Insurance Business America issue 3.08

IBAMAG.COM ISSUE 3.08

YOUNG GUNS Meet the 42 young professionals who are brightening the industry's future

MISTAKE PROOF GUARDING AGAINST THE COSTS OF INCREASED LITIGATION

OFC & Spine-SUBBED.indd 2

MERGER MANIA WHAT'S IN STORE FOR THE P&C SPACE AS MORE COMPANIES CONSOLIDATE

DRIVEN TO EXCESS DO YOUR COMMERCIAL AUTO CLIENTS NEED EXCESS COVERAGE?

19/08/2015 2:25:17 AM

If you can think it, we’ll think of a way to insure it.

Le A o p

IFC-01.indd 1

19/08/2015 2:24:19 AM

Join us as we celebrate 50 years of innovation.

At Lexington Insurance, our solutions have to be as original—and daring—as the ideas we insure. After all, for over 50 years we’ve taken on the risks that others won’t. Join us as we celebrate a history of innovation: 50 years of firsts.

For insurance. For people. For companies. To see our anniversary timeline, go to www.lexingtoninsurance.com/50years

50 CELEBRATING

YEA R S

OF INNOVATION

Lexington Insurance Company, an AIG company, is the leading U.S.-based surplus lines insurer.

AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit www.aig.com. Products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Not all products and services are available in every jurisdiction, and insurance coverage is governed by actual policy language. Certain products and services may be provided by independent third parties. Insurance products may be distributed through affiliated or unaffiliated entities. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.

IFC-01.indd 2

19/08/2015 2:24:05 AM

ISSUE 3.O8

CONNECT WITH US Got a story or suggestion, or just want to find out some more information? twitter.com/InsuranceBizUS

CONTENTS

plus.google.com/+Ibamag facebook.com/InsuranceBusiness America

UPFRONT 04 Editorial

Celebrating this year’s Young Guns

FEATURES

44

PROFESSIONAL LIABILITY

COVER STORY

YOUNG GUNS

24

These 42 young professionals are breaking down generational barriers and ushering the insurance industry into a new era

PEOPLE

INDUSTRY ICON

Despite the frequency of lawsuits against professionals, much of the market still lacks coverage

08 Head to head

Will the recent Supreme Court ruling quell the Obamacare debate?

10 News analysis

What recent mergers and acquisitions mean for the P&C market

12 Intelligence

This month’s big movers, shakers and new products The debate over medical marijuana hits the workers’ comp arena

PEOPLE

48

PRODUCER PROFILE

Looking for a niche in the industry, Warren Oliver turned to his favorite pastime: camping

16 Technology update

The difficulties with insuring drones

18 Opinion

Why marriage equality is a win-win for the insurance industry

PEOPLE 55 Career path

Richard Skorupski’s career with Meeker Sharkey was meant to be

56 Other life

Kari Dybdahl is hitting her targets

FEATURES

50

COMMERCIAL AUTO

How excess commercial auto coverage protects trucking clients from the unthinkable

2

The real cost of natural disasters in the US

14 Workers’ comp update

Post-XL Group merger, Stephen Catlin reflects on his agency’s everincreasing global presence

20

06 Statistics

IBAMAG.COM CHECK IT OUT ONLINE

www.ibamag.com

02-03_TOC-SUBBED.indd 2

19/08/2015 2:08:57 AM

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 Hataway 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

Chicago 312 267 8600

A.M. Best A++ XV

02-03_TOC-SUBBED.indd 3

Los Angeles 213 630 1930

S&P AA+

New York 212 859 3950

Stamford 203 328 5700

A Berkshire Hathaway Company

19/08/2015 2:08:59 AM

UPFRONT

EDITORIAL

Scaling the generational walls

A

s fall approaches, the insurance industry looks forward to another busy season of conferences, meetings and annual networking events.

In between the business deals and the evening cocktails, it isn’t an uncommon sight to see attendees shake their heads and laugh at the sea of gray and white hair before them.

After all, everyone knows the average age of an insurance professional these days is 54, and that the industry will need to fill 400,000 positions by 2020 to keep pace with retirement rates.

With that strong of an imperative, it’s easy to build up walls between the tried and true members of the industry and those who are just getting their start. It takes a lot more work to scale that wall and join together in pursuit of shared success.

It’s easy to build up walls between the tried and true members of the industry and those who are just getting their start This year’s Young Guns award list features 42 exceptional professionals under the age of 35 who have managed just that. Not only have they made a name for themselves despite their limited years of experience, but they have benefited their respective workplaces and the industry as a whole.

From across the industry, these triumphant tales will help to inspire change in the way the insurance industry captures and utilizes young talent.

We hope you will take the time to learn from these Young Guns and the stories they share in order to enrich diversity and scale the generational walls of your own agency.

The team at Insurance Business America

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

CONTRIBUTORS Samantha Wright David Kosar

ART & PRODUCTION Design Manager Daniel Williams Designers Joenel Salvador Marla Morelos

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

Production Manager Alicia Salvati Traffic Manager Kay Valdez

EDITORIAL INQUIRIES caitlin.bronson@keymedia.com

SUBSCRIPTION INQUIRIES subscriptions@keymedia.com

ADVERTISING INQUIRIES

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

Key Media 78O7 E. Peakview Ave., Suite 115 Centennial, CO 80111, USA tel: +1 720 316 0151 www.keymedia.com Offices in Denver, Toronto, Sydney, Auckland, Manila

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

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.

4

www.ibamag.com

04-05_Editorial-SUBBED.indd 4

19/08/2015 2:09:29 AM

38245 B

Your gateway to contractors markets.

CONTRACTORS SOLUTIONS

Placing insurance for different contractors can be a daunting project.

At Burns & Wilcox, our network of domestic and international carriers opens doors to the broadest range of markets. Since time is of the essence, we deliver quotes and binders fast. When it comes to finding solutions for every stage of construction, contact the wholesale broker with the tools to make the hard-to-place easy – Burns & Wilcox.

800.521.1918 | burnsandwilcox.com

Commercial | Professional | Personal | Brokerage | Binding | Risk Management Services

38245 Burns Commercial RSZ 04-05_Editorial-SUBBED.indd 5 ad Insurance Business America APPROVED.indd 1

8/13/15 10:55 19/08/2015 2:09:37 AMAM

UPFRONT

STATISTICS

United States of disaster

A nation as diverse as the US is also home to a wide range of natural disasters that can strike anytime NEWS COVERAGE at the turn of the year was dominated by the crippling snowstorms that gripped the Northeast of the United States. The storms, which dumped some 10 feet of snow on Boston, came as part of a cruel winter during which overall losses totaled $4.3 billion, only $3.2 billion of which was insured.

Given the rising profile of natural disasters – whether a ‘polar vortex’ or a ‘superstorm’ –

one would assume most American businesses are covered for natural disaster, but it appears there are still gaps in the market. In its latest update, Munich Re noted that the first of the year saw $12 billion in overall losses due to natural disasters – only $8 billion of which was covered by insurance. That significant shortfall suggests the natural disaster market could still provide room for growth in the insurance industry.

Drought/heatwave

Since 2012 CPI-adjusted estimated cost: $31 billion

THE MOST DESTRUCTIVE NATURAL DISASTERS

178

$15.9 billion

50%

Number of natural disasters in the US since 1980 with losses of more than $1 billion

Average loss sustained after a tropical cyclone in the US

Percent of total losses from natural disasters attributed to tropical cyclones

The US has been hit by some of the biggest natural disasters in recent history. Since 2000, the country has seen 103 disasters that have cost more than $1 billion

874

Number of tornadoes that have touched down in the US in 2015 as of July 12

Source: Munich Re NatCatService, National Centers for Environmental Information

DISASTER COSTS DOWN IN EARLY 2015 The number of global natural disasters during the first six months of this year is comparable to the same period last year, but the cost of those disasters has fallen significantly

FLOOD CLAIM PAYOUTS STEADY OVERALL Other than record-setting spikes in 2005 (due to Hurricane Katrina) and 2012 (due to Superstorm Sandy), payouts for flood claims have remained relatively steady over the last three decades 250,000

200,000

Overall losses

$60 billion

150,000

Overall losses

Insured losses

$35 billion

$23 billion

Insured losses

$12 billion

100,000

Number of events

Source: Munich Re NatCatService, July 2015

6

2014

2011

2008

2005

2002

1999

1996

1993

1990

1984

First six months of 2015

0 1981

First six months of 2014

510

1978

520

Source: Fema.gov

www.ibamag.com

06-07_Stats-SUBBED.indd 6

19/08/2015 2:10:04 AM

Southeast/Ohio Valley/Midwest tornadoes

April 2011 CPI-adjusted estimated cost: $11 billion

Hurricane Sandy

October 2012 CPI-adjusted estimated cost: $67 billion

Hurricane Katrina

Hurricane Ike

August 2005 CPI-adjusted estimated cost: $151 billion

September 2008 CPI-adjusted estimated cost: $33 billion

Hurricane Ivan

September 2004 CPI-adjusted estimated cost: $26 billion Source: National Centers for Environmental Information

CITIES WITH THE GREATEST STORM SURGE RISK Not surprisingly, Florida dominates the list of the top 10 cities in the US that are exposed to hurricane storm surge

1. New York, NY

6. Cape Coral, Fla.

Properties potentially affected: 687,412 Reconstruction value: $251 billion

Properties potentially affected: 299,508 Reconstruction value: $60 billion

2. Miami, Fla.

7. Bradenton, Fla.

Properties potentially affected: 562,410 Reconstruction value: $103 billion

Properties potentially affected: 227,821 Reconstruction value: $43 billion

3. Tampa, Fla.

8. Houston, Tex.

Properties potentially affected: 444,765 Reconstruction value: $79 billion

Properties potentially affected: 216,880 Reconstruction value: $42 billion

4. Virginia Beach, Va.

9. Philadelphia, Pa.

Properties potentially affected: 394,705 Reconstruction value: $87 billion

Properties potentially affected: 213,668 Reconstruction value: $42 billion

5. New Orleans, La.

10. Naples, Fla.

Properties potentially affected: 381,149 Reconstruction value: $85 billion

Properties potentially affected: 177,651 Reconstruction value: $41 billion Source: CoreLogic The MarketPulse, June 2015

TORNADO NUMBERS TRENDING DOWN As of July 12, tornado numbers continue to fall well below the annual total experienced in 2011 – a historically bad year for tornadoes in the US 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800 1,543 1,894 700 2010

2011

938

907

888

874

2012

2013

2014

2015

Source: National Oceanic and Atmospheric Administration

www.ibamag.com

06-07_Stats-SUBBED.indd 7

7

19/08/2015 2:10:12 AM

UPFRONT

HEAD TO HEAD

Have we seen the last of the Obamacare debate?

In late June, the Supreme Court effectively upheld the Affordable Care Act – but will that really be the last word?

Paula Abney

President Abney Insurance Agency “I do not think we’re going to repeal Obamacare; it is here to stay. But I think the industry needs to make some changes. Premiums and deductibles have gone up, and the average consumer cannot afford it. While it’s a noble cause to have insurance for everyone, if no one can afford it, it’s not noble.

I think any time the government has to get involved, it’s usually because industry didn’t solve the problem. The industry knew we had disenfranchised people with health concerns. But when the industry puts their feet in the sand and doesn’t react to a major need, the government gets involved. We’re not going to stop the train, but we can lay some new track.”

Carole Aljadah

Agent Advance Insurance Agency “I don’t think we’ve heard the end of it, but I think now that the Supreme Court has ruled, Obamacare will have to be accepted.

I think the insurance companies are really in the middle of this problem because they’re just trying to collect enough money to pay the cost of healthcare.

Going back to what we had isn’t the answer. I talk to a lot of people about health insurance. It’s been a problem, it is a problem, and it will continue to be a problem. I don’t think it should only be for the rich; it should be for everyone.”

John Baugh

President John Baugh Insurance Agency “I do not believe we have seen the last debate. I think it has spurred on even more. With the Supreme Court making laws – which they are not supposed to do – [they] have taken some of the power, if not all, away from the states. I believe the commissioners in each state will have something to say about it.

Also, prices continue to rise, and more and more people do not qualify for subsidies. The debate has just started, and I think it is a move to get away from Obamacare and use a hybrid form.

More and more companies that I represent – or used to – are getting out of healthcare.”

THE OBAMACARE CONTROVERSY Following its implementation in 2010, the Affordable Care Act – nicknamed Obamacare – has faced its share of controversy. The Supreme Court upheld the law in 2012, and more recently decided that the federal tax subsidies required by the ACA are legal. That ruling has reignited the heated debate surrounding Obamacare. Insurance professionals, particularly those dealing with health insurance, have been especially impacted by the ruling, and have been particularly vocal about how they feel about the ACA. Love it or hate it, though, the industry still needs to work with Obamacare.

8

www.ibamag.com

08-09_Head to Head-SUBBED.indd 8

19/08/2015 2:10:36 AM

WHEN YOU FIND THE PERFECT FIT, YOU FEEL IT. NO BUNCHING. NO BUNDLES. NO NONSENSE. Buying specialty insurance shouldn’t be an “off-the-rack” experience.

At Safety National, we build personal relationships and design customized solutions that are tailored to your customers’ unique needs. It’s our expertise, at your service.

We also offer large deductible casualty and other specialty coverage.

To learn more, contact our Business Development Department at (888)995-5300 or visit safetynational.com.

08-09_Head to Head-SUBBED.indd 9

19/08/2015 2:10:41 AM

UPFRONT

NEWS ANALYSIS

A shrinking world The recent spate of consolidation among property/ casualty insurers has producers reassessing their place in a market dominated by fewer and fewer large players THE NEWS that ACE had offered a recordbreaking $28.3 billion to acquire rival Chubb traveled fast.

The deal, which was completed in a matter of days, joined together two carriers with large books of personal lines business and a heavy reliance on the independent agent channel. It was also almost completely unexpected.

“It’s a shockwave through the property and casualty insurance industry,” says Marc Eagan, president of Eagan Insurance Agency in Metairie, La. Eagan and thousands of other producers appointed with the two companies are concerned about the effects a smaller marketplace may have on their businesses.

actions worth more than $1 billion were either announced or completed in the past three months, and analysts suggest the P&C industry hasn’t seen the end of this rash of consolidation.

The string of mergers and acquisitions began in May, when Chinese juggernaut Fosun International announced that it would pay $1.84 billion to acquire growing insurer Ironshore. A $4.8 billion deal between Catlin and XL Group followed shortly after, and HCC Specialty made headlines in June by agreeing to a $7.5 billion takeover offer from Tokio Marine.

In July, Zurich announced it was considering an $8 billion acquisition of RSA Group in London, while Exor opened talks

“There is still a lot of market capacity, and there’s always someone ... who will step up if there’s a void created” Tim Cunningham, OPTIS Partners Culture clashes, interruptions in service and changes in pricing are all possible consequences of the acquisition, and in an environment of fierce competition for client business, such transactions are regarded with pointed skepticism.

Producers have had plenty of fodder for such rumination. Including the ACE/Chubb deal in July, no fewer than seven trans-

10

with PartnerRe for a $6.7 billion deal.

Analysts say soft market conditions and continued low interest rates make consolidation an appealing option for insurers, and that industry observers should expect many more before the year is through. “[There is] a significant merger-andacquisition trend in the insurance space that we expect to persist,” FBR Capital Markets

analyst Randy Binner wrote recently. “Excess global liquidity and low interest rates are the drivers of the M&A trend, and as long as this environment persists, we believe insurers could be pressured to buy properties where rates are higher, or merge in an attempt to gain scale.”

However, many believe producers are incorrect in anticipating significant changes as a result of recent consolidation.

“I don’t think you’ll see any of these transactions move the needle at all,” says Tim Cunningham, a longtime insurance veteran and founder of agency consulting firm OPTIS Partners. “I would advise clients to read the tea leaves – things will be different following a merger or acquisition, but I don’t think you need to be panicking.”

Cunningham stresses that the sheer size of the property/casualty industry ensures that price hikes are not in the offing, unlike in the rapidly shrinking employee benefits space.

“There is still a lot of market capacity, and there’s always someone – some other player – who will step up if there’s a void

www.ibamag.com

10-11_News Analysis-SUBBED.indd 10

19/08/2015 2:11:11 AM

MERGER MANIA July 29, 2015 Exor opens $6.7 billion acquisition talks with PartnerRe July 28, 2015 Zurich announces potential $8 billion takeover of RSA Group July 1, 2015 ACE Ltd. acquires Chubb Corp. in recordsetting $28.3 billion deal June 30, 2015 Willis Group merges with Towers Watson in a deal valued at $18 billion June 10, 2015 Tokio Marine reaches $7.5 billion agreement to acquire HCC Insurance Holdings

created,” he says.

