Insurance Business America issue 6.05

IBAMAG.COM ISSUE 6.05 | $12.95

AGENTS ON NETWORKS Agents speak out about where their networks are excelling

INSURANCE AND THE SHARING ECONOMY

Consumers want coverage – but who should be responsible for providing it?

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CYBERSECURITY IN THE SPOTLIGHT

As the Facebook scandal puts new focus on data security, are your clients adequately covered?

POST-DISASTER RECOVERY

Checking in on the CAT sector in the wake of 2017’s natural disasters

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ISSUE 6.05

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CONTENTS

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UPFRONT 04 Editorial

How to remain relevant

06 Statistics

AGENTS ON NETWORKS

SPECIAL REPORT

24

FEATURES

THE CAT BOOM

Last year was the worst on record for catastrophes – so how has the insurance industry responded?

18

40

A TRUE PARTNERSHIP

Lawley’s Bill Lawley Jr. shares how his agency is embracing efficiency and mentoring young producers

If your clients haven’t purchased cyber insurance yet, the recent Facebook scandal might change their minds

12 Intelligence

This month’s big movers and shakers

A new tech solution allows insurance companies to offer on-demand service

21 Opinion

Why insurance needs entrepreneurs from other industries

FEATURES 22 Automation: no substitute for great people How to use automation to enhance your staff, not replace it

46 Navigating unfamiliar waters Examining the current state of the marine cargo market

PEOPLE 55 Career path

42

At American Re, Carl Hedde has taken on everything from earthquakes to 9/11

56 Other life

Take a ride in a time machine with antique car enthusiast Michael Schultz

FEATURES

BUILDING TRUST

Commercial property is a thriving sector – and one agents can’t afford not to be involved in

2

10 News analysis

16 Technology update

FEATURES

Sean Ringsted, Chubb’s chief digital officer, discusses how the insurer is blending digital innovation with the human touch

Weighing in on the latest NFIP changes

One insurer is turning to virtual reality to promote workplace safety

Agents told IBA where their networks are providing top-notch service – and where they’re falling behind

INDUSTRY ICON

08 Head to head

14 Workers’ comp update

AGENTS ON NETWORKS

PEOPLE

36

Whose responsibility is insurance in the sharing economy?

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your Future Is Here SIAA provides the resources to help existing and start-up agencies succeed today and in the future.

Strong and Competitive Companies • Quarterly National Incentives Regional/Local Profit Sharing • Marketing Resources Training & Learning • Commercial Lines Training Start-up Agency Training • E & S and Specialty Programs

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UPFRONT

EDITORIAL

Staying relevant as clients change

I

nsurance brokers are accustomed to predictions of doom – hints of a loss of relevance in the face of insurtechs, comparison websites and other disruptors. What they’re less accustomed to, however, is one of their own suggesting that the industry as a whole is losing ground with its clients.

Yet that’s what Aon CEO Greg Case suggested shortly after announcing that he had extended his contract through 2023, which will keep him at the helm of the second largest brokerage in the world for 18 years. “If I ask you, how is the risk industry doing in terms of relevance to the global economy, you have to say we’re becoming less relevant,” Case told The Financial Times.

The examples he gave were stark. Take cyber insurance: Case pointed out that the industry is writing $3 billion in premium at a time when clients in the US alone have reported $450 billion in losses. Insurance, it seems, has focused on selling products rather than innovating – and now it’s being faced with clients who have seen significant changes in other areas of their businesses and lives

Don’t just sell insurance: Be your clients’ risk expert, guide them on mitigation and become an essential part of their business and expect insurance to keep up. Case suggested that businesses want insurers to respond to a “broader definition of risk” and said his company is trying to provide more data and analytics to meet that demand.

But what about the smaller broker who lacks the resources of a major player like Aon? The solutions for progress are there if you look for them: Leverage the data you have at your disposal to make strategic plans for your business, be flexible and accessible with a mobile website and social media that can respond to clients who no longer work straightforward 9-to-5 hours, delve into new products, understand your clients’ businesses on a deeper level, and find a niche that becomes your specialty. Don’t just sell insurance: Be your clients’ risk expert, guide them on mitigation and become an essential part of their business – and leverage the available technology in doing so.

Selling insurance policies should always be part of what you do. But now clients want more, and you need to give it to them – before someone else does.

The team at Insurance Business America

www.ibamag.com MAY 2017 EDITORIAL Managing Editor Paul Lucas Journalists Alicja Grzadkowska, Lucy Hook, Jordan Lynn, Bethan Moorcraft, 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 Geoff Stooke, Janine Garner, Matt Malouf

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

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

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

We provide

BOP CybermoreLiability than Property General Liability Workers’ Comp

Commercial Auto

Employment Practices Liability Insurance

Inland Marine Commercial Package monoline coverage.

Get to know AmTrust.

Discover what we cover at D28.amtrustinsurance.com AmTrust is AmTrust Financial Services, Inc., located at 59 Maiden Lane, New York, NY 10038. Coverages are provided by its property and casualty insurance company affiliates. In TX, coverage is provided by AmTrust Insurance Company of Kansas, Inc.; AmTrust International Underwriters Designated Activity Company; Associated Industries Insurance Company, Inc.; First Nonprofit Insurance Company; Milford Casualty Insurance Company; Republic Underwriters Insurance Company; Republic-Vanguard Insurance Company; Security National Insurance Company; Southern County Mutual Insurance Company; Southern Insurance Company; Technology Insurance Company, Inc.; or Wesco Insurance Company. In WA, coverage is provided

by AmTrust Insurance Company of Kansas, Inc.; AmTrust International Underwriters Designated Activity Company; Associated Industries Insurance Company, Inc.; Developers Surety and Indemnity Company; Milford Casualty Insurance Company; Security National Insurance Company; or Wesco Insurance Company. Consult the applicable policy for specific terms, conditions, limits and exclusions to coverage.

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11/05/2018 1:50:22 AM

UPFRONT

STATISTICS

Sharing responsibility

NORTH AMERICA WHO SHOULD PROTECT THE CONSUMER?

43%

40%

18%

WHO SHOULD PROTECT THE PROVIDER?

34%

50%

16%

In the brave new world of the sharing economy, who should cover whom?

AS INSURERS continue to grapple with the challenges of covering the sharing economy, one thing that’s clear is the demand for insurance on these platforms. In a recent survey conducted by Lloyd’s, the majority of respondents felt that more transparent coverage would expand the number of customers using sharing economy websites and apps like Airbnb and Uber. At present, only 16% of

73%

of consumers expect insurance protection when using a sharing economy platform

49%

of consumers said the risks of using the sharing economy outweigh the benefits

those surveyed had used such a platform, but 70% said they’d be likely to if they knew insurance coverage was part of the deal.

Meanwhile, the majority of respondents also believed transparent coverage would increase the number of people willing to offer services on these platforms. Indeed, 70% of those surveyed said they would consider sharing an asset if it was protected by insurance.

71%

of consumers said they’d be more likely to use sharing economy services if insurance was offered

The platform The provider The consumer

WHERE DOES THE RESPONSIBILITY LIE? When it comes to the question of who should protect the risks of both consumers and providers in the sharing economy, opinion varies considerably around the world. However, there was a common thread: Few respondents considered it to be the duty of the consumer.

78%

of sharing economy providers felt insurance coverage would attract more customers

Source: “Sharing Risks, Sharing Rewards,” Lloyd’s Innovation Report, 2018

LACK OF AWARENESS

THE EXPECTATION GAP

Consumers in the sharing economy are woefully unaware of their protection: Nearly half assumed the platform they used provides insurance coverage, although less than a third actually checked.

Lloyd’s found a disconnect among the parties involved in the sharing economy when it comes to insurance coverage: More than half of consumers believe sharing economy platforms should bear the responsibility of providing protection, while 80% of companies believe that either the consumer or the provider should be responsible for securing coverage.

DID YOU KNOW WHETHER THERE WAS INSURANCE COVERAGE FOR THE SERVICE YOU USED?

WHO SHOULD PROVIDE INSURANCE COVERAGE?

50%

15%

40%

20%

30% CONSUMER VIEW

20% 10% 0%

45%

28%

19%

I assumed there I looked in detail Insurance was specific to ensure there never even insurance was specific occurred to me coverage but did coverage not look in detail

8%

27%

53%

I did not care if there was any coverage

Source: “Sharing Risks, Sharing Rewards,” Lloyd’s Innovation Report, 2018

6

32%

53%

SHARING ECONOMY COMPANY VIEW

The consumer

The provider

The platform Source: “Sharing Risks, Sharing Rewards,” Lloyd’s Innovation Report, 2018

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UK

CHINA

WHO SHOULD PROTECT THE CONSUMER?

WHO SHOULD PROTECT THE CONSUMER?

39%

39%

22%

71%

WHO SHOULD PROTECT THE PROVIDER?

35%

46%

21%

8%

WHO SHOULD PROTECT THE PROVIDER?

19%

66%

29%

6%

GLOBAL 12%

15%

32%

WHO SHOULD PROTECT THE CONSUMER?

WHO SHOULD PROTECT THE PROVIDER?

53%

47%

40%

Source: Sharing Risks, Sharing Rewards,” Lloyd’s Innovation Report, 2018

TAKEN FOR GRANTED Consumers expect to be protected when they take part in the sharing economy: A full 97% believe some sort of risk protection is afforded for consumers and providers should something go awry. However, their perception of how much protection is provided varies.

TO WHAT EXTENT DO YOU BELIEVE SHARING ECONOMY SERVICES PROVIDE RISK PROTECTION FOR THE USER?

Provide complete protection

Provide no protection at all

THE IMPACT OF INSURANCE Although most sharing economy platforms don’t consider providing insurance to be their responsibility, the majority admitted it would have at least some impact on consumers’ decision to use their platform.

WHAT IMPACT DO YOU THINK PROVIDING INSURANCE WOULD HAVE ON A CONSUMER OR PROVIDER’S DECISION TO USE YOUR PLATFORM?

67% 7%

26%

47%

17%

3%

Source: “Sharing Risks, Sharing Rewards,” Lloyd’s Innovation Report, 2018

17% 17%

Some impact; consumers and providers view insurance as a factor in their decision to use our product/ service

Huge impact; consumers and providers wouldn’t consider using our service/product if there wasn’t insurance

No Impact

Source: “Sharing Risks, Sharing Rewards,” Lloyd’s Innovation Report, 2018

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11/05/2018 1:50:54 AM

UPFRONT

HEAD TO HEAD

Do you agree with FEMA’s amendments to the NFIP? FEMA has announced plans to overhaul the NFIP and expand the private flood insurance market. But is it enough?

Albert J. Slap

Mike Brown

President Coastal Risk Consulting “We favor efforts by FEMA/NFIP to encourage the private flood market. There are two main reasons. First, FEMA flood maps have serious limitations in terms of both accuracy of modeling and risk communication. One important reason so few American homeowners have NFIP flood insurance is that FEMA flood maps don’t do a good enough job of conveying actual flood risks.

Second, private flood policies will be much more flexible and will eventually merge flood insurance into homeowner’s policies. Private flood insurance will also do a better job than the NFIP in encouraging risk mitigation by both homeowners and businesses.”

Vice president Golden Bear Insurance “These affirmative steps are a breath of fresh air. Reinsurance for NFIP is long overdue; $1.5 billion was a drop in the bucket, but a billion saved is a billion earned.

Dropping the non-compete clause for WYO companies is also welcome. Reduced barriers to entry will lead to more private carriers in the market. Competition and spread of risk will only benefit insureds.

Reducing the expense ratio by 1% in the compensation equation is harder to call. It’s a small change; it shouldn’t be a disincentive and may save the NFIP a significant amount. I don’t think it will reduce activity, but time will tell.”

Charles E. Symington Jr. Senior vice president of external, industry and government affairs IIABA

“We support eliminating the WYO noncompete rule and are pleased FEMA took steps within their authority to do so.

While we are disappointed with the WYO compensation cut, FEMA is also making other changes to compensation rates to encourage NFIP growth. FEMA has the ability to make adjustments to the expense ratio and does so occasionally.

The 2017 floods have shown that not enough homes have insurance. It’s important that more consumers are covered by flood insurance, whether through the NFIP or the private market, and we are encouraged that FEMA is taking proactive steps to close the coverage gap.”

OPENING UP TO COMPETITION In April, the Federal Emergency Management Agency announced it was making several changes to the National Flood Insurance Program with an eye to diminishing the program’s risk load. The NFIP, which is in the red to the tune of approximately $30 billion, was hit hard by 2017’s particularly destructive hurricane season. Chief among the changes is the end of the non-compete rule, which will allow insurers selling NFIP-backed coverage through the ‘Write Your Own’ program to also sell their own flood policies.

Other changes include reducing compensation to companies that write NFIP policies and taking out $1.5 billion worth of reinsurance against future losses.

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11/05/2018 1:51:33 AM

UPFRONT

NEWS ANALYSIS

The cyber scandal The Facebook/Cambridge Analytica scandal has brought renewed attention to concerns of data privacy and cybersecurity

IT’S LONG been said that almost every company today is susceptible to a data breach, but it’s a warning that has continued to go unheeded by many companies – until now, that is.

Last year was marked by cyberattack after cyberattack, as breaches at companies like Equifax, Uber and Verizon grabbed headlines and unsettled business leaders. Then, just a few months into 2018, social media giant Facebook became embroiled in a complex data scandal, in which it was revealed that data firm Cambridge Analytica had harvested millions of Facebook users’ personal information for use in political campaigns.

data protection laws in Europe, and IT and security professionals continuing to sound the alarm, business leaders are finally waking up to the realities of cybersecurity in the 21st century, says Mark McCreary, chief privacy officer at law firm Fox Rothschild and co-chair of the firm’s privacy and data security practice.

