The CHART Exchange May 2019 by The CHART Exchange

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

CHART DEFENDER SETS THE BAR IN COMPREHENSIVE SPECIALIST E&O

CHANGES IN LABOR AND EMPLOYMENT BILLS AFFECTING CONNECTICUT EMPLOYERS

SUMMIT RISK ADVISORS COMPLETES $100MM RECAPITALIZATION WITH COLBECK

IT’S SPRING! CHECKLIST FOR ANNUAL TECH MAINTENANCE

MANAGING PERSONALITY CLASHES

WHY CROSSEXAMINATION AND ALCOHOL DON’T MIX

SPECIAL REPORT: IS THE DOCTOR IN? MEDICAL MALPRACTICE ISSUES IN THE AGE OF TELEMEDICINE

IS YOUR WEBSITE HURTING YOU OR HELPING YOU?

PRECISION-DRIVEN DRONE IMAGING

THE CLAIM ADJUSTMENT PROCESS: A MULLET OF A RELATIONSHIP

THIRD-PARTY DUE DILIGENCE TO MITIGATE RISKS POSED BY OVERSEAS DEFENSE CONTRACTORS

LLOYD’S REVEALS BOLD NEW STRATEGY FOR ITS FUTURE

AI AND ROBOTS CREATE NEW RISKS AND OPPORTUNITIES

Photo by Oleg Magni from Pexelscampaign=image&amp;utm_content=1900570”>Walkerssk</a> from <a href=”https://pixabay.com/?utm_

“Medical Malpractice - Malpractice” by weiss_paarz_photos is licensed under CC BY-SA 2.0

SPECIAL REPORT: IS THE DOCTOR IN? MEDICAL MALPRACTICE ISSUES IN THE AGE OF TELEMEDICINE

MAY 2019 VOLUME 4 - ISSUE 5 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 DEFENDER SETS THE BAR FOR COMPREHENSIVE, SPECIALIST E&O Wilson Elser’s commitment to our insureds does not stop at claims administration. Agencies securing their E&O coverage through the CHART Defender will also be able to utilize the firm’s expertise in establishing sound business practices and operating procedures.”

arlier this year, we announced a “re-imagining” of The CHART Exchange – one that was more client-centered. One of the new innovations launched under our new charter was done to benefit those specialist agencies doing business with the London market. Branded as the CHART Defender, this innovative Errors and Omissions (E&O) product is underwritten by Certain Underwriters at Lloyd’s and was designed by Rockwood Programs, a Lloyd’s Coverholder and CHART Exchange member, to address the unique professional liability exposures that Coverholders face. Some of the unique features of this new product offering:

Glenn W. Clark, CPCU Publisher & Earliest Adopter

• • • • • •

• • •

Defense costs in addition to the limits of liability First Dollar Defense (loss-only deductible) Aggregate deductible Coverage for unintentional breach of underwriting authorities No insolvency exclusion Broad definition of “Professional Services” to include Lloyd’s Coverholder activities, notary services, premium financing, and risk management/loss control activities. Automatic coverage for Independent Contractors Punitive damages (where allowable by law) 50% reduction of deductible if

Wolfmann, MeToo hashtag digital text on RGB screen 2017-12-09 version 12, CC BY-SA 4.0

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•

claim resolved through mediation Additional coverages included outside of the policy limit (separate sub-limits apply): defense costs for regulatory proceedings, litigation expense reimbursement, and subpoena expense reimbursement. Pre-claims hotline available to all policy holders

The product has been called the CHART Defender to underscore the most important differentiating factor of this E&O offering: policyholders will know in advance who will serve as their advocate in the event of a loss. CHART Defender’s claims administrator is Wilson Elser, a nationally recognized “Top 50” law firm with over 800 attorneys in 31 offices across the United States and in London. Wilson Elser has exceptional experience in aggressively and professionally handling litigation and other proceedings so that our insureds get the most effective defense possible.

The true litmus test of any insurance policy is how well it responds in the event of a loss. When a claim does occur, would you rather have a specialist advocate to protect you and your livelihood, or some anonymous staff attorney randomly assigned to your case? Wilson Elser’s commitment to our insureds does not stop at claims administration. Agencies securing their E&O coverage through the CHART Defender will also be able to utilize the firm’s expertise in establishing sound business practices and operating procedures. A proprietary risk mitigation hotline will be available to our policyholders. This facility will be staffed by legal experts who can provide assistance on potential problems before they become losses. This hotline feature is free to our insureds.

The CHART Defender E&O program is open for business now. The product is being administered by Rockwood Brokerage – a division of Rockwood Programs. Firms interested in learning more about CHART Defender, the process of getting a program completed in Lloyd’s and becoming a Lloyd’s Coverholder or membership in the Chart Exchange can contact Mark Lann at 305-248-9495, via e-mail at chart.eo@rockwoodinsurance.com or on Rockwood Brokerage’s website – www.rockwoodbrokerage.com/ chartdefender.html Be sure to check out next month’s edition of this Magazine to learn more about CHART’s new London Brokerage capabilities!

Glenn W. Clark , CPCU CHART’S Earliest Adopter

www.chart-exchange.com

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MAY 2019

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

MAY 2019

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www.chart-exchange.com

ANALYSIS - WILSON ELSER

CHANGES IN LABOR AND EMPLOYMENT BILLS AFFECTING CONNECTICUT EMPLOYERS By Stephen P. Brown

shift or during the 11-hour period following the end of the employee’s awmakers in Connecticut are shift that spanned two days. If the considering several proposed employee consents to this shift, the bills in the state House and employer must obtain the consent in Senate that would significantly writing and the employee must be impact employers if enacted. compensated at time and a half for the hours worked during the shift. ON-CALL SHIFT SCHEDULING On a related note, voluntary written consent is required if The House and Senate an employer wishes to Although these proposed legislation bills are not yet schedule an employee that would require without giving three law in Connecticut, hourly workers to be days’ notice. employers should paid if their shifts are

L A

bout the author: Steve Brown has a diverse civil litigation practice representing clients in a variety of industries in state and federal courts in Connecticut and across the country. During his career, Steve has represented and advised clients in litigation matters involving a wide array of subject matter areas and substantive legal issues. These include insurance coverage, professional liability, employment issues, fair housing and discrimination claims, general liability, medical malpractice, transportation, construction, and environmental and toxic tort matters. He has extensive, handson courtroom experience arguing complex, high-exposure cases in trials, arbitrations, mediations and appeals.

