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August 19, 2019 â&#x20AC;˘ Vol. 97 No. 16

Contents

Idea Exchange

Special Report

News & Markets

Spotlight: Why the High Net Worth Client Needs More than Just an Agent

Age Discrimination Among Older U.S. Workers an Increasingly Serious Concern, Insurer Says

16 16 Why Agencies Shouldnâ&#x20AC;&#x2122;t

Special Report: 101 Sales, Marketing & Agency Management Ideas

Be Afraid of Insurtech

Closer Look: Near National P/C Carriers Identified

Work-From-Home Can Deliver Big Cyber Risks for Small Business

Closer Look: How Intellectual Property Compares with Cyber

The Wedge: 5 a.m. Wakeup Call: 66 Days to Create a Habit

Ask the Insurance Recruiter: Money Talks in Every Aspect of Recruiting

Minding Your Business: Agency Management 101

Prioritizing Diversity and Inclusion in the Workplace

Why the Cyber Insurance Market Should Keep Watch on Small Business Risk

Agency Spotlight: Miller Insurance

Closing Quote: Climate Affects Weather and Weather Affects Insurance

Departments 6 Opening Note 4 | INSURANCE JOURNAL | AUGUST 19, 2019

14 Declarations

14 Figures

20 Business Moves

24 People

46 My New Markets

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YOUR INSURANCE CARRIER HAS TO REALLY KNOW YOUR CLIENT’S INDUSTRY TO ACTUALLY BE THERE FOR THEM. AND YOU.

That’s what it means to specialize. And you deserve a carrier that gets that. We make it a point to know all there is to know about a wide range of industries from manufacturing and technology to real estate, life science and more. With our deep specialization, The Hartford can help you develop customized product solutions for the complex risks of your mid- to largesize clients – allowing us to be there for both of you in a way that many carriers cannot. The Buck’s Got Your Back. TheHartford.com/specialization The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT. 19-ML-97367 © August 2019 The Hartford

Opening Note Write the Editor: awells@insurancejournal.com

Professional Misconduct and Adultery?

s there a link between a cheating spouse and misconduct on the job? One study claims to have found a correlation. According to a new academic study from researchers at the University of Texas at Austin, people who cheat on their spouses are more likely to engage in misconduct in the workplace. Researchers looked at the records of police officers, financial advisers, white-collar criminals and senior executives who used the Ashley Madison marital infidelity website. Operating under the slogan “Life is short. Have an affair,” Ashley Madison advertises itself as a dating service for married people to have “discreet encounters.” Despite promises of discreetness, the data were put in the public domain through a hack in 2015 that included 36 million user accounts, including one million paid users in the United States. The study, “Personal Infidelity and Professional Conduct in 4 Settings,” found that Ashley Madison users in the professional settings they studied were more than twice as likely to engage in corporate misconduct. The study by McCombs School of Business at The University of Texas at Austin finance faculty members John M. Griffin and Samuel Kruger, along with Gonzalo Maturana of Emory University, was published in the Proceedings of the National Academy of Sciences. “This is the first study that’s been able to look at whether there is a correlation between personal infidelity and professional conduct,” Kruger said. “We find a strong correlation, which tells us that infidelity is informative about expected professional conduct.” The researchers investigated four study groups totaling 11,235 individuals using data on police officers from the Citizens Police Data Project, data on financial advisers from the Financial Industry Regulatory Authority BrokerCheck database, data on defendants in SEC cases from the Securities and Exchange Commission’s litigation release archives, and data on CEOs and CFOs from Execucomp. Even after matching misconduct professionals to misconduct-free individuals with similar ages, genders and experiences and controlling for a wide range of executive and cultural variables, the researchers found that people with histories of misconduct were significantly more likely to use the Ashley Madison website. Their findings suggest a strong connection between people’s actions in their personal and professional lives and provide support for the idea that eliminating workplace sexual misconduct may also reduce fraudulent activity. “Our results show that personal sexual conduct is correlated with professional conduct,” Kruger said. “Eliminating sexual misconduct in the workplace could have the extra benefit of contributing to more ethical corporate cultures in general.”

‘Our results show that personal sexual conduct is correlated with professional conduct.’

Andrea Wells Editor-in-Chief 6 | INSURANCE JOURNAL | AUGUST 19, 2019

Publisher Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

ADMINISTRATION / CIRCULATION

Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com

EDITORIAL

Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Elizabeth Blosfield | eblosfield@insurancejournal.com Southeast Editor/MyNewMarkets 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 L.S. Howard | lhoward@insurancejournal.com Columnists & Contributors Contributors: Scott Carroll, JoJo Harris, Barry J. Koestler II, Josh Ladeau Columnists: Mary Newgard, Catherine Oak, Bill Schoeffler, Randy Schwantz

SALES / MARKETING

Chief Marketing Officer Julie Tinney | jtinney@insurancejournal.com West Sales Dena Kaplan | dkaplan@insurancejournal.com Romeo Valdez rvaldez@insurancejournal.com South Central Sales Mindy Trammell | mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA, CT) Howard Simkin | hsimkin@insurancejournal.com Midwest Sales Lisa Whalen | (800) 897-9965 x180 East Sales (NY, PA and CT only) Dave Molchan | (800) 897-9965 x145 Sales & Marketing Coordinator Ashley Berg | aberg@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com Insurance Markets Manager Kristine Honey | khoney@insurancejournal.com Senior Strategist Pam Simpson | psimpson@insurancejournal.com Social Media Manager Ly Short | Lshort@insurancejournal.com Marketing Administrator Gayle Wells | gwells@insurancejournal.com Marketing Director Derence Walk | dwalk@insurancejournal.com

DESIGN / WEB / VIDEO

V.P. of Design Guy Boccia | gboccia@insurancejournal.com V.P. of Technology Chris Thompson | cthompson@insurancejournal.com Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Terrance Woest | twoest@wellsmedia.com Web Developer Ryan Kleshinski | rkleshinski@wellsmedia.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop | awaldrop@insurancejournal.com

ACADEMY OF INSURANCE

Director Patrick Wraight | pwraight@ijacademy.com Online Training Coordinator

SUBSCRIPTIONS:

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Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2019 Wells Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Media Group, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Dept, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: Contact (800) 897-9965 x125 or visit insurancejournal.com/reprints

News & Markets Age Discrimination Among Older U.S. Workers an Increasingly Serious Concern, Insurer Says reported that they had left a company due to experiencing or witnessing age discrimination. • About 67% of respondents 65 or younger plan to continue working after they turn 66, and 62% of all workers did not receive any form of age discrimination training in the previous 12 months.

ge discrimination affects more than one-fifth of U.S. workers over the age of 40, a particular number of which are men, according to a survey from specialty insurer, which warns companies to be mindful of the related workplace liabilities. “Age discrimination in the workplace is an increasingly serious issue for businesses and employees as older generations continue to maintain their professional careers longer than their predecessors,” Patrick Mitchell, Management Liability Product head at Hiscox USA, said in prepared remarks. “Discrimination of any kind brings serious reputational and financial risks to any business and can negatively impact a worker’s career trajectory.” Hiscox found that 21% of U.S. workers age 40 and older have experienced workplace discrimination due to their age. They also added that age 51 is the point at which they’re most likely to experience discrimination, according to the 2019 Hiscox Ageism in the Workplace Study. The study surveyed 400 full-time U.S. workers age 40 and over. While one-in-five respondents said they have faced age discrimination in the 8 | INSURANCE JOURNAL | AUGUST 19, 2019

workplace themselves, only 40% filed a charge or complaint. Fear of a report creating a hostile work environment (54%) and a lack of knowledge on how to initiate a complaint (24%) were among the reasons cited. Men are most likely to feel that getting older hurts their careers. Approximately, 43% of men said they feel that their age has been a barrier to finding a new job since turning 40 years old, the Hiscox study found. That compares to 30% of women who felt the same. Just under 40% of men reported that age frustrated their career advancement since turning 40, compared to 24% of women. Other findings from the study: • About 51% of workers who witnessed age discrimination against another employee did not report it, and 62% said they didn’t speak up because they feared employer retaliation. • 80% of respondents who experienced age discrimination reported that it had impacted their career trajectory. • About 43% of respondents

Hiscox said that age discrimination can be prevented by initiatives including workforce training and by responding to claims “immediately and thoroughly.” Hiscox does not identify the sources of the discrimination. But generational differences in the workplace may explain some of the ageist climate that older workers are feeling. A recent poll by The Associated PressNORC Center for Public Affairs Research found that workers under the age of 50 were significantly more likely to view America’s aging workforce as a negative development when compared with their older counterparts. About 4 in 10 respondents ages 18 to 49 and 44% of the youngest respondents ages 18 to 29 said they consider the trend to be a bad thing for American workers. Just 14% of those age 60 and over said the same. Research is mixed on the aging workforce’s overall impact on the U.S. economy. Adam Ozimek, a senior economist at Moody’s Analytics, says his prior research efforts have suggested a growing population of older workers can slow productivity and ultimately hamper wage growth for the rest of the labor market. But he says there’s little evidence to suggest that the presence of older workers is “crowding younger workers out of promotions,” noting that many of the workers who would naturally move up and replace positions currently held by baby boomers are not millennials but rather middle-aged members of Generation X. “In anxious times, we look for scapegoats,” says Ashton Applewhite, a New York-based writer and ageism activist. INSURANCEJOURNAL.COM

Dear Readers:

We are blessed to be supported by sponsors & advertisers who help us bring you the award-winning editorial youâ&#x20AC;&#x2122;ve come to expect from Insurance Journal. From the survey responses that you graciously share with us each year, we know that learning about new business opportunities, technologies, and markets are high on the list of reasons that you spend time with our media. Throughout our years of offering this special section which follows, sponsors have used the space to highlight their history, their people, or their products and services. It is their opportunity to introduce themselves to you in whatever way they like. We hope you enjoy it. Julie Tinney Chief Marketing Officer, Wells Media Group Inc. jtinney@wellsmedia.com

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AUGUST 19, 2019 INSURANCE JOURNAL | 9

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Figures $123,430

The amount a Massachusetts construction company and its owner will pay in restitution and penalties to settle allegations that it violated Massachusetts wage and hour laws. The Attorney General’s Office issued two citations against WCP Construction Corp. (WCP) and its owner, Weder C. Pereira, for failing to pay overtime and failing to keep true and accurate records.

$250 Million The amount for which a Kentucky teen was suing the Washington Post in a lawsuit that was thrown out by a federal judge. The high school student’s suit was related to an encounter with a Native American at the Lincoln Memorial earlier this year, and alleged the Post defamed him in articles about the incident. The judge ruled opinions reported in the Post articles are protected by The First Amendment.

Declarations Ticking Time Bomb

“Without strengthening safety regulations, America’s natural gas pipeline infrastructure remains a ticking time bomb.”

— Massachusetts Senator Edward Markey, commenting on a bill unveiled in April by members of the Massachusetts congressional delegation aimed at strengthening pipeline safety in the U.S. The bill is in response to the September 2018 natural gas explosions and fires in the Merrimack Valley.

14 | INSURANCE JOURNAL | AUGUST 19, 2019

Assistance Needed

“More than 20,000 Floridians with open claims need assistance. Insurers should redouble efforts to resolve all open claims, using whatever resources are necessary, to provide policyholders with the tools to rebuild their lives and property.”

— Florida Insurance Commissioner David Altmaier, writing in a memo to the insurance industry regarding claims from Hurricane Michael. As of July 26, the number of claims related to the Category 5 storm that hit the Florida Panhandle last October had reached 148,347, with the number of open claims at 20,484.

Could Have Been Worse

“It could have been worse than it was because we really got ahead of it,”

— Annette Eyman, a spokeswoman for Papillion-La Vista Community Schools, comments on a May cyberattack that has forced the suburban Omaha, Neb., school district to rebuild its servers. The district has cyber insurance, but will likely have to pay some recovery costs, as well. The ransom attack was introduced via email; it crashed the district’s system and then demanded money to restore it.

INSURANCEJOURNAL.COM

$5 Million 2.2%

That’s the amount sought in lawsuit filed against a Los Angeles County company that sells a product it contends helps protect homes from wildfires. The Santa Barbara County district attorney and the Los Angeles city attorney sued Sunseeker Enterprises for allegedly making false and misleading claims about its “SPF 3000 Clear Spray.”

The average percentage by which State Farm is reducing its Kansas homeowners insurance rates. The total statewide expected savings impact for State Farm customers by this rate decrease is approximately $5.1 million. State Farm said the rate decrease is effective August 15 for new business and October 1 for renewals.

Disaster Potential

“It’s disappointing to me for a company to have these kinds of problems with the potential for some kind of disaster.”

— Rock Owens, managing attorney for the environmental practice in Harris County, Texas, Attorney’s Office, after filing suit against Exxon Mobil Corp. over pollution from a July 31 fire at the company’s Baytown, Texas, Olefins Plant. The suit seeks court orders to prevent future fires at Exxon’s giant Baytown refining and petrochemical complex. It is the second lawsuit filed by the county against Exxon involving fires at the plant this year.

INSURANCEJOURNAL.COM

Climate Bomb

“The only thing that’s keeping it from going off like a nuclear bomb is the weather.”

— Chris Dicus, a California Polytechnic State University, San Luis Obispo professor and head of the Association for Fire Ecology, a national group that studies wildfire, says previously too-wet-to-burn parts of the Pacific Northwest face an increasing risk of significant wildfires due to climate change.