“It’s more widely in the press and part of the daily conversation,” he says. “That has an impact.”

The European Union’s sweeping new General Data Protection Regulation [GDPR] has been causing a stir beyond Europe, thanks to the introduction of hefty fines that apply to

“There’s no question that company heads don’t have any idea what [policies] they need, and I don’t expect them to, frankly” Mark McCreary, Fox Rothschild The Facebook scandal thrust the wider subject of data privacy into the mainstream once again. As a result, organizations and their leaders appear to be growing more aware of the value of the data they hold and the importance of keeping it safe. But how far do we still have to go?

Thanks to an increasing volume of media coverage, the impending arrival of stricter

10

all companies that deal with EU nationals, whether they’re based in the EU or not.

“Whether you love it or hate it, it has really put this topic into the forefront of the conversation,” McCreary says.

Add to that the Facebook/Cambridge Analytica scandal, and the data issue is everywhere. “Think of the number of stories that produced,” McCreary says. “People

may not actually be deleting their Facebook accounts, but they are really starting to pay a lot more attention – and they’re realizing that data breaches don’t all look the same.”

But does greater awareness come with greater take-up of cyber insurance policies?

A recent survey by Fox Rothschild found that an impressive 70% of respondents had cyber liability insurance in place. However, while coverage was common among respondents, the survey found that executives lack a solid grasp of the policies’ limitations, and just 21% had filed a claim.

When it comes to businesses at the smaller end of the scale, figures indicate that both take-up and awareness are far lower. An Insureon poll found that 74% of small businesses don’t have cyber liability insurance, despite the fact that nearly one in six have experienced a data breach.

“Many businesses don’t believe that they

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THE STATE OF DATA SECURITY IN 2018

147 million

Approximate number of US consumers who had their data stolen from credit rating bureau Equifax

87 million

Estimated number of people who could have had their Facebook data harvested by Cambridge Analytica, according to ex-employee of the latter

4

Number of US government departments reportedly among clients of Deloitte, which had a server compromised in attack

have any kind of information available that would be interesting to a hacker, when in fact, whether it’s customer data, credit card infor-

“I think there’s no question that company heads don’t have any idea what they need, and I don’t expect them to, frankly,” he says.

“In many cases, it’s not a question of if, but when, a cyberattack will occur. That’s the kind of message we need to be delivering” Jeff Somers, Insureon mation or purchasing behavior, they probably hold information that would be interesting,” says Jeff Somers, president of Insureon, which specializes in small business cover.

While some argue that business leaders need to do more to improve their understanding of the cyber risks they face, McCreary believes the onus is on brokers to better understand policies.

“When it comes to cyber at the broker level, it truly is a specialty. It’s something that you have to really understand in terms of how the policies are different and how the claims made are different.”

For companies with the resources, McCreary says it’s about education and dollars: bringing in dedicated cybersecurity personnel and making sure that enough

74%

Percentage of small businesses that don’t have cyber liability insurance Source: Guardian, Insureon, Manta

money is being allocated to the cybersecurity budget.

For smaller companies, Somers says it’s up to brokers to get the message out there.

“I think there’s a lot of education and awareness-building that we need to do as a community to help small business owners understand that this is a risk ... and a part of doing business in our day and age,” he says.

“In many cases, it’s not a question of if, but when, a cyberattack will occur. That’s the kind of message we need to be delivering to the small-business community.”

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11/05/2018 1:52:35 AM

UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Alliant Insurance Services

Dumortier Risk Management

The deal is part of Alliant’s plans to expand into Asia

HUB International

ES3 Insurance Services

ES3 is a Vancouver-based employee benefits and pension consulting firm

HUB International

Saffe Property & Casualty

Carey Birmingham, president of fleet sales at Saffe, will join HUB’s transportation division

NFP

Corporate Benefit Analysts Insurance Agency

CBA offers benefits and retirement services in Canada

Sedgwick

Cunningham Lindsey

The merger of the two claims giants was completed on April 16

Seeman Holtz Property & Casualty

Federal Employee Services

Seeman Holtz has acquired the financial services company’s life insurance business

WFG National Title Insurance Company

Inland Professional Title

Inland offers title and settlement services in Washington state

Worldwide Facilities

The Sullivan Group

The wholesale broker is looking to buy all of Sullivan’s outstanding capital stock, apart from GJS Re

AXIS Capital launches new cyber center

AXIS Capital has launched a new global resource for cyber insurance. The AXIS Cyber Center of Excellence will provide a broad range of commercial insurance solutions for tangible and intangible assets. The center will also offer a number of tools to help companies mitigate cyber risks, including risk assessment modeling tools, cyber education courses, data-driven research and reports on the cyber risk landscape, access to mentoring and training services, and services such as pre-breach preparedness and tabletop crisis management exercises.

Alliant snaps up Dumortier

In a bid to fuel its plans to expand into Asia, Alliant Insurance Services has acquired fellow California-based insurance brokerage Dumortier Risk Management. Founded in 2002, Dumortier represents more than 200 hotel owners and developers and has strong cultural ties to mainland China and Taiwan. The entire Dumortier team, including president Chris Chang, will become part of Alliant’s Los Angeles-based real estate team.

“Alliant is well known in the real estate market for our large property placements and our unique habitational insurance programs,” said Alliant chairman and CEO Tom Corbett. “The addition of Chris Chang and the Dumortier team to Alliant adds well known expertise in representing marquee hotel franchises and their owners.”

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Generali updates global casualty offering

The US arm of Generali Global Corporate & Commercial has updated its international casualty offering for multinational corporate and commercial organizations. Originally launched in 2015, the company’s Centurion global insurance and assistance solution provides protection for risks associated with global operations. The latest version offers expanded employee benefits, including benefits for accidents resulting in paralysis, help with children’s education and day care costs, trauma counseling, rehabilitation training, spouse/partner retraining, and benefits for victims of assaults or carjackings.

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PEOPLE K&K targets e-sports

Aon subsidiary K&K Insurance has made its way into America’s growing e-sports – i.e. competitive video gaming – market with a new insurance program tailored for teams and events.

The product includes coverage for sanctioned events, office premises, scheduled premises of e-sport team practices, participation in e-sports competitions, promotional and marketing events, ceremonies, and other customary business operations of the insured team. It is available in all 50 states and can be purchased through K&K’s venues program.

Crawford & Co. aims to boost claims efficiency

Claims management firm Crawford & Co. has announced the launch of TruLook, a new product it says will reduce costs, increase claims processing efficiency and improve customer satisfaction. Using best-in-class technology, TruLook sorts claims into one of three categories: mobile self-serve; WeGoLook, its on-demand field services provider; or traditional field adjusting. From there, each claim is processed with the appropriate level of service and attention, and Crawford monitors each claim, escalating it to higher levels as needed.

SPG launches crane and boom platform

Specialty Program Group has launched a new insurance platform, New Heights Insurance Solutions, which specializes in products for the crane and boom industry. Megan Rose, who joined SPG as part of its acquisition of Norman-Spencer Agency, will serve as president of New Heights. “The creation of New Heights is important for SPG and will launch our construction platform,” said SPG president and CEO Chris Treanor. “We believe in the team’s ability to build durable solutions for the unique needs of the construction client, starting with crane and expanding into related niches.”

NAME

LEAVING

JOINING

NEW POSITION

Andrea Cantlon

N/A

LP Insurance Services

Surety sales executive

Carmella Capitano

N/A

Starr Companies

Senior vice president of primary and excess energy casualty

Conan Dolce

N/A

Starr Companies

Regional vice president, New York

Kristin Marr

N/A

Valen Analytics

President

Andrew Murray

N/A

Starr Companies

Profit center manager, primary construction

Megan Rose

Norman-Spencer Agency

Specialty Program Group

President, New Heights Insurance Solutions

Chris Shanahan

Hannover Re Life

Partner Re

Executive vice president, corporate life development

Said Taiym

AF Group

Lockton Cos.

Executive vice president and chief digital officer

Megan Thomas

AIG

AXIS Re

Chief underwriting officer

Anthony Vidovich

XL Catlin

AIG

Chief claims officer, general insurance

LP Insurance Services names head of surety

LP Insurance Services has tapped Andrea Cantlon to lead the company’s surety effort. The LP Insurance surety team fulfills bond needs for a variety of industries and services all types of bonds, including contract, subdivision, license and permit, court, and professional service bonds.

“I’m excited to announce this update to our department,” said Nick Rossi, president of LP Insurance Services. “Andrea will be working closely with our team throughout the LP footprint in an effort to better serve the needs of our clients and prospects company-wide.”

AXIS Re appoints new CUO

AXIS Re, a subsidiary of AXIS Capital Holdings, has appointed Megan Thomas as its chief underwriting officer.

Based in New York, Thomas will be responsible for product and portfolio management within AXIS Re. Prior to joining AXIS Re, Thomas spent 12 years at AIG, where she held multiple leadership positions.

“Megan is a unique leader grounded in industry fundamentals while also forward-looking on the evolving industry and risk landscape,” said AXIS Re CEO Steve Arora. “She is a proven CUO who brings deep underwriting experience across multiple global markets. We are excited to welcome her to the leadership team.”

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11/05/2018 1:53:28 AM

UPFRONT

WORKERS’ COMP UPDATE NEWS BRIEFS Startup provides coverage for gig economy workers

Insurance startup Bunker has launched an occupational accident insurance product for freelance workers. Bunker offers both occupational accident and workers’ compensation products to freelancers who get work through the Wonolo and Field Nation platforms, and it’s planning rollouts on eight more platforms. “Traditional workers’ compensation doesn’t cover 1099 workers, and their own health insurance will likely deny claims if it’s caused from an on-the-job activity – plus, health insurance would never cover lost wages for disability,” Bunker CEO Chad Nitschke told Forbes.

Navigators forms strategic underwriting partnership

The Navigators Group has formed an underwriting partnership with Protective Insurance to offer workers’ comp insurance. “Leveraging Protective’s long-standing expertise, we were able to respond to our clients’ needs and their requests that we offer workers’ compensation insurance as part of our suite of multiline policies,” said Navigators president Vincent C. Tizzio.

“The addition of workers’ compensation insurance further enhances the customized solutions we deliver via our multiline products, which remove the complexity of placing and structuring multiple lines of insurance.”

Idaho to see another drop in workers’ comp rates

Workers’ compensation insurance rates in Idaho are set to fall another 3.4% in June after the Idaho Department of Insurance approved a proposal from the National Council on Compensation Insurance. The rate decrease, which

14

follows a 5.8% drop earlier this year, will be effective for all policies issued or up for renewal after May 31. “We rarely see mid-year rate change proposals for workers’ compensation insurance,” said Idaho Department of Insurance director Dean Cameron.

“But the passage of the Tax Cuts and Jobs Act reduced the needed premium, so we are happy that savings can be passed on to help Idaho businesses.”

Travelers adds new capabilities to digital workers’ comp platform

Travelers has introduced new digital capabilities to improve the claim experience for injured employees.

MyTravelers for Injured Employees, the company’s web-based and mobilefriendly self-service tool for workers’ compensation claims, offers twoway messaging between an injured employee and a Travelers claim nurse to keep employees engaged in the claim process. Travelers has also added two-way document sharing to the tool, along with a telemedicine feature that allows qualified injured employees to conduct appointments with a physician via a secure video connection on their computer or smartphone.

Ex-NFL star set to face insurance fraud lawsuit

The Ninth US Circuit Court of Appeals has reversed the dismissal of a lawsuit against former NFL defensive tackle and Survivor contestant Brad Culpepper.

Culpepper originally received a $175,000 settlement for injuries that were supposedly incurred in 2000 while playing six games in Los Angeles for the Chicago Bears. However, the Bears’ insurer, TIG Insurance Company, sued Culpepper under California’s Insurance Fraud Prevention Act when it discovered he and his wife, Monica, were appearing as contestants on the CBS reality show.

A new frontier in safety training One insurer is turning to virtual reality in an attempt to increase engagement with workplace safety Workplace safety is hardly ever simple or straightforward. How do you get someone who repeats the same task every day to stay tuned in to safety? Changing human behavior and incentivizing workers to carry out best practices on the job requires communication that packs a punch, so workers’ compensation insurers have been searching for new ways to connect with employees in a more impactful manner.

Forward-thinking insurer Texas Mutual has turned to virtual reality for a solution.

The company’s Safety in a Box VR tool and its accompanying mobile app reproduce common situations on construction and manufacturing sites and enable users to experience realistic workplace accidents.

“We saw VR as a fantastic opportunity to connect with people in a different way,” says Jeremiah Bentley, vice president of marketing and customer engagement at Texas Mutual.

“Safety in a Box’s 3D simulation thrusts people into an immersive experience and puts them through a dangerous and memorable workplace scenario. The message hits home in a very real way.”

Safety in a Box uses the Google Cardboard VR viewer for an accessible VR safety training experience. Users can download the app in English or Spanish, insert their smartphone

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into the viewer and suddenly find themselves in a virtual worksite. The tool was first launched in 2016 for the construction industry, and has now been joined by a manufacturing program, which features scenes of hazardous situations involving an automated

worker in an unshored trench and have that trench collapse on top of the user. That’s an experience you cannot recreate in the real world.

Hopefully, by putting users through a visceral experience, the next time

“Hopefully, by putting users through a visceral experience, the next time they’re in [a potentially dangerous situation], they will think about doing things differently” welder, slips and falls, and forklifts.

