The CHART Exchange Sep-Oct 2016 by The CHART Exchange

IN THIS ISSUE 6

OUR CORE VALUES WILL GOVERN OUR CONDUCT

Hotel Registration Meeting Agenda

Message From The Earliest Adopter: Chart was built with the theme of Exchange as its core value.

JON HANCOCK LEAVES RSA TO JOIN LLOYD’S OF LONDON After holding senior positions at RSA, Hancock will take up his new role at Lloyd’s on December 2016

POSITIVE CHANGE FOR LLOYD’S COVERHOLDER SYSTEMS & CONTROLS

Event Calendar

Get Ready For The Insurance Event Of The Year!”

LLOYD’S PLANS IN EUROPE Lloyd’s remains committed to its European Markets following the ‘Brexit’ vote and is now working on plans to protect its access to the single market and the passporting rights it currently operates under.

October 3-5, 2016

Baltimore Marriott Waterfront 700 Aliceanna Street Baltimore, MD 21202, US

CHART EARLY ADOPTERS BILL OF RIGHTS RESOLVED by the Coverholders, Prospective Coverholders, Risk Takers, and Vendors assembled, that the following Articles be proposed as amendments to the Declaration of Interdependence.

MARKETING TO MILLENNIALS Austin says he sees disconnect between the products millennials need and the way in which they are provided and seeks to bridge this disconnect by making policies that are popular for millennials and easily available.

(Skills Building) is everything. The peach was once a bitter almond; cauliflower is nothing but cabbage with a college education.”

There is much happening in the area of systems and controls for Delegated Authority Binders in place at Lloyd’s.

CHART EXCHANGE OBJECTIVE #6

General Event Info

TESTIMONIAL: STEVEN AHERN SHARES HIS CHART STORY Setting up CHART was a big investment for all concerned and it has paid dividends with more to come. Anything worth having is worth fighting for.

CHART Exchange 24

LLOYD’S STORIED HISTORY ILLUSTRATES CURRENT BUSINESS OPPORTUNITIES The CHART (Cover Holders And Risk Takers) Exchange can help “demystify” working with Lloyd’s. It was established for the express purpose of expanding the U.S./London marketplace through the identification and pursuit of new business opportunities.

VIRTUAL AGENT SUMMIT SCHEDULED FOR 10/24-11/2/2016 They’ve put together Master Classes that feature the world’s most influential insurance agents and industry leaders. They’ll be sharing actionable tips on how to conquer the most difficult issues facing agents today.

2017 PROSPECTS FOR MGU -MGA PROGRAM BUSINESS CHART, which is the acronym for Cover Holders and Risk Takers, was established in 2015 to target more business opportunities with U.S agencies and program administrators.

BIG DATA AND VISUALIZATION EVENT AT LLOYD’S CITES DATA DRIVEN VALUE “There was genuine and palpable interest from the audience. We heard a lot of things today that we can definitely build on.”

THE BRITISH ARE COMING! THE BRITISH ARE COMING! And CHART invited them! And you can also accept our invitation to attend the 2nd Annual Coverholders and Risk Takers (CHART) Exchange meeting in Baltimore, MD on October 3-5, 2016 at the Baltimore Marriott Waterfront Hotel.

Sept-Oct 2016 VOLUME 1 - ISSUE 7 Publisher:

CHART Exchange Glenn W. Clark, CPCU

Membership Services Matt Basile

Advertising:

Tyler Cichewicz

Managing Editor: Tyler Cichewicz

Contributing Editor: Frank Huver

Subscriptions: Tyler Cichewicz

Layout, Design & Circulation: Ron Manera AdMax Corp., Inc.

Prefer To Read The CHART Exchange In PDF Format? Download PDF Version HERE

CHART Exchange info@chart-exchange.com 3001 Philadelphia Pike Claymont, Delaware 19703 www.chart-exchange.com 302-765-6001 Last Issue:

Cover Image Credit: Creative Commons

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SEPTEMBER-OCTOBER 2016

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Message From The Earliest Adopter

OUR CORE VALUES WILL GOVERN OUR CONDUCT Ex’-Change: “To give up something of value in order to gain something of greater value”

he CHART Exchange was conceived in January 2015 in order to fill a gap in an underserved niche of the insurance marketplace. There are a lot of organizations serving the insurance industry, and their prosperity is a living testimony for the need for some form of “gathering” in order to facilitate better commerce. Think of the many different ways humans “gather” and/or “interact” in order to “exchange”. Shopping malls, Internet, E-Bay, outdoor markets, trade shows, garage sales, flea markets, match.com, barter, and the list certainly includes industry groups. Google insurance industry groups and you will discover an exhaustive world of trade associations, organizations, internet groups, societies, designations, etc. All of these groups share certain characteristics meant to advance the interests of their membership and the interests of the group organizer in some form or fashion. There are other “constants” in the dynamic of association that play out in great regularity.

in direct proportion to what you put into it. As organizations grow, mature, diversify, etc., it can become increasingly difficult for new members to find the “exchange” they seek.

CHART was built with the theme of Exchange as its core value. Each participant is expected to bring a piece of their experience for the benefit of the whole.“ CHART was built with the theme of Exchange as its core value. Each participant is expected to bring a piece of their experience for the benefit of the whole. We limit agency, vendor partner, and market participation to those who will agree to share their contacts and expertise with others. This is not a new thought. Proverbs 27:17 states “as iron sharpens iron so does one person sharpen another”.

Glenn W. Clark, CPCU Publisher & Earliest Adopter

risked the relationship to help you become better? In business, who were your very best associates? Certainly not the ones who prospered at the expense of the other partners. Our core value of Exchange should govern all of our conduct. We have had our first experimental event to test the concepts in October 2015 and termed our Philadelphia gathering as our “Declaration of Interdependence”. We then took 62 Americans to London in May 2016 for CGL (CHART Goes to London) to visibly demonstrate our commercial core value of “more new business commerce between the U.S. and London”.