AUGUST 19, 2019 INSURANCE JOURNAL | 15

News & Markets Why Agencies Shouldn’t Be Afraid of Insurtech and Need to Adopt It – Now By Amy O’Connor

here’s been a barrage of insurtech products hitting the market for several years now, creating confusion for some agency owners trying to decipher what is relevant to them, how to implement these products and whether to wait for new agency systems. Regardless of the confusion, choosing to do nothing is not an option, according to agency consultant Chris Burand, founder of Chris Burand & Associates, who says agencies have to get in the technology game if they want to not only thrive but also survive – and the sooner, the better. “Your peers, your competitors, they’re going to wait five, 10 years,” Burand said. “They’re going to wait on their agency system management company to get all these modules all into one system. They’ll be too late. It’s so critical to move early and fast and move intelligently.” Burand also said it is important that agencies, not their carriers, decide what insurtechs are best for them. Burand’s message was part of an overall theme on the importance of agencies adopting insurtech and what options are available at a two-day Insurance Agency Showcase Summit held by Burand & Associates in Breckenridge, Colo., this month. Several insurtech companies spoke to agency owners on the agency-specific options they

offer, and the ease of deploying those different options in an agency. Burand said while there is no one-size-fits-all insurtech for agencies, the many different products can be tailored by agencies to their needs. “It was so cool to see how you guys all talked about the integrated approach. There is no single solution, is there? It’s going to take different people, different parts, different organizations to make it happen,” Burand said. Jason Walker, managing partner of Smart Harbor, which offers industry-specific mobile, web and search engine optimization tools and data analytics for agents, said agents should not view the technology offered by insurtechs as scary. Agents should instead think of the different insurtechs as a way to help bridge a gap or take tedious tasks off their plates. “If we look at insurance technology that way, and we start to really just humanize all of this, we can follow this trend and start to step off into this digital marketing space,” he said. Smart Harbor, Walker said, works to help agencies become more visible with potential customers and create a good experience for customers through relevant content, chat integration, content management systems and directory listings, for example.

continued on page 18

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News & Markets

continued from page 16 “All of this is driving credibility through content, but it’s using a bunch of different platforms that are, guess what – technology. And when we talk about it for the insurance space, it’s insurtech,” Walker said. With more digital agencies entering the insurance world, traditional agencies are going to have trouble competing if they do not adapt to technology, said Doug Mohr, vice president of Industry Relations & Partnerships for Vertafore. “Newer agencies – they have no blinders on,” Mohr said. “They have no preconceived notion of ‘this is how we’ve always done it, how we have to do it,’ so they put in the new technologies as a way to buy competitive advantage and differentiate themselves from the competition in the market.” Carriers are also investing in digital independent insurance agencies and making decreasing the acquisition costs of new

business one of their number one priorities, Burand said. “They are planning to go direct if they have to. They will be cutting commissions and expenses,” he noted, and that means agents are going to have to streamline their processing and bring value to their clients. “We have to have a win-win scenario with the carriers. Where [they are decreasing] their costs, we decrease our costs, and we both grow more quickly,” Burand said. Burand said agencies should be in control of what technologies they implement, not their carriers. “Technology is going to drive the wedge further between agencies and carriers. You’ve got to choose what’s best for you. Don’t let the carriers dictate a fact,” he said. “Just because a carrier doesn’t like this technology or that technology is not a reason to avoid using that technology.” Chris Cheathem, co-founder of RiskGenius, which offers

18 | INSURANCE JOURNAL | AUGUST 19, 2019

a platform applying artificial intelligence to insurance policies to better understand policy language and improve underwriting workflows, said investing in technology doesn’t mean eliminating the human touch from agency work. “Successful companies augment humans with tech. I think that’s the key right there,” he said. “If you come out, and you’re like, ‘Okay, we’re going to get rid of a bunch of people and implement technology,’ it will fail because there is a middle ground area.” The number one priority for any independent agent/small business owner is to get closer to customers and improve their experience, Mohr said, and the technology they choose should ensure that happens. “[Set] those priorities, pick technology, two or three depending on your outcome, that meets those goals and take them to heart,” he said. Insurtechs like Avyst are looking at agency-focused

opportunities that enable the efficiency of independent agent channels, said Kitty Ambers, chief growth officer for Avyst. The company offers ways to streamline processes and workflows, as well as its eForms Wizard that was designed to simplify the submission process. She said agencies need to have a plan for growth and future success so they can align their technology around that plan. “I think that’s super critical as we make our investments in the right technology for the thing at the right time,” Ambers said. Mohr said agencies shouldn’t be afraid to fail when it comes to implementing technology – if something isn’t working, move on. “If it isn’t providing the value and the ROI [return on investment] that you originally set out when you set those goals with the technology, don’t be afraid to just say that’s not working for me,” he said. “Another mistake I see from agents is they think that if they’ve invested in something, they’ve really got to play it out, even though it’s not working for them. Don’t be afraid to fail. Evaluate it. Iterate. Maybe take it in another direction. Constantly look at the value you’re getting out of your technology.” Ultimately, Burand says agencies cannot afford to wait – the successful agencies will be those who get it done. “Let’s figure out how we can deliver better quality to our clients and at lower costs," he said. "If we do that, we save money and grow simultaneously. Not everybody is going to be able to figure out how to make that happen.” INSURANCEJOURNAL.COM

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News & Markets California Workers’ Comp Committee Votes for Drop in 2020 Pure Premium Filing

he Workers’ Compensation Insurance Rating Bureau of California’s governing committee voted earlier this month to authorize the WCIRB to submit a Jan. 1, 2020, advisory pure premium rate filing to the California Insurance Commissioner that will be on average 5.7% below the average approved Jan. 1, 2019, advisory pure premium rates. If adopted, this would be the ninth consecutive pure premi-

um rate decrease since 2015 totaling roughly 44 percent. WCIRB Executive Vice President and Chief Actuary Dave Bellusci, in a presentation to the governing committee, noted that the indicated Jan. 1, 2020, average advisory pure premium rate change reflects continued downward loss development, acceleration in claim settlements, sharply declining pharmaceutical costs and continued decline in the number of liens being filed.

ISO, Intterra, Western Fire Chiefs Partner to Better Understand Wildfire Risk

SO and Intterra are partnering with the Western Fire Chiefs Association to explore new ways of analyzing and understanding wildfire risk. Intterra has worked with the WFCA for several years to develop the Fire Data Lab, a nonprofit organization dedicated to accelerating the use of data-driven decision making in the fire service. The addition of ISO is expected to bring insurance data and risk analytics to the alliance to help generate new insights.

“The growth of wildfires is constantly creating new challenges for those on the front lines working to protect people and property,” Jeff Johnson, CEO of the WFCA, said in a statement. “With Intterra and ISO, we’ll look to harness the power of fire analytics, environmental data, and insurance innovation to gain new perspectives on how to mitigate and respond to these complex natural disasters.” Intterra is a provider of software for fire departments across the U.S. WFCA serves as a representative for leaders of fire-related emergency service organizations throughout the WFCA member states and the Western Pacific Islands. ISO, a Verisk business, is a provider of tools and analytics for the property/casualty insurance industry.

W2 | WEST | INSURANCE JOURNAL AUGUST 19, 2019

Despite these favorable trends, Bellusci also cautioned that loss adjustment expenses remain high and that medical and indemnity average claim severities are beginning to rise at levels closer to their historical norms. The WCIRB has said it expected to submit its Jan. 1, 2020, advisory pure premium rate filing to the California

Department of Insurance around the third week of August. The CDI will schedule a public hearing to consider the filing.

California Manufacturer of Fire Protection Spray Sued for $5M

$5 million lawsuit has been filed against a Los Angeles County company that sells a product it contends helps protect homes from wildfires. The Santa Barbara County district attorney and the Los Angeles city attorney sued Sunseeker Enterprises for allegedly making false and misleading claims about its “SPF 3000 Clear Spray.” The spray is marketed as a protective coating for the outside of homes to enhance fire resistance. The lawsuit alleges the product actually is “corrosive, volatile, and toxic” and its protection claims are unsubstantiated. California has faced

devastating wildfires in recent years. The suit says consumers who falsely believe their homes are protected could delay evacuating, putting lives at risk. Company founder James Moseley says the product works, has passed safety tests and has helped save homes. Copyright 2019 Associated Press. All rights reserved. INSURANCEJOURNAL.COM

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News & Markets Execs: Wholesalers at Center of Topa Plans After Acquisition of California Insurer By Don Jergler

wo key executives involved in the acquisition of Topa Insurance Group by Altamont Capital Partners who spoke about the deal were emphatic about one thing: wholesalers will continue to be the center of the company’s distribution model. Altamont announced earlier this month it signed a definitive agreement to acquire Calabasas, Calif.-based Topa Insurance Group from its long-time owner, Topa Equities Ltd. Terms of the deal weren’t disclosed, but John Donahue, president and CEO of Topa financial services, healthcare, industrial, Insurance Co., would say that there are retail and technology. no plans to change the distribution model Highly recognizable names in its consumer portfolio include Billabong, Dakine of the company, which does business and Fox Head. exclusively though the wholesale market. Topa represents Altamont’s seventh “No, we love our wholesale market,” platform investment in insurance and Donahue said when asked if the company insurance services and its 19th overall will continue doing business with wholesalers. “If anything, we plan on growing insurance acquisition. that and expanding that as opposed to Altamont’s financial services companies shrinking it. We’re committed to the include Atlanta, Ga.-based McLarens, a wholesale market.” claims management and property loss Sam Gaynor, a principal of Altamont, adjustment business; Irving, Texas-based also said the San Francisco, Calif.-based Celestite, a non-standard auto managing private equity firm, said general agency; ‘We want to grow even they will support Topa’s Atlanta, Ga.-based efforts to continue to grow more exclusively with our Embark General, wholesale partnerships. wholesalers. We’re all in.’ a managing “This will be our foungeneral agency; dational wholesale specialty P&C carrier in and Accelerant, a U.K.-based agency. the U.S.,” Gaynor said. While Altamont will assume majority Gaynor declined to get into specifics of control, Topa Equities will maintain a the terms, and said it’s too early to talk minority equity stake in the business about capital plans. following the closing. “I will say it will continue to have a spe Topa is the parent company of Topa cialty focus,” he said. “I would say there’re Insurance Co. and Dorchester Insurance very strong wholesale relationships that Co. Topa wrote a reported $130 million of the company has, so part of our strategy gross written premium in 2018. would be working with the wholesalers to Topa Equities Ltd. is a private, family-owned, diversified holding company. understand what product gaps we have in Headquartered in Los Angeles, the comthe market.” pany owns more than 25 subsidiaries with Altamont has over $2.5 billion of capital primary locations in Southern California, under management, focused primarily on Hawaii and the U.S. Virgin Islands. middle market businesses in industries Topa has four main lines of business: including business services, consumer, W4 | WEST | INSURANCE JOURNAL AUGUST 19, 2019

beverage distribution, automotive retail, insurance and real estate. Donahue said he got the sense that Altamont liked the management team, so he and Topa’s other executives aren’t planning to go anywhere. “All indications right now are that they’ve been very, very supportive of our team, very interested in our team,” Donahue said. “I anticipate no material changes at all in terms of the team and the dynamics and who’s on board.” Donahue couldn’t say whether Altamont will add to Topa’s capital? “All I know is they’re a very large fund and they’re very financially focused,” Donahue said. “We think that there’s a lot of opportunity in terms of doing things that we weren’t doing before.” One of areas of anticipated growth for Topa is the cannabis insurance market. Topa, which offers cannabis products in more than a dozen states, has reported the claims experience in the cannabis business is showing good signs early on. “We’re bullish on that market,” Donahue said. “We’re very pleased with our topline there and very pleased with our bottomline, and we plan on smartly growing that over time.” He then went back to his emphasis on Topa and the wholesale market. “We want to grow even more exclusively with our wholesalers,” Donahue said. “We’re all in.” INSURANCEJOURNAL.COM

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News & Markets California Leads Nation in SMB Cyber Insurance Adoption, Report Shows

alifornia leads the nation in small to mid-size business cyber insurance adoption, according to a report released in early August by CyberPolicy. The report shows the highest annual premium in the state totaled more than $16,596, while the lowest annual premium was just $34, and that SMBs face substantial cyber risk, largely due to their limited resources and lack of employee training. According to CyberPolicy’s report, California-based software development companies are leading the pack in prioritizing cyber insurance as an integral part of their cyber defense strategies. California-based SMBs not in the technology sector are also actively purchasing cyber insurance, including the following industries (in order of most sales):

• Financial Services • Healthcare Business Management The CyberPolicy report shows the largest SMB purchasing cyber insurance in California has 100 employees, while the smallest has just one employee. “Collective cyber insurance market growth is encouraging, especially given ever-rising threat levels and seemingly constant breaches,” Keith Moore, founder and CEO of CyberPolicy, said in a statement. “California’s cyber insurance adoption rates are particularly impressive, however, and the state’s dedication to proactive cyber defense is worth emulating. We’re committed to helping SMBs of all sizes, industries and locations acquire the cyber

protection they need so they can focus on what’s most important: securely growing their business.” CyberPolicy, which partners with insurers like Chubb and Hiscox to develop bundled cybersecurity offerings for small businesses, is a wholly-owned subsidiary of CoverHound Inc.

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News & Markets Work-From-Home Can Deliver Big Cyber Risks for Small Businesses

emote employees place businesses at risk, yet many small business owners are not properly mitigating potential cyberthreats, nor are they adequately protecting their employee platforms, a new report says. As work-life and technology continue to evolve, a growing number of small business owners find themselves adopting remote work policies or “WFH” perks. However, their employees, who use company platforms in locations such as coffee shops and airports, are more susceptible to the risk of an online attack. According to Nationwide’s fifth annual Business Owner Survey, 83% of small business owners allow employees the option to work securely from a remote location when needed. With young business owners (those ranging from ages 18-34), this number jumps to 95 percent. Yet, only 50% of small business owners have updated their remote work security policy in the past year. Failing to continually revise remote work policies in the digital workplace could put those business owners at higher risk of a cyberattack, the insurer says. The survey found that one in five small business owners have not committed their employees to formal cybersecurity training. Only 4% of business owners have implemented all of the cybersecurity best practices and recommendations from the U.S. Small Business Administration cited below. “What may seem like a harmless public Wi-Fi network INSURANCEJOURNAL.COM

could ultimately pose serious troubles for a business,” says Catherine Rudow, vice president of cyber insurance at Nationwide. “Many employees may not realize the magnitude of risk associated with a cyberattack as they may not have engaged in a formal training process. The scary truth is that many small business owners, even if they are aware of these risks, have not implemented all the proper measures of protection.” Nationwide’s Business Owner Survey also found: • 65% of business owners admit they have been victim of a cyberattack; computer virus attacks are the top type of attack reported at 33%, phishing is number two at 29%. • 86% of business owners believe that digital

risk will continue to grow. 30% of companies with 11-50 employees do not provide any type of formal training on cybersecurity. • Despite the simplicity of regularly updating software, 7% of companies still fail to take that step. Reputational risk is among the top reasons (45%) why business owners would consider investing in or purchasing a cybersecurity policy. • 35% of business owners who have never experienced a cyberattack are unaware of the financial cost to recover, highlighting a dangerous gap in knowl edge from the implications.

Best Practices

The U.S. Small Business Administration recommends the following best practices:

• Establish security practices and policies to protect sensi tive information • Educate employees about cyber threats and hold them accountable • Require employees to use strong passwords and to change them often • Employ best practices on payment cards • Make backup copies of important business data and information • Create a mobile device action plan • Protect all pages on public-facing websites, not just the checkout and sign up pages Nationwide commissioned Edelman Intelligence to conduct an online survey between June 6-12, 2019, among a sample of 400 U.S. small business owners with between 11-500 employees.

AUGUST 19, 2019 INSURANCE JOURNAL | 19

Business Moves

National

Altamont Capital Partners, Topa Insurance Group

Altamont Capital Partners has signed a definitive agreement to acquire Calabasas, Calif.-based Topa Insurance Group from its long-time owner, Topa Equities Ltd. The transaction is subject to customary closing conditions, including receipt of required regulatory approvals. While Altamont will assume majority control, Topa Equities will maintain a minority equity stake in the business following the closing. Topa is the parent company of Topa Insurance Co., and Dorchester Insurance Co. Topa wrote a reported $130 million of gross written premium in 2018 that it sold through wholesale brokers and managing general agents. The company said its strategy for the business will remain “largely the same in terms of a focus on specialty P/C lines, but with added support from Altamont to further build the business through acquiring both new capabilities and areas of expertise.” Altamont Capital Partners is a private investment firm based in the San Francisco Bay Area, with more than $2.5 billion of assets under management. Along with Altamont’s current investments in Embark General, Kuvare Holdings and Accelerant Holdings, Topa represents Altamont’s seventh platform investment in insurance and insurance services, and its 19th overall insurance acquisition. Founded by John E. Anderson in 1956, 20 | INSURANCE JOURNAL | AUGUST 19, 2019

Topa Equities Ltd. is a private diversified holding company. Headquartered in Los Angeles, the company owns more than 25 subsidiaries with primary locations in Southern California, Hawaii and the U.S. Virgin Islands. Topa has four main lines of business: beverage distribution, automotive retail, insurance and real estate.

East

SOBC DARAG, Innovative Physicians Solutions RRG

SOBC DARAG has acquired Innovative Physicians Solutions RRG (IPS) after receiving approval from the Vermont Department of Financial Services for the transaction. Mark Tabler, chief operating officer of IPS, will transfer to SOBC DARAG after the sale to help with the transition. Stephanie Mocatta, CEO of SOBC DARAG, said that this is SOBC DARAG’s second acquisition in Vermont of a risk retention group in recent months, and fourth overall. SOBC DARAG Holdings is owned by DARAG Group investors. SOBC DARAG Holdings, a direct subsidiary of DARAG UK, is the principal vehicle for future U.S., Bermudian and Caribbean growth and acquisitions.

