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IBAMAG.COM ISSUE 8.09 | $12.95

LEADING THE CHANGE

The men and women who are putting in the work to build a more diverse and equitable industry THE WHOLESALE E&S OUTLOOK

Can the market continue its impressive growth in the face of COVID-19?

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A NEW FRONTIER FOR SPACE INSURANCE

How insurers are approaching the dawn of commercial space travel

EMERGING RISKS AND INNOVATION

The latest on cyber threats, climate change, COVID-19 and other critical risks

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ISSUE 8.09

CONNECT WITH US

CONTENTS 46

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

UPFRONT 04 Editorial

Trump’s TikTok brouhaha and its implications for cyber insurers

06 Statistics

Key data that should be on your radar this month FEATURES

WHOLESALE E&S MARKET REPORT

SPECIAL REPORT

22

The E&S market continues to enjoy healthy growth – but can it stay strong amid a pandemic, natural disasters and other challenges?

52

PEOPLE

INDUSTRY ICON

10 Intelligence

This month’s big movers, shakers and new products

12 Workers’ comp update

What it takes to get workers’ comp claims closed quickly

14 Technology update

Do insurtechs have a competitive advantage over large carriers? How the insurance industry’s renewed focus on digital transformation is playing out in the claims space

FEATURES

EMERGING RISKS AND INNOVATION Five industry experts on what insurers are doing to address the world’s most pressing risks, from COVID-19 to climate change

How AmWINS CEO Scott Purviance helped take a failing company and turn it into a leading global wholesaler

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FEATURES

2

A new era of commercial space flight is here – so how are insurers responding?

16 Opinion

LEADING THE CHANGE

At a time when many companies are trying to figure out how to make meaningful progress on diversity and inclusion, these insurance leaders are doing just that – and they’ve got some concrete ideas about how the industry can further the cause

08 News analysis

A FRONTIER IN FRONTING

How a fronting insurer can help program managers navigate an increasingly hard market

FEATURES 62 Diversity-minded, technology-focused

In less than a year, Protectdiv has made significant headway on its goal to fill a major gap in supplier diversity

PEOPLE 64 Other life

A portrait of artist and insurance executive Pamela Davis

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RESPONSIVE&SOPHISTICATED E&S is at the heart of what we do, from listening and acting to meet the unique needs of our partners, to understanding the nuances of complex tasks. Let us show how we can put the very best of E&S together for you. nationwide.com/bESt

E&S/Specialty | AM Best rating of A+ (Superior), FSC XV | Fortune 100 company Nationwide and the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. Š 2020 Nationwide ESC-0268M3 (05/20)

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UPFRONT

EDITORIAL

The front lines of the data battlefield

D

ancing grandpas, baby-bottle flips, epic lip syncs, celebrity clips – you can find it all on TikTok, a user-generated short-video app owned by Chinese firm ByteDance. In recent months, TikTok has exploded into an internet sensation, surpassing 2 billion downloads worldwide and around 800 million monthly active users. But the Chinese app’s heyday has been short-lived. On August 7, President Trump issued an executive order that would ban TikTok from operating in the US unless the social media app is sold by ByteDance within 45 days. The Trump administration cited concerns over national security, alleging that the app censors content and could allow the Chinese government to access Americans’ private data. The US is not alone in scrutinizing TikTok: India recently blocked the app completely amid rising tensions with China over the two countries’ disputed border in the Western Himalayas. Other countries, including Canada, Australia and the UK, are looking closely at whether the ownership of personal data leaves their respective countries via the app, but so far they have not threatened outright bans.

The quick rise and potential fall of TikTok is important because it revolves around data – an area of increasing concern for cyber insurers The quick rise and potential fall of TikTok is important because it revolves around data – the privacy of data, the protection of data, the storage of data and, perhaps most importantly, the politics of data. These are all areas of increasing concern for cyber insurers, who must find solutions to protect companies that handle, store and use data in their daily operations. Today’s technology- and dataheavy firms are not only subject to increasingly stringent and punitive data privacy laws, but they must also contend with volatile international relations, trade disputes and arguments around intellectual property – and those are just the visible threats. Under the surface, a much darker cyber force is bubbling away. A growing global network of threat actors is looking to exploit cyber vulnerabilities in order to steal data for financial and/or political gain. Not a week goes by without news of a data breach, a ransomware attack or some other cyber-related incident. The challenge for companies and cyber insurers alike is that the tactics used by threat actors keep evolving. While cyber may no longer be considered an emerging risk, new exposures in the cyber realm will continue to emerge for many years to come. The team at Insurance Business America

www.ibamag.com MAY 2017 EDITORIAL

Managing Editor Paul Lucas Editor Bethan Moorcraft Journalists Alicja Grzadkowska, Ksenia Stepanova, Camilla Theakstone, Mia Wallace News Writers Lyle Adriano, Terry Gangcuangco, Roxanne Libatique, Gabriel Olano Staff Writers Ellen Burkhardt, Tom Goodwin, Kasi Johnston, Ryan Smith Copy Editor Clare Alexander

CONTRIBUTORS Sasha Korol

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

SALES & MARKETING Vice President, US Market Cathy Masek Vice President, Sales John Mackenzie Media Sales Manager Desiree McCue Global Head of Media Marketing Adrijana Monevska

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, desiree.mccue@keymedia.com

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

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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Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

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UPFRONT

STATISTICS GLOBAL INSURTECH FUNDING REBOUNDS

COMPOUND ANNUAL GROWTH RATE OF INSURANCE PREMIUMS 15%

2009–2019 2019 2020–2030 (projected)

10% 5%

71%

The global insurance industry was growing strong through 2019, when premiums rose by 4.4% – the highest rate of growth since 2015. However, the COVID-19 outbreak has turned everything on its head: Allianz’s latest Global Insurance Report predicts that premium income will decrease by 3.8% worldwide this year, a plunge that’s three times larger than the one the industry experienced during the global financial crisis in 2008. However, Allianz noted that while the pandemic has wreaked havoc on the economy, it is also expected to reinforce several insurance trends, including the push toward digitalization and an increased focus on emerging Asian markets, along with heightened significance of environmental, social and governance (ESG) factors as a driver for insurance business.

$1.56 billion

Total amount of global insurtech funding in the second quarter

$912 million

Amount of global insurtech funding in the previous quarter

2.2%

4.2% 3.5%

0%

COVID-19 HAMPERS GLOBAL INSURANCE GROWTH

Quarterly increase in insurtech funding in the second quarter of 2020

North America

15%

United States

10% 5%

2.0%

4.2% 3.5%

0%

Global 15% 10% 5% 3.2% 4.3% 4.4% 0%

CRISIS COULD ERODE CAPITAL BUFFERS The economic fallout from the COVID-19 crisis could soon eat into many insurers’ capital buffers, S&P Global Ratings warned in mid-July. While S&P noted that insurers’ capital strength helped them weather the first wave of the pandemic, it expects asset value declines, rating migrations and heightened default rates to erode capital buffers as the pandemic rages on.

SIZE OF INSURERS’ CAPITAL BUFFERS, 2019 Less than 0%

0%–4%

4%–7%

7%–10%

10%–15%

More than 15%

GLOBAL NORTH AMERICA

4

Number of mega-deals (over $100 million) completed in the second quarter Source: Willis Towers Watson Quarterly InsurTech Briefing, Q1 and Q2 2020

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EMEA APAC LATIN AMERICA Source: Resilient For Now: A Second Wave Could Eat Into Insurers’ Capital, S&P Global Ratings, July 2020

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CYBERCRIMINALS PREYING ON FEAR OF COVID-19

China 15% 13.1% 9.2% 9.5% 10%

Cybercriminals are increasingly using the fear and uncertainty swirling around the COVID-19 pandemic to attack victims, according to Beazley’s latest Breach Insights report. Both ransomware and phishing incidents have risen since the onset of COVID-19, and Beazley has also recorded a significant jump in phishing messages purporting to offer information about the pandemic.

5% 0%

15%

Western Europe

Japan

0%

1.1%

0%

10% 5%

4.3% 1.7%

25%

5%

Quarterly increase in ransomware incidents in Q1 2020

-0.5% -2.3%

-5% 2.2%

156% Quarterly increase in ransomware incidents in the manufacturing sector

16%

Asia (ex. Japan)

Quarterly decrease in business email compromise scams in Q1

15%

10% 9.7% 5%

8.1% 6.8%

100%+

0%

Increase in new COVID-19-related phishing templates between January and March 2020 Source: Beazley Breach Insights, June 2020

Source: Allianz Global Insurance Report, July 2020

CONSTRUCTION RATES RISE Despite construction capacity in the London international market remaining stable at around $3.7 billion, the uncertainty and project delays caused by the COVID-19 pandemic have driven rate increases by an average of 15% to 20%, according to a July analysis from Willis Towers Watson.

CONSTRUCTION RATE INCREASES, LONDON INTERNATIONAL MARKET 50%

WILL INSURANCE BONUSES REMAIN HIGH? After a strong year for P&C insurers in 2019, industry CEOs continued to receive large bonus payouts, according to a recent study by CAP. Because compensation in insurance has been less affected by COVID-19 than other industries, CAP said it doesn’t expect any major overhauls in insurers’ executive compensation programs for 2020.

50%

MEDIAN ANNUAL INCENTIVE PAYOUTS FOR INSURANCE CEOs

40%

20%

20% 10% 0%

500%

30%

30%

5%

5%

General liability

Excess/umbrella

Annual program builder’s risk/CAR

Single project Professional liability builder’s risk/CAR

Source: Global Construction Rate and Trend Update, Willis Towers Watson, July 2020

PERCENTAGE OF TARGET

500%

400%

400%

300%

300%

200%

200%

100%

100%

0%

2017

2018

2019

0%

PERCENTAGE OF SALARY

2017

2018

2019

Source: Insurance Industry Report 2019–2020, Compensation Advisory Partners

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UPFRONT

NEWS ANALYSIS

The new space race SpaceX’s recent launch of NASA astronauts has ushered in a new era of space commercialization – and insurers are rushing to figure out the best way to insure all of the risks involved

IT’S BEEN a historic year for the global space industry. On May 30, millions of people around the world tuned in to watch the launch of SpaceX’s Crew Dragon capsule to the International Space Station. This monumental event marked not only the first time that NASA astronauts have taken off from US soil since 2011, but also the first time that a commercially designed and built spacecraft carried astronauts into space. Now, after the astronauts’ safe return to Earth on August 2, hopes are high for the future of commercial space travel.

commercial company. In the past, missions of this scale and complexity were the sole preserve of government agencies.” Until 2012, space insurance premium was typically in the range of $750 million to $1 billion a year, says Chris Kunstadter, global head of space at AXA XL. From 2012 to 2019, that number steadily dropped; 2019 was an illuminating year for the global space insurance sector. Total written premium was approximately $500 million, while total losses amounted to around $800 million, which is well within the typical range of losses over

“For the brave investor, rewards can be exceptional – and insurance is critical to underpin the financial risk that goes hand in hand with those potential rewards” Peter Elson, Gallagher “A new era for space commercialization is unfolding right now,” says Peter Elson, CEO of Gallagher’s aerospace practice. “Some events in the wider space industry may have a déjà vu quality, such as the [use of the] Falcon 9 rocket. But what was new in those operations was the central role played by a

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the past 20 years. However, combined with the lower premium, this caused concerns for some space insurers over the volatility of the line of business. Some pulled out of the sector altogether, while others cut capacity or put in restrictions to minimize their exposures. “It will be interesting to see how the rest

of this year goes,” Kunstadter says. “July, for instance, turned out to be a huge month for insured launches – and uninsured launches, too. Up through the first half of this year, the global insurance premium for space insurance amounted to about $120 million, and we’re expecting the same amount of premium just from launches in July alone.” With so much renewed attention on the opportunity for space commercialization, it’s likely that the insurance industry’s role in driving the next step will also be subject to increased scrutiny. Insurance is, and will continue to be, a key enabler of space commercialization, Elson says, explaining that space projects require significant investment, much of which is incurred way ahead of any revenue coming on stream. “For the brave investor, rewards can be exceptional – and insurance is critical to underpin the financial risk that goes hand in hand with those potential rewards,” he says. “In the long run, insurers and brokers will need to get to grips with some fundamental

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FAST FACTS: THE COMMERCIAL SPACE INDUSTRY

10.3 million

Number of people worldwide who watched SpaceX’s first astronaut launch in May 2020

$350 million

Revenue currently generated by the global space industry

$1.1 trillion+

Revenue the global space industry is expected to generate by 2040

1,100

Projected number of annual satellite launches by 2025 Photo courtesy of SpaceX

shifts in demand.” In time, Elson says, the pace at which technology can be developed and implemented is likely to expand commercial opportunities in both the space industry itself and for the insurers supporting those

Kunstadter stresses that insurance companies’ involvement must go beyond simply insuring risks – AXA XL is involved in a broad range of space industry activities, from business development to outreach and advocacy. Kunstadter says insurers must be

“We want to make sure we have smart clients, smart brokers and even smart competitors. If we have these, then people aren’t going to be doing silly things” Chris Kunstadter, AXA XL ventures. Today, the commercial space industry is in the development stage, which poses some real challenges to insurers in terms of the products and services they provide for unproven technology, as well as the resource-heavy technical process they follow in evaluating risks.

at the very forefront of understanding to address the risks that others have not yet figured out how to deal with. “We’re working with the industry to try and develop standards [and best practices],” he says. “And we have a lot of statistics that we share within the industry because we

Sources: Space.com, Morgan Stanley, MIT Technology Review

want to make sure we have smart clients, smart brokers and even smart competitors. If we have these, then people aren’t going to be doing silly things, and [this prevention] will help the industry overall.” The coming years should present new opportunities within the insured launch sphere, Kunstadter says, citing the development of space systems by Virgin’s Richard Branson and Amazon’s Jeff Bezos, who will likely be looking for insurance solutions to protect their investments. Meanwhile, Elson notes that SpaceX is part of a very successful cadre of commercial businesses with the vision and backing to open up a raft of new opportunities in space. From Branson’s Virgin Galactic and Bezos’ Blue Origin to the space communication arena, where Amazon’s Project Kuiper and SpaceX’s Starlink are looking to provide accessible global broadband services using constellations of low-orbiting spacecraft, the future of space commercialization is clearly already underway.

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

AHT Insurance

Mason & Mason

Based in New England, Mason & Mason specializes in niche businesses in the venture capital, technology and life science spaces

Allstate

National General Holdings

The $4 billion deal will further expand Allstate’s independent agent distribution network

Axon Underwriting Services

Allianz Global Corporate & Specialty

Axon has acquired AGCS’ US contaminated and consumer products recall insurance business

Eberl

US Adjusting Services

The two claims firms are combining operations to grow their claims support and carrier partnership businesses

Randall & Quilter Investment Holdings

Tradesman Program Managers

R&Q subsidiary Sandell Re will merge with the New York-based MGA in exchange for a 35% stake in the new entity

Sirius International Insurance Group

Third Point Reinsurance

The combined firm will be known as SiriusPoint and will have approximately $3.3 billion of tangible capital

Worldwide Facilities

Clearwater Underwriters

Clearwater is a Florida-based surplus lines MGA that specializes in personal and commercial lines, flood, and personal liability

Allstate makes $4 billion deal for National General

Allstate has expanded its presence in the personal lines market with its acquisition of National General Holdings Corp. for $4 billion in cash, or around $34.50 per share. National General focuses on auto insurance and other personal lines and has a network of more than 42,000 independent agents. The transaction is expected to close in early 2021. “Acquiring National General accelerates Allstate’s strategy to increase market share in personal property-liability and significantly expands our independent agent distribution,” said Allstate chair, president and CEO Tom Wilson. “National General’s business and technology platforms will be utilized to further strengthen Allstate’s existing independent agent businesses.”

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Venture adds community and social services program

National program administrator Venture Insurance Programs has rolled out Community Care, a new insurance program for community and social services organizations, and has tapped former GuideOne social services underwriter Erin Crawford Peterson to lead it. The new program will be written on an admitted and non-admitted basis through three carriers rated A (Excellent) or better by A.M. Best. It will provide liability, property, auto, inland marine, crime and umbrella coverage for nonprofit and for-profit organizations that provide a range of community and social services.

Walmart moves into health insurance market

Retail giant Walmart has entered the health insurance market and has begun hiring licensed insurance agents for its new business, known as Walmart Insurance Services. A Walmart spokesperson characterized the company’s move into insurance sales as an expansion of the access to insurance information it has been providing through its Walmart Health clinics and Healthcare Begins Here education program. The retailer also previously partnered with Humana to offer a Medicare prescription drug plan. Job postings on Walmart’s website indicated it is looking for Medicare-focused insurance agents.

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PEOPLE One80 Intermediaries introduces pandemic risk policy

Boston-based insurance brokerage One80 Intermediaries has launched Pandemic Protector, a policy that covers risks arising from pandemics and epidemics. Underwritten in the London market and designed for companies of all sizes in all 50 states, the policy offers limits of up to $100 million. It provides non-damage business interruption insurance for loss of gross profit due to an epidemic and/or pandemic outbreak. While the current COVID-19 pandemic is not insurable retroactively, the policy can be applied to comparable future outbreaks.

