Alabama Independent, 2016 Issue #3 by Blue Water Publishers, LLC

2016 - ISSUE 3

INDEPENDENT

alabama

WELCOME New AIIA President Jeff Hogg, CPIA, CLCS

In the movies, it’s thrilling when the little guy finds a way to win big.

In the ISU Network…it happens every day. Okay, as a member of the ISU Insurance Agency Network, you aren’t exactly a little guy. You don’t have a downtown skyscraper, but you can compete with those that do. 

You maintain complete independence, yet are part of an organization of 160 established and successful independent agencies with combined premiums over $2 billion.



You have access to over 350 carriers, meaning broader coverages for existing clients and multiple avenues for new business development.



You are part of a coast-to-coast community that shares proven ideas and provides solutions to difficult challenges.

And to make victory even sweeter, you receive performance incentive income that averaged $57,400 last year and is trending upward by about 25% annually.

INSURANCE AGENCY NETWORK 2

Helping Independent Agents Stay Independent for Over 35 Years

Let’s talk about ISU member victories, competing locally, regionally and nationally. www.JoinISU.com

In 2016, ISU will add new carriers and new qualified agents in the Carolinas. For an exploratory discussion of the ISU model... Call Jack O’Connell Regional Vice President (704) 771-9597

With a range of insurance coverages, extensive loss control resources, expert claims knowledge and local service from an independent agent like you, EMC offers an insurance program designed specifically for light manufacturers. It’s just one of the many reasons why you and your commercial clients Count on EMC ®. SANDI DIXON, CPCU, AU Commercial Lines Underwriting Manager EMC Birmingham Branch

HEAVY-DUTY INSURANCE

FOR LIGHT MANUFACTURERS. BIRMINGHAM BRANCH OFFICE

www.emcins.com

Phone: 800-239-2005 | Home Office: Des Moines, IA

FIRSTSTEP

AIIA thanks the following sponsors for their support and participation in the First STEP program. AIIAâ&#x20AC;&#x2122;s First STEP program is your first step to involvement with independent agents in Alabama. For more sponsorship information or to sign up as a sponsor, please contact Nancy Crowe at 205-326-4129 or visit our website at www.aiia.org.

$20,000

Alabama Insurance Management Services The Sheffield Fund

$15,000 Your name here

$10,000

MAKE PLANS TO ATTEND! AIIA EVENTS 2016 Big I PAC Golf Tournament September 20 Prattville Country Club

Fall Education Conference & Trade Fair October 20 AIIA Office Hosted by Small & Rural Agents Committee

I-Day

Cornerstone National Insurance

November 9 University of Alabama

$7,500

AIIA EVENTS 2017

National Security Fire & Casualty

Birmingham IIA Annual Gala

January 27 United Cerebral Palsy of Greater Birmingham

$5,000

Alabama Trucking Association WCSI Fund Centauri Insurance

$2,500 Alabama Self-Insured WC Fund AlaCOMP American Mining Insurance Co Auto-Owners Insurance BAMA Berkley Southeast Insurance Grp CRC Insurance Services Donegal Insurance Group EMC Insurance Companies Enterprise Rent-A-Car

Frankenmuth Insurance Genesee General Insurance House Penn National Insurance Progressive Sagamore Insurance Company Sentry Insurance Southern Insurance Underwriters/ SIUPREM Travelers Insurance Company TheZenith

We Thank You! 4

Alabama Independent | 2016 Issue 3

Young Agents and AIIA Committee Days February 15-16 AIIA Office

AIIA Legislative Conference March 16 Embassy Suites, Montgomery

Excalibur Education Foundation Clay Shoot April 21 Selwood Farms

121st Annual Convention & Trade Show June 7-9 Hilton Sandestin Beach Golf Resort & Spa

Young Agents Summer Conference July 27-29, 2017 Hilton Pensacola FL

, x a l Re labama. A

Weâ&#x20AC;&#x2122;ve got you covered. When unpredictable weather strikes, residents of Alabama need more than the usual kind of insurance products. Count on Centauri Insurance to provide peace of mind when your customers need it the most. Homeowners I Dwelling Fire I Tenants I Flood

centauriinsurance.com 2016 Issue 3 | Alabama Independent

alabama

2016 • Issue 3

INDEPENDENT CONTENTS

141 London Parkway Birmingham, AL 35211 Phone: 205-326-4129 | Fax: 205-326-3086 | www.aiia.org

Executive Vice President: Bill Sager, CIC Editor: Michelle McKee

LEADERSHIP & STAFF AIIA OFFICERS President: Jeff Hogg, CPIA, CLCS Tuscaloosa

President Elect: Haig Wright, CIC Jasper Secretary/Treasurer: Steve Sprayberry, CIC Sylacauga State National Director: Jeff Grice, CIC Jasper Immediate Past President: Richard Pardue, CIC Birmingham

4 First STEP Sponsors; AIIA Save The Date

8 Introduction & Letter from the New AIIA President, Jeff Hogg, CPIA CLCS

BOARD OF DIRECTORS District 1 Larry Crosby, CIC - Brewton Michael Sullivan, CIC - Foley C. Todd Thomas - Montrose

10 Letter from the AIIA EVP, Bill Sager, CIC

12 AIIA Welcomes Steve Sprayberry, CIC, New Secretary/Treasurer 13 AIIA Makes Donation to Brook Sansom

13 Congratulations to Edna Newcomer, 2016 Alabama OCSR Winner 14 John Freisen, AIIA Insuror of the Year

17 The 120th Annual Convention and Trade Show Report 26 Perpetuation and Succession Planning

District 7 Kevin Myrick - Tuscaloosa Lin Moore - Tuscaloosa Young Agents C.D. Denson, CIC - Homewood Past President Jere Peak - Selma AIIA STAFF Executive Vice President: Bill Sager, CIC Director of Education: Ted Kinney, CIC, CPCU, ARM, CPIA, AAI, AU, CRIS, AINS Director of Communications & Member Services: Michelle McKee Director of Education Administration: Tangerie Underwood, CISR, CPIA

27 2016 Education & Trade Fair Information and Registration

District 3 John H. Dark, CIC, AAI - Alexander City Brad Young, CPIA - Anniston

31 AIIA Education Calendar

District 4 Steve Hoggle, CIC - Guntersville Stacey Waldrep - Boaz Wayne Walker - Hamilton

Accounting Supervisor: Irene Smyly

District 5 Kelly Aday - Lexington Susanne Grimwood, CIC, CISR - Huntsville Connie Waldrip, CISR - Huntsville

RLI Administrator: Tangerie Underwood, CISR, CPIA

28 Industry News

33 2016 Alabama Market Analysis 42 Ted’s Tablet

44 Governor Bentley Announces Drop in Rate of Uninsured Motorists 46 Seen & Heard; Welcome New Members

ADVERTISER INDEX AIA 47 FCCI 35 Allstar 35 Genesee General AGC Alabama Berkley Southeast Berkshire Hathaway GUARD Ins.

15 ISU 2 7 Johnson & Johnson 31 MJ Kelley

24-25 45

Burns & Wilcox

9 SIUPREM 37

Centauri Insurance

5 Southern Insurance Underwriters 48

Donegal Insurance Group EMC Insurance Companies 6

District 2 Steve Mullis, CPIA - Montgomery W. Keith Nobles, CIC - Wetumpka Jean Ann Rittenour, CISR, CIC, CPIA, CPIW - Montgomery Ray Smith - Deatsville

Russell Greenhalgh, CIC - Birmingham Mary Hall - Birmingham William Jacka, Jr. - Birmingham Margaret Ann Pyburn, CPIA - Birmingham

11 Summit 41 3 The National Security Group

Alabama Independent | 2016 Issue 3

District 6 Evelyn Burchfield, CIC, CRM, AAI, AIS Birmingham

E & O Administrator: Carol Hunt, CPIA

Director of Meetings & Events: Nancy Crowe

Printing & Mailroom Coordinator: Waymon McIntosh Office Manager: Sarah Walker

PUBLICATION INFORMATION The Alabama Independent is the official magazine of the Alabama Independent Insurance Agents, Inc. Association (AIIA), and is published quarterly by Blue Water Publishers, LLC. AIIA does not necessarily endorse any of the companies advertising in this publication or the views of its writers. AIIA reserves the right, in its sole discretion, to reject advertising that does not meet AIIA qualifications or which may detract from its business, professional or ethical standards. The publisher cannot assume responsibility for claims made by its advertisers, content provided by the editor, or the opinions expressed by contributing authors. For information on advertising, contact Jim Aitkins, Blue Water Publishers, 360-805-6474 or jima@bluewaterpublishers.com.

