f o L L A H
IBAMAG.COM ISSUE 7.11 | $12.95
E M A F 2019
IBA pays tribute to 20 of the industry’s brightest luminaries RISING COSTS IN WORKERS’ COMP
A closer look at the trends that are making claims more expensive
OFC Spine OBC-SUBBED.indd 2
THE GROWTH OF CANNABIS INSURANCE How recent legislative successes and setbacks could impact the segment
PROFESSIONAL LIABILITY
What’s driving the uptick in demand for this coverage?
25/10/2019 3:36:52 AM
IFC-01_Ad.indd 16
25/10/2019 2:40:09 AM
IFC-01_Ad.indd 17
25/10/2019 2:40:17 AM
ISSUE 7.11
CONNECT WITH US Got a story or suggestion, or just want to find out some more information?
CONTENTS
26
twitter.com/InsuranceBizUS plus.google.com/+Ibamag facebook.com/InsuranceBusinessUS
UPFRONT 04 Editorial
Why insurance is behind the times
f o L L A H
E M FA 2019
44 FEATURES
THINKING LIKE A STARTUP
It might have been around for half a century, but Alper Services has never lost its innovative mindset
46
06 Statistics
Key data that should be on your radar
08 Head to head
Should the industry be worried about trade protectionism?
10 News analysis
What legalization momentum means for cannabis insurance
12 Intelligence
This month’s big movers and shakers
14 Workers’ comp update
The financial case for putting safety first
16 Technology update
Optimism for insurtech collaboration is running high
20 Opinion
It’s time to create a more customercentric insurance-buying process
SPECIAL REPORT
HALL OF FAME 2019
IBA honors 20 visionary leaders who have been instrumental in shaping the modern insurance industry
PEOPLE
INDUSTRY ICON
How Lauren Bailey helped build Allianz Global Corporate & Specialty’s entertainment division into an international force
22 2
FEATURES
UNDER PRESSURE
From presumption laws to catastrophic claims, workers’ comp is facing stress from many sides
56
FEATURES 42 A winning solution
A new way to streamline submissions
50 How ageism impacts EPLI A Hiscox report sheds light on a troubling exposure for businesses
52 Healthy, growing and having fun
Behind the scenes at the recent WSIA Annual Marketplace
PEOPLE 63 Career path
Josh Brekenfeld is putting his political past to good use in insurance FEATURES
RISING AWARENESS DRIVES DEMAND More firms are realizing they need professional liability coverage – so how can brokers help?
64 Other life
Doing the heavy lifting with powerlifter and rating specialist Cindy Tilton
IBAMAG.COM CHECK IT OUT ONLINE
www.ibamag.com
02-03_TOC-SUBBED.indd 2
25/10/2019 4:42:34 AM
Deliver the expertise.
We can. Expertise that allows us to understand the complexities of our business. Talented people who are inspired to deliver a remarkable experience. nationwide.com/wecan
E&S/Specialty A.M. Best rating of A+ (Superior), FSC XV Fortune 100 company
Nationwide and the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. Š 2019 Nationwide ESO-0372M1
02-03_TOC-SUBBED.indd 3
25/10/2019 4:42:31 AM
UPFRONT
EDITORIAL
The future is already here
T
he “most advanced marketplace in the world.” That’s what Lloyd’s of London set out to become when it launched Blueprint One at the end of September. In the document, Lloyd’s outlined six initiatives that it believes will give it a heightened focus on digital, data and technology. This isn’t the company’s first step toward modernization this year. Back in March, on the back of a sexual harassment scandal, Lloyd’s offered another ‘breakthrough’ by introducing women to its governance committee. While the company should be applauded for taking steps in the right direction, it seems a couple decades too late to get up to speed on technology, and giving women more of a presence at the top is closer to a century behind the times. And Lloyd’s isn’t alone – these are industry-wide problems. Over in the UK, April 2019 marked the second annual deadline for companies with at least 250 employees to disclose gender pay gaps. The results were disappointing, particularly in insurance, where women earn, on average, 22.9% less than men. This is in a country where the Dive In Festival was born and where initiatives like Insuring Women’s Futures exist – what would similar mandatory reporting tell us here in the US?
Insurance is so resistant to change that by the time it jumps on the bandwagon, it seems like there’s a faster locomotive already waiting in the station Similarly, insurance is awash with initiatives to attract more millennials to the industry. Yet millennials are people born between 1980 and 2000 – so while some may be the innovative, straight-out-of-university thinkers the industry is desperate for, they’re just as likely to be pushing 40. Gen Z – those born from the mid-1990s to the mid-2000s – should be the real target demographic. This is the stumbling block the industry constantly faces – it’s so resistant to change that by the time it jumps on the bandwagon, it seems like there’s a faster locomotive already waiting in the station. This is where customers’ negative perceptions emerge and why attracting a new generation of employees has been so difficult. It’s no longer about producing a blueprint for the future while everybody else moves on – it’s about making changes now. The team at Insurance Business America
www.ibamag.com MAY 2017 EDITORIAL
Managing Editor Paul Lucas Editor Bethan Moorcraft Journalists Alicja Grzadkowska, Nicola Middlemiss, Ksenia Stepanova News Writers Lyle Adriano, Terry Gangcuangco, Roxanne Libatique, Gabriel Olano Staff Writers Ellen Burkhardt, Tom Goodwin, Libby MacDonald, Lucy Saddleton, Ryan Smith Copy Editor Clare Alexander
CONTRIBUTORS Ryan Collier, Michael Rabinowitz, Aytekin Tank
ART & PRODUCTION Designer Joenel Salvador Production Manager Alicia Chin Production Coordinator Kim Kandravy Traffic Manager Ella Dayandante
SALES & MARKETING Vice President, US Market Cathy Masek Vice President, Sales John Mackenzie Media Sales Managers Chris Anderson, Desiree McCue Global Head of Communications Lisa Narroway
CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley President Tim Duce Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries cathy.masek@keymedia.com, chris.anderson@keymedia.com, desiree.mccue@keymedia.com Key Media 78O7 E. Peakview Ave., Suite 115 Centennial, CO 80111, USA tel: +1 720 316 0151 www.keymedia.com Offices in Denver, London, Toronto, Sydney, Auckland, Manila, Singapore, Seoul
Insurance Business America is part of an international family of B2B publications, websites and events for the insurance industry Insurance Business Canada john.mackenzie@kmimedia.ca T +1 416 644 874O Insurance Business UK gemma.powell@keymedia.com T +44 20 7193 0935 Insurance Business Australia peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business NZ peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO Printed in Canada
4 www.ibamag.com
04-05_Editorial-SUBBED.indd 4
Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.
25/10/2019 2:31:35 AM
Your resolve
Our
resources
They
can rebuild their lives
As losses from natural catastrophes increase, so does the risk. And so, inevitably, do the cost and complexity of covering it. So what better way to confront the forces of Nature than by joining forces with our clients and leveraging every ounce of our combined expertise and resources? Our flood risk expertise and proprietary NatCat modelling help our clients to start providing flood protection on a scale that was, until now, unavailable. And, to some, maybe even unthinkable. We’re smarter together. swissre.com
04-05_Editorial-SUBBED.indd 5
25/10/2019 2:31:40 AM
UPFRONT
STATISTICS A DECLINE IN CYBER CONFIDENCE
HAS INSURTECH ALREADY PEAKED? The wave of insurtech startups might have crested, according to a new report on the sector from Deloitte, which revealed that more than 200 insurtechs were founded in 2016, marking an eight-year high. But since then, the number of new insurtechs on the scene has fallen significantly, down to just 12 in 2018. Deloitte attributed the drop-off to the fact that insurtechs are increasingly being launched to support incumbent carriers rather than disrupt the industry.
18%
of companies have no confidence in their ability to understand and assess cyber risks (up from 9% in 2017)
60
50
40
30
19%
of companies have no confidence in their ability to prevent cyber threats (up from 12% in 2017)
20
10
0
22%
of companies have no confidence in their ability to respond to and recover from a cyber event (up from 15% in 2017)
11%
of companies have a high level of confidence in all three of these areas of cyber resilience
2008
2009
2010
2011
WHO’S GETTING HIT BY RANSOMWARE?
4% 4% 2%
Chubb recently reported an 84% uptick in ransomware claims between 2017 and 2018. The latest data, broken down by industry, shows that professional services firms continue to make up the lion’s share of ransomware targets, in part because any business that relies heavily on email presents more opportunities for employees to click on malicious links.
Professional services Healthcare Manufacturing Financial institutions Retail/hospitality Technology
Other Education Entertainment/media Public entities Utility/energy/oil/gas Transportation
2% 1%
6% 30%
8%
2016–2018
7%
14%
5% 17%
1% 6%
3% 13% 2%
2012
8%
30%
2019
3% 23%
11%
Source: 2019 Global Cyber Risk Perception Survey, Marsh and Microsoft Source: Cyber in Focus, Chubb, October 2019
6
www.ibamag.com
06-07_Stats-SUBBED.indd 6
25/10/2019 2:43:16 AM
INSURTECH INVESTMENT STILL GOING STRONG
NUMBER OF INSURTECH STARTUPS LAUNCHED ANNUALLY Commercial insurance Personal insurance
Insurance customer acquisition
Despite the decline in insurtech launches, Deloitte’s data shows that investment in the sector remains robust; 2019 is on pace to eclipse the previous funding record set in 2015. Carriers, however, have only contributed a quarter of the $2.2 billion raised so far this year.
Insurance operations P2P insurance
AMOUNT OF INSURTECH FUNDING GLOBALLY
$3bn
$2bn
$1bn
$0 2013
2014
2015
2016
2017
2013 2014 2015 2016 2017 2018 2019 (H1)
2018
Source: Accelerating Insurance Innovation in the Age of Insurtech, Deloitte, 2019
Source: Accelerating Insurance Innovation in the Age of Insurtech, Deloitte, 2019
DATA BREACH COSTS CLIMB The average cost of a data breach to an organization has hit $3.92 million, up from $3.86 million in 2018. That puts the average cost per lost or stolen record at $150.
$4m
THE FUTURE DRIVERS OF INSURANCE According to insurers surveyed by Capgemini and Efma, customers’ need for an end-to-end solution will be the number-one factor propelling the insurance marketplace of the future. However, most insurtechs believe that new players entering insurance will be the market’s main driver.
$3m
WHAT WILL DRIVE THE INSURANCE MARKETPLACE OF THE FUTURE? Insurers’ view
Insurtechs’ view
100%
$2m
80% 60% 40%
$1m
20%
$0
$3.5 million
$3.79 million
$4 million
$3.62 million
$3.86 million
$3.92 million
2014
2015
2016
2017
2018
2019
Source: Cost of Data Breach Report, IBM Security and Ponemon Institute, 2019
0%
Customer need for an end-to-end risk solution
Reducing operational costs
New players offering insurance services
Closing the New business coverage gap models
Maximizing revenue
Source: World Insurtech Report, Capgemini and Efma, 2019
www.ibamag.com
06-07_Stats-SUBBED.indd 7
7
25/10/2019 2:43:22 AM
UPFRONT
HEAD TO HEAD
How is trade protectionism affecting insurance? As the US and China continue to lob tariffs at each other, what new risks should the industry be monitoring?
Sasha Sanyal
Dan North
Ayleen Frete
Business leader, insurance Genpact
Chief economist Euler Hermes North America
Regional head of multinational, RUL and Benelux Allianz Global Corporate & Specialty
“While certain types of insurance, such as marine cargo or business interruption insurance, will be impacted by a growing lack of cross-border collaboration and supply chain disruptions, overall property & casualty needs are likely to remain steady. It’s not the need for insurance that will change with protectionism, just the complexities of how to manage levels of asset ownership and coverage as government policies continue to evolve at a fast clip. Artificial intelligence and predictive analytics can play a key role in helping insurance companies manage these complexities, helping their clients get ahead of shifting coverage level needs.”
“In business surveys, respondents have consistently identified tariffs as a drag on business and an increased cost. Importers must pay the tariffs and either cut their margins and lose profits, or pass them on to customers, who may then go elsewhere. In either case, companies are facing increased financial distress. Payments on outstanding receivables have slowed dramatically, and bankruptcies have resulted in losses to businesses. As a result, trade credit insurers face a sharp increase in claims. Trade protectionism and tariffs may shield a small number of jobs, but they usually create more losses for businesses and those who insure them.”
“Protectionist measures may raise tariffs for cross-border financial services, including insurance, but many non-tariff measures already in place restrict the establishment of foreign companies or limit the license of trading certain insurance products. Multinational insurers are therefore already accustomed to thoroughly considering the different regulatory complexities worldwide, whether in emerging or established markets. Global insurers are able to adapt to these requirements accordingly to provide solutions to global clients, or to develop new products with agreements locally, to overcome constraints on certain types of insurance. Uncertainty is our core business.”
THE PERILS OF PROTECTIONISM Given that global trade protectionism could greatly effect economic growth, poverty levels and the potential for military conflict, Zurich Insurance Group and the Atlantic Council have urged businesses with a global footprint to consider restructuring their supply chains to address potential disruptions to their manufacturing or retail operations. “We are in a period of geopolitical uncertainty, which can create a volatile business environment for companies connected to global markets, whether it is a multinational corporation with overseas manufacturing and retail facilities or a regional operation with global suppliers,” said Bryan Salvatore, head of specialty products for Zurich North America.
8
www.ibamag.com
08-09_H2H-SUBBED.indd 8
25/10/2019 3:10:44 AM
08-09_H2H-SUBBED.indd 9
25/10/2019 3:10:47 AM
UPFRONT
NEWS ANALYSIS
Growing like a weed As more states come online with recreational-use marijuana, the only way for cannabis insurance to go is up – but getting there won’t be easy
THE CANNABIS market in the United States is expanding at a rapid pace. Thirtythree states have legalized cannabis to some degree, and if medical and recreation cannabis were legalized at the federal level, it would create a projected $86 billion in additional tax revenue, according to a report from New Frontier Data. Even though the push for recreational legalization didn’t go as planned in New York and New Jersey, Erich Bublitz, cannabis product leader, vice president and chief regulatory compliance officer at Admiral Insurance Group, calls this market “an unstoppable train.” “We do see a little bit of decrease in
it and how they’re going to legalize it. Odds are, in my view and most people’s view, legalization is going to happen at a federal level – however, it’s the timing that’s the question.” Recent legislative activities have signaled a turning tide. Bublitz points to the SAFE Banking Act, which would protect banks from federal prosecution if the cannabis businesses they work with comply with the laws in the states where they operate. It recently sailed through the House on a landslide vote but could face an uphill battle in the Senate. Meanwhile, the bipartisan STATES Act, introduced in the Senate earlier this year, would further reform federal marijuana laws by amending the Controlled Substances Act
“A lot of carriers that are not US-domiciled have chosen, probably rightfully, to stay out of the space” Erich Bublitz, Admiral Insurance Group momentum, but it doesn’t mean the momentum is stopping,” Bublitz says. “It’s just that there are a couple of states where there was an expectation that it would [be legalized], and it didn’t happen. At a federal level, there continues to be a lot of discussion as to whether they’re going to legalize
10
and exempting state-approved marijuana activity from federal enforcement. While these moves represent a piecemeal semi-legalization, Bublitz says, they demonstrate that steps are being taken at the federal level. Inside the states that have legalized recreational marijuana, Bublitz
sees continued growth in the number and types of licenses that are being issued to cannabis businesses. Insurance coverage has evolved in step with the expansion of this industry. “Most of it has come from the E&S space at this point because it is truly about as surplus lines-focused as you can get,” Bublitz says. “It’s a constantly changing space, so you have to make constant and frequent updates to coverages and rates, but capacity is limited now because it still is illegal at the federal level. The federal government has largely said that they’re not OK with bringing money outside of the United States into [the country] to support anything cannabisrelated, so a lot of carriers that are not US-domiciled have chosen, probably rightfully, to stay out of the space.” In this environment, businesses are grav-
www.ibamag.com
10-11_News Analysis-SUBBED.indd 10
25/10/2019 2:32:19 AM
THE CANNABIS INDUSTRY’S MOMENTUM
11
Number of states (plus DC) that have legalized cannabis for recreational use
33
Number of states (plus DC) that have legalized cannabis for medical use
$21.7 billion
Estimated value of the US cannabis market by 2029
$130 billion
Estimated value of the global cannabis market by 2029 Sources: Governing magazine, Bloomberg
itating more toward the hemp and CBD space. “The admitted carriers are waiting to see what happens with the non-admitted carriers that are in the marketplace,” says
ance market to date, in my opinion.” However, Boden adds that the banking situation is opening up, ever so slightly. “It comes down to [the fact that] a lot of
“I’ve seen a big increase in submissions … but there hasn’t been a real change in the insurance market to date” Chris Boden, Crouse and Associates Insurance Services Chris Boden, cannabis practice group team leader at Crouse and Associates Insurance Services. “I’ve seen a big increase in submissions, and I think more and more people are going toward hemp and CBD for business purposes because it’s less regulatory, but there hasn’t been a real change in the insur-
banks still don’t want anything to do with it because the federal statute is still in place,” he says. “I think that’s going to take some time. You see a lot more community banks or credit unions that are coming into the space, so in a sense it has gotten much easier than two or three years ago
to get a bank … but it’s still very far from being where we want it to be or where it could be so that there aren’t so many hoops to jump through.” Nonetheless, it’s a good time for insurance professionals to get in “on the ground floor of the industry,” Boden says, noting that there have been significant developments in this space over the past decade. When he wrote his first dispensary in Sacramento in 2010, there was only one carrier, and the sole coverage available was premises coverage. “Nine years later, there are many more options,” Boden says. “For liability and products, there’s a good six, seven or eight carriers – depending on where you’re located – that you can submit to and work with, so that’s definitely a good thing. That’s essentially where we are with this industry, and the only way to go is up.”
