The CHART Exchange August 2018 by The CHART Exchange

TABLE OF CONTENTS

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

CHART Markets Is Scheduled To Go Live October of 2018!

Lloyd’s News Roundup - PL Communications

Reducing And Removing Involvement In Modern Slavery

Pennsylvania Medical Marijuana: Cannabis - A Teachable Moment

The Freedom To Swim Analysis By Wilson Elser

York: Thomas W. Warsop To Assume Role As President, CEO

Understanding Digital Engagement Necessities In Property/Casualty Insurance

In The Age Of OnDemand Video Streaming, Is Cable Still Relevant?

Lloyd’s Launches New Digital Distribution Platform - Lloyd’s Bridge

York Expands In New Markets With Key Risk Management Services Business Unit Acquisition

Vantage Agora Hits A Hole-In-One With Custom Software For Golf Insurance Expert

Insurers Must Rethink Traditional Coverage To Create Solutions For Sharing Economy

Insurance Service Industry Experts Watch For Impacts of New Federal Legislation

Automobile Insurance: A Look At Where Tech Is Taking Agents

Cover Photo: © User:Colin / Wikimedia Commons / CC BY-SA 4.0

SPECIAL REPORT: PG 16 REDUCING AND REMOVING INVOLVEMENT IN MODERN SLAVERY

AUGUST 2018 VOLUME 3 - ISSUE 7

Publisher: CHART Exchange Glenn W. Clark, CPCU Membership Services Kate Boyle Advertising: Kate Boyle Managing Editor: Kate Boyle Contributing Editor: Frank Huver Layout, Design & Circulation: Ron Manera AdMax Corp., Inc.

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Message from the earliest adopter

CHART MARKETS: INSTANT ACCESS TO INSURANCE FROM THE LONDON MARKETPLACE SCHEDULED FOR OCTOBER 2018! Glenn W. Clark, CPCU Publisher & Earliest Adopter

e introduced the concept of the CHART Exchange in 2015. Our stated objective: to expand the U.S./ London marketplace through the identification and pursuit of new business opportunities. We pioneered a number of new strategies designed to help us meet that goal. They included such initiatives as Market Finder support (matching new program ideas with Syndicates possessing compatible risk appetites), and mentoring assistance for agents interested in establishing a business relationship with London. Several new ideas will be launched throughout the remaining months of 2018.

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One new concept garnering significant attention is CHART Markets. We liken this innovation to an on-line shopping mall established specifically for the retail agent community. Much like its “brick-and-mortar” counterpart, this London-centric facility will provide participating members with virtual storefronts from which their various product and service offerings can be promoted. Marketing campaigns focused on our target audience (independent insurance agents) will be implemented in order to drive traffic to this unique internet platform. A multitiered promotional effort – using media advertisement, direct mail, broadcast e-mail, and other techniques – will be utilized to accomplish our objective.

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Visitors to the CHART Markets site will be given the capability of searching through the portfolios of our storeowners through a unique search portal. Entering keywords related to a product or coverage type will generate a roster of members with compatible offerings. Each listing will include highlights, contact information, and links to storeowner websites. More importantly, members are notified every time an agent views their offering – allowing them to conduct their own follow-up. Sometimes retail agents are faced with the daunting task of trying to find a home for a difficult piece of business. Sometimes the difficulty may stem from the unique type of coverage being sought. In other instances, it may be some particular risk characteristic – previous loss history, recent mergers/acquisitions, etc. These “outlier” submissions will rarely fit into the eligibility parameters of most traditional programs.

members will then have the ability to provide placement assistance on a one-off basis. Agents with insurance programs aren’t the only ones who can benefit from becoming a part of this new virtual marketplace. Vendors who cater to our industry will also have the opportunity to use the platform as a way of promoting their areas of specialization to the retail agent community. Click HERE to view a test version of the site. CHART Markets is scheduled to go live in October 2018. Feel free to e-mail us at info@chartexchange.com with any questions or feedback you may have about this new and innovative website.

CHART Markets will include a facility designed to offer support to producers looking to place special risks. Information about the submission can be posted on an exchange page. Participating

Glenn W. Clark , CPCU CHART’S Earliest Adopter

www.chart-exchange.com

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AUGUST 2018

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AUGUST 2018

NEWS

LLOYDS NEWS ROUNDUP LLOYD’S SUCCESSFULLY PREDICTED THE WINNER OF THE WORLD CUP FOR A SECOND TOURNAMENT IN A ROW BY USING INSURABLE VALUE. Lloyd’s correctly predicted France would win the 2018 FIFA World Cup final before a ball was even kicked. The prediction was based on an economic model assessing the insurable value of all the squads competing in the tournament, which was released last month with the Centre for Economics and Business Research (CEBR). It is the same model that allowed Lloyd’s to correctly predict Germany would be crowned World Champions in 2014. •

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Before the tournament, Lloyd’s analysis identified France as having the squad with the highest insurable value (£1.43bn) because of its relatively young squad together with the plethora of world class players across Europe’s top leagues. Many organisations have been making predictions based on various economic models, but insurable value has proved the most reliable predictive tool, despite many upsets during the competition. The insurable value metric has been reliable throughout the www.chart-exchange.com

tournament, correctly predicting the winners in almost two thirds (64%) of the 64 matches played. CEBR used players’ wages and endorsement incomes, alongside a collection of additional indicators, to construct an economic model which estimates players’ incomes until retirement. These projections formed the basis for assessing insurable values by player age, playing position and nationality. The analysis enabled Lloyd’s to predict who would qualify from their respective groups and progress through knockout stages. The team with the highest insurable value in each match is the team Lloyd’s predicted would win and progress. LLOYD’S CEO INGA BEALE TO LEAVE IN 2019 Lloyd’s today announced that Chief Executive Officer, Dame Inga Beale, will step down next year after leading the global insurance and reinsurance market for five years. Inga joined Lloyd’s in January 2014. Since then, her commitment to transformation across the market, and within the Corporation, has led to significant cultural change and the adoption of new technology that has accelerated the market’s modernisation and digitalisation. TABLE OF CONTENTS

Inga will leave Lloyd’s with a strengthened reputation as one of the most respected and trusted insurance brands in the world, with a strong and experienced leadership team focused on delivering Lloyd’s strategic priorities. Inga Beale, Chief Executive Officer at Lloyd’s, said: “The decision to leave has been a tough one and when the time comes I will miss the energy, innovative spirit and expertise that I come across every working day. Leading Lloyd’s is an honour and I am proud to have played a part in ensuring that it remains relevant and fit for purpose for the future. The world trusts Lloyd’s to be there when it matters the most and I believe it is well placed for the next 330 years.” LLOYD’S LAUNCHES NEW DIGITAL DISTRIBUTION PLATFORM – LLOYD’S BRIDGE Lloyd’s, the world’s specialist insurance and reinsurance market, has launched a new digital distribution platform – Lloyd’s Bridge – designed to quickly, easily and efficiently connect insurance businesses and entrepreneurs with Lloyd’s underwriters. Lloyd’s Bridge is an online platform that matches insurance businesses See Lloyd’s News Roundup Page 42 AUGUST 2018

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News - Vantage Agora

VANTAGE AGORA HITS A HOLE-IN-ONE WITH CUSTOM SOFTWARE FOR GOLF INSURANCE EXPERT By Allison Shumaker

In just one month, Vantage Agora launched a custom software solution for Stellar Holein-One, making them eagles for quick prize insurance quotes.