Do you remember the teachers One of those constants is that you who challenged you the most? On October 3-5, 2016, at the obtain a benefit from an activity How about a trusted friend who Marriott Baltimore Waterfront

6 March 2016

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CHART Exchange

Hotel we will be holding our first Summit as a formal organization. Can we now view our progress as wide acceptance that “to give up something of value in order to gain something of greater value” has firmly taken hold in the U.S./London marketplace? That CHART has achieved its objective to become an important catalyst for surfacing new business opportunities? We are convinced the answer is yes. With that said, we know we still have much self-examination, pruning of non-productive vines, expansion of our strengths, and hard work yet to do to get there.

Take some time to read through the “CHART Exchange.” We’d love to get your feedback and have you join us as an Early Adopter.”

General Event Info

October 3-5, 2016

Baltimore Marriott Waterfront 700 Aliceanna Street Baltimore, MD 21202, US Glenn W. Clark , CPCU www.chart-exchange.com

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SEPTEMBER-OCTOBER 2016

it’S

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NEWS

JON HANCOCK LEAVES RSA TO JOIN LLOYD’S OF LONDON After Holding Senior Positions At RSA, Hancock Will Take Up His New Role In December 2016 Jon Hancock to become Lloyd’s Director of Performance Management

loyd’s, the world’s specialist insurance and reinsurance market, is pleased to announce the appointment of Jon Hancock as Lloyd’s Director or Performance Management.

been appointed their new Director, Performance Management. He will take up the role on 1 December 2016.

It says everything about the attractiveness of the Lloyd’s brand that Jon wanted to come here after a career at RSA where he has held senior positions in the UK, Asia and the Middle East. I look forward to working with him.”

and understands instinctively the challenges facing the market and how we should respond to them. “It says everything about the attractiveness of the Lloyd’s brand that Jon wanted to come here after a career at RSA where he has held senior positions in the UK, Asia and the Middle East. I look forward to working with him.” “I would also like to place on record my sincere thanks to Theresa Froehlich as our Interim Performance Director. She has done and will continue to do a tremendous job in this important role for the Corporation.”

Welcoming the appointment, Jon Hancock’s career has been Lloyd’s CEO Inga Beale, said: spent with RSA, where he first Jon Hancock started as a Marine underwriter “This is a tremendous in their Liverpool office and was Lloyd’s of London announced that appointment for Lloyd’s and their Chief Executive Officer for Jon Hancock, Managing Director for the market. Jon is a man Asia and the Middle East. Jon UK Commercial and Global Broker who has lived and breathed took up his present role in July Relationship Director at RSA, has insurance his entire working life 2011.

www.chart-exchange.com

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SEPTEMBER-OCTOBER 2016

News-Analysis

POSITIVE CHANGE FOR LLOYD’S COVERHOLDER SYSTEMS & CONTROLS The Efficiencies of Modern Technology Will Be Employed To Enhance Coverholder Business In London the relevant stakeholders.” Lloyd’s The market continues to be receives about 30% of its premium competitive and Lloyd’s recognizes here is much happening in income through firms holding this business may be in jeopardy, in the area of systems and part, due to antiquated systems controls for Delegated Lloyd’s receives about and processes that delay the Authority Binders in place sharing of critical data to all 30% of its premium at Lloyd’s. In fact, the TOM relevant parties. Furthermore, (Target Operating Model) income through firms utilizing non-standard formats steering committee has made holding underwriting authority which may require manual a decision to focus on four key handling can cause inaccuracies deliverables in 2016. One of on behalf of Lloyd’s Syndicates. with little or no data validation This is a significant number those initiatives is Delegated until it is too late. This can be Authority Services, which costly. that is growing through new outlays a vision to make relationships; such as those Coverholder business in The use of modern technology, formed in CHART.” London more efficient. real-time processing and sharing of data is disrupting traditional The vision according to TOM is that underwriting authority on behalf distribution models including much “Coverholders will have a single of Lloyd’s Syndicates. This is a of the way Coverholders process audit, the compliance processes will significant number that is growing business today. There is increasing be consistent and that data collected through new relationships; such as pressure from many areas to is collected once and shared by all those formed in CHART. deliver profitable business - lack of operating efficiency is one of those threats. About the Author: The TOM initiative is looking to Mark Stroop, Sales Executive standardized models that will at NetRate has helped MGA’s, eliminate duplication and reduce Carriers and Agencies with turnaround time while improving technology solutions that communication between streamline the process of Coverholders, Brokers and Carriers. generating new and renewal Faster delivery of clean data helps by Mark Stroop

business for 20+ years.

See Positive Changes Pg 20 10

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News

Lloyd’s Coverholders Rating & Policy Issuance Solutions

Submissions Rating Policy Issuance Underwriting Quoting Reporting

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For More Information, Contact NetRate Systems at 517.347.4900 www.chart-exchange.com

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SEPTEMBER-OCTOBER 2016

GETTING CHART ExchangeFRUSTRATED TRYING TO LAUNCH A NEW INSURANCE IDEA?

OR COME TO THE CHART EXCHANGE AND MAKE IT HAPPEN Partner with Lloyd’s of London — the oldest, most recognized insurance brand in the world today. The CHART Exchange can show you how!

