The CHART Exchange June 2019 by The CHART Exchange

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

CHART Markets Explained In 10 Key Points

Admissions Scandal Investigation Is A Wake-Up Call To All Institutions

Protecting Your Agency And Educating Your Clients On Cybersecurity

Developing CustomerFocused Service To Support Client’s Lean IT Resources

How Insurance Literate Are Your Customers?

Virtual CISO Helps Underwriter Set Solid Strategic Foundation For Cyber Maturity

Special Report: Autonomous Vehicles And Emerging Tort Implications

Living Your Niche - And Knocking Out Incumbents

Ready To Take Your Agency Into The Digital Age?

Standard Deductions Are “Springing” Up

So, You Think You Want To Be An Underwriter?

Sexual Harassment: Update For Employers

ValueMomentum Experienced 31% Revenue Growth In Fiscal Year 2018

Lloyd’s Launches Insurance Industry’s Largest Ever Culture Survey

Cover Image: Arpingstone, Lloyds.building.london.arp, marked as public domain, more details on Wikimedia Commons

SPECIAL REPORT: AUTONOMOUS VEHICLES AND EMERGING TORT IMPLICATIONS

JUNE 2019 VOLUME 4 - ISSUE 6 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.

CHART Exchange

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

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

ADVERTISING IN THE CHART EXCHANGE MAKES SENSE: CALL KATE: 302.765.6056

EVERYBODY KNOWS ONE Meet Mr. Inappropriate. He is the King of unfiltered commentary. There is no remark too crass or topic too sensitive for this guy. Worse still, he may be working for one of your clients. The recent Hollywood scandals and resulting rise of the “#MeToo” Movement has made people more sensitive to the prevalence of harassment and other wrongful acts in the workplace. There was a time when otherwise harmless comments from someone like Mr. Inappropriate would have either been brushed off or ignored. Now they may be interpreted to have a more nefarious meaning. This perception can quickly turn into legal action. The cost of defending against such a lawsuit – even a groundless one – could be financially devastating. Let Rockwood Programs help protect your clients. Our Employment Practices Liability Insurance (EPLI) product protects companies from allegations of discrimination, wrongful termination, harassment, and workplace bullying. Coverage can be further enhanced to protect your client against alleged violations of the Immigration Reform Control Act, Wage & Hour disputes, and Third Party Wrongful Acts.

Visit us at www.rockwoodinsurance.com to learn more

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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MESSAGE FROM THE EARLIEST ADOPTER

CHART MARKETS – EXPLAINED IN TEN KEY POINTS Glenn W. Clark, CPCU Publisher & Earliest Adopter

We seek to provide an easy, fast, fully licensed, measureable service to our clients. Our strategy also includes the provision of a forum through which they can provide quality content. It will take some time, committed partners, and excellent execution on the part of the CHART Exchange to turn this vision into a reality.”

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CHART MARKETS 1. Definition: What is CHART Markets? The CHART (CoverHolders And Risk Takers) Exchange has been working on a concept titled CHART Markets. It is an on-line “shopping mall” for programs and services created to promote easier access to the London market.

2. Coverholder Storefront Under the brand of the CHART Exchange, tribunalized program managers with binding authorities (specifically termed as “Coverholders”) can list their product(s) via a storefront. The content of this site and the links back to the sponsoring agency are

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collaboratively developed by CHART personnel and their client.

3. Syndicate-owned Products Many of the London Syndicates (specifically termed “Risk Takers”) have proprietary products usually backed by on-line quoting/rating technology that they are marketing via London Brokers and U.S. Wholesalers. CHART Markets offers solutions to reach U.S. retailers more efficiently via a fully tribunalized and E&S-licensed source. Aggregation of producer feedback from a centralized source can help to improve the products and process.

4. Vendor Partners The CHART Exchange’s Vendor Partners all have unique London strategies. CHART Markets is creating a partners directory via storefronts

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designed by the user. Links, demos, testimonials, new products/services, etc. can all be highlighted and connected to the Partner’s home page.

5. How is CHART Markets Promoted? Communications in various industry media (magazines, press releases, etc.) will be used to brand CHART Markets as a Lloyd’s-centric facility. The positioning desired is to create a simplified method for articulating the solutions London can bring to U.S. retailers. See the definition of CHART Markets in point #1 of this article.

6. CHART Magazine A clear differentiator for CHART Markets is that we own a digital magazine dedicated to the London marketplace. This is an e-publication that has an opt-in database of over 100,000 retail agents that have responded to an issue at one time or another. Storefront owners (Coverholders, Risk Takers, and Vendor Partners) have the unique opportunity to write content about new products, industry issues, etc. The magazine goes out monthly, offering our partners over one million touch points annually at an incredibly efficient cost.

7. Cost Efficiencies A CHART Markets storefront is priced at $2,500/year. This is less than one-half the price of a full-page ad

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in most industry print publications. Vendor packages begin at $5,000/ year.

8. Measurable Results Each time a specific storefront is accessed via our national promotional efforts, the site owner is notified via e-mail. We strongly encourage immediate answers to each “hit”, recording the prospect for future solicitations, and tracking of results (quote, bind, premiums, etc.) CHART Markets should show an income return of many multiples of its cost. We encourage users to share “success stories” that can help to make us all better marketers.

to visit when they want to know what solutions the London market can offer”. We seek to provide an easy, fast, fully licensed, measureable service to our clients. Our strategy also includes the provision of a forum through which they can provide quality content. It will take some time, committed partners, and excellent execution on the part of the CHART Exchange to turn this vision into a reality.

“There are risks and costs to action, but they are far less than the longrange risk of comfortable inaction” - John F. Kennedy

9. Content, Content, Content CHART Markets (via CHART Magazine) is an efficient vehicle to become content marketers. Imagine the results of a well thought-out series about your products or services. This series could then be packaged as a communication to existing/ prospective policyholders or subproducers to make new sales.

Glenn W. Clark , CPCU CHART’S Earliest Adopter

10. Longer-term Objective “Become the premier site for retailers

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

kroll.com/cyber

ANALYSIS - KROLL

ADMISSIONS SCANDAL INVESTIGATION IS A WAKE-UP CALL TO ALL INSTITUTIONS M

ark Ehlers is the Philadelphia City Lead for Duff & Phelps and a managing director in the Business Intelligence and Investigations practice at Kroll. He manages the full range of firm services, including fraud investigations, educational and sensitive internal investigations, litigation support, due diligence investigations, and corporate ethics and compliance monitoring.

ulieanne Himelstein is an associate managing director in Kroll’s New York office. A recent addition to Kroll, Julieanne previously served for more than 30 years as Assistant United States Attorney for the District of Columbia, where she helped establish the Sex Offense Unit, which is responsible for investigating and prosecuting all sexual assaults of adults and children in Washington, D.C. Julieanne is among the most experienced sex crimes prosecutors in the United States.

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By Mark Ehlers & Julieanne Himelstein

accrediting agencies, recruiting and marketing materials, audit reports and compliance reviews – it appears that the Department’s primary interest is whether the schools have in any way misrepresented their admissions practices and requirements. This has broad implications for every college and university in the United States that does not operate an open admissions policy.

n response to the recent indictment of 50 people charged with participating in a scheme to cheat on standardized tests and/ or to bribe college athletic officials to help gain admission of students on false pretenses to elite universities, the U.S. Department of Education (“Department”) has commenced a preliminary investigation of schools named in the criminal Ensuring that the investigation. Although admissions process the Department’s investigation is is administered with integrity purportedly to and fairness and considers determine if the named each applicant solely on his schools failed to comply with their obligations or her individual merit apart under Title IV of the from outside pressures or Higher Education Act external influences is an of 1965 (“HEA”), and important component of is currently limited to eight universities, it university admissions.” has potentially broad implications for all institutions of higher education. Every school should consider this As suggested by the nature of the documents and information requested by the Department from the universities under investigation – admissions policies and standards, admissions data submitted to TABLE OF CONTENTS

a wake-up call and an opportunity to conduct a top-to-bottom review of its admissions practices and

See Admissions Scandal Page 27 JUNE 2019

2018 IN REVIEW $8.1 billion

$ $

total in-force premium

$690 million

9.3%

total in-force premium growth

growth in total in-force premium

465

independent strategic members signed

1 983

13%

4,487

signed of independent agents in U.S.

national strategic partner companies

2 0 19

new agencies created

strategic master agencies

The Total Solution for the Independent Agent The Proven Distribution System for Strategic Partner Companies

ANALYSIS - SIAA

requirements being imposed upon them via their carrier and brokerage contracts due to their status as an affiliate of the carrier or brokerage.

