Insurance Journal West 2014-05-05

WEST Quakes Push Policies Sales in California 2013 Workers’ Comp Losses on 11-year High Monster’s Insurer-Funded Settlement

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WEST

Inside This Issue

On The Cover

Special Report:

10 Challenges ahead for workers’ compensation

May 5, 2014 • Vol. 92 No. 9 • West

W2

W10

24

42

NATIONAL COVERAGE

WEST COVERAGE

IDEA EXCHANGE

8

W2 California Bill to Close

Earthquake Loophole Clears

Committee

26 Numbers Don’t Lie: Contingency

and Overrides

Affordable Care Act Could Have ‘Modest’ Effect on Other Insurance Costs

12 Insurance Agents Learn How

to Market to People Unlike

Themselves 14 Tech Talk: Measuring Agency

Performance Can’t Be Done

with Technology Alone 16 10 Things to Know About

Recreation & Leisure 18 Special Report: 10 Challenges

Ahead for the Workers’

Compensation Industry 22 Closer Look: The Risks of Dining

Out and How Insurance Can Help 24 E&O Insights: Don’t Let Insuring

Restaurants & Taverns Give You

Heartburn 30 2014 Workers’ Compensation

Directory

4 | INSURANCE JOURNAL-WEST May 5, 2014

W4 California Legislator Introduces

Ridesharing Bill W6 Recent Quakes Push Interest,

Sales of Policies in California

27 The Competitive Advantage: Chris

Burand 42 Closing Quote: Insurance

in the Sharable Economy

W8 California Work Comp Board:

2013 Losses to Hit 11-year High W10 Lockton Launches Gaming,

Entertainment and Sports

Practice in California W11 Monster Involved in Insurer Funded Settlement in California

DEPARTMENTS 6 Opening Note 10 Declarations 10 Figures W12 People 11 Business Moves 40 MyNewMarkets

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NATIONAL COVERAGE

Opening Note

Publisher Mark Wells | mwells@wellsmedia.com

Unhappy Auto Customers

C

ustomers who switch auto insurance carriers due to poor service often end up sorry they did because they end up paying more.

While a poor experience with their insurer is the leading reason customers shop for, and ultimately switch to a new auto insurance company, declining new price satisfaction is the primary reason customers are less satisfied when they do switch insurers, according to the latest J.D. Power 2014 U.S. Insurance Shopping Study.

“The insurance industry spends billions of dollars each year on advertising, and over the last seven years many of those ads have tried to entice customers with big savings,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “While switching to a new insurer usually results in savings, the ads make promises of savings that a growing number of new customers don’t believe they’ve received.”

According to the study, 30 percent of auto customers shopped for a new insurance provider in 2013, among whom 36 percent ultimately switched insurers. Customers who experience a premium increase shop at a rate of 13 percent — less than half the rate of shopping among those who have a poor experience (28 percent).

Rate increases do not Rate increases do not drive drive customers to shop as customers to shop as much as much as poor service does, poor service. as customers are tolerant of a certain level of rate increases, according to the survey. However, rate hikes of more than $200 can triple the rate of customers who switch insurers.

Price is still important in the selection process — eight in 10 customers continue to select the lowest-priced insurer — and price is also an increasingly important driver of new-buyer purchase experience satisfaction once customers have selected a new insurer.

Overall new-buyer satisfaction with the auto insurance purchase experience averages 821 (on a 1,000-point scale), down from 828 in 2013. The decline in satisfaction is driven by a 17-point drop in the price factor, which has the greatest impact on satisfaction.

On average, customers saved $300 when switching insurers in the past 12 months. The longer customers had been with their previous insurer, the greater the savings when they switched carriers, likely because they had been experiencing rate increases, according to the researchers.

The study, now in its eighth year, examines insurance shopping and purchase behavior and overall satisfaction among customers who recently purchased insurance across three factors (in order of importance): price, distribution channel and policy offerings.

Andrea Wells Editor-in-Chief 6 | INSURANCE JOURNAL-NATIONAL May 5, 2014

EDITORIAL Editor-in-Chief Andrea Wells | awells@insurancejournal.com V.P. Content Andrew Simpson | asimpson@insurancejournal.com East Editor Young Ha | yha@insurancejournal.com Southeast Editor Michael Adams | madams@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor Charles E. Boyle | cboyle@insurancejournal.com Senior Editor Susanne Sclafane | ssclafane@insurancejournal.com ClaimsJournal.com Editor Denise Johnson | djohnson@claimsjournal.com MyNewMarkets.com Associate Editor Amy O’Connor | aoconnor@mynewmarkets.com Columnists Chris Burand, Curtis Pearsall Contributing Writers Tommy McDonald, Robert Passmore 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 Mindy Trammell (800) 897-9965 x149 | mtrammell@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 New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale Ly Nguyen (800) 897-9965 x125 | lnguyen@insurancejournal.com MARKETING/NEW MEDIA Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns (619) 584-1100 x120 | eburns@insurancejournal.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Matt Tolk | mtolk@insurancejournal.com DESIGN/WEB V.P. of Design Guy Boccia | gboccia@insurancejournal.com V.P of Technology Joshua Carlson | jcarlson@insurancejournal.com Audience Development Elizabeth Duffy | eduffy@wellsmedia.com Marketing Director Derence Walk | dwalk@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com IJ ACADEMY OF INSURANCE Online Training Coordinator Barbara Whiffen | bwhiffen@ijacademy.com ADMINISTRATION Chief Executive Officer Mitch Dunford Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com

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NATIONAL COVERAGE

News & Markets Affordable Care Act Could Have ‘Modest’ Effect on Other Insurance Costs of people using the health care system may trigger a corresponding increase in medical malpractice claims made against physicians and other health care providers, according to the study. Such a shift could drive malpractice costs modestly higher.

Researchers say state-level variables that will influence impacts on liability costs created by the ACA. This includes items such as whether states require medical costs to be deducted from liability awards or whether states choose to implement the ACA’s optional Medicaid expansion.

T

he expansion of health insurance accomplished under the Affordable Care Act (ACA) may alter costs for several major types of liability insurance, although any such changes are likely to be modest, according to a new Rand Corp. report.

Automobile, workers’ compensation and general business liability insurance costs may fall under the ACA, while costs for medical malpractice coverage could be higher, according to the study.

Researchers say the changes could be as much as 5 percent of costs in some states, but caution there is considerable uncertainty surrounding such estimates. The findings are from one of the first systematic studies of how the ACA could influence costs for liability and related lines of insurance.

“The Affordable Care Act is unlikely to dramatically affect liability costs, but it may influence small and moderate changes in costs over the next several years,” said David Auerbach, the study’s lead author and a policy researcher at Rand, a nonprofit research organization. “For example, auto insurers may spend less for treating injuries, while it may cost a bit more to provide physicians with medical malpractice coverage.”

8 | INSURANCE JOURNAL-NATIONAL May 5, 2014

Long-term Impact While the study primarily focuses on the short-term impacts of health reform on the cost of liability insurance, Rand researchers also suggest that the ACA could have addi Rand researchers examined how the tional long-run impacts.

ACA might operate across different liabil Costs of liability insurance could be ity lines and how the impacts might vary reduced further if reforms aimed at driving across states given existing laws, population down health care costs are successful, for demographics and other factors. example.

Liability insurance companies reimburse Other potential long-run changes include tens of billions of dollars each year for medmodifications of tort law, shifts in pricing of ical care related to auto accidents, workmedical services, changes in the number of place injuries and other types of claims. For practicing physicians and increased efforts example, auto insurers collectively paid $35

by Medicaid to recover a portion of injury billion for medical costs associated with payments. accidents in 2007, about 2 percent of all U.S. “This study highlights the far-reaching healthcare costs in impacts of the ‘Businesses and policymakers Affordable Care that year. need to understand how and Act,” said Jayne Some of those costs may be covered why their risk profiles might Plunkett, head of by health insurance casualty reinsurchange as the Affordable as more Americans ance for Swiss Re, Care Act is implemented.’ become newly cova reinsurance comered under the ACA, according to the study. pany that sponsored the study. “Businesses As that happens, the cost of providing and policymakers need to understand how automobile insurance, workers’ compenand why their risk profiles might change as sation and homeowners insurance may the Affordable Care Act is implemented.” decline. Ultimately, any cost changes expe Other authors of the report are Paul rienced by insurance companies could be Heaton and Ian Brantley. passed on to consumers through changes in The study, “How Will the Affordable Care premiums and coverage options.

Act Affect Liability Insurance Costs?” can be Meanwhile, an increase in the number found at www.rand.org. www.insurancejournal.com

NATIONAL COVERAGE

FIGURES

14

The number of Indiana auto body shops joining a lawsuit that accuses State Farm Insurance and its competitors of extracting “unreasonable and onerous” concessions on vehicle repair costs.

The suit names 27 insurers including Illinois-based State Farm, which has the largest market share in the state at about 25 percent. Others with large market share include Ohio-based Progressive Insurance and Indiana Farmers Mutual Insurance Co.

DECLARATIONS

400

The number of new surveillance cameras installed on the campus of the University of Kentucky in a crime-fighting effort. Another 1,600 installations are planned. Campus police say security camera footage already has helped police solve two crimes. Recent footage showed several suspects trying to set a car on fire. That video led to three arrests.

Still Not Fixed

“They got an advert on TV saying they fixed the Gulf, but I’ve never been fixed.”

— Louisiana oysterman Jules Melancon, whose livelihood was disrupted by the BP/ Deepwater Horizon oil spill in 2010.

Melancon, the last remaining oysterman on Grand Isle, La., was compensated by BP but deems the sum inadequate. He says he has not found a single oyster alive in his leases in the area since the leak and relies on an onshore oyster nursery to make a living.

48%

10 The number of years in prison to which a Texas insurance agent was sentenced on an insurance fraud conviction. Caleb Deason, an insurance agent for Transamerica Life Insurance Co., was convicted on charges of wire fraud and money laundering in December 2013. On April 3, 2014, he was sentenced to 10 years in federal prison and ordered to pay $99,491 in restitution. The Texas Department of Insurance said Deason diverted death benefits from a $1 million life insurance policy into his own bank account.

The percentage of New Jersey residents in a recent poll who said they are satisfied with the way their state is handling Superstorm Sandy recovery efforts. It’s the first time that the public satisfaction level in the state has fallen below 50 percent since the storm hit in October 2012, according to the Monmouth University and Asbury Park Press, which conducted the telephone survey of 803 New Jersey adults in late March.

$500 Million

No Crank Call

“I was sure it was a crank call. …

I just figured it was some of my buddies messing with me.”

— Roger Lemírande, a Wisconsin trucker, on the phone call telling him he won a customized truck in Great American Insurance Group’s annual Big Rig Giveaway. Lemírande, who’s been driving for 35 years, won the contest at the Mid-America Trucking Show.

On Watch

“I am very happy that Congress has acted to protect homeowners. …

However, we will have to watch FEMA’s implementation of it to be sure it actually fixes the problem.”

— Mississippi Insurance Commissioner Mike Chaney said he is withdrawing the suit aimed at stopping flood insurance premium increases mandated under a 2012 reform law.

In March, Congress passed a new law — The Homeowners Flood Insurance Affordability Act — rescinding many of the increases.

Is how much less the Oregon Department of Transportation says it is on track to spend due to a potential decline in gas-tax revenue. That’s because people are driving less and their vehicles have become more fuel efficient.

Sharing Economy

“This legislative proposal acknowledges what our community already knows: San Franciscans should be able to share the home in which they live.”

— San Francisco-based Airbnb said it was reviewing a proposal in which lawmakers are considering making it legal for city residents to rent out their homes on sites such as Airbnb, but only if they have liability insurance and work with policymakers.

Driver Inattention

“The numbers tell the sad truth: we are in the midst of a surge in driver inattention.”

— New Jersey’s Acting Attorney General John Hoffman on the staggering toll driver inattention has taken on New Jersey’s roadways. From 2004 to 2013, driver inattention was a major contributing circumstance in 1.4 million crashes in New Jersey.

10 | INSURANCE JOURNAL-NATIONAL May 5, 2014

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News & Markets California Bill to Close Earthquake Loophole Clears Committee

A

California bill to close a loophole that enables building on active earthquake faults without considering the impacts passed a key committee hurdle in late April.

Senate Bill 1155, authored by state Sen. Ted Lieu, D-Redondo Beach, passed through the Senate Governance and Finance Committee on a 5-1 vote.

The bill was authored in response to recent revelations that buildings have been constructed on active earthquake faults with no geological survey or setback, according to Lieu.

“The state shouldn’t allow indiscriminate building on known active earthquake fault zones without considering building integrity and public safety,” Lieu said in a statement. “Without closing this gaping hole in current law, Californians are potentially in significant danger.”

Under existing law, local planners and developers are required to take special considerations when building on or around an active fault. These requirements kick in once the state geologist maps the active fault pursuant to the Alquist-Priolo Act of 1972.

While California has at least 7,000 miles of known active earthquake faults, more than 2,000 miles of active faults continue to be exempt from any requirements.

Prompting Lieu’s bill was a recent series or articles by the Los Angeles Times that showed that officials had approved numerous residential and commercial projects in Los Angeles and Santa

Monica where geologists have identified hazards for surface rupture, yet these faults had not been officially designated as earthquake fault zones pursuant to the Alquist-Priolo Act. SB 1155 would extend the building requirements under the Alquist-Priolo to all active ruptured faults. The bill now heads to the Senate Committee on Appropriations.

Lieu, who chairs the Senate Business, Professions and Economic Development Committee, oversees a district that includes Beverly Hills, Carson, El Segundo, Hermosa Beach, Lomita, Manhattan Beach, Redondo Beach, Santa Monica, Torrance, West Hollywood and the Palos Verdes Peninsula, as well as portions of Long Beach and Los Angeles.

Montana Company Wants to Strike State Cap on Jury Awards

Archdiocese in Oregon Faces New Sex Abuse Lawsuit

A

A

n office supply company is asking the Montana Supreme Court to rule that the state’s cap on punitive damage awards is unconstitutional.

The constitutional challenge comes after a ButteSilver Bow district judge upheld a $52 million jury award in favor of Masters Group International Inc. in April.

Montana law caps punitive damages at $10 million or 3 percent of a defendant’s net worth, whichever is less.

The jury awarded the company $41.5 million in compensatory damages and $10.5 million in punitive damages after previously finding Comerica Inc. reneged on a November 2008 agreement.

Masters’ attorneys say the bank seized its accounts without notice, lied about Comerica’s ability to use federal bailout money to help Masters and put the Butte company out of business.

Comerica is appealing the verdict.

Copyright 2014 Associated Press.

W2 | INSURANCE JOURNAL-WEST May 5, 2014

nother lawsuit has been filed against the Catholic Archdiocese of Portland by a man who says he was one of dozens of boys sexually abused by a priest in the 1960s and 1970s.

In the lawsuit filed last month in federal court in Portland, the 52-year-old man says he was molested by Maurice Grammond when the priest was assigned to a church in Seaside. The man was between seven and 12 years old at the time.

The Oregonian reported the complaint seeks $2 million.

The archdiocese said it “will work for a just resolution of the claim.”

The archdiocese has paid nearly $40 million to dozens of victims of Grammond who died in 2002.

Copyright 2014 Associated Press. www.insurancejournal.com

WEST COVERAGE

News & Markets California Legislator Introduces Ridesharing Bill

A

The personal automobile insurance polCalifornia Assemblywoman introicy is not designed or intended to be used duced a bill in late April to regulate for commercial activities and contains a ridesharing companies like Uber, Lyft and specific exclusion for livery activities, the Sidecar. insurance industry and the bill’s author Assembly Bill 2293, authored by argue.

Assemblywoman “As this new transportaSusan Bonilla, ‘As this new transporD-Concord, would tation option has grown tion option has grown and expanded, gaps in insurclarify existing insurand expanded, gaps in ance coverage have been ance laws related to insurance coverage have identified,” Bonilla said in ridesharing service a statement. “My legislaactivities while supbeen identified.’ tion will define when comporting new business mercial activity begins and ends along with advancements, according to Bonilla. providing important disclosures to TNC The transportation network company drivers which will ensure that all parties business model allows drivers to use their are aware of the insurance policy coverage personal vehicles to pick up and drive ridwhich is in place.” ers for a fee using a smartphone app, which California Insurance Commissioner the insurance industry has argued is using a Dave Jones in early April recommended to personal vehicle for a commercial activity.

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2/7/14 10:54 AM

the California Public Utilities Commission, which oversees TNCs in California, that TNCs should bear the insurance burden when they encourage drivers to use their Susan Bonilla personal vehicles to transport passengers for a profit.

TNCs have become a high profile topic in the last few months, in part thanks to a perceived gap in insurance coverage, and a New Year’s Eve incident during which a TNC driver under contract with Uber struck and killed 6-year-old Sofia Liu. Her family has filed a lawsuit against Uber. Uber issued a statement saying the driver, 57-year-old Syed Muzzafar, was not responding to a fare and didn’t have a passenger in his car when he struck Liu. The sticking point in the debate between TNCs and the insurance industry has been over a gap in insurance coverage during the period when TNC drivers have their smartphone app on but have not been matched with a ride.

TNCs were already required to have a $1 million commercial policy on drivers when giving rides or going to pick up a ride, but it was assumed that during this gap that TNC drivers’ personal policies would be in effect.

AB 2293 would: • Require TNCs to disclose to drivers upfront that their personal insurance may not apply when engaging in commercial TNC activities; • Define in statute that TNC activities begin once the “app” is turned on and the TNC services end when the “app” is turned off; • Clarify that the TNC business company insurance is the primary insurance coverage; • Require TNCs’ liability insurance to defend their drivers when the driver has a claim or accident. www.insurancejournal.com

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News & Markets Recent Quakes Push Interest, Sales of Policies in California

By Don Jergler

CEA, a privately funded, publicly managed entity that sells polices through ome people don’t need Earth Day to be participating insurers, is the reminded they live on a planet powered organizer of the annual the by the forces of nature.

“ShakeOut” drills each year.

The recent string earthquakes on the The drill is Oct. 16 this year.

