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Contents
TheNationalAlliance.com
FEATURES
COLUMNS
4 Imagining the Agency of the (immediate) Future
12 Refuting Myths and Misconceptions About Residential Water Damage
Tom Barrett, CIC, AAI, describes how the industry’s landscape is changing before our very eyes, and so must we—to survive.
8 What Got Us Here Won’t Get Us There
Laura Sherman, CPRM, CAPI, presents an insurance agency’s roadmap to a thriving future.
16 Imagination Through Our Insurance History
Richard Rudolph, Ph.D., CPCU, ARM, AIAF, APA, ARP, AAM, tells a light-hearted history story you’re sure to enjoy.
28 Welcome to High School
Dr. Deb Davis initiates a new partnership with Texas high schools that holds incredible potential for bringing new talent into our industry.
Anne Martin These myths just don’t hold water.
Paul Z. Martin, CPCU, describes how “minor” legislative changes to insurance rules can cause chaos if not dealt with strategically.
20 Keeping an Eye on Small Changes 24 Environmental Financial Assurance for Contractors
Chris Bunbury, eS, looks at the federal laws related to environmental financial assurance, as well as the importance of these instruments for contractors.
30 California in Crisis
Courtney Kerr, CPRM, CISR This first installation of “Courtney’s Corner” discusses the struggles facing the California homeowners’ insurance market.
NEWS 22 Your Career, Your Choice
A visual guide to your many update options.
IMAGINATION
32 Ask Bettie
Bettie shares long-time designees’ perspectives on the value of National Alliance education and designations, with a call-out to hear YOUR story.
33 Learning Horizons
We’re debuting an exciting new online learning experience that increases engagement and enhances success.
34 The Dallas MEGA Seminar
This is an event you won’t want to miss— join us for new topics, livestreams, and a memorable 50th Anniversary celebration.
36 In the Spotlight
Industry accolades and achievements.
Reimagining
the Risk and Insurance Industry Panelists
J. Ralph Borneman, Jr., CIC
Diane Masterson, CIC, CPCU
Darryl Coleman
Victor Tang, CIC
Alivia Cooper, M.S., CIC, CRM
Michael “Doc” Terry, Ph.D., CHA, CHE
Kyle Drawdy, CIC, ARM
Janelle Dargham
One of the exciting new things we’re bringing to MEGA Seminars is livestreamed conversations with industry leaders. Scan the QR code above to access the panel discussion conducted at the Orlando MEGA in June, as well as several other great video presentations. Go to page 34 to read about ALL the reasons why you won’t want to miss the 50th Anniversary Dallas MEGA Seminar in October. alliance@scic.com • 800-633-2165
EXPERT PERSPECTIVE
This issue of Resources magazine takes a look at our industry through the lens of one of the The National Alliance’s guiding principles—Imagination. Imagine with us for a moment: What does the future look like for successful insurance agencies? In short, the future will not be like the past, and success depends on imaginative responses to a changing business environment. What sorts of things should you be “imagining” at your agency? We asked two highly successful and experienced industry practitioners who focus in different areas of the business for their takes on the subject. In the two articles that follow, Tom Barrett, CIC, AAI, and Laura Sherman, CPRM, CAPI, reveal their perspectives— which are shared in some respects while differing in others—about the ways agencies need to adapt to stay relevant and successful in our evolving marketplace.
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RESOURCES | Fall 2019
By Tom Barrett, CIC, AAI
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s of mid-year 2019, through mobile apps and smart mergers and acquisitions devices. The agency of the future continue to occur at will have a strong digital presence record pace. The larger with reduced overhead on a physical agencies are getting plant. Let’s face it—convenience is a larger, the captive agency world is factor when it comes to the behavbecoming obsolete, and local indeior of human beings. In large cities, pendent agencies are under increased nobody wants to drive across town pressure to respond to a wide variety to sit down with you—or any other of economic, social, and technologiagent—when they can accomplish cal upheavals, many of which will the same thing from wherever they become the new “realities” of tomorhappen to be. row. As we look at the future, there We’re no longer a service industry. are a number of changes that must Some reports show that up to 73% of be faced for an agency to remain consumers prefer self-servicing capacompetitive and bilities to access successful. certificates or A word of warnauto ID cards. ing is in order For many other here—some of you For 100 years, agency funcare not going to tions, the ability like my observathe independent to interact tions. But as I see with the digital it, our industry is agency world relieves going through the clients from gomost significant distribution ing to a physical metamorphosis office and waitthat I have seen channel has been ing in line for in my forty-year service. As the career in the secure. Today’s consumer conindustry. There tinues to evolve are “yea-sayers” consumer and technology and “naysayers.” becomes more There are those behavior has available and who scream, “it mainstream, will never hapchanged that… agencies will pen,” and those see a continued who believe that reduction in it will; agencies their service that embrace opportunity, and those role. The agency of the future will be that never see the train that is coming sales-minded and focused, looking down the track. Let’s pretend that toward maximizing revenues through I’m the engineer on that train. The the sale of multiple products per caboose has a little different view. client with targeted revenues per Here’s what I see as I look at the account. More and more, servicing world in front of me. will be done online and by service Brick and mortar are becoming obsolete. With technology there is now little reason for the expense of a brick and mortar store. Technology allows us to be as local as “in your pocket”
centers. Technology will continue to change our world. With AI (artificial intelligence), improved devices, analytics, new platforms, and the Internet of Things, Fall 2019 | RESOURCES
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EXPERT PERSPECTIVE we will witness the unrelenting expansion of technologies and automation—not only in the commoditized personal lines world but also in areas such as small commercial. The idea of having data magically fill in an application on your smart device while analytics created by algorithms produce an instantaneous rate within nanoseconds is real, here, and available today. The need for home offices and underwriters to review smaller and less sophisticated accounts is becoming a thing of the past. Surely everyone has seen the predictions suggesting that up to 45% of personal lines revenue will evaporate during the next twenty years? The agency of the future must be focused on other lines of coverage and cross-selling. The sharing economy will eat into your revenues. The new economy where millennials share residences, offices, scooters, bicycles, automobiles, and an ever-increasing list of other things is a reality that won’t go away. User
Learn More, Earn More To learn more about effective Agency Management techniques, look to the CISR Agency Operations or CIC Agency Management course— both are offered online as well as in a variety of classroom locations across the nation. And, because Tom points out in his article that a strong sales focus will be key to the survival of agencies, you may want to consider taking a Dynamics of Selling course. Tom is instructing Dynamics of Selling on Sept. 10–12 in Medina, OH, Sept. 30–Oct. 1 in Buffalo, NY, and Nov. 5–7 in Spartanburg, SC. For a complete schedule, visit scic.com.
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access based on demand will condoing business is increasing. Agency tinue to rise, as will the number of commissions are under pressure due insurance companies that are willing to carriers looking at other distributo write insurance based on pay-pertion options that will reduce costs. mile, or other per-use calculations. Smaller agencies are struggling to For example, car leases and rental maintain their clout with carriers agreements will come complete with that are increasingly disinterested in pay-for-use insurance products. small books of business. The botLittle by little, these trends will betom line appears to be this—agencies gin to eat into your agency revenues. that embrace a new focus on selling, The agency of the future will maingrowing, or becoming a part of sometain a strong digital presence and thing bigger may see their revenue will brand themselves through their percentages increase while smaller, electronic relationships. Our technolnon-performing agencies can expect ogy will no longer be viewed as an carriers to reduce their incomes. expense, but as Insurtech will an investment have a major in a future that impact. focuses on new The days of Just look around business, new reat the millions lationships, and creating a book of dollars being new revenues. thrown at in-
of business and Traditional surtech (insurinsurance ance technology) then sitting on it channels and start-up will need to companies that for a lifetime are reposition. hope to make For 100 years, the buying expequickly coming the independent rience friendlier agency distribuand more efto an end. tion channel ficient. Through has been secure. these technoloToday’s congies, insurance sumer behavior product access has changed that. Exclusive agency will become a 24/7/365 standard. channels are being abandoned, carriTraditional office hours and people ers are looking for multiple channel sitting behind desks waiting on the sales, and the independent agency phone to ring are over—maybe not must be positioned as a source of tomorrow, but very soon. Agency new clients and growing market personnel will need to become accusshare to maintain their presence. This tomed to change and embrace new blurring will continue to create opways of conducting business. portunities for those agencies focused Converging Trends on selling and growing. The days of There you have it—that’s where I see creating a book of business and then the industry going in the next twenty sitting on it for a lifetime are quickly years or so. But every day between coming to an end. now and then, things will continue Expense pressure on insurers and to change, and often at a pace that is distributors. unimaginable today. At some point, The greatest asset of insurance agenthese trends will converge into somecies is our clients, and everyone is thing that will change the face of our fighting for their share. The cost of industry forevermore. So what does
The State Winners and National Finalists of the 2019 Outstanding CSR of the Year Award have been announced! Visit scic.com/ocsry-2019 to find out who won in your state. The National Winner will be selected soon. Read the winner’s and finalists’ essays in your next issue of Resources magazine.
that mean for agents? Let’s look down the track again because there are also some trends that show what steps agencies can take today to ensure a successful tomorrow. The Future. In the highly regulated insurance industry, the one thing that every carrier and every new technology company struggles with is distribution. That’s where the agency of the future comes in. At this point, it is worth reviewing some of the points I made earlier. The agency of the future will: • have a strong digital presence with reduced overhead on a physical plant • be a sales-minded and focused agency that looks toward maximizing revenues through the sale of multiple products per client with targeted revenues per account • be focused on other lines of coverage and cross-selling • maintain a strong digital presence and brand themselves through their electronic relationships • be positioned as a source of new clients and growing market share to maintain a significant presence • employ agency personnel who can adapt to change and embrace new ways of conducting business
From my perspective, for the agencies that are paying attention and repositioning their agencies digitally, creating electronic relationships with their prospects and clients, and maximizing every dollar of revenue from those relationships, the future has never been brighter. Remember, the agent sitting in the caboose may have the perfect seat for looking backwards. But that is not where the train is going. The decision to shift viewpoints is yours, and the time to do it is now! Good luck and good selling! n
About the Author: Tom Barrett, CIC, AAI
Tom brings forty years of experience to SIAA and The National Alliance with expertise in a variety of areas. He has worked as agent and broker, program developer and manager, public speaker, and seminar leader. He is also one of the leading National Faculty for the Dynamics of Selling program. His sales training client list includes over a dozen regional and mutual insurance carriers and twenty-five of the nation’s top 100 insurance brokers.
