Insurance Journal West 2015-12-21 by Insurance Journal

WEST EDITION L.A.’s new Earthquake Law Class Action Against Farmers Washington’s W/C to Rise 2%

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Inside This Issue

On The Cover

Special Report: The Charity Issue

December 21, 2015 • Vol. 93 No. 24 • West

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IDEA EXCHANGE

Softening of P/C Commercial Markets to Continue: Fitch

W1 Judge in California Grants Class Action in Farmers Female Attorneys Suit

30 Growing Your Property Casualty Agency: Alan Shulman

Uber Winning Support in States for Classifying Drivers as Contractors

14 Best, Worst States for Insurance Regulation 16 Special Report: The Top Insurance News Stories of 2015

W1 Workers’ Comp Rates in Washington to Increase 2% in 2016 W2 Insurance Executive Sees Problems, Opportunities in L.A.’s Earthquake Law

18 Special Report: The Top Insurance Markets of 2015

W4 Reforms May Have Caused Drop in Medical Payments in California, Study Shows

20 Special Report: IICF Unites P/C Industry for Record Year of Giving

W4 Rideshare Operators Don’t Have to Provide Driver Names in Vegas

22 Special Report: City of Hope Research, Treatments Boosted by Insurance Industry 24 The Charity Issue: Snapshots of Giving

32 Amp Up Your Engagement Strategy with Corporate Citizenship 34 Closing Quote: Regulators Focused on Product Innovation, Emerging Trends

DEPARTMENTS 10 10 11 28

Declarations Figures Business Moves MyNewMarkets

29 Spotlight: 10 Things to Know About Seasonal Risks

4 | INSURANCE JOURNAL-WEST December 21, 2015

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Opening Note Disruptive Change

.S. property/casualty insurers should expect disruptive changes in a number of areas in 2016, including technology, pricing, customer demand and “heightened regulatory creep,” consultant Ernst & Young said in a new report. “Insurers that stay ahead of these shifts should reap substantial benefits, while laggards risk falling behind or even out of the race,” according to the EY industry outlook. EY said insurers should plan for the looming transformational changes.“Refining legacy products and approaches is not enough,” the report concludes. “What is required is a fresh outside-in approach that starts with the customer and carriers through to digital trends and market shifts, both inside and outside the industry.” EY ranks the major outside elements that it sees affecting the market in 2016, with 10 representing the highest impact, and 0, the least: Technology. EY rates this one a 10 in terms of impact over the coming months. That’s because digital technology, including social media, telematics and analytics are likely game changers, with expectations it will affect business areas including marketing and distribution, to customer service and pricing models. Pricing. This trend gets a 9 ranking. As EY explains, Digital technology, includinsurers will need to ing social media, telematics, rethink pricing models and analytics are likely game in an age of pay-as-you-go market appeal and greater changers. use of customer-focused analytics. Customer expectations. This earns an 8 ranking in terms of impact, due to technological changes in other industries that rely on web-based customer service. EY said that this will be big, in large part due to customers comparison shopping on the web as they seek more personalized experiences. Economy and interest rates. With a 6 ranking, the expectation is for a more moderate impact versus the previous three factors, but it is still a big deal. EY noted that there is a prediction of modest economic growth in the months ahead, a trend that could be adversely affected by global volatility and the resulting uncertainty. As well, low U.S. interest rates are still a factor, pressuring underwriting. Regulations. With a 5 ranking, the impact of government regulations is likely to have a solid impact. EY said that “heightened regulatory creep” is generating a bigger concern. EY warns that insurers will need to assess how changing regulations might impact them, and plan for a greater impact in 2017 after the U.S. elections. One final element: catastrophes. EY gave this one a 2 ranking, noting that moderate catastrophe activity continues to keep downward pressure on pricing. One variable: a very large and unexpected event, or a series of events, could change the Andrea Wells Editor-in-Chief market. 6 | INSURANCE JOURNAL-NATIONAL December 21, 2015

Publisher Mark Wells | mwells@wellsmedia.com EDITORIAL Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Young Ha | yha@insurancejournal.com Southeast Editor Amy O’Connor | aoconnor@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 Columnists Alan Shulman Contributing Writers Steve Lessaris, John Huff, Kyle Potter SALES Chief Marketing Officer Julie Tinney (800) 897-9965 x148 | jtinney@insurancejournal.com Sales Manager Lauren Knapp (800) 897-9965 x161 | lknapp@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 | dkaplan@insurancejournal.com Midwest Lisa Whalen (800) 897-9965 x180 | lwhalen@insurancejournal.com South Central Mindy Trammell (800) 897-9965 x149 | mtrammell@insurancejournal.com East (NY, PA and CT only) Dave Molchan (800) 897-9965 x145 | dmolchan@insurancejournal.com Southeast & East (except for NY, PA and CT) Howard Simkin (800) 897-9965 x162 | hsimkin@insurancejournal.com New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale Kelly De La Mora (800) 897-9965 x125 | kdelamora@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 DESIGN/WEB Chief Technology Officer/Chief Innovation Officer Joshua Carlson | jcarlson@insurancejournal.com V.P. of Design Guy Boccia | gboccia@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 Tim Layer | tlayer@wellsmedia.com IJ ACADEMY OF INSURANCE V.P. of Education Chris Boggs | cboggs@ijacademy.com Sales Executive Romeo Valdez | rvaldez@ijacademy.com Online Training Coordinator Barbara Whiffen | bwhiffen@ijacademy.com ADMINISTRATION Chief Executive Officer Mitch Dunford | mdunford@wellsmedia.com Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com

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News & Markets Softening of P/C Commercial Markets to Continue: Fitch

.S. commercial insurance market segments, including directors and officers (D&O) liability insurance, are continuing to soften and are likely to stay on this path for the near-term even as several large competitors merge, Fitch Ratings says. Premium rates in property lines have been declining for some time in response to a lack of large loss events. Fitch said it expects that competitive forces will likely drive prices lower in more casualty/liability lines, in part due to past underwriting success. Fitch noted that the latest Quarterly D&O Pricing Index report by Aon Risk Solutions indicated that pricing on D&O programs that renewed in the third quar-

ters of both 2015 and 2014 is 10.1 percent lower than pricing on the comparable group a year ago. Broker Willis recently projected that public company and financial institution company D&O renewal rates will be flat to slightly down in 2016. Excess rates are projected to fall by 5 to 15 percent next year. However, weaker performing privately held and non-profit business is still seeing rate increases. Fitch’s analysis is consistent with most surveys. The Council of Insurance Agents & Brokers third quarter survey showed a continued decline in commercial P/C rates across all account sizes and most lines. This was consistent with the trend of gradually declining rates observed since the first quarter of 2013.

CIAB did find, however, a slight uptick in rates for commercial auto and flood. Also, broker Marsh found that while the third quarter marked the tenth consecutive quarter with declining rates in all commercial lines taken together, cyber insurance has been seeing consistent and large rate increases, averaging more than 15 percent in the U.S. According to Fitch, D&O underwriters have benefited from relatively stable claims trends in recent years, particularly regarding claims relating to securities class action filings. Underwriting performance slightly deteriorated in 2015 with a reported statutory direct loss ratio of 51 percent for the industry at Sept. 30, compared with 49 percent in full year 2014. Fitch said that upward D&O rate movement is unlikely unless there is considerable weakening in underwriting performance.

Uber Winning Support for Classifying Drivers as Contractors

tate legislators in Ohio and Florida are moving ahead with regulations governing Uber and other ride services that would designate all drivers as independent contractors, bolstering a critical but much-disputed aspect of Uber’s business model. The states would join North Carolina, Arkansas, and Indiana in requiring the contractor designation as part of new laws governing so-called transportation network companies, a Reuters review of state legislation showed. The contractor provisions of the current and proposed laws in the five states have not previously been reported. Reuters reviewed the transportation legislation of more than 40 states that have considered regulations 8 | INSURANCE JOURNAL-NATIONAL December 21, 2015

for companies such as Uber and its rival Lyft over the past two years. Uber built its business on the contractor model, arguing that its smartphone app simply connects riders and drivers, who own their cars and pay their own expenses. But Uber is fighting a class-action lawsuit in California by drivers who said they should be treated as employees. Many of a group of 160,000 California drivers could potentially be part of the class, according to a judge’s ruling Dec. 9, and possibly be eligible for back pay and reimbursement of expenses. The contractor requirement in the new state laws could help Uber limit the potential damage if it were to lose the California lawsuit and also head off similar challenges in other states.

An Uber spokeswoman said the company supported the Arkansas, Indiana and North Carolina laws, as well as the pending Ohio and Florida bills. She declined to comment on the company’s involvement in drafting those laws, however. In Ohio, state Rep. Bob Hackett said Uber, Lyft, the taxi industry and other parties were involved in drafting the bill. At one point, Uber sent five representatives to a meeting with members of the insurance industry to negotiate language in the bill, Hackett said. “I believe they are independent contractors. And the bill says the State of Ohio believes that they are independent contractors,” Hackett said. The state Senate cleared the bill earlier this month, sending it to the House. Sponsors in both houses said they expected it to be approved. Bills on the designation of Uber drivers have also been introduced in New Jersey and Alabama but have not been enacted. Copyright 2015 Reuters www.insurancejournal.com

36%

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FIGURES

DECLARATIONS

14,468

145

The number of traffic tickets that the New York State police issued as a result of increased enforcement efforts during this year’s Thanksgiving weekend. The tickets issued included 5,910 for speeding and 715 for distracted driving. Troopers also made a total of 218 driving while intoxicated (DWI) arrests.

The number of carjackings in New Orleans this year, as of early December, up from the 53 recorded in 2013. Many carjackings fit two patterns: drivers stopped at red lights or were standing at or near their vehicles — for instance, loading or unloading groceries. Antitheft technology has led to fewer vehicle thefts nationwide in recent years. One way to access a car now is through carjacking.

Renewable Energy

“This executive order empowers our state agencies to implement innovative solutions to reduce our state’s carbon footprint, address climate change, and make government more efficient.” — Rhode Island Gov. Gina Raimondo on

an executive order that commits the state government to be 100 percent powered with renewable energy sources by 2025.

A Disturbing Trend

“We’re seeing a disturbing trend where more cities and counties are allowing more use.” — Dr. Charles Jennissen, a professor with the

University of Iowa, is against a petition to allow all-terrain vehicles on secondary roads in Iowa’s Louisa County. Jennissen said ATVs’ high center of gravity, size, speed, amd tires contribute to safety concerns.

The Real Story

“Leone Meyer wants the painting. That’s the real story.”

$1.3 million 365 The number of traffic deaths in Minnesota in 2015 as of December 1. That number has already surpassed 2014’s total of 361, Minnesota traffic safety officials say. Traffic deaths this year include 61 motorcyclists, up from 45 at this time last year; 36 pedestrians, up from 16 a year ago at this time; and 10 bicyclists, compared with five this time last year.

The settlement amount approved by a federal judge in a lawsuit filed by a Hawaii motorcyclist who suffered permanent brain injury in a 2012 collision in Honolulu. Aaron Aloya filed the suit against the driver that crashed into him, Kaori Isomura, and motorcycle helmet manufacturer Shoei Safety Helmet Corp.

The number of fires intentionally started in 2014 by teens in North Carolina, well above the historical average of eight. Buncombe County is working to reduce that number through a new Firesafe Together program to educate teens and their families, as well as to provide help from other agencies, and evaluate why the child is starting fires.

— Oklahoma state Rep. Paul Wesselhoft, commenting on a lawsuit that challenges the ownership of a painting that hangs at a University of Oklahoma art gallery. Leone Meyer, a French woman, claims the painting was stolen from her family by Nazis during World War II. Wesselhoft urged the art museum to return the artwork to Meyer.

Furious Lawsuit

“If Porsche had designed the car to include proper safety features, Paul would have survived, he would be filming ‘Fast and Furious 8,’ and Meadow Walker would have the father she adored.”

— Jeff Milam, an attorney for the daughter of deceased actor Paul Walker, criticized a filing made by Porsche stating that the Carrera GT Walker died in had been altered and improperly maintained, and that those factors contributed to his death.

