The CHART Exchange October 2018 by The CHART Exchange

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

How Insurance Consulting Can Benefit Your Business

SPECIAL REPORT: Crime vs. Ethics Changing Corporate Culture To Reduce Modern Slavery

Why State MarijuanaImpaired Driving Laws Need Reform

Lloyd’s Returns To Profit For The First Half Of 2018

John Neal Appointed As Lloyd’s CEO

York Appoints Colleen Rooney As Senior Vice President, Public Entity Sales

Valuemomentum And Smart Communications Announce Partnership

Lloyd’s Lab Opens Its Doors To Tech Disruption

How Diminished Value Warranties Can Make Or Break Your Customer Experience

Lloyd’s Delegated Authorities: How CHART Can Help You

Lloyd’s News Roundup - A Compilation Of Current Lloyd’s-Centric News

Duff & Phelps Acquires Kroll From Corporate Risk Holdings

Consumers Are Driving Auto Trends: Here’s How The Industry Is Responding

SIAA Announces Strategic Partnership With Burns & Wilcox

SIAA Promotes Tombarelli & Holmes, Expands Their Roles

Cover Photo - Lloyd’s of London by William Warby Attribution 2.0 Generic (CC BY 2.0)

SPECIAL REPORT: PG 16 CRIME VS. ETHICS CHANGING CORPORATE CULTURE TO REDUCE MODERN SLAVERY

OCTOBER 2018 VOLUME 3 - ISSUE 9

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

DELEGATED AUTHORITIES Glenn W. Clark, CPCU Publisher & Earliest Adopter

OCTOBER 2018

n the previous issue of CHART Magazine, we introduced you to TOM – the Target Operating Model recently launched by the London Market. This ambitious project has several strategic aims, including improving administrative efficiencies, reducing operating costs, and making it easier to do business with the world’s most recognized insurance brand.

There are a number of facets within the TOM project. In 2016 the Steering Board identified four initiatives that would receive high priority: • • • •

Placing Platform Ltd (PPL) Central Services Refresh Programme (CSRP) Delegated Authority (DA) Data Integration (DI) / Structured Data Capture (SDC)

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Our earlier article promised a more detailed discussion on each of these important topics. Let’s begin with a conversation on Delegated Authority. This initiative was designed to address inconsistencies and inefficiencies in the information being provided by agencies possessing underwriting authorities through London. Previously, these entities were asked to satisfy data requests from a number of different sources – their Broker, Syndicate Partners, Lloyd’s corporate, etc. Remember the famous quote from George Bernard Shaw about how the U.S. and the U.K. are two countries separated by a common language? Here’s proof of that observation’s accuracy. Without a standard set of data definitions, reporting requirements were often open to individual interpretation.

www.chart-exchange.com

This potential for error was also impacted by the London market’s rather unique insurance nomenclature – terminology not always understood domestically. The problems were only exacerbated once the data reached its intended destination. The information often had to be re-keyed into various legacy systems, resulting in a duplication of effort and an increased risk of entry error. The inefficient processing of data also delayed the timely transmission of reports and analytics to their intended destinations. The Delegated Authority-related TOM initiative is designed to address this situation. It requires a standard method of submitting information which is then uploaded on to a dashboard capable of automating the generation of reports and statistics. This technology will also foster consistency, increase efficiency, eliminate duplication, and reduce the need for re-keying. Domestic Coverholders (U.S.-based agencies with London binding authorities) will benefit as well; the submission of one report will satisfy a number of different data requirements.

www.chart-exchange.com

The CHART Exchange can assist agents comply with the latest TOM-related directives. Our team of Vendor Partners has the necessary expertise in a variety of different disciplines – systems, legal, regulatory, claims administration, actuarial, marketing, etc. They stand ready to help address any technological or processing deficiencies you may have. CHART can also help London Syndicates who have insurance offerings that were developed for the domestic U.S. market. Their advantages of an excellent coverage form, automated underwriting, London expertise, etc. are somewhat mitigated by an inability to fully execute efficiently in the U.S. It is both time-consuming and expensive to find just the right wholesaler partners willing to fully invest in a new product launch. It requires surplus lines licenses in order to “perfect” a Lloyd’s-underwritten sale in almost every state in the U.S. CHART MGA can be the solution. It is authorized to conduct business in all jurisdictions and has the systems capabilities needed to handle all of the necessary reporting requirements.

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Glenn W. Clark , CPCU CHART’S Earliest Adopter

OCTOBER 2018

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OCTOBER 2018

NEWS - LLOYD’S OF LONDON

LLOYD’S NEWS ROUNDUP OCTOBER 8, 2018

of Lloyd’s, said: “On behalf of the market, I am delighted to welcome ohn Neal has been John to Lloyd’s. His wealth of appointed as the Chief experience both at Lloyd’s and Executive Officer (CEO) of internationally, including the US, Lloyd’s following a meeting will bring new insights and fresh of the Council of Lloyd’s, where thinking at a challenging time for his appointment as successor the global insurance industry. to Inga Beale "John will was approved continue unanimously. Lloyd’s focus on delivering John will take sustainable up his position profitability, at Lloyd’s on 15 through a October 2018. combination of John’s whole underwriting career has been discipline associated with the and market Lloyd’s market, first modernisation. as an underwriter An immediate John Neal, Appointed Chief and later as CEO priority will be the Executive Officer (CEO) of of the Ensign Lloyd’s effective 10/15/18 successful launch Managing Agency. of Lloyd’s Brussels He was most recently Group subsidiary which will enable Lloyd’s CEO of QBE, a global insurance to continue serving its customers in and reinsurance business with a the European Economic Area after significant Lloyd’s footprint. Brexit.

In this role he was responsible for running a $14bn gross written premium (GWP) business with over 14,000 employees in 37 countries. He brings significant experience as a global CEO who has a track record as a highly effective leader who can deliver business transformation. Bruce Carnegie-Brown, Chairman www.chart-exchange.com

“I am grateful to Inga for the leadership she has provided to Lloyd’s over the past five years, during a challenging time for the market. She has driven the market’s modernisation programme, the success of which is evident not least in the recent rapid increase in electronic placement volumes and the launch of the Lloyd’s Lab.” TABLE OF CONTENTS

Commenting on his appointment, John added: “I am thrilled to be offered the opportunity to lead Lloyd’s, and will do so with the same excitement I felt when I first stepped into the underwriting room back in 1985. "The insurance sector is facing many challenges. For 330 years the Lloyd’s market has demonstrated its ability to innovate and adapt, and I look forward to playing my part to ensure this unique marketplace remains at the forefront of global commercial corporate and specialty insurance and reinsurance.” The appointment is subject to approval and consent from the Prudential Regulation Authority and the Financial Conduct Authority. Lloyd's of London heading for WeWork-style makeover Lloyd’s of London’s historic base on Lime Street, London, is heading for a radical makeover, with more focus on shared, collaborative spaces along the lines of a WeWork Cos. office, according to its outgoing chief. “Over the years to come, that place will look very different,

See Lloyd’s News Roundup Page 49 OCTOBER 2018

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NEWS - KROLL

DUFF & PHELPS ACQUIRES KROLL FROM CORPORATE RISK HOLDINGS

EW YORK - Duff & Phelps, the global advisor that enables clients to protect, restore and maximize value, today announced that it has signed a definitive agreement to acquire Kroll, the global leader in complex investigations, security and cyber solutions. Terms of the transaction were not disclosed.

