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APRIL 22, 2013 | Vol. 91, No. 8

WEST REGION

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Inside This Issue

24 On The Cover

50 Top Apps for Independent Agents

April 22, 2013 • Vol. 91, No. 8 • West Region

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WEst COVERAGE

Idea exchange

Reworked Workers’ Comp Formula Lowers Premiums

W1 New Mexico Governor Signs Space Travel Liability Bill

8 10 16 18 18

19 States Approve ISO’s Telematics-Based Auto Rating Tool Merger & Acquisition Activity Off to a Quiet Start W.R. Berkley Corp. Divests, Connecticut Bank Acquires InsurBanc Commercial Rates Continued Up in March, Even for Large Accounts: MarketScout What to Expect in Commercial Insurance Prices for Remainder of 2013: Willis

W1 Court: California City May Proceed With Bankruptcy

33 Growing Your Property Casualty Agency: Shulman 34 Minding Your Business: Oak & Schoeffler 38 Closing Quote: Guns & Insurance

20 22 24

Spotlight: The New Insurance Realities of the Live Event Industry Mayhem Rules Insurance Journal’s Mascot March Madness Special Report: 50 Apps for Independent Agents

28 Closer Look: 10-Point Checklist for D&O Renewals 29 10 Things to Know About Trucking 30 E&O Insights: Pearsall on Directors & Officers Liability 4 | INSURANCE JOURNAL-WEST REGION April 22, 2013

W1 Report: 1 in 5 California Citizens Lives in Flood Zone W1 IICF Aids Shelter and Homeless Center W8 Possible Resurgence in California’s Inland Empire Interests Agents

W4 Property Focus: Building Updates: Aging HVAC and Roofing

DEPARTMENTS 6 14 32 W2 W2 W12

Opening Note Business Moves MyNewMarkets Declarations Figures People

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Opening Note Armed and Growing

uns are big business. Just ask some insurance brokers. According to a report on InsuranceJournal.com, proposals to change state and federal gun laws is having an unintended effect on the gun insurance market — unprecedented growth. Experts in this segment say new policy submissions dealing with all aspects of guns, including gun shops, gun dealers and gun ranges are up exponentially compared to the last couple years. “Every single one of my gun shops has increased its revenue by 25 percent in the last year,” says Scott Wilson, president of Best Shot Insurance in Chesterfield, Mo., a division of Charles L. Crane Agency. “In addition to that, the number of new ranges opening has gone through the roof.” Fear is driving the growth, Wilson says. Some fear they will have their guns taken away under the proposed legislation, he says, so they are exercising what they believe is their Second Amendment right now while they still can. Gun shops are not the only area in the market showing growth. Gun ranges that offer classes on self-defense and carrying a concealed weapon Proposed gun control are seeing an uptick in enrollment as well, especially from legislation is driving women. growth in the Teaching self-defense classes and concealed handgun classes insurance market. opens the range up to professional liability exposures that often owners do not understand, the experts say. New legislation that targets concealed carry laws also will impact what is taught and range owners must be aware of the changes, Wilson says. Wilson says increased demand for guns and gun services like gun ranges or classes has led many businesses to expand into other areas they were not in before. Often, that means insufficient insurance coverage as insureds sometimes fail to notify their providers. “For gun ranges offering conceal carry classes there is a professional liability exposure,” he says. Gun shops getting into the manufacturing side without proper coverage is another area that Wilson believes is a growing exposure. Carriers writing gun related classes are watching the various gun legislation proposals from the sidelines, ready to update coverages if and when the laws change. Meanwhile, Wilson and other agents specializing in the market aren’t complaining. “When 2008 came around we were heavy into construction and lost half of our book overnight,” Wilson says. “This market segment has really helped our agency and this industry.” To read more on insurance and guns, visit InsuranceJournal.com.

Andrea Wells Editor-in-Chief

6 | INSURANCE JOURNAL April 22, 2013

EDITORIAL

Editor-in-Chief Andrea Wells | awells@insurancejournal.com V.P. Content Andrew Simpson | asimpson@insurancejournal.com East Editor Young Ha | yha@insurancejournal.com Southeast Editor Michael Adams | madams@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor Charles E. Boyle | cboyle@insurancejournal.com Senior Editor Susanne Sclafane | ssclafane@insurancejournal.com ClaimsJournal.com Editor Denise Johnson | djohnson@claimsjournal.com MyNewMarkets.com Associate Editor Amy O’Connor | aoconnor@mynewmarkets.com Columnists Curtis Pearsall, Alan Shulman Contributing Writers Seth B. Brickman, Scott Carroll, Lisa Doherty, Tom Harvey, Peter L. Miller, Meredith Reeves

SALES

V.P. Sales & Marketing Julie Tinney (800) 897-9965 x148 jtinney@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 dkaplan@insurancejournal.com South Central Mindy Trammell (800) 897-9965 x149 mtrammell@insurancejournal.com Midwest Lauren Knapp (800) 897-9965 x161 lknapp@insurancejournal.com Southeast Howard Simkin (800) 897-9965 x162 hsimkin@insurancejournal.com East Dave Molchan (800) 897-9965 x145 dmolchan@insurancejournal.com New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale (800) 897-9965 x125 Ly Nguyen | lnguyen@insurancejournal.com

MARKETING/NEW MEDIA

Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com (619) 584-1100 x120 New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Matt Tolk | mtolk@insurancejournal.com

DESIGN/WEB

Vice President/Design Guy Boccia | gboccia@insurancejournal.com Vice President/Technology Joshua Carlson | jcarlson@insurancejournal.com Design and Marketing Executive Derence Walk | dwalk@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com

IJ ACADEMY OF INSURANCE

Director of Education Christopher J. Boggs | cboggs@ijacademy.com Online Training Coordinator Barbara Whiffen | bwhiffen@ijacademy.com

A D M I N I S T R AT I O N

Chairman Mark Wells Chief Executive Officer Mitch Dunford Accounting Manager Megan Sinclair | msinclair@insurancejournal.com

FOR QUESTIONS REGARDING SUBSCRIPTIONS: Call: 855-814-9547 or you may subscribe or change your address online at: insurancejournal.com/subscribe Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semimonthly by Wells Publishing, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2013 Wells Publishing, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Publishing, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 3618, Northbrook, IL 60065-3618 ARTICLE REPRINTS: For reprints of articles in this issue, contact Rhonda Brown at 1-866-879-9144 ext. 194 or rhondab@fosterprinting.com. Visit insurancejournal.com/reprints for more information.

Who insures you doesn’t matter. Until it does.

Chubb Group of Insurance Companies (“Chubb”) is the marketing name used to refer to the insurance subsidiaries of The Chubb Corporation. For a list of these subsidiaries, please visit our website at www.chubb.com. Actual coverage is subject to the language of the policies as issued. Chubb, Box 1615, Warren, NJ 07061-1615. ©2012 Chubb & Son, a division of Federal Insurance Company.

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News & Markets Reworked Workers’ Compensation Formula Lowers Premiums

China Relations

U.S. insurance regulators will continue a program of information sharing and cooperation that helps counterparts in China learn about insurance regulatory practices in the U.S. “Insurance markets have become more global, and extended relationships with regulators abroad are critical to protecting our interests here in the U.S.,” said Thomas B. Leonardi, Connecticut Insurance Commissioner, on behalf of NAIC.

reworking of a key piece of the workers’ compensation rating formula isn’t changing rates overall but is changing premiums for most insureds, according to experts. Tony DiDonato, director and senior actuary at the National Council on Compensation Insurance, said the change, which took effect Jan. 1, 2013, results in a slight decrease for most insureds. But balancing out those many decreases will be some significant increases, often among the largest insureds, he said before the Casualty Actuarial Society’s (CAS) recent Ratemaking and Product Management Seminar. The change involves the experience mod, the credit or debit that insureds receive for their own claims experience. The mod compares an insured’s claim experience to that of comparable employers. If experience is good, the insured gets a credit — a discount. If

not, the insured receives a debit. What’s changing is the delineation between the primary and excess portions of a claim, known as the split point. For the past two decades, the split point has been $5,000. This value is important because the primary portion of each claim has a much larger impact on an employer’s mod than does the excess portion. Actuaries believe that the primary loss amount is more predictive than the excess amount. But inflation has both eroded the primary/excess split point and hurt its predictive power. These days, the mod doesn’t give enough credit to good experience and doesn’t penalize poor experience enough, according to actuaries at the CAS event. “The plan was not being as predictive as it used to be” in distinguishing

between good and bad risks, DiDonato said. The change raises the split point — to $10,000 in 2013, to $13,500 in 2014, and to an estimated $17,000 in 2015. These adjustments, incorporated into the entire rating formula, improve the experience mod’s predictive power, according to DiDonato. In 26 of the 38 states where the plan has been approved, NCCI actuaries sampled 75,007 risks, calculating the experience mod under each system. The NCCI’s sample showed that the vast majority — 62 percent — would see their rates fall less than 5 percent. Another 11 percent realized decreases between 5 percent and 10 percent. Rates were unchanged for 4.5 percent of risks. Less than one-in-four would see a rate increase. Overall, the average mod was 0.98 — a 2 percent discount — under the old system and 0.97 — a 3 percent discount — under the new system. DiDonato attributed the slight change to vagaries in the states where the new system had been approved.

19 States Approve ISO’s Telematics-Based Auto Rating Tool

SO has filed its first vehicle telematics-based rating rule with insurance regulators in 33 states and received approvals in 19 states. The GeoMetric rating rule for use by insurers writing personal and commercial automobiles uses information collected via telematics to award discounts for vehicles operated in areas safer than where they are garaged. ISO’s patentpending rule assesses the risk of an insured vehicle based on actual driving locations while respecting the privacy of the insured, according to ISO. The GeoMetric rating rule uses a set of predictive modeling tools called ISO Risk Analyzer, which considers hundreds of variables related to where

8 | INSURANCE JOURNAL April 22, 2013

people live, work and drive to measure the risks posed at each geographic location. ISO said the GeoMetric product builds on those insights by applying the geographic risk measurements to each vehicle’s driving locations. The result is a report showing the number of miles and time traveled by the insured within each risk tier, or band. Vehicles that are garaged in higher bands but frequently travel into lower bands may be eligible for discounts of up to 25 percent under the program. The GeoMetric rating rule is the first

telematics-based program that ISO has filed with insurance regulators in various states. ISO would not disclose the 19 states that have approved the product. www.insurancejournal.com

January 29 th , 9:35 a . m .

ExpErtIsE crEatEs an opportunIt y I n an I ns tant,

U n der w r iter Ph i l Sa m m S k eeP S a n agen t a h e a d o f w h at’ S ne x t

Phil shared thirty minutes with agent, Kate Morely, discussing her local industry insights and clients’ changing business risks. More importantly, he shared a few industry insights that helped Kate envision an entirely new avenue for growing her book. Way to make every minute count, Phil.

To learn more about our broad portfolio of insurance products and services, and the industries we serve, visit www.cna.com.

Construction • Education • Financial Institutions • Healthcare • Manufacturing Professional Services • Real Estate • Retail • Technology • Wholesale Distribution

Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. CNA is a registered trademark of CNA Financial Corporation. Copyright © 2013 CNA. All rights reserved.