www.chart-exchange.com

be proactive about cancelled on short Lastly, the bill proposes notice. An employer evaluating their would have to pay employee handbooks that covered employers employees half their pending the changes. keep records showing the shifts worked hourly regular rate for With a Democratic each day and week by any scheduled work majority in the every employee, each hours they do not work House and Senate employee’s schedule because the employer and a newly elected and any changes to cancels or reduces the Democratic governor, an employee’s work employees’ work hours it seems likely that schedule. when the employee these employeehas already reported friendly bills will pass.” A similar bill was struck to work or has not down by lawmakers received a three-day last year. However, Democrats now notice from the employer. have the numbers to pass the bill this year. Further, this bill requires an 11-hour break between shifts. Specifically, an employee may decline to work a shift that begins less than 11 hours after the end of the employee’s previous day’s

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See Changes In Labor Bills Page 25 MAY 2019

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

NEWS -M&A SERVICES

SUMMIT RISK ADVISORS COMPLETES $100MM RECAPITALIZATION WITH COLBECK

ew York, NY, March , 2019 – Summit Risk Advisors (“Summit”),previously SEK Holding Company, LLC has completed a $100,000,000 recapitalization and senior debt facility with Colbeck Capital Management (“Colbeck”), to finance the acquisition of nine retail insurance agencies, consolidate ownership, and to provide a delayed draw facility for future insurance agency acquisitions. Summit is the parent Company of Sawicki Insurance Agency, and their affiliates with offices throughout Connecticut, Florida, Georgia, Tennessee, Louisiana, and California. Josh Sawicki, CEO, states “This is a very exciting time for the Company as we look to greatly expand and grow our agency base, product offerings, and institutionalize our corporate structure and senior leadership team. I especially want to thank Ben Pappas, COO of Summit, and Luke Vande Guchte of Colbeck for their tireless effort and dedication to the project.” The Company is a large independent retail insurance agency that offers personal lines, small commercial www.chart-exchange.com

lines, and life and health insurance throughout the Southeast, New England, and California. Rob Gallivan, a Managing Director of Colbeck, said “We are excited to work with Summit to provide the capital allowing them to build on their previous successes and to fuel the next phase of the Company’s growth.” http://srisk.com or Josh Sawicki at joshua@srisk.com . Merger & Acquisition Capital Services, LLC, served as the sole financial advisor to Summit. Shipman & Goodwin, LLP acted as legal advisor to Summit. Schulte, Roth & Zabel acted as legal counsel to Colbeck. Colbeck delivers creative, flexible solutions to unmet corporate financing requirements. Colbeck originates debt capital solutions custom-tailored to the corporate finance needs of borrowers, focusing on situations that are beyond the capacity of traditional lenders. Colbeck’s partnership approach with entrepreneurs, management teams, and equity sponsors delivers fully-underwritten financing facilities to borrowers. Colbeck specializes TABLE OF CONTENTS

in financing situations that would characterize themselves as: time sensitive, under-banked, complex, non-traditional, management buyouts, and rollups. http://colbeck. com/ ABOUT MERGER & ACQUISITION SERVICES, INC. Merger & Acquisition Services, Inc. is a specialist advisory and financial services Firm to the insurance and reinsurance industry, with offices in New York, Connecticut, Georgia & Cayman Islands. Founded in 1999, the Firm and its affiliates provides investment banking and insurance consulting services globally, including; merger & acquisition advisory capital raising, valuations, program placement/fronting, and reinsurance advisory. Merger & Acquisition Capital Services, LLC., a registered brokerdealer and member FINRA / SIPC, is an affiliate of Merger & Acquisition Services, Inc. To learn more about Merger & Acquisition Services, visit https:// maservices.com. MAY 2019

TIPS - NETRATE SYSTEMS

IT’S SPRING! CHECKLIST FOR ANNUAL TECH MAINTENANCE

hough it’s still chilly here at NetRate’s headquarters in Okemos, Michigan, around the country, many of our clients are seeing signs of spring. If refreshing the office is on your agenda this season, don’t forget about technology.

simply because it can be time consuming. These programs are critical for system performance and data security. 3. Check your hardware. Run diagnostics on your computers to make sure they are functioning at optimum performance levels.

It’s critical to tune up your tech space so it doesn’t fail at a critical moment. Some software updates and diagnostic tests take considerable time, making them tasks that get pushed off to a later day. At NetRate, we like to think of ourselves as your industry friend that knows all things tech, so we prepared this list to use when spring cleaning your devices at the office, or at home. 1. Back up your data. Most companies already do this regularly, or have moved to cloud storage. Just in case, be sure to back up your servers and even your desktop/laptops on a regular basis. Often, backing up your desktop gets overlooked when using a share drive or other type of shared storage, but it is still a good idea. 2. Download software updates. We find clients delay updates to operating systems, security and anti-virus software,

MAY 2019

to keep. Same goes for unused software or mobile apps. Take the time to delete what’s not being used. 5. Manage passwords. If you have not already adopted this bestpractice security measure, take the time to establish a plan to update passwords periodically. You may want to evaluate an application such as KeePass or LastPass to securely store encrypted passwords online. 6. Physically clean your devices. Power down desktop systems, laptops, tablets and phones. Mix equal parts isopropyl alcohol and distilled water as a cleaning solution, and use a microfiber cloth to wipe down screens. Use canned air to clean keyboards. We also encourage you to use spring as a time to take a step away from the daily demands of work and think about possibilities, ask questions, and share ideas.

Clean The Machine!

4. Organize digital files. Arrange files in logical folders and eliminate things you don’t need. Most working professionals tend to hoard tons of files and emails. Ask yourself what’s truly necessary TABLE OF CONTENTS

Our team has more than 30 years of experience with insurance software, and we are excited about the future. Have an idea that would make your work life easier? Reach out to your account manager or give us a call at (877) 790-1114. The NetRate team members are customization experts and welcome your ideas. www.chart-exchange.com

Simplify your workflow! Give your team a clear path to winning new policies!

For over 18 years the NetRate Systems team has been tailoring insurance processing solutions to meet the unique requirements of each of our MGA, Program Administrator, Carrier, and Lloyd’s clients in the P&C marketplace. From submission portal through rating to policy issuance, our solutions will help you minimize key strokes, simplify workflow, and reduce systems maintenance.

“Not only do they understand insurance terminology, but they also understand the flow of business.” Jeremiah O’Donovan President, O’Donovan & Associates

Learn More

877-738-2411

www.netrate.com

ANALYSIS - COST FINANCIAL

MANAGING PERSONALITY CLASHES

e all have some people that we just don’t get along with. But when people who work together have continual clashes over a long time, it can affect the whole workplace. Continuing personal conflicts can have serious impacts in the workplace. They can reduce morale for the whole staff, increase stress, and reduce effectiveness and productivity. Personality clashes can cause a company to lose clients, miss opportunities and decline productivity.

