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July 1, 2019 • Vol. 97 No. 13
Contents
News & Markets
10
Direct Auto Insurance Buyers Show Better Carrier ‘Satisfaction’: J.D. Power
14 Top Writers of Earthquake Insurance
18
Idea Exchange
Special Report
26
Special Report: 2019 Super Regional P/C Insurers
32
Spotlight: Private Flood Market Grows, Again: Carrier Management Report
Agents (Still) Looking for Underwriting Sweet Spot: Channel Harvest
34
5 Steps to Reform America’s Flood Insurance Problem
40
Tech Talk: Customer Experience Starts With Marketing Communications
42
Talent Considerations for CAT Season
44
The Competitive Advantage: E&O Advice? ‘A Duty to Read Your Policy’
46
Ask the Insurance Recruiter: Working With Recruiters
47
When Words Collide: Step 1…The RTFP Doctrine
50
Closing Quote: Agents Have Come to Embrace Insurtech. When Will Carriers?
Departments 6 Opening Note 4 | INSURANCE JOURNAL | JULY 1, 2019
16 Declarations 16 Figures
20 People
22 Business Moves
38 My New Markets
INSURANCEJOURNAL.COM
OUT-THINK verb
To embrace complexity as an opportunity, not a problem AT RT SPECIALT Y, IT’S WHAT WE DO. Our wholesale specialty risk professionals have the expertise and tenacity to craft superior coverages for retail brokers’ toughest risks, regardless of account size. Contact your RT Broker at rtspecialty.com
AG R IB U S I N ESS
AVI AT I ON
P E R S O NAL L I N ES
PR O FESSIONAL & EXECUTIV E LIABILITY
CASUALTY
CONSTRUCTIO N
E N E R GY
P R O P E RTY
E N V I R O N M E N TA L
R E A L ESTATE
H E A LTH CA R E
TR A N S P O RTATI O N
LI F E S C I E N C ES
WO R K E R S’ C O M P E N SATI O N
MARINE RT BI N D I N G
Opening Note Write the Editor: awells@insurancejournal.com
Publisher Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com
ADMINISTRATION / CIRCULATION
Are Millennials More Likely to Buy Flood Insurance?
A
re younger homeowners more likely to protect their property by buying flood coverage? It seems so, according to a recent
study. Millennials — those born between 1981 and 1996— are nearly three times more likely to have purchased flood insurance than their older Baby Boomer counterparts born between 1944 and 1964, according to a national survey from the National Association of Insurance Commissioners (NAIC). Overall, less than half of Americans who agree that having flood insurance is important have actually purchased flood insurance. The survey of 1,000 American adults conducted in May reveals that Millennials are not only nearly three times more likely to have purchased flood insurance than Baby Boomers, but they are also more likely than Gen Xers born between 1965 and 1980 to purchase flood insurance (25% vs. 16%). Overall, Millennials are more likely to agree/strongly agree that purchasing a flood policy is a good idea (57% vs. 41% for Gen X vs. 24% for Baby Boomers). Recent floods in the Midwest and South where recovery efforts will continue for years bring home the disconnect between intention and action on flood coverage. According to the survey, 41% of respondents agree or strongly agree that flood insurance is a “good idea” but only 17% say they have purchased flood insurance, and even that response may be based on a misunderstanding. One Insurance Journal reader suggests that the disparity in buying habits could be explained through insurance purchasing burn-out: “We’ve experienced several situations where a younger insurance buyer, and especially first time home owner, will want to check all the boxes when it comes to coverage,” the reader commented. “On the other hand, our older clients (many retirees) give us that song and dance on ‘I’ve lived here for years and never seen a flood, so I’m not buying it anymore’ or ‘I’ve paid for insurance for 40 years, never had a claim so I want to remove coverage.’” Another reader suggested the trend could simply be that younger people buy more property in flood zones and therefore must purchase flood insurance as a lender requirement. Still, there are few homeowners that actually buy coverage, young or old. The Federal Emergency Management Agency (FEMA) estimates that only about 3% of homeowners have flood insurance. “This disparity perhaps reflects the common, though incorrect, assumption that homeowners insurance covers flooding,” said Eric Cioppa, NAIC president and Superintendent of the Maine Bureau of Insurance. The NAIC survey was conducted online among 1,004 adults comprising 502 men and 502 women 18 years of age and older. This survey was live May 20-22, 2019. Editor-in-Chief
Millennials are nearly three times more likely to have purchased flood insurance than their older Baby Boomer counterparts.
Andrea Wells
6 | INSURANCE JOURNAL | JULY 1, 2019
Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com
EDITORIAL
Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Elizabeth Blosfield | eblosfield@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 & Contributors Contributors: Barry Koestler II, Jeff Kroeger, Craig Poulton, Brad Whatley Columnists: Chris Burand, Mary Newgard, Tom Wetzel, Bill Wilson
SALES / MARKETING
Chief Marketing Officer Julie Tinney | jtinney@insurancejournal.com West Sales Dena Kaplan | dkaplan@insurancejournal.com Romeo Valdez rvaldez@insurancejournal.com South Central Sales Mindy Trammell | mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA, CT) Howard Simkin | hsimkin@insurancejournal.com Midwest Sales Lisa Whalen | (800) 897-9965 x180 East Sales (NY, PA and CT only) Dave Molchan | (800) 897-9965 x145 Sales & Marketing Coordinator Ashley Berg | aberg@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com Insurance Markets Manager Kristine Honey | khoney@insurancejournal.com Senior Strategist Pam Simpson | psimpson@insurancejournal.com Social Media Manager Ly Short | Lshort@insurancejournal.com Marketing Administrator Gayle Wells | gwells@insurancejournal.com Marketing Director Derence Walk | dwalk@insurancejournal.com
DESIGN / WEB / VIDEO
V.P. of Design Guy Boccia | gboccia@insurancejournal.com V.P. of Technology Chris Thompson | cthompson@insurancejournal.com Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Terrance Woest | twoest@wellsmedia.com Web Developer Ryan Kleshinski | rkleshinski@wellsmedia.com Web Developer James Wagoner | jwagoner@wellsmedia.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop | awaldrop@insurancejournal.com
ACADEMY OF INSURANCE
Director Patrick Wraight | pwraight@ijacademy.com Online Training Coordinator Nathan Granitz | ngranitz@ijacademy.com
SUBSCRIPTIONS:
Call (855) 814-9547 or visit ijmag.com/subscribe Outside the US, call (847) 400-5951
Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2019 Wells Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Media Group, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Dept, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: Contact (800) 897-9965 x125 or visit insurancejournal.com/reprints
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News & Markets Direct Auto Purchasers Show Better Carrier ‘Satisfaction’: J.D. Power
U
.S. auto insurance consumers are quite happy about their coverage, and a growing shift to direct-to-consumer models has driven much of their good feelings. In a new report, J.D. Power says overall customer satisfaction with carriers rose in 2019 to a record-high level of 831 out of 1,000 points. Out of that number, the highest overall satisfaction came from the 23 percent of customers who use direct distribution models. “Auto insurance customers have more access, control and visibility into the details of their policies, and that is translating into record-high levels of customer satisfaction,” Robert Lajdziak, senior consultant for Insurance Intelligence at J.D. Power, said in prepared remarks. “As customers take greater control of their auto policies, it’s also becoming more important for insurers to offer superior digital experiences and easy access to account management features such as bill 10 | INSURANCE JOURNAL | JULY 1, 2019
pay, policy information and an integrated experience for customers who bundle multiple policies.” J.D. Power found that satisfaction levels were much higher, for example, when auto insurance customers bundled their auto policy with other coverage such as home and life insurance (837) than without bundling (812). Bundling helped boost overall satisfaction scores, advocacy rates and likelihood-to-renew levels, but J.D. Power argued that insurers haven’t done well at making bundling easier. Other study findings: • Customer reliance on agents has declined by 33% over the last 20 years. • About one-fifth, or 17% of customers with an agent, said they haven’t met their agent face-to-face or on the phone. • Auto insurance premiums were generally flat in 2019, which J.D. Power said helped customer satisfaction. The study noted that customer retention
•
starts to become adversely affected by a $100 price increase, but the threshold for customers to shop for another carrier starts at around $50. In 2019, 72% of customers said they’d switch insurers for any level of financial savings, down from 87% in 2010, just after the Great Recession.
Esurance ranked highest in terms of customer satisfaction, scoring 847 out of 1,000, and Auto Club of Southern California Insurance Group came in second with 834. Amerprise, California’s Wawanesa and GEICO grabbed the third, fourth and fifth slots, respectively. The report — J.D. Power’s 2019 U.S. Auto Insurance Study — looked at five factors affecting customer satisfaction: interaction, policy offerings, price, billing process and policy information. J.D. Power compiled the study based on responses from 42,759 auto insurance customers from February through April 2019. INSURANCEJOURNAL.COM
Be More T H A N J U S T A N AG E N T
OMAR ZAKI Allstate Agency Owner Riverside, CA
BE AN OWNER WITH EQUITY. Unlike other agency ownership opportunities, being an Allstate Agency Owner lets you earn equity in your business with the opportunity to pass it down, or sell someday. So why settle for being just an agent? Be an Allstate Agency Owner. Get started today at allstate.com/beyourownboss Subject to all terms and conditions as outlined in the Allstate R3001 Exclusive Agency Agreement and Exclusive Agency program materials. Allstate agents are not franchisees; rather they are exclusive agent independent contractors and are not employed by Allstate. Allstate is an Equal Opportunity Company. Allstate Insurance Company, 2775 Sanders Road, Northbrook, IL 60048. In New Jersey, Allstate New Jersey Insurance Company, Bridgewater, NJ. Š 2019 Allstate Insurance Co.
News & Markets Top Writers of Earthquake Insurance by 2018 Premium Written Rank Company/Group 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
California Earthquake Authority State Farm Group Zurich Insurance Group Chubb Ltd. Group American International Group Travelers Group GeoVera Holdings Inc. Group Palomar Specialty Insurance Co. Liberty Mutual Group AXA Insurance Group Sompo Group Berkshire Hathaway Group USAA Group Markel Corp. Group Swiss Re Group
Top 15 Companies/Groups TOTAL ALL Companies
2018 Earthquake DPW ($000s) $774,296 $268,092 $225,717 $157,018 $133,495 $127,366 $104,634 $92,980 $82,584 $75,591 $70,565 $69,614 $60,577 $59,724 $59,612
Market Share 23.8% 8.2% 6.9% 4.8% 4.1% 3.9% 3.2% 2.9% 2.5% 2.3% 2.2% 2.1% 1.9% 1.8% 1.8%
$2,361,867 $3,250,302
72.7% 100.0%
Based on US total for those entities reporting to the NAIC Source: NAIC data, sourced from S&P Global Market Intelligence
E
arthquake coverage is available mostly from private insurance companies. In California homeowners can also get coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization. Only about 10 percent of California residents currently have earthquake coverage, down from about 30 percent in 1996, two years after the Northridge, California, earthquake. According to the Insurance Information Institute, just 8% of homeowners responding to a May 2016 poll said they have earthquake insurance. Homeowners in the West were most likely to have earthquake insurance with 14 percent saying they had the coverage followed by the Midwest at 7 percent; and the South and Northeast at 6 percent. Here is a list of the top insurance companies writing earthquake coverage provided by Insurance Journal’s research partner Demotech Inc.
Delivering the calm before, during and after the storm. No one gets your clients ready for a storm like Lexington. Thanks to our team of claims professionals, loss engineers and underwriters, we’ve been a leader in hurricane risk management for over 50 years. Learn how you can help your clients at lexingtoninsurance.com/propcat
Lexington Insurance Company, an AIG company, is the leading U.S.-based surplus lines insurer. AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information,please visit www.aig.com. Products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Not all products and services are available in every jurisdiction, and insurance coverage is governed by actual policy language. Certain products and services may be provided by independent third parties. Insurance products may be distributed through affiliated or unaffiliated entities. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.
Figures
$1.1 Million The amount of a grant awarded by Texas Mutual Insurance Co. to 11 Texas colleges to fund workplace safety courses for employers, workers and the general public. The company said it began its commitment to supporting safety education at state colleges 20 years ago.
$44 MILLION The amount in damages Ohio’s Oberlin College was ordered to pay to the owners of a market who said the school ruined their business by branding them as racists. The college has said the jury award to Gibson’s Bakery is “not the final outcome.”
Declarations Needless Catastrophe
“The lack of effective safety management at this well resulted in a needless catastrophe.” — Kristen Kulinowski, interim executive of the U.S. Chemical Safety Board, comments after the release of a report on the board’s investigation into an explosion at an Oklahoma natural gas drilling rig that killed five workers last year. The report cited inadequate training and faulty equipment and called for new regulations. The well was operated by Red Mountain Energy LLC. Workers were employed by drilling contractor Patterson-UTI Energy Inc.
16 | INSURANCE JOURNAL | JULY 1, 2019
Noneconomic Damage Caps
“Allowing this [damage cap] substitutes the Legislature’s nonspecific judgment for the jury’s specific judgment. The people deprived the Legislature of that power when they made the right to trial by jury inviolate.” — Kansas Supreme Court Justice Carol Beier, writing in the court’s opinion, after it found the state’s cap on damages for noneconomic injuries in personal injury lawsuits is unconstitutional. The court ruled 4-2 that capping damages an injured person is able to recover in a lawsuit violates that person’s right to a jury trial.
Open-Door Policy
“With this bill, Florida officially has an open-door policy to autonomous vehicle companies, and I encourage them to relocate from California to Florida.” — Florida Governor Ron DeSantis said before signing legislation allowing self-driving vehicles to operate in Florida once the industry comes out of the testing stage. The new law takes effect July 1 and gives ridesharing companies the ability to deploy fleets of autonomous vehicles in the state.
INSURANCEJOURNAL.COM
93,000 A Virginia woman has been accused of embezzling more than $93,000 while working as a bookkeeper for No Limits Construction, which she allegedly funneled toward her wedding, among other expenses. Vanessa Cline, 32, is charged with multiple counts of embezzlement, forgery and passing a forged document.
$193,905 That’s how much Cal/OSHA cited an Anaheim, Calif., solar panel installation company for multiple serious workplace safety hazards including one willful serious accident-related violation, following an investigation of a worker who was seriously injured after they fell from the roof of an Oakland home. Cal/OSHA determined that Nexus Energy Systems Inc. did not provide required fall protection for their workers.
Oh Deer
“Deer Valley simply has no place in this litigation.” — A Utah ski resort where Gwyneth Paltrow is accused of crashing into and injuring a skier wants to be dismissed from a lawsuit, contending the dispute should be settled between the Oscar-winning actress and the alleged victim.
Helping Business Owners
“This significant cut continues several years of reductions, further helping business owners create good-paying jobs in Pennsylvania.” — Pennsylvania Insurance Commissioner Jessica Altman said in a press release issued by the Pennsylvania Insurance Department announcing the approval of a loss-cost filing, including a 12.95% reduction in loss-costs. The reduction is expected to lead to lower workers’ compensation premiums for many Pennsylvania businesses.
12.95% INSURANCEJOURNAL.COM
JULY 1, 2019 INSURANCE JOURNAL | 17
News & Markets Agents (Still) Looking for Underwriting Sweet Spot: Channel Harvest
W
hether technology is driving a “one size fits all” underwriting approach or carriers are narrowing their strike zone, this year’s independent agency survey from Channel Harvest reveals agents continue to ding companies for lack of flexibility. The latest Channel Harvest Research report, “Agent Voices 2019,” notes that while most respondents say they’re satisfied with their top carrier, nearly one in five say they’re unsatisfied. That sentiment stems from dissatisfaction with their top company’s underwriting flexibility, as well as compensation and training. The research is cosponsored annually by Insurance Journal. Personal lines agents are generally very satisfied with their top carrier’s financial strength, technology and underwriting responsiveness — between 70% and 80% of respondents saying their top carrier is above average in those areas. However, opinions vary depending on what aspect of underwriting is under the microscope. “When it comes to
18 | INSURANCE JOURNAL | JULY 1, 2019
underwriting, agents are still looking for that sweet spot where their customers’ needs align with their carrier’s offerings,” says Josh Miller, research director at Channel Harvest. “Even though they like their top carrier’s responsiveness, they’re not universally happy with that carrier’s flexibility, as more than one in four told us it’s only average and 12% say it’s below average.” To get at the heart of what agents are looking for, Channel Harvest asks them about three attributes of underwriting: responsiveness, appetite and flexibility. This year, three-fourths of personal lines agents (77%) rated their top carrier’s underwriting responsiveness as above
average, while 70% scored that carrier’s appetite as above average while only 58% said that carrier’s flexibility is above average. The numbers are consistent with past years’ results: When asked what they look for when evaluating carriers, personal lines agents consistently named underwriting appetite, flexibility and responsiveness as important — second only to competitive pricing and claims service. Commercial lines agents ranked them in the top four and expressed similar frustrations with their carriers’ underwriting flexibility. Each year, Channel Harvest partners with carriers to pulse agents on company performance and other important issues. More than 6,400 respondents participated. This year’s carrier panel included Allstate, Amerisure, Encompass, Foremost, Hanover, Kemper, Liberty Mutual, Nationwide, Penn National, Progressive and Safeco.