By Bill Fahy

t’s no secret that having the right technology is critical to being a successful independent agent. But as independent agents embrace technology, they must also be aware of the risks for cyberattacks and know how to protect their business. Taking the necessary steps to be cybersecure gives agents another clear advantage — they are then better able to educate their small business clients on how to purchase the best cyber insurance while meeting the ever-growing list of compliance regulations and requirements which differ from stateto-state, but are becoming more stringent in all states. And now agents must be aware of a new emerging risk: the compliance

EVERY BUSINESS IS A TARGET When it comes to cybersecurity, there’s much for agents to take in. A recent McKinsey article warns: “While awareness is building, so is confusion. Executives are overwhelmed by the challenge [to defend themselves from cyberattacks]. Only 16% say their companies are well prepared to deal with cyber risk.” The report found that businesses are “at risk of collateral damage from untargeted malware and attacks on widely used software and critical infrastructure. And despite all the new defenses, companies still need about 99 days, on average, to detect a covert attack. Imagine the damage an undetected attacker could do in that time.” Cyberattacks touch businesses of all sizes and are now prevalent in

small and medium sized businesses (SMBs), which often are not as proactive or well protected as larger businesses. Criminals know they are easy targets. According to a Hiscox 2018 Cyber Report, 47% of small businesses suffered at least one cyberattack in the past 12 months, and 44% of those suffered two to four attacks. Spam, ransomware and phishing are currently the most common forms of cybercrime that small businesses face, and according to Inc. Magazine, “60% of small businesses fold within six months of a cyberattack.” These statistics not only show that independent agents need to protect their own business, but also that there is a growing market in commercial lines for agents, especially those who are educated on the risks associated with technology and systems, cybersecurity strategies and coverages available.

bout the author: As president of SIAA MarketFinder, Bill Fahy has more than 30 years of insurance industry expertise and develops extensive programs and specialty market relationships for SIAA. For more information, email billf@siaa.net.

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CASE STUDY - VALUEMOMENTUM

RECOGNIZING THE CHALLENGES:

DEVELOPING CUSTOMERFOCUSED SERVICE TO SUPPORT CLIENT’S LEAN IT RESOURCES

RECOGNIZING THE CHALLENGES

he client is a leading provider of commercial transportation rental, maintenance, and leasing solutions to customers across North America and also offers an extension of its commercial auto liability and physical damage coverage waivers to customers in all 50 U.S. states. For approximately two decades, the client relied on a homegrown underwriting tool for pricing the commercial auto coverages it extends to its leasing customers. Recently, the company embarked on an initiative to improve the effectiveness of its pricing and risk assessment. Additionally, the legacy system that the company was using lacked the ability to provide location-based quotes. As a work-around, the client priced policies by using more general regional models. Frequently, this rating methodology resulted in two nearby locations having vastly disparate rates. Sales agents were increasingly dissatisfied with the system. It was a particularly acute problem in rural areas, where like

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vehicles in different locations merely five miles apart could receive pricing that varied significantly. Obviously, this was a huge barrier to growing the program. DEVELOPING A SOLUTION To find a solution, the client began by contacting ISO® and eventually investing in ISO Electronic Rating Content™ and ISO Risk Analyzer® for leveraging electronic ISO® updates and multiple granular rating components down to the ZIP-code level. However, two hurdles remained. First, the client required a solution that integrated the rating data supplied by ISO ERC™ and provided the functionality needed by the underwriters to quote and bind insurance protection for its customers. Second, the client’s lean IT staff had limited resources to conduct the needed deployment integrations and support them with ongoing maintenance. Deployment included integrating the client’s proprietary point-of-sale system, automated deal analysis, and review to enable TABLE OF CONTENTS

sales agents to provide customers preliminary rate quotes during a vehicle leasing sale. To achieve a fully functional system that helps address the needs of its sales force, the client evaluated ValueMomentum’s iFoundry™ Rating Engine and BizDynamics Express (formerly DealFoundry Express) for quoting. The client determined that ValueMomentum was a good fit to supply the cloud-based platform needed to help achieve its current and future insurance offering goals. ValueMomentum provided the functionality and interface to support sales staff efforts for quoting coverage and was fully integrated with ISO ERC™, which helps the client receive timely and accurate updates. ValueMomentum needed to be, and was, especially flexible with this client to find the unique solutions it needed. A client representative said, “We’re very unusual. They [ValueMomentum] were patient and went through everything with us. They did several

See Customer Focused Service Page 20 www.chart-exchange.com

Merger & Acquisition Services

serving the insurance industry

Merger & Acquisition Services is a

SPECIALIST ADVISORY AND FINANCIAL SERVICES FIRM firm specifically to participants within the insurance industry. Our mission is to provide

CONCIERGE-LEVEL SERVICES AND EXPERTISE

PROUD SPONSOR OF

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

M&A Services has closed

MORE THAN 100 TRANSACTIONS IN 10 YEARS and has earned continuous placement within the "Top 5 Financial Advisors in Insurance Underwriting" according to SNL Financial. Investment banking services and securities transactions are provided through and completed by Merger & Acquisition Capital Services, LLC., a broker-dealer registered with the U.S. Securities and Exchange Commission and member of FINRA and SIPC.

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

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

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

within the insurance industry by assisting firms with their corporate development and acquisition/divestiture objectives. M&A Services is

ANALYSIS - COST

HOW FINANCIALLY LITERATE ARE YOUR CUSTOMERS?

hile almost everyone has some insurance, and most have more than one type, many Americans believe a lot of myths about the plans they pay for. This is an opportunity for insurance providers and sellers to educate their clients and help find the coverage that’s best for them (and thereby, boost their own profits at the same time). Here are some common misconceptions many Americans hold about insurance.

HOME INSURANCE MYTH: THE LAW REQUIRES YOU TO BUY HOME INSURANCE No government mandates home insurance. A bank or other mortgage holder typically makes homeowners’ insurance or property insurance a condition of the mortgage loan. They also usually require renter’s or tenant’s insurance for rented properties. MYTH: HOMEOWNER’S INSURANCE SHOULD BE BASED ON THE REAL ESTATE VALUE In reality, homeowner’s insurance, including fire, flood, storm and other damage should be based on replacement and reconstruction value. After all, even after the worst

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disasters, in most cases the land will still be there. MYTH: STANDARD HOME INSURANCE PROTECTS AGAINST SEWER BACKUP Most home insurance plans offer sewer backup protection as an option, but not usually as a standard or default provision. This is something that insurance providers and sellers need to make clear to customers. MYTH: STANDARD HOME INSURANCE PROTECTS AGAINST FLOODS In reality, this is not standard at all. There are important differences among home insurance plans. Most home insurance policies protect against accidental release of, or entry of water into the home — such as from burst pipes. Most policies do not protect against overland flooding, when water flows over normally dry land and comes into the home through doors and windows — such as when a river overflows, or when your neighbors improperly drain their pool.