Not Enough Insurance

“If every farm in South Carolina had picked the best crop insurance options available, the insurance proceeds still would not cover the basic cost of putting that acre of corn, cotton, soybeans in the ground.”

— South Carolina Agricultural Commissioner Hugh Weathers is seeking help from a state Senate panel in persuading Gov. Nikki Haley to request additional aid for farmers to cover the estimated $346 million damages from an early October storm. 10 | INSURANCE JOURNAL-NATIONAL December 21, 2015

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News & Markets Judge in California Grants Class Action in Farmers Female Attorneys Suit By Don Jergler

U.S. District judge in California earlier this month granted class action status to a suit brought by female attorneys against Farmers Insurance for discriminatory practices. The initial suit was filed on behalf of Lynne Coates, who her attorney said was paid less than male counterparts who had “decades less” experience than her. Three women opted-in on the suit in late summer. The attorney has added more women to the suit since, bringing the total to 12 former or current Farmers attorneys involved in the case. Lori Andrus of Andrus Anderson LLP and Lori Costanzo of the Costanzo Law Firm are representing the plaintiffs. Andrus in April first sought the class action status in a suit she believes could now potentially encompass 300 or more female attorneys. In October Andrus sought to have the judge certify the plaintiffs’ Equal Pay Act claims. Lucy H. Koh, a U.S. District judge for the Northern District of California in the San Jose Division, issued the class action order. “Having considered the parties’ arguments, the relevant law, and the record in this case, the Court grants Coates’s motion for conditional collective action certifica-

tion, and authorized notice to potential similarly situated class members,” Koh wrote in the order. Luis Sahagun, a Farmers spokesman, declined a request for comment. Andrus praised the decision following the judge’s order. “The question the Court decided today, is simply whether Lynne Coates is similarly situated to the other female attorneys she stood up on behalf of,” Andrus said. “The standard is easily met and we’re pleased to read Judge Koh’s thorough analysis. She seems to recognize that Farmers runs its business in a centralized fashion and the taint of gender discrimination ripples through every branch office.” Coates is a California resident who worked in the legal office in the Farmers’ San Jose branch. Coates worked for Farmers in the 1990s, and again starting in 2010 first as a contract attorney and then as a fulltime employee, according to the suit. Andrus noted that the Equal Pay Act does not require plaintiffs to prove intent, instead it’s the defendant’s job to ensure that it is not violating the law.

“A prima facie case only requires a demonstration of unequal pay for equal work,” she said. Andrus said notice will go out to 300-plus putative class members inviting them to join the lawsuit. The class members will have 90 days to opt in. The suit accuses Farmers of unlawfully paying its female attorney-employees significantly lower wages than male attorneys doing the same work. The suit states: “Farmers does not reward its female attorneys equally compared to their male counterparts performing equal work. Instead, Farmers systematically pays female attorneys less than similarly-situated male attorneys.” Not only are male attorneys paid more, but they are also routinely given higher profile work assignments, more frequent raises and promotions and are recognized for their accomplishments while female attorneys are not, according to the suit. The case is Lynne Coates V. Farmers Group, Inc.

Workers’ Comp Rates in Washington to Increase 2% In 2016

he average base rate Washington businesses pay for workers’ compensation insurance will increase by 2 percent in 2016, the state Department of Labor & Industries announced. L&I uses wage inflation as a benchmark to help determine workers’ comp rates for the coming year. Washington’s most recent wage inflation rate is 4.2 percent. The 2016 premium increase is less than half that amount, in part because of significant cost saving by the agency over the last year, according to L&I. The new rates take effect Jan. 1. The 2 www.insurancejournal.com

percent increase for 2016 comes out to a little more than an additional 1 cent per hour worked. The rate increase is an average across all types of businesses. Many will see smaller increases or even lower rates because they receive a discount for having safe workplaces and low claims costs. Employers and industries with higher numbers of claims and costs will see rate changes of more than 2 percent. Washington’s workers’ comp premium increases since 2013 have been between 0.8

percent and 2.7 percent. In September, L&I proposed the 2016 rate increase and then took public input on the plan. The agency held public hearings in six cities around the state in October and also took comments online and by mail before making the final decision. L&I is the state’s primary workers’ compensation insurance provider, covering roughly 2.6 million workers and more than 170,000 employers. Nearly 90,000 claims are accepted each year through the Washington State Workers’ Compensation State Fund. December 21, 2015 INSURANCE JOURNAL-WEST | W1

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News & Markets

Insurance Executive Sees Problems, Opportunities in L.A.’s Earthquake Law By Don Jergler

frame apartment complexes built on top of carports. Property owners will have seven years ho’s going to pay? to fix wood apartments and 25 years to fix It’s a big question in front of landconcrete buildings under the new ordilords of thousands of Los Angeles propernance. ties early next year. But the L.A. City Council in voting to When the Los Angeles City Council improve safety in a seismiunanimously voted in October for new earth‘It’d take a long time cally dangerous area has yet to address the big question. quake retrofit regulations to pay off a major The ordinance doesn’t it put in play a mandate earthquake retrofit by include funding sources to retrofit an estimated 15,000 buildings to better that small an amount other than an existing prowithstand violent shakof increase per unit.’ vision in place that enables landlords to increase ing. The affected propermonthly rents by up to $75 to cover the ties include nonductile concrete buildings, costs. not including detached single-family homes That’s not much and it would take a or duplexes built before 1977, and wood-

W2 | INSURANCE JOURNAL-WEST December 21, 2015

long time for landlords to recoup the very expensive cost for retrofitting, said Michael Brown, vice president and property department manager with Golden Bear Insurance Co. in Stockton, Calif. The primary question Brown is raising: who is going to pay? “That may be the $64,000 question,” he said. The retrofit program officially kicks off in February when the city begins mailing out retrofit orders to landlords. Landlords will have one year to submit plans to either retrofit or demolish the structure. They can forego either of those scenarios if they can prove retrofitting is unnecessary. Building owners then have two years to get permits and seven years to complete the www.insurancejournal.com

nue that the older, noncompliant building ment on their property tax bills. retrofits, which on wooden structures are did,” Brown said. “In either case, the tenants Like San Francisco, L.A. is allowing buildestimated to cost $60,000 to $130,000. in these older buildings are going to see ing owners to increase monthly rents by up The ordinance is based on a 2014 report both a reduction in the available number of to $75 to pay for retrofits. ordered by L.A. Mayor Eric Garcetti. The units and an increase in the monthly But Brown believes report involved famed U.S. Geological rents, almost certainly.” much more than that Survey seismologist Lucy Jones. Jones has Brown acknowledged the ordinance is needed. And he long worked to call attention to the seismic addresses a life safety issue, particularexpects L.A. to follow dangers posed by L.A.’s numerous wood ly for residential buildings. in the footsteps of San frame buildings. “The problem I have is the way Francisco — eventually. It’s being hailed as one of the nation’s they’ve gone about it,” he said. “They’ve “My expectation is most sweeping earthquake safety ordinancidentified the problem. They’ve estabthat a similar program es, but L.A. isn’t the first local government lished a set of rules and guidelines for will emerge for Los to take such measures to improve earththe property owners to comply with Angeles, but it might quake safety. the new ordinance and make their have been nice if they In 2013 San Francisco Mayor Ed Lee buildings safer, but they’ve done so identified one and signed into law the Mandatory Soft Story Michael Brown, vice president without providing an easy and reasonmaybe started that pro- and property department Retrofit Ordinance. That law requires most able means of funding all this extra cess before passing the manager with Golden Bear San Francisco multifamily soft-story buildInsurance Co. work.” ordinance,” Brown said. ings to be retrofitted with few exceptions. Brown sees an opportunity for agents He believes allowing landlords to It’s estimated that more than 5,000 San and brokers who don’t mind taking a little increase rent up to $75 a month per unit to Francisco buildings are required to partime to bone up on the new ordinance and pay for earthquake retrofitting will prove ticipate in the program. More than 500 figuring out what it means for their clients. too slow an income stream for landlords buildings have filed for or been issued a “I think we’re going to see a flood of struggling to pay the costs, and that it permit and more than 120 owners have building owners contacting their insurance could be rough on some renters. completed their required retrofit, according agents, looking for information on what “It’d take a long time to pay off a major to information from the city’s Earthquake are the exposures here that I have to deal earthquake retrofit by that small an amount Implementation Program. with,” Brown said. “The average investment of increase per unit,” Brown said. “If you A Community Action Plan for Seismic property owner probably doesn’t know a look at it from the other perspective, a Safety analysis estimates these retrofits will whole lot about the additional insurance family that’s already living paycheck to cost between $60,000 and $130,000 dependexposures that would come from having paycheck and sees a $75 increase in their ing on the building size. major seismic retrofits done.” rent every month will be All work within the Brown called this “value added relationscope of that ordinance ‘It’s a great opportunity disproportionately impactship building” with current clients, as well ed. Los Angeles already has is subject to a passas the potential to seek out new clients a fairly high cost of living, through provision that for insurance professionals to step forward, and this is just going to who may suddenly have builders’ risk expoallows landlords to sures they’re probably not used to. make it a little bit worse.” pass along up to $75 take people by the “It’s a great opportunity for insurance A second option for the a month to tenants hand, and help guide professionals to step forward, take people property owners who don’t to cover the costs. them through a fairly by the hand, and help guide them through want to or can’t afford to However, tenants faccomplicated process.’ a fairly complicated process,” he said. “The do the seismic retrofitting ing hardship may use bottom line is there’s going to be roughly is to demolish the building an appeal process for 15,000 buildings in the city of Los Angeles and start over or sell the property off. pass-throughs. that are going to either be seismically Brown thinks this avenue may prove The city is offering a public financing retrofitted or demolished in just the next attractive to some landlords. option through AllianceNRG/Deutche Bank few years. That suggests to me that plan “Depending entirely on the neighborfor property owners wishing to finance both ning departments and building inspecting hoods that these buildings are in, it’s entiremandatory and voluntary seismic retrofits. departments in the city of Los Angeles are ly possible that you could demolish the This program allows San Francisco building going to be overwhelmed.” building and either sell the vacant land for owners to finance 100 percent of the required development or redevelop it yourself into earthquake retrofit work over 20 to 30 years Hear an extensive podcast with Brown at something that would generate more reveto be repaid through an additional assesswww.insurancejournal.tv. www.insurancejournal.com

December 21, 2015 INSURANCE JOURNAL-WEST | W3

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News & Markets Reforms May Have Caused Drop in Medical Payments in California, Study Shows

edical payments per claim in California fell 5 percent in 2013 for claims with more than seven days of lost time at 12 months of experience, a trend that likely reflects the early impact of the 2012 workers’ compensation reform legislation, according to a recent study by the Workers Compensation Research Institute. The report, CompScope Medical Benchmarks for California, 16th Edition, shows California’s experience differed from many of the 17 states WCRI studied. In most states, medical payments per claim grew in 2013. Sections of Senate Bill 863, which took effect in 2013, reduced fee schedule rates for services at ambulatory surgical centers. The bill also eliminated separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries, and it required a $150 fee to file liens against an

employee’s workers’ comp benefits and a $100 activation fee for liens already filed. In January 2014, the law began phasing in the use of a fee schedule based on Medicare’s Resource-Based Relative Value Scale. The transition is scheduled to take place over four years and remain in effect until the Division of Workers’ Compensation adopts an RBRVS fee schedule that allows no more than 120 percent of the aggregate fees allowed by Medicare. The study shows ASC facility payments per claim fell nearly 24 percent in 2013, and following the state’s transition toward a RBRVS fee schedule, prices paid for primary care increased in 2014, while some specialty care prices decreased. “The 2013 decrease in medical payments per claim followed a period of moderate growth from 2010 to 2012,” Ramona Tanabe, executive vice president and counsel for

Rideshare Operators Don’t Have to Provide Driver Names in Vegas

idesharing companies in Las Vegas, Nev., such as Uber and Lyft won’t have to hand over lists of their drivers to Clark County commissioners after all. Commissioners voted in early December to approve its business licensing ordinance without language requiring the companies to provide driver names. The county’s legal staff said the requirement violated state law. The law doesn’t prevent county-run McCarran International Airport from asking for a list, though. Lyft is the only ridesharing company at the airport so far after it agreed to temporary permit terms including handing over a list of drivers upon request. Uber hasn’t

W4 | INSURANCE JOURNAL-WEST December 21, 2015

agreed to the terms and drivers have been issued 1,575 citations since August for dropping off or picking up passengers without a permit. Final permit terms are being drafted and will require county approval. Copyright 2015 Associated Press.