www.ibamag.com
10-11_News Analysis-SUBBED.indd 11
11
25/10/2019 2:32:25 AM
UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
AmWINS Group
Stealth Partner Group
MGA Stealth will merge with AmWINS Group company Stop Loss Insurance Services in 2020
C3 Risk & Insurance Services
Mission West Insurance
The deal expands C3’s footprint in Southern California; Mission West CEO Tony McIntosh will become C3’s Orange County managing director
Gallagher
LSG Insurance Partners
Michigan-based LSG offers employee benefits, commercial P&C, private client and M&A services and coverages
Holmes Murphy
Global Captive Management
GCM, which operates in the Cayman Islands, South Carolina and New Jersey, will continue to be led by founder Peter MacKay
H.W. Kaufman Group
Node International
Node is an MGA dedicated to digital, cyber and technology-related insurance and reinsurance solutions
JenCap Holdings
Aran Insurance Services Group
The acquisition, which includes flagship specialty program brand MiniCo, will further strengthen JenCap’s program underwriting division
Risk Strategies
Bedrick-Kaitz Agency
Based in New York, Bedrick-Kaitz is a boutique brokerage specializing in insurance for high-net-worth individuals and families
Tokio Marine Holdings
PURE Group of Insurance Companies
PURE focuses on the US high-net-worth segment and boasts in-force premiums worth $1 billion
AmTrust E&S launches excess casualty division
AmTrust subsidiary AmTrust E&S Insurance Services has opened a Los Angeles-based excess casualty underwriting division. Aimed at expanding AmTrust E&S’ product offerings, the new unit will write excess liability, both supported and unsupported, in all 50 states with limits of up to $25 million. Industries covered include manufacturing, contracting, habitational, hospitality, commercial real estate owners and operators, retail stores, and wholesale distributors. The team will be led by Jeff Lynn, who brings 15 years of experience in building and developing excess casualty business.
Tokio Marine acquires PURE Group
Tokio Marine Holdings is continuing its M&A streak, announcing in early October that it had reached an agreement to purchase Privilege Underwriters, which operates as PURE Group of Insurance Companies, from investors led by Stone Point Capital and KKR. The transaction is expected to close in the first quarter of 2020. PURE Group provides insurance solutions to the high-networth market in the US and has grown organically by more than 20% every year for the past 12 years, with in-force premiums of more than $1 billion. PURE’s specialty companies include PURE Risk Management, PURE Insurance Company, managing general underwriter PURE Programs and Haven Art Group, a fine art services and claims management company.
12
The Hanover unveils new cyber product
The Hanover Insurance Group has rolled out a stand-alone, non-admitted cyber product for its commercial lines agents and their clients. The new Hanover Cyber Advantage Premier policy is written through The Hanover’s in-house excess & surplus brokerage, Hanover Specialty Insurance Brokers, and is designed to serve small and mid-sized businesses in a broad range of industries. “This new product builds on our strong existing cyber capabilities with a non-admitted solution that responds to the needs of the market and our agents,” said Hanover Specialty president Bryan Salvatore.
www.ibamag.com
12-13_Intelligence-SUBBED.indd 12
25/10/2019 4:33:50 AM
PEOPLE Nationwide launches digital insurance platform aimed at millennials The fourth quarter of 2019 will see the rollout of Nationwide’s Spire, a new digital insurance platform that aims to make purchasing insurance easier for millennials. Designed to cut out some of the more tedious parts of the application process, the mobile website will initially offer auto insurance, with plans to expand to other products. Spire will also allow customers to cancel their existing auto insurance policy, manage their coverage, file a claim, provide proof of insurance and monitor their driving habits. Spire will also reward customers for good driving behavior.
Marsh partners with Zurich for pet insurance program
Marsh has collaborated with Zurich North America to launch pet insurance program TrustedPals. The comprehensive pet insurance offering features flexible co-payments, limits and deductibles to meet different budgets. The program will also eventually include annual rewards for pets with no claims and a real-time service to locate lost pets. In addition, Marsh and Zurich plan to introduce an AI-driven self-service feature to help customers manage their pet insurance needs. Marsh plans to donate 1% of the profits from TrustedPals to organizations that help abandoned pets in the wake of natural disasters.
The Hartford debuts next-gen business owner’s policy
The Hartford has unveiled the next generation of its Spectrum Business Owner’s Policy. The new policy offers customized coverage recommendations as the quote is being built; if the customer has questions about the recommended coverage, a pop-up window offers a simple description and an explanation for why the coverage is recommended. In addition, The Hartford rebuilt quote proposal and policy documents to include easy-to-understand descriptions, intuitive coverage groupings, detailed pricing explanations and a glossary of terms.
NAME
LEAVING
JOINING
NEW POSITION
Joyce Bellows
Horace Mann
CNA
Senior vice president, internal audit
Roy Caswell
Insurance Office of America
The Liberty Company Insurance Brokers
Executive vice president and director of information technology
Emil Dammel
N/A
PEMCO Mutual Insurance
Director of enterprise quality and risk
Steve Hales
N/A
Resolution Re
CEO
Hyeji Kang
N/A
Allianz Global Corporate & Specialty
Global head of reinsurance and catastrophe risk management
Martin McCarty
N/A
AXIS Capital Holdings
Global treasurer
Traci McGuire
N/A
AmeriTrust Group
Chief claims officer
John Mina
N/A
Risk Strategies
CEO
Sabrina Mitchell
N/A
PMA Insurance Group
Claims assistant vice president, Southeast region
Joe Peiser
N/A
Willis Towers Watson
Global head of broking
PMA appoints regional claims AVP
PMA Insurance Group has named Sabrina Mitchell as claims assistant vice president for the Southeast region, charged with leading the region’s insurance claims operations. Mitchell has 25 years of claims experience and has been part of PMA’s claims team since 2004, most recently serving as regional claims manager for teams in nine Southeast states. “[Sabrina] has an established, proven track record of leadership, technical acumen and a strong commitment to customer service,” said Ray DiCello, SVP and chief claims officer at PMA. “I am confident that under her direction, the Southeast region will continue to deliver exceptional claims services.”
Brokerage welcomes new EVP and IT director
Roy Caswell has joined The Liberty Company Insurance Brokers as executive vice president and director of information technology. The industry veteran, who began his insurance career in 1992 at American National Insurance before running his own agency, has held IT leadership positions at various insurance companies, including Hull & Company, Marsh and Insurance Office of America. “Technology is a critical component in the success of insurance brokerages in today’s competitive landscape,” said Liberty Company CEO Jerry Pickett. “Roy has a deep understanding of the opportunities that exist in this arena, and we quickly realized that he was the right person to lead the advancement of The Liberty Company’s expansion and evolution into the future.”
www.ibamag.com
12-13_Intelligence-SUBBED.indd 13
13
25/10/2019 4:33:55 AM
UPFRONT
WORKERS’ COMP UPDATE NEWS BRIEFS Employers Insurance Company moves into Hawaii
Employers Insurance Company has expanded its workers’ compensation offering to Hawaii. This means Employers now provides a competitive workers’ compensation insurance option to small businesses in all states, except the four where the sale of workers’ compensation insurance by private insurers is prohibited. Commenting on the expansion, Employers Holdings president and CEO Douglas D. Dirks said the move will position the carrier as “a trusted partner to agents and small business policyholders nationwide.”
Davies Group acquires workers’ comp claims administrator
UK-based Davies Group has acquired workers’ compensation and P&C thirdparty administrator Alternative Service Concepts [ASC]. Based in Nashville, ASC offers specialist end-to-end claims solutions to US and Lloyd’s insurance businesses, public entities, self-insured entities, insurance agencies and brokers across the country. ASC will join Davies Group’s North American Claims Solutions business, together with Frontier Adjusters, which Davies acquired in mid-September. ASC will create a new TPA division within Claims Solutions, allowing Davies Group to offer a turn-key solution to clients throughout the US. The deal marks Davies Group’s sixth acquisition so far in 2019.
S1 Medical and Sapiens team up to launch ClaimsGo
Independent cost containment and medical management firm S1 Medical has partnered with software solutions provider Sapiens International to
14
introduce Sapiens ClaimsGo, a fully hosted solution for specialized and quick administration of workers’ compensation policies and claims. The joint offering will debut at Broward County Public Schools, the sixth largest school district in the country. “Our goal is to provide a more seamless, full-rounded workers’ compensation claims solution to Broward County, with expedited communication between the school boards, the claimants and the providers,” said Jackie Janowiak, specialty program manager at Sapiens.
Texas repairman convicted of workers’ comp fraud
Midland, Texas-based appliance repairman Joe D. Lozano Sr. has been sentenced to pay $6,049 and spend one day in jail for engaging in doubledipping workers’ compensation fraud. According to Texas Mutual Insurance Company, Lozano was found to be working as a self-employed appliance repairman while also collecting workers’ comp benefits from Texas Mutual from a job-related injury he suffered while working as a repairman for A & A Appliance in Midland.
Pie Insurance continues to take a bigger market slice
Pie Insurance has been approved to provide small business-focused workers’ compensation insurance in Rhode Island and Vermont. “Pie has seen fantastic growth throughout 2019,” said CEO John Swigart. “In January, Pie provided workers’ compensation coverage in 10 states. Now in October, that number has jumped to include 31 states and Washington, DC. With our launches in Rhode Island and Vermont, we’re able to help small business owners in these states save up to 30% on workers’ compensation insurance with an online process that is truly as easy as pie.”
Making safety a priority Safer workplaces are better not only for employees, but also a company’s bottom line The correlation between workers’ compensation claims, premiums and an organization’s commitment to safety is a very direct one. The relationship between a company’s loss history and its workers’ comp premiums is referred to as an experience modifier – and unsurprisingly, employers that have a safe workplace generally see an experience modifier that’s better than average, and they pay less for workers’ comp. Even a single event with medical treatment can cause higher rates, and it’s even worse if a trend develops and injuries start accumulating. “Workplace incidents can have a much greater negative effect on a smaller company than on a larger one, and a single lapse in safety can lead to higher premiums,” says Brad Wilkins, senior loss control specialist at AmTrust North America. “It’s a great incentive for small employers to put energy into safety.” An effective workplace safety program is made up of four pillars, according to OSHA’s Small Business Handbook: management commitment and worker involvement; work-site analysis; hazard prevention and control; and training of workers, supervisors and managers. “If a leader’s attitude towards their company’s safety reflects how important it is to the daily operations, then the workers’ behavior is going to reflect that,” Wilkins explains. “Effective safety only works in a sustained way when it comes from the top down, and management should clearly communicate the program and involve [employees] in devel-
www.ibamag.com
14-15_Workers Comp Update-SUBBED.indd 14
25/10/2019 3:51:43 AM
oping and implementing the program.” Another critical building block is a process for identifying and assessing the hazards in the company, which Wilkins says should also involve “creating an atmosphere where employees are comfortable and encouraged to recognize and report hazards, and report near-miss accidents immediately so that when something has the potential of happening, they
“A single lapse in safety can lead to higher premiums” can learn from that and correct it and prevent something from happening in real life.” Hazard prevention and control involves correcting the safety issues identified in the analysis. Finally, the fourth pillar is training. Retail agents working with workers’ comp clients can point them to resources offered by carriers, including AmTrust, that can assist with training. “Many carriers … understand that employers may not have ready access to training materials or the right kind of materials, and carriers will provide this content for them on a complimentary basis,” Wilkins says. “For instance, at AmTrust, we offer every workers’ comp policyholder an entire library of ready-to-use safety training, and our insureds only need to allocate the time to present it. We simply believe that no employer, large or small, should have difficulty providing a safe workplace because they can’t get accurate and timely information about how to address workplace safety or health problems.”
Q&A
Reagan Pufall President and CEO OMAHA NATIONAL
Years in the industry 24 Fast fact Omaha National is on track to reach $50 million in program premium by the end of 2019
The benefits of faster claims processing What does Omaha National bring to the workers’ compensation market? We founded Omaha National in 2016 because we’re driven by a vision of creating a brilliant company – a company that is a great place to work and that produces exceptional results. One example is that we’re exceptionally good at managing claims. We take great care of injured workers, we guide claims to successful resolutions much more quickly than usual, and our claim costs are quite a bit lower. Because of this, we can provide help to small and mid-size companies whose premiums have gone up because they’ve had some recent employee injuries. This also contributes to our financial success. Even though we’re a startup, our loss ratio for the 2018 accident year is below 50%, which is one of the lowest in the industry.
What made you take the insurtech approach? It’s who we are. Our management team has been insurtech since before the word ‘insurtech’ was invented. Where we’re a bit different is that our tech focus isn’t on direct marketing or replacing human judgment with algorithms. We believe the key is using artificial intelligence and superior software design in building the internal operating systems that have the most strategic impact.
What do you consider the market’s biggest challenges? The biggest challenge – and the biggest opportunity – in workers’ compensation is always managing claims. There are no policy caps or exclusions; liability is effectively unlimited. The worst thing you can do is make injured workers miserable by fighting over dumb things and making claims drag on for years. We guide disability claims to successful resolutions very quickly. Half are closed by the end of the accident year, 75% are closed by the end of the following year, and 90% are closed by the end of the third year. That’s much faster than other companies.
What business segments do you find promising? We like to insure folks who work with their hands, such as plumbers, painters, landscapers and framers. They work hard, and sometimes they get hurt. When they do, we’re there to help them get better and get back on their feet.
What do you envision for the workers’ comp sector? We see a bright future in this sector of the insurance industry. Of course, it will always have its up and down cycles, but the kind of work we insure can’t be offshored. And we look forward to being at the forefront of tech innovation in workers’ comp.
www.ibamag.com
14-15_Workers Comp Update-SUBBED.indd 15
15
25/10/2019 3:51:49 AM
UPFRONT
TECHNOLOGY UPDATE
Alignment of interests spurs tech growth Insurers are hopeful that continued collaboration with insurtechs will result in fruitful solutions
rounds, so that they are essentially getting to the point of starting to scale,” says Martha Notaras, partner at XL Innovate, AXA XL’s global insurtech venture capital arm. Looking at the investment picture, Notaras notes that “we’re now on track for $6 billion in 2019, and just to put that in perspective, from 2015 to 2018, there was $10 billion put in, so this is a big year.”
“One thing that insurtechs in general have learned to do is speak insurance better”
The excitement that surrounds insurtech was evident at the recent InsureTech Connect conference in Las Vegas, which has grown significantly since its inception in 2016. Nationwide was one insurer that made several key announcements during the course of the event, including the Q4 launch of its new digital insurance platform, Spire. “On the venture side, we took a look at value chains for both the financial services side of the house as well as the insurance side,” says Erik Ross, head of venture capital and open innovation for Nationwide. “We’ve looked at players in
NEWS BRIEFS
each of the spaces and are trying to work with companies that we think have both outsized returns opportunities and are doing something interesting that can help either a current business model or a future business model.” More broadly, 2019 has been an important year for insurtechs, and leaders who have been in this space for many years are witnessing the changes firsthand. “We’re really starting to see people who are reaching milestones where they are fundable at significantly higher levels, and with significantly larger amounts of money in larger
Marsh pilots blockchainpowered platform
Marsh is piloting a new digital placement platform powered by blockchain technology. Proposed by a winning Marsh hackathon team, the Risk Exchange platform allows brokers to provide real-time information and feedback on the placement and binding process. The pilot will feature US trade credit policies from AIG and Euler Hermes. Marsh chief digital officer Sastry Durvasula called it “an important milestone in Marsh’s digital transformation and a great example of applying emerging tech to create value for our clients.”