Established in 1972, Kroll has an unparalleled record of helping clients manage compliance, navigate litigation and mitigate risk relating to fraud, impropriety and security threats. The transaction dramatically enhances the combined firm’s broad suite of services in the areas of valuation, corporate finance, compliance, investigations, security and cyber solutions. Kroll will also significantly expand Duff & Phelps’ global scale, most notably in Europe and Latin America. The www.chart-exchange.com

combined organization will have nearly 3,500 employees located in 28 countries around the world. Noah Gottdiener, Duff & Phelps Chief Executive Officer, said, “Bringing together these two world-class organizations will significantly expand our global scale, broaden our client offerings and create great opportunities for

our colleagues. Both firms share a common culture and heritage of putting clients first, and the combination will only strengthen this commitment. I welcome our new colleagues to Duff & Phelps and look forward to joining forces to build one great team.” David Fontaine, Kroll Chief Executive Officer, added, “Duff & Phelps and Kroll nicely complement one another. Both companies have a rich and timetested history of helping clients manage risk and make confident TABLE OF CONTENTS

choices. Our respective clients will benefit from the combined organization’s expanded geographic footprint and broadened service offerings. As a result of this union, the committed professionals that make Kroll such a special place to work will have new and exciting opportunities for growth. After

spending time with Noah and his leadership team, it is evident to me that there is strong alignment in our respective organizations’ values and cultures. My colleagues and I look forward to this next exciting chapter.” The transaction is expected to close during the second quarter of 2018, subject to customary closing conditions and regulatory approval. UBS Investment Bank and Goldman Sachs acted as financial advisors See Kroll Acquired Page 36 OCTOBER 2018

ANALYSIS - FORTEGRA

CONSUMERS ARE DRIVING AUTO TRENDS: HERE’S HOW THE INDUSTRY IS RESPONDING Automotive consumers are driving new sales trends, preferring wireless connectivity features, virtual assistance, and other tech upgrades to make long commutes and travel more comfortable. By Mike Gardner, Vice President Automotive Product Group

he average commuter spends 100 hours traveling to and from work each year. With so much time spent on the go, consumers are seeking ways to stay more connected. Thankfully, for those on the road, features like on-demand music, GPS guidance, and cloud access allow them to use their vehicles to be just that—more connected than ever before. Depending on the model, today’s vehicles are offering a wide array of

connectivity options to choose from. Which ones are driving consumers to the point of purchase? Let’s take a look.

providing these features, giving drivers more control and comfort during the travel experience in their ‘connected car’.

CUSTOM TRAVEL EXPERIENCES

GPS PREFERENCES

The future of cars? Think: ‘computers on wheels.’ But what exactly does that mean? According to a recent McKinsey report, cars will mimic computers with the ability to connect to thirdparty applications, process data in the cloud, operate autonomously, and mirror the home-entertainment experience. Many auto manufacturers have recognized this shift and begun

Rather than include a typical, builtin GPS feature, General Motors developed their Chevrolet Bolt electric vehicle to sync directly to the mapping system on drivers’ phones. Whether they prefer Waze or Google Maps, drivers have the flexibility to choose which one they want to use See Auto Trends Page 38

ike Gardner is Vice President of the Automotive Product Group at Fortegra where he spearheads Auto F&I partnership development with third-party administrators and has been instrumental in the introduction of Fortegra’s GAP and UCLIP programs. A graduate of Maryville University with a BS in Actuarial Science, Mike boasts an extensive reinsurance background, with decades of experience aligning partners for strategic risk and consistent growth.

OCTOBER 2018

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www.chart-exchange.com

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ANALYSIS - COST FINANCIAL

HOW INSURANCE CONSULTING CAN BENEFIT YOUR BUSINESS

t’s been said that even the best of the best can benefit from a little advice every now and then. Just ask an accomplished Olympian in training. What do their predecessors know that they don’t yet know for themselves? The truth is, you’ll never know unless you ask someone who’s been there.

can be an excellent move. Call it what you will; a guru, an expert, a sage, or for the sake of this blog, a consultant, here are just a few of the benefits your business can gain from insurance consulting when decisions need to be made. INSURANCE CONSULTING CAN HELP YOU AVOID UNNECESSARY CONFLICTS OF INTEREST

Learning about something from a new or different perspective is vitally Part of a important to gaining consultant’s an overall picture primary focus and can give you the should be to ability to make the evaluate different best decisions for levels of risk on yourself or for others.

For many agents in all kinds of industries, there’s almost always an opportunity for gain by profiting from a business’s decision to go with the business’s a certain client, side, performing a product or service. risk assessment, Pharmaceutical reps, so to speak. celebrity agents, etc., This assessment all have something may include a to gain by the visit to the place promotion of what it is (or who it is!) of business, they represent. The asking in-depth questions regarding insurance industry is no exception. procedures, and

The same is true in all kinds of business, especially in today’s world where business happens globally and at what feels like the speed of light. When it comes to learning something new or trying to practices.” see “the forest in An insurance agent spite of the trees,” representing a reaching out for help and advice particular company can certainly

provide accurate information and advice, the same as you might receive through insurance consulting. But the difference is found in who benefits from the decisions you make. There is the potential for a conflict of interest when an agent stands to profit, through commissions, for example, from your choice of products or services, including certain (and perhaps, pricier) recommended policies over a more appropriate fit. Insurance consulting removes this risk, as a consultant does not stand to gain financially when you make decisions about what is best for your business. Insurance consulting typically comes with its own price tag, but that tag is not based on commission or profits stemming from policies, products, or services. INSURANCE CONSULTING CAN HELP TO REMOVE YOUR BURDEN OF RISK Part of a consultant’s primary focus should be to evaluate different levels of risk on the business’s side, performing a risk assessment,

See Insurancce Consulting Page 42 www.chart-exchange.com

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OCTOBER 2018

SPECIAL REPORT - KROLL

CRIME VS. ETHICS

CHANGING CORPORATE CULTURE TO REDUCE MODERN SLAVERY By Richard Dailly and Duncan Jepson

and the penalties for failing to do so is narrowing. New legislation, such ake for example a person as the recent UK Criminal Finances who is paid nothing, Act 2017 which was introduced physically injured, on 12th July, the legislation and threatened, intimidated, regulation explored in the first constrained, or subjected to unsafe paper in this series, is also being working conditions in order to supported by other collaborations, produce for his “employers”. It does efforts, and resources such as the not matter whether the person U.S. State Department’s is in India1, Uzbekistan2, For many years, Kroll has MOU with Freedom Fund, Malaysia3, Thailand4, Brazil5, provided intelligence on USAID’s funding program in or even Kent in the UK6. The supply chains for clients to assist South East Asia, the launch product, whether it be cotton, of International Labour them in better understanding and Organisation’s Alliance fish, ore, or fruit, is then sold and moved up the supply chain shedding light on potentially illegal 8.78, the UK government’s into the distribution chain and unethical business practices GBP33.5million fund to and then finally makes its way tackle modern slavery9, and focused on the exploitation of to the consumer. With each the increasing applications workers, particularly in opaque and product offerings using transaction of materials and goods, money is banked and jurisdictions where poverty is rife.” data (big and small) and transferred, letters of credit most recently blockchain written, credit lines extended, applications to identify how and trade finance provided. Hundreds the difficult and burdensome role of corporates are exposed to supply of transactions of goods and money the world’s policeman. Conversely, chain risk or potentially involved in may stem from that single act of the thousands of parties in the human rights abuses such as slavery, exploitation. various supply and distribution chains trafficking, and exploitation. are comparatively less than fully The movement of the money accountable for the person’s plight. In response to these improvements associated with the exploitation of and developments in the legal and persons is currently treated differently However, for financial and nonregulatory framework — as well as — under the law, by industry financial industries involved with or the range of information products regulators, and by society — than the who benefit from the exploitation and services and the direction of movement of the product that results of persons, the disparity between from that exploitation. Receiving, the burden of responsibility to act See Modern Slavery Page 34

OCTOBER 2018

storing, and moving the money is a question of crime7, namely money laundering. But moving the products or goods is “only” one of ethics and social responsibility. It is a difference that positions banks and financial institutions caught by global and local anti-money laundering requirements and know-your-client regulations in

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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.

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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.