WCRI, said in a statement. “In future studies, we will continue to monitor the impact of SB 863.”

Southern California Man Arrested for Fraud After Crashing BMW in Race

fter Andres Hernandez, 36, of Lakewood, Calif., totaled his BMW while racing, he then allegedly then provided false statements to his insurer about the location of the collision. He was paid $64,860 for the claim, and was subsequently Andres Hernandez arrested in mid-December on two counts of auto insurance fraud. Hernandez told his insurer that he crashed his 2015 BMW M3 on Angeles Crest Highway, but California Department of Insurance detectives reportedly discovered the crash actually occurred at a racing event at the Auto Club Speedway in Fontana. Hernandez wrecked his vehicle while trying to get the best lap time when he spun out and hit the raceway wall. He allegedly claimed the collision occurred on the highway because his personal auto policy did not provide coverage for racing. www.insurancejournal.com

NATIONAL COVERAGE

Business Moves Associates of Glens Falls, Loomis & LaPann Associates of Glens Falls Insurance, an independent agency in Glens Falls, N.Y., announced that it has acquired Loomis & LaPann Inc., an insurance brokerage unit of regional commercial bank Glens Falls National Bank and Trust Company. Terms of the transaction were not disclosed. Loomis & LaPann, based in Glens Falls, traces its origins back to 1852. It focuses on amateur sports management, developing insurance programs designed for state high school athletic/activities associations, state high school coaches associations, the U.S. Olympic Committee national governing bodies and amateur sports groups/associations. Currently Loomis & LaPann insures more than 100,000 high school coaches. The Loomis & LaPann name will stay intact, and Loomis & LaPann’s Sports Senior Vice President Greg Joly and other associates will join the Associates of Glens Falls Insurance staff and work out of Associates’ office in downtown Glens Falls. Founded in 1967, Associates of Glens Falls Insurance offers personal and commercial property/casualty insurance as well as life/health insurance. The agency reports approximately $26 million in premium volume. Woodruff-Sawyer, Capstone Insurance Woodruff-Sawyer & Co., an independent brokerage based in San Francisco, announced that it will be acquiring Capstone Insurance, the property/casualty brokerage division of Newton, Mass.-based financial services firm EBS Capstone. The transaction is expected to be completed by the end of the year. The terms of the deal were not disclosed. Once the transaction is complete, Capstone Insurance will be rebranded as Woodruff-Sawyer & Co. New England and will operate from a Newton office. It would be the first East Coast location for Woodruff-Sawyer & Co. which currently has offices in California, Colorado, Hawaii, Oregon and Washington. EBS Capstone will continue on separately with its non-P/C brokerage businesses after www.insurancejournal.com

the transaction, offering investing and financial services and employee benefits services. Founded in 1918, WoodruffSawyer & Co. offers insurance, employee benefits and risk management services. The firm has approximately 425 employees. U.S. Risk, Matias Underwriters U.S. Risk Insurance Group Inc., a managing general agency and surplus lines wholesaler based in Dallas, announced that it has acquired Matias Underwriters LLC in Boston. Terms of the transaction were not disclosed. Matias Underwriters is a workers’ compensation program administrator providing underwriting, marketing, and policy management services for its carrier partners. As part of the transaction, U.S. Risk has named Glenn Matias, who has been serving as Matias Underwriters’ president and chief executive officer, as National Practice leader and vice president for the Workers’ Compensation Division of U.S. Risk. Matias will manage the Boston, Dallas, Houston and Sarasota, Fla., Workers’ Compensation Divisions, which have the ability to write both primary and excess workers’ comp for an expanded number of classes in all 50 states. Matias brings with him more than 27 years of experience in the insurance industry and specializes in developing and managing workers’ comp niche programs. At U.S. Risk, he will focus on increasing overall workers’ comp writings by reinvigorating and strengthening U.S. Risk’s current carrier relationships and expanding the carrier lineup designed for the workers’ comp needs of underserved markets and industries. Orchid Underwriters, Platinum Partners Orchid Underwriters, a Vero Beach, Fla.-based managing general agent providing excess & surplus (E&S) insurance for coastal properties, has signed a definitive

agreement to acquire Platinum Partners, a Peabody, Mass.-based wholesale brokerage focused on the high net worth personal lines marketplace. The transaction is expected to close in January 2016. Terms of the agreement were not disclosed. Founded in 2002, Platinum Partners provides independent insurance agents with access to the high net worth market, in both the admitted and nonadmitted spaces. The transaction expands Orchid Underwriters’ reach into the New England distribution network, as well as the high net worth market, which includes high-value homes, valuable articles (fine arts, jewelry, wine), personal umbrellas, automobiles (collector’s cars, high-performance driving events), watercraft, aviation, and other specialty products. With this acquisition, Orchid Underwriters will expand into 15 new states, extending the firm’s footprint into 43 states. Orchid Underwriters will now have an office in Peabody, in addition to its headquarters in Vero Beach and an office in West Atlantic City, N.J. Platinum Partners’ employees will join Orchid Underwriters, and Platinum Partners President Tim deRosa will become a member of Orchid Underwriters’ senior continued on page 12 December 21, 2015 INSURANCE JOURNAL-NATIONAL | 11

NATIONAL COVERAGE

Business Moves key strategic areas. Risk Strategies operates from more than 20 offices across the country.

continued from page 11 management. Founded in 1998, Orchid Underwriters provides specialty insurance products for homeowners and small businesses in the U.S. and the Caribbean. Risk Strategies, Re-Solutions Intermediaries Risk Strategies Co., a privately held, national insurance brokerage and risk management firm, has acquired Re-Solutions Intermediaries LLC, a reinsurance specialist focused on assisting healthcare organizations around the world manage risk. Headquartered in Minneapolis and founded by President Tony Plampton, Re-Solutions provides analytics, consulting and creative reinsurance solutions for the health, accident, life and disability insurance industries. Re-Solutions will be established as a new division under Risk Strategiesâ&#x20AC;&#x2122; national Healthcare Practice. In June, Risk Strategies also acquired Dubraski & Associates, a national player providing insurance and reinsurance solutions to the healthcare industry in all areas of the business. In October, Risk Strategies announced a significant investment by new majority owner Kelso & Company to build-out its national practices and accelerate growth in 12 | INSURANCE JOURNAL-NATIONAL December 21, 2015

Hub International, Forest Financial Group Inc. Chicago-based global insurance broker Hub International Ltd. (Hub), has acquired the assets of Forest Financial Group Inc. (FFG). Terms of the acquisition were not disclosed. Based in Lake Forest, Ill., FFG specializes in employee benefits consulting. FFG was founded in 1998 by Nicholas T. Gialamas, president and CEO. He will join Hub Midwest-West as area president and report to Neil Hughes, president and CEO of Hub Midwest-West. J. Smith Lanier, Rogers, Parker & Associates J. Smith Lanier & Co., an independent brokerage firm, has announced a stock merger with Rogers, Parker & Associates Inc., of Florence, Ala., effective Dec. 1. Rogers, Parker & Associates Inc. traces its origin to 1898, when agency owners contracted with United States Fidelity & Guaranty Company (USF&G). Rogers, Parker & Associates Inc., has represented USF&G (St. Paul/Travelers) longer than any other insurance agency in the state of Alabama, according to the company. J. Smith Lanier & Co., headquartered in West Point, Ga., is an employee-owned company that was founded in 1868. The company has since grown from a three-employee local agency to a major regional firm employing more than 600 employees in eight divisions and 22 branch offices. J. Smith Lanier & Co. offers commercial and personal lines insurance, employee benefits, surety, aviation and risk control. All Risks, Specialty Risk Underwriters All Risks, Ltd., a nationwide independent wholesaler, has acquired Specialty Risk Underwriters (SRU), a national program administrator in St. Petersburg, Fla.

Specialty Risk Underwriters has developed a variety of accident insurance plans and national comprehensive packages for sports organizations, school districts, colleges/universities, camps, special events and individual students. SRU joined All Risks, Ltd. effective Nov. 1. Terms of the transaction were not disclosed. Kent and JoAnna Lynch, founders of Specialty Risk Underwriters, have joined the Alive Risk division of the National Specialty Programs unit of All Risks as directors of the Accident Medical Programs. They will continue to operate from St. Petersburg, running the operations, marketing and underwriting of their national products. Accident medical products are available to students of intercollegiate sports, public, private, and parochial schools; catastrophic accident for schools and sports organizations; accident for athletes, coaches, trainers and invited guests; accident for volunteers and staff members of childcare programs; accident for volunteers at events, as well as K-12 voluntary student accident plans. International travel medical insurance is also available. All Risks, Ltd., based in Hunt Valley, Md., offers insurance products with a full service platform of brokerage, contract binding, exclusive national programs and specialty personal lines products for retail insurance agents and brokers nationwide. TLB, Leavitt Group Walnut Creek, Calif.-based TLB Insurance has affiliated with Leavitt United Insurance Services, of which TLB will now be a subsidiary. As a subsidiary of Leavitt United, TLB will continue to operate locally. TLB is a longtime member of United Valley Insurance Services, which provides insurance company relationships and resources. TLB Insurance was formed in 1994 as a full service independent insurance agency. It has served its clients from its Walnut Creek location since 2006. Leavitt United Insurance Services is part of Leavitt Group, a privately-held insurance brokerage. www.insurancejournal.com

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News & Markets Best, Worst States for Insurance Regulation

ermont, Utah, Iowa, Virginia and Kentucky get an “A” and North Carolina an “F” in one think tank’s annual grading of states on how they regulate the property/casualty insurance industry. The 2015 Insurance Regulation Report Card, the R Street Institute’s annual publication, assigns scores in 10 different areas including solvency monitoring, anti-fraud efforts, rating and underwriting freedom, minimizing politicization of regulation, consumer protection and fostering competitive markets. For 2015, all but nine states received a passing grade of “C” or better in the report. In last year’s report, 11 states failed to get a passing grade. “On balance, we believe states have done an effective job of encouraging competition and, at least since the broad adoption of risk-based capital requirements, of ensuring solvency,” the report says. However, the report takes issue with state regulations that it says lead to inefficiencies, as well as state laws and regulations that “have the effect of discouraging capital formation, stifling competition and concentrating risk.” “Reviewing the data on insurance in 2015, we see mostly stable trends in consumer and business freedom in state insurance markets,” said R Street Editor-In-Chief and Senior Fellow R.J. Lehmann, the author of the study. “In some states — notably Florida — real efforts were made to scale back, or otherwise place on more sound financial footing, residual insurance markets and state-run insurance entities. Other states, notably North Carolina, appear to be moving in the wrong direction.” R Street said North Carolina received a failing grade in part due to the state’s rate bureau system and growth of the residual 14 | INSURANCE JOURNAL-NATIONAL December 21, 2015

market FAIR Plan and Beach Plan. Louisiana, New York, Texas, Florida, California, Hawaii and Montana also came in at the bottom with low grades of “D”. Vermont did well enough in almost all areas including consumer protection, politicization, auto and homeowners insurance environments, rate freedom and clarity and regulatory restrictions to earn the best grade in the country. Other states receiving “A” grades in this 2015 report were Utah, Iowa, Virginia and Kentucky. In 2014’s report card, eight states — Vermont, Virginia, Illinois, Iowa, Maine, Utah, Ohio and Kentucky — received “A” grades. But this year Illinois, Ohio and Maine fell to a “B.” R Street bills itself as a think tank dedicated to free markets. R Street believes that “an open and free insurance market maximizes the effectiveness of competition and best serves consumers.” The think tank says “that means states should regulate only those market activities where government is best-positioned to act; that they should do so competently and with measurable results; and that their activities should lay the minimum possible financial burden on policyholders, companies and, ultimately, taxpayers.” R Street also publishes the Right Street blog on InsuranceJournal.com. R Street says it attempts to answer three questions with its analysis: • How free are consumers to choose the insurance products they want? • How free are insurers to provide the insurance products consumers want? • How effectively are states discharging their duties to monitor insurer solvency, police fraud and consumer abuse and foster competitive, private insurance markets?