16
Notaras adds that insurtechs have sweetened the pot by better positioning themselves to insurers. “One thing that insurtechs in general have learned to do is speak insurance better,” she says, “so when they’re communicating their value propositions, they’re very much understanding what the buyer at the insurance company wants to understand.” Moving forward, there’s a sense of optimism that insurers and technology companies can continue to come together to bring fruitful solutions to the marketplace and to clients, whether that’s retail agents or insureds. “There is a feeling that there’s an alignment of interests,” Notaras says, “and I think the other thing is that early on, when you go back to 2015, there was a sense of opposition between the two parties, and that partnership has really changed over time.”
Satellite imagery to speed up Lloyd’s disaster claims
McKenzie Intelligence Services, a global imagery and geospatial intelligence consultancy firm, has partnered with Lloyd’s to speed up claims following natural catastrophe events. Lloyd’s managing agents can use the company’s satellite imagery and analytics gateway to get precise, time-stamped intelligence at individual property and ZIP code levels to enable proactive customer service. In an increasing number of cases, the technology enables claims to be paid while a catastrophe event is still unfolding.
www.ibamag.com
16-19_Tech update-SUBBED.indd 16
25/10/2019 3:13:35 AM
www.ibamag.com
16-19_Tech update-SUBBED.indd 17
17
25/10/2019 3:13:40 AM
UPFRONT
TECHNOLOGY UPDATE
O
Q&A
Laird Rixford CEO INSURANCE TECHNOLOGIES CORPORATION [ITC]
Years in the industry 18 Fast fact Among the major insurtech deals so far in 2019 was Prudential Financial’s $2.35 billion purchase of online startup Assurance IQ
Insurtech: buy, build or partner? How have you noticed a change in insurance agents’ attitudes toward insurtech? They went from being afraid of it to understanding that they need to be embracing the technology that is coming from that change. The same technology that is available to insurtechs is also available to agents and brokers, and they just have to find a way to integrate it into their business and make sure they’re utilizing it to the best of their ability.
“People who are not investing in technology today will not be here tomorrow” How can an insurance agency figure out where to start with technology? The best approach is to find out what you want. You need to understand what your business is going to need and what technology needs to be there, and then that will help answer the next question of whether you buy, build or partner. If it’s a very quick thing that you’re able to deeply integrate into your complete workflow and you can build additional workflows around it, then it’s actually beneficial to build it yourself. But there are things that make it very difficult to integrate technology in multiple different ways, so a lot of brokers need to actually investigate and find out if there’s an available solution out there that will give them a better ROI than building it themselves. If you
Insurance quoting platform opens to independent agents
Insurance technology provider Bold Penguin has made its exclusive agent tool available to independent agents. Bold Penguin’s Agent Terminal, which allows users to triage, quote and bind commercial insurance, has been recently adopted by the likes of Nationwide, Attune, Hiscox and CNA, and has helped more than 950,000 small and mid-size businesses get an insurance quote. It is available in all 50 states and can handle general liability, workers’ compensation, professional liability, business owner’s policies and bonds.
18
buy it or partner with somebody, it actually gives you the opportunity to leverage the fact that they have more than one customer, and so they will always be moving forward, and you can share that continued development.
Which strategy – buy, build or partner – are agencies tending to go for at the moment? It’s across the board. I’ve seen a lot of agencies jump to buy; I’ve seen a lot of agencies jump to build. The build is definitely a longer process that requires significant investment, but you can tailor it to your workflow. But agencies are not technologists – they are good at selling insurance; they might know their workflow extremely well and can build the process around it, but often they need to find ways that maybe a technology can be assistive to their workflow versus just having to completely rewrite their workflow.
How do you see the sector transforming in the next few years? I’m seeing agencies accelerate their investment in technology, and I see that continuing now and into the future. And where that really is starting to take hold is that agencies are beginning to realize that their old ways of doing workflows are no longer sufficient to compete in today’s market. No matter what direction they go, they need to be investing in technology because people who are not investing in technology today will not be here tomorrow.
Frederick Mutual taps Betterview’s AI-powered tool
Maryland-based Frederick Mutual Insurance Company has forged a deal with Betterview to leverage the startup’s AI-powered property risk management platform and predictive analytics. Betterview uses machine learning and computer vision to analyze aircraft and satellite imagery and combines the information from the images with data on building records and weather history. The resulting information can be used by carriers to identify and score roofing conditions and related property risks.
BrokerTech Ventures adds new partners
Broker-led investor group and accelerator program BrokerTech Ventures has added Assurance, Graham Company, InterWest Insurance Services and Hylant Insurance as new investor partners. “With the addition of these four agency partners, the BrokerTech Ventures network now spans the country, allowing us to be the first to stake our position in cultivating, curating and fostering innovation for brokers,” said Dan Keough, chairman and CEO of Holmes Murphy and co-founder of BrokerTech Ventures.
A
www.ibamag.com
16-19_Tech update-SUBBED.indd 18
T l o
P
25/10/2019 3:13:45 AM
OUT-WORK verb
To respond lightning fast, day or night
AT RT SPECIALT Y, IT’S WHAT WE DO. Our wholesale specialty risk professionals have the expertise and tenacity to craft superior coverages for retail brokers’ toughest risks, regardless of account size. Contact your RT Broker at rtspecialty.com
AGRIBUSINESS
A V I AT I O N
PERSONAL LINES
PROFESSIONAL & EXECUTIVE LIABILITY
16-19_Tech update-SUBBED.indd 19
C A S U A LT Y
CONSTRUCTION
ENERGY
E N V I R O N M E N TA L
P R O P E R T Y R E A L E S TAT E
H E A LT H C A R E
T R A N S P O R TAT I O N
LIFE SCIENCES
MARINE
www.ibamag.com
W O R K E R S ’ C O M P E N S AT I O N
19
RT BINDING
25/10/2019 3:13:47 AM
UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email iba@keymedia.com
Keeping it simple Customers long for a simpler insurance-buying process – and those who can deliver it will be rewarded, writes Ryan Collier THE WORLD of commercial insurance has been very good to me during my almost 25 years in the industry. But this great field could be improved significantly by fixing the broken customer experience process. As an industry, we haven’t yet adopted a true customer-centric philosophy. We accept the status quo because the insurance business has been so good to so many of us for so long. But times are changing. Customers who buy insurance today are looking for ease of use, simplicity and consistency in the wording of their insurance policies. They want assurance that their time matters. Customers will no longer accept a broken process that focuses on the risk-taker if they are presented with options that put them first. A concept as fundamentally simple on the surface as putting customers first has been sorely lacking in our industry. First, we ask the customer to complete an application that often has complexity beyond their comprehension because we use terminology and verbiage that is familiar to our industry, not theirs. Most of the information requested in these applications isn’t even needed to properly underwrite an account, yet the requests remain on the forms nonetheless. After a client’s applications and risk profiles are completed, their trusted insurance advisors are tasked with procuring quotes. This process might take days or even weeks to finalize. Our clients must then determine the best option, sifting among insurance carriers’ own distinctive quotes, each of which uses their own specific wording, since there is no standardized format for policy and endorse-
20
ment wordings in many areas of the commercial insurance industry. The carrier’s goal is to keep risk transfer at a comfortable and acceptable level, typically by adding exclusions or limitations to coverage in areas that go beyond their risk appetite. Policy wording is usually complex and often ambiguous. Since helping our clients decipher this language makes the client/broker relationship more secure, there is little motivation to address this issue. Once we have helped decipher the different options for the customer, they select
fying their process, giving their clients realtime products, and processing and paying their claims in an expedited fashion will win a disproportionate market share. We could figure this out much more quickly by gaining feedback and input directly from the insurance buyer via focus groups, surveys and collaborative discussions to get an accurate assessment of their needs. Insurtechs are at the forefront of these efforts – they don’t have a legacy to protect or legacy systems to hold them back. Many insurtech leaders don’t come from insurance backgrounds, which allows them to be more open-minded to the needs and wants of the customer. But these insurtechs still need distribution networks. So the question becomes, will client-focused insurtechs be able to build a distribution network before the incumbents can introduce innovations that meet customer needs? Billions have already been invested in this race between incumbents and insurtechs, by both established companies and newer entrants to the market. But much of this money will be wasted because this industry moves very cautiously, and some great ideas are likely to run out of runway before the industry
“A concept as fundamentally simple on the surface as putting customers first has been sorely lacking in our industry” what they believe to be their best option, and they are issued a binder. This is further proof that our industry is broken. We typically can’t even issue them a policy at the time the coverage is secured; rather, we give them a temporary policy – or binder – until we can get our back offices to issue the formal policy 30, 60 or even 90 days later, depending on the efficiency of the carrier’s system. This simply isn’t good enough. I can think of no other industry that asks its customers to do so much work, color within such complex lines, pay so much money and then wait 60 days for the transaction to be completed. Insurance carriers and brokers who can figure out how to put the client first by simpli-
fully understands what needs to be done. What the insurance industry needs today are leaders who are capable of envisioning what can be, rather than focusing on what has been. With a growing customer focus on instant gratification, the traditionalists within our industry simply aren’t moving fast enough to meet this need. The time is ripe for leaders who will break the status quo and find new ways to put the customer first. Ryan Collier has worked as both an underwriter and broker during his 25-year insurance career. In 1999, he founded Risk Placement Services’ executive liability division and now serves as the company’s chief digital officer.
www.ibamag.com
20-21_Opinion-SUBBED.indd 20
25/10/2019 2:33:08 AM
RT (Binding) for emergency transport
RT (Brokerage) for hospitals
BINDING AUTHORITY FOR DIFFERENT SIZES OF E&S RISK For risks big and small, RT Specialty is the solution. Our RT Binding underwriting professionals deliver swift, expert E&S coverage for small- and mid-sized accounts. Retail brokers and agents, contact your local RT Binding Underwriter today in one of our 40+ offices at rtbinding.com.
GENER AL LIABILIT Y
20-21_Opinion-SUBBED.indd 21
PROPERT Y
UMBRELL A
LIQUOR LIABILIT Y
INL AND MARINE
E VENT
W O R K E R S ’ C O M P E N S AT I O N
PERSONAL LINES
25/10/2019 2:33:11 AM
PEOPLE
INDUSTRY ICON
LEADING IN THE LIMELIGHT Allianz Global Corporate & Specialty’s Lauren Bailey has taken a national entertainment division and expanded it into a global brand, all while keeping up with rapid evolutions in show business IN MOVIES, characters often take a leap of faith that propels them down an unexpected path. Lauren Bailey, global head of entertainment for Allianz Global Corporate & Specialty [AGCS], is no stranger to this narrative, having taken several leaps of faith during the course of her career, which eventually led her to a leadership position within AGCS’ entertainment insurance unit. Bailey began her insurance career as an underwriting trainee in personal lines and went on to climb the ranks of the industry. “I’ve never been afraid of taking on a challenge,” she says. “A lot of times, I think people question whether they’re ready for something new and whether they have the skill set to do it. Even if I had some reservations, I convinced myself to just go for it. At the time, there were some tremendous people who helped me – who really supported my career, who presented me with a lot of those opportunities and probably did a little bit of convincing – but ultimately, I took the fork in the road.” By 2009, Bailey was the head of Fireman’s Fund Insurance Company’s entertainment division, which was a leading insurer in Hollywood. There, she built relationships and expertise around the entertainment business as she moved on from personal lines. In 2015, the Allianz Group integrated
22
Fireman’s Fund, which it had acquired in the early 1990s, with AGCS. One of the responsibilities Bailey took on during this time was building the predominantly US-based entertainment division into a global force. She explains that it was critical to source experts with entertainment expertise who could work in various markets around the world alongside the existing AGCS team to support the
of entertainment risk – and there’s a myriad of responsibilities that come with that.”
Lights, camera, insurance The entertainment business has seen a lot of changes since the film industry was born in the late 19th century. For insurers like AGCS, keeping up with emerging risks and exposures, as well as the many ways that media can
“A lot of times, I think people question whether they’re ready for something new and whether they have the skill set to do it. Even if I had some reservations, I convinced myself to just go for it” introduction of a new line of business in those markets with their local expertise. “I don’t know how often something like that comes along, but for us [at] Fireman’s Fund Entertainment, that was really a unique opportunity,” Bailey says. “We were integrating into a new organization with new key relationships, and those relationships exist all over the world – not just in the home office in Munich, but anywhere there’s a concentration
be consumed today, is a challenge – one that Bailey is excited to tackle. From motorsports to motion pictures and major festivals, each type of production has unique features that need to be accounted for in the underwriting process. “In that regard, it’s always challenging,” she says. “A lot of what we do is evaluating new exposures and new risks because while there may be similarities to the last picture or event that was insured, each one is unique.”
www.ibamag.com
22-25_Industry Icon-SUBBED.indd 22
25/10/2019 2:33:35 AM
PROFILE Name: Lauren Bailey Title: Global head of entertainment Company: Allianz Global Corporate & Specialty Based in: Los Angeles Career highlight: Leading the integration of Fireman’s Fund Entertainment with AGCS and expanding the division globally
www.ibamag.com
22-25_Industry Icon-SUBBED.indd 23
23
25/10/2019 2:33:42 AM
PEOPLE
INDUSTRY ICON
And there’s the fact that the range of content for viewers to choose from has exploded over the past decade, which means there’s a lot more variety within productions as well. “We’ve had to, in many ways, evolve how we think about the risk and how we’re designing insurance products to keep up because there are so many productions going on at once, the size of productions [varies] in terms of the budgets, and they’re very elaborate in terms of their sets, costuming or even stunts,” Bailey says. “The business has evolved and changed, and we have to keep up with that.” When it comes to live events, the AGCS team has just as many exposures to think about, from unpredictable weather to the
“You might have a client who’s creating a new area within their business, and they come to us asking, ‘Is this something you’d be interested in working with us to insure?’” Bailey says. “We’re supporting the evolution of these businesses so that they feel like we’re their partner in that. One of the things I think is tremendous is that we have relationships, not just with brokers, but also with the risk management teams within these large clients, and I value that because it’s a very collaborative approach and helps to ensure that what we design is something they need.” The needs of insureds are also driving AGCS to think about new tech offerings that will help deliver products and services faster.
“What we are involved in tends to be a source of pride for the organization because employees really relate to the business” safety of the audience and every individual taking part in the production. This has led to an intensified focus on safety. “We’ve actually taken a more active role around safety,” Bailey says, “not just because of the financial implications of what could happen if something goes wrong, but ultimately we want to help protect the well-being of everyone who’s involved. That carries across clients as well – they’re focused on safety since they want to protect their workers and they want to protect their patrons.”
Coming up next While AGCS’ scope in entertainment is fairly wide, there’s always opportunity for further growth. Motorsports, for example, has been a relatively new addition to the company’s global portfolio, and Bailey’s team plans to grow into other sports-related areas. More broadly, however, clients are helping AGCS identify new opportunities.
24
“If we’re thinking about how we’re responding to customers and their experience with us, we have to be able to do it quickly and efficiently and accurately to meet their demands,” Bailey says. Looking ahead, she hopes to further ingrain the AGCS entertainment brand as a leader in major markets around the world. “We want to show that we can do this business and we can do it better than anyone else,” Bailey says. “What we are involved in tends to be a source of pride for the organization because employees really relate to the business. They’re fans of the movies we insure or of a motorsports team, or they went to a festival that we insured or they saw one of our artists on tour. That brand awareness and involvement is really special, and all of our priorities ultimately are [centered around] how can we achieve that and how we can do it in a way so that we are contributing positively to the overall organization.”
AGCS BY THE NUMBERS
2006
Year Allianz Global Corporate & Specialty was launched by the Allianz Group
34
Number of countries where AGCS operates
200
Number of countries within the combined Allianz and partner network
4,400+
Number of people AGCS employs across the world
€8.2 billion
Gross premium generated by AGCS globally in 2018
www.ibamag.com
IBA
22-25_Industry Icon-SUBBED.indd 24
25/10/2019 2:33:59 AM
ag.com www.ibamag.com
ent voice Insurance for Business the America insurance is the independentindustry, voice for the insurance industry, lusive encompassing interviews news analysis,and expert opinion, business exclusive interviews strategy and business strategy ers, agents advice for today’s and sophisticated advice insuranceprofessionals. brokers, agents and advice professionals.