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LEVELAND, OHIO, UNITED STATES, July 24, 2018 / EINPresswire.com/ — The team at Vantage Agora has once again exceeded expectations by building a custom software solution for Stellar Hole-in-One – in just one month. Using their expertise in Operational Excellence, Vantage Agora optimized OX Zion, their Business Operating System(BOS), to meet the specific requirements of this golf prize insurance provider. Although OX Zion is well-equipped to serve nearly any business, Stellar Hole-in-One needed a software that would assist with insurance for clients who want to coordinate prizecentered golf events, like hole-in-one competitions. Rather than covering TABLE OF CONTENTS

the cost of the prizes themselves, Stellar Hole-in-One’s customers pay a nominal contract fee and let the insurance company handle the prize amount when a golfer makes a hole-in-one. The software Stellar Hole-in-One required had unique functionalities, including the ability to provide quotes, assess risk, create and manage policies. Considering the seasonal nature of golf, a quick and seamless implementation was a must. This is where OX Zion came in. Since no existing product would accommodate all aspects of Stellar Hole-in-One’s business needs, Vantage Agora built a custom solution with lightning speed. Arvind Gopalakrishnan, VP of Technical Sales for Vantage Agora, stated, “OX Zion is designed to handle many different industries, and the scalability of our product enabled us to quickly build Stellar Hole-in-One’s software. We got the request in April and launched in May.” The call center CSR software is user-

See Hole-In-One Page 12 AUGUST 2018

NEws - Vantage Agora Continued From Page 11

VANTAGE AGORA HITS A HOLE-IN-ONE WITH CUSTOM SOFTWARE FOR GOLF INSURANCE EXPERT friendly and built to streamline the process by automatically populating information across multiple screens (to eliminate unnecessary clicks), printing contract forms and endorsements, housing data for quotes, and more. And, since OX Zion is cloud-based, it can be accessed from anywhere, making it ideal for busy entrepreneurs. “Time was of the essence in this project to launch in time for the golf season. The Vantage Agora team was amazing in both their ability to quickly grasp our business logic and their ability to apply that logic for a successful launch on time. We are very grateful for their effort,” Doug Burkert stated. If your business needs a software system that handles everything – and needs it developed quickly – Vantage Agora can create a custom solution using OX Zion to help your company hit a hole-in-one! ABOUT VANTAGE AGORA, INC. Vantage Agora is a Beachwood, Ohio-based team with expertise in

AUGUST 2018

operations, technology, Six Sigma, lean management, business process re-engineering (BPR) and business process management (BPM). They focus on helping clients boost profits by improving operational control and enhancing data visibility. Vantage Agora also offers OX Zion, a dynamic Business Operating System software that launched in 2013. For information, news and events, visit www.vantageagora.com.

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

ABOUT STELLAR HOLE-IN-ONE Stellar Hole-in-One is a Dallas-based hole-in-one prize insurance company that was founded by Doug Burkert, an expert with 25 years in golf prize coverage. He and his team have experience in assisting with over 250,000 golf events worldwide and provide more sponsor visibility, most complete coverage with favorable rules that make the hole-in-one competitions better. Their coverage is through Amalgamated Casualty Insurance Company (rated as Excellent by A.M. Best). For more information on Stellar Hole-in-One, visit www. stellarholeinone.com.

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

www.chart-exchange.com

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News/ANALYSIS - Cost Financial

IN THE NEWS: INSURANCE SERVICES INDUSTRY EXPERTS WATCH FOR IMPACTS OF NEW FEDERAL LEGISLATION

much-watched piece of federal legislation that will have an impact on banks, lenders and the insurance services industry has been recently signed into law. The Dodd-Frank reform and deregulation bill was signed into law by U.S. President Donald Trump on May 24, after it passed a vote in both the U.S. House and Senate. The “Economic Relief, Regulatory Relief, and Consumer Protection Act” (S. 2155) makes changes to provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act and law that was passed to regulate banks — as well as the financial, and insurance services industries — after the financial crisis of 2007-2008. The new deregulation bill contains language that scales back oversight of the financial industry. Additionally, international insurance regulatory issues are addressed by S. 2155. President Trump promised to dismantle Dodd-Frank as part of his 2016 presidential campaign. The final bill signed into law in May 2018 doesn’t go that far, but does make significant changes and was passed with bipartisan support. www.chart-exchange.com

HOW THE ORIGINAL DODD-FRANK LEGISLATION WAS RECEIVED BY THE INSURANCE SERVICES INDUSTRY Many in the insurance services industry had questions in response to the passage of Dodd-Frank when it was first drafted almost 10 years ago. Dodd-Frank law established the Federal Insurance Office (FIO) as an official observer of the insurance services industry without general supervisory or regulatory authority. Leaders in the insurance services industry were also concerned about how much involvement the Financial Stability Oversight Council, established by Dodd-Frank, would have in insurance matters, as the new law gave the council authority to monitor domestic and international financial regulatory developments relating to insurance. Additionally, the Dodd-Frank Act liquidation regime could have been interpreted to possibly include insurance company subsidiaries and affiliates. In response, industry experts questioned increased federal oversight, whether Dodd-Frank would preempt state laws, and how TABLE OF CONTENTS

much involvement would be had by the federal Treasury Secretary. Many wondered if any provisions of the Dodd-Frank Act would require insurers to change their products and services. Dodd-Frank also stipulated that within 18 months of enactment, the FIO director must issue a broad-based report to Congress on how to improve the regulation of insurance services in the United States. FLASH FORWARD TO MAY 2018 The Senate version of the Economic Growth, Regulatory Relief and Consumer Protection Act was a wide-ranging bank deregulation bill that would scale back key parts of the Dodd-Frank law, but did not directly impact the FIO. The U.S. House Financial Services Committee version of the new legislation sought to replace the FIO with a newly formed Office of Independent Insurance Advocate that would be appointed by the president, rather than an independent civil servant representative as stipulated by DoddFrank. See New Federal Legislation Page 42 AUGUST 2018

special report - kroll

REDUCING AND REMOVING INVOLVEMENT IN MODERN SLAVERY ON THE HEELS OF THE DUTCH CHILD LABOUR DUE DILIGENCE BILL, THE FRENCH CORPORATE DUTY OF VIGILANCE LAW, COMES THE BRITISH UK CRIMINAL FINANCES ACT 2017 WHICH ENHANCES THE PROCEEDS OF CRIME ACT ALLOWING THE SEIZURE OF PEOPLE WHO HAVE CARRIED OUT GROSS HUMAN RIGHTS ABUSE OUTSIDE THE UK1 By Richard Dailly and Duncan Jepson

Instead of implementing robust ongoing risk control, many companies rely on tactics such as single audits of the supply chain and due diligence of specific suppliers. However, when companies admit that the identities of their suppliers are largely unknown, there is real doubt that their compliance programs are having much of an impact.“

nd in the US, there have numerous bills put forward in relation to anti-human trafficking, supply chains and banking, since the loophole under

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the Tariff Act was closed last year by Obama’s Trade Facilitation and Trade Enforcement Act2 . Modern slavery and human trafficking present businesses with potentially huge risks. Thailand’s fishing industry, construction projects in Qatar, brick kilns in India, dams on the Mekong, palm oil in Malaysia, and electronic goods in China are just a few of the operations suspected of engaging in human exploitation that are regularly reported in the press. A closer examination of the human story behind the headlines provides the understanding of an organization’s true exposure and liability, which was, for instance, starkly revealed by the mass graves of trafficked persons found in northern Malaysia and southern Thailand in 2015. One of the greatest difficulties in getting businesses to be more proactive in rooting out human trafficking and slavery from their supply chains has been that no criminal liability has readily accrued to end buyers or suppliers. This is despite the fact that human trafficking

is a crime of crimes, comprising multiple offenses against the person as well as corruption and money laundering. There has been limited incentive to invest in the type of internal controls that would provide consistent corporate transparency throughout the supply chain. A more potent driver has been the fear of an investigative journalist finding and then managing to sell a story that will be picked up by global readers. However, many companies know this only happens infrequently. Therefore, instead of implementing robust ongoing risk control, many companies rely on tactics such as single audits of the supply chain and due diligence of specific suppliers. However, when companies admit that the identities of their suppliers are largely unknown, there is real doubt that their compliance programs are having much of an impact. The reality has been that without obligations carrying a penalty for failure to comply to some riskbased approach, strategies have been piecemeal and half-hearted.

