The CHART Exchange April 2018

TABLE OF CONTENTS

6 Glenn W. Clark, CPCU, Publisher CHART Exchange Earliest Adopter

6

Intimidated By The Intricacies of Lloyd’s?

CHART is here to help!

9

Insurance Labor Market: The Good And The Bad

14

5 Fundamentals For Your Cyber Network Security in 2018: A Checklist

18

Niche Product Development Encouraged At Lloyd’s

21

Street Artists Awarded $6.75 Million in Damages Against Developer Who Whitewashed Artworks

22

Why MGAs Need A Digital Engagement Strategy

27

The “Hidden” Costs of a Workplace Accident: A Good Reason To Get Serious About Safety

32

Insurtech and Auto Insurance: More Than a Partnership

35

Lloyd’s Names Dawnmarie Black U.S. Northeast Regional Director

37

Successfully Leverage Technology with a Business Operating System and RPA

11

Wrongful Death Claim Dismissed Based on Forum Non Conveniens

39

13

A Quick Video History of Lloyd’s: The Last 325 Years in a Beautiful Animation

4 Best Practices to Make Insurance Appealing as a Career

47

Lloyd’s Provides ACORD Membership for All Coverholders

Cover Image: [CREATIVE COMMONS)

SPECIAL REPORT:

APRIL 2018

VOLUME 3 - ISSUE 3 Publisher: CHART Exchange Glenn W. Clark, CPCU

Photo Credit: U.S. Army graphic

Membership Services Kate Boyle Advertising: Kate Boyle Managing Editor: Kate Boyle Contributing Editor: Frank Huver

THE ‘HIDDEN’ COSTS OF A WORKPLACE ACCIDENT: A GOOD REASON TO GET SERIOUS ABOUT SAFETY!

PREFER TO READ IN PDF FORMAT? DOWNLOAD THE PDF VERSION HERE

ADVERTISING IN THE CHART EXCHANGE MAKES SENSE: 302.765.6056

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

CHART Exchange

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

Don’t let your clients pay the price for

WORKPLACE BULLYING!

The notion of Workplace Bullying is getting increased attention from national media outlets. The term refers to patterns of behaviors that harm, intimidate, offends, degrades, or humiliates an employee — usually in front of their colleagues, clients, or customers. Studies relating to this phenomenon reveal some disturbing trends; workplace bullying has been found to be 4 times more prevalent than illegal harassment.

Many employers may not even be aware that this type of disturbing behavior occurs within the workplace.

Unfortunately, the companies could ultimately suffer the consequences if the victim decides to take legal action.

The cost of defending against such a lawsuit — even a groundless one — could be financially devastating.

This is especially true for smaller firms.

Let Rockwood Programs help protect your clients. Our Employment Practices Liability Insurance (EPLI) product protects companies from allegations of discrimination, wrongful termination, harassment, and workplace bullying brought by their employees.

Visit us at www.rockwoodinsurance.com to learn more

Rockwood Programs, Inc., 3001 Philadelphia Pike, Claymont, DE 19703 p: 877-242-2487 • f: 302-762-4200 • e: sales@rockwoodinsurance.com

NEVER MISS AN ISSUE OF CHART EXCHANGE

SUBSCRIBE NOW

SUBSCRIBE TO CONTINUE TO RECEIVE THE CHART EXCHANGE

Message from the earliest adopter

INTIMIDATED BY THE INTRACIES OF LLOYD’S? CHART IS HERE TO HELP!

G

eorge Bernard Shaw once famously observed that “the United States and Great Britain are two countries separated by a common language”. Want proof? Take this simple quiz (answer at the bottom of the article): A “Toad in the Hole” refers to: A. A London-underwritten insurance program with loss ratios exceeding 100% B. A children’s novel by Lewis Carroll C. A traditional English dish For many U.S.-based agencies, the London market is something of a paradox. Lloyd’s is the oldest, most recognized insurance brand in the world. They have a well-earned

6

APRIL 2018

TABLE OF CONTENTS

Glenn W. Clark, CPCU Publisher & Earliest Adopter

reputation as being both innovative and savvy evaluators of risk. These qualities alone make them a preferred underwriting partner for any new program or product.

Despite these positive attributes, a number of domestic producers are still reluctant to pursue a business relationship with London.

The reason: there is a perception that securing the necessary appointments and underwriting authorities are a difficult and time-consuming task. Unfamiliar terminologies and nomenclature used by Lloyd’s personnel confuse things even further.

www.chart-exchange.com

The CHART Exchange is well-positioned to help. We were established three years ago to expand the U.S./ London marketplace through the identification and pursuit of new business opportunities. Our team “speaks the language” of insurance agents; we also know how to present information to Lloyd’s personnel in an acceptable format.

CONSIDER SOME OF THE TOOLS WE OFFER TO HELP FIRMS BECOME A PRODUCER FOR THE LONDON MARKET: • Program Questionnaires. Sometimes a little structure can help an agent better articulate their ideas about a new program. This form helps agents quantify various aspects, including marketing strategies, administrative considerations, premium projections, and target niche demographics.

• Market Finder Facility. This unique platform matches new program proposals with Syndicates possessing the most compatible risk appetites.

• Incubator Facility. Securing Delegated Underwriting Authorities from London takes time; some agencies with new program ideas want to launch as soon as possible. The Incubator Initiative helps expedite the process.

• CHART Markets. CHART Markets is an on-line shopping mall established for the retail agent community. Much like its “brick-and-mortar” counterpart, this London-centric facility will provide participating Coverholders with virtual

www.chart-exchange.com

storefronts from which their various product and service offerings can be promoted. Marketing campaigns targeting the retail insurance agent community are used to drive traffic to this unique internet platform: • Vendor Network. We have partnered with a select number of companies specializing in insurance-related disciplines. Their expertise includes actuarial, marketing, le gal, claims administration, fronting, and M&A. These firms stand ready to help address any deficiencies that may be found in a new program/product proposal.

Have any questions about placing business with London? Send your inquiries to info@chart-exchange. com!

(The correct answer to our little quiz is “C”. Toad in the hole is a dish consisting of sausages in Yorkshire pudding batter, usually served with onion gravy and vegetables. )

TABLE OF CONTENTS

Glenn W. Clark , CPCU CHART’S Earliest Adopter

APRIL 2018

7

Simplify your workflow!

Give your team a clear path to winning new policies!

For over 18 years the NetRate Systems team has been tailoring insurance processing solutions to meet the unique requirements of each of our MGA, Program Administrator, Carrier, and Lloyd’s clients in the P&C marketplace.

From submission portal through rating to policy issuance, our solutions will help you minimize key strokes, simplify workflow, and reduce systems maintenance.

“Not only do they understand insurance terminology, but they also understand the flow of business.”

Jeremiah O’Donovan President, O’Donovan & Associates

Contact us today to learn how our experienced, U.S. based, insurance-savvy team can help you.

Call 8

Learn More

877-738-2411TABLE OF CONTENTS www.netrate.com www.chart-exchange.com

APRIL 2018

ANALYSIS - NETRATE

INSURANCE LABOR MARKET: THE GOOD AND THE BAD

T

here’s a lot of talk these days about economic vibrancy, but here’s a startling statistic that is both good news and bad news for our industry: Our jobless rate is really, really low. In fact, according to the Bureau of Labor Statistics, the unemployment rate in the insurance industry was 2.2 percent in January, significantly lower than the national 4.1 unemployment rate.

The unemployment rate in the insurance industry was 2.2 percent in January, significantly lower than the national 4.1 unemployment rate.”

Labor Outlook Study by The Jacobson Group and Ward Group takes a detailed look at the labor market.

Here are some of the study’s key takeaways: •

While it’s good that the industry continues to add jobs during a challenging time, the low unemployment rate spells trouble.

It’s going to remain difficult to recruit qualified employees.

The latest Semi-Annual U.S. Insurance •

•

T

echnology, actuarial and analytic positions are the most difficult to fill for the industry overall. It’s interesting to note, however, a difference between various sectors. In the Property & Casualty Commercial business, underwriting jobs are most in demand, followed by technology, claims and analytics positions. emporary employment is growing. Twelve percent of

T

•

companies surveyed in January plan to add more temp workers, up from 11 percent the year before. ompanies plan to add 1.19 percent more jobs this year. The two biggest reasons?

Expanding business (new markets) and an anticipated increase in business volume. hile optimism about revenue growth soared to 94 percent for life/health companies, it dropped three percentage points from the prior year for Property & Casualty companies. It remains fairly high, though, at 77 percent.

