The CHART Exchange October 2019

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Who Watches The Watchers?

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Lloyd’s Reveals Plans To Become Most Advanced Insurance Marketplace In The World

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Your Guide To Discussing Third-Party Cyber Risk Management At The Q3 Board Meeting

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Case Study: PrecisionDriven Drone Imaging

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Merger & Acquisition Services, Inc Announced As Finalist For 18th Annual M&A Advisor Awards

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Lloyd’s Announces Signature Actions To Drive Cultural Change

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New: Lloyd’s Dive In Festival 2019

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Arizona DOI Warns Against Phishing Scam Targeting Insurance Professionals

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Lloyd’s Confirms Sansom As Chief Risk Office And Departure Of Andrews

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Nearly 1,400 Attend FirstEver IA Evolve Innovation & Technology Virtual Conference

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

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Latest CHART Event Highlighted With Expert Presentations

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Eight in Ten Organizations Identify Third-Party Risk Beyond Initial Due Diligence

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NAIC Releases Statistical Compilation Of Annual P&C Statement Information

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The Termination Process: Key Notes

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Artificial Intelligence (AI): Alarming Or A-OK?

Cover Image: Laurence Mackman, Lloyds Of London Stair Tower Detail, CC BY-SA 4.0

OCTOBER 2019 VOLUME 4 - ISSUE 10 Publisher: CHART Exchange Glenn W. Clark, CPCU Membership Services Kate Boyle How Partnering With The Experts Can Bring Real Drone Solutions

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: Arizona Warns Against Phishing Attacks Against Insurance Pros

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MESSAGE FROM THE EARLIEST ADOPTER

LATEST CHART EVENT HELD IN MIDTOWN MANHATTAN HIGHLIGHTED BY EXPERT PRESENTATIONS

The session was held in the midtown Manhattan office of Wilson Elser – CHART’s first Vendor Partner and most committed supporter. This prestigious law firm has over 800 attorneys located in 37 strategically located offices across the United States, with another in London. “

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ver the last year, a great deal of virtual “ink” in this magazine has been used to articulate our new vision of the CHART Exchange concept. One of the features talked about for “CHART 2.0” was the idea of hosting several meetings in different parts of the country over the course of 2019. Our most recent event was held in New York City, NY on September 30.

This recent meeting represented a rather significant departure compared to the way we used to operate. The event itself was limited to one full day. A number of the peripheral features traditionally included in insurance industry functions – keynote addresses, organized vendor activities, etc – were eliminated. The London-centric agenda covered a number of relevant topics, while also allotting ample time for networking and private meetings to discuss new business opportunities. There was no charge assessed to participate.

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Glenn W. Clark, CPCU Publisher & Earliest Adopter

The session was held in the midtown Manhattan office of Wilson Elser – CHART’s first Vendor Partner and most committed supporter. This prestigious law firm has over 800 attorneys located in 37 strategically located offices across the United States, with another in London.

Their reputation, expertise, and international footprint make them uniquely positioned to assist agencies looking to operate within our unique market niche.

Our agenda included a presentation from Hank Watkins (Regional Director & President, Americas Lloyd’s). Hank was in London to participate in the market’s annual strategy session; he took time from his busy schedule to address the group on “The Future At Lloyd’s”.

www.chart-exchange.com

Attendees received some background on the market, including global premium production, financial results, and domestic portfolio diversity. He provided the audience with insights on the various initiatives being implemented by Lloyd’s to maintain its global status as an innovative insurance market. Hank also shared with us a document titled “Blueprint One – The Future At Lloyd’s” – a much more comprehensive/detailed version of his presentation. This informative piece is available on our website (www.chart-exchange.com) under the “CHART News” section, Members of the Wilson Elser team provided insights into two separate issues. The first one dealt with the potential liability exposures that accompany technological innovation.

The discussion was led by Jura Zibas, (Partner, Wilson Elser). Ms. Zibas’ presentation touched on a number of issues, including drones and 3D printing.

Another of the law firm’s partners (Nancy Wright) tackled the topic of sexual harassment claims in the “#MeToo” era. The presentation reviewed legal trends related to sexual harassment and retaliation claims.

www.chart-exchange.com

We learned that these matters extend beyond the traditional employeremployee relationship; they can include exposures brought about by third parties as well. Ms. Wright was able to add substance in the talk by recounting some of her personal experiences litigating employmentrelated cases..

OTHER TOPICS ADDRESSED DURING THE MEETING INCLUDED: •

•

•

Program Incubation. Achieving coverholder status takes time. We provided a real-life example of how CHART’s Incubator Initiative can be used to bring a new program to market more expeditiously.

Securing Delegated Underwriting Authorities.

John Randolph (First Indemnity) provided the attendees with an overview of his agency’s experience in securing Delegated Underwriting Authorities from London.

Use of Fronting. Mark Rattner (Chief Underwriter, Fortegra) provided insights into distributing a Lloyd’s-underwritten product using admitted paper. This can be accomplished using a hybrid fronting model available through his firm

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Distribution Support. Attendees were given a demonstration of CHART Markets – the virtual online shopping mall exclusively featuring London-underwritten insurance products. Discussions were also held about the benefits of advertising in the organization’s e-magazine.

The event agenda included ample time for networking and private discussions relating to new business opportunities.

Please contact us at info@chartexchange.com with any questions you may have about our latest meeting.

Glenn W. Clark , CPCU CHART’S Earliest Adopter

OCTOBER 2019

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ANALYSIS - KROLL

EIGHT IN TEN ORGANIZATIONS IDENTIFY THIRD-PARTY RISK BEYOND INITIAL DUE DILIGENCE

By Daniel Hartnett

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new survey of legal and compliance leaders has found that 83% of organizations discover risks with third-party vendors only after the due diligence period, highlighting the danger of solely relying on a point-in-time approach to risk management.

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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.

www.chart-exchange.com

According to Gartner’s 2019 ThirdParty Risk Management Survey, even “exhaustive upfront due diligence” demonstrated an inability to identify certain critical risks presented by third-party vendors. The report further notes that the problem isn’t necessarily in the initial due diligence conducted. Rather, issues emerged only after the onboarding process was completed, reinforcing a growing belief that a legacy approach to third-party risk management is no longer adequate to mitigate risk.

Instead, the report advocates for an iterative approach to third-party risk management that continues to monitor third-party developments in near real time. This allows businesses to identify risk faster

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and engage remediation processes more quickly to minimize a firm’s exposure to any legal or reputational risk.

