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IBAMAG.COM ISSUE 7.08 | $12.95
2019
TOP INSURANCE WORKPLACES PRESENTED BY
A M E R I C A
What the industry’s best-rated companies are doing to leap ahead of the rest CATERING TO CONTRACTORS
From opioids to untrained workers, the key issues brokers need to monitor
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STAND-ALONE TERRORISM COVERAGE Exploring new options for clients as TRIPRA’s future hangs in the balance
THE FUTURE OF FLOOD
How to dive into the growing private flood insurance market
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ISSUE 7.08
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CONTENTS
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34
2019
UPFRONT 04 Editorial
Fostering more opportunities for women
05 Head to head
Suggestions for closing the flood insurance gap
06 Statistics
Key data that should be on your radar this month
FEATURES
WHEN IT RAINS, IT POURS
22
In an era of increasingly severe flood events, what are homeowners’ best bets for coverage?
PRESENTED BY
How data is enabling more streamlined risk control in workers’ comp
TOP INSURANCE WORKPLACES 2019
INDUSTRY ICON
Even after three decades in the field, Safety National CUO Gus Aivaliotis finds himself confronting new underwriting challenges every day
18 2
10 Intelligence
12 Workers’ comp update
SPECIAL REPORT
PEOPLE
As the TRIPRA renewal deadline looms, should clients start exploring new avenues for terrorism insurance? This month’s big movers, shakers and new products
A M E R I C A
Find out which industry employers are going above and beyond in areas like compensation, culture, diversity and more
08 News analysis
FEATURES
38
REELING IN THE NEXT GENERATION
Insurance veteran Kyle Samuel on how the industry can make itself more appealing to millennials
14 Technology update
An efficient way to assess small business clients’ cyber risk
21 Opinion
It’s time to treat customer data like the currency it is
FEATURES 44 How to get what you want from difficult people
Three ways to spin confrontations to your advantage
PEOPLE 47 Career path
40
Jennifer Metzger has built her career on a foundation of teaching and learning
48 Other life
Nancy Greenidge’s life in song
FEATURES
SOLID FOUNDATIONS
How coverage for contractors is being affected by the opioid crisis, a talent shortage and more
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2/08/2019 4:44:06 AM
UPFRONT
EDITORIAL
www.ibamag.com MAY 2017 EDITORIAL
Giving women a voice in insurance
T
ake a look around you – what do you see? Chances are that, as an insurance industry employee, you probably see a lot of men in suits. Most will probably also be over 35 and white. Your colleagues may be extremely hard-working and thoroughly deserving of their jobs, but there’s a phrase that rings true: We can’t be what we can’t see. For women in the insurance industry, it’s tough to imagine thriving in an executive position when they only see men in senior roles. This suggests that either companies haven’t been able to retain their female employees long enough to promote them, or they simply overlook them for promotions. Whatever the reason, it’s prompting women to leave the industry. According to Ericka Fang, associate attorney at Kaufman Borgest & Ryan, women tend to leave insurance if they don’t feel like they’re getting suitable recognition in four key areas: assignments, opportunities, compensation and promotion, and mentoring.
“If women don’t feel like they’re getting equal opportunities ... they’re leaving to join other companies or industries” “If women don’t feel like they’re getting equal opportunities in those four key areas, they’re leaving to join other companies or industries where they see women in managerial, supervisory and executive roles,” Fang told IBA. “They want to work in companies and industries where they see women thriving.” Many top insurers have made steps in the right direction by reporting their gender pay gaps – but in most cases, that has just highlighted the continued disparity that’s a result of men earning more because they occupy the bulk of senior leadership positions. “Women want fair compensation and a fair and transparent promotion structure where they can know what’s expected of them and whether they meet the mark or not,” Fang said. “Whether companies want to be transparent or not, employees are much more transparent in the age of social media, which is going to force companies to make changes.” With Lloyd’s and others recently embroiled in sexual harassment controversy, insurance clearly still has a long way to go in treating women with parity. That’s why we hope you’ll join IBA in giving women the voice they deserve at one of our upcoming Women in Insurance Summits in Chicago on September 10, New York on September 17, San Francisco on October 3 and London on October 10. The team at Insurance Business America
Managing Editor Paul Lucas Deputy Editor Bethan Moorcraft Journalists Alicja Grzadkowska, Lauren Ingram, Nicola Middlemiss, Ksenia Stepanova News Writers Lyle Adriano, Terry Gangcuangco, Roxanne Libatique, Gabriel Olano Staff Writers Tom Goodwin, Libby MacDonald, Aidan Macnab, Joe Rosengarten, Ryan Smith Copy Editor Clare Alexander
CONTRIBUTORS Stephen Cheeseman, Aytekin Tank
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 Global Head of Communications 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 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, Seoul
Insurance Business America is part of an international family of B2B publications, websites and events for the insurance industry Insurance Business Canada john.mackenzie@kmimedia.ca T +1 416 644 874O Insurance Business UK gemma.powell@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
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2/08/2019 3:40:32 AM
UPFRONT
HEAD TO HEAD
What can be done to close the flood insurance gap? Despite the increased likelihood of flooding across the US, many homeowners still don’t carry flood insurance
Dr. Ellen Cousins
Craig Poulton
Holly Widen
Chief science officer Athenium Analytics
CEO Poulton and Associates
Product manager, Americas climate models RMS
“The best way to close the flood insurance gap is to create a viable private marketplace. Currently, the federal government underwrites and subsidizes 96% of flood policies. A private market will take off if private carriers have better tools to select and price risks appropriately. Currently, flood insurance relies on incomplete FEMA maps and a patchwork of sources. Even non-natural borders such as state boundaries can significantly disrupt risk estimates. New technologies and modeling techniques are bringing increased precision, uniformity and user-friendliness to all phases of the flood insurance marketplace, helping the industry close the coverage gap for good.”
“First, the NFIP must raise rates. This will stop incentivizing people to build where life and property are at risk and encourage competition, thus creating greater consumer choice. Second, creating more accurate 100-year flood maps will have the effect of doubling the number of structures required to purchase flood insurance. This will, in turn, double the funds available to pay flood insurance claims for structures located in flood-prone areas. Third, the NFIP must stop interpreting its own regulations in such a way that consumers and the private market are impeded in their efforts to close the flood insurance gap.”
“Fostering confidence by developing a granular understanding of US flood risk is a necessary first step. Today’s market needs to be able to identify suitable risks, implement refined underwriting guidelines, manage exposure accumulations effectively and design profitable growth strategies. More advanced tools and model techniques will enable the industry to discern the high-gradient nature of flood to accurately quantify potential risk. We’re delivering flood solutions that include flood defense failure scenarios and over a million plausible events. To close the gap, insurers and reinsurers need to be able to prepare for the potential financial impacts of future flood catastrophes and mitigate them.”
MIND THE GAP Despite the fact that the National Flood Insurance Program provides 5.1 million policies and more than $1.3 trillion in coverage, uninsured losses in the wake of a flood can be high – in the South Carolina floods of 2015, the average NFIP penetration rate in counties with a federal disaster declaration was just 5%. All 50 states have experienced floods in the past five years. As recently as mid-July, insurance losses from Hurricane Barry were estimated at close to $300 million, according to Karen Clark & Company. That figure includes privately insured wind and storm surge damage, but not losses covered by the NFIP.
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UPFRONT
STATISTICS AMERICAN CITIES CRIPPLED BY CYBER ATTACKS
-1.0%
UNITED KINGDOM
$101 billion
+3.1%
CANADA
$74 billion
$460,000
Ransom paid by Lake City, Florida, in June after a cyber attack disabled many of the municipality’s systems
$10,000
Amount paid by Lake City itself; the balance was paid by the city’s insurance
TOP 10 INSURANCE MARKETS BASED ON PREMIUM INSURANCE PREMIUMS HIT NEW HIGH
+2.5%
UNITED STATES
$876 billion
Global insurance premiums exceeded $5 trillion for the first time ever in 2018, according to new data from the Swiss Re Institute. It attributed the milestone to a strong 3% increase in non-life insurance lines, which compensated for a subdued performance from life.
NO LONGER A GRUDGE PURCHASE?
$600,000
In a recent study of millennials’ attitudes toward insurance, Cake & Arrow and Coverager found that this generation does value insurance and the financial stability it brings – but very few are excited about purchasing it.
Amount another Florida city, Riviera Beach, paid to cyber criminals the week prior
$18 million
Estimated total damages to the city of Baltimore after it refused to capitulate to a ransomware demand in May Source: The New York Times, The Baltimore Sun
MILLENNIALS’ ATTITUDES TOWARD INSURANCE Insurance protects me and my family
42%
I buy insurance because I have to
38%
Insurance is worth every penny
4% 0%
10%
20%
30%
40%
50%
Source: Millennials and Modern Insurance, Cake & Arrow/Coverager, 2019
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EMERGING FORCES IN PREMIUM GROWTH
-0.1%
+2.7%
GERMANY
Much of the growth in global insurance premiums in 2018 was driven by emerging markets in Asia, particularly China, which currently commands 11% of global insurance premiums but is expected to have a 20% share of the market by 2029.
JAPAN
$145 billion
$106 billion +1.4%
US and Canada Advanced EMEA Advanced Asia-Pacific China Emerging Asia (excluding China) Other emerging markets
TAIWAN
$20 billion
100% 80%
+1.1%
ITALY
$45 billion
-2.5%
$81 billion
18%
33%
11%
60%
40%
30%
$93 billion
0%
1980
In order to change consumers’ attitudes about insurance, the industry has to move beyond marketing on price, Cake & Arrow and Coverager concluded in their report. Currently, the most popular insurancerelated Google search terms on a monthly basis are either brandless or focused on frugality.
1,830,000 CAR INSURANCE
450,000 CAR INSURANCE QUOTES
246,000 AUTO INSURANCE
INSURANCE QUOTES
2018 (estimated)
2029 (forecast)
USING DATA TO BUILD RELATIONSHIPS The use of data is transforming the risk management and insurance space. A good proportion of the risk managers recently surveyed by QBE and Airmic believe they’ve been effective in using data to strengthen their relationships with insurers over the past year.
HOW EFFECTIVE HAVE YOU BEEN AT USING DATA AND ANALYTICS TO STRENGTHEN INSURER RELATIONSHIPS OVER THE LAST 12 MONTHS?