BER K L EY S OU T H E A S T IN S URA NC E G ROU P ANNO U N CE S L A U NC H O F B S IG A DVA NTA G E Creative Solutions for Small Businesses BSIG Advantage provides a simplified solution for writing your small business customers through access to our proprietary online rating system. BSIG Advantage provides comprehensive, flexible coverage that can be written on a Package or on a monoline basis. Comprehensive Coverage With over 400 eligible classes in 8 market segments, we have the right product to fit the needs of your small business clients. Fast and Easy Online binding for eligible classes makes placing business easier than ever! Best of All Our agents and policyholders will continue to receive the same outstanding products, services and solutions, from our local underwriters, claims professionals and risk services specialists.

WAN T TO KN OW M OR E ? Please contact:

Ben CPCU KayNichols, Hall Territory Manager Regional Vice President 205-994-3679 Georgia/Alabama Region 678-533-3460

Berkley Southeast Insurance Group is a member company of W. R. Berkley Corporation, whose insurance company subsidiaries are rated A+ (Superior) by A.M.Best. Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued.

berkleysig.com

AIIA welcomes Jeff Hogg, CPIA CLCS as the new President Jeff is a native of Cedartown, Georgia. He graduated from the University of Alabama in 2003 with a Bachelor’s degree in Political Science and English. After graduating from Alabama, he attended Hartford School of Insurance where he focused on commercial lines in the insurance industry. For the last 12 years, he has worked for the Fitts Agency in Tuscaloosa. He is also very active in his community including his local independent insurance association where he has served as President. Jeff believes in the Independent Insurance Agency system and streams his excitement through the association. Being active since the beginning of his career, Jeff has served on many committees. He chaired the Young Agents Legislative Committee and became the Young Agents Chair back in 2011. He was the recipient of the Young Agents of the Year award in 2009 and won the Insuror of the Year award last year. Jeff enjoys spending as much time as possible with his family; his wife Nicole, son Hayden and daughters Addison, Keltie and Anna Grayden.

Jeff Hogg, CPIA, CLCS AIIA President First of all, I want to thank everyone who attended our convention this year and I hope you had as much fun as I did. It’s always great to come together to network, meet new friends, reacquaint with old ones, and broadened our knowledge in our industry. The timing of one of our speakers could not have come at a better time as he discussed the idea of perpetuation. It is no secret that I am probably the youngest President our association has ever had to date. When I was elected to the Executive Committee, my platform was to bridge the gap between our Young Agents committee and the Big I. Time and time again, I would see our leaders in our Young Agents never make the transition to the same type of roles in the Big I. I kept asking myself “Why?”. Everyone understands that in order for an agency to sustain or succeed, there has to be a perpetuation plan in place. On the flip side, this is also true with our association. Over the next year, I plan to work hard with our leaders of our Young Agents to make sure we have our own perpetuation plan in place. I plan to lay the ground work to bridge that gap so that all of the hard work and dedication of those before me will never be lost. We have a great association. Full of great committees, great staff, great agency members, and great associate members. And together, we will do great things.

Alabama Independent | 2016 Issue 3

BURNS & YES, WE CAN DO THAT

WILCOX

ACCESS IS OUR MIDDLE NAME. Our access to the widest range of domestic and international carriers means you can say yes to almost any hard-to-place risk. Give your clients what they want to hear with Burns & Wilcox.

Birmingham, Alabama | 205.988.9650 toll free 800.888.1179 | fax 205.988.3073 birmingham.burnsandwilcox.com

Bill Sager, CIC

AIIA Executive Vice President

All of you who have been in this business over 15 years and saw the technology explosion we have experienced in the past few years coming…raise your hands……I see a few hands, but I also know you, and I’m not sure you are being totally honest!! As we look at where technology is today, we are tempted to think we have arrived and will enjoy these benefits for a few years before any new major changes…..not so fast my friend. Applications and photos submitted from pads while visiting with prospects, utilizing drones in property inspections and gathering claim data, and communication between smart phones and pads linked to the agency management system back at the office is becoming common place. Many agencies and companies are trying to find what they think will be the right fit. To say the technical influence on agency operations have come a long way in a short period of time is certainly an understatement. At the AIIA office, we have recently moved to a new association management system. It has been needed for some time and we made the leap! It is going to allow you, our members, to be very interactive with us. I hope you have noticed, we have a new website and each member has their own login and password….like you needed another one to keep up with. This new system is going to be very beneficial to our staff which will result in time savings in our day to day operations. We hope you find it friendly and easy to navigate. We encourage you to keep your agency / company information updated within the system. As with any new system or major internal change, there is a learning curve for those of us who use it every day and for some of us that take longer to get through the curve…… if you know what I mean…thanks, I see those hands again and this time I believe you! 10

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Our young agent group is leading the way in several areas of agency development, but their efforts in the technology arena stand out all across our state. We hear how new technology is being utilized and in many cases merged into existing systems. Many of the “aging agency principals” (how is that for being politically correct?) have allowed some of the young agent community to bring their agency forward as it relates to the use of technology. What will the next major changes be and when will they occur? I don’t know so ask the folks who raised their hands at the outset of this article. The important thing is the changes we are experiencing should help us be more efficient in what we do and provide a time savings so we can allocate time to other important functions that at times get slighted. At some point we’ll look back and see if it actually produced the results we were looking for. Here is a quick note about the Fall Education Conference which is sponsored by the Small and Rural Agent’s Committee. It will be held on October 19th at our office. This year’s conference will focus on agency perpetuation and valuation…the how and whys….ways to structure in-house perpetuation and details about selling or buying. Save the date now and watch for more information! While we enjoy and utilize technology and many of you can’t wait to get the latest gadget or gizmo….our business was built on relationships and. Call me old school, but I don’t see that part ever going away. Your relationships with clients, companies, MGA’s and each other are valuable and long-lasting. We value the relationships we have with you, our members! We do not want a gadget, gizmo or system to in any way to impede our relationships but rather to enhance them. Thank you for your support of AIIA.

most there when it matters most there when it matters m

Direction

Donegal remains committed to our chosen direction for distribution — the independent agency system. Unlike many others in the industry, Donegal has no interest in any other distribution channel. Instead, we focus our energy on consistently delivering greater value to our agents. Staying true to our chosen course of supporting the independent agency system… another way Donegal is “There When It Matters Most.”

To learn more visit www.donegalgroup.com or call Bill Anderson at 800-277-7442 ext. 3418.

2016 Issue 3 | Alabama Independent

AIIA NEWS AIIA Welcomes Steve Sprayberry, cic: New Secretary/Treasurer

AIIA welcomes Steve Sprayberry, CIC of Wright-Sprayberry Insurance in Sylacauga as our new Secretary / Treasurer. He will serve on the Executive Committee for the next several years. In this role, Steve is a member of the AIIA Finance Committee and is responsible for the reporting of association finances and procedural records to the AIIA Board of Directors and association membership. Steve is a graduate from the University of Alabama Business School and earned a B.S. in Finance Insurance. During his time at Alabama, he was an offensive tackle under Coach Paul “Bear” Bryant winning three SEC Championships and the 1973 National Championship! After graduating from Alabama, Steve attended USF&G School of Insurance and stared his insurance career at Brown Insurance Agency in 1980. Steve is very proud of the growth and expansion he has experience in his agency. Being in the industry for 36 years, Steve has witnessed many changes from the constant modifying of forms to more importantly computer technology. He predicts that in the future there will be more and more internet market sales. He thinks the most challenging aspect with computer technology is staying current without losing the personal interactions of our business. Steve served on AIIA’s Board of Directors from 2011-2016 and has been the Personal 12

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Lines Committee Chairman since 2012. Steve has also worked closely with our Small & Rural committee on securing speakers for their conference the last two years that relate to Personal Lines. He believes in the independent insurance agency system and he hopes to promote the professionalism of our organization to not only our members, but to our communities. Steve is very involved with his community and serves on many boards including the Boys Club and Sylacauga City Schools Foundation. He and Carol have been married for 43 years and they have two children. Steve enjoys working out, mountain biking, boating, hunting, fishing and reading books.

