Insurance Journal West 2019-11-04 by Insurance Journal

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November 4, 2019 • Vol. 97 No. 21

Contents Idea Exchange

Special Report

News & Markets

Closer Look: Top 50 Commercial Lines Leaders

States Vary Widely in How They Control Workers’ Comp Medical Costs: WCRI

14 ‘Competition & Change’

Special Report: Agents’ E&O Risk Rises Along with Rates, Cats and Customer Switching

in Commercial Auto, Workers’ Comp

When Words Collide: Research and Document the Interpretation – Part 3 of 3

5 Ways to Cultivate Diversity & Inclusion

29 BRONZE Best Agency to

The Wedge: Agency Growth Success

How a Culture of Change Helps Modernization Efforts

Closing Quote: 5 Ways to Protect Small Businesses Against Seasonal Risks

Work For – East: Chalmers Insurance Group

BRONZE Best Agency to Work For – Midwest: DSP Insurance Services BRONZE Best Agency to Work For – South Central: The Nitsche Group

48 50

BRONZE Best Agency to Work For – Southeast: BKS Partners

BRONZE Best Agency to Work For – West: EPG Insurance

Spotlight: Managing Liability from Electronic Logging Devices

2019 Premium Finance Directory

Departments 6 Opening Note 4 | INSURANCE JOURNAL | NOVEMBER 4, 2019

12 Declarations

12 Figures

18 Business Moves

19 My New Markets

20 People

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YOUR INSURANCE CARRIER HAS TO REALLY KNOW YOUR CLIENT’S INDUSTRY TO ACTUALLY BE THERE FOR THEM. AND YOU.

That’s what it means to specialize. And you deserve a carrier that gets that. We make it a point to know all there is to know about a wide range of industries from construction and manufacturing to real estate, life science, technology, education and more.. With our deep specialization, The Hartford can help you develop customized product solutions for the complex risks of your mid- to large-size clients – allowing us to be there for both of you in a way that many carriers cannot. The Buck’s Got Your Back.® TheHartford.com/specialization The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT. 19-ML-152592 © October 2019 The Hartford

Opening Note Write the Editor: awells@insurancejournal.com

How #MeToo Changed the Workplace: Poll

he #MeToo movement has brought changes to America’s workplaces. According to a recent poll, roughly one-third of American workers say they’ve changed how they act at work in the past year as the recent spotlight on sexual misconduct and racial and ethnic diversity issues have hit mainstream. The survey, conducted by The Associated Press-NORC Center for Public Affairs Research in collaboration with the software company SAP, also found that about a third of all working adults say they have talked about sexual misconduct in the workplace with coworkers in the past year. The poll finds American workers view the #MeToo movement more favorably than unfavorably, 45% versus 27%. Half of women had a favorable opinion, compared with four-in-10 men; just over three-in-10 men view the movement unfavorably. Those who say they have been subjected to workplace sexual misconduct were more likely to view the movement favorably, compared with those who say they have not been victims of misconduct, 60% versus 42%. About half of working adults think things will change for the better for working women in general as a result of the recent high-profile sexual misconduct cases. And as a result of recent focus on issues of racial and ethnic diversity, about four-in-10 working adults think change for the better is likely for African Americans, while about a third say the same for workers of Hispanic origin. Despite those results, the poll found that few Americans expect positive change will come to their own workplace or for them personally. About four-in-10 working Americans say their employer has established new training on harassment in the workplace, instituted new policies about harassment or introduced new training on workplace diversity in the last two years. When it came to workers’ own workplaces, about four-in -10 working adults say white people and men experience more advantages compared with others, while about half don’t believe they are more or less advantaged, according to the poll. The poll also shows that people who supervise at least one employee are more likely than non-supervisors to say they have talked with coworkers about sexual misconduct in the workplace in the last year, 41% to 23%, and that they’ve changed how they interact with coworkers, 38% to 27%. The AP-NORC Center survey of full- and part-time employees was conducted by The Associated Press-NORC Center for Public Affairs Research with funding from SAP. It was conducted July 25-30 using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for all respondents is plus or minus 4.2 percentage points. Respondents were selected randomly using address-based sampling methods and later were interviewed online or by phone. Editor-in-Chief

About half of working adults think things will change for the better for working women in general as a result of the recent high-profile sexual misconduct cases.

