Insurance Business America issue 6.02

IBAMAG.COM ISSUE 6.02 | $12.95

LEADING

RISK MANAGERS 2018

The country’s top risk managers reveal the threats they’re monitoring and what they’re looking for in an insurance partner COULD AMAZON DISRUPT INSURANCE? The industry reacts to the retail giant’s new health insurance partnership

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ADVICE FROM A TECH LEADER

ReSource Pro CEO Dan Epstein challenges agencies to rethink how they’re doing business

THE DRIVE FOR INNOVATION

How emerging cyber threats are forcing the industry to evolve

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ISSUE 6.02

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CONTENTS

22

LEADING

RISK MANAGERS

plus.google.com/+Ibamag facebook.com/InsuranceBusinessUS

UPFRONT 04 Editorial

Insurance producers continue to prove they’re indispensable

06 Statistics

FEATURES

42

LET THE GOOD TIMES ROLL

Everything brokers need to know about insuring special events

FEATURES

46

CHANGING THE PARADIGM The Fairly Group’s Alex Fairly outlines his agency’s innovative approach to managing risk

ReSource Pro CEO Dan Epstein offers a blueprint for brokers on how to drive profits and make better use of technology

18

Hotel security needs to evolve with the times – here’s how brokers can help

10 News analysis

14 Workers’ comp update

Could self-insurance be a solution for your small-business clients?

16 Technology update

How technology can enable insurers to better address cyber threats

FEATURES 52 Build a virtual workforce

Break free from the office chains with these four steps

PEOPLE 55 Career path

FEATURES

48

STAYING ONE STEP AHEAD

Keeping up with cyber risks is driving insurers toward innovation

2

09 Opinion

This month’s big movers, shakers and new products

LEADING RISK MANAGERS

INDUSTRY ICON

Making insurance more attractive to millennials

12 Intelligence

SPECIAL REPORT

PEOPLE

08 Head to head

What will Amazon’s new healthcare venture mean for the industry?

2018

What issues are at the top of corporate and city risk managers’ agendas in 2018? Forty of the country’s leading risk professionals discuss their most pressing concerns

If your clients work in the gig economy, they’re likely woefully underinsured

The dot-com bust brought Brad Sporer and Toni Shibayama together – and into insurance

56 Other life

Aspen Insurance VP and private pilot Chris Piety flies to the rescue

IBAMAG.COM CHECK IT OUT ONLINE

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COMPLEX RISKS REQUIRE SPECIALIZED SOLUTIONS 1

Commitment to Superior Solutions

21

Managing General Underwriting Companies

80

Lines of Business

290

Years of Collective Operating Longevity

21 MGU COMPANIES STRONG

RIMS BOOTH 2347

Capital Bay Underwriting | Concord Specialty Risk | CorPro | CorRisk | EmergIn Risk | Global Special Risks | Hunter George Interstate Insurance Management | Irwin Siegel Agency | LifeScience Risk | Power Energy Risk (PERse) | RSG Denmark RSG Sweden | SafeWaters Underwriting Managers | Sapphire Blue | StartPoint Executive Risks | Technical Risk Underwriters ThinkRisk |Trident Marine Managers | Windward Specialty | WKFC Underwriting Managers | www.ryansg.com/rsgum

MAY/JUNE 2014 | 3

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UPFRONT

EDITORIAL

Producers still have the power

I

nsurance producers and agents have dealt with their fair share of doomsday predictions over the last few years, thanks to the growth of comparison websites, chatbots and a host of insurtech-led innovations. However, if a recent study is anything to go by, it appears the message that agents aren’t going anywhere may finally be getting through.

“Independent agents have continually found ways to stay relevant to customers in spite of the push toward digital and direct-channel solutions,” said Tom Super, director of the property & casualty insurance practice at J.D. Power, in reaction to the firm’s 2018 US Independent Insurance Agent Satisfaction Survey. “Insurers that embrace the critical role independent agents play and work to find ways to partner with them have a significant opportunity to increase overall sales volume through improved customer acquisition and retention.”

“Insurers that embrace the critical role independent agents play … have a significant opportunity to increase overall sales volume” The study revealed that independent agents remain “the largest and most preferred channel for consumers”; according to the Independent Insurance Agents and Brokers of America [IIABA], they write 35.5% of all personal P&C premiums and 83% of commercial premiums. In addition, the study noted that there are “huge cross-sell opportunities” for insurers that manage to master the agency formula – being able to provide bundled opportunities to customers through agents can represent significant premium. It was the personal lines insurers with the highest commission offerings that were able to maintain the most profitable operating ratios, suggesting that looking after agents is a win for insurers, too.

The power is very much in agents’ hands; the study found they typically have eight different carrier relationships for personal lines and 11 relationships for commercial lines. Agents realize they need to do business the way consumers want them to do business – and that means providing real choice.

“Carriers that understand their independent agency distribution force, work with their agents as true partners and provide resources to help address their needs are going to be winners in the marketplace,” added Bob Rusbuldt, president and CEO of the IIABA. That sounds like solid proof that the independent agent is here to stay. But then, you already knew that.

The team at Insurance Business America

www.ibamag.com MAY 2017 EDITORIAL Managing Editor Paul Lucas Journalists Jordan Lynn, Bethan Moorcraft, Lucy Hook, Ryan Smith News Writers Lyle Adriano, Krizzel Canlas, Terry Gangcuangco, Mina Martin, Gabriel Olano Staff Writers Tim Garratt, Hannah Go, Libby Macdonald, Joe Rosengarten, Heather Turner Copy Editor Clare Alexander

CONTRIBUTORS John Welty, Ruth MacKay

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

SALES & MARKETING Vice President John Mackenzie Media Sales Managers Chris Wills, Chris Anderson, Desiree McCue, Megan Roth Mktg & Comms Manager Lisa Narroway

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

Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries chris.wills@keymedia.com, chris.anderson@keymedia.com, desiree.mccue@keymedia.com, megan.roth@keymedia.com

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

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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$7.41 billion

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

total in-force premium

$810 million

total in-force premium growth

562 independent strategic members signed

12.3%

growth in total in-force premium

400+

new independent strategic members signed nine years in a row

2018

1983

6,723 total independent strategic members signed national strategic partner companies

4,158 new agencies created strategic master agencies

SIAA is dedicated to the creation, retention, growth and continued success of the independent insurance agency distribution system.

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UPFRONT

STATISTICS

Insuring the gig economy

WHO’S WORKING IN THE GIG ECONOMY? Increasingly, participation in the gig economy is a conscious choice: According to the McKinsey Global Institute, nearly three-quarters of those who work independently do so of their own volition, often drawn by a desire for greater flexibility and control. However, many gig workers don’t realize the full scope of the stability they’re giving up, particularly when it comes to being covered by insurance for unforeseen issues like illness, accidents and litigation.

Gig economy workers not only don’t have coverage, many have no idea they need it – representing an untapped market for insurance brokers THE GIG economy – characterized by workers who engage in short-term contracts and freelance work rather than full-time employment – is forecast to comprise 40% of the US labor force by 2020. Because they don’t receive traditional employee benefits such as worker’s compensation, gig economy workers often assume high levels of personal risk – and more than four out of five have not taken out

18%

Proportion of gig economy workers who have insurance

89%

Percentage of uninsured workers who are unaware of appropriate insurance policies

coverage appropriate to the needs of their gig.

Ignorance is the prevailing state of play: Nearly 90% of those without coverage are unaware of policies that could give them the protection they need. Even among those who had considered purchasing coverage, more than a third didn’t know what kind would be appropriate, leaving the door open for insurance agents to offer guidance.

22%

Percentage of those not seeking coverage who assumed it was provided by personal policies

FREE AGENTS 30% CASUAL EARNERS 40% RELUCTANTS 14% FINANCIALLY STRAPPED 16%

70%

Gig workers who said they were likely to buy insurance direct from the carrier

Source: “Insurance in the Age of the Gig Economy,” Cake & Arrow, 2017

HOW MUCH RISK?

A RISING TIDE

Gig economy workers, particularly those who are uninsured, tend to underestimate the risks they face.

According to data from the Freelancers Union, the percentage of gig economy workers in the US labor force has risen steadily over the last few years. By 2020, the organization estimates gig workers will make up 40% of the US economy, and they’re expected to represent the majority of the workforce within the next decade.

75%

50% 50%

40% 30%

25% 20% 0%

55%

53%

67%

Said their work was “not risky”

Said they are not concerned about injury or property damage on the job

Said “loss of income – mine or someone else’s” was a risk incurred by gig work

Source: “Insurance in the Age of the Gig Economy,” Cake & Arrow, 2017

6

10% 0%

2014

2015

2016

2017

2018

2019

2020 Source: Freelancers Union

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PRIMARY INCOME

SUPPLEMENTAL INCOME

49

64

FREE AGENTS Choose to earn their primary income from gig-based work

CASUAL EARNERS Also choose to work independently, but do so to supplement other income

MILLION

PREFERRED CHOICE

MILLION

23

26

RELUCTANTS Have no other option but to derive their primary income from independent work

FINANCIALLY STRAPPED Need to supplement their income with gig-based work

MILLION

OUT OF NECESSITY

MILLION

Source: McKinsey Global Institute, 2016

WHY AREN’T GIG WORKERS COVERED? Most gig workers who hadn’t considered buying insurance said they didn’t think they needed it. Those who did consider it were either stymied by price or confusion over what type of coverage to buy, suggesting they could benefit from a broker’s advice.

56%

said price was the determining factor

While research indicates that gig economy workers have higher levels of work-life satisfaction than traditional workers, those with insurance coverage appear to be the happiest.

44%

HAVE CONSIDERED BUYING INSURANCE

43%

COVERAGE EQUALS HAPPINESS

HAVE NOT CONSIDERED BUYING INSURANCE

37%

said they didn’t know what kind of insurance to buy

No insurance

With insurance

52%

said they didn’t think they needed it

48%

said it never even crossed their mind

0

1

2

3

4

5

6

7

8

9

Level of happiness Source: “Insurance in the Age of the Gig Economy,” Cake & Arrow, 2017

Source: “Insurance in the Age of the Gig Economy,” Cake & Arrow, 2017

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UPFRONT

HEAD TO HEAD

Does insurance have enough opportunities for millennials?

The industry is in dire need of new blood to combat an imminent talent shortfall – but is it doing enough to draw young people?

Kelly Lackner

Tony Cañas

Joe Beneducci

Head of global talent management XL Catlin

Chief motivational officer InsNerds.com

Chairman, president and CEO ProSight Specialty Insurance

“Insurance firms [should focus on] creating a culture that appeals to young people. Young professionals have grown up with greater mobility and more fluid attitudes about where and when to work; flexible work arrangements enable that work style. Early career development, mentoring and clear career pathing help demonstrate a commitment to young employees and their professional growth.

Millennials are the most diverse generation ever, so a real commitment to diversity and inclusion (including familyfriendly benefits) is also essential. Finally, meaningful corporate social responsibility efforts can be a key differentiator for young people choosing an employer.”

“There is nothing but opportunity for young insurance professionals. With a 1% unemployment rate and the US Department of Labor predicting we’ll need 400,000 new workers to replace the 25% of insurance professionals that are now very close to retirement, opportunities in the industry are almost literally endless.

Young insurance professionals with some education and some experience are in such high demand that the hardest part is figuring out the best use of our limited time, and the talent wars will continue for the foreseeable future. It’s an exciting time!”

“There are more than enough opportunities for young people in insurance, but the difficult part is convincing an old industry that it must learn new tricks.

A field that was once dominated by handshake deals and carbon copies is being revolutionized by a generation that doesn’t accept the status quo.

The millennial demand for seamless consumer experiences and transparent, data-driven processes is transforming the entire economy, and insurance is not exempt. Carriers and producers are being forced to modernize their practices and can benefit by utilizing the knowledge and skill sets of the people modernizing the economy.”

A GRAYING INDUSTRY As many in the industry have long suspected, few millennials currently have ambitions to go into insurance. A survey conducted by The Hartford revealed that only 4% of Gen Y respondents said they would consider pursuing a career in the field, putting insurance far behind industries such as tech and the arts in terms of its appeal to this generation.

That’s a chilling wake-up call for an industry that faces a looming talent crisis: One-quarter of those currently in the insurance workforce are projected to reach retirement age this year, and according to one forecast, as many as 400,000 positions could go unfilled by 2020.

8

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UPFRONT

OPINION

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

Do not disturb Enhanced security is the new normal for hoteliers, writes John Welty, and agents, brokers and insurance carriers have the expertise to help ANY HOTELIER will tell you that safety is a constant concern. Hotels have regularly reviewed procedures in place to keep guests and employees safe. However, as the recent massacre in Las Vegas – in which Stephen Paddock used a 32nd-floor hotel room as a sniper’s perch, killing 59 people and inuring more than 500 – demonstrates, hotels need to direct more of their focus toward the potential for active shooters, terrorism and random acts of violence. Hotels take security seriously, but there is always more that can be done, and agents and brokers have a role to play in encouraging a proactive stance on security.

Random acts of violence have proliferated in recent years: The Heritage Foundation found that more than 60 terrorist plots were uncovered from 2001 to 2013. Between 2014 and 2015, more than 20 active shooter incidents resulted in 231 casualties.

To raise the bar on hotel safety, the hospitality industry must take a new approach to risk management. The industry must re-evaluate these acts locally and globally to determine what changes need to be made to protect a hotel and its guests, employees, and assets. Hotel owners can look to their insurers for guidance. Specialty insurers know the industry and its risks inside and out and can provide customized guidance. Their carriers can also offer insight.

For example, in a recent white paper, Zurich recommended considering security updates along with renovations in a building’s capital improvement plan. Specifically,

the insurer advised “hardening of facilities, increasing redundancy, installing security systems, developing real-time access to local police, vehicle screenings, biometric scanning for building entry and implementing cybersecurity measures.” Zurich also suggested conducting frequent evacuation drills and designating meet-up locations for employees.

suspicious activity), frequent security system and alarm maintenance, and screening systems for guest luggage.

Hotels currently spend on closed-circuit cameras, security policies and procedures, and security personnel. They need to complement those efforts with an educational component that teaches employees to identify suspicious behaviors and patterns. Security, the administration office, human resources, executives, food and beverage, maintenance, and housekeeping staff need to work individually and collectively to report suspicious activity. Consider this: Stephen Paddock had a do-not-disturb sign on his hotel room door for three days to keep housekeeping out. Should this have raised the suspicions of hotel staff?

Agents and brokers should talk to their hotel policyholders to suggest training, maintenance and more to supplement existing security efforts. According to the New York Times, the US lags behind our counterparts overseas when it comes to hotel safety. The paper noted that after the attacks in Mumbai

“The hospitality industry must take a new approach to risk management. Hotel owners can look to their insurers for guidance” Risk management begins with identifying the problem; hotel owners should know their level of risk. For example, because the front doors of a hotel are open for members of the public to come in and out freely, Zurich pointed out that hotels in busier areas should raise their level of awareness during large events. The hospitality industry can work with security specialists and local, state and federal law enforcement to identify risks.

Additionally, a recent article in Hotel Management recommended developing relationships with neighbors and local authorities to better understand and prepare action plans, should an attack occur locally. Hoteliers already partner with local authorities on fire or hurricane disaster drills. Shouldn’t they do the same for crisis situations?

