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WHAT DO AGENTS WANT? Not Necessarily Commissions

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2009 FIRE SEASON OUTLOOK Calif., Ore., Wash. Are Hotspots

WORKERS’ COMP CLAIMS Obesity Weighs Heavy on System


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With the AmWINS Brokerage team on your side, you have an expert in _____________. (Fill in the blank)

Property • All Risk • Builders Risk • Inland Marine • Financially Distressed

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Financial Risk • Directors & Officers • Professional Liability • Employment Practices • Privacy Protection

• Asset Management Products • Fidelity/Crime

You name it, we do it. And thanks to our depth of expertise and the exceptional teamwork among our professionals, we’ll help you find a better way to meet your clients’ needs. That’s how we’ve become one of the nation’s leading wholesale brokers, recognized for innovative problem solving and extraordinary service. With 20 offices and 200 brokers nationwide, we’re ready to help you fill in the blanks.

To find an AmWINS broker, visit amwins.com/brokerage

There’s a better way.


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Business owners shouldn’t be experts in everything. Applied Underwriters® gives them the tools to focus on what they know best: their business. Uniquely powerful products like SolutionOne® that combine payroll, casualty coverages and risk reduction services. And insurance carriers with an A.M. Best Rating of A (Excellent). The result? A client retention rate of over 90%. For more information call 1-877-234-4450 or visit www.applieduw.com.

© 2007 Applied Underwriters, Inc. A Berkshire Hathaway Company.


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Steve Monahan, Structural Engineer & Business Owner. Builds foundations that support 100 tons. Doesn’t want to think twice about his insurance carrier’s stability.


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Inside This Issue May 18, 2009 • Vol. 87, No. 10 • West Region

WEST COVERAGE 10 | Winds Fan Santa Barbara Wildfire During Wildfire Awareness Week 77 Residences Destroyed 14 | Lessons Learned from the November 2008 California Wildfires Loss Estimates Hinge on Perimeter Assessments 18 | Workers’ Compensation Group Trusts: E&O Friend or Foe? Agents Advised to Know How Trusts Differ From Typical Insurance Companies

N12 Special Report Inside & Outside the Beltway with the Big ‘I’ Why Health Care Reform Matters to P/C Agents. Plus, Big ‘I’ CEO on Carrier Relations, AIG and Agent Grassroots in the Toughest Markets

NATIONAL COVERAGE N4 | International Report Fight for IPC Re Intensifies; Pirates Continue Attacks; Solvency II Gets EU OK N6 | Closer Look: Restaurants/Bars/Liquor Attacked in a Restaurant: The Insurance Implications of Assault and Battery N12 | SPECIAL REPORT: Inside & Outside the Beltway with the Big ‘I’ Why Health Care Reform Matters to P/C Agents. P/C Agents Join Fight Against Government Plan Plus, Big ‘I’ CEO on Carrier Relations, AIG and Agent Grassroots N24 | Special Report: 2009 Workers’ Compensation Directory

22 | Workers’ Comp Claims Frequency Down Yet Uncertainties Continue to Face the Business 24 | The Biggest Loser? Obesity Weighs Heavy on Workers’ Compensation Claims 28 | 2009 Fire Season Outlook Identifies Few Areas of Concern Forecasts Normal to Below Normal Potential Across Most of the West

N20 | A Practical Guide to Workers’ Compensation Prepare Clients by Knowing the ABCs of Premium Audits N22 | Education Strategy Propels Workers’ Comp Agency Agency Shows Growth Even in Down Economy N36 | Closing Quote: PIA’s Ken Auerbach Amid Obstacles, Opportunities Exist

DEPARTMENTS 8 | 12 | 16 | N18 |

Opening Note People Business Moves MyNewMarkets

IDEA EXCHANGE 30 | What do Agents Want? Compensation Not at Top of the List 32 | Don’t Repeat the Seven Deadly Sins of Customer Service Are Customers or Companies in Need of Improvement? 34 | What Additional Living Expense/Loss of Use Coverage Means for California Fire Victims Insurance Issues are Complex and Confusing When You Really Have to Put Them to the Test

24 The Biggest Loser? Obesity Weighs Heavy on Workers’ Compensation Claims

36 | Short-Term Profits Versus Long-Time Clients Building a Referral Business Focuses the Agent as the Best Person for the Job 38 | Reinvention in Insurance: Is it Possible? The World Has Changed, Whether the Insurance Industry Likes It or Not

6 | INSURANCE JOURNAL-WEST REGION May 18, 2009

N16 | Growing Your Property Casualty Agency Benefit by Experimenting With a Second Agency Brand

34 What ALE/LOU Means to Fire Victims Insurance Issues are Complex and Confusing When You Really Have to Put Them to the Test www.insurancejournal.com


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Your Cape is Ready. So is Your Quote. You wear the cape when you work with Melba. Especially on her exclusive hotel/motel program. Melba is prepared, prepped and knowledgeable. She's ready for you....take a look: • Hotel/Motel (Exclusive) • Artisan & General Contractors • Apartment/Dwellings • Restaurant/Bar • Garage-Dealer & Non Dealer • Light-Medium Manufacturing • Special Events • Mercantile & Lessor’s Risk • Contractor’s Equipment • Importers/Distributors • Property/Casualty/Inland Marine • Day Care/In Home Center • Vacant Property • Builder’s Risk With treatment like this, why go anywhere else? One Who Serves Melba Alcazar Commercial Underwriter La Crescenta office, ext. 254

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Idea Exchange Opening Note

What Agents Want

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oney is the lifeblood of any business. But when it comes to running insurance agencies, money isn’t the main thing that principals look for when they do business with a certain carrier. Claims handling, it turns out, is the truly coveted prize — at least that’s according to more than 450 agency owners and senior executives who were surveyed by a regional affiliate of the Professional Insurance Agents of America. Agents in New York, New Jersey, Connecticut and New Hampshire participated in the survey. Respondents consistently ranked “adjust claims fairly” and “pays claims promptly” as the top two factors they look at when evaluating an insurer. Rounding out the top 10, in decreasing order of importance were: Communicates clearly, honestly; resolves issues quickly; underwriter knowledge, experience; listens, responds to agents; easy, intuitive technology; stable markets; consistent underwriting; and competitive pricing. Anecdotally, the comments from agents bore out the results of the survey. Ellen Kiehl, a senior research analyst for PIA, shared some of those comments with Insurance Journal. Some of the more poignant ones: “When it is hard to work with a company, we don’t use them a lot.” “A company can have bad enough service that no compensation will offset it.” There’s “Perhaps insurance companies should concern themselves more with another reason customer service to their agencies. ... It is very frustrating to be unable to speak with a person and solve a problem in a timely manner.” the survey The agents’ answers very closely match a survey conducted by Insurance Journal last September — “How Independent results are so Agents View Carriers” — that found that quality claims service interesting: is valued above all else. Given the ways the market has changed The absence of in the ensuing period of time — an extended economic crash, collapse of AIG, the persistent soft market, to name a few ‘compensation’ the — one can infer that agents still place the highest premium on how their carriers will treat their customers. as a top-10 Although hinted at in some of the comments, there’s item. another reason the survey results are so interesting: The absence of “compensation” as a top-10 item. Its conspicuous absence did not go unnoticed by the PIA, whose members — particularly in New York where agents’ pay is a heated issue — rightly or wrongly feel there is a perception in some parts of the country that agents’ sole area of concern is their paychecks. Or as Jim Pittz, business issues director for the four state associations, put it: “Quality of service clearly overrides the ‘profit-only’ motive that agents are falsely accused of being driven by.” If nothing else, the survey lends some scientific weight to the knowledge that anyone who has worked in this business has known for years: When it comes to dedication, independent agents’ biggest concern is that their clients are happy and well taken care of when they have a loss. Patricia-Anne Tom Then again, the agents out there didn’t West Editor ptom@insurancejournal.com need a survey to tell them that.

Publisher Mark Wells Chief Executive Officer Mitch Dunford

EDITORIAL Editor-in-Chief Andrea Ortega-Wells | awells@insurancejournal V.P. Content/ and Interim Midwest/Southeast Editor Andrew Simpson | asimpson@insurancejournal.com East Editor Kenneth J. St. Onge | kstonge@insurancejournal.com South Central Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Patricia-Anne Tom | ptom@insurancejournal.com MyNewMarkets Associate Editor Chris Boggs | cboggs@insurancejournal.com International Editor Charles E. Boyle | cboyle@insurancejournal.com Columnists Alan Shulman Contributing Writers Kenneth Auerbach, Roy Chitwood, Tomas Girnius, John R. Graham, Laurie Infantino, Ellen Kiehl, Tom Ninness, Curtis Pearsall, Susan Preston, Scott Stransky

SALES V.P., Sales & Marketing Julie Tinney (800) 897-9965 x148 jtinney@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 dkaplan@insurancejournal.com South Central Eric Jeter (281) 655-0234 ejeter@insurancejournal.com

Midwest Lauren Knapp (800) 897-9965 x161 lknapp@insurancejournal.com Southeast Howard Simkin (800) 897-9965 x162 hsimkin@insurancejournal.com East Dave Molchan (800) 897-9965 x145 dmolchan@insurancejournal.com

MARKETING Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com (619) 584-1100 x120 New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classified and Ancillary Sales Manager Nicola Coghill | ncoghill@insurancejournal.com (619) 584-1100 x125 New Media Producer Chad Reese | creese@insurancejournal.com

DESIGN/WEB Vice President/Design Guy Boccia | gboccia@insurancejournal.com Vice President/Technology Joshua Carlson | jcarlson@insurancejournal.com Graphic Designer Jamie Bethell | jbethell@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com

A D M I N I ST R AT I O N Accounting Manager Megan Sinclair | msinclair@insurancejournal.com Admin./ Marketing Asst. Kristina Delavega | kdelavega@insurancejournal.com Cover designed by: Guy Boccia

Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Publishing, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2009 Wells Publishing, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Publishing, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 9049, Maple Shade, NJ 08052

8 | INSURANCE JOURNAL-WEST REGION May 18, 2009

FOR QUESTIONS REGARDING SUBSCRIPTIONS: please call 856-380-4176 or email subscribe@insurancejournal.com. You may subscribe or change your address online at insurancejournal.com/subscribe. ARTICLE REPRINTS: For reprints of articles in this issue, contact Rhonda Brown at 1-866-879-9144 ext. 194 or rbrown@fostereprints.com. Visit insurancejournal.com/reprints for more information.


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West Coverage Snapshot

Winds Fan Santa Barbara Wildfire During Wildfire Awareness Week By Patricia-Anne Tom

A

wildfire that began on May 5 in Santa Barbara County, Calif. — during Wildfire Awareness Week May 3-9 — continued to burn as of press time, having burned 8,733 acres and destroyed 77 residences as of May 10, 2009, according to the National Interagency Coordination Center. Additionally, 60 outbuildings were destroyed, 22 residences were damaged and 69 outbuildings were damaged, with the fire being only 65 percent contained as of press time. Estimated costs of the fire as of May 10 were $9 million, NICC noted. The County of Santa Barbara declared a local emergency due to the fire, and Gov. Arnold Schwarzenegger declared a state of emergency, meanwhile reminding Californians to be vigilant in preparations to protect their properties. According to the Governor’s office, by May 7, 3,500 homes had been threatened and 5,400 homes had been evacuated. About 13,500 people had been evacuated under mandatory orders, and 13,000 had been voluntarily evacuating their homes, although about 1,200, were able to move back in

as the threat to their properties cleared. One hundred and twenty-five people were in shelters. Twenty-eight firefighters were injured. In total, 1,400 firefighters and 177 engines are fighting the fires, the Governor’s office said. “The Jesusita Fire has been a great challenge, there are no two ways about it,” Gov. Schwarzenegger said, “because of the winds, 50 mile-an-hour winds, the lack of access to the mountainous terrain and the dense brush and all of this creates great challenges.” Sundowner winds — Santa Barbara’s equivalent of the better-known Santa Ana Winds — were responsible for spreading the fire, as they whipped through the passes and canyons with gusts greater than 60 mph, according to AIR Worldwide. “It is highly unusual to have such a destructive fire in Southern California in May,” said Dr. Tomas Girnius, senior research scientist at AIR Worldwide. “The peak fire season — at least in terms of highly destructive fires — usually arrives in late fall. However, the region has been experiencing an ongoing drought, and precipitation during the last year has been about half its normal level.

The Cause of the Fire

F

ire investigators have confirmed the Jesusita fire origin is adjacent to the Jesusita Trail, commonly accessed from the San Roque or Tunnel Road areas. The fire cause appears related to the use of power tool equipment involved in vegetation clearance. Fire investigators are requesting public assistance with identification of the person or persons engaged in vegetation clearance on Monday, May 4, and Tuesday, May 5, 2009. The unidentified persons are known to have been on the trail between 10:30 a.m. and 1:30 p.m. on both days, according to NICC. Persons with information regarding those individuals should contact the Santa Barbara County Tip Line at 805-686-5061.

10 | INSURANCE JOURNAL-WEST REGION May 18, 2009

Smoke rises from the hills during the Jesusita fire in Santa Barbara, California May 7, 2009. REUTERS/Mario Anzuoni (UNITED STATES DISASTER ENVIRONMENT IMAGES OF THE DAY)

Similarly, the extreme Sundowner winds that have been exacerbating the situation also are an unexpected phenomenon for this time of year.” Officials noted the Jesusita fire is especially close to November 2008’s Tea Fire, which destroyed more than 200 homes in Santa Barbara and Montecito. Estimates of that fire reached $632 million for residential properties because the average price per house in that area is $1.4 million, with the median estimated at $1.3 million. The median home value for the Jesusita area is just over $500,000, but it does contain a number of multi-million dollar mansions — several of which reportedly have been destroyed, AIR Worldwide indicated. Buildings in the area are constructed of stucco walls and chimney finishes, have shed (flat) roofs covered with low-pitched clay tile and terra cotta or castconcrete ornaments. The homes generally have little cleared area separating them from the surrounding vegetation, which consists of an equal mix of chaparral, brush, and conifers. In many

cases, even homes that do have partial setbacks will be affected by encroaching flames, depending on the direction of the fire and accompanying winds, AIR Worldwide said. “The exposures within the Tea Fire area are built on a higher slope than those in the area of the current fire, which tends to exacerbate fire risk,” Girnius said. “At the same time, housing density in the Tea Fire area is noticeably less than that in the area of the Jesusita Fire, suggesting that the risk of direct houseto-house spread of the fire is greater in the current situation.” “My heart goes out to the families who have lost their homes and all their belongings in this wildfire,” said Insurance Commissioner Steve Poizner. “I urge everyone who has been evacuated from their home to check their insurance policies. Many homeowners policies cover additional living expenses (ALE) incurred as a result of a mandatory evacuation. Coming up with extra money for hotel stays, extra food and other additional living costs are the last thing fire evacuees should have to worry about. www.insurancejournal.com


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Check your policy, and if you owners insurance companies as have any insurance questions, soon as possible to begin the call the Department of Insurance recovery process. at 800-927-HELP.” Sorich pointed out that many State law requires that ALE insurers had established tempocoverage be provided for 24 rary facilities in the fire area to months following a declared help their policyholders. Chubb state of emergency such as the Group of Insurance Companies, Jesusita Fire, according to the for instance, deployed its Insurance Information Network Wildfire Defense Services to the of California. ALE coverage typi- area, and, as the fire spread, it cally includes extra food costs, dispatched additional wildfire increased housing costs, furniengines and crews. ture rental, relocation and stor“We have sprayed a number of age costs, telephone installation the homes with fire-blocking gel and extra transportation costs to and have taken other protective and from school or work, after measures. We are in continuous the deductible is reached, CDI contact with Incident Command said. and are fully coordinating our The insurance industry also efforts with them,” said Scott encouraged all Californians to Spencer, worldwide loss prevenmake sure their tion manager for insurance policies ‘It is now obvi- Chubb Personal are updated and Insurance. ous that fires to conduct a Insurers, in home inventory. most instances, in California “This should also have tollare almost a certainly serve as free numbers a stark reminder that allow the year-round to residents victims to seek event.’ across our state help as soon as that wildfires can possible, Sorich happen anytime, anywhere in added, noting this fire is early in California,” said Candace Miller, the season. executive director for the “It is now obvious that fires in Insurance Information Network California are almost a yearof California. “Californians round event,” he said. “Fires in should take the time to prepare our state are a serious threat, and their homes, their families and tens of thousands of claims have their finances for risks ranging been filed with insurance compafrom wildfires to earthquakes.” nies, which have paid victims “Victims of the devastating hundreds of millions of dollars. Santa Barbara wildfire should “But fire losses are more than think first of safety and protect dollars and cents,” Sorich conthemselves, their families and tinued. Emotional attachments neighbors from harm,” advised and irreplaceable personal items Sam Sorich, president of the also are at risk. Residents in Association of California high risk areas should do everyInsurance Companies (ACIC). thing possible to help prevent Then, he said as victims begin their homes from becoming the process of moving forward, additional casualties of they should contact their homeCalifornia’s raging wildfires.” IJ www.insurancejournal.com

Declarations ‘We are lucky.’ — Warren Buffett, as he addressed thousands of shareholders at Berkshire Hathaway’s annual meeting in his hometown of Omaha, Neb., on May 2. He said insurance, along with utilities, another big business for Berkshire, are sectors “relatively unaffected by the recession.” Among Berkshire’s insurance companies are the auto insurer Geico Corp., reinsurer General Re and bond insurer Berkshire Hathaway Assurance.

Few Signs “Most risk managers continue to see flat or slightly lower premiums at renewal. The insurance market is still very competitive and, while some insurers are predicting an imminent hard market, there are few signs that rates will rise sharply anytime in the near future.” — Daniel H. Kugler, a member of Risk and Insurance Management Society Inc. (RIMS) board of directors and assistant treasurer, risk management at Snap-on Inc., in a recent Advisen survey on the marketplace.

Keep on Drivin’ “People tend to think there is a big difference between insuring a new car versus an older one.” — William Pearse, vice president of product strategy and design for Travelers, commenting on a poll from R.L. Polk & Co. showing that 64 percent of consumers are “very or extremely likely” to keep their current vehicle longer than they normally would due to economic conditions.

Sights on State Fund “A healthy and efficient State Fund is essential to a functioning and efficient worker’s compensation insurance market. Additionally, every government entity must streamline operations and achieve greater efficiencies. This includes (the California) State (Compensation Insurance) Fund. I will continue to monitor the progress of State Fund to ensure they operate effectively and transparently.” — California Insurance Commissioner Steve Poizner commenting on the Department of Insurance’s 2008 operational review of the state workers’ compensation insurer. In response to the report’s findings, Poizner said more issues must be resolved, and that SCIF needs to “move expeditiously.”

In for the Long Haul “Jan Frank (SCIF CEO) has consistently said organizational change is not a sprint, but more like a long distance event.” — Jennifer Vargen, SCIF communications director, noting California’s the workers’ comp insurer will continue to make progress on structural and operational issues that an earlier audit pointed out needed to be addressed. “The auditor’s ‘pencils’ went down on at the end of last year. State Fund has continued to make progress since that time,” she said. May 18, 2009 INSURANCE JOURNAL-WEST REGION | 11


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West Coverage People

Mike Kerner

Michael Morrissey

Alex Soto

Grace Neumann

Kendra Corman

Jeff Akers

Zurich Financial Services Group appointed Francis Bouchard head of the Climate Office. Bouchard will succeed Mike Kerner, who was appointed CEO of Global Corporate in North America. Bouchard will work to institutionalize the company’s climate-related expertise across the organization and accelerate the development of new products. He will maintain his current role as Zurich’s global head of corporate communications. He joined Zurich in 1998 as vice president of Federal Affairs in the United States. In 2005, he was appointed head of government affairs for the General Insurance platform, followed by his appointment to corporate communications in the same year. Michael J. Morrissey was appointed president and CEO of the New York-based International Insurance Society Inc. (IIS). Morrissey previously served as chairman and CEO of Firemark Investments. As a founder of Firemark, Morrissey also served as chief investment officer and portfolio manager of the Firemark Tiger Fund. He has advised insurance company management and served on several insurance company boards, as well as chaired the firm’s fund boards. He is also a director of Selective Insurance Group Inc. and CGA Group Ltd. Morrissey succeeds Patrick W. Kenny, who will retire in June. Kenny has served as IIS president and CEO since 2001. The Independent Insurance Agents & Brokers (the Big “I”) awarded Alex Soto with the Woodworth Memorial Award, recognizing the contributions of an independent agent or broker to the national association, its members and to the insurance industry. Soto is president and CEO of InSource Inc. in Miami and served as chairman of the Big “I” from 2006 to 2007. Soto also served on the national association’s executive committee and was chairman of IIABA’s Communications Committee, Natural Disaster Committee and Branding Task Force, which was responsible for developing the Trusted Choice consumer brand. Soto formerly served as chairman and state national director of the Florida Association of Insurance Agents and as vice chairman of the Florida Property Casualty Joint Underwriting Association (FPCJUA). He also was a member of the governor’s Commission on the Florida Insurance Crisis and served on the Florida Insurance Fraud Task Force. Van Nuys, Calif.-based Momentous Insurance Brokerage Inc. named Grace Neumann an assistant vice president. Neumann has more than 20 years experience in providing asset protection consultation and insurance services for affluent clientele in Santa Barbara, Calif., and the entire United States. Most recently, she was a vice president with the Private Client Advisors practice of Hub International. Burns & Wilcox named Kendra Corman marketing

12 | INSURANCE JOURNAL-WEST REGION May 18, 2009

director. Corman is responsible for managing the company’s advertising and marketing initiatives. Prior to joining Burns & Wilcox, Corman was the advertising manager for Jeep at Chrysler LLC. She was responsible for directing and executing the print, television and online advertising programs to support the Jeep brand campaign as well as the new product launch of the Jeep Patriot and Jeep Liberty. The Employee Benefits department of United Risk Solutions Inc. expanded into Portland, Ore., and hired insurance veteran Jeff Akers as employee benefits consultant. Akers brings close to 20 years experience in employee benefits to his new position. Prior to joining United Risk, he was director of sales and account services for The ODS Companies in Portland. Previous positions include vice president of sales and marketing at Complementary Healthcare Plans, and sales and management roles at Providence Health Plans, Regence BlueCross BlueShield of Oregon and Regence Life and Health. W.R. Berkley Corp. appointed Richard M. Baio to the newly created office of vice president - treasurer. He will manage the investment accounting and tax departments, global currency, banking relationships and all related treasury functions. Baio has more than 19 years of experience in the insurance and financial services industry, having served most recently as a director in Merrill Lynch & Co.’s financial institutions investment banking group, where he specialized in insurance company advisory, financing, merger and acquisition transactions. Baio previously spent a significant part of his career in public accounting advising the insurance industry as a partner in Ernst & Young’s insurance practice. Baio assumes the position of treasurer from Eugene G. Ballard, who remains senior vice president - chief financial officer. American International Group Inc. (AIG) named Matthew E. Winter vice chairman, transition planning and administration. Winter succeeds Richard H. Booth, who has retired. Winter will continue as president and CEO of American General Life Cos., a position he has held since joining AIG in 2006. He was elected AIG senior vice president in March 2007. Previously, he served as executive vice president and member of the Office of the CEO for MassMutual Financial Group. AIG also named Jeffrey Hurd vice president and chief administrative officer to oversee global operations and systems, corporate administration and a variety of special projects. He will continue as senior vice president and head of asset management restructuring. He most recently AIG Investments senior managing director, chief administrative officer and general counsel. IJ www.insurancejournal.com


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High Value Property

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Who can keep your high value clients from getting robbed on their policies?