RB Jones Marine debuts ocean cargo product

RB Jones Marine, a business unit of H.W. Kaufman Group, has launched a new ocean cargo stock throughput product in partnership with Atain Insurance Companies. Encompassing more than a dozen supply chain classes, the product is designed for those who purchase goods or raw materials from foreign suppliers, manufacture or sell finished goods overseas, warehouse imported goods, or finance clients with import or export operations. Mark Engel of RB Jones Marine said the product will “offer muchneeded ocean cargo insurance as many companies look to revamp and relocate their supply chains.”

AHT, Coalition launch cyber program for manufacturers

AHT Insurance and Coalition have teamed up to create NAM Cyber Cover, an exclusive cybersecurity and risk mitigation program for members of the National Association of Manufacturers (NAM). According to NAM head Jay Timmons, the rapid digitization and workplace disruptions created by COVID-19 have created unprecedented risks for NAM members. Designed to identify, protect and manage the unique exposures facing manufacturers, NAM Cyber Cover puts the focus on prevention, featuring full-cycle management and response to potential risks and cyberattacks.

NAME

LEAVING

JOINING

NEW POSITION

Sheree Davis

Apollo Managing General Agency

Breckenridge Insurance Services

Senior vice president and program director

John Gambino

Great American Insurance Company

RB Jones Marine

Underwriting manager, cargo

Steven Goldman

N/A

Chubb

Division president, Chubb North America financial lines

Eva Huston

Verisk Analytics

Duck Creek

Chief strategy officer

William Kramer

Ensurian

Liberty Company Insurance Brokers

Vice president

John Lupica

N/A

Chubb

President, North America insurance

Travis Marshall

Hub International

SterlingRisk Aviation

Vice president and senior account executive

Scott Meyer

N/A

Chubb

Senior vice president, Chubb Group, and division president, Westchester

Leroy D. Nunery II

N/A

Million Women Mentors’ Women in Insurance Initiative

Senior advisor

Kristopher Parsons

AssuredPartners Aerospace

Breckenridge Insurance Services

Senior vice president and senior broker

Erin Crawford Peterson

GuideOne Insurance

Venture Insurance Programs

Practice leader, Community Care

Claire Willis

N/A

CRC Group

National personal lines practice leader

Chubb names president of North America insurance

Chubb has promoted John Lupica, the current vice chairman of Chubb Group and president of its North America major accounts and specialty insurance team, to the role of president of North America insurance. Lupica will oversee the company’s general insurance business in the US, Canada and Bermuda, including commercial P&C, personal lines, agriculture, and accident and health insurance. Chubb executive vice chairman and COO John Keogh called Lupica “one of our industry’s most experienced and accomplished insurance executives,” adding that “the time has come to have one outstanding executive lead this premier business spanning all of our divisions, including our retail and wholesale commercial P&C businesses.”

CRC Group appoints national personal lines head

CRC Group has promoted Claire Willis to national personal lines practice leader. Based in Jackson, Mississippi, Willis will be responsible for growing CRC Group’s personal lines footprint nationwide. She joined CRC Group in 2006 as a personal lines underwriter and has since grown and managed a large personal lines book of business. “Over the past 12 months, we have invested in new personal lines talent across the country, while at the same time investing in technology to establish an online personal lines agent portal that is scheduled to roll out this fall,” said CRC Group CEO Dave Obenauer. “With Claire’s leadership, we hope to accelerate those initiatives and continue to achieve industry-leading growth in the personal lines marketplace.”

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UPFRONT

WORKERS’ COMP UPDATE NEWS BRIEFS Mitchell/Genex finalizes purchase of Coventry from CVS Health

Mitchell/Genex has finalized its acquisition of Coventry Workers’ Comp Services from CVS Health. Financial terms of the transaction were not disclosed. In business for more than 35 years, Coventry provides care and cost management programs for workers’ compensation and auto insurance carriers, third-party administrators, and self-insured employers. Following the acquisition, Coventry will retain its existing brand and will continue to be led by president and CEO Art Lynch.

Pie Insurance launches partner portal with appetite checker

Digital workers’ comp insurer Pie Insurance has launched a new partner portal that makes it easier for partner agents to receive quotes and track their status in real time. The portal also features an integrated appetite checker, which allows it to make automatic coverage decisions on more than 70% of class codes. “This functionality is a game-changer for our agency partners,” said Pie Insurance co-founder and president Dax Craig. “By providing automatic bind and decline decisions for our partner agents, Pie is transforming the way agents do business.”

California gets new tool to analyze COVID-19 claims

The California Workers’ Compensation Institute (CWCI) has launched a new data tool that allows users to compare COVID-19 and non-COVID-19 claims. Incorporating integrated data from CWCI, the Bureau of Labor Statistics and the California Division of Workers’ Compensation, the new tool draws on 600,000 reported claims for the first

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six months of accident years 2019 and 2020, including 14,470 pandemicrelated claims. Users can explore and analyze COVID-19 claim counts by month, the volume of reported workers’ comp claims by region/industry, and denial rates for COVID-19 and nonCOVID-19 claims by month.

Amerisure names regional vice president of field claims

Workers’ compensation insurer Amerisure has promoted Kevin Korte to the role of regional vice president of field claims for the company’s Central and South regions. Korte joined Amerisure in 2002 as a workers’ compensation supervisor and most recently served as field assistant vice president for the Central region and manager of the field claims operation in the South region. In his new role, Korte will lead both the Central and South claims regions, as well as support the company’s field marketing and underwriting business partners in both regions.

Texas Mutual helps emergency services organizations

Texas Mutual Insurance Company, in partnership with Volunteer Firemen’s Insurance Services of Texas, plans to award a total of $500,000 to nonprofit emergency services organizations in the state through two grant programs. The company has earmarked $200,000 for financial relief for emergency services organizations affected by the pandemic. The remaining $300,000 will be used to help organizations invest in health and wellness. The financial relief grant applications are now open; each eligible applicant will receive $2,500 on a firstcome, first-serve basis. Applications for the health and wellness grants open in September, and the grants will be awarded in the first quarter of 2021.

How to close claims faster What one insurer is doing to get workers’ comp claims resolved quickly – even during the pandemic

In the midst of an unprecedented health and financial crisis, the last thing anyone wants is a delayed workers’ compensation claim. It can be challenging for insurers to find ways to expedite the claims process, particularly in the middle of a pandemic, but it’s not an impossible feat, as Applied Underwriters has found. “Applied has cultivated a culture that is laser-focused on closing claims,” says Brady Chan, the company’s vice president of claims operations. “This mindset begins when a claim opens and the adjuster outlines a plan to close the file. This is made possible with the claims handling philosophy of getting all injured workers to the best doctors while focusing on the ultimate goal of returning to work as quickly and safely as possible.” Applied Underwriters’ goal to close claims as quickly as possible is supported by its belief in reduced caseloads for adjusters, Chan explains, which allows them to manage each claim with a tailored approach. “The lower caseloads come with added expectations of attention to detail and documentation, which are critical in being ever present and mindful of each development on a claim in order to revise strategy to always point a claim towards closure,” he says. Another advantage for Applied Under­ writers is that its entire claims operation is

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in-house. In addition to adjusters, Applied employs utilization review nurses, medical bill reviewers and Medicare Set-Aside evaluators in its medical arm, Promesa Health, along with disability management coaches who engage injured workers in one-onone telephone sessions to introduce them to self-care techniques. Promesa Health

“[We have] cultivated a culture that is laserfocused on closing claims” also includes a full pharmacy and a medical networks team aimed at matching injured workers with the best doctors and specialists. The company also maintains its own special investigations unit, Chan says, which includes a panel of investigators, in-house field personnel, a fraud coordinator and online investigators. In addition, Applied’s panel of defense attorneys, line resolution team and subrogation recovery unit work to assure maximized recovery on claims. “The combination of all of these groups under one roof provides unmatched communication, collaboration and integration,” Chan says. “This, in turn, allows for the seamless execution of common goals without competing interests.”

Q&A

Craig Bruno Vice president of partnerships TRAKPAY

Years in the industry 14 Fast fact Bruno began his career in the pay-as-you-go workers’ compensation field and has worked his way up at TrakPay, where he currently manages partnerships with insurance carriers and payroll services

Cash flow management made easy Pay-as-you-go billing has clear benefits for policyholders, but what does it do for insurance carriers and brokers? Workers’ compensation insurance carriers can guarantee themselves a steady flow of premium based on actual payroll with pay-as-you-go workers’ compensation billing. If you’re an insurance carrier that only offers estimated billing and then an adjustment needs to be done at audit, you could be left on the hook for premium due if your insured goes out of business. With paygo WC, you at least can guarantee that most premium is calculated and collected on a real-time basis. This also benefits insurance brokers, as they won’t be subject to a big chargeback of commission. Overall, paygo WC helps insurance carriers and brokers alike by providing their insured policyholder with a cash flow management tool and ease of audit service.

What sets your platform apart from other paygo WC billing software? TrakPay is an incredibly robust system that connects a large number of payroll services with insurance carriers to process paygo WC, but what separates TrakPay is the sheer number of features, customization, intuitiveness, accuracy and overall user experience. One of the big problems that other vendors face is the ability to accurately assign WC class codes to employees when they are not assigned by the policyholder. Payroll data flows from the policyholder’s payroll software into TrakPay, and if there is no class code assigned to a new employee – and more than one class code exists on the policy for the employee’s state – then what class code should be used? Some vendors just don’t include the employee’s payroll if there is no code, while others assign the higher-rated code. TrakPay solves this problem by intuitively suggesting class codes that should be used, or, if a new class code needs to be added, a dynamic endorsement request can be sent right to the insurance carrier so the policy will have the new code ready for the next pay period.

Many states are considering changes to presumptions in workers’ compensation law for COVID-19. How will this affect pay-as-you-go billing? This change in claims review doesn’t affect the pay-as-you-go billing model at all. From a broad standpoint, insurance carriers need to ensure they are not paying for claims that are not warranted. Because of the volume of claims that have resulted from COVID-19, it wouldn’t surprise me if legislation came down to better define the application of these checks and balances in relation to covering claims.

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UPFRONT

TECHNOLOGY UPDATE

Do insurtechs have the edge? One CEO argues that insurtechs’ grasp on technology enables them to compete with much larger carriers

“Insurtechs are not restrained by this and are able to perform more efficiently while providing a better user experience. This is the real threat to large carriers – knowing that an insurtech can launch a product faster and provide a simple consumer experience without the overwhelming maintenance.” ClarionDoor recently partnered with another insurtech startup, Branch Financial, which was looking to simplify the consumer experience so customers could get a bundled home and auto insurance quote by simply putting in their name and address.

“The major threat posed by insurtechs is that they are approaching insurance with a frictionless attitude” Insurtechs have always been depicted as the smaller players in the insurance industry, but Michael DeGusta, CEO of insurtech ClarionDoor, believes they have a crucial edge over the major players: the freedom to explore innovative possibilities. “The major threat posed by insurtechs is that they are approaching insurance with a frictionless attitude,” he says. “They are not restricted by decades of antiquated processes or systems and thus are able to leverage modern technology to solve industry problems.”

NEWS BRIEFS

He explains that while large carriers are stuck trying to update systems, insurtechs are free to push the boundaries of innovation. “When you think of the traditional larger insurance carriers, the mental image is one of slow and stodgy, of a company or organization moving at a truly glacial pace,” he says. “Regardless of large carriers’ attempts to ‘look’ modern, behind the scenes they are retrofitting and patching systems that have been so customized that they require a monumental effort to maintain.

LexisNexis launches real-time telematics tool

LexisNexis has rolled out LexisNexis Telematics OnDemand, a tool that integrates telematics data into insurers’ rating and underwriting workflows. The tool enables US auto insurers to access a customer’s existing telematics data at the point of quote to more accurately determine the customer’s driving patterns and offer personalized pricing. According to LexisNexis Risk Solutions VP Adam Hudson, the tool “shifts the paradigm for usagebased insurance” by allowing insurers to accurately price risk earlier in the process.

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“This is exactly the type of industry innovation we love because to make that work, you need modern technology,” DeGusta says. “You need an API-first architecture that can support seamless integration with external data sources. You need a lightning-fast rating engine that can process requests in milliseconds. You need a system that is flexible and that enables you to adapt as market conditions change. And that is exactly what we provided Branch – an innovative, breakthrough cloud platform that has enabled Branch to boost their efficiency and react quickly to market conditions while maintaining compliance and accuracy.”

Milliman releases new version of analytics solution

Global consulting and actuarial firm Milliman has released a new version of its Arius reserve analysis solution for P&C insurers. The update adds new generalized linear modeling (GLM) capabilities that allow actuaries to better model and understand claim costs. This is especially useful when analyzing periods of inflationary pressure on the claims process or significant changes in claims handling within a company or throughout the industry, Milliman said. The new version also includes additions to reporting and data management tools.

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Q&A

Michael Lebor Global head of digital innovation AMTRUST FINANCIAL SERVICES

Years in the tech industry 24 Fast fact Lebor began his digital career in 1996, when he acquired the domain name Flower.com and became one of the first people ever to pay for a keyword

Quoting and binding in an instant Why is instant quoting a vital tool in the workers’ compensation process? From day one, the cornerstone of AmTrust’s digital strategy has been to be the easiest carrier to work with. The instant quote speaks to that philosophy. On the micro-policy agent workflow, the submitting independent agent or wholesaler does not need to re-key the data. For 275-plus class codes, they don’t even need to talk to an underwriter. We are seeing a material increase in submission flow due to the amazing agent experience and ease of use, which has been the value proposition of our digital APIs. We partnered AmTrust’s innovative and market-leading digital API with Appulate’s advanced technology so that agents and brokers can obtain an instant quote.

While real-time quoting and binding has been popular in the P&C space, the workers’ comp segment doesn’t seem as receptive. What are the challenges in convincing workers’ comp carriers to make the change? While we cannot speak to why other workers’ comp carriers have not adopted real-time quoting, it is a strategy that AmTrust has embraced for quite a long time. That approach has allowed us to establish a first mover advantage. As a result, we are seeing a significant demand for access to our product from all types of distribution sources to digitally integrate and offer our workers’

Swiss Re names CEO for digital insurance platform

Reinsurance giant Swiss Re has appointed a new leader for iptiQ, its white-labeling digital insurance platform. Beginning October 1, Carlo Bewersdorf will take on the newly created role of CEO of iptiQ. His arrival comes on the heels of Swiss Re’s disbandment of its life capital business unit and the establishment of iptiQ as a stand-alone division. Based in Munich, Bewersdorf will lead Swiss Re’s efforts to develop a business model and forge strong partnerships to sell insurance through trusted brands.

compensation product to their customers. Perhaps some carriers subscribe to the ‘if it ain’t broke’ mindset, but that’s not how we think at AmTrust.

Does the future of instant quoting and binding lie exclusively with the insurtechs that supply carriers with digital solutions, or do you foresee carriers eventually making their own in-house quoting platforms? To be candid, I see it is as ‘all of the above.’ I think that every type of business, be it the independent agent, wholesaler, MGA, carrier, middleware, etc., will have to participate in some form of quoting platform integration. Some will be third parties; some will build their own.

What are some other common pain points in the workers’ compensation process that technology can help with? Technology is a tool. When used properly, as demonstrated in our partnership with Appulate, it can bring tremendous value. This modern workflow increases the speed that agents working with AmTrust can provide a rate or quote to a current or potential client. Appulate simplifies and streamlines the process, as agents no longer need to email submissions to an underwriter or enter them manually into AmTrust’s agent portal. It is no different in the P&C space.

Sapiens snaps up medical-focused software provider

Sapiens International has acquired Delphi Technologies, which provides software for P&C carriers with a focus on the medical professional liability (MPL) and healthcare professional liability (HCPL) markets. Delphi, founded in 1989 and headquartered in Boston, offers products that include policy administration, claims management, and financial and risk management. “The Delphi acquisition expands Sapiens’ presence in the MPL market and improves our prospects in this key region,” said Sapiens head Roni Al-Dor.

TypTap Insurance eyes nationwide expansion

Florida-based insurtech TypTap has announced plans to expand nationwide. The company, which provides homeowner’s and flood insurance, uses proprietary algorithms to produce customized quotes. It also maintains its own geographical database to aid in pre-underwriting properties. Founded in 2016, TypTap has seen rapid growth in its Florida operations. Since the beginning of last year, its premiums in force for homeowner’s insurance have increased by 2,202%, recently surpassing $75 million.