THE MODERN CHALLENGES OF THIRDPARTY RISK MANAGEMENT One area of risk stems from the methods in which organizations now collaborate with third parties.

Third-party relationships are increasingly dynamic, evolving along with organizations’ needs, introducing new variables—i.e. new risks—that weren’t present during onboarding. Additionally, today’s data-driven approach to business operations results in third-party vendors gaining greater access to organizational data, creating a vulnerability where risk can manifest.

In addition, the business models and internal operations of third-party vendors can also create their own inherent risks. A growing number of third parties now include startups and business model innovators See Indentify 3rd Party Risk Page 27

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THERE’S A BETTER WAY TO CONNECT WITH LONDON …

CHART CAN GET YOU THERE FASTER! Most of us know about Lloyd’s of London. The market’s 332 year track record of innovation, technical expertise, and product diversity has cemented its reputation within the industry. Unfortunately, the vast majority of U.S.-based agencies with new program or product ideas are unsure of how to access the world’s oldest insurance brand.

The CHART Exchange can help. We were established for the sole purpose of growing the U.S./London marketplace by serving as the conduit between domestic producers and Lloyd’s Risk Takers. Our vast network of Vendor Partners can provide the support needed to help develop your program proposal. Available services include Actuarial, Claims Administration, Marketing, Legal, and Systems. We can even assist in expediting the implementation of your new program through our unique “Incubator” facility.

Interested in learning more? Visit our website at www.chart-exchange.com. We are also available via e-mail (info@chart-exchange.com) or by phone at the number below.

855-716-3660 The CHART Exchange 3001 Philadelphia Pike Claymont, DE 19703 www.chart-exchange.com • Fax: (302) 334-0325

NEWS - NAIC

NAIC RELEASES STATISTICAL COMPILATION OF ANNUAL STATEMENT INFORMATION FOR PROPERTY/CASUALTY INSURERS send any questions regarding this report to researchrequest@ naic.org. Links to this report and other NAIC reports can be found on the NAIC publications page.

ABOUT THE NAIC

W

ASHINGTON (Sept. 26, 2019) — The National Association of Insurance Commissioners (NAIC) has released data on property and casualty (P&C) insurance companies.

The reportis broken into three sections: Annual Statement Financial Data; State, Territory, and Aggregate Other Alien Insurance Data; and Selected Data Elements from Company and Combined Statements.

HIGHLIGHTS FROM THE REPORT INCLUDE: •

Direct written premium in 2018 ($677,382,129,000) is up 40.7% from 2009. www.chart-exchange.com

• •

•

P&C industry surplus is $779 billion, up from $556 billion in 2009.

The combined ratio in 2018 of 99.3% indicates an industry-wide underwriting profit for the year.

The largest line of business in the P&C industry is private passenger auto with 36.4%, (includes liability and physical damage coverage) of total industry direct written premium. Homeowners premium makes up 14.6% of total industry direct written premium.

Comments on this report are encouraged to ensure the report continues to meet the needs of NAIC members and other users. Please TABLE OF CONTENTS

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standardsetting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. For more information, visit www.naic. org.

OCTOBER 2019

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ANALYSIS - LAURDAN ASSOCIATES

THE TERMINATION PROCESS: KEY NOTES

By Ronald Adler, CEO, Laurdan Association, Inc.

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ver the years, the employment relationship has become increasingly regulated by protective legislation on the federal, state, and local levels, and there has been an erosion of the employment-at-will doctrine by judicial acceptance of a number of legal theories, including the treatment of an organization’s employee handbook as an implied contract and the invalidation of employee discharges based on a host of public policy considerations.

At the same time, many state and local governments have enacted laws

and regulations that circumscribe management’s previously considered sacrosanct “freedom to fire.” Further, the NLRB has weighed in on the rights of employers to terminate employees under employment-at-will doctrine. All of this has led to limits being placed on the traditional right of employers to discharge employees previously considered employed “at will.”

In this legal and regulatory milieu, your organization’s decisions to discipline, suspend, or terminate employees expose it to potential significant employment related liabilities, with the liability exposure meter running until all legal challenges that may be mounted are finally resolved. This could take

months, or in some cases years, because the administrative and judicial procedures can be onerous and can be time consuming.

Moreover, in addition to back pay and reinstatement remedies, many legal claims also result in awards of punitive or exemplary damages that are designed to punish or make an example out of unlawful or socially unacceptable conduct. Frequently, these awards run to the millions of dollars. In calculating the cost of such claims your organization should add the cost of legal fees and defense costs, the diversion of management’s attention and time, the damage to See Termination Process Pg 20

A

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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www.chart-exchange.com

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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.

ANALYSIS - VANTAGE AGORA

AI allows us to rethink the ways in which we use and analyze data to help improve decision-making abilities.

By Vantage Agora

D

o machines really have the power to improve upon and transform the way we make decisions? The answer is an astounding: yes! With the advent of artificial intelligence (AI) already upon us, our society is advancing technologically by turning what used to be a science fiction fantasy into reality.

In short, AI allows us to rethink the ways in which we use and analyze data to help improve decision-making abilities. The choices formulated by AI machines are meant to mimic a human response which is quite literally what they do.

www.chart-exchange.com

AI is a transformative technology that is no longer a hype but a reality. It has the power to shape our world and create promising answers to the problems that until now, we did not know how to solve!”

This might seem a little frightening, but more often than not, it’s all a good thing. AI processes can TABLE OF CONTENTS

be even more effective than the human brain at identifying data patterns; a discovery that is extremely beneficial to companies containing large data stores that require insightful findings.

Insurance, law, healthcare, finance, automotive and countless other industries are already discovering that incorporating AI into their daily functions can unleash powerful potential.It’s not a futuristic concept anymore; the technology is here now and is ready for utilization!

You may be thinking, ‘How does AI technology have the strength to See Artificial Intelligence Pg 23 OCTOBER 2019

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ANALYSIS - BLUEVOYANT

WHO WATCHES THE WATCHERS? No one is paranoid if they think they are being watched and, in fact, they are correct.

By Jennifer Rothstein

Q

uis custodiet ipsos custodes?

The literal translation of this line, written during the 2nd Century AD, means “Who will guard the guards?”, although the most common translation is “Who watches the watcher?” (Source, Junvenal, Satires, Satire VI, lines 347348). In 1984, Motown singer Rockwell released his hit song, “Somebody’s Watching Me.” It reached #2 on the “Billboard Hot 100”, the music industry standard record chart in the United States. Notable highlights from the song include, “I’m just an average man with an average life...I always feel like somebody’s watchin’ me and I have no privacy...I don’t feel safe anymore, oh what a mess.”