See Modern Slavery Page 34 TABLE OF CONTENTS

www.chart-exchange.com

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Bringing U.S. Entrepreneurship to the London Market The CHART/Wilson Elser strategic partnership combines the innovative underwriting philosophy of the worldâ&#x20AC;&#x2122;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.

news & aNALYSIS - Wilson Elser

By William F. McDevitt, Esq.

ublic school teachers wear many hats. Not only are they expected to teach, but they often must act as counselors, surrogate parents, janitors, dispute resolution specialists and much more. Increasingly, teachers are expected to take responsibility for the health of their students as well. Specifically, in schools that can no longer afford fulltime or even part-time nurses, it falls to teachers − or administrative staff − to ensure that a student receives prescribed medication. What happens when that medication is cannabis?

Section 506 of Pennsylvania’s Medical Marijuana Law (MML) requires all patients under the age of 18 to have a “caregiver.” That “caregiver” must be the parent of the minor, an individual designated by the parent or an appropriate person designated by the Commonwealth. The MML appears to limit any single patient to a single caregiver; arguably, if a parent is serving as caregiver, no other person can be designated to provide the child with prescribed cannabis. Thus, asking a teacher to serve as that single caregiver to deliver cannabis would

limit the child’s access to medication on weekends, holidays, before school or after school. All of this sidesteps the question of whether children will have access to prescribed cannabis while attending school. Section 2104 of the MML

See Medical Marijuana Page 29

bout the author: William McDevitt centers his practice on professional liability defense, primarily focusing on attorneys, physicians, medical service corporations, architects, engineers, insurance brokers and accountants. Bill’s professional liability cases arise from his clients’ provision of basic services to sophisticated and complex undertakings. Bill also has extensive litigation experience in invasion of privacy claims; libel and slander claims; employment disputes before administrative boards and state and federal courts; asbestos liability defense; construction litigation; and residential liability. He is a member of the firm’s Cannabis Law practice. He can be reached at william.mcdevitt@wilsonelser.com.

www.chart-exchange.com

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Laurie Avocado (Cropped version of [1]) [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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Analysis - Wilson Elser

THE FREEDOM TO SWIM Author: Anthony B. Corleto

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 “sub-concussive 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. 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.

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. 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.

A CLOSER LOOK A group of 25 independent doctors have signed a letter, agreeing that “limiting head impacts among

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

bout the author: Tony Corleto 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. Before his legal career, Tony worked as a commercial casualty underwriter and risk management consultant. He also has served as general counsel for a software company where he handled copyright, trademark, trade secret and licensing matters. Tony also serves as general counsel for a nationwide sport governing body and for a nationwide environmental consultancy.

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www.chart-exchange.com

By Max Andrews [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], from Wikimedia Commonslicense.

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 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?

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.

LOOKING AHEAD

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.

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 coaches. Without a concussion www.chart-exchange.com

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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 under-appreciation 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. AUGUST 2018

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news - York

YORK: THOMAS W. WARSOP TO ASSUME ROLE AS PRESIDENT, CEO

ork Risk Services Group President and Chief Executive Officer, Rick Taketa, will be moving on from York effective September 1st. As Rick Taketa departs the company, Thomas W. Warsop, III will continue as Chairman and will assume the role of President and Chief Executive Officer for York. Warsop joined the company as Chairman of the Board in June 2017 as a champion of transformational change and to help York’s leadership accelerate its value creation through operational excellence.

on delivering greater value to them through integrated and customized risk solutions to accomplish our mission of reducing risk and getting people and organizations back to health, work and productivity. We are equally focused on continuing to build our collaborative culture for our global team and our technical infrastructure enabling our datadriven process, to continue predicting tomorrow’s risk.”

“York is a great organization with wonderful people and clients. I know York will continue Thomas W. Warsop to grow under Tom’s leadership, alongside the many dedicated people at York,” said Rick “I want to thank Rick for his critical Taketa. contributions to York over the last 14 years. He will be missed,” Warsop joined York after having said Warsop. “It’s an exciting time served as CEO of The Warranty at York as we position ourselves Group for almost five years where to better serve our clients as the he championed and oversaw a leading risk solutions provider. complete technology and business Our clients are the center of our process transformation. Prior to The business model and we’re focused Warranty Group, Warsop was Group www.chart-exchange.com

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Vice President of Fiserv, one of the world’s largest financial service technology solution providers, as well as a senior executive at Electronic Data Systems Corporation (EDS), where, over an 18-year career, he progressed from the financial development program to the global leader of the financial services business. ABOUT YORK RISK SERVICES GROUP The leading risk solutions provider, we serve corporations, the insurance industry and public entities to reduce risk and drive high-quality outcomes. For more than 55 years, York has been delivering results our clients can see and feel. We do this by offering integrated and customized solutions including risk management, claims administration, managed care and absence management. With our data-driven and compassionate approach, we deliver on our mission of reducing risk and getting people and organizations back to health, work and productivity. York is headquartered in Jersey City, New Jersey. You can learn more at yorkrsg.com. AUGUST 2018

Analysis - Vantage Agora

UNDERSTANDING DIGITAL ENGAGEMENT NECESSITIES IN PROPERTY/CASUALTY INSURANCE By Abhijeet Jhaveri is

A A

BOUT THE AUTHOR: Abhijeet Jhaveri is

Chief Marketing Officer at ValueMomentum and leads ValueMomentum’s

Celent report on distribution management reports that insurance companies are expanding channels, adding distributors, moving into new territories, and working to optimize their existing channel in order to improve customer acquisition and retention. How can an insurer retain insureds in the digital age? The question can be attributed to big tectonic shifts occurring in virtually all industries, and particularly in the P/C insurance industry.

emerging on the scene. Technology is also paving the way for new business models. The Internet of Things (IoT), Peer-to-peer insurance, Ondemand insurance are fueling new business models with new Insuretech companies emerging on the scene such as Metromile, Bunker, Slice Labs, Lemonade, Notion, amongst others. While not all of these are assured of success, massive funding in this space is driven by inefficiencies to be eliminated in the distribution process and new markets to win. And all of these ventures are adopting a “digital first” approach.

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

Understanding Digital Engagement – Step One in The Property & Casualty Insurer’s Journey to Navigate in the Digital Age.jpegDistribution channels are changing and new innovative business models are emerging – evidenced by billions of dollars of funding from not only traditional venture funds, but also by the venture arms of large global insurance carriers. Digital agencies such as The Zebra, Hippo, Bold Penguin, EverQuote, Coverhound, Coverwallet, Embroker, Insureon amonst a host of others are

processing Solution.