RiverStone, Rockville Risk Management and ER Quinn Company

RiverStone has acquired Rockville Risk Management and ER Quinn Co. Rockville is a New York-based, privately owned third-party administrator and

loss adjusting company that provides comprehensive claim services to insurers, syndicates, managing general agents, re-insurers and self-insureds. Following the acquisition, Rockville will continue to operate as an independent subsidiary of RiverStone. RiverStone is an insurance run-off management company that offers claims management expertise and serves commercial and institutional customers across the U.S., Canada and Europe through strategic advisory services in the field of insurance and reinsurance contracts, insurance and reinsurance claim assessments and litigation and dispute resolution in the field of insurance and reinsurance.

Sedgwick, York Risk Services Group

Sedgwick, a global provider of technology-enabled risk, benefits and integrated business products, has signed an agreement to acquire York Risk Services Group. York is a Jersey City, N.J.-headquartered provider of claims administration, managed care, specialized loss adjusting, pool administration and loss control products. It serves a variety of clients, including corporations, the insurance industry and public entities. BofA Merrill Lynch and Morgan Stanley & Co. LLC served as financial advisors to Sedgwick, and Simpson Thacher & Bartlett LLP. Clifford Chance US LLP served as legal advisors. Jefferies LLC and J.P. Morgan Securities LLC served as financial advisors to York, and Fried, Frank, Harris, Shriver & Jacobson LLP served as its legal advisor. BofA Merrill Lynch and Morgan Stanley Senior Funding, Inc. have provided committed debt financing for the transaction. The closing of the transaction is subject to customary conditions and regulatory approvals. Terms of the agreement were not disclosed.

Midwest

Arthur J. Gallagher & Co., DPI Benefits

Arthur J. Gallagher & Co. has acquired Manhattan, Kan.-based Darrell Phillips Inc., dba DPI Benefits. Terms of the transaction were not disclosed. INSURANCEJOURNAL.COM

Operating since 2008, DPI Benefits is an independent benefits broker and consultant offering qualified retirement plans and group benefits to hospitals and other businesses throughout Kansas. Darrell Phillips and his associates will continue to operate from their current location under the direction of Jerry Roberts, head of Gallagher’s Heartland region employee benefits consulting and brokerage division, and Jeff Leonard, National Financial and Retirement Services practice leader.

South Central

U.S. Risk, U.S. E&O Brokers

Dallas-based property/casualty insurance wholesaler and managing general agent U.S. Risk LLC has acquired U.S. E&O Brokers, a wholesale broker and MGA. U.S. E&O is headquartered in Houston, with additional locations in Connecticut, Colorado and New Mexico. The U.S. E&O team, headed by Angela T. Schroder, will join U.S. Risk Underwriters, the specialty programs division of U.S. Risk. Terms of the transaction were not disclosed. U.S. Risk operates 17 domestic and international branches, and offers a range of products and services through its affiliate companies.

Arthur J. Gallagher & Co., Gillis, Ellis & Baker Inc.

Arthur J. Gallagher & Co. has acquired New Orleans-based Gillis, Ellis & Baker Inc. Founded in 1933, Gillis, Ellis & Baker is a commercial retail property/casualty broker offering personal lines and employee benefit services across the Southeast. R. Parke Ellis, W. Anderson Baker III and their associates will operate from their current location under the direction of Bumpy Triche, head of Gallagher’s Mid-South region retail property/casualty operations, and Robby White, head of Gallagher’s South Central region employee benefits consulting and brokerage operations. A fourth-generation family run business, Gillis, Ellis & Baker specializes in real estate, healthcare, environmental, scholasINSURANCEJOURNAL.COM

tic, nonprofit, and private client products and services. Arthur J. Gallagher & Co. is headquartered in Rolling Meadows, Ill.

Legion Claims Solutions

Steve Brown and Mike Worley have launched Legion Claims Solutions LLC (Legion), a firm specializing in the management of catastrophe insurance claims, environmental/industrial claims, and governmental disaster recovery programs, in Baton Rouge, La. Brown serves as CEO, and Worley serves as COO. Joining them is a team consisting of current staff, former employees, and newly hired insurance claims professionals who offer a comprehensive suite of technology-driven insurance claims services and disaster recovery resources. Worley has built and led teams that excelled in coordinating large-scale disaster and insurance response efforts nationally, including major hurricanes, earthquakes, and most notably the BP Oil Spill Claims Response in 2010. Brown and his company have focused primarily on multi-lines daily insurance claims services for over 25 years.

Southeast

World Insurance Associates, West Coast Insurance Group, Combs Insurance

World Insurance Associates LLC, an independent insurance agency headquartered in Tinton Falls, N.J., has expanded its presence in Florida. West Coast Insurance Group of Saint Petersburg, Fla., brings several Florida insurance markets and 15 employees to the World Insurance Associates organization. Combs Insurance, located in Vero Beach, Fla., provides insurance products to Indian River County and surrounding areas. Established in 1992, Combs specializes in insurance for individuals and families. Gregory D. Leifer of West Coast Insurance Group joins World Insurance Associates as principal. World Insurance Associates LLC (WIA) is an independent insurance agency headquartered in Tinton Falls, N.J. It offers

personal and business insurance solutions in 50 states, providing group benefits and property/casualty insurance to companies of all sizes in a variety of industries in addition to insurance services for individuals, focusing on coastal properties and high-net-worth clients. WIA began business in 2012, has completed 44 acquisitions. It serves its customers from 30 offices in N.J., Pa., N.Y., Conn., R.I., Maine, Ohio, Fla., and Washington, D.C. The company has been named a Top 100 Independent Property/ Casualty Agency by Insurance Journal. BRP Partners with Foundation Insurance of Florida.

West

EPIC, Trumark Insurance & Financial Services

EPIC Insurance Brokers and Consultants has acquired Trumark Insurance & Financial Services in a Pleasanton, Calif. Trumark is a brokerage/general agency specializing in the institutional financial advisory market. EPIC is a retail property/casualty and employee benefits insurance brokerage and consulting firm.

AmWINS Group, LISI, CoPower

AmWINS Group Inc. has signed a definitive agreement to acquire LISI Inc. and CoPower, Inc. Terms of the deal were not disclosed. The transaction is expected to close later, pending regulatory approval and customary closing conditions. LISI Inc. is a California-based general agent specializing in medical and ancillary benefits. CoPower Inc. is a third-party administrator in California focused on providing consolidated administration in the ancillary space. LISI and CoPower will become part of AmWINS’ Group Benefits division, which consists of 10 operating companies that develop, underwrite, distribute and administer niche employee benefit programs. Charlotte, N.C.-based AmWINS Group is an independent wholesale distributor of specialty insurance products. AUGUST 19, 2019 INSURANCE JOURNAL | 21

Spotlight: High Net Worth Why the High Net Worth Client Needs More than Just an Agent

By Patrick Wraight

hat exactly is a high net worth client, also known as a “private client?” According to Investopedia.com, a high net worth individual is an individual or family with liquid assets above a certain figure. Many sources set that figure at $1 million. Those people need insurance like the rest of us do, but not exactly like the rest of us do. They need a homeowners policy, but they aren’t going to Lemonade on their smartphones for it. They need a personal auto policy, but they aren’t going to make a 15-minute call to save 15%. They have the same basic insurance needs as other insurance customers do, except that they are likely more complicated. Those insurance needs aren’t going to 22 | INSURANCE JOURNAL | AUGUST 19, 2019

be met by any mobile app or cookie-cutter agent. They need someone who will act as their risk manager. They need an advisor, an advocate and an expert. Think about property. Many customers own their primary home and that’s all. Some might even own a rental property or vacation property. High net worth individuals may own several properties, including their primary home, some rental properties, a vacation home and foreign properties. It’s likely that when they purchased those properties, they didn’t do it in their own names. If they have rental properties, they might be owned by a Limited Liability Company (LLC) that the customer owns. Their homes could all be owned by a trust or family LLC. It’s possible that their primary residence includes a second dwelling, call it a guest house, or motherin-law suite. That guest house may be on

the same premises, but it may have its own address. Once you deal with property ownership, you also must consider the homes themselves. Many insurance companies want to see exterior pictures of all sides of the house. That’s not going to do. You will need to make a physical inspection of the home, taking pictures of the specialized building materials. You may need to spend time collecting information about certain works of art, custom personal property, and artifacts. Creating a building valuation for the size and quality of their primary home will be complicated. It will take time. Once you handle the main house, if there are out buildings, you’ll need to inspect those also. The ISO HO-3, and other homeowners’ policies based on it, will only allow for so large a limit for other structures. High net worth customers are likely to have out INSURANCEJOURNAL.COM

them more than 100 miles in a year. They might take them to shows and events in other parts of their state, but they aren’t driving them. They may travel by trailer or car hauler. They may even have cars that they keep at their second home.

They need someone who will act as their risk manager. They need an advisor, an advocate and an expert.

exotic or classic vehicles, they are valuable vehicles. Rather than depreciate over time (like most vehicles do), these high-value vehicles can appreciate. That makes the standard actual cash value insurance policy inappropriate for them. Their agent needs to be able to help them to choose between other valuation options, like stated value or agreed value. Of course, just like the homeowners’ policies for these customers, there are carriers that specialize in dealing with their specialized exposures. High net worth customers don’t want an agent that can take orders. They want someone that can help them with their complex insurance purchases.

Think about exotic cars. These are vehicles that are in limited production, have a limited number available, or are customized so that they are more custom car than production model. Even these Wraight, CIC, CRM, CISR, AU, AINS, is the director of vehicles are often used for show or events. Insurance Journal’s Academy of Insurance. Email: They tend to make lots of sound and draw pwraight@ijacademy.com. Website: www. the attention of the crowd. A&M Homeowners PRINT.pdf 1 7/31/19 11:09 AM IJAcademy.com Whether they are antique, custom,

We Say YES to High Value Homeowners Insurance buildings that require a higher limit than these policies will allow. Consider the exclusive neighborhood in my town that is built around a private airstrip. Every house in that community includes two garages; one large enough for two or three cars and the other is for the homeowner’s aircraft. This neighborhood has a restriction. You can only buy a house there if you own an airplane. High net worth individuals have cars like the rest of us do, but not exactly like the rest of us. Many families have a car for every adult, or driver, in the family. At one time, my house had four cars that we owned. These customers have daily use cars like we have. They may also have other vehicles such as exotics, classics, or antique vehicles. They may keep these vehicles for special occasions such as car shows and parades. They may not even drive any of

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AUGUST 19, 2019 INSURANCE JOURNAL | 23

People National

Hiscox, the Bermuda-

headquartered specialist insurer, has appointed Melissa Hill as head of claims in the U.S. Hill, who has more than a decade of experience in claims operations, will oversee the strategic direction and performance of the company’s U.S. claims service. She will be based in Atlanta and will report to Steve Langan, CEO for Hiscox USA. Prior to joining Hiscox, Hill was the chief claims officer at Blackboard Insurance Co. Previously, she served as a senior vice president at AIG, where she oversaw three major claims operations: Defense Base Act Federal Workers Compensation, Foreign Voluntary Workers Compensation and Vendor Services Workers Compensation.

East

East Providence, R.I.headquartered Starkweather &

Shepley Insurance Brokerage Inc. (S&S) has elected Elizabeth Lowe to the board of directors. Lowe, president of Custom House Risk Advisors (CHRA), is the first female on the board in the company’s history. As President of CHRA, Lowe leads Starkweather’s Real Estate Risk Solutions, an industry-specific practice group focused solely on assisting real estate investment trusts (REITs), private equity investment Elizabeth Lowe firms and other large real estate owners, managers and developers. Prior to joining S&S, Lowe was a senior risk management consultant at Robert M. Currey & Associates

of Boston, where she worked for more than seven years.

Liberty Mutual has appointed Janelle Edem to be chief of staff for its Global Risk Solutions (GRS) commercial and specialty lines (re)insurer, which provides traditional insurance, specialty and reinsurance to businesses globally. Most recently, Edem served as general manager, UPS Distribution and Service, for GRS’ National Insurance operation. Edem will report to Dennis Langwell, president of GRS, and Janelle Edem will organize and advance strategic issues to facilitate decision-making for GRS’ executive office. Cook Maran, a Prime Risk Partner, has hired Brian Erickson as a client advisor

for commercial property and casualty risks, specializing in energy, auto dealer and other large complex accounts. Erickson will be based out of Cook Maran’s Mt. Laurel, N.J., office. Erickson was previously regional manager for Energi Insurance in Peabody, Mass. Cook Maran, which traces its roots to 1946, has almost 250 employees in eight offices in New York and New Jersey.

Southeast

Former Tennessee Insurance Commissioner Julie Mix McPeak, who stepped down as the head of the Tennessee Department of Commerce and Insurance Commissioner in May, has joined the global law firm Greenberg Traurig, P.A., in the firm’s Insurance

24 | INSURANCE JOURNAL | AUGUST 19, 2019

Regulatory and Transactions Practice. McPeak will serve as one of the founders of the firm’s new location in Nashville, Tenn. — its 31st U.S. location and 41st worldwide. McPeak was reappointed as commissioner by Tennessee Governor Bill Lee in January 2019, following Julie McPeak her original appointment as commissioner by Governor Bill Haslam in January 2011. McPeak is the first woman to serve as chief insurance regulator in more than one state. In 2018, McPeak served as president of the National Association of Insurance Commissioners (NAIC). Before leading the Tennessee Department of Commerce, McPeak worked in private practice as counsel to the insurance practice group of law firm Burr & Forman LLP. She also served as the executive director of the Kentucky Office of Insurance (KOI) and spent nine years as an attorney for KOI prior to that. She also served as general counsel to the Kentucky Personnel Cabinet.

XS Brokers (XSB), an independent insurance underwriting and wholesale brokerage group, has hired Michelle Delmonico-Longo as Business Development manager, and David Hall as senior vice president of Business Development for the Florida and Southeast region. According to Lori Ault, executive vice president and Southeast territorial manager, the two will play a role in expanding XS Brokers’ geographic reach among insurance agents and brokers

seeking small- and mid-market commercial lines products. Delmonico-Longo has more than 12 years of sales and marketing experience in the commercial insurance field. Her territory will include Central and Northern Florida. Hall, who will be responsible for the Southwest, Southeast and South Florida territories, has more than 18 years of sales and marketing experience.

The Insurance Information Institute (I.I.I.) has appointed Mark Friedlander as its new

Florida-based communications consultant. Friedlander was most recently a communications Mark Friedlander consultant at the Insurance Institute for Business & Home Safety (IBHS), where he focused on media relations. He is the former head of corporate communications and assistant secretary at The Main Street America Group, a Jacksonville, Fla.-based super-regional property and casualty insurance carrier. He has also held senior communications and marketing roles at Prudential Financial and HSBC Holdings PLC. Friedlander succeeds Lynne McChristian, who had been the I.I.I.’s Florida-based communications consultant since 2008. McChristian was earlier this year named the director of the Office of Risk Management and Insurance Research at the University of Illinois at Urbana-Champaign, where she is also a senior instructor teaching insurance and enterprise risk management classes. She continues to serve as an I.I.I. spokesperson INSURANCEJOURNAL.COM

and a non-resident scholar.

South Central

Mike Jacoby has joined the Dallas-based team of Risk Consulting Partners (RCP) and will lead the firm’s healthcare practice. Jacoby brings to RCP more than 35 years of experience, having worked for insurance intermediMike Jacoby aries such as Marsh & McLennan, Lockton and IMA. The RCP healthcare practice includes cyber and management liability perils for hospitals, physician groups, managed care organizations and others. EC3 Brokers US has appointed James Norris as chief actuary and Terry Holley as senior

vice president in Dallas. Norris joined C3 from Lapis Resources where he was president. Norris has more than 25 years of experience in the insurance and reinsurance industry. Holley spent the past year working as a consultant to develop a new start-up managing general agency (MGA). Throughout his career, Holley has worked closely with MGAs and captives to develop reinsured programs in several lines of business. He was previously a director at Wellington Insurance Group.

