Insurance Journal West 2022-10-03

Contents

News & Markets

10

‘Best Practices’ Agencies Tout Record Highs in Organic Growth, Profitability: Study

10

Small Businesses Underestimate Recovery Time, Cost of Cyberattack

11

Supply Chain Restructuring to Generate $33B in Commercial P/C Premiums by 2026: Swiss Re

Special Report

14

Closer Look: MGAs: An AllWeather Distribution Channel for Soft and Hard Markets

20

Spotlight: Workers’ Compensation Premiums Increase 10% for First Six Months of 2022

24

Closer Look: Hotel Industry Pushes Through as Insurance, Economic Uncertainty Builds

27

Special Report: Top 20 Agency Partnerships

28

Special Report: Best Agencies to Work For

29

Overall Best Agency to Work For: INSURICA

30

GOLD Best Agency to Work For – East: RCM&D

31

GOLD Best Agency to Work For – Midwest: Powers Insurance & Risk Management

32

GOLD Best Agency to Work For – South Central: BevCap Management Inc.

33

GOLD Best Agency to Work For – Southeast: Granite Insurance Agency

34

GOLD Best Agency to Work For – West: The Liberty Companies Insurance Brokers

Idea Exchange

36

Cultivating a Corporate Culture that Transcends Locations

38

Navigating Insurance for Today’s Contemporary Art Scene

40

Minding Your Business: How to Lower Agency Value

42

Technology: Collaboration - DNA of Product Development

46

Ask the Insurance Recruiter: Is Our Company at a Recruiting Disadvantage?

50

Closing Quote: How Charitable Giving Can Solve the Industry’s Talent Problem

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Cyber Claims Down But Still Remain Top Concern

Cyberthreats were the top concern for business decision-makers for the third time in four years, according to a recent survey. But overall claims have trended down, at least for the cyber insurer and cybersecurity firm, Coalition.

According to the 2022 Travelers Risk Index, cyber threats were chosen as a top concern by 59% of respondents, followed by broad economic uncertainty (57%), fluctuations in oil and energy costs (56%), the ability to attract and retain talent (56%), and medical cost inflation (55%).

Travelers said that big jumps were seen this year relating to concerns in oil and energy costs (a 16-point increase, up from 40%) and supply chain risks (54%, up from 43%).

The Travelers survey indicates many companies seem to have a false sense of security when it comes to cyber preparedness. The vast majority (93%) of respondents were confi dent their company had implemented best practices to prevent or mitigate a cyber event; however, 64% admitted they don’t use endpoint detection and response, 59% haven’t conducted a cyber assessment for vendors, and 53% don’t have an incident response plan. While 90% of survey respondents were familiar with multifactor authentication (MFA), only 52% said their company had implemented the practice for remote access.

At least for Coalition policyholders, cyber liability claims trended down in the first half of 2022. However, Coalition’s 2022 Cyber Claims Report mid-year update noted that businesses with revenue under $25 million saw a spike in average claims severity to $163,000 in the second half of 2021 — 85% higher compared with the first half of 2021. Through the first six months of 2022, severity decreased to an average $139,000 but that is still 58% more than values recorded in the first half last year, the cyber insurer and cybersecurity firm said.

“Organizations of this size are especially vulnerable to threat actors as they often lack resources to quickly respond to an attack,” Coalition said.

Phishing remains of high concern for business of all sizes because employees continue to be the weak link in cyber defenses. Coalition’s look at about 160,000 of the businesses it protects found that phishing accounted for a majority –about 58% — of claims during the first half 2022. That is a 32% increase from the second half of 2021.

Phishing through business email compromise often leads to funds transfer fraud (FTF), in which threat actors redirect or change payment information to steal. Coalition said the frequency of these incidents remained consistent but severity increased 3% to continue a 3-year trend of rising FTF claims costs.

The good news, according to Coalition, is that the frequency and severity of ransomware claims declined during the first six months of the year. Hackers’ ransom demands also decreased to $896,000 from $1.37 million for the second half of 2021.

Overall, Coalition said its policyholders experienced 50% fewer claims than the broader insurance market. The average loss was $175,258, a decrease of 8% compared with the second half 2021.

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Columnists & Contributors

Contributors: Mike Abate, Melissa Anne-Duncan, Brian Hetherington, Kyle McGrath, Muys Snijders, Kim Tallon

Columnists: Mary Newgard, Catherine Oak, Barry Rabkin, Bill Schoeffler

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‘Organizations of this size are especially vulnerable to threat actors as they often lack resources to quickly respond to an attack’

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& Markets

‘Best Practices’ Agencies Tout Record Highs in Organic Growth, Profitability: Study

As the independent agency channel moves past the coronavirus pandemic and into uncertain eco nomic headwinds, Best Practices agencies achieved record highs in organic growth and profitability, according to the 2022 Best Practices Study by the Big “I” and Reagan Consulting.

The Best Practices update is the first one in its three-year cycle, examining the firms that newly qualified as a 2022 Best Practices Agency. The annual study, conducted jointly in a longstanding part nership between the Big “I” and Reagan Consulting for the past 29 years, provides critical performance benchmarks in six agency revenue categories ranging from under $1.25 million to over $25 million.

“The past few years have brought challenges for independent agencies and their clients, but top-performing agencies have demonstrated resiliency as they’ve weathered these obstacles to grow their businesses and even break study records in numerous categories,” says Chris Boggs, Big “I” vice president of agent develop ment, education and research. “These industry leaders are setting the bar and demonstrating the independent agency channel has never been healthier.”

The Best Practices Study analyzes take

aways from nominated Best Practices firms throughout the nation that have been recognized for outstanding management and financial achievement in categories such as income and expense distribution; revenue and profitability growth; sales and service staff compensation and productivity; technology expenses; and property-casualty and life-health carrier representation.

“Best Practices agencies are writing the playbook for success, and agencies can look to these strategies to guide them toward operational excellence as they seek to better serve their clients,” says Tom Doran, a partner with Reagan Consulting. “As these industry leaders are setting the bar and demonstrating the independent agency channel has never been health ier, study results also indicate that an increased focus on producer recruitment and development is a must to maintain the industry’s progress.”

Key findings from the update include:

• Organic growth breaks Best Practices Study record. At 9.2%, organic growth was up 2.5 times from last year’s results of 3.7%. Organic growth increased in all six revenue groups in this year’s study.

• Profitability remained at all-time highs. At 26.2%, Best Practices agency

profitability went up slightly from last year’s 25.9% result.

• The Rule of 20 achieved a record high. The Rule of 20, calculated by adding 50% of profitability to organic growth, reached a record high in this year’s study of 24 versus 18 in last year’s study. The Rule of 20 is the best metric with which to gauge overall agency health.

• Sales velocity gained ground from last year. While a hard market continued to provide much of the organic growth lift, new business improved materially in this year’s study. Sales velocity totaled 15.5% versus last year’s 13.2%.

• Mergers & acquisitions bolstered growth. In the 2022 study results, 22.3% of Best Practices agencies acquired business, up from 16.4% in last year’s study.

• Producer recruitment and develop ment proves challenging. Net unvalidated producer payroll (NUPP), a measure of producer recruitment and development, remained at 1.1% of net revenues com pared to 1.2% in last year’s study. A healthy

Small Businesses Underestimate Recovery Time, Cost of Cyberattack

Nationwide Agency Forward survey showed 40% of small business owners surveyed expect a cyberattack to cost less than $1,000 and another 60% think it would take less than three months to fully recover.

However, Nationwide claims data shows cyber claims range between $15,000 to $25,000 in recovery costs, plus costs associated with the resto ration process, reputational damage,

and a potential legal fallout. The average recovery time for a business after an attack is 279 days.

“Small business owner concern around cyberattacks has risen 15% since the beginning of the pandemic, but most owners still don’t realize the extent of damage a cyberattack could have on their company and livelihood,” said Peter McMurtrie, president of Commercial Lines at Nationwide.

“Agents have strong opportunities to

bust some of these common misconcep tions around effects post-cyberattack and emphasize that there is greater risk than just loss of funds — business reputation is at stake.”

According to survey results, 48% of small business owners feel ready to prevent a cyberattack on their business. Just 56% of small business owners report offering cybersecurity training at least once a year, and less than 25% of small business owners send regular phishing test emails

NUPP investment would be 1.5%-2.0%, an indication that agencies should consider redirecting a portion of today’s record profits toward new producer investments.

• Shareholder and producer ages hold steady. The weighted average shareholder age (WASA) was 53.2 years, and the weight ed average producer age (WAPA) was 48.6. Agencies should manage these two metrics carefully as lower WASA and WAPA are critical to long-term agency perpetuation.

The annual Best Practices Study began in 1993 as a joint initiative between the Big “I” and Reagan Consulting and studies leading agencies and brokers in the country to help independent agents build the value of their agencies.

Supply Chain Restructuring to Generate $33B in Commercial P/C Premiums by 2026: Swiss Re

By Kim Tallon

SwissRe predicts that deglobalization will generate $33 billion in new com mercial property/casualty insurance premiums by 2026, according to its latest sigma report: “Maintaining resilience: the role of P&C insurers in a new world order.”

Supply chain restructuring is expected to create investments in new infrastruc ture and production facilities, increasing demand for engineering insurance.

Reshoring production capacity domes tically is forecast to generate $30 billion in global commercial insurance premiums by 2026, mostly from engineering, property and liability covers. “Friend-shoring” of supply chains to allied countries would add another $3 billion in premiums, Swiss Re said. However, marine and trade credit premiums would decline slightly as global trade is expected to slow.

“Six months into the war in Ukraine, our world has changed dramatically. Triggered by the war and the pandemic, we are shifting from an interconnected to a multi-polar world faced with disrupted supply chains, energy and food crises,” said Jérôme Haegeli, group chief econo

mist at Swiss Re, in a statement.

“Insurance is becoming even more vital to the economy, contributing to the financial stability of businesses by covering supply chain risks,” he said. “The industry can also facilitate the transition to a green economy by insuring and investing in renewable energy infrastructure, and by expanding agricultural insurance, it can contribute to global food security.”

Gianfranco Lot, head of Global Reinsurance at Swiss Re, said: “In the changing risk landscape, commercial prop erty and casualty insurance will remain a mainstay of resilience — for instance, by helping businesses maintain financial stability as operating circumstances change, providing solutions to help reduce cash flow volatility and stabilizing earnings while supply chains are being realigned.”

Other findings of the sigma study:

• If countries deliver on building all the renewable energy capacity they have been targeting so far, Swiss Re Institute estimates these investments will generate additional premiums from the energy sector of $237 billion by 2035.

to employees.

The survey from Nationwide found 70% of commercial lines agents said clients are concerned about a cyberattack but less than half regularly discuss cybersecurity with their customers – a concerning sta tistic especially for small business owners since many of them greatly underestimate the costs and recovery time associated with a cyberattack.

Lack of knowledge related to the avail ability of cyber insurance could be behind the survey’s finding that only 28% of small business owners report having cyber

insurance compared to 71% of middle market business owners.

Although small businesses were found less likely to have cyber coverage, Nationwide said the survey found that they overwhelmingly responded that they’re interested in learning more about what a cyber insurance policy has to offer.

When made aware of cyber protection resources and products, about 75% of small business owners say they were interested in purchasing common coverages.

• Agriculture insurance has emerged to play a key role in helping farmers maintain income levels and continue farming despite crop losses from drought and heavy rain. Global agricultural insurance premiums are forecast to almost double, reaching $80 billion by 2030.

• In terms of economic growth, the U.S., the UK and Germany stand to benefit most from re-shoring production, Swiss Re found, while countries like Vietnam and Mexico may gain from friend-shoring.

Tallon is an editor with Carrier Management, a sister publication to Insurance Journal.

Figures

93 cents

The amount per $100 of payroll that Oregon employers would, on average, pay for work ers’ compensation coverage in 2023 — down from 97 cents in 2022 — under a proposal by the Oregon Department of Consumer and Business Services. The pure premium rate will drop by an average 3.2% under the proposal. The DCBS said the decline marks 10 years of average decreases in the pure premium rate.

0.5%

The percentage increase in U.S. traffic deaths in the first half of 2022. During that period, 20,175 people died on the nation’s roads — the highest number killed in the period since 2006, according to an estimate released by the National Highway Traffic Safety Administration (NHTSA). According to the NHTSA, traffic deaths have jumped after pandemic lockdowns ended as more drivers engaged in unsafe behavior.

$1.75 Million

The number of Starbucks Corp. employees fired in February after leading an effort to unionize a Memphis store who will now get their jobs back. The Seattle-based coffee giant lost an appeal of a lower court’s order to reinstate them, according to various news outlets. Starbucks said the employees had violated company policy by reopening the store after closing time and inviting non-employees — including a television crew — to come inside.

The amount the city of Evansville, Indiana, will pay to settle a wom an’s lawsuit stemming from a 2017 police chase crash that killed her two children and her husband and left her seriously injured. Princess Carter, 2, and 7-month-old Prince Carter were killed in November 2017 when a man being pursued by Evansville police crashed into the family’s car. Their father, Terence Barker, 26, died about a month later. Janae Carter was pregnant at the time of the crash.

Declarations

Autopilot Complaint

“Tesla has yet to produce anything even remotely approaching a fully self-driving car.”

— Briggs Matsko said regarding a proposed class action against Tesla Inc. in which he is a named plaintiff. The suit alleges the electric car company misled the public by falsely advertising its Autopilot and Full Self-Driving features. Reuters reported that the complaint accuses Tesla and Elon Musk of having since 2016 deceptively advertised the technology as fully functioning or “just around the corner” despite knowing that the technology did not work or was nonexistent.

No Coercion, No Interference

“New Hope’s faith-guided services don’t coerce anyone and do nothing to interfere with other adoption providers who have different beliefs about family and the best interests of children.”

— Attorney Roger Brooks of the Alliance Defending Freedom said in a press release after a federal judge ruled New York state could not require his client, New Hope Family Services, to provide adoption services to unmarried or same-sex couples. New Hope, in Syracuse, says it cannot provide adoption services to same-sex or unmarried couples because of religious beliefs. New Hope says it takes no government funding and has placed more than 1,000 children with adoptive families since 1965.

Not Much Cotton

“There’s just not much crop out there. …

A lot of cotton burned up, and a lot of it never even made it up to begin with.”

— Brad Heffington, a cotton farmer in Littlefield, Texas, said of the drought plaguing the state’s High Plains cotton and cottonseed producing region that normally accounts for 66% of the state’s total yield and more than a third of the nation’s total crop. It’s estimated that cotton production in the High Plains will be down by $2 billion this year.

Environmental Mess

“The Golden Ray was grounded near environmentally sensitive areas that serve as a unique habitat for a variety of species, including, but not limited to, shrimp, fish, migratory birds, crabs, and food sources for all marine life, including, but not limited to, fiddler crabs.”

— Two federal lawsuits filed in Georgia by fishermen, shrimpers, and business owners dependent on coastal tourism state that pollutants released by the capsize of the Golden Ray and the harm caused by the subsequent salvage operation have damaged the area’s sensitive marine ecosystem — and the plaintiffs’ livelihoods. The South Korean-owned cargo ship capsized off the Georgia coast in 2019 with more than 4,200 automobiles in its cargo decks.

OSU Sex Abuse Case

“Our lawyer argued that if OSU had gotten away with what they were trying to do here, with getting this motion thrown out on the statute of limitations, then they would have paved the way and given a playbook for all these other universities to do the same thing that they’ve done, and I’m glad that this court saw through it and didn’t let it happen.”

— Stated lead plaintiff Steve Snyder-Hill after a Sixth U.S. Circuit Court of Appeals ruling revived unsettled lawsuits against Ohio State University over decades-old sexual abuse by the late team doctor Richard Strauss.

California Wildfire Action

“As wildfire emergencies have continued to threaten Siskiyou County, I am taking action to protect residents’ insurance coverage and give them peace of mind.”