Alan Jay Kaufman Chairman, President & CEO

Burns & Wilcox. That’s who. With specialized coverage available from Burns & Wilcox, you can protect your clients from losses due to fire, theft and other unforeseen calamities. As North America’s largest specialty insurance wholesaler, we have unlimited access to admitted and non-admitted markets for the broadest possible protection. Call Burns & Wilcox, the specialty insurance wholesaler with the expertise to protect against home invasion losses. burnsandwilcox.com

1.800.521.1918 ext. 6105

High Value Homeowners

Personal Umbrella

Fine Arts & Jewelry

Personal Articles

Watercraft


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West Coverage News & Markets

Lessons Learned from the November 2008 California Wildfires By Dr. Tomas Girnius and Scott Stransky

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he 2009 wildfire season may be just beginning, but what lessons can be learned from California’s November 2008 wildfires? The Tea Fire, the Sayre Fire, and the Freeway Complex Fire that burned in Southern California last year provided risk modeling firm AIR Worldwide with real-life examples to compare damage patterns with its models functionality in determining loss estimates. The Tea Fire, which got its name from Montecito’s historic “Tea House” near which it ignited, began on Nov. 13. By the time it was over, some 1,900 acres and more than 200 houses had burned in and around Montecito in Santa Barbara County. On Nov. 14, a resident of Sayre Street in the Sylmar section of northern Los Angeles reported a fire that came to be known as the Sayre Fire.The fire burned more than 11,000 acres and more than 500 structures. The Freeway Complex Fire ignited on Nov. 15 along the 91 Freeway in Corona, Calif. On Nov. 16, the smaller Landfill Fire in Brea merged with the Freeway Complex Fire. When it was over, more than 30,000 acres near the nexus of Orange, Riverside, Los Angeles, and San Bernardino Counties had burned, and some 300 homes were damaged or destroyed. An important source for real-time perimeter information during wildfires is the Geospatial Multi-Agency Coordination Group, or GeoMAC (www.geomac.gov), a consortium of federal and state agencies. Fire management officials use GeoMAC information for resource allocation decisions. Risk modeling firms also rely on GeoMAC perimeters to produce reliable real-time loss estimates. To estimate the perimeters, the GeoMAC consortium uses GPS data and infrared imagery from fixed wing and satellite platforms. The most common method for collect14 | INSURANCE JOURNAL-WEST REGION May 18, 2009

ing GPS data involves flying helicopters along the perimeter of a still burning fire, as low to the ground as possible. As the pilot attempts to trace the perimeter, a GIS specialist with a handheld GPS unit takes readings. The process creates uncertainty about the reported perimeter. For example, some experienced pilots are able to make 90 degree turns, while others are hesitant to fly into very thick smoke. It can also be difficult to see through the smoke to determine how far the fire itself has actually progressed. The helicopter data is supplemented by MODIS satellite hotspot data and reports from fire crews on the ground to create the final reported perimeter. As a result, the accuracy with which published perimeters matched actual perimeters on the ground can vary considerably from location to location. For instance, the perimeter survey of the Tea Fire as reported by GeoMAC proved to be reliable. Yet, the reported perimeters for the Sayre and the Freeway Complex Fires were less reliable. At least in some neighborhoods, the fire’s progress was stopped successfully while still in the wildlands (or reached one or two houses into the end of a dead end street), while the reported perimeter indicated penetration into housing developments tens or even hundreds of meters deep. Clearly, such discrepancies can impact post-mortem loss estimates. A loss model approximates the probability of damage based on event wind speed, topography and the nature of fuels present, for any structure contained within the perimeter. By including houses that should not be within the reported perimeter, loss estimates are inflated. Conversely, losses may be underestimated if the reported perimeter fails to include some damaged exposure. It is near the perimeter that wildlands typically meet the urban environment, and therefore losses during a wildfire tend to cluster there. Inaccuracies in how the perimeter is reported can lead to uncertainties in estimated losses. If losses resulting from smoke damage are excluded — a type of damage that is challeng-

ing to assess without access to he interiors of buildings — that also could lead to loss estimate inaccuracies. Perimeter reports affect the ability to estimate how much damage is likely to occur given that a building sustains some damage — also referred to as the conditional damage ratio within a fire perimeter. In the November fires, if a house was burned at all, then in the majority of cases (roughly 90 percent) that house was a total loss, while in the few remaining cases (roughly 10 percent) the damage was typically minor, (e.g., a window or a garage door destroyed). Estimating what fraction of buildings within a perimeter sustain some level of damage — that is, the unconditional damage ratio — can be more challenging. This is closely related to the problem of uncertainties in fire perimeters as reported by official agencies. In the November fires, many neighborhoods within the reported perimeters, as mentioned earlier, had no visible damage whatsoever. In areas that clearly had some damage, there were streets with widely varying damage ratios. For example, on Aviemore Drive in Yorba Linda, six homes in a row were destroyed. On the other hand, on nearby Rolling Hills Lane, there was only one total loss out of nearly three dozen homes. At the UCLA Olive View Medical Center, while surveying the Sayre Fire, there was little visible damage to the buildings, yet most of the buildings suffered substantial smoke damage. Numerous other buildings had no visible damage, yet their contents were in piles outside. When estimating losses from fires, it’s important to remember that officially reported perimeter coordinates vary in quality from fire to fire, due to the challenges of constructing such perimeters. This speaks to the alwayspresent uncertainty involved in real-time loss estimation. Modeling firms are in contact with several governmental and private sector organizations, pursuing cooperative arrangements to help acquire more accurate real-time and postmortem fire perimeters in the future. IJ Girnius is a senior research scientist and Stransky is a research analyst, both employed by AIR Worldwide. Web site: www.air-worldwide.com. www.insurancejournal.com


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West Coverage Business Moves Wells Fargo Insurance Services, North Coast Surety Wells Fargo Insurance Services Inc., part of Wells Fargo & Co., acquired the assets of North Coast Surety Insurance Services and North Coast Surety Technologies. Terms were not disclosed. North Coast Surety Insurance Services based in Novato, Calif., has provided surety bonds for public works contractors since 1994. Dixon Wright, who owned the company, now manages surety operations for Wells Fargo Insurance Services in the San Francisco Bay Region. He reports to Brian Hetherington, regional manager for Wells Fargo Insurance Services in the San Francisco/South Bay region. USG Insurance Services USG Insurance Services Inc, a national wholesale broker of commercial insurance, is expanding operations with a new office in Irvine, Calif. The creation of the new southern California office is the first of several in USG’s plan to expand on the West Coast. The California branch will be piloted by Mike Foley, who specializes in mid- to large-sized brokerage accounts. Foley, now president of USG Insurance Services of California, has more than 20 years

16 | INSURANCE JOURNAL-WEST REGION May 18, 2009

of commercial wholesale experience operating with several national brokerages. USG is seeking talent to develop its West Coast business and has 11 offices nationwide. Hartford Financial Services Group Hartford Financial Services Group Inc. is trying to sell its property/casualty insurance business, as it reels from massive losses, according to Reuters. Hartford has retained Goldman Sachs, which has been calling potential bidders for the property/casualty business, Reuters sources said. Possible contenders for the business could include German insurer Allianz, which is already an investor, MetLife, Munich Re and Travelers. It was not clear whether those companies had been approached. Hartford’s P/C business is worth about $8 billion on paper, based on the company’s financial statements filed with regulators, according to a February note issued by Citigroup Analyst Joshua Shanker. But getting that price could be difficult because capital and loan markets have been difficult to tap, reducing the capacity of bidders to pay. An insurer such as Travelers, with a market capitalization of about $23 billion, could have trouble raising enough debt

and equity to pay for a deal, a source said. Allianz made a $2.5 billion investment in Hartford last October, giving it a stake, and the ability to raise its ownership in future. Allianz also could be better situated to pay for the business, a source said. However, Sabia Schwarzer, a spokeswoman for Allianz of America, said the “investment in the Hartford is purely financial, not strategic.” She declined to comment further. Goldman spokeswoman Andrea Rachman declined to comment, as did Travelers, MetLife and Munich Re. Hartford could not immediately be reached for comment. The development comes amid large losses for the 199-year-old company. Hartford, a large writer of a popular retirement product called variable annuities, has been badly battered by investment losses and higher costs from guarantees on the annuities, which are linked to stock market performance. The company had a net loss of $2.75 billion in 2008, reversing a net profit of $2.95 billion the previous year. Hartford’s shares are down some 40 percent so far this year. Phenix Mutual, The Motorists Insurance Group Concord, N.H.-based Phenix Mutual Fire Insurance Co. will become an affiliate of The Motorists Insurance Group, pending approval by regulators in New Hampshire and Ohio, where Motorists is headquartered. Phenix operates in New Hampshire, Maine, Vermont, Massachusetts, Rhode Island and South Carolina and had $26.5 million in direct and assumed written premium last year. As part of the agreement, Phenix will pool its premium, losses and underwriting expenses with other companies in the group. “The affiliation will enable us to maintain a high level of service to policyholders and agents, offer our agency force new products and give the company access to financial and other critical resources through The Motorists Insurance Group,” said Rolf H. Gesen, Phenix president and CEO. John J. Bishop, chairman, president and CEO of Motorists, said Phenix Mutual has enjoyed a “long-term market presence with a loyal agency force in its operating states, most of which represent new markets and significant future growth opportunities for The Motorists Insurance Group.” IJ www.insurancejournal.com


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MARKET OPPORTUNITIES

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News & Markets Workersâ&#x20AC;&#x2122; Compensation Trusts

Workersâ&#x20AC;&#x2122; Compensation Group Trusts: E&O Friend or Foe? Agents Advised to Know How Trusts Differ From Typical Insurance Companies By Curtis M. Pearsall

T

Pearsall

o start off, what exactly is a workersâ&#x20AC;&#x2122; compensation group trust? Per the New York State Insurance Department Web site, it is: [A] group of employers who perform related activities in an industry who agree to be jointly and severally liable for the payment of workersâ&#x20AC;&#x2122; compensation benefits to the employees of the employer members by contributing to a trust, the assets of which may exceed the liabilities, out of which benefits are paid. The group deposits with the chair of the Workersâ&#x20AC;&#x2122; Compensation Board a minimal deposit of securities or a surety bond in an amount set by the chair of Workersâ&#x20AC;&#x2122; Compensation Board.

Workersâ&#x20AC;&#x2122; compensation trusts have been among other things, underwriting, loss in existence for many years and have been control and claims typically manages these providing this coverage to businesses in trusts. It is common for the administrator many states. Although I do to handle multiple trusts not have a count on the numand, essentially, the goal ber of trusts in existence, it is of the administrator is to Most agentsâ&#x20AC;&#x2122; fair to say that it is substanmanage these trusts like E&O policies tial. an insurance company. Agents dealing with cusThey collect the premiexclude the tomers on their workersâ&#x20AC;&#x2122; comums, issue the policies insolvency of pensation coverage have the and pay claims. They prooption of placing their coverduce financial statements trusts. age in a variety of ways, on an ongoing basis. among them the traditional insurance comWhile they may look like an insurance pany mechanism, another dealing with company, there are many differences that these trusts. are important to note and these differences An administrator whose duties include, can create certain pitfalls to placing workersâ&#x20AC;&#x2122; compensation coverage with a trust. As hard as many insurance departments try, they oftentimes find themselves unable to truly evaluate the quality and financial well-being of these trusts. The financials of workersâ&#x20AC;&#x2122; compensation trusts are somewhat different than those of a typical comRestaurants, Taverns, Nightclubs, pany financial. While carriers and trusts both carry a line item for surplus (essenPrivate Clubs & Special Events tially assets minus liabilities), with workersâ&#x20AC;&#x2122; compensation trusts, it is not uncom8BOUUPNV[[MFUIFDPNQFUJUJPOXJUIB QSPHSBNZPVDBOTJOLZPVSUFFUIJOUP mon to find this line item at $0 or an actu8FIBWFJU0VSi"w SBUFE DBSSJFSTXBOU al deficit. ZPVUPQBXTBOEHJWFVTBDIBODFUP Are they paying todayâ&#x20AC;&#x2122;s claims out of XSJUFZPVSSJTLT todayâ&#x20AC;&#x2122;s premium? This is a very legitimate question. When workersâ&#x20AC;&#x2122; compensation Call Jose Will also Write trusts encounter financial difficulty, they t $BGFTt$BGFUFSJBTt$BUFSJOH (323) 258-2600 have the option of assessing each trust t 'JOF%JOJOHt'BNJMZt'BTU'PPE jose@neitclem.com member an amount necessary to improve t Restaurants w/TBLF0VU the bottom line. It is critical that if agents Coverage who have placed accounts with a trust t (FOFSBM-JBCJMJUZt1SPQFSUZ truly understand that this potential exists. t *OMBOE.BSJOFt$SJNFt6NCSFMMB It appears that at this period in the mart 4JOHMFPSNVMUJQMFMPDBtions OK ketplace, there are many workersâ&#x20AC;&#x2122; compent -JRVPS-JBCJMJUZ$PWFSBHF0, sation trusts that are in significant finant 6NCSFMMB-JBCJMJUZVQUP.JMMJPO cial difficulty. It is important to understand that like insurance companies, trusts /PSUI'JHVFSPB4USFFU -PT"OHFMFT $"tt'BY  have been declared insolvent from time to

Call the Top Dog for

XXXOFJUDMFNDPNt$BMJGPSOJB-JDFOTF& 18 | INSURANCE JOURNAL-WEST REGION May 18, 2009

continued on page 20 www.insurancejournal.com


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Indemnity group of insurance companies. With a market focus on commercial auto and general liability, National Indemnity is one of the leading property/casualty members of the Berkshire Hathaway group of insurance companies. insurance company. PGIA operates in the far western and southwestern states principally writing business in California, Arizona, Nevada, and Oregon. We specialize in liability and physical damage coverage for commercial auto risks that cover a broad spectrum of exposures. We provide coverage (including stand-alone provide General Liability, Property and Package coverage for many classes of business that are a challenge to place, even in today’s marketplace. Below is a detailed listing of the classes of coverage available. If your particular risk is not listed below, please do not hesitate to ask us about it. Commercial Auto • Limousines • Transit Mix • Tow Trucks • Contractors • Truckers • Emergency Vehicles • Gas/LPG Haulers • Driver Training • Nursing Home Vans • Para-Transit Vehicles • Excess Liability • And Many Others

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Motor Truck Cargo • Grain, Hay, Feed • Livestock • Trailers (Manufacturer to Dealer) • Building Materials • Auto Hauler • Food Products • And Many Others

Property/Package • Child Care • Bars/Taverns • Restaurants • Fitness Centers • Vacant Buildings • Apartments • Mainstreet Mercantile • And Many Others

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News & Markets Workers’ Compensation Trusts Workers’ Comp, continued from page 18

time. Another difference is that there is no state guaranty fund protection accounts placed in trusts, so if one is declared insolvent; there is no state mechanism to bail them out. The recourse is that the members of the trust are assessed. The phrase “joint and several” is included

in the definition of trusts. This is a legal obligation that the members assume where they may be liable for the payment of the total judgment (and costs) even if they are only partially responsible for losses inflicted. I am personally aware of a trust that has been declared insolvent in the amount of

$36 million and the insured has received an interim assessment of $529,000. The possibility for future assessments still exists. Most agents’ errors and misThere is no sions policies state guaranty exclude the insolvency of fund to backup workers’ comtroubled pensation trusts, so it is important trusts. to understand that this is a responsibility for which an agency could be assuming. There are many well-run trusts. Taking the necessary steps to identify whether the trust that you are considering is among them is the key. IJ A former independent agent, Pearsall is vice president with Utica National Insurance Group, where he is director of special programs and director of the Utica errors and omissions operation. This is reprinted with permission from Utica’s E&O Communiqué.

Trust in Trusts? Things To Consider

I

f you are the agent for a business that has or is considering placing an account with a workers’ compensation trust, here are a number of items to consider: • How long has the trust been around? • Does the administrator have a solid track record with managing these trusts? • Has the trust ever assessed its members? • What do the current financials look like? Just because the trust was solvent at one point does not mean that it is in solid financial condition today. • What type of loss control is in place? • Does the state insurance department have any knowledge of issues involving the trust? • Does the insured truly understand what its responsibilities are by placing its workers’ compensation coverage in a trust? There is an agreement that the insured needs to sign — be certain the insured totally understands it. C.P. 20 | INSURANCE JOURNAL-WEST REGION May 18, 2009

www.insurancejournal.com


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West Coverage News & Markets

Workers’ Comp Claims Frequency Down Yet Uncertainties Continue to Face the Business

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— Kevin Prior, CEO

Let us tell you why at:

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T

22 | INSURANCE JOURNAL-WEST REGION May 18, 2009

he workers’ compensation insurance industry experienced a year of mostly solid results in 2008, according to Dennis Mealy, NCCI Holdings Inc. chief actuary. In its annual “State of the Line” report, the NCCI (National Council on Compensation Insurance), said the workers’ compensation calendar year combined ratio was 101 in 2008. The 2008 accident year combined ratio was 100 percent. Calendar year and accident year underwriting results continued near breakeven, Mealy said, “which in this investment climate is a necessity if the industry hopes to earn a reasonable return on its capital.” “We are pleased to report that the workers’ compensation insurance industry continues to function quite well, with active competition for business and a shrinking residual market,” NCCI President and CEO Steve Klingel added. “However, the low interest rate environment that has persisted for several years, combined with the dismal short-term performance of the equity markets, continues to leave the line with post-tax returns that barely meet the industry’s cost of capital.” Among the challenges NCCI expects the workers’ comp insurance industry to face: • Medical costs continue to rise faster than wages;

• Indemnity claim costs also continue to outpace wage increases; • Low investment yields may keep pressure on industry underwriting results; • The underwriting cycle is entering a period of uncertainty; • A changing state political environment may result in more legislative proposals; and • The political situation in Washington, with proposals to revamp the nation’s health care and financial regulatory systems, makes for a period of uncertainty. The recession is having a effect on the workers’ compensation insurance industry. “The macro economy clearly influences, and, to a large extent, drives the key financial components of workers’ compensation: exposure, frequency and severity, and investment income,” said Harry Shuford, NCCI Holdings practice leader and chief economist. NCCI said unemployment would likely help reduce workers’ comp costs. Employment has been declining consistently since December 2007. Job losses have averaged nearly 430,000 a month in the three months ending December 2008, and have gotten worse since. And a weak outlook for employment portends declines in exposures, especially in the more cyclically sensitive (and hazardous) manufacturing and construction sectors.

Declines in Claim Frequency Are Consistent for All Injury Types Except Permanent Total Frequency at First Report

www.insurancejournal.com


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We see the business of insurance through your eyes

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is medical severity will continue to grow due to increasing utilization regardless of changes in economic conditions,” Shuford said. While indemnity loss costs will ease or even drop modestly, anticipated increases in medical prices and utilizations will more than offset the easing of frequency. “Medical loss costs will continue their steady up-trend, even as the economy weakens,” NCCI said. While the recession may help to reduce claims, the recession will likely make workers’ comp insurers’ investment income fall, restraining operating gains and return on equity, the group predicted. The Federal Reserve has reduced the key federal funds interest rate to a record-low. “This lower interest rate environment will negatively impact new-money returns,” it said. Other highlights from NCCI’s “2009 State of the Line” report: • As to the reserve position of private carriers, NCCI estimates about a $6 billion deficiency at year-end 2008, up from a $2 billion deficiency the previous year. After consideration of the allowable discounting of the indemnity reserves of lifetime pension cases, the reserve position is essentially adequate. • California is large enough to have an impact on the countrywide workers’ comp numbers; excluding it would increase the calendar year ratio by about 5 points to 106 percent, and would leave the accident year combined ratio unchanged at 100 percent. • Net written premiums, including the state funds, had a third year of decline, dropping more than 12 percent to $39 billion. The private carriers dropped by about 10 percent to $34 billion — the largest drop in workers’ comp net written premium in many years. • Depopulation of the residual market continues at a rapid rate. Premium dropped about 30 percent in 2008 and is now about $700 million, less than half the volume in 2004. Overall, the market share of the residual market pools serviced by NCCI dropped to about 6 percent, down from 8 percent in 2007. This is an improvement from the 13 percent market share peak reached in 2004. For more information, visit www.ncci. com. IJ

Let us tell you why at:

“Claim frequency is also likely to come under downward pressure, both from the loss of more hazardous jobs and because, in recessions, companies tend to lay off their least experienced workers first, which has the effect of increasing the skill-level of the remaining workforce,” the group said. Shuford noted workers’ comp claims frequency has declined about 1 percent per year for the past 80 years, and there is no evidence to suggest that the trend will end anytime soon. Even as unemployed workers submit workers’ comp claims, it is unlikely to play a major role in the claims frequency patterns. “In part, this reflects the dynamic of the U.S. economy; large layoffs happen all the time,” he wrote. The frequency change from 2007 to 2008 was -4 percent. The prior year’s change was -2.6 percent. As wage gains slow in 2009, reflecting both weak labor demand and rising unemployment rates, there will likely be some slowing the growth rate of indemnity severity, because changes in indemnity benefits are tied to wage movements in most states, NCCI said. Indemnity severity will likely rise, but at a slower pace, the group predicted. Although people might think workers’ comp claims increase with a recession as people seek to increase their incomes and fraudulently submit claims or increase the severity of claims, this may not be the case. “Some argue that injured workers will stay on workers’ comp longer to postpone going on unemployment; others believe that workers have an incentive to return to work sooner to reduce the risk of being laid off,” Shuford said. However, data from the past three recessions in reality suggests that the key driver of indemnity severity is the slowing of growth in wage rates. “There might be some element of fraud, but there’s also evidence that those who have a job won’t file a claim because they don’t want to lose their job ... and the data seems to suggest that one behavior offsets the other,” he said. NCCI said higher medical care inflation will place upward pressure on medical severity, which is also being impacted by substantial increases in utilization. “The best forecast

May 18, 2009 INSURANCE JOURNAL-WEST REGION | 23


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West Coverage News & Markets

The Biggest Loser? Obesity Weighs Heavy on Workers’ Compensation Claims lower self-esteem, depression and discomfort in social situations, and significantly diminish t’s time to face facts about our nation’s quality of life. Obesity increases a person’s risk fat. About a quarter of our nation can be for developing serious health conditions such characterized as obese, according to the as diabetes, heart disease, hypertension, metaCenters for Disease Control and bolic syndrome, and polycystic ovary synPrevention (CDC). And while that presents drome. Obesity also raises blood cholesterol health implications for those who are overand triglycerides, and heightens the possibility weight, it also presents serious implications for of stroke. Other diseases associated with high the workers’ compensation insurance industry. BMI levels include various forms of cancer, According to the National Institutes of end-stage renal disease, low back pain, sleep Health (NIH), the term “overapnea and incontinence. In weight refers to body weight 2004, the CDC ranked obesity Obese that is at least 10 percent over as the No. 1 health risk facing workers have the recommended weight for a America. certain individual. RecomThe National Council on poorer job mended weight standards are Compensation Insurance performance. generated based on a sampling (NCCI) said “obesity is a matof the U.S. population or by ter of increasing concern, body mass index (BMI), a calculation that with the percentage of the population reportassesses weight relative to height.” In common ed as obese increasing from 12 percent in 1990 terms, “overweight” refers to an individual to more than 26 percent in 2007. By the year with a BMI of more than 25. Obesity typically 2020, 40 percent of men and 43 percent of refers to any individual with a BMI of more women are predicted to be obese, with more than 30. BMIs of 30-34.9 are considered Class I than 70 percent of both men and women premoderately obese; 35-39.9 are considered Class dicted to be overweight.” II severely obese; and BMIs of 40 and above are NCCI is concerned about this trend’s effect considered Class III morbidly obese. on workers’ compensation, as obese workers Obesity currently results in an estimated are at risk for many diseases and health condi400,000 deaths a year in the United States and tions — and have poorer job performance. costs the national economy nearly $122.9 bil“From a workers’ compensation perspective, lion annually, according to ObesityinAmerica. claims involving obesity are seen to have org. Childhood obesity affects more than 15 markedly higher indemnity and medical costs.” percent of the population under 18 years old There have been a number of recent studies that is classified as overweight. And the numthat document the workers’ compensation bers that tip the scales are growing. effects of obesity, NCCI noted. As expected, continued on page 26 Obesity impacts lifestyle and can lead to

By Patricia-Anne Tom

I

2007 State Obesity Rates State Alaska Arizona California Colorado Hawaii

% 27.5 25.4 22.6 18.7 21.4

State Idaho Montana Nevada New Mexico Oregon

% 24.5 21.8 24.1 24.0 25.5

State Utah Washington Wyoming

% 21.8 25.3 23.7

Source: CDC. (For this chart, obese is defined as greater than or equal to a BMI of 30.)