Andrea Wells

6 | INSURANCE JOURNAL | NOVEMBER 4, 2019

Publisher Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

ADMINISTRATION / CIRCULATION

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

Randy Schwantz, Bill Wilson Contributors: Todd Bateson, Judy Busby, Jessica DeMars, Joyce Trimuel, Christina Villena

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

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Director Patrick Wraight | pwraight@ijacademy.com Online Training Coordinator

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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 States Vary Widely in How They Control Workers’ Comp Medical Costs: WCRI

By Jim Sams

orkers’ compensation medical costs vary widely among the states both in terms of price and how often services are used. The differences appear to relate closely to which cost-drivers each state legislature tried to control and which were overlooked, according to a report released by the Workers’ Compensation Research Institute late last month. The WCRI benchmark report provides detailed data on medical cost trends in 18 states that together represent 60% of the nation’s workers’ compensation benefit payments. Medical costs make up 60% of total spending on comp, according to the National Council of Compensation Insurance. 8 | INSURANCE JOURNAL | NOVEMBER 4, 2019

The new WCRI data shows that states that tackled specific problems, such as high hospital costs, achieved results, but also left other high-cost areas untouched. Some states were high cost in one area, but low cost in others. Each state has its own quirks. Illinois, for example, slashed the cap on all medical fees by 30% in 2011, but hasn’t passed substantive workers’ compensation legislation since. Gov. Bruce Rauner, who fought in vain to pass further reforms, was replaced after one term in 2018 by Democrat J.B. Pritzker. The WCRI benchmark report showed that Illinois’ medical costs, relative to the other study states, moved more toward the middle of the pack after the 30% fee cut, but still remain high. The average medical payment per claim

after 36 months for 2015 claims was 30% higher than the median of the 18 study states. For 2017 claims at 12 months of experience, Illinois was 15% higher than the median. The statistics given apply to claims with seven or more days of lost time. Shortterm “medical-only” claims were included in the study. The average cost of a medical claim is based both on the price paid for each visit and the number of visits per claim. Illinois is at the high end on both spectrums. While Illinois caps prices for evaluation and management services lower than other states, it has higher prices for everything else. Prices for physical therapy, emergency, radiology and surgery all cost more. Altogether, Illinois medical services cost 31% more than the median of the 18 study states. Illinois injured workers more medical service visits per claim than workers in most of the other study states. For professional service visits, Illinois ranked second-highest among the 18 states with 25 visits per claim. The report said the high number of physical medicine visits in Illinois especially stood out. It was the highest of the study states in 2017. The report notes that Illinois has no specific regulations addressing physical medicine, while other states use treatment guidelines or have set specific caps on the number of visits allowed per claim. Even without guidelines in Illinois, workers’ compensation insurers still deny care if they think claimants are going to the doctor too much, says Chicago claimant’s attorney Michael J. Helfand. He recently posted a blog on his law firm’s website advising injured workers that their treating physician, not the insurer, gets to decide how many visits are required. In a telephone interview, Helfand acknowledged that workers’ comp medical treatment isn’t always on the up and up.

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News & Markets continued from page 8 “There are some attorneys who have their offices next to physical therapy clinics, and they are getting bankrolled by those referrals,” he said. “Those aren’t credible doctors. If the insurance company denies that, that’s totally legit.” But more often, insurers deny legitimate medical care, he said. Helfand said physical therapy can often render surgery unnecessary, saving insurers money over the long run. He says he is treated regularly by a physical therapist for a shoulder he injured while playing soccer, saving his health insurer the cost of an operation. He said he doesn’t want the Illinois workers’ compensation to look anything like Indiana, where injured workers can’t find a lawyer to represent them. “We get calls two of three times a week asking if we can go to Indiana because they can’t find an attorney there,” Helfand said. “To me, that’s shameful.” Indiana, as it happens, has been a perennial low-cost leader in regular surveys of employer workers’ compensation costs conducted by the Oregon Department of Consumer Services. In 2018 it ranked No. 50 among all the other states and the District of Columbia, just above North Dakota, with employer costs of just 87 cents per payroll. By comparison, Illinois ranked No. 22 in employer costs in that survey. But those savings are not coming from the medical side. The WCRI benchmark report showed that Indiana’s medical payments per claim with three years experience were 35% higher than the median of the 18 states studied from 2015 and 2018. Indiana adopted a medical fee schedule that took effect in 2014, but capped fees at 200% of the Medicare rate. Most of the other states studied set their hospital fee schedules at 130% to 150% of Medicare. The fee schedule was enough, however, to move Indiana toward the middle of the pack in hospital payments per inpatient episode, whereas before the state had higher costs than any of the states studied. Indiana is one of a handful of states that does not have a fee schedule for professional services. And in that arena, the state continues to be a cost leader. 10 | INSURANCE JOURNAL | NOVEMBER 4, 2019

The WCRI reports the price of professional services in Indiana was the third-highest of 36 states for which it had data, behind Wisconsin and New Hampshire. All categories of services cost more than the median — some services more than as much. Indiana also was among the highest states for payments to ambulatory surgery centers, which aren’t regulated by the hospital fee schedule. On the other side of Illinois, Wisconsin is also a high-cost state for workers’ comp medical services. It had the highest medical payments per claim of any of the study states, 51% higher than the median for claims with 12 months of experience and 50% higher for three-year old claims. The prices for professional services in Wisconsin were the highest of 36 states for which the WCRI had data, 164% higher than the median state. Wisconsin hospital payments were 19% more expensive than the median. On the other hand, Wisconsin injured workers visit their doctor less frequently than the average: 17 visits compared to median of 23 in 2017/2018. Wisconsin had a lower percentage of claims that required hospitalization, even though those “inpatient episodes” cost 19% more than the median cost among the study states. Wisconsin lawmakers have been battling over legislation to impose a fee schedule in the state for years. No bill has passed, despite an endorsement by the state’s labor-management advisory council.