HEALTH INSURANCE MYTH: THE AFFORDABLE CARE ACT REQUIRES YOU TO ACCEPT THE HEALTH INSURANCE PLAN

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OFFERED BY YOUR EMPLOYER Actually, while the Affordable Care Act, also called “Obamacare,” requires almost all Americans to have health insurance, it does not tell them how to acquire it, whether via an employer or on the market. All Americans have the choice to buy the policy that makes the most sense to them. MYTH: THE AFFORDABLE CARE ACT ALLOWS HEALTH INSURANCE COMPANIES TO CHARGE HIGHER PREMIUMS FOR THOSE WITH HIGH BLOOD PRESSURE, HEART DISEASE AND OTHER HEALTH CONDITIONS Despite the fact that it was a key selling feature of the plan, many Americans believe that. In fact, the opposite is true: The ACA specifically prohibits health insurers from basing premiums on pre-existing conditions.

AUTO INSURANCE MYTH: COMPREHENSIVE AUTO INSURANCE COVERS THE CAR BUMPER TO BUMPER Belief in this myth is understandable — it’s in the name. But in fact, comprehensive insurance only covers

See Financially Literate Page 32 JUNE 2019

CASE STUDY - KROLL

VIRTUAL CISO HELPS UNDERWRITER SET SOLID STRATEGIC FOUNDATION FOR CYBER MATURITY By Stacy Scott

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

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A commercial insurance underwriter and administration services company with a complex organizational structure was at a crossroads. The company was integrating several acquired businesses with very different cultures when its Chief Information Security Officer (CISO) resigned. At the same time, the company had implemented various budget cuts and an enterprise-wide workforce reduction to include IT staff. The company faced additional cyberspecific challenges in its service model, where specialty insurance programs were primarily distributed through a network of independent third parties. Security functions were managed and divided among IT, security and multiple third parties. Kroll’s virtual CISO (vCISO) was engaged by the company’s general counsel to help lead executives and technical teams in rethinking and advancing a mature cyber security strategy. Understanding the Current State of the Organization’s Strengths and Vulnerabilities

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Initial steps taken by Kroll’s vCISO team: Assessed the organization’s current cyber security posture from multiple angles, including technology assets, staff expertise, policies and procedures, as well as an examination of its culture and willingness to implement change. Baselined the company’s security culture, i.e., the awareness, acceptance and compliance among various stakeholders with cyber security best practices. Issues discovered in this phase included: A prevailing belief that the company was not at risk of being targeted by cyber criminals; Resistance to cyber security measures, such as two-factor authentication, when people felt they were burdensome in conducting everyday business, particularly when traveling; Some industries served by the

See Virtual CISO Page 32

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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

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

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.

SPECIAL REPORT - WILSON ELSER

AUTONOMOUS VEHICLES AND EMERGING TORT IMPLICATIONS By Stephani R. Johnson

road rage. Autonomous cars don’t race other autonomous cars and they don’t go to sleep.” Though people may eventually be safer in autonomous cars than in traditional vehicles, we have a long way to go and a short time to get there.

New technology will undoubtedly improve lives, but it comes with new risks.

esearchers estimate autonomous vehicles (AVs) could reduce accident rates by up to 90 percent, which would save more than 30,000 lives each year and avoid millions of injuries on American roads. Technology can mitigate many of our human weaknesses. According the General Motors Chairman Bob Lutz, “The autonomous car doesn’t drink, doesn’t do drugs, doesn’t text while driving and doesn’t get

Autonomous vehicles inevitably will be involved in accidents, raising new liability questions as to who will be responsible for a car’s “negligence.” The car manufacturer? The maker of the automation component parts, such as sensors, cameras or navigation systems? The person who was in the driver’s seat but not actually driving? All

As the transportation industry evolves to embrace new technologies and products, lawyers representing clients in the industry need to understand new and changing laws, including emerging torts. Only with an understanding of potential claims and defenses can we effectively serve the ever-expanding groups of clients in litigation arising out of personal injury accidents.”

See Autonomous Vehicles Page 44

bout the author: Stephani Johnson is a trial lawyer who has handled multimillion-dollar cases involving catastrophic injuries for more than 25 years. Stephani frequently assists in pre-suit liability investigations and determination of causation at ground level – joining the firm’s Emergency Response Team to investigate accidents and catastrophic events immediately after they occur. Stephani enjoys a well-earned reputation for defending highexposure personal injury claims for a wide array of clients, including retailers, apartment complexes, trucking companies, hospitals and universities. Stephani prides herself on being a “practical” attorney who gets the best results for her clients in the most efficient manner possible.

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CASE STUDY - VALUEMOMENTUM Continued From Page 12

RECOGNIZING THE CHALLENGES trainings with our underwriting team. They got to understand our world, and they never said, ‘No.’” REALIZING THE BENEFITS Today, nearly 500 sales representatives of the company quickly and easily provide their customers with competitive coverage quotes. After filling in a few fields, agents click a button to receive a preliminary price. BizDynamics generates a unique ID number, enabling the underwriters to follow up with a final quote and bind the coverage. The company’s underwriting processes are equally improved. Underwriters appreciate BizDynamics’ intuitive interface, which helps address the company’s unique needs. In addition, the stability, reliability, and performance of ValueMomentum’s platform are contributing significantly to back-office productivity. Overall, the client’s profitability has improved, and risk exposure has been reduced. Offering customers competitively priced insurance coverage is a major program for the

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client, and to help ensure that its policies are adequately rated has had a significant positive impact on the bottom line.

Today, nearly 500 sales representatives of the company quickly and easily provide their customers with competitive coverage quotes. After filling in a few fields, agents click a button to receive a preliminary price. BizDynamics generates a unique ID number, enabling the underwriters to follow up with a final quote and bind the

coverage.”

Moving forward, the client’s insurance operations group is ready to meet new demands. The transportation market is changing rapidly, and the new state-of-the-art insurance quoting process, incorporating the ValueMomentum and ISO® products and services, enables the company to adapt quickly. Ongoing support from ValueMomentum and ISO Electronic Rating Content™ will continue to help the client’s insurance operations remain competitive addressing customer needs while helping to maintain profitability. TABLE OF CONTENTS

ABOUT VALUEMOMENTUM ValueMomentum is an ISO Electronic Rating ContentTM (ERC™) vendor partner. ValueMomentum offers iFoundry Rating and product design to insurers to rapidly launch new ISO-based products, manage ISO circular updates and assess the impact of the updates on their book of business. ValueMomentum also offers insurers BizDynamics Digital Engagement Platform, to enable insurers to digitally engage with agents, customers and employees with out-of-the-box apps for agents and customers, and digitally extend their ISO-based products to their agents and brokers. P/C insurers across all tiers have regained control of their rate plans and extended rate-quote-bind capabilities to agents, digitally, with our cloudbased software. ABOUT ISO Since 1971, ISO has been a leading source of information about property/casualty insurance risk. For a broad spectrum of commercial and personal lines of insurance, ISO provides statistical, actuarial, underwriting, and claims information and analytics; compliance and fraud identification tools; policy language; information about specific locations; and technical services. ISO serves insurers, reinsurers, agents and brokers, insurance regulators, risk managers, and other participants in the property/casualty insurance marketplace. ISO is a Verisk Analytics (Nasdaq:VRSK) business.

www.chart-exchange.com

ANALYSIS - PL COMMUNICATIONS

LIVING YOUR NICHE By Paul Lavenhar

eing a niche player is the way agents knock out incumbents. Businesses sometime have an inertia about their incumbent insurance agent. The agent is familiar, maybe he or she has come through when needed, so why change? Most agents – despite the hype not to – are generalists. They believe focusing on a niche can exclude new opportunities. First, you can focus on specific niches, but still be open to other business. Second, generalists are more likely to lose business when faced with a niche player, then gain business by being all things to everyone.

