Insurance Business America issue 6.10

IBAMAG.COM ISSUE 6.10 | $12.95

2018

AGENCIES Discover what America’s best agencies are doing to set themselves apart from the pack

IN IT FOR THE LONG HAUL

How one brokerage is overcoming new challenges in the trucking sector

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DIGITAL TRANSFORMATION Key factors to consider before migrating your operations to the cloud

THE DRIVE TO SPECIALIZE

Program business just keeps growing – here’s how to get in the game

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ISSUE 6.10

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CONTENTS

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10

UPFRONT 04 Editorial

Taking the pulse of the flood insurance market

06 Statistics

So far, 2018 is shaping up to be a lighter year for catastrophes

08 Head to head UPFRONT

NEWS ANALYSIS

What insurance companies need to know before migrating to the cloud

SPECIAL REPORT

INDUSTRY ICON

14 Workers’ comp update

FEATURES

40

PROGRAMMED TO SOAR

IBA explores what’s been driving the significant rise in program business

2

How one workers’ comp insurer is tackling a growing fraud problem

16 Technology update

The key to providing a better customer experience

PEOPLE 47 Career path

Bob Gadaleta has brought a startup mentality to some of the biggest names in insurance

48 Other life

On the run with insurance exec and 5K organizer Mike D’Altrui

Midlands Management’s Richard Bird offers his take on what MGAs must do to remain competitive

18

Mentorship is the first step in reimagining the C-suite This month’s big movers, shakers and new products

ELITE AGENCIES 2018

PEOPLE

09 Opinion

12 Intelligence

22

These 35 agencies have all been able to generate impressive levels of revenue over the past 12 months – find out how

Brokers weigh in on the biggest challenges in marine insurance

44

FEATURES

TRUCKING ALONG

Kenny Planeta reveals how Heffernan Insurance Brokers is meeting the trucking sector’s insurance challenges head-on

IBAMAG.COM CHECK IT OUT ONLINE

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28/09/2018 6:29:10 AM

UPFRONT

EDITORIAL

A flood of private options

J

ust because you aren’t in flood zone, that doesn’t mean you aren’t exposed to flooding, and it really should be a coverage that’s offered as a standard procedure to all clients – commercial and personal.” Those were the words of Craig Poulton, CEO of Poulton Associates, who spoke to IBA as Tropical Storm Gordon threatened severe flooding across several US states. It, of course, was followed by Hurricane Florence – an event that forced more than a million people to flee the Carolina coast.

We should have seen these events coming – 2017 saw Harvey, Irma and Maria strike with devastating consequences – and yet lessons still don’t appear to have been learned as the National Flood Insurance Program continues to struggle and a persistent gap in flood coverage emerges.

“The NFIP could get a lot more people insured if they would try and cooperate with the private market rather than impede the private market’s growth” “The NFIP could get a lot more people insured if they would try and cooperate with the private market rather than impede the private market’s growth,” Poulton told IBA. “I don’t think they have to do some of the things that they think they have to, relative to disclosure of losses and relative to their advice to Congress and their advice to lending regulators.”

Many are still clinging to the hope that the NFIP will work with the private flood market and increase options for insureds, particularly as private insurers show greater resolve by enlarging their presence in the marketplace. Still, brokers and agents face an uphill battle in convincing clients to take out policies. The myriad stumbling blocks include navigating the available products and finding those that actually suit a client’s needs, identifying the language pitfalls that could be detrimental to policyholders, and sifting through the wealth of data from risk modeling to effectively communicate risks to clients.

That’s why IBA is hosting the Flood Risk Summit at Miami’s Hyatt Regency on November 29. It’s a chance for insurance professionals to get up to speed on the opportunities that exist in this vitally important area. Make sure you’re there – in this increasingly unpredictable climate, it may be one of the most important investments you can make for your clients.

The team at Insurance Business America

www.ibamag.com MAY 2017 EDITORIAL Managing Editor Paul Lucas Journalists Alicja Grzadkowska, Lucy Hook, Bethan Moorcraft, Ksenia Stepanova News Writers Lyle Adriano, Krizzel Canlas, Terry Gangcuangco, Mina Martin, Gabriel Olano Staff Writers Hannah Go, Libby MacDonald, Nicola Middlemiss, Joe Rosengarten, Ryan Smith, Heather Turner Copy Editor Clare Alexander

CONTRIBUTORS Margaret Resce Milkint

ART & PRODUCTION Designer Joenel Salvador Production Manager Alicia Chin Traffic Manager Ella Dayandante

SALES & MARKETING Vice President, US Market Cathy Masek Vice President, Sales John Mackenzie Media Sales Managers Chris Anderson, Desiree McCue Mktg & Comms Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley President Tim Duce Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries cathy.masek@keymedia.com, chris.anderson@keymedia.com, desiree.mccue@keymedia.com

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Insurance Business America is part of an international family of B2B publications and websites for the insurance industry Insurance Business Canada john.mackenzie@kmimedia.ca T +1 416 644 874O Insurance Business UK nathan.beach@keymedia.com T +44 20 7193 0935 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 Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO Printed in Canada Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

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Get to Know AmTrust.

Get to Know AmTrust.

Visit d42.amtrustinsurance.com or call 855.297.6809 Visit d42.amtrustinsurance.com or call 855.297.6809

AmTrust AmTrust is is AmTrust AmTrust Financial Financial Services, Services, Inc., Inc., located located at at 59 59 Maiden Maiden Lane, Lane, New New York, York, NY NY 10038.

10038. Coverages Coverages are are provided provided by by its its property property and and casualty insurance company affiliates.

Consult the policy for specific terms, conditions, limits and exclusions to coverage. casualtyis insurance company Services, affiliates.Inc., Consult the applicable applicable policy forNew specific terms, conditions, limits and exclusions to coverage.

AmTrust AmTrust Financial located at 59 Maiden Lane, York, NY 10038.

Coverages are provided by its property AmTrust is AmTrust Financial Services, Inc., located at 59 Maiden Lane, New York, NY 10038. Coverages are provided by its property and and casualty casualty insurance insurance company company affiliates. affiliates. Consult Consult the the applicable applicable policy policy for for specific specific terms, terms, conditions, conditions, limits limits and and exclusions exclusions to to coverage. coverage.

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28/09/2018 1:53:35 AM

UPFRONT

STATISTICS

A break in the weather

THUNDERSTORMS, FREEZING RAIN

$1.4 billion

The first half of 2018 was relatively untroubled by catastrophic events So far, 2018 hasn’t exactly been unmarred by catastrophes – heatwaves have afflicted many corners of the globe, providing an ideal environment for the wildfires that ripped through Greece, California and parts of Canada, as well as widespread drought in Europe and Australia. In September, Hurricane Florence ripped through the Carolinas, causing tens of billions of dollars worth of damage.

And yet the first half of 2018 has been comparatively quiet catastrophe-wise – not only are losses lower than the same period last year ($36 billion compared to $64 billion), but they’re also well below the 10-year average of $125 billion. Natural catastrophes accounted for $34 billion of total economic losses worldwide, while manmade disasters made up the remaining $2 billion.

THUNDERSTORMS, HAIL

$1.4 billion

84

Number of natural disasters worldwide in the first half of 2018

48

Number of manmade disasters worldwide in the first half of 2018

3,900

4,600

Global fatalities due to catastrophic events in the first six months of 2018

Global fatalities due to catastrophic events during the same period in 2017 Source: Swiss Re Institute, August 2018

TOTAL LOSSES DOWN

MANMADE VERSUS NATURAL DISASTERS

Total economic losses due to catastrophes were down 44% during the first six months of 2018 compared to the same period in 2017.

The number of manmade catastrophes spiked in 2005 and gradually fell for several years before being overtaken by natural catastrophes in 2010. For the last decade, the number of natural disasters has remained high, while the number of manmade events has generally continued to decline.

$140bn

Manmade

Number of catastrophes

$100bn $80bn $60bn $40bn $20bn

160 120 80 40

17

16

20

20

15

14

20

20

13

12

20

20

11

10

20

20

09

08

20

07

20

06

20

05

20

04

20

03

20

20

02

0 20

Previous 10-year average

01

1H 2017

00

1H 2018

Source: Swiss Re Institute, August 2018

6

Natural

200

20

$0

Manmade

240

20

$120bn

280

Natural

Source: Swiss Re Institute, August 2018

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DISASTERS WITH THE LARGEST PRICE TAGS Storms made for by far the priciest disasters in the first half of 2018. The biggest insured natural catastrophe losses for property and business interruption were due to winter storms that hit North Central Europe and the Northeast US.

THUNDERSTORMS, TORNADOES, HAIL

Insured losses

Uninsured losses

$1.4 billion WINTER STORM FRIEDERIKE

$2.7 billion

WINTER STORM

$2.2 billion

THUNDERSTORMS, TORNADOES, HAIL

$1.4 billion

Source: Swiss Re Institute, August 2018; European figures estimated based on Perils AG; US natural catastrohpe figures with the permission of Property Claims Services

INSURED VERSUS UNINSURED

INSURED LOSSES DROP

According to Swiss Re, because most of the disasters in the first half of 2018 happened in areas with high insurance penetration, nearly 56% of all losses were insured. That represents an improvement on the first half of 2017, when only 47% of total economic losses were insured.

Total insured losses fell by 33% in the first half of 2018 compared to the same period last year, and by 43% against the 10-year average.

$500bn

$40bn

Insured losses

Uninsured losses

Natural

Manmade

1H 2017

Previous 10-year average

$450bn $400bn

$30bn

$350bn $300bn

$20bn

$250bn $200bn

$10bn

$150bn $100bn $50bn $0

$0 2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

(first six months only)

Source: Swiss Re Institute, August 2018

1H 2018

Source: Swiss Re Institute, August 2018

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28/09/2018 3:43:55 AM

UPFRONT

HEAD TO HEAD

What’s the biggest threat to marine insurance?

From unsustainable market conditions to newly emerging risks, marine insurance is facing a number of challenges

Anne Marie Elder

Chief underwriting officer, marine – the Americas XL Catlin “We’re our own worst enemy. For many carriers, the desire to grab business at any price has set underwriting discipline and business acumen adrift. Today’s marine market is filled with too much capacity, unsustainable rates, aggressive terms and conditions, and a push for more broker compensation.

It’s taken a hit on the marine market’s overall profitability. It has prompted Lloyd’s to deliver a stark message, warning marine syndicates to correct their unprofitable ways or they won’t be a syndicate for long. Unprofitable businesses do not stay afloat. Our clients need us to be there for the long haul.”

Anita Farmer

Mark Bernas

SVP and Northeast Series Marine Unit leader Lockton Companies

Executive vice president Sentinel Marine Underwriters/ AmWINS Group

“The biggest threat is emerging risk.

The increasing size and cost of vessels, infrastructure challenges across the entire transportation industry, cyber threats, and climate change are constantly evolving risks.

While experienced marine insurance professionals can navigate this changing environment, the next generation of marine insurance executives don’t have the experience or training to create solutions and mitigate these risks. It’s incumbent upon those of us with years of experience to ensure that we provide mentoring, training and guided experience for these individuals so they can assist their marine clients in preparing for the risks of the future.”