President William T. Hold, PhD, CIC, CPCU, CLU Publisher/Senior Art Director Becky Keeling bkeeling@scic.com Editor-in-Chief Carol Crysup ccrysup@scic.com Senior Editor Donna Loughran Department Editors Deborah Davis, PhD, MEd, BA ddavis@scic.com Paul Martin, CPCU pmartin@scic.com Mandy Whorton mwhorton@scic.com Kelly Surles ksurles@scic.com Contributing Designer Jeff Buck Contributing Copywriter Griselda Castillo Resources is published by The National Alliance for Insurance Education & Research, P.O. Box 27027, Austin, TX 78755-2027, 800-633-2165, Fax: 512-349-6194, Internet: TheNationalAlliance.com, email: alliance@scic.com. At present, Resources is available to dues-paid Certified Insurance Counselors (CICs), Certified Insurance Service Representatives (CISRs), Certified Risk Managers (CRMs), Certified School Risk Managers (CSRMs), Certified Personal Risk Managers (CPRMs), and affiliates of The National Alliance Research Academy. Entire contents Copyright © 2019, The National Alliance for Insurance Education & Research. All rights reserved. Material in this publication may not be reproduced in any form without permission. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by The National Alliance, provided that the following words are included on any copy: “Reproduced from Resources with permission of The National Alliance for Insurance Education & Research.”
Resources is designed to provide accurate and timely information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in providing legal, accounting, or other professional services. If legal advice or other expertise is required, the services of a competent professional should be sought. The publisher has taken all reasonable steps to verify the accuracy and completeness of information contained in Resources. The publisher may not, however, be held responsible for any inaccuracies or omission of information in any article appearing in Resources. The National Alliance Standards of Conduct: scic.com/pub/media/docs/Standardsof Conduct.pdf
Fall 2019 | RESOURCES
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EXPERT PERSPECTIVE
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s we insurance agency professionals make plans for the future, the saying “what got us here won’t get us there” comes to mind. We can no longer rely solely on time-tested policies and procedures, technology, and familiar personnel strategies to take us into the next decade. As insurance advisors, we all need to begin laying the foundation for the future today so we can remain relevant to our clients and other stakeholders. In other words, we need to start working on the business rather than just working in the business. As we plan our time and resources in this endeavor, where do we need to be investing? Here are the top three things we should we working on weekly.
An Insurance
1. Build the Pipeline: Technology, Talent, and Products
To be ahead of the game, we need to use our imagination—to be in the vanguard of technology, talent, and products. Many insurance agents rely on insurers to drive innovation, but as the lines between insurers and insurance agencies blur, we as agents must take the reins before new non-insurance tech firms swoop in and disrupt the model. We all know what Uber did to the taxi industry, and how Netflix became the Blockbuster-buster. Technology The need for significant and discerning investment in the right technology cannot be overemphasized. Massive cyber security breaches have grabbed national headlines in recent years, and the frequency and severity of cyber-attacks are getting more intense by the day. As guardians of our clients’ confidential information, we must understand the data exposure threat, fortify our defenses, and adapt as attacks become more insidious. 8
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Technological advancement also presents enormous opportunity for our industry. In the era of Big Data, client information can be amassed and leveraged to anticipate a client’s needs. More than ever, partnering with the right data scientists, technology, and IT firms has become mission critical. The right partnerships will allow us to have the best of both worlds: a personal, local client presence empowered and protected by a robust digital platform.
Investing in technology can help augment the client journey and increase internal efficiencies and productivity. Talent Shortage According to Gartner’s Emerging Risks Survey,1 staff shortage has become among the top emerging risks organizations face globally. In April 2019, the U.S. unemployment rate was 3.6 percent—the lowest jobless rate since December 1969. Unfortunately for the insurance industry, vying for the attention of this relatively
By Laura Sherman, CPRM, CAPI
Agency’s Roadmap to a Thriving Future
limited talent pool is a challenge as our industry battles a perception as a less-than-trustworthy sector of the economy. It is vital that we as an industry modernize and articulate our value proposition to potential candidates. And we need to start now. We must begin to recruit new talent into our industry to build the next generation of industry professionals and leaders, keeping in mind that it takes two to three years to fully
train an account manager or sales for the family and pets—traditional professional. insurance companies and agencies Start with creating a meaningful are not nimble enough to respond purpose or mission statement for quickly to new and ever-changing your organization to attract new risks. talent to your Think about firm. Find a how slowly we charity or two responded to the and make phishared economy, All the industry lanthropy part the Internet of of your value Things, and even reports and proposition. the emergence of Purpose-driven a new hobby— experts agree: organizations consumer with a commitdrone piloting. we must become ment to their The Parrott AR communities Drone, a smarttrue advisors to outperform other phone-controlled organizations quadcopter for our clients if we two to one. Inconsumers, was terestingly, nextintroduced at wish to be in gen talent wants the Consumer to align with Electronics Show business in the firms who have in Las Vegas in a strong purpose 2010. Almost future. and commita decade has ment to their passed, and as communities. an industry, we Your purpose statement doesn’t still haven’t fully realized the vulnerhave to be fancy or complex. Think ability of claim costs for drones as it about what you do and how you help relates to violation of privacy, liabilyour clients focus their passions to ity claims, property damage, cyber achieve their dreams. Begin to share attacks, and even war. your firm’s purpose with the commu2. Become a True Advisor nity, your clients, and your team. All the industry reports and experts Products agree: we must become true adviClients crave options that offer tailorsors to our clients if we wish to be made solutions for their individual in business in the future. Clients risk exposures. Data and technology can now circumvent our industry’s are helping drive the confluence of historical business model and simply proprietary product creation with go to the web to comparison shop traditional and non-traditional capital and buy the cheapest coverage. We sources, but currently, the potential must develop ways to both be and be remains untapped. perceived as subject matter experts, According to the World Insurance as partners, and even as the quarReport from Capgemini,2 insurers’ terback who executes all our clients’ product pipelines are not aligned insurance needs. with clients’ growing concerns over If we can’t help them secure the emerging risks. From evolving social coverage they need, we better have a and demographic trends to rapidly relationship with someone who can. changing cyber advancements, Creating and nurturing meaningful disruptive environmental patterns relationships with risk management to new medical and health concerns Fall 2019 | RESOURCES
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EXPERT PERSPECTIVE vendors (alarm companies, actuaries, etc.) and other insurance professionals, will expand our ability to provide solutions and bring value to the client relationship. Seeking certification and insurance and risk management education to keep your knowledge and skills updated shows your clients that you are on top of emerging issues that may affect them. In short, we must be the one our clients think of when they buy a new house, need medical coverage for their employees, or qualify for Medicare. The relationship, rapport, and trust you engender as a true advisor for your clients will endure as our industry evolves. Risk Prevention As the risk landscape changes and we continue to experience severe weather events, the industry needs to educate clients on loss mitigation techniques and risk prevention services. Historically, these services were reserved for businesses and large complex personal estates. Today, everyday consumers want to protect their homes from anything from water damage to wildfires,
Learn More, Earn More The Certified Personal Risk Manager (CPRM) program provides practical and relevant information for insurance professionals working with affluent and high net worth clients—and it’s a great option for broadening your horizons while fulfilling your annual designation update requirement. Begin with the CPRM Personal Client Risk Management course to learn the value and importance of incorporating risk management into the insurance plan for clients with unique and complex exposures. 10
RESOURCES | Fall 2019
understand emerging risks, and coltinuing to evolve, our ability to meet laborate to get more personalized and exceed their expectations needs guidance and counsel. to keep pace. A 2014 Ernst & Young The 2019 World Global Insurance Insurance Report3 Survey5 found that found 45% of the 57% of consumers average business want to hear from Clients today customers are their agents at least willing to share semi-annually, and demand a additional data for only 14% are very risk control and satisfied with their frictionless prevention sercurrent outbound vices, and 36% are communications. experience. willing to pay for Clients today it. Cyber risk is on demand a frictionNo longer can the minds of many less experience. commercial clients. No longer can we we remain Are you offering a remain reactioncyber risk policy ary and think our reactionary… to every single retention numcommercial clibers will stay the ent? What are you same. Clients are doing to help your clients prevent not comparing us to the insurance losses from occurring? Partner with agency down the street, but rather to your insurance companies and local the exceptional client experience they vendors to become the go-to advisor enjoy with other vendors—whether for your clients and community. it is a credit card company, online retailer, or pizza parlor. Clients may 3. Enhance the Experience have found these vendors immediOur clients are our best potential ately responsive to them, recognizing source of client referrals. Who better them when they call, automatito advertise your value propositions cally pulling up their last order, and or articulate why someone should seamlessly completing a transaction work with you than your clients? because their credit card is on file. What are you doing today to culThink about it. Once you receive an tivate the fertile ground of client order from Amazon.com overnight, referrals? are you content to wait two weeks Bain Consulting conducted a for a similar product from a competstudy4 which revealed 80% of coming company? panies claimed to deliver a superior Our clients also crave a multicustomer experience, yet a staggering channel experience. They want 24/7 8% of their customers agreed with availability online, and we need to that assessment! Clearly, there is a adapt. Whether it is online access, disconnect. And, with client attitext, or telephone via extended tudes, behavior, and demands conGartner, Emerging Risks Survey, January 2019, https://www.gartner.com/en/newsroom/pressreleases/2019-01-17-gartner-survey-shows-global-talent-shortage-is-now-the-top-emerging-riskfacing-organizations. 2 Capgemini, World Insurance Report, May 2019, https://www.capgemini.com/news/ world-insurance-report-2019/. 3 Ibid. 4 Bain Consulting, October 2018, https://www.bain.com/insights/ customers-know-what-they-want-are-insurers-listening/. 5 Ernst & Young Global Insurance Survey, 2014, https://www.ey.com/Publication/vwLUAssets/ ey-2014-global-customer-insurance-survey-america/$FILE/ey-global-customer-insurance-surveyamerica.pdf. 1
Showcasing professionals who tackle loss during a crisis, advocate for education, and make a difference for the greater good. Meet our most recent Difference Maker—Debra Richardson, MBA, CIC, CRM, CPCU, AINS, Director of the RMI Program at The University of Texas at Dallas. Take a journey with us to learn how education played a central role in helping Debra break through industry stereotypes to excel in her career, earn multiple designations, and serve as an inspired role model. Go to scic.com/difference-makers (or simply scan this QR code by pointing your smart phone camera at it) to read about Debra and all of our featured Difference Makers.
hours, we need to begin preparing now for the next wave of service changes. But as an industry, we have historically been plodding in our processes and glacial in our response to change. As we all know, the number one reason clients leave advisors is due to lack of communication. In this ever-changing insurance landscape, severe weather is more common, rates continue to increase, and technology to prevent losses is pervasive. Personal and frequent connection with our clients and cultivation of our role as a counselor also needs to be more common.
be working together to move our firms and our industry forward.
Get Started
Collaborate. Find other industry professionals who are in a similar position as you to leverage resources and share ideas. Use outside service firms to provide 24/7 responsiveness, multiple communication channels for coverage, and customized customer solutions for inspiration.