Still, the world of P&C insurance distribution has not been entirely unaffected.

Consolidation has also been rife among some of the industry’s largest brokers.

the East Coast-based Agency Network Exchange, such deals should send an important message to smaller independent agencies on how to survive in an increasingly competitive environment.

“The challenge with bigger, conglomerate brokers is that they haven’t taken time to become efficient organizations” John Tiene, Agency Network Exchange In July, Willis Group announced it would merge with professional services firm Towers Watson in a deal valued at $18 billion. The new entity, called Willis Towers Watson, is expected to bring in revenues of $8.2 billion while generating savings of $100 to $125 million within three years. Combined, the new firm will employ more than 39,000 workers in 120 countries and will join Willis’ risk management services with Towers Watson’s analytics expertise.

According to John Tiene, CEO of

“The Willises of the world are only going to get bigger and continue to crowd out mid-sized agencies that have historically made up the bulk of the market,” Tiene says. “That really just reinforces the need for insurance agents to start thinking about joining an organization that gives them some of the similar scale and access that Willis and others have.”

By joining agency networks and aggregators, Tiene says producers can gain access to larger carriers and more advanced

May 4, 2015 XL Group finalizes $4.8 billion takeover of Catlin Group May 3, 2015 Fosun International makes $1.84 billion bid for Ironshore

technological capabilities without sacrificing size and efficiency.

“The challenge with the bigger, conglomerate brokers is that they haven’t taken time to become efficient organizations,” he says.

“Many of their clients feel lost within the labyrinth of a mega broker, and that affords a great opportunity for smaller agencies to take their business by being nimble and providing the kind of service clients want, with the access and influence of a larger organization.”

Growth, of course, cannot continue indefinitely, and analysts say that the recent ‘feeding frenzy’ in the P&C space has its limits.

Most of the major acquirers, Binner noted, “have their deals now, so the pool of buyers is dwindling.”

www.ibamag.com

10-11_News Analysis-SUBBED.indd 11

11

19/08/2015 2:42:50 AM

PRODUCTS

UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

AJ Gallagher

Guianza SA Corredores de Seguros

Gallagher continues its Latin American expansion by acquiring a controlling stake in the Colombian retail insurance broker

All Risks Ltd.

Tower Program Insurance Services

Tower Program is a national program administrator specializing in construction

Hub International

BW Insurance Agency

The wholly owned subsidiary of Bank of the West will expand Hub’s presence in eight Western states

National Financial Partners

BWD Group

The deal allows National Financial Partners to significantly expand its national P&C capabilities and its Northeast employee benefits resources

Odyssey Investment Partners

Integro Ltd.

Integro reported 2014 brokerage revenue of $212.4 million

Patriot National

CWIBenefits

CWI will become part of Patriot National’s claims administration subsidiary, Patriot Risk Services

Willis

Miller

Willis will pay $392 million for an 85% stake in the London wholesaler

Berkshire Hathaway debuts new professional liability product

Zurich mulls takeover bid for RSA Insurance

As merger and acquisition activity heats up in the property/casualty insurance sector, Zurich Insurance Group is continuing to work on its bid for London-based RSA Insurance Group. If the all-cash deal goes through, analysts say it could be valued at more than $8 billion. The news comes just months after Zurich’s May announcement that it would seek out acquisitions in order to counteract the effects of low interest rates and subpar global economic growth. Kristof Terryn, CEO of Zurich’s Global Life unit, told shareholders Zurich would pursue deals in which the company can “enhance our strategic possibilities.”

RSA CEO Stephen Hester has said he is “not fussed or flustered” by the prospect of a bid, and emphasized that RSA was valuable and only increasing in value. “I believe, on a stand-alone basis we can make this company much more valuable than it is today,” Hester said. He did not, however, entirely dismiss the idea of courting takeover offers. “We can perform very well on our own, but obviously that’s not the only model that can perform well,” he added.

“There are others.”

12

Berkshire Hathaway has launched Professional First Bankers Professional Liability, a new errors and omissions product for the banking community.

The product is available to banks of all sizes, their executives and employees, and covers all alleged errors or omissions in the professional services they render to customers. The policy also expands the definitions of ‘professional services’ and ‘claim,’ and can be enhanced to include lender’s liability. Bankers Professional Liability is the third offering in BHSI’s Professional First suite of products.

ACE expands small business insurance offerings

ACE Commercial Risk Services will now offer ACE Commercial Umbrella, a policy designed to address the risk needs of small-business owners for all standard classes, including hotels/motels, professional offices, retail institutions and restaurants.

The product boasts policy limits of up to $5 million and a $500 minimum premium per layer. The insurer stressed the importance of an umbrella product to small businesses, saying smaller commercial entities are often unaware of risks and, due to their size, are especially vulnerable to liability or business errors.

www.ibamag.com

12-13_Intelligence-SUBBED.indd 12

19/08/2015 2:11:46 AM

PEOPLE

PEOPLE Ironshore launches umbrella coverage for high-value homeowners

Ironshore Personal Lines is expanding its umbrella offerings with a new insurance program for homeowners with properties in excess of $1 million.

Meant as complementary liability coverage for losses due to legal action, the umbrella program provides limits of up to $5 million and addresses specific risks connected to highnet-worth families that have been on the rise in recent years, such as automobile accidents, dog bites, libel, slander and bullying.

Nautilus expands contractor’s program with lower rates

Specialty lines provider Nautilus Insurance has announced it will enhance certain product offerings under its contractor’s program. Coverage options are available for commercial contractors, new residential construction and residential remodelers, and product availability has expanded to all states except Colorado and New York. The Scottsdale-based insurer’s enhanced contractor’s program also includes rate reductions for more than 20 contracting classes and offers consistency across primary and excess coverage options.

AmWINS announces new cyber liability product

Specialty insurance brokerage AmWINS Group has launched a new excess facility with higher limits for cyber liability insurance. The new product, targeted at the North American market, will provide up to $100 million of excess cyber liability on a follow form basis, backed 100% by Lloyd’s of London paper. AmWINS president James Drinkwater said the product will help address the need in the market for higher cyber liability limits – something many organizations have had difficulty attaining.

NAME

LEAVING

JOINING

NEW POSITION

Don Bailey

N/A

Marsh

Head of global sales

Patrick Brice

RSA Insurance Group

CFC Underwriting

Business development director

Ray Celedinas

Celedinas Insurance Group

Assurex Global

Board member

Grace M. Crickette

San Francisco University

Hanover Stone Partners

Senior risk advisor

Mary Cummins

N/A

IICF

Director, Midwest division

Suzanne Flynn

N/A

Beecher Carlson Insurance Services

Managing director and leader of national casualty claims

Mark Griffin

Phoenix Life Insurance

Towers Watson

Director, Americas Life Practice

Paddy Jago

N/A

Willis Group Holdings PLC

Chairman, global executive committee

Jessica Johnston

McClelland and Hine

MarketScout

Commercial underwriter for restaurants, bars and taverns

James Kent

N/A

Willis Group Holdings

Co-president, global executive committee

Patrick McIntyre

Wells Fargo Insurance Services

Alliant Insurance Services

First vice president, Alliant Americas

Philip Moskie

NAPCO Insurance

Burns & Wilcox

Vice president of property brokerage

Andrew Newman

N/A

Willis Group Holdings

Co-president, global executive committee

Louis Robertson

Watkins

Tokio Marine Kiln Group

Fine art and specie underwriter

Joan Talent

AmTrust North America

MarketScout

Senior underwriting assistant for restaurants, bars and taverns

ACE announces leadership changes

ACE Group has announced official changes to its executive lineup ahead of its acquisition of Chubb, which is expected to be complete in the first quarter of 2016. John Lupica (left) will serve as vice chairman of the parent company and co-president of the North America Insurance division, along with Dino Robusto, who will also serve as executive vice president of the parent company. Harold Morrison, Jr. will serve as senior vice president of the parent company and executive vice president and chief field officer for the North America Insurance division. Paul Krump, currently president of personal lines and claims for Chubb, will serve as executive vice president for global underwriting and claims for the parent company.

Arch expands multinationals insurance program

Arch Insurance Group has expanded the team working with its insurance program for US-based multinationals.

Shane McCaffrey will lead Arch’s Defense Base Act and foreign casualty insurance services as senior vice president.

McCaffrey brings nearly 30 years of experience in foreign casualty underwriting, and has focused on Defense Base Act [DBA] coverages for the past 10 years. He will work to provide firms with a solution that ties the DBA product to other related products, claims and medical evacuation coverage capabilities, Arch said.

www.ibamag.com

12-13_Intelligence-SUBBED.indd 13

13

19/08/2015 2:11:56 AM

UPFRONT

WORKERS’ COMP UPDATE

Addressing the issue of medical marijuana As medical use of the drug increases, workers’ comp professionals have no choice but to respond

failed to address the issue altogether, which could be a problem if agents don’t discuss the issues with employers – especially given the dissonance between state and federal law.

“Brokers may need to proactively bring up medical marijuana – whether the employer will accept it as a treatment option, how it will be controlled and how the PBM will enforce formularies,” Pew says. “At the moment, it’s not a strategic discussion, but it needs to be.”

If producers don’t take this first step of establishing consistent standards, the employer could be left open to both federal lawsuits and workplace liabilities in which an employee

“At the moment, it’s not a strategic discussion, but it needs to be”

The issue of medical marijuana in the workers’ comp arena is approaching a crucial tipping point, and producers who haven’t taken action on behalf of their clients could be in for some nasty surprises. That’s the message from Prium senior vice president Mark Pew, a 30-year workers’ comp vet and opinion leader on the medical marijuana front.

“It’s definitely a concern – especially given

NEWS BRIEFS

these stories that tug at the heartstrings about seizures that can only be controlled by marijuana,” Pew says. “The question is, should there be constraints around it, or should it just be locally legalized?”

Pew says that, in general, payers have not committed to providing coverage for medical marijuana treatment, and many payers may be at odds on how to proceed. Some have even

Lawsuits could ignite workers’ comp troubles

An increase in legal action forcing employers to reclassify contract workers as full-time employees could drive up labor costs significantly and heighten scrutiny on applications for workers’ compensation insurance. Lawsuits and expenses related to reclassification could increase the cost of labor by 20% to 40%, a Wall Street Journal report estimated. The misclassification of workers is particularly common in businesses such as dentist’s offices and nail salons, and for those who work in sales.

14

using marijuana paid for by the employer injures themselves or another worker.

Pew believes society as a whole is changing its attitude toward medical marijuana, and that a slender majority is perhaps in favor of allowing it as a treatment option. As such, employers and their insurance agents need to make strategic decisions ahead of time to protect both their workers and themselves.

“Medical marijuana is a societal inevitability, and workers’ comp professionals need to figure out how they’ll deal with it,” he says.

“In many cases, the train has left the station, and you’ll either be riding the train or driving the train, or you’re going to get run over by the train.”

Insurers hit record income levels in first quarter

Despite a severe winter, slackening economic growth and low interest rates, P&C insurers managed to bring in $18.2 billion in net income during the first part of the year. That exceeds the previous high for a first calendar quarter by $3.8 billion and represents the highest firstquarter net income since ISO began tracking performance in the mid-80s. Given the increase in jobs, the Insurance Information Institute anticipates that workers’ comp will “remain the fastest growing major P&C line of insurance in 2015.”

www.ibamag.com

14-15_Workers Comp-SUBBED.indd 14

19/08/2015 2:12:35 AM

Q&A

Jack Hannan Communications director THE WORKERS’ COMPENSATION INSURANCE RATING BUREAU OF CALIFORNIA

Workers’ compensation in California Can you provide any insight as to the key factors that have caused California to have the highest workers’ comp premium rates in the US? Generally speaking, the factors contributing to California’s rate level include high frequency of permanent disability claims and high medical costs per claim, which are driven by claims that remain open for longer periods of time.

In addition, the costs of administering claims – loss adjustment expenses – are much higher than average.

California’s increases in indemnity claim frequency seem to be counter to trends in other states. What are the key drivers here?

In terms of claim frequency, the Los Angeles area of Southern California is driving California’s higher claim frequency. Outside of the Los Angeles nine-county area, claim frequency in California is comparable to other states.

Some of the Los Angeles difference is explained by industrial mix and wage level, but some of the increased frequency is due to the high frequency of permanent partial disability – particularly cumulative trauma – claims in the Los Angeles area.

It is an issue that we are actively studying.

The high cost of medical benefits in California is not driven by treatment costs early in the life of a claim, but rather by the length of time a claim remains open. What are the key factors causing that greater length of time?

Generally speaking, the prevalence of cumulative trauma claims, which are filed well after the date of injury, may be a factor. Also, once a claim remains open for longer periods of time, the primary diagnosis of the claim begins to shift from the acute injury toward age-related, more chronic conditions such as cardiovascular, respiratory, circulatory and digestive problems.

ABOUT THE WCIRB REPORT The WCIRB recently released its Report on the State of the California Workers’ Compensation Insurance System, outlining the state of the system as of mid-2015. The report summarizes the cost of workers’ compensation insurance based on premiums paid by California insured

Hub acquires brokerage with WC specialty

Hub International has acquired BW Insurance Agency, a subsidiary of Bank of the West. BW Insurance Agency specializes in the workers’ compensation sector, as well as real estate, executive and professional liability, and personal insurance policies.

The transaction will affect Colorado, Iowa, Minnesota, Nebraska, North and South Dakota, Oregon, and Wyoming. Hub hopes the deal will allow it to expand its footprint in employee benefits, as well as commercial and personal product lines.

employers, demonstrates how premium dollars are distributed and details the key cost drivers in the system. The report revealed that California has the highest workers’ comp premium rates in the country. The average medical benefit cost per claim is also 90% higher in California compared to the US median.

Florida investigator uses drones to capture fraud

Florida investigator Paul Colbert made headlines when he revealed he uses drones outfitted with hidden cameras to catch perpetrators of workers’ compensation fraud. Colbert doesn’t feel this is a breach of privacy because he relegates the drones to public areas unrestricted by walls or fences. He claims the cameras work with 92% efficiency in gathering evidence, and he plans to continue searching for fraudsters with the unmanned aerial vehicles, as well as any other technological developments made available to the market.

California premiums rising by doubledigit rates

California’s workers’ compensation policies are on track to sustain doubledigit growth rates, according to the Workers’ Compensation Insurance Rating Bureau.

In a new report, the organization described the state’s progress as a “mixed bag,” given that the setbacks are somewhat offset by reforms put into motion by Senate Bill 863.

The report attributes the premium increases to California having the most permanent disability claims nationwide, the highest claims in relation to medical costs and high expenses in distributing benefits.

www.ibamag.com

14-15_Workers Comp-SUBBED.indd 15

15

19/08/2015 2:12:43 AM

UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS Hackers can seize control of cars Manchester-based security company NCC Group found a way to carry out cyber attacks on automobiles by sending data through digital audio broadcasting radio signals commonly received through car information and entertainment systems. Such a broadcast has the power to affect multiple cars at once and create a widespread disaster, pointing to the need for cyber liability products.

“Owners of these cars may sign waivers with manufacturers, claiming responsibility for technology, in which case they may need to buy a cyber policy in case someone hacks their car,” said John Tiene, CEO of Agency Network Exchange.

Potentially fatal auto risk traced to UBI devices Researchers at the University of California at San Diego have discovered a way to hack into a car’s telematics device and control the vehicle. Computer science experts managed to engage the internal network of a Chevrolet Corvette by sending SMS messages to the car’s Metromile telematics dongle.

Attacks on UBI devices have the potential to be much more devastating than those carried out on an automobile’s dashboard entertainment system, as they allow the perpetrator to gain “direct access to the vehicle’s electronic brain.”

The “tremendous hacking target” clients should know about

The increase in technological convenience is at an all-time high, and allowing consumers to conduct transactions on the go using mobile payment platforms is increasingly attractive. However, the risks attendant

16

with mobile payment systems are sky-high, and the cost of a data breach is significant. To combat this, small businesses can obtain an annual cyber or privacy liability policy for as little as $500 annually. A quality policy will cover all reimbursements paid by the merchant in the event of a data breach and provide both post-breach response services and public relations consulting.