Midwest

Cannasure Insurance Services, a Cleveland, Ohio-

based managing general agent and wholesale insurance broker for the cannabis and hemp industries, has hired Joe Foley as chief financial officer. Foley has more than 20 years of experience as an advisor and INSURANCEJOURNAL.COM

principal in corporate finance, mergers and acquisitions, strategy and operations. Prior to joining Cannasure, Foley was a partner at Falcon, a private equity talent platform, and he was a co-founder of Greencastle, a mission-critical infrastructure developer. Joe Foley Managing general agency and surplus lines broker, J.M. Wilson, has added Matt Lewton as transportation underwriter and Tyler Arens as assistant transportation underwriter in its Carmel, Ind., office. Lewton is responsible for underMatt Lewton writing new and renewal transportation risks and serving independent insurance Tyler Arens agents in Indiana. Arens is responsible for assisting underwriters on a wide variety of transportation risks, as well as quoting new and renewal business, corresponding with carrier underwriters and assisting independent agents in Indiana.

Michael Blackshear has joined Ryan Specialty Group (RSG) as a senior vice president and global chief compliance officer. He is based in the company’s Chicago headquarters. Blackshear joins RSG with more than 27 years of financial service and executive experience in compliance

and risk management. His previous position was with Chubb Insurance Group. Prior to Chubb, Blackshear held various leadership roles with Marsh & McLennan Cos. He began his insurance career as an underwriter for Continental Insurance Co. and then as a casualty broker with Alexander & Alexander.

West

Transatlantic Underwriters has named Colby Waltenburg

vice president. Waltenburg will be coordinating the opening of a new office for TAU on the West Coast. Waltenburg has worked in most aspects of wholesale property and casualty insurance operations since 1997. Colby Waltenburg He was previously senior vice president of transportation for Coastal Brokers Insurance Services Inc. Transatlantic Underwriters is a wholesale insurance brokerage specializing in the automotive and trucking industry. San Diego-based Cavignac & Associates has added Denise French to its employee benefits team as an account administrator for special projects. French serves as the primary customer service person for enrolled members. She has five years of experience in the employee benefits arena Denise French of the insurance industry. French was most recently a human resources generalist for ACI Specialty Benefits. She

was an administrative assistant in the contracts and provider relations department at Molina Healthcare before that. She also previously worked for Covered California for Kaiser.

RT Specialty has added Matt Bernal to its property practice

group as a vice president. Bernal is based out of the San Francisco office. He has 15 years of property insurance experience. Bernal previously was with Hiscox, where he managed property for territories outside of the Southeast. He was a property/construction wholesale broker before that. R-T Specialty LLC, a subsidiary of Ryan Specialty Group LLC, provides wholesale brokerage and other services to agents and brokers.

Alliant Insurance Services Inc. has named Jonathan Lee

vice president of catastrophe modeling and business analytics. Lee will be based in the San Diego office and will oversee the catastrophe management function for Alliant Underwriting Solutions, including portfolio management, modeling and business data analysis, process improvement and reporting.

Topa Insurance Co. has named Kelly Yates assistant

vice president of claims. Yates will be located in Topa’s Calabasas, Calif., office. Yates has oversight of Topa’s property and commercial auto business and its special investigations unit. Yates joined Topa five years ago as a claims examiner, and was later promoted to claims manager. Yates was previously with State Farm and State Auto Insurance before that.

AUGUST 19, 2019 INSURANCE JOURNAL | 25

Special Report: Agency Management

1. Quality Sales Managers.

Invest in a quality sales manager who knows how to motivate and guide members to their goals. 2. Transcribe with AI. Otter. ai is a platform that allows — through the website or mobile app — automated transcription of audio. I am recommending this to producers to record meetings so they have a transcribed file. A free account allows for 600 minutes per month and a paid account ($100 annual) allows 6,000 minutes a month. — Steve Anderson 3. Right Coverages. Talk clients into buying the coverages they actually need rather than settling for what you think they will buy. That is what a good salesperson does. — Chris Burand, Burand and Associates

4. Tracking Is Vital to the Health of Your Agency.

Enhance the tracking of existing marketing to better determine what is and is not effective. Use Contact Us (web forms) and tracked phone lines to monitor the performance of your offline and online marketing. — Mernice Oliver, National Association for Advancement of Women in Insurance 5. Push Content. Content marketing should be one of your key long-term marketing strategies. As the world evolves, more people are looking online instead of going to a local agent. — Jason Marlowe, InsuranceHub 26 | INSURANCE JOURNAL | AUGUST 19, 2019

INSURANCEJOURNAL.COM

6. Get a Mascot. Decide to

have a mascot for your agency. It could be a real pet or madeup cartoon. Hold a contest to name it. Use it in your advertising and marketing.

7. Promote Corporate Citizenship. To attract young

talent, your organization must make a stronger commitment to their communities and their employees’ involvement by rolling out voluntary community service initiatives. But just encouraging participation isn’t enough. Companies must make community service part of their culture and carve time out of the workday for employee participation. — Mary Ann Cook, The Institutes

8. Gain Strength in Numbers. Any insur-

ance firm that uses a management system or technology solution has a built-in ally for proactive change: its user group. Collaborating as a group, users can lead improvements to the products they use every day to make them more valuable. — Melissa Bond, NetVU (Network of Vertafore Users) 9. Bed on Wheels. Sponsor an annual bed race where local businesses, nonprofits, fire-police, etc. and other

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groups form teams to compete. Idea is for them to outfit a “bed on wheels” that can be pushed down a street by the team with one person in the bed with people on sidewalk cheering them on. Two prizes: best costumes/design and fastest time. Winners get cash prizes for donations to their favorite charity. It's great fun and good publicity for the participating firms and groups.

10. Don’t Fear Rejection.

Being young in the insurance industry, I find it important to not get caught up in being afraid of being rejected. The insurance industry has a high percentage of people who have been in the industry for 20-plus years. Selling to brokers can be intimidating. Being able to ask questions and continue to develop yourself by learning the industry helps with that fear. You will find that nearly everyone in this industry is happy and willing to help. — Ryan Smith, The McGowan Companies

11. Make Your Brand Human. So many firms are

missing the all-important human element on one of their most-important brand touchpoints: the website. Two decades after the internet became widely available, what do we see at so many corporate sites? Words, not faces. Corporate speak and brochure-ware, not human communication. Buildings, not people. Boring, canned stock art, not photos of real employees, customers, or business partners. Breathe some humanity

and personality into your website. Remember, there are living people on the receiving end of all of this. Not bots. — Peter van Aartrijk, author, ThePowersBook.com

12. Distressed Accounts.

Many agents shy away from distressed accounts because they feel they are too scary, and they don’t know enough about the exposure. But the greater the risk, the greater the reward. Not only is the premium larger, but your competition is smaller. — J.D. Baubuder, All Risks Ltd.

13. Automate Marketing.

Focus on automating your tedious marketing processes. When you’ve automated your marketing, you’ll be able to accomplish more with less people, and you’ll free up your team’s time to focus on what’s most important: closing deals and servicing clients. — Cam D. Bob III, Infinity Leads 14. Differentiate. Our agency provides claim advocacy and risk management consultation as a means of differentiation in a crowded sector. Positioning ourselves as a trusted advocate and risk manager promotes the de-commoditization of the insurance product. To maintain relevancy in a rapidly-evolving market, an agency must focus on providing consultative, value-added services to its clients. — Dan Hayden, The Seltzer Group 15. Try Something New. Grow your creative muscle. How? Take time to: Try something new. Play. Ask questions. Be wrong. — Donna M. Gray, American Insurance Marketing & Sales Society

16. Check Your Rep. Monitor your online reputation and what others are saying about you. 17. Take a Poll. Put a pop-up poll on your own and/or the local newspaper’s web site with one simple question about your community. The newspaper may even work with you to publish the results. Examples: What is your favorite local park? How often do you shop downtown rather than at the mall? What is the worst intersection in the city? What is the best outdoor public space for kids to play? What movie(s) or TV shows were filmed here? Which business has the best-looking outdoor sign? 18. Automated Notes.

Automating personal handwritten notes with Handwrytten. com. Use the code HANDCARD for a $5 credit on your account. — Steve Anderson

19. Seek and Act on Feedback. It can be difficult

to know exactly how your customers feel. Use a third-party source, if possible, to get direct

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AUGUST 19, 2019 INSURANCE JOURNAL | 27

Special Report: Agency Management continued from page 27 feedback from customers on their experience working with you. Absorb and act on that feedback, good and bad. Their responses will give you a framework on which to build success and stronger relationships. — Ann Myhr, The Institutes 20. Video Marketing. Don’t know where to begin with video marketing? Look at the blogs on your website for your content/script. Approximately 350 words will give you a two-minute video. Shoot it on your cell phone and post it to YouTube. Now you have given new life to older content as well as contributed to your agency’s SEO. — Dshanya Reese, Watkins Insurance Group 21. Sales Training. Invest in sales training for your sales team, including the veterans and high-performers. 22. Target Markets. Invest in education for your sales team into your target markets and specialty accounts. 23. Video Matters. Launch a YouTube channel answering recurring questions from your clients. Double win: you help your clients, and it’s possible that many people have the same questions in their minds. Video matters, plus you could gain more clients in the long run. — Marcos Ortiz Valmaseda, data engineer at Indra

24. Culture Matters.

Employees want to feel engaged with their coworkers and enjoy their working environments. Adding teambuilding events, activities and contests for employees, and morale-boosting reward systems will help increase

engagement. Along with the greater employee satisfaction these efforts can produce, these additions can even benefit the company’s financials. — Ann Myhr, The Institutes

25. Post with Meaning.

Weak social media efforts are useless. Unless you go all in and stay consistent, continually engaging with the audience, it won’t help. Posting just to post is useless. — Jason Marlowe, InsuranceHub 26. Be Prepared. Every time you call your prospect, you are interrupting their day. Make sure that you’re prepared to lead them through a purposeful conversation that focuses on the risks and threats facing their business. — Susan Toussaint, Oceanus Partners, a ReSource Pro Company 27. Write Well. Our clients say the ability to write clearly is the leading skill they look for in job candidates. Good oral communicators often fall apart in writing. And while no one thinks twice about a well-written email, a poorly written one can destroy credibility. There’s help out there! Revisit Rhetoric 101 at the community college. Take an online course. Host a grammar lunch box series. Try Lynda.com. Better communicators bring better business. — Ronimarie Acord, Aartrijk 28. Take 5. There are five fundamentals to consider when making decisions about insurance technology: 1) Know your numbers around growth, retention, productivity and profitability. 2) Leverage strengths and strengthen weaknesses of your organization, so you can be positioned to take advantage of the right technology at the right time

28 | INSURANCE JOURNAL | AUGUST 19, 2019

for the right reasons. 3) Stay aware of what is going on in our industry and in the world at large. 4) Have a plan, ideally a written one that is communicated across your organization. 5) Execute the plan. — Kitty Ambers, AVSYT.com

29. Making Changes.

Employees don’t resist change. They resist change they don’t understand. Overcommunicate the why behind the change and make sure you let them know what you considered in deciding to make the change. Research shows that employees will buy into a change, even if they don’t agree with it, if they believe management paid attention to the right inputs when making the decision to change. — Laurie Branch

30. Password Management.

Take up a cause to save your agency or carrier time and money: Learn about a better way to better manage passwords. Ron Berg, executive director of the IIABA Agents Council for Technology, estimates that agencies soon will see their costs to manage passwords skyrocketing to as much as $1,000 to $3,000 per user per year. — Kevin Baker, Westfield Insurance and IDFederation.org member

31. More Than Just ABCs and 123s. As a risk manager,

continuously educating your clients about their risks, ways to protect their assets and proactive measures that would help them avoid a claim is just as important as helping them through a claim. Ongoing conversations about your clients’ lifestyle, assets and emerging risks will ensure you have the information you need to provide them with the education they deserve. — Lisa Lindsay, Private Risk Management Association

32. Encourage Mentorship.

By instituting structured mentorship programs, companies can create a pathway to prosperity for their younger workers that leaves them satisfied with their careers in the process. — Mary Ann Cook, The Institutes

33. Always Be Recruiting.

Hiring for a licensed staff person can be expensive and time consuming. Rather than only hiring when you need staff, consider creating a monthly or quarterly hiring strategy. Look for individuals that have the characteristics and aptitude you are looking for, rather than only considering licensing and experience.

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Keep a consistent pipeline of qualified candidates. — Mernice Oliver, National Association for Advancement of Women in Insurance 34. Hit Ratio. Measure your marketing success by your hit ratio rather than your clicks. — Chris Burand, Burand and Associates 35. Work It. Speed to contact is vital. People don’t want to wait for anything. As soon as you get the lead, you need to work it.— Jason Marlowe, InsuranceHub 36. Respect. The idea of “respect” goes a long way. Treat your customers with respect, treat your agents with respect and promote a culture of respect at all levels of your organization. It will have direct impact on your bottom line. Guaranteed. — Amyn Rajan 37. Make it About Them. Your prospects don’t want to hear about you. They want to hear about how you can help them. — Eric Bluhm, Zywave 38. Build a Brand. Build a cohesive brand on your emails, social media and other marketing materials. Have an office

pet? Make it your mascot. Is it a family-owned agency? Include all members in your marketing pieces. Making your agency memorable could be the bottom line in merely having an audience vs. making sales. — Toshya Leonard, Appalachian Underwriters Inc.

39. Be Authentic and Show Empathy.

Whether it's your clients, prospects or employees, you need to really put yourself in others’ shoes. At the end of the day, we are all working towards the same common goal. — Mike Bulow, The Bulow Group 40. Linked Up. Link your social media accounts to activities that involve your customers. Ask your customers to do something on social media and tag your agency. This can work best around a holiday challenge. For example, if you send a holiday card to your customers, ask them to pose with the holiday card and then have them post it to both your social media accounts and their own. You can even

give a small prize for the most creative. — Mitchell Jawitz, Anderson and Murison

41. Agency Management.

Understand and properly manage your trust accounting to provide accurate knowledge of your cash available, liabilities for producer commissions and advances, to prevent theft and being out-of-trust.— Henry Bender, Insurance Agency Trust A/C Management Services

42. Contact the News.

Reach out to local media outlets and offer story ideas on trending insurance topics. Earning news coverage builds thought leadership and awareness for your agency. — Katie Curvel, We Insure Group

43. Under Promise and Over Deliver. Do

not promise what you are not guaranteed to accomplish, so if and when you do, you over deliver! — Ashlee Paieda, All Risks Ltd. 44. Recruiting Is Sales. Brand Identity + A Strategic Plan = Successful Recruiting. What makes your agency unique? What makes your opening different? What is the candidate’s long term opportunity? These answers build your brand identity. — Mary Newgard, Capstone Search Group

45. Stay in Contact with Email. At minimum, you

should send a renewal reminder before your client's policy expires. But don’t stop there.

