google is a powerhouse, this is no surprise. Originally launched as a search engine in 1996, Google has continually added, updated and created new products that will appeal to its one billion unique visitors per month.

Google Plus was introduced in June 2011 for personal use and in November of 2011 it was opened up to the businesses and brands. Some of the features of Google+ include: Circles, Hangouts, Messenger, Instant Upload, Hashtags and more. These products are definitely designed with the user in mind. With this being said, please get your agency’s Google+ page opened up as soon as you finish reading this article.

Even though this is Google’s fourth go at a social media site, you cannot deny the importance of adding your agency’s brand

…LinkedIn is THE premier B2B (Business-to-Business) social networking site.

LinkedIn gets two new members every second, putting it at 145 million active users in more than 198 countries. or personal brand there, if for search engine rankings (SEO) alone. Social media plays a huge role in search engines so don’t ignore social media just because you may not like it.

To compete against the Lizard and other direct writers, social media can be our best friend because it helps even out the playing field.

5. LinkedIn Founded in 2002 and then launched in 2003, LinkedIn is THE premier B2B (Business-to-Business) social networking site. LinkedIn gets two new members every second, putting it at 145 million active users in more than 198 countries.

Traditionally viewed as the spot to put your resume and search for a job, LinkedIn has grown into a robust social networking site. From job listings to interest groups (there are more than 910K LinkedIn groups) there are great benefits to keeping your profile up-to-date (you need to be an AllStar Profile). Look at it like an afterhours networking event: put on your suit, have the right attitude, add a smile to your face and be on your best behavior because you never know what kind of business leads you’re going to get.

I always recommend dedicating at least an hour or so a week to maintaining your LinkedIn profile because it’s like a full-out business card where prospects get to understand your brand as well as who and what you stand for. Also, be sure to add your agency listing, and update it as well.

Use your LinkedIn agency profile page like a resume for your business.

6. Pinterest The world has gone to visual content marketing and if your products are visually appealing, then this social media site is for

you because the rest of the world is here.

Pinterest is a visual board-styled social photo sharing site that was launched in 2009. The mission is to connect everyone in the world through shared taste and the things that they find interesting. This is one of the best social sites you can go on to find commonality, which will help you and your insurance agency to build trust.

Nothing is ever purchased without TRUST. Users find and create theme-based boards, populating these ‘boards’ with a ‘Pin It’ button. Pins may be divided into pictures, videos, discussions, and gifts.

Users may follow anyone or any brand. Users can also ‘re-pin’ your pinned items. Companies with products should pin photos, insurance agencies can pin houses or classic cars they insure, and pictures of the agency’s staff. This will help you and your agency to gain a huge following and fast. Another great opportunity within the world of Pinterest is the ability to hashtag and backlink within your Pins. That could be great for your agency’s website.

7. Instagram Instagram opened in October 2010 and now has 350 million daily users (stat from expanddrambling). Instagram is an online mobile photo-sharing social media site owned by Facebook. Instagram does other social sharing such as video sharing and social media networking. Instagram services and enables its users to take pictures and videos and share them on a variety of social networking platforms, such as Facebook, Pinterest, Twitter and Flickr. There are other social sites too. A distinctive feature is that it confines photos to a square shape, similar to Kodak Instamatic or Polaroid images, which is in contrast to the 4:3 aspect ratio which is typically used by mobile (smart phones) device cameras.

Users can also apply digital filters to their own. You can also post videos – Instagram’s maximum duration for videos is 15 seconds.

8. Ryze Started in 2001, Ryze is a social networking site for professionals – particularly continued on page 14

INSURANCE ADVOCATE / June 29, 2015 13

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[ THE SOCIA L NOTEBOOK ] continued from page 13

entrepreneurs. It’s free to join and there are paid memberships available. There are currently over one million professionals worldwide, which is small compared to the other sites we have talked about.

More than 1000 organizations host networks on Ryze. According to their website, networks on Ryze let existing organizations and communities, in addition to new ones, use Ryze’s technology to connect their members with each other (a powerful networking tool).

As of this article, Ryze is not accepting new members but it sounds like shortly they will reopen it.

How intriguing is that, they halted all new membership!

9. Talkbiznow Do you write business insurance? If so, it’s time you look at Talkbiznow, a webbased business community that provides business services for small businesses and professionals. In addition to the basic functionality of creating a profile and connecting with others in the social world, users can manage a calendar, store files (up to 50MG of free space, but of course you can purchase more if you so choose!), host webinars, manage all other social media sites with “Social One” and lots more. Take a look at this social site if you want to meet others in the business social world.

The company’s mission is to simplify the essential business services and seamlessly integrate and deliver them through the internet for free. Yes, for free! Making it possible for businesses of all sizes, from single member businesses to large businesses to network, collaborate and essentially expand their services in avenues they might not have explored before.

Signing up is very easy and the profile builder and management is user-friendly.

We all love the free collaboration and desktop services: file sharing, web conferencing and voice conferencing.

This is a place to explore and check out. Hope you enjoy.

10. Affluence This is a social media site for the “affluent.” This is like no other social site. In fact, you must prove your worth before you can even join Affluence! Yes this is 14 June 29, 2015 / INSURANCE ADVOCATE

Good luck and I hope you have great success in the social world. And remember, social media is not about you; it is all about your audience! intriguing and it might work for you or your agency!

Affluence is a private social network where “accomplished individuals” connect, share information, and engage in meaningful conversations. Members also enjoy exclusive, high-quality content and feature advice from many different industry experts on subjects such as art, technology, insurance and travel.

So, if you fall in the income range of a “verifiable minimum household net worth of $1 million (US) or annual household income of $200,000,” then this most certainly could be the spot for you! This is a social site for those who insure high-net worth individuals and those who want to insure up. This is a great social site for those agencies that insure those in very affluent areas. Hope you can make the cut!

11. Quora Not long ago, LinkedIn disabled their popular Answers feature; Quora is a great place for small business owners or smaller agency owners to be. Benefits of Quora: • Agency Blog topic ideas: Quora is an excellent resource to find trending topics that you could incorporate into your agency blog posts.

• Establish thought leadership through Quora.

• Connecting with others: I mean “connecting” in the social media way, of course. You can set up your Quora account by connecting it with your Facebook or Twitter pages or several other social sites. Once you’re connected and engaged in Q&As, you may find a whole slew of new followers who could potentially follow you on your other social networks. Becoming an expert in a certain industry where people come to you to ask certain questions is a great way to get business from educating others with a small amount of time invested.

• Research & Development: Let’s say you have an idea for a new clothing line made out of bicycle tubes but you’re not in a position to hire a focus group. Use Quora instead! Under the topic of clothing or designer clothes you could ask, “Would you wear an upcycled clothing line made out of tires?” You just never know what you may find out.

• Tighten the Talk: So, if you’re in a quandary over Quora, PLEASE don’t be! Quora should be seriously considered as a part of your agency’s online marketing strategy, especially if you’re just getting your feet wet in the social media arena. Quora offers a clean and very easy-to-navigate interface, especially now that LinkedIn Answers is no longer available. This is a wonderful resource for small business owners and could be a great place for your agency to find prospects and sell more insurance.

So with all these sites (and this is just a few of them), do you still think you don’t need a full-time social media marketing person in your agency? This question answers itself. Take the time to look at these sites; you do not have to jump into all these right this second. Or you can hire a fulltime social media marketing person to put together an action plan. Good luck and I hope you have great success in the social world. And remember, social media is not about you; it is all about your audience![IA] Christopher Paradiso, CPIA, is President of Paradiso Financial & Insurance Service. He has been acknowledged by several insurance publications as a leader in the industry for his use of digital marketing and social media to help brand his agency and promote other small businesses within his community.

Chris has also been recognized for his charity work with The Connecticut Children’s Medical Center.

In 2011, Chris introduced “Paradiso Presents LLC,” a social media program aimed at teaching small agencies to not only survive, but compete in today’s complex online marketing world.

Chris resides in Stafford Springs, CT with his wife and two children, Mia and Gianni.

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[ IN THE ASSOCIATIONS ]

IBANY’s Emerging Leader Program Honors 17 Young Insurance Professionals “I stumbled into the insurance world quite by accident.”