The rise of ransomware attacks and focus from the insurance industry on coverage ramifications associated with any intrusion supports the need for corporate vigilance.

Keeping an eye on the attacker who is watching you or your network provides an effective, offensive solution we should all consider.“

Latin phrases and hit songs often stand the test of time. In our current, computer-dominated environment, these themes resonate. Rockwell thinks he’s an “average man with an average life” and later in the song, wonders whether he is paranoid with his thoughts of being watched.

But today, we know that no one has complete privacy - from average individuals with average lives - to individuals who live in the spotlight.

No one is paranoid if they think they are being watched and in fact, they are correct. The question is, in our environment where lack of privacy is the norm, who is watching and can we protect ourselves by watching the watchers?

See Who Watches The Watchers Pg 32

About the Author: Jennifer Rothstein is the Business Development Head,

Insurance & Legal, for BlueVoyant, a cybersecurity provider headquartered in New York City. She also co-founded and serves as the President of Women in Cyber Leadership Corp. As the cyber security industry has been rooted in STEM and the military, she recognized that it can be intimidating for women to start and thrive within the space, and has dedicated her efforts to providing everyone with the tools, opportunity, knowledge and confidence to succeed in cyber.

Throughout her career at companies such as Kroll and AIG, she has lead the effort in combining cyber expertise with her deep knowledge in insurance. She is driven by a resolve to demystify two complex categories allowing access and understanding to both cybersecurity and insurance in our increasingly interdisciplinary and interconnected world.

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www.chart-exchange.com

NOW HERE’S A REAL SHOCK… The first firearm liability product that can be sold by independent insurance agents!

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

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

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

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

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

E-mail: president@rockwoodinsurance.com

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

NEWS - LLOYD’S OF LONDON

LLOYD’S REVEALS PLANS TO BECOME MOST ADVANCED INSURANCE MARKETPLACE IN THE WORLD

T

oday Lloyd’s launched the Future at Lloyd’s Blueprint One which describes Lloyd’s strategy to build the most advanced insurance marketplace in the world. The blueprint includes details of the initiatives that will be delivered for customers and market participants during 2020.

The publication of Blueprint One follows the unveiling of the Future at Lloyd’s prospectus on 1 May 2019, and marks the first in a series of updates which will be issued at least annually. This first blueprint sets out six ideas of improved ways of working, underpinned by a heightened focus on digital, data and technology to deliver greater benefits to customers.

The document describes the solutions and, importantly, the way in which the ambition set out in the Future at Lloyd’s will be delivered by strong transition and execution planning, followed by a series of phased deliveries. www.chart-exchange.com

Lloyd’s also today announced that Munich Re will launch the first new “Syndicate in a Box” through its well-established Lloyd’s vehicle Munich Re Syndicate Limited. The Munich Re Innovation Syndicate will begin underwriting on 1 January 2020 with no physical presence in Lloyd’s. It will underwrite a range of innovative lines of business such as renewable energy and parametric insurance for weather risks.”

John Neal, Lloyd’s of London CEO

Phase I will be delivered during 2020 and will include early quick wins, including the launch of an electronic risk exchange which could, over time, process as much as 40% of Lloyd’s risks. In addition, Lloyd’s will pilot a solution that automatically triages claims to speed up settlement and introduce simplified onboarding for Lloyd’s coverholders.

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John Neal, Lloyd’s CEO, said: “The extensive feedback we have received in progressing the blueprint has confirmed the preeminent place Lloyd’s holds globally in insurance and reinsurance. The plans unveiled today create execution certainty through phased delivery. The support we have enjoyed to date has been essential to delivering Blueprint One and we are seeking the renewed commitment of all market participants to partner with us to achieve our vision to build the most advanced insurance marketplace in the world.”

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ANALYSIS - LAURDAN ASSOCIATES, INC. Continued From Page 12

THE TERMINATION PROCESS

Thus, regardless of the outcome of the legal process, if your organization is forced to defend itself for unlawful, discriminatory, unfair, or negligent discipline or termination, it should be prepared to spend considerable time, effort, and resources. Indeed, because of the time and expense that confront employers in defending employmentrelated claims by separated employees, it is often said that, in the employment context “if you’re sued, you lose,” irrespective of the final judicial outcome.

Even if your discipline-termination

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Considering the negative consequences of discipline and termination decisions, your organization should take appropriate steps to reduce its exposure to legal and regulatory based challenges, limit

the liability from such legal challenges, and ensure that its decisions do not result in the loss of productive assets.

This requires employment policies that are aligned with business objectives; the effective communication of your organization’s performance and conduct expectations; employment practices that reward employees for positive performance, holding employees accountable for poor TABLE OF CONTENTS

performance or misconduct; and employment practices and processes that treat employees fairly and comply with federal, state, and local statutes, regulations, and the common law.

It also requires the use of sound judgment, an analysis of comparative disciplinary actions in your workplace, and the use of a thorough, factintensive investigation prior to making any discipline-termination decisions.

In this environment, organizations should regularly evaluate their whole employer-employee relationship: from the selection and hiring process, to the employment relationship with employees, to disciplinetermination decision making.

With the unemployment rate low, finding and hiring employees remains difficult, identifying the “right:” employees for your positions has never more important, and keeping key employee more critical.

Thus, managing your employmenttermination decisions-making process will play a substantive role in determining your organization’s ongoing success and in ensuring that your organization uses proper termination procedures that will help your organization manage costs and reduce potential liabilities. www.chart-exchange.com

PIXABAY: Your Fired Geralt

your organization’s reputation and employment brand, the negative impact on employee morale and productivity, the potential threat to contractual agreements, and any marketplace reevaluation of your stock price.

decisions are not challenged, decisions that are misaligned with business objectives or that cause top performers or key employees to leave can have a negative impact on your organization’s competitiveness and long-term success.

Thus, your organization should also add to the cost equation the opportunity costs of lost business opportunities.

One Star Insurance Solutions, LLC offers a comprehensive Excess Program available to all independent agents for excess coverage with limits from $1 million to $10 million. Additional limits are also available upon request.

We received our Lloyd’s Coverholder designation in 2016 and have underwriting authority to offer follow-form excess in 13 states.

This program is open to all agents with a specific focus in the oil & gas sector, who have needs for increased limits /coverages over underlying policies and want to take advantage of the follow-form coverage.

This Excess coverage is also available on risks such as contractors for building trades, transportation construction, utility construction, land improvement, forest products, structural moving and general contractors.