Pacific belt may have hit home with On the Friday the quake California homeowners, who were already struck there were 6,700 visia bit shaken up by the 5.1 magnitude earthtors, or hits, on the site — the quake that struck La Habra on March 28. bulk of those from 9 p.m.

The Southern California quake occurred to midnight, according to at a shallow depth of 4.6 miles, with hunPomeroy. dreds of aftershocks reported afterward, An average Friday yields according to the United States Geological about 1,700 hits, he said.

Survey.

During weekends website traffic falls as Damage from the shaking, though noticepeople go about business other than checkable to many residents, wasn’t particularly ing into their policies or reading up on the large, and there was no reported loss of life latest earth-quake related news. A typical or significant injuries. weekend on the site sees roughly 480 hits, Days later an 8.2M earthquake struck off according to CEA. the coast of Chile, prompting the Pacific However, 5,600 hits were recorded on the Tsunami Warning Center to issue warnings Saturday following the La Habra quake, and for Chile and Peru, which were later lifted. on Sunday the site had 2,900 hits, CEA said.

Several large aftershocks followed. Then During the following on April 18, ‘We’re going to be up a few work week the hits just a 7.2M earthquake struck thousand policies as a result kept coming: Monday southwestern of the La Habra earthquake.’ saw 8,300 hits, Tuesday (6,900), Wednesday (5,900), Mexico.

Thursday (4,900). A typical weekday sees Those quakes didn’t do a great amount of fewer than 2,000 visitors, according to CEA. reported damage or cost high numbers of Following such seismic reminders it’s lives, but they jarred the complacency out not rare to see a spike in interest, or in of some Californians, who turned to the the number of earthquake policies sold, California Earthquake Authority, possibly Pomeroy said. to figure out what earthquake insurance CEA earthquake insurance is sold by entails — and a number of Californians eviinsurance agents, who sell the policies dently purchased policies. through participating CEA-approved insur The night the quake struck Southern ers, so there’s a lag in getting a tally on California and the days following visitors polices sold during a particular period. flocked to CEA’s website, www.earth However, some data on policy sales are quakeauthority.com. Visitation also surged starting to come in, and so far it looks like a bit after the quakes in Mexico and South during the weekend following the quake America, according to CEA. and the days after the number of new poli “It happens really any time there’s a cies issued surged, according to Pomeroy. noteworthy earthquake, even if it’s not “We’re going to be up a few thousand polin California, but particularly if it is in icies as a result of the La Habra earthquake,” California,” said Glenn Pomeroy, CEA’s CEO. Pomeroy said.

“In the hours after the La Habra earthquake, Pete Moraga, a spokesman for the hits to our website went through the roof.”

S

W6 | INSURANCE JOURNAL-WEST May 5, 2014

Insurance Information Network of California, said the group’s insurer membership often reports a surge in sales and interest in earthquake policies following a noteworthy quake.

“What I’ve heard anecdotally is, yes, it happens after earthquakes,” Moraga said.

“We hear from both agents and insurance companies that interest in earthquake policies surge after earthquakes.”

But just because there’s been some shaking that doesn’t mean there are a whole lot of insured homeowners. According to the California Department of Insurance, only 10.6 percent of California homeowners have earthquake insurance.

Those who did experience the La Habra quake and acted likely took even greater notice of the following quakes around the world because the shaking that they experienced was fresh on their minds, Pomeroy said, adding, “These all just sort of blend together to remind us earthquakes are real.”

The fact the most recent quakes hit around the Ring of Fire, the volcanic and seismically active horseshoe shape around the basin of the Pacific Ocean, is also a message for those who are paying attention.

“It has been particularly active lately,” Pomeroy said of the area. “I think Chile and the event in Mexico came at a time where Californians were focusing on the fact that it happens here.” www.insurancejournal.com

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News & Markets California Work Comp Board: 2013 Losses to Hit 11-year High

C

alifornia workers’ compensation losses and loss adjustment expenses on insured claims injuries and illnesses are projected to hit an 11-year high for 2013, according to the Workers’ Compensation Insurance Rating Bureau.

However, the growth in premium rates in 2012 and 2013 may cause the ultimate combined loss and expense ratio to fall to 113 percent of premium, and that’s the lowest level since 2007, WCIRB said.

Based on experience through the end of last year and WCIRB’s summary of losses, expenses and premium, WCIRB estimates that ultimate losses and allocated loss adjustment expenses for accident year 2013 claims will jump to $12.5 billion, up $800 million from 2012 and up $2.8 billion from the five-year low estimated for 2009.

Statewide direct written premium rose 18 percent in calendar year 2013 to $14.8 billion, but after applying deductible credits, total premium rose from $9.1 billion in 2012 to $10.9 billion in 2013, WCIRB said.

Charged rates on 2013 policies averaged $2.85 per $100 of payroll, up about 10 percent from $2.60 per $100 of payroll for the last half of 2012, and up 36 percent since premium rates bottomed out at an average of $2.10 in 2009, WCIRB said.

mates loss adjustment expenses will fall from 25 percent of premium for accident year 2012 to 23 percent of premium for 2013, while other expenses will remain at about 20 percent of premium, putting insurers’ ultimate combined ratio of losses plus expenses for 2013 at 113 percent.

For California workers’ comp insurers that translates to $1.13 in benefit payments and expenses for every $1 in premium they took in 2013. While that combined ratio is the best result since accident year 2007, the latest results indicate that the industry’s combined ratio remains well above 100 percent of premium during a period in which interest rates remain low, making it more difficult for insurers to make up the difference in the investment markets, WCIRB said.

WCIRB projects that insured losses and allocated loss adjustment expenses for accident year 2013 will ultimately hit $12.5 billion, $800 million more than 2012 and the highest level in more than a decade.

At least some of this increase is due to

‘After reviewing the mix of offsetting positive and negative results noted in the 2013 analysis, earlier this month the insurer and public members of the WCIRB Governing Committee voted unanimously to forego a mid-year rate filing for new and renewal policies as of July 1.’

The average rate in 2013 was still less than half of the all-time high of $6.29 per $100 of premium in the second half of 2003, according to WCIRB. With the recent growth in premium, WCIRB’s preliminary estimate is that insured losses will decline to 70 percent of premium for accident year 2013. That compares to loss ratios of 78 percent in 2012, 85 percent in 2011 and 95 percent in 2010.

In addition to loss costs, WCIRB estiW8 | INSURANCE JOURNAL-WEST May 5, 2014

an increase in indemnity claim frequency last year, which WCIRB estimates was 4.7 percent above the accident 2012 level and 6.6 percent above the 2011 level. The initial analysis of 2013 insurer experience attributes the recent increase in claim frequency to a rise in the number of cumulative injury claims, permanent disability claims, claims involving multiple body parts and claims from Los Angeles and the surrounding regions, WCIRB saiid.

Even though indemnity claim frequency remains about 30 percent below the levels noted prior to the 2002-2004 workers’ comp reforms, 2013 marked the third time in the last four years that frequency increased.

At the same time, ultimate claim severity (average indemnity claim cost) for 2013 is expected to edge up 1.4 percent from the 2012 level, as a slight decline in average indemnity is expected to be more than offset by increases in medical and allocated loss adjustment expenses.

WCIRB pegs the ultimate average cost of an accident year 2013 indemnity claim at $86,946 – $24,926 indemnity, $50,466 medical and $11,554 for allocated loss adjustment expense. The increase in claim severity in 2013 continues an uptrend that began eight years ago, so the projected average loss for a California workers’ comp indemnity claim has now risen roughly $32,000 from the post-workers’ comp reforms (SB 899) low recorded in 2005.

“The Rating Bureau projects that insured losses on all injuries that occurred prior to 2014 will exceed the amounts already reported by insurers for those injuries by $5.1 billion, which is about the same as in the two prior years,” WCIRB stated. “After reviewing the mix of offsetting positive and negative results noted in the 2013 analysis, earlier this month the insurer and public members of the WCIRB Governing Committee voted unanimously to forego a mid-year rate filing for new and renewal policies as of July 1.” www.insurancejournal.com

CENTER for

INSUR A NCE STUDIES California State University, Fullerton

“Funding an endowed scholarship for CIS was the next logical step in OCRIMS’ continuing efforts to advance the risk management profession.

”

Bridgette Castillo ’01

Past President Orange County Chapter Risk and Insurance Management Society, Inc. (OCRIMS)

For more than a decade, OCRIMS has sponsored risk management education at Cal State Fullerton’s Center for Insurance Studies (CIS), the largest insurance program in the Western United States.

Al Gorski, a director on the national RIMS board, teaches risk management courses at Cal State Fullerton and is a strong advocate of the program.

Bridgette Castillo ’01, risk finance manager at St. Joseph Health and past president of OCRIMS, has shared her industry knowledge with students as a guest professor.

OCRIMS believes their investment in CIS will pay big dividends: “By providing the first endowed scholarship for the Center, OCRIMS ensures permanent funding to educate California’s next generation of risk management leaders,” says Dan Reynolds, incoming OCRIMS president.

CIS is self-supported through industry contributions. Your sponsorship provides resources for scholarships, speaker series, industry networking events and faculty endowments. Find out why so many leading companies support the Center and discover how you can invest in the future of this great industry.

CENTER FOR INSURANCE STUDIES

Dr. Weili Lu,

centerforinsurancestudies.com

(657) 278-3679

Director

Al Gorski

Chief Risk Officer, Orange County Transportation Authority RIMS Board Member

WEST COVERAGE

News & Markets Lockton Launches Gaming, Entertainment and Sports Practice in California

L

ockton has launched a gaming, entertainment and sports practice to be based in Irvine, Calif.

The group is part of Lockton’s Pacific operations and it integrates multiple vertical markets.

Lockton’s gaming, entertainment and sports practice provides a range of risk management solutions to clients, including Jared Mitilier property/casualty, workers’ compensation, management liability, employee benefits and specialty risks.

Additional services include policy analysis, legal review, loss control and safety, and claims advocacy.

Jared Mitilier, a 15-year industry veteran, has been named to lead the team.

Mitilier has specialized in risk management solutions for entities including

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hotels, casinos, race tracks, Hollywood studios, professional leagues and teams, actors, athletes and music touring groups.

Prior to Lockton, he served as national hospitality and gaming practice leader for Marsh, and managing director of Nevada and national gaming practice

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leader for Wells Fargo Insurance Services.

Also joining the team are Marlene Benoit, promotion and events leader, and Lindsey Criswell, account manager.

Benoit has more than 17 years of experience underwriting and brokering promotional risk management services. Her expertise includes event cancellation and non-appearance, special event liability, prize indemnity, over redemption and weather insurance. Benoit previously served in the role of promotion and events leader for Marsh and vice president of business development for iC Specialty Brokers.

Criswell is responsible for client servicing, advising on risk management strategies, deepening relationships with underwriters and assisting in the development of new business opportunities.

Prior to Lockton, Criswell was a client representative for Marsh’s hospitality and gaming practice and a sales associate for CS STARS, a subsidiary of Marsh.

More than 4,950 professionals at Kansas City, Mo.-based Lockton provide 35,000 clients around the world with risk management, insurance and employee benefits consulting services that improve their businesses. www.insurancejournal.com

Monster Involved in Insurer-Funded Settlement in California

C

maintain that the Company and its management, orona, Calif.-based Monster Beverage suit has no merit.

Monster, together with its insurCorp. has agreed to settle an ongoing “Contrary to ance carriers, believed it was in securities class action lawsuit against the the allegations their best interests to settle the company and two of its officers in federal in the lawsuit, case for the amount set forth in district court in Los Angeles.

Monster’s relathe settlement agreement,” a state The settlement, reportedly worth $16.25 tionship with ment from the company announcmillion, is pending court approval. The suit Anheuser-Busch ing the settlement states. was filed by shareholders who claimed the was extremely According to the Monster statecompany’s financial reporting was inflated successful during the proposed class period ment, the full settlement payment is being to affect its stock price and it involved the and thereafter,” reads a statement from funded by Monster’s insurance carriers. company’s business relations with beverage Monster. “After that relationship began in The carriers are not named in the statedistributor Anheuser-Busch.

2006, Monster achieved record sales in each ment.

The lawsuit is Cunha v. Hansen Natural quarter during the proposed class period, The settleCorp. It was and significantly improved its Monster ment will not have originally ‘Contrary to the allegations in the Energy product line’s market share. filed in 2008, lawsuit, Monster’s relationship with any impact on Further, despite the lawsuit’s allegations Monster’s financial and Monster Anheuser-Busch was extremely of harm to investors, Monster’s stock price position or its has spent successful during the proposed rose by 75 percent during the proposed income statement, more than class period, generating nearly$1.7 biland it contains five years class period and thereafter.’ lion in shareholder value during that time.” no admission of defending Monster is a marketer and distributor liability or wrongdoing on the part of the against the allegations in the suit. of energy drinks and alternative beveragcompany or its officers, according to the The suit was filed as a federal class es. The company markets and distributes statement. action on behalf of purchasers of Monster’s a host of Monster Energy brand energy Monster said all defendants continue to common stock between May 23, 2007, drinks. deny the allegations against them and to and Nov. 8, 2007. The named plaintiff is Marcelo Cuna, who purchased common stock of Hansen Natural. Hansen changed its name to Monster in 2012.

The suit names as defendants Rodney Sacks, chairman of CEO of Hansen, and Hilton Schlosberg, vice chairman, preswww.mjhallandcompany.com ident, chief operating officer and chief financial of Hansen.

General Liability Crime (Primary or Excess) - Inside the Premises The suit alleges the defendants dissem- CGL Limits up to $3,000,000 - Outside the Premises inated materially false and misleading Property - Primary Liquor Liability statements and concealed material facts - Basic, Broad or Special Form up to $1,000,000 that would adversely affect the company’s Available Programs may include: - Replacement Cost or ACV - Equipment Breakdown - Garage Keepers Coverage stock, and they allowed themselves and - Computer Equipment For Valet Services other company insiders to sell more than - Accounts Receivable - Non-Owned/Hired Auto 2.3 million shares of personally held stock - Valuable Papers - Assault & Battery for proceeds in excess of $104 million.

- Business Income - Business Income - Outside Signs - Medical Payments Coverage The company had been defending itself - Contents against the allegations, but evidently called Now Serving: AK, AZ, CA, NV, TX, HI LIC #0488901 Send submissions to: it quits in the face of mounting defense Alaska@mjhallandcompany.com costs.

Arizona@mjhallandcompany.com California@mjhallandcompany.com “However, in light of the potential costs Hawaii@mjhallandcompany.com of continued litigation, as well as the Nevada@mjhallandcompany.com potential burden and disruption to the Texas@mjhallandcompany.com

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WEST COVERAGE

People Michael Gonthier

Jay Sherwin

Rich Hallman

Keri Hennesay

Edgewood Partners Insurance Center named Michael Gonthier chief financial officer.

Elaine Andrian, EPIC’s current CFO, will now focus on merger and acquisition strategy and diligence.

Gonthier will be responsible for overseeing all finance and accounting, human resources and information technology functions across the organization.

Gonthier has more than 20 years of experience in operations, information technology, finance and administration.

Prior to joining EPIC, Gonthier served as senior vice president and chief operating officer since 2008 for Crump Insurance Services. Gonthier also held the titles of vice president and finance division CFO for BISYS Insurance Service and vice president of corporate service for BISYS Group Inc. EPIC has nine offices across California: Los Angeles; Irvine; Inland Empire; Fresno; Folsom; San Francisco; San Mateo; Petaluma; and San Ramon. EPIC also has offices in Atlanta, Boston, Chicago, Denver and New York.

Jay Sherwin joined Lockton’s Denver, Colo. operation as senior vice president and department manager of financial and professional services.

Sherwin will focus on developing insurance and risk management solutions. Additionally, he will assist in the development of training and continuing education for Lockton Associates.

Sherwin has more than 15 years of experience, which includes working with the energy, financial institution, technology, airline, manufacturing, and food and beverage sectors.

Previously, Sherwin served as a managing director with Aon. Prior to that, he served as corporate counsel for a Denver-based technology company and was in private practice with a Florida law firm.

Kansas City, Mo.-based Lockton employs more than 4,950 professionals and provides services to 35,000 clients around the world.

Reno, Nev.-based Employers Holdings Inc. named Richard P. Hallman executive vice president and chief information officer.

He will oversee overseeing all of Employers information technology departments.

Hallman previously served as senior vice president and chief information officer, a position he held with Employers since 2010.

He will continue to be located in Employers’ headquarters in Reno.

Hallman has more than 25 years of experience in various technical and senior information technology leader-

W12 | INSURANCE JOURNAL-WEST May 5, 2014

ship positions.

Employers is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on select small businesses engaged in low-to-medium hazard industries.

Wholesaler and managing general agent SierraSpecialty named Keri Hennesay as a surplus lines broker to its team in Clovis, Calif.

Hennesay has been in the insurance industry for 26 years and has experience working as a retail agent, as well as a marketing representative at a managing general agency.

The firm specializes in a variety of areas, including towing, professional liability, agribusiness, healthcare and insurance agents’ errors and omissions.

Dawn E. Hodge has joined the Leavitt Group’s Redwoods office and will focus on commercial insurance.

Prior to joining the agency, Hodge spent eight years with a personal lines not-for-profit insurance automobile club. She also worked as a claims adjuster representing Phoenix, Ariz.

Leavitt’s Redwoods office is part of the Leavitt Group.

Sullivan Brokers Wholesale Insurance Solutions named Jim Sce to the firm’s casualty practice group as vice president.

Sce will work in the Los Angeles office.

Sce has expertise in construction classes, as well as experience in all casualty lines of business.

Sullivan Brokers is a nationwide wholesale brokerage specializing in healthcare, professional, management, and transaction liability, alternative risk transfer, environmental and property/casualty risks.

Hub International Insurance Services Inc. named Artem Ilinets vice president in the San Francisco, Calif. commercial division.

Ilinet’s primary role with Hub will be the deployment of risk aversive insurance solutions for business clients throughout the state.

Prior to Hub, Ilinets was affiliated with OnMarket Insurance Associates in San Francisco, where he served as a mixed personal/commercial lines consultant and broker.

