Insurance Journal West 2023-07-03

PUT THE HITCH IN YOUR PITCH to reimagine your cross-selling techniques!

At Foremost®, we’re hooked on putting the Hitch in Your Pitch! Are you familiar with this tried and true cross-selling technique? It’s simple ...

Ask your customer if their vehicle has a hitch. If it does, ask what they’re towing and where they’re going. Maybe they’re towing a motorcycle, travel trailer, boat, personal watercraft or snowmobile. And maybe they’re taking their toys to a vacation home. Whatever towable risks come up, you’re in luck because you can likely insure them with Foremost!

UBI-Use Rises as Customer Satisfaction Declines

Auto insurance rates are rising and that is leading consumers to look at usage-based insurance (UBI) options to help defray some costs.

About one third of auto insurance customers in the U.S. reported a rate increase in the past year, and this has led to the largest decline in customer satisfaction in 20 years, according to J.D. Power’s 2023 U.S. Auto Insurance Study.

Auto insurance customer satisfaction dropped 12 points to 822, down from 834 a year ago (on a 1,000-point scale). The decline, according to the report, is driven by lower satisfaction with the price customers pay for insurance, a factor that declined 25 points this year. The industry raised rates an average of 15.5% as insurers fight record high loss ratios.

“Overall customer satisfaction with auto insurers has plummeted this year, as insurers and drivers come face to face with the realities of the economy,” said Mark Garrett, director of insurance intelligence at J.D. Power.

Auto insurers lost an average of 12 cents on every dollar of premium they collected in 2022 — the worst performance in more than 20 years.

Among customers who received a bill in the mail and paid in full via credit card, nearly half (45%) said they noticed a price increase, compared with 28% of those who received a digital bill and made automatic recurring installment payments, the report stated.

Reactions to pricing increases varied, according to the survey.

Customers who reacted negatively included those who either rent their residence or do not bundle their home and auto insurance; are single car/ single driver households; are open to switching insurers; or those who have a lower perception of their insurer being trustworthy.

Notifying customers in advance through their preferred channel of communication (e.g., phone call from their agent), clearly explaining the reasons behind the price increase, and offering alternatives (like UBI) went a long way toward maintaining customer satisfaction, the report stated. It also showed a 137-point difference in price satisfaction between those experiencing an increase of more than $300 versus those experiencing an increase of $50 or less.

Participation in usage-based insurance programs more than doubled since 2016, the report found, with 17% of auto insurance customers participating in such programs.

Among new customers, UBI participation rates are high at 26%. And price satisfaction among customers participating in UBI programs is 59 points higher on average than non-participants.

There are still growing pains with UBI programs, JD Power says. Thirty-three percent of customers currently using UBI have been on the program for less than one year, and the accuracy of data collected by UBI technologies is a concern, with just 38% of customers indicating that the information collected is “always accurate.”

For more information on the J.D. Power study, visit: JDpower.com.

Chairman of the Board Mark Wells | mwells@wellsmedia.com

Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

ADMINISTRATION / CIRCULATION

Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com

Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com

Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com

EDITORIAL

V.P. of Content Andrea Wells | awells@insurancejournal.com

Executive Editor Emeritus Andrew Simpson | asimpson@wellsmedia.com

National Editor Chad Hemenway | chemenway@insurancejournal.com

Southeast Editor William Rabb | wrabb@insurancejournal.com

South Central Editor/Midwest Editor Ezra Amacher | eamacher@insurancejournal.com

West Editor Don Jergler | djergler@insurancejournal.com

International Editor L.S. Howard | lhoward@insurancejournal.com

Content Editor Allen Laman | alaman@wellsmedia.com

Assistant Editor Jahna Jacobson | jjacobson@insurancejournal.com

Copy Editor Stephanie Jones | sjones@insurancejournal.com

Columnists & Contributors

Contributors: Nora Buli, Nina Chestney, Anthony Dolce, Keith Savino, Lee Shavel, Christoph Steitz

Columnists: Tony Caldwell, Catherine Oak, Mary Newgard

SALES / MARKETING

Chief Marketing Officer

Julie Tinney | jtinney@insurancejournal.com

West Sales Dena Kaplan | dkaplan@insurancejournal.com

Romeo Valdez | rvaldez@insurancejournal.com

Kelly DeLaMora | kdelamora@wellsmedia.com

South Central Sales

Mindy Trammell | mtrammell@insurancejournal.com

Southeast and East Sales (except for NY, PA, CT)

Howard Simkin | hsimkin@insurancejournal.com

Midwest Sales

Lisa Whalen | (800) 897-9965 x180

East Sales (NY, PA and CT only)

Dave Molchan | (800) 897-9965 x145

Advertising Coordinator Erin Burns | eburns@insurancejournal.com

Insurance Markets Manager

Kristine Honey | khoney@insurancejournal.com

Sr. Sales & Marketing Coordinator

Laura Roy | lroy@insurancejournal.com

Marketing Administrator Alberto Vazquez | avazquez@insurancejournal.com

Marketing Director Derence Walk | dwalk@insurancejournal.com

DESIGN / WEB / VIDEO

V.P. of Design

Guy Boccia | gboccia@insurancejournal.com

Web Team Lead Josh Whitlow | jwhitlow@insurancejournal.com

Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com

Web Developer Terrance Woest | twoest@wellsmedia.com

Web Developer Jason Chipp | jchipp@wellsmedia.com

V.P. of New Media

Bobbie Dodge | bdodge@insurancejournal.com

Videographer/Editor Ashley Waldrop | awaldrop@insurancejournal.com

ACADEMY OF INSURANCE

Director Patrick Wraight | pwraight@ijacademy.com

Online Training Coordinator

George Jack | gjack@ijacademy.com

Andrea Wells Vice President, Content

U.S. Insurers Hit Hardest by Inflation: Triple-I Study

U.S. insurers have paid more than their counterparts worldwide to repair and rebuild damaged properties and vehicles due to inflation since 2018, according to an executive briefing conducted on behalf of the International Insurance Society (IIS).

Inflation and Insurance Replacement Costs was developed by the Insurance Information Institute (Triple-I) and analyzes the relationship between overall inflation and insurance replacement costs for property and casualty (P/C) insurers in six of the world’s largest insurance markets between 2018 and 2022: Canada, the European Union (EU), Japan, Korea, the United Kingdom (UK), and the United States (U.S.). P&C insurers offer auto, home, and business coverage. Both the IIS and Triple-I are affiliates of The Institutes. Within this five-year timeframe, the U.S. experienced the highest cumulative inflation rate (20.7%), followed by the EU (20.3%), the UK (17.7%), Canada (17%), Korea (11.9%), and Japan (3.3%), the analysis found. The U.S. also saw the highest cumulative inflation rate increase for insurance replacement costs (30.4%) between 2018 and 2022, Triple-I determined.

“Quantifying the relationship between inflation and insurance replacement costs across national and regional P/C insurance markets can provide an additional framework to maximize insurance capital allocation, including reinsurance capacity, by seeking uncorrelated underlying economic fundamentals and insurance performance metrics,” wrote Michel Léonard, chief economist and data scientist, Triple-I, in the executive briefing. “Further, separating correlated and uncorrelated line-specific insurance replacement costs drivers can increase the ability to forecast line-specific performance metrics and provide added guidance to industry stakeholders, including regulators, seeking to maximize liquidity and solvency during times of economic stress such as the high inflation that characterized the COVID-19 pandemic and its aftermath.”

“This International Insurance Society executive briefing is one in a series from experts such as Dr. Léonard on issues that reflect the priorities across the global industry” said Josh Landau, president, IIS. “These briefings provide valuable analyses that help inform decisions and shape solutions for insurers worldwide.”

The executive briefing on Inflation and Insurance Replacement Costs offers insights into residential and commercial property insurance trends, as well as those being seen by personal and commercial auto insurers.

“Cumulative increases in property replacement costs were higher than overall inflation in the U.S., Canada and Japan,” Dr. Léonard wrote. “Conversely, overall inflation was higher than increases in property replacement costs in the UK,

the EU and Korea.”

The U.S., Canada, the UK and EU show different degrees of correlation with one another, the executive briefing states. Japan and Korea show no correlation with each other, or any of the other countries, the briefing reports.

“Cumulative increases in auto replacement costs were higher than overall inflation in the U.S., the UK, Canada, and Japan. Conversely, overall inflation was higher in the EU, while Korea saw auto replacement costs increase less than overall inflation,” Riley Conlon, research analyst and data scientist, Triple-I, added. Triple-I gathered economic data for each of the six insurance markets from national statistical reporting agencies to offer greater consistency across geographic boundaries.

Give up nothing Pay nothing Get a lot

Why do agents join Smart Choice?

• Agents that join Smart Choice retain ownership of their policies, period. That’s right, agents own what they already have, own policies they write in the future and give up nothing.

• Agents pay no startup fees, maintenance fees, or exit fees, ever. Agents are free to be as active with Smart Choice as they want – all while paying zero fees.

Partnering with Smart Choice gives agents the opportunity to grow their business without risking part of their business to do so! We help you get appointed with top-tier carriers that your customers and prospects want. Our Smart Start program enhances your efforts to expand your product offerings while supporting you in the underwriting process. We can get you access to excess and surplus carriers through our Express Markets program, so you don’t have to turn away potential clients. Plus, we have an entire team of experts to assist you as you grow.

And that’s why agents join Smart Choice!

$1

The amount the Archdiocese of St. Louis will pay to settle a lawsuit filed by a man who was sexually abused as a child by a priest who previously spent 12 years in prison for abusing another boy, an attorney for the victim said. The plaintiff had been an altar boy at Ascension Catholic Church in Chesterfield, Missouri. The suit alleged he was abused by the Rev. Gary Wolken starting in 1993, when the boy was in fourth grade, and continuing through 1995. The lawsuit said the plaintiff repressed memories until he was an adult. The man’s lawsuit, which did not use his name, was filed in 2018.

Figures

260,000

The approximate number of lawsuits against 3M subsidiary Aearo Technologies alleging 3M military earplugs caused hearing loss for veterans and U.S. service members that remain pending after U.S. Bankruptcy Judge Jeffrey Graham in Indianapolis rejected Aearo’s bankruptcy petition. Graham ruled the lawsuits against 3M and Aearo did not create any “impending” risk of insolvency, and there was no evidence that a settlement could not be reached outside of bankruptcy.

$398,500

That’s how much Washington Insurance Commissioner Mike Kreidler issued in fines against insurance companies and other entities for violations of state insurance laws and regulations. The total was amassed in April and May.

88,000

Pounds

That’s the new truck weight limit allowed on some Georgia highways, higher than federal regulations allow for interstate travel. State lawmakers this year approved a variance for the weight limits, which had been capped at 84,000 pounds. The change has been met with criticism by local officials, who worry that the heavier loads will mean more wear and tear on roads, and more severe accidents.

Declarations

Forever Suit

“These companies had knowledge that these chemicals cause harm and they still chose profit over people.”

— New Mexico Environment Secretary James Kenney explained the reasoning behind a suit against the manufacturers of so-called “forever chemicals,” commonly referred to as PFAS, seeking monetary damages to defray the costs of environmental monitoring and cleanups.

Blessed to Get Out

“Personally I feel blessed that we were able to get out of there, and I also feel really, really angry that it wasn’t taken seriously. … It almost just seemed like a disregard for human life for a petty $750 a month.”

— Trent Fuessel, 21, was one of several tenants at The Davenport to report safety concerns before the Iowa apartment building partially collapsed on May 28, leaving three dead. Tenants have begun filing lawsuits over the collapse, claiming that Village Property Management knew of structural defects to the building but did not act. Davenport city officials were aware of crumbling cricks and bulging walls at the building since at least 2021 and threatened to close some units, but the owner initially appeared to take no action. Fuessel had moved out before the building collapsed.

Changing Business Conditions

“As business conditions — such as emerging from the pandemic — change, so must business approaches,”

— Carly Kraft, a spokesperson for Farmers Insurance, said in an email to Insurance Journal after Farmers Group CEO Raul Vargas reversed a prior company decision to allow most workers to do their jobs from home by instituting a hybrid work schedule. Starting in September, employees within 50 miles of a Farmers office must come in to work at least three days per week. Kraft said with the change, “roughly 60% of Farmers employees will be hybrid, while other roles will be either virtual or in-office.”

Violence Against Healthcare Workers

“Workplace violence is an increasing problem for healthcare workers. The incident in this investigation is one of many recent attacks by patients against industry workers.”

— OSHA Area Director Mark Briggs in Houston said after the federal workplace safety agency determined that Houston’s Texas Children’s Hospital exposed employees who worked with patients with behavioral health issues to physical threats and assaults. On Nov. 10, 2022, an aggressive patient pulled a security officer to the ground by the hair and kicked them repeatedly in the chest and abdomen. The officer, who was responding to an alert, lost consciousness, was taken to the emergency room and hospitalized.

Camera-Toting Bears

“I have known that bear for a long time.”

— Mark Brault said regarding a lawsuit he and his wife, Carol, filed against the Connecticut Department of Energy and Environmental Protection (DEEP) claiming a bear with a camera is violating their Fourth Amendment right to be free from unreasonable searches and seizures. The Braults allege that DEEP tagged and placed cameras on bears in their area, including one known as Bear 119, which they observed on May 20 on their property with a video camera on its collar. DEEP acknowledges in its “Living With Black Bears” companion website that the state puts tracking collars and tags on bears but does not mention cameras.

Florida Roof Claims

“This form is required to combat fraudulent roof claims from continuing to impact loss results.”

— States a letter to Florida regulators explaining why Slide Insurance needed an unusual roof endorsement for homeowner policies that appears to bar coverage for wear and tear, as well as most roof damage that isn’t caused by a named storm.

Fitch: Hardening Commercial Lines Market to Continue Through 2023

This year will mark the fourth year of a hardening market for the commercial lines underwriting cycle, according to the latest US Commercial Lines Market Update released by Fitch Ratings.

The Council of Insurance Agents & Brokers’ (CIAB) commercial lines market survey indicates overall rates rose 8.8% in 1Q23, compared with 6.6% in 1Q22.

Underwriting performance for the commercial lines

market was up nearly two percentage points in 2022 with a 95.8% combined ratio, marking the fifth consecutive year of a combined ratio under 100%.

Boosted by socio-economic uncertainty during the pandemic, rate momentum was pushed even more by high inflation. Weak loss experience and higher reinsurance rates led to a rebound in pricing momentum this year in both property and auto segments.

Property rates rose by 20% in 1Q23, according to CIAB, due to

Insurance Costs Rapidly Rising for Rental Properties: S&P

The recent upticks in the frequency and severity of weather events has affected insurance premiums for rental properties. According to S&P Global Ratings, insurance is an increasing percentage of total expenses for rental properties and the trend is expected to persist.

The weighted average for property insurance was about $590.30 in 2022, compared with about $473.60 the year before and about $386.90 in 2020.

S&P Global Ratings analyzed 2020-2022 expense trends on 60 loans on U.S. affordable housing properties receiving low-income housing tax credits. The properties contain over 6,500 units.

“We expect property and casualty insurance premiums for commercial properties, including multifamily, will keep rising through 2023,” S&P Global Ratings said.

Properties with the largest increases in insurance expenses are located in the following markets:

large increases in reinsurance costs, while commercial auto moved 8.3% higher compared with 5.9% in 1Q22, the report noted, adding that general liability and umbrella rates continue to move upward.

Following large increases in the previous two years, directors and officers (D&O) liability and cyber risk experienced a sudden flattening of rate changes.

According to Fitch’s analysis, workers’ compensation posted the best product segment underwriting profits, with an average combined ratio of 89% for the past five years.

“Strong premium growth in 2022 from exposure changes, falling claims frequency and highly favorable reserve experience bolstered recent performance” in workers’ comp, the report stated.

On the other side of the coin,

the combined ratio for the commercial auto line worsened to 105 in 2022, up five points from 2021.

Even with higher commercial auto premium rate increases, claims severity tied to higher parts and repair costs and litigation exposures continue to challenge the line in 2023.

With an average hurricane season forecasted, catastrophe losses should run as expected, leading to a modest underwriting profit in 2023, according to the ratings agency, which projects a 97%–98% combined ratio for the commercial lines sector the year.

While the 10% growth in 2022 commercial lines net written premium (NWP) remained above historical norms, revenue expansion in 2023 will slow to 6%–7%, the agency added.

What’s your ?

Your clients have signature risk that defines who they are. Shouldn’t they have Signature Programs?

RPS Signature Programs is your go-to underwriting resource for agents and brokers looking for specialized coverage.

Your client’s risk is unique, different, a little out there — give us a try. Explore more than 40 niche programs, across multiple industries with a full suite of services — underwriting, distribution and claims management. RPSins.com/signatureprograms

Spotlight: Renewable Energy

Cyberattacks on Renewables: The Stuff of Nightmares for Europe’s Power Sector

By Nora Buli, Nina Chestney and Christoph Steitz

Saboteurs target a nation leading the world in clean energy. They hack into vulnerable wind and solar power systems. They knock out digitalized energy grids. They wreak havoc.