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M&A Review

Merger & Acquisition Activity Off to a Quiet Start

Confie Seguros strengthened its presence in Seguros, newly backed by ABRY Partners in fter a record-setting year-end, 2013 the New York and Florida markets. a secondary buyout, each announced two started off with a whisper. As private equity-backed firms use new deals. AssuredPartners continued building First quarter merger and acquisition capital to spur growth ultimately focused a leading middle-market brokerage with activity slowed to 37 announced transaccontinued on page 12 acquisitions in Ohio and Kentucky, while tions between January and March, down from 67 the prior year. Buyers were busy digesting their December Announced acquisitions Date Buyer Seller spurred by 01/16/13 ABD Insurance and Financial Services Insurance Associates the imminent 02/04/13 AmWINS Group CIMI Professional capital gains 03/04/13 Arthur J. Gallagher & Co. Metzler Bros. Insurance By Meredith tax increase. 02/08/13 AssuredPartners Inc. CFC Insurance Reeves With all deals 02/14/13 AssuredPartners Inc. Douglas S. Gordon Insurance Services trying to close by Dec. 31, there 02/05/13 Confie Seguros Insurance Services Cannello Agency Inc. was little hangover in the new 02/05/13 Confie Seguros Insurance Services Moose Insurance LLC 03/18/13 CoVerica Inc. Pacific Agency, Inc. year, dropping January activity 01/23/13 Cross Insurance Skillings Shaw & Associates Inc. to 13 deals. 01/08/13 Digital Insurance Inc. Health Star Consulting February perked up with 18, 02/05/13 Digital Insurance Inc. Capital Benefits Group LLC but March took an extended 02/19/13 Digital Insurance Inc. Benefit Services and Design Inc. spring break with a mere six 02/21/13 Digital Insurance Inc. Group Brokerage Insurance Agency LLC deals. Most of the leading 02/28/13 Genstar Capital LLC Acrisure LLC acquirers slowed to catch their 03/14/13 Health Insurance Innovations Inc. Contract rights with TSG Agency LLC breath or disappeared altogeth01/28/13 Heffernan Insurance Brokers Benefits Solutions Group er. 01/31/13 Hilb Group LLC Pennoyer Group Inc. 02/06/13 Integro Ltd. iTrade Risk & Insurance Services Employee benefits-only 02/14/13 Ironshore Inc. Excess Risk Reinsurance Inc. Digital Insurance was the most 02/06/13 Johnson McCann Benefits LLC Apollo Insurance Agency / active acquirer this quarter, C.O. Brown Insurance Agency with four announced trans01/16/13 Leavitt Group Konecki Insurance Brokerage actions. That was a strong 02/06/13 Leavitt Group Shea Insurance start after completing eight 01/16/13 Lightyear Capital LLC Controlling investment in Cooper Gay deals in 2012, all in the latter Swett & Crawford Ltd. half of the year. Acquired by 01/02/13 MDW Insurance Group Inc. McCartney Insurance Agency Inc. 02/25/13 Oswald Companies Knezevich and Foerster LLC Fidelity National Financial 01/28/13 Pinnacle Brokers Insurance Solutions Inc. E. M. Schumann Risk last December, Digital appears & Insurance Services Inc. equipped to continue its 01/23/13 Scottish American Capital Buckingham Badler Associates growth and expand its market 03/21/13 Smith-Feike-Minton Inc. Landen Insurance Agency position in the employee ben02/20/13 Stone Point Capital LLC GWC Warranty Corp. efits arena. Digitalâ&#x20AC;&#x2122;s acquisitions 03/15/13 Sullivan Group Book of California business from this year established its first Network E&S Insurance Brokers offices in both the Tennessee 01/18/13 Tomlinson & Oâ&#x20AC;&#x2122;Neil Kiley Insurance Agency Insurance Agency Inc. and Boston area, and strength03/05/13 Total Dollar Management Effort Ltd. World Marine Underwriters Inc. ened its operations in North 02/01/13 TowneBank The Clement Companies Inc. Carolina and the Midwest. 02/02/13 Transportation Insurance Services LLC ICS Private equity deals com01/31/13 TriGen Insurance Solutions Inc. TriGen Insurance Solutions, Inc. prised nearly 40 percent of - Management group the total deal count in the 02/15/13 Ulster Savings Bank Breen Consulting Group Inc. first quarter. GTCR-backed Source: SNL Financial, Insurance Journal, other publicly available sources and MarshBerry proprietary databases. All deal count metrics are incluAssuredPartners and Confie sive of completed deals with U.S. targets only.

Merger & Acquisition Activity: January - March 2013

10 | INSURANCE JOURNAL April 22, 2013

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M&A Review Merger & Acquisition, continued from page 10

on generating returns, don’t expect to see the momentum diminish anytime soon. Rounding out the three-way tie with two deals was independently owned Leavitt Group, matching its 2012 total count just three months into the year.

The remainder of mergers and acquisitions activity was dispersed among many buyers, each with a single deal. Arthur J. Gallagher, typically among the most active, announced one deal, compared to seven during the same period in 2012.

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12 | INSURANCE JOURNAL April 22, 2013

Although perhaps that was an expected start as it finished December with an unprecedented 12 deals. Other public brokers were absent from the year-to-date tally. Employee Benefits The public broker absence was evident in the employee benefits space. The first quarter saw 10 benefits deals compared to 25 last year. With more than half of the 25 deals concentrated among public brokers, the lack of activity so far in 2013 looks to be a driving force behind the decline. As many employee benefit firms assess the feasibility of remaining independent in the wake of healthcare reform, buyer demand continues to decline in the uncertain small group market. However, innovative brokers focusing on integrated health management products and services remain attractive targets, and often realize premium pricing relative to property/casualty firms. Hub International, a typically active buyer, remained quiet on U.S.-based deals this quarter. While it did not complete any deals in the United States, the company expanded its presence across Canada with three acquisitions. Despite ongoing economic uncertainty, consolidation likely will continue. The industry remains highly fragmented, and the appetite for quality agencies is strong. Agencies are facing pressure to grow topline revenues and integrate sophisticated solutions, or alternatively risk becoming less relevant. While activity this year is unlikely to break any records, interest among buyers and sellers remains high, and activity is expected to pick up. Securities offered through MarshBerry Capital Inc., member FINRA and SIPC, and an affiliate of Marsh, Berry & Co. Inc., 4420 Sherwin Road, Willoughby, Ohio 44094. Except where otherwise indicated, the information provided is based on matters as they exist as of the date of preparation. Past performance is not necessarily indicative of future results. Reeves is a senior consultant for MarshBerry. Email: Meredith.Reeves@MarshBerry.com.

4/4/13 10:19 AM

www.insurancejournal.com

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Business Moves Virginia and Delaware that specializes in commercial and public transportation risks. It will now become part of Strickland Insurance Brokers (SIB). Strickland Insurance Brokers is an MGA and wholesale broker founded in 1969. Robbie Strickland, president of Strickland, said the deal fits with SIB’s growth strategy in the midAtlantic region.

Tower Group, Canopius Tower Group Inc. closed its merger with Canopius Holdings Bermuda Ltd. Tower becomes an indirect, wholly-owned subsidiary of Canopius Bermuda, which will change its name effective at the closing to Tower Group International Ltd. (Tower Ltd.). The merger creates a Bermuda-domiciled holding company structure that combines Tower’s businesses with certain of Canopius’s reinsurance business, and gives Tower access to U.S., Bermuda and Lloyd’s markets. Thoits, NFP Property NFP Property & Casualty Insurance Services, a wholly owned subsidiary of National Financial Partners Corp., acquired San Jose, Calif.-based Thoits Insurance Service Inc. Thoits Insurance will become the NFP property/casualty regional office in California. NFP, based in New York, reported it generated more than $1 billion in revenue in 2012. The company provides advisory and brokerage services to companies and highnet worth individuals. Strickland, Tower Transportation Strickland Insurance Brokers of Goldsboro, N.C., acquired the assets of Palmyra, Virginia-based Tower Transportation Underwriters Inc. Tower Underwriters, owned by Fred Black, is a managing general agency in 14 | INSURANCE JOURNAL April 22, 2013

Arthur J. Gallagher, Advanced Benefit Advisors Itasca, Ill.-based global insurance broker Arthur J. Gallagher & Co. acquired Advanced Benefit Advisors Inc. of Cherry Hill, N.J. Terms of the transaction were not disclosed. Advanced Benefit Advisors offers employee benefit brokerage and consulting services for the automotive, financial services and healthcare industries. Advanced Benefit Advisors President and CEO Robert Petcove and his associates will continue to operate in their current location under the direction of David Ziegler, Eastern region executive vice president of Gallagher’s employee benefit consulting and brokerage operations. Arthur J. Gallagher has already acquired several agencies in 2013, including: Metzler Bros. Insurance of Kansas City, Mo.; Insurance Risk Managers of Missouri Inc. in St. Louis; Gardner & White Corp. in Indianapolis; Hardman & Howell Benefits in Wichita, Kan.; and Argus Benefits in Atlanta. Turner Barker, Clark Insurance Turner Barker Insurance, a Portland, Maine-based agency that was a wholly owned subsidiary of Gorham Savings Bank for the past dozen years, will soon merge with Clark Insurance, an agency also based in Portland. Turner Barker was founded in 1908 and purchased by Gorham Savings Bank in 2001. Clark Insurance was established in 1931. Both firms are headquartered in Portland. Clark Insurance has additional offices in Saco and Windham, Maine, as well as in Manchester, N.H. Both Turner Barker and

Clark Insurance offer services for personal, business, employee benefits, life and health insurance. Turner Barker will retain its name but will operate as “A Clark Insurance Agency” with Douglas Allen continuing to serve as Turner Barker’s president, Bradford Kirkpatrick as executive vice president and Kalevi Kotkas as vice president. Clark Insurance will remain an employee-owned firm, with Maine-based Gorham Savings Bank becoming a minority owner. Gorham Savings Bank’s President Christopher Emmons will join the board of directors of Clark Insurance. The deal is expected to close within 30 to 45 days. The combined agency will employ more than 100 insurance agents and customer service representatives in offices throughout southern Maine, as well as in Manchester, N.H. H.W. Kaufman, Global Excess Partners The H.W. Kaufman Financial Group acquired Global Excess Partners, a New York City-based specialty insurance organization that offers underwriting programs on behalf of Lloyd’s and other carriers, and is focused on large- and middle-market property accounts. Global Excess Partners will retain its entire leadership team, staff and office in New York, according to the parties, and will operate as an independent entity within the global Kaufman Financial Group network. Diarmuid Hogan is president and CEO of Global Excess Partners, which was founded in 1997. Alan Jay Kaufman, chairman, president and CEO of Kaufman Financial Group, said the deal gives his firm a “significant” New York City presence and greater large property capacity, while making it more globally competitive. The deal also furthers its relationship with Lloyd’s, the company said in a statement. The Farmington Hills, Michigan-based H.W. Kaufman Financial Group includes Burns & Wilcox, Chesterfield Insurance Brokers (London), Coleman and Kaufman, R.B. Jones and Minuteman Claims Administrators. www.insurancejournal.com

速

NATIONAL COVERAGE

News & Markets W.R. Berkley Corp. Divests, Connecticut Bank Acquires InsurBanc By Young Ha

nsurBanc, a federal savings bank founded by the Independent Insurance Agents & Brokers of America and W.R. Berkley Corp. a dozen years ago, has joined Connecticut Community Bank N.A., based in Westport, Conn. In the merger deal, the Farmington, Conn.-based InsurBanc becomes a division of Connecticut Community Bank, with InsurBanc CEO David Tralka becoming CEO of Connecticut Community Bank. Connecticut Community Bank assumed the deposits of InsurBanc and acquired substantially all of InsurBanc’s assets including loans, investments and cash. In its April 8 filing with the Securities and Exchange Commission, W.R. Berkley Corp. offered details on its involvement in InsurBanc and why it decided to divest. The filing shows that prior to the transaction, InsurBanc had been 83 percent indirectly owned by W.R. Berkley Corp. Meanwhile, Connecticut Community Bank is indirectly controlled by W.R. Berkley’s CEO William R. Berkley. He serves as chairman for Associated Community Bancorp Inc., which is Connecticut Community Bank’s sole shareholder, and also chairman for Connecticut Community Bank. He also owns 75.5 percent of Associated Community Bancorp. W.R. Berkley Deregisters as S&L In its filing, W.R. Berkley Corp. said it formed InsurBanc in 2001 to serve the banking needs of independent agents. As a result of InsurBanc’s formation, W.R. Berkley became “a grandfathered thrift holding company” subject to only limited oversight by the Office of Thrift