“Profitability. Due to ever-increasing risk factors, profitability of a portfolio of marine business is on a razor’s edge. Over the past several years, increased capacity, often coupled with inadequate terms, conditions and pricing, has the market teetering on continued unsustainable margins.

With record unprofitable results for 2018, following similar negative results in prior years, many carriers are asking, ‘What is the end game; how do we right the ship?’

In 2018, we have already witnessed several markets withdraw completely from writing marine coverages. We expect the pullback will continue. This seems to be the start of a long-overdue market correction.”

TAKING ON WATER This summer, Lloyd’s of London – which controls around 20% of the world’s marine insurance market – announced it was considering closing some of its loss-making marine syndicates. According to a London broker quoted in The Wall Street Journal, “The [insuring groups] have been asked to come up with a viable plan until the end of the month or risk closing down.” Reportedly, several syndicates have already downsized their marine business to the tune of approximately $100 million, and others are expected to make similar cuts. One of the most unprofitable line items is hull insurance, where brokers estimate premiums would have to double in order to be profitable. According to a second broker, “Only about 18 syndicates were profitable on hull insurance over the past three years, and around 50 were in the red.”

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UPFRONT

OPINION

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

Mentorship as a movement Mentorship can be the key to shattering the glass ceiling and fostering greater workplace equality, writes Margaret Resce Milkint IT’S NO secret that despite recent victories, a glass ceiling still persists in the insurance industry. There are simply not enough women at the leadership level, even though countless inspiring, talented and capable female insurance professionals stand ready. Mentorship is the key to raising these future female leaders, removing bias from the workplace and finally shattering that divide forever. It is our moment for pioneering women and enlightened men to use mentorship as a practical action to create workplace equality and reimagine the C-suite.

As a grassroots movement, mentoring has actionable purpose. Mentors and mentees form a bond – sometimes it’s short and laser-focused; other times it is a lasting relationship. I have experienced both, and both serve a crucial purpose.

If there is a catalyst to fuel shifting bias, to build leaders and to instill confidence, I believe mentorship is it. Mentors and mentees stand together to learn from one another, identify opportunities and ignite positive change. Meaningful dialogues among professionals of all levels are the foundation of an inclusive workforce.

As we reimagine mentoring, envision a set of shoeboxes stacked one atop the other. In the boxes, choose the shoes you need to find your match. The match you seek at this point in your career likely won’t be the same match you will need five years, one year or even 60 days from now. What do you need today?

Maybe it’s an opposite-gender mentor, a peer mentor, a reverse mentor, a family mentor or a tough-love mentor.

Cultivating and nurturing your mentor relationship so the match is easy and impactful is an art that takes intentionality and must be perfected. The most powerful collaborations are based on pure trust and unwavering honesty. They also require the courage to have difficult but necessary conversations. Honest, sincere connections allow us to develop ourselves and inspire change.

Mentoring and being mentored is quite

Lead with curiosity. Be a lifelong student.

Cultivate relationships, as they are the lasting treasures.

A male CEO mentor had the courage to teach me a valuable and lasting lesson that I call ‘the power of we and I.’ He shared that the all-male board I presented to perceived my use of ‘we’ in my examples and statements as a lack of personal accountability; I often ‘we, we, we’d’ myself out of consideration. Lesson learned: I gave myself permission to say ‘I’ and blend it with the collaborative, collegial ‘we’ that’s part of my personal DNA. Sometimes mentorship happens when you least expect it and you aren’t looking. Seize those moments! I am proud to say I have a new mentor: the energetic and iconic Edie Fraser. As a pioneer in diversity and inclusion, she founded Million Women Mentors [MWM] and STEMconnector and was the founder of Diversity Best Practices before that.

I encourage the broader industry to join her global MWM movement, which already has more than 2.3 million commitments to mentor,

“If there is a catalyst to fuel shifting bias, to build leaders and to instill confidence, I believe mentorship is it” personal; setting frameworks for communication, goals and expectations is key. My top tips for mentoring magic: Be open to a mentor or mentee who does not look, act or feel like you. This is often the best kind!

Show up with transparency. Honesty is the backbone of this relationship.

Practice gratitude.

Share the wisdom and lessons. Be brave and tell your personal stories. It’s in this vulnerability that lessons are learned and victories are celebrated.

Set expectations, guardrails, boundaries and goals.

Follow up, care, nurture and push.

Deliver on your promises.

Be gentle with each other. There is no ‘perfect’; there is only a journey.

sponsor, provide interns and build women into and up the system for great careers.

High on my personal wish list for the insurance industry is data to support our story and to frame our go-forward agenda as we strive for gender parity in the C-suite and other leadership roles. We have a moment to come together to gather, share and publicize the success stories that will amplify our efforts.

This is a vocal and vibrant movement where women and men are joining forces to make a difference with each and every relationship and where each opportunity builds awareness and results.

Margaret Resce Milkint is a talent strategist and diversity and inclusion catalyst. She is a managing partner at The Jacobson Group, the leading provider of insurance executive search and staffing services.

www.ibamag.com

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28/09/2018 1:54:30 AM

UPFRONT

NEWS ANALYSIS

Head in the cloud The business of insurance is increasingly being done in the cloud as agencies and insurers race to build their tech capabilities and shield themselves against the impact of natural disasters

IT TOOK some time, but more and more businesses across the insurance industry are now hosting software in the cloud. Adoption of the technology is growing among both brokerages and carriers as the benefits of moving operations into the cloud become clear. According to Applied Systems’ 2018 Applied Digital Brokerage Annual Report, 65% of the 1,300 independent brokerages surveyed now use the cloud, even as digital technology adoption overall has remained stagnant from year to year.

“There are business reasons why it makes sense,” says Michael Howe, vice president of product management for Applied Systems.

“Often, the economics of being in the cloud

Handling software upgrades and managing IT equipment are difficult things to do, especially for agencies that know insurance, but might not have the expertise to maintain all the systems running in the background. Howe explains that with the cloud, that work is outsourced to vendors who can better manage items such as data security than a small agency could internally.

While large P&C insurers might have the capacity to handle the IT side of the business, their urgency to move operations into the cloud is driven by a need to increase or maintain profitability while expanding their risk pool.

“A large portion of the insurance market,

“The economics of being in the cloud are better than they are when you’re trying to host and maintain everything yourself” Michael Howe, Applied Systems are better than they are when you’re trying to host and maintain everything yourself. There are technology and operational benefits as well. Giving people anytime, anywhere access to their information and having system availability is really important to agencies, and the cloud can often deliver better uptime performance.”

10

regardless of where in the world you’re talking about, is uninsured against risks, and a number of the risks are not ones that they currently insure or face,” says Alex Naddaff, chief cloud officer at Guidewire Software. “As they keep expanding their book or diversifying their risk in the areas where they provide coverage, it’s very

important that they maintain profitability, or in some cases increase it, and in some cases selectively grow.”

To do that, insurers need to be on top of innovation and adapt quickly to stay ahead of competitors while meeting consumers’ expectations, which are being driven by their experiences shopping for other goods and services.

On the back end, the cloud is a subscription model that keeps businesses current.

If an insurance company is responsible for staying on top of their software upgrades, they might fall by the wayside, but via a cloud platform, the firm gets upgrades as soon as the cloud vendor is able to release them. The technology also improves accessibility to various integrations that open the doors to new vendors and partnerships.

Then there’s the issue of business continuity: As hurricanes pummel the US and wildfires throughout the West, it’s a crit-

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28/09/2018 1:54:49 AM

INSURANCE IN THE CLOUD

The cloud continues to be the top choice among brokerages for software hosting – 66% of brokerages in the US have adopted the technology

Brokerages that complete a digital transformation see an average of 156% higher revenue per employee compared to brokerages that don’t transform

The number of insurers using cloud computing has tripled in recent years; 70% now use the technology for at least part of their operations

ical issue agencies must face. While physical documents are easily damaged by the elements, files held in the cloud are safe from harm, and an agency that needs access to this information to help affected policy-

with a few challenges that could stand in the way of a successful transition.

“What a carrier is doing when they trust a cloud provider is they’re saying, we’re going to take something we’ve done internally and

“What a carrier is doing when they trust a cloud provider is they’re saying … we’re going to delegate responsibility to you” Alex Naddaff, Guidewire Software holders can log into its network anywhere.

“If you are a business and your computer servers are down the hallway in the closet, and your business gets destroyed by a tornado, that is a problem,” Howe says.

Despite the benefits that insurance companies stand to gain from moving to the cloud, there is potential for missteps, along

we’ve spent a lot of money to do and a lot of effort, and we’re going to delegate that responsibility to you,” Naddaff says.

In addition, the pace of change that ramps up when a carrier or agency is on the cloud requires a significant change management effort within a company, which has reverberations for the bottom line.

Around 10% of insurers run their entire infrastructure on the cloud Sources: Applied Systems, Novarica

“The kinds of costs that come into play are usually around change management in the agency itself,” Howe says. “If you’re going from being on-premises where you have the staff, the servers, the facilities, the network – all this kind of stuff to try to do that yourself – to making a transition where all of that is hosted in the cloud for you somewhere else, that requires changes to people, processes, technology – basically how the business is run every day at the agency. The net result once you’re up and in the cloud is preferable, but the main cost is in the transition of going from A to B.”

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28/09/2018 1:54:57 AM

UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Allstate

InfoArmor

InfoArmor provides employee identity protection

Apollo Global

Aspen Insurance

Aspen went up for sale in March after it posted a $266 million loss

Berkshire Hathaway

Paytm

The global conglomerate has reportedly purchased a stake in India’s largest payment services provider

Fidelity National Financial

Stewart Information Services Corporation

Regulators have given approval for the $1.2 billion acquisition

Hub International

Harman Agency

Idaho-based Harman Agency specializes in crop, livestock, and farm and ranch insurance

Markel Corporation

Nephila Holdings

Nephila is a leading manager of insurance-linked securities

Munich Re

relayr

The software company is valued at $300 million

RGL Forensics

Baker Tilly

The merger of financial investigator RGL with accounting firm Baker Tilly will allow both companies to better service the insurance industry

Seeman Holtz Property & Casualty

Ritman & Associates

Indiana-based Ritman & Associates specializes in professional liability insurance for attorneys

Hiscox introduces commercial flood cover

Specialist insurer Hiscox has announced the launch of a new product for US commercial flood risks. FloodPlus Commercial provides small to medium-sized businesses with flood insurance that includes business interruption coverage and features limits of up to $2.5 million (more than double the limits offered by the National Flood Insurance Program). Available to businesses through Hiscox’s US coverholders, the product delivers an easy online buying process, allowing customers to get a quote and bind a policy within minutes.

Capsicum Re takes on ‘silent’ cyber risk

Markel targets ILS dominance

Markel Corporation has entered into an agreement to acquire all outstanding shares of Nephila Holdings, a top insurance-linked securities manager. Nephila has more than $12 billion in assets under management for more than 300 investors. Markel and Nephila’s combined assets under management will stand at about $19 billion, representing 20% of the insurance-linked securities space.