It’s the stuff of nightmares for European power chiefs.

Henriette Borgund knows attackers can find weaknesses in the defenses of a big renewables power company — she’s found them herself. She joined Norway’s Hydro as an “ethical hacker” last April, bringing years of experience in military cyber defense to bear at a time of war in Europe and chaos in energy markets.

“I am not sure I want to comment on how often we find holes in our system. But what I can say is that we have found holes in our system,” she told Reuters at Hydro’s Oslo HQ, declining to detail the nature of the vulnerabilities for security reasons.

Hydro is among several large power producers shoring up their cyber defenses due in significant part to Russia’s invasion of Ukraine, which they say has ramped up the threat of hacker attacks on their operations, according to Reuters interviews with a dozen executives from seven of Europe’s biggest players.

“We established last year, after the start of the Ukraine war, that the risk of cyber sabotage has increased,” said Michael Ebner, information security chief at German utility

EnBW, which is expanding its 200-strong cyber security team to protect operations ranging from wind and solar to grids.

The executives all said the sophistication of Russian cyberattacks against Ukraine had provided a wake-up call to how vulnerable digitalized and interconnected power systems could be to attackers. They’re nervously monitoring a hybrid war where physical energy infrastructure has already been targeted, from the Nord Stream gas pipelines to the Kakhovka dam.

“The cyber campaigns that Russia has been running against Ukraine have been very targeted at Ukraine. But we have been able to observe and learn from it,” said Torstein Gimnes Are, cybersecurity chief at Hydro, an aluminum producer as well as Norway’s fourth-largest power generator.

Gimnes Are said he feared a nation state could work with hacker groups to infect a network with malicious

software — though like the other executives he declined to divulge details on specific attacks or threats, citing corporate confidentiality.

Ukraine’s SBU security service told Reuters that Russia launched more than 10 cyberattacks a day, on average, with the Ukrainian energy sector a priority target. It said Russia had tried to destroy digital networks and cause power cuts, and that missile attacks on facilities were often accompanied by cyberattacks.

Russian officials have said that the West repeatedly blames Moscow for cyberattacks without providing evidence and that the U.S., as well as its allies, carry out offensive cyber operations against it. The Russian foreign ministry didn’t immediately respond to a request for comment on the power companies’ views or the Ukrainian SBU’s assertions.

The European power companies, as well as half a dozen independent tech secu-

rity experts, stressed that the digitalized and interconnected technology of the thousands of renewable assets and energy grids springing up across Europe presented major — and growing — vulnerabilities to infiltration.

“The new energy world is decentralized. This means that we have many small units — such as wind and solar plants but also smart meters — which are connected in a digital way,” said Swantje Westpfahl, director at Germany’s Institute for Security and Safety. “This networking increases the risks because there are significantly more possible entry points for attacks, with much greater potential impact.”

Triton Virus Shuts Plant

The possible effects of a cyberattack range from capture of sensitive data and power outages to the destruction of a physical asset, said James Forrest, executive vice president at Capgemini, which

advises companies on security risks.

He cited, in particular, the risk of malware such as the Triton virus, which hackers used to remotely take over the safety systems of a Saudi petrochemical plant in 2017 and shut it down.

While malware packages like Triton might be exotic algorithmic weapons, the most common mode of entry used by hackers looking to deliver them is more familiar, according to the executives and experts interviewed: via phishing emails designed to elicit data from employees like network passwords.

Such attacks are “more or less constant,” according to Cem Gocgoren, information security chief at Svenska Kraftnaet. The Swedish grid operator has roughly quadrupled its cybersecurity team to about 60 over about the last four years and is raising awareness among staff.

“We have to make them understand that we are under attack all the time. It’s the new normal,” Gocgoren said.

Hydro’s ethical hacker Borgund echoed this sense of a relentless barrage via phishing, which she described as the “first initial vector” of cyber-attackers.

Cyber Attack on Satellite

Traditional power plants like gas and nuclear typically operate on air-gapped IT infrastructure that’s sealed off from the outside, making them less susceptible to cyberattacks than physical sabotage, said Stephan Gerling, senior researcher at Kasperky’s ICS CERT, which studies and detects cyber threats on industrial facilities.

By contrast, the ever-growing number of smaller renewable installations around Europe run on diverse third-party systems that are digitally hooked up to the power grid, and are below the power-generation monitoring threshold set by safety authorities, he added.

This kind of interconnectedness was demonstrated last February when a Russian cyberattack on a Ukrainian satellite communications network knocked out the remote monitoring of more than 5,800 wind turbines of Germany’s Enercon and shut them down, said Mathias Boeswetter, head of IT security at German energy industry group BDEW.

While the incident did not affect the electricity grid, it showed the escalating cyber vulnerabilities posed by the energy transition, he added.

Key to Hacking a Wind Farm

Hacking into a wind farm can be relatively easy.

Researchers at the University of Tulsa conducted an experiment by hacking into unnamed wind farms in the United States in 2017 to test their vulnerabilities, with the permission of the wind farm operators, according to a report on cyber threats to energy by risk consultancy DNV.

The researchers picked a lock

to gain access to a chamber in the base of a wind turbine, the report said. They accessed the turbine’s server and got a list of IP addresses representing every networked turbine in the field. They then stopped the turbine from turning.

Driven by government efforts to wean nations off fossil fuels and double down on renewables, wind and solar power accounted for more than a fifth of European energy demand in 2021, according to EU data, a share expected to double by 2030.

E.ON — Europe’s largest operator of energy grids with a network sprawling 1 million miles — has also observed a rising risk of cyberattacks, its CEO Leonhard Birnbaum said at the group’s shareholder meeting in May.

The company has expanded its dedicated cyber staff to around 200 over the years, it said in emailed comments, adding the group had long recognized the issue’s relevance.

“Putting cybersecurity at the top of the priority list only after the start of the war in Ukraine and the energy crisis would have been a serious omission,” it said.

The European power sector as whole may be unprepared for the scale of the security challenge — that’s the view of many workers in the sector who say a lack of in-house cybersecurity skills was the biggest obstacle to effectively guarding against attack, according to a separate DNV survey of around 600 energy professionals carried out in February and March.

“Companies in the energy space, their core business is producing energy, not cybersecurity,” said Jalal Bouhdada, CEO of cybersecurity firm Applied Risk, a division of DNV. “This means that they must work diligently to secure every aspect of their infrastructure because malicious actors only need to find one gap to exploit.”

Copyright 2023 Reuters

People

National Global reinsurance broker Gallagher Re appointed Linda Johnson vice chairperson for its North American team.

Johnson will be responsible for producing new business for large casualty and structured reinsurance solutions across North America, with a focus on New York and Minneapolis. She will report to Tom Wafer, chairman, Gallagher Re North America.

She brings more than 30 years of industry experience to Gallagher Re. She previously spent 15 years at TigerRisk Partners, where she was a founding partner, executive team member, and most recently served as Global Legacy Solutions Practice leader. Prior to TigerRisk, Johnson was a senior executive with Aon Benfield.

Resilience promoted CJ Pruzinsky to global head of underwriting and sales. Previously, he led the underwriting team at the company’s managing general agency.

Pruzinsky will lead the introduction of the Resilience

Solution into the global cyber insurance market. This new role brings together both sides of the security and insurance ecosystem to enable Resilience’s broker partners to offer clients one solution for assessing, measuring, and managing their cyber risk.

Before joining Resilience in 2021, CJ spent more than 15 years underwriting specialty lines, including errors and omissions, media liability, and information security and privacy for middle-market and large clients.

East

Safety National announced that Dennis Zervos has retired as regional vice president –underwriting.

Zervos has spent over 30 years in the industry, joining the St. Louis, Missouribased company in 2009 in conjunction with the opening of Safety National’s New York, New York, office, where he served as a member of Safety National’s casualty leadership team.

Jeffrey Levans, vice president – insurance underwriting, will succeed Zervos to provide large casualty underwriting management and oversight of the Northeast and Mid-Atlantic territories. He brings 20 years of experience, including serving as Philadelphia branch manager and vice president at AIG, and vice president, commercial casualty at Everest Insurance.

Levans will operate out of Safety National’s Philadelphia, Pennsylvania, and New York regional offices.

Insurance producer trade organization Big I New York elected Edward F. Walsh as its chair of the board for the 2023-2024 term.

Walsh is chief executive officer of Walsh Duffield Companies, which has offices

in Buffalo, Rochester, and Medina, New York.

A past member of the Big I New York board of directors, Walsh has chaired the group’s finance committee and served as chair of the board of IAAC, the group’s member services division.

David Bodenstein of Mike Preis Inc. in Callicoon was elected to a one-year term as vice-chair and secretary-treasurer.

Big I New York members also elected and re-elected the following regional directors to two-year terms: Matthew Maguire of The Patrick Maguire Agency in Malone, east-north region; Douglas Benz of New Buffalo Insurance Agency in Buffalo, west-central region; Marianne B. McCormick of NBT Agency in Vestal, west-central region; Michael Zwas of The Insurance Marketplace in Rochester, west-central region; David H. Borg of Borg Risk Management Services in Huntington, metro-suburban region; and James Bastian of Advantage Partners Inc. in Great Neck, metro-suburban region.

Big I NY members elected Ronald Brunell of Acrisure LLC, The Signature B&B Cos. in Garden City, as national director. Brunell will serve a three-year term and represent Big I NY’s members at the national association. Brunell is a third-generation independent insurance agent.

Lane Rubin of The Excelsior Group in Valley Stream won a two-year term as member representative on the nominating committee. Rubin is a

past chair of the Big I New York board.

FCCI Insurance Group hired Phil Shepard to lead the expansion of its surety line of business into New England.

FCCI is now writing contract and commercial surety bonds in the six New England states — Connecticut, New Hampshire, Maine, Massachusetts, Rhode Island and Vermont.

Shepard has more than 30 years of experience in the financial industry, including extensive experience in contract and commercial surety for the past 15 years, most recently as bond manager and head underwriter at Colonial Surety Coy.

Shepard is based in Keene, New Hampshire. FCCI is headquartered in Sarasota, Florida.

Midwest

Valley Insurance Agency Alliance (VIAA), headquartered in St. Louis, Missouri, hired Trish Von Ruden as personal foundation coach.

Von Ruden will coach new and existing team members on property/casualty best practices and assist new alliance members with core technology implementation.

Von Ruden has over 20 years of insurance industry experience, including roles at Lang Insurance Agency, FBBInsurance and Bridges Insurance Agency.

Holmes Murphy named Amy Tanny as a vice president of property casualty.

Tanny will serve as a resource for client renewal placements and help develop carrier and wholesaler relations and strategy.

Tanny most recently spent 17

Linda Johnson

CJ Pruzinsky

Dennis Zervos

Edward F. Walsh

years with Cottingham & Butler as the vice president of the risk management practice.

Holmes Murphy is headquartered in Waukee, Iowa.

Matt McGrath joined Alliant Insurance Services’ Alliant Americas division as vice president.

Based in Chicago, McGrath will focus on designing, implementing, and managing comprehensive risk and insurance solutions for a diverse and growing client base throughout the Midwest.

McGrath has more than 10 years of experience working to build strong relationships that support ongoing business objectives through tailored solutions. He also has an extensive background in the financial sector, which adds additional depth to his role as an insurance professional.

Prior to joining Alliant, McGrath was a business development consultant with a large insurance and financial services firm.

UFG Insurance appointed Controller Kelly Allsup as an assistant vice president within corporate finance. She is based in Cedar Rapids, Iowa.

Allsup previously served as 2VP at Ameritras. Before that she spent 13 years at Transamerica, including several years as director, finance – capital and regulatory reporting. She began her career at State Farm.

South Central Stephens Insurance LLC, an affiliate of Stephens Inc., hired

Chris Bettina as a senior vice president within the property and casualty practice.

Bettina brings nearly 15 years of experience in the insurance industry that spans global insurance and captive markets. Bettina most recently served as a senior vice president at Arthur J. Gallagher & Co.

She is based in the Houston, Texas, office of Stephens Insurance. Stephens Inc. is headquartered in Little Rock, Arkansas.

Graham-Rogers Insurance promoted Jana Owens to operations lead with standard lines services (SLS). Additionally, Amanda Walker has been promoted to personal lines underwriter in the SLS division.

Owens comes from a background in standard lines services.

Before joining the team, she adjusted workers’ compensation claims at Claims Management, Inc. for over three years. Owens will continue her underwriting assistant role concurrently.

Walker’s insurance career began as an underwriting assistant for standard lines in December 2016.

Graham-Rogers is headquartered in Bartlesville, Oklahoma, and serves Oklahoma, Arkansas, Kansas, Missouri, Tennessee and rural Texas.

Southeast Virginia Christy has been named deputy commissioner of Property and Casualty at the

Florida Office of Insurance Regulation.

Since 2017, Christy has been the director of the Property and Casualty Oversight unit at OIR, and her affidavits and analyses of carriers’ financial straits have accompanied delinquency proceedings notices. Before leading the oversight unit, Christy, an attorney, was OIR’s chief assistant general counsel. Prior to joining the office, she was an assistant public defender in Florida.

Sheryl Parker has been named the state’s first deputy commissioner of Market Regulation, overseeing insurer reporting, examination and consumer protection requirements that were beefed up by recent legislation.

Parker has been OIR’s director of P/C market regulation since 2019, handling examinations and investigations of insurance companies. She started at OIR in 2012 and had previously worked at the Department of Financial Services. Before that, Parker was a licensed insurance agent in Florida and North Carolina.

Kansas City-based Lockton named Eric Collison, formerly with Liberty Mutual Insurance, as vice president and manager of Lockton’s Memphis office.

Collison also previously worked with Kemmons Wilson Insurance Group and is experienced in property/casualty

coverage for the hospitality, real estate and construction industries in the Memphis market. He will oversee the build out of a new Lockton P/C unit in Memphis.

West Island Insurance named Reid Hokama vice president, personal lines and marketing.

Hokama has nearly three decades of financial experience and most recently was vice president and investment strategy manager in Central Pacific Bank’s Wealth Management Group.

Other previous positions include director of research at Honolulu’s Tao Investments and senior financial analyst at Electronic Arts in California.

Island is headquartered in Honolulu, Hawaii.

PCF Insurance Services, based in Lehi, Utah, named Rocky Steele senior vice president of legal and compliance.

Steele oversees PCF’s legal and compliance function.

He has also served as co-founder and chairman of the board at Ascend Education and vice president of business development at TestOut Corp., and has worked in the natural resourcebased energy industry.

Kelly Allsup

Jana Owens

Amanda Walker

Virginia Christy Sheryl Parker

Eric Collison

Reid Hokama

Rocky Steele

Business Moves

firm, acquired the assets of E-Insure Services Inc. (EINSURANCE).

EINSURANCE is a web-based, direct-to-consumer lead generation platform leveraging its data-driven marketing techniques to power insurance sales.

According to Hub International, the acquisition bolsters Hub’s in-house capabilities to enhance its seamless omni-channel experience for the personal insurance brokerage platform VIU by HUB LLC (VIU), the company said.

Terms of the transaction were not disclosed.

National

Acrisure, TEn Insurance Services Ltd., Eleven Network

Acrisure, a financial technology and insurance company headquartered in Grand Rapids, Michigan, has acquired the UK-based insurance broker network TEn Insurance Services Ltd.

As part of the acquisition, TEn will go to market as Eleven Network.

The deal is expected to close in the near term, pending FCA regulatory approvals. Terms were not disclosed.

Since 2005, TEn has been providing services for industry professionals operating as appointed representatives (ARs). Initially, TEn was formed as a commercial insurance network, according to information contained on its website. It has since expanded to include private client and personal lines business as well.

The existing TEn management team, led by Dawn Derbyshire and Paul Sykes, will remain leaders within the Eleven Network.

Acrisure also has made senior hires and appointments to augment the management team and support them with execution of strategic plans.

These include: Andy Fairchild, former CEO of Broker Network, as chair of Eleven Network; David Bruce, former Marsh Commercial CEO and COO, as CEO of Acrisure Networks and COO of Acrisure UK; Simon Cooter, most recently Commercial Lines and High-Net-Worth director at Covea, who will be a non-executive director of Eleven Network; and Shahram Shayesteh, former Head of

Compliance at The Standard P&I Club, as chief risk officer for Acrisure UK Retail, including Eleven Network.

East

CBIZ, Pivot Point Security

Cleveland, Ohio-based insurance and financial advisory firm CBIZ Inc. acquired information security consulting firm, Pivot Point Security, of Hamilton, New Jersey.

Founded in 2001, PPS serves small and middle market businesses with certification and compliance preparation work for U.S. and international regulatory requirements, vulnerability assessments, penetration testing, and vendor risk management. It also provides consulting services such as outsourced virtual chief information security officers.

PPS has 30 employees and recorded $6.6 million in revenue in 2022, according to the announcement.

Terms of the transaction were not disclosed.