24 | INSURANCE JOURNAL-WEST REGION May 18, 2009

www.insurancejournal.com


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West Coverage News & Markets Biggest Loser, continued from page 24

obesity can impact mortality rates. The studies also showed that obesity reduces productivity and increases the percentage of reported impaired activity when associated with comorbidities of type 2 diabetes, high cholesterol and hypertension. “The presence of all three comorbidities among overweight or obese persons was associated with more days of hospitalization, more visits to the emergency room and medical providers, and a generally poorer quality of life,” NCCI stated. Duke University Medical Center researchers observed “dramatic” workers’ compensationrelated differences between people with normal BMIs and those with BMIs in the obese range, NCCI said. “For example: • Claims: Morbidly obese workers filed 45 percent more claims than workers with a normal BMI. The differential was 21 percent for workers in the Class I obese range (BMI of 3034.9) and just 9 percent for those classified as have higher BMI-related effects than those in overweight (BMI of 25-29.9). lower-risk occupations. • Lost Workdays: Morbidly obese workers In a Johns Hopkins Bloomberg School of had eight times the number of lost workdays Public Health study, researchers found that versus workers with normal BMIs. Those clasthe odds of injury for workers who were morsified as overweight or Class I obese had bidly obese (in the highest obesity category roughly 3.5 times as many lost workdays. class III) were significantly higher when com• Medical Claim Costs: Morbidly obese pared with those with a normal BMI. The workers had 5.4 times the medical claims costs odds ratio was 2.21 for those in the highest versus normal BMI workers. obesity category, 1.26 for those The differential was a bit less in the overweight category, Obesity has than two times for Class I and 1.54 for those in the obesiobese workers and 1.5 times ty I and II categories. markedly for overweight workers. “When data was examined increased • Indemnity Claim Costs: by body part injured, the Morbidly obese workers had analysis showed that a subthe costs to nearly eight times more stantially higher portion of the workers’ indemnity claims costs than injuries occurred to the hand, normal sized workers. The wrist and finger among comp system. differential was nearly three employees in the highest obesitimes for those with BMIs in ty group,” NCCI said. the Class I range, and nearly twice for those in In a California Department of Health the overweight range.” Services study, obesity (BMI of 30 or higher) The Duke study also looked at BMI impacts resulted in nearly $18 million in increased on the body, nature of injury and occupational direct workers’ compensation costs per year group. The strongest BMI relationships were (measured in year 2000 dollars) and nearly $71 seen for sprain or strain, contusion or bruise, million in indirect costs. and pain and inflammation categories. The NCCI is conducting its own study on Claims caused by lifting, falls and slips, and the effects of obesity on the cost of medical exertion had the largest BMI effects, NCCI claims. The study is expected to be available in said. Persons in physically demanding jobs, early 2010, but preliminary results indicate: such as skilled craft workers, also tended to • Obese claims are about three times more ex26 | INSURANCE JOURNAL-WEST REGION May 18, 2009

pensive at the 12-month maturity, and five times more at the 60-month maturity. • Added treatments related to obesity can balloon cost differences by as much as 30 times or more in a claim. • The percentage effect of obesity on claim costs is lower in states where mandatory utilization review and mandatory bill review stipulations are in place. “Obesity and its related effects have markedly increased the costs to the workers’ compensation system, especially in terms of indemnity and medical severity (i.e. cost per claim),” NCCI said. “Unfortunately, the continued increase in obesity rates — in the face of substantial mitigation efforts by both government and business — suggests that the issues relating to obesity will continue to be a major issue well into the future.” “Because obesity is trending upward, it will no doubt contribute to additional workers’ compensation costs,” said Harry Shuford, practice leader and chief economist for NCCI. “... But at this present time, there’s not much the workers’ compensation insurance industry can do. Changing the trend in obesity relates to the decision of wellness programs and lifestyle. And [in my opinion I] believe it’s inappropriate for a workers’ compensation insurance company to have an opinion on people’s lifestyles.” For more information, visit www.ncci.com. IJ www.insurancejournal.com


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West Coverage News & Markets

2009 Fire Season Outlook Identifies Few Areas of Concern Forecasts Normal to Below Normal Potential Across Most of the West

N

orthern California, where nearly a million acres burned last summer, is poised to possibly be another hotspot for wildfire activity in 2009, according to the Fire Season Outlook released by the Predictive Services group at the National Interagency Fire Center. The seasonal outlook considers the condition of wildland fuels, weather forecasts, and climate and drought data. “Whether or not we see that potential develop into another severe fire season in California depends on ignitions,” said Rick Ochoa, fire weather program manager at NIFC. “Last year we had wide-spread lightning storms move through that area and ignite multiple fires.” In addition to California, north-central Washington is expected to see above normal potential for wildfire activity, based on persistent drought conditions. While the moun-

28 | INSURANCE JOURNAL-WEST REGION May 18, 2009

tainous areas in both Washington and and cooler early spring temperatures are Oregon currently have near to above normal expected to moderate conditions and keep snowpack measurements, some coastal and the fire potential in the normal range for southeast mountain areas in Oregon and in most other states. north/central Washington snow pack and For instance, an above normal snow pack snow water content amounts are running should delay snow melt and fire season 70 percent to 80 percent of onset over higher elevation normal. In north/central areas across portions of the Ariz., N.M., Washington, low snow accunorthern Rocky Mountains, mulations will likely melt especially in northern Idaho Calif., and early. Thus, significant fire and Montana. north central potential is expected to Although drought condiincrease to above normal levtions are expected to persist Wash. have the els in north/central in Nevada, the lack of moisgreatest fire Washington by mid-late June ture and subsequent lack of as fuels cure and dry early in fine fuels are expected to potential. the fire season. result in a below normal Elsewhere in the state, fire potential. some spikes in large fire activity are expect“Active fire years in Nevada typically have ed during the summer fire season, especially well-above normal winter rainfall, abundant during dry lightning events. grass and an above average snowpack, none The Southwest, from Texas of which are present so far this year. to Arizona, also is expected to Consequently, Nevada is expected to have a see above normal fire potential below average fire season in terms of total until what is expected to be a acres burned,” NIFC said. robust monsoon season that In Alaska, ample moisture over the winmoderates conditions there ter, combined with a forecast for normal to beginning in early July. Above below normal temperatures results in below normal significant fire potential normal potential for fire activity there as currently in place across the well. southeast half of the area will Canadian drought code values were low shift north and west to central across the eastern interior last fall due to wet and southeast Arizona and the conditions. Forecasts for May through southwest quarter of New August call for near to below average temperMexico during late May to early atures and near average precipitation across June. This will occur as spring portions of western and southern Alaska winds gradually give way to through the outlook period. In areas of bughotter and drier conditions killed timber, especially on the southwestacross much of the area. ern Kenai Peninsula and portions of the At the same time, moisture western Cook Inlet, there is an elevated risk events are expected to intrude of large fires. Historically, fire seasons folinto west Texas and eastern lowing La Niña conditions tend to burn less New Mexico, which will begin than the average number of acres. to moderate fire potential in “Overall, the areas with the greatest fire those areas. Significant fire potential this summer are Arizona, New potential will moderate across Mexico, California and north-central the majority of the region by Washington,” Ochoa said. early to mid-July. The full seasonal assessment can be Elsewhere around the West, viewed at: www.predictiveservices.nifc.gov/ however, winter snowpacks outlooks/outlooks.htm. IJ www.insurancejournal.com


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Idea Exchange What Agents Want

What Do Agents Want? By Ellen D. Kiehl

W

hat do agents want from their insurance carriers? Surprisingly, compensation is not No. 1 on the list. Rather, independent insurance agents would rather have a good relationship with a carrier that is responsive. One agent explains it this way: “When it is hard to work with a company, we don’t use them a lot.” That statement shows why PIA groups in four states put so much effort into their joint Company Performance Survey project, now in its eighth year. A market is a terrible thing to waste — yet, some companies all but disqualify themselves. Here’s another comment from the most recent survey: “A company with good service and technology can pay us less. A company can have bad enough service that no compensation will offset it.” The CPS project began with a prototype developed by PIA of Connecticut’s Company Relations Committee back in 2002. Since then, more than 29,000 individual company ratings have been provided by agents in Connecticut, New Hampshire, New Jersey and New York — an average of just over five carriers rated each year by each participating agent. PIA publishes performance ratings annually for nearly 100 different insurance markets. In preparation for its 2009 company-specific survey, PIA conducted a preliminary “benchmark” survey in the four states to test the 16 standard performance criteria it uses. Additional criteria also were presented — 35 in all. Using a zero-to-10 scale, agents were asked to score each factor according to its importance when they evaluate an insurance carrier. Space also was provided for free-form comments like the ones quoted here. Results show PIA is accurately capturing the concerns of its members. According to a participating agent: “Tough survey — I had to fight off the urge to mark everything a ten!” None of the 35 items scored below a six, on average. Rated of least importance by agents is whether a company runs a customer service center. 30 | INSURANCE JOURNAL-WEST REGION May 18, 2009

Two performance items relating to claimshandling scored highest overall: “adjusts claims fairly” and “pays claims promptly.” Around 70 percent of respondents rated each of those a “10.” Fewer than half said “competitive compensation” is of highest importance when they look at a carrier. In fact, agents tend to identify strongly with their customers and need their companies’ support. “If there’s a claim, let’s show we care. It matters,” one PIA member commented. “Quality of service clearly overrides the ‘profit-only’ motive that agents are falsely accused of being driven by,” according to Jim Pittz, business issues director for the four state associations. “A smooth claims process allows independent insurance agents to help their clients quickly.” Speed sells. PIA often hears from members that speed in providing quotes and resolving problems also is extremely important to agents. According to a benchmark survey comment: “Perhaps insurance companies should concern themselves more with customer service to their agencies ... It is very frustrating to be unable to speak with a person and solve a problem in a timely manner.” That comment explains many of the benchmark survey’s remaining top-10 company performance items: • communicates clearly, honestly; • resolves issues quickly; • underwriter knowledge, experience; • listens, responds to agents; • easy, intuitive technology; • stable markets; • consistent underwriting; and • competitive pricing. Based on feedback from the benchmark survey, PIA will add a few items to the CPS company-rating procedure and modify some of the survey’s standard items to reflect agents’ need for speed and clarity in an ever-accelerating business environment. But poorly executed automation isn’t helpful, as this agent explains: “Too many companies throw a Web-app together with no consideration toward the agent’s time. [It] asks unnecessary questions,

poor design in screens, long pauses for screen refreshes, asks questions in a stupid order, etc. This is the biggest waste of time for the agent, and then he can do little to make the sales process more efficient.” Sales — it’s what both companies and agents want most. When there’s a mismatch between what agents really need and a company’s execution, this can affect their sales partnership, the survey revealed. An agent puts it this way: “The overall relationship [between] companies and agents is [in] direct relationship to the amount of business ... Also in direct relation is the ease of doing business, both from a technology standpoint and from a customer service/claims-handling standpoint. The more streamlined and efficient a carrier can be at this, the more an agency will be apt to write with them.” Communicating on behalf of agents what a specific company or business unit is doing right, and where it could improve is the goal of PIA’s CPS project. In 2009, more than ever, PIA can explain to carriers what their performance ratings mean in relation to agents’ priorities — and thus to potential sales. IJ PIA Senior Research Analyst Ellen D. Kiehl, Ph.D. came to PIA in 1976, and has worked in numerous communications and government-related positions, including assistant executive director and director of government and industry affairs. Dr. Kiehl has researched and written numerous position papers and hearing statements and on several occasions has testified for the four associations. PIA of Connecticut, New Hampshire, New Jersey and New York State Inc., is a partnership of four statewide trade associations that represents professional, independent insurance agencies, brokerages and their employees. www.insurancejournal.com


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Idea Exchange Agency Management

Don’t Repeat the Seven Deadly Sins of Customer Service By Roy Chitwood

Chitwood

P

oor customer service is making headlines these days, and to some extent, it’s no wonder. Many companies facing economic pressures have been forced to layoff staff or reduce hours. And remaining employees are forced to pickup the slack, doing more with less. Recent surveys have highlighted the worst customer service offenders. And at least in the media, attention is being paid to the fact that customer satisfaction seems to have fallen to the bottom of the list of priorities for many companies today. The question is are those companies that are being talked about paying attention to all the press? And is a poor economy a good excuse for bad customer service? In a marketplace as competitive as ours, it’s a wonder so many companies choose to treat their customer like the enemy — during good and bad times. Can dropping of a

Customer Service Hall of Shame A ranking of the companies whose service is most-often rated “poor” by consumers. AOL Comcast Sprint Abercrombie & Fitch Qwest Capital One Bank of America Time Warner Cable HSBC Finance Cox Communications

47% 42% 39% 38% 34% 32% 31% 31% 30% 29%

Ranked in 2008 by percentage of survey respondents who rated a company’s service “poor.” Source: MSN Money-Zogby Poll 32 | INSURANCE JOURNAL-WEST REGION May 18, 2009

few hundred “high maintenance” customers — as Sprint/Nextel did when it “fired” customers who complained too much via a severance letter —compensate for an ineffective customer service procedure? Is it the customers who are in need of improvement, or is it the companies? In a recent statement, a wellknown CEO of a Fortune 500 company said his job would be easy if he didn’t have to deal with customers. What if every business fired customers it didn’t want to deal with? Imagine if your mechanic dropped you because your car had too many problems. What if your local grocery store started locking the door when they saw you coming because you kept asking for items they didn’t have or had to special order? It sounds absurd, but this is, in essence, the approach that some companies like Sprint/Nextel have taken. More and more, businesses are simply choosing not to put the time, money and effort into improving what isn’t working. They want a quick fix, and they want the difficult people and their problems to go away. Unfortunately, when the customers go away, so do profits. No company can expect to be profitable when customers have been treated as expendable and bad press is all the press they seem to garner. No matter how much money is spent trying to help needy customers, it is insignificant compared to lost future business because of a

poor customer service procedure. This is especially true for publicly held companies. While public firms have an important financial responsibility to their stockholders, they cannot escape the fact that without a strong customer base, their stock is not going to be worth much. Without effective sales, marketing and customer-service procedures in place, new customers can’t be cultivated and the existing ones will be alienated. When there is a breakdown of customer service effectiveness within a company, it usually is because the company is committing one or several of the “seven deadly sins” of customer service. They are: 1. It is not company policy. The truth is, the customer does not care if it is company policy. The customer has a problem and it needs to be taken care of. 2. That is not my department. Again, the customer does not care if the problem falls under your department or not. When you receive a complaint, you need to own it. The customer wants the problem solved and for someone to take responsibility. Following through is the only way to ensure the customer’s complete satisfaction. 3. Not listening to understand. Many times, the customer feels that a service representative is not listening. Although the rep may be hearing the customer’s words, he or she fails to comprehend the customer’s feelings. How the customer feels is far more important than the facts. www.insurancejournal.com


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4. Thereâ&#x20AC;&#x2122;s nothing I can do. There is take care of the problem. If the customer has always something that can be done, even if it to be trustworthy and competent, so does is only to effectively communicate to the cus- the company. tomer that there really is nothing you can do. Take the outcry in Chicago regarding the When that is communicated properly, howev- changeover in department store names from er, the customer will know historic Marshall Fieldâ&#x20AC;&#x2122;s to that someone cares and that Customers asked, among Word-of-mouth Macyâ&#x20AC;&#x2122;s. person tried to offer soluother things, for the name of the tions. store to remain the same, to produces bet5. That is not correct. to carry some of the ter advertising continue The No. 1 rule in customer same brands and to, above all, service is that the customer retain the level of customer servthan any ad is always right. If you think ice that placed Marshall Fieldâ&#x20AC;&#x2122;s campaign. the customer is wrong, at No. 2 in customer service refer again to the No. 1 rule. among department stores 6. Tell me again. Customers resent havnationally. ing to explain their problems several times, What was Macyâ&#x20AC;&#x2122;s parent companyâ&#x20AC;&#x2122;s to several people, in a long, drawn-out effort response? An accommodation that included to get satisfaction. Many times the frustration keeping the Marshall Fieldâ&#x20AC;&#x2122;s signature mints caused by this becomes more of a problem and bringing in a few celebrities for the Macyâ&#x20AC;&#x2122;s than the original problem itself. grand opening. Not surprisingly, according to 7. Prove it. When an employee tells the The Wall Street Journal, polls of Midwest shopcustomer to â&#x20AC;&#x153;prove it,â&#x20AC;? what he or she is saypers indicated that, based on the name change ing is, â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t trust you and we assume alone, nearly 20 percent of the existing youâ&#x20AC;&#x2122;re either incompetent or lying,â&#x20AC;? and yet Marshall Fieldâ&#x20AC;&#x2122;s customers didnâ&#x20AC;&#x2122;t plan to shop companies ask customers to trust them to at the new store. If customers canâ&#x20AC;&#x2122;t trust that

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their requests will be met or that the company will be honest with them, why would customers be motivated to shop there? Companies who continue to make the top 10 â&#x20AC;&#x153;worstâ&#x20AC;? customer-service lists and who alienate customers have a limited shelf life. Just like the top 10 worst list, there is also a top 10 â&#x20AC;&#x153;bestâ&#x20AC;? customer-service list. Companies like Nordstrom, American Express and Marriott are known to be eager to help and serve customers their competitors have relinquished, because they understand that a happy customer is a repeat customer. Even during tough times, such companies know that word-of-mouth produces better advertising than any ad campaign ever could â&#x20AC;&#x201D; and itâ&#x20AC;&#x2122;s far cheaper than trying to resurrect a positive public image once the damage has been done. IJ Chitwood is an author and consultant on sales and customer service. He is the former president and chairman of Sales & Marketing Executives International and is president of Max Sacks International based in Seattle. Web site: www.maxsacks.com. To subscribe to his free tip of the week, â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;re on Track,â&#x20AC;? e-mail contact@maxsacks.com.

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May 18, 2009 INSURANCE JOURNAL-WEST REGION | 33


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Idea Exchange Understanding ALE

What Additional Living Expense/Loss of Use Coverage Means to California Fire Victims By Laurie Infantino

T

he skies are filled with smoke, and hundreds of homeowners were evacuated from their homes in Santa Barbara earlier in May. During November 2008’s Tea Fire, which occurred in roughly the same areas as this year’s Jesusita Fire in Santa Barbara, our close friend, Mike, who was evacuated from his home in Anaheim Hills and stayed with us until he could return. He started asking insurance questions, and I started thinking about how complex and confusing the insurance issues are when you really have to put them to the test. Mike’s immediate need, as is true with most of the displaced homeowners, is, “Where am I going to live?” The simple insurance answer to that question is: “Well, you have additional living expense (ALE) or loss of use (LOU) on your homeowners policy.” That is the coverage that will pay for hotel costs. As simple as that answer may seem, it is not simple at all. Let’s begin with the basics. The ISO forms

Infantino

have for more than a decade and a half provided coverage D “loss of use” coverage as an automatic coverage on the HO 3 form. Older versions of the form referred to coverage D as “additional living expense,” which was more restrictive. As we look at the various insurance companies providing homeowners insurance, some carriers just provide ALE.

Confusing Point #1: Does the insurance carrier providing the homeowner’s coverage provide “loss of use” or just “additional living expense?” If only ALE is provided, then, as the title of the coverage would suggest, it provides for “... any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living.” So, the form does not pay your mortgage, does not pay for your normal food bills, but only pays for those costs that are increased from your normal standard of living. Emphasis on the word “normal.” This is true whether the policy provides just ALE or LOU. As with any form of insurance, the homeowners policy does not intend to make “you” any better than you were prior to the loss. The paragraph under “additional living expense” referenced in the form begins with the lead in A huge plume of smoke rises from Los Padres National Forest on the northeastern flank of the Jesusita fire language “... If a above Montecito, Calif., May 8, 2009. Firefighters were making progress on May 9 toward containing a loss covered ferocious California wildfire then in its fifth day that had destroyed 80 homes and forced some 29,000 peo- under Section I ple to evacuate an area above the seaside city of Santa Barbara. Picture taken on May 8, 2009. makes that part REUTERS/Rafael Agustin Delgado (UNITED STATES DISASTER ENVIRONMENT) of the ‘residence

34 | INSURANCE JOURNAL-WEST REGION May 18, 2009

premises’ where you reside not fit to live in we cover ...” What that lead-in language in the sentence means is that you must have a physical loss, in this case fire damage, to your home for the homeowners policy to pay for any ALE. But that is not what happened to Mike. His home had not been damaged. He was forced to evacuate and was not allowed to return to his home by order of civil authority. For all of the unfortunate homeowners who had to move to hotels, board their animals, eat out at restaurants — unless their home actually sustained damage the ALE will not pay. This coverage would be available if “loss of use” coverage is being provided. The definition of “loss of use” includes: additional living expense, fair rental value, civil authority prohibiting use. It is the “civil authority prohibiting use” paragraph that provides “... If a civil authority prohibits you from use of the ‘residence premises’ as a result of direct damage to neighboring premises by a peril insured against, we cover the loss as provided in: 1. Additional Living Expense and 2. Fair Rental Value above for no more than two weeks.” In plain language, that meant Mike had two weeks coverage for those additional costs during the time he could not return to his home — even if his home has not sustained fire or related damage. Confusing Point #2: How much coverage is provided in the policy? Now the questions are getting more difficult. There are several possible answers to that question: Answer No. 1: “Loss of use” is limited to 20 percent of the amount provided for the dwelling. This is the typical ISO language. If that is the case then there will typically be an amount shown on the declaration’s page. For example, if the amount on the dwelling www.insurancejournal.com


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is $500,000, then LOU will be $100,000. Sometimes, the declaration’s page will only show the amount on the dwelling and show the word “included” for LOU, which would then mean included typically for the 20 percent provided in the policy. Answer No. 2: “Loss of use” is written on an “actual loss sustained” basis referred to by the initials ALS. The first time I ever ran across the term “actual loss sustained” in this context was when the business owners policy (BOP) was first introduced in the insurance marketplace and provided actual loss sustained coverage for business income. The form went on to define the actual loss sustained as providing Insurance isbusiness income for sues are coman unlimited amount recoverable for up to a plex and conmaximum of 12 fusing when months. The homeowners policies folyou put them lowed suit and startto the test. ed to refer to ALE/LOU as actual loss sustained. It sounds simple enough, but it’s not simple at all. • Some insurance companies indicate ALS on the declaration’s page and show no time limitation on the declaration’s, but have a time limitation such as 12 months to 24 months within the form language. • Some insurance companies indicate ALS on the declaration’s page and show the time limit such as ALS (12 months maximum recovery). That is easier for an insured to understand. They see a time limitation on the declaration’s page and do not have to read the forms themselves. And the reality is that too often, insureds only get a declaration’s page for their policies as they renew coverage from year to year. They would have no way of knowing that ALS was not really unlimited. • Some insurance companies indicate ALS and have no time limit for it either on the declaration’s page or in form language, which means it does not have a stopping point other than when the home is fixed or the insured has a new permanent residence. Coverage could last well beyond the 24-month period. • Some insurance companies do not use the word ALS at all on the declaration’s page and may indicate included but the coverage is unlimited. In the wake of this most recent disaster, my www.insurancejournal.com

advice to all homeowners affected by the Jesusita fire in Santa Barbara is to look closely at the language of the homeowners policy and speak with their insurance agent/company. And if you have a friend that comes to you for help, it is easier to offer a cold martini and a shoulder to cry on then quick insurance answers. IJ

Infantino is the co-founder of Insurance Skills Center formed in 1977. As ISC President, she manages and directs the day-today operations of ISC, develops education/training programs and related products and serves on the ISC faculty. Infantino is an instructor for ISC as well currently serves on the national faculty of CIC instructing throughout the country. E-mail: laurie@insuranceskillscenter.com.

Take advantage of these exclusive services from Insurance Journal: Classified print & on-line ads Press Release “Newswire” service Yellow Pages on-line business listings For more information contact: Nicola Coghill Phone: 800-897-9965 ext. 125 Email: ncoghill@insurancejournal.com Or visit: www.insurancejournal.com/advertise

May 18, 2009 INSURANCE JOURNAL-WEST REGION | 35


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Idea Exchange Profit Verses Price

Short-Term Profits Versus Long-Time Clients By Tom Ninness

I

n today’s world, price is everything. Everyone seems to be looking for a bargain — shopping grocery stores for the weekly deals, hunting down the gas station with the lowest price or waiting for retail stores to put merchandise on sale or clearance. But is shopping for a bargain always the best strategy? For insurance professionals, bargain shoppers will not guarantee long-term business prospects. Although the right price is essential to be competitive, it is more important to be trustworthy, serviceoriented and conscience of the client’s specific needs. For most insurance agents, losing a sale means not only commissions lost in the present, but the opportunity for future business and referrals. Building a referralbased business focuses the agent as the best person for the job. Undercutting price to “get the deal” may work for a while, but without substance behind it, business will dry up. Negotiating a price for the sake of a sale without consideration of profit will soon leave the agent with no income. Referrals are the only way to sustain business for the long term. Sometimes negotiating a price will preserve the sale,

36 | INSURANCE JOURNAL-WEST REGION May 18, 2009

and that may be prudent if the client has By asking questions, building rapport and the potential to be a solid referral source or caring about the customers’ needs, you will creates possibilities for future business. establish that you are concerned more You don’t want to lose the sale and lose the about the client and not about the commisopportunity of future business and refersion. rals. Develop relationships, listen to the If the majority of your clients are a result client, understand their needs, and execute of a referral, you have your services better and already been pre-sold as an faster than anyone else. Building a expert and a have a high Every appointment needs referral busilevel of credibility. You have prep time — make sure you the responsibility of estabare as prepared as possible ness focuses lishing trust by asking the for each and every client. the agent as prospect probing questions. Be readily accessible for Know your products well the client. Explain the best the best perand know your competiways the client may commuson for the job. nicate with you. Also ask the tors’ products. If negotiating price becomes an issue client what’s the most conyou will be prepared to position yourself as venient way and how frequent the client a top authority, with a commitment to would like to be communicated with. small details. That can be the difference Keeping even the smallest commitments between saving and closing the deal at a will slowly build trust. respectable profit and losing it entirely Sometimes it becomes absolutely necesbecause of price alone. sary to negotiate price. Move cautiously. Although Internet shopping for lenders Jumping to the lowest price leaves no latihas become popular as of late, it is the clastude for discussion. Clients who are merely sic example of price isn’t everything. One shopping for price will pin you to a pricestudy shows only 16 percent of loans point with no guarantee of commitment. through Internet lenders close at the quotWhen you are up against price, negotiating ed price with and meeting halfway with the client’s price the quoted gives you have a better than 50-50 chance rates and close in getting the business. on time. Your Building an insurance agency business clients place a through referrals keeps a steady stream of lot of trust in reliable income. Negotiate price only when you and what necessary. Remain professional in every you represent. aspect, respect the client’s needs and conAlways under cerns, build trust and communication, and promise and be mindful of the small details. Your over deliver. clients want someone they can trust and Agents feel confident in referring others as well as should be probthe best price. IJ lem solvers. Ninness is vice president/regional production manager for This is the reaCherry Creek Mortgage in Denver. He is also the president son the client is of Summit Champions Inc. and creator of the “The 90 Day hiring you. Journey to Your Sales Success,” a 90-day action plan for the They have a sales professional. To learn more about The Journey and problem and Summit Champions, visit www.90dayjourney. com. E-mail: you are the tomninness@summitchampions.com. right solution. www.insurancejournal.com


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Idea Exchange Industry Changes

Reinvention in Insurance: Is it Possible? By Susan Preston

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espite what you may think, the insurance industry has not changed much in the past century. The insurance industry was regulated in 1945 with the passage of the McCarran-Ferguson Act that allows insurance to be regulated as interstate commerce. Little has changed the past 25 years, and I suspect not much changed in the earlier portion of the 62 years since regulation. How can that possibly be? We are living in a digital age. Every company and every individual in business must reinvent themselves or go into rapid decline. At a recent industry party, many consultants lamented they were “not that busy.” They indicated that work was available, but it wasn’t the type of work they wanted. No wonder they are singing the blues: rarely a sign of them in industry news. If they have not reinvented themselves, How can we possibly sell products to an they have probably gotten left behind. ever changing world where the average perNo matter what you think of them, son in our industry does not represent Madonna, the Rolling Stones and Paul them? No wonder our young people think McCartney have all made major comebacks insurance is boring. by adapting to the times and changing Then there is the issue of paperwork. It is their style. The same can be said for amazing how much data on standard indusHarley-Davidson Inc. and Apple when try forms no longer applies to the vast majorSteve Jobs came back. ity of industries. If each speOn the other hand, witcialty program was permitted ness the decline of compato develop its own forms, nies such as Polaroid, the The world has applications and policies, we struggles at Yahoo!, and the changed, could better sell and relate to fall of General Motors and clients. Yet as an industry, we Chrysler. Companies and whether we in prefer to develop useless, individuals that don’t the insurance wasteful paper because of an change on a regular basis become irrelevant or go out industry like it outdated norm. Program administrators of business altogether. or not. often get endorsement What does that say for requests on ISO forms, which the insurance industry that often involve one piece of paper saying, “see has not changed substantially since 1945? attached,” then three more pages to request Look at the demographics of our indusa change of address. What is wrong with try. Where are the women in positions of sending an e-mail saying the change is real power? And where are the minorities? needed? Many brokers and companies are Their percentage of the California populausing forms that were developed before tion is approaching 50 percent, yet there is 38 | INSURANCE JOURNAL-WEST REGION May 18, 2009