AIIA makes donation to Brooke Sansom

AIIA NEWS

Alabama Independent Insurance Agents donated $750 to Brooke Sansom of Pike Road, Alabama for expenses at this year’s 2016 Trusted Choice® Big “I” National Championship Golf Tournament held at Del Paso Country Club on August 1-4 in Sacramento, California! Brooke has participated in the Trusted Choice® Big “I” National Championship Golf Tournament the last three years. She finished 4th last year in the tournament and with her strong work ethic and determination, there is no doubt she will succeed. The tournament is the 3rd oldest junior golf event in the United States. Today’s best players at the LPGA and PGA TOUR level have all made their way through the Big “I”. Brooke is home schooled by Ezekiel Academy and plans to graduate in 2018. She started playing golf at age eleven and has won over eighteen girl’s tournaments and one man’s tournament. Brooke has committed to Auburn University and will play on the women’s golf team. Her goal is to win multiple National Championships for her team while creating lifetime friendships.

Congratulations to Edna Newcomer, 2016 Alabama OCSR Winner We congratulate Edna A. Newcomer, CIC CPIW of Thompson Insurance, Inc. of Montgomery, for being selected as the 2016 Alabama Outstanding Customer Service Representative. Edna will represent Alabama for the National OCSR Award. To qualify for the top state honor, the 2016 candidates submitted an essay on the following topic: “Many in our industry came into insurance by chance, but have built a career by choice. How did you come into the industry, and what are four reasons you stayed and built a career?” Additionally, entrants must have demonstrated commendable service to their agencies, their industry, and their community. The only eligibility requirement for this award is that the candidate must be an insurance customer service representative, or have primary responsibility for insurance customer service duties. “The Outstanding CSR of the Year Award recognizes the annual exemplar for exceptional customer service representatives across the nation,” said Danielle Janecka, Senior Vice President of The National Alliance. “Through their essays, contributions to their agencies, and their letters of recommendation, every one of the state winners helps to raise the standard for personal and professional excellence. We honor them for their clear contributions to their colleagues, teams, and organizations. They are the face of customer service for our whole industry.” Each state winner receives a framed certificate and is eligible to compete for the national honor, which carries a $2,000 cash award, a gold and diamond pin, $1,000 cash award for the nominator, and a scholarship for the recipient’s employer to any program offered by The National Alliance. Additionally, the name of the Outstanding CSR of the Year is inscribed on a sculpture permanently displayed at the national headquarters of The National Alliance for Insurance Education & Research in Austin, Texas. Source: The National Alliance

2016 Issue 3 | Alabama Independent

AIIA NEWS John Freisen, AIIA Insuror of the Year “It came as a great surprise and at the same time I was humbly honored to be named the 2016 Insuror of the Year at the AIIA Convention in Sandestin. This is a very prestigious award and to be recognized with other distinguished leaders of the past is truly an honor. Each day I am blessed and very thankful to work and serve in the “best” field on the planet – the insurance industry. Serving others in our community, city and state is a blessing from God and very gratifying. It has been a wonderful honor working with so many great leaders and friends on the state level serving on the Young Agents Committee, AIIA Board of Directors and the AIIA Executive Committee over the past 20 years. As I continue to serve on the Alabama Insurance Management Services Board of Directors, I truly appreciate my agency and my family for allowing me these opportunities to assist Alabama Independent Insurance Agents and hope to maintain my relationship with this great association in the future” In 1991, John joined Fountain, Parker, Harbarger & Associates and today he is a partner that manages the commercial lines department. John is a member of First Baptist Church in Huntsville and serves on the usher committee. In his spare time, he loves to travel as well as spending time with his family at the lake. Please join us in congratulating John Freisen on his well-deserved honor as AIIA Insuror of The Year!

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The 120th Annual Convention&Trade Show The 120th Annual Convention and Trade Show was a huge success. President Richard Pardue’s program had something for everyone. Progressive hosted the registration hospitality with some puttputt fun and cocktails. The putter was given to an agent at the closing banquet and Mr. Ray Smith was the winner! Soon after registration, everyone gathered for the Welcome Reception and AIIA showed its team spirit by streaming the Women’s College Softball World Series for all our Auburn and SEC fans. After a buffet styled dinner, we hosted the 2nd Annual Trivia Game…with real bar-like interactive trivia devices. The excitement grew as the bonus questions points got higher and higher. It was anybody’s game until that last question and when the hoorah’s were heard, we knew the trivia was a success!

With the convention back in June, that meant hot temperatures. Associated Insurance Administrators and Progressive hosted the cornhole tournament while other company representatives provided refreshments! Incoming President Jeff Hogg and his wife, Nicole were crowned champions! Thursday morning started off with an education program that most principals were eager to hear. Dave Tralka with InsurBanc gave key consideration for Agency Acquisition & Perpetuation to a packed classroom. If you missed it, the presentation is on the website under convention. Once the education session concluded, it was time for the annual trade show where there was lots of networking. We had a lot of first time exhibitors and Johnson & Johnson won “Best in Show”.

On Friday morning, IIABA-President Elect Spencer Houldin updated attendees on what’s happening nationally and discussed the Search Engine Optimization program through Trusted Choice. He showed us the success others experienced in the 2015 trials. The program is a huge success. Trusted Choice is making the program available through other states and AIIA will be participating starting in the fall of 2016. 2016 Issue 3 | Alabama Independent

Also, Spencer had the opportunity to install our new board members. We are excited to have them join the association leadership. DISTRICT 2 Steve Mullis, Starr Insurance Group dba The Whitecotton Agency LLC – Montgomery W. Keith Nobles, Cousins Insurance Agency – Wetumpka Jean Ann Rittenour, Palomar Insurance Corporation – Montgomery Ray Smith, R. R. Smith Insurance Agency LLC – Deatsville DISTRICT 4 Steve Hoggle, Woodall & Hoggle Insurance Agency – Guntersville Stacey Waldrep, Adamson Insurance Agency dba R.M.I. – Boaz Wayne Walker, Walker Insurance Agency – Hamilton DISTRICT 6 Evelyn Burchfied, McGriff Seibels & Williams, Inc. – Birmingham Russell Greenhalgh, Greenhalgh Insurance Agency – Birmingham

Associate Member of the Year – Brenda McNeill of Genesee General Agent Grand Prize – Joni Holt of Holt Insurance Agency in Bessemer Associate Grand Prize – Steve Smith of Foremost The closing dinner was different this year, and it began with a seated dinner. Outgoing President Richard Pardue passed the gavel to one of the youngest AIIA Presidents in history, Mr. Jeff Hogg. After dinner, the attendees were mesmerized by entertainer / mentalist Steve Haffner. Steve left the crowd wondering “how in the world did he just do that?” As they were recovering from Steve’s challenging performance, the program moved into its final stages to the ever popular draw down. The draw down started out with 200 or more available numbers, but when the last four numbers were called… David Peel and his wife Andrea, Joan Stastka and Steve Hoggle decided to walked away with $500 each. Just maybe, there might be a convention when the last four standing decides to dwindle down to the last one standing!