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UPFRONT

OPINION

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

The season of transformation Early 2020 will likely be remembered as the moment when the digital scales tipped for the insurance industry, writes Sasha Korol RECENT SHIFTS in the workforce and technologies have enabled a rethinking of the claims process. Recently, I was fortunate to participate in a discussion with Karen Furtado, an analyst at Strategy Meets Action, and Alex Williams, vice president of technology product management at ESIS, on how people, process and technology are transforming claims. According to Furtado, despite unforeseen circumstances, research shows insurers are rallying to position themselves to be digital, centered on the need to improve customer experience and facilitate digitally enhanced interactions. However, as Furtado explained, it took many in the industry until March to comprehend what this truly meant. SMA Market Pulse research shows that P&C insurers are largely staying the course on technology plans and investments for 2020. Furthermore, 28% of personal lines insurers aren’t just sticking to digital transformation plans, they’re fast-tracking them. As in many other industries, we’ve seemed to accelerate digital transformation by years in just months. For insurance, that meant reimagining and reshaping how technology supports the people and processes that make the industry tick. The pandemic has put the need to reach people when and how they want to be reached under a microscope. This pressure was already driving digital developments to the claims process and has only heightened since. Simplifying the customer experience is where a lot of digital efforts are trending. For insurers, this can be accomplished by

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enabling choice. Insurers are continuing to find ways to quickly and efficiently facilitate choice by working closely with solution partners and technology providers to build capabilities and integrate them into claims. Whether it’s means of communication (text, voice, email, chat) or means of submitting information for a claim (images, forms, reports), choice can transform the claims experience – and subsequently offer

the speed and efficiency of processes, organizations will find that the tools they implement will be better suited to their needs. This will result in an infusion of technology that truly empowers people, businesses and the industry for the better. In the midst of this transformation, there is a need to be prepared to navigate the constantly changing and evolving insurance industry. One of the many places insurers have turned to achieve flexibility is migration to the cloud. A strong backbone built on software as a service (SaaS) is what gives insurers the power to incrementally innovate when the time is right, and as the market dictates, without a complete overhaul. It also gives insurers the ability to share the heavy lifting of platform updates, security and app development with vendors and partners whose expertise falls within these areas. What does this mean for technology roadmaps? It allows organizations to remain flexible and modify as needed or dictated, encouraging a culture of constant, incremental evolution. Not only does it offer greater

“We’ve seemed to accelerate digital transformation by years in just months. For insurance, that meant reimagining and shaping how technology supports the people and processes that make the industry tick” insurers a better understanding of individual customer preferences. To be truly transformational, insurers are also rethinking how products get to market, are serviced and are updated. What has resulted is a simplification of portfolios and a rethinking of how technology can facilitate processes. Where can we lean on technology to facilitate straight-through processing? How can we implement machine learning to learn from pictures and capture data at speed? Where can predictive models support humans by suggesting actions on a claim so efforts can be focused on specialized cases? By reorienting thinking on the role and purpose of technology and what it means for

opportunities to scale, but it also better enables shifts or changes when opportunities are presented or demanded. Over time, we’ll reflect on how early 2020 changed the insurance industry. In the near term, the renewed vigor around digital transformation, with a focus on customer experience, simplicity and flexibility, could very well be here to stay. Sasha Korol is the principal product manager for the Duck Creek Claims product. She defines R&D initiatives for Duck Creek Claims and works with industry analysts and technology vendors to bring the latest technology to the P&C claims space.

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PEOPLE

INDUSTRY ICON

IN IT FOR THE LONG HAUL AmWINS CEO Scott Purviance has played a key role in building the wholesaler into a global business that’s poised to stand the test of time

SOME INSURANCE executives don’t pick the industry; the industry picks them. That was the case for Scott Purviance, CEO of AmWINS Group. After graduating from Wake Forest University in North Carolina, Purviance went to work for PricewaterhouseCoopers, where new hires were randomly assigned clients. His first one, UK-based RSA Group, sealed the deal for Purviance’s focus on insurance. “Once you get into insurance company accounting, because it is so unique and specialized, that becomes your client base,” he explains. Purviance later became one of the PwC team members working on RSA’s buyout of its excess & surplus lines operation, RSUI, which is how he was introduced to Steven DeCarlo, who was RSUI’s CFO at the time. The two stayed in touch after DeCarlo left the firm to join RSA in Charlotte, North Carolina. In 1999, they were reunited when Purviance joined DeCarlo at RSA, where he became the VP of finance. Meanwhile, the company that would soon be known as AmWINS was in dire straits. Americana Financial Services had been operating as a dot-com insurance venture since 1998, but it was hemorrhaging money. DeCarlo was named CEO in December

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2000 to help turn things around; just a few months later, Purviance joined him as CFO. Within a year, the company had established itself as a wholesaler, merged with three other insurance businesses and rebranded to American Wholesale Insurance Group. AmWINS has come a long way from those humble beginnings. “When I look back, clearly it was a team effort, and it still is,” says Purviance, who took over as CEO in

AmWINS was able to tell employees that their jobs were safe. “The leap from where we were in 2001 to [this point] I view as the highlight of my career – that we’ve built a business that’s resilient, stable and has a collaborative culture that’s employee-focused,” Purviance says.

All about growth AmWINS’ successful run has been largely due to a few key growth strategies. Premium

“The leap from where we were in 2001 to [this point] I view as the highlight of my career – that we’ve built a business that’s resilient, stable and has a collaborative culture that’s employee-focused” 2018. “In the early days, we were managing cash flow on a daily basis. We were worried about making payroll each month, and Steve and I were deferring bonuses to ensure that we had enough cash to continue operating.” This picture stands in stark contrast to AmWINS today. In March 2020, as COVID-19 was picking up speed in the US,

placements increased from $800 million in 2002 to more than $20 billion in 2019; some of the drivers of that growth have been smart mergers and acquisitions. AmWINS has completed 49 transactions to date, including four in 2019 alone. “Each deal has to first be a cultural fit,” Purviance says, explaining that a strategic

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PROFILE Name: Scott Purviance Title: CEO Company: AmWINS Group Based in: Charlotte, North Carolina Years in the industry: 21 History at AmWINS: Joined in July 2001 as CFO and took on the additional role of COO in April 2012 before becoming CEO in May 2018

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PEOPLE

INDUSTRY ICON

product fit is a close second consideration. This approach to M&A has allowed AmWINS to build a diversified platform with a global reach that offers expertise in property, casualty, group benefits, and specialty insurance products and services. AmWINS’ approach to acquiring talent has also evolved since the company’s early days. At the outset, Purviance says, “we were highly entrepreneurial and hiring anybody we could convince to take a chance on what we were building. Luckily, a lot of those people worked out unbelievably well, but we had plenty of mistakes along the way.” Now, much like with its approach to M&A, AmWINS focuses on cultural fit when hiring

AmWINS is also leveraging data to deliver better solutions to retail clients – and, as a wholesaler placing $20 billion in premium, it has a lot of data to work with. This capability provides brokers with deeper access to the global insurance market, as do AmWINS’ 800-plus relationships with E&S and specialty markets. On the underwriting side, AmWINS is using technology to help protect its carrier partners’ balance sheets. The company has real-time portfolio monitoring capabilities, allowing it to work in lockstep with carriers when managing risks. “Those are things that you just couldn’t do 10 years ago and a lot of people aren’t doing today,” Purviance says,

“Any kind of disruption accelerates creativity in the industry, and I think we’re right in the midst of that” – an important factor for an organization that prides itself on collaboration between its many teams. In recent years, the company has also pivoted to hiring new graduates and training them in insurance. “They grow up inside AmWINS and inside our culture,” Purviance says.

Driving change Like most companies, AmWINS has not been immune to the impact of the COVID-19 pandemic. This unprecedented event has forced distributors to come up with creative solutions to a new problem. “We’ve hired an individual recently where all he focuses on is parametric products,” Purviance says, noting that the current environment has caused a spike in interest for such solutions. “Any kind of disruption accelerates creativity in the industry, and I think we’re right in the midst of that,” he says.

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adding that this has allowed AmWINS to grow its delegated authority business substantially over the last five years. Amid all of these offerings and more, Purviance believes what truly differentiates AmWINS is its capital structure. “We’re very unique in that 42% of the firm is owned by over 850 employees,” he explains. As part of its strategy to build a business that will be around for the long haul, AmWINS also handpicked two institutional partners in 2015 and 2016: PSP Investments and Dragoneer Investment Group, both of which have longer-term views on investing. Due to this structure, “we don’t worry about the next 90 days, like a public company,” Purviance says. “We worry about the next five years and are we doing the right things today to build this business? That is unique in our industry and provides us with an incredible competitive advantage.”

AMWINS BY THE NUMBERS

118 Number of AmWINS Group locations globally

5,400+ Number of AmWINS employees

42% Percentage of the company owned by employee shareholders

23,000+ Number of retail agencies AmWINS has relationships with

$20 billion Annual premium placements handled by AmWINS in 2019

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Customer Service Is Our Specialty “Everything we do is built around servicing our customer base – most of which take substantial risk with us. We don’t have to be all things to all people. We can be laser-focused on that one type of buyer and that has allowed us to create some meaningful coverage enhancements in addition to value-added services in risk control and claims management.”

– Tom Grove, Chief Business Development Officer

Tom Grove with members of Risk Services & Claims

Proceed with Safety® Workers’ Compensation: Excess • Large Deductible • Large Guaranteed Cost • Defense Base Act • TEXcess® Commercial Auto • Commercial General Liability • Umbrella / Excess Liability • Public Entity Liability • Cyber Risk Loss Portfolio Transfers • Self-Insurance Bonds

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SPECIAL REPORT

LEADING THE CHANGE

LEADING THE CHANGE In the face of persistent discrimination, underrepresentation, bias, racial injustice and inequality, these individuals are working to ensure that the doors at all levels of the insurance industry are opened wide for people of all races, ethnicities, genders, nationalities, orientations and ages

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28/08/2020 4:08:59 am


LEADERS OF CHANGE INDEX

DIVERSITY. INCLUSION. Equal opportunity. These words and phrases are nothing new in the conversations surrounding hiring practices across all industries. But without action, that’s all they are: Words. Ideas. Good intentions. And that’s not enough. In 2019, the Bureau of Labor Statistics revealed that of the 2.8 million people working in the insurance industry, just 12% identified as Black or African American, 11% as Latinx and 6% as Asian. While those numbers reflect the overall demographics of the United States (except for Latinx, which represented 18.5% of the population in 2019, according to the US Census Bureau), they belie the striking disparity that exists in highlevel positions. Data collected by the US Equal Employment Opportunity Commission (EEOC) in 2015 from private-sector firms with 100 or more employees (or 50 or more for federal contractors) found the following demographic breakdown in executive-level positions across all industries: 2% Black men, 1.3% Black women, 3.8% Latino men, 1.5% Latina women, 3.5% Asian men and 1% Asian women. Together, that’s a mere 13.1% non-whites in the highest-ranking positions. To remedy this discrepancy at all levels of the insurance industry, the individuals featured on the following pages are not just seeking to break down the racial barriers that have been in place for generations – they’re fighting to rewrite the rules. From industry newcomers to those with decades-long careers, these men and women were all nominated by their industry peers and selected by an independent advisory panel of industry insiders, who assessed each candidate’s achievements and contributions within their companies, as members and leaders of diversity-focused organizations, as mentors, and in their communities. Two of the featured individuals – Omari Jahi Aarons and Susan Johnson – served on the judging panel and were also selected by their fellow judges (panelists were prohibited from voting for themselves) to be recognized among the men and women leading the change. In times of uncertainty and turmoil, as so much of 2020 has been thus far, change can feel far away and impossible. However, it’s also in times of crisis that change can take hold and establish itself as a permanent fixture. That’s the kind of change the men and women featured on the following pages have dedicated their lives to sowing, nurturing and watching flourish for generations to come.

NAME

COMPANY

PAGE

Omari Jahi Aarons

Liberty Mutual Insurance

36

Machelle Allums

Seneca Insurance Company

34

Jeffrey T. Benson Jr.

Prominent Insurance Agency

34

Michael Blackshear

Ryan Specialty Group

40

Quincy Branch

Branch Benefits Consultants

26

Denise Campbell

AIG

42

Lael Chappell

Attune

33

Nikel Cleaves

Aon

45

Renée Collins

Travelers

28

Marc Cunningham

Crawford & Company

38

Kevin Davis

Kevin Davis Insurance Services, a Worldwide Facilities company

31

Ericka DeBruce

Sedgwick

43

Janelle Edem

Liberty Mutual Insurance

39

Tiffany Y. Fann

IFG Companies

32

Dwight Geddes

Metro Claims & Risk Mgmt

44

Enya He

Lloyd's of London

34

Sha’Ron James

Berger Singerman

38

Brent Jenkins

CRC Group

43

Rodney Johnson

Gallagher

40

Susan Johnson

The Hartford

30

Bennie Jones

Risk Management Solutions of America

35

Sherita Hardy

AmWINS Brokerage of Texas

30

Michael A. Mares

Security Service Insurance

41

Lavezz Middleton

CNA Insurance

42

Ngozi Nnaji

Ako Brokerage Services/ Ako Insurance Consulting

35

Leroy D. Nunery II

PlusUltré

36

Rebekah Ratliff

Capital City Mediations

28

Errica Rivera

State Auto Insurance Companies

32

Abel Travis

AF Group

28

Ayesha West

Everest Insurance

41

George Woods

GC Genesis

31

Monique Young

True Benefit, an AmWINS company

26

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SPECIAL REPORT

LEADING THE CHANGE

PANEL OF JUDGES

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NIDHI VERMA

MARGARET N. REDD

SARAH LIN

Vice president of learning, talent, inclusion and diversity

Executive director

President of casualty, San Francisco RT SPECIALTY

CRAWFORD & COMPANY

NATIONAL AFRICAN AMERICAN INSURANCE ASSOCIATION

Years in the industry: 10+

Years in the industry: 43

Nidhi Verma leads Crawford & Company’s diversity and inclusion office and is a steering committee member for the company’s RISE – Elevating Diversity and ZEAL – Women and Allies employee resource groups. “The insurance industry inspires me for multiple reasons,” Verma says. “First, insurance careers are sustainable with a rich history and a promising future. Second, change is a constant in the industry. [This] fuels exciting and endless opportunities for growth, innovation and transformation. Finally, insurance touches the lives of people in their most vulnerable moments.” Verma says it’s imperative for companies to move from positive intentions to action on diversity and inclusion. “Our industry is on the precipice of change in terms of racial equality, but the journey in the pursuit of a truly equitable enterprise is long and hard,” she says. “We can begin to leverage each other’s differences as a catalyst for change by educating ourselves about our differences, leaning into empathy and encouragement for others’ perspectives, and enabling actions that promote inclusion and equity.”

Twenty-one years ago, Margaret Redd was approached to help form the first chapter of the National African American Insurance Association (NAAIA). Over the years, her involvement has included serving as vice president and president of NAAIA Chicago and a national board member. She is currently the executive director of NAAIA’s national board. “I am very passionate about promoting racial equality as a business imperative and working with others to bring a business mindset and discipline into our efforts,” Redd says. “Real change means that African Americans’ representation in the industry will more closely resemble the country’s demographics. It will also mean that, through our work, the insurance industry will become readily recognized as an attractive career choice. Last but not least, it means that African Americans will be appropriately recognized and rewarded for their talent, performance, and contributions, [and] the related data will support the fact that our work has served to mitigate the issue of racial inequity.”

Years in the industry: 16

As RT Specialty’s president of casualty in San Francisco, Sarah Lin actively seeks out opportunities to increase diversity and inclusion in the industry, including participating in the D&I Council formed by RT Specialty’s parent company, Ryan Specialty Group. “We need to create diversity first in order to attract more diverse people,” Lin says. “Recruiting in insurance is predominantly based on who you know ... We need outreach programs and/or hiring goals for people of color to create change.” Lin adds that expanding diversity in the industry will also require increasing awareness at the highest levels. “Business leaders need to know that diversity yields better business results because it incorporates a more varied approach to processes, generating ideas that may have never been sourced by a more homogeneous group of people,” she says. “As awareness increases internally, we then need to reach out to people of color through events and marketing aimed at their social/professional gatherings. We need to let them know and feel welcome as part of the hiring process.”

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REKHA SKANTHARAJA

MEGAN STEWART HODGE

CEO

Founder

TANGRAM INSURANCE SERVICES

CULTIVER

Years in the industry: 19

Years in the industry: 20

Part of the insurance industry since she was 22, Rekha Skantharaja says the opportunities to learn, serve, innovate, solve problems, build teams and break barriers motivated her from the start. She has been speaking on the topic of diversity and inclusion for several years. In 2019, she chaired IBA’s Women in Insurance conference, which tackled issues of gender and race, and she recently spoke on the Urgency of Diversity panel at IBA’s virtual Women in Insurance Boston conference. Skantharaja is also a member of the Young Presidents Organization, a worldwide network of thousands of CEOs seeking personal and professional development, and a board member of the Luther Burbank Center of the Arts, which reaches 40,000 minority and underserved kids in the Bay Area each year. Currently, Skantharaja is in the early stages of founding a company that will give women of color a platform for personal and professional growth while also providing companies with access to top talent to expand diversity in their leadership ranks. “As a woman of color, I am one of the few to breathe the rarefied air of senior leadership in this industry,” Skantharaja says. “I need women, but especially people of color, to know that it’s not because I am extraordinary. It is possible if one perseveres with talent, effort, courage and boldness. And it’s my responsibility to pull up others while dismantling the system and creating something that works for all.”

Throughout her career, Megan Stewart Hodge has participated in a number of industry D&I events and forums. She is a co-host for the upcoming 2020 IICF Midwest Women in Insurance Regional Forum, as well as a co-lead for Chicago’s 2020 Dive In Festival. In January 2020, she launched the advisory, coaching and advocacy practice Cultiver to counter the anemic diversity within the industry. Hodge is committed to being a driver of change in advancing diversity and fostering the underlying cultures of inclusion integral to developing diverse talent pipelines and teams. “While we are starting to make small strides in breaking down the barriers to entry for people of color in the industry, it is the retention – the development, promotion and inclusion – that remains the greatest barrier to people of color advancing through the talent pipeline in the insurance industry,” she says. “We are all mutually accountable for our individual and collective intentions and actions to successfully include and advance people of color throughout the insurance industry’s talent pipeline.”