HITS PER MONTH FOR INSURANCE-RELATED SEARCH TERMS ON GOOGLE
301,000
28%
Source: Sigma 3, Swiss Re Institute, 2019
Source: Sigma 3, Swiss Re Institute, 2019
OVERCOMING THE PRICE EXPECTATION
22%
44%
20%
$262 billion
8% 6% 16% 20%
31%
CHINA
FRANCE
18%
3%
SOUTH KOREA +1.8%
-0.9%
1% 7%
4%
40% 30%
550,000 CHEAP CAR INSURANCE
Source: Millennials and Modern Insurance, Cake & Arrow/Coverager, 2019
20% 10% 0%
Very ineffective
Ineffective
Neither ineffective nor effective
Effective
Very effective
Source: Turning Data into Information, Airmic/QBE, 2019
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2/08/2019 3:41:42 AM
UPFRONT
NEWS ANALYSIS
The threat on the horizon A looming deadline and an evolving risk have injected uncertainty around terrorism insurance into the marketplace
UNCERTAINTY RARELY bodes well for the insurance marketplace – and right now, the subject of that uncertainty is the Terrorism Risk Insurance Program Reauthorization Act [TRIPRA], which is scheduled to expire in December 2020. Based on past events, industry experts believe it’s likely that an extension or reauthorization of TRIPRA won’t be addressed in Congress until the expiration date draws closer. Until that time, it’s unclear what the renewal of TRIPRA’s structure and coverages might look like, leading both carriers and insureds to explore their options for terrorism insurance. “TRIPRA in its various forms has, since
certain whether TRIPRA will be reaffirmed as it currently stands or whether structural changes will be made to the program. Several experts have suggested that the retentions may be increased, for example.” Because of this uncertainty, O’Connell has already seen increased interest in standalone terrorism coverage. “Clients already are talking to us about alternatives to TRIPRA or ways to fill any gaps in coverage, should it not be reaffirmed or be affirmed in a different format.” According to Timothy Guiltinan, executive vice president at H.W. Kaufman Group subsidiary Global Excess Partners, exploring
“[Terrorism] is something that’s not going to go away, no matter how well we protect our borders” Timothy Guiltinan, Global Excess Partners 2002, provided a valued federal backstop for both insurers and their clients to help manage and co-pay terrorism exposures in the US and ensure that terrorism coverage is available and affordable for US properties and businesses,” says Daniel O’Connell, AXA XL’s global head of terrorism, war and political violence insurance. “Nobody knows for
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stand-alone coverage is a smart move, regardless of what happens with TRIPRA. “It’s something that risk managers and insureds should make themselves more familiar with,” he says. “In many instances, it’s a more cost-effective product. The stand-alone product is also a more comprehensive product. In most instances, it should pay out quicker
than TRIPRA coverage would [because] it’s not dependent upon certification by the State Department of a terrorist act.” By its very nature, TRIPRA will always have an expiration date, O’Connell adds. However, by working with long-term standalone insurance capacity, clients can ensure that they have a degree of certainty, no matter what the future of TRIPRA holds. In any form, insurance protection from acts of terrorism remains vital for organizations, especially as the threat continues to evolve. The methods used by terrorists have shifted in recent years, requiring new risk management and insurance coverage responses, even as there’s more awareness today about the resources needed to manage the threat. “While the threat of a large-scale attack remains, increased resources have been devoted to the detection and prevention of terrorist events around the world, making it harder for terrorist groups to stage large-scale
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2/08/2019 3:42:11 AM
THE GROWING THREAT OF TERRORISM
In 2017 (the most recent year for which data has been released), there were 10,900 terrorist attacks around the world, which killed more than 26,400 people
Since peaking in 2014, the number of terrorist attacks and deaths globally has been declining
attacks,” O’Connell explains. “In recent years, however, a new threat has emerged – that of ‘lone wolf ’ attacks carried out by individuals or very small groups. These plots, which are often more focused on causing loss of life and garnering attention than on causing economic
“We’re seeing instances where, for example in Sri Lanka, the terrorist couldn’t get to his target, so he blew up a random guest house,” Guiltinan says. “So, while there are target areas that are always exposed, there are also random acts, and that’s some-
“Nobody knows ... whether TRIPRA will be reaffirmed as it currently stands or whether structural changes will be made” Daniel O’Connell, AXA XL damage, can be hard to detect. As well as being different in nature, these events tend to be more frequent than large-scale attacks.” The areas that are most exposed to terrorist threats are ones that allow for large gatherings of people, especially in major metropolitan areas – but the geographical targets of terrorism are also changing.
thing that a risk manager should also be familiar with.” As with many catastrophic events, when acts of terrorism do occur on US or foreign soil, organizations’ interest in the coverage tends to increase, emphasizing its important role in the insurance marketplace. “When there is a terrorism act, like the
Terrorist violence remains extremely high compared to historical trends – the number of attacks in 2017 was 28% higher than in 2012, and the number of deaths due to terrorist attacks was 71% higher than in 2012
In the decade before 9/11, the number of global terrorist attacks and resultant deaths each year was less than one-third of the 2017 figures Source: The National Consortium for the Study of Terrorism and Responses to Terrorism
recent one in Sri Lanka, you’ll find that once it’s on the news, risk managers and insureds are more interested in the cover,” Guiltinan says. “It’s part of our everyday lives, and we have to be more careful and more diligent.” As a result, he adds, he’s seeing “a stronger demand for terrorism coverage [today] because it’s something that’s not going to go away, no matter how well we protect our borders. We still see terrorists and groups like ISIS and Al-Qaeda willing to continue [conducting] terrorist acts.”
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2/08/2019 3:42:16 AM
UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
Allianz
Sul America
Allianz has made a non-binding offer to purchase the Brazilian insurer’s P&C and auto units
Crawford & Company
Penta Expertise & Consult
Based in Antwerp, Belgium, Penta offers a range of specialized loss adjusting services with a focus on construction
Gallagher
Renomia
Gallagher has agreed to purchase a minority stake in the Czech Republic-based commercial insurance broker
High Street Insurance Partners
Tompkins Insurance Agency
TIA will become part of High Street company KorthaseFlinn Insurance & Financial Services
NFP
Excel Bonds & Insurance Services
California-based Excel Bonds & Insurance is a commercial insurance and surety bond broker with an international client portfolio
Randall & Quilter Investment Holdings
Sandell Holdings and Sandell Re
R&Q has agreed to acquire the entire issued share capital of the Bermuda-based firms
Worldwide Facilities
Benchmark Management Group
Established in 1990, Benchmark handles excess and surplus lines from offices in Chicago and Milwaukee
Ironshore adds contractors’ environmental policy
Ironshore Environmental has launched a new contractors’ environmental legal liability policy. Available for contractors with up to $100 million in revenue, it covers third-party bodily injury, property damage and remediation of environmental damages resulting from pollution incidents caused by the contractor’s work at a job site. It also covers pollution liability incidents related to transportation, non-owned sites and time-element pollution accidents at owned sites, as well as costs related to image restoration, disinfection events and pre-claim expenses.
Worldwide Facilities acquires Midwest-based MGA Worldwide Facilities has acquired managing general agent and wholesale insurance broker Benchmark Management Group. Established in 1990, Benchmark handles excess and surplus lines from two locations in Chicago and Milwaukee. The company expanded its operations in 2008 by acquiring Specialty Lines Underwriters. “We have shared values, a similar culture and complementary products, which creates an increased value proposition to our customers, markets and employees,” said Benchmark Management Group president Tim Makowski. Worldwide Facilities president Ron Austin added, “We are extremely pleased that Tim and Shawn Makowski and their team are joining our company. Benchmark’s business provides us with a broader geographical footprint and product offering for our MGA platform.”
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The Hanover targets high-net-worth individuals
The Hanover Insurance Group has launched a new brand aimed at serving the needs of the insurer’s high-net-worth personal lines customers. The new Hanover Prestige product is now available in all of the company’s personal lines markets for home, auto and condominiums. Hanover Prestige features coverage options that can be customized at an account or an individual policy level, allowing agents to adjust policy limits for customers with unique and complex coverage needs. The brand’s policy limits can also be modified to accommodate various customer needs.
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PEOPLE W.R. Berkley enters the commercial transportation market
W.R. Berkley has formed a new division to deliver primary transportation insurance products for standard and preferred risks. Berkley Prime Transportation will focus on using analytics and technology to develop new ways to provide quality service to agents and customers. “The establishment of this new division will enable us to expand our footprint in commercial auto at a particularly good time,” said W.R. Berkley president and CEO W. Robert Berkley Jr., who added that the division’s data and analytic tools will provide opportunities for broad application throughout the rest of the company.
NAME
LEAVING
JOINING
NEW POSITION
Doris Balderrama
Starbucks
PEMCO Insurance
Director of human resources
Chad Barber
Safeco/ Liberty Mutual
PEMCO Insurance
Director of sales
Shane Fitzsimons
Tata Group
AIG
Global head of shared services
Jose Ramon Gonzalez
QBE North America
CNA
Executive vice president and general counsel
John Mizzi
CNA
Blackboard Insurance
Head of growth and underwriting
Chris Pappas
Hays Companies
Assurance
Vice president, employee benefits
Risa Ryan
Munich Re America
QBE North America
Senior vice president, analytics
Philip Smaje
Willis Towers Watson
BGC Insurance Group
CEO, global aviation brokerage
Berkshire Hathaway GUARD expands to new states
Berkshire Hathaway GUARD Insurance Companies has expanded its commercial auto product to Delaware, Kentucky and the District of Columbia. Designed for local and intermediate travel exposures up to a 200-mile radius, the policy targets markets such as artisan contractors, distributors, retail goods and services, and auto service operations. It includes automatic physical damage coverage for newly acquired vehicles, the ability to name additional insureds when required by contract, and towing coverage for vehicles up to 10,000 pounds.
GEICO forges jewelry insurance partnership
GEICO has teamed up with Jewelers Mutual Insurance Group to offer its customers a separate jewelry insurance policy that covers the entire value of a policyholder’s piece of jewelry or their entire collection in the case of loss, damage or theft. The coverage generally costs about 1% to 2% of the item’s total value each year. Key features of GEICO’s jewelry insurance offering include the flexibility for policyholders to select their own trusted jeweler for repairs, the ability to file fast and easy claims, and coverage that extends to worldwide travel.
Blackboard gets new underwriting head
Blackboard Insurance has appointed John Mizzi as head of growth and underwriting, charged with leading the underwriting team as Blackboard innovates and expands its use of data, analytics and technology. Mizzi joins Blackboard from CNA, where he had led commercial field operations since 2016. Prior to that, he spent 25 years with Chubb. “We’re thrilled to have John join us,” said Blackboard CEO Seraina Macia. “His extensive experience in the middle market and years of relationshipbuilding, combined with our new technology platform, customer-centricity and analytics-driven underwriting approach, will take us to new heights.”
AIG names global head of shared services
AIG has appointed Shane Fitzsimons as global head of shared services. Most recently the group synergy officer at Tata Group, Fitzsimons joins AIG in a newly created role that establishes a single point of accountability for key operational and financial capabilities. He will be responsible for developing and implementing a global strategy within AIG’s shared services to create a cost-effective infrastructure that leverages technology and innovation. “Under Shane’s leadership, AIG shared services will be modernized to accelerate our progress towards restoring AIG as the leading insurance company in the world,” said Peter Zaffino, AIG’s global COO and CEO of general insurance.
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2/08/2019 3:42:48 AM
UPFRONT
WORKERS’ COMP UPDATE NEWS BRIEFS Trident Marine and Signal Mutual forge USL&H partnership
Specialty marine and offshore energy insurer Trident Marine Managers [TMM] has formed a strategic alliance with Signal Mutual, a member of the Charles Taylor group of companies and provider of USL&H benefits. The partnership will allow TMM, a Ryan Specialty Group company, to offer Signal Mutual’s SafeShore longshore workers’ compensation program to waterfront employers in both Texas and Louisiana. “We’re excited by the opportunity,” said TMM managing director Martin Hayes. “To have the backing of Signal in this space is outstanding, and we look forward to a long and fruitful relationship for both parties.”
Nevada introduces new penalties for misclassification
Nevada Senate Bill 493 came into effect on July 1, bringing with it new penalties for employers who intentionally misclassify workers. Employers in the state face a $2,500 penalty if they wilfully misclassify workers as contractors or “otherwise fail to properly classify a person as an independent contractor.” Repeat offenders face a $5,000 penalty for subsequent incidents. The bill also created a task force to deal with misclassification issues and requires relevant government bodies to share information regarding suspected misclassification.
Wisconsin considers lowering workers’ comp rates
The Wisconsin Compensation Rating Bureau has submitted a proposal to lower workers’ compensation insurance rates in the state by more than 8.8%; if approved, the new rates would go
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into effect on October 1. The proposal follows a three-year trend in falling premiums – according to the US Bureau of Labor Statistics, Wisconsin employers reported 82,400 injuries and illnesses in 2017, roughly 300 less than 2016. However, Wisconsin’s rate of workplace illness and injuries remains higher than the national average, at 3.7 cases per 100 full-time workers in 2017, versus an average of 3.1 cases nationwide.