CBIZ provides accounting, tax, government health care consulting, transaction advisory, risk advisory, and valuation services as well as employee benefits consulting, retirement plan consulting, property/casualty insurance, payroll, and human capital consulting. It has more than 120 company offices in 33 states.

Midwest

Hub, E-Insurance Services

Hub International Limited, a global insurance brokerage and financial services

Headquartered in Chicago, the EINSURANCE team, including president and COO Dale Williams, will join VIU platform.

Hub, HORAN Associates

Hub International Limited has acquired the employee benefits assets of HORAN Associates Inc. and HORAN Smart Business LLC (collectively HORAN Health).

Terms of the transaction were not disclosed.

With HORAN Health, Hub creates a new regional hub to be called Hub Heartland. HORAN is one of the largest privately held insurance and financial services organizations in the Cincinnati Tri-State area.

HORAN Health’s nearly 120 employees in Ohio and Northern Kentucky will join Hub.

HORAN Health provides employee benefits solutions to more than 650 small and mid-size companies, covering thousands of lives. HORAN Health serves both corporate and individual clients in 48 states.

FMSI, Lauer & Lauer Insurance, Dubuque Insurance Services, Lillis Insurance Agency

First MainStreet Insurance L.C. (FMSI), an affiliate of TrueNorth Companies L.C., has added four new agencies.

Lauer & Lauer Insurance, based in West Union, Iowa, was FMSI’s first acquisition of 2023.

Established in 1954 and led by fourth-generation insurance agent, Michael Lauer, Lauer & Lauer comes to FMSI with a great client base, strong

reputation in their marketplace and a fine list of carrier partners.

The second acquisition of 2023 was a private fold-in to one of FMSI’s longstanding southern Iowa locations. The acquisition was completed privately.

FMSI also added Dubuque Insurance Services in Dubuque, Iowa.

A start-up agency dating back to the mid-1990s, Phil and Debbie Meyer have been a constant in the insurance landscape of this northeastern Iowa town.

Joining FMSI in ownership in this new venture is Thad Meyer, nephew to Phil and Debbie. Along with Phil and Debbie Meyer, Thad Meyer will continue to build on the legacy that was established 28 years ago.

Lillis Insurance Agency in Williamsburg, Iowa, also joined FMSI.

Since its founding in 1937, Lillis Insurance has been a constant presence in this quintessential Iowan town. Joining FMSI in ownership is partner, Dan Lillis.

South Central Ryan Specialty, Point6

Ryan Specialty announced it has signed a definitive agreement to acquire certain assets of Point6 Healthcare LLC (Point6), a distributor of medical stop-loss insurance, pharmacy solutions, and complex claims management on behalf of retail brokers and third-party administrators.

Point6 is based in Plano, Texas.

Terms of the transaction were not disclosed. The acquisition is expected to close in July.

Chicago-based Ryan Specialty is a service provider of specialty products and solutions for insurance brokers, agents and carriers.

Core Specialty Insurance Holdings, ANAT MGU/Stop-Loss

Core Specialty Insurance Holdings Inc., headquartered in Cincinnati, Ohio, and its subsidiaries will form a medical stop-loss division through the acquisition of the MGU/Stop-Loss business of American National Group.

Jim Stelling will join Core Specialty as the president of the newly formed

medical stop-loss division. Stelling was most recently the executive vice president, Health Insurance and Specialty Markets Group Operations at American National Insurance Co. and brings with him more than 20 years of experience in the industry.

The medical stop-loss division will maintain its presence in League City, Texas, after the closing.

The ANAT MGU/Stop-Loss business produced over $300 million of gross premium income in 2022, according to the announcement.

The transaction is expected to close in the fourth quarter of 2023.

ALKEME, Daugherty Insurance Group

ALKEME has acquired the Daugherty Insurance Group, a Sugar Land, Texasbased full-service insurance agency.

For over three decades, Daugherty Insurance Group has been focused on serving their loyal customers throughout Sugar Land and surrounding areas with a wide

variety of business — home, auto, life and health insurance solutions to individuals, families and businesses.

Based in Ladera Ranch, California, ALKEME helps insurance brokerages realize sustainable growth and success through the creative use of innovation, shared services, consultation and marketing.

West Ryan Specialty, ACE Benefit Partners

Ryan Specialty signed a definitive agreement to acquire certain assets of ACE Benefit Partners Inc. in Eagle, Idaho. The acquisition is expected to close in July 2023.

ACE Benefit Partners is a medical stop loss general agent founded in 2014. Chicago-based Ryan Specialty is a service provider of specialty products and solutions for insurance brokers, agents and carriers.

Closer Look: Green Building

Q&A: Consultant Stephen Bushnell Digs into Green Insurance Products

By Allen Laman

After learning about green buildings, after examining their structural characteristics that may not be covered by traditional insurance policies, and after studying green rating guides and the commissioning process, Stephen Bushnell came to a notable conclusion.

“It seems that green buildings would be better risks for us to write than a traditional building,” he thought.

Bushnell researched green buildings and helped develop early green insurance and risk management products in the early 2000s with Fireman’s Fund Insurance Co. He worked in insurance for 40 years before starting his current career as a consultant. He now works at Bushnell Mueller.

His green building hypothesis proved true. Fireman’s Fund tracked its loss experience, and year-after-year, the numbers showed green buildings were “significantly more profitable than traditional buildings that made up the rest of our book of business,” Bushnell recalled.

Below, Insurance Journal’s interview with Bushnell about the green insurance space has been edited for clarity and conciseness. Summations appear in italics.

Q: Tell us about your work. Bushnell: One of the things that I’ve done as a consultant is work with insurance companies to help them develop green products, green risk management programs,

improve their ESG and sustainability programs, take a look at climate change and climate risk and determine what the best response is.

Part of that is that we periodically survey the market, and we look at what insurance companies are doing for green products. And we have not seen much evolution beyond some people copying what Fireman’s Fund had done in 2013-14. That’s on the commercial side. That’s on the homeowner side.

The latest look at the market I did was about a year ago, and I did not see anything that was broader than what Fireman’s Fund had in 2014. And most of the coverages were narrower.

Q: What do you want people to leave this story knowing or understanding?

Bushnell: Green buildings present less risk to insurers. They present a more viable economic value proposition to owners and managers, and contractors and architects. And they’re more friendly to the environment because they reduce greenhouse gas emissions.

So, the overall value proposition of green buildings to the public, the building owners, to insurance companies, is strong. From the insurance company standpoint, recognizing that,

building your expertise, and then doing the promotion and the risk management advice to your customers is the step that hasn’t been taken yet.

And if we’re concerned about all of the good value that green buildings have, doing that should be easy to do. It shouldn’t be something that gives you concern. To promote green buildings is not taking a position that might be objectionable to any of your stakeholders in your insurance environment. It’s something that only has positive features going for it.

The other thing is that green and resilience intersect somewhat, but resilience is a whole different animal. And I think insurance companies are very worried about resilience these days when you look at

what’s happening in California with State Farm and Allstate pulling out of the market because they cannot get the right price because the wildfire exposure is just too great, and the property is not resilient to wildfires.

Doing something for resilient construction and resilient communities in California is going to be important. Really, California or anywhere where you have a catastrophe exposure. Important for an insurance company or the insurance industry to have a long-term, profitable relationship with that area.

continued on page 22

Closer Look: Green Building

continued from page 21

Q: What constitutes a “green building?”

Bushnell: One of the first parts of a definition of what a green home is — or a green building — is that it’s certified and it meets the standards of some third-party green building rating authority. Otherwise, you don’t know what you have. You have greenwashing, you have people who come close but they’re not quite there, and then you have outright charlatans who are just trying to promote a product they don’t put together.

[Bushnell explained that in a broad sense, green buildings are energy efficient, water efficient and eliminate volatile organic compounds that hinder indoor air quality. He said green buildings should also not be built in a flood plain and have some measures of resilience against natural disasters.]

From what I’ve seen in my work, most of the national companies have some kind of green form. The European companies pretty much all do — the Allianzes, the Swiss Res and the Munich Res. The regional companies are kind of iffy, and the smaller companies don’t often have a green form or a green emphasis.

Q: Has insurance kept up with innovation in the green buildings space?

Bushnell: The LEED (Leadership in Energy and Environmental Design) system has evolved, green building has evolved, but the same basic characteristics that an insurance underwriter and insurance company should be worried about — they’re the same. They haven’t changed

that much.

So, even though there’s been an evolution, there’s new materials that are being introduced, there’s new construction techniques that are being introduced, the basics — the core fundamentals of what a green building is — from a risk standpoint, from something an insurance company is going to be concerned about, are essentially the same that they were back in 2002 or 2003, when LEED began to get some traction.

So, the point then is, how have insurance companies adapted their own products? And I think what most of them have done is something that’s just good enough and something that will keep them from losing market share. Something that will give them something to talk about in their annual sustainability and ESG reports. But nobody has pushed the envelope very far.

Q: Can you think of any notable failures or successes within the green insurance products space?

Bushnell: I’m not aware of a whole lot of failures. I think there’s a success in that as the insurance industry recognizes that there’s value in green buildings, it’s helped the green building market. It’s helped people who are maybe on the fence about, ‘Do I build a green building,’ when there’s a rate discount for homes and commercial buildings that are green.

It makes the economic value proposition a little bit stronger. It lends some credibility to the whole green building movement that insurance companies are saying, ‘Yes, this is valuable. This is some-

thing that’s important.’

Q: What else can insurers do to motivate green building and green energy use?

Bushnell: I think there’s two big ones. Two huge ones.

I mentioned that I’ve been doing research as to what insurance companies offer, what green products, and it’s not very easy to find that kind of information. Insurance companies are not actively promoting their green building coverages or the environmental or economic benefits of green. I would believe that if insurance companies would promote green buildings, the economic value, the risk reduction factors and the environmental value — it would have a bigger impact on the market. But they’re not. And there’s probably a lot of reasons for that.

These days, insurance companies are keeping a low profile for their ESG work. They want to put that information out for people who care about it: rating agencies, regulators. …

The second way, and I think this is an important factor in insurance, insurance is more than risk transfer. An insurance company that offers strong loss control and risk control advice is going to be helping their customers improve. And I mentioned that Fireman’s Fund had a green risk management program. Not many companies do.

And I think they’re missing the boat on that, through the risk management side, where they go out and talk to their larger customers, especially, to be able to emphasize what the value is of green buildings. And how to green your building now, even if you don’t go all the way to being certified.

Q: Claims have always been a concern in this sector. What have been some of those concerns, and which of them have translated to real-life claims?

Bushnell: There are a lot of concerns. Some of them valid, some of them aren’t so valid.

Initially, one of the big concerns was something called LEEDigation. And that is lawsuits if a building is intended to be green but doesn’t have the energy efficiency that was asked for or expected. Are there going to be lawsuits that are going to challenge the builder and the architect?

And there haven’t been. That kind of never panned out. And what happened was that when there was a building that wasn’t meeting the initial goals, that the contractor, the architect, the building owner, the people operating it would get together and make fixes.

But there have been some things that are of concern with green buildings or energy efficiency or alternative energy. And I think you can look at solar panels as one.

Solar panels can be damaged by hail, and they can be ripped off buildings with high winds. And there’s always been concern — and I think it’s justifiable — that the standards that they’re made to stand up to hail just aren’t strong enough. Especially with the frequency and severity of thunderstorms and hailstorms becoming worse and worse as we go along.

So, there’s concern that solar panels will be damaged by hail, and they have been damaged by hail. There’s a concern that heavy wind can rip them off roofs and the mounting brackets aren’t adequate, or

they aren’t installed properly, and that has happened. So, that was an initial concern, and it’s still ongoing.

[Bushnell also shared that about a decade ago, large warehouses with solar panels installed from eave to eave caused several large losses because firefighters weren’t sure how to access the roof to vent the buildings. That has since been mitigated, Bushnell said, by stronger solar panel installation guidance and pre-planning between building owners and fire departments. He also pointed to a developing risk: mass timber frame high-rise buildings.]

It’s a concern. How is that protected? And is that going to be a problem where you have a fire and it’s spreading rapidly through the building, and people on the upper floors are going to be trapped there.

So, I think that’s a concern that the industry has.

Architects really like this. People who are concerned with the carbon footprint of building materials really like this because wood has a lower carbon footprint. But is it safe?

[Bushnell also touched on straw bale homes. Insurance companies have stayed away from them, he said, because straw is flammable, can spontaneously combust when wet and house rodents and insects. His research, though, has found that straw bales are rated two- to three- times more fire resistant than wood frame and drywall walls.]

When we first introduced the green products with Fireman’s Fund, we were worried: Are there enough contractors who understand what a green building is to be able to do repairs on these things? And are green materials readily available should there be a loss? And what happens in a hurricane or a huge fire, because there’s a demand surge on all kinds of materials?

Will green products even be worse? We say we’re going to upgrade with green products. Are we going to be able to find enough green products, or are we going to have that building sitting there, waiting for the contractor. Waiting for the products. With the business income and the rental loss claim increasing and increasing

every day while we’re waiting. That was a concern, and that did not happen. Experience showed us that, no, there were enough contractors, and there were enough green building materials. That wasn’t a problem. But some companies still worry about that.

Q: Let’s talk about resiliency and green buildings.

Bushnell: A green building and a resilient building are two different animals. When you think about resilience, you think about what does resilience mean? What does it entail? And it’s not just the building being able to stand up to the catastrophic event — which is certainly important.

But what about the neighborhood? What about the community? Can that be resilient as well? Have the community and property owner engaged in any kind of pre-planning of how they’re going to respond to a disaster. FEMA is requiring that communities have disaster plans now, but they’re not often well-known by the community.

Another thing is: What about the utility grid? Can the utility grid support resilience? And I think a good example about a building that is green but is not resilient because of the area would be Hurricane Sandy in New York several years ago. There were many buildings that had no damage at all, but they couldn’t operate because the neighborhood was destroyed. So that building might have been resilient, but the entire picture was not resilient because of the neighborhood. So, I think that’s an important consideration to put forth.

LEED is looking at resilience

as well. About two or three years ago, they started working on a new part of LEED called the RELi rating system that starts adding resilience to the green building mix. And it’s probably got a long way before it’s mature, but the U.S. Green Building Council is considering, ‘What can we do to make a green building more resilient?’ But there’s a whole lot more than just the building, as I said.

Q: Are there any inherent qualities of green buildings that make them resilient?

Bushnell: A good green building that meets some of the green building rating codes is not built in a flood plain. So, right there, you have something. So many buildings in the U.S. are built in flood plains, and so many people rebuild right in that same flood plain after they’ve had a total loss.

The RELi system adds some things about hardening the building for a loss. But it really doesn’t address — and it wasn’t intended to address — being a hard building in the event of a windstorm or an earthquake or a tornado or a hailstorm.

If you want to look at what a definition of a resilient building is, you look at something that the IBHS (Institute for Building and Home Safety) has done. And they have a program called Fortified. And they have wildfire safe houses, and they have hurricane safe houses. They have a whole lot of standards now … to make your property more resilient and safer.

Now, when the RELi standard was being built, there were people from IBHSA on the committee … so they were able to interject a lot of their ideas into it. But not all of them.

Florida

Bad Press, Claims Issues, Soaring Premiums Giving Industry Another Black Eye?

By William Rabb

It’s no secret that the U.S. property/casualty insurance industry does not always enjoy a sterling reputation among consumers. As one insurance professor recently put it, the industry’s rank in public opinion is somewhere between that of personal injury lawyers and used-car salesmen.

But a barrage of developments and negative press reports in the last year, especially in Florida, may have exacerbated the ill feelings nationwide. The president of the American Property Casualty Insurance Association called this “a critical inflection point for the industry.”

The current climate has some stakeholders calling for changes. Ideas range from a national education and advertising campaign that could remind the public of the benefits that come with insurance policies, to requiring more responsiveness and transparency by carriers after disaster claims.

Some insurance agents have said the seemingly relentless publicity coming out of Florida, after 10 insurer insolvencies in the last 30 months, soaring premiums, stories of hurricane claims that have not been paid, national news reports of insurers altering adjusters’ damage estimates — along with the recent State Farm, Allstate and AIG pullback from new business in California and other states — has given the industry another black eye and

has hit agencies hard.

“It has made it tremendously more difficult for us as agents,” said Bryan Chapman, of Fort Myers, who owns one of the largest agencies in southwest Florida.

As insurers have gone bust or have stopped writing, agencies and brokers have had to work harder to find new carriers for jilted policyholders — often at lower commissions — or have lost longtime clients altogether, agents have said. Some homeowners without mortgages, as well as business clients, have said they’re dropping coverage completely because they simply can’t afford it.

The Insurance Information Institute reported late last year that about 13% of Florida homeowners have elected to go naked — almost twice the national average, according to a Florida news report.

The country’s largest insurance agent group has recognized the concerns and has taken some recent steps. Trusted Choice, the national-brand marketing arm of Big I, the association of independent agents and brokers, is now working on producing a toolkit for agents. Ideas include agents stressing good communications and strong relationships with insureds and hammering home the benefits of good risk management.