“fight” by andy z is licensed under CC BY-NC-SA 2.0

Conflicts will occur in any workplace, and a certain amount of disagreement is healthy. It’s your job as manager to prevent personality clashes from affecting the whole team and their productivity.”

example, someone who is naturally upbeat and optimistic may feel frustrated and stressed by someone who is more likely to find flaws and point out risks. Both types are needed in any organization. We

Like it or not, at some point every manager will have to resolve a conflict between employees.

WHAT’S IT REALLY ABOUT? While some personal conflict is about real differences in personality, human resource experts say that more often the issue is structural. Some personality types just don’t mix well in a workplace. For www.chart-exchange.com

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need people who are willing to try new things, take risks to find new opportunities, but we also need to understand the risks and take steps to manage them.

See Personality Clashes Page 43 MAY 2019

ANALYSIS - KROLL

WHY CROSS-EXAMINATION AND ALCOHOL DON’T MIX 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.

MAY 2019

By Mark Ehlers & Julieanne Himelstein

uch has been written about the U.S. Department of Education’s proposal to require schools conducting Title IX investigations to allow the parties an opportunity for a hearing at which they may cross-examine each other. Some laud the proposal for strengthening due process for the accused. Others criticize it for attempting to “revictimize” the alleged victims of sexual assault and sexual harassment, thus chilling their desire to report in the first place. As professionals who have investigated hundreds of Title IX claims on behalf of colleges and universities, we believe that inserting cross-examination and other adversarial, courtroomlike procedures into the Title IX investigation process will do little to bolster due process and will only cause confusion, resentment, and undue burdens on an already overburdened Title IX system at most universities. As former prosecutors and trial attorneys, we are avid proponents of cross-examination in adversarial settings. We practiced it for many

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years in courtrooms and criminal trials before judges and juries. In the context of a civil or criminal trial, cross-examination helps the jury assess credibility through questioning that tests a witness’s factual details or exposes prior inconsistent statements or other potential weaknesses in the witness’s testimony. Cross-examination can be dramatic. For trial attorneys, it is among the most fun part of a trial. For the most talented and experienced attorneys, it is an art. We are concerned, however, that in the Title IX context, crossexamination adds nothing but a fake veneer of due process. Why? In part, because the fact finder will already have a report of investigation that includes a summary of the evidence, including the facts developed by a Title IX investigator, in most cases through vigorous and skilled questioning of the parties and witnesses, and supplemented by corroborating documentation, text messages, and other independent evidence. Our experience teaches us that due process occurs when there is an independent, fair and objective investigation that includes skilled See Cross Examine & Alcohol Page 30 www.chart-exchange.com

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

kroll.com/cyber

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

IS THE DOCTOR IN? MEDICAL MALPRACTICE ISSUES IN THE AGE OF TELEMEDICINE By Bonnie Ackerman

ith increased reliance on telemedicine, many physicians question whether the elimination of in-office, face-to-face patient encounters increases their potential medical practice liability risks. Approximately 90% of health care organizations use or plan to implement telehealth platforms. In states permitting telehealth, 95% of large employers offered telehealth to employees for minor, non-urgent services in 2018. Through algorithm-assisted diagnosis, patient data collection and analytics, telemedicine may

minimize errors and improve outcomes. Consequently, physicians may face liability exposure in different venues as patients may choose or be required to file any malpractice lawsuits in their own states, where the relating physician may not be licensed. This poses unique issues as to licensing, differing standards of care and malpractice insurance. The American Telemedicine Association defines telemedicine as a health care provider’s provision of services to a patient using telecommunications technology, where the patient and provider are in different locations. Telemedicine may involve videoconferencing, remote patient monitoring or image capturing, and the use

of peripheral digital diagnostic medical devices. The technology used must comply with HIPAA, HITECH and state regulations and providers must abide by all inperson medical practice standards, medical licensing boards and informed consent requirements. Although there are few legal opinions that specifically address telemedicine malpractice, several issues repeatedly arise. Prisoners have asserted federal constitutional claims arising from alleged medical neglect by telemedicine providers(1) as “deliberate indifference to a serious medical need.”(2) Despite the fact that “mere negligence or malpractice” See Telemedicine Page 42

onnie Ackerman practices in the areas of medical malpractice, health care, nursing home liability, general liability and product liability. During an earlier tenure at Wilson Elser, she served as supervisory counsel for product liability matters pending nationwide and handled litigation for general liability matters pending in New York. Bonnie’s experience also includes formulation of strategies; preparation of complex motions and memoranda of law; innovative research in the areas of medical malpractice, product liability and general liability; depositions, extensive discovery, investigatory planning and settlement negotiations; comprehensive analysis of depositions and trial transcripts; and creation of periodic reports for clients.

www.chart-exchange.com

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MAY 2019

ANALYSIS - PL COMMUNICATIONS

IS YOUR WEBSITE HURTING YOU OR HELPING YOU? By Paul Lavenhar

s your website hurting you or helping you?

When you are prospecting, one of the first things a prospective new client will do is Google you and your company. It’s the first step towards establishing your credibility. Yes, social media is important, but your website is more often than not your first impression maker. Have you looked at your website lately? When was the last time it was updated? If the prospect considers your website your “first date,” are you going to get a second one?

It is so hard to get into a prospect’s door – referrals, cold calls, email blasts, networking, – don’t let your website blow it for you. HERE ARE SOME BASIC TIPS TO MAKE YOUR WEBSITE HELP YOU LAND A PROSPECT VERSUS EXCLUDING YOU. This is about first impressions. It is not about HTML code, tags, and all the very important technical aspects of developing a website. These are suggestions you can implement because you are an insurance expert, not a web designer. FIRST IMPRESSIONS What first impression does your

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

insurance marketing communications firm PL

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website make? Conservative? Cutting edge? Friendly? Is the website about how great the company is? Or, is it about how great it is at helping customers? Can customers find what they need to know or answers to their questions? Does the website “think” like its target customers think? Don’t be a “me-me-me-er.” Make your website about the client, not about you. PEOPLE READ DIFFERENTLY The Internet has changed how people read. You are competing against every single thing online for attention, not just against competitor websites. Insurance can be technical. Translate the technical into easyto-read language that is from the prospect’s point of view. How is this insurance product going to solve the prospect’s problem? Keep paragraphs short. People read at a glance – long paragraphs get glossed over. Long paragraphs are reading killers – even if the content is good. Use subheads – if they only read your subheads, they should get your overall message.

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AVOID “INSURANCESE” Which has more impact? “Our focused risk management approach ensures that our clients are proactively protected in the most costeffective manner.” Or, “Our risk management approach reduces claims and keeps premium costs down.” “Keeps costs down” gets attention – just say what you mean in plain language. SHOW YOU ARE INVOLVED IN YOUR COMMUNITY Many insurance agencies and carriers are active participants in their communities. If you are, highlight that on your website. If you are an agency that specializes in nonprofits, show how you support local nonprofits whether you are on a board or a volunteer. If you are focused on a business niche and belong to an association for that niche, show your involvement. BE PROUD OF YOUR NICHE Some people feel if you market a niche, you exclude all other business opportunities. You can have a niche or niches within an overall practice. Emphasize your niche, but balance it by saying it is one strong part of your overall book of business. Put that niche right on your home page. It is the first place people look www.chart-exchange.com

at your website. Link that introductory copy to a more detailed page about your niche expertise.