Iowa boosts weekly benefits for injured workers
Iowa Workforce Development has increased the weekly benefits paid to unemployed workers and those injured on the job, increasing payouts by between $72 and $87 per week. The new benefit payment schedules apply to workers who file claims for injuries that happened on or after July 1. The changes were prompted by wage increases in the state; the average annual wage for insured workers in Iowa increased from $45,877 in 2017 to $47,290 in 2018.
New Illinois law amends statute of limitations for toxic exposure
Illinois Senate Bill 1596, signed into law in mid-May, has eliminated the 25-year statute of limitations imposed by the Illinois Workers’ Compensation Act and the Workers’ Occupational Diseases Act for civil suits over workplace exposure to toxic substances such as asbestos, radiation and beryllium. “The past law was a death sentence for people diagnosed with serious illnesses, who aren’t given the proper time to take care of their poor health,” said Senator Elgie R. Sims Jr., highlighting the fact that it can sometimes take decades for symptoms of toxic exposure to materialize. “For far too long, employees have suffered from bad workplace conditions with no source of relief.”
Using tech to cut lag time Data-enabled risk control processes are fostering crucial early interventions in the workers’ comp space Data is gold dust in insurance. In both the underwriting and risk control functions, good data can help everyone involved learn about risks sooner, respond to incidents more quickly and plan risk control more effectively. “The flow of good data and the reduction in lag time until we receive and act upon that data has made us much more efficient,” says Ariel Jenkins, assistant vice president of risk services at Safety National. “That’s the real value in the progress we’ve made as an industry in capturing data and turning it into information that we can use to make strong decisions.” Innovation and data capture have had a huge impact in the workers’ compensation space, especially in the area of risk control. Safety National is currently piloting the use of mobile technology to help clients perform safety inspections and assessments. By doing these assessments through a mobile application, “it cuts the lag time of intervention from others with a stake of interest or from people who can facilitate changes from that inspection,” Jenkins says. “It almost functions like social media, where the insureds can securely upload and share photos from their risk assessments. Through that functionality, they’re able to capture at-risk observations, whether it’s a physical hazard or some type of employee behavior, and quickly share that information with the right people. It’s a huge plus. Technology is making us more effective and efficient.”
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Mobile technology has disrupted almost every industry, so it just was a matter of time before it had an impact on risk management. “Basing decisions simply off of loss runs has been a losing proposition for a long time,” explains Vik Ramaswamy, risk control manager at Safety National. “Leading indi-
“If the technology throws up any red flags, the safety and risk control professionals can intervene sooner” cators were always necessary to provide the appropriate context to lagging indicators like losses. The challenge was getting quality data that truly represents those leading indicators to those with the ability to influence organizational change; mobile safety applications have offered exactly that.” Mobile devices are both a blessing and a curse, however, as they can be distracting in any type of work environment. As a result, new technologies have emerged that can disable mobile devices in specific scenarios. These tools have really gained the attention of risk control experts. “Another thing that has gotten our attention recently is wearable technology,” Jenkins says. “Wearables can monitor employees’ body movements and postures from an ergonomics standpoint, which helps with training intervention, post-injury recovery and job redesign. Wearables can also capture physiological data such as heart rate and indications of fatigue in conjunction with body posture and so on. If the technology throws up any red flags, the safety and risk control professionals can inter vene sooner, and they can use the data to justify that intervention.”
Q&A
Charles Caldwell CEO MIDLANDS MANAGEMENT
Years in the industry 50+ Fast fact Caldwell founded Midlands nearly three decades ago, driven by a desire to bring quality service and high standards to the workers’ comp industry
Succeeding in a soft market What’s the workers’ comp market looking like right now? It’s a pretty soft market right now. There are several new players and new monoline companies entering the market to write workers’ compensation insurance in one or two states. There seems to be plenty of capacity entering the market, so the rates continue to be depressed. Moving forward, I see nothing that would indicate any changes on the horizon.
What can brokers do to navigate the soft market? For the brokers and the markets that specialize in workers’ compensation – both primary and excess – you have to be prepared to deliver a full service. That means assisting clients, especially the smaller ones, with loss control, claims handling, writing safety plans, creating back-to-work programs and introducing new technology. Predictive analytics is a big buzzword of today. These tools can compare the historical behavior of an individual client’s claims to the industry as a whole, thus helping the client predict and better manage their losses.
Are there any particular industry sectors that are struggling right now? A number of industries – for example, agriculture, hospitality, construction – are really having difficulties finding experienced employees. They’re having to search hard to find qualified people, so there’s a lot of training going on within these industries to get workers conditioned to work on a safe basis. It’s difficult to go by a restaurant in any part of the country right now that doesn’t have a hiring sign in the window, and in the construction industry, especially homebuilding, their real problem is finding trained employees. Of course, with untrained workers, safety becomes a huge factor. The average number of injuries for workers who have only been on the job for a few weeks is staggering when compared to the average number of injuries for workers who have been on the job for a year or more.
How does that negatively impact workers’ comp? There’s a significant negative impact because the untrained worker presents a hazard to him/herself and to the other workers. If employees are not fully trained on safety devices and workplace best practices, this can create some very hazardous conditions and scenarios, which could ultimately lead to losses. The untrained worker is a serious problem.
Where do insurance brokers need to adapt? The broker sector today can’t send in an application that’s not supported by safety programs and data. Data is king. The more data brokers can provide, with the help of software platforms, the better the deal they’ll end up with and the more favorable they’ll look in the underwriters’ eyes.
www.ibamag.com
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UPFRONT
TECHNOLOGY UPDATE
Getting a snapshot of cyber risk FICO’s Cyber Risk Score offers a passive way to assess small businesses’ cyber risk
to control aggregate exposures. For example, if a carrier has 1,000 policies in a portfolio, they would be able to use the FICO Cyber Risk Score to see how many of those policies have exposure to a certain cloud vulnerability.” Cyber risk scoring is especially important when carriers start to move down market to small- to medium-sized business accounts. It’s not financially efficient to send SMEs endless questionnaires or to “show up and look under all the floorboards,” Clare says. For cyber insur-
“We’re able to project the likelihood of a material breach event happening at an individual company”
Best known in the US for its consumer credit score, data analytics giant FICO offers a similar service in the cybersecurity space. FICO’s Cyber Risk Score tool analyzes the characteristics of machine-to-machine or machine-to-internet communications, looking for anomalies and potential system compromises. It also looks at the characteristics of individual organizations and what assets they expose to the internet. By combining these insights, the FICO Cyber Risk Score can project the likelihood that an organi-
NEWS BRIEFS
zation will experience a data breach within the next 12 months. “The FICO Cyber Risk Score is a risk quantification tool that can be used by insurance carriers for underwriting and pricing decisions around cyber insurance,” explains Doug Clare, vice president at FICO. “Through our quantitative tool set, we’re able to project the likelihood of a material breach event happening at an individual company. We’re also able to expose supply chain risk, helping carriers and insureds
Insurtech launches auto coverage in Colorado
Insurtech startup Noblr has launched its flagship personal auto insurance product in Colorado. Noblr offers individualized auto insurance rates based on a policyholder’s driving behavior, as recorded on a smartphone app, which it claims can help good drivers save up to 51% on their premiums. “With a dynamic population of people who are on the go and who care about making our world a better place, Colorado is the perfect location for Noblr’s launch,” said co-founder and CEO Gary Tolman.
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ance policies with premiums of a few thousand dollars, insurance companies “need more of a passive assessment of risk,” he says. “What FICO offers from a risk assessment, risk quantification perspective at the top of the market is important because it’s one element that can help underwriters and brokers figure out what other questions need answering,” Clare says. “On the smaller end of the market – which eventually is going to be the bigger end of the cyber insurance market, from a revenue perspective, for carriers – in order to optimize outcomes, carriers and brokers are going to need more passive risk assessment tools. Our mission is to bring those tools to the industry.”
Lloyd’s rolls out insurance contract review tool
Lloyd’s of London has launched a new software tool designed to improve the quality of insurance contract review. Lloyd’s Contract Confidence tool runs checks against 1,400 open-market rules, using advanced search techniques to scan insurance contracts. The tool comes pre-populated with the full set of clauses from the Lloyd’s Wordings Repository and also gives underwriters the ability to set their own rules. Lloyd’s hopes the new tool will lead to fewer disputes, faster claims resolution and lower costs for policyholders.
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The company you keep says a lot. On behalf of the employees of RPS, thank you for naming us a Top Insurance Workplace. Our success is driven by the teamwork, collaboration, trust and relationships of our employees. We love what we do and we show it every day and in every interaction.
To learn more about joining the RPS team, visit www.rpsins.com/careers
Risk Placement Services, Inc. Knowledge. Relationships. Trust and Confidence.
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UPFRONT
TECHNOLOGY UPDATE Q&A
Laird Rixford CEO INSURANCE TECHNOLOGIES CORPORATION [ITC]
Years in the industry 18 Fast fact According to a recent J.D. Power study, 64% of insurance shoppers cite price as their primary reason to look for new insurance
Probing insurance price comparison tools How engaged are US consumers with the concept of insurance price comparison tools? US consumers are absolutely engaged with using price comparison tools in various shopping experiences. Adoption of these tools has grown over the past few years, and a lot of price comparison companies are starting to advertise their services in broader market channels.
And yet price comparison tools are less prevalent in the US insurance industry than they are in other parts of the world. Why is that? It really comes down to the insurance regulatory system. Regulations in other parts of the world are completely different than the state-by-state regulatory system we have here. In the UK, for example, insurers have the ability to provide special offers, where they’ll say: ‘Today only, get an additional X% off your insurance!’ In the US, insurance is a completely regulated market in which insurers must file all of their rates. This means they can’t offer those ‘Today only!’ pricing deals, which perform particularly well through price comparison sites.
What insurance products might thrive with greater adoption of price comparison tools? Auto insurance and home insurance are the two obvious ones. They’re already prevalent in the price comparison markets. Beyond that, I think gig economy products and short-term or temporary insurance – for example, insuring a camera for a specific two-week vacation –
FM Global makes major investment in RiskGenius
Global commercial property insurer FM Global has invested $1 million in RiskGenius, a startup that uses AI and machine learning to help automate the underwriting process. Earlier this year, the insurer invested $250,000 in aerial mapping and surveying startup AirWorks. “As we look to the future and the evolving landscape of property insurance policy issuance, AI and machine learning offer FM Global great opportunities to enhance our clients’ experience,” said Michael Lebovitz, FM Global’s SVP of innovation.
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could do really well. Also, small commercial insurance, like general liability and business owner’s policies, could benefit greatly from a price comparison market.
What are some negatives that arise when consumers use price comparison websites? First of all, the average consumer is not an insurance expert. If you buy a policy from a price comparison website without knowing what you’re buying or understanding what limits, deductibles and coverages will kick in, oftentimes consumers will end up with something that seems good from a price perspective but is actually inadequate from a coverage perspective. They only discover that if they have to submit a claim, and it turns out the insurance they purchased will not cover that claim. That can leave the consumer at serious risk of financial peril. Secondly, these tools create a market where insurance becomes a commodity. They don’t really drive the value of what insurance is providing.
How might insurance agents benefit from price comparison tools? Having a price comparison tool on their website enables agents to level the playing field with some of the disruptive competition. It also gives them the ability to offer what makes them unique, which is their ability really develop relationships with clients after they’ve come to you via the website. You can market on price, but you need to sell the value of insurance.
ProWriters adds insurers to Cyber IQ platform
ProWriters Insurance Services has added two more cyber insurance companies – MGA CFC Underwriting and insurtech At-Bay – to its proprietary Cyber IQ platform. Launched last November, the platform allows brokers and agents to immediately compare quotes from multiple stand-alone cyber insurance carriers. ProWriters has also added several new features to the Cyber IQ platform, including a dynamic quote comparison document, bulk quoting functionality and white-label versions of the portal.