16 | INSURANCE JOURNAL April 22, 2013

size has been approximately $180 milSupervision. lion. Following the merger, the com However, with the pasbined entity of Connecticut Community sage of the Dodd-Frank Wall Bank and InsurBanc has more than $515 Street Reform and Consumer million in assets. Currently, InsurBanc Protection Act in 2010, the offers banking services to more than 200 Federal Reserve Bank assumed independent agencies and brokerages regulatory authority, and W.R. across the country. Berkley became a “savings and Tralka said there were other strategic loan holding company” subject to and regulatory reasons for the deal. enhanced regulation. There are limitations on small As a savings and loan holding combanks, Tralka said. Combining with a pany, W.R. Berkley said, it would have larger institution gives InsurBanc more become subject to certain prior notificaresources to assist its core customer base tion requirements and restrictions on of independent agencies. There have also dividends, stock repurchases, distribubeen “a lot of changes in the regulatory tions, transactions with affiliates and environment, which makes it difficult compensation plans and additional for small banks to grow,” he said. requirements. “The vision of InsurBanc won’t be W.R. Berkley said in its SEC filing changing,” Tralka said. “The bank will that to avoid adverse consequences of now have access to more resources to enhanced restrictions, the board decidbring to our customer base and make ed to divest its banking operations so larger loans for the agents.” that it could deregister as a savings and InsurBanc employs approximately 20 loan holding company. staff at its Farmington office. They will W.R. Berkley’s aggregate investment continue to work from the same locain InsurBanc prior to the closing of tion as members of the InsurBanc divithe deal was $22 million. W.R. Berkley sion of Connecticut Community Bank. said that pursuant to the transaction, The transaction should be seamless for the company became the sole owner InsurBanc customers. of $15.5 million in IIABA also said cash and securities The Connecticut InsurBanc’s mission that it expects to bank that owns will remain the same. realize upon the liqThe bank will provide uidation of Peyton InsurBanc now is tailored financial prodStreet, the direct indirectly controlled ucts and services that owner of InsurBanc. independent insurance W.R. Berkley is in by W.R. Berkley. agencies and brokers the final process of need nationwide to optimize growth deregistering as a savings and loan holdopportunities, build value and remain ing company; once this process is comindependent. pleted, it will no longer be subject to Bob Rusbuldt, IIABA president and oversight by the Federal Reserve Bank. CEO, said InsurBanc’s new structure Connecticut Community Bank CEO will strengthen its ability to serve the Tralka said W.R. Berkley Corp. will independent agency system by providcontinue to be a small stakeholder in ing an attractive source of additional the combined enterprise. IIABA will capital to lend to agencies across the continue to be a minority stakeholder country, along with offering additional in InsurBanc after the transaction. agent resources. CEO Tralka said InsurBanc’s asset www.insurancejournal.com

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News & Markets

Commercial Rates Continued Up in March, Even for Large Accounts: MarketScout

ommercial insurance rates were up about 5 percent in March, according to the latest barometer from MarketScout and the National Alliance for Insurance Education and Research. Manufacturing continues to post the largest rate increases compared to prior-year results, followed by contracting, service, habitational and transportation. Workers’ compensation, professional and small commercial all received more aggressive month-over-month price increases, the survey found. MarketScout CEO Richard Kerr said the results show that large premium or brand name accounts are no longer being favored with pricing breaks. “Historically, underwriters have been very aggressive in pricing name-brand or large accounts. Other than the cache or bragging rights, there are few sound underwriting

reasons for aggressively pricing large accounts,” Kerr said. “Risk is risk, and exposure is exposure. In March, underwriters more frequently assessed an appropriate premium for large accounts.” Kerr said the data from March showed a significant reversal in pricing strategy for both large ($250,001 to $1 million premium) and jumbo (more than $1 million premium) accounts. In February, rate increases for large accounts measured plus 3 percent, and for jumbo account plus 2 percent. These increases adjusted to plus 5 percent for both in March. “There is also a considerable amount of

chatter amongst underwriters regarding pricing in this area, so we will be monitoring the situation very carefully,” Kerr said. The National Alliance for Insurance Education and Research conducted the pricing surveys used in MarketScout’s analysis of market conditions.

Rates Should Rise Moderately for Most Commercial Lines

ommercial insurance buyers in all product lines should see rates rise moderately through the remainder of 2013, although commercial property rates for non-catastrophe exposed risks and some specialty lines may see slight reductions, according to global broker Willis in its “2013 Marketplace Realities” report. In an update to the annual report, Willis Group Holdings said in commercial casualty lines, the top end of expected increases edged up from 7.5 percent to 10 percent since last fall. For commercial property insurance, price expectations for catastrophe (CAT)-exposed programs shifted from flat renewals to slight increases. For non-CAT risk programs, the expected price movement changed from decreases 18 | INSURANCE JOURNAL April 22, 2013

ranging from -5 percent to -10 percent to rates remaining flat or falling by up to -5 percent. The report noted, however, that property programs affected by Superstorm Sandy can expect a complicated renewal process including restructuring of the flood language in their policies. The specialty lines present a combination of price increases and decreases across product lines. Willis expects rate declines in the aviation, healthcare professional, political risks and surety coverage lines. Meanwhile, Willis believes rate increases can be expected in the fidelity/crime, kidnap/ransom, terrorism and trade credit lines. Willis experts anticipate a mix of price increases and decreases in the energy, environmental and marine sectors.

In the employee benefits space, Willis said employers remain focused on the healthcare reform law that will go into effect in the next few years, particularly the pay or play excise tax. Rate increase estimates for 2013 remain at 8 percent to 10 percent, as insurers pass down the cost of compliance. Regarding claims trends, Eric Joost, chief executive of Willis North America Specialties and senior editor of the “Marketplace Realities” report, said they are “generally more complex and volatile” than the fairly predictable insurance marketplace. In the workers’ compensation as well as the directors and officers liability claims area, Willis experts see rising costs but declining frequency. Meanwhile, in property claims, the company’s experts predict a growing use of lawyers and consultants in claim resolution, as well as an increase in advance payments on claims. www.insurancejournal.com

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News & Markets New Mexico Governor Signs Space Travel Liability Bill

Court: California City May Proceed With Bankruptcy

ew Mexico Gov. Susana Martinez has signed into law liability-waiving legislation aimed at saving the state’s nearly quarter-billion-dollar investment in a spaceport and retaining anchor tenant British billionaire Richard Branson’s Virgin Galactic. The law exempts spacecraft parts suppliers from liability lawsuits by passengers. Lawmakers previously exempted spacecraft operators from liability, but some space companies passed up New Mexico in favor of states that had extended those protections to suppliers.

Report: 1 in 5 California Citizens Lives in Flood Zone

alifornia is suffering from one of its driest winters on record, but some statewide water managers are focusing on the opposite end of the precipitation spectrum — the one-in-five residents who live in regions prone to catastrophic flooding. A joint state-federal report designed to

sound a flood-preparedness warning says that more than $575 billion in development and $7 billion in farm output sits on or around floodplains. The report was released on the state Department of Water Resources website on April 2. It warns that the price-tag for capital improvements to protect the state’s infrastructure from potential devastation could top $100 billion, 10 times more than exists in funding from bond measures to shore up aging levies and dams. The report attempts to identify areas at risk, so water managers can prioritize projects. © 2013 AP

U.S. federal judge in April approved the city of Stockton’s petition for bankruptcy in a case that sets the stage for a lengthy battle between bondholders and the California pension system. In a case being studied by other cash-strapped American cities including Detroit, U.S. Bankruptcy Court Judge Christopher Klein’s decision was a setback for bondholders and insurers who had resisted the California city’s bankruptcy filing. Stockton is the largest U.S. city ever to file for bankruptcy. The judge also signaled that the California Public Employees Retirement System’s position in the case was not above review. Stockton, a city of 300,000, has so far not reduced pension payments to retired city workers, although it has eliminated retiree healthcare benefits. “This does not mean there is not potentially a serious issue involving Calpers,” Judge Klein said. “But at this point I do not know what that is.” The decision on Stockton marks the start of a lengthy restructuring of the obligations overwhelming its finances, which were crippled by the housing crisis and recession. © 2013 Reuters

IICF Aids Shelter and Homeless Center

ryan A. Anderson (right), senior vice president and regional manager of Zenith Insurance Co., and Wells Media Group Inc. CEO Mitch Dunford (left) presented a $5,000 check to Rosemary Johnston, executive director of the Interfaith Shelter Network in San Diego, Calif. The program is a collaborative effort by congregations, human services and government agencies to provide shelter and resources to the homeless. www.insurancejournal.com

The money was raised by the Insurance Industry Charitable Foundation. IICF is funded and directed by insurance industry professionals, including reinsurers, agents and brokers, property/casualty companies, health/ life companies, advertising and public relations firms, law firms, accountants, IT and other companies that work with the insurance industry.

Mitch Dunford and Bryan A. Anderson present IICF donation to shelter director Rosemary Johnston. April 22, 2013 INSURANCE JOURNAL-WEST REGION | 1

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Declarations Bad Shrooms

Washington DUIs

Arizona DUIs

“Mushrooms were growing from behind my dishwasher. My builder no longer existed.” — Tracy Rhodes was one of several homeowners who’ve had to deal with major defects who testified before the a Nevada Senate Judiciary Committee on construction defect laws intended to protect consumers, which some argue have morphed into a trial lawyer’s dream and a nightmare for Nevada’s building trades.

“At some point these people need to be removed from society because they kill us.” — Frank Blair, whose 24-year-old daughter Sheena was killed by a drunken driver in 2010, spoke to a working group held by Washington Rep. Roger Goodman to discuss a variety of ideas to stop more impaired drivers.

“We have a laboratory where the blood results are being used to decide whether people go to jail or prison. For the last going on four years now, at least once a month, every month, there’s some huge error where there’s an unexpected result,” — Joseph St. Louis, a Tucson attorney involved in felony DUI cases in an ongoing evidentiary hearing in Superior Court challenging the accuracy of blood-testing equipment used by Scottsdale, Ariz., police.

His Heart’s in It

Figures

“I think our greatest challenge is going to be keeping him out of the office before he’s cleared to come back. He already asked his wife this morning to bring his laptop.” — Sandi Peck, Washington’s deputy insurance commissioner for public affairs, said Washington Insurance Commissioner Mike Kreidler, the nation’s longest serving insurance commissioner, was well on the road to recovering after successful heart surgery in April.

$500 Million Is how much a Nevada jury has ordered the state’s largest health management organization to pay in punitive damages to three plaintiffs in a civil negligence lawsuit stemming from a Las Vegas hepatitis outbreak.

Would be the last call for alcohol under California state Sen. Mark Leno’s proposal, which he says is a way to draw more tourists — and with them more revenue and jobs. The proposal to push the cutoff back from 2 a.m. is spawning a sharp debate from Sacramento to watering holes in San Francisco and Los Angeles.

2 | INSURANCE JOURNAL-WEST REGION April 22, 2013

$26 Million

Is what a jury awarded to the families of three people killed when a small plane crashed near Arlington, Wash., in 2008. An attorney for the families argued the carburetor in the single-engine Cessna was defective, and even though manufacturer Avco Corp. had fixed the problem on new engines two years earlier, it didn’t fix the problem on thousands of planes already flying.

$4 Million That’s what a state judge says lawyers for victims of asbestos exposure in a contaminated Montana town are entitled to in fees and expenses out of a $19.6 million settlement with chemical manufacturer W.R. Grace and Co.

www.insurancejournal.com

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Property Focus Building Updates: Aging HVAC and Roofing Systems The Agent’s Role as Advisor and Risk Manager Editor’s note: This is the last of a three-part series to explain insurers’ requirements for building updates and to help agents advise clients on mitigating risks inherent in older buildings. The first article addressed aging electrical systems and appeared in the Feb. 25 edition of Insurance Journal. The second article, which offered advice for aging plumbing systems, appeared in the March 25 edition. This final installment covers heating, ventilation, air conditioning (HVAC) and roofing systems. By S. Carl Morello

he older a building, the more likely it is to have serious defects, particularly in critical building systems such as electrical, plumbing, HVAC and roofing. Older buildings generate more claims than younger properties, especially if they have not been well-maintained or if their building systems have not been updated. This is why an insurer will ask a policyholder about the age of the original building, the age of renovations or additions and the age and condition of critical building systems. The information helps the insurer price the coverage fairly, and brings to light any serious defects to be corrected. In the case of serious roofing defects, such as failure-prone fiber-cement tiles, or when a major update is needed, like an aging rooftop air-conditioning unit, the insurer may request the upgrades as a condition of coverage. Heating, Ventilation and AirConditioning (HVAC) Systems Heating, ventilation and air conditioning (HVAC) systems typically require updating only on as “as-needed” basis, such as when components fail due to age or inadequate maintenance, or when the discovery of material weaknesses or failures during inspections warrants repairs and replacements. A building’s heating system — furnace,