Luxury feature set to drive up insurance premiums

Luxury car consumers are beginning to clamor for the hottest new auto feature: touch-screen-enabled dashboard displays that function like a smartphone. Common dashboard elements include the ability to view or hear tweets, maps and incoming text messages. While appealing to consumers, many agents question whether this technology could lead to distracted-driver collisions and thereby generate a spike in premiums.

In addition, the Insurance Information Institute has raised concerns that dashboard touch screens could make automobiles more susceptible to theft.

Tech start-up aims to shake up auto insurance data

So far, the prohibitive costs of providing telematics devices for vehicles has meant that only larger insurers have entered the arena, but tech firm Driveway allows drivers to connect to their vehicle’s on-board computer using their smartphones. Forbes.com reports that the app monitors and analyzes the user’s driver style and transmits the data to the insurer. Driveway says that 89% of the 250,000 drivers it has monitored thus far have seen their premiums fall.

Mid-sized insurers have begun to use the software, and Driveway has plans to expand to larger firms.

Shying away from drones In light of new privacy laws, insurance companies consider how to deal with potential coverage concerns Independent insurance agents are finding it difficult to adequately source the risk of privacy-related litigation against drone users.

According to Jason Riley, vice president of aviation wholesale broker Halton Hall, many insurers are willing to offer aircraft liability policies or aviation CGLs for drones.

Component coverage, though expensive, is also available for cameras, gimbles and other accessories.

What’s harder to find is coverage for potential privacy violations.

Most companies currently offering insurance policies for commercial drone use exclude privacy claims due to lack of data, uncertainty over how drones work and how legislation protecting privacy from drone surveillance will behave toward violators.

That’s a problem, given that many such laws are beginning to take effect.

In Florida, the newly minted Freedom from Unwarranted Surveillance Act [FUSA] went into effect July 1. The law prohibits a person, state agency or political subdivision from using a drone to capture the image of a privately owned property or anyone on the property with the intent to conduct surveillance. Those who wish to use drone technology in this manner must have written consent from people on the property.

And while FUSA allows exceptions for drone use by a business licensed by the state, it does not apply to professions that regularly obtain information about a person’s identity,

www.ibamag.com

16-17_Tech Update-SUBBED.indd 16

19/08/2015 2:13:29 AM

whereabouts, habits or associations. Those who feel their privacy has been violated under these terms may sue for civil damages and injunctive relief.

Many of those lawsuits may turn out to be frivolous, but the money expended to defend a company against such claims will be very real.

“Certainly, commercial operators in particular need to be aware of potential exposures past the obvious bodily injury, advertising/personal injury liability and contractual liability,” Riley says.

“Until the laws ... stabilize, many standard insurance companies will stay out of the market” With the Federal Aviation Administration issuing an average of 250 permits a month for commercial drone experiments, these are questions that need to be answered quickly.

Those monitoring insurer appetites, however, suggest that carriers will not begin to embrace privacy concerns as part of drone liability policies until state and federal legislation becomes clearer on expectations and legality surrounding drones.

“I’m constantly following up with my standard carriers to see if their appetite for drones has changed,” says Evan Garmon, a commercial insurance specialist with Harpenau Insurance in Louisville, Ky. “Until the regulation and laws in the United States surrounding the small unmanned aircraft systems industry stabilize, many standard insurance companies will stay out of the market.”

Q&A

Jorge Jeffrey Director of research VELOCIFY

Fast fact: More than 1,000 insurance agencies took part in Velocify’s State of Techsurance 2015 survey, designed to help brokers understand what technologies topperforming agencies are investing in

Embracing new technologies The Velocify State of Techsurance survey revealed that larger, more successful agencies tend to be more frequent users of sales and marketing technology. Can we assume agencies that regularly update their technology can better satisfy customer needs?

I think that’s definitely a conclusion that can be made. I think one of the things we saw in the research, though, is that there’s never an absolute. Just because somebody’s using technology, it doesn’t necessarily mean they’re going to more effectively satisfy the customer’s needs – but there’s definitely that increased likelihood.

It’s important to note that it’s not enough to just get the technology, but to make sure that it’s fully implemented, that the entire agency and everybody who will be using it is fully bought in and is maximizing the potential of that technology so that they do become the best at satisfying their customers’ needs.

What advice would you offer to agencies unsure as to where to start upgrading their technology?

I think the fact that some of the smaller or independent agencies are a little behind on implementing and using technology doesn’t mean that they can’t catch up, because even the directs or the larger agencies aren’t fully utilizing all of these technologies. So if any company is able to come up with a strategy for choosing the best technology to implement and to fully implement it, they can gain ground very quickly, and they also have other advantages that their competition doesn’t have.

With independent agencies, for example, they have that personal touch that a direct agency may not be able to provide. So if they even the playing field with the technology … they can benefit greatly from the technology, possibly even more than the larger agencies.

But there is no one technology that everybody should have. It is dependent on where they already have strengths and weaknesses and … there are different factors that influence whether you might benefit more from [a particular] type of technology, [such as] where you’re getting your leads, what your lead sources are, what type of insurance products you sell, etc.

How can smaller agencies afford or justify the cost of integrating technology into their businesses?

I would say, how can they not afford to do it? Technology is not something you can continue to ignore. As technology, businesses and insurance agencies evolve, I think fewer and fewer of them can get away with the mom-and-pop approach to selling insurance. I think how you really justify the cost is by looking at the benefits of it and saying, “If I get even a 5% increase in my conversion rate, or if my revenue increases by this small percentage, it already pays for whatever investment I’m making into these technologies.” And it becomes pretty clear right away that the benefits far outweigh the cost.

www.ibamag.com

16-17_Tech Update-SUBBED.indd 17

17

19/08/2015 2:13:36 AM

UPFRONT

OPINION

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

A win-win for the industry The Supreme Court’s June ruling on marriage equality is great for agents, clients and the industry as a whole, writes David Kosar IS OUR industry ready, now that the Supreme Court of the United States ruled on June 26 that same-sex marriage is legal across the entirety of our country? What does it mean to us as insurance professionals and to the insurance industry as a whole?

How will things change, and how will they remain the same?

The court’s decision helps to solve the disparity that many employers have been forced to face in regard to their employee benefits programs and taxation methods.

It seems clear that, in some states and with some employers, the structure and administration of employee benefits plans likely will be impacted, and employers may need to modify their benefits enrollment processes to allow all married couples equal access and equal benefits coverage.

Keep in mind that, in some states, there is still no law that prevents an employer from discriminating against an employee who is gay. We are already seeing some people being fired after entering into a same-sex marriage and then trying to return to work. This could cause a rise in employee practices liability claims or other claims of discrimination.

More broadly, though, is the ruling’s impact on domestic partnerships, for both opposite- and same-sex couples, and the availability of employee benefits to them.

It is likely, and maybe even appropriate, that it should affect coverage for domestic partners, as we now can have one single standard for who can qualify for spousal benefits. With the expansion of employee

18

benefits plans to include same-sex married couples, it logically follows that all non-married couples could be considered single, and thus only the employee might qualify for work benefits, not the domestic partner.

Decades ago, we saw many employers

married or single?” when working with a couple who is in a domestic partnership living arrangement? As agents, we strive to do what is right for the client and for the carrier. I, for one, have walked across the ethical tightrope when making this decision.

The Supreme Court ruling should allow us to no longer face the dilemma of how we rate both opposite- and same-sex couples who live together. This ruling can provide clarity, and we can rate married couples as married and non-married couples (or domestic partnerships) as single. It may take some time to shake out, but one can likely conclude that there will be less ambiguity for insurance companies and their underwriting as we move to a purer use of the married rate class. Insurance companies would be well-advised to review their underwriting standards and definitions for rate classes, as this also can help us ensure that we are

“When we open ourselves up to change, we also open ourselves up to new customer possibilities and growth potential” expanding their benefits to include domestic partners as a way to help close the gap for same-sex couples who could not legally be married. Out of that followed the need to then allow benefits for all domestic partnerships, both same- and opposite-sex.

Once this decision is fully vetted, it will expand coverage for some couples, but it may also contract the eligibility for others, as the one common term of ‘marriage’ is now available to all who want to enter in this legal arrangement.

For the insurance industry, this ruling should also help us as we work with customers on their personal insurance and as we set underwriting guidelines, eligibility, definitions and rate classes. Often, we have young drivers who are living together; we list these couples as married to qualify them for the married rate class. This seems to have become standard practice in some areas. Who among us has not grappled with the question of, “Do I rate you as

getting the right rate for risk.

Change is always difficult, and some agents may be uneasy about this change in particular. Our industry is not one that has been known for quickly adapting to change. However, when we open ourselves up to change, we also open ourselves up to new customer possibilities and growth potential. How we react to this as agents – to our customers and potential clients – can either help ignite new markets and growth, or weigh us down and hold us back.

I believe that our industry is ready to embrace this change. Understanding the impact will only help to solidify our role as risk managers and advisors for our clients.

David Kosar has more than 30 years of insurance experience at both the corporate and agency levels and has owned David Kosar Insurance Agency in Everett, Wash., since 2011.

Insura to poli (a Mis liabilit or pro

www.ibamag.com

18-19_Opinion-SUBBED.indd 18

19/08/2015 2:14:01 AM

ARC-14

OVER ARCHING

SOLUTIONS

SUPPORT

STA BILITY

KNOW LEDGE

AGILITY

RESPONSIV ENESS

PR OTE CTION

ACCIDENT & HEALTH ALTERNATIVE MARKETS E&S CASUALTY CONSTRUCTION CONTRACT BINDING OPERATIONS DESIGN & ENVIRONMENTAL

HEALTHCARE LENDER PRODUCTS NATIONAL ACCOUNTS CASUALTY

NESS FIV USI ES EB C

ARRIERS 2 RC 01 TA

EXCESS WORKERS’ COMPENSATION

INSUR AN

EXECUTIVE ASSURANCE

PROFESSIONAL LIABILITY PROGRAMS

5

PROPERTY SURETY TRAVEL

THE STRENGTH OF ARCH www.archinsurance.com

®

A.M. Best: “A+” Standard & Poor’s: “A+”

Insurance coverage is underwritten by one or more member companies of Arch Insurance Group in North America, which consists of (1) Arch Insurance Company (a Missouri corporation, NAIC # 11150) with admitted assets of $3.32 billion, total liabilities of $2.53 billion and surplus to policyholders of $782.8 million, (2) Arch Specialty Insurance Company (a Missouri corporation, NAIC #21199) with admitted assets of $468.8 million, total liabilities of $174.1 million and surplus to policyholders of $294.7 million, (3) Arch Excess & Surplus Insurance Company (a Missouri corporation, NAIC # 10946) with admitted assets of $63.5 million, total liabilities of $2.4 million and surplus to policyholders of $61.1 million and (4) Arch Indemnity Insurance Company (a Missouri corporation, NAIC# 30830) with admitted assets of $36.2 million, total liabilities of $12.3 million and surplus to policyholders of $23.9 million. All figures are as shown in each entity’s respective Quarterly Statement for the quarter ended March 31, 2015. Executive offices are located at One Liberty Plaza, New York, NY 10006. Not all insurance coverages or products are available in all jurisdictions. Coverage is subject to actual policy language. This information is intended for use by licensed insurance producers. © Arch Insurance Group 2015

18-19_Opinion-SUBBED.indd 19 ARC-1402 Five Star Rating Corporate Ad-IBA 1

19/08/2015 2:14:09 AM 7/16/15 3:33 PM

PEOPLE

INDUSTRY ICON

ENTERING A BOLD NEW WORLD XL Group’s executive deputy chairman, Stephen Catlin, talks about building a global business and preparing for change in the industry

STEPHEN CATLIN’S status as an icon of the insurance industry is widely recognized – so much so that, in 2015, the prestigious International Insurance Society inducted Catlin into its own Insurance Hall of Fame, in recognition of his long-standing leadership in the global property/casualty insurance industry.

Catlin’s career in the industry began in London in 1973. His initial foray into insurance involved no pre-planning. “My father was a doctor, and he wanted me to go into medicine,” Catlin says. “It’s a complete joke now, but I thought he worked too hard, so I didn’t want to do that.”

As a compromise, Catlin agreed to pursue studies in dentistry, but his heart wasn’t in it.

“I wasn’t particularly fond of academia at the time, and I didn’t get the required grades to get into dental school,” he says. “I decided I didn’t want to do a degree just for the hell of it. I’d rather get going.”

Soon after, Catlin began a role with BL Evens & Others at Lloyd’s of London. In his early days, he received advice from a mentor that continues to serve him well. “He used to say to me, ‘Keep your eyes and your ears open and your mouth shut.’ In other words, listen and be aware of what’s going on around you.

“I think a lot of people miss out in life

20

because they don’t keep their eyes and ears open. You’ve got two eyes, two ears and one mouth. Use them proportionately.”

Branching out In 1984, Catlin founded Catlin Underwriting Agencies. “I’d been approached a couple of times to do a start-up,” he says. “The more I looked at it, the more I thought, ‘You

tional insurance holding company that has a presence in more than 50 cities and 2,300 employees working in 25 countries.

Catlin’s global expansion plans constituted somewhat of a pioneering endeavor.

So why did he see international expansion as an important strategic move before it became popular among his contemporaries?

“My view was that … if you wanted to have

“We’ve got to start thinking very much on the front foot about what life is going to be like in the next 10 to 20 years – where the risks are going to be, and how we can help our clients manage those risks” know what? Maybe I should give this a go.’

I took that decision at the ripe old age of 29. I was just 30 when we set the company up. Looking back on it, I must’ve been completely barking mad!”

But Catlin’s decision to establish his own underwriting agency marked the beginning of a decades-long success story.

Over 30 years, The Catlin Group grew from a small managing agency into a multina-

a global book of business, sitting in London waiting for people to come in to see you wasn’t going to happen over time. More and more business would be placed locally in the local markets, and therefore if you wanted to write that business and not just see the big-ticket business, you’d have to have a presence in the local markets.”

Early on in executing the strategy, there were some challenging times. “We started

www.ibamag.com

20-23_Industry Icon-SUBBED.indd 20

19/08/2015 2:14:28 AM

PROFILE Name: Stephen Catlin Company: XL Group Title: Executive deputy chairman Age: 61 Years in the industry: 42 Fast fact: Catlin was awarded Ernst & Young UK’s Entrepreneur of the Year award in 2011

www.ibamag.com

20-23_Industry Icon-SUBBED.indd 21

21

19/08/2015 2:14:37 AM

PEOPLE

INDUSTRY ICON

an office in Houston and one in Singapore.

Frankly, we got them both wrong … and had to start again two years later,” Catlin says.

He and Paul Brand (now chief underwriting officer at XL Catlin) took the lessons they learned from that experience and decided to leverage them. “We then spent 15 years building a global business, which wasn’t easy, and we had a fair amount of criticism from most people in the marketplace for doing it. It was quite difficult, as a public company, to be spending quite a lot of our earnings on organic growth. It doesn’t

within 30 seconds. The way we transact at business level, but also at a personal level … is very different to what it was, and people who don’t adapt to that change get left behind, whether you’re in commerce or in industry.”

Catlin mentions one of the greatest emerging risks: cyber. “Cyber brings with it challenges,” he says. “I’ve been misquoted a couple of times as saying I don’t think we should do it. I haven’t said that at all. I’ve said I think we should, as an industry, be writing cyber risk, but that we have to recognize what we can and cannot do, and if you have

“I think a lot of people miss out in life because they don’t keep their eyes and ears open. You’ve got two eyes, two ears and one mouth. Use them proportionately” always please shareholders. They want to see the money today, not tomorrow.”

But Catlin and Brand were committed to the concept. “We thought it was the way the market was going and how the markets were going to behave in the future. I think it’s interesting the amount of people who say, ‘Well, I wish I’d done that,’ ‘I wish I’d done what Catlin had done’ or ‘I wish I’d seen what he’d seen.’”

The next chapter On January 9 of this year, The Catlin Group was acquired by XL Group, an Ireland-based global insurance company. That transaction was completed on May 1, making Stephen Catlin the executive deputy chairman of XL Group.

Turning his attention to times ahead, Catlin stresses the importance of adapting to rapid change. “Think about the change that [iPads and tablets have] brought about in our lives. You no longer spend two and a half hours arguing pointless facts at a dinner party because somebody will get the fact

22

a total global systemic failure caused by the Internet going down worldwide, that type of loss is beyond the capability of the insurance industry to pay because it’s too big.