“We started with construction because it’s the industry that has the most fatalities, and where the causes of those fatalities have been consistent over time,” Bentley says. “For example, in VR you can place a construction

they’re in a trench that’s not shored off, they will think about doing things differently.”

VR is still very much in its infancy in terms of workplace use. In the two years since Texas Mutual unveiled its flagship construction product, evolution in the VR

world has been significant. The amount of information and detail you can include, the quality of the video, the file size, and the cost have all improved dramatically. The industry is reaching a point where VR work like this can be done at scale, which Bentley says is “a real opportunity” for insurers.

“Generally speaking, there has been a failure among companies to connect with workers about workplace safety on a personal and emotional level,” Bentley says. “We hope tools like Safety in a Box will make the message resonate further.”

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11/05/2018 1:54:35 AM

UPFRONT

TECHNOLOGY UPDATE

Providing a seamless customer experience One tech provider aims to help insurance companies adjust to shifting customer expectations

Tech giants like Amazon, Google and Netflix are piling the pressure on other industries by offering seamless, on-demand customer experiences. But how can insurers and brokers adapt to evolution in the service delivery chain while still meeting regulatory and compliance guidelines?

Software company Pypestream has come up with a solution. It brings the on-demand customer experience to insurance companies by enabling them to connect with clients through a secure channel to provide sales,

NEWS BRIEFS

marketing and support services.

“Think about the communication touchpoints available to us today – in person, phone, website, chatbot, etc. – and imagine being able to connect all of those touchpoints in one efficient and regulatory compliant system,” says Donna Peeples, chief customer officer at Pypestream. “That’s our goal.”

Peeples spent more than 20 years in the insurance industry before joining Pypestream, and she experienced firsthand the struggles the industry is facing.

Hyundai and Verisk partner for UBI offering

Hyundai Motor America has formed an alliance with data analytics provider Verisk to enable Hyundai consumers to take advantage of usagebased insurance programs. Hyundai will provide Verisk with driving data from consenting car owners through its Blue Link connected car service. “Hyundai customers will have access to their portable Verisk Driving Score, which can lead to discount offers on UBI programs and support driver feedback that helps improve their driving,” said Hyundai’s Manish Mehrotra.

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“I’m not suggesting the ‘Amazon-ification’ of insurance, but there are certainly things the industry can learn from Amazon’s on-demand model,” she says. “It’s no secret that consumers don’t get as excited about interacting with their insurer or broker as they do when making an Amazon purchase.”

Artificial intelligence is a major driver

“When you really think about it, the ultimate disruptor in this equation is the customer” behind the on-demand model. Pypestream leverages the capabilities of both AI-powered robots and human agents to enable companies to streamline their consumer engagement and boost satisfaction.

“Think about repeatable tasks like policy admin, answering FAQs and all the forms we ask end users to complete,” Peeples says. “Then consider how many inaccurate or incomplete forms are filed and need chasing up. Imagine being able to get the right information every time by using an AI chatbot as a guardrail to guide the consumer through the process.”

The insurance industry is Pypestream’s fastest-growing vertical, thanks in part to pressure from the Amazons of the world, as well as insurtech startups like Lemonade.

“When you really think about it, the ultimate disruptor in this equation is the customer,” Peeples says. “They want on-demand service.”

Blockchain insurance solution on the way

The first commercial blockchain solution for proof of insurance is seeing the light of day, thanks to Marsh and project partners IBM, ACORD and ISN, which hope to put a new blockchain network into production later this year. “Marsh sees great opportunity in leveraging blockchain technology to better serve our clients,” said Marsh’s Sastry Durvasula. “We believe strategic engagements such as this one … will help accelerate the adoption of further blockchain applications benefiting our clients across industries.”

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Q&A

Fight fraud and build trust Patrick Cox CEO TRUSTID

Fast fact Before establishing TRUSTID, Cox launched and led two other companies in the authentication, identity and telecommunications industries

What is TRUSTID, and why should insurance companies be interested?

TRUSTID provides pre-answer caller authentication that identifies trusted callers before they say hello.

Our goal is to reduce or eliminate the reliance of companies having to ask knowledge-based authentication questions in order to create the trust that’s necessary to conduct business.

We use a system of ‘ownership authentication,’ which quickly determines whether a call is coming from within the four walls of the person’s home it claims to be coming from, or from the cell phone or SIM card that’s associated with the caller. Simply put, we’ve turned the phone into an ownership token, much like a debit card. We can give that token the green light before the insurance company even engages with the customer, which is great because it means conversations can start on a trusted flow.

Why is multi-factor authentication important for insurers and brokers?

There are three key ways to authenticate someone: knowledge-based authentication, inherence and ownership authentication. Knowledge-based should only be part of the equation. Inherence takes authentication a step further by applying biometric markers like finger or retinal scans and facial recognition, and ownership refers to the secure tokens we own, like a debit card with a chip in it.

Businesses cannot rely on one single authenti­ cation factor, which unfortunately is what’s happening in most call center scenarios today. With multi-factor authentication, if a criminal gets ahold of your device, they still have to answer questions and/or pass a

Next Insurance makes COI verification digital

Next Insurance has come up with a digital upgrade to the certificate of insurance [COI] process. The insurer’s digital COI verification feature can confirm, in real time, a service provider’s valid insurance coverage straight from a mobile device or computer. “We’re really excited to be leading the way with our live COI verification functionality,” said Next Insurance COO Sofya Pogreb. “The archaic COI system is something we’ve been aware of for some time. We’ve had many clients complain about the paper trail … being a nuisance for them.”

biometric test. That’s a much improved level of security.

What’s wrong with knowledge-based authentication?

Knowledge-based authentication is broken. When consumers interact with any sort of enterprise, insurance companies being one example, they’re often required to prove their identity by answering questions. The problem is, the answers to these knowledge-based questions are out there for criminals to snap up and use to their advantage.

Criminals know our personal details as well as we do – in fact, in some cases they know them even better because they’ve got the notes right there in front of them. Fraud happens after weak authentication.

What advice do you have for insurance brokers to help them create trusted relationships faster?

What’s great about brokers versus huge insurance carriers is that brokers are naturally closer to the client in many cases. It’s their job to create that trusted relationship. Therefore, authentication is easier and perhaps less risky for insurance brokers.

The challenge arises when they’re faced with a new prospect and they can’t recognize fraudulent signs. Using automated tools reduces the risk of the interaction and helps brokers stay in the business of being welcoming to their prospects and clients.

Brokers want to write policies, service customers and take care of their clients in the best way possible. In order to do that, they need to build trust as early in the call flow as possible.

Marsh launches new digital incubator

Marsh has launched a new digital incubator that will focus on experimenting in emerging technologies and developing innovative products, new business models and strategic engagements.

Marsh Digital Labs is currently exploring new products in small commercial and consumer business, cyber, the gig economy, autonomous vehicles, and workers’ compensation. In addition, Marsh recently joined the Enterprise Ethereum Alliance and is actively experimenting with Hyperledger and other blockchain technologies.

Starmind launches neurosciencebased AI

Starmind International has launched an AI-powered tool inspired by neuroscience, which gathers information on companies and their employees’ knowledge. If a client asks about an aspect of their claim, for instance, the broker can type the question into Starmind, which will supply the name of the claims adjuster who’s best equipped to give an answer.

As the program collects knowledge, it will eventually be able to provide an answer directly, without first directing the question to someone else in the organization.

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11/05/2018 1:55:26 AM

PEOPLE

INDUSTRY ICON

OUT IN FRONT Chubb chief digital officer Sean Ringsted shares his insight on how to strike a balance between investing in technology and calling on the human touch

INSURANCE WASN’T Sean Ringsted’s original calling. But while studying biochemistry on the way to academia’s upper echelons, he had a realization that made him change his career path altogether.

“I reached a point in doing my post-doc that I figured I wasn’t going to be the best researcher,” he says. “I looked around and went into the insurance industry as a trainee actuary in London.”

From there, his work took him around the world, first to the US and then to a small insurance startup in Bermuda, which was acquired by ACE in 1998.

Ringsted, who’s been Chubb’s chief digital officer since last February, says his time at the startup set him up for his future position.

“We were probably one of the first true insurtechs,” he explains. “We were very small, we were very agile, we were very nimble, and we put technology right into the hands of underwriting. So, 20 years later, we’re back full circle.”

While at ACE, Ringsted served in many roles: first on the reinsurance side as the senior vice president and chief actuary for ACE Tempest Re from 1998 to 2002, and then as executive VP and chief risk officer for the next two years. He was named chief risk officer of ACE Group in 2008 and executive VP in 2014, just prior to the company’s acquisition of Chubb in 2016.

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Digital footprint During his career, Ringsted has had a front-row seat to ACE’s evolution. “We set out with a strategy around underwriting,” he says. “Just seeing the strategy play out in the day-to-day execution as we built out a portfolio of different products – in part through

think it a challenge to put together two very large organizations – you’ve got two different cultures and philosophies – but the success was really underpinned by a shared philosophy and love of underwriting.”

Two years after the merger, a key part of Ringsted’s work is making the combined

“Customers are much more demanding. They have an expectation when they’re transacting digitally, and they have an expectation around their customer experience. We have to be able to respond to that” acquisition, in part through organic growth – has been incredibly satisfying. In today’s age, where everything is ‘now’ and transactional, to step back and take the long-term view and be part of something that’s played out over the long term has been very meaningful.”

One standout moment for Ringsted was being part of the team charged with combining ACE and Chubb’s operations following the merger – a difficult job because of the sheer scale and size of the two organizations and their systems.

“We’ve accomplished something that I take a lot of pride in,” he says. “You might

company’s footprint more digitally integrated. Throughout his career, he’s spent a lot of time on the data and analytics side of the business, which has been core in helping Chubb take the next digital step.

“We’re working on a number of fronts, as you might expect – thinking about our front end, the product and the service that we provide to the clients, and the customer experience and making that more digital,” he says.

“Internally, it’s around how we can use some of these new tools and data to make smarter and more effective underwriting and claims decisions, and to make sure that people are

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PROFILE Name: Sean Ringsted Title: Chief digital officer and chief risk officer Company: Chubb Based in: New York City Years in the industry: 26 Fast fact: Ringsted was voted Chief Risk Officer of the Year by his industry peers in 2013

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11/05/2018 1:56:09 AM

PEOPLE

INDUSTRY ICON

doing the right tasks as effectively as possible.”

With a company as large as Chubb, putting everyone on the same digital page can be arduous, but even more of a challenge, Ringsted says, is figuring out what’s working and what isn’t and directing resources to the right projects. Nonetheless, the company’s size has actually made it easier to find solutions.

“If you’re thinking about trying to change a large organization such as Chubb, I think [size] is actually a strength for us,” Ringsted says. “Our size and the products we have and

and if you are providing information to an agent or a broker, we want that to be as efficient as possible.”

However, he also stresses the importance of having real people on the ground during events such as 2017’s natural disasters. During the hurricanes, more than 95% of Chubb’s customers were contacted in less than five seconds by a human being, not a machine or third party.

“We can have all the tools and data in place, but having somebody there at that

“I think we’re really well placed to succeed, [and] we will thrive as a company of the digital age. We’re going to be there to serve our customers with products and services to meet their needs as they go about their lives in the digital economy” the geographies we have give us a lot of opportunities and options to effectively experiment and try out new ideas and products.”

A discussion around digital integration wouldn’t be complete without addressing the cyberattacks that have long been an area of concern for the industry. Chubb has a heightened awareness of these events, and the insurer has solid infrastructure and data breach tools in place to help defend it against cybercriminals.

Customers first When it comes to leading a digital transformation, Ringsted also places a high priority on the consumer and their needs.

“Customers are much more demanding,” he says. “They have an expectation when they’re transacting digitally, and they have an expectation around their customer experience. We have to be able to respond to that,

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time of need is just incredibly important,” Ringsted says.

Chubb will continue investing in innovation – the insurer spends $1 billion annually on technology – and using digital tools to become an ‘in your pocket’ risk manager and advisor to consumers and businesses alike. Ringsted says Chubb’s goal is to eventually evolve from a repair/replace model to a predict/prevent service provider. And he’s optimistic that the company will continue leading the digital way in the insurance industry while staying connected to its clients.

“I think we’re really well placed to succeed, [and] we will thrive as a company of the digital age,” he says. “We’re going to be there to serve our customers with products and services to meet their needs as they go about their lives in the digital economy. All that will be done with a human touch where we need it.”

INSIDE CHUBB

HISTORY Chubb was founded in 1882 when Thomas Caldecot Chubb and his son opened a marine underwriting business in New York City

AROUND THE WORLD Chubb operates in 54 countries and territories, and employs around 31,000 people globally

NEW ERA ACE acquired Chubb in January 2016, forming the world’s largest publicly traded P&C insurer

HEAVYWEIGHT As of the end of 2017, Chubb had $167 billion in assets

PERFORMANCE The insurer has an AA (very strong) rating from Standard & Poor’s and an A++ (superior) rating from A.M. Best

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UPFRONT

OPINION

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

Rise of the entrepreneur A confluence of opportunity, diversification and technological innovation has led established business icons to embed themselves in the global insurance industry, writes Geoff Stooke DESPITE BEING one of the world’s largest and oldest industries, insurance’s pioneers are for the most part unknown to us, with the exception of Edward Lloyd and his coffeehouse. The leaders who have shaped insurance in the past haven’t become household names, unlike those at the helm of other industries such as banking, fashion, consumer goods and technology.

