IBAMAG.COM ISSUE 9.02 | $12.95
DIVERSITY AND INCLUSION Where the insurance industry is succeeding – and where it still needs to do better A NEW LINE ON CLIMATE CHANGE
How will the Biden administration’s climate policies impact insurers?
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ENVIRONMENTAL INSURANCE
COVID-19’s effects on the sector, from vacant office risks to virus-related exclusions
DECLARATION OF INDEPENDENCE
How staying independent has helped one agency keep clients front and center
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ISSUE 9.02
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CONTENTS
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UPFRONT 02 Editorial a
l
E
nv
ir o n m e nt
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SPECIAL REPORT
5-STAR ENVIRONMENTAL INSURERS
FEATURES
18
Brokers name the insurers providing the best policies, claims service and expertise in the environmental sector
38
PEOPLE
INDUSTRY ICON
As head of the Travelers Institute, Joan Woodward is leading the charge to help businesses recover from the COVID-19 pandemic
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04 Statistics
Key data that should be on your radar this month
06 News analysis
The Biden administration’s tougher stance on climate change could bring changes to the insurance industry
08 Intelligence
This month’s big movers, shakers and new products
10 Workers’ comp update
How the temporary staffing sector has been affected by COVID-19
12 Technology update
The case for making the claims payment process digital
17 Opinion
ALL TOGETHER NOW
Insurance saw a greater push for diversity and inclusion in 2020. IBA explores where companies are making headway and where they’re missing the mark
Is requiring employees to get vaccinated worth the risks?
FEATURES
AWAY FROM THE OFFICE
The risks of vacant offices and other concerns the COVID-19 pandemic has brought up for environmental insurers
42
If auto insurers can’t deliver a personalized customer experience, they could soon become obsolete
FEATURES 44 The fight for visibility
Four ways to make your online presence known
46 When to go for good enough How to stop wasting time on the fruitless pursuit of perfection
PEOPLE 48 Other life
FEATURES
THE BEST OF BOTH WORLDS
Chris Illman details how Robertson Ryan & Associates found success by letting independent agents stay independent
In the dog house with Hudson Kolk, the four-legged ‘office manager’ of Colorado Springs’ Brightway Insurance Agency
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UPFRONT
EDITORIAL
The vaccination conundrum
S
hots in arms – that’s the major goal of 2021. On his second day in the Oval Office, President Biden signed 10 orders aimed at kickstarting a national COVID-19 strategy. Among them was a directive to expand COVID-19 testing and vaccine availability nationwide, with a target of completing 100 million vaccinations in his first 100 days in office. The goal of this vaccination strategy, according to Dr. Anthony Fauci, chief medical advisor to the Biden administration, is to achieve herd immunity by the fall of 2021, which would require vaccinating as many as 280 million Americans. But what role do employers have to play in achieving this goal? The question of the hour is whether employers should make COVID-19 vaccines mandatory before allowing people back into the workplace. According to guidance issued by the Equal Employment Opportunity Commission, employers can legally require their employees to get vaccinated, but there are various laws they need to comply with, including the Americans with Disabilities Act, Title VII of the 1964 Civil Rights Act, and the Genetic Information Nondiscrimination
The question of the hour is whether employers should make COVID-19 vaccines mandatory before allowing people back into the workplace Act. Employers who fail to acknowledge, understand and comply with those laws, no matter how well-intentioned they are in mandating vaccination, could easily find themselves embroiled in a nasty discrimination suit and having to dip into their employment practices liability insurance. The jury’s still out on whether employers will actually start mandating COVID-19 vaccination. Aside from the legal complexities and the ongoing challenges around vaccine availability and distribution, employers are also contending with a large number of Americans who either don’t want to get vaccinated or can’t be vaccinated for medical or religious reasons. Furthermore, there are still unknowns around potential adverse side effects of the coronavirus vaccines. Employers that mandate shots in arms could be at risk of workers’ compensation claims if their employees are harmed by the vaccine. There’s a lot of risk for employers to weigh. While everyone wants to get back to normal as soon as possible, employers could take on considerable liability if they mandate COVID-19 vaccinations too soon. But if the US is to achieve herd immunity by the fall of 2021, employers will undoubtedly have a role to play.
The team at Insurance Business America
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Despite the challenging climate of 2020, Insurance Business is proud to have been the voice of a community that has continued to prosper, innovate and showcase its dedication to keeping the insurance sector thriving. Be sure to join us at:
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Through this event, I get to hear women working in different functions in insurance, their view about the work environment and changes in the industry. I don’t think it would be possible to meet so many talented women in insurance all in one room in any other event.
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T E X A S
I thought this was much more productive than the in person conference. More people can attend and choose which topics they want to listen to. - Sophie Diaz, Underwriting Specialist, CNA Insurance
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UPFRONT
STATISTICS NATURAL DISASTER LOSSES AT A GLANCE
COSTLIEST NATURAL DISASTERS IN THE US IN 2020
WESTERN US WILDFIRES $16 BILLION total losses
$11 BILLION insured losses
$119 billion
Total economic losses in the US in 2020 due to natural disasters (48% above the 20-year average)
US BEARS THE BRUNT OF 2020 CATASTROPHE LOSSES
$73 billion
Total insured losses due to natural disasters in 2020 (82% above the 20-year average)
62%
Proportion of 2020 natural disaster losses covered by insurance in the US
In a year when the world was ravaged by the COVID-19 pandemic, the United States also suffered major natural catastrophe losses. According to Munich Re, six of the 10 costliest natural disasters of 2020 occurred in the US. That was due in part to a hyperactive North Atlantic hurricane season that saw a record high of 30 storms, 13 of which were classified as hurricanes. A total of 12 tropical cyclones made landfall in the US – another record-breaker. All told, the 2020 hurricane season resulted in $43 billion worth of losses in the US, only $26 billion of which was insured.
INDEPENDENT US AGENCIES LAGGING IN DIGITAL STRATEGY Independent insurance agencies in the US are less likely to have a digital strategy than their counterparts in Canada and the UK, according to a recent study by Applied Systems. Less than half of US agencies said they currently have a digital strategy, although 88% said they plan to implement one within the next five years.
INDEPENDENT INSURANCE AGENCIES THAT HAVE A DIGITAL STRATEGY Have
14%
20%
76%
The United States’ share of global insured losses due to 2020 natural disasters Source: Aon Weather, Climate & Catastrophe Insight: 2020 Annual Report
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US 33%
Don’t have
47% 22%
Unsure
13%
CANADA
24% UK
64%
35%
53%
IRELAND
41%
34% Source: 2020 Digital Agency Annual Report, Applied Systems
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THE WORLD’S BIGGEST RISKS FOR 2021
SEVERE CONVECTIVE STORMS $12.6 BILLION total losses
$8.3 BILLION
Unsurprisingly, infectious diseases topped the World Economic Forum’s list of the most impactful risks facing the globe in 2021. Environmental risks also dominated this year’s list, thanks to their impact on societies and the likelihood they will occur.
insured losses
HURRICANE ISAIAS HURRICANE SALLY $16 BILLION total losses
$4.8 BILLION total losses
$3.5 BILLION
$2.7 BILLION insured losses
TOP 5 RISKS BY IMPACT 1 Infectious diseases
insured losses
2 Climate action failure 3 Weapons of mass destruction
HURRICANE LAURA
4 Biodiversity loss $18 BILLION total losses
$10 BILLION
5 Natural resource crises
insured losses
TOP 5 RISKS BY LIKELIHOOD
HURRICANE ETA $8.3 BILLION total losses
1 Extreme weather 2 Climate action failure
$700 MILLION insured losses
3 Human environmental damage 4 Infectious diseases 5 Biodiversity loss
Sources: Weather, Climate & Catastrophe Insight: 2020 Annual Report, Aon; Munich Re
BROKERS PLAN TO UPGRADE DIGITAL DISTRIBUTION Now that customers are more reliant on technology, many insurance brokers are looking to boost their digital distribution capabilities in 2021. A recent survey by Corvus Insurance found that more than 90% of respondents planned to invest in some form of digital upgrade in 2021.
DIGITAL DISTRIBUTION STRATEGIES BROKERS PLAN TO IMPROVE OR LAUNCH IN 2021 40% 30% 20% 10% 0%
Quote Insured- Integrate with Incorporate generation facing distribution carriers platform quoting tools partners’ via API journey
All of the above
Other
None of the above
Source: Three Ways to Meet the Future of Insurance Distribution in 2021, Corvus Insurance
Source: Global Risks Report 2021, World Economic Forum
BUSINESS INTEREST IN TELEMATICS GROWING Most middle-market fleet owners are open to the idea of using telematics to help monitor their fleets, according to a Nationwide survey. This presents a key opportunity for agents to help their commercial auto clients promote safer driving habits.
86%
93%
of middle-market fleet owners are aware of telematics solutions
of fleet owners say they’d pay for a telematics solution to ensure a safer driving experience
88%
90%
of fleet owners say they trust their agent’s advice on telematics
of fleet owners believe the benefits of telematics outweigh the costs Source: Insurance Agent Authority Survey, Nationwide
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UPFRONT
NEWS ANALYSIS
A climactic moment The Biden administration’s stronger stance on combating climate change, combined with a growing wave of environmental activism, will likely have a major impact on the insurance industry
AS OF January 20, the United States has a new president and a new position on climate change, which experts say will have meaningful impacts for insurers over the next four years. The Biden administration’s plan for tackling environmental issues includes goals like ensuring the US achieves a 100% clean energy economy and reaches net-zero emissions by 2050. It also calls for rallying around climate change on a global scale, in part by recommitting the US to the Paris Agreement, which former President Donald Trump withdrew the country from in 2017. Biden’s position comes at a critical point in time, when damages from natural catastro-
nies, in addition to an increase in claims stemming from the indirect effects of climate change. The major wildfires and hurricanes that have hit the US in recent years, for instance, have driven a spike in litigation, according to Emma Ager, partner at Clyde & Co. Combined with Biden’s likely tougher stance on environmental regulations, insureds are likely to find themselves in the legal bullseye more often. “I can only really see an increased activity on the part of legislature, effectively increasing the litigation against oil majors and other entities,” Ager says. “The more regulation there is, the more likely there are
“The more regulation there is, the more likely there are to be activists and other concerned citizens bringing [climate-related] lawsuits” Emma Ager, Clyde & Co. phes have grown increasingly more severe and frequent over the past decade, and climate activism (particularly among younger generations) has become the norm, rather than the exception. Already, the US has seen many climate change lawsuits filed against big oil compa-
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to be activists and other concerned citizens bringing these types of lawsuits.” In the meantime, Clyde & Co. is seeing a wave of activity in exclusions and endorsements as insurers and reinsurers re-evaluate what they intend to cover, with the aim of creating more certainty around the climate
change issue and pricing risks accordingly. Additionally, given evolving climaterelated regulations and the growing choir of voices recognizing the urgency of addressing climate issues, “there has been a massive focus on investing in companies and industries that impact climate change,” Ager says. “I think it’s certainly something that all insurers are focused on at the moment [as they] consider how this will affect their investments going forward.” Insurers might also see the indirect effect of the Biden administration’s approach to climate change and the environment reflected in their claims, particularly if new policies lend support to theories of climate change liability that might hold commercial insureds responsible for climate impacts. Such a development could affect insurers even if their policies seem ironclad. “The vast majority of insurance policies that aren’t focused on pollution coverage itself would have exclusions that would preclude coverage under the policies,” says Mark Leimkuhler, partner at Lewis Baach Kaufmann
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CLIMATE CHANGE FALLOUT
Natural catastrophes caused $76 billion worth of global insured losses in 2020, up 40% from 2019’s $54 billion
The primary culprits were secondary peril events, such as wildfires in the US
A record number of severe convective storms caused devastation in the US throughout 2020, likely leading to record annual losses for the peril
Middlemiss. Nonetheless, he says, “that doesn’t stop policyholders and their counsel from coming up with novel and creative ways to try to shoehorn pollution claims into the scope of coverage.” That’s also true in the more traditional area of environmental policymaking and
not created parity, or where people might be moving away due to pollution that’s gone unaddressed by the government in the past, Leimkuhler says. Biden’s environmental plan says his administration will “hold corporate polluters responsible for rampant pollution that
“The fact that there are exclusions doesn’t mean that policyholders won’t try to find some way to argue that they don’t fall within those exclusions” Mark Leimkuhler, Lewis Baach Kaufmann Middlemiss enforcement, which Biden is expected to be more focused on during his term than the previous president. Specifically, Biden’s focus on environmental justice could be impactful for insurers. This type of justice centers around communities where there might be a perception that enforcement activities have
creates the types of underlying conditions that are contributing to the disproportionate rates of illness, hospitalization and death from COVID-19 among Black, Latino and Native Americans.” The plan also argues that any effective energy and environmental policy needs to advance public health and
Losses from secondary peril events are forecast to increase due to the effects of climate change Source: Swiss Re Institute
economic opportunity for all Americans, whether they live in rural, urban or suburban communities, and highlights that “communities of color and low-income communities have faced disproportionate harm from climate change and environmental contaminants for decades.” This approach, Leimkuhler says, “may have an impact on claims activity, and depending on what the arguments are, in terms of the timing of the alleged contamination that might have occurred in those areas, you could see claims activities against policies over a significant period of time.” However, he points out again that “the fact that there are exclusions for coverage doesn’t mean that policyholders won’t try to find some way to argue that they don’t fall within those exclusions.”