DAVE NORTH President and CEO SEDGWICK Years in the industry: 40

SUSAN JOHNSON Chief diversity and inclusion officer THE HARTFORD See full profile on p. 30

As Sedgwick’s president and CEO, Dave North considers himself “responsible for ensuring the company’s commitment to diversity and inclusion as an extension of our core values. Embedding D&I into our organizational culture is not only the right thing to do, it’s also critical to the success and sustainability of our business.” North’s efforts have led Sedgwick to sponsor of the Dinner and Dialogue series through Art Village Gallery, which facilitates conversations between community leaders to illuminate matters of common concern and bring understanding of ideas causing divergence. North also supports the National Civil Rights Museum Annual Freedom Award. Outside of Sedgwick, North is involved in a variety of initiatives to increase racial equality and inclusion at the University of Memphis as chair of its board of trustees. His efforts there include the UofM Finish Line Program, which helps students facing external circumstances such as exhausted financial aid to obtain their degree, and the UofM River City Partnership, which prepares local future educators to practice and promote social justice, equity, and inclusion.

OMARI JAHI AARONS Employee enablement strategy leader LIBERTY MUTUAL INSURANCE See full profile on p. 36

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SPECIAL REPORT

LEADING THE CHANGE

O

LEADERS OF CHANGE QUINCY BRANCH

MONIQUE YOUNG

President and CEO

Vice president of client success

BRANCH BENEFITS CONSULTANTS Years in the industry: 20

TRUE BENEFIT, AN AMWINS COMPANY Years in the industry: 12

Following in the footsteps of his father, who has been in the insurance industry for almost 40 years, Quincy Branch got his start in the business by helping at his dad’s office. Eventually he obtained his P&C and life and health licenses and has taken an active role in the industry ever since. Branch is a member of the National African American Insurance Association (NAAIA) and has been on the diversity task force for the Independent Insurance Agents & Brokers of America (IIABA) for more than a decade. While serving as chair of NAAIA in 2016, he worked closely with Marsh to publish a study entitled “The Journey of African American Insurance Professionals.” The study, which delved deep into challenges faced by African American insurance professionals in the workplace, was the first of its kind in the industry.

“I’ve been blessed to enter into an industry that has been very good to me. I feel a sense of responsibility to ensure that the crack I went through is open a little wider for the next person” “I firmly believe in volunteer leadership because I believe in having a voice and having a seat at the table, but also having a say in what’s on the menu,” Branch says. “I’ve been blessed to enter into an industry that has been very good to me. I feel a sense of responsibility to ensure that the crack I went through is open a little wider for the next person and that I share with others that the door is open. We have to continue to recruit with purpose and to show incoming talent that there is opportunity for them to rise up the corporate ladder – that there is not a hard ceiling for them. We need to see more qualified leaders of color across all lines and companies.”

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Monique Young joined the insurance industry in 2008 and has dedicated her career to pursuing her passion for helping others. She serves as a committee member for the Dive In Festival and is also a member of True Benefit’s newly formed Diversity & Inclusion Council. The pillars of the D&I Council include achieving an inclusive workplace, fostering career development and advancement, partnering with associations, and ensuring diversity within recruiting. Following the killing of George Floyd in May, however, the council shifted its efforts. Young and her fellow African American council

“Whether it’s my gender, ethnicity and/or educational background, I’m usually not in the majority. The effort it takes to overcome this daily can be overwhelming” members formed a subgroup and spent a week moderating daily one-hour roundtable discussions. The first four days, the group spoke exclusively with African American employees, inviting an executive to sit in on each session. On the last day, the group held a company-wide roundtable that was attended by more than 700 employees. Young is currently enrolled in eCornell’s Diversity and Inclusion Certificate course and also serves as a board member and mentor for GirlsLead, a nonprofit that provides leadership development and educational and financial resources to high-school girls. “I’m generally one of the ‘only’ in a room,” Young says. “Whether it’s my gender, ethnicity and/or educational background, I’m usually not in the majority. The effort it takes to overcome this daily can be overwhelming. If I in any way can mitigate that for others while adding other powerful, intelligent leaders who look like me to that room, well, I consider that to be part of my responsibility, and I’m happy to do it.”

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28/08/2020 4:09:19 am


SPECIAL REPORT

LEADING THE CHANGE ABEL TRAVIS

REBEKAH RATLIFF

Vice president of fundamental underwriters

President

AF GROUP

CAPITAL CITY MEDIATIONS

Years in the industry: 16

Years in the industry: 30

When Abel Travis entered the insurance industry after graduating from university, he immediately recognized its lack of diversity. It’s been his goal ever since to lead an insurance organization and demonstrate how having a diverse staff and leadership can drive better results, both within a company and for the industry as a whole. At AF Group, Travis serves as the executive sponsor of the Diversity Action Committee, driving the message of D&I across the enterprise. Outside of his company, he regularly speaks on D&I via such platforms as NAAIA and IBA’s Women in Insurance conference, discussing topics such as the talent gap for people of color and how to foster gender and racial equity in the industry. Travis is also a board member of RISE (Rising Insurance Star Executives), where he participates on the D&I subcommittee, and of Lansing Promise, whose mission is to ensure that every student in Lansing, Michigan, has access to education and career training beyond high school. Travis also uses his podcast, The Insurance Innovators Unscripted, as a platform to elevate diverse voices within insurance across all genders, races and backgrounds. “I’m most proud of being a mentor to people of color, helping them understand what it takes to excel and become a leader in insurance,” Travis says. “I have an obligation as a Black executive to leave a legacy that helps people of color use their talents to elevate within the industry, but also to open doors for those talented individuals seeking to advance within their organizations and the mission of insurance.”

RENÉE COLLINS Regional director TRAVELERS Years in the industry: 29

After nearly three decades in the insurance industry, Renée Collins continues to dedicate her time to several organizations. She serves as vice chair of the Georgia Diversity Council, sits on IIABA’s Diversity Council and is involved with the Women of Color Empowerment Institute, NAAIA, the Atlanta Association of Insurance Professionals and the Dive In Festival. “My roles with the Georgia Diversity Council and the IIABA Diversity Council give me the opportunity to work with and for individuals both inside and outside the insurance industry,” Collins says. “As a minority woman who has had many opportunities for success, I give back as often as I can and use my platform to be inclusive at all levels.”

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Describing herself as “a change agent and a disrupter,” Rebekah Ratliff, president of Capital City Mediations and president of NAAIA’s Atlanta chapter, says, “I recognize the need for honest conversations, and I am not afraid to facilitate such conversations. I want to see talented brown professionals have the same opportunities to showcase their skill sets and make contributions towards the betterment of our industry.” To further that goal, Ratliff founded the HBCU I.M.P.A.C.T. program, a college tour initiative designed to attract, educate and employ students of color for career opportunities in the insurance and risk management industry, as well as supporting industries. Ratliff also serves as co-chair of the diversity committee for the Dispute Resolution Section of the American Bar Association and sits on the RM Foundation advisory board at Georgia State University and on the board of visitors for the North Carolina Central University School of Business. “I believe it is important to sow into the next generation of insurance professionals and prepare them for success,” Ratliff says. “I act as a resource for inclusion initiatives to ensure that people of color are not only considered for opportunities, but are chosen to play in roles that enhance the landscape of the organization. Only by engaging professionals who embody diversity of race, gender, age, thought, skill sets and culture can we gain perspectives that bring value to our industry and beyond. I want to see our industry evolve to demonstrate, by talent, the diversity of the world we serve.”

Collins highlights lack of exposure as a major barrier both to entry and promotion in the industry, adding that breaking this and many other barriers will require difficult conversations.

“I strongly believe there are more supporters in the insurance industry for people of color than we have realized” “People of color must be open, honest and unapologetic about who we are and allow others to understand what brings pain and feelings of not being accepted,” she says. “While it can be hard to speak up, I strongly believe there are more supporters in the insurance industry for people of color than we have realized. We need those supporters to use their positions to better our community of insurance professionals.”

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28/08/2020 4:09:23 am


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28/08/2020 4:09:28 am


SPECIAL REPORT

LEADING THE CHANGE SHERITA HARDY Assistant vice president AMWINS BROKERAGE OF TEXAS Years in the industry: 24

Sherita Hardy says she knew from the beginning that she had the potential to create a great career in the insurance industry. She began as a receptionist at an insurance agency and worked her way up to account manager. Today, Hardy serves on AmWINS’ D&I Council, is co-chair of the Dallas-Fort Worth chapter of NAAIA and volunteers with Dive In Festival. Within each of these spaces, she focuses on recruiting efforts. “With Dive In, I’m on the committee that focuses on engaging the future, which is working to pull diverse candidates from the upcoming generation,” Hardy says. “At NAAIA, we work to bring in new members in hopes of creating a great network, and we help with our community and help with our youth by offering scholarships for higher education in the insurance industry. I’ve always been passionate about helping

“Being a woman of color, I have had to work twice as hard to get to where I am. My hope is that the next woman of color is given the same opportunity as her white male counterpart” those who are less fortunate, as well as people of color. Being a woman of color, I have had to work twice as hard to get to where I am. My hope is that the next woman of color is given the same opportunity as her white male counterpart.” Hardy identifies unconscious bias as a major hurdle for diversity in the workplace. “When opportunities come up, most people hiring give people who look like them the opportunity, even if a person of color has more qualifications for the position,” she says. “It’s time to start making a conscious effort to diversify your organization. Companies need to hold themselves accountable and make a serious effort to increase their percentage of people of color in leadership roles.”

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SUSAN JOHNSON Chief diversity and inclusion officer THE HARTFORD Years in the industry: 7

Susan Johnson joined The Hartford specifically to lead the company’s diversity and inclusion work. “The Hartford has a strong culture and a CEO and CHRO who supported D&I and saw the value and need to align it with the business model, which had just gone through a lot of transformation,” she says. Johnson came to the role with a significant amount of experience in D&I, and she continues to be very active in the area throughout the industry. She is on the national board of directors for NAAIA, serving as both board secretary and program chair; has been on the planning committee for the IICF’s Women in Insurance Conference for more than five years; sits on IIABA’s Diversity Council, helping drive D&I initiatives within the independent agent environment; was one of the initiators of the RIMS Talent Management Study released in 2019; and serves as The Hartford’s representative to Gamma Iota Sigma for its GammaSAID diversity initiative. “I care about the success and expansion of Black/African Americans in the insurance industry,” Johnson says. “Through the recent months of social unrest and calls for greater racial equity, my commitment has accelerated. Some of the barriers people of color face to growth and promotion in the industry include developing authentic relationships with people who can sponsor them; having to work extra hard to get developmental, complex assignments to help them grow; and not always being keyed into the unwritten rules to success. Remedying this will require industry-wide effort to promote insurance careers to people of color, as well as highlighting successful people of color and really telling their stories in compelling and interesting ways.”

www.ibamag.com

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KEVIN DAVIS Founder KEVIN DAVIS INSURANCE SERVICES, A WORLDWIDE FACILITIES COMPANY Years in the industry: 42

Kevin Davis began his insurance career in 1978, and he says there are two barriers to entry into the industry for people of color that were true then and are still true today: white privilege and systemic racism. That’s why, when he started his own company, Kevin Davis Insurance Services, in 2000, his goal was to create a business with diversity and inclusion at its core. Today, 70% of his staff, including management, is made up of women and minorities. As the first African American to serve on the board of directors of the Council of Insurance Agents & Brokers, Davis often collaborates on workshops and seminars dealing with issues like unconscious bias, cultural sensitivity, and attracting and retaining diverse talent. He is also a member of NAAIA and is currently collaborating with Worldwide Facilities to create a D&I mission statement, establish goals, develop employee resource groups and conduct D&I training.

“I believe most companies have made a commitment to be open and curious about race, and even have some difficult conversations, but when it comes to taking the next step, things fall apart” In 2015, Davis and his wife started The Kevin Davis Foundation to provide residents of Camden, New Jersey, and the surrounding area with scholarships for continued education. He also serves on the board of directors for the Camden Dream Center. “I believe the biggest challenge today when it comes to achieving racial equality is the unwillingness to lead,” Davis says. “I believe most companies have made a commitment to be open and curious about race, and even have some difficult conversations, but when it comes to taking the next step, things fall apart. My intent is to bring my unique perspective to those who are open and curious to the challenges faced by people of color and willing to make a difference.”

GEORGE WOODS Senior vice president, global strategic advisory GC GENESIS Years in the industry: 30

An innovative leader in his field for three decades, George Woods admits he wasn’t too inspired when he first entered the insurance industry. “But as I continued to gain knowledge and experience, I realized that I made a great career choice,” he says. The fact that people of color know very little about the opportunities available in insurance is a problem, Woods says. “They do not see it as a career choice. We need to educate people about the insurance industry as early as junior high school. The industry should strive to recruit from a pool of diverse candidates at all levels of an organization. Companies should make sure that employees clearly understand what experiences and education they need in order to ascend the corporate ladder.” To help build awareness, Woods sits on NAAIA’s executive board and chairs its chapter development committee. He has also worked with the leaders of the Latin American Association of Insurance Agencies to help expand its footprint. In addition, he co-leads the Guy Carpenter EMBRACE Ethnic and Cultural Council employee resource group and serves as an advisor to the Water Street Club. “These groups give me an opportunity to raise awareness of insurance to the younger generation and to create programs that can provide knowledge about the insurance industry,” Woods says. “I have seen some small improvements in racial equality compared to when I first entered the industry, but we still have a long way to go. I look forward to the day when all people and genders will be judged by their accomplishments and the content of their character and there will be no glass ceiling.”

www.ibamag.com

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SPECIAL REPORT

LEADING THE CHANGE

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TIFFANY Y. FANN

ERRICA RIVERA

Senior vice president – excess casualty

Culture and inclusion lead

IFG COMPANIES

STATE AUTO INSURANCE COMPANIES

Years in the industry: 21

Years in the industry: 22

Tiffany Fann has always advocated for workplaces that are inclusive of all religions, sexual orientations, ethnicities and races. So when IFG Companies named diversity and inclusion as a top priority for the company, she jumped at the chance to get involved. “I knew this was my opportunity to work with a team of people to create systemic change within the organization and ultimately within the industry,” she says. As a committee member of the company’s Diversity & Inclusion Council, Fann looks at the big picture. “As an industry, we have a long way to go in terms of creating racial equality, including but not limited to fairness in opportunity, performance and compensation,” she says.

As the culture and inclusion lead at State Auto Insurance Companies, Errica Rivera spearheads the development of the company’s culture strategy and the implementation of engaging D&I initiatives. She has a passion for promoting diversity and inclusion in the workplace and helping develop future business leaders, and she has participated in and organized various community initiatives designed to target diverse audiences. “Some ask why I stay in an industry where there is such a lack of diversity or lack of obvious intent to change,” Rivera says. “I stay because I truly believe in what is possible and have the courage to be a part of that change wherever possible. The notable progress that

“Every industry professional should be committed to educating themselves and others to remove the barriers that have existed within the insurance industry for far too long”

“Some ask why I stay in an industry where there is such a lack of diversity ... I stay because I truly believe in what is possible and have the courage to be a part of that change”

“Corporate America and the insurance industry have a tremendous opportunity to create an anti-bias culture that mirrors our society’s changing demographics. I genuinely believe that companies that can diversify and create an inclusive culture will achieve a competitive advantage over those that are unwilling or delayed in their efforts.” Achieving that competitive edge, Fann adds, will require recruiting people of color, creating a more inclusive corporate image and prioritizing education for employees at every level. “We are currently observing all levels of management across various industry disciplines join together in stating that, as an industry, we must be committed to developing a pipeline of high-potential diverse talent,” she says. “Every industry professional should be committed to educating themselves and others to remove the barriers that have existed within the insurance industry for far too long. Twenty-one years into my career as an insurance professional, I am more optimistic about the industry’s future than ever before.”

I’ve experienced over the years was accomplished with much-needed laser-focused effort, reliable allies and the constant probe of fearless leaders consistently asking themselves ‘What can I do next?’ Spoiler alert: This work is not easy and will be frustrating but extremely rewarding. Look for opportunities to lean in, reach back, push up and press forward.” Currently, Rivera serves on the Insurance Council of Texas Education Foundation board of trustees, the Harding University board of trustees, the University of Texas at Dallas risk management advisory council, and the boards of the Texas Risk and Insurance Professionals Society and the national InVEST Program. She is also a member of the steering committee for the IICF Women in Insurance Forum (Southeast division) and the founder of the Harding University African American Alumni Association. In 2019, Rivera received the Insurance Industry Leader of the Year Award from the NAAIA DallasFort Worth chapter.

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28/08/2020 4:09:41 am


ORDINARY PEOPLE GETTING THE EXTRAORDINARY DONE

LAEL CHAPPELL Broker engagement lead ATTUNE Years in the industry: 15

During his executive education program in risk management, Lael Chappell focused his personal case on the lack of diversity within the insurance industry. He analyzed the root causes of why organizations struggle to build cultures capable of supporting gender and ethnic diversity, and he also explored what steps need to be taken to minimize the impact of conscious and unconscious bias in recruitment and retention. “Despite the numerous studies that have evidenced the positive results diverse teams bring to the bottom line, we still see a lack of action around truly committing, investing and executing on actionable plans that are necessary to establish relationships to bring in diverse talent,” Chappell says. “The majority of the industry fails to embrace professional development opportunities to develop and retain diverse talent, causing many to choose alternative routes or mid-career transitions as their only chances to find individual success in an attempt to break through the generational disparities in hopes of providing a better foundation for our families.”