Other recommended measures include employee background checks, regular staff training (particularly around identifying

hotels that killed more than 100 people, hotels in the region started using “explosive trace detectors and X-ray systems throughout.” In contrast, the article said, “even at major [US] hotels, security teams are often lightly staffed and poorly paid, with no more than a few dozen employees for more than 1,000 rooms.”

Though numbers on what a hotel might spend to get its security up to par are not readily available, consider the financial impact of an active shooter incident: According to Bloomberg, the insurance industry is expected to pay more than $1 billion in the wake of the Las Vegas massacre.

John Welty is the practice leader for SUITELIFE, an all-lines insurance and risk program for upscale hotels and resort properties administered by Venture Insurance Programs, a national program administrator.

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UPFRONT

NEWS ANALYSIS

Disruptive giants Amazon’s arrival into the US healthcare market is creating a divergence among insurers – where some see a threat, others welcome the challenge

A RIPPLE of excitement and trepidation swept across the US insurance industry in late January when Berkshire Hathaway announced a deal with tech giant Amazon and JPMorgan Chase to create a new healthcare company. This consortium of giants has stirred mixed responses from the American insurance industry: Some deem the arrival of big-brand providers like Amazon “a significant threat,” while others see it as a welcome chance to gain insight from these global players.

The new insurance co-venture is initially being set up to help the three companies’ US employees get quality healthcare “at a reasonable cost ... free from profit-making incentives and constraints.” JPMorgan Chase chairman and CEO Jamie Dimon said the goal is to create “solutions that benefit our US employees, their families and, potentially, all Americans,” which suggests the healthcare

senior executive vice president of Frenkel & Company. “Berkshire Hathaway’s insurance knowledge, Amazon’s distribution capabilities and JPMorgan Chase’s financial acumen are enhanced by the ability to avoid traditional state-based laws as self-insured employers.

“Once they develop a transparent and efficient model,” Hasday adds, “it will become easier to scale and expand their reach, first to other self-insured employers and then to the commercial insurance market. Eliminating the side-pocket profits and conflicts of interest in dispensing care will score immediate victories with very low-hanging fruit.”

Shortly after news of the partnership broke, shares in US healthcare companies took a significant hit. Pharmacy-benefit managers, pharmacy chains and drug distributors felt the brunt of it, according to MarketWatch: CVS Health shares dropped

“If Amazon establishes itself in the insurance market, it won’t be long before other alternative providers follow suit” Danielle Cripps, GlobalData solution could expand and potentially disrupt organizations nationwide.

“I think the unique skill sets and scale of the three consortium partners give this effort a high chance of success,” says Craig Hasday, president of Frenkel Benefits and

10

7.6%, and Walgreens Boots Alliance shares declined 5.7%. Shares in health insurance companies like UnitedHealth Group and Anthem also fell.

There’s already speculation that other alternative providers will follow Amazon’s

lead in disrupting the health insurance industry and possibly the property & casualty market in the US. “If Amazon establishes itself in the insurance market, it won’t be long before other alternative providers follow suit,” says Danielle Cripps, insurance analyst at GlobalData.

“Apple is already a partner with Vitality in the UK, with the pair receiving press for their offer allowing Vitality customers to receive the newest Apple Watch at a discounted price. Apple has also updated its health app, enabling US customers to see their medical records on their phone. This could signal a potential move into the healthcare space.”

Cripps adds: “Alternative providers are highly influential brands, have masses of consumer data and resources, and are known for providing exceptional customer experiences – all of which makes them a significant threat to the insurance industry.”

But not everyone is regarding this latest shake-up with a negative eye. “Even with the

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INSIDE THE NEW PARTNERSHIP

500,000

Combined number of employees of Amazon, Berkshire Hathaway and JPMorgan Chase who will receive healthcare from the new venture

151 million

Number of Americans covered by employersponsored coverage, making it the largest segment of the US health insurance market

$30 billion

Amount by which the market value of 10 major health insurance and pharmacy stocks dropped in the first two hours of trading after the announcement onslaught of insurtechs, other startups and some of the emerging giants like Amazon and Google, the independent agent distribution force still has the ‘trusted advisor’ advantage,” says Bob Rusbuldt, president and CEO of the Independent Insurance Agents and Brokers of America.

There’s also the opportunity for the insur-

direct-to-consumer models.

“More than anything, tech giants and startups are giving us a clear view into how we must adjust our consumer offerings to provide ease of doing business in the ways consumers expect,” Rusbuldt says. “Frankly, the largest disruptor of the independent agency system today is TrustedChoice.com,

“Tech giants and startups are giving us a clear view into how we must adjust our consumer offerings” Bob Rusbuldt, Independent Insurance Agents and Brokers of America ance industry to learn from these tech goliaths, especially when it comes to interacting with consumers and incentivizing them to engage with a product or an idea. This could be key for P&C insurance distributors who are increasingly pressured by insurtechs and

which is significantly altering the way independent agents interact with their customers and potential customers.”

That brings the issue of technology disruptor versus technology enabler to the forefront once again. It’s up to the individual

$18,764

Average cost of employee premiums for family health insurance coverage – a 19% increase since 2012, and a figure the new partnership hopes to drive down Sources: Quartz, Kaiser Family Foundation

company or insurance broker to decide which team to back and how to react to this emerging ‘dream team’ insurance superpower.

“In the P&C insurance market, the biggest disruptor might be the technology itself rather than a new type of insurance company,” says Mike O’Malley, senior vice president of public policy at the American Insurance Association.

“Many insurers are pursuing digital strategies with vigor, and the resulting potential for efficiency gains and enhanced customer interaction is exciting.”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Acrisure

Beach & Associates

The existing Beach management team will remain in place following the transition

AIG

Validus Holdings

AIG plans to buy all outstanding common Validus shares for $.5.56 billion in cash

Arthur J. Gallagher

Market Financial Group and Austin Consulting Group

The Illinois-based brokerages provide P&C and human resources solutions

InsuranceHub

Insley Insurance

Insley founders Kristina Insley and Yvonne Sliger will join the InsuranceHub team

Integrity Marketing Group

Insurance Marketing Group

Both companies focus on selling life and health insurance to the senior market

Integrity Marketing Group

Neishloss & Fleming

Neishloss & Fleming is a national wholesaler of Medicare Supplement and Medicare Advantage products

Kaplansky Insurance

Anthony and Malcolm Insurance Agency

This is Kaplansky’s 28th acquisition to date

Risk Strategies Company

Benefits Network Insurance Agency

Ohio-based BNIA specializes in developing employee benefits plans

Ryan Specialty Group

Irwin Siegel Agency

ISA is a human and social services MGU based in Rock Hill, New York

Ryan Specialty Group

Kerwick & Curran

The New York-based wholesale brokerage will become part of RT Specialty

Sompo International

Lexon Surety Group

Lexon is the second largest independent surety insurer in the US

Wintaai Holdings

Stonetrust Commercial Insurance

Stonetrust is a workers’ compensation company based in Baton Rouge, Louisiana

AIG lands Validus in $5.56 billion deal

Insurance giant AIG has reached a deal to purchase all outstanding common shares of Validus Holdings for $5.56 billion in cash. The acquisition will enhance AIG’s general insurance business with the addition of a leading reinsurance platform, an insurance-linked securities asset manager, a meaningful presence at Lloyd’s and complementary capabilities in the US crop and E&S markets.

“Validus is an excellent strategic fit for AIG, bringing new businesses and capabilities to our general insurance operation, expanding the bench of our management team, and deepening our underwriting expertise,” said AIG president and CEO Brian Duperreault. “I am confident Validus will thrive within AIG and strengthen our ability to deliver profitable growth for our shareholders.”

12

Ascent introduces healthfocused PL offering

Specialist MGA Ascent Underwriting has launched a comprehensive professional liability product for allied health practitioners and facilities in the US. The product, Ascent Allied Health, features comprehensive cyber cover and regulatory billings E&O coverage to guard against healthcare data protection risks and the business risks associated with non-compliance with HIPAA billing legislation.

It can be arranged through conventional broker channels or through OPTIO, Ascent’s quote-andbind platform.

Starr enhances D&O policy with crisis coverage

Starr Companies has announced an enhancement to its Side A D&O policy that provides crisis loss coverage. “We are in an unprecedented litigation and regulatory environment, and a crisis event can cause a material effect on an individual’s reputation,” said Brian Inselberg, Starr’s SVP of financial lines. “Starr continues to look for ways to be innovative for the directors and officers of our insureds. Our Side A Directors & Officers Excess and Lead-In-Difference-In-Conditions policy insures executives as they conduct business and make decisions on a daily basis.”

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PEOPLE DUAL Commercial expands marine unit

EIURS, a division of DUAL Commercial, is expanding its energy division with the addition of a marine energy unit, to be headed by industry veteran Michael Jacobs. The new unit will focus on the middle-market segment, offering coverage for marine general liability, ship repairs, terminal operators, stevedores, wharfingers, bumbershoot, marine employers’ liability, hull and P&I. “DUAL is highly committed to the expansion of its energy division, and we feel the marine energy unit is a natural fit to its current success,” said DUAL Commercial CEO Jon Beckham.

Beazley launches rapid response for data breaches

Beazley has launched a data breach rapid response service, targeted at clients whose employee W-2 tax information has been hacked. “In 2016, the IRS reported more than a million fraudulent tax returns, with $7.97 billion claimed in fraudulent refunds – and W-2s are a rich source of information for those fake returns,” said Katherine Keefe, head of Beazley Breach Response Services. “Rapid response is critical in these situations. We believe that we have created a unique resource that will help our clients protect their employees and their data.”

CFC underwriting adds nutraceutical coverage

CFC Underwriting has added a new nutraceutical solution in its life science suite of products in the US. The product includes products liability, commercial general liability and cyber coverage, along with the option for broad product recall coverage to protect against a wide range of risks. “The nutraceuticals market is growing steadily, and people are starting to take a far more proactive approach to their general well-being,” said Sean Burke, life science team leader at CFC. “It’s an exciting market with lots of product innovation and room for growth.”

NAME

LEAVING

JOINING

NEW POSITION

Ed Barron

PwC

AIG

Head of international government affairs

Timothy DeSett

Lockton Companies

AIG

Head of field operations, North America general insurance

Antoinette Gambonini

N/A

Worldwide Broker Network

Global property & casualty consultant

Debbie Goldstine

N/A

Lockton Companies

US casualty leader and executive vice president

Sebastian Graham

Miller Insurance Services

Alesco Risk Management Services

Partner, North America power business

Jason Hamstra

Regions Insurance Group

Smart Choice

Vice president, Smart Start

Tim Johnston

N/A

Venbrook Insurance Services

Managing director, construction

Reza Khan

N/A

Ryan Specialty Group

CEO, ThinkRisk and CorPro

Ross Landsbaum

ReachLocal

McLarens

Chief financial officer

David Ring

Woodruff-Sawyer & Co.

Lockton Companies

Vice president, Sacramento

Dave Sarnoski

Vela Insurance

Pioneer Underwriters

Senior underwriter, miscellaneous, technology and cyber liability

Adam Weiner

SterlingBackcheck

McLarens

Senior vice president, IT strategy and operations

Philip Westphal

BETA Healthcare Group

EPIC Insurance Brokers and Consultants

Risk advisor and broker, healthcare

Smart Choice appoints new VP for Smart Start

Agency network Smart Choice has named Jason Hamstra as vice president of its Smart Start personal lines business.

Hamstra has an extensive background in operations management, most recently managing the personal lines call center for Regions Insurance Group.

“We are very excited to have someone with Jason’s depth of knowledge and experience in this arena coming to work with Smart Choice,” said Andrew Caldwell, the network’s president. “As our Smart Start programs have grown, we have made the commitment to reinvest in this model in an effort to continue that impressive growth in 2018 and beyond.”

Zurich names new head of direct markets

Zurich North America has tapped Vince Santivasi as its new head of direct markets. Santivasi will replace David Putz, who became head of alternative markets at the beginning of January. An automotive industry specialist, Santivasi previously served as head of sales for direct markets and programs at Zurich.

“These are exciting times for Zurich and our direct markets business unit, but especially for our customers,” Putz said. “Vince has been successful over his 14-year career at Zurich due to his unrelenting focus on doing the right things for our customers and our distributors.”

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UPFRONT

WORKERS’ COMP UPDATE NEWS BRIEFS Retailers Casualty gets go-ahead in Alabama

Retailers Casualty Insurance has received regulatory approval from the Alabama Department of Insurance to provide workers’ compensation coverage in the state. Retailers Casualty is managed by Summit, a provider of workers’ compensation services in the southeastern US and a Great American Insurance Group member.

“We are focused on providing Alabama employers with a first-rate workers’ comp option through prudent underwriting, strategically managed assets and superior customer service,” said Carl Carstens, chairman of Retailers Casualty.

Canada-based Wintaai acquires Stonetrust Commercial

Ontario’s Wintaai Holdings has finalized its acquisition of Stonetrust Commercial Insurance, a workers’ compensation company headquartered in Baton Rouge, Louisiana. Stonetrust has around $70 million in policyholder surplus and $180 million in assets, and is licensed in 28 states. It currently operates in Louisiana, Texas, Oklahoma, Arkansas, Mississippi and Nebraska, but is eyeing new markets. “We’re excited about acquiring Stonetrust and are ready to support its plans for continued profitable growth and expansion into new states,” said Wintaai chairman and CEO Francis Chou.

Oklahoma court strikes down exemption for oil & gas companies

The Oklahoma Supreme Court has deemed unconstitutional a workers’ comp law that exempts oil & gas companies from being sued when workers are injured or killed on the job.

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The ruling followed a lawsuit filed by the family of David Chambers, who received fatal burns while working at an oil well site in Crescent, Oklahoma. The site operator claimed immunity under the exemption clause, but the Supreme Court judges unanimously ruled that “no valid reason exists for the special treatment of the oil & gas industry.”

MEMIC Group named top workers’ comp provider in the US

The MEMIC Group, based in Portland, Maine, has been ranked the top workers’ compensation company in the US by the Association for Cooperative Operations Research and Development [ACORD].

MEMIC received top marks for financial performance, customer experience, employee satisfaction and brand reputation. “Given MEMIC’s significant contribution to workers’ compensation in Maine and their strong reputation in the insurance industry, it’s admirable that they not only grew faster than the market, but also had materially better financial performance,” said Bill Pieroni, president and CEO of ACORD.

Funeral escort admits to working while collecting benefits

Oran Lewis, a funeral motorcycle escort, has been ordered to pay back $10,400 to the Ohio Bureau of Workers’ Compensation [BWC] after pleading guilty to fraud. Lewis began claiming disability benefits in 2014 after he was injured on the job. Between May and October 2015, he took on work with two different funeral homes while still collecting disability benefits. “It doesn’t matter if you’re driving a vehicle or doing hard labor – it’s against the law to collect disability benefits from BWC when you’re also working and making a living,” said Jim Wernecke, director of BWC’s special investigations department.

How small employers can cut WC costs Self-insurance gives small businesses the option to reduce premiums by shouldering more risk The cost escalation in medical care remains a top concern for employers and workers’ compensation providers in the US. Over the past few years, spiraling medical expenses have had a serious impact on workers’ compensation premiums, according to Charles Caldwell, founder and CEO of Midlands Management Corporation, an MGA and wholesale broker specializing in excess workers’ compensation.