HOULD KNOW ANYONE BE WHO READING SHOULD BE READING ESS AMERICA INSURANCE BUSINESS ?AMERICA? In-depth • In-depth affanalysis ecting of the latest issues affecting WORK-LIFE BALANCE analysis of the latest issues insurance brokers and agents insurance brokers and agents n w do Why slowing s es sin bu Expert columnists addressing aspects • Expert that columnists addressing aspects that is vital to pedal, we are “By taking our foot off the impact your business impact your business that s gains tant succes allowing ourselves three impor for work while will improve our motivation and progress” ving our productivity industry’s also improthe Exclusive interviews with • Exclusive most interviews with the industry’s most important players important players Our own rundowns of America’s best • Our brokerages own rundowns of America’s best brokerages and insurers and insurers Analysis of insurance industry reports • Analysis and of insurance industry reports and research findings research findings The latest changes in insurance legislation • The latest changes and in insurance legislation and what you need to do next what you need to do next Industry photography of the key figureheads • Industry photography of the key figureheads and insurance events and insurance events FEATURES
We all know what it 3 Sharper focus. it is happening to our the alarm sound when our lives and see what and feels like to hear and overstimulated. tion’ – overwhelmed fallen asleep – it’s our relationships, our businesses seems like we have just minds constantly health, too bogged down in With our bodies and is known to affect our goals. When we are at awful! Sleep deprivation well-being and rela‘switched on,’ our health, looking down constantly list, to-do rational decisions and our make to paying the price. and our ability our field of view narrows, tionships are increasingly to situations, and it impacts focus our devices, our respond manage to right efforts are that best s Despite our miss the opportunitie mood and emotions. creativity and we can and productivity alongside sleep could be front of us. Not getting enough are finding that the in to step progress, as a society, we and if you Giving ourselves the opportunity holding you back in business, is not working, day and take a look pursuit of ‘more’ and ‘now’ you could be out of the detail of our not an early riser, then g concern we must provide perspec- are and is an ever-growin period of producat the big picture will missing out on your peak of hand. are moving in the address before it gets out tive on whether we
Life role evolution
had more time to too fast? Do you wish you Ever feel like life is moving – you just need to The great news is you can work on your business? ood Lockw Angela writes slow down,
a lot to do. Whether you’re working for it’s your own business or an endless list; a company, there is always and a mountain of people expect a lot of you, tasks is vying for your attention. the situation is Whether we like it or not, predictions are not going away, and if future going to slow down. correct, things are not we are in for a long In fact, strap in, because ts in technology, and fast ride. Advancemen of choice and everan overwhelming amount are impacting our changing expectations speed of change and ability to cope with the keep up. the expectation that we will big red button Unfortunately, there’s no when things are press to us in front of ng. Instead, we getting too overwhelmi late, working keep persisting with working through sickpushing on weekends and get the basics done, ness in an attempt to the long hours even though we know aren’t doing us and constant connectivity
IN BUSINESS, there is
any favors. to people, techConstant connectivity is resulting in nology and our workloads overwhelming, our work and life becoming off. Our frenetic making it hard to ever switch meeting to the next pace – racing from one is affecting our – next the to client and one slow down, switch off ability to take time out,
OM IBA MAG.C | $12 .95 1 ISSUE 6.0
76
www.ibamag.com
in particular, we Over the last two decades shift in life roles for have seen a significant e roles and partmen and women. Stay-at-hom tly undertime work that were predominan being embraced as taken by women are now them to pursue allowing men, for options work or share family their passions outside of our circadian Early morning is when partners so they can be as simple as tivity. responsibilities with their alert, our attenright direction. This can rhythms are at their most the window, careers. both develop it’s the perfect a reminder to look out and energy peak, and of work and setting to take in your tion of The evolution of our value going outside to eat lunch priorities, setting a frame on a personal level is week time to work on its purpose in our lives or reflecting on your the day. of our surroundings, and calm for the rest of clarity expectations our in creating a shift a friend or partner. new ways of working with workplaces as we look for down Making time to slow in productive and Ever tried sprinting that allow us to be engaged that slowing down is impos2 Renewed energy. spending argument to The Our addition meaningful work, in It would be impossible. true, and there in today’s society is not our interests. a marathon? to go full throttle sible time with family and pursuing to show how people bodies are not designed and well-being incenwe try is ample evidence From workplace health the skills of periods without rest. When successfully integrating health days and for long our limitations, are lives. tive programs to paid mental push ourselves beyond down into their fast-paced the responsibility to over, and we slowing health education sessions, effects of burnout take feel like an impossible well-being is now the and Slowing down can for employee health and without the energy, focus such full lives, but ourselves lead find we when employer. scenario and the falling to both the employee to get through the day. doing more; it switching off isn’t about of work roles and motivation three shifting are continual motivation This Energy, focus and means doing less! evidence that people workplace expectations is to success in any business. taking time of crucial payoff the factors on If we focus to better manage our bodies are searching for ways improved we slow down, we give slow down – better health, knowing that When and re-energize, to their lives and all this involves, a renewed time they need to rest clearer thinking and are not performing the to illness, meaning energy, without optimal health, we switching off will no boosting their resistance motivation for work – more energy. With at our best. a luxury, but fewer sick days and seem like a cop-out or in our responses to longer keep up with energy, we become agile a necessity if we are to less this enhances our instead Doing more by doing challenges; life. not have to keep unexpected and our the pace of To achieve more, we do to make better decisions, more; in fact, we ability pushing ourselves to do flows. more by doing creativity throttle, slowing are capable of achieving If you live life at full therapist down. By taking our being lazy or Angela Lockwood is an occupational less. How? By slowing can feel like you are programs allowing ourselves down whose retreats, corporate education far from the foot off the pedal, we are and your time. But that is and keynotes help organizations, schools will improve our wasting fivea as simple as wellbe three important gains that Resting can individuals prioritize their health and also improving truth. Off: stand up from your motivation for work while being. Lockwood is the author of Switch minute break where you breath. Slowing How to Find Calm in a Noisy World and our productivity and progress. desk and take a big, deep of Conscious Choice. Power The moving keep to want is necessary if we we slow down, we down and stamina. 1 Perspective. When energy with forward l step back from can take a big metaphorica
T S I L A I C E SP BROK1E8RS and refuel. ‘overconnecWe are in a state of chronic
www.ibamag.com
77
20
e? cribe to Insurance Business America, To subscribe to Insurance Business America, y coverag r specialt kers Looking fo 59 wholesale bro bscriptions@keymedia.com. or call email720-316-7373 subscriptions@keymedia.com. or call 720-316-7373 d e on es ey th db Start with above an o g y tl amag.com www.ibamag.com en ho consist w
XT WAVE THE NETE OF CH
AND THE E ... AR WINNERS n big at the
ENTAL ENVIRONM RANCE
INSU navigating s on Expert tip reasingly this inc space complex
Who wo nce Business nsurance Business America is proudly brought Insurance to Business you America byis proudly Keybrought Media to you by Key Media Insura ta and first-ever Awards? AI, Big Da How shape the more could in 2018 industry
IBA_UpcomingIssues_FP_ad.indd 4 22-25_Industry Icon-SUBBED.indd 25
America
2/12/2013
7:23:55 2/12/2013 7:23:55 AM AM
25/10/2019 2:34:05 AM
SPECIAL REPORT
HALL OF FAME 2019
f o L L A H
E M A F 2019
IBA presents a new class of 20 Hall of Fame inductees who have helped mold the industry into what it is today and continue to shape its future MUCH ATTENTION is paid today to the trend of workers frequently switching jobs (and even industries). But there are plenty of individuals who, after 35-plus years in insurance, continue to dedicate their time, expertise and insights to it, and the industry is better off for them. The 20 insurance professionals who make up IBA’s third Hall of Fame class have set new courses for the industry, mentored generations of current and future insurance professionals, and weighed in on major national and global issues. Along the way, they’ve helped to redefine what insurance is and can be.
METHODOLOGY This year’s IBA Hall of Fame class was selected with the assistance of the Hall of Fame Advisory Panel, an independent judging panel composed of industry leaders and former Hall of Fame inductees, including: • Pam Quilici, Excess & Surplus Lines Association of California • Brady R. Kelley, WSIA • Jeffrey L. Rubin, Hub International Northeast • Susan L. Combs, Combs & Company • R. Parke Ellis, Gillis, Ellis & Baker • Ron Abram, Abram Interstate Insurance Services • Susan Holliday, IFC – International Finance Corporation • John F. Jennings, JenCap Holdings When compiling the list, IBA considered the advisory panel’s recommendations, as well as external nominations. The panelists confirmed the final inductee list based on all candidates’ industry tenure, achievements and contributions.
26
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 26
25/10/2019 3:15:33 AM
HALL OF FAME 2019 INDEX NAME
COMPANY
Jeff Albright
Independent Insurance Agents & Brokers of Louisiana
PAGE
28
Warren Buffett
Berkshire Hathaway
27
Barbara Bufkin
Assurant
30
Joseph S. Clabby
Chubb
30
M. Steven DeCarlo
AmWINS
31
Preston Diamond
Institute of WorkComp Professionals
40
John Q. Doyle
Marsh
32
Brian Duperreault
AIG
40
Daniel S. Glaser
Marsh & McLennan Companies
40
Evan Greenberg
Chubb
36
Patricia A. Griffey
National Association of Health Underwriters
38
William T. Hold
National Alliance for Insurance Education & Research
34
Gregory E. Murphy
Selective Insurance Group
29
John Neal
Lloyd's of London
38
Thomas P. Nerney
USLI
38
Paul J. Norman
Norman-Spencer Agency
36
Bryan Sanders
Markel Assurance
41
J. Eric Smith
Swiss Re America
37
Roslyn Spiegel
Hub International Northeast
32
Brad Tennant
Tennant Special Risk
33
WARREN BUFFETT CEO BERKSHIRE HATHAWAY
Nicknamed the Oracle of Omaha, Warren Buffett bought his first stock when he was just 11 years old and filed his first tax statement at age 13. After being rejected from Harvard Business School, he got a master’s degree in economics from Columbia University at age 21. For the last 50-plus years, he has been dedicated to building Berkshire Hathaway into one of the largest insurance groups in the world. Buffett became an integral part of Berkshire Hathaway in 1962 when he began buying stock in the company. When he took over the business in 1965, insurance companies were the first businesses he added to Berkshire Hathaway’s portfolio, viewing them as opportune areas to diversify the business and reinvest cash flow. Today, the 89-year-old is worth more than $81 billion and continues to run Berkshire Hathaway, which owns more than 60 companies, including GEICO, Duracell and Dairy Queen. In 2006, Buffett announced his plan to give away more than 99% of his fortune; four years later, he and Bill Gates launched the Giving Pledge, asking billionaires to join them in committing to donate at least half of their wealth to charitable causes. In 2019, Buffett led by example and donated $3.6 billion.
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 27
27
25/10/2019 3:15:38 AM
SPECIAL REPORT
HALL OF FAME 2019
JEFF ALBRIGHT CEO INDEPENDENT INSURANCE AGENTS & BROKERS OF LOUISIANA
An independent insurance agent from day one, Jeff Albright has been in the industry for 40 years, 31 of which he’s spent with the Independent Insurance Agents & Brokers of Louisiana [IIABL]. He was hired by IIABL as education director in 1988 and used his experience as a former associate professor of insurance at Louisiana State University to develop extensive education programs aimed at improving the professionalism of agency staff. He became the organization’s CEO in 1996. Albright also serves on the board of directors for the Louisiana Citizens Property Insurance Corporation and is a member of the Louisiana Property & Casualty Insurance Commission and the Louisiana Health Care Commission. Albright is well known throughout
Louisiana for his government affairs work with the state legislature and Department of Insurance. His achievements include leading IIABL’s efforts to protect policyholders and agents, as well as helping pass landmark legislation regulating banks in insurance, PEOs, certificates of insurance and producer compensation. He was also instrumental in establishing the first-in-the-nation statutory ownership of expirations for independent agents in Louisiana. Under Albright’s leadership, IIABL has been recognized twice with the Maurice G. Herndon National Legislative Award by the Independent Insurance Agents & Brokers of America. In 2007, IIABL awarded Albright its highest honor, the Lou Daniel Award for Lifetime Achievement.
FINDING WAYS TO INCREASE YOUR PROFITS DOESN’T HAVE TO BE AN ENDLESS SEARCH. DISCOVER THE HIDDEN PROFIT POTENTIAL OF THE PREMIUM FINANCING YOU ALREADY ARRANGE. THE COST PROGRAM™ IS A TOTAL TURNKEY SOLUTION THAT ENABLES YOU TO: • EARN ALL OF THE PROFIT FROM THE PREMIUM FINANCING YOU ARRANGE • CONTROL THE PREMIUM FINANCE PROCESS, RATES, AND FEES • CREATE A PROFIT CENTER WITH NO STAFF, EQUIPMENT, OR SOFTWARE TO BUY • DRAMATICALLY INCREASE YOUR REVENUE OVER STANDARD COMMISSIONS OR REBATES • BUILD A BETTER BOTTOM LINE WHILE COST DOES ALL THE WORK!
COSTFINANCIAL.COM 800-844-2678 info@costfinancial.com
28
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 28
25/10/2019 3:15:53 AM
GREGORY E. MURPHY Chairman and CEO SELECTIVE INSURANCE GROUP
In his nearly 40 years in the insurance industry – all of which he’s spent at Selective Insurance Group – Gregory Murphy has helped lead the company’s strategic growth to become a super-regional property & casualty insurance provider across the US. Murphy was first exposed to the industry while working at an accounting firm right out of college. “I was intrigued by the opportunity to learn about so many different finance areas within the insurance industry … as well as the fact that there were new things always in development,” he says. Promoted to chairman and CEO in 2013, Murphy has grown Selective into the 41st largest property & casualty group in the US, according to A.M. Best, an accomplishment he credits to the entire team. “While I have the honor and privilege of setting Selective’s strategic direction, our success is because of our employees and agency partners,” he says. “What they accomplish every day is the reason why we’ve experienced significant growth and success.” An active philanthropist, Murphy supports such charities as Project Self Sufficiency and the Foundation for Newton Medical Center. He also helped create the Selective Insurance Group Foundation to support nonprofit organizations across the country. “The insurance industry is an unbelievable career for anyone who is intellectually curious and always willing to learn,” Murphy says. “It’s a great ‘people’ business, whether it’s helping people put their lives back together after a loss ... or helping to make communities safer. The impact we have as an industry is so much bigger than we realize – it makes insurance the most rewarding career choice.”
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 29
29
25/10/2019 3:15:48 AM
SPECIAL REPORT
HALL OF FAME 2019
BARBARA BUFKIN Executive head of business development, lending solutions group ASSURANT
Throughout an insurance career spanning four decades, Barbara Bufkin has become a trailblazer for women and a champion of innovative approaches to the industry’s opportunities and challenges. Combining corporate business development, reinsurance and origination of strategic partnerships in C-suite roles at companies such as Hamilton USA, Guy Carpenter, Argo Group and Swiss Re, Bufkin has placed herself at the intersection of distribution, underwriting, technology and capital, most recently focused on innovation for small businesses. It is this confluence of expertise, along with the industry’s role in underpinning the foundation of society by bearing and mitigating risk, that she says fascinates her just as much today as when she was a recent graduate with a philosophy degree discovering the industry 40 years ago. A tireless advocate on issues of philanthropy, product innovation and talent, Bufkin was named Insurance Woman of the Year by the Association of Professional Insurance Women [APIW] in 2012, Inclusion Champion by the Insurance Industry Charitable Foundation [IICF] in 2015 and Woman of Distinction at the 2017 Insurance Business America Awards, among other honors. Her philanthropic and industry leadership includes serving as chair of IICF’s international board of governors, president of APIW and executive vice president of Gamma Iota Sigma, through which she helps focus the industry on the critical business and social issues of diversity and inclusion, disaster relief, and talent development. A firm believer that the future of insurance will rely on passion, purpose, leadership and trust, Bufkin regularly shares this perspective with today’s leaders and tomorrow’s talent.
30
www.ibamag.com
JOSEPH S. CLABBY Vice president, Chubb Group Chairman, Chubb Bermuda Executive vice president, North America field operations CHUBB
After beginning his career at a large commercial bank, Joseph Clabby became intrigued by the insurance industry while working toward his MBA in finance and decided to head down a different path. “Insurance is a part of the fabric of conducting business throughout the world,” he says. “I have always enjoyed the variety of experiences and opportunities that the industry offers, including the idea that no two risks are ever the same.” Thirty-four years later, Clabby is considered a global expert in the field. In addition to his roles as vice president of Chubb Group and chairman of Chubb Bermuda, Clabby also serves on Chubb’s North America field management leadership team, focusing on product expansion, distribution and cross-sell initiatives in the organization’s regional and branch operations. Prior to ACE’s merger with Chubb in 2016, Clabby served as division president of ACE Bermuda and global accounts. “The challenges of this industry are never-ending,” Clabby says when asked what keeps him interested in the business. “Just when you think you have figured things out, you realize there is always something new to learn. And most importantly, the colleagues I get to work with and the relationships I have and continue to develop are invaluable.”