For more information, contact Ellen Wallace, Channel Harvest’s director of industry relations, at ellen@channelharvest.com.
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News & Markets Supreme Court Offs Ban on Foul Language Trademarks By Andrew Chung
T
he Supreme Court in late June struck down a longstanding U.S. ban on trademarks on “immoral” or “scandalous” words and symbols, ruling in a case involving a clothing brand with an indelicate name that the law violates constitutional free speech rights. The justices ruled against President Donald Trump’s administration, which defended the law that had been in place since 1905, and in favor of Los Angeles streetwear designer Erik Brunetti, who was turned down by U.S. Patent and Trademark Office when he sought to trademark his brand name FUCT. All nine justices agreed in the decision written by liberal Justice Elena Kagan that the prohibition on “immoral” trademarks ran afoul of the U.S. Constitution’s First Amendment right to free expression. However, three justices wrote dissents to say the bar on “scandalous” trademarks should have been upheld. The Supreme Court followed a course it took in 2017 when it struck down a similar law forbidding the registration of “disparaging” trademarks in a case involving an Asian-American dance rock band called The Slants, a name federal trademark officials had deemed offensive to Asians. When the 2011 trademark application for FUCT was rejected, the Patent and Trademark Office noted that brand name sounds like a profanity — sometimes called the “F-word” — though is spelled differently, and concluded that Brunetti’s products contained sexual imagery, misogyny and violence. “There are a great many immoral and scandalous ideas in the world (even more than there are swear words),” Kagan wrote in the June decision, adding that the trademark law covers them all. “It therefore violates the First Amendment.” “Today is a good day for Americans,” Brunetti’s lawyer John Sommer said. “The U.S. Supreme Court has taken the governW2 | INSURANCE JOURNAL | WEST JULY 1, 2019
ment out of the business of deciding questions of morality.” The Patent and Trademark Office said it was reviewing the decision. The Justice Department declined to comment. The justices upheld a 2017 lower court ruling striking down the law. The decision removes the authority of government officials to bar federal trademark registration for profane language or sexually graphic images. The Trump administration had warned that invalidating the law would unleash a torrent of extreme words and sexually graphic images on the marketplace. Brunetti’s brand includes products such
as sweatpants saying “We are fuct,” and a T-shirt saying “Fuct is free speech, free speech is fuct.” Justices Sonia Sotomayor, Stephen Breyer and John Roberts were the three justices who partly dissented. Sotomayor said the government will now have no choice but to register “the most vulgar, profane or obscene words and images imaginable.” Breyer said such words could even lead to physical altercations. “Just think about how you might react if you saw someone wearing a t-shirt or using a product emblazoned with an odious racial epithet,” Breyer said. Brunetti sought a trademark because it would make it easier to protect his brand of casual clothing against counterfeiters. The brand’s name is clever, Brunetti said, because of its association with the profanity, while the acronym also means “Friends
U Can’t Trust.” The U.S. Court of Appeals for the Federal Circuit ruled in Brunetti’s favor in 2017. The American Civil Liberties Union called the ruling a victory for the First Amendment. “Government bureaucrats should not be deciding what speech is or is not deserving of trademark protection based on what they consider to be too ‘scandalous’ and ‘immoral,’” ACLU attorney Emerson Sykes said. The Trump administration had argued that banning vulgar terms and sexually indecent images did not discriminate against anyone’s viewpoint, and that the government should not be forced through the trademark system to promote words and images that would be shocking or profane to the public. After the ruling, Kagan offered examples of the law’s bias toward certain views, highlighting the government’s approval of anti-drug or pro-religious messages but rejection of a trademark for “Bong Hits 4 Jesus.” The dissenting justices suggested the “scandalous” provision of the law could be salvaged to forbid obscenity or profanity because it does not attack ideas, but only the way in which ideas are expressed. Justice Samuel Alito, who agreed to strike down the law, said Congress could come up with a narrower statute banning vulgarity that conveys only emotion. “The registration of such marks (trademarks) serves only to further coarsen our popular culture,” Alito said. In another free speech case last year, the court blocked a California law requiring clinics that counsel women against abortion to notify clients of the availability of abortions paid for by the state, finding that it violated the free speech rights of the Christian-based facilities. (Reporting by Andrew Chung; Editing by Will Dunham) Copyright 2019 Reuters. All rights reserved. INSURANCEJOURNAL.COM
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News & Markets Cancer Patient Another to Accuse Suit Filed Against Wyoming UCLA Gynecologist of Assault Developer in Deadly Trench cancer patient is the The Los Angeles Times Collapse
A
latest woman to accuse a retired University of California, Los Angeles, gynecologist of sexually abusing her during treatment.
reported the 44-year-old unnamed woman has sued UCLA and Dr. James Heaps, alleging he touched her inappropriately under the guise of medical examination. Heaps pleaded not guilty in early June to criminal charges of sexual battery during his treatment of two other patients at a university facility. Heaps didn’t comment on the latest suit but has repeatedly denied wrongdoing. Heaps’ attorney, Tracy Green, called previous allegations meritless. A UCLA Health spokesperson told the Times that the allegations in the newest lawsuit are “very disturbing.” The newspaper says at least 22 other women have stepped forward alleging that Heaps sexually assaulted them while he was practicing at UCLA. Copyright 2019 Associated Press. All rights reserved.
A
wrongful death lawsuit claims dangerous work conditions and a Wyoming developer’s negligence caused the deaths of two men when a trench collapsed last year. The lawsuit was filed in mid-June on behalf of 42-yearold Juan Baez-Sanchez and 56-year-old Victoriano GarciaPerez, who died last September while working on the 12-footdeep trench at a house construction site owned by Wilson developer Jamie Mackay.
Beneficiaries of the two men are seeking $1 million in damages for each death. The lawsuit claims the deaths could have been avoided. The state Occupational Safety and Health Administration earlier this year proposed more than $10,500 penalties against Mackay’s Fireside Resort after finding unsafe conditions at the work site. Copyright 2019 Associated Press. All rights reserved.
Utah Movie-Filtering Company Ordered by Jury to Pay $62M to Studios
A
Utah-based movie-filtering company has been ordered to pay more than $62 million to Disney and other Hollywood studios. A California jury decided the damages last month against the company VidAngel, which had ripped the movies from DVDs and then streamed them for $1 per view with content like violence, nudity or strong language filtered out. VidAngel CEO Neal Harmon says in a statement that the
company plans to appeal, and the finding has “not lessened our resolve to save filtering for families one iota.” They had argued that its business was protected by the Family Movie Act and the First Amendment. U.S. District Court Judge Andre Birotte Jr. disagreed, and decided in favor of Disney, 20th Century Fox, Lucasfilm, Warner Bros. VidAngel has already filed for Chapter 11 bankruptcy. Copyright 2019 Associated Press. All rights reserved.
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News & Markets Climate Change Forcing Some Alaskan Villages to Relocate
A
ccelerating erosion is forcing villages in western Alaska to begin making plans to move, officials
said. Erosion caused by climate change threatens village infrastructure and could force the relocation of communities such as Quinhagak, Alaska’s Energy Desk reported. A 2012 state report listed Quinhagak’s sewer lagoon and multipurpose building as top priorities for replacement or repair because of erosion and thawing permafrost. Erosion now threatens Quinhagak’s airstrip, water treatment plant and water and sewer system, officials said. Quinhagak’s sewer lagoon and the building holding the laundromat and health clinic have experienced the worst impacts, creating a public health problem, said tribal administrator Ferdinand
Cleveland. The village installed thermosiphons, systems designed to keep the ground from thawing, but they are not working because the ground is warming too fast, Ferdinand said. “See the outside part of the building; the concrete is sinking, and the drywall is cracking,” he said. He does not know how they would close up the lagoon if erosion causes waste to leak into the Kuskokwim Bay, an important food source. Quinhagak has applied for a Bureau of Indian Affairs grant to help with moving and rebuilding the lagoon, which could cost $6 million. A new health clinic could cost $2.5 million. Newtok, another coastal community north of Quinhagak, is preparing for a
move that could cost more than $100 million. The time to look toward Quinhagak’s relocation has arrived, officials said. “I think it’s time to start preparing,” said Warren Jones, president of the village corporation, Qanirtuuq Inc. “It’s coming, there’s no way about it.” Copyright 2019 Associated Press. All rights reserved.
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It could happen today. After a damaging earthquake, the dawn we woke up to today could look completely different come tomorrow. Your customers may need your help to recover if their world has been turned upside down by an earthquake. Home insurance does not cover shake damage, and limited government assistance is only for those who qualify. Help your customers protect their way of life with a CEA policy that’s flexible and affordable.
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News & Markets Most Local Governments on Sidelines of California Cannabis Rush, But for How Long? By Don Jergler
T
he number of licensed cannabis businesses in California continues to rise. For the state’s three types of licenses — temporary, provisional and annual — the latest figures show roughly 2,700 businesses licensed by the Bureau of Cannabis Control, which includes retailers, distributors and laboratories. But a more telling number for those interested in the cannabis business is one that shows that relatively few cities and counties in California allow commercial cannabis sales in their local jurisdictions. Three-quarters of local jurisdictions have banned commercial sales, according to a study from Leafy that examined data up to May. These are barriers to growth, but they may not last long. “There’s definitely been quite a bit of interest in getting into the licensed industry,” said Alex Traverso, a spokesman for the bureau. “The problem is that there are still a majority of cities and counties in California that ban commercial cannabis activity.” However, the bureau has seen one jurisdiction after another change its mind on letting in cannabis businesses. It could be to take advantage of the massive local tax potential, or those entities could be yielding to public opinion, which increasingly looks favorably on recreational use. Most (84%) of Americans favor legalization for medical or recreational purposes, while 60 percent say they would embrace measures to tax and regulate it, according to a survey in April from PSB Research, Civilized, Burson Cohn & Wolfe and W8 | INSURANCE JOURNAL | WEST JULY 1, 2019
BuzzFeed News. “It seems like on a daily basis you see a city or county pass an ordinance,” Traverso said. “Those folks will soon come to us with applications for annual licenses.” States like Colorado and Washington, where recreational use was legalized several years earlier, have far fewer local prohibitions — 65 percent of cities and counties ban commercial sales in Colorado, and it’s 35 percent in Washington. “Local cannabis bans tend to happen predominantly in suburban and rural districts in the aftermath of statewide legalization,” the Leafy study states. “At city council meetings, citizens and elected officials often voice fears about retail stores as a visual blight and a locus for criminal activity. Parents worry that a store could offer their children easier access to cannabis.” California’s licensing structure is a work in progress. In January 2018 all cannabis operators had temporary licenses, which were good for four months. Businesses could
extend them for additional time if they paid a $1,000 fee and submitted their application for their annual license. The last day the Bureau could issue temporary licenses was December of 2018. A bill was passed by the legislature last year to create a provisional license good for a year, and anyone who had a temporary license could slide into one of those and then pay the licensing fee, according to Traverso. “We had a huge rush from people looking to get temp licenses in November and December — more than 1,000,” Traverso said. “Now, next month we have a large amount of those licenses due to expire and we need to get those folks into provisionals.” The most recent figures show 42 annual licenses, 1,834 temporary licenses and 859 provisional licenses. Most of the licenses are for distributors (more than 1,100), and brick-andmortar retailers (more than 600). There have also been roughly 300 licenses issued for transport operations, and 160 licenses for transport operations.
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News & Markets Idaho Crop Insurance Company Will Pay $3.48M in Lawsuit
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crop insurance company has agreed to pay a southwestern Idaho farming family $3.48 million following a lawsuit. The Farm Bureau Mutual Insurance Company of Idaho agreed to pay Nate and Kristin Pancheri for damage to their 2016 alfalfa seed crop. A July 2016 storm damaged the crop. The Pancheris in their lawsuit said the insurance
company grossly undervalued the damage. A jury on June 10 agreed with the Pancheris. The opposing parties then settled the punitive damages amount and avoided a second trial. Sean Ellis of the Idaho Farm Bureau declined to comment. Copyright 2019 Associated Press. All rights reserved.
Technology Expected to Aid Drivers in Arizona Dust Storms
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ith Arizona’s monsoon season quickly approaching, state transportation planners plan to begin installing a new dust-detection system on Interstate 10. The Arizona Department of Transportation recorded 85 dust-related crashes along the busy freeway from Phoenix to Tucson from 2010 to 2015. The Arizona Republic reports the state received a $54 million federal grant in 2016 to widen sections of I-10 and implement a project that would reduce dust-related crashes. The system to be put in this fall includes long-range radar set near
Picacho Peak that can detect approaching dust storms from 50 miles away. Short-range radars will be used to detect dust particles every mile between areas where most dust-related I-10 crashes occur. Also planned are electronic billboards to display warning messages readable in both traffic directions. Copyright 2019 Associated Press. All rights reserved.
Four California Men Involved Alleged Organized Auto Insurance Fraud Ring
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etectives from the California Department of Insurance have arrested Ameer Almassou, Bariq Aleyada and Ziad Jaber Jaber for allegedly stealing more than $22,000 from auto insurers by filing fraudulent insurance claims. One additional suspect, Muhamed El Gererey, self-surrendered. The scheme involved owners and associates of Habib Auto Sales, Ocean Auto Sales and Rusul Auto Sales, who allegedly bought damaged vehicles from auto auctions and staged collisions or damage with those vehicles in an attempt to collect fraudulent insurance payouts. In one example, a suspect reported his 2015 Dodge was
stolen, found burned and determined a total loss. He then reported the alleged theft to his insurance carrier and claimed he bought the car for about $12,000 from his own auto dealership. The investigation revealed the car was actually bought at an auto auction and it was already totaled. In another example, a suspect bought a 2007 BMW with mechanical issues at an auto auction. That same day another suspect reported a solo vehicle collision to his insurer and claimed he bought the same 2007 BMW from a dealership. His insurer accepted the claim and paid him approximately $9,295 for his alleged collision. One of the suspects submitted another insurance claim to
W10 | INSURANCE JOURNAL | WEST JULY 1, 2019
a different insurer for a 2013 Mercedes and received an insurance payout for approximately $11,685. He claimed that two hours after purchasing the car he was involved in a three-vehicle collision. To corroborate this claim, another suspect provided a sales contract to the insurer even though the car was actually bought at an auto auction for less than what the contract listed. Three of the suspects were
Ameer Almassou
Bariq Aleyada
taken into custody without incident and booked into the Sacramento County main jail on June 18. The fourth suspect self-surrendered to the Sacramento County main jail on June 20. The case was investigated by the Sacramento Urban Auto Fraud Task Force, which is supervised and led by the California Department of Insurance. The Sacramento County District Attorney’s Office is prosecuting this case.
Ziad Jaber Jaber
Muhamed El Gererey
INSURANCEJOURNAL.COM
News & Markets Oregon Lawmakers Repealed Tsunami Zone Building Law
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he Oregon Legislature has repealed a nearly 25-year-old law prohibiting new schools, hospitals, jails, and police and fire stations from being built in the state’s tsunami inundation zone. Coastal legislators, who pushed the bill, say the risks of a natural disaster must be weighed against an actual economic disaster already unfolding because of the statute.
Rep. David Gomberg, a Democrat from Otis, said without new emergency services buildings, coastal residents and businesses will not be able to get property insurance and without new
schools, property values will fall. Oregon has a 30 percent chance of experiencing a 9.0-magnitude-plus Cascadia subduction zone earthquake in the next 50 years. The quake would be followed by a tsunami similar to the one that devastated eastern Japan in 2011. Copyright 2019 Associated Press. All rights reserved.
Additionally, new added supplemental coverages, which provide limits of liability separate from and in addition to the aggregate limits provided under the policy with no self-insured retention, include coverage for:
AXA XL Enhances Environmental Insurance Coverage
A
XA XL’s Environmental business in North America has added supplemental coverage to its Pollution and Remediation Legal Liability policy. The policy is designed to provide protection to owners, operators and developers of fixed facilities against loss, remediation expense and legal defense expense for sudden and gradual pollution conditions. AXA XL’s PARLL enhanced coverages include: • Location coverage for third-party claims for bodily injury, property damage and remediation expense resulting from a pollution condition or remediation expense from first-party discovery of a pollution condition. • Emergency remediation expense indemnity for remediation expense W12 | INSURANCE JOURNAL | WEST JULY 1, 2019
incurred by the insured on an emergency basis because of a pollution condition. • Contingent transportation for third-party claims for bodily injury, property damage and remediation expense resulting from a pollution condition or remediation expense from first-party discovery of a pollution condition that commences and ends during transportation. • Non-owned disposal sites for third-party claims for bodily injury, property damage and remediation expense resulting from a pollution condition on, at, under or migrating from permitted and licensed non-owned facilities (not scheduled) that accepted pollutants generated by the insured for treatment, storage or disposal.