ANALYSIS - WILSON ELSER

WHY STATE MARIJUANA-IMPAIRED DRIVING LAWS NEED REFORM By Ian A. Stewart

T A

bout the author: Ian Stewart has defended complex litigation in state and federal courts for more than 20 years with a focus on product liability, complex general casualty, cannabis law, transportation and marine claims, data privacy and security, and intellectual property litigation. Ian is co-chair of the firm’s Cannabis Law practice and a member of the Information Governance Leadership Committee. Ian is committed to client communication and costeffective litigation management. He is a proponent of efficient claim resolution and Legal Project Management. Ian goes out of his way to ensure that he understands his clients’ business and goals so that an agreed strategy can be identified and implemented at the outset of any litigated matter.

he expanding legalization of cannabis may be sending a message to drivers that marijuana is not as dangerous as previously thought. As noted in its July 2017 report to Congress, the National Highway Traffic Safety Administration (NHTSA) cautions that this changing perception is likely impacting personal choices regarding marijuana use, and that “as more people choose to use marijuana, it is likely more people will drive impaired by marijuana.” This is borne out by recent studies that show an increasing national trend in marijuana use with a decreasing trend in alcohol use. The number of marijuana-impaired drivers on the road will continue to increase with greater access to retail recreational cannabis and a new generation of “pot cafés” and other on-site cannabis consumption venues on the horizon in adult-use states. It is therefore critical for policy makers, insurance companies and the public to understand the risks associated with marijuana-impaired driving and the limitations in the ability of new technology to detect and prevent drugged driving.

Following is a discussion of the current scientific limitations on measuring cannabis impairment and the challenge of developing accurate and reliable roadside detection technologies. Also discussed is what research shows on the behavioral effect of marijuana on drivers, as well as the relative crash risks from marijuana-impaired driving, drunk driving and mixed alcohol/drug use. We comment on NHTSA’s conclusion that currently there are no evidencebased methods to test for marijuana impairment or to differentiate the cause of driving impairment between alcohol and marijuana. We also elaborate on state driving laws and the lack of evidence that per se THC limits have a scientific basis. Finally, we discuss NHTSA’s recommendation that before an evidence-based solution can be developed for measuring marijuana-impaired driving, additional training, data collection and research is needed. THE BODY METABOLIZES ALCOHOL AND THC VERY DIFFERENTLY Alcohol is readily absorbed into the bloodstream and declines at an approximately constant rate. THC

See Impaired Driving Laws Page 20 www.chart-exchange.com

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OCTOBER 2018

ANALYSIS - WILSON ELSER Continued From Page 19

has declined by more than 80 percent.

WHY STATE MARIJUANAIMPAIRED DRIVING LAWS NEED REFORM

As emphasized in the NHTSA report, peak THC level can occur at the time low impairment is measured, and high impairment may be measured when the THC level is low. In addition, a low THC level can result from recent use with some impairment, or it can result from environmental exposure or from chronic use with no recent ingestion and no impairment.

concentration, however, drops rapidly at first, followed by a slower decline as lower THC levels are reached. As described in the NHTSA report, “THC is eliminated at a rate proportional to the current concentration with exponential decay.” In other words, elimination occurs most rapidly when higher concentrations are present and slows down when less of the drug is present. THC CONCENTRATION AND IMPAIRMENT ARE NOT CLOSELY RELATED Unlike alcohol consumption, where impairment closely correlates with blood alcohol concentration (BAC), the level of THC in the blood and the degree of impairment are not closely related. Peak impairment does not occur when THC concentration in the blood is at or near peak levels. In fact, studies suggest that peak impairment may occur up to 90 minutes after smoking, by which time the THC level

OCTOBER 2018

The Complex Pharmacology of Cannabis Is Not Well Understood This difficult situation is further complicated by the complexity of cannabis. With alcohol, one ingests the identical ethanol molecule whether it’s consumed in beer, wine or whisky. Cannabis, however, includes a wide variability of strains that contain dozens of cannabinoids with complex pharmacology and differing potencies and psychoactive effects that also differ depending on the method of ingestion. Most research has been based on the subject smoking cannabis; very little research has been performed on subjects ingesting edibles or using other forms of absorption such as transdermal patches or sublingual tinctures. Even the research performed to date on smoking cannabis often does not measure concentration of THC in the blood. This situation leaves the scientific community largely in the dark as to the specific causal relationship between the plant’s pharmacology and impairment in the user. Drunk Driving versus Drugged Driving TABLE OF CONTENTS

Decades of research and experience confirm that alcohol causes aggressive driving with common behaviors that include higher driving speeds, greater lane variability, lane departures and closer following distances. It is common knowledge that drunk drivers typically drive faster and take greater risks. Studies on marijuanaimpaired driving, on the other hand, show that marijuana-impaired drivers typically drive slower, follow other cars at greater distances and take fewer risks than when sober. This does not mean that marijuana-impaired drivers are as safe as sober drivers, of course, because marijuana use impairs psychomotor skills, causes divided attention, and impairs lane tracking and cognitive functions. Alcohol also causes impairment in these executive functions, but alcohol causes different driving behaviors in the drunk driver compared with the drugged driver. The relative dangers of marijuanaimpaired driving compared with drunk driving are supported by empirical evidence. Studies performed on the crash risk associated with marijuana use are somewhat variable, but overall show relatively low risk estimates – or in a few cases, no risk – associated with marijuana use when compared with alcohol or mixed drug/ alcohol impairment. NHTSA’S CRASH RISK STUDY For example, NHTSA’s 2016 “Crash Risk” Study, the first large-scale study in the United States to include drugs other than alcohol, concluded that there was no increased risk of crash involvement found over sober/drugwww.chart-exchange.com

U.S. Air Force photo by Airman 1st Class Zachary Hada/Released

ANALYSIS - WILSON ELSER

free drivers, and that there was no difference in crash risk for drivers that had consumed both marijuana and alcohol beyond the risk attributable to alcohol alone. DRUID STUDY The large-scale European DRUID Study resulted in considerable national variability of crash risk results, with an average of 1.39 times that of drug-free drivers. This result was not considered statistically significant. META-ANALYSES Two recent meta-analyses, which each looked at separate groups of nine studies, found an overall pooled risk www.chart-exchange.com

estimate of 2.66 times and 1.92 times that of drug-free drivers, respectively. Based on the NHTSA study, the DRUID Study and the meta-analyses, it appears that the typical average increased risk of crash involvement for drivers using marijuana is up to approximately 2 times that of drugfree drivers. This compares with an increased crash risk for drunk drivers that is 5 times that of sober drivers with a BAC of 0.10, and 22 times that of sober drivers with a BAC of 0.20 (not to mention a 23-times increase in crash risk from texting while driving). CRASH RISK FROM MIXED

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MARIJUANA AND ALCOHOL IMPAIRMENT The crash risk associated with the combined use of alcohol and marijuana also has been difficult to determine because of variable results from different studies. Columbia Universityâ&#x20AC;&#x2122;s 2013 study showed a 23-times increase in crash risk for mixed alcohol and drug use generally, though cannabis was noted to have the least risk of the drugs studied. In a 2014 study published in the Journal of Studies on Alcohol and Drugs, mixed alcohol and marijuana use was not

See Impaired Driving Laws Page 44 OCTOBER 2018

NEWS - LLOYD’S OF LONDON

LLOYD’S RETURNS TO PROFIT FOR THE FIRST HALF OF 2018

loyd’s, the specialist insurance and reinsurance market, today announced a profit of £0.6bn for the first half of 2018 with the publication of its interim report.

from £0.4bn last year. This partly reflects Lloyd’s ongoing work that commenced in 2017 to review the worst performing portfolios, and the subsequent action by the market to reduce loss making lines.

THE KEY FINANCIAL FIGURES ARE:

Lloyd’s Chief Executive, Inga Beale, said: “These results and return to profit demonstrate the strength of the Lloyd’s market following one of the costliest years for natural catastrophes in the past decade. Whilst these results are welcome, Lloyd’s continues to concentrate on improving the Lloyd’s market’s long-term performance by taking action to address underperforming areas of the market.

Pre-tax profits of £0.6bn (June 2017: £1.2bn) Combined ratio of 95.5% (June 2017: 96.9%) Annualised return on capital of 4.3% (June 2017: 8.9%) Investment return of 0.3% (June 2017: 1.5%) Net resources of £29.0bn (June 2017: £28.0bn) Read Lloyd’s 2018 Interim Report online The market’s return to profit follows the severe catastrophe experience in 2017, with the result supported by an improved combined ratio of 95.5% (June 2017: 96.9%). Lloyd’s also reported a modest increase in gross written premiums to £19.3bn (June 2017: £18.9bn), driven by improvements in pricing and growth in some profitable lines. The reporting period also featured an improvement in the underwriting result up to £0.5bn 22

OCTOBER 2018

secure financial position is underscored by our ratings which were recently reaffirmed at A (Excellent) from A.M. Best, A+ (Strong) from Standard & Poor’s and AA- (Very Strong) from Fitch.