Build agency value? #InsurBanc_Can M. STEVEN DECARLO Executive chairman AMWINS GROUP
Your agency needs growth opportunities to
Steve DeCarlo began his career in 1980 with Crum & Forster immediately after graduating from East Tennessee State University. Within a few years, he joined The London Agency as CFO and by 1988 was a founding partner, executive vice president and chief financial officer of Royal Specialty Underwriting [RSUI]. Ten years later, he became senior vice president of RSUI’s then parent company, Royal & SunAlliance USA, before joining AmWINS in 2000. As AmWINS’ executive chairman, DeCarlo oversees more than 5,000 employees and upwards of $17 billion in annual premium for the global specialty insurance distributor. DeCarlo says the biggest lesson he’s learned over the past four decades is to look beyond himself. “In business – and insurance in particular – it’s very much a team game,” he says. “It’s about people and relationships. You are a partner, a teammate, either with customers, insureds or co-workers. It’s a team sport, and everything you do is for the team win.” Outside of AmWINS, DeCarlo is past chairman of the Multiple Sclerosis Society of Georgia, an inductee into the Multiple Sclerosis Hall of Fame and past vice chairman of the PGA of America Tournament. In 2014, as the National Insurance Industry Council’s Spirit of Life honoree, he spearheaded the fundraising of more than $2.7 million for City of Hope to support research for life-threatening diseases. In 2019, DeCarlo was honored by the Spencer Educational Foundation for his contributions to insurance industry education.
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 31
enhance your value. And you need the right business partners to make that happen. With capabilities in 50 states and over 18 years of experience, InsurBanc has in-depth insurance knowledge for financial insights, capital and cash management services, and can help you build a strong foundation.
InsurBanc.com/Can
31
866.467.2262
www.ibamag.com
31
25/10/2019 3:15:54 AM
SPECIAL REPORT
HALL OF FAME 2019
ROSLYN SPIEGEL Senior vice president HUB INTERNATIONAL NORTHEAST
Roslyn Spiegel began her career with Hub International Northeast, then known as Kaye Insurance Associates, in 1982 as an administrative assistant. Six months after joining the firm, she was given the opportunity to work on the servicing team and took advantage of the chance to learn the business, eventually managing a relationship with one of the firm’s largest real estate accounts. Today, Spiegel is responsible for working with some of the most prominent real estate management companies in the world on their insurance and risk management programs. “Roz Spiegel has been an instrumental part of Hub’s growth and success in the northeast,” says Marc Cohen, president and CEO of Hub International. “She is a true insurance professional and leader not only in Hub, but within the industry.” As the team leader of Hub’s Long Island risk management unit, Spiegel is responsible for the management and administration of large commercial lines of business, managing a multi million-dollar book of accounts and overseeing a large group of customer service personnel. “My role at Hub is multifaceted: client advocate, team leader, quarterback, peacekeeper,” she says. “For me, one of the most satisfying aspects of the position is serving as a mentor, teaching the finer points of coverages to the next generation of insurance professionals.” Outside of the office, Spiegel is an active participant in Hub’s philanthropic efforts for the Insurance Industry Charitable Foundation.
32
JOHN Q. DOYLE President and CEO MARSH
John Doyle was named CEO of Marsh in July 2017 after serving as the firm’s president for a little over a year. Doyle oversees Marsh’s worldwide businesses and operations, including property & casualty brokerage and specialty, digital technology platforms, and consulting practices. He is also a member of Marsh & McLennan Companies’ executive committee. Doyle began his career at AIG as an underwriting trainee and soon realized his passion for the industry. Today, he says he “can’t imagine being in any other line of work … It’s definitely the only business for me.” He worked at AIG for 30 years in a variety of roles, including CEO of commercial insurance, president and CEO of property & casualty in the US, and president of National Union Fire Insurance Company. In every position, Doyle says it was always about helping clients. “It’s the role insurance plays in the moments that matter for individuals and businesses alike,” he says. “We enable risk-taking. We can help mitigate risk and step in when losses do occur to help people get back on their feet. That’s what really motivates me.” In addition to his work at Marsh, Doyle is a board member of the New York Police and Fire Widows’ and Children’s Benefit Fund, a trustee of the Inner-City Scholarship Fund and a former director of the American Insurance Association.
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 32
25/10/2019 3:15:59 AM
BRAD TENNANT President TENNANT SPECIAL RISK
Following in his father’s footsteps, Brad Tennant joined the insurance industry in 1974. At the time, he says, “I had no idea what an underwriter was. I was attracted to the industry because it was steady non-construction work.” Forty-five years later, Tennant’s career has included stints at such industry giants as Allstate, Marsh, Reliance and various divisions within AIG, including National Union, Lexington and Landmark Companies. He has worked with state departments of insurance, underwritten and managed varied books of business, and managed MGUs from the carrier side. In 1999, Tennant’s entrepreneurial spirit led him to start his own agency with the goal of developing a premier MGU facility focused on subcontractors. “I wanted to
offer the ‘little guy’ the broad and rounded coverage they needed at a reasonable price,” he says. Still going strong as a self-professed “insurance geek,” Tennant says there is “a world of opportunity in this industry … If you are able, move through the different industry disciplines while you are young in your career.” He shares this insight as a mentor to his growing staff, providing them with a seasoned perspective on underwriting trends versus historical philosophies and digging into coverage forms whenever he can. “I see myself as an enabler for our staff and a leader by example,” he says. “I believe in empowering our staff members and holding them accountable. That’s the best way for all of us to learn.”
CONSISTENCY For over 20 years, our approach for middle to small market contractors helps remove the guess work in what you are selling. Quality Coverage Low or No Deductibles Competitive Minimum Premiums
When timing is everything...get your quotes, loss runs & policies faster when partnering with our outsanding and experienced staff. Visit www.tennant-risk.com today.
PRIMARY & EXCESS | GENERAL LIABILITY
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 33
33
25/10/2019 3:16:17 AM
SPECIAL REPORT
HALL OF FAME 2019
WILLIAM T. HOLD President NATIONAL ALLIANCE FOR INSURANCE EDUCATION & RESEARCH
“I was first attracted to the industry because it mirrors the human condition. The insurance industry never becomes irrelevant,” says Dr. William Hold, co-founder and president of the National Alliance for Insurance Education & Research. The National Alliance began in 1969 with the Certified Insurance Counselor [CIC] designation program; in the decades since, under Hold’s leadership, the National Alliance has delivered 57,000 educational programs to 2.2 million insurance and risk management professionals. Hold also is on the faculty of the University of Texas and his alma mater, the University of Wisconsin, where he earned his master’s degree in 1964 and his PhD in 1967. Over the years, Hold’s writings have been published in insurancerelated academic and trade journals, and he has authored several books on the industry. Prior to founding the CIC program, Hold was vice president of the National Association of Independent Insurers and served as a consultant to organizations such as the American Trial Lawyers Association, the Federal Trade Commission and the Department of Transportation. In honor of his contributions to the industry and professional education, the College of Business at Florida State University (Hold’s undergraduate alma mater) established the Dr. William T. Hold/The National Alliance Program in Risk Management and Insurance in his name. He was also inducted into the Florida State University College of Business Hall of Fame.
34
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 34
25/10/2019 3:16:14 AM
Build Your Professional Specialty With Industry-Specific Courses Contractors
Truckers
Executive Risk Hospitality
Healthcare Providers
Cyber Risk
Large Commercial Personal Lines
PROFocus series
Classroom
&
Online
PROFocus courses are eligible for CE credits and are update options for Insurance and Risk Management professionals interested in emerging marketplace trends. TheNationalAlliance.com/profocus
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 35
35
25/10/2019 3:16:16 AM
SPECIAL REPORT
HALL OF FAME 2019
EVAN GREENBERG Chairman and CEO CHUBB
PAUL J. NORMAN CEO NORMAN-SPENCER AGENCY
With nearly half a century of insurance experience, Paul Norman has spent his career developing industry-specific insurance solutions for unique business classes. He obtained a bachelor’s degree from Marian University in 1973 and, after earning a master’s degree from Xavier University in 1974, began working as an account analyst and underwriter for Travelers Insurance. In 1988, Norman acquired his first insurance agency, which ultimately became Norman-Spencer. This was the first of many acquisitions and partnerships in the 30 years that followed, during which Norman built several organizations and mentored multiple generations of employees and industry leaders. “One of the biggest lessons I’ve learned throughout my career is that in order for people to succeed long term, they need a work environment that enables them to be accountable for decisions without fear of failure and retribution,” he says. “I feel truly fortunate to have had great partners, strong team members and a supportive family. In my role, I strive for selflessness in mentoring and grooming those who’ve chosen my company as their platform for a meaningful and rewarding career in insurance.” In 2015, Norman helped establish the nonprofit foundation NS Cares to support local charitable organizations. To date, NS Cares has raised and donated more than $250,000 to organizations like the Cincinnati Children’s Hospital, Ronald McDonald House of Greater Cincinnati, the March of Dimes, the American Cancer Society and Habitat for Humanity.
36
www.ibamag.com
Over the course of more than 40 years in the insurance industry, Evan Greenberg has gained significant insight in the global property, casualty and life insurance sectors. Prior to joining ACE in 2001 as vice chairman, Greenberg spent 25 years at AIG, where he served under his father, Hank Greenberg, as president and chief operating officer from 1997 to 2000. At ACE, Greenberg and fellow executives took the then low-profile insurer and built it into a global giant with a $36 billion market value, which was acquired by Chubb in 2016. Today, he is the chairman and CEO of Chubb, the largest publicly traded property and casualty insurance company, with over 30,000 employees worldwide. In addition to overseeing Chubb, Greenberg serves as chair of the US-China Business Council and vice chair of the National Committee on US-China Relations. He also sits on the boards of Rockefeller University, the Center for Strategic and International Studies, and the Peterson Institute for International Economics. In addition, Greenberg was appointed by President Trump in 2018 to the US Trade Representative’s Advisory Committee for Trade Policy and Negotiations. He is also a member of the Council on Foreign Relations and an overseer of the International Rescue Committee.
J. ERIC SMITH President and CEO SWISS RE AMERICA
Growing up in Bloomington, Illinois, the home of State Farm Insurance, Eric Smith says he was aware of the good work the industry does from an early age. “My father owned a business that sold office machinery to [State Farm], and I caddied for many of their senior executives when I was growing up, so I had a very positive impression of the industry,” he says. “This favorable image … made me interested in making this my career choice.” Smith has worked in myriad roles in property & casualty insurance throughout his career. He spent more than 20 years with Country Financial, rose to the rank of president of financial services at Allstate and served as president of USAA Life Insurance Co. He joined Swiss Re America in 2011 as CEO of reinsurance for the Americas; the following year, he was appointed regional president of the Americas and a member of the group executive committee. “While I’m proud of the business accomplishments I’ve achieved in my career individually and with my teams, I am most proud of the work I’ve done to recognize talented individuals and support them in reaching the next level in their careers,” Smith says. “Helping someone to realize their full potential carries a reward that can’t be measured. I’m honored to lead a team of more than 4,000 insurance professionals across the Americas that provides society with solutions to manage risk and cope with individual and widespread tragedies.”
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 37
37
25/10/2019 3:16:22 AM
SPECIAL REPORT
HALL OF FAME 2019 PATRICIA A. GRIFFEY President, board of directors NATIONAL ASSOCIATION OF HEALTH UNDERWRITERS
JOHN NEAL CEO LLOYD’S OF LONDON
From underwriter to CEO, John Neal has spent the majority of his career with Lloyd’s of London. He got his start in 1985 at Crowe Underwriting Agency, where, over the course of 10 years, he grew UK GWP from £3 million to £100 million. From there, he became the youngest active underwriter at Lloyd’s while working for Bankside Managing Agency, then led a management buyout of Ensign to establish a dedicated Lloyd’s managing agency. As CEO of Ensign, Neal grew the company into the leading specialist commercial motor underwriter in the UK. Neal’s career continued at QBE, where he became group CEO in 2012. During his five years with QBE, Neal refocused the company’s business around commercial and specialty lines, disposing of non-core portfolios and reducing costs by more than $350 million. He was appointed CEO of Lloyd’s of London in October 2018. “I am thrilled to be offered the opportunity to lead Lloyd’s and will do so with the same excitement I felt when I first stepped into the underwriting room back in 1985,” Neal said in a statement upon the announcement of his position. He also emphasized his dedication to helping the company continue innovating and adapting to remain “at the forefront of global commercial corporate and specialty insurance and reinsurance.”
38
After finding her way into the insurance industry while working as a part-time file clerk for a small-town insurance agency, Patricia Griffey earned her life and health license in 1979 and her P&C license four years later. She joined the Goodwin Company in 1987 and was soon promoted to vice president, directing the agency’s administration and marketing. In 2000, she was promoted again to COO. She purchased the agency in 2004 and renamed it Page 1 Benefits. Eight years later, Page 1 Benefits merged with the Healy Group, where Griffey holds the title of risk management advisor. She has served in various positions in her local chapter and on the Indiana state board of the National Association of Health Underwriters and is the current president of the NAHU board of directors. Reflecting on the state of the industry, Griffey says she is “truly encouraged that today, a whole new generation is finding their way into our field deliberately. I would encourage those individuals to seek out new opportunities, regardless of their past education. I was not able to attend college, but thanks to opportunities available to me in this industry that I took advantage of, I like to think I turned out just fine. Those options are even more available today for those individuals who are willing to invest in their own professional education where necessary and available.”
THOMAS P. NERNEY Chairman, president and CEO USLI
After 18 years on Philadelphia Insurance Companies’ senior management team, Tom Nerney joined USLI in 1996. Beyond his duties as chairman, president and CEO, Nerney has implemented training programs and accreditation opportunities for young insurance professionals throughout the USLI organization, adding to their expertise and helping them gain the respect of industry peers. An active member of the Greater Philadelphia community, Nerney founded two local nonprofit organizations – A Front Row Seat to Learning and the Nerney Family Foundation – and has served on the boards of La Salle Academy, the Academy of Risk Management and Insurance at St. Joseph’s University, Main Line Health Systems and Cristo Rey Philadelphia. He was the chairman of the board at Cabrini University and also chaired a team for the Main Line Chamber of Commerce’s Talent and Education Network. Nerney currently serves on the board of trustees for The Institutes’ Risk and Insurance Knowledge Group and is chair of the board that oversees the Nerney Leadership Institute at Cabrini University. Nerney earned an MBA in finance from the Haub School of Business at St. Joseph’s University and was inducted into the school’s Hall of Fame in 2009. In 2008, he was presented with the Franklin Award by the Philadelphia chapter of the CPCU Society for his outstanding achievement and contributions to the insurance industry.
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 38
25/10/2019 3:16:30 AM
UNIQUE RECOGNITION FOR A UNIQUE LEADER Selective is proud to congratulate our CEO Greg Murphy on being inducted into the IBA Hall of Fame.
© 2019 Selective Ins. Group, Inc., Branchville, NJ. Products vary by jurisdiction, terms, and conditions and are provided by Selective Ins. Co. of America and its insurer affiliates. Details at selective.com/about/affiliated-insurers.aspx.
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 39
39
25/10/2019 3:16:32 AM
SPECIAL REPORT
HALL OF FAME 2019 BRIAN DUPERREAULT President, CEO and director AIG
Prior to assuming his current role at AIG in 2017, Brian Duperreault served as chairman and CEO of Hamilton Insurance Group, where “he introduced cutting-edge data science and analytics into the insurance business,” says Douglas M. Steenland, chairman of the AIG board. “Brian is a hands-on leader who has consistently delivered strong bottom-line results. He has demonstrated a passion for deploying new and innovative ways to serve clients.” Building on his experience at Hamilton, Duperreault has used his position as president, CEO and director of AIG to grow the company’s global team and oversee the development of innovative client solutions with the goal of becoming “the most technology-enabled and capital-efficient carrier in the industry.” Prior to Hamilton, Duperreault served as president and CEO of Marsh & McLennan Companies, was non-executive chairman and CEO of ACE, and held various senior executive positions with AIG and its affiliates dating back to 1973. Outside of AIG, Duperreault is a member of the boards of the Bermuda Institute of Ocean Sciences, Partnership for New York City, the Geneva Association and Saint Joseph’s University, where he earned a bachelor’s degree in mathematics. He is also the former chairman of the board of overseers of the School of Risk Management at St. John’s University and chairman emeritus of Blue Marble Microinsurance.
DANIEL S. GLASER President and CEO MARSH & MCLENNAN COMPANIES
Dan Glaser started his insurance career as a broker at Marsh & McLennan Companies in 1982. Before returning to the company in 2007 as chairman and CEO, Glaser held senior positions with commercial insurers and insurance brokerages around the world. In his current role, Glaser helps steer MMC’s 76,000-person team as they serve clients in more than 130 countries. “Developing our talent is an ongoing priority for me,” Glaser says. “Offering our established and emerging leaders development opportunities is a key part of being an employer of choice in the industry. It’s critically important to this industry that we prepare the next generation. It’s a responsibility I take seriously.” Outside of MMC, Glaser is the chair of the US Federal Advisory Committee on Insurance, the chair of the international advisory board for BritishAmerican Business, a member of the boards of trustees for The Institutes and Ohio Wesleyan University, and sits on the board for the Partnership for New York City and the advisory council for St. George’s Society of New York. Even after 37 years in the insurance industry, Glaser says he still feels energized by its possibilities. “This is the age of risk,” he says. “As a result, this industry feels more relevant each day. I wake up excited about the opportunities to help our clients – from the large multinational corporations to small businesses – navigate this constantly evolving landscape.”