Successful niche players become the “guy” or the “gal” – meaning they are recognized as an authority in their niche. They are the real deal. They know the ins and outs of the niche for risk management, under or over coverage, and the latest products. They have underwriter relationships, and know how to present a best case to get best coverage at a competitive price. They are problem solvers who have the contacts and the savvy to intervene to take care of a problem whether it is for coverage or claims. I have known several agents who have succeeded as niche players. Those agents are the ones that “live the niche.” They have a real love of the niche where they specialize. One of the best examples I have

bout the author: Paul Lavenhar’s firm PL Communications has provided marketing communications services for 25 years to such insurance clients Rockwood Programs, Capacity Coverage, MetLife, Selective, York Risk Services, and Admiral Insurance, among others. He has has written for 500+ companies in various industries. Paul also leads a band called GoodWorks that provides music and marketing services to help nonprofits raise money and awareness pro bono. Paul Lavenhar is the principal of the insurance marketing communications firm PL Communications.

seen of an agent who “lives the niche” is our client Rich Skorupski of Meeker Sharkey & Hurley in New Jersey whose firm uses our marketing communications services. Rich specializes in nonprofits. He has immersed himself in the nonprofit world, so his client know he gets it. That where it starts. Not just in marketing yourself as an expert, but making every effort to be one. Rich has served on nonprofit boards. He participates in safety meetings. As a result he has learned firsthand about the unique issues nonprofits face such as financial constraints, regulatory changes, employee issues, and more. “Our safety committee is comprised of employees, leadership staff, board members, and our insurance broker Rich Skorupski. Having Rich on that committee is important to us because he is able to provide us with guidance and resources that will help mitigate that risk, and he helps us be more proactive in our approach,” says a client whose nonprofit serves people with intellectual and developmental disabilities.

See Living Your Niche Page 46 www.chart-exchange.com

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ANALYSIS - SIAA

READY TO TAKE YOUR AGENCY INTO THE DIGITAL AGE? About a third of your potential customers will use social media to research your brand. Prospective customers have a multitude of choices when it comes to having their insurance needs met. They can easily opt for the local agent with a large social media following over one with a limited presence.â&#x20AC;?

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Reprinted with permission from SIAA. For more information, contact Doug Coombs, Chief Marketing Officer at SIAA at dougc@siaa.net

Before your insurance agency considers investing in digital marketing services and software, make sure youâ&#x20AC;&#x2122;ve got the basics covered.

Having an effective website is the single most efficient and cost-effective way you can market to potential customers, and an important means for your current customers to find you. Not sure where to start? Cover these 5

igital marketing is becoming more advanced and complex, with a seemingly endless number of resources and tools available. The number of marketing solutions providers continues to increase with technological advances. Deciding where to focus your limited time and marketing dollars can challenge even the savviest business owners. In a recent examination of 100 independent insurance agents on LinkedIn, New Horizons Marketing found that only nine of them had a website. TABLE OF CONTENTS

Doug Coombs, Chief Marketing Officer at SIAA at dougc@siaa.net

basic online marketing necessities before taking on larger, more complex digital marketing strategies: Invest in a mobile-friendly website. Making your website mobile-friendly is an absolute must today. Mobile is

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where your customers are – and where your agency should be too. If that is not compelling enough, consider that Google openly gives preferential treatment to sites that are optimized for

your SEO (search engine optimization) efforts. And don’t forget – ask your best customers for their reviews on these platforms.

having their insurance needs met. They can easily opt for the local agent with a large social media following over one with a limited presence. Make community and staff a key part of your online persona. Local independent agencies and their staff are very often involved in their communities. As more and more business is conducted online, making a personal connection with people is a bit more challenging, but no less important. Community remains a key strength of the local independent agency’s brand.

mobile devices. If your site doesn’t work seamlessly across all devices, you are losing ground in Google search rankings. Claim your business listing on local search and review sites. You can boost your agency’s digital presence by claiming and updating local business listings in major search engines like Google and Bing as well as review sites like Yelp and Facebook for Business. Each online local business index has its own claiming process with unique steps to verify your listing. When filling out the listings, remember that the more consistently you categorize and describe your business, the more it will help www.chart-exchange.com

Don’t use a Gmail, Yahoo or similar email account to conduct business. Personally attached to that AOL email you’ve had for 25 years? Don’t use it for your business! Having an official email associated with your agency’s domain name adds credibility, authenticity and a sense of security in today’s world of data hacks and breaches. Link your website to social media sites. At the very least, this serves to inform people of your social media presence. About a third of your potential customers will use social media to research your brand. Prospective customers have a multitude of choices when it comes to

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Showcase your agency’s team – and interactions with your local community – on your website and social media accounts. Once your agency has its digital marketing basics taken care of, the groundwork has been prepped for some of the more advanced online marketing strategies available. If you’re not there yet, don’t worry. If you are like most local independent agencies, finding the time to dedicate to the complexities of online marketing can be challenging. Starting with the essentials will give you a foundation to build upon. A good start to this is to follow our online marketing checklist.

JUNE 2019

ANALYSIS - VANTAGE AGORA

By Mordeachai Zimberg, CPA

he season is beginning to change, the sun is out longer, the days are getting hotter and moods are lifting. Don’t “Spring” to conclusions too fast…remember we still need to get through tax season first. Who doesn’t love

filing their taxes, filling out the countless forms and adhering to the ever-changing tax regulations? Each year, the IRS makes changes to the ways in which taxes are filed, and this year the “hot topic” is the Standard Deduction increase. The Standard Deduction typically cuts people a break when filing

for taxes and can take thousands of dollars off your tax bill. One thing the IRS understands is that it’s expensive to live. We have mortgages to pay, food to buy, cars to pay for and kids to provide for; All of that can add up rather fast! That’s why Standard Deduction was put in place, allowing some income to be set aside tax-free to help people meet accumulating

See Standard Deduction Rates Page 26

bout the author: Mordeachai Zimberg, CPA, joined the Vantage Agora team in 2016 as the Controller. He dedicates his spare time to assisting local, non-profit organizations and private schools with their accounting processes. With a Master’s degree in Accounting from Cleveland State University, along with several years of experience in the online retail and healthcare industries, Mordechai excels at problem solving and critical thinking.

JUNE 2019

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www.chart-exchange.com

vantage agora

LOWER COSTS www.vantageagora.com

IMPROVE PRODUCTIVITY Vantage Agora delivers solutions that accelerate your company’s growth. We’re your support staff that takes care of all the routine and time-consuming work, so your in-house staff can focus on sales and improving customer experience for your clients. We provide flexible staffing to address seasonal peak periods during the year. With OX Zion, Vantage Agora’s software solution, our team uses Automation and Robotics to drive down processing time and costs. OX Zion gives you the real-time visibility you need to analyze your daily production.

industry solutions

OX ZION business operating system

Insurance Finance Healthcare Manufacturing Education

Actionable Dashboards Customized Solutions Data Analytics Operational Intelligence Visibility and Control

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Technology Helps Brokers Visualize a Bright Future in the London Market Click to Download Informational PDF

JUNE 2019

ANALYSIS - VANTAGE AGORA Continued From Page 24

STANDARD DEDUCTION RATES ARE “SPRINGING” UP costs! Who knew living could be so expensive? When filing for taxes, there are two options for subtracting money from your total incomes and that is either Standard Deduction, or you could itemize your taxes; Meaning, take everything you spent over the course of the year on things like medical expenses, mortgage interest, charitable giving and propery taxes, add it all up and deduct that from your adjusted gross income. Sounds pretty good if you have a lot to itemize right? Especially since prior to this year, the Standard Deduction only accounted for roughly $12,000 (if you were married filing jointly). If you had a lot of expenses (greater than $12,000), then itemizing would have been in your best interest. But wait a minute. It’s a new year, the IRS has yet again changed the rates, and they have done so quite significantly this year. In fact, they

JUNE 2019

have almost doubled the Standard Deduction rates! The rates are now as follows: $12,000 for single tax payers, $18,000 for heads of households, and $24,000 for married filing jointly.