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UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
Alera Group
CSNW Benefits
CSNW focuses on employee benefits for the manufacturing and nonprofit sectors
Alliant
One Source Risk Management
One Source is a broker of credit and political risk insurance with offices in the US and Canada
Applied Systems
EZLynx
The addition of EZLynx’s agency management system will give Applied users an expanded choice of systems
HUB International
Commercial Insurance Brokers, Eagle American Insurance Agency, Preferred Benefits Services Agency
HUB kicked off the year by scooping up three agencies that provide commercial and personal insurance and employee benefits solutions
Porch Group
Homeowners of America
Software and services provider Porch Group has purchased HOA and its subsidiaries for $100 million
Purmort & Martin
Jeff DeJongh and Associates
The acquisition expands Purmort & Martin’s footprint in its home market of Sarasota, Florida
TowerBrook Capital, Further Global Capital
ProSight Global
The investment firm and private equity firm paid $586 million for specialty insurance provider ProSight
USI Insurance Services
CB Insurance
One of the largest brokerages in Colorado, CB Insurance has been in business for more than 100 years
ORX creates cyber risk management service
ORX, the world’s largest association of operational risk professionals, has launched ORX Cyber, a service that helps risk professionals manage and measure the risk of cyberattacks. Based on a pilot program ORX has run since 2019, ORX Cyber offers a central hub for cyber risk management professionals to collaborate and exchange ideas. “Despite the progress the industry has made in this area, each institution still manages cyber risk differently,” said ORX Cyber head Steve Bishop. “ORX Cyber is designed to break down barriers which currently impede effective data collection and benchmarking.”
USI snaps up 100-year-old Colorado brokerage
USI Insurance Services has acquired Colorado-based CB Insurance, one of the largest insurance brokerages in the state, with offices in Denver and Colorado Springs. Under the leadership of president Steve Schneider, CB Insurance specializes in commercial and personal risk insurance programs and has served the state for more than a century. “We are thrilled to welcome Steve and the talented professionals from CB Insurance to the USI family,” said Donald Woods, regional CEO at USI. “Partnering as one, we look forward to strengthening USI’s commercial and personal risk expertise to our current and future clients throughout Colorado and beyond.”
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AXA XL launches tailored builder’s risk programs
AXA XL’s North American construction unit has rolled out tailored builder’s risk insurance programs for projects that incorporate mass timber, a group of engineered wood products that’s gaining popularity in North America. “The insurance industry has long been wary of the risks of wood construction,” said AXA XL’s Joe Vierling. “Fortunately, given our clients’ attention to risk management and the growing availability of technology that can help monitor buildings during construction, we’re confident we can successfully extend capacity to cover carefully managed mass timber construction risks.”
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PEOPLE Aon rolls out fuel insurance for shipping, aviation sectors
Aon has launched a new fuel insurance product designed to protect shipping and aviation companies from rising fuel costs and help them weather significant price spikes. The coverage, backed by AAA-rated credit insurance, will be activated if the cost of fuel rises above an agreedupon limit. It will cover the difference between the agreed-upon price and the higher price, paid out monthly. Targeted to industries such as marine, aviation, construction and mining, the coverage is among the first of its kind commercially available in the sector, according to Aon.
Attune adds general and professional liability
Attune Insurance Services has partnered with Hiscox to introduce general liability and professional liability products to the Attune platform. The partnership adds more than 180 new classes and two admitted products; brokers with access to Attune’s platform will be able to quote and issue general and professional liability products, in addition to business owners’, workers’ compensation and commercial excess liability policies. Attune said it plans to continue adding products to the platform throughout the year, while also expanding its appetite and enhancing its customer experience.
Beazley enhances reputational risk offering
Beazley has upgraded its reputational risk insurance policy with AI-enabled tools to help policyholders control their corporate brand and reputation. Underwritten by the Beazley-led Custodian Consortium at Lloyd’s, the policy includes crisis management services to minimize reputational damage and business interruption coverage to protect against a downturn in revenue. It now also includes a subscription to the Polecat Intelligence platform, which uses online and social data to assess an organization’s reputational and performance profile and benchmark its performance against competitors.
NAME
LEAVING
JOINING
NEW POSITION
John Black
CM Vantage Specialty
Applied Underwriters
Executive vice president, Applied Specialty Underwriters
Stewart Brown
N/A
CRC Group
Regional director, transportation binding division
Joe Clifford
N/A
RPS
Leader, self-insured workers’ comp, Michigan
Jeff DeJongh
Jeff DeJongh and Associates
Purmort & Martin
Vice president of sales
Peter Enns
HSBC
Chubb
Executive vice president of finance
Trevor Gandy
Amazon
Markel
Managing director, talent and D&I
Matt Heinz
Aon
Lockton
Partner, transaction liability practice
Allan J. Johnson
N/A
FM Global
Senior vice president and head of power generation
Seth Johnson
N/A
RT Specialty
President, national binding authority operations
Chet Rhoads
N/A
HUB International
President and CEO, HUB HDH
Pamela Rosado
MetLife
AXA XL
General counsel
Dana Popish Severinghaus
Allstate
Illinois Department of Insurance
Director
Olav Spiegel
Allianz
AGCS
Chief information officer
John Zern
Aon
Ryan Specialty Group
President and CEO, Ryan Specialty Benefits
Applied Underwriters taps EVP for expanded division
Applied Underwriters has named John Black executive vice president of the company’s newly expanded Applied Specialty Underwriters division, where he will focus on middle-market E&S casualty risks. An accomplished underwriter with more than 35 years of experience, Black previously served as chief underwriting officer of E&S insurer CM Vantage Specialty, which he co-founded. “We have seen Applied Specialty take off handsomely as the current market’s appetite for expertise and depth in this sector grows aggressively,” said Applied Underwriters CEO Steve Menzies. “With the naming of John Black … we are demonstrating our commitment to leadership in this market sector for agents and brokers.”
AXA XL gets new general counsel
AXA XL has appointed Pamela Rosado as general counsel to replace interim general counsel Anthony Recine, who will return to his previous position as global head of litigation for AXA Group. An AXA Group veteran, Rosado rejoins the company from MetLife, where she spent two years as SVP and chief counsel for litigation and special investigations. “I am delighted that Pam will be joining AXA XL, where she will take her place on my leadership team and will serve as a valuable member as we look to further simplify our operations, empower our regions in our new structure and deliver our earnings target,” said Scott Gunter, CEO of AXA XL.
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UPFRONT
WORKERS’ COMP UPDATE NEWS BRIEFS QBE North America offers ergonomics software
QBE North America has partnered with VelocityEHS, a provider of cloudbased environment, health, safety and sustainability solutions, to offer its Humantech Industrial Ergonomics software to QBE customers. Rather than relying on an in-person ergonomics expert, the software can analyze a video using artificial intelligence-based sensorless motion-capture technology to help employers recognize ergonomics issues in the workplace in real time, giving them the chance to mitigate ergonomics risks and reduce the potential for workers’ comp claims.
COVID-19 claims surge hits California WC system
The number of COVID-19 claims in California’s workers’ compensation system more than tripled between October and November, according to the California Workers’ Compensation Institute, which analyzed claims reported to the state Division of Workers’ Compensation (DWC) as of January 11. COVID-19 claims surged by another 64.2% in December, reaching a pending total of 23,483; the final total for December claims is projected to be as high as 37,573. Thanks to that late-year surge, the total number of COVID-19 claims reported to the DWC for accident year 2020 has reached 93,470, or 15.7% of all 2020 workers’ comp claims.
Origami Risk launches online tools for EHS professionals
Origami Risk has launched a suite of web-based and mobile solutions designed for environment, health and safety (EHS) professionals. The solutions support behavior-based safety
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observations, inspections and audits, as well as facilitate faster and more efficient incident data collection and investigations, loss analytics, regulatory reporting, and compliance. The suite also features intuitive dashboards and pre-configured online tools to help EHS professionals in various industries speed up enterprise-wide implementation of safety initiatives.
Victory Insurance expands MGA program nationwide
Workers’ comp carrier Victory insurance has leveraged Insurity’s Workers’ CompXPress solution to expand its MGA program to all 47 states that allow private workers’ comp carriers. Thanks to Workers’ CompXPress, Victory Insurance can now provide its carrier partners with a full suite of policy, billing and claims services and enable them to be up and running on its platform within 30 days. “Through the Insurity system, Victory Insurance is now able to offer carriers a virtually unrivaled speed to market,” said Keith Brownfield, CEO of Victory Insurance. “Carriers can enter a new workers’ comp market with minimal effort, maximum speed and marketleading effectiveness.”
Gallagher acquires Atlas General Insurance Services
Gallagher has acquired Atlas General Insurance Services, a San Diegobased multiline program manager and MGA offering workers’ compensation, commercial lines and specialty property programs nationwide. In particular, the firm specializes in the California workers’ compensation market. Following the acquisition, the Atlas team will remain in its current location under the direction of Joel Cavaness, president of Risk Placement Services, Gallagher’s USbased wholesale brokerage division.
Lasting effects for temporary workers The temporary staffing space hasn’t been immune to the effects of the pandemic, including lost revenue and new risks for workers One might presume that the temporary staffing sector escaped the worst of the COVID-19 pandemic – after all, temp workers come and go, so they might not be sticking around long enough to be affected by pandemic-related job instability. But just like any other industry, temporary staffing agencies were hit hard when COVID-19 reared its ugly head. According to Bill Nagel, executive director of PMC Insurance’s StaffPRO3 workers’ compensation program, the overall staffing industry – which includes temporary staffing – experienced a 17% reduction in total revenue last year. Data suggests that the pandemic was the primary factor in this drop, as temp jobs decreased by more than 30% between January and March 2020. Among staffing sectors, only life sciences grew during the pandemic, Nagel says, and it was only by 3%. He says life sciences and several other essential industries are expected to grow this year – though not without risk. “The healthcare industry had the highest need for temporary professional healthcare workers during 2020. That trend continues in January of 2021,” Nagel says. “The second highest need would be in the IT industry and
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the logistics industry, followed by manufacturing within ‘essential services’ products.” Temp workers with the highest risk of contracting COVID-19 include those in healthcare, followed by those in logistics and manufacturing, he says. He adds that first responders within all levels of government usually carry the highest level of risk, but government sectors typically don’t use a high number of temp workers.
“The risks to a temporary staffing employee are the same risks that any permanent employee would encounter” A major factor in determining a temporary worker’s level of risk for COVID-19 infection is how much time they spend at the client’s location, Nagel says. Nursing workers, for example, are at client locations more than 90% of the time, while industrial, logistics and manufacturing temp workers complete 95% of their assignments at the client location. By comparison, 80% of IT temp employees are able to work from home. “The risks to a temporary staffing employee in any sector would not necessarily be unique,” Nagel says. “They are the same risks that any permanent employee would encounter. The only possible additional risk is either at the interview site or if the client does not follow or apply best practices. In any event, the highest risk and need for worker protection would be focused on those working at client sites.”