• Disaster response expense for expenses incurred to minimize potential harm to a business’ reputation resulting from a pollution condition that has or is likely to result in a media event. • Green building materials expense for use of green building materials in the restoration of property damaged because of a pollution condition. • Litigation expense indemnity for actual loss of earnings and expenses incurred by a business for attendance at depositions, hearings, arbitrations, mediation or trials for claims covered under the policy. • Subpoena expense for fees and costs of counsel retained to advise the insured in response to a subpoena served against them. PARLL coverage is underwritten by AXA XL insurance company, Indian Harbor Insurance Co. AXA XL provides insurance and risk management products and services for mid-sized companies through to large multinationals, and reinsurance products to insurance companies globally. AXA XL Insurance offers property, casualty, professional, financial lines and specialty insurance solutions to mid-sized companies through to large multinationals globally. INSURANCEJOURNAL.COM
People National
American International Group said Kathleen Zortman will join the
company as president and CEO of Private Client Group, General Kathleen Zortman Insurance. In this new role, Zortman will lead AIG’s global high net worth portfolio, with responsibility for strategy, underwriting and distribution for AIG’s private client business. Based in New York, she will also manage high net worth product lines. Zortman is joining AIG from QBE Insurance Group, where she has been since 2015, serving as president of Property & Casualty, North America, and overseeing the largest of QBE’s four business lines. Prior to QBE, she was chief field executive of Fireman’s Fund Insurance from 2011 through 2015. Earlier in her career, she was with Professional Risk Solutions, Johnson & Higgins, Deloitte and Chubb.
Starr Insurance Companies has named Carmella Capitano, senior vice president,
as head of primary general casualty-risk management and excess casualty. In this new role, Capitano will lead a team serving organizations with revenues of $400 million or more. She will also lead Starr’s excess casualty team. Capitano joined Starr in 2009 from American International Group and progressed as a leader in primary and excess energy. Dan Conway, executive vice president, specialty casualty, will continue to oversee Starr’s energy unit, with Les Lappe and Greg Cropp respectively managing the primary and excess divisions.
East
The Concord Group Insurance Companies has appointed Daniel L. McCabe as presi-
dent and CEO of the Concord, N.H.-based company. McCabe will serve on the board and executive committee. Most recently, McCabe
acted as senior vice president and chief operating officer. He joined the company in early 2017. Throughout his career, he has held senior leadership positions in underwriting, product development, marketing and operations at Chubb, Travelers, The Hanover, MAPFRE and Lexington Insurance. The Concord Group Insurance Companies has simultaneously appointed Michael P. Nolin Jr. as senior vice president and chief operating officer. Most recently, Nolin served as vice president and chief underwriting officer. In addition to oversight of key business functions and corporate steering activities, Nolin will serve on the board and executive committee in his new role. Nolin is a 35-year veteran of The Concord Group.
Alliant has hired Francis Rossi as vice
president. In this new role, the New Yorkbased property and casualty insurance veteran will deploy his experience in finance, insurance and risk management to a portfolio of clients. Prior to joining Alliant, Rossi was the founder, president and CEO of Rossi Capital Partners, a New York-based finance company. Before founding Rossi Capital Partners, he served as president of Insurance Brokerage with a private equity firm based in New York.
Workers’ compensation specialist The
MEMIC Group has appointed Amanda Roberts as director
of financial reporting, in which she will oversee its financial forecasting, budgeting and general Amanda Roberts ledger reconciliation. Prior to MEMIC, she worked as a nonprofit accounting and compliance consultant and as a senior director for United Way of Massachusetts Bay Inc. in Boston, Mass. In addition,
Michael Michaud
Daniel McCabe
20 | INSURANCE JOURNAL | JULY 1, 2019
has been appointed to director of IT Infrastructure and will oversee MEMIC’s
Michael Michaud
virtual and physical IT systems, storage, networking and communications platforms that are used to support business applications and services. Prior to MEMIC, he worked as a director of platform services at MaineHealth/Maine Medical Center and as a senior director of information technology at Synernet MaineHealth.
South Central
Alliant Insurance Services added Eric Smith as vice president of Alliant
Healthcare, based in Austin, Texas. He will provide insurance and risk advisory services to life science clients across the U.S. Prior to joining Alliant, Smith was a senior vice president at a global insurance brokerage firm where he was responsible for client development and acquisition.
EPIC Insurance Brokers and Consultants, a retail property and casu-
alty insurance brokerage and employee benefits consultant, has hired Principal Ed Oravetz, Principal Keith McNeely, Principal David Potts, Client Executive Elisha Johnson and Client Manager Marilu Alejandre in Houston. This group of employee benefits consulting professionals joins EPIC from Marsh & McLennan Agency — Southwest in Houston, where they worked together for more than three years. Oravetz, McNeely, Potts, Johnson and Alejandre will share responsibility for new business development and for the design, implementation, servicing and management of Employee Benefits Programs, focusing on the needs of middle-market companies across a range of business and industry.
Midwest
Chicago-based property and casualty insurer CNA appointed David Haas senior vice president of National Accounts Casualty. Haas joined CNA in February 2017 as the Florida branch manager with more than 15 years of underwriting and field management experience of insurDavid Haas ance industry experiINSURANCEJOURNAL.COM
ence. Prior to joining CNA, Haas served in various roles at AIG over 12 years.
Grace Arnold has been tapped to lead the insurance division at the Minnesota Commerce Department. Arnold will over-
see solvency, policy form approval, rate review and review of insurance transactions for life insurance, health insurance, as well as property and casualty insurance business conducted in Minnesota. Before joining the Department of Commerce, Arnold served as the manager of individual and family plans at Bright Health Plan. Prior to that, she worked for the Center for Medicare, Medicaid & Marketplaces Services in Bethesda, Md., where she held several positions implementing the private insurance provisions of the Affordable Care Act at the Center for Consumer Information and Insurance Oversight.
Integrity Insurance, a property and casualty carrier headquartered in Appleton, Wisconsin, has added Steve Genck as territory sales manager for Iowa. Based in Iowa, Genck will develop and implement sales action plans with Integrity agency partners in order to drive new business while supporting retention and profitability. Prior Steve Genck to joining Integrity, Genck was a carrier relationship manager/senior placement consultant with Homes Murphy & Associates in Waukee, Iowa.
Southeast
Curi, a provider of products, services and experiences for physicians, has appointed Sean Farrelly as senior vice president of Underwriting. In this role, Farrelly will lead Curi’s underwriting operations nationwide, with a focus on evolving the company’s offerings in medical professional liability insurance, alternative risk and other products. Farrelly joins Sean Farrelly INSURANCEJOURNAL.COM
Curi from PartnerRe, where he served as the portfolio manager for U.S. medical professional liability reinsurance. Prior to his time at PartnerRe, Farrelly also held underwriting roles at Odyssey Re.
Appalachian Underwriters Inc. has
hired three new underwriters to its Commercial Specialty division. April Cook comes to AUI with a background in the underwriting industry, starting as a property and casualty renewal underwriter with an agency and then moving into workers’ compensation and then commercial lines underwriting with different companies. She will work out of AUI’s St. Peters, Mo., office, quoting commercial package submissions for West agents. Amanda Setchfield will also work on quoting commercial package accounts from AUI’s St. Peters office with a focus on Florida and Midwest states. She started with a large, independently owned wholesaler in the mid-2000s, moving from underwriting assistant to senior underwriter. Carol Armstrong will work on Xpress BOP (business owner policy) submissions both through AUI’s online rater and email submissions at AUI’s Oak Ridge, Tennessee, headquarters. Her background in commercial insurance underwriting dates back to 1989, and she most recently served as senior sales manager at another agency.
Jackson Sumner & Associates (JSA) has hired Laura Edmonds as human resources and office manager for the organization’s leadership team. Edmonds will helm all HR efforts, including developing and communicating company policies and procedures to employees, managing the onboarding of new employees, personnel reviews and training opportunities and developing goals, objectives and systems for all of JSA’s 70-plus employees. She will report directly to JSA President and CEO Danielle Wade. Edmonds previously worked for eight years for an orgaLaura Edmonds nization leading a
marketing team. She will work out of the company’s office in Boone, N.C.
West
Walnut Creek, Calif.-based Relation Insurance Services has named Chris McKechnie as chief financial officer and Tim Hall as executive vice president and head of M&A (mergers and acquisitions). Most recently, McKechnie was operating partner and advisor to several financial services-focused investors. He previously worked with The Swiss Re Group. He began his career as an investment banker with Smith Barney. Hall is responsible for Relation’s M&A initiatives. He was most recently a partner and managing director at Waller Helms Advisors. He was previously a vice president in Macquarie Capital’s financial institutions group. He began his investment banking career at Cochran Caronia Waller. Irvine, Calif.-based Burnham Benefits Insurance Services Inc. has promoted Raymond Tunnell to partner. Tunnell
has nearly 30 years of experience in employee benefits consulting. He has been with Burnham Benefits since 2016. He was previously Raymond Tunnell a senior vice president with Hays Companies. Burnham Benefits is a privately held employee benefits consulting, and brokerage firm.
Western Growers has named Eric Trost to its insurance services team as vice president of employee benefits. Prior to joining Western Growers, he was principal of Benefits Compass. Western Growers Insurance Services Inc. is the wholly-owned insurance brokerage of Western Growers and offers risk management to agricultural and related industry members in California, Arizona, Colorado and New Eric Trost Mexico. JULY 1, 2019 INSURANCE JOURNAL | 21
Business Moves Atlantic region of the U.S. SIS will continue to do business under its existing name and remain in its current offices in Leesburg, Virginia, and Moorefield, West Virginia, following the transaction. THG is a middle market insurance agency headquartered in Richmond, Virginia, and is a portfolio company of Bostonbased private equity firm, Abry Partners. It seeks to grow through targeted acquisitions in the middle market insurance brokerage space. The company now has 77 offices in 18 states.
East Paquin Insurance Agency, OceanPoint Insurance Agency
Paquin Insurance Agency has joined OceanPoint Insurance Agency’s organization in Rhode Island. Paquin Agency Principal Rick Paquin has accepted a position as vice president for OceanPoint, and he and his brother, Greg, will continue to serve the local community from their office in Tiverton, R.I. Rick has overseen Paquin Insurance with Greg since they began managing the family business in 1998. All seven employees, including Rick and Greg, will remain at the office location in Tiverton. OceanPoint Insurance Agency Inc. is an independent insurance agency. As a subsidiary of BankNewport and OceanPoint Financial Partners MHC., OceanPoint Insurance can trace its roots back to 1863. Paquin Insurance Agency has provided insurance products for Rhode Island and Massachusetts clients for more than 50 years.
World Insurance Associates, Joseph A. Britton Agency
World Insurance Associates LLC, an independent insurance agency headquartered in Tinton Falls, N.J., acquired the Joseph A. Britton Agency Inc. of Mountainside, N.J., on April 1, 2019. The Joseph A. Britton Agency is a healthcare and professional liability insurance agency that services New Jersey, New York and Pennsylvania. Since 1968, 22 | INSURANCE JOURNAL | JULY 1, 2019
the agency has helped physicians, medical groups and healthcare facilities. World Insurance Associates LLC offers personal and business insurance in 50 states. The company specializes in transportation, hospitality, self-storage facilities, construction (surety), manufacturers and law firms.
Hub International Limited, RIMS Insurance Brokerage Corp.
Hub International Ltd. has acquired the assets of RIMS Insurance Brokerage Corp. Located in Providence, R.I., RIMS Insurance Brokerage Corp. has offered medical professional liability insurance as well as life, health, disability, workers’ compensation, business owner’s insurance and other coverages since 1988. Following the transaction, Robert Anderson, president of RIMS Insurance Brokerage Corp., will join Hub New England and will report to Daniel Nissi, president of Hub New England’s Healthcare Specialty Practice. Headquartered in Chicago, Ill., Hub International Limited is a full-service global insurance broker.
The Hilb Group, Summit Insurance Services
The Hilb Group LLC has acquired Summit Insurance Services LLC, the insurance operations of Summit Financial Group Inc. of Moorefield, W.Va. The transaction became effective May 1. SIS is an insurance agency that primarily provides employee benefits to businesses and individuals throughout the Mid-
Midwest Arthur J. Gallagher, MDV Wealth Planning
Global insurance brokerage, risk management and consulting services firm, Arthur J. Gallagher & Co., has acquired Fox River Grove, Ill.-based MDV Wealth Planning Inc. Founded in 2014, MDV Wealth Planning sells and places life insurance products for clients of registered investment advisors, independent financial advisors, institutional brokers, life insurance professionals, and property/casualty agents and brokers. The firm focuses on C-suite executives and high-net-worth individuals. Thomas Vilardo and his associates will continue to operate from their current location under the direction of Jeff Leonard, National Financial and Retirement Services practice leader. Arthur J. Gallagher & Co. is headquartered in Rolling Meadows, Illinois.
McGowan Insurance Group, Jackson-McCormick Insurance
Indiana-based independent insurance agencies McGowan Insurance Group and Jackson-McCormick Insurance have merged into one organization. McGowan is headquartered in Indianapolis and Jackson-McCormick has offices in Lebanon and Lafayette. McGowan Insurance Group is licensed and actively does business throughout the U.S. Jackson-McCormick works primarily in the Midwest.
continued on page 24
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Business Moves continued from page 22 The merged organization will adopt the McGowan name, have close to 50 employees and maintain three offices located in Indianapolis, Lebanon and Lafayette. Todd Jackson, former president of Jackson-McCormick, will become a partner of McGowan Insurance Group and a member of the senior leadership team.
AssuredPartners, Air Capital Insurance
AssuredPartners Inc. has acquired Air Capital Insurance LLC of Wichita, Kansas. ACI’s team of 10 will remain under the leadership of ACI founders Glenn Tate and Greg Hiser. The group will join AssuredPartners’ aerospace unit. The agency was founded in 2002 by Tate and Hiser. It currently reports approximately $2 million in annualized revenues. AssuredPartners is headquartered in Lake Mary, Florida, and led by Jim Henderson and Tom Riley.
South Central Extraco Insurance, Higginbotham
Extraco Banks has sold its commercial insurance operation to Fort Worth, Texasbased independent insurance broker, Higginbotham. Extraco Insurance is a group of five property/casualty insurance professionals operating in Waco, Temple and Hamilton, Texas, for 19 years. The group will continue doing business under the Higginbotham name. Higginbotham entered the Waco market in 2009 with the acquisition of another local insurance agency. Higginbotham was founded in 1948 and is headquartered in Fort Worth, Texas, with more than 30 additional offices statewide and in Oklahoma and Georgia serving domestic and international customers.
Southeast Hub, In-Fi
Hub International Ltd., has acquired the assets of CBIS LLC, d/b/a In-Fi. Established in 2016 by co-founder Jon 24 | INSURANCE JOURNAL | JULY 1, 2019
Chasteen, In-Fi developed a distribution platform for financial institutions, which utilizes technology and automation to monetize high volume, low premium insurance placements and establishes lead generation through fulfillment, service and renewal. Hub said In-Fi’s focus on streamlining customer engagement quickly and providing strong customer service supports its ongoing strategy to connect with personal lines insurance customers. Hub also hired property and casualty insurance specialist and In-Fi co-founder Chasteen and acquired his book of business. Based in Atlanta, Chasteen will join the Hub South region, bringing with him more than 15 years of experience designing, placing and managing complex insurance and risk management programs. In addition to starting In-Fi, Chasteen previously worked with Palmer & Cay. He specializes in financial institutions, complex property & casualty, alternative risk transfer/captives and international insurance. Chicago, Ill.-based Hub is an insurance broker providing property/casualty, life and health, employee benefits, investment and risk management.
BB&T, SunTrust
BB&T Corp. and SunTrust Banks Inc. will rebrand as Truist after the two companies combine through their planned merger announced earlier this year. The merger is expected to close in the third or fourth quarter of 2019 subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by the shareholders of each company. BB&T and SunTrust remain separate and independent companies until the transaction closes. The companies also announced the address of the new corporate headquarters located in Charlotte, N.C. The combined holding company will be named Truist Financial Corp., and the combined bank will be named Truist Bank. While the new names will be effective upon completion of the merger, clients will continue to be served post-closing under the BB&T and SunTrust brands
for the near future. Over time following the closing, both the BB&T and SunTrust brands will be transitioned to Truist, including its products and services. The merger was announced in February. The firms said at the time, the combined company will leverage its complementary businesses to generate additional revenue opportunities. Winston-Salem-based BB&T operates more than 1,800 financial centers in 15 states and Washington, D.C. Headquartered in Atlanta, SunTrust has two business segments: consumer and wholesale. Its flagship subsidiary, SunTrust Bank, operates a branch and ATM network throughout the Southeast and Mid-Atlantic states.