Costs to Industry The report also notes that states continue to draw far more in regulatory fees and assessments from the insurance industry than they spend on insurance regulation. According to the report, the 50 states, Puerto Rico and the District of Columbia spent $1.33 billion on insurance regulation in 2014 but collected close to $3 billion in regulatory fees and assessments from the insurance industry. “These surplus regulatory fees and assessments end up in state coffers to patch other holes in state budgets,” Lehmann said. “They serve as a hidden tax on insurance consumers, raising the cost of coverage for everyone.” If premium taxes, fines and other revenues are included in the tally, only 6 percent of the $21.9 billion states collected from the insurance industry last year was spent on insurance regulation, down from 6.4 percent the prior year and 6.6 percent in 2012, according to the report. Summary of Grades The states receiving “A” grades are: Vermont (A+), Utah, Iowa, Virginia and Kentucky while Nebraska, Tennessee and South Carolina got an “A-.” North Carolina received an “F”, while Louisiana, New York, Texas, Florida, California, Hawaii and Montana got a “D.” Eighteen states received “B+”, “B” or “B-” scores: Wyoming, South Dakota, Nevada, Oregon, Arizona, Colorado, Missouri, Wisconsin, Idaho, New Hampshire, Illinois, Maryland, Maine, New Jersey, Ohio, New Mexico, Arkansas and Connecticut. Fifteen are graded “C+”, “C” or “C-”: Indiana, Minnesota, Kansas, Rhode Island, Alabama, Alaska, North Dakota, Delaware, West Virginia, Pennsylvania, Michigan, Oklahoma, Washington, Georgia and Massachusetts. The full report, The 2015 Insurance Regulation Report Card, can be viewed at: http://www. rstreet.org/wp-content/uploads/2015/11/ RSTREET46.pdf. www.insurancejournal.com

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SPECIAL REPORT

Year in Review The Top Insurance News Stories of the Year 2015 By Andrew Simpson

he year 2015 was a year during which the property/casualty insurance industry got a glimpse at its future in the form of disruptive forces, new competitors, new leaders and emerging risks. Also, some of the news revived long-running stories. It was a year when insurance professionals turned in record numbers to the news and features on InsuranceJournal.com to keep up with developments. Judging by readership numbers, they found these stories the most important and interesting of 2015. 1. The ACE-Chubb Marriage The biggest story of the year — ACE’s $28.3 billion acquisition of Chubb — broke on July 1 and the story and its offspring have been grabbing readers’ attention ever since. ACE shareholders will own 70 percent of the combined company, while Chubb shareholders will own 30 percent. The news sparked questions about competing offers (Chubb said it didn’t seek any and Travelers said it passed on the opportunity). The deal is expected to close in the first quarter 2016, although ACE CEO Evan Greenberg has acknowledged that integration will take years. He also vowed that the “new” Chubb (the merged entity will assume the Chubb name) will preserve the “old” Chubb’s agency culture. Greenberg has been methodically unveiling his organizational structure and management teams for the post-merger company. The deal has been approved by shareholders (who nixed an $80 million golden parachute for retiring Chubb CEO John Finnegan) and antitrust watchdogs. 2. Google’s Auto Insurance Entry Insurance Journal was among the first to report it on Jan. 15: Google Poised to Enter U.S. Auto Insurance Market and again on March 5 when it actually happened: Google Compare for Car Insurance Has Arrived. This news continues to stir reaction with some downplaying the entry (Google will 16 | INSURANCE JOURNAL-NATIONAL December 21, 2015

face the same obstacles faced by others selling insurance online and Google is duping customers), and others warning agents not to take it lightly and telling agents that if they aren’t scared of Google, they should be. 3. Cyber Risk Evolution No risk topic generated more worry than cyber, even though, or perhaps because, it is still evolving. One of the top cyber stories asked, just how costly and fast-growing is cyber risk? Much of the news supplied answers. Cyber was at the top of their list of concerns by CEOs and the public. There were data breaches at Anthem and VTech (and elsewhere that did not make the news because breaches have become so commonplace). More than four in 10 medium sized businesses reported having a breach. Experts worried about potential breaches affecting every type and size of organization or connected thing. By close of year, there was some progress to report: cyber underwriting had moved from “toddler” to “teen” as insurers learned from their claims. 4. CEO Successions This year has been a year when for a variety of reasons, including planned retirements, shareholder pressures and, unfortunately, serious illness, a surprising number of high-profile CEOs stepped down, opening the door for new leaders at the helm of some of the industry’s biggest brands. Two of the industry’s giants — Hartfords’ Liam McGee, 60, and AIG’s and MetLife’s Robert Benmosche, 70, passed away in 2015 after battles with cancer. They had passed their batons to their successors — Christopher Swift and Peter Hancock — before their deaths. In August, Travelers CEO Jay Fishman citing his ALS symptoms, stepped down, replaced by insider Alan D. Schnitzer. William R. Berkley, founder

of W.R. Berkley Corp., stepped aside this year as planned; his son, W. Robert Berkley Jr., took control. Also in the Class of 2015 was Michael Tipsord, who succeeded State Farm’s longtime CEO Edward B. Rust Jr. in September. This month, Zurich Insurance Group’s CEO Martin Senn resigned. Ohio-based State Auto Financial Corp. and State Auto Mutual Insurance hired Michael LaRocco as president and CEO, replacing Robert Restrepo Jr. Frederick H. Eppinger, 56, CEO of

The Hanover Insurance Group, announced this fall he is stepping down to pursue other interests. Vermont Mutual’s William Catto retired in June, when he was succeeded by Daniel C. Bridge. Citing personal reasons, Manny Rios resigned as CEO of American Modern in August. Others to step down www.insurancejournal.com

in 2015: USAA’s Josue Roble; Ohio Mutual’s Jim Kennedy (succeeded by Mark Russell) and NCCI’s Stephen Klingel (who will be replaced by Swiss Re’s William Donnell this month). There are more changes coming in early 2016. Markel Corp. reported that, Thomas S. Gayner, 53, and Richard R. Whitt, III, 51, will serve as co-CEOs starting in the new year. As the ACE-Chubb deal closes, Chubb CEO John Finnegan will retire and Chubb’s Dino Robusto will join CNA Insurance to succeed CEO Tom Motamed when he retires next December. Also ACORD’s Greg Maciag intends to retire in January and Erie Indemnity’s Terrence Cavanaugh and Kemper CEO Donald Southwell plan to retire in 2016. 5. Disruption and Innovation In addition to being glued to the Google news, readers were drawn to the stories predicting major change ahead. They included the prospect of driverless cars and on-demand services erasing as much as 60 percent of the auto insurance market; how wearable devices collecting real-time data could disrupt workers’ comp and claims managewww.insurancejournal.com

10. Auto Insurance Pricing Whether it was Geico and Allstate raising their auto premiums, auto insurers’ losses mounting, or the debate over of price optimization, the competition in auto insurance was on the minds of readers.

ment and other segments of the industry; and how drones could revolutionize claims and risk management. Marketers have lost control of insurance buying and soon, small groups of people could be running their own insurance companies. It has all convinced the industry to finally take the need for innovation seriously.

Other Popular Stories of 2015: The Supreme Court ruling on gay marriage; the Willis-Towers Watson merger; Uber worker classification; calls by activist investor Carl Ichan to split AIG into three companies; continued downward pricing for re/insurance; and renewal of the federal terrorism reinsurance program.

6. Workers’ Comp’s Grand Bargain National Public Radio and ProPublica launched an investigative series on the workers’ compensation system that questioned whether reforms in states have changed the system to the point where it no longer serves as a fair trade-off and exclusive remedy for injured workers who give up their right to sue.

Top ‘Celebrity’ Stories of 2015:

• No Coverage for Tony Stewart in Ward

7. Greenberg’s Beef with AIG Bailout The $85 billion AIG bailout was in 2008 but the headlines have continued. This year saw Maurice Greenberg, former AIG CEO and now CEO of Starr, win his long-shot court fight over his claim that the government’s bailout terms were unfair to AIG shareholders including Starr. U.S. Court of Federal Claims Judge Thomas Wheeler agreed, ruling the Federal Reserve set illegal conditions for the $85 billion rescue loan to AIG in 2008, though he didn’t award damages. Greenberg is still trying to get damages. 8. Weather Watching The industry always follows the weather closely. The continuing California drought, including the related wildfire threat, topped the bad weather news. The Atlantic hurricane season stayed below normal with 11 named storms, while the eastern and central Pacific were above normal with both regions shattering all-time records. 9. Obamacare Ongoing Obamacare remains controversial in certain circles and every story brought reader comments, whether it was about progress, a setback, an enrollment marker, religious complaint or another vote to repeal. The most popular story: “How Long Will Health Insurers Remain Patient with Obamacare?”

Race Car Death • College Player Files $3 Million Claim with Lloyd’s for Drop in NFL Draft • 103 Year-Old Myron Steves’ Last Message: All About Risk

Top Rankings of 2015:

• Top 100 Independent Agencies • How States Rate on Insurance Regulation • Top 10 Most, Least Expensive Cars to Insure • How States Rank High to Low in Workers’ Compensation Premiums • Top 25 Workers’ Compensation Insurers • Hot Insurance Markets for 2015 • 10 Most Common Small Business Claims

Top Most Popular Advice Articles of 2015:

• 101 Sales & Marketing Ideas • Labor Department’s 6-Part Test for Classifying Employees, Independent Contractors • What 25 Years in Insurance Has Taught Me • What Agents Should Know About Flood Insurance Changes • You Suck!: Your Personal Lines Clients and Their Tweets, FB Posts and Yelps! • How to Know What Insurance Customers Want • Why Are Agency Employees Unhappy?

Top Interviews of 2015:

• Progressive Insurance CEO on 5 Major Macro Trends • A Conversation on Innovation and the Industry’s Future with ACORD’s Hartnett • Google Dupes Insurance Buyers: Insurance Agent Executive Bill Wilson • Why Now Is Time to Privatize Flood Insurance: a Candid Conversation with Hiscox USA CEO Walter • InsurBanc’s Tralka on State of M&A Market for Agencies • Florida’s Kevin McCarty Talks Florida’s Accomplishments, Current Controversies

December 21, 2015 INSURANCE JOURNAL-NATIONAL | 17

SPECIAL REPORT

Markets in Review Top 5 Markets of 2015 By Amy O’Connor

here was no shortage of new products launched by the insurance industry in 2015. Cyber, a risk that has consistently seen a lot of activity over at least the last several years, continued to be on the top of the industry’s radar. Other segments insurers focused on included recreational boating, financial services, ridesharing and energy. Read on for a list of new products introduced in the top markets of 2015:

Cyber There were too many new products to name in the cyber segment this year, but the real story behind new cyber coverages was insurers’ focus on developing more niche-specific cyber options. One such niche was the high net worth space. Privilege Underwriters Reciprocal Exchange (PURE), a high-net worth insurer, partnered with a security firm to offer a cyber program for high net worth individuals and families. Experts expect more cyber products will be developed on the high-net worth side. “We’re looking at high net worth individuals as a more of a business exposure than as a consumer exposure,” said Matt Cullina, president and CEO of IDT911, a cyber breach mitigation and response company that works with insurance carriers. “There’s certain homeowners insurance coverages now that are looking to add cyber type 18 | INSURANCE JOURNAL-NATIONAL December 21, 2015

insurance offerings.” Insurers are also trying to grab more cyber market share of small businesses. “It appears that small business insurance purchasers are realizing they are in as much jeopardy for a breach as their larger counterparts,” said Steve Haase, president and CEO of InsureTrust. Haase said small businesses are finding cyber policies are valuable — offering risk management services — and affordable. “Prices have generally come down from where they were five years ago and coverage has become cutting edge.” ISO released cyber insurance coverage options for small- and mid-size businesses in March as optional endorsements to the ISO Businessowners Program. Main Street America Group also launched a cyber risk protection product for “main street” businesses in 19 states. Other segment-specific cyber products this year included: • ACE introduced a privacy and network liability coverage in its private and not- for-profit organization package policy. • The American Bankers Association Insurance Services (ABAIS) launched a new cyber product for banks that are insured through the Association. • Nationwide certified public accountant insurer CAMICO launched CyberCPA for accounting firms in October. • The Hartford expanded its management and professional liability insurance program for asset managers to include new and extended coverage for cyber and regulatory risks. Recreational Boating Insurers weren’t afraid to get in the water with the boating segment this year. It may signal a new outlook from insurers on the traditionally risky segment as boating-related accidents were down 14 percent in 2013, according to the U.S. Coast Guard. The total reported recreational boating accidents also decreased 10 percent from 2012 to 2013.