Schedule time. First, schedule time each week to work on the business rather than just in the business. This goes for all of us, whether we are a relationship manager, sales professional or agency owner. We should all
Develop a road map. Use your imagination to create a client journey in which you put yourselves in your clients’ shoes. Outline the path and steps you think your client should take, the potential pitfalls, and how you want your client to feel. Do you communicate the appropriate information, expectations, and timing to your clients? Prioritize your game plan. Putting pen to paper helps you realize where you are today, your strengths in these areas, and where you can improve.
Invest in your firm’s future by taking time to create a new roadmap toward a thriving future—because the one that got us here, won’t get us there. n
About the Author: Laura Sherman, CPRM, CAPI
Laura is the Founding Partner of Baldwin Krystyn Sherman Partners & Baldwin Risk Partners. She specializes in providing risk management solutions for the affluent and for the collections of private collectors and museums. Laura was a valued member on the Advisory Committee that helped create the curricula for The National Alliance’s CPRM designation, and she is a member of The National Alliance Faculty. Fall 2019 | RESOURCES
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HIGH NET WORTH
Inform and Encourage Clients to Adopt a Mitigation Mindset
BY ANNE MARTIN
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s a high net worth personal lines risk manager who specializes in water damage mitigation, I speak to homeowners frequently about the peril of water. Although water damage is the most frequent cause of loss to luxury homes1, most people don’t appreciate the specific impact it could have on them—and therefore don’t take proactive steps to avoid it. For those of you who advise homeowners—high net worth or otherwise—you likely know the challenges that come with promoting preparedness. Following are the water damage assumptions we en-
MYTH: “It won’t happen to me.” Internal plumbing system water losses (from the pipes or water-based appliances and fixtures in the home) are the number-one cause of damage to high net worth homes.
According to AIG Private Client Group homeowners’ insurance loss data reported between 2014-2017. AIG Private Client Group is a division of the member companies of American International Group, Inc. (AIG).
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Water damage occurs more frequently than fire, theft, flooding or any other type of home loss. Most people know someone who has had a water loss if they haven’t experienced one firsthand. Those in the northern parts of the U.S. are particularly vulnerable, when frequent Although water and prolonged periods of severe damage is the cold can cause the most frequent pipes in hundreds of homes to freeze at cause of loss to the same time.
counter most often, along with the real facts based on our analysis of thousands of water damage claims. Anticipating and dispelling these notions up-front will hopefully help your clients sidestep costly losses (and headaches) in the future.
luxury homes1, most people don’t appreciate the specific impact it could have on them…
MYTH: “I had water damage in my home. But now that we fixed the cause, it won’t happen again.”
It’s understandable for homeowners to consider water damage to be an unlucky, one-off event. However, our data revealed the opposite to be true. Claim data analysis shows that a home that has had an internal system water loss is at least twice as likely to have another water loss, even after the original repairs were made. In some cases, it’s up to 3.5 times more likely to happen. MYTH: “A water loss won’t really impact me, because my insurance company pays for the damages.” Because water damage costs in most cases will be covered by one’s insurance company, people assume there will be little-to-no additional impact to their lives. That assumption could not be further from the truth. A reimbursement check cannot restore sentimental or one-of-akind items ranging from children’s artwork and cherished letters to delicate heirlooms and other original documents. Family members may have to live through disruptive repairs or be displaced from their home altogether. It also can take weeks or months to replace furniture, flooring, cabinetry and other furnishings—particularly when items are custom-made. In fact, the average water damage claim duration for a high net worth home is between two and three months, with many claims lasting much longer. Increasing concerns about mold issues are also adding to the time required for remediation. MYTH: “I have a high-end home, so I’m less likely to have a problem.” Water damage claims have been on the rise for the last decade, particularly in the high net worth segment. High net worth homes inherently have more exposure, as they typically have more than 40 water points in the home: five or Continued on next page.
Tactics To Mitigate Water Damage Home Maintenance
• Implement scheduled maintenance plans for HVAC systems, plumbing systems (including water heater review), fire sprinkler systems (conducted by a certified fire sprinkler company), sump pump systems, and roofing systems. • Use steel-braided hoses on washing machines rather than rubber ones, and replace them every ten years. • Regularly inspect water supply lines under sinks and appliances. Replace inexpensive plastic tubing and valves with metal or steel-braided connections.
Water Damage Mitigation Devices
• Install automatic condensate backup shutoff systems for air conditioning systems in HVAC air handler drip trays in case drain lines clog and back up. • Install individual appliance shutoff systems on washing machines, hot water heaters, or dishwashers. If they start to leak for any number of reasons, the water to that appliance will shut off immediately. • Install centrally monitored water sensors at water points in the house to send an alert if anything leaks or overflows. • The best protection is to install a whole house shutoff, which acts as a 24/7 security guard for the home’s domestic water supply. It can sense a leak anywhere in the house, including pipes, fixtures and appliances, and shut the water off before major damage occurs. Many of these devices are now IoT enabled, with apps that notify homeowners of issues such as freezing temperatures or unusual water use.
Other Proactive Best Practices
• Damage will naturally worsen if no one is home to detect a problem. When clients are away, they should arrange for a neighbor or caretaker to check in daily. A walk-through should include every floor and room with a water-consuming appliance. • During subfreezing temperatures, vacant homes should be checked twice a day. Also encourage a cold weather protocol including opening vanity doors to allow heat in, allowing a slow drip of water in bathrooms most susceptible to freezing, and making sure heat is kept at 65 degrees or more. • Install a basement sump pump. If one is already in place, make sure it has a backup power supply. • Install a permanent backup electrical generator to power critical systems, such as the furnace, alarm system, and sump pump. • If planning renovations, consider installing additional loss prevention measures that are best done during the course of construction. Fall 2019 | RESOURCES
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more bathrooms, multiple dishwashers, icemakers, wet bars, Jacuzzis, steam showers, and more. The more water points in a home, the higher the loss frequency. Each water point represents an opportunity for failures linked to connection points, supply hoses, valve assemblies, as well as the fixtures and appliances themselves. MYTH: “Water damage isn’t that expensive to repair.” In addition to exposure for increased frequency, high net worth homes face much higher loss severity. These properties often feature customized wall, ceiling, and floor finishes, custom trim and woodwork, imported materials, expensive electronics with extensive wiring, and bespoke amenities like wine cellars, golf simulator rooms and home theaters. Even a little bit of water in the wrong place causes
Learn More, Earn More To find out more about residential risk and coverages, take the CISR Insuring Personal Residential Property and CISR Personal Lines Miscellaneous courses. Go deeper into the subject with a CIC Personal Lines course and learn about policy coverages, limitations, and exclusions. To find an online course or a course in your area, go to the Course Schedule under “Menu” on the home page of our website (scic.com). For some seriously helpful reference material, get a copy of Chris Boggs’ new book, Homeowners’ Coverage: Managing Your Clients’ Most Valuable Assets, available at NationalAllianceBooks.com.
a catastrophic loss. For example, one section of damaged custom wood flooring may require an entire level of the home to be replaced. MYTH: “There’s nothing I can do to prevent water damage.” This won’t come as a surprise to insurance professionals, but there are many ways in which homeowners can combat the likelihood and severity of water damage. See the Tactics to Mitigate Water Damage recommendations on the previous page. MYTH: “Whole house shutoff systems are too complicated.” Whole house shutoff devices provide the best protection from a catastrophic internal system water loss. Initially there may be a learning curve, as with any new home, but most devices are now Wi-Fi connected and app enabled, making them more user-friendly than ever. AIG Private Client Group surveyed a group of clients who had installed automatic, whole house shutoffs over a nine-year period. More than 92% said they would install one again. Additionally, the devices reportedly caught leaks in more than 32% of the homes involved in the study, preventing extensive damage outright. Another study found similar results, indicating that whole house shutoffs can reduce up to over 90% of all internal system water claims. MYTH: “Water damage isn’t my fault, so it won’t impact my ability to buy insurance.” Homeowners undoubtedly have a responsibility to try and protect against the next loss. More carriers are seeing similar trends regarding water damage recidivism. As a result, some are not renewing homes with multiple water losses, or are requiring the installation of mitigation devices. In a study by the
California Department of Insurance study, 2017. http://www.insurance.ca.gov/0400news/0200-studies-reports/0250-homeowners-study/index.cfm (public domain).
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California Department of Insurance, 25% of the companies (surveyed) refused to renew the policies of customers who made one or two non-water damage claims in the past three years. And 32% refused to renew policies for people who made one or two water-loss claims in the past three years2. With luxury home claim costs increasing dramatically due to loss frequency, costs of materials and professional services, and the growing health concerns due to mold, carriers need to partner with their brokers, agents, and clients to raise awareness of water damage risk and its related repercussions. Fortunately, you are also in a position to empower clients to take action and lessen their chances of becoming another water damage statistic. Consult with the carriers you represent, particularly those with in-house loss mitigation capabilities, to devise the most effective strategy in your locale. n
About the Author: Anne Martin
Anne is the head of the AIG Private Client Group Water Damage Mitigation Team and has been in the insurance industry for 30 years in a variety of departments— bodily injury claims, risk management (commercial and residential), and loss prevention. With AIG for 11 years, she is a certified Level 1 Thermographer and a certified Continuing Education instructor. In the course of her career, she has inspected/assessed thousands of homes throughout the U.S., including the homes of some of the most prominent profile people in the country.