4 | INSURANCE JOURNAL-WEST REGION April 22, 2013

boiler or heat pump — can last for many years, with proper maintenance. Heating equipment generates relatively few claims. The primary loss driver in the HVAC equation is the air conditioning system, particularly roof-top units, which are especially vulnerable to damage Figure 1. Hail-Damaged AC Unit and neglect. Roof-top AC units, Photo courtesy of CR Roberts Consulting Engineers. which are used to cool nearly half of all commercial floor space in the United States, need special While hail guards can offer effective care and maintenance to guard against protection against hail and large airborne damage caused by dust, debris and, in cerdebris, some guards, especially those with tain areas of the country, damage caused by small-gauge openings, may create new hail. (See Figure 1) problems by restricting airflow, trapping An air conditioner is designed so that air and retaining organic matter such as seeds, can flow freely and smoothly over the fins especially cottonwood, dust, insects, leaves, and through the condenser coil. When the thus blocking the required air flow to the fins are distorted or damaged, air cannot condenser coils. To address this concern, flow easily to the coil. In cases of severe air intake filters are available that combine damage, the airflow to the coil may be effective hail protection with air filtering blocked altogether. A few bent fins will technology. These products use materials not typically affect the AC unit, but when specifically engineered to promote air flow, extensive fin damage reduces or blocks the thus making them highly suitable for use on air flow, the unit cannot operate efficiently. high-velocity and high-volume systems. (See Over time, the damaged unit will function Figure 2) less efficiently, and may fail completely. If the property is more than 30-years-old, Because the damaged unit must run for lonexpect the insurance underwriter to ask ger periods and at hotter temperatures to specific questions about the HVAC system, produce cool air to meet demand, the cost such as: of operating and maintaining the damaged • What type of heating system is used in AC will rise over time. each part of the building? Wall heaters, floor Outdoor air conditioning units can heaters? Or forced hot air, steam or other? be protected from hail damage with the • What type of fuel is used in the heatinstallation of hail guards, also called hail ing system? Natural gas, propane, electric, shields, which are designed to protect oil? the condenser coil from contact damage. • When was the heating system or furThe guards also protect against falling nace installed? What is its condition? Has it branches, storm-blown debris, and any been installed and vented, if appropriate, casual contact damage, such as may occur according to the manufacturer’s specificaduring maintenance activities. Hail guards tions? can also protect ground units from damage • Has the heating system been updated by weed-whackers, lawnmower discharge, balls, etc. continued on page 6 www.insurancejournal.com

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• How is maintenance of the roofing there to worry about? system handled? Roofing systems are often more complex The roofing system should be inspected than they appear, and annually once it shows signs of age or can conceal a variety damage. of problems. Because The presence of multiple layers of roofroofing systems may ing materials indicates that the roof has be made from a varibeen repaired or replaced, in whole or in ety of materials, and part, and may be an indication of probbecause they are conlems with the building structure. If the tinuously exposed to building has more than one type of roof the elements, assessing system, or uses a variety of materials, or their condition and Figure 2. Air Intake Filter with Hail Guard has the same materials installed on differlongevity requires care. Photo courtesy of Air Solution Company. ent exposures., north vs. south, each must Manufacturer’s warranbe evaluated separately. ties detail the life expecin any part of the building? When was this Roof damage may be caused by a numtancy of the roof under normal conditions. done? Describe what updates were made ber of factors, alone or in combination: Typically, a roof is expected to last about 15 and note whether the updates were full or • Aging: All roof components and to 30 years, depending on the type. Some partial. materials are subject to natural aging and roofing products have 30- to 40-year warran • Have there been any problems or failwear and tear. ties. ures of the heating system? If so, describe Damaged or poorly-maintained • Weather: If the property is more the problem and how it was addressed. air-conditioning units typically Extreme heat and than 20--years-old, expect • How is maintenance of the heating have a shorter equipment life – cold, snow, wind, the insurance underwriter system handled? and higher costs – due to excess hail, and ice can to ask specific questions • When was the boiler installed? What wear and tear caused by overdamage roofing about the roofing system, is its condition? Has it been installed and work and overheating. materials, weaken such as: vented, if appropriate, according to the structural members • What type of roofing manufacturer’s specifications? and accelerate aging. system is used in each part of the building? • What type of fuel is used in the boiler? • Sunlight: Heat and ultraviolet radiaTile, slate, wood shake, metal panel, builtNatural gas, propane, electric, oil? tion contribute to degradation of memup, asphalt? Does the roof include failure • How is maintenance of the boiler sysbranes, shingles, sealants and other roofprone fiber-cement shakes or shingles? tem handled? ing materials. South- and west-facing roofs • When was the roofing system • What type of air conditioning is used almost always deteriorate more quickly installed? What is its condition? in each part of the building? Central air, than those with northern and eastern • Has the roof been updated in any window units? exposures. part of the building? When was this done? • Has the air conditioning system been • Moisture: Water from rain, snow, Describe what updates were made and updated in any part of the building? When hail, fog, wind-driven moisture, or roof-top whether they were full or partial updates. was this done? Describe what updates were vents and machinery can cause deterio • Have there been any problems or failmade, and whether they were full or parration, mold, mildew, algae, moss and ures of the roofing system? If so, describe tial. the problem and how it was addressed. continued on page 10 • Have there been any problems or failures of the air conditioning system? If 30-Plus-Year-Old Homes (Table 1) so, describe the problem and how it was addressed. • How is maintenance of the air condiWind / Hail Roofs < 10 Years Roofs > 15 years Home Average tioning system handled? Loss Ratio 30% 92% 49% Roofing Systems Loss Frequency 2.12% 6.31% 3.64% Roofing should be the easiest of all the critical building systems to manage, correct? It has a multi-year warranty. What’s Source: BuildFax

6 | INSURANCE JOURNAL-WEST REGION April 22, 2013

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News & Markets Possible Resurgence in California’s Inland Empire Interests Agents By Don Jergler

nown as “the 909,” or “the IE” by Southern Californians, terms sometimes intended as a slight, the sprawling desert area east of Los Angeles was a boomtown for commercial and residential development before the recession hit. But when the economy sank, foreclosure rates skyrocketed and commercial development nearly ground to a halt, and the IE or Inland Empire became one of the worse suffering areas in the region for a number of years. Several projects still sit partially developed, and many existing buildings remain vacant. At one point in 2012, the Inland Empire metropolitan area — Riverside, San Bernardino, Ontario — made the list of top five cities with the most homes in foreclosure in the nation. It was just a year ago that there were one-in-213 homes in the area in some stage of foreclosure, according to RealtyTrac. Now, some economists and insurance agents feel the area’s economy is getting back on track. Edgewood Partners Insurance Center announced in early April it’s planting a flag in the area. Following the acquisition of Ontario’s Homeplace Insurance Brokers Inc. in January, EPIC formally launched its Inland Empire division under Managing Principal Dan Ryan. It makes EPIC’s ninth office in California. Among the drivers of EPIC’s push into the Inland Empire is solid construction numbers. “What we are seeing is it’s starting to pick up, both in construction, which we do quite a bit of, and it’s starting to improve in the wholesale distribution and light manufacturing areas,” Ryan said. A purchasing managers index survey in April by the Institute of Applied Research housed at Cal State University San Bernardino backs that optimism. The PMI was 59.7 for March, up from February’s 53.7, according to the report.

8 | INSURANCE JOURNAL-WEST REGION April 22, 2013

March’s Production Index of 63.9 registered a sharp increase from the previous month’s 55 index number, while the New Orders Index rose to 63.9 from 56.7. The Employment Index remained above 50 for the second month, increasing from to 59.7 from 53.3 the prior month, the report shows. An economic forecast in February from the Los Angeles Economic Development Corp. shows the Inland Empire and Orange County leading Southern California in labor market gains. The Inland Empire is set to see more rapid job growth in the next year on top of the roughly 20,000 jobs added to the area’s economy over the last two years, according to the report, which forecasts construction job growth of another 6 percent in the area through 2013. Despite the good news there are those who believe the upticks in business activity are far from what can be considered a broad-based recovery. Anyone watching events unfold in one of the Inland Empire’s largest cities, San Bernardino, can argue things aren’t great everywhere in region. San Bernardino grabbed headlines lately because it filed for bankruptcy and declared a fiscal emergency. The city’s residents face the loss of municipal services. Dennis Ferguson, vice president, Kessler Alair Insurance Services, which has offices in Upland and Rancho Cucamonga, offered some constrained optimism on business recovery in the Inland Empire. “There is a lot of talk of the positive indicators out this direction, and we do have some clients who have probably had some growth year-over-year,” he said.

However, his assessment of any Inland Empire recovery is that “it’s far from broadbased,” and many of the companies his firm deals with continue to struggle, he said. “It’s still very, very challenging,” he added. An area south of the Ontario Airport was eyed for years for development. With the recession developers cooled on such prospects. “There’s a lot of empty parking lots out there again,” said Ferguson, who was with a client on a recent sight-seeing trip near the airport. Before it began to rapidly develop in the 1990s and early 2000s, the Inland Empire had its share of detractors, many of those were people who scoffed at the area’s remoteness, its desert-like landscape and the lack of amenities and things to do. It’s been a regional joke to poke fun at someone whose contact information contains the area code for the region by referring to their place of residence as “the 909,” or by its abbreviation, “the IE.” However, the region has its strong points. Those seeking an affordable home would have trouble finding a better deal. The statewide median home price for February was $333,880, according to the California Association of Realtors. The median home price in the Inland Empire was $212,300, and home prices are up 23 percent in the area from a year ago, according to CAR. www.insurancejournal.com

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related problems. • Ponding: Melting snow or accumulated rainfall can form ponds on flat roofs, causing damage and leakage. In extreme cases, the accumulated weight of ponded water can collapse the roof. • Ice Dams: Melting and freezing snow can form ice dams, which can damage the roof and allow water to enter the building. • Debris: Accumulated debris — storm debris, vegetation, construction materials — can clog drains and damage roof coverings. • Physical Damage: Displacement, disturbance or erosion of aggregate ballast, such as caused by winds, storms or human traffic, or direct damage to roof coverings, such as caused by hail, ice, wind, nearby trees or human activity, including vandalism or construction projects, can create penetrations or weak areas into which moisture and dirt can penetrate. • Nearby Trees: Trees provide shade and aesthetic value, but can also cause problems if their shade traps moisture, or if leaves fall on to the roof, or if limbs scrape the roof or fall there during severe weather. (See Figure 3)

Figure 3. Roof with Organic Growth and in Disrepair This three-part series has focused on the age of the building as the key driver for maintenance of the structure’s critical building systems. However, when addressing roofing, the main concern is the age of the roof and not the building. According to BuildFax, an independent company that collects and organizes construction record data, an analysis of roof age information shows compellingly that older buildings with new roofs have more than three times lower loss ratios and loss

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3/7/13 7:52 PM

frequency than older buildings with older roofs. (See Table 1) Various types of roofing systems are subject to different sorts of damage as they age: Low-slope roofing systems show their age in damage to roof membranes, such as tears, splits, seam separations, punctures, loose edges, ridges, eroded areas, blistering, and to the ballast which protects it, which can be eroded or displaced by high winds or foot traffic. Metal panel roofing systems generally age well, though there can be problems with accumulations of moisture under the panels if insulation and ventilation are not appropriate and sufficient. The protective finish must be re-done about every 40 years, or more often in areas where the finish might be worn, as by overhanging trees. Asphalt (composition) shingles are subject to cracking and rotting. Exterior decay is often a sign of poor attic ventilation. Where moisture is present, growth of mildew, moss, fungus or algae will hasten aging and deterioration. An accumulation of granules in gutters or on the ground is a sign that the shingles are worn and need replacing. Wood shakes and shingles can absorb and hold moisture, particularly at their lower edges, where the ends of wood fibers are exposed. Damp shingles and shakes support the growth of moss and www.insurancejournal.com

nance policy. For example, if a building or lichen, which breaks down the wood its contents are damaged by water leaking and hastens decay. A variety of finishes through a roof that has long out-lived it and preservatives may be applied to usefulness, the damage may not be covered wooden shakes and shingles to reduce by insurance. weathering, retard decay or to achieve Whether for air-conditioning units or desired colors. However, some finishes roofing systems, preventive maintenance, may increase the combustibility of the and planned replacement will always be wood components and significantly increase the risk of Extreme heat and cold, snow, more cost-effective than waiting for a fire. Check state and wind, hail and ice can failure and the inevilocal building codes damage roofing materials, table damage that for restrictions on the use of wood shakes and weaken structural members, results. While property shingles, especially in and accelerate aging. upgrades often are wildfire areas such as driven by building codes and insurance California. requirements, proactive retrofitting can Slate and clay tiles, though durable, reduce insurance costs during the propcan be broken by hail, windborne ertyâ&#x20AC;&#x2122;s lifetime. Upgrades to critical builddebris, etc. ing systems should be viewed as long-term Fiber-cement roofing products were investments to protect and increase the sold in the 1980s and 1990s with 25- to value of the building, rather than a short50-year warranties promising resistance to fire, insects, fungus, moisture and weathering. Most of these products have been withdrawn from the market because of partial or complete failure due to problems such as swelling, cracking, warping, delamination, crumbling, embrittlement, and breakage. Once damaged, fiber-cement shakes or shingles can no longer protect the building and its contents from rain, snow, sun and other environmental conditions. As the shingles absorb water, the moistureladen roof often becomes too heavy for the structure, causing sagging and other damage. Remediation may require replacement of the entire roof. Depending on the size of the building, replacing a roof can cost tens or hundreds of thousands of dollars, an expenditure that must be planned well in advance. Homeowner associations, for example, normally conduct periodic reserve studies to plan for the funding of improvements and repairs. An underfunded reserve may cause the HOA to try to squeeze a few more years out of a roofing system that is in need of replacement, relying on insurance to cover the costs of damages and repairs. However, an insurance policy is not a maintewww.insurancejournal.com