“The addition of Nephila to Markel’s insurance, reinsurance, insurtech, fronting and existing insurance-linked securities capabilities will enhance and strengthen the breadth and depth of Markel’s offerings to policyholders, producers and investors,” said Richard Whitt, co-CEO of Markel.

12

Global reinsurance broker Capsicum Re has partnered with catastrophe modeling firm AIR Worldwide to take on ‘silent’ cyber risk, which Capsicum Re defines as risks that are not specifically included in or excluded from policy wordings. The collaboration will give Capsicum Re access to AIR Worldwide’s cyber data insights to allow it to more easily quantify and assess cyber risks. “Our goal is to better advise insurers and reinsurers about the nature of cyber risk and help the industry develop innovative risk-transfer solutions that truly reflect the underlying risk exposure,” said Capsicum Re’s Ian Newman.

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28/09/2018 1:55:33 AM

PEOPLE Lloyd’s makes move into cryptocurrency realm

Lloyd’s of London has entered the cryptocurrency market by offering a milestone policy to Kingdom Trust, which provides custody services for more than 30 different crypto assets.

“Qualified custody by a regulated, insured financial institution is a top priority and critical hurdle for institutions to invest in the digital asset markets,” said Kingdom Trust CEO Matt Jennings. “By adding another trusted specialist like Lloyd’s to our platform, we’re ensuring that current and future clients will have access to a highly secure, complete safekeeping solution tailored to meet the challenges of institutional finance.”

Prudential launches directto-consumer model

Insurance giant Prudential has unveiled a new direct-to-consumer service called LINK by Prudential. For the first time in Prudential’s 143-year history, customers will be able to buy products directly through LINK or with some help from remote advisors.

LINK will offer personalized financial planning, as well as recommendations for insurance, annuities and investments in a portfolio of exchange-traded funds.

Naveen Agarwal, Prudential’s chief customer officer, told Reuters that LINK will provide customers with “a seamless experience.”

New insurance offering protects dairy farmers

American Farm Bureau Insurance Services [AFBIS] is launching a new product designed to support dairy farmers by covering potential revenue loss. AFBIS worked with the American Farm Bureau Federation [AFBF] over a period of two years to develop the Dairy Revenue Protection insurance policy, which will be available in early October. “[The policy] moves and functions to protect against revenue declines, and what would drive the changes in the dairy farmer’s revenue would be changes in US [dairy] prices … that ultimately determine the farm value of the product,” said AFBF chief economist John Newton.

NAME

LEAVING

JOINING

NEW POSITION

Jennifer Chang

Zurich American Insurance Company

Markel Corporation

Underwriter and senior risk analyst

Brian Dowd

N/A

Partner Re

Chairman of the board of directors

Philippe Gervais

Europ Assistance Belgium

Generali Global Assistance

President, travel insurance division

James Hamilton

N/A

AXIS Insurance

Global head of accident and health insurance

Connie Hill

Marsh

Lockton

Personal lines leader, Signature Client Group

Dennis Kearns

N/A

QBE North America

Head of distribution and major trader partner engagement

Ross Nottingham

N/A

Hiscox

Chair of Hiscox Re & ILS

Robert R. Ruff

Unum

Aflac

Senior vice president of strategic growth

Arash Solemani

Keefe, Bruyette & Woods

Heritage Insurance Holdings

Executive vice president and director of investor relations

Matt Taylor

N/A

Farm Bureau Insurance of Michigan

Vice president of marketing

Vincent Vandendael

Lloyd’s of London

Everest Insurance

CEO, Everest Insurance International

Hiscox Re & ILS names new North America chair

Specialist global insurer Hiscox has announced the promotion of Ross Nottingham to chair of North America for Hiscox Re & ILS, where he will lead Hiscox Re’s North American underwriting team and strategy. Nottingham joined Hiscox Re & ILS in Bermuda in 2012 as an underwriter.

In 2014, he transferred to the UK to lead the Hiscox Re North America team in London.

“Ross’s valuable insight and eye for innovation are exactly what we need to continue the success of our North American book,” said Mike Krefta, CEO of Hiscox Re & ILS. “He has a very strong track record of success at Hiscox Re & ILS.”

Everest taps Lloyd’s exec as international CEO

Everest Insurance has named Vincent Vandendael as CEO of Everest Insurance International to lead all facets of Everest operations outside North America. Vandendael has 20 years of industry experience, most recently serving as chief commercial officer at Lloyd’s of London, where he was responsible for all business development. He also led Lloyd’s global network of 31 offices, which support Lloyd’s licenses to operate in more than 200 territories across the globe.

“Bringing someone of Vincent’s caliber and expertise to our seasoned team of industry veterans furthers our ability to execute upon our strategy of building the premier modern-era specialty global insurer,” said Jonathan Zaffino, president and CEO of Everest Insurance.

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UPFRONT

WORKERS’ COMP UPDATE NEWS BRIEFS NCCI proposes double-digit WC rate cut for Florida

The National Council on Compensation Insurance [NCCI] has proposed an average 13.4% rate reduction in workers’ compensation insurance in Florida for 2019. If approved by the Florida Office of Insurance Regulation, the reduction would follow a 9.5% decrease that took effect this year.

“Consistent improvement in loss experience is the primary driver underlying the filing,” the NCCI said.

The council also noted that the proposal is in line with rate trends observed in other states.

Atlas General offers workers’ comp for the cannabis industry

Atlas General Insurance Services, in partnership with Accredited Surety and Casualty, has introduced a new workers’ compensation program for California’s cannabis industry, covering all types of businesses, from growers and extractors to packaging, warehousing and distribution, transportation, and dispensaries.

“We recognized the opportunity to be proactive in entering the cannabis market and are excited to be one of a few workers’ comp platforms in the state,” said Atlas General CEO Bill Trzos.

The insurer plans to eventually roll out the offering to other states that have legalized cannabis.

Texas workers’ comp division undergoes digital transformation

After a two-year digitizing operation, the Texas Division of Workers’ Compensation [DWC] now has a completely paperless claims department. By clearing out the warehouse where it has stored injured

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employee claims since 1992, the DWC will save $300,000 a year in storage costs while improving data security and making it faster and easier to fulfill records requests from the public. “From the very beginning, the goal was to use new ideas and approaches to improve customer service while reducing costs,” said Texas workers’ compensation commissioner Cassie Brown. “This project has done both.”

Tennessee workers’ comp rates to decrease by almost 20%

The National Council on Compensation Insurance [NCCI] has proposed a 19.1% workers’ compensation rate decrease for the state of Tennessee – the most significant recommended decrease since the state passed workers’ compensation reforms in 2013. The Tennessee Department of Commerce & Insurance reports that NCCI filings have seen loss cost reductions of more than 36% since the reforms were introduced. The organization filed for a 12.6% rate reduction last year and a 12.8% decrease in 2016. If approved, the 19% rate decrease would go into effect on March 1, 2019.

Double-dipping workers’ comp fraudster sentenced

Texas Mutual Insurance Company has reported that Gary Hunt of Austin was convicted of a Class A misdemeanor and sentenced to a one-year deferred adjudication for defrauding the insurer.

While working as a sales coach for Radiant Plumbing, Hunt reported a job-related injury and claimed he was unable to work, according to Texas Mutual. However, it was later discovered that Hunt was working as a consultant for another company. In addition to the deferred adjudication, Hunt was ordered to pay $8,192 in restitution to Texas Mutual.

Not a victimless crime One insurer is fighting back against a worrying trend in workers’ comp – and brokers can help Workers’ comp fraud costs the US more than $7 billion annually, according to data compiled by the National Insurance Crime Bureau [NICB]. The NICB also reports that workers’ comp fraud is the fastest-growing type of insurance fraud in the country.

That’s due in part to the perception that people are “committing a victimless crime against a big, faceless insurance company,” explains Jeremiah Bentley, VP of marketing and customer engagement at Texas Mutual Insurance Company. “Either fraudsters feel they’re not getting value out of the premium paid to the insurer, or they feel they’ve been mistreated in some way. In fact, some people just see insurance fraud as an opportunity to help themselves financially without producing any harm, because they don’t see the insurance company as a victim of their crime.”

Texas Mutual has a dedicated internal fraud department that investigates the three main types of workers’ comp fraud: claimant, healthcare and premium fraud. In 2017, the insurer identified more than $6 million in fraud, 12% of which was attributable to claimant fraud, 16% of which was due to healthcare fraud and 72% of which was premium fraud.

“Claimant fraud is the most frequent type of fraud in terms of number, but it tends to have a lesser financial impact than healthcare fraud or premium fraud,” Bentley says. “What we tend to see on the claimant fraud side are workers who get time off and receive benefits after a legitimate injury, but during that injury time, they start earning another source of income,

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either independently or through another job, and they fail to report that back to the insurance carrier. So, they’re collecting workers’ comp benefits for being too injured to work but are also collecting a paycheck on the side.

make sure they’re recovering well, but also to keep an eye out for the red flags of fraud.”

An injured worker can’t create fraud on the same scale as a healthcare provider deploying an organized billing scheme or an

“Brokers can play a more active role in the fight against premium fraud by helping employers understand the importance of fairness and accuracy, and how that protects the system as a whole” “On the claimant fraud side,” he continues, “it’s important for employers to create safety programs that encourage return to work and also thoroughly investigate accidents and injuries when they do occur. It’s important for employers to stay in contact with injured workers throughout the process in order to

employer under-reporting risk, which is why premium fraud tends to account for such a large proportion of the total dollars lost to fraud. A typical example of premium fraud would be an employer claiming employees are actually independent contractors in order to avoid paying higher insurance premiums.

“When somebody under-reports payroll or under-reports a risk, they’re often gaining an unfair advantage against other honest companies competing for contracts and jobs in a specific market,” Bentley explains. “Brokers can play a more active role in the fight against premium fraud by helping employers understand the importance of fairness and accuracy, and how that protects the system as a whole.

“Brokers are closely tied to the employers,” he adds. “They know their operations front to back, and they’re trusted advisors and supporters of the business. Sometimes there are gray areas, but brokers can give employers advice that helps them stay out of trouble.”

Safety National’s approach to providing superior customer service distinguishes us in the marketplace. With a culture built on relationships and over 75 years of expertise to design creative solutions, our customers can trust that we have their specific interests in mind.

How can we help?

Contact us to learn more about the tremendous value of a Safety National partnership.

SafetyNational.com | 888.995.5300

OUR PRODUCTS Workers’ Compensation: - Excess - Large Deductible - Large Guaranteed Cost Commercial Auto

Commercial General Liability Public Entity Liability: - Law Enforcement Liability - Public Officials Liability - Educators Legal Liability

Cyber Risk Reinsurance Loss Portfolio Transfers Captive Services Self-Insurance Bonds

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28/09/2018 1:56:26 AM

UPFRONT

TECHNOLOGY UPDATE

Unlocking a better customer experience A self-proclaimed ‘digital general agency’ opens opportunities for brokers to better serve clients

personal and commercial lines or in the life and health industry – but now they can use this digital store technology to expand their portfolio, generate additional revenue and commission opportunities, and establish a completely digital experience for their customers.”