Or insurers could have been responding to the increase in overall boating sales. A report from the National Marine Manufacturers Association found personal watercraft sales increased 21.6 percent and total new boat imports were up 7.2 percent. “Americans are taking to the water: 87.3 million Americans participated in recreational boating at least once in 2014,” said the report. Whatever the reason, insurers responded with new products in 2015 : • ACE introduced an online tool to quickly generate quotes for boats. • Ironshore launched the Ironshore Premier Watercraft program, which offers insurance exclusively through the National Boat Owners Association. • XL Catlin began covering yachts of all sizes and created a larger underwriting and claims team to cover yachts valued from $50,000 to $50 million. • Recreational boat insurer SkiSafe Insurance expanded its program to cover sailboat risks with live aboard exposures. • Norman-Spencer Agency’s Marine Insurances division launched its TradeWinds Yacht Insurance Program for yachts up to $2 million. • And following the sharing economy trend, BoatUS launched Peer-to-Peer Boat Rental insurance policy for boat owners to use when renting out their boats through Boatbound, a nationwide boat rental marketplace. Financial Services Those working in the financial services www.insurancejournal.com

industry as investment, hedge fund, and financial advisors such as accountants or bankers, have faced increased litigation and liabilities to emerging risks like cyber in recent years. “There is so much regulation around finance — they are constantly seeing something new out of the SEC,” said Paul Schiavone, regional head of financial lines in North America. In 2015 the insurance industry started to address many of these exposures. Allianz rolled out numerous financial lines coverage options. The new products address many financial services including insurers, banks, investment managers, private equity, and hedge funds. “It’s important to keep up to speed on the exposures for the financial industry and listen to what customers need because that is where the next product comes from,” said Schiavone. Other insurers who created new products for this segment in 2015 included: • Argo Pro added its Asset Management

Playbook product that includes capacity of up to $15 million for investment advi sors, wealth management firms, and other related financial institutions. • Berkshire Hathaway Specialty Insurance (BHSI) launched Professional First Bankers Professional Liability for banks, their executives and employees. • XL Catlin created a suite of new financial institution bond insurance policies for financial industry companies. • QBE North America and MGU Jorgensen & Co. partnered to provide accountants www.insurancejournal.com

and consultants professional liability insurance. • Lockton Affinity and Monitor Liability Managers began offering a national CPA professional liability program. • OneBeacon started a new Financial Institutions business unit targeting all classes of financial institutions.

were launched this year by GEICO, USAA, MetLife Auto & Home, American Family Insurance and Allstate.

Ridesharing As state lawmakers worked to develop regulations for the emerging ridesharing industry, the insurance industry started rolling out coverage to address the insurance needs for these entities. The National Association of Insurance Commissioners (NAIC) tried to help jumpstart the efforts with a white paper on how state regulators should address the insurance of TNCs. The paper suggested that regulators and legislators divide the rideshare process into three periods and spell out coverage requirements TNC drivers must have during each one. Insurers have formulated policies through this concept. “[Ridesharing insurance products] are being introduced by innovative insurers willing to take on the calculated risk…” the paper states. “Because the products are not being standardized but are being developed by different insurers, they will likely establish coverage via different methods for different time periods.” ISO introduced two new personal auto coverage options for ridesharing drivers when they’re logged in but don’t have any passengers after the NAIC paper. Farmers Insurance introduced coverage in Colorado at the beginning of the year and later in Kansas. It was also the first insurer in California to offer a ridesharing insurance product back in May in anticipation of the rideshare law going into effect in the state on July 1. Insurance Commissioner Dave Jones said at the time, the product launch was a “big deal.” Just 28 states have enacted ridesharing regulations so far, and insurers have mainly released products in those states with clear guidelines. Other notable ridesharing products

Energy As predicted earlier this year, the energy segment was a favorite of the insurance industry yet again in 2015. But it was the big names in insurance who made the most notable product moves this year. More states and companies are investing in renewable energy technologies and new energy exploration, which are both costly and complicated to insure. The drop in the price of oil also weeded out some players. Companies that made product investments in this segment included: • Aon Benfield invested in a catastrophe model for marine and energy insurers. • XL Group’s venture capital fund acquired all the shares of energy insurance product developer New Energy Risk. • Energi launched a new workers’ compensation injury-reporting program. • Everest Insurance and AEGIS partnered to provide admitted coverage. • Ironshoren raised its energy sector capac ity limits to $35 million.

December 21, 2015 INSURANCE JOURNAL-NATIONAL | 19

SPECIAL REPORT

The Charity Issue IICF Unites P/C Industry for Record Year of Giving By Andrea Wells

harity begins at home... and in the office. The year 2015 was a record-setting one for charitable giving and volunteering by property/casualty insurance professionals in offices across the insurance industry. Leading the charitable activities for the industry is the Insurance Industry Charitable Foundation, or IICF, which held events across the nation in support of programs addressing education, children at risk, health and safety, disaster preparedness, and the environment. The single biggest week for IICF and the charities it supports was its annual Week of Giving from Oct. 10-17, when the largest number of insurance industry volunteers

ever, some 8,577 people in 76 cities across 30 states — provided more than 25,000 hours of service to community nonprofits. During that week, insurance professionals took part in volunteer projects including food programs, veteran support, homeless programs, and early literacy. “The Week of Giving represents some of the best that the insurance industry has to offer, with insurance professionals from coast to coast rolling up their sleeves to lend a helping hand to their communities 20 | INSURANCE JOURNAL-NATIONAL December 21, 2015

and neighbors in need,” said Bill Ross, CEO of IICF. “It is truly heart-warming to see vast numbers of industry volunteers across the nation uniting to support such great causes.” IICF’s focus on education has been realized with its Early Literacy Initiative, which aims to provide literacy tools and resources to underserved children and their families. The program is entering its third year in partnership with Sesame Workshop. IICF has provided grants totaling $750,000 toward the implementation of Every Day is a Reading and Writing Day. This free, online bilingual program gives parents who may not be able to afford other learning tools the access to resources that support children’s early literacy development. Ross says the initiative and partnership with Sesame Workshop have gone remarkably well. So well that Elmo even made an appearance at another popular IICF event in 2015 — the IICF Women in Insurance Global Conference held in New York City in June. This conference brought together more than 420 professionals from 10 nations for three days of discussion on gender and diversity in the insurance industry. “During our women’s conference we had a number of executives that were interviewed by Elmo,” Ross said. The IICF’s Women in Insurance series, which includes a global conference and regional forums, is the largest industry gender initiative today, according to Ross. The IICF rotates the Women in Insurance global and regional forums biannually. The IICF has

already begun making plans for its regional forums in 2016, which will take place in four cities in June 2016. Across the Pond The IICF also expanded its philanthropic reach across the pond this year, making London its first-ever international chapter. Ross said that the IICF model of competitors in the insurance industry coming together and collectively working on behalf of the community in its philanthrophic efforts is somewhat unique in the world, including in the U.K. “To our knowledge there is only one other organization like ours in the U.S. to represent the entire industry and in the U.K. it’s fairly unique as well,” Ross aid. Wendy Wilder is serving as the executive

director of IICF’s London Division. The London division has already held its first annual fundraising dinner and has several events planned for 2016, Ross said. “Funds will be used to support a local grant program similar to the other divisions, first with a focus on the London area but the division plans to broaden that focus later,” Ross said Within each IICF division a local grants committee, evaluates and makes recommendations on grants. “Historically we raise money from that region and reinvest back in that region so we don’t take money from one region and move it to another,” Ross said. “It’s a local grants program and we try to understand local needs.”

Women in Insurance Regional Forums 2016 New York, June 9 Chicago, June 13 Dallas, June 21 Los Angeles, June 23

Regional Giving

Charitable Giving Rises in the P/C Industry

S. property/casualty insurers have increased their charitable giving by an average of 15 percent since 2011, to an industry total of $575 million, outpacing inflation and moving closer to what many industry leaders believe the public expects, according to the updated “Charitable Giving in the Property/Casualty Industry” published by McKinsey & Co. in collaboration with the Insurance Industry Charitable Foundation (IICF). “The rise in charitable giving is very exciting,” said Bill Ross, CEO of IICF. “It’s really positive for our industry.” While the industry continues to direct almost two-thirds of its giving to three areas — education, health and social services, and community needs — the emphasis has shifted since McKinsey’s 2011 Charitable Giving report. Education funding has declined by about half, while contributions to health and social services increased by half and contributions to community needs rose by about 70 percent. “An increasing number of carriers are aligning their programs with their business strategy,” Ross said. The top three program areas for giving have remained consistent, but the order has shuffled: direct giving to education has www.insurancejournal.com

fallen by almost 50 percent, while health and social services and community needs are receiving much more attention. And as McKinsey found in its 2011 study, fewer than half of the carriers surveyed measure either the social or business impact of their charitable giving. “The more closely you can align charitable giving to your business the greater value generation you will see,” Ross said. That alignment means a lot of things to P/C carriers, Ross said. “The obvious one is disaster relief but if you look at insurance, the industry is involved with every aspect of life.” Most of the companies surveyed prefer to make contributions in communities where their employees live and work, especially near corporate headquarters. Only 16 percent say they do not consider geography when making contribution decisions. About 90 percent of carrier respondents said that partnering with other stakeholders can help increase the value of contributions, but not many are willing to join forces with their competitors, the McKinsey report found. “Besides doing the right thing and a good thing for the community, can you find a strategy for what you want to accomplish?” Ross asked. He and others think so.

side from national events such as the Week of Giving, IICF held charitable events across its regions, including: • IICF’s Northeast Division hosted its annual softball tournament in Central Park in July. There, 12 teams of insurance professionals from various companies came together to raise $50,000 for Our Military Kids, a nonprofit supporting military children. • In the Midwest Division, IICF’s Rock for Charity event in Chicago entailed of a battle of the bands, where insurance company bands competed to raise $37,000 and grant $25,000 to local Chicago charities. Cleveland’s Oktoberfest brought 350+ insurance professionals together to raise $80,000 for local charities. • Insurance professionals also came together under IICF to support relief efforts in Texas after severe flooding, raising over $70,000 in funds on behalf of IICF’s Texas/Southeast Division. • In the Western Division, over 100 insurance professionals attended IICF’s Insuring the Children Golf Tournament, which raised $93,000 for the Child Abuse Prevention Center of Orange County. • IICF also hosted several benefit dinners to support local grant programs. These benefit dinners include the Western Division’s Club100 Dinner, the Midwest’s Blazing the Trail Benefit Event, and Lone Star Legends Benefit Dinner. These events, alongside IICF’s 9th annual Northeast Dinner, which recently raised $1.26 million in grants for the Northeast division have united insurance professionals across in 2015.