Committee Chair of the Year – Carl Schneider of Schneider Insurance Agency in Mobile

Mary Hall, J. Smith Lanier & Co. – Birmingham William Jacka, Jr., Insurance Office of America – Birmingham Margaret Ann Pyburn, Cobbs Allen – Birmingham DISTRICT 7 Marlin “Lin” Moore, Pritchett-Moore, Inc. – Tuscaloosa Outgoing Board Members recognized were David Peel of Colonial Insurance Agency in Montgomery and Mark Hughes of O.M. Hughes Insurance Agency in Birmingham. Several others were honored with awards at the convention and deserve to be recognized: Presidential Citation Award Winner – Bill Sager Committee Chair of the Year – Carl Schneider of Schneider Insurance Agency in Mobile Insuror of the Year – John Freisen of Fountain, Parker, Harbarger & Associates in Huntsville Director of the Year – Mark Hughes of O.M. Hughes Insurance Agency in Birmingham

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Associate Member of the Year – Brenda McNeill of Genesee General

2016 Issue 3 | Alabama Independent

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Continued on page 22

COVER DESIGN PROFESSIONALS WITH BIG ‘I’ MARKETS When it comes to covering the architects in your community, where do you turn? CBIC Design Pros, an RLI company, provides Big “I” members access to comprehensive professional liability coverage for architects, engineers and surveyors through Big “I” Markets. CBIC has extensive knowledge in the professional services and construction industries, which means when you work with a CBIC underwriter, risk manager or claim manager, you’re speaking with a long-time veteran who has both the expertise necessary to understand a firm’s needs and the decision-making authority to get the job done. POLICY FEATURES INCLUDE: o Defendants’ reimbursement of expenses: $500 per day, subject to $12,500 maximum (reimbursement applies day one) o ADA/FHA/OSHA regulatory or administrative action reimbursement: $30,000 per policy period

o Automatic 90-day coverage for acquired or merged entities o Five-year extended reporting period o Innocent insured provision

o Free pre-claims assistance o Disciplinary proceedings $5,000 per proceeding

o 50% deductible mediation credit, subject to a $12,500 maximum

reimbursement:

o Definition of “insured person” includes temporary or leased personnel and retired personnel o Predecessor firm coverage, including joint ventures o Worldwide coverage o Liberalization clause o Blanket waiver of subrogation provision

o Consent to settlement provision: 50/50 co-share between “insured” and “insurer” o 60-day automatic extended discovery period o Automatic excess coverage for separately insured projects o Management pack enhancement endorsement: directors & officers, fiduciary and employment practices liability o High self-insured retention program: Top & Drop

o Punitive damages extension where allowable by law CBIC has offered a consistent, reliable admitted market since 1979. Enjoy outstanding service and efficient claims handling while offering your clients coverage from a carrier rated A+ (Superior) by A.M. Best. To learn more, log in to Big “I” Markets and select Big “I”—RLI Design Pros—Architects, Engineers & Surveyors from the commercial products menu. 2016 Issue 3 | Alabama Independent

Convention SPONSORS&EXHIBITORS

Thank you for all the support!

Access Insurance Company AccuAgency Alabama Insurance Management Services Alabama Public Auto Insurance Agency Alabama Retail Comp Alabama Self Insured WCF Alabama Trucking Assn WCSI Fund Alabama Young Agents Committee AlaCOMP Amerisafe, Inc. American Mining Insurance Company American Strategic Insurance Applied Systems, Inc. The Argos Group Associated Insurance Administrators (AiA) Atlantic Specialty Lines Atlas General Insurance Services, LLC Auto-Owners Insurance Company BAMA Berkley Southeast Insurance Group Berkshire Hathaway Guard Insurance Co. Big I PAC Golf Tournament Centauri Specialty Insurance Holdings Commercial Sector Insurance Brokers Cornerstone National Insurance / Rate Recovery Plan Country Living Insurance CRC Insurance Services Donegal Insurance Group EMC Insurance Companies Enterprise Rent-A-Car Equity Partners Insurance Services Excalibur Education Foundation FCCI Insurance Group Foremost Insurance Group FrankCrum Frankenmuth Insurance Garrison, Davis & Bleistine Genesee General Gulfstream Property & Casualty Haulers Insurance Company, Inc./H I C I Healthcare Workers Comp Fund / Coastal Insurance Company, Inc. Imperial PFS Insurance House (*First STEP Sponsors in Bold) 22

Alabama Independent | 2016 Issue 3

InsurPAC International Association of Insurance Professionals Johnson & Johnson LexisNexis Risk Solutions McClelland & Hine, Inc. National Security Fire & Casualty Penn National Insurance PA Lumbermenâ&#x20AC;&#x2122;s Mutual Insurance Co. Philadelphia Insurance Companies Premium Assignment Corporation Progressive Risk Placement Services / NAI RLI Personal Umbrella Safehold Special Risk Sagamore Insurance Company Selective Insurance of America Flood Unit Sentry Insurance The Sheffield Fund SIUPREM, Inc. Souders Underwriters Group, LLC Southern Cross Underwriters Southern Insurance Underwriters, CMGA Southern National Financial Corporation Swiss Re Corporate Solutions Travelers Insurance Company Universal Property & Casualty Westfield Bank, FSB WorkersFirst CompFund TheZenith

SIUPREM welcomes Norman Barfoot

2016 Issue 3 | Alabama Independent

Everything you need to know

Perpetuation and Succession Planning

By Al Diamond

• Valuing Your Agency • Contingency Buy-Sell Agreements

On October 19, at the Fall Education Conference, everything you need to know to perpetuate your agency or to form a succession plan to allow you an orderly path to retirement or to allow your next generation to take over your agency will be presented to you by Al Diamond, President of Agency Consulting Group, Inc. This agency is one of the oldest national consulting practices for insurance agencies in the United States. Like it or not, everyone will perpetuate their businesses someday – some by choice, some by chance, and some by their demise. The question is whether or not the perpetuation will be to the benefit of the perpetuator. Al Diamond will spend the day showing Alabama agents how to set up their agencies for internal perpetuation, for mergers, for clusters and conglomerators, and for potential sale. Included in this discussion will be an explanation of Contingency Buy-Sell Agreements, a minimal cost method of assuring the succession of your agency when no perpetuation plan is in place. A major portion of the day will be an explanation of how and why to value your own agency to determine its logical value. We have all heard “multiples” bantered about for decades, but few of us have ever understood the basis of value in our agencies, their future earnings potential. Would you pay $1 Million for any business that would return you $10,000/yr in after tax earnings? --- Well neither would anyone else. So Al will spend time explaining how you can figure out your own “future 26

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earnings potential” or the earnings potential of any agency that you might be considering buying. This number becomes an upper limit to what you or anyone else should expect from the agency asset that you have spent a lifetime building. Please plan to join us October 19, 2016 for Alabama Independent Insurance Agents Fall Education Conference. Al will be offering discounted Agency Consulting Group, Inc. products and services to all attendees. For more information about Al Diamond and Agency Consulting Group please visit www.agencyconsulting.com .

2016 Issue 3 | Alabama Independent

INDUSTRY NEWS Cornerstone National Insurance hired Jordan Wheeler as Territory Sales Manager offering the Rate Recovery Plan to Central Tennessee and Northern Alabama!

COMMERCIAL SECTOR INSURANCE BROKERS ANNOUNCE THE ACQUISITION OF GARRISON INSURANCE BROKERS OF PELHAM, AL Commercial Sector Insurance Brokers has acquired Garrison Insurance Brokers out of Pelham, Alabama. Effective July 1, 2016. Bob Bleistine, Sharon Hunt, and Brooke Beasley will be joining Commercial Sector to further develop and build our in-house underwriting capabilities. Bob Bleistine will be joining Commercial Sector’s management team as a Vice President and also as a Principal. Bob will also be the Director for Commercial Sector’s contract binding markets and Sharon Hunt and Brooke Beasley will be transitioning with Bob as Contract Binding Underwriters.

Jordan Wheeler The Rate Recovery Plan is designed to assist drivers who have fallen into a nonstandard risk, and drives them back to preferred pricing and coverage levels. Insureds that maintain both positive pay and driving activity over a three year period may receive a 6-8% discount upon each sixmonth renewal; dramatically increasing agency retention, often up to 75-80% while lowering insureds premium, and giving them the opportunity to regain their coverage tier!

Lamar Andrews, President of Commercial Sector, said “ As Commercial Sector continues to develop and grow year after year, I am proud to be adding the underwriting skill set that each of these talented individuals will bring to Commercial Sector.” Mr. Andrews added, “ I know this will further our ability to serve our retail agents’ needs as we navigate a challenging insurance landscape.” Commercial Sector Is A National Wholesaler. We Specialize In Assisting Retail Agents Solve P&C Problems for: Primary & Excess Liability, Products Liability, Property, Coastal Property, Wind Deductible Buy Backs, High Valued Homeowners, Inland Marine, Physical Damage & MTC, Pollution, Professional, & Workers Compensation.

Additionally Cornerstone offers unparalleled service for insureds with roadside on EVERY policy and excellent claims service with the Snapsheet mobile speed estimator app.