According to the IRS, nearly 60% of tax payers choose Standard Deduction over itemizing. This is pretty good news for most; nearly doubling the amount of taxfree money you get!” Still think itemizing is your best bet? This tax season, it is in many people’s best interest to choose the Standard Deduction route since it can be quite difficult to surpass that $24,000. The Standard Deduction inflation is largely in part due to the IRS’s attempt to keep pace with the inflation rates and tax cuts. TABLE OF CONTENTS

According to the IRS, nearly 60% of tax payers choose Standard Deduction over itemizing. This is pretty good news for most; nearly doubling the amount of tax-free money you get! However, those who pay high property taxes may not be so lucky. Property taxes have been cut off at $10,000; it’s a win for some and a bit of a loss for others, but what do you expect when it comes to taxes? We all know it’s nearly impossible to please everyone. Especially when it comes to dealing with people’s hard-earned dollar. People work hard for their money and want to see a significant return for the work they put in, but what about organizations? They have a ton of money to deal with and it can become quite overwhelming trying to manage taxes, cash flow and reconciliations. Vantage Agora wants to keep you afloat this tax season. Our tax and business experts will do all of the accounting work for you, so you can remain productive at work as well as have a good work/life balance. Whether you’re doing your individual taxes, company taxes, choosing to file using Standard Deduction, or try itemizing your deductions, don’t stress too much because good weather and positive vibes are right around the corner! www.chart-exchange.com

ANALYSIS - KROLL Continued From Page 9

ADMISSIONS SCANDAL INVESTIGATION IS A WAKE-UP CALL TO ALL INSTITUTION procedures. Are your prospective students being admitted or denied pursuant to the holistic review process set forth in your admissions policies? Are your admissions practices consistent with the admissions standards and protocols advertised by the school? Where do gaps exist, and why? Who, outside of the Admissions Office, has influence over admittance decisions? What controls are in place to prevent improper considerations? When you discern gaps or weaknesses in your admissions process, how do you address and fix them? Given the stakes riding on admissions decisions and the pressures faced by students and their parents, university officials, and admissions officers, it is surprising how few schools ever conduct internal audits or comprehensive reviews of their admissions programs. Admissions www.chart-exchange.com

data is too easy to manipulate, false information in application files too easy to include, for auditors to not be included in the control process. At some elite schools, applications are reviewed, and admission decisions made in as little as eight minutes. Admissions officers are not investigators, their role is not to play detective, and they cannot be expected to catch every irregularity. Systems need to be put in place that will prevent abuses and misrepresentations. Integrity in admissions matters. Prospective students and consumers expect that applicants will be considered on their individual merits when applying to college. The Education Department is paying closer attention due to current events, and its interest in this issue extends beyond technical compliance with financial aid guidelines. Schools would be wellserved to pro-actively ensure that their own houses are in order. Now is the time to review your institution’s admissions practices and procedures and take steps to minimize identified vulnerabilities by doing the following: •

•

Conduct an independent review of all admissions policies and procedures, marketing and recruiting materials, information published on websites, and data provided to accrediting agencies and external reviewers. Review policies and procedures governing recruitment and the interactions among applicants, admissions officers, TABLE OF CONTENTS

•

and other persons involved in the process, including internal recommenders. Identify any gaps in information flows, recordkeeping, verification, or other procedures that risk circumventing the admissions process and control systems. Perform data analytics to help identify anomalies in admissions profiles or data. Revise admissions policies and practices to sufficiently address any gaps or vulnerabilities in accordance with best practices. Implement a system of internal audits and controls to ensure compliance with the revised policies and procedures.

The process of selecting students for admission is a critical component of how colleges and universities across the country fulfill their mission. Most schools seek to admit a talented and diverse group of students who are well-prepared for and positioned to succeed in a challenging academic environment. Ensuring that the admissions process is administered with integrity and fairness and considers each applicant solely on his or her individual merit apart from outside pressures or external influences is an important component of university admissions. At least, that is what most institutions of American higher education publicly proclaim. Recent events have challenged institutions to look inward and correct discrepancies between stated protocol and reality. Is your school up for the challenge? JUNE 2019

ANALYSIS - FORTEGRA

SO, YOU THINK YOU WANT TO BE AN UNDERWRITER? By Cooper Wallach

onday nights you can catch So You Think You Can Dance on FOX, a show in which a panel of industry experts judge contestants’ ability to cut a rug. Their skill level (or lack thereof) on full display for the judges, a studio audience, and millions of viewers, there’s no hiding the fakers from the rainmakers on the show. Each year the insurance industry requires the infusion of new underwriters to fill the shoes of experienced underwriters who are hanging them up to enjoy retirement. Similarly to the contestants on Dance, separating the contenders who are ready to perform from the pretenders who aren’t just yet is pretty easy. But

those in the latter group who stick it out, exhibit patience and humility, and work with seasoned underwriting veterans to develop their skills can learn all the right moves.

will apply the premiums of many to the claims of few, and the standard coverage types can be broken into a few broad categories: •

Basic Steps and Complex Routines The fundamental goal of an underwriter is to generate profit on a growing portfolio. But it’s more complex than that. Much like dance, underwriting is an art that requires precise execution and delicate transitions. It consists of a series of evaluations and decisions that determine the acceptance or rejection of a risk. Once a risk is determined to be within an underwriter’s appetite, he or she decides the price of that risk or premium.

• •

Commercial Property & Casualty insurance for businesses; Personal Property & Casualty insurance for home and auto; and Healthcare Insurance for families.

It’s when you dive deeper into the routines, however, that you find infinite, customized coverage options that require even greater skill. And, like the complexity of the most challenging dance styles, it’s all about making the right moves at the right time. LEAD AND FOLLOW

Precise execution and delicate transitions, yes; but the basic steps haven’t really changed since the very first insurance policy sold. Traditionally, insurance companies

As insurance providers we have a captive audience that spends billions

See Be An Underwriter? Page 36

bout the author: Cooper Wallach is Vice President of Specialty Products and Programs at Fortegra where he manages the promotion and execution of property and casualty programs with the company’s MGA partners. A graduate of the University of Texas with degrees in business management and business administration, Cooper calls upon more than 30 years of underwriting expertise to help Fortegra partners Experience More.

JUNE 2019

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www.chart-exchange.com

YO U R PA RT N E R F O R A D M I T T E D M A R K E T C A PAC I T Y PROGRAM CARRIER WITH

1.1 BILLION

IN TOTAL SALES

A- RATING A.M. BEST

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

PREMIUM FINANCE

ADMITTED

INSURANCE COMPANIES

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

CREDIT P RO G R A M S

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

As a CHART 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.