West Hub International, Foster & Parker
Hub International Ltd. has acquired Foster & Parker Insurance Agency Inc. Steve Barsotti, president of Foster & Parker Insurance, and the staff will join Hub California. Foster & Parker Insurance is an independent insurance agency located in Madera, Oakhurst, and Rancho Cordova, Calif., that specializes in home, auto, business, farm, and life and health insurance and risk management. Chicago, Ill.-based Hub is an insurance broker providing property/casualty, life and health, employee benefits, investment and risk management products and services.
Arthur J. Gallagher, Abram Interstate Insurance Services
Arthur J. Gallagher & Co. has acquired Rocklin, Calif.-based Abram Interstate Insurance Services Inc. Ron Abram and his associates will remain in their current location under the direction of Joel Cavaness, president of Risk Placement Services Inc., a subsidiary of Arthur J. Gallagher & Co. Abram Interstate Insurance is a property/casualty managing general agency. Rolling Meadows, Ill.-based Arthur J. Gallagher has operations in 35 countries. INSURANCEJOURNAL.COM
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Special Report: Super Regional 2019 Super Regional P/C Insurers
TM
Demotech Inc. Reveals Leading Multi-State Property/Casualty Insurers
property/casualty annual statement; • At least $1 million of direct premium written in each of two to 34 states; • Less than 90% of direct premium written in any one state; • Less than 90% of direct premium written in any one line of business; • Policyholders surplus of at least $100 million; • Net premium written of at least $50 million; and • Direct premium written of at least $25 million.
I
n order to continue the discussion regarding what constitutes a Super Regional P/C Insurer™ and to give definition to this important group of insurers, Demotech Inc. analyzed yearend 2018 data for property/casualty insurance companies. This data was utilized By Barry J. Koestler II to classify and stratify insurers reporting data to the National Association of Insurance Commissioners. This year marks the 13th year of this effort, as the original criteria and objective definitions for Super Regional P/C Insurers™ and our other company classifications were established in the Feb. 12, 2007, issue of Insurance Journal.
Demotech Classification System
The Demotech Company Classification System categorizes property/casualty insurers, not groups or families of insurers, into one of 11 categories based 26 | INSURANCE JOURNAL | JULY 1, 2019
A Super Regional is an individual company writing multiple lines of insurance in multiple states. Risk retention groups, surplus lines insurers, and reinsurers are not eligi2019 ble for the Super Regional category as they are assigned to their own classifications. Prior to the establishment of an industry-wide definition, a number of P/C insurers had referred to themselves as Super Regionals. Demotech, the official research partner of Insurance Journal, has compared the data to the criteria and updated the list of Super Regionals for 2019.
on an analysis of the data reported by the companies. The 11 categories that comprise the system are Nationals, Near Nationals, Super Regionals, Regionals, State Specialists, Coverage Specialists, Strategic Subsidiaries, Risk Retention Groups, Surplus Lines Carriers, Reinsurers and companies with less than $1 million in direct premium written. A company cannot be assigned to more than one category. Therefore, a company not designated as a 2019 Property/Casualty Insurance Cos. Super Regional is given another Demotech Company Classifications classification, perhaps Near Direct Premium National, Regional, or State Written Less than Near Nationals 2.6% $1 million 3.4% Specialist. Nationals 2.4% Reinsurers 2.2%
Criteria and Thresholds
To determine the companies for the 2019 Super Regional Property/Casualty Insurer™ list, these specific, objective qualifying criteria and thresholds evaluated as of Dec. 31, 2018, were used: • Active, individual companies; • Reporting data using the
Super Regionals 5.9%
Surplus Lines Carriers 7.6% Risk Retention Groups 8.9%
Regionals 7.9%
Strategic Subsidiaries 17.6%
State Specialists 27.4%
Coverage Specialists 14.1%
INSURANCEJOURNAL.COM
The 2019 Super Regional Property/Casualty Insurers™
For 2019, 151 Super Regional Property/ Casualty Insurers™ were identified. They are presented in this Insurance Journal special report both alphabetically and by size as ranked by direct premium written as of Dec. 31, 2018. For 2019, there are nine Super Regional companies that were not classified as Super Regionals in 2018, as well as 13 insurers identified as Super Regionals in 2018 that have been reclassified into another category this year based on year-end 2018 information. Of the 151 Super Regionals for 2019, 74
have been designated as such for all 13 years of the Company Classification System. Super Regional insurers are critically important to the insurance industry, and of particular importance to their agents, producers, and insureds. These companies are typically strong, stable markets that work hard for their agents, insureds, and their reinsurers. This is why Insurance Journal continues to have Demotech quantify and identify the criteria used to define an insurer as a Super Regional. Insurers and interested readers are encouraged to review the selection criteria and thresholds used to determine the
2019 Super Regionals. The selection criteria remain quantitative and transparent. Demotech is focused on setting benchmarks at levels that accurately categorize the industry. The relative consistency of the company type distribution over time suggests that the categorizations established are valid and effective. It is important to reiterate that the Demotech Company Classification System is an objective stratification of the companies that comprise the industry based on their business models. It is not equivalent to or suggestive of ratings of the individ-
continued on page 28
2019 Super Regional Property/Casualty Insurers™
Alphabetical Listing
ACUITY, A Mutual Insurance Co. Alaska National Insurance Co. All America Insurance Co. American Commerce Insurance Co. American Family Home Insurance Co. American Family Mutual Insurance Co., S.I. American Hallmark Insurance Co. of Texas American Mercury Insurance Co. American Select Insurance Co. Amerisure Insurance Co. Amerisure Mutual Insurance Co. AMEX Assurance Co. Arbella Protection Insurance Co. Atlantic States Insurance Co. Auto Club Group Insurance Co. Auto Club Insurance Association Automobile Insurance Co. of Hartford, Connecticut Auto-Owners Insurance Co. AXA Insurance Co. Bay State Insurance Co. Benchmark Insurance Co. BITCO General Insurance Corp. Brethren Mutual Insurance Co. Builders Mutual Insurance Co. California Casualty Indemnity Exchange Cambridge Mutual Fire Insurance Co. Capitol Indemnity Corp. Central Mutual Insurance Co. Cherokee Insurance Co. Citizens Insurance Co. of America Columbia Insurance Co. Columbia Mutual Insurance Co. Concord General Mutual Insurance Co. Contractors Bonding and Insurance Co. COUNTRY Mutual Insurance Co. Courtesy Insurance Co. CSAA Affinity Insurance Co. CSAA General Insurance Co. Cumberland Mutual Fire Insurance Co. Cypress Insurance Co. DB Insurance Co., Ltd. (US Branch) Dentists Insurance Co. Developers Surety and Indemnity Co. Donegal Mutual Insurance Co. Electric Insurance Co. Endurance Risk Solutions Assurance Co. Erie Insurance Co. Erie Insurance Exchange Executive Risk Indemnity Inc. Explorer Insurance Co. Farm Bureau Property & Casualty Insurance Co. Farm Family Casualty Insurance Co.
INSURANCEJOURNAL.COM
Farmers Alliance Mutual Insurance Co. Farmers Automobile Insurance Association Farmers Insurance Co., Inc. Farmers Mutual Insurance Co. of Nebraska Farmington Casualty Co. Farmland Mutual Insurance Co. FCCI Insurance Co. Federated National Insurance Co. Financial Pacific Insurance Co. Fire Insurance Exchange Frankenmuth Mutual Insurance Co. General Security National Insurance Co. Goodville Mutual Casualty Co. Grange Insurance Association Grange Mutual Casualty Co. Gray Insurance Co. Great Midwest Insurance Co. Grinnell Mutual Reinsurance Co. Hallmark Insurance Co. Harford Mutual Insurance Co. Hartford Insurance Co. of Illinois Hastings Mutual Insurance Co. Imperium Insurance Co. IMT Insurance Co. Lightning Rod Mutual Insurance Co. Lititz Mutual Insurance Co. MemberSelect Insurance Co. Merchants Mutual Insurance Co. Mercury Casualty Co. Merrimack Mutual Fire Insurance Co. Mid-Continent Casualty Co. Middlesex Insurance Co. Milbank Insurance Co. Mitsui Sumitomo Insurance Co. of America MMG Insurance Co. Motorists Commercial Mutual Insurance Co. Motorists Mutual Insurance Co. Motors Insurance Corp. Mountain West Farm Bureau Mutual Insurance Co. Mutual Benefit Insurance Co. Mutual of Enumclaw Insurance Co. Nationwide Mutual Fire Insurance Co. NGM Insurance Co. North River Insurance Co. North Star Mutual Insurance Co. Oak River Insurance Co. Occidental Fire and Casualty Co. of North Carolina Old Republic General Insurance Corp. Owners Insurance Co. Pacific Specialty Insurance Co. Peerless Insurance Co. Pekin Insurance Co.
PEMCO Mutual Insurance Co. Penn National Security Insurance Co. Pennsylvania National Mutual Casualty Insurance Co. Philadelphia Contributionship Insurance Co. Physicians Insurance A Mutual Co. Preferred Mutual Insurance Co. Progressive Casualty Insurance Co. Progressive Gulf Insurance Co. Progressive Northern Insurance Co. Progressive Preferred Insurance Co. Quincy Mutual Fire Insurance Co. Redwood Fire and Casualty Insurance Co. Rockwood Casualty Insurance Co. SECURA Insurance, A Mutual Co. Selective Insurance Co. of America Selective Insurance Co. of New York Selective Insurance Co. of South Carolina Selective Insurance Co. of the Southeast Selective Way Insurance Co. Shelter Mutual Insurance Co. Society Insurance, a Mutual Co. St. Paul Fire and Marine Insurance Co. St. Paul Mercury Insurance Co. Star Insurance Co. State Auto Property & Casualty Insurance Co. State Automobile Mutual Insurance Co. Stillwater Insurance Co. Toyota Motor Insurance Co. TransGuard Insurance Co. of America, Inc. Trinity Universal Insurance Co. Triton Insurance Co. Truck Insurance Exchange United Financial Casualty Co. United Fire & Casualty Co. United Ohio Insurance Co. United Property & Casualty Insurance Co. Utica First Insurance Co. Utica Mutual Insurance Co. Vanliner Insurance Co. Vermont Mutual Insurance Co. West Bend Mutual Insurance Co. Western Agricultural Insurance Co. Western National Mutual Insurance Co. Western Reserve Mutual Casualty Co. Westfield Insurance Co. Westfield National Insurance Co. Zenith Insurance Co.
JULY 1, 2019 INSURANCE JOURNAL | 27
Special Report: Super Regional
I
continued from page 27 ual insurers. Moreover, inclusion on the list of Super Regionals does not imply that a company is superior to companies that were not included in that classification. Future issues of Insurance Journal will report on the other categories within the Demotech Company Classification System. Koestler II is the chief ratings officer of Demotech Inc., a financial analysis firm specializing in evaluating the financial stability of regional and specialty insurers. Since 1985, Demotech has been providing Financial Stability Ratings® of property/casualty insurers and title underwriters. Website: www.demotech.com. Email: bkoestler@demotech.
For reprints, badges, plaques and more, call 800-897-9965 ext. 125, or email: reprints@insurancejournal.com.
n recognition of the continued stratification of carriers using Demotech’s Company Classification System, Demotech created the I LEAD Conference (formerly known as The Super Regional P/C Insurer™ Conference) to assist and educate carriers of all sizes and specialties. This conference will take place Aug. 18-20, 2019, at the Hilton Columbus at Easton in Columbus, Ohio. At the conference, subject matter experts will convene to discuss a variety of relevant leadership topics including the following:
• • • •
A leader’s strategic advantage; • Insurtech; Talent acquisition; • Addressing delays in claim processing; Keeping commitments; • Premium and rating considerations. Cybersecurity;
For more information, visit www.ileadinsurance.com.
NEW 2019 Super Regionals Company Name
2019 Demotech Company Classification
2018 Demotech Company Classification
2017 Demotech Company Classification
2016 Demotech Company Classification
2015 Demotech Company Classification
Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional
Regional Coverage Specialist Regional Regional Regional Regional Regional Regional Coverage Specialist
Regional Coverage Specialist Regional Regional Regional Super Regional Regional Regional Coverage Specialist
Regional Coverage Specialist Regional Regional Super Regional Super Regional Regional Regional Coverage Specialist
Regional Coverage Specialist Regional Regional Regional Regional Regional Regional Coverage Specialist
Benchmark Insurance Co. CSAA General Insurance Co. DB Insurance Co., Ltd. (US Branch) Endurance Risk Solutions Assurance Co. Financial Pacific Insurance Co. Hallmark Insurance Co. MMG Insurance Co. Progressive Gulf Insurance Co. Zenith Insurance Co.
RECLASSIFIED 2018 Super Regionals Company Name
Allied World Specialty Insurance Co. American Road Insurance Co. American Security Insurance Co. American Strategic Insurance Corp. Central States Indemnity Co. of Omaha EMCASCO Insurance Co. Farmers Insurance Exchange Harco National Insurance Co. Insurance Co. of North America Old United Casualty Co. Pacific Employers Insurance Co. Protective Property & Casualty Insurance Co. Providence Mutual Fire Insurance Co.
2019 2018 Demotech Demotech Company Company Classification Classification Near National Near National Near National Near National Strategic Subsidiary Near National Near National Near National Strategic Subsidiary Coverage Specialist Strategic Subsidiary Regional Regional
Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional
2017 Demotech Company Classification
2016 Demotech Company Classification
Why Company 2015 Does Not Demotech Qualify as a Company 2019 Super Regional Classification
Near National Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Regional
Near National Super Regional Near National Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Strategic Subsidiary Super Regional Regional
Near National Super Regional Near National Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Strategic Subsidiary Super Regional Super Regional
States > 34 States > 34 States > 34 States > 34 NPW States > 34 States > 34 States > 34 NPW LOB > 90% NPW NPW PHS
LOB = Line of Business; NPW = Net Premium Written; PHS = Policyholders Surplus
28 | INSURANCE JOURNAL | JULY 1, 2019
INSURANCEJOURNAL.COM
2019 Super Regional P/C Insurersâ„¢
As developed by Demotech Inc. for Insurance Journal. Ranked by Direct Premium Written as of 12/31/2018. Company
12/31/2018 DPW OOOs omitted
Group Name
State Of Domicile
Number/States Greater than $1 Million DPW as of 12/31/2018
1
Erie Insurance Exchange
$4,943,119
Erie Insurance Group
PA
12 - DC,IL,IN,KY,MD,NC,OH,PA,TN,VA,WV,WI
2 3
American Family Mutual Insurance Co., S.I. Auto-Owners Insurance Co.
$4,709,902 $3,707,954
American Family Insurance Group Auto Owners Group
WI MI
4
Owners Insurance Co.
$2,067,082
Auto Owners Group
OH
5 6 7
Progressive Casualty Insurance Co. Progressive Northern Insurance Co. United Financial Casualty Co.
$1,935,796 $1,825,742 $1,824,153
Progressive Group Progressive Group Progressive Group
OH WI OH
8
COUNTRY Mutual Insurance Co.
$1,708,634
IL
9 10 11
Shelter Mutual Insurance Co. Erie Insurance Co. ACUITY, A Mutual Insurance Co.
$1,635,180 $1,542,863 $1,542,129
Country Insurance & Financial Services Group Shelter Insurance Group Erie Insurance Group N/A
MO PA WI
12 13 14
$1,484,371 $1,267,409 $1,238,954
Farmers Insurance Group N/A Iowa Farm Bureau Group
CA WI IA
15
Fire Insurance Exchange West Bend Mutual Insurance Co. Farm Bureau Property & Casualty Insurance Co. Nationwide Mutual Fire Insurance Co.
19 - AZ,CO,GA,ID,IL,IN,IA,KS,MN,MO,NE,NV,ND,OH,OR,SD,UT,WA,WI 26 - AL,AZ,AR,CO,FL,GA,ID,IL,IN,IA,KS,KY,MI,MN,MO,NE,NC,ND,OH,PA, SC,SD,TN,UT,VA,WI 25 - AL,AZ,AR,CO,FL,GA,ID,IL,IN,IA,KS,KY,MN,MO,NE,NC,ND,OH,PA,SC, SD,TN,UT,VA,WI 18 - AZ,AR,CA,CO,CT,DC,HI,KY,MD,MA,MO,NY,OH,PA,RI,TN,TX,WA 20 - DE,IL,IA,KY,ME,NE,NV,NH,NM,NY,OK,OR,PA,RI,SC,SD,VT,VA,WI,WY 29 - AK,AZ,AR,CA,CO,DE,HI,ID,KS,KY,ME,MD,MA,MN,MT,NV,NH, NM,NY,ND,OH,PA,RI,SD,TX,UT,VT,WA,WV 31 - AL,AK,AZ,AR,CO,CT,GA,ID,IL,IN,IA,KS,KY,MA,MI,MN,MO,NV,NH, NJ,NY,ND,OH,OK,OR,PA,TN,VT,VA,WA,WI 15 - AR,CO,IL,IN,IA,KS,KY,LA,MS,MO,NE,NV,OH,OK,TN 13 - DC,IL,IN,KY,MD,NY,NC,OH,PA,TN,VA,WV,WI 26 - AZ,CO,ID,IL,IN,IA,KS,KY,ME,MI,MN,MO,MT,NE,NV,NM,ND,OH,PA, SD,TN,TX,UT,VT,WI,WY 19 - AL,CA,CO,IL,IA,MI,MN,MO,MT,NE,NV,ND,OR,SD,TX,UT,WA,WI,WY 12 - IL,IN,IA,KS,KY,MI,MN,MO,NE,OH,TN,WI 8 - AZ,IA,KS,MN,NE,NM,SD,UT
$1,224,550
Nationwide Corp Group
16 17
MemberSelect Insurance Co. Westfield Insurance Co.