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The impact of digital is getting bigger and consequently, there are major shifts underway that make it necessary for insurers to adapt. Failing to embrace the opportunities presented by digital and not moving fast enough, is a risky proposition. Take for example, Blockbuster Video – which failed to heed the challenge from Netflix with streaming video – and filed for bankruptcy. There are other cautionary tales such as

See Digital Engagement Page 44

www.chart-exchange.com

Analysis - Wilson Elser Continued From Page 19

MEDICAL MARIJUANA: A TEACHABLE MOMENT required the Pennsylvania Department of Education (DOE) to promulgate regulations by October 16, 2017, regarding the possession of medical marijuana by a student or a teacher on the grounds of a preschool, primary school or secondary school. As of March 8, 2018, a search of DOE’s website does not disclose any such regulations. In fact, the only link generally discussing cannabis, the “Marijuana Talk Kit” (which promises to give parents tools to engage their children in an “ongoing discussion about the risks of drug and alcohol abuse”), leads to a nonfunctioning page of the “Partnership for Drug-Free Kids.” The DOE’s failure to promulgate regulations cannot be dismissed as mere bureaucratic oversight. Pennsylvania dispensaries first began distributing medical marijuana to patients in February 2018. In immediate response to high-prices and product scarcity, the Pennsylvania Department of Health (DOH) held hearings and www.chart-exchange.com

indicated that it may be amendable to making leaf and flower cannabis available in order to reduce costs and increase patient access.

The DOE has failed its statutory mandate to provide guidance to students (and school employees) who are physician-certified and DOH-approved to receive medicinal cannabis.” This change in policy would require a change in the MML, which prohibits distribution of leaf or flower forms of marijuana. In addition, this change may be premature − only 1 of the 10 approved cannabis grower/ processors has delivered product to market. While prices are expected to drop and availability rise as other grower/processors start shipping to dispensaries, government hearings and statutory/regulatory changes have been proposed ahead of the curve. The DOE has failed its statutory mandate to provide guidance to students (and school employees) who are physician-certified and DOH-approved to receive medicinal cannabis. As the national conversation turns to giving teachers additional responsibility to maintain school security, Pennsylvania certainly should provide direction on maintaining student health.

TABLE OF CONTENTS

CHART DEFENDER COVERHOLDER E&O AVAILABLE NOW!

Mark Lann Phone:

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

AUGUST 2018

ANALYSIS - Fortegra

IN THE AGE OF ON-DEMAND VIDEO STREAMING, IS CABLE STILL RELEVANT?

In-home entertainment is changing. With on-demand video streaming services growing in popularity, what can cable companies do to remain relevant?

able companies are feeling the heat. As streaming services sweep the industry, it’s predicted that by 2021 81 million Americans, or 30 percent, won’t be using traditional paid TV. With those kinds of numbers on the horizon, how can cable companies adapt to survive? FRIENDS, NOT FOES

oger High is Vice President of New Markets at Fortegra where he leads strategic partnership development for the company’s warranty division, with an industry focus on cable and utility, OEMs, and emerging markets. A graduate of Miami University (OH), Roger previously served as National Sales Director at Fortegra subsidiary ProtectCELL, where he was responsible for building a sales organization that doubled revenue growth four years consecutively.

If you can’t beat ‘em, join ‘em. Instead of trying to compete against streaming options, cable companies should work to integrate these services into programming packages. Comcast, for example, is already on board. The cable giant has begun incorporating Netflix into its bundles for customers who use Comcast XI. The two companies found that 50 percent of Comcast customers also actively use Netflix through their bundled package. Not only did Comcast take advantage of what its users were watching, but they also allowed users to maintain their current service while adding the option to stream. It’s a great example of a company adjusting to industry trends and turning them in their favor. A BROADER BASE Data tells us that while older

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generations prefer cable, younger generations have been leaning on streaming services for their entertainment needs. In fact, Pew Research recently shared that sixin-10 U.S. adults ages 18-29 use online streaming instead of regular television. In contrast, 84 percent of adults 65 or older rely on cable or satellite as their main source of TV. By packaging cable and streaming into one, you can meet the needs of customers of any age. ADDITIONAL RESOURCES Packaging on-demand video streaming is one way to adapt, providing protection is another. Consumer electronics warranties can also be tied into cable packages to help increase customer retention while tapping into new revenue for your business. When you alone can bring everything customers need to the table, it goes a long way to build loyalty and put your business ahead of the competition. These are just a few methods by which cable companies can enhance the customer experience and remain relevant as the industry changes. For more insight, check out the Fortegra blog! www.chart-exchange.com

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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.

Analysis - fortegra

LLOYD’S LAUNCHES NEW DIGITAL DISTRIBUTION PLATFORM – LLOYD’S BRIDGE

loyd’s Bridge is an online platform that matches insurance businesses with underwriters from the Lloyd’s market, enabling these businesses to underwrite certain policies on behalf of Lloyd’s as Lloyd’s coverholders*. The pilot programme will initially be available in the UK, Australia and New Zealand. Access will be extended to more markets throughout 2019 as part of a global roll out. Lloyd’s is committed to continuing to grow through the broker distribution channel, with brokers having access to the platform if they act as a coverholder or are acting on behalf of a coverholder.

Already this year Lloyd’s has decided to mandate the use of electronic placement with 80% of Lloyd’s, the world’s business to be placed electronically specialist insurance and by the end of next year. Lloyd’s also announced the establishment of a new reinsurance market, has innovation accelerator, the Lloyd’s Lab, launched a new digital and launched a global recruitment drive for top tech talent. distribution platform –

Lloyd’s Bridge – designed to quickly, easily and efficiently connect insurance businesses and entrepreneurs with Lloyd’s underwriters.”

Bruce Carnegie-Brown, Chairman of Lloyd’s, said: “All over the world Lloyd’s has an enviable reputation as the leading insurance marketplace and it remains the most sought after destination for insurance solutions. In an age of digital disruption, however, our partners in both established and fast growth markets are increasingly looking for new ways to access our market. “Lloyd’s Bridge offers the ideal platform to do this quickly, easily and efficiently. It will enable coverholders in different parts of the world to benefit from easier access to Lloyd’s expertise, underwriting talent, significant capacity and financial security.” Lloyd’s Bridge is the latest in a series of moves to use

AUGUST 2018

technology to create opportunities for Lloyd’s to provide even better customer service, enhance underwriting decisions and make operations more efficient.

Lloyd's also has plans to launch a new underwriting portal that will enable coverholders to quote, underwrite risks and issue policies on behalf of Lloyd’s syndicates. More details will be confirmed on this initiative in due course.

Vincent Vandendael, Lloyd’s Chief Commercial Officer, added: “Lloyd’s is the leading global insurance market and it has doubled in size since 2000. We know that more and more business is being placed locally. Currently, around 30% of Lloyd’s premium is placed through coverholders – local insurance business writing policies on behalf of Lloyd’s – and we are keen to continue to invest in this way of doing business. “As we continue to grow and expand our international business we are committed to enhancing the service and access we provide to our customers’ changing needs. By providing coverholders with quick and easy access to our market, Lloyd’s Bridge will transform how we do business at Lloyd’s.”