Harrigan adds that this technology helps to eliminate the traditional siloed approach in the industry, where consumers used different brokers for home and auto insurance, life insurance, and small commercial. “The

“The digital environment is allowing brokers to bring [a] portfolio approach to their clients”

Today’s consumers expect insurance brokers to be able to provide a tech-enabled shopping experience – but that’s something many brokerages might consider beyond their scope.

“The insurance industry across its entire ecosystem has traditionally been very manual, analog and paper-based,” says Brian Harrigan, founder and CEO of InsurIQ. “Migrating insurance workflows to a fully automated digital ecosystem will provide a better experience for everyone involved – from the carriers to the distributors and the consumers.”

NEWS BRIEFS

A tech provider for the insurance industry, InsurIQ specializes in solutions that enable brokers to create stronger bonds with clients and to meet more of their needs. For example, its InsurStore technology is a multi-product platform that brokers can brand and put on their websites in order to provide “an Amazon-like insurance shopping experience,” Harrigan says.

“We’re helping brokers to have more of a portfolio view of business,” he says. “They all have their core products – whether that’s in

New management systems can free up data

More insurance agencies are updating their agency management systems as new products enter the market and upend now-outdated ways of managing data. “Traditional management systems lock users’ data inside of them,” said Laird Rixford, CEO of Insurance Technologies Corporation.

“That’s why you’re seeing a lot of agencies and brokers switching management system vendors because they’re looking to free their data … so they can use it in their rating platforms, marketing platforms, business analytics and intelligence platforms.”

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consumer shouldn’t have to work out how to navigate the insurance industry,” he says. “They should be able to go to their trusted broker to meet all of their needs. The digital environment is allowing brokers to bring this type of portfolio approach to their clients.”

Harrigan explains that because the traditional insurance distribution chain has been quite rigid and vertical, brokers have never really had the opportunity to bring a portfolio of products to their customers.

“With InsurIQ, we’re trying to get the message across that brokers have the ability to leverage their pre-existing relationships with an insurance-buying client base to provide a more holistic shopping experience that will meet more of a client’s needs,” he says.

Insurance veteran tapped to advise AI firm

CLARA Analytics, an artificial intelligence and data science company serving the insurance industry, has appointed industry veteran Ruth Estrich to its advisory board. Estrich has been in the industry for 45 years, serving in senior roles at MedRisk, Liberty Mutual, Wausau Insurance and CNA. “Ruth is a remarkable leader who joins in our mission of improving claims outcomes and dramatically bringing down loss costs in claims operations through easy-to-use AI,” said CLARA founder Jayant Lakshmikanthan.

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Q&A

John Simpson CEO

Insurance certificates made easy

PATRA CORP.

What prompted Patra to create CertVault?

Years in the industry 14 Fast fact Patra recently launched CertVault, a cloud-based insurance certificate repository and delivery system that can be used by any party or organization needing access to the certificate

Patra started almost 14 years ago and since has become one of the largest certificate issuers in the country. From day one, I could see the need for a national cloud-based repository to house all of these certs because there are so many constituents that might need access to a certificate once it has been generated. With the spotlight on security and automation, the insurance industry is looking for a technology-driven certificate solution, and CertVault is our answer to that.

Why should brokers be interested in CertVault?

The solution replaces traditional certificate delivery methods like fax, mail and email, with a complete one-stop cert delivery solution in a blockchain-secured environment. Our long-term goal with CertVault is to create a national database of holders and contact/ delivery information. This will enable faster transactions, better service, and will eliminate the printing and mailing that currently dominates certificate delivery today.

CertVault is also more economical, convenient and secure than the processes used today.

Why is Patra investing in insurtech now?

We’ve been investing in and leveraging technology since our inception. The spotlight is fixed on insurance technology right now, and we’re looking to become more forward-facing with the technology solutions we can provide to our customers. Blockchain technology

Insurtech startup targets low-risk consumers

Startup Halos Insurance has announced plans to build a product designed specifically for low-risk and accident-free consumers, which founder and CEO Satadru Sengupta says make up more than 80% of insurance consumers. “They pay a substantial premium year after year, play by the rules, live a responsible and communityfriendly life, and almost never submit claims,” Sengupta said. The Washington, DC-based startup is participating in the MetLife Digital Accelerator program to fast-track the product’s launch.

is really important for CertVault because it provides a very secure environment, which will give people comfort that the certificates in the national database have not been altered.

Do enough people understand and trust blockchain technology?

Blockchain, just like artificial intelligence, is one of those things that’s trending, but not many people fully understand it. There’s a lot for people to learn about the benefits of blockchain and AI. I think people are looking for companies that are using these technologies in applications that are useful for them so that they can learn about the technology while knowing it’s in their best interests.

What advice do you have for brokers who don’t know where to start with technology?

My first piece of advice would be not to bury your head in the sand. Learn about what’s out there and start finding small projects that you can apply to your organization. If you’re concerned that you don’t have a lot of technology knowledge, test the waters in small chunks to see what works for your business.

Using CertVault is a great way to do that. You can send in one certificate, or you can send in 10 and see how it works. Find organizations like Patra that are willing to partner with you as you invest in technology, rather than just be your vendors. That partnership is key.

European insurers most interested in blockchain

Thomas Mason, a research analyst at S&P Global Market Intelligence, has examined global insurance firms’ call transcripts to gauge their interest in blockchain. Mason found that European insurers discussed blockchain technology the most on conference calls. Europe bested all other regions with 15 calls that mentioned blockchain, followed by the US and Canada, which had eight. Mason posited this could either mean that US insurers are taking a ‘wait and see’ approach or are just more secretive about their blockchain plans.

New Farmers CIO has high hopes for AI

Paul Wilson, the recently appointed chief information officer at Farmers Insurance, believes artificial intelligence can help the company reach even greater heights. Speaking with The Wall Street Journal, Wilson outlined how AI and data analytics can be used to not only enhance the claims process, but also to improve the jobs of Farmers’ employees.

He added that he envisions the insurance purchasing experience eventually achieving the same level of convenience as an online store like Amazon or eBay.

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28/09/2018 1:56:56 AM

PEOPLE

INDUSTRY ICON

KEEPING PACE WITH CHANGE Midlands Management COO Richard Bird tells IBA’s Alicja Grzadkowska how the MGA and wholesale broking business is changing, and what firms in the space need to do to ensure long-term success

RICHARD BIRD’S trajectory in the insurance industry began when he was fresh out of school and, like many young graduates, trying to determine what career path would best suit his interests and talents. His first foray into the business was as a reinsurance technician in London, where he soon came to the conclusion that this was the industry for him.

“Very quickly I realized that insurance does impact so many parts of everyday life for individuals and companies,” he says. “The other area that really did strike me was the vast array of different career paths within the insurance industry, and that really kept me interested in the insurance world from day one.”

Five years later, Bird began to sample some of those varied career paths as he moved into the broker side of the industry and began focusing on accident and health, as well as excess workers’ compensation. One moment that stands out to him from this time was how the industry responded to the 9/11 terrorist attacks.

“It impacted the market worldwide, and London was no exception,” he says. “It really changed the way we dealt with risks in London. Probably the biggest immediate impact was the focus on concentrations of risks.”

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In total, Bird spent 18 years in the London market, building up experience working with and eventually managing teams of other brokers and technicians for Gallagher’s UK arm. During much of this time, Midlands Management was one of Bird’s clients, as the company had a significant focus on the

made the move to Midlands, and he’s seen his fair share of both developments and hurdles in the workers’ comp marketplace.

He highlights the value an MGA can bring to clients as a central challenge and opportunity facing the business today.

“The biggest challenge for the MGA

“We have to divorce ourselves from just providing coverage. We have to really provide ... as much of the additional services that a carrier would traditionally offer. We have to be viewed as a carrier in terms of the effort we put into writing and maintaining our clients” London markets and expertise in excess workers’ comp.

“In 2007, when I was asked to join the team, it was a perfect fit for myself and Midlands, and I jumped at the opportunity,” Bird says. Today, he serves as chief operating officer for the MGA and wholesale broker.

Under the hood of workers’ comp More than a decade has passed since Bird

and the wholesaler is really adding value to placements and proving your worth,” he says.

“Traditionally, an MGA has been an expert in a product, and that’s how they aggregate business and service the agent’s needs. I do think a big part of our job is to help agents deliver the right coverage for their clients, so we are trying to act not only as the underwriter, but also, through our expertise, to assist the agents in delivering the best

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PROFILE Name: Richard Bird Title: Chief operating officer Company: Midlands Management Based in: Oklahoma City Years in the industry: 20 Fast fact: Bird was named to IBA’s annual Hot 100 list in 2017

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PEOPLE

INDUSTRY ICON

coverage at an appropriate rate.”

Bird emphasizes that value-added services in loss control and risk management are critically important to ensuring the longevity of an MGA. “We have to divorce ourselves from just providing coverage,” he says. “We have to really provide everything, or as much of the additional services that a carrier would traditionally offer. We have to be viewed as a carrier in terms of the effort we put into writing and maintaining our clients.”

Midlands steps up to the plate when it

“The fact that data is so readily available is having a major impact,” he says, “when you’re using things like artificial intelligence to try to predict a loss that may seem reasonably benign or run-of-the-mill but has potential to increase dramatically over time.”

To take advantage of this new capability, Midlands has been implementing technological updates internally to keep pace with digital transformation.

“Most of our digital rollout has been internal analysis of our own data to try and project or predict claims that we feel may

“The fact that data is so readily available is having a major impact, when you’re using artificial intelligence to predict a loss that may seem reasonably benign ... but has potential to increase dramatically over time” comes to offering these added services. It has a dedicated risk management department and training tools aimed at excess workers’ comp clients. The company also boasts a library of webinars and videos that its risk managers can use when visiting clients to pass along crucial information to help them mitigate risk.

Clients, in turn, are requesting more face-toface training to drive those risk management lessons home, particularly those with first responder exposure who want further vehicle and firearm education.

“My observation, certainly in the last year or two, is the increasing utilization of those services that we have offered for a number of years,” Bird says. “That’s the biggest thing that has struck me within our book of business.”

Onward and upward Another key development Bird has witnessed rippling through his line of work is the increased use of Big Data.

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grow individually or aggregate on a book of business,” Bird says, adding that Midlands has been doing this for close to eight years now. “It’s not brand-new to us, but it’s something that we’re constantly tweaking, and we are very much exploring artificial intelligence capabilities at this stage.”

As the excess workers’ comp market continues to evolve, ensuring that clients can keep their employees safe and get them back on their feet after an incident is at the heart of Midlands’ work.

“I actually think it’s a very exciting period for us,” Bird says. “By nature, our insureds get a better outcome when their claims costs are low, and we are seeing that [when] employers are willing to help push employees into a better loss care and treatment program, [that] ultimately does give a better outcome for that individual employee – and usually, financially, it is positive for the employer as well.”