Contact: Lamar Andrews Direct Line: 205-332-8117 Email: landrews@comsectorins.com

CNI offers competitive rates, high commission percentages and contingency bonus opportunities.

Bob Bleistine Direct Line: 205-776-2494 Email: bbleistine@comsectorins.com

Contact Jordan Wheeler to learn more about driving insureds back to preferred today at jwheeler@cornerstonenational.com and how your agency too, can prescribe Tess and Tate’s Rate Recovery Plan! www.CornerstoneNational.com

Brooke Beasley Direct Line: 205-332-8135 Email: bbeasley@comsectorins.com

Alabama Independent | 2016 Issue 3

Sharon Hunt Direct Line: 205-776-2496 Email: shunt@comsectorins.com

INDUSTRY NEWS A L ABAMA I NSUR ANCE DI-Day AY 2016 Alabama Celebrates 10 Years Hosted at the University of Alabama

DO N’ T M I SS O UT O N T H I S GR E AT O P P O RT UNI T Y ! E N J O Y N E T W O R K I N G A N D E D U C AT I O N A L O P P O R T U N I T I E S

W I T H W O R L D - C L A S S S P E A K E R S O N T H E L AT E S T I N D U S T R Y T R E N D S . CE, CLE, AND CPE IS BEING SOUGHT FOR INSURANCE AGENTS,

AT T O R N E Y S , A N D A C C O U N TA N T S I N A L A B A M A , M I S S I S S I P P I , A N D G E O R G I A .

LIFE/HEALTH

PROPERTY /CASUALITY

RISK MANAGEMENT

Retur ning to the University of Alabama this Fall

W e d n e s d a y, N o v e m b e r 9 , 2 0 1 6 • B r y a n t c o n f e r e n c e c e n t e r Register at www.insurance-day.ua.edu

Celebrating its 10th year hosted at the University of Alabama and in its third decade as a premier insurance conference, Alabama I-Day 2016 will be held for insurance agents, accountants, and attorneys not only in Alabama but who also work in Mississippi and Georgia on November 9. In cooperation with:

ALABAMA INSURANCE PLANNING COMISSION

INSURANCE & FINICIAL SERVICES • RISK MANAGEMENT • ACTURIAL SCIENCE

ALABAMA DEPARTMENT OF INSURANCE

After you vote in federal and state elections on Tuesday, plan to come to Alabama I-Day the following Wednesday, November 9. The conference includes plenary sessions and concurrent break out meetings led by experts in Property/Casualty, Life/Health, and Risk Management at the Bryant Conference Center in Tuscaloosa. A plethora of great door prizes will be given, including football tickets to the Iron Bowl. CE, CPE, and CLE credits have been requested. The conference is hosted by the Alabama Insurance Planning Commission, the Alabama Department of Insurance, and the Culverhouse College of Commerce at the University of Alabama. To register, go to www.insurance-day.ua.edu.

A L ABAMA I NSUR ANCE D AY 2016 DON’ T MISS OUT ON T HIS GRE AT OPPORT U N IT Y ! E N J O Y N E T W O R K I N G A N D E D U C AT I O N A L O P P O R T U N I T I E S W I T H W O R L D - C L A S S S P E A K E R S O N T H E L AT E S T I N D U S T R Y T R E N D S . CE, CLE, AND CPE IS BEING SOUGHT FOR INSURANCE AGENTS, AT T O R N E Y S , A N D A C C O U N TA N T S I N A L A B A M A , M I S S I S S I P P I , A N D G E O R G I A .

LIFE/HEALTH

RISK MANAGEMENT

PROPERTY /CASUALITY

Retur ning to the University of Alabama this Fall

W e d n e s d a y, N o v e m b e r 9 , 2 0 1 6 • B r y a n t c o n f e r e n c e c e n t e r Register at www.insurance-day.ua.edu In cooperation with: ALABAMA INSURANCE PLANNING COMISSION INSURANCE & FINICIAL SERVICES • RISK MANAGEMENT • ACTURIAL SCIENCE

ALABAMA DEPARTMENT OF INSURANCE

2016 Issue 3 | Alabama Independent

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2016 Issue 3 | Alabama Independent

hunt@aiia.org

2016 ALABAMA INSURANCE

MARKET ANALYSIS

Ted A. Kinney, CIC CPCU ARM AU AAM AAI AINS CPIA CRIS AIIA Director of Education and Technical Affairs The 2016 Edition of the Property/Casualty State/Line Report published by A.M. Best reflects the Alabama P&C market based on 2015 industry data. Premium results are classified by line of business and by insurance company. This compilation reflects only rank by premium volume and market share for the top ten carriers by line in Alabama. Direct writers in 2015 saw a slight decrease in market share, with 57.5%, which reflects a .2% decrease from 2014 (57.7%). This represents $4.48 billion of the $7.78 billion dollar Alabama market. National/State agency companies produced 42.5% of the market in 2015, which reflects a .2% increase from 2014. National/State agency carriers wrote $3.30 billion of the $7.78 billion dollar Alabama market. A close look at the breakdown of percentages gives a better understanding of the market segmentation between the Direct Writers and National/State companies. Direct writers are still the leader in the personal lines market, producing 80.9% of the $1.65 billion dollar Homeowners market, 79.9% of the $1.50 billion Private Passenger Automobile Liability market and 83.2% of the $1.28 billion Private Passenger Automobile Physical Damage market. The two major personal lines markets where National/State agency companies produced higher market percentages are the Fire insurance market with 69.3% of the $204.1 million dollar premium writings and the Allied Lines market with 66.2% of $196.0 million dollar premium writings.

While the Direct Writers dominate the personal lines market, National/State agency companies continue to produce the majority of the commercial lines premium with 65.5% of the $379.2 million dollar Commercial Multi-Peril Non-Liability market, 64.4% of the $189.3 million dollar Commercial MultiPeril Liability market, 65.4% of the $276.7 million dollar Inland Marine Market, 82.8% of the $349.3 million dollar Workers Compensation market, 80.5% of the $331.1 million dollar Commercial Auto Liability market, 78.8% of the $112.4 million dollar Commercial Auto Physical Damage market, 85.1% of the $33.8 million dollar Products Liability market, 78.5% of the $395.8 million dollar Other Commercial Liability market, and 79.0% of the $122.1 million dollar Medical Malpractice market. The Alabama All Lines Study represents approximately $7.78 billion dollars and includes all of the totals represented in this article. Of this total, 57.5% or approximately $4.48 million dollars is written by Direct Writers with the balance of 42.5% or approximately $3.30 billion dollars written by National/State agency companies. The overall market grew from $7.50 billion in 2014 to $7.78 billion in 2015. Market share for Direct Writers was slightly less in 2015 (57.5%) than 2014 (57.7%).

FIRE INSURANCE

Rank Company Market Share (%) Premium Written ($000 1. American International Group 11.3 23,059 2. Farmers Insurance Group 6.8 13,844 3. Auto Owners Insurance Group 6.0 12,181 4. Munich-American Group 5.5 11,177 5. Travelers 4.6 9,483 6. National Security Group 4.0 8,094 7. Zurich Financial Services 3.8 7,661 8. Sentry Insurance Group 3.4 6,851 9. ALFA Insurance Group 3.3 6,756 10. Assurant Insurance Group 3.1 6,254 The Fire insurance market in Alabama represents approximately $204.1 million dollars. Direct Writers produced $62.7 million dollars or 30.7% of this amount. National/State agency companies produced $141.4 million dollars or 69.3% of the total.

2016 Issue 3 | Alabama Independent

HOMEOWNERS

Rank Company Market Share (%) Premium Written ($000) 1. State Farm Group 30.2 499,992 2. ALFA Insurance Group 13.3 220,284 3. Allstate Insurance Group 11.1 183,759 4. USAA Group 6.7 111,600 5. Farmers Insurance Group 5.9 97,780 6. Travelers Insurance Companies 4.7 78,181 7. Liberty Mutual 3.5 58,391 8. Nationwide Group 3.0 48,938 9. Country Financial 2.5 40,995 10. Auto-Owners Insurance Group 2.1 34,468 The Homeowners insurance market in Alabama represents approximately $1.6 billion dollars. Direct Writers produced $1.3 billion dollars or 80.9% of this amount. National/State agency companies produced $317.3 million dollars or 19.1% of the total.