It is our recommendation that you offer our indication unsolicited to all of your oil & gas clients. The reason is two-fold:  Our Rate Indication Workbook provides fast, accurate indications for your clients. In most cases, the indication that is calculated will be the final quote*.  Most importantly, by offering an excess quote you have alleviated the burden of a potential E&O claim.

Gunnar Kephart, E&O Specialist for the Independent Insurance Agents of Texas has indicated that the largest number of E&O claims have come as a result of not offering enough limits or not offering the coverage at all.

Over BITCO:

Submission Requirements

Signed Acord 125 & 131 BITCO Auto Questionnaire Oil Lease Operator/Contractor Questionnaire Underlying Quotes Underlying Limit Requirements: CGL 1M/3M, AL 1M, PL 1M/3M, EL 1M/1M/1M

5-year Currently Valued Loss Runs If applicable: Well Schedule Drilling footage for wells to be drilled MSA Program Manager, Hannah Walters Hannah@1starins.com *Complete submissions will need to be made with all required data before a formalized quote can be issued.

ANALYSIS - KROLL

YOUR GUIDE TO DISCUSSING THIRD-PARTY CYBER RISK MANAGEMENT AT THE Q3 BOARD MEETING

By Shay Colson & Ryan Spelman, Senior Manager, Legal Management Consulting in the Duff & Phelps’ Seattle office

B C

o-Author Shay Colson is a director in the firm’s Legal Management Consulting practice and leads the Assessment Team for CyberClarity360™, a groundbreaking solution that helps organizations understand and manage their exposure to supply chain cyber risk through a fully transparent scoring system. Shay has over a decade of experience in cybersecurity and information assurance, with a focus on designing and building secure systems. He is a proven innovator in exponential technologies, having been inventor or co-inventor on nearly a dozen patents around 3D printing, self-driving cars, drones, blockchain and smartcontract technologies.

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ack to school time for chief information security officers (CISOs) means one thing: being prepared to explain your cyber risk management strategy to the company board at the upcoming Q3 board meeting. As a key security leader in an organization, you have great insights into the efficacy of the controls in place. CISOs know the number of attacks the organization has experienced and cyber security trends impacting the industry.

Therefore, you should come prepared to face the question of how you’re planning to tackle third-party cyber risk.

Third-party cyber risk arises from vendors, partners and suppliers who have access to your sensitive data, system or network, or all. That risk is magnified by a lack of clarity around how they may be protecting your sensitive data. As the original receiver or custodian of the data, it is up to you to ensure specific controls are in place to protect it. That responsibility

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continues even if you entrust it to someone else. Unfortunately, while most CISOs can recite chapter and verse on their incident response plan, they are often unable to confirm that the vendors they work with have an incident response plan themselves.

Savvy board members are aware of the changing cyber risk landscape and increasingly asking questions of company CISOs. What has caused this shift?

For many, recent news headlines about breaches – like Target, Quest Diagnostics and others impacted due to a third party (or fourth party in some cases) – are unavoidable.

Second, cyber security regulations like those from the New York State Department of Financial Services specifically require organizations to have a program that mandates third parties meet specific security controls.

This regulation has extra sensitivity for boards, as they must certify that these controls are in place. The Securities

See Cyber Risk Management Page 31 www.chart-exchange.com

ANALYSIS - VANTAGE AGORA Continued From Page 15

ARTIFICIAL INTELLIGENCE (AI): ALARMING OR A-OK? transform our current processes?’

Since Vantage Agora works heavily with the insurance industry, we’ll start there!

When discussing insurance, AI seems to be in everyone’s best interest. With the power to improve risk prediction and underwriting processes, it’s no wonder the technology has taken adoption in the industry.

Vantage Agora is keeping with the latest technology and has incorporated AI into their own Business Operating System, giving www.chart-exchange.com

clients the capability to automate what used to be tedious and timeconsuming manual tasks. This results in massive savings for both the company and their clients.

And it’s not solely the insurance industry that has experienced the benefits of AI. The healthcare industry has introduced ‘precision medicine’ with the help of AI to provide a more accurate treatment path for patients.

Pre-AI, we umbrella-categorized patients with a specific diagnosis under the same treatment plan; even though no two patients are the same. Now, AI is used to help predict which treatment path

You may be thinking, ‘Can’t humans do this too?’ Yes, but not with the accuracy and speed that a machine is capable of. If an odd behavior is identified by the machine, an alert will be automatically sent out to notify the cardholder.

We could sit here all day discussing the uses and benefits AI has brought to numerous industries.

But even with all the excitement surrounding technology, AI is still instilling fear in some. With the dawn of this technology, there are worries that it will lead to potential job losses as well as increased unemployment rates.

would work best for each specific patient based on their genetics and medical history; it’s not just a ‘one way works best’ tactic anymore!

But have no fear; AI has proven to work in-sync with humans and has created more benefits and successes than losses and failures!

AI has also integrated into the finance industry with its ability to quickly sense credit card fraud.

Machines can rapidly detect unusual behavior by looking at past spending history.

AI is a transformative technology that is no longer a hype but a reality. It has the power to shape our world and create promising answers to the problems that until now, we did not know how to solve!

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www.chart-exchange.com

CASE STUDY - VANTAGE AGORA

CASE STUDY In 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 www.chart-exchange.com

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%.

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, 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.

implemented for a successful, datadriven software solutions provider.

See Drone Imaging Page 26 TABLE OF CONTENTS

OCTOBER 2019

25

CASE STUDY - VANTAGE AGORA Continued From Page 25

Drone Image - CC0 Public Domain

PRECISIONDRIVEN DRONE IMAGING 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.

VANTAGE AGORA’S SOLUTION:

Vantage Agora’s back office team took on this profile-analysis task, carefully inspecting the drone images of residential Through drone imaging, the company and commercial properties and provides end users with valuable reporting any detections. Once information regarding their property; the detections were finalized picking up on detections such as – and accurately conveyed to the boundary drawing, roof material, company, pricing structures were swimming pools, damage, wear & tear, then developed and properly roof shape, tree overhang, ponding, delivered to end clients. 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, the previous rate was simply unacceptable to deliver to end users.

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OCTOBER 2019

The drone images were delivered in bulk to the Vantage Agora team and thoroughly analyzed by a trained group of inspectors.

All images underwent a rigorous quality checklist before beingreturned to the company, ensuring process compliance,

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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 dronecaptured images skyrocketed from 70% to over 95%.