Subscription or “canned” articles have a place in social media. Sometimes you just don’t have the time or resources to generate your content on a regular basis.

On that page consider adding testimonials, industry risk management Look at your tips, or case studies website on to show off your your phone. If expertise. Don’t just say you are an expert – it doesn’t work prove it. YOU MUST BE MOBILE I started by saying this would not be technical. But, I do want to make one technical point.

properly, have your web designer fix it. There are simple codes to make a site mobile – it often does not require redesigning your entire site.“

Look at your website on your phone. If it doesn’t work properly, have your web designer fix it. There are simple codes to make a site mobile – it often does not require redesigning your entire site. This is a great website to see your “mobile readiness.” https://ready. mobi/ SOCIAL MEDIA AND SUBSCRIPTION CONTENT Many articles are available about social media from Facebook to LinkedIn. My advice here is that if your Facebook page or LinkedIn page has not had a new post since 2014, take it off your website. Or, read one of those articles and use it to update your social media presence. TABLE OF CONTENTS

But, content that comes from your staff – especially niche specific content – is one of the best ways to knock off an incumbent. Show prospects what generalists miss that an expert like you deals with every day. SEARCH ENGINE OPTIMIZATION

SEO – is another aspect of website development that is technical and potentially expensive. Original content is one of the most effective ways to get better search results. Google and clients love a niche. It is much easier to get Google results when you push a niche. If a company sees you “get” its niche, it increases your chance of them wanting to do business with you. These are the basics for getting that “second date” with your prospects. You work hard to get appointments with prospects – make sure your website helps you, not hurts you.

MAY 2019

CASE STUDY - VANTAGE AGORA

PRECISION-DRIVEN

DRONE IMAGING

n a world driven by technology, it only makes sense to incorporate new processes into all that we do. Artificial Intelligence (AI) has become one of the most prevalent technologies, continually evolving and fully-engrained into the daily processes of leading organizations. While many of us rely heavily on technology to perform our daily tasks, we also understand that the same advanced technology comes with its own set of downfalls. Sometimes it’s best to have a real set of eyes to examine what’s going on to ensure efficiency and increased accuracy. This case study highlights a process that Vantage Agora has implemented for a successful, data-driven software solutions provider.

MAY 2019

PROBLEM STATEMENT: A growing company looks to provide accurate and beneficial insights to customers in the insurance industry. Dealing heavily with property and building inspections, they work to reduce the risk, cost and waste when it comes to making transactions. Through drone imaging, the company provides end users with valuable information regarding their property; picking up on detections such as – boundary drawing, roof material, swimming pools, damage, wear & tear, roof shape, tree overhang, ponding, staining, debris and rust. The original AI system the company had in place was detecting the types listed above at a 70% accuracy rate. With a goal of 90% accuracy,

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the previous rate was simply unacceptable to deliver to end users.

VANTAGE AGORA’S SOLUTION: Vantage Agora’s back office team took on this profile-analysis task, carefully inspecting the drone images of residential and commercial properties and reporting any detections. Once the detections were finalized and accurately conveyed to the company, pricing structures were then developed and properly delivered to end clients. The drone images were delivered in bulk to the Vantage Agora team and thoroughly analyzed by a trained group of inspectors. All See Precision Drone Imaging Page 24 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

MAY 2019

CASE STUDY - VANTAGE AGORA Continued From Page 22

PRECISION-DRIVEN DRONE IMAGING

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images underwent a rigorous quality checklist before beingreturned to the company, ensuring process compliance, standardization and error prevention.

IMPACT: After partnering with Vantage Agora, the company saw an immediate increase in accuracy provided to end clients. Accuracy at spotting detections in drone-captured images skyrocketed from 70% to over 95%.

MAY 2019

By demonstrating an impressive, 3-day turnaround time of processing through the initial 50,000 property/ building images provided, Vantage Agora transformed what was supposed to be a one-time project into a weekly implementation.

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Mark Lann Phone:

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

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ANALYSIS - WILSON ELSER Continued From Page 9

CHANGES IN LABOR AND EMPLOYMENT BILLS AFFECTING CONNECTICUT EMPLOYERS FAMILY MEDICAL LEAVE INSURANCE & PAID FAMILY AND MEDICAL LEAVE PROGRAMS Connecticut lawmakers are proposing bills that would create a comprehensive system of paid family and medical leave funded by employee contributions and applicable to employers of all sizes. The bill as it currently stands would apply to employers with at least one employee and defines eligible employees as those who have earned $2,325 in the highest-earning quarter within the five most recently completed calendar quarters. The proposed bill dramatically changes the eligibility standard for state FMLA leave. Additionally, it extends the family members for whose care leave may

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be taken under the Connecticut Family and Medical Leave Act to siblings, grandparents and grandchildren. Employees also would be able to take leave to care for “any other individual related by blood whose close relationship with the employee is the equivalent of a family member.” The proposal also will change the number of paid medical leave workweeks an employee has annually. As the law currently stands, employees can use 16 weeks of leave over a period of two years. The proposed Family Medical Leave Insurance Program would modify this by offering up to 12 workweeks at 100 percent compensation replacement to covered employees in any 12-month period. Employees also would be eligible for an additional two weeks of compensation for serious health conditions resulting in incapacitation that may occur during a pregnancy. To enroll in the program, employees must contribute a percentage of their weekly earnings to the program’s trust fund. The Paid Family and Medical Leave Program has gained momentum within the state, which Governor Ned Lamont credits to “people [understanding] that workers shouldn’t need to struggle with a choice between their jobs and their health, a new child, or a difficult family situation.” Employers should stay alert as the proposal will affect employers not previously subject to TABLE OF CONTENTS

the state’s FMLA coverage, and it will require changes to administrative processes. INCREASES IN MINIMUM WAGE Bills proposed by the Senate, House and governor are focused on increasing the minimum fair wage. The House and Senate bills raise Connecticut’s hourly minimum wage from $10.10 to $15. Accordingly, the bills propose that the minimum wage progresses to $12 an hour by January 1, 2020, then to $13.50 in 2021, and eventually to $15 by 2022. In comparison, the governor’s bill has a more gradual increase: $11.25 by January 1, 2020, $12.50 by 2021, $12.75 by 2022 and $15 by 2023. After reaching $15, the bills propose that the minimum wage shall increase per the consumer price index in the northeastern United States as calculated by the U.S. Department of Labor’s Bureau of Labor Statistics. CONCLUSION Although these bills are not yet law in Connecticut, employers should be proactive about evaluating their employee handbooks pending the changes. With a Democratic majority in the House and Senate and a newly elected Democratic governor, it seems likely that these employeefriendly bills will pass. NOTE: Claire Pariano (Law ClerkStamford) assisted in researching and drafting this Alert.