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www.chart-exchange.com

News - York

YORK EXPANDS IN NEW MARKETS WITH KEY RISK MANAGEMENT SERVICES BUSINESS UNIT ACQUISITION

ork Risk Services Group (York), a global risk solutions provider, has acquired the third-party administration business of Key Risk Management Services, LLC (KRMS), a Berkley company.

we deliver on our mission of reducing risk and getting people and organizations back to health, work and productivity. York is headquartered in Jersey City, New Jersey. You can learn more at yorkrsg.com.

With more than 55 years of claims administration and diverse risk management expertise, York will offer KRMS’ current clients a more holistic approach while providing the same commitment to quality and service they have come to know and expect from KRMS. “We are committed to growing in ways that align with our business strategy, creating opportunities to strengthen our capabilities and better serve our audiences”, said Thomas W. Warsop, III, Chairman of York. “The KRMS third-party administration business expands our offerings in new markets in the Mid-Atlantic and Southeast with the focus on integrated workers’ compensation. The joining of our teams provides a great opportunity to leverage the strengths of each organization and enhance the solutions we provide our clients.” About York Risk Services Group For more than 55 years, York has delivered results our clients can see and feel. We serve corporations, the insurance industry and public entities to reduce risk and drive high-quality outcomes. We do this by offering integrated and customized risk solutions including claims administration, absence management, managed care and risk management. With our data-driven and compassionate approach, www.chart-exchange.com

Proud supporters of CHART

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

AtriumUw

www.atrium-uw.com

Atrium Underwriters Ltd

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AUGUST 2018

special report - Kroll Continued From Page 16

REDUCING AND REMOVING INVOLVEMENT IN MODERN SLAVERY Businesses looking for best practices to aid their compliance with anti-slavery laws might logically turn to the riskbased approach developed over the years by organizations to comply with a wide variety of anti-money laundering, anti-bribery, and anti-corruption laws, such as the Bank Secrecy Act, U.S. Foreign Corrupt Practices Act, and the UK Bribery Act.

resolution of incidents. Continual training must also be provided to employees so they understand the exposure of the business to criminal activities. The requirements involve the implementation of better due diligence of third parties, robust procedures for onboarding third party relationships, contract management, compliance monitoring, and risk dashboards.

This kind of risk-based approach requires the implementation of proper internal controls capable of ongoing monitoring, reporting, and

In practice, though, such internal controls require heavy investment, one that most businesses have not historically been willing to make in

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relation to risks associated with modern slavery and human exploitation in their supply chains. However, in light of the growing regulatory focus on the issue, the risk-based framework will not only aid companies in protecting shareholder value by limiting their risks and liabilities, it will also help management make better overall business decisions. Ultimately, with or without robust procedures, better decision-making will only occur if individuals and teams are supported by increasingly richer intelligence resources and have access to quality information, whether from “big data,” open source intelligence analysts, or information directly from the ground. At present, the development and distribution of actionable intelligence available to industry on modern slavery activities is nascent, but the need of it has never been clearer, and efforts are progressing rapidly. Society’s commitment to anti-trafficking and

www.chart-exchange.com

special report - KROLL ensure purchasing, investment, and business strategy decisions avoid and prevent liability and not just aim to fix a problem retrospectively. REFERENCES 1 http://www. aoinvestigationsinsight.com/ the-criminal-finances-act/ 2 http://news.trust.org/ item/20160224232745-ks4et/ ABOUT KROLL

eliminating modern slavery has never been greater, and that is starting to generate powerful information and intelligence in the forms of basic case studies, thorough typologies, and victim statements around a nascent but increasingly robust legal and regulatory framework. The advent of new legislation worldwide, the developing collaboration of civil society on sharing information, and increasing attention and application by financial institutions of their risk control teams to this problem should be clear indicators to many other industries that more will be needed than a confidential audit. While the current disclosure requirements

www.chart-exchange.com

are soft, as more incidences of modern slavery and exploitation come to light, governments will likely push companies toward a regime of more accurate and complete disclosure, requiring consistent and reliable internal controls. Additionally, one-off confidential audits will be less potent as intelligence and information is being increasingly gathered and shared by activists, law enforcement, and industry service providers. Finally, as the current ethical duty evolves to become a criminal liability and regulatory obligation, there will be an urgency to understand third party relationships from a risk perspective to

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Kroll is the leading global provider of risk solutions. For more than 40 years, Kroll has help ed clients make confident risk management decisions about people, assets, operations and security through a wide range of investigations, cyber security, due diligence and compliance, physical and operational security and data and information management services. Headquartered in New York with more than 35 offices in 20 countries, Kroll has a multidisciplinary team of nearly 1,000Â employees and serves a global clientele of law firms, financial institutions, corporations, non-profit institutions, government agencies and individuals. ABOUT LIBERTY ASIA Liberty Asia aims to prevent human trafficking through legal advocacy, technological interventions, and strategic collaborations with NGOs, corporations, and financial institutions in Southeast Asia.

AUGUST 2018

news

INSURERS MUST RETHINK TRADITIONAL COVERAGE TO CREATE SOLUTIONS FOR SHARING ECONOMY Consumer survey shows sharing is widespread, but tremendous growth opportunity still exists.

Potential for double digit increases in the percentage of the population willing to share services or assets. New research from Lloyd’s and Deloitte systematically analysed the sharing economy with the aim to understand where insurance can support growth and opportunity in this booming sector. The study

While more than one in four people across the six countries surveyed has been a consumer of shared goods or services, the penetration rates differ considerably by country yielding notable geographic insights:

In the US, the birthplace of the sharing economy, sharing is less study of six key markets widespread than it is in China and – China, United Arab the UAE. Emirates China is the stand-out (UAE), Insurers are still in the very market for shared goods Germany, France, UK, and services. Almost early stages of developing and US – reveals more three quarters (73%) of the dynamic and flexible solutions this than a quarter of the the online population are sectors needs as it continues to evolve consumers and just over population has either bought services or at pace. The opportunity for sharing half (55%) supply goods rented possessions and services to it – more economy companies and insurers to from their peers via than double the figures partner to reduce risk in this space shared platforms in the reported for the US and past three years. European markets. has real implications and exciting

opportunities for future growth.”

Approximately 500 million people share assets or services across these six key markets, and close to 680 million people make use of them.

57% of adults who have sold services or lent products in the sharing economy in the past three years were insured by transactionembedded or personally owned cover.

AUGUST 2018

focuses on the peer-to-peer model and specifically the services, real estate and finance sectors. Squaring risk in the sharing age How the collaborative economy is reshaping insurance products calls attention to the role of the insurance industry in supporting shared platforms as they grow and develop.

The UK has the lowest sharing economy participation levels on both the supply and demand sides. Less than one in ten (9%) have shared in the past three years, which is ten percentage points less than European neighbour Germany.