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.

www.chart-exchange.com

CASE STUDY - KROLL Continued From Page 9

EIGHT IN TEN ORGANIZATIONS IDENTIFY THIRD-PARTY RISK BEYOND INITIAL DUE DILIGENCE that conduct operations differently than traditional incumbent service providers, presenting previously unknown areas of risk.

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

Third parties are also increasingly utilizing their own third parties to outsource business services. As a result, a single organization may be enlisting vendor services that are built on an ever-changing mix of fourth or fifth parties, inhibiting oversight and limiting the value of scheduled due diligence.

Furthermore, the nature of vendors can change over the course of a business relationship.

A third party can be bought or sold at any time, ultimately resulting in new beneficial ownership. Directors and senior leadership of a third party can also change over time.

Because of these issues, third-party risk often may materialize only after www.chart-exchange.com

the initial due diligence process is completed and a relationship is established. This is where a due diligence policy of solely conducting point-in-time screening begins to fall apart. Any risk-relevant development

that occurs after the initial screening would likely catch a firm by surprise and limit its ability to remediate before suffering a substantive impact.

WHAT THIS MEANS FOR YOUR DUE DILIGENCE MODEL TABLE OF CONTENTS

Gartner’s survey is just the latest evidence that solely relying on a point-in-time due diligence process is insufficient to meet modern business challenges. Instead, your third-party risk management strategy should embrace a continual approach to due diligence that features ongoing monitoring, as well as agile remediation strategies to quickly address new risk factors as they’re identified.

To implement this iterative approach, a process-oriented strategy is needed to build a framework for continued oversight and, when necessary, intervention. The use of an iterative compliance platform can help organize these tasks and maintain consistent monitoring of your third parties throughout the business relationship.

First-line screening still has its place in a successful due diligence program, but given the complexity of today’s third-party vendor relationships, initial screening alone is no longer enough to minimize your organization’s exposure to risk. Only with an iterative third-party due diligence program where you can constantly monitor your existing third-party relationships can you truly position your organization to act quickly when a problem arises.

Implementing an effective continuous third-party due diligence program now will save your organization costly damages later from any thirdparty corrupt or illegal behavior.

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NEWS - M&A SERVICES

MERGER & ACQUISITION SERVICES, INC. ANNOUNCED AS FINALIST FOR 18TH ANNUAL M&A ADVISOR AWARDS

N

ew York, NY, September 3, 2019 – The M&A Advisor has announced the Finalists in the categories of M&A Deal of the Year, Restructuring Deal of the Year, Cross-Border Deal of the Year, Corporate/Strategic Acquisition of the Year, Deal Financing of the Year, Sector Deals of the Year, Firms of the Year, M&A Product/Service of the Year, and M&A Professionals of the Year for the 18th Annual M&A Advisor Awards.

MERGER & ACQUISITION SERVICES, INC. WAS SELECTED AS A FINALIST IN THE 7 FOLLOWING CATEGORIES: •

•

•

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FINANCIAL DEAL OF THE YEAR – Acquisition of Ozark National Life Insurance by National Western Life Insurance Company BOUTIQUE INVESTMENT BANKING FIRM OF THE YEAR – Merger & Acquisition Services, Inc. INVESTMENT BANKER OF THE YEAR – Jason C. Murgio, CEO, OCTOBER 2019

•

•

•

•

Merger & Acquisition Services Inc. CORPORATE/STRATEGIC DEAL OF THE YEAR ($100MM$250MM) – Acquisition of Lackawanna Insurance Group by Group 1001 CORPORATE/STRATEGIC DEAL OF THE YEAR ($100MM$250MM) – Acquisition of Ozark National Life Insurance by National Western Life Insurance Company M&A DEAL OF THE YEAR ($100MM-$250MM) – Acquisition of Ozark National Life Insurance

by National Western Life Insurance Company DEBT FINANCING OF THE YEAR – Debt Financing of Summit Risk Advisors with Colbeck

The Finalists have been selected from the nominees in the first stage of evaluation, and the independent panel of judges will now focus their attention on the challenging task of selecting the ultimate award winners that will be announced at the 18th Annual M&A Advisor

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Awards Gala on Tuesday, November 19th at the New York Athletic Club in New York.

Founded in 1998, The M&A Advisor introduced the awards program in 2002. Since then, they have been recognizing our industry’s most notable dealmakers, firms, and transactions. “Today’s geopolitical climate presents our industry professionals and the businesses they serve with unique challenges,” said Roger Aguinaldo, founder of The M&A Advisor. “This year’s finalists exemplify the fortitude, perseverance, and ingenuity required not only to get the deal done but to excel in the field of mergers and acquisitions. It is truly an honor for The M&A Advisor and for me, personally, to recognize the contributions of the 2019 award finalists.”

For a detailed list of the 18th Annual M&A Advisor Award Finalists CLICK HERE.

See M&A Advisor Awards Page 43 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

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

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

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

M&A Services is

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

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

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

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

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

ANALYSIS - KROLL Continued From Page 22

THIRD-PARTY CYBER RISK MANAGEMENT and Exchange Commission (SEC) has also released guidance encouraging companies to focus on this, as have other federal regulators. Finally, most boards already have risk or audit committees that consider third-party risks in other areas, so focusing on cyber risk is a natural next step.

Your challenge, as a security leader, is two-fold when it comes to the board. You must not only be able to answer their questions honestly and accurately, but also explain how your organization is evolving to face this risk. It may seem daunting, but the below suggestions can help you have a better conversation with your leadership: If you do not have a program for vendor cyber risk management, start one: If you don’t have one already, now is the time to put one in place.

You can begin that process by building a formal onboarding process that considers the security posture of the organizations with whom you share data. You can get some ideas from the Legal Vendor Cyber Risk Management guide. www.chart-exchange.com

If you already have a program, build your risk story: Have you prioritized them by the type of data you share or the amount of money you spend on their services? Do you know which controls matter the most to your enterprise or the data regulations you must follow? Sharing how you are thinking about the risk shows the board that you’re taking a prudent and thoughtful approach to this issue.

Explain what you want to do: Vendor cyber risk management is a new focus for security leaders, so it’s okay if you are in the early stages of a program.

You must still have a goal for your program, however. This goal could include moving from a bi-annual assessment process to an annual one or expanding the number of vendors you are assessing to include those you share less-sensitive data with, but who may receive sensitive data one day. This goal provides the board with useful insight into what your priorities are and helps them balance those in light of other business needs.