MAY 2019

ANALYSIS - FORTEGRA

f I mention the mullet hairstyle to 100 people, it’s a fact that at least 75 of them will smile. It reminds people of a time when they may have felt free enough to wear such an unconventional coif. Perhaps we all felt freer when every human in our midst wasn’t armed with a high-definition video recorder and the ability to transmit said video to countless others in a matter of seconds. But I digress. Mullets. We all know the saying: “Business in the front. Party in the back.” While the mullet was being popularized by trendsetters and rebels like Davie Bowie and Joan Jett, little did it know that it would still remain relevant to this day—even if not as a viable hair style. Instead, the mullet serves as the perfect visual depiction of the conflict between claim adjusters and claimants during the adjustment process.

Two can begin. This “business in the front” approach not only frustrates claimants, who, at times, are our insureds, but it delays the resolution of claims, increases potential exposure, and creates an environment ripe for financial leakage. The claimants, on the other hand, are looking for adjusters to take a “party in the back” approach and pay claims liberally. Claimants want less investigation and more speed – the Brett Michaels approach to claim adjustment, if you will.

Mullets:“Business in the front. Party in the back.”

Conventional education and training for adjusters has them operating in a box, performing a sequential colorby-number procedure that dictates Step One must occur before Step

The reality is that neither approach is ideal. Effective adjusting requires a hybrid approach that is accurate yet fluid: the mullet. The mullet was worn by some of the 1970s’ most iconic personalities. Just as they advocated bucking tradition and thinking outside See Page 34

bout the author: Howard Fishbein serves as Senior Vice President, Specialty Claims at Fortegra Financial, a Jacksonville, Florida based carrier with over $1 Billion in annual sales and an A.M. Best Rating of A-. Howard has almost twenty years of insurance claims experience combined between his private practice and inhouse experience. Howard earned his B.S. in Accounting at The Pennsylvania State University and his J.D. at St. John’s School of Law. He is a licensed attorney passing the bar in both New York and New Jersey.

MAY 2019

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“PC224851.JPG” by Zach Hale is licensed under CC BY-NC-SA 2.0

THE CLAIM ADJUSTMENT PROCESS: A MULLET OF A RELATIONSHIP

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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

MAY 2019

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ANALYSIS - KROLL

THIRD-PARTY DUE DILIGENCE TO MITIGATE RISKS POSED BY OVERSEAS DEFENSE CONTRACTORS By D aniel Hartnett

arlier this month, the U.S. Dept. of Justice settled a fraud case with an overseas defense contractor that resulted in the contractor’s forfeiture of $25 million.1 In this instance, an Afghan-owned group of companies fraudulently billed the Department of Defense for logistics support in Afghanistan. This case follows on the heels of the notorious “Fat Leonard” bribery scandal involving dozens of senior U.S. Navy officers and a defense contractor in Southeast Asia. 2

These cases highlight the corruption and bribery challenges confronting the Defense Department when dealing with countless overseas third-party vendors, implications of which can severely undermine the department’s ability to carry out its global missions. Much of these risks stem from the nature of the modern defense industry, notably the opacity of defense procurement transactions, the growth of third parties and the globalization of defense supply chains. 3, 4, 5, 6, 7 The Department of Defense and its prime defense contractors can minimize and possibly eliminate these risks through a rigorous

due diligence screening of their overseas suppliers, vendors and other third-party partners. This process includes: •

•

bout the author: Daniel Hartnett is an associate managing director with the Compliance Risk and Diligence practice of Kroll, a division of Duff & Phelps, based in the Reston office. Daniel specializes in advising corporate clients on third party risk management as it relates to the Foreign Corrupt Practices Act, the UK Bribery Act and similar local laws worldwide. Daniel also oversees the practice’s U.S.-based Asia research team.

•

Developing a risk-based approach to screen third parties based upon an objective understanding of regional and other relevant risk factors. Conducting the prescribed level of due diligence on overseas third parties prior to any engagement. Leveraging regionally knowledgeable and foreign language-capable investigators to ensure effective due diligence efforts. Leveraging technology to efficiently and consistently conduct a third-party compliance program, ensuring data integrity in the event of an audit. Conducting continuous monitoring of ongoing contracting relationships to maintain vigilance of an

See Third-Party Due Diligence Page 36 www.chart-exchange.com

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MAY 2019

ANALYSIS - KROLL Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Continued From Page 16

WHY CROSS EXAMINATION AND ALCOHOL DON’T MIX and compassionate questioning of the parties. A skilled investigator asks challenging questions and, when appropriate, confronts the parties and witnesses with inconsistent, illogical, and contrary narratives, and considers corroborating evidence (or the lack thereof), motives to lie (and the absence of), contemporaneous reports to third parties (and delayed reports), and other relevant facts surrounding the allegations. Most existing Title IX investigations already allow for the parties to submit questions of each other. As criminal prosecutors, the hard work occurred during the investigation before trial, in the privacy of offices and interview rooms, when the facts were scrutinized, key evidence obtained, and witness credibility tested. The notion that cross-examination is a magical tool which suddenly exposes lies and inconsistencies is an exaggeration exploited by Hollywood. In the context of Title

MAY 2019

IX, a cross-examination requirement places an undue burden on schools to radically alter how cases are handled with little regard for truth, accuracy, and fairness. Another more practical reason crossexamination in Title IX investigations often provides little additional due process is alcohol. As Emily Yoffe wrote about the proposed regulations in The Atlantic, “many of the cases involve alcohol lubricated encounters that both students agree began consensually.” Why does alcohol make a difference? Because the essential question in many of these cases is whether the claimant was so intoxicated at the time of the alleged assault that she (or he) was unable to consent - i.e. that she lacked conscience knowledge of the nature of the act and was unable to understand the who, what, where, how or why of the sexual interaction. These TABLE OF CONTENTS

questions typically do not apply to the respondent. The issue for the respondent is whether he (or she) knew or should have known that the claimant lacked the capacity to consent. Resolution of the case thus hinges on the respondent’s state of mind, not the claimant’s state of mind. Most policies distinguish “incapacitation” from a state of impairment termed “blackout.” In the latter case, the defining issue is whether the respondent knew or should have known the claimant was in a “blackout” state and too drunk to knowingly consent. These cases are particularly difficult because, when someone is in a blackout state, he or she may appear entirely functional to others. In both scenarios, it is not the claimant’s recitation of facts or recall that