C

W

R

ob Zuzula is Director of Marketing at NetRate Systems, a leading insurance solution provider of cloud-based underwriting, rating, and issuance software applications targeted at the Program Administrator, MGA, Carrier, and Lloyds Coverholder and Syndicate markets. Rob and the NetRate Systems team work with these markets to develop cloud-based solutions that deliver more efficient daily work processes, more consistent and controlled underwriting and rating, improved data reporting and analytics, and other custom business enhancing solutions that are rooted in the company’s long history of delivering rating solutions that support ISO®, NCCI, and proprietary rate plans.

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

9

legal NEWS

WRONGFUL DEATH CLAIM DISMISSED BASED ON FORUM NON CONVENIENS MEXICO BACKGROUND Wilson Elser was retained by several multinational corporations that own and operate resorts throughout Latin America and the Caribbean, as well as the resorts concessionaires, court. Two days before the judgment in a double wrongful death suit. The was to be finalized, Wilson Elser case, which was filed in Florida, arose successfully argued that it should when two women be set aside due to from Texas died This court’s improper service while parasailing on of process – the ruling vacation in Mexico. plaintiff had served drastically Survivors of these the Mexican two women were diminished potential entities through an seeking economic, exposure that the unauthorized agent non-economic and defendants’ might and lack of personal punitive damages. jurisdiction.

Attorneys from Wilson Elser’s Miami office and the firm’s national General Liability & Casualty and Latin America practices represented the defendants.

APPROACH

have faced if the case was tried in Florida, as well as the difficulties associated with defending the lawsuit in this forum.”

Wilson Elser was hired after a $71 million judgment had been entered against the defendants in federal

www.chart-exchange.com

After the court set aside the judgment and dismissed the initial case, the plaintiffs refiled a wrongful death lawsuit, against the Floridabased supplier of the resorts’ concessionaires and the Mexican resorts. Wilson Elser filed a motion to dismiss this new case against the

TABLE OF CONTENTS

Florida supplier based on forum non conveniens, arguing that Mexico was a more appropriate forum for this suit as that was where the accident occurred.

RESULTS The trial court agreed that Florida’s interest in the case was minimal, and despite the U.S. plaintiffs’ interest in bringing suit in the United States, the circumstances of it favored adjudication in Mexico. As such, the court dismissed the re-filed suit on the basis of forum non conveniens.

This court’s ruling drastically diminished potential exposure that the defendants’ might have faced if the case was tried in Florida, as well as the difficulties associated with defending the lawsuit in this forum.

The decision also supports other like defense strategies for cases filed in the U.S. that should be venued in the jurisdiction in which the underlying event occurred.

APRIL 2018

11

NEWS Merger & Acquisition Services

serving the insurance industry

Merger & Acquisition Services is a

SPECIALIST ADVISORY AND FINANCIAL SERVICES FIRM firm specifically to participants within the insurance industry.

Our mission is to provide

CONCIERGE-LEVEL SERVICES AND EXPERTISE

PROUD SPONSOR OF

SOLELY FOCUSED ON THE INSURANCE INDUSTRY. This allows our advisors to obtain critical industry knowledge and subsequently, provide clients with sound advice.

M&A Services has closed

MORE THAN 100 TRANSACTIONS IN 10 YEARS and has earned continuous placement within the "Top 5 Financial Advisors in Insurance Underwriting" according to SNL Financial.

Investment banking services and securities transactions are provided through and completed by Merger & Acquisition Capital Services, LLC., a broker-dealer registered with the U.S. Securities and Exchange Commission and member of FINRA and SIPC.

OUR SERVICES Agency M&A Transactions Carrier M&A Transactions Agency Financing Capital Raising Strategic Advisory Valuation Services Program Business Renewal Rights Fronting

info@maservices.com http://maservices.com

(212) 750-0630 320 East 53rd Street New York - NY - 10022 Copyright 2017 Merger & Acquisition Services, Inc. & Merger & Acquisition Capital Services, LLC. All Rights Reserved.

NEW YORK, NY - ATLANTA, GA - MYSTIC, CT - CAYMAN ISLANDS

within the insurance industry by assisting firms with their corporate development and acquisition/divestiture objectives.

M&A Services is

Video Feature of the Month

A QUICK HISTORY: THE 325 YEARS OF LLOYD’S OF LONDON Watch A Beautiful Animation Bringing You From 1688 Through The Present, Highlighting The Incredible Variety Of Risks Insured And The Unique, Innovative Approach In Doing So.

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

13

Analysis - Kroll

5 FUNDAMENTALS FOR YOUR CYBER NETWORK SECURITY IN 2018: A CHECKLIST

By Stacy Scott

right? Too often, companies think this is under control when it’s not. The first step on your cybersecurity roadmap should be to take inventory of your assets and software that is running on your network. Be sure to include BYOD devices.

A ABOUT THE AUTHOR Stacy Scott is a Managing Director in Kroll’s Cyber Security and Investigations practice, based in Dallas. In addition to founding and operating her own consultancy, Stacy has served in high-profile roles with a leading cyber security consulting firm, a Big Four accounting firm, and the largest not-for-profit healthcare system in Texas. She joined Kroll with over 16 years of experience, during which she built a successful track record of developing and implementing strategic information security initiatives that help organizations better safeguard data, manage risk, and enhance business operations.

14

APRIL 2018

s our world grows increasingly digital and interconnected, having a defensible cybersecurity framework should be on your reevaluation checklist. It is estimated, right now, that cyber crime will cost $6 trillion annually by 2021. As a preventative measure, to match this statistic, it’s estimated that cybersecurity spending will exceed $1 trillion from now until 2021. Cybersecurity is becoming a major part of our lives, and the quicker you are to consider the benefits and security, the better off you will be in the years to come.

CYBER NETWORK SECURITY CHECKLIST If you’re ready to strengthen your network endpoint security, here are 5 questions to ask yourself this year: •

Do you have a list of all assets/ software connected to your network? To implement a defensible cybersecurity plan, you need to know what you are securing, first. Sounds logical, TABLE OF CONTENTS

Relevant reading: Mobile device security: Tips for securing portable devices at your organization •

Do these assets have connection approval? It is common for assets to find their way into network without any preapproval or discussion. If you see some rogue assets on your list, evaluate their access and remove as necessary.

•

Do these assets have companyapproved settings installed and configured? Company-approved settings (i.e., system hardening) help safeguard software and assets from attacks – and trust us, the frequency of these attacks will only increase.

See Cyber Network Fundamental Page 36 www.chart-exchange.com

Be Cyber Resilient From cyber risk assessments and penetration testing to incident response and investigations, Kroll's global cyber experts are ready to help you and your insureds along the path to cyber resilience.

kroll.com/cyber

4215 E. McDowell Road, Suite 115 | Mesa, Arizona 85215 Phone 602.904.7687 | Fax 602.734.5759 | eriskstrategies.com

Consultation Services •

Performs a coverage audit

•

Provides risk management consultation

•

Assists in determining if a captive is the right solution for you (traditional or small)

If a captive is the right solution for you,

WE DO NOT REPLACE RELATIONSHIPS We will work with you and your advisors to find the right solution for you.

•

ERS provides insurance coverage policy design

•

ERS provides full underwriting services; including policy issuance, premium invoicing and collection (premium financing is available)

•

ERS aids in domicile selection

•

ERS provides captive formation and captive management services.

WE ARE HERE TO HELP YOU We are experienced, creative, responsive, and responsible.

Providing customized solutions rather than off the shelf products.

And, that solution might not require one of our products.

Turn-key captive management includes • Regulatory compliance and oversight • Corporate compliance and oversight • Bookkeeping and recordkeeping services • Coordination with tax professionals for timely filing of all tax returns and tax payments

The staff of Enterprise Risk Strategies (ERS) has over 100 years of insurance and risk management experience. Our staff includes accountants, CPAs (certified public accountants), CAs (chartered accountants), attorneys, business and insurance professionals.

Keeping you on the right path.

Solving today’s problems with an eye towards tomorrow’s challenges.

OUR TEAM IS THERE FROM THE START TO THE FINISH NSM Insurance Group Comprehensive Insurance Coverage for: Social Services I Addiction Treatment I Professional Liability Staffing Firms I Workers' Compensation I Collectible Vehicles Coastal Condo Associations I Breweries and Wineries Sports and Wellness I Specialty Aviation

888-235-3525 www.nsminc.com

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

17

chart interview

NICHE PRODUCT DEVELOPMENT ENCOURAGED AT LLOYD’S Interview by Paul Lavenhar

C Becoming a coverholder requires having a Lloyd’s broker back you. Your Lloyd’s broker would shepherd you through the process.

So, it required an application, disclosure of financials, and things of that nature. It wasn’t that difficult a process, but it took a long time to complete.”

arl Gerson is the Managing Principal and COO at The Capacity Group of Companies, an EPIC Company. He has over 30 years of experience in the insurance industry.