Fall 2019 | RESOURCES
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HISTORY MATTERS
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magination: Dictionaries define imagination as the ability to generate ideas and images in the mind without the input of the five senses. Walt Disney is often cited (incorrectly, however) as saying, “If you can dream it, you can do it.” We use imagination to make our knowledge useful in problem solving and to bring our experience into our learning process. But what role has imagination played in the development of insurance over time? “Can you imagine what happens to us when we die, Pe-ankhem-tanen?” some Egyptian said thousands of years ago. The image apparently was so unpleasant that Pe-ankh wanted to be carried into the afterlife in fancy style, but only the very wealthy could do that, so he (or someone else—who knows?) came up with the idea of a burial society, a way to accumulate funds to pay for an appropriate burial and funeral rites. This was, of course, an ancient precursor of the life insurance product that was transformed into its modern role by a savvy and imaginative underwriter named Richard Martin at the Old Drury Ale House in June 1536. Martin offered William Gybbons “assurance” that if he died within twelve months his widow would receive £500 in exchange for a premium of £20. Incidentally, Gybbons unfortunately died on May 29, 1537, a mere 345 days later, but Martin argued the claim was “not covered” because he had meant a policy term of twelve lunar months of 28 days each, or 336 days—not calendar months. Imagine that! In 1666, following the destruction of much of London—but not the Lombard Street area where most marine underwriters conducted business—a few more savvy underwriting chaps imagined that a “land-going” house was much like a sea-going vessel. While many of their less imaginative peers might 16
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Richard Rudolph, Ph.D., CPCU, ARM, AIAF, APA, ARP, AAM have suggested that these gents had paid a visit to one of the many Lombard Street pubs prior to making such an association, this detail is, unfortunately, lost to history. Nonetheless, having determined that a “land-going” house was indeed subject to many of the same perils as a sea-going vessel (except sinking or running aground obviously), they began writing what quickly became known as fire insurance. Not so many years later, the imagination and innovation of the Industrial Revolution altered almost everything that had come before in some way or another, on a scale and with a scope that was unimaginable. Suddenly, there were multiple modes of travel, and as people became more mobile, they also became more exposed to increased perils and hazards of travel. People were always mobile, but they traveled by foot, horse, or simple boat, and when they slipped, were bucked off, or tipped over, the incident was considered an act of ignorant beasts or human carelessness (Slip Happens!). With inventions like steamships that blew up or sank and trains that exploded or ran off the tracks, well, someone else had to be at fault, and that meant they should pay! That gave rise to travel insurance, the imaginative response that did not require expensive litigation to sort out a loss—and the formation of an insurance company whose sole business model was to write travel insurance, The Travelers Insurance Company of Hartford. The first policy (actually it wasn’t a real policy but rather an oral agreement meant as a joke, but it still would have been binding), insured a Mr. Bolton for his daily trip to the Hartford Post Office and back home again. The premium was $0.01, and the benefit, $1000. Fortunately for the underwriter, Mr. Bolton lived close to the post office. The first real policy was issued to The Travelers’ own president,
Fall 2019 | RESOURCES
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HISTORY MATTERS
James G. Batterson, on April 1, 1864, to insure Batterson’s travel on steamboats and railroads. And then there was the automobile, invented in Germany by Karl Benz but an idea quickly adopted by Ford, Oldsmobile, Chevrolet, Dodge, and others in America. Unfortunately, no one imagined how dangerous these things could be—that is, until pedestrians began competing with horse-drawn carriages and street cars on narrow and increasingly crowded streets. As it happens, there was some precedent for this type of insurance. An innovative British inventor developed the first electric auto and London underwriters were quick to insure its safe operation in 1895, but sadly, the extension cords were too short, and the vehicle never caught on with the general public. But with the gasoline-powered vehicles in America, something had to be done! A creative underwriter at The Travelers drafted an automobile liability policy which was purchased by Dr. Richard Martin (obviously not the same Richard Martin as the underwriter at Old Drury Ale House but perhaps a distant relative) in 1898. If you think about all the types of insurance policies that are available, it becomes increasingly obvious that all of these products resulted from someone thinking about solving problems in new and imaginative ways that related experience to knowledge and learning. But sadly, not all ideas are good ideas. Occasionally, there’s a clunker, like the Ford Edsel, the pet rock, Sony Betamax, R.J. Reynolds smokeless cigarettes, New Coke, and alien abduction insurance. Yes, you can insure yourself, if abducted by aliens, from the feelings of personal invasion and violation, mental distress, and bodily injury (excluding pregnancy), dismemberment, and death, assuming you return to earth to collect, that is. 18
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However, the policy is rarely purchased, and when it is, it is more like a white elephant gift than real coverage. Having said that, the very fact that this type of insurance can be purchased is proof beyond the shadow of a Martian moon or two of just how imaginative the insurance industry can be.
for the genesis of the independent agency system, how it has been used in countless agency start-ups across America, and how it continues to be used by insurance professionals just like you. Whether it is imagining a new agency, a new way of interacting more effectively with your clients, a new business practice, a new product
…with the rise of the independent agency system and multiple company representation, the need for independent, unbiased insurance education became a matter of necessity. Somewhere along the way between burial societies and automobiles, regulation came about. You can argue whether government action is an imaginative solution or something else, but that’s a different discussion. However, given the foregoing example of a claim being denied on the basis of a lunar calendar having been intended, but not written into the contract, it’s not so hard to imagine the other shenanigans that might have occurred. Regardless, insurance became regulated, with examples dating from as early as the 12th century. In America, regulation was prompted in the 1840s by the financial failures of insurance companies, and once government stuck its nose under the tent, licenses for the selling of insurance began to be required. While insurance education was a part of the industry for some time, licensure brought a professional imperative that could not be ignored. The earliest examples of insurance education were apprenticeships, followed by the insurance companies training their own employees. However, with the rise of the independent agency system and multiple company representation, the need for independent, unbiased insurance education
became a matter of necessity. Over time, numerous groups launched educational training in many formats, including designation programs. Then one day several Texas insurance agents walked into The University of Texas office of Professor William T. Hold with a problem—few of the educational programs that were offered were applicable to Texas agents. Together, Dr. Hold and these agents used the power of imagination to craft an insurance education program that would be practical, relevant, and continuing throughout an agent’s career. In 1969 the first Certified Insurance Counselor institute was conducted in Austin, Texas. This year marks the 50th anniversary of the CIC Program, which now has designees across the U.S., as well as in other countries. Few individuals associate imagination with insurance—or education— but imagination has been one of the core values of The National Alliance since the founding of the CIC Program. As this article has illustrated, those who could dream it did it, but they did not do so without the use of imagination. What is left unsaid is how imagination has been the driving force
or new coverages for new exposures, the insurance industry is no stranger to the power of imagination. Those who could dream it—did it and still do—and we take our thinking (and imagining) caps off to each of you! We’ve come a long way since the days of Pe-ankh-em-tanen, but insurance has always provided very human solutions for very human needs. Your clients trust YOU, and as long as we all retain the power of imagination—the ability to generate ideas and images in the mind without the input of the five senses—we will continue to be one of their first lines of defense against financial ruination. Or, as Pe-ankh-em-tanen
President of a wholesale broker firm, and became an independent Risk Management Consultant. In 2003, he joined The National Alliance faculty, specializing in risk management.
might have said, “All I’m looking for is a little human dignity.” Tell me when the insurance industry has not used the power of imagination to provide exactly that? An insurance contract is, after all is said and done, a promise, but one that we’ve been keeping for a very long time. n
About the Author: Rich Rudolph, Ph.D., CPCU, ARM, AIAF, APA, ARP, AAM
Rich is principal editor of Risk Management Essentials, and author of both Net Income Risk Management and A Tedious Brief History of Insurance (shown below). All are available for purchase at NationalAllianceBooks.com.
Rich has worked in local, regional, and national insurance agencies and brokerages, was
Learn More— and Laugh Along the Way Learn more about the history of the insurance and risk management industry by reading Rich Rudolph’s lively book, A Tedious, Brief History of Insurance. This fact-filled history examines the origins of many insurance coverages, insuring mechanisms, insurance laws, customs, and practices, as well as some of the absurd and funny moments in the insurance world. A perfect gift for colleagues, all proceeds from the sales of the book are donated to The Jerry Montgomery Memorial Scholarship Fund—created to provide scholarships for deserving university students enrolled in UACRM and UACIC designation programs in leading colleges and universities across the nation. (For more
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$
paperback
$
15
digital PDF
information about the Fund go to scic.com/jerrymontgomery-memorial-research-fund).
nationalalliancebooks.com
Fall 2019 | RESOURCES
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COMMERCIAL COVERAGE
Keeping an Eye on Small Changes Minor Legislative Changes to Insurance Rules Can Cause Chaos BY PAUL Z. MARTIN, CPCU
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the insured that the expiring ach year, state policy was being non-renewed; legislatures across then, a new policy was offered the country make with the different coverage. changes to insurance This type of process has some laws. Many times, obvious drawbacks for the these changes are rather small insurance company. By sendand mundane at first glance. ing the “nonrenewal” letter, it For example, the changes may tends to rouse what otherwise affect the way insurance commay be a docile insured who panies handle claims, or modify wasn’t expecting any trouble at the paperwork that must be the renewal of their insurance. sent to insureds. But these Often, the disturbed insured seemingly minor changes can then looks for an explanation sneak up on agents because from their current agent, which the changes don’t affect them leads to questions, suspicions, directly. and sometimes an insistence A bill in the Texas state house on shopping for an alternative. that recently passed and was The insurance company never signed into law provides an wanted this kind of impact on example. SB590 changes the the customer but was forced “rules,” so to speak, on the way into this position by insurance comthe rules requiring panies address Under the new such a notice. the policy form SB590 makes language or enlaw enacted this change to dorsements used in Texas, the insurance law in on the renewal of a the state of Texas commercial liability unaware —it eliminates or property policy. agent may the need to isTraditionally, if an sue a nonrenewal. insurance company see a “renewal Instead, the insurer wanted to make a notice” and not would be required substantive change to provide a conto the policy at examine the spicuous notice of renewal, such as other wording a material change adding a coverage on the renewal restriction or excluor paperwork notice sent to the sionary endorsethat comes insured. The notice ment, the company was forced to notify with it.
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would also go to the agent for the account. On balance these kinds of changes are a natural evolution of the regulatory environment in insurance. They tend to be practical ways of improving efficiency without disrupting relationships. The problem is that these changes often affect routine practices, and the adjustment needed to the behavior pattern can be overlooked if the actors aren’t aware of them. Normally, for most agents, nonrenewal notices send the agent into immediate action. Under the new law enacted in Texas, the unaware agent may see a “renewal notice” and not examine the other wording or paperwork that comes with it. In the same way, many insureds are very casual about reading the paperwork they receive from the insurer.
Learn More, Earn More Look to a CIC Insurance Company Operations course to learn more about keeping an eye on the regulatory environment. Take the course in your choice of online or classroom formats. Go to scic.com and select “Course Schedule” from the dropdown menu in the upper-right corner for dates and locations.
Agents overlooking small details when placing insurance has always been a risk of doing business. But, it is the small things that can blow up and become claim nightmares. Changes to the rules caused by SB590 may be relatively benign, or even positive in many ways, but it is a good reminder that placing and renewing insurance require focus on what is best for the customer. This is where an agent’s commitment to educating and updating customers shows its value. The best agents remain alert to the latest coverage and regulatory trends and keep their customers in the loop, including foreseeing from an insured’s perspective the consequences of the changes and communicating them succinctly. Not educating your customer may create a gap between expectations and the coverage realities. And that’s a recipe for an uncovered loss and an E&O claim. n
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About the Author: Paul Z. Martin, CPCU Paul is an Academic Director at The National Alliance. He works to develop, maintain, and deliver quality educational programs for the organization.
Download the App Today!
Fall 2019 | RESOURCES
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Q: “What are my options?” National Alliance Designee,
As a you have dozens of choices for your update, your career path, and your future. One of the most common questions designees ask us is, “What options do I have for my update?” The answer is, literally, “You have dozens of choices!” It’s your career, your future, and your success at stake, so we have structured our programs to offer you a vast range of learning opportunities. The choices are yours as you decide on the learning path that will best meet your specific career goals. You always have the option of repeating a class you’ve taken before, whether to learn the latest developments or further master the knowledge for daily use.*
CIC Course
CIC Course
CRM Course
CRM Course
CPRM Course
CPRM Course
James K. Ruble MEGA Seminar
James K. Ruble MEGA Seminar
James K. Ruble Graduate Seminar
PROFocus Seminar
PROFocus Seminar NEW
You even have your choice of preferred learning style, since our courses are offered in a variety of formats (classroom, online instructor-led, and online self-paced).