$1,152,430 $1,099,621
Automobile Club MI Group Westfield Group
18 19 20
Progressive Preferred Insurance Co. Farmers Insurance Co. Inc. Truck Insurance Exchange
$1,068,260 $1,022,659 $980,247
Progressive Group Farmers Insurance Group Farmers Insurance Group
21
Citizens Insurance Co. of America
$916,133
The Hanover Insurance Group
22
CSAA General Insurance Co.
$862,823
CSAA Insurance Group
23 24
United Property & Casualty Insurance Co. Central Mutual Insurance Co.
$727,836 $719,522
25
$694,132
26
State Auto Property & Casualty Insurance Co. United Fire & Casualty Co.
United Ins Holdings Group Central Mutual Insurance Co Group State Auto Mutual Group
$690,534
United Fire & Casualty Group
IA
27 28
Frankenmuth Mutual Insurance Co. Selective Insurance Co. of South Carolina
$672,787 $672,206
Frankenmuth Group Selective Insurance Group
MI IN
29 30
Zenith Insurance Co. Selective Insurance Co. of the Southeast
$670,708 $591,341
Fairfax Financial Group Selective Insurance Group
CA IN
31
Selective Insurance Co. of America
$583,275
Selective Insurance Group
NJ
32
$575,770
PA
$566,743 $556,234
Pennsylvania National Insurance Group FedNat Holding Co Group Travelers Group
$522,320 $498,981
N/A IAT Reinsurance Co Group
FL NC
37 38 39 40
Pennsylvania National Mutual Casualty Insurance Co. Federated National Insurance Co. Automobile Insurance Co. of Hartford, Connecticut Courtesy Insurance Co. Occidental Fire and Casualty Co. of North Carolina PEMCO Mutual Insurance Co. FCCI Insurance Co. SECURA Insurance, A Mutual Co. Redwood Fire and Casualty Insurance Co.
$483,787 $483,231 $477,144 $461,593
N/A FCCI Mutual Insurance Group Secura Insurance Group Berkshire Hathaway Group
WA FL WI NE
41 42 43
Progressive Gulf Insurance Co. Grange Mutual Casualty Co. St. Paul Fire and Marine Insurance Co.
$446,772 $444,048 $436,852
Progressive Group Grange Mutual Casualty Group Travelers Group
OH OH CT
44 45 46
Hastings Mutual Insurance Co. Motorists Mutual Insurance Co. State Automobile Mutual Insurance Co.
$435,757 $430,941 $428,664
N/A Motorists Mutual Group State Auto Mutual Group
MI OH OH
47 48 49 50
North Star Mutual Insurance Co. Auto Club Group Insurance Co. Cypress Insurance Co. American Select Insurance Co.
$427,787 $420,870 $418,607 $417,233
North Star Co Group Automobile Club MI Group Berkshire Hathaway Group Westfield Group
MN MI CA OH
33 34 35 36
INSURANCEJOURNAL.COM
OH 28 - AL,AR,CA,CT,DE,DC,GA,IL,IN,KY,ME,MD,MI,MS, NH,NY,NC,OH,OK,PA,RI,SC,TN,TX,VT,VA,WA,WV MI 10 - GA,IL,IN,IA,MI,MN,NE,ND,OH,TN OH 25 - AL,AZ,AR,CO,DE,FL,GA,IL,IN,IA,KY,MD,MI,MN,MO,NM,NC,OH,PA,SC, TN,TX,VA,WV,WI OH 10 - AZ,CO,GA,HI,MN,MO,NM,OH,PA,UT KS 5 - AR,IA,KS,MO,OK CA 32 - AL,AZ,AR,CA,CO,CT,ID,IL,IN,IA,KS,MI,MN,MO,MT,NE,NV,NJ, NM,NY,OH,OK,OR,PA,SD,TN,TX,UT,VA,WA,WI,WY MI 27 - AL,AZ,CA,CO,CT,GA,IL,IN,KS,ME,MA,MI,MN,MO,NH, NJ,NY,NC,OH,PA,RI,SC,UT,VT,VA,WA,WI IN 22 - AZ,CA,CO,CT,DE,DC,ID,IN,KS,KY,MD,MT,NV,NJ,NY,OH,OK,OR,PA, SD,UT,VA FL 11 - CT,FL,GA,LA,MA,NJ,NY,NC,RI,SC,TX OH 20 - AZ,CO,CT,GA,IL,IN,KY,MA,MI,NV,NH,NM,NY,NC,OH,OK,SC,TN,TX,VA IA
FL CT
30 - AL,AZ,AR,CO,CT,GA,IL,IN,IA,KS,KY,MD,MA,MI,MN,MS,MO,NC,ND,OH, OK,PA,SC,SD,TN,TX,UT,VA,WV,WI 30 - AL,AZ,AR,CA,CO,FL,ID,IL,IN,IA,KS,KY,LA,MI,MN,MS,MO,MT,NE, NM,ND,OH,OK,OR,SD,TN,TX,UT,WI,WY 15 - AL,FL,GA,IL,IN,KY,ME,MI,NH,NC,OH,SC,TN,VT,WI 23 - CT,DE,GA,IL,IN,IA,KY,MD,MA,MI,MN,MO,NH,NJ,NY,NC,OH,PA,RI,SC, TN,VA,WI 19 - AL,AZ,CA,FL,GA,IL,IN,MD,MS,MO,NJ,NM,NC,OK,PA,SC,TN,TX,VA 30 - AL,AZ,CO,CT,DE,DC,FL,GA,IL,IN,IA,KY,LA,MD,MA,MI,MN,MS,MO, NH,NY,NC,OH,PA,RI,SC,TN,TX,VA,WI 28 - AZ,CA,CO,CT,DE,DC,GA,HI,IL,IN,IA,MD,MA,MI,MN,MO,NH, NJ,NY,NC,OH,PA,RI,SC,TN,VA,WA,WI 12 - AL,DE,IN,MD,NJ,NC,OH,PA,SC,TN,TX,VA 6 - AL,FL,GA,LA,SC,TX 31 - AL,AZ,AR,CO,CT,DC,GA,ID,IL,IN,KS,KY,ME,MD,MN,MS,MO,MT, NV,NY,NC,OH,OR,PA,SC,TN,TX,UT,VA,WA,WI 18 - AL,CA,CO,FL,GA,IL,MD,NH,NJ,NM,NC,OH,PA,SC,TN,TX,VA,WI 32 - AL,AK,AZ,AR,CA,CO,CT,FL,GA,IL,IN,KY,LA,MD,MA,MI,MS,MO,NV, NJ,NM,NY,NC,OH,OR,PA,SC,TN,TX,UT,VA,WA 2 - OR,WA 18 - AL,AR,FL,GA,IL,IN,KY,LA,MD,MI,MS,MO,NC,OH,SC,TN,TX,VA 12 - AZ,CO,IL,IN,IA,KS,KY,MI,MN,MO,ND,WI 34 - AL,AK,AZ,AR,CA,CO,CT,DE,GA,HI,ID,IL,IN,KS,KY,LA, MD,MI,MN,MS,MO,NE,NV,NJ,NY,NC,OK,PA,SC,TN,TX,UT,VT,VA 2 - MS,VA 8 - GA,IL,IN,KY,OH,PA,TN,VA 21 - AR,CA,CO,FL,IL,KS,KY,LA,MI,MS,MT,NM,NY,ND,OH,OK,PA, TX,UT,WV,WY 6 - IL,IN,IA,MI,OH,WI 6 - IN,KY,MI,OH,PA,WV 28 - AL,AZ,AR,CO,CT,GA,IL,IN,IA,KS,KY, MD,MA,MI,MN,MS,MO,NC,ND,OH,PA,SC,SD,TN,TX,VA,WV,WI 7 - IA,KS,MN,NE,ND,OK,SD 6 - IN,IA,MI,NE,ND,WI 7 - AL,AR,CA,GA,LA,SC,TN 14 - CO,GA,IL,IN,IA,KY,MI,MN,NM,OH,PA,TN,WV,WI
JULY 1, 2019 INSURANCE JOURNAL | 29
Special Report: Super Regional Company
12/31/2018 DPW OOOs omitted
Group Name
State Of Domicile
51 52
Pekin Insurance Co. Amerisure Insurance Co.
$400,622 $398,822
Pekin Insurance Group Amerisure Co Group
IL MI
53 54 55
Vermont Mutual Insurance Co. Farmers Mutual Insurance Co. of Nebraska Farm Family Casualty Insurance Co.
$398,395 $397,170 $392,202
VT NE NY
56
Amerisure Mutual Insurance Co.
$384,932
Vermont Mutual Group N/A American National Financial Group Amerisure Co Group
57
NGM Insurance Co.
$380,276
Main Street America Group
FL
58 59 60 61
Western National Mutual Insurance Co. Grinnell Mutual Reinsurance Co. Merrimack Mutual Fire Insurance Co. BITCO General Insurance Corp.
$373,344 $366,258 $358,055 $350,121
Western National Mutual Group Grinnell Mutual Group Andover Group Old Republic Group
MN IA MA IL
62
Westfield National Insurance Co.
$342,390
Westfield Group
OH
63 64 65
Preferred Mutual Insurance Co. Donegal Mutual Insurance Co. Benchmark Insurance Co.
$338,615 $336,665 $330,457
N/A Donegal Group Benchmark Holding Group
NY PA KS
66 67
Mutual of Enumclaw Insurance Co. Old Republic General Insurance Corp.
$327,850 $323,599
Mutual of Enumclaw Group Old Republic Group
OR IL
68
Motors Insurance Corp.
$308,766
Ally Insurance Holdings Group
MI
69 70
Builders Mutual Insurance Co. Mitsui Sumitomo Insurance Co. of America
$307,536 $295,385
Builders Group MS & AD Insurance Group
NC NY
71 72
Western Agricultural Insurance Co. Electric Insurance Co.
$290,221 $287,784
Iowa Farm Bureau Group General Electric Group
IA MA
73
California Casualty Indemnity Exchange
$279,022
CA
74
North River Insurance Co.
$268,984
California Casualty Management Group Fairfax Financial Group
75 76 77 78 79 80 81
American Commerce Insurance Co. Selective Way Insurance Co. Alaska National Insurance Co. Pacific Specialty Insurance Co. Farmers Automobile Insurance Association Merchants Mutual Insurance Co. Utica Mutual Insurance Co.
$268,656 $263,387 $249,594 $236,379 $235,990 $230,151 $227,317
Mapfre Insurance Group Selective Insurance Group N/A Western Service Contract Group Pekin Insurance Group Merchants Mutual Group Utica Group
OH NJ AK CA IL NY NY
82
Farmington Casualty Co.
$225,537
Travelers Group
CT
83 84 85 86
Atlantic States Insurance Co. Cherokee Insurance Co. Arbella Protection Insurance Co. Star Insurance Co.
$224,870 $218,030 $216,588 $215,979
Donegal Group N/A Arbella Insurance Group AmeriTrust Group
PA MI MA MI
87 88 89
$214,288 $207,439 $204,388
Quincy Mutual Group Automobile Club MI Group Mountain West Farm Group
MA MI WY
90 91
Quincy Mutual Fire Insurance Co. Auto Club Insurance Association Mountain West Farm Bureau Mutual Insurance Co. MMG Insurance Co. AXA Insurance Co.
$201,463 $200,702
N/A Axa Insurance Group
ME NY
92 93
Society Insurance, a Mutual Co. Farmland Mutual Insurance Co.
$199,489 $195,672
94 95 96
American Hallmark Insurance Co. of Texas Mercury Casualty Co. Vanliner Insurance Co.
$195,543 $190,632 $190,339
97
AMEX Assurance Co.
$188,153
98 Oak River Insurance Co. 99 Stillwater Insurance Co. 100 American Family Home Insurance Co.
30 | INSURANCE JOURNAL | JULY 1, 2019
$187,155 $182,794 $181,384
MI
NJ
Number/States Greater than $1 Million DPW as of 12/31/2018
6 - AZ,IL,IN,IA,OH,WI 25 - AL,AZ,AR,FL,GA,IL,IN,IA,KY,LA,MD,MI,MN,MS,MO,NE,NY,NC,PA,SC, TN,TX,UT,VA,WI 7 - CT,ME,MA,NH,NY,RI,VT 2 - NE,SD 12 - CT,DE,ME,MA,NH,NJ,NY,PA,RI,VT,VA,WV 29 - AL,AZ,AR,CA,CO,FL,GA,IL,IN,IA,KY,LA,MD,MI,MN,MS,MO,NE, NJ,NY,NC,OK,PA,SC,TN,TX,UT,VA,WI 23 - AZ,CT,DE,FL,GA,IL,ME,MD,MA,MI,NV,NH,NJ,NY,NC,PA,RI,SC,TN, TX,UT,VT,VA 12 - ID,IL,IA,MN,MT,NV,ND,OR,SD,UT,WA,WI 12 - IL,IN,IA,MN,MO,NE,ND,OH,OK,PA,SD,WI 8 - CT,IL,ME,MA,NH,NJ,NY,RI 33 - AL,AZ,AR,CO,FL,GA,ID,IL,IN,IA,KS,KY,LA,MD,MI,MN,MS,MO,MT,NE, NM,NC,OK,OR,PA,SC,SD,TN,TX,VA,WA,WI,WY 21 - AZ,CA,CO,DE,GA,IL,IN,IA,KY,MD,MI,MN,NM,NC,OH,PA,SC,TN,VA, WV,WI 4 - MA,NH,NJ,NY 16 - AL,DE,GA,IN,IA,MD,MI,NE,NM,NC,OH,PA,TN,TX,VA,WI 31 - AL,AK,AZ,CA,CO,CT,DC,FL,GA,ID,IL,IN,KS,MI,MN,MS,MT,NV,NH,NJ, NM,OH,OK,OR,PA,SC,TN,TX,UT,WA,WI 6 - AZ,ID,MT,OR,UT,WA 26 - AZ,CA,CO,CT,FL,GA,HI,IL,IN,KS,LA,MD,MA,MI,MO,NV, NJ,NY,NC,OH,OK,PA,SC,TN,TX,VA 27 - AL,AR,CA,CO,FL,GA,IL,IN,IA,KS,LA,MI,MN,MS,MO,NE,NJ, NM,NY,NC,ND,OH,OK,PA,SC,TN,TX 9 - DC,FL,GA,MD,MS,NC,SC,TN,VA 33 - AL,AZ,CA,CO,CT,DE,FL,GA,HI,IL,IN,KY,LA,MD,MA,MI,MN,MS,MO, NV,NJ,NY,NC,OH,OR,PA,RI,SC,TN,TX,VA,WA,WI 8 - AZ,IA,KS,MN,NE,NM,SD,UT 33 - AL,AZ,CA,CO,CT,DE,FL,GA,IL,IN,KS,KY,LA,ME,MD,MA,MI,MN,MO, NH,NJ,NY,NC,OH,OK,PA,SC,TN,TX,VT,VA,WA,WI 18 - AL,AZ,CA,CO,CT,DE,GA,IN,KS,MD,MN,NV,NM,PA,SC,TN,TX,VA 33 - AL,AZ,CA,CO,CT,DE,FL,GA,HI,IL,IN,LA,MD,MA,MI,MN,MO,NV,NH, NJ,NY,NC,OH,OK,OR,PA,RI,SC,TN,TX,VA,WA,WI 14 - AZ,CT,FL,ID,IL,IN,ME,NJ,OH,OR,RI,TN,TX,WA 11 - AZ,DE,DC,GA,MD,MI,NJ,NY,PA,SC,VA 6 - AK,CA,ID,OR,UT,WA 6 - AZ,CA,CT,NJ,OK,TX 4 - IL,IN,IA,WI 8 - MA,MI,NH,NJ,NY,OH,PA,VT 23 - CT,DE,GA,IL,IN,MD,MA,MI,MN,MO,NH,NJ,NY,NC,OH,PA,RI,SC,TN, TX,VA,WA,WI 33 - AL,AZ,AR,CO,CT,DE,DC,GA,IL,IN,KS,KY,LA,MD,MI,MN,MS,MO,NH, NM,NY,NC,OK,OR,PA,RI,SC,SD,TN,TX,UT,VT,WV 12 - DE,GA,IN,IA,MD,MI,NE,NC,OH,PA,TN,VA 20 - AL,AR,CA,FL,IL,IN,KS,MI,MS,MO,NE,NJ,NC,OH,OK,PA,SC,TN,TX,VA 4 - CT,MA,NH,RI 30 - AZ,AR,CA,CT,FL,GA,IL,IN,IA,KS,KY,MD,MA,MI,MN,MO,NE,NH, NJ,NY,NC,ND,OK,PA,SD,TN,TX,VT,VA,WI 4 - CT,MA,NY,RI 4 - IL,MI,MN,WI 2 - MT,WY
5 - ME,NH,PA,VT,VA 31 - AL,AZ,CA,CO,CT,FL,GA,IL,IN,IA,KS,KY,LA,MD,MA,MI,MN,MO,NV, NJ,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA,WI N/A WI 5 - IL,IN,IA,TN,WI Nationwide Corp Group IA 34 - AL,AZ,AR,CA,CO,FL,GA,ID,IL,IN,IA,KS,KY,MD,MI,MN,MS,MO,MT,NE, NC,ND,OH,OK,OR,PA,SC,SD,TN,TX,UT,WA,WI,WY Hallmark Financial Services Group TX 20 - AZ,AR,GA,HI,ID,IN,MT,NV,NM,OH,OK,OR,PA,SC,TN,TX,UT,VA,WA,WY Mercury General Group CA 5 - AZ,CA,NV,NY,VA American Financial Group MO 33 - AZ,CA,CO,CT,FL,GA,IL,IN,IA,KS,MD,MA,MI,MN,MS,MO,NE,NV, NJ,NY,NC,OH,OK,OR,PA,SC,TN,TX,UT,VT,VA,WA,WI N/A IL 31 - AL,AZ,CA,CO,CT,DC,FL,GA,IL,IN,KY,LA,MD,MA,MI,MN,MO,NV, NJ,NY,NC,OH,OR,PA,SC,TN,TX,UT,VA,WA,WI Berkshire Hathaway Group NE 7 - AK,CA,FL,KS,MO,NE,NY WT Holdings Group CA 18 - AZ,CA,FL,HI,IN,KS,MO,NE,NV,NM,NY,OH,PA,SC,TN,TX,VA,WA Munich Re Group FL 27 - AZ,AR,CA,CT,FL,GA,IN,KY,MD,MA,MI,MS,MO,NE,NJ, NM,NY,NC,OK,OR,PA,RI,SC,TN,TX,VA,WA
INSURANCEJOURNAL.COM
Company
12/31/2018 DPW OOOs omitted
101 102 103 104 105 106 107
Milbank Insurance Co. Middlesex Insurance Co. Utica First Insurance Co. United Ohio Insurance Co. Columbia Mutual Insurance Co. Goodville Mutual Casualty Co. Imperium Insurance Co.