Some agents feel like they’re being asked to do much more with less incentive and are just as miffed at carriers as are some policyholders. In Florida, an estimated half of carriers have reduced commission rates

for agents in the last two years. Insurers have told agents that while the percentage points have been trimmed, premiums have increased sharply, so agents are making “about the same amount” in dollars.

“I don’t know about you, but I didn’t go into business to make the same amount every year,” Chapman said, noting that labor and other costs for his multi-office agency have climbed significantly in the last two years.

It’s especially irksome for Florida agents who have had to place thousands of policies with the state-created Citizens Property Insurance Corp. As primary market insurers have become insolvent or have raised premiums, Citizens has become the largest carrier in the state — but its agent commissions are often lower than what other carriers pay. If carriers are asking for rate increases as much as 60%, what would it hurt to ask for 62% and keep agents’ commissions at the long-accepted standard rate, some agents have asked.

Brokers that represent large clients, including Florida homeowners associations, also are frustrated, and have said that they have seen more and more “crazy” policy exclusions that drastically limit coverage. That aggravates policyholders and forces brokers and agents to work harder to find other coverage, even as it limits carriers’ exposure.

Several agents, including Chapman, along with some independent adjusters hired by insurers, have argued that, for whatever the reason, Hurricane Ian claims have not been paid properly, angering many a displaced homeowner.

Data from the Florida Office of Insurance Regulation show that six months after Ian, only 54% of claims had been closed with payments. By comparison, at the six-month mark after 2018’s Hurricane Michael, about 70% of claims had been closed with payments. That may be due in part to escalating home values and higher deductibles, chosen by homeowners as a way to save on premiums in recent years. That means more Ian claims fell below the HO

Colorado’s Most Destructive Wildfire Caused by Embers From Old Fire, Sparks From Power Line

By Jesse Bedayn, Colleen Slevin and Mead Gruver

Embers from a smoldering scrap wood fire outside a home days earlier and a sparking power line caused a Colorado wildfire fanned by high winds that destroyed nearly 1,100 homes and left two people dead, authorities said.

The Dec. 30, 2021, blaze in heavily populated suburbs between Denver and Boulder caused $2 billion in damage, making it the most destructive in Colorado history. Two people were also found dead after what was known as the Marshall Fire.

The inferno erupted following months of drought amid a winter nearly devoid of snow and fed on bonedry grassland surrounding fast-growing development in the area near the Rocky Mountain foothills. It spread rapidly in winds that gusted up to 100 mph in places.

There is no evidence to support criminal charges against anyone for the fire, Boulder County District Attorney

Michael Dougherty said at a news conference.

The scrap wood fire – buried by residents Dec. 24 and OK’d by firefighters who stopped by that day to investigate –was one cause when the powerful winds uncovered the buried embers six days later, Sheriff Curtis Johnson said at the news conference.

A loose Xcel Energy power line caused

a separate fire less than half a mile (away around the same time, Johnson said.

The two fires combined to cause the massively destructive blaze.

Experts say similar events will become more common as climate change warms the planet and suburbs grow in fireprone areas.

Copyright 2023 Associated Press. All rights reserved.

Report Looks at Long COVID Claims in California Workers’ Comp

Roughly 13% of COVID-19 claims with medical payments received treatments for long COVID symptoms in the workers’ compensation system, a new report shows.

The Workers’ Compensation Insurance Rating Bureau of California released an updated COVID-19 report, Medical Characteristics of COVID-19 Claims and Long COVID in the California Workers’ Compensation System. Highlights of the report include:

• COVID-19 claims for accident years 2020 and 2021 share a similar mix of mild, hospital and death claims.

• Over a 12-month post-acute care period, roughly 13% of COVID-19 claims with medical payments received treatments for long

COVID symptoms in the workers’ comp system.

• The risks of long COVID were higher among female workers, workers over age 50 as well as those with comorbidities.

• Claims involving treatments for long COVID symptoms were four times more likely to receive permanent disability benefits compared to other COVID-19 claims without treatments for long COVID symptoms.

The full report is available in the Research section of the WCIRB website.

New Mexico Reaches $500M Settlement with Walgreens in Opioid Case

New Mexico has settled with Walgreens for $500 million over the pharmacy chain’s role in distributing highly addictive prescription

painkillers.

The agreement was signed in March, and state officials confirmed that a confidentiality provision on the agreement was

lifted last month.

The settlement is in addition to $274 million in settlements obtained in the case last fall from Albertsons, CVS, Kroger and Walmart. Attorneys representing the state say that, in all, New Mexico’s opioid litigation has brought in more than $1 billion.

They argued at trial last year that Walgreens failed to recognize suspicious prescriptions and refuse to fill them.

“I’m optimistic this will help in the fight against the opioid crisis and provide the treatment New Mexicans so desperately need,” Luis Robles, one of the attorneys who worked on the case, told the Santa Fe New Mexican.

Over the past few years, drug manufacturers, distribution companies, pharmacies and other companies with roles in the opioid business have reached settlements totaling more than $50 billion with local, state and tribal governments.

In May, West Virginia announced its settlement with Kroger, bringing that state’s total opioid litigation dollars to more than $1 billion. West Virginia state has lost more lives to opioid overdoses per capita than any other.

Most of the settlement money from the opioid litigation is required to be used to fight the crisis, which has been linked to more than 560,000 deaths in the U. S. over the past two decades, including more than 70,000 a year recently.

In recent years, most of the deaths have been connected to fentanyl and other illicit synthetic opioids, not prescription painkillers, according to data from the Centers for Disease Control and Prevention.

Copyright 2023 Associated Press. All rights reserved.

deductible and were closed without payment, said Melissa Burt Devriese, president of Ormond Beach-based Security First Insurance Co.

All of that and other negative reports have hurt the industry’s image, a few stakeholders agree.

“Of course it’s given the industry a black eye,” said Michael Carlson, president of the Personal Insurance Federation of Florida, a lobbying and advocacy group that represents a number of large carriers.

But a big point that some of the national news media reports may have missed is that much of the damage in Ian was from storm surge and flooding, and thousands of Florida homes did not carry flood insurance, he said. That has created more room for disputes, as some homeowners see that their hurricane damage isn’t completely covered.

“The bulk of a lot of the damage in Ian was from flood, and that’s what a lot of claimants don’t understand and the media doesn’t understand,” Carlson said.

To combat the pummeling that carriers have taken in recent months, Carlson suggested that insurers undertake an education campaign that would highlight claims that have been paid and homes and lives that have been restored.

“The positive news has not been shared very well, and it should be,” he said.

Charles Nyce, associate professor of risk management and insurance at Florida State University, has studied insurance marketing issues for a number of years.

“Individual companies do great marketing campaigns, but the industry as a whole does not,” he said. Empirical data about the industry’s reputation is limited. J.D. Power’s 2023 survey, published in February, shows that nationwide, overall satisfaction by homeowners improved slightly, after dropping the year before. But with recent events, some in the industry are bracing for lower ratings when the next survey is published.

Some on the agents’

side agreed that the industry has been unfairly blamed for factors that have been at least partly outside of carriers’ control.

“It’s more complicated than what’s been reported,” said Kyle Ulrich, the president of the Florida Association of Insurance Agents. He compared insurance companies, forced to raise premiums for a number of reasons, with banks that have had to raise interest rates on consumer loans.

“When interest rates go up, is that the banks’ fault?” he said.

Explaining to clients about all of the reasons behind the higher premiums and the turmoil in the industry is not easy, said Cynthia Webster, president of Jack Rice Insurance in St. Petersburg, Florida. “You need a lot of Pepto Bismol,” she said.

Webster said she’s heard little from clients about concerns over insurers altering adjusters’ estimates, after some recent national news reports about the practice. The consumers’ alarm is all about higher premiums. And even with a thorough explanation, many irate clients have terminated their relationship with their agents in recent months — only to find that better options simply aren’t available in Florida, she said.

More positive news may be on the way in coming months.

Most Florida carriers have reported that they completed their reinsurance programs by the June 1 renewal date, albeit at much higher prices than in years past. That will likely result in higher premiums for consumers, but should help prevent more insolvencies this year.

As reform laws approved by the Florida Legislature in the last 12 months begin to have an impact on claims litigation costs, in property and auto insurance, the market should stabilize and premiums could actually drop, industry advocates said.

It’s happened before. After the so-called sinkhole claims crisis in Florida was addressed by legislation in 2010, rates dropped for many insureds, Ulrich noted.

“It’s not true that rates always go up,” he said.

Until premiums fall, though, insurers could take other steps to manage the backlash. Chapman, the southwest Florida agency owner, said that many consumers he’s spoken to have been angered by what he termed a disconnect between some major carriers and policyholders when claims are filed.

For example, he said, policies and declarations pages are designed to be clear, with bold type on deductibles and more. But after a claim, insurers often send consumers the complicated Xactimate adjustment spreadsheet, showing multiple lines of projected repair costs, which homeowners and agents alike aren’t trained to understand.

“That’s not fair to the policyholder and it’s not fair to us,” Chapman said. “There’s got to be a better way.”

Bryan Chapman

Kyle Ulrich

Florida Regulators Approve Roof Endorsements That Bar Non-Storm Claims

By William Rabb

Despite the Florida Legislature taking major steps to rein in the cost of roof claims and litigation, at least two insurers have come out with broad roof endorsements that seek to bar claims for wear and tear, poor workmanship and design issues.

“This form is required to combat fraudulent roof claims from continuing to impact loss results,” reads a letter from Slide Insurance Co.’s Jeremy Backzkiewicz to the Florida Office of Insurance Regulation, explaining the company’s May 25 filing.

After some minor revisions to the endorsement, the OIR approved Slide’s filing for its homeowners program, which followed the March approval of a roof limitation filed by Florida Peninsula Insurance. They both are very similar to an endorsement filed by American Integrity Insurance in 2019 and updated recently.

Slide’s endorsement takes effect Aug. 1 for new policies and renewals.

The endorsements appear to expand the definition of “roof surfacing” to include not only shingles, panels and tiles, but also cladding, underlayment and decking,

along with roof vents, flashing, drip edges and skylights.

And “unless loss is caused by a ‘hurricane occurrence’ or ‘named storm,’” the Slide endorsement reads, “we do not cover loss to ‘roof surfacing’ caused directly or indirectly by any of the following:

• Wear and tear, marring, spatter marks, or deterioration;

• Displacement or removal of roof surface granules that does not result in fracturing, bruising, puncturing, or other damage to the base material or underlying mat;

• Inherent vice or latent defect;

• Faulty, inadequate, or defective maintenance;

• Faulty, inadequate, or defective materials used in repair, construction, renovation, or remodeling;

• Faulty, inadequate, or defective design, specifications, workmanship, repair, construction, renovation, or remodeling; or

• Settling, shrinking, bulging, or expansion, including resultant cracking.”

Wear-and-tear and other types of exclusions are not new. A 2021 HO-3 policy written by Florida Peninsula, for example, already lists some of the same excluded conditions. But the recent endorsements

may take the wording to a new level, listing more excluded situations and giving the insurers wide latitude to deny claims.

The endorsements could have a big impact on claims frequency and severity, but they have already raised questions from attorneys and adjusters, including: Why the filings came this spring, after legislative changes that have cut the knees out of assignment-of-benefits, roof replacement requirements and one-way attorney fees.

The endorsements also raise concerns that may have to be answered in court, and will likely lead to at least some litigation, said Ron Assise, senior vice president of The Horton Group, a national insurance brokerage and agency.

The wording, for example, may be seen as confusing: Wear and tear is not covered unless it is caused by a named storm, the Slide endorsement reads. But the debate over whether a storm caused damage that looks suspiciously like age deterioration has been at the heart of hundreds of claims disputes in Florida. And who decides what is considered poor workmanship or design?

“There’s a lot of subjectivity in how they’ll interpret this at claims time,” Assise said.

Slide officials declined to comment. A representative for Florida Peninsula said that the recent filing simply puts all exclusions into one endorsement and is not a major shift for the carrier.

“We believe that in doing so, this will help with some of the frivolous roof-related lawsuits we receive,” said Sarah Bascom, president of a communications firm that works with the insurer.

Others in the industry offered differing reactions.

“I think the endorsement adds clarity for both sides when it comes to nonnamed storm events as to what will and will not be covered,” said Michael Packer, continued on page 27

continued from page

a Fort Lauderdale insurance defense attorney with the Marshall Dennehey law firm. It “should hopefully continue to reduce litigation.”

He suggested that the endorsement may be optional for Slide policyholders, and that the insurer may offer a premium discount in return. But the Slide filing does not address that.

Independent adjuster Ben Mandell, known for speaking out about some Florida insurers’ claims practices, argued that the Slide endorsement will essentially nullify most roof claims — except those that result from named storms.

“As an adjuster I know that most roof claims are not caused by hurricanes,” he said. “Most roof claims are caused by things other than hurricanes or named storms.”

Damage from hail storms and other events that are not uncommon in Florida will likely not be covered, Mandell said.

He has advocated for a dollar-limit roof endorsement, perhaps for $20,000 — similar to mold endorsements already in use by some insurers — as a better way to prevent exaggerated claims.

A plaintiffs’ attorney argued that Florida the endorsements will unfairly undercut legitimate claims.

“The insurance regulator should have asked for examples of how this language combats insurance fraud,” said Chip Merlin, a Tampa lawyer who represents policyholders. “Indeed, a good regulator would go back and ask both insurance companies for these examples about how, without this language, fraudsters were able to get roof claims paid.”

Hail may not show significant impact on shingles until later, after the initial damage loosens granules, exposing the material to deterioration, he said.

“Most engineers, even those retained by insurers, will say this gradual loss is

significant physical loss. However, insurers will point to the policy language to deny the claim,” Merlin noted.

In the long run, the endorsements may see relatively few challenges in court, thanks to Senate Bill 2A, adopted in December, and House Bill 837, passed in March. Both of those make it more difficult for policyholders to hire plaintiffs’ attorneys, Merlin said.

“Since the Florida Legislature just did away with policyholders being able to recoup the cost of attorneys' fees, and the average roof replacement is $25,000 to $30,000, wrongful denials of otherwise valid and payable claims will go unchallenged because people cannot afford to hire attorneys and engineers to fight for coverage,” Merlin said.

Special Report: CSRs and Account Managers

The War for Service Talent

By Andrea Wells

Customer service representatives and account managers are the heart of agencies. They retain valuable business year after year. They are the guardians and caretakers of the agency’s most valuable assets — its book of business. Service and support positions are also the jobs that agency owners need to fill the most right now.

“There’s such a huge need right now,” says Art Betancourt, founder and CEO of AEBetancourt, a national professional placement and executive recruiting firm for the industry. Recruiting for CSR and account manager positions represents about half of the total recruitment efforts of his firm, he said.

Mary Newgard, partner at Capstone Insurance Recruiters, a national recruiting firm based in Iowa, is seeing the same trend. More than half of Capstone’s recruiting efforts today are for agency service positions, she says.

Newgard and Betancourt both hear the same story.

It doesn’t matter if the agency is a 20-person shop or a large top 100 firm — insurance agencies simply

cannot find enough skilled, experienced client service/ account management talent.

“It’s such an important role in the organization and they’re not making new ones fast enough,” Betancourt said.

Chris Burand, owner and founder of Burand & Associates, an agency management consulting firm based in Colorado, hears the same from the agency owners he works with.

“Everywhere I go I hear, ‘I need quality account managers, ones I can afford, and I can’t find them. What are your suggestions?’” he said. “I’d like to tell you they are looking for X-years’ experience, and this talent or that talent, but agencies are just looking for people to show up and work.”

Agencies are searching for CSRs and account managers that can hit the ground running, Betancourt says. They want experienced staff

but that is not always available.

“Unfortunately, these are roles where agencies are typically a little bit more reactionary when it comes to hiring,” he said. “That’s created a pretty large vacuum in the industry.”

When agencies need to hire service staff, their need is often immediate, Betancourt said. “They need it right then and now, and they don’t have a year or two to train somebody new.” In addition, smaller or midsize regional agencies must compete against much larger national firms. “And a lot of the large nationals are coming in and just paying crazy money to people.”

All About the Money?

While money is crucial, it is not the only thing quality CSRs and account managers seek.

“What good account managers are looking for is kind of the same old stuff,” Betancourt

said.

They want an agency that will invest in their employees, have a good culture and invest in technology. That means supporting growth through continuing education, he said. “But two things that are just really key right now, more than ever, are flexibility and compensation.”

The reason experienced service staff begin a job search has changed, as well. According to Newgard, people search when they lack the opportunity to grow professionally.

“We see 10-, 15-, 20-year veterans saying they feel a little too boxed in,” she said. “Maybe they are working just one type of account, not feeling challenged within their role, or not feeling diversified enough in what they’re doing,” she said.

That dissatisfaction in their job can lead an experienced account manager to search for a new one, Newgard added. Another common reason people search is pay. “Number two, for sure, would be compensation. There’s a desire for people to move up, and be compensated,” she said.

