Insurance Journal West 2017-10-02 by Insurance Journal

WEST REGION Calif. Commissioner on MJ Insurance Arizona Court And Medical Marijuana California Comp Medical Review

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Contents October 2, 2017 • Vol. 95 No. 19 • West

West W1 Final Lawsuit Settled in Deadly San Francisco Plane Crash

W1 FINAL LAWSUIT SETTLED IN DEADLY SAN

FRANCISCO PLANE CRASH

W2 California Commissioner High on Marijuana Insurance, Sums up Trump Battle

National 8 States Should Implement Stronger Safeguards for Consumers in Natural Disasters: Report 12 Spotlight: Why Restaurants and Bars Are Underinsured

W4 Fines for Workplace Deaths in Nevada Reduced Often

16 Special Report: Top Workers’ Comp Writers

W4 California Governor Signs Plan to Spend $1.5B in Climate Money

Idea Exchange

20 Special Report: Best Agencies to Work For 2017 21 Overall Best Agency to Work For: Morris & Garritano 22 GOLD Best Agency to Work For – East: Mackoul & Associates 23 GOLD Best Agency to Work For – Midwest: Gibson 24 GOLD Best Agency to Work For – South Central: BKCW 25 GOLD Best Agency to Work For – Southeast: LassiterWare 26 GOLD Best Agency to Work For – West: LP Insurance Services

32 7 Ways to Integrate New Media and Traditional PR to Build Your Brand

28 Employer Leadership in Disaster Recovery

W4 Arizona Supreme Court Won’t Review Lower Court Ruling on Medical Marijuana W6 Study Shows California Workers’ Comp Medical Review Volume May Be Leveling off

STATES SHOULD IMPLEMENT STRONGER SAFEGUARDS FOR CONSUMERS IN NATURAL DISASTERS: RUTGERS REPORT

34 The Competitive Advantage: 10 Accounting Tips to Know 38 Closing Quote: What Employees Really Want

Departments 11 Declarations 11 Figures 14 Business Moves

34 10 AGENCY ACCOUNTING TIPS

TO KEEP IN MIND

4 | INSURANCE JOURNAL | WEST OCTOBER 2, 2017

30 MyNewMarkets

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OPENING NOTE

Write the Editor: awells@insurancejournal.com

Rising Cost of Employee Benefits

I Publisher Mark Wells mwells@wellsmedia.com

EDITORIAL

SALES

Editor-in-Chief Andrea Wells awells@insurancejournal.com

West Sales Dena Kaplan (800) 897-9965 X115 dkaplan@insurancejournal.com

East Editor Elizabeth Blosfield eblosfield@insurancejournal.com

Romeo Valdez (800) 897-9965 X172 rvaldez@insurancejournal.com

Chief Content Officer Andrew Simpson asimpson@insurancejournal.com

Southeast Editor/MyNewMarkets Amy O’Connor aoconnor@insurancejournal.com South Central Editor/ Midwest Editor Stephanie K. Jones sjones@insurancejournal.com West Editor Don Jergler djergler@insurancejournal.com International Editor L.S. Howard lhoward@insurancejournal.com Columnists Chris Burand

Chief Marketing Officer Julie Tinney (800) 897-9965 X148 jtinney@insurancejournal.com

South Central Sales Mindy Trammell (800) 897-9965 X149 mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA and CT) Howard Simkin (800) 897-9965 X162 hsimkin@insurancejournal.com Midwest Sales Lisa Whalen (800) 897-9965 X180 lwhalen@insurancejournal.com East Sales (NY, PA and CT only) Dave Molchan (800) 897-9965 X145 dmolchan@insurancejournal.com Advertising Coordinator Erin Burns (619) 584-1100 X120 eburns@insurancejournal.com

Contributing Writers

Insurance Markets Manager Ebba Blitz, David Coons, Michelle Kristine Honey (619) 584-1100 X132 Griffith, Steven J. Groeschen, Don khoney@insurancejournal.com Silver, Damian J. Troise Social Media Manager IJ ACADEMY OF INSURANCE Ly Short (619) 890-7735 Director Lshort@insurancejournal.com Patrick Wraight pwraight@ijacademy.com Classifieds, Jobs, Agencies Wanted/For Sale Associate Director Sr. Sales & Marketing Coordinator Barbara Whiffen Kelly De La Mora (800) 897-9965 X125 bwhiffen@ijacademy.com kdelamora@insurancejournal.com

ADMINISTRATION

Chief Financial Officer Mark Wooster mwooster@wellsmedia.com

MARKETING

DESIGN/WEB

Chief Technology Officer/ Chief Innovation Officer Joshua Carlson jcarlson@insurancejournal.com

Marketing Director Derence Walk dwalk@insurancejournal.com

V.P. of Design Guy Boccia gboccia@insurancejournal.com

Marketing Administrator Gayle Wells gwells@insurancejournal.com

Senior Web Developer Chris Thompson cthompson@insurancejournal.com

NEW MEDIA

Web Developer Jeff Cardrant jcardrant@insurancejournal.com

New Media Producer Bobbie Dodge bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop awaldrop@insurancejournal.com

Web Developer Terrance Woest twoest@wellsmedia.com

CIRCULATION

Circulation Manager Elizabeth Duffy eduffy@wellsmedia.com

t’s no secret that health insurance costs more and employers are planning for that trend to continue. Employers expect that their average cost per-employee for health benefits will rise by 4.3 percent in 2018, which is above the average increase of 3 percent of the past five years, according to Mercer’s National Survey of Employer-Sponsored Health Plans. The survey also revealed that employers continue to struggle to control cost for pharmaceuticals, which will rise more than 7 percent next year as spending on new specialty medications skyrockets. The projected underlying cost growth from 2017 to 2018 is 6.0 percent. That is the increase employers would expect if they made no changes to their medical plans; however, the survey found that 46 percent of employers will take steps to reduce cost growth in 2018. Offering lower-cost, high-deductible health plans has been an important strategy for holding down cost over the past decade, and the need to minimize exposure to the ACA’s excise tax on high-cost plans has accelerated this trend. “Employers find the challenge of juggling cost-management objectives and affordability issues for employees gets harder every year,” said Tracy Watts, senior partner and Mercer’s leader for health reform. “Consumerism has a role in addressing rising costs, but there are many factors that drive costs, separate and distinct from relative generosity of the plan design.” Employers must contend with cost increases that occur with medical advances – like the introduction of new medications used to treat complex conditions like cancer, multiple sclerosis, and hepatitis C. Respondents to Mercer’s survey reported that spending on these specialty drugs rose by about 15 percent at their last renewal, pushing up growth in the overall cost of prescription drugs to more than 7 percent. Strategies that employers are adopting to manage medical costs without raising employee out-of-pocket spending include providing care coordination and support for highFOR QUESTIONS cost claimants. Employers are also addressREGARDING SUBSCRIPTIONS: Call: 855-814-9547 ing quality by using incentives to direct Outside the U.S., call 847-400-5951 or you may subscribe or change your address online at: employees to Centers of Excellence and other insurancejournal.com/subscribe high-performance provider networks. And Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media they are shifting away from traditional fee-forGroup, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 service provider reimbursement toward new per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this pubpayment models. lication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended The results listed are preliminary findings to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2016 Wells from Mercer’s National Survey of EmployerMedia Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Sponsored Health Plans 2017. Insurance Journal is a publication of Wells Media Group, Inc.

‘Employers find the challenge of juggling cost-management objectives and affordability issues for employees gets harder every year.’

Andrea Wells Editor-in-Chief

6 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: For reprints of articles in this issue, contact: Kelly De La Mora at 1-800-897-9965 ext. 125 or kdelamora@wellsmedia.com Visit insurancejournal.com/reprints/ for more information.

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National

States Should Implement Stronger Safeguards for Consumers in Natural Disasters: Rutgers Report By Elizabeth Blosfield

s homeowners file insurance claims in the wake of Hurricanes Harvey and Irma, many could find their level of protection depends on the state where their damaged home is located, according to a research report released by the Rutgers Center for Risk and Responsibility at the Rutgers Law School in Camden, N.J. The report, “State Rankings of Homeowners Insurance Protections: Consumer Remedies,” examines what claimants are surprised or disappointed by, and how some of the best states are protecting insurance consumers, said Jay Feinman, co-director of the Rutgers center

and a professor at the law school. The report is part of the Essential Protections for Policyholders legislative reform project, an initiative of the Rutgers Center for Risk and Responsibility in cooperation with United Policyholders, an advocacy organization and information resource for insurance consumers. The two-year project focuses much of its research on consumers who file ordinary claims, with the goal to identify and expand on essential protections to strengthen what can be a complicated and challenging process. There is a significant knowledge gap in how homeowners’ coverage varies nationally, according to Feinman. The project focuses on state legislation and regulation

8 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

concerning the relationship between homeowners and insurance companies. Protections found as essential for homeowners were selected by importance based on United Policyholders’ and Feinman’s experience in the insurance industry. Feinman and Amy Bach, executive director at United Policyholders, advocates for the revision of state insurance laws to better protect disaster victims. This comes at a time when Florida and Texas have felt the effects of two major hurricanes. Hurricane Harvey made landfall on August 25 as a category 3 hurricane with 130 mile-per-hour winds, just east of Corpus Christi, Texas, in the Rockport/ Port Aransas communities. Harvey’s winds

continued on page 10

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caused extensive damage in the area and farther inland, resulting in 70 deaths. The Insurance Council of Texas (ICT) has placed the insured losses from Harvey at $19 billion, including an estimated $11 billion in flood losses insured by the National Flood Insurance Program. Reuters also reported that Florida policyholders so far have filed nearly $2 billion in claims to insurers for damage from Hurricane Irma, according to the state’s insurance regulator. According to Reuters’ reports, Irma was ranked as one of the most powerful Atlantic storms on record before striking the U.S. mainland as a Category 4 hurricane on September 10. The storm killed at least 33 in Florida.

Insurance Protection

Feinman’s research says half of the states in the U.S. allow policyholders to sue insurance companies only if they have intentionally or recklessly denied a claim. Nearly 15 states give consumers no remedy if insurers act wrongfully, making recovery from a natural disaster difficult. “Insurance funds are make or break for an individual’s ability to rebound after a disaster,” Bach said. “History tells us that those funds don’t always flow as they should, and many have to fight to get the protection they’ve paid for.” Feinman added that for an insurance policy to provide the protection and security

it promises, the policyholder must have access to a fair and efficient process for resolving disputes and remedying improper conduct. “Homeowners who do not receive prompt payment may have additional expenses due to being out of their homes, and may suffer extreme aggravation and distress,” Feinman says. “If policyholders have to pay attorneys and incur other litigation expenses to get what they are entitled to, they are never fully compensated for their losses.” The report suggests that disaster victims should have flexibility in coverage provisions and the claims process; clear rules about causes of loss to avoid unfair gaps in coverage; and protection against sudden dislocations in the insurance market. It outlines current state laws and calls for updated statutory language to provide more certainty for insurance companies and better protection for policyholders.

Consumer Remedies

The project also issued a series of rankings by state on what it identified as key issues in insurance regulation. The latest state rankings for the project are based on the protection and security that a homeowners policy provides when a policyholder files a claim, and what the project sees as key elements in providing policyholders with effective remedies for disputed claims. Five stars served as the highest ranking in the report, and

10 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

one star was the lowest. Hawaii and South Carolina ranked the best for consumer remedies, while New York, Wyoming, Washington, D.C., and Virginia ranked lowest. In Hawaii, which received a five-star ranking, the Insurance Division at the Department of Commerce and Consumer Affairs protects consumers by maintaining a 13-month freeze for insurers from exiting the homeowners insurance market and allowing the state’s commissioner to reactivate the Hawaii Hurricane Relief Fund to ensure access to coverage should a large event occur. “Hawaii residents mostly understand the susceptibility and isolation of the state during hurricane season, which leads to a generally more knowledgeable and prepared public,” Commissioner Gordon Ito said. “We will continue our efforts to better inform and protect consumers through appropriate platforms, outlets, methods and legislation.” “For South Carolina, our statutes regarding homeowners insurance are certainly adequate. However, it’s not necessarily what the statute says; it’s how insurance companies serve their policyholders, and we are ever mindful of that,” South Carolina Department of Insurance Director Ray Farmer said. “Generally, the insurance industry does a fantastic job. It’s our time to shine, and it’s their time to shine after a natural disaster, and they do.” When a state of emergency is declared by the Governor in the wake of a storm, it gives Farmer extra authority to issue an emergency regulation to allow adjusters to come in to the state and puts a moratori-

um on cancellation/ nonrenewals.

