Insurance Business America issue 3.10 by Key Media

IBAMAG.COM ISSUE 3.10

AGENCIES EMERGING THREATS THE CHALLENGE OF INSURING SCHOOLS IN THE 21ST CENTURY

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CAUGHT RED-HANDED THE LOOPHOLE IN CYBER INSURANCE EXPOSED BY THE ASHLEY MADISON SCANDAL

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What sets this year's 35 top agencies apart from the pack? Discover the surprisingly simple keys to their success

ITE AGEN L E A

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NO MORE EXCUSES SIX FOOLPROOF WAYS TO LEARN FROM YOUR FAILURES

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ISSUE 3.10

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CONTENTS

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UPFRONT 04 Editorial

What it takes to be elite

06 Statistics

FEATURES

AGENCY INSIGHT

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ITE AGEN EL A

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COVER STORY

ELITE AGENCIES

This year’s 35 best agencies offer a master class in innovation, customer service and community engagement

FEATURES

A TEST FOR OUR TIMES

Emerging risks – from gun violence to drones – have changed the way schools are insured

Mesirow Financial reveals how it became one of the top 40 independent brokerages in the US

Can the US hold onto its industry dominance?

08 Head to head

How big mergers have affected smaller players

09 Opinion

Home-sharing insurance on the horizon

10 News analysis

The new cyber risk exposed by the Ashley Madison scandal

12 Intelligence

This month’s big movers and shakers

FEATURES

HANDLE WITH CARE

Cyber insurance is rapidly becoming a necessary coverage – so why don’t more companies have it?

14 Workers’ comp update

Are comp claims headed for a huge spike?

16 Technology update

One carrier is raising the bar for cyber policies

FEATURES 44 Your personal brand

Tips for taking control of your online reputation

PEOPLE 36 Producer profile

Robert Murphy didn’t mean to specialize in sports insurance, but it didn’t take long for it to become a passion

30 2

FEATURES

HOW TO OVERCOME EXCUSES

Six ways to learn from your mistakes

47 Career path

Gary Dudley built a successful business by prioritizing a culture of respect

48 Other life

Broker Tuan Do takes the Boy Scouts’ credo to heart

IBAMAG.COM CHECK IT OUT ONLINE

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We are

insured. My company’s cyber liability

is insured by ACE.

Insurance for businesses, families and individuals | acegroup.com/us

What does it mean to be ACE insured? It means our exposure to confidential data loss and network attack is protected by an ‘AA’ rated insurer, one of the largest and strongest in the world. ACE people truly understand our cyber and privacy compliance risk and go out of their way to help. Knowing ACE is there when we need them allows us to continue doing business with confidence.

© 2015 ACE Group. Coverages underwritten by one or more companies of ACE Group. Not all coverages available in all jurisdictions. ACE®, ACE logo®, and ACE insured.® are registered trademarks of ACE Limited.

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UPFRONT

EDITORIAL

What it means to be elite

here were roughly 38,500 independent insurance agencies in the US in 2012, and given that organic growth was up nearly 6% in the past quarter, there’s no reason to suspect that number is doing anything but rising. It’s a testament not only to the increase in demand for educated insurance advisors, but to the hardiness and innovation of the agency sector itself. Despite repeated analyst warnings that producers are headed the same way as the travel agent, independent agencies continue to reinvent themselves, leveraging emerging technology and building personal relationships in order to meet the expectations of today’s customer. It comes as no surprise, then, that this year’s batch of elite agencies exemplifies what it means to be at the cutting edge of innovation. Insurance Business America received hundreds of nominations from insurance agencies

One thing all of our winners had in common was their focus on providing exemplary customer service

www.ibamag.com NOVEMBER 2O15 EDITORIAL Senior Journalist Caitlin Bronson Journalists Ryan Smith Tim Garratt Donald Horne Olivia D’ Orazio Copy Editor Clare Alexander

CONTRIBUTORS Samantha Wright Abel Longoria Nikki Heald Dan Waldschmidt

ART & PRODUCTION Design Manager Daniel Williams

SALES & MARKETING Vice President Cathy Masek Media Sales Managers Chris Wills Chris Anderson Marketing and Communications Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

Designers Joenel Salvador Production Manager Alicia Salvati Traffic Manager Kay Valdez

EDITORIAL INQUIRIES caitlin.bronson@keymedia.com

SUBSCRIPTION INQUIRIES subscriptions@keymedia.com

across the country, but one thing all of our winners had in common was their focus on providing exemplary customer service. These groups invariably employ producers who are experts in their markets, attending relevant trade shows and embedding themselves deeply in the community in order to become strong advocates for their clients. They are supported in the office by a responsive customer service staff that uses the latest technology in order to meet the demands of a 24/7 world. Elite agencies are also inwardly focused. Many of this year’s honorees boast impressive training and mentorship programs designed to increase staff knowledge and decrease turnover. They are active in providing continuing education opportunities and in setting goals to ensure their teams are clearly focused and continually striving for improvement. Perhaps most movingly, however, nearly all of our elite agencies are actively engaged in promoting good causes, whether through charity events or meaningful fundraisers and donations to those who need them. These agencies have carved out a place in their communities as they promote both their branding and the health of their clients. We hope that by reading the profiles of this year’s elite agencies, you will find common denominators of success that you can take back to your office.

ADVERTISING INQUIRIES

cathy.masek@keymedia.com chris.wills@keymedia.com chris.anderson@keymedia.com

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Insurance Business America is part of an international family of B2B publications and websites for the insurance industry INSURANCE BUSINESS CANADA john.mackenzie@kmimedia.ca T +1 416 644 874O

INSURANCE BUSINESS AUSTRALIA peter.smith@keymedia.com.au T +61 2 8437 47OO

The team at Insurance Business America

INSURANCE BUSINESS NZ peter.smith@keymedia.com.au T +61 2 8437 47OO

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

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UPFRONT

STATISTICS

A truly global industry

Liberty Mutual Boston, MA Annual revenue: $39 billion Global employees: 50,000 AIG New York, NY Annual revenue: $64 billion Global employees: 65,000

Will the worldwide growth of the insurance industry see the US take a back seat or remain a driving force? THE INSURANCE industry is a global powerhouse that boasts some of the worldâ&#x20AC;&#x2122;s largest companies. Even with increased competition, challenging pricing environments and increased M&A activity, the global industry continues to grow. In the US, insurance is responsible for booming job numbers as intermediaries

continue to lead the way in importance. The soft market continues to hang over the industry, but some major players are predicting a better market within two years. As the industry continues its global spread, can the US stay on top, or will emerging markets abroad become the new focus of the industry?

Berkshire Hathaway Omaha, NE Annual revenue: $1.9 trillion Global employees: 316,000

WHERE ARE THE BIGGEST INSURANCE COMPANIES?

27%

Percentage of insurance employees in the US who are in the agency or broker sector

Number of brokers (Marsh & McLennan) who made the Fortune 500 list in 2015

P&C premiums are expected to grow in every region of the world throughout 2016, but Western Europe and North America will lag behind emerging markets North America

1.5%

Latin America

4.9%

Western Europe

1.6%

Eastern Europe

3.8%

Emerging Asia

8.2%

Mature Asia/ Pacific

2.4%

Sub-Saharan Africa

5.0%

Middle East/ North Africa

5.5% 0% 2%

4% 6%

Number of jobs created in the insurance industry in July 2015

Source: The Department of Labor Statistics; Fortune 500, 2015

Employment within the industry continues to reach new heights each quarter as more Americans than ever are employed by the insurance industry 2.56 million 2.55 million 2.54 million 2.53 million 2.52 million 2.51 million 2.5 million

8% 10%

Source: Munich Re Insurance Market Outlook, 2015

Number of consecutive months employment in the US insurance industry has risen

Of the 10 biggest P&C companies in the insurance industry, only four are located in the US, demonstrating just how far the industryâ&#x20AC;&#x2122;s geographic reach spreads

9,600

INSURANCE EMPLOYMENT HIGHEST EVER

Number of US insurance industry employees

WHERE THE GROWTH IS HAPPENING

Jan. 2015

Feb. 2015 March 2015

April 2015

May 2015

June 2015

July 2015

Aug. 2015

Sept. 2015

Source: The Department of Labor Statistics

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Munich Re Munich, Germany Annual revenue: $81 billion Global employees: 43,316

Allianz Munich, Germany Annual revenue: $136 billion Global employees: 147,425

People’s Insurance Company of China Beijing, China Annual revenue: $57 billion Global employees: 120,842

Zurich Zurich, Switzerland Annual revenue: $72 billion Global employees: 54,551

Tokio Marine Tokyo, Japan Annual revenue: $39 billion Global employees: 33,786

State Farm Bloomington, IL Annual revenue: $71 billion Global employees: 73,262

MS & AD Insurance Tokyo, Japan Annual revenue: $42 billion Global employees: 38,358

Source: Fortune Global 500, 2015

INTERMEDIARIES LARGEST PART OF THE INDUSTRY

EMERGING MARKETS

The top five job roles in the insurance industry demonstrate the importance of intermediaries, who make up the bulk of employees

Munich Re’s ranking of the top global insurance markets, projected out to 2025, forecasts that the US will hold onto the number-one spot for at least another decade – but China and other developing nations are closing in fast as more established markets drop off

400,000 350,000 300,000

Canada

Japan

Australia

150,000

2015: 2nd 2025: 3rd

100,000

India

China

Brazil

250,000

2015: 1st 2025: 1st

200,000

50,000

357,360

219,640

188,920

80,270

57,130

Insurance sales agents

Claims and policy processing clerks

Claims adjustors, examiners and investigators

Underwriters

First-line supervisors/ office managers/ support staff Source: The Department of Labor Statistics

2015: 3rd 2025: 4th 2015: 4th 2025: 2nd

2015: 9th 2025: 11th 2015: 10th 2025: 13th 2015: 14th 2025: 10th 2015: 13th 2025: 9th Source: Munich Re Insurance Market Outlook, 2015

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UPFRONT

HEAD TO HEAD

Have mergers impacted your ability to place clients? Several major deals in recent months have reduced the pool of carriers, especially for those seeking healthcare insurance

Mark G. Wheatman

Eddie Besaw

Edward Yates Jr.

President and CEO Wheatman Insurance

Managing broker Senior Solutions NW

Vice president Yates Insurance Services

“The various mergers and acquisitions are not affecting us right now. There are a handful of [publicly held] national brokers that are on the acquisition trail, and we have bumped into them occasionally. They’ve tried to make some inroads with us ... but I still have my practice. I think the good agencies understand the marketplace quite well. As a business, let alone an insurance agency, brokers need to stick with the core competencies that made them successful. It doesn’t mean that they can’t amend those core competencies; we’re constantly tweaking things here and there, trying to see what the next curve will be. That’s just smart business.”

“Not yet. I think we’re just waiting for some of the results to fall out. Most of what I do is in the senior market. For example, I have Humana as a carrier, and they were just bought out by Aetna, but I probably won’t see any changes from that until it passes regulatory processes – so probably 2017 or 2018. I don’t think it will change too much of the coverage, especially in the Portland, Oregon, market; Medicare Advantage is one of the most deeply penetrated markets in the nation, so there is a lot of competition. I’m hoping Humana will keep their name recognition and most of their plan designs, but maybe streamline some of their back-end processes.”

“Competition is a good thing. Any time one entity controls too much market share ... there should be concern. As an independent agent, I like options. This allows me to access multiple markets to find the best coverage and price available for my clients and their specific needs. When those options are diminished, it can certainly affect my ability to compete and place clients. The way in which mergers are managed and executed can have a high impact on client relations across the board. If the execution is not smooth, client relations suffer, and it can become difficult to get things done, such as underwriting transactions.”

IS COMPETITION GOOD FOR BUSINESS? In short, the answer is yes. But lately, a spate of mergers and acquisitions has reduced the pool of carriers from which insurance professionals can choose when placing clients. That shift has been especially pronounced when it comes to health insurance. In fact, the American Medical Association says the onslaught of deals in the healthcare realm could change the top carriers from the Big Five to the Big Three, creating real competition issues for brokers. What’s more, the AMA, which represents physicians and medical students in the US, says the combined effect of these deals could even be in violation of the country’s federal antitrust laws.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email iba@keymedia.com

Home-sharing insurance is coming And it could force brokers to revisit every homeowner’s policy in their books, writes Abel Longoria CHANGE IS not likely – it is inevitable. For an insurance broker, this could not ring truer. Every now and then, something shakes up the insurance marketplace, forcing us to re-evaluate how we rate and interact with clients. Right now, everyone is talking about how Uber and other ridesharing programs are changing things, but what comes next? It’s important to tackle these insurance nightmares before they even begin and be on the lookout for impending, potentially threatening risks. Make no mistake about it – the next shake-up we will deal with will involve homesharing or vacation rental sites such as Airbnb, VBRO and Flipkey. These websites allow homeowners to rent out their homes for a set amount of time, usually for the weekend, in exchange for an agreed-upon fee. Guests can stay in a nice, cozy home, and owners can make a decent chunk of change. Sounds like a great deal for everyone! That is, until the owner returns home to find their property has been trashed. Then they call you, their trusted insurance advisor, only to find that you cannot help them because they rented out the home. Say goodbye to being that trusted advisor! I know what you’re thinking: So what now? How do we cover these types of risks? Do we have to rewrite policies, changing them from homeowner’s to dwelling? Do dwelling policies even cover vacation rentals? As is the case with most things in the insurance world, the answer is not so simple.