Certified Marine Insurance Professional Seminar
Must Be Dues-Paid
Dynamics Series Course
Must Be Dues-Paid
You can also start on the path toward your next designation, enhancing your credibility and reputation as a true professional, while opening doors to additional markets and job positions. But, that’s not all—your options include dozens of advanced programs. Ruble, PROFocus, and Hold Seminars allow you to dive deeply into specific risk and insurance topics. The Dynamics Series courses are very popular—for honing selling skills, relationships, and sales culture—and are taught by some real industry rock stars. And we’re excited to announce our newest update option—Certified Marine Insurance Professional Seminars, for those who serve or wish to serve marine and longshore clientele.
Online Instructor-Led
Classroom
So Many Gr Visit our website to se all of the PROFocus, Dynamics Series for your
The choices are YOURs.
TheNationalAlliance.com
Visit our website for full details about all of your update options.
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* Repeating a course may not provide state CE credit hours. RESOURCES | Fall 2019
A: Your career, your choice. CE Credit:
Refer to scic.com/ce-by-state for information about CE credit hours and requirements in your state. Online Instructor-Led
Classroom
CISR Course
CISR Course
CSRM Course
CSRM Course
William T. Hold Seminar
William T. Hold Seminar Dynamics of Service Course
eat Choices!
CPRM Course James K. Ruble MEGA Seminar PROFocus Seminar
CPRM Course James K. Ruble MEGA Seminar James K. Ruble Graduate Seminar Dynamics Series Course PROFocus Seminar
CRM Course
CRM Course
Must Be Dues-Paid
e a complete listing of William T. Hold, and choices available update.
Earn Up to Two Years Update Credit
CIC Course
CIC Course
Must Be Dues-Paid
Earn Up to Two Years Update Credit
Online Self-Paced
Train Your Team:
Remember, we also offer programs for industry newbies (Introductory Series), university students (University Associate Program), and Producers (our renown Dynamics Master Sales Class), as well as in-house training (ACES) customized according to your needs.
Fall 2019 | RESOURCES
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COMMERCIAL COVERAGE
Environmental Financial Assurance for Contractors BY CHRIS BUNBURY, eS
P
roactive strategies on environmental financial assurance and the critical role it plays in today’s business environment for contractors is an essential part of risk management for contractors. Environmental liabilities tend to be a severity versus frequency issue. Supporting that statement are the thousands of businesses in the United States put out of business because they did not have an environmental financial assurance instrument. Since every business is impacted by environmental exposures, part of best practices in today’s business environment is to make sure an environmental financial assurance instrument is executed.
Environmental Financial Assurance Background
Environmental Financial Assurance is nothing new; in fact, it’s been around for decades. Under Federal law: • Regulated Underground Storage Tanks (UST) owners must evidence financial assurance before they sell fuel from their tanks. • Industrial and hazardous waste haulers must evidence financial assurance before they can move one load of waste. 24
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• Asbestos and lead abatement contractors must evidence financial assurance before they can remediate asbestos or lead. • Landfills must evidence financial assurance before they can accept any waste and so must recycling facilities, disposal wells, and so on. There are various environmental financial assurance instruments available—Bond, Letter of Credit, Pollution Insurance, Monies in Escrow, Captive, Risk Retention instrument in place may not be Group, and others. worth the paper it is written on. The prerequisite for environmental financial assurance in the Contractors Financial private sector was primarily created Assurance by attorneys once “Environmental Over the years, numerous highIndemnifications” became standard profile businesses, language in conlike Walmart and tracts. The paradox Home Depot, have is most attorneys’ …any contract paid multimillioncontracts fall short that contains an dollar fines and paid because they do not for cleanups, due to require a financial Environmental environmental liabiliassurance instruIndemnification ties that were created ment be in place by contractors they to backstop their without a hired. As a way for Environmental financial private businesses to Indemnification. insulate themselves Besides creating an assurance from future enviE&O exposure for atinstrument in ronmental liabilities torneys, any contract caused by contracthat contains an Enplace may not be tors, hired contracvironmental Indemworth the paper tors are now required nification without a to have Contractors financial assurance it is written on.
When a pollution liability occurs, you may have the Federal, State, and local governments pounding on your door, along with the news media and concerned neighbors.
Pollution Liability (CPL) coverage in place. Some companies have taken it a step further, requiring contractors to have CPL coverage to even bid a job. Most contractors are unaware of the array of environmental exposures impacting their operations, but their biggest environmental exposure is caused by their business model. A contractor’s business model is based upon the job site constantly changing, which means the environmental exposures are constantly changing, as well. I can’t tell you how many times I have heard about a fork lift driver causing an environmental liability because the raw material encountered was not there five minutes ago when the fork lift driver first drove past. Today, CPL coverage is the number one environmental insurance
coverage sold by insurance carriers, and there’s not even a close second. CPL fills in coverage gaps created by the absolute or total pollution exclusion contained in General Liability policies. CPL coverage protects the insured while they are working away from premises they own, rent, lease or occupy, in case they cause or exacerbate an environmental liability while “in the field.” CPL policies can also afford coverage for transportation pollution liability, non-owned disposal site coverage, emergency response costs, and professional liability. Minimum premium for $1/$1 Million limits starts at roughly $1,200. As a general rule, contractors just think of cleanup/remediation when discussing pollution liabilities. However, I have found that there are three benefits offered by CPL polices that supersede cleanup.
The three main benefits of CPL coverage are: 1) Defense coverage. Environmental liabilities can be very litigious. You may do nothing wrong, but still get named in a lawsuit. For example, a general contractor hires a subcontractor and that subcontractor causes a pollution liability. Since the general contractor hired the subcontractor, chances are very good the general contractor will get named in the suit and need to expense defense dollars. 2) Specialists to assist in handling a claim. When a pollution liability occurs, you may have the Federal, State, and local governments pounding on your door, along with the news media and concerned neighbors. A pollution liability is not a fender bender; a pollution liability requires specialists who know Fall 2019 | RESOURCES
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how to run damage control central. Included in the insurance premium paid, all pollution policies provide specialists to assist in handling an environmental claim. 3) Third-Party claims. Most of the time, the cost to clean up the environmental liability is less than claims that come in from third parties for Bodily Injury, Property Damage, and what I call the big “Black Hole,” Third-Party Business Income. For example, a contractor putting in a water pipeline along Main Street in Downtown, USA, accidentally hits a natural gas line, and all the businesses on Main Street have to be evacuated while the leak is fixed. The affected businesses will want to be compensated for their business interruption. Cleanup comes in at #4 in my opinion. Another benefit not yet mentioned is that environmental financial assurance helps to reduce the reputational risk associated with environmental liabilities. As your insureds’ professional risk manager, the question comes down to this— what are you …environmental doing to assist your insureds in financial implementing an assurance helps environmental financial assurto reduce the ance instrument reputational risk to protect their businesses? associated with Agents not environmental strategizing with insureds about liabilities. their environmental exposures may find when one of their insureds experiences an environmental loss, the agents E&O insurance may be the only coverage the insured has.
What is a “Pollutant”?
If you look at a General Liability insurance policy, it defines a pollut26
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ant as smoke, soot, vapors, fumes, acids, and the like. However, based upon the way insurance companies and courts have responded to past claims, Environmental Risk Managers, Inc. (ERMI), has developed a definition of a “pollutant” that is easier for insurance professionals and insureds to understand. A “pollutant” is a material, substance or product that gets introduced into an environment for other than its intended use or purpose. In other words, a pollutant is something that ends up where it does not belong. Fresh water, cheese, milk, fruit juice, beer, curry—have all been classified as pollutants.
Contractor Marketing Strategy
Make sure to market the fact you have CPL coverage to generate new business opportunities. When bidding jobs, point out that if your company is selected and an environmental liability occurs during construction, you have CPL coverage to take care of the resulting pollution damage. Ask about those bidding against you. What is their environmental financial assurance strategy? More than likely, you will discover they do not have one, and that may be another reason for a prospective client to select your firm—rather than your competitor.
Strategy for Contracts
Make sure contracts are asking for the correct environmental insurance coverage for the work being performed. Our experience is that attorneys often are not familiar with pollution insurance and can ask for the wrong coverage in their contract. Make sure to correct the mistake in the contract before work begins so the proper insurance is in place. Taking the steps outlined in this article will help to protect your contractors, as well as your agency!
Learn More, Earn More Discover more about managing and transferring environmental exposures and innovative environmental strategies for risk management and insurance in advanced Ruble Graduate Seminars coming up this fall/winter. Chris Bunbury is teaching at the one on Sept. 12–13 in San Antonio, TX, another on Sept. 19–20 in Kenner, LA, and the last of the year on Nov. 10–11 in Mount Pleasant, MI.
CPL provides broad coverage for fractions of a cent on the dollar— don’t let your contractors work without it! n
About the Author: Chris Bunbury, eS
Chris Bunbury is an environmental Strategist® (eS) and Principal at specialty wholesaler, Environmental Risk Managers, Inc. (ermi.us), located in Leland, Michigan. ERMI coaches and teams up with retail insurance agents to assist in meeting their client’s environmental insurance needs. Chris has also developed the environmental Strategist (eS) online certification training. These certified strategists assist businesses to manage and transfer their environmental exposures. Just as the computer industry created demand for the IT profession, today’s business environment is creating demand for eS (estrategist.com). Chris is also a much sought after Ruble Seminar Faculty member.
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• Written by industry pros • Essential learning/study guides • Deep dives into industry niches • Time-saving forms and job descriptions • Insightful data for decision making • Sold separately and in money-saving packages
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RECRUITMENT
Welcome to High School Training the Next Young Professionals
L
ike most industries, the insurance and risk management sectors need young, well-trained professionals. The Report on Texas Growth Occupations 2018 by the Texas Workforce Commission states that in the first quarter of 2018, the number of workers with insurance and related financial industry employers in Texas was 531,819, up 11 percent from the same quarter in 2013. The report also states occupations within the insurance and related financial industry are projected to add the most jobs and grow at the fastest rates, adding some 25,385 jobs by 2026, an increase of 19 percent from 2016. For fifty years, The National Alliance has set the
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standard for quality, practical continuing education, delivering what insurance and risk management professionals need to stay current and technically adept. It just makes sense that The National Alliance would be the organization to step up and build an entrylevel program for high school students that will prepare them for the opportunities available in the insurance and risk management fields. For the last four years, the Sabine Pass High School in Port Arthur, TX, under the leadership of Superintendent Kristi Heid, has piloted a program that allows students to take a specified CISR course each year. What we learned from the relationship with the high school is that students could clearly benefit from an introductory level
CISR course adjusted to meet their needs, with insurance and risk language and concepts introduced ageappropriately. Enter Dr. Deb Davis, Faculty Advisor and academic spearhead for The National Alliance. She approached the Texas Education Agency (TEA) with documentation to achieve
of study. To meet TEA standards, she identified the skills and abilities consistent with the Texas Essential Knowledge and Skills (TEKS), the state’s standards for what students should know and be able to do, and how these standards would be met by this special version of the CISR insurance and risk management program.