One way for businesses to generate savings is by operating a self-insured workers’ compensation program, whereby the employer takes on the financial risk for its employees’ workers’ compensation benefits and pays claims upfront and out of pocket when something happens.

According to the Self Insurance Institute of America, there are approximately 6,000 companies in the US that operate self-insured workers’ compensation programs, but Caldwell expects this number to increase as the general economy continues to rebound.

“As the US economy continues to grow, I think there will be a greater interest in selfinsured workers’ compensation programs,” Caldwell says. “Self-insured plans enable employers to retain a portion of workers’ compensation risk and enjoy some premium cost savings.”

Some employers are choosing to participate in group self-insured workers’ compensation funds, which means they band together with similar businesses to self-insure a collective risk pool, an option Caldwell describes as “a

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very good opportunity” for smaller employers.

Whether they choose to self-insure through an individual or a group plan, employers who go this route must have the financial resources to cover workers’ compensation claim costs without leaning on the shoulder of an insur-

financial cover for claims that exceed a specific dollar level.

Helping clients get self-insurance right can be challenging, especially if they opt for a group model, Caldwell adds. Businesses must be of a sufficient size to be able to retain part of their

“Self-insured groups are probably the most efficient way for small employers to transfer some of their workers’ compensation risk” ance carrier – a financial obligation that some companies deem far too risky.

However, Caldwell says there is a way for self-insured employers to protect themselves from catastrophic claims losses. By purchasing excess workers’ compensation insurance from companies like Midlands, employers can get

workers’ compensation risk, and should work with a group that’s committed to providing safe working conditions and getting fast medical care to injured workers so they can enjoy cost savings and get employees back on the job.

“Self-insured groups are probably the most efficient way for small employers to transfer

some of their workers’ compensation risk,” Caldwell says. “It’s a very attractive opportunity, and the outcomes are usually very good for them. There’s definitely a growing campaign throughout the US to introduce insurance brokers and agents to the self-insurance arena so they can advise their clients about the cost-saving opportunities and benefits as the national economy picks up.”

It’s Not IF, It’s WHEN Cyber crime does not discriminate.

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Every organization is at risk.

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UPFRONT

TECHNOLOGY UPDATE

Using technology to tackle cyber threats A startup CEO outlines how technology-enabled insurance is the answer to addressing cyber risk

A cybercriminal only has to nail an attack once. Those defending against it must prevent it 100% of the time. That’s the uneven playing field where the business world is battling it out against ever-evolving cyber threats.

“I believe that insurance is the primary solution to cyber risk,” says Joshua Motta, co-founder and CEO of cyber risk startup Coalition. “However, cyber insurance needs to be about more than just risk transfer. It should be about setting appropriate incen-

NEWS BRIEFS

tives, driving high standards and best practices, and helping businesses understand cyber risk exposures so they can decide how much risk to retain on their own balance sheets before transferring the remainder to an insurer.

“The thing is, insurance as a tool for cyber risk management is about as effective as eating soup with a fork,” Motta continues. “The risk transfer is there, but more risk management and mitigation is needed – and that’s where I

Allstate’s Arity tackles distracted driving risks

Arity, a technology company founded by Allstate, has launched new technology to help insurers fully understand the risks of distracted driving. The company is incorporating data on distracted driving into driver scores, becoming the first provider to jointly analyze drivers’ on-theroad cell phone usage and corresponding claims data in order to generate insight into how distracted driving increases accident risk. Insurers can use those insights to reward customers who have more focused driving habits.

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believe technology and insurance really need to come together into one coherent, holistic offering that addresses a client’s needs before, during and after a cyberattack.”

To find the best way to mitigate and transfer cyber exposures, Coalition uses tech-

“Insurance today, as a tool for cyber risk management, is about as effective as eating soup with a fork” nology and Big Data in its cyber risk assessment and underwriting processes to replicate what a human adversary would do.

“Cyber is a very complex risk,” Matta says.

“In order to do any form of probabilistic modeling, you need an enormous amount of data points on any particular company. The risk scenarios always vary because of the vast differences between the companies themselves and how they utilize information technology.”

While digital technologies are creating vast opportunities for organizations to become more competitive, these opportunities do come with new forms of risk.

“Businesses now have troves of data and infrastructure to protect, which is complex and perpetually changing,” Motta says. “The combination of technology with insurance is absolutely the answer to addressing cyber risk in the future.”

Crawford & Co. partners with insurtech hub

Crawford & Company has formed a partnership with the Hartford InsurTech Hub in the hopes of “bringing more innovation to the industry, finding new ways to service clients more efficiently and [creating] more value for claimants through innovative solutions.” Crawford & Company’s involvement with the Connecticut-based incubator will allow the company to share its claims expertise to help startups come up with innovative solutions that can improve the efficiency of the claims management process.

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Q&A

Automation is a no-brainer Derek Armentrout Marketplace product manager EZLYNX

Years in the industry 20 Fast fact Armentrout has a degree in chemistry and worked as an environmental scientist before moving into the tech field

There’s a lot of interest in automation these days. What role does workflow automation play for insurance agents?

The primary selling point for automation in any industry is reducing the workload on staff and increasing efficiency. For an insurance agency, this might mean sending automatic responses to the insured, creating notifications for internal staff, automatically filing documents and so on. It can help standardize processes and reduce training needs when the system is defining the workflow for you. It’s a huge help in minimizing ‘dropped balls.’

Will automation eventually replace people in independent agencies?

Automation can save you money by cutting expenses or make you money by increasing sales. I’m sure some agencies will see it as an opportunity to reduce staffing needs, but I advocate for using automation to free up staff for higher-value tasks.

If you can take the time staff currently spends on mundane, repeatable tasks and instead use it for selling, the independent agent’s bottom line starts looking much better. Automation means less time running reports, less time filling out forms, and less time tracking statuses and following up with staff on their task lists. It gets the information needed to sell and retain more business, quickly and easily.

How have you incorporated automation into the EZLynx platform?

At EZLynx, our vision is One Platform – a single solution that encompasses everything you need to

LGA offers life insurance quoting via selfie

Legal & General America [LGA] has teamed up with Lapetus Solutions, a creator of facial analytics technology, to launch SelfieQuote. Consumers can submit a picture of their face at selfiequote.com; the tool then provides a life insurance quote by using facial analytics to estimate the individual’s age, gender and body mass index. “We see SelfieQuote as a really interesting customer engagement tool,” said LGA’s Jim Galli. “It’s fun and straightforward, and it has increased our engagement with a younger demographic.”

manage your agency. Our newest product, Automation Center, ties all these steps together in workflows that match how people run their agencies. Agents can automate and build the workflows they want instead of ones the software forces them into.

Why should brokers consider using Automation Center?

Automating internal processes is a no-brainer. Use the system to create tasks for each step – or better yet, complete the step for you. For external processes involving customers, Automation Center can send immediate responses when something changes. It can help ‘do-it-myself’ customers get self-service.

For customers who prefer a more personal touch, it won’t interfere with the personal service and advocacy that differentiates the independent agent. Automation is about making personal contact higher-value, not replacing it. For example, you can use Automation Center to collect the information about your customer’s new vehicle and spend the time you save cross-selling them on an umbrella policy.

Where do you see Automation Center going over the next year?

This is our major area of focus this year. We’re going to be continually expanding what can be automated within the system, and we’re going to expand its use to workflows involving external systems, making it an integration point for other complementary systems an agency might have. We’re also adding ways to kick off workflows based on customer communications over a variety of channels.

Munich Re cements deal to capture data via drones

Munich Re has reached an agreement with drone-inspection service provider Betterview, which will offer drone imagery, analysis and reporting to Munich Re’s insurance company clients in return for the reinsurer referring clients its way. “Not only are we impressed with Betterview’s technical capabilities, we believe that their commitment to creating value for the insurance industry really sets them apart from their competitors in the drone space,” said Tim Brockett, senior vice president at Munich Re.

Spinnaker and Hippo reimagine home insurance

P&C insurer Spinnaker Insurance has formed a strategic partnership with a California-based Hippo, an insurtech company aiming to disrupt homeowner’s insurance. “It has already proven to be a valuable partnership,” said Richard L. McCathron, Hippo’s head of insurance. “Contributing to our groundbreaking and efficient quote process, Spinnaker has helped us solidify a clientfriendly underwriting process, through our trusted data sources, that lowers friction for the end customer.”

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PEOPLE

INDUSTRY ICON

CHANGING THE ORDER ReSource Pro CEO Dan Epstein discusses how brokers can better use technology and the key growth driver they’re often neglecting

DAN EPSTEIN’S road to into insurance has been fairly unorthodox, including stops along the way in the military, with tech startups and as a stand-up comedian.

After serving in the Israel Defense Forces, Epstein landed in the US House of Representatives, where he worked on international trade. After that, he spent two years running the commercial section of the Israeli Embassy in Washington, DC. But it was his work in the tech field that eventually led Epstein to insurance services provider ReSource Pro in 2005.

“I was working with technology startups, primarily from Israel, helping them to enter the US market and then come up with growth plans and venture capital funding,” he says.

“When I finished my MBA, I had an opportunity to make a shift from being fundamentally a consultant to being an operator and building a company myself … and insurance was a fascinating field.”

On his way to insurance, though, Epstein spent some time on the stand-up comedy circuit in New York City.

“I took up stand-up comedy because, at the end of my executive MBA at Columbia, I hadn’t yet locked down my next position,” he says. “I had two months to reflect on how far I’d come. When I say how far I’d come, what I mean is I was heavily in student debt, I was working as a clerical temp to pay the rent, and I reached the view that finding the humor in my situation through stand-up comedy was far healthier than the alternative.”

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For a while, Epstein even contemplated making a career out of stand-up comedy – but “in the end, I realized that being bald, short and English could only take me so far.”

Still, Epstein’s time as a comedian did give him some skills he relies on in his current role as ReSource Pro’s CEO. “I think the main thing it teaches you is not to have too big of an ego or to take yourself too seriously,” he says. “Humor is great

building quietly under the surface for a long time. What we have in insurance is a lot of legacy systems out there that, in most cases, don’t talk to each other, and an incredibly fragmented industry.”

Therefore, he says, opportunities await insurance companies willing to invest in technology. “I do see plenty of opportunity for those who can get a head start with things like process re-engineering, automation, machine

“Most agencies jump straight into technology projects with the wrong focus, the wrong team skill sets and an inadequate appreciation of the importance of getting the process right first before you implement the system” for building connections with people, obviously, as long as it’s done tastefully. Of course, stand-up comedy is often not very tasteful, so you have to exercise judgment.”

Changing times When reflecting on the current landscape in the insurance industry, Epstein describes it as a transition period that’s been a long time in the making.

“There’s a book that I called The Slow Pace of Fast Change,” he says. “It’s about how it seems like when change comes, it feels so rapid and disruptive, but actually it’s been

learning, writing algorithms and analytics,” he says. “Those who are investing in these areas, I think, will be in a position to lead the transformation for years to come.”

But he also points out where problems can arise in executing technological initiatives.

“Our experience is that technology is often seen as a panacea – that it can solve everyone’s challenges, drive efficiencies [and] create greater insight into the business,” he says.

“Most agencies jump straight into technology projects with the wrong focus, the wrong team skill sets and an inadequate appreciation of the importance of getting the process

PROFILE Name: Dan Epstein Company: ReSource Pro Title: CEO Based in: New York City Career highlights: Making his first sale at ReSource Pro in 2005 and reaching 1,000 employees in November 2011 Fast fact: Epstein holds degrees from Columbia Business School and the London School of Economics

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PEOPLE

INDUSTRY ICON

right first before you implement the system.

If you get the process right and then you put the system in, it’s always going to be a more successful outcome than the system first and then the process.

“The other thing is to understand,” he adds, “is that because the industry is so fragmented, so complex, a single piece of technology or system is not going to solve everything. You always need to apply people, you need to have flexibility, [and] you need to have the agility to come up with a broader solution.”

then you can really drive performance of the organization in ways that previously would not have been possible,” Epstein says. “That can drive massive impact to the contribution of each employee to the organization, thereby increasing the overall profitability of the business.”

At ReSource Pro’s Innovation Lab, the company works with clients to digitize their operations and monetize analytical insights.

“For retail agencies, we’ve focused on testing tools for improving things like place-

“Insurance is a data-intensive industry where many organizations struggle to get access to data, even from their own systems … We’re really focused on expanding our various products and applications around collecting and utilizing analytical insights” Driving profit As head of ReSource Pro, Epstein has been able to get an inside view of insurance agency operations; as such, he’s developed some ideas about where agencies might go astray.

“The biggest area of focus for most agency brokers is about driving growth of their business,” he says. “What we find is that pursuit of growth is often undermining the profitability of their growth. That’s because the things that you need to do to grow, to get an account in, [can] create a lot of chaos downstream.”

He adds that agency owners often neglect the biggest opportunity to drive profitable growth, which comes from prioritizing operations excellence.

“Once you get operations aligned with the business strategy and processes that are streamlined … and source the right people,

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ment efficiency, revenue maximization and profitability,” Epstein says. “For MGAs and carriers, [we’ve looked at] testing algorithms to optimize risk selection, to improve expense ratios and bind ratios, [and] also giving them insight about which of their broker relationships are the most profitable.”

Looking ahead, Epstein says analytics will be a major focus for the ReSource Pro team over the next year.

“We’re focused on this analytics space because I think it’s a huge opportunity,” he says. “Insurance is a data-intensive industry where many organizations struggle to get access to data, even from their own systems.

We look at that as a big opportunity. We’re really focused on expanding our various products and applications around collecting and utilizing analytical insights.”

RESOURCE PRO

BY THE NUMBERS

2003

Year ReSource Pro was founded

2005

Year Dan Epstein joined the company as VP of business development

300

Approximate number of insurance organizations to which ReSource Pro provides support

3,000

Approximate number of ReSource Pro employees, as of 2017

2009

Year when ReSource Pro was first listed as one of Inc. magazine’s fastest-growing private companies; it has made the list every year since

OVER ARCHING

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RESPONSIVENESS

KNOWLEDGE

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INS IGHT

F LE X I BI LI T Y

ACCIDENT & HEALTH ALTERNATIVE MARKETS E&S CASUALTY CONSTRUCTION CONTRACT BINDING OPERATIONS DESIGN & ENVIRONMENTAL EXECUTIVE ASSURANCE EXCESS WORKERS’ COMPENSATION HEALTHCARE LENDER PRODUCTS NATIONAL ACCOUNTS CASUALTY PROFESSIONAL LIABILITY PROGRAMS PROPERTY SURETY TRAVEL

THE STRENGTH OF ARCH www.archinsurance.com

®

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

Insurance coverage is underwritten by one or more member companies of Arch Insurance Group in North America, which consists of (1) Arch Insurance Company (a Missouri corporation, NAIC # 11150) with admitted assets of $3.62 billion, total liabilities of $2.74 billion and surplus to policyholders of $875.31 million, (2) Arch Specialty Insurance Company (a Missouri corporation, NAIC #21199) with admitted assets of $515.45 million, total liabilities of $215.49 million and surplus to policyholders of $299.96 million, (3) Arch Excess & Surplus Insurance Company (a Missouri corporation, NAIC # 10946) with admitted assets of $65.14 million, total liabilities of $328,448 and surplus to policyholders of $64.82 million and (4) Arch Indemnity Insurance Company (a Missouri corporation, NAIC# 30830) with admitted assets of $62.28 million, total liabilities of $35.63 million and surplus to policyholders of $27.05 million. All figures are as shown in each entity’s respective Quarterly Statement for the quarter ended June 30, 2016. Executive offices are located at One Liberty Plaza, New York, NY 10006. Not all insurance coverages or products are available in all jurisdictions. Coverage is subject to actual policy language. This information is intended for use by licensed insurance producers. © Arch Insurance Group 2018

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FEATURES

SPECIAL REPORT

AMERICA’S LEADING

RISK MANAGERS The world’s risks are changing, but these risk managers are staying ahead of the curve by protecting people, companies and municipalities across the country

OVER THE course of the past year, cities and companies across the US faced historymaking perils that forever changed the way the world views and manages key risks, from natural disasters to terrorism.