MIDLANDS MANAGEMENT

BY THE NUMBERS

1990

Year that founder and CEO Charles Caldwell planted Midlands’ roots

5

Number of years in a row Midlands was named one of the fastest-growing companies by the Oklahoma City Chamber of Commerce

1993

Year that Midlands expanded into Texas

103

Number of employees across Midlands’ two locations

45,000+

Combined square footage of the company’s offices in Oklahoma City and Dallas

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2018

PRESENTED BY

A M E R I C A

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SPECIAL REPORT

ELITE AGENCIES 2018

AGENCIES 2018

What makes an agency one of the best in the business? From exceptional client care to training initiatives and community involvement, these 35 agencies are setting the standard ACROSS THE US, thousands of insurance agencies and brokerages service the needs of individuals and businesses, but few do it so exceptionally that they’ve earned the right to be called ‘elite’. IBA’s fifth annual Elite Agencies report spotlights 35 agencies that are attaining new heights while reshaping the insurance business of tomorrow.

Although the following agencies range in size, they all achieved $25 million or more in revenue last year, in addition to securing year-over-year growth halfway through 2018.

However, being an elite agency is about more than just transactions. From producer training initiatives and mentorship programs to community outreach efforts, IBA’s 2018 Elite Agencies define what it means to be the best in the business.

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COMPANY

PAGE

COMPANY

PAGE

ABD Insurance and Financial Services

23

Gallagher

28

Acentria Insurance

23

Gowrie Group

27

AHT Insurance

26

Graham Company

37

Alliant Insurance Services

25

Hays Companies

36

Ansay & Associates

36

Higginbotham

38

AssuredPartners Inc.

31

Hub International

36

Bolton & Company

27

Bouchard Insurance

33

IMA Financial Group Insurance Office of America

23 32

Brown & Brown Insurance

37

JLT Specialty USA

25

The Buckner Company

37

Leavitt Group Lockton Companies

26 25

Crane Agency

24

Marshall & Sterling Insurance

28

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ACENTRIA INSURANCE Destin, FL

In the past year alone, Acentria Insurance has experienced impressive growth, and now boasts 500 team members and 50 locations across the Southeast. In addition, Acentria took home the Insurance Employer of Choice Award at the 2017 Insurance

COMPANY

PAGE

NFP

30

Parker, Smith & Feek

34

PayneWest Insurance

32

Prime Risk Partners

34

PSA Insurance and Financial Services

30

Relation Insurance Services

33

Risk Strategies

24

Robertson Ryan & Associates

35

Shepherd Insurance

36

USI Insurance Services

35

VTC Insurance Group

38

Woodruff Sawyer

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Business America Awards and was named a 2018 Top Insurance Workplace by IBA. “Our leadership has empowered their team members to have a strong and positive corporate culture,” says Jessica Davis, Acentria’s SVP of marketing.

To live up to its goal of providing clients with the best service and affirming its independent status, Acentria has dedicated in-house marketing and claims departments that work closely with clients.

Its marketing department collaborates with commercial clients to co-brand master

ABD INSURANCE AND FINANCIAL SERVICES San Mateo, CA

ABD Insurance and Financial Services helps its clients anticipate and mitigate risks at every point, enabling them to

IMA FINANCIAL GROUP Wichita, KS

One hundred percent employee owned, IMA Financial Group has 700 associates – spread across its offices

insurance programs and produce safety newsletters for multi-family clients, while the claims department acts as a liaison between clients and carriers.

In addition to building their business internally, Acentria’s teams are dedicated to building the communities in which they serve. The company set up #AcentriaCares, a program that allows team members to support charities of their choice through volunteering, fundraising and more; to date, the program has donated more than $500,000 to nonprofit organizations.

envision, act on and achieve their business goals. With seven offices across California, ABD writes more than $600 million in premium volume annually and specializes in 14 industry sectors. Earlier this year, ABD launched its Circle of Care, which takes a thoughtful approach to employee health and injury management, helping organizations build cultures around wellness and safety.

in Colorado, Kansas, Michigan and Texas – who are empowered to provide customized solutions for clients’ varied and unique risk needs. In 2017, IMA was listed among the top 10 largest privately held employee-owned brokerages in the US

by Reagan Consulting.

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SPECIAL REPORT

ELITE AGENCIES 2018

RISK STRATEGIES Boston, MA

Founded in 1997 by CEO Mike Christian, Risk Strategies just celebrated its 20th anniversary with a rebrand from its former name, Risk Strategies Company. Risk Strategies was founded as a boutique risk management firm focused on alternative risk transfer for upper-middle-market clients. Today, the company’s experts help clients navigate insurance and risk management challenges across more than 25 practice areas, including employee benefits, executive liability, professional liability, environmental, life insurance, cyber risk, private client and more.

Throughout the years, Risk Strategies’ success has been fueled by both organic growth and strategic acquisitions, which have expanded its capabilities and offered access to new and broader markets and customers.

In addition, Risk Strategies has brought additional risk management and technical resources to its large account practice by emphasizing analytics, risk control and claim advocacy.

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CRANE AGENCY St. Louis, MO

Founded in 1885, Crane Agency has

witnessed the turning of two centuries in St. Louis and continues to thrive today by serving as an “advocate in an uncertain world.” From risk management to employee benefits and claims consulting, Crane offers a wide range of value-added products and thoroughly equips its brokers with the tools necessary to effectively tailor insurance programs to fit clients’ unique needs.

Crane’s brokers own their books of business, which differentiates Crane from most other independent

agencies because it allows brokers to focus on their clients. It also allows brokers to manage and grow their business by taking full advantage of the many resources Crane provides. In addition, the agency’s comprehensive training and development program enables both new and existing employees to excel in their career.

Crane has experienced exponential growth over the past three years by investing in technology and innovation, and 2018 has been particularly rewarding.

The agency was recognized as a Top Workplace by the St. Louis Post Dispatch, as one of the area’s largest employee benefits and insurance brokerage firms

by St. Louis Business Journal, and as the Face of Commercial Insurance and Risk Management by St. Louis Magazine.

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JLT SPECIALTY USA Denver, CO

Serving 6% of the Fortune 500, JLT Specialty USA is one of the fastestgrowing specialty brokers in the US. JLT Specialty has more than 300 employees across 17 locations in the US and Bermuda, and has added over a thousand new clients in the past two years.

ALLIANT INSURANCE SERVICES Newport Beach, CA

WOODRUFF SAWYER San Francisco, CA

As one of the largest brokers in the Bay Area, Woodruff Sawyer looks after the risk needs of more than 4,000 corporate clients. The agency’s mission is to be the best risk advisor by building deep expertise and extending personalized service while maintaining fierce advocacy to allow each client to achieve peace of mind.

Accordingly, Woodruff Sawyer has spent the past year appointing new leadership and expanding the leadership structure for its New England office, which has doubled in size within the last two years.

Woodruff Sawyer is an IIABA Best Practices Agency and was a Corporate International Global Awards winner in 2017.

Boasting more than 100 offices nationwide, Alliant Insurance Services is one of the country’s fastest-growing insurance agencies. Established in 1925, Alliant has experienced significant growth across all of its groups: specialty P&C, middle-market P&C, employee benefits, retirement and underwriting.

“We encourage leadership among all of our employees and execute an eye toward growth and stability, facilitating opportunities for all of our team members to lead the way in our industry,” says Lynda Lane, Alliant’s SVP and corporate director.

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SPECIAL REPORT

ELITE AGENCIES 2018

AHT INSURANCE Leesburg, VA

Throughout its history, AHT Insurance has maintained a consistent record of innovation and leadership. In the past 12 months, the firm has implemented a few initiatives that have contributed to steady growth. To bring more focus on high-achieving producers, AHT initiated the Century Club. Producers who meet

LEAVITT GROUP Cedar City, UT

Led by executive chairman and CEO Eric Leavitt, Leavitt Group believes in operating with integrity and transparency, seeking to partner with individuals who share its values. Leavitt Group started as a single agency in Utah in 1952; in the 66 years since, the company has partnered with local

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certain objectives by the end of 2018 will celebrate their success in February 2019 by joining fellow Century Club members on a trip to Jamaica.

AHT also implemented a new website, intranet and marketing materials, including the integration of Salesforce and social media marketing campaigns, and a design aimed at a more compelling, intuitive experience for clients, prospective clients and other stakeholders. AHT’s web services buildout continues to explore,

develop, design and deliver innovative client-facing web-based service offerings that focus on ease of use, choice and an intuitive experience.

At the corporate and employee level, AHT gives back to communities through various initiatives, including its annual charity golf tournament, which raises more than $50,000 annually for local nonprofits, and its college scholarship, which is awarded to an outstanding high school graduate selected by local educators.

agents to jointly own and grow independent insurance agencies, and today boasts more than 140 locations nationwide.

Since 1989, Leavitt Group’s consolidated revenues have climbed from $8 million to $250 million, and its profitability ratios remain above industry average. Leavitt Group’s clients benefit from competitive, sophisticated insurance and risk management solutions, delivered by a team with a wide range of experience, many of whom are considered regional and national leaders in their respective fields.

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28/09/2018 6:26:13 AM

BOLTON & COMPANY Pasadena, CA

Bolton & Company’s success has been dependent on fostering an environment where its team of professionals can continuously grow, develop and thrive in their roles to support clients of varying sizes, industries and communities.

Bolton’s Producer Development Program is designed to bring developing talent to the level of proficiency needed

to become a successful producer. Along the way, the company provides periodic assessments to make sure these individuals get up to speed faster.

Committed to providing an environment that supports employee safety and health, Bolton promotes a culture of wellness through a number of initiatives and perks, such as gym membership discounts, a supply of healthy food, and a series of fun activities and wellness campaigns that promote fitness. Bolton also provides a performance-based bonus program for

employees throughout the year that is driven by both the firm’s success and the individual goals of each employee.

In addition, Bolton provides employees with volunteer time they can use to support a charitable effort or cause of their choice. The Bolton Foundation, the firm’s philanthropic arm, offers a number of volunteer and engagement opportunities for employees throughout the year that enable them to give back to the community, including the annual Throw Down cornhole tourn­ament fundraiser.

Boasting more than 175 professionals spread across its offices in Connecticut, Massachusetts, Rhode Island, Maryland and Georgia, Gowrie Group has strategically expanded its footprint into key areas, including the purchase of a specialty

environmental liability agency in 2017. In addition, Gowrie has bolstered its sales team by hiring individuals with sales backgrounds and knowledge in core segments and then training them to become insurance professionals.

GOWRIE GROUP Westbrook, CT

Gowrie Group was founded more than 40 years ago as a boutique broker armed with a mission to protect boat owners. Led by a group of experts in both insurance and sailing, the company has become one of the largest marine specialty independent agencies in the US. Its Burgee Program, spearheaded by chairman and CEO Carter Gowrie, is the only comprehensive insurance program developed to meet the needs of all types of sailing organizations.

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SPECIAL REPORT

ELITE AGENCIES 2018

GALLAGHER Rolling Meadows, IL

MARSHALL & STERLING INSURANCE Poughkeepsie, NY

Established in 1864, Marshall & Sterling Insurance offers a comprehensive and transparent approach to risk management by providing a complete

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As one of the most renowned insurance brokerages in the world, Gallagher is pressed to keep racking up awards and

accomplishments and stretch and grow its business portfolio. A year ago, the company underwent a brand refresh; its retail P&C and benefits operations are now known simply as Gallagher to increase brand recognition.