“The insurance business found me.”

“Insurance was not part of my initial plan.”

“A career in the insurance industry was not something I had considered.”

Those statements come from honorees in the Emerging Leader program, established this year by the Insurance Brokers’ Association of the State of New York (IBANY). And they are fairly typical sentiments. Unless they have a parent in the industry, few youngsters will answer “Insurance broker” to the question “What do you want to be when you grow up?” or choose their college major with a career in insurance as their objective.

What young people do want in a career is the opportunity to do interesting work, to help others, and to be rewarded and recognized for a job well done.

This is why IBANY, which represents the interests of leading commercial insurance producers in the New York metro area, created the Emerging Leader program.

IBANY’s leaders wanted to give the association’s member firms a way to recognize and support the work of their top young professionals. They also wanted to raise the profile of the insurance industry as a clear career choice for talented young people, rather than the chance it often is — a field where no two days are the same, and where, whether they work behind the scenes or on the front lines, they will be making a difference in other people’s lives.

The board placed this idea in the hands of a task force, which created the Emerging Leader program.

Emerging Leader honorees must be 40 or younger with a minimum of three years and a maximum of 10 as insurance industry professionals. Their employers must be IBANY members, and they may not be senior-level officers at their firms.

The Emerging Leader program has

IBANY’S INNAUGURAL CLASS OF EMERGING LEADERS (L-R): TYLER NICKELS, DISTINGUISHED PROGRAMS; PETER SHALOUB, SENECA; JENNIFER ALIMONDA, STERLINGRISK; NICHOLAS BOZZI, THE HARTFORD; BRIAN ROBERTS, CNA; DONALD POSTER, JR., ALLIANT; TIM O’SHAUGHNESSY, ACE USA; PETER SOLLECITO, FOA & SON; DANIELA PALMIERI, BHSI; RYAN DARRAGH, CRC; DANIEL EHRHARDT, IRONSHORE; MELICA PANG, WFIS; MARK FOX, PREFERRED CONCEPTS; YIANA STAVRAKIS, AMWINS; CHRISTINA WARNER, CHUBB; AND VANESSA MARCHAND, PHYSICIAN’S RECIPROCAL. NOT PICTURED, JESSICA CULLEN, ARTHUR J. GALLAGHER

two levels. IBANY member companies designate their own Emerging Leaders.

From that group of designees, IBANY’s Board of Directors, acting on the recommendations of the IBANY Awards Committee, selects the Emerging Leaders of the Year.

In making its recommendations for Emerging Leaders of the Year, the Awards Committee takes into consideration each Emerging Leader’s account growth, commitment, contributions and leadership – both inside and outside the industry – based on materials provided by his or her employer. For the program’s first year, the board chose Emerging Leaders of the Year in four categories: Associate Member, Managing General Agent, Retail Broker and Wholesale Broker.

At a reception in New York on June 17, IBANY President Rubin Alspector and Awards Committee Chair Renee McFadden honored all 17 Emerging Leaders for 2015 and announced the four

Emerging Leaders of the Year, who were given Tiffany crystal awards and will receive complimentary attendance and recognition at all IBANY programs for the ensuing year.

IBANY’s 2015 Emerging Leaders of the Year are: Associate Member category: Daniela Palmieri of Berkshire Hathaway Specialty Insurance. The daughter of Italian immigrants, she credits her success to the work ethic and integrity of character she learned from them, but she notes that she doesn’t have a monopoly on those traits.

“Everyone at my company has the strong character and work ethic that I strive to possess,” she says.

Managing General Agent category: Tyler Nickels, CPCU, of Distinguished Programs. He began his insurance career in administration, then moved into underwriting and now focuses on business continued on page 16

INSURANCE ADVOCATE / June 29, 2015 15

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[ IN THE ASSOCIATIONS ] ance is “to be there in the event of ‘what if.’”

• Peter Sollecito of Foa & Son Corp., whose transition from the personal to the commercial sector wasn’t his idea but has had positive outcomes.

• Christina Warner of Chubb Group of Insurance Companies, who appreciates the mentors who have her back when she steps outside of her comfort zone.

More than one-third of IBANY’s member businesses took the time to participate in the Emerging Leader program in its very first year. That number is telling. It shows

continued from page 15

development. He believes this diverse experience “gives me a well-rounded understanding of our business and the importance of each moving part.” He credits becoming a CPCU with helping his advancement, and he believes strongly in continuous learning.

Retail Broker category: Melica M. Pang of Wells Fargo Insurance Services USA. She lives by the words of the late Steve Jobs – “The only way to do great work is to love what you do” – and is grateful to have work she loves and many supportive mentors. She hopes to be a voice for the industry to other young adults in the city.

Wholesale Broker category: Yiana E. Stavrakis, CPCU, ASLI, of AmWINS Brokerage of New York. She is a firm believer in volunteering – both on the job and with professional associations. The latter “has given me the opportunity to meet senior leaders and highlight my work ethic to those outside my immediate network,” she says. Speaking to college students and mentoring new graduates also keeps her engaged and energized.

The other members of the Emerging Leader class of 2015 are: • Jennifer Alimonda of SterlingRisk Insurance, who began her career at a neighborhood agency.

• Nicholas Bozzi of The Hartford, a second-generation insurance professional currently pursuing his MBA. • Jessica Cullen of Arthur J. Gallagher & Co., who enjoys the exposure to other industries she gets from her work.

• Ryan Darragh of CRC Insurance Services, a new dad who looks to his own late father, also an insurance professional, for inspiration.

• Daniel Ehrhardt of Ironshore, another insurance professional’s son who chose the industry at an early age.

• Mark Fox of Preferred Concepts, LLC, whose mother’s passion for the insurance industry fostered his own interest in it.

• Vanessa Marchand of Physicians’ Reciprocal Insurers, who feels fortunate to have landed in a particularly multifaceted, ever-changing branch of the industry.

• Tim O’Shaughnessy of ACE USA, 16 June 29, 2015 / INSURANCE ADVOCATE

RETAIL BROKER EMERGING LEADER OF THE YEAR MELICA PANG OF WELLS FARGO INSURANCE SERVICES USA ACCEPTS A TROPHY FROM IBANY PRESIDENT RUBIN ALSPECTOR OF MARSH AND MCLENNAN.

who says the relationships he’s formed with his clients and colleagues “make what I do worthwhile.”

• Donald A. Poster, Jr. of Alliant Insurance Services, who thrives on the grateful appreciation he receives when he goes the extra mile for clients.

• Brian Roberts, CPCU, of CNA Insurance, who became a CPCU after picking up the textbook while working in an insurance company mailroom.

• Peter G. Shalhoub, CPCU, of Seneca Insurance, who says the job of insur-

DANIELA PALMIERI OF BERKSHIRE HATHAWAY SPECIALTY INSURANCE ACCEPTS HER ASSOCIATE MEMBER EMERGING LEADER OF THE YEAR AWARD FROM IBANY PRESIDENT RUBIN ALSPECTOR.

YIANA STAVRAKIS OF AMWINS BROKERAGE OF NEW YORK WON IN THE WHOLESALE BROKER CATEGORY PICTURED RECEIVING HER AWARD FROM RUBIN ALSPECTOR.

how strongly those in the insurance industry feel about the importance of reaching out to talented young people.

The message is simple: If you want great opportunity in a diverse and growing field where you can be rewarded and recognized for initiative and intelligence, you should take a look at the insurance industry.

IBANY’s 2015 Emerging Leaders members have all shared that message in their own words. They have written statements about how they got into the industry and why they find it rewarding. These statements appeared in the printed program for the Emerging Leaders reception. They are also being published on the association’s website, IBANY.org, where they will serve as a recruiting tool for future young insurance professionals and future Emerging Leaders.[IA]

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The Insurance Brokers Association of the State of New York salutes

our inaugural class of IBANY Emerging Leaders!