‘Insurance funds are make or break for an individual’s ability to rebound after a disaster.’ A spokesperson for the Virginia Bureau of Insurance, a state that ranked the lowest in the report, said the Bureau has an obligation to ensure licensed insurance companies comply with Virginia insurance law and applicable regulations. “The Bureau of Insurance assists thousands of consumers each year by responding to inquiries and complaints regarding an insurance policy,” the spokesperson said. Between January and August 2017, its staff has handled 1,589 complaints and re-covered more than $1,219,752 for consumers. In addition, they have assisted 4,862 consumers who called the section for help. In the future, the Rutgers project is advocating for more states to adopt a mediation program for property insurance disputes and an appraisal process providing neutral parties to assess aspects of a claim. It also calls for states to prohibit companies from including clauses in insurance policies that force policyholders to arbitrate claims instead of giving them a chance to have their case heard in court. “We have been doing as much work as possible with the states,” Feinman said. “We’re in this for the long-term, and Share every little bit helps.”

this article with a colleague. IJMAG.COM/12VK INSURANCEJOURNAL.COM

West

San Francisco - July 9, 2013: Boeing 777 Asiana Airlines Flight 214 being investigated by the NTSB after crash landing at San Francisco Airport on July 6, 2013.

Final Lawsuit Settled in Deadly San Francisco Plane Crash

California dentist who was aboard an Asiana Airlines plane that crashed in San Francisco four years ago, killing three girls and injuring roughly 200 others, has reached a settlement with the airline, ending what her attorney said was the last pending lawsuit in the U.S. stemming from the crash. Ronald Goldman, an attorney for Kyung Rhan Rha, said in late September that the terms of the settlement were confidential. But he said Rhaâ&#x20AC;&#x2122;s case was the last to get resolved of the dozens of passenger and crew lawsuits that had been consolidated before a federal judge INSURANCEJOURNAL.COM

in California. Rha and her daughter were among 291 passengers aboard Asiana Flight 214 from South Korea when it crashed at San Francisco International Airport on July 6, 2013. U.S. safety investigators said the pilots bungled the landing approach by inadvertently deactivating the planeâ&#x20AC;&#x2122;s key control for airspeed, among other errors. The plane slammed into a seawall at the end of a runway during final approach. The impact ripped off the back of the aircraft and scattered pieces of the jet across the runway as it spun and skidded to a stop. Two teenage girls who inves-

tigators say appeared not to be wearing their seatbelts died. A third girl died when she was accidentally run over by a firefighter responding in a truck. The 16-year girl was ejected from the plane and covered by flame-retardant foam when she was hit by the truck. The injured included two flight attendants who were thrown onto the runway. More than 100 injured passengers sued and reached settlements with the airline. The family of the girl struck by a firetruck sued the city of San Francisco and also reached a settlement. Settlement details have remained confidential. Copyright 2017 Associated Press. OCTOBER 2, 2017 INSURANCE JOURNAL | WEST | W1

WEST | News & Markets

California Commissioner High on Marijuana Insurance, Sums up Trump Battle By Don Jergler

t’s David vs. Goliath. That about sums up California Insurance Commissioner Dave Jones’ feelings on his efforts to keep the remnants of Obamacare up and running in his state while President Trump does his best to repeal and replace it. “I feel like a kid with a finger in the dyke as the president’s taking a big wrecking ball to the dyke,” Jones told an audience of insurance professionals and students at an insurance forum in late September. He said Trump is “trying to sabotage healthcare” by attacking individual mandates, the open enrollment period and the exchanges themselves. The forum was hosted by the Center for Insurance Studies, which is part of the Mihaylo College of Business and Economics at Cal State University Fullerton. The center regularly hosts speakers

to bring together the insurance community. Last year actor Arnold Schwarzenegger and Robert Hartwig, former economist and president of the Insurance Information Institute, headlined the forum. Jones was joined by representatives from the Orange County District Attorney’s office to speak about fraud, and an executive panel discussion on insurtech that included Jamie Hale, CEO and co-founder of Ladder Life Insurance, David Loughran, co-founder and chief economist of Praedicat Inc., and Dr. Tadashit Funahashi, chief innovation and transformation officer and assistant regional medical director for Kaiser Permanente Southern California. Jones, who is running for the state office of Attorney General in the 2018 election, hit on just about every subject the California Department of Insurance deals with in a nearly hour-long speech.

W2 | INSURANCE JOURNAL | WEST OCTOBER 2, 2017

He talked about his support for the National Association of Registered Agents and Brokers and the department’s efforts to make getting insurance agent licenses easier in California, dealing with ridesharing and the growth in the number of carriers writing rideshare insurance, cybercrime, fraud, wildfires, marijuana insurance, insurtech and autonomous vehicles. He addressed concerns that autonomous vehicles will bring about the end of California’s auto insurance consumer protection law, Proposition 103, as cars do more of the driving and insured drivers do less, potentially rendering the law obsolete. “We’re confident that Prop. 103 has sufficient protections,” Jones said. However, he acknowledged that there will likely be a time when the at-fault aspect of the law that governs rates will have to be examined. “At some point in the future … then we will have to take a look at these regulations,” he said. Jones, a staunch advocate of combating climate change who has pushed efforts to get insurers to disclose their coal investments, said global warming has increased wildfire risk in places like California and that he’s concerned that carriers will stop writing in wildfire prone areas. He said the department has already begun seeing carriers curtail writing insurance in some of the state’s riskier foothill areas. “We’re seeing some pullback by insurers in some parts of the state,” Jones said. He said the pullback hasn’t

yet impacted the FAIR Plan Association, the insurer of last resort for residents unable to find coverage through other insurers. The FAIR Plan provides basic coverage for fire up to $1.5 million for a structure and its contents. But he said he’s worried that when insurance for homeowners becomes increasingly harder to find, political pressure will mount and force the Legislature and the state’s insurance community to square off. “It’s something that we’re monitoring,” he said. Jones was high on a new law that enables Californian’s to light up cannabis for recreational purposes, which he believes presents an opportunity for the industry. He encouraged insurance professionals to consider getting into marijuana insurance because there isn’t enough insurance or insurance pros to go around who specialize in this. He estimated there are roughly 25 surplus lines insurers working on supplying coverage to various parts of the cannabis supply chain. “Increasingly, this is a very, very well financed and capitalized industry,” Jones said. He encouraged any insurance carriers listening to file products catering to the marijuana industry and he indicated they wouldn’t have much trouble getting rates approved because there’s currently not enough history for the department to debate rates. “We’re going to pretty much accept what you file with us,” Jones said. He added: “As your regulator, I would encourage you to get in. It’s a growing industry.” INSURANCEJOURNAL.COM

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WEST | News & Markets

Fines for Workplace Deaths in Nevada Reduced Often

ompanies that contested Nevada workplace safety citations after an employee died on the job received reduced fines about half the time. An analysis of state and federal Occupational Safety and Health Administration fatality records by the Las Vegas Review-Journal showed that the state agency reduced fines by $440 to $89,600 over the past seven years. The average reduction was $11,420. Jess Lankford, Nevada OSHA’s chief administrative officer, said it’s common for the agency to work with companies to reduce the fine if the employer corrects safety issues. More than 160 people have died on the job in southern Nevada from 2010 to 2016, resulting in fines for 36 companies, according to the newspaper’s analysis. The state agency will fine employers up to $50,000 for a first-time violation that caused

a worker’s death. Subsequent offenses raise the fine up to $100,000. The federal agency’s fines range from $12,675 to $126,749. Jordan Barab, former deputy assistant secretary of the national agency, said a fine is just “the cost of doing business” for many employers and that there is room to raise penalties. States with their own version of the agency have lower penalties in general than the federal OSHA, he said. High fines are intended to help deter other companies from violating safety standards, but sometimes they are not enough, said David Michaels, a former assistant secretary of labor for the national agency. “There’s pretty good evidence that talking about OSHA’s enforcement activities publicly influences other employers to prevent injuries, even when OSHA doesn’t do inspections,” Michaels said. “It’s very important to keep fines high, to talk

about those fines, and get press about them to get them into public awareness.” Criminal penalties could help make citations more effective after a death in the workplace, Barab said. “Local authorities in a lot of states in the past have pursued criminal prosecutions as well,” Barab said. “That’s another route to go, and that generally has a lot bigger impact on employers than OSHA’s relatively small financial penalties.” After 49-year-old Porfirio Gonzalez-Huerta fell 15 feet to his death at a construction site in August 2015, Nevada OSHA fined his employer, A-Team, $4,800. Violations included insufficient guards around an unprotected edge and insufficient

training for employees exposed to falls. The fine was reduced to $3,600 in an informal settlement. A representative with A-Team did not return the Review-Journal’s requests for comment. Copyright 2017 Associated Press.

California Governor Signs Plan to Spend $1.5B in Climate Money

Arizona Supreme Court Won’t Review Lower Court Ruling on Medical Marijuana

alifornia Gov. Jerry Brown has signed two bills that outline a plan to spend $1.5 billion on environmental initiatives using money from the recently renewed cap and trade program. The bills were signed in September, soon after lawmakers approved the plan to spend most of the money on incentives to promote a cleaner vehicle fleet. California has set an ambi-

he Arizona Supreme Court is letting stand a lower court’s ruling that the state’s medical marijuana law is constitutional in requiring counties to approve reasonable zoning regulations. Maricopa County Attorney Bill Montgomery had appealed a Court of Appeals ruling last December that rejected his argument that the state medical marijuana law is pre-empted by the federal Controlled Substances Act.

tious goal to have 1.5 million zero-emission vehicles on the road by 2025. Lawmakers hope the rebates will help close the price gap between traditional and electric vehicles. Funding will come from a program that limits annual carbon emissions and auctions off permits to pollute. The bills include a provision to help a union organize workers who assemble Tesla electric cars. Copyright 2017 Associated Press.

W4 | INSURANCE JOURNAL | WEST OCTOBER 2, 2017

The case in the appeal decided by the appeals court started with a dispute over whether Maricopa County officials had to approve zoning for a medical marijuana dispensary in Sun City. Montgomery argued that allowing Arizona’s medical marijuana program to stand despite undermines the “fundamental principle of the rule of law.” Copyright 2017 Associated Press. INSURANCEJOURNAL.COM

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Study Shows California Workers’ Comp Medical Review Volume May Be Leveling off

adopted IMR to give injured workers a chance to get an independent medical opinion on treatment requests that UR physicians deny or modify. Use of IMR grew sharply following passage of the law in 2013. However, the CWCI study tallied 86,066 IMR decision letters issued in the first half of this year in response to applications submitted to the state after a UR physician modified or denied a medical service request. At that rate, the volume of IMR letters in 2017 will decline 2.2 percent from the 2016 level, while the number of individual treatment requests decided in those letters will be down 0.6 percent – the first time IMR volume has not increased since the process took effect in 2013. “CWCI’s analysis of the 2017 IMR decisions found that after reviewing the

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he volume of workers’ compensation independent medical reviews in California appears to be tapering off, a new study shows. The IMR process was established by California lawmakers to resolve medical disputes. A study from the California Workers’ Compensation Institute shows that after increasing steadily since 2013, the IMR volume appears to be leveling off. The study also shows that in the first half of the year more than 91 percent of all utilization review physicians’ modifications or denials of treatment that were reviewed by an IMR physician were upheld. California law requires workers’ comp claims administrators to have a UR program to assure that care provided to injured workers is backed by clinical evidence outlined in medical guidelines adopted by the state. Most treatment requests are approved by UR, but in 2012 state lawmakers

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patient’s records and other information provided to support the request, IMR physicians upheld the UR doctor’s modification or denial of the service 91.3% of the time, which was virtually identical to the 91.2% uphold rate in 2016,” a CWCI release states. As in prior years, pharmaceutical requests accounted for nearly half of the 2017 IMR decisions, led by opioids, which represented 28.8 percent of all 2017 prescription drug IMRs, even though IMR doctors have consistently upheld the UR decision in 90 percent of the opioid requests, according to the study. Requests for physical therapy; injections, durable medical equipment; and MRIs, CTs and PET scans together comprised another 29 percent of the 2017 IMRs, the study shows. The study also confirmed that a relatively small number of physicians continue to account for most of the disputed medical services that go through IMR. A breakdown of IMR volume among high-volume physicians showed that the top 10 percent of physicians who were named in IMR decision letters issued between July 2016 and June 2017 (1,114 doctors) accounted for 85 percent of the disputed service requests during that period, while the top 1 percent (111 providers) accounted for 45 percent of the disputed services. The report can be purchased from the CWCI store.