Chicago, Ill.-based HUB provides a variety of property/ casualty, life and health, employee benefits, investment and risk management products and services.

www.insurancejournal.com

NATIONAL COVERAGE

Business Moves AssuredPartners, CBS Coverage Group Lake Mary, Fla.-based AssuredPartners Inc., through its subsidiary Assured SKCG Inc., has acquired CBS Coverage Group Inc. in Plainview, N.Y. CBS Coverage Group specializes in commercial insurance, employee benefits and financial planning services, and personal insurance. The firm reports revenues of approximately $12 million.

As part of the acquisition, 78 CBS Coverage Group employees will join Assured SKCG, which is located in White Plains, N.Y. Local operations will continue under the leadership of CBS Coverage Group President and CEO Gerry Levy.

AssuredPartners is a portfolio company of Chicago-based private equity firm GTCR.

Agency Network Exchange Consolidated Insurance Agents, a network of independent insurance agencies in New Jersey, has changed its name to Agency Network Exchange (ANE). It also unveiled a plan to add resources and staff to expand its network of more than 40 independent insurance agencies into Pennsylvania and other Mid-Atlantic states.

ANE said it will add two staff positions, with one focusing on agency recruitment in Pennsylvania and another providing support to new agencies in Pennsylvania and New Jersey. ANE said it has grown from seven members in 2009 to a network of more than 40 independent insurance agencies with more than $350 million in controlled premiums.

All-Star Insurance Group, Hogue Insurance Agency All-Star Insurance Group Inc. has acquired Hogue Insurance Agency in Quitman, Texas.

Hogue Insurance Agency is now known as All-Star Insurance Group and has moved all operations to an office inside Wood County National Bank in Quitman.

Tonda Tiffee Ward, who previously worked for Hogue Insurance Agency, was appointed managing agent for the new office.

Hogue Insurance Agency has been in www.insurancejournal.com

operation in the Quitman area for more than 25 years.

All-Star Insurance Group Inc. is a subsidiary of First National Bank of Gilmer, Texas, which owns Wood County National Bank of Quitman.

This is the sixth insurance office that All-Star has opened inside an area bank, joining locations at First National Bank in Gilmer and Pittsburg, and locations at Security State Bank in Diana and Ore City, Texas, as well as an office inside Texas American Bank in Mt. Vernon, Texas.

All-Star Insurance is a member of the National Association of Professional Insurance Agents.

BancorpSouth Insurance Services, Knox Insurance Group BancorpSouth Insurance Services Inc., a subsidiary of BancorpSouth Bank, headquartered in Tupelo, Miss., is acquiring Lafayette, La.-based Knox Insurance Group LLC (Knox) in a transaction that is expected to close immediately, BancorpSouth announced.

Financial terms of the pending transaction were not disclosed.

Knox was formed in 1972 and produces annual revenues of approximately $3 million.

For the past 15 years, Knox operated under the leadership of current owners/ brokers Dwayne David and Randall Bonaventure. Knox will continue to operate under their leadership in its current location at 2014 West Pinhook Road #610 in Lafayette.

Knox has a diverse client base including agricultural processing, construction, energy, manufacturing, marine, medical, and transportation. Product specialties include, but are not limited to, workers’ compensation, business auto, property and casualty, and general/umbrella liability.

Arthur J. Gallagher, American Wholesalers Underwriting Arthur J. Gallagher & Co. acquired

American Wholesalers Underwriting in Stamford, Conn. Terms of the transaction were not disclosed.

Established in 1994, American Wholesalers Underwriting is a managing general agent and program manager which provides commercial property/casualty insurance products and services to their independent insurance agent and broker clients throughout the United States.

American Wholesalers Underwriting specialize in program coverage for the durable and non-durable goods wholesale distribution space. John Shea and his associates will continue to operate from their Stamford, Conn., and Bonita Springs, Fla., locations under the direction of Joel Cavaness, president of Risk Placement Services Inc., a subsidiary of Arthur J. Gallagher.

Arthur J. Gallagher’s Chairman, President and CEO, J. Patrick Gallagher Jr., said American Wholesalers Underwriting’s specialty program products and service capabilities will be “a terrific addition” to Risk Placement Services’ expanding wholesale network.

Headquartered in Itasca, Ill., Arthur J. Gallagher is an international insurance brokerage and risk management services firm.

It has operations in 25 countries and offers client service capabilities in more than 140 countries.

May 5, 2014 INSURANCE JOURNAL-NATIONAL | 11

NATIONAL COVERAGE

News & Markets Insurance Agents Learn How to Market to People Unlike Themselves

By Andrew Simpson

T

he middle-aged white woman told the audience of mostly older white male businessowners that much of the country and many of their future customers don’t look like them or necessarily share all their values.

While whites make up 64 percent of the U.S. population today, by 2041 whites will be a minority in the country, multicultural marketing expert Kelly McDonald told agents at the recent legislative conference of the Independent Insurance Agents and Brokers of America (Big “I”) in Washington.

The numbers of minorities and women owners in the agency system are low. The 2010 Big “I” Agency Universe Study found that the number of agencies with principals who are women, Hispanic and/or AfricanAmerican had increased since 2008. The proportion of independent agencies with African-American principals grew from 1 percent in 2008 to just over 4 percent in 2010. There has been more progress for women. More than a third of new small and medium small agencies have women as principals, according to the Big “I.” New agencies appear to be the main driver of this change, according to Quincy Branch, chairman of the Independent Insurance Agents & Brokers of America’s National Young Agents Committee, writing for Insurance Journal recently.

McDonald was not in Washington to lecture agents on increasing minority ownership. She was there to help them learn to market to diverse populations and that communities, customers and the workforce are changing. Her presentation was titled, “How to Market to People NOT Like You.” America is no longer homogenized, she said, adding, “We are no longer a melting pot, we are a salad.”

McDonald, president of New Mexicobased McDonald Marketing, works with IIABA and its Diversity Task Force that is 12 | INSURANCE JOURNAL-NATIONAL May 5, 2014

trying to increase diversity within the agency ranks and improve agencies’ capacity to serve diverse populations.

McDonald had plenty of figures to drive home her point: • One in three Americans is not white, and the majority child population is non-white.

• The country’s multi-racial population is growing three times faster than the overall population.

• The biggest shift is the “browning” of America — the rise of Hispanic population. One in six Americans is Hispanic and one in four children is Hispanic.

Generation Y’s Values In addition to recognizing that America is changing color, agencies need to learn to understand Generation Y or Millennials (born between 1982 and 2004) and they might want to start by bringing some young people into the agency business, suggested Tom Minkler, Big “I” chairman.

Minkler said the independent insurance agency force is one of the oldest industries in the country.

“Look around,” he told attendees. “Fifty percent of people in the system will not be

here in five to seven years.”

The younger generation has different attitudes about family and marriage, McDonald said, noting that Generation Y has been raised by a variety of different families including unmarried parents, divorced parents, single parents, gay parents and grandparents.

Implications for Agents As America changes so does the customer base for agencies. So how should agents relate to their new customers?

For one, McDonald said agencies should know there will be more women owning businesses. Women are more about customer service than men and they tend to place trust in other women, she said.

As for members of the younger generation, they can get information on the Internet, “But they will want advice, guidance, counsel,” McDonald said. “Helping beats selling” when it comes to appealing to Generation Y, she added.

The younger generation builds relationships differently, “but they still believe in relationships,” McDonald said. Agents have always valued face-to-face contact whereas younger people prefer to use social media to build relationships. www.insurancejournal.com

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IDEA EXCHANGE

Tech Talk Measuring Agency Performance Can’t Be Done with Technology Alone

By Tom Wetzel

B

ruce Cochrane of the Renaissance Alliance says agents have to measure everything to stay competitive, however that does not mean relying on technology alone, according to experts who work with and for agencies.

“Many principals make the mistake of believing their agency system is primarily a back-office function that does not affect producers,” says Val Jordan, president of AgenciesOnline and herself a former agency president. “They will delegate the system operation to support staff and leave producers out of the training process.”

Jordan, whose firm develops marketing systems for agents, says owners must take charge of their systems, insist every producer receive all the available training these systems provide and that everyone in the office follows the same protocols: “These systems all have the capability to measure a wide range of data, but only if everyone uses the same procedures and enters information the same way. It’s the old garbage in, garbage out rule. It’s up to management to make sure that everyone is using the system according to the same rules and best practices. Data must be entered properly and completely at the outset so you can avoid double entry and missing information.”

Brandie Hinen says the emphasis on technology is also misplaced because the skill and support of the agency’s

14 | INSURANCE JOURNAL-NATIONAL May 5, 2014

staff — producers, customer service representatives and support staff— are critical to the measurement process. Hinen is a wellknown agent coach and speaker and owner of Powerhouse Learning, and was also a star producer.

“You’re paying for very intelligent problem solvers to help your clients oversee and manage one of the more complex aspects of their business — why would you not include those same intelligent problem solvers to help you with key agency functions, all of which involve the use of technology to measure performance,” Hinen said.

Hinen also points out that training takes more than saying “just suck it up.” Every staff member brings different skills, habits and perspectives to the table. The best systems in the world don’t work if the people using them can’t or won’t use them to their best advantage. That said, Hinen recommends going beyond measuring the traditional benchmarks such as new and renewal commission and revenue by line.

“Evaluate what you are ‘committed to create,’” she says, “in other words the experience or emotion you want to evoke in another party – then evaluate if and how you’re getting the responses you want.

Conduct periodic surveys with clients with an inexpensive tool such as Survey Monkey or do personalized interviews with select clients.”

Finally, an agency’s social media activity should be monitored and measured continually, not just the number of likes, comments and shares but other details by using

free or low-cost tools.

Terry Golesworthy of the Customer Respect Group says monitoring should be the first item on the agenda. “If people are talking about your agency, you need to know about it. Monitoring and responding promptly offers the quickest impact – possibly a lead or saving a client,” he said. “As an agency gets more ambitious, this can be extended to looking for, and responding to people talking about or asking questions about insurance in the local community.”

“Google Alerts is always the first option but also take a look at SocialMention, which can sometimes dig deeper in social media,” he says. “Tools such as Hootsuite, Tweetdeck and Buffer are all good with free options available.”

This is the second of a series on the technology issues facing agents. The focus will be on practical solutions on many fronts, including the customer experience, mobile, privacy and security.

The best systems in the world don’t work if the people using them can’t or won’t use them to their best advantage.

Wetzel is owner of Thomas H. Wetzel Associates, an insurance social media consulting firm. Phone: 708-524-4944. Email: twetzel@wetzelandassociates. com.

.

www.insurancejournal.com

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CLOSER LOOK

10 Things to Know About Recreation & Leisure

In 2013, the NFL agreed to settle a concussion lawsuit filed by former players for $914 million.

Concussion rates were higher among high school athletes than college athletes in certain sports, including football, men’s lacrosse, soccer and baseball. (Study from the Institute of Medicine in 2013 focusing on young athletes aged 5 to 21 years)

187,000 adults reported attending a rock concert twice or more per week, while 730,000 reported attending rock concerts at least two to three times per month. (U.S. Census Bureau statistics from 2010)

Alcohol was the largest human factor in boating deaths in 2012, causing 140 deaths and 313 injuries in 368 accidents. (Statistics compiled by the Insurance Information Institute using U.S. Transportation and U.S. Coast Guard data.)

The number of participants in high school football reached 1.1 million between 2012 and 2013. By comparison 1.1 million competed in outdoor track and field, 971,796 competed in basketball and 782,514 competed in soccer. (201213 High School Athletics Participation)

AIG insures more than 5,000 athletic organizations and sport camps.

Bird watching was a leisure activity partaken in by 6.1 percent of adults. (U.S. Census Bureau statistics from 2010) 16 | INSURANCE JOURNAL-NATIONAL May 5, 2014

There were 3,266 injuries reported from playing billiards or pool in the U.S. in 2011. Fewer injuries were reported from pitching horseshoes (1,637).

However, both activities may be considered far less dangerous that bike riding (540,399). (National Safety Council)

The top 10 states for recreational boating accidents for 2012 were: Florida, California, New York, Texas, Tennessee, Maryland, North Carolina, Missouri, Ohio, and Louisiana. (Statistics compiled by the Insurance Information Institute using U.S. Transportation and U.S. Coast Guard data)

In 2011 32,677 golf-related injuries were reported. That figure excludes golf carts, which were involved in 14,053 injuries. (National Safety Council) Associations) www.insurancejournal.com

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SPECIAL REPORT

Workers’ Compensation

By Andrea Wells

T

oday’s challenges are also tomorrow’s opportunities depending on the viewpoint. Those same opportunities could also remain tomorrow’s challenges.

This special report highlights 10 current workers’ compensation issues and offers opinion on why they could be tomorrow’s challenges for the line.

Wage & Salary Stagnation Average U.S. base salary increases for 2014 held steady at 3 percent for the second year in a row, but pay raises still are roughly one percentage point below pre-recession levels, according to the annual 18 | INSURANCE JOURNAL-NATIONAL May 5, 2014

Compensation Planning Survey by Buck Consultants.

Low to moderate pay wages haven’t helped the workers’ compensation market.

“Salary stagnation or low growth of wages will have a telling impact on the workers’ comp industry in the future for the simple reason that payroll growth is necessary in order to have premium growth,” says John Leonard, president and CEO of MEMIC, a Super Regional workers’ compensation specialist insurer based in Portland, Maine.

“If you consider that payroll is one of the basic components of developing a premium for a risk, once you have no growth or low growth that has a capping effect, so to

speak, in terms of premium growth.”

Therefore the problem for tomorrow’s workers’ comp market will be not enough premium growth to cover the costs associated with the medical component of the claim dollar, Leonard says.

“We have seen over the past 20 to 30 years, a shift in terms of the split between medical cost and indemnity costs as outlined in a claim dollar. It used to be that 60 percent of a claim dollar was attributable to indemnity payments and 40 percent was attributable to medical. Now, in many jurisdictions, you’re seeing that medical is 60 percent or more of the claim dollar and 40 percent is part of the indemnity dollar,” he says. “So if, in fact, there is a slow or no wage growth, we’re going to see a continuing imbalance in terms of the growth of the medical component with no growth on the indemnity side.” www.insurancejournal.com

Technology and Innovation

When it comes to technological innovations, the health care industry’s advancements dwarf anything that’s developed in the workers’ comp industry for years, says Thomas Lynch, founder and CEO of Lynch Ryan & Associates Inc., a management consulting firm for workers’ compensation cost control based in Wellesley, Mass., and publisher of the blog WorkersCompInsider.com.

“The P/C insurance industry is very slow to innovate and is lagging behind other industries, as well as other parts of the insurance industry, in adoption and rapid movement to technology usage and innovation,” he says.

In Lynch’s view, the workers’ comp industry is way behind and it must catch up.

“For example, there’s a huge move now in the Veterans Administration called the Blue Button Project, where if you’re a patient you have a portal. You can go in and you can see all your medical records. You can communicate with your doctors. It’s a great back and forth system.”

There’s nothing quite like it the workers’ comp industry, he says. “That kind of patient back and forth could really be a benefit in, wellness programs, in claims administration.”

The workers’ comp industry also lags in providing mobile claims reporting technology.

“Even now, today, the usual way is that when you have a claim, you’ll go online and file a report online or you’ll make a phone call. Why couldn’t you take out your smartphone, have a voice activated app that could allow you to report directly into your www.insurancejournal.com

carrier’s system which would, in real time, display for a claims adjuster?” he says. “Why can’t you, at the same time, take a picture of the incident on your smartphone and include that with the report — the whole claim reported and done in five minutes.

We can’t do that now and yet we can do it in other areas.”

Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology (MIT), believes the workers’ compensation system must align itself with the rest of the changing health care system to avoid increased costs.

Gruber, who was involved in creating Obamacare and the Massachusetts health insurance system, said that while workers’ compensation carriers should see fewer claims as a result of more Americans obtaining health insurance, there are other forces at play that could mean higher costs and other challenges for workers’ compensation.

“As more people have health insurance there is less need for them to have injuries covered by workers’ compensation and this should lower workers’ compensation costs,” he said.

However, that effect could be offset by employers moving to high-deductible plans and limiting provider networks as well as by health plans capping reimbursements to medical care providers.

“Other payors are going to get tougher at a quicker rate than workers’ compensation is and that is a challenge for this group and the workers’ compensation community,” Gruber says.

“Workers’ comp and the rest of P/C has to get its act together, has to rededicate itself to delighting the customer, to having a dynamic relationship with the customer, and understanding that the customer is the most important thing in its universe,” Lynch says.

Opioid Abuse The biggest issue facing the workers’ compensation industry and for years to come is long-term use of opioids, says Joseph Paduda, principal of Health Strategy Associates LLC, a national consulting firm

specializing in managed care for workers’ compensation and group health.

“There are probably more than 200,000 workers’ comp claimants who have been on a high dose of opioids for more than six months. The vast majority of those are addicted,” he says.

While the industry is doing a better job of preventing inappropriate use of opioids on the front end for new claims, there are few success stories with long-term users.

Aside from addiction concerns, hundreds of workers’ comp claimants die each year as a result of opioid poisoning, Paduda says.

“We — the workers’ comp industry — have become the addiction creation industry.”

The concerns over opioid addiction will plague the industry for many years to come.

First, claimants addicted to opioids are not going back to work. “Therefore, their claims are going to continue and that runs up employers’ costs, and taxpayers’ costs, quite significantly,” according to Paduda.

The other, more troubling challenge associated with opioid abuse is the societal cost.

Aside from the thousands of opioid overdoses, and the hundreds of deaths, evidence shows drug diversion from workers’ comp related injuries.

“The data indicates that about 19 percent of claimants who are prescribed opioids, when they’re drug tested, there’s no evidence of the drug in their urine,” he says.

That means that those opioids prescribed to workers’ comp claimants are getting in the hands of people who are going to use them for illicit purposes.

Another societal concern: opioid addiction is leading to a dramatic rise in heroine usage.

“It’s a problem that is challenging the continued on page 20 May 5, 2014 INSURANCE JOURNAL-NATIONAL | 19

SPECIAL REPORT

Workers’ Compensation continued from page 19 workers’ comp industry, but it’s also bleeding over into and having a very definite negative impact on society as a whole,” Paduda says.

So far the workers’ comp industry has moved slowly in addressing the crisis. In Paduda’s view, a lot of players have yet to fully understand the financial impact of opioids.