December 21, 2015 INSURANCE JOURNAL-NATIONAL | 21

SPECIAL REPORT

The Charity Issue City of Hope Research, Treatments Boosted by Insurance Industry Pocketbooks By Don Jergler

hen many people in the insurance industry think of City of Hope, they probably associate it with the well-publicized National Insurance Industry Council’s Spirit of Life Award gala each year that has raised millions of dollars and brought together industry professionals from all walks of life. But there’s a lot more going on beside the annual event if you ask Ken Birkett, director of development of NIIC for the City of Hope. NIIC consists of representatives from the property/casualty industry, law firms, brokers, accounting firms, reinsurers, executive placement firms and actuaries in the insurance industry. According to Birkett, since its inception NIIC has raised more than $27 million to help fund the Duarte, Calif.-based center’s research efforts. “A lot of good things have come out of this group,” he said. The group has raised money through a variety of events, which include golf and bowling tournaments, as well as galas. Nearly 100 insurance companies and firms are now involved with NIIC, which was started in 1978. “We’ve just kind of grown that into a national presence,” Birkett said. The Spirit of Life Award gala is NIIC’s key annual fundraising initiative. Each year a prominent honoree is selected for work done in their profession and for their philanthropic efforts. The honoree is given The Spirit of Life Award, which is City of Hope’s top honor. This year’s honoree was Mike Miller, president and CEO of Scottsdale Insurance Co. The 2016 honoree is Christopher J. Swift, chairman and chief executive officer of The Hartford. Past honorees read like a who’s who in the P/C industry. 22 | INSURANCE JOURNAL-NATIONAL December 21, 2015

2015 City of Hope Spirit of Life Award honoree Mike Miller, president and CEO of Scottsdale Insurance Co.

One past honoree is Tony Markel, the man behind building Markel Corp. into one of the largest P/C insurance companies in the U.S. Markel became involved with City of Hope in 2006 after the NIIC honored him with its annual Spirit of Life Award. Months after Markel received the award his wife Sue was diagnosed with ovarian cancer. While she was being treated in Virginia, the Markel’s also got help and advice from cancer experts at City of Hope. Sue Markel fought the disease for 13 months before dying in 2008, but the experience with City of Hope inspired Markel to establish the Markel/Friedman Fund for Research into Ovarian/Peritoneal Tumors at City of Hope. The other name on the initiative is retired City of Hope CEO Michael A. Friedman, who is now an emeritus cancer

City of Hope Statistics

ity of Hope is a cancer and diabetes research and treatment facility funded by charitable groups, such as the National Insurance Industry Council. The Duarte, Calif.-based facility has some impressive accolades. Here are a few: In 2014 City of Hope was awarded more than $72.9 million in research grants and received roughly $249.8 million in revenues from patented technologies. Numerous breakthrough cancer drugs, including Herceptin, Rituxan and Avastin, are based on technology pioneered by City of Hope. Millions of people with diabetes benefit from synthetic human insulin, developed through City of Hope research. The facility was a pioneer in bone marrow and stem cell transplants, and has performed more than 12,000 such transplants. Surgeons at City of Hope have performed more than 10,000 robotic procedures for prostate, kidney, colon, liver, bladder, gynecologic, oral and other cancers. City of Hope holds more than 300 patents, and submits nearly 30 applications per year to the Food and Drug Administration for investigational new therapies. Scientists at the facility pioneered the application of blood stem cell transplants to treat patients with HIV- and AIDS-related lymphoma. Researchers there used a new form of gene therapy to achieve the first long-term persistence of anti-HIV genes in patients with AIDS-related lymphoma. This treatment ultimately may cure not only lymphoma, but also HIV/AIDS, and researchers are expanding their studies with a new clinical trial. Source: City of Hope www.insurancejournal.com

than 300 patents. “The science and technology that we’ve created directly impacts over 100 million people worldwide annually,” Birkett said.

Upcoming NIIC Events

Past City of Hope Spirit of Life Award honoree Tony Markel, vice chairman of Markel Corp. center director. Despite already reaching its goal, the initiative kick started by Markel will continue on, Birkett said. “Tony’s agreed to fund it for next year for a million dollars the first year and then at least $500,000 to $1 million for every after while he’s alive,” Birkett said. Several groups beside the insurance industry are involved in fundraising for City of Hope. Among the industries represented are groups from music and entertainment, office products, food, home improvement

and hardware and furniture. Before it became a research and treatment center for cancer, diabetes and other life-threatening diseases, City of Hope began in the early 1900s as a place to house sufferers of tuberculosis. It was originally named the Los Angeles Sanatorium, but its nickname City of Hope stuck. City of Hope operates on a budget of more than $1 billion per year, and employs roughly 4,000. More than 12,000 bone marrow and stem cell transplants have been performed by the facility, which holds more

Researcher at City of Hope research facility based in Duarte, Calif.

www.insurancejournal.com

February 17-21 Northern Trust Open Riviera Country Club Pacific Palisades, Calif. March 3 NIIC Honoree Campus Tour & Dinner Honoring Christopher Swift CEO, The Hartford City of Hope Campus – Duarte, Calif. Langham Hotel – Pasadena, Calif. April Hoops for Hope Nationally Presented by TRISTAR Los Angeles San Francisco Other Cities TBA May NLIC Swing for a Cure Caves Valley Golf Club Owings Mills, Md. June DFW Drive for Hope Topgolf, The Colony The Colony, Texas July West Coast Golf Event Hacienda Golf Club La Habra Heights, Calif. August Midwest Insurance Golf Outing Bryn Mawr Country Club Lincolnwood, Ill. August 17 Strike Out Cancer, Atlanta BowlMor Atlanta Atlanta, Ga. October 12 Drive for Hope, Tampa TopGolf Tampa, Fla. October 29 Spirit of Life Gala Honoring Christopher Swift CEO, The Hartford Los Angeles, Calif.

December 21, 2015 INSURANCE JOURNAL-NATIONAL | 23

The Charity Issue

SIUPREM

Gillis, Ellis & Baker

Employees of Gillis, Ellis & Baker Insurance (GEB) spent a recent weekend fixing up the exterior of the Gentilly home of Eleonor Sheppard. The GEB team repaired siding, painted the home’s exterior and built safe steps through Rebuilding Together New Orleans, whose mission is to allow low-income families to live in safety, warmth and dignity. L to R: Casey Darden, Howe Hubert, Margaret Hubert, Eleanor Sheppard, Sharon Miller, Brooke Davis, Karen Crouch, Charles Eshleman, Hill Dupuy, and Regan Dupuy

Over the past six years, with the support of Alpharetta, Ga.based premium finance company SIUPREM’s independent agency partners, SIUPREM CARES has donated more than $250,000 to breast cancer awareness and research. The company commits $5 for each commercial insurance policy financed to the American Cancer Society. The goal in 2016 is to donate an additional $70,000.

Target Markets Program Administrators ITC

Once a quarter, Carrollton, Texas-based Insurance Technologies Corp. (ITC) cooks dinner or lunch for the families staying at the Ronald McDonald House in Dallas.

Starkweather & Shepley

Higginbotham Assurant

Through the Assurant Foundation, the company’s philanthropic organization, Assurant and employees support and partner with organizations that improve communities. One effort includes partnerships with Habitat for Humanity chapters across the country to help build affordable housing for families in need. With a focus on homes and property, employees donate time and sweat equity to make the dream of owning a home become a reality for low-income families.

In partnership with the Community Foundation of North Texas, Higginbotham created the Higginbotham Community Fund in 2010 to provide monetary support to nonprofits operating in Texas. Since inception, the Higginbotham Community Fund has amassed $638,787 in employee contributions and pledges, $481,481 of which has been granted to more than 100 nonprofits in Texas. In addition to fundraising, employees get involved by joining the Higginbotham F.O.R.C.E. (Family Of Responsible Caring Employees) and engaging in charitable activities organized by the firm. In late May, the Higginbotham Community Fund granted $15,000 to nonprofit organizations in the most devastated flood areas of Texas, including Austin, Corpus Christi and Houston where Higginbotham has offices. Also, 20 employees volunteered with relief efforts that cleared debris and repaired homes along Blanco River in Wimberley.

24 | INSURANCE JOURNAL-NATIONAL December 21, 2015

Members of the Target Markets Program Administrators Association purchase, pack and ship more than 1,000 care packages to military men and women serving in Iraq and Afghanistan. In the “Packages From Home” Initiative, TMPAA Charities has raised almost $50,000 to purchase the materials and shipping for these packages.

Gowrie Group

On Nov. 15, Gowrie Group launched its 12th annual Gowrie Challenge with a matching gift of $25,000 to The Shoreline Soup Kitchens & Pantries. Partner sponsors are providing an additional $22,500 in matching funds. Meeting this year’s goal of raising $125,000 will put the lifetime total amount raised by the Gowrie Group Shoreline Soup Kitchen Challenge over the $1 million mark. The agency is challenging local businesses and individuals to join together to reach its goal. The Gowrie Challenge runs from Nov. 15 to Dec. 31.

Starkweather & Shepley Insurance’s Fred Tripp (former CEO of the agency) Walk for Wellness campaign raised funds and wellness awareness to benefit the local community. This year, Starkweather & Shepley teamed up with the Run for the Fallen Rhode Island, established to honor the memories and families of Rhode Island’s fallen heroes who have died since Sept. 11, 2001. The Starkweather & Shepley Charitable Fund also provides grants to local charities to give back to the communities it serves.

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Shepherd Insurance Haylor, Freyer & Coon CHS Insurance

CHS Insurance Agency was busy giving back to the community in 2015. Group volunteering involved sorting groceries at Neighbors Inc. food shelf and donating gifts for the holiday season to families in need. The entire agency also contributed ideas, crafting skills and donations to build a wheel barrow full of booze for a basket raffle in the company’s United Way annual campaign. The basket was valued at $985 and was one of the most popular raffle baskets for the United Way campaign.

In June, Haylor, Freyer & Coon Inc. partnered with ARISE for its “Corporate Days of Service”. ARISE is a non-profit, community-based organization that works to ensure that everyone, regardless of disability, has the power to make life choices and achieve their dreams. One of the ways they achieve this goal is through a 70-acre therapeutic horse farm which provides inclusive summer camp opportunities, horseback riding lessons and therapy for children with disabilities. Over the course of three days 65-plus employees painted barns, cleaned horse stalls and planted three large rain gardens to provide proper drainage for the new all accessible playground.

Otterstedt Insurance

At the Otterstedt Insurance Agency’s annual company picnic, with a Science Fiction theme, “where no Otter insurance agent has gone before,” which raised more than 2,000 rolls of paper towels for Mickey’s Kids and Canine Assistants, who provides service and therapy dogs for special needs individuals. All of the agency’s insurance carriers donated paper towels and AIG donated the most.

Shepherd Insurance is passionate about community service. Operation Shepherding began in 2011 as a yearround initiative to support the local communities where employees and clients of the agency live and work. In October, a group of approximately 80 Shepherd members whose team name was the “Unforgettables,” gathered to support The Walk to End Alzheimer’s. The team raised over $12,500 during their rookie year of the walk. The Shepherd Unforgettables were featured on local area billboards thanking them for their hard work, fundraising tactics and team spirit.

Auto Insurance Specialists Wortham Insurance INSURICA

INSURICA created U Serve — a community focused initiative that organizes opportunities for volunteering and gives employees a chance to take time off to give back. In 2015, U Serve coordinated volunteer opportunities with Habitat for Humanity, OU Medicine’s Corporate Challenge, and Positive Tomorrows. INSURICA is also a long-time Pacesetter with the United Way, matching employee contributions dollar-for-dollar.

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In 2015, Houston-based Wortham Insurance celebrated its 100-year anniversary by teaming with 11 of its insurance carrier partners on a major gift to fund the Wortham Insurance Visitor Center as a primary gateway to the newly renovated Buffalo Bayou Park in Houston, Texas. The Wortham Insurance Visitor Center will serve as an enduring symbol of Wortham’s commitment to supporting the communities it serves. Wortham employees supported the effort with a substantial number of volunteer hours to help groom landscapes created by the $55 million project to renovate Buffalo Bayou Park. The Wortham Insurance Visitor Center represents a “thank you” to the businesses and individuals that the firm has served for the past 100 years.

Hylant

Hylant supports the communities it serve through volunteerism, board service and philanthropic support. Here is a recent contribution to a local Ronald McDonald House.

The company and employees of Cerritos, Calif.-based Auto Insurance Specialists (AIS) are active givers, participating in several walk and run events. In April, a large group of AIS employees did the Los Angeles Ronald McDonald Walk for Kids. With a company contribution add-on, the group raised about $4,000 for this worthy cause. The following month, the AIS northern California office employees participated in the Bay-area Walk Now for Autism Speaks. In the fall, a team of AIS employees banded together to do MuckFest MS Los Angeles 2015. For the second year in a row, AIS had the largest corporate team. With a company match, the team raised over $7,500 to support the work of the National Multiple Sclerosis Society.