This year’s selection of Leading Risk Managers is drawn from a wide swath of industries and organizations, including a city hit by a devastating hurricane in 2017, one of the nation’s largest nonprofit organizations, a global energy company and a major tourist attraction. What these professionals all have in common is a passion for mitigating and preventing today’s most threatening risks.

On the following pages, this year’s Leading Risk Managers share the threats that are top of mind for them in 2018. They also reveal the key strategies they use to mitigate risks and the primary factors they look for in an insurance partner.

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2018

LEADING RISK MANAGERS INDEX COMPANY

NAME

PAGE

COMPANY

NAME

PAGE

21st Century Fox

John Egan

34

Diocese of St. Augustine

Deborah A. Tauro

36

Aetna

Shawn M. Guertin

23

Duke Energy

Keith G. Butler

34

Best Buy

Dawn Soleta

34

Fannie Mae

26

Bridgestone Retail Operations

Kimberly H. Johnson

Robert Cartwright

39

Fox Entertainment Group

Vincent J. Monastersky

36

Charter Communications

Allison Cosway

32

Google

Loren Nickel

40

Chevron

Kevin Jones

41

Hess Corporation

Liza Abad

24

Citi

Bradford Hu

23

The Home Depot

Jim Bramlett

38

City of Atlanta

Tamika B. Puckett

24

The Howard Hughes Corporation

Randy Kostroske

26

City of Baltimore

Douglas Kerr

40

Intel

Mark Slight

41

City of Houston

Tina A. Paquet

37

Marriott International

Mitchell Aucoin

32

The Clorox Company

Laura Cisi

40

ConAgra Foods

Scott Solberg

28

The Metropolitan Museum of Art

Aileen Chuk

36

CVS Health

Larry Parks

38

Microsoft

Brian Warren

27

Deloitte

Bob Graham

24

Navy Pier Inc.

Gina Kirchner

31

SHAWN M. GUERTIN EVP, CFO and chief enterprise risk officer Aetna

Shawn Guertin is executive vice president, CFO and chief enterprise risk officer of Aetna, a Fortune 50 healthcare benefits company with more than $60 billion in revenue. In addition to serving as part of Aetna’s

COMPANY

NAME

PAGE

NJ Transit

James Turner

38

National Rifle Association

Emily Cummins

30

Princess Cruises

Manny Chavez

25

Regeneron Pharmaceuticals Inc.

Ken Smith

30

Space Exploration Technologies [SpaceX]

Mike Lutomski

35

Turner Broadcasting System Inc.

Brett Hellenga

30

UnitedHealth Group

Dawnette Schmidt

31

University of California

Richard Bookstaber

27

University of North Texas

Doug Welch

33

US Foods Inc.

Dena Abdallah

28

The Walsh Group

J. O’Connor

32

Yum! Brands

David Smith

28

BRADFORD HU Chief risk officer Citi

Bradford Hu became Citi’s chief risk officer in 2013, shortly after the appointment of CEO Michael Corbat, whose leadership has been credited for significant improvements in the

executive leadership team and overseeing a plethora of finance-related duties, Guertin is responsible for mergers and acquisitions and risk management. In late 2017, the company announced a $69 million merger with drugstore chain CVS, which, once completed, will be the largest health insurance merger in US history. The two companies said they hope the consolidation will help slow rising healthcare costs and allow them to introduce new and better technologies.

Prior to joining Aetna in 2011, Guertin served as executive vice president, CFO, treasurer and chief actuary of Coventry Health Care. He has also served in leadership roles at United HealthCare and Travelers.

bank’s financial health and risk capacity.

Previously, Hu was chief risk officer for Citi’s operations in Asia, where he was responsible for tracking risks across the consumer and institutional clients businesses. He also previously headed the Asia risk management committee and served as the primary contact for the regulators in the region.

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FEATURES

SPECIAL REPORT

TAMIKA PUCKETT Director, office of enterprise risk management City of Atlanta

As the director of enterprise risk management for the City of Atlanta, as well as manager of the risk management program for Hartsfield-Jackson Atlanta International Airport – the world’s busiest airport – Tamika Puckett relies on more than 15 years of experience managing complex public-sector risk management programs. Puckett has specialized experience in the areas of workers’ compensation, contractual risk transfer, training programs, and emergency preparedness and response.

Similar to many 21st-century risk managers, Puckett has cybersecurity threats top of mind. “With the growth of artificial intelligence and the Internet of Things, security and privacy issues are more prolific,” she says. “It has become more difficult to prevent cyberattacks and even more of a challenge to manage them once they occur. Many entities are looking to insurance companies to provide insulation against such exposures.

However, it is necessary to take an integrated, enterprise-wide approach in order to effectively mitigate the risk of cybersecurity exposures.”

In an effort to reduce the probability of a threat occurrence or the impact severity of a risk, Puckett subscribes to a traditional strategic risk mitigation philosophy. “Once the risk has been identified and analyzed,” she says, “a determination on how to treat the risk must be made: accept, avoid, reduce or transfer the risk.”

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BOB GRAHAM Chief risk officer Deloitte

Once named the best cybersecurity consultant in the world, Deloitte certainly has a lot to live up to, and the company continues to work tirelessly to uphold the highest standards and develop the best skills in managing cyber and other risks.

As Deloitte’s chief risk officer, Bob Graham oversees the company’s US risk and regulatory affairs function, including crisis management, confidentiality and privacy, ethics, and compliance. Graham has accumulated a wealth of experience

LIZA ABAD Enterprise risk manager Hess Corporation

Liza Abad began her risk management career during the boom and bust of energy merchant/trading, managing credit risk through the Enron collapse and subsequent industry downturn. After those formative years, Abad joined the risk group of global energy company Hess Corporation, managing credit risk for commodity trading and marketing groups.

and expertise in risk and regulatory affairs in a career spanning more than three decades.

Graham is also a principal and member of Deloitte’s US executive committee, the Deloitte & Touche security executive committee and the Deloitte Touche Tohmatsu Limited risk executive committee, as well as chair of the cross-functional operating risk committee in the US. His previous leadership roles include serving as the strategic and reputational management leader and lead client service partner for Deloitte’s military intelligence practice, and as the leader of the company’s federal quality and risk management team.

After getting her MBA, she transitioned into enterprise risk and strategy. In the latter, she served in an advisory capacity, shepherding country risk monitoring, new country entry and country risk scoring methodology.

Currently as enterprise risk manager, Abad is responsible for leading the development of a risk standard and enterprise risk implementation at corporate, regional and operational headquarters.

“Good risk management doesn’t operate in a vacuum,” Abad says. “The dynamic nature requires us to be aware of factors beyond financial statements, our company and industry.”

Passionate about sharing and building her knowledge of risk best practices, Abad has served in leadership roles at risk professional organizations and actively speaks on topics of enterprise risk, business continuity, systemic risk and credit risk at events such as EnergyRisk USA and Columbia University’s Energy Symposium.

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MANNY CHAVEZ Risk manager Princess Cruises

Favored by cruise enthusiasts around the world, Princess Cruises was voted the Best Cruise Line of 2017 at the

annual Cruise International Awards. Yet even with luxurious upgrades in service and technology, cruise lines continue to face a wide range of risks, including technical breakdowns and fire, threat of piracy and political turmoil, virus outbreaks, and natural disasters. However, Manny Chavez sees one key advantage to managing risks for a cruise line: “One area that is unique to our business is the ability to move our assets,” he says. “When facing hurricanes or other disasters, we can relocate our assets to safe locations, preserving both the asset from damage and the revenue from its use.”

For 10 years, Chavez has directed the insurance and risk management function at Princess Cruises, including managing P&C and marine policies, coordinating with staff and outside counsel on claims and litigation issues, supporting risk

assessment for new projects, and enforcing regular loss prevention audits.

For Chavez, the key to risk mitigation is remaining invested in the situation and people involved. “You have to conscientiously care about your work [and be] capable of understanding the risk exposure and collaborating with people who manage that risk,” he says.

“Investing in our people with training is a key part of our mitigation strategy.”

Chavez has accumulated two decades of experience in maritime, entertainment and construction risks, with special­ ization in environmental, health, safety, security and fire protection. He served in the US Navy for four years as a shipboard firefighter and damage control officer, and currently is the president of RIMS’ Los Angeles chapter.

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FEATURES

SPECIAL REPORT

KIMBERLY JOHNSON Executive vice president and chief risk officer Fannie Mae

RANDY KOSTROSKE Senior vice president of risk management The Howard Hughes Corporation

At The Howard Hughes Corporation [HHC], a Dallas-based real estate development and management company, Randy Kostroske applies his extensive experience in commercial real estate as the company’s SVP of risk management.

Kostroske is responsible for negotiating all commercial lines of insurance and leads the risk management team in proactively developing and implementing solutions to manage and mitigate the risks for a $5 billion company that manages and develops commercial, residential and mixed-use real estate across the US. “In addition to the traditional commercial risks I manage that are insurable and can be transferred – including cybersecurity, one of the most popular emerging risks that has been on the radar of any risk management professional in recent years – I extend a comprehensive risk assessment approach to our entire organization, since both

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upside and downside risks evolve as our company matures,” Kostroske says. “Due to the tremendous growth of HHC in just seven years as a publicly traded real estate company, some of the biggest enterprise risks I regularly evaluate with our engaged executive management team and board pertain to talent management, leasing, construction management, asset sales, new business ventures, reputational risk and market risk.”

To manage the range of risks under his purview, Kostroske and his team regularly visit all assets and regional offices to conduct on-site risk management training sessions while raising overall awareness of critical risks and how to mitigate them.

Additionally, Kostroske “interacts quarterly with our board’s risk committee to evaluate and discuss critical enterprise risks and strategies for mitigating them. I am provided instant and full support from the top to address the mitigation of risks that are identified.”

Outside of his role at HHC, Kostroske is a member of RIMS, the American Institute of Certified Public Accountants and the Texas Society of Certified Public Accountants.

Kimberly Johnson has been with Fannie Mae for more than a decade. As chief risk officer, she is responsible for overseeing the lender’s governance and strategy for global risk management, including development and implementation of risk measures across the enterprise.

She also chairs Fannie Mae’s enterprise risk committee and is a member of the company’s leadership team.

In the latter half of 2017, Fannie Mae was focused on doubling its efforts to reduce taxpayer risk by drawing more private capital through its risk-sharing transactions.

Last year, Johnson was recognized as one of the most powerful AfricanAmerican executives in corporate America by Black Enterprise magazine.

She was also named to Washington Business Journal’s Women Who Mean Business list and Mortgage Professional America’s Hot 100 list, and received the Women of Excellence Award in Community Service from the National Association of Female Executives.

Johnson became Fannie Mae’s deputy risk officer in 2013 after serving as senior vice president for multifamily capital markets and pricing, and before that, as vice president for credit risk and enterprise risk management. Prior to joining Fannie Mae, Johnson was with Credit Suisse and also spent time as a US equity trader at D.E. Shaw & Co.

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16/02/2018 6:14:01 AM

RICHARD BOOKSTABER Chief risk officer University of California

In 2015, Rick Bookstaber became the first chief risk officer of the University of California’s investment office, joining from the Treasury Department’s office of financial research. In this role, Bookstaber oversees the university’s pension and endowment portfolios, amounting to $110 billion worth of assets.

For more than 30 years, Bookstaber has developed extensive expertise in financial risk management. His notable accomplishments including having worked with Morgan Stanley on portfolio insurance during the 1987 stock market crash, with Salomon Brothers on the 1998 failure of long-term capital management, and in the regulatory space during the aftermath of the 2008 financial crisis.

From 2009 to 2015, Bookstaber was with the SEC and US Treasury

Department, building out the risk management structure for the Financial Stability Oversight Council and developing an agent-based model to assess financial

vulnerabilities. Bookstaber also is the author of two well known books on financial risks: A Demon of Our Own Design and The End of Theory.

BRIAN WARREN Director, risk management Microsoft

Amid data privacy issues and AI developments that are giving rise to the need for better worker protections, tech giants like Microsoft are constantly striving to achieve the perfect balance of innovation and risk management.

As Microsoft’s director of risk manage­ment, Brian Warren works with the company’s treasury risk group on quantitative analysis and risk modeling, risk information systems, and risk-related accounting policies and processes. Warren started out as a risk analyst at Microsoft in 1996. Prior to Microsoft, he spent nine years with Allstate Insurance Company’s Seattle regional office as a lead financial analyst.

Before that, he served for four years in the US Army as a field artillery officer, and for 16 years in the Army Reserve as a civil affairs officer.

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16/02/2018 6:14:13 AM

FEATURES

SPECIAL REPORT

DENA ABDALLAH Director of claims operations US Foods

Dena Abdallah is the director of claims operations for US Foods, one of the world’s leading food service and supplies distributors with an extensive collection of exclusive, national and local/regional manufacturer brands.

In her role at US Foods, Abdallah oversees a team of claims specialists that monitor the company’s program and is responsible for various aspects of risk management, including claims analytics and drivers, third-party administrator management, traditional contract review, and vendor selection and management.

“We’re doing more than just monitoring our cases – we’re working to mitigate them ahead of time,” Abdallah explained in an interview with Marsh about using its platform to stay ahead of risks.

Abdallah is the current secretary for the board of the National Retail and Restaurant Defense Association.

Prior to her role at US Foods, Abdallah held a number of risk- and insurancerelated positions, including as workers’ compensation manager for RR Donnelley, regulatory compliance and training consultant for CNA Insurance, and assistant vice president for claims management giant Sedgwick.

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SCOTT SOLBERG Director of finance, insurance and loss control ConAgra Foods

Since 2006, Scott Solberg has been overseeing ConAgra’s property loss control and business continuity program, which amounts to more than $10 billion worth of total insured values across 400 locations.

In addition to property insurance, Solberg also arranges marine, pollution and cyber

DAVID SMITH Director, risk management and treasury Yum! Brands

For more than two decades, David Smith has been managing the safety operations and risk exposures of Yum! Brands, a Fortune 500 company operating leading fast food chains such as Taco Bell, KFC and Pizza Hut. The company has over 44,000 restaurants in more than 135 countries, and has been named an Aon Hewitt Top

coverages for ConAgra, and looks after the company’s claim loss reserve. Solberg has received a risk innovation award in recognition of his initiatives.

In 2012, Solberg was promoted to director of finance, insurance and loss control, which placed all insurance and loss control operations under his purview, and added responsibilities such as oversight of claims from non-benefit insurance policies and engagement in enterprise risk management.