Brit partners with aerial image provider
Brit has partnered with the Geospatial Intelligence Center [GIC], an arm of the nonprofit National Insurance Crime Bureau. The GIC will provide Brit with access to aerial images to facilitate fast and accurate property assessments and expedite claims settlements. “We continue to advance the way we manage claims and are committed to paying our end clients faster,” said Brit’s Sheel Sawhey. “Brit’s partnership with the GIC to help respond to catastrophes embodies our innovative approach to claims.”
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PEOPLE
INDUSTRY ICON
NAVIGATING CHANGING TIDES Within a rapidly evolving underwriting environment, Safety National EVP and chief underwriting officer Gus Aivaliotis has managed to steer his team, and the company’s customers, toward success
WHILE THE insurance industry might struggle to attract fresh graduates today, Gus Aivaliotis already had his sights set on underwriting when he finished college in 1988. Despite studying accounting in school, Aivaliotis pursued a position as an underwriting trainee and has made the field his home ever since, today serving as executive vice president and chief underwriting officer for Safety National. “I enjoyed the challenge that comes with needing to understand the wide variety of industries and operations that create exposures for businesses in terms of financial risk,” he says. “Out of college, I purposefully focused on getting into the underwriting field and went through a formalized training program. After three-plus decades in the industry, I have really enjoyed the challenges that come with a dynamic industry that’s critical to the economies of the world.” Following several stints at insurance companies that were later purchased by larger players in the industry, Aivaliotis seized the opportunity to become a senior vice president in large casualty at Safety National in 2008. For many reasons, he says, it was a step in the right direction. “Safety National was the right fit because it’s the right size – we have all the resources
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of much larger competitors, but we have an entrepreneurial spirit that’s very flexible,” Aivaliotis says. “We have all the benefits of being a large company and part of the Tokio Marine group of companies, but we’re a relatively small company in the industry, so we can be very fast-moving and attentive to customer needs.” Looking back on his standout moments at Safety National, Aivaliotis sees immense
to form a team to accomplish tasks, that, to me, has been the most meaningful moment of my career.”
The evolution of underwriting The rapid pace of change in today’s business environment has kept underwriting professionals on their toes. “Emerging industries and technological advancements, along with an ever-changing
“Emerging industries and technological advancements, along with an ever-changing social, environmental and regulatory environment, keep the underwriting role fresh” value in his team’s efforts to accomplish meaningful underwriting results, which in turn has had a bearing on the success of the company’s clients. “Insurance is a critical component of any successful economy, and businesses have to mitigate their exposures to financial loss,” he explains, “so when you find people who recognize the value of insurance, who are highly motivated to succeed and enjoy combining
social, environmental and regulatory environment, keep the underwriting role fresh, and you have to evolve and adapt continuously in order to be successful, so there’s never a stagnant moment,” Aivaliotis says. “You have to figure out from a carrier’s perspective how to react and provide value to customers as they try to protect their businesses and financial assets in this ever-changing world.” The gig economy is one of the emerging
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PROFILE Name: Gus Aivaliotis Title: Executive vice president and chief underwriting officer Company: Safety National Based in: St. Louis, Missouri Years in the industry: 31 Career highlight: “Working with teams composed of professionals who are highly motivated and recognize the value of insurance�
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PEOPLE
INDUSTRY ICON
industries that has challenged insurance to find new ways to address risk. Government standards around issues such as pollution and data privacy have likewise captured the attention of Aivaliotis and the underwriting team at Safety National, as its customers tend to be larger buyers of insurance and have higher standards to meet. “Ultimately, the way we try to deliver value to customers is by talking with risk managers, whose full-time job is protecting their businesses and helping their businesses grow by not getting embroiled in litigation or regulatory scenarios that may confine them,” Aivaliotis explains. “We look to our customers to tell us about their businesses [and] where
overwhelming amount of information underwriters have at their fingertips today. “The key to utilizing Big Data to create a more profitable business is understanding the value embedded within that data,” Aivaliotis says. “There’s so much information available now that I think in a lot of cases, there may be information overload, so the critical thing to me is extracting what’s most beneficial from an insurance carrier’s perspective to distinguish what’s a better exposure. At Safety National, we’ve embraced the use of analytics by looking at a lot of different data elements, but then also trying to extract those that are of most value and that are actionable – in other words, focusing on the ‘need to know’ things
“Insurance products are not created in a vacuum. They’re created out of a need driven by customers” their businesses are headed, and then we work together to help them figure out what we can do to help mitigate their exposures to loss.” Aivaliotis sees many opportunities embedded in underserved parts of emerging markets, which means Safety National must identify customers’ needs as they move into unexplored territories of their business, such as considering how to embrace technology to become more efficient or introducing new services to their customers. “Insurance products are not created in a vacuum,” Aivaliotis says. “They’re created out of a need driven by customers.”
All about data While the application of data and analytics to insurance has been hailed as a game-changer in recent years, underwriters have relied on data for a very long time. What’s raised the stakes over the past decade has been the use of Big Data and figuring out how to analyze the
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that really make sense, as opposed to the ‘like to know’ things.” Data might be vital to understanding exposures, but as Aivaliotis maps out growth strategies for the coming years, the customer is king. “When we talk about growth plans, it’s really part of the conversation we have with our customers,” he says, noting that Safety National’s experts have hundreds of meetings with risk managers each year. “We always talk about our customers’ businesses and where they’re headed, and we try to look down the road together to see what their exposures to loss might be and what kind of products they need to mitigate that exposure. The conversation about new products starts with customer conversations, and then we go about strategizing as to how we provide value and how we help our customers mitigate their exposures to loss while also creating a sustainable business model.”
KEY DATES IN SAFETY NATIONAL’S HISTORY
1942 The company is established as Safety Mutual Casualty Corporation, born out of concerns about excess workers’ compensation instability in the London market
1988 Safety Mutual separates from international broker Frank B. Hall; the company continues to celebrate the separation each year as Safety National Independence Day
1991 Safety Mutual demutualizes to become Safety National Casualty Corporation
1996 Safety National is acquired by Delphi Financial Group
2012 Global insurer Tokio Marine Group acquires Delphi Financial (and Safety National) in a deal worth $2.7 billion
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email iba@keymedia.com
The claim on client data Data is the new currency, and we must protect it and invest in it wisely, writes Stephen Cheeseman TECHNOLOGY IS advancing at the fastest pace in human history – faster than we can regulate and control it. This impacts how many industries interact with customers. As the insurance industry evolves to meet the changing needs of clients by moving more customer interactions onto digital platforms, privacy becomes all about data – who owns the data, who creates the data, how the data is used and who protects the data. The 21st century has witnessed the birth of the some of the largest technology, social media and financial companies in history, making data protection regulations that much more important. The risks of largescale data breaches from such companies would be long-lasting and destructive. As foreign regulators explore open banking and open insurance, establishing universally compatible privacy standards will be the challenge to keep up with today’s global economy. This is the foundation for the EU’s ‘Brussels effect,’ where organizations operating internationally must build businesses and products that adhere to the EU’s regulatory standards. Its GDPR privacy legislation, whose jurisdiction theoretically extends outside the EU’s borders, is a prime example of this. GDPR is setting the bar high, and if other countries can’t play by its rules, they risk long-term economic repercussions. Nowhere in the history of regulation has ethics played such an important role. As insurance providers, we must consider that privacy protection relies on both internal and external support. The external is founded on an organization’s network infrastructure
and IT systems and how the organization connects digitally with its customers. The internal support is founded on responsible and proactive business practices. Financial services regulation has been economy-responsive for decades; however, the regulatory process is challenged to keep pace with the speed of today’s technology, particularly with the internet. This means the financial services industry must invoke high ethical standards where regulations are silent or not fully suited to current tech-
• Consent should be understood and easily managed. Clients should understand clearly what they are consenting to and be able to easily provide, limit or revoke their data. Providers need to ensure this while still administering fully functional products. To be trustworthy, insurers and brokers should be accountable and ready to demonstrate compliance. Insurance providers have a wealth of data on individuals and are facing a continued push for more customer interactions to take place online, and as such, insurance companies are a serious target for cyber criminals. Should we not adapt to the current climate, we will be forced to pay the price. The costs of cyber crime are both immediate and long-lasting. The immediate impacts include loss of business and media impact, plus the costs of restoring the confidentiality, integrity, and availability of data and systems. The long-term costs vary according to the incident’s type and severity but are affected by how it is handled. This could include reimbursing victims, legal compensation or regulatory fines
“The financial services industry must invoke high ethical standards where regulations are silent or not fully suited to current technology” nology. By combining regulatory guidance and ethical standards, providers can deliver well-rounded privacy solutions. When managing data, providers need to be respectful of consumers’ consent. It’s important to keep these points in mind: • Consent should not be static. Providers should think of it as a dynamic and ongoing process, reflective of the constant evolution of technology and regulations such as GDPR. • Consent should not be forever. Like any business relationship, choices should be provided throughout the term, allowing individuals to control the degree of accessibility and release of their personal data.
– not to mention reputational impact. These are all issues that need to be considered when brokers acquire E&O protection, as cyber insurance may not be part of standard coverage. Organizations need to treat client data as a real currency that can be stolen. Innovation and regulation continue to compete as regulators prioritize consumer protection and insurance providers respond to consumers’ technology appetite. Providers must transparently and effectively use client data for the benefit of both parties. Stephen Cheeseman is a qualified lawyer in the US, Canada and the UK with more than 25 years of legal and compliance experience. He serves as head of business affairs and alliances for technology venture company Thinktum.
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SPECIAL REPORT
TOP INSURANCE WORKPLACES 2019
2019
PRESENTED BY
A M E R I C A
TOP INSURANCE WORKPLACES
For the second year in a row, IBA asked thousands of insurance professionals across the country to name the industry’s best places to work IN THE ERA of the gig economy, creating a nurturing and prosperous work environment is more important than ever. To find out which companies in the insurance industry are getting it right, IBA turned to the employees themselves. Thousands of insurance professionals weighed in on how their employers are performing in regard to compensation and benefits, diversity, employee development, and culture. In the end, 53 companies achieved the distinction of Top Insurance Workplace for 2019. Of these, 64% were retail agencies and brokerages, 18% were wholesalers, 8% were insurers or reinsurers, 8% were insurtechs or technology providers, and 2% were third-party administrators. Employees also spoke out about which of their employers’ strategies and initiatives are particularly effective, including flexible scheduling options, generous health and family leave benefits, diverse hiring practices, and a supportive culture. On the following pages, IBA highlights what the industry’s best-rated employers are doing differently and unveils this year’s list of Top Insurance Workplaces.
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METHODOLOGY To be considered a Top Insurance Workplace, organizations were invited to fill out an employer form to provide details on their various offerings and practices. Employees from nominated companies were then asked to fill out an anonymous form evaluating their workplace on a number of metrics, including benefits, compensation, culture, employee development and diversity. In order to be considered, each company had to reach a minimum number of employee responses based on overall size. Organizations that achieved at least an 80% average satisfaction rating from employees were named a Top Insurance Workplace.
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COMPENSATION, BENEFITS AND INCENTIVES One employee’s comment sums it up: “Compensation goes beyond salary. There are many other ways we are compensated.” Some of those other forms of compensation include standard benefits such as medical, dental and vision coverage; life insurance; a retirement plan; and long-term care and disability benefits. The majority of Top Insurance Workplaces also offer at least 15 paid days off per year, and a select few even offer unlimited paid time off. Of course, monetary compensation is still important, and many Top Insurance Workplaces have gotten creative with their bonus programs to attract top sales talent. Employees described a wide variety of bonus structures, from $5,000 towards a vacation as a reward for generating a certain amount of new business to an extra half-day off per month for hitting retention goals. Many employers also offer profit-sharing programs for all types of employees, often based on a percentage of the employee’s salary and tied to company or department profitability. One employer offers non-sales staff monthly performance bonuses based on their level of service, while another provides a bonus for administrative assistants. Referral incentives for recruiting new hires were also common.