There are many different issues that could arise; let’s go over some potential scenarios. But first, it’s important to understand that every carrier has a different set of rules, and this is in no way an exact representation of each carrier’s policy; these are just hypothetical situations that could happen if you don’t insure the home properly. It is of paramount importance that you take an

tioners. The same rules as above will apply: No coverage will be provided for any other structure used in whole or in part for business – that is, that’s being rented out – even if the homeowner lives in the primary dwelling. Personal property coverage: While some companies will deny a personal property claim for the reasons stated above, other carriers will give clients some leeway. For example, Safeco offers clients 31 days throughout the year to rent out the property before it excludes coverage. So, if a client wants to rent out their home while they go on vacation, their regular homeowner’s policy might be OK as long as they are not renting the property out all the time. If the client intends to rent the home out for longer than that, a dwelling policy would be needed. Liability coverage: Most of the time liability, much like personal property, will be excluded, but there are some policies that provide an exception for homes with ‘occasional’ rentals. However, ‘occasional’ is not a concrete term, so I’d stay away from

“It is of paramount importance that you take an in-depth look into each of your carriers to see what their official stance is on home-sharing” in-depth look into each of your carriers to see what their official stance is on home-sharing. Dwelling coverage: Some people will rent out their entire house, while others will only rent a single room. In either situation, a dwelling policy is ideal, but we all know most homeowners will rent out their properties without thinking twice about changing insurance policies. But what happens if there is a standard home policy? If the whole house is being rented, any claims have the potential to be denied due to business pursuits. If just one room is being rented, your client might be covered, though there are some carriers who will exclude coverage in ‘a sleeping room rented to others by the insured on the residence premises.’ Other structures coverage: Many properties have secondary structures or outbuildings that owners can rent to vaca-

giving a client this advice and instead tell them there is no liability protection. So, what does this mean for you? If you learn a client is renting out their home on a short-term basis, you need to inform them about the potential losses they might incur. Ideally, you want to get them a separate dwelling policy so they are covered for any potential gaps without losing some of their homeowner’s coverage. After all, if they are going to make some money on the home, the extra investment to protect their property should be well worth it.

Abel Longoria was born with insurance in his blood: His mother worked for USAA, and his father for State Farm. Longoria continues the family legacy as the owner of a Goosehead Insurance franchise in San Antonio, Texas.

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UPFRONT

NEWS ANALYSIS

Infidelity, extortion and cyber insurance The Ashley Madison scandal illustrated a dynamic new risk associated with cyber liability – one that could cost both brokers and their clients THIS SUMMER, a group calling itself The Impact Team stole user data from one of the Internet’s most notorious dating websites. Operating under the provocative slogan “Life is short. Have an affair,” AshleyMadison. com is a service designed to enable users to engage in extramarital romances. Though the site was frequently the target of severe moral critiques, users were able to operate under relative anonymity. All of that changed in mid-July when The Impact Team announced it had gained access to 37 million profiles containing such sensitive information as sexual fantasies, credit card data and nude photographs. Hackers demanded that the website close or face the

actually expose a new threat that is growing in frequency and presents new opportunities for brokers to provide related coverage. “Technically speaking, this is actually a case of cyber extortion,” says Brian Rosenbaum, national cyber and privacy practice leader at Aon Risk Services. “Sometimes it’s motivated by political views, and sometimes it’s for financial gain, but either way, it involves someone threatening to release information in order to force a company to do something.” In Ashley Madison’s case, the would-be vigilantes asserted that they were acting in consumers’ defense, as the website’s $19 fee to remove personal data was ineffective and “their purchase details are not removed as

“There’s been a lot of development of malware and intrusion software that make cyber extortion more viable” Brian Rosenbaum, Aon Risk Services publication of the information – something that happened a month later. Avid Life Media, which owns Ashley Madison, was almost immediately hit with a $578 million class-action lawsuit, and CEO Noel Biderman was forced to resign. While the incident and subsequent events seem to mirror recent cybercrimes on organizations like Target and Home Depot, they

promised, and include real name and address, which is of course the most important information the users want removed.” While this motive for cyber extortion is highly uncommon, the act itself is seemingly not. Despite a lack of firm statistics – few companies want to admit they’ve been the victim of extortion – anecdotal evidence suggests it’s on the rise.

“Cyber extortion is on the upswing now,” Rosenbaum says. “Years ago it wasn’t a big issue, but there’s been a lot of development of malware and intrusion software that make cyber extortion more viable now.” Even tech companies are vulnerable. Cyber attacks demanding ransom money have hit such savvy organizations as Vimeo, Meetup, Basecamp, Bit.ly and MailChimp. Hackers certainly have the means to release the information, and it often has a devastating impact on the business. In addition to the class-action lawsuit facing Avid Life Media, cyber insurance spectators watched this April as cyber criminals released via WikiLeaks several embarrassing emails from Sony Pictures executives obtained during the 2014 breach of the entertainment company. “Cyber breaches are now not a simple ‘one-time event,’ as many other types of risk can be,” says Jack Elliott-Frey, a broker with cyber insurance specialist SafeOnline. “What we have seen with Sony is the determination

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THE PRICE OF CHEATING Aside from the reputational damages sustained by Ashley Madison in the wake of its July data breach, the financial fallout for the dating site and its users has been severe

$4 billion

The estimated amount Ashley Madison users may be rewarded in damages

$578 million

The amount a class-action lawsuit is seeking from Avid Life Media related to the breach

32 million

The number of users who had their personal information exposed in the attack

$500,000

The amount Avid Life Media is offering as a reward for information regarding the attack

$225

The average value of Bitcoin currency demanded by extortionists in exchange for keeping one user record secret

Sources: Krebs on Security, Fortune Magazine, CNN

by hackers, once inside the network, to extract as much information as possible and drip-feed it via the most destructive channels – in this case, the media – over a certain period of time.” Although these hacks are often sustained,

related to extortion, Rosenbaum encourages brokers to help business owners locate suitable cyber coverage that includes protection against this new and emerging risk. “A cyber policy is what we call a cafeteria-

“Cyber breaches are now not a simple ‘one-time event,’ as many other types of risk can be” Jack Elliot-Frey, SafeOnline Elliott-Frey notes that cyber policies should also consider what happens when the attacks finally cease. “It demonstrates the importance of a cyber policy that covers not only preventative techniques, but also a post-breach strategy involving IT forensics or other third parties that can assess and help your organization prepare for any further damaging events.” As for the more financially obvious fallout

type policy. It has various insuring agreements that cover different risks,” he says. “Cyber extortion is an insuring agreement, and with this coverage, if somebody infiltrates your system and holds you for ransom, your insurance will pay the ransom and extra expenses needed to terminate the extortion.” Rosenbaum differentiates this from kidnap, ransom and extortion policies, which protect the enterprise itself, but not outside

parties affected by a breach. “In Ashley Madison’s case, the threat was to release customers’ personal information. Kidnap, ransom and extortion would cover the company’s own intellectual property, but a cyber extortion policy would cover the thirdparty information of the insured,” he says. While Rosenbaum acknowledges that “regulatory intervention in the risk transfer consideration is not unprecedented,” he feels that mandating this type of coverage on a widespread basis would be too much of a hurdle since it would be “a monumental task” to delineate which industries are high-risk. Still, while it’s not officially regulated for most enterprises, he sees a need for many private-sector organizations to require a certain baseline of coverage before they enter into an agreement with another entity. “A lot of industries have made this a contractual obligation,” he says. “[They’re] essentially saying, ‘Want to do business with us? Then buy this insurance.’”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

AmTrust Financial Services

Republic Companies and Republic Insurance Holdings

The $233 million deal expands AmTrust’s holdings in the central and southeast regions

Arthur J. Gallagher

North Alabama Insurance

The Florence, Ala.-based MGA provides property & casualty, commercial auto/garage and other specialty insurance placements

Heritage Insurance

Zephyr Acquisition Co.

The Hawaiian insurance company will provide Heritage with a 30% market share in the state

Nassau Reinsurance Group Holdings

The Phoenix Companies

Post-acquisition, Nassau will contribute $100 million in new equity capital to strengthen Phoenix’s balance sheet

Sun Life Financial

Assurant

The Canadian insurer has acquired the benefits business of the US firm

United Insurance Holdings Corp.

Interboro Insurance Company

Interboro Insurance is the oldest insurance company on Long Island and will be purchased for $57 million

XL Group

Allied International Holdings and T.H.E. Insurance Company

The acquisition provides XL Group with a greater footprint in the outdoor entertainment specialty insurance industry

QBE introduces professional liability for accountants

Zurich-RSA deal collapses, but RSA remains hopeful

Zurich Insurance’s pursuit of UK-based RSA collapsed in mid-September, to the loss of more than $2 billion in market value for the potential acquisition target. Still, RSA CEO Stephen Hester remains optimistic about the company’s position in the marketplace. “I am sure this company will get other approaches in the future because it’s a consolidating industry and it’s an attractive company, but we are not looking for approaches and we are not talking to anyone else as we speak,” Hester told reporters. Now that the purchase is off the table, there is renewed speculation over who might be next to place an offer. One analyst believes Munich, Germanybased Allianz could be a forthcoming suitor, while others believe the company ought to look East. “If Zurich couldn’t make it work, we doubt that other Western insurers can either,” Oliver Steel, institutional investor for Deutsche Bank, told clients. “Nor do our US analysts believe that there is interest from US insurers. That leaves only the Japanese or Chinese insurers, who could be interested in building their global scale, but who wouldn’t derive any synergies.”

QBE North America has teamed with Jorgenson & Co., a specialist professional liability managing general underwriter, to release a new professional liability product for accountants and consultants. The product will provide liability and errors & omissions coverage for accounting firms. Jorgenson & Co. specializes in firms of up to 50 CPAs, but has the capacity to underwrite larger regional firms. The new APL product is part of QBE’s effort to expand its appetite for various classes of professional liability and errors & omissions coverage.

BHSI launches inland marine product line

Berkshire Hathaway Specialty Insurance [BHSI] has created a full line of inland marine products in the US, designed to complement its ocean cargo and contractor’s builder’s risk coverages. Products include builder’s risk, contractor’s equipment, installation floaters, inland transit, motor truck cargo, warehouse legal liability and other miscellaneous floaters. The line is now available on an admitted basis in all 50 states and is underwritten with American Association of Insurance Services policy wordings.

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PEOPLE Markel launches professional liability product for agents and brokers

Markel Global Insurance has introduced new professional liability products for captive insurance agents and securities broker-dealers. Both products provide professional liability coverage for the exposures of life and property & casualty insurance agents and broker-dealers, including coverage for claims arising from wrongful acts against the agent or broker-dealer for the rendering of or failure to render professional services.

Geico expands ridesharing insurance product

Geico is expanding availability of its ridesharing insurance product to Connecticut, following recent success in Georgia, Virginia, Maryland, Texas and Pennsylvania. New and existing drivers approved to work for Uber, Lyft, Sidecar and other transportation network companies are eligible for the product, which is significantly less expensive than commercial policies and replaces the driver’s personal auto policy and provides coverage regardless of whether the driver is logged into the company’s app. Connecticut was chosen for its proximity to New York City, a key market for ridesharing drivers.

Cloudsurance program now available

Cloudsurance has launched its insurance program for consumers who use cloud storage services like Dropbox and Box. The program is intended to protect against the inherent risks of cloud computing, including data loss, cyber attacks and downtime. The coverage’s data-loss insurance will financially compensate the insured in the event of a cloud provider losing their data. It also will include downtime and cyber attack insurance, which will be triggered in the event a cyber attack affects any IT assets.

NAME

LEAVING

JOINING

NEW POSITION

Juan C. Andrade

ACE Group

Chubb Group

Executive VP of international non-life insurance

Paul Bernal

Travelers Co.

Willis Group Holdings

Public entity practice leader, Willis North America

Robert Callan

N/A

The Hanover Insurance Group

CFO, Chaucer Syndicates

Bill Craane

Swett & Crawford Group

Worldwide Facilities

Vice president and New York casualty practice leader

Colin Dutkiewicz

Swiss Re

Aon Benfield

Director of accident, health and life

Christopher Gallagher

Axis Insurance

Endurance Specialty Holdings

Chief risk officer and group actuary

Ken Hashberger

ProSight Global

All Risks Ltd.

Senior underwriter, Alive Risk

Daniel R. Nash

Zurich American Insurance Co.

Ironshore

Senior VP, field operations and business development, IronHealth

David Nelson

N/A

Scottsdale Insurance Company

Leader, contract underwriting division

Hu Qianhai

Huatai Property & Casualty Insurance Co.

Markel International

Head of business, China

Jeff Schermerhorn

Marsh & McLennan

Lockton Cos.

Vice president, cyber technology

Johan Slabbert

N/A

The Hanover Insurance Group

CEO, Chaucer Syndicates

Liz Smith

N/A

Assurance Agency

Co-president

Tim Stapleton

Zurich General Insurance

ACE Overseas General

Vice president and cyber insurance product manager

Robert A. Stuchbery

N/A

The Hanover Insurance Group

President, Chaucer Syndicates

Underwriting manager names new president

Victor O. Schinnerer & Company has announced the appointment of Brian Hanuschak as the company’s new president. His focus will include expanding Schinnerer’s existing platform by “driving new product innovation and extending the reach of the distribution network.” Hanuschak, who previously served as the company’s managing director of sales and distribution, is known for his work in promoting broker and carrier relations, as well as improving sales and marketing strategy and implementing new programs.

Cyber insurance broker hires new staff members

SafeOnline, a growing cyber insurance broker, has added Adam Maher, Elizabeth Robinson and Jack Elliott-Frey to bolster its cyber, professional and miscellaneous team. Maher (top) joins from broker Iris, having spent 13 years in the insurance industry within financial and professional lines. Robinson (bottom right) arrives from New Dawn Risk with a decade of insurance experience behind her. Elliott-Frey (bottom left), a promotion within the firm, will assist with the development of the growing book of submissions from the US, Canada and Europe.