The Iconic Llloyd’s of London

Pre-tax profits were impacted by a reduced investment return of £0.2bn (June 2017: £1.0bn), which is consistent with the low returns seen across most asset classes over the period. Lloyd’s capital position is at its strongest ever with net resources totalling £29.0bn (June 2017: £28.0bn). Lloyd’s strong and TABLE OF CONTENTS

“The Corporation also remains focused on making the Lloyd’s platform more competitive. Alongside the success of the mandate for the placement of electronic risks, we have recently launched the Lloyd’s Lab, our new innovation accelerator, which will help Lloyd’s use technology to better serve our customers around the world. We have also worked tirelessly to secure the Lloyd’s market’s access to the EU27 and our Lloyd’s Brussels subsidiary will start writing business in the European Economic Area from 1 January 2019.” www.chart-exchange.com

www.chart-exchange.com

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OCTOBER 2018

NEWS

JOHN NEAL APPOINTED AS LLOYD’S CEO John Neal has been appointed as the Chief Executive Officer (CEO) of Lloyd’s following a meeting of the Council of Lloyd’s, where his appointment as successor to Inga Beale was approved unanimously.

ohn will take up his position at Lloyd’s on 15 October 2018.

fresh thinking at a challenging time for the global insurance industry.

John’s whole career has been associated with the Lloyd’s market, first as an underwriter and later as CEO of the Ensign Managing Agency. He was most recently Group CEO of QBE, a global insurance and reinsurance business with a significant Lloyd’s footprint.

has driven the market’s modernisation programme, the success of which is evident not least in the recent rapid increase in electronic placement volumes and the launch of the Lloyd’s Lab.”

Commenting on his appointment, John added: “I am thrilled to be offered the opportunity to lead Lloyd’s, and will do so with the same excitement I felt when I first stepped into the underwriting room back in John Neal will take up his position as CEO of Lloyd’s on October 2018 1985. In this role he was responsible for “The insurance sector is facing many running a $14bn gross written “John will continue Lloyd’s focus on challenges. For 330 years the Lloyd’s premium (GWP) business with over delivering sustainable profitability, market has demonstrated its ability 14,000 employees in 37 countries. through a combination of to innovate and adapt, and I look He brings significant experience as a underwriting discipline and market forward to playing my part to ensure global CEO who has a track record as a modernisation. An immediate priority this unique marketplace remains at highly effective leader who can deliver will be the successful launch of the forefront of global commercial business transformation. Lloyd’s Brussels subsidiary which will corporate and specialty insurance and enable Lloyd’s to continue serving its reinsurance.” Bruce Carnegie-Brown, Chairman of customers in the European Economic Lloyd’s, said: Area after Brexit. The appointment is subject to “On behalf of the market, I am approval and consent from the delighted to welcome John to Lloyd’s. “I am grateful to Inga for the His wealth of experience both at leadership she has provided to Lloyd’s Prudential Regulation Authority and the Financial Conduct Authority. Lloyd’s and internationally, including over the past five years, during a the US, will bring new insights and challenging time for the market. She

OCTOBER 2018

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OCTOBER 2018

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 Lloydâ&#x20AC;&#x2122;s of London & the London company market. We offer: Dedicated Binding Authority Adjusting Team Dedicated E&S/Specialty Lines Open Market Adjusters Back office team for banking, bordereau production, MI reporting Customized Physical Risk Assessments (Risk Control) Virtual Risk Evaluation Services

To learn more, contact Aubrey Fountain, at 850.650.2380 or Aubrey.Fountain@yorkrsg.com. 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

NEWS - YORK

YORK APPOINTS COLLEEN ROONEY AS SENIOR VICE PRESIDENT, PUBLIC ENTITY SALES

olleen Rooney has been appointed Senior Vice President, Public Entity Sales at York Risk Services Group. Rooney is responsible for all public entity sales with more than 25 years of national sales and management experience. She reports to Lou Keyes, Executive Vice President, Chief Sales Officer.

state and federal markets. Earlier in her career, she worked in various sales roles at ACS, a Xerox Company (now Conduent) and Electronic Data Systems/HPE (now DXC Technology).

“We are thrilled to have a seasoned sales professional like Colleen join us at York in our Public Entity division. She brings a wealth of experience to her new role and we’re certain she will play a key role in helping us grow our public entity segment,” said Jody Moses, Executive Vice President, General Manager Public Entity of York. ABOUT YORK RISK SERVICES GROUP

“Colleen has significant experience helping public entities to develop solutions that drive results. I know she will make an impact here at York and for our clients,” said Keyes.

For more than 55 years, York has been delivering results our clients can see and feel. We serve corporations, the insurance industry and public entities to reduce risk and Rooney joins York from IBM drive high-quality outcomes. We Watson Health (formerly Truven do this by offering integrated and Health Analytics) where she most customized solutions including risk recently served as Vice President Colleen Rooney, York SVP, Public Entity Sales management, claims administration, of Sales, responsible for Analytic managed care and absence sales in the state government market. A masters degree graduate of the management. With our data-driven At Truven she built a powerful sales George Washington University, and compassionate approach, we organization, ultimately positioning Rooney also completed an executive deliver on our mission of reducing risk Watson Health as the leader in state leadership program sponsored by and getting people and organizations government analytics for the markets America’s Health Insurance Plans back to health, work and productivity. they serve. (AHIP) at the Kellogg School of Management at Northwestern York is headquartered in Jersey City, Prior to IBM, Rooney served as VP University and completed her New Jersey. You can learn more at of Sales at Cognosante where she undergraduate studies at the yorkrsg.com. expanded their footprint in both the University of Virginia. www.chart-exchange.com

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OCTOBER 2018

NEWS - VALUE MOMENTUM

VALUEMOMENTUM AND SMART COMMUNICATIONS ANNOUNCE PARTNERSHIP

alueMomentum Inc., a provider of software and services to insurance carriers, health payers and the broader financial services industry, today announced that it has partnered with Smart Communications™, the leading cloud-based platform for enterprise customer communications. The relationship began with the companies’ mutual client Pekin Insurance, which selected Smart Communications SmartCOMM™ product and ValueMomentum’s implementation services. Pekin’s initiative focused on streamlining all customer communications and a desire to leverage a modern CCM solution with a cloud option – an ideal opportunity for the Smart Communications offering designed specifically for the cloud. “Partnering with Smart Communications puts us in a great position to provide our services to insurance, banking & lending, and healthcare firms who all have one thing in common – the desire to streamline correspondence and document generation processes, while developing highly targeted, multichannel customer communications,” said Abhijeet

OCTOBER 2018

Jhaveri, ValueMomentum’s Chief Marketing Officer.

Together with Smart Communications’ leading customer communications platform, ValueMomentum will enable insurers, financial services and healthcare firms to deploy unified multichannel communications capabilities. “Smart Communications is delighted to welcome ValueMomentum into our partnership program. ValueMomentum services coupled with our software have proven tremendously beneficial to Pekin Insurance and we look forward to delivering similar value to many more insurers in the future,” commented Chuck Fazio, Vice President, Global Alliances and Channels for Smart Communications. ABOUT SMART COMMUNICATIONS Smart Communications™ is the leading cloud-based platform for enterprise customer communications. As the only cloud solution ranked as a Leader in Gartner’s Magic Quadrant for Customer Communications Management, more than 350 global brands – many in the world’s TABLE OF CONTENTS

most highly regulated industries – rely on Smart Communications to make multi-channel customer communications more meaningful, while also helping them simplify their processes and operate more efficiently. This is what it means to scale the conversation. Smart Communications is headquartered in London and New York and serves its customers from offices located across North America, Europe, and Asia Pacific. The company offers a range of solutions including SmartCOMM™, SmartDX™, SmartCORR™ for Salesforce, and SmartCaaS™ for Partners. To learn more, visit smartcommunications.com. ABOUT VALUEMOMENTUM ValueMomentum provides software and services to Insurance, Healthcare & Financial Services firms. Customers choose ValueMomentum due to the company’s track record of delivering value and driving the momentum of customers’ business initiatives. ValueMomentum accomplishes this by applying a time-tested formula of combining strong technology expertise with deep industry experience. For more information, visit https://live-valuemomentum. pantheonsite.io.

www.chart-exchange.com

NEWS

LLOYD’S LAB OPENS ITS DOORS TO TECH DISRUPTION Lloyd’s Lab, the global insurance market’s new innovation accelerator, today opened its doors following a global search for technology talent that drew more than 200 applications from 36 countries.

oday’s event, attended by the Economic Secretary to the Treasury, John Glen MP, and Lloyd’s Chief Executive Officer Inga Beale, saw 20 teams pitching their ideas for the chance to develop products, platforms and processes that will help transform Lloyd’s into an increasingly technology-driven market.