However, that is changing in the face of an emerging trend: the entry of the futurist or business icon into the field of insurance. I refer to them as insurance superentrepreneurs – these innovators have already dominated another industry vertical, and they now have their sights firmly fixed on reshaping insurance.

The most recent high-profile business leader to make headway into the industry is Amazon’s Jeff Bezos, and I am genuinely excited to see what this icon can achieve and what innovation his enterprise will bring to our market.

A more established super-entrepreneur is Jack Ma of Ali Baba. In 2017, Ma, via his investment arm Ant Financial, along with Tencent Holdings and the Ping An Insurance Group, went public with Zhong An, the first wholly online P&C insurer in Hong Kong. The business was primarily focused on insurance solutions for shipping, freight and returned goods (something I’m sure Amazon is watching closely), but Zhong An’s long-term aim is to reshape the insurance industry via the use of technology

across every element of the value chain.

Shia Wininger, well known in tech circles as co-founder and chief technology officer of freelancer site Fiverr, has also turned his attention to the insurance industry by co-founding the paradigm-shifting Lemonade. The market entry of Lemonade, a customer-centered technology solution

after success elsewhere. Buffett’s love of the insurance ‘float’ for investment purposes is well documented, and he has demonstrated time and time again that his value-investing principles have been fundamental to his and Berkshire Hathaway’s success.

I have no doubt that we are only seeing the beginning of this continued movement of entrepreneurs into the insurance industry.

As members of the industry, we are participating in a sacred historical transaction that has been quietly supporting modern progress, commerce and economy for centuries.

When tradespeople needed support as they left farms behind, the insurance guild of the Middle Ages was founded. When new worlds were discovered, insurance protected ships. When Blaise Pascal and Pierre de Fermat pioneered a theory of probability, insurance gave that theory meaning with a social purpose. In our own time, when fire has ravaged or storms have hit, our industry has come to the fore. Wherever there is risk and fear, insurance will always strive to mitigate it.

“These innovators have already dominated another industry vertical, and they now have their sights firmly fixed on reshaping insurance” that uses artificial intelligence and behavioral economics to improve the experience of those buying homeowner’s and renter’s insurance, is so far the most overt confluence of emerging technology and the risk-transfer business.

The insurance super-entrepreneur is by no means an entirely new phenomenon.

Business icon Warren Buffett has successfully positioned himself as a prominent provider of consumer and business P&C insurance for some time via Geico/Berkshire Hathaway Specialty Insurance Group, demonstrating the application of that wonderful Wayne Gretzky quote about moving to “where the puck is going, not where it has been.”

Warren Buffett has an innate understanding of where to be positioned in any industry sector, so it’s no surprise to me that he was the real first mover into insurance

I want the great entrepreneurs outside the industry to know just how important and meaningful insurance is to society and modern progress. Perhaps one day those entrepreneurs who continue to provide me inspiration – Julia Hartz, Robin Li, Ev Williams, Jack Dorsey, Sara Blakey, Reid Hoffman, Peter Thiel, Sean Parker, Brian Chesky, Travis Kalanick, Daniel Ek, Ryan Hoover, Mark Zuckerberg and even Elon Musk – might consider positioning themselves within insurance to support current or future ventures.

Geoff Stooke has more than 10 years of experience in the insurance industry and currently serves as managing director of Modern Risk Solutions.

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11/05/2018 1:57:15 AM

SPECIAL PROMOTIONAL FEATURE

AGENCY AUTOMATION

Automation: no substitute for great people Rather than a replacement for your staff, automation should be viewed as a tool to help them focus on what they do best, writes EZLynx’s Derek Armentrout

IT MIGHT surprise you to hear a software company say, “There really is no substitute for great people” – particularly a company that is pushing the envelope on automation.

But that’s precisely what EZLynx believes.

Automation shouldn’t be a tool to replace people. Instead, it’s a way to make good people great. With automation, your great people are more effective, more efficient, and can focus their time and energy on tasks that add the most value to the agency.

Put another way, a great person’s time is too valuable to be squandered. But that’s exactly what’s happening when a valued member of your agency staff spends time on the types of activities that would be performed so much better by technology.

Personal relationships are the lifeblood of the independent insurance industry.

These relationships are the engine behind an agency’s growth and what sets it apart from its local competition. But as an agency grows, all-too-important personal touches become increasingly difficult to administer.

These personal touches take time, and that’s time that could otherwise be spent cultivating new business.

So, how can you continue to both improve and scale your customer value as you grow?

The answer is automation. Automation is an

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obvious time-saver (less time servicing, more time selling), but its advantages don’t stop there. Automation’s real advantage is the many ways it can improve what you do, not just how fast you do it.

able tasks. Agents should spend their time selling, not copying and pasting boilerplate text into emails – and automation frees them up to do so.

Minimize errors. Let’s face it, humans make mistakes – we make typos, we select the wrong option from a menu, and we commonly get busy and forget a step. Automation rules can create tasks for each step in the process, or even complete the steps without a person needing to be involved. The overall effect is that fewer steps in common processes are left to chance.

Create and enforce SOPs. A less used benefit of automation is to create and enforce standard operating procedures [SOPs] for your agency. When you’re a small agency, it’s relatively easy to train your staff to follow uniform procedures. Staff training can become a major barrier, however, when scaling up a business. Automation can define repeatable processes by creating tasks for your common workflows, and it can also

Automation’s real advantage is the many ways it can improve what you do, not just how fast you do it Automation goals Everybody wants automation. But if you ask them why, you’ll probably receive a generic response about increasing efficiency. Let’s get more specific and identify four ways automation can help improve the performance of an independent agency.

Offload repeatable tasks. There are things you do every day that don’t require difficult decisions, or really much thought at all. Some examples are sending a notification when a customer pays their premium or an overdue notice when they don’t. Running end-of-day reports also falls into this category. Not surprisingly, the most common use of automation is offloading these repeat-

enforce SOPs by checking off tasks as they are completed.

Identify high-value activities. High-value activities for an agent are things like crossselling, identifying new opportunities or educating customers about the value of the product you’re recommending. But it’s not always easy for an agent to know which activities have the highest value. Automation can help identify these opportunities – Which customers have a homeowner’s policy, but not auto? Which customers would benefit from umbrella coverage? – and raise them to the top of an agent’s task list. It can help identify customers at risk and drive the agent to proactively retain the business.

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Best practices Again, the real value of automation is in empowering people to focus on activities that add value. Never lose track of the fact that your people are still the most important part of any process, and keep these processes focused on the customer experience.

With that in mind, we like to follow these best practices at EZLynx: Augment customer contact, don’t replace it. It’s tempting to let automation handle customer communications on the servicing side, but this diminishes the value you provide as an independent agent – that personal touch. Let automation increase your customer touchpoints, not replace the ones you have. For example, a policy renewal

event is a good cross-selling opportunity, and a phone call might have a higher success rate than an automated email. So automate a quick email to the customer on the renewal status, and then follow up with a phone call to discuss their coverage.

Don’t try to fake out your customers.

People today are used to, and appreciate, automated emails – under the right conditions. Notifications that documentation has been completed or payment was received are excellent candidates for automation. But if you attempt to pass off an automated email as personal communication, your customers will see through it.

Remember exceptions. A rule that works

95% of the time might not be so great the other 5%. If your automation rule sends an email to customers, do you want that email going to every customer or only a portion of them? Maybe you’re OK with the email being sent to all customers, or maybe you can handle the exceptions in the automation rule. But if neither option works, this might not be a good process to automate.

Automation isn’t meant to replace great people, but it can make them greater. An effective strategy is key – make sure you identify your automation goals, and make sure your implementation keeps the customer experience front and center. And once things are automated, let your great people do their thing.

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11/05/2018 1:58:14 AM

SPECIAL REPORT

AGENTS ON NETWORKS

AGENTS ON NETWORKS Agents told IBA which networks and alliances are helping them reach new heights FOR MANY agencies, the prospect of entering new markets, training and educating personnel, and forming new relationships and partnerships can be a daunting task requiring precious time and resources that aren’t always available to an independent agent.

Networks, alliances and cluster groups provide a platform for agencies to grow business without many of the hiccups encountered when going it alone. So why do some agencies choose to join a network while

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others avoid it?

For the third year in a row, IBA asked agents across the country to share their thoughts about their network membership Members were asked to rate their network’s performance in 10 key areas on a scale from 1 (poor) to 10 (excellent). The networks that scored an average of 8 or higher in any given category were awarded IBA’s five-star designation for their excellent service.

IBA also surveyed non-members to find

out what’s holding them back from joining a network or alliance. Non-members were also asked to name the benefits that would most entice them to join a network or alliance, as well as divulge the reasons why they’ve chosen to remain on their own.

A total of five networks achieved a five-star rating this year, surpassing stiff competition.

Read on to find out what both members and non-members have to say about the benefits of network membership.

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WHAT IS A NETWORK OR ALLIANCE? A network or alliance is a group of agencies that operate under one master agency code. Because of their breadth, networks give individual agencies access to more insurance companies, products and contacts, allowing them to expand their potential business. Carriers now recognize networks, and most now offer sub-codes to member agencies of a network. In return, agencies share profits with the network or alliance in the form of percentages of commission, monthly fees or both.

WHAT ARE THE MOST IMPORTANT THINGS YOU LOOK FOR IN A NETWORK OR ALLIANCE? IBA asked agents to select the top three most important qualities they look for in a network from a selection of 10 criteria. Here’s what they had to say: Commissions and profit-sharing

81% Access to insurance companies and products

80%

HOW WELL DID NETWORKS PERFORM ON AVERAGE? Commissions and profit-sharing

8.96 Access to insurance companies and products

8.88 Access to niche and nontraditional markets

8.56

Access to niche and nontraditional markets

35% Ability to network with member agencies

25% Overall business consulting

23% Training and education

22% Other

Overall business consulting

8.32 Ability to network with member agencies

8.31 Training and education

8.16 Technology

11%

8.11

Technology

8% Administrative support

7% Marketing

Administrative support

7.80 Marketing

7.79

7% Claims support

1%

Claims support

7.45

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SPECIAL REPORT

AGENTS ON NETWORKS HOW HAS NETWORK PERFORMANCE CHANGED? 10 2018

2017

9

8

7

6

Commissions and profit-sharing

Access to insurance companies and products

Access to niche and nontraditional markets

Overall business consulting

Training and education

Administrative support

Marketing

Claims support

Note: The networking and technology categories are new this year, so were not included for comparison

FIVE-STAR NETWORKS BY CATEGORY

Network

Access to Commissions insurance and profitcompanies sharing and products

Access to niche and nontraditional markets

Ability to network with member agencies

Overall Training business and Technology consulting education

Admin support

Claims Marketing support

Agency Network Exchange Insurance Producers Network Iroquois Group SIAA Valley Insurance Agency Alliance Denotes an All-Star Network

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COMMISSIONS AND PROFIT-SHARING FIVE-STAR NETWORKS

FIVE-STAR NETWORKS

Agency Network Exchange

Agency Network Exchange

Insurance Producers Network

Insurance Producers Network

Iroquois Group

Iroquois Group

Valley Insurance Agency Alliance Importance to members Network performance

ACCESS TO INSURANCE COMPANIES AND PRODUCTS

SIAA

1st 1st

Given that commissions and profit-sharing have consistently remained the top priority for network members, it’s reassuring to see that this year, networks have done their best to respond accordingly. With a score of 8.96 out of 10, this was networks’ best-performing category.

Overall, members remain satisfied with their network’s commission structure. One remarked that “just the profit-sharing structure more than pays our membership fees,” which might assuage other agencies’ fears that the costs of joining a network tend to outweigh the benefits.

Another agent pointed out that the earnings he’s received from being part of a network simply wouldn’t have been possible to achieve on his own. Others praised their networks for offering “additional commissions and higher profit-sharing every year” and “still giving bonuses even after a catastrophic year of weather [disasters]”.

There were few suggestions for improvement in the area of commissions, but one respondent did complain that “individual agencies aren’t necessarily included in the input of [commission] agreements.”

Valley Insurance Agency Alliance Importance to members Network performance

2nd 2nd

Gaining access to more carriers and products is also top of mind for agents when deciding to join a network. Thankfully, networks are also doing well in this aspect, scoring 8.88 out of 10.

“As an independent agent in a small agency, this is crucial,” said one respondent. Through the established name and sheer scale of a network, agents are able to reach “companies that [they] couldn’t otherwise get an appointment with” and are thus “positioned to insure each risk correctly,” while also enjoying “reduced volume commitments with direct access on an as-needed basis.”

Nevertheless, some agents believe networks can do more to expand their offerings. One respondent wished for “access to more of the markets within the network,” while another said that while there are plenty of choices, they do struggle with agreeing on terms, since “companies are wanting more, demanding incentives and production agreements.”

Personal Lines l Commercial Lines l Agri-business

partment s Apartments

essor’s

Ris Lessor’s k Risk

Mixed

UsMixed e Use

Offices Offices

ow to Submit Now to terstate.c apps@abraminterstate.com om www.ibamag.com

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11/05/2018 1:59:32 AM

SPECIAL REPORT

AGENTS ON NETWORKS ACCESS TO NICHE AND NONTRADITIONAL MARKETS

ABILITY TO NETWORK WITH MEMBER AGENCIES

FIVE-STAR NETWORKS

FIVE-STAR NETWORKS

Agency Network Exchange

Agency Network Exchange

Insurance Producers Network

Insurance Producers Network

Iroquois Group

Valley Insurance Agency Alliance

Valley Insurance Agency Alliance Importance to members Importance to members Network performance

3rd 3rd

In today’s insurance landscape, the ability to access niche markets has become more relevant and valuable for agencies looking to remain competitive. Though agents named this benefit a distant third in terms of importance, agencies’ performance in this category has gone up significantly compared to the previous year, from 8.07 in 2017 to 8.56 this year, which suggests that networks have taken the initiative to come up with more niche offerings for agents.