— California Insurance Commissioner Ricardo Lara said in a statement after ordering insurers to preserve residential insurance coverage following Gov. Gavin Newsom’s emergency declaration as the Mill Fire threatened Siskiyou County homeowners. The order issued in early September came one month after Lara took similar action to protect Siskiyou County residents affected by the McKinney and China 2 fires.

Closer Look: Managing General Agencies

MGAs:

An All-Weather Distribution Channel for Soft and Hard Markets

By L.S. Howard

Manyreinsurers across the globe increasingly have been doing business with certain select managing general agents (MGAs), seen as market innova tors, by reinsuring the fronting insurers that provide the paper for MGAs to underwrite.

In recent years, it is a trend that has continued from the soft market into the current hard market — as long as the interests of MGAs and their capacity providers are aligned.

“Reinsurers have been increasingly attracted to MGAs and have found an easy means to provide support through a dramatic expansion of the fronting market,” said Conning in a recent study titled “Managing General Agents—Firing on All Cylinders.”

“Total direct premiums written by the top 17 fronting companies [in the U.S.] rose by 45.3% to almost $9 billion in 2021,” said the report. Owned by Markel, State National is the largest and oldest fronting company, which saw gross premiums written rise by 31% to $2.7 billion and fee income rise 21%.

The fronting market has expanded in recent years because reinsurers want to get closer to the customers and to innovators, according to Danny Maleary, CEO of Pro MGA Global Solutions, a London-based MGA incubator, which is currently

supporting 41 MGAs. “A lot of the MGAs are very data driven, and, obviously, reinsurance is extremely data driven, so there’s an alignment in terms of proposition.”

“The appeal of MGAs has been particularly strong for reinsurers seeking to get closer to the end client,” agreed Conning in its report. “To take one among many examples, RenaissanceRe supports a

management liability offering for startups offered through Boost, an insurtech firm specializing in embedded insurance products that trades as an MGA.”

Included in the category of delegated underwriting authority enterprises (DUAEs) are MGAs, managing general underwriters (MGUs) and program managers.

Conning said that Munich

Re leads the pack of reinsurers backing MGAs through fronting companies, “including supporting one of the fastest-growing tech-enabled cyber MGAs, At-Bay, through its subsidiary HSB Specialty Insurance Company.”

From a handful of compa nies led five years ago by State National, Conning said, there are now more than 20 fronting insurers operating in the U.S.

MGA market. “Most of these are so-called hybrid fronts, retaining a share of risk (often as much as 20%), which serves as a further source of comfort to reinsurers,” said the report.

A fronting insurer typically only retains a very small proportion of the risk — about 20% or less — which makes it essential that the MGA develop a close relationship with its reinsurers, Maleary said. (The reinsurer would assume the remaining balance of the delegated authority portfolio.)

On the other hand, a traditional insurer would retain anything up to 80 % of the MGA’s risk and then make a 20% quota share arrangement with its reinsurance partners, he added. However, because of the growing appetite from rein surers who want to reinsure delegated authority business, some traditional insurers “are deciding to reduce their MGA retention level to 40% and reinsure 60% out the back.”

When reinsurers provide capacity for fronting compa nies, it enables them to get access to a portfolio of MGAs where there’s perhaps a greater level of diversification, which supports longer-term involve ment from that reinsurer or a group of reinsurers, said Myles Gould, director, Analytics, AM Best.

Abundant Capacity

In recent years, MGAs haven’t had much difficulty accessing capacity — in both soft and hard markets. Industry practitioners say this is a change from five-plus years ago when insurers sometimes pulled capacity during hard markets because they had plenty of options for their capital deployment. And there

have been other times when capacity exited markets when rates were too low.

“While we were in a soft market, there was a desire to support a broad number of MGAs in specific territories, across specific classes, and as the market started to harden, I did not see that change from a reinsurance perspective,” said Maleary.

“If anything, I saw [MGAs] becoming more sought after. While insurers were chasing those classes that were seeing rate increases, reinsurers decided it would be more beneficial for them to allocate their capital. I was also seeing insurers still supporting MGAs, but they were quota sharing a bigger proportion of the portfolio, out the back to the reinsurance market.”

“MGAs were historically most active in soft markets, when insurers were hungry for premium and turned to MGAs to develop niches that they could not readily access themselves,” the Conning report said.

“MGAs now serve as an all-weather distribution channel, as valuable to insurers in hard markets (such as we are now seeing) as in soft markets,” the report noted. “In terms of technology adoption and exploitation — particularly in rating hard-to-price risks — they have some advantages over the insurers themselves. They are not normally bur dened by legacy systems and the inefficient and duplicative processes (sometimes known as tech debt) that go with these systems.”

Historically, during soft markets, insurers and reinsurers increasingly reached out to the MGAs to drum

up business, to make up for those soft market conditions, commented Greg Williams, senior director at the ratings agency AM Best. However, that has changed over the past five years or so, and capacity now seeks to develop relationships with MGAs because they underwrite in specialty niches, he explained.

If MGAs are able to stay ahead of the curve and provide competitive advantage with innovation, they can keep that value-add in the chain, in all market cycles, said AM Best’s Gould.

Capacity has pulled back in some areas at some points in time for MGAs, Maleary said, but for most classes of business, if the MGA has deliv ered good quality results, is entrepreneurial and innovative, “then irrespective of whether it’s a soft or hard market, the MGA should be okay.”

Why would the capacity provider want to change that? he questioned.

Better Underwriting Performance

MGAs across the globe generally have better combined ratios than insurers, right across the board, according to David Howden, CEO of Howden Group, which com prises the broker Howden and DUAL, the international MGA. Howden spoke at the June conference of the Managing General Agents Association (MGAA) in London.

Over the past five years, the emergence of insurtech MGAs, which are driven by some form of technology, such as algorithms and artificial intelli gence, “have started to look at and analyze data in such a way that it is actually giving them a

bit of a deeper insight into the risk they should be accepting — i.e., what’s good risk and what’s bad risk,” said Maleary.

Such models are helping to drive the better combined ratios for MGAs because they’ve got data “that’s helping them to slice and dice what’s good or bad,” he noted.

Attracting Talent

Howden discussed a number of key traits that are seen in successful MGAs: underwriting credibility (outperforming the market), being nimble, employ ing strong data and analytics, having alignment with their capacity providers, and talent.

MGAs have an enormous ability to attract talented underwriters who are seeking a slightly more entrepreneurial and empowered business model, Howden said.

Indeed, the Conning report suggested, the ability of the MGA model to attract talent in a post-pandemic world could have played a significant role in MGA formation in 2021, although this is hard to quantify. “[T]he more flexible business model of MGAs and, crucially, the greater sense of agency felt by people working at smaller and more nimble organizations may have contributed significantly to the allure of MGAs in competing for talent,” the report noted.

Culturally, MGAs are often attractive to the talent that traditional insurers are finding hardest to attract — including data scientists and software developers.

MGAs are much more nimble than traditional insurers, akin to a speedboat versus an oil tanker trying to change course, said Maleary.

Business Moves

National

RB, Corvus

Specialty risk broker RB Jones announced its marine and energy division has acquired the Smart Cargo Insurance business from Boston-based managing general agent Corvus Insurance.

The Corvus ocean cargo product offers an insurtech product for temperature-sen sitive cargo such as food and pharmaceuti cals.

As part of the transaction, RB Jones will have exclusive access to underwrite cargo insurance policies through Skyward Specialty Insurance Group, a specialty property/casualty insurance company that provides capacity to the marine cargo industry.

The Corvus technology utilizes risk models built on multiple data points from cargo sensors to inform underwriting, coverage and rates. Additionally, the tech nology can be used to minimize or prevent cargo damage during transportation.

RB Jones said the analysis and appli cation of temperature stability data will help its marine cargo clients optimize their shipping methods and routes.

John Gambino, marine underwriting manager at RB Jones, will lead the inte gration of the Corvus offering into the RB Jones portfolio. In addition, the company said it will welcome talent from Corvus as RB Jones associates. Zandra Brown joins as head of specialty cargo and Kevin Kempf joins as product leader of specialty cargo. Both Brown and Kempf report to Gambino. Detroit-based H.W. Kaufman Group is

the parent company to RB Jones.

Corvus specializes in technology and data-driven insurance products and digital tools. Its products include Smart Cyber Insurance and Smart Tech E+O.

Pie Insurance

Pie Insurance, an insurtech specializing in workers compensation insurance for small businesses, said it raised a $315 mil lion Series D round of funding – the largest round of financing for any U.S. based P&C insurtech company in 2022.

The fundraise more than doubled Pie’s total capital raised to over $615 million. The round was led by Centerbridge Partners and Allianz X, the digital invest ments arm of Allianz Group.

White Mountains Insurance Group also joined as a new investor, and previous investors Gallatin Point Capital, Greycroft, Acrew Capital and others also participated in the round.

Pie recently announced it more than doubled its gross written premium, and doubled its number of policyholders and partners.

In addition, Pie expanded its coverage area into two new states, increasing its total workers' comp coverage footprint to 89% of small businesses in the U.S., the company said.

Pie said it will use the funds to support its growth initiatives that directly impact its small business customers, including expanding into new lines of business, fully transitioning to a full-stack carrier, further innovating upon its advanced proprietary pricing algorithms, for small businesses

and the partner agents who serve them.

East

Relation, Mobeck-Guandalini

National insurance agency Relation Insurance Services has acquired MobeckGuandalini Insurance, a multi-line brokerage headquartered in Branford, Connecticut.

Christopher Guandalini will continue to lead Mobeck-Guandalini Insurance under Relation going forward.

Mobeck-Guandalini Insurance transaction adds to Relation’s presence in Connecticut. In April, Relation acquired Guilford-based Yerkes-Stephens Insurance, which was previously part of Nationwide Mutual’s exclusive distribution network. In 2021, Relation acquired The SIG Insurance Agencies in Middletown. It also owns Gary Blaustein Associates in Stamford and Southeast Agency in Jewett City.

California-headquartered Relation is ranked by Insurance Journal within the top 25 largest agencies in the country by revenue and has approximately 1,200 employees across more than 125 locations nationwide. Relation is a privately held corporation backed by Aquiline Capital Partners, a private equity firm based in New York and London.

Brown & Brown, Smithwick & Mariners Insurance Brown & Brown of Massachusetts has acquired Maine-based Smithwick & Mariners Insurance, which includes MidCoast Insurance and Chapman & Chapman Insurance.

Originally founded in 1987 to service the marine industry, Smithwick & Mariners has grow to serve business owners and individuals throughout Maine and greater New England.

The firm, headquartered in Falmouth, Maine. also has offices in Kennebunk and in New Bedford, Massachusetts and South Hampton, New Hampshire. Its other agencies are also in Maine— Chapman & Chapman is in Damariscotta, while MidCoast Insurance is in Bath.

The Smathwick & Mariners companies are led by Scott Smithwick and Chris Smithwick. Following the acquisition, the

Smithwick & Mariners team will continue doing business from its existing offices in Maine, Massachusetts and New Hampshire and will operate within Brown & Brown’s retail segment. The Smithwicks will continue to lead the team and will report to Don McGowan, a regional president in Brown & Brown’s retail segment.

Brown & Brown has more than 14,500 employees in 450-plus locations.

Conner Strong & Buckelew, Armstrong, Doyle & Carroll

Camden, New Jersey-based insurance brokerage Conner Strong & Buckelew has acquired Wayne, Pennsylvania-based bro kerage firm, Armstrong, Doyle & Carroll.

In business since the 1950s, Armstrong, Doyle & Carroll is a privately held firm specializing in managing national and local benefit plans, including a statewide benefits insurance program for private schools and colleges in Pennsylvania.

Michael Tiagwad, president and CEO of Conner Strong & Buckelew, said Armstrong, Doyle & Carroll will ultimately operate under Conner Strong & Buckelew’s brand after a brief transition period. It will be led by 30-plus year employee benefits industry veteran John Doyle.

Founded in 1959 Conner Strong & Buckelew has 450 professionals in offices around the country.

Midwest

Acrisure, B2Z Insurance

Acrisure announced it has acquired B2Z Insurance, a digitally native company that helps business owners obtain customizable insurance coverage in minutes.

The acquisition of B2Z strengthens Acrisure’s digital offering and com plements its recent partnership with QuickInsured, a technology insurance platform that offers customers personal lines insurance policies. With B2Z’s focus on providing small businesses easy access to personalized coverage online, Acrisure now has the ability to provide a more holistic suite of solutions to solve the various insurance needs of its customers.

B2Z was established during the COVID-19 pandemic to help small busi

nesses more simply protect themselves.

Specifically, B2Z uses third party data and analytics to help business owners answer time consuming application questions normally asked to bind policies. Clients can obtain quotes, purchase personalized coverage and review their coverage with a licensed Customer Experience advocate by phone, text or chat.

Through this partnership, B2Z augments and enhances Acrisure’s digital fulfillment capabilities and customer experience on a much bigger scale.

Risk Strategies, Beattie & Associates

Risk Strategies, a national specialty insurance brokerage and risk management firm, announced it has acquired Beattie & Associates, a retail agency in Missouri specializing in employee benefits for both individuals and employers.

Headquartered in the St. Louis suburb of Chesterfield, Missouri, Beattie & Associates is led by its principal, Tom Beattie.

Beattie offers business clients a full range of employee benefit coverages, including group health, disability, life, dental, and vision, as well as associated support services. Beattie’s client base is highly loyal and largely concentrated in the Midwest Region.

In addition to its base in the St. Louis region, Beattie has presence across Big Sky and Bozeman, Montana, as well as Chicago. The Montana presence represents an expansion for Risk Strategies. Beattie’s Chicago presence will complement existing, long-standing Risk Strategies operations.

South Central Alera, jweinland Group Benefits

Alera Group announced the acquisition of jweinland Group Benefits, a full-service employee benefits firm specializing in the highest quality group benefits and self-funded insurance plans.

Founded in 2009 and located in Shreveport, Louisiana, jweinland Group Benefits provides Shreveport and Bossier City clients with group health insurance and employee benefits program consult ing. The team has grown the agency into

one of the largest independent agencies in the state.

The jweinland Group Benefits team will continue serving clients in their existing roles.

Southeast

PCF, Peak Performance Brokerage

PCF Insurance Services, a burgeoning brokerage based in Utah, has acquired Peak Performance Team, a brokerage that offers financing and insurance packages to automobile dealers in the United States.

Peak Performance Team, headquartered in Surfside Beach, South Carolina, provides custom tools for dealers, including auto warranties, service contracts on vehicles, guaranteed asset protection plans and other plans, the companies said in a news release. Michael Burgholzer is president of Peak Performance Team.

It’s the latest of 112 planned or executed acquisitions this year for PCF, which said it leads the industry in the pace of mergers and acquisitions.

Headquartered in Lehi, Utah, PCF said it has a diversified revenue stream but focus es on consulting and insurance brokering for commercial, life and health, benefits and workers’ compensation programs. Peter Foy is chairman and founder.

PCF ranked number 13 on Insurance Journal’s 2022 Top 100 Agencies ranking.

West

RSS, DLP, Conexus

Westminster insurance agencies RSS Insurance Services and Day Larsen Pedersen Insurance have merged into one, local independent insurance agency serving the Colorado community.

The firms are now Conexus Insurance Partners. RSS & DLP have served the Colorado area for a combined 120 years.

Through the recent merger, the newly formed agency has spent time and effort in streamlining processes, procedures and technology.

Conexus is an independent agency with two locations in Westminster that spe cializes in business insurance, employee benefits and personal insurance.

People

National

Boost appointed Emy Donavan as chief underwriting officer. She will oversee the compa ny’s program underwriting, product development, and portfolio management in collaboration with Boost’s insurtech and embedded partners along with the development and execution of Boost’s reinsurance and risk capital markets strategy.

Donavan joins Boost from Fin Capital, where she was a venture partner leading the insurance segment across funds, working on investment thesis development, deal sourcing, and driving portfolio company operating value. Prior to Fin, Donavan was senior underwriting executive over the past 20 years, including serving as global head and CUO of Cyber, Tech, and Media at Allianz Global Corporate & Specialty.

