Big I Virginia, Summer 2014

BIG I The

Official Publication of the Independent Insurance Agents of Virginia

Virginia

Summer 2014

Data Breach What You Need to Know

Social Media in the Workplace Key Trends That Will Affect Your Future

* For dramatization only. Stewart knows how to change a flat tire, but should not service a vehicle in any circumstance.

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A Subsidiary of Risk Placement Services, Inc. Serving the Transportation Industry Since 1946 Summer 2014 • THE BIG “I” VIRGINIA

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SUMMER 2014

BIG I Official Publication of the Independent Insurance Agents of Virginia

IIAV STAFF

Virginia

Nettie Ardler, CPIW, DAE, AIAM Insurance Account Executive aardler@iiav.com Robert N. Bradshaw, Jr., MAM President & CEO rbradshaw@iiav.com cell (804) 929-4134 Teri Chester Executive Secretary/ Receptionist & Membership Coordinator tchester@iiav.com Natallia Chyhryna Accounting Assistant natallia@iiav.com Sherry Grubbs, AISM Accounting Manager sgrubbs@iiav.com Joe Hudgins, CPCU Technical Consultant jhudgins@iiav.com cell (804) 929-4138 Bonnie Joyce Insurance Administrative Assistant bjoyce@iiav.com Melanie Kjar Communications/Website Director mkjar@iiav.com Linda Loving, CIC, AISM, AIAO IIAV Chief Operating Officer & VFSC Executive Vice President loving@iiav.com cell (804) 929-4133

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Message from the Chairman of the Board - Robert Short

8

Message from the State National Director - James P. Bradner

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Message from the President and CEO - Bob Bradshaw

12

ISO’s Data Breach Exclusion Endorsements

17

Data Breach Coverage Opportunity Comes with New Swiss Re Policy Form

26

Trusted Choice® - Are You Maximizing Your Benefits?

29

IIAV Advertises in Washington Nationals Yearbook

30

2013 Key Trends Report

38

IIAV Upcoming 2014 Events

42

Social Media in the Workplace

46

IIAV Education Checklist

IIAV extends our appreciation to the following sponsors of this publication: AAA Mid-Atlantic

33

JMWilson 15

Amerisafe 20

Jackson Sumner & Associates

Anderson and Murison

33

Johnson & Johnson

Danny Mitchell Vice President Business Development dmitchell@iiav.com cell (804) 929-4135

Atlantic Specialty Lines

19

MEMIC 37

Atlas General Services

23

Millers Mutual Group

Brethren Mutual Insurance Company

32

Nationwide 21

Susan E. C. Perkins Membership/Education Coordinator sperkins@iiav.com

Builders Mutual Insurance

47

Penn National Insurance

13

Preferred Property Program

39

Eastern Insurance Holdings

35

RPS Rollins

Kristina Preisner IIAV Director of Education & VAIA Executive Director kpreisner@iiav.com

FCCI Insurance Group

44

SIAA 29

GUARD Insurance Group

34

Southern Insurance Company of VA

31

Harford Mutual

18

TAPCO Underwriters

43

Harleysville Insurance

48

The Iroquois Group

5

ISU Agency Network

11

Utica National

Bonnie J. Warren, ACSR, CPIW, DAE, RPLU Insurance Account Executive bwarren@iiav.com Marie Toney Sales Associate mtoney@iiav.com cell (804) 929-4136 James West Director of Finance jwest@iiav.com

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IIAV is an organization devoted to promoting, enhancing, serving and assisting independent insurance agents.

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia 8600 Mayland Drive, Richmond, VA 23294 Phone: 804.747.9300 / Toll-free: 800.288.IIAV (4428) Fax: 804.747.6557 E-mail: members@iiav.com / Website: www.iiav.com

Inside this issue

The

THE BIG “I” VIRGINIA • Summer 2014

Burns & Wilcox

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2 24, 25 7

3

36

For information on advertising please contact: Jim Aitkins, Blue Water Publishers, LLC / 22727 161st Ave SE, Monroe, WA 98272 phone: 360.805.6474 / fax: 360.805.6475 / jima@bluewaterpublishers.com

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia and is published quarterly

by Blue Water Publishers, LLC. IIAV and Blue Water Publishers, LLC do not necessarily endorse any of the companies advertising in the publication or the views of its writers.

Strong Agencies Made Stronger

For 35 years Iroquois has helped make strong, independent agencies even stronger and more independent. And it shows.

LEADERSHIP Iroquois recognizes some of its members who have recently played key leadership positions within the industry: John W. Atkins, III

Edward C. Kellam, Jr.

2012 Best Practices Agencies

James P. Bradner

Douglas B. Megill

Towne Insurance Agency, Inc. Chesapeake, VA

Barry K. Carper

Crystal Miller-Johnson

V. Richard Divers, Jr.

J. Vince Mullins

Dawn Dotson

Jordan Reynolds

Michael F. Funkhouser

Robert T. Short

Frances P. Garrett

Dennis C. Winfree

Tyler W. Hancock

Benjamin G. Winters

President, VFSC Board of Directors Lewis Insurance Associates State National Director, IIAV Towne Insurance Agency, Inc.

Short Insurance Associates, Ltd Charlottesville, VA

District 2 Director, IIAV The Ware Co.

District 5 Director, IIAV McLean Insurance Agency, Inc.

President, PIA of VA & DC Insurance Center of Winchester

Second Vice Chairman, IIAV Associated Insurance Systems Services, Inc.

VFSC Board of Directors Savage & McPherson Insurance

Board Member, PIA of VA & DC Huffman Insurance Agency, Inc.

VAIA Board of Directors Robins Insurance Agency, Inc.

Outstanding Agent, PIA of VA & DC SWVA Professional Insurance Agency, Inc.

Vice President, VFSC Haun Magruder Inc.

Chairman, IIAV Short Insurance Associates, Ltd

Immediate Past President, PIA of VA & DC Chas. Lunsford Sons & Associates VFSC Board of Directors Ford & Thomas Insurance Agency, Inc.

Treasurer, IIAV & VAIA Board of Directors Wood Insurance Agency District 3 Director, IIAV Winters Oliver Insurance Agency

Independent agents with premium from $1 million to $100 million join The Iroquois Group® for market optimization and strategies to increase their revenue, profits and agency value—without giving up their independence.

Shannon H. Herring

Young Agent Liaison Hubbard Insurance Agency, Inc.

The

®

IROQUOIS Group

To learn more about how Iroquois could further strengthen your agency, contact Matt Ward at 804-320-6984 or mward@iroquoisgroup.com and visit our website at www.iroquoisgroup.com

Summer 2014 • THE BIG “I” VIRGINIA

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Chairman of the Board Robert Short bob@shortinsuranceltd.com

Technology Attributed to Fiscal Growth of Agencies

I

n a recent survey of independent insurance agencies, the internal growth of insurance agencies was attributed to technology. Seventyseven percent of those agencies in a survey conducted by Vertafore were designed to identify the sentiments of agencies using technology effectively. o Agencies that were once considered small have increased their revenue size in recent years. As a result, they are now categorized as medium-sized agencies. o Smaller agencies say mobile technology has been beneficial, and data shows they have embraced it more than larger agencies.

“The results of our survey reflect the positive impact that technology is having on the way agents and brokers prospect, conduct and retain business,” said Bruce Winterburn, vice president of industry relations for Vertafore. “As new regulations emerge and business processes change, agents have to adapt and evolve to meet the new demands of their clients.”

Medium sized firms (26-75 employees) grew the most in 2012; 28 percent experienced nearly 10 to 20 percent growth, while 64 percent grew approximately 2 to 10 percent.