40
PRESTON DIAMOND Managing partner INSTITUTE OF WORKCOMP PROFESSIONALS
While attending UC Berkeley, Preston Diamond began selling life insurance to families in the Bay Area. After graduating in 1959, he made his career official and pioneered a ‘plain speak’ approach to insurance, advocating for eschewing industry lingo in favor of “speaking in the language of business owners.” In 1977, Diamond joined Holgate and Associates and began consulting with agencies, helping them improve both their operations and sales tactics. Diamond worked with more than 350 independent agencies on client care, acquisition and retention, and marketing and sales. Following his passion for teaching, Diamond developed the 6th Sense Proposal System for property & casualty agents with the goal of helping agents visually communicate the complexities of insurance. In 2001, he co-founded the Institute of WorkComp Professionals, which trains, certifies and mentors independent agents to write more workers’ compensation business and get better results for clients. To date, more than 3,000 agents have earned the institute’s Certified WorkComp Advisor designation. Now entering his seventh decade in insurance, Diamond remains committed to helping independent agents and insurance buyers understand the industry’s complexities.
www.ibamag.com
26-41_Hall of Fame 2019-SUBBED.indd 40
25/10/2019 3:16:36 AM
BRYAN SANDERS President, US Insurance MARKEL
Bryan Sanders entered the insurance industry right after college and has experienced many aspects of the business throughout his 38-year career, from working as a standard lines underwriter to spending 10 years as a retail agent to being a wholesale broker and holding various senior management roles. Sanders was appointed President of US Insurance for Markel in 2018. He is responsible for underwriting and production in the US, Bermuda and Dublin. He previously served as President of Markel Wholesale from 2014 to 2017 and was
instrumental in the formation of Markel Assurance. Sanders joined Markel with the acquisition of Alterra Capital Holdings Limited in 2013. Prior to Alterra, he worked for Hilb Rogal & Hobbs Company [HRH], MacDuff Underwriters Inc., and Aetna Casualty and Surety. After nearly four decades in the industry, Sanders says he’s still excited about and motivated by his job. “I really love what I do,” he said in an internal interview in 2014. “Not everyone is privileged with knowing exactly where they belong, but I do. I am privileged to lead a team of talented, motivated and tireless associates, including our regional presidents, underwriters and product line leaders, and a business development team that tells our story in compelling ways.”
WE HAVE YOUR BACK!
A nationally acclaimed provider of property & casualty insurance that focuses on construction, real estate and select specialty lines.
Norman-Spencer has the relationships you need to get your insureds the best coverage. Our team is ready to help you!
Quality Coverage
Competitive Pricing
Quick Turnaround
Call 800.753.3557 or visit norman-spencer.com
www.ibamag.com
41
SPECIAL PROMOTIONAL FEATURE
TECHNOLOGY
A winning solution Michael Rabinowitz, product manager at EZLynx, explains how tech gives independent agencies an easy way to simplify and strengthen submissions THE RISE of insurtech over the last decade has made a major impact on independent agents. Armed with new technology, directto-consumer companies aim to outspend agencies in marketing and compete directly to convince consumers that the independent channel is becoming obsolete. After all, local is no longer the great differentiator when
42
convenience is introduced. Other technologies have led the way for heightened competition among agencies, simultaneously raising consumer expectations while lowering the barrier of entry to the marketplace. Until recently, the bulk of insurtech investment had been made in personal lines, but commercial lines has recently emerged as
a new area of focus. Unfortunately, most of these investments have been made to further a direct-to-consumer business model. Innovative technologies for the independent commercial agent, which help emphasize the channel’s superior value differentiation, still lag behind. While new technologies have absolutely helped the independent channel in the areas of marketing, lead intake and data, challenges continue to mount when it comes to the bulk of a commercial insurance agent’s work – the actual tasks of selling and servicing commercial accounts.
Doing more for commercial agencies Agencies looking to gain an edge in an increasingly competitive marketplace have a particular need for new technology in the commercial submission process. There are very few new tools that make the submission process efficient or scalable, and many existing solutions don’t integrate with the
www.ibamag.com
42-43_EZlynx-SUBBED.indd 42
25/10/2019 2:36:18 AM
systems that agents otherwise interact with every day. The process is largely disjointed, confusing and minimally helpful. For agencies focused on small business commercial, moving up to compete in the middle market can be challenging. As agencies pursue larger clients, submission workflows get much more involved. Knowledge of markets and insurance products also becomes critical, and the combination of these requirements can quickly overwhelm an agency. Agencies must track the communication touchpoints between the agency, the customer and the underwriter – and traceability is critical. Add to this the need for data collection, risk evaluation, and identifying coverage and form gaps during the submission process, and it quickly becomes difficult to know where an agent should focus. Of course, ambitious agencies typically have multiple submissions in flight, each with its own list of stakeholders. When agencies fail
to monitor and manage any of these factors closely, deals can be lost. As agencies move up-market, knowledge and expertise become more important. These are, after all, the areas where independent agents excel. As the realm of commercial insurance widens, fully understanding the needs of the customer and the range of insurance portfolios that can best protect them can be daunting. The challenge is how an agent can become an expert fast.
New tools are needed The traditional independent agent channel can thrive in this age of disruption, but not by selling and servicing like it has always been done. The key differentiator between direct-to-consumer products and the retail agent is the human side. But the consumer is evolving: Customers expect expertise at a higher premium level, and agents need relevant tools to better engage customers. While it’s true that the bulk of submission
cessful, including organization of submissions, carrier submission management, tracking, reports and dashboard, and market and appetite. EZLynx Submission Center manages the submission process by organizing the user’s activities from the start of the submission process to its completion. Agents can manage multiple carrier submissions more easily because the tool makes visualizing the submission process so much simpler. Agents understand where the critical decision points are and how to navigate them. EZLynx also takes the guesswork out of which ACORD forms to generate, and task tracking ensures that the relevant resources are completing what is required to move the submission along. Market and underwriter management helps consolidate and keep all of the relevant contact information at the agent’s fingertips. EZLynx Submission Center puts relevant market data in front of agents, and it
The traditional independent agent channel can thrive in this age of disruption, but not by selling and servicing like it has always been done work involves putting applications together and entering the data in order to send to a market, commercial insurance success is really about knowing the right products for the risk, identifying carriers with a healthy appetite for the risk, and choosing to place business with the markets that will provide the level of service and support that the client deserves. When agents structure the right insurance solution for the customer, everyone wins. EZLynx Submission Center brings it all together. This new software tool brings focus and efficiency to all of the areas that help commercial submissions be more suc-
does so in a context that can be leveraged for greater success in the markets they submit to. In short, EZLynx Submission Center gives commercial insurance agencies greater confidence to go after more accounts – and the competitive advantage needed to win. For agencies looking to grow their commercial book of business, there is now a solution to help them achieve these goals.
Michael Rabinowitz is a product manager at EZLynx. To learn more about this latest addition to the EZLynx Management System, contact your EZLynx sales rep today at 877-932-2382.
www.ibamag.com
42-43_EZlynx-SUBBED.indd 43
43
25/10/2019 2:36:23 AM
FEATURES
BROKERAGE INSIGHT
Thinking like a startup Alper Services CEO David Macknin tells IBA how 53 years of innovation have set his agency up for success
IBA: What’s the story behind Alper Services? David Macknin: Alper Services was launched in 1966 by Howard Alper on the premise that Chicago needed a better platform of insurance brokerage. He developed a system of auditing workers’ compensation and liability policies, recognizing that well over 50% of policies at the time had errors, and he would work with companies that were not his insurance clients to uncover and recover overcharges that had been made. He brought something different to the marketplace – the ability to unravel and correct workers’ compensation and general liability errors that carriers had made. That expert service opened the door to insurance clients and to finding solutions to problems that others had not been able to find. The launch in 1966 was marked by differentiation, and it really predicated the following 53 years of innovation. From the 1970s through the end of the millennium, Alper Services grew in the traditional sense as a middle-market broker specialist. The firm was stable but slightly less innovative through the 2000s – what they call the ‘off ’ years. At that time, growth was not the priority; stability was the priority. Our team of trusted experts was focused on handling
44
clients in a best-in-class manner, always providing the depth and breadth of resources that no other boutique broker possesses.
IBA: Why are you called Alper Services, not Alper Insurance? DM: Alper Services has always employed forensic auditors, workers’ compensation case managers, claims advocates – not just claims handlers and administrators – as well as general counsel to serve our clients. Our name, Alper Services, represents the fact that we always aim to serve middle-market clients with the greatest possible depth and breadth of services. Other boutique brokers may be just as good at brokering business. Where we always strive to be superior is in the valueadded services we provide.
IBA: Tell us about Alper Services’ five cornerstones. DM: The firm is built upon five cornerstones, which go in a linear intentional order: people, communication, technology, premier client experiences and growth. All of those cornerstones are integral, but everything starts with our people. We are a very transparent organization – everything from our interior glass walls and natural lighting at every desk to how we share our financial data with our entire staff every quarter and how we fully disclose all transactions, commissions, fees and marketing results with our clients. We have a unique ownership structure in that we’re owned in a perpetual trust, meaning we cannot be sold. We’re very well capitalized, and we’re able to focus on our
THE ALPER SERVES MISSION Alper Serves is the community involvement and charitable arm of Alper Services. The initiative was set up in 2005 to raise community awareness by enabling Alper team members to engage in charitable work. According to CEO David Macknin, Alper Serves has “demonstrated commitment both in the treasury and time of team members, who are supporting organizations that serve the Chicago community.” He describes the unit as being an integral part of the company’s core, adding, “It’s a privilege and a blessing to give back to the community.”
www.ibamag.com
44-45_Agency Insight-SUBBED.indd 44
25/10/2019 3:25:14 AM
FAST FACTS: ALPER SERVICES CORE LINES OF BUSINESS
Manufacturing
Technology
Real estate
Hospitality
“The world is changing rapidly, and our customers’ demands are changing, so we need to move as a very agile organization” five cornerstones without trying to drive the highest margin. Our unique ownership structure enables us to spend more on expert services than our competitors in the middlemarket space, who perhaps have shareholders or a private equity parent, because our number-one priority is not profit.
IBA: How are you attracting the next generation of insurance professionals? DM: I ask our people to look at Alper Services as a 53-year-old startup. When it comes to Gen Y and Gen Z professionals, we’re really embracing how they like to work, and our five cornerstones play into that. The world is changing rapidly, and our customers’ demands are changing, so we need to move as
a very agile organization. While I don’t like to say I’m a copycat, the premise is that whatever services our national competitors – firms like Aon, Marsh and Willis Towers Watson – are providing to the Fortune 2,500 companies in North America, we want to deliver to the middle market. That requires agility, which is something that our 53-year-old firm has in abundance.
IBA: How do you find a balance between service and technology? DM: We run by the mantra of embracing and utilizing the latest technology wherever it enhances, and never diminishes, the client’s or our people’s journey. We are not looking to replace conversations of risk management
Social service agencies
Senior care Year founded: 1966 Founder: Howard Alper Location: Chicago Number of employees: 58 Geographic reach: Serves clients in 49 states and 28 countries considerations and enterprise risk management dialogue with chatbots. However, where we can expedite customer delivery of insurance documentation, and the human engagement is more laborious than productive, that’s where we’re embracing technology. It’s a delicate balance to find.
www.ibamag.com
44-45_Agency Insight-SUBBED.indd 45
45
25/10/2019 3:25:20 AM
FEATURES
SECTOR FOCUS: WORKERS’ COMP
CLIENT
CENTERED SOLUTION
ORIENTED
Under pressure Presumption laws and rising costs of catastrophic injury claims are causing unprecedented losses in the workers’ comp segment, putting pressure on brokers to help their clients get a handle on the situation
THE RAPID advancement of medical technology means better treatment and increased survival rates – but it also leads to higher claims costs in the workers’ compensation segment. Carriers are now seeing individual accidents incurring catastrophic injury claims of up to $40 million, according to Mark Walls, vice president of communications and strategic analysis at Safety National. “That kind of number used to be unheard of,” he says. “What carriers are seeing on these high-dollar injury claims is that costs are getting exponentially
catastrophic claims increases continually, and that’s a huge concern that we have to deal with,” he says. Caldwell advises brokers dealing with such claims to report them as quickly as possible to the carrier and to make swift arrangements with rehabilitation centers to manage cost containment. Caldwell believes an increased focus on safety and a rising number of workers have contributed to the decline in claim frequency. However, he adds that training within organizations is critical to minimize the number of injuries, especially in the
“The frequency is down, but the cost of treating catastrophic claims increases continually, and that’s a huge concern that we have to deal with” Charles Caldwell, Midlands Management Corp.
Workers’ Comp Commercial Liability Public Entity Liability Commercial Auto Cyber LPTs
46-49_Sector Focus_Workers Comp-SUBBED.indd 46
higher. You wonder how much bigger they will get because you just don’t know what the next medical advancement will be and how much it’s going to cost, but the numbers are definitely growing.” Charles Caldwell, president and CEO at Midlands Management Corp., has likewise observed a rise in claims costs, despite the fact that he’s seeing a decrease in the frequency of claims. “The frequency is down, but the cost of treating
46
construction field, which is why Midlands provides loss control and safety training to clients who don’t have the resources to conduct it themselves. “Studies reveal that the majority of injuries occur in employees who have been on the job for less than a year, so training is a really big theme,” he says. “The broker’s job is to help the client reduce losses and therefore reduce premiums by making sure that training is in place.”
www.ibamag.com
25/10/2019 3:18:13 AM
The challenges of cost containment It’s estimated that employers pay almost $1 billion each week in direct workers’ compensation costs alone. Balancing responsibility to injured parties with the need for cost containment can be challenging in cases of catastrophic injury. Workers’ compensation carrier Applied Underwriters addresses this with an internal medical bill review analyst team, which ensures that only the appropriate medical treatment is certified. “The biggest difference between bill reviewers at other companies and our team is documentation review – basically decoding what is in a medical report to determine what should be paid,” says Shari Michaelson, director of medical networks at Applied Underwriters. “This gives us a big advantage in saving medical dollars. Many other medical review companies just run medical bills through bill review software. “The best medical care isn’t always necessarily the most expensive medical care,” Michaelson adds. “Our strategy is to provide the best care to get our injured workers back to work as quickly and safely as possible.”
STATES WITH PTSD-RELATED PRESUMPTION PROVISIONS Connecticut
Nevada
Florida
Oregon
Idaho
Vermont
Maine
Washington
Minnesota
Specialized expertise Source: Association of Governmental Risk Pools
Game-changing presumption laws For several years now, the leading legislative topic in workers’ comp has been presumption benefits for first responders. Most states have some variety of presumption laws for first responders, intended to make it easier for firefighters, police and emergency medical personnel to receive benefits for certain conditions. These employees are thought be at greater risk than the general public
“Presumption laws essentially create a different classification of injured worker that receives preferential treatment” Mark Walls, Safety National As part of Applied Underwriters’ commitment to preventing long-term disability, its Promesa Health division created the REVIVE program, which provides claimants with trained coaches who help them get back to work in the shortest time possible. The telephone-based program runs over a 10-week period. Upon enrollment, each claimant receives weekly calls from their assigned coach and a program kit, including a workbook that provides information about managing pain and encouraging activity and positive thinking to help overcome a disability. Claimants are also issued a pedometer to measure their progress.
of developing occupational diseases or suffering injuries due to workplace exposures. In contrast to most conditions covered under workers’ comp policies, injuries or diseases covered under presumption laws are assumed to be workrelated unless proven otherwise. “Presumption laws essentially create a different classification of injured worker that receives preferential treatment,” says Walls, who founded First National’s work comp analysis group. “For the entire workers’ comp system, the burden of proof is on the worker to prove the condition is related to a workplace injury, but with presumption laws,
www.ibamag.com
46-49_Sector Focus_Workers Comp-SUBBED.indd 47
47
and flexible program design supported with relationshipdriven service.
Let’s start the conversation.