“We need to work with government to make certain that the government understands what we can do and what we can’t do for them,” he continues. “I think we’ve got to start thinking very much on the front foot about what life is going to be like in the next 10 to 20 years – where the risks are going to be, and how we can help our clients manage those risks.”

Catlin expects the concept of ‘Uber-ization’ to become widespread within the service industries, and he thinks it’s important for the insurance industry to be ready to address the threat posed. “In other words, you’ll get an outside player coming in who has nothing to do with insurance whatsoever at the moment, who will say, ‘I can do this more efficiently, and I’m going to join the party on a more efficient basis.’ I think the next 10 years will show fundamental change on that front.”

XL GROUP AT A GLANCE

FOUNDATION In 1986, 68 of the world’s largest companies joined together to found XL Group to solve complex risks

GLOBAL PRESENCE XL Group serves clients in more than 160 countries

F

HIGHLY RATED XL Group’s core operating subsidiaries hold a financial strength rating of A from AM Best, A from Fitch, A2 from Moody’s and A+ from S&P

LEADERSHIP Mike McGavick is the CEO of XL Group

www.ibamag.com

20-23_Industry Icon-SUBBED.indd 22

19/08/2015 2:14:44 AM

IBA_Up

www.ibamag.com

Insurance Business America is the independent voice for the insurance industry, encompassing news analysis, expert opinion, exclusive interviews and business strategy advice for today’s sophisticated insurance brokers, agents and advice professionals.

KNOW ANYONE WHO SHOULD BE READING INSURANCE BUSINESS AMERICA? IBAMA G.COM

FEATUR E / THE

PE THE SHA N OF AGE ETS TO COM

CHANG ING WORLD

about to and brokers is ates rance agents stig The world of insurm. Insurance Business inve ld g wor radically transfoto do to thrive in a changin d Casualty Property and what you nee

ion of Future: The Evolut saying of the ution. the Agency are g today is not Insurance Distrib WHA Insurance agents are playin Producers at ago, specifically “The role that comfort zones. ding 20 to 30 years goodbye to their e, Ore., is expan Rob Hartman, they played based in Eugen ping role pricing,” says The agency, selection and lines and develo risk in ercial comm . lines: its focus on hor of the report be on the front line of n within those for co-aut specializatio to of buses, used areas and undernew for taxis “The agent of a policy, had n insurance transportatio riting and pricing tions of homes, knew very underw inspec example. agents who were g authority, did says Hartman. , we have had stayed writin the business,” “Historically given that lization and they logy the customer, knew for that today, areas of specia techno in small used to their ’s a lot less need information increasingly y 50 “There Vince Ada, of a al lines—and there,” says ys approximatel in all person moving to more which emplo carriers are rtably in what task is director at WHA, comfo ercial— sit , where the You comm you can’t just r riting model or eight years. people. “But ation and answe black-box underw the last five applic in an done out fill you have or 10 to 20 ries.” to accurately the business multiple indust nal employees questions about car and how you drive have to learn additio 60 to eight 50 the ly hired you and the WHA recent that will help questions about technologies ers. enting custom implem s are it.” and is vely with it—and that’s sales by carrier t more effecti which marketing efforts hannel or direct company interac its nce, up Multic ng insura also steppi ercial y, and auto ing al and comm The agency is increasing steadil of premiums, is becom sales in person are also for 70% in order to grow measures to boost efficiency. says. Carriers is accounts ry d, Hartman matic of what lines, and is taking with the indust commoditize ence is emble insurance aggressively, WHA’s experi on advertising. and mid-size marketing more many small $6bn a year US. Many happening at carriers are ng more than across the ms were brokerages riven, spendi y personal auto, of all P&C premiu ndent agencies and nt, technology-d some lines, notabl and brokers.

In efficie more They agents written by indepe specialized. are becoming competing with ercial lines and ting. agents 2013 2013, focused on comm new approaches to marke Share Report Source: Market ping pendent Insurance T CHANNEL are also develo able hole in A.M. Best/Inde little choice.

Brokers of America the THE DIREC have punched a notice larger Agents & They may have economics of sales is growing l,” Direct signs that the and the hole ing to unrave “There are auto, al beginn are model 11 , Agents person MBER 2013 | traditional agent sey & Co. report NOVEMBER/DECE a recent McKin to ing accord

57%

IBAMAG.COM ISSUE 3.04

ER/DECE 10 | NOVEMB

MBER 2013

TOP

10

PRODUCERS Find out who made the inaugural list of the industry's best producers GLOBAL REACH LLOYD'S CHAIRMAN ON THE INSURANCE GIANT'S AMBITIOUS GROWTH PLAN

OFC & Spine-SUBBED.indd 2

NEGOTIATE BETTER PROFESSIONAL LIABILITY LEARN THE SECRETS THE NEW RISKS THAT TO WINNING THE DEALS ARE LEAVING YOUR YOU WANT CLIENTS EXPOSED

• In-depth analysis of the latest issues affecting insurance brokers and agents • Expert columnists addressing aspects that impact your business • Exclusive interviews with the industry’s most important players • Our own rundowns of America’s best brokerages and insurers • Analysis of insurance industry reports and research findings • The latest changes in insurance legislation and what you need to do next • Industry photography of the key figureheads and insurance events

To subscribe to Insurance Business America, email subscriptions@keymedia.com. or call 720-316-7373 www.ibamag.com Insurance Business America is proudly brought to you by Key Media

1/05/2015 2:38:09 AM

www.ibamag.com

IBA_UpcomingIssues_FP_ad.indd 20-23_Industry Icon-SUBBED.indd 234

23

21/07/2015 2:14:51 4:13:08 19/08/2015 AMAM

FEATURES

COVER STORY: YOUNG GUNS

YOUNG GUNS 24

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 24

19/08/2015 2:15:42 AM

YOUNG GUNS 2015

Meet the young stars who are making waves in the insurance industry WELCOME TO IBA’s annual Young Guns report. We asked you to nominate insurance professionals aged 35 and younger who have already made a splash in the industry, and your suggestions came flooding in. We also reached out to brokerages, agencies, insurers and others to come up with this list of 42 talented young professionals.

Each is set to lead the industry for decades to come. From an already seasoned pro who started his agency when he was just 18 years old to a woman who spotted a problem in her industry and created the software to solve it, all of the people on this list have proven themselves to be exceptional.

Be they brokers or underwriters, CEOs or promising young producers, this year’s crop of Young Guns represents the new face of insurance – a combination of the traditional work ethic that has been the industry’s backbone for years and the technological know-how that it needs to move into the future.

INDEX BY NAME NAME

PAGE COMPANY

NAME

PAGE COMPANY

Banaszynski, Matt

34

Independent Insurance Agents of Wisconsin

Korkis, Baskal

38

Allstate Insurance

Baumstein, Jennifer

38

Liberty International Underwriters

Kroeger, Jeff

41

World Insurance Associates

Beauchamp, Parker

41

INGUARD

Lamb, Dave

34

Powers Insurance and Benefits

Beggs, Kyle R.

32

RCI Insurance Group

Levi, Doug

29

Strategic Insurance Services

Boulus, John P.

28

Captive Resources

Mattioda, Geno

33

Wolf Point Advisors

Bruno, Craig

39

InsuranceTrak Services

Mission, Tammy

26

Edgewood Partners Insurance Center [EPIC]

Bryan, Jordan H.

36

Ross & Yerger Insurance

Moffatt, Ashley

40

General American Specialty E&S

Chalmers-Cutter, Dottie

32

Chalmers Insurance Group

Morrison, Kelly

40

Cal-Valley Insurance

DeMott, David

39

Gridiron Insurance Underwriters

Nunery, Kristen

40

myCOI

Droege, Garrett

26

TechAssure Association

Plumer, Landon

38

IMA

Dybdahl, Kari

31

American Risk Management Resources

Potthast, Joe

40

Foundation Insurance Group

Ehrlich, Mike D.

26

Crawford-Butz & Associates

Reed, Austin

34

Ventura Pacific Insurance Services

Fuqua, Matt

30

Assured Neace Lukens

Sammons, Adam

27

MHBT

Galloway, Michael

28

DFB Insurance Group

Scheider, Harrison

32

American Risk Management Resources

Gaspar, Timothy

39

Gaspar Insurance Services

Shaheen, Nick

36

The Right Choice Insurance Agency

Gibson, Chip

36

Deland, Gibson Insurance

Stadler, Matt

37

MHBT

Harris, Michael

28

Exceptional Risk Advisors

Tavella, Peter

30

Aon Risk Services

James, David

36

The Right Choice Insurance Agency

Vaughn, Ryan

26

The Hanover Insurance Group

Kinney, Drew

28

Kinney Insurance Agency

Volini, Dominic

33

Wolf Point Advisors

Knecht, Kaitlin Eileen

30

Harvey Insurance Group

Waldman, Michael

38

Waldman Bros

Konold, Jesse

30

Key Insurance

Walters, David

35

Gibson

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 25

25

19/08/2015 2:15:47 AM

FEATURES

COVER STORY: YOUNG GUNS TAMMY MISSION Age: 27 Assistant vice president EDGEWOOD PARTNERS INSURANCE CENTER [EPIC]

RYAN VAUGHN Age: 35 Regional VP, commercial lines THE HANOVER INSURANCE GROUP Recent business achievements: Leads

The Hanover’s largest field office, where he is responsible for strategic planning, agency relationships and overall underwriting execution for commercial lines; has been instrumental in leading efforts resulting in double-digit growth with The Hanover’s partner agents for target middle-market industries, small commercial and specialty business Projects and initiatives: Developed and continues to drive The Hanover’s new small commercial strategy for Michigan; led efforts to realign the middle-market business model more closely with agents in the state Awards and recognition: William J. O’Brien President’s Service Award, The Hanover’s highest individual award for performance Other professional roles: Member of Gamma Iota Sigma International Risk Management and Insurance Fraternity

“Ryan is an exceptionally talented young insurance professional who has rapidly progressed to an important leadership role,” says Paul Mueller, regional president at The Hanover. “I am impressed with all that Ryan has already achieved. It’s not about how long you’ve been in the job; it’s about performance and making things happen.”

26

Recent business achievements: Recently helped a large nonprofit by placing workers’ compensation at an initial savings of close to $300,000 in premium, preventing the organization from being forced to cut programs Projects and initiatives: Created a nonprofit niche for EPIC; created all marketing materials from scratch and built new carrier relationships Awards and recognition: Risk and Insurance magazine Power Broker (2013 and 2015), Responsibility Leader (2013) and Top Under 40 (2013 and 2015) Other professional roles: Chair of company philanthropy committee, 2014 and 2015; served as a ‘business connector’ for Women’s Initiative, a California nonprofit; served as a Business Insurance 101 coach; frequent speaker on workers’ compensation at human resources associations

“Mission is an overall strong female leader in the insurance industry,” says Amy Heckendorn of R.C. Fischer & Co. “She is extremely innovative and has a positive influence in the office. She is constantly pushing the envelope of the insurance norm to bring efficient and effective resources to clients.”

GARRETT DROEGE

MIKE D. EHRLICH

Age: 35 Executive director TECHASSURE ASSOCIATION

Age: 32 Commercial president CRAWFORD-BUTZ & ASSOCIATES

Recent business achievements: Appointed executive director of TechAssure in 2014; has solidified sponsorship relations and united members across the world; Droege’s updated “Technology E&O Benchmarking Report” has been cited as “the best ever released” Projects and initiatives: Successfully refreshed TechAssure’s brand and helped solidify the association’s position as the leading network of brokers specializing in technology-related risk management; launched a new initiative to help members better manage cyber risk; rebuilt the TechAssure web presence from the ground up Awards and recognition: Named to Charlotte Business Journal’s 40 Under 40

Garrett Droege has managed to successfully transition from a young broker to managing a network of some of the best brokers in the industry, leading and uniting a group of agency owners. As if that weren’t enough, Droege’s job also requires annual negotiations with senior carrier management, affinity partners and other key stakeholders.

Recent business achievements:

Has set company growth records over the last eight years; has grown the commercial department by 400% Projects and initiatives:

Spearheaded marketing campaign to target new business; instrumental in obtaining contract with a niche market Awards and recognition: CrawfordButz & Associates Agent of the Year (2009–present) and Five-Star Professional (2009–present)

“Mike has changed the culture here with his youth, enthusiasm and attitude,” says Steve Butz, president of Crawford-Butz & Associates.

“He’s earned the respect of the older agents and left an impression on the newbies.”

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 26

19/08/2015 2:15:54 AM

YOUNG GUNS 2015

ADAM SAMMONS Age: 29 Producer MHBT Recent business achievements: Played

critical role in writing MHBT’s largest piece of business for 2014 Projects and initiatives: Instrumental in developing MHBT’s nonprofit vertical at the regional level; leader in developing the company’s internal Young Guns program Awards and recognition: Andre P. Juneau Young Agent of the Year (2015), Independent Insurance Agents of Texas; Young Agent of the Year (2015), Independent Insurance Agents of Dallas Other professional roles: Founding member of Young Risk Professionals of Texas; chair, board of directors for Insurance Agents of Dallas’ Young Agents of Dallas; chair of Young Agents Advisory Council for Independent Insurance Agents of Texas; chair of associate board, Insurance Industry Charitable Foundation

“Adam is a leader in our company, industry and community,” says Robbie Smith, MHBT’s COO. “He is constantly devoting time to further developing programs within the company to benefit colleagues and clients.”

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 27

27

19/08/2015 2:16:04 AM

FEATURES

COVER STORY: YOUNG GUNS MICHAEL GALLOWAY

MICHAEL HARRIS

Age: 31 Vice president DFB INSURANCE GROUP Recent business achievements: Became youngest partner in DFB Insurance Group in fall of 2014 Projects and initiatives: Worked hand-in-hand with carrier to develop a millwright program and an auto parts dealer program Awards and recognition: Selected to participate in carrier’s Heavy Hitters program Other professional roles: Sits on Pampa Chamber of Commerce board of directors

Michael Galloway got into the insurance business after spending a little over five years in the equipment rental industry. He quickly established himself as one of DFB Insurance’s lead producers. Galloway also worked closely with carriers to establish new programs, and in the fall of 2014 became DFB’s youngest partner.

JOHN P. BOULUS

DREW KINNEY

Age: 35 Senior vice president CAPTIVE RESOURCES

Age: 30 Vice president KINNEY INSURANCE AGENCY

Recent business achievements:

Recently promoted to senior vice president after serving as lead consultant on three leading captive insurance companies; demonstrated consistent growth on all three, increasing revenue more than 100% over the last five years Projects and initiatives: In 2009, spearheaded the formation of the premier member-owned group captive for the energy sector, leading its growth to 35 members and more than $32 million in annual premium Other professional roles: Active in the National Safety Council and the Truckload Carriers Association

Boulous participates in several charitable organizations, including the Lone Survivor Foundation, the Spirit Golf Association and multiple charities supporting cancer research.

He’s also an avid fan and supporter of his alma mater, Northwestern University.

28

Recent business achievements: Key

player in adding two new locations and launching the company’s first internally developed website, driving a 5% increase in organic growth Projects and initiatives: Integral to transition to cloud-based management system; integrated second office, more than doubling Kinney Insurance’s size; launching third office Awards and recognition: Co-operative Insurance Companies Above and Beyond Award Other professional roles: Incoming secretary of BNI chapter

“Every day, Drew finds creative solutions to meet the needs of our clients,” says Kinney Insurance principal Alan Kinney. “The technology transformation in our agency and the data analysis he provides is critical to our success as we transition from being a single-office agency to a multiple-location agency.”

Age: 34 VP of underwriting EXCEPTIONAL RISK ADVISORS

Recent business achievements:

Named to multiple binding authorities granted

by Lloyd’s of London, which bestows the authority to underwrite and place individual risks; revamped Exceptional Risk Advisors’ processes to make underwriting more efficient, cutting the underwriting timeline from an average of two weeks to two days; played key role in implementing new premium rating guidelines, making the company more competitive in the specialty life and disability marketplaces Projects and initiatives: Conducts annual binding authority renewal presentation in London, and has been praised for his vast knowledge of Lloyd’s products and his innovative spirit; crafted a binding authority that has generated about $500,000 in new premium in less than a year; responsible for creating the company’s catastrophic and presumptive riders, ensuring that its product offerings remain at the cutting edge of the specialized insurance industry Awards and recognition: Participated in InsideOut Coaching Workshop; member of Golden Key International, Beta Gamma Sigma and Phi Eta Sigma honor societies, as well as the National Society of Collegiate Scholars; recipient of Dean’s Award for Excellence at Rutgers University, where he graduated with highest honors Other professional roles: Chairman of Exceptional Risk Advisors’ Underwriting Committee; member of the Metropolitan Underwriting Discussion Group; member of North American Contingency Association

In addition to his professional duties, Harris participates in several charitable efforts in his community, including the Avon Walk to End Breast Cancer, Light the Night and the Tomorrow’s Children’s Fund. He also coaches both Little League and adult softball.