When do employees become eligible for benefits? 25%
Does your organization offer an employee equity program?
Yes
IMMEDIATELY
No
N/A
Does your organization offer sabbaticals?
Does your organization offer an employee retirement plan?
Yes (unpaid) No
Yes (paid)
Fewer than 99 employees 23%
8%
69%
Fewer than 99 employees
94%
5%
100 to 499 employees
100%
0%
500+ employees
100%
0%
100 to 499 employees 10%
5%
85%
500+ employees 20%
0%
80%
WHAT EMPLOYEES HAD TO SAY
“I feel that my salary is an open negotiation, and I appreciate that. I’m always heard.”
Fewer than 99 employees 12% 30 DAYS AFTER HIRE
43%
88%
100 to 499 employees 8%
60 DAYS AFTER HIRE
31% 57%
90 DAYS AFTER HIRE
12%
10%
500+ employees 11%
“My manager listens to me regarding compensation, and it seems that we are near or at the top of the pay scales.”
60%
OTHER
40%
“Healthcare is expensive, and that’s a fact. I’m grateful to have options in our medical benefits.” “For the past few years, everyone gets to share in profits!”
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SPECIAL REPORT
TOP INSURANCE WORKPLACES 2019 How many paid days off do employees receive annually? 3% 14%
6 to 10
11 to 15
15+
Unlimited
79%
3%
WHAT TOP WORKPLACES ARE DOING DIFFERENTLY “We have annual sales incentives that, when met, will be a paid vacation for the salesperson and their significant other. We also offer bonuses to service departments based on retention.”
“Our Really Awesome Act Award gives a $500 reward, custom bobblehead and office celebration to anyone who delivers an exceptional client service act. There’s also a $3,000 travel reward for the best act of the year.”
DIVERSITY
This year’s survey results suggest that in the insurance tends to increase in proportion to the size of the company – 23% of employees at companies with 500+ staff identify as a racial or ethnic minority, LGBTQ or as a person with a disability, compared to 19% at companies with 100 to 499 employees and 13% at companies with less than 100 staff. This year’s Top Insurance Workplaces employ a range of strategies to promote diversity. One employer holds mandatory diversity training for all staff each year, which includes implicit and unconscious bias training, as well as education on diversity of thought and working with disabled people. Industry employers also remain highly attuned to the need to diversify the age range of their employees. One Top Insurance Workplace highlighted its partnership with a local preparatory high school, in which the company pays the student’s tuition in exchange for the student working one day a week at the office. “The students wouldn’t otherwise have the means to attend a school of this stature or have exposure to an industry such as ours,” the respondent noted. The survey results also made it clear that insurance has a way to go in terms of gender diversity; women are still in the minority at the executive level. Many Top Insurance Workplaces do have initiatives in place to increase female representation at the top of the industry, from offering extra flexibility to working mothers to sponsoring in-house events geared toward helping women advance their careers.
“The company offers a transportation allowance benefit of up to $175 a month for public transportation or monthly parking.”
What percentage of employees are male versus female?
What’s the gender breakdown at the executive level?
35% 65% What percentage of employees identify as a racial or ethnic minority, LGBTQ, or a person with disability? 13%
Fewer than 99 employees
19%
100 to 499 employees
23%
500+ employees
60% 40%
What’s the proportion of minorities at the executive level? Fewer than 99 employees 7% 100 to 499 employees 10% 500+ employees 7%
WHAT TOP WORKPLACES ARE DOING DIFFERENTLY “We ensure our benefits and culture are inclusive of all of our workforce, including women, minorities, those with disabilities and the LGBTQ community. We offer a nursing lounge to our female staff for those who have recently given birth.”
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“To retain our tenured workforce, we have a phased retirement program that helps them transition their knowledge to the incumbent. They get to reduce their hours and still maintain full benefits for up to 18 months before they retire.”
“We have our own semi-annual Women in Insurance gathering where we bring in speakers and role models. Sometimes we workshop a specific skill, and sometimes it’s more of a networking practice.”
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2019
PRESENTED BY
A M E R I C A
What percentage of employees are millennials? Fewer than 99 employees 37%
100 to 499 employees
WHAT EMPLOYEES HAD TO SAY
“Our workforce is surprisingly diverse for an insurance agency, and it’s just who we are.”
37%
500+ employees 30%
What’s the proportion of millennials at the executive level? Fewer than 99 employees 13%
100 to 499 employees
“Our staff includes members of many races, religions and sexualities at all levels.” “I appreciate the multiculturalism in our organization, especially in hiring from different ethnicities.”
14%
500+ employees 9%
“From employees to the C suite, there is broad diversity.”
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SPECIAL REPORT
TOP INSURANCE WORKPLACES 2019
EMPLOYEE DEVELOPMENT To motivate employees to stick around and compete at the highest level, it’s imperative that organizations invest in their development. Many of this year’s Top Insurance Workplaces provide time off and cover the costs for their employees to pursue certifications and other training that will advance their careers. Some also give employees a pay raise or a bonus once they complete a program. Development initiatives can be a boon for employers, too, allowing them to promote from within. One company reported that its education programs had resulted in “17 promotions or transfers internally to vertical positions” in 2018. Many Top Insurance Workplaces go well beyond the industry standards for education and professional development. One survey respondent highlighted their company’s education committee, which sets up classes and training to foster professional growth. Another company spends $750,000 per year on employee training and has a program to subsidize college tuition. Aside from college courses and certifications, many Top Insurance Workplaces also promote mentorship. “We have a three-month mentorship program during our onboarding process of new employees,” one respondent said. “The new hire is paired with a current employee, and they meet monthly.” Other organizations reported having special programs to cultivate emerging leaders and formal feedback structures to keep employees on track with their goals.
WHAT EMPLOYEES HAD TO SAY
“Career pathing is clear, mentorship is available, and inhouse training, designations, and a leadership development program are all paid for and supported by leadership.”
WHAT TOP WORKPLACES ARE DOING DIFFERENTLY “We have a two-year program for emerging leaders. They spend a year learning core leadership skills and working with their mentor to broaden their skills. The next year is about learning how to apply their knowledge in real-life situations with business coaches for support.” “All of our underwriters are required to take a minimum of eight hours of education each year that is 100% paid by the employer. If we have an up-and-coming person that will be moving into leadership, we send them to a variety of leadership courses.” “When an employee starts at the company, they spend a week sitting with each department, getting to know everyone’s roles. We then schedule each of our carrier partners to come out and meet one-on-one with our newest employee. After they are comfortable, we let them go on their own but follow up daily on progress until we can cut down to weekly, then monthly.”
Does your organization offer education programs and opportunities outside of what’s required industry-wide?
How often does your organization conduct employee performance reviews?
Fewer than 99 employees
Twice a year
90%
Once a year 59%
10%
11%
Quarterly
100-499 employees
89%
13%
11%
Never 2%
500+ employees
“There is a real push to take time away from work to pursue greater knowledge in the industry through education.” “Everyone has individual development plans, which emphasize listening to us and paying for our professional development.”
100%
0%
How often does your organization conduct company-wide employee meetings? Weekly Monthly Quarterly
Biannually Annually Never
Other
Other
15% 18%
22%
2% 14%
14%
26
8%
22%
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2019
PRESENTED BY
A M E R I C A
TOP INSURANCE WORKPLACE
GEHRING GROUP HEADQUARTERS: PALM BEACH GARDENS, FL YEAR FOUNDED: 1992
Gehring Group has been providing expert employee benefits and risk management consulting services to public-sector clients in Florida for more than 25 years and has grown to become one of the most respected insurance consulting agencies in the state. Gehring Group’s unique corporate culture is built on its 30 keys to collective success. The company takes great pride in working to create an immersive, inclusive, community-driven organization that cares deeply about every person who walks through the door. Gehring Group is committed not only to the communities it serves, but also to
its team members. The company invests in team members’ futures to help them aspire to roles they never thought they could achieve. In addition, the company’s Helping Hands & Healing Hearts committee spearheads communitydriven initiatives throughout the year. Gehring Group employees actively volunteer and support The Arc of Palm Beach County, The Lord’s Place, the Homeless Coalition of Palm Beach County and Florida Sheriffs Youth Ranches, among others. The company has also organized disaster relief efforts for the US Virgin Islands and coordinates local food drives to benefit the underserved.
We’re Proud To Be A
Top Insurance Workplace!
Our communities rely on the public sector. The public sector relies on Gehring Group.® (800) 244-3696 | gehringgroup.com
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2/08/2019 4:12:11 AM
SPECIAL REPORT
TOP INSURANCE WORKPLACES 2019
CULTURE Given that employees spend a third of their lives at work, company culture can be an intangible deal-maker or -breaker. The average retention rates across this year’s Top Insurance Workplaces suggest they’re doing well in building a culture conducive to a happy, productive workforce. Many companies sponsor social events such as picnics, happy hours, adventure outings, Christmas parties, weekend trips and sports teams. Encouraging community outreach is another way Top Insurance Workplaces cultivate a positive culture. Many companies give employees additional paid time off for volunteering each year, and several even have their own charitable foundations to coordinate their community service efforts. Some get creative about raising funds for charities – one Top Insurance Workplace has Jean Friday, “where employees donate $10 per month to wear jeans on Fridays, and the funds go towards our charity for the year; the company also matches whatever is raised.” This year’s Top Insurance Workplaces also put a high priority on sustainability, something that’s increasingly important to younger
WHAT TOP WORKPLACES ARE DOING DIFFERENTLY
workers. From recycling and going paperless to providing reusable bottles and filtered water, many companies are working to demonstrate that they’re part of the solution. Some are even going above and beyond – one company plans to plant a vegetable garden outside of its office this year, while another reports that its headquarters is 100% solar-powered. Industry employers are also investing in the physical and mental health of their workers. Many of this year’s Top Insurance Workplaces have on-site gym facilities, allowing employees to bypass expensive gym memberships. One employer provides cryotherapy three times a week to all employees, while another offers in-office massages throughout the year. Many employers also promote work-life balance through flexible working arrangements, whether it’s flexible hours, the ability to work from home or remotely, or allowing for a shorter workweek. In addition, many Top Insurance Workplaces boast a range of familyfriendly policies, from generous maternity and paternity leave to paid time off to care for a sick family member or attend school functions.
What’s your employee Fewer than 99 employees retention rate?
94%
“The company has established a flex time program that allows employees to vary their starting and ending times as long as they work their required hours. We also offer a super-flex policy, which, when scheduled in advance, allows for employees to leave early on Fridays as long as they have worked their full weekly hours prior.”
100 to 499 employees
85%
“We have a dedicated Zen Committee that manages our wellness program. We use a motivational website where employees can enter their daily routines (i.e. workouts, steps, food, sleep, etc.) to earn points and redeem those points for PTO or gift certificates to put toward gym memberships, health stores, massages, etc.” “We offer maternity leave, paternity leave and pet-ternity leave – leave for when you welcome a new pet. We also offer flexible work hours for those with families, as well as the option to bring your child to work up until 9+ months old.” “We have our weekly Beer 30 on Fridays, where we gather in the ‘living room’ to catch up with co-workers. During March Madness, we work from the conference room to watch games and recently the PGA tour. Also, in the summer, we go tubing, rock climb, hike, go boating and more.” “We have an employee-led Green Team, which has created an in-office recycling program for us. We also participate in a spring bike path cleanup and plant flowers in the community.”