$177,878 $176,642 $175,385 $169,965 $168,890 $168,346 $164,724
108 109 110 111
Grange Insurance Association DB Insurance Co., Ltd. (US Branch) Harford Mutual Insurance Co. Great Midwest Insurance Co.
$163,716 $156,628 $155,561 $153,554
112 113 114 115 116
Concord General Mutual Insurance Co. Brethren Mutual Insurance Co. Farmers Alliance Mutual Insurance Co. Executive Risk Indemnity Inc. Penn National Security Insurance Co.
$152,960 $137,939 $136,849 $134,791 $131,404
117 Toyota Motor Insurance Co. 118 Triton Insurance Co.
$129,520 $129,156
119 120 121 122 123 124 125 126 127 128 129
$128,261 $123,699 $121,459 $116,801 $115,790 $115,031 $111,874 $111,132 $105,159 $104,424 $103,924
Endurance Risk Solutions Assurance Co. IMT Insurance Co. Mutual Benefit Insurance Co. TransGuard Insurance Co. of America, Inc. Cambridge Mutual Fire Insurance Co. Peerless Insurance Co. Cumberland Mutual Fire Insurance Co. Mid-Continent Casualty Co. CSAA Affinity Insurance Co. Financial Pacific Insurance Co. Philadelphia Contributionship Insurance Co.
130 Western Reserve Mutual Casualty Co. 131 Physicians Insurance A Mutual Co.
$99,685 $94,443
132 Rockwood Casualty Insurance Co. 133 Gray Insurance Co. 134 Dentists Insurance Co.
$92,024 $91,882 $90,544
135 136 137 138 139 140 141 142 143 144
$87,446 $81,862 $79,730 $79,694 $77,885 $74,593 $74,081 $73,975 $69,647 $67,951
Lightning Rod Mutual Insurance Co. Bay State Insurance Co. Developers Surety and Indemnity Co. Motorists Commercial Mutual Insurance Co. Hartford Insurance Co. of Illinois Selective Insurance Co. of New York Contractors Bonding and Insurance Co. Lititz Mutual Insurance Co. American Mercury Insurance Co. Capitol Indemnity Corp.
145 Hallmark Insurance Co. 146 All America Insurance Co.
$52,808 $50,718
147 148 149 150 151
$42,951 $36,900 $30,074 $28,113 $27,002
General Security National Insurance Co. St. Paul Mercury Insurance Co. Columbia Insurance Co. Explorer Insurance Co. Trinity Universal Insurance Co.
Group Name
State Of Domicile
Number/States Greater than $1 Million DPW as of 12/31/2018
State Auto Mutual Group IA 17 - AZ,CO,GA,IL,IN,IA,KS,KY,MN,ND,OH,PA,SC,SD,TN,UT,WV Sentry Insurance Group WI 19 - AL,CA,CT,FL,GA,IL,IN,MA,MI,MN,MS,NJ,NY,NC,SC,TN,TX,WA,WI N/A NY 6 - CT,MA,NJ,NY,OH,PA Ohio Mutual Group OH 6 - CT,ME,NH,OH,RI,VT Columbia Insurance Group MO 12 - AR,GA,IL,IA,KS,MS,MO,NE,OK,SD,TN,TX Goodville & German Mutual Group PA 8 - DE,IL,IN,KS,OH,OK,PA,VA Houston International Insurance TX 23 - AL,AZ,AR,CA,CO,FL,GA,IL,KY,LA,MA,MS,MO,NV,NJ, Group NM,NY,NC,OK,PA,TX,VA,WV Grange Insurance Group WA 6 - CA,CO,ID,OR,WA,WY Dongbu Insurance Group HI 3 - CA,HI,NY Harford Group MD 8 - DE,DC,MD,NJ,NC,PA,TN,VA Houston International Insurance TX 29 - AL,AZ,AR,CA,CO,FL,GA,IL,IN,KY,LA,MA,MI,MO,MT,NV, Group NJ,NY,NC,OH,OK,PA,TN,TX,UT,VA,WV,WI,WY Auto Owners Group NH 3 - ME,NH,VT N/A MD 3 - MD,PA,VA Alliance Insurance Group KS 8 - CO,ID,KS,MT,NE,ND,OK,SD Chubb Ltd Group DE 16 - CA,DC,FL,GA,IL,MD,MA,MI,MN,NV,NJ,NY,OH,PA,TX,VA Pennsylvania National Insurance PA 9 - AL,DE,MD,NJ,NC,PA,SC,TN,VA Group N/A IA 19 - AZ,CA,CO,DE,FL,ID,IL,MD,MA,MN,NV,NJ,NY,OH,OR,PA,TN,VA,WA Fortress Group TX 26 - AL,AZ,CA,FL,GA,IL,IN,KY,LA,MD,MN,MS,MO, NJ,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA,WV,WI Sompo Group DE 6 - AL,CA,MN,NC,TN,VA IMT Mutual Holding Group IA 6 - IL,IA,MN,NE,SD,WI Mutual Benefit Group PA 2 - MD,PA IAT Reinsurance Co Group IL 18 - CA,CO,FL,GA,IL,MD,MN,MT,NJ,NY,NC,OK,PA,SC,TN,TX,VA,WA Andover Group MA 8 - CT,IL,ME,MA,NH,NJ,NY,RI Liberty Mutual Group NH 18 - CA,DE,GA,IL,IN,KY,ME,MD,MA,NH,NY,NC,OH,PA,RI,TN,VT,VA Cumberland Group NJ 4 - DE,MD,NJ,PA American Financial Group OH 14 - AR,FL,KS,MO,MT,NJ,NM,NC,ND,OK,SC,TX,UT,WY CSAA Insurance Group AZ 6 - AZ,CT,DE,MD,PA,VA United Fire & Casualty Group CA 2 - CA,NV Philadelphia Contributionship PA 4 - DE,MD,NJ,PA Group Western Reserve Group OH 2 - IN,OH Physicians Insurance, a Mutual WA 4 - AK,ID,OR,WA Group Argonaut Group PA 10 - AL,CO,IL,IN,KY,MD,PA,UT,VA,WV Gray Insurance Group LA 8 - AL,CA,FL,GA,LA,MS,OK,TX California Dental Association CA 6 - CA,HI,IL,OR,PA,WA Group Western Reserve Group OH 2 - IN,OH Andover Group MA 3 - MA,NJ,NY AmTrust NGH Group CA 12 - AZ,CA,CO,FL,HI,NV,NY,NC,OR,TX,VA,WA Motorists Mutual Group OH 13 - IL,IA,ME,MA,MI,MN,NE,NH,OH,RI,SC,TN,WI Hartford Fire & Casualty Group IL 3 - IL,NY,PA Selective Insurance Group NY 2 - MA,NY RLI Insurance Group IL 8 - AZ,CA,FL,MT,NV,OR,TX,WA Lititz Mutual Group PA 8 - DE,KS,MD,MO,NC,PA,SC,VA Mercury General Group OK 4 - CA,OK,TX,VA Alleghany Group WI 23 - AL,AZ,CA,CO,FL,GA,IL,MA,MI,MN,MT,NE,NV,NY,OH,OK,OR,PA,TN, TX,UT,WA,WI Hallmark Financial Services Group AZ 14 - AL,CA,FL,GA,IL,IN,LA,MI,MO,NC,OH,PA,TN,TX Central Mutual Insurance Co OH 12 - AZ,CT,GA,IN,MA,MI,NY,NC,OH,SC,TN,VA Group Scor Group NY 12 - AZ,CA,CO,FL,KY,MA,NJ,NY,OH,PA,TX,VA Travelers Group CT 9 - CO,KS,NM,ND,PA,TX,UT,WV,WY Berkshire Hathaway Group NE 6 - CA,CO,NE,SC,UT,WA ICW Group CA 3 - CA,NJ,PA Kemper Corp Group TX 5 - AR,ID,MT,TX,UT
Data Source: The National Association of Insurance Commissioners, Kansas City, Mo., by permission. Information derived from an SNL product. The NAIC and SNL do not endorse any analysis or conclusion based upon the use of its data.
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JULY 1, 2019 INSURANCE JOURNAL | 31
Spotlight: Flood Private Flood Market Grows, Again: Report By Andrea Wells
T
he private flood insurance grew again in 2018 but not nearly as much as it grew in 2017. According to the recently released Carrier Management report on “Top Private Flood Insurers, 2019 Market Study,” during 2018 private insurers reported direct private flood insurance premiums written of $681.4 million, an increase of $51.3 million over 2017. However, the growth is less than experienced from 2016 to 2017 where the private flood insurance market jumped $272.2 million from $357.9 million in premium (2016) to $630.1 million (2017). However, because Lloyd’s, which enters the U.S. market through its inclusion in the NAIC “Quarterly Listing of
Alien Insurers,” was not included as an element of the report, it could account for some or even most of the unexpected slowdown as the premium that might have migrated to Lloyd’s is unknown, according to Craig Poulton, CEO of Poulton Associates LLC, which administers the Natural Catastrophe Insurance Program. “Lloyd’s has been a major source of insurance capacity for the peril of flood for many years,” Poulton said. “I would estimate that including excess flood, commercial lines flood and personal lines flood premiums, the Lloyd’s market writes well over $200 million of US flood premium and grew that premium significantly in 2018.” The number of insurers writing private flood insurance also grew, adding 33 new companies reporting premium
124 89
2017 2016
46
Figure 2: Private Flood Insurance Direct Premiums Written $681,388,208
2018
FM Global Group
2016
$357,933,735
32 | INSURANCE JOURNAL | JULY 1, 2019
To access the free report, visit: https://www. insurancejournal.com/ research/research/2019-private-flood-insurance-report.
$299,748,831
Assurant Insurance Group
$83,042,125
Zurich Insurance Group
$77,128,401
American International Group
$59,759,482
Swiss Re Group
$49,687,501
Berkshire Hathaway Group
$19,836,530
Liberty Mutual Group
$19,329,459
Alleghany Group $630,085,447
2017
direct written premium for private flood insurance in the commercial market were: FM Global ($299,748,831); Zurich Re ($77,128,401); Berkshire Hathaway ($19,836,530); Alleghany Group ($17,571,105); and Allianz ($15,924,495). • The 2018 top five writers of direct written premium for private flood insurance in the residential market were: Assurant ($83,042,125); AIG ($59,759,482); Swiss Re ($49,687,501); Liberty Mutual Fire ($7,556,975); and ASI Progressive ($6,070,467).
Top 10 Insurance Groups Ranked by Total Private Flood Premiums Written 2018
Figure 1: Number of Carriers Reporting Private Flood Direct Premiums Written 2018
to the National Association of Insurance Commissioners Annual Statement, “Line 2.5 – Private Flood” for writers of the private market coverage. Figure 1 of the report illustrates the rapid increase from 49 reporting carriers in 2016 to 124 in 2018. New participation came predominately from the Liberty Mutual Group (12 companies), CNA Insurance Group (six companies), Nationwide Group (four companies) and Sompo American Insurance Company. Flood insurance policies are available through the National Flood Insurance Program (NFIP) and on the private market. As of March 2018, NFIP premiums written reached $3.55 billion. Other findings in the Carrier Management report: • The 2018 top five writers of
$17,571,105
Allianz Insurance Group Chubb Ltd Group
$15,924,495
Private Flood (Line 02.5) – Direct Written Premium, 2018
$8,135,337
Private Flood (Line 02.5) – Direct Written Premium, 2018
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Idea Exchange: Flood
5 Steps to Reform
America’s Flood Insurance Problem
T
he NFIP was originally created by Congress to transfer U.S. flood insurance risk to private insurers. However, in 1978, (when private By Craig Poulton insurance carriers assumed over 40% of the nation’s flood insurance risk), NFIP administrators used a loophole in the law to remove private flood insurers from the flood insurance marketplace thus essentially nationalizing the nation’s flood insurance industry. While it has helped many people recover from flood events, in almost every other instance, it has not helped to facilitate the private flood insurance market and has cost taxpayers about $40 billion so far. Congress should act to transform the NFIP from a government-subsidized monopoly into what Congress originally intended it
to be — a facilitator of privately underwritten flood insurance and an insurer of last resort.
Five Steps to a Self-Correcting NFIP
In a May 2019 letter to Congressional leadership, the four most recent administrators of FEMA, which houses the NFIP, expressed concern over the NFIP:
“…..the National Flood Insurance Program …..is in desperate need of reform. Change is needed to allow the NFIP to pay off its debt and serve its purposes.”
There are five simple reforms that will leverage the strength of competition to cure the negative outcomes delivered by the NFIP monopoly.
1. Assure Meaningful NFIP Rate Increases Beginning in 2013, the NFIP was directed by Congress to increase rates ranging
from 25% to 5% per year depending on categories defined by Congress until actuarially valid pricing was achieved. Rather than achieving overall increases, NFIP data indicate that rates per hundred of insured value remained essentially static for most structures at about $.27 during 2013, 2014 and 2015, but then sank to about $.266 in 2016 and down even further to $.255 in 2017 for an overall rate decrease of about 0.1%. Under its Congressional mandate, the NFIP could have increased the overall rate by a significantly larger percentage than it has and by now, might easily have achieved an average overall rate of $0.35 to $0.60. Had the NFIP taken such increases, it would have already generated many billions of dollars in additional premium and borrowed billions less from taxpayers. Greater competition will see that rate correlates more closely with risk while greater efficiencies drive down overall rates without taxpayer bailouts.
2. Reduce the Number of Repetitive Loss Properties In that same May 2019 letter to
continued on page 36
Thank you for naming Safeco Insurance and Liberty Mutual as the “carrier that does more than others to support your agency’s overall growth – a carrier that is a champion of the independent agent.” 2019 Channel Harvest Survey of Independents*
*Safeco Insurance received the highest score for personal lines and Liberty Mutual for commercial lines in Agent Voices 2019: The Channel Harvest Survey of Independents sponsored by Insurance Journal.