JENNIFER ALIMONDA SterlingRisk Insurance | NICHOLAS BOZZI JR. The Hartford JESSICA CULLEN Arthur J. Gallagher & Co. | RYAN DARRAGH CRC Insurance Services, Inc. DAN EHRHARDT Ironshore | MARK FOX Preferred Concepts, LLC ANESSA MARCHAND Physicians’ Reciprocal Insurers | TIMOTHY O’SHAUGHNESSY ACE USA DONALD A. POSTER JR. Seneca Insurance Company | BRIAN ROBERTS C.N.A. PETER G. SHALHOUB Physicians’ Reciprocal Insurers | PETER SOLLECITO Foa & Son CHRISTINA WARNER Chubb Group of Insurance Companies

Congratuations to Our

2015 EMERGING LEADERS OF THE YEAR

TYLER NICKELS

Distinguished Programs Managing General Agent Category

DANIELA PALMIERI Berkshire Hathaway Specialty Insurance Associate Member Category

MELICA. M. PANG Wells Fargo Insurance Services USA, Inc. Retail Broker Category

YIANA STAVRAKIS AmWINS Brokerage of NY Wholesale Broker Category

The IBANY Emerging Leader program recognizes New York metro area rising stars

IBANY Emerging Leaders have not yet reached a senior-level position, but their track

Visit

to learn more about our Emerging Leaders, the program and

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[ COVER ]

2015 PIANJ/ PIANY A T

housands of agents and insurance industry professionals turned out to see the new and exciting developments to the PIANJ/PIANY Joint Annual Conference at Bally’s Park Place in Atlantic City, N.J. June 7-9. The event included a sold-out trade show; jam-packed education from which agents and their staff could obtain valuable information; sensational networking opportunities, and of course, the always-inspiring NJ-YIP Fun Run to benefit Special Olympics New Jersey.

Perhaps the most evident update was a move away from long formal speeches and a new emphasis on entertainment, including the YIP Nitecap at Bally’s upscale and glamorous Diamond Club on Sunday Night and the Poolside Reception with Jimmy and the Parrots on Monday.

Hundreds turned out for events, featuring music, dancing, drinks and delicious food.

Honoring industry leaders Early at the conference, PIANJ and PIANY recognized retiring ACORD President and CEO Gregory Maciag, who has led the insurance standards and forms organization for several decades, after beginning his career at ACORD in the 1970s. “Greg’s vision and dedication over 40 years has helped insurance agents and carriers with business solutions and the exchange of information that have pushed our industry forward,” said PIANJ pastPresident and National Director, Keith A. Savino, CPIA, who also serves on the ACORD board of directors. “He would have been remarkable in any vocation, and we are fortunate that he chose this path.”

PIANJ past-President and PIA Management Services Director W. Scott Miller, CIC, AAI, also was recognized with a presidential citation for his ongoing guidance of the associations and unwavering

support of professional agents.

“Scott has been a respected and effective leader in the insurance industry for decades, and a PIA member for some 40 years”, PIANJ immediate-past-President Glenn Tippy, CPCU, CPIA, said as he introduced Miller. “It is abundantly apparent that he has a legacy of leadership in our organization.”

Tippy presented a third award before handing the reins over to newly inducted PIANJ President Charles Caruso, CIC CPIA, to longtime PIANJ member and POPULAR COVER BAND JIMMY AND THE PARROTS DURING THE POOLSIDE RECEPTION 18 June 29, 2015 / INSURANCE ADVOCATE

continued on page 20

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[ COVER ]

ANNUAL CONFERENCE

PIANJ NATIONAL DIRECTOR AND ACORD BOARD MEMBER KEITH SAVION PRESENTS GREGORY MACIAG, RETIRING PRESIDENT & CEO WITH THE PIANJ/NY’S SERVICE TO THE INDUSTRY HONOR.

W. SCOTT MILLER CIC, AAI, ACCEPTS A PRESIDENTIAL CITATION FROM PIA IMMEDIATE PAST PRESIDENT GLENN TIPPY, CPCU, CLU.

STEVEN RADESPIEL (L) ACCEPTS THE PIANJ DIRECTOR OF THE YEAR AWARD FROM PIA IMMEDIATE PAST PRESIDENT GLENN TIPPY, CPCU, CLU.

INSURANCE ADVOCATE / June 29, 2015 19

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[ COVER ] continued from page 18

leader, Steven C. Radespiel, as Director of the Year. Tippy cited Radespiel’s service to PIA on the Membership Services/Programs Committee; the Executive/Budget & Finance Committee and the Industry Relations Subcommittee, as well as the Northeast Advisory Council.

He noted Radespiel will serve this upcoming administration as secretary for 201516, continuing a family tradition, as his father also volunteered and served as PIANJ president.

“Steve is a model leader for PIA members,” said Tippy, “Always taking time to foster the good image of both his own agency and the industry in his community, as a member of the Gateway Chamber of Commerce and serving as president of the Teaneck Chamber of Commerce.”

Newly Elected PIANJ Administration PIANJ’s annual change of administration took place Sunday morning and Immediate-past-President Glenn Tippy, CPCU, CLU, publicly recognized his administration during Monday’s networking lunch, asking all of the directors and officers to stand as he introduced the following new administration:

• PIA National Director, Keith A. Savino, CPIA; • Immediate-past-President, Glenn Tippy, CPCU, CLU; • Secretary, Steven C. Radespiel; • Treasurer, Bruce Blum; • Vice President, Rip Bush; • Vice President, Kacy Campion Renna, CIC; • First Vice President, Donald F. LaPenna Jr.; • President, Charles Caruso, CIC, CPIA.

Young Pros Recognized During Monday’s networking luncheon, PIANJ President Charles Caruso also recognized the New Jersey Young Insurance Professionals 2014-15 officers: • Immediate-past-President Casey Yarger, CIC, of Robert Petri & Daughter Insurance Agency in Milltown, N.J. • Secretary/Treasurer Logan True, of True & Associates of Clinton and Westfield, N.J; IMMEDIATE PAST PRESIDENT GLENN TIPPY, CPCU, CLU PASSES THE CEREMONIAL GAVEL TO NEWLY ELECTED PRESIDENT CHARLES J. CARUSO, CIC, CPIA DURING THE PIANJ ANNUAL BUSINESS MEETING SUNDAY MORNING.

• Vice President Aaron Levine of LG Insurance Group in Long Branch, N.J.; and • President Natalie Bruno, CPIA, of D’Agostino Agency in Hammonton, N.J. Caruso praised the Young Insurance Professionals as having a history of “…getting things done. This organization initiates and develops leaders that will take us through the next generations in our industry. But, leadership is not something that can be taught; it must be experienced firsthand. And, that’s where the Young Insurance Professionals comes in,” he said.

“Through participation in YIP, we identify visionaries who don’t just take part in, but create networking and special events; education, legislative initiatives and building tomorrow’s insurance leaders … today.”

DOBI meeting Two top Department of Banking and Insurance officials met with PIANJ directors Monday morning at the conference to discuss important and emerging issues affecting agents and the state’s insurancebuying public. DOBI Commissioner Kenneth E. Kobylowski and Assistant Commissioner William Rader discussed the rising share-economy services such as ride-hailing (Uber and Lyft), Airbnb and Task Rabbit; as well as restrictive underwriting; a private flood market and flood mitigation projects; electronic ID cards; electronic policy delivery; and health policy fees.

Education that puts the ‘Professional’ in PIA Participants had the opportunity to take up to 12 credits through exciting courses offered at the conference, starting Sunday, June 7, with Is this Stuff for Real?

And, More Importantly, How Do We Insure It?, taught by the wildly popular Steve Lyon, CPCU, CIC, CRM, AAI, ARM, AIS, CRIS, CWCP. Throughout the weekend, professionals had several opportunities to earn valuable education that they can use for their business. Monday morning offered a choice of The Rs of Customer Service— Regulations, Rules and Responsibility, taught by Steve Lyon or The Really Big continued on page 22

20 June 29, 2015 / INSURANCE ADVOCATE

6-29-15_INA 6-29-15 7/8/15 4:48 PM Page 21

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[ COVER ] PIANY-YIP President Jennifer DiCristafaro presented the ceremonial YIP team trophy.

NY-YIP and NJYIP have good-heartedly challenged each other for several years to be the fastest team. This year, New Jersey took the win. “The trophy is back home!”

NJYIP president Natalie Bruno exclaimed as she accepted the honor.