Join Us for The Second Annual CHART Meeting in Baltimore, MD Make plans to attend the Second Annual Coverholders and Risk Takers (CHART) Exchange meeting on October 3-5, 2016 in Baltimore MD. Our entire event is dedicated to growing the U.S./London marketplace through the identification and pursuit of new business opportunities. • Personally interact with Risk Taker (Syndicate) and existing Coverholder representatives with decision-making authorities • Obtain market finder assistance for new program or product ideas. We even make your Risk Taker appointments for you! • Fast track the launch of a new business plan through our exclusive incubator program • Meet Vendor Partners who help you to create a competitive advantage • Enter CHART’s version of the Shark Tank competition to win $10,000 in funding for your idea! Visit our website — www.chart-exchange.com for a full list of benefits and instructions on how to register for this exclusive event. Have questions? Send your inquiries to info@chart-exchange for immediate response.

www.chart-exchange.com The CHART Exchange 3001 Philadelphia Pike Claymont, DE 19703 Phone (855) 716-3660 Fax: (302) 334-0325

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News

LLOYD’S PLANS IN EUROPE

loyd’s remains committed to its European Markets following the ‘Brexit’ vote and is now working on plans to protect its access to the single market and the passporting rights it currently operates under.

For a details explanation of passporting rights, please see Lloyd's note on passporting hereWe are working with government, business partners and regulators in the UK and the EU to ensure the Lloyd's market policy holders and investors continue to benefit from On 24th June 2016, it was confirmed Lloyds unrivalled global expertise that the United Kingdom had underwriting human progress. voted to end its membership of the European Union following a What is the immediate impact of referendum on the subject. Brexit on Lloyd’s?

Image Credit: Creative Commons

The process of leaving the EU begins only after the UK Government invokes Article 50 formally notifying the European Union of its intention to withdraw from the European Union.

Lloyd’s wants to maintain its access to the single market under the same passporting regime that we currently operate in. We will continue to analyse the 30 countries in the EEA and the full range of options available to us. How much of Lloyd's business comes from the European market? In 2015, the EEA accounted for £2.93bn or 11% of Lloyd’s Gross Written Premium.

It will then take up to two years for the UK’s membership to officially end. During that period it continues to be a full member of and enjoy The UK continues to be a full access to the single market under member of the EU with access to current passporting rights. the single market and operating under the current passporting All existing contracts and policies, regime. including multi-year policies, are valid and any new contracts and For Lloyd’s it is business as usual, policies signed during this period compliant with all current rules will also be legally binding. and regulations, until such time as UK membership of the EU officially Lloyd’s is concentrating on its plans ends. Until that time, Lloyd’s is post-EU membership, which are implementing its programme focused on maintaining access to protect the access it currently to the single market with the enjoys, to ensure European market passporting rights we currently policyholders have continued operate under. We believe this is in access to Lloyd’s specialist the best interests of Lloyd’s and the insurance and reinsurance in the wider UK financial services industry. long term. www.chart-exchange.com

What is Lloyd’s plan for when the UK leaves the EU?

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How will this affect existing policies and renewals? Policies are still legally binding and claims will be met. Existing policies or renewals written whilst the UK is a member of the EU will not be affected by the referendum. New policies, including multi-year policies, agreed whilst the UK is a member of the EU are not impacted by the referendum. How are Lloyd’s global trading rights impacted? Lloyd’s trading rights in territories outside of the EU are not impacted by the referendum outcome. SEPTEMBER-OCTOBER 2016

Chart Objective #6

CHART OBJECTIVE:

Skills Building Workshops

lmost every successful agenda is a series of skills-building with the Lloyd’s marketplace. agency has a well thought- workshops and Vendor/Syndicate Agency Services will tackle relevant out business plan. This panel discussions. These breakout topics related to such matters as strategy includes details Actuarial, Marketing, Claims on preferred markets, Legal/ (Skills Building) is everything. Administration, product distribution Compliance, Systems, and The peach was once a bitter methodologies, Mergers/Acquisitions. The almond; cauliflower is nothing but and administrative Agency Models segment cabbage with a college education.” takes a closer look at the processes/workflows. While having structure success of such networks - Mark Twain (with some apologies) in place is important, as SIAA, BIGN, and the Hilb it is just as critical to Group. remember that we operate in a sessions are important to the CHART dynamic, ever-changing business event as they facilitate new ideas, All sessions will be moderated by environment. Entrepreneurial- encourage frank evaluation of the recognized experts in the various minded agency principals look to status quo, and surface potential disciplines. maintain their competitive edge business opportunities. by keeping up-to-date with the Central to CHART is the principle of newest innovations, products, and The slate of break-out sessions ‘Exchange;’ to give up something of regulatory/compliance changes scheduled for Tuesday (10/04) value in order to gain something of impacting our industry. and Wednesday (10/05) can be greater value.’ By giving up your time categorized into three distinct and attention, you are lifting up the The Second Annual CHART Event groupings: the London track, presenters while gaining a new skill, will be held October 3-5, 2016 at the Agency Services, and Agency contact, or knowledge for yourself. Marriott Baltimore Waterfront Hotel. Models. The “London” grouping is Please come with a fully engaged A key element of the meeting’s designed to assist those unfamiliar attitude. After a day of learning and forming new contacts, the day will conclude with a networking cocktail reception and“Agency Success Stories”session. Within this relaxed environment, attendees will be encouraged to share their ideas, successes, or “life learning experiences” with the other members of the group. There will be awards granted for each Agency willing to share with the group, 14

