Insurance Journal West 2015-05-04 by Insurance Journal

WEST Hole-in-One Insurance Scammer at it Again Subcontractor Underreported $78M in Payroll Earthquake Fault Puts Calif. at Risk for Tsunami

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WEST

Inside This Issue

On The Cover

Special Report:

Beating Up on Workers’ Compensation

May 4, 2015 • Vol. 93 No. 9 • West

NATIONAL COVERAGE

WEST COVERAGE

IDEA EXCHANGE

10 ‘Hungry’ Insurers Continued to Cut Commercial Prices in Q1: CIAB

W2 CDI: True Religion Subcontractor Underreported $78M in Payroll

28 Tech Talk: The Risk of Data Breach in Agencies Today

16 Independent Agents Identify Business Opportunities for Carriers: Survey

W2 Washington Commissioner Says Hole-in-One Insurance Scammer at it Again

31 How to Mitigate the Risks of Cloud Computing

18 What Agents Think About Google Compare

W6 California Workers’ Comp Premium Up 11% in 2014; Combined Ratio Still Exceeds 100

20 Spotlight: 10 Things to Know About Recreation & Leisure 22 Special Report: Beating Up on Workers’ Compensation

W6 Earthquake Fault Puts California at Risk for Tsunami

43 How Analytics Technology Can Speed Integration Post-M&A 45 Best of the Best: Supply & Demand 46 The Competitive Advantage: Chris Burand 50 Closing Quote: Challenges Continue as Drone Regulations Take Shape

26 Closer Look: Insuring Restaurants and Taverns Presents Some Real E&O Risks 34 2015 Workers’ Comp Directory

DEPARTMENTS W4 People 11 Declarations 11 Figures 12 Business Moves 30 MyNewMarkets

6 | INSURANCE JOURNAL-WEST May 4, 2015

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NATIONAL COVERAGE

Opening Note It’s a Buyers’ Market

nsurance buyers can expect to face friendly market conditions on most lines of insurance for the remainder of 2015 thanks to reduced catastrophe losses and a high supply of capital. But evolving threats from a range of risks — cyber attacks, political instability and a changing climate — pose risk management challenges for many of these same buyers, says Willis Group Holdings in its 2015 Marketplace Realities Spring Update. While buyers should enjoy favorable pricing and terms in most lines, there are some exceptions to the downward trend, most notably cyber insurance. Willis expects commercial property rates to fall by an average of 12.5 percent to 15 percent for both non-catastrophe-exposed and catastrophe-exposed risks, due in part to a market flush with capacity, according to the report, which suggests even further softening could occur. Insurance carrier appetite for this risk remains strong and with increased carrier capacity, Willis says buyers are enjoying ample options in determining where to place their business in 2015. For commercial casualty lines, capacity also remains abundant. Willis says it expects primary pricing at renewals to be flat. The pricing environment for workers’ compensation is unchanged, with a mix of ‘The threat of cyber-related increases and decreases losses seem to be a matter of ranging between -5 percent not if, but when.’ and +5 percent, though California workers’ compensation rates are expected to climb by 8 percent. Individual experiences will vary depending on industry, geography and loss history, but overall Willis expects a marketplace that continues to offer opportunities for buyers. But, Matt Keeping, chief broking officer, Willis North America, said challenges remain for organizations as risk profiles change. “The threat of cyber-related losses seem to be a matter of not if, but when; the push for global markets is clashing with the realities of political upheaval and war in many places on the planet, making political risks increasingly unavoidable; and even if Nat Cat losses are down in the aggregate, there is the sense that a changing climate brings an increased potential for widespread catastrophe in heavily populated areas.” Cyber insurance is among the exceptions to the broad downward trend. With cyber breaches increasing, the demand for stand-alone cyber policies is dramatically rising. Willis predicts increases of up to 10 percent for most buyers. However, organizations with point-of-sale (POS) exposures face 10 percent to 100+ percent increases for primary premiums. Willis also expects rate increases on errors and omissions coverage for organizations with poor loss experience or difficult industry sectors, and some environmental insurance programs. In the executive risks lines, buyers will find a mix of Andrea Wells modest increases and decreases. Editor-in-Chief 8 | INSURANCE JOURNAL-NATIONAL May 4, 2015

Publisher Mark Wells | mwells@wellsmedia.com EDITORIAL Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@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 Chris Burand, Curtis Pearsall, Tom Wetzel Contributing Writers Asaf Cidon, Tom Karol, Sarah Lucas, Kabir Syed SALES Chief Marketing Officer Julie Tinney (800) 897-9965 x148 | jtinney@insurancejournal.com Sales Manager Lauren Knapp (800) 897-9965 x161 | lknapp@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 | dkaplan@insurancejournal.com South Central Mindy Trammell (800) 897-9965 x149 | mtrammell@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 Ly Nguyen (800) 897-9965 x125 | lnguyen@insurancejournal.com MARKETING/NEW MEDIA Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns (619) 584-1100 x120 | eburns@insurancejournal.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com DESIGN/WEB Chief Technology Officer/Chief Innovation Officer Joshua Carlson | jcarlson@insurancejournal.com V.P. of Design Guy Boccia | gboccia@insurancejournal.com Audience Development Elizabeth Duffy | eduffy@wellsmedia.com Marketing Director Derence Walk | dwalk@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com IJ ACADEMY OF INSURANCE V.P. of Education Chris Boggs | cboggs@ijacademy.com Online Training Coordinator Barbara Whiffen | bwhiffen@ijacademy.com ADMINISTRATION Chief Executive Officer Mitch Dunford Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com

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GENERAL LIABILITY EXCESS CASUALTY & UMBRELLA E&S PROPERTY ENVIRONMENTAL RAILROAD CONSTRUCTION

ENERGY PROPERTY PRODUCT CONTAMINATION PRODUCT RECALL PROFESSIONAL LIABILITY KIDNAP, RANSOM & EXTORTION D&O / FIDELITY / EPLI PROGRAMS

NATIONAL COVERAGE

News & Markets ‘Hungry’ Insurers Continued to Cut Commercial Prices in Q1: CIAB

pricing as carriers scrambled to book new nsurance brokers report that the combusiness. Brokers responding to the survey mercial property/casualty market conreported an actively competitive market. tinued to soften in the first quarter of 2015, In the Northeast, brokers said carriers with large accounts seeing the biggest price were “more aggressive” with a “much broaddeclines. er appetite” and offered “lower deductibles, On average, small, medium and large multi-year deals.” Carriers were “hungry, accounts fell 2.3 percent, compared with a hungry, hungry,” one broker said. decline of 0.7 percent in the 4th quarter of Midwestern brokers last year. Large accounts reported “aggressive carrisaw the steepest drop of Plentiful capacity 3.7 percent, while medicontinued to dampen ers” and that “downward on pricing was um-sized accounts fell pricing as carriers pressure greater than three months 2.7 percent, according to scrambled to book ago.” the quarterly Commercial Other regions reported P/C Market Index new business. similar trends: “Broader risk Survey by the Council of selection; more flexibility in terms, condiInsurance Agents & Brokers. tions and pricing” (Southwest); “reduced “The trend of falling prices we saw in deductibles higher capacity” (Southeast); the fourth quarter of 2014, continued into and “soft market, lots of property capacity” the first quarter of this year,” said Ken A. (Pacific Northwest), CIAB reported. Crerar, president and CEO of the commercial brokers’ group. “Last quarter, buyers The survey results confirmed that propgained some advantage as pricing slid across erty pricing fell in most of the country the board and across all regions for most for properties without CAT exposures or lines of business. A relatively calm catastrolosses. However, the Northeast coastal area, phe season, with the exception of the harsh which was hit by record-breaking snowfall winter in the Northeast, helped push comlast winter, did see some tightening and mercial property pricing down in most of slightly higher deductibles for roof damage the country.” caused by ice damning, according to the Crerar said reauthorization of the survey. Terrorism Risk Insurance Act “seemed to Loss experience continued to be a factor settle that market.” in underwriting. While willing to negotiate on pricing, carriers were still looking Q1 2015 Commercial Pricing for good loss histories, broker said. “Good Plentiful capacity continued to dampen accounts being marketed got very compet-

First Quarter 2015 Forth Quarter 2014 Third Quarter 2014 Second Quarter 2014 First Quarter 2014 High (4Q01) Low (3Q07)

10 | INSURANCE JOURNAL-NATIONAL May 4, 2015

itive pricing. Bad accounts got increases,” said a Midwest broker. Demand for commercial insurance remained strong with interest in cyber liability even stronger than than in the last quarter, according to CIAB respondents. Marsh Outlook In its annual U.S. Insurance Market Report 2015 published in February, Marsh said that the U.S. commercial property insurance market is expected to continue to soften into 2015. Barring unforeseen events, clients with non-catastrophe exposed risks should expect competition for their property insurance programs in 2015 with favorable terms and conditions and price decreases typically averaging between 5 percent and 15 percent, depending on the insured’s specifics, according to Marsh. Catastrophe-exposed clients also can expect typical rate decreases in the 10 percent to 15 percent range, depending on their risk profile and concentration of catastrophe prone areas, Marsh predicted. Marsh said the U.S. casualty insurance market also appears poised to soften in 2015, following a stable 2014 in which rates generally edged upward, but the pace of increase slowed, according to the report. Of particular note, 2014 is projected to be the first profitable year for workers’ compensation since 2006, although insurers are still pressing for rate increases.

Small Accounts

Medium Accounts

Large Accounts

Average

-0.5% 1.1% 1.1% 1.2% 3.0% 20.8% -10% (1Q08)

-2.7% -0.9% 0.3% -0.2% 1.6% 31.7% -15.0%

-3.7% -2.2% -1.1% -2.6% -0.1% 33.0% -15.9%

-2.3% -0.7% 0.1% -0.5% 1.5% 28.5% -13.6%

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News & Markets CDI: True Religion Subcontractor Underreported $78M in Payroll

he owners of sewing companies subcontracted by True Religion Brand Jeans were arrested in mid-April on 18 felony counts of workers’ compensation insurance fraud totaling more than $11 million in losses. Sung Hyun Kim, 57, and her sister Caroline Choi, 59, CEOs of Meriko Inc. and SF Apparel Inc., along with their CPA, Jae Kim, 71, allegedly conspired to underreport $78.5 million in payroll to multiple insurers, including the State Compensation Insurance Fund and two insurance companies owned by Berkshire Hathaway. According to California Department of Insurance detectives, sisters Kim and Choi conspired with their CPA to hide tens-ofmillions of dollars in payroll to avoid paying workers’ comp insurance premiums in an “underground economy conspiracy” that led to multi-million dollar premium losses for

several workers’ comp insurers. “The underground economy is not a victimless crime,” California Insurance Commissioner Dave Jones said in a statement. “By underreporting payroll, paying employees under the table and committing workers’ compensation insurance fraud, these employers cheat the system and leave their employees at risk.” The alleged fraud was committed by fabricating payroll records provided to insurance carrier auditors with the help of CPA Jae Kim. State Fund reportedly notified CDI detectives when they discovered payroll reports submitted to them by the companies showed significantly less total payroll

Sung Hyun Kim

Caroline Choi

Jae Kim

than similar reports submitted to the California Employment Development Department. Evidence also revealed many employees were paid under the table through a bank account that was never disclosed to EDD or insurance carriers, the investigation showed. If convicted, Kim faces 28 years in state prison. Her bail was set at $700,000. Choi faces 15 years and her bail was set at $430,000, and Jae Kim faces 22 years and his bail was set at $520,000. Kim and Choi were booked into the Los Angeles County Jail, and Jae Kim was booked into the Men’s Central Jail in Los Angeles. The Los Angeles County District Attorney’s Office is prosecuting this case.

Washington Commissioner Says Hole-in-One Insurance Scammer at it Again

t appears hole-in-one insurance scammer Kevin Kolenda has been at it again, according to detectives in Washington Insurance Commissioner Mike Kreidler’s office. Kolenda was arrested in mid-April in Norwalk, Conn., during a search of his Kevin Kolenda residence. Kreidler’s detectives worked in partnership with the Norwalk Police Department and seized evidence to analyze when they return to Washington. The King County Prosecuting Attorney’s Office charged Kolenda, 57, with attempted first-degree theft and two counts of selling insurance without a license, all felonies, through his golf tournament marketing website, hole-in-won.com. He is being held in Norwalk on $300,000 bail while he awaits a hearing. This is the second time Kreidler has W2 | INSURANCE JOURNAL-WEST May 4, 2015

pursed Kolenda for defrauding Washington tournaments and golfers. In 2012, Kolenda was extradited from Connecticut to Washington to face charges of selling insurance without a license. He pled guilty in 2013 to three felony charges for selling insurance without a license and theft, stemming from his failure to pay hole-in-one awards ranging from $10,000 to $50,000. In 2014, he was sentenced in King County Superior Court to 86 days with credit for time served, and ordered to pay $15,000 restitution. According to the most recent charging documents, Kolenda resumed selling insurance without a license four days after his sentencing and has engaged in selling insurance in Washington at least six times between February 2014 and March 2015.

“This guy just doesn’t get it,” Kreidler said in a statement. “As long as he continues to sell insurance illegally in Washington state, I will continue to pursue him. He needs to leave Washington consumers alone.” Kolenda allegedly has a long history of defrauding people through hole-in-one insurance scams. He’s been in business since 1995 and has reportedly been investigated or prosecuted in Montana, Ohio, Georgia, California, New York, Hawaii, Alabama, Massachusetts, Florida, Connecticut and North Carolina. Kolenda reportedly ignored a 2004 order to cease and desist from selling insurance in Washington without a license and a $125,000 fine levied in 2008 for continuing the practice. www.insurancejournal.com

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People Richard Magrath

Dave Gibson

Lloyd’s of London named Richard Magrath regional director for its Western U.S. region. Magrath will be based in Los Angeles, Calif., with responsibility for market development activities in California, Oregon, Washington, Arizona, New Mexico, Nevada, Colorado, Idaho, Utah, Wyoming, Montana, Alaska and Hawaii. Magrath spent more than 30 years in the global property/casualty sector. Prior to Lloyd’s, he was founder and CEO of Global Legal, a technology company providing analytics services to large companies and the U.S. and London insurance markets. The Western region is one of four established by Lloyd’s in the U.S. in 2010. The Nonprofits Insurance Alliance Group in California has named Dave Gibson vice president of claims. Gibson has more than 30 years of experience in the insurance claims industry, and has held management positions for most of that time with Universal Underwriters Insurance Co., Zurich Direct Markets and Philadelphia Insurance Cos. Gibson joined The Nonprofits Insurance Alliance in 2013 as the director of claims. The Nonprofits Insurance Alliance is comprised of the Alliance of Nonprofits for Insurance, Nonprofits Insurance Alliance of California, National Alliance of Nonprofits for Insurance and Alliance Member Services. The Independent Insurance Agents & Brokers has given Jim Armitage the Woodworth Memorial Award, the highest honor the association bestows on one of its members, during the annual Big “I” legislative conference. Armitage is vice president of Arroyo Insurance in Arcadia, Calif. The award recognizes the meritorious and outstanding contributions of an independent agent or broker to the national association, to his or her Big “I” colleagues and to the insurance industry. The award was established in 1925 in memory of C.H. Woodworth of Buffalo, N.Y., the second president of the association. IFG Cos. has named Andrew P. Kempen senior vice president and chief pricing actuary. Kempen joins IFG’s corporate actuarial department and will be based in Denver, Colo. He has more than 14 years of insurance-related actuarial experience in pricing, modeling and reserving. Kempen began his actuarial career at Milliman as an actuarial analyst. After Milliman he worked for ING Group. Others

W4 | INSURANCE JOURNAL-WEST May 4, 2015

he has worked for include USAA, with General Electric’s warranty services business and Argo Group International Holdings Ltd. in its excess and surplus lines segment. IFG Cos. provides property/casualty insurance on both a non-admitted basis and an admitted basis. Burns & Wilcox Brokerage has opened a Scottsdale, Ariz., office. and assigned Managing Director Marc Adler to oversee operations, as well as providing expert brokerage services. Adler has more than 25 years of experience, most recently in construction and environmental brokerage at AmWINS in Phoenix. Adler will report to Denis Brady, president of Burns & Wilcox, and direct the development of the broader Scottsdale team. Jennifer Hixson, broker, and Kaylin Williams, broker assistant, have also joined the Scottsdale team. Hixson has more than 15 years of experience in retail and wholesale brokerage, most recently as a broker at U.S. Risk. Burns & Wilcox, which has locations in New York City, San Francisco, North Dallas, Atlanta, Tampa and Scottsdale. RENO, Nev.-based Employers Holdings Inc. has named Lori A. Brown senior vice president and deputy general counsel. Brown is based out of the company’s San Francisco and Walnut Creek, Calif., offices. She is the company’s primary attorney for employment and executive compensation law, is assistant corporate secretary to the holding company and corporate secretary to the company’s subsidiaries. Brown has more than 20 years of experience as an attorney in California. She previously was vice president and deputy general counsel with Employers. Employers is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services. All Risks Ltd. has named Robert Campbell a senior underwriter in California. As a part of the national specialty programs unit, Campbell will be responsible for underwriting large workers’ compensation accounts for the healthcare industry. Campbell has 20 years of experience on the wholesale side of the insurance industry. Most recently, he was vice president of underwriting at Phoenix Risk Management Insurance Services Inc. Hunt Valley, Md.-based All Risks is a national independent wholesale brokerage firm with offices in more than a dozen states. www.insurancejournal.com

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News & Markets California Workersâ&#x20AC;&#x2122; Comp Premium Up 11% in 2014; Combined Ratio Still Exceeds 100

Earthquake Fault Puts California at Risk for Tsunami

alifornia written premium for calendar year 2014 was roughly $16.5 billion, 11 percent above 2013 and 88 percent above the written premium reported for 2009, according to a report from the California Workersâ&#x20AC;&#x2122; Compensation Insurance Rating Bureau on experience through Dec. 31, 2014. The projected industry average charged rate per $100 of payroll for 2014 was $2.93. This was roughly 2 percent above the average rate charged for 2013 and 40 percent above the average rate charged for 2009. However, the average rate charged for 2014 remains roughly 53 percent less than the average rate charged for the second six months of 2003, the report shows. The WCIRB projects total ultimate losses and allocated loss adjustment expense for accident year 2014 to be $12.6 billion. While roughly 4 percent above the projection for accident year 2013 and 27 percent above the projection for accident year 2009, it remains below the highs experienced prior to the

2002 through 2004 reforms, according to the WCIRB. The WCIRB projects a preliminary ultimate accident year combined loss and expense ratio of 103 percent for 2014. Of this, 61 percent is attributable to the indemnity and medical loss ratio and 42 percent is attributable to the loss adjustment and other expense ratio. Like the projected 2014 loss and the allocated loss adjustment expense, this projection is primarily a result of increased premium levels and relatively low claim severity growth in 2014, according to the report. The preliminary calendar year combined loss and expense ratio for 2014 reported by insurers was 105 percent, slightly below the combined ratios for the last several years, but 2014 is the seventh consecutive year with a combined ratio over 100 percent. The WCIRB projects indemnity claim frequency for accident year 2014 to be 1.2 percent above the frequency for 2013.

cientists say the earthquake fault that runs through the coastal city of Ventura, Calif., can produce strong shaking and dangerous tsunamis, prompting state officials to study whether to revise hazard maps. The new research shows the Ventura fault is more dangerous than previously thought, capable of quakes as large as magnitude 8 that could spawn a tsunami that begins in the Santa Barbara Channel and affect coastal communities to the south. A major earthquake on the Ventura fault is estimated to occur every 400 to 2,400 years. The last major quake hit about 800 years ago. Copyright 2015 Associated Press.