Carmon Bannon, Chief Program Development Officer of Special Olympics New Jersey and Special Olympic Athlete, Amy Noctor both spoke to the room, thanking PIA, YIP and the long-time companies and agencies for their continued dedication and support during the postrace breakfast, Bruno MC’d the breakfast THE TOP TWO OFFICIALS FROM THE N. J. DEPARTMENT OF BANKING AND INSURANCE, COMMISSIONER KEN KOBYLOWSKI (LEFT) AND ASSISTANT COMMISSIONER BILL RADER, (RIGHT) CAME TO ATLANTIC CITY TO MEET WITH YOUR PIANJ LEADERS DURING THE PIANJ ANNUAL CONFERENCE. PIANJ PRESIDENT CHARLES J. CARUSO, CIC, CPIA (CENTER) JOINED THEM FOR PHOTOS, INCLUDING A SELFIE, TWEETED AND DISPLAYED DURING THE TRADE SHOW MONDAY MORNING.

continued from page 20

Umbrella Class, taught by Bruno Falvo, CIC, CPCU, ARP. That afternoon packed in even more, with Business in the Home with Falvo; What is ERISA? And, How It Can Cost You Money, taught by Gary Slavin, CIC; and Additional Insureds vs. Contractual Liability, with Lyon.

Education closed the conference as well, with Falvo presenting Errors and Omissions Loss Control by Example, Tuesday morning.

NJYIP Fun Run The PIANJ Young Insurance Professionals celebrated 31 years of raising contributions for Special Olympics New Jersey through the Fun Run on Tuesday morning, as the weather broke in time for runners to take their mark. This year, more than 175 runners and other participants shattered fundraising records, bringing in $145,000 to this single event. To date, PIANJ and NJ-YIP have raised nearly $3.5 million for the athletes and the events in 22 June 29, 2015 / INSURANCE ADVOCATE

ABOVE: “ ... ON YOUR MARKS, GET SET, GOOO” ... THE FUN RUN TO BENEFIT SONJ IS OFF TO A GREAT START. RIGHT: PRESENTATION AT THE FUN RUN BREAKFAST (L-R): CARMON BANNON, CHIEF PROGRAM DEVELOPMENT OFFICER OF SPECIAL OLYMPICS NEW JERSEY; PIANJ-YIP VICE PRESIDENT AARON LEVINE; SPECIAL OLYMPIC ATHLETE AMY NOCTOR AND PIANJ-YIP PRESIDENT NATALIE BRUNO, CPIA.

which they participate.

The runners with the best overall time included: Overall fastest male, Kyle Price (16:34.23); Overall fastest female Victoria Thaler, (20:31.11); Top Team Fundraiser, FMI ($73,375.00); and Top Individual Fundraiser, Ed Francis (ARI) $2700.00.

Another notable moment took place as

celebration with Aaron Levine, recognizing runners and fundraisers.

Save the Date!

Plans are already underway for an even bigger and better show next year at Harrah’s Resort Atlantic City, June 1214, 2016.[IA]

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LIC

[ IN THE NEWS ]

Agency Performance Partners Celebrates One-Year Anniversary Consulting firm shares insight gathered through proprietary agency assessments

E

AST GREENWICH, RI—This month marks the one-year anniversary of Agency Performance Partners, an agency success consultancy led by Kelly Donahue-Piro. “During our first year in business, we’ve been fortunate to work with some of the most forwardthinking independent agencies in the country,” Donahue-Piro says. “It’s been exciting to see these businesses start to transform their operations and it’s been gratifying to be part of the improvement process.”

In its first year of operation, Agency Performance Partners gleaned insight into agency culture, strategies and improvement opportunities through its proprietary 300-plus agency employee questionnaire.

Ten key findings from responses to the firm’s Agency Performance AssessmentTM include: • Where agency mission statements exist, employees are less familiar with them than they should be.

• Many agencies have stated goals, which employees generally view favorably, but few sales people set personal goals.

• Although office morale is generally neutral, low office morale is relatively rare.

• Most agency employees feel that they are part of something special.

• Individuals feel more loyal to their agencies than they think their peers are.

• Between 15% and 25% of agency owners, employees and managers show stress “all the time.”

• Management training and ongoing employee training are lacking in most agencies.

• Four out of five agencies have no formal marketing plan and 75% have no SEO strategy.

• More agencies (58%) use e-mail marketing than maintain a blog (49%) or offer a mobile marketing app (23%).

• Meaningful sales, closing ratio and 24 June 29, 2015 / INSURANCE ADVOCATE

“Without meaningful benchmark and performance data that’s shared throughout the office, it’s hard for employees to focus on what’s important and to recognize success.” retention data is not available and/or broadly shared in the vast majority of agencies.

Donahue-Piro, who formed Agency Performance Partners after working for another firm where she helped 600 agencies improve their operations, offered added insight on the findings.

• Mission & Goals. One-third of respondents said their agency has a mission statement, but only about 25% of employees were able to state it. “Having a mission statement that employees are familiar with is an important first step in building a first-class agency,” Donahue-Piro says.

Nearly half of assessment respondents said their agency has goals in place; another 22% said the agency once did, but aren’t sure if it still does. Three in ten respondents said their agency has no goals. In general, employees liked goals programs the agencies have, with 53% indicating that they “like” or “strongly like” them. Roughly 17% said they do not like the agency goals programs.

• Workplace culture. Roughly half of respondents say agency employee morale is high or increasing. Just 10% describe it as low or dropping.

“Almost as troubling as one in ten employees offering a negative assessment of morale is the 40% or so who say it’s neutral,” Donahue-Piro notes.

“Managers can help increase produc-

tivity and results by addressing morale issues.”

Asked whether they felt they were part of something special, 77% of respondents said “yes.” Respondents say they’re more loyal to their agencies than they think their peers are. Fifty-two percent said they wouldn’t entertain an opportunity if it came around but only 21% felt the same way about their peers.

They also said fellow staff members (25%) and managers (22%) were more likely to show stress “all the time” than were they (17%) or owners (15%). Owners (20%) were more than twice as likely as any other group to be “cool as a cucumber.”

“Stress is not an entirely bad thing, nor would anyone expect an agency to show none,” Donahue-Piro observes.

• Marketing & Sales. Just over 80% of agencies have no marketing plan and only 24% of agencies have an SEO strategy. “It’s hard for agencies to measure marketing success when they have no plan,” Donahue-Piro notes. “Agencies have deployed tactics, such as e-mail marketing, blogging, social media and mobile apps, but are missing opportunities because of their scattershot approach.”

She adds, “They also are lacking metrics to track performance.” Assessment responses show that more than half of people in charge of agency marketing don’t know if they have Google Analytics and more than 70% have not claimed and optimized their Google Local listing.

Sales metrics also are lacking. Seven in ten agencies don’t use sales tracking software, 80% of agencies say closing ratio is not tracked, and 90% of service professionals don’t know their department’s retention rate. “Without meaningful benchmark and performance data that’s shared throughout the office, it’s hard for employees to focus on what’s important and to recognize success,” Donahue-Piro explains. continued on page 33

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LICONY

ADVERTOR IAL

LICONY

Life Without the Life Insurance Industry?

Even One Uninsured Single New Yorker Can Cause a Financial Ripple Effect

By Thomas E. Workman, President & CEO, Life Insurance Council of New York, Inc.

T

he life insurance industry serves a noble purpose in providing critical protection for our families and loved ones—enabling them to move on financially after a death or disability. This year through my column, I am writing about life without the life insurance industry and the resulting void that would be felt by New Yorkers. This month I am focusing my attention on the potential economic impact on families and even the state stemming from uninsured singles.

Unmarried American adults outnumber their married counterparts for the first time since the federal government began tracking that data in 1976, according to the Bureau of Labor Statistics. While we often hear stories about how life insurance protection helped a spouse stay at home with the children or keep the family home, don’t think for one moment that singles don’t need to secure life insurance protection. Singles can also be caregivers, own businesses and have debt. Without the protection of the life insurance industry, who or what will shield relatives or society in general from the cost of the untimely death or disability of single New Yorkers?

Life Insurance For single parents or those singles caring for aging parents and siblings, a life insurance policy is critical to securing the financial protection needed for their loved ones.