Deb Davis, Ph.D.
It just makes sense that The National Alliance would be the organization to step up and build an entry-level program for high school students‌ certification for a highschool level program that could be conducted in Texas under the Business Management & Administration, Finance, and Marketing areas
After a year-and-a-half review process by the State Board of Education and its committees, which have legislative authority to adopt the
New Program to Bring CISR Curricula to High School Students
submitted curriculum, the new high school level CISR program was adopted for the upcoming school year. The program will cover three semesters of instruction and one semester of internship. Now comes the hard part. Three semesters translate into 270 hours of instruction. Each hour of the course will have a video lecture, an animation or video describing the assignment, and other supplementary materials. A lesson plan, complete with assignments and assessments, will also be provided. Course material will be accessed through The National Alliance’s new Corporate Learning Portal (see back cover). Talented and educated professionals are and will continue to be in high demand. A young person graduating from a Texas high school and having completed The National Alliance CISR program is virtually guaranteed an exceptional entrylevel position within the industry. Because of the value of the program, as well as the opportunities for industry contacts that are built into it, program graduates will have a distinct advantage over their peers. With an awareness that many students are college bound, The National Alliance works with its university partners (University Associate Program, scic.com/ university-program) to create a seamless path
into higher education and beyond. Although this program is designed to meet the technical needs of those entering the insurance and risk industry, this high school level CISR curriculum is also based on the Business TEKS and the College Readiness Standards. Associated insurance and risk fields, such as underwriting, financial analysis, and actuarial science, are identified as Science, Technology, Engineering and Math (STEM) occupations, and all have wages approximately double the average annual Texas wage or higher. The standards of this CISR program will prepare students for the college classroom, as well as for the demands of these technical jobs. The projected employee shortages for highwage, high-demand occupations in the insurance and risk management fields are staggering. For this reason, members, agencies, and companies who give their time and support to The National Alliance’s development of cutting-edge courses and delivery methods should be excited about the possibility of connecting students from diverse backgrounds with an industry that is vital to our economy and our country’s future. This high school level CISR program will be an educational bridge that can connect students with a viable and meaningful career path. n
GAMMA IOTA SIGMA GIS: The Insurance Industry’s Premier Collegiate Talent Pipeline Through world-class programs, innovative partnerships, critical industry support, expansive campus engagement, and an unrivaled lifelong professional network, Gamma Iota Sigma leads the sustainable growth and diversification of the insurance industry’s student talent pipeline across all functional areas.
If you’re interested in recruiting some of the industry’s best and brightest, come meet them at the GIS 48th Annual International Conference, September 26–28, in Dallas, TX! Be a part of the world’s premier conference and career fair connecting collegiate talent with insurance industry thought leaders, recruiters, and professional associations. The National Alliance is a founding and sustaining partner of GIS and National Alliance CEO William J. Hold, MBA, CRM, CISR, is a member of the GIS Board of Trustees. The National Alliance supports many GIS chapters at leading colleges and universities across the U.S. through the University Associate CIC and CRM programs. Learn more about the GIS Conference/Career Fair and their many other activities at:
gammaiotasigma.org
SHAPING THE INDUSTRY’S FUTURE THROUGH TALENT
Fall 2019 | RESOURCES
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COURTNEY’S CORNER
insurers willing to offer coverage. However, homeowners in brushexposed areas are finding insurance companies want massive premium increases or are no longer willing to offer terms at any price. Homeowners located in and near high-risk zones who do receive quotes are subjected to substandard coverage options, lack of replacement cost coverage, and restricted limits. As a last resort, there’s the California FAIR Plan with coverage offerings up to $1.5 million for a dwelling and contents at high-risk properties. The coverage is basic and far from sufficient for high net worth individuals, but it’s better than nothing. The price is comparatively competitive, but you get what you pay for. The key to insuring brushexposed areas of California is risk selection. Companies that use geospatial digital data and modeling tools have become crucial The homeowner’s insurance marmagine owning a stunning to insurers, MGAs, and agents ket in California is in distress. As $6,000,000 home in Santa writing homeowner’s insurance in if the threats of earthquake events Barbara, CA, with all the California. This data helps properly and frequent mudslides weren’t bells and whistles that high identify high hazard properties and enough, the catastrophic wildfire net worth insurers look for eliminates misclassifications of outbreaks of 2017 and 2018 have when selecting a risk. Your home lower risk properties. Underwriters made things worse—much worse. is pristine. You take pride that know what they are getting into so Insurance claims from Califoryou’ve never had a loss. For the they can price appropriately with nia’s 2018 wildfires have become past several years, your annual such tools. Underwriting expertise the most expensive in state history homeowner’s insurance premium and the ability to think outside the as they topped approximately $20 has been $6,000. Now imagine, you box are vital to success. billion. In 2017, the state suffered receive your 2019 renewal—and The best way to think about $12 billion in claims. Most insurers the premium is $26,000! Your agent brush and wildfire exposures in are shuddering at what may haptells you it could have been much California is to compare it to the pen this year. worse. Some homeowners can’t windstorm issues sufHomes outside of find private insurance anywhere fered in Florida 13 to catastrophe zones and are being relegated to the 15 years ago. Many can still find ample California FAIR Plan*—not the best Many California insurers are exiting solution, by far. insurers are the market, and those * The Fair Access to Insurance Requirements (FAIR) Plan is a that haven’t have exiting the state-mandated program that provides fair access to insurance vastly tightened their for individuals who are having trouble insuring their property due market and guidelines. In the to the fact that insurers consider them high risk. The California FAIR Plan is an association (not a state agency) located in Los 2004 to 2007 Florida those that Angeles comprised of all insurers authorized to transact basic homeowner’s crisis, property insurance in California. Coverage is available to all Calihaven’t have the lack of capacity fornia property owners, provided submission guidelines are met. resulted in Demotech The FAIR Plan provides insurance as a last resort, and should be vastly tightened used only after a diligent effort to obtain coverage in the voluncompanies offering
I
tary market has been made.
30 RESOURCES | Fall 2019
their guidelines.
terms at more competitive premiums than the AM Best rated insurers.** Why? The Demotech rating agency requires less rigorous financial ratios, resulting in greater leverage and the ability to offer lower prices. Will these types of insurers find their way to California or will creative underwriters fill the gap? We shall soon see, since many are working hard on solutions which may create great opportunities for the insurers and alternative solutions for insureds. Ultimately, California homeowners will be provided with manageable solutions. It just may take six to nine months. Just as it did in Florida after the 2004–2007 crisis, the insurance market will respond. There is a lot of capacity on the sidelines. Good underwriting agents need to show capacity providers how to make money. In the meantime, stay vigilant.
About the Author: Courtney Kerr, CPRM, CISR
Courtney is the VP of MarketScout Corporation’s Private Client Solutions. She has over ten years of experience in the high net worth insurance industry as an insurance company underwriter and as a wholesale broker. Courtney is a named underwriter on various Lloyd’s of London cover holder agreements and was in the first group of industry professionals to be conferred the Certified Personal Risk Manager (CPRM) designation. She also holds degrees in International Business and Spanish. **Both Demotech and AM Best are firms which determine and publish according to their own standards and financial stability/strength ratings—these are their opinions of an insurer’s ability to insulate itself from the business cycle that exists in the general economy, as well as the underwriting cycle that exists in the insurance industry.
Through their generous donations, Academy Research Associates help fund and participate in the research and publication activities of The National Alliance Research Academy and also assist in outreach efforts to attract students to the insurance industry through career-oriented programs offered in cooperation with various educational institutions. For more information about the benefits of becoming a Research Associate, contact Carol Crysup at ccrysup@scic.com, or call 800-633-2165, ext. 6191. Alabama IIA American Agents Alliance
Kansas Association of Insurance Agents Keystone Insurors Group
Assurex Global
Marble Box
Bowen Miclette & Britt
MarketScout
Brown & Brown Insurance, Inc.
Massachusetts Association of Insurance Agents
BXS Insurance
McGriff Insurance Services
Calhoun, Thomson+ Matza, LLP
McGriff, Seibels, & Williams
CRC Insurance Services, Inc. Dick Clarke Insurance Answers, LLC Florida Association of Insurance Agents HR&R Intergovernmental Pool Administration, Safety, & Loss Control Hylant IA&B of Delaware IA&B of Maryland IIA of Illinois IIA of Indiana IIA of Kentucky IIA of North Carolina IIA of Oklahoma IIA&B of Arizona, Inc. IA&B of Pennsylvania IIA&B of South Carolina Insurors of Tennessee ISU Insurance Agency Network Jerry Montgomery Memorial Research Fund
Michigan Association of Insurance Agents Minnesota IIA&B Missouri Association of Insurance Agents Ohio Insurance Agents Patra Corporation PIA of Connecticut PIA of Kentucky PIA of Nebraska/Iowa PIA of New Jersey PIA of New York PIA Southern Alliance PIA of Virginia & DC PIA Western Alliance PIA of Wisconsin Popular Insurance, LLC The PaceSetter Program— State Auto Insurance Companies ReSourcePro Texas Capital Bank Trusted Choice Insurance Agents of Colorado Westwood Trust Zurich North America Fall 2019 | RESOURCES
31
S
ince this is our 50th Anniversary year, rather than
answering your questions, I would like to ask you to share some of your special stories about the knowledge you gained through your National Alliance education and how it has strengthened your relationship with clients or, possibly, made a difference in their lives. How has attending National Alliance programs made you more effective and more valuable to your agency or company and enhanced your career? Your success stories can invigorate others—we want to hear from YOU! As it turns out, several of our tenured designees have recently shared some of their stories and memories as we celebrate this special anniversary. We hope that reading these comments underscores the pride and camaraderie that each of you share with other professionals who have earned their designations. Robert E. (Bob) Holloway, CIC, CPIA, who has held the CIC designation for 43 years, went back to the beginning of his career when he thanked The National Alliance for “providing the necessary foundational insurance industry education when I needed the positive direction in 1976.” He also noted that “The CIC/National Alliance Educational Programs have been beneficial and well worth the time and financial investment/ commitment.” We hope that Bob’s comments remind you of when you were new to the industry, and how your participation in National Alliance programs has made a critical difference throughout your career. William R. (Bill) West, CIC, CPCU, CLU, LUTCF, who has held the CIC designation for 42 years, expressed his thanks for being a part of the “finest insurance program in the country.” We strive to ensure that the CIC Program and all National Alliance programs meet your needs and expectations and are
the best programs available. And we intend to continue doing the same thing for the next 50 years! Robert (Bob) Byrd, a 40-year CIC, stated that he “would do it all over again and encourage others to do the same.” Bob stressed that as a “professionally educated agent with zero E&O claims the past 43 years,” he believed that his “professional reputation brought a premium price” when he sold his agency. We agree with him. As Dr. Hold has frequently said, “It is hard to do a good job when you don’t know what you’re doing.” That is why we “do what we do” and we congratulate Bob on his many successful years in the industry. Phillip R. (Phil) Fierro, CIC, an individual who has held the CIC designation for 27 years, wrote that The National Alliance’s impact on the insurance industry has been “wide, deep, and incredibly significant.” He also noted that he has always been proud to hold
This column would not be complete if I failed to mention that National Alliance President, Dr. Hold, felt so strongly about these communications that we chose to present them at our Board meetings last February. Dr. Hold was very impressed by the fact that while these individuals had largely retired, each had taken the time to write and thank The National Alliance about the difference that it had made in their professional lives, as well as in the industry. To us, that says everything. Our thanks to each of these individuals for sharing their comments with us, and our thanks to each of you for everything you do, day-in and day-out, to advance the professionalism of the industry. 32
RESOURCES | Fall 2019
the CIC designation and that The National Alliance has “truly raised the bar of insurance knowledge and professionalism.” We have always placed an emphasis on excellence, and it is tremendously gratifying to know that our doing so is appreciated by Phil, and hopefully, by all of you. H. R. (Dick) Lautenbach, who earned his CIC designation in 1977, wrote early in the year to state that he looked forward to attending the 50th anniversary celebration that would be held at the MEGA Seminar in Denver in March. After all these years, he attended the celebration, and we all enjoyed seeing him there. Dick also congratulated Dr. Hold on “the inspired future of The National Alliance,” which he believed to be “the world’s best education program for our profession.” Those are indeed inspiring words for us, and the very words that we would choose as we look to expand the value of your designations during the next 50 years.