•

Start-ups, entrepreneurs and businesses from as far afield as the US, Canada, Israel, the Netherlands, Ireland and the UK, presented ideas ranging from live-streaming drones for fast risk and disaster assessment, to harnessing the Internet of Things for live cargo tracking, to on-demand insurance for the gig economy.

•

Following the competitive application and pitching process, Lloyd’s has revealed the teams that will be offered a spot in the founding Lloyd’s Lab cohort, kicking off on 8 October*.

•

THESE INCLUDE:

•

Layr, an AI powered insurance platform providing faster access for small businesses buying liability insurance. www.chart-exchange.com

•

CargoSnap, a mobile transportation inspection app connected to a powerful online platform to collect, analyse, and share information in the supply chain, speeding up claims. DropIn, an on-demand live video streaming platform to streamline insurance inspections and catastrophe response assessment using mobile phones and drones. Insurercore, a digital-based risk appetite directory for those seeking to place and write risks quickly and conveniently. BelMead Tech, a claims support platform using blockchain and other technologies, to improve the insured’s claim journey whilst also improving efficiencies for the claim handling team. Parsyl is a supply chain data platform that combines low-cost sensing hardware and large scale data mining to allow insurers to better anticipate risk and improve the claims process. Geollect, creators of proprietary intelligence software for businesses to improve efficiencies, safety and security. ZASTI, an AI technology platform built using proprietary Deep TABLE OF CONTENTS

•

Learning algorithms to provide predictive and diagnostic solutions to solve multiple business problems. Qnity, a digital insurance that allows individuals to design their own insurance solutions. iCede, a cloud-based platform that enables large insurance companies to interact across borders in order to arrange insurance cover for multinational corporations.

The teams joining the Lab will gain unparalleled access to the world’s largest market for specialist insurance and reinsurance, in support of its digital evolution. This tech talent will help deliver innovative solutions to some of the key challenges the Lloyd’s market faces and make a real impact on the market’s performance in a fasttrack fast-fail environment. Over the ten weeks, the selected Lab teams will have access to a dynamic co-working space located in the Lloyd’s building in London, potential funding and the chance to develop

See Lloyd’s Tech Search Page 46 OCTOBER 2018

ANALYSIS - FORTEGRA

HOW DIMINISHED VALUE WARRANTIES CAN MAKE OR BREAK YOUR CUSTOMER EXPERIENCE Diminished value warranties help to maintain the value of your vehicle even in the event of a crash or accident. Learn more about diminished value protection from Fortegra.

By Mike Gardner, VP

he aftermath of an accident can make or break (no pun intended) what happens to a customer’s vehicle. But with the right type of protection in place, customers can enjoy the peace of mind in knowing that any value lost in a potential accident can be covered. To understand how, let’s take a closer look at diminished value warranties.

CONSIDER THE DAMAGE

times more likely to experience an accident that leads to diminished value as opposed Beyond the frontto one that results line benefits of in total vehicle loss? diminished value So much for a GAP warranties, customers claim!

Over the first five years of ownership, vehicles lose an average of $15,000 in value. But with an accident mixed on Fortegra’s diminished in, it can get a value program can enjoy With that kind of lot worse. How protection and peace of statistical probability much worse? Well, mind for up to 84 months. in play, it might when evaluating Blanket coverage plans seem like diminished damage there are are available for $2500 value has the numerous factors and $5000 respectively, potential to be a real at play. How old is and optional coverage can burden for owners, the vehicle? Has it range up to a max benefit of dealers, and insurers been in an accident alike. But it doesn’t $10,000.” before? Has it been have to be. How maintained? The can third-party administrators and list goes on, and it all adds up to auto dealers work together to help diminished value. customers overcome value lost on a BUILD POSITIVE RELATIONSHIPS Did you know that drivers are three

See Diminished Value Warranties Pg 37

OCTOBER 2018

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www.chart-exchange.com

Your Partner for Admitted Market Capacity

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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.

SPECIAL REPORT - KROLL Continued From Page 16

CHANGING CORPORATE CULTURE TO REDUCE MODERN SLAVERY resources in favor of transparency, accountability, and recourse to combat human rights abuses such as slavery — there has to be a corresponding change in the culture of organizations. This requires a behavioral change at the

operational and governance levels within organizations allowing them to make more informed business decisions that benefit the organization and also society. The financial crash in 2008 has forced the financial industry to look hard at its risk controls and governance. While specific questions regarding modern slavery may not yet be a key item on the agenda at the higher levels in an organization, existing anti-money laundering laws and the increasing availability of information and data is improving the financial industry’s potential to address these issues. An example of such deeper reflection occurred in November 2015 when the Federal Reserve Bank of New York hosted a “Reforming Culture and Behavior in the Financial Services” workshop10. Its attendees included the most senior people from most of the Western Hemisphere’s global financial institutions. The release of ISO 3700111 in October 2016, a more prosaic example of new initiatives, will introduce and urge the organizational cultural changes necessary to bring human rights abuses such as exploitation and slavery into organizational decision-making and governance processes. Combating corruption combats exploitation, and ISO’s anticorruption management system, while not binding, proposes that companies include processes and procedures similar to those required by legislation like the

OCTOBER 2018

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SPECIAL REPORT - KROLL

Foreign Corrupt Practices Act. A framework that leads companies to factor human rights into their governance processes now has a little more structure thanks to standards like ISO 37001. Pushing organizations to improve their culture, supported by more data and intelligence, may significantly improve decision-making to the benefit of the business risk management, profitability, the local community, and society in general. Kroll is able to help corporates and investors manage these risks by illuminating the evolving environment. Using our unparalleled experience and resources in global discreet investigations and intelligence-gathering, we help clients better understand their supply chains and the environments in which they operate in order to give greater comfort to investors and corporates that they are not complicit in potentially illegal or unethical behavior. Kroll considers intelligencegathering of this kind to be as crucial ahead of an investment as undertaking investigative due diligence on prospective partners, particularly in regions where poverty is a significant issue and information is hard to acquire.