“I’ve talked to actuaries and claims people both payers and also at large research organizations. I don’t know anybody who’s done research that separates out the impact of opioids from non-opioids,” he says. “When the actuaries calculate how much more expensive claims are when the patient has opioids than when they do not, and they have a similar type of claim, I think there’s going to be some jaws dropping and some clamor for action,” he says. But that has yet to happen.

Marijuana in the Workplace The use of medical marijuana is a highly publicized development that could present a number of concerns for workers’ compensation in the coming years.

First is the issue of legality, the experts say, because marijuana is considered an illegal substance under federal law, listed as a Schedule I drug under the Controlled Substances Act. However, 20 states and the District of Columbia have legalized marijuana for medical use and several others are considering legislation.

The real issue when it comes to workers’ comp, according to MEMIC’s Leonard, is that so far there’s no proof that using medical marijuana to treat injured workers works.

“In other words, there’s a lot of commentary regarding it but there’s no empirical evidence to support that it actually is effective in treating conditions that we see in workers’ compensation,” he says. “It’s somewhat of a mystery right now to many of us who handle this line of insurance.”

20 | INSURANCE JOURNAL-NATIONAL May 5, 2014

While there’s a lot of talk so far there is no claim activity. “Medical marijuana is a tempest in a teapot,” says Paduda. No one has had any claims.

“It is probably one of the most widely discussed issues right now in the area of workers’ compensation,” Leonard says. “We are the fourth largest workers’ comp carrier in New England and all six New England states currently legalize the use of medical marijuana, and yet, we have not been hit with a single claim.”

Leonard says that doesn’t mean there won’t be an influx of medical marijuana claims in the future. If and when those claims begin to come in, the workers’ comp industry will have much to consider.

“We’ve got conflicts all over this issue,” he says. “I can only forecast that over the next couple of years, you’re going to see an awful lot of commentary regarding the use of medical marijuana in the workplace. Many of us at this point in time simply haven’t had the experience or the insight to clearly outline how it’s going to impact the workers’ comp industry.”

Manufacturing The United States is once again a “rising star” of global manufacturing thanks to falling domestic natural gas prices, rising worker productivity and a lack of upward wage pressure, according to a recent report by the Boston Consulting Group. The report found that while China remains the world’s No. 1 country in terms of manufacturing competitiveness, its position is “under pressure” as a result of rising labor and transportation costs and lagging productivity growth.

The United States, meanwhile, which has lost nearly 7.5 million industrial jobs since employment in the sector peaked in 1979 as manufacturers shipped production to low-cost countries, is now No. 2 in terms of overall competitiveness, BCG found.

The biggest factor driving the U.S. rebound, according to BCG: cheap natural gas prices, which have tumbled 50 percent over the last decade as a result of the shale gas revolution.

Also contributing to the country’s attractiveness, according to BCG, is “stable wage growth” — a euphemism for the fact that, in inflation-adjusted terms, industrial wages here are lower today than they were in the 1960s even though worker productivity has doubled over the same period of time.

The trend is great for the U.S. economy but MEMIC’s Leonard sees some challenges ahead for the workers’ comp line as a result of new workers entering into the manufacturing process.

“The reality of it is studies confirm that new workers are more subject to injury than experienced workers,” Leonard says.

“There is a potential for an uptick in terms of frequency brought on by the expansion of manufacturing for that simple reason alone, the influx of new and perhaps untrained workers taking on these jobs as the economy expands.”

While Lynch agrees the rise in manufacturing will lead to higher loss costs for workers’ comp due to the increased exposures that come with more workers, he also predicts a future with higher-educated workers in manufacturing that could result in few injuries overall.

Many business leaders realize that manufacturing is the future, he says, and have invested in technical trade schools that develop students with advanced technology skills suitable for tomorrow’s manufacturing jobs.

“Manufacturing in the U.S. means advanced technology yet we were not turning out high school graduates who could compete for the jobs that that advanced www.insurancejournal.com

technology was going to require,” he says.

Now, vocational high schools are popping up across the country with high-tech programs that cater to advanced manufacturing concepts. That means a “better educated workforce, which means that we’ll have fewer injuries,” he says.

Affordable Care Act Most research surrounding the Affordable Care Act’s (ACA) impact on the property/casualty markets points to modest changes, at best. However it’s still far too early to estimate the ACA’s effect on the workers’ compensation line, according to MEMIC’s Leonard.

“We hear arguments that it should create a more healthy workforce, which would benefit us; it would have an impact on cost shifting,” Leonard says.

However, the other side of that story could be more people inclined to file for non-work related injuries through the worker’s comp system.

“A lot of people injured over the weekend, they simply hold off until Monday to make sure that it is qualified as a workers’ comp injury (also known as the Monday Morning Syndrome),” he says. “But again, I think the jury is still out. We haven’t had enough experience with the ACA to clearly determine trends that will have either a positive or a negative impact on workers’ comp results.”

A bigger concern is the expectation that Medicare might start reducing its reimbursement rates as a result of ACA rules. If that happens, medical providers could start feeling a pinch, says Harry Shuford, NCCI chief economist.

“Combined with the growth in Medicaid — where reimbursement rates are quite low — there is some concern that providers might start to find ways to get their patients’ injuries covered by workers’ comp, www.insurancejournal.com

a concept called cost shifting,” he says. “That is potentially a bigger concern, but right now the whole thing is uncertain.”

At least for the near term, the ACA is not likely to have a material impact on the workers’ comp market, according to NCCI. The longer-term impact could bring some positive results, Shuford says.

“The most important impact will be the ACA’s efforts on what they are calling comparative effectiveness — essentially doing scientific research to determine best practices for treating injuries and illnesses,” Shuford says.

Shuford says there’s considerable diversity in how doctors treat common workplace injuries.

“Our data shows that for a standard diagnosis, a rotator cuff or a knee injury, if you look across the states the percentage of those injuries that require surgery can vary from one-third to almost two-thirds depending on the state you are in. That suggests that there is not clarity in terms of what is the most appropriate way to treat these injuries. Is surgery a good thing and if so when is it a good thing?”

The initiatives in the ACA on identifying best practices through comparative effectiveness could result in significant positive implications for workers’ comp in the future, Shuford says.

Workplace Safety

One area of the workers’ comp system that has seen tremendous change over the past 30 years and will continue to see change in the future is workplace safety.

“People may not notice but safety in the workplace has continually improved since the 1972 passage of OSHA,” Lynch says. On the other hand, there are still pockets in various industries where bad things happen because people are trying to cut corners.

One trend over the past several years that Lynch says will continue in the future is increased prosecution of the worst offenders. “OSHA is focusing on working with the Justice Department and people are going to jail for doing things that are willfully unsafe in the workplace — where people are getting killed,” he says.

There have also been more advances made in auto safety than anywhere else, he notes. Those efforts have led to safer workers on the roads.

Workplace safety is not something that happens overnight. “It’s a multi-generational effort to change a culture of unsafe workplace practice. To change that takes a long time,” he says. “On one hand we’ve come far, and on the other hand we still have a ways to go with keeping workers safe. We will always have this kind of problem.”

Terrorism Risks Absent Congressional action, the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) of 2007 will expire on Dec. 31. The possible expiration of the federal backstop has driven the issue to the top of priority lists of a wide swath of stakeholders, including the workers’ compensation industry.

“TRIA is absolutely essential to the continuation of worker’s comp insurance,” says MEMIC’s Leonard. “There’s no question, but it has to be renewed in some form.”

“The expiration of the federal backstop would likely result in the scenario that played out both in the insurance industry and across the broader economy in the period between the 9/11 attacks and the enactment of TRIA in 2002,” wrote Tim Tucker, NCCI Washington Affairs Executive, in his continued on page 39 May 5, 2014 INSURANCE JOURNAL-NATIONAL | 21

CLOSER LOOK

Restaurants & Bars The Risks of Dining Out and How Insurance Can Help

By Amy O’Connor

E

ating out may be less work, but that doesn’t mean there is less risk, according to a new report from the Center for Science in the Public Interest (CSPI), which finds that Americans are more than twice as likely to get sick from a foodborne illness or contamination from dining out than they are eating at home.

The report found that 1,610 outbreaks in restaurants sickened more than 28,000 people over a 10-year period. Private homes caused nearly 13,000 cases of foodborne illness from 893 outbreaks. To be classified as an outbreak, clusters of two or more illnesses must result from the same contaminated food source.

The Washington, D.C.-based nonprofit food safety watchdog group compiled the

information by analyzing 10,409 “solved” foodborne disease outbreaks reported to the Center for Disease Control (CDC) between 2002 and 2011. An outbreak is considered “solved” when both the contaminated food and the pathogen have been identified.

The report found that produce was the top category for outbreaks with 667, or 17 percent of total outbreaks, and 23,748 illnesses.

Produce, seafood poultry and beef were the causes of the most solved foodborne illnesses in the past decade.

Sarah Klein, senior staff attorney of the CSPI’s Food Safety Program, says the organization felt the significant number of out-

breaks from restaurants was important for consumers to know.

“It has been clear to us for some time that restaurants do pose an unusually high risk of foodborne illness but this was the first year that we chose to make this a key finding from our outbreak database,” says Klein. “You aren’t just more likely to get sick from a restaurant than at home but you are twice as likely.”

And while states reported 42 percent fewer outbreaks to the CDC in 2011 compared with 2002, Klein says that it is important to note that is not actually because there were fewer outbreaks that occurred but because fewer outbreaks are being reported overall. This makes it difficult to identify and solve outbreaks and provide the most accurate information to consumers.

Klein fiscal issues facing the state agencies that gather and analyze this data have hampered data collection.

“There is a lot of data that nobody knows about because no one has this data, not even the federal government. It is dispersed among the states and among people who choose not to disclose their illness,” says Klein. “It is possible that if we knew about all of these unsolved outbreaks the numbers would look very different. Of all those millions of unknown cases the great majority of those could be coming from private homes or prisons, or anywhere but restaurants. But it is equally conceivable they are coming restaurants.”

Look at a restaurant’s supply sources and staff experience including the chefs and their training.

Managing Restaurant Risk Insurance can play an important role in helping restaurants keep the outbreak numbers down, says Klein.

“The insurance industry can push restaurants to prioritize food safety as a condition of coverage or have insurance rates tied to inspection results, for example,” she says.

22 | INSURANCE JOURNAL-NATIONAL May 5, 2014

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Heidi Strommen, president of ProHost USA in Minneapolis, says the program administrator already has employed these tactics — which is why claims for foodborne illness have been low in the 25 years ProHost has been writing this class. It targets family and fine-dining restaurants and just recently selected XL as its new carrier.

Strommen says they have never had a large claim related to a food contamination incident at one of their restaurants. She attributes this to the restaurants they target using best-practice strategies such as employing highly-trained individuals and chefs, proper food handling and storage.

“We sometimes see an individual claim where a customer says it was caused by something they ate at a restaurant but unless they went to a medical facility and had it confirmed that [their illness] was from the restaurant, they are not compensated under our program,” says Strommen.

Strommen says in most cases, unless a person is violently ill or has a lingering illness they do not obtain medical treatment, which could also be a reason for the underreporting.

Risk management, Strommen agrees, is important in preventing foodborne illness.

ProHost asks for health department grades and history on its applications and uses this information as an indicator of how a restaurant operates.

“For new clients, if they haven’t passed inspections, we would just decline in 99 percent of cases unless there is a good explanation for the failure,” says Strommen. “For current clients, it is harder to keep on top of that information but we do our best to keep up and at renewal time we will try to find out. If it comes to our attention it would result in higher rates or a nonrenewal, especially if there was a claim.”

ProHost also looks at a restaurant’s sup-

ply sources and staff experience — namely the chefs and their training.

“We want an experienced chef running the kitchen. If you have someone who isn’t welltrained and doesn’t understand issues with food prep and food safety, you could have problems,” says Strommen.

Strommen says ProHost also employs loss control experts who go out and meet with restaurant managers on every piece of new business and every so often after that. “They can certainly provide information if they see anything that looks like it could be problematic and pass that information on to the manager,” she says.

Typically, a restaurant that is committed to food safety is one that is also effective at working with its insurer and restaurant associations to help manage exposures, says Strommen.

ProHost offers a package program for restaurants that includes property, general liability, liquor liability, equipment breakdown and crime. There is also the option to purchase a coverage for foodborne illness and contamination that has two components. The first is liability coverage that includes expenses related to medical treatment for if there is an outbreak and it is traced back to the restaurant. The second is business interruption coverage if a restaurant has to be closed because of suspicion or confirmation of food contamination.

The coverage includes loss of income and expenses related to clean up, replacement of contaminated food and medical tests of

‘You aren’t just more likely to get sick from a restaurant than at home but you are twice as likely.’

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employees if they aren’t covered by workers’ compensation. It also covers additional advertising expenses a restaurant might incur to restore its reputation.

Strommen says despite the devastating effects an outbreak can have to a business and all of the benefits food contamination coverage provides, many restaurants go without it. She says agents and brokers should use the coverage as a selling tool when working on new business.

“A lot of restaurants think in terms of liability and not the property exposures so it is important to go over with the business owner what would happen if their restaurant gets closed down for a week or a few days? Many owners don’t think through that part of it,” she says.

May 5, 2014 INSURANCE JOURNAL-NATIONAL | 23

CLOSER LOOK

Restaurants & Bars E&O Insights: Don’t Let Insuring Restaurants and Taverns Give You Heartburn

V

irtually every town in the United States has a restaurant or tavern, so your pursuit of these risks is fairly likely.

Unfortunately, at times these types of risks are not the easiest to place.

Before you take that first step to place the risk, understand that restaurants and taverns have some unique

By Curtis M. Pearsall exposures that must be addressed properly. Failure to do so could spell “heartburn,” otherwise known as an errors and omissions (E&O) claim, for your agency.

24 | INSURANCE JOURNAL-NATIONAL May 5, 2014

Variety of Risks When discussing the restaurant/tavern class of business, there is a tremendous variety of and diversity to the exposures it presents. Thus, it is imperative to fully understand these potential exposures so you can effectively and accurately market the risk.

Oftentimes, with some risks within this class, the excess and surplus lines market may be your only choice. If so, be aware of limitations on the coverages offered.

A Great Source To learn the ins and outs of this class of business, a great place to start is by accessing the information contained within

exposure analysis checklists. These checklists provide solid information and insight, including a questionnaire detailing the pertinent questions to ask by line of business.

These questions include: • Does the risk make deliveries?

• Do they provide valet service?

• What is the level of their security?

• Do they sponsor any athletic events?

Take some time to do your homework before you meet with the prospect. The time spent preparing for the call will help make the call more productive and help you understand the exposures more clearly.

Use Carriers Specializing in this Class For more upscale/family-oriented risks, www.insurancejournal.com

types of risks, including: • Workers’ compensation; • Assault and battery (Most E&S policies exclude this coverage.); • Liquor liability (Does your risk realize its general liability policy does not provide this coverage?); • Property (Attention to detail is extremely important, as evidenced by the above claim.)

It is best to visit the risk and meet with the client to complete the application.

Require the client to review the application and sign it to attest to its accuracy. This alone could have made significant impact on the above claim. As with any risk, documentation is key.

you will probably deal with the admitted marketplace. Because of the specialization of these risks, look to deal with a company that includes this as one of its specialties and has demonstrated solid expertise.

There is a good chance that these carriers’ product offerings may be more comprehensive.

As mentioned, for some risks such as a tavern exposure or an account with poor characteristics or loss history, the excess and surplus lines market may be your only option. The coverage will likely be more basic without the same degree of bells and whistles.

Many E&O claims have focused on the lack of assault and battery coverage, often citing that the establishment owner was unaware this coverage was not provided.

Accurately Portray the Risk As noted by the following claim, knowing the risk and accurately presenting it to the marketplace is of utmost importance.

Less than total honesty can spell trouble.

For example, an agent had a restaurant as a client and had a property policy in place for this client. The carrier non-renewed the risk because of the customer’s loss history.

The agent went to another carrier and uploaded an application into the system.

The client was never asked to review or sign the application.

The carrier accepted the risk and, in the ensuing 12 months, paid $75,000 in claims and is now handling a $1.2 million loss for the restaurant. The carrier is alleging that a number of questions on the application were not answered correctly. The carrier states that had it known the true nature and history of the risk, it would not have insured the restaurant.

The application completed by the agency stated: 1. No prior losses (false); 2. Had not been non-renewed by another carrier (false); and 3. The risk cleaned the ducts and hoods above the stoves on a bi-annual basis (false).

It appears that the agency was negligent in its disclosure of the risk to the carrier.

Policy Checking When you receive the policy from the carrier, check to make sure it reflects the requested coverages. Part of an agent’s defense in E&O litigation involves the client’s duty to read the policy. To reinforce this, when an agent sends the policy, he or she should include a cover letter advising the client to read the policy and contact the agency promptly if there are any questions, 1 IJ Self Serve ad quarter pg.pdf if the client doesn’t understand the policy

For some risks such as a tavern exposure or an account with poor characteristics or loss history, the excess and surplus lines market may be your only option. or if any corrections are needed. If you personally deliver the policy, it is best to still include the letter and bring it to the client’s attention.

By taking the time to learn this industry and your clients’ exposures, your knowledge and expertise, coupled with the right market, can make insuring restaurants and taverns a rewarding undertaking. Without this, it could be your worst case of “heartburn.”

Pearsall is president of Pearsall Associates Inc., a risk management consulting firm specializing helping agents protect themselves. He is also a special consultant to the Utica National Agents E&O program. Phone: 315-768- 1534. Email: curtis@ pearsallassociates.com. Blog: www.agentseotips.

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May 5, 2014 INSURANCE JOURNAL-NATIONAL | 25

IDEA EXCHANGE

Agency Management Numbers Don’t Lie: Agency Best of the Best Contingency and Overrides: Focus On It, but Don’t Rely On It

C

ontingency and override income can be a huge driver of agency value.

2013 was a strong year compared to 2011 and 2012 and according to the 2013-2014 MarshBerry Market & Financial Outlook, contingent income and override earnings were up considerably as a percentage

By Tommy McDonald of commission income.

Unfortunately, far too many agencies are dependent on these streams of income to produce cash flow.