See Cross Exam & Alcohol Page 35 www.chart-exchange.com

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MAY 2019

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NEWS - LLOYD’S OF LONDON

LLOYD’S REVEALS BOLD NEW STRATEGY FOR ITS FUTURE Lloyd’s today unveiled a bold new strategy with a number of transformational initiatives that could shape the future of the world’s (re)insurance market.

he proposals are focused on delivering higher quality risk protection for the market’s customers. They also offer ways to simplify access to the global insurance market, together with lowering costs of doing business at Lloyd’s. The publication of this strategy marks the next phase of wideranging consultation and blueprint development involving Lloyd’s unique ecosystem of market participants, customers and other stakeholders. Work will begin on building and delivering prototypes from October 2019, with some operational in early 2020. The six new ideas outlined in The Future at Lloyd’s illustrate how the market can respond to challenges and seize opportunities to transform the way it delivers value to its customers. They are: A platform for complex risk that makes doing business easier and enables efficient digital placement of the most difficult-to-cover risks. Lloyd’s Risk Exchange through which less complex risks can be placed in minutes at a fraction of today’s costs. Flexible capital that can simply and effectively access a diverse set of insurance risks on the Lloyd’s platform. www.chart-exchange.com

A Syndicate-in-a-Box, which offers a streamlined opportunity for innovators to bring new products and business into the market. A next generation claims service that improves customer experience and increases trust in the market by speeding up claims payments. An ecosystem of services that helps all market participants develop new business and provide outstanding service to their customers. John Neal, Lloyd’s CEO said: “Lloyd’s unique attributes – the ability to access unparalleled underwriting expertise, financial security and market access all in one place – are more relevant today than ever. However, a dynamic risk environment combined with rapid advancements in technology have fundamentally changed the world. Lloyd’s is changing too, driven by a desire to provide the best (re)insurance products and services available anywhere. “We will succeed by harnessing the entrepreneurial and innovative spirit that is at the heart of Lloyd’s. Together we have a tremendous opportunity to reimagine Lloyd’s and build a marketplace that is future focused, highly responsive to the changing and diverse needs of our global customers, TABLE OF CONTENTS

with a culture of inclusivity and innovation.” Bruce Carnegie-Brown, Chairman of Lloyd’s, said: “Throughout its history Lloyd’s has always sought to reinvent itself by remaining at the forefront of insurance innovation. The proposals we have announced today represent the culmination of months of engagement with stakeholders across the market and around the world. I believe they will set Lloyd’s up for success for the years to come.” Chris Croft, CEO of the London & International Insurance Brokers’ Association (LIIBA), added: “At LIIBA we have welcomed the very collaborative approach that Lloyd’s has taken to drawing up these ideas and in seeking our help. We share a common central objective: a strong, vibrant, innovative Lloyd’s market must be a key part of the offering we make to our clients. The ability to find cover for clients that is simply not available elsewhere has always been at the heart

See Lloyd’s New Strategy Page 43 MAY 2019

ANALYSIS - FORTEGRA Continued From Page 26

THE CLAIM ADJUSTMENT PROCESS: A MULLET OF A RELATIONSHIP the box, we honor the mullet’s spirit by working carefully, creatively, and flexibly to protect our insureds and avoid financial leakage. I’m not suggesting that we join a hair band or grow a rat tail, and I certainly don’t want any bowl cuts or some other ridiculous style – I’m advocating that we break out of the box and use reasonable common sense to arrive at quick, efficient, and creative solutions. For example, historical training has dictated that when confronted with a slip and fall claim resulting in soft tissue injuries, a general liability adjuster will wait for the claimant to stop treatment, seek a demand package including a copy of all medical bills, and then take steps toward resolution. In such a scenario, the treatment continues for an extended period of time, medicals become inflated due to extended chiropractic care or alternative treatments, and, as a result, the claimant’s demand rises. The adjuster requested an exploding cigar and received it. This formulaic

MAY 2019

and linear approach prolonged adjuster works to quickly identify the life of the claim, caused the the damages as they currently exist insured to experience continued and simultaneously develops initial stress, allowed plaintiff’s counsel to arguments questioning, discounting, develop boardable medicals which and/or refuting all identified gray will require an expert to refute, and areas. Based on his raised the claimant’s In applying or her experience expectations. The a hybrid or resolving similar claims, phrase “the price of our claims adjuster “mullet” approach, poker just went up” formulates an offer that I recommend that is fair and delivers it could not be any truer.

adjusters channel the majority of their efforts toward what I refer to as the “gray area information” as quickly as possible.”

In following a “business in the front” approach, the adjuster failed to meet the needs of the insured and unnecessarily increased the claim’s impact on the insurance company capital. Similarly, applying the alternative “party in the back” approach would have had the adjuster carelessly accepting representations regarding future treatment, loss of work, and other forms of damages. The effect would be an overpayment on the file—obviously an undesirable result.

In applying a hybrid or “mullet” approach, I recommend that adjusters channel the majority of their efforts toward what I refer to as the “gray area information” as quickly as possible. Gray area information consists of all the information that is unknown to both parties and therefore open for debate. Let’s return to our general liability adjuster described above. To honor the mullet, our adjuster spots the gray areas: future medicals, maximum medical improvement, effects on future earnings, and extent of future pain and suffering. Our

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aggressively and with all possible arguments about the unknown gray areas.

In taking the hybrid mullet approach we put the burden on claimant’s counsel to deliver said offer to his or her client at a time when it’s difficult for both sides to evaluate the gray areas. Most plaintiff’s attorneys will advise the claimant that there is risk in the gray area and a benefit to certain cash now. Highlighting the unknown gray area allows an experienced adjuster to capitalize on a claimant’s desire for cash, relative inexperience, and natural human apprehension about the unknown. In addition, efforts at an early resolution are more likely to keep the insured happy and improve the chances of protecting the insurance company capital. In conclusion, my sage advice is that each time a claim comes in we think of Ziggy Stardust’s meticulously trimmed yet free flowing mane and incorporate a little “business in the front” and “party in the back” into our claim adjusting. www.chart-exchange.com

ANALYSIS - KROLL Continued From Page 30

didn’t you?