FedEx Faces Wyoming Suits After Trucks Kill Nearby Drivers

Restaurants-Taverns-Bars

General Liability - Property - Liquor Liability - Excess

M.J. Hall & Company, Inc.

www.mjhallandcompany.com (209) 948-8108

States Covered: AK, AZ, CA, NV, & HI Surplus Lines Broker - General Agent MJHALLCO16804.indd 1

W6 | INSURANCE JOURNAL-WEST May 4, 2015

License #0488901 4/21/15 1:43 PM

wo lawsuits have been filed against FedEx Ground Package Systems claiming the shipping giant substantially contributed to the deaths of Cheyenne, Wyo., residents. The families of two people who died in a head-on collision on I-80 east of Cheyenne claim FedEx is responsible for the crash. The pair died in November when a FedEx tractor-trailer veered through the median into oncoming traffic, striking their minivan. Both plaintiffs are seeking more than $75,000 in damages. A FedEx spokesman said thoughts and condolences go out to the families. Copyright 2015 Associated Press. www.insurancejournal.com

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years

A Day of Great Mariment! Marisela has her table set and is ready for you to partake in her royal feast! As an underwriter in the San Diego office, she is delighted to present this grand procession of coverages: Commercial Lines • Apartments / Dwelling • Restaurants / Bar • Special Events • Mercantile / Lessor’s Risk • Vacant Property / Builder’s Risk Personal Lines • Seasonal / Secondary Dwelling • Builders Risk - New Construction or Renovation • Homeowners - Deluxe HO-3, HO-4, HO-6, True Wrap Arounds & DICs • Personal Umbrella – Direct Bill - $1-$15 Million Primary Limits • DP-1 / Primary & DP-3 / Special Form Coverage Owner, Tenant or Vacant As noble guests at Mari’s feast, you’ll be dining on wonderful service, fast quote turnaround and ‘A’ rated carriers. It truly is time for you to eat, drink and meet Mari. She’s waiting for you.

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FIGURES

$7.5 Million

The amount of federal grants that two New Jersey towns will share to fund the acquisition and demolition of homes in flood-prone areas. Woodbridge will receive $3.8 million to buy and demolish 98 homes and Manville will receive $3.7 million to remove 108 properties, according to an April 20 announcement by U.S. Sens. Robert Menendez and Cory Booker (D-N.J.)

DECLARATIONS

210,000

The number of gallons of heavy crude oil that was spilled in a breach of Exxon Mobil’s Pegasus pipeline in Mayflower, Ark., on March 29, 2013. Now, residents who sued the oil giant over the spill are urging a federal judge in Little Rock, Ark., to vacate his March 2015 order dismissing the class-action lawsuit, claiming Exxon Mobil suppressed evidence in the case. The lawsuit had been filed on behalf of landowners whose property was physically crossed by the pipeline.

Fatality Numbers

“PennDOT continuously strives to drive down crash and fatality numbers, and we ultimately want to reach zero deaths on our roads.”

— Pennsylvania Department of Transportation (PennDOT) Secretary Leslie S. Richards on the state’s effort to lower traffic deaths. Car crashes killed 1,195 people in Pennsylvania in 2014, according to statistics released in April. That’s the lowest number since recordkeeping began 87 years ago. PennDOT invests $20 million annually for safety education and enforcement efforts.

The Right Thing

“We’re committed to doing the 100 percent right thing, and the best way to do that is to take all of our products off the market until we can be confident that they are all safe.”

$1 Billion The amount in bonds Florida’s Citizens Property Insurance Corp. plans on selling in preparation for the 2015 hurricane season. This would be the first bond sale by the state-run property insurer of last resort in three years. Florida hasn’t been hit by a hurricane since 2005 and forecasters expect this year’s hurricane season to be a mild one.

13 The number of DUI convictions a 67-yearold man accumulated across three states dating back to 1985. He was sentenced in April to five years with the Montana Department of Corrections.

Call of the Wild (Turkey) “There are several people that are suspects that are involved in it, and we would anticipate moving forward with this case.”

83% The percentage of deaths in South Dakota car crashes this year that involved victims who were not wearing seat belts. The S.D. Department of Public Safety says that’s up from about 60 percent in previous years. So far this year there have been 18 deaths reported from car crashes in the state. Of those, 15 of the victims weren’t restrained.

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— Paul Kruse, CEO of Texas-based Blue Bell Creameries, which has issued a voluntary recall for all of its products after two samples of chocolate chip cookie dough ice cream tested positive for listeria. The company had previously issued a partial recall after some of its products were linked to a listeria outbreak that led to three deaths at a Kansas hospital. Five others in Kansas and Texas have been sickened with listeriosis linked to Blue Bell products. The recall is the first in the family-owned creamery’s 108-year history.

— Franklin County Sheriff Pat Melton says those who stole five heavy barrels of Wild Turkey bourbon from a Kentucky warehouse may have taken a lot more liquor than previously thought and the case could result in multiple indictments. So far, one person has been arrested, but several law enforcement agencies are looking for possible accomplices.

Tsunami Information

“It really gives the individual a lot of information about how to survive.”

— Althea Rizzo of the Oregon Office of Emergency Management said a study out in April, which shows roughly 5,500 more people could survive a major tsunami hitting the Pacific Northwest if they just walk a little faster to higher ground, offered the best look yet at how many people might be in the highest-risk tsunami zones. May 4, 2015 INSURANCE JOURNAL-NATIONAL | 11

NATIONAL COVERAGE

Business Moves Insurance of Greater Haverhill Inc. This marks the third location for MTM Insurance. Founded in 2007, MTM Insurance Associates offers personal and business insurance as well as life, disability and long term care insurance. The firm now has offices in North Andover, Billerica and Bradford, Mass., and 27 employees.

AssuredPartners, Platinum Planning AssuredPartners Inc. has completed the acquisition of Platinum Planning (doing business as Walsh Benefits). Terms of the transaction were not disclosed. Walsh Benefits operates in the New Jersey cities of Fair Haven and Cranford under the leadership of Paul Walsh, president, and Maryellen Walsh, co-founder and vice president. The agency is an employee benefits broker specializing in group and voluntary benefit product offerings, including medical, dental and 401(k). Walsh Benefits also provides HR workplace services, such as HR consulting and payroll management. The insurance broker reports revenues of approximately $4.6 million. Headquartered in Lake Mary, Fla., AssuredPartners acquires and invests in insurance brokerage businesses across the U.S. and in London. MTM, Minichiello Insurance MTM Insurance Associates, an independent insurance agency based in North Andover, Mass., announced its acquisition of Minichiello Insurance Agency, an independent agency in Bradford, Mass. Terms of the transaction were not disclosed. Following the transaction, Minichiello Insurance Agency will operate as MTM 12 | INSURANCE JOURNAL-NATIONAL May 4, 2015

Bryn Mawr, Robert J. McAllister Bryn Mawr Bank Corp. in Bryn Mawr, Pa., announced its acquisition of Robert J. McAllister Agency Inc., an independent insurance agency in Rosemont, Pa. Terms of the transaction were not disclosed. Founded in 1962, Robert J. McAllister Agency provides insurance and risk management services for individuals and businesses in the Philadelphia region. The agency will be merged into Bryn Mawr Bank Corp.’s insurance subsidiary, Powers, Craft, Parker and Beard Inc. Patriot National, HSS Fort Lauderdale, Fla.-based workers’ compensation services provider Patriot National Inc. has acquired the assets of Hospitality Supportive Systems (HSS), a Springfield, Pa.-based managing general agent and insurance program administrator to the hospitality industry, and the assets of its claims service affiliate Selective Risk Management. The estimated maximum total purchase price is approximately $13.5 million, or approximately 5.0 times the calendar year 2014 EBITDA of each entity, Patriot National said. Hospitality Supportive Systems (HSS) designs and produces preferred insurance programs for the restaurant, bar and tavern industry nationwide. HSS will become part of TriGen Insurance Solutions, a multi-line specialty brokerage in Boca Raton, Fla. Patriot National said HSS would further expand Patriot’s reach into a broader base of commercial lines.

HSS’s affiliate Selective Risk Management will join Contego Services Group, an affiliate of Patriot National that provides insurance and risk management services. Patriot National CEO Steven M. Mariano said the acquisitions of HSS and Selective Risk Management are consistent with the company’s growth strategy to expand its fee-based product offerings beyond workers’ comp. Patriot National, headquartered in Fort Lauderdale, Fla., is a national provider of outsourcing services within the workers’ comp marketplace for insurance companies, employers, local governments and reinsurance captives. Safety National Casualty, Safety National Re St. Louis, Mo.-based Safety National Casualty Corp. has rebranded its reinsurance platform as Safety National Re. Safety National Re will continue to offer its existing products and solid financial security, which includes over $1.25 billion in surplus as well as Safety National Casualty Corp.’s A+ rating from A.M. Best and Standard & Poor’s. Safety National Casualty Corp. provides alternative risk funding products. Higginbotham A group of five commercial property/ casualty insurance professionals led by broker Mark Conner has joined Higginbotham in Houston. The group specializes in homeowners association (HOA) insurance and loss control, serving hundreds of single family community associations in Texas. The group came from the Houston office of Willis of Texas Inc., where Conner served as vice president for 29 years for both Willis and certain predecessor organizations. In 1987, he created the Texas HOA program for Ace American Insurance Co. His group maintains exclusive access to that coverage. Higginbotham is ranked as one of the largest independent insurance brokers of U.S. business providing property and liability insurance, risk management and employee benefit services to businesses and individuals. www.insurancejournal.com

RISING TO MEET THE DEMANDS OF COMPLEX BROKERAGE. As complex risks become increasingly difficult to place, the demands placed on you continue to rise. Burns & Wilcox Brokerage meets these challenges head-on with expertise, experience and seamless access to global market centers. BurnsAndWilcoxBrokerage.com

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Workers’ compensation insurance is increasingly seen and sold as a commodity product. Many states now require that most employers— even sometimes those with as few as one employee— carry workers’ compensation insurance, and the price of coverage can be comparable among insurers. While the price among policies may be similar, how insurers offer coverage can be very different. For example, some insurance companies may offer coverage features that go beyond standard policy requirements or programs that promote workplace safety. Others do a far better job at managing injured worker care, helping small business owners control claims and premium costs. Given these differences, it makes sense for agents to consider the level of service and extra features provided by each insurer and policy they’re considering. This is a win-win for agents: it helps ensure they’re offering customers the greatest value for their insurance dollar and, in turn, can help them sell more workers’ compensation policies.

WORKERS’ COMPENSATION IS ONLY A COMMODITY IF YOU SELL IT LIKE ONE.

Prepare. Protect. Prevail.

ASK. UNDERSTAND. DELIVER VALUE. Here are three steps that can help agents find the right fit for their small business clients:

1. Agents should seek to understand each employer’s unique culture and what’s important to it when it comes to protecting its business and employees. For example, some small employers may want to demonstrate their commitment to a healthy and safe workforce. Having a workers’ compensation carrier that makes wellness and safety programs available to employees can help them do that.

2. Once they understand the employer, agents should present information about policy features that meet (or address) the business’ culture. That may include focusing on the price—if price is most important—or explaining the various extra features a policy offers. However, business owners should understand that the cheapest policy may end up costing them more money in the long run if it doesn’t provide the necessary protection and services.

3. Finally, agents should reinforce how workers’ compensation coverage can be an investment in the well-being of a small business’ employees and how carriers can help employers control claims costs and improve employee safety.

WHAT BEST-IN-CLASS SMALL BUSINESS COVERAGE LOOKS LIKE. For over a century, The Hartford’s workers’ compensation program has set the standard for value, innovation and injured worker care. Its unique approach to claim management helps control costs and return employees back to work quickly, which could positively impact a customer’s future premiums. Customers of The Hartford also have access to valuable, cost-saving programs that help promote workplace safety and employee wellness. These programs include:

Shoes for Crews®, which offers a 15 – 25 percent discount on slip-resistant footwear, ideal for industries where slips, trips and falls are common The Naturally Slim Program®, a weight-loss and health improvement program aimed at reducing obesity-related diseases, such as heart disease and diabetes, offered at a volume-based discount Herman Miller®, which provides customers special pricing on high-quality ergonomic office furniture

With more than one million small business customers, The Hartford can help agents offer a workers’ compensation policy and services that meet their customers’ needs and help grow their business.

Visit THEHARTFORD.COM/WC to learn more and see why our customers give us 4.8 out of 5 stars for their claims rating.

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Herman Miller® is a registered trademark of Herman Miller, Inc. Workers’ compensation insurance is underwritten by Hartford Fire Insurance Company (CA license #7278) and its property and casualty affiliates. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Twin City Fire Insurance Company, Hartford Accident and Indemnity Company, Hartford Fire Insurance Company, Hartford Insurance Company of the Midwest and Trumbull Insurance Company. The Hartford does not offer or provide the Shoes for Crews, Naturally Slim and Herman Miller products and cannot make any claims or promises that use of those products or services will result in lower workers’ compensation losses. All such products and services are provided by either Shoes for Crews, Naturally Slim or Herman Miller. Certain coverages and features may vary and may not be available in all states. Applicants are individually underwritten and some may not qualify. © 2015 The Hartford Financial Services Group, Inc. All Rights Reserved.