December 21, 2015 INSURANCE JOURNAL-NATIONAL | 25

The Charity Issue

Risk Strategies Horton Group Heffernan Insurance

Since its inception in 1988, Heffernan Insurance Brokers has given close to $7 million to charity. In 2006, we created the Heffernan Foundation to further support communities. And in 2014, the agency gave back 16 percent of its profits. Through its foundation, the agency created its own Grant-a-Wish program, providing two deserving children who’ve endured hardship the chance to create a happy, lasting memory. Also, through its support of CollegeTrack, the foundation is able to award a $100,000 four-year scholarship to one new college student each year.

The Horton Group always gives back two-fold. Each event includes on-site volunteers for the day as well as a financial contribution. Employees have packed food for the Children’s Hunger Fund, spent the day with members of the Smith Crossing Retirement Community, played bingo and served pizza to veterans at Manteno Veterans Home, donated meals and packed bags for its Thanksgiving Food Drive, made blankets for the children at Advocate Children’s Hospital, and bought Christmas presents for less fortunate children through a “Giving Tree” program.

SullivanCurtisMonroe

At SullivanCurtisMonroe Insurance Services LLC, an employee-driven committee, SCM Community, has led the charge to give back locally and worldwide. SCM gives time and resources to charities with varying focuses such as: child and family services, military/ service personnel, natural disaster relief, disease prevention/health promotion, and food banks/homeless missions. SCM employees also can take time away from work to help at local food banks.

In 2004, Risk Strategies Co. established a charitable foundation to encourage and support employee community-focused efforts. One of the foundation’s first collaborative endeavors was a Thanksgiving food drive for Boston area families in need. From its humble beginnings providing food donations to local families, this annual event delivered 200 Thanksgiving baskets to various charitable organizations in Eastern Massachusetts in 2015. Named in memory of one of Risk Strategies’ first employees, and the original inspiration for the Thanksgiving food drive, the Mary Louise Warren Memorial Thanksgiving Basket Drive now involves the efforts and financial support of Risk Strategies employees around the country.

USI InterWest HUB

This year, HUB International Northeast chose Volunteers of America as their charity of choice for the IICF’s Week of Giving in October. The “Gifts for the Holidays” campaign aimed to collect new/unopened gifts for children of all ages who are in homeless and domestic violence shelters, pre-K schools for kids with developmental delays, and group homes for at-risk youth.

One of InterWest’s fundamental guiding principles is to contribute generously to the betterment and strengthening of the communities it serves. InterWest’s charities are many and extend nationwide to those needing a helping hand. In 2015, InterWest donated more than $200,000 to support deserving organizations and those for whom they care.

26 | INSURANCE JOURNAL-NATIONAL December 21, 2015

Lockton

For more than 45 years, Lockton Associates have given back to their local communities. In the past year, Lockton contributed more than $4 million in sponsorships and charitable support to numerous organizations around the world. Highlights include: The Kansas City office had 96 percent participation in their United Way campaign this year, raising nearly $900,000. Mile High United Way honored Denver associates with their Emeritus Champion Award for raising nearly $750,000. Atlanta associates put together a last minute Thanksgiving dinner for veterans at the Veterans Empowerment Agency that included 130 pounds of turkey. Lockton’s Chicago office was recognized by the Carole Robertson Center as Corporate Volunteer Group of the Year.

During the month of August, more than 4,400 employees across the country from USI Insurance Services came together and helped almost 100,000 lives during the second annual USI Gives Back, a nationwide campaign where each of its 140 offices participated in local community service during 20 week days in August. Employees at USI’s corporate headquarters in Valhalla, N.Y., celebrated this event by packaging 4,000 pounds of rice into 2,000 zip locked bags at the Food Bank for Westchester in Elmsford, N.Y. Other local volunteerism that took place by USI offices included: numerous animal rescue and no kill shelters; senior centers; women crisis centers; youth and family services; food banks and depositories; homeless rescue missions; and beautification projects.

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Norman-Spencer Agency

PPIB AmWINS

During the months of May through September, AmWINS Group Inc. participated in the firm’s first Summer of Service, an initiative dedicated to helping the communities in which employees live and work. More than 2,000 employees donated just over 10,000 hours of community service, representing 34 offices and impacting 55 different organizations.

This year Professional Program Insurance Brokerage (PPIB) volunteered at the Marine Mammal Center located in Sausalito, Calif., for the IICF’s Week of Giving. PPIB was able to assist two days at the center sorting fish for the animals, scrubbing the pools that previous patients had been housed in, and providing overall cleaning and sanitation treatment. Shown: Northern elephant seal Fortissima stayed at The Marine Mammal Center for four months after being found alone on a beach at less than a month old. (Photo credit: Ingrid Overgard © The Marine Mammal Center)

All Risks Buddy Walk

Joyce Unkraut of KDHK Insurance believes strongly in the ideals of the Down Syndrome Association of Greater Cincinnati (DSAGC). She has been involved with the nonprofit’s Buddy Walk fundraiser, shown here, since one of her friends had a child with Down syndrome 12 years ago and a nephew was born a couple of years later with Down syndrome. Fellow KDHK employees have since joined the cause, altogether raising more than $75,000 as part of the “Wolfie’s Wieners” team.

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Tiffany Way in the All Risks Austin, Texas, office has a personal fundraiser attempting to raise $40,000 for the Children’s Blood and Cancer Center of Austin. She is going to shave her head bald, then perform as her clown alias “Wendi Sillytoes” for the children on April 1, 2016. In addition to shaving her head, she is going to shave a logo of the largest corporate donation into her head for seven days. More information can be found: https://www. linkedin.com/pulse/corporate-challenge-tiffany-way?trk=prof-post

Blue Goose

The Honorable Order of the Blue Goose International is a fraternal organization of individuals who work in the insurance related industry. Blue Goose members across the United States and Canada support hundreds of organizations in both countries with donations of goods, service hours and financial support. During its fiscal year ended June 2015, the group reported donations totaling in excess of $300,000 for charity, or nearly $80 per member.

In late 2014, Norman-Spencer Agency established the nonprofit foundation called NS Cares as a platform to help the various communities the agency serves, support national charities and organize volunteer efforts. In 2015, NS Cares raised $103,000 for various non-profits like the March of Dimes, Habitat for Humanity, Crayons to Classrooms and the American Heart Association. Employees have volunteered more than 150,000 in volunteer hours over the same time period.

Member Insurance Applied Systems

This year, Applied Systems sponsored and supported hosting the Georgia Chapter’s Drive for Charity event at TopGolf hosted by the Georgia Chapter Insurance Industry Charitable Foundation (IICF). Drive for Charity was the first annual event to support the IICF community grant’s program in Georgia and invited local insurance industry professionals to compete against one another in golf driving and accuracy competitions. The event also features a silent auction, delicious refreshments and prizes throughout the night. The event was attended by more than 375 individuals and resulted in more than $100,000 for charity.

Since 2003, Member Insurance Agency has been involved with the Big Brothers Big Sisters Lunch Buddy program. Once a week during the school year, Member Insurance employees visit with their “little” to play games, help with homework assignments, and be a friend that the child can rely on each and every week. The program offers a unique way for employees to volunteer their time, demonstrate their mentoring skills and serve as a role model.

December 21, 2015 INSURANCE JOURNAL-NATIONAL | 27

NATIONAL COVERAGE

MyNewMarkets Coastal Property Market Detail: Commercial Insurance Group (www.cig-llc.biz) handles tough-to-place coastal property from LRO to Habitational to schedules. Offering a 1 percent to 5 percent wind deductible product (depending on appetite and region) on A-rated paper. Able to offer primary and excess property as needed. Available limits: Minimum $5,000, maximum $500,000 Carrier: Various, nonadmitted States: Ala., Del., Fla., Ga., Md., N.C., N.J., S.C., Texas, and Va. Contact: Martin Burlingame at 303-900-2960 or email: martin@ cig-llc.biz

Auto/Truck Leasing Firms Market Detail: Williams and Stazzone Insurance (www.wsins. com) offers CGL; dealers open lot, E&O, garagekeepers legal liability; garage liability; interim car liability/physical damage; lessor only excess liability; lessors contingent liability; lessors contingent physical damage, property; umbrella. Available limits: As needed Carrier: Unable to disclose, admitted States: All states Contact: Vincent Stazzone at 800-868-1235 or email: vstazzone@ wsins.com

Available limits: As needed Carrier: Unable to disclose, admitted and nonadmitted available States: All states Contact: Tracie Bittle at tbittle@apiaprotects.com

Shuttle Service-Non Emergency Medical Market Detail: Western Experts in Transportation (WET) (www.westerndwf.com) is a wholesale operation that specializes in public transportation. Quotes offered to any broker with small or large accounts in almost every state with no minimum premium or volume requirements. Coverage includes: auto liability; auto physical damage; primary and excess; self-insured retentions; deductible programs; general liability; fleets; and owners/ operators. Available limits: Maximum $5 million Carrier: Zurich States: All states except Alaska, Hawaii, Mass., N.Y., and Wyo. Contact: Melissa Matheson at 781-994-6000 or email: mmatheson@hcc.com

Cyber Liability Market Detail: R.E. Chaix & Associates (www.rechaixinsurance. com) has access to more than 100 open market, standard and specialty carriers, domestic and foreign, as well as numerous in-house binding authorities. Target classes include: contractors; commercial auto; commercial excess and umbrella; general liability; inland marine; personal lines (CPL/umbrella); professional liability; property and more. Available limits: As needed Carrier: Markel States: Calif. only Contact: Customer service at 800-369-4337

FP and REO Insurance Market Detail: Asset Protection Insurance Agencyâ&#x20AC;&#x2122;s (APIA) (www. apiaprotects.com) policy protects investments from the day they are bought until the day they are sold, including rehab, sale and/or rental. Program benefits: all properties can be covered in one policy; monthly billing and payment, no interest; convenient payment options- monthly, quarterly, semiannual and annual; the named insured can be a person, joint venture, partnership, corporation or trust; choice of deductible options; proof of insurance provided promptly; up to $2.5 million physical hazard coverage per property; premises liability $1 million occurrence/$2 million aggregate; coverage includes damage caused by vandalism and malicious mischief. Optional coverage available for: loss of rental income; flood coverage in designated flood zones; terrorism coverage. APIA is an independent agency. 28 | INSURANCE JOURNAL-NATIONAL December 21, 2015

Private Collections Market Detail: Private Client Solutions (www.marketscout.com) offers a comprehensive approach with risk management services designed to enhance protection and minimize threats to clients. Available limits: Maximum $100 million Carrier: Various, admitted States: All states Contact: Courtney Kerr at 972-934-4214 or email: cnkerr@ marketscout.com

Community Association Package Program Market Detail: V3 Insurance Partners (www.v3ins.com) CAPP Community Association Package Policy is a multiline policy designed to cover the needs of community associations, covering the property, crime, general liability and directors and officers needs. Available Limits: Property up to $50 million; D&O to $5 million Carrier: Hiscox Insurance Company Inc, A rated, admitted States: 26 states: Ariz, Calif., Colo., Conn., D.C., Ga., Ill., Iowa, Ind., Kan., Mass., Mich., Minn., Md., Mo., Neb., N.J., N.Y., Nev., Ohio, Ore., Pa., Tenn., Utah, Va. and Wash. Contact: Carol Teasley at 913-227-4917 or email: carol.teasley@ v3ins.com www.insurancejournal.com

SPOTLIGHT

10 Things to Know About Seasonal Risks The National Safety Council reports that in 2013, 343 people were killed by automobiles on New Year’s day, 360 on Thanksgiving day and 88 on Christmas day. Alcohol-impaired incidents represented 31 percent of the deaths.

Christmas accounted for the least number of vehicle thefts — 1,225 — in 2014 out of the top 10 holidays ranked by the number of stolen vehicles, according to the Insurance Information Institute. New Year’s day had the second most thefts with 2,011; New Year’s Eve ranked sixth with 1,858; and Christmas eve ranked seventh with 1,750.

Retail hiring in November 2015 was down 5 percent over the same time in 2014, according to job placement specialists Challenger, Gray & Christmas.