Preparing for a board meeting can be stressful for anyone, and those in security leadership often face additional challenges explaining technical concepts to a non-technical audience. However, by hitting the books and following the guidance above, you can be ready for the inevitable questions on third-party cyber risk and turn a tough topic into an enlightening conversation for everyone involved.

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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.

OCTOBER 2019

31

ANALYSIS - BLUEVOYANT Continued From Page 16

WHO IS WATCHING THE WATCHERS? The Internet of Things, as a concept, wasn’t officially named until 1999. One of the first examples of an Internet of Things is from the early 1980s, and it was a Coca Cola machine, located at Carnegie Mellon University. Local

programmers would connect by Internet to the refrigerated appliance, check to see if there was a drink available and confirm whether it was cold prior to making the trip to purchase a can. (Source: https:// www.ibm.com/blogs/industries/littleknown-story-first-iot-device/).

The modern day Internet of Things includes connected security systems, thermostats, cars, electronic appliances, and numerous other devices we don’t even know are connected. The leading industries that are increasingly relying on the Internet of Things include maritime shipping, aviation, smart cities, and critical infrastructure.

There are benefits to a connected culture: increased communication;

financial and operational efficiencies; augmented protections. However, there are also significant drawbacks and negative implications that may wreak havoc in our daily lives. The interconnectedness provides multiple opportunities for attackers to infiltrate our society. Their practice of watching individuals and corporations in order to steal data and disrupt the status quo is thriving.

Attackers patiently and relentlessly look for these opportunities through the systems of ordinary appliances, email traffic, domain names, and patterns of behavior. They identify appealing characteristics of corporations including, but not limited to, marketplace presence, research and development,

jaydeep_, Cybersecurity, CC0 1.0

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reputation, employees, clients, board of directors and financial success.

The threat landscape presents new challenges for corporations and individuals to manage these risks.

Similarly, insurance carriers are struggling to underwrite and price them. It is difficult to trace the origin of a cyber attack when there are several points of entry. Further, it may be hard to determine whether multiple damages - including physical damage - resulted from one single, related event or many.

From a policy response perspective, these events could trigger not only a cyber liability policy, but also a general liability policy. But risks are not only interconnected; they can be singular, isolated and still be catastrophic. Cyber risk management, therefore, must play a critical role in reducing and avoiding the totality of these risks both to individuals and corporations.

In this context, we hark back to our original framework for inquiry: who is watching the watchers? On an individual basis, there are identity theft monitoring solutions that can be purchased at a reasonable price, or even available through banks or insurance carriers at no cost. Oftentimes, when clients’ or employees’ data is compromised as a result of a company attack, these services are provided by victimized corporations.

It shouldn’t be a surprise, then, to learn about a similar solution for monitoring potential threats to www.chart-exchange.com

organizations. The solution is called endpoint threat monitoring, and is also known as managed detection and response. Typically, the solution is not intrusive to the organization if conducted properly. The process begins by deploying software on endpoints while at the same time, whitelisting client applications to minimize business interruption.

Many organizations benefit by transferring the orchestration of the project and associated action items to a dedicated third party team of experts, especially if their IT department is understaffed or not experienced in the role of monitoring networks. When a suspicious event is detected or an alert is generated, a member of the monitoring team will perform an analysis to investigate whether the alert is a true positive, benign, or false positive and the client will be notified. Upon completion, a specific set of actions may be triggered: quarantine, delete, whitelist, monitor, or blacklist.

Not only may the response take place in real-time, but it can be conducted remotely, resulting in immediate prevention of the execution of suspicious or known malicious software, thereby containing the outbreak or spread of that malware.

Should the malware be recognized, the response can be even more tailored to that particular strain.

The insurance community is offering support for these monitoring tools.

Underwriting applications ask questions about the existence of monitoring tools already installed.

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These questions signal to the insured monitoring tools are important measures underwriters consider when evaluating a risk. Carriers may offer financial and coverage incentives to organizations that can answer in the affirmative. From a cost benefit analysis, both the insured and the carrier are positioned to save money if an intrusion can be stopped before it rises either to the definition of an incident that needs to be investigated or for which a ransom must be paid to resume business operations.

Conversely, the absence of monitoring tools may negatively affect the resulting policy offering or even coverage determination.

Regulators are also encouraging the implementation of these tools. For example, financial institutions are facing an increasing number of cyber security regulations. Monitoring tools assist with the compliance of these burdensome and confusing requirements which help the organization avoid penalties, reputational damage and provide a defensible argument should any incident occur.

The rise of ransomware attacks and focus from the insurance industry on coverage ramifications associated with any intrusion supports the need for corporate vigilance. Keeping an eye on the attacker who is watching you or your network provides an effective, offensive solution we should all consider.

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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

NEWS - LLOYD’S OF LONDON

LLOYD'S ANNOUNCES SIGNATURE ACTIONS TO DRIVE CULTURAL CHANGE Lloyd’s today announced a series of signature actions designed to make the Lloyd’s market a place where everyone can feel safe, valued and respected.

T

hese actions are Lloyd’s response to the findings* of the largest culture survey ever conducted in the insurance sector. The survey was commissioned by Lloyd’s in the wake of reports of sexual harassment in the Lloyd’s market, however the results

paint a more complex picture, with four key themes emerging: •

•

The experience of women in the Lloyd’s market – women scored more negatively than men across the piece, whilst one in five respondents do not believe people have equal opportunities regardless of gender.

Speaking up – 8% of all respondents had witnessed sexual harassment over the previous 12 months, however just 45% said they would feel comfortable raising a concern.

•

Wellbeing – 40% of survey respondents felt under excessive pressure to perform at work, whilst 24% had observed excessive consumption of alcohol during the past 12 months.

•

Leadership – 22% of respondents have seen people in their organisation turn a blind eye to inappropriate behaviour.

The programme of measures** announced today builds on the fivepoint action plan^ put in place earlier this year and is intended to further accelerate the pace of change. Actions include: •

A Gender Balance Plan, setting clear and measurable targets for improving the representation of women at senior levels within the Lloyd’s market, based on the principles set out in the Hampton Alexander review.

•

Setting Standards of Business Conduct requiring every person and every organisation operating in the Lloyd’s market to act with integrity, be respectful and always speak up.

See Lloyd’s Cultural Change Page 39

www.chart-exchange.com

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NEWS - LLOYD’S OF LONDON

DIVE IN FESTIVAL 2019 DIVE IN FESTIVAL 2019: WAS ON TUESDAY 24 - THURSDAY 26 SEPTEMBER 2019

D

ive In recognises that the global risk industry is facing complex challenges such as climate change and cyber crime. In order to attract the very best talent to keep pace with the rate of change, insurance needs to focus on its reputation as a great sector to work in.