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THE EARLY ADOPTERS

BILL OF RIGHTS PREAMBLE The CHART Exchange begun and held at the City of Philadelphia, between Monday the twelfth and Wednesday the fourteenth of October, two thousand and fifteen. RESOLVED by the Coverholders, Prospective Coverholders, Risk Takers, and Vendors assembled, that the following Articles be proposed as amendments to the Declaration of Interdependence. ARTICLES in addition to, and Amendment of the Declaration of Interdependence, proposed by the Early Adopters and ratified by the Coverholders, Prospective Coverholders, Risk Takers, and Vendors attending the CHART Exchange event. FIRST AMENDMENT (Freedom of commerce and peaceable assembly). The CHART Exchange will foster growth in the U.S./London market by providing a forum through which Risk Takers and Coverholders can interact with domestic insurance agencies in the pursuit of new business opportunities. The event shall also provide a series of workshops moderated by CHART’s Risk Taker and Vendor partners. All attendees are expected to peaceably assemble at these sessions to expand their skillset and show support for the presenters. Participants shall be respectful of the efforts put forth by the moderators by not setting appointments during the times allotted for workshops. Ample time has been provided before and after scheduled events for holding individual meetings. CHART attendees are expected to follow the precepts of the “Golden Rule”: do unto others as you would have them do unto you. Individuals must be supportive and respectful of other participant’s efforts before presuming the same treatment from them. SECOND AMENDMENT (Right of attendees to bear business cards). Participants will be protected against spam and other forms of solicitation through the judicious and limited distribution of attendee lists. Business can best be conducted across long distances by first establishing the partnership through personal interaction. Participants shall network with others in attendance as a means of identifying new opportunities. THIRD AMENDMENT (Protection from enduring non-business activities). The CHART Exchange shall not schedule golf outings, formal dinners, or other social events, as these serve to distract attendees from the core purpose of getting business done. All participants are given the freedom to make their own plans after meeting hours. FOURTH AMENDMENT (Protection from unreasonable constraints on attendee time). The CHART Exchange shall be respectful of all attendees by making optimal use of the time they have allotted to participate in the event. Meetings shall start promptly at 8:00 AM. The agenda shall provide content designed to facilitate growth within the U.S./London market.

FIFTH AMENDMENT (Due process and freedom from self-aggrandizing participants). The CHART Exchange shall recognize that all attendees are experts within their particular field of endeavor: risk evaluators/underwriters, product distributors, service providers, etc. As such, the meeting will be deemed as an assembly of peers. All participants are expected to check their egos at the door as part of the event registration process. Business casual shall be the dress of the day. SIXTH AMENDMENT (Judgment of new ideas by a trial of peers). All attendees shall have the right to submit their new business/marketing ideas for consideration within the Shark Tank/Dragon’s Den competition. Submissions shall be evaluated based on the innovative nature of the idea, viability of the product, and premium potential. Style points will also be awarded for the originality of the presentation itself. The winner shall be determined jointly by a panel of experts and the other attendees. The grand prize: $10,000 (£6,400). The Shark Tank/Dragon’s Den competition is sponsored by Iris Insurance Brokers. SEVENTH AMENDMENT (Civil treatment for all attendees). All participants shall have the right to expect civil treatment from all other event attendees. Moderators shall be shown respect by not having to compete with individually scheduled appointments during the times allotted for workshops. All attendees shall be granted the freedom of not having to be recipients of spam or other solicitations due to limited distribution of participant lists. Each Early Adopter is considered a full partner. EIGHTH AMENDMENT (Freedom from cruel and unusual keynote speakers). The CHART Exchange shall not retain the services of celebrity speakers to deliver speeches unrelated to the growth of the U.S./London market. Tuesday’s keynote address shall be presented by Jeff Tobe, a nationally sought after for his expertise in improving corporate profits by changing the customer experience and retaining great talent. Wednesday’s opening remarks shall be provided by Mark Cloutier, CEO of BRIT Insurance Holdings. Mr. Cloutier has extensive experience within the various aspects of the insurance transaction: as a risk-taker, product distributor, and as a vendor supporting the industry.

NINTH AMENDMENT (Enumeration of rights shall not be construed as anything critical of the great forces that build our profession). CHART recognizes the valuable role other association groups (AAMGA, NAPSLO, PLUS, TMPAA, IIABA, Trusted Choice, etc.) play within the U.S./London market. CHART shall honor the contributions these fine organizations already make and facilitate dialogue amongst risk takers, established Coverholders, U.S.based insurance agencies, and vendor partners as a means of surfacing new business opportunities. Further, the CHART Exchange shall elevate the role London Brokers play in mage credit: Lloyd’s of London the insurance transaction. Once an agreement on a new concept discussed at the meeting has been reached, risk takers and/or insurance agencies shall be encouraged to select the broker of their choice in order to transform it into a formal agreement. TENTH AMENDMENT (Powers of Risk Takers, Coverholders, Potential Coverholders, and Vendor Partners). Except for the Amendments articulated in the CHART Exchange Bill of Rights, attendees are free to pursue new business opportunities amongst themselves. Carpe Diem – Seize the Day!

Spotlight

MARKETING TO MILLENNIALS Two Entrepreneurs Score A Success With Renter’s Insurance

By Tyler Cichewicz

eaching millennial consumers has become an objective for virtually every business. In the insurance world, agencies and carriers have created social media campaigns and recurring commercial characters, like Progressive’s Flo, in an attempt to tap this imminent market with varying degrees of success. Two Wharton School of Business graduates, Tom Austin and Zachary Stiefler who are millennials themselves, developed a way to make buying insurance appealing to millennials.

“We wanted it to have modern appeal to millennials - minimalistic and simplicity,” Austin said. “On other agent and carrier websites there is a ton of information. But when [most] people are thinking about insurance they aren’t in the same mind set as insurance professionals.”

Surprisingly, in their initial research, Austin and Stiefler found that millennials do not prefer everything online. Austin says he sees Millennials do, however, want their shopping disconnect between the products millennials need and the experience to begin with research online and way in which they are provided. ultimately end online.

Bungalowinsurance.com seeks to bridge this disconnect by making policies that are popular for millennials and easily available.”