Q&A
Brady Chan Vice president of claims operations APPLIED UNDERWRITERS
Years in the industry 18 Fast fact Chan has operated in nearly every capacity within Applied’s claims organization, including supervising adjusters and overseeing all operational aspects of claims
California claimin’ Applied Risk Services and its partner, California Insurance Company, were ranked by the State of California’s Workers’ Compensation Profile Audit Review as the top option for workers’ compensation in California in 2019. What’s the secret to your success? Applied Underwriters has built a claims organization with fully integrated, best-in-class support units, including medical networks, utilization review, quality assurance, ongoing claims processing training, and our Special Investigation Unit and subrogation services. Applied’s adjusters are constantly leveraging these units to immediately direct an injured worker to the best medical treatment, return them to work as soon as is safely possible and close the file. Our claims are strategically managed, rather than processed and reacted to, and this philosophy enables our adjusters to resolve claims quickly and with greater precision than most other carriers.
What’s unique about the workers’ comp market in California compared to other US states? The percentage of workers’ compensation cases with claimant legal representation is higher in California than in other jurisdictions. While this could prolong the life of cases and drive exposure, Applied has established in-house counsel to work alongside adjusters to manage these risks, defend against unnecessary claim expansion and resolve these exposures for the right price early, without the case fully developing. Other challenges include understanding intricate processes developed to manage disputes with payments, medical treatment, medical opinions and prescriptions. Our training programs and various internal support units provide targeted expertise to help our adjusters navigate this landscape and ensure cases progress and benefits are administered without delay.
COVID-19 has further complicated the way workers file claims and receive their benefits – how can insurers better handle claims during the pandemic? The most significant impact of the pandemic is injured workers experiencing more complicated access to doctors, treatment and diagnostic testing. Specifically, many elective surgeries have been postponed. Claimants and insurers must remain flexible to revise treatment plans and embrace telemedicine options. Failing to efficiently operate within this new virtual environment could possibly delay a claim’s process.
What industry trends are you anticipating for 2021? We expect the pandemic will continue to present disruptions to medical treatment and litigation calendars during 2021, which will require ongoing reliance on the virtual environment. Additionally, it is likely that the legalization of medical marijuana within more states will continue, and we will be closely monitoring how this is adopted within the workers’ compensation arena.
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UPFRONT
TECHNOLOGY UPDATE
Digitizing the claims payment process By making claims payments more efficient, insurers can win over those used to doing business online
“The traditional claim payment – a paper check sent by mail – no longer meets the expectations of many customers,” says Kelly Yates, vice president of claims at Topa Insurance. “Improvements in claims payment disbursement provide opportunities to improve the customer experience while also improving operational efficiency.” Yates adds that providing convenience to the customer while automating processes for the company’s claims professionals is “a win-win proposition.”
“The traditional claim payment no longer meets the expectations of many customers”
Claims payments are one of the most fundamental parts of the insurance agreement – and therefore an area that’s ripe for innovation to improve the customer experience. That’s exactly what Topa Insurance had in mind when it selected One Inc.’s ClaimsPay solution to enhance its outbound payment functionality. The ClaimsPay system will integrate with Topa’s existing internal systems to facilitate all outbound claims payment functions, streamlining
NEWS BRIEFS
the disbursement process and ultimately enhancing the customer experience. According to Denise Pavlov, senior vice president and COO at Topa Insurance, the company chose the ClaimsPay solution because the platform provides a full range of disbursement options, including mortgagee and lienholder payment capabilities. Pavlov says ClaimsPay was also the clear choice because it easily integrates with Topa’s claims management systems.
Sompo International partners with drone insurer
Sompo International has partnered with Flock, a UK-based insurtech that provides insurance for commercial drone operators, to increase the availability of insurance for emerging use cases such as drone cargo deliveries, flying taxis and drone swarm shows. The partnership will combine Sompo’s aviation and aerospace underwriting expertise with Flock’s realtime risk algorithms. Flock said it is also exploring how its proprietary technology could be used to reinvent insurance for other specialty lines.
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The COVID-19 pandemic has provided a renewed impetus for all insurers to improve their claims disbursement process, as sending a check to customers isn’t the most ideal payment method, given that it could increase the risk of someone contracting the deadly virus along the logistics line. Yates believes the pandemic will ultimately change the way claims payments are handled in the future, thanks to the push for nocontact transactions. “I anticipate carriers will leverage the experience of remote working during the pandemic to fully automate processes that formerly required an in-office presence,” he says.
Charles Taylor completes tech platform acquisition
Charles Taylor has acquired the remaining minority stake in Otak, a tech provider specializing in delegated authority solutions. The acquisition gives Charles Taylor full ownership of Otak, as well as Tide, its cloud-based data streamlining product, which powers Charles Taylor InsureTech’s Delegated Data Manager product. Tide automates the handling of delegated authority information to help the global insurance market reduce compliance costs, improve data integrity and make data-driven decisions.
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Q&A
Jason Liu CEO ZYWAVE
Years in the industry 3 Fast fact Liu has spent the past 25 years leading high-growth software companies across the globe
Preparing agencies for the challenges of 2021 A new year is upon us, yet much of the industry remains hamstrung by the pandemic. Which issues from 2020 are a concern for insurance agencies this year? While over the past several years, the insurance industry has been in the process of becoming more digitized, the pandemic has accelerated the necessity for a better digital experience, both for agency employees and for their clients. Without a doubt, relationships will forever remain important in our industry, but in 2021 and beyond, insurance agencies will need to innovate, automate, streamline processes, adopt new technologies and leverage data to drive growth. The digital transformation is here – and there’s no going back.
Despite the uncertain economic landscape, data remains a powerful tool for insurers. What are some easy ways for insurance agencies to leverage data in their operations? With the right data, the possibilities are endless. One way in which data should absolutely be leveraged is for lead gen and prospecting. Before even reaching out to a prospective client, insurance agencies can easily gather intelligence on property values, number of employees, prior compliance-related issues, risk profiles, incumbent broker and more. These insights can first be leveraged to help identify ideal prospects in their geographic area, but then also as a way to segment and engage those leads with well-informed, strategic communications.
Porch Group snaps up Homeowners of America
Software and services provider Porch Group has expanded its insurtech portfolio with a $100 million deal to purchase of Homeowners of America (HOA) and all of its subsidiaries. HOA is an insurance carrier/MGA that operates in six states and is licensed to write business in 31 states. It works with a network of more than 800 independent agency partners, which includes Porch’s own Elite Insurance Group agency. The acquisition furthers Porch Group’s efforts to become a one-stop platform for all things home services.
Do you see insurance agencies embracing a fully remote work operation or a completely digital storefront, even after the pandemic is over? What are the challenges in running such a business? It’s difficult to predict exactly what business will look like in the future, but regardless of where we’ll be working, how we’ll be working has been forever changed. The shift to a remote workforce has amplified inefficient processes and exposed areas for improvement in every organization, large and small. To keep our businesses running smoothly, automating, streamlining, and standardizing processes and procedures is essential. Identifying and leveraging the right tech tools and partners will be critical for success.
What sort of technology should insurance agencies be investing in this year? When evaluating tech, there are numerous considerations. The key is aligning your tech investment with your business goals. For example, if one of your main objectives is to work smarter and make more informed decisions, invest in data and analytics tools. If your focus is process improvement and increasing efficiency to fuel growth, consider quoting and proposal solutions. If your key metric is retaining your existing customers, take a look at ways to elevate the customer experience, whether that be through educational content or other resources like customer portals or a learning management system.
EZLynx to become part of Applied Systems
Applied Systems has forged a deal to acquire EZLynx, which it described as a “pioneer in real-time comparative rating.” Boasting one of the fastest growingagency management systems in the US, EZLynx will expand Applied’s portfolio and the choice of systems it offers. Applied CEO Taylor Rhodes said the acquisition “further demonstrates our commitment to providing technology choice for agencies of all sizes and increasing automation and connectivity between agencies and insurers to create a more valuable digital distribution channel.”
ACORD launches data exchange platform
ACORD Solutions Group, a subsidiary of insurance standard-setting body ACORD, has rolled out the ACORD Data Exchange Platform & Translator (ADEPT) to perform automated, realtime premium accounting reconciliation between insurers and brokers. ADEPT offers a secure, decentralized storage and access service that enables users to verify payment information. The platform is designed to reduce the time and cost of reconciliation by structuring, translating and validating data in real time.
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12/02/2021 3:25:53 am
PEOPLE
INDUSTRY ICON
CREATING A MORE RESILIENT WORLD Joan Woodward’s deep expertise in public policy made her the perfect executive to build out the Travelers Institute, and now she’s ushering the think tank into a new era OVER THE past 13 years, Joan Woodward has put her years of experience and leadership in public policy to work as she established and built up the Travelers Institute into the insurer’s thought leadership platform. When the coronavirus pandemic hit, Woodward took the Travelers Institute on a new journey by pivoting its offerings virtually into a new decade. Woodward’s success as president of the Travelers Institute and EVP of public policy at Travelers are due in part to the many years she spent in finance and government. She began her career on Capitol Hill, where she took a job as the chief economist on the House Budget Committee under chairman John Kasich. After five years, Woodward moved over to the US Senate, where she worked for Bill Roth for seven years as deputy chief of staff of the Senate Finance Committee and helped to create the Roth IRA. Together, these experiences gave her a critical foundation in public policy. “That 12-year period of foundational understanding of how government works, how policy is written and how bills become laws was a great way to start my career,” she says. In 2000, Woodward was tapped by Goldman Sachs to start the bank’s Washington equity and bond research operation, during which time she became recognized by investors as a top Washington analyst. Five years later, Henry Paulson, Goldman
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Sachs’ leader at the time, asked Woodward to become the founding executive director of the bank’s Global Markets Institute, a public policy think tank that would help regulators and policymakers around the world explore how efficient and transparent capital markets could support global economic growth and sustainability. Finally, in 2008, after years of traveling around the world in her various roles and raising four kids, Woodward was ready to find a position at a mostly domestic
GDP-driven economy. “Expertise for understanding risk management is embedded in each of our businesses, no matter what industry you’re in,” she says. “Every Fortune 2000 company has a risk manager who decides what opportunities and challenges the company wants to take on internally, versus outsourcing risk to an insurance product. It’s that underlying macroeconomic foundation and certainty that insurance provides that gives businesses the ability to be successful.”
“The Travelers Institute agenda is driven by what the businesses are seeing around corners and into the future, and how we can leverage and raise awareness of those issues for our customers” company. A lawyer on her team at Goldman Sachs had recently taken a job at Travelers and told her about the company’s dynamic CEO and vice chairman (and now CEO Alan Schnitzer), who were building a new thought leadership platform. That intrigued Woodward, as it sounded similar to her work at Goldman Sachs. She also recognized the importance of insurance in supporting a
Building amid a crisis Nonetheless, 2008 was not a particularly easy time to be building a new business. The effects of the global financial crisis on the US economy and beyond were taking hold, but luckily, Travelers had a historically conservative investment strategy, which gave it a leg up and helped it weather the financial storm. In fact, Travelers was added to the Dow 30 (replacing its former
PROFILE Name: Joan Woodward Title: President of the Travelers Institute and executive vice president of public policy Company: Travelers Based in: Washington, DC Years in the industry: 13 Company involvement: Member of Travelers’ management and operating committees; serves on the Diversity Council and the Travelers Foundation Board; chairs the Travelers Environmental, Social and Governance (ESG) Committee; and is the executive sponsor of the Military and Veterans Diversity Network
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PEOPLE
INDUSTRY ICON
parent, CitiGroup), in large part because its financial strength was a clear sign of the insurer’s stability amid the crisis. As she came onboard at Travelers, Woodward says she was welcomed with open arms by her new peers. She found that she was able to capitalize on and share her wealth of Washington policy knowledge with colleagues as she looked to establish the Travelers Institute. To begin the process, Woodward approached all of the business heads at the company and asked about the critical issues they were facing in their businesses, for which the new platform could create awareness and educational campaigns – a tradition that has guided the think tank’s programming to this day. Several of the Travelers Institute’s key
customers navigate emerging challenges. A major change to the agenda in 2020 was taking the 600-plus live events that the organization puts on annually – which had been hosted by universities like Harvard, government agencies like the FBI, think tanks like the Gates Foundation and public bodies like the City of New York – and turn them into virtual events that have been just as successful and insightful for attendees. “We’ve talked to [everyone from] former FDA Commissioner Mark McClellan and the dean of Stanford University’s School of Medicine about the outlook for COVID vaccines to Mika Brzezinski about how to pivot your career in a pandemic,” Woodward says. The experiences Woodward has had over
“There’s a thirst out there for hearing what Travelers is thinking and what our risk managers are telling clients, and we’ve been able to bring that to life” initiatives focus on combating distracted driving, managing cyber risks and preparing for severe weather events, among others. “The Travelers Institute agenda is driven by what the businesses are seeing around corners and into the future, and how we can leverage and raise awareness of those issues for our customers,” Woodward says, adding that the agenda is always evolving. “When I landed at Travelers, we never thought we’d be taking on issues like autonomous vehicle regulation, for instance, so there’s never a dull moment.”