This means looking beyond traditional definitions of diversity to level the playing field for talent comprehensively including gender, age, cultural background, sexuality, social mobility, faith, caring responsibilities, mental health and physical impairments.

Dive In promotes year-round best practice in diversity and inclusion with tools and advice that culminate in an annual three-day festival in September.

Events are hosted in insurance firms of all types and sizes, all around the world.

Originally launched in London in 2015 by a group of firms in the Lloyd’s Market acting through D&I strategy steering group, Inclusion@Lloyd’s, Dive In has grown far beyond its roots to include some of the world’s largest insurance companies, brokers, underwriters and associated service providers.

To view all the events being held worldwide, please visit the Dive In website.

LLOYD’S RECORDS $3.0BN (£2.3BN) PROFIT FOR THE FIRST SIX MONTHS OF 2019 LLOYD’S TODAY ANNOUNCED A PRETAX PROFIT OF $3.0BN (£2.3BN) FOR THE FIRST 6 MONTHS OF 2019

T

he key figures reported in Lloyd’s 2019 Interim Report are:

• • •

•

36

Aggregated market profit of $3.0bn (£2.3bn) (June 2018: £0.6bn) Gross written premiums of $25.4bn (£19.7bn) (June 2018: £19.3bn) Net investment income of $3.0bn (£2.3bn), 3.2% return (June 2018: £0.2bn, 0.3% return) Combined ratio of 98.8% (June OCTOBER 2019

• •

2018: 95.5%) Net resources of $41.2bn (£32.4bn) (December 2018: £28.2bn) Central solvency ratio of 266% (December 2018: 249%)

Lloyd’s profit before tax for the period was $3.0bn (£2.3bn) (June 2018: £0.6bn), underpinned by a combined ratio of 98.8% (June 2018: 95.5%) and investment income of $3.0bn (£2.3bn) (June 2018: £0.2bn), as the market benefitted from unrealised gains due to reducing US and UK bond yields as well as robust returns from equities in TABLE OF CONTENTS

the first six months of 2019.

The quality of Lloyd’s balance sheet remains exceptionally strong, with net resources growing to $41.2bn (£32.4bn) (December 2018: £28.2bn) and the central solvency coverage ratio increasing to 266% (December 2018: 249%). The financial strength of the Lloyd’s market was underscored by the recent affirmations of Lloyd’s ratings

by Standard & Poor’s (A+ Strong), AM See Lloyd’s Profits Page 36 www.chart-exchange.com

NEWS

ARIZONA DOI WARNS AGAINST PHISHING SCAM TARGETING INSURANCE PROFESSIONALS

A

rizona’s Department of Insurance has sent notification to all insurers operating in the state to bewar e of a phishing scam targeting insurance professionals:

This fraudulent email displays the NAIC and CIPR logos, can originate from what appears to be an naic. org or gmail.com email account, and instructs the recipient to click on a link to download the complaint notification.

Certain antivirus products will detect this as a malicious email.

www.chart-exchange.com

COVERHOLDER E&O

If you receive a similar email and have any concerns, contact the NAIC Service Desk at (816) 783-8500 or help@naic.org.”

According to a report by Insurance Business Mag (www. insurancebusinessmag.com), “Citing information from the actual NAIC and the Arizona Department of Administration Security Operations Center (AZSOC), AZDOI noted that the virus has been identified as Lime RAT, a remote access trojan. Lime RAT can be used to perform malicious actions on the affected computer, such as installing ransomware.

AVAILABLE NOW! U.S. Air Force photo/Airman 1st Class Christopher

“We are aware of a phishing scam targeting insurance professionals claiming that the National Association of Insurance Commissioners received a complaint that the professional submitted a falsified claim.

CHART DEFENDER

Mark Lann Phone:

302-765-6070 Email: chart.eo@rockwoodinsurance.com

AZDOI also shared that the phishing email originally targeted insurance producers in Wisconsin, but has now spread to Illinois, Minnesota, and Washington.”

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NEWS - LLOYD’S OF LONDON Continued From Page 38

LLOYD’S: $3B IN PROFITS 1ST 6 MO’S OF 2019 Best (A Excellent) and Fitch (AA- Very Strong).

Gross written premiums for the period to June 2019 were $25.4bn (£19.7bn), representing a 1.8% increase over the same period in 2018. However, the elimination of foreign exchange rate movements and growth from new syndicates points to a like-for-like year-on-year reduction in premiums of 2.6%. This is the net impact of a 6.5% reduction in business volumes as underwriters adjusted their books to improve performance and average risk adjusted rate increases of 3.9%. The Lloyd’s market also saw a reduction in the attritional loss ratio for the current underwriting year (2019) when compared to the 2018 underwriting year at the same point in time.

Lloyd’s operating expense ratio has seen a 1.2% reduction in the period, from 39.3% in 2018 to 38.1% in 2019.

Lower administrative expenses, reflecting the continued effort by the market to manage its controllable costs, contributed a 1.5% reduction whilst there was a small increase,

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0.3%, in the acquisition cost ratio from changes in the mix of business.

John Neal, Lloyd’s Chief Executive Officer, said: “We are pleased to report a profit during the first six months of 2019. It is encouraging that the Lloyd’s market is showing increased discipline in 2019 as evidenced by a reduction in gross written premiums and an improvement in the attritional loss ratio for the current underwriting year. However, we recognise the importance of continued focus on performance management to maintain this momentum throughout the rest of 2019 and beyond.

“At the same time as ensuring that our market can deliver sustainable, profitable growth, we need to make some brave choices on how to meet the expectations of our customers and all our stakeholders in the future. The Future at Lloyd’s strategy will ensure that our marketplace is ready for these challenges and opportunities ahead of us, with the first blueprint to be published on 30 September.

“Lloyd’s has also not hesitated to put in place a robust set of actions to tackle unacceptable behaviour around the market and ensure that we set the tone for a culture that encourages the brightest minds to remain in and join our industry. The centrepiece of these actions is the Lloyd’s marketwide culture survey which has built the most comprehensive picture ever commissioned of the culture across the insurance industry. We will be announcing the results of that survey and the actions that we will be taking at the Dive In Festival on 24 September."