When Austin and Stiefler encountered first-hand the Austin adds that he believes a inefficiency of purchasing renter’s millennials are attracted by websites insurance on their lease, the that look and work smoothly. experience sparked an idea. Earlier this year, Progressive held “We got called by a bunch of a survey that found 68 percent different agents and thought ‘we of renters do not have renter’s can do better than this,” Austin said. insurance. Of those that do not That realization led Austin and have renter’s insurance, 72 percent Stiefler to develop a simple, user- are millennials. friendly, way to attain renters insurance. The result of their Since renter’s insurance is relatively efforts is seen in their website inexpensive for the consumer, and Bungalowinsurance.com, which with more millennials opting to features an efficient way to attain rent rather than buy, it is a gap in renter’s insurance. the market.

Austin says he sees disconnect between the products millennials need and the way in which they are provided. Bungalowinsurance.com seeks to bridge this disconnect by making policies that are popular for millennials and easily available.

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“They certainly want to get a quote online and pay online and we want to have the resources for them to do that,” Austin said.

Austin and Stiefler see making renter’s insurance available online to millennials their entry point as they continue to feature products that are useful to this demographic. “The value we see in the long the run,” Austin said, “Is so many people coming into the market who have never purchased insurance before. This could be their first experience with insurance. Let’s give them a good insurance experience and they will come back when they need other insurance in the future.”

www.chart-exchange.com

Analysis

York Risk Services Group, Inc. is honored to be a Preferred Vendor Partner of the CHART Exchange. We are a premier provider of TPA Services, Specialized Loss Adjusting, Customized Claim Solutions, & Risk Control Services for Lloydâ&#x20AC;&#x2122;s of London & the London company market. We offer:

Dedicated Binding Authority Adjusting Team Dedicated E&S/Specialty Lines Open Market Adjusters Back office team for banking, bordereau production, MI reporting Customized Physical Risk Assessments (Risk Control) Virtual Risk Evaluation Services To learn more, contact Aubrey Fountain, at 850.650.2380 or Aubrey.Fountain@yorkrsg.com.

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News-Analysis Continued From Pg 20

players involved in each transaction. Many have already taken matters into their own hands by improving systems to gain a competitive advantage. Now having Lloyd’s leading and promoting solutions that champion, streamlined decision makers proactively manage data entry, it should add steam and their binders. help Coverholder business become more efficient by throughout the Lloyd’s has piloted a project in policy lifecycle. Australia where risks were quoted, bound and transferred straight into NetRate understands MGAs, the London bureau using a form Program Administrators, of standard messaging. This basic Coverholders and Carriers want concept is at the heart of the current the efficiency gained in the single trend in the modernization efforts entry of data. The need to activly of bordereau creation, submission measure performance against and processing without the need key business metrics is critical. for rekeying and the manual NetRate’s cloud-based solution manipulation of data. Post-bind includes a comprehensive data information that used to take a warehouse where all input data month or two to reach brokers and and calculated data resides in a underwriters in London can now secure environment on a single arrive near real-time. platform for all your programs.

POSITIVE CHANGES

Additionally, Coverholder compliance will be more streamlined due to removing the inefficiencies in the compliance process by ensuring Coverholders are only asked for their data once and validation processes will ensure the data is correct. The Coverholder audit processes will be become more centralized and automated as standardized Coverholder data becomes more prevalent.

You enter a lot of information while processing new and renewal insurance business, NetRate gives you the capability to use it. This is very effective for the forward thinking business owner who wants to control, manage and analyze key business metrics on demand- whether it is to improve business operations; such as, hit ratios and productivity analysis or rate monitoring information that can be vital for rate adjustments on current business, as well as, an effective method for looking for new program opportunities.

According to some, Delegated Authority business has been unintentionally left behind in terms of the systems and controls in place today. This can be attributed in part About NetRate: to the unique nature of the Binding Authority market and the many 20

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NetRate Systems, Inc. solutions include cloud-based portal, high performance submission, underwriting, rating, easy quote and policy document generation, data analytics and integration with 3rd parties for the Property and Casualty insurance marketplace, primarily in the MGA, Program Administrator, Coverholder and small/medium carrier environment. NetRate products include nationwide rating of ISO® General Liability, Property, Business Auto, Crime, Inland Marine, BOP, as well as NCCI Workers Comp. NetRate also offers custom programming of all lines of business, including Professional Liability. For more information, go to www.netrate.com.

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EXCHANGE

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CHART Exchange THEY WROTE A SONG ABOUT THE LAST TIME THE BRITISH VISITED BALTIMORE

Our national anthem tells the story about the last time the British visited the Inner Harbor of Baltimore. Now you can take part in the ﬁreworks by attending the Second Annual Coverholders and Risk Takers (CHART) Exchange meeting on October 3-5, 2016. The event will be held at the Baltimore Marriott Waterfront Hotel. The CHART Exchange has been established to serve as a catalyst for new business growth within the U.S./London marketplace. Insurance agents from across the country will be able to personally interact with representatives from various Lloyd’s syndicates as well as vendors who support this unique niche. The three-day event will also feature panel discussions, informative workshops, and new product presentations.

Become a member of the CHART Exchange! Are you a current Coverholder? Interested in accessing London markets? Join the CHART Exchange! We can provide market ﬁnder assistance, mentoring support for new agencies, and exclusive access to new products and services. Visit our website for more information.

www.chart-exchange.com The CHART Exchange 3001 Philadelphia Pike Claymont, DE 19703 Phone (855) 716-3660 Fax: (302) 334-0325

Testimonial

CHART TESTIMONIAL: STEVEN AHERN SHARES HIS CHART STORY

“Anything Worth Having Is Worth Fighting For.”

e were excited when we got the call from Glenn Clark inviting us to be a part of the early adopter group to consider the CHART concept and to work together to pull it off. That was January 2015.

slowly dissolved as underwriters reviewed their calendars, their budgeted T&E and their potential channel conflict.