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NATIONAL COVERAGE

News & Markets Independent Agents Identify Business Opportunities for Carriers

ost independent insurance agents are impressed by the carriers they place business with — but most also are interested in adding new company partners. This is one of the preliminary findings of a recent national survey of independent agents conducted by Channel Harvest Research. The study, “Agents and Carriers Find Opportunity in Relationships,” is the seventh in a series examining agents’ views on property/casualty carriers as well as marketplace issues. Some 2,200 agents provided their opinions for the survey, which was sponsored by Insurance Journal. Carrier Ratings & Revenue Growth Fully 82 percent of independent agents are either “extremely satisfied” or “very satisfied” with their top personal lines carriers, the company with which they place the largest amount of personal lines business; 73 percent of agents feel the same way about their top commercial lines carrier. Despite these high numbers from agents as a whole, certain subgroups of agents are

much less impressed by their top carriers, the Channel Harvest report outlines. While the survey is anonymous, the collective characteristics and opinions of subgroups of agents may be strong targets for carrier-to-agent marketing because they’re most likely to defect from incumbent companies to new ones. Most agents also give their top carriers high ratings on a variety of specific carrier attributes. Agents give both their top personal lines company and their top commercial lines carrier the highest marks on “financial strength” and the lowest on “social media support.” The Channel Harvest report compares the carrier attribute ratings to how important agents say each attribute is. By making that comparison, the report identifies which attributes companies should emphasize in their communications to agents. Sixty-nine percent of independent agents report that their firm’s revenue was higher in 2014 than in 2013. Some 15 percent say their revenue was about the same, and 9

Change in Revenue During 2013-2014 Don’t Know Decrease of 5%+

Decrease of under 5%

3% 6% 15%

50%

Stayed the Same

Increase of 5%+

19% Increase of under 5% 16 | INSURANCE JOURNAL-NATIONAL May 4, 2015

percent report that their revenue shrunk. For this year, one way that agents hope to grow their business is by adding new carriers: 74 percent of independent agents are interested in adding new carriers, a number which includes 32 percent of agents who are “very interested.” That number is higher among certain subgroups of agents — again, collective characteristics and opinions that the Channel Harvest report identifies and that generally are likely targets for carriers seeking new agency partners. On the other hand, agents say they aren’t interested in growing their business by adding new products: only one in five agents are “very interested” or “somewhat interested” in adding any of 10 products listed in the survey — various types of insurance, financial planning, retirement planning, etc. — to their current offerings. Aggregation Most respondents (73 percent) work for a firm that does not belong to an agency aggregator, such as a cluster or network of agencies. And 94 percent of those agents who do not belong to an aggregator say they are unlikely to join one in the next year. Conversely, 27 percent of respondents work for an agency that does belong to an aggregator. And 87 percent of those agents say they are unlikely to leave the aggregator. Niche Marketing The survey explored whether agents are interested in targeting any of several “niches” or market segments. Professionals and millennials are the niches that the greatest number of agents are interested in targeting. The niches that attract the least interest are African-Americans and the Hispanics/Latino market. Agents’ views on niche marketing — and on various other issues — will be outlined in greater detail in the report and accompanying raw data, which will be available in May. For more information, contact John Campbell, principal at Channel Harvest at john@channelharvest.com. www.insurancejournal.com

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Tokio Marine Specialty Insurance Company, a member of the Tokio Marine Group, is an authorized Excess and Surplus lines insurance carrier in all states and D.C. Tokio Marine Specialty Insurance Company is not licensed or admitted in any jurisdiction except Delaware where it is a domestic insurer licensed to write surplus lines. Surplus lines companies do not participate in state guaranty funds in any jurisdiction, except New Jersey, and thus, surplus lines insureds are not protected by those funds. © 2014 Tokio Marine Specialty Insurance Company, All Rights Reserved

NATIONAL COVERAGE

News & Markets What Agents Think About Google Compare By Andrea Wells

he independent agency system is no stranger to competition. But one new competitor in the marketplace has some agents and industry experts on watch. Google Compare — which stepped into the insurance ring in March — is nothing more than another auto insurance comparison website that misleads consumers, according to Bill Wilson, director of the Virtual University at the Big “I” (Independent Insurance Agents & Brokers of America). There have been countless comparison auto insurance sites to hit the market during the past 10 years but the difference now is in the Google name, he says. And with that name comes financial power. Wilson says that because Google Compare isn’t anything new most independent agents aren’t overly concerned but they probably should be. “I think most agents aren’t overly concerned, because this isn’t anything new,” Wilson says. “What Google is doing has been done for at least 10 to 20 years now.” Today there are many different types of comparative rating websites for insurance — ranging from the most common like Progressive Direct, GEICO and Esurance to others like Nerd Wallet, Quote Wizard, Bank Rate, carinsurancecomparison.com, and on and on, he says. What worries Wilson the most is not the threat that these sites pose to independent agents but instead the risk consumers will face buying their insurance without the professional advice of an agent. “The big loser in all this is not agents or insurers or anyone else, it’s consumers, Web Resource To listen to the full podcast interview with Bill Wilson, director of the Virtual University for the Independent Insurance Agents & Brokers of America, visit: http://www.insurancejournal.tv/ videos/12131/ 18 | INSURANCE JOURNAL-NATIONAL May 4, 2015

because they’re being duped into believing market of the vast majority of our memthat all of these policies and the service bers,” he said. “These kind of people are providers are exactly the same — that the gone if they can find something $50 cheaper only difference is price,” Wilson says. elsewhere.” While Google Compare only deals in Losing those customers to Google comparing auto insurance products, many Compare or others doesn’t really matter other sites currently on the market also much to most independent agents, Wilson delve into homeowners said. He doesn’t even insurance. believe Google will ‘We’re not selling CDs Some websites go as where it doesn’t really have much effect on far as touting a homeagent matter whether you buy it independent owners quote in just market share — or at from Amazon or Best Buy least he hopes that it two minutes, Wilson says. won’t. He expects the or whatever.’ “It just doesn’t make captive agency distribua lot of sense to me,” he says. “How can you tion channel to take the biggest hit. really help a consumer identify their expo “When you look at the market share sures to loss and match it with the right report that we produce annually and go customized product for those exposures” in back, say, over the last 20 years, back to the two minutes? he asked. early days of the Internet when some of these websites really first got started. The ‘Not Their Market’ segment that has been affected the most by Wilson says that while there’s a segment direct sales — both TV and Internet — is of the auto insurance market that doesn’t the captive agency channel. They’ve gone care where they buy coverage — as long as from something like almost 60 percent of it’s the cheapest price — that’s not the type the auto marketplace to just below 50 perof consumer generally targeted by the Big cent during that period of time.” “I” membership. Independent agents have lost some mar “In fact, ‘auto insurance only’ isn’t the continued on page 27 www.insurancejournal.com

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SPOTLIGHT

10 Things to Know About Recreation & Leisure Children ages 5 to 14 accounted for 52 percent of the football injuries treated in emergency rooms in 2012. — National Safety Council

There were 13,043 ATV-related fatalities reported occurring between 1982 and 2013. — Consumer Product Safety Commission

In 2013, the Coast Guard counted 4,062 accidents involving 560 deaths, 2,620 injuries and roughly $39 million dollars of damage to property due to recreational boating accidents. — U.S. Coast Guard

726 bicyclists were killed and 49,000 were injured in motor vehicle traffic crashes in 2012. — National Highway Safety Traffic Administration

Roughly 13,000 golf cart-related accidents require emergency room visits each year. — Consumer Product Safety Commission

The 2013 fatality rate was 4.7 deaths per 100,000 registered recreational boats, a 13 percent drop from 2012’s rate of 5.4 deaths per 100,000 registered recreational vessels. Operator inattention, improper lookout, operator inexperience, excessive speed and machinery failure were the top five primary contributing factors in accidents. Alcohol use is the No. 1 known contributing factor in fatal boating accidents contributing to 16 percent of deaths. — U.S. Coast Guard

During the 10 years ending in 2012, about 41.5 people died skiing or snowboarding per year on average. — National Ski Areas Association

There were an estimated 113,272 injuries treated in the emergency room associated with inflatable amusements between 2003 and 2013, and more than 90 percent of those injuries were associated with moon bounces. — Consumer Product Safety Commission 20 | INSURANCE JOURNAL-NATIONAL May 4, 2015

The number of participants in high school football reached 1,088,158 between 2012 and 2013. By comparison 1,053,611 competed in outdoor track and field, 971,796 competed in basketball and 782,514 competed in soccer. — 2012-13 High School Athletics Participation Survey from the National Federation of State High School Associations

It’s estimated that in 2012 there were 89,000 unintentional injury-related deaths in the home and community. — National Safety Council www.insurancejournal.com

SPECIAL REPORT

Workers’ Compensation

Grand Bargain Taking Jabs from Multiple Directions By Andrew Simpson

he state-based workers’ compensation system has stayed on its feet for 100 years in part by being able to defend itself against blows and then counterpunch when necessary. It has shown an ability to reform to fit the economy and workplace while largely upholding its “grand bargain” of no-fault care for injured workers. Workers’ compensation’s resilience and its grand bargain are being tested these days. The system is facing jabs every which way it turns. The critics say the system today favors employers over employees, falls short in delivering the medical and wage loss benefits that injured workers and their families need, treats

‘While the vast majority of injured workers need only minor medical care and experience little friction in getting it, the changes often affect those who need the system the most.’

fewer and fewer workers, transfers costs to health insurers and taxpayers, and exacerbates economic inequality. Others say it no longer sufficiently protects employers from lawsuits, doesn’t return enough workers to jobs and costs too much. It even stifles innovation such as ridesharing. Through the media, courts and legislation, critics are questioning medical and wage benefit levels, challenging the “exclusive remedy” doctrine, raising issues of constitutionality and calling for states to allow employers to opt-out of the system and create their own. One year ago, the industry gave its own status report. “We are finally starting to see an industry in balance with these results,” said Steve Klingel, president and CEO of the National Council on Compensation Insurance (NCCI), reporting on the state of the industry at NCCI’s annual symposium. “Today, industry costs are largely contained, claims frequency continues to decline and the system in most states is operating efficiently. In short, the market is operating as it should on behalf of most stakeholders.” The challenge now may entail listening to and convincing the remaining skeptical stakeholders and critics that the system is indeed in balance and that the grand bargain remains a good deal for workers and employers. Benefit Cuts, Cost Shifting In March, a ProPublica/National Public Radio report, “The Demolition of Workers’ Compensation,” cast a critical spotlight on workers’ compensation. The report claims that the system is failing injured workers who need it the most as a result of legislative changes that have favored cost cutting in more than 30 states. The report highlights case histories of several injured workers. It also includes a comparison of benefits provided by states. The ProPublica/NPR authors acknowledge that the system works for most injured workers, but they focus their attention on underserved injured workers and the effects of recent changes on them. www.insurancejournal.com

“While the vast majority of injured workers need only minor medical care and experience little friction in getting it, the changes often affect those who need the system the most,” the authors, Michael Grabell of ProPublica, and Howard Berkes of NPR, wrote. “The Demolition of Workers’ Compensation” claims that years of benefit cuts and tighter limits on medical care have resulted in “hundreds of thousands of injured workers” being denied adequate care and compensation. The costs to support these workers are being shifted onto taxpayers, with the government picking up a tab of $30 billion through Social Security Disability Insurance, Medicare and Medicaid, according to the report. Meanwhile employers are paying the lowest premiums since the 1970s, the report says. The public radio report caught the attention of industry leaders, including the head of the Workers’ Compensation Research Institute (WCRI). “It’s hard to write a balanced article based on anecdotes,” said Richard Victor, referring to the ProPublica/NPR stories of injured workers who did not receive adequate treatment or compensation and are featured in the investigative report. Victor, who has been researching workers’ compensation for more than 30 years as executive director at WCRI, said he was not suggesting that the injured workers are not important. “We should always strive to minimize the number of workers who fall through the cracks,” he said. But the public radio articles do not prove the system is failing and, Victor said, they should be considered along with reports that show that the system serves a “huge number of injured workers.” “Are the anecdotes the exception or the rule?” he asked, suggesting the only way to answer is through measuring because nobody can tell. According to Victor, 100 percent satisfaction, while important as a goal, is not realistic in such a large economy, “although that might sound cold-hearted.”

Victor said that workers’ compensation tends to go in cycles of crisis and reform. While recent reforms are focused on cost and competitiveness, future changes might address benefits and worker issues. The ProPublica/NPR report focused on states reducing benefits but Victor said some states have also been increasing benefits. Hyperbole Robert Hartwig, president of the Insurance Information Institute, was more outspoken in his criticism of the ProPublica/ NPR report in a letter to the WCRI. “The very title of the ProPublica/NPR [report] is at best misleading and at worst erroneous,” Hartwig wrote, characterizing the reference to “demolition” of the comp system as “hyperbole of the highest order.” “The fact of the matter is that workers’ compensation insurers today provide some $40 billion in benefits annually to hundreds of thousands of injured workers and to the families of those killed on the job — a basic and important fact that is somehow omitted by the authors. Also omitted from the piece is the indisputable fact that the workplace has become safer — much safer — in no small part due to the relentless loss control efforts of insurers and employers in partnership with state and federal government,” Hartwig wrote. According to Hartwig, the incidence rate of fatal occupational injuries plunged by 36 percent over the past two decades thanks in great measure to “incentives that insurers and workers’ comp systems have in place.” He also challenged the ProPublica/ NPR assertion that businesses and insurers pushed benefit reforms “on the false pretense” that costs were out of control. They were indeed out of control “by any reasonable standard,” according to Hartwig. Between 1991 and 2009, the average annual increase in the medical costs of a workers’ comp claim was 7.7 percent, he said, citing NCCI figures for claims severe enough to cause injured employees to miss work. That was nearly twice the 3.9 percent increase in healthcare costs in general, he said. continued on page 24 May 4, 2015 INSURANCE JOURNAL-NATIONAL | 23

SPECIAL REPORT

Workers’ Compensation

continued from page 23 In a counterpunch to Hartwig, the ProPublica/NPR authors said they do not dispute that the workplace has become safer but stressed that the focus of their series “was on how changes in workers’ comp laws have affected people who are injured on the job.” They did not challenge that insurers have contributed to workplace safety, but said the decline in fatalities and injuries has “multiple causes,” including the Occupational Safety and Health Administration (OSHA), improvements in auto safety and health research, the growth in automation and a changing economy which has reduced jobs in dangerous manufacturing and mining industries. They said that the workers’ comp data that the Insurance Information Institute cites deals only with the most severe injuries that “cause an injured employee to miss work” and maintained that this is very different from the data in its report. Also, ProPublica/NPR said that while workplace injuries have indeed fallen, the frequency of claims is only one factor that goes into workers’ comp premiums. Other important components include healthcare costs, the length of injury, benefit payments, overhead expenses and the rise and fall of insurance industry investments. “Our point wasn’t that rates shouldn’t be going down, but that ‘despite the drumbeat of complaints’ in state legislatures, the cost of workers’ comp is at a historic low and is a relatively minor part of employee compensation,” they said in reply.

injured workers to receive the full benefits” and that employers provide only a small fraction of the overall financial cost of workplace injuries and illnesses through workers’ compensation. According to OSHA, workers’ compensation payments cover only about 21 percent of lost wages and medical costs of work injuries and illnesses. Workers, their families and their private health insurance pay for nearly 63 percent of these costs, with taxpayers shouldering the rest. Also, several studies have found that fewer than 40 percent of eligible workers apply for any workers’ compensation benefits at all, according to OSHA.

‘Race to Bottom’ The ProPublica/NPR authors also found that many states no longer comply with the standards recommended in 1972 by a national commission established by President Richard Nixon to improve the workers’ compensation system. John Burton, a Republican economist and law professor who headed that commission, told ProPublica/NPR that recent changes are “unprecedented” in the history of workers’ compensation. “I think we’re in a pretty vicious period right now of racing to the bottom,” Burton said. The notion that states are in a “race to the bottom” was echoed by attorney Charles Davoli from the Workers Injury Law and Advocacy Group, which represents disabled workers. Davoli said the system may be in a transition to a civil liability system because the Shrinking Coverage interests of employers and employees are no One day after the ProPublica/NPR article longer balanced. hit the airwaves, OSHA issued a report that “It’s nice to talk about how we compare agrees with much of the criticisms and in to the median but what is the standard, some ways goes further. The OSHA report what is an adequate benefit?” he asked. “If says that changes in workers’ compensawe don’t answer that, we are continuing a tion have made it “increasingly difficult for race to the bottom.” Workers’ compenSeveral studies have found sation is often called that fewer than 40 percent a “grand bargain,” which employers of eligible workers apply in agree to provide a safe for any workers’ workplace and cover compensation benefits at all. any workplace injuries 24 | INSURANCE JOURNAL-NATIONAL May 4, 2015

in exchange for employees giving up their constitutional right to sue their employers over injuries. Workers’ compensation is supposed to be the exclusive remedy for injured workers. Davoli, who also calls workers’ compensation a “moral commitment,” warned that the grand bargain may have been breached and a “constitutional tipping point” reached. He pointed to court cases in several states challenging the fairness of the current system, including one in Florida that argues that the current system violates due process because the care and compensation that injured workers now get are inadequate to justify them giving up their constitutional rights to a trial by jury. “How low can you go to where you breach the grand bargain?” Davoli asked. Exclusive Remedy Mark Walls, a vice president at Safety National, at a recent Advisen Casualty Insights conference, said there has long been a “push-pull in the system” with the plaintiffs’ bar constantly looking for ways to get around the exclusive remedy provided by workers’ comp Now the lawyers may be getting some help from judges in Florida and Oklahoma. In Florida’s Padgett case, in 2014, the 11th Circuit Court judge ruled that the workers’ comp statutes in the state of Florida were unconstitutional on their face because they no longer provided the grand bargain to the injured worker. The plaintiffs’ representatives and ultimately the judge pointed to “the fact that in the last 10 or 15 years, there have been a number of bills passed in the state of Florida that reduced benefits, increased thresholds for compensability — things that they felt tipped the scales from being balanced against the injured worker,” Walls said. Walls believes the Padgett case may not be legitimate. “There was a lot of reaction to this but I would temper with the fact that this was a set-up,” Walls told the Advisen audience. “They found a judge in Miami-Dade Florida. They found the right case. They didn’t even www.insurancejournal.com

put the state attorney general’s office on notice about the hearing,” he said, explaining why the AG’s office did not defend the workers’ comp law. Intentional Acts In Oklahoma, of particular concern is the ruling of a district court judge referring to language of the 2013 reform law eliminating “foreseeable injuries” from workers’ comp coverage. “The intent of that was focused on eliminating degenerative conditions and repetitive issues.” But the judge in a back strain case for a tire shop worker said that “given the type of work, they knew this was a foreseeable injury and therefore it’s out of the workers’ comp statute,” paving the way for the worker to sue for negligence, according to Walls. “When you think of that, what percent of workers’ comp claims would be foreseeable under that definition,” Walls asked rhetorically. “Most of them,” he answered. Walls says the judge “is completely misinterpreting the statute [and] the legislative intent” of the reforms. He said similar situations could arise in other states in the wake of the ProPublica/ NPR series of articles. Speculating about another avenue for litigation that might surface in the near future, Walls noted that every state allows injured workers and plaintiffs lawyers to get around exclusive remedy by alleging that an injury was the result of an intentional act. In general, it has been “very difficult to prove intentional act,” but OSHA could make this easier, Walls suggested, citing a proposal for an online database to give the general public access to employers’ injury histories. “There’s fear that this is going to lead to increased penalties from OSHA because instead of just walking into one factory or one store and looking at that record, they’ll be able to look at the records across your entire enterprise at a glance and see that you’ve got 10 different injuries on this machine at your 20 different plants,” he said. “Suddenly you’ve got not just a regular www.insurancejournal.com