Life insurance can help fund care for aging relatives or help a guardian provide the care of a parent. Without this critical financial protection, who will provide that care? If there are other family members, maybe they can help. Or will surviving relatives need government assistance or even become wards of the state?

Also of concern is any debt left behind from outstanding loans without life insurance or the continuation of a small business without key person insurance. Without the life insurance industry providing coverage, these are examples of potentially direct and indirect costs to families and society.

Disability Insurance Unexpected disability can happen to anyone at any age—single or not. According to the U.S. Social Security Administration, just over one in four of today’s 20-year-olds will become disabled before they retire.

Without the life insurance industry, where would the financial protection come from? You may say workers’ compensation, but the majority of disabilities, nearly 90 percent according to “Facts from LIMRA” 2013, are not work related and therefore not covered by workers’ compensation. Most disabilities are borne out of illness rather than accidents.

Absent the life insurance industry, perhaps the best alternative is to set aside funds—in essence self insuring against the risk of disability. The typical duration of a disability is six months. How many people can save that much to cover their living expenses for that long? More troubling, what if the disability is long term? How much savings will be enough to cover the costs without risk of depleting all savings, losing his or her home or other assets, and needing government assistance?

Long Term Care Insurance As more and more people grow older and live longer, another insurance need comes into play—long term care. This need

will grow in New York. In fact, according to the U.S. Census Bureau, 2.6 million people were aged 65 and over in New York in 2010.

That number is expected to increase to 3.1 million by 2020 and 3.6 million by 2040.

While there is no breakdown of singles versus married people that I have found, it is safe to assume that the need for long-term care will be a problem for both groups.

Without long-term care insurance the cost of such care shifts to others. Will government need to offer more in terms of financial assistance?

There should be no question that single New Yorkers need the solutions provided by the life insurance industry. Fortunately, there is a life insurance industry in New York State ready to help. Additional financial assistance from the government is not the answer. Creating public policy that fosters an environment where even more New Yorkers—single or otherwise—appreciate the need for, and secure life insurance protection, is a much more viable option.[IA] Thomas E. Workman is the President and Chief Executive Officer of the Life Insurance Council of New York, Inc. LICONY is the principal voice of the life insurance industry in New York. LICONY works to create and maintain a legislative, regulatory, and judicial environment that encourages its members to conduct and grow their life insurance businesses here in New York State. For stories about New Yorkers who have benefitted greatly from purchasing the products of life insurers, go to www.licony.org, click on “Published Articles” in the NEWSROOM box on the homepage.

O: (212) 986-6181 F: (212) 986-6549 551 Fifth Ave., 29th Floor, New York, NY 10176 website: www.licony.org INSURANCE ADVOCATE / June 29, 2015 25

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[ IN THE ASSOCIATIONS ]

Prechtl Honored by New York Insurance Association

S

ARATOGA SPRINGS, N.Y.—The New York Insurance Association, Inc. (NYIA) honored Mark Precthl with the Chair’s Distinguished Service Award at the association’s annual conference May 28 in Saratoga Springs, N.Y. Prechtl is executive vice president and chief executive officer of Chautauqua Patrons Insurance Company.

“Mark embodies the fundamental purpose of insurance—helping people,” Bernard Turi, NYIA chair and Utica National Insurance Group senior vice president, general counsel, general auditor and chief risk officer said. “He has spent the past 30 years making a difference for his customers and colleagues. He epitomizes the meaning of altruism and the passion he has for helping others is contagious.”

In his current role with Chautauqua Patrons Insurance Company, Prechtl is the primary representative to industry and trade organizations, community and charitable organizations, government regulators and rating organizations. He joined the company in 1988 as a claim adjuster.

In 1992 he was promoted to claims manager and in 1997 to his current position.

He started his career in 1985 as a commer-

“Mark embodies the fundamental purpose of insurance—helping people.

He has spent the past 30 years making a difference for his customers and colleagues. He epitomizes the meaning of altruism and the passion he has for helping others is contagious.”

MARK PRECTHL

cial underwriter with an independent insurance agency.

Prechtl serves on the NYIA Board of Directors, representing his company since 2009. He has served on a variety of committees during his more than 25 years of involvement with the association, currently as a member of the Education and

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Conference Planning Committee, Membership Committee and Public Relations Committee. He also volunteers his time with the United Way of Southern Chautauqua County. Prechtl is a graduate of LeMoyne College with a degree in business marketing.

He resides in Bemus Point, N.Y. with his wife Renee and three children Jillian, Jaclyn and Jennifer.

Chautauqua Patrons Insurance Company is based in Jamestown, N.Y. and has been serving New York customers since 1877. The company writes personal and commercial insurance, including homeowners, business owners, farm owners and inland marine coverage.

Chautauqua Patrons is rated A- (Excellent)

by A.M. Best.[IA] The New York Insurance Association, Inc. (NYIA®) is a state trade association that has represented the property and casualty insurance industry for more than 130 years.

Serving New York, New Jersey, Pennsylvania and Connecticut Since 1889

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6-29-15_INA 6-29-15 7/8/15 4:49 PM Page 28

[ IN THE ASSOCIATIONS ]

IIABNY Honors Leaders Awards given at insurance producer organization’s leadership dinner

C

ooperstown, N.Y.—The Independent Insurance Agents & Brokers of New York recognized excellent performance by insurers, a local trade group, volunteers and associates in a ceremony this evening. Acting for the final time in his capacity as IIABNY chair of the board, James Sutton presented the awards at the association’s 2015 Leadership Dinner, held following its 133rd Annual Business Meeting at the Otesaga Resort Hotel in Cooperstown, New York.

The Outstanding Company Partner Awards went to those insurers that scored the highest in the 2015 IIABNY Industry Index. The index is calculated based on survey responses by New York agents and brokers, judging insurers on criteria such as empowerment and consistency of underwriters and field personnel; technology and documentation; the agency-carrier relationship; and compensation. Sutton gave awards to: • Outstanding Regional Personal Lines Company Partner: Dryden Mutual Insurance Company • Outstanding Regional Commercial Lines Company Partner: Erie & Niagara Insurance Association • Outstanding Super Regional Personal Lines Company Partner: Merchants Insurance Group and NGM Insurance Company (tie) • Outstanding Super Regional Commercial Lines Company Partner: Merchants Insurance Group • Outstanding National Personal Lines Company Partner: The Travelers Companies • Outstanding National Commercial Lines Company Partner: Utica National Insurance Group Jill Muratori, vice-president and counsel of Barrett Associates in Albany, took home

the Vincent Alba Award. This award recognizes an individual who makes an outstanding contribution to IIABNY’s political effectiveness. Sutton cited her “hard work and tenacity” as a major reason for the recent enactment of a law regulating the use of certificates of insurance. The legislation was IIABNY’s highest public policy priority.

Mike Crowley of Crowley Insurance Agency, Inc. in East Syracuse, New York, received the Joel S. Pollack Young Agent of the Year Award. Crowley was honored for his involvement as an officer of the Central New York agents’ association and his work in the community.

Karen Peters, senior vice-president of Rose & Kiernan, Inc. in Albany, received the Distinguished Service Award for outstanding contributions to IIABNY. A member of the IIABNY board of directors since 2011, Peters has served on a number of committees, working groups and task forces. Sutton praised her as one of the association’s “go-to” people for legislative issues.

He specifically praised her work in the effort to get the certificates of insurance bill passed.

Jamie Deapo, assistant vice president of membership and member programs for IIABNY, also received the Distinguished Service Award. Deapo joined IIABNY in 1999 after 15 years as an independent agent.

During his time as an agent, he served as president of the Central New York agents’ association and as a member of the IIABNY board of directors. Sutton praised him as “an unrelenting advocate” on behalf of independent agents. He especially noted the strong relationships Deapo has built with insurance companies on IIABNY’s behalf.

The Thom McDaniel Exemplar Award went to Bob Baxter, CEO of Dryden Mutual Insurance Company. The McDaniel

Award recognizes an insurance company executive, manager or employee who demonstrates unwavering support of the independent agency system. Baxter is known throughout the New York State insurance community for his work with high school students. “His support allows students to experience the insurance industry,” Sutton said, “and many have gone on to pursue successful careers with insurance companies and agencies.”