Learning to pivot In some ways, 2020 hearkens back to Woodward’s early days at Travelers, in terms of the degree of economic, political and social strife that businesses and individuals in the US are encountering due to COVID-19. The crisis has prompted the Travelers Institute to adapt its agenda to the new normal while continuing to help agents, brokers and
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the past 12 months have also shaped her as a leader in a few critical ways. “What I’ve learned as a leader is that people are resilient, and they want to contribute and be personally fulfilled in their work,” she says, noting that despite the move to remote work, people still want to stay connected. “There’s a thirst out there for hearing what Travelers is thinking and what our risk managers are telling clients, and we’ve been able to bring that to life.” Now that 2020 has given way to 2021, and with vaccines hopefully bringing relief from COVID-19 to societies around the world, the Travelers Institute is “going to do what we do best, which is to engage and provide thought leadership on topics that are critical, not just for the insurance industry, but for the economy more broadly,” Woodward says. “Through our agents and brokers, we’re attuned to customers’ needs … and we respond to their challenges, meeting them where they want to be met.”
THE TRAVELERS INSTITUTE BY THE NUMBERS
2009 Year the Travelers Institute was established
576 Educational programs it has executed across 10 public policy topics
326,000+ Participants the institute has directly engaged with
100+ Research/educational institutions it has collaborated with
50+ Government entities it has collaborated with, including hosting 15 events with Federal Reserve regional banks
UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email iba@keymedia.com
Making it personal Auto insurance is next in line for the personalization experience to help meet changing customer needs, writes Itay Bengad FROM NETFLIX to Amazon, personalized, customer-centric digital experiences are a defining aspect of the current age. Customers want to receive tailored information and suggestions to meet their needs in real time. Yet while many industries and businesses have realized the value of generating personalized experiences for their customers, the auto insurance industry is seemingly behind the pack. This has to do with several factors, including antiquated customer success management systems and complicated accident management processes. Another major problem for auto insurers is that they’re usually the last to know about an accident, leaving room for error and delays in the provision of adequate services and good customer experiences. According to a recent Dynata survey, 77% of consumers believe that insurance providers have a responsibility to leverage technology to shape and navigate their customer experience. The same survey found that the majority of drivers – nearly 64% – would switch auto insurance providers if their carrier offered more personalized technology, such as those that can facilitate lifesaving measures in the event of an accident. This is an opportunity for insurers to improve customer loyalty, satisfaction, retention, revenue and engagement, positioning themselves as trusted advisors who can provide personalized services at critical moments of need. According to SmarterHQ, 80% of customers said they are more likely to purchase a product or service from a brand
that provides personalized experiences, creating a unique leverage point for insurers to up their game. Meanwhile, insurers that do not address the personalization trend are likely to feel the impact on their business. The dramatic fall of major consumer brands like Sears, Kmart, Walgreens and Toys R Us can be attributed to a failure to adapt to the consumer demand for digital experiences and personalization, which is now inherent to success in the retail industry. Insurers are likely to experience a
the moment of need. However, artificial intelligence and automated analytics-based solutions such as accident detection and response (ADR) can help insurers meet the customer demand for personalization. ADR gives insurers the capability to inject long-term value into the policy life cycle, year after year, to meet their customers’ needs. First, ADR offers privacy – accident data is only transmitted when an accident occurs. This allows insurers to assist in the response from the moment an accident occurs. According to the Dynata survey, 78% of respondents would be willing to share data in the event of an accident to improve their overall experience. Second, after an accident, insurers can direct their policyholders to the nearest body shop or dispatch a towing service if the car is not fit to drive. ADR can also save lives by alerting first responders in cases with severe bodily injuries. And finally, with ADR, insurers can be the first to know about an accident and actively work to improve customer satisfaction from their engagement.
“For insurance companies, closing the personalization gap really comes down to understanding what their customers need most and providing it on the spot” similar trajectory if their digital personalization options don’t stack up and if they don’t start rethinking the importance of customer satisfaction for retention. For insurance companies, closing the personalization gap really comes down to understanding what their customers need most and providing it on the spot. Current solutions, such as usage-based insurance (UBI) models, are often considered surveillance devices, and customers rarely see meaningful value in them after receiving their underwriting quote. Limited adoption means limited access to accident data, which means insurers can’t be there for drivers in
Advanced AI technologies can help auto insurers provide customers with a guarantee that their personal data is safe and will only be used to meet their immediate needs, while also ensuring higher levels of brand loyalty and customer satisfaction and retention. At the end of the day, both auto insurers and customers benefit from proper information sharing – a win-win situation in an industry built around losses. Itay Bengad is co-founder and CEO of MDgo, a provider of accident detection and response (ADR) solutions.
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12/02/2021 3:26:55 am
FEATURES
DIVERSITY AND INCLUSION
ALL TOGETHER NOW IBA talks with diversity and inclusion leaders from across the industry to find out what’s working and what’s not in the drive to create more welcoming, inclusive workplaces
JANUARY 20 was a pivotal day for diversity and inclusion in the US. Kamala Harris was sworn in as vice president, becoming the first woman and person of color to hold the country’s second highest office. Meanwhile, President Biden has brought a new stance on D&I to the Oval Office with a mandate to help root out systemic racism and other forms of discrimination throughout society. For many, it was a welcome change after a tumultuous 2020. In addition to a global pandemic, the year brought police atrocities that sparked a vibrant Black Lives Matter movement across the country, underscoring the importance of D&I across society – especially in corporate America. It’s an area where the insurance industry is lagging: Only 12.4% of insurance professionals are Black, according to Standard & Poor’s, and a recent study from the Independent Insurance Agents found that only 2% of established insurance agencies have at least one Black principal. At a time when The Washington Post reports that 83% of Gen Zers strongly consider a company’s commitment to D&I when choosing a place to work, the industry has a clear mandate to up its D&I game. Not only do D&I initiatives help further integrate society, but studies have shown that a focus on D&I is linked to increased collaboration and profitability. Still, there’s much work to be done. IBA spoke with insurance professionals who specialize in D&I to get a better understanding of what’s working and what’s still needed.
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ABOUT THE SPONSOR Alliant Insurance Services is one of the nation’s leading distributors of diversified insurance products and services. We operate through a network of specialized national platforms and regional offices to offer our clients a comprehensive portfolio of solutions built on innovative thinking and personal service. The business of managing risk is getting more complex, and Alliant is meeting this complexity head-on – not with more layers of management, but with more creativity and agility. Alliant is changing the way our clients approach risk management and benefits so they can capitalize on new opportunities to grow and protect their organizations. Visit us at alliant.com.
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THE PARTICIPANTS Bonnie Sawdey Chief people officer Crawford & Company Bonnie Sawdey has more than 30 years of experience with Crawford & Company, where she’s responsible for all aspects of global human resources, including developing and executing people strategy, talent acquisition, talent management, employee relations, total rewards, human resources information systems, and learning and development. In addition, she is a key member of the global incident response team, which has played a pivotal role in helping Crawford navigate the pandemic while putting employees’ health and safety first. Tom Corbett Chairman and CEO Alliant Insurance Services Tom Corbett serves as chairman and CEO of Alliant Insurance Services and sits on the company’s board of directors. Corbett joined Alliant in 1977 as a producer and launched its Newport Beach-based public entity group. Prior to joining Alliant, he worked with Allendale Insurance in Los Angeles and spent three years as a loss prevention engineer at the Factory Mutual Engineering Association.
Carlton Maner CEO, US division; global property practice leader AXIS Insurance
In addition to overseeing AXIS’ US division and leading its global property practice, Carlton Maner is chair of the board for the WSIA Diversity Foundation. Maner joined AXIS in 2002 and previously served as president of its specialty lines division, with responsibility for property, casualty and marine underwriting on a global basis. Prior to joining AXIS, he was senior vice president of the Westchester Specialty division of ACE USA, where he managed the property underwriting portfolio and catastrophe management division. He has also held underwriting positions at The London Agency, Zurich Insurance, Home Insurance Company and Haas & Dodd.
Rebekah Ratliff President National African American Insurance Association – Atlanta chapter Rebekah Ratliff was a commercial insurance claims professional for 25 years and is currently a mediator and arbitrator with JAMS (Judicial Arbitration and Mediation Services), the largest private provider of alternative dispute resolution services in the world. Ratliff is also the president of the Atlanta chapter of the National African American Insurance Association (NAAIA) and serves in leadership roles for the American Bar Association and National Bar Association. She is a nationally sought-after presenter, panelist and lecturer in the insurance and legal industries.
Alexander Amonett Global leader of inclusion, diversity and colleague experience Marsh Alexander Amonett is responsible for the design, implementation and execution of Marsh’s global inclusion and diversity (I&D) strategy. As an executive consultant and business partner, Amonett aligns I&D to the business strategy and embeds culture, talent and marketplace strategies to leverage I&D globally and strengthen Marsh’s brand as an I&D leader. He has more than 10 years of experience in I&D and 17 years of experience in global program and project management, learning and development, employee experience, and client services.
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FEATURES
DIVERSITY AND INCLUSION
What progress has been made on D&I in the insurance industry, and where is more improvement needed?
THE RACIAL MAKEUP OF THE INSURANCE INDUSTRY, THEN AND NOW 2.7%
1.9% 4.0%
Rebekah Ratliff: We have seen an increase in conversations and initiatives focused around diversity, equity, inclusion and belonging. More colleagues are committed to stepping into the role of ally to lend their platform of privilege. There is still much work to do as we focus on the next generation of industry professionals. We must empower them and support them by making their skill sets known and their voices heard. Employee resource groups [ERGs] at companies are a great way to offer support that will ultimately increase recruitment and, more importantly, retention of diverse talent. Bonnie Sawdey: Employers within the industry have acknowledged that improvement is needed, and many organizations have made a commitment to focus on
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White
6.2%
9.0% 12.4%
2010 84.7%
Black Asian
2019 74.6%
Other (includes Native American, Alaska Native, Native Hawaiian or other Pacific Islanders)
Source: S&P Global
changing longstanding perceptions by adopting practices to attract diverse talent into their organizations. These organizations are looking for ways to create an inclusive culture where employees can be their authentic selves at work. Crawford, for example, collaborates with other businesses to share best practices for introducing and
implementing programs that support diversity, inclusion and equality. Carlton Maner: I think the fact that we’re talking about diversity and inclusion is progress in itself. It’s an important step to acknowledge that there is a need for change and that we’ve reached a point where company leaders are recognizing this not as
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an opportunity, but an imperative. I am really pleased to serve on the board of directors for the newly developed Wholesale & Specialty Insurance Association [WSIA] Diversity Foundation, which puts a formal structure around an industry-wide effort to move the needle in attracting and retaining diverse talent into the industry. The opportunities for improvement are vast, and they reach across race, ethnicity, sexual orientation and disabilities. Alexander Amonett: The violent videos, social and economic tensions, and political unrest we have seen over the last year have resulted in forced accountability and prioritization of inclusion and diversity [I&D] work that has been unprecedented to this point within the global insurance industry. The past year, however bittersweet, has brought all voices to the table, including executives, boards, colleagues and resource groups, to become more deliberate in the investment of time, resources and visibility to advance I&D. We are witnessing executives, many for the first time, embracing leadership accountability metrics and transparency, including tying compensation to the advancement of their businesses’ I&D goals. The development of behavioral competencies and inclusive leadership skills is becoming mandatory
and being embedded into performance evaluations, bonuses and CEO responsibilities. Sponsorships, mentorships and development programs designed specifically for marginalized groups have tripled. Advisory councils for diverse groups are becoming more prominent, with aims to consult on everything from policies, benefits, social impact investments and legislation that impact underrepresented demographics. With the growing global landscape of I&D work, the industry must invest in more resources dedicated to this space full-time. I&D leaders need open pathways to work across a business with dedicated face time with executives, talent leaders, HR, business and sales leaders, marketing, and finance. I&D leaders not only have to understand the scope
and scale of navigating a strategy through a complex organizational matrix, they also need to be subject-matter experts in an everevolving global diversity landscape. It is critical that organizations recognize that I&D requires personal accountability and skill-set building at all levels to be sustainable.