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Figures

8.7%

The average reduction in workers’ compensation premium rates that Iowa businesses can expect next year. Gov. Kim Reynolds has said the drop is a result of workers’ comp reforms that took effect in July. But the National Council on Compensation Insurance, which filed the rate reduction request, says the reduction was based on data from premium years 2014-15 and a decrease in claims.

14%

$19.4 MILLION

Declarations Wakeup Call

“The Equifax breach was a wakeup call, and with this action, New York is raising the bar for consumer protections that we hope will be replicated across the nation.” — New York Governor Andrew Cuomo, who directed the New

York Department of Financial Services (DFS) to issue new a regulation making credit reporting agencies register with New York for the first time and comply with the state’s first-in-thenation cybersecurity standard. This proposed regulation was in response to the recent Equifax cyberattack that exposed the personal private data of nearly 150 million consumers nationwide.

Ready to Investigate

“As our South Florida community recovers from Hurricane Irma, the U.S. Attorney’s Office for the Southern District of Florida and our law enforcement partners stand ready to investigate and prosecute in federal court anyone who seeks to re-victimize, defraud or exploit the individuals and businesses in need.” — Acting U.S. Attorney Benjamin G. Greenberg for the

How much Oregon employers will see a key portion of their workers’ compensation costs drop on average in 2018, according to the Department of Consumer and Business Services. This marks the fifth year in a row that businesses will experience an average decrease in the pure premium. Altogether, the rate has declined by an average of 33 percent since 2013, according to the DCBS.

22,000

Southern District of Florida, one of four U.S. Attorneys in Florida and Puerto Rico who have formed a task force with the National Center for Disaster Fraud to monitor and combat any post-storm fraud activity.

He Knew Better But …

“I should have known better. … I did know better, but I agreed to take it.” — Matt Sorensen, a former McLean County (Illinois) Board

A corporate controller stole this amount from the information technology firm that employed him and has been sentenced to 6.5 years in prison. Jon Frank of Nokesville, Va., pleaded guilty to wire fraud earlier this year. He admitted stealing the money over a 10-year period from his company, Reston, Va.-based NCI Inc. The company, which provided IT services to government clients, was subsequently sold for $283 million.

$2 BILLION

chairman and ex-internal consultant for State Farm Insurance Co., who was sentenced to 12 months and a day in federal prison for fraud. Sorensen pleaded guilty to defrauding Chicago consulting firm McKinsey and Co. of nearly $500,000. He was indicted in August 2015 on five counts of wire fraud in connection with his work for State Farm.

Camping Out in Houston

“My primary concerns were it’s Houston at the end of summer and we’re staying in tents. … It’s been a lot better than I expected.”

— Mike Davidson, a catastrophe manager for business insurance for Farmers Insurance. Farmers sent more than 400 catastrophe insurance responders to Texas to assist with Hurricane Harvey-related claims. About 80 of them have quartered at “Farmers Village,” a camp outside of Houston, where newcomers are greeted with maps of their air-conditioned cabanas, the food tavern, fishing area and putting greens.

Watch for Gas The approximate number of barrels of oil, refined fuels and chemicals spilled in Texas in the wake of Hurricane Harvey, along with millions of cubic feet of natural gas and hundreds of tons of other toxic substances, according to Reuters. By comparison, roughly 190,000 barrels spilled in Louisiana in 2005 as a result of Hurricane Katrina. INSURANCEJOURNAL.COM

The total of claims to insurers for damage from Hurricane Irma as of September 17, according to data from the Florida Office of Insurance Regulation. The estimate of insured losses is based on preliminary data for nearly 335,347 claims.

“This strongly reinforces what we and community leaders have said repeatedly, which is that Aliso Canyon will never be safe and needs to be immediately closed.” — Alexandra Nagy of Food & Water Watch, said it’s evident

a shutdown of the largest gas storage facility in the West is required after it was announced that the facility stopped using a third of the wells pumping methane underground at high pressure just weeks after it resumed operations following a blowout that crippled it for nearly two years.

OCTOBER 2, 2017 INSURANCE JOURNAL | NATIONAL | 11

NATIONAL | Spotlight | Restaurants & Bars

Why Restaurants Are Underinsured By Andrea Wells

estaurants are probably one of the most underinsured classes of business in the industry. Competition, inadequate pricing, and owners refusing to buy needed coverages are some of the reasons cited by specialty brokers in this segment. Most restaurant and bar owners purchase property and liability coverage but there are often important coverages they forgo on purchasing that are critical to the viability of their business, said Debbie Bostick, account executive for retail and specialty business at wholesale broker Quirk & Co. based in San Antonio, Texas. One coverage often not purchased is business income coverage, she said. Business income can make or break a restaurant/bar after a disaster. “If they have a fire, and they’re down for

three months, the business income will come into play to help them get started back up again,” Bostick said. Kyle Stevens, president of Western Security Surplus, a wholesale broker and managing general agency based in Plano, Texas, agrees that business income is one area restaurants and bars may overlook. He added that another important coverage owners often don’t buy is spoilage and equipment breakdown. “That’s for cases where something happens – power goes off, fire or another situation – that causes the establishment to lose all their stock (food and beverage),” Stevens said. For establishments that sell alcohol, in particular establishments where more than 40 percent of sales involve alcohol, liquor liability is crucial but also an area that is underin-

12 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

sured, Stevens said. “A lot of places that sell liquor, especially in certain states such as Texas, don’t feel like they need liquor liability coverage and will only buy it if their landlord and/or lease contractually requires having the coverage,” Stevens said. Liquor liability is often not secured by smaller establishments unless building/property owners make it mandatory, he added. Another way restaurant and bars could be underinsured is by purchasing the wrong kind of policy to begin with, says Barry Moffett, president and CEO of Specialty Insurance in Brick, N.J. Moffett has been insuring restaurants and bars for more than 30 years. He says today’s highly competitive insurance market is leading this segment to potentially disastrous times. “There is something going on with insuring restaurants/ taverns that is eventually going to cause a lot of disruption in the market,” Moffett said. “Right now, you have a lot

of companies that have come into the market and are writing BOP policies (business owners policies) for restaurants but the rating is totally inadequate,” Moffett said. “BOP policies are rated on contents or building values, which have absolutely nothing to do with liability exposures.” According to Moffett, larger restaurants in bigger cities such as New York, are purchasing BOPs for their establishments and end up grossly underinsured. “It could be a 10,000-squarefoot restaurant but they are renting the property and maybe they only have $500,000 in contents, so the liability policy would be rated on that $500,000 but the place could be doing $10 million in receipts,” he said. “It’s a totally irrelevant and inaccurate rating base.” Moffett says perhaps the companies offering BOPs don’t understand the true exposures of the restaurant and bar industry. “When you insure restaurants anytime one of your clients gets involved in an auto accident after leaving you will be involved in a liquor (liability) suit whether there’s any merit to it or not,” he said. Even when liquor isn’t an issue, liability exposures are still heavy for this class, he said. “You are always going to get a trip and fall case. And when you write a large restaurant at $6,000 or $7,000 in premium, and you get one or two trip or fall (cases), that’s not going to even cover your investigation expense. “The exposures are just too significant between liquor liability and property. You can’t give away premium,” he said. INSURANCEJOURNAL.COM

NATIONAL | Business Moves

World Insurance Associates LLC, Bruen DiDio Associates Inc.

World Insurance Associates LLC, an independent insurance agency headquartered in Tinton Falls, N.J., has acquired Bruen Deldin DiDio Associates Inc. (BDD) of New York, Connecticut and Rhode Island. Following the transaction, Jeffrey Deldin joins World Insurance as a partner. BDD is a full-service insurance and bonding agency and brokerage with locations in Brewster, N.Y., Rocky Hill, Conn., and Coventry, R.I. It specializes in various industries, including construction, self-storage, flood services, manufacturing and retail. The company has a lineage that goes back several generations, with a history of servicing commercial and personal insurance clients in the New York, Greater New England, and Rhode Island territory dating back to 1872. Now, BDD has grown to a staff of 35 employees in three locations. The company is committed to providing customer service in

business and personal insurance services, bonding products and employee benefits. World Insurance Associates offers personal and business insurance solutions in 46 states. The company specializes in group benefits and insurance for transportation companies, the hospitality industry, coastal properties, high-networth individuals, and general commercial clients in diverse industries. It began business in 2012 and now serves more than 23,000 customers from 15 offices. It has completed 24 acquisitions so far.

Risk Strategies Company, Cornerstone Professional Liability Consultants

Risk Strategies Company, a privately held national insurance brokerage and risk management firm, has acquired insurance brokerage Cornerstone Professional Liability Consultants. Terms of the deal are undisclosed. Based in Philadelphia, Cornerstone specializes in medical malpractice insurance for physicians and surgeons.

14 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

Founded in 2002 and led by President Chris Zuccarini, Cornerstone works with more than 3,000 physicians and surgeons in solo practice and large groups across specialties, including radiology, orthopedics, anesthesia and neurosurgery. Its current client base covers much of the Northeast, including Pennsylvania, New York, New Jersey, Connecticut, Massachusetts and Delaware. In addition to its Philadelphia headquarters, Cornerstone has a presence in New York City. Following the acquisition, Cornerstone will become an integral part of Risk Strategies Company’s nationwide health care practice. As well as expanding Risk Strategies’ capabilities to help the industry manage liability and risk, the acquisition of Cornerstone serves to expand Risk Strategies’ Pennsylvania office. Risk Strategies Company offers risk management advice as well as insurance and reinsurance placement for property and casualty, health care and employee benefits risks. It serves commercial companies, nonprofits, public entities and individuals, and has access to all major insurance markets with offices in more than 35 locations nationwide. Its health care practice has grown over the past two years with the addition of San Diego-based health care brokerage specialist Dubraski & Associates, as well as Minneapolis-based reinsurance specialist Re-Solutions in 2015. In 2016, Risk Strategies acquired TSG Financial in New York, bringing with it a specialty home health care focus.

The Hilb Group LLC, Mid-State Insurance Agency Inc.