Preston

many of us were born. Then there is the topic of license regulation on the state level. Insurance organizations support this nightmare, and then ask us to contribute to the continuance of this outdated system. If an agency does wholesale and retail business in every state, it will be required to have almost 200 licenses, and file corporation and pay associated taxes in about 15 of the states. Why do our own peers support this system? The world has changed, whether we in the insurance industry like it or not. It is time to join the 21st century and become more diverse in our business practices and recognize the digital age is here to stay. Our people, our regulation and our insistence on massive amounts of paper should be evaluated, and a more up-to-date way of doing business should be brought into our world. Companies that are ahead of the curve are more likely to survive and thrive than those still holding firm to out of date thinking. IJ Preston is president of Professional Program Insurance Brokerage (PPIB) in Novato, Calif. Web site: www.medispa-ins.com. www.insurancejournal.com


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Idea Exchange Influenza at Work

Pandemics in the Workplace How a Flu Pandemic Impacts Workers’ Comp By Andrea Wells

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nfluenza is nothing new. Seasonal flu epidemics — disease outbreaks with more cases than normal— occur annually killing between 250,000 to 500,000 people worldwide. While most deaths associated with influenza in industrialized nations occur among people age 65 or older, an epidemic can cause serious public health and economic problems, including high levels of worker absenteeism and productivity losses. When influenza viruses reach pandemic proportions — or a worldwide epidemic of the disease — the results can be devastating. So as H1N1 virus, or swine flu, continues to spread across the globe, the world has begun to take notice. For some, H1N1 also stands as a stark reminder of a much deadlier flu pandemic just a few years ago, H5N1, or avian flu. Insurance Implications A pandemic’s effect on assets of any organization whose business involves the gathering of people could be severe. Most businesses would find no coverage for losses resulting from a pandemic. To combat the potential

impact, it’s important for businesses to have a crisis plan in place, says Dr. Steven Weisbart, the Insurance Information Institute’s chief economist and resident pandemic expert. Employers need to adopt special policies for emergency times like this so their business is impacted less, Weisbart advises. “There’s very little insurance for the business implications of supplier disruptions other than the usual perils,” he said. “This www.insurancejournal.com

Insurance Professional’s Practical Guide to (swine flu) is not on that list so therefore Workers’ Compensation: From History would not be an insured event.” Not only supThrough Audit.” pliers but also customers are at risk. In a pan“A worker contracting asbestosis, that’s demic, “you would potentially see people staypeculiar to the job. Coal miners, contracting ing home from movies or malls. There is no black lung disease, it’s a hazard of the work. coverage for business interruption that would But if you’re a grocery store worker and you pay off in those instances either,” he noted. get sick, that’s not peculiar to the job. That’s Weisbart said that unlike the avian flu, peculiar to being a human,” where mortality rates have Boggs said. Unless the disease been identified as very high, ‘You need to arises out of the job, not the swine flu so far appears to have a plan. because you were at your job, be less lethal. But he cautions, workers’ compensation would it’s still very early. The deadly It’s all about not come into play, he added. 1918 flu pandemic had a death protecting the While workers’ compensarate lower than 2 percent, he tion rules vary by state, comsaid, and that flu killed some worker.’ pensable claims are very fact 40 to 50 million people worldspecific, says Ken Brown of wide. theNational Council on Compensation Paul Braun, Aon’s director of casualty claims in the United States says that while businesses Insurance Inc. “Each state has specific rules in regards to may have prepared plans a few years ago in what’s covered,” Brown said. In some cases, response to the avian flu pandemic, when the workers’ compensation coverage for contractthreat of avian flu subsided, so did some risk ing swine flu might not be an issue, perhaps mitigation efforts. in health care work. “But for most folks, it’s “Like everything else, when the pandemic going to be tough to prove where the exposure was considered to be not as much of an issue to the disease took place. It gets back to everyone backed away from it and now we whether the exposure was in the course and have once again a similar kind of situation,” scope of the employment or not.” Braun said. “The same issues apply,” he said. In Texas, for example, for a claim to be “You need to have a plan. It’s all about protectcompensable the exposure to the disease has ing the worker. You need to take the approprito be something that occurred within the ate actions as an employer on developing a course and scope of the person’s employment, plan on how you are going to respond directly tied back to what they do. “For a depending on the type of industry you are in.” health care worker that distance becomes a lot shorter, but for a construction worker Workers’ Compensation where was the exposure? If the health care Workers’ compensation might be somewhat worker works in a clinic and is dealing with affected in the property/casualty market people that have that disease, you might be should a pandemic take hold, but only for able to prove that link.” those industries where the flu may have been In the end, workers’ comp coverage ties contracted during the course and scope of the back to medical evidence, says Aon’s Braun. job, experts say. “Medical evidence and the laws in states — in To be considered an occupational disease every case there has to be the facts of the and therefore compensable under a workers’ claim and the medical evidence that supports comp policy, the disease must arise out of or the issue of compensation,” he added. “You are be caused by conditions peculiar to the work, applying proper investigation to make sure says Chris Boggs, associate editor of this is truly an occupational disease.” IJ MyNewMarkets.com and author of “The May 18, 2009 INSURANCE JOURNAL-NATIONAL REGION | N1


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Idea Exchange The European View

Capital, Capital, or Where Did All the Money Go? By Charles E. Boyle

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t least the global depression has focused people’s minds on some important issues. The Group of 20 (G20) meeting in London acknowledged the need for more capital to shore-up the world’s financial system — essentially the U.S./UK view — as well as the need for stronger regulation of the financial sector, to try and reign in the excesses that caused the problem — the European view. Across the Irish Sea in Dublin the European Insurance Forum (EIF), which concluded its proceedings the day before the G20, got underway, focused on the same issues, albeit

from an insurance industry perspective. This article focuses on what the world’s, and the insurance industry’s, leaders consider the most pressing problem — shoring-up the global financial sector. How the Credit Crisis Affects Insurance Somewhat ironically, and with some notable exceptions, the industry has by and large escaped the worst consequences of the financial meltdown. American International Group, the monoline mortgage insurers, and many life and pension groups have suffered severe losses. But the property/casualty industry — in the United States, Europe, Asia and elsewhere — has so far avoided the most dire consequences of the meltdown. At the EIF, James Vickers, chairman of Willis Re International, pointed out that “all the clever people” who saw the insurance industry as “not very exciting,” are now wondering how it managed to survive the current

needed to change for years. However, the curcrisis, while they are floundering. He said that rent capital crisis makes the message a lot the industry “had continued to “focus on what more urgent. it’s good at, while the others went ‘off piste.’” Charman puts the blame for inaction on He didn’t need to mention that strong regulathe industry itself. In his opinion, the problem tion and reserve requirements played a major isn’t with the reinsurers, but is due to primary role in preventing the industry from following insurers “commoditizing pricing.” As a result, the bankers’ excesses. That’s understood. premiums are too low, and “customers refuse The more immediate concern is how the to pay, even when the price is right.” industry can continue to avoid being sucked As a consequence, if insurance companies into the financial maelstrom, which over time cannot offer the prospect of decent investcould threaten its continued access to capital. ment returns for potential investors, how are “We’re not capitalized enough,” was the way they going to attract capital? If the primary Michael O’Halleran, executive chairman of insurers don’t “adequately price products, it Aon Benfield, put it. In other words, if the discourages investors, as they can’t make any industry needs more capital, where will it go money,” Charman said. That’s the heart of the to find it? problem, but there may be some solutions. In normal circumstances, the industry would be in relatively good shape. The reinInsurers have a ‘Window of Opportunity’ surance industry was able to handle $52.5 bilThe insurance industry doesn’t operate in a lion in property claims (according to Swiss vacuum. Companies and brokers have a recipRe) in 2008, the third worst year for natural rocal relationship with the economies in catastrophes in history. However, these are which they do business. If enterprises and not normal times. What would happen if 2009 individuals spend less, less coverage is written or 2010 were to produce similar figures? The and income drops. Therefore anything intercapital markets are in a coma. If a costly disasnational governments can do to ameliorate the ter results in further losses — a major hurricurrent crisis ultimately helps the industry. cane for instance — the industry could find At the G20, world leaders pledged $1.1 trilthat it very difficult to replace the capital it lion to the International Monetary Fund, the needs to continue to function. World Bank and to support trade in order to “This is the first time that the [insurance] help developing economies. True, much of that market has been affected by the asset side of money had already been allocated and a signifthe balance sheet,” said AXIS Capital CEO and icant portion may never materialize. President John Charman. As a result, he Nevertheless, it should help developing counbelieves the industry, more than ever before, tries, and to some extent the will have to “get back to basics.” more developed ones, to avoid Not only can it no longer rely on ‘The industry a total collapse. Insurers and investments to make up for unbrokers doing business in derwriting losses, but it may not needs better those countries should benefit. even be able to rely on the capimanagement Spanish Prime Minister tal markets to supply capital. José Luis Zapatero said — as Charman said the industry and governreported by Reuters and perneeds to do more to modernize ment.’ haps somewhat exuberantly “from a number of different — that the G20’s decision points.” It will have to “get back “contributes to confidence ... and will facilito basics, because its investments are negative; tate recovery. We have set in motion the greatto set higher risk [evaluation] standards, more est concerted plan of fiscal expansion in histodiscipline and higher underwriting stanry. It is unprecedented. It reaches $5 trillion ... dards.” His prescriptions aren’t new. Many This amount will contribute in a decisive way industry leaders, particularly at Lloyd’s, have been telling their colleagues that the industry continued on page N11

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International Coverage News & Markets Fight for IPC Re Intensifies; Pirates Continue Attacks; Solvency II Gets EU OK By Charles E. Boyle A good old-fashioned fight has developed between Bermuda-based Validus Holdings and the Max Capital Group over the latter’s planned amalgamation with IPC Re. At the end of March, Max announced that it had made a deal with IPC Re’s board of directors to take over the company. Validus, however, saw things a bit differently. It launched an opposing plan, and when IPC and Max told the company to go away, it filed a lawsuit in the Supreme Court of Bermuda against IPC Holdings, IPC Ltd. and Max Capital, specifically challenging the “$50 million termination fee and ‘no-talk’ provision contained in the Agreement and Plan of Amalgamation between IPC and Max, dated as of March 1, 2009, as amended on March 5, 2009.” Validus said it is “seeking among other things an injunction to restrain payment of the termination fee and to restrain operation of the “no-talk” provision on the bases that (1) because of its excessive size, the termination fee amounts to an unlawful penalty under Bermuda law and is accordingly unenforceable, and (2) entry into the Max Amalgamation Agreement, in circumstances where the agreement contained the termination fee and “no-talk” provision, constituted a breach of the directors’ fiduciary duties.” In response, Max fired back that it would “vigorously defend the enforceability of the amalgamation agreement between IPC Holdings Ltd. and Max against the meritless lawsuit filed on April 28, 2009, by Validus Holdings.” Max Cap’s Chairman and CEO W. Marston Becker attacked Validus “hostile takeover attempts” and, in relation to the lawsuit, said: “We view this action as nothing more than another attempt by

Validus to distract investors.” On May 1, Validus fired back with a “three-part plan,” which consists of “(1) soliciting IPC shareholders to vote “against” the proposed Max Capital Group Ltd. (“Max”) amalgamation, (2) commencing an Exchange Offer for all IPC common shares and (3) petitioning the Supreme Court of Bermuda to approve a Scheme of Arrangement under Bermuda law.” Both sides have characterized their respective offers as superior to the other. As 94 percent of IPC Re’s shares are held by institutional investors and mutual funds, they presumably have competent people who can decide who is offering the better deal. Proxy materials have been sent, and the shareholders meeting, scheduled for June 12 should determine who wins. For more detailed information go to: www.maxcapgroup.com, www.validusre. bm or www.ipcre.bm

ashore. They move their money ashore. You can’t have a discussion about eradicating piracy without having a discussion about the shore dimension.” Admiral Roughead also noted that a combined sea and shore approach had helped curb pirate attacks in the Strait of Malacca between Malaysia and Indonesia. Piracy in the Strait, one of the world’s busiest shipping lanes, became so serious that in 2005 the Joint War Committee of the Lloyd’s Market Association added the area to its list of war risk zones, sending insurance premiums sharply higher. Concerted efforts by Malaysia, Indonesia and Singapore helped slash the number of attacks in that region. Admiral Michael Mullen, chairman of the Joint Chiefs of Staff, told reporters after a speech at the Navy League conference that he did not support putting arms on commercial ships and that it was up to merchant ships to pay for their own protection. A sampling of Lloyd’s marine experts more or less concluded that the pirate threat could be conclusively dealt with, only if Somalia eventually gets some kind of stable government, something that doesn’t look very likely. The French Navy did find a novel way to thwart the pirates. They tricked three boatloads of would-be pirates into thinking that they were attacking a merchant ship, instead of a well-armed frigate — taking 11 of the marauders into custody in the process.

Somali pirates continued to attack merchant shipping, despite increasing calls for a solution to the problem. Richard Phillips, the U.S. ship captain held hostage by Somali pirates, told Congress that armThe Solvency II insurance regulaing some members of commercial ship tions continued their progress toward crews could help beat back pirate attacks. adoption, as the European But shipping executive approved the latest John Clancey opposed crews ‘This is key for Union version. Lloyd’s director and getting into an arms race modernizing general counsel Sean with pirates on the high McGovern stated: “We are seas. Clancey is chairman of insurance pleased that the Solvency II Maersk Inc., parent company regulation in Framework Directive has of Maersk Line Ltd., whose adopted by the EU. ship — Phillips’ Maersk Europe and we been This is key for modernizing Alabama — was attacked on are happy ...’ insurance regulation in April 8. Europe and we are happy Chief of Naval Operations that we can continue with preparing for its Admiral Gary Roughead, as reported by implementation.” The rules are scheduled Reuters, said after a Navy League conferto be in place by 2012. IJ ence: “Pirates don’t live at sea. They live

N4 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

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Closer Look Restaurants/Bars/Liquor

Attacked in a Restaurant: The Insurance Implications of Assault and Battery By Chris Boggs

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eing attacked by one or several restaurant employees is unexpected and somewhat disturbing. But it happened so quickly I could not react quickly enough to avoid being victimized. The Setup My wife arranged a surprise birthday dinner party to celebrate my 40th year. As dinner wound down, several restaurant employees appeared with a sombrero to put on my head and sing me their version of “Happy Birthday.” I had been through all this before so I knew what to expect — at least I thought I did. One employee put the hat on my head but the second unexpectedly hit me in the face with a whipped cream pie. I was attacked in broad daylight in front of several witnesses, none of whom sprang to my aid (mostly they just laughed at me). As the initial shock dissipated and I wiped off all the whipped cream I could reach, I began to think about the insurance implications of what just happened (yes, even in a time of distress I think insurance). Assault or Battery? Legal Definitions Related to the Attack Before I had my face fully whipped cream-free, I looked at the waitress and jokingly said, “You do realize that was assault and/or battery.” Although neither she nor the attackers responded, these terms have distinct legal meanings of which the restaurant’s management now needs to be aware: • Assault is not actual bodily contact, only the threat of bodily injury by force. Such threat is intentional and unlawfully directed toward another person such that the other party has a reasonable fear that injury is likely to occur. The apparent ability to carry out such a threat must also exist. A person pointing a gun at someone and telling them, “I’m going to kill you,”

would amply qualify as assault (in this case it’s with a deadly weapon). Battery is actual physical touching and does not equate to assault. • Battery, according to www.expertlaw. com, is actual physical contact with another individual against that person’s will. Such contact does not have to result in physical injury to be considered battery. Such contact is not limited to physical touching or beating but can also refer to the physical restraint of a person. Spitting on a person, although not likely to cause injury, can even qualify as battery. Battery can exist on its own without assault. An example would be someone just grabbing another person and beating them without provocation or warning. Based on the legal definition, I was a victim of battery. However, the amount of damages that I may be able to recover is minimal because I was not hurt (other than a little bit of my ego). But what if the person has an allergy or was hit harder than expected resulting in a broken nose or gouged eye — would the restaurant’s general liability policy respond, and how?

N6 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

How the CGL Responds Questions regularly arise as to whether the commercial general liability (CGL) policy responds to claims of assault and battery. The unendorsed CGL contains no specific exclusion for such actions, but coverage may depend on who perpetrates the assault and/or battery. The CGL promises to pay all sums the insured is legally obligated to pay as a result of bodily injury or property damage suffered by a third party. Legal obligation can arise out of contract or tort. A tort relates to the insured’s negligence in that if the insured is somehow negligent and a third party is injured as a result of that negligence, the CGL pays. Relating this to assault and battery, if a customer is a victim of assault and/or battery and the insured is somehow held liable for the actions (did not keep the premises safe, allowed an argument to escalate, did not protect the customer, etc.), the CGL responds and pays the claim. If, however, the insured is found to not be liable for the injury, then the policy will not pay. continued on page N8 www.insurancejournal.com


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But the attack on me was different. I was technically and factually a victim of battery, and the restaurant was undoubtedly liable — because its employees did it. The last fact seems to preclude coverage for the incident, leaving the restaurant on its own for any injuries that might have resulted; or does it? Certainly the expected and intended

injury exclusion (2.a.) would act to exclude coverage for this incident. However, when each word is assigned its everyday meaning and the wording viewed in its entirety, it does not necessarily exclude coverage for the restaurant’s attack on me. The exclusion reads: Expected Or Intended Injury: “Bodily injury”

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or “property damage” expected or intended from the standpoint of the insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property. So yes, the action was intended, but any injury that might have occurred is not intended, or even expected. Would the restaurant or anyone else reasonably expect someone to be injured by putting a pie in their face? Further, do they intend to hurt anyone with a whipped cream pie? Not likely on either. For the exclusion to apply, the injury has to be expected or intended. Neither seems to apply in this practical joke, so CGL protection is still intact and available to pay. What About ‘Mental Anguish?’ Although there was no apparent intent to do physical harm, such attack could cause an intense psychological reaction in some people. It may bring back memories of some awful event or create uneasiness in the person’s belief in his or her ability to protect himself or herself. I told my wife I was dreaming of being attacked by a can of whipped cream and was unable to close my eyes and sleep because of the fear. This lack of sleep may lead to sleep deprivation, reduced mental capacity and job performance, and ultimately the loss of my job. And my daughter, who saw the attack, is suffering from posttraumatic stress disorder even though she was not in the zone of danger. continued on page N10 www.insurancejournal.com


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Closer Look Restaurants/Bars/Liquor Attacked, continued from page N8

anguish from the definition of bodily injury. Eight states include mental anguish, but only if it arises or manifests out of bodily injury. Only 10 states appear to absolutely include mental anguish as bodily injury (without the arising out Costly to Defend Defending these claims Questions regularly of or manifesting out of requirement) and two and paying the loss if the arise as to whether could go either way jury finds in favor of the (they have suits on both plaintiff could be quite the commercial sides). expensive; and in many general liability Coverage B, “Personal states the unendorsed CGL and Advertising Injury,” extends no coverage for (CGL) policy also fails to provide any claims of injury from menresponds to claims protection to the tal anguish. insured. The definition Bodily injury is defined of assault and of personal injury does as bodily injury, sickness or battery. not extend to mental disease sustained by a peranguish either. son, including death resultInsurers that either: 1) do not subscribe ing from any of these at any time. Nowhere to ISO wording (in whole or in part); or 2) is coverage for mental anguish provided have proprietary endorsements may allow under the “Bodily Injury and Property bodily injury to be redefined to include Damage” coverage section (Coverage A). mental anguish. But many of these endorseThirty-two states exclude mental Now, while I’m joking about my dreams and my daughter’s stress (she was among those laughing), some people do suffer or claim to suffer such mental anguish injuries.

ments only extend to include mental anguish caused by bodily injury; not simply mental anguish as its own cause of injury. Most likely any judgment or settlement arising out of charges of mental anguish may have to be paid by the insured. If This Were Your Insured Had I been hurt by the attack, the liability policy would likely have responded to protect the restaurant. However, if I was mentally traumatized by this action, my state’s common law would not have forced the insurer to include mental anguish as part of bodily injury, thus there is likely no coverage for the restaurant’s actions in the unendorsed commercial general liability policy. Beyond the insurance implications of the restaurant’s joke, such actions are simply inappropriate and unacceptable from a risk management perspective. IJ Boggs is associate editor of MyNewMarkets.com. Phone: 619-584-1100, ext. 137. E-mail: cboggs@mynewmarkets.com.

SINCE 1992 WESTROPE HAS PLACED BILLIONS WITH MAJOR CARRIERS IN THE U . S . A N D G L O B A L M A R K E T S I N T H E B E L I E F T H AT T H E W O R L D N E E D S T H E B E S T W H O L E S A L E I N S U R A N C E SOLUTIONS. PROPERTY | CASUALTY | TRANSPORTATION | CONSTRUCTION | AGRIBUSINESS HEALTHCARE | EXECUTIVE & PROFESSIONAL LIABILITY | BINDING AUTHORITY WORKERS’ COMP | CLAIMS SERVICES | LIFE SCIENCES

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Idea Exchange The European View Capital, continued from page N2

to facilitate a recovery of the world economy and to preserve millions of jobs.” While that will help the insurance industry over the long term, it isn’t really a solution that will provide the capital it may need sooner. Hubert Brandts, a partner in the Londonbased corporate financial advisory firm Hines & Associates, suggested insurers look closer to home. “How do you get them [investors] to invest?” he asked. “The biggest group of potential investors are the company’s shareholders,” as they are already investors. In that case, the industry may soon see more rights offerings. Charman added that insurers “need to develop a greater sense of ‘communality’ with their investor base.” This would group together greater transparency, a cap on excessive executive compensation, the previously mentioned focus on improving earnings, and an adherence to sound regulatory principles. “The industry needs better management and government,” he said. Implementing such initiatives would also highlight the fact that most insurance companies are not managed like banks or hedge funds. It would encourage a “flight to quality” that hopefully would make the insurance industry look like a good and a safe investment. “We have an opportunity to reset the rules of the game,” O’Halleran said. He explained that the biggest mistake Wall Street made was to look only to short-term considerations, thereby ignoring the long-term consequences. “We know risk, and what we’re seeing now is a classic reinsurance market turn,” he added. A change the industry must be prepared to deal with, because, as O’Halleran put it, “the role of the insurer is to survive.” In Charman’s opinion that’s not enough “to just survive; companies must also evolve.” In addition to tighter underwriting standards, this also requires “greater intellectual capital, more diversification, more efficiency and a focus on better management control.” Costas Miranthis, chief executive of PartnerRe Global, added that the companies “who adapt better are the ones who will survive” and bigger companies may have an advantage in that respect. Although assuring access to adequate capital is the most pressing problem, there aren’t any magic solutions. Better risk management in the form of higher quality information and spreading the risks along the lines of a subscription market like Lloyd’s may help. Adequate reinsurance rates that reflect the real www.insurancejournal.com

nature of risks are another vital component. These are things the P/C industry has been implementing. Now, however, the industry’s very survival may depend on getting them done right in order to attract capital. O’Halleran warned, “if the reinsurers can’t cover the risks, the government will.” That could happen if the risks are really too large, or if there isn’t sufficient capital. It’s a solution that would fundamentally alter the insurance

industry, perhaps forever. It’s not a solution that anybody in the industry would welcome, and until last October it might have been almost unthinkable. However, after AIG and the bank bailouts, it’s a possibility. The insurance industry may have escaped the worst of the financial crisis so far, but it will need to marshal every resource it has in order to continue to do so. IJ

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By Andrew Simpson

Inside the Beltway Why Health Care Reform Matters to P/C Agents P/C Agents Join Fight Against Competing Government Health Plan

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roperty/casualty insurance agents have elevated health care reform to the top of their political agenda; the matter is now just a notch below the perennial battle against federal regulation of insurance on their Washington priority list. P/C agents have addressed health insurance legislation in the past but the issue has taken on new urgency this year for several reasons. First, after years of talk in Washington, the Obama Administration and a Congress run by Democrats appear on track to adopt major reforms. Second, many P/C agencies that write commercial accounts also sell group health insurance. The third, and the biggest concern,

is that the proposals under consideration include a possible government-sponsored health insurance plan that would compete with private health insurance plans — a competitor that agents fear could eat into their slice of the health insurance pie. The issue of a government-sponsored plan has emerged as one of the major differences in the health care reform debate between Republicans, who oppose it, and Democrats, who generally support the idea. Conservative and liberal advocacy groups are raising funds and have already begun airing ads. Last month, insurance agents joined the fray publicly. The Independent Insurance Agents

N12 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

& Brokers of America (Big “I”) and the Council of Insurance Agents & Brokers (CIAB) — two property/casualty agent groups — joined health insurance agents from the National Association of Health Underwriters (NAHU) and the National Association of Insurance and Financial Advisors (NAIFA) in a letter urging congressional leaders to exclude health care reform budget reconciliation instructions that would require only 51 votes to pass a measure, rather than the usual 60 votes under normal Senate operating procedures. The groups said they were worried that “the spirit of bipartisan cooperation will be lost if continued on page N14 www.insurancejournal.com


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Outside the Beltway Big ‘I’ CEO on Carrier Relations, AIG and Agent Grassroots Rusbuldt Shares the View from Main Street