Many of the agents IBA surveyed were pleased with their networks’ efforts to “add appropriate carriers that offer unique markets,” “recognizing [agents’] needs and doing whatever is necessary to better [our] position” and “always working to find markets to give to members” and “[coming] up with niches as part of marketing.” One agent in particular was impressed with his network’s ability “to quote and sell nontraditional products [that are] not even available to captives.”

Although some agents that they don’t necessarily need to access niche markets, it’s nice to know that their network would be able to help should the need arise.

Network performance

4th 5th

Previous surveys have made it apparent that for agents, the purpose of a network isn’t limited just to accessing carriers, but also includes the ability to connect with other agencies, which explains how this new category came in fourth in terms of importance. This suggests that many network members take a cooperative rather than competitive approach when relating to other agencies. Networks seem to have embraced this mindset as well, judging by their overall score of 8.31 out of 10 in this category.

There’s clearly a sense of trust among peer agencies within a network – many agents told IBA they appreciate the opportunity to ask each other questions and lean on each other’s expertise. It’s also “nice to [get to] refer clients to a trusted colleague who specializes in areas that I don’t – a win-win!” one agent said.

Other than setting up message boards and Facebook groups for members, networks also provide other venues for agents to connect with them and each other, such as “weekly webinars to discuss new coverage and marketing strategies,” “quarterly meetings [where people] know most of the members on a personal basis,” and “annual conferences and monthly workshops that provide a lot of networking opportunities.”

What’s important, one agent emphasized, is that “all of this is optional.

[There’s] no pressure to ... do anything we are not comfortable with.”

‘

NETWORK PROFILE

VALLEY INSURANCE AGENCY ALLIANCE Valley Insurance Agency Alliance was formed in 2006 with a mission to perpetuate the independent agency system through consulting, developing relationships and effective integration. Over the past 12 years, VIAA has grown to more than 110 members throughout Missouri and Illinois, averaging 25% organic growth per year throughout the alliance.

This year, VIAA is focusing on leading the digital transformation across its agency member platform. Each month, VIAA hosts a workshop centered on key topics around becoming a digital agency. From Facebook marketing and website structure to digital tools that can increase efficiency, VIAA is committed to leading the charge to help members meet their customers in the digital space. VIAA has also added two new staff members who are dedicated to educating, training and assisting agencies. These sales development coordinators act as another resource for agency owners to bounce ideas off of and provide insight on what some of the best agencies in the country are doing.

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11/05/2018 1:59:36 AM

SPECIAL REPORT

AGENTS ON NETWORKS OVERALL BUSINESS CONSULTING

TRAINING AND EDUCATION

FIVE-STAR NETWORKS

FIVE-STAR NETWORKS

Agency Network Exchange

Agency Network Exchange

Insurance Producers Network

Insurance Producers Network

Valley Insurance Agency Alliance

Valley Insurance Agency Alliance

Importance to members Network performance

5th 4th

Despite falling from fourth to fifth place in terms of importance this year, business consulting remains a vital benefit for agents as they look to networks not only for connections, but also for advice on how they can enhance and leverage their position to get better results.

Performance-wise, the category has gone up a couple of notches since last year, from sixth to fourth place, and agencies’ score has significantly improved, from 7.65 last year to 8.32 this year.

Overall, agents feel positive about their networks’ business consulting services, praising them for being “very responsive and supportive with questions or concerns” and offering “tons of insightful feedback and agency reviews to help us improve.” One respondent commended his network for providing “up-to-date business plans every month,” which helps his agency “know exactly how [we are] performing.” Another respondent found it reassuring that his network had “people with 30+ years of experience – a big benefit for someone just starting out”.

Some of this year’s five-star networks also extend discounts and financial incentives to member agencies, as well as assistance in matters WHAT AGENTS SAID

“[We are enouraged] to ask for advice along the way, whether for claims, policies or procedures” such as contract negotiations, hiring and sharing of staff, and even mergers and acquisitions. Beyond the actual services provided, it’s also about having “a culture of doing things the right way”, as one agent put it, and it helps when a network supports that culture by encouraging agents to “ask for advice along the way, [whether] for claims, policies or procedures.”

In terms of improvements, agents said there are a few networks that need to catch up by being more proactive in offering and marketing their services. One agent remarked that his network seems “always helpful if you find out where to go for advice,” while another said his agency could use some one-on-one consultation sessions.

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Importance to members Network performance

6th 6th

From weekly webinars and workshops to quarterly meetings and annual conferences, networks are doing their best to help member agents stay afloat and get ahead amid an ever-changing industry landscape. Although this category doesn’t rank as highly as the others in terms of priority, agents still appreciate the networks’ efforts – there weren’t any negative comments from survey respondents about networks’ performance in this area, and their overall score was a respectable 8.16 out of 10.

“We are provided weekly training sessions that we can attend at will, in addition to quarterly group meetings with carriers and outside vendors,” one respondent said. Another raved that being able to attend an “annual conference with breakout sessions is a great benefit.” Others mentioned getting assigned specific point people “who can train our personnel on different companies’ websites and rating tools” and “sales development coordinators who work with agency owners to help them maximize profit.”

WHAT AGENTS SAID

“We are provided weekly training sessions that we can attend at will, in addition to quarterly group meetings with carriers and outside vendors” Agents also commended their networks for “top-of-the-line producer training options” and their willingness “to train and educate on new ideas with IE carriers, claims and processing.” Additionally, several agents said they appreciate their network’s efforts in helping them keep up with the digitalization of the business. One agent in particular singled out his network for “offering monthly workshops centered on becoming a digital agency with training from different experts across the country.”

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NETWORK PROFILE

AGENCY NETWORK EXCHANGE Established in 2009, Agency Network Exchange has become a leading network solution for insurance agents. More than 50 successful agencies across New Jersey and Pennsylvania have joined ANE to take their agency to the next level without giving up control of their business.

As a “network of agents, built by agents,” ANE’s model responds to the needs of agencies of all sizes, providing innovative solutions and markets so agents can close more sales, along with active support to help members be better business owners. By pooling premium, ANE members increase contingent revenue, receive more consistent profit-sharing payments than they could on their own and are protected during low-performance years. ANE also provides personalized, consultative support to help agents with everything from perpetuation and succession planning to social media seminars and sales training.

While many agents worry that they will lose their independence by joining a network, ANE member agents own 100% of their agency’s book and business, and receive 100% of policy-level commissions.

THE INSURANCE LANDSCAPE IS CHANGING It’s more difficult to compete for new business – and maintain contingent and commission revenue.

That’s why independent agencies that want to remain truly independent and grow, need significant scale, engaged support, influential carrier relationships and increased contingency revenue.

Just call 609-923-5280 or visit www.ane-agents.com to download our new brochure detailing how we can help you.

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11/05/2018 1:59:48 AM

SPECIAL REPORT

AGENTS ON NETWORKS TECHNOLOGY

MARKETING

FIVE-STAR NETWORKS

FIVE-STAR NETWORKS

Agency Network Exchange

Agency Network Exchange

Insurance Producers Network

Insurance Producers Network

Valley Insurance Agency Alliance

Valley Insurance Agency Alliance

Importance to members Network performance

7th 7th

The tech revolution has swept across the insurance industry, and networks haven’t escaped. While networks have been keeping up with technological demands by offering the latest tech resources to their members, this category came in seventh in terms of performance with a score of 8.11 out of 10.

For many agents, being part of a network helps to alleviate the headache of finding the right technology for their agency. “They do the shopping and evaluating, so I don’t have to waste time on an area of low expertise,” one respondent said. Another agent praised his network for helping him choose an agency management system at a deeply discounted price.

Noting how technology has emerged as a must-have for agencies in recent years, one network member said his network has provided “more [education] about technology and how we can use it at our agency in the past five months than in the previous 10 years.” And a few agents felt that their networks were still lagging behind in providing the most innovative tech tools, highlighting the fact that the constant advances in the space can make it easy for an agency to quickly fall behind on the latest technology.

Importance to members Network performance

8th 9th

Most agents don’t expect their networks to back them up with marketing support, and that sentiment is reflected in networks’ decline in performance this year, moving from sixth to eighth place with a score of 7.79. Agents had mixed reviews for their networks when it comes to marketing, ranging from “limited expectations” to “excellent.” One agent praised his network for offering the marketing resources his agency needs to further its success: “[They] provide us with the tools and ideas to go out and successfully market ourselves. We also bounce ideas off of other members to strengthen each others’ businesses.”

Another agent commended his network for supporting his marketing needs by “[working] with carriers to provide marketing dollars and co-op dollars to help us buy leads and market ourselves.”

Interestingly, one network received both good and bad reviews from its members: Some praised its marketing efforts, while others said they haven’t received much or any help in this area. In fact, several agents bemoaned the lack of marketing support at their networks, saying, “You’re given very little marketing help and otherwise left to sort out your own marketing plan” and “[the network] does not help with marketing or sharing ideas on how to grow.”

HOW CAN NETWORKS IMPROVE THEIR SERVICE TO MEMBER AGENTS?

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Provide true partnership without giving up ownership

Have a centralized recruitment and résumé database

Better access to direct markets and more regional carriers

Offer a unified web strategy, small business center and PEO option

Access to SEO resources and services

More administrative help and advice

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NETWORK PROFILE

SIAA The story of SIAA [Strategic Insurance Agency Alliance] goes back more than three decades to Jim Masiello and his independent insurance agency in New Hampshire. While struggling through a particularly difficult market, Masiello, like so many others, was searching for a way to help his agency grow. As he put together the network of agencies that eventually became SIAA, he did so with a mission to support the growth and continuing success of the independent insurance agency distribution system.

Since then, SIAA has grown into the nation’s largest independent agency distribution channel, with more than 6,750 independent agencies writing more than $7.4 billion in combined premium. By partnering with SIAA, agents seeking to grow the income and value of their agencies gain access to many of the nation’s biggest and best insurance companies at top-tier commissions, along with national and regional incentives and profit-sharing.

“Unlike others who have tried to replicate our success, the SIAA model focuses on quality, not quantity,” Masiello says. “We’re very careful about who we allow into our organization and make sure we are operationally prepared to deliver on our mission.”

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11/05/2018 2:00:00 AM

SPECIAL REPORT

AGENTS ON NETWORKS ADMINISTRATIVE SUPPORT

CLAIMS SUPPORT

FIVE-STAR NETWORKS

FIVE-STAR NETWORKS

Agency Network Exchange

Agency Network Exchange

Insurance Producers Network

Insurance Producers Network

Valley Insurance Agency Alliance

Valley Insurance Agency Alliance

Importance to members Network performance

9th 8th

While networks’ performance on administrative support came in at eighth place once again this year (they earned an overall score of 7.80 out of 10), the category dropped a couple of spots in terms of importance, thanks to the addition of new criteria that agents consider more important.

The scores agents gave in this area were pretty mixed, with a good number of 9s and 10s followed by a smattering of 5s and even the occasional 1. Those who gave lower marks often commented that the service was simply irrelevant.

However, a good number of agents still found administrative support from a network necessary and helpful. As one described: “We are set up with a great management system, and our administrators get us the documents we need from clients, as well as contracting paperwork. Shared CSRs are also provided upon request to help with workloads and customer service.” Another talked about staffing concerns, giving credit to his network for providing “staff that is fully trained, certified and licensed,” which saves them from having to worry about employment concerns. And for the rest, admin support was about getting their money’s worth while having temporary backup as needed, “for when opportunities arise or life gets a bit hectic.”

Importance to members Network performance

As in previous years, network-provided claims support remains the least important consideration for agents when assessing their network, and a performance score of 7.45 out of 10 indicates that this area is a low priority for the networks as well. Less than a handful of agents gave their network a rating of 10 in claims support, while a good number of respondents gave a 5, accompanied by comments saying that this service is “not needed” or “not applicable” for them.

Still, some of those who gave higher marks said they simply liked having the option. One respondent appreciated that “excellent help is there when you need it,” while another said that “for those weird situations, advice and connections are stress-relieving.”

Then there are others who appreciated that their network came to their aid when they did have to deal with a claim. “IPN has been instrumental in helping us with difficult claims, working with carriers and clients to make things go smoothly,” one agent reported.

“There may have been a few E&O claims had IPN not been there for us to advocate on our behalf.” Another agent pointed out that his network “recently added loss review consultation services,” which was also a plus.

WHAT COULD ENTICE YOU TO JOIN A NETWORK?

Technology 25%

Commissions and profit-sharing 50%

Access to niche and nontraditional markets 18%

Marketing 39%

Overall business consulting 14%

Training and education 39%

Administrative support 11%

Ability to network with member agencies 36% Access to more insurance companies and products 36%

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10th 10th

Claims support 7% Talent recruitment 7%

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WHY DO AGENCIES AVOID NETWORKS? Unlike in previous years, when a majority of respondents cited loss of independence as the main reason for going it alone, the time commitment required has now become the main deterrent. Many respondents said they just didn’t have the time to figure out exactly what’s involved in signing up with a network. One respondent who had had a meeting with a network said he wasn’t impressed, describing it as “a business card exchange meeting for 90 minutes” during which “not much went on – a waste of my time.” A couple of others said that in addition to not having the time, they also were “not sure of the benefits” and “what exactly it entails.” This suggests networks need to improve their marketing efforts, make their requirements more straightforward and simplify the registration process.