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16/10/2015 4:12:32 AM

UPFRONT

WORKERS’ COMP UPDATE

Comp claims to double in next 10 years One industry professional outlines three reasons why workers’ comp claims are about to spike

pushing more people to claim. Retiree benefits are being cut across the country, and according to Walker, it’s already leading to a spike in workers’ comp claims. When United Airlines filed for bankruptcy, 100% of the people who ‘retired’ filed a workers’ comp claim – then, when United tried to enter negotiations to settle these claims, not one person did. Walker’s final point was that with doctors struggling to survive on Obamacare and Medicare payments, healthcare professionals

Retiree benefits are being cut across the country, and it’s already leading to a spike ...

An industry insider has issued a word of warning to insurance professionals – workers’ compensation claims are going to double in the next 10 years. The unsettling claim was made by Phil Walker, who founded his own workers’ compensation company and counsel for employers, at a presentation during the annual conference for the Association of Occupational Health Professionals in Healthcare. Fred Hosier, who heads up a safety and OSHA news site, reported that Walker offered a three-tier explanation for the expected rise.

NEWS BRIEFS

The first is that technology is replacing human employees, particularly when it comes to low-paid jobs. The past few years have seen multiple examples of artificial intelligence replacing warm-blooded employees – Amazon and Wendy’s are just two of the big names who’ve turned to robotics for extra help. What happens when low-paying jobs are eliminated, Walker argued, is that people who occupied those positions file workers’ comp claims. The second tier is that municipal bankruptcies are becoming more common,

Bayer to pay $5.6 million for explosion violations

Bayer CropScience A.G. has been ordered to pay $5.6 million to settle violations that resulted in a 2008 explosion that killed two employees at its West Virginia facility. The US Department of Justice and the Environmental Protection Agency charged the German company with skirting federal chemical accident prevention laws. Approximately $4.2 million will be used to enhance emergency practices at its facility and to help preserve the Kanawha River, while $975,000 will be expended as a penalty.

are not looking for excuses to perform surgery and make a little extra cash. As such, they’re referring more patients to specialists and billing well above cost in the hope of settling with insurance companies for a little less. If we really can expect all this in the near future, insurance professionals will be keen to prepare themselves. According to Walker, the next step for many companies will be an obligatory ‘pre-termination physical’ for employees who are fired or retiring. The measure would allow commercial clients to screen for any employment-related health problems, nipping any fishy compensation claims in the bud. Investment in anti-fraud initiatives will help alleviate some of these issues as well, he said.

Insurer to make extra strides for ESL speakers

The US Department of Justice, US Department of Labor and Washington state’s Department of Labor & Industries have agreed to provide additional services for injured employees who don’t speak English. The agreement serves as a settlement to complaints from clients in Washington’s workers’ comp system, who alleged that they faced discrimination because of their language skills. The system will now feature a ‘language access policy’ that includes translation services and forms in languages other than English.

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16/10/2015 4:13:17 AM

Q&A

Jim Quiggle Director of communications COALITION AGAINST INSURANCE FRAUD

Fast fact The Coalition Against Insurance Fraud is a nonprofit organization that works to control the public’s insurance costs, protect their safety and reduce levels of insurance fraud throughout the US

Workers’ compensation fraud still a major problem How big of an issue is workers’ compensation insurance fraud in the US? Fake workplace injuries and willful employee misclassification remain entrenched, highly resistant to enforcement and steal billions of workers’ compensation dollars annually. Many observers contend that 10% to 20% percent of employers misclassify at least one worker as an independent contractor. That problem is serious in some locales and industries. High-risk businesses such as construction, delivery, trucking, building maintenance, janitorial, agricultural and home healthcare are especially hard-hit. Total misclassified losses likely reach billions of dollars annually in required workers’ comp premiums and taxes illicitly avoided.

What are the main drivers for rising levels of fraud? Misclassification is widespread because it’s profitable. Lowballing payroll size, staff size or worker risk level can save an employer tens of thousands of dollars or more in illegally lowered workers’ comp premiums a year. Rising comp premiums place ever-growing pressure on profit margins, increasing pressure to cut corners. Increased immigration to the US is another factor. It has created a large workforce that’s vulnerable to abuse by employers who might misclassify or intimidate injured workers into not making workers’ comp injury claims. Workers also can be ill-informed about their legal rights and workers’ comp laws. Employees thus may be afraid to complain for fear of losing jobs. In recent years, employers also increasingly have

California governor signs drug formulary bill

Governor Jerry Brown has signed Assembly Bill 1124 into law. The legislation mandates that the state establish a prescription drug formulary in the workers’ compensation system. It will save up to $420 million by ensuring that injured workers are treated with a safe combination of pharmaceuticals at an optimal cost. The American Insurance Association supported the bill, which it believes will “assist in injured workers’ medical outcomes, lessen system friction and provide for savings.”

offloaded work to subcontractors, temp agencies, labor brokers, franchising, licensing and third-party management. Misclassifying by dishonest organizations within these sectors is a growing trend.

How should insurers, brokers and agents respond to try to reduce fraud? Insurers, agents and brokers must educate employers to have a culture of zero tolerance for fraud. This means educating owners and managers about the consequences of getting caught misclassifying. The same culture must filter down to line employees to encourage workplace safety and honest injury claims. Employees who’ve been educated on the purpose and program benefits of workers’ comp are less likely to commit fraud. Workers thus must be informed of their rights and responsibilities. They must be educated about injury claim procedures, and be enlisted to watch for fellow employees who might fake injuries. Safety programs must be robust as well, to minimize opportunities for false injury claims. Workers also must know the consequences of getting caught faking an injury, including losing their job and possibly being jailed and fined. Importantly, employers must be coached to contact their agent, broker or insurer immediately about an injury. Investigations also should start immediately. And insurers must help employers be clear about who is eligible for independent contractor status and who should be an employee. Federal standards are an important guidepost.

Woman admits to fraud on behalf of NFL player

Kimberly Jones has pled guilty to wire fraud and will submit to a restitution order of $1.5 million after admitting that she assisted former Giants player Marcus Buckley with filing false claims. The football star prepared fraudulent invoices and medical statements, as well as collection notices for doctor’s bills, to the tune of more than $1,588,000. Jones, a senior claims representative with Gallagher Bassett Services, may be sentenced to 20 years in prison or a fine of $250,000, as well as other punishments.

Commercial insurance increases moderate

A new industry pricing survey confirms what most insurance professionals already know: Increases in commercial insurance rates are moderating as the market enters a soft period. Workers’ compensation was nearly flat. “Price increases continue their downward trend, as strong underwriting results allow for some room in pricing,” said Alejandra Nolibos of Towers Watson. “However, there are indications that workers’ compensation pricing may have moved into negative territory for the first time since 2010.”

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16/10/2015 4:13:23 AM

UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS Risk firms collaborate on advanced cyber risk model

AIR Worldwide, BitSight Technologies and Risk Based Security have announced a collaboration to build an advanced cyber risk model. AIR, a catastrophe risk firm, is teaming with the two cyber specialists to provide insurers with tools to better understand and manage the evolving risk from cyber attacks. The model will utilize a probabilistic set of historical data to offer an accurate estimate of potential cyber losses and ensuing business interruption expenses.

Insurance could crash drone industry without insurer, agent help

According to a recent Fortune magazine report, significant liability and a lack of regulatory guidelines are making it difficult for insurers to provide well-rounded products for drone manufacturers and operators. Lloyd’s of London has even gone on record saying risk pricing for drones is extremely difficult in view of their emerging status and inherent issues like third-party liability for physical damage. Most companies currently offering policies for commercial drone use exclude privacy claims due to lack of data and uncertainty over how drones work and how privacy legislation will treat violators.

Tech expert challenges insurers to innovate

The insurance industry is failing to move into the technological age despite the wider financial sector embracing innovation, according to Rob Moffat, a principal investor at tech venture capital firm Balderton Capital. Writing on CityAM.com, Moffat said there is

little innovation from the insurance sector compared to the growth of financial technology, or Fintech. Moffat suggested that regulation and the vast sums of capital required are barriers for insurance industry start-ups, but that established insurers have been slow to fill the gap.

Warren Buffett joins the cybersecurity insurance market

Berkshire Hathaway Specialty Insurance [BHSI] has unveiled two new insurance policies providing coverage for cyber liability and breach response, as well as resources for risk management. Both policies include multifaceted network security and privacy liability insurance, as well as risk management resources that are customizable for professional service firms of all types. Other highlights include coverage for third-party exposures, breach expense and extortion threat coverage, business interruption coverage, media liability coverage, and online access to eRiskHub tools and resources.

Google enters the health insurance business Google isn’t just interested in auto insurance – the technology giant announced that it has invested $32.5 million in Oscar Health Insurance Corp., a start-up that many believe is poised to disrupt traditional insurance channels and dominant players like UnitedHealth Group and Anthem. Oscar hopes to cater to new and existing health insurance customers by making the insurance business more like an Internet service. The company signs up customers for its plans through online Affordable Care Act exchanges, offering prices that compete with established players.

Insurer launches rare cyber policy The new policy, which provides up to $100 million in coverage, fills a gap in the market ACE Group is now offering a cyber insurance policy that provides up to $100 million in coverage, filling a void many have seen in the market for high-limit policies. The Global Cyber Facility policy comes with services from firms that help companies identify and correct cybersecurity vulnerabilities, including BitSight Technologies, FireEye’s Mandiant services group, Navigant Consulting, NetDiligence, Promontory Financial Group and Verizon Communications. The partner firms are also helping ACE refine its underwriting for cyber policies, a process that’s been difficult for many insurers, given the lack of historical loss data for the risk. “There are no actuarial tables for cyber,” Karen Kukoda, partner alliance director with FireEye, told Reuters. “ACE is building us into their process to help assess risk for clients.” The policy’s application process is reportedly intense. Agents with clients interested in the coverage must prepare companies for a heavily scrutinized underwriting process, including reviews of cybersecurity defenses, strategies for mitigating potential breaches and post-breach response plans. If deficiencies are detected, companies can still obtain coverage, but only after an on-site interview conducted by ACE. The insurer’s consulting firms will recommend solutions for any existing shortfalls, though clients need not implement those steps right away. Instead, ACE will review those areas during renewal.

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The new program promises to be lucrative for ACE; the company expects higher premiums and profits by offering one of the highest limits for cyber risk in the admitted market. Existing policy limits have been easily exhausted by high-profile data breaches such as the 2013 Target cyber attack, which cost the company $252 million. Target’s insurance policy covered just $90 million, leaving the company responsible for more than 64% of the cost. Jack Elliott-Frey, a broker with SafeOnline, believes that as more businesses accept the costly reality of cyber risk, insurers will start offering higher limits.

“There are no actuarial tables for cyber. ACE is building us into their process to help assess risk” “There is a clear picture being painted here: Businesses are unaware of the cyber threat, which leads to low demand for cyber insurance, with insurers offering generalized, inadequate policies for the small number of businesses that are requesting them,” Elliott-Frey says. He adds that underwriters also have a habit of “follow[ing] the actions of others,” particularly in an emerging market such as cyber, which is still being offered only by a small pool of insurers. ACE’s announcement comes on the heels of a report from Pricewaterhouse Coopers, which suggests the $2.5 billion cyber insurance industry will triple to $7.5 billion by 2020. Analysts warn that without necessary innovation in the insurance space, tech competitors like Google could step in and take over the market.

Q&A

Michael Bruch Head of emerging trends/ESG business services ALLIANZ GLOBAL CORPORATE & SPECIALTY

Fast fact Allianz Global Corporate & Specialty is the Allianz Group’s dedicated carrier for corporate and specialty insurance business, focusing on large corporate and individual risks, often with multinational or specialist exposures

The implications of 3D printing What are the new risks created by 3D printing? I wouldn’t say it’s a completely new risk landscape that we’re facing. We have seen some of those risks already in, let’s say, the music world with Napster, etc. With this digitalization, there’s a higher risk of piracy, counterfeiting and intellectual property theft. The next big category, I would say, is the supply chain risk. When you go through the supply chain, it’s much more difficult with 3D printed products to track and trace back where in the digitalized manufacturing process a fault occurred and who, at the end of the day, is liable for that. And that is, of course, a big issue for insurers. But there are always two sides of the coin. It might, in terms of business interruption claims, be beneficial for a company to invest in its own 3D printer and print 3D spare parts. Also, regular product testing is a big issue. You have new techniques, new material, ink technologies that might cause latent defects. And then there’s the cyber risk. As soon as you are connecting manufacturing processes to the Internet, your production process can be closed down by external hackers. Lastly, there’s a security issue. You might have heard about people who have printed their own weapons. This is, of course, an issue.

What advice would you offer to brokers with clients who will potentially be exposed as a result of these new risks? 3D printing enables manufacturers to personalize or customize products, and that raises the question of whether each individual product will need testing. It’s a question of where you start and stop with testing of 3D printed products, and what you change in terms of quality control and quality management. Also, regulations can change quite quickly, and the manufacturer has to make sure that they’re complying with those changing regulations. And cyber risk is a big topic. Clients have to make sure that the data flow throughout the whole value chain is highly secured. As 3D printing digitalizes all steps and reduces significantly the time from first idea until a market-ready product, hackers can easily jeopardize the innovative strength and business success of companies with stolen software or proprietary blueprints.

What’s next in this area? I think the whole topic of risk management quality, including supply chain management, will be high on the radar of manufacturers. Also, 4D printing is the next step. The fourth dimension will be materials that actually transform or change their properties according to external stimuli. If you have a sports shoe, for example, it might work [one way] when you are running on concrete, and then when you are playing basketball, the material changes by supporting your ankles more. Water pipes also could be printed in a way so they expand or shrink, depending on the water flow.