You can also cross-sell, ask for reviews and referrals, and even nurture prospects via email. Plus, a slow and consistent drip of communication from your agency helps to keep your agency top of mind. — Laird Rixford, ITC

46. Develop ‘til You Drop.

Sending younger workers to industry conferences and providing developmental learning programs will encourage their personal growth and make them feel valued. — Mary Ann Cook, The Institutes

47. Use Video Content to Build More Personal Connection. In the digital

marketing space, Video is King! 77% of B2B marketers produce video content. A few ideas to get started: 1. Welcome clients to the agency. 2. Give a tour of your office and introduce your staff. 3. Answer frequently asked questions from clients. 4. Announce your monthly referral rewards winner. 5. Wish clients a happy birthday, anniversary, or other special occasion. — Mernice Oliver, National Association for Advancement of Women in Insurance 48. A-Players. Dedication and discipline beats brilliance and giftedness every day of the week. And, A-Players don’t get lucky, they make lucky. Every time you do that which you know to be right over that which you know to be easy, you facilitate your entry into the Hall of Fame of Epic Achievers. — Robin Sharma, “5 a.m. Club”

49. Ask for the Sale, Then Shut Up. You would be amazed at how often a simple question will lead to a simple answer. If you ask to complete the sale

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AUGUST 19, 2019 INSURANCE JOURNAL | 29

Special Report: Agency Management continued from page 29 and then keep selling, you have missed an opportunity to hear yes. — Marshall Klontz, Leavitt Group 50. Know How to Pivot. Sales objections, like death and taxes, are something you can anticipate. Preparing for them before you make a call or have a meeting will help you address your prospects’ objections, pivot and keep you in control of the conversation. — Susan Toussaint, Oceanus Partners, a ReSource Pro Company 51. Keep Moving. Automation, when used well, helps to passively keep your pipeline moving. — Jason Marlowe, InsuranceHub

52. Implement a Communication Service Model. It’s a great way to stay

on top of the minds of your clients and referral sources. It’s important to communicate to them consistently and with quality content specific to the audience. — Katie Curvel, We Insure Group

53. Refrain from Saying ‘Sell Insurance.’ This is a turn off

and insinuates that you are a price peddler, a commodity salesperson. Setting yourself apart from the competition requires the development of true strategic and consultative

skills. Developing expertise in certain niche markets and providing value to a customer where you can truly help improve their business and Total Cost of Risk is very different, and it's valuable. Using the verbiage, “Can I quote your insurance?” brings no value to the table as you align yourself with every other insurance producer out there. — Greg Suman, Leavitt Group

54. Association Participation. No one can join every association, but if you join, commit to participate fully. Attend events, provide giveaways at each event, advertise/patronize/ sponsor events, volunteer for committees, evolve into an officer and/or board member. By continuing to give more than you get, it will pay-off with solid clients and referrals. — Warren Wettenstein, Wettenstein Insurance 55. Use Canva. Quite simply the easiest, most user-friendly graphic design program ever. In seconds, you can create all you need for social, whip up a new card and have it printed, make a poster or whatever else you need. No graphic design experience necessary to create professional looking sales and marketing pieces. — Lynn

Mason-Small, Rogers & Gray Insurance 56. Ask After the Win. Every time agents have a win, such as a new sale, claim paid, exemplary service performed, a referral should be asked for. That is their hour of need and when clients are most likely to give you a referral or tell others how great you and your agency are. — Catherine Oak, Oak & Associates 57. Gaming. Make a game for prospective and existing clients; BINGO or digital prize wheel when they go your website. Games boost engagement and will also show who your top fans are.

58. Be Charitable.

Pick a local charity and donate and volunteer. Feature this on your social media, website and office. Hold a special month-long event where clients can come in and drop off backpacks, basketballs, supplies, etc. This is a win-win for clients and employees.

59. Intend to Be Intentional. Too often, agencies view the race to recruit top talent as a marathon with 10,000 entrants. It’s overwhelming, and you’ll be lost in the shuffle. The best approach is to break down hiring needs into subgroups. Internal and 30 | INSURANCE JOURNAL | AUGUST 19, 2019

external resources need to be utilized differently to hire an account manager, a producer and a leader. — Mary Newgard, Capstone Search Group 60. Trusted Advisor. Always provide the client with the best coverages for their company, become their trusted advisor, and ultimately change the way they view insurance. — Jonni Gray, The Seltzer Group

61. Engagement, Engagement, Engagement.

Establish regular communications with your existing customers. Start a monthly email newsletter with local community news, industry updates, special offers, and new products or services. Use social media to build a fan base. Create a social media strategy to stay top of mind of your clients. — Mernice Oliver, National Association for Advancement of Women in Insurance

62. Referral Rewards. Create

a monthly referral rewards strategy and announce/ tag the winners in your social media post. — Mernice Oliver, National Association for Advancement of Women in Insurance 63. It’s About Them. Piquing the curiosity of your prospects only happens when you make the message about them, not your products and services. — Susan Toussaint, Oceanus Partners, a ReSource Pro Company

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64. Network with Your Neighbors.

Curate a “Best Of” list recognizing the top people and businesses in your area. Congratulate the winners personally and distribute the list to your customers. People love to be complimented, and this grassroots marketing tactic is a useful way to build leads. Make it an annual list, and you can even use it to generate social media buzz! — Ann Myhr, The Institutes

65. Automate Your Marketing. Automation is the

key to efficiency. Develop an automated, proactive content marketing program to stay in front of your clients, while contributing valuable information with minimal time investment. — Eric Bluhm, Zywave 66. Hands-On Training. Offer opportunities for agents to gain hands-on training in real-world situations. We Insure opened a corporate storefront to train new agents on insurance practices in a real working office. — Katie Curvel, We Insure Group

67. Preparation is the Key to Success. When you walk

into an appointment and have compiled all available information and have all the necessary questions ready, it goes a long way when displaying your overall level of work. Preparation leads to confidence; confidence leads to sales. — Marshall Klontz, Leavitt Group

68. Don’t Get Greedy.

Consider every association member a Center of Influence (COI). Always put organization INSURANCEJOURNAL.COM

and client ahead of greed. — Warren Wettenstein, Wettenstein Insurance

69. Pay Bonuses to

CSRs. Account managers/CSRs

are on the front line with clients every day. They should be paid for new business account rounding and presenting leads to other departments, if a new coverage is written. In personal lines, we recommend a flat dollar amount per policy. In commercial lines or benefits, a percentage of the new coverage written, such as 10% to 20% of the commission first year only, the amount paid depending on whether they do it alone or get help from a producer. — Catherine Oak, Oak & Associates 70. Know Your Partners. Take the time to build relationships with your carrier partners, beyond the daily grind of accounts. Not only will your accounts have a better shot at

priority when needed, but you will benefit in other ways such as hearing what they are seeing in the market on their book and know when to keep pushing back or when it is truly the best they can do. — Ashlee Paieda, All Risks Ltd. 71. Get Instagram. If your business is not on Instagram yet, create one now. It’s a good way to connect with your clients. Everyone loves hearts. In the very least, it’s a growing and active insurance community and will give you all the good insurance feels. 72. Be Available. Always have three easy ways for people to contact you. — Jason Marlowe, InsuranceHub

73. Sales Attributes.

Humility, empathy, diplomacy and genuine curiosity are critical attributes for high performance in sales. — Frank Pennachio, Oceanus Partners, a ReSource Pro Company 74. Leverage Data. There’s an incredible amount of data

available at our fingertips. Show your clients how you can help them using actual numbers from their business or benchmarks from their industry and your message will become more real. — Eric Bluhm, Zywave 75. Reviews. Ask every customer for an online review. Earning positive reviews takes effort and most customers don’t share feedback unless they’ve had a bad experience. Set up an automatic request via email to make it easy for your customers to review your agency. — Katie Curvel, We Insure Group 76. Love Your Enemy. You should welcome competition. Nothing focuses the mind like being engaged in combat to the death with your mortal enemy. Mac vs. PC. Coke vs. Pepsi. The Allies vs. The Axis Powers. Having a mortal enemy for your brand concentrates the mind and clarifies the values of everyone involved. Articulate to customers and prospects how you are different. That is called positioning. — Peter van Aartrijk, author, ThePowersBook.com 77. Be Visible. Don’t Hide Behind E-mail, Texts and Social Media. In the super connected world that we live in, prospect and client touches are easier

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Special Report: Agency Management continued from page 31 than ever, but can have an impersonal feel. Take the extra step to have a client-focused conversation to uncover needs, in person. — Joseph Feitz, All Risks Ltd.

78. Don’t Pitch, Connect.

If people don’t like you, they aren’t going to do business with you. Build relationships, be present and available, and follow through on commitments and promises. Show your value by being knowledgeable in your field and maintain your connection with clients well after the deal is closed. — Andrew Caldwell, Smart Choice

79. W.O.M. Marketing Works.

Customers buy based on recommendations from trusted sources. Ask your clients to recommend you to their friends and family or post a review online or on social media. The added bonus is that not only is Word of Mouth Marketing proven to be effective, but also it is free. — Jef Morgan, Chief Marketing Officer, Smart Choice 80. Time Management. The best producer and the worst producer have one thing in common — the same amount

of time. If you want to be better, utilize your time more effectively. Sometimes small accounts and large accounts require the same amount of time. Sharpen your focus. Be selective. — J.D. Babuder, All Risks Ltd. 81. Track Yourself. If you want more online reviews, measure it. Track how many reviews each agent gets. — Jason Marlowe, InsuranceHub 82. 5 Ws. Always remember the five Ws of consumer engagement: 1) Who do you want to engage? 2) What message does your client expect? 3) Where does your client expect to communicate with you? 4) When does your client want to hear from you? 5) Why does your client want your product? — Donna M. Gray, American Insurance Marketing & Sales Society

83. Ask for Help Reducing Passwords. Emerging cyber-

security risks and regulations make credential management a critical, but costly, task for agencies. The industrywide volunteers of ID Federation developed a secure and free way for every agency user to

have just one ID and password for insurance transactions. — Irv Kantar, Business Manager, ID Federation 84. Lead Lists. Hire a freelancer to create a lead list. The cost is extremely cheap (sometimes as low as $3/hour) and the lists are much better and more accurate than anything you can purchase. Run your lead list through an email scrubbing service to make sure the emails are accurate. — Carolyn Bradfield 85. Be STRONG. S: Serve with integrity. T: Have a team with the skills and expertise to exceed client expectations. R: Reliability — be there to solve problems, answer questions, and stand by when clients need guidance and support. O: Our clients' interest ALWAYS comes first. N: Never Fail to Learn. G: Give your best effort. — Jonni Gray, The Seltzer Group

86. Be Genuine

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and Forthcoming with Information. If your carriers

and clients know they can trust that you are not withholding information, they are more likely to jump on your accounts and do whatever they can to help you get the deal done. — Ashlee Paieda, All Risks Ltd.

87. Be Remembered.

Branding is important, especially with so many different agencies out there. They’d best remember you. — Jason Marlowe, InsuranceHub 88. Change Behavior. The primary role of a salesperson is to lead change behavior. People don’t like to change, yet buyers will change when they discover there is greater pain or risk with the status quo than the risk and pain to change. — Frank Pennachio, Oceanus Partners, a ReSource Pro Company

89. Avoid Alphabet Soup.

Unless you have an AIG-style bucket of money for global branding, resist the temptation to take the easy way out by relying on initials or acronyms for firms, programs, projects, products or services. Take the extra time to craft a name using words that mean something. A set of initials typically does INSURANCEJOURNAL.COM

not; that’s why, for example, the National Association of Realtors isn’t NAR. The organization opted for Realtors. The members are real people, not vague entities from the planet NAR. — Peter van Aartrijk, author, ThePowersBook.com

90. Think About Your Own Customer Experience. Our

industry spends a lot of time discussing the customer experience, and rightfully so. But what about our own experiences as users? Think critically about the current user experience with your systems and processes. — Kitty Ambers, AVSYT.com

91. Stay Connected to Your Prospective and Past Clients.

Yes, email marketing is still a very viable marketing strategy.

Start an email newsletter with updates, products, and safety tips. With email automation, you can stay on the minds of your past clients and future prospects thanks to a continuous and valuable email presence. — Mernice Oliver, National Association for Advancement of Women in Insurance

92. Diversify Your Training.

Try these ways to expand your organization’s learning culture: Tuition for business and life-skills training. Paid time off to attend classes. Support for volunteer efforts. Career days and mentorship. Collaborate with colleges and universities. Sabbaticals to pursue deep learning. Lunch-and-learns with in-house and invited speakers. Support attendance at industry conferences. Host networking events and workshops. — Debbie Ivie, NetVU (Network of Vertafore Users) 93. KPIs. Define your marketing success by identifying and

measuring Key Performance Indicators. You can’t improve unless you measure your progress. — Katie Curvel, We Insure Group

94. Production Increase.

Every year, your manager probably expects more production from you. You have two choices: 1) Work more hours; 2) Change something you did last year to become more efficient. Which will you choose? – J.D. Baubuder, All Risks Ltd.

95. Make Progress.

What's the No. 1 motivator for employees? A Harvard study showed that simply the satisfaction of making progress in their work was associated with more positivity and motivation than any other factor. Structure your company culture around that concept. — Donna M. Gray, American Insurance Marketing & Sales Society

96. Solve a Problem.

Differentiate yourself by listening to customers, identifying needs, and providing solutions. Many products and services are similar so you need to show your cusINSURANCEJOURNAL.COM

tomers how you can solve their business problems. — Mary Ann Cook, The Institutes

97. Foster a Passion for Lifelong Learning. Bring in

industry experts to speak during lunch, inspire employees to research an emerging industry topic, encourage them to share what they learned, and honor employees who earn industry designations or certifications. — Ann Myhr, The Institutes

98. Focus on Loss Avoidance.

Buyers are far more likely to change to avoid losses or adverse events than they are when offered enhanced features and benefits. — Frank Pennachio, Oceanus Partners, a ReSource Pro Company 99. Rankings. Be familiar with how your business ranks with Google SERPs. — Jason Marlowe, InsuranceHub

100. Decide on Excellence.

To be excellent, you must first decide to be. Then you must work yourself through the small things over and over until they are habit, or hard-wired. — Randy Schwantz, The Wedge Group

101. Motivate the Sellers.

Encourage, always invest in and help motivate producers and sales support staff to reach new levels of success.

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Closer Look: Near Nationals Near National P/C Carriers Identified for 2019 category in the Demotech Company Classification System. Therefore, a company not designated as a Near National is assigned another classification, perhaps National, Super Regional, or State Specialist. To determine the companies for the 2019 Near National list, specific, objective qualifying criteria, evaluated as of Dec. 31, 2018, were used:

By Barry J. Koestler II

his year marks the 13th year of the Demotech Company Classification System, which was established in the Feb. 12, 2007, issue of Insurance Journal. The system categorizes insurers into one of 11 categories based on an analysis of data reported by the companies to the National Association of Insurance Commissioners. The 11 categories that comprise the classification system are Nationals, Near Nationals, Super Regionals, Regionals, State Specialists, Coverage Specialists, Strategic Subsidiaries, Risk Retention Groups, Surplus Lines Carriers, Reinsurers and companies with less than $1 million in direct premium written. A company can be assigned to only one

To develop the list of Near Nationals, Demotech reviewed 2,569 property/casualty insurance companies and assigned them to a category in the Demotech Company Classification System. Only 66 insurers met the criteria for a Near National for 2019. When analyzing the companies classified as Near Nationals, several interesting items were observed. Of the 66 • More than $1 million of direct individual carriers classified as Near Nationals for 2019, 43 premium written in each of were also identified as Near at least 35 states Nationals for 2018 and 2017. • Policyholders’ surplus of at Twelve of the companies least $100 million • $100 million or more of direct have been Near Nationals since the introduction of the premium classification system in 2007. • $50 million or more of net The majority, 56 of the 66 com premium panies, are stock companies. All • No line of business greater but four of the Near Nationals or equal to 90% of direct are members of a property/ premium volume casualty insurance group, with • No state greater or equal six each from Travelers Group to 90% of direct premium and Berkshire Hathaway, four volume • No surplus lines carriers, risk from Hartford Fire & Casualty, and three each from AXA retention groups, or and Horace Mann. No other reinsurers • Does not qualify as a National group had more than two Near Nationals for 2019. (more than $1 million of By count, the 66 Near direct premium written in Nationals comprised 2.6 each of at least 45 states, percent of the 2,569 carriers $250 million or more of that were reviewed; however, surplus, net premium they wrote approximately 8.5% written, and direct premium of the 2018 direct premium written).