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 28

19/08/2015 2:16:06 AM

YOUNG GUNS 2015

DOUG LEVI Age: 35 Owner and principal agent STRATEGIC INSURANCE SERVICES Recent business achievements: Double-digit revenue and client growth year-over-year for last five years; grew the agency to more than 2,900 clients, 12 team members and $5.7 million in total premium Projects and initiatives: Implemented charity referral program and annual protection reviews for clients, with systems in place to ensure every client receives ongoing education and communication; started internship program in 2009 to bring on new talent Awards and recognition: Safeco Key Agency Award; Big Brothers Big Sisters Award for five years of support; commendation from Suncoast Haven Homeless Shelter for charity food drive Other professional roles: President-elect, Pinellas Association of Insurance Agents; committee member, Agency Round Table Board for Citizen Insurance; membership chair, Commercial Finance Association Board of Tampa

Levi started Strategic Insurance Services nine years ago; today, the company boasts 2,700 clients and more than $5.7 million in total premium. Levi and his company are also heavily involved in charitable work, supporting Big Brothers Big Sisters, the Angel Tree Project and other charities. Levi is also writing a book, Surviving the Insurance Jungle, to educate consumers on how to get the best value for their insurance dollar.

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 29

29

19/08/2015 2:16:16 AM

FEATURES

COVER STORY: YOUNG GUNS JESSE KONOLD Age: 33 Partner/ producer KEY INSURANCE Recent business achievements: A

MATT FUQUA

PETER TAVELLA

Age: 29 Senior vice president ASSURED NEACE LUKENS

Age: 32 Manager, Greater New York Property Brokerage AON RISK SERVICES

Recent business achievements: Brought in more than

top producer at Key Insurance; has increased personal volume by 52% over the last five years; brought in $2.1 million in sales volume in 2014 Projects and initiatives: Rebuilt the Independent Insurance Agents of South Dakota’s Young Agents Council Awards and recognition: IIABA Outstanding Breakthrough Award (2013), IIASD Young Agent of the Year (2012) Other professional roles: Board member, IIASD; past president, Chamber of Commerce

$275,000 in new business and was promoted to senior vice president in the first half of 2015; one of the top performers for both Assured Neace Lukens and parent company AssuredPartners Awards and recognition: Has won Assured Neace Lukens’ internal Top Performer Award five out of the last six years; winner of 2014 AssuredPartners Rising Star Award Other professional roles: Board member for Western Kentucky University Alumni Council; member of 2015 Leadership Bowling Green class; member of the National Association of Health Underwriters

In addition to his work at Key Insurance, Jesse Konold works hard for the Independent Insurance Agents of South Dakota. He also coaches and referees youth basketball, sits on the Rodeo Association Board and chairs the largest ice fishing tournament in the Midwest.

“If there’s a project that Jesse takes on, you can bet it gets done way beyond what was expected,” says IIASD executive vice president Jerry Diamond.

In addition to his professional roles, Matt Fuqua donates his time to numerous charitable organizations. Recently, he spearheaded a golf tournament that raised more than $14,000 for Relay for Life. He’s also participated in Relay for Life’s cancer walk and supports the Make-A-Wish Foundation.

Recent business achievements: In the first

half of 2015, has handled a book of business yielding about $50 million in premium – a 10% growth from 2014; promoted to Greater New York property leader in July and now manages a team placing about $600 million in premium on large-property clients; known as a thought leader and expert by both clients and Aon account executives Projects and initiatives: Held key role in the sucessful origination of new business with Aon’s Extended Stay America account; annual presenter at Aon’s property symposium; played a key role in serving the captive reinsurance program Awards and recognition: Attended Aon’s 2015 Excellence Roundtable; member of Aon’s inaugural Pathfinder Executive Series

Peter Tavella began his career at Aon in 2001 with an internship while he attended Hofstra University. Upon graduation, Tavella joined Aon Risk Solutions as an associate broker.

Within a few years, he was promoted to property broker and then senior broker. Tavella has been the lead broker for some of Aon’s most valuable clients.

KAITLIN EILEEN KNECHT Age: 30 Director of marketing and placement HARVEY INSURANCE GROUP Recent business achievements: Along with the agency principal, Knecht created and launched

a new personal lines rating structure to allow for increased production and ease of business for Harvey Insurance Group’s customers Projects and initiatives: Leads company’s cooperative education partnership with St. Joseph’s University

The new personal lines program Kaitlin Knecht helped launch will bring Harvey Insurance Group up to speed with the latest technology and cut down turnaround time without sacrificing customer confidence. As the head of the company’s partnership with St. Joseph University, she brings in two students to work with Harvey Insurance each semester. Knecht is also a swim coach for the local YMCA and a fundraiser for the March of Dimes.

30

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 30

19/08/2015 2:16:25 AM

YOUNG GUNS 2015

KARI A. DYBDAHL Age: 26 VP and insurance broker AMERICAN RISK MANAGEMENT RESOURCES

developed and implemented a franchise division for American Risk Management Resources; continues to design insurance programs and grow this division by working with more franchisor operations Awards and recognition: American Risk Management Resources Top Broker (multiple wins); IBA Top Producer

Recent business achievements: Has grown her book of business

more than 100% each year for the last five years; grew book of business by 300% and was promoted to vice president in 2012; created her own production team in 2014 Projects and initiatives: Recently designed an insurance program for a franchisor with more than 300 franchises; since then, she has

“I am very passionate about my work and the insurance industry as a whole,” Dybdahl says. “I’m always thinking of ways to grow our company by enforcing innovative insurance designs. Every day I strive to educate and grow my book and my production team’s book, as well as our company as a whole.”

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 31

31

19/08/2015 2:16:36 AM

FEATURES

COVER STORY: YOUNG GUNS KYLE R. BEGGS Age: 29 Producer RCI INSURANCE GROUP Recent business achievements:

Started at RCI Insurance Group with no accounts and no book of business; achieved $349,000 in commission volume in 2014 Awards and recognition: RCI Top Producer in 2013 and 2014; member of Union Standard’s Heavy Hitters Club Projects and initiatives: Developed a fuel distributors program for RCI; instrumental in negotiating increased commissions from carrierst Other professional roles: Member of Young Agents of Oklahoma

Kyle Beggs is very active on a number of boards, both philanthropic and business-related. He’s currently a member of the board for the Children’s Advocacy Center and the executive board of the Claremore Chamber of Commerce. He’s also a member of the Claremore Public School Foundation and the president of the Rogers State University Alumni Board.

DOTTIE CHALMERS-CUTTER Age: 35 VP of operations CHALMERS INSURANCE GROUP Recent business achievements: Promoted to vice president of operations in 2014; instrumental in creating new policies and procedures for Chalmers Insurance Group Projects and initiatives: Instrumental in creating and implementing Chalmers’ new pay-forperformance management system; key figure in nurturing interest in Project InVEST in area schools, and selecting and training college-age interns; spearheading company’s application for recognition as one of the best places to work in Maine Awards and recognition: Travelers High Achievers Award; 2013 Maine Insurance Agents Association Young Agent of the Year Other professional roles: Patriot Insurance Advisory Council; Project InVEST volunteer; Maine Young Agents Committee; NextGen Group, Institute of Family Owned Business

In addition to her duties at Chalmers, Dottie Chalmers-Cutter servies on the Business Office Technology Advisory Council at Lake Region Vocational School and is a director of the Loon Echo Land Trust in Bridgton, Maine, among other charitable activities. “Dottie is a hard worker, is passionate about giving back to the community and is committed to the successful perpetuation of the family business to the next generation of Chalmers,” says Steve Cote of Chalmers Insurance.

32

HARRISON SCHEIDER Age: 26 Environmental insurance broker AMERICAN RISK MANAGEMENT RESOURCES Recent business achievements: Increased

revenue by 58% in 2014 Projects and initiatives: Played key role in

developing new insurance product to help farmers practice better manure and nutrient management, using insurance to help consumers adapt to environmental concerns faster than any regulatory agency could Awards and recognition: IBA Top Producer (2014) Other professional roles: IIAW Emerging Leaders Committee

An expert in environmental risk, Harrison Scheider brings his natural flair for problemsolving to the insurance industry. “The most satisfying part of my job is solving problems,” he says. “Every day I have the opportunity to develop creative risk-management solutions and educate my clients on products that provide solutions for their environmental exposures.”

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 32

19/08/2015 2:16:35 AM

YOUNG GUNS 2015

DOMINIC VOLINI AND GENO MATTIODA Age: 31 and 34 Co-CEOs WOLF POINT ADVISORS Recent business achievements: Joined established brokerage and purchased it in

2014; maintained an average 30% annual growth rate; brokerage has maintained 65% premium growth and 90% client retention Projects and initiatives: Launched a business and educational partnership with leading tech incubator 1871; developing a scholarship program for insurance and financial management majors; developed a contract compliance division to offer to commercial customers Awards and recognition: Erie Insurance Founders Award; Finalist for 2015 Ernst & Young Entrepreneur of the Year Award (Midwest);Hartford Priority Partner; Leukemia and Lymphoma Society of Illinois Man of the Year (Mattioda in 2009 and Volini in 2010) Other professional roles: Members of the Real Estate Investment Association

In 2014, Dominic Volini and Geno Mattioda purchased a long-established brokerage they had been managing and rebranded it with a focus on the potential of technology to transform the insurance industry. Volini and Mattioda aim to be drivers of Chicago’s tech industry, believing that by entering the space now, they can better forecast risk product and policy needs, then work between carriers and customers to meet those needs.

Commercial Lines Rating & Policy Issuance Automation Solutions When speed to market matters...

...our agile applications and experienced service team will get you there fast!

For More Information, Contact NetRate Systems at 517.347.4900

www.NetRate.com www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 33

33

19/08/2015 2:16:42 AM

FEATURES

COVER STORY: YOUNG GUNS AUSTIN REED Age: 23 EVP of program business for BSG Insurance VENTURE PACIFIC INSURANCE SERVICES

DAVE LAMB Age: 34 National property director POWERS INSURANCE AND BENEFITS Recent business achievements: Prior to joining Powers Insurance and Benefits, founded DL Agency, a company focused on the risk-management needs of property managers; merged with Powers in 2015 and was promoted to natrional property director; has brought more than $2 billion in total insurable values into the company in 2015 Projects and initiatives: Instrumental in creating and growing property programs that have increased coverage and reduced average total premiums for property manager clients by 20% Other professional roles: Member of National Apartment Association for both Missouri and Texas; member of Apartment Professional Network; member of Multifamily Insiders for both Missouri and Texas

As the founder and CEO of DL Agency, Dave Lamb brought in $4.5 million in premium in 2014. After merging with Powers Insurance and Benefits, Lamb used his property management expertise to take the company to new heights. When he’s not creating innovative property management programs, Lamb serves as a cabinet member for Youth in Need. He’s also a former Rotarian.

34

Recent business achievements: Led in-house business-to-business telematrketing program for niche/program business; increased channel revenue by 25%; expanded online product offerings by adding two new revenue channels; increased individual production and revenue by 80% in 2014 Projects and initiatives: Collaborated with the program manager of a specialty security guard program to expand its offerings into related industries, including the alarm business, gun stores and shooting ranges; charged with revamping existing social media and niche websites Awards and recognition: Venture Pacific Insurance Services Newcomer of the Year Award Other professional roles: Participating member of ASIS and the California Association of Licensed Security Agencies, Guards and Associates

Austin Reed is one of Venture Pacific’s leading lights. He developed a proprietary online leadmanagement system that helped augment the company’s existing platform and increased the company’s quote-to-bind ratio by 30% in 2014. He also expanded internal procedures focused on retention, increasing Venture Pacific’s retention rate by 5%.

MATT BANASZYNSKI Age: 31 Executive vice president and CEO INDEPENDENT INSURANCE AGENTS OF WISCONSIN Recent business achievements: Hired as IIAW vice

president at age 25; promoted to executive vice president and CEO at 27, becoming the youngest IIA state executive in the country; led the IIAW to grow its E&O book of business by 20%, increase its membership base, and create new products and services to help independent agents Projects and initiatives: Partnered with the University of Wisconsin-Madison to create a new professional development conference aimed at creating better insurance leaders; turned IIAW’s government affairs program into a nationally recognized and award-winning program; spearheaded a statewide advertising program with the Green Bay Packers Awards and recognition: IIABA Maurice Hernodon Award; winner of The Institutes, UW-Madison and Tower Watson’s Source Insurance Management Simulation Other professional roles: Board of directors, InVEST; IIABA Talent Recruitment and Development Strategic Planning Committee; board member, Wisconsin Governor’s Council on Financial Literacy

Matt Banaszynski is passionate about bringing young people into the insurance industry and telling the independent agent’s story. In his spare time, he mentors college students and graduates considering a career in insurance, helping set them up in internships. Under his leadership, the IIAW and its staff have become involved in Make-A-Wish Wisconsin. He also personally supports a number of charities, including the American Heart Association’s Go Red for Women campaign and the Brian Riesch Paralysis Foundation.

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 34

19/08/2015 2:16:49 AM

YOUNG GUNS 2015

DAVID WALTERS Age: 27 Risk advisor GIBSON Recent business achievements: Produced $120,000 in commission in 2014; has produced $98,000 in commission in the first half of 2015 Projects and initiatives: Leads new Health and Human Services niche program at Gibson; under Walters’ direction, the HHS program is the fastest-growing niche program at the company today Awards and recognition: Named one of the 40 Most Influential Business Leaders under 40 by the St. Joseph County Chamber of Commerce Other professional roles: Chairman, Northern Indiana Workforce Board; sits on the advisory council for the Young Professionals Network; mentor for the Insurance and Risk Management program at Indiana State University

“David was a Gongaware Scholar and top graduate from Indiana State’s Insurance and Risk Management program and is one of Gibson’s brightest stars,” says Gibson COO Jerry Scott. “His work with local nonprofits is establishing his role as one of our community’s finest servant leaders.” In addition to his insurance industry duties, Walters sits on the development committee for the St. Joseph County United Way and the planning committee for the Youth Services Bureau of St. Joseph County.

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 35

35

19/08/2015 2:16:58 AM

FEATURES

COVER STORY: YOUNG GUNS NICK SHAHEEN Age: 27 Account manager THE RIGHT CHOICE INSURANCE AGENCY Recent business achievements: Produced

nearly $1.24 million in sales volume for 2014; since joining The Right Choice in 2011, Shaheen’s book of business has doubled every year and continues to grow Projects and initiatives: Reviewed and updated company presentations; key figure in building company’s reputation Awards and recognition: Twelve-time winner of The Right Choice’s Agent of the Month Award

“Since Nick has started with our company, he has always taken initiative to help the company grow considerably,” says David James, CEO of The Right Choice Insurance Agency. “He also takes the time to teach new agents the sales skills and technique needed in order to close an account without being told to do so. He takes great pride in the growth and success of the company and always ensures the highest level of satisfaction with our clients. His primary focus is the success of this company, and he is always developing, maintaining and expanding the client base.”

CHIP GIBSON Age: 33 CEO DELAND, GIBSON INSURANCE Recent business achievements: Promoted to CEO in January; managed to produce $55,000 in new revenue in the first six months of 2015; played key role in creating a strategic plan that has helped Deland, Gibson Insurance go from flat sales to more than 10% annual growth over four years Projects and initiatives: Spearheaded and executed a new review process for the agency; instrumental in creating a risk advisory practice within the firm, allowing DG to offer risk consulting and training services to lower clients’ total risk Other professional roles: Member of Massachusetts Association of Insurance Agents Young Agents Committee board from 2012 to 2015

In addition to helping revitalize Deland, Gibson’s sales, Chip Gibson has elevated the scope and impact of the company’s charitable involvment, helping to form the Deland, Gibson Giving Committee in 2014 to raise money for local nonprofits. Gibson also volunteers at the Head of the Charles Regatta and was a volunteer assistant coach for Belmont Hill High School from 2008 to 2012, leading the school to multiple New England championships and a national title.