WHY CROSS EXAMINATION AND ALCOHOL DON’T MIX

A: Yes Q: Once you arrived at the party, you were continuing to drink, right? A: Yes Q: And you danced with [Doe] at the party? A: Yes Q: And you and [Doe] kissed at the party? A: Yes

matters because the claimant likely remembers nothing other than sporadic details about the party, pregaming activities, maybe a dance or a kiss with respondent at the bar earlier in the evening, or that there was a lot of alcohol in red cups filled with vodka or tequila. Within the context of these facts, which repeat themselves ad nauseum on college campuses, and a thorough and independent investigation by skilled investigators, how does cross-examination enhance due process when the truthful answers to questions regarding the sexual encounter are: “I don’t remember,” “I don’t know,” or “I was wasted”? Here is the likely cross-examination of a claimant in a sexual assault case that stemmed from an alcohol-infused evening that resulted in a blackout or incapacitation: Q: You pre-gamed with your friends before you arrived at the party, www.chart-exchange.com

Q: And you and [Doe] then went to his room? A: I don’t know what happened after the kiss. The next thing I remember is waking up in his bed. I was naked. When I got up to leave, I noticed a used condom on the floor. Because the claimant is unable to answer questions about the sexual encounter or to provide any details following the moment when her memory has been wiped away; it thus becomes the respondent, not the claimant, on whose credibility the fact finder must rely. Thus, in this scenario, it is crossexamination of the respondent that would be most illuminating, not cross-examination of the claimant. We are not suggesting that crossexamination has no value. But it is a tool designed for a truly adversarial process presided over

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by a judge or neutral arbiter and independent fact finder. It has limited value in a typical Title IX investigation, especially where properly trained investigators who understand their obligation to remain neutral, fair, and objective, conduct a thorough and comprehensive investigation. As former sex offense prosecutors who, between us, have investigated hundreds of rapes, sexual assaults, child molestation cases, sex trafficking of minor cases and sexual misconduct cases, we have not found that cross-examination causes the repeated victimization of claimants or results in a “chilling effect on reporting in the first place.” Shame, humiliation, fear, concerns about undue exposure, embarrassment, and the excruciating toxicity of being victimized in the first place are the reasons many survivors of sexual assault do not come forward, not the prospect of someone asking them hard questions. But the hard and probing questions should be asked by fair and compassionate investigators behind closed doors. Many of the most probing questions will be appropriately directed at the respondent, but the principles of fairness and objectivity must be applied to both parties. Cross examination may sound good in theory, but in practice, it will do little to advance due process. MAY 2019

ANALYSIS - KROLL Continued From Page 29

THIRDPARTY DUE DILIGENCE TO MITIGATE RISKS POSED BY OVERSEAS DEFENSE

investigations/seducing-theseventh-fleet/. 3. Joint Senate-House Letter to GAO, “DEFENSE ACQUISITIONS: Additional Guidance Needed to Improve Visibility into the Structure and Management of Major Weapon System Subcontracts,” http://www.gao. gov/assets/100/97156.pdf. 4. Transparency International, Defence and Security, “License to Bribe? Reducing Corruption Risks Around the Use of Agents in Defence Procurement,” June, 2016, http://ti-defence.org/ publications/licence-to-bribereducing-corruption-agents-

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

defence-procurement/. 5. https://www.bloomberg.com/ overseas third party over the course of the contract’s timeline. SOURCES: 1. Office of Public Affairs, “U.S. obtains over $25M in forfeited funds from fraud and corruption in government contracting in Afghanistan,” U.S. Department of Justice, March 13, 2019. 2. Craig Whitlock and Kevin Uhrmacher, “Prostitutes, vacations and cash: The Navy officials ‘Fat Leonard’ took down”, Washington Post, 20 September, 2018, https://www. washingtonpost.com/graphics/

MAY 2019

news/articles/2011-09-01/the-f35-s-global-supply-chain 6. Dana Hullinger “Transforming the Supply Chain Organization: Tackling the Biggest Supply Chain Risk of Them All,” April 15, 2016, https://olinblog.wustl. edu/2016/04/supply-chainstrategy-at-boeing-defense/. 7. Hilary Hurd, “As Anti-Corruption Efforts Expand globally, the Defense Sector Remains an Outlier,” Defense One, 5 October, 2016, http://www. defenseone.com/ideas/2016/10/ anti-corruption-efforts-expandglobally-defense-sector-remainsoutlier/132137/.

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

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NEWS - LLOYD’S OF LONDON

ARTIFICIAL INTELLIGENCE AND ROBOTS CREATE NEW RISKS AND OPPORTUNITIES

his is according to two new reports from Lloyd’s exploring these trends in more detail.

“Taking control: artificial intelligence and insurance”, published in collaboration with The University of Surrey, analysed the associated risks of AI implementation as well as the potential for AI to help insurers improve their operations. The report identifies four risks areas for AI: trust and transparency, ethics, security and safety. As artificial intelligence systems become more complex, cyber breaches are likely to have an even greater impact, according to the report. Meanwhile, ambiguity and legal uncertainty is contributing to unanswered questions around who is ultimately liable when something does go wrong. But AI also provides business opportunities for insurers, as any company offering algorithm-based systems to data-rich companies www.chart-exchange.com

Robots Creating New Risks And Opportunities...

might seek to insure against the risk of the algorithms returning incorrect decisions. Moreover, new companies are emerging in the disinformation defence area to provide technology to filter out fake news; detect and eliminate troll-bots; and certify information and authenticity of images and videos. Finally, insurers could explore what type of products could be useful to these new businesses and in what form.

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As well as being aware of the risks associated with using this fastdeveloping technology, insurers should look to exploit the potential benefits that AI and robotics can offer in terms of improving their current processes and delivering better value. Building on this, “Taking control: robots and risk”, investigates the See AI And New Risks Page 40 MAY 2019

“¡Klaatu Barada Nikto!” by La Tête Krançien is licensed under CC BY-NC-ND 2.0

As the world becomes increasingly automated, forcing underwriters to adapt and navigate a new risk environment, insurers are leveraging the potential of AI themselves to remain competitive, improve processes and increase efficiency.

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 - LLOYD’S OF LONDON Continued From Page 37

ARTIFICIAL INTELLIGENCE AND ROBOTS CREATE NEW RISKS AND OPPORTUNITIES impact “collaborative robots” (or cobots) on the economy, and the subsequent risks implications for the insurance industry. In the future millions of jobs could be taken over by increasingly sophisticated robots, according to various predictions. This has the potential to significantly change the risk landscape in many parts of the economy, including: manufacturing, agriculture, healthcare and retail. The adoption of cobots in factories, for example, could result in new risks to human co-workers, cyber-attacks and faults resulting in large business interruption and property losses, and potential leaks of intellectual property. However, there is an opportunity for insurers to collaborate with clients as data from cobots will provide a much greater understanding of risk and