Tell us your stories! With your insurance knowledge and expertise, we know you have made a difference in someone’s life. You have many clients and success stories to share and we would love to hear them. Please email me at bduff@scic.com to share YOUR stories!
Innovation Integrity Imagination
The National Alliance Debuts New Online Learning Experience The National Alliance has launched a new and improved online learning experience that educates insurance and risk professionals about the new changes, exclusions, endorsements, and revisions within the Personal Auto policy. This new self-paced CISR Insuring Personal Auto Exposures course is housed within an improved online learning environment which caters to all learning styles, is user-friendly, and can be seamlessly taken from a desktop to any mobile device. It includes interactive segments and incorporates graphic and video assets to explain challenging course concepts. The online curriculum also provides users with selfadministered quizzes and knowledge checks that help ensure understanding of the material. The most significant feature is the addition of over 145 minutes of engaging video content that enhances participants’ understanding of the Personal Auto Policy. Mitch Dunford, Chief Innovation and Academic Development Officer at The National Alliance, had this to say: “We are thrilled about this new online course. We have launched a completely new learning experience for our participants which incorporates over 24 educational videos combined with expanded curriculum, online knowledge checks, and self quizzes that prepare participants to perform exceptionally well on the final exam.” Enrollment for the CISR Insuring Personal Auto Exposures course is now open. Participants have 60 days to complete the course and can download digital versions of study materials. Through the new learning environment, they can also determine state-specific CE requirements to ensure they receive credit. Find more information and register at www.scic.com.
Important Take-Aways: • We bring the instructor to you. • With self-paced online delivery, participants have the ability to pause as necessary, and to rewind and view a segment as many times as they wish. • We’ve added a great deal of video content that helps to explain the difficult concepts. Applying policy language to a specific situation allows better interpretation of policies, which translates into providing better service to clients. • Interactive Self Quizzes and Knowledge Checks ensure understanding. • Multimodal learning that’s accessible to all. • The content in the online course is the same as the content in the classroom. • Participants have a 60-day window in which to complete the course. • The course is now fully cross-platform compatible. Whether you prefer viewing on a desktop computer, laptop, tablet, or smart phone—you choose the device. You can start on one device, pause, and pick back up on a different device. • Check your state’s CE requirements from within the platform. • Improved navigation and user experience. • Support page with contact methods. • Ask the instructor all your questions via email.
Fall 2019 | RESOURCES
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JOIN US FOR THE
5 0TH A N N I V E R S A R Y
C E L E B R AT I O N AT THE DALLAS
James K. Ruble
Dues-paid CISRs who attend a MEGA Seminar can earn up to two years of update credit!
SEMINAR OCTOBER 21–24, 2019 | DALLAS, TX Exciting new things are happening at the MEGAs! MEGAs have always been about creating your own seminar—you choose the topics that best fit your interests and aspirations. Now MEGAs offer even more! PANEL DISCUSSIONS LIVESTREAMS “Integrity, Insurance, and Higher Education” will be the theme of this timely discussion led by National Alliance President Dr. William T. Hold, CIC, CPCU, CLU, and President of Florida State University, John E. Thrasher, J.D.
The “Agency in Transition” panel discussion will feature several industry leaders in a conversation about how agencies are passing leadership and ownership to the next generation.
HOT TOPICS CRM National Faculty member Jeffrey F. Driver, J.D., MBA, DFASHRM, ARM, Chief Risk Officer at Stanford University Medical Center, will join us to discuss “Risk Management in Higher Education.”
Meet the National Winner of the 2019 Outstanding CSR of the Year Award.
That’s not all! The Dallas MEGA Seminar will culminate a year of celebrating the 50th Anniversary of The National Alliance. The reception on Tuesday evening (Oct. 22nd) is one you won’t want to miss! If you can’t make it to Dallas, join us for an instructor-led online MEGA: July 15–Sept. 23 or Oct. 7–Dec. 17.
THENATIONALALLIANCE.COM
We’re excited to introduce Nat Alliance NOW, our rebranded podcast series. Nat Alliance NOW, offers risk and insurance professionals rich, nuanced conversations that deepen learning and support participants of all National Alliance programs. This new podcast series is available to the general public and can be accessed on Apple Podcasts, Google Play, and at www.scic.com.
Scan this QR code to go directly to the podcasts.
These new podcasts are available now:
TDI:
Artificial Intelligence Meets the Auto Policy
How Technology Transforms the Risk & Insurance Industry
Part 1
How Technology Transforms the Risk & Insurance Industry
Part 2
When the Wind Blows Hurricane Preparedness and Response
TDI: Artificial Intelligence Meets the Auto Policy The Texas Department of Insurance tests a new Artificial Intelligence system that could improve their policy review processes to ensure regulatory consistency. Discover what TDI is learning from five years of auto policy data and how they are using AI to make better decisions regarding policy issues.
How Technology Transforms the Risk & Insurance Industry Part 1 From business management systems to social media platforms, the insurance industry must understand, integrate, and leverage current and emerging technologies in order to stay competitive and provide the kinds of tailored experiences today’s customers demand. Steve Anderson, CIC, President of the Anderson Network, discusses how the effective use of technology can benefit every aspect of the insurance organization ecosystem. How Technology Transforms the Risk & Insurance Industry Part 2 Successful agencies are never comfortable—they are built on change. As technology pushes the risk and insurance industry to improve their customer experience, agencies that embrace insurtech and keep their fingers on the pulse of emerging technologies can become better, faster, and more profitable. Chris Paradiso, owner of Paradiso Insurance, talks about big changes on the personal lines side of insurance, data lakes, and how customer loyalty can be predicted. When the Wind Blows: Hurricane Preparedness & Response Storms are unpredictable. Many develop and intensify rapidly and without warning. Insureds are best equipped to minimize exposures and prevent losses if they are proactive about hurricane preparedness and fully understand policy language and conditions concerning their exposures. Area SVP at Arthur J. Gallagher Risk Management Services, Inc., Michele Montgomery, CPCU, ARM-P, talks about pre-hurricane steps and mitigation efforts that can prevent damages and, most importantly, loss of life.
A new podcast is added every month. Subscribe to Nat Alliance NOW today!
Fall 2019 | RESOURCES
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A Collection of Success Stories and Press Clippings from Around the World
IntheSpotlight Powers on Point
Arthur J. Gallagher & Co. recently appointed Kerry Powers, CIC, CRM, CRIS, a National Director for its construction practice. Powers’ past experience with AECOM/Hunt, leading teams that have built some of the most complicated projects in America, such as stadiums, arenas, airport expansions, hospitality and residential projects, along with his expertise in the creation and negotiation of insurance sections of construction contracts and contractual risk transfer of requirements to subcontractors makes him an ideal fit for the job. (insurancebusinessmag.com)
Erie Elevates Ray
Vice Chairman of The National Alliance Research Academy Board, R. Kevin Ray, CIC, CPCU, AU, AINS, AIS, API, was recently promoted to VP, Learning & Development, at ERIE Insurance. Kevin has been an employee of ERIE since 1992 and is active in many industry education institutions as well as diversity and inclusion initiatives. (news release)
Alliant Appoints Glenn
Alliant Insurance Services, Inc., recently appointed Dallas-based Adam Glenn, CIC, to a VP position. Glenn comes to Alliant from Swingle Collins & Associates. (businessinsurance.com)
Elite Honors
Each year, Insurance Business America magazine (insurancebusinessmag. com) celebrates the industry’s foremost female leaders and best performing producers. We congratulate these accomplished National Alliance designees who made IBA’s 2019 lists of Elite Women in Insurance and Top Producers: 2019 Elite Women Maureen Gallagher, CIC, CRM, CILMA, RPLU, CRIS, LIC, LIA, CWCP, CWCA, RCIP, CWCC, PRIS, Managing Director with AssuredPartners (and retired CIC Faculty member) Estela Lusky, CIC, ARM, ARe, VP/Account Exec, International with Alliant Insurance Services JoAnne Murray, CIC, President with Allan M. Block Agency, Inc. Kelly Nash, CIC, CISR, Managing Director—Private Risk Management with BKS-Partners Christine VanAbel, CIC, CFO and COO with VAST 2019 Top Producers Dan Beck, CIC, SVP with Snapp & Associates Insurance Services Jonathan Brooke, CIC, AAI, VP with Acentria Insurance Marcus Eagan, CIC, CRM, VP with Eagan Insurance Agency
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Brian Fenzl, CIC, CRM, CSRM, CPCU, ARM, VP of Business Development with M&T Insurance Kevin Fox, CIC, Managing Partner with Capstone Group Mark Gresser, CPA, CIC, Area EVP with Arthur J. Gallagher & Co. Bob Hendren, CIC, EVP with Higginbotham Insurance Agency Tamara Knight, CIC, Executive Agent with Esser Hayes Insurance Group Mark Lee, CIC, Managing Director with Higginbotham Insurance Agency Dwight Pilgrim, CPA, CIC, CRIS, Associate Broker with Rich & Cartmill J.D. Powers, CRM, PWCA, CLCS, President of Powers Insurance & Risk Management Sam Sackler, CIC, CRM, Commercial Insurance Advisor with Fisher Brown Bottrell Insurance, Inc. Kyle Schielack, CIC, CRM, EVP with Higginbotham Insurance Agency Brian Schneider, CIC, CLCS, Managing Director, Business Insurance with Higginbotham Insurance Agency Jonathan Schreter, CIC, EVP with Bolton & Company Coy Sunderman, CIC, CWCA, Partner, Insurance and Risk Advisor with Texas Associates Insurors Ken Tucker, CIC, Sales Exec with NFP Ronald Von Haden, CIC, AIS, Partner, VP of Business Accounts with Tricor Insurance
TheNationalAlliance.com
Big “I” Top Honors Go to Della Porta and Walker During their annual conference in May, the IIABA presented top awards to two fervent supporters of The National Alliance.