JORDAN H. BRYAN Age: 30 VP and personal lines producer ROSS & YERGER INSURANCE Recent business achievements: Promoted to vice president in 2015; finished fourth year of personal lines production with a book of business in excess of $300,000; serves on Ross & Yerger board of directors; in 2015, became the agency’s youngest and first female producer shareholder; has helped grow the personal lines division by 40% since 2011 Projects and initiatives: Headed up rebranding and marketing of the personal lines division; integral to adapting Ross & Yerger’s

36

DAVID JAMES Age: 25 CEO THE RIGHT CHOICE INSURANCE AGENCY Recent business achievements: Has grown The Right Choice

Insurance Agency dramatically over the last six years Projects and initiatives: Reviewed and updated company presentations; key figure in building company’s reputation Awards and recognition: Named one of Detroit’s Top 20 in Their 20s by Crain’s Detroit Business magazine; one of Detroit’s top entrepreneurs for 2014; Right Choice named top agency for Encompass Insurance in 2012; Safeco Insurance Presidential Award (multiple wins); Hastings Mutual Choice Award (multiple wins)

David James started The Right Choice Insurance Agency when he was only 18 years old. In just a few years, he’d grown the agency to 30 employees representing more than 20 insurance companies and $10 million in written premium. “David takes a personal interest in everyone he works with,” says Bryan McLaughlin of Financial Services of America.

“He is determined to help all of his agents to excel both professionally and personally.”

‘Lighthouse’ sales process to the personal lines division; developed a detailed, long-term plan for the division to help it grow from a niche specialty to a true practice group Awards and recognition: Millsaps College Coggin Scholarship recipient; member of the Beta Gamma Sigma business honor society and the Omicron Delta Kappa honor society

Bryan had a long history of accomplishment even before joining the insurance industry, racking up academic achievements like the University of Southern Mississippi’s HEADWAE Award for academic excellence. “[Jordan] has been a model employee at Ross & Yerger,” says CEO and COO Dudley Wooley. “Her enthusiasm for the business, genuiness, integrity and focus on her clients and fellow employees are second to none.”

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 36

19/08/2015 2:17:02 AM

YOUNG GUNS 2015

MATT STADLER Age: 33 Principal MHBT Recent business achievements: Recently named executive vice president and member of MHBT’s executive leadership team; serves as head of MHBT’s Fort Worth office Projects and initiatives: Led MHBT’s Fort Worth office from $3.5 million to $8.5 million in revenue by the end of 2014; leads MHBT’s internal Young Guns group, shaping programs and initiatives to make young MHBT team members successful in their new positions Awards and recognition: MHBT Producer of the Year (2014); named MHBT partner in 2014; CIAB Broker Smackdown champion (2015) Other professional roles: Member of Fort Worth Stock Show Syndicate; Texas Christian University Alumni board member

“Matt is a driven, successful producer who has stepped up to become a leader in our company and our industry,” says MHBT President Dan Browning. “Matt is heavily involved with the Fort Worth community, trying to help where opportunities arise. He constantly volunteers within our company to be a champion of various programs – and leads them successfully.”

PENNSYLVANIA LUMBERMENS MUTUAL INSURANCE COMPANY INDIANA LUMBERMENS MUTUAL INSURANCE COMPANY

PARTNER WITH AN EXPERT IN THE WOOD INDUSTRY. PLM/ILM IS THE PREMIER PROPERTY AND CASUALTY INSURANCE PROVIDER TO THE LUMBER, WOODWORKING AND BUILDING MATERIAL INDUSTRIES. Here are some of the benefits of partnering with PLM/ILM: • • • • •

Open Brokerage – No appointment required No Premium Commitments or Contracts Accept Standard Acord™ Applications A- Excellent A.M. Best Rating Commitment to the wood niche – We speak your customer’s language and handle claims effectively and efficiently

For a producer kit or to submit a risk, please contact us at 800.752.1895 or request a kit online at www.plmilm.com.

ONE COMMERCE SQUARE | 2005 MARKET STREET, SUITE 1200 | PHILADELPHIA, PA 19103-7008 MAIN

800.752.1895

FAX

215.625.9097

WEB

WWW.PLMILM.COM

BUILDING PARTNERSHIPS. TOGETHER WE’RE BETTER.

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 37

37

19/08/2015 2:17:10 AM

FEATURES

COVER STORY: YOUNG GUNS MICHAEL WALDMAN

Awards and recognition: Holds Certified Employee Benefits Specialist

Age: 35 Partner and president, employee benefits WALDMAN BROS

designation; has repeatedly earned the Lead Producer of the Round Table of the Soaring Eagle award from the National Association of Health Underwriters; member of BenefitMall’s Elite Producer Circle; Top Tier Broker with United Healthcare and Blue Cross/Blue Shield; I. Zesmer Young Leadership Award (2013) for leadership within the Jewish community of Dallas

Recent business achievements:

Initiated Waldman Bros’ discount benefits program, which helps shift claims dollars from one entity to another to improve renewal rates for clients; expert on multifaceted complexities of healthcare reform and related legislation; created a system to ensure clients are in compliance with ACA reporting and legislative requirements; helped implement employee benefits technology to streamline efficiencies for clients Projects and initiatives: Led Waldman Bros to become one of the first employee benefits firms to implement minimum essential coverage plans, along with other ACA compliance strategies

JENNIFER BAUMSTEIN Age: 33 Claims supervisor LIBERTY INTERNATIONAL UNDERWRITERS

In addition to his work in the industry, Michael Waldman is an active board member and holds leadership roles with the Dallas Jewish Community Foundation and the Greenhill School Alumni Association.

He also serves on the boards of Congregation Shearith Israel and the Jewish Community Center of Dallas. He has multiple levels of involvement with the Jewish Federation of Greater Dallas and the National MS Society. Waldman also recently graduated from the Wexner Heritage Program, and is a past president of the Dallas Jewish Historical Society.

BASKAL KORKIS Age: 29 Agency owner ALLSTATE INSURANCE

Recent business achievements: Oversees

a team responsible for handling claims and managing third-party administrators servicing about $80 million in gross written premium; heads up team adjusting more than 200 classes of Allied Health Care business Projects and initiatives: Led initiative to streamline state reporting and HIPPA requirements, both internally and externally, across multiple program lines; developed tracking programs to monitor claim activity Awards and recognition: Multiple BRAVO Awards for excellence in claims handling and program and product development Other professional roles: Speaker at 2013 PLUS Conference on risk issues facing insurance agents and brokers; member of New York and New Jersey Bar Associations

Besides overseeing a team that handles tens of millions of dollars in written premium, Jennifer Baumstein led Liberty International Underwriters’ effort to streamline state reporting and HIPPA requirements.

Baumstein volunteers regularly with the Give With Liberty campaign.

38

Recent business achievements:

Produced $1 million in sales in 2014, his first year Projects and initiatives: Special guest speaker at Allstate’s Florida Growth Summit; although the average employee age in Korkis’ agency is just 22, it continues to outperform much more established agencies and has one of the highest retention rates in Florida Awards and recognition: Inner Circle Elite, Circle of Champions, Honor Ring, nominated for Rookie of the Year

Although just 29 years old, Baskal Korkis is already running a successful agency. “Baskal leads his team – which is one of the youngest teams here in the area – and teaches us not only about insurance, but also gives us life advice,” says Allstate’s Thomas Tischio.

LANDON PLUMER Age: 28 Producer IMA Recent business achievements: Nominated to 2014 Leadership Wichita class; became first IMA producer to validate after one year; integral to IMA’s growth into new markets, especially Oklahoma Projects and initiatives: Played key role in developing plan to track, forecast and analyze revenue and profitability quarter-byquarter for each business unit under IMA umbrella; sits on IMA Big Data Committee, where he’s helping to create a platform to aggregate all IMA client data to create detailed benchmarking analyses Awards and recognition: IMA New Producer of the Year (2014); nominated for Wichita Business Journal’s 40 Under 40 Other professional roles: Selected for Wichita Business Journal’s Future Leaders Round Table Series

When he’s not working on new innovations for the insurance business, Landon Plumer sits on the boards of Arts Partners Wichita, Junior Achievement of Wichita and the Cerebral Palsy Research Fund’s River City Roll Event Committee. He’s also an active participant in all of IMA’s charitable events.

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 38

19/08/2015 2:17:14 AM

YOUNG GUNS 2015

TIMOTHY GASPAR Age: 33 CEO GASPAR INSURANCE SERVICES Recent business achievements:

Founded Gaspar Insurance in 2008 and has grown the business dramatically Awards and recognition: San Fernando Valley Business Journal 40 under 40; Trusted Advisor Award; Warner Center Chamber of Commerce 2015 Small Businessperson of the Year Other professional roles: Member of the Mercury Insurance Producer Council and the Hanover Insurance Producer Council

When Timothy Gaspar started Gaspar Insurance Services in 2008, he had only one other person on staff and just $2 million in premium. Today, his company boasts a staff of 30 and a book of business of $28 million and growing.

Gaspar also serves as the chairman of the board for the West Valley YMCA and a board member for the West Valley Boys and Girls Club. He also established the Gaspar Entrepreneurship Scholarship at California State University Northridge.

CRAIG BRUNO Age: 32 President INSURANCETRAK SERVICES Recent business achievements: Heads one of the only agencies in the country to have a fully integrated ‘pay as you go’ workers’ compensation program that works with payroll companies, insurance carriers and insurance agents Projects and initiatives: Spearheaded development of ‘pay as you go’ workers’ compensation program at www.trackpay.net

Craig Bruno is a determined innovator. “We are one of a handful of insurance agencies that has developed software to integrate with third parties for processing of pay-as-you-go workers’ compensation,” Bruno says. “We’re unlike your old-school traditional insurance agency that is still living in the paper age. We’re completely digital and offer convenient online quoting and servicing options directly from our website. We are truly the model for agencies of the future.”

DAVID DEMOTT Age: 34 President GRIDIRON INSURANCE UNDERWRITERS Recent business achievements: Gridiron

has seen 30% annual growth every year since DeMott assumed leadership; transitioned company to a focused analytical firm that uses data extensively Projects and initiatives: Designs all Gridiron program platforms, including designing underwriting guidelines, finding the insurer to partner with, building the technology interface and establishing distribution Awards and recognition: Holds ARM, AU, ASLI, CPCU and AMIM designations Other professional roles: Board member, Florida Surplus Lines Association; member, Florida Surplus Lines Legislative Committee; member, CPCU Society

David DeMott doesn’t just lead Gridiron – he also takes ideas and turns them into real insurance products. DeMott designed and custom-built all of the company’s program prouct portals, which have the ability to quote, bind and issue in real time. “This, coupled with the ability to design products over several disciplines – including inland marine, property and excess liability – is truly a unique combination,” says Milan Stefanovic, COO of Bass Underwriters.

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 39

39

19/08/2015 2:18:46 AM

FEATURES

COVER STORY: YOUNG GUNS JOE POTTHAST

KRISTEN NUNERY

Age: 29 Producer and marketing manager FOUNDATION INSURANCE GROUP

Age: 33 Founder and CEO MYCOI

Recent business achievements: Grew company book of business by $750,000 in 2014; on pace to add another $800,000 in 2015; customer retention rate at or above 90% Projects and initiatives: Spearheaded new online marketing strategy that has increased web traffic by more than 25% and resulted in a substantial increase in web-generated leads Awards and recognition: Nominated to serve on the Agents Council of the American Rental Association’s nationwide insurance program Other professional roles: Member, Restaurant Association of Metropolitan Washington

Recent business achievements: Under Nunery’s leadership,

In addition to his professional duties, Joe Potthast is active in the autism community, attending autism awareness events and giving to autism awareness causes.

myCOI grew by 156% last year and is on target to grow by more than 130% this year; myCOI boasts a 97% client retention rate Projects and initiatives: Spearheaded the creation of myCOI – both the software and the company Awards and recognition: Indiana Innovation Award; Taylor University Business Plan Contest Other professional roles: Judge for TechPoint’s MIRA Awards; judge for Purdue University Schurz Communications Innovation Challenge

Kristen Nunery began her career at a property management agency, doing rehabs and house flips. She soon realized that hiring subcontractors meant taking on major risk, because there was no easy way to manage certificates of insurance [COIs] that would reveal if subcontractors had the right level of coverage. That’s when Nunery decided to combine her property management and insurance experience to create myCOI, a software that collects and validates COIs and their supporting documents. Nunery is also involved in charitable work for Alzheimer’s research, and is a big supporter of women in the technology world. “Women in technology are few and far between,” she says. “I like to support those women.”

KELLY MORRISON

ASHLEY MOFFATT

Age: 35 Personal lines manager and EVP CAL-VALLEY INSURANCE

Age: 27 Senior underwriter GREAT AMERICAN SPECIALTY E&S

Recent business achievements: Grew personal revenue by more than $250,000; led personal lines department to organizational growth goals for the 12th year in a row Projects and initiatives: Created ‘Customers for Life’ program in 2015; leads agency charity committee; key player in agency marketing strategy Awards and recognition: Five-Star Professional Insurance Agent; one of Kemper Insurance’s CSRs of the Year (2007) Other professional roles: Sat on Encompass agency council for three years; sits on Safeco Insurance Frontline Council and Kemper Agency Council

Recent business achievements: Annual growth for her team has been between 24% and 55% every year since 2013; writes about half of her team’s total premium; trains new underwriters; handles broker communication and marketing Projects and initiatives: Taught sessions on insurance issues in China as part of the 2013 Visiting Expert Partnership Program; oversaw parent company AFG’s United Way campaign in 2011 and 2012 Awards and recognition: ALSI Distinguished Graduate Award; CPCU Award for Academic Excellence; member of Great American Emerging Leaders (2011–2013) Other professional roles: JBoard member, Cincinnati CPCU; chair, Cincinnati CPCU Good Works Committee; member, Planning Committee for Insure the Children’s Have a Heart fundraiser

“Kelly is a leader in the agency, strives on giving back to her local community, and can always be counted on,” says Cal-Valley founder Tom Powell.

40

“Ashley is a highly motivated and hard-working individual in and outside of work,” says Great American’s Kim Collins. “At work, Ashley accepts any challenge or responsibility.

In addition to the major projects and initiatives listed above, she has contributed to many divisional employee teams to improve processes and systems. In addition to her underwriting duties, she has also taken on the responsibilities of training, event planning and marketing. As her manager, I feel Ashley is definitely a Young Gun on the underwriting side of the industry, and I look forward to watching her success in the future!”

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 40

19/08/2015 2:17:27 AM

YOUNG GUNS 2015

JEFF KROEGER

PARKER BEAUCHAMP

Age: 28 VP, hospitality division WORLD INSURANCE ASSOCIATES

Age: 35 CEO and president INGUARD

Recent business achievements: Grew revenue by 25%; has grown the hospitality division’s team of employees by 25% over the last 24 months Projects and initiatives: Instrumental in securing exclusive niche business contracts

Recent business achievements: Led rebranding of Beauchamp

After Kroeger took the reins as World Insurance Associates’ hospitality division vice president in 2012, the division saw revenue increase by nearly a quarter. That increase isn’t due only to good management skills; Kroeger is also the unit’s primary producer. A graduate of Montclair State University, Kroeger holds a degree in criminal justice.

McSpadden | Morrison Galliher to Inguard; spearheaded marketing strategy that led to 103% increase in web traffic and garnered more than 95 media placements Projects and initiatives: Updated Inguard internal processes, technologies and staffing; introduced performance-based compensation plan Awards and recognition: Bronze Stevie Award for Insurance Company of the Year from American Business Awards Other professional roles: Regular contributor to WealthManagement.com and the Huffington Post

In 2013, Parker Beauchamp succeeded his father as the CEO of Beauchamp McSpadden | Morrison Galliher. Throughout 2013 and 2014, Beauchamp led the 144-year-old company through a complete rebranding, shifting its focus to innovation and technology, digital marketing and sales, and a customer-centric business model. The company officially became Inguard in March 2014.