Somejumpedin,someprocrastinated and some refused. We kept going and were able to persuade a group There were four key elements from of decision makers to participate in the start – coverholders, potential the first CHART event in Philadelphia coverholders, risk takers and vendors. in October 2015. These were teams of underwriters who came to make underwriting decisions on property, casualty and specialty classes. We had been working with potential coverholders We know that the establishment introduced through CHART to help of a new coverholder takes time, build their business plan ready to but we have had practice including meet underwriters at the event. setting up Rockwood Programs and We had a hectic two day event Glenn Clark in 2003. Our small team after the joint efforts in a 10 month set about liaising with the CHART preparation and build up. team to follow up on those leads that they had created to discover We have had a further 10 months of what opportunity may exist for new effort to convert those most suited business to be offered to London – to become a Lloyd’s coverholder and opportunity that benefitted the MGU have nearly half of them are already and the Syndicates. We were mindful in business with Lloyd’s. We expect of avoiding what became known as the rest to be up and running before “the four Ds” –dilution, diversion, the end of 2016. disintermediation and direct dealing. It is safe to say that most of these Glenn came to London twice in potential coverholders thought the early 2015 and worked with there was some mystique in dealing his London brokers to develop the with Lloyd’s and that they did benefits of CHART with Syndicates. not possess the secret sauce. We He got a great reception but that have demonstrated that this is not We took on the challenge of being the boots on the ground in London and knew that this would be a mission of tenacity.

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Steven Ahern, Iris Insurance Brokers, Ltd.

the case. It is also fair to say that underwriters were sceptical about the new business opportunities and we have shown otherwise. The magic was the face to face discussion between the potential business partners. In several cases the expected business opportunity was not the final opportunity. Setting up CHART was a big investment for all concerned and it has paid dividends with more to come. Our team support CHART and are delighted to have been included in setting it up. Anything worth having is worth fighting for. Steven Ahern Iris Insurance Brokers Ltd. 25th August 2016 www.chart-exchange.com

THE BRITISH ARE COMING! THE BRITISH ARE COMING!

â&#x20AC;Ś AND CHART INVITED THEM You can also accept our invitation to attend the Second Annual Coverholders and Risk Takers (CHART) Exchange meeting in Baltimore MD on October 3-5, 2016. The event will be held at the Baltimore Marriott Waterfront Hotel. The CHART Exchange has been established to serve as a catalyst for new business growth within the U.S./London marketplace. Insurance agents from across the country will be able to personally interact with representatives from various Lloydâ&#x20AC;&#x2122;s syndicates as well as vendors who support this unique niche. The three-day event will also feature panel discussions, informative workshops, and new product presentations.

Become a member of the CHART Exchange! Are you a current Coverholder? Interested in accessing London markets? Join the CHART Exchange! We can provide market finder assistance, mentoring support for new agencies, and exclusive access to new products and services. Visit our website for more information.

www.chart-exchange.com The CHART Exchange 3001 Philadelphia Pike Claymont, DE 19703 Phone (855) 716-3660 Fax: (302) 334-0325

CHART Exchange

LLOYD’S STORIED HISTORY ILLUSTRATES CURRENT BUSINESS OPPORTUNITIES By Glenn W. Clark, CPCU

Consider some of the following examples:

ith a history going back nearly 328 years, Lloyd’s of London is widely recognized as one of the oldest insurance brands in the world. Unfortunately, a number of U.S.-domiciled agents operate under the misconception that Lloyd’s is only a market for unique, specialty risks (more about that later). In reality, the insurer has been a major force in this country for well over a century. Almost 40% of Lloyd’s global annual premium comes from the U.S., with business consisting of primarily of surplus lines insurance and reinsurance. In 2015, that was $15 billion!

On April 18, 1906, an earthquake registering 8.25 on the Richter scale devastated San Francisco, CA. The phenomenon triggered uncontrollable fires lasting three days. Over 3,000 people perished; nearly half of the city’s population was homeless. Direct quake losses totaled $24 million and fires constituted $500 million, akin to over $10 billion in today’s dollars. British insurers paid out more than one-fifth of these total claims. One of the leading Lloyd’s underwriters famously instructed his San Francisco agent to “pay all of our policyholders in full, irrespective of the terms of their policies”.

A breakdown of the types of business underwritten by In August 2005, Hurricane Katrina devastated the Gulf Lloyd’s of London in the United States is provided in Coast. It was one of our costliest national disasters, the exhibit below: as well as one of the five deadliest hurricanes, in the history of the United States. Lloyd’s responded quickly to the catastrophe, sending thousands of loss adjusters to the region, paying billions of dollars in claims, and donating millions of dollars in relief funds. Lloyd’s reputation as an innovative and forwardthinking insurer has resulted in its covering many unusual risks including:

Source: Lloyd’s of London Website

Over the past 100 plus years, our country has seen its share of catastrophes. Lloyd’s response to these disasters has both solidified its reputation in the insurance industry and helped shape the risk modeling and assessment practices in use today. 24

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1. Celebrity Body Parts. Most of us have heard the story about the 1940’s pin-up/movie star Betty Grable having her legs insured. Lloyd’s has also provided coverage for Jimmy Durante’s nose, Bette Davis’ waistline, and Bob Dylan’s vocal cords. More recently, the star of the Ugly Betty TV show (America Ferrera) had her teeth insured for $10 million. 2. Lottery Winners’ Insurance. Ask most people what they’d do if they won big in a lottery and they’d respond with “quit my job”. Fortunately, employers