Other highlights in the report: California saw moderate growth in medical payments per claim in 2017, after a decrease following the implementation of Senate Bill 863. Since then the state has adopted two fraud-fighting measures and multiple medical fee schedule updates. Medical payments per claim in Florida have been typical of 18 states, a result masking the lowest prices paid for professional services and higher-than-typical payments per claim for ambulatory surgery centers and for hospital outpatient and inpatient services. These results were mainly related to fee regulations. Medical payments per claim in Minnesota remained stable from 2012 to 2017. Several trends offset one another to produce the stable results. For example, hospital inpatient payments per episode decreased following the 2016 inpatient fee schedule change, while ASC and hospital outpatient facility payments per claim increased. Medical payments per claim in North Carolina decreased 5% to 7% per year since 2014. These decreases likely reflect 2015 Medicare-based fee schedule changes for hospitals, ASCs, and professional services. The WCRI study covered 2012 through 2017, with claims through March 2018. States studied were Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. INSURANCEJOURNAL.COM

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Figures $50,000

The amount State Compensation Insurance Fund in California reportedly lost as a result of workers’ compensation fraud allegedly committed by Herbert Allen Kelly III, 65, of Rancho Murieta, Calif., owner of Kelly Roofing Co. He was arrested in late October on six felony counts of workers’ comp fraud after allegedly underreporting his business’ payroll and number of employees.

$633 MILLION The amount Florida Gov. Ron DeSantis said the state will seek in federal money to help prepare for future storms. The Florida Department of Economic Opportunity will coordinate the multi-agency effort to maximize what Florida can received from $18 billion in disaster mitigation money approved by Congress last year. The money is to be used to harden utility lines and structures in disaster-prone areas, among other projects.

Declarations Safer Now

“We know that we are safer now than we have been in the past eight days.” — New Orleans Mayor LaToya Cantrell, referring to the partial collapse on Oct. 12 of the Hard Rock Hotel that was under construction near the French Quarter. Three workers were killed in the collapse and more than 20 people were injured. Cantrell made the remark after two unstable cranes at the site were successfully demolished. Lawsuits have been filed against the project’s owners and contractors.

12 | INSURANCE JOURNAL | NOVEMBER 4, 2019

Unprecedented Hardship

“There’s an economic hardship that we’re facing here relative to this fall’s harvest that is likely unprecedented.” — North Dakota Gov. Doug Burgum declared a statewide flood emergency and said officials were looking at measures to help residents affected by heavy rains and a blizzard that dumped record amounts of snow in some places. Farmers have been especially hard hit. Burgum’s order cleared the way for the state to request federal funding.

Fraudulent Claims

“Fraudulent claims not only steal money meant to cover legitimate losses, they force genuine victims to wait longer for their claims to be processed.” — New Jersey Attorney General Gurbir S. Grewal said regarding the sentencing of a Bergen County, N.J., woman to four years in prison for filing phony insurance claims for losses she purportedly sustained during Superstorm Sandy and for filing a false bankruptcy application to shed $175,000 in debt.

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$1 MILLION The amount of a settlement the Waukee, Iowa, school district reached in the past on three lawsuits filed by former employees who alleged they were retaliated against for exposing wrongdoing by the district’s former chief operating officer. The recent settlement was with Amy Patters, who alleged she was forced to resign after reporting her boss, Eric Rose, for mismanaging money and violating district policies. Rose has pleaded guilty to misdemeanor charges. The district previously paid settlements of $175,000 and nearly $1 million to two others who also reported Rose’s actions.

Surplus Lines Increase

“We can tell you that processed premium is up 22 percent this year. We already have processed more premium this year than we did all of last year.” — Ben McKay, executive director of the Surplus Line Association of California, said surplus premium is on the rise again in California.

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$1.7 Million The approximate amount Patrick Wayne Bronnon of Groves, Texas, gained in an arson and insurance fraud scheme involving numerous properties in southeast Texas. Bronnon was found guilty of 40 charges, including conspiracy to commit mail fraud and use of a fire in commission of a felony. In total, nine fraudulent fire claims, three fraudulent water damage claims, and two fraudulent theft claims were filed with various insurance companies on nine different addresses.