See Rethink Traditional Coverage Page 38

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www.chart-exchange.com

Analysis - SIAA

AUTOMOBILE INSUR ANCE: A LOOK AT WHERE TECHNOLOGY IS TAKING INSUR ANCE AGENTS “Reprinted by permission of The Standard, New England’s Insurance Newsmagazine © 2018.” by Matt Masiello, Executive Vice President and COO of SIAA.

nnovative technology is a moving target that will impact the independent insurance industry for as long as the industry exists. Mobile technology, the Internet of Things, artificial intelligence, drones, technologically advanced automobiles, big data and analytics come into play for the insurance industry frequently. So, how can independent agents prepare their businesses as new technology is unveiled nearly every day? Let’s look at some examples in the auto

industry. This industry is being disrupted by technology constantlyfrom how people drive their cars to ride sharing. Ride sharing encourages people to use transportation without owning a car, or share their car with someone else to reduce costs. These technological advancements have spawned changes in the auto insurance industry allowing policyholders to buy short-term auto insurance, among other things. Traditional types of auto insurance are expanding. Telematics are being installed into new cars across the globe, transforming the cars into computers on wheels that collect driver safety information. Statista reports that 80 percent of vehicles in

North America will be equipped with telematics by the original manufacturer as of 2020. Telematics data can help insurers rate risk more accurately, and better determine insurance premium pricing. Telematics and usage-based insurance (UBI) translate data-driven

See Auto Insurance Tech Page 43

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.

www.chart-exchange.com

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News

Creative Commons Attribution-Share Alike 4.0 International license

Continued From Page 36

RETHINK TRADITIONAL COVERAGE Lloyd’s Head of Innovation, Trevor Maynard, said, “Sharing economy platforms have transformed entire industries because they’ve rejected the status quo and challenged the way we think about once traditional goods and services. In order to effectively serve the sharing economy, we as insurers must follow that example and rethink traditional

insurance products." The report highlights that transacting in the sharing economy is not without risk and adequate protection for all parties means insurers must continue working to adapt traditional coverages to fit the unique needs of this sector, whether it’s solutions provided by platforms via transaction-

AUGUST 2018

embedded cover, or a product purchased independently by sharing economy participants. A range of insurance products currently offered cover potential risks such as losing a possession, facing liability or suffering damage, among others. Despite these risks, the positive experiences and benefits provided by the sharing economy, mean that it continues to grow and diversify. The opportunity for sharing economy platforms and the insurance industry to work together is clear. Nigel Walsh, partner in Deloitte Digital said: “In our market scanning, we’re not only seeing an increasing number of sharing economy platforms provide insurance to their users, including bespoke (made to order) products through the Lloyd’s market, but also a large number of startups helping to solve the insurance gap for all participants in the sharing economy. Equally, insurers are still in the very early stages of developing the dynamic and flexible solutions this sectors needs as it continues to evolve at pace. The opportunity for sharing economy companies and insurers to partner to reduce risk in this space has real implications and exciting opportunities for future growth.” 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.

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NOW HERE’S A REAL SHOCK… The first 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

www.chart-exchange.com

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

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AUGUST 2018

FORESTRY WORLDWIDE FORESTRY (RE)INSURANCE FACILITY Pardus was established in 2013 by Keith Thompson, formally CEO of Advent capital Holdings Ltd and Darren Stockman Active Underwriter of Syndicate 780 and Director of Advent Underwriting Ltd. Pardus are an independent Managing General Underwriter, a Lloyd’s approved Coverholder, and an appointed representative of Capita Commercial Insurances Limited.

Cover

Maximum line of USD 8.5M any one risk, any one location. Capacity provided by Lloyd’s of London and “A-” rated company paper. Perils covered mainly Fire and Windstorm, but we can offer additional coverage for hail, ice, snow, frost. We cannot cover Pest and Disease, although we can offer cover under a small sublimit for Pest and Disease treatment costs. Sublimits available for fire-fighting costs, aerial photography, debris removal, claims preparation costs etc.

Frost

Hail

Snow & Ice Storm

Flood

PERILS COVERED Rainfall Deficiency

Fire

Malicious Damage

Windstorm

Business Interruption is offered when fruiting trees are destroyed by covered physical damage perils, leading to a loss of yield while the new trees develop •

We have specialist Pardus facilities in place to cover Public Liability (in Europe) and associated forestry Plant and Machinery risks

OUR TAILORED PRODUCTS

Full Value and Value at Risk

Full Value works in the traditional way with insurer retaining any salvageable value from the insured property. Value at Risk leaves an agreed salvage (based on salvage scales developed by Pardus using age and species data) in the ownership of the client. Pardus then only insure the non-salvage element meaning the final rate will be applied to a fraction of the TSI generating a lower overall cost to the client.

Target business: •

We are keen to see any enquiry for standing timber commercial planation forestry

• •

Information requirements for quote: •

Perils to be insured against

•

Schedule of forest locations by values, age, species

Forestry risks with accreditation from the Forestry Stewardship

Locational information needs to be provided in either

Council (or similar)

shape file format (.kmz) or the latitude/longitude

Forest Owners comprise:

coordinates of the centre point of each location

Individual investors

•

5-10-year ground-up loss experience by peril

Commercial Plantation Companies

•

Desired policy structure:

Individual Forest Owners

Timberland and Investment Management Organisations

(TIMO’s)

•

Additional features: -

Forest Management Organisations (FMO’s)

Real Estate Investment Trusts (REIT’s)

Banks loans made to forest owners or fruit tree owners

Forest Owner Associations

Deductibles, limit etc Firefighting costs, claims preparation, aerial photography, plantation infrastructure

To download our full forestry questionnaire, please visit our website https://pardusunderwriting.com/products/forestry/

Exclusions

Property

Buildings

Terrorism

Pest and Disease

Drought

Crop

Fruits, Nuts etc

Phil Cottle - Senior Agricultural Underwriter Direct +44 (0)203 735 1608 Mobile +44 (0)7769 895048 phil.cottle@pardusunderwriting.com Dan Longden Cert CII - Underwriting Assistant

Direct +44 (0)203 735 1610 Mobile +44 (0)7756 961500 daniel.longden@pardusunderwriting.com

Pardus Underwriting Ltd. 1st Floor, 3 Lloyd’s Avenue, London, EC3N 3DS www.pardusunderwriting.com

“We have access to a worldwide forestry binding authority covering the physical damage to commercial forestry. There is a maximum line of USD 8,500,000 any one risk, any one location and the covered perils can be found on this flyer. This is written 100% Lloyd’s/company market and Prospect are the Insurance broker”

News Continued From Page 9

LLOYD’S NEWS ROUNDUP with underwriters from the Lloyd’s market, enabling these businesses to underwrite certain policies on behalf of Lloyd’s as Lloyd’s coverholders. The pilot programme will initially be available in the UK, Australia and New Zealand. Access will be extended to more markets throughout 2019 as part of a global roll out. Lloyd’s is committed to continuing to grow through the broker distribution channel, with brokers having access to the platform if they act as a coverholder or are acting on behalf of a coverholder. Bruce Carnegie-Brown, Chairman of Lloyd’s, said, “All over the world Lloyd’s has an enviable reputation as the leading insurance marketplace and it remains the most sought after destination for insurance solutions. In an age of digital disruption, however, our partners in both established and fast growth markets are increasingly looking for new ways to access our market. “Lloyd’s Bridge offers the ideal platform to do this quickly, easily and efficiently. It will enable coverholders in different parts of the world to benefit from easier access to Lloyd’s

AUGUST 2018

expertise, underwriting talent, significant capacity and financial security.” Lloyd’s Bridge is the latest in a series of moves to use technology to create opportunities for Lloyd’s to provide even better customer service, enhance underwriting decisions and make operations more efficient. Already this year Lloyd’s has decided to mandate the use of electronic placement with 80% of business to be placed electronically by the end of next year. Lloyd’s also announced the establishment of a new innovation accelerator, the Lloyd’s Lab, and launched a global recruitment drive for top tech talent. Lloyd’s also has plans to launch a new underwriting portal that will enable coverholders to quote, underwrite risks and issue policies on behalf of Lloyd’s syndicates. More details will be confirmed on this initiative in due course. Vincent Vandendael, Lloyd’s Chief Commercial Officer, added, “Lloyd’s is the leading global insurance market and it has doubled in size since 2000. We know that more and more business is being placed locally. Currently, around 30% of Lloyd’s premium is placed through coverholders – local insurance business writing policies on behalf of Lloyd’s – and we are keen to continue to invest in this way of doing business.