Allianz Global Corporate & Specialty (AGCS) named Darren Tasker as regional head of energy & construction, North America. He joins the AGCS North America executive management team and reports to Bill Scaldaferri, president and CEO, North America.

Tasker has been with AGCS since 2010 and for the past nine years has held the position of head of energy and construction, Canada. Tasker, who will remain based in Toronto, now has overall

responsibility for the AGCS Energy & Construction line of business across North America.

Julia Chu and Thomas Leahy joined Liberty Mutual Insurance’s Global Risk Solutions (GRS)

Office of Underwriting.

Chu will become head of underwrit ing planning, performance, and portfolio management. Leahy will be global product leader, financial lines.

Chu will establish a global GRS underwriting strategy, working with leaders across the commercial and specialty (re)insurance unit while providing actionable insights to manage market dynamics and drive results. She brings more than 20 years of strategy and transformation leadership experience, and joins from Markel, where she was chief risk officer.

Leahy will be responsible for financial lines globally. He has more than 20 years of leadership experience, including more than 15 with Liberty Mutual. Leahy is cur rently president, professional liability, for GRS North America Specialty.

Zurich North America named two new industry prac tice leaders to its U.S. Middle Market team.

Erin Terpack was appointed head of technology and manufacturing. Terpack joins Zurich from Sompo International, where she served

as regional underwriting executive. Previously, she held leadership positions at Chubb, including vice president, commercial insurance manager and assistant vice president, underwriting manager.

Katie Daly was appointed head of real estate, retail, hospitality, and wholesale. Daly joins Zurich from The Hanover Group, where she served most recently as product director for general liability and umbrella, responsible for product delivery to eight business units.

FM Global appointed Ziad Alex S. Tadmoury as senior vice presi dent, division manager of AFM, which specializes in insuring mid dle market clients around the world.

Tadmoury was previously senior vice president and FM Global’s Asia Pacific division manager based in Singapore.

He will be based at AFM’s corporate offices in Johnston, Rhode Island, and succeeds Gerry L. Alonso, who retired in July 2022 after 37 years of service with FM Global.

East

Cross Insurance, headquar tered in Bangor, Maine, named Jonathan Cross president and CEO of the family-owned and operated insurance agency. Cross succeeds his father, Royce Cross, who will continue to serve as chairman for Cross Insurance.

Cross is the third generation of the Cross family to oversee the company and has served as president since 2020.

The company now has

roughly 1,000 employees, working in more than 50 offices.

Risk Strategies, a national specialty insurance brokerage and risk management firm based in Boston, expanded its Atlantic region team with the addition of J.C. Fulse as senior vice president, private client services leader.

Fulse joins Risk Strategies with more than 23 years of industry experience, including work at Chubb Group of Insurance Companies and AIG’s Private Client Group in New York City, as Capital Region marketing manager in Washington, D.C.

Risk Strategies additionally named Steve Trimarchi as senior vice president, growth leader, New England region. Trimarchi brings 16 years of commercial insurance sales and service experience with Marshall & Sterling (Jaeger & Flynn Associates), Pioneer Bank, and Arthur J. Gallagher & Co.

Midwest Valley Insurance Agency Alliance, a family of nearly 150 independent insurance agencies in Missouri and Illinois, recently hired two new commercial marketers.

Amy DelGrosso has worked in the insurance industry for more than 20 years. Prior to joining VIAA, she served as an account executive and account manager at local insurance organizations. DelGrosso currently has both property/casualty and life/

Emy Donavan

Amy DelGrosso

Darren Tasker

Julia Chu

Thomas Leahy

Ziad Alex S. Tadmoury

health licenses.

Dawn Lawson has 22 years of insurance experience and has been a real estate agent for 15 years. She previously served as a certificate specialist, insur ance agent, and bond specialist at various local companies.

JMB Insurance Agency Inc., headquartered in Chicago, Illinois, named Kimberly Goldstein as the firm’s inau gural president for strategic growth, helping to manage day-to-day operations of the firm.

Goldstein brings nearly three decades of experience and leadership in risk management to her new role, and since 2014 has overseen JMBI’s commercial property/casualty practice. In 2020, she assumed leadership of JMBI’s mortgage banking and surety and claims portfolios.

Eric Turek is the new director of Government and Public Affairs for the Kansas Insurance Department. Turek joins the department after serving the past six years as the director of Communications for the Speaker of the Kansas House of Representatives, Ron Ryckman.

Insurance Office of America (IOA) has added to its new Chicago-area team, which will serve the company’s central region in its East Coast division.

Before moving to IOA, Tony Spina was managing director of the staffing practice at GCG Financial LLC, an Alera Group company. Christine Pikowski

was the account manager for the GCG Financial LLC staffing practice. Jason Levin, a 20-year veteran of the commercial insurance industry, most recently served as a senior risk management consultant with GCG Financial.

The new team is based in Elgin, Illinois.

South Central

Summer Jenkins joined One General Agency (OGA) as the executive director of Cannabis Insurance Wholesalers (CIW). CIW is a specialty division of the Oklahoma City, Oklahoma, agency.

Jenkins has worked for some of the country’s largest cannabis program managers, including CannGen Insurance Services and Cannasure Insurance Services. She authored coverage contract language for the first insurance policy to cover cannabis cargo and cash in the United States.

NavSav Insurance named Brent Walters as the new chief executive officer. The firm was established by Candice Walters in 2012. Candice Walters will assume the role of chief compliance officer during the transition. Today, NavSav has more than 50 agencies in multiple states nationwide.

Southeast

The MEMIC Group, specialists in workforce safety, hired John Coaker as senior production underwriter in the Southeast. Coaker, based in Georgia, has worked in the industry for more than two decades.

The MEMIC Group

includes MEMIC Indemnity Co., MEMIC Casualty Co., and parent company Maine Employers’ Mutual Insurance Co.

West

Orchid Underwriters

Agency named Kathy Cody CEO. Cody joined Orchid in 2019 as its COO and became president in 2021. She was previously chief operating officer, personal lines, for Farmers Insurance Group. She was CFO of Farmers Life and head of operational finance for Zurich Global Life NA.

Ross Bowie was named pres ident and chief underwriting officer. Bowie joined Orchid as head of personal lines in 2020 and was appointed chief underwriting officer in 2021.

Before joining Orchid, Bowie served as senior vice president at Bankers Insurance Group, overseeing personal and com mercial lines and new product development. His early career was at American Strategic Insurance.

Steven Carlsen will take on a new role as an executive vice president in national programs. Carlsen had been a board member of Orchid since its transition to private equity ownership in 2014, serving as executive chair and chair of the underwriting committee. He assumed the role as CEO in early 2021 and led the company through its sale to Brown & Brown in 2022. Carlsen was a co-founder of Endurance Specialty in 2001, serving as global CUW and Endurance Re North America president.

The Liberty Company Insurance Brokers named Keith Binkley executive vice president, and national prop

erty/casualty practice leader. Binkley, who has more than 22 years of insurance industry experience, is based in Denver, Colorado.

Alliant Insurance Services named Edward Stewart a senior vice president. Stewart is based in Seattle, Washington, and will advise clients on risks associated with renewable energy.

Stewart began his career in the British military, serving as a Royal Marines Commando. He subsequently worked in the security and oil and gas industries in Africa, Asia, and the Middle East. Prior to joining Alliant, Stewart was a vice pres ident for a global brokerage.

Burns & Wilcox has added California-based Joe Jurkovich and promoted Tom Carvalho and Evan Hudson.

Jurkovich joins as associate managing director, where he oversees the Fresno office’s day-to-day operations and growth strategy. He has nine years of industry experience and most recently worked at Deans & Homer.

Carvalho, senior personal insurance underwriter, is now associate managing director, helping to oversee the San Francisco office’s day-to-day operations. Carvalho began his career at Burns & Wilcox as an underwriting administrator more than a decade ago.

Hudson, senior commercial underwriter, has been promot ed to commercial manager, contract/binding markets, leading contract binding rela tionships for the San Francisco office. Hudson has more than a decade of commercial insurance experience at Burns & Wilcox.

Dawn Lawson

John Coaker

Spotlight: Workers' Compensation

Workers’ Compensation Premiums Increase 10% for First Six Months of 2022

Acompar ison of workers’ compen sation

By Douglas A Powell

direct premium written indicated an overall increase of approximately 10.1% for the first six months of 2022 com pared to the first six months of 2021. Twenty of the Top 25 carriers by dollar volume of workers’ compensation busi ness reported a period-to-peri

od increase in direct premium written. Overall, the Top 25 workers’ compensation writers reported a period-to-period increase in direct premium written of 13.7%. The workers’ compensation writers that ranked 26-50 reported a peri od-to-period increase to direct premium written of nearly 10.5%. The aggregate dollar increase of workers’ compen sation premium volume from June 30, 2021 to June 30, 2022 was over $2.6 billion.

Future changes in workers’ compensation premium vol

ume will be highly dependent on changes in employment levels. In part, the continued impact of COVID-19 by state will affect workers’ compensa tion premium.

State-by-state unemploy ment results have been and remain dependent on the degree to which states can completely re-open.

Similarly, changes in behav iors will continue to shape the workers’ compensation insurance sector. These chang es in behaviors can include safer work environments as a

result of advancing technology as well as the increased use of telehealth. Also, changes in regulation and legislation remain a constant factor in future premiums reported.

Aggregately, the workers’ compensation sector remains financially stable. Factors beyond changing premium volume will contribute to this financial stability.

Powell is a senior financial analyst at Demotech Inc., a Columbus, Ohiobased financial analysis firm. Website: www.demotech.com.

Workers’ Compensation Comparison 2013-2022 (DPW)

DPW Through 6/30 Growth (Loss) % Change

2022 $28,709,662,681 $2 ,633,344,982 10.1%

DPW Through 12/31 Growth (Loss) % Change

2021 $26,076,317,699 -$96,690,852 -0.4% $50,347,289,765 $975,894,331 2 .0%

2020 $26,173,008,551 -$2 ,284,133,005 8.0% $49,371,395,434 -$4 ,662,301,474 8.6%

2019 $28,457,141,556 -$930,269,272 3.2% $54,033,696,908 -$1,399,022,914 2.5%

2018 $29,387,410,828 $302 ,757,902 1.0% $55,432,719,822 -$64,687,228 -0.1%

2017 $29,084,652,926 $195,533,548 0.7% $55,497,407,050 $225,820,802 0.4%

2016 $28,889,119,378 $778,625,249 2 .8% $55,271,586,248 $1,260,150,862 2 .3%

2015 $28,110,494,129 $1,962,125,610 7.5% $54,011,435,386 $2 ,926,136,849 5 .7%

2014 $26,148,368,519 $1,885,611,477 7.8% $51,085,298,537 $3,634,669,695 7.7%

2013 $24,262,757,042 $2 ,140,325,493 9.7% $47,450,628,842 $3,906,985,620 9.0%

Top 25 Workers' Compensation Writers

Based Upon Dollar Amount of Direct Written Premium

Second Quarter Second Quarter

Rank Company Name 2022 (YTD) 2021 (YTD) % Change

1 Zurich American Insurance Company $948,884,042 $841,921,221 12.70%

2 Technology Insurance Company Inc. $694,622,191 $522,255,126 33.00%

3 Travelers Property Casualty Company of America $616,691,086 $595,825,941 3.50%

4 State Compensation Insurance Fund $599,342,668 $581,689,369 3.03%

5 Texas Mutual Insurance Company $529,778,102 $453,238,248 16.89%

6 Insurance Company of the West $488,505,816 $413,559,620 18.12%

7 American Zurich Insurance Company $452,510,676 $376,831,407 20.08%

8 Old Republic Insurance Company $413,951,704 $381,889,944 8.40%

9 ACE American Insurance Company $380,191,467 $320,114,435 18.77%

10 LM Insurance Corporation $358,793,725 $323,979,813 10.75%

11 National Union Fire Insurance Company of Pittsburgh, Pa. $354,954,644 $222,225,749 59.73%

12 Accident Fund Insurance Company of America $324,102,789 $333,321,347 -2.77%

13 Wesco Insurance Company $316,469,104 $248,633,520 27.28%

14 Twin City Fire Insurance Company $305,325,543 $272,638,632 11.99%

15 Arch Insurance Company $302,162,010 $307,056,967 -1.59%

16

The Charter Oak Fire Insurance Company $263,055,003 $235,581,254 11.66%

17 Pinnacol Assurance $256,776,245 $267,111,176 -3.87%

18 Indemnity Insurance Company of North America $248,232,079 $220,457,195 12.60%

19 Zenith Insurance Company $244,622,373 $251,739,020 -2.83%

20 Idaho State Insurance Fund $241,583,330 $122,292,085 97.55%

21 NorGUARD Insurance Company $237,558,539 $252,929,696 -6.08%

22 AIU Insurance Company $236,917,845 $172,729,379 37.16%

23 Property and Casualty Insurance Company of Hartford $231,613,167 $201,247,103 15.09%

24 Starr Indemnity & Liability Company $230,692,466 $224,655,808 2.69%

25 Hartford Casualty Insurance Company $230,589,204 $218,553,532 5.51%

Top 25 Total $9,507,925,818 $8,362,477,587 13.70%

Next 25 Total $4,631,776,357 $4,191,969,190 10.49%

All Others (652 Companies for 2022) $14,569,960,506 $13,521,870,922 7.75%

Total (702 Companies for 2022) $28,709,662,681 $26,076,317,699 10.10%

Data Source: The National Association of Insurance Commissioners (NAIC), Kansas City, Mo., by permission. Information derived from an S&P Global Market Intelligence product. The NAIC and S&P Global Market Intelligence do not endorse any analysis or conclusion based upon the use of this data. This exhibit is based upon the initial reporting of second quarter 2022 data, estimated to be more than 95% of the companies that report quarterly. These figures exclude premiums for several large state funds (e.g. California, New York, Pennsylvania) that have not always reported second quarter data.

Closer Look: Managing General Agencies

from page 15

MGAs provide a great mechanism for the industry’s entrepreneurial underwriters, who, after the pandemic, are less interest ed “in working for the man,” said Simon Burton, CEO and chief underwriting officer for Greenlight Capital Re, in an interview.

“They’re very good at what they do. They’re super competent; they’ve got great relationships. They’ve got long track records, but they’d like to have a bit more autonomy, and, frankly, have greater participation in the profit of the business that they generate.”

“Most of MGA talent, from an under writing perspective, is coming from large named insurers where maybe they’re No. 1 or No. 2 in line, but they want to work in a more entrepreneurial environment,” said Williams at AM Best.

Alignment of Interests

All the executives interviewed or quoted in this article mentioned “alignment” of

interests as being crucial to strong, longterm relationships between MGAs and their capacity providers.

Maleary defined alignment as sharing the same vision, work ethic and approach (in terms of acquisition costs, in partic ular) — all helping to structure a strong commercial relationship that benefits all partners. One example, he said, would be to reward underwriters by the profitability of the portfolio.

Howden was dismissive of old precon ceptions about MGAs and those insurers that are concerned about giving away their pens to MGAs. He called this type of talk “‘old hat, old thinking,’ and we need to change that.”

If MGA owners lose their capacity, they lose their business and they have no value, said Howden during his speech. “That is alignment.”

On the other hand, when a line under writer gets told off by a CUO “for having written a crap risk — that’s not alignment,”

said Howden. “And I think that message really needs to come across. MGAs are absolutely aligned to their capacity advisers and really care.”

“The MGA market has become much more professional. The talent pool is deep er; it’s more experienced. And then the insurers’ and the reinsurers’ enterprise risk management practices around audits have increased as well,” AM Best’s Williams said. The rating agency has introduced a performance assessment for DUAEs to distinguish the best performing MGAs.

Misalignment of Interests

Burton recalled a period from a few years ago when risk capital was being undercompensated in MGA relationships — when there was a serious misalignment of interests.