violation. You’ve got a willful violation.” He noted that there is not insurance coverage for intentional acts causing injury to workers. “It is public policy that there’s no coverage, and in many state statutes it flatout says you cannot get coverage for intentional acts,” he said. “If we start to see this litigation around ‘intentional act,’ it’s really a scary proposition for employers.” Opt-Out Davoli and other critics have questioned the growing movement to allow employers to opt-out of state workers’ compensation systems and establish their own systems. At the forefront of this movement is the Austin, Texas-based Association for Responsible Alternatives to Workers’ Compensation, or ARAWC, which supports expansion of alternatives to state workers’ compensation systems such as the nonsubscriber system in Texas and the recently enacted Oklahoma option, to other states. ARAWC Communications Director Brent Buchanan said the group wants to work state-by-state with stakeholders to come up with a workers’ comp alternative that works best, one state at a time. Association members include Nordstrom, Best Buy, Lowe’s, Walmart, Safeway, J.B. Hunt and Sysco Food Services — large companies that are nonsubscribers in Texas and are interested in the alternative now available in Oklahoma. Such companies would like to have options in every state in which they operate, said ARAWC Executive Director Richard Evans. Members also include insurance-related entities including broker AMWINS and Great American Insurance, as well as service providers Partner Source and Sedgwick. Nonsubscriber companies “will set up their occupational injury benefit plan under the federal ERISA laws, like their health insurance plan. It’s an employee welfare plan and it’s regulated under federal law. That’s typical,” though not the case with every employer, Evans said. They work with service providers, such as insurance companies, third party administrators and medical claims management

companies for help in administering their programs, Evans said. “It’s a lot like a health insurance program except it’s targeted for occupational injury benefit,” he said. The nonsubscription approach has been available in Texas for more than 100 years. There is no requirement in Texas that workers’ comp benefits be provided to employees, but employers that opt out of the workers’ comp system, “don’t get the exclusive remedy that you do when you’re in the system. So there’s negligence liability for employers in Texas that elect to be a nonsubscriber,” Evans said. The situation in Oklahoma is somewhat different. In that state, employers are still required to provide benefits either under the workers’ comp system or an alternative, and exclusive remedy applies to all employers. Oklahoma’s alternative option went into effect this year and the law was passed before ARAWC was formed, “but we’re watching how that program rolls out so that we can learn from that and take those lessons and apply them to the future states,” Evans said. With state workers’ compensation systems dealing with so many challenges, an audience member at the Advisen conference asked whether a federal workers’ comp scheme might be better. That would be a change, but it wouldn’t necessarily be an improvement, Walls said, referring to the federal government’s track record with other entitlement programs. “If we could look at the federal government and say, ‘Man, Medicare kicks butt’ and ‘Social Security disability is great’ and ‘the VA is just a model of medical expertise,’ then that might make sense,” he said. Susanne Sclafane, senior editor of CarrierManagement.com, contributed to this report.

May 4, 2015 INSURANCE JOURNAL-NATIONAL | 25

CLOSER LOOK

Restaurants & Bars

E&O Insights: Insuring Restaurants and Taverns Presents Some Real E&O Risks

lthough most agencies insure at least one restaurant or tavern, this shouldn’t suggest that they are easy accounts to write. Errors and omissions (E&O) carriers will readily admit that writing this class of business presents some challenges. Moreover, these challenges have significant potential to generate E&O claims. One thing for certain is By Curtis M. Pearsall that these risks have their share of losses and, when there are losses, there is a greater chance that some of those losses are not insured. The No. 1 common thread of E&O claims is that what’s not covered will typically cause the E&O claim. Know Your Risk When looking to insure a restaurant or tavern, it is vital to understand that these 26 | INSURANCE JOURNAL-NATIONAL May 4, 2015

risks potentially have some unique exposures that must be properly addressed. A few questions and issues to consider include: • Do they do catering? • What vehicles are used to deliver the products? • Are the building or contents constructed of unique materials? To understand the various common and potentially unique issues, an appropriate place to start is through accessing the information contained within one of the industry’s many exposure analysis checklists. These checklists will provide solid information and insight, including a questionnaire detailing the pertinent questions to ask by line of business. The time spent “doing some homework” in advance of the sales call will help make the call more productive and help you understand the exposures more clearly.

The carriers you access will vary based on the type of risk. For more upscale and family-oriented risks, you probably will deal with the admitted marketplace. Because of the specialization of these risks, deal with a company that includes this as one of its specialties and has demonstrated solid expertise. There is a good chance that its product offering may be more comprehensive and include a host of quality options. With some risks, the excess and surplus lines (E&S) market may be your only choice. For many years, this segment of the industry has written a significant amount of this business. The “danger” with the E&S market is there will be additional exclusions or limitations on the coverages offered. For example, many E&O claims have focused on the lack of assault and battery coverage, which will probably be available in the standard market. Another common issue involves liquor liability coverage. If the account sells liquor, www.insurancejournal.com

continued from page 18

the owner must have a liquor liability exposure. There have been many claims where the restaurant/tavern owner thought that his or her liability insurance included the liquor liability exposure. Agents should bring this matter to the business owner’s attention and emphasize the need for liquor liability insurance. It is best to provide a proposal, thereby forcing the customer to decide if he or she wants to insure that part of the exposure. These types of conversations should be documented not only in the agency file, but also through written communication with the client to ensure there is no misunderstanding. Losses Do Occur As mentioned above, these types of risks have losses and, as noted by the following E&O claim, when these losses become excessive, a non-renewal occurs. The restaurant owner approached agency “X” in 2010 after the account was non-renewed by its prior carrier due to loss history. Agency “X” placed coverage for the restaurant for 2010-2011 and 2011-2012, until that carrier non-renewed due to loss history. For the 2012-2013 policy year, agency “X” completed an online application, but failed to indicate the restaurant had been pre-

When looking to insure a restaurant or tavern, it is vital to understand that these risks potentially have some unique exposures that must be properly addressed. viously non-renewed for loss history. The agency also failed to provide accurate loss history information, misstated the age of the building which housed the restaurant, and incorrectly stated the frequency with which the restaurant cleaned its hood, duct and flue systems. The 2012-2013 policy was bound and the restaurant subsequently filed six separate claims before the policy was cancelled in March 2013. The six claims involved wind damage, two thefts, property damage, vanwww.insurancejournal.com

dalism, and a fire loss which essentially put the restaurant out of business. The carrier paid the claims, totaling $1.9 million, and is pursuing litigation against agency “X” on the theory that it would not have written the coverage for the restaurant had the insured agent accurately completed the application and advised the carrier of the restaurant’s loss and non-renewal history. Misleading a carrier to get the account written certainly backfired for agency “X.” Other Key Issues If you need to insure the risk in the E&S market, review the proposal from the wholesaler to identify how well it matches the coverage requested. It is highly suggested to get a specimen copy of the policy, too. Agents should also understand that they do not have binding authority when writing business in the E&S market, so ample time should be factored in to get the account bound in a timely manner. If the risk is already insured in the E&S market, review the renewal proposal for any changes, comparing it with the expiring coverage. Since the E&S market is not required to issue conditional renewal notices advising the agency of changes, changes in the coverage could occur without your knowledge. As a result, you need to identify any differences between the expiring policy and the proposed renewal terms, and then bring any reductions to your client’s attention. It is highly recommended that you get the client’s approval in writing acknowledging these changes. While restaurants and taverns are not difficult risks to write, they are not easy ones either. Like any other risk, they require knowledge, expertise and the necessary level of documentation. By doing the necessary homework, there is a greater chance of writing the account while, at the same time, reducing your E&O exposure. Pearsall is president of Pearsall Associates Inc., a risk management consulting firm. He is also a special consultant to the Utica National Agents E&O program. Phone: 315-768- 1534. Email: curtis@ pearsallassociates.com. Blog: www.agentseotips. com.

ket share, but in Wilson’s opinion, what’s been lost in auto market share were customers that independents just didn’t want. “They just let it go.” Wilson admits that Google being Google will draw the attention of some consumers. “Needless to say, since it’s the predominant search engine, depending on how Google markets Google Compare, if you’re searching for something that has the word ‘auto’ or ‘car’ in it, there on the search results, the Google Compare website may show up over and over again. It may drive traffic but I don’t know that it’ll drive additional people to that marketing channel.” Education Wilson says a large part of competing against Google Compare and other new industry players resides in education — delivering education on the value that independent agents bring to the insurance transaction. “It is an educational process and it’s something I’m going to hopefully spend a lot of my time in the next year or longer on starting within our own industry and then moving ultimately to consumers,” Wilson said. “We’re not selling CDs where it doesn’t really matter whether you buy it from Amazon or Best Buy or whatever.” Insurance policies are complex legal contracts, he said, and that’s the first thing that the industry has to get people to understand. For decades agents have been helping consumers identify critical loss exposures and doing their best to make sure those exposures are properly insured. That’s the message that the industry needs to reinforce to consumers, he said. Probably the most important service that independent agents provide is a high-level of claim advocacy. “I spend a lot of my time, almost every day, helping agents who have consumers who have had a claim and either the claim has been denied or not completely covered and the agent feels that the denial is incorrect,” Wilson said. “That’s not something you’re going to get from an online vendor. ... With an independent agent, you’re going to have someone going to bat for you, particularly at claim time,” he said. May 4, 2015 INSURANCE JOURNAL-NATIONAL | 27

IDEA EXCHANGE

Tech Talk The Risk of Data Breach in Agencies Today By Tom Wetzel

ata breaches pose a serious threat to agents even though incidents involving large companies such as Target and Sony produce all the headlines. All agencies are vulnerable to breaches, no matter what their size, location or specialties. Yet there are simple steps agents can take to mitigate the risks to their business and those of their clients. Well-known insurance technology expert Steve Anderson believes that the number of agents who have experienced a reported breach may be low, but he still has concerns. “Of more concern are agents who may have had a breach and don’t know it,” Anderson says. “There’s no question that the numbers and the risks are going up because of the automated programs that probe for vulnerability.” According to Anderson, the biggest threat to agents is employees who allow phishing attacks which use false emails that contain viruses. Jay Shelton, Assurance’s senior vice president of risk management services, agrees that the most common breaches involve employees stealing information or phishing attacks. Shelton says agents should also recognize that their exposure is tied to the risks faced by clients. Higher risks are usually associated with data-rich industries such as health care.

28 | INSURANCE JOURNAL-NATIONAL May 4, 2015

rity but once the hacker is in they can’t get out, Shelton says. “Either way, every agency needs to have a good breach response program in place and to know what their exposures are and how they will respond.” The nature of hacks is changing, Shelton says. Small businesses can be vulnerable to “ransomware,” in which a code locks up computer files and a ransom demand is made to free them. “What scares me are hacks that are ideologically moti Physical breaches ‘Of more concern vated,” Shelton says. “In cases can include exposure of are agents who like this, the motivation is not agency data through loss That suggests a different may have had a money. of mobile devices that level of exposure, such as edubreach and don’t cational institutions that might are not properly password protected, a client know it.’ have enemies and that maintain viewing an employee’s open-source platforms.” desktop when they step away, papers left Risk mitigation must include maintaining unattended on a desk, or the theft of a servup-to-date firewalls, antivirus and malware er or computer from the office. Electronic software detection programs, and comprebreaches include hacking into an agency hensive cyber liability, the experts say. server or data stored in the cloud, and the Some other steps to consider include: risk of sending unprotected email with per • Appointing a staff member to coorsonal information. dinate, log and maintain a list of mobile The first line of defense is education, devices in the field. Anderson says. “Agency staff needs training • Adhering to state regulation regarding to understand and recognize the exposures personal information and data breach. they face,” he says. For example, if the agen • Locating the server behind a protected cy scans checks or takes credit card paydoor or wall in a separate area of the office. ments, does the agency need to retain that • Creating a staff policy for no files and information? “Because if it’s breached, that paperwork on desks in reach of client. presents a problem.” • Installing automatic screen savers on all Shelton says the best way to fight breachdesks that begin in one minute and then a es is to take one of two approaches. “One password must be entered to log back on. approach is to establish a protective perim • Using transport layer security, or a eter which seeks third-party vendor or program when sendto block hacking ing emails that contain personal informain the first place,” tion. he says. The other • Requiring remote access authentication approach “is the roach and validation. motel strategy in which we assume there will be hacking.” As Longtime insurance communicator Tom Wetzel a consequence, the most sensitive heads his own insurance marketing firm. Email: material enjoys a higher level of secutwetzel@wetzelandassociates.com www.insurancejournal.com

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Medical Directors-Professional Liability Market Detail: Arlington/Roe & Co. (www.arlingtonroe.com) offers medical directors’ professional liability for directors of health care facilities. Nursing home directors will be required to show evidence of insurance for the nursing home. Call Arlington/Roe to inquire about particular states offered. Available limits: Minimum $2 million, maximum $4 million Carrier: Various, non-admitted States: All states Contact: Jim Eades at 800-878-9891, ext. 8626 or e-mail: jreades@ arlingtonroe.com

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Service Contract Reimbursement Market Detail: Personal Safeguards Group’s (www.personalsafeguardsgroup.com) licensed principal helps clients obtain a service contract reimbursement insurance policy (SCRIP) for service contract poroviders. Addresses regulatory and compliance financial backing requirements. Service contracts available for (extended warranty) for auto, RV, powersports, marine, appliances, electronics, jewelry, fitness. Available limits: Minimum $100,000, maximum $250,000 Carrier: Unable to disclose, admitted States: All states except D.C., Hawaii, N.H., R.I., and Vt.Contact: Michael Frosch at 847-275-8497 or e-mail:mike@personalsafeguards. com

Truckers/Trucking Firms Market Detail: Interline Insurance Services Inc. (www.interlineinsurance.com) offers clients in-house claims adjusting, loss prevention services, premium financing, added value trade association benefits, and underwriting expertise, as well as competitive premiums. Available limits: Minimum $1 million, maximum $10 million Carrier: Unable to disclose, admitted and non-admitted available States: Calif. Only Contact: Customer service at 800-229-8790

Professional Liability E&O, GL & BOP Market Detail: First Choice Ins. Intermediaries Inc. offers (www. firstchoiceii.com) access to appointed agents to Hiscox’s program 30 | INSURANCE JOURNAL-NATIONAL May 4, 2015

Specialty Personal Lines Market Detail: Next Wave Insurance Services LLC (www.nextwaveins.com) has partnered with American Modern Insurance Group to offer agents coverage for hard to place risks including: manufactured homes; vacant dwellings rental and seasonal dwellings; and collector vehicles. Upon appointment with American Modern as a sub producer of Next Wave agents gain access to its online rate, quote and issue system, modernLINK. Products offered include: dwelling fire; manufactured home; collector vehicle; watercraft; and personal watercraft. Available limits: Minimum $100,000, maximum $1 million Carrier: American Modern States: Ariz., Colo., Calif., Idaho, Minn., N.D., N.M., Ore., S.D., Utah, Wash., and Wyo. Contact: Jeff Ward at 619-232-3900 or jward@nextwaveins.com

FranchiseSuite Market Detail: Franchise Perils’ (www.franchiseperils.com) policy is written for and by franchisors. Five coverages available with one premium, one underwriter, one carrier, one adjuster, and one limit. Coverages include: D&O, E&O, EPL, fiduciary, and vicarious liability. Available limits: Minimum $1 million, maximum $10 million Carrier: Unable to disclose, non-admitted States: All states except Ind. Contact: 310-443-9333 or email: info@franchiseperils.com www.insurancejournal.com

IDEA EXCHANGE

Technology

How to Mitigate the Risks of Cloud Computing

he technology challenges facing insurance agents today might seem insurmountable: The very tools that could revolutionize the industry — like the cloud — could also compromise their security. Agents are hardpressed to find solutions, as regulatory oversight is stepping up just as clients By Asaf Cidon are demanding more personalized service. But as employees are increasingly bringing the tools they rely on in their personal lives to work, turning a blind eye to the cloud’s won’t work. Filelevel, on-device encryption addresses many of these concerns, and it’s the key from which many other solutions flow.

Advantages of the Cloud It’s no secret that the cloud is simplifying business everywhere. But few industries are as poised to take advantage of the cloud’s productivity advantages as property/ casualty insurance. Take, for example, something as routine as contract signings. Consumers are no longer willing to deal with having to open, print, sign, scan and send documents — it’s a lot of work for so simple a task. As consumers grow increasingly comfortable with enterprise-quality technologies like Dropbox, they’re bringing a new set of expectations to the table: Namely, that agents are as efficient and responsive as they’re able to be. The cloud helps unlock the full potential of mobile devices, making information available whenever and wherever agents find

themselves. The right tools are making it possible to be as efficient out in the field as you can be from the office. It’s also making agents better prepared, ready to address issues as they crop up and respond to inquiries in real time. The Cloud’s Dark Lining Shared networks sit at the heart of cloud computing, meaning that when someone continued on page 32

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May 4, 2015 INSURANCE JOURNAL-NATIONAL | 31

IDEA EXCHANGE NOTICE OF CLASS ACTION SETTLEMENT Zersen v. American Consolidated Business Owners Alliance, Inc. and Ramsgate Insurance, Inc., No. 10 CH 22349 To: All persons who were sent directly or indirectly one or more facsimile messages on or after May 25, 2006, that advertised or promoted in whole or in part: (a) the commercial availability of Ramsgate’s goods or services; or (b) the commercial availability of ACBOA’s goods or services. This notice informs you of a settlement of a class action lawsuit arising from advertisements defendants Ramsgate Insurance, Inc. and American Consolidated Business Owners Alliance, Inc. allegedly sent by fax. If you received an unsolicited fax offering the commercial availability of goods or services from Ramsgate or ACBOA, you are entitled to claim a share of a $750,000.00 Settlement Fund. Claim forms are available from Bock and Hatch LLC, 134 North LaSalle Street, Suite 1000, Chicago, Illinois 60602, or from the website listed below. Claim forms are due by August 31, 2015. If you wish to object to the settlement, you must identify yourself as a class member and state the reasons for and file and serve your objection by July 31, 2015, and you must appear at the Court hearing on September 11, 2015 at 11 a.m.