TITLE

JUNE 2019

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www.chart-exchange.com

ANALYSIS - LAURDAN ASSOCIATES

SEXUAL HARASSMENT: UPDATE FOR EMPLOYERS Sexual harassment affects all employers, employees, the public, and the community at large. Is your organization prepared? Has your organization taken the necessary steps control this liability?

omplaints of workplace sexual harassment continue to capture the attention of the American public, the press, and — in too many cases — the courts. From the nation’s factories to Wall Street, from the shop floor to the boardroom, and from the Congress to the military, charges of sexual harassment have become commonplace. In fiscal year 2018, more than 7,600 sexual harassment claims were filed with the Equal Employment Opportunity

Commission (EEOC) and state and local human relations commissions exposing employers to significant financial liabilities. However, the dollar amounts of these awards, settlements, and legal fees are only the direct financial costs related to sexual harassment claims. Increasingly, the cost of resolving a sexual harassment claim includes the loss of managerial prerogatives as the courts, government agencies, and third parties gain control

over employment decisions that traditionally have been the sole province of the employer. Additionally, where sexual harassment includes the display or transmittal of child pornography, the organization may face criminal sanctions and civil liabilities. Perhaps even more important than the potential direct financial costs,

See Sexual Harassment Page 38

bout the author: Ronald Adler is the president-CEO of Laurdan Associates, Inc., a veteran owned, human resources management consulting. Ronald Adler is the president-CEO of Laurdan Associates, Inc., a veteran owned, human resources management consulting firm specializing in HR audits, employment practices liability risk management, HR metrics and benchmarking, strategic HR, and unemployment insurance cost management. Mr. Adler has more than 45 years of HR consulting experience working with U.S. and international firms, small businesses and non-profits, insurance companies and brokers, and employer organizations. Mr. Adler is the developer the EmploymentLabor Law Audit™ (ELLA®), the nation’s leading HR auditing and employment practices liability risk assessment tool — now in the tenth edition. g firm specializing in HR audits, employment practices liability risk management, HR metrics and benchmarking, strategic HR, and unemployment insurance cost management. Mr. Adler has more than 45 years of HR consulting experience working with U.S. and international firms, small businesses and non-profits, insurance companies and brokers, and employer organizations.

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JUNE 2019

NEWS Continued From Page 16

VIRTUAL CISO HELPS UNDERWRITER SET SOLID STRATEGIC FOUNDATION FOR CYBER MATURITY company had controversial aspects that could provoke philosophy-driven cyber attacks (cyber activism); Inconsistent application of cyber security measures across the company; and Uneven participation by various company functional areas in cyber security decision-making. Executive Leadership to Help the Company Undertake Pragmatic Cyber Security Measures Technical and strategic actions led by Kroll’s vCISO crossed departments and seniority levels to achieve wider adoption: Moved CISO position and cyber security function under the general counsel to reflect risk management role and balance business operations.

JUNE 2019

Reformed a Security Committee with representatives across the enterprise to connect the organization in decision making. Shared insights from Kroll’s global fieldwork to underscore why and how the organization was at real risk for cyber attacks. Demonstrated how to translate best practices into effective policies and procedures; revamped information security policies. Led an incident response tabletop exercise with the Security Committee and the technical IT and security teams; the simulations produced eyeopening realizations of the complexity involved in the response. Outlined a strategy to move forward, prioritizing threat detection and response. Addressed security issues related to potentially controversial policyholders. Put in place a third-party cyber risk management plan to gauge and mitigate risk posed by vendor and comply with regulations; risk-ranked parties according to best practice criteria (CIS Controls™), and set up initial questionnaires and ongoing monitoring accordingly. The annual survey, the largest ever conducted by the insurance sector, is intended to help Lloyd’s understand the working cultures that exist across the Lloyd’s market, including standards of behaviour and conduct, and to inform further action. The confidential survey will run until 31 May 2019, after which the outcome and resulting action

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Continued From Page 15

HOW FINANCIALLY LITERATE ARE YOUR CUSTOMERS? a narrow range of circumstances, such as theft, storm damage, vandalism and animal collisions. MYTH: IF YOU LEND YOUR CAR TO ANOTHER INSURED DRIVER, THEIR INSURANCE WILL COVER ANY ACCIDENTS OR DAMAGE The reality is that the owner’s policy covers damage, no matter who’s behind the wheel. So if your buddy totals your car, you’re on the hook for any increases in premiums as a result.

TIME TO REACH OUT Take the opportunity to disabuse your clients of their insurance myths. You’ll help them make better choices, and at the same time, you could find more opportunities to provide choices that will work out better for both of you. You can find a lot of resources about insurance at our website, Cost Financial Group.

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

888-235-3525 www.nsminc.com

JUNE 2019

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NEWS - VALUEMOMENTUM

VALUEMOMENTUM EXPERIENCED 31% REVENUE GROWTH IN FISCAL YEAR 2018 Notable growth is led by digital, data and core transformation initiatives

alueMomentum Inc., a leading provider of software and services to Insurance, Healthcare and Financial Services firms, today announced unprecedented 31% growth in overall business for its fiscal year ending March 31st, 2019. Growth was led by digital transformation, cloud adoption, data modernization and core transformation projects at existing and new clients. Notably, clients increasingly entrusted ValueMomentum with end-to-end digital initiatives, including engagement on one end and automation on the other. ValueMomentum’s team grew to approximately 2,500 associates during this period. ValueMomentum reorganized its team last year to bring sharper focus on its offerings, with a charter to drive increased speed & value to our clients. This reorganization allowed further specialization and the

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development of targeted solutions for ValueMomentum’s Insurance, Banking & Healthcare markets to drive momentum to our clients’ digital, data & core transformation initiatives.

ensure they achieve their business goals, together enable us to form deep and lasting partnerships with our clients.”

With regards to Insurance, ValueMomentum’s largest vertical, Matthew Josefowicz, President ValueMomentum provides software and CEO of Novarica says, “Insurers are starting to shift from core to and services to Insurance, digital, data and security. Plans Healthcare & Financial for cloud deployments are also Services firms. Customers increasing in 2019. As insurers on digital transformation choose ValueMomentum embark journeys to optimize their IT due to the company’s and bring efficiencies to their track record of delivering operations, vendors that sharpen their capabilities in analytics, value and driving the digital and speed to market will momentum of customers’ be better equipped to meet the business initiatives.“ demands of insurer clients.”

“Our business model as a specialist providing industry-focused IT services and solutions to the verticals we compete in has played a pivotal role in ValueMomentum’s accelerated growth,” said Kalyan Kodali, ValueMomentum’s Chief Executive Officer. “Our deep industry experience & technical expertise, and more importantly, our relentless focus on providing the attention and care to each client to TABLE OF CONTENTS

HIGHLIGHTS OF KEY WINS FROM 2018 INCLUDE: •

•

Several large projects with a tier 1 client to migrate their data center to the cloud Engagement to develop cloud native applications for a specialty insurance underwriter

See ValueMomentum Page 42 JUNE 2019

ANALYSIS - FORTEGRA Continued From Page 28

Before I reveal this underwriting “secret”, consider these questions: •

SO YOU WANT TO BE AN UNDERWRITER? of dollars each year on a variety of coverage options—and they’re looking to us to show them the way. Thankfully, the industry has developed tools to help one lead. The accessibility of useful data is at an all-time high, and advancements like artificial intelligence can help an underwriter diagram a difficult routine. However, many insurance companies are misapplying these tools and choreographing the same routine no matter the partner, grouping similar risks with similar pricing and servicing and expecting them all to make money. Their actuaries are using written premium, payment, and reserving trends, letting computers take the lead rather than underwriters, and assuming they’ll be able to repeat a routine over and over to generate profitable results. But there’s something missing that plays a key role in the ability to make a profit. What’s missing?

JUNE 2019

•

Do you go to the same hair stylist each time you need a haircut, styling, or hair color? How long have you been going to the same stylist? One year? Five years? 10 years? Do you know your stylist’s name? Marital status? How many children they have? As a regular customer, do you really care how much you pay? Why do you keep coming back?

CHART DEFENDER COVERHOLDER E&O AVAILABLE NOW!

• • These questions identify an important point: people dance with people they know, like, and trust. If you like someone and the product or service they provide meets your needs, you keep coming back. The cost is secondary to the comfort of knowing you’re well taken care of and that you can trust the provider, whether it’s your mechanic, your doctor, your financial advisor, or your insurance agent.