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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.

www.chart-exchange.com

NEWS - LLOYD’S OF LONDON Continued From Page 35

LLOYD’S TO DRIVE CULTURAL CHANGE •

Introducing a Culture Dashboard to closely monitor progress in the Lloyd’s market against key indicators of a healthy culture, to be published in Lloyd’s annual report.

www.chart-exchange.com

In addition, to provide challenge and ensure that Lloyd’s is taking the right actions, we will appoint an independent advisory group comprised of leading experts with experience of successful cultural transformation. This group will be chaired by Fiona Luck, a Lloyd’s board member and non-executive director responsible for talent and culture.

A range of further measures will be rolled out through 2019 and 2020 to address the four key themes. These include promotional campaigns intended to increase confidence in speaking up, and awareness of mental health and wellbeing.

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Lloyd’s CEO, John Neal, said: “I am determined that we create a working environment at Lloyd’s where everyone feels safe, valued and respected. Cultural change takes time, but we have to accelerate progress and the measures announced today are intended to do just that.”

‘The vast majority of people working at Lloyd’s are as committed as I am to taking the action we need to drive measurable results.

Creating an inclusive marketplace is a priority for Lloyd’s and crucial to our long-term success.”

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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

LLOYD’S CONFIRMS DAVID SANSOM AS CHIEF RISK OFFICE AND DEPARTURE OF ANNETTE ANDREWS, CHIEF PEOPLE OFFICER

F

ormerly Director of Financial Services Risk at EY, David was seconded to Lloyd’s as Interim CRO in October 2018.

He worked previously in roles for the FSA and HM Treasury, and has led a broad range of risk and regulatory engagements for EY.

David Sansom Chief Risk Officer

David Sansom said “I have very much enjoyed my time at Lloyd’s and I am delighted to be taking up the CRO role on a permanent basis.

This is an exciting time for Lloyd’s and I look forward to working with the Corporation and the market to develop the risk agenda as part of the

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Future at Lloyd’s.”

David Sansom

Together we have made considerable progress. After five years, I have decided that, both professionally and personally, I am ready for a new challenge.

I remain committed to Lloyd’s and to ensuring a smooth transition to my successor.”

We have also has been announced today confirmed as that Annette Chief Risk Officer, Andrews, Chief People Officer, subject to regulatory will be leaving at approval. His remit the end of 2019. includes all areas of Annette joined Lloyd’s in January risk management 2015 and, as well within the Corporation as leading the as well as oversight Talent strategy for for market-level risks. John Neal said “Over the Corporation as a member of the past eleven He also manages the Executive Lloyd’s relationship months, David has Committee, she added real value to with regulators has driven marketLloyd’s risk thinking globally.” wide initiatives and framework including and I am delighted Inclusion@Lloyd’s to confirm him his and the annual Dive In Festival. appointment as our Chief Risk Officer.”

Annette Andrews said “Working with the Corporation has been a fantastic experience, and I have been privileged to work closely with the Lloyd’s market and wider sector.

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“I am very grateful to Annette for the support she has given to Lloyd’s over the past five years, and to me personally over the past year. She leaves with our sincere thanks and best wishes for the future.”

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NEWS - M&A SERVICES Continued From Page 28

MERGER & ACQUISITION SERVICES, INC. ANNOUNCED AS FINALIST FOR 18TH ANNUAL M&A ADVISOR AWARDS For a list of the 18th Annual M&A Advisor Awards participating companies CLICK HERE. The category winners will be announced and the awards will be presented at the 18th Annual M&A Advisor Awards Gala – the premier celebration of the year for firms and professionals in the M&A industry.

Held in conjunction with the Annual M&A Advisor Summit, the Gala will bring together the industry’s leaders, vying for the 2019 Awards, to celebrate the Finalists and Winners.

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ABOUT THE M&A ADVISOR The M&A Advisor was created in 1998 to offer insights and intelligence on M&A activities.

Over the past 21 years we have established the premier global network of M&A, turnaround, and finance professionals. Today, we have the privilege of recognizing the achievements of, and facilitating connections between the industry’s top performers throughout the world with a comprehensive range of services. To learn more visit www. maadvisor.com.

NEVER MISS AN ISSUE OF THE CHART EXCHANGE!

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.

SUBSCRIBE NOW!

To learn more about Merger & Acquisition Services, visit www.maservices.com.

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OCTOBER 2019

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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

36

1 983

13%

4,487

signed of independent agents in U.S.

national strategic partner companies

2 0 19

new agencies created

28

48

strategic master agencies

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

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www.chart-exchange.com

NEWS - SIAA

NEARLY 1,400 ATTEND FIRST-EVER IA EVOLVE INNOVATION & TECHNOLOGY VIRTUAL CONFERENCE Full conference available online for playback of all workshops and presentations

S

eptember 19, 2019 – IA Evolve, a five-hour virtual conference specifically designed to help independent insurance agencies expand their digital capabilities, brought together nearly 1,400 insurance professionals on Sept.

17, with more than 900 attending concurrently, and close to 5,800 webcast views (sessions).

Hosted by SIAA, the largest national alliance of independent insurance agents in the U.S., IA Evolve explored the impact of innovation and Insurtech and provided an interactive experience with keynote speakers, a panel of digitally focused independent agents, eight interactive workshops, live chats, a networking lounge and over 50 exhibitors in a virtual tradeshow.

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“The IA Evolve conference, which was probably the most attended event by independent agents this year, stressed how critical it is to make technology and adoption of innovative strategies a priority,” said Matt Masiello, CEO of SIAA. “Attendees engaged in a cuttingedge interactive experience and gained knowledge from leading experts about the digital tools they must invest in to succeed now and in future years.”

of all presentations and workshops, which followed four tracks: Marketing, Advisory, Service, and Operations.

Workshops included topics such as Become an Agent for the Future, Building the Modern Agency, Driving Operational Efficiency for Your Agency, High Tech, High Touch: Integrating Technology to Enhance Client Communication and Experience and more.

ABOUT SIAA

SIAA is the largest national alliance of Matt Masiello, CEO of SIAA Masiello presented independent insurance one of two keynotes, “Insurance agents in the U.S. SIAA has signed Distribution – The Future has Arrived.” 13% of all independent insurance The other, “Transforming our Industry agents nationally and generates Together,” was delivered by Tyler hundreds of millions in new premium Asher, President, Independent Agent business annually. SIAA is dedicated Distribution, Liberty Mutual Business to the creation, retention and growth Lines and Safeco Insurance. of the independent insurance agency distribution system. To learn more The full conference is available online about SIAA, visit siaa.net. at iaevolve.com, offering playback TABLE OF CONTENTS

OCTOBER 2019

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LLOYD’S OF LONDON

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

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