To obtain information about the settlement and to receive a claim form, immediately contact: Zersen Claims Administrator BOCK & HATCH, LLC 134 N. La Salle St., Ste. 1000 Chicago, IL 60602 Ph: (312) 658-5500 Fax: (312) 658-5555 Or go to: www.bockhatchllc.com/ zersenclassaction.html PLEASE DO NOT CONTACT THE COURT OR THE JUDGE

32 | INSURANCE JOURNAL-NATIONAL May 4, 2015

Technology

continued from page 31

backs up data in one place, like a desktop, Data from the Ponemon Institute suggests it syncs to a host of other devices. But this that more than 80 percent of breaches are proliferation of files leaves data unprotectdue to employee mistakes including lost ed on many devices. With more than 4.5 devices and accidental sharing. million smartphones lost or stolen in the United States in 2013 according to Consumer What Agents Can Do Reports, it’s not difficult to imagine a sce It’s true that risks associated with the nario in which a lost laptop, tablet, or cloud are broader than HIPAA compliance, phone undermines clients’ security. The but those rules help put threats in context. convenience of the cloud demands stronger They also provide a roadmap for how a protections to prevent sensitive data from business should evaluate the strength of a falling into the wrong hands. particular solution. Those protections are gradually increas Encryption should form the basis of any ing to address the progress of technology. strategy to protect insured parties’ inforTheir oversight might be seen as crucial mation. The right approach will be transcatch-up, given that it’s coming at a time parent, so that the extra layer of protection when breaches are disproportionately doesn’t require a convenience compromise. capturing healthcare records. It’s no sur File-level encryption makes it easier to prise that medical data has captivated the associate every modification, copy, access, interest of bad actors or share operation made to when you consider that encrypted files with a parThe right tools are medical records can fetch making it possible to ticular user. Encryption more than 10 times as can also protect data be as efficient out in much as financial data integrity, making it on the black market. The the field as you can be impossible to modify files fact that medical records from the office. without access to the file’s are becoming electronic specific encryption keys. carries more opportunities for mistakes. HIPAA requires full audit trails for PHI, For a long time, privacy regulations but it’s a good practice for any organization. under the Health Insurance Portability and It comes down to knowing what’s happenAccessibility Act (HIPAA) didn’t exactly ing with your sensitive files. That includes apply to property/casualty insurers. But all times like when a device is lost or stolen, or that is changing with recent updates to when an employee is terminated. Certain the law, including The Health Information cloud security solutions provide a device Technology for Economic and Clinical block feature, which administrators can use Health (HITECH) Act, requiring that insurto remotely wipe the keys associated with ers handling protected health information certain devices and users so that the sensicomply — leaving many struggling to catch tive information cannot be accessed. up, if they’re thinking about it at all. The one thing that insurance companies Even for agents who only occasionally and agents can’t do is ignore the cloud. A touch this sensitive data — such as when recent McAfee-sponsored Frost & Sullivan it’s necessary to obtain a full health histostudy found that more than 80 percent of ry to settle claims — HIPAA compliance survey respondents admit to using non-apand its labyrinth of rules for securing data proved software-as-a-service (SaaS) applicasuddenly come into play. In recent years, tions for work. It also found that people use the Office of Civil Rights has announced non-approved services for one reason: They plans to increase its audits — as well as simply need to get their work done, and scrutinize business associates like insurance these tools help. companies. Mistakes are an important consideration Cidon, who earned his Ph.D. in cloud computing in this context, because user errors are far from Stanford, is the CEO and co-founder of cloud more likely to cause breaches than hackers. security company Sookasa. www.insurancejournal.com

Save the Date! IICF Women in Insurance Global Conference returns to New York City, June 17 – 19, 2015

Empowered to Change – Women in Insurance Global Conference 2015 In June 2013, the Insurance Industry Charitable Foundation (IICF) launched the Women in Insurance Conference Series with the first multi-day global conference directed to women in the insurance industry. In June 2014, IICF hosted four one-day regional women’s forums. Over 1,300 professionals representing 33 states and over 200 companies attended. The response has been overwhelming, and the series continues.

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Searching for a workers’ compensation market? Look no further than Insurance Journal’s 2015 Workers’ Comp Directory, a comprehensive listing of intermediaries and carriers offering workers’ compensation coverage throughout the country. The information listed in this directory serves as a resource guide for independent agents and brokers looking for workers’ compensation markets. Intermediaries and carriers writing workers’ compensation coverage and profiled in this directory submit updated information directly to Insurance Journal.

We make every attempt to ensure the accuracy of all information listed in this directory. You may also view Insurance Journal’s Workers’ Comp Directory online at: www.insurancejournal. com/directories. Also visit that link to submit a listing for future workers’ compensation directories, or e-mail Kristine Honey at: khoney@insurancejournal.com. We hope you find the 2015 Workers’ Comp Directory to be a useful tool when searching for markets. To comment on this directory, or any other Insurance Journal resource, please e-mail: editorial@insurancejournal.com.

Access Point Insurance Services

Contact: Customer Service Phone: 949-760-0595 ; Fax: 949-760-0591 Email: submissions@accesspointins.net Website: www.accesspointins.net ■ Markets Offered: Workers’ Comp – Standard, High Mods, PEO Plans, USL&H ■ Phone Inquiries: Accepted ■ Minimum Premium: $25,000 ■ Brokered Business: Accepted ■ States Entered in: AZ CA HI NV ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Carriers Accident Insurance Services, Inc. Contact: Beckie Ervin Phone: 972-991-0413 ; Fax: 972-788-5108 Email: beckieervin@ais-insurance.net Website: www.ais-insurance.net ■ Markets Offered: Excess Workers’ Comp, 24 Hour Policy, Workers’ Comp, Occupational Accident ■ Phone Inquiries: Accepted ■ Minimum Premium: $150 ■ Brokered Business: Accepted ■ States Entered in: TX ■ Carriers Represented: American Hallmark ACE Risk Management Phone: 215-640-4642 Website: www.aceusa.com ■ Markets Offered: Workers’ Comp, Excess Workers’ Comp, Texas Excess Indemnity, GL, Automobile Liability & other financial products. ■ Phone Inquiries: Accepted ■ Minimum Premium: Loss Sensitive Accounts with $100,000 Deductible/Retention for Workers’ Comp ■ Brokered Business: Accepted ■ States Entered in: All States ■ Alliance With: With: ESIS, Inc. and other Third Party Administrators & Risk Management Providers

Agency Resources Contact: Florencia Robledo Phone: 866-454-9676 ; Fax: 973-261-9202 Email: florencia.robledo@agencyresources.com Website: www.agencyresources.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: $1M / $1M / $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted Align General Insurance Agency, LLC Contact: Mike Tudman 818-825-6181 Phone: 619-333-2500 Email: info@aligngeneral.com Website: www.aligngeneral.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $40,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted ■ Carriers Represented: Call For Details All Risks, Ltd. Contact: Hollie Hobbie Degutis Phone: 800-366-5810 ; Fax: 410-828-8179 Email: hhobbie@allrisks.com Website: www.allrisks.com ■ Markets Offered: Workers’ Comp, USL&H, DBA & MEL ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by class ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Over 14 carriers represented

34 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2015

Alternative Market Services, Inc. Phone: 855-924-1597 ; Fax:916-751-5911 Email: info@amsboss.com Website: www.alternativemarketservices.com ■ Markets Offered: Commercial Insurance, Health Insurance, PEO, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: N/A ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: All Carriers Always Affordable Insurance Solutions Contact: Ashley Liddle Phone: 657-900-2050 ; Fax: 657-900-2051 Email: ashley@alwaysaffordableins.com Website: www.alwaysaffordableins.com ■ Markets Offered: 24 Hour Policy, Excess Workers’ Comp, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: All States except AK & HI ■ Admitted Status: Admitted & Non-admitted American Team Managers Contact: Jackie Navarro Phone: 714-414-1233 ; Fax: 714-414-1299 Email: jackie@atminsurance.com Website: www.atminsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $500 ■ Limits: $1,000,000/$2,000,000 ■ Brokered Business: Accepted ■ States Entered in: AZ CA ID KS NE NM NV OK OR TX UT WY ■ Admitted Status: Admitted ■ Carriers Represented: ATower Group, Republic Indemnity, Travelers, AIG, Employers, AmTrust www.insurancejournal.com

2015 Workers’ Compensation Directory AMERISAFE

Contact: Customer Service Phone: 800-897-9719 ; Fax: 800-450-1091 Email: aiic-mktg@amerisafe.com Website: www.amerisafe.com ■ Markets Offered: Hazardous Workers’ Comp Carrier ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: Most States For more info, check out our ad on page 8 (South Central) AMIS/Alliance Marketing & Insurance Services Contact: Karen Metcalf Phone: 800- 843-8550 ; Fax: 800-573-8550 Email: kmetcalf@amiscorp.com Website: www.amisinsurance.com ■ Markets Offered: Ins. Adjusters, Security Guards & Alarm Co’s, Workers’ Comp for Private Investigators ■ Phone Inquiries: Accepted ■ Minimum Premium: $297 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Travelers AmTrust North America Contact: Customer Service Phone: 877-528-7878 ; Fax: 800-487-9654 Email: marketing@amtrustgroup.com Website: www.amtrustnorthamerica.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Alliance With: Multiple regional alliances AmWINS Group, Inc. - 80 Offices Nationwide See Website for Locations, HQ - Charlotte, NC Contact: Marketing Department Phone: 704-973-3489 ; Fax: 704-943-9000 Email: marketing@amwins.com Website: www.amwins.com ■ Markets Offered: Excess Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: Various ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Excess WC’ Carriers AmWINS Program Underwriters Contact: Matt McCue Phone: 717-214-7622 Email: matt.mccue@amwins.com Website: www.amwins.com/apu ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Various AM Best A- Rated or Higher

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Apex Insurance Services Contact: Robert Hughes Phone: 210-340-8985 ; Fax: 210-340-8986 Email: hughes@apexinsurance.com Website: www.apexinsurance.com ■ Markets Offered: Excess WC, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: Statutory and high excess ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers: Various National & Regional Carriers Appalachian Underwriters, Inc. Contact: Robert Purdy Phone: 888-376-9633 ; Fax: 888-871-7644 Email: marketing@appund.com Website: www.appund.com ■ Markets Offered: USL&H, Workers’ Comp, New Ventures/No Prior Eligible ■ Phone Inquiries: Accepted ■ On-line portal accessible ■ Minimum Premium: $750 ■ Limits: Any Size ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted ■ Carriers Represented: Multiple A.M. Best ‘A’ Rated Carriers. Exclusive Programs for Healthcare, Temp Staffing, Trucking and Construction Risks.

Applied Underwriters, Inc.

Phone: 877-234-4450 ; Fax: 877-234-4452 Email: sales@auw.com Website: www.auw.com/us ■ Markets Offered: Workers’ Comp, EPLI, E&O, D&O, Payroll ■ Phone Inquiries: Accepted ■ Minimum Premium: N/A ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted For more info, check out our ad on pages 4 & 5 (National) & on the Back Cover

Atlas General Insurance Services Contact: Marketing Dept. Phone: 855-309-3310 ; Fax: 619-814-8914 Email: info@atlas.us.com Website: www.atlas.us.com ■ Markets Offered: Workers’ Comp, BOP and Commercial Package Policies, Builders’ Risk, Contractors’ and Non-Contractors’ GL, EIFS, Garage and Dealers, Difference in Conditions, Habitational, Inland Marine, Professional Liability, Property, Umbrella and Excess ■ Phone Inquiries: Accepted ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Multiple “A” rated carriers Berkshire Hathaway GUARD Insurance Companies Phone: 570- 825-9900 ; Fax: 570- 823-5930 Email: csr@guard.com Website: www.guard.com ■ Markets Offered: Workers’ Comp & related P&C lines targeting small- to mid-sized accounts ■ Phone Inquiries: Accepted ■ Minimum Premium: No Standard Minimum ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: 38 States plus DC Berkshire Hathaway Homestate Companies Contact: Customer Service Phone: 888-495-8949 ; Fax: 415-675-5482 Email: marketingsf@bhhc.com Website: www.bhhc.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted

Arrowhead General Insurance Agency, Inc.

Contact: Marketing Dept. Phone: 800-669-1889 ; Fax: 619-881-8695 Email: MarketingInfo@ArrowheadGrp.com Website: www.ArrowheadGrp.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by Carrier ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Multiple “A” rated carriers Artex Risk Solutions, Inc. Contact: Christine Mikel Phone: 630-438-1560 Email: Christine_Mikel@artexrisk.com Website: www.artexrisk.com ■ Markets Offered: Excess WC, Workers’ Comp, Guaranteed Cost & Alternative Risk (Captives) ■ Phone Inquiries: Accepted ■ Minimum Premium: $100,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers: Several All “A” rated or higher

Boston Insurance Brokerage, Inc.

Contact: Keith Driscoll – 617-556-7031 Contact: Monica Wojnilo – 617-556-7053 Website: www.bostonbrokerage.com ■ Markets: Guaranteed Cost, Excess, Rating Plans ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: Standard ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: AIM Mutual, Atlantic Charter, Amerisafe, AmTrust, Axiom, AIG, Crum & Forster, Employers, FirstComp, Guard, Hartford, Munich RE (V3), RTW, Republic Indemnity, Sentry, Tangram (Prosight) & Travelers. The workers comp division works with agencies across the country helping to place mono-line coverage. Boston Insurance Brokerage has relationships with markets to write retail, wholesale, service, manufacturing, construction, home healthcare & social service risks. Whether your agency has a small single state risk or multi-state complex account, we are able to offer the expertise & professionalism to place your coverage. May 4, 2015 INSURANCE JOURNAL-NATIONAL REGION | 35

2015 Workers’ Compensation Directory BreckComp Program of Blue River Underwriters Contact: Vicky Huerta Phone: 559-221-2050 Ext. 2904 ; Fax: 559-225-2066 Email: vhuerta@blueriveruw.com Website: www.blueriveruw.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $20K ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted

Charity First Insurance Services, Inc. Contact: Riley Binford Phone: 800-352-2761 ; Fax: 415-536-4033 Email: riley_binford@charityfirst.com Website: www.charityfirst.com ■ Markets Offered: Workers’ Comp, Nonprofits Only ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted in most states ■ Carriers Represented: Travelers

Breckenridge Insurance Services Contact: Customer Service Phone: 314-725-8394 Ext. 260 Email: Partner@Breckis.com Website: www.breckis.com ■ Markets Offered: Workers’ Comp, MGU, Wholesale Brokerage ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: AIG, Amerisafe, AmTrust, Applied Underwriters, BerkleyNet, Berkshire Hathaway, Guard, Hartford, Starr Insurance, Torus National, V3 Insurance Partners

CID Insurance Programs, Inc. Contact: Caesar Serrano Phone: 800-922-7283 ; Fax: 619-593-2008 Email: caesar@cidinsurance.com Website: www.cidinsuranceprograms.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: AZ CA CO ID MD NE NM NV OR PA TN TX UT ■ Admitted Status: Admitted ■ Carriers Represented: Over 25 insurance companies

Brownyard Group Contact: Jennifer Brownyard Phone: 800-645-5820 ; Fax: 631-666-5723 Email: info@brownyard.com Website: www.brownyard.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted Builders & Tradesmen’s Ins. Services, Inc. Contact: Jeremiah Azevedo Phone: 916-772-9200 ; Fax: 916-772-9292 Email: jazevedo@btisinc.com Website: www.btisinc.com ■ Markets Offered: Victory® Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Not Accepted ■ States Entered in: All States except AK, ND, OH, WA, WY ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust, ICW, CNA, Travelers, Zenith Care Providers Insurance Services, LLC Contact: Priscilla Archer Phone: 800-761-7072 Ext. 1313 ; Fax: 800-224-7145 Email: parcher@nsminc.com Website: www.ins-cps.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: None ■ Limits: EL $1M ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Texas - Open Safety Group accessed through Texas Mutual

Commercial Sector Insurance Brokers

Contact: Carl Thompson Phone: 205-776-2625 ; Fax: 205-776-1619 Email: cthompson@comsectorins.com Website: www.comsectorins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: $1M/$1M/$1M ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Chartis, Am Trust, Crum & Forester, Guarantee Insurance Co., Munich, Zurich Commercial Sector is a National Wholesaler. We specialize in assisting retail agents solve P & C problems, including Workers’ Comp. Community Association Insurance Solutions, LLC Contact: Gary J. Deck, VP Sales and Distribution Phone: 888-833-4158 ; Fax: 888-833-4159 Email: marketing@mgalive.com Website: www.mgalive.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $495 ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: All States except Monopolistic & ID, MA ■ Admitted Status: Admitted ■ Carriers Represented: Hanover/ PMA Companies

36 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2015

Comp Solutions Network, Inc.