Continued From Page 15

INDUSTRY WATCHES FOR IMPACTS OF NEW FEDERAL LEGISLATION The reform also contains an international insurance regulation section. Now, watchers and experts are exploring whether the new bill will impact the day to day of insurance services and industry processes at the level of the many agents and brokers that sell a range of insurance products and policies. We know we’ll be keeping an eye on the upcoming developments. As your leading insurance services provider, we’ll be staying on top of all new developments and regulations to provide you with the information and support you need. You can visit COST Financial Services online here to learn more about us, our products, and what we can do for you.

See Lloyd’s News Roundup Page 46 TABLE OF CONTENTS

www.chart-exchange.com

Analysis - Siaa Continued From Page 37

AUTO INSURANCE TECH habits of drivers into premium discounts for the safest drivers, and rate hikes for the riskiest. As drivers adapt to telematics, they will either conform to safety standards and save money, or pay more for their behavior. Ride sharing companies like Uber and Lyft are also changing the marketplace. From an insurance perspective, the owners of private vehicles who are driving for Uber and Lyft need more coverage than just for the primary owner. As you can see, a longer menu of products is needed for auto insurance clients of the future. As people take advantage of these innovative ways to get around, insurance agents will have to understand the additional risks for their clients and offer a range of flexible policies that meet their needs. The auto insurance industry in Europe is experiencing these changes as well. For example, customers there can now purchase pay-as-you-go insurance by the hour if they are borrowing a friend’s car or taking a Lyft or Uber. For these customers, this option works out to be more cost-effective than owning a car and paying for insurance in a large city. www.chart-exchange.com

Another option technology has introduced that’s changing the auto insurance industry is the smart car. Whether electric or hybrid, they are more fuel efficient, environmentally responsible, and easy to park in small spaces. Smart cars carry a lower replacement cost than larger cars with more bells and whistles. In response, insurers have had to offer policies with lower insurance premiums. And then there is another class of “smart cars” on the way, which, in the future, will be highly automated, and maneuver autonomously, having the ability to see around corners and know their 360-degree environment within “Smart Cities”. For these self-driving cars, insurance options continue to be the subject of much discussion. With the growing desire to have a car on demand, automakers like Volvo, Ford, and Cadillac, among other brands, are now offering car subscription programs from 12-24 months in larger markets. Subscriptions bundle the monthly payment together with insurance, maintenance and replacement of parts that wear out. For example, Volvo Momentum starts at $600 per month for 24 months and is available nationally. According to a recent CB Insights article, “The emergence of new car subscriptions could have a significant impact on the P&C insurance industry depending on the longer-term adoption and scale of such programs.” In an in-depth study about the future of the mobility ecosystem, Deloitte Insights report that driver-driven TABLE OF CONTENTS

shared and autonomous vehicles will require new forms of liability coverage. “Shared mobility and autonomous vehicles introduce new stakeholders that will need the protection of auto insurance but do not conform to today’s auto insurance model.” The article also states that, “These models of mobility create the opportunity— and need—to unbundle today’s all-in-one, vehicle-centric policy that predominates and provide coverage specific to the unique needs of stakeholders in [the future].” With all the changes afoot, the auto insurance market will be quite dynamic, and companies, as well as agents, will have to think strategically to create and provide the coverage motorists will need. Consider this: according to Accenture, autonomous car insurance will generate over $80 billion in new revenues nationally from 2020 to 2025. The new trends will lead to fewer privately-owned cars being insured, and more shared driver-driven cars, along with some privately-owned autonomous cars and more shared autonomous cars being insured. Insurers – and the independent agent – will have no choice, but to innovate in order to stay in the game. With the ability to offer competitive rates from multiple insurance carriers, independent agents will have the upper hand in this sector. Understanding and embracing the wave of new technology is not only smart, it’s the only way forward.

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DIGITAL ENGAGEMENT IN THE P&C INSURANCE INDUSTRY Blockbuster, who became irrelevant even though they commanded dominating positions in the marketplace.

CREATING VALUE AT THE NEW FRONTIERS OF BUSINESS

Insurers can help their end customers benefit from preventive maintenance – for example smart buildings are expected to bring down risk of loss. Sensors in jet engines are jumping from 250 to 5000 resulting in the ability to benefit from predictive maintenance. Similarly, monitoring weather, animal health, changes in soil, can help in taking timely action and reducing losses.

However, to view these digital enablers, with a lens of cost saving or loss prevention, would be shortsighted. There are many other So how are property & casualty benefits including the ability to insurance carriers positioned to respond to these business To survive and thrive in the digital increase “stickiness” with your insureds and even generating drivers, and survive and age, property & casualty insurance new revenue streams. Such thrive as they have done in carriers must embrace the opportunities opportunities include: the face of similar tectonic fueled by digital. Responding to this shifts over the past decades changing landscape requires thinking • Better risk management and and centuries? The first about adding value in the frontiers of incentivizing insureds for the step is to understand your business, in designing your systems same what digital truly means. and processes to deliver delightful agent • Better customer segmentation According to McKinsey, for and customer experiences and instituting made possible by availing of some, it’s about technology. foundational capabilities. There are many rich behavioral data For others, digital is a new choices available for the latter – ranging • Better customer engagement way of engaging with by shifting from a “grudge buy” customers. And for others from vended solutions to do-it-yourself still, it represents an entirely approaches. Time is of essence, though as to enabling them to helping new way of doing business. the pace of change is rapid and presents protect their assets Consumers are making digital part of their daily lives and their daily experiences – accessing almost infinite information in their palms via

McKinsey helps define both – tremendous opportunities and also These examples suggest that digital as encompassing significant risk to becoming obsolete!” insurers can embrace digital three attributes: creating to provide higher value to value at the new frontiers of mobile phones or in their cars, homes their customers. Property & Casualty the business world, creating value in and places of work. Smart devices or insurance carriers already have some the processes that execute a vision of apps on your phone help individuals of this data and when combined with customer experiences, and building and businesses monitor their assets new digital capabilities such as IoT foundational capabilities that support – for example the NEST device which and data analytics, they are uniquely the entire structure. Let’s take a look can control your home temperature positioned to achieve their growth at each. remotely and also alert you in case of and retention goals. hazards like fires.