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ob Rusbuldt, president and CEO of the Independent Insurance Agents & Brokers of America (Big “I”), sat down with Insurance Journal’s Andrew Simpson at the association’s recent legislative conference in Washington, D.C. The following excerpts are from the complete interview, which may be viewed at www.insurancejournal.tv. Insurance Journal: Every year the Big ‘I’ conducts a market survey to gauge where independent agencies are in market share and other metrics. Were there any surprises in the most recent survey? Rusbuldt: There were two pleasant surprises actually. The first one is that new, small independent agencies are being started at much greater numbers than we thought they were going to. You read all about the M&A activity in our side of the industry that agencies are

getting smaller, but there are less of them. Interestingly, there’s a counter trend to that. A lot of people are leaving larger agencies, particularly bank-owned agencies, and starting their own agencies. There are people that were entrepreneurs and they miss that challenge of running their own business, rather than working for a larger corporate outfit. So we’re seeing that trend, and I think it’s refreshing. I also think it’s good for the marketplace. There’s more competition. And some of these younger owners or older owners that are now entrepreneurs again are hungry for business, and there’s a lot of competition that’s being created. The second phenomenon we noticed is that M&A activity is not affecting the overall universe of the independent agency system. Certain groups like Marsh Berry and others have predicted that there will be less and less independent agencies. But that number, over

the last couple of years, has remained static from an agency universe perspective. So it’s a little counter to conventional wisdom, but the numbers are showing that new agencies are starting and that the M&A activity is not affecting the overall number of independent agencies. IJ: So to the extent that there is continued consolidation, there’s enough new blood or people reentering to make up for that? Rusbuldt: That’s exactly right. The new startups are offsetting the M&A activity that’s taking place. IJ: Agents are being hit by a double whammy of a recession and a continued soft market. What do they tell you across the country about how they’re doing in continued on page N15

Inside the Beltway Federal Regulation Threat Remains Priority Also

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ealth care reform hasn’t completely overwhelmed federal regulation as a concern in Washington, at least for insurance agents. They believe that given all of the current financial turmoil, some type of financial regulatory reform is likely this year. “Congress is going to decide where we’re regulated, how we’re regulated, and who is going to regulate us. That’s a fundamental issue for any business, let alone independent insurance agencies. So we want to make sure, no matter what Congress does, that they do the right thing and that we help shape the future of our regulatory system,” said Bob Rusbuldt, president and CEO of the Independent Insurance Agents & Brokers of America (Big “I”), in a recent interview with Insurance Journal. Life insurers and large property/casualty insurers have for years pushed for the option of being regulated at the federal level, rather than at the state level. Agents have long www.insurancejournal.com

opposed this federal option, arguing that it’s a bad idea for independent agents, their carriers and their customers. “We happen to believe that regulatory arbitrage is not good for consumers. We believe that dual regulation is bad for independent insurance companies and our consumers,” Rusbuldt said. Rusbuldt said agents dread the situation where they would have to represent both federally regulated and state regulated carriers. “One of your clients may have six different insurance policies. Half of them may be regulated at the federal level, half may be regulated at the state level. Agents will have to become experts in two regulatory systems, not one,” he said. As far as agents are concerned, the imperfect devil they know — state regulation — is better than the devil they don’t. “We want to make sure that we continue to have state regulation, but state regulation

that is improved.” Whether the life and large P/C insurers lobbying for the federal option get their way remains to be seen. There is less talk about that in Washington than there is over whether there should be some sort of systemic risk regulator, council or both to oversee large banking, securities and insurance conglomerates like American International Group that now seem to fall between the cracks of the federal watchdogs. The systemic approach could open the door for federal insurance regulation, however. Rep. Barney Frank, D-Mass., who chairs the powerful House Financial Services Committee and is generally in favor of state regulation of insurance, has indicated that his proposal to create a systemic risk regulator would likely cover large insurers. He has said that federal regulation ultimately may apply to life insurance that acts like an investment but is less likely for P/C insurance. IJ

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Special Report Inside & Outside the Beltway with the Big ‘I’ Health Care Reform, continued from page N12

sponsored health benefits system as we know regular order is put aside and the reconciliation process is utilized to fast track health care it. Today, 160 million Americans receive health insurance through this system. It is effective. reform legislation.” It is competitive. It works well for a majority But agents fear more than bipartisanship; they fear a loss of business. A procedural move of Americans,” Brewer said. Rusbuldt’s goal is to make sure Congress by Democrats, called reconciliation in Beltway doesn’t do anything to remove agents from the language, removes the fillibuster and means system. “If that is taken off the table, and indeonly 51 votes will be needed to pass health care legisaltion in the Senate. That “means that pendent agents are no longer the distribution pretty much health care reform is going to fol- force for health insurance, that will be a huge hit for independent insurance agents,” he said. low what the Obama administration wants,” P/C agents are not said Bob Rusbuldt, president alone in that concern, of and CEO of the Big “I,” in an course. Health insurance interview with Insurance A Congressional brokers have also Journal. report concluded ramped up their lobby“I am not giving up hope ing against a governand nor should independent that achieving plan. agents or insurance compasubstantial savings ment The Association of nies, but we have a lot of Health Insurance work to do between now would probably (AHIA), the and September,” he said. require eliminating Advisors health insurance diviAgents fear that they sion of the National would be at a disadvantage the role of insurAssociation of Insurance competing with a public ance agents and and Financial Advisors plan in a market that is (NAIFA), says it is espeimportant to them and their brokers. cially concerned with customers. the public plan as a major step down the road toward a single-payer, government-run health More Agencies care system. More and more P/C agencies are offering “Promoters of the government-run plan employee benefits including group health option always state or imply that a governinsurance. According to Rusbuldt, “almost all” ment-run plan that eliminates the role of the of the small and mid-sized group insurance market is written through independent agents. agent will lower administrative costs. But administrative costs are not reduced simply by “It’s one of the fastest growing parts of their switching administrators — a government book of business, employee benefits in generplan will not be less expensive unless services al,” Rusbuldt said. are reduced in some as yet ill-defined way,” Among some of the largest independent according to AHIA President Robelynn H. agencies, the percentage of their business that Abadie. is employee benefits related can be 25 percent “Experience of agents has shown that most or more, according to a survey of Insurance consumers benefit from access to professional Journal’s Top 100 agencies. assistance.” For Missouri-based big broker Lockton, employee benefits is about 20 percent of revReducing Agent Involvement enues globally and 28 percent in the U.S. The argument that reducing agent and broLockton President Mike Brewer thinks Congress should let the 160 million Americans ker involvement could save money was addressed in an analysis released in December who now get health coverage through their by the Congressional Budget Office (CBO) that employers stay as they are. “While we support broad health care reform looked at various health care reform options. that expands coverage and reduces cost, a large The CBO report concluded that achieving ‘public plan’ as envisioned by some will under- “substantial reductions” in administrative costs would “probably require the role of insurance mine and potentially destroy the employerN14 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

agents and brokers in marketing and selling policies to be sharply curtailed and the services they provide to be rendered unnecessary.” The CBO report found that certain administrative costs such as for claims and customer service vary, while others are fixed and are similar whether a policy covers 100 enrollees or 100,000. The average share of the premium that covers administrative costs varies considerably — from about 7 percent for employment-based plans with 1,000 or more enrollees to nearly 30 percent for policies purchased by very small firms (those with fewer than 25 employees) and by individuals, according to the CBO report. The CBO also noted that some administrative costs would be incurred under any system of health insurance, but proposals that shift enrollment away from the small group and individual markets could avoid at least a portion of the added administrative costs. While agents and brokers are concerned, their cries and those of others opposed to a public plan appear to be having some effect. Some Democrats, including Sen. Charles Schumer, D.-N.Y., who serves on the influential Senate Finance Committee, have indicated that they are open to rethinking the role of a government option, if there is to even be one. One idea is to make it abide by all the same rules that private plans must follow — a “level playing field” requirement. “The bottom line is you need somebody who is not a private insurance company to be in the mix, and there are many of us who feel very strongly about that. I don’t think the public plan should have an unfair advantage, but it would be giving all of you in the insurance industry an unfair advantage not to have a public plan,” Schumer said at acommittee meeting. But insurance interests, including Scott Serota, president of the Blue Cross and Blue Shield Association, held firm in their opposition, maintaining that it’s impossible to structure a system with a government plan without an unfair advantage that would eventually force out the private market. “Creating a government-run plan — in any form — to compete alongside the private sector for non-Medicare/Medicaid eligible individuals is unnecessary to achieve comprehensive reform and would have devastating consequences,” Serota told lawmakers. IJ www.insurancejournal.com


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Outside the Beltway, continued from page N13

this combined recession and soft market? Rusbuldt: Well, you know this all started ... the economic problems that we have ... in Washington, D.C., and on Wall Street. It was a combination of both. But now Main Street America is catching the cold and independent agents are no different. We’re feeling the effects of a soft market. We’re feeling the effects of a national and global recession. When people aren’t buying new homes, when they’re not buying new cars, when they’re not starting new businesses, when they’re looking at reducing their premiums, increasing their deductibles, and changing their coverage limits, it affects independent agents. It’s less commission; it’s less revenue. We have been living for the last couple of years on contingency compensation. It’s been very important. And as that is starting to wane, for a variety of reasons, we’re seeing independent agents that are feeling the economic pressures that everybody else in this country is feeling. So it’s getting tougher.

The issues of compensation have sort of died down from the Eliot Spitzer investigation days. But we still have pockets of areas where it’s an issue. New York state, right now, the legislature and the insurance department are looking at all these new transparency and disclosure laws. So there are still issues on the table, both with our carriers and with regulators that we’re trying to work out.

IJ: How has the AIG crisis affected the ability of independent agents, in particular, to be heard in Washington? Rusbuldt: The AIG debacle has been like a nuclear bomb that’s gone off in this town. The issues with AIG have been misunderstood by many members of Congress, and by a lot of people in the media. Credit default swaps is just one example of how members of Congress have misinterpreted the property/casualty insurance side versus the products side, which were not regulated by state insurance regulators. And to lump, as many decision makers do, the AIG issue and problems with the insurance IJ: In this environment, what seem to be regulatory system is wrong. It the concerns that agents doesn’t mean that the state regulahave with their carriers and tors were perfect. We know the life those relationships? insurance company side of AIG Rusbuldt: Interestingly, certain had problems and the state regulasurveys have come out in the last tors probably should have caught year saying that agents have some of the securities lending never been closer to their pripractices that were not caught. No mary carrier. But for carriers regulatory system is perfect. Look that aren’t the primary carrier, at the bank regulators. So we do relations are still sometimes need some enhancement in that tense and stressed. There’s a area. But saying that we have to number of areas where we’re Bob Rusbuldt replace the entire regulatory sysworking very well with our company partners to make the workflow situa- tem because of AIG is just wrong. So there has to be a lot of education that tion in independent agencies more efficient; takes place. It has affected independent agents. areas of technology is just one example. Real Not just on the regulatory side and the debate Time is a campaign that the Big “I” has been that is taking place in Washington right now; it spearheading through the Agents Council for is affecting independent agents in the marketTechnology. We’ve made great strides in that place. We get questions that we don’t really area. answer about what they should do for their But there are a number of other areas [where] we need carrier support. Certificates of customers, vis-a-vis AIG. Of course, every independent agency has to make that decision for insurance is a perfect example. Agents are burthemselves. They have to do their due dilidened with certificates of insurance problems gence, look at ratings of companies, and make now, where they’re hiring full-time people to those decisions. So it has been a huge issue in do nothing but issue certs. It’s very inefficient. the industry, in Washington, and it has affected We need the efficiencies that our carriers can bring to that problem to make it more efficient. the debate on regulatory reform. www.insurancejournal.com

To watch an IJ video with Bob Rusbuldt titled “What Most Irks Independent Agents With Their Carriers,” visit: http://www.insur ancejournal.tv/videos/2471/ IJ: There’s a lot of noise about who’s doing what on Capitol Hill. I want to give you a chance to toot Big ‘I’s’ horn a little bit. It’s recognized as the largest and most influential lobby for agents. What’s the size and scope of the Big ‘I’s’ operation in Washington? How does it work? Rusbuldt: Well first of all, when you start with a base of 300,000 people that you represent, that is a true grassroots organization. And our people are primarily small business people. We do represent a lot of large agencies as well. But we have 1,500 people that have come to this legislative conference, and that speaks for itself. That is the largest industry legislative lobbying event. As we speak right now, we have all of those people on Capitol Hill, hopefully meeting with 435 House members and 100 U.S. Senators and their staff today. And we have meetings at the U.S. Agriculture Department today on crop insurance. We’re meeting with the Flood Insurance Administration. We have meetings at the Treasury Department. We have real business people from every single state in the country here today, educating decision makers on the future of their business and what’s important for their clients. So that, in and of itself, is impressive. We have 15 people in a Capitol Hill office; that’s beachfront property. We are right on Capitol Hill. We are a part of the culture of Capitol Hill. Everybody in that Capitol Hill office for the Big “I” worked for members of Congress, including myself. We worked on the inside. We know how it works. IJ: How does that make you feel knowing that many people are out there looking to you as their leader in many ways? Rusbuldt: The reason Big “I” has influence is not just because we have great lobbyists that worked on the Hill, understand the system, and are hardworking and dedicated. Our influence derives directly from our members. When these 1,500 people leave here today and go back to their homes, the residual effect of that is incredible. IJ

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Idea Exchange Growing Your Property Casualty Agency

Benefit by Experimenting With a Second Agency Brand Enjoy the Freedom of Marketing Experimentation By Alan Shulman

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roperty/casualty agencies can learn something valuable from successful car dealers. And no, it has nothing to do with waxing and buffing. It’s something even shinier, the wisdom to experiment. Dominant dealers are renown for owning multiple dealerships that sell competing brands of vehicles. They do it because they don’t know for certain which car lines will be popular in the future, so they hedge their bets to ensure their survival. Agencies can do something similar. Overpriced Image In today’s down economy, more people than ever are shopping their insurance. Some consumers bypass Main Street agencies in their search for fresh policies because they believe that these contracts are too high-priced. Instead, they seek out the highly promoted national marketers, without giving the traditional local agency a chance. These behemoths base their direct appeal on perceived discounts and routinely tout “typical” dollar savings. Full-service agencies can do something similar with discount checklists under their current agency name. [See “Don’t Emulate How the Big Auto Insurers Sell,” in Insurance Journal’s March 9, 2009, for details.] Another way to compete with these giants, and to benefit in other ways, is to follow the lead of the dealerships and initiate a second branded operation. Start a Second Brand Doing business under a second name gives you the freedom to go after specialty commercial lines, the low-end of the auto market, and anything in between. Check with your legal advisors and carriers for the best way to set up the brand. As for marketing it, here’s one way to go. If you elect to compete with the direct marketers in personal lines, offer quotes by phone, e-mail and online only. This way, you can avoid the in-person traffic that’s associated with insurance shopping while using your present staff and office space. Your necessities include a P.O. box, a dedicated toll-free number, a quote-generating Web site, and some attractive stationery with a cool logo. Such actions, among others, help to N16 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

Shulman

wall off the nascent brand from your existing agency. Rent space and hire additional personnel only as needed. Plus, take full advantage of any service centers offered by your carriers. This way, the new enterprise concentrates on sales, leaving the day-to-day service to others.

With the second Marketing Freedom With the second operation in operation in place, place, you are able to test the you are able to effectiveness of virtually any sales or marketing action. For test the effectiveinstance, because you don’t ness of virtually need prospects to physically stop by your office, you can any sales or stretch your reach beyond marketing action. regional driving distances to the far borders of your licensing territory. If you are situated in a small town, you might solicit high premium personal lines contracts in the largest cities in your state (if your carriers cooperate). Essentially, you can solicit whatever policies you feel comfortable selling as long as they don’t generate excessive service and collection demands. Another benefit is that you are free to experiment with new managing general agencies and carriers, new software tools, direct mailings and ads, plus trendy marketing tools like blogs, online videos, and more, without unduly risking your core reputation. And whenever you encounter an insured or prospect that is better served by your main operation, you can seamlessly shift them over when it’s to their advantage. You can also adopt any marketing and operational positives that you’ve learned from your explorations. If the future of insurance commerce is online as some say, it means that agency offices don’t have to be open to the public. They just have to have an ever-contemporary Web site with the latest quoting and communication tools in place. Establishing a second brand allows you to develop this outlook without having to worry about the impact on your current client base. You can have the best of both worlds, online and off. This benefit alone makes it worth the effort. IJ Shulman, CPCU, is the publisher of Agency Ideas, a subscription-only sales and marketing newsletter. He is also the author of the Illustrative Insurance Sales Letter series and other P/C sales resources. Phone: 800-724-1435. E-mail: alan@agencyideas.com. Web site: www.agencyideas.com. www.insurancejournal.com


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New Markets The following markets were selected from the MyNewMarkets database of 25,000 coverages and programs. To find additional markets, or to submit markets, go to www.MyNewMarkets.com. Livestock Mortality Insurance Market Detail: Chopra Insurance Brokerage Inc. (www.choprainsurance.com) offers an “all risks of mortality” coverage that includes accidental and external injury, theft and limited governmental slaughter. Eligible animals include swine, cattle, equine, poultry, exotic animals, zoo animals and marine animals. Minimum premiums and deductibles begin at $1,000. Available Limits: Start at $1 million. Carriers: Unable to disclose. “A” rated by A.M. Best. Admitted. States: All except Alaska and Hawaii. Contact: John Upchurch at 818-923-6090 or e-mail Chopra at info@choprainsurance.com.

Employment Practices Liability Market Detail: Apogee Insurance Group, a Berkshire Hathaway company, (www.apogeeinsgroup.com) has access to more than 10 carriers offering employment practices liability insurance. Available coverage terms include: defense cost outside the limits; full-prior acts coverage; and third-party liability coverage. Minimum premiums begin at $500 and deductible options range between $1,000 and $50,000. Available Limits: $100,000 to $15 million. Carriers: USLI, AIG, Beazley, Chubb, Evanston, First City, Monitor, Navigators Pro, Philadelphia, United National. “A” to “A++” rated by A.M. Best. Admitted and non-admitted. States: All. Contact: Robert J. McIntyre at 610-337-3200 ext. 7021 or e-mail rmcintyre@apogee insgroup.com.

Gas & Convenience Store Program Market Detail: Hylant Group Inc. (www.HylantPetroleum.com) has an insurance program designed for petroleum dealers and convenience store exposures. A package of coverages is available including: property; crime; general liability; automobile; garage keepers’ liability; workers’ compensation; liquor liability; employment practices liability;

and underground and above ground pollution liability. Twenty-four hour operations are eligible in many states. Minimum premiums begin at $500. Available Limits: As needed. Carriers: Unable to disclose. “A” rated by A.M. Best. Admitted. States: Ala., Ariz., Ark., Calif., Colo., Conn., Del., D.C., Ga., Idaho, Ill., Ind., Iowa, Kan., Ky., Maine, Md., Mass., Mich., Minn., Miss., Mo., Mont., Neb., Nev., N.H., N.J., N.M., N.Y., N.C., N.D., Ohio, Okla., Ore., Pa., R.I., S.C., S.D., Tenn., Texas, Utah, Vt., Va.,

Bringing Market Seekers and Market Providers Together • Find markets in our database • Promote your markets on our site • Join our community forums • Membership is free! Wash., W.Va., Wis. and Wyo. Contact: Lynne Erickson at 312-283-1329 or e-mail lynne.erickson@hylant.com.

Bars, Taverns & Clubs Market Detail: Kevin Davis Insurance Services (www.kdins.com) offers access to coverage for bars, taverns, nightclubs, rap concerts, 24/7 adult entertainment and other special event operations. Program features include: liquor liability; assault and battery sublimits; and the availability of excess coverage. Minimum premiums begin at $7,500. Available Limits: $1 million to $5 million. Carriers: Unable to disclose. “A-” rated by A.M. Best. States: Ariz., Calif., D.C., Fla., Ga., Hawaii, Mass., Nev., N.Y., N.C., Ohio, Ore., Pa., S.C.,

N18 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

Texas, Va., and Wash. Contact: Ezana Asfaw at 213-833-6127 or e-mail easfaw@kdins.com.

Pizza Operators with Delivery Market Detail: AFC Insurance (www.afcins.com) introduces a program for pizza restaurant operators and delis including non-owned auto coverage for delivery. Coverages available include businessowners’, non-owned auto and workers’ compensation. Available Limits: As needed. Carriers: Fireman’s Fund. “A” rated by A.M. Best. Admitted. States: All except Alaska and Hawaii. Contact: Art Lyons at 610-814-2184 or e-mail art.lyons@afcins.com.

Food Borne Illness Market Detail: Professional Liability Insurance Services Inc. (www.plisinc.com) offers coverage for restaurants suspected of causing or spreading a food-borne illness: trade name restoration/food borne illness loss of business income for restaurants. The costs of immediate crisis management expenses, communications, marketing and media support are covered. Accidental and malicious contamination both are covered by this policy. No restaurant is too small. The insured can purchase a six- or 18-month period of restoration. No minimum premium. Available Limits: As needed. Carriers: Certain underwriters at Lloyds. “A” rated by A.M. Best. Non-admitted. States: All. Contact: PLIS Product Team at 800-761-7547 or e-mail underwriting@plisinc.com.

Restaurants, Taverns, Caterers Market Detail: Specialty Insurance Agency (www.specialtyagency.com) offers a restaurant/tavern program covering all segments of the market; including taverns with 100 percent liquor and even new ventures. Available Limits: As needed. Carriers: QBE Insurance Co. “A” rated by A.M. Best. Admitted. www.insurancejournal.com


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States: Calif., Conn., Del., Fla., Ga., Ill., Md., Mass., Mich., Minn., N.J., N.Y., Ohio, Pa., R.I. and Tenn. Contact: Mel Watters at 732-701-8900 or e-mail wwatters@specialtyagency.com.

Bars, Taverns, Clubs and Concerts Market Detail: Kevin Davis Insurance Services (www.kdisonline.com) offers a general liability program designed for adult establishments. Target classes and activities include bars and taverns, clubs, concerts, nightclubs, promoters, rap concerts and other special events. Adult entertainment operations open 24/7 are also eligible. Full liquor liability coverage is available, as is assault and battery protection (subject to a sublimit). Excess policies are also available. Available Limits: $1 million to $5 million Carriers: Unable to disclose. â&#x20AC;&#x153;A-â&#x20AC;? rated by A.M. Best. Non-admitted. States: Ariz., Calif., D.C., Fla., Ga., Hawaii,

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Mass., Nev., N.J., N.Y., N.C., Ohio, Ore., Pa., S.C., Texas, Va. and Wash. Contact: Ezana Asfaw at 877-807-8708 ext. 6127 or e-mail easfaw@kdins.com.

N.M., Ore., Pa., Tenn., Texas, Utah, Va. and Wash. Contact: Elizabeth Gaida at 619-593-2059 or e-mail elizabeth@agostinisurplus.com

Training Schools Package

Liquor Liability

Market Detail: Agostini Wholesale Insurance (www.agostinisurplus.com) offers a program focused on specialty training schools including: art, athletic, bartending, beauty, business, computer, cooking craft, dance, insurance, language, modeling, music, photography, public speaking, real estate, tailor, theater, tutoring instruction and more. General liability protection is available as part of a package or on a monoline basis. Professional liability and abuse/molestation coverage are also offered. Available Limits: As needed. Carriers: Various carriers. â&#x20AC;&#x153;A++â&#x20AC;? rated by A.M. Best. Admitted and non-admitted. States: Ariz., Calif., Colo., Md., Neb., Nev.,

Market Detail: Tapco Underwriters (www.gotapco.com) offers agents in selected states access to a stand-alone liquor liability program. Coverage is designed for restaurants, bars and night clubs of all types. Available Limits: As needed. Carriers: Multiple carriers. Rating not provided. Non-admitted. States: Calif., Del., D.C., Fla., Ga., Md., N.J., N.C., Pa., S.C., Tenn., Texas and Va. Contact: Chris Reisdorf at 336-584-8892 or e-mail creisdorf@gotapco.com. IJ Submit your companyâ&#x20AC;&#x2122;s property/casualty markets to the industryâ&#x20AC;&#x2122;s leading searchable database at www.mynewmarkets.com.