Contact: Dianne Favro Phone: 713-690-3500 Ext. 41 ; Fax: 713-690-8484 Email: diannef@compsolutionsnetwork.com Website: www.compsolutionsnetwork.com ■ Markets Offered: Monoline Workers’ Comp, Non- Subscriber Programs for Texas Employers ■ Phone Inquiries: Accepted ■ Minimum Premium: $250 ■ Limits: $500K to $10M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers (WC): Accident Fund, American Alternative, American Hallmark, American International, Amerisafe, AmTrust, Berkshire Hathaway, Companion, Republic Indemnity, Service Lloyds, Old Glory, QBE, Markel (First Comp), Texas Mutual ■ Carriers (Non-Subscribers): ACE American, American Southern, American Hallmark, Commercial Alliance, Great American, Independent American, Markel Essex, North American Capacity, North American Specialty, OneBeacon, Pam American, Service Lloyds, Western Heritage

Compass Insurance Group of Agencies Contact: Paul Laufer Phone: 818-507-1980 ; Fax: 818-545-3818 Email: plaufer@compasseands.com Website: www.compasseands.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted ■ Carriers Represented: 20+ Markets

CompWest Insurance Company Contact: Kristi Houston Phone: 714-641-9570 Email: khouston@compwestinsurance.com Website: www.compwestinsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $1,500 ■ Limits: $1.5M ■ Brokered Business: Not Accepted ■ States Entered in: AZ CA CO ID NV OR UT ■ Admitted Status: Admitted Continental Brokers, Inc. Contact: Collier Simpson Phone: 866-386-4136 ; Fax: 601-898-4793 Email: cs@continentalbrokers.biz Website: www.continentalbrokers.biz ■ Markets Offered: Health Insurance, Managed Care, HMO, Short Term Medical, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: CNA, Hartford, Assurant, BCBS (some states) United HealthCare, Colonial www.insurancejournal.com

2015 Workers’ Compensation Directory Continental Risk Insurance Services Contact: Jeana Ramos Phone: 866-699-2747 ; Fax: 209-365-6040 Email: jeana@continentalriskins.com Website: www.continentalriskins.com ■ Markets Offered: USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: AK AR AZ CA CO FL GA ID NC NV NY OR TX UT WA ■ Admitted Status: Admitted & Non-admitted Continental Underwriters, Inc. Contact: C. Preston Herrington, III Phone: 804-643-7800 ; Fax: 804-643-5800 Email: preston@contund.com Website: www.contund.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: 500/500/500 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Multiple Costanza Insurance Agency, Inc. Contact: Brian Costanza Phone: 800-346-0942 ; Fax: 972-991-2139 Email: b.costanza@cia-tx.com Website: www.costanzainsurance.com ■ Markets Offered: Workers’ Comp, GL, Comm Auto, Crime, EPL, EBL, Umbrella ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Carriers Represented: Zurich Insurance Co. CoverXSpecialty Contact: John Bures Phone: 248-358-4010 ; Fax: 248-358-2459 Email: coverxuw@coverx.com Website: www.coverx.com ■ Markets Offered: Workers’ Comp for Security Guard & Alarm Contractors ■ Phone Inquiries: Accepted ■ Minimum Premium: $250 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Non-admitted ■ Carriers Represented: Travelers Don R. Jensen & Company Contact: Don R. Jensen & Company Phone: 630-734-3240 ; Fax: 630-734-3250 Email: apps@drjco.com Website: www.drjco.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: None ■ Brokered Business: Not Accepted ■ States Entered in: All States except Monopolistic & AK, HI ■ Admitted Status: Admitted ■ Carriers Represented: Multiple AM Best “A” Rated Carriers

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Empire Underwriters, LLC

Contact: Workers Comp Underwriting Toll Free: 800-758-8113 Phone: 813-448-9300 ; Fax: 813-448-9310 Email: quotes@empireunderwriters.com Website: www.empireunderwriters.com ■ Markets Offered: Standalone Workers’ Comp, Staffing Workers’ Comp, Specialty Risk, Alternative Risk, PEO ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Not Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: ACE, AIG, Century Surety, Guard, Benchmark, Berkshire Hathaway, Endurance, Lloyds of London, RLI, RTW, Torus, and many others. Empire Underwriters is a National Insurance Wholesaler, Excess and Surplus line facility and program manager. Our organization is dedicated to the success of agents and brokers nationwide. Employer’s Comp Associates, Inc. Contact: Aaron Johnson Phone: 972-386-0150 ; Fax: 972-386-6350 Email: ajohnson@empcompinc.com Website: www.EmpCompInc.com ■ Markets Offered: Workers’ Comp, Workers’ Comp Alternative ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Berkshire Hathaway, Great American, American Hallmark, Texas Mutual and many others.

Employers Compensation Insurance Company (ECIC) Contact: Customer Service Phone: 800-700-9113 ; Fax: 888-527-3422 Email: customerservice@employers.com Website: www.employers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: AZ CA CO FL ID IL MT NV OR PA TX UT Employers Insurance Company of Nevada (EICN) Contact: Customer Service Phone: 800-700-9113 ; Fax: 888-527-3422 Email: customerservice@employers.com Website: www.employers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: NV Employers Preferred Insurance Company (EPIC) Contact: Customer Service Phone: 800-700-9113 ; Fax: 888-527-3422 Email: customerservice@employers.com Website: www.employers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: Most States FFVA Mutual Insurance Co. Contact: Customer Service Phone: 800-346-4825 ; Fax: 321-214-0220 Email: newbusiness@ffvamutual.com Website: www.ffvamutual.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: Varies by Industry ■ Limits: Statutory ■ Brokered Business: Not Accepted ■ States Entered in: AL FL GA IN KY MS NC SC TN VA ■ Admitted Status: Admitted

FUBA Workers’ Comp EMPLOYERS focuses on workers’ compensation insurance and services for America’s small businesses. We provide targeted insurance solutions for independent, entrepreneurial companies. With roots stretching back to 1913, EMPLOYERS has the experience, financial stability, knowledge and resources to provide the coverage and special services that America’s small businesses need. The next four listings are the operating companies of EMPLOYERS. Employers Assurance Company (EAC) Contact: Customer Service Phone: 800-700-9113 ; Fax: 888-527-3422 Email: customerservice@employers.com Website: www.employers.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: Most States

Contact: Customer Service Phone: 888-262-4483 ; Fax: 888-871-7474 Email: fubawc@fubaworks.com Website: www.fubaworkerscomp.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by class code ■ Brokered Business: Accepted ■ States Entered in: FL ■ Admitted Status: Admitted ■ Carriers: Florida Citrus, Business & Industries Fund (FCBI) For more info, check out our ad on page 5 (Southeast) Grand General Agency Contact: Drew Viersen Phone: 800-869-2022 ; Fax: 888-767-0826 Email: drew@thehelpfulpeople.com Website: www.thehelpfulpeople.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1,000,000/1,000,000/1,000,000 ■ Brokered Business: Not Accepted ■ States Entered in: All States except Monopolistic & AK, AL, HI, ■ Admitted Status: Admitted ■ Carriers: Amerisafe, The Hartford

May 4, 2015 INSURANCE JOURNAL-NATIONAL REGION | 37

2015 Workers’ Compensation Directory GSS Insurance Services, LLC Contact: Greg Santolucito Phone: 760-947-5500 ; Fax: 909-494-7854 Email: info@gssinsurance.com Website: www.gssinsurance.com ■ Markets Offered: Workers’ Comp, GL, Commercial Auto, BOP, Bonds & Packages ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $500 ■ Limits: $1,000,000/1,000,000/1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted & Non-admitted IAAC, Inc. (Membership Services Division of IIABNY) Contact: Customer Service Phone: 800-962-7950 ; Fax: 888-432-0510 Email: iiabny@iiabny.org Website: www.iiabny.org ■ Markets Offered: USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,000 ■ Brokered Business: Not Accepted ■ States Entered in: NY ■ Carriers: PMC Insurance IIABNY’s endorsed WC wholesaler represents several carriers. ICW Group Insurance Companies Contact: Taunya Moen Phone: 800-877-1111 Email: enterprisemarketingteam@icwgroup.com Website: www.icwgroup.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $2,500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: CA FL IL NC NV PA SC TX WI ■ Admitted Status: Admitted ■ Alliance With: MEDEX Insential, Inc. Contact: Amanda Ballard Phone: 888-571-6160 ; Fax: 708-731-4040 Email: contact@insential.com Website: www.insential.com ■ Markets Offered: Excess Workers’ Comp, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered: All States ■ Admitted Status: Admitted ■ Carriers Represented: Gateway Insurance Center Special Risks, Ltd. Contact: Ludmila Koval Phone: 888-773-7475 ; Fax: 413-781-0050 Email: lkoval@specilarisksltd.com Website: www.specialrisksltd.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Not Accepted ■ Minimum Premium: $350 ■ Brokered Business: Not Accepted ■ States Entered: CT MA ME NH NY RI VT ■ Admitted Status: Admitted ■ Carriers Represented: The Hartford, Guard Insurance Group

International Excess Companies Contact: Kenneth Kukral, CIC Phone: 800-937-3497 Ext. 2079 ; Fax: 888-291-1382 Email: kennethkukral@intlxs.com Website: www.intlxs.com ■ Markets Offered: Excess Workers’ Comp, PEOs, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by class, as low as $250 ■ Limits: Statutory + increased limits & excess limits ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic (monoline OH stop gap available) ■ Admitted Status: Admitted ■ Carriers Represented: Various IPA Risk Management, LLC Contact: Greg or Chase Phone: 201-797-1084 x 201 ; Fax: 201-797-1076 Email: c.heitmann@ipariskmanagement.com Website: www.ipariskmanagement.com ■ Markets Offered: Health Insurance, HMO, Managed Care, PEO, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $25,000 ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA CT DE FL MD NC NJ NY PA SC TX ■ Admitted Status: Admitted & Non-admitted ■ Alliance With: Yes - health benefits are integrated with workers’ comp benefits Irving Weber Associates, Inc. Contact: Adam Weber Phone: 800-243-1811 ; Fax: 888-622-0414 Email: Info@iwains.com Website: www.iwains.com ■ Markets Offered: All Lines including Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Various Izzo Insurance Services, Inc. Contact: Mike Jones Phone: 800-800-1704 ; Fax: 630-582-2803 Email: MJones@IzzoInsurance.com Website: www.IzzoInsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: AIG, AmTrust Companies, BerkleyNet, CNA, Employers Ins. Group, Hartford, ICW Group, Meadowbrook, State Auto, Zenith Insurance, Zurich Insurance J.W. Terrill Inc. Contact: Duke Niedringhaus Phone: 314-594-2622 Email: dniedringhaus@jwterrill.com Website: www.jwterrill.com ■ Markets Offered: Excess Workers’ Comp For Self Insured Entities & Group Captives ■ Phone Inquiries: Accepted ■ Minimum Premium: $100,000 ■ Brokered Business: Accepted ■ States Entered in: All States

38 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2015

Jimcor Agencies Contact: Garrett Gioe Phone: 201-573-8200 Ext. 1202 ; Fax: 201-573-8820 Email: ggioe@jimcor.com Website: www.jimcor.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: Any Applicable per State ■ Brokered Business: Accepted ■ States Entered in: All Nonmonopolistic States ■ Admitted Status: Admitted ■ Carriers Represented: AIG, AmTrust, CNA, Travelers, Crum & Forster, Magna Carta, ACE Keller & Co, Inc. Contact: John Barton Phone: 716-874-1644 ; Fax: 716-874-4920 Email: jbarton@kellerandco.com Website: www.kellerandco.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Accepted ■ States Entered in: NJ NY PA ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Several!! King Insurance Support Systems Contact: Laura Fondarella Phone: 800-488-4096 ; Fax: 949-488-2259 Email: Marketing@kinginsuranceca.com Website: www.kinginsuranceca.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: Western States ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust, Travelers KZ Insurance Brokerage, LLC Contact: Mark Zeanah Phone: 530-926-6030 ; Fax: 530-926-6040 Email: info@kzib.com Website: www.kzib.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: BHHC- Oak River, Cypress, Redwood Travelers, Hartford LIG Marine Managers Contact: Karen Tischler Phone: 727-578-2800 ; Fax: 727-578-9977 Email: KLT@LIGMarine.com Website: www.LIGMarine.com ■ Markets Offered: USL&H (Longshore), Workers’ Comp, MEL ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Various

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2015 Workers’ Compensation Directory Loveland & Smart Ins. Services, Inc. Contact : Joe Loveland Phone: 916-844-0349 ; Fax: 916-362-5595 Email: Joe@lovelandsmart.com Website: www.lovelandsmart.com ■ Markets Offered: Excess WC for Self Insured Entities & Excess GL & Auto Liab for Pubic Entities ■ Phone Inquiries: Accepted ■ Minimum Premium: $20,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: AR AZ CA CO GA ID IL LA MI MO MS NV NY OH OK OR PA UT WA ■ Admitted Status: Admitted ■ Carriers Represented: All Excess WC Carriers LowRateWorkComp Contact: Paul Farhood Phone: 850-625-5190 ; Fax: 888-625-2628 Email: gotcomp@yahoo.com Website: www.LowRateWorkComp.com ■ Markets Offered: Health Insurance, Payroll, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $4,000 ■ Brokered Business: Accepted ■ States Entered in: All States except WA ■ Alliance With: 4 PEOs – Writing All classes depending on state. Markel Programs Contacts: James Caldwell Phone: 972-588-2064 Email: TX_NonSubscriber@midman.com Website: www.midlandsmgt.com ■ Markets Offered: TX Non-Subscriber ■ Phone Inquiries: Not Accepted ■ Minimum Premium: Depends on limit ■ Limits: $ 500,000 to $5,000,000 ■ Brokered Business: Accepted ■ States Entered in: TX ■ Admitted Status: Admitted MarketScout Contacts: Brian Barrilleaux, SVP, Broker - 972-934-4204 Dan Fouts, Broker - 972-934-4231 Chris Kerr, VP, Broker - 972-934-4206 Amber Hunter, Broker - 972-934-4209 Email: Wc3@msunderwriters.com Fax: 972-934-4299 ■ Markets Offered: Health Ins., Managed Care, Trucking, USL&H, Work Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Over 20 National, Regional & Specialty Carriers Maverick Commercial Insurance Services Contact: Mario Gomez Phone: 818-223-0011 ; Fax: 818-223-0012 Email: mariogomez@maverickinsure.com Website: www.maverickinsure.com ■ Markets Offered: Workers Comp, Large Deductible & Retro Programs, Excess Workers’ Comp, USL&H, PEO ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Limits: $1mil/$1mil/1mil ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Various www.insurancejournal.com

Maxim Insurance Group Contact: Scott Carde Phone: 813-689-5105 ; Fax: 813-354-2336 Email: mail@maximinsurancegroup.com Website: www.maximinsurancegroup.com ■ Markets Offered: Workers’ Compensation, DBA, Repatriation & Foreign Coverage, USL&H ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,500 ■ Limits: Statutory and up to $2M ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust, Associated Industries, Bridgefield Casualty, Bridgefield Employers, Business First, AIG, OptaComp, Retail First, Rochdale, Security National, Technology, Wesco McClelland and Hine, Inc. Contact: Amicia Hine Phone: 210-293-6240 ; Fax: 210-293-6318 Email: amicia@mhi-tx.com Website: www.mhi-tx.com ■ Markets Offered: Occ. Acc., Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: TX ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Travelers, Hartford, Charits, Texas Builders, AmTrust, Zenith McLeckie Insurance Group Contact: Bill McLeckie Phone: 903-897-9090 ; Fax: 760-462-1696 Email: bill@mcleckie.com Website: www.mcleckie.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Brokered Business: Accepted ■ States Entered in: AR FL LA NC OK TN TX ■ Admitted Status: Admitted ■ Carriers Represented: Travelers and various others.