ALLIED LINES

Rank Company Market Share (%) Premium Written ($000) 1. Assurant P&C Group 7.8 15,399 2. FM Global Group 5.6 10,965 3. USAA Group 5.5 10,834 4. American International Group 5.4 10,690 5. Farmers Insurance Group 5.1 9,971 6. Zurich Financial Services, NA 4.6 9,028 7. Travelers Group 4.6 9,014 8. Allegheny Insurance Holdings Group 4.2 8,145 9. Cincinnati Insurance Companies 3.6 7,101 10. ACE INA Group 3.6 7,094 The Allied Lines insurance market in Alabama represents approximately $196.1 million dollars. Direct Writers produced $66.3 million dollars or 33.8% of this amount. National/State agency companies produced $129.8 million dollars or 66.2% of the total.

PRIVATE PASSENGER AUTO LIABILITY

Rank Company Market Share (%) Premium Written ($000) 1. State Farm Group 25.6 386,965 2. ALFA Insurance Group 13.4 201,675 3. Allstate Insurance Group 10.3 155,533 5. Progressive Group 7.3 110,146 6. USAA Group 5.9 89,734 7. Nationwide Group 3.6 54,815 8. Farmers Insurance Group 2.8 41,899 9. Liberty Mutual 2.7 40,454 10. Travelers Insurance Companies 2.4 6,502 The Private Passenger Auto Liability insurance market in Alabama represents approximately $1.50 billion dollars. Direct Writers produced $1.2 billion dollars or 79.9% of this amount. National/State agency companies produced $302.9 million dollars or 20.1% of the total.

Alabama Independent | 2016 Issue 3

800-226-3224 www.fcci-group.com

PERSONAL SERVICE. EXCEPTIONAL PARTNERSHIP. “FCCI’s culture stands out. We are a big company, but we don’t act like one. When I go out and visit policyholders with agents and our loss control consultants, our goal is to get to know and really help the agents and policyholders we work with.” Trey Stone, CIC Senior Marketing Underwriter Gulf Coast Region Birmingham, Alabama Now, let’s talk about your business. General liability • Auto • Property • Crime • Workers’ compensation • Umbrella Inland marine • Agribusiness • Surety Coverage available in 18 states. © 2016 FCCI

2016 Issue 3 | Alabama Independent

PRIVATE PASSENGER AUTO PHYSICAL DAMAGE

Rank Company Market Share (%) Premium Written($000) 1. State Farm Group 25.1 321,358 2. ALFA Insurance Group 15.8 202,033 3. Allstate Insurance Group 12.0 154,275 4. Berkshire Hathaway 9.6 122,896 5. USAA Group 7.0 89,349 6. Progressive Group 6.0 77,369 7. Nationwide Group 3.2 41,505 8. Liberty Mutual 2.6 33,247 9. Farmers Insurance Group 2.5 31,615 10. Travelers Insurance Companies 2.1 26,593 The Private Passenger Auto Physical Damage insurance market in Alabama represents approximately $1.2 billion dollars. Direct Writers produced $1.0 billion dollars or 83.2% of this amount. National/State agency companies produced $214.9 million dollars or 16.8% of the total.

COMMERCIAL MULT-PERIL (NON-LIABILITY)

Rank Company Market Share (%) Premium Written ($000) 1. Travelers Insurance Companies 9.6 36,220 2. Cincinnati Insurance Companies 7.2 27,271 3. Nationwide Group 7.0 26,404 4. Auto-Owners Insurance Group 6.6 25,175 5. State Farm Group 6.5 24,694 6. Alabama Municipal Group 4.8 18,262 7. ALFA Insurance Group 4.0 15,272 8. ACE INA Group 3.9 14,842 9. Allstate Insurance Group 3.8 14,315 10. Hartford Insurance Group 3.3 12,380 The Commercial Multi-Peril (Non-Liability) market in Alabama represents approximately $379.0 million dollars. Direct Writers produced $130.8 million dollars or 34.5% of this amount. National/State agency companies produced $248.4 million dollars or 65.5% of the total.

COMMERCIAL MULT-PERIL (LIABILITY)

Rank Company Market Share (%) Premium Written ($000) 1. Alabama Municipal Group 11.5 21,774 2. Travelers Insurance Companies 10.3 19,471 3. Auto-Owners Insurance Group 9.3 17,650 4. Nationwide Group 7.4 13,928 5. Cincinnati Insurance Companies 5.9 11,201 6. Philadelphia/Tokio Group 4.7 8,886 7. FCCI Insurance Group 4.2 8,037 8. State Farm Group 3.7 7,046 9. ALFA Insurance Group 3.0 5,605 10. Hartford Insurance Group 2.7 5,070 The Commercial Multi-Peril (Liability) market in Alabama represents approximately $189.3 million dollars. Direct Writers produced $67.3 million dollars or 35.6% of this amount. National/State agency companies produced $121.9 million dollars or 64.4% of the total.

Alabama Independent | 2016 Issue 3

For Comprehensive Mobile Homeowners Insurance, put your trust in a company that has been insuring homes for over 50 years. National Security Can Provide You With: • • • • • • • •

$100,000 Maximum Policy Limits AAIS Special Form 3 Policy 15% New & Renewal Commission Partnership Profit Sharing Fast Online Policy Issuance Direct Contract with National Security Replacement Cost Option Discounts for New Home and 50+ Age of Insured • Easy Payment Options National Security has provided competitive, affordable insurance to policyholders for over 50 years, but we also provide a lot for our agents, with competitive commissions, excellent customer service and experienced company adjusters. As an admitted Southeastern based regional company, National Security prides itself on fast, efficient service from a friendly small town company, and online access for all agents, providing fast quotes, online policy issuance, online dec page printing, and real-time policy information. Find out more by calling Sharon at 1-800-239-2358 x213 or visit nationalsecuritygroup.com.

Elba, Alabama

2016 Issue 3 | Alabama Independent

INLAND MARINE

Rank Company Market Share (%) Premium Written ($000) 1. Liberty Mutual Insurance Companies 16.4 45,319 2. CNA Insurance Companies 15.0 41,370 3. State Farm Group 6.3 17,561 4. American International Group 4.3 11,893 5. Travelers Group 4.1 11,449 6. ACE INA Group 3.2 8,740 7. Allianz American Companies 3.1 8,544 8. Zurich Financial Services NA 3.0 8,351 9. Progressive Group 2.9 8,066 10. FM Global Group 2.4 6,704 The Inland Marine market in Alabama represents approximately $276.7 million dollars. Direct Writers produced $95.8 million dollars or 34.6% of this amount. National/State agency companies produced $180.8 million dollars or 65.4% of the total.

WORKERS COMPENSATION

Rank Company Market Share (%) Premium Written ($000) 1. Travelers Group 11.3 39,539 2. Zurich Financial Services NA 8.1 28,328 3. Hartford Insurance Group 6.8 23,651 4. Liberty Mutual Insurance Companies 6.2 21,647 5. American International Group, Inc. 5.9 20,734 6. Berkshire Hathaway 4.8 16,670 7. Great American P&C Group 4.6 16,148 8. Old Republic Insurance Group 3.5 12,078 9. AmTrust Group 3.2 11,084 10. Benchmark Insurance Company 3.1 10,671 The Workers Compensation market in Alabama represents approximately $349.3 million dollars. Direct Writers produced $60.1 million dollars or 17.2% of this amount. National/State agency companies produced $289.2 million dollars or 82.8% of the total.

OTHER LIABILITY

Rank Company Market Share (%) Premium Written ($000) 1. Zurich Financial Services NA 6.1 23,994 2. Travelers Insurance Companies 5.9 23,512 3. Cincinnati Insurance Companies 5.2 20,551 4. American International Group, Inc. 5.2 20,456 5. Liberty Mutual Insurance Companies 3.7 14,788 6. Nationwide Group 3.7 14,516 7. Auto-Owners Insurance Group 3.3 12,993 8. Fairfax Financial (USA) Group 3.2 12,721 9. ACE INA Group 3.2 12,558 10. Penn National Insurance 2.5 9,889 The Other Liability market in Alabama represents approximately $395.8 million dollars. Direct Writers produced $84.9 million dollars or 21.5% of this amount. National/State agency companies produced $310.8 million dollars or 78.5% of the total.