34 | INSURANCE JOURNAL | AUGUST 19, 2019

reported by the P/C insurance industry. The Near Nationals also represented approximately 18.8% of the P/C industry’s reported policyholders’ surplus at year-end 2018. This level of financial presence demonstrates the importance of the Near Nationals. They are critical to the smooth functioning of the P/C insurance market. Near Nationals facilitate commerce and trade, and are important to the total P/C industry. In reviewing the 2018 direct premium written by the Near Nationals, there were only four states in which all 66 Near Nationals wrote at least $1 million: Arizona, Colorado, Georgia, and Pennsylvania. The 2018 direct premium written was distributed relatively evenly between auto, commercial multi-peril/other liability, homeowners/property, and all other lines, including workers’ compensation. (See the corresponding chart for line of business distribution detail.) Near Nationals represent a small number of carriers; however, the 66 carriers in 2019 are substantial insurers, critically important to the P/C insurance industry, as demonstrated by their significant market share and impressive balance sheets. The coverages that they write permit consumers and businesses to transfer risk and thereby facilitate the placement of insurance products necessary to support the economy. This stable group of carriers remains capable of honoring meritorious claims and providing active markets for agents. It is important to reiterate that the Demotech Company Classification System is an objective stratification of the INSURANCEJOURNAL.COM

companies that comprise the industry based on their business models. It is not

equivalent to or suggestive of ratings of the individual insurers. Inclusion on the list of

Near Nationals does not imply that a company is superior to companies that were not

included in that classification. Koestler II is chief ratings officer of Demotech Inc. Website: demotech.com.

2019 Near National P/C Insurer Company Name

2019 Demotech Company Classification

2018 Demotech Company Classification

2017 Demotech Company Classification

2016 Demotech Company Classification

2015 Demotech Company Classification

Allied World Specialty Insurance Co.

Near National

Super Regional

Near National

American Home Assurance Co.

Near National

Strategic Subsidiary

American National Property and Casualty Co.

Near National

American Road Insurance Co.

Near National

Super Regional

American Security Insurance Co.

Near National

Super Regional

Near National

American Strategic Insurance Corp.

Near National

Super Regional

AmGUARD Insurance Co.

Near National

Super Regional

BCS Insurance Co.

Near National

Beazley Insurance Co. Inc.

Near National

Coverage Specialist

Near National

Regional

Berkshire Hathaway Homestate Insurance Co.

Near National

Berkshire Hathaway Specialty Insurance Co.

Near National

Super Regional

Strategic Subsidiary

Brotherhood Mutual Insurance Co.

Near National

Charter Oak Fire Insurance Co.

Near National

National

EMCASCO Insurance Co.

Near National

Super Regional

Employers Mutual Casualty Co.

Near National

Endurance American Insurance Co.

Near National

Super Regional

Farmers Insurance Exchange

Near National

Super Regional

Federated Rural Electric Insurance Exchange

Near National

Super Regional

Federated Service Insurance Co.

Near National

Super Regional

General Casualty Co. of Wisconsin

Near National

Super Regional

Great West Casualty Co.

Near National

Greenwich Insurance Co.

Near National

GuideOne Mutual Insurance Co.

Near National

Harco National Insurance Co.

Near National

Super Regional

Hartford Insurance Co. of the Midwest

Near National

HDI Global Insurance Co.

Near National

Strategic Subsidiary

Hiscox Insurance Co. Inc.

Near National

Regional

Horace Mann Insurance Co. Horace Mann Property & Casualty Insurance Co.

Near National Near National

Near National Super Regional

Hudson Insurance Co.

Near National

IDS Property Casualty Insurance Co.

Near National

Integon National Insurance Co.

Near National

Super Regional

Jewelers Mutual Insurance Co.

Near National

Super Regional

Lancer Insurance Co.

Near National

Coverage Specialist

Markel American Insurance Co.

Near National

Mid-Century Insurance Co.

Near National

Super Regional

National Indemnity Co.

Near National

National Liability & Fire Insurance Co.

Near National

New York Marine and General Insurance Co.

Near National

Northland Insurance Co.

Near National

Pacific Indemnity Co.

Near National

Pennsylvania Lumbermens Mutual Insurance Co.

Near National

Super Regional

Near National

Super Regional

Pennsylvania Manufacturers' Association Insurance Co.

Near National

Pharmacists Mutual Insurance Co.

Near National

Super Regional

Regional

Praetorian Insurance Co.

Near National

Privilege Underwriters Reciprocal Exchange

Near National

Regional

Property and Casualty Insurance Co. of Hartford

Near National

Protective Insurance Co.

Near National

Safeco Insurance Co. of America

Near National

National

Securian Casualty Co.

Near National

Super Regional

Sentry Insurance a Mutual Co.

Near National

Sentry Select Insurance Co.

Near National

Sompo America Insurance Co.

Near National

StarStone National Insurance Co.

Near National

Regional

State National Insurance Co., Inc.

Near National

Strategic Subsidiary

Near National

Teachers Insurance Co.

Near National

Tokio Marine America Insurance Co.

Near National

Travelers Casualty and Surety Co.

Near National

Travelers Home and Marine Insurance Co.

Near National

Travelers Indemnity Co. of America

Near National

Travelers Property Casualty Co. of America

Near National

Trumbull Insurance Co.

Near National

Strategic Subsidiary

Twin City Fire Insurance Co.

Near National

United States Liability Insurance Co.

Near National

XL Insurance America, Inc.

Near National

XL Specialty Insurance Co.

Near National

Data Source:The National Association of Insurance Commissioners, Kansas City, Mo., by permission. Information derived from an SNL product. The NAIC and SNL do not endorse any analysis or conclusion based upon the use of its data.

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AUGUST 19, 2019 INSURANCE JOURNAL | 35

Closer Look: Intellectual Property How

Intellectual Property Compares with Cyber I

ntellectual property (IP) is an area of risk that is underinsured and one that presents interesting opportunities for agents and brokers, according to Erik Alsegard, Intellectual Property practice leader for CFC Underwriting. IP risk is growing and so too will the insurance market, Alsegard says. He sees the growth rate mirroring that of the cyber insurance market as IP continues to rise in significance. “The opportunity is ripe for the picking,” he says. Just as brokers who got in early on the cyber craze are seeing momentum today, so will those who get in early on IP insurance, Alsegard predicts. “Like any other emerging class of insurance, the product and pricing may evolve some over time as we adjust to client needs and demands, but the standalone cover that is available today is robust,” he says. IP is a broad term used to

describe the legal rights arising out of intangible creations and assets, like a product or process, a piece of software, a brand or even a customer database. In this interview with Insurance Journal’s Andrea Wells, Alsegard discusses his views on the evolving IP insurance market and how it compares to that of the cyber market.

tor-agnostic. Most businesses, of most sizes, in most industries, will have an intellectual property risk whether they realize this or not. The same, of course, is true for cyber. Finally, as with cyber risk, SMEs [Small to Medium

tropes heard in the cyber insurance world.

Is IP insurance the new cyber?

First, and perhaps obviously, both cyber and intellectual property insurance are concerned with intangible assets. As we all know, intangible assets like IP have become an increasingly important factor on a company’s balance sheet with regard to its overall value. As a market, cyber insurance is around 20 years old. IP insurance has also been around that long, if not a bit longer. It makes sense that these two lines would emerge together as we see businesses move online, adopt technology, and thrive on ideas and data as much or more than they have on tangible assets like machinery or buildings. Another similarity between cyber insurance and IP insurance is that they’re both emerging risks that are sec-

Erik Alsegard, Intellectual Property Practice Leader, CFC Underwriting.

Enterprise] are also disproportionately impacted by intellectual property risk. SMEs are easier targets for patent trolls or large competitors looking to stifle competition. They likely don’t have the in-house resources, legal or financial, to combat these threats, or easily recover from them, and they probably don’t believe that intellectual property is a real exposure for them because the stories they hear in the news — if they hear any at all, most get settled out of court — involve big companies that don’t look like them. These are all similar

Is IP insurance difficult to sell to commercial insureds or prospects? IP insurance doesn’t have to be complicated to sell. An easy way to start the conversation with clients is to ask about their contractual obligations, or simply if the company holds any IP. Brokers

should start with their clients in sectors like manufacturing, technology, energy, consumer or automotive goods. Sometimes just bringing up the topic of IP can set a broker apart.

What are some of the challenges to growing the market?

There’s a lot of education to do. There is a certain lack of knowledge and awareness about IP. First of all, there needs to be an understanding of what intellectual property is and then of course to understand the risk; then they can get into insurance. There’s this need in some sectors to develop all of that. … Insurance

brokers sometimes need education at that level, as well. If you look at cyber, for example as a comparison, cyber is in the news quite a lot. There’s been a focus on cyber and perhaps there needs to be a focus on intellectual property at the same time. Because the two products are obviously both part of the intangible economy of the modern economy that we’re living in right now. There are some companies that don’t think they have the risks, just like some companies won’t believe there’s a risk of

a cyber event. For example, we may sometimes hear that a company doesn’t think that they could be infringing on someone else’s IP because they have a patent themselves. That’s not at all necessarily how it works in the real world.

A company could still be infringing if they have a patent for the IP?

Yes. Here are two examples. One would be where they have a patent, let’s say on the core technology of a company, they have a patent for that, but they

might add components to the product before it’s actually ready to sell. They may forget that someone else may have a patent on those components. Let’s simply say you add a lid to something. Probably there’s someone who has a patent for the lid or the packaging. You may also have a situation where two companies actually have overlapping patents and then you get a claim for infringement.

What types of coverage are available in the market for intellectual property risks?

There are different types of coverage in the market. There might be some coverage for, let’s say, the value in an organization’s IP. We offer, for example, a component of enforcement coverage for that. That’s what we tend to focus on and what most of the market tends to focus on — the IP infringement risk. …. For us, the infringement defense coverage is really the key but that is of course the great unknown. You never know when you will actually get a claim on the IP infringement defense side. For most sectors, patent risk is very much alive, and navigational infringement of patents can obviously be quite possibly and potentially disruptive to business. There are legal costs, settlements, damages covered by that. Another aspect where perhaps you might see a value to the business, but also risk, is called contracts with customers. For us, that’s very often the reason why people buy this insurance. They have contractual obligations to indemnify customers for infringement claims. …

The main driver for clients tends to be the patent infringement risk, which is why we host most of our clients on the standalone IP [policy]. … There’s certainly a risk in copyrights, trademarks and other intellectual property as well.

Businesses may think they have coverage elsewhere. Is there some IP related coverage outside of stand-alone policies?

Oh yes, sure. There is definitely some intellectual property coverage available in other policies in the market. From CFC and other markets, media policies, etc. So what’s really important is that brokers and clients alike understand the risks first and then look at the coverage to make sure they have what they need. …. Standalone IP insurance would obviously cover what may often be excluded in other policies. So, it’s important to really take the time to understand what they believe the risk is.

Are there particular industries worth targeting for IP insurance growth?

I think small and medium sized companies have a lot of exposure. People will assume that, for example, software and technology have a high risk. And that’s certainly not wrong, but we also see new business coming in a lot from just general manufacturing of consumer goods. …. And the energy sector is another where we see a fair amount. Then there will be “pockets” in other sectors where there’s a lot of innovation coming out … a lot of competition and where people have to innovate to survive.

Idea Exchange: The Wedge

5 a.m. Wakeup Call:

66 Days to Create a Habit

s I laid down in bed, I called out to a recent Christmas gift that’s on the nightstand next to my bed: “Alexa, set a By Randy Schwantz 5 a.m. wakeup call.” “Your alarm is set for 5 a.m. tomorrow,” Alexa responded. My head hit the pillow and within a few minutes I was out cold, sleeping like a baby. About 2 a.m. I woke up and made the trek to the bathroom, like most guys over 50. Back to bed, my head hit the pillow once again; out immediately. At 5 a.m. the next morning, honk, honk, honk … Alexa is doing her duty, sounding the wakeup call. I ask myself, “get up or go back to sleep?” It was a split-second decision — get up, that’s what you promised you would do. I head toward the bathroom where I 38 | INSURANCE JOURNAL | AUGUST 19, 2019

brush my teeth, head off to the closet to put on shorts and a t-shirt, then downstairs where I make a cup of bullet-proof coffee, a tablespoon of ghee and 2 tablespoons of brain octane oil. Whip it up in the blender, pour it into my favorite Duke cup and off to the home office, where I open-up my composition notebook to review the 198 pages of handwritten notes I’d previously taken. Next to my composition notebook is my journal, a highlighter and mechanical pencil.

20/20/20

The 20/20/20 ritual is what Robin Sharma, author of the “5 a.m. Club,” calls it. Spend the first hour of everyday in solitude — 20 minutes of workout, 20 minutes of journaling and 20 minutes working on your craft. I forgo the workout and get right into journaling and reviewing my 198 pages of notes.

Every page is loaded with gold. It’s obviously not for everyone, and maybe not for you. But it hits me where it hurts, in the heart. Here was my problem: I felt burned out. I was going through the motions. I’d been traveling hard for 27 years. I have a successful business, but I wasn’t feeling the joy. In chapter three was this quote: “Do not live life as if you have 10,000 years left. Your fate hangs over you. While you are still living, while you still exist on this Earth, strive to become a great person.” While you are still living, strive to become a great person. That was a wakeup call way beyond what Alexa, my new bedside companion, is capable of. You see, I was raised in a family with two brothers. My mom and dad stayed together until they both died. But, they did both die. Not only that, my brother Ken had a major heart attack at age 62. He was INSURANCEJOURNAL.COM

dead before they got him to the emergency room. The message resonated with me, “Do not live as if you have 10,000 years.” On page 24 of the “5 a.m. Club,” Robin wrote: “Wage war against weakness and launch a campaign against fearfulness. You can truly get up early.” So, when the alarm goes off, I get up. I’ve been doing it since Jan. 16, 2019. It’s nothing to brag about, so I hope you don’t take it that way. It’s just something that I committed to do, and I am doing it. And, it’s turned out to be the best part of my day.

90/90/1

Sharma laid out another simple, but fascinating, concept in the book that he calls the 90/90/1 ritual. Like most salespeople, I almost boast about having ADD (Attention Deficit Disorder). It’s difficult for me to concentrate for very long. As a result, it’s difficult for me to get big projects complete; they just linger, as other creative ideas get stacked on top of them. The 90/90/1 gave me a source of freedom. I now have the time and ability to focus on one project, for 90 minutes a day, for 90 days in a row. Since January, I have been able to knock out two gargantuan projects that have been weighing me down for years. I never could find the time or the focus to get them done. When Robin suggested I focus on my top five goals for the year, I had to admit, I’d never written them down. For the most part, I didn’t want to. I was too tired, too distracted to attack them and didn’t want the guilt, shame and second-guessing that comes with not doing what you said you would. But I took the time to write them on 3x5 cards and put them in a treasured place on my wall. I also took pictures of page 110 and sent to my kids when I first read it. Here is what it says: “Dedication and discipline beats brilliance and giftedness every day of the week. And, A-players don’t get lucky, they make lucky. Every instant you do that which you know to be right over that which you know to be easy, you facilitate your entry into the Hall of INSURANCEJOURNAL.COM

Fame of Epic Achievers.” And then, this paragraph … It’s a killer: “A lot of the latest research emerging on successful people is confirming that our private story about our potential is the key performance indicator on whether we actually exploit that potential. You’ll never rise higher than your personal story.” Put it all together and here’s what you get: 5 a.m. is my time to get up and work on the most important indicator of my success: Me. Secondly, as I change the way I look at me, I change the work I do. Now I have a method to focus; it’s called 90/90/1. One project, 90 days, 90 minutes a day and make it masterful. Frankly, this feels much more like writing a personal letter to my best friend than it does an article for the Insurance Journal, but I share it because I want to encourage you to choose your heroes wisely. Robin Sharma is now one of mine, and I can thank Bob Phelan and his generosity for sending Robin’s book to me. Secondly, I want to encourage you to consider your personal story about who you are and how successful you can be. Most of us don’t even know that our pre-programmed, subconscious mind is controlling us; we think we are. As you become more aware of your pre-programmed patterns, you can make better decisions. And with that, you’ll get better results.