Meadowbrook Insurance Group Contact: Phillip Gajewski Phone: 248-358-1100 ; Fax: 248-692-0516 Email: pgajewski@meadowbrook.com Website: www.meadowbrook.com ■ Markets Offered: Excess Workers’ Compensation, Specialty/Niche Programs, Workers’ Compensation ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by Program ■ Limits: Varies by Program ■ Brokered Business: Yes; Varies by Program ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Star Insurance Company, Williamsburg National Insurance Company, Ameritrust Insurance Corporation, ProCentury Insurance Company

Midlands

Oklahoma City, OK & Addison, TX Phone: 800-800-4007 ; Fax: 405-840-5432 Email: marketing@midman.com Website: www.midlandsmgt.com ■ Markets Offered: Excess Workers’ Comp, Primary Workers’ Comp, Texas Non-Subscriber, Property & Casualty Lines ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: AM Best “A” Rated Carriers Midwest Employers Casualty Company Contact: Renée Lunceford Phone: 636-449-7022 ; Fax: 636-449-7199 Email: rlunceford@mwecc.com Website: www.mwecc.com ■ Markets Offered: Workers’ Compensation: Excess Workers’ Compensation, Assumed Reinsurance, Group Captives, Large Deductible ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by risk ■ Limits: Up to Statutory ■ Brokered Business: Accepted ■ States Entered in: All States, District of Columbia ■ Admitted Status: Admitted Midwestern Insurance Alliance, LLC Contact: Robert Etzler Phone: 502-429-9990 ; Fax: 502-426-7067 Email: retzler@mwiainsurance.com Website: www.midwesterninsurance.com ■ Markets Offered: Workers’ Comp, Trucking, Waste Management, Construction ■ Phone Inquiries: Accepted ■ Minimum Premium: $10,000 ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: AL AR AZ CA CO GA IN KS KY LA MO MS NC NM NV OK TN TX SC UT VA ■ Admitted Status: Admitted NBIS Contact: Peter Bellnier Phone: 770-257-1777 ; Fax: 770-257-1500 Email: contactus@nbis.com Website: www.NBIS.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Limits: 100/500/100 500/500/500 1mm/1mm/1mm ■ Brokered Business: Accepted ■ States Entered in: All States except NY ■ Admitted Status: Admitted all states Networked Insurance Agents Contact: Tam Duong Phone: 800-682-8476 ; Fax: 888-843-2535 Email: tam.duong@networkedins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $250 ■ Limits: $1M / $1M / $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: AmTrust, Applied Underwriters, ICW, The Hartford, Travelers, Preferred Employers, Guard, Everest, CNA, First Comp, Employers, Fireman’s Fund, Liberty Mutual, ACE, AIG, Chubb, Zenith

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2015 Workers’ Compensation Directory Norman-Spencer Agency, Inc. Contact: Corky Breeden Phone: 937-432-1631 ; Fax: 937-432-1635 Email: corkybreeden@norman-spencer.com Website: www.norman-spencer.com ■ Markets Offered: Excess Workers’ Comp, USL&H, Workers’ Comp, Dividend Work Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Zenith, Amerisafe, AmTrust Number One Insurance Agency, Inc. Contact: Barbara Lobdell Phone: 508-634-7362 ; Fax: 508-634-2930 Email: blobdell@massagent.com Website: www.massagent.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $100 ■ Limits: 100 / 500 / 100 + ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust Group, Norfolk & Dedham Group, The Hartford Oryx Insurance Brokerage, Inc. Contact: Tim Cappellett Phone: 607-724-0173 ; Fax: 607-724-7266 Email: tcappellett@oryxinsurance.com Website: www.oryxinsurance.com ■ Markets Offered: Workers’ Compensation, GL, BA ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Brokered Business: Not Accepted ■ States Entered in: CT DE IL MD NJ NY PA VA VT ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust

Pacific Excess Insurance Marketing

Contact: Barry Colburn Phone: 800-222-5582 ; Fax: 714-228-7899 Email: Marketing@pacificexcess.com Website: www.pacificexcess.com ■ Markets Offered: Workers’ Comp, All Property & Casualty Risks ■ Phone Inquiries: Accepted ■ Minimum Premium: As Low As $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: CA AZ NV ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust & The Zenith

PBS Insurance Underwriting Corporation Contact: Jack Smith Phone: 502-244-1056 ; Fax: 502-254-1056 Email: pbs@pbsinsurance.com Website: www.pbsinsurance.com ■ Markets Offered: Workers’ Comp, USL&H ■ Phone Inquiries: Not Accepted ■ Minimum Premium: None ■ Limits: No min. ■ Brokered Business: Accepted ■ States Entered in: All States except AK ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Multi carriers PEO Source Contact: Joanne Ziegler Phone: 954-294-1432 ; Fax: 561-828-6128 Email: peosourcebobz@gmail.com Website: www.PEO-Source.com ■ Markets Offered: Workers’ Comp, Health Insurance, USL&H, Payroll ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: CA FL GA MI NJ NY PA SC TX Platinum Program Managers & Insurance Services, Inc. Contact: Dan Rieden Phone: 949-209-0233 ; Fax: 949-209-0272 Email: danr@ppmins.com Website: www.ppmins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: AK AZ CA CO ID MT NM NV OR TX UT ■ Admitted Status: Admitted ■ Carriers Represented: Torus National, Meadowbrook, Republic Underwriters, AmTurst, Preferred Employers, AIG, Employers, and more. PMC Insurance Group Contact: David Malloy Phone: 781-449-7744 ; Fax: 781-449-7889 Email: dmalloy@pmcinsurance.com Website: www.pmcinsurance.com ■ Markets Offered: Workers’ Comp (General Industry), Workers’ Comp for Temp Staffing and Home Healthcare ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Carriers: AIG, Amtrust, BerkleyNet, Hartford, Guard, Guarantee, Bershire Hathaway, others

Pacific Excess Insurance Marketing is a Wholesaler/General Agent with access to many Standard, Surplus Lines and Workers’ Compensation Markets.

Patriot National, Inc.

Contact: Nicole Brewer Phone: 954-670-2900 ; Fax: 954-252-3758 Email: marketing@patnat.com Website: www.PatNat.com ■ Markets Offered: Workers’ Comp, Property & Casualty ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,500 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted For more info, check out our ad on pg 2 (National)

Preferred Property Programs

Contact: Carmen Suarez Phone: 888-548-2465 ; Fax: 732-946-0547 Email: info@ppp-quotes.com Website: www.ppp-quotes.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $750 ■ Limits: 100/500/100 ; 500/500/500 ; 1,000/1,000/1,000 ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted ■ Carriers Represented: A- X rating by AM Best

40 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2015

Red Rock Financial Group, Inc. Contact: Lawrence Levine Phone: 1-877-572-6221 x 501 ; Fax: 1-877-895-9011 Email: info@redrockfg.com Website: www.redrockfg.com ■ Markets Offered: Workers’ Comp (High Risk) Roofers, Framers, Excavators and many other class codes. ■ Phone Inquiries: Accepted ■ Minimum Premium: $5,000 ■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: Majority of states 39 ■ Admitted Status: Admitted & Non-admitted Risk Alternatives & Management Contact: Shane Maloney Phone: 770-424-5770 ; Fax: 770-424-5774 Email: shane@ram-insurance.com Website: www.ram-insurance.com ■ Markets Offered: 24 Hour Policy, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: None ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: DNIC, Lion, AmTrust, Munich Reed, Zurich, Amerisafe, SE Leasing, Companion, AIG, Berkshire Hathaway, QBE

Risk Innovations, LLC Contact: Jeff Sandy Phone: 816-251-1608 ; Fax: 866-262-5802 Email: jsandy@riskinnovationsllc.com Website: www.riskinnovationsllc.com ■ Markets Offered: Excess Workers’ Comp, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: State min. ■ Limits: None ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Over 20 Risk Placement Services, Inc. Contact: Patrick Edwards Phone: 312-803-6334 ; Fax: 312-803-6309 Email: Patrick_Edwards@RPSins.com Website: www.rpsins.com ■ Markets Offered: Excess WC, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: ACE, AIG, CNA, Hartford, Safeco & Zurich

RoamNet Insurance Marketing Programs

Contact: Patty Lawson Phone: 877-272-0333 ; Fax: 909-987-2245 Email: pattyl@roamnetins.com Website: www.roamnetins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,500 ■ Limits: High limits with small premiums ■ Retail Agents/Brokers: Accepted ■ States Entered: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Employers, Hanover, Travelers & Zenith www.insurancejournal.com

2015 Workers’ Compensation Directory Roundstone Management Contact: Jennifer Boerio Phone: 440-617-0333 ; Fax: 866-848-9496 Email: info@roundstoneinsurance.com Website: www.roundstoneinsurance.com ■ Markets Offered: Excess WC, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Brokered Business: Accepted ■ States Entered in: All States Russell Bond & Co., Inc. Contact: Derek Bucciferro Phone: 800-333-7226 ; Fax: 800-677-6779 Email: dbucciferro@russellbond.com Website: www.russellbond.com ■ Markets Offered: 24 Hour Policy, Excess EL Public Entities (NY Only), Excess Workers’ Comp, Health Ins, HMO, Managed Care, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M EL - Statutory WC ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: ACE, Chartis, Crum + Forster, Safety National, Capitol, MidWest, Arch RWISI Group Contact: Randy White Phone: 813-220-9220 ; Fax: 305-436-3786 Email: randy@rwisi.com Website: www.rwisi.com ■ Markets Offered: USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $25,000 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic ■ Admitted Status: Admitted Safety National Casualty Corporation Contact: Karla Antrobus Phone: 888-995-5300 ; Fax: 314-995-3843 Email: karla.antrobus@safetynational.com Website: www.safetynational.com ■ Markets Offered: Excess WC, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies by state ■ Limits: Varies by state ■ Brokered Business: Accepted ■ States Entered in: All States & Canada ■ Admitted Status: Admitted SFA-5Star Specialty Programs Contact: Dee Dee Bloom Phone: 702-740-8470 ; Fax: 702-740-8472 Email: dd.bloom@5starsp.com Website: www.5starsp.com/SFA/default.aspx ■ Markets Offered: Excess Workers’ Comp, Large Deductibles, Buy-Down/Layer Coverage, Self- Insurance Bonds, Cash Flow Only Policies ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Limits: Statutory ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Excess WC Carriers Sports & Fitness Insurance Corporation (SFIC) Contact: Kim Tucker Phone: 800-844-0536 ; Fax: 601-853-6141 Email: askus@sportsfitness.com Website: www.sportsfitness.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Safeco, Hartford www.insurancejournal.com

State Compensation Insurance Fund of California Contact: Customer Service Phone: 888-STATEFUND (888-782-8338) Email: webmaster@scif.com Website: www.statefundca.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Depends on class ■ Brokered Business: Accepted ■ States Entered in: CA ■ Alliance With: State Fund Medical Provider Network

StateFund First

Contact: Riley Binford Phone: 415-536-8438 ; Fax: 415-536-6003 Email: riley_binford@statefundfirst.com Website: www.statefundfirst.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA ■ Admitted Status: Admitted ■ Carriers Represented: California State Compensation Insurance Fund For more info, check out our ad on page 5 (West) Stonehenge Insurance Solutions, Inc. Contact: Troy Reynolds Phone: 561-746-5027 ; Fax: 561-746-5028 Email: treynolds@stonehengeis.com Website: www.stonehengeis.com ■ Markets Offered: Workers’ Comp, PEO and Staffing Companies ■ Phone Inquiries: Accepted ■ Minimum Premium: $150,000 ■ Limits: $1,000,000 - Standard for PEO’s & Staffing Companies ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic and Alaska SWBC Contact: Lisa Pinto Phone: 210-525-1241 ; Fax: 210-321-7530 Email: swbcinfo@swbc.com Website: www.swbc.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $25,000 ■ Limits: 100/100/500 500/500/500 1,000,000/1,000,000 ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: All Major Carriers Target Managers Insurance Services, Inc. Contact: Michael Kiger Phone: 702-588-5300 ; Fax: 702-588-5310 Email: Submissions@targetmanagers.com Website: www.targetmanagers.com ■ Markets Offered: USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: $1M ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: AIG, Amerisafe, AmTrust, Employers Compensation, Guarantee Insurance, National Casualty, North Point, Praetorian, QBE, State Auto, UBIC, Zurich & many others.

TECIS Insurance Services Contact: Robin Holliday Phone: 805-453-7992 Email: rholliday@tecisinsurance.com Website: www.tecisins.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $2,000 ■ Limits: $1,000,000 ■ Brokered Business: Accepted ■ States Entered in: CA Program with incidental out of state exposures ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust Tejas American General Agency Contact: Bart Koch Phone: 888-999-8242 ; Fax: 512-342-2803 Email: marketing@taga1.com Website: www.taga1.com ■ Markets Offered: USL&H, Workers’ Comp, Non-Subscription (NM, OK, TX only) ■ Phone Inquiries: Accepted ■ Minimum Premium: $250 ■ Limits: $1M / $1M / $1M ■ Brokered Business: Not Accepted ■ States Entered in: AR LA NM OK TX ■ Admitted Status: Admitted ■ Carriers Represented: Accident Fund, ACE USA, American Hallmark, Amerisafe, AmTrust, Chartis, Commercial Alliance Ins Co, Employers, Essex Insurance Co, First Comp, Great American, Hallmark Specialty, Hanover, Independence American Ins Co, OneBeacon, Service Lloyds, Travelers, Western Heritage

Texas Mutual Insurance Company

Contact: Customer Service Phone: 800-859-5995 ; Fax: 512-224-8585 Email: information@texasmutual.com Website: www.texasmutual.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Competitive premiums ■ Brokered Business: Accepted ■ States Entered in: TX For more info, check out our ad on pages 3 & 5 (South Central) Texas Oil & Gas Association Workers’ Comp Safety Group Contact: Jim Sierra Phone: 512-478-6631 ; Fax: 512-472-3859 Email: jsierra@txoga.org Website: www.txoga.org ■ Markets Offered: Oil & Gas Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $0 ■ Brokered Business: Accepted ■ States Entered in: TX ■ Admitted Status: Admitted ■ Carriers Represented: Texas Mutual Ins. Company The American Equity Underwriters, Inc. Contact: Secily Dumas Phone: 251-415-3638; Fax 251-690-4299 Email: secily.dumas@amequity.com Website: www.amequity.com ■ Markets Offered: USL&H ■ Phone Inquiries: Accepted ■ Minimum Premium: $15,000 ■ Limits: Federal Acts - Statutory, EL - $1M ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: N/A, U.S. Dept. of Labor Approved ■ Carriers Represented: U.S. Department approved carrier for USL&H and extensions

May 4, 2015 INSURANCE JOURNAL-NATIONAL REGION | 41

2015 Workers’ Compensation Directory The Hamilton Wharton Group, Inc. Contact: W. Taylor Phone: 212-344-6000 ; Fax: 212-344-0007 Email: wtaylor@hamiltonwharton.com Website: www.hamiltonwharton.com ■ Markets Offered: Workers Comp for Nursing Homes and Assisted Living Facilities ■ Phone Inquiries: Accepted ■ Minimum Premium: $30,000 ■ Brokered Business: Accepted ■ States Entered in: NY ■ Admitted Status: Admitted ■ Carriers: NY State Insurance Fund – Safety Group 580 The Mechanic Group, Inc. Contact: Marc Katz Phone: 845-735-0700 ; Fax: 845-735-8383 Email: mkatz@mechanicgroup.com Website: www.mechanicgroup.com ■ Markets Offered: Workers’ Comp and all other lines for Security Guards, Alarms and Investigators. ■ Phone Inquiries: Accepted ■ Minimum Premium: $7,500 ■ Limits: All ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers: The Hartford, Chartis, Magna Carta

The MEMIC Group

Contact: Karen Schwartz Phone: 207-791-3350 ; Fax: 207-482-4169 Email: kschwartz@memic.com Website: www.memic.com/thechoice ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Brokered Business: Not Accepted ■ States Entered in: All Non-monopolistic States ■ Admitted Status: Admitted We’re specialists in workers’ compensation. Licensed across the country and rated A (Excellent) by A.M. Best, MEMIC understands the workers’ comp insurance business. From our workplace safety expertise to our refined knowledge of best practices for managing claims, when it’s time to choice a workers’ compensation insurer, the choice is MEMIC. Total Program Management Contact: Matt Blake Phone: 631-319-6210 ; Fax: 631-319-6208 Email: matthew.blake@tpmrisk.com Website: www.tpmrisk.com ■ Markets Offered: Excess Workers’ Comp, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: AmTrust, Berkshire Hathaway, Crum & Forster, Falls Lake, American Mining

Truckers Insurance Associates Contact: Sandi Filean Phone: 800-652-9515 ; Fax: 515-276-1418 Email: sfilean@truckers-insurance.com Website: www.truckers-insurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $25 ■ Brokered Business: Not Accepted ■ States Entered in: AR AZ CO IA IL IN KS MI MN MO NE OK SD UT WI ■ Admitted Status: Admitted ■ Carriers Represented: Travelers/Northland, and Dakota Truck Underwriters

Work First Casualty Company Contact: Bruce Winterrowd; VP of Underwriting/Mktg Phone: 630-416-7954 Email: bwinterrowd@workfirstcasualty.com Website: www.workfirstcasualty.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $100,000 ■ Limits: $1,000,000 Employer’s Liability ■ Brokered Business: Accepted ■ States Entered in: All States except Monopolistic or CA, CO, MA, ME, NC, NH and VT ■ Admitted Status: Admitted ■ Alliances With: Broadspire

Tryton Insurance Group, LLC Contact: Yolanda Lee Phone: 713-351-8237 ; Fax: 877-222-0362 Email: ylee@trytoninsurance.com Website: www.trytoninsurance.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Brokered Business: Not Accepted ■ States Entered in: All except CT DE ME NJ VT ■ Admitted Status: Admitted ■ Carriers Represented: Hartford, Travelers, Safeco / AmericaFirst, Zenith, AIG, CNA, Accident Fund (TX only)

WorkCompGuard / Willis Programs Contact: Eric Langlois / Kortney Borgosz Phone: 802-264-9525 / 603-334-3085 Email: eric.langois@willis.com Email: kortney.borgosz@willis.com Website: www.workcompguard.com ■ Markets Offered: Workers’ Comp for Home Healthcare, Medical Staffing/Equipment Providers/ Facilities, Dealers, Destination Resorts, Community Associations, Manufacturers, Distributors, Installers, Business Equipment Rental, Restaurants, Pizza Delivery and hundreds of other classes. ■ Phone Inquiries: Accepted ■ Minimum Premium: As low as $1,000 depending on class ■ Brokered Business: Accepted ■ States Entered in: Most States ■ Admitted Status: Admitted ■ Carriers Represented: Various

U.S. Risk Insurance Group, Inc. Contact: Ralph Tribendis Phone: 804-441-6126 Email: ralph.tribendis@usrisk.com Website: www.usrisk.com ■ Markets Offered: Workers’ Comp (All Lines), Monoline Workers’ Comp, Excess Workers’ Comp, USL&H, Occupational Accident, Non-Subscriber ■ Phone Inquiries: Accepted ■ Minimum Premium: Varies ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: We access Work Comp from 15+ Carriers Unisource Program Administrators Contact: Lana Potts-Buri Phone: 941-308-1918 Email: Lana.Potts-Buri@UnisourcePA.com Website: www.UnisourcePA.com ■ Markets Offered: Workers’ Comp and P & C Markets ■ Phone Inquiries: Accepted ■ Minimum Premium: $1,000 ■ Limits: As Requested ■ Brokered Business: Not Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: AIG, AmTrust, Amerisafe, CastlePoint, Chartis, Employers, FirstComp, FFVA, LION, Normandy Harbor, eQBE, and V3 Insurance Partners USG Insurance Services, Inc. Contact: Kristen Skender Phone: 724-754-9007 ; Fax: 724-265-5751 Email: kskender@usgins.com Website: www.usgins.com ■ Markets Offered: Excess Workers’ Comp, USL&H, Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $500 ■ Limits: Varies ■ Brokered Business: Accepted ■ States Entered in: All States except HI ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: 20+ carriers