He cited one example when Greenlight Re was offered three points of margin for an MGA’s business. “Frankly, three points of margin, after we overlayed our own expenses, would not even be breakeven. My response was that it simply wouldn’t work for us. But some of these deals were getting done, which wasn’t very healthy or sustainable for reinsurers or the market.”

The market was soft, and too much reinsurance capacity was chasing too little demand, Burton said, noting the situation caused a backlash and capacity withdraw al, including from MGAs.

“We only enter into relationships with MGAs where there’s a good alignment of interests. Put plainly, we can’t be in a sit uation where the reinsurance contract is a significant loser over a several year period while the MGA remains highly profitable.”

“Now it’s a matter of selecting the very best MGAs — the MGAs that are truly delivering the best value to their custom ers and for everybody in the value chain,” Burton said. Nowadays, when reinsurers go into a discussion with MGAs, “there’s an appreciation for the risk capital that reinsurers are bringing to the table and an understanding that there’s a fair amount of compensation that comes with that deployment of capital.”

This article first was published in Insurance Journal’s sister publication, Carrier Management.

Closer Look: Hotels & Motels

Hotel Industry Pushes Through as Insurance, Economic Uncertainty Builds

By Amy K. O’Connor

Abusy

summer travel season provided a much-needed boost to the hotel industry but rising insurance costs and other economic factors threaten to undermine the sector’s ongoing recovery.

After nearly three years of losses related to COVID-19, hotel industry revenue and occupancy may actually exceed pre-pandemic levels by the end of 2022, according to the American Hotel and Lodging Association (AHLA).

A mid-year AHLA report released in July shows hotel room revenue is on pace to reach $188.4 billion this year, an 11% increase over 2019 and a more than 50% increase over

2020 revenue, which fell to $85.9 billion. Occupancy rates are expected to average 63.4% this year, AHLA said, nearly reaching 2019’s level of 66%.

Casting a shadow over the positive trends, however, is a serious property insurance capacity crisis as standard markets continue to retreat from the space. Supply chain disruptions and high construction costs, plus more frequent and intense natural catastrophes, have increased the frequency and severity of property damage claims.

Property insurance rates have risen consistently for the last several quarters, according to Marsh’s Q2 2022 pricing index, with the most recent increase averaging 6%.

Finding admitted carriers

that would write older, frame building hotel or motel prop erties with exterior entrances, or those without sprinkler systems or other modern upgrades, was already difficult before the market hardened, said Aaron Lowenthal, director of sales, for Amalgamated Insurance Underwriters (AIU), an MGA based in Montvale, N.J.

Now, standard carriers won’t touch these properties, Lowenthal said, forcing more hotel/motel business into the excess and surplus lines market.

“Just about every month you see or hear about another market pulling out because they don’t think it’s profitable anymore,” he said. “Finding capacity, finding companies

that are willing to still write these hotels and somehow make money on it is definitely challenging.”

AIU’s hospitality program specializes in property coverage for hard-to-place franchise or non-franchise hotels and motels built before 2000. Lowenthal said that while many of these properties have been rehabilitated or repurposed in recent years, carriers still see the potential for more severe claims with older buildings.

“It’s not a desirable risk,” Lowenthal said, adding, “Even though our experience has been that as long as these hotels are properly managed and properly updat ed, we have had a good loss history and haven’t had any

major issues or challenges.”

Rocky Bhatka, regional vice president of commercial lines for World Insurance Associates, said the last couple years of uncertainty with COVID travel restrictions caused a further exodus of admitted carriers.

“From the middle to the end of last year, the majority of the standard markets didn’t write hotel business and we had to basically knock on each and every E&S door to find a solution for our clients,” Bhatka said. “E&S carriers have stepped up to the plate and helped us find solutions.”

The retail broker manages about 500 properties nation wide, ranging from smaller mom and pop motels to full-service flagship hotels in major cities. World Insurance places all lines of business, including general liability, commercial property, workers’ compensation, cyber liability, directors & officers, and EPLI.

Property insurance and general liability have been the most difficult to place, Bhatka said. Most carriers don’t want to write exterior entry motel properties and those that do will only provide limited assault and battery coverage

or exclude it altogether in high-crime areas. This has been an issue for franchisees that are required by a franchise agree ment to have the coverage, he said.

These capacity challenges coupled with significant rate increases are taking a toll on the smaller hotel operators, insurance specialists say.

“For mom-and-pop hotels with two or three properties, insurance cost is a huge thing in their budget. Whatever they were paying in 2019 has doubled,” said Bhatka. “If you’re in a coastal area or Tier 1 wind zone, forget it. You’re easily looking at 35% to 40% rate increases year over year.”

Agents are having to piece together coverage packages at much higher rates for hotel and motel clients, who were once easily able to obtain a businessowner policy (BOPs) with the general liability and property coverage included, said Mac Howey, an insurance agent with Michigan-based Howey and Associates.

“Now, not only has your property insurance doubled, but your GL is two to three times what it was; the umbrella is rated on the higher GL

premium so that’s going up astronomically as well,” he said.

Effects of Other Challenges

The ongoing staffing shortage is another concern facing the hotel and insurance industry.

In a June survey by AHLA, 97% of members reported being understaffed. According to a September report from the U.S. Travel Association, 1.2 million leisure and hospitality jobs were still unfilled as of August 2022, far exceeding those of any other industry.

As noted by a Moody’s Economist in a Spring 2022 report, “Labor is such a crucial component of the conversation around performance in the hotel sector, both in terms of the people who keep hotels going by working at the properties as well as business activities that spur stays at hotels.”

AHLA said the industry is not expected to reach pre-pan demic employment levels until at least 2024, despite aggres sive efforts by hotel operators to fill vacancies, including offering higher wages and expanded benefits. Carriers

are paying close attention to how COVID shutdowns and the staffing shortage is impacting hotel properties, according to insurance specialists.

Admitted and non-admitted companies are reinspecting properties to check if they’ve been properly maintained the last several years and requiring a “laundry list” of items be completed before writing coverage, said Howey.

Those hotel operators who are struggling to find the man power to address any issues will have a harder time finding coverage, said Bhatka.

“Carriers are making sure that the client has maintenance staff or that somebody is maintaining the property on a regular basis, from electrical panels all the way up to the roof and everything in between,” he said.

Carriers are limiting coverage if proper inspections and loss control protections are not completed, Lowenthal said, which will lead to further market challenges.

“If they are trying to protect themselves and limit the cover age by saying ‘if we can’t get all these protections in place then we won’t be able to stay on this risk,’ that creates problems in the whole market and drives pricing up,” said Lowenthal.

The pandemic has also changed hotel guests’ expec tations, said Howard Russell, managing partner for Weinberg Wheeler Hudgins Gunn & Dial in Las Vegas. “Hotels will be asked questions about their health and safety policies as new things come up; we’ve seen a significant number of incidents of gun violence in all walks of life so, again, hotels will be faced with questions continued on page 26

Closer Look: Hotels & Motels

from page

about their security protocols.”

The underlying risks haven’t changed as much as the severity of these claims has, Russell said. Complicating hotel industry exposures is an increasing virtual world that allows negative reviews to be shared far and wide, creating the potential for serious reputational damage as well.

“The public is more attuned to looking at health and safety protocols now when they go to a property, and because they are more attuned, they might be more likely to comment or criticize a particular business’s practices,” he said.

Risk Management & New Opportunities

Though it may be challeng

ing because of worker short ages, proper risk management is more important than ever in the hotel segment, specialists said.

AIU, for example, contracts with an inspection company to thoroughly evaluate every aspect of a hotel or motel operation and offer recommendations for making the property safer, Lowenthal said. Agents and their insureds should be on the same page on the importance of acting on risk management recommen dations, he noted.

“We are only looking for properties that are properly managed and up to date,” Lowenthal said. “We stay profitable by understanding these properties as best we can and being deliberate about risk management.”

Howey said clients are more receptive to improving their exposures now than they were in the past as they see their premiums continue to go up. Agents must be careful about who they will work with and make sure they work with the right people, he said.

“It’s imperative for the hotels or motels to do their part,” Howey said.

“Oftentimes, there’s pinching the bottom dollar and really trying to maximize their revenue. That’s been a tool that has worked in the past but not in this day and age in this space.”

It isn’t all bad news for the industry. “The pandemic’s effects on travel plans appear to be fading,” according to a

Deloitte Summer 2022 Travel Survey, and new opportunities for revenue from business travelers who combine work trips with vacations, referred to as “laptop luggers,” are also emerging, Deloitte said.

Bhatka is optimistic the posi tive trends will help eventually bring carriers back.

“I think it is going to get better. We have already started to see more and more interest building up in the standard market,” he said. “My pre diction would be that despite the hard market, we will see a better environment for our clients in the next one to two years.”

O’Connor is a veteran freelance and insurance journalist based in California.

Thanks to Stephen for the kind words and thank YOU for reading. Our journalists take pride in serving the industry. If this publication is valuable to you, please consider upgrading your subscription at www.insurancejournal.com/pro

“Great publication to keep me informed & on top of my game.”

Stephen Peters - Producer at Hamrick Insurance Services & Satisfied Insurance Journal Subscriber

& Markets

New Report on California Workers’ Comp Medical Payment Trends

The Workers’ Compensation Insurance Rating Bureau of California released an updated California Workers’ Compensation Aggregate Medical Payment Trends report for 2021.

The latest annual report compares medical payment information from 2019 through 2021. It analyzes medical payment and utilization trends by provider type, service locations and different service types.

Findings from the report include:

• Overall medical payments per claim rose significantly, driven by increases in the payments per transaction. The increase in payments per transaction was largely due to the 2021 fee schedule updates to medical-legal and evaluation and

management services.

• The 2021 Medical-Legal Fee Schedule and 2021 updates to the reimburse ment allowance for evaluation and management services drove up average payments per service as well as medical payment share for medical-legal services and evaluation and management services in 2021.

• Office or other outpatient service procedures continued to grow and are the fastest-growing physician service in 2021. Use of analgesics anti-inflammatory prescriptions increased more significantly than that of any other therapeutic group.

The report also found that telehealth service use continued to decline in 2021. However, it still remained at a far higher level than pre-pandemic periods.

Oregon Hospital Issued Workplace Safety Fines

The Oregon State Hospital is facing a $54,000 fine for failing to investi gate workplace injuries.

The citation, brought by the state’s Occupational Safety and Health Administration, alleges that from January 2021 to June 2022 the hospital didn’t investigate every time workers suffered an injury or illness that caused them to miss work, Oregon Public Broadcasting reported. The hospital didn’t look at ways to prevent future injuries and illness from occurring, according to the citation.

The state hospital is a secure psychiatric facility that largely houses people charged with crimes, but who need mental health treatment before their cases can proceed. In recent years, it has struggled to admit people within the required seven days of being ordered into their care.

Last year, the hospital documented over 300 cases that resulted in thousands of hours away from work, according to the citation. Oregon OSHA also said about 40% of the injury and illness cases in 2022 were the result of workplace violence and most of those cases weren’t investigated.

The Oregon State Hospital, like other hospitals, has struggled with staffing throughout the pandemic. At times, the National Guard has been called in to help.

An unnamed hospital spokesperson says they plan to pay the fine and are working to address the issues.

Copyright 2022 Associated Press. All rights reserved.

News & Markets

Washington Roofers Face $1 Million-Plus in Fines for Reported Safety Violations

Two Washington roofing companies that landed on the Department of Labor & Industries’ severe violators list face large fines for reportedly allowing roofers to work on top of homes without using fall protection, among other alleged safety violations.

L&I has reportedly inspected Allways Roofing Inc. in Snohomish 11 times in the past three years following reports of roofers not wearing fall protection. The two most recent citations the firm was hit with include $788,000 in fines. Allways Roofing has reportedly amassed nearly $2.5 million in penalties over the

past 15 months.

Many of the violations for which L&I inspectors cited the company are for repeatedly ignoring fall protection rules, incurring the most severe penalty imposed by L&I. Several of these citations are still in the appeals process.

Allways Roofing allegedly has had at least seven serious injuries including five falls from heights and two eye injuries from nail guns.

United Roofing Solutions, another company L&I considers a severe violator, faces a new round of fines for repeated violations. L&I opened an inspection of

Washington Proposes 4.8% Workers’ Comp Increase for 2023

TheWashington Department of Labor & Industries is proposing a 4.8% increase in the average price employers and workers pay for workers’ compensation insurance in 2023.

Employers and workers would jointly pay an additional $61 a year on average for each full-time employee within a business if the increase is adopted.

Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2022.

General wage inflation and increasing medical costs all make it

more expensive to provide this workplace safety net. As workers’ wages go up, the cost of insuring them goes up as well, since much of the benefits directly paid to workers are tied to how much they are getting paid.

In 2021 and 2022, L&I helped employers and workers struggling from the pandemic by tapping its contingency reserves to avoid a larger increase in premium rates. L&I plans to take a similar approach to prevent a larger rate increase for 2023. Under the

the company in March after a compliance safety and health officer reportedly drove by a job site and observed six roofers on top of a house not wearing fall protection or safety glasses.

United Roofing Solutions has allegedly been inspected by L&I a dozen times since it opened in 2009, and it has been cited and fined more than $500,000 for workers not wearing fall protection. In the most recent case, the company was cited for repeat, willful, serious violations for not using fall protection, a $305,254 penalty.

United Roofing Solutions has appealed the citation and fine.

current proposal, L&I will use contingency reserves to cover any gap between premi ums and costs to keep rates steady and avoid a larger increase.

In most states, rates are charged as a percentage of payroll, so when employee wages go up, more premiums are collect ed. In Washington, rates are charged as an amount per hours worked. When wages go up, the rate paid stays the same.

Public hearings are scheduled for 10 a.m. on Oct. 26 and Oct. 27 to take input on the rate proposal before a final decision is made. To support social distancing, the public hearings will be held virtually. Final rates will be adopted on Nov. 30 and go into effect Jan. 1, 2023.

News & Markets

broken latch while the officer was cleaning its city-issued kennel in Jan. 2021.

The dog initially tried to attack Cole’s 5-year-old daughter, but the child was protected by the netting of a trampoline, according to court documents obtained by the San Diego Union-Tribune.

The dog then began attacking the girl’s mother from beneath the trampoline, “bit ing ferociously on her ankle through skin to bone and tendon, causing severe pain, bleeding, permanent injury and damage,” the lawsuit said.

$600K for Woman Attacked by Police Dog in California

SanDiego, California, officials approved a $600,000 payout to a woman who was severely injured when a police dog attacked her in her own yard after escaping from its trainer’s home nearby.

A lawsuit filed by Jenna Cole in March called the bite a “vicious” and

“unprovoked attack” and accused the city of negligence for how it trained, monitored and caged the K-9. The suit also contended such animals should be in secure facilities, not residential neighborhoods.

City officials described the bite as “unin tentional” and said the dog escaped his handler’s backyard through a gate with a

The City Council was scheduled to approve the settlement after giving preliminary approval last month. It covers diminished earning capacity and medical bills for Jenna Cole and mental health counseling for her and her daughter. Bubo, a San Diego Sheriff’s Department dog, is also at the center of a civil rights case alleging excessive use of force against a man in Fallbrook, the Union-Tribune said.

Copyright 2022 Associated Press. All rights reserved.

California Workers’ Comp Independent Medical Review Volume Fell in First Half of 2022

Afterhitting a record low in 2021, the number of independent medical reviews used to resolve California workers’ comp medical disputes continued to decline in the first half of 2022 according to the California Workers’ Compensation Institute.

California law requires workers’ comp claims administrators to have a Utilization Review program to ensure treatment provided to injured workers is supported by clinical evidence outlined in the state’s Medical Treatment Utilization Schedule.

Most treatment requests are approved by UR, but in 2012 state lawmakers adopted IMR to allow injured workers to obtain an independent medical opinion on requests that UR physicians deny or modify. IMR took effect for all claims in July 2013, and CWCI began monitoring IMR activity in 2014.