Other agents were concerned about costs and affordability. “Of the most popular networks that I have heard about, what they ask for to join is too expensive for me,” said one respondent. A number of others had already established relationships with carriers and didn’t think joining a network would necessarily get them more access. In fact, some were concerned that doing so would jeopardize their existing arrangements. “We’re not clear on whether or not we can continue writing for our appointed markets outside of the network and use the network for additional markets we don’t have,” one agent said.

And some were simply committed to staying fully independent.

“I have built a really good agency, and I like independence and would want to pass that on to my family,” one agent said. Another said: “We primarily operate in a small town. We know most of our clients personally and would like to stay independent for our employees.”

When asked which network benefits would entice them to join, agents put commissions, marketing and training at the top of their list. Last year’s top-rated benefit – access to insurance companies – came in fourth this year, tied with networking. However, it was clear that despite these benefits, most non-members seemed inclined to keep to the status quo unless networks had something really new or unusually advantageous to offer.

WHAT’S PREVENTING YOU FROM JOINING A NETWORK OR ALLIANCE? Time commitment 43% Cost/loss of commissions 39%

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314-725-1414 11/05/2018 2:00:18 AM

FEATURES

SECTOR FOCUS: CATASTROPHES

The CAT boom

The total losses attributed to catastrophes last year was nearly double 2016’s total, highlighting the need for comprehensive CAT coverage 36

INSURANCE COMPANIES had a recordbreaking year in 2017, but not for good reasons. In December, Swiss Re published estimates for total economic losses and insured losses worldwide from 2017’s disaster events. The report estimated a preliminary figure of US$306 billion for total economic losses from natural and man-made disasters, but the final numbers, released in April, paint an even more dire picture.

According to the Swiss Re Institute’s updated study, global insured losses from catastrophes in 2017 represent the highest ever recorded in a single year, largely thanks to hurricanes Harvey, Irma and Maria’s combined insured losses of $92 billion.

The total worldwide economic and insured losses attributed to 2017’s disaster events are a gargantuan $337 billion – nearly double 2016’s total losses of $180 billion.

Unfortunately, it doesn’t look like 2018 will see a significant reduction in losses.

Early forecasts suggest that North America could be in for another severe hurricane season and that 2018 could be just as devastating as 2017 – or possibly even more so.

“Predictions are starting to come out for the 2018 season, with most predicting average or slightly above-average activity,” says Andrew Higgins, technical manager for the Americas at Allianz Global Corporate & Specialty [AGCS]. “It’s important to remember that just because they’re predicting an active season, it doesn’t mean any hurricanes are certainly going to make landfall. The predictions can only forecast the frequency and intensity of the storms.

Even if the forecast is for a light season, all it takes is for one hurricane to make landfall, and the damage can be devastating.”

It’s now somewhat difficult to believe that, in the five years leading up to 2017, the US enjoyed a period of benign natural catastrophe activity with no major hurricanes making landfall. Research conducted by the Colorado State University Tropical

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Meteorology Project predicts that the 2018 season will see three major hurricanes, seven hurricanes and 14 named storms, which is moderately higher than the 30-year average of 12 named storms, six hurricanes and two major hurricanes. Accuweather forecasters are also predicting a near normal to slightly above normal year with between 12 and 15 tropical storms.

“At AGCS, we have always told our insureds to be prepared for severe weather, no matter what forecasters are predicting,” Higgins says.

“First and foremost, businesses should test and update their business continuity plans and emergency preparedness plans, especially if they’re located in an area that’s susceptible to hurricanes. They also need to understand exactly what they should be preparing for. If a business is located in a hurricane zone, it might be susceptible to high winds, storm surge, flood or all three at the same time. It all depends on location.”

Preparing for the worst Although recent storms have created unimaginable damage, the reality is that the worst could be yet to come. In an attempt to estimate the financial impact of a potentially devastating earthquake on one of the most dangerous faults in the US, CoreLogic recently released a report entitled “Financial Implications of the HayWired Scenario,” which examined the impact of a hypothetical magnitude 7.0 earthquake along the Hayward fault, located beneath San Francisco’s East Bay, followed by 16 aftershocks with a magnitude of 5.0 or greater.

Although the scenario is hypothetical, CoreLogic stressed that the Hayward fault represents a “clear and present danger of hosting a catastrophic earthquake.” The analysis aimed to shift behavior around earthquakes by examining the potential damage and insured losses if this scenario were to occur, including the effects on construction, property valuations, buy rates,

A RECORD-BREAKING YEAR FOR CAT LOSSES $400 billion

$300 billion

$337 billion

$200 billion

$100 billion

$0

$180 billion

$190 billion

$56 billion

$58 billion

2016

Previous 10year average

$144 billion

2017

Economic losses

Insured losses Source: Swiss Re Institute

“Even if the forecast is for a light season, all it takes is for one hurricane to make landfall, and the damage can be devastating ... We have always told our insureds to be prepared for severe weather, no matter what forecasters are predicting” Andrew Higgins, Allianz Global Corporate & Specialty incremental damage resulting from aftershocks, and hours clauses for insurance conditions. The report offers a scientifically realistic and quantitative depiction of what would happen if a massive earthquake hit the densely populated communities of the San Francisco Bay Area.

“The HayWired scenario is not a prediction of events to come, but it is a realistic portrayal of a series of earthquakes that could credibly occur along the Hayward fault,” says

Tom Larsen, principal of industry solutions for CoreLogic. “Our analysis evaluates the interaction between the physical aftermath of the events, with earthquakes and aftershocks occurring over time, and the financial world of insurance policies.”

CoreLogic found that, in such a scenario, more than 1.1 million homes would be expected to sustain visible damage, and a smaller number would be functionally impaired as a result. The firm estimated

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FEATURES

SECTOR FOCUS: CATASTROPHES

that the total damage to private property would be $170 billion, and only a small fraction of damages would be insured. Insurance payments to property owners were estimated to be approximately less than 20% of the overall damage ($30 billion). The $140 billion financing shortfall presents a real risk to effective regional recovery, Larsen explains.

“The difference between the estimated property damage and the amount recovered by insurance is driven largely by the very low purchase rate of earthquake insurance,” he says. “Of special concern is the potential for systemic impacts triggered by the lack of insurance. A great portion of the property damaged by the earthquake serves as collateral for property mortgages. Delinquency rates are expected to increase after a large earthquake, as has been observed in Superstorm Sandy and Hurricane Katrina.”

THE COSTLIEST CATASTROPHES OF 2017 $100 billion

$80 billion

$60 billion

$40 billion

$20 billion

$0

Hurricane Harvey

Raising awareness Given the research and the data it yielded on the potential consequences of the earthquake, it comes as a surprise that so few people in the area carry adequate earthquake insurance policies. Larsen puts the low purchase rate down to two factors: a lack of awareness and the fact that the infrequency of such events makes them easy to forget.

Despite his attempts to find a better explanation, Larsen describes the reluctance to buy policies as “the thousand-dollar question.”

“We are trying to raise awareness and improve the ability of insurers to assess individual buildings and get a better price rather than just dismiss them as being too risky,” he says. “Brokers and agents have a role to play in raising awareness, and they should be incentivized to help people purchase the right products. They should be part of the group trying to publicize this issue.”

The CoreLogic report is not intended to be scaremongering. Simply put, it’s not a

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Hurricane Irma

Hurricane Maria

Economic losses

Tubbs wildfires

Hailstorms (May/June)

Atlas wildfires Hailstorms (March)

Insured losses Source: Swiss Re Institute

“Brokers and agents have a role to play in raising awareness, and they should be incentivized to help people purchase the right products” Tom Larsen, CoreLogic matter of if, but when, a catastrophic earthquake will strike California. It’s imperative that homeowners and businesses properly prepare for what would be a devastating catastrophe in the San Francisco Bay Area.

“The damage from earthquakes presents a real risk to California, and our ability to influence the effects of earthquakes ranges from building stronger buildings to developing rapid response and rebuilding plans,”

Larsen says. “Eight years [after the earthquakes in] Christchurch, New Zealand, [it] is still in the process of recovery. With a better understanding of a practical planning scenario for the effects of an earthquake, we can begin to rethink how we respond to these disasters and thus improve our ability to recover. Earthquake insurance offers a means to help aid in the financial recovery of a devastating event.”

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FEATURES

AGENCY INSIGHT

A true partnership By expanding its footprint and improving the workplace, Lawley has experienced 63 years of success. Executives Bill Lawley Jr. and TJ Revelas share how

IBA: What is Lawley’s approach to partnering with agencies?

Bill Lawley Jr.: We built our organization over the years by attracting established agencies whose owners want to remain in the business and grow. Their biggest challenges are market access and managing the administrative functions that take time away from selling and servicing clients.

Our agency partners continue to have equity in their branches. They contribute their books of business and talent. Lawley provides markets and expertise in a wide range of client services, including loss control, claims management, practice groups, captives, specialty lines and employee benefits. We also relieve our branches of all of the administrative functions, including HR, accounting, IT, operations, facilities, carrier appointments and compliance. Automation enables us to utilize our entire footprint so we can service our clients from any location.

IBA: How crucial is specialization to your agency?

BL: Specialization is a major contributor to our success. Several years ago, we decided to form practice groups in various market segments where we had a critical mass of clients and in-house experts. Clients appreciate working with staff that concentrates exclusively in their organization’s field. We know their everyday challenges, as well as

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the appropriate insurance coverages and risk management techniques to help them drive down claims and ultimately their cost of risk.

Practice groups also give young producers the opportunity to learn one or two specific industries by surrounding themselves with people who already specialize in that class of business. They can learn the coverages, the marketplace, the business climate and more.

IBA: What is the biggest concern across the industry right now?

BL: Our greatest concerns are perpetuation and attracting the next generation to the business. The industry doesn’t really sell itself as well as it could in terms of explaining the many opportunities for success in insurance.

It’s a real challenge for carriers to find young people to come into the business, and it is certainly very difficult for agencies. Because of this, it’s becoming more and more expensive to invest in youth.

We have seen a lot of carriers remove their brick-and-mortar [locations] to reduce

expenses, so a lot of young professionals are now working out of their homes, where they are not getting any mentoring or training. I think that leads to a sizable brain drain in our industry, especially on the P&C side, where we have a lot of people who are very experienced and a lot of people who are novices.

TJ Revelas: In the employee benefits space, technology is a big challenge for both our clients and for us. There are billions of dollars pouring into employee benefits and HR administration from technology companies, and there are competitors that are giving technology away if you become their broker.

IBA: Lawley has been named a top workplace by a number of different organizations. What do you think makes you a top workplace?

BL: First, you have to have good leadership, and you have to have harmony. We don’t think work should define anyone; we believe that it is important to have a good work-life balance. Also, when you have a cohesive and

CARING FOR COMMUNITIES Focused on giving back to the communities it serves, Lawley formed the TLC [Team Lawley Cares] committee, which meets monthly to discuss the needs within those communities. The committee holds regular donationbased Casual Fridays for employees and allocates the funds raised to various nonprofits. Lawley also donates canned goods, school supplies and more to charitable organizations in its communities, in addition to holding raffles for and volunteering with a variety of organizations.

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“When you have a cohesive and consistent message with your employees and customers, as well as your partners in the industry, you create a culture that attracts and retains top people” FAST FACTS: LAWLEY consistent message with your employees and customers, as well as your partners in the industry, you create a culture that attracts and retains top people.

But I think the biggest asset in being a top workplace is trust. When employees trust the owners and know that they have their backs, they will work hard with pride, and that influences how they treat their customers and peers.

IBA: How has being named a top workplace helped the business?

TJR: We don’t make anything. Our assets walk out the door every night. So how people feel about coming to work and how engaged

they are makes a big difference. Owners cannot be in front of clients all the time, so it is critically important that our staff members who are closest to clients are treated well by the organization, and they in turn treat our customers well.

In terms of recruiting younger people to the industry, our workplace culture has really helped our agency grow. Now we have a concentration of individuals 23 to 35 years of age that didn’t exist at Lawley 10 years ago. Recruiting has been a big challenge, but we’ve made some improvements in that area in terms of attracting the next generation, and our culture has been a big reason why they come and stay.

Year founded: 1955 Headquarters: Buffalo, NY Locations: 10 branch locations in New York, New Jersey and Connecticut Size: $749 million+ in premiums Employees: 400+ Key executives: Bill Lawley Jr., principal (pictured); Chris Ross, principal; Mike Lawley, principal; Dan Murray, chief underwriting and marketing officer; Mark Higgins, chief financial officer; TJ Revelas, employee benefits managing partner

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FEATURES

SECTOR FOCUS: COMMERCIAL PROPERTY

Building trust IBA talked to experts in commercial property insurance to finds out why specializing in this space is a real no-brainer

WHO NEEDS COMMERCIAL PROPERTY INSURANCE? Restaurants and bars Medical centers and hospitals Office buildings Strip malls Factories and garages

COMMERCIAL PROPERTY insurance is required for any individual or organization that owns or operates commercial real estate.

It’s a huge segment that includes everything from factories, restaurants, office buildings and strip malls to apartments and condominiums. Supported by strong economic results and impressive construction data, the commercial property sector is performing well and is primed for further expansion in the coming years. From an agent’s perspective, developing expertise in commercial property is a no-brainer.

“There is strong growth in demand, as we continue to see a fairly robust economy in the US,” says Joe Zuk, commercial division president at Atlas General Insurance Services.