The “secret” is the underwriter. While new data and technology tools are terrific, they can’t replace the importance of an underwriter who can show the way. Underwriters who get along with their producers write more premium, produce better loss ratios, and enjoy retention and pricing that exceeds industry averages.

Mark Lann Phone:

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

So, you think you want to be an underwriter? It’s more difficult than mastering a few steps. But by developing your skills and building relationships with business partners, you can learn the right moves for underwriting success.

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NEWS - LLOYD’S OF LONDON

LLOYD’S LAUNCHES INSURANCE INDUSTRY’S LARGEST EVER CULTURE SURVEY Lloyd’s, the world’s specialist insurance market, has commissioned the Banking Standards Board (BSB) to conduct an independent, market-wide culture survey on its behalf.

he annual survey, the largest ever conducted by the insurance sector, is intended to help Lloyd’s understand the working cultures that exist across the Lloyd’s market, including standards of behaviour and conduct, and to inform further action. The confidential survey will run until 31 May 2019, after which the outcome and resulting action plan will be reported back to the market. The survey is part of Lloyd’s five-point plan , announced in March this year, to create an inclusive and innovative culture, and ensure the market can attract, motivate and retain the best talent.

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Insurance Brokers Association (LIIBA).

Lloyd’s Chief Executive, John Neal

The plan was developed in collaboration with and endorsed by Lloyd’s Board and Council, and by the associations representing the Lloyd’s market – Lloyd’s Market Association (LMA) and the London & International

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Lloyd’s Chief Executive, John Neal, said, “This survey, the largest of its kind, will help us build the most comprehensive picture of the culture within the insurance industry ever commissioned, and will guide Lloyd’s as we put in place further measures to build a diverse and inclusive market in which everyone is respected and valued. This will ensure the market can attract, motivate and retain the best talent, which is essential for building the future at Lloyd’s.”

Click here and respond to the survey.

JUNE 2019

ANALYSIS - LAURDAN ASSOCIATES

SEXUAL HARASSMENT: UPDATE FOR EMPLOYERS

conduct is made either explicitly or implicitly a term or condition of an individual’s employment, submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual, or such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.” In its “Facts about Sexual Harassment” the EEOC notes that sexual harassment can occur in a variety of circumstances, including but not limited to:

•

employer, a supervisor in another area, a co-worker, or a non-employee. The victim does not have to be the person harassed but could be anyone affected by the offensive conduct. Unlawful sexual harassment may occur without economic injury to or the discharge of the victim. The harasser’s conduct must be unwelcomed.

In its landmark 1986 decision in are the often unrecognized and Meritor Savings Bank, the U.S. uncalculated organizational costs Supreme Court officially recognized of sexual harassment. Studies have sexual harassment as a form of sex shown that sexual harassment discrimination prohibited under causes increased absenteeism, Title VII of the Civil higher medical Rights Act of 1964. expenses, and The Supreme Court increased turnover. unanimously held Organizations that victims of a should add to “sexually hostile these costs, the environment” adverse impact may state a claim sexual harassment of unlawful sex has on employee discrimination. morale and employee relations, The enactment on productivity of the 1991 and business Amendments to competitiveness, on the Civil Rights customer, public, Act increased the and stockholder According to the Rape, Abuse & Incest National Network, potential incident relations, and on or RAINN, every 107 seconds, an American is sexually assaulted. and severity of the organization’s sexual harassment employment brand. charges and lawsuits by providing • The victim, as well as the for jury trials and allowing, in The EEOC’s guidelines define harasser, may be a woman or addition to back pay awards, awards sexual harassment as “[u]nwelcome man. The victim does not have for compensatory and punitive sexual advances, requests for to be of the opposite sex. damages that can range from sexual favors, and other verbal • The harasser can be the victim’s $50,000 to $300,000, depending on or physical conduct of a sexual supervisor, an agent of the the size of employer’s work force. nature …when submission to such

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Image Credit: US Army Link

Continued From Page 31

In 1998, the U.S. Supreme Court in Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth held that an employer may be liable for sexual misconduct committed by its managers, supervisors, and other employees even though the employer did not have knowledge of such improper conduct. In its decisions, the Supreme Court left little doubt that employers have a responsibility for creating a workplace free of sexual harassment. Where a supervisor’s harassment culminates in an adverse “tangible employment action,” such as discharge, demotion, or undesirable reassignment, an employer will have “no affirmative defense.” However, where a supervisor’s harassment does not constitute an adverse tangible employment action, an employer can avoid or reduce its liability by demonstrating: • That it has taken “reasonable care” to prevent sexual harassment; • That it has promulgated and effectively communicated its anti-sexual harassment policy and its commitment to a sexual harassment-free workplace; • That it has created an environment that encourages employees to come forward with complaints, and that the plaintiff employee has unreasonably failed to take advantage of the employer’s www.chart-exchange.com

•

preventive or corrective measures; and That it takes prompt action to stop and deter sexual harassment.

More recently, the U.S. Supreme Court also addressed the standard required to prove a violation of the anti-retaliation provisions of Title VII. In Burlington Northern & Santa Fe Railway Company v. White, the Supreme Court held that a plaintiff suing under the anti-retaliation provision of Title VII “…must show that a reasonable employee would have found the challenged action materially adverse.” In the context of this case, the Supreme Court stated that this standard means the action may have “dissuaded a reasonable worker from making or supporting a charge of discrimination.” Sexual harassment affects all employers, employees, the public, and the community at large. States are increasingly stepping in. Employers in California, Connecticut Maine, Delaware, New York, and New York City are now required to conducted sexual harassment training programs. More states are likely to be added to this list. Is your organization prepared? Has your organization taken the necessary steps control this liability? For more information, please contact Ronald Adler, PresidentCEO, Laurdan Associates, Inc., at 301-762-5794 or radler@ laurdan.com 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.

JUNE 2019

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 - VALUEMOMENTUM Continued From Page 35

VALUEMOMENTUM GROWS REVENUE 31% IN FISCAL YEAR 2018

CLIENT RECOGNITIONS BY ANALYSTS IN 2018 INCLUDED: •

•

• •

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Legacy modernization engagement for a tier 1 insurance carrier’s commercial lines quote & application system for agents, involving a low-code application development platform and API gateway technology for integration with enterprise rating and print engine Several API modernization engagements for several midtier insurance carriers and an Open Banking API initiative with a mid-tier bank Data platform modernization project for a midtier property/casualty carrier, including migrating their on premise data lake to a cloud native architecture Data lake implementation engagement with a tier 1 health payer, including a data quality solution for ingestion of data into the data lake Several mid-tier insurance client core modernization engagements involving analysis, implementation, integration, testing and application management

JUNE 2019

Novarica Case Study Compendium 2018: ERIE Insurance – commercial lines agent portal Novarica Case Study Compendium 2018: Acuity Insurance Customer Correspondence Automation Celent Model Insurer Award 2019: ERIE Insurance – commercial account quote & application system (QAS)

CHART DEFENDER COVERHOLDER E&O AVAILABLE NOW!

Going into 2019, ValueMomentum plans to continue its investment in industry-focused R&D efforts and employee development. The company is hyper focused on advancing the knowledge and skills of its team to deliver value and drive momentum to all existing, new and potential customers in Insurance, Healthcare and Financial Services. 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:// www.valuemomentum.com.