Company for Leaders in North America and included in the Dow Jones Sustainability North America Index. In recent years, Yum! Brands and other industry players have chosen to reduce their risks and improve profitability through refranchising; franchise stores now make up more than 90% of the company’s total stores in the US. Before becoming director of risk management and treasury, Smith served as the company’s director of total rewards, claims, safety and national business programs.

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16/02/2018 6:14:20 AM

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16/02/2018 6:14:24 AM

FEATURES

SPECIAL REPORT

EMILY CUMMINS BRETT HELLENGA Executive director, risk management Turner Broadcasting System

A graduate of the University of Georgia’s MBA program with specialization in risk management, Brett Hellenga has spent more than two decades looking

KEN SMITH Director, risk management Regeneron Pharmaceuticals

Ken Smith is the director of risk management at Regeneron Pharmaceuticals, a science and technology company based in Tarrytown, New York, which has developed six FDA-approved medicines and numerous product candidates for a range

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after Turner Broadcasting System’s risk exposures, insurance coverage and other risk mitigation measures for productions and events. In May 2017, TBS hosted an event with other media players, inviting top security leaders to discuss the challenges and best practices for dealing with security breaches in the industry.

of conditions, including asthma, pain, cancer and infectious diseases.

An industry peer describes Smith as “a valuable resource to his company across the board. His skill set is far-reaching, and his knowledge vast. He is able to compartmentalize each risk and apply a solid fundamental approach to each subject. He uses that as his basis in constructing a solid risk management plan.”

Managing director of tax and risk management National Rifle Association

After a career in governance, risk and compliance, Emily Cummins moved into risk management, and the first piece of advice she received has stuck with her to this day: “The earliest and best advice I received was to become active in RIMS, the Risk and Insurance Management Society,” she says. “RIMS enabled me to transform and elevate my career path.”

Currently, Cummins is the managing director of tax and risk management for the National Rifle Association, the gun rights advocacy group with a membership of more than 5 million. At the NRA, Cummins focuses on risk mitigation by methodically working through the risk maturity model, which uses a depth of understanding to have meaningful impact on risk mitigation. When choosing an insurance partner, Cummins looks for “diversity of perspectives, open-mindedness and innovative approaches.”

Though Cummins’ primary risk focus today might come as a surprise to some, it is one that’s an industry-wide concern.

“The talent gap is top of mind due to the generational shift in the risk and insurance industry,” she says. “This looming concern affects all of us, and it’s why I support the Spencer Educational Foundation and participate with student groups. Leaders bear the responsibility to attract new people into the field.”

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16/02/2018 6:14:35 AM

GINA KIRCHNER Director of risk management Navy Pier

Chicago’s number-one tourist attraction, Navy Pier offers some of the best views of Chicago, and it’s where Gina Kirchner harnesses her expertise in analyzing corporate risk and using risk management tools to eliminate, mitigate or insure risk exposures. Prior to this position, Kirchner spent 20 years as risk manager for the Metropolitan Pier and Exposition Authority, the previous manager of Navy Pier, where she initiated several programs that resulted in significant annual savings of 10% to 15%.

When asked about the biggest risks faced by Navy Pier, Kirchner immediately points to cyber liability. “Five to 10 years ago, many people shrugged it off as something just for technology companies. But as we now see, the threat is on a constant upward tick … people came to their own defining moments as organizations got more involved in electronic content and social media.”

Once Kirchner identifies a risk, the options to manage it fall into one of four categories: “Risk avoidance, risk transfer, risk mitigation and, lastly, risk acceptance; the best risk management strategies will always be avoidance or elimination.”

For Kirchner, risk management requires exceptional research skills, considering the vast array of insurance policies available. On top of choosing a broker partner that conducts a thorough analysis of the company’s needs every year, Kirchner also prioritizes insurance partners that take the initiative to stay attuned to her organization’s risk needs.

DAWNETTE SCHMIDT Enterprise risk financing and insurance UnitedHealth Group

The world’s largest healthcare company by revenue with $201 billion in 2017, UnitedHealth Group is set to earn an additional $1.7 billion this year thanks to the Republican tax overhaul, which is expected to add to the company’s clout in the healthcare system.

Responsible for enterprise risk financing and insurance at UnitedHealth is Dawnette Schmidt, who joined the company after holding a multitude of insurance and risk roles at Coca-Cola Enterprises, Aon Risk Services and Wells Fargo. She also previously served as insurance manager for global construction company M.A. Mortenson Company, where she managed the contractor’s casualty insurance program for its US, Canada and China operations, in addition to serving as a risk consultant for four of the company’s operating groups.

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FEATURES

SPECIAL REPORT

PATRICK J. O’CONNOR Vice president of risk management and counsel The Walsh Group

MITCHELL AUCOIN Senior director, international insurance Marriott International

Last year was a record one for Marriott International in terms of international expansion – the company secured many development contracts outside North America, particularly in Asia and Europe.

According to Travel Daily News, Marriott opened more than 140 hotels and around 30,000 rooms outside of North America in 2017, including 18,000 rooms in Asia-Pacific and 5,800 rooms in Europe.

Having signed more than 750 contracts last year, the company is continuing its expansion strategy with more than 200 projects in the pipeline, half of which are already under construction.

As head of international insurance for Marriott, Mitchell Aucoin is responsible for the company’s insurance coverage internationally, including the strategy, negotiation and procurement of various lines, from general liability to special risks.

He also manages Marriott’s relationship with international broker and carrier networks in more than 80 countries. In addition, Aucoin serves as a consultant to the sales and operation departments in regions outside of North America, advising on contract negotiation, pricing and M&As.

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Patrick O’Connor came to The Walsh Group in 2006, entering the construction company through the legal department as a trial litigator. O’Connor’s work on insurance claims and insurance litigation gave him a deep understanding of the operation of risk transfer. Moving into a risk management role at the behest of company ownership, O’Connor set out on a mission to demystify the operation of risk management and insurance products.

Beginning with educational materials

ALLISON COSWAY Senior director of risk management Charter Communications

Allison Cosway plans, develops and directs the company-wide risk programs at Charter Communications, a national telecommunications company that offers services under the branding of Spectrum. She manages and administers

and following up with consistent and constant communication, O’Connor sought to give the company transparency about the risks it was taking on and how to properly mitigate or transfer them. In order to make this transparency more powerful, O’Connor implemented a risk information system that has allowed him to mine significant business intelligence, allowing for better financial projections or risk identification.

O’Connor also launched a subcontractor qualification program, allowing for a better understanding of the varied risks of choosing a particular subcontractor, including their financial viability, safety record and capability to perform the assigned work. By leveraging technology and pulling talented personnel from within the company, the program is already undertaking the herculean task of vetting nearly 85,000 individual vendors without a significant outlay in resources.

In overseeing the risk management department, O’Connor manages property & casualty, surety, contract underwriting, claims management and 27 other lines of insurance. He also helms a largely self-insured benefits program, including health, vision, dental and voluntary benefits, for more than 8,000 employees.

insurance policies for the company, which claims more than 25 million customers in 41 states, making it the nation’s second largest cable operator by subscribers.

Recently, Charter made headlines for its plan to implement a $15-an-hour minimum wage for all of its workers by the end of 2018.

Prior to joining Charter, Cosway held positions at Lockton Companies and Chubb.

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16/02/2018 6:14:51 AM

DOUG WELCH Executive director for risk management University of North Texas

As the University of North Texas’ executive director for risk management, Doug Welch has improved and led risk management programs across the entire UNT system since his arrival at the university in 1998.

Early on, Welch understood that risk management in higher education goes well beyond purchasing traditional insurance, and that an effective program requires a strategic system and creative solutions. To ensure he could meet these challenges, Welch worked diligently to educate himself. He was

the first risk manager in higher education in the state of Texas to receive the designation of Certified Risk Manager. He has also earned designations as a Certified Insurance Counselor and Certified Insurance Service Representative.

Higher education poses a unique combination of risks and exposures that don’t exist in other industries. Welch emphasizes proactive strategies to ensure effective risk management solutions are in place, with continual assessment to ensure they evolve with the growth and needs of the university. For example, Welch developed an environmental health and safety program that includes programs focused on regulatory and compliance management, chemical

hygiene, biological safety, radiation safety, laboratory safety, and medical malpractice. In addition, because camps and various educational programs and tools require insurance coverage, Welch created UNT’s risk finance, insurance and claims operation, which manages more than 20 lines of insurance on an annual basis.

Prior to entering risk management, Welch had a 20-year career in the US Army, serving as a special forces officer in Vietnam and eventually retiring as a lieutenant colonel. Welch has been a mentor, coach and leader to many throughout his career, serving as a great example to others who have worked for and with him.

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16/02/2018 6:14:57 AM

FEATURES

SPECIAL REPORT

KEITH BUTLER Chief risk officer and senior vice president, global risk management and insurance Duke Energy

The electric and gas utility industry is facing a number of challenges, from declining load growth to environmental, social and governance risks, which means companies in the industry must partner with stakeholders to achieve objectives and have effective risk management programs that help advance their strategies.

In February 2016, after years of leadership roles in Duke Energy’s accounting, finance and tax departments, Keith Butler became senior vice president for global risk management and insurance; he now also serves as the company’s chief risk officer. Butler is responsible for handling various aspects of risk management, including market, credit, operational and strategic risks, in addition to managing the company’s insurance programs. In choosing an insurance partner, Butler looks for companies that don’t just come bearing a menu of solutions, but rather serve as a trusted advisor by demonstrating a nuanced understanding of the company’s industry and strategy.

For Butler, the work involved in risk management cannot be solely confined to his role or his team, although their work in setting up an environment conductive to safety is hugely important. “At Duke Energy, our philosophy is that every employee is a risk manager and has the accountability and responsibility to identify and report risks,” he says. “In order for this to be successful, there must be a strong risk-based culture that is both top-down and bottom-up … Our focus is to reinforce this culture through operational excellence in all areas of our business.”

Outside of Duke Energy, Butler serves on the enterprise risk management initiative advisory board for North Carolina State University’s Poole College of Management, and is a member of the Conference Board’s Strategic Risk Council. Committed to giving back to his community, Butler also serves on the boards of MeckEd and the Community Culinary School of Charlotte, and as a member of the finance council at St. Matthew Catholic Church.

JOHN EGAN Vice president, global risk management 21st Century Fox

In recent months, the entertainment industry has been rocked by harassment allegations that have led to a great need for crisis and reputation management, overhaul of culture, and protection measures for employees.

As risk manager for both 21st Century Fox and News Corporation, John Egan manages and coordinates the risk and insurance programs for both organizations. He is responsible for identifying and assessing threats, establishing the methodology for allocation of insurance-related expenses, and overseeing risk mitigation for various aspects of the business. Egan specializes in media and professional liability lines, as well as casualty insurance, and worked in various capacities at Gallagher, Aon and its predecessor firms for more than 35 years before joining 21st Century Fox.

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DAWN SOLETA Risk manager, insurance Best Buy

Dawn Soleta joined Best Buy in 2016; since then, she has been in charge of developing the insurance program strategy for the company’s US operations and overseeing the global P&C and

executive liability insurance programs, including renewals of local coverage in foreign jurisdictions and the US captive program. Specifically, she is responsible for the renewal and placement of policies, limit and risk retention analysis, identification and management of insurable risks, and claims oversight, as well as day-to-day management of third-party providers.

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16/02/2018 6:15:02 AM

Choose a WSIA member to help you deliver cost-effective, innovative solutions for specialty and nonstandard insurance risks. So cost-effective, in fact, that a recent Conning analysis of distribution costs concludes that wholesale distribution does not increase the cost of the transaction to the insured. Count on WSIA members to create expertly tailored insurance solutions.

Find a WSIA member at wsia.org MICHAEL LUTOMSKI Director of system safety, risk and reliability Space Exploration Technologies [SpaceX]

In early February, SpaceX’s Falcon Heavy finally had a successful launch after passing the static fire/engine test that was delayed due to the government shutdown. Regarded as “the world’s most powerful rocket,” the Falcon Heavy took more than seven years and nearly $500 million to develop.

Currently serving as SpaceX’s director of system safety, risk and reliability, Mike Lutomiski has nearly 30 years of experience in human spaceflight programs at NASA and in the private sector, where he worked on everything from engineering and operations to program management and safety. He started out as a flight controller at the NASA-JSC Mission Control Center in Houston and later on joined NASA’s Moscow office for two years, where he supported operations infrastructure development for the early space station. He eventually became the risk manager for the International Space Station program and spent the next 10 years defining and implementing the risk management processes for the program and its participants. After retiring from NASA in 2013, Lutomski joined SpaceX, leading the company to receive the 2014 Safety by Design Award from the International Association for the Advancement of Space Safety for “being the first space commercial company to achieve safety certification in accordance with NASA and FAA rules.”

Lutomski is a frequent speaker and moderator at various conferences and industry events on topics relating to project and risk management, safety, and sustainability for human space exploration. He is also a strong supporter of education programs, particularly STEM education.

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IN THE WEEDS? WSIA members take the guessing out of the game.

Choose a WSIA member to help you deliver cost-effective, innovative solutions for specialty and nonstandard insurance risks. So cost-effective, in fact, that a recent Conning analysis of distribution costs concludes that wholesale distribution does not increase the cost of the transaction to the insured. Count on WSIA members to create expertly tailored insurance solutions.

Find a WSIA member at wsia.org

AAMGA and NAPSLO have merged to create the new Wholesale & Specialty Insurance Association (WSIA), serving the entirety of the wholesale, specialty and surplus lines industry.

AAMGA and NAPSLO have merged to create the new Wholesale & Specialty Insurance Association (WSIA), serving the entirety of the wholesale, specialty and surplus www.ibamag.com 35 lines industry.

16/02/2018 6:15:10 AM

FEATURES

SPECIAL REPORT VINCENT J. MONASTERSKY Director of risk management Fox Entertainment Group

Starting his professional career as an insurance broker in New York, Vincent Monastersky relocated to Los Angeles to expand in personal and commercial lines.

While attaining his Certified Insurance

Counselor designation, Monastersky discovered a passion for risk management after attending his first Certified Risk Manager course.

Today, he is the director of risk management for Fox Entertainment Group, which employs more than 12,000 individuals. Monastersky has also served on the board of RIMS’ Los Angeles chapter since 2011.

DEBORAH TAURO Risk manager Diocese of St. Augustine

A seasoned risk management professional, Deborah Tauro brings 20 years of experience to the Diocese of St. Augustine, which has a presence in Florida dating back in 1870 and services 17 counties and more than 172,000 registered Catholics in 61 churches and missions.

Tauro’s career began in the accounting and analytic areas of insurance and claims, with a focus on the collection, use and analytics of data in both the risk management and safety/compliance functions. Over the course of her career, Tauro has spearheaded the design, implementation and maintenance of risk management information systems. In a previous role, she pioneered the creation of a captive insurance subsidiary primarily focused on property coverage, and was also involved in the operations of a captive that focused on insuring property & casualty exposures.

As an active member of RIMS, Tauro has held various local and national positions in the organization. She has also authored and co-authored publications for RIMS on certificates of insurance, and she is currently writing a dissertation on the insurance and risk management industry, which she hopes to publish in the future.

“Challenges arise in the areas of communication, data management and education,” Tauro says. “Life is a learning experience, and we must always learn and share what we have learned so others do not make the same mistakes.”