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16/10/2015 4:14:05 AM

FEATURES

COVER STORY: ELITE AGENCIES

AGENC These 35 top-performing independent agencies provide unique insight into the common denominators that power todayâ&#x20AC;&#x2122;s most innovative, efficient and successful operations

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16/10/2015 6:29:31 AM

S CIE

ITE AGEN L E A

201

IES Welcome to Insurance Business America’s second annual look at the country’s elite insurance agencies. We’ve profiled agencies from coast to coast, both large and small – from agencies with hundreds of producers and many locations to agencies with just one office and only a few employees. We weren’t just looking at size; our goal was to highlight agencies that showed efficiency, innovation and the goodwill of their communities. This list provides a wide-ranging look at the agencies that are leading the way in terms of best practices, revenue, employee satisfaction and community service. These agencies are doing it right, and we hope that by sharing insights into how they’ve become successful, they’ll help other agencies go above and beyond.

NAME

PAGE

Acrisure

Alliant Insurance Services

American Risk Management Resources Network

Ansay & Associates

Ascension Insurance

Associated Community Brokers Inc.

Assurance

AssuredPartners

Bailey, Haskell & Lalonde Associates

Bolton & Company

BroadStreet Partners

Cretcher Heartland

EPIC Insurance

Goodwin Insurance

Gregory & Appel Insurance

Higginbotham

Hub International

IMA Financial Group

Insurance Service of Asheville

InterWest Insurance Services

Leavitt Group Enterprises

Lockton Companies

Lovitt & Touché

Moody Insurance Worldwide

New Empire Group

Parker, Smith & Feek

Partee Insurance Associates

PCE Insurance

Professional Insurance Associates

Propel Insurance

Shepherd Insurance

Starkweather & Shepley Insurance Brokerage

Teague Insurance Agency

The Crichton Group

Wortham Insurance

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FEATURES

COVER STORY: ELITE AGENCIES BAILEY, HASKELL & LALONDE ASSOCIATES Location: Oneida, NY Agency head: John E. Haskell, CEO Major clients/industries served:

Volunteer fire districts Awards and accolades: Greater

Oneida Chamber of Commerce Business at Its Best Award, 2014

LOCKTON COMPANIES Location: Kansas City, Mo. Agency head: David Lockton, chairman; John Lumelleau, president and CEO Years in business: 49 Revenue: $1.125 billion Growth in last 12 months: 10.3% organic growth over the 2015 fiscal year

Founded in 1966 by Jack Lockton, Lockton Companies has become a premier insurance agency. After Jack died in 2004, the company’s tradition was maintained by his brother, David, who serves as chairman. Jack’s son, Ron, is vice chairman, and two other sons, Don and Steve, are successful producers. Lockton’s family atmosphere extends to its more than 5,600 associates around the world; the company has been recognized repeatedly as a great place to work in national and local award programs. And the philosophy works from a business perspective, too: Between 2007 and 2015, Lockton grew organically from $629 million to $1.24 billion; it now serves more than 48,000 clients.

INTERWEST INSURANCE SERVICES Location: Chico, Calif. Agency head: Keith Schuler, president and CEO Years in business: 23 Revenue: $53 million Major clients/industries served: Agriculture, banking, country clubs, hospitality, fitness,

healthcare, financial institutions, social services, transportation, manufacturing, technology Awards and accolades: Top 50 commercial lines agency, Top 100 privately held property/

casualty company, IIABA Best Practices Agency Founded in 1992 when three Northern California insurance brokerages merged, InterWest has grown by leaps and bounds, now reaching into central California and the San Francisco Bay Area. The company has grown from $10 million in annual revenue in its first year to more than $53 million today. InterWest’s customer-centric business model also has led to outstanding customer loyalty; the company boasts an overall retention rate of 95.5%, and 98.5% retention among the top 20% of its book of business. InterWest is also active in local and national charities, supporting organizations like the American Lung Association, Relay for Life and the Sacramento Children’s Home.

With roots going back 100 years, Bailey, Haskell & Lalonde is a leading regional insurance agency, employing more than 90 people in eight locations across the East Coast. “Their agency exemplifies the essence of successful independent agents who truly excel in consistently solving the unique insurance challenges of every customer,” says Emily Trevallion, director of media relations for The Hanover Insurance Group.

MOODY INSURANCE WORLDWIDE Location: Germantown, Md. Agency head: Christopher Moody II, president Years in business: 101 Revenue: $4 million Major clients/industries served:

Nonprofits, technology, franchise and targeted industry programs, government contractors, wholesale distributors, service organizations, multinationals Moody Insurance Worldwide has been in the insurance business since 1914, and has become an insurance powerhouse in the Washington, DC, area. Moody is one of the largest and most knowledgeable writers of D&O and E&O liability, as well as one of the East Coast’s leading providers of international insurance products and worldwide risk management programs. It’s also one of the only large brokerages in its area that works with both small and large companies.

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16/10/2015 6:29:46 AM

E AGENCI LIT A

2015

PARKER, SMITH & FEEK Location: Bellevue, Wash. Agency head: Greg Collins, CEO Years in business: 77 Major clients/industries served:

Construction, financial institutions, nonprofits, marine, technology, healthcare and life sciences, manufacturing, hospitality Awards and accolades: National Underwriter 2011 Agency of the Year; National Underwriter 2011 Technology and Operations Champion; multi-year winner, PAR Excellence Award; 2010 IIABA Best Practices Agency Headquartered in the Pacific Northwest, Parker, Smith & Feek’s resources give it a truly global reach. The company sets itself apart by offering detailed and tailored insurance and risk management training, hosting regular seminars and webinars, and maintaining a blog about the industry.

ALLIANT INSURANCE SERVICES Location: Newport Beach, Calif. Agency head: Thomas W. Corbett, CEO Years in business: 90 Founded in 1925, Alliant has grown to become one of the nation’s largest insurance firms and a leading distributor of insurance services and products. With total P&C revenue of more than $10 million last year, Alliant is among the top five P&C agencies in the country. It’s also among the country’s top brokers of US business.

PARTEE INSURANCE ASSOCIATES Location: Covina, Calif. Agency head: Wayne Partee, CEO Years in business: 43 Revenue: More than $2 million Major clients/industries served: Plastic products, specialty wood products, builders’

supply products, electronic OEM products, food processing, general and subcontractors Awards and accolades: Recognized leader in e-marketing

Founded in 1972, Partee Insurance Associates has become one of Southern California’s premier brokerages for personal, business and employee benefits insurance. Part of the company’s success lies in its service philosophy. “We do what other agents just talk about, and we always want to be your insurance advocate,” says CEO Wayne Partee. The company operates with a ‘total team’ approach, and each staff member knows the rest of the staff has his or her back. That also means that when clients call, they can get an answer to their question from anyone on the team. The company is also actively involved in bettering the surrounding community; it co-chairs the Fields of Valor charity event, which raises funds for military personnel, family members and veterans. The agency also has set up two scholarships for insurance students at Cal State Fullerton.

Are you earning top marks with your education accounts? Education Insurance Services (EIS) offers packaged programs and specialty coverage to meet the unique needs of education, covering athletic injuries, sexual molestation, and more. 18-29_Elite Agencies 4-SUBBED.indd 21

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(855) 317-9654 www.EdInsuranceServices.com

16/10/2015 6:29:52 AM

FEATURES

COVER STORY: ELITE AGENCIES

PROPEL INSURANCE Location: Tacoma, Wash. Agency head: Kurt Carlson, president and CEO Years in business: 92 Revenue: $54 million Major clients/industries served:

Banking, construction, education, recreation, affordable housing, manu factured housing, healthcare, senior living Awards and accolades: Puget Sound Business Journal’s Washington’s Best Workplaces With multiple locations throughout Washington and Oregon, Propel is one of the nation’s largest independently owned agencies, and has been recognized among the country’s top P&C agencies. The company is dedicated to being experts not just in insurance, but also in their clients’ industries, which include construction, banking, recreation, education and transportation. Their dedication to their clients and their in-depth understanding of the specific challenges they face has led to partnerships with leading companies and long-standing relationships with many of the nation’s top carriers. “Independence is our greatest strength,” says president and CEO Kurt Carlson. “It’s the key to our ability to attract and retain the most motivated and most entrepreneurial associates – professionals who are committed to providing innovative solutions to our customers day in and day out.” The company also gives back to the community, supporting numerous charitable and cultural organizations, including the American Cancer Society, the Tacoma Art Museum, the Oregon Food Bank and the Tacoma Film Festival.

THE CRICHTON GROUP Location: Nashville, Tenn. Agency head: Bob Jackson, president Years in business: 36 Growth in last 12 months: 15% Major clients/industries served: Construction, fuel and convenience, nonprofits, real

estate, transportation Awards and accolades: Multi-year winner, IIABA Best Practice Agency; 2015 finalist,

Nashville Business Journal Best In Business Awards; 2015 Corporate Team of the Year, Cystic Fibrosis Foundation of Middle Tennessee The Crichton Group is the largest privately owned insurance agency in middle Tennessee. The company has seen strong, profitable growth year after year and has a current growth rate of 15%. It’s been recognized by peers, industry organizations and clients as one of the best agencies in the business. The Council of Insurance Agents and Brokers recently named Crichton Group CEO Jimmy Ward as a member of its board, and the agency has earned the Independent Insurance Agents and Brokers of America’s Best Practice Agency designation 14 years running. The company also gives back to its community, supporting the Fannie Battle Day Home for Children and the Cumberland Heights Alcohol and Drug Treatment Centers. It also sponsors the Cystic Fibrosis Foundation’s Walk for a Cure event.

LOVITT & TOUCHÉ Location: Tempe, Ariz. Agency head: Charles Touché, CEO Years in business: 103 Revenue: More than $5 million Awards and accolades: Multi-year winner, Phoenix Business Journal Best Places to

Work; multi-year winner, Best of Arizona Business; multi-year winner, Careerbuilder Best Places to Work in Arizona; multi-year winner, Wells Fargo Copper Cactus Award With more than a century in business under its belt, Lovitt & Touché is a staple of the Arizona insurance industry. One of the largest insurance agencies in the US, the company boasts more than 200 employees and more than $400 million in written premium. The company also gives back to the community through its L&T Cares program, which provides support to deserving nonprofits.

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Growth

E AGENCI LIT A

2015

BROADSTREET PARTNERS Location: Columbus, Ohio Agency head: Richard Miley, president and CEO Years in business: 14 Revenue: $221.7 million in P&C revenue in 2014 Growth in last 12 months: 17% Awards and accolades: Top 100 P&C agencies, 2014

BroadStreet Partners makes majority investments in high-performing insurance agencies, letting agency partners keep operational autonomy while accessing BroadStreet’s expertise and technology. The strategy has made BroadStreet Partners a force to be reckoned with in the insurance industry. Today, the company generates more than $2.25 billion in written insurance premiums for commercial and personal clients, and is one of the top P&C agencies in the country.

Many agencies would like to purchase their “competitor down the street.” Never having purchased an agency before, how do you start? Any proposed acquisition should enhance agency value. Agency principals need to consider their agency’s financial health, conduct proper due diligence on a viable target agency and use knowledgeable consultants - including your banker. There are many “moving parts” to even the most “basic” acquisition. Review your agency’s financing needs with InsurBanc – the only financial institution dedicated to serving America’s independent insurance agencies. We’re uniquely positioned to provide agency principals with financial insights for enhancing agency value.

ANSAY & ASSOCIATES Location: Green Bay, Wis. Agency head: Michael Ansay, chairman and CEO Years in business: 69 Revenue: More than $5 million Major clients/industries served: Education, transportation,

municipalities, agriculture, construction, manufacturing

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(866) 467-2262 Visit InsurBanc.com

One of the most innovative, entrepreneurial and strategic agencies in the Midwest, Ansay & Associates’ employee-centric sales and service culture has consistently won it recognition for both business development and employee satisfaction. Founded in 1946 by Adolph N. Ansay, the company is run today by his sons, Mike and John, and now boasts nine locations throughout Wisconsin.

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16/10/2015 6:30:06 AM

FEATURES

COVER STORY: ELITE AGENCIES PFENNINGER, CLAXTON & ESTELLE INSURANCE GROUP Location: New Castle, Ind. Agency head: Steve Pfenninger, president Years in business: 113 Major clients/industries served:

Contractors, schools, commercial property, school buses A small-town agency with a long history, PCE Insurance has worked hard to build a broad range of commercial clients. Founded in 1902, the company is now one of the leading independent insurance firms in the region. PCE is now headed by Steve Pfenninger, a third-generation member of the firm.

AMERICAN RISK MANAGEMENT RESOURCES NETWORK Location: Middleton, Wis. Agency head: David J. Dybdahl, CEO and president Years in business: 15 Revenue: $1–$5 million Growth in last 12 months: 32%

organic growth in customer base, 2014-2015; 20% annual growth in premiums over last four years Major clients/industries served:

HUB INTERNATIONAL Location: Chicago, Ill. Agency head: Martin P. Hughes, chairman and CEO Years in business: 17 Major clients/industries served:

Apparel and textiles, biotechnology, hospitality and gaming, aviation, construction, senior living, religious institutions, museums and galleries, wineries Hub International was formed in 1998 by the merger of 11 privately held Canadian insurance brokerages. Today, with more than 330 locations and 7,000-plus employees, Hub is one of the largest insurance agencies in the world. In 2013, Hub was recognized as the top personal lines agency in the United States. It’s also the largest privately held personal lines practice in North America. The company also created Hub Gives, a charitable program that allows employees to donate their time and service to community projects.