Another reason — many agency service staff feel stressed out in today’s agencies. “A lot of them feel like they’re doing the jobs of two or maybe three account management desks. The

harder it gets to stay fully staffed, the more pressure that you put on your current account managers.”

If agencies don’t solve that problem, then their CSRs and account managers lose confidence in management, she said.

Betancourt says that agencies looking only for 100% in-office employees will find their search more challenging than those that are willing to offer hybrid work.

Newgard agrees. She finds service staff searching more often when management fails to provide some type of remote work option. But it is not all about remote; it is more about being flexible, according to Newgard.

“As much as we hear about this idea that everybody wants to work remote, that’s not entirely true for insurance,” she said. “There’s plenty of agencies that still want people to come in five days a week, and there’s plenty that will allow hybrid and anything in between.”

When people reach out wanting to find a new position

and explore the job market, it’s because their agency is not having an open conversation about flexible work arrangements, she said. If an agency doesn’t want to offer flexibility, then they can expect to keep those positions open longer, she said. “You have to pick your battle.”

Betancourt adds that as long as an agency is willing to be flexible, that’s good enough. “Some people don’t even use remote options. They just want the option to be there.”

Retention

Client service is the heartbeat of any insurance agency. As much as agencies want to focus on new business growth and new client development, none of that does any good if every time they bring in a new account, an existing account goes out the back door, according to Newgard.

“So, what you are really trying to do every single day as an agency is to retain and to build relationships, and who does that? Yes, there are producers, but

the heavy lifting in an agency is done by their client service people,” Newgard says. “That’s where the relationship building really comes from.” And, that is ultimately what builds the character and the culture of an agency, what makes one firm different from the one across the street, she added.

While retaining top talent in service positions is key for an agency’s success, there is a growing concern among agencies that they are playing more defense these days than offense when it comes to recruiting. So, what keeps top service talent in the agency?

According to

Newgard, what retains top talent ebbs and flows with market conditions.

“A few years ago, it was all about employee benefits and wellness,” she said. Today, that has shifted more toward flexibility and compensation.

Betancourt agrees. “Frankly, the number one reason why people are leaving right now, and this goes pretty much for any role, is money,” he says.

“Then tied for second is the agency culture/values, and flexibility,” he says. “Before, they just didn’t have a lot of options. But now the world is their oyster, right?”

From the employee’s perspective, agencies that have a good reputation for supporting their staff have fewer problems finding quality people, according to Burand. Agency management that enforces proper procedures for everyone, including producers, demonstrates support for their staff, and that they will support those service staff when producers try to cut corners, he said.

“Those agencies have far less problems in finding quality people,” he said. “On the other hand, agencies that don’t cause producers to follow procedures and maybe don’t even have decent operational management at all, those agencies have far higher turnover.”

He believes these points can be more important than pay or virtual work options at times. “I don’t want to suggest that virtual work environment and increased pay are not key factors. But an agency that provides all three … they simply don’t have staffing issues.”

Special Report: Most Valuable Players:

Welcome to Insurance Journal’s inaugural Most Valuable Players recognition awards report for retail insurance agency customer service representatives and account managers. This report features 18 MVPs who define what it means to be a successful CSR and/or account manager in today’s property/casualty agencies. These professionals have achieved impressive success throughout their careers and demonstrated key skills of what it takes to

be the best service professional. They also have shown they have a passion for what they do and a commitment to professionalism and, in many cases, specialization. For them, being a CSR/ account manager is more than a job. Insurance Journal’s MVPs come from all regions of the country, live and work in cities or towns big and small, and know the importance of serving their customers. Information included in this report was voluntarily submitted online by individuals

Ryan Feliciano Atlantic Pacific Insurance Palm Beach Gardens, Florida

and management and was supplemented by other public information sources. There are more agency MVPs who deserve recognition than are profiled here and, hopefully, these profiles will inspire others to do what it takes to reach the top of their profession. Insurance Journal hopes to recognize more MVPs in future reports. For questions or comments including if you have ideas on how to improve this new award, please contact, Andrea Wells at: awells@insurancejournal.com.

Jenna Daniels Alliant Insurance Services Houston Texas

To Jenna Daniels, a philosophy of “working smarter, not harder” has meant learning every system inside and out to streamline every project. She drives herself to get back to every client by the end of the day. And she is sharing her motivation and techniques to help new employees at Alliant Insurance Services do the same.

Daniels has been in insurance since 2007, specializing in the oil and gas industry for the last 15 years, working with service contractors and upstream and downstream companies. She started with Alliant in 2019.

Today, she mentors newcomers. “I step in when new people are hired and help catch them up to speed so that they can succeed at their job and in their career as well,” she said. She also puts together renewal proposals and marketing submissions and goes out on RFPs with the service team to help generate new business.

Daniels credits the mentorship of her leaders and co-workers with her expanding knowledge of the business. “I have had great leaders and worked with people who have included me in meetings, lunches and calls so I can broaden my knowledge of not only this industry but what my clients do daily so that I can service them in the best way possible and provide service they want and expect,” she said.

Ryan Feliciano started his insurance career at 19 as a customer service rep for a captive carrier. In just over a year, he moved into a sales role. Two years later, he became a personal lines account manager. After another three years, he was promoted to commercial lines account manager at Atlantic Pacific Insurance, a position he has held for the last year.

His strength is getting on the same page as his clients, which include contractors, plumbers, electricians and HVAC workers. He said the key to success is to leave no stone unturned when it comes to the diverse coverage needs of Florida’s construction industry. “I find it helpful and natural to show empathy to our clients,” Feliciano said.

“While not always able to exceed their expectations with rates or coverages, I always want to make sure they understand their policy and keep them informed about the marketplace. ... I look to add the most value I can as an account manager,” he said.

The same consideration extends to his team, and Feliciano reaches out to help others whenever possible. “I understand this has a direct effect on our client’s experience and look to do my part in creating a great work environment for myself and teammates.”

Ebony Guzman

Mackoul Risk Solutions

Long Beach, New York

When Ebony Guzman began her insurance career, she never pictured the changes and challenges ahead. “I have grown with the industry and adapted to many of its challenges,” said Guzman, a property/casualty customer service representative at Mackoul Risk Solutions.

She specializes in habitational coverage, an increasingly complex market. While technology has made day-to-day operations easier, Guzman said, “nothing prepared me for the uproar of climate changes, social inflation and carriers dissolving.”

Customer service representatives “need to be ready to answer [clients’] questions. Be ready to diffuse their aggravation and confusion,” she said. “Our clients trust us and rely on us as insurance professionals for our expertise, which is why our retention still stands high today. Our success is driven because we care.”

Guzman says it’s important to review lessons learned each day. “I personally ask myself every day what I have learned today and overall. ... How can I share what I have learned with our clients and, most of all, be responsive?”

She added that her “success as a customer service representative comes from the support of a great agency, team, service, and patience.”

Missy Clifford The Richards Group

Brattleboro, Vermont

on trust.

Heffernan Insurance Brokers

Walnut Creek, California

•

•

•

“My reputation is built on trust,” she said. “My clients have to trust my judgment of coverages needed and my carrier partners have to trust my perception of a solid risk.”

Clifford works with large- and smallscale farms in Vermont, providing agricultural insurance. “Building trust is crucial for success in this business industry.”

She has spent 26 years with the Bourdon Agency, which was acquired by The Richards Group in 2019. She started as a commercial account manager and was soon promoted to commercial lines service lead of the company’s northern Vermont offices. She soon moved up to commercial lines customer service manager and today serves as commercial lines assistant department manager.

She continues to manage a commercial book of business along with her leadership duties.

“Having dedicated and patient mentors is the reason I have been so successful in my professional career,” Clifford said. “They provided valuable insight on dealing with situations and how to prioritize my workload.”

Now she is passing on that knowledge and experience by mentoring the next generation of insurance professionals.

“Seeing others succeed is highly rewarding and provides a high level of satisfaction,” Clifford said. “It is my opportunity to pay it forward.”

Cindy an MVP is the cultivation of her relationships that she blends with an unparalleled depth of professional knowledge to deliver superior insurance products and experiences to her customers.”

She “understands that success in the insurance field is about providing a personalized customer experience underpinned by a mastery of insurance policies and procedures,” the nominator added. “She also knows that what makes BKCW exceptional are the people that comprise the organization.”

Sarah Field got her first insurance job as a part-timer while attending college over 25 years ago. “After graduating, I decided to stay in the insurance industry, as I could see my career path expanding in the field,” she said.

94 Court Street Middlebury, VT 05753 (802) 388-4992

She has held several roles on her way to becoming an account manager at Heffernan Insurance Brokers, starting as a personal lines account manager and then commercial lines account manager. Today, she specializes in small business.

TheRichardsGrp.com

On top of supporting her agency-assigned producers, McCall has assumed the production and service of the accounts for half the agency's founders as they retired.

McFall holds Certified Insurance Counselor (CIC), Certified Insurance Service Representative (CISR), and Accredited Customer Service Representative (ACSR) designations. And while McFall is committed to excellence in customer service and professionalism, her nominator said, “The most helpful aspect of her career has been her relationships with her customers, co-workers and supervisors.”

“I enjoyed establishing long-term relationships with my clients and focusing on the service side of the industry,” she said. “Helping clients solve ways to benefit their insurance needs while staying positive and eager to serve them was one of my strengths in this role.”

Field sees her MVP superpowers as understanding customer needs and interests, determining what product will be most beneficial to them and always welcoming professional growth opportunities from colleagues and mentors. “I take the time to build relationships with clients, underwriters, marketing reps, claims adjusters, and my peers in the field,” she said. “Having these types of personal bonds means more knowledge gained from a vast network of people in the industry.”

Having strong client relationships helps build trust and allows the account manager and client to navigate interactions productively, according to Field. “My strong suits are providing service that relays accurate product knowledge to clients, offering reliable information, and always providing service with a great attitude.”

Special Report: Most Valuable Players:

Nicholas Wood BKS Partners Lakeland, Florida

Nicholas Wood’s insurance career began with faxing and filing at a small, independent agency. Now, after 21 years as an account manager, he looks back on roles for large national firms, family-owned agencies, brokerages and even a carrier.

Bec Corun Relation Insurance Services Select Inc. Frederick, Maryland

Bec Corun is changing how her company does business through technology and efficiency.

Corun started at Relation Insurance Services Select Inc. in June 2021 as a customer service specialist and, within six months, was promoted to account manager on the personal lines service team. By the end of 2022, she had served a stint in client retentions and was promoted to personal lines service manager.

Since then, Corun has been key in helping to shape most of the company’s service practices. She created robust processes within AMS360 and ImageRight, some of which are now used throughout Relation Select. She helped the office become more tech-friendly and efficient, creating entirely new workflows for the company’s CRMs, streamlining processes for payments and applications, and creating QR codes to help the sales teams with prospecting.

A strong work ethic and desire to help people, combined with creativity, drive Corun to independently seek solutions and look for opportunities to grow every day.

“She is an MVP because she is always willing to give 120%, whether it be to clients, to co-workers, or in learning new systems,” said her nominator. “She is the first to offer help to anyone, regardless of their department. She takes the time to ensure clients understand their policies and are making the right decisions that best suit their needs.”

“She truly follows and believes in the mantra ‘treat others how you want to be treated,’ which is evident in the way she treats her co-workers, managers and clients.”

“The spectrum of accounts I have managed began with hometown contractors and emerging entrepreneurs, to now managing defense contractors, real estate investment funds, and one of the largest U.S. home developers,” Wood said. “Seeing a problem and solution from every angle and anticipating all possible outcomes is what creates a successful account relationship.”

Wood, now at BKS Partners, says one of his strengths is his ability to “bridge the gap between multiple generations.”

“The emergence of new technologies requires training to different skills and tenures,” he said. “I have led trainings for the transition to online applications and other system integrations while recognizing the multiple points of view from colleagues. ... Conversely, I have helped newer colleagues learn how to manage a desk, using prioritization and organization techniques,” he added.

“I have had the privilege of learning from some very talented account managers and colleagues” Wood said. “There have been countless times where I have had to learn from others and then share my knowledge or experience with junior colleagues.” The single, most valuable asset to an account manager is experience, he said. “In terms of your own experience, but more importantly, the experience of those around you.”

Reanell Beaty

Meadowbrook Insurance Agency Inc.

Southfield, Michigan

Reanell Beaty has been working in the insurance industry for 45 years.

But Beaty, a property/casualty account manager at Meadowbrook Insurance Agency, continues to pursue education and development while sharing her vast knowledge with less experienced members of her team — for example, anyone who has only been in the business for 40 years.

“I have more than 45 years of commercial insurance industry experience, including more than 15 years of account management experience at Meadowbrook Insurance Agency,” she said. “I bring a wealth of knowledge and long standing industry background.”

Before joining Meadowbrook, she served in account management, client servicing, rating technician and underwriting roles at HCCB&S/Colburn Group, Alexander & Alexander (AON), Kemper Insurance and Hartford Insurance.

She is a licensed insurance agent for property/casualty and also holds an associate in underwriting designation and a commercial insurance service representative certification.

Beaty said she keeps on top of trends and technology by continuing her education in the industry through seminars and reading. She also says that “comraderie with fellow employees and business associates” helps to keep her informed.

But the secret to her long, successful career boils down to good service — both to clients and colleagues. “I put the client first and am available to assist the newcomers.”

Account Managers & CSRs

Ashlie Wilson Haylor, Freyer & Coon Inc., an Alera Group Company Syracuse, New York

When young adults go off to college, managing their insurance coverage isn’t at the top of their concerns. That’s where someone like Ashlie Willson can help.

Kim Garcia Morris & Garritano San Luis Obispo, California

Kim Garcia was in banking for nearly 20 years before switching to insurance. In 2017, she joined Morris & Garritano as an assistant account manager in commercial lines.

Today, she is the commercial lines account manager supervisor, heading a team of seven account managers and managing her own book of business.

“We pride ourselves on being true advisors to our clients, staying informed about market trends, and guiding our clients through the ever-changing landscape of insurance,” said Garcia, who works with many clients in the restaurant and hospitality industries.

Garcia finds her motivation in helping clients understand the complexities of insurance.

“I find satisfaction in being a reliable translator, simplifying insurance concepts and making it easier for clients to comprehend,” she said. “It’s rewarding to see them gain clarity on why they need insurance, how it benefits them, and to provide them with a sense of security in their business operations.

She added: “It’s a rewarding experience to build personal relationships and help clients navigate the difficulties they face in the market and ensure they find the right insurance coverage for their needs.”

Wilson has worked in the collegiate division at Haylor, Freyer and Coon since 2015. The collegiate division provides services to colleges and universities, specializing in insurance for the college student market, including dental, vision, disability and life insurance. The company also provides student health/accident insurance and coverage for intercollegiate athletic sports programs.

Wilson manages many of HF&C’s Collegiate larger accounts, including the Fashion Institute of Technology, Brown University, Syracuse University, Pratt Institute, Kentucky State University and Yale University. She was recently promoted to client services manager, overseeing all collegiate accounts.

“I have the responsibility for managing the integrity and customization of the enrollment and waiver process for each client, claim inquiries and billing processes,” she said.

Wilson has also worked to strengthen IT procedures by creating a training manual for all new incoming hires and current staff, and developing procedures and tracking modules to keep items compliant with promises made to clients.

Wilson said: “I pride myself on a superior work ethic and coaching abilities, which has allowed me to manage our clients and staff with the utmost care to ensure proactive collaboration and client-centric results.”

Patricia Frantz Curabba Agency Middletown, New York

What makes someone an MVP? The person who nominated Patricia Frantz summed it up: “She never says ‘no’ to a challenge and will always do whatever it takes.”

Frantz has been at the Curraba Agency in Middletown, New York, for 26 years. She handles personal lines, mostly auto and other vehicles. She also quickly learned to handle business owner policies when a colleague could not work for several months.

Frantz’s dedication is part of her makeup, said agency owner Greg Hogan in his nomination.

“Patty is an MVP in every sense of the word,” Hogan said. “As a true MVP, Patty would never submit this herself, nor would she consider herself an MVP,” he said. “Never one to back down from a challenge, she finds a way to solve problems and keep customers happy.”

He added that she will stay late or meet a customer on a weekend if that’s what needs to be done.

While Frantz frequently says, “I’m just doing my job,” and “I’m just servicing my customers,” Hogan said, “in reality, the office runs because of her. “

Hogan, who has only owned the agency for the past eight years, says Frantz is known by everyone.

“She’s been here 26 years, and everyone knows her,” he said. “She would handle every customer call if I let her.”

Special Report: Most Valuable Players:

Maria Jocson Snapp & Associates Insurance Services Inc. San Diego, California

Rebecca Guarnaccia Warren Insurance Group LLC Fayetteville, North Carolina

Rebecca Guarnaccia knows insurance is more than just financial protection; it can also provide peace of mind and a sense of security during unexpected events.

Guarnaccia has been in the insurance industry for 17 years, helping clients find that security, especially when facing difficult circumstances.

For the last eight years, Guarnaccia has been with Warren Insurance Group, providing services to clients in the habitational, contractors, service industry and farm sectors.