The U.S. Consumer Product Safety Commission says 12 fatalities and 14,500 holiday decoration injuries were treated in emergency rooms in November-December 2014.

The National Ski Areas Association reported that skier and snowboarder fatalities were up slightly to 35 for the 2014-2015 season, compared to 32 during the 2013-2014 season. Of the 35 people who died, 26 were wearing helmets.

Catastrophic injuries of paralysis, broken necks or broken backs, and life-altering severe head injuries at ski resorts were down from 52 in 2013-2014 and 76 in 2012-2013 to 42 during the 2014-2015 season, the NSAA reports. Of the 42 injured, 27 were wearing helmets and 15 were not helmeted.

Toy recalls by CPSC were down from 172 in 2008 to 25 in 2015.

CyberMonday, the online shopping day the Monday following Thanksgiving, could cost almost $450 million in lost productivity, according to data from Challenger, Gray & Christmas.

According to the I.I.I., if Santa Claus were insured, he would likely have aviation insurance for his sleigh; mortality coverage for his reindeer; a business insurance policy for his workshop, product liability for toys; life, health, disability and workers’ compensation coverage for his elves; home insurance; key person insurance; additional coverage for high-value gifts; and travel insurance for his post-Christmas vacation.

Motor vehicle crash deaths between November-January of 2013 totaled 7,897, accounting for 24 percent of motor vehicle deaths for the entire year, according to the I.I.I. based on data from the Insurance Institute of Highway Safety.

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December 21, 2015 INSURANCE JOURNAL-NATIONAL | 29

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Growing Your Property Casualty Agency Don’t Treat Small Business Accounts Like Personal Lines flourish — while you grow along with them. Fishing for leads from within this base is an efficient, affordable method for producers to develop new business opportunities while simultaneously reinforcing client loyalty. Local Firms Help Each Other You are likely a small, local business yourself, so it makes sense to help others in the same position, especially when it benefits both your community and your bottom line. For instance, when you see complementary needs or synergy between agency insureds, recommend them to each other, privacy laws permitting.

n the mad rush to economize on and digitize virtually every insurance transaction and relationship activity, some small-business owners are getting shortchanged — and that’s shortsighted. Still, the growing dominance of the digital world is an overall positive for small business. Its ever-expanding reach enhances the likelihood of growth. Viral social marketing victories, a popular app, and effective e-commerce actions all push this possibility. Meanwhile, the potential for progress from traditional sales and marketing activities remains intact. By Alan Shulman Plus there’s always the hypothetical of “instant growth” via merger, acquisition, franchising, and outside investments. Express Actual Interest How can you get a handle on the growth potential and future plans of the small businesses you insure if they’re viewed as insignificant blips on your bottom line? To grow this book, and to fulfill your promise as a full service insurance office, maintain and express actual interest in the welfare of each small firm you insure. A “contact

us with any changes” form letter accompanying or preceding a set of renewal policies doesn’t express this sentiment. A forward-looking questionnaire and a follow-up phone call can clue you in on the insured’s future plans — but a pre-renewal get-together does it better. Then, once you two are face-to-face, you’ll learn where they are today and where they’re headed.

Deliver Renewals in Person Instead of just dumping small-business renewals in the mail, outside producers or dedicated “renewal specialists” can conduct pre-renewal or policy delivery appointments with selected insureds. When a firm’s policies are digitally delivered online, stop by and display them on a tablet or notebook PC.

Avoid the Black Hole The primary argument against such face time is that a producer, whose main job is to sell, cannot expend his or her valuable time renewing/servicing small business accounts. It’s true that many businesses are and will remain small, but as noted above, this assumption can be fallacious. Don’t permanently dump every account under $X in premium or commission into the black hole of an internal small-business unit operated by overworked or disinterested staffers. It’s an invitation to losing the business to rivals (both traditional and digital-centric) who value these accounts more than you do.

It’s Not Personal Lines The year 2016 brings with it more digital advantages to your agency and clientele, but it comes with disconnects as well. Don’t confuse small business with personal lines, although they both offer direct bill and digital delivery. They lack the same homogeneity, and some operations have the potential to grow into sizeable accounts. So, treat these diminutive operations with the respect they’re due. Routinely fish for budding giants within this universe; all you need are a few winners to make the effort profitable.

Re-examine Small Accounts Continuously re-examine your small-business book for potential growth accounts. Your producers can then use their professional knowledge, experience and connections to help selected small businesses

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Shulman is the publisher of Agency Ideas® sales and marketing newsletter (free basic subscription at www.agencyideas.com/join). He is also the author of “500 Sales Ideas for Commercial Lines Producers” among many other P/C sales resources. Email: alan@agencyideas.com. Website: www.agencyideas. com.

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The Charity Issue Amp Up Your Engagement Strategy with Corporate Citizenship

oday’s professionals want a career where they feel like they are contributing to the greater good — providing support to both their companies and their communities. Some 61 percent of young professionals factor corporate citizenship into a job decision, according to a recent Deloitte survey. Of those, 70 percent strongly favor working for a comBy Steve Lessaris pany that has a solid reputation for community involvement. Repositioning your organization as socially relevant and impactful may be the key differentiator in successfully competing in today’s increasingly challenging labor market. In fact, organizations that support the 32 | INSURANCE JOURNAL-NATIONAL December 21, 2015

philanthropic interests of Repositioning your organization as their employees are proven socially relevant and impactful may to see higher engagement be the key differentiator in successfully and can be more competitive in recruiting new competing in today’s increasingly talent. It is no longer a challenging labor market. question of if you should offer a corporate citizenship program, but rather, how you can maximize strategy. What is the right mix of impact your efforts. on community, benefit for employees, and Today, as charity programs and corporate impact to work for your company? citizenship become more and more important for success, organizations are looking Implement a Matching Gift Program for unique ways to incorporate community Everyone loves to support a cause. With involvement into their company-wide busiprofessionals, tying that support in with ness strategies. Fortunately, there is no “one their identity as an employee can contribsize fits all” formula for an effective corpoute to engagement and retention. With rate citizenship program, giving organizamatching gift programs, employees are tions the flexibility to develop a plan that able to donate to a nonprofit that will be best fits within their corporate focus and matched — usually dollar for dollar — www.insurancejournal.com

by your company. Already, 94 percent of leading companies are providing their employees with a matching gift program. This strategy has been shown to boost contributions and encourage employees to be philanthropic. These programs are a great engagement builder as they allow employees to assist the charity of their choosing, with the knowledge that you, as their employer, are committed to supporting them. In fact, 54 percent of employees report feeling more engaged when they are proud of their organizations’ community service contributions. Considering that companies with engaged employees have been shown to outperform their competitors by up to 202 percent, developing and supporting a philanthropic culture is becoming an important indicator of success. As a result, more and more organizations are now adopting or expanding their matching gift policies to foster goodwill and engagement. Make Time for Company-Sponsored Volunteer Activities From paid time off for volunteer activities to teams of employees participating in a fundraising event, incorporating volunteerism into your company’s philanthropic culture can cause engagement to skyrocket. Not only does allowing employees to band together to support their community boost dedication, it also shows them that you support them. Organizations are now getting involved in “day of giving” events, putting together

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teams for charity races and encouraging participation in local food and clothing drives. Some organizations have even gone so far as to provide paid time off for employees to volunteer with a charity they choose. With employees focused on finding work-life balance, allowing them to become involved in the community without giving up a day off is a great perk that helps build loyalty. Already companies are viewing this type of strategy as a key differentiator, setting their organizations apart from the competition. Currently, more than 20 percent of companies are offering paid time off for charitable purposes — and that number is growing. Is your company on board? Think Outside the Box What about the more unique corporate citizenship activities? What can your organization do to create a one-of-a-kind philanthropic strategy? In light of the growing focus on charitable activities, some organizations are pushing toward “high-impact volunteering” as a way to set themselves apart. Recognizing that anyone can plant a tree or help clean up a highway, these companies are looking at ways to use their particular set of niche skills to benefit their communities. For example, a marketing team may volunteer their services to create a campaign for a local charity, or a finance department may provide pro-bono financial analyst services to help an organization evaluate its current programming. Utilizing the skills required

in their day-to-day jobs allows professionals to assist organizations in a very valuable and, oftentimes priceless, manner. It is also important to remember that volunteering goes beyond just donating time or money. Allowing a charity to utilize your office space is another great way to get involved. Do your employees sit on a charity board? Encourage them to host a meeting in your conference room. Offer up your office space for a small event. These small contributions can go a long way in building good will. Charity programs and volunteerism provide employees with purpose. They give professionals a chance to step away from their daily tasks and connect with their communities. These initiatives provide employees with a fresh outlook and renewed appreciation for their companies and the work their organizations are doing. With the competition for top talent increasing within the industry, developing and implementing a corporate citizenship program is a unique solution to the growing labor recruitment difficulties. Lessaris is a client development manager at The Jacobson Group,a provider of talent to the insurance industry. Phone: 800-466-1578 or email: slessaris@ jacobsononline.com.

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

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Closing Quote

Regulators Focused on Product Innovation, Emerging Trends

S By John M. Huff

tate-based insurance regulation has a 145-year history of effectively and successfully protecting consumers and fostering competitive insurance markets. As the 2016 president of the National Association of Insurance Commissioners, I’m committed to further strengthening our regulatory system. It’s no small job. We collectively regulate more than $8.3 trillion of insurer assets and $1.8 trillion in premiums. With nearly 12,000 state regulators who form our national system of state-based insurance regulators, I am inspired to provide leadership that draws strength and focus through collaboration with consumers, regulators and stakeholders to maintain security and stability for those we serve. In 2016, we will leverage the NAIC’s position as the world leader in data collection, validation, aggregation and analysis to keep pace with product innovation and emerging trends. Cybersecurity is today’s Y2K. The insurance industry is an attractive target for hackers because of the extensive amount and types of personal data collected by insurance companies. That’s why it is imperative we continue our focus on cybersecurity enhancements. Also on the horizon is managing the continuing implementation of health reform as we respond to the needs of consumers and companies. I look forward to con-

34 | INSURANCE JOURNAL-NATIONAL December 21, 2015

tinuing to coordinate with Health and Human Services, the Department of Labor, Treasury, Office of Personnel Management, Congress and the White House to help maintain stability as we transition through reform efforts. Our industry is ever-evolving whether from federal and international changes or industry modifications like price-optimization. We’ll continue to review how the industry writes policies and rates consumers to ensure fair treatment across the board. Reports show 40 percent of Baby Boomers have no retirement savings. This alarming statistic has prompted me to focus on improving awareness of lifetime income and the importance of affordable, well-regulated financial products for retirement planning. Educated consumers are best positioned to make wise decisions. I’m committed to expanding our outreach to help consumers get smart about their insurance choices and improve their overall financial literacy. Making sure insurance companies are solvent is one of our key roles. State regulators will continue to review insurer investments, not only to ensure insurers can pay what they promise, but also to help the industry contribute to long term community investments like rebuilding and repairing our nation’s infrastructure. The NAIC has made great progress in recent years in the continued transition to Principle-Based Reserving in the life insurance area. To date, 39 states representing 71 percent of the required premium have adopted the Standard Valuation Law. The NAIC stands ready with technical resources to assist states through the transition. At the international ‘State regulation is level we will continue to lead regulatory discussions successful because with an increased emphawe know best how to sis on setting appropriate balance the needs of standards that reflect consumers and the U.S. priorities. The NAIC and its members actively industry.’ engage in international discussions, bilaterally, regionally and through the International Association of Insurance Supervisors (IAIS). We work to ensure U.S. customers are protected and U.S. companies remain competitive here and abroad. State regulation is successful because we know best how to balance the needs of consumers and the industry. As 2016 NAIC president, I look forward to working to make sure our strong track record not only remains intact, but strives for constant improvement, as we have since 1871. Huff is director of the Missouri Department of Insurance, Financial Institutions and Professional Registration. He has been elected to serve as president of the NAIC for 2016.

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Expect big things in workersâ&#x20AC;&#x2122; compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide. For information call (877) 234-4450 or visit auw.com/us. ÂŠ2015 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.