2 http://www.antislavery.org/english/campaigns/ cottoncrimes/forced_labour_in_uzbekistan_background. aspx 3 http://www.cips.org/supply-management/news/2015/ november/investigation-into-palm-oil-slavery-allegationsfell-short/ 4 http://www.cnn.com/2015/05/11/asia/freedom-projectthailand-fishing-slave-ships/ 5 http://projects.aljazeera.com/2015/07/slavery-brazil/bigbusiness-interests.html 6 https://www.theguardian.com/globaldevelopment/2016/jun/10/court-finds-uk-gangmasterliable-for-modern-slavery-victims-kent-chicken-catchingeggs 7 http://www.fatf-gafi.org/publications/ methodsandtrends/documents/

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

REFERENCES 1 http://qz.com/695565/india-has-18-millionmodern-slaves-at-least-five-times-more-than-anyother-country-in-the-world/ www.chart-exchange.com

AtriumUw

www.atrium-uw.com

Atrium Underwriters Ltd

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OCTOBER 2018

NEWS Continued From Page 11

DUFF & PHELPS ACQUIRES KROLL FROM CORPORATE RISK HOLDINGS to Duff & Phelps and provided committed financing in support of the transaction. Kirkland & Ellis and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to Duff & Phelps and Simpson Thacher & Bartlett acted as legal advisor to Kroll. ABOUT DUFF & PHELPS Duff & Phelps is the global advisor that enables clients to protect, restore and maximize value in the areas of valuation, corporate finance, disputes and investigations, compliance and regulatory matters, and other governance-related issues. Our clients include publicly traded and privately held companies, law firms, government entities and investment organizations such as private equity firms and hedge funds. We also advise the world’s leading standard-setting bodies on valuation and governance best practices. The firm’s nearly 2,500 professionals are located in over 70 offices in 20 countries around the world. For more information, visit www.duffandphelps.com. M&A advisory, capital raising

OCTOBER 2018

and secondary market advisory services in the United States are provided by Duff & Phelps Securities, LLC. Member FINRA/ SIPC. Pagemill Partners is a Division of Duff & Phelps Securities, LLC. M&A advisory, capital raising and secondary market advisory services in the United Kingdom are provided by Duff & Phelps Securities Ltd. (DPSL), which is authorized and regulated by the Financial Conduct Authority. M&A advisory and capital raising services in Germany are provided by Duff & Phelps GmbH, which is a Tied Agent of DPSL. Valuation Advisory Services in India are provided by Duff & Phelps India Private Limited under a category 1 merchant banker license issued by the Securities and Exchange Board of India. About Corporate Risk Holdings and Kroll Corporate Risk Holdings is a global leader in diversified risk and information services, headquartered in New York, NY. It is the parent company of: HireRight, a leading 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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ANALYSIS - FORTEGRA Continued From Page 32

DIMINISHED VALUE WARRANTIES AND THE CUSTOMER EXPERIENCE vehicle? A diminished value warranty, of course. Covering value lost due to an accident, diminished value protection can help customers receive greater value at trade-in. And the benefits granted by this protection extend to TPAs and dealers as well. With diminished value coverage, dealers have a tool that promotes customer loyalty, and TPAs come out on top by being a true go-to for both dealers and their customers. TALK ABOUT THE FEATURES Beyond the front-line benefits of diminished value warranties, customers on Fortegra’s diminished value program can enjoy protection

and peace of mind for up to 84 months. Blanket coverage plans are available for $2500 and $5000 respectively, and optional coverage can range up to a max benefit of $10,000. (That’s a lot of protection.) And diminished value warranties aren’t the only type of auto coverage a TPA can bring to the table. Service contracts, key replacement plans, roadside assistance, and others can provide big benefits that produce positive returns. In a survey that targeted vehicle users who recently paid a claim on an F&I product, 86 percent said they’d purchase the product again because it was handled so well by their dealer.

NEVER MISS AN ISSUE OF CHART EXCHANGE

With the right plans in place, dealers and TPAs together can make the most of customer relationships. While accidents may not always be the best topic of conversation, when customers know they’re taken care of and how they can actually benefit from accidents in the long run, they can enjoy added peace of mind with you on their side. To learn more about Fortegra’s diminished vehicle value programs, visit fortegra.com. Fortegra® is the marketing name for the extended warranty operations of Fortegra Financial Corporation and its subsidiaries.

SUBSCRIBE NOW TO CONTINUE TO RECEIVE THE CHART EXCHANGE!

www.chart-exchange.com

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OCTOBER 2018

NEWS Continued From Page 12

VIRTUAL ASSISTANCE

CONSUMERS ARE DRIVING AUTO TRENDS

We’re all familiar with Alexa, Amazon’s virtual assistant who can tell us the weather, our daily schedule, or play us our favorite music. Well, Ford and Amazon have recently teamed up to offer Alexa capabilities in Ford vehicles. By simply asking for Alexa’s assistance, drivers can listen to audiobooks, check the news, search directions, and even add items to their Amazon shopping cart—all while driving. Drivers can also use Alexa from home and ask her to start, lock or unlock their car, or access important vehicle data, without leaving the easy chair.

each time they step into their vehicle. This unique feature is an example of manufacturers meeting drivers where they’re most comfortable and catering to their daily habits.

WIRELESS CONNECTIVITY

Image: Juguar MENA - Attribution 2.0 Generic (CC BY 2.0)

APP COMMUNICATION Keeping pace, Tesla recently announced Summon, a new feature in its Model 3 which provides parking assistance via the Tesla app. And it doesn’t stop there. Tesla is making it easier for drivers to keep their cars up to date by communicating with vehicles on the road to download updates and install major fixes. SECURITY AND PEACE OF MIND Partnering with Cisco, a worldwide leader in technology services, Hyundai is prioritizing security in the connected car. From real-time traffic updates to internal vehicle communication, vehicle-to-vehicle and smart road infrastructure communication, Hyundai and Cisco are making the roads safer together. And, yes, you read that right: Hyundai models can now communicate with road infrastructure like street lights, road signs, and even lane markings, allowing drivers to prepare for what’s ahead. Additionally, Hyundai’s new features prevent hacking and monitor the car’s condition to identify and resolve issues remotely.

OCTOBER 2018

Last, but certainly not least, is the impact of wireless on auto technology trends. 5G and IoT are playing essential roles in the new connected car, leading carriers like AT&T to provide customers with payment options for their in-vehicle hotspot. Whether they choose to add it to their monthly bill or purchase an additional unlimited data plan, customers can experience the feature as if it were part of their already established payment plan. Following the trend, Verizon introduced Verizon Connect earlier this year, providing an extra layer of safety for drivers through connected vehicle software and services that can improve driver safety and efficiency. On top of that, Verizon Connect keeps drivers up to date on things like fuel efficiency and ways to reduce emissions. Plus, get this: if you have a positive driving record while using Verizon Connect, you can participate in a gamification feature that rewards the safest drivers. On the road or at home, consumers are driving automakers to make their daily experiences safer, more productive, and more interchangeable than ever. Fortegra® is the marketing name for the automotive operations of Fortegra Financial Corporation and its subsidiaries.

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www.chart-exchange.com

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

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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OCTOBER 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”

ANALYSIS - COST FINANCIAL Continued From Page 15

CHART HOW DEFENDER INSURANCE CONSULTING COVERHOLDER CAN BENEFIT E&O YOUR AVAILABLE NOW! BUSINESS

Mark Lann Phone:

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

OCTOBER 2018

so to speak. This assessment may include a visit to the place of business, asking in-depth questions regarding procedures, and practices. A consultant may evaluate and analyze the safety of an operation or workplace, in an effort to identify the risks and factors that are specific to the business. The same assessment may be done on the industry level, as well. Once this information is organized, insurance consulting should result in specific recommendations for how to proceed in light of these factors. These recommendations may include which policies would best fit the needs of the business, or suggestions about coverage limits. For example, if the net worth of a company is

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valued at $500,000, $5 million in coverage would be excessive and unnecessary. As a business owner, you donâ&#x20AC;&#x2122;t want to assume this extra expense! Through insurance consulting, commercial insurance and financial services, and with a trusted approach to your business, COST Financial Group provides management and operation services to premium finance companies owned by insurance groups and businesses. For more than two decades, we have helped insurance companies create and manage viable profit centers without the work and worry of running it themselves. We work with our clients directly to provide the solutions that will keep their businesses operating smoothly, and we make it our goal to stay aprised of state regulations to better meet your needs. Contact us today to see how our experience can benefit you!