Other segments also witnessed growth: •

•

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23 percent of large agencies (76+ employees) have grown 10 to 20 percent and 56 percent have grown 2 to 10 percent 17 percent of small agencies (1-25 employees) have grown 10 to 20 percent and 72 percent have grown 2 to 10 percent

THE BIG “I” VIRGINIA • Summer 2014

Of those medium-sized firms surveyed, nearly a quarter (22 percent) outgrew the small agency segment since 2010, moving into the medium-sized agency segment by 2012. These figures complement the Big “I” 2012 Agency Universe Study which revealed that since 2010, the percentage of small agencies has decreased from 32 percent to 28 percent while the percentage of medium-small agencies has increased from 42 percent to 46 percent.

“As a result of their technology investments, many smaller agencies have had an opportunity to add and manage businesses that they did not previously have the capacity to support,” said Winterburn. “As agencies of all sizes take advantage of tools available to them, new revenue and growth opportunities have emerged.”

Mobile features and functionality continue to play an important role for insurance agencies across the country. The largest number of agencies (47 percent) feels that mobile features have helped them grow and evolve alongside their clients. But 27 percent say it has not helped them grow, while 25 percent are unsure.

However, an equal number of large agencies feels that mobile features have been a help (40 percent) and a hindrance (40 percent).

“The dichotomy in the large agency sentiment may likely be attributed to the lack of mobile access and training currently available for agents,” said Winterburn. “We see the adoption of mobile usage by agencies of all sizes as an opportunity to participate in the technology shift occurring right now within the insurance industry.”

It seems to be clear that technology is a crucial tool in the continued development and implementation within our business units. As growth continues to show the path of progress, the results will become even more evident.

Summer 2014 • THE BIG “I” VIRGINIA

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State National Director James P. Bradner jbradner@towneinsurance.com

Let’s talk about what’s happening at the Federal level.

T

he annual “BIG I” Legislative conference in Washington, DC was April 1012. Insurance Agents from all over the nation gathered for an excellent program (Paul Begala and Tucker Carlson dueled). Most states sent large contingents to visit their Senators and Congressmen-women. Mr. William Talley, our Chairman-elect, Mr. Megill, Mr. Bradshaw and I represented our Commonwealth. It’s ironic that we are the closest state to the Capitol and had the smallest contingent (except for Alaska, who had one). It is a great meeting and I’d like to see more Virginians involved, but I know the issues….one is traffic. The train is a godsend to counter the traffic argument. I took the train from Norfolk and was in D.C. by 9:30 a.m., two blocks from the hotel. Please consider next April’s event; you won’t regret it.

Some Federal issues seem to be going our way. With Flood off the radar for a while, most everyone in Congress we talked to expects TRIA to be reauthorized, and they think NARAB II will be attached to it for convenience. We also preached keeping the Feds out of our State governance of insurance with good reception.

A quick shout out to IIABA and their publications, IA Magazine and Insurance News and Views. I hope you’ve seen the reformatted and modernized versions and the electronic availability on the I-Pad and the web. It has been really well received, so check it out.

And finally, the Trusted Choice campaign is gaining traction. Trusted Choice is our new logo designed to drive traffic to Independent Agents who are members of the Big “I”. There are money and materials available for use; please contact Danny Mitchell at IIAV for more information. And, if you go to a Washington Nationals game, check out the Trusted Choice ad across from the article on Bryce Harper in the game magazine!

Best Regards, Jim Bradner

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THE BIG “I” VIRGINIA • Summer 2014

If you cannot place all of your clients’ personal insurance needs, they will find someone who can.

When it comes to personal insurance, every part matters. Because when one piece goes missing, the entire account could come undone. At Burns & Wilcox, we can insure individual portions of their coverage or the whole account. So you do not have to turn away any business. We have the expertise, resources and experience that can only come from being the leader in wholesale personal insurance. That is why no one has you covered like Burns & Wilcox.

Baltimore, Maryland | 410.891.4200 toll free 800.729.1273 | fax 410.540.9140 baltimore.burnsandwilcox.com

Morehead City, North Carolina | 252.726.8992 toll free 800.498.1600 | fax 252.726.9484 moreheadcity.burnsandwilcox.com

Charlotte, North Carolina | 704.525.1152 toll free 800.999.3434 | fax 704.525.7399 charlotte.burnsandwilcox.com

Commercial • Personal • Professional • Brokerage • Binding • Risk Management Services 9

President and CEO Bob Bradshaw rbradshaw@iiav.com

Write a $214 check to everyone in your database – and mail it to them.

T

hat appears to be the new average cost per exposed record in a data breach. Ask your clients if they can write a $214 check for everyone in their database? The average number of records exposed per breach incident has risen to 23,647 records and this is AFTER the breaches that involved over 100,000 records have been omitted from the comparison because they don’t involve the “common” company of today. Having said that, it’s easy to see the companies that have a 100,000 record exposure. I bet you probably have a client or two or three or…..

This is not the time to bury our heads in the sand.

You hear about data breaches every day and as agents we need to do our due diligence. We need to not only ask what our own exposure is, but , “What is my client’s exposure?” to data breach. Can they get by with the policy enhancements or do they need a stand-alone policy? If you sell a GL policy, what excuse can you give for not offering to explore with your clients a cyber liability stand alone policy and, if they don’t get one, making sure you have a record that one was offered and rejected?

You’ve heard our corporate counsel Doug Palais plead with agencies to comply with the 2003 law that requires all agencies to have a privacy record policy for their agency. IIAV has worked with Sera Brynn – our cyber security specialists – to affordably help our members with their policy needs. As well, Sera Brynn can work with companies – your clients – on their liability exposures. By working together, you provide a good

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THE BIG “I” VIRGINIA • Summer 2014

service to your clients and receive a commission/fee share with Sera Brynn.

Regarding your employment and email/social media policies – IIAV has identified HR Affinity Group to work with your agency on these critical employment policies. If you don’t have policies related to these new technologies, your agency could be at risk.

“And speaking of risk ... you really need to look at IIAV’s Cyber Liability products.

IIAV, through their for-profit arm VF5C, has partnered with Arlington/Roe & Co., Inc. to offer our members an exclusive program to help protect their agencies from information security breaches. Check out our ad on page 22 on what the program offers and ease of getting a quote and binding coverage.

Agencies should also be doing their due diligence by offering Cyber Liability to their clients. CGL policies do not provide the necessary cyber liability coverage for businesses and are becoming more restrictive with ISO’s 2014 Data Breach exclusion endorsements being filed in various states. The IIAV has access to several excellent stand alone Cyber Liability markets for your customers and can assist you with placing this coverage.

I encourage you to visit our website at www.iiav.com for a listing of benefits, rate chart, and easy to complete application.”

This magazine is dedicated to cyber liability issues and it’s a demonstration of our interest in and concern for helping our members navigate this terribly complicated area. Don’t forget to call on us if you need some help.

Robert N. Bradshaw, Jr., MAM President & CEO

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The ISU Agency Network Summer 2014 • THE BIG “I” VIRGINIA

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h c a e r B Data

ISO’s 2014

Exclusion Endorsements

By Bill Wilson

P

erhaps a large majority of all businesses are subject to data breach liability whereby someone steals or makes unauthorized use of personal or confidential information, often of customers. Such data breaches have resulted in lawsuits and government sanctions. While most “ISO standard” policies do not cover most types of data breaches, ISO has introduced a number of liability data breach exclusion endorsements.

The unendorsed ISO CGL policy defines “property damage” to include: • Physical injury to tangible property, including all resulting loss of use of that property.

• Loss of use of tangible property that is not physically injured.

It also confirms what a number of courts have found that, “For the purpose of this insurance, electronic data is not tangible property.”

In addition, Coverage A of the CGL policy has a specific exclusion 2.p. for Electronic Data:

• CG 21 06 05 14– Exclusion – Access Or Disclosure Of Confidential Or Personal Information And Data-related Liability – With Limited Bodily Injury Exception (For Use With The Commercial General Liability Coverage Part) Note: The companion Commercial Umbrella endorsement is the CU 21 86 05 14 and the companion OCP/PCO endorsement is the CG 33 53 05 14.

Damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access or inability to manipulate electronic data.

• CG 21 08 05 14 – Exclusion – Access Or Disclosure Of Confidential Or Personal Information (Coverage B Only) (For Use With The Commercial General Liability Coverage Part) Note: The companion Commercial Umbrella endorsement is the CU 21 88 05 14.

In addition to the above, ISO is introducing the CG 33 63 05 14 – Exclusion – Access, Disclosure Or Unauthorized Use Of Electronic Data (For Use With The Electronic Data Liability Coverage Part) and the CX 21 43 05 14 – Exclusion –Access Or Disclosure Of Confidential Or Personal Information (For Use With The Commercial Excess Liability Coverage Part) which are not discussed in this article. ISO is

As a result, ISO’s CGL policy provides virtually (no pun intended) no coverage for data breach. However, given that almost any sized business can experience a data breach with potentially catastrophic liability, depending on how many customer records are maintained, ISO has introduced a series of data breach exclusion endorsements for its general liability and umbrella/excess programs. This article specifically discusses the three primary CGL endorsements being introduced: 12

THE BIG “I” VIRGINIA • Summer 2014

• CG 21 07 05 14– Exclusion – Access Or Disclosure Of Confidential Or Personal Information And Data-related Liability –Limited Bodily Injury Exception Not Included (For Use With The Commercial General Liability Coverage Part) Note: The companion Commercial Umbrella endorsement is the CU 21 87 05 14 and the companion OCP/PCO endorsement is the CG 33 59 05 14.

We look for the best independent agents and build relationships that last the duration. We are committed to the independent agency system as the only means to deliver our products. Because of that, we work hand-in-hand to help our agencies grow profitably.

Our agents set us apart.

Business • Surety • Auto • Home

www.PennNationalInsurance.com Visit our website to find out more.

Summer 2014 • THE BIG “I” VIRGINIA

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THE BIG “I” VIRGINIA • Summer 2014

also revising the CG 04 37 04 13 – Electronic Data Liability (For Use With The Commercial General Liability Coverage Part) and CU 04 02 04 13 – Electronic Data Liability Endorsement (For Use With The Commercial Liability Umbrella Coverage Part) to reflect these new data breach endorsements.

CG 21 06 05 14 – Exclusion – Access Or Disclosure Of Confidential Or Personal Information And Data-related Liability – With Limited Bodily Injury Exception (For Use With The Commercial General Liability Coverage Part) This is a mandatory endorsement (unless one of the optional endorsements below is used) that replaces the existing Electronic Data exclusion under Coverage A and combines the provisions of that exclusion with the exclusionary provisions described below for Coverage B: Coverage B excludes losses for personal and advertising injury arising out of any access to, or disclosure of, any person’s or organization’s confidential or personal information, including patents, trade secrets, processing methods, customer lists, financial information, credit card information, health information, or any other type of nonpublic information. The endorsements provide examples of such losses that are excluded by, but not limited to, those enumerated in the endorsement.

COMMITMENT A PROMISE WE DON’T TAKE LIGHTLY

“With 37 years in the bond business, I know our response time can be the difference between our agent writing a new piece of business or not.

I don’t go home at night until every phone call and email has been answered. ”

Steve Kuykendall Surety Manager

CG 21 07 05 14 – Exclusion – Access Or Disclosure Of Confidential Or Personal Information And Data-related Liability –Limited Bodily Injury Exception Not Included (For Use With The Commercial General Liability Coverage Part) This is an optional endorsement that can be used in lieu of mandatory endorsement CG 21 06. The purpose of the CG 21 07 is identical to that of the CG 21 06 except that it does not include an exception for bodily injury that is included in the CG 21 06.

CG 21 08 05 14 – Exclusion – Access Or Disclosure Of Confidential Or Personal Information (Coverage B Only) (For Use With The Commercial General Liability Coverage Part) This optional endorsement can be used in lieu of either the CG 21 06 or CG 21 07. It has the same exclusionary provisions for Coverage B as the other two endorsements.

However, there is no replacement exclusion under Coverage A for the Electronic Data exclusion and the existing Electronic Data exclusion in the CGL policy is not modified.

ISO’s property, CGL, crime, and BOP programs have various endorsements to provide some very limited coverage for the loss of data of information and a full Information Security Protection Policy (EC 00 10) to provide much broader coverage. In addition, most insurers have their own proprietary cyber exposure policies. For an excellent and very detailed comparison, check out the most recent comparison report at www.betterley.com.

Managing General Agency Since 1920

800.538.4796

jmwilson.com

Property/Casualty • Professional Liability • Surety Commercial Transportation • Personal Lines • Premium Finance

Summer 2014 • THE BIG “I” VIRGINIA

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THE BIG “I” VIRGINIA • Summer 2014

e g a r e v o C h h t c i a W e r s Data Btunity Come icy Form Oppor wiss Re Pol New S

Will Your Agency Information Security Procedures Allow You Coverage Benefits

L

iability from cyber-attacks is on the rise and the media is constantly reporting on companies being hacked, exposing protected personal information.

As an insurance agent you collect, use, and store personally identifiable information on a daily basis and in doing so have exposure to both regulatory penalties and potential first and third party liability. Included in Swiss Re Corporate Solutions new policy form is coverage for 1st and 3rd party breach of personal data. The Personal Data Protection, which is automatically afforded, provides limits of $10,000 per incident/$25,000 per policy period for a breach of the agency’s network security. Eligibility for 3rd party breach of personal data coverage, provided with a $1M policy sub-limit, is NOT automatic and is contingent upon the agency having security procedures in place to protect personal data and comply with various state and federal privacy laws.

Below are some things that every agency should be aware of when it comes to protecting your customers’ personal information. We will explore the agency’s general regulatory responsibilities for protecting personal data, the exposures faced by agencies, and provide some risk management guidance to help protect your operation and the data you keep. This information will provide you with a baseline understanding of what to consider in developing procedures to protect customer information and will help you take the necessary actions to position yourself to qualify for the 3rd party breach of personal data coverage under the Swiss Re E&O policy. You may also consider exploring the marketplace for a stand-alone policy offering increased limits and expanded coverage.

Things to Know About Data Breach Liability: Why should my agency care about protecting personal data?

As an insurance agent you collect, use, and store what is likely considered personally identifiable information on a daily basis and in doing so you have an obligation to secure this information whether it is in electronic or paper form. Both state and federal privacy laws require businesses to implement and maintain reasonable procedures to protect personal data. Not doing so creates an exposure to financial loss in the way of fines and penalties, the cost of handling a data breach including the notification, third party liability for damages caused by the data breach, and the potential cost of replacing computer equipment.

In addition, a data breach can have a devastating effect on the trust and loyalty of customers and can quickly ruin the reputation of the agency. Also keep in mind that the cost of implementing a security plan can be much less than the total cost of handling a data breach.

Is my agency legally required to protect personal information?

There are a number of federal laws that apply to protecting personal information and as of today 46 states have laws on the books as well. Understanding how both state and federal laws apply to your information security procedures is important because the fines for not compiling can cripple your business.

A few of the federal laws that may apply are below and you can also learn more by visiting the Legal Advocacy section of IIABA’s national website at www.iiaba.net: • Fair Credit Reporting Act requires that information generated in consumer’s credit reports is kept secure.

Summer 2014 • THE BIG “I” VIRGINIA

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• Gramm-Leach Bliley ACT applies to “financial institutions” and requires business to have reasonable procedures in place to ensure the security and confidentiality of customer information.

• Health Insurance Portability and Accountability Act (HIPAA) requires the security of health data.

In the past several years many, states have passed laws or regulations to protect the consumer’s personal information so you need be familiar with the requirements these impose on your operation. Understanding state and federal requirements is a daunting task. Here are some of the basic questions that you should consider when reviewing both federal and state laws: • • •

•

•

• • •

Do I collect the types of personal information that is required to be protected?