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AILEEN CHUK Chief registrar The Metropolitan Museum of Art

Preserving and showcasing art is a risky endeavor that involves international movement and continuous navigation of issues relating to provenance, seizure and restitution claims. These responsibilities are undertaken by a museum’s registrar, a role that dates back to the early 1900s.

As head of the office of the registrar for the Metropolitan Museum of Art, Aileen Chuk oversees the implementation of policies and procedures not just for acquisitions, exhibitions and storage of art, but also for the security of artwork

in transit, fine art insurance, and risk management. Chuk has been a registrar for 35 years, 25 of which have been with the Met. Every exhibit/event requires extremely meticulous planning on Chuk’s part, from processing paperwork to scheduling shipping and arrivals to coordinating thorough checks for all the artwork involved. In a 2012 interview with a Chester Dale Fellow, Chuk shared an exhilarating part of her work as registrar: “I feel a great sense of accomplishment when an object gets here safe and sound, and is installed properly. Of course, I can’t breathe a sigh of relief until it is all back where it came from.”

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16/02/2018 6:15:19 AM

TINA A. PAQUET Assistant director, risk management City of Houston

In a city where the greatest risk is natural disasters – as evidenced by Hurricane Harvey, which caused damage in excess of

$100 billion – there are many other threats to contend with, too. “Cyber liability-related risk is high due to the city’s broad range of business units and public services, with daily computer usage by most of our 22,000 employees,” says Tina Paquet, Houston’s risk manager and assistant director of the Administration & Regulatory Affairs Department. “Finding the right policy to control the scope of our exposure is key to an effective cyber risk program.”

Paquet also mentions the threat of terrorist attacks as a major concern. “Bush Intercontinental Airport has an average of more than 856,000 international travelers per month, making it a high-profile risk,” she says. “Our largest theater district facility, the George R. Brown Convention Center, which will host 56 events in 2018, is another one of our high terrorism risk locations.”

Following the catastrophic damages caused by Hurricane Harvey, Paquet is

focused on mitigating the high cost of damage recovery through commercial property insurance. “One of our key strategies to mitigate the risk of an incomplete recovery of otherwise available funds for the city’s Hurricane Harvey recovery is communication,” she says.

Paquet joined municipal government more than 30 years ago, following a professional insurance career that began in claims and corporate risk management. During her tenure with the City of Houston, Paquet has developed a property & casualty insurance program that addresses a broad range of risks through commercial insurance, bonds and structured contract insurance requirements. In addition to her many responsibilities, Paquet manages the city’s $11 billion property insurance program, which covers more than 3,000 insured locations.

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FEATURES

SPECIAL REPORT

JIM BRAMLETT Director, risk management The Home Depot

As head of risk management at The Home Depot, Jim Bramlett ensures that the company makes every effort to cover its risk exposures, which includes developing close working relationships with insurance companies.

In an interview with the news site Cyber Security Intelligence, Bramlett revealed that Home Depot already had cyber insurance in place before it was hit with a major breach, adding that the incident

has spurred the company to collaborate even more closely with insurance partners by having its own security team work with the IT consultants of carriers in order to thoroughly address all risk points.

In recent months, Home Depot has also demonstrated its capability for strategic planning to help mitigate the effects of natural disasters on its stores.

The company set up distribution centers in hurricane zones and was able to implement a pre-loading strategy that allowed it to send supplies and retain sufficient inventory at stores affected by hurricanes Harvey and Irma.

JAMES TURNER Senior director, risk management and claims administration NJ Transit

In addition to managing cancellations and delays and installing safety controls, NJ Transit is also currently working with Amtrak and the Transportation Security Administration to implement technology that would detect explosives within train stations and ensure top-level security.

Since 2009, James Turner has served as the organization’s director of risk management and claims administration, overseeing risk and insurance matters and handling claims involving third-party bus, rail and light rail, along with workers’ compensation, temporary disability and FELA. Prior to NJ Transit, Turner led the claims team at Prudential Financial.

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LARRY PARKS Vice president, risk CVS Health

As CVS Health prepares to venture into new territory as a result of its recently announced merger with Aetna, the company can expect more risks – both anticipated and unforeseen – to come its way, which will keep Larry Parks and his risk management team on their toes.

The merger is expected to help CVS reinvent and reposition itself as a provider of localized and affordable high-quality healthcare. However, the company also faces the critical challenge of changing customers’ expectations about where to source medical advice and services.

Meanwhile, CVS Health has also been working to address the opioid crisis through initiatives that facilitate proper utilization of pain medication, safe drug disposal, and funding for treatment and recovery programs.

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16/02/2018 6:15:37 AM

ROBERT CARTWRIGHT Division manager, environmental, health, safety and sustainability Bridgestone Retail Operations

Boasting more than 35 years of experience in multiple risk management roles, Robert Cartwright is currently division manager at Bridgestone Retail Operations, which operates the world’s largest chain of companyowned auto care and tire stores.

In January, Cartwright assumed the presidency of RIMS after serving as vice president in 2017 and spending more than 25 years as a member of the

organization. Having focused his goals on legislative issues, Cartwright received the Richard W. Bland Award, which honors

the efforts of a RIMS member in the area of legislation and/or regulation related to risk and insurance.

Clermont Specialty Managers rebrands as Berkley Luxury Group for national rollout

R

UTHERFORD, N.J.—Clermont Specialty Managers, a Berkley

New Jersey, Illinois, Pennsylvania, Maryland, Virginia and the District of

Company, is expanding its service offerings nationwide and rebranding

Columbia and most recently, Minnesota and Massachusetts. Berkley Luxury

as Berkley Luxury Group with two divisions, Berkley Luxury Real Estate

Group also writes fine dining business in these states, as it does in California,

Specialists and Berkley Fine Dining Specialists. The change will take effect

Connecticut, Missouri, and Nevada, and plans to file in remaining jurisdic-

February 1st.

tions as it expands its restaurant division nationwide.

President Bill Johnston said the rebrand is the most visible component

“We chose the name ‘Berkley Luxury Group’ because it quickly tells

of the company’s state-by-state U.S. rollout. The new name is designed to

our best-of-both-worlds story: that we have the underwriting and claims

clearly identify the company as an operating unit of Berkley, one of America’s

expertise and responsiveness to deliver exceptional service to these two very

largest commercial line writers, and what Berkley Luxury Group offers:

specialized luxury markets, plus we also have access to the strength and

tailored, all-inclusive insurance solutions for luxury condo, coop and rental

stability of a large, well known and highly regarded corporation,” Johnston

properties and fine dining restaurants.

said. “The new name also reminds our employees, producer partners and

“We’re well known in these markets within our initial footprint of New York, New Jersey, and Illinois,” Johnston said, “but as we’ve expanded, we knew we needed a name that could carry our banner into new territories, to immediately convey the unique benefits of working with us.”

The company, headquartered in Rutherford, New Jersey, with offices in New York City and Chicago, writes luxury habitational business in New York,

insureds of our commitment to satisfying the needs and wants of those who work in luxury real estate and fine dining.”

As a part of the rebrand, the company will also be reworking its website and social media presence.

To learn more about Berkley Luxury Group and its insurance and risk management products, visit www. berkleyluxurygroup.com.

Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. Certain coverages may be provided through surplus lines insurance company subsidiaries of W. R. Berkley Corporation through licensed surplus lines brokers. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.

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FEATURES

SPECIAL REPORT

DOUGLAS KERR Risk manager City of Baltimore

Armed with more than 25 years of experience in risk management, including insurance brokering, claims administration and safety management, Douglas Kerr oversees the City of Baltimore’s office of risk management with a goal of ensuring employees abide by safety regulations while delivering key services. In recent months, Baltimore has been busy implementing housing regulations and tightening security measures in response to persistent issues such as the heating crisis, poor living

conditions and continuing violence.

As risk manager, Kerr spear­headed the establishment of a strategic planning committee for the city’s workers’ compen­ sation program, working with a third-party administrator, an occupational health clinic and outside legal counsel to develop best-practice strategies for the city’s risk program. He was also responsible for setting up a Safety Shoe Store, which ensures that employees are provided proper footwear for protection against workplace hazards. Kerr also co-led a risk team that oversaw safety and risk management for Baltimore’s first Grand Prix race, ensuring a safe event for around 1 million spectators of the street-circuit race.

LAURA CISI Vice president, global risk management The Clorox Company

Committed to maintaining a safe and sustainable environment, The Clorox Company, a global producer of household brands, was recently ranked ninth on Barron’s first annual list of sustainable companies. Prior to joining Clorox as VP of global risk management, Laura Cisi built a successful insurance career at Marsh & McLennan, where she most recently served as a client advisor on professional liability insurance to Fortune 500 companies, including Clorox.

LOREN NICKEL Director, business risk and insurance Google

In 2017, Loren Nickel was named RIMS Risk Manager of the Year. As head of business risk and insurance at Google, Nickel understands that risk management plays a crucial role in propelling rather than curbing the innovation that is the heart of his organization.

After joining Google in 2005, Nickel immediately set out to complete the foundational work for risk management, setting up multiple systems to track total cost of risk, monitor emerging risk and measure losses. He was also responsible for helping to develop a framework to simplify the decision-making process involved in the insurance structure, which helped reduce risks while reining in spending. In response to Google’s rapid growth and risk evolution, Nickel and his team mapped out five- and 10-year risk management plans that would enable them to implement relevant and timely protection measures.

A qualified actuary, Nickel was an underwriting manager with Aon and Fireman’s Fund Insurance Company prior to joining Google. He is a board member of the University of California Santa Barbara’s Actuarial Science Program and the Insurance Thought Leadership organization.

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KEVIN JONES Director, risk management Chevron

With an insurance and risk management career that spans more than 25 years, Kevin Jones is currently director of risk management for multinational energy corporation Chevron. Previously, Jones was VP and chief underwriting/operating officer at Iron Horse Insurance Company. He has also held roles at ACE, Heddington Insurance Company of Texas, FM Global and more.

MARK SLIGHT Global risk manager, property, construction, cargo and workers’ compensation Intel Corporation

For the latter half of his two-decade career at Intel, Mark Slight has been overseeing teams in charge of risk identification, analysis and strategy for the corporate risk management and insurance function, and coordinating Intel’s global property, engineering, cargo, construction risk and domestic workers’ compensation programs. He also serves as director of emergency operations. Currently, Intel is moving forward with plans to build a new manufacturing facility on its Leixlip campus in Ireland, which will increase the scope of Slight’s responsibilities.

Prior to heading Intel’s risk management and insurance unit, Slight held roles IBam ABout_Quarter page_UPDATED_2.pdf 1 16/02/2018 1:46:00 AM within the company related to site and facilities management, environmental health, safety, and fire protection.

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SECTOR FOCUS: SPECIAL EVENTS

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Let the good times roll

Whether it’s a nonprofit gala, a small wedding or a music festival drawing thousands of fans, special events of all sizes need proper insurance coverage

0

MAKING PLANS for sunnier times is a way for many Americans to get themselves through the dark, dull days of winter. Whether it’s cheering on a local sports team or seeing a

companies also face a plethora of risks and potential losses. For any special event, a comprehensive insurance policy plays a crucial role.

“Higher-hazard events can include elements like overnight camping, fireworks, amusement devices and music genres with increased security exposures” Stephanie Waldron, K&K Insurance Group

legendary rock band in concert, special events are key to American life, particularly in the warmer months.

Many festivals and gatherings that started off as grassroots events are now multimillion-dollar corporations with hundreds of employees. But while they enjoy the benefits of their evolution into profitable corporations and aspirational brands, these events

42

The festival circuit

The events space represents a good opportunity for brokers and agents looking to boost their books of business. The festival scene is going through a particularly successful period. Kicking off with South by Southwest [SXSW] in March in Austin, Texas, the festival season runs through spring and summer and into fall, and attracts millions

WHAT SHOULD SPECIAL EVENTS COVERAGE INCLUDE? General liability

of attendees eager to let loose.

To give the impact of these festivals some context, the 10-day SXSW festival is Austin’s biggest revenue-producing event, hosting 300,000 people and featuring 2,000-plus musical acts, movie screenings, panels and workshops. Another major event, California’s Coachella Valley Festival, attracts more than 100,000 music fans and generates an estimated $704 million in overall economic activity.

“The most common claims arising out of events are slip-and-falls,” says Stephanie Waldron, SVP of the events and attractions division at K&K Insurance Group. “Events exist at a variety of venue types and often in fields, where walking surfaces are more hazardous than paved areas.

“Event types, number of attendees and locations/jurisdictions are major factors determining the premium size for a particular risk,” Waldron continues. “Higher-

hazard events can include elements like overnight camping, fireworks, amusement devices and music genres with increased security exposures.”

It’s not only festivals, celebrations and cultural gatherings that require special events coverage. In many cases, when a corporation hosts a special event or picnic for staff and their families, the corporate liability policy often doesn’t provide adequate coverage, so the company needs to make a

Liquor liability

Property liability

Event cancellation

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How the centuries -old insurer is staying on the cutting edge

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website is an online The Insurance Business America website is an online ng the latest industry hub committed to delivering the latest s for today’s industry news, opinion and analysis for today’s nd agents.

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FEATURES

SECTOR FOCUS: SPECIAL EVENTS

Let the good times roll Whether it’s a nonprofit gala, a small wedding or a music festival drawing thousands of fans, special events of all sizes need proper insurance coverage

MAKING PLANS for sunnier times is a way for many Americans to get themselves through the dark, dull days of winter. Whether it’s cheering on a local sports team or seeing a

companies also face a plethora of risks and potential losses. For any special event, a comprehensive insurance policy plays a crucial role.

“Higher-hazard events can include elements like overnight camping, fireworks, amusement devices and music genres with increased security exposures” Stephanie Waldron, K&K Insurance Group legendary rock band in concert, special events are key to American life, particularly in the warmer months.

Many festivals and gatherings that started off as grassroots events are now multimillion-dollar corporations with hundreds of employees. But while they enjoy the benefits of their evolution into profitable corporations and aspirational brands, these events

42

The festival circuit The events space represents a good opportunity for brokers and agents looking to boost their books of business. The festival scene is going through a particularly successful period. Kicking off with South by Southwest [SXSW] in March in Austin, Texas, the festival season runs through spring and summer and into fall, and attracts millions

of attendees eager to let loose.

To give the impact of these festivals some context, the 10-day SXSW festival is Austin’s biggest revenue-producing event, hosting 300,000 people and featuring 2,000-plus musical acts, movie screenings, panels and workshops. Another major event, California’s Coachella Valley Festival, attracts more than 100,000 music fans and generates an estimated $704 million in overall economic activity.

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WHAT SHOULD SPECIAL EVENTS COVERAGE INCLUDE? General liability

“The most common claims arising out of events are slip-and-falls,” says Stephanie Waldron, SVP of the events and attractions division at K&K Insurance Group. “Events exist at a variety of venue types and often in fields, where walking surfaces are more hazardous than paved areas.

“Event types, number of attendees and locations/jurisdictions are major factors determining the premium size for a particular risk,” Waldron continues. “Higher-

hazard events can include elements like overnight camping, fireworks, amusement devices and music genres with increased security exposures.”