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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.

www.chart-exchange.com

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ANALYSIS - WILSON ELSER Continued From Page 21

WHY STATE MARIJUANAIMPAIRED DRIVING LAWS NEED REFORM

Blood testing remains the gold standard for testing the presence of alcohol and drugs in impaired driving cases. This invasive procedure, however, typically requires a search warrant that results in delay and less probative test results. In Missouri v McNeely, 133 S.Ct. 1552 (2013), the U.S. Supreme Court held that warrantless blood tests of alcohol concentration are not generally allowed. Warrantless breath alcohol tests are generally permissible as they are less intrusive than blood tests. See Birchfield v. North Dakota, 136 S.Ct. 2160 (2016).

fluid testing devices include the Alere DDS®2 Mobile Test System, which tests for five commonly abused drugs, and the Dräger DrugTest® 5000. These new devices may be used by law enforcement to provide a preliminary indication of whether a laboratory test is likely to yield a positive result for THC. FEASIBILITY OF DEVELOPING AN IMPAIRMENT STANDARD

There currently exists no objective chemical test for marijuana impairment. As previously discussed, THC does not correlate well with Oral fluid testing devices are being impairment in any event. Very high developed, but also may require a levels of THC do indicate recent search warrant depending on the found to significantly increase crash consumption, but NHTSA has pointed risk beyond alcohol impairment alone. jurisdiction. This method is minimally out that in a real-life scenario, it is invasive and has been shown to be The study found that while mixed unlikely that a police officer would alcohol and drug use (other encounter a suspect and obtain Until a reliable marijuana- a sample of blood or oral fluid than marijuana) did increase crash risk to some extent, impairment standard is close enough to the time of alcohol was the primary developed, relevant stakeholders consumption for high THC cause of crash risk. It warns: levels to be detected. “The lower contribution of drugs other than alcohol to crash risk relative to that of alcohol suggests caution in focusing too much on drugged driving, potentially diverting scarce resources from curbing drunk driving.”

must continue to be educated on the unique toxicology of cannabis and how it differs from alcohol, as well as the lack of any scientific basis for state driving laws that rely on THC limits, which do not closely correlate with impairment.”

In sum, there is no compelling evidence based on a large study that marijuana use significantly increases the crash risk over alcohol impairment alone. There is consensus in the scientific community, however, that more study is needed. Impaired Driving Detection Process

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effective in detecting the presence of THC. NHTSA has concluded that devices that collect oral fluid for laboratory testing appear reliable for testing recent drug use. Roadside point-of-arrest technology, however, is still evolving and has not been shown to be completely accurate and reliable to date. Roadside oral TABLE OF CONTENTS

Even if a blood test shows only low THC levels, the individual may have been quite impaired when the blood was taken. Impairment may be observed for two to three hours after smoking, whereas by one hour after smoking, peak THC levels have declined by 80 percent to 90 percent. Without a chemical test, the alternative is to develop a subjective psychomotor, behavioral or cognitive test – something similar to the classic roadside field sobriety tests for alcohol intoxication. Available

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ANALYSIS - WILSON ELSER research, however, does not support the development of such tests that would be practical and feasible for law enforcement at this time. Indeed, NHTSA boldly concludes that “there are currently no evidence-based methods to detect marijuana-impaired driving.” It explains that “current knowledge about the effects of marijuana on driving is insufficient to allow specification of a simple measure of driving impairment outside of controlled conditions.” Similarly, NHTSA concludes that there are no evidence-based methods to differentiate the cause of driving impairment between alcohol and marijuana. “These efforts will take a number of years and a successful outcome cannot be guaranteed at this time.” CURRENT STATE LAWS RELATING TO MARIJUANA-IMPAIRED DRIVING It is illegal in all states to drive while impaired by alcohol or other drugs. The statutes, which have been in place for decades, require evidence that the drug caused the impairment. There is great variability between the states as to what constitutes “driving under the influence” (DUI). Many states have “per se” laws that make it illegal to drive with more than a specific concentration of the drug in the blood or urine. For example, a number of states have adopted a per se limit of 2 ng/mL or 5 ng/mL for THC, and others have a zero-tolerance per se limit whereby any level of THC results in a violation. Only three states (California, New York and Hawaii) have a separate “driving under the influence of drugs” (DUID) statute.

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In all remaining states, it is a violation of the DUI law to drive under the influence of alcohol, drugs, or a combination of alcohol and drugs. STATE PER SE THC LIMITS ARE NOT BASED ON SCIENTIFIC EVIDENCE Given the poor association between the level of THC and impairment, one can see the problem with enforcement of cannabis impairment under state driving laws, all of which require the state to prove the drug caused the impairment. The NHTSA report comments on this problem, and particularly criticizes the basis of state per se driving laws, concluding that the “per se limit appears to have been based on something other than scientific evidence.” THE REPORT FURTHER EXPLAINS: “The adoption of a 5 ng/mL per se law for THC would appear to result in the exclusion of a large number of drivers who law enforcement officers believed to be impaired by marijuana but whose blood THC concentrations will fall below this artificial per se threshold during the minimum 1 to 2 or more hours it will take to collect a blood sample following a stop, investigation and arrest.”

personnel, continued research on the development of an impairment standard, and better data collection by the states on the prevalence and effects of marijuana-impaired driving. Though all states currently participate in various levels of NHTSA courses that teach impaired-driving detection, there are only about 8,000 certified Drug Recognition Experts, the highest certification level. This number must increase to meet the challenges ahead. Without an objective impairment standard, only those who have reached a point of demonstrating poor driving are likely to be prosecuted and convicted. This may result in many impaired drivers escaping detection, subjecting innocent drivers to increased dangers on the roadways. Until a reliable marijuana-impairment standard is developed, relevant stakeholders must continue to be educated on the unique toxicology of cannabis and how it differs from alcohol, as well as the lack of any scientific basis for state driving laws that rely on THC limits, which do not closely correlate with impairment. The public should not hold out false hope for a panacea in the form of new technology that detects and prevents marijuana-impaired driving because that technology, too, is largely premised on detecting immaterial THC levels.

NO EASY SOLUTION Unfortunately, there is no easy solution to the lack of an impairment standard and the conflict between current state driving laws and the determination of causation by cannabis impairment.

For further information on cannabis law and policy, please contact a member of Wilson Elser’s Cannabis Law practice. Additional information can be found at www.wilsonelser.com/cannabis.

At this time, NHTSA can only recommend increased use of effective methods to train law enforcement

This article first appeared in the September 10, 2018, issue of Law360.

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NEWS - LLOYD’S Continued From Page 31

LLOYD’S SEEKS TECH products, platforms and processes that will help transform Lloyd’s into an increasingly technology-driven market. They will be supported by the Lloyd’s market who will offer their insight and expertise to help develop the ideas for their unique needs.

The launch of the Lab represents a significant milestone for Lloyd’s as it moves to modernise and harness the opportunities that advanced technology can offer to the 330-year old market and has been supported by applied corporate innovation specialist L Marks together with The Boston Consulting Group.” Speaking about the significance of the Lloyd’s Lab as a hub for global InsurTech excellence, John Glen, Economic Secretary to the Treasury said: “InsurTech is booming. There was $724m of InsurTech investment

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globally in the first quarter of 2018 and the UK attracted 12% of that funding, placing it second only behind the US. We’re doing everything we can to maintain this momentum and cultivate innovation in the sector, but ultimately, it is down to firms like Lloyd’s to take the lead, and that’s exactly what they’re doing with their Lab.”

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Inga Beale, Lloyd’s CEO added: “Lloyd’s has always been at the forefront of innovation - the launch of our new innovation accelerator is an important step forward into our technology-driven future and we’re excited to see how the ideas develop. The Lab is an important part of our future focused strategy which will further strengthen our position as the global centre for insurance innovation.” The launch of the Lab represents a significant milestone for Lloyd’s as it moves to modernise and harness the opportunities that advanced technology can offer to the 330-year old market and has been supported by applied corporate innovation specialist L Marks together with The Boston Consulting Group. Applications for the second Lloyd’s Lab cohort will open later this year, for an early 2019 start. More details will be announced in due course. Start-ups, entrepreneurs and businesses interested in applying for the Lloyd’s Lab should visit www. lloydslab.com.

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NEWS - SIAA

SIAA ANNOUNCES STRATEGIC PARTNERSHIP WITH BURNS & WILCOX National relationship marks third national wholesale brokerage under the SIAA MarketFinder family of partners

said SIAA Executive Vice President and COO Matt Masiello. “With this partnership, we’re enabling our member agencies to access markets through another national partner with a reputation for service and considerable expertise over a broad range of classes.”

eptember 10, 2018 – Hampton, N.H. – SIAA (Strategic Insurance Agency Alliance), the nation’s largest insurance agency alliance, recently announced a national partnership with Burns & Wilcox, an H.W. Kaufman Group company, and global leader in specialty insurance, brokerage and services effective October 1, 2018.