“Construction and infrastructure rehabilitation and remodeling are the big drivers for the property demand. In terms of rates, I would call the market somewhat schizophrenic. In areas susceptible to catastrophic weather events or loss-driven areas, rates are firming. I would by no means call it a hard market – we are still seeing rate decreases in non-CAT areas, and earthquake rates have continued to flatten and trend downwards.”

The extreme weather events of last year led to the highest-ever global insured losses from catastrophes in a single year. In addition to high-profile weather disasters like

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Hurricanes Harvey, Irma and Maria, carriers are also suffering from weather-related events such as hail and convective storms, which historically haven’t been big loss drivers for insurance companies.

“Hail losses are becoming increasingly common and more severe, and the same is true with flood,” says Martha Bane, managing director of Gallagher’s property practice.

“It is very difficult to predict where flood losses will occur, and in Houston, 40% of

Industrial parks Retail stores Apartments and condominiums

Necessary coverage Commercial property owners and operators face an array of standard property and liability risks, including fire, smoke, water, vandalism, leaks and slip-and-fall injuries.

“What has been really key in this market is developing a relationship between the carriers and your clients – it is extremely important they get to know each other” Martha Bane, Gallagher the losses occurred outside of a high-hazard flood zone. We’ve also seen an uptick in nonphysical damage coverage. Clients may not have suffered a physical damage loss, such as the flooding in Houston, but their business may not have been accessible to customers. As a result, coverages for ingress/ egress and civil authority have been increasingly important and more widely available.”

Owners might also face other exposures, depending on the type or location of their building and the nature of their business.

These risks usually require customized endorsements or separate policies and could include coverage for construction or asbestos liability, earthquake, or flood damage. In some cases, it can take more than one policy to properly cover a commercial building.

ORDINARY PEOPLE GETTING THE EXTRAORDINARY DONE

“More insureds are showing an appetite for business interruption and contingent business interruption coverage endorsements,” Zuk says. “Flood coverage that includes winddriven rainwater and water from inland waterways – not just tidal surge – is also getting more popular. Flood is the biggest hazard, and it’s followed by earth movement or shifting ground, which is different from an earthquake and can include landslides.”

Zuk’s firm, Atlas, generally focuses on risks faced by companies who operate apartments, condominiums, shopping centers, retail/wholesale facilities, office buildings, manufacturing and various industrial occupancies, offering all-risks and difference in

requirements on building improvements and retrofits. We also have the flexibility to do manuscript coverage if a potential client has a particularly unique set of circumstances.”

Commercial property insurance plays a central role in the successful operation of thousands of American companies. The failure to purchase a commercial property policy, or the purchase of an inadequate policy, can lead to a catastrophic loss. As Renee Belgarde, vice president and broker at Worldwide Facilities, explains, without the right commercial property coverage in place, many businesses would fail after a experiencing a loss. She gives the example of a successful family business that has been

“More insureds are showing an appetite for business interruption and contingent business interruption coverage endorsements. Flood coverage that includes wind-driven rainwater and water from inland waterways – not just tidal surge – is also getting more popular” Joe Zuk, Atlas General Insurance Services conditions [DIC] commercial property policies. The firm uses the acronym FLEXA to describe the coverages provided under the all-risks policy: fire, lightning, explosion and aircraft.

“The DIC policy can act as a wraparound to the commercial all-risks policy to protect against perils normally excluded in standard forms: earthquake, earth movement and flood,” Zuk says. “The DIC can also include other extensions related to civil actions and suits related to a building owner’s legal

operating for generations that experiences a fire when it’s without insurance coverage.

“Do they have enough money to repair the damages … and replace the damaged equipment?” Belgarde says. “What about their raw materials and finished products?

What about the income that will no longer come in because they are not in operation? Can they afford to keep paying key employees while their business is being repaired? If they have commercial property insurance, then they can have insurance

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FEATURES

SECTOR FOCUS: COMMERCIAL PROPERTY

coverage for this loss. They can get back up and running and have money to help them rebuild their customer base.”

Expertise is key Pricing in the commercial property insurance market is driven by a number of factors, including claims history, location, building age, values, conditions and industry.

Insureds not exposed to heavy brush, flooding or hurricanes, and with no losses or big changes from the prior year, are generally experiencing stable rates. On the other hand, clients that have experienced losses, or are in a loss-prone area or industry, are seeing rate increases. Most commercial property experts expected to see rate increases across the board this year due to 2017’s hurricanes,

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“I think that small rate increases are healthy and sustainable, and insureds can accept that. But carriers coming in with large 20% to 25% rate increases for an insured that has not had significant loss are not justified” Renee Belgarde, Worldwide Facilities floods and wildfires, but Belgarde says there haven’t been any dramatic increases outside of the areas that were directly affected.

“There is still a lot of capacity and

competition out there, which is not allowing for the big rate increases we might have seen in past years,” she says. “I think that small rate increases are healthy and sustain-

TOP 10 WRITERS OF COMMERCIAL LINES INSURANCE 1. Chubb Direct premiums written $16.52 billion

6. CNA Direct premiums written $9.76 billion

2. Travelers Direct premiums written $16.46 billion

7. Nationwide Direct premiums written $8.34 billion

3. Liberty Mutual Direct premiums written $15.06 billion

8. The Hartford Direct premiums written $7.68 billion

4. AIG Direct premiums written $13.14 billion

9. Berkshire Hathaway Direct premiums written $7.65 billion

5. Zurich Direct premiums written $12.56 billion

10. Tokio Marine Direct premiums written $6.26 billion Source: Insurance Information Institute

able, and insureds can accept that. But carriers coming in with large 20% to 25% rate increases for an insured that has not had significant loss are not justified.”

Different industries have different philosophies around risk management, and Bane encourages brokers and agents to become experts within their chosen industry of focus. Understanding a client’s business model and operations will help an agent develop the right commercial property program and enable them to become their client’s de facto risk management resource.

“As insureds become more challenged with these extreme weather events, being an expert in property events is critical for brokers and agents,” Bane says. “What has been really key in this market is developing a relationship between the carriers and your clients – it is extremely important they get to know each other.”

Developing a solid understanding of their markets’ nuances and capabilities is another important step for brokers and agents to take.

Agents should also have a variety of options on hand to meet the requirements of any client.

“Be diversified in your offerings – have options in the standard and non-standard marketplaces, as well as the coverages you can offer your insureds,” advises Alex Silva, vice president of commercial lines at RIC Insurance General Agency. “Brokers and agents should also build deeper relationships with their markets. It’s better to have bigger relationships with fewer carriers – it will give you leverage and help you do a better job for your client.”

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FEATURES

SECTOR FOCUS: MARINE

Navigating unfamiliar waters

The marine insurance space is going through a period of change, but it still represents a good opportunity for brokers and agents

IN THE AGE of Amazon Prime and free next-day delivery, it can be easy to forget how all of the things we purchase actually get transported to us. For most consumers, the thought process really only includes clicking the ‘purchase’ button and then listening for a knock on the door the next day. But for anyone involved in the shipping industry – or those who provide insurance for the industry – the

risks associated with transporting goods are a very real ongoing consideration.

Transporting goods by water is riskier than sending them via road, rail and air, and that’s why marine insurance plays such a crucial role for organizations who transport goods by sea.

Cargo shipments are subjected to numerous perils in transit.

“Cargo shipments can be insured for phys-

THE MARINE INSURANCE MARKET AT A GLANCE Marine insurance global underwriting premiums totaled $27.5 billion in 2016, which represents a 9% reduction compared to the previous year.

MARINE INSURANCE PREMIUMS BY REGION

MARINE INSURANCE PREMIUMS BY BUSINESS LINE

Europe 50%

Transport/cargo 54%

Asia Pacific 28%

Global hull 25%

Latin America 9%

Offshore/ energy 13%

North America 6% Middle East 4%

Marine liability 7%

Africa 3%

Source: International Union of Marine Insurance

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ical loss or damage due to fire, theft, rough handling, perils of the sea, storm, flood, earthquake, hurricane, non-delivery of goods and other transit exposures,” says Patrick Barco, national marine product leader for Burns & Wilcox Canada. “In addition, the most common forms of coverage are all-risks, which are governed by Institute Cargo Clauses A. There are various extensions that can be included under a cargo policy, such as longterm storage in a warehouse and local distribution inland.”

General average is a marine insurance feature that is triggered when a voluntary sacrifice is made to safely maneuver a ship to a port of refuge in order to save the vessel, its cargo and crew from a common peril that endangers the entire voyage. In such cases, all interested parties share a proportion to the value at risk as a general average agreement as per the York/Antwerp rules, Barco explains. “Another common element that is material is incoterms, which would determine the terms of sale in establishing responsibility,” he says.

There are various forms of marine liability exposures, including terminal operators, stevedores, charterers, wharfingers, protection and indemnity [P&I], marine general liability, and freight forwarders legal liability with errors & omissions.

Organizations that require these types of coverage include ports and terminals, ship repair facilities, marina operators, commercial docks, charter operators, and transportation and logistics companies.

“Cargo, which is defined as anything that is transported from one part of the world

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to another, can be insured at terms and conditions provided by the underwriter based on risk exposure,” Barco says. “Stock throughput policy, as well as project cargo – including delay in start-up and advanced loss of profits – can also be written as cargo risk.”

Ships and other marine vessels rely on their marine insurance policies and are often insured for hull and machinery with P&I included. Freight forwarders and transpor-

tation brokers often purchase policies for their legal liabilities, as do terminal operators and companies that engage in ship repairs and other commercial marine activities.

Marine insurance is also required by companies that build, operate, service or repair marine vessels. The main risk exposures and hazards in the ship repair and shipbuilding industries can be attributed to the nature of the work performed on the vessel.

“For example, welding in confined areas,

the number of vessels in the same vicinity, abrasive blasting operations and asbestos removal in older vessels can expose shipyard employees to health hazards such as dust or air contaminants,” Barco says. “These exposures also bring a pollution risk.”

Pricing considerations There are various factors involved in the pricing of marine cargo insurance, including the nature of goods being transported, packaging, mode of conveyance, voyage, insured values, limits of liability, loss history and insuring conditions. Barco describes the North American marine insurance market as soft, although London is currently expe-

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FEATURES

SECTOR FOCUS: MARINE

CHALLENGES FACING THE MARINE INSURANCE SPACE Larger and more complex risks Natural catastrophes Vessel and port accumulations Larger outlier losses

Emerging issues

Commoditization of specialty lines

While technological innovations are improving many areas of industry and commerce, the IUMI is concerned they are actually having

Increase in broker facilities with high commissions and rising expense ratios Underwriters’ need to comply with sanctions and requirements Cyber risk Source: International Union of Marine Insurance

riencing a hard market as Lloyd’s syndicates look for rate increases in the wake of large losses caused by last year’s hurricanes, floods and other natural catastrophes.

“With a downturn in the global economy, most companies have not seen much growth, as few projects are being awarded,” Barco says. “In addition, with global trade friction between the United States and Asia, as well as NAFTA negotiations still on hold, companies are being cautious in their business plans, awaiting outcomes.”

According to the International Union of Marine Insurance [IUMI], the frequency of total losses within the global fleet has stabilized at 0.13% by number and 0.05% by tonnage over the past three years. The IUMI attributes the stabilization to an improved safety climate, improvements in naval architecture and marine engineering, and more effective regulation. The organization also reported that, given an abundance of capacity, the marine cargo insurance market is improving but remains highly competitive.

“All hull markets acknowledge the severe volatility inherent in a typical interna-

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tional hull portfolio,” said IUMI ocean hull committee chair Mark Edmondson when releasing the report. “Although the financial impact of major casualties was modest recently, increasing values of single risks bear the potential risk of new record losses, and attritional losses are a growing concern.”

“As underwriters, we are being challenged to improve our approach and utilize tools such as third-party data, sensor technology and predictive analytics,” Dalton said. “Cyber is also a concern. Most policies remain silent on cyber issues, but the recent Maersk NotPetya attack highlights potential exposures and consequences. Policies that raise the greatest potential risks include freight forward liability covers such as NVOCC legal liability, indirect air carrier liability and errors & omissions.”

Similar to many market segments, marine

“With a downturn in the global economy, most companies have not seen much growth ... In addition, with global trade friction between the United States and Asia, as well as NAFTA negotiations still on hold, companies are being cautious in their business plans” Patrick Barco, Burns & Wilcox an adverse impact in naval architecture and the operation of vessels. Worryingly, the frequency of collisions is increasing, and the IUMI believes that new digital applications could be to blame.

It’s an industry in transition, and the IUMI’s cargo committee chair, Sean Dalton, said cargo underwriters are being stretched to evolve and improve cargo insurance policies. In its report, the IUMI highlighted several challenges currently being faced by the marine insurance space, including larger and more complex risks, natural catastrophes, vessel and port accumulations, larger outlier losses, commoditization of specialty lines, and underwriters’ need to comply with sanctions and requirements.

insurance is going through a period of significant change. Insurance companies are being forced to modernize their offerings, and those that don’t could face an uncertain future.

Opportunities remain for brokers and agents, but in order to truly excel, a well thought-out strategy is a must.

“A tip that I would have for brokers and agents who operate in the marine field is to offer package insurance by combining property, casualty and other specialty risks with marine,” Barco says. “These packages should promote commercial marine insurance, and the target markets to pursue would be manufacturers, export/import companies and commercial marine operators, as well as shipping and logistics companies.”