External dependency ratio is an industry metric that measures the relationship of agency cash flow to non-commission sources. It is desirable to maximize outside earnings, but the agency should not rely too heavily on these revenue streams to cover the cash flow needs of their business.

Simply put — contingents and overrides are controlled more by outside sources than by agency management.

A high external dependency ratio indicates that the agency is relying on non-commission income to offset poor

performance of the actual profitability on core agency business (commissions).

Best of the Best agencies conservatively budget for non-core income and build a plan around driving margin on the core revenue stream of an agency — commission and fees.

Where do you stack up against the most balanced agencies in the business?

McDonald is vice president, MarshBerry.

Phone: 440-392-6700 Email: Tommy.McDonald@ MarshBerry.com

Contingents and Overrides for ‘Best of the Best’ Agencies

All Agency Average Best of the Best Difference

Total Commission and Fee Growth 6.8% 15.5% 128%

Total Operating EBITDA % 10.0% 14.9% 49%

Grofit % 16.8% 30.4% 81%

Pre-Tax Profit % 15.1% 23.6% 56%

External Dependency Ratio** 0.58% 0.48% -17%

EBITDA % 18.8% 26.3% 40%

Contingents/Overrides 7.4% 9.5% 28%

Other Income 1.4% 1.9% 36%

Total Operating Profit 10.0% 14.9% 49%

Contingents as a % of P&C Commissions 8.3% 11.3% 36%

Overrides as a % of L&H Commissions 5.8% 6.2% 7%

Dollarizing the Difference ($10M Example) All Agency Average

Best of the Best

Difference

Net Growth (in $) $680,000 $1,550,000 $870,000

Net Operating EBITDA (in $) $1,000,000 $1,490,000 $490,000

Net Grofit (in $) $1,680,000 $3,040,000 $1,360,000

EBITDA (in $) $1,880,000 $2,630,000 $750,000

Contingents/Overrides (in $) $740,000 $950,000 $210,000

Other Income (in $) $140,000 $190,000 $50,000

Contingents as a $ of P&C Commissions (in $) $830,000 $1,130,000 $300,000

Overrides as a $ of L&H Commissions (in $) $580,000 $620,000 $40,000 All percentages calculated as a % of total commission and fees ** Lower performance is better or preferred Source: MarshBerry proprietary financial management system Perspectives for High Performance (PHP) 26 | INSURANCE JOURNAL-NATIONAL May 5, 2014

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IDEA EXCHANGE

The Competitive Advantage Competition & Best Practices Results

A

recent study reviewed in The Economist (Jan. 13, 2014) proved that competition was required to foster business success and progress. This makes sense. Competition is in many ways the “invisible hand” that Adam Smith described as key to capitalist success in 1776.

Few businesses or their leaders are geared to progress on their own.

Instead, the gearing is

By Chris Burand built for achieving a certain speed and then cruising. That is why competition is an absolute requirement.

Competition is the spur or the whip required to overcome inertia. Otherwise, businesses tend to follow Newton’s first law that a body at rest tends to remain at rest unless prodded by some other force. In business, that force is competition.

However, we have a problem. We have a silent killer that evokes the fable of the frog in boiling water. At first the warm water makes the frog feel good and the water warms so slowly, the frog just feels better and better until the instance before death, when he realizes death is imminent.

In business, the most common riches to rags events occur in the tech world.

One minute a company is on the cover of business magazines being touted as solving the world’s problems and a couple years later, its being sold for a dime on the dollar.

Riches to rags stories absolutely do occur in the insurance world — for both companies and agencies. Cover story agency owners sometimes become mediocre producers in someone else’s agency.

Lack of Competition One of the most important proximate causes of agency owners going from riches to rags is the lack of competition. They lacked adequate competition so they began following Newton’s first law of inertia. The industry’s wrong goal of profit, by itself, often exacerbates these agencies’ inertia.

Not only do they lack competition, but

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the owners are continually touted as being the best.

Why do the best need to improve?

I’ve been in many agencies that set the standard for profitability. These are the best-practices agencies everyone looks up to.

These are agencies with no future. They achieve profitability by eliminating growth expenses and hence, growth. The train wreck to which they are driving is blindingly obvious to everyone but them. The only unknown is exactly how far away the approaching train is, because identifying speed by sight in the dark is difficult. Night is a good analogy,

because the human brain does not do a good job of judging catastrophes. The brain is built to judge frequency. When money has been flowing well for a long time, the brain is kind of useless at seeing the oncoming continued on page 28

Hospitality Risks General Liability & Liquor Liability Coverages • Up to 100% Liquor Receipts • Assault & Battery Offered • General Liability Limits Up to $1M / $3M • Liquor Host Liability Limits Up to $1M • Minimum Premiums Vary by Class • Mono-Line Liquor Liability

Preferred Classes • Bars, Taverns, & Night Clubs • Comedy Clubs • Convenience Stores • Gentleman’s Club • Grocery Stores • Hotels • Liquor Distributors & Stores • Restaurant (Fine Dining & Family Style) • Special Events marketing@midman.com 800.800.4007 midlandsmgt.com

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May 5, 2014 INSURANCE JOURNAL-NATIONAL | 27

IDEA EXCHANGE

The Competitive Advantage continued from page 27 not often the case. Instead, the business train because the train is a catastrophe. It model employed is sometimes a result of only happens once. The agency owner will state-sponsored behavior that inhibits, only see it once. and may prohibit competition. In other In our industry, and maybe others, we situations, particular microeconomic enviproactively exacerbate the danger. We do ronments exist in which this by making cover stories of really profitable One of the most import- competition has been minimized. agencies and fast-growth ant proximate causes For example, until insurance companies (the of agency owners going quite recently, many making of heroes of fastMassachusetts’ personal growth companies is espe- from riches to rags is cially perplexing because the lack of competition. lines-focused agencies reported fantastic fast growth of insurance results. The agency companies is a hugely leadowners, having not owned agencies elseing cause of insolvency according to A.M. where, did not know the difference in Best). At agency meetings, especially private Massachusetts’ auto rating laws/regulations network meetings, high-profit agencies are that created their success. When rates exalted. In one organization, they even get are effectively the same, few high-quality the equivalent of a medal. aggressive competitors will innovate. High On the surface this is fine because quality competitors are not interested in the assumption is they worked to earn an environment where their skill brings no high-profit margins. But quite often, this rewards. This is why communism failed. is not the case. Sometimes it is, but I have High-quality firms can deploy their capanalyzed the profitability of hundreds of ital and expertise better elsewhere. When agencies, and the profitability of the most high-quality competitors enter an insurance profitable almost always have a nonreplimarket, they usually do so with lower rates. cable business model. If they created that This is especially true today where certain model, more power to them. But that is

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models absolutely result in lower legitimate auto rates (no major line has achieved more consistent loss ratios in the past five years than personal auto, and consistency is the key indicator of whether rates are being set correctly). When a competitor builds a better model resulting in lower rates, the existing competitors are eliminated. Hot tub to boiler in 36 months.

Agents lose because lower rates mean less commission and consumers shop more, also increasing costs. Lower rates mean less contingency income, too. Uniform rating, on a very rough basis, likely gave agents there 25 percent more profit on their auto books versus agencies elsewhere. They had little reason really to innovate because the competition was limited to the same price!

Sometimes making the situation worse was that agents elsewhere looked up to some of the agencies’ profits thinking they should be able to achieve the same results. They couldn’t because they did not have price protection.

Another example is workers’ comp programs in specific states. These programs effectively create mini-monopolies. Agencies that are smart enough, capable enough or otherwise somehow grab one of these programs often have fantastic profit margins, but they cannot replicate the model into other lines or businesses because those areas have competition. I have seen dozens of agencies try to achieve high-profit margins mimicking these workers’ comp program agencies, and fail because they did not www.insurancejournal.com

know a monopoly was required.

Absence of competition is another example. This does not happen often, but when it does, it is usually in a small, rural location.

Oil boom states are another example, not because competition is minimal but because business is so good for everyone, competition decreases.

High-Contingency Income A different cause of high profitability but with the same result of stasis occurs in certain microenvironments where contingency income is almost always high. For whatever reasons, an agency is located in a spot that is extremely profitable, but the companies’ rating area encompasses many less profitable communities. These fortunate agencies make money hand over fist without even trying, but they do not know they are not trying.

When agencies in any of these situations are touted, or they tout themselves, the key reason they are so profitable is never shared. Instead, these agency owners will often invest in wonderful value-added services and human resource programs. The cover story and the agency owners’ stories will advise these services are the key to their success, when in reality, this is a just a grand rationalization. The damage is done when other agents attempt to emulate these results without knowing they are not only putting the cart before the horse, but the cover agency’s horse is not really even www.insurancejournal.com

the key. I have seen agencies ruin themselves trying to achieve impossible results.

Especially profitable markets can only be protected for so long. Inevitably, pressure builds to decrease rates, open markets,or a company will identify a microenvironment opportunity or the oil market will collapse. When this occurs, the incumbent agency is upset and unprepared. It has been unusually successful judged by profit. Now the rules change, and no one asked its permission. The normal human response is to fight rather than adapt, so from one throne to another, they quickly travel.

Newton’s first law is powerful though.

That is why it is a law. If you have tremendous competition, you don’t have to worry about progressing. For these agencies, the best benchmark is not a profit margin or a growth rate. The best benchmark is progression.

I love watching the summer X Games far more than the Olympics because the athletes always judge fellow competitors by whether the competitor is helping the sport progress by developing new tricks.

The goal is progression more than winning.

That is why old tricks done well might not

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win as much as new tricks not completed perfectly.

When progress is your benchmark, not much else matters because with constant progress, you will get to the top. You will not make the mistake of aiming at impossible goals simply because you do not know the entire story. You will build your organization based on your specific situation because it is your specific situation that matters most, correct? Inertia will not happen. You will always keep raising the bar, and you will be raising the bar for everyone. You will be in control of the bar.

Furthermore, by continually progressing, the competition will have to continually be trying to catch up.

Having goals of achieving best-practice standards is easy and wrong. More powerful but more difficult is a strategy of always getting better regardless of what industry best practices happen to be. If you are interested in a long-term program for constant progression, call me.

Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719485-3868. Email: chris@burand-associates.com.

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May 5, 2014 INSURANCE JOURNAL-NATIONAL | 29

Searching for a workers’ compensation market? Look no further than Insurance Journal’s 2014 Workers’ Comp Directory, a comprehensive listing of intermediaries and carriers offering workers’ compensation coverage throughout the country. The information listed in this directory serves as a resource guide for independent agents and brokers looking for workers’ compensation markets.

Intermediaries and carriers writing workers’ compensation coverage and profiled in this directory submit updated information directly to Insurance 4 All Insurance Services Contact: Nader Kayvan Phone: 818-346-4555 ; Fax: 818-610-2219 Email: info@4allinsurance.net Website: www.4allinsurance.net ■ Markets Offered: Excess Workers’ Comp, Health Ins, HMO, Managed Care, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: Any Limit Requested ■ Brokered Business: Accepted ■ States Entered in: AZ CA FL NV OR TX UT VA WA ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Carriers A.I.I. Insurance Brokerage of Mass., Inc. Contact: Erina Connors Phone: 508-476-1990 ; Fax: 508-476-1991 Email: info@agencyint.com Website: www.agencyint.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: CT MA NH ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Magna Carta, Tower Group

Access Point Insurance Services

Contact: Customer Service Phone: 949-760-0595 ; Fax: 949-760-0591 Email: submissions@accesspointins.net Website: www.accesspointins.net ■ Markets Offered: Workers’ Comp – Standard, High Mods, PEO Plans, USL&H ■ Phone Inquiries: Accepted ■ Minimum Premium: $25,000 ■ Brokered Business: Accepted ■ States Entered in: AZ CA HI NV ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Carriers

Journal. We make every attempt to ensure the accuracy of all information listed in this directory. You may also view Insurance Journal’s Workers’ Comp Directory online at: www.insurancejournal.com/directories. Also visit that link to submit a listing for future workers’ compensation directories, or e-mail Kristine Honey at: khoney@insurancejournal.com.

We hope you find the 2014 Workers’ Comp Directory to be a useful tool when searching for markets. To comment on this directory, or any other Insurance Journal resource, please e-mail: editorial@insurancejournal.com.

Accident Insurance Services, Inc. Contact: Beckie Ervin Phone: 972-991-0413 ; Fax: 972-788-5108 Email: beckieervin@ais-insurance.net Website: www.ais-insurance.net ■ Markets Offered: Excess Workers’ Comp, 24 Hour Policy, Workers’ Comp, Occupational Accident ■ Phone Inquiries: Accepted ■ Minimum Premium: $150 ■ Brokered Business: Accepted ■ States Entered in: TX ■ Carriers Represented: American Hallmark ACE Risk Management Phone: 215-640-4642 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: With: ESIS, Inc. and other Third Party Administrators & Risk Management Providers Agency Intermediaries, Inc. Contact: Erina Connors Phone: 203-453-2859 ; Fax: 203-453-8859 Email: info@agencyint.com Website: www.agencyint.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: CT MA NH RI ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Magna Carta, Tower Group

30 | INSURANCE JOURNAL-NATIONAL REGION May 5 , 2014

Agency Resources Contact: Florencia Robledo Phone: 866-454-9676 ; Fax: 973-261-9202 Email: florencia.robledo@agencyresources.com Website: www.agencyresources.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: $1M / $1M / $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted Agostini Surplus Contact: Caesar Serrano Phone: 800-922-7283 ; Fax: 619-593-2008 Email: caesar@agostinisurplus.com Website: www.agostiniwholesale.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: AZ CA CO MD NE NM NV OR PA TN TX UT ■ Admitted Status: Admitted All Risks, Ltd. Contact: Hollie Hobbie Degutis Phone: 800-366-5810 ; Fax: 410-828-8179 Email: hhobbie@allrisks.com Website: www.allrisks.com ■ Markets Offered: Workers’ Comp, USL&H, DBA & MEL ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by class ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Over 14 carriers represented

www.insurancejournal.com

2014 Workers’ Compensation Directory Alternative Market Services, Inc. Phone: 855-924-1597 ; Fax:916-751-5911 Email: info@amsboss.com Website: www.alternativemarketservices.com ■ Markets Offered: Commercial Insurance, Health Insurance, PEO, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: N/A ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: All Carriers Alternative Risk Transfer Contact: Rick Kirsch Phone: 321-281-0763 ; Fax: 866-481-9969 Email: rkirsch@altrisktrans.com Website: www.altrisktransfer.com ■ Markets Offered: Captives, Excess Workers’ Comp, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: TBD ■ Limits: TBD ■ Brokered Business: Accepted ■ States Entered in: All States

Always Affordable Insurance Solutions Contact: Ashley Liddle Phone: 657-900-2050 ; Fax: 657-900-2051 Email: ashley@alwaysaffordableins.com Website: www.alwaysaffordableins.com ■ Markets Offered: 24 Hour Policy, Excess Workers’ Comp, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: All States except AK & HI ■ Admitted Status: Admitted & Non-admitted AMC Insurance Services Contact: Steve Strange Jr. Phone: 855-458-2835 ; Fax: 501-932-3135 Email: submissions@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 ■ Admitted Status: Admitted ■ Carriers Represented: Berkelynet, US fire, AM Trust, AIG, Amerisafe American Team Managers Contact: Jackie Navarro Phone: 714-414-1233 ; Fax: 714-414-1299 Email: jackie@atminsurance.com Website: www.atminsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $500 ■ Limits: $1,000,000/$2,000,000 ■ Brokered Business: Accepted ■ States Entered in: AZ CA ID KS NE NM NV OK OR TX UT WY ■ Admitted Status: Admitted ■ Carriers Represented: ATower Group, Republic Indemnity, Travelers, AIG, Employers, AmTrust

AMERISAFE

Contact: Customer Service Phone: 800-897-9719 ; Fax: 800-450-1091 Email: aiic-mktg@amerisafe.com Website: www.amerisafe.com ■ Markets Offered: Hazardous Workers’ Comp Carrier ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: Most States

AMIS/Alliance Marketing & Insurance Services Contact: Karen Metcalf Phone: 800- 843-8550 ; Fax: 800-573-8550 Email: kmetcalf@amiscorp.com Website: www.amisinsurance.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 ■ Admitted Status: Non-admitted ■ Carriers Represented: Travelers AmTrust North America Contact: Customer Service Phone: 877-528-7878 ; Fax: 800-487-9654 Email: marketing@amtrustgroup.com Website: www.amtrustnorthamerica.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Alliance With: Multiple regional alliances

Appalachian Underwriters, Inc. Contact: Jeff Hensley Phone: 888-376-9633 ; Fax: 888-871-7644 Email: marketing@appund.com Website: www.appund.com ■ Markets Offered: USL&H, Workers’ Comp, New Ventures/No Prior Eligible ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: Any Size ■ Brokered Business: Accepted ■ States Entered in: All States except OH, ND, WA, WY ■ Admitted Status: Admitted ■ Carriers Represented: Multiple A.M. Best ‘A’ Rated Carriers. Exclusive Programs for Healthcare, Trucking and Construction Risks.

Applied Underwriters Applied Underwriters, Inc. Insurance Journal Cover Tip

Live 7.875” x 7.5” Phone: 877-234-4450 ; Trim Fax: 877-234-4452 8.125” x 7.75” Email: sales@auw.comBleed 8.375”x 8” Website: www.auw.com ■ Markets Offered: Workers’ Comp, EPLI, E&O, D&O, Payroll ■ Phone Inquiries: Accepted ■ Minimum Premium: N/A ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted Applied Underwriters

AU Golf IJ Cover Tip

Contact: Sheila Gallagher

AmWINS Group, Inc. - 70 Offices Nationwide See Website for Locations, HQ - Charlotte, NC Contact: Marketing Department Phone: 704-973-3489 ; Fax: 704-943-9000 Email: marketing@amwins.com Website: www.amwins.com ■ Markets Offered: Excess Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: Various ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Excess WC’ Carriers

P: 707-395-0645

Email: sgallagher@auw.com

For more info, check out our ad on page 2 (National) & on the Back Cover

AmWINS Program Underwriters Contact: Matt McCue Phone: 717-214-7622 Email: matt.mccue@amwins.com Website: www.amwins.com/apu ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Various AM Best A- Rated or Higher

Arrowhead General Insurance Agency, Inc.