The Hilb Group LLC (THG), a property and casualty insurance and employee benefits broker based in Richmond, Va., acquired Massachusetts-based Mid-State Insurance Agency Inc. (MSIA). The transaction became effective September 1, 2017. MSIA is THG’s 37th acquisition since it was founded in 2009. Following the transaction, MSIA’s employees, including managing partners Jim Pietro and Paul Pietro, will join THG and will continue to operate out of its Worcester, Mass., and Taunton, Mass. offices. MSIA provides a range of property and casualty insurance and employee benefits products to businesses and individuals throughout the New England region. It specializes in developing tailored risk management and insurance programs for automobile dealerships. Its specialized products and services for auto dealerships will add depth to the capabilities of THG’s New England operations, while MSIA’s experienced team will further enhance THG’s presence in the region, said THG CEO Ricky Spiro in a company press release. For MSIA, being part of a larger organization will give its clients access to additional resources while continuing to work with the service teams they trust, Jim Pietro said. THG is a Top 50 middle market insurance agency and is a portfolio company of Bostonbased private equity firm, Abry Partners. THG seeks to grow through targeted acquisitions

continued on Page 18

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NATIONAL | Special Report | Top Workers’ Comp Writers

Workers’ Comp Premiums Up 1.0% in First Half of 2017 By Steven J. Groeschen

orkers’ compensation insurers reported a modest increase in direct written premiums — a 1.0 percent increase — during the first six months of 2017 versus the same period in 2016. Workers’ compensation direct written premiums have increased for seven straight years, according to a review by Demotech Inc. of second quarter 2017 data, as recently reported by insurers to the National Association of Insurance Commissioners. Written premiums at midyear 2017 of $27.7 billion are at an all-time high from the mid-year 2010 low of $18.8 billion. However, the growth rate has consistently slowed over this period, from a 9.5 percent increase in 2011 to a 1.0 percent increase in 2017. The top 25 workers’ compensation insurers show a much higher growth rate in direct written premium. The top 25 ranked by the highest dollar amount of direct written premium growth, reported a 26.6 percent premium increase during the first six months of 2017 versus the same period in 2016. All other workers’ compensation insurers combined reported that premium decreased by 2.9 percent. Ten of the insurers in this year’s top 25 were also in last year’s top 25. Insurer groups having three insurers in the top 25 include AmTrust and Berkshire Hathaway. For AmTrust, only

Wesco Insurance Co. was in last year’s top 25. For Berkshire Hathaway, NorGUARD Insurance Co. and Redwood Fire and Casualty Insurance Co. were in last year’s top 25. Most of the other top 25 insurers are members of large national and international insurer groups. Several of the top 25 insurers specialize in fronting arrangements or program business. These include Benchmark Insurance Co., Falls Lake Fire and Casualty Co., Safety National Casualty Corp. and State National Insurance Co. Two of the top 25 insurers wrote 100 percent of their workers’ compensation premium in California: Falls Lake Fire and Casualty Co. and Cypress Insurance Co. Premium growth from these insurers is notable since the Workers’ Compensation Insurance Rating Bureau of California

16 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

reported that the industry average charged rate has decreased by about 10 percent during the first six months of 2017 versus the same period in 2016.

The top 25 ranked by the amount of direct written premium growth, reported a 26.6 percent premium increase during the first six months of 2017. At its 2017 Annual Issues Symposium, the National Council on Compensation Insurance (NCCI) reported that workers’ compensation has had a combined ratio lower than many other lines of business over the past few years. This is good news as it implies that loss frequency and severity were lower than anticipated. However, rate decreases often follow periods of great profitability. NCCI has filed, or anticipates filing, loss cost

decreases in almost all states where it makes filings. The loss cost decreases are likely to more than offset expected payroll growth, which means the industry could observe a decrease in direct written premium for 2018 versus 2017. In addition to these loss cost changes, social trends and advances in technology continue to transform who, what, when, where and how work is done. Workers’ compensation was originally created to protect human workers in the industrial age. Robots, artificial intelligence and self-driving cars potentially could replace these workers. Will there be any workers left to compensate? Insurers and insurance legislators will need to continue responding to these changes with innovative products and services. Groeschen is chief consulting actuary and risk analyst with Demotech Inc., a Columbus, Ohio-based financial analysis firm. Website: www.demotech.com.

INSURANCEJOURNAL.COM

Industry Workersâ&#x20AC;&#x2122; Compensation Direct Premium Written (DPW) Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

DPW Through 6/30 $22,290,403,098 $19,778,970,114 $18,849,896,353 $20,637,242,525 $22,503,490,889 $24,240,086,960 $25,509,815,403 $26,806,165,877 $27,427,586,544 $27,704,595,481

Growth (Loss) ($2,331,854,742) ($2,511,432,984) ($929,073,761) $1,787,346,172 $1,866,248,364 $1,736,596,071 $1,269,728,443 $1,296,350,474 $621,420,667 $277,008,937

% Change -9.5% -11.3% -4.7% 9.5% 9.0% 7.7% 5.2% 5.1% 2.3% 1.0%

DPW Through 12/31 $41,404,882,438 $37,115,340,043 $36,343,784,520 $39,813,550,714 $43,759,337,726 $46,840,380,971 $49,114,607,909 $51,145,871,493 $52,156,517,340 --

Growth (Loss) ($4,729,199,253) ($4,289,542,395) ($771,555,523) $3,469,766,194 $3,945,787,012 $3,081,043,245 $2,274,226,938 $2,031,263,584 $1,010,645,847 --

% Change -10.3% -10.4% -2.1% 9.5% 9.9% 7.0% 4.9% 4.1% 2.0% --

Data Source: The National Association of Insurance Commissioners (NAIC), Kansas City, Mo., by permission. Information derived from an S&P Global Market Intelligence product. The NAIC and S&P Global Market Intelligence do not endorse any analysis or conclusion based upon the use of this data. This exhibit is based upon the initial reporting of second quarter 2016 data, estimated to be more than 95 percent of the companies that report quarterly. It excludes several large state funds (e.g. California, New York, Pennsylvania) which have not always reported second quarter data.

Top 25 Property/Casualty Companies

Based Upon Dollar Amount of Direct Premium Written (DPW) Growth Rank Company Name Group Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

AmTrust Insurance Co. of Kansas Inc. Falls Lake Fire & Casualty Co. NorGUARD Insurance Co. State National Insurance Co. American Home Assurance Co. Accident Fund Insurance Co. of America Starr Indemnity & Liability Co. Associated Industries Insurance Co. Wesco Insurance Co. Redwood Fire & Casualty Insurance Co LM Insurance Corp. Ohio Security Insurance Co. Hartford Casualty Insurance Co XL Specialty Insurance Co. Benchmark Insurance Co. Zurich American Ins Co. of IL American Guarantee & Liability Ins. Co. Old Republic Insurance Co. Midwest Employers Casualty Co. Charter Oak Fire Insurance Co. Trumbull Insurance Co. Cypress Insurance Co. Employers Assurance Co. Travelers Indemnity Co. of America Safety National Casualty Corp.

AmTrust NGH Group James River Group Berkshire Hathaway Group State National Group American International Group BCBS of Michigan Group Starr Group AmTrust NGH Group AmTrust NGH Group Berkshire Hathaway Group Liberty Mutual Group Liberty Mutual Group Hartford Fire & Casualty Group XL America Group Benchmark Holding Group Zurich Ins Group Zurich Ins Group Old Republic Group WR Berkley Corp. Group Travelers Group Hartford Fire & Cas Group Berkshire Hathaway Group Employers Holdings Group Travelers Group Tokio Marine Holdings Group

Top 25 All others Total

Year to Date Year to Date 6/30/2017 6/30/2016 $163,328,749 $75,221,496 $298,724,293 $88,356,044 $67,529,999 $265,626,410 $254,218,261 $104,796,832 $468,589,717 $171,037,976 $328,182,261 $120,197,752 $240,016,769 $114,950,959 $96,035,484 $92,100,679 $52,851,216 $368,536,061 $65,903,365 $272,675,869 $135,668,744 $204,988,910 $150,997,347 $251,083,885 $104,897,513

$52,292,747 $2,000,000 $234,060,351 $27,882,941 $15,693,977 $217,745,336 $208,797,489 $63,980,569 $428,465,137 $134,938,241 $294,258,424 $87,555,604 $209,334,570 $84,272,273 $67,719,867 $64,254,680 $26,798,879 $343,446,318 $42,612,545 $249,899,512 $113,037,490 $183,473,725 $130,372,427 $231,419,903 $85,250,937

Growth (Loss) $111,036,002 $73,221,496 $64,663,942 $60,473,103 $51,836,022 $47,881,074 $45,420,772 $40,816,263 $40,124,580 $36,099,735 $33,923,837 $32,642,148 $30,682,199 $30,678,686 $28,315,617 $27,845,999 $26,052,337 $25,089,743 $23,290,820 $22,776,357 $22,631,254 $21,515,185 $20,624,920 $19,663,982 $19,646,576

% Change 212.3% 3661.1% 27.6% 216.9% 330.3% 22.0% 21.8% 63.8% 9.4% 26.8% 11.5% 37.3% 14.7% 36.4% 41.8% 43.3% 97.2% 7.3% 54.7% 9.1% 20.0% 11.7% 15.8% 8.5% 23.0%

$4,556,516,591 $3,599,563,942 $956,952,649 26.6% $23,148,078,890 $23,828,022,602 ($679,943,712) -2.9% $27,704,595,481 $27,427,586,544 $277,008,937 1.0%

INSURANCEJOURNAL.COM

OCTOBER 2, 2017 INSURANCE JOURNAL | NATIONAL | 17

NATIONAL | Business Moves continued from page 14 in the middle market insurance brokerage space.

Arthur J. Gallagher & Co., Lincoln Financial Management

Arthur J. Gallagher & Co. has acquired Nebraska-based Lincoln Financial Management LLC. Terms of the transaction were not disclosed. Founded in 1993 by Stephen Letts and later acquired by Cyrus Kiani, Lincoln Financial Management is an employee benefits consultant and brokerage firm offering health and welfare products and services to businesses and individuals throughout the United States. Angela Kiani and her associates will continue to operate from their current location under the direction of Jerry Roberts, head of Gallagher’s Heartland Region employee benefits consulting and brokerage operations. Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, is headquartered in Rolling Meadows, Ill., has operations in 34 countries, and offers client service capabilities in more than 150 countries through correspondent brokers and consultants.

Hub International Ltd., Stellarus Benefits

Global insurance brokerage Hub International Ltd. (Hub) has acquired the assets of Wisconsin-based Stellarus Benefits Inc. Terms of the acquisition were not disclosed. With offices in Brookfield and Appleton, Wis., Stellarus specializes in employee benefits. Stellarus President Christy Schwan will join HUB Midwest West, and report to Michael Booth, president of employee

benefits and chief sales officer at HUB Midwest West. Hub International is headquartered in Chicago.

Fifth Third Insurance Agency, Epic Insurance Solutions Agency, Integrity HR

Fifth Third Insurance Agency Inc., an indirect, wholly owned subsidiary of Cincinnati-based Fifth Third Bancorp, has agreed to acquire Epic Insurance Solutions Agency LLC, which recently announced it will acquire Integrity HR Inc. Both transactions are expected to close in fall 2017. Epic Insurance Solutions was founded in 2013. Its primary service areas include commercial and personal property insurance and casualty, employee benefits and HR consulting services. Integrity HR was founded in 2007. Its primary services include HR outsourcing, recruiting, training, HR policies and procedures and other HR-related services. The Louisville-based insurance agency and company primarily serve the Kentucky and Indiana market. Don Thompson, president of Epic Insurance Solutions, and partners Jason Rankin and John Neace will join Fifth Third, along with Amy Letke, president of Integrity HR.

Seeman Holtz Property & Casualty, DernCo Insurance

Seeman Holtz Property & Casualty Inc. has acquired DernCo Insurance, headquartered in Milwaukee. Serving both Wisconsin and Colorado for more than 25 years, Rich Dern and his team have been offering insurance products from numerous

18 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

companies, enabling them to deliver a magnitude of options within budget. In Wisconsin, the DernCo team will be joining Seeman Holtz Property & Casualty’s Green Bay offices. Seeman Holtz Property & Casualty is headquartered in Boca Raton, Fla.

ers’ comp in other states, LCTA has been able to provide coverage to more Louisiana-based companies who also have locations in those states. LCTA provides workers’ comp for industries such as health care, supermarkets, restaurants, artisan contractors and municipalities.