F

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FEATURES

NETWORKING

How to build a network that drives your success Assembling everyone from your pit crew to your butt-kickers involves much more than cocktails and canapés, writes speaker and author Janine Garner HOW MANY times have you been told that networking is “essential for your growth and personal success”? And yet when it comes to networking, many of us are overwhelmed by the pressure of where to start, confused by what appears to be an overcomplicated world of opportunities to connect online and offline, and overstretched by the demands on our time.

The truth is, the adage “It’s not what you know; it’s who you know” has significantly more weight in this 21st-century world of busyness, in which jobs are filled before they are advertised, previously un-thought-of collaborations appear out of nowhere to create new and competitive markets, forming referral relationships is increasingly hard to do yet is critical to business growth, and everyone seems to be friends with everyone else on social media.

A Harvard Business Review article entitled “Managing Yourself: A Smarter Way to Network” found that “the executives who consistently rank in the top 20% of their companies in both performance and wellbeing have diverse but select networks … made up of high-quality relationships with people who come from several different spheres and from up and down the corporate hierarchy.”

So, the questions to ask are:

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Who is in your network?

How much input or influence do they really have on what you’re doing or trying to achieve?

How much do they truly know you and your goals?

How much can they help you?

Effective networking has to be about the genuine – about the interplay of a select group of people who are working closely together, strategically creating plans to succeed. Here are three key tips to building a network that works:

Identify your critical few British anthropologist Robin Dunbar posited that there is a limit to the number of relationships humans can comfortably maintain – 150, to be precise. He suggested this is the number we can manage to maintain stable relationships with – remembering each other’s names, keeping in contact and doing each other favors. Anything more than this, he said, would result in the creation of other subgroups and tribes.

Momentum starts with a significantly smaller circle of influence that you are securely

in the center of, rather than being mixed in somewhere with all the other participants.

A small group of people providing quality thinking and behaviors will push you further than you could ever go alone. An effective network bridges a smaller number of more diverse individuals with differing levels of expertise and varying ages, genders and experience. Such networks are cross-functional, cross-hierarchical and cross-industry, delivering balance and diverse thinking.

Identify the quality of people you surround yourself with, not the quantity. So, who are the right people to have in your network?

Find your personal cheer squad – your promoters. According to research from the Center for Talent Innovation, people with promoters are 23% more likely to move up in their careers than those without sponsors.

Your own personal cheerleading squad is key to your success. They are by your side through thick and thin, never giving up on you, always dreaming big with you.

Get your support team in place – your pit crew. Your pit crew can make or break a race. They add stamina to help you run the

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Successful networking is about under­ standing the connections you should be making, as opposed to those you are making.

It’s about asking who you need to surround yourself with to inspire you and help you grow.

It’s about being brave enough to seek out and connect with new individuals.

Exchange value

marathon of your dreams, navigate complexities and recover from setbacks. They help you learn from mistakes and keep pushing you on anyway. They celebrate your wins, remind you of your achievements and keep it real.

There’s no doubt that climbing the ladder of success can be a lonely task that requires grit, determination and perseverance. Having the right crew to help you overcome any difficulties and challenges, and keep you mentally tough and balanced, is essential.

Discover people who make you better every day – your teachers. Harvard professor Linda Hill says, “You can’t think of something new unless you are being pushed to think in new directions, and you can’t do that unless you are engaging with people who have a different viewpoint.” A life of continuous learning is essential to growth. The right teachers teach you mastery, guide and stretch your thinking, challenge your ideas, and encourage you to keep learning, because they know that this constant curiosity creates real opportunity for growth, achievement and success.

Have some accountability buddies – your butt-kickers. Linda Galindo, author of The 85% Solution: How Personal Accountability Guarantees Success, believes butt-kickers are our secret weapon for success. “Working with a partner prevents the ready-fire-aim approach that a lot of entrepreneurs use,” she says.

Love them or hate them, we all need buttkickers – those individuals who help accelerate the journey, pushing you to do more and holding you accountable for your actions.

Butt-kickers listen to your dreams and accelerate your goals by making sure you stick to them. They hold you accountable for your actions and decisions and ensure you do what you say you’re going to do – and then some.

Find ways to constantly add value.

Ask yourself if you're doing enough with and for your connections. Consider what more you could do to add value to them and their businesses. Model the behavior you seek in return.

Give knowledge unconditionally, open doors willingly, and share insight to drive continued growth and success for others in order to attract them and engage with them.

Richard Branson famously said that “nobody can be successful alone,” and in our fast-moving business world, we all need a network that works for us. Take a long, hard look at your network and ask yourself: Who really matters?

Who is teaching you mastery and knowledge?

Who is the key influencer pushing you to be and do more, holding you accountable to your dreams?

Who is promoting you, acting as your personal cheer squad, inspiring you to become more?

Who is keeping you balanced and aligned, caring and connecting you with others?

Choose your network wisely. Build a circle around you that allows you to transform and become so much more.

Be brave and diversify Step out of your comfort zone, strategically expand your circle of influence, diversify your connections, and explore other people, businesses and experiences. Consciously consider who else you need to learn from, add value to, engage and collaborate with.

Janine Garner is an internationally acclaimed Fortune 500 mentor, keynote speaker and author of It’s Who You Know: How a Network of 12 Key People Can Fasttrack Your Success.

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FEATURES

REPORTING

Command and control Business strategist Matt Malouf talks through the reports and feedback you need to keep your business running at full speed

REPORTING AND accountability are essential for you to understand what is going on in your business and ensure that tasks are getting done at the correct time and to the standard you expect. Regardless of the size of your business, having your team report to you regularly will be a great measure of their productivity and will inevitably improve yours.

Now, don’t stress and think that the reporting I’m talking about is going to be more work. In fact, reporting will be a vehicle that will allow you to: Motivate your team members to make regular, measurable progress Answer any questions or be clear on where your team needs your assistance Invite your team to provide suggestions and give feedback on what is working and not working Without an effective reporting process in place, it is quite challenging to understand if your team is doing a good job and moving in the right direction. This then leads to many unnecessary conversations and emails so you can understand what is going on.

This takes a lot of time and can be quite frustrating. You may feel out of control and uneasy instead of feeling in control and clear about what is going on in your business each day.

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A good reporting rhythm is essential. I recommend three key reports – daily, weekly and monthly – to provide clarity about what each person is doing and responsible for, along with the confidence that these tasks are

getting done when you need them to be done.

Daily reports The daily report is designed to give you an understanding of what your team member has

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achieved during that day. The report answers three questions: 1 What did you accomplish today?

2 Did you achieve everything that was

scheduled to be completed today? (If no, please list what wasn’t completed and why it wasn’t completed.)

3 Is there anything you need help with, or

do you have any questions?

These questions are designed to keep your people focused on the specific tasks that have been assigned to them, and to also ensure that they are performing their assigned tasks in a timely fashion. They also allow for open dialogue on a daily basis to ensure that tasks and projects are moving forward and aren’t delayed because of you.

Weekly reports The weekly report is designed to be a summary of the week’s activities. Each person needs to report on the success or failure of achieving their key responsibilities and report to you their weekly KPIs. This report will also include answers to the following questions: 1 What was your brightest moment of

the week?

2 What was your biggest challenge of

the week?

3 What did you learn in the last week?

4 Based on the week gone by, I believe we

should stop doing …

5 Based on the week gone by, I believe we

should start doing …

6 I need your help with …

This report will form a good part of the agenda for the weekly meeting you have with your team. The report is designed to allow you to gauge how each person is feeling throughout their workweek, in addition to giving you valuable feedback and ideas on how to continue to grow and develop your business.

Monthly reports The monthly report is designed to be a mini 360-degree assessment of each employee’s performance. The team member will list each task that has been assigned to them, the frequency of the task and the importance of the task. They will then list the date they were trained in the task and who trained them. The person completing the report will then give themselves a score out of 10 on their ability to complete the task with 100% confidence and trust.

This report will then be submitted to the team member’s direct manager (this might be you or somebody else) for them to assess.

Once the assessment is complete, a meeting should occur to discuss the assessment score variances and how these will be rectified.

This will often involve retraining or further system development.

Accountability Accountability often gets confused with someone taking the blame for something.

This is not what we’re talking about here.

Accountability is, in my opinion, about delivering on a commitment. It’s being answerable or responsible to someone for something. It is essential to your ability to stop doing the tasks on your list that can be delegated to someone else, who then becomes accountable for the task or activity.

In order to achieve this, it is essential to implement the following five steps: 1 Set clear expectations. Your people can only be accountable if they understand what is expected of them. Hence, it is important to be clear about the outcome you desire, the timeframe in which you require this to be completed and whether you require them to follow a specific system to achieve the outcome or if they can choose their own adventure.

2 Arm them with the tools of success.

Make sure your people are trained and have all the tools they require to achieve the

desired outcome; otherwise, you are setting them up to fail.

3 Create a simple scoreboard of performance. While you might discuss the specific outcome you desire, it is important to establish some milestone check-ins and progress reports to enable you and the person performing the task or project to clearly understand whether they are ‘winning.’

4 Conduct constructive feedback sessions. Open, honest and constructive feedback is essential to ensure your people understand how they are performing. This is made easier by implementing the first three steps. This will require some tough conversations at times, but remember, the only way for your people to get better is for them to understand what they need to improve.

5 Establish clear rewards and consequences. Most accountability is ineffective because there are no clear rewards or consequences for following through on what you said you were going to do. If a person has succeeded, then they should be rewarded in some way. This could be as simple as acknowledging their achievement – or, if they prove themselves over time, it could lead to a promotion.

If they have not followed through and delivered on their commitment and you feel confident you have set them up to succeed, then you might need to consider assigning the task or activity to someone else or perhaps even moving the person on.

While this might seem simple to follow and execute, this five-step process is often neglected. Take the time to understand and implement this, and you will be amazed at how quickly you see a positive return.

Matt Malouf is a business strategist. This article is an edited excerpt from his book The Stop Doing List, which draws on his work in helping business owners free up time to build their businesses.

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PEOPLE

CAREER PATH

THE GREAT CONNECTOR Throughout his career, Carl Hedde has refined the ability to build bridges between disciplines

A Long Island native, Hedde attained his commercial shellfish license at age 17. He paid his way through college by spending his summers working as a commercial clam digger on the boat he had persuaded his parents to buy him “Working on the bay gave me a sense of discipline; I knew I couldn’t call in sick, or I couldn’t afford to go back to college”

1973

DIGS FOR HIS EDUCATION

1981 CONNECTS WITH TECHNOLOGY Hedde was one of 12 American Re staff members selected to receive a personal computer to take home for a year. He used his computer to develop a contract results database that automated a formerly manual process “The first personal computer was my introduction to technology. I was given the opportunity to make the connection between technology and what we were doing on the business side”

Early ’90s BRIDGES THE GAP When American Re set about to re-engineer itself, Hedde was tasked with leading the business aspect of the huge project “The CEO sat me down and asked me to leave my current role to lead the team – I declined and said I would do both. It was a defining experience: I learned how to better communicate with people. It really refined my leadership skills”

2010 LEADS A FORWARD-LOOKING ORGANIZATION His superior listening skills and ability to bridge various disciplines led to Hedde’s election as chair of the Institute for Business and Home Safety

“It’s an organization dedicated to reducing loss of life and property as a result of natural catastrophes; it’s a forward-thinking role on resiliency in society. This organization gives us an opportunity to save a life”

1979 FINDS INSURANCE Armed with an accounting degree, Hedde joined the external audit department at American Re, where he remains to this day. However, he didn’t fall in love with insurance until he moved into a department that determined the pricing and profitability of reinsurance contracts “I was exposed to the technical details of the business and came to appreciate its complex facets”

1987 PUSHES THE ENVELOPE Tasked with reporting American Re’s California earthquake exposures, Hedde connected with early CAT modelers, which at the time were archetypal startups working out of a borrowed garage “We pushed the envelope to bring this untested product into the organization. We worked with the earthquake model developers to make their products applicable to us; I taught reinsurance concepts to the startup staff, allowing them to build functionality. At the same time, I was learning about hazard and vulnerability concepts from them”

2001 RESPONDS TO 9/11 After the 9/11 terror attack, the work Hedde and his team had already carried out enabled an agile response to the new threat “That was a new realm for us; we applied capabilities developed for hurricane modeling to evaluate our exposures on the WTC loss. The work we had been building up allowed us to understand our exposure very quickly. Building knowledge in many disciplines means you can apply it across multiple fields”

www.ibamag.com

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PEOPLE

OTHER LIFE

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

The Model A might only get 10 miles to the gallon, but Schultz says driving it “makes history come alive”

1928

The year Schultz’s Model A was manufactured

55mph The top speed of the Ford Model A

500

Miles Schultz estimates he’s put on the car’s odometer

DRIVING A PIECE OF HISTORY When Michael Schultz takes the wheel, it’s usually in a car more than three times his age IT’S NOT unusual for Detroit boys to develop a love for anything on wheels, but Michael Schultz, a senior professional liability broker at Burns & Wilcox, has always had an affinity for older vehicles in particular. His interest in vintage cars stems from his love of history – in particular, his fascination with the rapid modernization seen in the late 19th and

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early 20th centuries. Ford’s Model A, Schultz says, is the perfect example.

“The mechanics were a tremendous leap forward,” he says. “It’s fascinating to see the jump in technology.”

Schultz is only the third owner of his Model A – the original owner’s son restored and drove it in the 1950s and 1960s, and then it sat in a garage until Schultz

happened upon it. He says the condition of the floorboards – which appear original – indicate that the car was never left outside in the Michigan winter.

Schultz drives his Model A both for fun and in conjunction with various events; his favorite is the Old Car Festival in Greenfield Village, the country’s longestrunning antique car show.

www.ibamag.com

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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.

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

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