Carl has a long history of conducting business in the London market and is the chief developer of program business for Capacity. Carl became a Lloyd’s coverholder in the late 1990s.

Carl has held a number of positions beginning as an underwriter with the Mutual Life Insurance Company of New York and working his way up to President of Property & Life Planners, Inc. He joined Capacity Coverage Company of New Jersey in 1997. Carl has been involved in creating or merging over 20 companies in the past 10 years, which has been a key part of Capacity’s growth.

In this interview he discusses his history with Lloyds.

WHY DID YOU DECIDE TO BECOME A COVERHOLDER? Our firm wanted to have binding authority with Lloyd’s. To put together a program where you have binding authority, can quote and issue policies, and have some level of claims handling, you had to be a

18

APRIL 2018

TABLE OF CONTENTS

Carl Gerson, Managing Principal & COO of Capacity Group of Companies, An Epic Company

coverholder. We went through a due diligence process with them to get coverholder status.

WAS IT A DIFFICULT PROCESS? Becoming a coverholder requires having a Lloyd’s broker back you.

Your Lloyd’s broker would shepherd you through the process. So, it required an application, disclosure of financials, and things of that nature.

It wasn’t that difficult a process, but it took a long time to complete.

WHAT WAS THE FIRST PRODUCT THAT YOU DEVELOPED WITH LLOYD’S? Our first Lloyd’s product was for a cargo product for the courier industry, which is one of the transportation niche markets we www.chart-exchange.com

specialize in insuring. It was for general merchandise that was being shipped or delivered by couriers. So, you had the ability to quote and rate and issue a policy with different limits and deductibles, and it included special coverages such as loss of use and loss of income.

WERE THERE OTHER SPECIALIZED PRODUCTS YOU DEVELOPED WHERE YOU SAW A NEED IN THE COURIER INDUSTRY? One of the very first products we developed with Lloyd’s also had to do with the courier industry. In the late 1990’s through the turn of the century, couriers were moving checks at night. They would go to a bank. They would pick up checks that had been presented to that bank during the business day for deposit.

Then they would move those checks to a processing center. If that cargo which was a bag of checks - was lost, there would be a resulting claim for different parts of the loss.

The courier industry is one of the transportation niche markets Capacity specializes in insuring.

Then a bank brings a bulk of checks to a processing center, they immediately get credit for the deposit. And, they start earning interest on that money immediately.

One of the exposures is called loss of interest. If that deposit isn’t going to be recorded at the Federal Reserve, then they lose out on earning interest on that money.

The second exposure is to reconstruct the deposit. If all these checks get lost, you’ve got to try to reconstruct them. You need to figure out what was in the bag what made up the millions of dollars’ worth of deposits. You have a cost

A

bout the author: Paul Lavenhar’s firm PL Communications has provided marketing communications services for 25 years to such insurance clients Rockwood Programs, Capacity Coverage, MetLife, Selective, York Risk Services, and Admiral Insurance, among others. He has has written for 500+ companies in various industries.

Paul also leads a band called GoodWorks that provides music and marketing services to help nonprofits raise money and awareness pro bono. Paul Lavenhar is the principle of the

insurance marketing communications firm PL Communications.

www.chart-exchange.com

TABLE OF CONTENTS

to reconstruct the deposit. And then finally you have what is called the face amount. If you couldn’t reconstruct the check, you actually had to pay the check.

You had to honor the deposit.

And, you wouldn’t know who the counterparty was, so you would just have to pay the face amount.

That was a very unique cover that was for a time exclusively offered

by Lloyd’s. And, some of the claims were multi-million-dollar claims.

CAN YOU TELL ME ABOUT SOME OF THE OTHER PRODUCTS YOU BROUGHT TO LLOYDS? We’ve done an event cancellation cover for catered events. Some caterers, as an example, will only book an event if you give them a deposit, and that deposit many times is non-refundable. So, you have a cancellation exposure. It’s a contingent exposure if the event cancels due to illness or anything like that. We developed an event cancellation for weddings that included a change of heart, which was pretty unique at the time.

DOES THE APPROVAL PROCESS GET EASIER AS YOU BUILD RELATIONSHIPS THERE? The approval process does get easier as you do more products, and you develop relationships with Lloyd’s.

The more business you do in Lloyd’s, the better well known you are, the better your track record in the market, all builds up your credibility.

See Niche Product Development Pg 46 APRIL 2018

19

Bringing U.S. Entrepreneurship to the London Market The CHART/Wilson Elser strategic partnership combines the innovative underwriting philosophy of the world’s oldest insurance brand with the entrepreneurial mindset of U.S. agencies.

For close to 40 years, Wilson Elser has helped organizations to better navigate challenging markets and realize improved combined ratios. We provide London- and Europe-based insurers with ready access to more than 60 discrete legal services delivered by nearly 800 attorneys in 34 strategic locations throughout the United States.

Guided by a proprietary, systematic legal project management program, we help clients define strategies and achieve outcomes that align with agreed business requirements. We also implement dedicated Program Claim/Litigation Management services, creating value and driving efficiencies with respect to legal spend and indemnity.

Wilson Elser is especially proud of its strategic partnership with CHART Exchange and our shared commitment to strengthening relationships between cover holders and risk takers on either side of the Atlantic.

wilsonelser.com Š 2017 Wilson Elser. All rights reserved. 567-17

news & aNALYSIS - Wilson Elser

STREET ARTISTS AWARDED $6.75 MILLION IN DAMAGES AGAINST DEVELOPER WHO WHITEWASHED ARTWORKS

By Jana A. Slavina Farmer

I Image Credit: Creative Commons Attribution 2.0 Generic (CC BY 2.0)

n one of the most important decision to date applying the Visual Artists Rights Act of 1990 (VARA) since its adoption, on February 12, 2018, New York’s Eastern District awarded $6.75 million in statutory damages to 21 aerosol artists whose works were intentionally destroyed by the owner of the buildings on which they were painted.

Gerald Wolkoff and his four real estate entities owned several dilapidated warehouses in a formerly crimeinfested neighborhood in Long Island City, known as 5 Pointz. Around 2002, Wolkoff agreed to let Jonathan Cohen, one of the world’s most accomplished

aerosol artists (known professionally as Meres One), curate the artworks that were put on the walls of 5 Pointz to cover random graffiti. Cohen created a veritable competition between street artists, who vied to win a place on one of the project’s “long-standing walls.”

Ultimately, Cohen’s efforts led to a change in the quality of the neighborhood, turning 5 Pointz into a world renowned “graffiti Mecca.” The site, featured in TV shows, video games and the 2013 motion picture Now You See Me, became a destination

for weddings and school trips, not to mention a major tourist attraction.

Around 2013, after the economic conditions in the area improved See Street Artists Awarded Damages Page 31

J

ana Slavina Farmer represents client interests in connection with design professional matters and architects’ copyright; intellectual property matters involving copyright, sale and transfer of rights in artwork; protection of valuable creative assets; and general commercial disputes. In addition to handling cases before New York state courts, she defends clients in federal courts and in arbitrations and employs mediation to facilitate the cost-effective resolution of disputes. Jana also has experience conducting e-discovery and cross-border discovery in complex cases with large volumes of electronic evidence. Her clientele includes architects and engineers in design professional liability matters, participants in all stages of the creation and transfer of ownership in works of art, and business owners in other intellectual property and general business matters.

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

21

Analysis - ValueMomentum

WHY MGAS NEED A DIGITAL ENGAGEMENT STRATEGY

By Abhijeet Jhaveri

M ABOUT THE AUTHOR: Abhijeet Jhaveri is Chief Marketing Officer at ValueMomentum and leads ValueMomentum’s software-as-a-service business targeted at the MGA, Program Administrator and Coverholder markets. Abhijeet and his team works with MGAs, Program Administrators and Coverholders to deploy ValueMomentum’s iFoundry rating software with support for ISO, NCCI, AAIS and proprietary rate plans and extend these to agents, customers and employees with ValueMomentum’s BizDynamics Digital Experience Solution and App2Data ACORD forms processing Solution.

22

APRIL 2018

anaging general agents and program administrators play important roles in an insurance distribution system where digital forces are converging. With a focus on specialty niches, MGAs and program administrators have become trusted partners in facilitating insurance carriers’ access to profitable growth. Increasingly, such growth relies on digital strategies.

As of 2016, MGAs represented about 14% of all commercial lines insurance business, according to global insurance investment firm Conning Inc. The dynamic MGA marketplace comprises hundreds of these specialist agencies and is competitive, Conning reported.