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term means of reducing insurance costs in time for an upcoming renewal. Periodic inspections and maintenance for critical building systems is an extremely effective risk management technique and should be part of every property management program. By helping the policyholder to understand the â&#x20AC;&#x153;Age of Buildingâ&#x20AC;? questions, and by assisting with gathering and communicating accurate information to the underwriter, the agent fosters a mutually beneficial relationship between the insurer and the policyholder. By serving as an informed advisor and advocate, the agent can help the policyholder to reduce risk, increase safety, and save money over the long term. S. Carl Morello, PE, ARM, ALCM, AFIS, is vice president for loss control at Sequoia Insurance Co. in Monterey, Calif. Phone: (831) 657-4507. Email: carlm@sequoiains.com

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April 22, 2013 INSURANCE JOURNAL-WEST REGION | 11

weST COVERAGE

People Jessica Word

Kelly Kyle

Jessica Word has been named president of Word & Brown General Agency. The appointment is effective immediately. Word has been serving as the company’s executive vice president of operations since 2007. Word has been with The Word & Brown Cos. since 2000. For the past six years she has managed small and mid-sized group underwriting, broker services, customer care, program management and plan maintenance, while also providing oversight on all information technology initiatives. Word & Brown General Agency is part of The Word & Brown Cos. Edgewood Partners Insurance Center named Kelly Kyle as a senior account manager in its Los Angeles, Calif., office. Kyle’s responsibilities with EPIC will include benefits planning and program design support. Kyle has 12 years of experience in the healthcare and wellness insurance sector. Kyle’s experience includes three years with VCA Antech Inc. as a benefits manager, and nine years with ABD Insurance and Financial Services and Wells Fargo Insurance Services as an account manager. EPIC has

20th Anniversary

California offices in Los Angeles, Irvine, Ontario, Fresno, Folsom, San Francisco, San Mateo, Petaluma and San Ramon. Heffernan Insurance Brokers named Jennifer Mahoney chief operating officer. Mahoney will oversee corporate governance, contracts, property and facilities management, mergers and acquisitions, corporate communications, philanthropy and wellness and internet strategy. Mahoney has been with Heffernan for seven years, most recently as vice president, office of the CEO. Scottsdale, Ariz.-based Nautilus Insurance Group named Wendy L. Markham senior vice president and chief underwriting officer. Markham joined Nautilus in 1986. Most recently Markham served as vice president-underwriting general liability and Pacific region. She has more than 25 years of industry experience, specializing in underwriting and product development. Nautilus Insurance Group is an excess and specialty lines carrier, and is comprised of Nautilus Insurance Co. and Great Divide Insurance Co., member companies of W. R. Berkley Corp.

INSURANCE INDUSTRY CHARITABLE FOUNDATION

Annual Benefit Dinner

Celebrating twenty years of grants, volunteer service and leadership Join us as we celebrate the philanthropic commitment of our industry and commemorate twenty years of grants, volunteer service, and leadership.

For additional information, please contact the Foundation at: 925.280.8009 | www.iicf.org | FEIN: 20-1240972

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4/5/13 10:39 AM

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We are

insured. My company is insured by ACE.

Insurance for businesses, families and individuals | acegroup.com/us >

What does it mean to be ACE insured? It means my company is protected by an AA- rated insurer, one of the largest and strongest in the world. ACE people truly understand our risks and go out of their way to help. We can focus on growing our business because we know that ACE is there when we need them.

SPOTLIGHT

Entertainment & Special Events The New Insurance Realities of the Live Event Industry

he increasing frequency of live event structural failures and tragic incidents mandates that insurance agents now, more than ever, be knowledgeable about changes in insurance regulations and venue contractual requirements with vendors. We are beginning to see these changes affect the most sublime public events, including the typical neighborhood street festival that has been taking place in towns for years. The high-profile By Scott Carroll stage collapses at the Indiana State Fair (August 2011) and the Radiohead concert in Ontario (June 2012); the scaffolding and rigging collapses outside a Linkin Park concert in Cape Town, South Africa (November 2012) and at ULTRA Music Festival in Miami (March 2013); and the tragic nightclub fires in Rhode Island in 2003 and Brazil in 2013 all serve as stark reminders that things can go terribly wrong. As live entertainment events become increasingly more complex — elaborate in their staging and techno-centric — steps must be taken to ensure a higher level of event safety in every aspect of an event’s production. As insurance professionals, we are already seeing greater scrutiny of safety practices by city and state inspection bureaus. Stricter construction codes are being discussed; more stringent onsite inspections are being implemented; and more venues are requiring a higher degree of insurance coverage through higher limits and broader policy language on event producers, their vendors, and insurance carriers. Insurance Changes Gone are the days when the insurance sections of venue contracts were glossed over and rarely enforced. We have entered a new age of intense oversight with stricter requirements. Municipalities want to be certain that they have taken every precau20 | INSURANCE JOURNAL April 22, 2013

tion to ensure the public’s safety, and they are putting a greater onus of responsibility on the shoulders of event producers and their insurance providers to show that they are ready for almost any contingency. Instead of accepting certificate of insurance statements in lieu of contract endorsements as was often the norm in the past, venues are reexamining vendor contracts and strengthening the insurance language sections with more detailed requirements, including waivers of subrogation and per project aggregate language. Insurance providers for outdoor venue events are now asking to see engineering reports, high wind action plans, and daily operations plans as well. As a result of these changes, it is critical for insurance agents to understand the magnitude of the exposures involved with venue-related businesses, and to offer coverage through a carrier that has experience in this specialized industry. Every party needs to understand its roles and responsibilities when it comes to the safety and security of the public at these events, and that includes scrutinizing, understanding, and enforcing the insurance aspects of the contracts between the venues and the vendors. Any situation where a large number of people congregate is now commanding more attention from regulators, and that trend is only going to accelerate. New entities such as the Event Safety Alliance (www.eventsafetyalliance.org) have launched in the wake of the recent tragedies, and it is recommended for all insurance agents to become familiar with the measures these organizations are tak-

ing to self-police event safety. The Event Safety Alliance, for example, has published a “United States Event Safety Guide,” which should be mandatory reading for any live event producer. Opportunities With the increased scrutiny of producers’ and vendors’ insurance policies, many insureds will be searching for advice and direction from their insurance providers. Those agents and carriers who offer the most comprehensive policies and value-added services could see a swell of business. The most valuable insurance partners will be there to discuss potential claims with event clients before they happen. The tragic events of the past two years, coupled with the persistent trend of unpredictable weather events, have forced the live entertainment industry to put safety first. Making certain every client has the right kind of insurance coverage that is responsive to contracts is a critical first step, followed by requiring that every customer has a viable event safety plan that is wellthought out and specific to its function and role at these public events. Carroll is the executive vice president and program director of Take1 Insurance. www.insurancejournal.com

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NATIONAL COVERAGE

News & Markets Mayhem Rules Insurance Journal’s Mascot March Madness

he scrappy underdog from South & Western General Agency of Texas gave it a good run, but in the end, the powerhouse Allstate Mayhem mascot took home the trophy in the 2013 Insurance Mascot March Madness Tournament conducted online by Insurance Journal. The tournament, which was hosted at www.facebook.com/insurancejournal, allowed Facebook users to vote for their favorite mascot or spokesperson to deter-

22 | INSURANCE JOURNAL April 22, 2013

mine a winner in each game. “It’s been well received,” said Social Media Manager Ly Nguyen, noting that Facebook engagement tripled during the campaign. “People really connected with this tournament.” A typical game received an average of 60 votes and 10 shares, reaching approximately 4,000 to 5,000 Facebook users. However, the matchup between Allstate’s Mayhem and Farmers’ Professor Burke went viral, reach-

ing more than 260,000 users on its way to 1,768 votes and 367 shares in just a few days. “Mayhem [actor Dean Winters] shared it on his wall and it just took off,” Nguyen said. Nguyen says the social media campaign was a chance for Insurance Journal to expand its audience, as well as an opportunity for smaller insurance firms to gain national exposure.

www.insurancejournal.com

SPECIAL REPORT

Compiled by Young Ha, Don Jergler and Andrea Wells

obility technology is changing the way the insurance industry operates. And when it comes to working on the go, nothing is as important as mobile device applications. But what apps do independent agents use most? What apps are the most useful in business and personal life? Insurance Journal asked these questions to several industry experts and polled readers via Facebook, LinkedIn and Twitter to find the top apps for independent agents today. This report is a small glimpse at the apps found on an independent agent’s mobile device. A special thank you to those who responded to Insurance Journal’s query including: Steve Anderson, Chris Burand, Jason Cass, Stuart S. Durland, Claudia McClain, Joyce E. Sigler, Angelyn S. Treutel, Jeff Yates and the countless number of readers of Insurance Journal. ACORD ONE

This app provides access to the most commonly used ACORD (Agency Company Organization for Research and Development) forms. Launched in 2012, the ACORD ONE service allows users to complete forms on mobile devices, sign forms using the touch screen, save and retrieve forms, and email completed and signed forms. The app is available for Android and Apple tablets and phones. Cost: All current users of Cap Dat ACORD have free access to the ACORD ONE mobile app.

ALT MVR

ADR (American Driving Records) has developed an alternative data source to the traditional motor vehicle record (MVR). Called ALT MVR, this app contains the same information as traditional driving records but at considerably less cost, ADR says. The company says this affordability allows agents to run a record on more quotes — thus helping to more accurately calculate risk and properly quote new businesses and renewals. It will soon be integrated to select comparative raters. Cost: Contact ADR for pricing details.

Buffer

Buffer promises users a more personal and efficient method to handling sharing on social media. Buffer allows its users to schedule the social media content in advance. A user can fill up their Buffer at one time in the day and Buffer automatically posts new social media content for them throughout the day. Simply keep Buffer popped up to have a consistent social media presence all day round, all week long. Cost: $10 per month.

CamScanner

The CamScanner app turns smartphones into a portable document scanner using the camera on a smartphone to capture documents like articles, agreements, sketches, business cards and coupons. The app can use the smartphone’s flash to boost lighting, and CamScanner allows the user to zero in on scans with zoom functions. If users sign up with CamScanner they can backup, sync, edit and share documents on the go across smartphones, tablets, PCs and the Cloud. Cost: Free. 24 | INSURANCE JOURNAL April 22, 2013

CardMunch

CardMunch is a mobile business card transcription service that helps to digitize contact information. Users can take pictures of business cards with their smartphones and the app then transcribes information and imports the data to the users’ mobile Rolodex. There are many similar apps out there but CardMunch says it’s different in a number of ways. First, it says every business card submitted is transcribed, edited and reviewed by the company’s human workforce to ensure complete accuracy. And as a business unit of LinkedIn, the app makes it easy to connect with new contacts via the LinkedIn network after uploading business cards. Cost: Free.

CARFAX

The CARFAX app enables users to scan or enter Vehicle Identification Numbers (VIN) and get CARFAX reports instantly, view recently purchased CARFAX reports. The version for dealers does a few more things than the version for the general public. A new barcode scanner has been added to the app, which now can scan ADESA window stickers and standard VIN barcodes. Cost: Free.

Claims Journal

The makers of the Claims Journal App can lay claim to it being the only app that delivers content from Claims Journal magazine and ClaimsJournal.com to handheld devices. The app offers breaking news related to the insurance claims industry, videos and informative podcasts. Cost: Free.