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Main street businesses, ranging from farms to industrial operations Awards and accolades: IBA Top 10 Producers; IBA Young Guns; environmental risk resource group for International Risk Management Institute and Independent Insurance Agents of America; senior consultant at Hanover Stone Partners

This year, with only 22 people on staff and just four full-time producers, ARMR placed two people – Kari Dybdahl and Harrison Scheider – in IBA’s Top 10 Producers rankings. ARMR also offers a unique mix of deep subjectmatter expertise in environmental risk management, custom-designed environmental risk insurance products, binding authority with an A+, XV carrier and full-market access to the top environmental insurance underwriters in the world. While most of its clients are small businesses in the US, ARMR operates on a global scale; its clients stretch from China to Africa to South America. In keeping with its international aspirations, the company has staff members who speak Chinese, Spanish, Swedish and Norwegian.

BOLTON & COMPANY Location: Pasadena, Calif. Agency head: Steve Brockmeyer, president and CEO Years in business: 84 Major clients/industries served: Education, technology, biotechnology, life sciences,

construction, real estate Bolton & Company is one of the nation’s largest employee-owned insurance brokers, providing insurance and risk management services, employee benefits and financial products to some of the world’s largest corporations. In business for 84 years, Bolton has been recognized for its professionalism, integrity and commitment to excellence in customer service and risk management. Today, the company employs more than 120 people and places more than $150 million in annual premium.

E AGENCI LIT A

2015

ASSURANCE Location: Schaumburg, Ill. Agency head: Tony Chimino, CEO Years in business: 53 Major clients/industries served:

STARKWEATHER & SHEPLEY INSURANCE BROKERAGE Location: East Providence, RI Agency head: Nat Calamis, president and CEO Years in business: 136 Major clients/industries served: Construction, distribution/wholesale, human services,

community boating and sailing schools, retail and restaurants One of the nation’s top insurance agencies, Starkweather & Shepley was founded in 1879 in Providence, RI, insuring cargo calling on ports around the world. In 1935, the agency created an ownership trust, where every employee shares in the firm’s success and sees a direct link between its growth and their benefit. It also cemented what has become a mantra: “Starkweather & Shepley’s primary objective is to focus on our two greatest assets: our employees and our clientele.” In 2010, the company created the Starkweather & Shepley Charitable Fund to help support children and families in need.

Construction, nonprofits, healthcare, real estate, staffing, technology, senior living, waste and recycling Awards and accolades: Brill Street Top 50 Chicago Generation Y Employers; Chicago Tribune Top 100 Workplaces; Fortune magazine Best Companies to Work For Assurance, an independent Chicagoarea insurance brokerage that serves more than 6,000 clients, has grown at an average rate of 14% over the last decade as a result of its focus on organic growth. The company has earned dozens of culture and service awards over the last few years, including numerous ‘best places to work’ honors. The company is also active in charitable causes through its ACT program, donating to numerous charitable organizations and regularly giving its employees paid time off to volunteer.

GOODWIN INSURANCE Location: Redlands, Calif. Agency head: Glenn Goodwin, CEO Revenue: $2 million Goodwin Insurance’s marketing tagline is: “When’s the last time you actually saw your agent?” That sums up the company’s philosophy of personal service to its customers; team members limit email communication to only the most transactional needs, preferring instead to interact with their clients by phone. Even the smallest client is seen in person at least once a year, and many clients get face time with their agents every month. The agency maintains a standard two-hour turnaround time on responses to any request. All of that personal attention has resulted in a client retention rate in the high 90s. “We know clients’ names, dogs’ names, goldfish,” says CEO Glenn Goodwin. “The most personal service model might not be the most cost-efficient, but it works for us.” Goodwin Insurance specializes in commercial lines, writing accounts for businesses from water districts to chocolate factories.

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FEATURES

COVER STORY: ELITE AGENCIES LEAVITT GROUP ENTERPRISES Location: Cedar City, Utah Agency head: Eric Leavitt, CEO Years in business: 63 Revenue: $211 million

NEW EMPIRE GROUP Agency Management: Robert E. Mackoul, CLU, CEO Deborah K. Mackoul, CPIA, President James O’Neill, CPCU, Executive Vice President Robert G. Mackoul, CIC, Chief Underwriting Officer Years in Business: 13 New Empire Group is a nationally recognized Managing General Agent (MGA) providing specialty insurance products for commercial real estate exposures. Based in Long Beach, NY, and licensed in all 50 states, New Empire Group serves over 2,500 agents, brokers and other MGA’s nationwide. The company has earned dozens of recognitions and service awards over the years, including Target Markets ‘Best Practices Designation’ honors. The staff of New Empire Group is very active in charitable causes supporting numerous charitable organizations such as Wounded Warriors, United Way, Long Beach Soup Kitchen and Saint Mary’s of Brooklyn.

Major clients/industries served: Oil and gas, food

and beverage, footwear, auto parts With 387 producers working from more than 125 locations in 18 states, Leavitt Group is an insurance powerhouse. The company provides commercial, personal and life insurance, as well as group benefits, and currently has $2.6 billion in placed premiums. Since its inception in 1952, Leavitt Group has built a team of insurance pros with a wide range of expertise, many of whom are acknowledged as regional and national leaders in their fields.

ASSUREDPARTNERS

EPIC INSURANCE

Location: Lake Mary, Fla. Agency head: Jim Henderson and Tom Riley, co-founders Years in business: 4 Revenue: $361.8 million in P&C revenue in 2014

Location: San Francisco, Calif. Agency head: John Hahn, co-founder and CEO Years in business: 8 Revenue: $200 million

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Location: San Carlos, Calif. Agency head: Paula Hammack, CEO Years in business: 55 Major clients/industries served:

Awards and accolades: Multi-year

AssuredPartners was founded in 2011 by Jim Henderson and Tom Riley, insurance pros with decades of experience between them. Prior to forming AssuredPartners, Henderson and Riley both held leadership positions at Brown & Brown, a publicly traded national insurance company, and were instrumental in that company’s unprecedented growth. The pair formed AssuredPartners with the vision to create the premier mid-market property & casualty and employee benefits brokerage in the United States. And they’re well on their way: Since 2011, AssuredPartners has become the fastest-growing independent insurance agency in the nation. With 2014 P&C revenues of more than $361 million, it’s also one of the top P&C companies in the US.

PROFESSIONAL INSURANCE ASSOCIATES

winner, Best Place to Work in the Insurance Industry; multi-year winner, San Jose Business Journal FastestGrowing Private Company; multi-year winner, Best Place to Work in the Bay Area Although it’s a relatively new player in the insurance world, EPIC Insurance Brokers has already made a name for itself. Since its founding in 2007, EPIC has grown from $12 million in revenue to an estimated run rate of $200 million through both organic growth and strategic acquisitions. The company currently ranks among the top 20 retail insurance brokers in the country and the top 50 brokers in the world.

Construction and engineering, life sciences, wholesalers, retailers, restaurants One of the top 100 insurance agencies in the country, Professional Insurance Associates boasts more than 70,000 policyholders and more than $175 million in written premium. The company has more than 500 affiliated agents in California and Nevada, working out of more than 250 offices. Professional Insurance Associates is also heavily involved in conservation efforts through the Sterling L. Hammack Jr. Foundation. Named after PIA’s late founder, the foundation assists in the protection of endangered species and helps provide resources to people living in less economically fortunate parts of the world.

E AGENCI LIT A

2015

SHEPHERD INSURANCE

WORTHAM INSURANCE

Location: Carmel, Ind. Agency head: David Shepherd, CEO Years in business: 38

Location: Houston, Texas Agency head: Richard Blades, chairman Years in business: 100 Revenue: $95.5 million in P&C revenue

Awards and accolades: 2014 Inc. 5000 List; 2014 Indianapolis

Business Journal Fastest-Growing Company; 2014 Independent Insurance Agents of Indiana Agency of the Year David Shepherd founded Shepherd Insurance in 1977, right after graduating from the University of Mississippi. Over the years, the company has grown into the largest personal lines insurer in Indiana, with more than 170 employees and nine offices across the state. Today the company handles the insurance needs of more than 15,000 individuals and companies across the country, coordinating more than $250 million in written premium. Last year, Shepherd Insurance was the only insurance company to be named one of the Indianapolis Business Journalâ&#x20AC;&#x2122;s Fastest-Growing Companies.

Major clients/industries served: Aviation, construction, life

sciences, education, nonprofits, technology, sports and entertainment Founded in 1915, Wortham Insurance is the largest independent insurance broker in Texas, employing more than 500 insurance professionals at offices in Houston, Austin, Dallas, Fort Worth and San Antonio. Representing more than 100 carriers, Wortham places more than $1 billion in premiums annually. And with more than $95 million in P&C revenue last year, Wortham ranks as one of the nationâ&#x20AC;&#x2122;s top P&C agencies. The company is also involved in charitable work, supporting organizations such as Meals on Wheels, Big Brothers Big Sisters and the United Way.

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FEATURES

COVER STORY: ELITE AGENCIES GREGORY & APPEL INSURANCE Location: Indianapolis, Ind. Agency head: Dan Appel, president Years in business: 131

IMA FINANCIAL GROUP Location: Dallas, Texas Agency head: Bob Reiter, president Revenue: More than $5 million Awards and accolades: Hanover West Region Agency of

the Year, 2015 Awards and accolades:

Indianapolis Star Who’s Who in Health Care and Benefits Gregory & Appel opened in downtown Indianapolis in 1884 with nothing more than a rented office and a $7 desk. Today, the company has grown into one of the nation’s largest insurance agencies. It’s also the oldest – and one of the largest – independently owned insurance agency in the state of Indiana. The company provides a broad spectrum of property & casualty risk management and employee benefit solutions. It’s also an integral part of the community, supporting the arts, education and numerous other civic endeavors in Indianapolis.

CRETCHER HEARTLAND

ASCENSION INSURANCE

Location: Kansas City, Mo. Agency head: Jason Patchen, CMO Revenue: $25 million

Location: Walnut Creek, Calif. Agency head: Joseph L. Tatum, CEO Years in business: 8

Major clients/industries served:

Bioscience, construction, design professionals, healthcare professionals and facilities, manufacturing, oil and gas, pest management, public entities, rail industries Awards and accolades: Accident Fund Top Agency of the Territory, Accident Fund President’s Club, Berkley Surety 2012 Surety Partner of the Year Cretcher Heartland has built a formidable book of business and has been recognized numerous times for its excellence, and several employees have been named to various ‘40 under 40’ and leadership excellence lists. The company also gives back by volunteering at Restart, which provides transitional housing and shelter for battered women, youth and those with substance abuse problems.

IMA is one of the largest independent insurance brokerages in the country. The company, based in Wichita and Denver, has been repeatedly recognized for its corporate accomplishments and the achievements of its employees. IMA staffers routinely show up on lists of industry leaders and are even sought out by the government to help steer federal policy. IMA also gives a portion of its profits to the IMA Foundation, which provides grants to charitable organizations.

Major clients/industries served: Construction, agribusiness, higher education,

motorsports, technology, transportation, healthcare, nonprofits Since its founding in 2007, Ascension Insurance has grown to more than 430 employees in offices all over the US, becoming one of the top independent insurance brokerages in the country. Ascension is among the largest national brokerage and consulting firms by revenue size, and is projected to grow to $200 million in revenue over the next few years.

INSURANCE SERVICE OF ASHEVILLE Location: Asheville, NC Agency head: James W. Stickney IV, president Years in business: 57 Awards and accolades: Blue Cross and Blue Shield of North Carolina President’s

Club James W. Stickney III founded Insurance Service of Asheville in 1958 “with no money and no hope of inheritance,” according his son, current company president James W. Stickney IV. The company, which began out of a basement room in the Battery Park Hotel, is now a thriving agency with skilled employees, loyal customers and a growing book of business.

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E AGENCI LIT A

2015

ASSOCIATED COMMUNITY BROKERS INC. Location: Fairfield, Conn. Agency head: Dan Keane, president Years in business: 12 Major clients/industries served:

Commercial real estate, banks and financial institutions Awards and accolades: Chubb Cornerstone status; multi-year winner, Best of Fairfield Award; multi-year winner, Chubb Commercial Lines Agency of the Year Since its founding in 2003, ACBI has grown from a one-person agency with zero revenue to a multimillion-dollar business. The company has grown by double digits each year since its inception. ACBI specializes in large national commercial real estate portfolios and executive management protection for banks and financial institutions throughout the country. The company grew from dissatisfaction with the results of mergers and consolidations in the insurance industry; its founders wanted to create a firm that was professional, knowledgeable, knew its clients by name and contributed to the community.

TEAGUE INSURANCE AGENCY Location: La Mesa, Calif. Agency head: Walt Johnston, CEO Years in business: 61 Awards and accolades: IIABA Best Practices Agency

Teague Insurance is a full-service agency that has provided both personal and commercial insurance to the San Diego area for more than 60 years. The company has been recognized as a Best Practices Agency by the Independent Insurance Agents and Brokers of America, and has three owners who have served as president of the local chapter of IBA San Diego. The company also supports numerous local charities, including the Boys & Girls Club, the Interfaith Shelter Network of San Diego and the Rady Children’s Hospital.

ACRISURE Location: Caledonia, Mich. Agency head: Gregory Williams, CEO Years in business: 10 Revenue: $151.6 million Awards and accolades: Water dealers, American Mold Builders Association,

Investigative & Security Personnel for Legislative Action, ex-FBI, Indiana Bed & Breakfast, Asian American Hotel Owners Association Acrisure has become an insurance juggernaut by never sitting still. Since its formation in 2005, the company has made dozens of acquisitions and continually expanded its footprint. In 2013, it doubled its revenue to $80 million, then did that one better by pushing it to more than $151 million in 2014. That jump made Acrisure one of the nation’s top P&C companies.