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www.chart-exchange.com

CHART Exchange have the option to purchase insurance from Lloyd’s Agencies can benefit from CHART membership in to mitigate the loss of key personnel due to such a a number of ways. Our Market Finder Facility assists producers with new program/ fortuitous event. product ideas by matching them with the London Syndicates 3. Politically Incorrect HO-2 possessing the most compatible Policy Form. A Householder’s risk appetites and underwriting Comprehensive policy form written philosophies. The Incubator in 1914 covered damages from initiative mentors agencies such named perils as aeroplanes, unfamiliar with Lloyd’s of London, airships, riots, strikes…and allowing them to expedite the suffragists. launch of a new product concept. CHART’s Vendor Partners are all 4. Alien Abduction Insurance. experts in their fields; they stand Concerned about the possibility ready to offer member agencies of having an uncomfortably “close help in such diverse areas as encounter”with an extra-terrestrial? Actuarial, Marketing, Claims Lloyd’s is willing to underwrite the Administration, Legal/Compliance, exposure. Systems, and M&A guidance. 5. Werewolf/Vampire Attack Glenn W. Clark Non-member agencies are welcome Earliest Adopter Insurance. The success of the to participate in our October event Twilight series had one unfortunate consequence: people began to get concerned about as well. Those seeking to learn about CHART firstturning into creatures of the night. Fortunately, there hand are invited to audit the meeting. Attendees registering under this category can participate in the is an insurance policy for that. General Sessions, workshops, Syndicate Panels, and The CHART (Cover Holders And Risk Takers) Exchange the numerous networking functions we host. Noncan help “demystify” working with Lloyd’s. It was members also established for the express purpose of expanding the have the option to utilize our Market Finder Facility. U.S./London marketplace through the identification If your schedule won’t allow you to spend three full and pursuit of new business opportunities. days in Baltimore, ask about our unique Day Pass Our second annual meeting will take place on October option. Write to us at info@chart-exchange.com to 3-5, 2016 at the Marriott Baltimore Waterfront Hotel learn more. in Baltimore, MD. The agenda includes a series of workshops designed to initiate constructive dialogue and information-sharing on an array of insurancerelated issues. Representatives from a diverse array of London markets will be joined by both current and prospective Coverholders (agents with underwriting authority) from across the country. A select group of Vendor partners catering to the insurance industry will also be in attendance. www.chart-exchange.com

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SEPTEMBER-OCTOBER 2016

Spotlight

VIRTUAL AGENT SUMMIT SCHEDULED FOR 10/24 - 11/2/2016

s Insurance Agents, staying in tune with industry • innovations and learning new techniques is the foundation for success. However, carving out • time for continuing education classes isn’t always easy. What if there were more accessible classes to help you • with skills like:

How to systemize your marketing process and use data to guarantee ROI Increasing retention for a huge jump in profits by creating loyal clients What models don’t work anymore and what to start doing to cut down on customer waiting time, improve profitability, and create a better experience for customers. • Closing More Sales • Establishing a culture that drives employee • Generating More Quality Leads satisfaction, productivity, and profits • Becoming The Authority in Your Network • The return on providing a customer experience, • Thinking Strategically About Growth not just customer service • How one CSR more than doubled her annual And what if you could learn it all for FREE? income. More than 3,500 agents took part in last year’s • Online training sessions will be available from October 24-28 with new content released every Insurance Agency Summit. This year, we’ve put day. Sessions are accessible for 12 hours once together Master Classes that feature the world’s most they’re released. influential insurance agents and industry leaders. They’ll be sharing actionable tips on how to conquer For those who want to refer back to the strategies the most difficult issues facing agents today, along with how you can use technology, tools, systems and strategies to make MORE MONEY for yourself and your agency.

INSURANCE

Master Class topics include real stories and tangible action items like: • • • • • •

What 3 changes an agent implemented to produce $3.3 million in just 12 months Marketing and sales strategies proven to double business in less than 6 months How to automate workflow and sales What one agency did to bring in $10 million in revenue Getting hiring and on-boarding new employees right the first time How to be more efficient, have more fun, and increase your income while building a top 1% agency SEPTEMBER-OCTOBER 2016

AGENT S U M M I T

shared, an All-Access Pass is available for purchase, allowing you unlimited access to all Master Classes and bonus materials — forever. This is a fantastic opportunity to learn directly from the Best Business Coaches and Best Agents in the world in the comfort of your home or office, saving you time, money and the hassle of traveling. Don’t’ wait another second to create the business and lifestyle you’ve always dreamed of. Register Now– www.insuranceagentsummit.com

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Analysis

2017 PROSPECTS FOR MGU / MGA PROGRAM BUSINESS

By Paul E. Surdel

here has been a significant increase in MGU/ MGA Program business in the past ten years. Numbers vary on the number of carriers that are now willing to partner with a MGU or MGA because some partnerships are formed with many restrictions. Some carriers will only allow a program administrator to underwrite one line of coverage or they are very restrictive on the classes of business that they are willing to outsource to a third party entity. In general, there are approximately 60 carriers that will outsource underwriting authority and this number will increase even further with the advent of CHART Exchange based in London. There have been close to 35 new carriers that have entered the MGU/ MGA Program space in the past seven years alone. CHART, which is the acronym for Cover Holders and Risk Takers, was established in 2015 to target more business opportunities with U.S agencies and program administrators. Programs placed with CHART will need to be non-admitted which essentially limits the focus to E&S opportunities. Historically, Lloyds has demonstrated a willingness to entertain smaller programs or start-ups that show the potential for premium growth in two to three years. Consequently, a market for programs with less than $5M in premium should arise.