From 2017 to 2018, Gallagher was recognized as Insurance Broker of the Year, Group Risk Advisor of the Year and a top Best Culture company, and retained its position on the Ethisphere Institute’s World’s Most Ethical Companies list for the seventh consecutive year. Gallagher also signed a multi-year partnership to become the official insurance brokerage, benefits and risk management services partner of the Chicago Cubs, which included the right to rename The Park at Wrigley as Gallagher Way. Gallagher has also been busy with acquisitions. In 2017, it completed 39 transactions, more than half of which were within its US retail P&C and benefits operations. The company made another 18 acquisitions during the first half of 2018.

support team for each client and account.

Certified insurance counselors, risk managers and financial planners all work together to provide clients a clear understanding of their total cost of risk.

An employee-owned company, Marshall & Sterling handles more than $900 million in premiums, represents over 200 carriers and maintains a block of business at Lloyd’s of London. The company offers commercial,

personal, equisport and specialty risk insurance, in addition to group benefits, loss control and wealth management.

Specializing in niche areas, Marshall & Sterling is a member of and insurance provider to various organizations, including the National Pawnbrokers Association, Independent Armored Car Association, National ATM Association, Secure Cash and Transit Organization, and more.

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2

0

11

20 1

8

0,000

$1,000,00

One billion in revenue in just seven years.

And we’re just warming up.

assuredpartners.com

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SPECIAL REPORT

ELITE AGENCIES 2018

PSA INSURANCE AND FINANCIAL SERVICES Hunt Valley, MD

Since 1928, PSA Insurance and Financial Services has been in the business of asset management and protection by providing risk management and insurance solutions. The company has

NFP New York, NY

Over the past year, NFP has experienced purposeful and strategic expansion by strengthening its core business competencies, generating organic growth and reaching out into new areas, including acquiring 36 new firms and achieving year-over-year revenue growth of more than 10%.

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been ranked among the largest P&C brokers and investment and employee benefit firms by the Baltimore Business Journal and was one of The Daily Record’s top three Employee Benefits Companies for 2018.

Committed to partnership, PSA built its PSA Partnership Program to have a direct positive impact on clients’ businesses.

Recently, PSA partnered with InsureOne to strengthen its employee benefits and commercial insurance offerings and widen

its reach in the Mid-Atlantic region. By expanding its employee benefits division with health risk management, which combines data analytics and clinical nurse intervention, PSA offers clients a different and effective way to control healthcare costs. The company has also expanded its cyber insurance and cyber risk management division to ensure the safety of clients’ businesses before and after a cyber breach.

Since going private, NFP’s management philosophy has rejected the idea of ‘shorttermism’ by taking the focus off near-term performance and quarterly pressures.

Above all, the company’s leadership recognizes that diverse, happy employees are core to its growth strategy and knows that employee engagement, satisfaction and development will drive the greatest value for customers over the long term.

Strategic, thoughtful integration and localized service are the cornerstones of

NFP’s growth philosophy. NFP empowers its employees to leverage their knowledge of their specific markets and supports them with national resources and capabilities. The company looks for potential acquisitions, clients and new employees whose values broadly align with the company’s values of integrity, teamwork and ethics. Most recently, NFP added two industry titans to its ranks: Henry Lombardi as EVP for the P&C division and Kevin Brown as managing director in Austin.

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ASSUREDPARTNERS Lake Mary, FL

Founded in 2011 as a national partnership of leading independent property & casualty and employee benefits brokerage firms, AssuredPartners has been ranked as one of the largest brokerages and P&C agencies in the US, with offices in 30 states and two countries. The company has achieved upwards of $1 billion in revenue in just seven years, thanks to strides made in recruiting and training producers, in addition to focusing on industry specializations.

The company launched AP University to invest in sales managers and professionals, and has built out industry verticals in areas such as employee benefits, senior living, transportation and real estate. AP also places a heavy emphasis on hiring new talent and sales leaders; by June 2018, the firm had hired more new producers than in all of 2017. Acquisitions have also played a large role in AP’s growth.

“We continue to attract the best agencies to join AP,” says chairman and CEO Jim Henderson. “We do this by organically identifying target acquisitions. It’s part of our culture. Approximately 70% of our new agency acquisitions are sourced internally, not through consultants. It speaks to our success with onboarding and operating new acquisitions. We are a company that people are happy to refer to their colleagues to sell their agency.”

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SPECIAL REPORT

ELITE AGENCIES 2018 PAYNEWEST INSURANCE Missoula, MT

One of the largest independent agencies in the West, PayneWest has experienced double-digit organic growth due to three key initiatives: specialization, colleague investment and its Riscover program. With Riscover, PayneWest offers “business insurance with direction” as it looks at the many facets of risk that clients face. PayneWest’s sales team uses a proprietary ‘client risk plan’ to discover all of a client’s risks, even those that go beyond any insurance products the agency offers.

PayneWest has spent the past year doubling down on its investment in its employees. Nearly two-thirds of the company now has formal career path opportunities, and every new employee experiences an onboarding retreat.

PayneWest also implemented the Gives Volunteer Time Off program in 2017, providing every full-time employee 30 hours to volunteer each year.

INSURANCE OFFICE OF AMERICA Longwood, FL

As a leading partner and recipient of numerous awards from multiple carriers, Insurance Office of America is a member of the Inc. 5000 list of fastestgrowing private companies, as well as the Orlando Business Journal’s Golden 100. CEO Heath Ritenour was also among the Orlando Business Journal’s

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honorees for CEO of the Year in 2018.

IOA’s organic growth can be traced to its focus on client retention, a rewarding commission structure, and a vested interest in the book of business and equity ownership opportunities for producers.

IOA’s leadership team champions employee engagement through various means, offering a quality workspace and work environment, incentives for innovative ideas, paid time off for volunteering, and continual investment in team members through training. Its

one-on-one mentorship program pairs an experienced and successful producer with a new producer for sales training and new business development.

Recognizing that insurance is inevitably linked to relationship-building and looking out for the community, IOA supports more than a hundred local and national charities and has a paid staff position dedicated to supporting the company’s volunteer efforts and community events, such as the IOA Corporate 5K, which raised $55,000 in 2018.

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BOUCHARD INSURANCE Clearwater, FL

Founded in 1948, Bouchard Insurance is the one of the largest independent insurance agencies in Florida.

Specializing in both commercial and

RELATION INSURANCE SERVICES Walnut Creek, CA

Earlier this year, Relation Insurance Services announced its name change from Ascension Insurance to better reflect the company’s commitment to

personal insurance, the Bouchard team is focused on creating an organization-wide ‘client first’ approach. In its 70 years in the industry, Bouchard has developed teams that cater to specific industries and their unique exposures, including agribusiness, community associations, construction, education, healthcare, hospitality, PEO/ staffing and social services.

The agency’s recent growth has been a result of progression in both location and talent. As part of its strategic plan, Bouchard opened a sixth office in Tampa last year to better serve the Tampa Bay area. Bouchard also continues to grow its team with top talent while remaining dedicated to training and educating the next generation of insurance professionals.

helping mid-market companies navigate the complex world of insurance by building strong relationships and leveraging the right people, partnerships, processes and technologies.

Since its founding in 2007, Relation has completed 22 acquisitions, focusing on agencies that will complement or enhance an existing specialty or help the firm build a new niche. This approach has allowed

Relation to become a fully integrated broker, providing property & casualty, employee benefits, retirement services, personal lines and collegiate solutions.

Knowing that energized, enthusiastic employees provide great customer service, Relation recently implemented a sales training program and a company-wide wellness program. The company has also created an employee engagement team that helps evaluate and prioritize employee engagement initiatives, improve the work culture, and revise company policies. In addition, Relation has made substantial investments in support personnel, including risk control, captive, actuarial, technology, wellness and benefits communication services. Its dedication to employees has helped Relation maintain impressive client retention rates.

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SPECIAL REPORT

ELITE AGENCIES 2018

PARKER, SMITH & FEEK Bellevue, WA

Parker, Smith & Feek judges success by the loyalty, trust and satisfaction of its clients – and a 96% average client

PRIME RISK PARTNERS Alpharetta, GA

Prime Risk Partners’ operating philosophy is based on encouraging

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retention rate for the last five years indicates that it’s met that goal. The leadership team focuses on creating an engaging and meaningful work culture characterized by a transparent, trusting work environment with an emphasis on continuous learning, innovation and mentorship. This deliberate cultural effort has given Parker, Smith &

Feek a reputation for integrity, honesty and professionalism, resulting in excellent client relationships and partnerships.

With nearly 50% of its income generated from the construction and real estate industries, Parker, Smith & Feek’s project risk services division leads the Northwest region in providing project insurance and risk management services to owners, developers, contractors, designers, project financiers and investors.

Each employee at Parker, Smith & Feek is encouraged to establish expertise in one or two industries and participate in relevant associations, which allows them to develop a deep level of market awareness and a keen understanding of their clients’ concerns. The addition of an organizational development program manager has strengthened the firm’s objectives by supporting individuals, managers and teams.

collaboration, cross-selling and sharing best practices and resources among the team. Over the past 12 months, PRP has committed to producer reinvestment and development to drive future growth.

The firm has worked to improve product and service offerings to allow its existing

production force to grow faster, and has focused on new producers through hiring, training and mentoring.

PRP has also been successful in closing complementary acquisitions that have expanded its capabilities and industryspecific expertise.

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USI INSURANCE SERVICES Valhalla, NY

ROBERTSON RYAN & ASSOCIATES Milwaukee, WI

Ranked number one on Milwaukee Business Journal’s 2018 Largest Area Independent Insurance Agencies list and named a 2018 Top Insurance Workplace by IBA, Robertson Ryan &

This year has been an exciting one for USI Insurance Services. The firm underwent significant expansion in both industry expertise and geographical footprint

thanks to a number of strategic acquisitions, including the purchase of Wells Fargo Insurance Services, which nearly doubled the size of its workforce.

USI maintains an edge on its competition with ONE Advantage, a risk management approach that integrates business analytics and technology from USI’s proprietary Omni Knowledge Engine – a one-ofa-kind platform that addresses complex industry challenges and helps deliver enterprise solutions. In 2018, the Omni Knowledge Engine led USI to receive the Innovation Torchbearer Award from the Insurance Marketing & Communications Association. In addition, USI was named

by Forbes as one of the Best Large Employers in America in 2018.

Associates has grown from 28 agents in 2001 to more than 95 in 2018. To be an agency of the future, RRA measures four key areas of focus: revenue drivers, technology, operational excellence and being a great place to work.

RRA has developed three active and engaged employee committees that meet bi-monthly and are led and supported by the CEO: the employee council, agent

council and the engagement committee.

All three help to build RRA’s culture and drive the agency forward; the latter is also responsible for the wellness committee and RRA’s annual Community Service Day, which continues RRA’s long-standing history of being active in the communities it serves. RRA’s most recent Community Service Day in May donated more than 430 volunteer hours in a single business day.