28
500+ employees
90% Does your organization offer any flexible work options? Fewer than 99 employees
Yes
No
N/A
100-499 employees 500+ employees
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ORDINARY PEOPLE GETTING THE EXTRAORDINARY DONE
2019
2019
PRESENTED BY
PRESENTED BY
A M E R I C A
A M E R I C A
WHAT EMPLOYEES HAD TO SAY
“Culture around the office is a top priority of upper management. Our boss listens to feedback about the culture on the floor and allows us opportunities with staff members to continue to foster a very positive work environment.” ”We have an outstanding culture that is valuesdriven and aligns with my own personal values. The executive team is involved in the organization and social with staff, which I feel really adds to the team environment. Our agency values growth and development of all employees and does a great job to facilitate that within all departments.” “Sometimes, the atmosphere can make or break a job, even if you like the job itself. I work with some truly amazing, talented, kind, driven people, and I feel lucky to get to call them my co-workers!” “The company carefully selects employees and acquisitions that fit our existing culture.”
Does your organization offer wellness programs or incentives?
Yes
Let us go to work for you today.
No
Fewer than 99 employees
74%
With Midlands, you have access to the world’s foremost carriers and programs.
26%
100 to 499 employees
95%
5%
500+ employees
100%
A Safety National® Company
midlandsmgt.com marketing@midman.com www.ibamag.com
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SPECIAL REPORT
TOP INSURANCE WORKPLACES 2019 2019
PRESENTED BY
A M E R I C A
TOP INSURANCE WORKPLACES 2019
The following companies achieved an average satisfaction rating of 80% or greater from their employees
500+ EMPLOYEES
Headquarters: Raleigh, NC Year founded: 1984
USI INSURANCE SERVICES Headquarters: Valhalla, NY Year founded: 1994
88.4%
Score:
RISK PLACEMENT SERVICES Headquarters: Rolling Meadows, IL Year founded: 1997
Score:
86.6%
WORLDWIDE FACILITIES Headquarters: Los Angeles, CA Year founded: 1970
Score:
85.5%
Score:
85.4%
ACENTRIA INSURANCE Headquarters: Destin, FL Year founded: 2010
Score:
85.0%
SHEPHERD INSURANCE
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91.8%
BOLTON & COMPANY Headquarters: Pasadena, CA Year founded: 1931
Score:
90.8%
Score:
89.8%
Score:
89.5%
RELIANCE PARTNERS Headquarters: Chattanooga, TN Year founded: 2009
Headquarters: El Dorado Hills, CA Year founded: 2005
ROGERS & GRAY INSURANCE AGENCY Headquarters: Kingston, MA Year founded: 1906
Score:
89.3%
Score:
87.3%
Score:
86.9%
Score:
86.5%
JM WILSON CORP.
100-499 EMPLOYEES Headquarters: Carmel, IN Year founded: 1977
Score:
PATRA CORPORATION
UTICA NATIONAL INSURANCE COMPANY Headquarters: New Hartford, NY Year founded: 1914
BUILDERS MUTUAL INSURANCE COMPANY
Headquarters: Portage, MI Year founded: 1920
RICH & CARTMILL Headquarters: Tulsa, OK Year founded: 1922
BEECHER CARLSON Score:
94.4%
Headquarters: Pasadena, Ca Year founded: 1931
TOP INSURANCE WORKPLACE
RISK PLACEMENT SERVICES HEADQUARTERS: ROLLING MEADOWS, IL YEAR FOUNDED: 1997
In every community where Risk Placement Services [RPS] does business, its 3,000-plus employees nurture a corporate culture based on creativity, expertise, collaboration and professional ethics. It’s a culture that comes from the company’s beginnings as a four-person scratch operation.
Within two decades, RPS has grown to rank as one of the leading specialty insurance distributors and the largest MGA in the country. “Our promise to our clients is simple: We do whatever it takes to help them come through for their clients. It’s something we deliver on every day,” says RPS president Joel Cavaness. “Every employee is focused on this promise, no matter their role.” And the company walks the walk when it comes to its employees. With robust programs for leadership development, community involvement and volunteerism,
and diversity and inclusion, as well as an ongoing focus on encouraging innovation, RPS demonstrates why it received Top Insurance Workplace recognition from IBA. “We pride ourselves on our strong culture and ensure everyone is engaged in the company’s continued success,” says Emily Hathcoat, RPS’ vice president of marketing. “We are a company of experts who enjoy what we do and enjoy working together – we want that energy and passion for our business to come through in every interaction.”
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SPECIAL REPORT
TOP INSURANCE WORKPLACES 2019 ATLAS GENERAL INSURANCE SERVICES Headquarters: San Diego, CA Year founded: 2009
86.4%
Score:
STARKWEATHER & SHEPLEY INSURANCE BROKERAGE Headquarters: Providence, RI Year founded: 1879
85.2%
Score:
ANSAY & ASSOCIATES Headquarters: Port Washington, WI Year founded: 1946
Score:
83.7%
USG INSURANCE SERVICES Headquarters: Tampa, Florida Year founded: 2001
Score:
Headquarters: Warrington, PA Year founded: 2004
83.3%
Score:
80.8%
ITC
Headquarters: Grapevine, TX Year founded: 1920
Score:
80.1%
FEWER THAN 99 EMPLOYEES
Headquarters: Pittsburgh, PA Year founded: 1982
Headquarters: Totowa, NJ Year founded: 1876
90.9%
Score:
90.8%
Score:
90.3%
AXIS INSURANCE SERVICES Score:
90.3%
Score:
90.2%
HARMON DENNIS BRADSHAW Score:
96.7%
Score:
94.3%
ASHLEY GENERAL AGENCY
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Score:
PROVIDENT INSURANCE PROGRAMS
Headquarters: Middleton, WI Year founded: 1999
TEXCAP INSURANCE
Headquarters: Conroe, TX Year founded: 2010
91.1%
AMERICAN RISK MANAGEMENT RESOURCES NETWORK
RIVERLANDS INSURANCE SERVICES
Headquarters: Dallas, TX Year founded: 2005
Score:
ALLIED INSURANCE BROKERS
Headquarters: Franklin Lakes, NJ Year founded: 1999
Headquarters: Laplace, LA Year founded: 1972
91.3%
BOX INSURANCE AGENCY
Headquarters: Pittsburgh, PA Year founded: 1902
Headquarters: Carrollton, TX Year founded: 1983
Score:
ISU HANSON & RYAN
SIHLE INSURANCE GROUP Headquarters: Altamonte Springs, FL Year founded: 1974
KMRD PARTNERS
Score:
92.3%
Headquarters: Montgomery, AL Year founded: 1977
Score:
89.5%
GEHRING GROUP Headquarters: Palm Beach Gardens, FL Year founded: 1992
Score:
89.1%
FRATES IRWIN RISK MANAGEMENT SOLUTIONS Headquarters: Oklahoma City, OK Year founded: 1924
Score:
88.6%
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2019
PRESENTED BY
A M E R I C A
VAST
EAGAN INSURANCE AGENCY Headquarters: Metairie, LA Year founded: 1954
Score:
88.6%
ERICKSON-LARSEN Headquarters: Maple Grove, MN Year founded: 1980
Score:
88.2%
Score:
87.7%
SOCIUS INSURANCE SERVICES Headquarters: San Francisco, CA Year founded: 1997
Score:
87.5%
EMPIRE INSURANCE GROUP Headquarters: North Branch, MN Year founded: 2009
Score:
87.5%
Score:
87.4%
ERIE AND NIAGARA INSURANCE ASSOCIATION Headquarters: Williamsville, NY Year founded: 1875
Score:
87.4%
MID-HUDSON CO-OPERATIVE INSURANCE COMPANY Headquarters: Montgomery, NY Year founded: 1900
Score:
87.1%
PERRY & CARROLL Headquarters: Elmira, NY Year founded: 1860
Headquarters: Mount Vernon, WA Year founded: 1903
Score:
86.7%
Score:
86.4%
Score:
86.0%
TANGRAM INSURANCE SERVICES Headquarters: Petaluma, CA Year founded: 1999
LSB INSURANCE Headquarters: Reinbeck, IA Year founded: 1991
Headquarters: Pompano Beach, FL Year founded: 1962
Score:
85.1%
MOUNTAINONE INSURANCE AGENCY Headquarters: North Adams, MA Year founded: 1927
Score:
84.7%
HOME SERVICES INSURANCE Headquarters: New Brighton, MN Year founded: 2003
Score:
84.6%
Score:
84.5%
Score:
83.9%
NEW EMPIRE GROUP Headquarters: Long Beach, NY Year founded: 1998
BRUNSWICK COMPANIES Score:
86.9%
OLLIS/AKERS/ARNEY Headquarters: Springfield, MO Year founded: 1885
86.8%
FRANK H. FURMAN
MACKOUL RISK SOLUTIONS Headquarters: Island Park, NY Year founded: 1985
Score:
WAFD INSURANCE GROUP
DARR SCHACKOW INSURANCE AGENCY Headquarters: Gainesville, FL Year founded: 1992
Headquarters: Marquette, MI Year founded: 1885
Headquarters: Cleveland, OH Year founded: 1972
ALPER SERVICES Score:
86.9%
Headquarters: Chicago, IL Year founded: 1966
Score:
81.0%
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FEATURES
SECTOR FOCUS: FLOOD
When it rains, it pours IBA sat down with some industry experts to get the inside track on the ever-evolving – and increasingly crucial – world of flood insurance
IN EARLY July, FEMA released a huge data set of flood claims information from 1970 to 2018, and the findings within were as eye-opening as they were concerning. In the 1980s, the research revealed, the average flood claim was around $6,000. Fast-forward 30 years, and the changes are clear. Over the last decade – which has seen hurricanes Sandy, Harvey and Florence, along with massive flood events in South Carolina, Louisiana and Texas – the average flood claim was $25,000.
One positive associated with the sharp rise in flood events and claims costs is that people are becoming more aware of the risks they face. Although it seems people’s memories can be short when it comes to turning knowledge into action. “In the past 40 or 50 years, there has always been an increased awareness and take-up rate in flood insurance after a major event,” says Raghuveer Vinukollu, natural catastrophe solutions manager in Munich
FLOOD CLAIMS ON THE RISE AGAIN LOSSES PAID BY THE NATIONAL FLOOD INSURANCE PROGRAM $10 billion $8 billion
$9.52 billion
$8.74 billion
$6 billion $4 billion $2 billion $0
2012
$493 million
$380 million
2013
2014
$1.03 billion
$3.69 billion
2015
2016
2017 Source: FEMA
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Reinsurance America’s reinsurance division. “We saw spikes after Katrina, but then the take-up rate came down. Something similar happened after Ike. Human memory is shortlived; however, will that be the case going forward? My gut feeling would be no because these events are happening much more frequently, like Harvey and then Florence. Even the insurance industry didn’t expect those to happen in back-to-back years.” The frequency of catastrophic flooding shows no sign of slowing down. According to NASA, the last 12 months have been the wettest in 124 years. In fact, as the atmosphere warms up and there’s more moisture-holding capacity, experts expect these types of events to occur even more frequently. “We always say, ‘If it can rain, it can flood,’ so it’s not a question of ‘if ’ but a question of ‘when’ a serious flood event happens,” Vinukollu says. “As newer areas get flooded, people will realize the hard way that they don’t have flood insurance, and then they will have to make a change.”
Beyond the NFIP Homeowners with federally backed mortgages in areas designated by FEMA as 100-year floodplains are required to buy flood insurance under the National Flood Insurance Program [NFIP]. Since the fall of 2017, the NFIP has been subjected to a dozen short-term extensions. The last two happened this year: a two-week extension until June 14, followed by a four-month extension until September 30. The short-term approach to such a serious matter is creating even more challenges in an area of the market already under pressure. “The federal government has a full plate of agenda items, and flood is not always at the top of their to-do list,” says John Dickson, president and CEO of Aon Edge. “As a result, the NFIP has come up for expiration a few times, and Congress has not had the bandwidth to move forward. So, the measure
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either expired for hours or a couple of days and then got extended.” However, these short-term extensions are having an impact on individuals and families. “We were at a conference recently during what was a two-week extension, and there was a bank that said, ‘It’s great that the program is up and running and not stopped, but we are still in a lapsed protocol’ – meaning they were having to change the way they process mortgages because there is no long-term future for the federal flood program,” Dickson explains. “These downstream impacts are sometimes lost, and people lose sight of the person that is most impacted – the homeowner.”