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Idea Exchange Workers’ Compensation

A Practical Guide to Workers’ Compensation Prepare Clients for Premium Audits by Knowing the ABCs of Audits

I

nsurance agents and brokers are charged with many duties on behalf of their clients. One often neglected duty is working with insureds to prepare them for the annual workers’ compensation and general liability audits. Many agents mistakenly assume insureds know what to expect and how to prepare for this yearly event. In fact, the opposite may be true. Insureds, even the most sophisticated and experienced, must be coached through the process to some Mitch Dunford extent every year. Having experienced the audit process does not make the insured an expert. Because 12 months passes between meetings with the auditor, clients tend to forget the process. Mitch Dunford, CEO of Wells Publishing, asked MyNewMarkets.com’s Associate Editor Chris Boggs in a recent podcast interview to list and discuss the “rules” of preparing clients for a premium audit. Boggs relates the “ABCs” of premium audits as found in his new book, “The Insurance Professional’s Practical Guide to Workers’ Compensation: From History

Buying the Book The “The Insurance Professional’s Practical Guide to Workers’ Compensation” by MyNewMarkets.com’s Associate Editor Chris Boggs addresses in clear, jargon-free English many of the concepts, policies and practices in workers’ compensation that brokers, risk advisors and corporate risk managers need to know. Boggs explains to non-lawyers the legal aspects of workers’ compensation, freeing the reader from having to wade through dense legal and regulatory treatises. The book can be purchased as a digital download for $49.95 or as a paperback book for $55 by visiting: http://ijmag.com/wcbook.

through Audit.” Following is an excerpt from the podcast interview. To listen to the full podcast, visit: http://www. insurancejournal.tv/channels/podcasts/. Mitch Dunford: In your new book, I found the first chapter very interesting. You talked about the history of workers’ comp all the way back to pirates. Can you talk about that? Chris Boggs: Sure. It was actually quite an interesting study, to trace this history as to how workers’ comp got to the Chris Boggs United States and how it evolved over time. I was watching the History Channel and in one piece about pirates, it made a comment just in passing that the pirates actually had a system of workers’ compensation. I thought, “That’s pretty interesting. Let’s research this and see if this is true.” What I found out is that they (pirates) did, in fact, have a system like we think of as workers’ comp. If a crew member was injured while attacking somebody else’s boat, trying to take their stuff from them, the crew felt obligated because the person was helping the crew and doing the work of a pirate. There was the caveat, you had to live; there was no death benefit for pirates. And if the member was able, he was allowed to stay on the ship and perform lighter duties. Dunford: That’s interesting. In the last chapter of your book, you list five audit guidelines or rules. You call them the ABCs of premium audits. What are the five guidelines agents should use to prepare their clients for their audits? Boggs: In preparation for any audit, the agent needs to explain to the insured what’s coming. The first rule — the “A” of the ABCs — is to “always” be there. The

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Podcast To listen to the full podcast of this interview, visit: http://www.insurance journal.tv/videos/2495/ person who is intimately knowledgeable about the company’s finances and the company itself must be there to answer questions. If the most qualified person is not there, the auditor is going to have to make some assumptions. And these assumptions are rarely to the insured’s advantage. The “B” is “be prepared.” Have all the information the auditor needs. Basically, you want him in and out as fast as possible. Don’t make him (the auditor) wait, and don’t make him uncomfortable (prepare a place for him to work). Have the payroll records, employee records, cash disbursement records and certificates of insurance if the insured has subcontracted any work. On the construction side, if the insured has participated in any wrap-ups or OCIPs (Owner Controlled Insurance Programs), that information should be provided. The “C” in the ABCs is to always get a “copy” of the auditor’s work papers before he or she leaves. Before the auditor walks out the door, get a copy of his or her work papers. Because that’s the point at which the insured can see what his (the auditor’s) train of thought is, the information he has and hopefully be able to anticipate any problems. It is much better to get audit problems ironed out before the audit gets chiseled in stone. And it’s much more difficult to deal with after it’s already been processed and billed. With the work papers, these problems can hopefully be cut off. “D” stands for “don’t” volunteer more information than asked. It sounds like you’re trying to be secretive, but basically, don’t go overboard. I know insureds are proud of their company. Everybody’s proud of their company, but don’t give them (auditors) reason to investigate longer than necessary. It’s like when OSHA shows up. In North Carolina, OSHA has to tell you what they want to see. The recommendawww.insurancejournal.com


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Get a second opinion for your hard-to-place physician clients. Canceled, declined, nonrenewed?

tion that all consultants give is take them (the OSHA representative) around the building to what they asked to see. Donâ&#x20AC;&#x2122;t take them through the building, because if they go through the building, they might see some other problems. But if they go around the building to what they asked to see, they wonâ&#x20AC;&#x2122;t see anything else. So, donâ&#x20AC;&#x2122;t volunteer more than what is asked. And the â&#x20AC;&#x153;Eâ&#x20AC;? is to know the â&#x20AC;&#x153;exceptionsâ&#x20AC;? to the single enterprise rule and be able to apply them to the clientâ&#x20AC;&#x2122;s advantage.

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Dunford: What is the single enterprise rule? Boggs: Basically, the single enterprise rule is an attempt to meet the goal of the workersâ&#x20AC;&#x2122; compensation classification system, which is to assign one code to the entire business operation. This is part of and related to the governing classification rule. There are, however, four exceptions to the single enterprise rule the insured must know about and be able to apply. The exceptions are: standard exception classifications, the interchange of labor rule, general exclusion classifications and the multiple enterprise rule. Dunford: If someone wanted a copy of your book, â&#x20AC;&#x153;The Insurance Professionalâ&#x20AC;&#x2122;s Practical Guide to Workersâ&#x20AC;&#x2122; Compensation: From History through Audit,â&#x20AC;? where could they order it? Boggs: You can get it from www.insurancejournal.com and at http://ijmag.com/wcbook. IJ www.insurancejournal.com

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Idea Exchange Workers’ Compensation

Education Strategy Propels Workers’ Comp Agency’s Growth in Down Economy By John R. Graham

W

hile the economy is in freefall, a and bad, healthy employee relaSioux Falls, S.D., workers’ comtionships are key drivers of profpensation agency, Insurance itability, and ACES works diliSpecialty Group, is racking up gently with employers to double-digit growth. strengthen their hiring practices, improve communication and According to owner Renae Eidenshink, the training, and cultivate positive reason for this remarkable record is simply corporate cultures. With a focus that the agency focuses on education rather on solving problems, the program than sales. “Sales become easy if you begin fosters commitment and support with education,” notes Eidenshink, who has from employees, thus maximizing more than 20 years experience in the insurproductivity. Because of this ance industry. approach, employers consider In 2005, Eidenshink became a Certified ACES a resource and are willing WorkComp Advisor (CWCA) after intensive monitoring, return-to-work programs, medical to pay for its services. training by the Institute of Work Comp clinic relationships, nurse triage and superviProfessionals (IWCP). As a CWCA, she became sor training. The process involves much more HR Consulting skilled analyzing workers’ comp accounts, than disseminating information; it requires a During the recession, more clients have identifying errors and overcharges, and develpractical hands-on effort. For example, when turned to ACES for consulting services related oping strategies to help employers reduce setting up medical relationships, the staff to human resources. Four hours a week or their workers’ comp costs permanently. takes the client with the job descriptions to more can be devoted to helping clients with However, she pointed out that the ability to the occupational medical clinic to review with reductions in the workforce and leverage this knowledge to the administrator. This practical approach guiding the termination process. build her business did not ‘Sales become means that services are customized to comKnowing the laws and the really become clear until she plement or enhance a client’s current loss-conimpact that termination has on was re-certified by the easy, if you trol procedures. Collectively these programs other employees, the staff proInstitute three years later. It begin with work to improve employee morale and control vides employers with a roadmap was then that she formed an costs for the employer. for the proper procedures as affiliate company, Alternative education.’ While employers may be reluctant to well as supervisor training to Comp and Employment embrace this comprehensive approach in cope with the effects of the reduction in Solutions (ACES) to brand the WorkComp today’s economic climate, Eidenshink addressworkforce. In some cases, employers rely on program. es this issue head-on with two creative pracACES to manage the layoff process. While an important part of the program tices. In 2005, she developed a Coupled with this consultative involves identifying errors and overcharges pay-as-you-go workers’ compenservice, ACES provides the tools that are commonplace in workers’ compensasation program and after three employers need to systemize their tion accounts, Eidenshink saw opportunity in years, has four carriers that businesses with the right processeducating her clients and developed a prosupport the program with their es to reduce labor costs. For examgram, “Reduce Labor Cost by Helping underwriting and technology. ple, the American Payroll Business Owners Become More Productive Business owners have the Association estimates that hourly and Profitable.” option of purchasing workers’ payroll is overstated by 3 percent. Building on the IWCP model, the program compensation with no money Recognizing the compounding promotes workers’ compensation not as a down and paying premiums on effect of this overstatement in product or commodity, but as a process that actual payroll with no audit. regard to federal and state unemcan reduce costs for employers over the longACES runs the payroll, an ployment and workers’ compensaterm. The goal is to systemize businesses with Renae Eidenshink added revenue source, and pays tion, clients appreciate the value the right processes and increase profitability the premium in arrears based on the prior of proper time tracking systems. and productivity. month’s payroll. Employers find this service In addition, the CWCAs work with The cornerstone of the program is underattractive because there is no upfront cost and employers to establish 24-hour injury standing labor costs and helping clients better they don’t have to wait for an audit to obtain response, proper claims management and manage their labor force. In both good times N22 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

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the premium savings when there is a reduction in staff. Second, not all programs are implemented at once. A quarterly calendar guides the business plan, and each quarter the employer receives new tools to help reduce labor costs. The gradual introduction allows the employer to assimilate the program and control costs, while providing a catalyst for future changes. Although each tool contributes to strengthening business practices and improving productivity, collectively the whole is greater than the sum of its parts augmenting the bottom line. Marketing Eidenshink promotes her agency’s program through seminars, radio programs and published articles. While CPAs, business attorneys and HR attorneys are a strong source of referrals, most of the prospects come from satisfied clients. “Few businesses understand the complexities of workers’ compensation, the importance of lowering their experience mod and the interrelationship between workers’ comp and sound business practices. Most think all they can do is shop for better rates, but that does nothing to control costs long-term,” Eidenshink said. “Once a business has been in our program they experience the value of focusing on risk and claims management rather than policy shopping.” Recently one manufacturing client that entered the program with a relatively high experience mod saw a 40 percent drop in premium as a result of implementing the process. Success of the program is measured by the reduction in overall costs, the response of the clients and referrals from clients. While many clients are from labor-intensive fields such as manufacturing and contracting, the program benefits all types of businesses. Eidenshink said they have seen a spike in seasonal operations that value the pay-as-you-go approach and the guidance on hiring practices. “When it comes to workers’ compensation, knowledge and education give us the competitive edge. IWCP provides the tools, the networks, connections and an Internet-based forum for ready access to experts throughout the country. On the forum, I get educated every day and leverage the knowledge to solve problems for my clients,” Eidenshink said. IJ Graham is president of Graham Communications, a marketing services and sales consulting firm. Phone: 617-328-0069. E-mail: jgraham@grahamcomm.com. www.insurancejournal.com

May 18, 2009 INSURANCE JOURNAL-NATIONAL REGION | N23


Searching for a workers’ compensation market? Look no further than Insurance Journal’s 2009 Workers’ Comp Directory, a comprehensive listing of intermediaries and carriers offering wor kers’ compensation co verage throughout the countr y. The information lis ted in this directory serves as a resource guide for independent agents and br okers looking for workers’ compensation markets. Intermediaries and carriers writing workers’ compensation coverage and profiled in this directory submit updated information directly to Insurance Journal. We make every attempt to ensure the accuracy of all information listed in this dir ectory. You may also vie w Insurance Journal’s Workers’ Comp D irectory online at: www .insurancejournal.com/resources. To submit a listing for futur e workers’ compensation directories, visit: www.insurancejournal.com/directories, or e-mail Kristine Honey at: khoney@insurancejournal.com. We hope you find the 2009 Workers’ Comp Directory to be a useful tool when sear ching for markets. To comment on this dir ectory, or any other Insurance Journal resource, please e-mail: editorial@insurancejournal.com.

4 All Insurance Services P.O. Box 992, Woodland Hills, CA 91365 Phone: 818-346-4555 Email: info@4allinsurance.net Website: www.4allinsurance.net Markets Offered: Health Insurance, HMO, Managed Care, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $None Brokered Business: Accepted States Entered in: AZ CA FL NC NV OR TX UT VA WA

Advanced Professional Services, LLC 240 Lock Rd., Deerfield Beach, FL 33442 Phone: 866-551-9805 Fax: 954-725-6115 Email: info@advancedprofessional.com Website: www.advancedprofessional.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Not Accepted States Entered in: FL

5Star Workers' Compensation Services 906 S Kirkwood, St. Louis, MO 63122 Phone: 877-247-9772 Email: marketing@5starsp.com Website: www.5starsp.com Markets Offered: Claims Admin, Excess Workers’ Comp, Self Ins., Surety Bonds, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE, AIG, Amtrust, Berkley Net, Cybercomp - Coregis & Westport, Employers Ins. Group, Hartford, DELOS, Praetorian, Redwood, Zenith, Zurich, Lincoln General, Self Insurance

Agostini Wholesale Insurance P.O. Box 880288, San Diego, CA 92168 Phone: 800-922-7283 Fax: 619-593-2008 Email: ane@agostinisurplus.com Website: www.agostiniwholesale.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: CA

ACE Risk Management 436 Walnut St., Philadelphia, PA 19106 Phone: 215-640-4642 Email: Please go to our website for contact info Website: www.aceusa.com Markets Offered: Workers’ Comp, Excess Workers’ Comp, Texas Excess Indemnity, GL, Automobile Liability & other financial products. Phone Inquiries: Accepted Minimum Premium: Loss Sensitive Accounts with $100,000 Deductible/Retention for Workers’ Comp Brokered Business: Accepted States Entered in: All States Alliance With: ESIS, Inc. and other Third Party Administrators & Risk Management Providers

All Risks, Ltd. 300 Arboretum Pl., Ste. 410, Richmond, VA 23236 Phone: 800-366-7475 Fax: 804-330-9485 Email: jim.mitchell@allrisks.com Website: www.allrisks.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: Over 10 National Carriers Represented

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All Risks, Ltd. 10150 York Rd., 5th Fl, Hunt Valley, MD 21030 Phone: 800-366-5810 Fax: 410-828-8179 Email: rlang@allrisks.com Website: www.allrisks.com Markets Offered: Program specific WC classes, USL&H, W orkers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: Various in all states

AllComp Solutions 555 North Ln., Ste. 6060, Conshohocken, PA 19428 Phone: 800-970-9778 Fax: 610-941-9889 Email: workerscomp@nsminc.com Website: www.allcompsolutions.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: All States Carriers Represented: 10 National Carriers American Liberty Insurance Company 3601 N University Ave., Ste. 100, Provo, UT 84604 Phone: 801-226-8008 Email: receptionist@american-liberty.net Website: www.american-liberty.net Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: AZ CO ID MT NM NV UT

www.insurancejournal.com


2009 Workers’ Compensation Directory American Management Corporation 824 Front St., Conway, AR 72032 Phone: 800-233-2398 Fax: 501-450-6962 Email: marketing@amcins.com Website: www.amcinsurance.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Not Accepted States Entered in: Most States Carriers Represented: ACE, AmTrust, Zurich AMERISAFE 2301 Hwy 190 W, DeRidder, LA 70634 Phone: 800-897-9719 Fax: 800-450-1091 Email: aiic-mktg@amerisafe.com Website: www.amerisafe.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Not Accepted States Entered in: AK AL AR DE FL GA IA IL IN KS KY LA MD MN MO MS NC NV OK PA TN TX VA WI AMIS/Alliance Marketing & Insurance Services 355 Via Vera Cruz, Ste. 7, San Marcos, CA 92078 Phone: 800- 843-8550 Fax: 800- 573-8550 Email: bwest@amiscorp.com Website: www.amiscorp.com Markets Offered: Ins. Adjusters, Security Guards & Alarm Co’s, Workers’ Comp for Private Investigators Phone Inquiries: Accepted Minimum Premium: $297 Brokered Business: Accepted States Entered in: Most States Carriers Represented: Travelers AmWINS Group, Inc. - 45 Offices Nationwide See Website for Locations Headquarters - Charlotte, NC 28210 Phone: 704-749-2700 Fax: 704-943-9000 Email: marketing@amwins.com Website: www.amwins.com Markets Offered: Excess Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $None Brokered Business: Accepted States Entered in: All States Carriers Represented: All Excess Workers’ Compensation Carriers AmWINS Access Insurance Services 19867 Prairie St., Ste. 250, Chatsworth, CA 91311 Phone: 818-772-3886 Fax: 818-718-9014 Email: lynda.becker@amwins.com Website: www.amwins.com Markets Offered: Excess Workers’ Comp, SelfInsurance - Group & Individual, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE, AIG, Travelers, OneBeacon, Everest, Employers, Crum & Forster, Majestic, Safety National, CA State Fund Alliance With: Employers Insurance Group AmWINS Program Underwriters 214 Senate Ave., Ste. 201, Camp Hill, PA 17011 Phone: 717-214-7557 Email: ben.francavilla@amwins.com Website: www.amwins.com/apu Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: Most States Carriers Represented: Various AM Best A- Rated or Higher

www.insurancejournal.com

Apex Insurance Services of Texas 100 NE Loop 410, Ste. 650, San Antonio, TX 78216 Phone: 210-340-8985 Fax: 210-340-8986 Email: hughes@apexinsurance.com Website: www.apexinsurance.com Markets Offered: Excess Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $50,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: Ace, AIG, CNA, XL, Safety National, MWECC, Liberty, New York Marine & General Appalachian Underwriters, Inc 800 Oak Ridge Turnpike, Ste. A-1000 Oak Ridge, TN 37830 Phone: 888-376-9633 Fax: 888-871-7644 Email: jonathan.hooven@appund.com Website: www.appund.com Markets Offered: Workers' Comp, Temporary Staffing Organizations Phone Inquiries: Accepted Minimum Premium: $750 Brokered Business: Accepted States Entered in: All States Carriers Represented: Multiple ‘A’ rated carriers, including several exclusive programs targeting Healthcare, Temp Staffing and Construction risks. Applied Underwriters, Inc. P.O. Box 281900, San Francisco, CA 94128 Phone: 877-234-4450 Fax: 877-234-4452 Email: sales@auw.com Website: www.auw.com Markets Offered: EPLI, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $N/A Brokered Business: Accepted States Entered in: All States

Arrowhead General Insurance Agency, Inc.

701 B St., Ste. 2100, San Diego, CA 92101 Phone: 866-401-2111 Fax: 866-650-2747 Website: www.ArrowheadGrp.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies by Carrier Brokered Business: Accepted States Entered in: All States Carriers Represented: Multiple “A” rated carriers

Assurance TempStaff Insurance Brokerage

1750 E Golf Rd., Schaumburg, IL 60173 Phone: 847-463-7134 Fax: 847-440-9126 Email: tempstaff@assuranceagency.com Website: www.assuranceagency.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $75,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: AIG

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2009 Workers’ Compensation Directory Automotive Risk Mgmt. & Ins. Services, Inc. 1919 Grand Canal Blvd., Ste. C-7, Stockton, CA 95207 Phone: 800-224-6363 Fax: 888-504-8062 Email: apps@armonline.com Website: www.armonline.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $None Brokered Business: Accepted States Entered in: Most States Bass Underwriters 6951 W Sunrise Blvd., Plantation, FL 33313 Phone: 954-473-4488 Fax: 954-316-3100 Email: bturgeon@bassuw.com Website: www.bassuw.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $750 Brokered Business: Not Accepted States Entered in: CA FL Carriers Represented: Various Berkshire Hathaway Homestate Companies 50 California St., San Francisco, CA 94111 Phone: 888-495-8949 Fax: 415-591-0128 Email: marketing@bhhc-wc.com Website: www.bhhc-wc.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: Most States Britt/Paulk Insurance Agency, Inc. 100 Glen Eagles Ct., Carrollton, GA 30117 Phone: 800-842-8917 Fax: 770-836-8563 Email: ajbrown@brittpaulk.com Website: www.brittpaulk.com Markets Offered: Workers’ Comp, USL&H Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Not Accepted States Entered in: All States Brownyard Group 21 Maple Ave., P.O. Box 9175, Bay Shore, NY 11706 Phone: 800-645-5820 Fax: 631-666-5723 Email: info@brownyard.com Website: www.brownyard.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $10,000 Brokered Business: Accepted States Entered in: Most States Brownyard Programs Ltd. 86 Carleton Ave., East Islip, NY 11730 Phone: 631-581-9300 Fax: 631-581-9385 Email: info@brownyardprograms.com Website: www.brownyardprograms.com Markets Offered: Workers’ Comp for Security Guards, Investigators, Alarm Companies Phone Inquiries: Not Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: AIG

Builder’s & Tradesmen’s Insurance Svcs. 6610 Sierra College Blvd., Rocklin, CA 95677 Phone: 916-772-9200 Fax: 916-772-9292 Email: info@btisinc.com Website: www.btisinc.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: AZ CA CO NM NV OR TX California State Compensation Insurance Fund P.O. Box 420807, San Francisco, CA 94142 Phone: 800-834-2393 Website: www.scif.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $None Brokered Business: Accepted States Entered in: CA Alliance With: State Fund Medical Provider Network Cambridge General Agency (Clovis) 3134 Willow Ave., Ste. 101, Clovis, CA 93612 Phone: 800-979-5002 Fax: 925-977-1651 Email: julie@valleyins.com Website: www.cambridgega.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: CA Carriers Represented: Ace Complete, Zurich, OneBeacon Cambridge General Agency (Rancho Cordova) 2865 Sunrise Blvd., Ste. 105, Rancho Cordova, CA 95742 Phone: 800-979-5002 Fax: 925-977-1651 Email: julie@valleyins.com Website: www.cambridgega.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: CA Carriers Represented: Ace Complete, Zurich, OneBeacon Cambridge General Agency (San Diego) 4565 Ruffner St., Ste. 102, San Diego, CA 92111 Phone: 800-979-5002 Fax: 925-977-1651 Email: julie@valleyins.com Website: www.cambridgega.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: CA Carriers Represented: Ace Complete, Zurich, OneBeacon Cambridge General Agency (Walnut Creek) 100 Pringle St., Ste. 420, Walnut Creek, CA 94596 Phone: 800-979-5002 Fax: 925-977-1651 Email: julie@valleyins.com Website: www.cambridgega.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: CA Carriers Represented: Ace Complete, Zurich, OneBeacon

N26 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

Cambridge General Agency (West Covina) 100 N Citrus St., Ste. 405, W est Covina, CA 91791 Phone: 800-979-5002 Fax: 925-977-1651 Email: julie@valleyins.com Website: www.cambridgega.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: CA Carriers Represented: Ace Complete, Zurich, OneBeacon Care Providers Insurance Services, LLC 16301 Quorum Rd., Ste. 130B, Addison, TX 75001 Phone: 800-761-7072 Fax: 800-224-7145 Email: parcher@nsminc.com Website: www.ins-cps.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $None Brokered Business: Not Accepted States Entered in: All States Carriers Represented: This Workers’ Comp in Texas only - Open Safety Group accessed through Texas Mutual Casualty & Surety, Inc. 100 Corporate Pkwy, Ste. 350, Birmingham, AL 35242 Phone: 205-332-8135 Fax: 205-995-0862 Email: cshiebler@csiapex.com Website: www.csiapex.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: AIG, Amerisafe, Am Trust, Crum & Forster, Zurich Global Energy, Liberty Mutual for Oil & Gas. CGA Associates, Inc. 30 W Main St., Freehold, NJ 07728 Phone: 800-684-1404 Fax: 732-845-1113 Email: info@cgaassociates.com Website: www.cgaassociates.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE, AIG, OneBeacon, Travelers, Hartford, CNA, AmTrust Chamber Insurance Agency Services 100 Executive Dr., West Orange, NJ 07052 Phone: 800-336-2007 Fax: 973-731-2288 Email: jpferreira@chamberagent.com Website: www.chamberagent.com Markets Offered: Workers’ Comp (All Sizes & Classes), Excess Workers’ Comp, USL&H Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: All States Carriers Represented: AIU Holdings, Hartford, ACE, CNA, Travelers, Zurich, Crum & Forster and others.

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2009 Workers’ Compensation Directory Charity First Insurance Services, Inc. One Market, Spear Tower, Ste. 200 San Francisco, CA 94105 Phone: 800-352-2761 Fax: 415-536-4033 Email: charityfirstinfo@charityfirst.com Website: www.charityfirst.com Markets Offered: Workers’ Comp, Nonprofits Only Phone Inquiries: Accepted Minimum Premium: $1,500 Brokered Business: Not Accepted States Entered in: Most States Carriers Represented: Admitted in most states Cluett Commercial Insurance Agency, Inc. 8 Pembroke St., Kingston, MA 02364 Phone: 800-926-6771 ; Fax: 781-585-4180 Email: info@cluettinsurance.com Website: www.cluettinsurance.com Agent Registration for Submissions: www.cluettinsurance.net Marketing Contact: kalben@cluettinsurance.com Markets Offered: Workers’ Comp, Umbrella Phone Inquiries: Accepted Minimum Premium: $500 in certain states Brokered Business: Accepted States Entered in: CT FL GA IL IN KY MA MD ME MI MN NC NH NJ NY PA RI SC TN TX VA VT WI WV Carriers Represented: AIG, ACE Complete, AmTrust, Arrow Mutual, CyberComp, Magna Carta Co’s, Norfolk & Dedham Company, Safeco, Zurich Colemont Insurance Brokers - Atlanta 2859 Paces Ferry Rd. NW, Ste. 1500, Atlanta, GA 30339 Phone: 770-434-3666 Fax: 770-434-1008 Email: MarketingAtlanta@colemont.com Website: www.colemont.com Markets Offered: Excess WC, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Not Accepted States Entered in: All States Colemont Insurance Brokers- Chicago 300 S Wacker Dr., Ste. 900, Chicago, IL 60606 Phone: 312-986-0404 Fax: 312-986-0491 Email: MarketingChicago@colemont.com Website: www.colemont.com Markets Offered: Excess WC, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Not Accepted States Entered in: All States Colemont Insurance Brokers- Hartford 195 Farmington Ave., Ste. 210, Farmington, CT 06032 Phone: 860-678-8870 Fax: 860-678-8871 Email: CTMarketing@colemont.com Website: www.colemont.com Markets Offered: Excess WC, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Not Accepted States Entered in: All States Colemont Insurance Brokers - Phoenix 3333 E Camelback Rd., Ste. 260, Phoenix, AZ 85018 Phone: 602-567-4300 Fax: 602-567-4366 Email: MarketingPhoenix@colemont.com Website: www.colemont.com Markets Offered: Excess WC, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $3,500 Brokered Business: Not Accepted States Entered in: AZ CA CO ID NV OR UT Carriers Represented: AIG, Crum & Forster, Safety National

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Colemont Insurance Brokers- San Francisco 100 California St., Ste. 600, San Francisco, CA 94111 Phone: 415-693-5890 Fax: 415-693-9399 Email: MarketingNoCal@colemont.com Website: www.colemont.com Markets Offered: Excess WC, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Not Accepted States Entered in: All States Colemont Insurance Brokers- Texas (Dallas) 5910 N Central Expy, Ste. 500, Dallas, TX 75206 Phone: 800-528-5544 Fax: 214-528-9101 Email: MarketingTX@colemont.com www.colemont.com/us/products/workerinjury.aspx Markets Offered: Texas Non Subscription, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: NonSubscription- TX only; WCAll States Colemont Insurance Brokers- Woodland Hills 21650 Oxnard St., Ste. 1600, W oodland Hills, CA 91367 Phone: 818-710-3630 Fax: 818-710-3635 Email: workcomp@colemont.com Website: www.colemont.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: AZ CA ID NM NV OR Carriers Represented: Employers Direct (exclusive program), ICW, SeaBright, ACE, AIG, Alaska National, Crum & Forster and more. Combined Resources P.O. Box 1152, Medford, NY 11763 Phone: 631-758-6780 Ext. 1 Fax: 631-758-6781 Email: AInsurer@aol.com Website: www.AutoInsureIt.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: CT DE FL MD ME NC NH NJ NY PA RI SC VA VT Carriers Represented: over 25 Insurance companies Combined Underwriting Agency Network, Inc. 14 Front St., Ste. 201, Hempstead, NY 11550 Phone: 516-538-4400 Ext. 3705 Fax: 516-538-4613 Email: ASterenberg@comnet-insurance.com Website: www.comnet-insurance.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: NJ NY Carriers Represented: AIG, PSM, Rochdale, Tower, New York Compensation Managers CommonWealth Professional Group 133 N 23rd St., Reading, PA 19606 Phone: 610-370-1200 Fax: 610-370-2779 Email: tfoy@cpgins.com Website: www.cpgins.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $3,500 Brokered Business: Not Accepted States Entered in: AK AL CT DE GA IA ID IL IN KS MD MI MN MO NC NE NJ P A SC TN VA WI Carriers Represented: ACE, AIG, some regionals

Comp Solutions Network, Inc.