INDEX BY COMPANY COMPANY

PAGE NAME

COMPANY

PAGE NAME

Allstate Insurance

38

Baskal Korkis

Independent Insurance Agents of Wisconsin

34

Matt Banaszynski

American Risk Management Resources

31

Kari Dybdahl

Inguard

41

Parker Beauchamp

American Risk Management Resources

32

Harrison Scheider

InsuranceTrak Services

39

Craig Bruno

Aon Risk Services

30

Peter Tavella

Key Insurance

30

Jesse Konold

Assured Neace Lukens

30

Matt Fuqua

Kinney Insurance Agency

28

Drew Kinney

Cal-Valley Insurance

40

Kelly Morrison

Liberty International Underwriters

38

Jennifer Baumstein

Captive Resources

28

John P. Boulus

MHBT

27

Adam Sammons

Chalmers Insurance Group

32

Dottie Chalmers-Cutter

MHBT

37

Matt Stadler

Crawford-Butz & Associates

26

Mike D. Ehrlich

myCOI

40

Kristen Nunery

Deland, Gibson Insurance

36

Chip Gibson

Powers Insurance and Benefits

34

Dave Lamb

DFB Insurance Group

28

Michael Galloway

RCI Insurance Group

32

Kyle R. Beggs

Edgewood Partners Insurance Center [EPIC]

26

Tammy Mission

Ross & Yerger Insurance

36

Jordan H. Bryan

Exceptional Risk Advisors

28

Michael Harris

Strategic Insurance Services

29

Doug Levi

Foundation Insurance Group

40

Joe Potthast

TechAssure Association

26

Garrett Droege

Gaspar Insurance Services

39

Timothy Gaspar

The Right Choice Insurance Agency

36

David James

General American Specialty E&S

40

Ashley Moffatt

The Right Choice Insurance Agency

26

Nick Shaheen

Gibson

35

David Walters

Ventura Pacific Insurance Services

34

Austin Reed

Gridiron Insurance Underwriters

39

David DeMott

Waldman Bros

38

Michael Waldman

The Hanover Insurance Group

26

Ryan Vaughn

Wolf Point Advisors

33

Geno Mattioda

Harvey Insurance Group

30

Kaitlin Eileen Knecht

Wolf Point Advisors

33

Dominic Volini

IMA

38

Landon Plumer

World Insurance Associates

41

Jeff Kroeger

www.ibamag.com

24-41_Young Guns-SUBBED 2.indd 41

41

19/08/2015 2:19:05 AM

IBA Sept (NAPSLO) Issue 2016-8.13.15.qxp_Layout 1 8/13/15 11:13 AM Page 1

Great Minds Representing all new programs.

Programs galore!

We’re back!

Back....bigger and better than ever!

Coverage available Architects, Engineers, Construction Managers, Design Build Firms and Contra

Hill Program Managers LLC 155 South Madison • Suite 302 •

42-43_Hill Property Managers Ad.indd 42

19/08/2015 2:19:37 AM

nds Are Back!

I love NAPSLO! And I love it in San Diego!

rograms. e!

Ya,I know, right?

Ditto, Amigo!

It’s so aaaaawesome!!!

age available for… s and Contractors, Oil & Gas Engineers, Consultants, and Service Contractors

son • Suite 302 • Denver, CO 80209 • 877.778.1114 • 303.416.6994 • www.hillprograms.com

42-43_Hill Property Managers Ad.indd 43

19/08/2015 2:19:44 AM

FEATURES

PROFESSIONAL LIABILITY

Making the most of the professional liability marketplace Everyone makes mistakes – which is why professional liability insurance remains a must-have for almost every industry SOMETIMES THE largest professional liability claims can be a result of the simplest things. Mike Hill, principal of Denver-based Hill Program Managers, recalls one error that resulted an almost $4 million claim – the whole thing caused by three or four words in a report.

The policyholder, an environmental engineer, said dirt could be used as fill in a construction site, but it turned out the dirt he was referring to was contaminated. It was a fairly big oops.

“You kind of wonder why he did that,” Hill says. “He was a very qualified person. But it’s a perfect illustration of why professional liability insurance is needed. He probably would have gone out of business without it.”

From the funeral director who cremates a body that was supposed to be buried to the accountant who accidentally emails a client’s confidential files to the wrong person, even the best-trained professionals mess up from time to time. Professional liability coverage can help protect them from paying the high cost of their mistakes.

A vast market Also known as errors & omissions [E&O] insurance (or malpractice insurance in

44

the medical sector), professional liability insurance is a type of coverage designed to protect professionals (accountants, attorneys, doctors, dentists, nurses, architects, engineers, real estate brokers, investment advisors, security broker/dealers, appraisers, consultants, etc.) against liability incurred as a result of errors and omissions in performing their professional services — including any actual or alleged breach of duty, neglect, error, misstatement, malpractice or omission.

Anyone who does business on behalf of someone else and could face a financial penalty for the failure to deliver those services needs professional liability coverage. And yet, much of the market is still untapped.

While there were some 12.5 million accounts that needed PL coverage coming out of the recession, only 1.2 million actually had coverage, according to data compiled by MarketStance. The report estimates that $21 billion in premium still remains untapped in the PL marketplace.

Most professional liability policies only cover economic or financial losses, as opposed to bodily injury and property damage claims, which are more typically covered under commercial general liability policies, says John Rafferty, executive vice president of

7 THINGS PROFESSIONAL LIABILITY INSURANCE WON’T COVER > > > > > > >

Intentional wrongdoing or harm Illegal acts General liabilities Employee injuries Employment matters False advertising Property damage Source: Insureon

Arch Insurance Group US. There are a few exceptions, however – including physicians, architects and engineers.

The majority of professional liability policies are written on a claims-made basis, which means the claim for the wrongful error or omission must be made within the policy period, Rafferty explains. Typically, he says, a professional liability policy carries an aggregate limit of liability, which also includes defense costs as well as judgments and settlement amounts.

www.ibamag.com

44-47_Ad Led Pro Liability-SUBBED 2.indd 44

19/08/2015 2:20:15 AM

life expectancy, yet [who needs] expensive, ongoing medical and/or life and financial assistance,” Rafferty says.

One thing that creates claims for architects is a dispute over fees. “If an architect or engineer has to sue their client to get their fee, almost routinely there will be a countersuit for negligence of the performance of the work, creating a professional liability claim,” Hill says. “Nobody thinks about that when they are trying to collect money. Usually they are just upset. They don’t think they will get a countersuit.”

It can be a pretty big exposure, Hill adds, tying in breech of contract, negligence, construction defects and more, adding insult to injury. “You don’t get paid, and you get sued. And you’ve got that black mark on your reputation – and you still don’t get paid.”

Reputation protection is a big part of most professional liability coverage. “There is always a little bit of coverage there in case there is a crisis within the firm,” Hill says.

Trends and challenges

“I think the recession was a key differentiator and driver for a lot of firms” Kevin Collins, Victor O. Schinnerer & Co. Top loss exposures Loss exposures in the sector vary according to the type of PL insurance at issue.

For large accounting firms, “sizable insured losses can stem from the accounting firm’s prior association with … clients caught up in high-profile scandal-ridden fraud allegations or large client bankruptcies,” Rafferty says.

Larger law firms might face similar claims, especially if they offer advice and services on potentially controversial corporate matters such as merger and acquisition deals, tax opinions or complex corporate structures, Rafferty adds. Small law firms and individual lawyers, meanwhile, could face an array of claims stemming from client dissatisfaction with things like wills, marriage dissolution

and real estate transactions.

Medical providers also have significant exposure. It is not uncommon for doctors and/or hospitals to get sued for misdiagnosis, mistreatment and failure to properly monitor a patient’s worsening condition, Rafferty notes. Even a local ambulatory service can have unfortunate events that prompt professional claims – from accidentally dropping a patient off the stretcher to the arguably preventable mechanical breakdown of the ambulatory vehicle itself, preventing the patient access to timely treatment.

“In the medical arena, often the largest insurance claims involve alleged malpractice in situations that have resulted in a substantially impaired or disabled patient with a long

Hill has observed that risk managers and owners in the engineering and architecture sector are requiring higher and higher limits all the time. Lately, he says, there is a growing trend of small firms being asked to provide large limits so they can work on projects – “which is always a problem when you don’t have revenue to offset the kind of liability that these people can be inclined to carry. When an account with $100,000 in revenue needs to buy a $5 million limit, it can be a pretty significant cost to them, and an exposure to the carrier, too.”

Geotech and soils engineering also can be a difficult piece to underwrite for professional liability coverage.

“Their projects aren’t very big, and their revenue per project isn’t as large, but what they do is really important to the process,” Hill explains. “That becomes a difficult exposure because a failure in that area leads to a lot of problems in the rest of the construction.”

In the energy sector, meanwhile, professionals working with pipelines are at significant risk. “From what I’ve seen of covered losses, some of them pretty darn big – like many millions of dollars,” Hill says.

www.ibamag.com

44-47_Ad Led Pro Liability-SUBBED 2.indd 45

45

19/08/2015 2:20:22 AM

FEATURES

PROFESSIONAL LIABILITY Rafferty, meanwhile, has observed that in many jurisdictions, insurance rates are on the rise for law firms of all sizes and areas of practice, due to insurer profitability challenges within the line.

The insurance industry also has a growing need to protect itself from professional liability claims. Rafferty points to several factors contributing toward this trend, including the length of time to mature and lack of visibility along the way with respect to identifying problematic claims, as well as the challenging state-specific protocols required of insurers in denying and handling claims.

The recession turning point The economic downturn of 2008–2010 led to declining property values, foreclosed mortgages, employee layoffs, theft and failed businesses – all of which had an eventual impact on PL coverage in the construction industry.

“I think the recession was a key differentiator and driver for a lot of firms,” says Kevin Collins, senior vice president of Victor O. Schinnerer & Co., which specializes in PL coverage in the design, construction industry and real estate industries.

“A unique thing happened in the ... financial collapse,” Collins says. “No matter where you worked in the industry, no matter what geographic area you were involved with, everything went down, and you lost business.”

While Schinnerer & Co. did not see the recession as a huge driver in increasing PL claims, “what we did see was that there was a whole generation of architects and engineers that did not come into the industry,” Collins says. “They’ve gone to completely different industries.”

Thus, as firms recover, the question has now become how to staff up again while being smarter about risk management, quality assurance and quality control procedures.

Another related trend Collins sees in professional liability insurance has to do with a recognition that the design and construction industry is aging and a lot of firms are dealing with financial or ownership transition issues that “often cater into insurance problems that we need to address and drive.”

At the same time, he adds, “we are starting

46

to see not only a growth in the options, but also an exponential increase in the evolution of change. What may have taken a decade to evolve in the ’80s is now being resolved in two to three years of construction practice in the 2000s ... everything is faster paced.”

Brave new world All of that speed has led to new exposures and expanded product needs in the network security and cyber insurance marketplace, as recent headline-grabbing data breaches have demonstrated.

“Network security breaches can lead to the loss of critical, confidential customer information and trade secrets, and even the temporary shutdown of critical internal or customer-facing systems,” Rafferty says.

“It’s an increasing concern for business and government entities of all types and sizes.”

Although the network security/cyber insurance marketplace is only about a dozen years old, Rafferty notes that some industry experts already peg it as a $2 billion premium segment with likely growth to $5 billion within five to 10 years.

The challenge lies in addressing business leaders’ understanding of the scope of their

exposure to network/data breaches, and how best to protect their organizations.

“There is work to be done,” Rafferty says, pointing to a string of coverage disputes that have arisen within the larger property/casualty industry over the past decade as policy holders have sought coverage (typically unsuccessfully) for a cyber breach from commercial general liability policies or even directors & officers or professional service-specific errors & omissions policies.

How to plug in According to MarketStance, the majority of accounts that remain uncovered in the professional liability marketplace are small and medium-sized ones, creating a perfect opportunity for independent agents.

One way to capitalize is to focus on the interplay between professional liability and directors & officers [D&O] or commercial general liability [CGL], which can be misunderstood. “Expertise and creativity can be a difference-maker,” Rafferty says. “For example, at Arch we have a newer product that combines D&O and E&O for small franchisers to minimize coverage gaps and provide more certainty to the policyholder.”

“Cyber liability is an increasing concern for businesses and government entities of all types and sizes” John Rafferty, Arch Insurance Group US PROFESSIONAL LIABILITY

BY THE NUMBERS

$16 billion

Annual premium (nonmedical)

$2.4 trillion

Covered potential liability in the market

$2.9 trillion

Uncovered potential liability

As always, Rafferty adds, it’s best to partner with insurers who have a track record of success in the professional liability program environment with demonstrable expertise in underwriting, policy form drafting, actuarial support, compliance/state filings and policyholder education support.

While there is a lot of opportunity in the PL marketplace, it’s also fiercely competitive.

“It seems like every day we come to work, we are fighting for one account or another with the rest of the market,” Hill says. “You have to work out your own little niche and develop relationships with your brokers that allow you to build your boat.”

www.ibamag.com

44-47_Ad Led Pro Liability-SUBBED 2.indd 46

19/08/2015 2:20:29 AM

IBAmeri

IBW INSURANCE BUSINESS WHOLESALE

E-NEWSLETTER  MOBILE  WEBSITE

Dedicated news for the E & S Wholesale Market

COMING SEPTEMBER 2015

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

IBAmerica_IBW Ad_Final.indd 2.indd 8 44-47_Ad Led ProFP Liability-SUBBED 47

18/08/2015 3:59:48 19/08/2015 2:20:35 AMAM

PEOPLE

PRODUCER PROFILE

A happy camper Warren Oliver found his niche in the insurance industry by tapping into one of his favorite hobbies

THROUGHOUT HIS long and successful career in the insurance business, Warren Oliver was always hunting for a niche – something no one else was out prospecting for.

Finally, about a decade ago – shortly after joining the New Jersey-based Scirocco Group as a senior marketing executive – it hit him that the niche had been there all along, dressed up as his favorite pastime: camping.

Today, Oliver is among the East Coast’s premier producers in the campground niche; his territory ranges across New Jersey, Pennsylvania and New England. It’s serious business – he runs about a 70% hit ratio and currently writes $1.5 million in annual premiums for more than 60 campground clients – but because he’s working in a field he loves, it still feels more like play than work.

A foot in both camps

“I love it all. I love being outside, I love being at the marina in the summer ... and being in the mountains in the winter”

Camping is Oliver’s passion – and his escape. He grew up as a city-dweller and got his first taste of tent camping when he was 17. When he got married, he discovered that his wife loved camping too. When kids came along, the family bought a pop-up trailer, then a hard-sided camper that Oliver and his son used to go hunting. Soon, the girls wanted to go along, too, so they bought a bigger camper.

Asking Oliver to name his favorite place to camp is like asking him to pick a favorite child. “I love it all,” he says. “I love being outside; I love being at the marina

48

in the summer and living on a boat, and being in the mountains in the winter. I love the Cape May/Ocean View area. If I am with my family and with my camper, I’m a happy guy.”

Oliver stumbled into the campground insurance niche while staying at the Harmony Ridge campground in Sussex County, NJ. The campground owner mentioned he was having problems with his insurance and asked Oliver to take a look.

Oliver had some free time – after all, he was on vacation – so he checked it out.

He investigated the campground carriers that were out there, spoke to various underwriters and found out which program was which. He ended up writing the campground owner’s insurance and increasing his coverages by about 40% – saving him probably 30% in the process.

The campground owner, of course, was very happy. “He said, ‘Well, why don’t you start doing this for other people?’” Oliver says.

The perfect fit For Oliver, it was an ‘aha’ moment. He found that he was perfectly positioned to enter the market. He could relate to the campground owners and could address their insurance needs from a fresh, professional perspective.

He got busy right away going after the “low-hanging fruit” in the niche – helping prospective clients get their valuations up-to-date and showing them

www.ibamag.com

48-49_Producer Profile-SUBBED.indd 48

19/08/2015 2:21:09 AM

NETWORKING BOOTCAMP One of the most important parts of successfully cultivating a niche is establishing yourself as an authority in the field.

Warren Oliver does this in several ways: Join associations: Oliver is a member of the New Jersey Campground Owners Association and Pennsylvania and Northeast Campground Association.

Become the expert: Oliver has become a regular speaker at campground and insurance conferences, speaking on topics ranging from emergency response to policy benefits.

Keep in touch: Oliver writes a monthly newsletter packed with insurance and safety tips for campground owners. coverages they were currently lacking for serious exposures such as transmissible pathogens, sex abuse and molestation.

Today, Oliver’s campground clients range from very primitive campgrounds to large outfits close to major highways with RV pull-throughs for “transients” – RV campers who are just passing through, and are back on the road the next morning.

It’s a surprisingly diverse niche with myriad exposures.

“I have swim clubs with campgrounds attached to them. I’ve got campgrounds with adult pools and children’s pools, splash pads, lakes with diving boards, and rivers running through them with rafting and canoeing, kayaking and stand-up paddle boarding.

The array is vast,” he says.

Blessed with ambition, affability and a natural aptitude for sales, Oliver brings the mindset of a true producer to his work. Technically, these days, he works out of his home office. But most of the time he’s out on the road, visiting clients and new prospects.