Teen Vaping Epidemic

“Our investigation will focus on the marketing practices and online sales strategies of these companies to determine if they have intentionally targeted minors, tempting them to vape. We will also seek information to determine if these companies can support their marketing and health claims.” — Florida Attorney General Ashley Moody said regarding an investigation into more than 20 vaping companies. The probe will look into whether these companies are targeting minors and violating Florida’s consumer protection laws. Nearly one in four Florida high school students admits to using e-cigarettes. NOVEMBER 4, 2019 INSURANCE JOURNAL | 13

News & Markets 'Competition & Change' in Commercial Auto, Workers' Comp By Susanne Sclafane

rogressive has a competitive edge over long-term players in the commercial auto insurance market and national carriers outpace regionals on workers’ compensation profit measures, according to a new report from Guy Carpenter. “Competition and change are the only certainties” for property/casualty insurers and reinsurers, the introduction to the “Risk Benchmarks Research” report says, promising to provide insight into P/C market trends for strategic decision making in the ninth annual analysis. Specifically, the report provides individual analyses of underwriting profits and underwriting volatility for commercial lines like auto, workers’ comp, property and commercial multiple peril, and personal lines like homeowners and auto, with metrics for these lines calculated for different industry segments, including top 15 writers, national writers, regionals (Northeast/Atlantic, Southeast/Gulf, West, Midwest), multi-regionals, mutual, large public companies. Other slices include commercial-large, commercial-small, E&S, personal-large, property-Florida specialists, workers comp-Calif. Specialists, among others. “Our deep analysis of industry segment breakouts reveals pockets of volatility and profitability amid the evolving challenges and opportunities faced by carriers as they carve out distinctive strategies and operational initiatives to create opportunities,” said John Trace, CEO, North America, at Guy Carpenter, in a statement about the report. A graphic in the report showing an array of circles for some of the broader segments arranged by three-year net combined 14 | INSURANCE JOURNAL | NOVEMBER 4, 2019

ratios and 20-year volatility reveals that regional Midwest carriers were the most profitable overall, with three-year combined ratios under 100 (about 98) and 20-year volatility of roughly 6% (about 2% lower than the industry overall). Also showing less volatility than the industry but higher three-year combined ratios (of 100101) were large and small personal lines writers, regional Southeast-Gulf carriers and multi-regionals (companies with at least $500 million in 2018 direct written premiums writing in 25-39 states). At the other end of the spectrum: Non-U.S. public companies had both high combined ratios (104-105) and volatile results (roughly twice as high as the P/C industry overall). Large commercial insurers — those with more than $2 billion in overall DPW and at least 60% in commercial lines — had significant volatility also, at almost 1.5-times the industry) and combined ratios in the 102-103 range. While their results were not particularly volatile, the top three mutuals had the worst combined three-year combined ratios (104-105). “Large Commercials have had to manage across the volatility of primary and excess liability covers that have come under pressure from rising social inflation coupled with a surge in attritional large property losses,” the report explains. Drilling down by line, Guy Carpenter notes that beyond new mass tort challenges, social inflation trends and thinning reserve redundancies impacting the products liability line, commercial auto continued to steadily drain earnings

for top writers, with 40 of the top 100 commercial auto players experiencing combined ratios about 110 in 2018 — with 15 of them over 120.

‘Competition and change are the only certainties.’ Commercial auto is under new pressure as carriers such as Progressive push into the market with predictive models to attack the small commercial risks in ways similar to their personal lines approach. Even as the industrywide commercial auto ratio dropped to 105, after multiple years above 110%, “rate changes have been met with adverse selection as acrossthe-board increases drove the marginally better risks into self-insured configurations or to companies with better segmentation plans.” Calling out Progressive, in particular, the report says that “Progressive’s strong entry into the sole proprietor and small fleet segment of the market will sound an alarm for the unsophisticated insurers and put greater emphasis on creativity and analytics” and usage-based insurance. For the workers’ comp line, the Guy Carpenter analysis doesn’t single out any particular company but instead displays five years of results for national carriers, multi-regionals, regionals and the top 15 writers. Noting that workers’ comp “continued a slow drop in profitability across the industry,” Guy Carpenter also says that national carriers and the top 15 carriers “have started to separate themselves from regionals” with the larger players showing better results “as they leverage technology and scale in their pricing, claims and underwriting disciplines. Specifically, in 2018, 52% of regionals experienced underwriting losses in workers comp, while 82% of the top writers and 81% of nationals had 5% underwriting margins.

Republished from Carrier Management, the publication for the P/C insurance C-suite. INSURANCEJOURNAL.COM

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Closer Look: Top Commerical Lines Agencies Commercial Lines Leaders

About the Commercial Lines Leaders: The 2019 Commercial Lines Leaders in this special feature are taken from Insurance Journal’s Top 100 Property/Casualty Independent Agencies as reported in August. This list utilizes only the 2018 commercial lines property/casualty revenue numbers of the independent agencies and brokerages that submitted data to the Top 100 agencies report. For more information on Insurance Journal’s Top 100 Property/Casualty Independent Agencies list, contact awells@insurancejournal.com.