“As newer areas get flooded, people will realize the hard way that they don’t have flood insurance, and then they will have to make a change” Raghuveer Vinukollu, Munich Reinsurance America The private flood insurance market has grown significantly in the past few years, particularly in Florida, Texas, California and New York, says Holly Widen, product manager for the Americas climate models at RMS. Many reinsurers have also increased
their involvement in the market over the past two years by participating in the NFIP Reinsurance Program. “Recent severe flood events have created more awareness and potentially helped the market grow, in addition to FEMA/
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FEATURES
SECTOR FOCUS: FLOOD
TOP 5 FLOOD EVENTS IN THE UNITED STATES
1
Hurricane Katrina
2
Hurricane Harvey
August 2005 NFIP payout: $16.3 billion
September 2017 NFIP payout: $8.91 billion
addition, technology is impacting claims by helping companies decide where adjusters should go first. Drones and remote sensors are widely available and can be used to provide a high-resolution image when reaching locations after a catastrophic event is difficult or impossible. “It’s really tough for a customer to go through a flood in their home, and any kind of delay can become a major issue in terms of satisfaction,” Vinukollu says. “So, for insurance companies, remote sensing is becoming a major tool that improves claims handling.”
Getting the message out
3
Superstorm Sandy
4
Hurricane Ike
“It’s easy to talk about the risk of flood when there’s two feet of water standing in the home, but by then it’s too late”
Louisiana flooding
John Dickson, Aon Edge
October 2012 NFIP payout: $8.81 billion
September 2008 NFIP payout: $2.7 billion
5
August 2016 NFIP payout: $2.47 billion
Sources: FEMA, US Department of Commerce, National Oceanic and Atmospheric Administration, National Hurricane Center
NFIP dropping the non-compete clause and cancellation rule, but there is still a large gap in flood coverage across the country,” Widen says. “This year’s Midwest flood unveiled another large region of the US that remains uninsured. Thus, there is plenty of opportunity to continue growing the private market.” Technology is also helping the insurance industry mitigate flood risk. The industry is currently using a handful of flood models, which are continuously being improved. In
36
While technology is having an effect on the market, its impact will be limited if property owners aren’t encouraged to think about flood risk in the most sensible way. The insurance industry has a responsibility
sations happen, but the dialogue must start with brokers. Dickson believes initiating those conversations gives brokers the opportunity to be seen as thought leaders in this growing space. “The pinnacle of that broker relationship is to be perceived as a trusted advisor,” he says. “If you’re really giving someone information that they can consume, digest and put into practice, you can be that trusted advisor who is offering meaningful protection, and you can make a real difference in someone’s life.” He advises brokers who want to expand their business in the flood space to make sure that they understand their options. “If you just have single solution in your back pocket to respond to flood needs, you have one arm tied behind your back when you’re fighting with your competition for business,” he says.
to initiate better conversations with homeowners – and to start those conversations well before disaster strikes. “It’s easy to talk about the risk of flood when there’s two feet of water standing in the home, but by then it’s too late,” Dickson says. “We need to think about how we can have these conversations and help better articulate risk and exposure while the sun is out, when the ground is not shaking and the wind is not blowing. We need to do a better job of explaining what risk of loss and financial protection looks like so people can make informed decisions that work for them.” Every stakeholder in the insurance space has a responsibility to make those conver-
“You need to make sure you’re up-to-date with the current market options.” It’s also crucial for brokers to be proactive and to ensure clients don’t hear about flood insurance for the first time when someone from the bank tells them coverage is required. “When you look at what is happening in the Midwest, Hurricane Harvey, East Baton Rouge, Florence – often, more than half of the victims weren’t required to have flood insurance, so they didn’t,” Dickson says. “The more people talk about the folks being exposed to flood where lenders don’t require flood insurance, the more brokers can respond to the need.”
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IBA_W
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Female or male, join us to celebrate, empower and boost the careers of women in insurance with:
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PEOPLE
BROKER INSIGHT
Reeling in the next generation Kyle Samuel, president of M&T Insurance Agency, tells IBA how the industry can attract and retain fresh talent to combat the ongoing wave of retirements
IBA: Lots of insurance professionals are reaching retirement age. How much progress has the industry made in terms of attracting new talent? KS: There’s full recognition within the insurance industry that we’ve got a talent issue. Something like 65% of our insurance workforce is due to retire in the next five to 10 years, and the industry is trying to address that issue. Companies have been working hard to create succession plans and talent pipelines that allow us to entrench ourselves moving forward. I think we’ve done a good job so far, but there’s lots more work to be done.
IBA: What are some tried-and-tested strategies for attracting and retaining fresh talent? KS: When it comes to attracting fresh talent, there are two key issues that seem important to the next generation: structure and development. They want a game plan that allows them to contribute within an industry and grow over time. If insurance organizations put together structured training and development programs, they’re more likely to attract and retain top talent. We’ve seen it with our insurance carrier partners and on the broker side in terms of sales talent – those who
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offer structured training and development programs are more likely to succeed.
IBA: What do younger employees want from their employers? KS: Talented young people who are coming
IBA: How can insurance companies build robust talent pools? KS: When recruiting the next generation,
up out of college want assurance that the organization they’re working for is invested in them. They’re asking questions like: “How are you going to make me better?” and “How are you going to invest in my long-term career?” Doing things like building development strategies and programs will help these employees to envisage their career paths and their futures within the insurance industry.
you have to start with the colleges. There are a number of great risk management schools in the US, through which the insurance industry can build robust talent pipelines. Furthermore, companies must ensure they’re making investments into their existing talent’s long-term development so that they have succession planning in place for when the baby boomer generation retires. Those strategies together – creating a robust pipeline and investing in existing talent – allow companies to build robust and diverse workforces that will help the industry be successful long-term.
IBA: How important is workplace culture in terms of engaging the next generation? KS: Culture is paramount. There’s the old saying that culture eats strategy for breakfast, which I think is very true. If you don’t have a culture that allows you to execute strategy,
ABOUT KYLE SAMUEL Kyle Samuel began his career as an underwriter with Chubb in Denver. In 1997, he joined Aon as a producer. He stayed with the company for 17 years, progressing to the position of senior vice president and resident sales director for Aon’s capital region in Washington, DC. In 2014, he was named managing director of the capital zone for Wells Fargo Insurance Services and later served as managing director of USI Insurance Services. He joined M&T Insurance Agency as president in May 2018.
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FAST FACTS: THE TALENT CRISIS
400,000
Number of insurance employees currently reaching retirement age
83.7 million
Projected size of the 65-and-older population in the US by 2050
80%
Proportion of millennials who report having limited knowledge and understanding of the employment opportunities available within insurance
“The more we can attract expertise from a disparate and diverse set of talent, the better off we’re going to be long-term” then you’re not going to achieve long-term success. Companies need to build an environment where diverse types of talent have the ability to thrive. They can achieve this by building a diverse talent pipeline and development programs, but also by creating safe places, like affinity groups and resource groups, where folks can reach out to peers and find a place where they can be comfortable, they can be themselves, and they can thrive.
IBA: What skills do insurance professionals of the future need to bring to the table? KS: I think we make a mistake when we market ourselves simply as an insurance industry. We’re part of the financial services industry, and so we can attract talent by making people understand that subjectmatter expertise across the wider financial services spectrum is important. For example, we’re going to need tech-
>5%
Percentage of millennials who have expressed an interest in working in insurance Sources: The Insurance Careers Movement, US Census Bureau, The Institutes
nology experts who will enable us to build more efficiency into our businesses. We’re also going to need subject-matter expertise for the wide range of emerging risks impacting our businesses, such as cyber and workplace violence. The more we can attract expertise from a disparate and diverse set of talent, the better off we’re going to be long-term.
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2/08/2019 3:45:20 AM
FEATURES
SECTOR FOCUS: CONTRACTORS
Solid foundations The contractor’s insurance market continues to perform well, but emerging risks could have serious implications for brokers’ clients
IN MANY industries, the old adage of ‘no pain, no gain’ serves as a pithy reminder that hard work and perseverance often yield results. In construction, however, it paints a grim yet realistic picture of the risks faced by workers. Contractors are under increasing pressures to get projects finished by deadline, and it’s the men and women on the ground whose bodies take the brunt of working hurriedly in hazardous environments. It should come as no surprise, then, that slips, trips and falls; lacerations from working with sharp-edged materials and power tools; and falls from ladders or scaffolding are often the subject of insurance claims in the construction industry. One noticeable trend in recent years has been the increase in claims related to strains or sprains to knees, arms, shoulders and backs caused by lifting or bending, as well as cumulative trauma [CT] claims created by performing consistent, repetitive motions. “The CT claims activity is most prevalent in classes such as drywall/wallboard, concrete or cement work, flooring and tile work,” explains Cricket Thomas, senior vice-president and program director at Blue River Underwriters.
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The commercial auto segment within the industry has also seen a large increase in claims frequency and severity in recent years. Roads are more crowded, distracted driving continues to be a growing issue, vehicles are becoming more costly to repair, and injuries from accidents are more expensive to treat. “The insureds that are proactive in promoting fleet safety through the use of telematics and training have been able to help improve their results,” says Greg Rose, program manager for Norman-Spencer’s wholesale team. “I anticipate that more contractors will adopt these safety measures as telematics options become more economical and insureds continue looking for ways to improve driving safety in an effort to reduce auto premiums.” The construction industry has seen strong growth in recent years, and many industry analysts expect that positive performance to continue. Competition remains fierce on general liability insurance, and many insurers are reducing rates in an effort to retain and write new business. The auto line, which has been challenging, has the potential to be a differentiator for carriers competing for accounts, Rose says.
“Many carriers are requiring substantial auto rate increases due to poor results,” he says. “Carriers that have been able to improve their auto results over the past couple of years with disciplined underwriting and pricing are now well positioned to compete in this space, which allows them to be successful in writing the other lines of coverage as well.”
The opioid epidemic and other pressing concerns One issue currently impacting the construction industry is the opioid addiction crisis. The National Safety Council recently reported that construction is one of sectors that has been hit hardest by the opioid epidemic. Thomas believes the industry’s rapid growth in recent years could, in a roundabout way, be to blame. The lack of
WHO NEEDS CONTRACTOR’S INSURANCE? Construction workers Carpenters Plumbers Electricians Landscapers Painters Handymen HVAC contractors Floor installers Pressure washers Masons
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“We anticipate a shift or hardening in market conditions over the next couple of years, which could reduce the number of carriers that will continue to write contractor business” Cricket Thomas, Blue River Underwriters
experienced tradespeople in the marketplace has led construction companies, under pressure to deliver on their contractual agreements, to hire underqualified or less experienced workers, which in turn increases the risk of accidents. “With inexperienced personnel comes a higher risk of injury on a job site, as they are not familiar with the work being performed or the necessary safety protocols to reduce the potential for injury,” Thomas explains. “It has become a more common practice for doctors to prescribe pain medication to an injured worker without necessarily determining the full extent of their injury. This might only mask the pain and allow the employee to return to work before they are properly healed and eventually cause a more serious injury, prolonging the employee’s dependency on pain medication and potential to become addicted.” Claims involving addiction also tend to be open for longer and are more expensive. In cases when pain medication is masking a more serious injury, the delay in getting the necessary treatment, which could include therapy or surgery, increases the overall time and expense related to the injured worker’s recovery. “This increased expense or trend will ultimately impact the insured’s loss experience, causing multiple years of higher premium levels due to poor experience,” Thomas says. “Carriers might potentially become more restrictive in the contractor space if they have indications that a particular trend is not improving, which could limit an insured’s options when approaching the market for coverage. At Blue River Underwriters, we’re closely aligned with our select carriers as to how we evaluate risks to mitigate this as best we can.” Another major concern in the space is the increasing prevalence of subcontractor issues that insurance companies have seen in recent years. It’s not uncommon for a subcontractor
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FEATURES
SECTOR FOCUS: CONTRACTORS
WHAT TYPE OF COVERAGE IS REQUIRED? No two construction companies are the same, so the coverage required will always differ slightly depending on the client’s full risk profile. However, the basic coverage options include: General liability Commercial auto Workers’ compensation Umbrella Contract surety
to not hold adequate coverage or, at times, any coverage at all. Also, subcontractors might not follow the safety protocols that are consistent with an insured’s requirements. “We have definitely been exposed to greater issues related to subcontractors over the past few years and have taken steps to inform our Blue River agents of these risks and potential associated costs when looking at their accounts,” Thomas says. “This type of scenario can have a large impact if a solid subcontract agreement with AI requirements, waivers, indemnification wording, etc., is not signed and in place, which leaves the insured exposed to potential claims.”