If you get Robin’s book, I hope you’ll write me and tell me your experience. I’ve got more to share, just limited space. By the way, it takes 66 days to make a new habit, according to a study from the College of London. Getting up a 5 a.m. is now a habit for me. I hope you’ll try it. I, too, have been considering how I

‘Dedication and discipline beats brilliance and giftedness every day of the week.’ want my personal story to develop. I really want to help you, if you are a producer that knows deep down in your heart that you want to be a million-dollar producer, but not sure exactly how to get there. I want to help you retire from this business as a multi-millionaire, with the freedom to choose how you spend your time after retirement, not constrained by financial choices. It’s not for everyone to have that kind of ambition, but if that’s you, and you want to consider my help, you’ll find a way to get in touch. Schwantz is founder of The Wedge Group, the author of five books including, Agency Growth Machine: Transform Producer Potential into Agency Growth & Profit Email: randy@thewedge.net. Phone: 214-4463209. Website: thewedge.net

AUGUST 19, 2019 INSURANCE JOURNAL | 39

AGENCY

Spotlight

Miller Insurance Principal Agent Says Insurance is a Fulfilling Career

Christopher Miller, Miller Insurance

By Elizabeth Blosfield

iller Insurance Principal Agent Christopher Miller says he has found a lot of fulfillment working in the insurance industry and now aims to pass that sense of fulfillment along to others through his work. “Life without purpose isn’t worth much,” he said. “Everyday, we’re charged with taking someone’s negative and turning it into a positive.” Miller Insurance is a fourth-generation, family agency based in Jonestown, Pa., that provides business, personal and life insurance to clients throughout Central Pennsylvania. Miller said that growing up in the insurance business taught him the importance of finding purpose and giving back. “Not many kids grow up wanting to be an insurance agent, but when you’re looking at your own future, wanting to achieve something and make the world a better place, insurance is a surprisingly good fit,” he said. In fact, making the world a better place is just what he aims to do through his work at the agency, explaining that he probably 40 | INSURANCE JOURNAL | AUGUST 19, 2019

uses his favorite catch phrase, “Under promise, over deliver,” about once a day. Although Miller grew up in his family’s insurance business, he also spent time outside the agency as a programmer and in market insights and analytics, which he says gave him more insight into how to do his best work at Miller Insurance. “What I learned in those two fields has allowed me to look at things differently and leverage certain technologies to make our operation more efficient,” he said. Recently, Miller said the agency has developed a niche for common carrier contractors. “Until a few years ago, I never knew that most FedEx and Amazon delivery trucks were independent contractors who own those routes,” he said. “I’ve had a lot of fun learning their business and the unique aspects of it.” When asked about any E&O challenges, Miller said he feels grateful it’s a difficult question to answer, as the company seeks to remain diligent regarding sign-down forms, policy reviews and documentation. “Ultimately, errors are made, and you just have to own it,” he said. “I believe the cover-up that some agencies try to do can make matters worse.” He pointed to one recent example in which a personal lines client was involved in a not-at-fault accident. “Our policy notes indicated when the insured had added the unit involved in the policy, they requested collision coverage, which was endorsed,” he said. “The

continued on page 49

We Want You!

We’d love to hear from your agency! To be considered for this Agency Profile series, send your agency’s story to awells@insurancejournal.com.

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Idea Exchange: Ask the Insurance Recruiter Money Talks in Every Aspect of Recruiting Include Salary Information in Postings

Q&A By Mary Newgard

Q:I have a very good, seasoned VP

in claims who manages our largest claims, advocates for clients and impacts the agency’s brand by managing vendor and carrier relationships. I would not want to lose this employee. I’m concerned based on internal discussions that our agency may not be “at market” from a compensation standpoint. Can you provide guidance on how this could affect retention or future recruiting?

The impact of compensation on recruiting has been an evolving discussion since my career began in 2006. When I entered the industry, compensation was never brought up during screening, the referral or interviews. Because it was hush hush, offers were entirely predicated on the question, “What do you currently make?” Today, compensation is visible on job postings, shared in referrals, talked about in every interview and is phrased, “What is your compensation expectation?” You’re falling behind the times if you do not embrace and encourage compensation discussions. It is your best weapon in the fight for talent. It fights pay inequality. It attracts a diverse workforce. It retains your most valuable employees. Compensation should be a part of every aspect of your recruiting process.

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Influencing candidates to apply for your job starts with addressing their biggest question mark. 98% of job seekers and employees say it is helpful to see salary ranges in job listings. Candidates experience a more positive search, and employers see a direct correlation with successful recruiting. According to Glassdoor: • “Providing pay information at the beginning of the recruiting and inter view process helps candidates self-select out, reducing the number of resumes needed to get to hire in half.” (What Are Salary Estimates in Job Listings? April 2019) • “Hiring decision-makers report when they hire informed candidates (about salary realities) they see better retention rates and more productive and more engaged employees.” (Glassdoor Survey, August 2017)

Repeated Topic of Interview Conversation

Time kills all deals, but as we venture deeper into low unemployment waters, I believe our shtick should change. Money kills all deals. I can’t tell you how disruptive compensation is to the offer process. There’s tremendous value in discussing compensation with a candidate during every interview. If you approach the topic strategically, it will not be overkill. Here are reasons you should never miss an opportunity to talk about compensation: 1) Achieve 100% perfection with your offer. 2) Candidates don’t know when and how to bring it up. Take the lead. Open the door for them. 3) Discover in real-time changes to compensation expectations. 4) Find where priorities lie between salary, bonus, commissions, benefits, expenses, etc. 5) Being proactive means you have authority to be reactive when the counteroffer hits.

Acknowledge and Retain Key Employees

Staffing forces us to focus on new things, but what’s the point of taking dirt from one hole just to fill another? Recruiting is an ongoing issue. You constantly have to re-recruit your own employees. Mercer’s 2018/2019 U.S. Compensation Planning Survey said, “Companies risk losing employees to competitors that may offer better salaries and the opportunity for more career growth.” The survey found 78% of employees list Retention Concerns as their top factor that influences compensation decisions. This is higher than other categories like sourcing new talent and adding bench strength. To prevent employees from becoming job seekers due to frustration with compensation, here are some tips to leverage compensation and increase retention. • With Account Managers, focus on pay equity. While merit percentages are on the rise (3%+ according to SHRM 2019) people can get more in the open market. Organize, prioritize and incentivize client service managers based on book size, vertical/ niche portfolio and segmentation of roles (marketing, client-facing responsibilities, etc.) • Producers will gladly discuss new and renewal splits. In fact, they do in peer groups, so you want them talking with you. Invite salespeople into learning about ROI and expense management. Even newbies on a validation schedule should learn how formulas work. If not a yearly discussion, let life stages be the kick for you to discuss comp with your sales team. Producers change employers for better comp plans when they marry, have children, buy a house, pay for college and are within 15 years of retirement.

Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. For questions and comments, email: asktherecruiter@ csgrecruiting.com.

AUGUST 19, 2019 INSURANCE JOURNAL | 41

Idea Exchange: Minding Your Business Agency Management 101

Bt Catherine Oak and

Bill Schoeffler

hen it comes to business management, there are “best practices, “bad practices” and then there is “what works for the business at the time.” Every business has its unique characteristics due to size, location, products and services, clients, and especially the people involved. So, what is considered “best practices” might not apply to a specific firm. Owners should be aware of all the management options, techniques and approaches, and then strive to develop a management approach that fits best for their business.

For independent insurance agencies, the primary management areas include: a) sales; b) service; c) administration and HR; d) financial; e) market and carrier relations; f) automation; and g) brand management. For small agencies with one owner, the focus tends to be on sales and service with the other aspects being handled on an as-needed basis. Larger firms tend to have middle management to assist the owners with both the strategic and day-to-day management of the firm, so there is usually regular coverage of all aspects of management.

Management Systems

Regardless of who handles the management, there needs to be a system in place to ensure that everything gets handled on a regular basis. Letting problems fester until there is a crisis will result in spending more time, money and stress than if the problem was handled properly in the beginning. Management is both an art and a science. Most agency owners forget about the science part, which is to develop and implement good systems and procedures. A good system would include a checklist or schedule to know when to look at things and key performance indicators (KPIs) to know when there are problems. Management can then take steps to correct things when off-target. See our “Minding Your Business” article on Creating Key Performance Indicators for further details.

Management Triage

A skill that needs to be developed is how to prioritize management issues. The first step is to use the “Urgent-Important” matrix made popular by President Dwight D. Eisenhower, who in a 1954 speech was quoting Dr. J. Roscoe Miller, president of Northwestern University, when he said: “I have two kinds of problems: the urgent and the important. The urgent are not important, and the important are never urgent. This “Eisenhower Principle” is said 42 | INSURANCE JOURNAL | AUGUST 19, 2019

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to be how he organized his workload and priorities, which allowed him to be both effective and efficient. Important activities have outcomes that lead to one’s achieving goals. Urgent activities demand immediate attention because the consequences of not dealing with them are immediate, but they are often associated with achieving someone else’s goals. Understanding this concept is important. There are many resources available that provide further insight into this concept, so it is left up to the reader to explore this further as needed. A second skill for Management Triage is the delegation of tasks. Owners and managers should only handle the tasks that they are uniquely qualified to handle. Often, simple problems are not addressed because the owner or manager holds on to them until they have the time to get it done instead of letting someone else resolve the problem. See our “Minding Your Business” article on The Power of 98/2 Delegation for an in-depth analysis on this topic.

compensation plan for the owners, which includes a fee for management. The agency should set aside a strategic management fee, for example, 3% to 7% of total revenues. To determine the correct percentage, think about what it would cost to hire an agency manager who would perform all the management duties that the owners currently perform. Typically, the larger the firm, the smaller the percentage of revenue for the fee. Larger firms also tend to have a middle management layer, that assists the owners in the handling of those management duties. The allocation of the management fee should be based on the percentage of the overall management time required for each task.

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Model Success

If the business is not going in the right direction or the same issues keep popping up, it is time to do something different. Long-term success is only achieved by knowing what works and what does not work. That is why “best practices” should be considered, although “what works for the business at the time” has been the management technique. Motivational speaker Anthony Robbins once said: “If you want to be successful, find someone who achieved the results you want and copy what they do, and you’ll achieve the same results.”

Summary

Time and Money

The proper management of an agency will require time. Too often, owners will want to spend that time on something else such as sales because they don’t enjoy management or feel inadequate handling management tasks. In firms with more than one owner, the distribution of management tasks can be uneven. This can all lead to poor or improper management of the agency due to neglect, frustration or resentment. One way to address this potential problem is to allocate compensation to the person handling the various management roles, which are the A through G functions mentioned at the beginning of this article. Rotating these functions among the owners can also be effective, as long as the owners are capable of managing those functions. Oak & Associates recommends that agencies create a performance-based

leadership will look different based on the personalities involved, but it should include creating, communicating and maintaining a vision or strategic direction for the business, encouraging and supporting employees, and resolving conflict or problems promptly.

This approach will also work for firms with one owner. Too often, these solo owners see management as a distraction from making money through sales and service. By having a management fee, the owner can see a correlation between the time spent on management and compensation. Some owners hire an agency manager instead of trying to perform these duties themselves, especially when they are the best sales person in the office.

Leadership

It is important to include in the discussion of agency management, the responsibility of owners and managers to provide leadership for the firm. Effective

Great firms with superior agency management don’t just happen. They are the result of management putting together and maintaining the right people, products and services, and an overall good organization. That is why agency owners need to develop the best management system for their business. We will follow up this article with a series that will explore the details of different management functions, starting with financial management. Oak is the founder of the consulting firm, Oak & Associates, based in Northern California and Central Oregon. Schoeffler is an associate of the firm. Oak & Associates specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, sales and marketing planning as well as perpetuation planning. Phone: 707-935-6565. Email: catoak@gmail.com. AUGUST 19, 2019 INSURANCE JOURNAL | 43

Idea Exchange: Human Resources Prioritizing Diversity and Inclusion in the Workplace

or the past several years, diversity and inclusion (D&I) has been a prominent topic of discussion within the insurance By JoJo Harris industry. However, while most companies understand that diversity is good for business, many have not made D&I initiatives a priority until more recently. To achieve a lasting culture shift, insurance organizations must proactively and strategically incorporate D&I efforts into the workplace. As the future of work brings innovation and customer experience to the forefront, embracing diversity of thought and leveraging its benefits can truly differentiate organizations. What is the impact of D&I? A greater sense of inclusion leads to an increase in collaboration, quality of decision-making and team performance, according to Deloitte. McKinsey shared that companies in the top quartile for racial and ethnic diversity at the leadership level are 32% more likely to outperform their peers on profitability. Additionally, Boston Consulting Group found that innovation revenue (which they define as revenue from new products or services) was 19% higher in companies with above-average diversity on their leadership teams, compared to those with below-average diversity at the leadership level. Diversity has many benefits, yet there is still a disconnect in the workplace, especially within senior level positions. For instance, while women make up 60% of the insurance workforce, they hold a disproportionate 11% of named executive officer positions and 19% of board of director seats. While true diversity extends past gender to encompass experience level, age, race, sexual orientation, background, ethnicity, skills and more, this underrepresentation is the case for most minority groups, especially those that are intersectional. The goal is to achieve a variety of thoughts, opinions and viewpoints in order to truly innovate 44 | INSURANCE JOURNAL | AUGUST 19, 2019

and make decisions that are well-thoughtout, forward-thinking, and reflective of the needs of customers and other stakeholders. Now is the time to take action and ensure organizations are not just talking about D&I but moving these initiatives forward.

Culture Shifts Take Time

First, it’s important to recognize that D&I is a process. True culture change is less likely to happen overnight and more likely to occur through small changes. Make sure to identify and celebrate these accomplishments, knowing minor wins will add up to larger gains. If certain initiatives do not have desired results, keep trying and consider what adjustments should be made in order to have greater organizational adoption and impact.

their requests. This may mean facilitating conversations around different points of view, bringing individuals together to resolve a conflict, or accommodating different workplace needs. Before discounting someone’s input, think it through with an open mind. If you hit a dead-end, ask a colleague or trusted advisor for their take. Someone else may have a fresh perspective that can help bring ideas to life.

Now is the time to take action and ensure organizations are not just talking about diversity and inclusion but moving these initiatives forward.

Encourage All Contributions

All employees should feel confident their contributions and opinions are welcome. As often as possible, let team members have a vote or say in plans and decisions, ensuring input is given and received with mutual respect and validation. Today’s work environment is much more collaborative than it was even a few years ago. There are benefits to hearing from a number of voices, regardless of level or company status. By seeking out various viewpoints and providing equal opportunities to contribute, teams benefit from healthy discourse and multiple perspectives. Encourage individuals to be open, candid and honest, and demonstrate that conflicting viewpoints should be embraced, not avoided.