Top 50 Commercial Lines Agencies

Ranked by Total 2018 Commercial Lines P/C Revenue 2019 2018 No. of Rank Rank Company Name Main Office Employees

2018 Commerical Lines Revenue

2018 Total P/C Revenue

2018 Total P/C Premium

$1,133,775,000 $1,060,814,671 $937,871,474 $915,641,241 $793,785,405 $714,921,219 $429,248,000 $427,907,991 $250,793,341 $239,600,000 $160,300,257 $148,777,238 $124,323,323 $114,431,000 $104,000,000 $96,256,320 $87,000,000 $85,930,035 $83,667,528 $78,791,977 $77,758,535 $73,956,000 $71,487,000 $66,000,000 $61,182,146 $48,946,000 $47,288,099 $43,518,439 $43,096,000 $42,125,090 $39,444,380 $39,252,000 $39,127,528 $38,681,477 $37,257,394 $36,835,420 $35,582,323 $35,000,000 $34,727,432 $34,200,000 $33,915,414 $33,580,576 $33,000,000 $32,082,119 $31,524,240 $31,000,000 $30,839,677 $30,438,833 $29,612,152 $29,498,000

$550,672,000 $715,726,372 $380,393,603 $9,486,802 $308,185,745 $450,387,399 $92,711,000 $139,703,402 $75,867,850 $1,286,000,000 $25,572,442 $82,017,615 $36,796,012 $73,277,000 $32,300,000 $50,454,695 $33,000,000 $49,568,661 $24,255,393 $16,052,598 $40,600,913 $258,297,000 $5,431 $14,150,000 $28,528,162 $20,512,000 $7,627,343 $12,977,396 $48,470,000 $18,397,248 $30,420,026 $20,845,000 $20,092,689 $8,927,567 $15,850,890 $28,523,561 $21,549,337 $10,000,000 $5,882,110 $43,300,000 $4,869,391 $15,566,018 $0 $8,624,078 $9,931,616 $5,000,000 $8,251,428 $24,383,211 $969,223 $4,845,000

$9,982,363,982 $10,500,000,000 $6,482,618,778 $8,592,309,888 $9,118,216,487 $9,314,902,842 $3,600,000,000 $3,316,524,234 $2,797,527,500 $2,029,675,000 $1,766,729,937 $1,346,403,000 $1,509,805,616 $962,800,000 $1,023,900,000 $775,181,762 $803,349,697 $778,600,884 $752,408,307 $633,117,798 $732,006,257 $0 $552,376,000 $522,000,000 $591,051,138 $462,616,000 $311,794,845 $355,617,979 $437,652,000 $338,522,000 $344,066,340 $329,282,000 $418,000,000 $310,573,899 $311,477,446 $352,978,179 $318,948,539 $375,000,000 $353,991,549 $277,000,000 $339,574,615 $412,284,977 $370,000,000 $325,010,317 $239,495,848 $249,000,000 $224,321,070 $462,846,342 $203,880,165 $244,993,000

1 1 2 2 3 3 4 5 5 6 6 4 7 7 8 8 9 9 10 10 11 12 12 13 13 14 14 15 15 16 16 17 17 22 18 19 19 21 20 20 21 25 22 41 23 23 24 24 25 26 26 42 27 27 28 28 29 31 30 29 31 32 32 33 34 34 37 35 33 36 36 37 30 38 50 39 39 40 47 41 40 42 44 43 35 44 45 38 46 49 47 48 49 50 43

Lockton Companies HUB International Ltd. Alliant Insurance Services Inc. USI Insurance Services AssuredPartners Inc. Acrisure LLC BroadStreet Partners Inc. EPIC Risk Strategies NFP Insurance Office of America Inc. Leavitt Group IMA Financial Group Inc. Higginbotham Woodruff Sawyer Heffernan Insurance Brokers Cross Insurance Hylant PayneWest Insurance Inc. INSURICA Inc. Hilb Group Alera Group Assurance Propel Insurance Prime Risk Partners Inc. TrueNorth Graham Company Marshall & Sterling Enterprises Inc. Relation Insurance Inc. Houchens Insurance Group Inc. The Horton Group Inc. Scott Insurance (James A. Scott and Son Inc.) Eastern Insurance Group LLC** Bowen, Miclette & Britt Insurance Agency LLC LMC Insurance & Risk Management Inc. Lawley Insurance Parker, Smith & Feek Inc. Sunstar Insurance Group The Mahoney Group ABD Insurance and Financial Services Starkweather & Shepley Insurance Brokerage Inc. Towne Insurance** Professional Insurance Associates Shepherd Insurance Andreini & Company Charles L. Crane Agency Fisher Brown Bottrell Insurance Inc.** Baldwin Risk Partners Rich & Cartmill Inc. James G Parker Insurance Associates

Kansas City, Mo. Chicago, Ill. Newport Beach, Calif. Valhalla, N.Y. Lake Mary, Fla. Caledonia, Mich. Columbus, Ohio San Francisco, Calif. Boston, Mass. New York, N.Y. Longwood, Fla. Cedar City, Utah Denver, Colo. Fort Worth, Texas San Francisco, Calif. Walnut Creek, Calif. Bangor, Maine Toledo, Ohio Missoula, Mont. Oklahoma City, Okla. Richmond, Va. Deerfield, Ill. Chicago, Ill. Tacoma, Wash. Alpharetta, Ga. Cedar Rapids, Iowa Philadelphia, Pa. Poughkeepsie, N.Y. Walnut Creek, Calif. Bowling Green, Ky. Orland Park, Ill. Lynchburg, Va. Natick, Mass. Houston, Texas West Des Moines, Iowa Buffalo, N.Y. Bellevue, Wash. Memphis, Tenn. Mesa, Ariz. San Mateo, Calif. East Providence, R.I. Virginia Beach, Va. San Carlos, Calif. Carmel, Ind. San Mateo, Calif. Saint Louis, Mo. Jackson, Miss. Tampa, Fla. Tulsa, Okla. Fresno, Calif.