“I have been doing this for 38 years, and the beautiful thing about it is I still get as excited today as I did with the first deal I ever did,” he says. “As producers, we sometimes get stale. We are all chasing the same thing. When you find a niche and you concentrate on just that niche, you get the opportunity to fully identify the problems of each one of those inherent risks. And you know how to facilitate it. You know the kinds of coverages you should offer.”

www.ibamag.com

48-49_Producer Profile-SUBBED.indd 49

49

19/08/2015 2:21:15 AM

FEATURES

COMMERCIAL AUTO

Coverage for the unthinkable Accidents happen – and when they’re particularly devastating, excess commercial auto coverage is ready to pick up the pieces THE LARGEST commercial auto claims tend to be the stuff of headlines – singleoccurrence accidents with multiple victims, such as a truck driver who hits a van full of family members, a church youth group or a school bus.

“Those are things that are going to be through-the-roof catastrophic,” says Matt Domitrovich, vice president and broker at Worldwide Facilities, who specializes in excess auto, with a niche in the excess transportation business. “The more injured individuals in any one accident, the greater the potential for a large claim.”

Some of the biggest claims coming out of such scenarios are not for fatalities, but for people who actually survive and need roundthe-clock medical care, perhaps for the rest of their lives.

“Those settlements can be huge – and rightfully so,” Domitrovich says. “That’s what this type of insurance is for. Nobody means for these things to happen. That’s why it’s called an accident. You don’t want to see it happen. You don’t want to go through it. But if it does happen, you want to make sure you are adequately protected.”

Excess auto liability insurance offers excess coverage over an auto policy held by the insured; it may be provided for owned autos as well as hired and non-owned autos.

While the claims scenarios can be gut-wrenching at times, “the one interesting thing about excess is, you sit over the top of so many different carriers, you learn a little bit about everybody,” Domitrovich says. “Excess offers a bird’s-eye view of the commercial auto sector.”

50

Who needs excess coverage?

Long-distance truckers for hire are the biggest customers in the excess commercial auto sector, representing more than half of the commercial auto marketplace. Waste haulers, too, have obvious exposures because they are typically driving through residential areas during morning hours when people are active.

“In both of those cases, we always recommend additional limits other than primary insurance,” Domitrovich says.

Contractors with large fleets also need excess coverage, although they tend to be priced a lot lower than the truckers for hire, because their vehicles are smaller and they are typically operating within a confined radius.

“It’s all about the exposure,” Domitrovich says. “That’s not to say that those guys don’t have any exposure, but on an overall basis, they don’t have the losses that a true over-the-road trucker for hire would have.”

Other industries that need the coverage include moving and storage, and commercial delivery services such as taxies, buses and airport shuttles.

How much excess coverage an insured needs depends on where they are hauling, what they are hauling and their safety history, Domitrovich says; claims in one state are not going to be the same as in another – they are two different legal environments.

“We look at every risk differently,” he says.

www.ibamag.com

50-53_Ad led Auto-SUBBED.indd 50

19/08/2015 2:21:39 AM

“A trucker running loads to a metropolitan area should typically be running more than in rural America where there is less traffic, with less congestion, that could lead to more accidents. No risk is the same; everybody has different needs.”

Economic drivers The marketplace for commercial auto insurance and related umbrella products is directly tied to the economy. As economic conditions have picked up following the Great Recession, so has the demand for goods that must be hauled from one place to another.

Last year, the US trucking industry generated $700.4 billion, according to American Trucking Trends, making 2014 the

carrier will be enthused about underwriting?’”

Trends in underwriting Excess carriers rely on sound underwriting decisions in the primary market.

“A lot of times when our excess markets see the underwriters sitting below them on the primary, it’s almost like another underwriting tool for them,” Domitrovich says. “They feel more comfortable on the risks because a good, solid, reputable carrier is willing to take the risk on the first million or whatever the primary limit may be.”

Domitrovich also has observed a trend of insureds moving toward risk retention groups or captives. “It’s forcing our primary auto markets that we sit over to be more compet-

“Nobody means for these things to happen.

But if it does happen, you want to make sure you are adequately protected” Matt Domitrovich, Worldwide Facilities first year in history the industry topped $700 billion in total revenue. And it is expected to grow another 21% in the next 10 years.

That means there is also a lot of fresh demand in the insurance marketplace as new players enter the trucking business and established players expand their operations.

The federal government has tightened up its requirements for commercial driver qualifications, just at the time when there is a huge new demand, ultimately leading to a shortage of qualified drivers.

The ATA pegs the current shortage at roughly 25,000, and says it’s due to a multitude of reasons, ranging from demographic and regulatory factors to workplace hazards and the fact that over-the-road trucking jobs can take drivers away from home for lengthy periods of time.

“It’s a significant issue,” says Lou Welch, vice president of the Motor Carrier Group at Scottsdale Insurance Company, part of Nationwide. “Pretty much everyone in the commercial auto sector is facing the question of, ‘Where do I find drivers that meet the government standards and that my insurance

A HANDS-OFF FUTURE?

itive, to offer broader coverages, to really sharpen their pencils on the risks they feel comfortable with,” he says.

Meanwhile, for better or worse, the primary commercial insurance market is placing more emphasis on safety scores in its underwriting process.

“I hope the human element and decisionmaking process isn’t lost solely based on safety scores, even though I think that they are important,” Domitrovich says. “That’s what makes this part of the industry so great –working with the insured and understanding transportation, understanding the trucker’s needs and challenges, and determining, ‘Is this an account that we want to write and have on our books, and if so, what type of limits does this insured actually need?’”

Even though safety statistics in the transportation industry have gotten continuously better, severity on claims is higher than it’s ever been. That means that almost any fleet out there should have some excess coverage.

“I don’t think frequency has gone up that much,” Domitrovich says. “On claims we’ve seen, it is actually stable or has gone down.

Apple and Google are already testing prototype autonomous cars, and Nissan has said it will sell a driverless car by 2020. What seemed unattainable at the turn of the century is becoming more real by the day.

In May 2012, Nevada became the first state to approve a license to test self-driving cars on public roads. California, Florida, Michigan and the District of Columbia have passed similar laws, and other states are considering them.

Supporters of driverless cars say they could eliminate up to 90% of accidents caused by human error in the US, according to a recent Newsweek article.

“That’s a double-edged sword for insurers,” the article says. “What they could save in falling claims costs and frequency, they stand to lose in shrinking premiums by as much as 50% by 2025 and 80% by 2040, according to Thatcham Research.”

There is some thought that driverless vehicles also will play a significant role in the commercial auto sector in the future, but Domitrovich is not so sure. “There are so many nuances involved in operating a semi truck – most people think it requires a person operating the vehicle and controlling the load, and that drivers will never go away,” he says.

But because of medical costs, legal costs, the economy and geographical regions where claims may be filed, we are seeing higher payouts than we’ve seen before. We’ve seen payouts that range from $1 million – on top of the $1 million claim that the primary has paid – all the way up to $100 million.”

The ready availability of data is playing into this trend. Lawyers from insurance companies, as well as plaintiffs, now have the ability to find out the general scope of what’s been paid in settlements in their region over the last 12 months, giving them good parameters to start with.

www.ibamag.com

50-53_Ad led Auto-SUBBED.indd 51

51

19/08/2015 2:21:45 AM

FEATURES

COMMERCIAL AUTO TARGET CLASSES IN COMMERCIAL Ambulances Cement mixers Contractors Dirt, sand and gravel haulers Driver training Emergency vehicles

E-LOG RULE EXPECTED FOR LONG-HAUL TRUCKERS Major new trucking regulations are expected to be released in late September by the Federal Motor Carrier Safety Administration – among them, a rule that will require mandatory use of electronic logging devices [ELDs] by truck drivers currently required to document their hours of service. The rule consists of four parts: 1. The requirement to use ELDs 2. Protections against driver harassment (pressures on drivers to exceed hours-of-service limits and “inappropriate communications that affect drivers’ rest periods”) 3. Hardware specifications for the devices that require ELDs to be integrated with the truck’s engine, to use location information and to be tamper-resistant 4. A requirement for carriers and drivers to maintain paper or electronic documentation that verifies drivers’ hours-of-service records The rule will go into effect two years following its publication date in the Federal Register.

Garbage haulers Source: Overdrive Magazine

Gas/LPG haulers Limousines Nursing home vans Para-transit vehicles Public trucks and specialty classes Transit mixers Tow trucks Truckers Trucks for hire Used car dealers

“A lot of people think that lawyers will start with whatever insurance limit you carry, but that’s a big misconception, in my opinion,” Domitrovich says. “I don’t think a lawyer would just look at your insurance policy and say, ‘This guy has $10 million, so I’m going to sue him for $10 million. I think they are more educated than that. They typically start with what they think is reasonable and fair.”

Game-changing technology Years ago, Domitrovich says, it was not uncommon to see some really interesting

52

claims come across one’s desk, where a trucker was “doing things he shouldn’t be doing,” then got back on the road and caused a fatal accident. But now that trucking companies are increasingly using telematics, that doesn’t happen so much anymore.

“Now you can track through GPS where the trucker is, and there are certain systems to track hard braking and over-acceleration,” Domitrovich says. “It’s really unbelievable what these trucking companies are able to monitor, if they have the money to do it. They literally can know almost everything going on with that vehicle.”

Companies also know more about drivers and their driving habits than ever before, a trend that will likely continue to evolve.

“Right now it’s a lot of the larger companies that have the really impressive technology,” Domitrovich says. “But as technology improves and becomes more affordable, more people can utilize those types of resources.”

Which will eventually benefit them in the underwriting process. “Tracking your safety protocols and drivers, and especially the hours of service, that’s a big issue,” he says.

“If you can get those scores down through technology, that will really help the smaller guy and mid-sized trucking company.”

Electronic logs, or e-logs, also are becoming more and more common in the commercial trucking sector; the hope is that they will improve safety scores, compliance and accountability going into the future,

Domitrovich says.

However, at the end of the day, insureds are graded on a curve, so there will always be people at the end of the curve who may think they are doing everything right, but if they are below their peer group, they will have poor safety scores, Domitrovich points out.

Drive cams are another recent technological development the commercial auto industry has adopted, but Domitrovich is up in the air about the technology.

“Some people say they help – I’m not entirely sure if they do, only because in a claim scenario, who knows what it’s going to show?” he says. “The rule of thumb is, the greater the unknown, the greater the premium. And the more that is known about a risk, it usually improves your pricing.”

Thanks to all of this technology, underwriters in both primary and excess know more about the truckers they insure than they ever have before. “It does make it challenging, if you have an insured with some bad history, to place higher excess limits,” Domitrovich says.

But it’s these kinds of challenges that make the excess commercial auto sector such an invigorating place to be.

“The trucking industry is a solid indicator of the state of the economy and plays a vital role,” Domitrovich says. “When the trucking industry is healthy, I believe the economy is healthier. It’s a vital part of our economy, and I hope that it continues to be that way for a long time. It’s a great industry.”

www.ibamag.com

50-53_Ad led Auto-SUBBED.indd 52

19/08/2015 2:21:53 AM

Focus on the Future with WWFI A National Wholesale Broker and Managing General Agent with multiple regional offices across the country, our reach doesn’t end there. Our key industry relationships with virtually every specialty domestic and international insurer ensures you and your clients have access to the best resources, multiple in-house binding authorities, unparalleled product expertise and exceptional service.

www.wwfi.com National, Independent Wholesale Brokerage & Managing General Agency Since 1970.

Ca. Lic. #0414108

50-53_Ad led Auto-SUBBED.indd 53

19/08/2015 2:22:06 AM

HIGGINBOTHAM AGENCY, 2014 ELITE AGENCY

Insurance Business America is accepting nominations for the 2015 Elite Agency awards.

If you know of an agency that has experienced notable growth, adopted innovative strategies, or deserves to be recognized for other reasons; nominate them today!

Email Ryan Smith at ryan.smith@keymedia.com or visit our website: www. ibamag.com.

IBAmerica_Elite Agencies_R2.indd 54-55_Career Path-SUBBED.indd 54 8

18/08/20152:22:25 9:56:04 19/08/2015 AMPM

9:56:04 PM

PEOPLE

CAREER PATH

COMING FULL CIRCLE

Richard Skorupski has worked for small, independent agencies and big banks – but it all started and ended with Meeker Sharkey 2010

JOINS MEEKER SHARKEY – AGAIN Despite being traded like a baseball card, Skorupski continued working with his original group of colleagues from Meeker Sharkey. But he soon realized he didn’t like the big broker experience. When the original Meeker Sharkey owners decided to reopen a new office, they invited Skorupski to join them – an invitation he gladly accepted

In 2000, the legal barriers between insurance and banking were eliminated, and Meeker Sharkey was acquired by Summit Bank. That transaction tipped off a series of others, and Skorupski moved to Fleet Bank, Bank of America, Hilb Rogal & Hobbs and Willis

2000

MOVES THROUGH MERGERS Skorupski is no stranger 1998 to volunteer VOLUNTEERS work, but in 1998 he officially joined the Union WITH EDUCATIONAL County Educational Services Foundation, FOUNDATION which supports a small school system for kids with developmental disabilities and funds an alternative high school for at-risk youth

In 1985, it was finally time to make the move to the broker side of the business.

Skorupski began meeting with different brokerages, and Meeker Sharkey immediately stood out 1985 JOINS MEEKER “I liked the president of Meeker Sharkey. He showed SHARKEY the most interest and really pursued me, and I felt that I could work with him”

1984

MOVES TO WAUSAU Skorupski left Liberty Mutual to make a lateral move to Wausau – ironic, since Liberty Mutual would later acquire the company. While his time at Wausau was limited, it was there that he first became interested in the independent side of the insurance industry

Skorupski graduated from Fairleigh Dickinson University in 1980 with a biology degree and the intention of becoming a marine biologist. But after a marine biology internship in St. Croix during his senior year, Skorupski had a change of heart “I realized the opportunities in that career were limited, and I didn’t see myself doing research”

Skorupski’s degree would hardly prove useless. As he searched for employment, Liberty Mutual was also seeking a candidate with a science background to join their risk management division. Skorupski became a loss control consultant and, shortly after being hired, 1981 started accompanying salesmen on their calls JOINS LIBERTY MUTUAL

1980

GRADUATES FROM UNIVERSITY

“I realized they were making a lot more money than I was, and I thought that maybe that’s the career path I’d like to follow” www.ibamag.com

54-55_Career Path-SUBBED.indd 55

55

19/08/2015 2:22:32 AM

PEOPLE

OTHER LIFE

TAKING AIM When Kari Dybdahl needs a break from the insurance business, she picks up a shotgun

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

FOR KARI DYBDAHL, trap shooting is more than a much-needed release from her daily duties as vice president of American Risk Management Resources Network – it’s a family affair.

A fourth-generation trap shooter, Dybdahl came to the sport via her father, who still accompanies her on trips to the gun club.

“Spending time with my father is really fun,” she says. “Still, after 16 years, he’ll sit there and fix my technique. It’s really cute.”

Her great-grandfather brought his

12

Gauge of shotgun Dybdahl uses to trap shoot

56

interest in the sport over from Norway, along with an old manual machine used to shoot the clay discs, also called pigeons. The machine, Dybdahl says, still finds its way to family functions.

“On Independence Day, all the cousins and everyone will come together and stand on the side of the hill, and there will be one clay pigeon that gets thrown out, and you’ll have six or seven people shooting at one pigeon,” Dybdahl says. “Needless to say, that clay pigeon doesn’t make it very far.”

50

Number of discs Dybdahl has hit in a row

80

Average speed, in miles per hour, at which clay discs fly

www.ibamag.com

56-IBC_Other Life-SUBBED.indd 56

19/08/2015 2:22:57 AM

Experience the Difference

“

The Hanover’s people bring a genuine spirit of partnership and broad experience to the table. This makes it easy to work with them to develop meaningful solutions with our agency and for our clients.

Its combination of partnership, expertise and specialized products create a competitive advantage for our agency.

“

THE HANOVER… Committed to Independent Agents since 1852 Listening. Solving. Executing.

John Wright Johnson Kendall Johnson

hanover.com

56-IBC_Other Life-SUBBED.indd 57

19/08/2015 2:23:15 AM

Expect big things in workers’ compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide.

For information call (877) 234-4450 or visit auw.com/us. Š2015 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

Insurance plans protected U.S. Patent No. 7,908,157.

OBC.indd 47

19/08/2015 2:24:41 AM