Specifically, what information needs to be protected?

Are there differing definitions and requirements for protecting general personal information versus personal medical information?

What procedures need to be in place to protect personal information based on the nature and size of my business? What does my state consider reasonable procedures?

Are there different security requirements for personal data stored internally and data transferred outside of the business’ secure network?

What is considered up-to-date encryption methods?

How is a data breach defined?

What are my notification responsibilities should a breach occur?

The National Conference of State Legislatures website offers links to state legislation involving security breaches of personal information. Visit www.ncsl.org to familiarize yourself with the state legislation where you have customers.

What is the potential cost of a data breach to the average agency?

Civil penalties can be substantial for breaches of data with penalties up to $150,000 per breach as an example in one state. Keep in mind that these are just penalties and don’t include actual costs handling a data breach, including notifying those parties affected or the indirect costs the breach will have on the business in terms 18

THE BIG “I” VIRGINIA • Summer 2014

of loss of the trust of customers. A 2011 study by Symantec showed an average cost per compromised record of $214.

The factors in their estimation included: legal fees, disclosure expense to contact affected parties, consulting help, and implementing new technology and training. So what’s at stake for your agency? The exposure is staggering. For an average size agency the potential cost of a data breach per agency is about $255,000. See the sidebar above for how that figure is determined. Unfortunately, the common reaction when numbers of that size are tossed out there is that IT COULDN’T HAPPEN TO ME! What is considered private personal information that needs to be protected?

This may vary by state but in general it is a combination of first and last name in combination on other data elements.

These may include: • social security number • driver’s license number • financial account numbers or credit/debit card numbers along with security access codes or passwords • health records • policy numbers

Partners.

You and your clients. You and Harford Mutual. We’re committed to protecting their business and building yours.

That’s what mutual success is all about.

Explore P&C insurance opportunities at HarfordMutual.com

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Experience the A-way — Attitude. Assistance. Adaptability.

ATLANTIC SPECIALTY LINES 800.368.2095 | atlanticspecial.com Summer 2014 • THE BIG “I” VIRGINIA

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What personal information do you have in your files?

The first step to protecting personal information is assessing what personal information you have in your files and who has access. Remember it’s not only data but all personal information whether electronic, paper, or voice. Take the time to do an assessment looking at the flow of information both into and out of the agency. This includes archived data, data in transit over your system, mobile devices that may leave the office, and of course that paper files. Meet with all agency staff (sales, accounting, and HR) to get a better feel for their access, including finding out if any outside contractors store customer information. When inventorying customer information keep in mind that information can be stored in or accessible through a number of different places both internally and externally including in file cabinets, on PC hard drives and servers, laptops, cell phones, CD’s, flash-drives, carriers website, call centers, and agency management system providers. Let the following help guide your discussion:

What are some of the exposures agencies are facing in the protection of personal information?

Exposure to a breach of data is posed by both internal and external threats. They can also be considered both physical and virtual exposures. Internal protections start with the physical security of the data contained in the office. This includes the access to the premises and work areas including security of computers, servers, and the network. While computer hacking is on the rise, the majority of breaches occur from stolen or lost equipment. Here are some risk management considerations to combat physical threats: • Secure the building with a security system for authorized access only.

• File cabinets should be locked and work stations clear of hard copy personal information.

• Secure the area containing networks servers and limit access.

• Appropriately screen cleaning crews providing service.

• When employees leave the agency make sure that all agency owned security equipment (all keys) and computers are returned, and system access terminated.

• All agency computers and mobile devices should

1. Who sends personal information to your business?

Customers, carriers, or credit agencies?

2. How do you receive personal information? This can include email, website, fax, social media, or by mail.

3. What kind of personal information do you collect?

Credit/debit cards, social security information, drivers Umbrella Agent VA.pdf 1 1/29/2013 9:51:11 AM IDs? 4. Who is using that information and has access? Employees, carriers, customers, vendors.

5. Where is that information stored? Branch offices, file cabinets, files at home, servers, database, disk tapes, lap tops, desktops cell phones.

6. Is information accessible from outside the agency or on devices used in the field?

A key risk management measure to limit your exposure from data breaches is to only keep the data you need and for only the length of time that you need it. Exercise care and implement a procedure for deposing of sensitive information. At last 29 states provide laws governing the disposal of personal data. Federal and state guidelines may require the agency to dispose of personal information in specified ways. To familiarize yourself To partner with us, call 800.381.9348 or with the state legislation where you visit our website at www.amerisafe.com. have customers, visit www.ncsl.org.

Remember if it’s not in your system, it can’t be stolen.

(continued on page 23)

Recent Recent Changes Changes in in the the Market Market Left Left You You Standing Standing in in the the Rain?

Rain?

C

M

Y

CM

MY

CY

CMY

K

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THE BIG “I” VIRGINIA • Summer 2014

Dry Off With AMERISAFE. Workers’ Comp for Working Working People People!

“ I trust NatIoNwIde ®

with my employees’ benefits.”

– Dale Earnhardt Jr., NASCAR® driver and owner, JR Motorsports

Dale Earnhardt Jr. and his family joined the Nation more than 30 years ago. That’s why, as a longtime Nationwide member, he trusts us with his employees’ benefits. Nationwide Employee Benefits offers: • Life/AD&D

• Limited Benefit Medical

• Disability

• Accident and Hospital Ca$hBackSM

• Dental

Call Paul Taylor at 734-788-6463 or go to nationwide.com/neb to learn more.

The name and likeness of Dale Earnhardt Jr. and other related trademarks and copyrights are used with permission of Hendrick Motorsports, LLC and JR Motorsports, LLC. Paid endorsement. © 2012 JR Motorsports, LLC. NASCAR® is a registered trademark of the National Association for Stock Car Auto Racing, Inc. The NASCAR Nationwide SeriesTM logo and word mark are used under license by the National Association for Stock Car Auto Racing, Inc., and Nationwide Mutual Insurance Company.

Nationwide, the framemark and On Your Side are service marks of Nationwide Mutual Insurance Company. © 2014 Nationwide Mutual Insurance Company. All rights reserved. Underwritten by Nationwide Life Insurance Company. EBO-0156VA (01/14)

Summer 2014 • THE BIG “I” VIRGINIA

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THE BIG “I” VIRGINIA • Summer 2014

(continued from page 20)

require passwords that are required to change every 90 days and employees should log off or lock their computers when left unattended. Staff should not share passwords.

• Implement encryption software on all laptops and mobile devices along with ability to wipe clean if lost.

• Don’t keep personal information on hard drives of desktops, laptops, and mobile devices.

• Do not leave portable devices unattended while out of the office, especially in cars.

Protecting data transmitted over the agency network and computers, portable devices, websites, and home computers is critical. There is exposure to data loss from viruses, hackers, spam, and malware. Specific attention needs to be paid to securing emails and personal information that is collected from the agency website.

Agencies handle insureds applications on a daily basis where information is transmitted to the agency and then to carriers. Here are some things you can do to protect from external threats: • Use a network professional to insure that are exposures are identified and addressed.

• Install strong firewall protection that is kept up-to-date to protect the agency network.

• Password-protect all agency WiFi connections.

• Implement virus and malware protection on servers, desktops, and portable devices and periodically update.

• All data back-ups should be password-protected and encrypted.

• Employees should always connect through office through a SSL/VPN connection.

• If collecting personal information through your

website or providing insureds access to policy information, be sure you are using SSL connection (https).

• Check with carriers to verify data transmitted to them, including emails, is secure.

• Implement a solution to secure emails with both carriers and customers. Transport Layer Security (TLS) is a possible solution.