CloudOn

CloudOn delivers Microsoft Office files and applications to tablets by linking to Box, Dropbox, Google Drive and SkiyDrive accounts. The app enables tablet users to open up and utilize programs like Microsoft Word, Excel and PowerPoint to create, review and edit files. Cost: Free.

www.insurancejournal.com

connectmogul

The makers of connectmogul say it helps agents leverage their book of business and connect via text messaging with their prospects and customers. Additionally, agents using the system wrote more policies and increased efficiency in 10 beginning-of day-processes, the makers say. The cloud-based tool helps automate daily activities and producers can upload their book of business and work off of pre-set templates that go out to their customer base. The app sends out automatic birthday messages and reviews messages, and it helps automate the cross-selling factor by automatically promoting bundling to their customers 30 days before renewal dates. Cost: $99 per month.

Dragon Dictation

With Dragon Dictation, agents on the go can stop typing and start speaking. This mobile voice-to-text transcriptions app from Nuance Communications is available through Apple’s iTunes store. Users can dictate personal notes and reminders. Powered by the Dragon NaturallySpeaking software, this app lets users speak and instantly see their text content for everything from email messages to blog posts. Users can also dictate status updates directly to their social networking applications including Facebook and Twitter. Cost: Free.

Dropbox

Dropbox is a file sharing system that allows users to access photos, documents, and videos anywhere and share them easily. Through the Dropbox free app users are able to access any saved file via Dropbox from all computers, iPhone, iPad and even the Dropbox website. The cost to open an account is free for up to 2 GB of space. Additional storage space costs more. Cost: Depends on account size.

Evernote

This widely used app allows independent agents to make notes on the go and keep their work ideas stored for later use. With Evernote, agents can take notes, capture photos, create to-do lists and record voice reminders — and make these notes searchable, whether at home, at work, or on the go. Evernote can also search for specific texts inside photos and business card images taken with smartphone or tablet cameras. Users can save, sync and share files across computers and mobile devices. The basic free account includes a 40MB monthly upload allowance. Cost: Depends on account size.

Expensify

On the road often? This app can help road warriors simplify their expense receipt-keeping. Expensify lets users track expenses, snap pictures of receipts and create expense reports, all on the go. The app can even read receipt images and automatically fill out details in the expense report. The app also tracks mileage expenses via GPS or odometer entry, and adds time or other billable expenses. Users can also sync their credit cards and bank accounts with Expensify to track expenses as they happen, without filling out information manually. This app is available for Apple and Android mobile devices. Cost: Free for individual users. “Team Plans” start at $5 per month per user.

Feeder

Feeder is food for your brain, according to an Apple iTunes Store review, where the app can be purchased for the iPhone, iPod or iPad. Feeder brings the latest news from all over the web, enabling users to swipe through a list of the latest articles and read each one with a tap. The latest version of the app boasts a redesigned interface, article sharing over browsers including Google Chrome, Instapaper and Safari and performance enhancements. Cost: 99 cents.

www.insurancejournal.com

GhostWriter

Ghostwriter Notes lets users take notes and store information on the go. The app offers a digital documentation platform, allowing users to create and save as many virtual notebooks as needed. Users can name specific pages, choose from various “paper” backgrounds, and even choose unique page backgrounds by importing images or photos stored on their devices. To write down notes, users can simply take their finger and write by hand, and the zoom ratio feature can control the font size down to a tee. Cost: $4.99 at Apple’s App Store.

GoToMeeting

The GoToMeeting app lets users attend or start GoToMeeting sessions from virtually anywhere. The app, which provides additional question and answer functionality on the iPhone and iPad, enables the viewing of presentations and reports and users can even zoom in on meeting content. iPad users can even use the app to present during meetings. Cost: Free.

HailSpot

Weather Decision Technologies launched a new mobile product designed to track and report hail fall sizes. HailSpot is available on smartphones designed to obtain accurate, immediate data regarding size and date of hail fall for an exact address from the weather database maintained by WDT in Norman, Okla. The product utilizes built-in smartphone location services to automatically geo-locate the device and indicate with a pin, an exact location or address. The app is available from the App Store on iPhone at imap.tv/hailspot. Cost: Free.

HootSuite

HootSuite is a social media management tool with millions of users. Its dashboard interface lets users keep track of all their social networking status from a single page. Social media managers can view and manage multiple social media accounts with online support for Twitter, Facebook, LinkedIn, Google + and Foursquare plus many other social networks. It allows users to instantly message followers on Twitter, check in on Foursquare, view LinkedIn connections, and comment on Facebook posts. It also offers post scheduling and statistics reports. Cost: Basic individual accounts are free. “Pro” accounts start at $9.99 per month for two users, with additional costs for more users.

iAnnotate PDF

The app allows users to read and annotate PDF documents on the go. Users can choose from more than 80 annotating tools to highlight, underline, bookmark, write on, and edit pages in PDF documents. Branchfire, the maker of iAnnotate PDF, says more than half a million people are now using the app for reading, marking up, and sharing PDF documents, Word/PowerPoint files and images. Cost: The full version for iPad is available for $9.99. The basic version for Android is available free for a limited time.

iCloud

iCloud is Apple’s popular cloud storage and cloud computing service. The service currently has some 250 million users around the globe. An Insurance Journal reader said his agency utilizes iCloud to handle individual and team calendars over both PC and Apple platforms. Cost: Users receive 5GB of free storage, and prices for additional storage start at $20 per year for 10GB.

Insurance Journal

Insurance Journal news app allows readers to access the latest property/casualty news from their iPhone/iPad, Android or Kindle Fire mobile device. Follow national and regional insurance news 24/7, and stream Insurance Journal’s library of videos and podcasts — all from a single interface. Cost: Free. continued on page 26 April 22, 2013 INSURANCE JOURNAL | 25

SPECIAL REPORT

JotNot Scanner

JotNot converts iPhone into a portable multipage scanner. The app allows users to scan multi-page documents, receipts, whiteboards, business cards and notes into an electronic format. Users can take a picture to scan and choose exactly what part of the photo should be scanned and converted into PDFs, JPEGs, or PNGs. Files can be directly uploaded to Dropbox, iDisk/WebDAV, Evernote, Box.net or Google Docs where they can be shared with others. Cost: 99 cents at Apple’s App Store.

Kayak

The Kayak travel app includes flight and car search, hotel search and booking, a flight tracker and “My Trips.” The app enables tracking of flight status, looking up baggage fees, access to airline numbers and airport information. Cost: Free.

Kelly Blue Book

This app can be a useful tool for agents when advising clients on auto insurance coverage. It quickly provides users with Kelley Blue Book valuations on specific vehicles. With this app, agents can read about car prices and used car values, browse car photos and videos and compare multiple cars side-by-side — all from their smartphones and mobile devices. Cost: Free for Apple and Android mobile devices.

MagicPlan

One independent agent described this app as “an awesome floor-plan app that lets you document a building while walking through.” This app measures rooms and draws the floor plan just by taking pictures. The floor plan can be sent to anyone or even be stored in the app’s cloud storage. Cost: Available at Apple’s App Store starting at $2.99 for each floor plan.

Mobile Banking

Mobile banking has grown by leaps and bounds just in past few years. For people on the go, mobile banking can be a valuable tool that lets them check account balances, transfer funds, pay bills and even deposit checks remotely by simply taking pictures of the checks. A significant number of smartphone and mobile device users are already logging onto mobile banking services every day. Forrester Research forecasts that nearly half of all U.S. bank account holders would utilize mobile banking by 2017. Cost: Free.

MobileProducer

Applied System’s MobileProducer app has a lot of useful tie-ins to the company’s management systems. The app integrates with Epic, Applied Systems’ agency management software which handles both benefits and property/casualty insurance. MobileProducer also works with Applied’s The Agency Manager (TAM), designed for brokers and agents, which lets users view customers’ files with all policies and carriers. The app’s interface offers producers personalized on-demand access to their client data on the go. Producers can also leverage GPS technology to map accounts and coordinate daily schedules. Cost: The app is available to Applied’s software users for a nominal fee.

NeoReader

The NeoReader app transforms mobile devices into a barcode scanner. It makes web content easily accessible by scanning codes from print ads, publications, 26 | INSURANCE JOURNAL April 22, 2013

packaging, billboards, retail displays, broadcast media or any mediums. The NeoReader scans standard code types including Data Matrix, QR codes, Aztec Codes, EAN, UPC, and Code 128. Cost: Free.

Notability

This app by Ginger Labs integrates handwriting, PDF annotation, typing, recording and organizing. Users can handwrite, type, and record their annotation into PDF documents and then share these annotations through email or a cloud service. Notability makes it a cinch to fill in applications, take notes, record voice and send it back to the office. Ginger Labs says Notability was a top selling note-taking apps for Apple in 2012. Cost: $1.99 at the Apple App Store.

Noteshelf

Noteshelf is an app designed to take written notes on an iPad. The app offers a variety of paper types — legal pad, checked paper, plain white — and different writing utensils in various colors and thicknesses. It also offers camera integration, so user can import an image right onto the page and draw directly on the photo. Cost: $5.99.

ONE

ONE is workers’ compensation agent/agency tool that calculates and predicts workers’ comp experience mods and provides an analysis encompassing everything from experience mods to premiums to rates to payroll. The app can predict future experience mods and premiums up to four years into the future. ONE also prints proposals and letters with agents’ as well as clients’ logos and colors. Cost: $49 per month.

Penultimate

The Penultimate app offers the experience of pen and paper and it enables syncing with the Evernote app, made by the same company. Cost: Free.

Photo Measures

This app provides an easy way to draw and save measures on photos on via a handheld device. Take some photos and note the dimensions on the photos to remember an exact layout on the screen. The app also enables users to add text comments, measure in imperial or metric units and export dimensions in high resolution via email. Cost: $2.99.

PocketCloud Remote Desktop

PocketCloud is a secure and fast way to remotely connect to Mac or Windows desktop with iPad, iPhone, iPod touch or Android devices. With PocketCloud, agents can access their files, pictures and applications like Excel, PowerPoint, Outlook, Word, Photoshop, games or any other programs. Cost: Basic accounts are free and “Pro” accounts with additional features cost a one-time fee of $14.99.

PODS

PODS is a performance management app from Interactive Performance Solutions. It lets agencies set goals and plan out activities. Agencies can set up daily tasks for each employee in their business. Each day, everyone logs onto their PODS app to see the tasks assigned to them. And employees mark them off as they complete those tasks, which increases visibility into the progress of each team member. Cost: The price is $299, followed by $75 monthly fees, for agencies. www.insurancejournal.com

Priceline

Cost: Free.

The Priceline App offers a simple way to book hotels and rental cars on the go backed by Priceline’s “best price guarantee.” Choose the exact hotel or rental car for any travel date, including last minute and same-day reservations.

Pulse

Pulse displays news from multiple RSS feeds in a single page using a tile based interface. The app also enables users to save stories for later reading, or share stories with friends and colleagues. Cost: Free.

QQ Mobile

The mobile app provides remote access to the QQ Evolution agency management system for independent insurance agencies. It allows users who already have QQ Evolution to securely access from their mobile devices client data, including client details, policies, notes, files and reports. Features include cross-selling reports to discover sales opportunities and customized marketing letters and emails for clients and prospects. The carrier downloads feature imports clients’ transactions directly from participating carriers. Cost: The mobile app is part of the Platinum edition of QQ Evolution.

QuakeWatch

This app lets users get the latest information on earthquakes from around the world. Using feeds from multiple sources including the U.S. Geological Survey and the European-Mediterranean Seismological Centre, it displays data on earthquakes with magnitude 1.0 and greater that have occurred over the past week. Users can pan and zoom online maps to focus on hot spots around the globe and see detailed quake reports. Cost: 99 cents at the Apple App Store.

Redfin

Redfin’s Multiple Listing Service-powered app includes complete home details, full-screen photos, property history and agent notes, all updated every 15 to 30 minutes. Cost: Free.

SendPepper

SendPepper, from OfficeAutopilot.com, integrates online and offline marketing. SendPepper gives small business marketers the tools to automate both email and personalized direct mail in a single interface. Additional features include personal URLs and custom-built, personalized landing pages for each potential customer. Cost: Prices start at $29.95 per month.

SignNow

SignNow is an app for iOS and Android devices that enables users to digitally sign and notarize documents, and send to others for their signature. Users can create their own signature for reuse, and the app keeps files secure but remotely accessible. Cost: Free.