Her strong relationships and effective communication across the spectrum of stakeholders have earned her in-depth knowledge of the industries she services. By listening to clients, carriers, and co-workers, she provides appropriate coverage options and valuable risk management guidance. She collaborates with all the involved parties and with her colleagues to make a positive impact during challenging times.

In some cases, when those challenges come, Guarnaccia also gets hands-on by volunteering with the North Carolina Red Cross.

In addition to her property/casualty license, she possesses specialized certifications such as a Master Farm Certification, Certified Insurance Service Representative (CISR), and Transportation Risk Assessment (TRA) certification.

Maria Jocson never stops learning. She entered the insurance industry as an assistant, issuing certificates and handling notices of cancellation, in October 2020.

“I quickly understood all that was presented to me and was eager to learn more,” she said. “I was cross training on CSR duties within a few months of starting at Snapp & Associates and got my license a year later.”

She specializes in construction and entertainment, and manages “one of the largest books of business for the agency,” she said. “I handle all aspects of work from certificates, training assistants, servicing existing clients’ books of business for four large busy and high production producers and am cross-training into our marketing department.”

Not only is she continuing training on the job, she is also working on a Bachelor’s degree, attending college full time.

“I spend a lot of time helping other CSRs and training assistants as well,” she said. “I take pride in my work and understand that my livelihood depends on the service that I provide to our clients and our producers.”

Jocson added: “I strive to go above and beyond at all times.”

Caprice Hidalgo Crest Insurance Group

Tucson, Arizona

Caprice Hidalgo is a problem-solver. As a private client account manager at Crest Insurance Group, she works with high net worth clients who trust her expertise.

Regardless of a client’s net worth, they want someone to listen to what they need and help provide solutions, Hidalgo said.

“I strive to be that go-to person for them,” she said. “I not only listen to what they are saying but look past the words and try to see what they are asking of me. I think this gives me an opportunity not only to help, but to build long-lasting relationships with my customers.”

Her 15-year career began in auto insurance, and she has since expanded her expertise to many lines, including home, umbrella, personal articles and more.

One of the reasons Hildalgo loves working at Crest is because of the agency’s philosophy to give back to the community it serves. “Our owner supports charitable causes and programs whenever possible, and shares his success with the community.”

Account Managers & CSRs

Krissy Frankel Heffernan Insurance Brokers Walnut Creek, California

Samantha McCleary  Morris & Garritano  San Luis Obispo, California

A passion for local wine culture led Samantha McCleary to her insurance career at Morris & Garritano.

McCleary moved to California’s Central Coast in 2011 and started as an assistant account manager before quickly moving into an account manager role. She began managing the agency’s winery and associated agriculture accounts 10 years ago.

“As a winery and agricultural account manager, I work with clients with various types of risk,” she said. “Some clients have large operations with hundreds of millions in property values that are often located in high wildfire rating areas that are becoming increasingly difficult to insure. Liability concerns involving alcohol, restaurants, tasting rooms, distilleries and events are abundant.”

McCleary said winery clients have varying professional exposures from services like custom crush, consulting and vineyard management. The accounts are complex, she said, “clients are frequently taking on new operations, changing values, locations and ownership. It’s important to be able to identify where these frequent changes create coverage gaps and work to transfer the risk whenever possible.”

Being at Morris & Garritano has allowed her to learn from seasoned professionals who’ve seen it all but also know that things are constantly changing. “Being able to dig into complicated situations with others has helped me grow in my ability to ask the right questions so I can effectively evaluate coverage,” McCleary said. “My clients and co-workers know I am thorough but also quick to respond, which builds trust. Trust is a key component of insurance account management.”

When Krissy Frankel started her insurance career more than 10 years ago, she thought it was a temporary position. Instead, it was a career that allowed her to learn about many industries, which has kept her interested and motivated throughout her career.

“Working in the insurance industry has kept me actively involved in a multitude of professions, which allows me to continue to learn and experience different industries, the best of all worlds,” said Frankel. “Ten years later, I’m an executive account manager at Heffernan Insurance Brokers and haven’t looked back.”

Clients are straddling a host of challenges at once and value the guidance that Frankel is able to provide. “I specialize in large, commercial, multifaceted risks, and I feel that my jack-of-all-trades approach has uniquely suited me for the ever-growing risk profiles of our insureds.”

She is also passionate about the evolving world of insurtech and its potential for streamlining agency processes and growing relationships. “Piloting these programs has a real impact on how we use technology as an industry going forward,” she said. “I love to be part of the creative process and discover how we can use this technology to provide our clients the best service and experience.”

Frankel says she strives to create the best possible final product in the most efficient way for her clients and her colleagues. “I find being a resource to my team in the San Francisco office and throughout the company to be incredibly fulfilling.”

Nicole Eggert Mackoul Risk Solutions Long Beach, New York

In 2011, Nicole Eggert took a chance by responding to an insurance job listing. That chance ended up being a perfect career fit.

“Every day is a different challenge and a new opportunity to learn more,” said Eggert. “Some days, it is that new crazy claim that could never happen, but somehow happens. Then other times, it is discussing a new risk with an underwriter and trying to obtain all the coverage your client needs.”

For Eggert, Mackoul Risk Solutions, which specializes in the habitational market in New York and New Jersey, has been a great place to work since the onset. But that doesn’t mean there aren’t difficult days.

“Some days, it is a mixture of everything, and the stress can be overwhelming,” she said. “Like when a hurricane hits and hundreds of clients are immediately impacted at once. Those are the hard times that clients need us the most.” But even in those difficult times, Eggert says that being there for her clients in their time of need and helping to make them “whole again is very rewarding.”

Eggert said one of the biggest challenges today is explaining premium increases to clients and helping them find the best options.

“One way I try to get ahead of this is by gaining my client’s trust throughout the year through education and by keeping them informed of industry trends every step of the way,” she said.

“I am forever grateful to them for that opportunity because that random job I applied to turned into a lifelong career that I enjoy doing every day,” Eggert said.

Closer Look: Climate

How the Insurance Universe Deals with Evolving Risks and Dispositions

By Don Jergler

Insurers have come a long way on climate change, but they have a long way to get where they need to be to deal with a more hazardous planet.

That was the assessment from Washington Insurance Commissioner Mike Kreidler, a regulator who has spent three decades pushing insurers to disclose more about their investments and activities surrounding fossil fuels and to do more to address climate change.

Kreidler’s assessment summed up the tone of Insurance Journal’s hour-long webinar in late-June focused on climate change and insurance.

Joining Kreidler were panelists Samantha Dunn, head of sustainability underwriting, vice president sustainability, Swiss Re, and Steven Rothstein, managing director of the Ceres Accelerator for Capital Markets at Ceres, a sustainability nonprofit organization that works with investors and companies.

“I really think we’ve come a long way in the sense that insurers are much more willing to step up,” the nation’s longest serving commissioner said. When Kreidler started his long campaign to get insurers to consider climate change in their investments and underwriting strategies, few were onboard with his ideas. The phrase “climate change” was a phrase rarely heard from the sector.

The ubiquitous attitude was that insurers had little to do with climate change, as their activities left a minimal carbon

footprint. Another common refrain was that insurance renewals come annually, so insurers need only be concerned with the here-and-now of this year — meaning their businesses couldn’t be affected by weather hazards, believed at the time to be 50 more years or more away.

However, over the past dozen years, numerous studies have increasingly tied contemporary weather catastrophes to climate change.

For example, a study out in June from an international team of scientists attributes nearly all of the observed fivefold increase in summer wildfires in northern and central California in the past half-century to man-made climate change. Fears of wildfires appear to be one drivers of decision-making on property insurance. A report from Gallagher Re shows the threat of damaging wildfires in conjunction with inflation and pricing challenges has led to a distressed insurance and reinsurance market, particularly in California.

Those fears go beyond the wildfire peril in Western states,

as property markets across the globe begin looking more like the highly difficult market in Florida as extreme weather patterns appear likely.

Fast forward a few years from the early insurer consensus on climate change, and numerous European reinsurers and insurers had established policies on investing and underwriting in the fossil fuel sector. The U.S. insurance community has slowly begun to follow suit.

Despite the sweeping change in attitudes toward climate change in recent years, Kreidler and his fellow panelists believe the industry must do more to help mitigate the impacts of climate change.

Disclosures & Investments

Rothstein echoed Kreidler’s sentiments, kicking off a discussion on the evolution of disclosures from financial world about investments and activities that help or hurt the climate change battle.

“I am in complete agreement with the commissioner that so much has been done, clearly, so much more needs to be done,” Rothstein said. “But just to

put it in perspective that, as he said, climate disclosure started with a form a while ago, and it was a great start back then. Then the world has shifted more to T.C.F.D., the Task Force for Climate Related Disclosure. Thousands of companies around the world are using that. It is a basis the S.E.C. is talking about, it’s a basis for the International Sustainability Standards Board. It’s the basis of California legislation and so much more.”

Another side of the relationship between insurers and climate change is investing, another area in which panelists agreed the industry has come a long way, yet they all agreed that investing has a lot of room to grow greener. Insurers across the globe have stepped up efforts to be more environmentally mindful of where they invest their money, bolstering green funds and helping to fuel growth of renewables.

“So, five years ago, there was not an institutional investor in the U.S. that had set a net zero plan, not a single one,” Rothstein said. “Today, the investment community, and this includes some insurers,

Mike Kreidler

Steven Rothstein Sam Dunn

is $60 trillion of assets under management that have set net zero plans.”

He added: “It’s not fast enough, but it is clearly moving in that direction.”

According to Rothstein, Ceres plans to soon release a report, in the final phases of completion, analyzing the investment portfolios of hundreds of insurers. “And what we’ve found — again, we’re still looking at the data, so we don’t have exact numbers yet — but there is a very small concentration. Roughly half of the fossil fuel assets are owned by less than two dozen companies of those 400,” Rothstein said.

Underwriting

Dunn discussed the activities and initiatives undertaken by one of the world’s largest reinsurers. Swiss Re has been closely evaluating its property/ casualty and life and health portfolios since 2019 through the lens of the United Nations’ 17 Sustainable Development Goals.

The UN’s 17 SDGs are call-for-action goals adopted by developed and developing nations in a global partnership. They include “No Poverty,” “Zero Hunger,” “Clean Water and Sanitation,” “Affordable

and Clean Energy,” “Industry, Innovation and Infrastructure,” “Reduced Inequality,” “Sustainable Cities and Communities,” and “Climate Action.”

“And honestly, the real lynchpin is SDG17, which is partnerships, right? It’s discussions like this. It’s working with our clients,” Dunn said. “No one company, civil society or government can solve the SDGs alone, but they give us a really good breadth of perspective. So, we run all of our portfolios — again using the SDGs as a lens — and we look at how our portfolios might contribute to the SDGs, as well as how they might be related to some aspects of harm to the SDGs.”

Swiss Re then asks its portfolio owners to identify risks and opportunities, as well as concrete actions, based on that assessment.

According to Dunn, such practices have led to a change in management mindset for the underwriting community.

“I’ve seen it open up a whole new level of dialogue that they can then have with their clients,” she said. Noticeable changes are also being seen on the “net zero front,” she added.

Swiss Re’s recent research on renewables points to strong

growth that insurers should be watching closely. Not just for investment opportunities, but as a source of customer growth, Dunn said.

“The world is set to add as much renewable power in the next five years as it did in the past 20,” she said. “Our Swiss Re Institute estimates that investments in green energy will generate additional energy sector-related insurance premiums of around $237 billion by 2035.”

Broken down by specific technologies, Swiss Re Institute estimates show offshore wind set to grow at 30% per year, onshore wind continuing to grow at 10% per year, while solar is expected to grow at a double-digit pace.

Direct-air capture is also grabbing investor interest. The U.S. Department of Energy is launching a five-year program to spend $3.5 billion to build four regional direct-air capture facilities, while private side investments coming in are up into the billions-of-dollars as well.

“So, if you look at the market for direct-air capture in 2021, it was a modest $2 billion,” Dunn said. “But we’re seeing companies predict really, really strong growth so that it has

the potential to be about $50 billion by 2030 and even as high as $4 trillion by 2050.”

The opportunities in investing in renewables are clear, but the underwriting risks are complicated. “They don’t have a traditional history and traditional data that we like to see as the industry, right? So, we’ve launched our Centre of Competence for Renewable Energy to help our clients navigate this complex risk and support on the transition,” Dunn said.

The world is at a point at which the decision to invest in or underwrite fossil fuels versus renewables is no longer a question, but a mandate. And that mandate is coming from the market.

“Fifty-two percent of insurers will not insure new coal transactions, and it’s strictly because of the financials, because they believe, and it’s true, that it’s more expensive to get that next kilowatt from a coal plant than it is from solar today,” Rothstein said. “So, it’s not a good financial return, as well as a climate impact. So, we are moving in that direction, not fast enough. Some companies are moving a lot faster, there’re some that aren’t recognizing these risks and don’t see the opportunities … so we have to all move faster.”

Watch the “Sustaining Sustainability: How the Insurance Universe Deals with Evolving Risks and Dispositions” webinar on demand at https://www.insurancejournal.com/research/ research/how-willinsurers-sustainsustainability/.

Idea Exchange: Cybersecurity

How Businesses Can Guard Against Email Scams

By Anthony Dolce

Bbusiness email compromise (BEC) is one of the most financially damaging online crimes, according to the FBI’s Internet Crime Report. In 2022, there were nearly 22,000 related complaints, and businesses lost more than $2.7 billion to these scams. BEC is a scam that targets businesses rather than individuals — although there are similar types of consumer-focused scams called email account compromises.

While BEC always involves taking over or imitating a business email account, the scheme can play out in several ways. For example, the scammer might take over or imitate an email from an executive. They might then reach out to an employee on the finance team with an urgent request for a money transfer and have funds sent directly to the scammer’s account. Or the fake executive might ask an employee to buy and send them gift cards, which they can quickly cash out or resell.

In some BEC schemes, the criminals attack from a different angle. For example, rather than targeting a business directly, they could compromise a vendor’s email account and monitor the email account

activity. After the vendor sends a legitimate invoice, the scammer quickly follows up as the vendor, apologizes for a mistake in the payment information and asks for the payment to be sent to a different account.

BEC is not always about money transfers. Some BEC attackers might be after employees’ personal information or data about the company, which they can then sell on the dark web or use as the basis for a different attack in the future.

Unlike the scam emails that get sent to thousands of people at a time, the criminals running BEC schemes often conduct well-researched and coordinated attacks. For instance, the scammer might spend days learning about the company and monitoring its social media activity. They might even wait until the business is at a conference before springing into action and can use the trip as the basis for an urgent request. They might pose as the business owner for example and send an email with an urgent wire transfer request because a merger or acquisition was just made and there’s a need for the money right away. If an employee responds, the business might be out tens of thousands of dollars.

Scammers are also quick to test new methods just as successful businesses

pivot to address changing circumstances.

In February 2022, the FBI warned about the rise of BEC schemes involving virtual meeting platforms during the previous three years. The scammers send a meeting request as the CEO or CFO of a company, use deep fake audio to replicate the executive’s voice and then request a funds transfer during the meeting or in a follow-up email.

Phishing

In most instances of BEC, as well as other cyberattacks, phishing plays a part in the fraud. However, even when phishing is not the leading cause of an attack, it’s often used by cybercriminals in preparation of the actual attack. To protect against phishing, BEC and other cyber threats, businesses should be cyber risk aware. Training employees and implementing email security protocols can help prevent these types of attacks and reduce losses.

Steps to Help Protect the Business

1. Establish an electronic funds transfer (EFT) policy. This requires all employees to confirm that any emails requesting transactions like a direct deposit, or an electric funds transfer are legitimate. Employees can verify if these requests are authentic

by calling the sender directly, whether that’s another employee, vendor or supplier. It’s also important that employees do not contact the payee with any email address or phone number that is included in the electronic funds transfer request. This contact information can easily be fake and a part of the scam. Employees should always rely on contact information that comes from the business.

In addition, it is important to make sure employees can recognize red flags in scam emails such as look-alike or different reply-to addresses. Scammers might send an email from an address that looks very similar to the company’s email such as ceo@c0mpany.com instead of ceo@ company.com, or they can make the from address look exactly like the company’s, but the reply-to address is the scammer’s email account.

Another red flag is short messages that create a sense of urgency and a need for secrecy. The scammers could use a false pretense to ask for a quick response to an urgent request and keep recipients from asking others for advice. For example, the threat actor might ask an employee to buy 15 gift cards today and not tell anyone because they’re going to be a surprise thank you gift for the team tomorrow.

Businesses should also beware of unusual timing and requests for changing account information. The attack could start during off-hours or a holiday, which plays into the idea that it’s an urgent request and could keep the recipient from verifying details with others. While a change in the payment instructions, direct deposit forms or other account information could be legitimate, it is also a red flag. It’s important for employees to try to verify the request by phone using a number that’s not listed in the email.