LCTA Workers’ Comp, Risk Management Resources, LCTA Specialty Insurance

Hub International Limited, Benefit Advisory Group

Baton Rouge, Louisianabased workers’ compensation insurance provider, LCTA Workers’ Comp (LCTA), has acquired Risk Management Resources and created a new subsidiary, LCTA Specialty Insurance Co. Risk Management Resources, which provides independent risk management consulting services to corporations and public entities, has been rebranded as LCTA Risk Services Inc. The company’s services are available to agents, customers and other businesses interested in improving health and safety of their employees. LCTA Specialty Insurance Co. will allow more choices for its agents to cover their insureds. LCTA Casualty will continue to provide the high-level service and coverage for which it is known. It will also continue to pay dividends to qualified policyholders. These announcements come on the heels of its expansion to write business in Mississippi and Arkansas, and its conversion to a casualty insurance company in early 2016. LCTA is continuing to eye other markets as it sees opportunities to expand where it makes sense. By writing work-

Chicago-based Hub International has acquired the assets of Benefit Advisory Group LLC, with offices in New Orleans and Baton Rouge, La. Terms of the acquisition were not disclosed. Benefit Advisory Group specializes in employee benefits, including group and individual plans, and voluntary benefits. Jay McGuire and Jeff Joffrion, managers of Benefit Advisory Group, will join HUB Gulf South and report to Steve Terry, president of HUB Gulf South.

NFP, Beacon Insurance Group

NFP, an insurance broker and consultant that provides employee benefits, property/ casualty, retirement and individual private client products, has acquired Beacon Insurance Group, Inc., of South Carolina. The transaction closed effective Aug 1. Based in Bluffton, S.C., Beacon is a P/C broker providing services to clients throughout South Carolina and eastern Georgia, with a specialty in coastal property insurance. Principals Kenneth Groff, Jr. and Brian Rose, Jr. will join as directors of NFP’s P&C division and report directly to Alan Wise, a managing director in the Southeast region. INSURANCEJOURNAL.COM

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NATIONAL | Special Report | Best Agencies to Work For

2017 Winners OVERALL

Morris & Garritano, San Luis Obispo, Calif.

EAST

Gold - Mackoul & Associates, Island Park, N.Y. Silver – KMRD Partners, Warrington, Pa. Bronze – Seely & Durland Insurance, Warwick, N.Y.

MIDWEST

Gold – Gibson, South Bend, Ind. Silver – Esser Hayes, Naperville, Ill. Bronze – R&R Insurance Agency, Waukesha, Wis.

SOUTH CENTRAL

Gold – BKCW Killeen, Texas Silver – InsGroup Houston, Texas Bronze – Garrett Insurance Agency Kerrville, Texas

SOUTHEAST

Gold – LassiterWare, Leesburg, Fla. Silver – Frank H. Furman, Pompano Beach, Fla. Bronze – Jones Insurance Agency, Garner, N.C.

WEST

Gold – LP Insurance Services, Reno., Nev. Silver – Wood Gutmann & Bogart Insurance Brokers, Tustin, Calif. Bronze – Kulchin Ross Insurance Services, Tarzana, Calif.

he votes were tallied and the results are in for the 2017 Best Independent Insurance Agency to Work For survey by Insurance Journal. Employees of the Best Agencies to Work For in 2017 highlight the importance of competitive salaries, employee benefits, training and education, and other employee perks as drivers of satisfaction in the workplace. But it’s not all about compensation and

benefits. Happiness in the workplace has a lot to do with people, relationships and culture. Employees of the winning agencies cite high personal job satisfaction; rate their relationships with their immediate boss or supervisor as positive; and express a high opinion of their agency’s owner or principals and their agency’s reputation in the community. Many employees are grateful the best agency owners support local charities and the community. Employees are grateful for the opportunities their agencies provide for them to participate in community service, as well. They take

20 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

pride in working for agencies that are respected and hold strong values and ethics. Employees also appreciate the generosity of their agency owners in sharing revenues in the form of bonuses and trips. The best agencies also provide ways to help their employees grow — by giving them the tools and technology they need, and supporting them with education, training, annual and performance reviews and, in some cases, mentors. As expected, the winning agencies score high for overall employee benefits including wellness programs and for working conditions includ-

ing flex-time and alternative schedules that allow employees to work from home. The best agencies to work for also provide employees with a strong sense of work-life balance, and deliver a workplace environment where employees feel supported wholeheartedly by management and their peers. Many of the employees say they feel like family in their agencies. Insurance Journal wishes to thank the nearly 4,000 CSRs, account executives, producers, managers and other agency staff who took the time to nominate their independent insurance agency this year. INSURANCEJOURNAL.COM

NATIONAL | Special Report | Best Agency to Work For

Overall

Morris & Garritano San Luis Obispo, Calif.

Do the Right Thing By Andrea Wells

t’s no easy feat to survive as a small business let alone to survive and thrive after 132 years in operation. That’s what Morris & Garritano (M&G) — winner of Insurance Journal’s 2017 Best Agencies to Work For 2017 Overall Award — has accomplished all while creating a workplace where employees feel appreciated and satisfied. This third-generation family owned business has held the same values throughout the decades and their employees stand behind them. “Always be improving, love what you do, do the right thing, build collaborative relationships, go the extra mile — these are the core values of M&G and they really do live and die by these values,” one employee told Insurance Journal in an anonymous survey. Doing the right thing for customers, employees and the community has always been at the heart of M&G, but about three years ago, Brendan

Morris, principal and CEO, along with partners, Kerry Morris (Brendan’s sister), Gene Garritano and Dan Troy, set out to better define principal values held by its owners for more than 100 years. “Even though we redefined our core values, our agency and our people have been living these for many, many years,” Morris said. “I think it’s what sets us apart. Our culture, our values, and our employees who without a doubt get behind them every day.” M&G’s roots began in 1885 with Archibald McAlister who first opened the “Lands, Loans, Rents & Insurance” office in San Luis Obispo, Calif. Over the decades the agency’s name changed a few times as new generations took over leadership of the firm, including the entry of the Morris family in 1935 with Brendan’s grandfather Harry Morris, followed by Greg Morris (Brendan’s father) in 1964. One employee noted: “They are family owned and operat-

ed. They treat the employees well, they are always looking for ways to improve. Doing the right thing by the clients is important to them and that provides a very encouraging work environment.” M&G’s track record as a stable, integral part of the community is especially encouraging today as consolidation within the insurance industry remains at an all-time high. “In our industry, there’s a lot of consolidation but we’ve always been passionate about remaining independent and privately owned,” Morris said. That strategy has worked, Morris said. During the past three years M&G has experienced more than 62 percent growth in agency revenue, which placed the agency on the Inc. 5000’s Fastest Growing Private Companies in America (ranked at No. 4,243) in August 2017. M&G will end the year with close to $18 million in

total revenue with about 130 employees. Morris doesn’t shy away from crediting the M&G team for the agency’s success now and in the future. “We look at our team as our family and it’s a great place to work because of our team,” Morris said. That’s what makes M&G a great place to work, he said. When asked what he would tell other agency owners about how to make their agency a best place to work, Morris didn’t hesitate: “I really think that it’s about hiring the right people. And always try to improve for yourself and the Share this article agency.”

with a colleague. IJMAG.COM/12RI

Morris & Garritano principals believe that doing the right thing for customers, employees and the community is what makes their independent agency a great place to work.

NATIONAL | Special Report | Best Agency to Work For

East

Mackoul & Associates Island Park, N.Y.

A Business Is About People

orking toward joining the Minor Leagues as an umpire to becoming the CEO of an insurance agency may seem like a big career change, but for Ed Mackoul, CEO and president of Mackoul & Associates Inc. in Island Park, N.Y., it was the right decision. “I absolutely love what I do,” he told Insurance Journal. Mackoul & Associates was nominated by its staff, and won this year’s Best Agency to Work For Gold Award in Insurance Journal’s East region. To nominate the agency, its staff members filled out anonymous survey questions. While Ed Mackoul is currently responsible for running all facets of the business, his initial path to entering the insurance industry had an unlikely start. “I came out of college and didn’t know what I wanted to do,” he said. “I decided to go to

Umpire School in Florida to see if I could become a professional umpire, and though I did well and would have been placed in the Minor Leagues, my father convinced me to join him in the agency. That was in 1995.” Since then, Mackoul says he hasn’t looked back. “I’ve never regretted it,” he said. With a staff of 38, Mackoul & Associates is celebrating its 30th year in business. It has seen growth in the past four years as revenue has continued to increase, with revenue projections for 2017 expected to increase as well. “Being able to go back in time and see where the agency first started with only three employees…shows where hard work and dedication can and will take you,” wrote one employee in the survey. Mackoul said the people in the company have played an

L to R: Sally Dolce, Rebecca Scandaliato, Edward Mackoul, Gabrielle Fisher, Jennifer Sherman, Cheryl Fitzpatrick. 22 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

important role in its growth. After all, one underlying theme at Mackoul & Associates influences everything the agency does, according to the company website: “Insurance is a business about people.” The firm invests in employees by holding team-building events each year and rewards staff for hitting corporate goals with company trips, Mackoul said. Management does yearend planning and sets goals for each department, wrote one employee. Employees receive bonuses for each growth level reached along with a trip if year-end goals are met. In the survey, employees pointed to this year’s scavenger hunt at the Museum of Natural History and a cruise to the Bahamas as some highlights. However, one employee shared a memory from years earlier to illustrate the importance of the people-first atmosphere at Mackoul & Associates. The employee wrote that the office in Island Park was flooded with more than five feet of water by Superstorm Sandy in 2012. Despite many staff members being affected by the events of Sandy through losing homes, cars or assisting relatives, the employee described how everyone pulled together to get operations back to normal at the recovery center within a day of the flooding and attend to the more than 400 claims the office received. “Most of our clients never even knew we had suffered the same losses as they had,”

the employee said. “We helped each other get through a difficult time and grew closer as a family. I have never felt like work was anything less than being with my family…there is a reason after 27 years that I am still here and still growing.” Surveyed employees explained how these memories and others helped build the tight-knit culture the agency enjoys today. For Ed Mackoul, what is one of the biggest highlights for the agency this year? “This would probably be it,” he said. “Out of all of the things we have accomplished and awards we have won, to have the staff nominate us to be the best place to work makes me Share this artifeel great.”

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NATIONAL | Special Report | Best Agency to Work For

Midwest

Gibson South Bend, Ind.