HIGGINBOTHAM Location: Fort Worth, Texas Agency head: Rusty Reid, president and CEO Years in business: 67 Revenue: $73.7 million Founded in 1948, Higginbotham now boasts offices across Texas, making it one of the largest independent insurance agencies in the country and the second-largest in Texas. The company has been named one of the best agencies to work for in the South Central US, and 2014 revenues of more than $73 million made it one of the year’s top P&C brokers as well. The company and its employees also devote considerable time and money to improving the community, supporting charitable organizations through the Higginbotham Community Fund.

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FEATURES

INSURING SCHOOLS

A test for our times From gun violence to drone use, providing coverage for schools in the 21st century is anything but simple AS NEWSPAPER headlines remind us on a daily basis, schools are microcosms of our society and have the potential to magnify our ugliest problems, from sexual assault to racism to gun violence. “We think of schools as sacrosanct – what can go wrong in a school? But our experience has taught us that plenty can go wrong,” says Wendell Smith, assistant vice president of marketing and special programs at Education Insurance Services, a wholesale brokerage and sister company to United Educators that provides core coverage solutions for independent K-12 schools and small colleges. When things do go wrong, it can create significant liability exposure, along with the need for an insurance policy that will protect the school’s assets while also serving as a crucial risk management tool to shield the school’s administration, board and property. Finding the right insurance coverage is just as essential to the success of a school as its faculty, facilities and curriculum. And with close to 100,000 public schools, 31,000 private schools and 5,300 colleges and universities in the US, the market for school insurance is complex, varied and robust.

Insurance for the education sector Insurance products for educational institu-

tions are designed to provide public, private and charter schools, as well as colleges and universities, with coverages that are unique to their own particular vulnerabilities and exposures – such as Title IX compliance, sexual abuse and molestation, tenure disputes, and athletic injuries. These specialty coverages are packaged with other products that are important to all commercial enterprises – such as general liability, property, auto and workers’ comp – to help simplify the insurance purchase. School insurance specialists frequently straddle the gap between public and private, as well as between K-12 and post-secondary education. “At EIS, we deal a lot with independent K-12 schools, private schools with 800–900 students and fewer, and also mid-sized colleges and universities, both private and public, four-year and community colleges, and also find ourselves working with public school districts,” Smith says. Insurance products for public and independent schools vary in their emphasis on the types of coverage and limits that are required. A public school district with one high school and several elementary and middle schools, for example, might have many

different types of property exposure, and perhaps a fleet of buses all under the same jurisdiction. Independent K-12 schools, on the other hand, are generally on a much smaller scale and tend to be one entity. “Also unique to public schools is the fact that they are publicly funded and may deal with a state-controlled program to meet their insurance needs,” Smith says, “whereas independent K-12 schools will shop for their

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TOP CARRIERS OF SCHOOL INSURANCE AIG (higher ed) Philadelphia (independent schools) The Hartford Travelers Great American Selective Utica Arch insurance in the same way any commercial entity would shop – through a broker working with a standard carrier.” Boarding schools present a number of unique risks. “When you think about boarding schools, you approach typical exposures like general liability and property a little differently because you are talking about habitational exposure,” Smith says. “It requires another way to underwrite; you have to make sure you are dotting your i’s and crossing your t’s.”

Top loss exposures

“It’s important to have that conversation about the wide range of risks schools face. Hopefully an event will never occur, and you will never have to use that protection …” Sarah Katz, Victor O. Schinnerer & Co.

Run-of-the-mill liability claims involving slip-and-falls and wrongful termination are common in the school sector, notes Kendra Bostick, program leader at Markel. But many other top exposures in the sector are, unfortunately, the stuff of headlines. Liability from athletic injuries – particularly traumatic brain injuries and concussions related to football – is a growing exposure in both secondary schools and colleges and universities. Education underwriters are assessing the potential impact of traumatic brain injury risks, and in some cases are instituting policy changes in response to potential litigation from sports-related injuries. Sexual abuse is also a big source of loss at educational institutions. The American

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FEATURES

INSURING SCHOOLS

TOP SCHOOL COVERAGES Property General liability Automobile Crime Inland marine Umbrella Sexual abuse/molestation Educator’s legal liability, including D&O and EPLI Student accident Tuition reimbursement Workers’ compensation

Bar Association has noted that an increasing number of sexual abuse claims have been asserted against colleges, universities and boarding schools in recent years. Sexual abuse claims made by female students at colleges and universities fall into the realm of Title IX compliance – another top loss exposure in the school insurance sector. “There are a lot of challenges pertaining to how schools respond to sex abuse claims under Title IX,” Smith says. “You just open up the newspaper, and there’s another Title IX issue or abuse or mishap on campus.” The education sector also experiences

“A data breach might not just be social security numbers or health records; it could also be a research project or other confidential information” Adam Cottini, Arthur J. Gallagher significant cyber-related losses. “Because schools carry a lot of personally identifiable data on students, we are starting to see them take up on cyber and data breach coverage,” Smith says. “Our market has advised us that 15% to 20% of cyber claims are educationrelated.” Generally speaking, higher education institutions tend to have a more sophisticated, well-funded approach to cybersecurity that is headed by a robust in-house IT staff, as opposed to K-12 institutions, which may have IT that is more reliant on external support, says Adam Cottini, managing director of cyber liability practice at Arthur J. Gallagher. Higher ed institutions also tend to have more valuable data – and not just personally identifiable information. “There is a lot of development of intellectual property in this space, and people want to get access to that information,” Cottini says. “Companies have an eager desire to find out what the next big research project is and use that information for their own personal gain. The motivation for hacking into these systems is financially or knowledge-base driven.” Because the higher ed space is a major arena for collaboration between the public and private sectors, some higher ed institutions also might have protected corporate information that can be a major target of hackers, Cottini says. Risk management plays a crucial role for

cyber-related exposures in the school sector. “It is reasonable to expect that an incident response plan will provide guidance if you have a cyber-exposure scenario,” Cottini says. This generally involves a team of experts working closely with the key management of the organization to identify all of the various components of an organization that may be at risk, as well as offer prudent and timely breach response services. “Failure can result in a very large aggregated breach,” Cottini says. “It might not just be social security numbers or health records; it could also be a research project or other confidential information. You might not incur notification costs, but you could have an extensive forensic investigation, which still costs money. And at the end of the day, you have a much larger reputation problem. That’s the real risk.”

Other coverage trends Campus violence in general is a trending topic in school insurance. Since 2013, there have been at least 149 school shootings in America – an average of nearly one a week. When someone is injured on campus by a third party or fellow student, it creates a scenario where the school can be held liable for not providing enough security. For example, families of two of the 20 first-graders killed in the December 2012 Sandy Hook Elementary School shooting in Connecticut are now suing the town of Newtown and its board of education,

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alleging security measures at the school weren’t adequate. “That would fall under a general liability policy,” Smith says. “That’s why it’s important for carriers that do operate in this space to understand the exposure and gauge how deeply they will be committed to this space. We work with our partners to make sure our policies really consider the exposure and what’s going on. It’s a tough thing to manage.” With more incidents of school violence cropping up, “we are seeing inquiries regarding school security and whether the security officers should be armed or not,” Bostick adds. The problem is, a lot of policies might not provide coverage for excessive force. “An armed security guard on campus may injure or have to kill someone, and policies may react differently,” Smith says. “There are a lot of inquires about that, and it is happening with more frequency.” Educational institutions are also increasingly using drones for different purposes, ranging from security monitoring to taking video footage of football games, posing another new coverage trend. “Drones definitely create a liability exposure for people on the ground and other exposures in the air,” Smith says. “A lot of schools are calling and asking us how to approach coverage for drones.” Schools whose students travel globally also present a unique set of exposures that require tailor-made insurance products. “If someone gets sick or if there is some

sort of catastrophe on a school trip abroad, the policy offers emergency medical coverage or repatriated coverage in the event that an evacuation is necessary,” Smith says. “Or in a worst-case scenario, the policy offers accidental death and dismemberment coverage, kidnap and ransom, all of those things.”

Kidnap and ransom insurance for schools Sarah Katz knows a lot about this sector. A longtime kidnap and ransom specialist at

Schinnerer has always specialized in kidnap and ransom policies, but started offering a product pinpointed at schools seven years ago. Appetite so far has been robust. “Public schools often purchase the coverage on a district-wide level, and a significant number of nonprofit private schools are purchasing it as well,” Katz says. As with cyber policies, K&R coverage for schools places a big emphasis on effective emergency and crisis management programs, which can help facilitate a return to normal

“A lot of schools are calling and asking us how to approach coverage for drones” Wendell Smith, Education Insurance Services Victor O. Schinnerer & Co., she oversees a program that underwrites K&R coverage specifically for schools. “The general thought of kidnap and ransom is that it occurs internationally or involves a security evacuation,” Katz says. “Those risks are covered under such a policy, but we also take that coverage and broaden it to address significant domestic risk.” This could include anything from coverage for school shootings to child abduction from school premises to cyber extortion incidents in which a person or group threatens to lock up or reveal confidential information. “The K&R policy doesn’t replace a standalone cyber policy,” Katz stresses. “It responds if there has been an extortion demand.”

EMERGING TREND: NATURAL CATASTROPHE EXPOSURES The loss potential from tornadoes and other major weather events due to the dense concentration of insured properties in campus settings is a growing concern for underwriters, particularly in the Midwest and southeastern US. However, for the most part, abundant capacity has prevented underwriters from introducing new coverage restrictions or increased pricing for these risks.

operations after a shooting or other incident. Schinnerer, for example, allows up to 15% of the policy premium on its product to be applied toward consulting expenses, helping a school develop a contingency plan for how to deal with threats on campus and the potential for assaults, and providing training for the teachers and staff at the school. One of most important things about K&R coverage for schools is the access the policy gives them to a crisis response firm, in the event that the unthinkable happens. “The insured can turn to an expert to handle an extortion demand or hostage crisis,” Katz says. “And in an assault on campus, the expert can guide the school through managing the response.” While school violence and K&R threats are painful to think about, “it’s important to have that conversation about the wide range of risks schools face,” Katz says. “Hopefully an event will never occur, and you will never have to use it, but having that protection and support in place in the event that something happens can make all the difference.”

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FEATURES

AGENCY INSIGHT

Mesirow Financial Mesirow Financial’s Insurance Services Division is one of the largest independent brokerages in the Chicago area and ranks among the top 40 in the US. COO John P. Harney explains how his company got there IBA: How important do you think it is for an agency to have a commitment to specialization? Why does it matter?

addressed. We apply a hands-on, comprehensive methodology to account servicing, ensuring needs are evaluated and satisfied.

John Harney: It is very important for an agency or brokerage firm to have a commitment to specialization. The ability to understand a client’s industry allows us to understand their business and insurance needs much better. Because we focus specifically on industries, our professionals have developed time-tested expertise in recognizing potential liabilities and implementing the most appropriate risk controls.

IBA: What do you think makes you stand out as an agency?

IBA: Can you talk about your various specializations? How have you been able to build these specializations and offer true value to your customers? JH: As a full-service insurance broker and consultant, we specialize in the areas of property & casualty, surety, employee benefits, life and disability, and private client insurance, as well as structured settlement services. In addition to these core services, our practice specializations include financial services, manufacturing, public sector, real estate, construction, condominiums/cooperatives, etc. Our clients benefit from the strength and specialization provided by our professionals, who are experts in each of these industries. We have over 40 years of experience in the insurance brokerage industry. When they work with Mesirow Financial, clients have the security of knowing that all aspects of their insurance and risk management program are

JH: Our principal-to-principal approach makes us stand out. The approach ensures that clients are served by a team of specialists, directed by principals of the firm. Our culture empowers our professionals to do what is best for clients; they are able to make decisions without needing to consult layers of management. The result is expeditious service from team leaders who are not simply figureheads, but active participants in the success of the insured’s risk management program. Mesirow Financial offers an uncommon mix of personalized service at a competitive cost. Our goal is to be many things to a select and growing group of clients. By emphasizing the importance of the individual – both client and employee – we are able to grow while remaining a highly personalized business. In

the end, our employee-shareholders succeed as our clients succeed. As a mid-sized, privately held firm, we pride ourselves on delivering stronger, more personalized client service. Our decentralized marketing function ensures that our clients are serviced by professionals with the most knowledge about their account as they handle both marketing and day-to-day account management functions. We pull from various specialties within our 300-plus, in-house Chicago-based professionals for transaction consulting, management liability, surety, fidelity, certificate issuance, safety/loss control management, claims management and actuarial modeling, and from third-party strategic partners for client extranet, risk management information systems, certificate tracking, specialized safety/loss control technology/services, technology system audits, etc. Several of the services we offer – risk management, international and transaction consulting – are not profit centers. Further,

HOW HAS YOUR AGENCY GIVEN BACK TO YOUR LOCAL COMMUNITY? We leverage our resources – financial contributions, employee volunteering, mentoring and in-kind services – to support hundreds of local and national organizations that focus on education and economic development, healthcare, arts and culture, services for the disabled, and more. Many of our employees are actively involved with various charitable organizations as volunteers and board members. A dedicated community relations manager works to coordinate the firm’s philanthropic efforts. Our workplace giving program facilitates direct contributions to local and national nonprofit organizations through payroll deductions. Participating employees are rewarded with an extra day of paid vacation.

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FAST FACTS

Top 5 specializations Financial services industry

Manufacturing

Real estate

Public sector

Retail/wholesale distributors

“By emphasizing the importance of the individual ... we are able to grow while remaining a highly personalized business” they are integrated into the overall servicing of our clients to provide a holistic approach that better serves our clients’ multifaceted businesses. That is why, for example, we often provide transaction due diligence consulting at no additional charge to our clients; we view it as part of our overall account management services.