With so many providers focused on attaining underwriting profit, it seems inevitable that some will succeed and more than a few will not.

To keep the MGA and program administrator channel viable, it is important for these firms to continue to attract retail agents and brokers. To do that, MGAs must ensure that the

TABLE OF CONTENTS

product set is distributed effectively.

If retail agents find it cumbersome to work with an MGA to obtain coverage for their insureds, they will seek alternative options. In short, MGAs and program administrators need to harness the powerful digital forces that are impacting virtually every industry.

These forces include mobility, IoT, data, analytics and social nets. Consequently, agent and customers’ expectations of service and a digital experience are changing. For MGAs and program administrators, a robust digital engagement strategy will be a key to continued growth and profitability.

IMPROVING THE EXPERIENCE FOR RETAIL AGENTS A recent survey of independent agents

by National Underwriter, the National Association of Professional Insurance Agents (PIA) and research firm Flaspöhler | NMG offers some telling statistics about agent satisfaction that provide valuable lessons for MGAs. Against these statistics, it is important to note that the agency

See MGA Digital Strategy Page 41

www.chart-exchange.com

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

23

News/analysis - wilson elser

THE FREEDOM TO SWIM

By Anthony B. Corleto

I

n an August 2017 article, “0.44% of NFL Brains” we addressed The New York Times coverage of Dr. Ann Mckee’s report “Clinicopathological Evaluation of Chronic Traumatic Encephalopathy in Players of American Football” (JAMA. 2017; 318(4):360-370), pointing out the study’s limitations.

Another study from Boston University about repetitive contact is getting similar attention.

“Concussion, Microvascular Injury, and Early Tauopathy in Young Athletes after Impact Head Injury and an Impact Concussion Mouse Model” (Brain 2017; doi:10.1093/ brain/awx350) has been viewed as establishing a link between “subconcussive hits” (any contact that doesn’t produce a frank concussion) and chronic traumatic encephalopathy

(CTE). As with Dr. McKee’s JAMA report, this piece is getting full-on media exposure. It’s also the centerpiece for legislative calls to ban organized youth tackle football in New York and Illinois.

A group of 25 independent doctors have signed a letter, agreeing that “limiting head impacts among youth is smart, overstating scientific consensus is not.”

The Illinois proposal states a broad “finding” that the “best available evidence” says CTE is caused by years of repetitive hits to the head and cites sub-concussive impacts as an important factor. Both proposals would prohibit organized youth tackle football; Illinois up to age 12 and New

York up to age 13. Illinois specifically says all other organized youth sport activities are acceptable. Presumably that would allow youth boxing, where the objective is to “knock out” or deliver a concussion to the opponent.

New York includes a definition of tackle football, as if it were needed.

A CLOSER LOOK A group of 25 independent doctors have signed a letter, agreeing that “limiting head impacts among youth is smart, overstating scientific consensus is not.” Citing the Boston University study’s ascertainment bias and its conflict with other studies, the group points out that scientific evidence linking sports to brain injury, brain injury to CTE and CTE to dementia is not strong, and that further work is needed before policy makers engage in risk-benefit analysis.

See Freedom To Swim Page 40

T

ony Corleto of Wilson Elser focuses on commercial litigation, transactions and sports risk matters. His experience covers intellectual property, corporate, construction, insurance coverage and bad faith, environmental, and employment practice liability issues. He regularly tries cases and argues appeals in the state and federal courts of Connecticut and New York, including complex matters involving banking and lease finance, software disputes, development rights and brain injuries. In commercial litigation and transactions, Tony represents a wide range of clients, including consulting organizations in the technology, environmental and market research sectors; general and trade contractors; insurance companies and brokers; and software developers.

24

APRIL 2018

TABLE OF CONTENTS

www.chart-exchange.com

Now here’s a

REAL SURPRISE…

A firearm liability product that can be sold by independent insurance agents!

It is estimated that nearly 80 million Americans own at least one firearm. But what happens if a law-abiding citizen is actually forced to use that weapon to protect themselves, a loved one, or their personal property? Many homeowner policies specifically exclude firearm use — even in self defense — as a covered exposure, deeming it to be an intentional act. That leaves the gun owner personally liable for legal expenses, bail bond costs, and any judgments awarded through a civil action.

As an insurance agent, you are in the best position to explain the significant personal liability exposure faced by your gun-owning clients. Unfortunately, you haven’t been able to help your clients by offering a product to address this need — until now.

Rockwood Programs now offers a firearm liability policy designed to protect insureds against civil or criminal actions resulting from the use of a gun in self-defense. It is the only one available in the industry that can be sold through insurance agents. A wide variety of limit options are available, ranging from $50,000 to $5 million. Annual premiums start at just $135.

Best of all, we make it easy for you to present the firearm liability product to your clients. An inventory of customizable sales aids is available, including marketing brochures, simplified self-rating applications, and more. Our team can even help provide product-specific content for your website!

Visit us at www.rockwoodinsurance.com to learn more We can also accommodate group accounts (police, security, gun clubs, etc.).

E-mail: president@rockwoodinsurance.com Rockwood Programs, Inc., 3001 Philadelphia Pike, Claymont, DE 19703 p: 800-558-8808 • f: 302-764-5477 • e: sales@rockwoodinsurance.com

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

25

Partners who understand your needs.

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 Lloyd’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.

C L A I M S M A NAG E M E N T | M A N AG E D CA R E | R I S K MA N AG E ME N T | LOSS CO N T R O L www. YORKRSG .co m

special report - York Risk Services

THE ‘HIDDEN’ COSTS OF A WORKPLACE ACCIDENT: A GOOD REASON TO GET SERIOUS ABOUT SAFETY

While everyone agrees that a safe workplace is the best way to prevent accidents and injuries, building a culture of safety is a commitment that too often gets lost in the day-to-day shuffle.

But when you factor in the many hidden costs of a workplace accident, the very real impact to a company’s efficiency and bottom line might be all the incentive needed to get serious about safety on the job.”

www.chart-exchange.com

W

hen you think about the cost of a workplace accident, there are certain expenses that immediately come to mind, like medical and indemnity costs, legal costs, or property that has been damaged or destroyed. These are some of the more obvious, ‘direct’ costs incurred in an accident, and are generally easy to quantify and are most often insured expenses.

Direct costs can be quite substantial, but there are other, less obvious uninsured expenses that are incurred when a workplace accident or injury happens. And they can drive the total cost of the claim much higher – anywhere from 3 to 10x higher depending on the nature of the accident – and significantly impact a company’s efficiency and bottom line.

These ‘hidden’ costs are often harder to put a price tag on, but they are very real and worthy of attention.

Putting aside for a moment the most important reason for a company to

TABLE OF CONTENTS

embrace safety – the welfare of its people - when you comprehend the total cost of a workplace claim, and consider just how expensive and disruptive an accident truly can be, it begs the question: why aren’t businesses doing more to prevent accidents from happening in the first place? And while building a ‘culture of safety’ in the workplace involves a commitment of time and resources, isn’t it by far a better investment in the long run?

“Many businesses don’t stop to consider how large their uninsured risk really is.” comments Randy Thornton, President, York Risk Control. “With so many businesses today operating on thin margins, an accident or injury could be devastating from a financial standpoint. A commitment to creating a safer workplace seems a small price to pay in comparison.”

What are the hidden costs that risk managers need to be aware of?

See Costs of Workplace Accident Page 28

APRIL 2018

27

special report - York Risk Services Continued From Page 27

HIDDEN COSTS OF WORKPLACE ACCIDENTS PRODUCTIVITY-RELATED COSTS Production disruption at the time of the accident – when an accident happens, whether it’s an injury accident or not, people are going to stop working for a while. Co-workers will assist where they can, offer to transport or accompany and make phone calls. They will talk with colleagues, and make a phone call home. If the accident was serious, people will be traumatized, worried about their injured colleague and need time to process and communicate.

Work stoppages and slowdowns have a very real cost.

Disruption following the accident – Insurance investigations, police investigations, witness interviews, cleanup crews onsite, normal operating protocols that have been temporarily suspended or changed – just a few of the many productivity disruptions that can happen postevent.

Management time – Following an accident, supervisors and managers can be called upon to: • participate in investigations • •

• • •

complete paperwork recruit, interview, train and manage replacement workers or teams pick up extra work normally handled by the injured employee coordinate the events surrounding the accident investigation schedule repair and clean up services

and many other tasks that will take them away from their normal day-today work jobs.

Crew/team disruption – When work is performed as a unit, a synergy often forms that can be disrupted when one member of the team

or crew is injured. A good example: a 4-man landscaping crew that quickly does a lawn by simultaneously cutting grass, edging, weed whacking and trimming shrubs. They are able to do 10 lawns a day because the crew understands the process and flow of work, but a replacement worker will undoubtedly cut into productivity. There are any number of industries where crew disruption would be a factor, notably construction and restaurant/food services.