Where Every Employee Is an Owner By Stephanie K. Jones

s one employee stated: “This is not a great place to work — Gibson is the BEST place to work.” That’s the sentiment expressed by numerous employees at Indiana-based Gibson, which was selected as this year’s Best Agency to Work For Gold Award winner for the Midwest region. In addition to its corporate headquarters in South Bend, Gibson has offices in Elkhart, Fort Wayne, Indianapolis and Plymouth. With 150 employees, the agency has $22.5 million in annual revenue, according to Gibson Principal and Director of Marketing and Innovation Tania Bengtsson. IJ relies on many factors in selecting the Best Agency to Work For, but employee comments and its high score on IJ’s grading scale, helped Gibson

rise to the top in the Midwest. Employees at Gibson really, really like the fact that they own the company, which operates under an ESOP, or employee stock ownership plan. Responding to IJ’s Best Agency survey, employee after employee commented that the ESOP gives them confidence that the work they do is meaningful not only for the company but for themselves and their colleagues, as well. “Because of our ESOP, we truly all have a stake in the work we do. The people I work with on my team really care about perpetuating the business and try to teach and grow and involve a young professional such as myself,” commented one employee. Knowing that Gibson employees nominated the agency and responded so positively to the poll “feels great!” Bengtsson said. “Our employ-

ees’ happiness has direct impact on our success. Our people are our most valuable asset. We are embracing change, instinctively working together, collaboratively facing challenges, overcoming them, and working towards a common vision. Watching it all unfold is fantastic.” Many employees lauded Gibson’s commitment “to helping its clients grow by thinking beyond insurance and becoming proactive risk managers.” One of the ways it accomplishes that goal is through the Gibson Protection System, or GPS. The GPS “helps companies identify and develop a plan to manage risk.” Another said the program “is our key external differentiator. It’s the process we use to

identify, quantify, and manage risk for our clients to help them protect what matters most,” one employee said. What’s Bengtsson’s advice for creating a place where people want to come to work? “Listen, listen, listen to your people. Find numerous ways to ask them a) why they come to work, and b) why they stay. Then turn the feedback into action. “This will help keep a finger on the pulse of your culture and allow you to deliver a truly differentiated level of protection,” she said. Share this

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OCTOBER 2, 2017 INSURANCE JOURNAL | NATIONAL | 23

NATIONAL | Special Report | Best Agency to Work For

South Central

BKCW Kileen, Texas

The Place to Work for Veterans and Newbies Alike By Stephanie K. Jones

mployees at BKCW say there’s a lot to like at the Central Texas-based insurance agency, including its hiring practices, its friendly culture, its leadership, its outstanding reputation and its growth-with-balance attitude. All that, plus the fact that it has been an Independent Insurance and Brokers of America (IIABA) “Best Practices” agency for 16 years and counting, have motivated its employees to nominate and succeed in making BKCW Insurance Journal’s Gold Award winner for the Best Agency to Work For, South Central. Headquartered in Killeen, BKCW also has offices in Austin and Copperas Cove. The third-generation familyowned agency has 45 employees and an annual revenue of $10 million. A variety of factors are considered in the ranking of Best Agency to Work For firms,

but glowing employee reports and a high score on IJ’s grading scale helped BKCW win the Gold Award for the South Central region. In an email to Insurance Journal, the leadership team of Bill Kliewer, Meredith Spears and Tyler Spears, said they are “honored and humbled that our team members are so proud to work for BKCW. We wouldn’t be where we are today without their support. Our team makes BKCW the best place to work. They are hands down the best team any leadership group could ask for.” Managing Partner Tyler Spears was this year presented with the Young Agent of the Year award by the Independent Insurance Agents of Texas (IIAT), an honor BKCW’s employees value highly. “Our managing partner was just named Young Agent of The Year. It’s great to have a leader that is so driven to motivate the rest of us to continue to

Sunshine and smiles at BKCW. 24 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

INSURANCE | RISK MANAGEMENT | BENEFITS grow in this industry. His hard work does not go unnoticed,” one employee wrote. Another expressed appreciation for the company’s leaders who are “open to ideas for all ages. This has allowed us to grow exponentially in the last year. Everyone is well respected here. The agency gives you that work life balance everyone desperately seeks, but cannot find.” One employee lauded the agency’s hiring practices, saying they’re the best. “Diversification is a focal point from ‘new to the industry’ hires to retired seasoned professionals wanting to work part time, BKCW will create a job for you!” the employee wrote. And once an employee is on board, “you are respected the minute you start with the company,” said another. The opportunity to advance is always there and the company is open to “any thoughts that you would like to share with management.” “The leadership is phenomenal and they truly care about their employees. They go out of their way to make sure you feel like family. Wonderful organization, I just wish I would have started here sooner,” said another employee. For its part, the leadership

team wrote that they recognize that their team members are their greatest asset, and as company leaders they make it a priority “to attract the best talent and help our team to succeed. We do our best to provide all of the necessary tools and training to help each team member grow with the organization.” They also make it a point to maintain a “hands on” leadership style. “With three locations, we make it a point to visit face-to-face with each person in our organization on a weekly basis,” they said. “If you want your clients to be treated like number one, you must treat your team members like number one,” the leadership team added. “Your team should be involved in your planning process. No one is going to buy into what you do, unless they understand why you do it. Your team should understand your goals and be 100 percent behind your purpose.” That approach obviously works, because as one employee put it: “This is the place to work if you are a seasoned veteran or new to the industry. We love our BCKW!” Share this

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NATIONAL | Special Report | Best Agency to Work For

Southeast

LassiterWare Leesburg, Fla.

Employees Come First By Amy O’Connor

assiterWare employee praise of the agency they say is the Best to Work for in the Southeast increased so much this year, the company was selected as Insurance Journal’s 2017 Best Agency to Work For Gold Award winner, a step up from its Silver honor in 2016. The Leesburg, Fla.-based agency is deserving of the higher status for several reasons, according to employees. “Our agency is very compassionate and cares for their employees. Everyone is treated with respect and always receive positive encouragement. These feelings get passed on to our customers,” wrote one employee to the Insurance Journal annual survey. Another employee praised the management team’s approach to its employees. “Management bends over backwards to accommodate employees and/or their family

members who are ill, injured or need special assistance... Top producers freely and willingly give of their time and expertise to assist newer producers be successful in writing business.” “This is not just a job, or a place to come to work. We are like a family,” added another. The theme of family was one that employees emphasized repeatedly in their praise of their workplace. “As you spend more of your time at work than you do in your own home, we all do become one large family. I truly feel blessed with the people of our agency,” said a respondent. “There is a genuine feeling of family ... We exult in each other’s joys and care for one another when there are sorrows,” said another. That feeling isn’t an accident, said Doug Childers, Jr., president and CEO. “Being nominated for this award by our employees reaffirms the consistent efforts put forward to build and reinforce a

family culture at LassiterWare,” he said. “We have a great group of people and they genuinely care about each other.” Childers has been in the insurance business for more than 20 years and grew up as part of a retail insurance family. He said he enjoys watching his team grow in the field by “becoming experts in the business” and seeing how that growth impacts them professionally and personally. Through the LassiterWare Cares foundation, Childers said employees are able to give back to each other and their communities. Employees highlighted going into the community to “help at a grass roots level.” “We get employees together to go and donate time, packing food, fixing up school proper-

ties, [and] fundraiser[s],” wrote one respondent. But being top-notch advisors to their clients is what employees really pride themselves on. “It’s about providing the best insurance program to get the best results for [clients],” wrote one employee. “What an excellent group of dedicated professionals determined to excel with pride, integrity and honesty in an industry that sometimes seems to have left those qualities behind for the sake of chasing the dollars. Not at LassiterWare.” Childers said his advice to other agency owners is to “put your employees first and they will put the customer first!”

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NATIONAL | Special Report | Best Agency to Work For

West

LP Insurance Reno, Nev.

Where Being Connected Also Means Talking By Don Jergler

hen people use the word “connected,” they’re typically referring to the cool vastness of cyberspace, where they can surf the web, send and receive email or Facebook with one another. Often regarded as the Neanderthal cousin of modern communication, another form of being connected is talking. But perhaps talking still has some value. According to the leadership at Reno, Nev.-based LP Insurance Services Inc., that’s how they’ve created a happy and efficient work force, and why so many employees at LP Insurance Services enthusiastically voted for the firm as Insurance Journal’s Best Agency to Work For in the West region. The firm took home the Gold Award. LP Insurance Services,

which reports $20 million in revenue and 150 employees, offers business insurance, risk services, personal insurance and employee benefits services, and has three offices in Nevada, two in California and an office in Arizona. The firm scored high in numerous rating categories, and it was clear from the comments from employees and the leadership that the camaraderie there had a lot to do with that. “We work hard to stay connected to each other,” said Nick Rossie, president of LP Insurance Services. “If we’re connected to our community, and we’re connected to our clients, and we’re connected to our carrier partners, how can we successfully do all of that and not be intrinsically connected to one another?” LP Insurance Services is one of those rare places in today’s

Nick Rossi, president of LP Insurance Services Inc., in his office at the company’s headquarters in Reno, Nev. 26 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

world where being “connected” means talking to one another. The firm holds a quarterly employee meeting, which primarily consist of two phases. The first part of the meeting is a “thank you” round, in which employees talk about how they were helped by a fellow employee and how that assistance furthered the overall mission of the firm. The other part of the meeting is to discuss the “big wins” for the quarter. That doesn’t mean just rehashing how much insurance someone wrote over the past 90 days. “The real part of that means talking about the employees who did it, how did you do it, what account manager, what account coordinator, what risk manager or what consultant was vital in bringing this home,” Rossie said. Many employees had great things to say about the firm, including one who rated the firm high for its performance review process. “The owners and management staff are so wonderful,” the employe wrote. “I love that we get semiannual reviews to make sure we are on target, and annual raises and bonuses. Every single year I have worked here I have received a raise and bonus. That’s six years in a row.” Having a close-knit environment was what another person valued highly. “This agency makes you feel like family not just an employee,” the employee wrote.

“They keep you informed on the agency growth and it makes you feel as though your daily contribution matters. I have worked for large brokers before, but the CEO here at LP takes time out of his day to stop by my office just to say ‘Hi’ and find out how things are going whenever he is in our location and he calls you by name!” Delivering superior service was what another person felt distinguished LP from other places to work. “Our middle market risk management service is on demand,” the employee wrote. Rossie, a former Aon executive, launched LP Insurance Services in 2010. Since then, he’s tried to instill a philosophy that those who have achieved success in the insurance industry probably already know. “At the end of the day, we’re in a people business, and the quality of your business and how you project yourself is a direct reflection on the quality of your employees – your teammates. Without them we cannot succeed, we can only fail,” Share this article he said.

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INSURANCEJOURNAL.COM

Congratulations to Insurance Journalâ&#x20AC;&#x2122;s 2017 Best Agencies to Work For

Overall Winner

Southeast Winners

Midwest Winners

South Central Winners

LassiterWare

Gibson

BKCW Killeen

Frank H. Furman

Esser Hayes

InsGroup

Jones Insurance Agency

R&R Insurance Agency

Garrett Insurance Agency

West Winners

East Winners

LP Insurance Services

Mackoul & Associates

Wood Gutmann & Bogart Insurance Brokers

KMRD Partners

Kulchin Ross Insurance Services

Seely & Durland Insurance

NATIONAL | News & Markets

Employer Leadership in Disaster Recovery and the Power of Return-to-Work By Andrew G. Simpson

usinesses and their leaders have a unique role to play in helping communities and individuals recover from the devastation of a storm like Hurricane Harvey, and they should not underestimate the power of getting employees back to work and re-establishing routines in relief and recovery, according to an expert in recovery. “Returning to work is returning to life,” believes Jeff Gorter, of the business consulting firm R3 Continuum. Returning to work restores a sense of control amid the chaos, a feeling that can then extend to other areas in life, according to the disaster recovery specialist. Gorter has been the clinical director at R3 Continuum for the past 13 years and says he has, unfortunately, responded to many large-scale events. His employer, Wyoming, Mich.-based R3 Continuum, helps organizations prepare for and handle disruptive events, including natural disasters, mass layoffs, workplace violence and complex claims situations.

The firm helps get businesses back on track and employees back to work. In a timely webinar, “Hurricane Harvey: The Role of the Employer in Relief and Recovery,” Gorter shares information that organizations and business leaders have found helpful as they have responded to disasters like Hurricane Harvey. Hurricane Harvey was a devastating storm, taking more than 82 lives, causing the evacuation of more than 42,000 people to emergency shelters and damaging more than 100,000 homes. Also, it destroyed or damaged more than a million cars — which may seem minor in the scheme of things, but Gorter notes that transportation is a major issue for people seeking to rebuild, get emergency aid or return to work.