It’s not only festivals, celebrations and cultural gatherings that require special events coverage. In many cases, when a corporation hosts a special event or picnic for staff and their families, the corporate liability policy often doesn’t provide adequate coverage, so the company needs to make a

Liquor liability Property liability Event cancellation Commercial auto Sexual abuse/molestation Crime insurance

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FEATURES

SECTOR FOCUS: SPECIAL EVENTS

CLAIMS EXAMPLES Situation: Due to 10 inches of rain, the highway was closed, and attendees could not get to the venue Applicable coverage: Event cancellation Amount reimbursed: $25,000 Situation: Construction on a new venue was delayed, and the event had to be rescheduled Applicable coverage: Event cancellation Amount reimbursed: $17,694 Situation: Construction at the venue prevented the event from being held, and the venue refused to refund the deposit Applicable coverage: Event cancellation Amount reimbursed: $6,691 Situation: Hosts were held responsible for damaged carpet at reception Applicable coverage: Property damage Amount reimbursed: $5,524 Situation: A guest was injured in a fall on a slippery floor Applicable coverage: Liability Amount reimbursed: $2,500 Situation: A guest moved antique dining table, and two table legs cracked Applicable coverage: Property damage Amount reimbursed: $1,865 Source: Affinity Insurance Services

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separate purchase for that single event.

“Most often, the special events organizer is asked to provide evidence of general liability insurance, and often with limits beyond the primary $1 million policy,” Waldron explains.

“Many of our special event clients also purchase coverage for auto, inland marine, crime and property.”

There’s so much that can go wrong at a festival, and modern insurance policies have been designed to cover all the bases.

Understanding a client’s – or potential client’s – full risk exposure is an important

be required to hold property, D&O, inland marine, excess liability, workers’ comp and commercial auto coverage.

In addition, “festivals should purchase event cancellation to protect their irrecoverable expenses and lost revenue in the event their festival is delayed, canceled or interrupted,” says Leigh Ann Rossi, COO of BWD Sports and Entertainment, a subsidiary of NFP.

When the fun ends Another risk for festival organizers – and one

“[With rain insurance], the insured can collect even if the event is not canceled, but just if it rains a certain amount as stated in the policy. In this case, there might be lower attendance, resulting in lost ticket sales and concession sales” Leigh Ann Rossi, BWD Sports and Entertainment first step for a broker who wants to protect an event organizer from the myriad potential risks.

General liability is the main type of coverage required for special events promoters and companies. Most robust policies include broadened coverage forms, accident medical coverage for volunteers, contingent ride liability, fireworks liability, no general aggregate, no bodily injury deductible, motorsports coverage, transmissible pathogens coverage, vendor/ exhibitor coverage and employee benefits liability. Most major special events will also

demonstrated at the SXSW festival last year – is the prospect of a performer canceling their booking. Fans were left disappointed when punk band Told Slant pulled out of the festival after the organizers included a clause in the band’s contract stating they must notify US immigration authorities about any acts that “affect the viability of their official SXSW showcase.” In a surprising development, one of the band’s members took to Twitter to share segments of the contract and announced they would be canceling their appearance at the festival, creating both a PR disaster and a gap in the festival lineup.

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A spokesperson for Aon Affinity, which offers event cancellation coverage, told IBA that non-appearance coverage is offered by the firm as an add-on to the standard policy, but it would exclude performers who drop out or are no-shows. While sickness, accident, death and unavoidable travel delays or cancellations would be covered, no-shows would not, as the cause of loss under the policy “needs to be beyond the control of all parties.”

Another major liability for festival organizers is bad weather, and insurance companies are designing products with that in mind. If adverse weather causes a festival to be canceled, the organizer will likely be covered under an event cancellation policy. Rain insurance is another important type of coverage in the festivals and events space.

“The insured can collect even if the event is not canceled, but just if it rains a certain amount as stated in the policy – such as a quarter-inch,” Rossi says. “In this case, while the festival or outdoor event is not canceled, there might be lower attendance, resulting in lost ticket sales and concession sales.”

In recent years, a new set of risks has emerged to challenge larger, more established events. “Unfortunately, in this day and age, with what we’ve been seeing in the news, one of the primary concerns is an act of terrorism,” says Warren Mead, senior underwriter in the special events program at K&K Insurance.

Terrorist-related events are occurring with increasing regularity, and insurance products that provide protection against such tragedies are playing a crucial role in the modern world. The tactics employed by terrorists have evolved in recent years, and event organizers need to ensure that they’re protected should they be caught up in such a potentially catastrophic event.

Even if an event is not the specified target of an attack, it may still suffer as a result of indirect interruption to its operations. The tragic events seen over the past few years in North America and Europe have demonstrated that a venue of any size and in any location can be impacted by terrorist attacks. The 2016 attack in Nice, in which a truck was driven into the crowds at a Bastille Day celebration, killing more than 80 people, is a recent example of an act of terrorism that deliberately targeted a crowded event.

“That’s an example of things that have to be considered in today’s world,” Mead says, explaining that such threats require risk management protocols such as barrier systems, metal detectors and entry points. The logistics of this “relatively new concept” can be a nightmare for an event promoter, Mead says, “but at the same time, they realize why it’s necessary. So it’s a balancing act.”

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FEATURES

AGENCY INSIGHT

Changing the paradigm Alex Fairly shares how The Fairly Group is challenging the status quo to reshape the world’s view of managing risk

IBA: What is one area of expertise at The Fairly Group?

Alex Fairly: The ideas and expertise that we have developed over the years have come 100% from us looking at where our clients have problems and then attacking those problems. For example, we have a lot of large workers’ compensation clients, and a big piece of workers’ compensation is medical expense. Most people focus on how to keep accidents from happening – which we do – but we also spend time focusing on how our clients can pay less for medical expenses.

There’s a very traditional approach to managing medical costs once you have a medical bill or accident. We decided that we were going to attack the issue of high medical costs, and we built a practice that negotiates medical bills on behalf of our clients.

We built a team of people who talk all day to medical providers, hospitals, doctors, etc., to negotiate clients’ bills.

More proactively, we are engaged with our clients in a way that when they do have an accident on the job, we can negotiate all those medical procedures before they are performed. Where a client may get a bill for $20,000 and they end up paying $9,000, our clients may pay only $4,500 or $5,000.

The discounts we receive on those bills

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outperform the industry norm by 50%, and last year, this practice negotiated almost $1 billion in medical bills for our clients.

IBA: How else is The Fairly Group changing the way risk is managed?

AF: When we go to a prospective client and begin to peel back the layers in a risk audit, we always find opportunity to manage risk differently. But to get better results, companies have to be willing to change some of the things they’re doing that are producing results they are no longer happy with. In this way, we have to change the paradigms to find better results.

Interestingly, the primary inhibitor of progress is that many companies, or sometimes people inside those companies, do not want to change. One of our primary objectives when considering whether to take

on a new client is to evaluate their level of discomfort with their current situation. If a prospective client is not willing to change, we politely decline the engagement. A client’s commitment to change and improvement is critically necessary to succeeding.

IBA: What has been a major client challenge in recent years?

AF: We do a lot of work in the professional sports world. There’s a lot of news right now surrounding athletes’ head trauma, specifically in the NFL and the big class-action lawsuit.

Head trauma is a really big challenge in our clients’ futures, and there are a lot of questions around how those things will be covered: Is this a liability issue? Is this a workers’ comp issue? How will this be litigated?

It’s a very complicated issue that will go on for decades. When we identify a challenge like

THE FAIRLY GROUP’S PATH TO INDEPENDENCE More than 100 years ago, the Ordway Saunders Agency was formed in Amarillo, Texas. After several iterations of ownership, the agency eventually joined Willis Towers Watson, becoming the firm’s Amarillo office. In 2016, a century after the founding of Ordway Saunders, the team at the Amarillo office bought out WTW to become a private company, The Fairly Group, while leaving the operation and team completely intact.

“WTW is still a minority owner in the firm, and we have an ongoing strategic partnership, but the firm is completely independent,” Alex Fairly says. “It is one of the most unique independent firms in the retail space.”

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FAST FACTS: THE FAIRLY GROUP

Industries served: Agribusiness

Manufacturing

Oil & gas

Construction

Transportation

“When we go to a prospective client ... we always find opportunity to manage risk differently. But to get better results, companies have to be willing to change”

Sports/entertainment

Headquarters: Amarillo, Texas Services: Risk management, employee benefits and commercial insurance

that, we to go to work to figure out a strategy for how our clients will deal with it.

IBA: What’s your advice for other insurance leaders?

AF: I believe leadership is never about the leader. Great leaders wake up every day thinking about how they can help their people be successful. Leaders who think primarily about themselves don’t do a good job of developing anyone around them. In my role, I come to work every day thinking about my people and how I can serve them.

That’s the critical point of leadership to me.

The other thing I would say is that it is very important for leaders to understand their culture, and not just the nice things you say in your mission statement that every company in America says. Those things sound nice, but leaders may not be as committed to them as they should be. So understanding your firm, what you believe in as a leader and what you are willing to defend is very important.

Once you understand that, hire people who fit that model. Every place I go, I’m thinking about finding great people, and when I find them, I hire them. I am not at

Number of employees: 110 Leadership: Alex Fairly, president

all surprised our company is doing well, and it is growing because I have an incredible team. It’s not because I’m so smart or a great businessman, it’s because I have the best team, and I would say leaders should never lose track of the fact that their companies are great because of the people, not because of the leaders.

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16/02/2018 1:51:07 AM

FEATURES

SECTOR FOCUS: CYBER INSURANCE

Staying one step ahead Cyber insurance has been forced to evolve rapidly as online criminals develop increasingly sophisticated methods A GLANCE at the biggest brands in the modern business world illustrates just how significant the digital revolution of recent years has been. Tech companies like Facebook, Netflix, Amazon and Google have grown exponentially, and their innovations are inspiring business owners in all sectors to up their digital game.

rapidly changed both digitally and in every other aspect,” says Jeremy Barnett, senior vice president of marketing at NAS Insurance Services. “Suddenly, insurance is relevant to all types of innovative companies, which has forced insurance to become more innovative, too. With the growing concern around cyber­ security, insurance has had to evolve rapidly

“Suddenly, insurance is relevant to all types of innovative companies, which has forced insurance to become more innovative, too” Jeremy Barnett, NAS Insurance Services But while the widespread adoption of digital tools and services has helped busi­ nesses up their value propositions, it has also increased their risk. Cyber criminals are using increasingly sophisticated methods to hack systems and steal data, and companies of all sizes face the realistic prospect of being targeted. As a result, the insurance industry has had to step up to protect organizations.

“The industry is being asked to provide risk management solutions in a world that has

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and become very tech-savvy quickly, which brings new talent to the industry and new opportunities for the business.”

The outdated perception of insurance being boring, reactive and reluctant to embrace technology is an image the industry is still struggling to shake off. However, the innovation around the development of cyber insurance products and risk management tools has shown just how forward-thinking the industry can be. The growth in demand

for cyber insurance has also been exciting from a business perspective, as nimble surplus lines firms have excelled in providing value in the space.

“The increased demand has allowed us as a company to rapidly expand, which has been really exciting,” Barnett says. “It has fueled a lot of new opportunities for our company as far as expanding the size of our operations here in Los Angeles and opening offices in New York, Atlanta and Chicago in order to get closer to our customers.”

The value of expertise Being a cyber specialist has also enabled NAS to expand the nature of its reinsurance offer­ ings and facilitated partnerships with insur­ ance companies that are eager to tap into its cyber expertise. In many cases, these tradi­ tional insurers don’t have the adequate skills, contacts or capacity in-house to fix cyber problems and handle claims.

Traditional insurance companies are also increasingly looking to reinsurance brokers to bring them strategic advice and partners, as well as financing arrangements with London.

Those reinsurance brokers then reach out to surplus lines firms like NAS in search of cyber expertise. In many cases, the surplus lines company will offer a private-label product and also provide support for it.

Enabling insurance companies to offer cyber coverage as part of homeowner’s policies is one example of how surplus lines firms like NAS are playing an increasingly integral role in safeguarding Americans’ online activities.

“With the growth in the Internet of Things in peoples’ homes, whether that’s a Nest thermostat, Ring doorbell or Amazon’s Alexa, there are all sorts of connected devices that can now be targeted,” Barnett says. “Insurance companies want to make sure their clients’ homes and systems are protected, so having some type of cyber homeowner’s policy makes sense.”

Cyber as part of a homeowner’s policy also

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Think Differently About Growing Your Business COMPANIES’ TOP BUSINESS INTERRUPTION CONCERNS

1

2

3

4

5

42%

40%

39%

30%

23%

Cyber incidents

Fire, explosion

Natural catastrophes

Supplier failure, lean processes

Machinery breakdown Source: Allianz Global Corporate & Specialty

provides protection against a broad range of scenarios and risks, including email phishing scams. For example, if a homeowner receives a credible-looking email from a legitimate service provider and voluntarily hands over their banking information, a homeowner’s policy with cyber would reimburse any money that was siphoned from their bank account by cybercriminals.

“Whereas last year ransomware was all the rage, in 2018 we expect to see an uptick in financial fraud claims – email scams that fool individuals into giving their bank or credit card information to imposters and wire-transfer scams that lure companies into sending funds to criminals,” Barnett says. “I also expect a lot of personal cyber issues to arise this tax season as a result of the Equifax breach. My expectation is that many individuals are going to be affected by fraudulent tax filings and stolen W-2 information.”

Another example that illustrates the value of cyber coverage in a homeowner’s policy is less obviously financial: cyber bullying. “If a family member, say one of the children, is a victim of cyber bullying or abuse by someone at school, it can cause a lot of stress and anxiety,” Barnett says. “The person involved may need therapeutic counseling or to transfer schools – all things with potentially considerable costs that the policy will reimburse for.”

The ransomware threat isn’t going to disappear, either. According to Rotem Iram, co-founder and CEO of recently launched cyber insurance and security firm At-Bay, ransomware – which was at the core of some of the biggest news stories of 2017, including the massive Equifax breach – is likely to continue as one of the greatest evolving cyber threats in 2018.

If you’re a professional in the insurance distribution space this conference is a must attend!

Business, interrupted As the far-reaching impacts of cyber threats become better understood, the cyber insurance market has enjoyed a significant boost.

One key element of cyber insurance is business interruption coverage, which covers for lost business earnings during a cyberattack.

This area of coverage is becoming “increasingly important,” according to Iram.

“In 2018, the largest growth area in the cyber insurance market will be mid-market adoption of stand-alone policies,” he says.

“Due to the recent proliferation of cyber threats, business interruption coverage is becoming increasingly important for mid-sized businesses to large enterprises.”

An October 2017 survey conducted by At-Bay found that respondents were particularly concerned about their ability to stop a significant ransomware attack compared to other types of cyberattacks. This highlights business interruption as “a crucial coverage

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FEATURES

SECTOR FOCUS: CYBER INSURANCE

CYBER RISKS CONTINUE TO GROW

area for countering potential ransomware damages,” Iram says. “In 2018, I predict that a new generation of ransomware attacks will threaten corporate enterprises. We expect sophisticated attackers to capitalize on this opportunity and launch targeted business interruption ransom attacks on companies with meaningful digitized operations.”

Evolving technology and the ever-changing landscape of regulatory requirements are putting companies in all sectors at risk. It may be the easy option for business owners to ignore the dangers being created by the rise of cybercrime, but they do so at their peril.