Alabama Independent | 2016 Issue 3

COMMERCIAL AUTO LIABILITY

Rank Company Market Share (%) Premium Written ($000) 1. Progressive Group 8.6 28,377 2. American International Group, Inc. 8.1 26,738 3. Auto-Owners Insurance Group 7.1 23,570 4. Travelers Insurance Companies 6.5 21,659 5. Nationwide Group 5.0 16,413 6. Berkshire Hathaway 4.5 14,897 7. Old Republic Insurance Group 3.9 13,039 8. Zurich Financial Services NA 3.9 12,907 9. Sentry Insurance Group 3.4 11,395 10. Canal Group 2.9 9,752 The Commercial Auto Liability market in Alabama represents approximately $331.1 million dollars. Direct Writers produced $64.4 million dollars or 19.5% of this amount. National/State agency companies produced $266.7 million dollars or 80.5% of the total.

COMMERCIAL AUTO PHYSICAL DAMAGE

Rank Company Market Share (%) Premium Written ($000) 1. Auto-Owners Insurance Group 11.5 12,898 2. Progressive Group 8.6 9,629 3. Travelers Insurance Companies 5.6 6,341 4. QBE Americas Group 4.9 5,508 5. Nationwide Group 4.6 5,166 6. EMC Insurance Companies 3.2 3,651 7. Old Republic Insurance Group 3.2 3,626 8. State Farm Group 3.2 3,578 9. Cincinnati Insurance Companies 3.0 3,349 10. Zurich Financial Services NA 2.9 3,315 The Commercial Auto Physical Damage market in Alabama represents approximately $112.4 million dollars. Direct Writers produced $23.8 million dollars or 21.2% of this amount. National/State agency companies produced $88.5 million dollars or 78.8% of the total.

PRODUCTS LIABILITY

Rank Company Market Share (%) Premium Written ($000) 1. Penn National Insurance 9.6 3,236 2. Cincinnati Insurance Companies 8.3 2,804 3. Liberty Mutual Insurance Companies 6.1 2,065 4. ACE INA Group 5.8 1,961 5. Travelers Insurance Companies 5.3 1,789 6. W.R. Berkley Group 4.8 1,639 7. Argo Group 3.4 1,161 8. United Fire & Casualty Group 3.4 1,161 9. Hartford Insurance Group 2.9 996 10. CNA Insurance Companies 2.9 967 The Products liability market in Alabama represents approximately $33.8 million dollars. Direct Writers produced $5.0 million dollars or 14.9% of this amount. National/State agency companies produced $28.8 million dollars or 85.1% of the total.

2016 Issue 3 | Alabama Independent

MEDICAL PROFESSIONAL LIABILITY

Rank Company Market Share (%) Premium Written ($000) 1. ProAssurance Group 52.9 64,675 2. MAG Mutual Group 9.6 11,696 3. Centennial Casualty Company 6.2 7,552 4. Berkshire Hathaway 5.0 6,143 5. Coastal Insurance RRG, Inc. 4.8 5,838 6. CNA Insurance Companies 3.7 4,481 7. State Volunteer Mutual 2.0 2,491 8. Markel Corporation Group 1.9 2,303 9. Red Clay RRG, Inc. 1.5 1,800 10. Allegheny Insurance Holding Group 1.0 1,209 The Medical Malpractice market in Alabama represents approximately $122.1 million dollars. Direct Writers produced $25.6 million dollars or 21.0% of this amount. National/State agency companies produced $96.5 million dollars or 79.0% of the total.

FEDERAL FLOOD

Rank Company Market Share (%) Premium Written ($000) 1. Wright National Flood Insurance 16.1 4,231 2. Assurant P&C Group 15.7 4,146 3. Selective Insurance Group 12.6 3,325 4. Auto-Owners Insurance Group 9.7 2,565 5. Allstate Insurance Group 7.9 2,081 6. Nationwide Group 7.2 1,904 7. American International Group 6.8 1,799 8. USAA Group 6.4 1,678 9. Hartford Insurance Group 5.9 1,544 10. Farmers Insurance Group 5.3 1,396 The Federal Flood market in Alabama represents approximately $26.3 million dollars. Direct Writers produced $7.5 million dollars or 28.8% of this amount. National/State agency companies produced $18.7 million dollars or 71.2% of the total.

ALL LINES â&#x20AC;&#x201C; OVERALL RANKING (TOP 20)

Rank Company Market Share (%) Premium Written ($000) 1. State Farm Group 16.7 1,298,534 2. ALFA Insurance Group 9.2 717,040 3. Allstate Insurance Group 6.8 529,076 4. Travelers Insurance Companies 4.5 354,296 5. Berkshire Hathaway 4.2 327,202 6. USAA Group 4.0 314,715 7. Progressive Group 3.5 269,337 8. Liberty Mutual Insurance Companies 3.4 264,674 9. Nationwide Group 3.3 260,726 10. Farmers Insurance Group 2.8 219,541 11. American International Group, Inc. 2.5 196,089 12. Auto-Owners Insurance Group 2.4 188,269 13. ACE INA Group 2.1 162,695 14. Cincinnati Insurance Companies 2.0 154.602 15. Zurich Financial Services NA 1.8 138,319 16. CNA Insurance Companies 1.5 113,315 17. Hartford Insurance Group 1.3 104,182 18. Country Financial PC Group 1.2 96,646 19. ProAssurance Insurance Group .9 68,260 20. Assurant P&C Group .8 63,047 The total Property and Casualty insurance market in Alabama represents approximately $7.7 billion dollars. Direct Writers produced $4.48 billion dollars or 57.5% of this amount. National/State agency companies produced $3.30 billion dollars or 42.5% of the total.

Alabama Independent | 2016 Issue 3

ONLINE or CLASSROOM COURSES

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The CISR Program provides the best training and education available. Earn the CISR designation by passing 5 courses, or pass all 9 and become a CISR Elite.

www.TheNationalAlliance.com or 800-633-2165

2016 Issue 3 | Alabama Independent

Q: A:

Ted’s Tablet

QUESTION: A question regarding business income and the difference between the stand alone policy and what usually comes with a BOP. Do you have any form or document that illustrates the difference between the two coverage forms? ANSWER: I don’t have anything on file, but I can answer based on the ISO BOP. Most companies have their own BOP form so coverage can differ from ISO. I don’t particularly like BOP policies because of their inflexibility. What you see is what you get; however, they have improved. The ISO BOP provides five items under “Additional Coverage” – business income, extended business income, extra expense, business income from dependent properties and interruption of computer operations. Business income – coverage is based on 12 months “actual loss sustained”. There is no dollar limit. Of course, the payments would end after 12 consecutive months even if the income loss continued beyond that point. Payroll is covered for 60 days unless a greater number of days are chosen. Extended business income – this coverage begins on the date the property is repaired, rebuilt or replaced and operations are resumed and end earlier of when the income from the operations is restored to the pre-loss level, or 60 days unless a greater number of days is chosen. Extra expense – this coverage pays extra expenses incurred: to avoid or minimize the suspension of business and continue operations; to minimize the suspension of business if business can’t continue operations; or to repair or replace any property or research or replace lost information on damaged “valuable papers and records” if it reduces the amount of loss that would have been payable under business income. It will only pay for extra expenses that occur within 12 consecutive months after the direct physical loss or damage. Business income from dependent properties – this coverage pays for the actual loss of business income sustained due to

Alabama Independent | 2016 Issue 3

physical loss or damage at the premises of a dependent or secondary dependent property caused by a covered cause of loss. The limit is $5,000 unless a higher limit is chosen. Interruptions of Computer Operations – business income and extra expense coverage can be extended to apply to suspension of operations caused by an interruption of computer operations due to the destruction or corruption of “electronic data” due to “specified causes of loss” and collapse. There is a $10,000 policy year aggregate for all losses unless a higher limit is chosen. The advantage of separate coverage is the flexibility of coverage options. Some of these would include: •

Limits are chosen by the insured.

•

Business income coverage can extend beyond 12 months if adequate limits are written.