7826 Hillmont St., Houston, TX 77040 Phone: 713-690-3500 ; 800-256-8035 Fax: 713-690-8484 Email: diannewilson@compsolutionsnetwork.com Website: www.compsolutionsnetwork.com Markets Offered: Monoline Workers’ Comp, NonSubscriber Programs for Texas Employers Phone Inquiries: Accepted Minimum Premium: $250 Brokered Business: Accepted States Entered in: All States Carriers Represented for Work Comp: AIG, ACE, AMTRUST, Amerisafe, Benchmark, Berkshire Hathaway, Employers, General Casualty, Republic Indemnity Co of America, Midwest, Old Glory, Service Lloyds, Southern Vanguard, One Beacon, Texas Mutual, Texas Builders, Zenith Non-Subscriber Carriers Represented: ACE American, Aegis, Essex, American Fidelity, BCS, Chesapeake, CIGNA, Fidelity Security, GHS P&C, LEXINGTON, Markel, Mt. Hawley, OneBeacon, Philadelphia American, North American Capacity, Republic Vanguard, Service Lloyds, Starr Indemnity, Union Central, US Specialty General Agent for Monoline Workers’ Comp Programs. We are also specialist for Occupational Accident Plans for Texas Non-Subscribers. Visit our website and use our online fast & easy WEBQUOTE form for your submission. No Password Required!

Compass Insurance Group of Agencies 9310 Topanga Canyon Blvd., Chatsworth, CA 91311 Phone: 818-507-1980 Fax: 818-545-3818 Email: mail@compasseands.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: CA Compensation Risk Managers of California, LLC 2600 Michelson Dr., Ste. 1620, Irvine, CA 92612 Phone: 877-276-4747 Email: marketing@trustcrm.com Website: www.trustcrm.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $25,000 Brokered Business: Accepted States Entered in: CA Alliances With: N/A Costanza Insurance Agency, Inc. 9101 LBJ Freeway, Ste. 150, Dallas, TX 75243 Phone: 800-346-0942 Fax: 972-991-2139 Email: d.howard@cia-tx.com Website: www.costanzainsurance.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: Zurich Insurance Co.

May 18, 2009 INSURANCE JOURNAL-NATIONAL REGION | N27


2009 Workers’ Compensation Directory CoverX Corporation 29621 Northwestern Hwy., Southfield, MI 48034 Phone: 248-358-4010 Fax: 248-358-2459 Email: coverxuw@coverx.com Website: www.coverx.com Markets Offered: Workers’ Comp for Security Guard & Alarm Contractors Phone Inquiries: Accepted Minimum Premium: $Varies Brokered Business: Accepted States Entered in: All States except AK & HI Carriers Represented: Travelers Cresta Insurance, LLC 6855 S Havana St., Centennial, CO 80112 Phone: 303-691-8540 Fax: 866-759-4954 Email: rrich@CrestaIns.com Website: www.CrestaIns.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $10,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: Amerisafe, AIG, C&F, RTW + several others

Employer's Comp Associates, Inc. 14350 Proton Rd., Dallas, TX 75244 Phone: 972-931-2026 Fax: 972-931-2126 Email: darlenefreeman@empcomp.com Website: www.employerscompassociates.com Markets Offered: Workers' Comp, Health Insurance Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: TX Carriers Represented: Berkshire Hathaway, AIG

Employers Assurance Company (aka AmCOMP Assurance Corporation)

701 US Hwy 1, Ste. 200, North Palm Beach, FL 33408 Phone: 800-226-1898 Fax: 800-226-1805 Email: customerservice@employers.com Website: www.employers.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies by State Brokered Business: Accepted States Entered in: AL AZ DC FL GA IL IN KS KY MD MO MS NC NM OK SC TN TX V A WI

Employers Compensation Insurance Company (ECIC)

500 N Brand Blvd., Ste. 800, Glendale, CA 91203 Phone: 888-682-6671 Fax: 818-549-4770 Email: customerservice@employers.com Website: www.employers.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies by State Brokered Business: Accepted States Entered in: AZ CA CO FL ID IL MT OR P A TX UT Alliance With: Employers Occupational Health

N28 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

Employers Insurance Company of Nevada (EICN)

10375 Professional Circle, Reno, NV 89521 Phone: 888-682-6671 Fax: 702-671-7175 Email: customerservice@employers.com Website: www.employers.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: NV Alliance With: Employers Occupational Health

Employers Preferred Insurance Company (aka AmCOMP Preferred Insurance Co.)

701 US Hwy 1, Ste. 200, North Palm Beach, FL 33408 Phone: 800-226-1898 Fax: 800-226-1805 Email: customerservice@employers.com Website: www.employers.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies by State Brokered Business: Accepted States Entered in: AL AR DC FL GA IA IL IN KS KY MD MN MO MS NC OK SC TN TX V A WI Alliance With: Employers Occupational Health First Cardinal, LLC 10 British American Blvd., Latham, NY 12110 Phone: 518-213-1900 Fax: 518-213-1902 Email: rflaherty@firstcardinal.com Website: www.firstcardinal.com Markets Offered: NYS DBL, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $None Brokered Business: Accepted States Entered in: CT IL MA NH NJ NY P A TX VT Carriers Represented: AmTrust North America Alliance With: Self-insurance Groups Fly Away Home, LLC 200 Northpines Dr., Ste. 316, Kingwood, TX 77382 Phone: 281-380-2521 Fax: 281-576-7582 Email: darrylhunt@flyawayhome.us Website: www.flyawayhome.us Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $15,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: Dallas National Ins., Companion Ins., Providence Ins., Ullico Ins. Global Aerospace 51 JFK Parkway, Short Hills, NJ 07078 Phone: 973-379-0800 Fax: 973-379-8602 Email: skeneally@global-aero.com Website: www.global-aero.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $None Brokered Business: Not Accepted States Entered in: All States Gresham & Associates, Inc. - Corporate Office One Gresham Landing, Stockbridge, GA 30281 Phone: 888-473-7442 Fax: 770-389-6867 Email: marketing@greshaminc.com Website: www.gresham-inc.com Markets Offered: Maritime Employers Liability Phone Inquiries: Accepted Minimum Premium: $3500 Brokered Business: Not Accepted States Entered in: All States

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2009 Workers’ Compensation Directory Guard Insurance Group P.O. Box A-H, Wilkes-Barre, PA 18703 Phone: 570- 825-9900 Fax: 570- 823-5930 Email: csr@guard.com Website: www.guard.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Not Accepted States Entered in: AL CA CT DC DE FL GA IL IN MA MD ME MI MS NC NH NJ NY P A RI SC TN TX VA VT WV Alliances With: An internal affiliate and some other vendors that vary by state. H. R. Keller & Company, Inc. 1520 Sheridan Dr., Buffalo, NY 14217 Phone: 716-874-1644 Fax: 716-874-4920 Email: rmartin@kellerandco.com Website: www.kellerandco.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies Brokered Business: Accepted States Entered in: NJ NY PA Carriers Represented: Various Hamond Safety Management, LLC 1983 Marcus Ave., Lake Success, NY 11042 Phone: 516-488-2800 Fax: 516-488-2167 Email: rmege@hamondgroup.com Website: www.hamondgroup.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $10,000 Brokered Business: Accepted States Entered in: NY HULL & Company, Inc. – Horsham 2 Walnut Grove Dr., Horsham, PA 19044 Phone: 215-443-3500 Fax: 215-443-3502 Email: info@DVUA.com Website: www.DVUA.com Markets Offered: Excess Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $25,000 Brokered Business: Accepted States Entered in: DE MD NY OH PA WV Carriers Represented: ERC, Midwest Employers, CNA, Republic Western, ACE, AIG ICW Group 11455 El Camino Real, San Diego, CA 92130 Phone: 858-350-2400 Fax: 858-350-2616 Email: marketing@icwgroup.com Website: www.icwgroup.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $25,000 Brokered Business: Not Accepted States Entered in: All States Indemnity Excess & Surplus Agency, Inc. 1500 NW Bethany Blvd., Ste. 235, Beaverton, OR 97006 Phone: 800-487-2442 Fax: 503-526-9700 Email: jimh@ies-xs.com Website: www.ies-xs.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $3,000 - $10,000 depending on state & class Brokered Business: Not Accepted States Entered in: AZ CA CO CT FL HI ID NV OR TX WA Carriers Represented: Member companies of AIU Holdings

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Independent Brokers & Agents of the West (IBA West) 7041 Koll Center Pkwy, Ste. 290, Pleasanton, CA 94566 Phone: 800-772-8998 Fax: 818-888-1757 Email: info@ibawest.com Website: www.ibawest.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Not Accepted States Entered in: CA Insential, Inc. 5601 Granite Pkwy, Ste. 240, Plano, TX 75024 Phone: 888-571-6160 Fax: 630-990-9098 Email: contact@insential.com Website: www.insential.com Markets Offered: Excess Workers’ Comp, USL&H, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: AmTrust, Amerisafe, CNA, Safeco, Gateway, Chubb Custom

Insurex 2621 Denver St., Ste. C, San Diego, CA 92110 Phone: 877-467-8739 Fax: 619-229-7771 Email: dan@insurex.com Website: www.insurex.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: AZ CA CO ID NM NV OR UT W A Carriers Represented: 10 National Carriers

Insurisk Excess & Surplus

1500 Riverfront Dr., Little Rock, AR 72203 Phone: 501- 660-7127 Fax: 501- 748-3970 Email: stephaniereilly@insurisk.com Website: www.insurisk.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 – most classes Brokered Business: Accepted States Entered in: All States Carriers Represented: AIG, ACE, Hartford, Berkley Net Underwriters, AmTrust Insurisk is a NO FEE Workers Compensation wholesaler, with over 9 available standard carriers, all “A” rated. We have the experience and knowledge of the current Workers Compensation marketplace to assist you in receiving the most competitive quote for your clients. stephaniereilly@insurisk.com

Irving Weber Associates, Inc. 761 Koehler Ave., Ronkonkoma, NY 11779 Phone: 800-243-1811 Fax: 888-622-0414 Email: Mail@iwains.com Website: www.iwains.com Markets Offered: Workers’ Comp, WC Safety Group for the Business Products Industry Phone Inquiries: Accepted Minimum Premium: $2,000 Brokered Business: Accepted States Entered in: NY Carriers Represented: The New York State Insurance Fund Irving Weber Associates, Inc. 761 Koehler Ave., Ronkonkoma, NY 11779 Phone: 800-243-1811 Fax: 888-622-0414 Email: mail@iwains.com Website: www.iwains.com Markets Offered: Workers’ Comp, WC Safety Group for the Fabricare Industry Phone Inquiries: Accepted Minimum Premium: $2,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: Great Central Insurance Company (A Excellent, Admitted) Irwin Siegel Agency, Inc. 25 Lake Louise Marie Rd., Rock Hill, NY 12775 Phone: 800-622-8272 Fax: 845-796-3661 Email: siegel@siegelagency.com Website: www.siegelagency.com Markets Offered: Workers’ Comp for Social Service Risk Packages Phone Inquiries: Accepted Minimum Premium: $10,000 Brokered Business: Not Accepted States Entered in: All States except New Jersey Carriers Represented: AIG iSurity, Inc. P.O. Box 6455, High Point, NC 27262 Phone: 800-869-3999 Fax: 336-869-7070 Email: underwriting@isurity.com Website: www.isurity.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,250 Brokered Business: Accepted States Entered in: FL GA KY LA MI MS NC OK SC TN VA WV Carriers Represented: AIG, ACE, NCME Izzo Insurance Services, Inc. 7234 W North Ave., Elmwood Park, IL 60707 Phone: 800-800-1704 Fax: 708-452-1777 Email: Info@IzzoInsurance.com Website: www.IzzoInsurance.com Markets Offered: Workers’ Comp for most class codes and experience mods Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: Ace, AIG, AmTrust, Arch, CNA, Employers, Fireman’s Fund, Great American, Hanover, Hartford, Meadowbrook, Ohio Casualty, PEI, Rochdale, Technology, Travelers, Zenith, and Zurich

May 18, 2009 INSURANCE JOURNAL-NATIONAL REGION | N29


2009 Workers’ Compensation Directory J.W. Terrill Inc. 825 Maryville Centre Dr., St. Louis, MO 63017 Phone: 314-594-2622 Email: dniedringhaus@jwterrill.com Website: www.jwterrill.com Markets Offered: Excess Workers’ Comp For Self Insured Entities & Group Captives Phone Inquiries: Accepted Minimum Premium: $100,000 Brokered Business: Accepted States Entered in: All States

Majestic Insurance 101 California St., 22nd Fl, San Francisco, CA 94111 Phone: 800-216-7770 Fax: 415-777-5997 Email: marketing@majesticinsurance.com Website: www.majesticinsurance.com Markets Offered: Excess WC, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $35,000 Brokered Business: Accepted States Entered in: AK AZ CA FL HI NJ NV NY OR

KF&B, Inc. 425 W Broadway, Ste. 408, Glendale, CA 91204 Phone: 818-242-5100 Fax: 818-242-6800 Email: rschwarz@kfbins.com Website: www.kfbins.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $7,500 Brokered Business: Not Accepted States Entered in: Most States

MarketScout 12700 Park Central Dr., Ste. 300, Dallas, TX 75251 Phone: 972-934-4200 Fax: 972-934-4299 Email: contactus@marketscout.com Website: www.marketscout.com Markets Offered: Workers’ Comp, USL&H Phone Inquiries: Accepted Minimum Premium: $2,000 Brokered Business: Not Accepted States Entered in: Most States Carriers Represented: Multiple A rated National and Regional Specialty Carriers

KZ Insurance Brokerage, LLC 2007-B Opportunity Dr., Ste. 12, Roseville, CA 95678 Phone: 916-781-6000 Fax: 916-783-5950 Email: info@kzib.com Website: www.kzib.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $350 Brokered Business: Accepted States Entered in: AZ CA CO LA NV TN Carriers Represented: Oak River, Cypress, Republic, Zenith, Hartford, OneBeacon, Travelers Lemac & Assoc, a Div of Risk Placement Svcs, Inc. 5670 Wilshire Blvd., Ste. 1200, Los Angeles, CA 90036 Phone: 323-857-9400 Fax: 323-857-9600 Email: marketing@lemacassociates.com Website: www.lemacassociates.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $25,000 Brokered Business: Accepted States Entered in: CA Carriers Represented: Zenith Ins. Co., Everest National, AIG, Majestic Ins. Co., Redwood Fire & Casualty, Sirius America, State Compensation Fund, U.S. Fire, Delos Ins. Co., Zurich, Tower Select, Insurance Co. of the West, Redwood LIG Marine Managers 9600 Koger Blvd., Ste. 225, St. Petersburg, FL 33702 Phone: 727-578-2800 Fax: 727-578-9977 Email: KLT@LIGMarine.com Website: www.LIGMarine.com Markets Offered: USL&H (Longshore), Workers’ Comp, MEL Phone Inquiries: Accepted Minimum Premium: $5,000 when submitted online Brokered Business: Accepted States Entered in: All States Carriers Represented: Various LowRateWorkComp 225 Main St., Destin, FL 32541 Phone: 850-625-5190 Fax: 888-625-2628 Email: gotcomp@yahoo.com Website: www.LowRateWorkComp.com Markets Offered: Health Insurance, USL&H, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $20,800 Brokered Business: Accepted States Entered in: Most States

McClelland and Hine, Inc. P.O. Box 700930, San Antonio, TX 78270 Phone: 210-366-2500 ; Fax: 210-293-6318 Email: amicia@mhi-tx.com Website: www.mhi-tx.com Markets Offered: Medical/Accidental Death, Occupational Accident, Workers’ Comp, EL, EPLI Phone Inquiries: Accepted (On-Line Quoting Avail) Minimum Premium: $500 Brokered Business: Accepted States Entered in: TX Carriers Represented: AIG, Rochdale, Travelers, Zurich, Texas Builders, Zenith

Meadowbrook Insurance Group 26255 American Dr., Southfield, MI 48034 Phone: 248-358-1100 Fax: 248-358-1614 Email: pgajewski@meadowbrook.com Website: www.meadowbrook.com Markets Offered: Excess Workers’ Comp, Specialty/Niche Programs, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies by Program Brokered Business: Yes; Varies by Program States Entered in: Most States Carriers Represented: Star Insurance Co., Williamsburg National Insurance Co., Ameritrust Insurance Corp.

MEMIC Group

1750 Elm St., Manchester, NH 03105 Phone: 866-636-4292 Fax: 603-695-6608 Email: mbourque@memic.com Website: www.memic.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $10,000 Brokered Business: Not Accepted States Entered in: Most States

Mid Atlantic Insurance Services, Inc. 1912 E Broad St., Richmond, VA 23223 Phone: 888-300-4720 Fax: 804-377-1169 Email: contact@midatlanticinsuranceservices.com Website: www.midatlanticinsuranceservices.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: AL AZ CO DE FL GA IL MD MI NC NJ NM OH PA SC TN VA WV Carriers Represented: AIG, ACE, Berkley, Hartford, Technology and more. Midlands Management Corporation P.O. Box 22778, Oklahoma City, OK 73123 Phone: 405-840-0074 Fax: 405-840-5432 Website: www.midlandsmgt.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $None Brokered Business: Accepted States Entered in: Most States Carriers Represented: AM Best “A” Rated Carriers Midlands Management Corporation P.O. Box 22778, Oklahoma City, OK 73123 Phone: 405-840-0074 Fax: 405-840-5432 Website: www.midlandsmgt.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $3,500 Brokered Business: Accepted States Entered in: KS MS OK Carriers Represented: AM Best “A” Rated Carriers Midlands Management of Texas, Inc. P.O. Box 794878, Dallas, TX 75379 Phone: 972-588-2000 Fax: 972-588-2020 Website: www.midlandsmgt.com Markets Offered: Statutory WC WX EL Phone Inquiries: Not Accepted Minimum Premium: $Varies Brokered Business: Accepted States Entered in: All States Carriers Represented: AM Best “A” Rated Carriers Midlands Management of Texas, Inc. P.O. Box 794878, Dallas, TX 75379 Phone: 972-588-2000 Fax: 972-588-2020 Website: www.midlandsmgt.com Markets Offered: Non-subscriber - Excess Employers’ Liability / Texas Non-Subscriber - Occ. Acc. Phone Inquiries: Not Accepted Minimum Premium: $Varies Brokered Business: Accepted States Entered in: TX Carriers Represented: AM Best “A” Rated Carriers Midwest Employers Casualty Company 14755 N Outer 40 Dr., Ste. 300, Chesterfield, MO 63017 Phone: 636-449-7000 Fax: 636-449-7199 Email: rlunceford@mwecc.com Website: www.mwecc.com Markets Offered: Excess Workers' Comp, Large Deductible, Reinsurance, Self-Insured Bonds Phone Inquiries: Accepted Minimum Premium: $N/A Brokered Business: Accepted States Entered in: All States

Specialists in workers' compensation. Our unique approach provides policyholders with a safety consultant and other services that will help them to improve their safety record, leading to sustainable savings over the long run.

N30 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

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2009 Workers’ Compensation Directory NAS Insurance Services, Inc. 16501 Ventura Blvd., Ste. 200, Encino, CA 91436 Phone: (818) 382-2030 Fax: (818) 382-2040 Email: general@nasinsurance.com Website: www.nasinsurance.com Markets Offered: Workers’ Comp Gap Coverage Phone Inquiries: Accepted Minimum Premium: $1,500 Brokered Business: Accepted States Entered in: All States except IL Networked Insurance Agents 988 McCourtney Rd., Grass Valley, CA 95949 Phone: 530- 274-6922 Fax: 530- 274-2562 Email: regina.nunes@networkedins.com Website: www.networkedins.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $1,000 Brokered Business: Not Accepted States Entered in: CA CO ID NM NV OR TX UT W A New York Compensation Managers, Inc. 6250 South Bay Rd., Cicero, NY 13039 Phone: 315-699-8475 Fax: 315-699-1438 Email: marketing@workerscomp.com Website: www.workerscomp.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: NY Northern Ohio E & S Agency, Inc. 5800 Monroe St., Bldg A, Sylvania, OH 43560 Phone: 419-885-2400 Fax: 419-885-7285 Email: ohioeands@buckeye-express.com Website: www.ohioeands.com Markets Offered: Excess Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: OH Carriers Represented: Safety National Alliance With: Safety National Northern Star Insurance Agency, LLC 1717 W Orangewood Ave., Ste. E, Orange, CA 92868 Phone: 877-667-7820 Fax: 714-938-0014 Email: cbitterlich@northernstarins.com Website: www.northernstarins.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $750 Brokered Business: Accepted States Entered in: Most States Carriers Represented: ACE, AIG, Crum & Forster, Everest, Guarantee, OneBeacon, SUA, Tower, CNA, Travelers Northwest Insurance Agency, Inc. 1750C Northpoint Pkwy, Santa Rosa, CA 95407 Phone: 888-693-7892 Fax: 866-577-7595 Email: dzeni@nwinsure.com Website: www.nwcinsure.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $200 Brokered Business: Accepted States Entered in: All States Carriers Represented: Everest National, AIG, Zenith, Employers Insurance, Hartford, Travelers, & many others.