Skitch

Skitch is part of the Evernote family of apps. This free app lets users add sketches and text annotation to photos, screenshots, maps, and web pages — and then share them with colleagues on the go. Users can brainstorm design ideas with their team members, annotate screenshots and pictures, add scribbles to explain ideas, and identify points of interest on maps. The Skitch annotation can help colleagues see and share ideas and get everyone on the same page. Cost: Free.

www.insurancejournal.com

Trip Advisor

Plan a trip with the TripAdvisor app, which gives access to more than 75 million candid reviews and opinions by travelers. The app also enables users to find the hotels, restaurants and things to do. The app’s flight search helps find and book airfare deals. Users can also book options for hotels and restaurants. Cost: Free.

Twitter

For many insurance agents, Twitter has become an integral part of their digital marketing effort to promote their business and connect with clients and prospects in their local communities. Twitter also makes it easy to follow colleagues and keep up with latest industry developments. Cost: Free.

Vertafore Producer Advantage

An app for iPhone and iPad due out soon from agency software producer Vertafore integrates Pipeline Manager, ReferenceConnect, and AMS360 helping producers manage prospects, opportunities and activities. The app allows mobile users to access current client policy information, and provide accurate forecasts. Cost: Free for paid clients.

Waze

“Waze is the world’s fastest-growing community-based traffic and navigation app,” its makers say. Social types can see what other friends are also driving to their destination when connected on Facebook, and the app helps drivers navigate to the cheapest station on their route thanks to gas prices shared by other Waze drivers, or “Wazers,” who can also share real-time traffic information and other road alerts, hands free of course. Cost: Free.

Yelp

Yelp is a local business directory service and review site with social media features. Users can check or submit reviews for local shops and businesses. Small business owners could set up their own profile to create a business owner account. Yelp may also be a good way for small businesses to reach out to younger demographics who often use the app on the go, but some businesses have expressed worries about unflattering customer reviews that can appear online. Cost: Free.

Zillow

For those looking for quick information on home property data, Zillow Real Estate may be the perfect app. Drawing on Zillow’s vast database, the mobile app shows estimated home values, property records, photos and more. It lets users find and compare real estate prices and home property details on the go. The app is available for Apple and Android mobile devices. Cost: Free.

Zite

“Discover your Interesting.” No, in this case that’s not the incorrect use of “your,” it’s the slogan for Zite, a smart news aggregator that enables people to create their own personal magazine with thousands of topics from which to choose. The CNN-owned personalized news app sifts through “millions of new stories every day” to match stories to your personal interests and then delivers them automatically to your handheld device. Cost: Free.

April 22, 2013 INSURANCE JOURNAL | 27

CLOSER LOOK

Directors & Officers

10-Point Checklist for D&O Renewals in a Hard Market

o one, least of all the insured, likes a price increase. But with the D&O market firming across the board — as confirmed by the Towers Watson “2012 Directors and Officers Liability Survey” released in March — businesses are likely to face rising premiums when their policies next come up for renewal. The higher prices and tougher underwriting requirements of a firming market make it more By Lisa Doherty imperative than ever for agents and brokers to be out the gate and start the renewal process early. To ease the renewal process and to arrive at the most favorable terms, use the following checklist to & Seth B. help ask the right quesBrickman tions, gather information, and keep the client informed. 1. Check with the carrier 90 to 120 days from renewal to understand if any rate changes related to D&O or employment practices liability (EPLI) are anticipated. 2. If rates are expected to go up, ask the underwriter what’s driving the increase, getting them to respond with as much specificity as possible. Inquire if the increase is across the board, meaning all risks in the portfolio, or limited to a certain segment such as a class of business (hospitality, for example), geographic (i.e., California), or at an even more granular level (i.e., Southern California). If the increase is limited, find out why your client’s particular segment has been targeted. 3. Ask the underwriter if according to their carrier’s guidelines certain underwriting elements would have more impact on the rate than others, for example the impact of an acquisition, organic employee growth, or layoffs. Find out if any coverage changes are 28 | INSURANCE JOURNAL April 22, 2013

anticipated, such as cutting wage and hour coverage, layoff exclusion, higher minimum deductibles, etc. Inquire if there is any underwriting information in addition to the application and attachments that would be helpful. Request underwriting information from the insured 60 to 90 days from renewal. Compile a complete submission at the outset. It reflects well on the agent and the insured, and will save time in the process. Look for aspects of the business that changed from prior years and could impact the rate, such as adding a new location (particularly in a different state that might be a tougher venue). Understand what’s driving the insured’s changes so relevant information can be explained to the carrier up front, eliminating underwriter uncertainty that may contribute to rate increases. Remember that asset growth drives the D&O rate, and employee growth drives the EPLI rate. Be prepared to debate underwriting factors such as financial statements with the underwriter. Agents and brokers who can astutely debate the finer points of a risk often are able to secure better terms on the renewals. Analyze the underwriting data relative to last year’s policy and potential rate changes outlined by the carrier regarding renewal. Include comparative market data and industry benchmarks. Begin communicating these changes to insureds so they understand not just that there will be a rate increase but why. If there has been a claim reported since

the last renewal, get a detailed explanation and remedial measures from the insured — anything that will help you make the case that the incident was unique and is unlikely to happen again. Acquire claim information or analysis from the carrier about its perception of the claim. The carrier and the client will likely be looking at the claim differently (insured typically downplays, carrier has concerns), which could impact the renewal or even lead to a non-renew outcome. Arming the underwriter with the insured’s perspective and risk mitigation procedures might help reduce the need for adjustments to coverage or rates. 8. When major underwriting changes or material claims are involved, request a conference call with the insured and the carrier to allow the underwriter to hear firsthand the insured’s perspective and ask any questions of concern they may have. If you do request a call, make sure your client is completely prepared and has a solid presentation that will help the case. 9. Upon receipt, carefully compare renewal terms with those in the expiring policy. Review for more restrictive exclusions or new limitations to coverage, making sure that the client will continue to be adequately protected. 10. Communicate to eliminate surprises on either side and to ensure a constructive renewal process with the best possible outcomes for the client. Doherty is president of Business Risk Partners, a managing general underwriter in specialty insurance. Brickman oversees the firm’s portfolio of management liability solutions for agents and brokers nationwide serving middlemarket clients. Website: www.BusinessRiskPartners.com. www.insurancejournal.com

SPOTLIGHT

Transportation 10 Things to Know About the Trucking Industry • In 2012, intermodal container volumes rose by 5.9 percent over the previous year with 13.1 million moves, according to the Intermodal Association of North America’s “Intermodal Market Trends & Statistics” report. That number surpassed the previous benchmark year of 2007 by 9.8 percent. • Seasonally adjusted forhire truck tonnage increased 2.9 percent in January 2013 — up 6.5 percent over the same period last year — after jumping 2.4 percent in December 2012, the American Trucking Associations reported. From November 2012 through January 2013, tonnage increased 9.1 percent. • Run-offroad, rearend and lane change maneuvers account for 23 percent, 28 percent and 9 percent of highway accidents, respectively, according to the National Highway Transportation Safety Administration. • In 2010, nearly 12.5 billion tons of freight with a value of approximately $10.5 bil-

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lion moved by truck in the United States, according to the U.S. Department of Transportation. Those figures are expected to grow to around 18.5 billion tons valued at $21.7 billion in the year 2040. • Transportation insurance brokers, wholesalers and underwriters responding to a survey conducted by NIP Group said insurance premiums for the trucking segment increased in the fourth quarter of 2012. Of those participants in NIP’s Transportation Insurance Pricing Survey (TIPS), 66 percent said they believe premiums had increased by as much as 10 percent in Q4 2012. • Among the participants in the TIPS survey conducted by the NIP Group, 53.2 percent said insurance premiums for the intermodal trucking segment increased between 1 percent and 10 percent in the fourth quarter of 2012. • Class 8 truck, those with gross weights of 33,001 pounds or more, net orders for March 2013 came in at 21,817 units, representing an 11 percent

increase compared with same month in the previous year, according to Bloomington, Ind.-based FTR Associates. • In 2012, there were 793,470 drivers of heavy and tractor-trailer trucks employed in the United States, according to the U.S. Department of Labor’s Bureau of Labor Statistics. Annually, the median wage in 2012 was $39,620, and the mean wage was $41,190. • Fuel and driver wages (excluding benefits) are the largest cost centers for trucking companies; together they represented 62 percent of the average operating cost in 2011, according to the report, “An Analysis of the Operational Costs of Trucking,” published in late 2012 by the American Transportation Research Inc. (ATRI). • The average fuel cost per mile for trucking fleets in 2011 was $1.71; converted into hourly figures using an empirical average truck operating speed, the total average industry cost per hour was $68.20 in 2011, according to ATRI.

April 22, 2013 INSURANCE JOURNAL | 29

CLOSER LOOK

Directors & Officers E&O Insights: Directors & Officers Liability Is Not Your Normal Insurance Product

f you asked 100 insurance professionals on the agency side what one line of business “scares” them the most, it’s likely that directors and officers (D&O) liability would be at the top of the list. The lack of standardization of policy forms contributes to this anxiety. In addition, lack of real experience or expertise, coupled with the potential for significant judgments, make this By Curtis M. Pearsall a product to be respected and not taken for granted. Most companies’ state law governs the issue of indemnification, granting corporations the authority to indemnify while limiting the circumstances in which they can do so. Even in states where the statutes are considered broad, one thing is clear: corporate bylaws and/or indemnification agreements do not provide absolute protection. As a result, D&O insurance is an important component in any comprehensive protection plan. In the past 10 years or so, it seems that directors and officers working in the business world have operated under heavy scrutiny. The economy, stock market and various alleged scandals, coupled with an enhanced level of governmental regulation, have put directors’ and officers’ actions under a microscope. As they look to protect their personal assets should a big claim develop, in most cases directors and officers look to their insurance program — specifically to their D&O insurance — to do the job. While a D&O policy cannot protect against every risk, with the proper focus and attention to detail, there are several areas where a comprehensive and properly negotiated D&O policy can help to significantly reduce the chance that a director’s or officer’s personal assets could be at risk. Not All D&O Carriers Are Equal Virtually all D&O carriers provide this coverage on a claims-made basis. It is vital 30 | INSURANCE JOURNAL April 22, 2013

that agents understand this type of coverage and its nuances, such as “retro date” and what constitutes the “trigger of coverage.” In some respects, this is where much of the similarity ends. Within the D&O insurance marketplace, agents can expect a tremendous lack of uniformity in terms and conditions and scope of coverage. This should result in a concerted effort by the agent to note the specific details, especially when dealing with definitions, exclusions and conditions. Agents who do not take heed of these details may find some of their customers experiencing the difference between a policy providing coverage for a big loss compared to one that leaves the customer with no coverage. While price may be an issue, it is not the most important factor. Other areas where agents may see differences include: • Terms and conditions; • Claims-handling expertise; • Financial rating; and • Longevity in the industry. Insuring Agreement is the Heart As with most insurance coverage, the insuring agreement is the heart of the D&O policy, as it sets forth the basic scope of the coverage provided. Typically, D&O insur-

ance policies provide three main types of coverage in three distinct insuring agreements: • Non-Indemnifiable Coverage — which protects directors and officers when the company may not indemnify its directors or officers by law or for public policy reasons, or cannot indemnify its directors or officers due to financial insolvency. • Corporate Reimbursement — which protects the company by reimbursing the company for the amounts it pays to its directors and officers as indemnification. • Entity Protection — which protects the company for its own wrongful acts. Who is an Insured The “who is an insured” section of the policy usually provides coverage for the company’s directors and officers, the company itself and the company’s subsidiaries. Agents may find one or more of their carriers going beyond this to include as an insured individuals serving outside entity organization, a debtor-in-possession in a bankruptcy context or other high-profile individuals such as the general counsel or risk manager. There are advantages to this broad definition, as it increases the likelihood the www.insurancejournal.com

Bollinger Sports & Recreation Insurance D&O policy will respond in the event of a claim because more entities/individuals are covered. However, because more entities/ individuals are covered, this broad definition will serve to dilute the protection afforded. This could result in less protection for certain key individuals. What Constitutes a Claim What constitutes a claim will be defined by the policy. Agents should expect some significant differences among different D&O policies. This is a key area to note when comparing policy forms.

age that would protect the client from suits filed by franchisees. The agency procured a D&O policy that had a specific exclusion for claims by franchisees. Neither the agent nor the client read the policy. The client was sued by the franchise owner claiming failure to divulge the true nature of the gross income and expenses, asking for $900,000. In the opinion of the errors and omissions (E&O) carrier, the liability rested mainly with the agent for failing to obtain the coverage specifically requested. The case was eventually settled for $650,000.