•

Business income includes the continuing expense of payroll unless coverage is reduced or excluded.

•

Loss of income due to the loss of utility services is available. This is a major exposure.

•

Increased loss of income due to the extension of the “period of restoration” because of the enforcement of ordinances or laws is available.

Although business income is subject to coinsurance, there are several “no coinsurance” options including agree value, monthly limit of indemnity, and maximum period of indemnity. Four optional coverage forms are available: Business income including extra expense, business income excluding extra expense, extra expense only, or leasehold interest. Do you want to buy a suit “off the rack” or one that is “tailored”? That’s the difference between the two approaches.

Tangerie Underwood (205) 326-4129 Ext. 106 www.aiia.org 2016 Issue 3 | Alabama Independent

Governor Bentley Announces Drop in Rate of Uninsured Motorists

By Julie Magee, Commissioner Alabama Department of Revenue The Alabama Department of Revenue is pleased to announce that recent statistical review by our analysts has demonstrated that the uninsured motorists rate is now at 12.9%, which is almost half of what it was when the department started the legislatively mandated Online Insurance Verification System (OIVS). In 2010, the Insurance Research Council measured the Alabama rate of uninsured motorists at 22%, the sixth highest in the nation. In 2014 they stated we had dropped some to 19.6% but this was calculated prior to the start of the OIVS, using two year old data. Why is this drop exciting and important? Actually, there are numerous valuable reasons. Probably the one most people care about the most is that responsible Alabama drivers are protected much better today than they were three years ago from being in an accident with an uninsured driver and being forced to call upon their own insurer to repair their vehicle. How unfair is it to be driving down the road, following all the rules and then being involved in an accident and having to pay your own deductible to repair your car? Now, due to the combined efforts of the Alabama Department of Revenue (ADOR), The Alabama Law Enforcement Agency (ALEA), the Alabama Department of Insurance (ADOI) and all the insurance companies operating in our state, the odds of this happening have been sliced almost in half. Another important reason is that there has been a 60% drop in citations given for driving without insurance in the past three years. This in turn caused a decrease of more than 56,000 court cases per year between 2011 and 2014. That represents a 64% reduction in insurance court cases for the same time frame! If you calculate all the expenses involved with the courts, lost productivity, travel expense, payroll, etc…the change to the way this is handled represents between $3.1-$3.7 million dollars per year in State and those who own cars in our state. While not the impetus of the change, the OIVS has also increased revenue related to catching uninsured drivers. The Revenue Abstract available from the ADOR website reflects net collections related to MLI reinstatement fees as follows: 44

Alabama Independent | 2016 Issue 3

2015-16 (partial year - Oct. ’15 – May ’16) 2014-15 2013-14 2012-13

$2,014,535 $2,197,536 $1,128,334 $ 892,121

And while ADOR is bringing more revenue, it is also shaved the cost of the program from a prior $590,000 per year annual expense to $321,000 this past fiscal year. How is this different from the past? In the past, ADOR’s procedure was to pull random samples from the entire pool of automobile registrations operating in our state and mail to the address of record a letter asking for the owner of the car to enter their car insurance information on the form and mail it back in to ADOR. ADOR would then contact the insurance company to verify the information was accurate. If the process worked perfectly then the inquiry was closed. However, it is easy to see how things could go awry. Inquires could be mailed to an old address, lost in the mail, forgotten once received, or mailed back and lost along the way. Also, ADOR was sending these notices randomly so in essence putting a burden on insured and noninsured alike to prove they were following the law. This old process caused headaches, was not efficient and was costly. ADOR spent an average of $590,000 a year just handling a random shot at catching someone without insurance. So, during the Bentley administration’s very first legislative session in 2011, ADOR Commissioner Julie Magee and her Motor Vehicle Department staff led by Deputy Director Coone worked with legislators, The Alabama Department of Public Safety (now called ALEA), the ADOI, insurance agents and many representatives of the insurance industry and companies to create ACT

2011-688 aka OIVS. Most everyone recognized that change was needed but there were many different opinions on how to implement the change. The version that ended up in the legislation and eventually became reality, was recommended by Commissioner Coone and based on a model created by the Insurance Industry Committee on Motor Vehicle Administration (IICMA). A model that existed only on paper, no working model had ever been created in any state prior to Alabama adopting this model. However, it was the best choice because it allows requesting parties to go directly to the source of insurance information â&#x20AC;&#x201C; the insurance companies. The OIVS allows a real time response to be provided to an insurance inquiry that contains standardized request information. Most responses to requesting parties are returned in less than a second. It uses a simple web service that poses no drain on any server or technological resource, is secure and best of all is REAL TIME. All it does is ask the insurance company insuring the car if the car is insured right now and in less of a second, the law enforcement official, the local county tag office official or ADOR staff in Montgomery, get an answer. More than 200 insurance companies are integrated with the OIVS. The programâ&#x20AC;&#x2122;s success is highly attributable to its integration with law enforcement systems. ALEA has reported benefits from the OIVS including officer safety at the roadside due to less time spent out of the vehicle obtaining insurance documentation from the vehicle driver, having policy information available from the

system ensures accuracy of the policy information because the officer does not have to view and enter the policy number unless he/she obtains an unconfirmed response from OIVS, and there is less manpower needed related to processing citations issued for no insurance. Using OIVS proves a benefit to law enforcement personnel as well as the public related to citations issued for no insurance. Prior to OIVS, a vehicle operator who could not produce a copy of the evidence of insurance on the vehicle to a law enforcement officer would be subject to receiving a citation for no insurance. The vehicle owner/operator would then be required to make a court appearance to produce a copy of the insurance document just to have the citation dismissed. Such cases resulted in increased fees/expenses for the court system as well as citizens who were required to take time off from work in order to appear in court to answer to the citation. Insurance agents and the companies they represent are also huge fans of the OIVS. The fact that what they once had to do via phone, fax or in person is now done programmatically in less than a second means a much better use of their time and is a great example of how government can provide customer friendly services that benefits everyone. The OIVS is a tremendous illustration of a project that truly demonstrates how government agencies should work together to provide more effective and efficient services for its taxpayers.

2016 Issue 3 | Alabama Independent

SEEN&HEARD

BIRTHS

Congratulations to Lura and C.D. Denson on the birth of their second child, Fuller Barrow Denson, born on August 2, 2016. C.D. works at Stead & Fuller Insurance Agency and is currently serving as your Young Agent Chair.

NUPTIALS

Congratulations to Cody Lowrey of Insurance Offices of America on his marriage to Ms. Whitney Douglas. They were happily married on May 21st.

SYMPATHY

Our thoughts are with Mark Calhoun of McGriff, Seibels & Willams and his family on the loss of his granddaughter Katelyn on June 13th, 2016. Our thoughts are with Art Glasgow of Peck-Glasgow Agency, Inc. on the loss of his mother Alice Jean Glasgow on July 19th, 2016.

Welcome New Members

AIIA would like to welcome the following new members who have recently joined the association. Thank you for joining Alabama Big I!

NEW AGENCY MEMBERS Schutz Insurance Agency David Schutz Hartford, AL Old National Insurance Rickey Harris Jasper, AL Robinson Group LLC Otanaio Robinson Montgomery, AL 2016

- ISSUE

alabama

N E D N E P E D IN

LB Allen Insurance DBA Allen Insurance Beth Allen Decatur, AL

ME WELCO President A New AII CPIA, CLCS gg, Jeff Ho

Southern Premier Agency Joseph Armstrong Abbeville, AL

If you have news, we would love to include it in our next issue! Please send your press releases, photos or notices to Michelle McKee at mmckee@aiia.org 46

Alabama Independent | 2016 Issue 3

NEW ASSOCIATE MEMBERS Nationwide Insurance Company â&#x20AC;&#x201C; Independent Channel Ronald Daray Huntsville, AL Berkshire Hathaway GUARD Insurance Companies Shawn Roguskie Wilkes-Barre, PA Orchid Insurance Billy Breaux Vero Beach, FL Southern Fidelity Property & Casualty Anthony DiBuono Tallahassee, FL Towerstone, Inc. Taylor McGuire Birmingham, AL EIS, Inc. Daniel Drennen Birmingham, AL

2016 Issue 3 | Alabama Independent

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