“Many business owners insist that they will not be a target for cybercrime and repeatedly

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Cyber breaches recorded by businesses almost doubled between 2012 and 2017, from 68 per business to 130 per business

A study of 254 companies put the annual cost of responding to a cyberattack at $16.2 million per company – a 27.4% year-over-year increase

In 2016 alone, 357 million new malware variants were released

Ransomware attacks accounted for 64% of all malicious emails sent between July and September 2017

‘Banking trojans’ designed to steal account login details can now be purchased for as little as $500

The cost of cybercrime to businesses over the next five years is expected to be around $8 trillion

Source: The Global Risks Report 2018, World Economic Forum

resist purchasing even basic cyber insurance that could protect, and ultimately save, their business,” says Alan Fiano, cyber underwriter at Great American Insurance Group. “Cyber insurance coverages have been evolving to fit

Main Street America companies, with options tailored to meet the needs of small to mediumsized businesses. Cyber insurance can provide these businesses an outlet to address the damages caused by cyber incidents.”

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S:7.5”

S:10.125”

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FEATURES

VIRTUAL WORKFORCE

How to build a virtual workforce From cutting costs to freeing up brokers to meet clients, ditching the office has a lot to offer if you can get it right, explains virtual working expert Ruth MacKay THE TRADITIONAL boundaries of officebased work no longer apply in the modern business environment. Thanks to the proliferation of mobile technology, professionals can now work from home, on the road, in their favorite café or almost anywhere there is a good internet connection. Never before have workers had so much autonomy over when, where and how they work.

This brings a long list of benefits to the forward-thinking companies that are using virtual workforces to maximize their competitive advantage, attract and retain the best talent, and become first-choice employers, all while cutting overhead costs and increasing productivity.

However, running a successful virtual workforce requires a completely new management philosophy. Traditionally, the manager’s role was to supervise, direct and interact face-to-face with employees.

For most managers, that was easy. With employees at their desks from nine to five, managers could stop by at any time and check in. Now they’re asking: “How can we maintain solid oversight while allowing our employees the freedom to work virtually?”

That’s a good question, and one that can only be answered with solid planning, training and a top-down understanding of how to implement, integrate and manage a virtual workforce designed to address the

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challenges of doing business in the 21st century. Follow these four steps to build an effective virtual workforce that will take your business to the next level.

STEP 1 Evaluate Not every business is the same, so there is no one-size-fits-all virtual workforce that you can simply drag and drop into play. Some businesses will be more suited to a virtual workforce than others, as will certain business units within your company. Take some time to carefully evaluate your business for strategic fit by considering the following: How might a virtual workforce increase your competitive advantage? Consider how a mobile workforce might be able to outpace your competition by providing your clients with on-location service.

How will a virtual workforce impact your market position? Without the overhead drain of maintaining a bricks-and-mortar office, you may be able to offer discounts to high-value clients or become a lowercost provider.

Will a virtual workforce open entry into new markets? Having employees stationed around the country and even around the globe, operating in a range of time zones,

may open up new opportunities to expand your territory and enter new markets.

What is your competition doing? If they have moved or are moving to a virtual workforce, you are definitely at risk of being left behind the eight ball.

STEP 2 Assess Virtual workforces offer a range of potential benefits, but they also require investment in key areas to ensure maximum effectiveness. As with every business decision, you must assess the benefits against the costs to determine if a virtual workforce is the right fit for your organization. Here’s some food for thought to get you started: POTENTIAL BENEFITS The reduction in employee commuting time increases flexibility and improves work–life balance. This leads to reductions in staff attrition and associated recruitment and training costs.

Fewer in-office distractions can improve employee productivity and boost motivation and engagement.

Cutting overhead costs may offer an opportunity to rethink your pricing structure and improve your competitive advantage.

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Sales and IT have worked with all areas of management to identify the most effective management of software, hardware and support.

Each business unit has clearly written policies that can be easily distributed to your virtual employees.

During your pilot program, look for gaps that might require training, new technology or infrastructure. Also, recruit staff – either internally or externally – with the attributes required to work virtually. Plan out the scope, tasks, timing, resourcing, costs and acceptance criteria (use these as the basis for your ongoing management metrics) so that the transition is as seamless as possible.

Be disciplined in completing the plan, and after a meaningful period (this should represent at least one complete business cycle), measure outcomes to goals. This will enable you to construct a new project plan that offers solutions to the gaps in the initial cycle. This may be improved by utilizing relevant outside expertise.

Staff stationed in various locations offers the potential to improve client relationships via face-to-face visits.

STEP 3 Implement

Training and support will be needed to assist employees as they transition to the new technology and work philosophy.

Once your evaluation and assessment are complete, it’s time to enter the implementation stage. Running a pilot program provides a positive pathway to transitioning to a virtual workforce in one part of your business without impacting overall operations.

Most important, you must have the various business units take full ownership of the transition to ensure they have clearly identified both the opportunities and the risks within a virtual workforce. Also, your managers will need to be trained and motivated so they are up to the challenge of effectively leading their virtual employees. To run a successful pilot project, ensure that:

Resources may be required to ensure buy-in up and down the management chain to prevent resistance.

Software and hardware selection and application are approved by all of the company’s units.

POTENTIAL COSTS Investment in new software and hardware technology to support the virtual model will be required.

Initial management training will also be required to convert to virtual workforce management practices and techniques.

STEP 4 Launch Your pilot project will have lessened the overall risk while gaining much-needed support for the virtual model across your organization. With all your evaluations, assessments and planning in place, it’s now time to pick a specific date to launch – because the only way you can identify what will work and what will need improvement is by doing it.

Ruth MacKay is the founder and managing director of Ourtel Solutions, where she manages a 100% virtual workforce. She is passionate about helping businesses gain a competitive advantage, improve profits and retain top talent by leveraging proven virtual workforce models. MacKay is also the author of the new book The 21st Century Workforce. For more information, visit ourtelsolutions.com.

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PEOPLE

CAREER PATH

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PEOPLE

CAREER PATH

ADDING VALUE 1990

With a combination of background, know-how and a desire to stand out, Brad Sporer and Toni Shibayama have come a long way

GETS AN ON-THE-JOB MBA Sporer went straight from college to a career in tech sales, snagging a position at Sun Microsystems. During his time there, he rose to a lead role in a sensitive security division, and the company grew from a valuation of $1 billion to $8 billion “The business education opportunity was out of control. I sometimes think my time with Sun Microsystems was my MBA”

1997 BUILDS HER BACKGROUND The daughter of the founder of S&K Financial and Insurance Services, Shibayama was encouraged to earn her own qualifications, so she went into marketing “My parents told me it was not my lineage that was important, but what I could bring. My experience gave me a thorough grounding in the processes of corporate America”

1999

2000

PIVOTS INTO INSURANCE After he moved to web-hosting company Digex, Sporer’s tech career ended abruptly when the dot-com bubble burst. The silver lining: Sporer met Shibayama, his future wife, while at Digex, and together they made the transition to insurance “We wanted to identify an entrepreneurial endeavor to make our own. It was an unusual transition, but we had confidence”

JOINS THE FAMILY FIRM While working at Digex – where she met Sporer – Shibayama sensed looming disaster under the excitement of Silicon Valley. So she moved into the family business, where the onus to gather clients was on her “I had to bring in my own business. I was able to learn with the backing of a reputable firm, but I realized I had to bring my corporate know-how to the table without losing that boutique personalized service”

2002 SEE THE LIGHT

The same year they married, Sporer and Shibayama found the process of acquiring new clients punishing until they took the step of furthering their education with the demanding Compliance Check course

“We provided nothing that other brokers didn’t; it was frustrating. Then a light bulb went on – we realized we had to provide more value to our clients” 2003

2009 ESTABLISH A PARTNERSHIP The establishment of a strategic partnership with ISU allowed Sporer and Shibayama’s firm to add P&C insurance to their offerings, opening up new relationships with carriers and the buying power of the firm “We needed a partner to help us access the market. ISU is picky – they’re looking for brokers who bring value. We were able to go through that rigorous process to establish a partnership with them”

SPREAD THE WORD Armed with their self-directed education, Sporer and Shibayama found themselves stepping into a teaching role when their firm became a provider of higher learning and continuing education credits “We began hosting seminars, workshops, writing articles, being featured speakers and trainers to many employers. We didn’t talk about insurance; we talked about risk and how to identify it, put in a plan, and then remove or reduce it – and by the way, it all ties into insurance”

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PEOPLE

OTHER LIFE

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

The dogs Piety rescues often fall asleep on the pla ne due to the relaxing effect of the vibration a nd the drone of the engine

FEATURE

WO

50

Estimated number of animals Piety has saved

4–5

Typical hours Piety spends on each Pilots N Paws flight

9,500

Altitude at which most dogs fall asleep in a small plane

W is s

Eve wo slo

A DOG’S DAY When Chris Piety takes to the air, he saves lives FLYING HAS been part of Chris Piety’s life since he worked summers at his uncle’s flight school and would “beg and plead” to be allowed along on charter flights in hopes of an impromptu lesson. Now a private pilot and a vice president at specialty insurance company Aspen Insurance, Piety joined the aerial animal rescue group Pilots N Paws at the suggestion of his son.

An Air Force pilot and fellow Pilots N Paws volunteer, the younger Piety’s first

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flight involved transporting a cattle dog due to be euthanized to the distant home of an adoptive family. For Piety himself, one of the most memorable rescue missions was flying 15 cats to a new home; 10 of them were kittens with persistent cries that could be heard not only over the engine noise, but also through Piety’s noise-canceling headset.

It’s the perfect good deed for a pilot who says he doesn’t like flying passengers:

“I love animals – and they don’t complain!”

Aspen’s policy of allowing employees time off to volunteer has been instrumental in keeping Piety flying for Pilots N Paws, but the critters he’s helping and the people behind the rescue operations also provide a powerful incentive.

“Wonderful people troll the kill shelters to find dogs that have no hope – it’s both tragic and hopeful,” Piety says. “They’re helpless without humans.”

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16/02/2018 3:06:40 AM

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

KNOW ANYONE WHO SHOULD BE READING INSURANCE BUSINESS AMERICA? FEATURES

WORK-LIFE BALANCE

We all know what it 3 Sharper focus. it is happening to our the alarm sound when our lives and see what and feels like to hear and overstimulated. tion’ – overwhelmed fallen asleep – it’s our relationships, our businesses seems like we have just minds constantly health, too bogged down in to affect With our bodies and our goals. When we are Sleep deprivation is known well-being and relaconstantly at awful! ‘switched on,’ our health, to-do list, looking down rational decisions and paying the price. our and our ability to make narrows, view our of field tionships are increasingly devices, our to situations, and it impacts to manage focus our that are right respond Despite our best efforts miss the opportunities can we emotions. and and mood creativity and productivity alongside sleep could be front of us.

Not getting enough are finding that the in to step progress, as a society, we and if you Giving ourselves the opportunity holding you back in business, is not working, day and take a look pursuit of ‘more’ and ‘now’ you could be out of the detail of our not an early riser, then g concern we must provide perspec- are and is an ever-growin period of producat the big picture will missing out on your peak of hand. are moving in the address before it gets out tive on whether we

Why slowing down is vital to business success

Life role evolution

had more time to too fast? Do you wish you Ever feel like life is moving – you just need to The great news is you can work on your business?

Lockwood slow down, writes Angela a lot to do. Whether you’re working for it’s your own business or an endless list; a company, there is always and a mountain of people expect a lot of you,

IN BUSINESS, there is

tasks is vying for your attention. the situation is Whether we like it or not, predictions are not going away, and if future going to slow down. correct, things are not we are in for a long In fact, strap in, because ts in technology, and fast ride. Advancemen of choice and everan overwhelming amount are impacting our changing expectations speed of change and ability to cope with the keep up. the expectation that we will big red button Unfortunately, there’s no when things are press to us of in front ng. Instead, we getting too overwhelmi late, working keep persisting with working through sickpushing on weekends and get the basics done, ness in an attempt to the long hours even though we know aren’t doing us and constant connectivity any favors. to people, techConstant connectivity is resulting in nology and our workloads overwhelming, our work and life becoming off. Our frenetic making it hard to ever switch meeting to the next pace – racing from one is affecting our – next and one client to the slow down, switch off ability to take time out,

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pedal, we are “By taking our foot off the tant gains that allowing ourselves three impor for work while will improve our motivation ctivity and progress” also improving our produ

in particular, we Over the last two decades shift in life roles for have seen a significant e roles and partmen and women. Stay-at-hom tly undertime work that were predominan embraced as being now are women taken by them to pursue options for men, allowing work or share family their passions outside of our circadian Early morning is when so they can partners their be as simple as tivity. responsibilities with alert, our attenright direction. This can rhythms are at their most the window, both develop careers. it’s the perfect a reminder to look out and energy peak, and of work and setting to take in your tion The evolution of our value a frame of going outside to eat lunch to work on priorities, setting on a personal level is on your week time its purpose in our lives rest of the day. surroundings, or reflecting clarity and calm for the expectations of our creating a shift in our partner. a friend or new ways of working with workplaces as we look for down Making time to slow in productive and Ever tried sprinting that allow us to be engaged down is impos2 Renewed energy. to spending The argument that slowing Our addition in work, impossible. meaningful It would be true, and there in today’s society is not our interests. a marathon? to go full throttle sible time with family and pursuing to show how people bodies are not designed and well-being incenwe try is ample evidence From workplace health the skills of periods without rest. When successfully integrating health days and for long our limitations, are lives. tive programs to paid mental push ourselves beyond down into their fast-paced the responsibility to over, and we slowing health education sessions, impossible effects of burnout take down can feel like an well-being is now the energy, focus and Slowing but for employee health and find ourselves without the we lead such full lives, when employer. the scenario and more; it falling to both the employee to get through the day. off isn’t about doing of work roles and motivation are three switching motivation This continual shifting and Energy, focus less! evidence that people business. means doing workplace expectations is of taking time crucial to success in any payoff the factors on focus manage we If to better our bodies are searching for ways health, improved we slow down, we give knowing that When to slow down – better involves, this re-energize, all and and their lives a renewed time they need to rest clearer thinking and are not performing the to illness, meaning energy, without optimal health, we switching off will no boosting their resistance motivation for work – more energy. With at our best. a luxury, but fewer sick days and seem like a cop-out or in our responses to longer if we are to keep up with energy, we become agile less our instead a necessity Doing more by doing challenges; this enhances life. not have to keep unexpected and our the pace of To achieve more, we do to make better decisions, ability we fact, in more; pushing ourselves to do flows. more by doing creativity throttle, slowing are capable of achieving If you live life at full therapist down. By taking our being lazy or Angela Lockwood is an occupational less. How? By slowing can feel like you are programs allowing ourselves down whose retreats, corporate education far from the foot off the pedal, we are and your time. But that is and keynotes help organizations, schools will improve our wasting as a fivewellthree important gains that Resting can be as simple individuals prioritize their health and also improving truth.

Off: stand up from your motivation for work while being. Lockwood is the author of Switch minute break where you breath. Slowing How to Find Calm in a Noisy World and our productivity and progress. desk and take a big, deep Choice.

Conscious of Power The moving keep is necessary if we want to we slow down, we down stamina. and 1 Perspective. When energy with l step back from forward can take a big metaphorica

T S I L A I C E P S BROKERS and refuel. ‘overconnecWe are in a state of chronic

2018

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

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

16/02/2018 3:06:50 AM AM 2/12/2013 7:23:55

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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