EQUIPMENT DOWNTIME If equipment was damaged and is now offline, there could be a real cost in terms of lost production. With the ‘just-in-time’ shipping environment many manufacturing companies operate in to avoid costly warehousing of goods, a critical piece of equipment that’s out of service can create a bottleneck that spells financial disaster.

SPOILED MATERIALS For certain industries like food service and production, or certain manufacturing applications, an accident also means spoiled goods.

It can be as little as the batch of goods

A

ubrey Fountain is Senior Vice President of York Specialty Markets, with York Risk Services Group. He has been with York for 18 years. His primary goal is to continue to develop relationships and opportunities with both the London market & US Coverholders, while improving Operations as it pertains to binding facility & open market claims handling. For 29 years, he has served in technical & management claims positions with the primary focus being on customer service.

Aubrey holds a Bachelor of Science- Business Administration degree from Troy University.

28

APRIL 2018

TABLE OF CONTENTS

www.chart-exchange.com

special report - York Risk Services directly affected by the equipment malfunction or as widespread as contaminants affecting hundreds, even thousands of pounds

For every dollar in direct costs, indirect costs could be as much as $2.12 on the low end, with studies indicating indirect costs as much as 17x higher depending on the type of incident and industry.”

There’s no way to prevent all accidents from occurring, but adopting a culture of safety is a big step toward reducing their frequency and severity. Where to begin?

York Risk Control Senior Safety Consultant Ken Smylie shares exactly where his team starts when working with a client to instill a culture of safety and accident prevention: •

of raw materials.

LOSS OF BUSINESS REPUTATION AND GOODWILL This is a category of expense that can be very hard to measure but arguably, the most devastating to a company. A serious accident or injury, which often involves law enforcement investigations and lawsuits, can easily attract unwanted media attention.

There is great potential for damage to a brand’s reputation that can cause long-term business loss, and in some cases force a company out of business.

OTHER COSTS Other costs can include OSHA and other regulatory fines as well as insurance coverage deductibles and other insurance-related www.chart-exchange.com

consultant can help determine what the best measures are and help you create an implementation plan.

administrative costs.

ADOPTING A CULTURE OF SAFETY AND ACCIDENT PREVENTION – WHERE TO START

•

The supervisory/management staff. Those who are close enough to see the exposures that exist day-to-day in a business are also best positioned to anticipate and disrupt them. Instill a healthy commitment to safety in your supervisors and managers, and train them to recognize the risks.

Making safety part of a supervisor’s performance appraisal is one of the most effective ways to accomplish this.

Identify ‘unsafe conditions’.

There are a tremendous number of hazards that can exist in a workplace: ergonomic, environmental, poor housekeeping, blocked passageways, improper or damaged structures, inadequate machinery guards, to name just a few. A thorough safety audit and walk-through by a competent risk control consultant can identify these hazards so corrective measures can be put in place. The TABLE OF CONTENTS

•

Identify ‘unsafe acts’. Are there risks that employees are taking – either knowingly or unknowingly such as rushing/cutting corners on the job, unauthorized equipment use, bending rules, not using protective equipment, drug/ alcohol use - that are an accident waiting to happen? Identify them, and put corrective actions and training programs in place to lower the risk.

“When we first start to work with a company, management will often times tell us how great their current safety program is.” says Smylie. “But the audit, walk-throughs and employee safety perception surveys sometimes tell another story. The good news is though, by putting targeted, corrective actions and training protocols in place, a company can do much to protect their employees and their business from costly accidents and injuries.”

While the choice seems clear: investing in safety today can protect workers and save money in the long run, it’s often hard to justify in the short term.

It’s only when you look at all the costs incurred with a workplace accident or injury, it becomes apparent that the time and resources spent today to prevent or mitigate claims are most definitely the bigger bargain.

In the final analysis, safety really does pay.

APRIL 2018

29

News Continued From Page 21

STREET ARTISTS ARWARDED DAMAGES significantly, Wolkoff sought municipal approvals to demolish the warehouses and erect luxury condominiums. The artists sought a preliminary injunction to preserve 5 Pointz for street artists. The injunction was denied by the court in November 2013 in a ruling from the bench, with a caveat that a written opinion would follow shortly. Without waiting for the written opinion, Wolkoff had the walls of 5 Pointz painted, covering some artworks completely and some only partially. Unfortunately, none of the artworks was salvageable.

Twenty-one artists filed suit, seeking damages for the destruction of their works under VARA. VARA was enacted to protect the moral rights of artists in their works of visual art as distinguished from the ownership rights in the works. The statute gives artists the right to sue to prevent the destruction of a work of “recognized stature,” a term VARA does not define. Additionally, an artist may www.chart-exchange.com

seek money damages if their work is distorted, mutilated or otherwise modified to the prejudice of the artist’s honor or reputation.

With respect to artworks made part of a building, VARA distinguishes between removable and nonremovable artworks. The artist may sue to prevent the destruction of non-removable artwork unless he or she had a written agreement with the owner of the building that

VARA gives the artists an opportunity to remove their works upon 90 days’ notice that the building’s owner wishes to remove the artwork. See 17 U.S.C. §113(d)(2)(A)-(B). If the artist fails to remove the artwork, or if the owner could not notify the artist despite a good faith effort to do so, the owner may destroy the work without consequences. Id. The 5 Pointz artists were never afforded the opportunity to remove their works.

Judge Block analyzed the artists’ proof of damages and found that actual damages could not be shown as the plaintiffs did not establish a reliable market value of their works, some of which were the size of an entire building wall and thus hard to sell.

The court did award the maximum available statutory damages for each of the destroyed artworks at issue, at $150,000 each for the 45 works found to be of “recognized stature.” specified the artwork may subject it to “destruction, distortion, mutilation, or other modification, by reason of its removal.” See 17 U.S.C. §113(d)(1) (B). Wolkoff had no such agreements with the artists.

The 5 Pointz trial began in midOctober 2017 and lasted three weeks. At the eleventh hour, plaintiffs decided to convert the case to a bench trial. The court, acknowledging the work of eight jurors that followed the case with rapt attention for weeks and − recognizing the cultural significance 5 Pointz had achieved in the local community and worldwide − chose to try the case with the advisory jury, meaning that the court is not bound by the jury’s findings but may choose to be guided by them.

In November 2017, the jury issued a non-binding verdict that 36 of the works at 5 Pointz were art of “recognized stature.”

Judge Block did more than merely adopt the jury’s findings; he found that an additional nine works qualified for liability and he found Wolkoff’s actions to be willful, warranting harsher damages.

See Street Artists Awarded Damages Page 43

TABLE OF CONTENTS

APRIL 2018

31

ANALYSIS - Fortegra

INSURTECH AND AUTO INSURANCE: MORE THAN A PARTNERSHIP

By Joe Alberti, Fortegra VP of Specialty Programs

T

he growth of insurtech is putting pressure on insurance companies to adapt, to keep up with both competitors and consumer demand. According to a PwC survey, three-in-four insurers anticipate that insurtech will disrupt their business in the next five years, yet only 14 percent said they’re currently investing in insurtech offerings.

J

oe Alberti is Vice President of Specialty Programs and Products for Fortegra Financial (a Tiptree Inc. company). Fortegra® and its subsidiaries comprise a single-source insurance services provider that offers a range of consumer protection options including warranty solutions, credit insurance, and specialty underwriting programs. Delivering multifaceted coverage with an unmatched service experience for domestic and international partners and their customers, Fortegra solves immediate, everyday needs, empowering consumers to worry less and experience more.

32

APRIL 2018

If you’re one of those companies that’s still on the fence, here’s a look at how insurers—specifically automotive insurers—can utilize insurtech to the satisifaction of both their business and their customers.

invaluable insight in developing apps or other tools to ensure a streamlined customer experience from start to finish.

From mobile apps that track customer behavior, to AIfocused tools able to help insurers customize policies, it’s critical to invest in resources that can help provide a high-value customer experience.”

INVESTING IN RESOURCES From mobile apps that track customer behavior, to AI-focused tools able to help insurers customize policies, it’s critical to invest in resources that can help provide a high-value customer experience.