“The industry needs to hold itself accountable for ensuring that everyone is provided the same access, networks and advancement opportunities”

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To further his D&I efforts, Chappell served as president of NAAIA’s New York chapter from 2012 to 2014 and was a founding member of Attune’s IDEA Council, which drives awareness and education around D&I. “The industry needs to hold itself accountable for ensuring that everyone is provided the same access, networks and advancement opportunities, and particularly focus on the promotion and recruitment of underrepresented talent at the senior and executive leadership level,” Chappell says. “This only happens with an acknowledgment of the glass ceilings that do exist and the establishment of accountability for our organizations, customers and partners throughout the industry.”

www.ibamag.com

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28/08/2020 4:09:46 am


SPECIAL REPORT

LEADING THE CHANGE MACHELLE ALLUMS Director/senior underwriter SENECA INSURANCE COMPANY Years in the industry: 30+

JEFFREY T. BENSON JR. Managing partner PROMINENT INSURANCE AGENCY Years in the industry: 13

Machelle Allums has been in insurance for more than three decades and has dedicated much of that time to striving to make meaningful industry changes regarding diversity and inclusion. Allums is a former national board member and charter member of the Dallas-Fort Worth chapter of NAAIA and currently serves as the chapter’s vice president and educational director. In her role as educational director, Allums coordinates NAAIA’s partnership with the InVEST Program, which provides insurance curriculum for high schools and colleges. She also serves as an advisor to the Academy of Finance at Emmett J. Conrad High School. Together, Allums and her members support the school by providing product knowledge and information about available insurance careers and job skills training, awarding scholarships, and participating in the school’s Executive Lunch program. Allums also serves as her company’s representative on Fairfax Financial Holdings’ internal Black Initiatives Action Committee. “Before we can fix anything, we have to first recognize it’s broken,” Allums says. “It has taken many years, many prayers and, unfortunately, many deaths for us to get here, but I think we are at a time now where meaningful change is possible. I am excited about the process we are going through as a nation and industry. The dialogue and things we are going through are sometimes uncomfortable, and in some instances painful, yet I view them as necessary to foster major reform. Black lives matter. All lives – all nationalities, races, genders, etc. – matter. Now let’s make them all matter equally!”

ENYA HE Regional director, South Central US LLOYD’S OF LONDON Years in the industry: 28

Enya He became an insurance major in college by fate and luck, and today she speaks passionately about how the industry transformed her from a girl growing up in a ghetto of China to living her “American dream.” This conviction not only compelled He to leave a tenured professorship to return to insurance, but it also fuels her active involvement in the industry’s diversity and inclusion efforts. She serves on the divisional board of the IICF, where she’s closely involved with the global Women in Insurance Conference Series. She also sits on the national steering committee for the Women’s Insurance Networking Group and has been an active

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Recruited to the industry by an insurance agent he sold a car to, Jeffrey Benson Jr. currently serves as the managing partner of Prominent Insurance Agency and is involved with several task forces that address racial equality and inclusion in Delaware’s financial services, education, nonprofit and state agency sectors. Together with his business partner, Jason Rodriguez, Benson is constantly working to get more minorities into the industry at all levels. “Insurance is a great industry to have a career in and create wealth, specifically as an independent agent,” Benson says. “I would like to see the industry embrace and be intentional with recruiting in minority communities: African American, Asian, Hispanic, millennial, Gen Y, etc. This will expose these minority groups to the industry, and eventually they will be the mentors to help future mentees navigate and reach their career goals.” Benson puts just as much effort into helping families, businesses and youth in his local community. He has been recognized for his activism with a Jefferson Award, was named to Delaware Business Times’ 40 Under 40 list and was one of Black Enterprise’s 100 Modern Men of Distinction. Additionally, Benson is pursuing a doctorate in business administration at Wilmington University, serves on the Seaford School District Board of Education, sits on the an advisory board of Make-A-Wish Delaware, is a member of the Delaware Vision Coalition Leadership Team and is a Congressional Black Caucus Institute Fellow.

voice in the Dive In Festival. He identifies microaggressions, double standards, unconscious bias, lack of awareness of the opportunities in insurance, and a lack of meaningful mentoring and sponsorship as the main barriers to entry to the industry for people of color. To remedy this, she champions an industry-wide effort to “get the secret out” to colleges and high schools, especially those with a minority focus, and calls for more mentorship programs in conjunction with D&I. “At the senior management level, D&I needs to be a priority in strategic planning and performance review processes, with both initiatives and accountability,” He says. “It’s also important to train to equip line managers with tools to embrace, incorporate and execute corporate D&I strategies.” He believes the industry is at a critical crossroads, given its huge talent gap, but she remains optimistic in the collective strength of the industry. “If we all work together, we can rise to the challenge and make a better future for our children, our industry and our society.”

www.ibamag.com

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NGOZI NNAJI Founder and principal/ founder and managing partner AKO BROKERAGE SERVICES/AKO INSURANCE CONSULTING Years in the industry: 23

“American companies are facing a challenge like they never have before as it relates to hiring talent, particularly diverse talent,” says Ngozi Nnaji, founder of Ako Brokerage Services and Ako Insurance Consulting. Nnaji launched the latter as a solution to this growing problem. Using its resources to identify, place and develop Black talent, Ako Insurance Consulting helps employers create more competitive and intercultural organizations, providing training and professional development services, along with analytical data and strategic consulting. Nnaji’s passion and the legacy she wants to leave also align with the organizations she dedicates her time to. She is president of NAAIA’s Greater Hartford chapter, as well as a board member and agent

“The time for passive commitments to ‘do better’ and figureheads leading empty diversity initiatives is over” engagement committee co-chair for the national organization. In 2019, together with Rebekah Ratliff, Yumeko Motley and Sha’Ron James, she founded HBCU I.M.P.A.C.T., an insurance education and engagement program that brings awareness about career opportunities in the industry to students at historically Black colleges and universities. “In addition to increasing the representation of Blacks in the insurance industry, my involvement in these organizations is based on my desire to increase agency ownership among Blacks, as well close the racial wealth gap that exists within our society,” Nnaji says. “The time for passive commitments to ‘do better’ and figureheads leading empty diversity initiatives is over. The need to be intentional and deliberate about our actions as an industry is immediate. Companies need to focus on their recruiting processes and procedures, and also spend just as much time and effort – if not more – retaining the same talent that they’ve recruited. Recruiting plus retention equals representation.”

BENNIE JONES President and CEO RISK MANAGEMENT SOLUTIONS OF AMERICA Years in the industry: 39

Bennie Jones has been in the insurance industry for almost four decades. Throughout his career, he says he’s noticed that hiring practices present a major barrier to entry into the industry for people of color. “When you look at a new candidate, are you looking only at the skills they have today or where they can go in the company?” he says. “Insurance is a business of relationships, and if you do not see building a relationship because of conscious or unconscious biases, how do you welcome the person of color?” Jones actively works to help bridge the racial gaps apparent in the industry. He serves on the executive committee of the Independent Agents (IIA) of Illinois, chairs the Diversity Council for IIABA, is a member of NAAIA and is active with other committee groups. “My motivation is to be a part of the solution, not just complain about the problem,” he says. One of the goals of IIA of Illinois is to grow its Right Start mentorship program, which pairs minority agencies with larger non-minority ones that can assist with developing needed processes. The same program is being implemented nationally through IIABA. “I have seen a shift in the attitude of leadership in the industry over the past five years,” Jones says. “We are admitting we have a problem. In the past, we put it on the industry at large; now, individuals are taking ownership for their part and acknowledging the existence of privilege. We have gone from just talking about the problem to actionable steps for improvement.”

www.ibamag.com

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28/08/2020 4:09:55 am


SPECIAL REPORT

LEADING THE CHANGE DR. LEROY D. NUNERY II

OMARI JAHI AARONS

Founder and principal

Employee enablement strategy leader

PLUSULTRÉ

LIBERTY MUTUAL INSURANCE Years in the industry: 4

In conjunction with NAAIA, Leroy Nunery II authored “The Journey of African American Insurance Professionals: Past, Present and Future,” a demographic and psychographic study on the career trajectories of African American insurance professionals. Published in 2018, the study has received national acclaim and has become a baseline for discussions with insurance professionals and trade associations on the issues of talent development, diversity, equity and inclusion. “There is clear, indisputable evidence that the insurance industry has a long way to go to become even modestly more diverse, especially from a standpoint of racial equality or equity,” Nunery says. “A review of industry history reveals examples of unequal and unfair

“There is clear, indisputable evidence that the industry has a long way to go to become even modestly more diverse” practices, such as redlining minority neighborhoods in the 20th century and discriminatory underwriting practices that included race and ethnicity in setting premiums.” Nunery has delivered several presentations on the deep history of African Americans in insurance. He is a member of NAAIA, the executive diversity consultant to IIABA, and a senior advisor for diversity, equity and inclusion (DEI) for the Million Women Mentors Women in Insurance Initiative. “There is no ‘one size fits all’ DEI approach,” he says, “and it is critical that senior leadership and key influencers recognize that they must be fully committed to the effort if there’s going to be any success.” Professionally, Nunery’s experiences include serving as acting superintendent and CEO of the School District of Philadelphia, holding various roles in corporate banking and capital markets, and serving as vice president of the National Basketball Association, among many others. In addition to consulting and advising the insurance industry, Nunery is currently undertaking research projects on supplier diversity and the historiographies of African American insurance agents.

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“We have to be honest with ourselves: We have a race problem in this industry when it comes to Black talent,” says Omari Jahi Aarons. “We use the word ‘diverse’ when we mean people of color, or Black, Asian, Indigenous or Latinx. The problem with that is we are all diverse, so when we say we are focused on ‘diversity,’ that means everyone – it doesn’t lend itself to changing our practices to have different, more inclusive outcomes in our hiring practices. Let’s give ourselves permission to name what we are talking about: racial diversity.” In addition to serving as Liberty Mutual’s employee enablement strategy leader, Aarons is the inaugural president of NAAIA’s Boston

“I am deeply frustrated every time I see ‘qualified’ in front of people of color. It’s a silly notion to call it out – no company has a strategy to hire unqualified candidates for any of their roles” chapter, city chair of Dive In Boston and spent three years as the national co-chair of Liberty Mutual’s Employees of African Descent + Allies employee resources group, which has 10 chapters and more than 2,500 members. He continues to serve as a key advisor to Liberty Mutual’s senior leaders on activating D&I plans. “Just like organizational culture has been recognized as a critical driver of a company’s success and viability for future growth, diversity and inclusion is critical to the health and success of our organizations,” Aarons says. “We all must do better. I am deeply frustrated every time I see ‘qualified’ in front of people of color. It’s a silly notion to call it out – no company has a strategy to hire unqualified candidates for any of their roles. More than that, it’s a dangerous and unfair term because it is rooted in racism and reinforces the belief that people of color are inherently unqualified.”

www.ibamag.com

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28/08/2020 4:10:00 am


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SPECIAL REPORT

LEADING THE CHANGE MARC CUNNINGHAM Senior vice president, disability and absence management CRAWFORD & COMPANY Years in the industry: 19

The eldest child of immigrants, Marc Cunningham faced unique challenges and opportunities when choosing a career path, but he ultimately selected the insurance industry for its maturity and stability, as well as its attention to technology and innovation. Over the years, Cunningham says he’s witnessed apathy and indifference toward racial inequity within the industry. “There may be less of the malicious and overt bias tendencies that you find in many other professions, but the lack of recognition and thoughtful action has been just as harmful in many ways,” he says. “The prioritization of diversity and inclusion in recruiting, development and promotion proves that there are great intentions within the industry; however, to achieve the necessary results, we have to be honest about our current shortcomings and explicit in what we want to achieve.”

“There may be less of the malicious and overt bias tendencies [in insurance] that you find in many other professions, but the lack of recognition and thoughtful action has been just as harmful in many ways” Currently, Cunningham’s efforts are focused on RISE – Elevating Diversity, Crawford & Company’s employee resource group for people of color. The group’s purpose is to “activate, engage and connect a racially diverse and multi-ethnic workforce by driving initiatives that maximize the professional development and advancement of RISE.” Cunningham is also an ally within the company’s Women and Allies employee resource group. “It’s been critically important for me to ensure Crawford & Company is representative of the gender, racial, ethnic and cultural diversity that we aspire to find throughout the insurance industry at all professional levels,” he says. “To that end, I take great pride in knowing that our disability and absence division team of leaders and influencers is represented by 75% women and people of color.”

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SHA’RON JAMES Partner, government and regulatory team BERGER SINGERMAN Years in the industry: 12

Sha’Ron James got an up-close view of the insurance industry during her time as an insurance regulator, when she served as the courtappointed receiver and division director of the Florida Department of Financial Services’ Division of Rehabilitation and Liquidation. “As a regulator, I had the opportunity to see insurance companies formed, capitalized, and operating profitably and successfully in the marketplace,” she says. “During that time, I did not see a single person of color at the table. One of the barriers to growth/promotion is the ability to get your foot in the door. Because the industry is relationshipdriven on all levels, the idea that you have to know someone in order to get ahead is largely true. The challenge is figuring out how to break down the door.” To help break down doors, James serves as president of the Florida chapter of NAAIA and is a founder and member of the national HBCU I.M.P.A.C.T. program, which serves as a talent pipeline and encourages students at historically Black colleges and universities to consider careers in insurance. “The insurance industry and its leaders have to become intentional about inclusion and equity,” James says. “For some, diversity is the easiest box to check because it may simply be the result of hiring more people of color. The greater challenge is in [saying] that people of color should be represented at all levels and creating an environment that makes that possible. Companies must be committed to changing the face of the entire insurance ecosystem, which includes the makeup of its owners, investors, governing boards, C-suites, senior leadership teams, sales force, underwriting and claims professionals, and its outside consultants and contractors.”

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JANELLE EDEM Senior vice president and chief of staff, Global Risk Solutions LIBERTY MUTUAL INSURANCE Years in the industry: 15

Mentorship and sponsorship, insurance-specific curriculum at target schools, improving the diversity of teams and leadership, empowering recruitment teams to look beyond traditional talent sourcing strategies, and creating targeted programs to develop and prepare people of color for advancement opportunities: These are just a few of the ideas Janelle Edem has for improving diversity and inclusion within the insurance industry. “We have to continue the work of creating a more inclusive environment within our industry,” she says. “Growing understanding

of the challenges we face as an industry that struggles with diversity is important as we engage allies in accelerating change and closing gaps in equity for people of color. We need to build muscle in recognizing biases in our behaviors and practices that perpetuate inequities in career advancement for people of color – and be brave enough to confront them.” At Liberty Mutual, Edem has held leadership roles within various employee resource groups and diversity-focused councils, including serving as an executive sponsor for Liberty Employees of African Descent and Allies. That group partnered with NAAIA to increase Liberty Mutual’s engagement with chapters in key insurance hubs around the country and helped launch NAAIA’s Boston chapter. “The case for diversity and inclusion is compelling,” Edem says. “The insurance industry is no different from others, where those who commit to diversity and inclusion will very likely outperform on business results. Collaborating with our allies in staying focused on addressing racial inequalities where they exist will make us better, attract new talent to insurance, pay dividends on our business results and have ripple effects to the communities we serve.”

Our in-house expertise positions us to respond to the ever changing needs of the marketplace, as we develop new products to serve a growing industry.

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AmRisc leads the market in underwriting catastrophe and specialty insurance for commercial property. Our partnerships with the world’s leading insurance carriers allow us to provide unmatched capacity to meet the complete specialty coverage needs of our customers.

Learn more by visiting us at: AmRisc.com A Leading Provider of Wind Capacity in the United States

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SPECIAL REPORT

LEADING THE CHANGE RODNEY JOHNSON Divisional vice president of culture and inclusion GALLAGHER Years in the industry: 20

MICHAEL BLACKSHEAR Senior vice president and global chief compliance officer RYAN SPECIALTY GROUP Years in the industry: 29

During his nearly three decades in the insurance industry, Michael Blackshear has been involved in mentoring and engaging leadership with the hopes of creating an environment that fosters and celebrates diverse voices. He is one of eight members of Ryan Specialty Group’s diversity, equity and inclusion committee and is an active member of the Insurance Industry Leadership Pipeline, which generates strategies for the P&C industry to support the development and advancement of people of color. “There are compelling ethical and business reasons why it is important for the insurance industry to value and act upon creating a much more diverse and inclusive industry,” Blackshear says. “In our highly competitive market, lack of diversity will impact innovation, growth, and product and service development.” In addition to his work at RSG, Blackshear has spent 18 years on the executive council of St. John’s University’s Maurice R. Greenberg School of Risk Management, Insurance and Actuarial Science, influencing dialogue for diversity and supporting outreach to students from diverse socioeconomic backgrounds to encourage them to pursue careers in insurance. This year, Blackshear was also accepted to participate in Loyola University’s Diversity, Equity and Inclusion Leadership Institute. “It has always been my approach in being part of the solution to help navigate our industry to create an image that mirrors our society,” he says. “Improving the path for people of color in the insurance industry will be dependent on employers, employees and our industry collectively taking creative, innovative approaches that are risky and unorthodox. We need to do something different since the techniques of the past have not been effective.”