MAY 2019

offers opportunities for improved risks and pricing models. The report finds that adoption could be speeded up by insurance as it could help to address health and safety concerns. Dr Trevor Maynard, Head of Innovation for Lloyd's, said:, “Our world is becoming increasingly automated. Insurers have an opportunity to play a role in shaping the development of the AI and robotics and will no doubt be instrumental in providing solutions to some of the most complex risks associated with these technologies. Some of these risks have been well documented, however for insurers to respond appropriately, it is important that the benefits and opportunities of AI and robotics are properly understood. The publication of these two reports today aims to provide underwriters with guidance on best practice as well as insights into the short, medium and long-term potential of AI and robotics.” Attila Emecz, Director of Research Strategy, University of Surrey said, “Over the last few years there has been a revolution in the development of AI and robotics yet we are only just beginning to tap into the vast potential of such technologies. We have been delighted at the University of Surrey to be able to work with Lloyd’s and the University of Exeter in producing the reports we are launching today. We are confident that these reports will help the insurance sector in developing new business models and ways of working that will deliver significant social and economic benefit to society.” TABLE OF CONTENTS

UPDATE ON LLOYD’S PLAN TO TACKLE UNACCEPTABLE BEHAVIOUR IN THE MARKET

loyd’s has announced two new measures as part of its action plan to create a safe and inclusive working environment for all. Bullying and harassment support line The Care first bullying and harassment support line is now up and running and available 24/7 and 365 days per year to everyone who works in the Lloyd’s market. This line will provide confidential advice and support for those experiencing inappropriate behaviour at work and will help them decide on their next steps. Rules for accessing the Lloyd’s premises Lloyd’s has also updated the rules of access which state that anyone entering Lloyd’s premises under the influence of drink or illegal drugs will have their passes confiscated. Further actions underway also include undertaking a market-wide culture survey, a comprehensive review of policies and practices across the Lloyd’s market and provision of preventative training. www.chart-exchange.com

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

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MAY 2019

ANALYSIS - WILSON ELSER Continued From Page 19

IS THE DOCTOR IN? MEDICAL MALPRACTICE ISSUES IN THE AGE OF TELEMEDICINE does not amount to a constitutional violation,(3) these allegations could support medical malpractice claims. (4) While telemedicine affords health care access to patients in remote areas where care otherwise may be virtually non-existent, physicians must consider whether such practice exceeds the scope of their medical licenses as telemedicine often crosses state lines. Most reported telemedicine malpractice cases involve physicians who prescribed medication across state lines without conducting in-office patient exams. For example, it has been held that physician review of patient questionnaires submitted over the internet was insufficient to prescribe medication absent physical

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examinations verifying patients’ health.(5) A pharmacy was held to have violated Arizona state law when it dispensed medication pursuant to such prescription orders.(6) Telemedicine raises issues not only regarding a physician’s state licensure but also a third party’s potential liability for accepting prescriptions from an out-of-state physician.(7) Providers should seek advice from counsel to best understand potential liability as telemedicine poses unique medical malpractice risks and complicates traditional medical malpractice claims due to distinct issues regarding jurisdiction, procedure and duty of care. Jurisdictional exposure turns on whether physicians unlicensed in remote states are permitted to provide telemedical care for those states’ residents. Significantly, physicians and patients may be located in states with different liability laws, statutes of limitations, standards of care or damage caps. Choice of law issues arise where it is unclear whether the law of the patient’s state or the provider’s state shall govern. Unresolved jurisdictional issues may make it difficult for insurance companies to assess financial risks. Moreover, unauthorized medical practice can result in disciplinary action in the physician’s own state and potential prosecution for unlicensed medical practice in the patient’s state. Providers should confirm that medical malpractice policies tailored for in-office encounters include telemedicine.

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Finally, many malpractice policies exclude unlicensed activities, so physicians also must understand state licensing provisions and coverage requirements in other states. 1. See, 42 U.S.C. §1983. 2. Newman v. Moultrie, 2018 U.S. Dist. LEXIS 213217; see also, Griffin v. Moon, 2014 U.S. Dist. LEXIS 33621. 3. Newman v. Moultrie, 2018 U.S. Dist. LEXIS 213217, 10, citing others. 4. See, Griffin v. Moon, 2014 U.S. Dist. LEXIS 33621. 5. See, Low Cost Pharm., Inc. v. Ariz. State Bd. Of Pharm, 2008 Ariz. App. Unpub. LEXIS 790, referencing conclusion of Arizona Medical Board. 6. Low Cost Pharm., Inc. v. Ariz. State Bd. Of Pharm, 2008 Ariz. App. Unpub. LEXIS 790. 7. Frazier v. Univ. of Miss. Med. Ctr., 2018 U.S. Dist. LEXIS 182205.

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NEWS - LLOYD’S OF LONDON Continued From Page 33

Continued From Page 15

LLOYD’S REVEALS BOLD NEW STRATEGY FOR ITS FUTURE

MANAGING PERSONALITY CLASHES

of London’s unique offering. We must ensure it retains and grows that ability, and we look forward to discussing what happens next.”

Another source of conflict can come down to different work styles: some people like to get right onto tasks, while others need deadlines as motivation.

Bronek Masojada, CEO of Hiscox, said, “These initiatives remind us of Lloyd’s centrality to the global insurance market and its determination to remain central to it as the world evolves. We look forward to working with all our Lloyd’s colleagues to bring these ideas to realisation.” Sheila Cameron, CEO of the Lloyd’s Market Association, added, “Today’s launch of “The Future at Lloyd’s” demonstrates John Neal’s commitment to put Lloyd’s at the front of the insurance flotilla. It offers an exciting view into how our shared marketplace can evolve and we are excited to work together with Lloyd’s on building out this braver future for the ultimate benefit of our customers.”

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Someone who prefers to cooperate may clash with a more naturally competitive person. Every organization need both tendencies, and it’s up to the manager to find the right balance.

Some prefer working in teams or as a group, with lots of interaction with colleagues. others prefer working alone and focusing on the task at hand.

CLARITY, PLEASE More often, personal conflict is the result of a lack of understanding of mutual roles, and responsibilities. Two people’s jobs may naturally pit them against each other — for example, two sales agents competing for the same market or the same promotion. There may be no incentive for them to collaborate. Or their responsibilities and goals may be poorly defined.

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Finally, one person just may not be working hard enough, or have the skills and knowledge to perform at the level needed, putting more stress on other team members to achieve.

STEPS TO RESOLVE CONFLICT First, stay professional. Keep emotion out of your reaction to a personality clash. Hear both sides out, preferably in a neutral setting. Take each person out of the office, if possible — to a coffee shop, for example. Listen to their side of the story with an open mind. Ask them what they feel should be done, and try to understand their position. Ask both sides (or all sides, if there are more than two) to propose a solution. Then try to find a common one that all can agree on. Encourage open communication. Follow up with all parties involved to determine whether the solution has worked and conflict is reduced. If not, bring all parties together — again, in a neutral setting — and ask for more solutions and a timeframe. Conflicts will occur in any workplace, and a certain amount of disagreement is healthy. It’s your job as manager to prevent personality clashes from affecting the whole team and their productivity. MAY 2019

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LLOYDâ&#x20AC;&#x2122;S OF LONDON

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

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