More than 90 percent of respondents in the PwC report said that in the next five years, they anticipate website access and mobile apps to be the top two drivers for customer interaction with the company. An underwriting partner can provide TABLE OF CONTENTS

LEVERAGING DATA One of the biggest benefits of those kinds of tools is the trove of new data they provide. By using updated technological tools to analyze driver behavior, insurers can work with underwriting partners to dig into data and, in turn, develop personalized coverage for customers. Additionally, data analysis

See Insurtech & Auto Insurance Page 42 www.chart-exchange.com

Your Partner for Admitted Market Capacity

1

PROGRAM CARRIER WITH NEARLY

$

BILLION

,000,000,000

IN TOTAL SALES

A- RATING A.M. BEST

S P E C I A LT Y P RO G R A M S

PREMIUM FINANCE

7

ADMITTED

INSURANCE COMPANIES

CAPTIVES & RETRO COMMISSION STRUCTURES RISK PARTICIPANT SUPPORTING COVERHOLDERS, MGA S & MGU S

CREDIT P RO G R A M S

WA R R A N T Y P RO G R A M S

As CHART's newest vendor partner, Fortegra's admitted paper helps coverholders and MGAs gain access to premier markets.

Learn how Fortegra’s admitted program can help you Experience More at fortegra.com/programs, or via email at programs@fortegra.com.

Fortegra® is the marketing name for the specialty underwriting operations of Fortegra Financial Corporation and its subsidiaries. Specialty underwriting program availability varies by jurisdiction. Where available, the programs are underwritten by admitted insurance companies.

BRIDGING THE GAP

BETWEEN USA AND LLOYD’S OF LONDON

34

APRIL 2018

TABLE OF CONTENTS

www.chart-exchange.com

News

LLOYD’S NAMES DAWNMARIE BLACK U.S. NORTHEAST REGIONAL DIRECTOR

D

awnmarie Black joins Lloyd’s, overseeing the Northeast region for the US, based out of Boston. Share Lloyd’s, the world’s specialist insurance and reinsurance market, appointed Dawnmarie Black as the market development lead for Lloyd’s with responsibility for the Northeast region of the US.

brokers, program managers, managing general agents, risk managers, and the organizations that support them.

Black holds a B.A. from Allegheny College and is affiliated with a number of industry groups and insurance industry philanthropic efforts, including the Insurance Industry Charitable Foundation (Boston Chapter Board Member).

As a leading provider of natural catastrophe capacity in the Northeast, Lloyd’s also writes a wide range of management liability, professional liability, cyber, and other specialty lines on an open market basis and through binding authorities extended to more than 250 coverholders.

Black, an accomplished broker and underwriter, joins Lloyd’s from London broker BMS Group, where she served as a Senior Vice President on the Risk Solutions team. She brings more than 20 years of experience, having served in senior roles with Ascot, Aon Benfield, AIG, and Chubb.

Serving coverholders’ needs since the 1930s … and into the future

Hank Watkins, President, Lloyd’s, North America, said of Black’s appointment, “We are thrilled to have Dawnmarie join our US team. She knows the London and US markets well, from both distribution and underwriting perspectives, and her experience will prove invaluable to our local distribution partners.”

Bespoke solutions Packaged lines Enhanced commissions Web-based platforms US domiciled marketing office Access us through 170 Lloyd’s brokers

Black will be based in the Boston area and responsible for market development activities in a 12 state region stretching from Maryland to Maine, and Washington D.C. Lloyd’s stakeholders in this region include retail, wholesale, and reinsurance www.chart-exchange.com

Proud supporters of CHART

AtriumUw

www.atrium-uw.com

Atrium Underwriters Ltd

TABLE OF CONTENTS

APRIL 2018

35

Analysis - Kroll Continued From Page 14

FIVE CYBER SECURITY FUNDAMENTALS FOR 2018 •

Do you know when an unapproved or unsecured asset connects or software runs on your network? It’s one thing to safeguard the approved assets on your network; it’s another to spot the unapproved in a timely fashion. Do you have a system in place that alerts when an asset/ software works its way into your network? This is one of the most important parts of a cybersecurity program.

•

Are unapproved assets or software automatically blocked? It goes without saying that waiting to determine if an outside actor has penetrated your network, investing in defensive mechanisms that block unapproved assets and software is a standard cybersecurity strategy.

The stronger your blocking defenses, the less you will have to worry about your cybersecurity.

Consider removing local administrator from endpoints and denying unapproved software from executing.

TO STRONGER CYBERSECURITY IN 2018.

This short checklist shows how you can better prepare your network security for cyber attacks. It’s a comprehensive start, but there are many additional technologies to consider and regulations to adhere.

Now is the time to really invest in the security and protection of your network.

WOULD YOU LIKE TO HAVE YOUR MESSAGE DELIVERED TO 100,000+ FOCUSED INSURANCE INDUSTRY EMAIL ADDRESSES EVERY MONTH?

I’m Kate Boyle Managing Editor. I handle CHART Exchange Advertising. Call me at 302 765-6056 and let’s have a conversation.

36

APRIL 2018

TABLE OF CONTENTS

www.chart-exchange.com

analysis - Vantage agora

SUCCESSFULLY LEVERAGE TECHNOLOGY WITH A BUSINESS OPERATING SYSTEM AND RPA

By Mehul Kenia

V

With over ten years of experience, Vantage Agora has improved upon Robotic Process Automation applications. By integrating an With the experience industry-leading PDF extractor and an RPA tool with their combined with the dynamic Business Operating powerful OX Zion platform, System (BOS), OX Zion®, Vantage Vantage Agora’s RPA solution Agora provides the best solution for your business to typically saves clients 50% gain the Visibility, Control and to 70% or more on time and Operational Intelligence needed resources to perform a task.” to maximize Operational Efficiency.

antage Agora (VA), a leading technology solutions provider, has been using Robotic Process Automation (RPA) long before it became a popular tech term. In the past, VA developed process automation scripts using testing tools such as IBM® Rational® Robot and Selenium.

Even though at that time they were not considered "process" automation tools, the fundamentals have remained the same. They can mimic human keystrokes and perform Optical Character Recognition (OCR) on documents,

which is not much different than what the current RPA tools can execute.

Vantage Agora uses RPA to complete activities such as moving data from one website to another, reading files such as emails, PDFs and spreadsheets, and inputting data into applications, databases, documents and websites.

According to PricewaterhouseCoopers, “Process automation works best with other productivity techniques. At PWC,

See Leverage RPA Tech Page 46

A

bout the author: Mehul Kenia is the Product Architect for Vantage Agora, a global provider of remote staffing and technology services. He is responsible for technology and software architecture and development, including his work on the industryleading Business Operating System (BOS), OX Zion®. Mehul has over 20 years experience in implementing enterprise-wide solutions and strategies that enable companies to achieve success. Mehul has a Masters in Computer Information Systems from Cleveland State University and a Bachelor of Science in Physics.

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

37

38

APRIL 2018

TABLE OF CONTENTS

www.chart-exchange.com

Analysis - SIAA

4 BEST PRACTICES TO MAKE INSURANCE APPEALING AS A CAREER What can independent agents do to increase the appeal of insurance as a career?

By Matt Masiello This article was first published at PropertyCasualty360 HERE and republished with permission.

T

he insurance industry continues to face a crisis and this one is not due to the deluge of recent hurricanes affecting the Southeast or devastating wildfires out West. What the insurance industry faces — from large corporation to Main Street independent agent — is a talent drought.

As with most industries, property & casualty insurers are dealing with huge numbers of professionals leaving the workforce as they reach retirement age and job descriptions evolving with technology. Fueling the problem is attrition.

career presents a great risk for each organization in the industry — big or small.

A 2010 report from McKinsey & Company found that the number of workers in the insurance industry over age 55 increased 75% during the previous decade – leaving 20% of the insurance workforce approaching retirement. Meanwhile, the report also found that those graduating from risk management and insurance programs met only 10% to 15% of the industry’s need. And the situation has only gotten worse.

LET’S ADMIT IT: WE HAVE AN ISSUE

Moving into 2018, we are at a critical point. The excessive number of people retiring from the industry coupled with a low number of young people signing on to insurance as a

What can independent agents, in particular, do to combat the looming talent drought?

In some ways, we, as an industry brought this problem on ourselves.

The industry neglected to focus on attracting talent and educating the next generation about the benefits of an insurance career. Now, we’re facing a deficit of qualified or even interested candidates. In order to attract younger candidates to the field of insurance, the industry — known in many circles for its drabness — must change with the times.

See Insurance Career Page 44

A

bout the author: Matt Masiello is executive vice president and COO of SIAA. Matt is responsible for operational management of the largest alliance of independent insurance agencies in the United States and its related companies, providing leadership to over 50 direct employees, 49 Master Agencies and more than 6,500 independent insurance agents across the United States. Matt is also president and CEO of SAN Group and Strategic Independent Insurance Agency Solutions. He can be reached at mattm@siaa.net.

www.chart-exchange.com

TABLE OF CONTENTS

APRIL 2018

39

news/analysis - wilson elser

Continued From Page 24

FREEDOM TO SWIM

Image Credit: Creative Commons

CTE pathology in the brain has been shown to be present in 12% of normal healthy people who died at an average age of 81 years. The presence of CTE pathology in the brain on autopsy has not been shown to correlate with neurologic symptoms prior to death.