Psychological Recovery

What’s most important after a disaster like Harvey is helping individuals recover psychologically, which allows them to then move forward physically, he says. Gorter explains that recovery involves restoring a sense of connectedness. While faith groups, community groups, even athletic teams can provide connective relief, he maintains that the workplace For the complete webinar by Jeff Gorter, clinical director for also offers a source R3 Continuum, visit: https://r3continuum.com/2017/09/08/ of connectedness hurricane-harvey-role-employer-relief-recovery. and that employees’ ability to reconnect

Resource

28 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

with their “work family” plays an important role in recovery. “Returning to work is more than just re-establishing productivity and things of that nature, but it’s that as well because they rely on that income. It’s also true that returning to work has a tremendous psychological and emotional benefit,” he says. Reuniting with co-workers “creates energy, encouragement, strength” and reinforces the employees’ sense that they are not alone in this difficult time. Many employers support the Red Cross, United Way and other helping organizations and have been long involved with community groups including food pantries or shelters. Gorter suggests businesses might want to engage more with such organizations at this time while also creating opportunities for employees to engage. “One of the things that helps keep people buoyant, that encourages their spirit, that helps them feel like they’re doing something important and effective is giving them opportunities to help. Having a team identified that can go and assist with some of the local efforts, even though they may still be recovering themselves, acting in altruistic and helpful ways is an encouragement to the spirit and lifts them up emotionally,” Gorter says. Companies may be in a position to encourage and coordinate donations of money and supplies. Some companies are establishing banks of donated paid time off INSURANCEJOURNAL.COM

hours for those who need extra time off to rebuild or attend to injured or sick family members. Other firms are creating home rebuilding funds to help the many without flood insurance.

Harvey’s Unique Aspects

Based on contact with his firm’s own responders who are providing assistance to employers as their employees are coming back to work, Gorter cites what he says are some unique aspects of the recovery atmosphere around Harvey. Much of the media has already moved on from Harvey or shifted to Hurricane Irma, he notes. And that is upsetting to those who must deal with the aftermath in Texas. “For the folks in Houston, throughout the region, they haven’t moved on. Things have been going forward at a crawl. There is a sense of frustration, a sense of anger that, ‘Wow, how quickly the rest of the nation turned its attention to other matters.’” Gorter says the current political climate around immigration is influencing the recovery atmosphere, leading “many residents to have a reluctance to access or apply for aid out of fear that that might lead to deportation or other issues that could further complicate” matters. The Harvey recovery is also being hampered by a housing shortage. Beyond the homeowners whose houses have sustained damage are renters in damaged buildings who now face eviction. “In a house you could perhaps begin to create safe places. You could restore rooms and use that as an operating base and house yourself or your family there as you slowly go through the process of reclaiming and repairing your home. But if you’re a renter, you cannot stay in that same facility while it’s being repaired,” he says.

Business Leaders

What can business leaders, executives and managers do to leverage the power of work in recovery efforts? “We recognize that leaders at times like this are often the face of the response. This is when all eyes are on you. The employees are looking to their leadership at a time like

this. They are in a state of concern, of fear, of chaos, and they look to leaders at these times,” Gorter says. Business executives are not immune to disasters, and many leaders and their families have themselves been through disrup-

continued on page 36

when your options are limited, you see things differently.

You often need more than just one solution to solve a business challenge. That’s why Safeco has comprehensive resources that include deep digital marketing support, proven retention programs, and 24/7 Call Center support. Choice is good. Talk to your Safeco representative today, or visit Safeco.com to learn how to become a Safeco-appointed agent.

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tion and suffered emotionally. They should address their personal concerns, of course, but what leaders should not do is isolate themselves or withdraw. “So many leaders have shared in the

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NATIONAL | MyNewMarkets

Tough Comp for Contractors

Market Detail: Integrated Underwriters (www. integrateduw.com) offers multiple A rated integrated workers`compensation programs leveraging an online platform. Each program delivers workers’ compensation insurance, payroll processing, risk reduction programs and employer extended services and coverages. Target class codes include: carpentry, concrete, drywall, electrical, excavation, framing, HVAC, janitorial, landscaptin, masonry, manufacturing, painting, paving, plastering, plumbing, roofing, sheet metal, steel erection, stone & tile, solar, welding, and more. Program appetite includes: tough or high hazard class codes, multi-state exposure or adverse underwriting criteria; accounts that have X-mods between 1.30 and 3.0 or higher; accounts being non-renewed or cancelled by the “standard market” due to losses or exposure; accounts that wish to get out of a state work comp fund, a state “assign risk pool” or “insurer of last resort;” any account that is headed to a

state insurance fund, “assign risk pool” or “insurer of last resort;” lapse in coverages or accounts with no prior coverage; any account you are having difficulty placing. Indicate and submit policies online. Registered IUW agents will have access to the online IUW rating engine, giving agents the ability to produce a pricing indication before deciding to upload a submission. Available limits: Minimum $50,000, maximum $5 million Carrier: Various, admitted and nonadmitted available States: All states except N.D., Ohio, Wash., Wyo., and W.,Va. Contact: Vicki Snow at 213-8336174 or email: vicki.snow@ sbwis.com

Environmental Risks

Market Detail: Roush Insurance Services Inc. (www. roushins.com) offers coverage for contractors, consultants that includes pollution, site-specific, UST/AST, professional, commercial auto, and excess. Available limits: As needed Carrier: Unable to disclose, nonadmitted States: Ill., Ind., and Ohio

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Contact: Gail Pierce at 317-7766880, ext. 18

Insurance Agents & Brokers E&O

Market Detail: Jimcor’s (www. jimcor.com) professional liability specialists can handle any D&O and E&O risks. D&O protects the officers and directors of a corporation against claims for damages made against them allegedly caused by their negligent acts, errors or omissions while acting in their corporate capacities. Coverage available for public, private and Nonprofit companies. Features include: defense outside the limits available; high limits and excess layers available; in-house binding authority; low minimum premium; multiple “A” rated or better carriers; quick turn-around. Available limits: As needed Carrier: Unable to disclose States: Conn., Dela., Fla., Mass., Md., N.H., N.J., N.Y., Ohio, Pa., R.I., and W. Va. Contact: Customer service at 201-573-8200

Miscellaneous Professional Liability

Programs (www.foxpointprg. com) has an in-house MPL program and has access to multiple A.M. Best “A” rated (or better) markets to assist any organization that provides a professional service to others for a fee. There is also a Miscellaneous Professional Liability Plus program designed for small businesses generating less than $1 million in revenues annually. A single policy provides 14 separate coverages including: professional liability, general liability, directors & officers liability, crime & dishonesty, cyber liability, employment practices liability, media personal liability, licensing & disciplinary proceedings coverage, HIPAA/HITECH fines & penalties coverage, defendants expense coverage, deposition fees & expense coverage, damaged to property of others coverage, and key employee loss expense coverage. Over 4,000 business classes are eligible for the Miscellaneous Professional Liability Plus program Available limits: As needed Carrier: Unable to disclose, admitted and nonadmitted available States: All states Contact: Sharon Beal at 800499-7242 or email: sharon. beal@foxpointprg.com

This section brought to you by Insurance Journal’s sister website: www.mynewmarkets.com

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Market Detail: Fox Point

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For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com. ©2017 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157. Inclusion of BMW automobiles is fortuitous and not an endorsement of Applied by BMW.

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Third-party research firm Signet Research, Inc. has conducted a study on behalf of Insurance Journal, measuring the memorability of all full- and half-page print ads in the July 10, 2017 issue. The highest-scoring ads for this year’s study: #1 Applied Underwriters, #2 Nationwide, #3 Applied Underwriters, #4 State Compensation Insurance Fund, #5 K&K Insurance. Insurance Journal would like to congratulate the winning companies and thank all the readers who so generously provided their feedback. The Recall & Readership Study is provided annually as a free service to our advertisers, who each receive a personalized report with scores and verbatim reader comments. Interested in participating in the 2018 study? Contact Julie Tinney at (800) 897-9965 x148.

6/22/17 11:41 AM

Idea Exchange

Marketing

7 Ways to Integrate New Media & Traditional PR to Build a Brand markets, customers and contacts? And, what strategies should be utilized to maximize your campaign?

1. Spread Your News Online

By Michelle Griffith

and Don Silver

ith the abundance of new media platforms, there are more ways for insurance agencies and independent agents to reach their key audiences than ever before. Whether your targets are current and prospective customers or the insurance industry, it is important to understand how, when and where these individuals receive their news. For some, it's internet media sites, social media, eNewsletters and blogs, while others still prefer to sit down with the newspaper each morning. The question is, what mix of online and traditional media relations strategies will help you stay on the radar and impact your target

Every agency or professional should have at least one social media account, whether it be Facebook, Instagram, Twitter or LinkedIn. For agents focused on commercial accounts, LinkedIn is the best choice. Conversely, agents with a business-to-consumer book of business should consider Facebook and Instagram. Determining what and when to post, and what visuals to use, are also critical. All major social media platforms have analytics tools that will let you better understand the reach and engagement level you achieve. Also, consider hosting a blog on your website featuring longer form pieces, interesting visuals and video.

3. Maximize Your Media Coverage

Whenever your agency or team member is profiled or published in print media, in most cases that article will also appear online. Maximize that media coverage by posting the article link on all of your social media channels and on your company website. Additionally, you can email the article to a list of contacts. When something good happens for your agency, share it!

4. Add a Visual

When you have news to share, ask yourself if there is a visual that can be incorporated. For example, an agency who participated in a volunteer project can include a photo from the event when sending out a press release and when posting about the news on social media. Photos are the easiest way to attract attention on news-

2. Share Helpful News and Industry Insights

A good strategy for staying top of mind is to share news your customers can use. For example, with homeowners, you may want to share lessons learned from a particular claim or string of claims. Same with auto. If an accident occurred as a result of texting while driving, you could use that scenario to promote safer driving. Sharing industry news, such as a newspaper article or opinion piece, also gives your audience news of interest to them. When selecting content, keep in mind what the reader would be interested to learn. The key is not to waste peopleâ&#x20AC;&#x2122;s time or they will quickly move on.

32 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

feeds. You can also consider creating an infographic or chart to explain the process for filing a claim or how a managed repair program works. Producing videos is quickly becoming an excellent tool for sharing news. Many smartphones have video capabilities that are easy to use. Agents can add a video INSURANCEJOURNAL.COM

introduction to their website bio to tell potential clients about themselves and the business in their own words.

5. Going Mobile

Many website visitors use smartphones or tablets to access the web. Your website must be mobile friendly so clients are able to easily view and navigate your site. If visitors can’t easily find information, or if pages load too slowly or don’t fit on their screen, they will quickly lose interest and move on to a competitor’s site. Apps are also an excellent tool for connecting with your customers on the go.

6. SEO is Key

Once your content is set, it’s important to make sure you are reaching your target audiences. This can be achieved through

search engine optimization (SEO). Search engines, such as Google, update their “search rules” on a regular basis. While including regularly searched terms throughout your site helps your rankings, fresh and relevant content remains king. Now may be the perfect time for a professional assessment to see how your website ranks on Google and other search engines as compared to your competitors.

full-time job, but responding to a customer complaint on these sites is recommended when a solution or answer can be offered. One thing is certain: more and more, customers are making purchasing decisions based on what others say. Consider having a tablet in your office to let customers rate their experience while there. Most customers expect good service and will not take to the internet to talk about a positive experience or helpful staff member, but if the opportunity is there they may stop to share the good story.

7. What’s Being Said About You Online?

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Review sites such as Yelp and Ripoff Report, along with Google Reviews, keep online reputation management practitioners on their toes. The truth is, review sites cut both ways. Staying on top of your agency’s ratings and feedback is almost a

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Griffith is a vice president and Silver is COO with Boardroom PR, a public relations and marketing firm serving clients across Florida. Phone: 954-370-8999. Emails: mgriffith@boardroompr.com, donsil@boardroompr.com. Website: www.BoardroomPR.com.

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Idea Exchange

The Competitive Advantage

10 Agency Accounting Tips to Keep in Mind

By Chris Burand

ccounting practices for independent insurance agencies differ greatly from those traditionally used by other small businesses. Below are 10 tips for your agency’s accounting department.

1. Don’t Use QuickBooks

QuickBooks is a great system for most businesses but not insurance agencies. Never use QuickBooks unless you have a high degree in accounting and possess significant insurance agency specific accounting knowledge so you can address agency bill business correctly. Insurance agency accounting is quite unique because agencies are responsible for managing fiduciary funds. Few businesses must manage money on a fiduciary basis. This is not to say an adequately talented person couldn’t set up QuickBooks to work, but almost no people in agencies are that talented/ educated in accounting. I suggest sticking to an industry standard accounting system.