IBA: What are you doing to attract and grow your talent? JH: Since our firm’s founding, our employees

have proven to be our most valuable asset. The entrepreneurial spirit of our firm encourages an open sharing of ideas and perspectives between employees for a more comprehensive understanding of today’s interconnected world. By recruiting and bringing together professionals from various disciplines, we provide depth and value to our clients while fostering an environment that inspires our employees to help others and be a force for positive change – for clients and our community.

Year founded Mesirow Financial was founded in 1937; Mesirow Insurance Services was formed in 1972 Number of brokers and employees 346 employees, more than 100 of whom are in a production capacity for the brokering business Headquarters/location 353 North Clark Street, Chicago 2014 revenue $101 million for the insurance side of the business Number of policies written in 2014 Approximately 60,000

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PEOPLE

PRODUCER PROFILE

For the love of the game A chance phone call early in his career pulled Robert Murphy into the world of sports insurance – and he’s never looked back ROBERT MURPHY was a rookie in the insurance business when the opportunity of a lifetime got tossed in his direction. A fresh-faced graduate from La Salle University with an MBA in finance, Murphy had just started working for an insurance firm in Philadelphia when the receptionist fielded a call from a local professional sports team. “They were having a real challenge getting workers’ compensation insurance for their athletes, and they didn’t know what to do,” Murphy says. Nobody else at the firm wanted to deal with the problem, so they passed it off to the new guy to figure it out. Murphy did some research, made a lot of calls and ultimately bound coverage for the team. Within a week, he was getting calls from other teams around the country with the same issue. As a lifelong sports fan, “it was like I was in heaven,” Murphy says. Before long, he had transitioned into writing sports coverage on a full-time basis. Almost 30 years later, Murphy is the global sports and events industry practice leader at Marsh, where he and his team represent more sports franchises and venues such as stadiums and arenas than any other broker in the industry. “It’s what I do every day, and I absolutely love it,” Murphy says. “I can’t imagine doing anything else. It’s such an incredible industry with so many unique challenges.” From a brokerage standpoint, Murphy is responsible for the growth of Marsh’s sports industry practice, retention of business, client service and innovation, and developing new products and services. But at the end of

the day, he’s ultimately responsible for protecting the assets on a client’s balance sheet. “What sports teach us is the value of hard work, focus, effort, poise and perseverance, teamwork, communication, thinking on your feet, having a sense of urgency – these are the things that we believe are what makes us successful at Marsh and differentiates us from the competition,” Murphy says.

Game changers Over the years, risk management in the sports industry has changed in response to an increasingly complex world. “If you were to plot the top 10 risks or exposures for sports organizations, that list would have looked very different 10 years ago than it does today,” Murphy says. Today’s top new risks include head trauma issues, catastrophic property damage and business interruption to stadiums, and cyber exposures such as data breaches, as well as a changing sociopolitical landscape that has led to sports events becoming terrorist targets. “There is much greater focus on areas [such as] safety and security – the protection of assets, including athletes and other employees, spectators and real property, business continuity planning, enterprise risk management and response planning – all in an effort to protect the value and brand of a sports organization and its assets,” Murphy says. The amounts involved – up to hundreds of millions for an athlete’s contract or billions in value for a stadium, arena or a team – “are absolutely incredible,” he adds.

“I can’t imagine doing anything else. It’s such an incredible industry with so many unique challenges”

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BEATING THE BUZZER Timing is everything in the sports insurance industry, and sometimes that means that you’ve got to really hustle. Murphy recalls one situation where a professional sports team had a key player whose contract was up, and they didn’t think they would be able to re-sign him. Hours before the start of free agency, Murphy got a call from the team’s representative, confiding that they had reached an agreement with the player and were going to sign him to a ninefigure, multi-year contract. But before they could do that, they had to get insurance coverage on him in place by midnight. Normally, such deals can take weeks to arrange, Murphy explains. “But at the end of the day, after calling in huge favors – some of which I don’t think I can ever repay – I got the coverage in place, less than an hour before 12:01 a.m.,” he says. “The team and player signed the deal.” Only a small handful of people at Marsh knew what had gone on behind the scenes. “You would never see on ESPN how this deal almost didn’t happen,” Murphy says. Insider knowledge Murphy’s clients appreciate the level of expertise he brings to the playing field. “Bob is the guy who plays the role of the national sports expert – he gives us a better comfort that we are knowledgeable and informed of national industry trends,” says Jeff Goering, CFO of the Baltimore Ravens. “Bob’s got a great reputation in the sports field,” agrees Steve Ryan, the one-time commissioner of the Central Hockey League and past president of the Pittsburgh Penguins. “He brings a lot of industry experience to the table. He really has an analytical approach – he spends a lot of time looking at data and doing a lot of risk analysis. And he’s got an incredible work ethic.” The behind-the-scenes action in the sports insurance sector can be just as exciting as the stuff that happens out on the playing field. Throughout his career, Murphy has caught more than one Hail Mary pass from a client in desperate need of coverage. But for him, it’s all in a day’s work. “To succeed in this business, it really comes down to character,” he says. “You want someone who can perform under pressure when that late-night call comes – someone who has that poise, if you will, who can deliver when it’s needed. That is what differentiates us in this business.”

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FEATURES

CYBER INSURANCE

Handle with care As cyber criminals have become more savvy, the insurance industry has stepped up its game as well, offering an increasing number of products to protect against this ever-shifting threat

about the risks posed by data breaches and cyber attacks. However, the IBM study found that growing concern about the potential damage to reputation, classaction lawsuits and costly downtime is motivating executives to pay greater attention to the security practices of their organizations. Even so, three-quarters of American businesses still have no cyber liability coverage, according to a recent Towers Watson study.

“Most companies are really just starting to look at their cyber exposure and trying to understand what the risks are for them,” says Tracie Grella, global head of professional liability at AIG. For insurance professionals who are up to the task, this represents a colossal market waiting to be convinced to purchase cyber liability coverage. “It’s a hot product and a hot sector,” says Jeremy Barnett, senior VP of marketing

TOP CYBER BUSINESS CLASSES 50% 40%

Take-up rate

WHAT DO Hillary Clinton, Donald Trump, JPMorgan Chase, Sony Pictures, Anthem Blue Cross and Blue Shield, the US Office of Personnel Management, and the infidelity website Ashley Madison all have in common? Strange bedfellows though they may seem, all have been recent victims of highly publicized cyber attacks. Whether it’s one prominent politician’s email account or the financial information pertaining to 76 million households and 7 million small businesses across the nation, today’s cyber criminal underground is both chillingly precise and appallingly indiscriminate in the devastation that it wreaks around the globe on a daily basis. Given the level of interconnectedness in today’s business environment, a cyber attack is not a matter of if, but when. According to a recent MarketStance report, more than 6.6 million businesses could be current targets of some type of cyber threat. And a data breach can have serious ramifications for a company’s bottom line. An IBM-sponsored global analysis released in May 2015 found that the average total cost of a data breach has escalated to $3.79 million. In the past, senior executives and boards of directors might have been complacent

30% 20% 10% 0%

Healthcare

Education

Hospitality/ gaming

Financial

Power/ utilities

Retail Source: Marsh

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“Most companies are really just starting to look at their cyber exposure and trying to understand what the risks are for them” Tracie Grella, AIG at NAS Insurance. “It’s a big deal, and it’s constantly evolving.”

Who needs cyber insurance? Just about any organization that uses technology to do business faces cyber risk –

which is why they should be prepared with cyber liability insurance. “You would have to live under a rock to not realize that all kinds of companies are vulnerable to all kinds of serious threats,” says Kurtis Suhs, vice president and national

technology and privacy product manager at Ironshore. “Even if you are a company with very little personally identifiable information and data, you could still have an event like CryptoLocker [a ransomware trojan propagated via infected email attachments] that could indiscriminately target you because you are connected to the Internet, and then knock you offline.” Industries that have adopted cyber coverage most broadly include financial, retail, healthcare and other professional services (such as lawyers and accountants), as well as the hospitality and education sectors.

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FEATURES

CYBER INSURANCE

TOP CYBER PRODUCTS Cyber insurance is one of the fastest-growing and fastest-evolving products in both the standard and excess and surplus markets. It comes in all shapes and sizes, from modest endorsements to towers of stand-alone coverage.

Privacy breach response Covers legal, public relations, IT forensics, credit monitoring, and notification costs stemming from a hacking incident or breach

Liability coverage Pays for defense, damages and lawsuits caused by a breach

Anatomy of a data breach The signature exposure in the cyber sector is the data breach. Data breaches can involve protected health information; personally identifiable information such as social security numbers, credit/debit card numbers and email/user names/passwords; and trade secrets or intellectual property. The magnitude and cost of a breach varies depending on the number of identities that have been exposed. Generally speaking, the

and 2014 stemmed from BlackPOS, a malware strain designed to siphon data from cards when they are swiped at infected point-of-sale systems. In both cases, hackers used a vendor’s stolen log-on credentials to penetrate the retailer’s computer network and install the custom-built malware. Spear phishing is another way criminals can access an otherwise secure electronic system. “An email that appears to be from an individual or business that you know is

“Expert criminals know how to get into a system and not just steal data, but upset functions of a manufacturing or utility company” Jeremy Barnett, NAS Insurance

Business interruption coverage Reimburses a policyholder for loss of income due to a cyber breach

Cyber extortion Pays an extortionist who has threatened to disclose, encrypt or delete data if the ransom is not paid

“But over the last two years, all industries are buying the coverage,” Grella says. “The last industries to really buy are manufacturing and oil and gas.” While these sectors have less personal data and thus are less at risk of the kind of data breach that is most commonly associated with cyber liability, “they see the value of other things that are now covered under a cyber policy – like business interruption and cyber extortion, which are real threats for those kinds of organizations,” Grella says.

greater the number of identities, the more serious and expensive the breach, although in some cases, a small number of records containing sensitive corporate or personal information can be equally devastating. Data breaches can happen in many different ways. The Identity Theft Resource Center currently tracks seven categories of data loss methods: insider theft, hacking, data on the move, subcontractor/third party, employee error/negligence, accidental web/ Internet exposure and physical theft. Often, Suhs says, criminals use malware to infiltrate an organization’s electronic network via email attachments. If someone on the receiving end of such an email opens the attachment, the malware penetrates the organization’s electronic network, making its contents available to the criminal, who can then sell valuable information stored in the network through underground cybercrime shops or distribute it to others. The spectacular breaches that hit major retailers Target and Home Depot in 2013

actually from criminal hackers who are after your credit card and bank account numbers, passwords and financial information such as online banking credentials,” Barnett explains.

Innovation in the cyber sector Most of the innovation in the cyber sector today is occurring in response to cyber crime. One of the biggest evolutionary steps has to do with cyber attacks that relate to control systems that, if breached, can result in physical damage to property or harm to people. “With all the systems automation, everything is run by software, and so many areas of an organization are open to the Internet,” Barnett says. “Even if it’s not meant to be a public website, expert criminals know how to get into a system and not just steal data, but upset functions of a manufacturing or utility company.” A non-data breach can have ripple effects well beyond the entity that’s been hacked.

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If a utility company gets shut down, it can impact tens of thousands of customers who rely on electricity to run their businesses, leading to a wide ring of business interruption claims ultimately relating back to the software issue or cyber breach. “That’s the big, scary risk,” Barnett says. “When the US Department of Commerce has a cybersecurity office, they are concerned about someone taking control of a nuclear power plant, somebody hacking into and shutting down the power grid, or somebody getting into a water supply system or drug manufacturing plant.” Such a breach on the government level could be the result of state-sponsored cyber terrorism. “But at the same time, you can imagine the evolution of corporate espionage, when competitor A wants to take down competitor B, what they can do to

disrupt their competitor’s business,” Barnett says. “That’s an emerging risk where cyber liability insurance is now starting to fit in.” Another new type of coverage has been developed for incidents where a cyber criminal extracts money from a corporation or organization through a phishing scheme known as a business email compromise. In a typical scenario, the cyber criminal will gain access to and monitor the organization’s email traffic stream and spoof an email account from an executive, sending an email requesting that the recipient wire funds to a fraudulent account. According to a recent FBI report, there has been a 270% increase in these types of attacks since January 2015. The scam has been reported in all 50 states and in 79 countries, and total dollar losses have exceeded $740 million.

“The primary benefit of the cyber liability product is that insurers have pre-negotiated rates with third-party service providers … to help mitigate the breach” Kurt Suhs, Ironshore AN EMERGING THREAT The Hill reported in October that suspected China-based hackers are luring government workers and employees at large corporations in more than 20 countries to download malicious Android apps that can hijack a smartphone through corrupted versions of popular apps, promoting the download links on websites and in app ads. Once downloaded, the malicious app instantly collects and uploads all of the device’s information to a remote server, where it can take control of the phone and uninstall, launch or install other apps on the device, possibly preparing for further attacks.

A shifting paradigm While it’s absolutely vital for companies and organizations to take measures to protect themselves from data breaches and cyber attacks, “in the end, if a state-sponsored group or sophisticated hacker wants to get into your network, they are going to find a way to get in,” Suhs says. Indeed, there’s a saying among security professionals that “either you have been data breached, or you just don’t know that you’ve been data breached.” But the sooner the breach is discovered, the faster it can be remediated and contained. “The primary benefit of the cyber liability product is that insurers have pre-negotiated rates with third-party service providers who are experts for loss control, forensics, identity and credit monitoring and public relations to help mitigate the breach,” Suhs says. Risk management services remain an essential part of the cyber liability insurer’s role as well. Many insurers now offer multifaceted risk management programs; benefits range from hotlines to loss control portals to on-call chief security officers assigned to each insured’s account. For producers looking to capitalize on the cyber sector, Barnett sums up his advice in just two words: get smarter. “The more knowledgeable and engaged you can be about cyber risk and what to be looking for in a cyber policy, the more it’s going to help you be a much more trusted partner and advisor, not just a product salesperson,” he says. “There is a huge need in the market to have more brokers and underwriters who specialize in this risk,” Grella adds. “It’s a dynamic environment, and it’s changing all the time. There are lots of opportunities to be creative, and lots of opportunities to really impact our clients by helping them better understand something that’s so challenging and so important.”