Limit/Retention Definition of Wrongful Act As there is really no formula to calculate This definition of a wrongful act is the right amount of coverage, some customnormally very broad and will include any ers rely on case studies. While this may probreach of duty, neglect, error, misstatement, vide some insight into the “norm,” caution misleading statebe exercised Agents should expect some should ment, omission or with this approach act by an insured. because there is significant differences on While some may still no guarantee what defines a claim among the average limit contend there is coverage unless will be sufficient different D&O policies. there is a specific for the client. exclusion, this could be a dangerous trap as Selecting the right retention is also a complicarriers may look to address this issue under cated decision. areas such as the insuring agreement. Regarding limits and retention, it is best The norm is for carriers to specifically list for agents to provide a variety of options for their exclusions. While there is the potential the customer to consider. for many of the exclusions to be similar, Unless the agent/broker deals with this agents should still review the exclusions line of business frequently, dealing with a closely. Although an agent may understand D&O expert, someone who truly knows the exclusion wording, it is still advisable to the nuances, is suggested. The last thing an discuss this with the carrier to truly underagent needs is for the customer to have a stand the exclusion’s meaning and intent. D&O claim and experience the issues carri As noted by the following claim, agents ers can raise to limit or deny coverage. There should make a solid effort to understand are many areas within the coverage form their customers and provide them the covwhere policy language may be negotiated, erage they are requesting, or advise them which takes tremendous attention to detail accordingly if that coverage is unavailable. and experience. An agency had a client who originally owned three haircut salons for which Pearsall is president of Pearsall Associates Inc., a risk the agent procured property and general management consulting firm specializing helping agents liability coverage. The client decided to protect themselves. He is also a special consultant to the sell the salons and enter into a franchise Utica National Agents E&O program. Phone: 315-768- 1534. agreement with the buyers. At that time, Email: curtis@pearsallassociates.com. Blog: www. the client asked the agent to secure coveragentseotips.com. www.insurancejournal.com

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Growing Your Property Casualty Agency 7 Ways for Independent Agents to Recover Lost Policies

ndependent agents have a nearly endless supply of suspects to solicit. They encompass almost every consumer and business in the state(s) in which you’re licensed. Of course, some make better prospects than others, and the more you know about them, the better. Unfortunately, the new business leads that you know the most about are recently canceled By Alan Shulman insureds. In the dark days before the glow of computers, many agencies stored canceled policies in one or more filing cabinets called “the morgue” or some other equally macabre name. These records were seldom looked at after they were buried in some distant corner of a storeroom. Some dead files contained reminders of troubles that you were glad to be rid of, but others were quality insureds who only lately went astray. Here are seven considerations for bringing the recently deceased back to life. The sooner the better. The longer a person or business is insured elsewhere, the greater the odds they’ll stay away. So, react quickly to every cancellation. Formally decide if you want each ex-policyholder to stay where they are or if you want to try to get them back. Why did they go? Immediately after losing a policy you want back, find out why it was lost. It’s not always pricing. Sometimes it’s an internal cause such as a personality conflict or a display of disinterest. Call, email, or send a client “exit survey” that, when completed, reveals their motivation to move. If you act promptly and the loss is the first of multiple policies, you may be able to stem the tide. Maintain lost policy data. Keep records of each policy you lose. Track the neighborhood or industry, the CSR who lost the business, the losing and winning www.insurancejournal.com

carriers and producers involved, policy type and tier, etc. Look for trends and make offsetting adjustments as needed. If you are losing business primarily to the same companies, regularly monitor their rates. Pricing is fluid for carriers, so you may be in a much stronger competitive position against them just a year down the road. If so, go back after these ex-insureds and aggressively resolicit their business.

Look at the solicitation of a quality ex-insured as a fresh opportunity for the agency and the individual. Buyer’s remorse. The large national insurance marketers don’t retain every policy they take from you. After switching, certain people regret leaving their independent agent and want to return but are too embarrassed to ask. Have a formula in place for inviting these hesitant folks back. Comeback testimonials. Resolicit desirable former insureds with true tales of redemption. Ask erstwhile ex-insureds if you can reveal to others why they returned to you. When they’re agreeable, send potential returnees a brief summary that

highlights the reasons why those individuals came back. Don’t give up. Just like it’s a mistake to stop soliciting new business prospects after one or two contacts, don’t stop going after selected ex-insureds. Do it repeatedly to demonstrate your earnestness. Regularly resolicit them mid-term and 30 to 60 days prior to their renewal date, using person-toperson re-contact methods, including phone calls, emails, letters, and social media (if you’re still connected). Attitude counts. Your agency’s view of lost business starts from the top. If you look at it as a sign of failure to be buried and forgotten, this attitude filters down to staff personnel. Producers and reps won’t resolicit as many insureds as they should. Instead, look at the solicitation of a quality ex-insured as a fresh opportunity for the agency and the individual. And this time, you’ll go in with more knowledge about the prospect than you did the first time, increasing the odds of a happier, longer-term relationship. Shulman is the publisher of Agency Ideas, a subscriptiononly sales and marketing newsletter. He is also the author of many tools on the Agency Ideas Instant Download Store. Phone: 800-724-1435. Email: alan@agencyideas.com.

April 22, 2013 INSURANCE JOURNAL | 33

IDEA EXCHANGE

Minding Your Business Planning for Uncertainty

he traditional business plan includes short-term and long-term goals, and projections. But how do you plan when you can’t guess what will happen? Some things are shifting faster than you can keep up with, while other things can drastically change based on politics. Part of the reason for our current By Catherine Oak economic challenges is short-term thinking. Traditional business planning is becoming obsolete. However, if a business abandons long-term planning, it has no direction & Bill Schoeffler and will be totally reac-

tive and not proactive. The focus on shortterm trends will cause a business to chase after opportunities, instead of creating them. What is a business to do in these uncertain times? Develop a plan that has both a flexible foundation and scalable systems. Consider the typical insurance agency. It would have various lines of business: personal lines, commercial lines, group benefits, etc. Some agencies might have several niches like construction, retail, directors and officers liability, etc. These segments are the foundation of the business. The business segments can be considered as something closer to long-term goals. It is easier to predict that health insurance is currently uncertain, while personal lines seems stable at this point. The key to longterm planning is to accept that one or more

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Other Industry Downfalls When Coca-Cola introduced New Coke based on perceived trends, it ended up being a flop. Despite spending millions of dollars and untold work hours, the company was able to drop New Coke and rebrand “Old Coke.” In contrast, Polaroid cameras were successful for many years. Unfortunately the company did not change or adapt to the digital age. Polaroid had no products other than its traditional “instant picture.” The company went bankrupt in 2005. Regarding insurance agencies, if health insurance sales drop off significantly, how can those resources be redirected to other lines? Or, what options are available to decrease overhead? It is important for a business to add or delete segments of business as trends change. In most cases, these trends would take about five years, plus or minus a couple of years.

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segments might not perform in the future. The agency needs to plan for flexibility between departments.

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Create a Scalable Plan Once the segments are identified and continued on page 36 www.insurancejournal.com

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IDEA EXCHANGE

Minding Your Business Uncertainty, continued from page 34

trends established, the next step is to crelow their variable costs â&#x20AC;&#x201D; or the costs ate a scalable system. A plan needs to be incurred with each customer they gain. A established to grow or shrink each segment business that follows a scalable model will of business based on current trends. not have its cost per customer increase, Letâ&#x20AC;&#x2122;s assume the contractorâ&#x20AC;&#x2122;s niche is even if it gains 100 customers overnight. shrinking. What can be done to increase Insurance is a little less fickle than other sales in the other niches? Scalability means businesses. Cabbage Patch dolls and Pet to plan for increasing or shrinking a segRocks have a very short cycle compared ment of busito most lines of Scalability means to plan for ness based on insurance. This demand. increasing or shrinking a segment means insurance A scalable agencies have a of business based on demand. business is little more time able to increase revenues while the ratio of to scale the business, compared to some cost to revenue is less to deliver than the other types of business. Insurance agencies current ratio. In other words, the cost of are also not as scalable as a business that growing is far outweighed by the resultdoes manufacture widgets. ing profits. A scalable business is one that can take on new clients without increasing How Agents Can Scale workload. The good news is that when there is a Businesses will always have operating focus on niches or specific lines, the agency costs, but scalable businesses try to keep is able to have some level of scalability. It

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36 | INSURANCE JOURNAL April 22, 2013

is important to create a system to quickly adapt to short-term changes. If one line of business drops, the agency needs to be able to move resources to the lines that have the potential for growth. This type of system will require cross training and individual flexibility. The business plan needs to incorporate these requirements and train its people to know when operations need to change. Being proactive by planning ahead, rather than being reactive will lead to great results! Oak is the founder, and Schoeffler is an independent contractor, of Oak & Associates, based in Santa Rosa, Calif. The firm specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, clusters, sales and marketing planning as well as perpetuation planning. Phone: 707-936-6565. Email: catoak@gmail.com. Website: www. oakandassociates.com

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Closing Quote

Guns and Insurance

By Tom Harvey

e are going to have both. Millions of gun owners will keep their firearms, and the level of death and injuries is unbearable. The tension will continue until a means to deal with these facts is forged, and you can bet insurance will be a part of it. Already, bills have been introduced at the state and federal level. But, new forms of insurance are required; ones that will aid victims and help protect the public. Those calling for gun insurance often point to the similarity with car insurance. There are many parallels but critical differences as well. Gun victims will not have their own insurance (when negligence cannot be proven); and shooters can be uninsured, illegal or unknown. Providing compensation for victims is important. It’s needed for medical care of the injured, replacement of lost wages, burial and other purposes. Unfortunately, victims are rarely helped by insurance like the NRA’s current excess liability insurance, which applies to gun users who are proven to be negligent. This isn’t surprising because it exists to protect gun owners, not victims. Required Gun Insurance Providing for public safety is important. Insurance companies help reduce hazards from people’s actions. It works, not perfectly, but quite well for cars, workplace injuries and public dangers of business activities. Required gun insurance will provide similar protection and safety. Insurers

38 | INSURANCE JOURNAL April 22, 2013

will demand safe practices and secure storage of guns as a condition of giving favorable rates. They will proportion premiums to the level of risk for each situation. They will oversee the greatest dangers in the most detail. Proposed bills in the House of Representatives and state legislatures would require liability insurance with high limits for guns. This would be painful to gun owners without providing much relief for shooting victims, because ordinary liability insurance doesn’t cover intentional acts or what happens after a gun falls into the hands of a “bad guy.” Insurance trade spokespersons, who naturally don’t want to offend gun owners or appear to be profiteering, have been saying that gun insurance is basically impossible. This simply isn’t true. For centuries, as new risk situations have risen, insurers have adapted terms and coverage to handle the risks. It’s now time to develop the right kind of insurance for guns. To cover the majority of cases, gun insurance needs to be no-fault in nature and be applicable to situations where shootings often happen. Many shootings are not done by the legal owner of the gun involved, which may have been found by a young child, borrowed or stolen. Worker’s compensation insurance has many lessons. In my opinion, the best model is personal injury protection, as it applies in New York to pedestrians who don’t have their own insurance and are hit by cars. Studies by insurance providers and regulators are needed. Objections to Gun Insurance The most common objection to gun insurance is that no insurance covers intentional or criminal acts. Yes, these are excluded from most liability insurance. However, they are covered by many kinds of insurance that are intended or mandated to protect third-parties. For example, businesses are covered for acts of employees by means of a “separation of interests” clause. Fire insurance with an “open mortgage clause” pays a lender when owners commit arson. Motor vehicle insurance applies to “road rage” incidents in Massachusetts and some other states. Although these policies don’t pay a policyholder who does a misdeed, they pay out fairly to other innocent parties. Another objection is based on constitutionality. History may be instructive here. When cars were new to society, there were many lawsuits against regulating them and requiring insurance on the basis that it is a burden on the wellestablished constitutional right to travel. Yet by the 1950s, these cases had died out and are all but forgotten. Insurance as a backdoor way to ban guns may be unconstitutional, but insurance to protect victims and the public is not. One last thing: having insurance is a sign of responsibility. It’s a major step toward changing the culture of gun ownership from one of anything goes to one of care and safety. Harvey is a retired business owner. Harvey served in the army (as an armament maintenance officer). He blogs at http://guninsuranceblog.com.

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Expect big things in workersâ&#x20AC;&#x2122; compensation. Expect to save a third of your clients 30% or more. Expect broad acceptance and few class limitations nationwide. Expect competitive commissions. For information call (877) 234-4450 or visit auw.com/us.

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