ABOUT SIAA SIAA is the largest national alliance of independent insurance agencies in the country. Its master agencies have signed over 7,000 independent agency members, writing more than $7.41 billion of total in-force premium. SIAA is dedicated to the creation, retention and growth of the independent insurance agency distribution system. To learn more about SIAA, visit siaa.net. ABOUT BURNS & WILCOX

Under the partnership, SIAA member agencies have access to Burns & Wilcox family of companies including brokerage for property and casualty excess markets, as well as industry expertise with Burns & Wilcox Centers of Excellence, including private client, professional, transportation, environmental and marine.

SIAA will access Burns & Wilcox through SIAA MarketFinder, SIAA’s online member-only portal for difficult-to-place and specialty risk markets.

“Our partnership with Burns & Wilcox rounds out the alliance’s growing demand for markets in the specialty insurance sector,”

The relationship with Burns & Wilcox marks the third national wholesaler partnership for SIAA and will join Risk Placement Services

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(RPS) and CRC Wholesale Group on the growing number of SIAA MarketFinder offerings.

Matt Masiello SIAA Executive Vice President & COO

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Burns & Wilcox is the industry’s leading wholesale insurance broker and underwriting manager internationally recognized for its expertise in commercial and professional liability, property, marine and personal insurance. Burns & Wilcox is a member of H.W. Kaufman Group, which has over 60 offices across the United States, Canada, and the United Kingdom and employs more than 2,000 professionals. More information can be found at burnsandwilcox.com or hwkaufman.com.

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NEWS - SIAA

SIAA PROMOTES TOMBARELLI AND HOLMES, EXPANDS THEIR ROLES

ugust 30, 2018 – Hampton, N.H. – SIAA (Strategic Insurance Agency Alliance) has announced the following change in responsibilities within their national organization.

He joined SIAA in 2013 as National Director of Business Insurance Advantage, focusing on assisting SIAA’s member agencies across the country in expanding their commercial lines books of business. Steve is a graduate of Merrimack College in North Andover, MA. Jeff

development at the national level in support of all master agencies. Jeff joined SIAA in 2013 and played a key role in the launch of the Agency Foundation program, assisting new independent member agencies onto the fast track to success. Jeff has more than 20-years of management, marketing, underwriting, training, sales, claims management, and risk evaluation experience in the insurance industry.

Matt Masiello, EVP and Chief Operating Officer at SIAA stated, “These changes reflect the success these ABOUT SIAA Steve Tombarelli is now SVP, individuals have Business Expansion & Innovation Dedicated to the had as part of SIAA growth, creation, and the additional responsibilities Holmes is now Senior retention, and for which they are prepared and Vice President, continued qualified. We expect continued Agency Operations success of the success from them within their new & Development. independent or expanded roles.” This title change insurance agency reflects the success distribution Steve Tombarelli is now Senior Jeff has had within system, SIAA Vice President, Business Expansion his current role, and Jeff Holmes is now SVP, Agency has signed Operations & Development & Innovation. He will retain his accomplishment more than 7,000 overall responsibility for Business of retooling and member agencies with 49 master Insurance Advantage, but will rebuilding SAN Group’s AccessPlus agencies across the country and also have responsibility for department in support of member $7.4 billion of in-force premium. technological intelligence as it agencies belonging to the original SIAA provides a wide range of relates to SIAA’s member agencies and largest of SIAA’s master resources to help member agencies and the insurance industry overall. agencies. increase sales, revenue and value. Steve will also seek avenues for For more information, visit www. SIAA to pursue additional business He will now make a larger siaa.net. opportunities. commitment to agency

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NEWS - LLOYD’S OF LONDON Continued From Page 9

LLOYD’S NEWS ROUNDUP guaranteed,” Chief Executive Officer Inga Beale said in an interview in Monte Carlo on Sunday. “I don’t think you will have fixed market stalls like you do at the moment. It will be more around people getting together for short periods of time.” Beale has been slowly changing things at the 330-year-old institution since she took over five years ago. Last year, she banned corporation staff from drinking during working hours, and it’s no longer compulsory for men to wear a neck tie inside the building, though in practice everyone still does. She’s most proud of introducing an electronic trading platform - 16.5% of Lloyd’s business is now placed online. However, it’s still a work in practice with many firms still using a rubber stamp to seal deals on paper. Lloyd’s executives are under pressure to modernize its antiquated business practices. It lost money for the first time in six years in 2017 and - like other UK industries - is facing a more www.chart-exchange.com

complicated business environment after Brexit. The market is also facing intense competition from overseas rivals, and is struggling to cut expenses. Lloyd’s last week named John Neal as its new chief, succeeding Beale at the helm of the world’s oldest and biggest insurance market. Neal, who used to run Australia’s QBE Insurance Group Ltd., will take up his new role on October 15.

when it came to the subject of sexual preference. In the pre-taped interview aired during the BBC One programme’s October 07 episode, John Neal’s predecessor explained how she thought she was heterosexual back in the ‘80s; how she eventually got the lesbian label when she had a relationship with a woman; and how she ultimately became branded bisexual when she married a man.

“Lloyd’s will look “I didn’t go out totally different in a seeking a label, but few years’ time,” Beale I got given a label,” said. “It will look a lot Beale told Marr. “But more like a WeWork what happened was space.” that I got asked if I would be out and be Lloyd’s of London CEO outspoken about it, Inga Beale talks about and I decided to say inclusion ‘yes’. I decided to do Insurance Business Lloyd’s of London CEO that because I know 10/8/18 - Come October Stepping Down 10/15/18 when I was secret 15 there will be a new about part of my life, it impacted man – yes, a male executive is me at work. I was so worried about taking over – at the helm of the making sure I was saying the right world’s specialist insurance market thing; that I didn’t reveal what was Lloyd’s of London, meaning the happening in my personal life. And reign of its first and only female that damages you, damages your CEO comes to an end this week. productivity, it can damage you and your partner’s relationship, it can Dame Inga Beale, who now speaks harm all sorts of things.” more openly about her personal life compared to previous years, She continued: “So I decided appeared on The Andrew Marr I wanted to, if I could, make a Show over the weekend and difference for other people, to say talked about the business, Brexit, and inclusion. The outgoing chief executive shared what made her become ‘bold and courageous’ See Lloyd’s News Roundup Page 50 TABLE OF CONTENTS

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NEWS - LLOYD’S OF LONDON Continued From Page 49

LLOYD’S NEWS ROUNDUP ‘let’s get inclusive workplaces’, ‘let’s get people talking about their difference’, and that’s why I decided to be a bt courageous, be a bit bold, and talk openly about it.” Beale, according to a report by The Sunday Times, found herself at the receiving end of sexist and homophobic messages when she took on the top post at Lloyd’s in 2014. Meanwhile inclusion initiatives continue, even with Beale stepping down soon. Last Friday the insurance market announced the launch of Lloyd’s Advance, a programme aimed at developing future female leaders not only within the market but also at Lloyd’s Corporation. Part of the commitment to closing the gender pay gap, it endeavours to improve the pipeline of senior women by providing targeted development, access to experts, and ongoing networking opportunities. With an initial cohort of 15 female executives, the Lloyd’s Advance pilot programme will run for six months beginning January 2019.

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Lloyd's launches programme to develop future female leaders Lloyd’s has announced the launch of a new pilot programme, Lloyd’s Advance, aimed at developing future female leaders within the Lloyd’s Corporation and the market. Like many financial service firms, insurance shows an equal number of men and women at the entry levels, however this representation does not translate at the senior levels. Hence, the need to take targeted action. As part of our commitment to closing the gender pay gap, Lloyd’s Advance aims to improve the pipeline of senior women through a modular-based development programme, targeted at female employees identified by their line managers as future leaders.

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Lloyd’s Advance will provide targeted development, access to experts and role models and ongoing networking opportunities aimed at supporting their future careers within the Corporation and the market. The Lloyd’s Advance pilot programme will run for six months starting from January 2019, with an initial cohort of 15 women. Each organisation wishing to nominate a female identified as a future leader will also put forward a sponsor for her and a mentor that will be matched to another female in the programme. TABLE OF CONTENTS

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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