CWCI’s latest review shows that 62,859 IMR decision letters were issued in the first half of this year in response to applications submitted to the state, down 7.6% from

68,039 letters issued in the first six months of 2021, while the latest full-year count shows 133,494 letters issued in 2021, down 2.4% from 136,738 letters in 2020. That’s down 27.7% from the all-time high of 184,735 letters in 2018, according to the institute.

IMR letters often include decisions on multiple medical service requests, and as the volume of letters has declined in recent years, the number of service decisions has dropped as well. In 2019, the last year prior to the pandemic, IMR physicians issued medical necessity decisions on 261,708 primary service requests, but by 2020 that had fallen 17.5% to 215,788 decisions, and in 2021 it continued down. The latest data show that in the first half of 2022 IMR physicians issued 97,649 decisions on primary medical service requests.

The distribution of IMRs by type of medical service request show that since peaking in 2018, IMR letter counts have declined across all medical service cate gories, but most of the overall decline in IMR can be traced to the sharp decline in prescription drug disputes following the Chronic Pain and Opioid Guidelines into the MTUS in late 2017.

Disputes over prescription drug requests dropped from 47.3% of all IMRs in 2017 to 34.9% of all IMRs in 2021, with the latest data showing prescription drug disputes were down to 33.9% of the IMR disputes in the first half of this year.

CWCI has published additional data and analyses on the IMR data through June 2022 in a bulletin, which Institute mem bers and subscribers will at the institute’s website, www.cwci.org.

Special Report: Agency Partnerships

Insurance Journal’s Top 20 Agency Partnerships

(Ranked by 2021 Total P/C Revenue)

Employee count for these groups does not necessarily include all affiliates responsible for total revenue.

Editor’s Note: Corrected and revised on September 19, 2022

1 SIAA

$1,456,811,303 $0 $10,857,968,164 $0 20,209 Hampton, New Hampshire siaa.com

2 ISU Insurance Agency Network $1,268,922,000 $105,320,000 $9,850,000,000 $1,700,000,000 5,250 Charleston, South Carolina joinisu.com

3 MarshBerry Connect Platform LLC $917,556,522 $300,609,881 $7,404,119,080 $3,353,788,548 6 Woodmere, Ohio marshberry.com/platform

4 Keystone Insurers Group Inc. $558,373,350 $92,148,040 $4,405,312,427 $1,532,628,864 5,180 Northumberland, Pennsylvania keystoneinsgrp.com

5 SecureRisk LLC $487,104,679 $51,458,218 $3,656,059,810 $680,204,759 10 Tucker, Georgia securerisk.com

6 Renaissance Alliance Insurance $456,122,144 $0 $3,600,000,000 $0 168 Chicago, Illinois Services LLC, renaissanceins.com

7 The AC Companies $442,063,616 $4,648,570 $2,970,919,985 $5,425,125 14 Concord Township, Ohio jointheac.com

8 First Choice Agents Alliance LLC $365,512,729 $0 $2,588,076,811 $0 16 Mooresville, North Carolina joinfcaa.com

9 The Iroquois Group $296,349,571 $35,000 $2,241,886,681 $0 76 Allegany, New York iroquoisgroup.com

10 Combined Agents of America LLC $192,287,692 $17,623,737 $1,415,995,263 $0 11 Austin, Texas combinedagents.com

11 Smart Choice $189,334,035 $8,834,385 $1,356,465,063 $39,266,664 74 High Point, North Carolina smartchoiceagents.com

12 Pacific Interstate Insurance Brokers $129,456,774 $0 $805,345,393 $0 10 El Dorado Hills, California piib.com

13 Brightway Insurance $107,689,990 $4,864,374 $890,800,000 $29,500,000 350 Jacksonville, Florida brightway.com

14 Georgia Agency Partners $106,257,000 $9,011,000 $700,076,000 $83,269,000 1 Statesboro, Georgia gapins.org

15 Insurors Group LLC

$102,000,000 $12,800,000 $578,000,000 $190,000,000 339 Dallas, Texas insurorsgroup.com

16 GreatFlorida Insurance $82,492,685 $235,829 $633,804,822 $2,361,943 336 Stuart, Florida greatflorida.com

17 Bainswest Inc. $62,604,281 $9,858,464 $443,314,696 $122,716,011 458 Owasso, Oklahoma bainswest.com

18 Insurance Associates of America LLC $61,487,012 $3,074,188 $461,152,590 $24,911,347 22 New Berlin, Wisconsin IAANetwork.com

19 The Insurance Alliance Network $41,705,993 $0 $311,222,747 $0 300 Camp Hill, Pennsylvania theinsurancealliancenetwork.com

20 PacWest Alliance Insurance $33,957,650 $1,075,326 $309,889,600 $49,802,077 300 Fresno, California Services Inc., pacwestalliance.com

Editor’s Note: This list has been reprinted to reflect a correction to ISU Network’s Total P/C Revenue. We apologize for the error. Also, this list includes aggregators, clusters, and franchise groups.

Special Report: Best Agency to Work For

2022 Winners

OVERALL

INSURICA, Oklahoma City, Oklahoma

EAST

Gold - RCM&D, Baltimore, Maryland

Silver - Cleary Insurance, Boston, Massachusetts

Bronze - USI, Valhalla, New York

WEST

Gold - The Liberty Company Insurance Brokers, Woodland Hills, California

Silver - Heffernan, Walnut Creek, California

Bronze - LP Insurance, Reno, Nevada

SOUTH CENTRAL

Gold - BevCap Management, McKinney, Texas

Silver – G&G Independent Insurance, Fayetteville, Arkansas

Bronze - Glenn Harris & Associates, Oklahoma City, Oklahoma

MIDWEST

Gold – Powers Insurance & Risk Management, St . Louis, Missouri

Silver – The Bulow Group, Tinley Park, Illinois

Bronze – Ansay & Associates, Port Washington, Wisconsin

SOUTHEAST

Gold – Granite Insurance, Granite Falls, North Carolina

Silver - Energy Insurance, Lexington, Kentucky

Bronze - Robins Insurance, Nashville, Tennessee

Thevotes are in for the 2022 Best Independent Insurance Agency to Work For survey by Insurance Journal.

Employees in 2022 highlight ed the importance of compet itive salaries, employee ben efits, training and education, resources, and other employee perks as drivers of satisfaction in the workplace. But it’s not all about compensation and benefits. Happiness in the workplace has a lot to do with people, relationships and the agency’s culture. Employees of the winning agencies cite high personal job satisfaction; rate their relationships with their immediate boss or supervisor as positive; and express a high opinion of their agency’s owner or principals and their agency’s reputation in the community. Many employees are grateful

the best agency owners support local charities and the community. Employees are grateful for the opportunities their agencies provide for them to participate in community service. Employees take pride in working for agencies that are respected and hold strong values and ethics. Employees appreciate the generosity of their agency owners in sharing revenues in the form of bonuses and trips.

The best agencies also provide ways to help their employees grow — by giving them the tools and technology they need, and supporting them with education, training, annual performance reviews and, in some cases, mentors. The survey results clearly show employees value this support.

As expected, the winning agencies score high for overall

employee benefits including wellness programs and for working conditions including work-from-home options, flex-time and other alternative schedules that allow employees to embrace work-life balance.

The best agencies to work for also provide employees with a strong sense of purpose in their profession and deliver a workplace environment where employees feel supported wholeheartedly by manage ment and their peers. Many of the employees say they feel like family in their agencies.

Insurance Journal wishes to thank the 3,500 customer service representatives, account managers, producers, managers and other agency staff who took the time to nominate their independent insurance agency in this year’s survey.

Special Report: Best Agency to Work For

Overall

Community is Key to Employee Happiness

By Jahna Jacobson

Itmight seem impossible to build a sense of community and culture across more than 35 offices, nine states and about 700 employees, but the team at INSURICA makes it happen.

Community culture was a top rave given to the company by the dozens of employees who nominated the firm as the Best Insurance Agency to Work For.

And the unified voice made INSURICA Insurance Journal’s Best Agencies to Work For Overall Winner for 2022.

“We are a relatively large firm with colleagues spread over more than 30 branch offices, but our community culture and collaborative efforts are seen and felt across the orga nization,” said President and CEO Mike Ross. “We have the resources of a large broker yet maintain a family atmosphere.”

INSURICA, headquartered in Oklahoma City, Oklahoma, is among the 50 largest insurance brokers in the United States and is currently the 24th largest privately held independent agency in the country with offices located throughout Oklahoma, Alabama, Arizona, Arkansas, California, Colorado, Florida, Mississippi and Texas. According to its website, the company places over $1 billion in annual premiums for its clients.

“We have a ‘community’ culture in which our colleagues, clients and carrier partners are connected,” Ross said. “Our colleagues enjoy collaborating and innovating together. We

work hard, but we also have fun doing it.”

One nominating employee said: “We have a special team with a culture of empathy and caring one another. We pull together in times of need.”

Making sure employees have the resources they need for life/ work balance is critical to that mission.

“One of the many good qual ities about INSURICA is their family values,” an employee said. “Management always willing to accommodate for school activities for employees with children. Always under standing with the employee who has to take care of their aging parents. These are just a few things that touch my heart and makes me proud to be a part of such a great company.”

The sense of community extends to the communities the agency serves as well.

“I love that our agency is ALWAYS there to give back to the communities we live in,” an employee said. “We have a program in the INSURICA community called U-Serve. All the branches give back in their communities with donations such as clothing, food or just time for those in need. Branches are also ready to serve with community building projects for those in need or cleanup projects. It makes a huge difference when you gather a group of people to serve, and they are all Happy to be there. INSURICANS are always happy to serve our communities.”

The company offers an extensive array of benefits

and perks, including annual bonuses, generous PTO, 100% paid STD/ LTD, concierge services, paid tuition benefits, office massages, periodic lunches/treats, annual family get-together, customer service week celebration, holiday celebrations, paid volunteer time off, paid bereavement leave, paid family leave for birth/adoption/foster of a child, phased retirement program, generous medical/dental plans, 401k with generous match, referral bonuses, and games for monthly gift cards.

“When COVID first hit, man agement of INSURICA provided constant feedback to all of the offices in terms of procedures and guidelines to follow,” remarked one nominating employee. “They very quickly got all employees set up and effectively working from home (no small feat from an IT standpoint). They continued to be a resource as we all dealt with the various waves that came and went.”

The company also offers extensive training opportu nities, paid designation/certi fication training and remote work options. The company continues to offer remote work for most positions post-COVID, and the policy has become a great recruiting incentive, Ross said.

“Listen to your employees to learn what they are looking for in a great place to work,” Ross said. “Being a Best Place to Work is not a finite goal, it is continuous, and it takes all of us working together, being innovative, to continue to achieve that high bar.”

“To be recognized as a great place to work by our colleagues is fantastic!” he added “However, it is our colleagues who make this a great place to work and who are deserving of the recognition.”

INSURICA Oklahoma City, Oklahoma

Arlington colleagues volunteering during a Habitat for Humanity day.

Special Report: Best Agency to Work For

EastRCM&D Offers ‘Total Package’ for Clients, Community and Employees

By Andrew G. Simpson

Beinga Best Agency to Work For is about more than how well an insurance agency treats its employees. At RCM&D, employ ees take obvious professional pride in how the agency treats its customers and community as well.

To the extent being the best is about how the agency treats them, employees tend to gauge that in terms of how the agency helps them do their jobs.

“RCM&D is the total package. The company prides itself on growth, not only the growth of the company but, of each employee and their contribu tions,” said an employee, using the “total package” terminology others echoed.

Baltimore-based RCM&D, which was founded in 1885, is Insurance Journal’s 2022 Best Agency to Work for in the East. RCM&D has additional MidAtlantic offices in Harrisburg and Philadelphia, Pa., Richmond, Va. and Washington D.C. Since 2021, RCM&D, which was founded in 1885, has been part of Unison Risk Advisors, which was formed with the merger of RCM&D and the Oswald Companies. In addition to its regional affiliation with Unison, RCM&D is also a member of Assurex Global, a network of leading brokers around the world.

These affiliations with Unison and Assurex, along with the firm’s technology and risk services, are among the firm’s

accomplishments that RCM&D professionals cite in praising the agency’s commitment to giving its customers and employees the tools they need to succeed. The agency provides “deep resources and solutions for a wide array of organizational risks and insurance needs. I truly believe in our team, our deliverables and the partnerships we’ve developed with so many different organizations,” a key employee wrote.

Several long-time employees said they take pride in the evolution of RCM&D from a traditional agency to a modern, well-rounded business offering a broad array of services. “The knowledge, capabilities and professionalism of RCM&D staff, and the ability to pull together creative programs, services and risk management options for our clientele, is unmatched in the Mid-Atlantic region. I am proud to work for this firm and appreciate the opportunity I’ve had to learn and grow beside many well-credentialed, professional staff,” one employee wrote.

RCM&D employees appreciate that the agency’s experts and management are accessible. “There is never any problem with contacting any one in higher positions to help answer questions or assist with anything needed for the client,” one employee wrote. Another cited the firm’s quarterly open door meetings where everyone gathers to discuss the business: “There is a positive work envi

ronment and ethics in all departments which I can see when walking throughout the floors and in common areas.”

As for serving the community, employees take special pride in the agency’s Regatta, an annual sailing event now in its 27th year that raises funds for local non-profits by bringing together employees, business partners, and corporate sponsors and culminates with a celebration on Baltimore’s scenic Inner Harbor. This year’s beneficiaries included Camp Rock, Empower4Life, Martha’s Table, Mt. Washington Pediatric Hospital and World Central Kitchen.

The Regatta is the biggest of RC&D’s multiple commu nity events. “Our community involvement is top notch,” says one employee noting that oth ers include the Stuff the Train Toy Drive, two “free” volunteer days for employees, and the Kennedy Krieger Festival of

Trees.

When it comes to how the agency treats them, employees praised several individual benefits including flexibility in work hours; liberal paid time-off; an inclusive and diverse culture; and support for professional education. The firm recently provided stipends to employees to help them deal with rising inflation.

They also cited a fair and collaborative performance and compensation review process. The appreciation is not only from long-time employees. “As a new producer, the firm’s will ingness and set me up with a three-year runway showed me their belief in me. This allows me to take those three years to build a solid book of business for myself and the firm,” added a fresh recruit.

RCM&D Baltimore, Maryland

Special Report: Best Agency to Work For

Midwest

How Trees, Bee Hives Help Powers Insurance Deliver Best in Class Service & Employees

By Ezra Amacher

Forevery client added by Powers Insurance and Risk Management, the St. Louis, Missouri-based agency plants a sapling. When Powers adds 250 new clients, they plant a large tree in an urban area. With every 1,000 new clients, they farm a beehive to help preserve the bee population and protect the community’s agriculture from colony collapse disorder.

The initiative, called “Plant a Tree. It’s Good Policy,” is one way that Powers gives back to the community it serves. The agency’s benevolent culture extends to its employees, which explains why it is the Midwest Gold winner

for Insurance Journal’s Best Agency to Work For award.

Employees filled out an anonymous survey to nomi nate their agency for the award.

“Our organization and our team members are highly engaged,” Powers told Insurance Journal. “Our synergistic climate is the perfect example of everyone working together to achieve the same goal, which is a huge part of why we feel we have been successful in our quest for providing the best service and products available.”

Powers’ culture stems from a rigorous hiring process that seeks out the best available talent in the industry. Powers uses the Kolbe test, which assess whether candidates are

a good fit for the organization.

The COVID-19 pandemic spurred on the implementation of remote work and hiring, which has expand ed the agency’s talent pool.

“We now are attracting and retaining the best talent that we previously may not have been able to hire due to loca tion restrictions,” Powers told IJ. “Remote work opportunities require effective management of these employees, and we believe we are succeeding with this new initiative based upon our strong communication skills and training efforts.”

Powers and its sister compa nies have grown significantly in 2022, adding 21 new employees with plans to add five to eight new positions before the year is over.

One reason potential employees are drawn to Powers is the agency’s assortment of benefits. The agency offers fully paid health insurance with a maximum of $500 out of pocket deductible, dental and vision insurance are matched (includes domestic partner ships for those of the same or opposite sex), and short-term and long-term disability and life insurance at no charge to our team.