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SPECIAL REPORT

ELITE AGENCIES 2018

SHEPHERD INSURANCE Carmel, IN

Shepherd Insurance has spent the past 40 years perfecting its approach as an insurance agency. A privately owned agency, Shepherd has more than 20

offices and 300 employees throughout Arizona, Florida, Illinois, Indiana and Kentucky, and writes business in 49 states.

A major growth driver for Shepherd over the past 12 months has been the acquisition of various agencies, which has helped the agency grow and diversify its culture.

Shepherd also invests in young professionals through its internship programs and

partnerships with Ball State University, Butler University and Indiana State.

Passionate about community service, Shepherd has a year-round initiative known as Operation Shepherding, which supports local communities and organizations via activities such as the Alzheimer’s Association Walk and a toy drive for Prevail, a nonprofit that assists victims of crime and abuse.

HUB INTERNATIONAL Chicago, IL

Hub International was formed in 1998 when 11 Canadian brokers merged to create the company that has since become a behemoth in the insurance world. Twenty years later, Hub now has 11,00 employees across 450 offices throughout North America.

HAYS COMPANIES

ANSAY & ASSOCIATES Port Washington, WI

Minneapolis, MN

The largest insurance brokerage in the Twin Cities, Hays Companies is home to more than 700 insurance professionals.

Founded in 1994 by CEO Jim Hays, Hays Companies serves a wide range of industries, from agriculture and aviation to technology and transportation.

Hays Companies is also a member of the Worldwide Broker Network, the world’s largest fully integrated network of independent P&C and employee benefits brokers in the world.

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With a team of more than 250 catering to a client base of 5,000plus businesses, nonprofits and government agencies across Wisconsin and the Midwest, Ansay & Associates maintains its success by steadily upholding its core values of integrity, trust and respect.

Since 2011, Ansay & Associates has been focused on growth and acquisitions, adding 14 businesses to its portfolio and acquiring proven sales leadership in each of its six geographic

regions in Wisconsin.

The company takes great pride in promoting The Ansay Way – its signature four-step process/cycle to relationshipbuilding and solutions development, which begins with identifying needs and exposures and carries on through continuous monitoring and feedback.

In addition, the firm has successfully outlined key activity metrics to develop prospects into strong new business opportunities. Ansay’s growth has also been supported by its embedded data analytics company, which has built producer and service scorecards, an electronic marketing platform, and growth-engine processes within its small commercial and personal lines segments.

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THE BUCKNER COMPANY Salt Lake City, UT

An IIABA Best Practices Agency for the past three years, The Buckner Company strives for excellence in both client experience and employee culture.

Growing from its founding team of three to more than 170 employees today, the agency is one of the largest and fastestgrowing in the West.

Buckner maintains a high-energy and innovative atmosphere by investing in young talent. New employees are mentored every step of the way by seasoned professionals to maintain a high level of accuracy and professionalism in their work.

To demonstrate that relationshipbuilding goes well beyond the insurance business itself, Buckner sponsors and participates in charitable events in the communities where its offices are located, such as the University of Utah’s annual Burn Camp and sponsoring a fun run in support of Down’s syndrome awareness. Its Buckner Cares efforts have expanded as the company has expanded. “With growth comes responsibility,” says owner and CEO Terry Buckner. “We have a responsibility to give back to our community.”

GRAHAM COMPANY Philadelphia, PA

Graham Company’s business model is based on integrity and hard work.

Under the leadership of Bill Graham, the brokerage has successfully changed insurance from a passive to an active vocation. Understanding that insurance policies are not ‘one size fits all’ and that each business has its own unique set of complex risks are central to Graham Company’s overarching business model, known as The Graham Way. After more than 50 years in Phila­ delphia, Graham Company expanded to Washington, DC, in 2017 and New York City in 2018. “We’ve worked hard

BROWN & BROWN INSURANCE Daytona Beach, FL

One of the largest insurance brokers in the country, Brown & Brown has been on quite an M&A streak this year, investing a total of $50 million to

to build and maintain our reputation for being relentless advocates for our clients, and it is our hope that these new office spaces will help us share our proactive risk management philosophy more widely while continuing to attract top talent,” the company said of the move.

While the broader insurance industry is experiencing rapid consolidation, Graham Company has taken a contrarian approach.

In 2017, it announced it was becoming 100% employee owned through an Employee Stock Ownership Plan. And while many brokerages only hire from within the insurance industry, Graham Company believes in attracting employees from a wide range of industries, including legal, finance, engineering, technology and even nuclear science.

acquire 10 companies. Brown & Brown has made more than 500 agency acquisitions throughout its history and “consistently looks to expand [its] geographic reach and product offerings in all divisions” while prioritizing cultural fit. The company expects to rely on both acquisitions and internal investments to reach its next goal of generating $4 billion in revenue.

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SPECIAL REPORT

ELITE AGENCIES 2018

HIGGINBOTHAM Fort Worth, TX

Higginbotham’s growth initiatives over the past year mirror the strategy it’s had in place for more than two decades, which has led the firm to become the largest independent insurance broker in Texas. As part of its single-source solution for clients, Higginbotham has developed in-house services for

risk management and employee benefit administration. Known as Day Two Services, these offerings are provided to clients after they secure insurance on day one. From contract review and safety programs to employee communications and compliance, this comprehensive portfolio of services maximizes cost control and convenience.

Higginbotham continues to add to Day Two Services as clients’ needs evolve. The brokerage is also continuing to expand its industry verticals by developing

internal expertise and hiring experts in key segments, including energy, aviation, homeowners associations, life sciences and trucking.

Higginbotham ensures the perpetuation of its single-source solution by investing in the next generation of producers. Its New Producer Mentor Program supports young professionals with licensing and sales training under a seasoned mentor. The firm also conducts continuing education courses through Higginbotham University.

VTC INSURANCE GROUP Troy, MI

Headquartered in Troy, Michigan, VTC Insurance Group is Michigan’s largest independent insurance and surety bond agency, providing comprehensive risk management solutions in commercial, surety and employee benefits. For the past two years, the National Association for Business Resources has named VTC as one of Metro Detroit’s Best and Brightest Companies to Work For. Through the years, VTC has found success by expanding its industry customer base into manufacturing, transportation and nonprofits and by cross-selling additional products – including cyber liability, voluntary benefits and more – to existing customers.

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FEATURES

SECTOR FOCUS: PROGRAM BUSINESS

Programmed to soar Growth in program business is outpacing the wider commercial insurance marketplace. IBA spoke to leaders in the space to find out why

PROGRAM BUSINESS BY THE NUMBERS

11.7%

Increase in program business premium revenue between 2014 and 2016

$36.1 billion

Amount of premium generated by program business in 2016, up from $17.5 billion in 2010

84% Average renewal rate for program business

SPECIALIZATION HAS become key to success in many modern industries, and insurance is no different. Carving out a niche is crucial for insurance professionals in all areas of the business, from brokers and agents to underwriters and carriers.

The program business marketplace is a prime example of how integral specialization

initial study in 2011, program business revenues have more than doubled: The first study reported $17.5 billion in commercial insurance premium revenue in 2010, while the most recent figure (2016) is $36.1 billion.

The rate of growth in the program industry is easily outpacing the wider commercial lines market. The commercial insurance industry

“The program space is exploding.

Industries have seen the benefit of having a specialist understand their unique liabilities and exposures” Susan Etter, Professional Program Insurance Brokerage has become. This segment of the industry has seen rapid growth in recent years as insurance insiders have realized that differentiating through hyper-specialization is an effective way to build strong books of business.

The Target Markets Program Administrators Association’s 2017 State of Program Business Study detailed just how quickly the market is growing. It found that program business premium revenue increased by 11.7% between 2014 and 2016. Since the TMPAA’s

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posted a 1.3% increase between 2015 and 2016, while the program industry grew by more than 5.3% in the same period. In addition, the TMPAA found that 42% of program administrators now offer cyber coverage (15% in base coverage, 28% as an optional endorsement), and almost half of the administrators polled are looking to acquire other firms.

“As evidenced by the growth, the program space is exploding,” says Susan Etter, VP of underwriting at Professional Program

45%

Proportion of program administrators that are looking to acquire other firms Source: State of Program Business Study 2017, Target Markets Program Administrators Association

Insurance Brokerage [PPIB]. “Industries have seen the benefit of having a specialist understand their unique liabilities and exposures. This has caused insurance applicants to migrate toward association-led insurance programs or those who focus their advertising in their specific market. On the carrier side, companies have realized the advantage of having a homogenous book of business with underwriting expertise particular to a niche. The loss results are better when the program manager can help control the underwriting process.”

Assessing new programs PPIB has launched some interesting new programs in recent years. In 2016, the company developed a carnival and circus liability insurance program after being approached by a retail broker who was tired of searching for new markets every two years.

PPIB consolidated the data from the retail broker’s book of business and transformed it into a full program. The broker had a long

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ORDINARY PEOPLE GETTING THE EXTRAORDINARY DONE

history in the industry, which is crucial with risk selection, and PPIB agreed to manage the underwriting process, carrier relationships and policy issuance.

Currently, PPIB’s most popular program is its day spa program. Beauty and aesthetic procedures are constantly changing, and providers in the space face an array of evolving risks. Being able to address new services and technologies as they become available on the market enables these organizations to minimize their risk and stay on top of the changes.

“We partner with industry experts who help us evaluate each new offering to stay ahead of any potential issues,” Etter says.

“Specifically, right now, microblading and plasma treatments have taken the US by

So, we put a lot of effort into due diligence upfront, and that includes not only the performance of the program over time, but the capabilities of our potential partner.”

The most recent example of GAIG’s thoughtful approach is the partnership the company forged in May 2018 with Grundy Insurance to launch a program focused on antique and classic car restoration and repair shops. The program, underwritten by Grundy and based out of Horsham, Pennsylvania, provides coverage offerings that include property, general liability, automobile and garage keepers insurance.

“Our relationship with Grundy is a strong one, and we rely on their subject-matter expertise,” Suter says. “Their experience gave

“There’s no shortage of program markets to work with, but there is a shortage of markets in the space for the long haul” Richard Suter, Great American Insurance Group storm. We have put together guidelines that allow us to underwrite good risks while remaining competitive.”

Thorough analysis of any potential new program’s viability is absolutely crucial.

Taking the time to evaluate programs upfront helps insurers avoid making the wrong decision. Richard Suter, divisional senior VP in the alternative markets division of Great American Insurance Group [GAIG], adopts this type of cautious, analytics-driven approach. His department might consider 150 to 200 program opportunities a year, but only end up writing one or two.

“We are one of the pickiest program markets out there, and because of that we have been in the marketplace for a longtime,” Suter says. “There’s no shortage of program markets to work with, but there is a shortage of markets in the space for the long haul.

us confidence when we did our due diligence and continues to give us confidence as we interact with and audit them. We want to team up with good partners that have good books of business.”

Future growth drivers The rapid growth in the program space does bring with it a level of change, not all of which is positive. Insurers eager to grow have targeted program business as the place to find their next growth spurt. However, in some cases, these companies don’t have the expertise or resources needed to effectively navigate the space.