7,500 11,465 3,606 7,490 5,726 6,267 3,170 1,900 1,355 5,164 1,143 1,774 678 1,051 479 401 906 686 750 592 717 1,665 492 339 609 340 178 440 467 312 344 309 434 218 290 407 248 283 171 300 234 396 58 345 180 270 170 466 108 215

Editor’s Note: ** = Bank Owned Agency

16 | INSURANCE JOURNAL | NOVEMBER 4, 2019

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Business Moves and MGU division. Method offers workers’ compensation coverage for its distribution partners in western and midwestern states. Based in Nashville, Salus also has offices in Austin and Dallas. Salus serves as the exclusive workers’ compensation program administrator for Worth Casualty Co. and currently offers products in nine states.

South Central

Higginbotham, Diversified Insurance Management

East

GI Partners, Insurity Inc.

GI Partners, a middle-market alternative asset manager, has completed the acquisition of Insurity Inc., a software platform. Headquartered in Hartford, Conn., Insurity provides policy administration, claims, billing and data analytics software to more than 200 insurance clients. Insurity deploys its policy administration software and full-service solutions to property and casualty markets. GI Partners plans to accelerate Insurity’s growth and expand in policy administration and related software solutions. Travis Pearson, Sendil Rajendran, Sean Turner and John Wang from GI Partners will join Insurity’s board of directors.

Alera Group, Comprehensive Benefit Administrators

Alera Group, a national insurance firm, has acquired Comprehensive Benefit Administrators (CBA). CBA, located in Norwell, Mass., specializes in brokerage services, claims administration and enrollment, designing tailored benefit plans for its clients. Alera Group is an independent insurance agency based in Deerfield, Ill.

Specialty Program Group, The Mechanic Group

Specialty Program Group LLC, an operator of specialty insurance brokerages and underwriting facilities, has acquired the assets of The Mechanic Group Inc., a Pearl River, N.Y.-based specialty insurance 18 | INSURANCE JOURNAL | NOVEMBER 4, 2019

program manager. Established in 1989, TMG is an MGA that specializes in delivering risk management, insurance products and programs to the security guard, private investigation, intelligence, electronic security, alarm installation, central station monitoring and security consulting marketplace. Leadership of TMG will continue to operate under The Mechanic Group brand.

Hub International Ltd., Insurance Center of New England

Hub International Ltd., a global insurance brokerage, has acquired the assets of Insurance Center of New England Inc. With locations in Agawam and Gardner, Mass., ICNE is a locally owned, independent insurance agency that provides full-service insurance solutions for personal insurance, business insurance and group employee benefits. Hub International is headquartered in Chicago.

Midwest

Salus Workers’ Compensation, Method Insurance Services Salus Workers’ Compensation LLC, a managing general agent and third-party administrator, has acquired Method LLC d/b/a Method Insurance Services, a full-service wholesaler and managing general underwriter headquartered in Omaha, Neb. Method, which also has field offices in Arizona and Rhode Island, will form Nashville, Tenn.-based Salus’ wholesale

Fort Worth, Texas-based Higginbotham reported a merger with Diversified Insurance Management an independent property/casualty insurance agency in Plano, Texas. Diversified has a specialty practice serving recreational vehicle (RV) dealerships and RV consumers. Diversified President Ed Wilkins was named a managing director and will continue leading the 20-person office at 400 Chisholm Place.

Southeast

Arthur J. Gallagher, Direct To PolicyHolder

Arthur J. Gallagher & Co. has acquired Ponte Vedra Beach, Fla.based The Doyle Group, Inc. and its affiliates, collectively doing business as Direct To PolicyHolder. DTPH is an e-commerce affinity platform focused on the acquisition, conversion and retention of professional liability (E&O) insurance policyholders in the allied healthcare and wellness fields. Arthur J. Gallagher & Co. is headquartered in Rolling Meadows, Ill.