2. Fiduciary Funds

No matter what you might think, agencies are responsi-

ble for fiduciary funds. The responsibility is memorialized in your carrier contracts and all 50 states, plus the federal government, require agencies to treat these fiduciary funds appropriately. All states are “trust” states. There are states that allow comingling and states that don’t, but 100 percent of all states require agencies remain “in trust” every hour of every day of every month of every year. A general formula (and some states have minutely specific formulas) is (Unencumbered Cash + Premiums Receivable) / (Premiums Payable + Binder Bill). The resulting ratio must be at least 1.0.

3. Premiums

No matter what your accountant/CPA says, premiums received are not income, and premiums paid are not expenses. Those agency premiums are fiduciary funds. This means they go on the balance sheet and not the income statement. Any accountant that says otherwise does not know agency accounting.

4. Cash Versus Accrual

Agencies are not 100 percent cash, and they are not 100 percent accrual. For example, contingency income is effectively accrued, but because so many carrier contracts and behaviors make adequately accurate and certain assessment of the bonuses as of 12-31 difficult if not impossible, contingencies are generally treated on a cash basis without regard to how an agency does its accounting. Another example involves

34 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

bad debt. The reason agencies can have bad debt even on a cash basis, is because the bad debt usually involves the fiduciary money. Because the agency is responsible for someone else’s money, it incurs bad debt even though it is on a cash basis. If the bad debt was its own money, and the agency was on a cash basis, the loss might not be deductible. Many other examples exist. Agencies should likely be on an earned basis. Earned income is more applicable than cash or accrual, but because almost no CPA has heard of earned income and accounting for it within tax forms and other standardized accounting software is not practical, no point exists in discussing it.

5. Agency Management Systems

Your agency man-agement system’s settings matter, a lot. Unfortunately, some trainers forget to discuss the options in detail with agencies, or because when instituting a new system agency personnel are overwhelmed with so much information they don’t hear the trainer’s message. It's possible the agency people do not have enough knowledge to understand the implications and complications of choosing the right or wrong settings,

or maybe what happens is some combination of these factors. Regardless, choosing the right settings and matching those settings to your procedures will generate better reports, better data, and possibly materially reduce staff workloads. One reason the settings are so important is staff sometimes

create workarounds because of the mismatch between settings and procedures. My firm has discovered that alignment can eliminate as much as 10 percent of some CSRs’ workloads.

until you get a satisfactory answer.

6. Ask Your CPA to Explain

7. CPA Errors & Omissions

It is important to trust your CPA, and it is important to not just take his/her word as gospel. If something does not sound right to you, inquire

Good accounting will make your life easier. If your CPA encourages taking chances on your tax returns, make sure you get a certificate of E&O insurance from him/her. If their reason-

ing is, “I think we can win if the IRS catches this.” Weigh the tax savings versus the extra cost to defend a “win” the case.

8. Accountants’ Review, Compilation and Audit

If your CPA encourages you to purchase an Accountants’ Review or Compilation, understand the difference between an Accountants’ Review, a Compilation, and an Audit. Learn what you will really get for your money. Understand the difference in these reports between one accounting firm and another. When I read these reports, especially the Accountants’ Reviews, some are quite insightful and some are worthless. Given the expense and lack of insight of the worthless ones, the agency just wastes their money. The really good CPAs will prescribe the right report for your situation and the quality of their reports will be worth the money spent.

9. Balance Sheets Matter

Quite often balance sheets do not matter until they matter. Somewhere between 100 and 1,000 times, agency owners have, upon me questioning issues related to their balance sheets, said that no one ever previously cared about their balance

sheet. That may be, and often an agency can continue to run just fine while their balance sheet is a mess or the agency is upside down per their balance sheet. But when an agency is sold, goes to secure a loan, a gift/estate event occurs, or other usually unusual situations happen, the balance sheet becomes extremely important. Make life easier on yourself by always managing your balance sheet correctly because sooner or later, someone important is going to question you about your balance sheet.

10. Reconcile Key Data

Key data includes your carrier commission/contingency reports with your internal data, your aged accounts receivable with accounts receivable on your balance sheet, your tax returns versus your internal financials, and so forth. A key report to reconcile is producer compensation. More than 50 percent of agencies my company analyzes show their producers are being paid more than their contracts suggest. Many reasons exist why this might happen. Most reasons though are not good including poor accounting, fraud, mistakes at the CSR level entering the right commission amounts, coding renewals incorrectly, and paying producers extra because someone feels sorry for them. Good accounting will make your life easier. Maybe not immediately but definitely Share this artieventually.

cle with a colleague. IJMAG.COM/12AC Burand is the founder/owner of Burand & Associates LLC based in Pueblo, Colo.

OCTOBER 2, 2017 INSURANCE JOURNAL | NATIONAL | 35

NATIONAL | News & Markets ‘Employer Leadership’ continued from 29 past that that was a mistake. As they pulled away and they were no longer visible and they were no longer perceived as accessible, then people began to doubt their leadership abilities,” says Gorter. “It’s important to be out there and to be present with your employees, with your team, so that they can see the visible example of leadership.” Business executives and managers should be frequently checking in with their teams, “walking the floor” and encouraging all teams to do the same. Checking in, even if only by email, reminds people they’re not alone and leverages the strength of the connectedness that the workplace offers, according to Gorter. “This is a time when the work family [is] checking in with each other and saying, ‘Hey, how are you doing? I know it’s been a week. Hey, how’s the rebuild coming?’” In addition to being visible, leaders must “communicate, communicate, communicate,” stresses Gorter. “You cannot overcommunicate in a time like this. Giving short, brief updates frequently, letting people know: ‘Here’s what we know so far. Here’s what we don’t know, but once we find out, we’re going to let you know.’ Having frequent

continued on page 37

36 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

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News & Markets | NATIONAL continued from page 36 communication establishes you as a leader as a verifiable source of solid information.” He maintains that it is a mistake to wait until all the facts are known because in the absence of real information, people will often turn to rumors and their worst possible fears. “If you’re not out early communicating, people are going to interpret that as ‘leadership doesn’t have a plan,’” and they will feel they have to look elsewhere for information, according to Gorter. Communications should be both “sensitive and straightforward,” acknowledging the harm that the disaster has had on the team and on each individual employee. In addition to letting employees know they care, leaders should convey that they are competent and believe that everyone is going to move through the difficulties. Gorter has some advice for how business leaders can achieve and convey competence in a crisis: break the massive challenge into small tasks. “The enormity of these events can easily overwhelm. It clouds the perspective. It drains the energy and leaves people to begin to doubt, ‘Can I do anything in the face of this? Look at how big this is. How am I ever going to make any difference at all?’ It’s helpful to take a step back, break the recovery efforts into smaller, more achievable tasks in order to build a sense of momentum,” he suggests. He recommends that executives and managers make a list of small tasks for themselves and for their team. Checking them off as they are completed helps create a sense of progress.

Organic Solutions

Every company has its official executives and managers. But every firm also has its unofficial leaders. These are the people “who encourage people, who are the ones who maintain the morale and the sense of esprit de corps that a group has.” Gorter urges official leaders to reach out to these influencers. “They may not be official leaders, but you know who they are. Seek out both the official and unofficial folks for their input,” he says, suggesting executives ask them INSURANCEJOURNAL.COM

what to do next and how the company can best aid and bring people together. “These organic solutions are often the most effective, and they have the added benefit of immediate buy‑in because you’re having both official and unofficial leaders empowered to make suggestions like these. Hearing those ideas and empowering them to put them into effect also has a tremendous benefit to the workgroup as a whole,” he says. Business leaders want to maintain a balance between individual needs and organizational objectives, which may involve recognizing that people are going to have different needs at different times, such as some flexibility in their schedule as they seek to rebuild, Gorter says. However, he stresses, this does not mean putting the business on hold while individuals solve their problems. Those individual needs have to be balanced with the fact that normal business operations lend structure, predictability and familiarity to employees. “Being able to focus on both the business needs and the individual needs in a balanced way positions you as a leader in the best possible way,” he says.

Executive Tips

Gorter shares some additional tips to help executives manage their own stress, calm themselves and learn take care of themselves: • As much as possible, maintain regular sleep, diet and exercise. Recovery is exhausting work, and the body needs to de‑stress with physical exercise as well as be at its peak condition in order to make the next right move. • Surround yourself with caring people. Reach out to those you know who support you in positive ways. • Set boundaries. Now is not necessarily the time to take on additional projects or to engage in personal challenges. Recognize what your limits are and be cautious not to make impulsive decisions that you may regret later. • Break your own recovery efforts into smaller, more achievable tasks in order to build a sense of momentum. Setting a list

of things that you can check off, so you can begin to build a sense of momentum, is important. • Give yourself and your team time. Recognize again this is a marathon, not a sprint. You will get through this, but you have to give ourselves time and “extend a little bit of grace, a little bit of understanding” to each other. • Seek assistance from your employee assistance program, from faith mentors, from community groups, friends and others. If stress levels don’t seem to be abating, seek out professional counseling. According to Gorter, the job of a business leader is not to say “exactly the right thing in exactly the right way at exactly the right time.” There is no one way to handle Share this article with a recoveries.

colleague. IJMAG.COM/12AS

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OCTOBER 2, 2017 INSURANCE JOURNAL | NATIONAL | 37

Closing Quote What Employees Really Want

By David E. Coons

n today’s increasingly competitive labor market, human capital is critical to business success. Organizations are only as strong as their employees. With this in mind, insurance organizations are focused on engaging and retaining top performers. These individuals are critical to business results and the bottom line. Thirty-nine percent of organizations are worried that they will lose top talent in the coming year. In today’s candidate-driven labor market, they have cause to be concerned. One-in-three top employees is disengaged from their current company. In addition, 25 percent plan to leave their organizations within the year. What can companies do to retain their key performers? What do today’s professionals really want?

Competitive Compensation

Real or perceived, today’s professionals want to keep pace financially with their peer group. Thanks to the advent

Organizations can translate specific, individual employee goals into a career path. of web-based tools that allow employees to review salaries, these comparisons are much easier and more widely available. Promoting communication and opening-up a dialogue regarding compensation is critical — salary is often a deciding factor when employees are choosing to stay or leave their current employers. Many professionals are reluctant to share their salary concerns until they have received another offer and at this point, it is too late. To ensure the needs of top talent are met, organizations should look into instituting compensation reviews and annual discussions. Being proactive makes the difference in retaining high potential talent. Compensation goes beyond just salary — it includes the “hidden paycheck” of perks and benefits. With benefits potentially comprising up to 30 percent of a total salary — this is no small sum. Nearly 90 percent of today’s professionals prefer the addition of perks and benefits to pay raises from

38 | INSURANCE JOURNAL | NATIONAL OCTOBER 2, 2017

their employers. Insurance organizations need to beef up their compensation packages to better compete with other industries. This can include flexible scheduling, career development opportunities, commuting assistance and even tuition reimbursement.

Personalized Development

Today’s professionals want opportunities for advancement and a clearly defined career path. High-potential employees are much more likely to stay with an organization when they have a set path for development. Unfortunately, one-in-five employees believe their personal aspirations differ greatly from what the organization has planned. To bridge this gap, managers should work with their teams to better understand their individuals’ wants. Where do they see themselves in the future? What motivates them? Organizations can then translate these specific, individual goals into a career

path. Each path is unique and companies should be creative and flexible when outlining an individual’s career progression. Perhaps an employee wants to develop a new skill or would like to learn more about a different area of the organization. Special assignments, rotational programs, training, job shadowing and mentoring can help provide a development plan. Regardless of the specifics, implementing a tailored career development path is critical to increasing engagement and retention. As the “war for talent” continues to wage, retaining your talent is critical to ensuring organizational success. Top professionals can have a long-lasting and meaningful impact on an organization. Identifying their key motivations and wants can provide organizations with the ability to better retain top talent. Coons is senior vice president of The Jacobson Group. Phone: 800-4661578. INSURANCEJOURNAL.COM

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