SafetyNational.com
25/10/2019 3:18:19 AM
FEATURES
SECTOR FOCUS: WORKERS’ COMP
WORKPLACE INJURIES BY THE NUMBERS
4,414
Annual number of preventable injuryrelated workplace deaths in the US
3.1
Preventable injury-related deaths per 100,000 full-time equivalent workers
4.5 million
Annual number of work-related medically consulted injuries
$161.5 billion
Total annual cost of work-related injuries Source: Safety National Council, 2017
you reverse that. The presumption is that the workplace did cause the condition, so in order to contest it, you have to prove otherwise, which is very difficult to do.” It can be impossible for employers to take on this burden of proof because they usually don’t have the resources or the evidence to prove that the disease wasn’t a direct result of the job, so these claims end up being paid instead of contested. In many jurisdictions, new or revised presumptions are regularly added to the law, granting special treatment to first responders suffering from a variety of conditions thought to be connected with the exposures of their employment, including cancer, respiratory and heart diseases, and, more recently, posttraumatic stress disorder. In 2018, more than 100 new bills were introduced across the country to expand presumption laws
48
for first responders, many of which pertained to PTSD. A large portion of Midlands’ work is with public entity clients, so presumption law is a major concern. “When you talk about workers’ comp, you are talking about 50 different subjects in 50 different states,” Caldwell says – and this variance is especially true for presumption laws. For example, some cover only certain cancers, while others limit how long after retirement a cancer diagnosis is covered. For insurance brokers, one of the primary concerns surrounding presumption laws is the long-tail liability, as some jurisdictions allow a claim to be reported up to 10 years after employment has ended. With this in mind, brokers must advise public entity employers to make sure they have adequate insurance protection for future claims.
“Because of the long-tail nature of workers’ comp, and presumption law claims in particular, it’s really important to work with a carrier who is strong financially and will be there in the future,” Walls says. “You’re buying coverage today that you may not need for 30 years or more down the road.” Caldwell has observed a shift in many states toward taking presumption by statute out of the realm of workers’ comp and moving it to benefits, while in other states, it remains a workers’ comp issue. And while some form of workers’ compensation is compulsory for employers in the majority of states, most public entity employers are selfinsured, making it unclear how much they’re spending on workers’ comp claims. “They are not doing any data reporting to do an analysis of the costs, so these costs are essentially flying under the radar,” Walls says. “My advice to brokers is to really make sure clients understand that if they are not buying excess coverage over self-insurance, they have a lot of untapped potential liability for the future.”
www.ibamag.com
46-49_Sector Focus_Workers Comp-SUBBED.indd 48
25/10/2019 3:18:30 AM
www.ibamag.com
46-49_Sector Focus_Workers Comp-SUBBED.indd 49
49
25/10/2019 3:18:39 AM
SPECIAL PROMOTIONAL FEATURE
EMPLOYMENT PRACTICES LIABILITY
How ageism impacts EPLI A new Hiscox study has uncovered rampant ageism in the workplace, which will likely lead to an uptick in age discrimination claims. So what can employers do to mitigate this risk? HAVE YOU noticed a couple more gray hairs sprouting from your colleague’s head? Perhaps it’s due to the stress of working too hard, but it’s more likely that they’re just getting older. According to the US Bureau of Labor Statistics, workers over 55 will make up 25% of the US workforce by 2024, compared to 13% in 2001. As the workforce ages, a certain type of employment practices risk is growing in tandem: age discrimination. International specialist insurer Hiscox recently released its 2019 Ageism in the Workplace Study, which revealed that 21% of US workers aged 40 and older have experienced discrimination in the workplace because of their age. In addition, only 38% of workers said they’d received some form of age discrimination training in the past 12 months. Hiscox believes that as the average age of workers increases, if discrimination training remains subpar, the likelihood of discrimination claims being filed via employment practices liability policies will increase. “Age discrimination in the workplace is
50
an increasingly serious issue for businesses and employees as older generations continue to maintain their professional careers longer than their predecessors,” says Patrick Mitchell, management liability product head
if older, more experienced workers decide to leave due to age discrimination,” he adds. “That’s actually a serious issue. Forty-three percent of our survey respondents reported that they had left a company due to experiencing or witnessing age discrimination.” There are many steps organizations can take to protect themselves and their employees against the risks of ageism in the workplace. First, companies can provide workforce training, which is critical for educating employees about both overt and subtle forms of discrimination in the workplace. Having this type of training helps employees become an earlier warning system for the company, Mitchell explains. “Companies really need to focus on three things: prevention, detection and mitigation,” he says. “Prevention is all about training. Detection is the next important step. Employers need to be on the lookout for certain behaviors, whether that’s underrepresentation of older workers in new hires or promotions, or a certain age group being disproportionately affected by job terminations. What employers can do to detect age discrimination is conduct periodic anonymous surveys that allow them to gauge the extent of ageism in the workplace. Also, there are other things they can track in those surveys too, like harassment in general, so they’re really useful tools. “The final point is mitigation,” Mitchell
“Whenever a discrimination claim is filed or brought to light, employers need to investigate it immediately” Patrick Mitchell, Hiscox USA at Hiscox USA. “Discrimination of any kind brings serious reputational and financial risks to any business and can negatively impact a worker’s career trajectory. Age discrimination can impact a worker’s motivation, which in turn can hurt productivity, customer service and product quality. “Then there’s the issue of dealing with the loss of talent and institutional knowledge
continues. “Whenever a discrimination claim is filed or brought to light, employers need to investigate it immediately. They need to take each and every complaint seriously and investigate them thoroughly to ensure they’re doing everything they can to take care of the matter. And of course, employers can also purchase employment practices liability insurance to protect themselves.”
www.ibamag.com
50-51_Hiscox-SUBBED.indd 50
25/10/2019 2:34:37 AM
19938
50-51_Hiscox-SUBBED.indd 51 barcode_IBA_oct_PR.indd 1 19938 - us - 2019 brand campaign
25/10/2019 AM 18/10/20192:34:39 14:17:05
FEATURES
WSIA ANNUAL MARKETPLACE
SOME THINGS WORK BETTER TOGETHER
Healthy, growing and having fun IBA caught up with industry leaders at the WSIA’s biggest ever annual convention in September to get their insight on the excess & surplus lines marketplace SAN DIEGO’S laid-back vibes got a jolt of energy in late September when the WSIA Annual Marketplace arrived in town. In its biggest and boldest year yet, the Wholesale & Specialty Insurance Association welcomed more than 5,000 attendees to the convention, including 863 firsttimers, covering the full spectrum of E&S stakeholders: wholesale brokers, MGAs, insurance carriers, service providers and more. “The energy is electric,” said Joel Cavaness, president of Risk Placement Services and the 2019 president of the WSIA board of directors. “To cross the 5,000-attendee mark is fantastic. It reflects the health of the surplus lines industry and the substantial growth we’ve managed to achieve.” According to A.M. Best’s most recent report on the segment, the US surplus lines market nearly doubled its pace of premium growth in 2018, driven by a healthy national economy and new investments in operating platforms. The ratings agency reported specialty insurance growth of 11.2% in 2018, compared to just under 6% in 2017. “We’re healthy, we’re growing, and we’re having fun,” Cavaness said. “There’s something I always tell young people who are looking for a career,
52
52-55_Sector Focus_WSIA-SUBBED.indd 52
which is, ‘Don’t ever attach your career to an industry that’s going backwards.’ The insurance industry – and the surplus lines segment in particular – is growing significantly, and that’s because of our ability to look at new ways of doing things,
WSIA MEMBERS BY TYPE
26% US wholesale members US insurance market members Associate members Service members
45%
12% 17%
www.ibamag.com
25/10/2019 2:36:58 AM
new products, emerging risks and new distribution platforms. All of that creates a platform for future growth and forward momentum.” It also helps that the E&S market has “grown up” in recent years, Cavaness said, and become “much more professional in its approach.” This has resulted in more insurers being comfortable in handing over their underwriting authority to third parties like MGAs, MGUs and program administrators. The E&S market’s ability to be specialized, creative and provide alternative solutions to unique and complex risks is becoming “more and more attractive,” Cavaness said, especially as the surplus lines industry continues to make investments in data, analytics, and improved actuarial and underwriting standards. Cavaness is not alone in his enthusiasm about the ample opportunities in the E&S segment. “It’s
was recorded mid-year in 2018. Many standard carriers are shedding business, and it’s landing in our lap.” However, while surplus lines premium has grown for seven consecutive years, catastrophedriven losses and market competition have led to an underwriting loss for the segment for a third consecutive year, according to A.M. Best’s report. This has resulted in a shift in the rating environment, and both admitted and non-admitted insurers have increased rates across the majority of commercial lines. Pricing sensitivity is especially felt during periods when standard-market carriers have the capacity and desire to take on borderline risks generally handled in the surplus lines market. “However, average rates have been rising for most commercial lines of coverage, as non-admitted and
“The energy is electric. To cross the 5,000attendee mark is fantastic. It reflects the health of the surplus lines industry and the substantial growth we’ve managed to achieve”
Like working with a Wholesale & Specialty Insurance Association member to find a custom solution to a nonstandard risk. WSIA members will help you craft cost-effective, innovative solutions for your specialty and nonstandard risks. Combining the strength of the former AAMGA and NAPSLO organizations, WSIA members are your source for expert solutions.
Joel Cavaness, WSIA president an exciting time to be in the E&S market,” said WSIA board member Brenda Ballard Austenfeld, who is managing director of RT Specialty and president of its national property practice. “We’re at an all-time high in terms of submission flow into the marketplace. I really envision this movement to continue for a long time and in a very stable manner. It’s the greatest segment of insurance to be in right now.” Many WSIA attendees pointed to the strong US economy as a major driver in E&S growth. “With a strong economy, the E&S lines market is thriving,” said Alicia Calhoun, leader of Jimcor Agencies’ brand-new energy, oil and gas practice. “In fact, market reports showed a 13% mid-year growth, which represents a 12.7% increase over what
admitted insurers focus on generating more favorable underwriting results, despite competition from standard-market companies for borderline surplus lines accounts,” said David Blades, associate director at A.M. Best. “The general marketplace is changing,” Cavaness said. “The rate environment – and people’s willingness to take large chunks of risk – has generally changed over the course of the last few months. Today, we’re seeing more and more carriers take shorter limits and make smaller bets, so to speak, so it takes a lot more effort to put together a large program with full limits. “There are a lot of people, especially in the younger generation, who have never delivered bad news to clients,” Cavaness added. “They’ve
www.ibamag.com
53
find WSIA members at wsia.org find WSIA members at
52-55_Sector Focus_WSIA-SUBBED.indd 53
wsia.org
25/10/2019 2:37:05 AM
FEATURES
WSIA ANNUAL MARKETPLACE
Members of the WSIA’s intern program at the 2019 WSIA Annual Marketplace
TOP 5 US SURPLUS LINES INSURANCE GROUPS
1 2 3 4 5
Lloyd’s of London Surplus lines DWP: $11.76 billion Market share: 23.6% AIG Surplus lines DWP: $3.55 billion Market share: 7.1% Markel Corporation Surplus lines DWP: $2.49 billion Market share: 5.0% W. R. Berkley Insurance Group Surplus lines DWP: $1.81 billion Market share: 3.6% Nationwide Group Surplus lines DWP: $1.80 billion Market share: 3.6% Source: AM Best
54
never experienced a firming marketplace. It’s our job to prepare our customers well in advance for what they might see in any particular year. Nobody likes surprises. Everybody in the chain needs to be educated on what’s happening in the marketplace, and perhaps more importantly, why changes are happening. I think we’ve probably missed a little bit of that ‘why’ piece in the past. Why are we seeing these results in the industry today? What happened to cause this? It’s social, it’s economic, it’s inflation – a lot of different things go into the overall health of the marketplace.” While nearly all conversations at the WSIA Annual Marketplace involved at least one mention of a hard or firming market, there are some who believe the industry still has a long way to go before it corrects itself. Alan Jay Kaufman, chairman, president
and CEO of H.W. Kaufman Group, said that for many risks, “premiums are still way too low,” adding that overcapacity in the marketplace is driving insurance companies to compete on rate. “If insurers give their underwriting authority to a lot of different parties, the only way for many of these companies – mainly wholesalers – to compete is on rate, so they’re driving rate down,” he explained. “If distribution is more restricted and selective based on the profit and performance of the wholesaler, I think rates will go up, and the companies will have a better experience, with more profitability and premium. “We’re still a long way from those changes,” he added, “but we’re moving in the right direction. I’m not excited about a sudden market shift. Rather, it’s more gradual, which I think is a good thing. But
www.ibamag.com
52-55_Sector Focus_WSIA-SUBBED.indd 54
25/10/2019 2:37:11 AM
ORDINARY PEOPLE GETTING THE EXTRAORDINARY DONE
“Premium is still way below where it needs to be for the risks at hand. The industry recently has been hammered by CAT weather … and rates are still inadequate to deal with that”
Let us go to work for you today. With Midlands, you have access to the world’s foremost carriers and programs.
Alan Jay Kaufman, H.W. Kaufman Group premium is still way below where it needs to be for the risks at hand. The industry recently has been hammered by CAT weather, whether it be hurricanes or wildfires, and rates are still inadequate to deal with that.” However, as Kaufman mentioned, things seem to be moving in the right direction.
E&S insurance providers are transforming with new digital capabilities and tackling the challenges of the transitioning marketplace, while also finding risk transfer solutions for the myriad emerging risks corporate clients are facing – all of which points to an exciting year ahead for WSIA members and others in the E&S market.
www.ibamag.com
52-55_Sector Focus_WSIA-SUBBED.indd 55
55
A Safety National® Company
midlandsmgt.com marketing@midman.com
25/10/2019 2:37:16 AM
FEATURES
SECTOR FOCUS: PROFESSIONAL LIABILITY
Rising awareness drives demand The current hardening in the professional liability market is being propelled by a number of factors, including a growing awareness of the need for this coverage. IBA spoke to experts in the segment to find out more
PROFESSIONAL LIABILITY coverage is vital to help protect businesses from costly lawsuits – and the scope of what’s covered by professional liability today is greater than ever before. As awareness rises about the need for this coverage, experts are seeing a hardening in traditional sectors within the market. Small businesses in particular are increasingly aware of the availability of professional
nesses, any number of diversified claims might come through that we haven’t seen before,” Rotondo says. “These new emerging risks are really what’s difficult for brokers to harness.”
Traditional sectors One prevalent trend Rotondo has observed is that the real estate market within professional liability has been heating up with
“I think we’re definitely going to see some continued hardening in a lot of the traditional sectors” Nicholas Rotondo, Tokio Marine HCC liability due to advertising or recommendations from brokers, according to Nicholas Rotondo, director of underwriting and MPL product leader at Tokio Marine HCC’s cyber and professional lines group. Contracts have also evolved over the years and frequently include professional liability, further driving the demand. “As we get more nontraditional professional risks emerging and more small busi-
56
“One of the primary casualties is the real estate market, including property managers, mortgage lenders, real estate agents and title agents,” he says. “Markets are definitely responding. Some are increasing prices and increasing deductibles, and some are getting out. Others are slower to respond, which is
PROFESSIONAL LIABILITY BY THE NUMBERS
$38.4 billion
Size of the global professional liability market in 2018
$45.6 billion
Projected size of the global professional liability market by 2024
regard to claims and a potential hardening of premiums. He believes this is being driven partly by class-action suits and partly by discrimination. Sometimes insureds may need to purchase a more elaborate policy that includes third-party discrimination. Rotondo notes that people often purchase a stripped-down sub-sector policy and then discrimination comes into play, so careful advice from brokers is key.