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In 2017, after witnessing years of slow progress on the D&I front within his company, Rodney Johnson felt compelled to take a more active role in shaping the fabric of the insurance workforce. Together with his team, Johnson created Gallagher Connect Partners, an inclusive network of minorities, women and other diverse insurance professionals dedicated to supporting the growth of minority- and women-owned insurance enterprises and attracting more diverse talent to the industry. Since founding the network, Johnson and his team have formed partnerships with the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, NAAIA, the LGBTQ Chamber of Commerce of Illinois, the National Underground Railroad Freedom Center and the Business Insurance Diversity & Inclusion Institute.

“Bringing in diverse talent is not about philanthropy; it is about being more client-centric, bringing more innovation to the table and delivering better outcomes for clients” “Insurance is lagging in diversity and inclusion, and many of the barriers to entry have to do with lack of diversity within the executive and mid-level leadership roles,” Johnson says. “When those leadership roles are not diverse, we often see conscious and unconscious bias factored into the hiring decision. This bottlenecks the pipeline for diverse talent, who may look different but can exceed the qualifications of and outperform in a particular role. “To improve in this area, we must first help leaders and employees understand that bringing in diverse talent is not about philanthropy; it is about being more client-centric, bringing more innovation to the table and delivering better outcomes for clients. Executives need to be bold and hold their leaders accountable for making sure hiring slates are including diverse talent enterprise-wide, both in leadership roles and entry-level positions.”

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28/08/2020 4:10:17 am


AYESHA WEST Vice president of cyber liability EVEREST INSURANCE Years in the industry: 12

MICHAEL A. MARES Commercial insurance producer SECURITY SERVICE INSURANCE Years in the industry: 25

Michael Mares always wanted to be in sales and have the opportunity help entrepreneurs with their businesses. That desire led him into commercial insurance, where he’s worked for the past 25 years. During that time, Mares has been involved in several industry groups dedicated to increasing racial equality and inclusion in insurance. He has served as a board member for the Hispanic Chamber of Commerce and as chair of the Hispanic Chamber Education Foundation, and he’s also a member of the Colorado Black Chamber of Commerce and the Professional Independent Insurance Agents of Colorado. “Barriers to the industry really center on education,” Mares says. “Fewer minorities are going to college and learning about the tremendous opportunities the insurance industry offers. To overcome this hurdle, we need to get more minorities into college, and companies should focus recruiting efforts on minority students.” Reflecting on his career, Mares says the industry has come a long way regarding diversity, but he believes it still has a long way to go. “I feel the insurance industry is still one of the least diverse industries in the country,” he says. “I would like to see more minorities in sales and marketing positions and management roles with all of the companies I represent. It all starts with education and recruiting qualified minority individuals and sharing the knowledge with these individuals. Insurance offers great opportunities that are going to be around forever.”

A chance meeting with Dan Malloy, her mentor and the current CEO of Third Point Re, led Ayesha West into the insurance industry. West says Malloy helped her overcome some of the persistent barriers to entry into the industry for people of color: recruitment, recognition of insurance as a career path and unconscious bias in hiring. The barriers to growth in the industry are similar, West says: Fewer candidates of color will enter the industry if they don’t see themselves represented at senior leadership levels. “This also impacts talent development,” she says. “If insurance organizations only attract small numbers of underrepresented employees, they will struggle to understand, nurture, promote and retain them, fostering a cycle of underrepresentation.”

“While we have made strides in access to education levels as a society, access to true economic opportunity and mobility is not yet equal” To help break that cycle, West co-founded and serves on the board of The Water Street Club (WSC), which aims to increase diversity and inclusion at all levels of the insurance industry through educational events, networking and mentoring. Through WSC, members can gain access to mentors, sponsors and a support network even if their employer doesn’t have formal D&I initiatives in place. “My driving motivation is to positively impact economic equality for people of all backgrounds,” West says. “While we have made strides in access to education levels as a society, access to true economic opportunity and mobility is not yet equal. Removing these barriers will allow our industry to provide underrepresented employees with a clear path to move up. This is particularly important to the insurance industry’s retention of diverse talent.”

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SPECIAL REPORT

LEADING THE CHANGE DENISE CAMPBELL Client director and assistant vice president of national accounts AIG Years in the industry: 12

“In life, we all face moments when people intentionally or unintentionally hinder our growth,” says AIG’s Denise Campbell. “The problem is that with underrepresented groups, specifically cultural minorities, we normalize that hindrance and, as such, normalize the reality that we have to do more to get half as far as our white counterparts.” To help overturn that idea, Campbell has taken an active role in several professional organizations. She sits on the board for The Water Street Club, is the president of NAAIA’s New York Tri-State chapter and is co-business advisor to the Black Professionals @AIG employee resource group. In each of these roles, Campbell strives to help Black professionals reach new heights and find new roads.

“I don’t subscribe to ‘If you don’t like it, then leave.’ I believe that when you truly love something and see the potential in it, it’s up to you to never give up on it” “Mentoring, sponsorship and coaching – the key to movement within this industry lies here,” she says. “These three roles will play an integral part in not only receiving the advice and getting the opportunities, but in being more prepared and comfortable to take on new challenges.” Other keys to increasing diversity, Campbell adds, include experiential training, intentional action, removal of obstacles and accountability at all levels of management. “I don’t subscribe to ‘If you don’t like it, then leave,’” she says. “I believe that when you truly love something and see the potential in it, it’s up to you to never give up on it. We have an opportunity to grow this business beyond what we think imaginable. It is imperative we adopt a culture of inclusion because through diversity, we can combine perspectives for a better view of our world – not only for what it is, but for what it can be.”

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LAVEZZ MIDDLETON Operations leader of multinational billing and collections; chair of the African American Employee Networking Group CNA INSURANCE Years in the industry: 9

A proactive advocate for change with a solution-oriented mindset, Lavezz Middleton serves as chair of CNA Insurance’s African American Employee Networking Group (AAENG) and is an active member of NAAIA’s Chicago chapter. “AAENG’s guiding principles are to educate, engage, and empower our members, colleagues, and local communities in a way that fosters unity across the enterprise and in the marketplace,” Middleton says. AAENG’s initiatives include increasing awareness among highschool students about the professional offerings within commercial insurance and donating $100,000 to Hampton University, a historically Black university, to support students adversely impacted by Hurricane Dorian. AAENG also sponsors and partners with organizations like NAAIA. “We pride ourselves on aligning with other employee resource groups and business partners that share common interests in the D&I space,” Middleton says. Middleton believes that facilitating opportunities for people of color in the insurance industry will require new pipelines for cultivating and developing talent, as well as a commitment from companies to be intentional, transparent and focused on measurable goals. “We need to reexamine the requirements to perform various functions versus general requirements that aren’t specific to the role and could be limiting would-be candidates,” he says. “Be it education, experience or some other factor, business is far more fluid than it has ever been, often requiring experience and adaptability versus a status quo. The industry has room to improve its racial equality and continues to make strides towards doing so. I’m optimistic of the mutual benefits from such change, showing great promise of potential growth.”

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ERICKA DEBRUCE Vice president, colleague experience and corporate citizenship SEDGWICK Years in the industry: 4

As a part of her role at Sedgwick, Ericka DeBruce constantly seeks out new training opportunities to ensure she is as knowledgeable as possible on issues like unconscious bias, mediation and intersectionality. “As an industry, we must constantly look for improved ways to communicate and implement change on a broader level,” she says. “A big part of my role is leading Sedgwick’s efforts to foster a culture of belonging and allowing people to feel comfortable expressing dissenting opinions. There’s a common misconception that having a diverse organization automatically results in diversity of thought. This simply isn’t the case. Rather, this is where inclusion comes into play. Inclusion and belonging, combined with diversity, drive innovation.”

“There’s a common misconception that having a diverse organization automatically results in diversity of thought. This simply isn’t the case. Rather, this is where inclusion comes into play” In addition to her work at Sedgwick, DeBruce regularly speaks on D&I topics and hosts D&I trainings for various organizations. She also led the first Dinner and Dialogue series at Art Village Gallery in Memphis in 2008 and has since facilitated nearly a dozen such events, all centered on complex narratives around race, social stratification, diversity, and inclusion and how this plays out in the arts. “Passion for diversity and inclusion is more than a professional responsibility for me – it is also a personal devotion, being that I am a woman who comes from a multiracial background,” DeBruce says. “During my early years, I watched my father experience exclusion in the workplace from unconscious biases, micro-inequities and missed advancement opportunities because of his race. I saw what could happen to people who are underrepresented in the workplace, and I use this as my motivation to help other people get the opportunities they strive to attain in their careers.”

BRENT JENKINS Assistant vice president CRC GROUP Years in the industry: 19

There are two primary barriers to entry into the insurance industry for people of color, says CRC Group’s Brent Jenkins: limited knowledge of career opportunities and lack of access to decision-makers. “Companies need to be actively recruiting and seeking the candidates that align with their goals and core values,” Jenkins says. “This will include recruiting at historically Black colleges and universities and reaching out to the general public to share the benefits of insurance.” Jenkins is a charter member and the founding president of NAAIA’s Dallas-Fort Worth chapter. Since its inception, the chapter has partnered with agents, brokers and insurance companies for programs and scholarships, and has developed relationships among African Americans to share resources and educate the younger generation about opportunities within insurance. In addition to being an active NAAIA member, Jenkins is also a member of the scholarship endowment fund committee, serves as a volunteer teacher at local high schools through the IIABA InVEST Program and is heavily involved in community service programs. He has also been working with CRC Group’s leadership team to formulate a strategic plan for increasing diversity within the company. “The insurance industry has a lot of room for growth in hiring and recruiting diverse talent,” Jenkins says. “I believe diversity is not just ethnicity, but background, age and perspective. Companies that are truly committed to diversity will have realistic, attainable, written goals that are reviewed and a timeline to achieve those goals. Companies will realize racial equality is a benefit to everyone – not just for their employees, but for their communities, for them, their stakeholders and ultimately the bottom dollar.”

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SPECIAL REPORT

LEADING THE CHANGE DWIGHT GEDDES

recruit more African American college students and ensure that their management teams, C-suites, boards of directors and external partners reflect the demographics of society. “A lot of talented people end up Founder leaving insurance after a few years due to burnout or not seeing a path METRO CLAIMS & RISK MGMT ahead to a career,” Geddes says. “Some of it is not seeing themselves Years in the industry: 20+ reflected in senior management. Another aspect of it is a lack of mentorship. It is crucial to the young Black professional that he or she has Prior to founding his own business, someone who can help them on the career path.” Dwight Geddes worked in several Geddes dedicates his time to several industry organizations, including different roles within the insurance NAAIA; the Dive In Festival; the CLM Alliance, where he is co-chair of the industry, including as an inside/desk adjuster, claims manager and D&I committee; and the annual Claims College, where he serves as a director of claims. “I, like so many others, fell into insurance,” he says, faculty instructor to insurance professionals. adding that one of the biggest barriers to recruiting people of color is “Our industry would be well served to embrace the cultural shift the fact that “the industry does a great job of promoting its products happening and work to lead the change,” Geddes says. “I love this industry but a terrible job in positioning itself as an optimal career choice.” and enjoy what I do, and I want to continue to help to improve it as much To change this, Geddes says, companies need to actively as possible.”

BARRIERS TO ENTRY AND PROMOTION FOR PEOPLE OF COLOR

Typecasting – underrepresented groups face the reality of microaggressions

Racial bias Lack of networks Unconscious and implicit bias

Deep-rooted social and economic inequities

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awareness of the career opportunities Lack of Little available within the industry of C-suite commitment and Lack sponsorship accountability from leaders Lack of training

No deliberate effort by the industry to recruit people of color

Nepotism and favoritism in the hiring process

“With so few Blacks in the industry and little exposure to the majority, many African Americans outside of the industry have limited to no way of learning about the industry or connecting with sources who can advocate for them and provide valuable career sourcing insight and information” Lack of educational preparation

Lack of sponsorship

Leaders and hiring managers often support and promote people they feel comfortable with

Affinity bias and lack of allyship Little to no access to management development programs

Lack of representation across all levels of leadership: board members, C-suite, executive level, management

Gender bias

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NIKEL CLEAVES Global director, diversity and inclusion AON Years in the industry: 15+

Nikel Cleaves’ role at Aon is focused on advancing talent (especially diverse talent) throughout the organization and championing the company’s holistic mentorship and sponsorship initiatives. She is responsible for setting and driving Aon’s D&I strategy and for making this vision come to life for colleagues. One initiative Cleaves is particularly proud of is Aon’s apprenticeship program, which provides opportunities for young professionals to develop vital skills while earning a competitive salary.

Through this program, Aon has built an alternative talent pipeline of young, highly skilled and diverse professionals. Cleaves is also heavily involved with the Dive In Festival and is a member of the National Association of African Americans in Human Resources, the Society for Human Resource Management, Alpha Kappa Alpha Sorority, Women in Leadership and Menttium 100. In 2019, she co-chaired Dive In Chicago, where she led an inspiring series of events, including a groundbreaking exploration of the detrimental impact of systemic racism during catastrophic events through a screening of the film Cooked: Survival by Zip Code, followed by a panel discussion led by the film’s producer. She also facilitated a TED Talk and panel of insurance industry leaders who explored and challenged participants’ thinking about customer innovation and the inclusion factor. A tireless advocate of diversity, equity and inclusion, Cleaves truly “walks the walk,” her colleagues say, by driving change within her organization and the broader insurance industry.

Sponsorship

Promote diverse Clear accountability for talent within an all management organization Structure the interview process to ensure there is diversity in the candidate’s panel

“To experience diversity and inclusion in our industry takes intentional, focused effort. We cannot continue to do what we have done in the past and expect a different result”

Coaching

Mentoring Establish a platform for reporting injustices and take demonstrable disciplinary action – and hold managers accountable for taking action

Increase visibility of the industry and its career opportunities

Build sustainable relationships with diverse vendors, suppliers, trading partners and other third parties that have developed and embraced similar DEI strategies

Training and awareness

Get comfortable with being uncomfortable and having uncomfortable conversations

Establish metrics and align incentives for managers and leadership around DEI goals

Create diverse hiring requirements

Disrupt existing recruiting and development practices in order to target people of color to develop sustainable long-term pipelines

Active engagement from CEOs, presidents, boards of directors and executive leadership on DEI initiatives

Intentional exposure to senior leadership

Meaningful dialogue about DEI

SOLUTIONS FOR REMOVING THOSE BARRIERS TO ENTRY

Establish strategic partnerships with underrepresented networks, associations and universities

Acknowledge biases based on personal experiences and embrace a culture of helping each other

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FEATURES

WHOLESALE E&S MARKET

SOME THINGS WORK BETTER TOGETHER

WHOLESALE E&S MARKET REPORT 2020 IBA takes an in-depth look at how the US surplus lines market has performed during the first half of a tumultuous year

EVEN AMID a global pandemic and the resulting economic disruption, the US surplus lines market continues to surpass expectations. In the first six months of 2020, stamping and service offices reported almost $20 billion worth of premium, up 10.3% over the same period the year before, according to the 2020 mid-year report from the Wholesale & Specialty Insurance Association

if there were any month-to-month trends related to COVID-19. “We haven’t seen it impacting business, but maybe it’s yet to come,” says WSIA executive director Brady Kelley. “States are giving policy­ holders more time to pay their premium and brokers and carriers more time to present their reports, so timing could play a role in slowing down

“It’s too soon to understand the impact of the pandemic for the long run, but we are professional problem-solvers and are cautiously optimistic we can sustain growth” Bryan Sanders, Markel Specialty (WSIA). Each of the 15 state stamping offices reported premium increases; eight states reported double-digit increases. Overall transaction counts decreased by 2.6% compared to mid-year 2019, although nine states reported increases. At the start of the pandemic, the WSIA began tracking the top five state stamping offices – Texas, California, Illinois, New York and Florida – to see

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the impact to our market. But a 10% increase yearover-year is a sign of a strength.” Predicting the direction of the market at this point is challenging, given the unprecedented environment of the pandemic, as well as the social and political unrest across some parts of the country. However, the results so far point to a period of stability and growth ahead.

www.ibamag.com

28/08/2020 4:37:03 am


WHOLESALE PREMIUMS BY STATE, MID-YEAR 2020

WASHINGTON $646 million 68,298 items

MINNESOTA $311 million 24,768 items

IDAHO

$89 million

10,464 items

ILLINOIS $1.0 billion 71,298 items

NEVADA

OREGON

Like working with a

PENNSYLVANIA $784 million   112,192 items

$196 million

20,490 items

$252 million

NEW YORK $2.4 billion    164,388 items Wholesale & Specialty Insurance Association member to find a custom solution to a

UTAH $216 million 24,699 items

35,705 items

nonstandard risk. WSIA members will help you craft cost-effective,

CALIFORNIA $4.6 billion 372,630 items

NORTH CAROLINA $468 million 91,908 items

innovative solutions for your specialty and nonstandard risks.