West

Hub, LBE Insurance Services

HUB International Ltd. has acquired the assets of Chatsworth, Calif.-based LBA Insurance Services Inc. Lior Avishay, president of LBA, and his colleagues will be joining Hub in Los Angeles. LBA is a full-service agency providing employee benefits, retirement and consulting services. INSURANCEJOURNAL.COM

Specialties Apartments Remodeling Contractors Garagekeepers Excess / Umbrella Contact Your Monarch Underwriter

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News & Markets California Agent Arrested for Allegedly Stealing $148K, Leaving Clie...

nsurance agent Stephen Mark Gomez, 64, of Lake View Terrace, Calif., was arraigned last month on eight felony counts of grand theft and embezzlement after allegedly collecting over $148,000 in insurance premium payments from a client

but failing to place insurance coverage on the client’s properties. The alleged crime was discovered after the victim’s property suffered a fire and he discovered it was uninsured. The California Department of Insurance

found that Gomez, acting as the victim’s insurance agent, collected $148,749 in premium for fire and general liability isurance for the victim’s properties between 2012 and 2018. Gomez collected the premium payments, issued invoices for fraudulent insurance policies, and issued bogus declaration pages as proof of insurance. The victim became aware of the fraud when one of his properties suffered a structure fire in 2018. The victim filed a claim with the insurance company only to find the policy did not exist. An investigation revealed the insurer never issued any policies for the victim nor was Gomez an appointed agent. The CDI has initiated action against Gomez’s insurance license. An early disposition hearing is set for Nov. 25.

County in Washington Files Lawsuit Against JUUL

Washington state county has filed a lawsuit against e-cigarette maker JUUL after a dozen confirmed cases of vaping-related lung illness in the state. King County’s claim accuses JUUL and its affiliates of fraud, racketeering and conspiracy while targeting children as new users of the products. JUUL says it never designed its marketing to appeal to youth denying all allegations. County officials say ninein-10 tobacco and nicotine violations in the Seattle School District were for vaping. The county is one of dozens filing suits against JUUL. Centers for Disease Control and Prevention reported as of late October there were about 1,300 confirmed cases and 26 deaths related to the illness nationwide. Copyright 2019 Associated Press. All rights reserved. RPS-5081-InsuranceJournal_halfpg_stage2_F.indd 1 ABRAM16784.indd 1

W2 | INSURANCE JOURNAL | NOVEMBER 4, 2019

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Monoline Personal Umbrellas

Market Detail: Risk Innovations (www.

riskinnovations.com) has admitted and nonadmitted options for monoline personal umbrellas, including excess liability and comprehensive personal liability. Policy limits available up to $10 million and UM/ UIM limits up to $2 million. Available limits: Maximum $10 million Carrier: Unable to disclose States: All states except Alaska and Hawaii Contact: Cheryl Crandall at 816-913-6696 or email: pl-nb@riskinnovations.com

Transportation

Market Detail: MJ Kelly’s (www.mjkelly. com) offers coverages including auto liability, physical damage, motor truck cargo, fleet and non-fleet, and truckers general liability. Target classes of business include: new venture truckers, garbage haulers, loggers, taxis, non-emergency medical transport, church vans, hazmat haulers, and wreckers. Available limits: As needed Carrier: Unable to disclose States: Ala., Ark., Ill., Kan., La., Miss., Mo., Neb., Okla., Tenn., and Texas Contact:

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Market Detail: Specialty Underwriters Group (SUG) (www.sugroup.net) will offer rate for nearly any risk and has many optional endorsements. Easy pay options available. Coverage for any occupancy including owner, rental, seasonal, tenant, vacant and vacant under renovation. Loss settlement options including ACV, full repair or replacement cost. Multiple dwellings can be scheduled on a policy. Available limits: As needed Carrier: Unable to disclose States: All states except Ill., Ind., Ky., Ohio, and W. Va. Contact: Rick Reynolds at 513-351-6400 or email: rreynolds@sugroup.net

Contractor General Liability Short Term

Market Detail: Thimble’s (www.thimble. com) broker program is available for agents to easily refer customers to its short-term general liability insurance (underwritten by Markel) and earn commission in perpetuity. Thimble’s on-demand episodic insurance was designed to provide a flexible and affordable alternative to expensive annual plans, with coverage by the hour, day or month, that can be extended to a full year. Available limits: Minimum $1 million, maximum $2 million Carrier: Unable to disclose, admitted States: All states except Ky., N.Y., and Wash. Contact: Andy Bodrog at 508-283-0151 or email: brokers@thimble.com

Sports / Athletic Event (Participant Coverage Included) Market Detail: Sport Underwriters (www. sportunderwriters. com) offers annual or short-term coverage for teams, leagues, tournaments, competitions, clubs, associations, schools,

clinics, lessons and camps or any youth or adult U.S.-based amateur sporting activity that requires participant coverage. Includes participant liability coverage for the named insured, its employees, volunteers and athletic participants. Protects against claims of bodily injury, property damage and litigation costs of defending against such claims. Includes accident and medical coverage for participants. Covered operations include scheduled, sanctioned, approved, organized and supervised instruction, as well as practices, try-outs, clinics, games, play-offs and tournaments and related non-athletic participant events, such as registrations, meetings, award banquets and ceremonies. Available Limits: As needed Carrier: Unable to disclose States: All states Contact: Scott Cantini at 833-636-3939, ext. 123. Email: scott@sportunderwriters. com