Apex Insurance Services Contact: Robert Hughes Phone: 210-340-8985 ; Fax: 210-340-8986 Email: hughes@apexinsurance.com Website: www.apexinsurance.com ■ Markets Offered: Excess Workers’ Comp, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: Statutory and high excess ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Various National & Regional Carriers

Contact: Marketing Dept.

Phone: 800-669-1889 ; Fax: 619-881-8695 Email: MarketingInfo@ArrowheadGrp.com Website: www.ArrowheadGrp.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by Carrier ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Multiple “A” rated carriers Artex Risk Solutions, Inc. Contact: Phillip Giles Phone: 910-295-9800 Email: phil_giles@artexrisk.com Website: www.artexrisk.com ■ Markets Offered: Excess WC, Workers’ Comp, Guaranteed Cost & Alternative Risk (Group Captives) ■ Phone Inquiries: Accepted ■ Minimum Premium: $100,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Several All “A” rated or higher

For more info, check out our ad on page 8 (South Central) www.insurancejournal.com

May 5, 2014 INSURANCE JOURNAL-NATIONAL REGION | 31

2014 Workers’ Compensation Directory

Atlas General Insurance Services

Contact: Marketing Dept.

Phone: 877-662-8527 ; Fax: 619-814-8914 Email: info@atlas.us.com Website: www.atlas.us.com ■ Markets Offered: Workers’ Comp, Contractors’ General Liability, Non-Construction General Liability, BOP and Commercial Package Policies, Garage and Dealers, Difference in Conditions (DIC) ■ Phone Inquiries: Accepted ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Multiple “A” rated carriers

For more info, check out our ad on page 4 (West) or page 3 (Southeast & East) Berkshire Hathaway Homestate Companies Contact: Customer Service Phone: 888-495-8949 ; Fax: 415-675-5482 Email: marketingsf@bhhc.com Website: www.bhhc.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted

Boston Insurance Brokerage, Inc.

Contact: Keith Driscoll – 617-556-7031 Contact: Monica Wojnilo – 617-556-7053 Website: www.bostonbrokerage.com ■ Markets: Guaranteed Cost, Excess, Rating Plans ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: Standard ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: AIM Mutual, Atlantic Charter, Amerisafe, AmTrust, Axiom, Chartis, Crum & Forster, Employers, FirstComp, Guard, Hartford, Munich RE (V3), RTW, Republic Indemnity, Sentry, Tangram (Prosight), and Travelers.

The workers comp division works with agencies across the country helping to place mono-line coverage. Boston Insurance Brokerage has relationships with markets to write retail, wholesale, service, manufacturing, construction, home healthcare & social service risks. Whether your agency has a small single state risk or multi-state complex account, we are able to offer the expertise & professionalism to place your coverage.

Breckenridge Insurance Services Contact: Virgil Anderson Phone: 559-221-2050 Email: vanderson@breckis.com Website: www.breckis.com ■ Markets Offered: Workers’ Comp, MGU, Wholesale Brokerage ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: AmTrust, Berkshire Hathaway, Chartis/AIG, ICW, First Comp, Republic Indemnity, Torus, Hartford, CNA

Brownyard Group Contact: Jennifer Brownyard 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 ■ Admitted Status: Admitted

Brownyard Programs, Ltd.

Contact: Pam Van Cott Phone: 631-581-9300 ; Fax: 631-581-9385 Email: pvancott@brownyardprograms.com Website: www.brownyardprograms.com ■ Markets Offered: Workers’ Comp for Security Guards, Investigators, Alarm Companies ■ Phone Inquiries: Accepted ■ Minimum Premium: $7,500 ■ Limits: $1M / $1M / $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: QBE & AIG Companies Specialty Insurance - GL, Professional, Umbrella, Auto & WC Programs for the Private Security Industry including security guard, private investigation, background screening, alarm, and other electronic security companies.

Builders & Tradesmen’s Ins. Services, Inc. Contact: Michelle Losee Phone: 916-772-9200 ; Fax: 916-772-9292 Email: mlosee@btisinc.com Website: www.btisinc.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: AR AZ CA CO IA ID KS LA MN MO MT NE NM NV OR SD TX UT ■ Admitted Status: Admitted ■ Carriers: AmTrust, ICW, CNA, Travelers, Zenith C C Roy Insurance Brokers, Inc. Contact: Sheri Clewett Phone: 800-443-6566 ; Fax: 925-460-9484 Email: sheric@ccroybrokers.com or QUOTE@ccroybrokers.com Website: www.artisanWC.com ■ Markets Offered: CA Artisan Contractors Workers’ Compensation. Accepting New Ventures, First Time Employers and Gaps in Coverage.

■ Phone Inquiries: Accepted - Email preferred ■ Minimum Premium: $2,500 ■ Maximum Premium: $25,000 ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted ■ Carriers: Preserver (Tower Group) and AmTrust Care Providers Insurance Services, LLC Contact: Priscilla Archer Phone: 800-761-7072 Ext. 1313 ; Fax: 800-224-7145 Email: parcher@nsminc.com Website: www.ins-cps.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: None ■ Limits: EL $1M ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Texas - Open Safety Group accessed through Texas Mutual

32 | INSURANCE JOURNAL-NATIONAL REGION May 5, 2014

Chamber Insurance Agency Services Contact: John Ferreira Phone: 973-669-2309 ; Fax: 973-731-2288 Email: jpferreira@chamberagent.com Website: www.chamberagent.com ■ Markets Offered: Excess Workers’ Comp, USL&H, WC ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Various ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Chartis, CNA, Hartford, Travelers, MunichRe Charity First Insurance Services, Inc. Contact: Riley Binford Phone: 800-352-2761 ; Fax: 415-536-4033 Email: riley_binford@charityfirst.com Website: www.charityfirst.com ■ Markets Offered: Workers’ Comp, Nonprofits Only ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted in most states ■ Carriers Represented: Travelers Insurance Company CID Insurance Programs, Inc. Contact: Caesar Serrano Phone: 800-922-7283 ; Fax: 619-593-2008 Email: caesar@cidinsurance.com Website: www.cidinsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: AZ CA CO MD NE NM NV OR PA TN TX UT ■ Admitted Status: Admitted ■ Carriers Represented: Over 25 Insurance companies

Commercial Sector Insurance Brokers Contact: Carl Thompson Phone: 205-776-2625 ; Fax: 205-776-1619 Email: cthompson@comsectorins.com Website: www.comsectorins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: $1M/$1M/$1M ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Chartis, Am Trust, Crum & Forester, Guarantee Insurance Co., Munich, Zurich

Commercial Sector is a National Wholesaler. We specialize in assisting retail agents solve P & C problems, including Workers’ Comp.

www.insurancejournal.com

2014 Workers’ Compensation Directory Compass Insurance Group of Agencies Contact: Paul Laufer Phone: 818-507-1980 ; Fax: 818-545-3818 Email: plaufer@compasseands.com Website: www.compasseands.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted ■ Carriers Represented: 20+ Markets

Construction Suppliers Association Self Insured Fund Contact: Blake Cone Phone: 678-674-1860 Email: blakecone@gocsa.com Website: www.csasif.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Limits: $2M/$2M/$2M ■ Brokered Business: Accepted ■ States Entered in: GA Continental Brokers, Inc. Contact: Collier Simpson Phone: 866-386-4136 ; Fax: 601-898-4793 Email: cs@continentalbrokers.biz Website: www.continentalbrokers.biz ■ Markets Offered: Health Insurance, Managed Care, HMO, Short Term Medical, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: CNA, Hartford, Assurant, BCBS (some states) United HealthCare, Colonial Continental Risk Insurance Services Contact: Jeana Ramos Phone: 866-699-2747 ; Fax: 209-365-6040 Email: jeana@continentalriskins.com Website: www.continentalriskins.com ■ Markets Offered: USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: AK AR AZ CA CO FL GA ID NC NV NY OR TX UT WA ■ Admitted Status: Admitted & Non-admitted Continental Underwriters, Inc. Contact: C. Preston Herrington, III Phone: 804-643-7800 ; Fax: 804-643-5800 Email: preston@contund.com Website: www.contund.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: 500/500/500 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Multiple Corporate Risk Services, LLC Contact: Justin Mills Phone: 479-271-7475 ; Fax: 479-271-7141 Email: jmills@mrmsi.com Website: www.midwestrisk.net ■ Markets Offered: Workers’ Comp, Excess WC ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: We offer various carriers for Excess and Guaranteed Cost based on business classification.

www.insurancejournal.com

Costanza Insurance Agency, Inc. Contact: Brian Costanza Phone: 800-346-0942 ; Fax: 972-991-2139 Email: b.costanza@cia-tx.com Website: www.costanzainsurance.com ■ Markets Offered: Workers’ Comp, GL, Comm Auto, Crime, EPL, EBL, Umbrella ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Carriers Represented: Zurich Insurance Co. CoverXSpecialty Contact: John Bures 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: $250 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Non-admitted ■ Carriers Represented: Travelers Empire Pacific Sovereign, LLC Contact: Gary Hargis Phone: 877-535-0888 ; Fax: 503-924-2889 Email: gary.hargis@empirepac.com Website: www.sovereignbrokers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $3,000 ■ Limits: $1M/$1M/$1M ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted

Employers Assurance Company Contact: Customer Service Phone: 888-682-6671 ; Fax: 800-371-8204 Email: customerservice@employers.com Website: www.employers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by State ■ Limits: Varies by State ■ Brokered Business: Accepted ■ States Entered in: Most States Employers Compensation Insurance Company (ECIC) Contact: Customer Service 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 ■ Limits: Varies by State ■ Brokered Business: Accepted ■ States Entered in: AZ CA CO FL ID IL MT NV OR PA TX UT

Empire Underwriters, LLC

Contact: Workers Comp Underwriting Toll Free: 800-758-8113 Phone: 813-448-9300 ; Fax: 813-448-9310 Email: quotes@empireunderwriters.com Website: www.empireunderwriters.com ■ Markets Offered: Standalone Workers’ Comp, Staffing Workers Comp, Alternative Risk - PEO ■ Phone Inquiries: Accepted ■ Minimum Premium: $4,000 ■ Brokered Business: Not Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Zurich, AIG, Guard, Benchmark, Lloyds of London, Endurance and many others.

Empire Underwriters is a National Insurance Wholesaler, Excess and Surplus lines facility and Program Manager. Our organization is dedicated to the success of agents and brokers nationwide.

Employer’s Comp Associates, Inc. Contact: Aaron Johnson Phone: 972-386-0150 ; Fax: 972-386-6350 Email: ajohnson@empcompinc.com Website: www.EmpCompInc.com ■ Markets Offered: Workers’ Comp, Workers’ Comp Alternative ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Berkshire Hathaway, Great American, American Hallmark, Texas Mutual and many others.

EMPLOYERS focuses on workers’ compensation insurance and services for America’s small businesses. We provide targeted insurance solutions for independent, entrepreneurial companies.

With roots stretching back to 1913, EMPLOYERS has the experience, financial stability, knowledge and resources to provide the coverage and special services that America’s small businesses need. (The next 4 listings are us!)

Employers Insurance Company of Nevada (EICN) Contact: Customer Service 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: $750 ■ Limits: $500k, $1M, $2M ■ Brokered Business: Accepted ■ States Entered in: NV Employers Preferred Insurance Company Contact: Customer Service Phone: 888-682-6671 ; Fax: 800-371-8204 Email: customerservice@employers.com Website: www.employers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by State ■ Limits: Varies by State ■ Brokered Business: Accepted ■ States Entered in: Most States GSS Insurance Services, LLC Contact: Greg Santolucito Phone: 760-947-5500 ; Fax: 909-494-7854 Email: info@gssinsurance.com Website: www.gssinsurance.com ■ Markets Offered: Workers’ Comp, GL, Commercial Auto, BOP, Bonds & Packages ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $500 ■ Limits: $1,000,000/1,000,000/1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted & Non-admitted

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2014 Workers’ Compensation Directory GUARD Insurance Group Phone: 570- 825-9900 ; Fax: 570- 823-5930 Email: csr@guard.com Website: www.guard.com ■ Markets Offered: Workers’ Comp & related P&C lines targeting small- to mid-sized accounts ■ Phone Inquiries: Accepted ■ Minimum Premium: No Standard Minimum ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: 38 States plus DC Hamond Safety Management, LLC Contact: Rick Yu Phone: 516-488-2800 Ext. 4219 ; Fax: 516-488-2167 Email: Ryu@hamondgroup.com Website: www.hamondgroup.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: Unlimited by state statute ■ Brokered Business: Accepted ■ States Entered in: NY ■ Admitted Status: Admitted ■ Carriers Represented: NYSIF Houston International Insurance Group Contact: Cooper Wallach Phone: 713-935-7414 ; Fax: 713-467-8238 Email: cwallach@hiig.com Website: www.hiig.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $100 ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: TX ■ Admitted Status: Admitted ■ Carriers: Great Midwest Insurance Company ICW Group Insurance Companies Contact: Taunya Moen Phone: 800-877-1111 Email: enterprisemarketingteam@icwgroup.com Website: www.icwgroup.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $2,500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: CA FL IL NC NV PA SC TX WI ■ Admitted Status: Admitted ■ Alliance With: MEDEX Insurance Center Special Risks, Ltd. Contact: Ludmila Koval Phone: 888-773-7475 ; Fax: 413-781-0050 Email: lkoval@specilarisksltd.com Website: www.specialrisksltd.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $350 ■ Brokered Business: Not Accepted ■ States Entered: CT MA ME NH NY RI VT ■ Admitted Status: Admitted ■ Carriers: The Hartford, Guard Insurance Group International Excess Companies Contact: Kenneth Kukral Phone: 216-797-9700 Ext. 2079 ; Fax: 888-291-1382 Email: kennethkukral@intlxs.com Website: www.intlxs.com ■ Markets Offered: Excess Workers’ Comp, PEOs, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by class, as low as $250 ■ Limits: Statutory + increased limits & excess limits ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic (monoline OH stop gap available) ■ Admitted Status: Admitted ■ Carriers Represented: Various

IPA Risk Management, LLC Contact: Greg or Chase Phone: 201-797-1084 x 201 ; Fax: 201-797-1076 Email: c.heitmann@ipariskmanagement.com Website: www.ipariskmanagement.com ■ Markets Offered: Health Insurance, HMO, Managed Care, PEO, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $25,000 ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA CT DE FL MD NC NJ NY PA SC TX ■ Admitted Status: Admitted & Non-admitted ■ Alliance With: Yes - health benefits are integrated with workers’ comp benefits Ironwood Brokers & Insurance Marketing Contact: Michelle Newsom Phone: 949-487-0057 ; Fax: 949-271-4800 Email: mnewsom@ironwoodbrokers.com Website: www.ironwoodbrokers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA TX ■ Admitted Status: Admitted ■ Carriers Represented: ICW, AIG, Everest, Zurich, Munich, Travelers, Republic Underwriters, Employers, Southeast Personnel Irving Weber Associates, Inc. Contact: Adam Weber Phone: 800-243-1811 ; Fax: 888-622-0414 Email: Info@iwains.com Website: www.iwains.com ■ Markets Offered: All Lines including Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Various

Izzo Insurance Services, Inc. Contact: Mike Jones Phone: 800-800-1704 ; Fax: 630-582-2803 Email: MJones@IzzoInsurance.com Website: www.IzzoInsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: ACE, AIG, AmTrust Companies, BerkleyNet, CNA, Employers Ins. Group, Hartford, ICW Group, Meadowbrook, Zenith Insurance, Zurich Insurance J.W. Terrill Inc. Contact: Duke Niedringhaus 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

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Jimcor Agencies Contact: Jerry Zaloom Phone: 201-573-8200 Ext. 1201 ; Fax: 201-573-8820 Email: jzaloom@jimcor.com Website: www.jimcor.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,000 ■ Limits: Any Applicable per State ■ Brokered Business: Accepted ■ States Entered in: All Nonmonopolistic States ■ Admitted Status: Admitted ■ Carriers Represented: Chartis, Travelers, CNA, Tower, Crum & Forster, Amtrust, Magna Carta King Insurance Support Systems Contact: Laura Fondarella Phone: 800-488-4096 ; Fax: 949-488-2259 Email: Marketing@kinginsuranceca.com Website: www.kinginsuranceca.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: Western States ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust, Travelers LIG Marine Managers Contact: Karen Tischler 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: $10,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Various Loveland & Smart Ins. Services, Inc. Contact : Joe Loveland Phone: 916-844-0349 ; Fax: 916-362-5595 Email: Joe@lovelandsmart.com Website: www.lovelandsmart.com ■ Markets Offered: Excess WC for Self Insured Entities & Excess GL & Auto Liab for Pubic Entities ■ Phone Inquiries: Accepted ■ Minimum Premium: $20,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: AR AZ CA CO GA ID IL LA MI MO MS NV NY OH OK OR PA UT WA ■ Admitted Status: Admitted ■ Carriers Represented: All Excess WC Carriers LowRateWorkComp Contact: Paul Farhood Phone: 850-625-5190 ; Fax: 888-625-2628 Email: gotcomp@yahoo.com Website: www.LowRateWorkComp.com ■ Markets Offered: Health Insurance, Payroll, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $4,000 ■ Brokered Business: Accepted ■ States Entered in: All States except WA ■ Alliance With: 4 PEOs – Writing All classes depending on state.

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2014 Workers’ Compensation Directory MarketScout Contacts: Brian Barrilleaux, SVP, Broker - 972-934-4204 Dan Fouts, Broker - 972-934-4231 Chris Kerr, VP, Broker - 972-934-4206 Raeshel Parker, Broker - 972-934-4269 Email: contactus@marketscout.com Fax: 972-934-4299 ■ Markets Offered: Health Ins., Managed Care, Trucking, USL&H, Work Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Over 20 National, Regional & Specialty Carriers Maverick Commercial Insurance Services Contact: Mario Gomez Phone: 818-223-0011 ; Fax: 818-223-0012 Email: mariogomez@maverickinsure.com Website: www.maverickinsure.com ■ Markets Offered: Workers Comp, Large Deductible & Retro Programs, Excess Workers’ Comp, USL&H, PEO ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Limits: $1mil/$1mil/1mil ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers: AIG, QBE, Zenith, Berkshire/Cypress, AmTrust/Security National/Wesco, Technology Ins., Applied Underwriters/California Insurance Company, Companion, Everest, Starr Indemnity;

Tower & Preserver Insurance, Zurich, Safety National, Guarantee Insurance Co, Republic Underwriters, Old Republic, Various PEO markets.