ARIZONA $363 million 45,497 items

TEXAS

$3.9 billion  

527,541 items

MISSISSIPPI $256 million 84,339 items

Combining the strength of the former AAMGA

FLORIDA

and NAPSLO organiza-

$4.2 billion  

608,900 items

tions, WSIA members are your source for

MID-YEAR PREMIUMS BY REGION

expert solutions. West: $6.4 billion

Midwest: $1.3 billion

South: $8.8 billion

Northeast: $3.2 billion Source: WSIA 2020 Mid-Year Stamping Office Report

“We were fortunate to have entered this time in a relatively strong position as a market,” says Bryan Sanders, president of Markel Specialty and the current WSIA president. “It’s too soon to understand the impact of the pandemic for the long run, but we are professional problem-solvers and are cautiously optimistic we can sustain growth.” The best-performing lines of business vary regionally, but Kelley says there is continued growth across the board in commercial property, construction and cyber liability. Small business binding accounts have been most impacted by the pandemic due to forced closure. Major challenges lie ahead on the legislative

and regulatory fronts stemming from the COVID-19 pandemic, as each state has issued individual and constantly changing guidelines for policy­ h older accommodations. Legislative proposals that call for insurers to pay for pandemicrelated business interruption coverage that was never sold are also a major concern, according to Sanders, as the impacts to consumers and businesses would be far-reaching. “We intend to honor contracts as they’re written, as we always do,” he says, “but we also need to be able to protect insureds long into the future for catastrophic events like natural disasters, which don’t stop during a pandemic.”

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find WSIA members at wsia.org find WSIA members at

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wsia.org

28/08/2020 4:41:28 am


FEATURES

WHOLESALE E&S MARKET REGIONAL PERSPECTIVE

WEST

The West has the highest number of stamping offices in the US, making it somewhat of a bellwether for the rest of the country. It’s also home to the three states with the biggest premium increases nationwide: Utah and Idaho both saw jumps of more than 40% compared to mid-year 2019, while Washington wasn’t too far behind with a premium increase of nearly 30%. “Population growth was significant in Nevada, Utah and Idaho,” says Thomas Joyce, executive vice president and chief underwriting officer at Nautilus Insurance. “With the spike in construction, we will see continued growth in the E&S business.” Catastrophic fires and social inflation have also been major drivers in the E&S market in the West, especially in California, where premiums rose by 7.84% and filings went up by 3.21%. (The WSIA report did note a possible a lag in reporting due to extended filing deadlines in several states, including California.) More than 1.5 million acres have burned in the state so far this year; the fires that ignited in August have torched more than 1.1 million acres to date. The economic impact of these fires over the past couple of years has had a profound financial and psychological impact on carriers, according to Joyce. “The market in California is firm, if not hard,” he says. “There’s just not a lot of capacity around brush zones and little interest in writing property business in those areas. With that comes a spike in the cost of property insurance and package business.” Joyce adds that the casualty market in California is also very volatile with social inflation trends showing up in a more profound way. In Washington and Oregon, premium was up by 29.9% and 17.8%, respectively, and it’s expected the market will continue to harden in light of the ongoing social unrest in those states. “Any time there is political uncertainty or activism of this magnitude, it creates far too much uncertainty within the insurance

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MID-YEAR PREMIUMS: 2019 VERSUS 2020 Mid-year 2020

Mid-year 2019

$363 million $352 million 

AZ CA

$4.6 billion $4.3 billion 

FL

$4.2 billion $3.8 billion  $89 million  $64 million 

ID

$1.0 billion $914 million 

IL $311 million $303 million 

MN

$256 million $242 million 

MS

$468 million $424 million 

NC $196 million $189 million 

NV

$2.4 billion $2.3 billion 

NY $252 million $213 million 

OR

$784 million $703 million 

PA

$3.9 billion $3.5 billion 

TX $216 million $154 million 

UT

$646 million $498 million 

WA $0

$100m

$200m

$300m

$400m

$500m

$1bn $2bn $3bn $4bn $5bn Source: WSIA 2020 Mid-Year Stamping Office Report

“Any time there is political uncertainty or activism of this magnitude, it creates far too much uncertainty within the insurance industry” Thomas Joyce, Nautilus Insurance industry, which results in increased scrutiny of those risks in and around those cities. Pricing business during or after this kind of unrest will be a major challenge for the

market,” Joyce says, adding that the industry reaction will be aggressive, and companies that act sooner rather than later stand to benefit the most.

www.ibamag.com

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28/08/2020 4:37:11 am

IB WI


S A N

F R A N C I S C O

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Essential speaker sessions and panel discussions from industry experts Networking opportunities with empowering industry leaders Strategies for becoming a bold female leader – or mentoring the next generation The lowdown on the biggest issues that women in insurance encounter today

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women.ibamag.com/ san-francisco/

28/08/2020 8/19/2020 4:37:15 9:01:17 am AM


FEATURES

WHOLESALE E&S MARKET REGIONAL PERSPECTIVE

MIDWEST

Of the two Midwest states with stamping offices, Minnesota saw more modest changes in the E&S space than many other states, with just a 2.46% increase in premium and a 2.35% increase in filings. The other Midwest stamping office in Illinois reported a 12.2% increase in premium but an 8.35% drop in transactions. Joel Cavaness, president of Risk Placement Services (RPS), says the decline in filings amounts to less than 7,000 items across the entire state and was likely caused by a couple of different factors. “The main reason would be the filing extensions that took place over the pandemic,” he says. “Some larger MGAs also experienced downturns because new business startups would have put things on hold, and on the larger side, premium escalations and new entrants into the E&S space also contributed to that.”

“There will be new activity and products to fill the gaps we’ve never contemplated before” Joel Cavaness, Risk Placement Services While the pandemic is far from over, Cavaness says the types of business flowing into the E&S space in the Midwest are continuing to escalate, and the positive submission flow is expected to continue in the third quarter. Increasing changes in climate cycles remain a concern for the region, where floods have become more intense and more frequent and tornado activity remains a major property exposure. “Patterns continue to change, and areas with less tornado exposure in the past are seeing more activity now,” Cavaness says. “As

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weather patterns change, so do the exposures that insurance companies have to deal with.” The biggest immediate challenge, however, will be the decline in new business startups in the region. The E&S space thrives on new businesses, Cavaness explains, because they don’t have the experience and loss information that standard lines look for. However, he believes new opportunities will present themselves as the industry tries to figure out new pandemic-related exposures that could impact the public, businesses, employees and the government. “There will be new activity and products to fill the gaps we’ve never contemplated before,” he says. “It’s been an eye-opening experience, and we will have to find new ways to help insureds and provide risk management solutions for unknown events.”

REGIONAL PERSPECTIVE

SOUTH

All four of the stamping offices in the South posted healthy premium increases in the first half of 2020. Texas saw a 13.41% spike, despite a 3.89% decline in transactions. According to the Surplus Lines Stamping Office of Texas (SLTX), the state is seeing record-setting premiums, including three of the top four highest-premium months in SLTX history.

“If Lloyd’s of London continues to reduce its presence, we will continue to see significant changes in the property space based on lack of availability” Chris Siegel, Burns & Wilcox Florida also saw a decline in transactions but still posted a 9.65% increase in premium. The state’s E&S market has seen an influx of opportunities as the market hardens for both liability and property exposures, and an increase in severity is expected as the COVID-19 pandemic continues to develop. “We have progressed from a market of sheer competition to a market of availability,” says Chris Siegel, a Florida-based managing director at Burns & Wilcox. “Aggregate for property has shrunk considerably, driving prices up, and solidification of the wholesaleretail relationship dynamic is essentially

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reserved for the stronger partnerships.” Given the litigious nature of the state, Siegel says he’s also seen a significant hardening of casualty rates, which don’t typically follow the property markets. The market was already firming before COVID-19, but the pandemic is adding fuel to the fire, bringing a new set of circumstances and challenges to the space. “We write a lot of hospitality business in the E&S market for bars, restaurants and entertainment venues, but the pandemic has forced many of these establishments to close their doors,” says Blaise D’Antoni, executive vice president and managing director at Burns & Wilcox. “We’ve seen cancellations and several requests to reduce exposures on policies, which has had a negative impact on business.” Going forward, these new challenges will present additional opportunities. Siegel says the personal insurance marketplace has seen a number of admitted carriers withdraw or liquidate due to poor financial performance, sending a large amount of business into the E&S space. Another significant driver is the multitude of syndicates that have quickly withdrawn from the market. “If Lloyd’s of London continues to reduce its presence,” Siegel says, “we will continue to see significant changes in the property space based on lack of availability.”

“Many carriers were cutting limits and increasing rates, so it was a perfect storm for wholesalers in the E&S marketplace” Ed Pray, RT Specialty New York office. “We saw hikes in property, professional lines and transportation. Many carriers were cutting limits and increasing rates, so it was a perfect storm for wholesalers in the E&S marketplace.” From an underwriting perspective, carriers in the Northeast have been challenged for some time, Pray says, as labor law in the New York construction space has made things difficult for years. As a result, premiums have been increasing and terms have grown more stringent, especially in the general liability space, driving more submission flow into the E&S marketplace. So far, the impact of COVID-19 in the region has mainly been concentrated on

exposures and affected workers’ compensation and general liability lines based on payroll and receipts, Pray says, especially in the hospitality and construction sectors. With so much uncertainty still in the market and carriers posting potential catastrophe losses based on COVID-19, Pray expects the fallout from the pandemic to be more noticeable in the coming months, with heavier increases in pricing and tighter underwriting. “The opportunities will be there because that’s where the market was headed anyway,” he says. “It will really depend on how long and how severe pandemic measures continue to be. The economy has taken a plunge, and if it continues, that will be a challenge.”

REGIONAL PERSPECTIVE

NORTHEAST

As with most regions, the E&S market in the Northeast was heating up pre-pandemic. Prices were increasing, and more business was coming into the surplus market as standard lines carriers backed away. Pennsylvania reported an 11.53% increase in premiums, while New York posted a more modest 5.73% increase, coupled with a 5.56% drop in transactions. “Previous losses were catching up in the marketplace, which was driving increases in pricing pretty much across the board,” says Ed Pray, president of RT Specialty’s

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FEATURES

EMERGING RISKS AND INNOVATION

EMERGING RISKS AND INNOVATION 2020 From cyber threats and climate change to an ongoing pandemic, the challenges currently confronting the insurance industry are vast. IBA sat down with five industry leaders to find out what they’re doing to overcome them THE PARTICIPANTS Mike Chapman President Hub South Mike Chapman is president of Hub International’s South region, responsible for leading the region’s four hubs, $300 million in total revenue and 1,000 employees. Chapman also serves on Hub’s executive management team and is a member of its steering and operations committees. He previously served as the chief sales officer of Hub New England and CEO of Hub Southeast. He is a regular speaker on the commercial insurance market, a frequent contributor to industry publications and has served on advisory councils for several major insurance carriers.

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Ariel Couto Regional manager, Americas Brokerslink Ariel Couto began his insurance career in 1995, managing a family-owned broker. He has since held roles at companies like Brascan Group Broker (now Brookfield) and RSA Seguros (now Sura), where he was commercial and marketing director. Most recently, Couto led the return of Australian insurer QBE to Brazil. He currently serves as Brokerslink’s regional manager for the Americas and is the CEO of MDS Brazil.

Tony Kuczinski President and CEO Munich Re US Tony Kuczinski has been with Munich Re US for 31 years and currently serves as president and CEO, as well as chair of Hartford Steam Boiler Group and chair of American Modern Insurance Group. Kuczinski is responsible for Munich Re’s property & casualty reinsurance and specialty insurance businesses in the US. He is also a board member of Munich Re America Corporation and numerous other Munich Re affiliates, as well as an executive committee and advisory board member for the St. John’s University School of Risk Management.

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Jamie Bouloux CEO EmergIn Risk Jamie Bouloux is the CEO of EmergIn Risk, a managing general underwriter specializing in enterprise-wide collaborative solutions for emerging risks. Prior to joining EmergIn Risk in 2015, Bouloux was the lead underwriter for CFC Underwriting’s large corporate cyber facility and team leader for its technology and media practice. He also spent six years at AIG, where he helped develop the cyber strategy for more than 40 territories across Europe, the Middle East and Africa. He is a frequent presenter and contributor on cyber-related matters.

John Beckman Chief underwriting officer QBE North America John Beckman leads QBE North America’s efforts to enhance existing underwriting practices and processes, including product development, technical leadership and risk appetites. He also serves as chair of QBE’s North America underwriting committee. Beckman joined QBE in 2017 from CNA Insurance, where he held a variety of leadership positions, including senior vice president and chief transformation officer, charged with developing and implementing new predictive pricing tools and replacing legacy underwriting and policy administration systems.

WHILE THERE’S no such thing as an average year in the insurance industry, 2020 has already proven to be more extreme, more unpredictable and more chaotic than any in recent history. The far-reaching effects of COVID-19, along with ongoing climate change, technological advances, enhanced cyber threats and an economic downturn, are all taking their toll, and insurance professionals are valiantly working to keep up – or even get ahead of things. For the first time in the nine-year history of the Allianz Risk Barometer, cyber incidents ranked as the most important business risk globally at the outset of 2020, usurping business interruption by two percentage points with 39% of responses. Cybercrime also placed first on Willis Towers Watson’s fourth annual Dangerous Risks survey. This increased awareness of and worry about cyber threats isn’t a surprise, given the rise in ransomware and phishing attacks, the challenge of weak security systems, the rapid increase in remote work brought about the pandemic and the growing reliance on cloudbased storage options. Climate change is another major risk for insurance companies as the Earth continues to grow warmer and natural disasters become more frequent. In the AXA-Eurasia Group’s most recent Future Risks Report, the 1,000plus insurers and scientists surveyed rated climate change as the most pressing threat for the third year in a row. Given that the five warmest years on record have occurred since 2010 and the trend of increased major weather events has remained steady over the past decade, it’s a fair bet that this risk will continue to grow. The five insurance experts IBA spoke to about today’s emerging risks echoed those reports, highlighting cyber threats and climate change as two of the most urgent issues currently facing the industry. But they’re far from the only ones – social inflation, technology E&O and the unanticipated outcomes of COVID-19 are all on their radar as top risks as well. On the following pages, they offer insights into the solutions and actions their respective companies are taking to navigate and mitigate these critical risks.

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FEATURES

EMERGING RISKS AND INNOVATION THE COVID-19 PANDEMIC IBA: What impact has COVID-19 had on the insurance industry, and how has it responded thus far? Tony Kuczinski: The COVID-19 pandemic has forced the industry to respond to dangerous regulatory and legal challenges that attempt to retroactively change coverage for risks that were never covered, never intended to be covered and on which premium was never assessed or collected. These attempts to force coverage in a broad way could financially and irreparably harm the industry overall, which in turn could take away from our ability to respond to other risks as intended. While we have seen and dealt with global challenges before, with the pandemic, we are reminded of why such a sudden and widespread health, economic and political risk is not an insurable risk without substantial government support as the primary response. We are also reminded that innovative solutions can help us to better address these hurdles. We must be ready to try new strate-

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“The economic impact [of COVID-19], social unrest, and awakening of diversity and inclusion conversations means we have a lot of risk areas to ponder� Mike Chapman, Hub South gies to address these new types of threats. Mike Chapman: COVID-19 has created an almost unprecedented set of challenges for the insurance industry. The economic impact, social unrest, and awakening of diversity and inclusion conversations means we have a lot of risk areas to ponder. Three that jump out at me are the risk associated with working from home, the liability of employers as employees return to their places of work and the combination of a critical election in November coupled with a need to take a deep look at our healthcare system. The exposure of the insurance industry and our customers will be massive and difficult to properly manage and insure during the pandemic. Current cyber liability risk

management practices, insurance policies and claims management will all need to be more deeply developed. Ariel Couto: Business interruption has become a pressing concern during COVID-19. However, in most cases, coverage is not provided for financial losses caused by the economic downturn, either due to the absence of related material damages or a pandemic or similar exclusion – or, in most situations, both. This opened our eyes to the need to transfer this risk, or part of it, not only in this situation, but in other cases where, even in the absence of a material damage, there is a financial loss. The insurance market needs a lot of development to absorb the immense demand created by the pandemic. Although there are

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38896


If they can dream it, we can place it.

WHAT ABOUT A ROOFTOP BEE COLONY? Every risk starts with a big, bold idea. And at RPS, we believe that every risk deserves the most secure placement. That’s why we never say no when it comes to finding trusted markets for unprecedented business ventures. Let’s talk about what’s new, what’s next and what’s possible.

www.rpsins.com

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FEATURES

EMERGING RISKS AND INNOVATION

some companies offering products to cover non-damage business interruption [NDBI] risks, normally the offer is directed to very specific niches – for example, entertainment, weather, regulatory or political risks. That said, COVID-19 has certainly raised clients’ awareness of the need to purchase proper NDBI insurance and will likely boost insurers’ offerings. Due to the complexity of the risk assessment, underwriting and the

cyber market. Frequency of loss is certainly one issue, and the industry continues to work with vendors to provide educational tools to help manage remote workforces. Tightening infrastructure exclusions to limit an increasingly systemic exposure is one idea. Decentralized workforces mean that companies are increasingly challenged to maintain the integrity of their networks while giving employees access to the relevant data

“COVID-19 has already forced healthcare companies to innovate and provide services such as telehealth to patients, but this needs to go one step further and look to prevention and management” Ariel Couto, Brokerslink amount of losses that can be generated by a single event, insurance companies will need to invest in people training and technology in order to respond quickly to the market and take advantage of the new demand. Jamie Bouloux: It is not entirely clear how COVID-19 will manifest itself within the

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they might need. Managing access controls, administration rights, bring your own device [BYOD] and virtual private network [VPN] protocols, all while monitoring front-end security controls, remains a real challenge. [Moving forward], companies may look to shrink their cost base by decreasing their real

estate footprint and push costs onto employees by encouraging BYOD, which could undoubtedly create increased questions around corporate responsibility and liability.