Steve Zogby of Scalzo, Zogby & Wittig, Inc. in New Hartford, New York received the 1882 Fellow Award, IIABNY’s highest honor, which recognizes the individual member who has most significantly contributed to IIABNY, the industry and his or her community. Zogby was IIABNY chair of the board for the 2007-08 term.

Before and after that, he served as a member of the board of directors and served on and chaired many IIABNY committees.

Sutton also cited Zogby’s leadership in various organizations in the Utica, New York area.

Shelley Roff of Perry & Carroll, Inc. in Elmira, New York will receive the Accredited Customer Service Representative of the Year Award at a ceremony at her agency next month.

The Independent Insurance Agents & Brokers of Suffolk County will be honored as the 2015 Local Association of the Year at a ceremony in Wading River, New York next week. The award goes to the local association that has done the most outstanding job at building relationships between agents, carriers and vendors; advocating on the critical issues to the industry; encouraging professional development among members; and developing consumer knowledge and trust in the independent insurance agency system.[IA]

Receive this summer FREE when you sign up for a 2015-16 membership

Plus • a set of trusted choice© customzed ads • social media audit • local press 28 June 29, 2015 / INSURANCE ADVOCATE

Join Now! CALL ERIC DEFRANSCESCO 800.962.7950 x241 edefrancesco@iiabny.org

www.iiabny.org/join

6-29-15_INA 6-29-15 7/8/15 4:49 PM Page 29

[ IN THE ASSOCIATIONS ]

JIM SUTTON (R) PRESENTS THE 1882 FELLOW AWARD TO STEVE ZOGBY (L)

IIABNY IMMEDIATE PAST CHAIR ANDY KAUFMAN (R) HONORS OUTGOING CHAIR JIM SUTTON (L) AT A RECEPTION FOLLOWING THE IIABNY ANNUAL BUSINESS MEETING.

THE 2015-16 IIABNY BOARD OF DIRECTORS

JIM SUTTON (R) PRESENTS THE DISTINGUISHED SERVICE AWARD TO JAMIE DEAPO (L).

OUTGOING IIABNY CHAIR OF THE BOARD JIM SUTTON (SECOND FROM LEFT) PRESENTS THE OUTSTANDING COMPANY PARTNER AWARD FOR SUPER-REGIONAL COMMERCIAL LINES AND PERSONAL LINES CARRIER TO MERCHANTS INSURANCE GROUP. INSURANCE ADVOCATE / June 29, 2015 29

6-29-15_INA 6-29-15 7/8/15 4:49 PM Page 30

[ IN THE ASSOCIATIONS ]

The TriCounty I.I.A. Installs 2015–2016 Officers and Directors

A

lbertson, New York – New officers and directors took the helm on June 15 during the Long Islandbased TriCounty Independent Insurance Agents Association annual installation dinner and awards ceremony. The gathering, held at Cheateau Briand in Carle Place, NY, set the TriCounty IIAA leadership for the 2015-2016 term. More than 200 agents and brokers, company representatives, vendors and other members of the insurance community joined the festivities of this special occasion starting with a bountiful cocktail reception.

Peter Phillips of Phillips Brokerage, Inc. with offices in Astoria, Bayside and Port Washington, NY was installed as president of TriCounty IIAA by his wife Joanna Phillips. Additional officers and directors were installed by Lisa Lounsbury, CAE, AAI, a Senior Vice President of the Independent Insurance Agents & Brokers of New York, Inc. (IIABNY).

Adam P. Erickson, of Carlstan North Hills Agency, Inc. in Floral Park will assume the position of Vice President and James G .Bastian of Advantage Partners, Inc. based in Astoria was installed as Treasurer. Ron Brunell, CIC of The Signature B&B Companies in Garden City, NY will be the group’s Secretary for the new term.

The TriCounty IIAA also installed the following directors: Dean Aloia, Aloia McKinnon Insurance Brokerage, Brooklyn; Eileen Black, Abatelli Group, Inc., Whitestone, NY; Andrew Chong, ARC Underwriting Partners, Inc., Great Neck, NY; Alex Giraldo, Club Agency Insurance Brokerage, LLC Garden City; Elisa J. Grober of Grober Imbey Agency, Inc., Valley Stream; Neil Levy, CPA, CFP of CBS Coverage Group, Plainview, NY and Christopher Wukovits of AAA of New York Insurance Services, Inc. in Garden City, NY. The ‘Insurance Person of the Year’ award was presented to Lisa Lounsbury for “Outstanding Deeds Furthering the Cause and Ideals of the Independent Insurance 30 June 29, 2015 / INSURANCE ADVOCATE

The ‘Insurance Person of the Year’ award was presented to Lisa Lounsbury for “Outstanding Deeds Furthering the Cause and Ideals of the Independent Insurance Agent.”

Agent.” Lisa is responsible for the ‘for-profit’ and membership activities for the association and serves as president of IAAC, the marketing branch of IIABNY. TriCounty announced awards totaling $12,500 in scholarships this year. $2,500 went to each of three exceptional students of St. John’s School of Risk Management, Swarnema Taparia, Langmia Fonjoe and Thomas Fiorillo. Each student surpassed specified criteria, including insurance related study requirements, a high GPA average and service to the community.

The 2015 St. John’s Education Scholarship Program was sponsored by three major insurance carriers; NBIC, NatGeneral and Safeco.

Winners of two other $2,500 scholarships were announced and certificates were presented at their school’s awards ceremonies. Ariel Avgi, a graduating student from North Shore High School in Glen Head, NY was the Joel S. Pollack Memorial Scholarship award winner for her essay on ‘recommended penalties for texting while driving.’ Ariel was chosen from a large number of submissions from high school seniors in the boroughs of Nassau, Queens and Brooklyn.

The Stephen T. Dooley Community Service Award scholarship went to Yasmin Butt, a graduate of Staten Island Technical School for outstanding community service during his high school years. Checks will be mailed to their chosen colleges to be applied towards tuition or allied expenses.[IA]

I.I.I. Receives 2015 Innovation Award The Insurance Information Institute (I.I.I.) was presented with the Insurance Marketing & Communications Association’s (IMCA) 2015 Innovation Torchbearer Award, given annually to those who have “demonstrated innovative ideas or initiatives impacting the insurance industry.”

“IMCA selected the Insurance Information Institute for this prestigious honor as a result of its exceptional record of seeking to educate consumers about the insurance industry,” said Mark Friedlander, IMCA president and head of corporate communications at The Main Street America Group. “The I.I.I. has effectively and tirelessly served the insurance industry in this capacity for over 50 years. The organization has become the authoritative and unbiased voice for our industry and has innovated in a number of unique ways.”

IMCA cited in its own release on the 2015 Innovation Torchbearer Award the I.I.I.’s high-profile public appearances, such as those before Congressional committees; its policy papers on terrorism and cyber risk insurance coverages; and its expansive use of various social media platforms to share industry information and data.

“The Insurance Information Institute is greatly honored by its receipt of this award,” said Jeanne Salvatore, senior vice president, public affairs, and chief communications officer at the I.I.I., who accepted the honor on its behalf. “The Insurance Marketing & Communications Association (IMCA) represents more than 120 companies, including the top U.S. auto, home, and business insurers, so we recognize how many talented individuals and organizations vie each year for recognition from the IMCA.” USAA (2012), Esurance Insurance Services (2013), and Swiss Re (2014) are the previous IMCA Innovation Torchbearer Award winners.[IA]

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[ ON M Y RADAR ]

By Barry Zalma

Does the AIA Construction Contract Avoid Litigation?

Insured May Effectively Waive Subrogation

S

ubrogation is an equitable remedy where an insurer that pays to indemnify its insured will be able to step into the shoes of the insured and sue any tortfeasor who is responsible for the property damage that its policy of insurance

summary judgment, arguing that the county had agreed to provide insurance for project, and that county had waived its subrogation rights against them and, thus, was not entitled to recover damages.

Property owners and contractors rou-

Like all rights the right of subrogation can be waived. Most Commercial Property Insurance contracts authorize the insured to waive subrogation as long as the waiver happens before the loss and is a clear, unambiguous written agreement.

Barry Zalma

was required to indemnify its insured because of the property damage.