You may not be able to control what and how unsolicited information is transmitted to the agency but once you have it in your possession it is your responsibility to protect it. We encourage you to make the investment to proactively work with an IT solutions provider to secure data as opposed to incurring the costs after a data breach has occurred.

What resources are available to Big “I” members to help them address agency information security?

IIABA’s Agents Council for Technology (“ACT”) has developed information on protecting client information which is available on the Big “I” Risk Management Website – E&O Happens under the “Publications and Media” tab and menu item titled “Agents Council for Technology”. A sample agency security plan is available as a starting point for the agency. The “Podcast” section also includes an excellent webinar recording entitled “Implementing an Effective Information Security Program in your Agency” and the most recent webinar called “Managing Agency E&O Exposure to Data Breaches and Cyber Liability”. To learn more about securing email using TLS encryption the website also has several articles and a recorded webinar.

These materials can also be found at www.iiaba.net/ACT. Reprinted with permission of Big “I” Advantage, Inc. and Swiss Re Americas. All rights reserved.

Summer 2014 • THE BIG “I” VIRGINIA

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?

maximizing

Are you your Big “I” membership benefits with Trusted Choice®

“

By Anita Trevino Now, what is Trusted Choice®? How is that different from the Big ‘I’?” Is a question that I get over and over again as I talk to other agents when they see the Trusted Choice® logo on the door of our agency or my business card. I never get tired of answering, because I appreciate Trusted Choice® and what it has done for my agency, and I believe it can do just as much for your agency without diminishing its value to mine. In fact the more agencies that participate in co-branding with Trusted Choice®, the better.

I can say with absolute certainty that if your agency has not added the Trusted Choice® logo to their agency sign, website and business cards, you are not getting the full benefit of IIABSC membership.

What is it exactly? Trusted Choice® is the brand of independent insurance agents, created by our national association. It’s not a market-access program, and it’s much more than just advertising and public relations resources, although Trusted Choice® include both. Branding is your identity and relationship with the consumer. Trusted Choice® is not meant to replace your agency’s unique identity, but instead supplement it with the message of why consumers should choose an independent agent in the first place: Choice, Customization and Advocacy.

In fact, retaining your agency’s identity and everything that makes it special is the point. Seeing the Trusted Choice® logo associated with a diverse group of professionals only reinforces its message. We’re independent. We aren’t tied down to one policy or one provider’s rates. We aren’t required to serve the consumers that a corporate office in Washington, D.C. decided upon from hundreds of miles away. The only thing that we are required to do is to uphold the standards of service stated in the Pledge of Performance. The rest is up to us to do as we see fit.

This talk of freedom leads us to one of the newest opportunities that co-branding your agency with the power of a national brand can bring your agency, participation in the new national Freedom Campaign. Our national association invested a lot of resources to develop this campaign, more than any of us could have done on our own.

Campaign materials (print ads, digital banner ads, letters, postcards, self mailers) feature images of professionals

26

THE BIG “I” VIRGINIA • Summer 2014

bound in cages, chains, ropes and clear but solid boxes asking “Is your agent free to get you a better deal?

Independent Agents are free to do what’s best for you.” All of these materials are available to you at no charge from the Agents Resource Website, www.trustedchoice.com/agents, customizable with your agency’s information.

Not only was this campaign developed alongside advertising professionals, but it was consumer tested as well. Eighty-four percent of the test subject agreed after viewing campaign materials that independent agents were better suited to meet their insurance needs. Seventyeight percent were more likely to use Trusted Choice® independent agents.

Another major investment of the Trusted Choice® brand is its consumer website, trustedchoice.com. Used in conjunction with the Freedom Campaign, It offers information consumers can use in their search for coverage along with the ability to get an online quote, which is a process that leads to the selection of a local independent agent to advocate on their behalf. The website promotes the benefits of using independent agents while helping your agency meet the needs of the next generation of insurance consumers, those who research insurance coverage online.

Worried about the expense involved with adding another logo to your agency’s materials? You don’t have to replace everything all at once, and national has a Marketing Reimbursement Program to help you get some of your expenses back. The program is first come, first served with no lifetime limits. That means that in the first year you could add Trusted Choice® to your agency website and get a portion of your expenses back, up to $250. The next year you could replace your agency sign. The next year you can update the agency letterhead and business cards as they run out. As long as there is money in the program every year you could get a portion of your co-branding expenses back.

There are other ways to co-brand your agency with Trusted Choice® that doesn’t involve any expense at all, only the time of training your agency to update a few procedures and build a new habit. For example, one big agency in the Upstate has everyone answer the phone with a greeting and the agency’s name followed by “Your Trusted Choice® agency.”

IS YOUR INSURANCE AGENT FREE TO GET YOU A BETTER DEAL? AN INDEPENDENT AGENT HAS FREEDOM OF CHOICE.

With access to many different providers, Trusted Choice® Independent Agents have more options at their fingertips. They can competitively shop around for you and put together a plan that suits both your needs and your budget. The only one they answer to is you.

Find your independent agent. Find a better deal at trustedchoice.com

Free to do what’s right for you.

SM

FPO

LET’S TALK ABOUT WHAT FREEDOM OF CHOICE CAN DO FOR YOU.

FPO

Jane Sullivan 800-123-4567

Above is a template from the Trusted Choice® Freedom Campaign, which offers print ads, digital banner ads, letters, postcards and selfmailers for your agency to use in communications with local prospects. The campaign was developed by professionals and is consumer-tested.

Trusted Choice® Pledge of Performance Trusted Choice® agencies are insurance and financial services firms whose access to multiple companies and commitment to quality service enable us to offer our clients competitive pricing, broad choice of products and unparalleled advocacy.

As a Trusted Choice® agency, we are dedicated to you and are committed to treating you as a person, not a policy. This commitment means we shall:

• Return your phone calls and e-mails promptly and respond to your requests in a timely manner.

• Provide 24/7 services for our customers, offering any or all of the following: emergency phone numbers, Internet account access, e-mail and call center services.

• Work with you to identify the insurance and financial services that are right for you, your family or your business and use our access to multiple companies to deliver those products.

• Use our experience and multiple company relationships to customize your coverage as needed.

• Guide you through the claims process for a prompt and fair resolution of your claim.

• Commit our staff to continuing education so they may be more knowledgeable in serving you.

• Help you solve problems related to your coverage or account.

• Treat you with respect and courtesy.

• Explain the coverages and options available to you through our agency, at your request.

• Conduct our business in an ethical manner.

We pledge this to you, our clients and ask that you let us know if we fail to meet our commitment, so we may take corrective action.

Summer 2014 • THE BIG “I” VIRGINIA

27

WOULDN’T YOU PREFER PROTECTION THAT FITS?

An independent insurance agent has freedom of choice. With access to many different As a TrustedTrusted Choice insurance agency, we offer you aInsurance choice of insurance companies.

That way, you providers, Choice Independent Agents have more options at their can choose the coverage that fits your needs best. Get tailored coverage. Choose Trusted Choice . fingertips. They can competitively shop around for you and put together a plan that suits both your needs and your budget. To find an agent near you go to www.TrustedChoice.com. ®

®

This ad is sponsored by the Independent Insurance Agents of Virginia 8600 Mayland Drive, Richmond, VA www.iiav.com 1-800-288-4428 members@iiav.com

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THE BIG “I” VIRGINIA • Summer 2014

IIAV Advertises in Washington Nationals Yearbook In an attempt to drive consumers to www.TrustedChoice.com and generate business for our members, IIAV has placed a full page advertisement in the yearbook for the Washington Nationals baseball team. The WOULDN’T YOU PREF ER PROTECTION THAT FITS? full page ad is placed across from the profile page on Bryce Harper, a key player and the first overall pick in the 2010 Major League Baseball Draft.

The advertisement encourages consumers to look for a Trusted Choice independent insurance agent. IIAV members are encouraged to go to the IIAV website and look for the information on “Important Trusted Choice/Project CAP Links” and make sure their profile with Project Cap has been updated. The Trusted Choice website received a record 100,000 hits in March, 2014.