1.
#
champion of the
independent agent
Idea Exchange: Flood continued from page 34 Congressional leadership, the four most recent administrators of FEMA expressed concern over the NFIP’s funding of repetitive losses:
“By incentivizing Americans to live in vulnerable areas without taking steps to mitigate the risk, the NFIP gives property owners a false sense of security,” they wrote. “In the absence of reforms, costs in taxpayer dollars and lives lost will only get worse.” Congress should require the NFIP to publish the location of all repetitive loss properties so they may be properly rated
by the private flood insurance market. To incentivize mitigation of these properties, the NFIP should be required to initiate ascending deductibles for repetitive loss properties that increase with each claim. This may inconvenience repetitive loss property owners, but it is necessary to be fair to the rest of the Americans that are currently rebuilding these structures repeatedly.
3. Assure That ‘Risk Rating 2.0’ Increases NFIP Income Under the NFIP’s proposed new rating method referred to as Risk Rating 2.0, the NFIP aims to use methods pioneered by the private flood insurance market to
more accurately determine the flood risk of an individual property. Congress should assure that 2.0 actually captures enough premium to fund 100% of expected losses.
4. Create Accurate Flood Zones
In a recent report, CoreLogic found that 23% of U.S. homes are at high or moderate risk of flood, but are located outside official FEMA flood zones. In Florida, 54% of homes fall into this category. This study, along with others, indicates that the nation’s flood insurance premium pool can easily be doubled.
5. End Anti-Consumer, Anti-Taxpayer NFIP Rules
It appears that only Congress will be able to pressure the NFIP to step back from two practices that limit consumer choice in flood insurance and guarantee continuing taxpayer losses. First, Congress must disallow NFIP rules that prohibit NFIP policyholders from getting a premium refund when a policy is canceled prior to its expiration and coverage is replaced with a private flood policy. There is no practical reason to continue this abusive practice. Second, Congress must end NFIP’s “continuous coverage” rule, which requires policyholders to “remain loyal” to the NFIP or risk having their rates go up should they choose to return to the NFIP from the private market.
What to Do Next ? You can make a difference. Contact
Congress and tell your representatives that by taking these five simple steps, they can flip a switch that will automatically restore the original intent of Congress and turn a money-losing government-sponsored monopoly into a problem-solving insurer of last resort. They can reduce flood insurance costs for all Americans as competition drives efficiency and lowers prices. Poulton is CEO of Salt Lake City-based Poulton Associates LLC, which administers the country’s largest private flood insurance program, the Natural Catastrophe Insurance Program at CATcoverage. com. Follow him on Twitter @nciptweets. 36 | INSURANCE JOURNAL | JULY 1, 2019
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My New Markets Excess Workers’ Compensation Buffer Layer Program
Market Detail: Gray Specialty (www.gray-
specialty.com) provides buffer layers of excess workers’ compensation coverage to qualified self-insureds, self-insured groups, joint powers authorities and associations. Self-insured retentions as low as $100,000 and limits of up to $1 million are available. Coverage is offered on an admitted basis. The admitted coverage fits below the excess carrier’s attachment and allows the insured to lower their retention to levels not found in the excess workers’ compensation marketplace. Available limits: Minimum $100,000, maximum $1 million Carrier: Unable to disclose, admitted States: Ala., Ariz., Ark., Calif., Colo., D.C., Ga., Ill., Ind., Iowa, Ks., Ky., La., Mass., Mich., Minn., Miss., Mo., Neb., Nev., N.J., N.M., N.Y., N.C., Ohio, Okla., Pa., S.C., S.D., Tenn., Texas, Utah, W.Va., and Wisc. Contact: Robert Swayze at 504-754-6701 or e-mail: rswayze@grayspecialty.com
Yacht
Market Detail: American Reliable Insurance Co. (ARIC) (www.americanreliable.com) underwrites and services an array of specialty insurance programs marketed nationwide, with an emphasis on general agency distribution. ARIC specializes in personal lines and agricultural products. Available limits: As needed Carrier: Unable to disclose States: All states Contact: Steve Fekety at 800-535-1333 or e-mail: sfekety@americanreliable.com
Alternative Workers’ Comp
Market Detail: Selectpeo (www.selectpeo.
com) has exclusive workers’ comp programs and a market that include features such as pay-as-you-go, no audits and cash flow - large down payments, little to no collateral, no audit costs and claims management included. High risk business is no problem, including clients that are: A brand new business; have excessive claims or open claims; high risk workers’ comp codes; have a lapse in coverage; required to provide a large deposit; in the state 38 | INSURANCE JOURNAL | JULY 1, 2019
fund; have large cash collateral down for current policy; are being dropped, cancelled or non-renewed. Available limits: As needed Carrier: Unable to disclose, admitted States: All states Contact: Matthew Weiss at 631-238-2332 or e-mail: matt@selectpeo.com
TRO Surety Bond
Market Detail: Surety Bond Authority Inc.’s (suretybondauthority.com) Temporary Restraining Order Bond offering, otherwise known as a TRO bond, is a type of injunction bond that provides protection to a defendant against possible loss should the court rule that a temporary restraining order was illegal or unnecessary in the litigation. Some courts require a plaintiff to post a temporary restraining order surety bond in the course of litigation. This type of bond is required by certain courts when a plaintiff wants to prevent the plaintiff from performing a particular act that might affect the outcome of the case. It is also intended to protect the rights of the defendant against any loss arising from the TRO in case the judge later rules that the TRO should not have been granted. The bond protects the rights of the defendant should he or she win the case. Available limits: Minimum $5,000, maximum $5 million Carrier: Unable to disclose, admitted States: All states Contact: Greg Rynerson at 800-333-7800 or e-mail: info@suretyauthority.com
track record of profitable production. With this program, ARM is focused on increasing production of livery business with a focus on taxi, sedan (car service), and miscellaneous public auto accounts. It is currently not writing non-emergency medical transportation (NEMT) accounts. Currently operating in 13 states with a particular interest in expanding its business in Indiana, Oklahoma and Wisconsin. Available limits: Maximum $2 million Carrier: Unable to disclose, admitted States: D.C., Ind., Md., Minn., Mo., Ohio, Okla., Ore., S.C., Tenn., Texas, Va., and Wisc. Contact: Kamila Maciejewska at 202-8640650 or e-mail: kamila.maciejewska@ arminsure.com
CAT Property
Market Detail: WKFC Underwriting Managers (www.wkfc.com) offers windstorm or hail coverage, excluding flood & quake. Construction: all types; 1950 or newer; updates required on older buildings. TIV up to $500 million; minimum premium $5,000. Available limits: Maximum $25 million Carrier: Unable to disclose, admitted States: All states Contact: Marketing Dept. at 516-986-5332 or e-mail: marketing@wkfc.com
Taxi Program
Market Detail: American Risk Management Inc. (arminsure. com) is the exclusive agent for light public auto programs underwritten by an 80+ year-old admitted carrier that is writing business in 13 states across the country. ARM principally works with a limited number of high-quality specialist producers in each state and is very selective in the producers that it chooses to work with, focusing on those producers that can demonstrate an understanding of the unique aspects of the public auto business and have a
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Idea Exchange: Tech Talk
Customer Experience Starts With Marketing Communications By Tom Wetzel
I
n my last column, we discussed agents’ critical task of delivering the best possible customer experience to differentiate themselves from competitors. To do that, agents need to closely examine every task they perform for policyholders and prospects and find ways to do them faster. At the recent annual conference of the Insurance Marketing & Communications Association, I and other speakers agreed that marketing staff must take the lead in customer experience efforts, both at companies and in agencies. Agencies must elevate the marketing communications function and give those tasked with the responsibility enough time and budget to be effective. John Bell, vice president of Enterprise Digital Marketing for Travelers, introduced the concept of expanded relevance.
40 | INSURANCE JOURNAL | JULY 1, 2019
“Customers buy confidence but then we sell them a loss-recovery contract,” Bell said. “To stay relevant, we need to offer services that wrap-around and support the coverage itself. We also live in the age of the connected consumer. That means we must make it as easy and personalized as possible for customers to learn from us and interact with us.” Following up, Bell cited two startling statistics. Some 57% of customers stopped buying from a business because a competitor provided a better customer experience. Another 80% are more likely to do business if offered a personalized experience. Bell said the company provides content for their agents that goes beyond basic coverage issues, such as buying and selling a home, moving and renting, and the rise of the connected home and opioid abuse. The content takes many forms, including videos and written materials that offer practical advice and resources that add value. “Agents and insurers can’t be talking to customers just about coverage issues,” he added. “And it’s also critical that we use every available communication channel so customers can find this content wherever they are.” Mike Stahl, executive vice president and chief marketing
officer of HealthMarkets, one of the largest independent health insurance agencies in the United States, reiterated the need for agencies to reach out to consumers through many different communications channels, to pay closer attention to analytics and to use the advantages of scale as much possible. “In today’s market, there is strength in numbers, so being a part of a network or aggregator is an increasingly important tool.” he said. Stahl added that agents need to be scalable to maintain and grow market share. Agents must be careful with limited resources and can struggle when they don’t anticipate what they need for the future and what opportunities they can grab if they take too much of a here-andnow approach. It bears repeating that the speed with which an agent can resolve an issue with a policyholder or prospect is more important than efficiency, professionalism and knowledge. This means that delivering the best possible customer experience must start with fast response times and convenience. Agents cannot live in a vacuum and compare themselves only to peers. Insurance consumers certainly do. Insurance communicator Wetzel is president of Thomas H. Wetzel & Associate, a digital marketing firm for insurance agents. Phone: 708-771-1533. E-mail: twetzel@wetzelandassociates.com INSURANCEJOURNAL.COM
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Idea Exchange: Claims
Preparing for the Unpredictable
T
Talent Considerations for CAT Season
he combined global losses from natural disasters in 2017 and 2018 were the highest ever for a two-year period. While no single major catastrophe caused massive destruction in 2018, nearly 400 smaller natural disasters resulted in the fourth highest annual insurance By Brad Whatley payout on record, according to Aon. In 2017, we saw record-breaking weather-related events, such as severe hurricanes, making up 97% of overall economic losses. As we enter this year’s catastrophe season, insurers must be prepared for anything. Part of that preparation includes having a clear understanding of the talent necessary to support customers during this potentially chaotic time. According to the 2019 Q1 U.S. Insurance Labor Outlook Study, conducted by The Jacobson Group and Aon, property and casualty insurers state claims and technology roles are their greatest talent needs for 2019. In an already challenging recruiting climate, fueled by an aging workforce and virtually non-existent unemployment, 42 | INSURANCE JOURNAL | JULY 1, 2019
insurers must plan ahead to ensure their teams can meet customers’ needs, regardless of a disaster’s magnitude. Technology is a huge asset in helping today’s insurance organizations navigate CAT season. Technological advancements have enabled insurers to improve and streamline disaster claims and adjustment processes. New mobile technology, such as live aerial views and minute-by-minute updates from satellite images, provides the near immediate information customers desire. Meanwhile, chatbots are enabling insurance organizations to increase interactions and be more efficient in certain areas. However, it is important that these advancements in technology are supported by a human element.
claims professionals have more capacity for customer-facing tasks. Additionally, while chatbots are able to recognize negative sentiment, catastrophe claims are typically a personal and emotional event that warrants human interactions. Property and casualty insurers must seek out ways to leverage the capabilities of both humans and machines. As technological transformations impact the property and casualty industry, certain skills are becoming more important for delivering exceptional customer experiences to policyholders. New technologies have made it possible for claims professionals to communicate with individuals shortly after a loss. This can be an emotional time, especially during CAT season when tornados, hurricanes and other disasters can destroy homes and communities. Claims adjusters may be some of the first contact individuals have after facing these new realities, making it important they are empathetic and compassionate. To support policyholders, insurers may even consider offering training in grief counseling to the professionals on the front lines. Across all industries, consumers are expecting assistance and solutions in real-time. Insurers are focused on creating streamlined and efficient customer experiences. New mobile technology reduces the need to deploy a large number of adjusters following a catastrophe. Now, professionals can instantly review the necessary information to assist customers in their times of need. In addition to empathy, skills such as problem-solving, communication, leadership, agility and a customer service mindset are becoming even more important in this fast-paced environment. New tools and technologies have streamlined and accelerated the claims process during CAT season. Technological aptitude is perhaps more important than ever; however, if individuals possess a customer-first mindset and are empathetic to customer needs, other qualifications can be more easily learned.
New mobile technology reduces the need to deploy a large number of adjusters following a catastrophe.
New Skills for an Evolving Industry
Technology creates a number of process efficiencies within claims; however, as a result of an increase in technology, soft or “human” skills are becoming even more important. As a number of time-consuming functions are becoming automated,
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Ongoing Training and Development
An insurer’s response to a catastrophe is dependent on its workforce. As baby boomers retire and an industry-wide mid-level skills gap persists, insurers should take steps to train and develop staff. For many years, insurers were operating with lean teams and cutting back on training programs. However, now’s the time to reinstate these programs and train internal staff to step into roles that may be left vacant when tenured employees chose to move on or retire. Insurers should remain committed to supporting standard training and certification programs; however, it’s worth taking employee development a step further through cyclical training programs. While cross-departmental training has been less prominent in recent years, these programs help arm individuals with a comprehensive view of the organization. This not only enables them to better perform within their own roles, but it provides the ability for them to transfer into new positions if needed. When employees are equipped with a broad range of skills, they have more flexibility to support different functions, such as claims or customer service, when certain areas are short-staffed. Regardless of original jobs responsibilities, cross-trained employees can help reduce the talent crunch during CAT season.
insurance premiums, and claims professionals are responsible for delivering on those long-term promises. Having the right talent on hand enables insurers to support customers and provide the best service possible in their times of need. By focusing on empathy and other soft skills, leaning into technology and committing
“
to training programs, claims professionals will be well-equipped to best serve customers this CAT season. Whatley is senior vice president of The Jacobson Group, a global provider of talent to the insurance industry. Email: bwhatley@jacobsononline.com. Phone: 312-884-0465.
There is a lot of money from private equity and public brokers buying agencies of all sizes. Why can’t I do the same?” You have built significant value in your agency through years of hard work. InsurBanc can help you to unlock the value to grow your agency to the next level, independently. InsurBanc can provide funding for acquisitions, perpetuations and producer development.
Preparation for Unforeseen Talent Needs
Just as catastrophes are difficult to prepare for, so are talent needs during CAT season. Given the unpredictable nature of catastrophes, it’s advisable to have contingent talent plans developed and ready to execute. No matter how proactively organizations may recruit top talent, resources may be depleted during a major natural disaster, especially in light of the tight labor market. Immediate talent needs may arise; and in order to best service customers, insurers may want to develop relationships with staffing firms that can quickly connect them with full-time or temporary staff. Policyholders spend years paying
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Idea Exchange: The Competitive Advantage How
‘You Have a Duty to Read Your Policy’
Language Can Wreck a Life
I
have seen and heard seemingly an infinite number of agents, agents’ associations, and errors and omissions (E&O) attorneys By Chris Burand advise that agents should have a low standard of care and rely on the insured having the “duty to read your policy” caveat to protect the agency from an E&O claim. These statements, advice and exercises all have a high level of laziness involved. Before addressing the laziness though, I’ll address where this disclaimer has some value. Certain aspects of insurance coverage are simply not determinable by agents. Possibly the best example of an undeterminable coverage is the replacement cost of a building. Agents have a duty to explain how coverage works, co-insurance, ordinance or law versus regular replacement cost, and maybe even walk a client through a replacement cost estimator. However, agents are not builders and cannot be expected to determine replacement cost with any certainty. It is important for agents to let insureds know that the agency is not in a position to accurately determine the replacement cost. It is important to include a disclaimer to this effect. One can’t have it both ways by causing someone to think you know what you are doing by avoiding the disclaimer and then not be held accountable. Liability coverage limits are another example because these limits are ultimately always the insured’s personal or contractual decision. Agents certainly can make recommendations relative to excessively low limits, and they can advise higher limits may be available, but the insured has to determine the limit that is best for them. 44 | INSURANCE JOURNAL | JULY 1, 2019
On the other hand, telling an insured they have a duty to read, which implies a duty to understand, their policy and call to make changes is an excuse to be lazy and a peddler. This serves an important purpose for those agents that only want to sell insurance without caring about their clients’ welfare. Unfortunately, plenty of these agents exist. Whether it is an agency, an association or an E&O attorney telling me how agents need to rely on the insureds’ “duty to read” to protect themselves, let’s explore what this really means.