How might strong D&I initiatives help with talent recruitment, retention and development? BS: Organizations with strong D&I initiatives are better able to attract and retain top talent. It’s no secret that today’s workers value inclusion and initiatives like employee resource
“[The next generation] increasingly perceives it as a must for their colleagues to have diverse backgrounds, and they have a very good appreciation for the value of collaborating with people who may have a different perspective” Carlton Maner, AXIS Insurance
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FEATURES
DIVERSITY AND INCLUSION groups and unconscious bias training, which are essential tools that help businesses learn more about the different backgrounds and perspectives of their workforce. RR: If D&I initiatives are strategically genuine, there will be more attraction to industry opportunities. This will make recruitment more robust and retention more possible. Employees want to know that what they have to offer is valued. It is important to engage and listen to industry professionals who can offer recruitment and retention perspectives. The retention of diverse talent has been a challenge because of the ‘language’ barrier that exists in the recruitment of minorities
and also the absence of cultural sensitivity in corporate environments. The HBCU I.M.P.A.C.T. initiative is a portal for the attraction, engagement and employment of diverse candidates in the collegiate pool. Affinity relationships exist with industry trade associations to ensure mentoring and support for the next generation. CM: Our industry has an urgent need to develop young talent as a large segment of our industry professionals approach retirement age. The next generation that we are bringing into the wholesale, specialty and surplus lines segment expects a strong emphasis on diversity, equity and inclusion in the workplace. They increasingly perceive it as a must for
“Often, cultural competency is lacking in the corporate environment, which translates into a barrier in comprehension and progressive action” Rebekah Ratliff, NAAIA – Atlanta chapter
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THE BUSINESS CASE FOR D&I Higher representation of women in C-suite-level positions results in 34% greater returns for shareholders Organizations with aboveaverage gender diversity and levels of employee engagement outperform companies with below-average diversity and engagement by 46% to 58% Companies with higher-thanaverage diversity had 19% higher innovation revenues Companies with ‘twodimensional’ diversity (i.e. with leaders who exhibit at least three inherent and three acquired diversity traits) are 45% more likely to report that they had captured a larger portion of the market and 70% more likely to have entered into a new market in the past year Sources: Fast Company and the Harvard Business Review
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Standing Together Alliant honors Black History Month, February 1–28 Diversity and inclusion are not a byproduct of success, but a catalyst for it. As an organization defined by the strength of our people, we are committed to taking the important steps toward actionable Allyship and creating a workforce that reflects the diverse and dynamic communities where we do business. Powered by our dedication to collaboration and results, we stand together as a team of unique individuals bound by a collective commitment to delivering greatness in our business, our industry, and the world at large.
Join us and let’s make a difference together.
alliant.com
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FEATURES
DIVERSITY AND INCLUSION their colleagues to have diverse backgrounds, and they have a very good appreciation for the value of collaborating with people who may have a different perspective. People and ideas thrive in diverse teams, and we look forward to making that a part of our industry’s culture. Tom Corbett: Alliant has always been an organization that encourages employees to own their successes and to contribute directly to the success of our organization. By having a strong D&I program and initiatives, we can further attract and retain people who are entrepreneurial, forward-thinking and independent. We are proud that each of our team members has a unique story and perspective, and each story contributes to making Alliant a leader in our industry and in the communities where we live and work. Alliant sustains those stories by prioritizing diversity and inclusion throughout the entire talent cycle, increasing diversity of leadership, and enhancing diversity and inclusion awareness across the organization. This approach not only encourages creativity and ingenuity, but helps deliver the best possible results for our clients, employees and organization.
How can companies build D&I into their cultural fabric? AA: It boils down to the day-to-day decisions we make. Culture is owned by everyone. When we can help people to understand their own scope of influence, identify their own bias and be accountable for their own behaviors, true change can start to take place. It’s flipping the narrative from “What can my company do for me to make me feel included?” to “How can I help others feel included and safe?” CM: There are a lot of ways to attack this, but I think it’s critical that it’s multifaceted. It can’t just be top-down or driven just as a grassroots effort from the bottom up. To truly make it part of a company’s culture, it has to come from every direction, be part of every conversation, and it has to be non-negotiable at every level in every department. It’s also important for us to create a culture
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“At the heart of our D&I commitment is a dedication to doing more than simply recognizing the need for a more diverse and welcoming workplace. It’s about action” Tom Corbett, Alliant Insurance Services where the challenges that impact diversity, equity and inclusion are also part of the conversation. We must have dialogue where diverse populations have an opportunity to be open with their thoughts and where everyone at the table is ready to actively listen to build understanding and trust. RR: Companies will need to focus on the
inclusion piece of D&I in order to effect real change in the corporate landscape. Baked-in – or implicit – bias is an impediment to inclusion. It is important to seek feedback about company culture from minority employees in management or executive positions to understand how they see advances in D&I or lack of the same. A facilitator is a
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ment within the company, but by everyone working together to drive change and build a more diverse and inclusive workplace. Having a diverse and multi-talented workforce doesn’t just enrich our culture. It empowers us to deliver unique and creative solutions to the challenges we face and to serve our clients with empathy and respect. We are dedicated to promoting diversity and inclusion across our organization and throughout all levels of leadership through, among other things, training, awareness, mentorship, sponsorship and community service. And at the heart of our D&I commitment is a dedication to doing more than simply recognizing the need for a more diverse and welcoming workplace. It’s about action. We work diligently on a daily basis to reinforce that everyone has a unique background, belief and life experience, and when we come together, we’re stronger.
What are some common challenges relating to D&I implementation? BS: Common challenges include raising awareness of why it’s important, prioritizing where to start, resourcing to support initiatives and measuring progress. RR: One of the most common impedivaluable resource for such conversations so that someone is there to interpret what is really meant by what is said and can create a safe space. Often, cultural competency is lacking in the corporate environment, which translates into a barrier in comprehension and progressive action. BS: Employers must infuse diversity and inclusion into everything they do by focusing on three key areas – raising awareness, building core capabilities and changing the DNA of their culture. It’s also essential to devise a systematic way to track progress. TC: At Alliant, we believe that D&I can only be successful if it is a long-term, shared mission that is woven into the core values of our company. The weight and importance cannot be carried by individuals or a depart-
disproportionate. Structural racism is still a real factor in the corporate experience for minorities, and this reality is a hurdle for the implementation and execution of initiatives that move the needle forward. AA: When it comes to I&D, business has long been plagued by the ‘say/do’ gap between the values they express publicly and the impact of those values on real behavior and equality. Last summer, we saw many companies reaffirming that Black lives matter and their commitments to creating more diverse and inclusive workplaces in the wake of the killings of George Floyd, Breonna Taylor, Rayshard Brooks and Ahmaud Arbery. But we’ve seen such hopeful moments before. The history of civil rights and equality in America has been a long and frustrating cycle of promises to do better, followed by very little real or sustained action for change. Real change can be daunting – but if there was ever a time to act decisively, it is now, and I, for one, am encouraged by the actions I’m seeing from the industry. TC: One of the most critical focuses must be on education that informs action. That comes through the willingness to learn and do the work, having forthright conversations, being uncomfortable, providing resources to employees, and breaking down the barriers of conscious and unconscious bias. CM: It is easier to acknowledge the need
“Real change can be daunting – but if there was ever a time to act decisively, it is now, and I, for one, am encouraged by the actions I’m seeing from the industry” Alexander Amonett, Marsh ments to D&I implementation is the misunderstanding of what Black and brown candidates really need in inclusivity. Statistics indicate that there are so few C-suite executives to act as sponsors, the advancement opportunities of industry rising stars continue to decline or stagnate. Internal career opportunity considerations tend to be
for improved diversity and inclusion than it is to quantitatively measure the impact of implementation. We are all data analysts, and we like to connect numbers to actions. While there is a lot of available research that proves that D&I improves the bottom line in a number of ways, it takes time to get to a point to be able to connect those dots definitively.
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FEATURES
DIVERSITY AND INCLUSION
This is a human issue as well as a business issue, and we have to implement knowing that it’s the right thing to do, and the numbers will follow over time.
What are the business benefits of successful D&I initiatives? RR: Research shows that corporate environments that embrace D&I are more profitable. The richness of contributions people from different ethnicities, personal and professional cultures, skill sets, mindsets, and career experiences bring to their work environment is undeniable. A variety of perspectives and real-world views enables fresh ideas and relatability from the human experience that cannot be manufactured by only the few. BS: Research has proven that organizations that are successful in these efforts are more profitable and have better engagement. As examples, ethnically diverse companies outperform peers on profitability, according to McKinsey & Co., and the Harvard Business
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“Research has proven that organizations that are successful in [D&I] efforts are more profitable and have better engagement” Bonnie Sawdey, Crawford & Company Review found that employees who feel a greater sense of belonging are more engaged. Their research shows a 56% increase in job performance and a 75% reduction in sick days among employees who feel they belong. CM: Having a broader pool of backgrounds and experiences at a table facilitates more robust discussion and decision-making. That’s good for business. The world is becoming more diverse, and the insurance industry’s workforce has to reflect that for us to meet the needs of our customers. Cultivating a workplace where people feel valued and supported also enhances a team’s commitment to one another and our business, which is always ultimately going to be good for our industry. AA: Historically, the rationale for organi-
zational diversity and inclusion efforts focused on the legal and compliance justification, coupled with the moral imperative that “it’s the right thing to do.” More recently, however, the focus has shifted to the business case for diversity and inclusion, and the business case is clear. Numerous studies show that diversity is positively related to return on equity, financial performance and employee satisfaction, as well as innovation, creativity and knowledge formation, and patents. Evidence suggests that organizations interested in improving their financial performance, better leveraging their talent and increasing innovation need to make diversity and inclusion a priority. I would say, however, that profitability should not be the main driver for advancing
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I&D. Sure, economic gain or more innovative teams is a positive outcome, but having access to equitable opportunities is important in and of itself. An affirming organization where all humans feel like they can belong, contribute and thrive is the real win. TC: We recognize that all business is local and supported by the communities in which they operate. We are deeply committed to investing in our local communities and in the health and well-being of the people who live and work in each of them. We realize that our success is intertwined with the success of our communities, and we are passionate about helping these communities and their residents thrive. We also understand that Alliant is a global citizen, and we are dedicated to effecting positive change in both our industry and the world at large.
How has the D&I movement evolved in 2020 in light of COVID-19? How has the shift to remote work impacted the work of D&I-related employee resource groups? BS: I believe the pandemic has heightened the importance of the D&I movement and
accentuated the need for connectivity and inclusiveness within organizations. With many of us working remotely, employees can feel less engaged. It’s vital to be able to connect with them and also provide support as our employees deal with the mental and physical challenges associated with the ongoing pandemic. AA: We have seen an increase in both
DIVERSE TEAMS MAKE BETTER DECISIONS PROPORTION OF TIME A BETTER DECISION IS MADE 100%
80%
60%
40%
20%
0%
58%
73%
80%
87%
All male team
Gender-diverse team
Age- and genderdiverse team
Age-, gender- and geographically diverse team Source: Forbes
demand and participation in ERG programming. The weight of isolation, divisiveness and mental health has created an appetite for more engagement and education. Without the distraction of commutes or after-hours events, there has been a critical need to not only connect, but also a wanting to return to a culture stronger than where we left it. Marsh’s employee resource groups have been very thoughtful in taking advantage of the new demands by expanding members and ally bases and creating connection points with colleagues to their communities. RR: The year 2020 forced us to look at how badly we were failing with race ... the human race. The COVID-19 pandemic and issues derivative pulled the Band-Aid off the wound from slavery and other systemic atrocities still existing in the soul of America and around the globe. Decent human beings can no longer deny the disparate treatment endured by minorities across industries and the effects on our industry, which is intersectional. As a result, many minority organizations have benefited from the efforts in allyship by receiving support for the missions of ERGs and BRGs, with leaders in the industry stepping up and diving in to address solutions. The masks came on – and the covers came off.