Maxim Insurance Group Contact: Scott Carde Phone: 813-689-5105 ; Fax: 813-354-2336 Email: mail@maximinsurancegroup.com Website: www.maximinsurancegroup.com ■ Markets Offered: Managed Care, USL&H, Workers’ Comp, Repatriation & Foreign Coverage ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,500 ■ Limits: Statutory and up to $2M ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted ■ Carriers: Ameritrust, AmTrust, Associated Industries, Bridgefield Casualty, Bridgefield Employers, Business First, AIG, OptaComp, Retail First, Rochdale, Security National, Star, Technology, Wesco, Williamsburg McClelland and Hine, Inc. Contact: Amicia Hine Phone: 210-293-6240 ; Fax: 210-293-6318 Email: amicia@mhi-tx.com Website: www.mhi-tx.com ■ Markets Offered: Occ. Acc., Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: TX ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Travelers, Hartford, Charits, Texas Builders, AmTrust, Zenith McLeckie Insurance Group Contact: Bill McLeckie Phone: 903-897-9090 ; Fax: 760-462-1696 Email: bill@mcleckie.com Website: www.mcleckie.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Brokered Business: Accepted ■ States Entered in: AR CA FL LA NV OK TX WA ■ Admitted Status: Admitted ■ Carriers Represented: Travelers and various others.

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Midwestern Insurance Alliance, LLC Contact: Robert Etzler Phone: 502-429-9990 ; Fax: 502-426-7067 Email: retzler@mwiainsurance.com Website: www.midwesterninsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA IN KY MO TN ■ Admitted Status: Admitted

Meadowbrook Insurance Group Contact: Phillip Gajewski Phone: 248-358-1100 ; Fax: 248-692-0516 Email: pgajewski@meadowbrook.com Website: www.meadowbrook.com ■ Markets Offered: Excess Workers’ Compensation, Specialty/Niche Programs, Workers’ Compensation ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by Program ■ Limits: Varies by Program ■ Brokered Business: Yes; Varies by Program ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Star Insurance Company, Williamsburg National Insurance Company, Ameritrust Insurance Corporation, ProCentury Insurance Company

NBIS Contact: Peter Bellnier Phone: 770-257-1777 ; Fax: 770-257-1500 Email: contactus@nbis.com Website: www.NBIS.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: 100/500/100 500/500/500 1mm/1mm/1mm ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted all states ■ Carriers Represented: Tower Insurance Group Networked Insurance Agents Contact: Tam Duong Phone: 800-682-8476 ; Fax: 888-843-2535 Email: tam.duong@networkedins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $250 ■ Limits: $1M / $1M / $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Sequoia, Hartford, Travelers, Preferred Employers, Guard, Tower, Meadowbrook, Everest, CNA, First Comp, Republic, Employers, Fireman’s Fund, Golden Eagle, ACE, Chartis, Chubb

MEMIC Group

Contact: Wendy Bowden Phone: 207-791-3370 ; Fax: 207-482-4173 Email: wbowden@memic.com Website: www.memic.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Varies ■ States Entered in: All Non-monopolistic States ■ Admitted Status: Admitted 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.

Midlands

Oklahoma City, OK & Addison, TX Phone: 800-800-4007 ; Fax: 405-840-5432 Email: marketing@midman.com Website: www.midlandsmgt.com ■ Markets Offered: Excess Workers’ Comp, Primary Workers’ Comp, Texas Non-Subscriber, Property & Casualty Lines ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: AM Best “A” Rated Carriers

For more info, check out our ad on page 27 (National)

Midwest Employers Casualty Company Contact: Renée Lunceford Phone: 636-449-7022 ; Fax: 636-449-7199 Email: rlunceford@mwecc.com Website: www.mwecc.com ■ Markets Offered: Excess of Loss Workers’ Compensation and Reinsurance, Self-Insured Bonds ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by risk ■ Limits: Up to Statutory ■ Brokered Business: Accepted ■ States Entered in: All States, District of Columbia ■ Admitted Status: Admitted

Norman-Spencer Agency, Inc. Contact: Corky Breeden Phone: 937-432-1631 ; Fax: 937-432-1635 Email: corkybreeden@norman-spencer.com Website: www.norman-spencer.com ■ Markets Offered: Excess Workers’ Comp, USL&H, Workers’ Comp, Dividend Work Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Zenith, Amerisafe, AmTrust Number One Insurance Agency, Inc. Contact: Barbara Lobdell Phone: 508-634-7362 ; Fax: 508-634-2930 Email: blobdell@massagent.com Website: www.massagent.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $100 ■ Limits: 100 / 500 / 100 + ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust Group, Norfolk & Dedham Group, The Hartford

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2014 Workers’ Compensation Directory Omega Insurance Solutions Contact: Keith Steverson Phone: 866-997-0711 ; Fax: 888-611-9598 Email: keith@omega4agents.com Website: www.Omega4agents.com ■ Markets Offered: USL&H, Workers’ Comp, GL, Commercial Auto, Small BOPs ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: WC standard limits or increased to 1M ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: 17 WC carriers/4 PEOs – Writing most classes depending on state.

Oryx Insurance Brokerage, Inc. Contact: Tim Cappellett Phone: 607-724-0173 ; Fax: 607-724-7266 Email: tcappellett@oryxinsurance.com Website: www.oryxinsurance.com ■ Markets Offered: Workers’ Compensation, GL, BA ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Brokered Business: Not Accepted ■ States Entered in: CT DE IL MD NJ NY PA VA VT ■ Admitted Status: Admitted ■ Carriers Represented: AIG, Amerisafe, AmTrust, CV Starr & BerkleyNet

Pacific Excess Insurance Marketing

Contact: Barry Colburn Phone: 800-222-5582 ; Fax: 714-228-7899 Email: Marketing@pacificexcess.com Website: www.pacificexcess.com ■ Markets Offered: Workers’ Comp, All Property & Casualty Risks ■ Phone Inquiries: Accepted ■ Minimum Premium: As Low As $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: CA AZ NV ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust & The Zenith Pacific Excess Insurance Marketing is a Wholesaler/General Agent with access to many Standard, Surplus Lines and Workers’ Compensation Markets.

Patriot National Insurance Group Contact: Nicole Brewer Phone: 954-670-2900 ; Fax: 954-252-3758 Email: marketing@Pnigroup.com Website: www.pnigroup.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted PBS Insurance Underwriting Corporation Contact: Jack Smith Phone: 502-244-1056 ; Fax: 502-254-1056 Email: pbs@pbsinsurance.com Website: www.pbsinsurance.com ■ Markets Offered: Workers’ Comp, USL&H ■ Phone Inquiries: Not Accepted ■ Minimum Premium: None ■ Limits: No min.

■ Brokered Business: Accepted ■ States Entered in: All States except AK ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Multi carriers

PEO Source Contact: Joanne Ziegler Phone: 954-294-1432 ; Fax: 561-828-6128 Email: peosourcebobz@gmail.com Website: www.PEO-Source.com ■ Markets Offered: Workers’ Comp, Health Insurance, USL&H, Payroll ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: CA FL GA MI NJ NY PA SC TX Phoenix Risk Management Insurance Services, Inc. Contact: Michele Mayer Phone: 877-579-1500 ; Fax: 877-579-1600 Email: mmayer@phoenixrmis.com Website: www.phoenixrmis.com ■ Markets Offered: Workers’ Comp, Professional Liability & General Liability ■ Phone Inquiries: Accepted ■ Minimum Premium: $3,500 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: CompWest, Zurich, AIG, Companion, First Comp, AmTrust, Everest, Star, Travelers, Meadowbrooks, Midwest Employers and Safety National.

PMC Insurance Group Contact: Caragh Frye 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: $2,500 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Carriers Represented: Chartis, Amtrust, BerkleyNet, Hartford, Guard, Tower, Seabright, Munich Re

Preferred Property Programs

Contact: Ken Hager Phone: 888-548-2465 ; Fax: 732-946-0547 Email: info@ppp-quotes.com Website: www.ppp-quotes.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: 100/500/100 ; 500/500/500 ; 1,000/1,000/1,000 ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted ■ Carriers Represented: A- X rating by AM Best Red Rock Financial Group, Inc. Contact: Lawrence Levine Phone: 1-877-572-6221 x 501 ; Fax: 1-877-895-9011 Email: info@redrockfg.com Website: www.redrockfg.com ■ Markets Offered: Workers’ Comp (High Risk) Roofers, Framers, and Excavators, and many other class codes.

Health Insurance, Payroll ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: Majority of states 39 ■ Admitted Status: Admitted & Non-admitted

36 | INSURANCE JOURNAL-NATIONAL REGION May 5, 2014

Risk Alternatives & Management Contact: Shane Maloney Phone: 770-424-5770 ; Fax: 770-424-5774 Email: shane@ram-insurance.com Website: www.ram-insurance.com ■ Markets Offered: 24 Hour Policy, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: DNIC, Lion, AmTrust, Munich Reed, Zurich, Amerisafe, SE Leasing, Companion, AIG, Berkshire Hathaway, QBE

Risk Innovations, LLC Contact: Jeff Sandy Phone: 816-251-1608 ; Fax: 866-262-5802 Email: jsandy@riskinnovationsllc.com Website: www.riskinnovationsllc.com ■ Markets Offered: Excess Workers’ Comp, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: State min.

■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Over 20 Risk Placement Services, Inc. Contact: Patrick Edwards Phone: 312-803-6334 ; Fax: 312-803-6309 Email: Patrick_Edwards@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 ■ Admitted Status: Admitted ■ Carriers Represented: ACE, AIG, CNA, Hartford, Safeco & Zurich Risk Transfer Holdings Contact: Starlene Chupp Phone: 866-481-9363 ; Fax: 866-481-9969 Email: schupp@risktransferinc.com Website: www.risktransfer.com ■ Markets Offered: EPLI, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $50,000 ■ Limits: $100K / $500K / $100K ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Alliance With: Multiples Risk Transfer Programs, LLC Contact: Dino Fabrizio Phone: 321-281-0702 ; Fax: 407-481-9969 Email: dfabrizio@risktransferprograms.com Website: www.risktransferprograms.com ■ Markets Offered: EPLI, PL/GL, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by program ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Tower Group Companies, Amtrust Group & Allied World Assurance Company

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2014 Workers’ Compensation Directory RMIS Contact: Monica Tobin Phone: 714-738-1383 ; Fax: 714-992-1069 Email: WC@RMISmga.com Website: www.RMISmga.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: All ■ Brokered Business: Accepted ■ States Entered in: AZ CA IA IL IN MI NE NM WI ■ Admitted Status: Admitted ■ Carriers Represented: Employers, AmTrust, Guard, Travelers, Republic, RTW, Safety National

RoamNet Insurance Marketing Programs

SFA-5Star Specialty Programs Contact: Dee Dee Bloom Phone: 702-740-8470 ; Fax: 702-740-8472 Email: dd.bloom@5starsp.com Website: www.5starsp.com/SFA/default.aspx ■ Markets Offered: Excess Workers’ Comp, Large Deductibles, Buy-Down/Layer Coverage, Self- Insurance Bonds, Cash Flow Only Policies ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Excess WC Carriers

Contact: Patty Lawson Phone: 877-272-0333 ; Fax: 909-987-2245 Email: pattyl@roamnetins.com Website: www.roamnetins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,500 ■ Limits: High limits with small premiums ■ Brokered Business: Accepted ■ States Entered: Most States ■ Admitted Status: Admitted ■ Carriers: Employers, Hanover, Travelers & Zenith

Sports & Fitness Insurance Corporation (SFIC) Contact: Kim Tucker Phone: 800-844-0536 ; Fax: 601-853-6141 Email: askus@sportsfitness.com Website: www.sportsfitness.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Safeco, Hartford

Roundstone Management Contact: Jennifer Boerio Phone: 440-617-0333 ; Fax: 866-848-9496 Email: info@roundstoneinsurance.com Website: www.roundstoneinsurance.com ■ Markets Offered: Excess WC, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Brokered Business: Accepted ■ States Entered in: All States

State Compensation Insurance Fund of California

Russell Bond & Co., Inc. Contact: Derek Bucciferro Phone: 800-333-7226 ; Fax: 800-677-6779 Email: dbucciferro@russellbond.com Website: www.russellbond.com ■ Markets Offered: 24 Hour Policy, Excess EL Public Entities (NY Only), Excess Workers’ Comp, Health Ins, HMO, Managed Care, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M EL - Statutory WC ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: ACE, Chartis, Crum + Forster, Safety National, Rochdale, Capitol, MidWest, Arch Sabal Insurance Group Contact: Ian Norris Phone: 954-828-9948 ; Fax: 954-828-9949 Email: info@sabalinsurance.com Website: www.sabalinsurance.com ■ Markets Offered: USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Carriers Represented: Travelers Casualty & Surety, Bridgefield Employers, Bridgefield Casualty, Firstcomp, Guarantee, Zurich, Chartis, Amtrust, MCIM, FHM Insurance Company Safety National Casualty Corporation Contact: Karla Antrobus Phone: 888-995-5300 ; Fax: 314-995-3843 Email: karla.antrobus@safetynational.com Website: www.safetynational.com ■ Markets Offered: Excess WC, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by state ■ Limits: Varies by state ■ Brokered Business: Accepted ■ States Entered in: All States & Canada ■ Admitted Status: Admitted

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Swett & Crawford

Contact: Ron Boudreaux - National WC Practice Leader Phone: 612-334-2393 Email: Ron_Boudreaux@Swett.com Offices: Please visit www.swett.com to access our WC facilities through any of our 39 offices countrywide.

■ Markets Offered: Workers Compensation Guaranteed Cost, Paid and Incurred loss retro, USL&H and Jones Act/M E L, Excess WC ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Specialties: Temp Staffing, Healthcare, Trucking, USL&H, General Classes; Construction, Manufacturing, Service, Retail/Wholesale ■ Carriers Represented: Chartis, Berkshire Hathaway, SeaBright, Amerisafe, Hartford, AmTrust, Berkley Net, Republic, Midwest Employers, Safety National, Liberty Mutual, CNA, Tower, C V Starr, Zurich, Companion, Hartford , Guarantee 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.

Contact: Customer Service Phone: 888-STATEFUND (888-782-8338) Email: webmaster@scif.com Website: www.statefundca.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Depends on class ■ Brokered Business: Accepted ■ States Entered in: CA ■ Alliance With: State Fund Medical Provider Network

For more info, check out our ad on page 1 (National)

StateFund First

Contact: Riley Binford Phone: 415-536-8438 ; Fax: 415-536-6003 Email: riley_binford@statefundfirst.com Website: www.statefundfirst.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted ■ Carriers Represented: California State Compensation Insurance Fund

For more info, check out our ad on page 3 (West)

Sun Coast General Insurance Agency Contact: Jeff Yeskin Phone: 949-768-1132 ; Fax: 949-768-4045 Email: jyeskin@suncoastinsurance.com Website: www.SunCoastInsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $1,500 ■ Brokered Business: Not Accepted ■ States Entered in: CA

Target Managers Insurance Services, Inc. Contact: Michael Kiger Phone: 702-588-5300 ; Fax: 702-588-5310 Email: Info@TMI-Group.com Website: www.tmi-group.com ■ Markets Offered: USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: AL AR AZ CA CO GA IL IN LA MD MS NE NJ NM NV OK OR TN TX UT WA WI ■ Admitted Status: Admitted ■ Carriers Represented: Chartis, CNA, Employers, Explorer, ICW, Praetorian, QBE, UBIC, Zurich & many others.

TECIS Insurance Services Contact: Kyle Phelps Phone: 805-455-8522 Email: kphelps@tecisinsurance.com Website: www.tecisinsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,800 ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust

Tejas American General Agency

SWBC Contact: Lisa Pinto Phone: 210-525-1241 ; Fax: 210-321-7530 Email: swbcinfo@swbc.com Website: www.swbc.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $25,000 ■ Limits: 100/100/500 500/500/500 1,000,000/1,000,000 ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Major Carriers

Contact: Bart Koch Phone: 888-999-8242 ; Fax: 512-342-2803 Email: marketing@taga1.com Website: www.taga1.com ■ Markets Offered: USL&H, Workers’ Comp, Non-Subscription (NM, OK, TX only) ■ Phone Inquiries: Accepted ■ Minimum Premium: $250 ■ Limits: $1M / $1M / $1M ■ Brokered Business: Not Accepted ■ States Entered in: AR LA NM OK TX ■ Admitted Status: Admitted ■ Carriers Represented: Accident Fund, ACE USA, American Hallmark, Amerisafe, AmTrust, Chartis, Commercial Alliance Ins Co, Employers, Essex Ins Co, Great American, Hallmark Specialty, Hanover, Independence American Ins Co, One Beacon, Service Lloyds, Travelers

For more info, check out our ad on page 3 (National)

May 5, 2014 INSURANCE JOURNAL-NATIONAL REGION | 37

2014 Workers’ Compensation Directory Texas Mutual Insurance Company Contact: Customer Service 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: Competitive premiums ■ Brokered Business: Accepted ■ States Entered in: TX

For more info, check out our ad on page 3 (South Central) Texas Oil & Gas Association Workers’ Comp Safety Group Contact: Jim Sierra 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 ■ Admitted Status: Admitted ■ Carriers Represented: Texas Mutual Ins. Company The American Equity Underwriters, Inc. Contact: Julie Bland Phone: 251-690-4252 ; Fax: 251-690-4299 Email: julie.bland@amequity.com Website: www.amequity.com ■ Markets Offered: USL&H ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Limits: Federal Acts - Statutory, EL - $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: N/A, U.S. Dept. of Labor Approved ■ Carriers Represented: U.S. Department approved carrier for USL&H and extensions The Hamilton Wharton Group, Inc. Contact: W. Taylor Phone: 212-344-6000 ; Fax: 212-344-0007 Email: wtaylor@hamiltonwharton.com Website: www.hamiltonwharton.com ■ Markets Offered: Workers Comp for Nursing Homes and Assisted Living Facilities ■ Phone Inquiries: Accepted ■ Minimum Premium: $30,000 ■ Brokered Business: Accepted ■ States Entered in: NY ■ Admitted Status: Admitted ■ Carriers: NY State Insurance Fund – Safety Group 580 The Holdren Insurance Group, Inc. Contact: Chuck Holdren Phone: 310-356-5800 ; Fax: 310-356-5801 Email: chuck@theholdrengroup.com Website: www.theholdrengroup.com ■ Markets Offered: Workers’ Comp (Gun Ranges) ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted The Mechanic Group, Inc. Contact: Marc Katz Phone: 845-735-0700 ; Fax: 845-735-8383 Email: mkatz@mechanicgroup.com Website: www.mechanicgroup.com ■ Markets Offered: Workers’ Comp and all other lines for Security Guards, Alarms and Investigators.