Duty to Read
If an insured needs to read and understand the policy themselves then they do not need a professional agent. The professional agent’s role is to explain and guide an insured to the coverages they need. If an agent does not fulfill that role, the end result is that no one needs an agent. One E&O certainty is this: an agent without clients is unlikely to incur an E&O claim. At least these agents will be safe from being sued. Next, advising insureds to read their policies is rich advice because a huge proportion of agents do not read the policies they are selling, much less understand them. I state this as a factual basis after completing 25 years of E&O audits, due diligence projects and teaching insurance classes. I cannot begin to tell you how many times producers and account executives have explained they do not understand how ordinance or law works, the major parts of a D&O policy or the different kinds of business interruption coverage. They
seem to think a business owners policy (BOP) covers it all and that all BOPs are the same. The reality is that producers and many agency owners like the “duty to read” camouflage because then they feel they don’t have to take the time to read the forms, understand the forms and actually have conversations with their clients.
Some have even declared that if they must take the time to talk to their clients, they won’t make enough money. The upshot is they like making money for nothing. So much of insurtech is aimed directly at taking these clients. Many industry veterans decry that insurtech can’t provide the individual service human agents can, and I agree, assuming these human agents do the work. But many agents don’t do any work. The gravy train is going to end either way, and I am glad because these lazy agents ruin lives.
Inadequate Protection
The goal of insurance is to
restore the insured’s financial situation, their balance sheet usually, to the exact amount less a deductible just prior to the loss. People need this protection when they suffer a large loss. When that protection is not provided, what happens? Here are some examples of what I have seen: 1. The insured declared bankruptcy. The insurance company paid the claim up to the correct amount, but the agent sold the insured far too little insurance advising they [the agent] could save them some money. The insured did not know the difference between replacement cost and actual cash value (ACV). They had a “duty to read” their policy. 2. The insured was fined because they could not comply with environmental clean-up rules because their policy did not provide adequate debris removal. Besides losing their business, they incurred large fines. A good agent would have asked about asbestos in the roof and recommended the appropriate, applicable coverages. The insured is financially ruined and still owes fines. 3. An insured is now choosing between buying their prescriptions and paying for their forced placed homeowners’ insurance because their agent completely misled them relative to their underwriting requirements and coverage. The result was no coverage and a nonrenewal. When the insured complained they did not understand why they did not have coverage for the claim, the agent literally said, “Did you read the requirement to read your policy?” 4. A retired couple lost their home for which they had too little insurance in a fire. While agents should not be responsible for calculating the coverage
amount, insuring to 100% of value, offering the replacement cost endorsement and offering extra ordinance or law all are easily within an agent’s ability. Determining the amount of coverage is difficult and not likely the agent’s job, but an agent is far better or should be far better positioned than the insured to recommend what kinds of insurance the insured should purchase. If the agent had done so in this case, the insured would have had adequate funds with which to rebuild rather than dipping into the retirement fund they hoped to keep for longterm care.
Too often, I see articles written about unfair E&O claims, but many E&O claims are completely legitimate.
E&O Claims
Too often, I see articles written about unfair E&O claims, but many E&O claims are completely legitimate. In these four examples, because of the state laws and/or the fact that the agent was a captive agent only and never an agent of the insured, the agents did not even suffer an E&O claim. These insureds, and in fact no one, needs an agent who does not know their coverages well enough to provide quality advice. Agents should be held accountable for not providing quality coverage advice. We do not need attorneys that do not know the law upon which they are advising, and we do not need ear doctors practicing medicine on our spines. At the very least, agents that hide behind the “read your policy” language should read the policies themselves and then advise, specific to that client, what coverages the agency recommends. Agents may not be able to recommend with precision the coverage amounts most applicable, but they can recommend with accuracy the kinds of coverage an insured should consider. After all, the agent is the one with the insurance license, not the insured. Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-4853868. E-mail: chris@burand-associates.com. JULY 1, 2019 INSURANCE JOURNAL | 45
Idea Exchange: Ask the Insurance Recruiter
Partner or Pariah?
5 Hacks to Improve Your Experience Working With Recruiters It’s All About Engagement 1. Time Has a Direct Effect on Success.
The recruiter never referred any candidates, but perhaps you waited too long to phone a friend. Call recruiters no later than 30-days from the start of a search. More time to do their thing — research, solicitation and candidate vetting — means more referrals for you.
4. Representation Matters. Recruiters are
Insurance recruiting agreements come in many forms — contingency, engaged, retained, contained and RPO. Did your recruiter educate you on the differences? Terms, conditions, guarantees and fees are negotiable. Find out your options. Then make the choice knowing you get what you pay for.
Glassdoor’s 2019 survey through The Harris Poll found 58% of job seekers listed “clear and regular communication” as most important to a positive search experience. Recruiters care about the same issues. Give feedback within 24-hours of referrals and interviews. Provide specific reasons for rejecting applicants. Otherwise they turn their attention elsewhere just like candidates.
2. Contracts Are Not ‘One Size Fits All’.
Q&A By Mary Newgard
Q:How am I supposed to use a
recruiter when my company had a horrible experience with a firm?
A:
A great question and an excellent starting point for my advice on working with third-party recruiters. I’ve been in the staffing industry for 13 years. I know the good and bad of this business. In any relationship there’s accountability on both sides. The key phrase here is ‘relationship’. Do you see a recruiter as: a) A valuable resource for your business and a strategic, knowledgeable partner b) A headhunter who’s a necessary evil with large fees and bad faith guarantees Your viewpoint has produced your history with recruiters. That future can change. Here are five ways to improve your experience working with recruiters.
Communication and Transparency
3. Create Complementary Boundaries.
Have a conversation that defines Right of Referral. Talk about where you and the recruiter will source candidates. There’s no reason to trip over each other or recreate the sourcing wheel. Understanding one another’s resources sets basic rules of engagement.
an extension of your company brand. Job advertisements, social posts and calls with candidates should be your words coming from their lips. Ask to review job advertisements. Hear their elevator speech. Be in control of your narrative.
5. Feedback Is Next to Godliness.
Food For Thought: Recruiters are your most valuable interpersonal hiring tool. According to Glassdoor’s 50 HR & Recruiting Stats for 2019, “Recruiting and HR success in 2019 and beyond will be about understanding candidate and employee needs and crafting experiences to meet them.” Don’t rely exclusively on commoditized recruiting tools — Indeed, ZipRecruiter, LinkedIn, Facebook and so forth. Who better to craft experience to meet candidates than a human being who understands your business and advocates for it? Let a recruiter become that for your business.
Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. For questions and comments, email: asktherecruiter@ csgrecruiting.com.
Idea Exchange: When Words Collide
Resolving Claim Disputes:
Step 1…The RTFP Doctrine
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f you have been following this 12-part series, welcome to the home stretch. In the first six articles, we’ve examined why By Bill Wilson claims are denied and how to avoid or prevent such denials, concluding with an introduction to a fourstep process that enables us to resolve claim denials that we were not avoided or prevented. Exploring that process in great detail is how we will spend the second half of this series. Last month, we addressed a “Step 0” that involves determining if an initial claim denial meets statutory and regulatory muster, especially unfair claim settlement practices laws. A claim denial that does not meet proper legal standards is, or should be, invalid as a matter of law. So, by reaching this stage of the claim denial process, we are assuming that the denial complies with at least minimum legal standards and all that remains to be determined is whether or not there is coverage.
That brings us fully into the four-step process of resolving a claim denial. Those steps are: (1) read the policy form(s)… again, (2) interpret the form language within the context of the claim, (3) research and document your interpretation, and (4) plead your “case.” As mentioned in the May column, most often the process ends with Step 2 or Step 3 because your conclusion is that the adjuster is correct. However, the premise from this point forward in the series is that there is a difference of opinion from that expressed in the claim denial. In this month’s column, we examine Step 1 and the importance, whatever your role in the insuring process
(underwriter, agent, adjuster, etc.), of reading and comprehending the policy form(s) in dispute.
Step 1 and the RTFP! Doctrine
In my book “When Words Collide: Resolving Insurance Coverage and Claims Disputes,” which is the basis for this series of articles, I present about a dozen policy interpretation doctrines. In this column, we’ll examine perhaps the most important one and next month we’ll examine many of the others. Three of the last four columns address an additional 17 – largely legal and contractual principles – that can serve as incredibly powerful interpretive tools to equitably resolve coverage opinion disagreements amicably. But we begin with the critical doctrine for resolving claim disputes, the “RTFP!” doctrine. So, what does the acronym “RTFP!” stand for? “RTFP!” means “Read The…Policy!” I’ll leave it up to your imagination as to what the missing letter in the translation might stand for, but a sanitized option is the word “Full.” I’ll say it once, it is IMPOSSIBLE to determine coverage without reading the policy form(s). However, reading the policy does not begin with the reporting of a claim. It is IMPOSSIBLE to sell or service insurance without reading the policy forms available to address the unique exposures of each prospect or insured. For insurance agents, reading insurance policies begins with the licensing process and continues throughout the agent’s career. How can you sell and service an evolving product line without knowing how the product works? A friend of mine used to sell medical devices such as artificial hips, knees, shoulder joints, etc. On occasion, he would observe surgeries by doctors new to his products in the event that answers to questions
Idea Exchange: When Words Collide continued from page 47 were needed. How effective would he be, and what might be the consequences of his answers and recommendations, if his knowledge of how these devices worked was limited to his having read a few brochures, attended a couple of webinars, and gathered a little “We’ve always heard that…” folklore from associates? Yet, that’s how too many agents sell and service insurance. While someone’s physical health is rarely at risk, their financial health could be ruined for decades to come because of bad or inadequate advice. To illustrate, I received a question from an agency commercial lines manager who held the Certified Insurance Counselor (CIC) designation by The National Alliance. The question was whether a liquor store needed liquor liability insurance. The agency staff “had always been told” that, unless there was liquor consumption on the premises, there was no need for liquor liability coverage, that commercial general liability (CGL) coverage would suffice. Having consulted in probably somewhere in the neighborhood of 100,000 coverage or claims disputes over the past 30 years, far too many times I’ve been asked coverage questions that begin with “Does ‘a’ homeowners policy cover…” or “Does ‘an’ auto policy cover…” or “I’ve always heard that…” One cannot generalize about types of policies or rely on folklore to prevent or resolve coverage and claim disputes.
Policy Peddlers vs. Problem Solvers
In addition, exceptional agents are problem solvers, not policy peddlers. They don’t simply provide the coverage that prospects and insureds, who are largely ignorant of exposure analysis and insurance, specifically ask for. They assist them in risk analysis and offer tailored solutions, not cookie-cutter, one-size-fits-all remedies. In order to assist individuals, families, and businesses in minimizing their exposure to serious financial loss, it is necessary not only to understand the primary policy forms that are indicated, but to also be aware of the coverage and risk 48 | INSURANCE JOURNAL | JULY 1, 2019
management options available. It is also necessary to be wary of the exclusionary or restrictive policy forms that carriers often include in policy deliverables that may create loss exposures that didn’t exist under the unendorsed policies.
One cannot generalize about types of policies or rely on folklore to prevent or resolve coverage and claim disputes. The only way to do this is to read and understand the product lines your agency sells and services. Does that mean you have to know every detail of every policy form down to the punctuation and tense of verbs? As we’ll learn later in this series, that “just-in-time” knowledge of that type can be extraordinarily helpful in reversing some claim denials but, no, it’s impossible to know everything about thousands of policy forms, especially in advance of their application to the specific circumstances
and details of a claim. As an aside, anyone who reads my website blog knows that I often write about insurtechs, and usually not in a flattering way. However, exposure analysis and coverage matching is an ideal product to build an insurtech firm around, one that works with industry players and not as a so-called “disrupter.” Technology, empowered by artificial intelligence, data science, and analytics, can be employed as an industry-altering risk management tool.
What Are You Looking For in RTFP?
Let’s start with eligibility vs. coverage. Just because a Corvette isn’t eligible for a particular insurer’s personal auto policy doesn’t mean that there is no coverage if such a vehicle is acquired mid-term, unless the insurance contract says so. Just because a vehicle like a dump truck isn’t eligible for declaration on a personal auto policy doesn’t mean that there is no liability coverage for an insured while driving one, unless specifically excluded. Policy foundational documents like the INSURANCEJOURNAL.COM
erroneous interpretation of a “wear and tear” or “mechanical breakdown” exclusion. What about misapplication of policy provisions like coinsurance, insurable interest, subrogation, and other conditions? For example, could the “Pair Or Set” clause found in most homeowners policies be used to address “matching” claim denials for undamaged roof shingles, vinyl siding, or other real property features? I can tell you that I used this clause to get 16 new custom shutters following tornado damage to my home, even though only six were damaged. Knowledge is power.
What’s Next?
application, binder, and declarations page may all be material to coverage, especially if there are conflicts with policy language. Beyond that, we seek answers to questions specific to the policy forms and endorsements. Is the insuring agreement triggered? Is the person seeking coverage an insured or otherwise a beneficiary? Do any exclusionary provisions apply? Are there any restrictions or limitations expressed in policy conditions? Of particular importance are terms defined in policy forms and potentially troublesome are the many undefined terms in policies. Usually of even greater importance are exclusions since those are what most often form the basis for coverage denials. Are cited exclusions clear and conspicuous in the policy? Courts say they must be. Are they potentially ambiguous? Ambiguity is the mother of all policyholder coverage lawsuits. Might an exclusion be considered unconscionable, or even illegal? Over the years, I’ve lost count of the number of times I’ve seen a claim denial based on an INSURANCEJOURNAL.COM
Next month, we’ll take a look at several other policy interpretation doctrines that lay a foundation for the following three months when we examine up to 17 powerful legal and contractual principles that govern claim resolution. In the meantime, I would encourage you to accept the challenge that my primary industry mentor, the late John Eubank, CPCU, ARM, used to pose to his insurance students. Invest just 15 minutes per work day in reading policy forms, reference manuals, and related educational and research
July 1, 2019 Lexington National Insurance Corporation P.O. BOX 6098 Lutherville, MD 21094 The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.
materials and a year from now you’ll have accumulated 60 hours of quality, self-directed learning, probably five times your annual CE requirement. RTFP! Wilson, CPCU, ARM, AIM is the founder and CEO of InsuranceCommentary.com and the author of the book “When Words Collide: Resolving Insurance Coverage and Claims Disputes.” Last month, he celebrated his 50th year in the insurance industry. He may be contacted at Bill@InsuranceCommentary.com.
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JULY 1, 2019 INSURANCE JOURNAL | 49
Closing Quote Insurance Agents Have Come to Embrace Insurtech. When Will Carriers?
T
By Jeff Kroeger
‘A future where all insurance purchases happen online simply hasn’t come, and likely never will. The profile of an online buyer is different from the profile of a risk manager at a medium-sized manufacturer.’
here used to be a time when independent insurance agents were wary of what disruption insurtech might bring. They feared a future where all insurance transactions were done digitally — eliminating the need for the familiar agent that had become synonymous with expertise and service in the industry. But for all of the worry and speculation about what insurtech companies were making possible, total disruption never came, and in fact, independent insurance agents and brokers are finding themselves wanting to see more change by leveraging technology themselves. A future where all insurance purchases happen online simply hasn’t come, and likely never will. The profile of an online buyer is different from the profile of a risk manager at a medium-sized manufacturer. All small business owners are different and that is a good thing because they can always find their outlet whether with a direct writer, online (with an e-agent or direct to carriers) or with an independent agent or broker. Insurtech has simply found its proper place in the distribution landscape albeit with a more efficient model for risk placement.
Agents have long searched for ways to do small business more effectively — specifically, gathering more quotes from more carriers and in less time. The hope is time not spent in the weeds gathering quotes can be spent selling more products and policies along with the personal touches that agents strive to provide. Ironically many insurtech firms that independent agents once feared are actually developing solutions to make this a reality. However, in order for this progress to happen, insurance carriers need to explore and eventually embrace the progress being made by insurtech firms, who are looking to improve, not disrupt or infringe, upon the traditional carrier business model. The real future of insurance is carriers partnering with insurtechs to enable better speed and choice within agencies. There seems to be progress. Most major national insurance companies have invested in innovation hubs while others have announced partnerships with smaller startups. Insurance carriers have been doing some excellent work tapping the incredible amount of historic data found in their books of business and combining that rich information with third-party data to improve the
speed and quality of the quoting process. In many cases, some have been able to refine that data so well that an address and basic business information is all it takes to generate a quote, streamlining underwriting process. This internal digital advancement is a welcome sign for insurtechs — if the carriers are able to generate quotes quicker and more effectively, these quotes can be integrated into insurtech solutions agents and brokers use. At the end of the day, it empowers something nearly everyone in the insurance sphere has been demanding for decades — choice. Insurtechs as disruptors is a fear that was never realized. Instead, insurtechs have proven to be willing partners and providers of valuable solutions for carriers. If the demand for faster, more accurate policy quotes from agents is to be realized, carriers must also be willing to partner, invest and integrate their data into insurtech platforms. If this happens, insurtechs will be seen in the industry for what they truly are — enablers of better business. Kroeger is executive vice president of strategy and business development at Insureon.
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