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News BUILDING FOUNDATIONAL DIGITAL CAPABILITIES According to McKinsey, the final attribute of digital involves the technological and organizational processes that allow you to be agile and fast. Such a foundation, according to McKinsey, involves two elements - mindsets and systems architecture. McKinsey advises that digital is all about making better and faster decisions, and developing iterative and rapid ways of doing things. For instance, insurers may minimize manual processes by enabling agents and/ The visual above shows the big picture on how today's complex digital landscape or customers to engage fits together for product development, marketing, sales, CRM, and line of business. throughout their buying and CREATING VALUE IN CORE journeys and demand the same servicing journey through an agent BUSINESSES from the insurers they partner with. portal or customer portal that enable No longer is it sufficient to provide them to fulfill their work in as few According to McKinsey, embracing prompt quotes during business keystrokes as possible by pre-filling digital also involves rethinking hours. data from third party providers, while how to use new capabilities to guiding them every step of the way. improve how customers are served. The agents today, are always In another iteration, insurers may roll This is grounded in an obsession connected and may research where out capabilities that help their end with understanding each step of a to place their business at anytime customers manage their risks and customer’s purchasing journey— from any device. And they want to be assets through new data capabilities. regardless of channel—and thinking guided on the products you offer, not about how digital capabilities can be knowledgeable on these products Establishing foundational capabilities design and deliver the best possible by reading your marketing literature also involves putting in place a experience, across all parts of the in a static website! They expect you systems and data architecture. Such business. Let’s juxtapose this to the to support the process for winning an architecture, involves creating desire to attract and retain not just new business and servicing existing a two-part environment that top producers, but also the new business in the most efficient way, decouples systems which support generation of producers. These without having to spend their time critical functions and run at a slower constituents simply won’t stand for keying in data in multiple systems. pace, from those that support fastthe challenges presented by manual And this applies to the end insureds processes. They are accustomed to, moving, often customer-facing as well as insurers’ own employees! in their daily lives, getting instant gratification throughout their See Digital Engagement Page 48 www.chart-exchange.com

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LLOYD’S NEWS ROUNDUP “As we continue to grow and expand our international business we are committed to enhancing the service and access we provide to our customers’ changing needs. By providing coverholders with quick and easy access to our market, Lloyd’s Bridge will transform how we do business at Lloyd’s.” INSURERS MUST RETHINK TRADITIONAL COVERAGE TO CREATE SOLUTIONS FOR SHARING ECONOMY Consumer survey shows sharing is widespread, but tremendous growth opportunity still exists. A study of six key markets – China, United Arab Emirates (UAE), Germany, France, UK, and US – reveals more than a quarter of the population has either bought services or rented possessions from their peers via shared platforms in the past three years. Approximately 500 million people share assets or services across these six key markets, and close to 680 million people make use of them. 57% of adults who have sold services or lent products in the sharing economy in the past three years were

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insured by transaction-embedded or personally owned cover. Potential for double digit increases in the percentage of the population willing to share services or assets. New research from Lloyd’s and Deloitte systematically analysed the sharing economy with the aim to understand where insurance can support growth and opportunity in this booming sector. The study focuses on the peer-to-peer model and specifically the services, real estate and finance sectors. The report highlights that transacting in the sharing economy is not without risk and adequate protection for all parties means insurers must continue working to adapt traditional coverages to fit the unique needs of this sector, whether it’s solutions provided by platforms via transactionembedded cover, or a product purchased independently by sharing economy participants. A range of insurance products currently offered cover potential risks such as losing a possession, facing liability or suffering damage, among others. Despite these risks, the positive experiences and benefits provided by the sharing economy, mean that it continues to grow and diversify. The opportunity for sharing economy platforms and the insurance industry to work together is clear. LLOYD’S HOSTS LAUNCH OF INDUSTRY-WIDE INCLUSIVE BEHAVIOURS PLEDGE INITIATIVE In July, CEO Inga Beale hosted TABLE OF CONTENTS

the launch event for the Inclusive Behaviours Pledge, an industry-wide initiative to demonstrate the insurance profession’s unwavering commitment to transforming its culture. Lloyd’s is a founding signatory, alongside 49 other insurance firms and trade bodies, including Zurich, Aviva, RSA, AXA, Willis Towers Watson, Marsh, the British Insurance Brokers Association, the Association of British Insurers, the Lloyd’s Market Association and the London & International Insurance Brokers’ Association. Signing up to the Pledge means agreeing to change and tackle negative and inappropriate behaviours and promote and encourage the right, desired behaviours in the workplace. Pledging also commits CEOs to taking action within their own organisations if their employees are not treated with dignity at work. The Pledge is a public commitment to reinforce the promise to do this, and builds on the sector’s well-established work and initiatives driving greater inclusion across the profession, including the global Dive In Festival, now in its fourth year. All forms of discrimination will be tackled, whether on the grounds of age, disability, gender reassignment, marriage/civil partnerships, pregnancy/maternity, family and caring responsibilities, race, religion/ belief, gender or sexual orientation. The Pledge sets out a clear framework of desired behaviours for leaders and employees in the workplace, as well as www.chart-exchange.com

News in their interactions with suppliers and customers. A dedicated website, www. inclusiveinsurancepledge.co.uk has been launched, where organisations can read about the Pledge and sign up online. The site provides signatories with an ‘Inclusive Behaviours toolkit’, designed to help firms embed and enforce the Pledge across their organisations.

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AUTO INSURANCE TECH Soon, insurance carriers will be able to gather and use data and share that information with independent agents. New ways to measure, control, and price automobile risk will expand options in the auto insurance market for policyholders and their agents. FOUR STEPS TO KEEPING UP WITH IT ALL 1. Independent agents can keep up with technology by investing in their own office technology, and keep it on the cutting edge to increase efficiency. According to Pew Research, Millennials are projected to overtake Baby Boomers as America’s largest www.chart-exchange.com

generation by 2019. Millennials and their use of technology has vastly changed the face of insurance. The more digitally responsive the agent’s office is, the more it will attract the millennial client. 2. Offering traditional and usagebased auto insurance for clients will increase business for the independent agent– cater to those who want to drive the old-fashioned way, as well as those who live in the city and are beginning to use ride-sharing technology. Agents will need to understand their clients - get to know their preferences and provide more individualized products to suit their needs. 3. Following the autonomous market closely will enable agents to offer the correct insurance products to their clients. Still in question is how much insurance is needed by the car manufacturer, the car owner, and the occupant. 4. Agents should keep on top of technological advances and know how their insurance carrier partners are using the new data to develop new products. Agents should be transparent with their clientele about industry trends so they can provide the best coverage and be a vital resource when the new products come to market. Some may find technology a burden but, if approached correctly, it can be a boon to the insurance sector. It is not just coming down the pike, it is here. Either embrace it and get engaged, or get out of the way

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Continued From Page 45

DIGITAL ENGAGEMENT IN THE P&C INSURANCE INDUSTRY interactions. Agent portals, customer portals and related apps that engage customers, agents and other stakeholders accomplish the fastmoving customer facing interactions, while administration systems – or systems of record, address the more critical functions that require rigor in evolving them. According to a Celent report, digital engagement facilitated by agent portals and/or customer portals are a top priority for insurers in their quest for growth and operational efficiency. Although portals are not a new concept, the requirements have changed. Here are some of the reasons: •

•

Attract and retain top producers and a new generation of producers who will not stand for legacy operational inefficiencies Have a slick user interface that is intuitive, easy to use and requires little or no training Have self service capabilities for agents and insureds for policy life cycle transactions Integrates easily to multiple backAUGUST 2018

• • •

end systems Connects real time between agents and insurers Provides an omni-channel experience Creates value that is compelling such that the insurer becomes a market of choice by providing significantly higher value

In summary, to survive and thrive in the digital age, property & casualty insurance carriers must embrace the opportunities fueled by digital. Responding to this changing landscape requires thinking about adding value in the frontiers of your business, in designing your systems and processes to deliver delightful agent and customer experiences and instituting foundational capabilities. There are many choices available for the latter – ranging from vended solutions to do-it-yourself approaches. Time is of essence, though as the pace of change is rapid and presents both – tremendous opportunities and also significant risk to becoming obsolete!

CHART DEFENDER COVERHOLDER E&O AVAILABLE NOW!

Mark Lann Phone:

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

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