An independent insuran As a Trusted Choice insuranc ce agent has freedom of choice. With provid ers, Trusted Choice e agency, we offer you a to many different Independent choice of insurance companiaccess can choose the coverage es. That way, you fingert that fits your needs best. Insurance Agents have ips. They can compe tailored coverage. Choose more options at their titively shop Get around for you and putTrusted Choice . both your needs and your togeth er a plan that suits budget. To find an agent near you go to www.Trusted Choice.com.

This ad is sponsored by the Independent Insurance Agents of Virginia 8600 Mayland Drive, Richmo nd, VA www.iiav.com 1-800-288-4428 members@iiav.com ®

Independent Insurance

Agents of Virginia.indd

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Summer 2014 • THE BIG “I” VIRGINIA

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2013 Key Trends Report >>

Note: This is Phase One of a two part initiative. In Phase One, we identify the key trends that will affect our future. In Phase Two, we are establishing a Customer Experience Work Group to map the customer’s journey and then to overlay the customer life cycle touch points that agencies and carriers have with their customers. We will then consider how agencies and carriers can apply the key trends below in order to enhance the overall customer experience at each touch point.

A Report of the ACT Strategic Future Issues Work Group (September 27, 2013 version)

2013 Hard Trends “Hard” trends are those that we believe are permanent and will change the reality with which we must deal. In 2012, we identified five trends: Social Web, Demographic/Diversity Transformation, Mobile and Mobility, Connected Consumer, and Data Availability and Analytics.

In early 2013, we began the process of reviewing, evaluating and updating the 2012 Trends to bring them current with what we believe to be the major trends that will impact our industry over the next few years. These Hard Trends will provide the foundation for the development of the industry’s “Must Do” Issues document.

We recognize that many of the examples used to help define the hard trends are themselves constantly changing and while they themselves may not be hard trends, they are “indicators” or “influencers” of the larger hard trends. Also, this is a living document that will grow and change over time and is designed to encourage dialogue and discussion.

THE KEY HARD TRENDS ARE: 1. Social Culture – We have transitioned from using the term Social Web to using the term Social Culture. This term more accurately reflects the broad influence and impact “social” is having on all aspects of our society including our business lives. It implies the ongoing transformational change in our culture - it is an expansive strategic trend that has grown out of social web tools and technology.

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THE BIG “I” VIRGINIA • Summer 2014

In this new environment, consumers have taken social interaction to a higher level, communicating virtually with much larger groups of people, while at the same time becoming increasingly connected and empowered using social media, mobile devices and other technologies.

Consumers are employing these new tools to become better informed, to make buying decisions and to express their opinions to their followers about the products, businesses and events of interest to them.

Businesses are starting to reinvent their business models to fit into the social culture and are transforming themselves into “social businesses” to properly leverage the opportunities presented by the social web, as well as, being able to adapt and respond to the expectations of the connected consumer.

Amber Naslund, President of Sideraworks, describes a social business as “the creation of an organization that is optimized to benefit its entire ecosystem (customers, employees, owners, partners) by embedding collaboration, information sharing and active engagement into its operations and culture.

The result is a more responsive, adaptable, effective and ultimately more successful company.”

Some of the components and influencers of the social culture include: a. Rich Media - (Voice and Video - podcast, Vine, Instagram video, SlideShare) b. The Education Economy - Think about what the consumer wants to know vs. what we want to tell

Southern Insurance Company of Virginia

Stays True To Our Chartered Distribution Course

Southern supports the independent agency system Exclusively!

Southern recognizes the value of the independent agency system and that’s why we work exclusively through independent agents. Unlike many others in the industry, Southern has no interest in any other distribution channel. Instead, we focus our energy on delivering greater value to our agents through: ✔ competitively priced insurance products ✔ timely underwriting ✔ outstanding claims service ✔ on-going development of state-of-the-art technology Others may choose to travel a different path, but at Southern we will continue to follow our chosen distribution course…

The Independent Agency System.

there when it matters most

it re vis om o m p.c arn To le egalgrou r at .don ge Parke 2. w w 1 w ll Jud 7 x1 or ca 468-112 01-80

31

them. Simply having an online presence is no longer enough... It is important to provide value through educating, informing and engaging clients and prospects. This can include demonstrating thought leadership and subject matter expertise. Consumers want to be educated, informed, advised but not sold.

1. Education includes informing your “community” in the moment so they can prevent mistakes and make right decisions.

2. The key is to create digital relationships and build a “community” around the needs or interests of the customer. That is, to create connections relevant to them. c. Inbound Marketing - It is changing forever how insurance firms communicate with (“sell”) customers and prospects. One-way (push or outbound marketing) communications (e.g., advertising) is becoming a lot less effective with significant groups of people. d. Digital Marketing/Content Marketing e. New payment tools/methodologies (Paypal, Square, etc.)

h. Transformational leadership - reinvent business adapt - transcend is key to survival.

2. Connected Society – Connected consumers are empowered through changing technology to interact with the world around them, and thereby to shape how businesses respond. They find, share and communicate information differently than the “traditional” consumer. They live on smart phones and tablets and network with friends and businesses through social and mobile technologies. In short, they make buying decisions differently and broadcast those decisions to their networked community. Reaching and responding to this consumer requires both different strategies and tactics than traditional methods of marketing and communication. Again, it is critical to create relevant connections.

Connectivity is expanding from consumers to business and even “things” – that is, all aspects of our physical world are being connected.

Here are some of the changes taking place in this Connected Society: a. Digital Natives/Social Natives – interact and consume information differently.

f. Marketing Automation (Infusionsoft, Hubspot)

b. Connected vs. Not Connected. Not only connected to the web, but to each other.

g. Speed/pace of change is accelerating - disruptive technology

c. Responsive web - need to respond to a variety of devices with the full functionality of the website.

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THE BIG “I” VIRGINIA • Summer 2014

d. Sharing Society (cars, bikes, couches, homes, etc.) e. Internet of things - physical and digital worlds will fuse. f. Wearable tech will be an important hard trend in mobility in the coming years. (Google Glass embedded chips). But also “things” that are connected to the Internet. (TV, Refrigerator, Toilet) g. New Technology (3D printing, driver-less cars, etc.) h. “Showroom” retail (Visit shop - buy online, easily connected with GPS, QR codes, next-gen. i. Cloud Computing - The ability to link and share across many types of devices. j. Location-based marketing/services – Foursquare, GPS type services - Snapshot, etc.)

3. Mobile and Mobility – Mobile along with Social and Cloud Computing are what has enabled the cultural transformation and the emergence of the Connected Consumer. Mobile cuts across everything. It will change the products offered (telematics, health checks, travel, etc.); it will affect quotes, account management, and claims; it creates a new infrastructure for communications in disaster situations. It will also change the way the customer interacts with agents and carriers, and how agents and carriers communicate with each other.

11716 WA IIABA ad.pdfTransformation 1 12/18/12 3:55 PM 4. Demographic/Diversity – ‘Diversity’ in every

sense of the word (age, ethnicity, culture, gender, connected vs. non-connected). Examples would include producers, service reps and owners from 23 to 73 all working together within agencies - and interacting remotely/virtually, as well as, the increasing number of Spanish and Asian-speaking consumers.

And, as noted above, there is now a new category of diversity consisting of the connected vs. non-connected consumer.

Each of these groups may have different preferences as to how they want to interact with their business partners.

Indicators and influencers related to Demographic/Diversity Transformation: a. Mobile workforce – work re-imagined (who, where, how) b. Virtual Employee (WAHVE) c. Exit of Baby Boomers from workforce, resulting in changes in business ownership, wealth transfer, the loss of expertise and industry knowledge. d. Solid perpetuation planning remains number-one driver of value of agencies – and their future. e. There are differing expectations among employees as to where, when, why and how insurance people should “work” in the future. More flexible work/life balance models are starting to modify the traditional brick and mortar or 9 to 5 models.