Powers also invests in its employees by hosting team-building events and incentivizing workers with extra paid days off if they

achieve enough positive reviews.

“The benefits they offer are second to none and they’re constantly working to give us even more benefits,” one employee wrote. “It’s the only agency that I’ve ever worked for that puts family first and allows true work/life balance.”

Another employee recalled a time when a colleague needed to move, and the entire commercial lines came together to help them.

“That team goes to lunch as a group regularly and are incredibly close as a group,” the employee wrote.

Founded in 1991, Powers remains a family-owned and operated agency with four members of the Powers’ family serving in active roles. Pierce W. Powers, Jr. is the chairman of the board, JD Powers is company president and CEO, Henry Powers is chief growth officer, and Elizabeth Powers is chief relationship officer.

While the company contin ues to grow in size and capa bilities, Powers keeps its family core values intact, Powers said. “We believe this has helped create and cultivate a strong company culture and positive team morale, something we are extremely proud of.”

Powers Insurance and Risk Management St. Louis, Missouri

The Powers family.

Special Report: Best Agency to Work For

South Central

BevCap Management Inc. McKinney, Texas

BevCap Employees Feel Heard, Appreciated

By Jahna Jacobson

AtBevCap Management LLC, leadership listens. And they don’t only lis ten, they implement the ideas that come from the employees working on the frontlines with clients every day. The result? Efficiency, teamwork, and better service. Employees feel heard. And happy.

Dozens of employees made their voices heard by nomi nating BevCap for Insurance Journal’s Best Insurance Agency to Work For Gold Award in the South Central region.

“We feel very honored and blessed to have such support ive team members” said Lynn Coor, BevCap partner and COO. “They are our number one asset, and all have contributed so much to our long-term success.”

BevCap Management, headquartered in McKinney, Texas, is an insurance program manager with a focus in alternative risk for business professionals. The firm also provides personal insurance to individuals and families.

With 43 employees serving a wide range of clients, the company focuses on employee satisfaction, knowing that pas sion for their work is passed on to their clients and customer service.

“Just remember that happy employees are the key to your agency’s success,” Coor said. “Happy employees care more about the organization, provide higher productivity and promotes teamwork within the office.”

“We’ve learned through our Partner Survey that a good home and work life balance is most important for their happiness.”

The company’s anonymous annual Partner Survey encourages both positive and negative employee feedback that the company builds upon each year. Operational improvements stemming from the survey include monitoring P/C Account Manager work loads and shift accounts, and investment in ideas to make operations more productive and profitable.

“Our agency has had a lot of growth in the last couple years,” said one employee. “Investments have been made to upgrade our agency management system and other technology has been added that helps us all be more efficient.”

Another added, “Workloads are monitored, and new team members are added PRIOR to workloads becoming unmanageable.…It helps us to provide the best service to our customers as possible. I am very proud of the agency I work for and would not want to be anywhere else!”

The company has also listened to employees when improving medical benefits packages, and now pays for employee-only PPO medical, telemedicine, advanced imag ing, elective surgeries, basic life and LTD, and has lowered plan deductibles. Beginning in January, the company will implement a company 401(k) contribution.

In the wake of COVID, there

are also plans for more popular teambuilding events, which include a crawfish boil, bowling party, Halloween and holiday parties and working together on communi ty service projects.

“We’ve tried to have more of a family environment at BevCap where employees can build long-term relation ships with each other,” Coor said. “We feel that it’s most important for our employees to have a good home and work life balance, so they are excited and happy to come to work.”

Performance reviews are another valuable tool for align ing company and employee goals, said another employee.

“I like that my organization finds value in (performance reviews), utilizes them to promote new growth opportu nities and goals, and has us do a self-evaluation as well,” said one nominating employee.

BevCap has a quarterly meeting with all the staff where one employee receives the Beyond Excellence Award for their hard work, dedication and is recognized for the con

tributions they’ve made to the success of BevCap that quarter.

“We also try to make sure we have open communication with our staff, so they know how the agency is performing and any changes in staffing or direction of the company,” Coor said.

Flexibility has been key as the BevCap team returns to the office in a post-pandemic world. Before COVID, the company began offering a pop ular one-day-per-week workfrom-home option for some employees. Today, employees have the option to work from home two to three days per week. Some employees still work from home full time to accommodate medical needs.

“It’s a matter of balancing employee needs and keeping the valued sense of camarade rie in the office,” Coor said.

Special Report: Best Agency to Work For

Southeast

Commitment to Employee Development Helps Sets Granite Insurance Apart

By William Rabb

TheBest Agency to Work For in the Southeast for 2022 is North Carolinabased Granite Insurance Agency, an organization that is such a great place to be employed that one worker called it “life changing.”

“Granite Insurance and its team is beyond supportive, ready for adversity, respects change and sacrifice — but most importantly shows you respect and treats you with what you’re worth!” said Zach Goans, associate account man ager at Granite, in an answer to Insurance Journal’s survey this year.

Granite, with four offices around the state, is led by CEO Cameron Annas, President Chase Keller and CFO Neil Annas. The agency, licensed in all 50 states, has 33 employees and has been around for almost 90 years. Insurance Journal received a large number of responses from Granite workers, giving the agency one of the high average scores on employee satisfaction ratings.

An emphasis on teamwork and respecting employees seems to be the key to Granite’s continued success.

“What really sets Granite Insurance apart is our commit ment to the development of our team on both a personal and professional level,” CEO Annas said.

“We’re hyper-focused on leadership training. We believe the best way to serve our clients is to ensure that each of

our team members perform at the highest level possible.”

Agents and other workers at the agency agree.

“The culture that the man agement team has established is incredible,” said Chris Faber, marketing coordinator.

“They strive to empower every employee and client to reach success. Granite also has adapted to the times and incorporated an awesome flexwork program, allowing their employees to work remotely as life changes.”

Said account manager Kara Miller: “GIA spends most of its time trying to see how it can make its employees' work and personal lives better. From the top down, every single person here is invested in making this a place you WANT to come to every day and you WANT to put your best foot forward for.”

Annas had this advice for other agencies: “It’s super easy to overcomplicate this. The success of every part of your business is dependent upon your team. Treat your team members accordingly.”

Granite was founded in 1936 by Dr. A.D. Abernathy, a dentist and community leader in Granite Falls, North Carolina, according to the agency website. In 1957, Floyd Annas and his wife Theresa purchased all outstanding stock in the agency. Some 33 years later, in 1990, Neil and Lou Anne Annas purchased the agency from Floyd and Theresa.

In 2005, Granite joined the Keystone Insurance Group. It now focuses on personal and commercial property lines but also writes for some niche industries, including adventure and entertainment operators; sports leagues and clubs; haunted attractions; contractors; manufacturers; trucking and transportation; and senior living facilities.

Through the years, even during the COVID-19 pandem ic, the agency has looked for opportunities, Cameron Annas said.

“The business environment during the pandemic provided us with a very real opportu

nity to refine our culture of accountability,” he said. “Of course, there were challenges. That wasn’t all bad though. We were intentional about identifying the opportunities within the challenges.”

This approach enabled the organization to weather the storm and come out the other side stronger, more agile, and better prepared to do business in the post-pandemic world, Annas said.

Other employees heaped praise on the agency. When asked about performance and salary reviews, Ruthie Rivers, the adventure and entertain ment risk consultant, said:

“I am a producer so I don't have much to say on the topic of salary reviews. I make what I earn,” she said. “But perfor mance reviews and check-ins are phenomenal. I feel like I have an abundance of auton omy in my work, but when I need support or guidance it is never lacking and is always well-informed, enthusiastic and encouraging.”

Granite Insurance Agency Granite Falls, North Carolina

CEO Cameron Annas

Granite Insurance Team

Special Report: Best Agency to Work For

West

The Liberty Company Promotes Peace of Mind

By Don Jergler

Weare different.” That comment says about all one needs to know about why The Liberty Company Insurance Brokers took home Insurance Journal’s Best Agency to Work For – West award.

The firm won Gold because more than 100 employees at the agency took the time to fill out nomination forms and make comments to vote for their agency, giving it high marks for its compensation practices, and how it treats employees.

“We are one of the fastest growing privately owned agencies in the U.S.,” wrote the employee who commented on the agency being different. “Our mission statement and company culture spell out what makes us special as follows: Our mission is to promote peace of mind with great care.

We do this by building a culture based on our core values of integrity, excellence, caring, kindness, fairness, teamwork, good feelings, and fun. Our cul ture guides our daily practices and inspires our community to be their best in both their personal and professional lives.”

The firm has more than 800 employees across the nation and reports revenues of roughly $170 million. The agency maintains its flagship offices in the state where it originated, in Woodland Hills, California. However, the firm recently made its official headquarters in Gainesville, Florida.

“We’ve really worked to cultivate a culture of appreciation,” Johnson said. “At the end of the day, we all like to feel appreciated.”

Bill Johnson, CEO, founder and chairman

Johnson, who said the company may hit $200 million in rev enue by year’s end, acknowledged the firm’s growth played a role in the positive feelings that employ ees had about their workplace. However, his focus was on how the company treats its employees.

consideration for employee’s welfare.”

Bill Johnson, Liberty’s CEO, founder and chairman, said the company strives to practice “heart-centered leadership.”

“My personal intention for this company is that it be a place where the people here can be healthier and happier and pursue their entrepreneurial dreams, and the company is in service to those things,” he said.

Many comments from employees on their nomina tions offered both the compa ny’s employee-friendly culture and its growth prospects as reasons they believe it is the best agency to work for.

“I think the Liberty Company is poised to change the entire way insurance brokerages operate,” another employee wrote. “The entrepreneurial atmosphere presents the opportunity for there to be new ways of achieving success within the insurance marketplace. I think using the wellness approach of allowing employees to focus on improving themselves through ‘Dream Circles’ during work hours is a great way to show

As part of its wellness platform, Liberty implemented “Dream Circles,” in which employees come together in groups with Anthony Dippolito, the firm’s chief wellness officer. The purpose is connection, and to discuss what one’s dream life looks like both personally and professionally, as well as to support each other in creating those dreams.

Peace of mind is top of mind at the firm based on the comments.

“I have never seen an agency, or any business have an owner who cares so much about the well-being and happiness of its employees,” another employee wrote.

Another wrote that “Liberty is a place where there truly are no limits!”

“It is a place and culture where people can realize their entrepreneurial dreams and live happier and healthier lives,” the employee added. “A place where you are accepted for who you are and encouraged to be your best version possible. Liberty’s culture is all people focused, believing that if you take care of your people, they in turn take care of their clients, and are happier and healthier resulting is greater produc tivity and realizing superior performance in all metrics that matter.”

The Liberty Companies Insurance Brokers Woodland Hills, CA

Bill Johnson, CEO, founder and chairman (left), and Tony McIntosh, managing partner (right), addressed Liberty’s partners during the firm’s 2022 Partner Summit Sept. 18 to 20 in Santa Monica, California.

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Idea Exchange: Talent

Cultivating a Corporate Culture that Transcends Locations

Throughout the past few years, orga nizations have continued to evolve in response to shifting environments and priorities. Now, as insurance organizations are establishing more permanent plans for moving forward and operating long term, it’s important to explore how a corporate culture can best translate to the new working reality.

company’s everyday operating principles, rules, organizational charts, employee perks, performance management plans and much more – ensure you have a consistent North Star.

Look at traditional key factors through a new lens.

your leaders’ ability to effectively connect with employees and promote candid and ongoing two-way communication. If your company previously had an open-door policy, how can that be recreated virtually?

By Mike Abate

According to The Jacobson Group’s recent Q3 2022 Insurance Labor Market Study, conducted in partnership with Aon-Ward, 84% of insurance carriers are planning to continue offering hybrid work long-term. In today’s environment, team members commonly span across geographic locations and are primarily connecting via computer screens — with many never having met in person. To cultivate a culture that effectively unites employees at all organizational levels and locations, traditional tactics must be reviewed and reevaluated.

Define how culture looks in your organization.

At its core, culture encompasses the values, beliefs, shared assumptions and norms of a group. It’s necessary organi zations review how these foundational elements are reinforced and woven into the current working environment. This starts by defining what culture looks like in your company or department and how it supports your organization’s larger vision and goals.

Depending on your organization, this exercise may include reviewing existing strategies, or it could mean starting with a blank slate. What does your company value? How has this been reflected in your work environment in the past? Is that approach still relevant in the current environment? Culture plays out in your

Once you have an understanding of your organization’s culture, explore how it is felt among employees and infused into their daily activities. Prior to the pandemic, many aspects of culture manifested in visual displays including company cele brations, dress codes, office environment and design, and more. Review traditional components of culture and examine ways they can be built and experienced in a more virtual world.

Leadership. Strong corporate culture starts with leadership. Ensure your team leaders and managers understand the role they play in propelling it forward.

This includes arming them with the tools, knowledge and development opportunities to drive your company’s culture in their everyday interactions and behaviors, while clearly articulating cor porate values to their employees. Invest in

Communication is key in a hybrid environ ment and these individuals are a critical link between what your organization is aiming to accomplish and those who live and breathe the culture every day.

Work-life Balance. For most insurance organizations, the pandemic redefined parameters around work-life balance. Past norms no longer apply, as professionals have become accustomed to new routines and schedules. Whether your employees are in-person or remote, explore where you can offer flexibility and contribute to their personal fulfillment, while also supporting your organizational and depart mental goals. You may consider providing flex hours, letting individuals start their days earlier or later, or placing boundaries around contacting employees outside of their regular working hours.

Employee Recognition and Appreciation.

While your organization likely had employ ee recognition programs in place prior to the pandemic, not all forms of recognition

will successfully translate to the remote environment — especially those that were previously more visible rewards or public displays. Take the time to evaluate how your approach to employee appreciation can be most impactful across all work environments, rewarding behaviors that support your values and contribute to a positive and productive workplace.

In addition to recognition from leaders, consider how you can promote peer-topeer recognition and provide all employees with the ability to formally give kudos to their colleagues. Complement formal programs by fostering an environment that encourages sharing wins and highlighting collaboration on a regular basis. Provide the space for managers to feature top performers from their teams in a way that is visible to other areas of the organization.

Community Building. Without shared break rooms, hallways and other commu nal spaces, impromptu relationship-build ing conversations happen much less frequently. However, a sense of belonging and community is as important as ever. Intentionally foster and facilitate these relationship-building conversations among

your teams in a way that accommodates a hybrid environment. The opportunity to share creative ideas and knowledge with one another is easily lost in virtual settings. Dedicate time to fill this gap, inviting individuals to share what is going well and what could have gone better in various scenarios, while exploring lessons learned and opening themselves up to advice, insight and informal mentoring from team members.

Depending on your team’s comfort level and geographic restrictions, meeting in person once a month or quarter can also greatly contribute to establishing strong working relationships. If this is not possible, consider how you can help indi viduals build their networks, both inside and outside of your team. This could be as simple as encouraging virtual lunches and coffee breaks, bringing in virtual guest speakers, celebrating milestones, or creat ing topic-specific team chats to ensure no one is unintentionally working in a silo.

Equitable Opportunities. Proactively identify and understand potential issues and concerns that may arise, working to find solutions that help everyone feel

they are valued as equal parts of the team. For instance, how can you ensure those working remotely receive equal exposure to those who are physically in the office? What can they do to ensure they are not left at a disadvantage regarding career mobility? Approach professional develop ment, social opportunities, meetings and other activities through a lens that accom modates dual working environments and encourages all individuals to actively participate.

A strong sense of corporate culture is vital for connecting employees and maintaining engagement at all levels. Spend the time to evaluate what is and is not working, seek out feedback from employees, and commit to continual improvement. As you establish long-term working arrangements, it’s essential to focus on creating a sense of belonging and shared purpose — even in physically disconnected environments.

Abate is a managing director for the executive search practice of The Jacobson Group, a global provider of talent to the insurance industry. Phone: 312-8840429. Email: mabate@jacobsononline.com.