2. Check the real sender domain in emails. Many BEC scams are often difficult to catch because they rely on a mixture of technological know-how and social engineering — the psychological manipulation of someone. For example, an employee may receive an email that looks like it was sent from your vendor with a link to download and pay an invoice. However,

this link might open a malicious webpage or harmful content. In situations like this, employees need to verify that the sender is legitimate.

To verify an email, it’s important to double check the email address from the sender. Many scammers use names that look like they’re from someone in the company. Employees can also hover over the email address and look at the domain that the email is coming from to make sure that it’s from a trusted source. This includes hovering over any embedded links within the email to see the URL. If it does not match with what is displayed in the email or the person or company that’s sending the email, it’s likely phishing.

3. Protect email domain and authenticate emails. There are three email security protocols that can help prevent phishing attacks by providing proof that an email is legitimate. While each can provide adequate protection, it is recommended to combine all three protocols for the best results.

The Sender Policy Framework (SPF) protocol restricts who can use an organization’s email domain, while the DomainKeys Identified Mail (DKIM) and Domain-based Message Authentication practices ensure that the content of an email hasn’t been altered. The third security procedure is called Reporting and Conformance (DMARC), which ties SPF and DKIM together. It provides instructions about what to do with an unauthenticated email (no action, quarantine or reject).

4. Use multi-factor authentication to avoid phishing attacks. If a phishing attack is successful in stealing user access information, multi-factor authentication (MFA) can help prevent the attacker from gaining access to the computer systems. With MFA, there’s a greater need for more information or details in addition to login credentials. For example, it may require a PIN or approval from another device to authorize the login.

5. Create a phishing training and awareness program. Training is the best

way to prevent a BEC attack and should include education on the definition of phishing attacks with examples, regular testing of employees’ knowledge, as well as resources and information on what employees should do if they think they’ve fallen for a phishing attempt. Businesses may also want to have additional trainings for executives and finance teams as they are often targets for BEC attacks.

There are also different training tools businesses can use. For instance, many scammers start an attack by trying to trick someone into installing malware that they can use to take over or monitor an email account. Some software vendors offer free phishing simulation tools that companies can use as a part of their ongoing training.

If the Company Falls Victim to a BEC Attack

After a BEC attack, the business should immediately contact the financial institution to see if it can reverse the transfers or payments. Companies can also work with their IT team to make sure devices and accounts are secure, which may involve changing passwords and updating security measures. Additionally, the business should report the incident to the FBI’s Internet Crime Complaint Center and include as many details as possible because the report can help the FBI track and stop these types of crimes.

Partner with Experience

From phishing attacks to ransomware, businesses of all sizes and individuals face many cyber risks. That’s why it’s important to partner with an experienced insurance company that can help protect business operations. Cyber insurance should be an important part of any company’s incident response plan with a holistic approach that provides coverages encompassing data breach, ransomware, and business interruption. Threats to cybersecurity should be taken seriously. Companies must prepare and have tactics ready to go in case of an incident, because it is likely that any business can be attacked.

Dolce is head of Professional Liability and Cyber at The Hartford.

My New Markets

Museums

Market Detail: Markel provides all-risk coverage for the collections and changing exhibitions for private and public museums. Coverage includes protection for temporary and long-term loans including transit both to and from the museum. $750,000 minimum premium; appointment required.

Available Limits: Not disclosed.

Carrier: Markel Insurance Co.; admitted; rated A Excellent by AM Best.

States: Available in most states plus District of Columbia. Not available in Alaska and Hawaii.

Contact: Jen Likander; jen.likander@ markel.com; 804-864-3788.

Transportation

Market Detail: Commonwealth

Underwriters Ltd. offers coverage for the transportation industry. Classes include auto liability, general liability, cargo, warehouse helga, physical damage, excess and garage. Specialty classes include local/ intermediate, long haul trucks, dump trucks, hired/non owned. Has pen.

Available Limits: Not disclosed.

Carrier: Not disclosed.

States: Available in District of Columbia, Maryland, North Carolina, Pennsylvania, South Carolina, Virginia, West Virginia.

Contact: Sarah Koolhof; skoolhof@ commund.com; 800-396-6226.

Homeowners Jewelry & Fur Floaters

Market Detail: Halcyon Underwriters offers homeowners jewelry and fur floaters. Halcyon says its underwriting practices, client retention, continued organic growth, data analytics, risk management and efficiency deliver profitable performance results for its carrier partners in both soft and hard markets earning Halcyon preferred designations with most of its carrier partners. Has pen; appointment required.

Available Limits: Not disclosed.

Carrier: Chubb and Lexington; admitted and non-admitted; rated A- or better by AM Best.

States: Available in 50 states plus District of Columbia.

Contact: Sarah Cadle; scadle@halcyonuw. com; 321-527-2192.

Security Guard Liability Program

Market Detail: Izzo Insurance, a division of Hull & Company LLC, provides all lines of insurance coverage for the security guard industry. Hull & Co. has specialized in the security industry since 1980 and says its expertise, profitable underwriting results and favorable market conditions have enabled it to combine competitive premiums with extremely comprehensive policy forms. Available coverages include primary GL, Follow-Form Umbrella (including E and O), and four exclusive Workers’ Compensation markets in addition to Performance & Fidelity Bonds and EPLI carriers. Has pen.

Available Limits: Not disclosed.

Carrier: Rated A by AM Best.

States: Available in most states plus District of Columbia. Not available in Alaska.

Contact: Kelly Hafey; KHafkey@ IzzoInsurance.com; 800-800-1704.

Orthotic and Prosthetic Program

Market Detail: VGM Insurance Services offers an orthotic and prosthetic program. For over 30 years, VGM Insurance has been dedicated to creating specialty programs and customized solutions for the unique needs of the businesses it serves. Customers include orthotic and prosthetic practices and services, custom fitters, central fabricators, prosthetic manufacturers, post-mastectomy/women’s health boutiques. Coverages available: commercial general liability, professional liability, excess liability, property, business auto, workers’ compensation, directors and officers, employment practices liability, cyber liability, surety bonds. Has pen.

Available Limits: Not disclosed.

Carrier: Admitted.

States: Available in 50 states plus District of Columbia.

Contact: Bill Wilson; info@vgminsurance. com; 800-362-3363.

Commercial Marine Companies

Market Detail: The American Equity Underwriters Inc. (AEU) is the program administrator of the American Longshore Mutual Association Ltd. (ALMA), a group self-insurance fund authorized by the U.S. Department of Labor to provide USL&H

coverage for the liabilities of its members under the United States Longshore & Harbor Workers’ Compensation Act. Shipbuilders, ship repairers, marine terminal operators, stevedores, marine contractors and other waterfront employers may apply for ALMA membership through their insurance broker. Coverage: United States Longshore & Harbor Workers’ Compensation Act; Defense Base Act; Outer Continental Shelf Lands Act; Nonappropriated Fund Instrumentalities Act. Plans include: first dollar; single and multi-year programs; loss-sensitive plans; deductible; excess over qualified self-insurance. Target classes: A minimum of 10% of the company’s payroll must be USL&H exposure (unless incidental-only); ship builders; stevedores; terminal operators; barge repairers; marine construction; ship repairers; steamship agents; luxury yacht builders; coal docks; offshore industries. The following preferred classes may also have USL&H (possibly incidental-only) exposure: heating and A/C contractors; engine repair; fire extinguisher servicing; sheet metal work; architects and engineers; refrigeration repair; pest control; carpentry; electricians; welders; painters; wallboard installation; communications repair; crane installations and repair; concrete/cement work. $10,000 minimum premium; has pen.

Available Limits: Federal acts — statutory; employer’s liability — $1 million.

Carrier: American Longshore Mutual Association; rating not required; U.S. Department of Labor approved.

States: Available in all 50 states plus District of Columbia.

Contact: Marketing Department; aeu. marketing@amequity.com; 251-690-4230.

www.mynewmarkets.com

Idea Exchange: Minding Your Business

The Continual Producer Dilemma

The shortage of good insurance producers is still a valid concern for the industry and the problem has only grown worse over time. Oak & Associates must get an average of one call a week with clients and new potential clients, calling to see if we have any good producers with books, looking for a new home.

their market share if that key producer dies or retires without a backup to retain the accounts.

By Catherine Oak

Does this situation still threaten the survival of the independent agency system? The short-term answer is yes, but the long-term answer is not clear due to developing changes explained later in this article.

In the short term, this lack of good producers should concern us all. A retiring agency owner without a producer to perpetuate his or her book will have limited options and may not command top dollar in a sale to a third party. Insurance companies should be concerned about

Youth is the lifeblood of an industry. However, we see very few young property/casualty producers in our seminars/ conventions, employed by our clients, or calling in for consulting assistance. There does seem to be an increase in young producers that sell non-standard auto and employee benefits. Unfortunately, there is very little crossover of producers between these different lines of business.

The young P/C producers we see are usually the children of the principals who are motivated by the desire to follow in their parents’ footsteps and to perpetuate the family business. For young people with no family ties to insurance, there is little, if any, motivation to get into the industry.

Q: How many children (from non-insurance families) say they want to sell insurance when they get older? A: None.

The Core Problems

Based on today’s climate of high carrier

production volume commitments, the days of a young new producer starting from scratch are over. Today, new P/C agencies are for the most part created by experienced producers splitting from their current employer usually with part or their entire book. The incentive to sell insurance in their own firm is reserved only for the “proven” producer. There are clusters or networks these proven producers can join and pay a fee to access markets, as well. New producers must establish themselves as employees until their book is big enough to split off. The exception, however, is the agent that sells non-standard auto and employee benefits, which do not typically have the volume commitments owed to the carriers.

New Insurance Recruit Avenues

There is no institutional educational conduit for young people to enter into the insurance industry. An 18-year-old high school student typically will have no knowledge of career opportunities in

continued on page 42

Idea Exchange: Minding Your Business

continued from page 41

insurance unless a local agent shows up for career day. In some locations, Project Invest introduces high school students to insurance but this is very limited. As an industry, we need to promote career opportunities to young people.

There are now some universities with specialty Risk Management and Insurance majors, however, there are still not a lot of these. If you google Risk Management degrees, you’re likely to find only 10 to 15 schools nationwide that have this specialty.

Finally, most agency owners cannot or will not make the necessary investments to train and develop young producers. The majority of agencies are relatively small — fewer than 20 to 30 employees — and these firms usually do not have the resources to sponsor a new producer until he or she is self sufficient (i.e., pay a reasonable salary while the producer validates his or her compensation). Yet this is the type of firm whose survival is directly linked to the development of new producers.

Sometimes insurance companies will cover some of the costs associated with producer development, but this has been waning over the years.

Producers are the sales force of the insurance companies. What other industries do not train and support their own sales force? Companies need to step up to the plate and provide more training, education and financial support for new producers for their key agencies, at a minimum.

Producer Development

Agency owners cannot individually change the first two core problems — difficulty starting new agencies from scratch and the need for institutional training for new producers. Many agencies (and the industry) cannot afford to wait for that ideal experienced producer with a book of business to show up. Owners can and must bite the bullet and make the financial investment in new unproven sales personnel.

But what is the best source for this “virgin material” in today’s low unemployment environment. It is really important

to look for new producers in a strategic manner because the cost of failure is expensive in both dollars and lost time. A random shotgun approach often produces poor or no results at a high cost. Agency owners need to understand their current agency “personality” and resources and then map out the goals for future sales.

Producers from Other Industries

Specific producer sources can then be targeted, which will streamline the process and increase the chances of success.

Agencies need to seek out new producers that can be exploited for their “centers of influence.” For example, an agency that has an existing niche or wants to develop that niche should seek out people from that industry, especially salespeople.

A successful salesperson is familiar with the prospect’s industry and knows the intricacies involved, understands the special needs of the client and why they may be different from another industry. This salesperson will be more confident and display a higher level of interest in the client and thereby win respect from the client. Also, that new producer might have been a successful salesperson for their prior industry and already have contacts that will prove invaluable to their new employer.

In general, it is often easier to teach an outsider insurance than to teach an insurance expert the technical aspects and unique requirements of a specific trade. These new producers can be paired up with seasoned insurance producers and operate as a team. The new, well-connected producer opens the doors and the skilled insurance producer closes the deal. Of course, the new producer will need to take the time to learn insurance, get licensed and hone insurance sales skills — and this is no easy task.

Look for new opportunities. Recently there have been hits to the high-tech industry. If a firm wants to create or expand a high-tech niche, it is important to seize the moment and take advantage of the current turmoil. High tech may be down, but it is not out. Some high tech salespeople might find the insurance industry a calm, stable environment from

their previous employment!

A good selling point to attract salespeople from outside industries is that insurance producers can build up a sizable, renewable book of business in just a few years. The insurance industry is somewhat unique in that the salespeople can make a decent living off renewals and do not have to constantly sell new clients. This might prove to be a pleasant surprise for new producers from other sales positions.

There are still other sources for new producers. Schoolteachers during the summer or even retired people should be tapped into. These sources might have a stable income stream and could be flexible on their sales compensation — namely, on a commission basis rather than a salary.

Look for competitive people such as athletes and coaches. They are also often well connected in the community and don’t usually have ways to greatly increase their income. They tend to appreciate and handle the work required for the sales process that culminates in small victories. A “sales personality” and inner drive are the most important aspects to seek out.

Insurance can be taught, but teaching a sales attitude is not easy.

Keep in mind that usually young, new producers are selling non-standard auto or life insurance. Their initial attraction to their current job most likely centers on the ability to control their own destiny. The more they sell the more they earn. The need for constant, large volumes of sales, however, tends to burn out otherwise good salespeople. Just like with salespeople from other industries, the steadier aspect of commercial lines and the ability to build a renewal stream in their book of business will make the transition more attractive to them.

Successful young benefits producers most likely will not be interested in changing over to selling commercial lines. This is because their current position is as good as or probably better than what a property/casualty agency could offer. Employee benefits is a growing sector of insurance and the rates keep going up, perhaps 5% to 10% each year. Also, once a benefits producer is established, the client base tends to be more stable than many

commercial lines accounts.

If you can’t beat them, it is better to join them. The formula for many successful agencies is to have a significant portion of their overall revenues from employee benefits. An agency should direct some new producer talent to sell (or better yet cross sell) employee benefits. For some people selling employee benefits seems to be easier to learn. Perhaps because the key knowledge is focused primarily on the products rather than both the products and the uniqueness of the client’s business (as in commercial lines). Often insurance companies will assist benefits producers with the sale.

New Producer Success

Studies have shown that the success rate of new producers is not high. Proper screening and training should help improve the quality of producers hired and their success rate. Use testing services such as Caliper and Omni to evaluate the prospect before hiring them. Never let a new recruit learn only by trial and error.

Management must provide mentors and sales goals to guide the new producer to success. Also, having a producer focus on niches and programs will more likely result in more success for the producer. Buying leads in the niches and centers of influence the producer is connected to will also help.

Other Solutions

It is not a radical statement to say that the insurance distribution system in 10 or 15 years will look very different than today’s system. The previous market has squeezed agency owners and only productive agencies survived. Customer and carrier expectations are constantly increasing. Insurance is entering a new era (kicking and screaming a little along the way).

In the long term, the internet will change the way sales are done. Clearly, the internet will not completely replace

an actual salesperson, especially for commercial lines. It will (and is) revising the way information flows from the client to the agency and then to the insurance company. Productivity should increase and thus producers should be able to handle more clients and larger books of business. Therefore, in the future the need for producers might diminish since each producer is taking on a bigger piece of the pie.

For many agencies their current internal systems can be (or should be) restructured to leverage the existing sales force before new producers are employed. It makes economic sense for the “super producers” to be selling and not servicing accounts. These agencies need to establish in-house procedures to make sure that the CSRs and account executives handle most or all of the servicing of accounts (i.e., mail, phone calls, endorsements, claims, etc.). Therefore, the owners and producers are then free to seek out new clients and are not burdened with the day-to-day servicing, especially of the small accounts.

Summary

There is no silver bullet to the issue of the producer dilemma, which is having a noticeable impact on the industry. Each solution has its own risk and will take time and money. The ideal solution will vary for each agency. Agencies need to learn how to leverage the existing sales force. This will mitigate short-term problems and create long-term benefits for the agency.

Most important, agency owners need to take matters into their own hands and develop the future sales force. The key is to hire a self-motivated person, one who has the attributes important to good salespersons. Being proactive will have direct benefits for the agency — and may improve the industry as a whole.

Oak is the founder of the international consulting firm, Oak & Associates, based in Bend, Oregon and Sonoma, California. The firm specializes in financial and management consulting for national and international insurance agencies, including valuations, mergers and acquisitions, clusters, sales and marketing planning, as well as perpetuation planning. Phone: 707-935-6565. Email: catoak@gmail.com.

Idea Exchange: Agency Management

The Secret Sauce: The Keys to Long-Standing Client Relationships

Recently I renewed two large accounts for the twenty-sixth time. Over the years, I’ve found the loyalty of these particular clients professionally and personally rewarding. It’s also created a stable source of revenue for a long time.

option for the client.