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Summer 2014 • THE BIG “I” VIRGINIA

33

b. Easy to use and comprehensive analytics available as part of online marketing tools to fine tune and measure the effectiveness of a business’s online marketing efforts.

5. Growing Availability of Big Data and Actionable Business Intelligence – New technologies and techniques are making possible the capture and analysis of more and more data (Big Data) and the creation of more useful Business Intelligence from it. Agencies and carriers are able to integrate this business intelligence into their decision-making in real time, enabling them to understand their consumers and operations better. These data analytic capabilities have significantly changed how insurance carriers make underwriting, servicing and marketing decisions over the last several years, but there are major opportunities for independent agencies to harness this business intelligence to enhance their prospecting, marketing, sales, servicing and management processes. That is, using BI and analytics to know when a consumer is likely to have a need rather than waiting for them to reach out or making a cold call.

c. Carriers will gather increasing amounts of data from consumers’ social interactions, as well as from their own databases. This data will include “life event” trigger information. How can carriers convert this data into useful business intelligence for their agents to use in their marketing, sales and servicing efforts? In addition, how can carriers create business intelligence from their own claims data to assist their agents in providing risk management advice to their clients? d. What impact will the availability of more extensive data and business intelligence have on the roles performed within carriers, such as in underwriting, loss control and data analysis? What impact will this business intelligence have on the frontline underwriting traditionally performed by agencies? How might the relationship between the carrier and the policyholder change as the result of the carrier’s possession of this extensive data and business intelligence?

Indicators and influencers relating to Big Data and Business Intelligence: a. New technologies applied to Big Data allow businesses to create Business Intelligence on a much larger scale than traditionally available from their internal systems. These technologies include the ability to make correlations between seemingly unrelated data to create accurate business intelligence. Predictive analytics is an example.

e. Does the availability of Big Data and business intelligence ease the entry of new competitors with business intelligence skills into the insurance industry? (e.g., Amazon, Google, etc.)

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THE BIG “I” VIRGINIA • Summer 2014

6. Changing Nature of Insurance Risk – Changing social norms, applications of technology, climate – all of the trends noted above and more – are changing the types of risks that consumers and businesses are facing, creating new opportunities for insurance carriers and agents to design new coverages and creating the need for insurance agents to advise their clients differently about their risks. Examples include the “sharing society,” information security exposures and the increase in the number and severity natural catastrophic events.

Indicators and Influencers for the Changing Nature of Insurance Risk: a. Mass Customization - customized and individually targeted marketing and product creation and delivery b. Severe, unpredictable weather and major catastrophic events - Will the pattern of the last several years continue driven by global warming and/ or other factors, or is it a temporary aberration from the norm? c. Disruptive Channels (like the sharing society where property is shared among several users) - Will have a significant impact on what is insured and how insurance is sold. Will definition of risk and coverage change? d. The need for us to re-visit existing coverages and

services in addition to the need to design new coverages. Much of what we currently offer was developed several years ago and would benefit from a fresh look given all of the changes that are continuing to occur. e. Carriers will need to be more agile and responsive to the increasing speed of change in our culture and business landscape.

7. Information Security Regulation – Federal and state regulators will increasingly target businesses which have not implemented statutorily required security plans and procedures, and the costs of data breaches will become more expensive to businesses. Criminal elements will continue to exploit the system security vulnerabilities of businesses and individuals using more and more sophisticated technologies, and employees will make mistakes – both resulting in the breach of classes of personal information protected by the federal and state statutes, typically referred to as Protected Health Information (PHI) and Personally Identifiable Information (PII). Mobility greatly increases the security risks that businesses face, if protected consumer information is put on these devices and they are lost or stolen.

These growing risks also create opportunities for carriers and agents to provide coverage and risk management guidance to clients. It is ironic that at the very time consumers

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35

seem to be willing to share more and more personal information via social media, laws and regulations are being implemented which impose more rigorous requirements on businesses to safeguard certain categories of protected consumer information.

Implications • We are seeing new business models spring up in industry after industry. They take advantage of disruptive technologies and changing consumers to displace traditional businesses. We have seen this occur to some extent in the insurance industry with auto insurance, as the direct carriers have taken market share from the traditional agency companies.

•

We are likely to see more radical changes in distribution models emerge in the future, giving customers opportunities to buy insurance in new ways. This may come from retail firms such as Walmart and Target, or companies known for their innovation and re-invention of traditional business models, such as Amazon and Google.

How do agencies best position themselves to compete in such a market?

•

New business models are emerging for independent agencies as well, which are much more virtual and unlimited by geographical boundaries. Many consumers will take advantage of self service functions online to perform routine inquiries, requiring agencies to reach out to them proactively both personally and using blogs and social media to provide the types of insights and insurance knowledge that consumers are looking for and which are not readily available elsewhere.

•

•

36

It is incumbent on independent agencies and carriers to heed these trends and to reinvent their businesses, becoming social businesses that engage with their clients and offer them the relationships, insurance knowledge, personal service and community participation that their clients value.

Just as changing consumer expectations are driving agencies and carriers to interact with them in real time and in new ways, agency-carrier relationships will need to change as well, as agencies need a new level of real-time support from their carriers to respond to their clients and the business models of both agencies and carriers evolve to respond to these trends.

•

Independent agencies and carriers are going to have to have the flexibility to interact with their clients using multiple communications methods, depending upon the type of communication and interaction the particular client is most comfortable with.

•

The digital presence that independent agencies and carriers provide must be able to render well on mobile

THE BIG “I” VIRGINIA • Summer 2014

devices of all types, since consumers are using these devices at least half the time when they access the Web. •

This is an exciting time for carriers and agencies to fashion new insurance coverages and risk management strategies that focus on the changing nature of insurance risks that are outlined in the identified trends above.

See “Keeping Up with Emerging Risks a Struggle for Insurance Industry.”

•

Agencies and carriers will need to keep up with federal and state privacy and data breach laws and regulations and have the policies and procedures in place to manage their information security risks.

•

Agencies and carriers face the challenge of keeping up with the trends and competitive pressures that will impact them in this time of incredibly rapid and profound change. It will be important for individual firms to create a culture that embraces innovation and change, and that puts in place the processes necessary to evaluate and implement changes successfully. It also will be important for individual businesses, as well as for industry organizations, to create innovative communications strategies, so that the messages about the need and importance for change filter down to the right levels of individual organizations.

you

Utica National starts with Since our humble

beginnings in 1914, we’ve been at the forefront of providing the products and services customers need.

One hundred years later, we are still a leader in niche products and offer cutting-edge products like: Right Pay, E-surity and an easy-to-use small business platform.

What we haven’t moved away from? Listening to you, understanding what is important to you and delivering on that expectation. Utica National focuses on our

agent-customers and being here for you, in all ways.

Call today to discuss how we can partner together to add value to your agency.

Mark V. Poindexter, Senior Marketing Representative Tel: 301-249-6728 • Cell: 301-395-7366 mark.poindexter@uticanational.com Thomas M. Garcia, CPCU, Senior Marketing Representative Tel: 804-739-4190 or 804-560-6681 thomas.garcia@uticanational.com

choosingmemic.

Why are more agents and employers choosing MEMIC? When it’s time to choose a workers’ compensation insurer, more insurance agents and employers in the Eastern US are choosing MEMIC. Why? Because as one of the fastest growing workers’ compensation specialists in the country, our expertise, our depth of safety and claims service, and our A (Excellent) rating from A.M. Best offers assurance that MEMIC provides the best long term value.