Like all rights the right of subrogation can be waived. Most Commercial Property Insurance contracts authorize the insured to waive subrogation as long as the waiver happens before the loss and is a clear, unambiguous written agreement. When people enter into a construction contract published by the American Institute of Architects (“AIA”), the written agreement includes a waiver of subrogation against each other. What that means in understandable language is that the parties agree – rather than sue each other for tort damages – to rely on their own insurance in the event of a loss. By so doing the builder can charge less to do the work and the owner can be sure to avoid litigation.

FACTS The County, which had entered into construction project contract with general contractor for courthouse renovation, filed suit against general contractor and subcontractors, alleging negligence, breach of implied warranties, and breach of contract, alleging that subcontractor’s negligence was primary cause of fire that occurred during renovation that severely damaged courthouse. Defendants filed motions for 32 June 29, 2015 / INSURANCE ADVOCATE

tinely agree to waive subrogation rights for damages. Here, the parties did so by incorporating an American Institute of Architects (“AIA”) standard form into their contract for the repair of the Jefferson County courthouse. While the repairs were underway, a fire severely damaged the courthouse.

The AIA contract waives subrogation rights for all “damages caused by fire or other perils to the extent covered by property insurance.” The parties now dispute the meaning of the subrogation waiver.

Owner seeks to subrogate all damages unrelated to repairs, arguing that the subrogation waiver applies only to construction-related damages. Contractor argues that all damages covered by Owner’s property insurance policy are waived. Both parties cite other states’ precedent to support their position, and the decision below created a split of authority in our own Court of Appeals. We granted transfer in this matter of first impression to establish the Indiana approach.

On May 20, 2009, a fire destroyed much of the Jefferson County courthouse, located in Madison, Indiana. Jefferson County alleged that the fire began while Daniel Gutapfel—a roofing subcontractor—was soldering copper downspouts

near the wood frame of the courthouse as part of a four-phase plan to remodel and renovate the entire building. The damages far exceeded the remodeling costs, but were fully covered by Jefferson County’s property insurer, which paid Jefferson County under its policy after the fire.

Jefferson County could satisfy its property insurance requirements in one of two ways: either (1) procure a separate policy to cover only the renovations - commonly referred to as “builders-risk insurance” or (2) rely on its existing “all-risk” property insurance policy to cover the entire courthouse, including the renovations. Jefferson County chose to rely on its existing “allrisk” policy that it maintained with St. Paul Fire and Marine Insurance Company (“St. Paul policy”).

Discussion and Decision We must decide whether, under the plain meaning of the AIA contract, property owners waive subrogation rights for construction damages by maintaining “allrisk” property insurance policies that cover both their construction-related damages and their entire property.

The AIA subrogation waiver is wellknown in the construction industry and it plays a critical role in the AIA contract’s scheme of remedying construction losses through insurance claims, not lawsuits.

The court had no choice but to presume the waiver represents the freely bargained agreement of the parties.

The waiver applies to all “damages caused by fire,” but only “to the extent covered by property insurance obtained pursuant to this Paragraph 11.3 or other property insurance applicable to the Work.”

Thus, to determine which fire damages are covered by the subrogation waiver, we must look at everything that follows the phrase “to the extent.” The positioning and plain meaning of the word “covered” restricts the scope of the subrogation waiver based on the source and extent of the property insurance coverage, not the nature of the damages or of the damaged property.

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[ ON MY RADAR ] Waivers of subrogation are important tools for owners of property, whether dealing with contractors or lessees.

property the assurance that regardless of the cause of damage to the property, or who was responsible for the cause, both parties agree that they will rely on their own insurance rather than go to the trouble, inconvenience and expense of litigation. The county and its insurer tried to change the terms of their agreements and the Supreme Court insisted on requiring the parties to rely on their own insurance. [IA]

CONCLUSION The Supreme Court of Indiana, in Board of Com’rs of County of Jefferson v.

Teton Corp., — N.E.3d —-, 2015 WL 2242352 (Ind., 5/13/15), concluded that the plain meaning of the contract defines the scope of the waiver based on the extent and source of coverage, not the nature of the property damaged. Accordingly, it agreed with the majority of jurisdictions that have applied this plain meaning to bar recovery for all damages covered by the same property insurance policy used to cover construction-related damages, commonly referred to as the “any insurance” approach. Because Contractors have shown that Owner’s insurance covered all damages, the subrogation waiver applies to bar Owner’s claim.

The Supreme Court’s holding is supported by the majority of other jurisdictions that have adopted the “any insurance” approach when interpreting similar AIA waivers. The contract also waived all subrogation rights for damages “to the extent covered by property insurance obtained pursuant to this [agreement] or other property insurance applicable to the Work.

Jefferson County agreed to waive its rights to bring this subrogation claim by relying on its existing “all-risk” property insurance policy that covered the Work and all other losses suffered in the courthouse fire. The Supreme Court reached this decision because the plain language of the AIA contract restricts the scope of the waiver based on the source and extent of property insurance coverage, not the nature of the damages. Accordingly summary judgment in favor of Contractors and against Jefferson County was proper.

ZALMA OPINION Waivers of subrogation are important tools for owners of property, whether dealing with contractors or lessees. It gives each party to a contract with an owner of real

Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.

He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ ZalmaLibrary. The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide.

The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http://shop.americanbar.org/eBus/Stor e/ProductDetails.aspx?productId=2146 24, or 800-285-2221 which is presently available.

Legal Disclaimer: The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

[ IN THE NEWS ]

continued from page 24

• Training. Fifty-seven percent of managers say they’ve had no management training. In addition, nearly 80% of all assessment respondents— not just managers—indicate no continuous training program exists in their agency.

“Staff represents an agency’s greatest asset,” Donahue-Piro says. “There’s no good reason for an agency to not have a continuous training program in place to maximize its staff ROI. It also makes no sense to not equip individuals who are leading others.”

“We contracted Agency Performance Partners several months ago to help us leverage our strengths and reduce our inefficiencies,” says Linda Rey, of Rey Insurance in Sleepy Hollow, N.Y. “The firm helped us find areas for improvement and seize opportunities that were right under our noses. We’re happy we met Kelly in her firm’s inaugural year and wish her many more happy years in business.”

“Dealing with unnecessarily high workloads and employee burnout, we brought in Kelly to help find a solution,” says Chris Paradiso, CPIA, of Paradiso Financial & Insurance Services in Stafford Springs, Conn. “She immediately identified our lack of personal lines renewal process and then built a relationship with the team, which led to them quickly buying in to new ways of working. We’re running on all cylinders now and are thrilled to wish Kelly and the entire Agency Performance Partners’ team a happy first anniversary.”

Agencies interested in improving their own performance can contact the company at 401.415.6205, email kelly@agencyperformancepartners.com, engage on social media, or take a 10-question miniassessment at www.agencyperformancepartners.com/test.

Agency Performance Partners helps agencies identify and capitalize on sustainable improvement opportunities.

Specialties include agency culture assessment and change; management and supervisory coaching and benchmarking; customer retention strategy development; digital marketing strategy, planning and implementation; and sales planning, management and skill-building. [IA] INSURANCE ADVOCATE / June 29, 2015 33

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[ GUEST OPINION ]

By Jane M. Orient, M.D.

Dr. Carson Wants to Heal, Unite Americans

P

hysicians from North Carolina, along with some from around the country who were in Raleigh for a meeting, had a unique opportunity to chat with Dr. Ben Carson last week. We heard

load of unfunded liabilities—promises the federal government has made but cannot possibly raise the revenue to fulfill.

The federal government can’t solve our problems, including poverty and social

to be the most prosperous nation in history in the first place.

A huge amount of American money and industry is abroad, and would like to come home. What’s stopping it? The highest corporate tax rate in the world, and a crushing load of counterproductive regulation, Carson states.

Medicaid is bankrupting the states, and people still aren’t getting care. Carson suggests that the federal government blockgrant 80 percent of the amount it now spends on Medicaid to the states, and get out of the way. He notes that if you divide the total amount spent on Medicaid by the number of recipients, you get $5,000 per person. How about putting it into a health savings account and allowing people to decide how to spend it? They could even use it to pay for medical care for a family member, helping to keep families together.