$15.7 billion
Medical professional liability’s current share of the global market
$7.5 billion
Lawyer’s professional liability’s current share of the global market Source: WiseGuy Reports
www.ibamag.com
56-59_Sector focus_Pro Liability-SUBBED.indd 56
25/10/2019 4:19:50 AM
keeping pricing down a little more than you would expect.” Professional liability for the real estate sector is particularly challenging for brokers to navigate, in Rotondo’s opinion, as markets are flooded by people looking to diversify their investments through real estate. The role of a real estate agent or property manager has also become far more complex from an individual risk standpoint, as they often own the property or may have been involved in developing it or hiring contractors, leading to an increase in claims. “What we used to write as a prop-
erty manager or real estate agent has now been transformed into something totally different,” Rotondo says. “That’s what makes it so difficult as a sector from an underwriting perspective.” He advises brokers to look carefully into any potential risk to ensure they have full awareness of the exposure at the start of the underwriting process to avoid complications down the road. Another traditional sector that Rotondo is monitoring from a professional liability perspective is the insurance agent market, which is also beginning to harden. The market is seeing many new entrants, while
many insurers are also exiting the space due to a lack of adequate funding to cover losses. “There has definitely been more exiting and hardening of that market lately, which is good for the sector because it was pretty underpriced for a while,” Rotondo says. Collection agents are heavy hitters from a claims standpoint, as people are recognizing that they may have been treated badly and need to take action, Rotondo says, adding that “we’re seeing a massive amount of crossaction lawsuits and Fair Credit Reporting Act lawsuits because of the day and age we live in.”
www.ibamag.com
56-59_Sector focus_Pro Liability-SUBBED.indd 57
57
25/10/2019 4:19:54 AM
FEATURES
SECTOR FOCUS: PROFESSIONAL LIABILITY
MEDICAL PROFESSIONAL LIABILITY PREMIUMS BY STATE
$1.64 billion New York
$754.1 million California
$666.8 million Pennsylvania
Best practices for loss prevention are key within the professional liability space. It’s something AmTrust Financial Services focuses on by working closely with clients. “Here at AmTrust, we have a special liability book of community banks, and we work with them closely to make sure they have best practices in order to assist them with running their business in partnership with us,” says Robert Pizarro, VP of commercial specialty and head of the professional lines division at AmTrust North America. Pizarro advises brokers to market coverage correctly and to distinguish between various coverage forms because the market is not standardized. Brokers also need be informed
specified professions. The application process is lengthy for specified professions, which allows underwriters to do a deeper dive into the exposure for that profession to ensure all bases are covered. Pizarro recommends a careful analysis of specified professions to discern what the client does and what services they provide. Looking forward, AmTrust plans to introduce a professional liability product for the miscellaneous market, which will cover up to 60 professions, making it a one-stop shop for professional liability needs. And as carriers focus more on automation in the years ahead, Pizarro predicts that speed will be paramount, pointing to a growing trend of basing underwriting on a minimal
“It’s definitely an education process for the brokers to make sure clients are informed of loss prevention in best practices”
$588.2 million Florida
$489.3 million
Robert Pizarro, AmTrust Financial Services
Illinois
$421.2 million New Jersey
$320.2 million Massachusetts
$300.1 million Texas
Source: Statista, 2017
58
Loss prevention
about what the carriers they’re partnering with offer. “They need to make sure they go over coverage differences from the definition of what the service is, as well as exclusions involved,” he says. “It’s definitely an education process for the brokers to make sure clients are informed of loss prevention in best practices.” According to Pizarro, the market for professional liability for certain professions is becoming more competitive within the stand-alone market. “Any time you deal with specified professions such as healthcare, architects, lawyers and engineers, it becomes more difficult and more underwritingintensive,” he says. AmTrust boasts a breadth of verticals, including a risk division that handles these
number of questions to turn around a quick quote. Automation and AI will undoubtedly impact the way services are delivered, too. For his part, Rotondo foresees an ongoing hardening of the market as a result of a lot of traditional business-to-consumer risks. “I think we’re definitely going to see some continued hardening in a lot of the traditional sectors such a real estate, insurance agents, accountants and lawyers,” he says, “and we’re going to continue to see claims develop, which will cause a continued hardening of pricing. There might be some folks who will need to exit the market because they are too heavy in one of those sectors, so that limits the overall carrier count, which then continues to harden and so forth. We are on that end of the insurance underwriting cycle.”
www.ibamag.com
56-59_Sector focus_Pro Liability-SUBBED.indd 58
25/10/2019 4:20:00 AM
IBA su
MAGAZINE The country’s leading business magazine for today’s sophisticated commercial insurance broker/agent.
WEBSITE Breaking news, in-depth profiles, features, online forum and Insurance Business TV
ENEWSLETTER Daily news service delivered straight to your inbox every morning
www.ibamag.com 59 Find out more and subscribe at insurancebusinessmag.com/us/
56-59_Sector focus_Pro Liability-SUBBED.indd 59 IBA subs ad2 2018.indd 1
25/10/2019 10:49:19 4:20:09 PM AM 14/03/2018
FEATURES
FAILURE
Six ways to ‘fail better’ Changing your perspective is the key to making failure a stepping stone rather than a breaking point. Aytekin Tank offers six suggestions for how to do it
“EVER TRIED. Ever failed. No matter. Try again. Fail again. Fail better.” Samuel Beckett’s famous words have a nice ring to them. And for a long time, they’ve permeated the wider circles of entrepreneurship as a kind of mantra. Failure is necessary. Failure is humbling. Failure is … almost trendy? At least on the outside. Backstage, we scramble hysterically to avoid it at all costs. After all, businesses rely on consistency, predictability, and success – the opposite of failure. And let’s be clear. Taking a glib, cavalier attitude toward failure is dangerous. Entrepreneur turned venture capitalist Mark Suster argues that the ‘fail fast’ mantra is “wrong, irresponsible, unethical and heartless. Tell that to the person who [gave] you $50,000 of their hard-earned money and entrusted you to try your best.” Failure certainly isn’t something to seek out. But it is inevitable. And with the right perspective, it can be transformed into something altogether more positive.
1 60
Manage your reaction When we hear billionaire moguls like Richard Branson or Jeff Bezos wax
lyrical about the benefits of failure, what they really mean is this: You need to be prepared to experiment, to take risks that don’t always pay off. What matters isn’t whether you manage to avoid failure altogether, but how you react to it when it does. We can let failure drag us down. Or we can let it shape us. Here’s the thing: Growth and comfort cannot coexist. When we fail, something inside us inevitably changes. And by embracing that feeling of change instead of fearing it, we can use it to our advantage. Ray Dalio, founder of Bridgewater Associates, discusses this sensation in his book, Principles: “I call the pain that comes from looking at yourself and others objectively ‘growing pains,’ because it is the pain that accompanies personal growth. No pain, no gain.” It’s no coincidence that the most successful people have also failed the most: Richard Branson saw Virgin cola, cars and wedding dresses crash and burn. James Dyson made 5,127 unsuccessful prototypes. Thomas Edison tried over 1,000 patents. Even Jeff Bezos endured the spectacular flops of Amazon Auctions and Amazon Z. Did they seek out failure? No. But they
took an experimental approach that ultimately led to incredible achievement among the failures.
2
Start with a light touch
Some ideas look fantastic on paper and then nosedive. Others seem like flash-in-the-pan madness and then go on to make millions. Basically, it’s impossible to predict how your market, circumstances and customers will change. As entrepreneur Paul Graham once remarked, “You haven’t really started working on [your idea] until you’ve launched.” When you devote a ton of energy, time and money to something, you develop a strong sense of ownership toward it. It becomes your baby, a little seedling of hope. Naturally, it’s hard to let go of. But attachment clouds judgment. It causes smart people to cling to
www.ibamag.com
60-62_BizStrat_Fail Better-SUBBED.indd 60
25/10/2019 2:38:04 AM
When we fail, something inside us inevitably changes. And by embracing that feeling of change instead of fearing it, we can use it to our advantage ideas well past their sell-by date, hoping for a sudden return on investment. The prospect of failure takes on a very different form when it’s not costing anyone their money, their time or their sanity. So start projects with a light touch and an open mind. I can vouch for this approach: JotForm started as a pressure-free side project, which meant I could test it as a fun hypothesis rather than a serious source of income.
Learn to be hyper-frugal with time, finances and resources, at least in the early stages of a venture. Then if it flops, it’s less of an ego blow and more of a learning curve. Plus, testing quickly and cheaply gives you scope to try a different, better idea. Soon.
3
View rock bottom as a starting point
Travis Kalanick’s first startup declared bankruptcy before he founded Uber. Oprah
Winfrey was fired from her job as a reporter before she became a household name. Steve Jobs was forced out of Apple before making a glorious comeback. When we see people doing incredible things, we forget they often started from nothing – or worse. We see rock bottom as a conclusion. But if you look at it from another angle, it’s a foundation. That’s because falling down – however humiliating it may feel — has positive side effects. It forces us to start fresh. It breeds humility. Failure simplifies by process of elimination. It removes excess noise and hurdles, giving way to greater movement. Another consequence of failure is total freedom. With nowhere else to fall, we can let go. Losing everything should never be glorified. But we must remember that we can build from the ground up.
www.ibamag.com
60-62_BizStrat_Fail Better-SUBBED.indd 61
61
25/10/2019 2:38:08 AM
FEATURES
FAILURE
4
Endure your limitations
Failure hurts because it strips away. But when we’re left with the bare bones of an idea, something magical can happen. We’re forced to endure limitations and do more with less. It’s easy to assume that more is more – more money, more support, more time – but in reality, a sense of abundance can be treacherous. In The Paradox of Choice, Barry Schwartz points out how backward our thinking is. He explains that, despite modern culture’s obsession with freedom of choice, more choice equals less action: “Learning to choose is hard. Learning to choose well is harder. And learning to choose well in a world of unlimited possibilities
suggests you identify your ‘non-negotiable’: the one thing you are not willing to budge on, no matter what. Then lose the obsession with everything apart from this. It’s easy to get attached to a particular version of an idea. And if it doesn’t pan out the way you’d expected or planned, you might feel tempted to give up. For instance, your non-negotiable could be running a profitable business. But there are thousands of ways to achieve this that don’t follow the conventional trajectory; you just need to be open-minded. I like Jeff Bezos’ mindset for Amazon: “We are stubborn on vision. We are flexible on details.” So you might accept defeat on a version of your idea, but that doesn’t mean you need to
Failure shouldn’t be underestimated, but it shouldn’t be feared, either. Because mistakes are an opportunity to adapt, learn and grow is harder still, perhaps too hard … But by restricting our options, we will be able to choose less and feel better.” Having too many options is paralyzing. Instead, working with the bare minimum streamlines. It clarifies. It lets us see clearly. Limitations drive resourcefulness and fuel inspiration. Learn to see them as a blessing, not a curse.
5
Know when to be flexible and when to persist
Every successful person has had moments of self-doubt but persevered. Grit and determination – even in the face of brutal setbacks – are crucial to realizing an ambition. But equally, “never give up” is terrible advice. It’s just as important to know when to pivot, adjust or bow out altogether. So how do you know when to stick with it and when to quit? Author James Clear
62
quit. You’ve just gone slightly off-script. Get up, dust yourself off and try a different version. Once you change your perspective on this, you’ll be able to see mishaps as interchangeable details rather than abject failures. If you believe what you have is worth showing to the world, endurance matters. If you try once to get a ball in a hoop, it’s likely not to go in. If you try a hundred times, it will. Persistence increases your odds of success. So be resolute in your non-negotiable. Stick with it. And be open to getting everything else wrong.
6
Realize that failure delivers knowledge
According to a 2016 article published in the Harvard Business Review, of the main reasons companies struggle to grow is due to fear of failure; risk-averse working cultures are blamed for lack of innovation. But failure
is impossible to avoid. And by identifying where things went wrong, we can extract extreme value from tricky experiences. Failure shouldn’t be underestimated, but it shouldn’t be feared, either. Because mistakes are an opportunity to adapt, learn and grow. Ed Catmull, Pixar’s president, agrees: “Mistakes aren’t a necessary evil. They aren’t evil at all. They are an inevitable consequence of doing something new … and should be seen as valuable.” Track and measure projects from the beginning. If things don’t work out, you’ll have a clear indicator as to why. Crystallize these insights. Look for patterns. Develop a formula to follow next time around. Reflect on the positives, too. Ask for feedback and share your thoughts. There’s so much to be learned about ourselves and others if we can push past the discomfort of examining our failures. Worstcase scenario, we make sure it doesn’t happen again. Best-case scenario, we gain knowledge we can apply to other areas of our life. It takes guts to stick with a venture through thick and thin. But it takes just as much courage, if not more, to know when to duck out, conduct a post-mortem and move on. We shouldn’t glorify failure. But we should celebrate the resilience it takes to bounce back. Growth occurs alongside discomfort. Boredom and frustration are the foundations of incremental improvement. And sometimes you need to go back to move forward. In other words, what feels like failure is often success in disguise. Aytekin Tank is the founder and CEO of JotForm, an online form creation software with four million users worldwide and more than 100 employees. A developer by trade but writer by heart, Tank shares stories about how he exponentially grew his company without receiving any outside funding. For more information, visit jotform.com.
www.ibamag.com
60-62_BizStrat_Fail Better-SUBBED.indd 62
25/10/2019 2:38:13 AM
PEOPLE
CAREER PATH
MAKING CONNECTIONS Josh Brekenfeld’s career has spanned various fields and countries, but it all comes down to linking clients to resources
Brekenfeld’s passion for history and vision of himself as an academic was rerouted when he was pulled aside by the professor of one of his required classes: politics. “He said, ‘I don’t know why you’re a history major; everything you like about it is really political science.’ He secured me an internship with Senator John Edwards; that’s where I learned it was OK to be excited and active and voice opinions.”
2000
EMBRACES POLITICS
2014 JOINS LLOYD’S When his husband received a job offer in London, Brekenfeld’s sense of adventure came to the fore. “I couldn’t pursue [US] politics in London and couldn’t practice law here. I packaged my skills and went on a rampant campaign of meeting anyone who would meet with me. Lloyd’s is an institution, like the Senate. Even though the information was new, it felt familiar, and it turned out I loved it.”
2016 DEALS WITH BREXIT His position as relationship manager put Brekenfeld in pole position when the Brexit result took everyone by surprise. “All businesses were coming to the reality of what it meant. My job very quickly became a full-time supporting Brexit role. If we didn’t do something, we were going to lose 14% of our overall book. Some of it recalled my days on the Hill; that muscle memory came back.”
2019 FINDS A GLOBAL PERSPECTIVE Brekenfeld decided to leave Lloyd’s for the chance to take a global view as Aspen Insurance’s director of global corporate development. “Aspen is at an interesting time in its history: It’s been acquired, and we’ve been given the mantle to point it in the right direction. The ability to encourage innovation in our business, reduce frictional costs and build a more diverse and inclusive workforce is paramount, and they’re important goals for me.”
2009 STARTS LAW SCHOOL Working in the DC office of a senator brought Brekenfeld to the realization that most of the leaders held law degrees or MBAs. “I thought I had to go to law school. I failed my entrance exam twice; the third time, I was wait-listed and then got in, and it ended up being perfect timing. I was in the library on the weekends and working with the Senate committee during weekdays.”
2014 GETS A LEG UP A move into a relationship management position expedited Brekenfeld’s progress in the insurance world.
“When I started at Lloyd’s, gas started getting poured on my career. It links back to what I was doing in the Senate – helping companies tap into resources that could help them. The companies that operate in the Lloyd’s market are the nuts and bolts of the job” 2017 GAINS OVERSIGHT A move into the role of oversight manager allowed Brekenfeld to oversee the connection between Lloyd’s and 10 companies in the Lloyd’s market, boasting a cumulative annual gross written premium of more than £4 billion. “It was probably the most interesting time for me – the role involved looking after this business from a regulatory perspective. It was still the same skill set, but on a different subject matter. It’s the other side of the shop.”
www.ibamag.com
63_Career Path-SUBBED.indd 63
63
25/10/2019 2:38:42 AM
PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email iba@keymedia.com
Tilton’s training regime has her in the g ym four a nd a half hours a day, starting at 2:30 a. m.
281 lbs. Tilton’s best ever bench press
402 lbs.
Tilton’s best squat, which is also the record for Masters 2
419 lbs.
Tilton’s best deadlift; she aims to beat the record of 440 pounds
NEED A LIFT? For Cindy Tilton, there’s nothing better than competing to break her own weightlifting records CINDY TILTON has breast cancer to thank for her passion for weightlifting. Following surgery, Tilton, a rating specialist at AmWINS, “started making life changes,” which included joining a cancer recovery group at the local gym. She soon became “intrigued by the weights and started lifting,” she recalls. “Within
two months of working with a trainer, he wanted me to start competing.” In the six years since, Tilton has gone to meets at least twice a year. She competed for the US in bench press in Texas in 2017, Finland in 2018 and Tokyo in 2019. Her next challenge will be the USA Powerlifting 2019 Raw Nationals in
Chicago (“raw,” in this case, means that no special equipment is allowed), where she will compete in the squat, bench press and deadlift. What draws Tilton to the sport goes beyond the physical. “I love the sense of empowerment,” she says, “and the community is awesome.” Photo credit: Project Invincible/USA Powerlifting
64
www.ibamag.com
Proudly brought to you by the Business Publishing Company of the Year Print
Digital
Events
FIND OUT MORE ABOUT US AT WWW.KEYMEDIA.COM
MPAS
PUBLISH AWARDS
TABBIES
azbees
The BIG 95
COPA
APEX
MAGGIES
EXCELLENCE AWARDS
BELL AWARDS
Sydney | Auckland | DENVER | TORONTO | London | Manila | Singapore | SEOUL
64-IBC_Other Life-SUBBED.indd 65 KM Branding NAUK-2.indd 1
25/10/2019 13/07/2018 2:39:37 1:55:41 AM
Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com.
©2019 Applied Underwriters, Inc. Rated A (Excellent) by AM Best. Insurance plans protected U.S. Patent No. 7,908,157.
OFC Spine OBC-SUBBED.indd 3
25/10/2019 3:36:55 AM