42 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2015

World Wide Specialty Programs

Contact: Dorothy Taylor ; Robert Thompson Phone: 800-245-9653 or 631-390-0900 Fax: 631-390-0922 Email: dtaylor@wwspi.com ; rthompson@wwspi.com Website: www.wwspi.com ■ Markets Offered: Workers’ Comp ■ Phone Inquiries: Accepted ■ Minimum Premium: $50,000 ■ Limits: State Mandated ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted ■ Carriers Represented: Zurich World Wide Specialty Programs has lead the market with the most comprehensive program for the staffing industry for over 50 years. Our partnership & understanding of how the staffing industry works allows us to be the premier source for all Staffing insurance lines including Staffing Workers’ Comp. Wrap Up Insurance Solutions Contact: Brian Billhartz Phone: 636-489-0185 ; Fax: 636-536-7473 Email: bbillhartz@trekadmin.com Website: www.trekadmin.com ■ Markets Offered: Excess Workers’ Comp, Workers’ Comp, Wrap Ups ■ Phone Inquiries: Accepted ■ Minimum Premium: N/A ■ Limits: $100MM ■ Brokered Business: Accepted ■ States Entered in: All States ■ Admitted Status: Admitted & Non-admitted ■ Carriers Represented: Zurich, AIG, ACE, Liberty Mutual, ARCH, Old Republic, Travelers www.insurancejournal.com

IDEA EXCHANGE

Technology How Analytics Technology Can Speed Integration Post-M&A

he record number of merger and acquisition (M&A) transactions involving insurance brokers and agents throughout the United States in the past year underscores the imperative for these firms to accelerate growth and compete more effectively. But for brokers and agencies in an acquisition mode, By Kabir Syed finding the right target at the right price is only part of the challenge. Once a deal is closed, the real work begins. Combining firms often must act swiftly to integrate operations, systems, data, products, and marketing to start reaping the expected benefits â&#x20AC;&#x201D; including increased market share, operating efficiencies, marketing and competitive advantages. Delays mean brokers have less time to hurdle such challenges as aggressive efforts by competitors to poach accounts and top producers. Today, new analytics technology can help speed post-M&A integration and enable leadership to overcome many of the obstacles that have stalled or limited the success of brokerage and agency combinations in the past. Here are some of the critical areas where analytics technology is helping. Driving Efficiency In addition to providing leadership with a line of sight across all of a brokerageâ&#x20AC;&#x2122;s operations, todayâ&#x20AC;&#x2122;s technology enhances the ability of top management to identify and quantify key opportunity areas for the combined organization to grow organically. Specifically, executives can pinpoint growth opportunities for the combined firm by geography, client industry sector, coverage line, and client size among other variables. At the same time, technology enables business leaders to analyze the performance of individual producers and business segments over time. In the context of a business combination, this equips leadership www.insurancejournal.com

with the insights needed to develop a comprehensive integration strategy. Underlying this initiative are the hard numbers and trends to help determine how to redeploy resources where they are likely to yield the greatest results as well as to identify opportunities for cost savings and the need to address redundancies across the combined enterprise. The ability to move forward with informed and timely decisions on all of these matters can enhance productivity and help reduce the employee turnover of key producers or top performers. Boosting Productivity For individual producers and their support teams, the latest technology platforms offer the ability to benchmark client insurance purchases, program structure, coverages, limits, premium and other program elements against peers by industry, geography, size, and other factors. Some systems also have tools to track insurance company risk appetite by coverage line, industry group, geography, client size, as well as other variables. When brokerage organizations are combined, their collective knowledge and placement experience can be captured quickly and made available to individual producers at both predecessor firms. Armed with an

expanded resource, producers can begin applying all this information to their existing client relationships and new business opportunities. Facilitating Teamwork In the aftermath of a merger or acquisition, a common reaction among many producers and their supporting casts is to be reticent to share their account information and details regarding their external and internal relationships with supervisors and business managers responsible for the integration process. Unfortunately, these types of responses can stall integration initiatives and delay or reduce opportunities to achieve synergies and other anticipated gains. At the operational level, newer technology platforms offer tools for client executives and their supervising executives to benchmark and analyze coverage limits and program structure by individual client, pointing out opportunities where higher limits, better program structure or other types of coverage may provide specific benefits to an individual account. This opens the door for client executives to form teams to pursue cross-selling opportunities and re-engage clients and prospects of both predecessor firms by introducing new resources available in the combined organization. continued on page 44 May 4, 2015 INSURANCE JOURNAL-NATIONAL | 43

IDEA EXCHANGE

Technology

continued from page 43 External Relationships Mergers and acquisitions involving brokerages and agencies sometimes are met with skepticism and concern by existing and potential clients as well as insurers. Here, technology can help merging firms reinforce and reinvigorate their external relationships. In some cases, combining firms have a number of shared accounts with one predecessor brokerage handling certain coverage lines and the other predecessor firm handling other lines or providing ancillary risk services. Client tracking features in new technology platforms enable the combined organization to identify these situations quickly and give the organization the ability to be proactive in contacting any shared clients, designating appropriate account servicing teams and managing the accounts going forward. With respect to insurer relationships, today’s technology platforms enable brokers and agents to track relationships with insurers by account and on an aggregate basis. Combining firms will quickly gain the ability to engage their insurance company partners with a clear understanding of how and where business has been generated.

New analytics technology can help speed post-M&A integration and enable leadership to overcome many of the obstacles found in brokerage and agency combinations. Navigating Logistics As they try to determine the best ways to upgrade their information systems, many brokerages and agencies today remain mired with outdated legacy systems that were able to perform limited functions efficiently, but lacked the ability to deliver the data and analytical capabilities critical to running an expanding enterprise in the current business environment. In terms of combining brokerages involved in a merger transaction, these systems may have limited ability to capture and retain the information needed to make critical decisions regarding personnel, operations, business segments, and insurance company relationships. Many providers of new systems offer the

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ability to upload information rapidly from across the enterprise or combined organization. They also provide accelerated training designed to optimize utilization and user benefits. This often includes a combination of in-person instruction and coaching, as well as online tutorials and readily available telephone and online helplines. The adoption of a single technology platform across the combined enterprise not only can align how individuals at all levels perform their specific functions, it also helps facilitate internal communication, coordination, and collaboration. Reconciling Corporate Cultures Often cited as the key reasons deals don’t meet expectations, cultural differences represent a significant obstacle in many mergers. Among brokerages and agencies, these range from variances in overall vision and strategic direction to differences in the autonomy of individual producers, offices, regions and practices. Firms may differ in their compensation structures and reward systems, approaches to client retention, sales and marketing, and insurer relationships. Although these all can be significant, in many cases they may be reconciled by a thoughtful and collaborative integration process that includes a clear and well-communicated vision for the combined enterprise. While not a panacea, the adoption of a universal technology platform for analyzing client business and performance can help get individuals at all levels on the same page. Along with clear direction from the top, the operational support and insights provided by current information technology systems can help remedy some of the more challenging cultural barriers to a merger’s success. New analytics technology offers an array of solutions to strengthen performance at all levels of brokerage and agency organizations, which have exciting implications for firms involved in M&A. Syed is the CEO of RiskMatch.

4/20/15 1:04 PM

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IDEA EXCHANGE

Agency Management Best of the Best: Supply and Demand Commanding the Highest Purchase Price

he dust has settled from 2014 and, next to 2012, produced the highest number of deals completed in insurance agency merger and acquisition deal count since MarshBerry began tracking. While the demand for high-quality organizations has not diminished, By Sarah Lucas supply appears to be falling off. We are seeing that agencies with consistent organic growth, sustainable profitability and youth in management that want to sell externally, are becoming an endangered species. Those kinds of agencies considered “high-quality” would generally be characterized by younger, vibrant leadership, a strong track record of producing new business, a focus in niches that enable scalable growth, compensation structures in line with the market and a base of operations in an attractive area with significant population density. This is not necessarily the average agency. These firms, generally termed “platform” agencies, are what we consider “the best of the best.” In 2014, “the best of the best” sold for approximately 8.64 times the base pur-

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chase price with an earn-out opportunity to increase the purchase price up to 11.44 times earnings before interest, taxes, depreciation and amortization (EBITDA). Contrast this to the average performance of 7.14 times EBITDA base purchase price and up to 9.22 times with the maximum earn-out (which we are seeing often requires growth in excess of 15 percent to 20 percent per year during earn-out). As the supply of the best agencies

continues to diminish, demand may force purchase prices even higher. Our research indicates that 2015 will be another active market, but any dramatic increase in interest rates is likely to have an immediate impact on the transaction pricing and structures. Securities offered through MarshBerry Capital Inc., Member FINRA and SIPC, and an affiliate of Marsh, Berry & Co. Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 (440354-3230). 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, and individual results may vary. Multiples are averages and do not imply that all deals fall within these parameters. Lucas is vice president at MarshBerry. Phone: 616723-8375. Email: Sarah.Lucas@MarshBerry.com

May 4, 2015 INSURANCE JOURNAL-NATIONAL | 45

IDEA EXCHANGE

The Competitive Advantage Movies and Agencies

id you ever see the movie about the famous ballplayer that did not follow the playbook? How by doing whatever he wanted regardless of the play called, he succeeded and all his teammates were happy? What an inspiring story that makes everyone feel so good about being selfish! Fantastic! A second movie By Chris Burand I recommend is “Karma.” It’s all about thinking good thoughts so that no instructions or leadership is required because through transcendental thought, everyone on a team communicates and has the same exact goals. When the credits rolled, I had goose-bumps as my optimism for life without ever having to have a constructive conversation again seemed possible. Of course these movies are figments of my imagination. The first likely doesn’t have a sellable plot because who wants to see a movie about a horrible person that succeeds while good people fail? The second might have a sellable plot as a fantasy movie, but it clearly is a fantasy … right? Benefits the Producer So why does agency after agency employ and even enable their producers and owners to be so selfish? Everyone knows that a team with a ballplayer who calls plays that only benefit the one player has no future. Yet in agency after agency that I visit, producer behavior benefits the producer far more than the producer benefits the agency. For example, consider the producer who does not have to follow procedures so he or she doesn’t have to do as much work or the right work. The amount of work required is fixed. Either the producer or the CSR will do it. The producer is paid, at least in theory, to perform specific actions per the agency’s procedures/job descriptions. If they force that work onto CSRs, they are paid more than they are worth and the CSRs are 46 | INSURANCE JOURNAL-NATIONAL May 4, 2015

paid less. The agency suffers because the CSRs suffer. If the producers cut corners, they are paid the same regardless of the errrors and omissions (E&O) exposures they create (even, most of the time, if the agency eventually incurs a claim). Again, the producer benefits and the agency suffers. Another example is a producer that sells unethically. The producer makes the same amount of money and if they are already selling unethically, or maybe “questionably” is a nicer word, they likely do not spend much time worrying about their reputation. But the agency owner and staff likely do worry and take pride in their reputation. Another example is when producers sell small accounts. They make money — however small of the amount it may be (disregarding opportunity cost). But the agency loses actual real dollars. The agency loses but the producer wins. Another example is the producer who insists on some new broker appointment so they can write a $5,000 premium policy for which they will make $20. Why they go to so much effort to make $20 is beyond me, but still the agency loses and the producer at least nominally wins. Selfish Behaviors These are all selfish behaviors. Winning by allowing one player to call the shots, or worse yet and more common, allowing all the players to call their own shots, is not

a winning formula. Think about this in a team sport. The result is chaos. These producers and owners are all about them. They are selfish. A great example is E&O. I see producer after producer refusing to use coverage checklists because they’re uncomfortable for many reasons. They “need” to be confident selling and a checklist makes them uncomfortable so they don’t use them. Meanwhile, the agency’s E&O exposure greatly increases. The producer makes their money, the client is not offered the coverages they need, the agency’s E&O exposure increases and possibly their profit is less than $0. Team Business The agency business is a team business all the time, not just when a producer wants the team’s support. At least this is the case in the best agencies. The best agencies operate as a full-time team because they have leaders that lead the entire team. Leading the entire team means using authority to force producers to play by the rules or culling them. A rogue producer rarely benefits an agency unless they have at least $1 million in commission. I know it is scary to cull a $400,000 producer. My experience though is they are not really $400,000 producers unless they have many good people supporting them. Let continued on page 48 www.insurancejournal.com

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The Competitive Advantage continued from page 46

Everyone knows that a team with a ballplayer who calls plays that only benefits the one player has no future.

them run havoc in another agency if they think they’re so good they can call their

own plays. The solution lies in understanding the

Advertisers Index Readers, browse, contact, or do product searches on any of our full page advertisers at: www.insurancejournal.com/adshowcase/

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Liberty International Underwriters www.liu-usa.com 9, 51 Louisiana Commerce & Trade Assoc. www.lctacomp.com SC9 M.J. Hall & Company www.mjhallandcompany.com W6 MEMIC www.memic.com SE6; E1 Monarch E&S Insurance Services www.monarchexcess.com W1, W8 National General Insurance www.nationalgeneral.com 19 Pacific Gateway Insurance Services www.pgiainsurance.com W3 Patriot National www.patnat.com 2 PersonalUmbrella.Com www.personalumbrella.com 7 Philadelphia Insurance Companies www.phly.com 17 SIAA www.siaa.net 3; W7 State Fund First www.statefundfirst.com W5 Texas Mutual www.texasmutual.com SC3, SC5 The Hartford www.privatecompanyinsurance.com 14, 15

fantasy of Karma. Most agency owners do not have the desire to manage people, much less difficult people. They really, really, really just want Karma to seep silently into all their employees’ brains and naturally do what is right without contention or conflict. An appealing fantasy! Changing people is a fool’s chase. Unless the agency leader wants to change, which often means a willingness to be an inside leader dealing proactively with conflicts (at least to them it appears as conflicts though they may not necessarily be so), the only solution is hiring someone to lead your people internally. This person has to have no interest in narcissists. They have to have no interests in fantasy Karmas. They have to believe they are leading a team and the team will succeed or fail together. The best agencies already know this and have or are in the process of constructively managing selfishness. What are you doing in your agency? Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719485-3868. E-mail: chris@burand-associates.com.

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Closing Quote

Challenges Continue as Drone Regulations Take Shape

U By Tom Karol

nmanned aerial systems, or drones as they are more commonly known, could serve important roles for property/casualty insurance companies, many of which have already begun planning to make use of the technology. By enabling swifter claims servicing in disaster areas and other places closed by government agencies or deemed unsafe for human adjusters, drones could help companies settle claims faster for victims of natural disasters. On a day-to-day basis, insurance underwriters and claims adjusters could use drones to more safely examine pitched roofs and other potentially dangerous conditions. However, commercial use of drones is currently prohibited under federal law, although some companies — including several insurers — have received exemptions from the Federal Aviation Administration allowing them to use drones for specific purposes. The FAA has proposed more permanent regulations that would eliminate the need for the case-by-case exemptions, but these, too, present challenges. The proposed rules would allow for commercial use of drones weighing less than 55 pounds, to go no faster than 100 mph, and no higher than 500 feet. Additionally, the drone would be required to stay within the line of sight of the operator or an observer working with the operator. It

50 | INSURANCE JOURNAL-NATIONAL May 4, 2015

would also be prohibited from flying over any person not directly involved in the operation. If adopted the proposed rules won’t take effect until next year at the earliest. But it’s easy to see how such rules could limit drone use in urban or suburban areas where it would be very difficult not to fly over people during inspections or claims adjusting. Or how in rural parts of the country the line of sight requirement could reduce the efficiency drones provide to farmers overseeing large fields of crop or livestock. In comments to the FAA, NAMIC said the proposed FAA rules are a very good first step, but added that some of the rules — particularly the required line of sight and the prohibition against overhead flights — will need to be tempered for commercial drone use to really develop. Further complicating the issue is that it is by no means clear which government authorities can and will regulate how drones are used. The FAA’s proposed rules focus on safety in the national airspace. However, the Commerce Department is looking at privacy issues; the Federal Communications Commission will review communications issues; and Departments of Justice and Homeland Security will opine on cybersecurity and national security issues. Further limits or regulations governing drone use could also be imposed at the state and local levels. Such limits and controls are likely due to the public perception of drones, which is largely unfavorable. A Chubb Group survey found that 73 percent of respondents worried a drone could crash into their house; 55 percent worried that drones could poke out an eye or cause other bodily injury; and 78 percent were concerned that America could become a surveillance state. Property/casualty insurers are ready and willing to make use of drone technology to make their operations safer and more efficient and also to provide coverage for commercial policyholders who are looking to do the same for their own companies. But doing so requires an understanding of what constitutes appropriate drone use, and setting the “rules of the road” that could help in establishing liability when accidents inevitably happen. Unfortunately, the regulatory process continues to move at a far slower pace than the advancement of technology, but NAMIC is continuing to work to ensure that the final outcome will be a system that is safe, secure, and effective for all Americans. Karol is the general counsel – federal for the National Association of Mutual Insurance Companies (NAMIC), and the author of a recent white paper, “Unmanned Aerial Systems/Drones - Regulation, Liability and Insurance Requirements.”

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