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Oak Creek Insurance Services 1 E Northwest Hwy, Palatine, IL 60067 Phone: 847-705-4910 Fax: 847-705-4985 Email: Azawadzki@Oakcreekins.com Website: www.oakcreekins.com Markets Offered: PEO Bundle, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $750 Brokered Business: Accepted States Entered in: AL AR IL IN KS KY LA MO MS NC NJ NV OK TN WI Carriers Represented: Amtrust Group, AIG, ACE, GE, Hartford & St. Paul / Travelers

Pacific Excess Insurance Marketing A Division of UCA General Insurance 6363 Katella Ave., Cypress, CA 90630 Phone: (714) 228-7888; Fax: (714) 228-7899 Email: EAmador@pacificexcess.com Website: www.pacificexcess.com Markets Offered: Workers’ Comp, All Property & Casualty Risks Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: CA AZ NV Carriers Represented: The Zenith, Tower Select, Republic Indemnity, Delos Paradigm Risk Solutions, Inc. P.O. Box 152311, Arlington , TX 76015 Phone: (800) 799-7089 ; Fax: (817) 696-9118 Email: paradigmsolutions@sbcglobal.net Website: www.paradigmrisksolutions.com Markets Offered: Workers’ Comp, Health Insurance, Occ. Acc. / Comm. Auto / GL / Physical Damage / NTL, Truckers Occ. Acc Phone Inquiries: Accepted Minimum Premium: $1 Brokered Business: Accepted States Entered in: All States Carriers Represented: Variety Paragon Business Services, Inc. 7610 Stemmons Fwy, Ste. 600, Dallas, TX 75247 Phone: 214-884-2041 Fax: 214-951-1920 Email: cgarnham@paragon-pbs.com Website: www.paragon-pbs.com Markets Offered: Health Insurance, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: All States PMC Insurance Group 50 Cabot St., Needham, MA 02492 Phone: 781-449-7744 Fax: 781-449-7889 Email: info@pmcinsurance.com Website: www.pmcinsurance.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $3,500 Brokered Business: Accepted States Entered in: All States except for monopolistic Carriers Represented: AIG, ACE, Crum & Forster and AMTrust

PRM Insurance Services, Inc. 6970 Destiny Dr., Rocklin, CA 95677 Phone: 877-579-1500; Fax: 877-579-1600 Email: prm@prminsurance.com Website: www.prminsurance.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $10,000 Brokered Business: Accepted States Entered in: AZ CA NV OR Carriers Represented: SeaBright Insurance, Majestic Ins. Co., Delos Ins. Co. (CA only), PMA Insurance (CA only) Ramsgate Insurance 250 E Park Ave., Lake Wales, FL 33853 Phone: 800-394-2767 Fax: 888-335-8862 Email: Comp@RamsgateInsurance.com Website: www. RamsgateInsurance.com Markets Offered: Workers’ Comp, 24 Hour Policy Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE, AIG, Aequicap, AmTrust, Guarantee, Hartford, Liberty Agency Underwriters, Travelers, Ullico Renaissance Plan for Workers' Compensation 981 Worcester St., Wellesley, MA 02482 Phone: 800-514-2667 Fax: 781-413-0222 Email: susan.reilly@renaissanceins.com Website: www.renaissanceins.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: CT MA ME NH RI VT Carriers Represented: Star & Savers Alliance With: Lynch Ryan & Associates Risk Placement Services, Inc. Two Pierce Place, Itasca, IL 60143 Phone: 630-285-3663 Fax: 630-285-4020 Email: George_Tarulis@rpsins.com Website: www.rpsins.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE, AIG, CNA, Hartford, Safeco & Zurich Risk Reducers a Division of Swett & Crawford P.O. Box 1025, 10600 Train Station Dr. Mabelvale, AR 72103 Phone: 800-489-7475 Fax: 501-455-3975 Email: Rick.Spivey@riskreducers.com; Debbie.Oliver@riskreducers.com Website: www.riskreducers.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Not Accepted States Entered in: All States except monopolistic Carriers Represented: ACE, AIG, Amerisafe, AmTrust, Berkshire Hathaway, Crum & Forster, Guarantee Ins. Co.,Hartford, Swiss Re, and Zurich

May 18, 2009 INSURANCE JOURNAL-NATIONAL REGION | N31


2009 Workers’ Compensation Directory Risk Transfer Programs, LLC 219 E Livingston St., Orlando, FL 32801 Phone: 407-481-9363 Fax: 407-481-9969 Email: rkirsch@risktransferprograms.com Website: www. risktransferprograms.com Markets Offered: Workers’ Comp for PEO & Temp Staffing firms Phone Inquiries: Accepted Minimum Premium: $Varies by program Brokered Business: Accepted States Entered in: National coverage, varies by program Carriers Represented: SUA, Work First, AmTrust

RoamNet Insurance Marketing Programs

3333 E Concourse, Bldg 9-200, Ontario, CA 91764 Phone: 877-272-0333 Fax: 909-987-2245 Email: anthonya@arainsurance.com Website: www.roamnetins.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1500 Brokered Business: Accepted States Entered in: AZ CA CO NM NV OR UT W A Carriers Represented: Safeco, One Beacon, Republic, Travelers, EIG, Hartford, Golden Eagle RPS Cambridge, MD / CCBsure 204 Cedar St., Cambridge, MD 21613 Phone: 800-336-5659 Fax: 410-901-0878 Email: info@CCBsure.com Website: www.CCBsure.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Per States Brokered Business: Accepted States Entered in: All States Carriers Represented: Great American, One Beacon, Chubb, Travelers, Hartford, CNA Alliance With: MGA for Great American

Russell Bond & Co., Inc. 295 Main St., Ste. 866, Buffalo, NY 14203 Phone: 800-333-7226 Fax: 800-677-6779 Email: info@russellbond.com Website: www.russellbond.com Markets Offered: Excess Employers Liability for Municipalities (NY Only), Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: CT MA NJ NY P A VA VT Carriers Represented: Rochdale, AIG, ACE, Tower WC; Mid West, Arch, Safety National - Excess WC S.H. Smith & Company, Inc. (Hartford) 20 Church St., Ste. 1500, Hartford, CT 06103 Phone: 860-656-1204 Fax: 860-656-1104 Email: Cynthia_Bruce@shsmith.com Website: www.shsmith.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,500 Brokered Business: Not Accepted States Entered in: Most States Carriers Represented: AIG, ACE

SeaBright Insurance Company

1501 4th Ave., Ste. 2600, Seattle, WA 98101 Phone: 206-269-8500 Fax: 206-269-8912 Email: dean.rappleye@sbic.com Website: www.sbic.com Markets Offered: ADR, MEL, USL&H, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $100,000 Brokered Business: Not Accepted States Entered in: Most States Alliance With: AGC of California, IMPACT Specialty Workers' Compensation insurer serving construction, energy, maritime and other niche industries.

Self-Funded Alternatives 1700 Wheeler Way, Ste. 200, Newtown, PA 19047 Phone: 215-860-7444 Fax: 215-860-3709 Email: SFAinfo@self-fundedalternatives.com Website: www.self-fundedalternatives.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: Majority of the Market Self-Funded Alternatives of Nevada, LLC 500 N Rainbow, Ste. 300, Las Vegas, NV 89107 Phone: 702-740-8470 Fax: 702-740-8472 Email: ddsfanv@aol.com Website: www.self-fundedalternatives.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: AK AR AZ CA CT DE FL GA ID IL KY LA MA MD MS MT NC NJ NM NV NY OH PA UT WA Carriers Represented: All Excess Workers’ Comp Carriers Service Lloyds Insurance Company 6907 Capital of Texas Hwy N, Austin, TX 78731 Phone: 800-299-6977 Fax: 512-485-2690 Email: wcmarketing@service-ins-group.com Website: www.service-ins-group.com Markets Offered: Non-Subscription, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Not Accepted States Entered in: TX Smith, Bell & Thompson 40 Main St., Ste. 500, Burlington, VT 05401 Phone: 802-658-4600 Fax: 802-658-6191 Email: info@sbtinsurance.com Website: www.sbtinsurance.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $3,500 Brokered Business: Accepted States Entered in: Most States Carriers Represented: Various

N32 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

Sports & Fitness Insurance Corporation 214 Key Dr., Ste. 2000, Madison, MS 39110 Phone: 800-844-0536 Fax: 601-853-6141 Email: askus@sportsfitness.com Website: www.sportsfitness.com Markets Offered: Health Ins, HMO, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies Brokered Business: Accepted States Entered in: All States Carriers Represented: Safeco, Hartford Superior Access Insurance Services 5 Oldfield, Irvine, CA 92618 Phone: 800-272-7550 Fax: 888-272-7550 Email: marketing@superioraccess.com Website: www.superioraccess.com Markets Offered: Workers' Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: AIG, Hartford, Zenith, ACE, Safeco, Travelers, AmTrust, OneBeacon & Zurich

Swett & Crawford (Minneapolis)

109 S 7th St., Ste. 600, Minneapolis, MN 55402 Phone: 612-333-0361 Fax: 612-333-3666 Email: ron_boudreaux@swett.com Website: www.swett.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: AIG, Crum & Forster, AmTrust, Chubb, Zurich, Ace Exceptional access to more than 200 standard and specialty carriers, domestic and foreign. Many in-house binding authorities. Innovative, exclusive insurance programs for niche businesses and industries. Nearly 800 brokers, underwriters and support professionals.

Swett & Crawford (Dallas) 14643 Dallas Pkwy, Ste. 400, Dallas, TX 75254 Phone: 214-747-1200 ; Fax: 214-672-2700 Email: sharla_martin@swett.com Website: www.swett.com Markets Offered: Workers' Comp, Construction & Oil & Gas Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: AR NM OK TX Carriers Represented: Zenith Insurance Company Swett & Crawford (Folsom) 2330 E Bidwell St., Ste. 204, Folsom, CA 95630 Phone: 916-984-2340 ; Fax: 916-984-2358 Email: wendy_gable@swett.com; negin_johnson@swett.com Website: www.swett.com Markets Offered: Workers' Comp, Excess Workers' Comp, USL&H Phone Inquiries: Accepted Minimum Premium: $1,500 Brokered Business: Accepted States Entered in: Most States, with focus on AK CA HI NV Carriers Represented: AIG, Praetorian, Crum+ Forster, Safety National, Midwest Employers.

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2009 Workers’ Compensation Directory Swett & Crawford (Fresno) 8356 N Fresno, Ste. 210, Fresno, CA 93755 Phone: 559-261-3300 ; Fax: 559-261-3301 Email: wendy_gable@swett.com Website: www.swett.com Markets Offered: Workers' Comp, Excess Workers' Comp, USL&H Phone Inquiries: Accepted Minimum Premium: $1,500 Brokered Business: Accepted States Entered in: Most States, with focus on AK CA HI NV Carriers Represented: AIG, Praetorian, Crum + Forster, Safety National, Midwest Employers. Swett & Crawford (Irvine) 17901 Von Karman, Ste. 400, Irvine, CA 92614 Phone: 949-477-2050 Fax: 949-477-2040 Email: john_fosdick@swett.com Website: www.swett.com Markets Offered: Workers' Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Not Accepted States Entered in: All States Carriers Represented: Granite States, AIG, Praetorian, Delios Swett & Crawford (Michigan) 1760 S Telegraph Rd., Ste. 200 Bloomfield Hills, MI 48390 Phone: 248-451-3042 Fax: 248-451-3031 Email: ron_gaiser@swett.com Website: www.swett.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $Varies by State Brokered Business: Not Accepted States Entered in: Most States Carriers Represented: AIG Swiss Re 5200 Metcalf Ave., Overland Park, KS 66202 Phone: 866-535-6412 ; Fax: 469-499-2304 Email: cybercomp@csc.com Website: www.cybercomp.com Markets Offered: Workers’ Comp, Managed Care, Payroll Bureau, Pay-As-You-Go Phone Inquiries: Not Accepted Minimum Premium: $1,000 Brokered Business: Not Accepted States Entered in: AR AZ CO CT GA IA IL IN KS MN MO MS NC NE NM NV OK P A TN TX VA WI Alliance With: First Health

Tangram Insurance Services

101 2nd St., Ste. 100, Petaluma, CA 94952 Phone: 800-676-2213 x 100 Fax: 707-781-7351 Email: rbinford@tangramins.com; jshea@tangramins.com Website: www.tangramins.com Markets Offered: Workers Comp for Nonprofits Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: CA IA IL IN MO MS Carriers Represented: Everest National Target Marketing Ins. Services, Inc. 1925 Village Center Cir., Ste. 150, Las Vegas, NV 89134 Phone: 702-588-5300 ; Fax: 702-588-5310 Email: mkiger@tmi-group.com Website: www.tmi-group.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: AL AZ CA CO FL GA MS NV OR TN Carriers Represented: Ulico, Employers, OneBeacon

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Tejas American General Agency 1620 La Jaita Dr., Ste. 300, Cedar Park, TX 78613 Phone: 888-999-8242 Fax: 512-342-2803 Email: submissions@taga1.com Website: www.taga1.com/WorkersCompensation.htm Markets Offered: Workers’ Comp, Non-Subscriber Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: Most States Carriers Represented: AIG, Employers, Hanover, Hartford, Meadowbrook, Rochdale, Service Lloyd’s

The Combined Group (CIA) P.O. Box 819045, Dallas, TX 75381-9045 Phone: 800-275-3193 Fax: 800-275-3194 Email: bstock@combinedgroup.com Website: www.combinedgroup.com Markets Offered: Excess WC, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: Most States Carriers Represented: Hartford, Travelers, Zenith , Amerisafe, Employers Comp, Crum & Forster

Texas Association of Manufacturers Workers’ Comp Purchasing Group 304 W 13th St., Austin, TX 78701 Phone: 512-906-2000 ; Fax: 512-472-3859 Email: Stacy.Looney@TAMWorkersComp.com Website: www.TAMWorkersComp.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $0 Brokered Business: Accepted States Entered in: TX Carriers Represented: Texas Mutual Insurance Co.

The Hamilton Wharton Group, Inc. 110 Wall St., 11th Fl, New York, NY 10005 Phone: 212-344-6000 Fax: 212-344-0007 Email: wtaylor@hamiltonwharton.com Website: www.hamiltonwharton.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $30,000 Brokered Business: Accepted States Entered in: NY Carriers Represented: NY State Insurance Fund – Safety Group 580

Workers’ Comp discount program for TX manufacturers. Program is underwritten by Texas Mutual Insurance Company. Participants can receive an 11 % premium discount up front and could possibly qualify for two different types of Texas Mutual dividends.

Texas Mutual Insurance Co. 6210 E Highway 290, Austin, TX 78723 Phone: 800-859-5995 ; Fax: 512-224-8585 Email: information@texasmutual.com Website: www.texasmutual.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $N/A Brokered Business: Accepted States Entered in: TX Texas Oil & Gas Association Workers' Comp Purchasing Group 304 W 13th St., Austin, TX 78701 Phone: 512-478-6631 ; Fax: 512-472-3859 Email: jsierra@txoga.org Website: www.txoga.org Markets Offered: Oil & Gas Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $0 Brokered Business: Accepted States Entered in: TX Carriers Represented: Texas Mutual Insurance Company

The Maplewood Group, Ltd. 643 Stublyn Rd., Granville, OH 43023 Phone: 740-321-1137 Fax: 775-330-1583 Email: submissions@themaplewoodgroup.com Website: www.themaplewoodgroup.com Markets Offered: 24 Hour Policy, Excess WC , Loss Sensitive & Pay As You Go, USL&H, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $50,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: SUA, LUA, AIG, ACE, PMA, SeaBright, Guarantee, WorkFirst, AmTrust

The Mechanic Group, Inc.

The American Equity Underwriters, Inc. RSA Battle House Tower, 32nd Fl, 11 N Water St. Mobile, AL 36602 Phone: 866-238-8754 Fax: 251-690-4299 Email: info@amequity.com Website: www.amequity.com Markets Offered: Excess Workers’ Comp, Workers’ Comp, USL&H Phone Inquiries: Accepted Minimum Premium: $9,125 Brokered Business: Accepted States Entered in: All States

One Blue Hill Plaza, Ste. 530, Pearl River, NY 10965 Phone: 845-735-0700 Fax: 845-735-8383 Email: mkatz@mechanicgroup.com Website: www.mechanicgroup.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 - $10,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE, AIG, Magna Carta and The Hartford Insurance Programs, Brokerage and Risk Management for the Security Officer, Electronic Security-Alarm, Investigation and Background Screening Industries.

Trinity E&S Insurance Services, Inc. 79-301 Country Club Dr., Ste. 200 Bermuda Dunes, CA 92203 Phone: 760-360-4100 ; Fax: 760-360-0055 Email: mstith@trinityinsurance.com Website: www.trinityinsurance.com Markets Offered: Workers’ Comp Phone Inquiries: Not Accepted Minimum Premium: $ 750 Brokered Business: Not Accepted States Entered in: CA Carriers Represented: Tower Select

May 18, 2009 INSURANCE JOURNAL-NATIONAL REGION | N33


2009 Workers’ Compensation Directory

Tryton Insurance Group, LLC

Western Maritime

3131 Eastside, Ste. 600, Houston, TX 77098 Phone: 713-351-8237 Fax: 877-222-0362 Email: ylee@trytoninsurance.com Website: www.trytoninsurance.com Markets Offered: USL&H, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Not Accepted States Entered in: NJ Carriers Represented: Hartford, Travelers, Safeco / AmericFirst, Zenith, AIG, Zurich, CNA, OneBeacon

4226 Coronado Ave., Stockton, CA 95204 Phone: 209-466-1413 Fax: 209-466-0260 Email: info@aquapac.com Website: www.westmaritime.com Markets Offered: Excess Workers’ Comp, Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,500 Brokered Business: Accepted States Entered in: CA Carriers Represented: Zenith

Tryton Insurance Group is an MGA specializing in standard markets. We offer our service with No fees, No premium Commitment, and an experienced and dedicated staff ready to write your next Work Comp account.

Full service wholesale provider for recreational & commercial marine products. We invite you to join our family of over 2,500 agents & brokers now appointed with our office. You’ll have access to exclusive insurance products written through various “A” rated carriers. With our products you are afforded more flexibility, quicker quote turnaround & claims handling right here in our office.

U.S. Risk Brokers 11200 Richmond Ave., Ste. 600, Houston, TX 77082 Phone: 281-249-4926 Fax: 281-679-9226 Email: theresad@usrisk.com ; brendand@usrisk.com Website: www.usrisk.com Markets Offered: Work Comp - State & USL&H Phone Inquiries: Accepted Minimum Premium: $3,500 for State - $10,000 for USL&H Brokered Business: Accepted States Entered in: AK AL CT CO GA IA IL KY LA MA MO MS NC NE NH NM NY OR OK P A SC TN TX UT VA Carriers Represented: AIG, Zenith Unisource Program Administrators 3665 Bee Ridge Rd., Ste. 214, Sarasota, FL 34233 Phone: 941-378-7002 Fax: 941-309-7600 Email: Carol.Gonzalez@UnisourcePA.com Website: www.UnisourcePA.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $10,000 Brokered Business: Accepted States Entered in: All States except ND OH W A WY Carriers Represented: AIU, Zurich, Amerisafe USX/S 6929 W 130th St., Ste. 100, Cleveland, OH 44130 Phone: 800-574-8797 Fax: 440-888-7380 Email: brokers@usxs.net Website: www.USXS.net Markets Offered: Excess Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $15,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: Midwest Employers, AIG, Safety National

Venture Brokerage

1301 Wright’s Lane East, West Chester, PA 19380 Phone: 800-282-6247 x 278 Fax: 610-692-5977 Email: marketing@venturebrokerage.com Website: www.venturebrokerage.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $2,500 Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE Group, AmTrust, AleaNorth America, Chubb, GE, Hartford, USF-G

Western Pinnacle Insurance Services 600 W Shaw Ave., Ste. 400, Fresno, CA 93704 Phone: 559-221-2050 Fax: 559-225-2066 Email: fresno@ampinn.com Website: www.ampinn.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: AZ CA CO ID MT NM NV OR UT Carriers Represented: First Comp, AIG, Majestic, Republic, Tower, Everest National, Berkshire Hathaway & Alaska National

WIAA Insurance Services 11190 Sun Center Dr., Rancho Cordova, CA 95670 Phone: 916-443-4221 Fax: 916-554-3116 Email: wiaains@wiaagroup.org Website: www.wiaainsurance.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $1,000 Brokered Business: Accepted States Entered in: CA Carriers Represented: ACE, BHHC, AIG, Zurich, Hartford, CNA, Safeco, Travelers Woodus K. Humphrey & Co., Inc. 7600 Fern Ave., Bldg 500, Shreveport, LA 71105 Phone: 318-865-2454 Fax: 318-861-6937 Email: dick.chilvers@amwins.com Website: www.amwins.com Markets Offered: Workers’ Comp, Excess Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 - $3,000 (Varies by Class Code) Brokered Business: Accepted States Entered in: All States Carriers Represented: ACE, Amerisafe Wrap Up Insurance Solutions 16141 Swingley Ridge Rd., Chesterfield, MO 63017 Phone: 636-489-0185 Fax: 636-536-7473 Email: bbillhartz@trekadmin.com Website: www.trekadmin.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $150,000 Brokered Business: Accepted States Entered in: All States

Westrope 801 W 47th St., Ste. 500, Kansas City , MO 64112 Phone: 816-842-8222 Fax: 816-842-3081 Email: info@westrope.com Website: www.westrope.com Markets Offered: Workers’ Comp, Excess WC Phone Inquiries: Accepted Minimum Premium: $5,000 Brokered Business: Accepted States Entered in: All States Carriers Represented: 15 + Markets - Various Classes

Wholesale Brokerage & Insurance Services

2200 Harbor Blvd., Ste. C210, Costa Mesa, CA 92627 Phone: 877-270-7382 Fax: 949-270-7399 Email: submissions@wholesalebrokerins.com Website: www.wholesalebrokerins.com Markets Offered: Workers’ Comp Phone Inquiries: Accepted Minimum Premium: $500 Brokered Business: Accepted States Entered in: AZ CA NV Carriers Represented: AIG, Everest, Delos, Zurich, Travelers We will look at all Workers Comp risks! Contractors, Manufacturers, Distributors, Retail, Office, etc. We have markets for lapse in coverage and high X-mods. In most cases, we are able to aggressively compete with any target premium.

N34 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

www.insurancejournal.com


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Idea Exchange Closing Quote

Amid Obstacles, Opportunities Exist Auerbach

By Kenneth Auerbach

Y

ou don’t need to get too deep into conversation these days to find out people are afraid. Given changes in business, the economy and government, many individuals believe they don’t know what or who to trust. These changes can actually work to the benefit of independent insurance agents and brokers. The economic crisis we’ve faced in the past year or so is forcing attitude and paradigm shifts on a broad scale. The “bigger-is-better” mentality is being reevaluated by businesses, government and individuals. Institutions have crumbled, or nearly so. Firms that were once giants in industry and finance — automakers, banks, securities dealers — are downsizing and retooling the scale of their own operations. Smaller, less diversified entities with conservative business plans appear to be more stable.

choices and more personalized services — in short, everything that differentiates us from our competitors. While the insurance business is taking a hit in this financial environment, it and Main Street agents are largely holding their own because of prudent management and sensible oversight. This provides our distribution system a unique opportunity. There is a lot of displaced talent out there — talented and educated individuals who lost their jobs and who could well migrate to insurance sales. What better time is there for us to attract a great number of talented people?

Making Our Own Future While opportunities exist, so do hurdles. Perhaps the largest external challenge that could affect our success involves federal legislation. We always get frustrated when Washington does things slowly. What many of us find to be more frustrating and scary is when In today’s environWashington does something too quickly — like ment, the value of passing a stimulus package nobody has read or to revamp federal regulation for the personal relationships calling entire financial industry, without pausing to note soar. Nobody fosters the stability of the state-regulated insurance business. these better than We need to continually remind our policymakinsurance agents. ers that it’s the feds who failed in their oversight, not the states. As we’re focused on potential federal regulation and its effect, we must, at the same time, As some people pare back their levels of personal concontinue support for common-sense state-based reforms. sumption, they are often shifting where they do business. Internally, we must position ourselves for success as indePeople are becoming more and more disenchanted with pendent agents and brokers. We need to do things like trim impersonal giants. Many people have lost faith in instituexpenses, maximize our use of technology and make our tions to make good on their promises just because they are marketing work amid the advertising clutter, particularly in big. When that faith is eroded, what do we do? We gravitate personal lines. This is no small task. It’s something that is to that which we know — local businesses and people that difficult for all Main Street agents. can provide what we need. To the extent we accomplish these things, we will continIn today’s environment, the value of personal relationue to reap the benefits that come from delivering focused, ships soars. Nobody fosters these better than insurance responsive service to local businesses and individuals with agents. And it doesn’t matter how big or small the operation whom we live and work. America is returning to Main happens to be. Street — which is where we have always been. IJ Consumer interest is measured by what I call the “pointy tip of the spear”— the one or two people customers deal with. This equalizes entity size disparity. As an insurance Auerbach, principal of E&K Agency in Eatontown, N.J., also is president of the agent, agency principal or CSR, you are the one the cusNational Association of Professional Insurance Agents. This article is based tomer trusts in their daily dealings, whether you’re in a fivelargely on remarks Auerbach made to attendees at the AIMS Society PRO-toperson agency or 1,000-person agency. PRO conference, which coincided with conferment exercises for those who Customers will increasingly demand more value, better earned the Certified Professional Insurance Agent (CPIA) industry designation. N36 | INSURANCE JOURNAL-NATIONAL REGION May 18, 2009

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Classifieds

Ad Index

Insurance Journal West • 3570 Camino del Rio North, Ste. 200 • San Diego, CA 92108-1747 Fax: 619/584-1200 • Phone: 800/897-9965 x125 • classifieds@insurancejournal.com For Ad Rate and Information

National American E & S

SOFTWARE

N9

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N28

Amwins Group, Inc.

3

Applied Underwriters

76

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FREE Web-based Insurance Management System

Applied Underwriters

4, 5

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Multi-user, management system for reciprocal medical liability insurance providers – www.insurancesoft.com Covering; Underwriting, Risk Management, Accounting and Claims. For more information visit www.smartstone.com or email info@smartstone.com

Astonish Results

N11

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13

www.burnsandwilcox.com5 CDS Business Mapping www.riskmeter.com

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Crump Insurance Services

N17

www.crumpins.com Fujitsu

AGENCIES

N7

www.fcpa.fujitsu.com/3650 Iroquois Group

24

Liberty Mutual

15

www.libertymutual.com McGowan & Company, Inc.

Looking to acquire Agency Seeking quality P&C agencies throughout Southern California. We are willing to pay a premium for quality Personal Lines or Commercial Lines books of business. We are able to do all cash deals.

Please contact me at mark@2insure.biz or Call 858-922-1385 Your confidentiality is assured.

N3

www.mcgowaninsurance.com Midlands Management Corporation

N23

www.midlandsmgmt.com National Alliance Production School

N23

PULIC Insurance Services, Inc.

N21

RCA Insurance Group

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Sunderland Insurance

N21

Travelers Insurance

N5

Westrope

N10

www.westrope.com

West Arrowhead General Insurance Agency

17

www.arrowheadgrp.com Builder’s & Tradesmen’s Insurance

2

www.btisinc.com

WE SELL INSURANCE AGENCIES Over 25-years experience as Agency Owners, we help you sell your agency or book of business by showcasing its value to qualified buyers. Buyers interested NOW in Personal, Commercial, and Health businesses.

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Compass Insurance Group of Agencies

29

CPCU Los Angeles Chapter

25

www.cpcusociety.org Foremost Insurance Group

21

www.foremoststar.com IBA West

35

www.ibawest.com

SERVICES

ICW Group

22, 23

M.J. Hall & Company, Inc.

20

www.mjhallandcompany.com Monarch E & S Insurance Services

7

www.monarchexcess.com Neitclem Wholesale Insurance Brokers

18

Pacific Gateway Insurance Agency

19

www.pgiainsurance.com QuoMation Insurance Services

9

www.quomation.com Transcal

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Guards • Investigators • Alarms

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GL/Professional Umbrella • WC • Crime 1-800-665-7304 www.brownyardprograms.com

Western Security Surplus

16 33

www.wssib.com Yates & Associates

27

www.yates-assoc.com

May 18, 2009 INSURANCE JOURNAL-WEST REGION | 75


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Joe Santini, Master Mechanic. Keeps classic cars running smoothly. Relies on Applied Underwriters to help run his business the same way. ®

Business owners shouldn’t have to be experts in everything. Applied Underwriters gives them tools to focus on what they know best: their business. With products like SolutionOne® that integrate casualty coverages with payroll processing and risk reduction services. Our superior customer service and Best’s Rating of A (Excellent) have earned us a client retention rate of over 90%. For more information call (877) 234-4450 or visit www.applieduw.com.

©2007 Applied Underwriters, Inc. A Berkshire Hathaway Company.

Insurance Journal  

WHAT DO AGENTS WANT? Not Necessarily Commissions 2009 FIRE SEASON OUTLOOK Calif., Ore., Wash. Are Hotspots

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