To be clear, CTE pathology could be present in a normal person. Ling, et al., Acta Neuropathologica.

They also point out that before enacting broad sweeping legislation based on fear of CTE, we need to assess risk-benefit in light of broader public health concerns, citing the rising sedentary trend among our youth, pointing out the generally acknowledged proof that an active lifestyle mitigates the risk of obesity, high blood pressure, diabetes, depression, cardiovascular disease, drug use and dementia. The group also points out the uncomfortable truth: that tackle football is the number one participation sport in high school

40

APRIL 2018

and that it is accessible to children with diverse physiology in ways that other sports are not.

A 2015 British Journal of Sports Medicine study of youth sports showed that concussion rates are 18 times higher than average for rugby, five times greater for hockey and roughly double for American football, as compared to other activities. Why target football?

LOOKING AHEAD Neither of the proposed acts described above is likely to pass. The New York proposal lacks a sponsor in the state senate. Illinois and Chicago in particular have well-established and cherished youth football programs, in addition to boxing. Even if passed, nothing will prevent kids from playing unorganized games. Without supervision. Without TABLE OF CONTENTS

coaches. Without a concussion protocol. Legislative restrictions based on overstated “scientific consensus” are likely to have unintended consequences, hurting rather than helping the population. Studies show that early sports participation leads kids to succeed and make good choices.

As science learns more about concussion, sport administrators are better equipped to make removefrom-play decisions and doctors are better equipped to support the concussed athlete’s recovery and return to activity and address those whose recovery may be compromised. In 2009, the state of Washington passed the Lystedt Act. Since then, every state has adopted a similar law, and every responsible youth sports organization has adopted the corresponding rules. Lystedt acts are smart regulation – they recognize the historical underappreciation of concussive injury, require that coaches and parents be educated in the risk of concussion, and establish concussion protocols for youth sports: removal from play when concussion is suspected and return to play after medical clearance.

And they don’t interfere with our freedom to swim, run, ski, box or play football.

DISCLOSURES AND ACKNOWLEDGMENTS: Tony Corleto serves as general counsel for Pop Warner football. He defends concussion litigation. www.chart-exchange.com

Analysis - ValueMomentum Continued From Page 22

MGA S NEED DIGITAL STRATEGY force of the future will have a younger demographic and expect a better digital experience.

According to the survey, 36.8% of agents rated their overall satisfaction with the commercial property and casualty insurers they use as “very satisfied.” However, 52.5% said they were only “somewhat satisfied.”

Specific areas where agents indicated carriers could make them more satisfied included: • • • • • • • • • •

Higher risk appetite, cited by 46.7% of respondents Greater ease of doing business, 40.4% Better rates, 32.6% Faster response time, 30.4% Higher commissions, 23.9% Better online systems to get quotes and manage claims, 23.7% Better relationships and communication, 21.1% More products, 15.0% More innovation, 8.5% Better claims service, 8.3%

It should not be surprising that digital engagement strategies can address many of these areas for agents. Therein www.chart-exchange.com

is a lesson for carriers and their MGAs and program administrators. There is an opportunity to focus on ease of business, faster response times and better systems to get quotes. The converse is also true – those that do not act, will risk losing share to those who harness digital forces to engage agents and customers!

Powerful digital forces are reshaping the insurance industry; the winners in underwriting and distribution will be the companies that embrace the opportunities. In a future article, Value Momentum will define the building blocks for helping you take the steps towards becoming a digital MGA.” While digitization in its broader sense has transformative effects where better use of data and analytics, with intuitive user interfaces can enable MGAs take on more risk, price it effectively, offer faster service and identify areas to bring more products and innovation to the market. Typically, MGAs are dynamic in the latter – risk assessment, pricing and identifying new opportunities, the former – digitally TABLE OF CONTENTS

engaging customers and agents and harnessing data and insights are not their strong suits.

A managing general agent that can adopts a digital engagement strategy will have a considerable advantage in attracting profitable business and strengthening relationships with other firms in the distribution channel.

LAUNCHPAD FOR ENGAGEMENT AND INNOVATION MGAs and program administrators can use digital approaches to make insurance buying easier and enlightening. For example, MGAs should consider four key goals: •

•

Reach. This equates to access from any device, anywhere, anytime. MGAs can accomplish this by providing apps and sites for agents, insureds and employees replete with capabilities that facilitate self-service, after business hours, for instance.

Engage. Customers keep in mind and seek out memorable, immersive experiences. MGAs and program administrators already are focusing on niches in lines of business. They can improve engagement by enabling agents to select a pre-bundled set of coverages aimed at, let’s say, restaurant owners, with rich content to guide the agent as to how best to advise the customer, and sharing trending data that will inform the end customer. This is See MGA Digital Strategy Page 42 APRIL 2018

41

NEWS Continued From Page 32

INSURTECH AND AUTO INSURANCE can help insurers evaluate risk and improve the types of policies being offered.

Continued From Page 41

CHART MGA S NEED DEFENDER DIGITAL STRATEGY COVERHOLDER E&O AVAILABLE NOW! •

ENHANCING THE CUSTOMER EXPERIENCE Not only does an underwriter provide insurtech companies with custom plans for drivers, but they can also help partners better market themselves…and ensure that it’s all done on the level. The result?

Greater value for the end customer from initial touchpoint, to claims, to renewal, and more.

It’s clear that insurtech spells opportunity for auto insurance companies. Want to make the jump but not sure where to start? Working with an underwriting partner to help handle the relationship logistics is a great way to ensure a smooth transition. And don’t worry: while 30 percent of insurtech startups are connected in the distribution space (meaning they leverage digital technology to create an innovative customer experience), most of them have no actual experience in the insurance industry—so they’ll need some help too.

42

APRIL 2018

•

Mark Lann Phone:

305-248-9495 Email: chart.eo@rockwoodinsurance.com

achieved by providing personal and contextual content, guides, dashboards, alerts and insights.

Transact. Consumers have learned to expect instant gratification during their online sessions. This applies to requests for insurance coverage and service too and reflect the expectations of agents alike. MGAs can make this happen through workflows that marshal core functions and data toward specific transactional purposes, such as quoting and policy service.

Interact. MGAs and program administrators can drive meaningful interactions from any channel. This is achievable by providing the ability to converse with agents and customers, for example, through email, SMS, chat and voice.

Powerful digital forces are reshaping the insurance industry; the winners in underwriting and distribution will be the companies that embrace the opportunities. In a future article, Value Momentum will define the building blocks for helping you take the steps towards becoming a digital MGA.

TABLE OF CONTENTS

www.chart-exchange.com

NEWS- Analysis Wilson Elser Continued From Page 31

STREET ARTISTS ARWARDED DAMAGES Judge Frederic Block of the Eastern District made several important rulings that will likely have an effect on future interpretations of VARA nationwide.

First, Judge Block gave a road map of the kind of proof needed to demonstrate that an artwork is of “recognized stature,” and whether its distortion would be detrimental to the artist’s honor and reputation.

Specifically, the plaintiff artists demonstrated an impressive array of professional achievements and recognition in the form of fellowships, teaching positions, public and private commissions, media coverage and social media buzz.

Plaintiffs submitted the testimony of high-profile luminaries in the field to assert quality, stature, value and potential removability of each work. Judge Block even cited with approval the decision in Martin v. City of Indianapolis, 192 F.3d 608 (7th Cir. 1999), suggesting that “recognized stature” may be sufficiently shown

www.chart-exchange.com

by “certain newspaper and magazine articles” and recommendation letters from the art community.

Significantly, Judge Block determined that even artworks that are temporary in nature are protected under VARA, even though VARA does not directly address this issue. Noting that VARA is part of the Copyright Act, under which a work is “created” when fixed in a copy or phonorecord sufficiently to be perceived for a period of more than transitory duration, Judge Block pronounced that fixation even for a short period will suffice. Possible short life span of artworks is an issue with street art, as it may be and frequently is covered over by new street art, although the 5 Pointz previous artworks were not destroyed or painted over by incoming artists without permission.

Finally, Judge Block analyzed the artists’ proof of damages and found that actual damages could not be shown as the plaintiffs did not establish a reliable market value of their works, some of which were the size of an entire building wall and thus hard to sell. The court did award the maximum available statutory damages for each of the destroyed artworks at issue, at $150,000 each for the 45 works found to be of “recognized stature,” holding that Wolkoff acted willfully and has been insolent and “singularly unrepentant.”