CLIMATE CHANGE IBA: Why do you consider climate change a current risk, and what are you doing to mitigate its impact for your clients? John Beckman: We are continually investigating the impact climate change has on our customers, from the frequency and severity of weather events to longer-term impacts on city planning. In 2020, we have been evaluating how our policies could respond to various scenarios brought on by long-term climate changes and help support efforts to limit the adverse consequences of climate change. This is a comprehensive review of all of our products, not just first-party coverages, which are most often discussed when the topic is climate change. We have also adjusted our pricing to reflect our near-term expectations, including capital

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“It is more clear than ever that climate change is having a detrimental impact on society, and the concept of resiliency needs to take a higher priority for all stakeholders� Tony Kuczinski, Munich Re US requirements and risk management procedures. Those changes have resulted in new portfolio management strategies for mix of business by customer, construction types and roof ages. From a loss mitigation perspective, we are investigating long-term city planning under various scenarios through an investment in an insurtech operation. We also continue to monitor advancements in

construction that increase the resistance to extreme weather. We may change pricing models to encourage and support people protecting their property. Tony Kuczinski: Recent events such as the wildfires in California and Australia have been major headlines. We can help boost community resilience from an industry perspective by educating organizations and

individuals on insurance coverage and simple best practices they can follow to help put themselves in the best situation possible prior to an event occurring. It is more clear than ever that climate change is having a detrimental impact on society, and the concept of resiliency needs to take a higher priority for all stakeholders. As an industry, we have focused on boosting resiliency on topics like flood and wind by educating communities, supporting the use of fortified building and by using digital tools to analyze and identify risk zones. Also, digital solutions help us to be more efficient with the time it takes to go through the claims process, allowing us to potentially bring clients from harm to whole a whole lot quicker. By analyzing data that we have collected over decades for high-risk flood zones and

CONGRATULATES

Sherita Hardy and Monique Young for being selected as industry trailblazers, promoting inclusion through action and driving change.

SHERITA HARDY Assistant Vice President AmWINS Brokerage of Texas

MONIQUE YOUNG Vice President, Client Success True Benefit

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FEATURES

EMERGING RISKS AND INNOVATION communities, we can help articulate building code concerns, better tailor private flood coverage and create flood insurance tools that will better help the client be resilient.

CYBER THREATS IBA: What are the biggest risks in the cyber realm, and what innovation is needed to manage those risks? Jamie Bouloux: Ransomware is probably the most challenging cybercrime impacting companies today. The cost of ransomware is on the rise – Cybersecurity Ventures estimates that the global cost of ransomware will reach

$20 billion by the end of 2020, up over 70% on the prior year. Given the proliferation and evolution of ransomware, it seems unlikely that, on its own, an increase in premiums, coupled with underwriting review, will be sufficient to combat the effect this exposure is having on loss ratios. With governments not yet moving to unilaterally address the issue of ransomware and cybercrime, it seems likely that insurers will need to find ways to manage this exposure. Excluding coverage for ransom payments is unlikely, as this is undoubtedly one of the biggest risks to insureds and a key reason that cyber insurance is purchased. The reality is that pushing retention, or even splitting them across coverage sections, may not be sufficient

“By asking the insured to have skin in the game [with cyber co-insurance], it would encourage them to invest in the technology, solutions and protocols needed to protect their business� Jamie Bouloux, EmergIn Risk

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to combat the issue either. One solution may be for the markets to look at co-insurance for this specific coverage. By asking the insured to have skin in the game, it would encourage them to invest in the technology, solutions and protocols needed to protect their business. Ariel Couto: The substantial change to working patterns and increase in remote working has led to a rise in cyberattacks, with cybercriminals deploying various methods of attack, including phishing, malware and ransomware. Although today we have a reasonable number of insurers that offer cyber insurance products, the acceleration of the market and increased sophistication and frequency of attacks demands new coverages and more comprehensive wordings in order to justify the risk transferring. According to a report published by Allied Market Research before the COVID-19 pandemic breakout, the global cyber insurance market was valued at $4.9 billion in 2018. This is projected to reach $28.6 billion by 2026. We will need to ensure clients are being better educated on this risk and that products are agile enough to meet the everchanging methods of cybercriminals. John Beckman: Cyber has been a hot topic in recent years, but in 2020, the growth in working from home due to the pandemic has set it afire. We are exploring how we can further improve our products to ensure parties understand the protection provided against cyber risks. Our goal is to be more explicit so that our trading partners and customers can make the best decisions regarding their specific needs. We have also invested in services to help customers mitigate this risk, from web-based solutions to pre-agreed services from third-party vendors. Mike Chapman: Preparing for cyber risks will require direct partnerships between insurance carriers, brokers and the companies providing the technology to address cyber risk. Prevention must become a much bigger shared focus. Additionally, companies will need to provide some degree of legal protection for employer liability, while also addressing education and training to avoid the bias issue that is still facing our entire society.

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We can’t underwrite around the problem – this is about having a common sense of what needs to be done.

OTHER EMERGING RISKS OF 2020 IBA: This has been an extraordinarily challenging year, to say the least. What are some of the most surprising risks that have surfaced? Ariel Couto: Mental health is a big risk right now. Social isolation caused by COVID-19 has triggered fear, uncertainty and loneliness. I believe changes in the way we live and work are here to stay, and the stress and anguish of adapting to this, combined with unprecedented unemployment growth, is reflected in the significant increase of mental illness. In the past, greater emphasis has been placed on physical health, but nowadays mental health has become much more of a priority area – this will only be accelerated by COVID-19 and its impact on people’s lives. The pandemic could also see a low loss period for healthcare providers as elective procedures are postponed and people avoid emergency rooms. This movement will pressure premiums down, and companies will need to be quick to develop new low-cost, scalable solutions. COVID-19 has already forced healthcare companies to innovate and provide services such as telehealth to patients, but this needs to go one step further and look to prevention and management. We should see companies investing in emotional support services that can prove to be more effective than some prevention programs adopted in the past. Jamie Bouloux: EmergIn is considering whether technology E&O could become the next ‘recessionary’ exposed E&O class. More and more organizations will be turning to tech companies to support them to provide communication services, infrastructure management, data storage and processing, etc. As companies potentially suffer through any prolonged economic downturn and fiscal hardship, it is not unrealistic to think that the commitments and service agreements

“The best way to mitigate the increase in [claim] severity due to social inflation is to help our customers avoid losses altogether” John Beckman, QBE reached between certain tech companies to provide operation efficiencies will potentially be challenged. Many of the primary insurance markets are without a doubt seeing a spike in loss ratios, which is certainly driving a hardening within the cyber market. Policy terms are tightening, and premiums are moving up; however, the above exposures will likely remain covered, as they are core to the cyber product. As such, beyond increasing premiums, the underwriting process remains front and center as the industry continues to hire the appropriate talent, rigorously train our employees, adopt risk review solutions and require more transparency with our potential insureds through the application process. John Beckman: Social inflation has already impacted the insurance industry in 2020. The most common current response in

the market is to increase severity trend assumptions in pricing. However, all claims are not affected the same way by social inflation. We are studying the types of injuries and the circumstances surrounding the claims that are increasing the most due to this emerging risk. Because of the expansive list of risks/loss causes that have been affected by social inflation, it’s hard to restrict any individual exposure. Without mitigation, customers could face substantial price increases and even a withdrawal of capacity. The best way to mitigate the increase in severity due to social inflation is to help our customers avoid losses altogether. This raises the importance of service and innovation. Consequently, we are focusing on safety programs, technological improvements and early engagement with injured parties.

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SPECIAL PROMOTIONAL FEATURE

THE FRONTING MODEL

A frontier in fronting Dan Case of State National tells IBA how a fronting solution can help program managers prosper in a rapidly evolving market

RAPIDLY HARDENING market conditions in almost all property & casualty lines, combined with the unforeseen slowdown of the global economy due to the COVID-19 pandemic, have presented unprecedented challenges to many participants in the US insurance market. However, much of the groundwork for today’s market was laid prior to the pandemic, when Lloyd’s reduced stamp capacity for many syndicates and key capacity providers such as AIG and FM Global made significant revisions to their risk appetite. More recently,

scrambling to replace lost risk-bearing capacity or are preemptively diversifying their carrier panels in anticipation of additional turmoil. One option many program managers are turning to is the fronting model, where the issuing carrier outsources all insurance operations to a specialist general agent and reinsures all associated risk. As an alternative for distributors who have traditionally used a Lloyd’s binding authority or delegated underwriting authority, fronting insurers provide the regulatory authority and coun-

“As distributors increasingly make markets in certain specialty risk segments, having them assume more control over product, pricing, claims and ultimately risk capital is a natural evolution” Dan Case, State National Lloyd’s announced plans to strengthen its focus on the US reinsurance and excess & surplus markets and relinquish admitted licenses in the US Virgin Islands, Kentucky and Illinois, which together represent around $215 million, or 1% of Lloyd’s annual US premium income. Many distributors of risk who have traditionally relied on these outlets are suddenly

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terparty security required to operate in US insurance markets as a service separated from risk-bearing. “Our operating model is quite different from traditional carriers and even other fronting carriers,” says Dan Case, executive vice president at State National Companies, the largest fronting insurer in the US, which wrote $2.3 billion of premium through its

program services business unit in 2019. “We rely on our program manager partners for product and market expertise and structure our relationships to grant them autonomy to utilize that expertise to its fullest potential.”

How it works An insurance product is a bundle of services, all of which have traditionally been provided, or at least organized, by an insurance carrier seeking to retain risk in a certain segment. In the fronting model, however, the program manager or general agent retains the initiative and is the driving force behind an insurance product, responsible for organizing all operations, including product design, pricing, distribution, policy administration and claims. Critically, the program manager is also responsible for sourcing risk-bearing capital in the form of reinsurance to support each product. A fronting insurer fills an important but much narrower role, focused on providing requisite regulatory authorities and a stable balance sheet to provide policyholders with financial security. Reinsurance is a critical component in the fronting market and, similar to the primary insurance market, is currently experiencing a rapid hardening. “We are seeing behavior by reinsurers reflect the changing market conditions,” Case says. “Some are retrenching, while others are strategically seeking to capitalize on the current pricing environment. However,

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capacity certainly continues to be available for high-quality programs.”

What’s next? Looking beyond the current state of the market cycle and the pervasive influence of the pandemic, several macro insurance trends are intersecting with fronting. Case sees a clear trend among wholesale brokers looking to provide exclusive products and improve their value proposition to retail agent clients. “We are ideally positioned to facilitate the

expanding role of firms who control distribution,” he says. “As distributors increasingly make markets in certain specialty risk segments, having them assume more control over product, pricing, claims and ultimately risk capital is a natural evolution, and our business is a perfect platform to support this.” The other trend continuing to manifest via the fronting market is the increasing role of alternative capital. Since 2001, the market for insurance-linked securities (ILS) has increased substantially, with more than

$15 billion trading between capital market investors, according to research by an actuarial risk manager at Munich Re. Historically, ILS has focused on property insurance and natural catastrophe perils. However, Case says interest is increasing in other, lowervolatility lines of business. “We are seeing a significant number of sophisticated alternative capital providers interested in casualty reinsurance,” he says, “and are excited to see this market continue to develop.”

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FEATURES

BROKERAGE INSIGHT

Diversity-minded, technology-focused Protecdiv is less than a year old and has already formed two key industry partnerships. IBA caught up with CEO Kael Coleman to find out what sets the new brokerage apart and why it linked up with a 130-year-old company

IBA: Tell us about the launch of Protecdiv. What gaps did you identify in the insurance brokerage landscape? Kael Coleman: We saw two needs in the marketplace. The first one was around diversity. So myself; Paul Little, our COO; and others in the company have been in financial services and insurance and reinsurance for 20 to 30 years. One of the things I think is no surprise is that we’re not the most diverse industry. Where that becomes an opportunity for us to create a company that helps us solve a need is around supplier diversity. In public entity contracts, there are generally supplier diversity requirements, and for many larger private companies, they have supplier diversity goals where they would like to have a certain percentage of their overall vendor spend go to diverse-owned businesses – that’s minority-owned, women-owned, disabled-veteran-owned businesses, and many corporates count LGBTQ-owned businesses as well. While it’s certainly a noble goal, to be a vendor of the Fortune 2000 companies, you still have to have a similar scale to those companies, so you have to have a nationalscale infrastructure, top-tier expertise, access to the best goods and services available, and the infrastructure of a larger company.

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The challenge is that there aren’t enough diverse-owned businesses to fulfill supplier diversity goals. In insurance, it’s even more acute, so the opportunity we saw to help was that we have a team that has decades of experience working with industrial-scale commercial enterprises. We have the expertise, the market access to deliver solutions and a history as individuals of being particularly innovative and driving new solutions. So we said, “Let’s put all of this together, and we’ll create a company that is a certified minority business enterprise, and we will be able to deliver the best solutions in the marketplace, but also deliver supplier diversity credits for our clients.”

IBA: What was the other need you sought to fill in the market?

KC: Again, I think it’s no surprise that the insurance industry is a bit behind the rest of the world in terms of technology, and I think for very good reason. Brokers and insurers have been in business for a long time with lots of legacy systems due to M&A activity, different geographies and different lines of business, and the technology hasn’t kept up – and it hasn’t really had to. As a startup – as a new company that started as technology nativists and was building technology from day one – we believe that we can create a platform where our people are much more efficient. That efficiency allows our people to spend more time on thought work rather than the rote day-to-day manual lifting that we as brokers tend to do. We also can create new solutions and then deliver these solutions to our clients much quicker

ABOUT PROTECDIV Protecdiv is a property & casualty insurance and reinsurance broker and mortgage risk transfer advisor servicing large publicly traded and privately held companies, particularly those involved in auto manufacturing and supply, as well as financial institutions and government and government-sponsored entities. Protecdiv is also the only minority-owned insurance broker that will universally qualify as a tier-one broker for Fortune 2000 companies. The company’s goals include reaching $100 million in revenue within the next five years and expanding its employee base to create the most diverse workforce in the insurance industry.

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A BRIEF HISTORY OF PROTECDIV

January 2020

Protecdiv is launched by CEO Kael Coleman and COO Paul Little

May 2020

Protecdiv forms a strategic partnership with national independent broker Cobbs Allen and its CAC Specialty offshoot

July 2020

Protecdiv announces a strategic relationship with global specialist reinsurance broker BMS Group

“We have the expertise, the market access to deliver solutions and a history as individuals of being particularly innovative” than the more established brokers.

IBA: How did your strategic partnership with Cobbs Allen and CAC Specialty come about, and what benefits have you seen from it? KC: We were looking for a partner who could expand our reach and bring expertise in industries or lines of business to help grow

our expertise, but also bring a great servicing capability. We are building more of our own servicing capability, but we are also conscious that we are a new company, and many of the types of business we place do have some tail to them. What we found about Cobbs Allen and CAC Specialty is that even though Cobbs Allen is 130-year-old firm, they’re very inno-

vative and forward-thinking – they’re always trying to bring new things to their clients and new things to market – so we felt that our energies were well aligned and that the things we were trying to do to create something new, be dynamic and use technology dovetailed very well with what they were trying to do. CAC Specialty is a great example of starting something new and making some significant investments, so they are the best possible partner for us.

IBA: What’s ahead for Protecdiv for the rest of 2020 and beyond? KC: We think that we are very likely to grow at least to what our projected path was over the next couple of years. We’re very excited about continuing to hire [and are] looking to build out more of our internal expertise. [We’re also] looking forward to leveraging the partnership with Cobbs Allen and CAC Specialty to drive new revenue for both of us, but most importantly, new solutions for clients.

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PEOPLE

OTHER LIFE

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

Davis used Betty Edwards’ book, Drawing on the Right Side of the Brain, to teach herself to paint

12

Years since Davis first took up painting

100

Approximate number of paintings Davis has completed

60+

Hours Davis spent on her most time-consuming painting to date

ARTIST IN RESIDENCE For insurance executive Pamela Davis, expressing herself on canvas has been an act of healing PAMELA DAVIS didn’t start painting until she was in her mid-50s. Davis, the founder, president and CEO of Nonprofits Insurance Alliance, had recently lost a significant relationship and found herself with a lot of time on her hands. “An acquaintance with a serious intuitive side suggested I begin painting,” she

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says. “I had no experience with art but was sufficiently intrigued by her insight to give it a try. In the grueling process of teaching myself to paint, I learned far more about myself than I will ever know about art.” Davis specializes in portraits; her favorite subjects are children. But even after painting around a hundred works of

art, Davis has never once considered turning her hobby into a source of income. “I never sell my paintings,” she says. “I enjoy doing them for people who typically would not consider purchasing artwork. The look on their faces when they see a completed portrait of a loved one is all the compensation I need or want.”

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Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com. Follow us at bigdoghq.com.

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