Listen, Then Act

It’s important to encourage individuals to think differently and share their opinions, yet soliciting ideas and feedback does not mean much unless it’s followed by action. Actively listen to colleagues and consider how you can “say yes” to

Bring Diverse Groups Together

When possible, seek a variety of perspectives when creating project teams or task forces for special initiatives. The more diverse the team members, the more likely they will reach innovative and thorough solutions. To truly level the playing field, consider switching up traditional roles and asking a less experienced professional to serve in a leadership capacity for the project while enlisting more senior-level employees as individual contributors.

Look to Younger Generations for Guidance Millennials and Generation Z are great advocates for diversity and tend to seek out unique viewpoints and opportunities for collaboration. In fact, Deloitte’s 2018 Millennial Survey found 69% of millennials in diverse organizations say they will stay longer than five years, versus 27% of millennials in organizations that are not considered diverse. Additionally, nearly half of millennials say a diverse and inclusive workplace is important when they are searching for jobs, compared to 33% of GenXers and 37% of baby boomers.

Grow Diversity at the Top

In many cases, there’s a diverse group of professionals in entry-level positions and the workforce begins to homogenize INSURANCEJOURNAL.COM

as individuals advance into manager and director-level roles. Examine when this shift takes place within your own organization and proactively create development programs tailored to all talented individuals. A great way to achieve this is through mentorship and sponsorship opportunities, which can create connections between members of underrepresented groups and senior leaders that may not have otherwise been possible.

Be Self-Aware

Understand that unconscious bias exists and work to recognize when it might be coming into play and affecting decisions and attitudes. Bias is difficult to eliminate INSURANCEJOURNAL.COM

but by being self-aware, individuals can identify when itâ&#x20AC;&#x2122;s time to take a step back and be more mindful of their choices. Unconscious bias may also be mitigated by seeking out opinions from individuals of various backgrounds and considering these viewpoints when coming to your own conclusions. Implementing D&I best practices within existing teams and roles is important in achieving long-term culture change. Take this a step further by championing inclusive hiring practices. Expose under-represented groups to the industry by partnering with colleges or participating in programs such as the Insurance Careers Movement. Encourage hiring managers and recruiting teams to use gender-neutral

job descriptions, consider blind resume screening, and ensure diverse interviewers. Small and mindful changes can add up to a substantial contribution toward company-wide inclusivity. The insurance industry is making strides in its diversity and inclusion efforts. By being aware of common hurdles and biases, while counteracting challenges through best practices, organizations will be capable of building innovative teams that will be successful now and in the future of work. JoJo Harris is senior vice president of Human Resources at The Jacobson Group, a global provider of talent to the insurance industry. Email: jharris@ jacobsononline.com. Phone: 312-884-0438. AUGUST 19, 2019 INSURANCE JOURNAL | 45

My New Markets Workers' Compensation

Cyber Liability

(peoemperor.net) offers workers' compensation insurance for all industries. Specializes in experienced classes that are declined due to high mods, bad claims, new business startups and hazardous risks. Available limits: As needed Carrier: Unable to disclose States: All states Contact: Nicholas Minetos at 505-6106885 or email: nick@peoemperor.net

(cresinsurance.com) is a one-stop insurance resource for real estate offices. CRES can find markets for errors and omissions, business owners or general liability and property, cyber liability, workers compensation, and more. All E&O policies come with legal advisory services. Available limits: As needed Carrier: Unable to disclose States: All states Contact: Alita Hawksworth at 800-8802747 or email: alita@cresinsurance.com

Market Detail: PEO Emperor

Churches & Houses of Worship

Market Detail: Orchid Insurance (orchid

insurance.com) can protect churches and places of worship from the potential losses from fire, hail, wind storms and more. Orchid can cover the church building, contents, as well as loss of income. A sub-limit for stained glass is also available. Product highlights include: monoline property policy types available; up to $15 million per building, $15 million per location and $25 million per policy coverage; up to $1 million/ $2 million in general liability limits; includes the Orchid Premier Endorsement to enhance certain coverages such as outdoor property, employment dishonesty, water backup, outdoor aign, debris removal, etc.; 1950 and newer year built and 1900 in some areas on all construction types; proprietary programs can only be accessed through Orchid. Wind coverage can be included without any restriction on distance to coast. Online submission process available. Optional/additional coverages include: equipment breakdown; ordinance or law; outdoor property; water backup; spoilage; employee dishonesty; and wind driven rain. Commercial submission (ACORD’S, SOV’s, supplementals, loss runs, etc. ...) can be submitted to commercial submissions@orchidinsurance.com. Available limits: As needed Carrier: Various, admitted and nonadmitted available States: All states except Alaska, Ark., Iowa, Neb., N.D., and S.D. Contact: Forrest Nulton at 772-226-5546, ext. 239 or email: fnulton@ orchidinsurance.com

46 | INSURANCE JOURNAL | AUGUST 19, 2019

Market Detail: CRES Insurances Services

Fine and Casual Dining

Market Detail: Innovative Coverage Concepts (innocov.com) covers the special needs of fine dining establishments that don’t apply to the generic restaurant insurance packages. Often, a fine dining establishment’s food-to-alcohol ratio is outside of “big-box” insurance provider guidelines. Or, its inventory of delicate meats and seafood may cause premiums on spoilage coverage to soar. Innovative Coverage Concepts ensures essential coverages are written in the policy and that additional offerings are covered and protected under the insurance policy Available limits: As needed Carrier: Unable to disclose, admitted States: All states Contact: Robert Crowell at 855-380-9483 or email: robertc@innocov.com

Specialty Auto

Market Detail: Gray-Stone & Co. (graystone.com) offers coverage through an “A+” (Superior) A.M.

Best and “A” (Superior) Standard & Poor’s rated carrier. Target classes include: hospitals, ambulances, couriers, driving schools, public entities, hired/nonowned (standalone and bundled; Symbol 10. Eligible commercial auto classes include: healthcare — hospitals, ambulance, couriers, mental health facilities; construction; manufacturing; communications; wholesalers and distributors; retail trades; armored cars; financial institutions; real estate companies (i.e. REITS); miscellaneous services; public administration; overseas parents corp. with U.S.-based operations; security guard services. Available limits: As needed Carrier: Unable to disclose States: Ariz., Calif., Colo., Fla., Ga., Hawaii, Idaho, Ill., Iowa, Ky., Maine, Neb., Nev., N.J., N.M., N.C., N.D., Ore., Texas, Utah, Wash., W.Va., and Wis. Contact: Howard Stone at 805-494-4440 or email: info@gray-stone.com

Saddle Animal Liability

Market Detail: Wildlife Insurance Underwriters, LLC (insurewildlife.com) is a national firm specializing in the placement of animal mortality coverages, rod and hunt clubs, hunting leases, ranches and farms. Coverages vary between admitted and non-admitted. Available limits: As needed Carrier: Unable to disclose, admitted States: All states Contact: Tiffany Davis at 800-844-0536 or email: tmoulds@sportsfitness.com

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Idea Exchange: Cyber Legislation Highlights Why Cyber Market Should Keep Watch on Small Business Risk

he 2018 Verizon Data Breach Investigations Report cited that 58% of cyberattack victims were small businesses, and the 2019 Symantec Internet Threat Report™ stated that employees working at small businesses were “more likely” to By Josh Ladeau be targeted by email threats (e.g., malware, spam, phishing) than those employed at larger companies. Acknowledging this growing threat, the Small Business Development Center Cyber Training Act was recently passed by the U.S. House of Representatives. A companion bill is awaiting a vote in the Senate. The legislation would require counselors at small business development centers to be certified in cybersecurity to assist small businesses in preventing and responding to cyberattacks. It’s not a question of if, but when, a small business will be attacked, making this segment a bit of a paradox as it

now represents one of the largest growth areas in the cyber insurance industry. Why is that the case? Carriers, managing general agencies, and brokerage firms have flocked to small business not solely because of its substantial pool of currently uninsured risks, but because it is perceived as an area less exposed to aggregated, large loss. Bottom line, these organizations are viewed in the insurance world as safe.

Small Business Lacks Security, Preparedness

The insurance policies for the small business segment have very quickly become robust, offering many of the expanded coverage grants that large, sophisticated cyber insurance buyers have pushed the market to provide. In contrast to those larger entities, however, small businesses almost universally lack the security awareness and preparedness of their larger brethren. The Keeper Security/ Ponemon Institute SMB Report cites 54% of small-to-medium sized businesses believe their companies are “too

small” to be ransomware targets and Continuum’s 2019 Small Business Cyber Security Report stated that 62% of SMBs do not have the in-house skills to properly manage cybersecurity. These businesses rarely have dedicated security personnel, and their management is relatively less focused on cyber exposure. Nevertheless, they are benefitting from an insurance industry rabid for growth.

‘Bottom line, these organizations are viewed in the insurance world as safe.’ In addition to overzealous coverage expansion, policy limit grants are generous, premiums are artificially depressed, and carriers are driven to operate with minimal underwriting data if they want to gain market share in this segment. Admittedly, the inability to gather meaningful underwriting data wouldn’t improve substantially even if carriers were able to ask for more underwriting information, as small business owners typically don’t employ staff who can respond properly to probing questions regarding their company’s security posture. Most of these organizations are not familiar with how much data they have, or how it is stored (which makes it difficult to secure). They will frequently purchase the basics of a firewall and anti-virus, but my experience suggests that their security configurations aren’t necessarily optimized. Even if well-configured, those technologies are from a previous generation of security, when the focus was keeping bad actors out of your network (most security professionals acknowledge the battle for the perimeter is lost). Generally speaking, the majority of these businesses have almost no advanced detection or response capabilities, and they lack a team of security professionals monitoring their network activity. Simply put, most small businesses

continued on page 49

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Idea Exchange: Cyber

AGENCY

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aren’t adequately armed for today’s cyber battlefield. This view isn’t intended as an affront to small business. These organizations often survive in large part due to tireless effort on the part of their ownership and staff, consistent and dedicated control of their expenses, and entrepreneurial spirit; they care deeply. They just don’t have the bandwidth or the budget to make cybersecurity a primary consideration for their businesses. They lack the resources to compete for top talent in a highly competitive cybersecurity job market (and there is not enough of these professionals to go around). Few, if any, have the time to navigate through the ever-expanding landscape of security products, or the staff to optimize their implementation (an IT professional is not synonymous with an IT security professional). And, more often than not, these businesses have neither robust security training nor tracking programs in place. The result is that small businesses are extremely susceptible to ransomware and other social engineering-originated attacks. Moreover, they are disproportionately exposed to large-scale attacks such as WannaCry or NotPetya, the likes of which are only in their infancy. They will be least resilient, relative to their larger peers, in the event of an attack. INSURANCEJOURNAL.COM

Dire Need

InsuranceBee’s Cyber Survey reported that 83% of SMBs did not have the budget to recover from the after-effects of a cyberattack. On balance, small companies are more susceptible to losing income as they don’t have dedicated failover sites, or robust testing of Business Continuity or Disaster Recovery Plans (if they even have such plans). After an attack occurs, most of these organizations do not have pre-established security vendor contacts at their disposal who will swoop in post-incident to minimize the impact of a breach or attack. While the quantum of loss may be much lower for smaller entities, the potential for widespread impact and disparity between premium collected and capacity exposed is much greater. That the government is considering several bills aimed at improving small business cybersecurity, such as the Small Business Development Center Cyber Training Act, publicly acknowledges that these businesses represent a massive area of economic exposure and are in dire need of improvement. This isn’t, or shouldn’t be, news to the insurance industry. The white-hot market for this segment, however, suggests otherwise. Ladeau is the global head of cyber and tech errors and omissions at Aspen Insurance. Email: Josh. Ladeau@aspen-insurance.com.

Spotlight account manager actually neglected to add the coverage along with the vehicle.” The endorsement made it through the agency’s peer review endorsement submission check and post endorsement review undetected. “We explained to the client what had happened, and our team truly bent over backward for our insured, working with the claimant carrier to make sure it was resolved smoothly,” he said. “Thankfully, there was not a limits issue.” Bending over backward for clients is a goal Miller has for the agency as a whole, stating that he aims to “educate and empower everyone — clients and employees alike — to make the right decisions to protect what matters most.” He added that his ideal producer is someone who is well-disciplined and can hold themselves accountable. “It’s easy to shake hands, kiss babies and submit apps,” he said. “It’s hard to make sure that all the I’s are dotted and T’s are crossed to deliver an outstanding client experience ... “The relationship is everything.”

Advertisers Index Abram Interstate www.abraminterstate.com W6 Anderson & Murison www.andersonmurison.com 23 Applied Underwriters 2, 3, 52 www.auw.com Brighthouse Financial www.brighthousefinancialpro.com 7 California Earthquake Authority mvp.earthquakeauthority.com W1 Encova Insurance www.encova.com S1, M1 EZLynx 10, 11 www.ezlynx.com M.J. Hall & Company www.mjhallandcompany.com W8 Midlands Management Corporation www.midlandsmgmt.com SC4 Monarch E&S Insurance Services www.monarchexcess.com W3 Pacific Gateway Insurance Services www.pgiainsurance.com W4 PSIC - Pacific Specialty Insurance Co. www.pacificspecialty.com W7 Regions Bank www.regions.com 17 Smart Choice Agents Program www.smartchoiceagents.com 12, 13 Texas Mutual www.texasmutual.com SC3 The Hartford Insurance Group www.thehartford.com 5

AUGUST 19, 2019 INSURANCE JOURNAL | 49

Closing Quote Climate Affects Weather and Weather Affects Insurance — It’s That Simple

By Scott Carroll

he phrase “climate change” is not one a lot of people want to bring up at the dinner table at family reunions. It is fraught with often-divisive ideological connotations, yet it does reflect the fact that weather is undeniably changing in ways that are harder to parse than in the past. And in the wake of a string of weather-related disasters around large live events nearly a decade ago, weather

and event production are increasingly and inextricably connected. But if weather is changing, so is the liability insurance environment around it: contingencies concerning weather are now able to be far more granular than before. For instance, policies can be written that specify amounts of rain that can trigger a claim at an outdoor event such as a concert. Those specifications can take the form of an overall rainfall amount over a predetermined number of days or hours, or the number of dry hours — i.e., hours free of precipitation — in a day or a weekend. This kind of exactitude increases predictability for the insurer, who will now know

exactly the conditions that can trigger a valid loss claim, and for the insured, who can adjust the amounts of adverse precipitation in such a way as to optimize premium costs. As with any metric, who and what is doing the measuring is critical. In the case of weather in general and precipitation specifically, insured and insurer must first decide on a mutually agreeable arbiter, in these cases usually the closest government-operated meteorological facility where rain and other weather data can be measured and retrieved (think weather monitoring station in and around an airport). Those same facilities can also offer both the insured and insurer necessary information on which to base the extent of

coverage, with data on weather history at the site of the event over the course of previous years, as well as the cost of coverage. All of that information can go into creating comprehensive insurance policies that cover a range of relevant negative potentialities around live event production, from event delays and partial or complete event cancellations to non-appearance problems related to individual performers or presenters due to weather, or a myriad of other causes. More events are now being done outdoors, from concerts to crafts festivals to special events like the NFL Draft, which in April attracted an estimated 600,000 people to downtown Nashville, Tenn. — nearly double the city’s population and located in an area that set rainfall records earlier in the year. (Fortunately, some forecast rains held off.) Contingency insurance has come a long way in recent years, an evolution driven by the fact that, whatever the reasons behind it, weather has become less predictable even as it becomes more critical to the economic and personal safety outcomes of large outdoor events. But adaptation to these new realities by insurance providers is helping the event production community to feel more confident that they’re covered when it really counts. Carroll is executive vice president and program director at Take1 Insurance, a division of U.S. Risk Insurance Group.

50 | INSURANCE JOURNAL | AUGUST 19, 2019

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