The 2018 Sidney O. Smith Award—the Big “I”’s highest honor for legislative activism—went to Veronica Della Porta, CIC, for going above and beyond the call of duty to serve her fellow agents and brokers Photo credit: FAIA. Angela Ripley, CIC, CRM, AIS, in 2018. Della Porta is LUTCF, IIABA (right), Chair of the Government Affairs President of The Della Committee and President of VW Brown Insurance, presents Veronica Della Porta, CIC (left), the 2018 Porta Group, Inc., in Sidney O. Smith Award. Jacksonville, FL, and has served the on the Big “I” Government Affairs Committee for four years, in addition to chairing the InsurPac Board of Trustees. She’s also very active with the Florida Association of Insurance Agents and has served as chair of the FAIA/National Alliance Education Committee. David Walker, CIC, CRM, ARM, AAI, LIC, CAWC, President of Hartland Insurance Agency, Inc., in Fenton, MI, was presented the 2019 Woodworth Memorial Award—the highest honor the Big “I” bestows on an individual member. The award recognizes the outstanding contributions of an independent agent or
Harris Recognized
Andrew Harris Jr., CIC, AAI, of Jackson Township, NJ, was named the PIA of New Jersey’s Professional Agent of the Year. Harris is President of Liberty Insurance Associates, Inc. He serves as the PIANJ’s Secretary and is Legislative/Regulatory chairperson of their Government Affairs Committee, in addition to being a member of the NJ Agents Justice Task Force and Director of PIANJ’s New Jersey Young Insurance Professionals. (PIANJ news release)
Photo credit: IIABA. David Walker, CIC, CRM, ARM, AAI, LIC, CAWC (left), is presented the IIABA’s Woodworth Memorial Award by Big “I” President and CEO Bob Rusbuldt (right).
broker to the national association, to their Big “I” colleagues, and to the insurance industry. A well-respected National Alliance Faculty member and CIC Board member, Walker has served the Big “I” in many roles at both state and national levels, in addition to being twice named Michigan’s Agent of the Year and receiving a Lifetime Achievement Award. (independentagent.com)
Erie Awards Warren Weiss
Erie Insurance recently named CIC-led Warren Weiss Agency winner of its prestigious F. W. Hirt Quality Agency Award. Agency Principal Brian Benner, CIC, and VP Leanna Knight, CIC, were on hand to accept the award which is given by Erie on an annual basis to outstanding partner agencies within each branch of its 14-state L to R: Knight and Benner service area. In recognition of commitment to exceptional service, performance and profitability, it is considered the top award an Erie partner agency can receive. Earlier this year, Warren Weiss Agency was also honored by Erie Insurance with the 2018 Silver Life Recognition Award, putting it among a select group of agencies honored by Erie as a top Life Insurance Producer in Pennsylvania. (virtual-strategy.com)
Fall 2019 | RESOURCES
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A Collection of Success Stories and Press Clippings from Around the World
UA University Honored
The University of Central Arkansas, which partners with The National Alliance to provide opportunities for insurance and risk management careerbound students through the University Associate CIC designation program, has been designated a Global Center of Insurance Excellence by the International Insurance Society (IIS). “The GCIE designation signals the industry as to where the top talent is being cultivated and in doing so, builds the prominence of the world’s leading insurance programs, which are effectively serving as the top-tier talent pipeline,” said Michael Morrissey, President and CEO of the International Insurance Society. (www.arkansasbusiness.com) Cynthia Burleson, MBA, CIC, CRM, CPCU, AICP, Director of the Center for Insurance and Risk Management Studies at UCA added, “It is exciting to be a part of the Insurance and Risk Management degree Burleson program at UCA and to receive international recognition from the IIS. Students having the ability to earn the UACIC designation prior to graduation is one of the activities that allowed us to be considered for this honor. The National Alliance programs are highly regarded in the insurance industry and completing this designation allows our students to enter the workforce ahead of the game. We are proud to partner with The National Alliance and look to growing our relationship in the near future.”
Crockett Leading Personal Lines
Carrie-Ann Crockett, CISR Elite, CPIA, has joined Meeker-Sharkey & Hurley as VP of Personal Lines. Carrie was a past board member of the IIA&B of New Jersey and has also served on multiple insurance carriers’ committees. (tapinto.net)
Bissaillon Steps Up
David Bissaillon, CIC, who joined Smith Brothers-McAndrews Insurance Agency in Adams, MA, in 2011, has stepped up to become its new owner and President. (berkshireeagle.com)
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Motivated Millennial
CISR Lexi (Alexis) Stiles has joined Moresource, Inc., in Columbia, MO, where she oversees and manages all their lines of insurance. Lexi started her insurance career with Gallaher Insurance Group in 2015, went on to obtain both her P&C license and Life, Health, & Accident license, and has her sights set next on earning her CIC designation. (columbiabusinesstimes.com)
Russell Joins Leadership Team
FedNat Holding Company recently appointed former CISR Board member, Mel Russell, CIC, VP of Monarch National Insurance Company where he’ll lead Monarch’s relaunch of its homeowner and condo programs in Florida. (globenewswire.com)
Mackay Makes a Move Globe Underwriting has named Houston, TX-based Jennifer Mackay, CIC, CISR, ARM, to be head of their North American property division. Previously, Ms. Mackay was President of WSG Specialty Underwriters. (businessinsurance.com)
Elwell Promoted
The RMC Group has promoted Mark Elwell, CRM, CPIA, ACI, to EVP of Risk, where he is responsible for the management of the group’s captive insurance operation and property and casualty. (captiveinsurancetimes.com)
Have YOU been “IntheSpotlight”? If you, or a fellow designee, has landed a promotion, won an award, or been honored in some fashion—don’t be shy! Let us help celebrate! (Can you say, “FREE publicity”?) To submit an item for editorial consideration, send biographical data and a color headshot photo to Becky at bkeeling@scic.com.
TheNationalAlliance.com
Industry Legends
The IIA&B of Arizona recently announced the newly created Wilton L. Richàrd Lifetime Education Award to honor those who have dedicated their careers to help others achieve their education goals. The award honors the lifetime of educational support and commitment given by Will Richàrd, CIC, ARM, AAI, to the insurance industry in general, and to Arizona in particular. Will was a familiar face to everyone attending educational programs in Arizona and across the country for the past 35 years. He served as Arizona’s CIC Educational Consultant until 2017. The award was presented to Will at the James K. Ruble Graduate Seminar on March 14, 2019, by IIA&B Education Director Ray Garcia, CIC, CISR; Executive Director Terri Edwards, CIC, CISR; and past Executive Director and retired CISR faculty member Lanny Hair, CIC, ARM, AAI, RPLU. The award was also presented to Rod Rezac, CIC, CPCU, ARM, at the event by Ray Garcia, Lanny Hair, and Will Richàrd. Will and Rod have worked together in Arizona for the past 15 years, and Rod took over all Ed Consultant duties when Will retired. Lynne Lovell, CIC, CRM, will be stepping into the role of Ed Consultant for Arizona as Will and Rod move on to other endeavors in their retirement. (news release)
A Matter of Principals
Arthur Hall Insurance, of West Chester, PA, has qualified for Mutual Benefit Group’s Inner Circle award for a ninth year. Arthur Hall is a long-time, strong supporter of continuing education, evidenced by the National Alliance designations following the names of every agency principal, as well as a large number of employees’ names. Mutual Benefit Group established the Inner Circle award in 1993 to acknowledge outstanding agent performance and recognize those who have established a consistent record of profitable growth along with superior customer satisfaction. Arthur Hall’s agency principals include President James S. Denham, CIC, CPCU; Senior VP Glenn D. Burcham, CIC, CRM; EVP Mark D. Sammarone, CIC, CISR; VP–Personal Lines Nicole C. Grebloskie, CIC, CISR, CAPI; VP Joshua J. Isler, CIC; and Operations Manager Karen L. Leary, CIC, CISR. (press release)
Agency Principals, seated L to R: Nicole Grebloskie and Karen Leary; standing L to R: Mark Sammarone and James Denham; not pictured: Glenn Burcham and Joshua Isler.
L to R: Will Richàrd, Lanny Hair, and Rod Rezac.
Both Will and Rod have illustrious histories with The National Alliance. Will served as President of The National Alliance Research Academy and VP of the Society of CIC. He was a National Faculty member and is a cofounder of both the CRM Program and The National Alliance School for Producer Development. Rod served The National Alliance for many years as a National Faculty member and Curricula Administrator in the Academic Development department and was later promoted to Senior VP. He was one of four Kansas agents who founded the original CISR Program, which the Society of CIC acquired in 1986. Rod also served on the CISR Board of Directors.
Ingham Joins NYSIR
Cassandra Ingham, CSRM, formerly a Risk Management Specialist with Utica National Insurance Group, has been named Business Development Specialist with the New York Schools Insurance Reciprocal. She brings 30 years of experience related to school, New York’s Board of Cooperative Education Services, and insurance marketing and risk management to the job. (menafn.com)
Fall 2019 | RESOURCES
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PRSRT STD U.S. Postage
PAID
Austin, TX Permit No. 93
Guide Employees Toward Success with the NEW Corporate Learning Portal Success in the insurance and risk management industry is dependent on what you know. Employees are hungry to learn everything they need to ensure their clients feel protected. Are you supporting them on their learning paths? Our new Corporate Learning Portal empowers you and your employees to succeed. Managing employee learning is challenging— We make it easy. Track and offer employee learning opportunities in one simple platform so your organization can reach its full potential. Manage learning paths, receive course enrollment and completion updates, and schedule exams. Easy to use • Intuitive navigation • Seamless registration and CE requests • Automatic progress updates Customized for your organization. • Branding and logos • Team dashboards • Individual learning paths Integrated web-based system • Access to online and classroom courses • Centralized employee and billing information • Powered by The National Alliance
“We now spend our time focusing on employee development and less time on administrative tasks.” —Jenny L. Bolt, MBA, CIC Executive Vice President Commercial Lines Practice Leader HUB International
Spend less time organizing professional development and more time identifying gaps in capabilities, researching the right learning options, and guiding employees on the path to success. Request a demo at
scic.com/corporate-learning-portal-b