■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: All ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers: The Hartford, Chartis, Magna Carta

Total Program Management Contact: Matt Blake Phone: 631-319-6210 ; Fax: 631-319-6208 Email: matthew.blake@tpmrisk.com Website: www.tpmrisk.com ■ Markets Offered: Excess Workers’ Comp, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust, Berkshire Hathaway, Crum & Forster Truckers Insurance Associates Contact: Sandi Filean Phone: 800-652-9515 ; Fax: 515-276-1418 Email: sfilean@truckers-insurance.com Website: www.truckers-insurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $25 ■ Brokered Business: Not Accepted ■ States Entered in: AR AZ CO IA IL IN KS MI MN MO NE OK SD UT WI ■ Admitted Status: Admitted ■ Carriers Represented: Travelers/Northland, and Dakota Truck Underwriters Tryton Insurance Group, LLC Contact: Yolanda Lee Phone: 713-351-8237 ; Fax: 877-222-0362 Email: ylee@trytoninsurance.com Website: www.trytoninsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Not Accepted ■ States Entered in: All states except CT DE ME NJ VT ■ Admitted Status: Admitted ■ Carriers Represented: Hartford, Travelers, Safeco / AmericaFirst, Zenith, Chartis, CNA, Accident Fund (TX only) U.S. Risk Insurance Group, Inc. Contact: Julie Byington Phone: 800-232-5830 Email: julieb@usrisk.com Website: www.usrisk.com ■ Markets Offered: Excess Workers’ Comp, USL&H, Workers’ Comp (All Lines) ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Limits: Varies ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: We access Work Comp from 15+ Carriers Unisource Program Administrators Contact: Lana Potts-Buri Phone: 941-308-1918 ; Fax: 877-817-8099 Email: Lana.Potts-Buri@UnisourcePA.com Website: www.UnisourcePA.com ■ Markets Offered: Workers’ Comp and P&C Markets ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: As Requested ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: AIG, AmTrust, Amerisafe, CastlePoint, Chartis, Employers, FirstComp, FFVA, LION, Normandy Harbor, eQBE, and V3 Insurance Partners

38 | INSURANCE JOURNAL-NATIONAL REGION May 5, 2014

Voce Insurance, Inc. Contact: Mitch Naku Phone: 424-204-5484 ; Fax: 424-204-5484 Email: mitchn@voceinsurance.com Website: www.voceins.com ■ Markets Offered: Excess WC, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: CA FL ■ Admitted Status: Admitted & Non-admitted WorkCompGuard / Willis Programs Contact: Eric Langlois Phone: 802-264-9525 ; Fax: 802-658-6191 Email: eric.langois@willis.com Website: www.workcompguard.com ■ Markets Offered: Workers’ Comp for Home Healthcare, Medical Equipment Providers, Medical Facilities, Medical Staffing, Destination Resorts, Community Associations, Franchised Auto and Used Dealerships, Manufacturers, Distributors, Installers of Trailers, Truck Bodies & Equipment, Business Equipment Rental, Metal and Plastics Manufacturers ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Various

World Wide Specialty Programs

Contact: Dorothy Taylor ; Robert Thompson Phone: 800-245-9653 or 631-390-0900 Fax: 631-390-0922 Email: dtaylor@wwspi.com ; rthompson@wwspi.com Website: www.wwspi.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $50,000 ■ Limits: State Mandated ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Zurich World Wide Specialty Programs has lead the market with the most comprehensive program for the staffing industry for over 50 years. Our partnership & understanding of how the staffing industry works allows us to be the premier source for all Staffing insurance lines including Staffing Workers’ Comp.

Wrap Up Insurance Solutions Contact: Brian Billhartz Phone: 636-489-0185 ; Fax: 636-536-7473 Email: bbillhartz@trekadmin.com Website: www.trekadmin.com ■ Markets Offered: Excess Workers’ Comp, Workers’ Comp, Wrap Ups ■ Phone Inquiries: Accepted ■ Minimum Premium: N/A ■ Limits: $100MM ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Zurich, AIG, ACE, Liberty Mutual, ARCH, Old Republic, Travelers

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SPECIAL REPORT

Workers’ Compensation continued from page 21

April report titled “The Future of Terrorism Insurance Backstop.”

“Carriers limited capacity or excluded the terrorism risk from property coverage altogether. Regarding workers’ compensation, the inability of carriers to exclude any peril resulted in growth in the residual market,” Tucker wrote.

“The problem that we have with TRIA right now it it’s viewed as an insurance industry problem. That’s not the entire story. This is an economic problem for the United States,” Leonard says. “Absent the renewal of TRIA, it will have a major impact on the economy of the United States going forward.”

The federal terrorism backstop is essential to the workers’ comp industry because in many cases, “we cannot simply terminate a policy,” he says. “We cannot reduce the coverages handed to us by statute. You cannot, in workers’ comp, tell somebody that your injury isn’t covered because it resulted from a terrorist attack. That’s just not the way the statute reads. We cover you for any and all workplace injuries” — terrorism related or not.

Workers’ comp could be in trouble without the federal backstop for terrorism coverage. “It would be catastrophic to the insurance industry and it would have a major negative impact on the U.S. economy,” he says.

Workforce Demographics While many in the workers’ compensation world discuss the aging workforce and health challenges such as obesity impacting the bottom line, NCCI’s Shuford sees the younger generation as a growing concern.

“When you talk about age demographics, I actually think we need to be more concerned about young people than old people, particularly young men,” he says. “They

are not participating in the labor force the way that they used to. Their labor force participation rates are down. Many of them are not even looking for work. Many do not have job skills or can’t pass a criminal background check or a drug test. We are simply not getting the flow of young and vibrant workers into the workforce like we used to.”

That’s a concern for everyone, he says.

“As a nation and as an industry we need to be thinking about that every bit as much as we think about older workers,” Shuford says. “Our own research shows that for the older people that are still in the workforce, their injury rates are about the same as workers in their mid-30s to mid-40s and the average cost of a claim is the same as it is for workers in their mid-30s and mid-40s.”

That means older workers — at least those still in the workforce — do not appear to be imposing a significant burden on the workers’ comp system.

“Our research suggests that what we ought to be worried about is not the older workers but instead the middle aged workers. Over the last 15 years what we have observed is injuries that used to be prominent amongst older workers — rotator cuffs and knee injuries are now becoming very prominent in workers in their mid-30s to mid-40s.”

Those injuries tend to be high cost and often permanent disabilities.

“Everybody talks about the aging baby boomers putting pressure on the workers’ comp system when in reality we need to be concerned with middle aged workers,” Shuford says.

Mobile Workforce The use of telecommuters — or the mobile workforce — has grown by nearly 80 percent since 2005, according to Global Workplace Analytics, a San Diego-based consulting and research firm that focuses on the business case for emerging workplace strategies.

While telecommuting grew by 3.8 percent from 2011 to 2012, the size of the overall the non-self-employed workforce actually declined 1.5 percent, according to Global Workplace Analytics statistics. “For the period from 2005 to 2012, the telecommuter population grew by 79.7 percent while the non-self-employed workforce grew by only 7.1 percent.”

A mobile workforce presents both challenges and opportunities for businesses and their workers’ compensation insurers.

“If you consider that in 2013, 26 percent of all automobile crashes in the United States involved the use of a cellphone that brings home the idea that if you’re working in a building, the employer can control a lot of things. But once you leave that building and get into your own little car or your employer’s car and you drive somewhere, that arm of control isn’t quite there like it used to be,” says Lynch.

According to Lynch, the jury is still out on whether growth in the mobile workforce will continue.

“Companies are beginning to realize that it might be more in their best interest to bring people back together, in a cohesive work environment, rather than having them off site so much,” he says.

“For example, if your commute is from 20 feet from your bedroom to your home office, that’s really nice and all that but when you get up from your desk and you step around a corner and you trip on your son’s skateboard and you land on your face and get hurt, what does that mean for workers’ compensation?” he jokes.

May 5, 2014 INSURANCE JOURNAL-NATIONAL | 39

NATIONAL COVERAGE

MyNewMarkets Exclusive Liability Insurance Program for Continuing Care Retirement Communities Market Detail: Highland Risk Services (www.highlandrisk.com) has an exclusive liability insurance product specific to continuing care retirement communities under the Empirical Risk brand.

Coverage is available on both claims-made and occurrence forms, with excess capacity up to $10 million. Comprehensive risk management and litigation management programs are available at no additional cost to the insured.

Available limits: Minimum $1 million, maximum $11 million Carrier: Ironshore States: All states Contact: Brian Daly at 847-832-9100 or email: brian.daly@ highlandrisk.com

CondoPak: Property & General Liability Market Detail: New Empire Group’s (www.newempiregroup.com) CondoPak is an exclusive package policy. CondoPak was designed to meet the specific needs for superior cooperative, condominium and community associations.

Available limits: Maximum $25 million Carrier: HDI Gerling America States: Miss., Ala., Ga., S.C., N.C., Tenn., Ky., Ill., Ind., Wisc., Mich., Ohio, W.Va., Pa., N.Y., Maine, R.I., Vt., N.J., D.C., Dela., N.H., Mass., Md., and Va. Contact: Rob Mackoul at 516-690-8116 or email: robm@ newempiregroup.com

Available limits: Minimum $500,000, maximum $2 million Carrier: Unable to disclose, non-admitted States: All states Contact: Angel Lightcap-Grisez at 513-563-3951 or email: alightcapgrisez@psgins.com

Alarm Monitoring Companies Market Detail: Brownyard Programs Ltd. (www.brownyardprograms.com) coverage includes: professional liability; care/custody/ control; CGL; workers’ comp; umbrella; assault & battery; lost key; excess liability; blanket additional insureds.

Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted available States: All states except D.C. Contact: Customer service at 800-665-7304

Technology Professionals E&O Market Detail: Tennant Risk Services (www.tennant.com) covers technology organizations that need professional liability and other

Health & Fitness Centers Market Detail: The Harry W. Gorst Co. (www.gorst.com) has a package market for aerobic studios, corporate fitness centers, independent fitness centers, as well as franchised fitness centers.

Packaged or monoline coverage is available. Automatic coverage for child sitting, personal trainers/aerobic instructors, four sport courts, jacuzzis, hot tubs, saunas and steam rooms is available. There are no liability deductibles and a broadened GL definition of bodily injury to include mental anguish and emotional distress. Packages may also include: ISO’s 04/02 property coverage form; a special endorsement to include 14 coverages for a minimal flat charge; and equipment breakdown.

Available limits: Minimum $300,000 Carrier: Unable to disclose, non-admitted States: Calif. only Contact: Erik Fulton at 800-437-6616, ext. 156 or email: efulton@ gorst.com

Playground Equipment Program Market Detail: Partners Specialty Group LLC (www.psgins.com) offers general liability including professional liability on an occurrence form for eligible exposures, including playground equipment installation contractors, equipment dealers and manufacturers.

40 | INSURANCE JOURNAL-NATIONAL May 5, 2014

specialty coverages to protect themselves from technology exposures. Professional services include: software designer/developer; website development; network/system administration; software as a service/web services; help desk/call centers; computer security; systems/IT consultants; and process control & robotics. Specialty insurers have a range of technology E&O products for these professional organizations, and many have additional cyber risk coverages.

Available Limits: As needed Carriers: Various States: All states Contact: Bob Sargent at 860-519-1301 or email: rsargent@tennant. com

Roofing Contractors Market Detail: Commercial Sector Insurance Brokers LLC (www. comsectorins.com) offers contractors general liability, excess liability and GL coverage Available limits: As needed Carriers: Unable to disclose, non-admitted States: All states except D.C., Hawaii, Maine, N.D., S.D., and Vt. Contact: Lamar Andrews at 205-332-8117 or email: landrews@ comsectorins.com www.insurancejournal.com

Advertisers Index Readers, browse, contact, or do product searches on any of our full page advertisers at: www.insurancejournal.com/adshowcase/

Adult Entertainment/ Gentleman’s Clubs Market Detail: Founders Insurance Co. (www.foundersinsurance.com) offers affordable liquor liability protection for hard-to-place risks, including: live entertainment, late closings, new ventures, prior claims and more. Liquor liability features include: policy limits up to $1 million per occurrence/$2 million aggregate; defense costs covered in addition to the policy limit; additional insured coverage available; no deductible; and premium financing through subsidiary, where available.

Available limits: Minimum $100,000, maximum $1 million Carrier: Founders Insurance Co. States: All states except Miss., N.J., N.M., Pa., S.C., Texas and W.Va. Contact: Customer service at 800-9728778

IJHOUSE16515.indd 1

www.insurancejournal.com

Agency Ideas www.agencyideas.com 30 Amerisafe www.amerisafe.com SC8 Anderson & Murison, Inc. www.andersonmurison.com 25 Applied Underwriters www.applieduw.com 2, 44 Atlas General Insurance Services www.atlas.us.com W4; SE3; E3 Brecht & Associates www.brechtassoc.com SC2 Burns & Wilcox Ltd. www.burnsandwilcox.com 7 California Earthquake Authority www.earthquakeauthority.com/mvp 2 IICF www.iicf.org 43 Independent Insurance Agents of Texas www.iiat.org SC5 Insurance Technologies Corp. www.insurancewebsitebuilder.com 15 K&K Insurance Group www.kandkinsurance.com 9 M.J. Hall & Company, Inc. www.mjhallandcompany.com W11 Midlands Management Corporation www.midlandsmgmt.com 27

Monarch E & S Insurance Services www.monarchexcess.com W7 Oak & Associates www.oakandassociates.com 29 Pacific Gateway Insurance Services www.pgiainsurance.com W5 PersonalUmbrella.Com www.personalumbrella.com 5 QBE www.qbededicated.com 13 SIAA www.siaa.net 3; W1; SC7 State Compensation Insurance Fund www.scif.com 1 State Fund First www.statefundfirst.com W3 Tejas American General Agency www.taga1.com 3 Texas Mutual Insurance Company www.texasmutual.com SC3 The Hartford www.privatecompanyinsurance.com 17 Western Security Surplus www.wssib.com W10; SC6

4/25/14 3:04 PM

May 5, 2014 INSURANCE JOURNAL-NATIONAL | 41

IDEA EXCHANGE

Closing Quote

Insurance in the Sharable Economy

T

he new sharable economy is growing across the country, and one question looms large: What are the insurance implications?

Homeowners and renters understand the types of insurance they need and where they can buy coverage. Drivers know they need auto insurance on their car. But just how is insurance supposed to work in the sharable economy?

The answers to this question are evolving rapidly.

The car-sharing industry is based on the use of personal automobiles, so it is paramount to ensure that the peoBy Robert ple who put their personal vehicles into the system are Passmore insured while the car is operated as a ridesharing vehicle.

Legislation regulating car sharing has been enacted in California, Oregon and Washington. These insurance protections were first developed in California.

Insurers have developed model draft legislation that can be introduced as more states adopt this collaborative arrangement. This sharing model enables car-owners to make their personal vehicle available to be rented to another person through a car-sharing company.

For example, someone who works 8 a.m. to 5 p.m. and parks their car during work hours can make it available for rent to those needing a car during the day. The car-sharing company’s commercial insurance takes effect as soon as the renting customer takes the keys and ensures that the car-sharing company, not the car owner’s personal auto insurance, protects the driver and the car while engaged

42 | INSURANCE JOURNAL-NATIONAL May 5, 2014

in a commercial operation.

Ridesharing is another new rapidly expanding trend.

However, the insurance implications of this business model have proven controversial.

Ridesharing is a service provided by transportation network companies (TNCs) that use a smartphone app to connect drivers using their own personal cars with people needing a ride for a fee as part of an organized program.

Lyft, UberX and Sidecar are expanding rapidly and are rivaling the services traditionally provided by taxi cabs.

A 2014 New Year’s Eve accident in San Francisco that resulted in the death of a six-year-old girl highlighted an insurance gap and ignited legislation across the country.

Legislation on this issue has been introduced in Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland and Oklahoma. Local ordinances governing ridesharing programs have been introduced in Chicago, Dallas and Seattle. In Colorado, TNCs are sponsoring legislation to mandate personal auto insurance policies cover the commercial driving of TNC drivers once they turn on the app until they are matched with a passenger.

Insurers are fighting these bills because the personal auto policy is not designed to cover riskier, more costly commercial risk TNC activity. The bill in Colorado could force all drivers to pay higher insurance costs to subsidize the TNC’s costs of doing business.

In California, insurers are sponsoring legislation to fill the insurance gap and make sure drivers understand that their personal auto policy will not provide coverage when a personal car is used for commercial purpose.

The new sharing The sharing economy has enabled some homeeconomy presents owners and renters to both an opportunity rent out their spare room and potential risk. for extra money. Airbnb is a San Francisco-based company that connects travelers in need of accommodations to people with rooms for rent. Homeowners insurance policies typically exclude coverage for the personal property of roomers, boarders and other tenants staying in a home.

The new sharing economy presents both an opportunity and potential risk for those who participate in it. If you plan to share your car or your home, a conversation with your insurance agent or company is the first step to ensure that you have the right coverage.

Passmore is senior director of personal lines policy for the Property Casualty Insurers Association of American. Phone: 847-297-7800.

Email: Robert.passmore@pciaa.net.

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