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Mark Lann Phone:

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

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NEWS - VALUEMOMENTUM

VALUEMOMENTUM SELECTS ERIE AS SITE OF REGIONAL DEVELOPMENT CENTER ValueMomentum is expanding its reach with a new regional development center to be located in Erie, Pennsylvania

ew Jersey-based IT services and software solutions provider ValueMomentum is expanding its reach with a new regional development center to be located in Erie, Pennsylvania. Erie’s healthy mix of educational institutions, attractive cost of living index and health care services, and good K-12 schools make it the perfect candidate for ValueMomentum’s U.S.based regional development center. With more than 2500 employees throughout North America and Asia, ValueMomentum has been looking to expand its presence via regional development centers. This is part of a long-term plan for investing in talent development to meet market

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demands for digital, data and cloud technologies. The company credits its existing relationship with Erie Insurance®, its integration in the Erie community and the overwhelmingly positive response from local leaders as key drivers for selecting northwest Pennsylvania as the location. ValueMomentum considered several other locations before zeroing in on Erie.

continued growth for the future, “said ValueMomentum’s Chief Executive Officer, Kalyan Kodali. ValueMomentum is investing upwards of $5M in this project with plans to hire 100 associates over three years. A team of approximately 30 associates will begin operating out of a temporary facility on June 1, 2019. In parallel, ValueMomentum is in the process of procuring an office space in downtown Erie, which will be operational by early 2020. ABOUT VALUEMOMENTUM

“This is not only an exciting time for us, but it’s an exciting time to come to Erie with all of the change taking shape. ValueMomentum has experienced tremendous growth in the past several years and we are confident our new Erie location will be another key factor in our

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ValueMomentum provides software and services to insurance, health care and 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:// www.valuemomentum.com.

JUNE 2019

SPECIAL REPORT - WILSON ELSER Continued From Page 19

AUTONOMOUS VEHICLES AND EMERGING TORT IMPLICATIONS

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Can a manufacturer be subject to liability for not preventing an accident, even though its technology did not cause the harm? What happens when the AV follows the driving rules of the road and other drivers do not? For example, the AV: •

• •

three? Litigation over autonomous vehicles is in its infancy; but we can expect negligence and product liability lawsuits, not to mention statutory claims as the government begins regulating. AMONG THE QUESTIONS AND ISSUES THAT LIKELY WILL ARISE ARE: •

Who is responsible if a driver falls asleep and the vehicle’s driver monitoring systems fails to wake up the driver? •

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Can a driver legally rely on this feature (or lane or brake assist) and sue the manufacturer when the car does not alert him or her to a hazard? Should the driver be absolved of his or her own negligence?

JUNE 2019

•

accident will control in determining whether the operator could have prevented the accident. Traditionally, car accidents are assessed through the lens of driver negligence, with the potential for product liability only when a defect

Drives the posted speed on the highway when the flow of traffic is faster Slows to a stop at a yellow light Stops for a full three seconds at a stop sign.

Negligent entrustment − can an owner of an AV be liable for loaning the AV to an operator unfamiliar with the automated features and an accident occurs? •

Can a driver operate an AV while intoxicated?

MAKING THE RULES The immediate question is how liability will be addressed over the next several decades as we transition to the use of fully automated cars. During this period, humans and self-driving cars will share the roads and the responsibility for and control over driving decisions. Under general tort law principles, the element of control is likely to be determinative. The question of how much control the operator had or should have had over the car at the time of the

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in the car causes the accident or is alleged to have exacerbated the injuries. A manufacturer has never had a duty “to design an accidentproof or fool-proof vehicle.” Some suggest negligence should govern liability for car accidents, whether due to the decision-making of autonomous vehicles or human drivers. www.chart-exchange.com

A negligence assessment would focus on whether the car’s decision or act showed a lack of reasonable care under the circumstances, not whether the computer could have been better designed. After an accident, a car’s programming

and should use as an analogy for autonomous vehicles for liability purposes. These include analogies with elevators, autopilot systems and human beings. In his book Putting the Reins on Autonomous Vehicle Liability (North Carolina Journal of Law & Technology, Vol.

Both horses and self-driving cars can perceive their environment, misunderstand their surroundings, and make dangerous maneuvers independent of the human operator’s will. For example, in Alpha Construction v. Brannon, 337 SW2d 790 (Ky. 1960), a horse walking on the side of a road was frightened by loud noises from a truck and galloped into the street causing an accident; in one of two fatal Tesla accidents in Florida in March 2019, the autonomous vehicle “saw” a white truck against a bright sky, thought it was not dangerous and drove straight into the truck. King analogizes in both cases a failure to make what most humans would consider a common-sense interpretation of the dangers. The resulting maneuvers were caused by a lack of adequate intelligence to genuinely understand the surroundings. Horses and autonomous vehicles are property, owned and operated by regular consumers who can lend or lease them to another.

can be updated to account for any new information gained to help AVs make better decisions going forward. ANALYZING A POTENTIAL ANALOGY Numerous theories have been proffered on what courts can www.chart-exchange.com

19, December 2017), David King proposes we analogize AV liability with how courts handle a long history of accidents involving equine transportation. According to King, comparing autonomous vehicles with transportation by horse is a superior yet overlooked analogy for liability purposes.

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As the transportation industry evolves to embrace new technologies and products, lawyers representing clients in the industry need to understand new and changing laws, including emerging torts. Only with an understanding of potential claims and defenses can we effectively serve the everexpanding groups of clients in litigation arising out of personal injury accidents.

JUNE 2019

ANALYSIS -PL COMMUNICATIONS Continued From Page 21

LIVING YOUR NICHE

This change has raised risk management issues. If agencies create new services that are more suited to fee-for service, their coverage may need to be adjusted. With budgets tighter than ever, getting the most bang for the insurance buck is even more important than it usually is. In that environment being able to be a trusted advisor and counselor that

is an extension of the nonprofit’s team is invaluable. A niche specialist can do that, a generalist cannot. “Rich has a wealth of knowledge in the industry with regards to safety and insurance coverage. He’s always there to provide feedback and get us information on different goals that we’re looking to achieve. He understands the non-profit industry and how we operate,” says one of his clients from a facility specializing in serving clients with special needs.

Niche by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

In New Jersey nonprofits have had to change their entire business model from receiving block grants from funders to fee-for-service getting paid as you go funding.

That affects cash flow as well as forcing nonprofits to cut services where the fee-for-service model is not self-sustaining – even if it is an important service for clients.

JUNE 2019

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A smart niche insurance guy like Rich also knows how to make his expertise known beyond his circle of clients. He has established himself as a resource. When you Google him, you see on LinkedIn he is a “Nonprofit Practice Leader.” His profile includes testimonials from nonprofit clients and lists his volunteer work. He goes to industry events, not just as exhibitor for his firm, but to interact with current and prospective clients. Recently he did a presentation on cyber coverage at a conference – but he geared it specifically towards nonprofit issues like privacy and HIPAA. He attends his nonprofit clients’ fundraising events. They publicize his support, which other nonprofits respect and seek out. Rich has access to products that differentiate him from other agents. He was appointed by Philadelphia Insurance as a preferred agent. He offers his nonprofit clients specialized products that reduce workers compensation costs, provide access to risk management support, reduce fleet insurance costs, and cover potentially costly regulatory billing investigations. Our marketing communications firm PL Communications has worked

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with Rich to establish a strong presence online and produce sales materials for presentations focused on his nonprofit niche. His online marketing efforts starts with dedicated website pages for nonprofits. On Facebook he supports his nonprofit clients by posting their events including ones his firm is actively supporting. He has sell sheets that do more than sell – they address specific industry issues in depth. He has conducted webinars and has an interview on YouTube explaining his approach to nonprofits. In addition, he works with his firm’s benefits team to cross sell their services. Most important, Rich says he really does love what he does. “As I've grown the book of business working with nonprofits, I find that the work that we do is rewarding and truly appreciated by them because they've had limited resources. Anything that you can do to help them accomplish their mission is even more appreciated than we normally would find with some of our other businesses.” That’s “living the niche.” Paul Lavenhar is the principal of the insurance marketing communications firm PL Communications.

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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.

JUNE 2019

LLOYDâ&#x20AC;&#x2122;S OF LONDON

phogel from germany [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)] JUNE 2019

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