He said he was not proposing this for all, but suggesting it as one idea states

I can see Dr. Carson dealing with patients— calmly, honestly, realistically, and empathetically.

A politician he is not. He lacks the vast experience in corruption, double-dealing, and false promises that may be needed to succeed in American politics.

Jane M. Orient, MD

some original ideas—and some facts that all presidential candidates should be talking about but apparently don’t dare.

It’s not just the $18 trillion national debt, he says—but the 10 times greater

unrest. Only Americans, working together, can do that. After all, the government has already spent $22 trillion on the War on Poverty, and only made the problem worse.

We need to remember how America got

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[ GUEST OPINION ] might consider. He notes that some will argue that people can’t be trusted to spend wisely. The same argument was made for food stamps: people would spend it all on porterhouse steak the first week and have nothing left for the rest of the month. This did not happen.

When he meets people in places like airports, some may question his opposition to ObamaCare. “Why don’t you want poor people to get healthcare?” The federal government can’t give people care; ObamaCare forces people into government-mandated plans. People, not government, should be in control of their medical spending.

The situation is similar with education, he states. People are forced into a failing school system. What they need is freedom of choice. Only with competition can we expect schools to improve.

Carson has a very upbeat view of the abilities of Americans. He cites successful programs that teach basic skills and have expectations. Some 70 percent of participants have gotten off the welfare rolls and into employment, and most students in such programs graduate from high school and even go on to college.

Carson claims no expertise in military affairs. He believes it is the job of the commander-in-chief to decide on the mission—but not to micromanage the operation. He strongly believes in the American tradition of not leaving anyone behind. At Benghazi, the soldiers who fought valiantly to protect the embassy so that many could escape surely thought that help was on the way. But they were betrayed.

I can see Dr. Carson dealing with patients—calmly, honestly, realistically, and empathetically. A politician he is not. He lacks the vast experience in corruption, double-dealing, and false promises that may be needed to succeed in American politics.

Do we want that kind of experience?

Or should we pick someone you could trust to operate on your brain?[IA] Jane M. Orient obtained her undergraduate degrees in chemistry and mathematics from the University of Arizona in Tucson, and her M.D. from Columbia University College of Physicians and Surgeons in 1974. She completed an internal medicine resi-

dency at Parkland Memorial Hospital and University of Arizona Affiliated Hospitals and then became an Instructor at the University of Arizona College of Medicine and a staff physician at the Tucson Veterans Administration Hospital. She has been in solo private practice since 1981 and has served as Executive Director of the Association of American Physicians and Surgeons (AAPS) since 1989. She is currently president of Doctors for Disaster Preparedness. Since 1988, she has been chairman of the Public Health Committee of the Pima County (Arizona) Medical Society. She is the author of YOUR Doctor Is Not In: Healthy Skepticism about National Healthcare, and the second through fourth editions of Sapira’s Art and Science of Bedside Diagnosis, published by Lippincott, Williams & Wilkins.

She authored books for schoolchildren, and Professor Klugimkopf’s Spelling Method, published by Robinson Books, and coauthored two novels published as Kindle books, Professor Klugimkopf’s OldFashioned English Grammar, Neomorts and Moonshine. More than 100 of her papers have been published in the scientific and popular literature on a variety of subjects including risk assessment, natural and technological hazards and nonhazards, and medical economics and ethics. She is the editor of AAPS News, the Doctors for Disaster Preparedness Newsletter, and Civil Defense Perspectives, and is the managing editor of the Journal of American Physicians and Surgeons.

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[ RISK MANAGEMENT ]

Actuaries Plunge Into the Big Data Pool

T

he story of big data — the ocean of data that modern technology generates — in some ways presents a modern cliff-hanger. Now that we have access to all of that data, what will we do with it?

Actuaries heard a variety of answers at the Spring Meeting of the Casualty Actuarial Society (CAS) in Colorado Springs, where a trio of experts shared how to glean useful information from a world awash in selfies, tweets, and status updates.

Casualty actuaries now have the ability to tap into data and stretch beyond their traditional roles of pricing and reserving to help claims adjusters and marketers do their jobs more effectively.

Philip Borba, a senior consultant at the consulting firm Milliman, showed how to find gems of insight in the standard claims report. Adjusters’ notes, he said, contain useful information that actuaries can use in predictive models to pick out which claims are most likely to turn contentious.

Borba, like most researchers in this area, divides a standard narrative report into “ngrams.” N-grams are single words or short series of words. For example, the phrase “tested positive for amphetamines and marijuana” would yield several n-grams, including “tested,” “positive,” “tested positive,” and so on.

Borba looked at 6,949 accident reports from the National Motor Vehicle Crash Causation Survey, a National Highway Traffic Safety Administration project that analyzes crashes. In the study, researchers wrote reports after visiting accident sites just after the crash occurred.

The 6,949 reports generated 13.3 million n-grams. Harnessing computer power to build a model, Borba looked for information on the use of cell phones and driving under the influence of medications. He found that narratives held important information on how often the two were linked to traffic accidents.

A second researcher, Douglas Wing, an assistant vice president at ISO, showed how insurers use computers to study visual information.

Computers see photos differently than we do. For people, a picture is a set of signals that helps them remember what an object 38 June 29, 2015 / INSURANCE ADVOCATE

In homeowners insurance, for example, photographs can show the area of a home’s roof, along with its pitch and type of roof … is, Wing said. To a computer, it’s a large number of pixels or a unique jigsaw of colored polygons.

In a process called image segmentation, the computer turns a picture into a series of polygons. A photo of a tree is changed into thousands of polygons, one for each leaf, one for each branch. Another process, feature extraction, lets the computer find common shapes — eyes or ears, for example.

The process in essence turns the computer into a super-sophisticated set of eyes, which insurers are beginning to take advantage of, according to Wing.

In homeowners insurance, for example, photographs can show the area of a home’s roof, along with its pitch and type of roof — all helpful in underwriting a policy or settling a claim. It’s expensive and dangerous to measure a roof by hand, Wing said, particularly in winter.

But a computer can read a flyover photograph, identifying roof lines, chimneys, and vents, all of which interest underwriters.

After a disaster, Wing explained, a computer can compare before-and-after photos to see which homes may be damaged and what an insurer’s overall exposure is likely to be.

Auto insurers can use the technology as well, he said. Claims on many damaged cars can be adjusted with photos alone.

A computer analyzing a damaged vehicle could settle about 40 percent of claims within a day, Wing said. Often the insured could take the picture, reducing the time and cost of settling a claim while also involving the claimant in the settlement process.

A vast database has already been developed, cataloguing the location and time for millions of vehicles. Millions of new data points are collected each month. The practice began as a way for repossession dealers to find cars. Insurers could use the same information, Wing said, to potentially

recover stolen autos or validate that a car is garaged where the insurance policy says it should be.

“This is already beginning to happen,” Wing remarked. “We need to start leveraging it.”

Roosevelt Mosley, a Fellow of the CAS and a principal at Pinnacle Actuarial Resources, described how Twitter yields valuable information on insurance marketing. Social media outlets such as Twitter, Facebook, and LinkedIn provide a candid window into the conversations and opinions of millions of people, Mosley said. Insurers have the opportunity to observe and react.

They can respond to online cris de coeur or passionate public protests as part of their customer service practice. They can listen, tapping into customer sentiments.

They can monitor and pick up on broad market trends.

Data mining, Mosley said, is a “virtual focus group.” A company can put an ad online, for example, then see how consumers like it.

Mosley has used social media research to understand usage-based auto insurance, in which companies use a telematics device to monitor driving patterns. The question is, how much of a discount do customers want before they think installing a device is worthwhile?

It was no surprise, Mosley said, to learn that people with higher discounts were more satisfied with the program.

Surprisingly, however, the size of the discount was not as important as the size of the actual discount compared with the discount customers thought they should get.

Monitoring social media has the advantage of being unfiltered, Mosley added.

“People are sharing raw emotional response, whether positive or negative.”

On the other hand, that means insurers have to take care to understand what is driving the strong feelings. This is a process that “can get really tricky,” he said, but one that’s worthwhile.

“Instead of having to guess what your policyholders want or what your customers are thinking,” Mosley said, “sometimes you just have to do a little digging to find out.”[IA]

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