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FEATURES
DIVERSITY AND INCLUSION CM: There are inherent challenges for D&I and other related employee initiatives that come with so many teams working remotely. We have also witnessed an increased willingness for people to really share and listen to one another over the last 10 months. This is an industry built on relationships, and the challenges of today require increased efforts around building new relationships and strengthening old relationships. We are making it through this crisis because of our ability to be solutions providers for our customers, while thinking internally about creating a more diverse and equitable work environment for the insurance industry.
There was a huge focus on racial inequality in the US during 2020, highlighted by the Black Lives Matter protests and other events. How has and should the industry respond to that? RR: The insurance industry is the bedrock of the financial services space. We are the risk managers and mitigators. Our industry is the stabilizer that enables all other industries. The Black Lives Matter movement and resulting outcries for justice and equity in the workplace and other places continue to shed light on what needs to be fixed in our employment system, our industry and the world around us. The insurance industry has roots in the London slave trade system – the time of reckoning has begun. I believe we are up to the challenge of facilitating the conversations that will turn the tide and open doors of opportunity for the next generation. It is incumbent upon all of us in the insurance and related legal community to do our part in driving the vehicles of gradual change, one avenue at a time. CM: None of these issues are new, but 2020 was a catalyst for a change in how we think about and respond to them. We reached a tipping point last year with a global health
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crisis and a series of events that spurred activism around racial inequality. Every industry has to respond to that. Our industry has perhaps been slower than others to act on the need to improve, but I think we are making progress. We have seen a number of large companies enhance the role of their D&I teams in their corporate structure, and we’re seeing great financial support for initiatives like the WSIA Diversity Foundation. I think it’s important for insurance carriers and distributors to respond with both an internal and industry-wide focus, moving the needle on diversity, equity and inclusion. We have to subscribe to the theory that a rising tide will float all boats. We are all in this together. BS: We need to continue pushing forward with efforts that increase diversity, build inclusive cultures and eliminate bias within our industry. Ideally, the work that we’ve started through collaborative discussions and industry-wide initiatives that focus on D&I will be key to providing support for our workforce as we navigate these turbulent times. AA: Racism is more than individual prejudice – it is embedded in everyday structures in the US and around the world, leading to
“To drive real change, organizations need to ask difficult, potentially uncomfortable questions of themselves and do more listening” Alexander Amonett, Marsh systemic inequities, including in education, employment, housing, health, wealth and justice. We must take a stand against all forms of racism, and this begins with addressing the structural inequities that enable it. The question is not just what we stand for; it is what we will do. To drive real change, organizations need to ask difficult, potentially uncomfortable questions of themselves and do more listening. They need to drive more workforce
representation by embedding practices, policies and programs that ensure equality of opportunity, experience and pay. They need to communicate goals internally and then hold themselves accountable for acting on them by sharing results with all employees. They should seize the opportunity to wield external influence in advancing equality with customers, supply chains, legislators and communities. And they need to speak boldly and honestly.
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In the wake of George Floyd’s death, Marsh & McLennan, for one, made eight commitments to action to combat systemic racism and create change within the company. Among them was the creation of a Race Advisory Council that advises senior leadership to ensure that diverse perspectives are considered in decision-making, especially decisions that affect colleagues. MMC also pledged to hire more Black colleagues and provide them with clear opportunities for career progression and promotion. It implemented mandatory training on unconscious bias, allyship and inclusive leadership for every leader and manager and committed $5 million over the next three years to support organizations that advocate for equity for the Black community. TC: The industry must become a better actionable ally and create a diverse and inclusive environment where all perspectives are heard, valued and respected. Companies need to cultivate an inclusive culture that encourages collaboration, flexibility and fairness so all employees can contribute to their full potential. A high-priority focus must be on equal opportunities, equality and access for people of color, and female representation in senior leadership and board positions. There is much work to be done.
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SPECIAL REPORT
5-STAR INSURERS: ENVIRONMENTAL
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ENVIRONMENTAL INSURANCE, also known as pollution insurance, goes beyond property and general liability policies to cover losses or damages resulting from pollutants. Typical losses can include everything from business interruption to property damage and bodily injury. In Willis Towers Watson’s recent Insurance Marketplace Realities report on the sector, environmental broking leader Brian McBride noted that an increase in mergers and acquisitions, along with rebounding construction activity following COVID-19 delays, could drive record environmental placements in 2021. “Incumbent markets will attempt to increase rates on their multi-year renewals,” McBride predicted, “but increased appetites from their competition will keep premiums in check for clients with excellent loss histories.” Other trends he foresees for 2021 include an expansion in underwriting capacity from E&S insurers that entered the retail environmental market in 2020. In addition, “clients facing hardening conditions in the property and excess casualty markets are strategically locking in multi-year operational environmental programs (i.e. two to five years, where available) to mitigate future market uncertainty,” McBride wrote. Jeff Slivka, president of RT Specialty, says the market has been rather stable, with the exception of environmental casualty products such as combined general liability/pollution legal liability, general liability/ contractor’s pollution liability and general liability/contractor’s pollution liability/pollution liability, which aligns with trends in the overall commercial insurance market. In general, rates continue to be stable or soft, depending on the environmental product. “Where there is tightening or ‘hardening’ is on coverage – specifically
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COVID/communicable disease coverage and per- and polyfluoroalkyl substances [PFAS] exclusions,” Slivka says. “Microbial matter continues to create headaches for many carriers, especially when trying to bifurcate the cost associated with remediating mold versus the cost to rid the moisture or water, as one usually exists because of the other.” In the case of COVID-19, “environmental insurance carriers continue to assess their current forms and future position relative to bacteria, viruses and communicable diseases in the wake of COVID-19,” McBride wrote, adding that “affirmative coverage for viruses, bacteria and disinfection costs have all but disappeared from site pollution forms.” Going forward, he predicts that “COVID-19 and communicable disease exclusions will be more common on contractor’s pollution liability forms, while mold and Legionella coverage remains available.” Meanwhile, he notes that “requests to modify project-specific policies for resuming construction activities are being countered with carriers worried about exposure to COVID-19 claims.” On the subject of claims, Willis Towers Watson is monitoring several trends for 2021. First, as the US EPA and other environmental agencies undergo groundwater cleanup guidance for PFAS and other “emerging chemicals of concern,” insureds are seeing more claim activity due to site investigations and third-party litigation. Willis Towers Watson also expects to see more claims for environmental quality issues as buildings and job sites reopen during the pandemic, as well as continued claim activity related to brownfield redevelopment. Slivka likewise expects a steady uptick in PFAS and mold claims in 2021 but says it remains to be seen what kind of impact COVID-19 will have on claims in the environmental insurance space.
WHAT’S MOST IMPORTANT TO BROKERS WHEN CHOOSING AN ENVIRONMENTAL INSURANCE POLICY? Very important
Important
Neutral
Unimportant
Very unimportant
Underwriting expertise
Flexibility/customization
Claims processing
Access to risk mitigation/evaluation partners
Competitive pricing
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20%
40%
60%
80%
100%
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SPECIAL REPORT
5-STAR INSURERS: ENVIRONMENTAL HOW WE CHOOSE THE BEST ‘Market-leading’ is a phrase many insurance companies like to use when describing their products. Now 15 companies can claim that title on the back of hard market research from the people who matter most: insurance brokers. To select the best environmental insurers for 2021, IBA enlisted some of the industry’s top experts. During a 15-week process, our research team conducted one-on-one interviews with specialist brokers and surveyed thousands more within IBA’s network to gain a keen understanding of what insurance professionals think of current market offerings. Brokers were first quizzed on what features they thought were most important in an environmental insurance policy and then asked how the insurers they dealt with rated on those attributes. Insurers were measured on the strength of their relationships with brokers, ability to handle claims, underwriting expertise and, most importantly, the strength of the individual products they provide.
NUMBER OF AWARD WINNERS BY CATEGORY Environmental impairment liability
Hazardous materials/waste 15
Contractor’s pollution liability
7
Claims processing 14
Environmental professional liability
13
Flexibility/customization 12
Product pollution
14
Underwriting expertise 11
Historical pollution
15
Access to risk mitigation/evaluation partners 10
Transportation pollution liability
13
Pricing 11
12
Storage tank liability 9
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ENVIRONMENTAL IMPAIRMENT LIABILITY The demand for environmental impairment liability (EIL) continues to grow due to multiple factors, according to RT Specialty’s Jeff Slivka, who notes that “coverage terms have been impacted in recent years by the types of risk and a combination of high-profile mold exposures, rising Legionella claims, natural disasters, site development claims, and the growing focus on emerging contaminants such as PFAS, as well as communicable disease or COVID-related claims.”
5-STAR AWARD WINNERS
The contractor’s pollution liability (CPL) market is currently quiet except for some discussions around COVID, according to Slivka. While CPL claims in 2020 included a few six- and seven-figure damage amounts, he says capacity remains strong, with individual carriers providing up to $50 million in per-occurrence/aggregate limits. He adds that rates are expected to remain aggressive for this low-frequency, high-severity line of coverage.
5-STAR AWARD WINNERS
Freberg Environmental
Allianz Insurance
Aspen Insurance
Great American Insurance Group
Aspen Insurance
The Hartford
Beacon Hill Associates
Ironshore
Beazley
Virtue Risk Partners
Berkley Environmental
Westchester
Crum & Forster
Zurich
Freberg Environmental
AXIS Capital Beacon Hill Associates Beazley Berkley Environmental Crum & Forster
ENVIRONMENTAL PROFESSIONAL LIABILITY The environmental professional liability market is currently stable, Slivka says, though insurers are paying attention to accounts with more design liability or exposures that surpass the market appetite for environmental coverage forms. In addition, he says, “a handful of carriers have come out with programs specific to firms [offering disinfection services associated with communicable diseases], providing affirmative coverage for COVID-related damages, in the past six months.”
5-STAR AWARD WINNERS Aspen Insurance AXA XL AXIS Capital
Great American Insurance Group The Hartford Ironshore
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CONTRACTOR’S POLLUTION LIABILITY
Allianz Insurance
AXA XL
AXIS Capital
Great American Insurance Group The Hartford Ironshore Virtue Risk Partners Westchester Zurich
PRODUCT POLLUTION Designed to cover injuries or damages caused by a certain product, product pollution insurance “is used to minimize gaps in coverage created by common exclusions in general liability policies,” says Michael Padula, head of US environmental at Aspen Insurance, adding that the coverage is not broadly available in the market. Slivka notes that “product pollution remains fairly static, with few carriers offering coverage. [It is] very restrictive on the types of products the marketplace will offer. [And I’m] hearing nothing on restrictions in capacity.”
5-STAR AWARD WINNERS Allianz Insurance Aspen Insurance AXIS Capital
Beazley
Virtue Risk Partners
Berkley Environmental
Crum & Forster
Westchester
Crum & Forster
Freberg Environmental
Zurich
Freberg Environmental
Great American Insurance Group The Hartford Ironshore Virtue Risk Partners Westchester
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5-STAR INSURERS: ENVIRONMENTAL HISTORICAL POLLUTION Historical pollution coverage – which guards against the delayed or longterm effects of environmental disasters – is currently facing increased underwriting scrutiny, according to RT Specialty’s Jeff Slivka. “Most carriers compartmentalize the coverage segments under these policies,” he says. “While the carrier may not be able to offer cleanup coverage, they still may be able to offer third-party bodily injury and/ or property damage for the same contaminant – at minimum, providing liability coverage, including defense, for insureds.”
5-STAR AWARD WINNERS Allianz Insurance Aspen Insurance AXIS Capital Beazley Berkley Environmental
Great American Insurance Group The Hartford Ironshore Virtue Risk Partners
Freberg Environmental
Transportation pollution liability covers potentially harmful substances and products during transit. In addition, policies can offer coverage for loading and unloading – frequent causes of accidental spills and exposures. Without transportation pollution liability, companies can face considerable financial exposure for cleanup charges and fines if a contaminant is spilled in transit.