Jay Bombard, divisional VP at GAIG, has recognized what he describes as “a constant shuffle of program carriers” in recent years: new markets entering the space and then getting out as quickly as they got in. Bombard

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FEATURES

SECTOR FOCUS: PROGRAM BUSINESS

TECHNOLOGY IN THE PROGRAM MARKET The Target Markets Program Administrators Association’s latest report on the program business space found that 85% of carriers and 56% of administrators see insurtech as a key opportunity in this insurance segment.

ADMINISTRATORS 30% are heavily involved in insurtech 28% are somehow involved in insurtech 34% are not involved in insurtech

CARRIERS 29% are heavily involved in insurtech 57% are somehow involved in insurtech 9% are not involved in insurtech

attributes this phenomenon to companies getting in over their heads, achieving poor results and then retreating from the business.

“That doesn’t present a great image for agents or customers because it is distraction to have to change companies,” Bombard says.

“That’s why we are so committed to bringing stability to the program model and providing program administrators with the two most successful things in a program: differentiation

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37%

of program administrators said they used predictive modeling in 2016

26%

used predictive modeling in 2014

32% of administrators and

35%

of carriers use Big Data and analytics for decision-making purposes and some level of exclusivity.”

It’s been an exciting few years in the program business market, and experts in the space don’t expect the growth to slow any time soon. In an evolving and competitive insurance industry, program business will likely play a more significant role.

“We certainly are in an increasingly competitive industry, but I keep coming back to the value that can be added by program

administrators,” says Paul Sullivan, SVP at Arch Insurance Group. “The local agent may not have access to, or have the sophistication for, next-level tools. Insurance buyers are becoming less and less tolerant of long, cumbersome buying and claims processes, and more demanding in terms of what they receive for their insurance dollar. Program carriers and administrators are uniquely positioned to remediate these issues while building goodwill and credibility through their deep understanding of their customer’s business.”

Sullivan believes the program space will continue to grow by providing coverage in emerging areas, such as cyber, drones and the sharing economy. He also thinks insurtech firms and their offerings will play an increasingly important role in the space.

“Telematics in the auto arena, simplified application and claim processes, and social media tools for workers’ compensation fraud identification are just a few examples of ways in which carriers and program administrators can help bring more value to their program insureds,” Sullivan says.

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FEATURES

BROKERAGE INSIGHT

Trucking along Heffernan Insurance Brokers’ Kenny Planeta chats with Heather Turner about where the rubber hits the road in trucking insurance

IBA: What’s the biggest trend affecting the transportation sector today?

IBA: How does Heffernan Insurance Brokers overcome this challenge?

Kenny Planeta: The biggest thing we’re dealing with right now is huge lawsuits with even bigger verdicts. I’ve been doing this for 14 years, and I can say that I’ve never seen so many lawsuits as I have over the past five years. I don’t think trucking companies have gotten worse, but rather the lawsuits have gotten better. Plaintiff attorneys have a playbook for handling commercial truck accidents, and they are all sharing it.

When a truck hits a car, it can be catastrophic, and injury attorneys know trucking companies all carry at least $1 million in liability, whether it’s a small mom-and-pop shop or a large fleet company that carries even more in liability. The insurance carriers are forced to keep the cases out of court and push for settlements even in cases where the truck is not at fault. This has caused poor underwriting results, which are driving increases in premiums.

KP: We like to jump in way ahead of the renewal process. We don’t want to come in 90 days out and market the insurance then because fewer carriers are now writing trucking insurance. We talk to the client in a year-long process, learn their challenges, and then it’s about getting underwriters engaged in the risk.

We have to get to know the client inside and out in order to sell them to the right insurance market and find not just a one-year insurance carrier, but a carrier that will stick with them for years. We work toward a longterm strategy that’s a win-win for the client and carrier.

IBA: What’s the biggest challenge you face when insuring this sector?

KP: Commercial auto is a very hard-toplace coverage, and we have fewer and fewer carriers in the space because of poor underwriting results. We are dealing with a lot of non-renewals, and those who are still writing commercial auto are raising rates significantly, which has created a market squeeze.

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IBA: How has technology impacted the trucking sector?

KP: Last year, the electronic logging device [ELD] mandate went into effect, which tracks drivers’ hours of driving. This used to be done

on paper, but now a computer tracks driving hours so there is no way to fake it. This has impacted the lawsuits that are happening.

Before, with paper logs, it was more difficult for a plaintiff attorney to determine where a truck was, how fast it was going or whether it was within operating hours. Now all of that info is right in the ELD if an accident happens.

Many trucking companies are also starting to put cameras in their trucks, which has been a positive trend, but because it’s not mandated yet, many people are afraid to invest more money when margins are already so thin in this industry. We work with clients to show them how this type of voluntary technology can be implemented into their overall risk management strategy and go hand-in-hand with the insurance they are purchasing.

There is so much technology, data and information available out there, but finding carriers that use the information as part of the underwriting and pricing process is a challenge.

ABOUT HEFFERNAN INSURANCE BROKERS Headquartered in Walnut Creek, California, Heffernan Insurance Brokers offers comprehensive business insurance, personal insurance, employee benefits and financial services products to a wide range of businesses and individuals. Since its founding, Heffernan has remained employee-owned and has grown revenue to more than $100 million primarily through organic growth, along with strategic acquisitions. Heffernan has built its success around several specialty niches, including nonprofits, construction, healthcare, transportation, hospitality, the food industry, real estate and technology.

www.ibamag.com

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FAST FACTS: HEFFERNAN INSURANCE BROKERS

Areas of commercial specialization Construction Food industry Healthcare Hospitality Nonprofits Real estate Small business Specialty programs Technology

“We have to get to know the client inside and out in order to sell them to the right insurance market and find not just a oneyear insurance carrier, but a carrier that will stick with them for years” IBA: What makes this area so unique for brokers?

KP: Trucking insurance is such a high-level term – in reality, there are so many sub-sectors within trucking. When someone says they run a trucking company, the question is what type.

There’s the long-haul dry freight, refrigerated and flatbed as your traditional trucking, but with the growth of Amazon, there’s a segment

exploding called final-mile delivery. There are specific industry trucking operations, such as oilfield trucking and construction-related hauling like dumping operations and heavy haul, that are their own sectors.

That’s something unique about this industry. There’s not just one insurance company we deal with for all types of trucking; it is very niche-focused.

Transportation Vintners and growers

Year founded: 1988 Number of locations: 11, including an office in the UK Number of employees: 450 Head leadership: F. Michael Heffernan III, president and CEO; Jen Mahoney, COO; John Petersen, CIO; Dan Sebastiani, CFO; Brian Dantzig, EVP; Elizabeth Bishop, EVP; John Tallarida, EVP; John Prichard Jr., EVP and president of oil insurance services

www.ibamag.com

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MAGAZINE The country’s leading business magazine for today’s sophisticated commercial insurance broker/agent.

WEBSITE Breaking news, in-depth profiles, features, online forum and Insurance Business TV

ENEWSLETTER Daily news service delivered straight to your inbox every morning

Find out more and subscribe at insurancebusinessmag.com/us/ IBA subs ad2 2018.indd 1 46-47_Career Path-SUBBED.indd 46

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9 PM

PEOPLE

CAREER PATH

COMPANY BUILDER He’s worked for some big names in the industry, but Bob Gadaleta has never lost his startup mindset

The first college graduate in his family, Gadaleta used his bachelor’s degree to snag a job with the plan of earning money for law school “I landed a job as a paralegal at a company I had never heard of called AIG – and realized it had a lot of potential for a career.

I dealt with the claims department, and I realized that it was similar to what I liked about the law”

1995

STARTS AT AIG

1996

TRANSITIONS INTO CLAIMS Thanks to the relationships he developed with contacts in the claims group, Gadaleta was alerted when an opportunity arose to join the team “I enjoyed the contracts, the negotiations, and also moved on to supervising others and working on my management skills. I spent years developing as a performer, but after seven or eight years, I felt I had peaked”

2003 TACKLES UNDERWRITING In search of a new challenge, Gadaleta leapt at the chance to immerse himself in the “very challenging” field of underwriting as manager of AIG’s D&O product “It was an absolute career change. I was responsible for a product, rather than for people.

I was the technical leader for a book of business.

Over time I took on greater responsibility and ultimately was responsible for three East Coast offices [for that product]”

2008 JOINS A STARTUP The financial crisis prompted Gadaleta’s move to the then-unknown Hiscox, where he was tasked with starting the D&O book

2009 MOVES TO ATLANTA Gadaleta made a comment in his first performance review at Hiscox about the need to open an office in Atlanta and soon found himself the office’s founding staff member “We looked at the potential and decided to give it a shot. It was an absolutely life-changing moment. I was employee number one in Atlanta; fast-forward to today, and the Atlanta office has 370 staff – the largest headcount in the US”

2018 GETS A PROMOTION A project assigned to Gadaleta by Hiscox’s CEO – an internal distribution vehicle allocating risk – was delivered in May 2018 with considerable success. Among other factors, this contributed to his recent promotion as head of field “I felt I was the right fit given the various roles I’d held in my career. There’s so much to do and so much to learn – it’s exciting and challenging. As the business continues to evolve, we must stay ahead of the game”

“I went from the 800-pound gorilla to a startup. It was a challenge; we had to figure things out from scratch. I’ve learned a tremendous amount over the last 10 years – these days, I don’t panic over anything” 2014 BECOMES A PARTNER Between his work getting the D&O book up and running in a short time and his success in launching the Atlanta office, Gadaleta was named a partner at Hiscox “I got accolades for my ability to speak openly about challenging issues; I believe in respectful challenge. The ability to build things appeals to me. I want to be involved in building something, finding solutions, growing a business. That’s what invigorates me”

www.ibamag.com

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PEOPLE

OTHER LIFE

1,887

Number of runners in the most recent Sea Girt 5K

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

$472,000 5:30 a.m.

Total amount raised in the 13 years D’Altrui has been race director

D’Altrui’s arrival time on race day – three hours before the race begins

D’Altrui a nd his tea m begin orga nizing for the August race as early as Ja nuary every year

RUNNING THE GOOD RACE Insurance exec Mike D’Altrui gives back to his New Jersey community by setting pulses racing WHEN MIKE D’ALTRUI moved to the New Jersey town of Sea Girt in 2005 and heard that the community was in need of a new race director for its annual fundraising 5K, it seemed like the perfect fit: D’Altrui, the executive vice president of Conover Beyer Associates Insurance, is himself a runner with four marathons

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under his belt. In the 13 years that he’s been in charge of the Sea Girt 5K, D’Altrui has seen the event go from attracting around 500 runners to almost 2,000 – a record-setting number that included D’Altrui himself for the first time last year.

Over the years, the event has taken on

a “carnival atmosphere,” and now feature four bands playing live music on the course, children’s races, pony rides, facepainting and a rock climbing wall.

“I just love the community feel [of the event],” D’Altrui says. “There are very competitive runners, and for some, it’s the only race they do all year.”

www.ibamag.com

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27/09/2018 28/09/2018 5:55:33 4:12:07 AM

Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com. ©2018 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

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