Insurance carriers have been more careful in choosing their underwriting partners and more checks and balances have been implemented to assure that both partiesâ&#x20AC;&#x2122; interests are aligned. Consequently, underwriting results for programs have held steady and matched up favorably with overall industry results for the various lines of coverage. This begs the question: What are the future prospects for MGU/ MGA Program business in 2017? The appetite for MGU /MGA programs will continue to strengthen. Many carriers have recognized that organic growth will continue to be challenged as rates continue to soften. Mergers and acquisitions will continue to be one source of potential growth but other avenues will need to be explored. Companies will need to strengthen their balance sheets and expenses will need to be reduced if top line revenue growth cannot be achieved. Budget cuts could result in layoffs of personnel in the key areas of underwriting, actuarial or claims. Consequently, the feasibility of partnering with professional managing general agents or underwriters

See Prospects For MGU/MGA Page 30

r. Paul Surdel serves as Director of Program Insurance for Merger & Acquisition Services, specializing in the placement of insurance program business and creating underwriting partnerships between carriers and Managing General Agents (MGAs). He has 32 years of insurance and reinsurance experience, working with carriers and MGAs. Mr. Surdel began his career as a National Accounts underwriter with Travelers Insurance Companies and launched his reinsurance career two years later when he joined RFC Intermediaries. He remained with RFC for five years working with National Accounts underwriters assisting them with their facultative reinsurance placements.

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Analysis Contin ued From Page 28

PROSPECTS FOR MGU/MGA will be explored further by carriers that currently don’t play in the program space. The key will be for insurance carriers to select the most professional, ethical and efficient program managers that have quality systems and the underwriting expertise that is required to service a program. The problem that has arisen in the past couple of years is that there is not enough quality supply to meet the demand. Most program carriers have been seeking profitable rollover books that generate $10,000,000 or more in premium volume. This sounds great in theory and some of these opportunities do arise on occasion. However, it also stands to reason that an existing carrier on a program will work very hard to ensure that they don’t lose it to the competition. Programs rarely move to another carrier if they have been profitable and carriers have become suspect of a program that is being marketed on the pretense that the existing program administrator just felt that they needed a change.

SEPTEMBER-OCTOBER 2016

Carriers will continue to look for a “good story” or “hook” What do we mean when we say this? The best answer to this question is to provide some illustrations. I once asked a program manager what issue kept him up the most at night. His answer was very simple. He stated that ‘I don’t worry about anything that I can control. It is the carrier that is unpredictable. What if their rating gets downgraded? What if they have a change in management and the new president does not want to underwrite my specific class of business any longer? I now have 180 days to find a new carrier after I receive my notice of cancellation”.

story” but will that be enough to satisfy demand? The answer is that it is highly unlikely. This means that other alternatives may need to be explored. The market is already more receptive to start-ups than ever before. Start-up programs will continue to be difficult because the insurance carrier will have no historical data to analyze. However, a start-up program will be considered if the MGU/MGA has done an excellent job of outlining the opportunity in conjunction with including industry data that supports their case.

There will also be an increase in start-up ventures that partner with existing managing general Hence, a “good story” is a program underwriters to either gain access manager that is seeking a second to their carrier or to utilize their carrier to split his book of business. systems. The start-up venture It is a classic example of not having will have to relinquish some of all their eggs in one basket. their equity position in return for gaining quicker access to the Another example could be a market. program manager that is being limited to the number of states that In summary, continue to look for they can underwrite. increased activity in the MGU/ MGA program space as the market A third example is when a carrier softens. The marketplace appears has contracts in place with other to have overcome the negative program managers that actually stigma that once was associated compete for the same business. with partnering with a program Program managers usually don’t manager. Carriers have learned offer exclusive arrangements that partnering with a quality and there are instances where a program administrator can be program manager finds that they very profitable as long as all the are competing against their own checks and balances are in place. carrier partner. Competition in the program space will continue to grow which Program insurance carriers will will lead to more ingenuity and continue to search for the “good creative opportunities. TABLE OF CONTENTS

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News

BIG DATA AND VISUALIZATION EVENT AT LLOYD’S CITES DATA DRIVEN VALUE

raig Civil, Head of Data Innovation at Lloyd’s, was responsible for both organizing and hosting the event. Craig has only been with Lloyd’s since June and is already planning a series of events based on bringing the learnings of other industries to bear at Lloyd’s and its market participants. Craig commented after the event “There was genuine and palpable interest from the audience. We heard a lot of things today that we can definitely build on”. The panel of leading experts comprised Peter Worster of Conduit, Fran Bennett of Mastodon C and Andy Kirk of Visualizing Data. The topics discussed ranged from identifying what is worth measuring, how to measure it and how to extract value through the visualization of the data. A combination of presentations and a final Q&A panel www.chart-exchange.com

session raised a number of this data may provide more value interesting points for our market bearing context for each market to consider. participant The four key points being:

2. Potential: There is a vast amount of unstructured data 1. Unique: Lloyd’s is in a lying untapped that could be unique position in having access structured into an analytics ready to highly granular information state from the market participants and 3. Real-time: The recent rise how analyzing and benchmarking and expansive use of inexpensive the anonymized aggregation of sensor technologies provides the potential for real-time data analysis to manage risk in a far more dynamic way than it is currently 4. C o m m u n i c a t i o n : A combination of storytelling skills and subject matter knowledge coupled with Proud supporters of CHART the right visualizations can lead to some powerful actionable insights.

Serving coverholders’ needs since the 1930s … and into the future Bespoke solutions Packaged lines Enhanced commissions Web-based platforms US domiciled marketing office Access us through 170 Lloyd’s brokers

www.atrium-uw.com

AtriumUw Atrium Underwriters Ltd

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The next ‘Outside In’ event will be on 15th November bringing in an outside perspective on how Artificial Intelligence is changing the way we analyze and benefit from data using vast arrays of information sources and self-learning algorithms. SEPTEMBER-OCTOBER 2016

LLOYDâ&#x20AC;&#x2122;S OF LONDON

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SEPTEMBER-OCTOBER 2016 35 Image Credit: Creative Commons