5-STAR AWARD WINNERS Allianz Insurance Aspen Insurance AXIS Capital Berkley Environmental Crum & Forster Freberg Environmental
STORAGE TANK LIABILITY Storage tank liability can be “much like a life insurance policy, [in that] insurance for ‘advanced age’ storage tanks gets more expensive and harder to place as the storage tank system gets older,” says Aspen’s Michael Padula. “There are still markets considering these risks, but with more restrictive terms and conditions.” “Coverage is scarce for those owners of tanks that are over 30 years old,” Slivka adds. “Few options are available, and if it’s acquired, it could come with larger deductibles in the $100,000-plus range. It may be a better approach for those owners to strongly consider removing or replacing the tank altogether.”
5-STAR AWARD WINNERS
Aspen Insurance
Great American Insurance Group
Beazley
Crum & Forster
Westchester
Ironshore Virtue Risk Partners Westchester
5-STAR AWARD WINNERS Aspen Insurance
Virtue Risk Partners
The Hartford
Often referred to as disposal liability or non-owned disposal site (NODS) coverage, insurance for hazardous materials or waste “is incorporated into the overall pollution legal liability and contractor’s pollution liability products and is readily available from all carriers,” Slivka says. “[I] have not seen any trend in claims and anticipate no changes to this coverage.” Padula adds that “the environmental marketplace offers many products to provide protection for any segment of the hazardous materials commerce chain, with unique enhancements and coverage parts to provide broad and comprehensive environmental liability protection.”
Freberg Environmental
Berkley Environmental
Great American Insurance Group
HAZARDOUS MATERIALS/ WASTE
Allianz Insurance
Beacon Hill Associates
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TRANSPORTATION POLLUTION LIABILITY
Berkley Environmental
Great American Insurance Group Virtue Risk Partners
Crum & Forster Freberg Environmental
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CLAIMS, FLEXIBILITY, UNDERWRITING EXPERTISE, RISK MITIGATION AND PRICING In environmental insurance, the claims process provides an opportune time for insurers to assist and show their strength, says RT Specialty’s Jeff Slivka. Most environmental claims are fairly complex, from groundwater contamination claims that require a deep technical understanding of contaminants and their behavior, to the valuation of a water damage/mold claim, where all parties must put their heads together to determine what portions of the claim they are willing to pay. This sort of technical expertise is equally invaluable in other areas of environmental insurance, from underwriting to risk mitigation.
5-STAR AWARD WINNERS CLAIMS PROCESSING
FLEXIBILITY/ CUSTOMIZATION
UNDERWRITING EXPERTISE
Allianz Insurance
Allianz Insurance
Allianz Insurance
Aspen Insurance
Aspen Insurance
Aspen Insurance
AXA XL
AXA XL
AXA XL
AXIS Capital
AXIS Capital
Axis Capital
Beacon Hill Associates
Beazley
Beacon Hill Associates
Berkley Environmental
Berkley Environmental
Beazley
Crum & Forster
Crum & Forster
Berkley Environmental
Freberg Environmental
Freberg Environmental
Crum & Forster
Great American Insurance Group
Great American Insurance Group
Freberg Environmental
Ironshore
The Hartford
Great American Insurance Group
Virtue Risk Partners
Ironshore
The Hartford
Westchester
Virtue Risk Partners
Ironshore
Zurich
Westchester
Virtue Risk Partners
Zurich
Westchester Zurich
ACCESS TO RISK MITIGATION/ EVALUATION PARTNERS Allianz Insurance
Freberg Environmental
Aspen Insurance
Great American Insurance Group
AXA XL AXIS Capital Beazley Berkley Environmental Crum & Forster
PRICING Allianz Insurance
The Hartford
Aspen Insurance
Virtue Risk Partners
AXIS Capital
Westchester
Beazley
Zurich
Ironshore
Berkley Environmental
Virtue Risk Partners
Crum & Forster
Westchester
Freberg Environmental
Zurich
Great American Insurance Group
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SPECIAL REPORT
5-STAR INSURERS: ENVIRONMENTAL SUMMARY: 5-STAR AWARD WINNERS BY CATEGORY Insurer
Environmental impairment liability
Contractor's pollution liability
Environmental professional liability
Product pollution
Historical pollution
Transportation pollution liability
Allianz Insurance
Aspen Insurance
AXA XL
AXIS Capital
Beacon Hill Associates
Beazley
Berkley Environmental
Crum & Forster
Freberg Environmental
Great American Insurance Group
The Hartford
Ironshore
Virtue Risk Partners
Westchester
Zurich
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Storage tank liability
Hazardous materials/waste
Claims processing
Flexibility/ customization
Underwriting expertise
Access to risk mitigation/ evaluation partners
ir o n m e nt
Pricing
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FEATURES
SECTOR FOCUS: ENVIRONMENTAL
Away from the office IBA talks to environmental insurance experts about COVID-19’s impact on the sector, from the risks posed by vacant office buildings to a rise in communicable disease exclusions
KEY COMPONENTS OF ENVIRONMENTAL INSURANCE COVERAGE
Manufacturer’s product pollution
Contractor’s pollution liability
Environmental contractors and consultants
THE OFFICE has changed a lot over the past half century – from the 1970s, when indoor cigarette smoking and asbestos business interruption suits were the norm; to the 2000s, when corner offices and cubicle farms gave way to more open workspaces; to today, when the global COVID-19 pandemic has turned high rises into ghost towers as employees continue to work from home to help stop the spread of the virus. Things are so bad in New York City that New York Governor Andrew Cuomo has recommended turning unused properties into apartments. “We should convert vacant commercial space to supportive and affordable housing, and we should do it now,” he told the New York Post. COVID-19 and its attendant increase in office vacancies has also had a far-reaching impact on the environmental insurance coverage for office buildings. “The largest risk we are seeing from the COVID pandemic is that some of our policyholders are 1) going out of business or 2) reporting a reduction in revenue exposure base, leading to depression in gross written premiums,” says Canaan Crouch, a managing
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principal in charge of environmental placements for Landmark E&S Insurance Brokers, a Jencap Company. “Considering that it is difficult to directly tie the operations of an insured to the contraction of COVID, the environmental carriers are relatively positive on the COVID pandemic. That said, there is a pervasive ‘wait and see’ approach to offering coverage from COVID, as there are no carrier managers seeking to be the first to blow up a book from COVID claims.” The commercial real estate market is in for tough times ahead due to the pandemic – a report in the Houston Chronicle estimated that $126 billion worth of buildings could be sold at distressed prices through 2022. “The biggest problems we are seeing is that distressed property owners are trying to sell buildings, and this is triggering environmental site investigations,” says Jeffrey Hubbard, senior vice president, principal and national environmental practice leader at Brown & Riding. “Some of these investigations are being done on properties where policies are in place, but have voluntary site investigation exclusions due to past issues or questions, and this new round of site investigations is
Hazardous and non-hazardous waste haulers
Pollution legal liability
Storage tank liability Source: Landmark E&S Insurance Brokers
triggering the exclusions.” Then there’s the hospitality sector. When the pandemic started, Stacy Brown, president and CEO of Freberg Environmental, was worried about temporary business operation suspensions in the hospitality industry and began highly scrutinizing underwriting risks for hospitality clients. However, neither Crouch, Hubbard nor Brown is too concerned about risks related to mold or HVAC problems in vacant buildings. Crouch and Brown say they’ve seen zero claims in this area, and Hubbard says
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FEATURES
SECTOR FOCUS: ENVIRONMENTAL
maintenance personnel are on top of water leaks or HVAC temperature settings that could lead to problems such as mold. “The only meaningful difference we are seeing is the timeframe in which a leak might be identified,” Hubbard says. “Instead of it being identified the same day or 12 hours after commencement, it’s 24 hours or 36 hours.”
“Every client would like their policy amended to give an affirmative grant for COVID business interruption and cleanup, but that is simply not available”Jeffrey Hubbard, Brown & Riding
Communicable disease exclusions Since the onset of COVID-19, the environ mental insurance industry has experienced a secular softening of rates, with important modifications in site pollution coverage and contractor’s pollution liability (CPL), Crouch says. Communicable disease exclusions (CDX) are standard on all site pollution policies, a
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trend that started with the SARS and MERS pandemics. However, on CPL policies, the COVID-19 pandemic directly precipitated the use of CDX. “At Jencap, we had not seen the use of the CDX prior to the COVID pandemic,” Crouch says, adding that CPL coverage
for decontamination firms targeting communicable diseases remains difficult to obtain. And for those who would like to change their coverage? “We have been successful in removing the CDX for certain insureds,” Crouch says. “However, carriers are not
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inclined to remove CDX for on-site-specific risks. And for contracting risks, it is possible to have the CDX removed, provided that an underwriter is able to assess their risk on that exposure.” He adds that underwriters like to see at least three years of experience in decontamination, among other things. “Every client would like their policy amended to give an affirmative grant for COVID business interruption and cleanup, but that is simply not available,” Hubbard says. “Other clients are asking for carrier waivers regarding their mold coverage that requires strict adherence to their water intrusion plans, for fear that the building might not have traffic or the event could go unnoticed if it is a large facility.”
reported that most carriers were willing to accommodate insureds, especially if their businesses were doing well. “Time will tell how the market changes due to COVID,” Brown says. “While many carriers clarified exclusions, a handful of markets moved to affirm coverage with very tight underwriting controls, deductibles and sublimits. While solutions to disinfect are fairly well defined and low-tech, offering site-specific pollution for habitational risks is still a difficult write for most markets. As the medical and science community better defines COVID exposure pathways, I believe more carriers will broaden virus coverage for very specific classes or circumstances, but that might take a few years.”
“As the medical and science community better defines COVID exposure pathways, I believe more carriers will broaden virus coverage for very specific classes or circumstances, but that might take a few years” Stacy Brown, Freberg Environmental Brown adds that “most environmental carriers responded to COVID by affirming virus exclusions in their policies, with a handful of carriers confirming coverage for certain classes with very tight underwriting. There have been many claim reports but few payouts and, so far, a lack of severity. Time will tell as COVID cases work their way through the courts.” Renee Miller, chief underwriting officer at Freberg Environmental, adds that at the start of the pandemic, the firm received requests to renegotiate premiums for commercial general liability policies and transition to more auditable approach instead of a flat arrangement. The company’s brokers
TIPS FOR RETURNING TO A HEALTHY OFFICE BUILDING Check for mold, rodents or issues with stagnant water systems and take remedial actions Ensure the ventilation system and HVAC system are operating properly Increase circulation of outdoor air by opening windows and doors and using fans Counter disease risks associated with water by ensuring water systems are safe to use Source: Centers for Disease Control and Prevention
Long-term effects Going forward, Crouch sees a silver lining in the COVID-19 cloud: an opportunity to expand market share, take on more exposure and charge a premium for that additional exposure. He warns that carriers still need more time to assess the effect of underwriting for the virus, but he sees COVID-19 coverage eventually becoming as commonplace on CPL policies as mold and Legionella. In the meantime, Hubbard says he’s seen one very simple change that carriers have made today that has likely made at least a temporary impact: “Carriers that were including virus within their definition of a pollutant have now removed it.”
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FEATURES
AGENCY INSIGHT
The best of both worlds Robertson Ryan & Associates CEO Chris Illman tells IBA how his agency’s focus on letting agents remain independent has helped it stand out in the industry and realize double-digit growth IBA: How does Robertson Ryan & Associates’ business model differ from other agencies? Chris Illman: We are a very unique agency. Our tagline is “We’re an agency for agents,” and we truly mean that because all of our agents are independent business owners, and they all own their books of business. The philosophy of that is, nobody cares more or takes better care of a client than an independent business agent who owns that client list. They can consult and advise small business owners with a passion that’s different because they are small business owners themselves. The other uniqueness of our model is that being an independent agency, we’re not beholden to M&A and quarterly returns – we put our clients first, and we’re longterm thinkers. Another differentiator is the fact that we share all of the profits of the firm, and everything else we do is shared across all our agents. We like to say that there’s no corner office getting wealthy off of our agents. We’re truly a collaborative collection of independent agents.
IBA: The agency has grown from 28 agents in 2001 to 115 in 2020. What has driven this growth? CI: In the last three to three and a half years,
in agent growth, revenue growth and profit growth. There was a bit of a slowdown with COVID, but we’re still growing nicely, and we feel that we’ll come out of this in 2021–22 back to our double-digit growth – that’s both organic growth and also what we call acquisitive growth for people who join us. We don’t buy agencies unnecessarily – we’re not an M&A shop. We grow through organic growth, and we grow through attracting highquality, successful agents who still want to be independent and own their own business, but want help from a large organization.