‘Culture plays out in your company’s everyday operating principles, rules, organizational charts, employee perks, performance management plans and much more – ensure you have a consistent North Star.’

Idea Exchange: Art and Collectibles

Navigating Insurance for Today’s Contemporary Art Scene

By Muys Snijders &

Asthe pandemic recedes, the art market is getting back to business. Record-breaking auction sales, breakthrough success of young contemporary artists, and a range of new material and media used in artists’ creations are hot trends dominating the art scene today.

Art collecting has also diversified in recent years, broadening the appetite of the collector class. Some are new to the market, drawn to artists and the art world

through social media. Others are lifelong collectors looking to diversify or build their collections. We also see collectors who simply want to decorate a space, or who look at art as a way to support artists and communities. Some are just looking for an investment opportunity. This broadening demand, combined with a trend toward reappreciation and value adjustment of formerly underrepresented or up-and-coming artists has brought about a well-rounded

boost in the art market.

We receive a lot of questions from these collectors about buying and owning art, includ ing how to insure their works. Navigating this new normal in art can be complex — whether you’ve been collecting your whole life or you’re a new collector eager to invest.

Proof of Value

Many fine art insurance policies are written on a scheduled or agreed-value basis, which can often include

Kyle McGrath

a percentage increase in coverage that accounts for market fluctuation. This provides collectors with some coverage for appreciation in value over the course of the policy term; however, in the case of contemporary art and emerging artists, where there’s potential for values to double on the secondary market, this coverage enhancement may not always be sufficient to cover the full value of the work.

It is critical that collectors have a pulse on the market for the artists that they collect so they know when it may be necessary to reappraise or to consider increasing insurance coverage, based on appreciation. Proof of that value, such as recent invoices and up-to-date appraisals, are necessary to maintain a proper collections management system. In addition, having access to trusted professionals can only help collectors in protecting their precious objects, as they can advise when it might be appropriate to consider reappraisals based on recent market shifts.

New Material

The use of materials in artwork continues to evolve, leading to new considerations for care and valuation. Last

century saw the use of new pigments and acrylics. Today, we’re seeing video displays and digital components in works of art. There are also any number of materials that can be used as 3D elements in a piece.

With the emergence of new materials and media being used by up-and-coming artists, it is also important to note that most fine art insurance policies contain an exclusion for grad ual deterioration and inherent vice, which means that if the object will deteriorate naturally over time or bears character istics that could lead to its own destruction, the damage will likely not be covered by insurance. As a collector of emerging artists, it’s critical to ask about the materials being used, understand how they might withstand the test of time, and learn what options might exist for restoration and repair.

Ensuring that a client’s collection is properly insured through a dedicated fine art and collections policy is not only beneficial from a financial standpoint, but it also provides access to specialized experts (such as conservators, restorers, packer/shippers), in the event of a loss.

Financial. When buying con temporary art, it is important to conduct significant due diligence on the work, includ ing its value and ownership history. After an acquisition, we strongly advise collectors to keep all documentation related to their purchase, audit the market to understand trends and fluctuations, and obtain an annual appraised value for the work.

used, how will it be installed, and how will a piece be packed, are key questions to consider with your insurer.

Emotional. Most artworks are unique and “one of a kind.” In the event of a loss, a collec tor should make sure that all works are insured to value and that experts who can support restoration or replacement efforts can be consulted.

How to Protect a Contemporary Art Collection

When collecting art, the risk exposures are generally threefold: financial, physical and emotional.

Physical. We recommend consulting with experts on placement or where the art collection is stored — consider if there is climate control, UV or light exposure, how the work will be displayed, and the potential for the risk of theft, fire or water damage. Does the location have risk of a catastrophic event — hurricane, wildfire or flood? Consideration also should be given to the medium — how will the mate rials wear and tear. Also, if the collection will travel, whether for conservation efforts or to an art fair — what transit will be

Top Five Takeaways

If working with art collector clients or insuring assets in this space, be sure to:

1. Understand the artwork’s current market value for retail replacement purposes

2. Keep records of what the collector owns

3. Plan for emergencies

4. Insure the artwork on a dedicated collections policy

5. Turn to a trusted advisor.

Snijders is head of Fine Arts and Collections Services at AIG Private Client Group. McGrath is head of Collections at AIG Private Client Group.

The use of materials in artwork continue to evolve, leading to new considerations for care and valua tion.

Idea Exchange: Minding Your Business

How to Lower Agency Value

Asthe M&A frenzy continues, buyers keep pushing the envelope when it comes to agency value. The private equity firms were initially paying top dollar to their first acquisition of a large, well-run firm platform acquisition. But now, many follow-up acquisitions are offered similar deals.

What is Value?

When an agency owner sells their business, what are they really selling? The purchase price may include some value for receivables, retained cash, desks, office equipment, cars and computers. However, the main value of an insurance agency comes from its intangible assets.

those agencies’ value.

There are several factors that distinguish a high value agency from a low value agency. Owners of low value agencies are often caught by surprise because they did not understand how the manner in which they run their business would adversely impact the value of their agency.

Low Productivity

The profitability of any agency is directly related to compensation costs. These expenses are typically two-thirds of revenue. Therefore, low productivity and overstaffing will lower profits and thus lower the agency value.

date. Employees that fail to keep up should be put on notice and fired if their perfor mance does not improve sooner rather than later.

No Producer Contracts

There are many excuses not to have a producer contract: they are expensive to draft, they cause ill will between parties, they are easily broken, etc. All of these excuses have some element of truth in them. The important point is that the lack of producer contracts will lower the agency’s value because not having contracts increase the risk associated with the agency’s continued earnings potential.

Agency value is based on the cash flow that the business can generate. A buyer is looking for an existing business, its current clients, employees, and other factors. These are assets that any business has and is called goodwill or “going-concern” value.

By Catherine Oak &

There is a clear pattern of the compo nents contained in a high value agency versus a low value agency. Both agencies may appear to run relatively smooth. They may even both provide the owners with a comfortable living. However, an astute buyer will look beneath the veneer to analyze how each agency is running.

Buyers are interested in the sustainable earnings that the firm can generate year after year. Both firms may have similar earnings under the current structure and with the current owners.

In a high value agency, the potential earnings will remain long after the current owners sell. Low value agencies have a high risk that the earnings will not con tinue, so the buyer will heavily discount

Small agencies are impacted more by overstaffing than larger firms. If an agency needs only the equivalent of two and a half full-time CSRs but they have three fulltime CSRs, they are 20% overstaffed. A large firm could have 33 CSRs but only need 30. The extra three CSRs accounts for only a 10% overstaffing condition.

It is not unusual for an agency to have a long-term employee that did not grow with the firm. That employee often works inefficiently or performs work that is redundant to other employees. The owner keeps that employee around out of a sense of loyalty.

Loyalty in this case does not necessarily mean it is in the best interest of both par ties. If the seller insists the buyer keep all the employees, then the buyer can only afford to pay a lower price. A buyer who inherits extra employees, without any stipulation to retain them, most likely will fire them after the sale in order to generate a profit so they can pay the seller. Either way, a lower value for the business or the firing of unnecessary employees after the sale, someone loses due to the seller’s management style.

Agency staff should always be well trained, to allow them to grow with the ever-changing business environment. Productivity standards need to be set and adhered to. Performance reviews should be given annually at their anniversary

Two topics all producer contracts need to cover are compensation and ownership of the business. Some agencies may also have a deferred compensation plan for the producer as well. Excessive producer compensation will certainly lower the agency value, since it will lower profits.

A buyer is also interested in a clear understanding of who owns the business. Agencies without contracts for their producers might feel that the agency owns the business. But it often happens that the producers do not agree, and they may eventually walk away with their books of business.

The agency then has little or no recourse since there is no formal agreement. The bottom line is that you cannot sell what you do not own. Buyers often make their purchase offer contingent upon having all producers sign a contract, which also must stipulate that the agency owns the business.

Account Ownership and Deferred Compensation

Agencies that allow the producers to have ownership in their book of business must understand how that impacts value. If the book is owned entirely by the producer, many buyers will not include it in the revenue stream or might pay the producer directly as part of the deal. This is because the agency owner does not own

Bill Schoeffler

that business, the producer does. If the producer threatens to walk, the buyer may end up paying for that business twice.

It is better for agency value when the agency retains full ownership in the business and then sets up a deferred compensation or vesting plan to allow the producer some equity for their efforts. This eliminates any dispute on ownership while still satisfying the producer’s need for building “equity” and a retirement plan.

Producers Tied to All Accounts

Many owners and producers see virtue in the fact that they know all their clients and have an excellent relationship with each one. There is a difference between knowing your clients and having your clients dependent upon the owner or producer for most things.

Agencies whose clients are tied to the owner/producer are less desirable to a buyer than an agency whose clients don’t have a strong bond to the owner/producer. Or at least there is also a strong bond between the client and the service staff in high value firms.

A buyer needs to know that there will be a smooth transition of ownership without the fear of losing key accounts. If the seller is really tied to their accounts, a buyer

may require the seller to stick around a few more years than the typical two or three years, to assist in the transfer of the relationships.

Some deals have a retention component. If the departure of the owner or producer also means the departure of the clients, the earn-out to the seller will dramatically decrease.

It is better to have the client look to the service staff for their day-to-day service needs, rather than the owners or producers. Owners and producers should mainly be involved with the initial sale, remarketing of medium to large accounts and problem solving for major issues.

Only the service staff should handle the small accounts. Accordingly, a producer should be paid renewal commission only for medium and large accounts. Keep in mind that small and large are relative. A large regional broker might consider accounts under $5,000 in commission as small. Whereas a smaller firm might set the small account limit at $1,000 in commission.

The key to value is profit. If a firm is paying 30% commission to a producer for small accounts that the producer does not even work on, then that 30% is pulled from the bottom line.

The Last Word

There are many factors that a buyer con siders when looking at buying an agency.

The main consideration is the ability to create and sustain a profit. Most of the active national buyers today only do deals with agencies that generate at least a 25% to 30% or more in profits.

Most buyers are interested in well-run firms that would enhance their current business situation. Agencies that are poor ly managed have fewer interested buyers and often get low offers for the business.

A good credo to follow is to always run a business as if it is going to be sold today. Streamlined operations have fewer problems and generate better bottom line profits. These agencies and their owners will make more money now and in the future.

Oak is the founder of the international consulting firm, Oak & Associates based in Sonoma, Calif. and Bend, Ore. Schoeffler is an associate of the firm. The firm specializes in financial and management consulting for independent insurance agencies and wholesalers, including valuations, mergers, acqui sitions, clusters, sales and marketing planning as well as perpetuation planning. The website is www. oakandassociates.com and she can be reached at 707-935-6565 or by email at catoak@gmail.com.

Idea Exchange: Technology

Collaboration: DNA of Product Development

By Barry Rabkin

There are several customer-facing facets an insurance company shows its custom ers. These include: the agents and brokers that interact with customers; the various administrative service communications which respond (or don’t) to customer queries; the internal and third-party claim adjudicators working with clients to manage loss events; advertisements on traditional and social media; and insurance products that carriers offer (or remove from) the marketplace.

This column focuses on the final facet mentioned above. While shown last on my list, insurance products represent a very critical facet that customers see of the carriers with which they decide to conduct commerce. For customers and insurance companies, insurance products represent an (in)tangible expression of a carrier’s willingness to accept or reject various types of risk at a point in time.

For me, that means an insurer’s risk appetite, as viewed through the lens of the product mix it offers the market, should always be in a state of constant redefinition. The flux of products should be shaped by the continually shifting risk landscape; the changing needs of customers, producers, and the company itself. Product development succeeds when the new (or enhanced) product simultaneously gets and keeps customers, satisfies the expectations of producers, but most importantly, generates profit for the insurance company.

Collaboration Is Essential for Product Development

The very criticality of developing prod

ucts mandates the presence of collab oration among and between insurance professionals. If collaboration is not already present in the DNA of an insurance company, then the company needs to discover whatever magical elixir exists to create the collaboration DNA for the firm.

However, whether the DNA exists or not, the creation of an insurance product is not an easy task. With the collaboration DNA, product development will be difficult. Without collaboration, the devel opment process will be close to impossible to accomplish.

Why?

Product development requires a blend of ideas, people, time, and other resources including: insurance experience and expertise; knowledge of the changing risk landscape; understanding of the firm’s evolving current and target markets needs; conceptual ideas regarding what customers want both now and in some future period (to be determined by the product development initiative) for cover; the current and potential manner in which all the involved stakeholders want to consume and potentially require service for the product; financial estimation of the potential administration and claim management service expenses; and, as importantly, the authority and willingness to say “no” to a product idea.

A Diverse Portfolio of People and Functionalities

An insurance company is a many-siloed, multi-functional, geographically dis persed creature. The product development process may have to include participants from many, if not all, of these areas.

Beyond the company, most if not all, the

various participating firms in an insurer’s many and varied ecosystems (e.g., law firms, repair shops, rehabilitation firms, hospitals, property restoration firms) are also many-siloed and multi-functional.

One ongoing challenge of product development is solving how to gather the right professionals together to meet at the right place at the right times.

A second challenge is conducting the product development process with insurance professionals working within the insurance company, within its various value chains, or throughout the insurer’s participating ecosystems.

A third challenge of product develop ment is managing the coming-and-going activities of professionals occuring in both synchronous and asynchronous time periods.

An Illustrative Product Development Process

The three challenges I mentioned above must be resolved in an environment where the product development is a nev er-ending process. Moreover, I believe the product development process is governed by three principles:

• No product is permanent, whether it already exists in the marketplace or is in some stage of development.

• No specific set of stakeholder needs takes precedence, except for the primacy of the insurance carrier’s requirements to generate profitable premium.

“It is the long history of humankind (and animal kind, too) that those who learned to collaborate and improvise most effectively have prevailed.” – Charles Darwin

• Insurance product development should meet the changing needs of the various stakeholders by making it easy for the stakeholders to conduct insurance commerce in a manner each stakeholder expects.

To make a product development process real, here is an example of a product development process framework that has six major steps.

The steps shown encompass various activities, departments that probably should participate, and requisite systems used in the process.

Note that neither the steps nor the activities are meant to exclude other steps or other activities for each step (whether shown or not shown in the visual).

Regardless of the differences between the framework in the visual and other frameworks, there are five major points that insurance firms need to consider when developing products:

Many functional departments are involved, as shown in the visual.

The ideation step is an iterative step. The activities within this step will not be “one-and-done,” but instead loop among and between the people collaborating to create a new product idea.

The entire series of steps are themselves part of a larger iterative loop. Information should be extracted from the post-launch step and fed back to the ideation step to feed ideas for enhancing the product just launched or create new products.

The product development process is part of other insurance business processes,

including the insurer’s underwriting, rat ing, quoting, core administration system, reinsurance, accounting, and customer/ intermediary firm service processes.

Product development collaboration ses sions and final product forms and related material should be accessible from CRM, broker management systems, and, where available, producer productivity systems.

Enabling the Product Development Process

The three challenges are essentially pulling together insurance professionals from different functions, different com panies (between and among participating ecosystems), different geographies, and different time periods to satisfy a coherent objective.

One solution that enables the product development process, and simultaneously resolves the three challenges, is the use

of a mobile device app that is a web-ac cessible, cloud-enabled digital hub to generate, consume and share a wide range of information in a collaborative manner.

This information includes new or enhanced policy ideas, rate and/ or actuarial calculations, approved policy forms, policy contractual elements (i.e., terms, conditions, restrictions), product coverage elements, compliance requirements, reinsurance requirements, target-market opportunities, marketing or sales campaigns, advertising, branding, conversations, pictures, and video.

More specifically, professionals involved with product development, whether from within the insurance company or through out its participating ecosystems, need a solution that supports, at a minimum:

• Face-to-face, click-to-chat, click-to-call, and IM interactions between two or more people (perhaps even communicating and collaborating within the metaverse?)