Go to www.memic.com/thechoice to find out more about what MEMIC can offer your clients in manufacturing, hospitality, healthcare, financial services, retail and professional services. www.memic.com

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Umbrella Programs that Give You More Options Preferred Property Program gives you broader, more flexible coverage with a range of limits Our umbrella liability policies are written by XL Insurance with Chubb Insurance Group for the excess layer—two of the industry’s most highly rated carriers.

We offer four umbrella limits, with coverage you can rely on.

• $5 to $25 Million in umbrella coverage with up to $50 Million in total limits.

• Hi-Rise apartments up to 35 stories eligible, with higher eligible by referral.

• Excess of D&O, General Liability, Auto, Employers Liability, Employee Benefits and more.

• Developer-sponsored boards eligible.

Contact us for a quote:

888.548.2465 A subsidiary of

JGS INSURANCE

info@umbrellaprogram.com www.umbrellaprogram.com

®

Service is our specialty; protecting you is our mission ®

960 Holmdel Road, Holmdel, NJ 07733 XL Insurance is the global brand used by XL Group pic’s insurance companies.

Our XL policies are underwritten by Greenwich Insurance Company.

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By Claudia St. John, SPHR

I

SOCIAL MEDIA

t’s time to face facts. Virtually everyone everywhere is on social media – or at least it seems that way.

Whether on the desktop computer or on a tablet, on a smart phone or on a laptop, at work or at home, access to and use of social media is everywhere. According to the Pew Research Center, 73% of all US adults have a social media account. Approximately 90% of adults age 18-30 are using social networking sites, 78% of adults age 31-49 are online, and 65% of adults ages 50-65 are using social media. And according to a survey by the staffing agency Intelligent Office, one-third of workers use social media at work for at least an hour a day, and a quarter of respondents said they wouldn’t work for a company that didn’t allow them to use social media while they are on the job.

The implications of this are significant. Employers have been held vicariously liable for harassing or discriminatory behavior by employees using online platforms. They have had to address employees sharing important proprietary information online. And they’ve had to address situations where employees have made derogatory, offensive remarks about important clients online.

Sometimes it feels like a free-for-all. But it doesn’t have to.

We recommend you consider implementing a social media policy to help your employees know what they can and cannot say online.

Your social media policy has to balance your need to manage your employees’ social media use with their legally protected speech.

Accordingly, you must affirm that the policy is not intended to interfere with your employees’ rights under the National Labor Relations Act (NLRA) to “engage in concerted activities” to discuss the terms and conditions of their work and workplace. In particular, it needs to recognize that employees have the right to carry on conversations online and on social media sites regarding employment, wage and working conditions, and that your policy is not designed to interfere with this protected speech. Here is what it should cover:

WORKPLACE

• Social Media Use: Rather than attempting to ban the use of social media at work (which, given the wide use of smart phones, is close to impossible and could violate an employee’s rights under the NLRA), indicate when and where it is acceptable and safe to check social media, such as during breaks and while at lunch and in the break room only.

• Purpose of the Policy: Describe in your policy what speech is NOT protected and give examples. Whether it is in regard to online activity at the workplace or at home, you can prohibit your employees from engaging in speech that can be construed as bullying, discriminatory, harassing, abusive, offensive to coworkers, clients or vendors or otherwise inappropriate, as long as it is not part of an effort by the employee to discuss employment or working conditions with 42

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in the

Vacant Building coverage

in a five-minute phone call.

Call. Quote. Bind. Using TAPCO’s courteous and prompt call center, Vacant Building coverage can be quoted, bound and delivered to your e-mail inbox quickly and accurately during one five-minute phone call.

CGL Coverage Available: • Primary limits up to $3 million Occurrence/Aggregate • $5,000 Medical Payments Coverage • Additional Interests • Coverage limited to designated premises • Excess or Umbrella limits up to $5 million

Property Coverage Available: • Building • Contents • Basic, Broad or Special Form • Replacement Cost or Actual Cash Value * Available coverages and markets may vary dependent upon risk characteristics.

The TAPCO Service Pledge • “A”-rated non-admitted carrier • Competitive pricing • Fast policy turnaround • In-house financing available

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Summer 2014 • THE BIG “I” VIRGINIA

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other employees. Be clear also that employees must not engage in behavior that violates local, state or federal law (such as ownership or dissemination of certain forms of pornography).

• Confidential and Proprietary Information: Ensure your policy is clear about ownership of confidential and proprietary information and that such information cannot be disseminated by employees, either online or otherwise. Take the opportunity to remind employees that customers AND competitors monitor content on blogs, LinkedIn and other social media sites, so what they say matters.

• Require Disclaimers: If your employees wish to comment on a blog or online forum that is related to your company’s business or industry, you can require that they include a statement disclaiming that the employee’s postings on this site are his/her own and do not represent the employer’s positions, strategies, or opinions.

• Be Specific: Include examples of proprietary and confidential information that is not owned by the employee, such as trade secrets, client lists, ongoing and prospective project work, etc.. Also, give examples of content that is owned by the employee (such as personal blog posts on topics unrelated to the organization).

• Right to Monitor: If you intend to monitor your employees’

online behavior, make sure you advise them accordingly.

In addition, take the time to go over the policy with your employees. Make sure they know what is expected of them, as employees may not know what’s okay and what is not okay to do online, or what is private and what is business-related. The more you educate, the more likely you will be to avoid problems.

And, as with many policies, we recommend that you tailor it specifically to your own workforce – rather than simply copying another company’s. For example, if employees are handling confidential material such as medical claim forms or credit card data, ensure your policy addresses that content specifically.

If your employees regularly engage in online activities for work, such as managing your company’s online presence and reputation, address what is and is not acceptable.

Finally, this is a dynamic area of law and employment policy.

Standards and practices – as well as government agencies and the courts –are having a tough time keeping up with the everchanging face of online activity. So, once you have a final policy in hand, be sure to have it reviewed periodically, and always seek expert advice before taking action against an employee on matters related to online behavior. As with all policies and practices, be legal, be fair, and be consistent.

Claudia St. John is president of Affinity HR Group, LLC, IIAV’s affiliated human resources partner. Affinity HR Group specializes in providing human resources assistance to associations such as IIAV and their member companies. To learn more, visit www. affinityHRgroup.com.

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

INDUSTRY EXPERTISE. PERSONAL SERVICE. “I have a sincere passion for helping FCCI policyholders manage risk and prevent loss. The best phone call I’ve gotten started with the words, ‘Brad, you saved my life.’ ” Brad Ross, ARM, AIS Loss Control Manager FCCI Southeast Region Duluth, Georgia Now, let’s talk about your business.

General liability • Auto • Property • Crime • Workers’ compensation Umbrella • Inland marine • Agribusiness • Surety Coverage available in 18 states. © 2014 FCCI

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EXPERTISE YOU CAN LEVERAGE. IT’S THAT SIMPLE.

For thirty years, Builders Mutual has been working hard to make your job easier. Agent tools like BOB 2.0 allow you to issue and service policies online with ease.

When you’re quoting residential, commercial and trade contractors, the insurance choice is simple.

Stay connected. buildersmutual.com Summer 2014 • THE BIG “I” VIRGINIA

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Good people Make great partners!

Quote a middle market account with Harleysville, and watch your circle of trusted advisors grow in a hurry. First, there’s your field underwriter, who’ll understand your client’s business and recommend the right coverage. Next, your risk services specialist, who’ll assess the hazards of your client’s operation and propose solutions to address the challenges.

And finally, when the account is especially large or complex, our claims business consultant can meet with your client initially, then later to discuss specific losses and trends. For contractors, manufacturers, wholesalers and more, team with our middle market professionals once and you’ll call us again and again. To learn more about this and other benefits of a Harleysville appointment, call 800-523-6344, ext. 5016, or visit our website.

Scan this tag to be sent directly to the agency recruitment section of our corporate website.

Business | Inland Marine | Personal | Life/Employee Benefits | Flood | Human Ser vices | www.harleysvillegroup.com