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FEATURES

MOTIVATION

How to overcome excuses Great people throughout history have often failed, quite miserably, before finally reaching their goals, writes international business strategist Dan Waldschmidt

Not everything needs to be done in place of sleep. If you work for a boss, then you owe them solid time. You can’t cut that out. You can, however, cut out television time, meetings and anything else that gets in the way of achieving your goals. Replace entertainment with activity toward your goal.

Refuse to let yourself wallow in self-doubt

You’re alive to succeed. Stop comparing your current problems to your last 18 failures. They are not the same. You are not the same. Here’s something to remember: Your entire life has been a training ground for you to capture your destiny right now. Why would you doubt that? Stop whining. Go conquer.

Ask yourself, “What can I do better next time?”

And then do it next time. If you spend a decade or two earnestly trying to be better, that’s exactly what will happen. The next best thing toward doing something amazing is not doing something stupid. So learn from your mistakes, and use the lessons to dominate.

Proactively take time to do things that fuel your passion

Exercise is a great example. Living in the moment requires you to live at peak performance. A huge part of mental fitness is physical fitness. A sparring or running partner is a great way to refresh physical competition. Physical activity accelerates mental motivation. VAN GOGH sold only one painting during his lifetime. Winston Churchill lost every public election until becoming prime minister at age 62. Henry Ford went bankrupt five times. Albert Einstein was a terrible student and was expelled from school. Sigmund Freud was booed from a stage. Ideas, brilliance, genius – they all mean nothing without the guts, passion and tenacity necessary to make your dream a reality. But often, people fall back on excuses and give up on trying to reach their goals. Most of us have dreams – and many of us have big ones – but few of us actually see them through.

Here are six tips for jumping off the excuse train and forging the path to your goals.

Avoid the need to blame others for anything

Mean, small-minded people know that they suck. That’s why they’re so cranky and eager to point out others’ mistakes. They hope that by causing others to feel inadequate, everyone will forget how woefully off the mark their own performance is. Don’t blame anyone, for any reason, ever. It’s a bad habit.

Stop working on things that just don’t matter

Apologize to yourself and those around you for having a bad attitude Do this once or twice, and you’ll snap out of your funk pretty fast. When you start genuinely apologizing for being a bad influence on those around you, you learn to stop whining and start winning. Dan Waldschmidt is the author of Edgy Conversations: How Ordinary People Achieve Outrageous Success (www. edgyconversations.com). He is an international business strategist, speaker, author and extreme athlete. His consulting firm solves complex marketing and business strategy problems for savvy companies all over the world.

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FEATURES

MARKETING

Your personal brand: from ‘now’ to ‘wow’

When you Google yourself, what’s the first thing that comes up? Is this image consistent with how you want to be portrayed? Nikki Heald explains the importance of consistent personal branding

TODAY, IT’S more important than ever for you to make your personal brand stand out. The idea of personal branding is certainly not new and has been bandied around for many years. Simply put, it relates to the way you market ‘you’ to the outside world. It’s about your professional profile and reputation. It’s about the value that others perceive you possess. Branding incorporates reputation and credibility. It influences whether people will buy from you, do business with you or even want to associate with you. If you want to

stand out from competitors and position yourself to win, then developing, fine-tuning or tweaking your current brand is the way to go. The good news is that you can shape and control your brand. Personal branding should be an integral part of your overall marketing strategy – and if you don’t particularly like the term ‘personal brand,’ then substitute it for another term such as ‘personal visibility,’ ‘personal perception’ or ‘professional profile.’ Ultimately, it doesn’t matter what you call it; the fact is, there is a proven link between

projecting a professional image and success. Celebrities are good examples of personal brand managers. They work tirelessly and consistently to promote their visibility in their fields of expertise. They find ways to be unique and memorable. However, you don’t have to be a superstar or celebrity to build a strong and unique brand proposition. Whether you wish to market yourself for a new career, increased sales or diverse opportunities, it’s essential that your brand is genuine and promotes authenticity. How well you know yourself is vital. Do you have a strong sense of your professional message? Do you know your brand story? Do you communicate your brand consistently using multiple sources? Identifying what distinguishes you from others is no easy task, especially in this world of marked competition, but it’s unquestionably worth the investment. For those of you who own a business, perhaps you’ve spent loads of money on marketing campaigns to promote your business, but when was the last time you invested in you?

Where do I start? The first step is to reflect upon your current

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brand and then determine whether this is your ultimate or desired personal brand. Ask others around you for feedback – clients, colleagues and your management team. What words do they associate with you? What do they believe are your strengths? What areas do they perceive you may be able to develop? What makes you different from others? A clear understanding of what your brand looks like now as opposed to what you would like it to look like in the future allows you to identify those gaps that will require your attention. Generally, the identifiable gaps will fall under one of the ‘Five Keys to Personal Branding’ that I have developed and use in my workshops: 1. Presentation: Dressing to reflect your position and meet client expectations; good grooming, hygiene and presenting an image that conveys credibility 2. Communication: How you position yourself verbally, nonverbally and in written communication; ensuring your online presence communicates the right messages 3. Behavior: How you conduct yourself at business events, meetings and in day-to-day interactions; demonstrating courtesy, respect and correct protocol for the situation 4. Skills: Ensuring you keep your knowledge and competencies up to date; being on top of what’s happening in your profession through training, mentoring and coaching 5. Service: Providing exceptional service to both internal and external parties; doing what you say you are going to do and finding ways to delight your clients After you’ve carefully analyzed these five core areas and discovered the gaps, the next step is to determine what action you plan to undertake to take your brand from ‘now’ to

‘wow.’ Remember, this will take time, energy and effort; it won’t happen overnight.

Social media and branding The growth of LinkedIn, Twitter, blogs and Facebook has made it even easier for prospective clients to research you – and believe me, they will. In this digital day and age, people rely heavily on social media, and what you post is of interest to them. People are using Google personally and profes-

future of personal branding. Take time to create some short videos (ideally, no more than 90 seconds) about who you are, what you do and the value you are able to offer. Load them onto You Tube, your website, LinkedIn or other relevant sites for current or prospective clients to view.

Broadcasting your brand After all the time, energy and effort you’ve invested into cultivating your ultimate

“The reality is that you will lose control of how you appear online if you are not the one in charge of managing your presence. Be mindful of what you publish or post” sionally on a daily basis. The first thing to do online is to find out what is being said about you and what information comes up in searches. Google your name and see what comes up. What do social media sites reveal about you? Does the content support the brand or perception you wish to convey to others? Could they be updated or improved to enhance your online image? The reality is that you will lose control of how you appear online if you are not the one in charge of managing your presence. Be mindful of what you publish or post. From a business perspective, LinkedIn’s powerful position in search engines means that your LinkedIn profile will probably come up first. Make sure you have a professional photo that creates a great first impression (not a dodgy one taken after a few drinks); provide all necessary contact information; customize your profile URL; load your summary, skills and work history; and add recommendations and honors or awards you have achieved. Social media is just one way to promote your visibility, and while blogs, articles and LinkedIn assist with this, video is the

personal brand, you need to do something with it – otherwise, you’ve effectively wasted your time! There are countless ways to communicate your value to both internal and external markets. Don’t be shy – it’s your time to shine and get your name out there. Here are a few ways you can build your presence: sponsorship, community involvement, networking, hosting an event, chairing a meeting, getting involved in committees, producing a white paper, speaking at events, or writing articles, newsletters or a book. Remember, discovering or enhancing your personal brand is not difficult and will have a significant impact on sales and career advancement. Your individual marketing campaign is essential to building credibility and confidence but must be backed up by consistent, day-to-day action.

Nikki Heald is the managing director of Corptraining. Heald co-authored the book Views On The Way To The Top, publishes numerous articles, and her input is sought by various media channels.

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IBW INSURANCE BUSINESS WHOLESALE

E-NEWSLETTER  MOBILE  WEBSITE

Dedicated news for the E & S Wholesale Market

To subscribe, email lodia.tipon@keymedia.com insurancebusinesswholesale.com

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:39:00 AM

PEOPLE

CAREER PATH

RESPECT IS KEY

Gary Dudley’s journey has been enriched by the culture of respect that he and SWBC co-founder Charlie Amato have built into their business Dudley is very active in the 2014 community, working extensively with CHAIRS AMERICAN the Children’s Miracle Network, the HEART AND STROKE United Way and the American Heart FOUNDATION and Stroke Foundation CHARITY WALK

“One of the things that Charlie and I decided a long time ago is that we ought to give a portion of our earnings back to the community that we live and work in” In 1993, Red McCombs sold his share in the San Antonio 1993 Spurs NBA team to a group PURCHASES A of more than 20 investors – SHARE IN THE including Dudley and Amato SAN ANTONIO “It’s been a lot of fun. SPURS We’ve won five NBA championships, and we’re hoping for a real good year this year” 1971 ENTERS THE INSURANCE INDUSTRY After boot camp, Dudley returned to his position as a school coach, but when his wife became pregnant, he decided it was time for a change. He was offered a position with the now-defunct Kinney Corp., where he sold insurance to credit unions throughout the southern US “I took that job, with an opportunity to increase my pay, so I could support a family”

Dudley studied business administration and physical education at Sam Houston State University. Shortly after graduating, he found work in the Houston Independent School District as a football, basketball, track and swim coach. Later that year, though, he was drafted into the United States Army and chose to serve as a member of the Marine Corps

Over the years, SWBC has expanded to all 50 states and Europe, and has diversified to offer mortgage products and professional employer services as well as insurance. Dudley and Amato’s dedication to their customers and employees has hardly gone unnoticed – in fact, the duo was recently inducted into the Texas Business Hall of Fame “That meant that someone saw we were sort of doing the right thing”

2013

BECOMES A MEMBER OF THE TEXAS BUSINESS HALL OF FAME

1976 STARTS SWBC WITH CHARLIE AMATO

Unhappy with his job at Kinney, Dudley began chatting with Charlie Amato, a fellow Kinney employee, while at a party for Sigma Phi Epsilon fraternity alumni. They decided to leave and start SWBC “And the rest is history. We still own the company 50-50, and today we have 2,800 employees. We have the intention of treating employees and clients with dignity and respect”

1970

HEADS TO TRAINING CAMP FOR THE US MARINES The following year, Dudley left his position as a school coach to enter boot camp as a marine “That draft was in September, and they called my number in November. Rather than go GRADUATES to the Army, I decided I’d join the Marine Corps Reserves and FROM SAM go six months active and six years in the Reserves. Twice I HOUSTON STATE was activated to go to Vietnam, then Richard Nixon called it UNIVERSITY off, so I never did serve overseas”

1969

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PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email iba@keymedia.com

1910

Year the Boy Scouts of America was incorporated

SCOUT’S HONOR Broker Tuan Do doesn’t just help his Boy Scout troop embody the “be prepared” motto; he models it in his daily work

AS AN insurance broker, you never know what might come through your door. Tuan Do, a senior broker at Wood Gutmann & Bogart Insurance Brokers in California, says it helps to be prepared – a skill he’s perfected through his involvement with the Boy Scouts of America. Do, who currently serves as a scoutmaster, was a Boy Scout as a child. He rejoined the organization in a leadership role when his own children – Dien, 14 (pictured); Spencer, 11; and Lincoln, 8 – got involved.

56,841

Number of Scouts who earned the Eagle Scout rank in 2013

57.4

Percentage of NASA astronauts who were Boy Scouts

“The parents are always there, so they become leaders,” Do says. “That’s how you get into it, I think.” In addition to organizing weekly meetings and monthly camping trips, Do guides his Scouts through their advancements, helping them realize the Boy Scouts’ motto: “Be prepared.” Do also applies that slogan to his work in the insurance industry. “You always have to have the forethought of what could go wrong versus [what] has never gone wrong,” he says. “Insurance is a be-prepared thing.”

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Beyond Security®

“It Takes Discipline”

Marty Hacala Fitness Enthusiast General Star President & CEO

“Rolling out of bed at 5am every morning to work out requires discipline. It’s my way of getting the very most out of my busy day. “At General Star, we strive to get the very most out of our wholesale broker relationships. As a member of the Berkshire Hathaway family of companies, our financial strength is unsurpassed. But it’s our disciplined approach to building and maintaining profitable partnerships with a select group of brokers that drives us. “Discipline: Whether sticking with an early morning exercise regimen or standing firm with a limited number of valuable wholesale broker relationships, it remains the cornerstone of our success.” To locate the General Star broker nearest you, visit our website at www.generalstar.com.

© 2015 General Star National Insurance Company is licensed in the District of Columbia, Puerto Rico and all states. General Star National Insurance Company has its principal place of business in Stamford, CT and operates under NAIC Number 0031-11967. Insurance is placed with General Star National Insurance Company by licensed producers. General Star Indemnity Company is an eligible surplus lines insurer in all states, the District of Columbia, Puerto Rico, and the Virgin Islands. It has the status as an unlicensed insurer in California and operates under NAIC Number 0031-37362. Insurance is placed with the General Star Indemnity Company by licensed producers and, for risk that qualify, by licensed surplus lines brokers. Atlanta 404 239 6777

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