IBA: How have your key areas of focus – revenue drivers, technology, operational excellence and being a great place to work – contributed to the success of the agency? CI: A lot of industries are going through a huge digital change, as is the insurance agency distribution business, so we have put
a lot of money and resources into digitalization from a operational and sales perspective, [including] reaching current clients in more productive ways with more regular touchpoints and by conducting more of our business processes online. That’s also one of the reasons why we’re growing from agents who are joining us – typically, if you’re an insurance agent, digital expertise is not your expertise. You need help, both in taking care of your clients and also growing your business by touching new clients. The pandemic has certainly accelerated that area immensely, and that’s where we spend a lot of our energy and efforts, in helping our agents take care of their clients digitally. We have also done a good job through the pandemic in doing what’s right for our people. We’re a big organization – we have about 350 associates that are made up of agents and our employees – and we wanted to walk the talk and do what’s right by making sure they were
ABOUT ROBERTSON RYAN & ASSOCIATES Robertson Ryan & Associates was founded more than 60 years ago by A.D. Robertson and Jack T. Ryan with a unique model where each agent owns their book of business, which has made client service and satisfaction a key priority. Today, the agency offers solutions across business, personal and benefits insurance, assisting more than 40,000 clients in all industries. It has twice been named an Elite Agency by IBA.
we’ve been growing at a 15% to 20%-plus clip
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FAST FACTS : ROBERTSON RYAN & ASSOCIATES SPECIALTIES Property Auto Workers’ compensation Liability Crime Global risks Bonds Personal insurance Benefits
Year founded: 1960
“Nobody cares more or takes better care of a client than an independent business agent who owns that client list” safe, healthy and could take care of their families. We said, “If you still want to come into the office, that’s fine,” but we set people up very quickly for work flexibility. We invested a lot of money and time in making sure we could get everybody remote so that as they went through the pandemic, work wasn’t a stressor for them.
IBA: What’s coming down the pike for your agency in 2021? CI: You’re going to see our reach expanding out, because our value proposition is a national value proposition. We’re very
different, and our uniqueness is what is absolutely awesome because we sit between the big M&A folks within our industry – the Aons, the HUBs, the Gallaghers, the Marshes, who are gobbling people up – and the smaller-town agents that are independent. I like to say that we’re a big-small company – we’re nimble, we’re fast, but we’re maniacally focused on our agents taking care of our clients, and then Robertson Ryan as a firm takes care of everything else on behalf of the agents. All they need to do is take care of their clients every day and grow their business, so I think you’ll see that being even more of a
Headquarters: Milwaukee, Wisconsin Number of offices: 36 Leadership: Chris Illman, CEO; Gary Burton, COO; Brian Remsza, CFO; Allan Degner, VP of marketing; Dan Lau, VP of operations; Chris Mueller, VP of IT; Christine Rogers, SVP of customer service; Leann Jasinski, personal lines manager; Julie Kaczmarek, commercial lines manager; Amy Reilly, benefits team lead; Melissa Stauber, HR manager; Pat Wisniewski, controller focus, and you’ll see more growth coming out of the pandemic. As people get back to business, independent agents are going to be faced with the decision of, do they go it alone, do they sell out to a bigger aggregator, or do they join an organization like Robertson Ryan that offers the best of both worlds?
www.ibamag.com
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FEATURES
MARKETING
The fight for visibility It’s becoming more important for businesses to not only have an online presence, but also be seen above the rest. Nicola Moras explains how to win at being visible
THE FIGHT to be seen online, to be visible, has never been more fierce than it is now. Business owners especially have been somewhat forced to embrace the online world in their marketing and delivery of services. This has meant new learning for those owners who have relied on local area marketing in the past.
ensure that you have an audience to market to. It will mean you are able to have a consistent conversation with that audience, and they’ll be more likely to buy from you. What you need to determine is how to establish yourself as being different, as a business that can be trusted. There are far too many charlatans who have come out
When you assume the position of an industry leader before you even begin to dial up your visibility efforts, you’ll have more confidence to show up and do what needs to be done Shockingly for some, your potential customers and clients are spending more and more time online. In fact, recent data indicates that most of us will probably spend more than 100 days online this year. That’s almost a third of the year online. For businesses, this presents a great opportunity to carve out your patch of dirt on the internet and really own it. This will
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of the shadows and taken people for a ride. As a result, every customer’s BS detector is on heightened alert these days, and they’re a lot slower to trust. This begs the question: How do you create more visibility when everyone is wrestling for the click, the comment, the like and the share? Follow these four steps so you can win the visibility fight and soar.
1
Assume the position of industry leader
Confidence breeds confidence, and you know it. You’ve seen people online, and you’ve felt drawn to them. This is usually because someone who is confident in what they’re saying and sharing is magnetic. When you assume the position of an industry leader before you even begin to dial up your visibility efforts, everything else becomes easier to implement. You’ll have more confidence to show up and do what needs to be done.
www.ibamag.com
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everyone. You don’t need to appeal equally to the teens and the silver foxes, or to the coffee moms and corporate career chasers. The more specific you can be about who you want to be visible to, the easier it is to get on their radar. When you know exactly who your niche is, you can start to create content specifically for them. For instance, if you know your niche is a 35-year-old woman with two children who hates her body, your business might provide a total workout and meal plan solution that has her falling in love with her body postchildren, without feeling stressed and overwhelmed. Or if your niche is a 43-year-old man who now has time and wants to start a hobby making wooden rocking horses, but he’s having trouble knowing how to set up his workspace and equipment, you can create content for him specifically. When you know who your audience is, you’ll get results faster. They are likely to joke that you have cameras in their house. (Yes, this is a good thing. Just don’t go installing any cameras!) You’ll be inside their heads, and they’ll love this.
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2
Show what makes you different
This is not about your unique selling proposition. This is where you need to determine what makes you different as people. If you’re a solo entrepreneur, this is going to be pretty easy, because you are what makes you different than everyone else. For those of you with larger-than-you businesses, you and your team are what make you different. Take stock of your history, why you exist and the stories you interlace through all that
you do. It’s ever so important to share these online on your pages and websites. People are slow to trust these days, given the sheer volume of fraudsters, but when you start sharing your stories and what makes you different, it helps your audience see you as a company they can trust. This is because they start to see the human beings behind the logo.
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Own your niche When it comes to visibility online, you don’t need to be visible to
Be consistent and persistent
Visibility takes time, but when you are consistent with your efforts, it will pay off. Be aware that you have to play the long game, as well as the short game, for visibility growth. This is not dissimilar to joining a gym. You have to keep going to achieve results. Haphazard attendance will reap haphazard results. Create different types of content and share it multiple times daily. You’ll be visible in no time. Nicola Moras is an online visibility expert and the author of Into the Spotlight, a guide to help you step up your online visibility, become a rock star in your industry and make your business thrive.
www.ibamag.com
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FEATURES
LEADERSHIP
When to go for good enough In a culture focused on achievement, success and making things perfect, how can leaders know when striving for something better is a waste of time? Lynne Cazaly explains how to let go of perfection and embrace ‘good enough’
HOW OFTEN while working on a task or project have you thought, “It’s not done yet,” “It’s not good enough” or “I couldn’t share that … it has to be better”? We can feel it’s not good enough yet and believe there’s still work to be done to make it better, to make it perfect. Shouldn’t you try to do things perfectly? It turns out, no, not at all. Research by Argyro Avgoustaki and Hans Frankort, gathered from more than 50,000 people across 36 countries over a five-year period, showed that extra work effort was “associated with reduced wellbeing and inferior career-related outcomes.” Avgoustaki and Frankort’s research showed that the harder people worked, the more likely they were to report stress, lower satisfaction and inferior outcomes. Working too hard burns us out and doesn’t result in the success – career or otherwise – that we might expect. It sounds crazy, but their research found that doing less at work can actually help us achieve more. We can afford to spend less time on things thanks to two theories of activity. The law of
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diminishing returns (that our return on effort reduces over time) and the 80/20 rule or the Pareto principle (that just 20% of our efforts yield 80% of the results) are two approaches that validate the practice of going for good enough rather than the waste of perfection. Next time you’re working on a proposal or report or developing a new system or process, stay alert to your desire to pursue perfection. Good leadership starts with us modeling behaviors for others; here, it’s about knowing when good enough is good enough.
The rise of perfectionism The problem is perfectionism is on the increase. Research by psychologists Thomas Curran and Andrew Hill revealed three types of perfectionism:
Self-oriented (“I expect high standards of myself ”)
Societal (“I believe society expects high standards of me”)
Other-oriented (“I expect high standards of you”)
All three are on the rise, but societal perfectionism has increased the most, by 33% over the past couple of decades. Future projections don’t look good, either. The hitch with perfection is that it simply doesn’t exist, and pursuing it is a foolish and wasteful activity. If we find ourselves – or a team – staying back, taking work home or working on weekends in a devoted effort to make something better, it’s likely there’s a wasteful pursuit of perfection underway. The more contemporary preference is to go for ‘good enough’ or ‘ish’, which means near enough. The practice is to work on a
smaller piece or packet of work – an increment – and work until it’s good enough to get feedback, good enough to test it out with customers or clients, or good enough to try again and improve via a new iteration. It’s a process used successfully by lean startups, technology teams and software developers. Increments and iterations are the new perfect. They’re more effective in helping us make progress over perfection.
How to go for good enough There are four things you can do to set a course for good enough rather than the pointless pursuit of perfection.
than expecting perfection.
4
Assess whether ‘near enough’ is good enough
Check whether ‘ish’ might be feasible, doable or acceptable to the business more often. It’s a major productivity gain, and it’s more motivating for teams when they complete work. If you spot perfectionism behaviors or hear people being highly critical of themselves or others, know that a standard isn’t clear enough and perfectionism could be at play. Step in, coach, guide or suggest that a specific standard might help everyone get on
Increments and iterations are the new perfect. They’re more effective in helping us make progress over perfection
1
Stop expecting or requiring perfection
2
Make the standard clearer
Accept first drafts, rough cuts and mock-ups. The design industry thrives on them to gain early feedback and ensure the efficiency of work going forward.
Great leaders clarify the end goal or outcome beyond a generic call for ‘high quality’ or ‘really good.’ Explain the standard in a measurable way; it will help people enormously.
3
Improve over time
Allow learning, iterations and insights to build on first attempts. The best and brightest organizations know the power of improving over time rather
the same page, gain alignment and work to achieve the goal. There will be less stress and greater success. Don’t let perfectionism get in the way of doing good work – for yourself, your team, and those you advocate for, partner with or support within the organization. Getting work done using increments and iterations beats the stress, burnout and mental health effects of perfection-chasing every time. Lynne Cazaly is a keynote speaker and advisor who helps businesses think and work in ways that are more productive, collaborative, creative and effective. She is the author of ish: The Problem with our Pursuit for Perfection and the Life-Changing Practice of Good Enough. Find out more at lynnecazaly.com.
www.ibamag.com
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email iba@keymedia.com
Hudson’s dock diving exploits have been featured on the local news
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Hudson’s age (in human years)
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Dock diving competitions he's participated in
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Feet of his longest dock dive to date
TOP DOG The resident canine at Colorado Springs’ Brightway Insurance Agency, Hudson Kolk lives life to its fullest paw-tential DON’T BE fooled by Hudson Kolk’s ‘ruff ’ appearance – as the ‘office manager’ of Brightway Insurance Agency in Colorado Springs, he takes his job very seriously. “Hudson works very hard,” says Brandon Kolk, co-owner of the agency and Hudson. “He gets paid in treats, belly rubs, puppy ball in the park behind the office and the occasional fresh sushi from Sushi Ato a few
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doors down. When he’s not patrolling the front windows for potential threats, Hudson enjoys his naps in the sun.” Like many insurance professionals, Hudson plays as hard as he works. His specialty is the sport of dock diving, where dogs compete to see which one can jump the farthest into a pool. “He started swimming as a little puppy
in 2014,” says the agency’s (and Hudson’s) co-owner, Jenn Kolk. “We were fortunate that there was an indoor dock diving pool 10 minutes from our house for winter exercise. He loves swimming so much that we go every other weekend. It takes most dogs several months to get comfortable with jumping from a dock, but not Hudson – he jumped 20 minutes into his first lesson!”
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