By Tony Caldwell

Though these two clients are among my longest tenured, we have many long-time clients. Why is that? What is the secret to sustaining long-term client relationships? I believe it’s good salesmanship that comes to play repeatedly during the lifecycle of the account and superior customer service.

Don’t Rest on Your Laurels

Whether a client comes to our agency because we offered a lower price, better coverage, a well-known carrier partner or the promise of better service, someone had to convince them to purchase the policy. If you want to keep the client long-term, you’ll need to revive that salesmanship to reassure them when times get tough and help them continue to assess their changing needs.

It may not be easy to maintain that level of quality salesmanship, particularly if the original producer is retired, but good salesmanship is critical to the long-term stability of the account.

Below are three reasons to keep your foot on the gas when it comes to salesmanship if you want to succeed with clients long-term.

1. Long-term accounts are resold every year.

One hallmark of producers and agencies with large, stable books of business is that they don’t rest on their laurels. They work hard to maintain their existing accounts. The primary way they do this is by retelling the story of why the current, or proposed, coverage and service the agency is providing continues to be the best

A good producer is involved in the relationship, and is up to date on the client’s business and insurance coverage, not because of service responsibilities (though they should be a part of that team) of the account, but because they are constantly looking for ways to reinforce the value proposition that enticed the client to sign with the agency.

If you think about your experiences in going to church, or voting in elections, you’ll recognize that both the preacher and the politician have a limited list of topics they discuss. They repeat the same themes because they know that in order to keep people coming back, they need to continually remind them of why they made the decision to belong or vote in the first place. The producer of long-term relationships never forgets this.

2. The producer is part of the client relationship

“team.”

Roger Sitkins, the well-known sales coach in the independent agency industry, is famous for what he calls “the service handoff,” where the producer steps away as the primary contact for the account during the year so that she can return to selling. This does not mean the producer’s role in the account is finished until renewal time.

The producer isn’t just the initiator of the relationship but works as a team with the various agency service professionals. It’s teamwork, not delegation, that creates the depth of a relationship. Coupled with knowledge and account experience, this teamwork drives decades-long renewals. There are many details and many team members involved in the management of a commercial insurance account and the producer should stay cognizant of all

of them. How else can she continue to develop the powerful story of why the client is where they need to be or sell them the new products that fit their changing needs?

3. The producer holds the team accountable.

In many agencies, account service is a delegated responsibility, as is marketing. How the account is handled internally may not be something the producer determines but it is something for which she is responsible. Afterall, the producer is the quarterback of the team and the person on that team most directly affected by renewal or nonrenewal.

A producer can’t, with integrity, argue that the solution proposed is the best for the client if she doesn’t know it as fact because she wasn’t intimately involved. When people are busy, the natural reaction is to take short cuts, but the salesperson is ultimately the person that needs to see that this doesn’t happen to her accounts.

Think Customer Service

While good salesmanship is critical in retaining long-term clients, it wasn’t just the selling job that kept the client with the agency for years. It was the excellent service coupled with the sales story each year that created believers, and renewers. Agencies with great retention recognize this and take it to heart. When you think about it, the customer service team is really part of the sales team as the account is resold, or not, in every encounter with the agency from claims to billing disputes. Great service people focused on long term retention of their accounts follow these best practices:

1. They see the account as theirs. They take ownership.

The two accounts we just renewed for the 26th time have customer service people who know the accounts inside and out. They can always refresh their memories because they extensively document

everything in the agency management system. In my experience, great customer support people fight tooth and nail to keep accounts when agencies reorganize, even if it means a heavier workload.

2. Knowing the account intimately, they suggest coverage options. They consult.

A great service person thinks about all the ways the client isn’t covered or could enhance their coverage for better protection. They suggest things the producer may have overlooked. They create sales as a byproduct of caring.

3. They remind the people who work for the account of their value. They sell.

While many service people may shy away from closing a deal, they are great at making suggestions. They find opportunities all year long to recommend solutions and products that could reduce a client’s risk, solve a problem or lower costs.

Seize the Day

The industry is currently in a hard, and hardening market driven by economics affecting our carrier partners. We are also hanging in a “good” economy that virtually everyone believes will turn south soon. This will naturally drive insurance customers to worry about rising insurance costs. As a result, agencies focused on long-term success would be wise to do the things that create long-term clients as every single one is, in a sense, more valuable in a time of economic uncertainty or turmoil.

During tough times like these, many clients consider shopping their insurance. They’ll be tempted to move their policies from producers and agencies that don’t focus on salesmanship and customer service.

Agency owners who choose to focus their agencies on these two staples will reap the benefits of long-standing client relationships with assured renewals. If you want to prosper and grow, particularly in tougher times, focus on how you can keep your clients forever.

Caldwell is an author, speaker and mentor who has helped independent agents create more than 250 independent insurance agencies. Website: www.tonycaldwell.net. Email: tonyc@oneagentsalliance.net.

Idea Exchange: Emerging Risks

3 Emerging Risks to Watch: The Rise of Robotics, Infrastructure Spending, Vehicle Subscriptions

Years ago, it may have been hard to imagine a time when robots could have nine-to-five jobs and handle household chores, drivers could subscribe to luxury vehicle features like heated seats and big infrastructure projects would become common across the country.

By Lee Shavel

Remarkably, these aren’t future endeavors — they’re happening today. And they represent three emerging risks insurers should keep track of as they continue to develop.

The Rise of Robots Raises Myriad Risks

Robots have sparked the human imagination for well over a century, but the very first robots could arguably be traced back to 1500 B.C.E., when Egyptians constructed water clocks with human figurines to strike the hour bells. Humans have been devising ever-more ambitious and creative ways to outsource their labor to machines ever since.

Commercial robots have been integrated into industries such as manufacturing, law enforcement, healthcare, warehouses, agriculture, automotive and more. Today, an estimated 3.4 million industrial robots are operating globally. By one account, sales of industrial robots reached an all-time high in 2021, with overall market penetration doubling in the past six years.

While robotic workers may help increase safety and productivity, they are not completely without risks. Potential issues include distraction to human workers, surgical errors, cyber data breaches and property damage from a robot in motion.

As the use of robots grows, the potential for robotic-related claims involving bodily injury, property damage and financial loss may rise as well, presenting insurers with the potentially thorny complexity of determining the cause of a

robot-related accident.

Robotic concerns may also extend to homeowners insurers, as well. Today, consumers can buy a robot to vacuum or mop their floor, mow the lawn, clean a pool or wash out gutters. As home robots grow in sophistication and popularity, the proliferation of these devices may raise some concerns among homeowners insurers.

Researchers have demonstrated that some smaller household robots can be remotely commandeered and piloted around a home, snap photos or be loaded with malware. And if lithium-ion batteries power the robots, they could potentially pose a fire risk.

Will Infrastructure Spend Lead to More Shortages and Inflation?

The recent manufacturing and re-shor-

ing boom in the U.S., where companies are looking to bring supply chains closer to home, is creating potential opportunities for new business but also is raising concerns among some insurers about supply chain strains and inflationary pressures.

As part of the 2021 Bipartisan Infrastructure Act, the U.S. plans to invest $550 billion in a wide range of infrastructure projects — from reducing PFAS contamination in the nation’s drinking water to fortifying aging bridges, dams, ports and other structures against the ravages of age and the elements.

The benefits of these projects for insurers include potential new business opportunities in sectors such as transportation, manufacturing, energy, electric vehicle charging and construction. Meanwhile, infrastructure investments that enhance the country’s ability to mitigate, respond,

and rebuild following catastrophes (be they natural or cyber-related) may help reduce the severity of these events and minimize the downtime businesses and individuals experience as a result.

On the downside, as we learned during the pandemic, a boom in construction (in this case, residential) strained supply chains for materials such as lumber and drove reconstruction costs skyward. High demand may also generally lead to increased inflation in the impacted industries. Demand for construction workers, who are reportedly already in short supply, may further exceed supply, leading to possible delays in projects and property reconstruction after loss events.

Vehicle Subscription Features

These days it may feel to some people that everything is a subscription-based service, so it’s perhaps no surprise to learn that even some automakers have begun putting several vehicle features, such

as heated seats, behind a subscription paywall.

While the move may yield more revenue for automakers, vehicle subscriptions could complicate matters for insurers. Consider: Even if an owner doesn’t opt to pay for a given feature, the hardware will likely have to be included in the vehicle, which may increase the overall cost of new vehicles. This, in turn, could potentially lead to higher premiums and possibly increased costs for repairs (and thus insurance claims) for features that the owner may not use or even have had access to at the time of the accident.

While this may sound relatively innocuous for something like heated seats, it could cause potential issues for a subscription-based vehicle safety feature. Insurance companies may offer discounts for certain safety features that are either included or can be added on to vehicles at purchase. But what happens if some of these safety features are paywalled behind

a subscription package that the insured either does not purchase or simply chooses not to renew during the policy period? Could this lead to an insured’s premium reflecting a safety feature in their vehicle that may not actually be active should there be a crash?

Subscription services may also provide a new outlet for hackers to exploit — the more software-enabled features, the wider the potential attack surface for cybercriminals.

Whether it’s robots handling household chores, luxury vehicle features or an influx of electric vehicle charging stations, our world is rapidly changing. How insurers price and manage risk must quickly change with it to keep pace.

Shavel is president and chief executive officer of Verisk, a data analytics and technology partner to the global insurance industry. He brings nearly 30 years of experience advising and leading publicly traded companies to Verisk.

“Insurance Journal keeps me up to date on industry trends and the state of the marketplace.”

Mackenzie McNamara, CLCS - Area Assistant Vice President at Gallagher & Satisfied Insurance Journal Subscriber

Idea Exchange: Ask the Insurance Recruiter

Is Insurance Recruiting Being Impacted by Artificial Intelligence?

The movie Terminator 2 is the first thing that comes to mind when I hear about artificial intelligence. A universe where machines take over our daily lives seems so distant from my reality. Then I’m reminded that I use AI every time I unlock my iPhone with face ID. Maybe it’s not so far off after all.

That’s the message, and question, for this article. How much of an impact is artificial intelligence making already on insurance industry recruiting? To try and answer this question, I thought about the biggest pieces of the recruiting process where insurance companies and agencies spend the bulk of their time.

Can ChatGPT Write Better Job Advertisements?

I consult with insurance organizations on how to write better job advertisements. Most companies post the full job description because recruiters don’t have the

time or know how to create a compelling piece. Artificial intelligence is appealing because it could write the advertisement in minutes.

I played around with ChatGPT. Using phrases like “What is the job advertisement for a commercial insurance account manager?,” “What are job responsibilities for an insurance agency president?” and “Job posting for insurance claims specialist,” I wondered if AI would give me a comprehensive write up. The result was “Meh.” ChatGPT generated basic, 200- to 300-word job descriptions. Nothing spectacular but nothing horribly misguided either.

At this point, AI like ChatGPT will not give you a creative, compelling job advertisement, which means it isn’t likely to save you any time generating job ads. However, if you don’t have a job description for a particular role, you could use ChatGPT to build a starter template.

Can AI Help Source and Screen Insurance Candidates?

Have you ever wished the perfect candidate would fall in your lap to fill a job opening? If so, can AI help you find candidates to speed up recruiting?

By Mary Newgard

On some level AI already helps you source candidates. Job boards like LinkedIn and Indeed have algorithms that push notifications about jobs and people based on their profile or resume in the database. When that happens, those individuals may apply for the job, and as a result, you may see more applications for your job openings.

Regarding screening, AI saves recruiters time combing through Applicant Tracking Systems using keyword combinations to find resume matches in your database.

According to AIRHR.com, “With 52% of recruitment leaders saying that identifying the right candidates is the most challenging part of their job, it seems clear the experts feel this [screening] isn’t a task that can be done with people power alone.”

My takeaways are:

• My team’s experience with job board algorithms has been mixed. The more sophisticated and unique the insurance requirements are in your job opening, the less precise the algorithm is with suggested matches. You’ll probably benefit from AI to fill more generic, low level and non-insurance specific positions.

• AI’s ability to match candidates to jobs in your database will only be as good as the information you’ve entered. This is where efficient processes and defined best practices are paramount. There’s a lot of manual labor (i.e., data entry, coding, candidate pooling, and documentation) that your hiring team and recruiters need to do for AI to match resumes with your jobs.

• From everything I’ve read in HR and tech studies, AI is most beneficial for very large companies. I suppose there’s no bad tool when you’re trying to hire thousands of people, but that’s a miniscule percentage of insurance companies and very, very few agencies. If your firm isn’t in the top 1% of company size and hiring activity,

then I don’t think you can expect AI to replace traditional recruiting strategies.

• Recruiting is still an interpersonal process. Think about how many good people you’ve hired who had terrible resumes. Computers don’t operate in gray space. Even with your best coding, database management and keyword terms, you still need a person’s intuition and experience to find the best people.

Long story short, we’ll continue to see AI evolve as a tool in the recruiting process rather than a replacement altogether. No

July 3, 2023

HDI Global Insurance Company

161 N. Clark St., 48th Floor Chicago, IL 60601

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 requested 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.

July 3, 2023

United Fire & Casualty Company

118 Second Avenue SE Cedar Rapids, IA 52401

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 requested 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.

machine or mathematical equation can tell your company’s story, create brand differentiation, connect with others, build relationships, and drive the hiring process quite like people.

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

July 3, 2023

New York Life Insurance and Annuity Corporation 51 Madison Avenue New York, NY 10010

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 requested 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.

July 3, 2023

Point Specialty Insurance Company 1800 North Point Drive Stevens Point, WI 54481

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 requested 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.

Closing Quote

The Industry Shouldn’t Compete on Cybersecurity

With cyber risk growing for small business-

es, the insurance industry should cooperate on cybersecurity.

By Keith Savino

The National Cybersecurity Alliance reports that small and midsize businesses are “easy targets” for cybercriminals. Small firms represent 58% of cybercrime victims, according to SCORE, a business mentoring group funded in part by the U.S. Small Business Administration. And, according to SCORE, “60% of small and medium businesses are forced to suspend operations and, in many cases, never reopen” after they experience a cyberattack.

That’s why it’s critical that all industries prioritize effective cybersecurity — and the insurance business is no exception.

Our industry’s reputation is grounded in client trust. Besides its people, trust may be an insurance agency’s most important asset. Trust is key to maintaining client relationships, which drive an agency’s value. A data breach that compromises our clients’ proprietary and personal information could erode that trust and prove to be debilitating to our business.

Collectively, carriers, agents and technology partners should work together to improve cyber security and efficiency. Let’s cooperate and not compete on security.

The industry has taken many

steps to improve cybersecurity and protect consumer information through both secure and efficient processes and tools, such as multifactor authentication (MFA).

State regulators also are increasingly requiring the industry to enhance its cybersecurity practices for external connections, which includes employing MFA. For example, the New York Department of Financial Services, which regulates insurers operating in the state, instituted cybersecurity regulations in 2017 that require companies to establish information security programs to protect information systems. Entities covered by the regulation are required to use MFA. DFS noted in a 2021 guidance that MFA is “an essential part of cybersecurity hygiene,” and a “lack of effective MFA has been the most frequently exploited cybersecurity gap in the Cybersecurity Events reported to the Department.”

The National Association of Insurance Commissioners also has developed a model cybersecurity law that is being adopted by state departments of insurance.

These are positive steps toward better cybersecurity for the industry overall. But they also have created a more confusing and cumbersome process for agents, who typically work with an average of 16 different carrier partners. Because there are no consistent cybersecurity best practices or systems, each insurer has its own cybersecurity requirements and MFA systems.

Something as important as cybersecurity shouldn’t be

complicated or cumbersome for an industry that manages personal client data every single day. Organizations like ID Federation, a nonprofit alliance formed by industry leaders, recognized this challenge and knew the industry needed a better way to efficiently do business and protect our clients’ data. Working together with agencies, carriers and technology providers, ID Federation developed SignOn Once, which eliminates the need for multiple IDs and passwords, thus simplifying the authentication process.

ID Federation maintains a “trust framework” that members agree to and abide by to become trusted partners in the SignOn Once system. Agents can access their participating carrier partners through a single MFA entry point, which for most agencies is their agency management system. There is no software or service to purchase. No one makes a profit from using SignOn Once, but everyone benefits.

Multiple carriers and technology partners are members of ID Federation and are SignOn Once trusted

partners, including Vertafore and Applied Systems, the two management system providers covering more than 80% of U.S. agencies.

I have been using SignOn Once with The Hartford for many years, as this was the first carrier to implement. Now, Nationwide is the first carrier to implement with both Applied Systems and Vertafore, and more companies are coming on board. The more industry partners who participate in the SignOn Once system, the greater the independent agent channel benefits.

We as an industry already compete on many different fronts: price, product, service, coverage and underwriting. But cybersecurity is not something we should compete on. We have a responsibility to improve security across industry partners. We can do this by working together to drive common, efficient practices to enhance security.

Savino is a managing partner at Broadfield and National Cyber and Technology Practice leader for PCF Insurance Services. Email: keiths@ broadfieldinsurance.com.