• Data, rules, algorithms, template, and document creation, editing, sharing, annotation, and storage

• Storage of all the communication threads in each product development collaborative session, including documents and data generated and accessed throughout the development process for each product

• Search of and access to information (including documents and data in each product development collaborative

on page 45

Content influenced by and excerpted from Rabkin’s book titled, “From Stone Tablets to Satellites: The Continual Intimate but Awkward Relationship Between the Insurance Industry and Technology” published on June 28, 2022, by Wells Media Group.

My New Markets

Small to Medium-Sized Businesses

Market Detail: Rushmore Underwriting Managers LLC offers commercial insurance for small to medium-sized businesses throughout the United States. Rushmore concentrates on property, casualty, pack age, inland marine, cargo, auto, excess and professional lines of business. The firm is a wholesale distributer as well as a program administrator with authority to make underwriting decisions and customize coverage options. Available coverages include general liability, property, package, inland marine, cargo, builder’s risk, owners and contractors protective liability, auto, professional, umbrella and excess liability, and garage. Has pen; appointment required.

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Contact: Jonathan Yanoff, Jonathan.yanoff@ rumins.com, 561-277-3930

Owner-Operator Insurance for the Trucking Industry

Market Detail: NSM Insurance Group’s True Transport Insure (TTI) provides high-performance owner-operator insurance programs, along with coverage for motor truck cargo and a growing list of risks in the trucking industry. TTI works with multiple A-rated carriers to provide robust coverage for fleet sizes ranging from five to 3,000. TTI’s insurance management platform, TrueAdvantage, automates and manages the administrative process for agents and insureds, from start to finish — enabling efficiencies and delivering added value. Owner-operator coverages include physical damage, non-trucking liability (bobtail), occupational accident with contract liability, major medical and mini-med options, workers’ compensation and member-owned group or single parent captives. Motor truck cargo coverages include pollutant cleanup, reloading expenses, trailer interchange, debris removal, spoilage/freezing and additional inland marine coverage. $10,000 minimum premium; appointment required; has pen.

Available Limits: Not disclosed.

Carrier:  Not disclosed, admitted, non-ad mitted, rated A+ by A.M. Best.

States: All 50 states plus District of Columbia.

Contact: NSM Insurance, nsmmarketing@ nsminc.com, 800-970-9778.

Hunting Lease Coverage Program

Market Detail: Breckenridge Insurance has a new hunting lease program that offers comprehensive coverage for insureds with top-quality competitive rates and tailored for their specific insurance needs. Coverage includes liability from ATVs and tree stands for hunting.

Available Limits: $1 million per occur rence, $2 million aggregate; fire damage liability — $100,000; medical expenses — $5,000. No deductible. Appointment required.

Carrier: Not disclosed.

States: All states except Alaska, Hawaii and New York.

Contact: Breckenridge Insurance, solved@ breckis.com, 855-728-8822.

Recreation & Leisure

Market Detail: Smart Choice Express Markets offers coverage for amateur sports leagues, attractions, boats and marine rec reation, bowling alleys, camps, fitness and exercise centers, golf courses, motor and power sports, swimming pools, trampoline park and jump zone, and travel across the US/Mexico border. Express Markets offers independent insurance agents access to a broad portfolio of excess, surplus and specialty carriers. Agencies pay no fees to participate in Express Markets, and earn 100% of their commissions, paid directly from the carriers. Has pen; appointment required.

Available Limits: Not disclosed.

Carrier: Not disclosed.

States: Available in 43 states plus District of Columbia. Not available in Alaska, Delaware, Hawaii, North Dakota, Rhode Island, South Dakota and Wyoming.

Contact: Nick Golonka, ngolonka@ smartchoiceagents.com, 888-264-3388.

Homeowner Earthquake Insurance

Market Detail: Insurance Partners

Consortium Inc., a specialist insurance intermediary, offers a new stand-alone earthquake product for homes and com mercial buildings. Online portal available soon. Sign up now for appointment. $350,000 minimum premium; $20 million maximum premium. Has pen. Available Limits: Not disclosed.

Carrier: Lloyd’s, London; non-admitted. States: Georgia, North Carolina, South Carolina.

Contact: Karen Toler, karen@ipcins.com 252-241-9720.

Cyber

Market Detail: Dovetail Insurance offers an admitted cyber coverage program. Cyber liability and tech errors and omissions coverage available. Target appetite includes cryptocurrency, energy, healthcare, legal services, manufacturing, nonprofits, public sector, real estate and title, retail and e-commerce, technology. Appointment required.

Available Limits: Revenues up to $1 billion; limits up to $2 million bindable online; limits up to $5 million via referral.

Carrier: Coalition, admitted, rated A by A.M. Best.

States: Available in most states plus District of Columbia. Not available in Kansas, Kentucky, Louisiana, Maine, Montana, North Dakota, Vermont and Wyoming.

Contact: Jillian Glover, marketing@ dovetailinsurance.com, 803-255-8891.

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Idea Exchange: Technology

from page 43

session) in the development process of each product

• A library of policy forms finalized by the insurance company approved by regulators, including tags of each information element of every finalized and regulatory-approved policy form

• A library of regulations – both existing and proposed – for each jurisdiction in which the insurer wants to sell insurance, including tags for each regulation and jurisdiction

• Access on all major mobile platforms (iOS, Android, Windows)

• An audit date/day/time trail of each insurance professional’s activities described by the items on the list above.

At some time in the future, commercial property/casualty insurance firms might want to consider opening the product development platform to their clients’ risk managers or CFOs to enable them to con

tribute their needs and expectations about their own firm’s commercial P/C insurance product purchase and consumption needs.

Summing Up

Products are the lifeblood of an insur ance firm, whether the firm is a carrier or a distribution channel.

Products are also an embodiment of an insurance firm’s strategy and go-to-market approach. However, new risks constantly emerge in the market, and customer expectations continually change as to the way they want to conduct business with companies, regardless of industry.

Insurance products need to encompass the risks insurance firms are willing to accept and be suitable to the current and future ways the insurance firms conduct business.

The product development process will not support current or future commerce interactions unless the insurer has a robust collaboration DNA.

A Baker’s Dozen Product Development Questions

There are a host of questions that insurance executives should ask themselves concerning product devel opment. Above is a “baker’s dozen” product development questions that could form a beginning set that I sug gest executives responsible for product development ask themselves and their colleagues.

Rabkin is an insurance industry author and com mentator with nearly four decades of experience and more than 20 years of that as an insurance industry analyst. This is part of a series of articles influenced by and/or excerpted from his book titled “From Stone Tablets to Satellites: The Continued Intimate but Awkward Relationship Between the Insurance Industry and Technology.” The book, published by Wells Media Group, is available at: https://www. ijacademy.com.

Idea Exchange: Ask the Insurance Recruiter

Is Our Company at a Recruiting Disadvantage?

The

talent war is volatile. In response, you may have noticed how many “first time” situations in 2022 you went through to hire someone. The first time hiring 100% remote. The first time paying an account manager a signing bonus. The first time making a counteroffer.

Creative hiring strategies help attract top talent, but they can only do so much if you still have other barriers in your process. Many insurance organizations are their own worst enemy when it comes to recruiting. Take a moment to review this list of issues that put you at a recruiting

disadvantage. Be honest. Ask yourself, “Are any of these things going on at our company?”

Ignoring the Remote Work Movement

Insurance Journal’s June 2020 article, How P/C Insurance Pros Are Faring Working From Home During Pandemic, cited their parent company, Wells Media Group’s, Coronavirus Survey. The article stated, “18% of insurance agency/broker respondents were already working from home prior to the pandemic.” It went on to say the number spiked during quarantine to as high as 51% for agency professionals

and 70% for those working for insurance companies.

Being late to this party is a recruiting death sentence. Now, I’m not saying throw caution to the wind and hire anyone everywhere. I support the idea that for legitimate reasons you simply cannot allow work-from-home. However, too often I see insurance organizations ignore the topic, which:

By Mary Newgard

• Creates frustration with HR and hiring managers;

• Confuses job seekers; and

• Jeopardizes your employee retention.

Skip ahead if your company has guide lines in place for 100% remote workers, but if not, read no further until that happens. It’s that important to your recruiting success.

No Bonus Plan for Technical Positions

“Agency owners and managers (51.4%) responding to this year’s Agency Salary Survey reported an increased demand for higher pay in 2021,” Insurance Journal’s February 2022 Agency Salary Survey pub lication stated. One agency owner wrote in the survey: “There is a demand for higher salaries, sometimes by 20% or more.”

Your recruiting is disadvantaged if you do not offer bonus plans for CSRs, account managers and account executives. Try to recruit an experienced insurance pro fessional who is accustomed to receiving variable compensation, and you’ll need to compensate by offering a much higher salary. This creates pay compression, which I highlighted in October 2020’s Ask the Insurance Recruiter. Given that — “I haven’t seen an account manager make a job change in 2021 for any less than a 15-25% raise” — you’ll pay even more to overcome the lack of a bonus.

Drug Testing, Background Checks & References

Speed is the #1 factor that influences hiring success. Drug tests, background checks and references create delays, which lead to candidate drop-offs, counteroffers and reneges.

Even if you say, “Well, we make contingent offers to buy time to complete background checks,” or “It only takes a couple days for us to get the results,” there is no scenario where:

a) A job seeker considers contingent and formal offers to be equal; and

b) A candidate doesn’t get snatched up by a company with a better offer in that time.

When is the last time your company evaluated its due diligence practices? Here is the reason I don’t like when agencies

conduct drug and background checks:

“It’s what we’ve always done” is the only answer executives have when asked why the practice still happens.

How can you hire remote workers in states where marijuana is legal yet still require a negative drug test as a condition of employment?

Speed is the #1 factor that influences hiring success.

Do you drug test employees onboarded via an acquisition? If not, then how do you explain testing certain new employees but

not all? Inconsistent hiring practices lead to big HR problems down the road.

Do you allow redos? Believe me when I say that I’ve seen hiring managers tell candidates after a failed test, “I just need you to pass it. Take it one more time.”

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

INSURANCE INDUSTRY CHARITABLE FOUNDATION

Helping communities and enriching lives, together.

Insurance Industry Charitable Foundation (IICF) is a unique nonprofit that unites the collective strengths of the insurance industry to help communities and enrich lives through grants, volunteer service and leadership. Having contributed $42 million in community grants and over 300,000 volunteer hours, to hundreds of charities and nonprofit organizations, IICF continues to reinvest locally where funds are raised for greatest community impact. #insurancegivesback

Register your Week of Giving volunteer team and sign up for projects at: volunteer.iicf.org

IICF Week of Giving

October 8–15, 2022

Be a Part of Something Greater

Since 1998, IICF has hosted its annual Week of Giving, the largest ongoing volunteer initiative in the insurance industry. Through eight days of volunteer projects and service, both in-person and virtual, the IICF Week of Giving is a culmination of community volunteerism throughout the year by the insurance industry.

Midwest Division

Kelly Hartweg

Phone: (773) 991-2149 khartweg@iicf.com

Northeast Division

Betsy Myatt

Phone: (917) 544-0895 emyatt@iicf.com

Southeast Division

Sarah Conway

Phone: (214) 228-2910 sconway@iicf.com

Western Division

Melissa-Anne Duncan

Phone: (714) 870-1084 maduncan@iicf.com

UK Division Wendy Wilder

Phone: +44 (0) 7469 392 453 wwilder@iicf.com

October 3, 2022

Accelerant National Insurance Company 1209 Orange Street Wilmington, DE 19801

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has request ed is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

October 3, 2022

Farmers Life Insurance Company 243 N. Peters Rd. Knoxville, TN 37923

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Life , Accident, and Health business Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has request ed is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

October 3, 2022

Great Bay Insurance Company

8025 Black Horse Pike, Suite 400 West Atlantic City, NJ 08232

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has request ed is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

October 3, 2022

Next Insurance US Company

251 Little Falls Drive Wilmington, DE 19801

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has request ed is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

October 3, 2022

Motors Insurance Corporation

500 Woodward Avenue, 14th Floor Detroit, MI 48226

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has request ed is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

October 3, 2022

First National Title Insurance Company

2400 Dallas Parkway #200 Plano, TX 75093

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has request ed is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

October 3, 2022

EquiTrust Life Insurance Company

222 West Adams Street, Suite 2150 Chicago, IL 60606

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Life, Accident, and Health Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has request ed is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

Advertisers Index

Applied Underwriters

www.auw.com 2 , 3, 52

IICF www.iicf.org 51

Intact Specialty www.intactspecialty.com 7

M.J. Hall & Company www.mjhallandcompany.com W1

Method Insurance www.methodinsurance.com 8, 9

Nationwide Mutual www.nationwide.com 35

PIA of Texas www.piatx.org SC4

Safety National www.safetynational.com 5

Summit www.summitholdings.com SC3, S1

Surplus Lines Association of California www.slacal.com W2

Texas Mutual www.texasmutual.com SC1

Closing Quote

How Charitable Giving Can Solve the Industry’s Talent Problem

By Brian Hetherington &

five years or more, according to the Deloitte Global 2022 Gen Z and millennial survey. Not only do employees want to give back and make an impact, giving back also builds trust with the community and is good for business.

Insurance has always been a business of relationships, and to be successful you need to understand your community and customers. Rolling your sleeves up to support a playground cleanup or opening your wallet to sponsor a Little League team are ways to help build meaningful connections.

Foryears, the insurance industry has battled a looming talent crisis, and the threat of that crisis is becoming more urgent.

According to the U.S. Bureau of Labor Statistics, more than 50% of insurance workers will retire by 2036 and currently less than 25% of the workforce is under the age of 25. At the same time, global turbulence from the pandemic, inflation, and more, have exacerbated challenges. Fortunately, there is a way our industry can address this talent issue and help address the needs of our communities.

To move forward and ensure our communities continue to thrive, we must expand chari table giving and volunteerism within our industry — from Main Street agents to the largest insurers.

The Value of Philanthropy

Millennials and Gen Z workers satisfied with their company’s environmental and social footprint are more likely to stay with their company for

The industry has a heart that beats for its community. The more we integrate that into everyday business, the more we’ll evolve. Numerous oppor tunities are available for those who want to make a difference. Consider the following to get started.

Get to know your community. Making personal connec tions and learning about local competitors, potential partners and the community at large can broaden your network and highlight important issues. Attend local events, such as food bank meal servings, busi ness openings or fundraisers and make connections.

Connect with your team. Strong employee commu nication is essential. Here at Newfront, I spoke with one of our staff members about her passions and learned she loved animals. Consequently, we sponsored a Mutt Strut to raise money for shelters and help dogs find homes. Consider taking a survey to see what causes your team members like to support. This will help

you find opportunities for employees to stay connected with their passions, their work and their team members.

Partner with other organi zations. Consider collaborating with organizations dedicated to philanthropy. For example, at the Insurance Industry Charitable Foundation (IICF), we offer opportunities to get involved, such as our annual Week of Giving, a celebration of the industry’s dedication to giving back through volun teering and service projects throughout the year.

Step Up as an Individual. At IICF, we launched a Global Membership program, which provides individuals in the industry a new opportunity to advance social good. IICF membership provides access to a valuable networking platform, connecting members to executives and other profes sionals, along with volunteer projects and educational and mentoring programming.

Getting involved is critical to fueling our workforce with the right talent and preparing our industry for the future. Showcasing these efforts is also important. Millennials

and Gen Z workers actively promote their volunteerism, and many look to work with and patronize businesses that do the same. Post on social media, using the appropriate hashtags, and work with local media to broadcast the work your company’s been doing.

Moving Forward

This is an answer to our talent woes. Now is the time for the insurance industry to reinforce the importance of purpose in our work and personal lives to make a difference. Showcase that our industry is one that is and always will be rooted in giving back — and being there for people and our communities in their time of need. Doing good will attract the best talent, the best customers and the best partners.

Hetherington is president of Newfront Insurance, a board member of IICF’s Western Division and a Founding Circle member of the new IICF Global Membership. Duncan is the executive director of the Insurance Industry Charitable Foundation’s Western Division and leads the IICF Global Membership program.

Melissa Anne-Duncan