Market ups and downs The strong performance of the contractor’s insurance market has led to a number of new carriers entering the space in recent
While insuring contractors can be a growth opportunity for brokers and agents, expertise in this space is particularly critical. Agents need to be knowledgeable about the various types of risks and fully understand the potential exposures. They should also be prepared to educate clients on the proper protocols for reviewing contracts and implementing necessary safety procedures or loss-control measures to reduce potential claims activity. Agents also need to understand the claims climate in the territories they’ll be covering and assist their clients in updating hiring practices and requirements for new employees. Evan Aldrich, vice president of casualty brokerage at CRC Insurance Services, advises brokers interested in construction to make the industry a core competency, not just an opportunity for growth. Brokers who are
Pollution coverage Cyber Errors & omissions Directors & officers
“Take your time to learn from the ground up. There is value in understanding the construction processes” Evan T. Aldrich, CRC Insurance Services
Contractor’s equipment Employee dishonesty
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years. Whereas these carriers might have had a limited appetite in the past, most will now entertain the majority of construction classes, with the exception of higher-risk exposures such as roofing, high voltage, extreme heights and highway/freeway work. The market has been soft for some time, and ongoing rate decreases will continue to impact premium levels and potential profitability. “Although not guaranteed, we anticipate a shift or hardening in market conditions over the next couple of years, which could reduce the number of carriers that will continue to write contractor business, or at least require them to tighten their risk selection in this space,” Thomas says.
only dabbling in construction will consistently lose out to specialists who understand the coverage nuances and have relationships with equal expertise. “Beyond that, take your time to learn from the ground up,” Aldrich says. “There is value in understanding the construction processes, from contracts to means and methods, and knowing the wide variety of trades that comprise the construction industry, many with unique risk characteristics to address in creating insurance solutions that fit their exposures. Too often in our industry, we take coverages currently available and attempt to broad-brush apply them to an industry that may be ripe for modern-day solutions.”
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2/08/2019 9:53:42 3:46:03 PM AM 12/03/2018
FEATURES
CONFLICT
How to get what you want from difficult people Difficult people are a fact of life. Aytekin Tank offers three guidelines that can help you defuse even the most uncomfortable confrontations
ACCORDING TO Dr. Rick Brinkman and Dr. Rick Kirschner, authors of Dealing with People You Can’t Stand, there are several challenging personality types that make our lives harder: The Tank: Confrontational and angry The Sniper: Makes you look foolish The Grenade: Explodes into fury out of nowhere The Know-It-All: Authoritative and must have things done their way The Whiner: Points out everything wrong in vague terms You might be thinking of a person to put
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one of these labels on. They could be a friend, co-worker, customer or family member (circa that tense Thanksgiving of 2016). Still, according to executive consultant Tim McClintock, only about 10% of the people you encounter are categorized as difficult, even if some days that number feels much larger. The other day, I was standing behind a guy dressed in a tan suit at a coffee shop. He was on his phone while simultaneously rambling off a complex drink order. Between the mumbles at the barista and the chatter into his wireless earbuds, I think all of us waiting in line knew what was going to happen next. At the end of the bar, he picked up his coffee, took a sip and immediately lost it over the ‘extra foam’ now destined to ruin his day. Unkind words were exploded across
the counter, leaving the barista temporarily frozen. A Tank – confrontational and angry – was on the loose. I watched as the barista listened to what he said, put his head down and redelivered the order to the man in just a few moments. He handed the cup over kindly, watched for his approval, nodded and then went to his next order as the man walked out the door, still talking on his phone. The barista had gotten what he wanted. He kept his goal in mind, and by listening and then taking action in the face of verbal accosting , he got him to leave. When you’re communicating with any difficult personality, being in the moment is hard. At JotForm, we have over 3.5 million users, and some of our users give us a difficult time
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Listening, combined with the intent to understand what is being sought, gives you a prime opportunity to end the interaction while achieving your goals almost every single day. The following guidelines help me defuse situations, from handling our customer relations to managing our team of more than 108 employees.
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Listen and understand the end goal
At first, the barista froze to avoid conflict. We’re all hard-wired like that. Every last one of our brains still defaults to fight-
flight-freeze when something highly stressful or unsettling occurs. However, when a person is acting unreasonably right in front of you , being like the barista works perfectly. He was able to not only move through this automatic response of fight-flight-freeze, but also get clear on what he wanted and execute flawlessly. Listening, combined with the intent to understand what is being sought, gives you a prime opportunity to end the
interaction while achieving your goals. The barista understood that no matter what the man said, what he really wanted was to have his coffee the way he asked for it. He listened past all the yelling to delineate how he could fix the situation while achieving his goal of watching him walk out the door. The feedback was harsh, but this barista was a pro.
2
Focus on what you can do
You might not be able to avoid what difficult people have to say, but you have control over what you do and, more importantly, what you ask. Asking questions puts you in the driver’s seat to let the person air what they have to say while guiding them to what you can do anything about.
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FEATURES
CONFLICT
Asking questions puts you in the driver’s seat to let the person air what they have to say while guiding them to what you can do anything about Difficult people, especially the ones Dr. Brinkman and Dr. Kirschner refer to as Whiners, require a lot of directed questioning so you can understand their desires and what actions are available to you. On the flip side, during this intense questioning, you might end up uncovering something about yourself you wouldn’t have known otherwise. We decided to test this process by conducting face-to-face interviews with our users. In one of our first interviews, we came up close and personal with the Whiner. This person drained our time, providing vague descriptions while sprinkling them with unpleasant commentary. We didn’t give up – we kept digging, always keeping in mind our goal of how we could create a better product. An hour later, we struck gold. We found out this customer had been using JotForm as a productivity tool.
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Customer after customer shared similar tales as our interviews continued over the following weeks. By continually asking deeper questions of a difficult customer and not giving up, we not only found a new focus, but we also discovered the difference between challenging people and unpleasant comments.
3
Make a distinction between a difficult message and a difficult person
Earlier this year, a customer made several new feature requests and was pretty adamant about their unhappiness with our functionality in a support thread comment. Good news: They felt comfortable enough to let us know where we didn’t meet their expectations. Bad news: Yikes. I didn’t take the grievances shared on our forum personally. I did, however, take them
seriously. I don’t usually jump into support discussions, but this was a critical moment to examine whether this person was being difficult or giving us an opportunity for improvement. Further, what if by challenging our platform and strategies, this customer was giving us a huge gift? I needed to find out. I saw this as an opportunity and stepped into the forum to respond to the customer’s experience. I provided details on what was going on with the platform that could be causing their issues and also offered my email address for further discussion. It always helps to get clear on the difference between a difficult message and a difficult person. What couldn’t be seen on the thread was us listening to their issues and ascertaining their end goals through deepdiving questions. You will always come across challenging people, but by listening to them, asking questions, understanding their goal and focusing on your actions, you can put yourself in the best position to succeed in getting what you want. It won’t always happen in the most pleasant way, but keeping these guidelines in mind helped us handle challenging moments both with our users and within our organization, and hopefully they’ll help you grow, too. Don’t freeze and walk away, but instead engage head-on with these personalities. They will push you to innovate, make things better and fill in gaps you didn’t know were there before they arrived. I’d say that’s a gift worth getting at the expense of an uncomfortable confrontation, wouldn’t you? Aytekin Tank is the founder and CEO of JotForm, an online form creation software with four million users worldwide and more than 100 employees. A developer by trade but writer by heart, Tank shares stories about how he exponentially grew his company without any outside funding. For more information, visit jotform.
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PEOPLE
CAREER PATH
PROBLEM SOLVER
Jennifer Metzger has always been driven to learn, teach others and improve at every opportunity During her undergraduate degree, Metzger faced down her fear of public speaking by taking every class she could find that would force her to speak in public. During this quest, she happened upon a class about the First Amendment, which ultimately led her to study law. “I was always questioning things and not taking things at face value. I fell in love with the law.”
1992
FINDS HER VOICE
2004 GETS A 360-DEGREE PERSPECTIVE While working at Cozen O’Connor as a junior partner, tasked with helping the managing partner expand the firm’s coverage practice, Metzger heard that Aon was looking for lawyers to join its brokerage team. “I decided to embrace the opportunity to get a full 360-degree view of insurance.”
2007 BROADENS HER UNDERSTANDING When CNA decided to move some of its outsourced work back in-house, friends of Metzger’s who worked for the insurer took the opportunity to bring her on board. “I joined just when the financial crisis was hitting – I stepped into class-action claims. It afforded me the opportunity to understand underwriting and risks. I am always trying to improve upon things, educate myself and educate those around me.”
2019 EMBRACES A STARTUP MENTALITY Metzger was inspired to make the move to Hiscox earlier this year by the startup-like aspects of her position, which involves bringing ideas and new products to fruition.
“This role involves a lot of learning; what excited me most was being able to come full circle – this represents an opportunity to take what I’ve learned and translate it”
2000
LANDS IN INSURANCE Metzger’s second job out of law school provided her with her first contact with insurance. But it wasn’t until she became a coverage attorney that she realized the depth of the industry’s career potential. “I wasn’t aware of how big and complex the industry was and how it touches every aspect of business. That experience really opened my eyes to the possibility of an insurance career.”
2004 SHARES HER KNOWLEDGE As a VP at Aon Risk Services, Metzger used her background in coverage to educate the team. “The group wanted people with coverage backgrounds to come in and help the team understand the risks we were seeing; that appealed to me. There’s part of me that loves teaching, and it was an incredible learning opportunity.”
2017 DELVES INTO UNDERWRITING A friend working at Nationwide Insurance clued Metzger in to an opportunity to join the team as an underwriter. Always up for a challenge, she stepped into the role. “They were looking for a lawyer to join their underwriting team to facilitate the onboarding of new programs; we partnered with the legal and filing teams to roll out new programs.”
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email iba@keymedia.com
The Portla nd Singing Christmas Tree includes da nce a nd dra ma, as well as several hu ndred choral voices
6
Number of CDs the Greenidge family has put out
21,000
Number of people who come to see the Portland Singing Christmas Tree every year
11
Age at which Greenidge joined her first choir
RAISING HER VOICE In the midst of a busy career as an insurance adjuster, Nancy Greenidge still finds time to devote to music NANCY GREENIDGE’S love for music began early; her school years were spent singing in choirs and touring vocal groups. At 23, the Portland, Oregon-area adjuster was drawn by a newfound love of gospel music to the 100-voice New Hope Community Church choir, where she met her
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husband. Today, the couple and their three daughters, along with their sons-in-law and grandchildren, travel and sing together and have even put out CDs as a family. Greenidge and her family have lent their voices to many events over the years, but one that holds a special place in her
heart is the annual Portland Singing Christmas Tree. The two-hour musical production – an institution in the city since 1962 – showcases contemporary and traditional holiday music with the help of more than 350 adult and youth choir members, drawn from 130 church choirs in the area.
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