Thus, Judge Block significantly increased the award that the jury would have given to the artists, which was $545,750 in actual damages and $651,750 in statutory damages.

TABLE OF CONTENTS

This case was appealed to the Second Circuit Court of Appeals within days of the Decision. As this is a case of first impression for the Second Circuit on issues such as what is considered an artwork of “recognized stature” under VARA, it will be an important case to watch for street artists and property owners.

NEVER MISS AN ISSUE OF CHART EXCHANGE

SUBSCRIBE NOW TO CONTINUE TO RECEIVE THE CHART EXCHANGE!

APRIL 2018

43

Analysis - sIAA Continued From Page 39

INSURANCE APPEALING AS A CAREER In its report, McKinsey blamed three realities for the insurance industry’s lack of appeal to the younger generation: “a poor reputation, a dim awareness and understanding of career opportunities among high school and college students, and a shortfall of trained students produced by professional schools.”

The industry can’t deny those realities, but it can embrace change and tackle the problem head on. From the perspective of independent agents, there are a number of best practices to adopt to raise awareness of the industry and highlight the positives of their business with the goal of attracting new talent.

1. UNDERSTAND THE NEEDS AND WANTS OF THE NEW GENERATION The habits, likes and expectations of millennials seem to make headlines every day. If an agency wants to ensure its future, it will need to understand what millennials want and align those wants and needs with the opportunities within the agency. They will need to try to match the interests

44

APRIL 2018

Ensuring the next generation is on board to fuel the independent agent distribution cha

of those millennials with those of the agency.

2. PLUG THE VARIETY OF OPPORTUNITIES AND CHALLENGES AVAILABLE

Agencies should consider using language to catch a millennial’s eye, including keywords like flexibility, opportunity, innovation, charity and independence. Additionally, they should consider offering inhouse mentoring and promote its availability, along with descriptions of the agency’s culture.

Insurance careers engage a wide range of skills and talents and offer competitive pay. Agencies need to let potential insurance professionals know this. Insurance is an innovative industry offering opportunities to work in more than just claims and sales. New hires will tap into their math and technological skills, among

TABLE OF CONTENTS

www.chart-exchange.com

According to the headlines, Generation Z is looking for more than just a job.

Volunteering and charity are often significant parts of their lives, and painting an agency with a philanthropic brush can only help attract these community-minded individuals.

and seemingly have ties to the local community. Agencies should also explain how such a career can be satisfying on a number of fronts.

Working in insurance, professionals are helping people protect their homes, are available at their time of most need, and are giving back to their communities regularly.

Agencies need to explain what sets them apart from other employers and be sure to highlight philanthropic activity as well as the agency’s awareness that it’s part of a larger society that needs to give back. Agents should motivate candidates and new hires to get them excited for a career in insurance.

The problem has been identified. The facts and statistics are in. While the industry as a whole works to promote risk programs at the college level to encourage more careers in insurance, agents can take action as well.

Image Credit: Creative Commons

Agency owners should point out the benefits of the agency, including paid time off, remote work options, anything that highlights a focus on work-life balance annel for the next few decades cannot be overlooked. and in particular, highlight the agency’s volunteer opportunities. others. Opportunities are available from sales to marketing to legal, and 4. GET THE WORD OUT internships are available for those Agencies need to advertise for new looking to get a foot in the door. hires, including anticipated openings or additional staffing requirements.

Further, agencies should let these To keep a steady flow of professionals prospects know that a full career coming into the field, they should awaits in insurance with many solicit new candidates year-round. opportunities for growth both One place to establish an awareness is professionally and financially. the local community college.

3. WHAT’S THE EMPLOYEE VALUE PROPOSITION? www.chart-exchange.com

A number of these students may not have finalized their career path, TABLE OF CONTENTS

MOVING TOWARD THE FUTURE

Agents can educate the young professionals and college students in their communities on the merits of an insurance career. They can do this by being a resource, being visible in the community, making their community involvement known, and sharing information about job opportunities and the culture of the workplace on their website, via social media and through any other medium relevant to their communities. Independent agents who need to boost these resources can consider joining a network or alliance to improve their influence.

The independent agent is a critical part of the fabric of the insurance industry. Ensuring the next generation is on board to fuel the independent agent distribution channel for the next few decades cannot be overlooked. Looking forward to a prosperous 2018!

APRIL 2018

45

NEWS Continued From Page 37

LEVERAGE TECH WITH RPA we estimate that an integrated approach of process automation with process optimization and operating model changes delivers up to twice as many benefits as process automation alone.

For example, standardizing an organisation’s timesheet management process allowed work to be automated with about 50% fewer new robots. Also, people are rarely 100% eliminated from a process so approaches for teambased operational excellence can add value as well.”

Advantages of combining RPA and OX Zion: - All document data is processed, extracted and stored securely on the OX Zion platform, accessible from any device.

•

46

OX Zion is integrated with industry-leading visualization tools. Since all data goes through OX Zion, there are no additional steps needed to import/export data to and from other systems, providing

APRIL 2018

analytics and visualization.

Continued From Page 19

•

OX Zion has built-in workflow management, form engine and alert mechanism. While extracting data, if it reaches a specified threshold, a task is automatically created in OX Zion and an alert message is sent.

NICHE PRODUCT DEVELOPMENT AT LLOYD’S

•

All data is centrally-processed through OX Zion and sent to the RPA tool in a common format. This helps reduce script development time and provides a common input format; no more trial and error or using different input formats for different scripts.

•

OX Zion has built-in integration with industry-leading application APIs to send data directly from OX Zion to those applications without any user interface scripts. This ensures better data integrity and consistency.

With the experience combined with the powerful OX Zion platform, Vantage Agora’s RPA solution typically saves clients 50% to 70% or more on time and resources to perform a task.

Let Vantage Agora help you leverage this technology for faster turnaround time, reduced manual processes, easy maintenance and improved ROI. Contact us today to learn more!

TABLE OF CONTENTS

DID YOU TRY PITCHING THESE PRODUCTS IN THE US AND THEN GO TO LLOYD’S BECAUSE YOU WEREN’T GETTING A RESPONSE? Not in every case. Some of the times we would try the U.S. market, and we didn’t get a response, or we found that we could get more favorable terms at Lloyd’s. As an example, many times with Lloyd’s, you’ll have a claims adjudication authority, so that you can adjudicate claims as the broker within certain limits and certain guidelines.

That gives you a big advantage in that you can deal with the claim yourself, and you can get it done quickly and directly with your client. You are not going to typically get that in a domestic market.

ARE AGENTS AND CLIENTS RECEPTIVE TO LLOYD’S COVERAGE – OR ARE THEY HESITANT AT ALL? We’ve never had any pushback against Lloyd’s anywhere in the market really.

I think most agents do understand the value of Lloyds. Lloyd’s has had a very strong brand name and reputation for a long time.

www.chart-exchange.com

NEWS

LLOYD'S PROVIDES ACORD MEMBERSHIP FOR ALL COVERHOLDERS Providing Lloyd’s coverholders with ACORD membership will continue Lloyd’s support of the London Market Target Operating Model (TOM).

L

loyd's is pleased to announce that all coverholders are now eligible for a free custom ACORD membership. Lloyd's coverholders will have access to ACORD Delegated Authority Data Standards, information, training, and other valuable resources.

Shirine Khoury-Haq, Lloyd’s Chief Operating Officer, said: “The modernization work under the banner of TOM is making further strides towards creating a market that is highly accessible, efficiently run, and relevant to the needs of customers.

Providing coverholders with access to ACORD resources will make it easier for them to do business with the London Market and enable them to engage in the DA SATS (Delegated Authority Submission Access and Transformation) phase of the TOM initiative.

This is about delivering better solutions to our customers with smoother processing in a more consistent manner, and enabling one touch data capture for the London Market.”

Shirine Khoury-Haq, Lloyd’s COO

www.chart-exchange.com

Additional information can be found at the London Market TOM website at tomsupports. london.

TABLE OF CONTENTS

WOULD YOU LIKE TO HAVE YOUR MESSAGE DELIVERED TO 100,000+ FOCUSED INSURANCE INDUSTRY EMAIL ADDRESSES EVERY MONTH?

I’m Kate Boyle Managing Editor. I handle CHART Exchange Advertising. Call me at 302 765-6056 and let’s have a conversation.

APRIL 2018

47

Image Credit: Creative Commons

LLOYD’S OF LONDON

48

APRIL 2018

TABLE OF CONTENTS

www.chart-exchange.com

Credit: Loco Steve Attribution-ShareAlike 2.0 Generic (CC BY-SA