Non-Emergency Medical Transportation

Market Detail: Cluett Commercial Insurance Agency Inc. (www. cluettinsurance.com) offers coverage for non-emergency medical transportation, including: commercial auto liability, auto physical damage, general liability and professional liability, excess liability and workers’ compensation. Program highlights include: quick quote turn-around with complete submission; risk management program; and claims program. Available limits: As needed Carrier: Admitted and nonadmitted States: All states except Alaska and Hawaii Contact: Bruce Cluett at 800-926-6772 or email: cluett@insruancemarketinfo.com

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People National

Specialty insurer QBE North America has named Kris Hill as president of Alternative Markets. Hill joined QBE in January 2017 as chief financial officer. Before joining QBE, she served as executive vice president of Field Operations at Liberty Mutual, Surety, after having served for nearly four years as senior vice president and chief financial officer at Liberty Mutual, Surety, and three years as senior vice president and chief financial officer at Liberty Mutual Safeco Insurance. She previously held several positions in accounting, finance and operations at Safeco Corp., Northstar Communications and Aetna Life & Casualty. Hill will report to QBE North America CEO Russell Johnston. She will remain a member of the QBE North America executive committee. Christopher McGrath, senior vice president of Financial Planning and Analysis will serve as interim chief financial officer and also report to Johnston as an acting member of the North American executive committee. Prior to joining QBE, McGrath served as director of Finance for Multinational and Commercial Claims/Operations at AIG after having served as the global CFO for AIG’s specialty business worldwide. Before that, he served in various finance roles at Aon, Deloitte & Touche and Arthur Andersen.

East

OneBeacon Financial Institutions, a member of OneBeacon Insurance Group, has hired James Hamilton as vice president overseeing regional operations and contributing to the management

of the company’s public bank and insurance company portfolio. Hamilton reports to Kevin Koehler, president of OneBeacon Financial Institutions. Hamilton brings nearly 20 years of industry experience to OneBeacon. He most recently was responsible for complex underwriting and managing the Everest Canada financial lines portfolio at Everest Re. He will be based in OneBeacon’s New York City office.

Risk Strategies, a privately held, national insurance brokerage and risk management firm, has added Ward Humphreys as senior vice president to the reinsurance team of its National Health Care Practice. His hiring is part of an ongoing strategic effort by the firm to build out this specialty practice with health care professionals. Prior to joining Risk Strategies, Humphreys was a senior vice president at Willis Re, and he brings to Risk Strategies more than 30 years of insurance and reinsurance experience. Humphreys will be based in Risk Strategies’ Philadelphia office while serving clients nationwide. SageSure Insurance Managers, a Jersey City, N.J.-

headquartered subsidiary of Insight

Catastrophe Group (ICG),

has appointed

Alan Lange

as vice president of Homeowners Pricing Actuary and Tawana Scott as

20 | INSURANCE JOURNAL | NOVEMBER 4, 2019

Alan Lange

vice president of Commercial Insurance Product. Lange has more than 30 years of insurance experience. For the past 20 years, he has worked in personal property pricing and risk management at Homesite and Universal North America. As vice president of Homeowners Pricing Actuary, Lange will oversee the actuarial pricing team responsible for all of SageSure’s existing homeowners products. Scott has also worked in the insurance industry for more than 30 years, most recently as the vice president of Commercial Lines for DTRIC Insurance in Honolulu, Hawaii. As vice president of Commercial Insurance Product, Scott will build coverages, forms and underwriting rules to support SageSure’s commercial insurance launch.

Southeast

Jackson Sumner & Associates (JSA) has added Brantley Saunders

to the Marketing team as the South Brantley Saunders Carolina marketing representative. Saunders is a South Carolina native with 10 years of experience in the insurance industry in various capacities, including E&S underwriting. She also has a background in creative and technology fields. Saunders will serve and support retail agents throughout South Carolina and will report to JSA Director of Marketing Joi Neike. Saunders will be based out of Charleston, S.C.

American Integrity has Tawana Scott

appointed industry veteran

Dick Dowd as

executive vice president. Dowd will report to Bob Ritchie, Dick Dowd president and CEO, and be responsible for all sales and marketing staff and initiatives. In this role, he will also work closely with the CEO and chief operating officer on the company’s overall strategy and execution. Dowd most recently served as senior vice president of Aegis General. He also served in an executive capacity at Munich Re’s American Modern Insurance Group. Workers’ compensation specialist

The MEMIC Group has appointed Kim Wilson to the

Kim Wilson

role of senior production underwriter to support continued growth in the Georgia market. Wilson has more than 15 years of experience in the insurance industry working for carriers in Georgia and North Carolina. She began as a casualty claims adjuster before moving into personal lines underwriting and then to commercial lines underwriting. Wilson is based in Atlanta, Ga.

South Central

EPIC Insurance Brokers and Consultants has added Pam Stoutenburgh as a principal in

the firm’s property and casualty operations. She is based in Dallas. Stoutenburgh reports to KJ Wagner, EPIC managing principal and director of the Southwest region. She will be responsible for new business

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People continued from page 20 development and the design, placement and management of property and casualty insurance programs, providing risk management strategies for mid-market and larger clients, with a focus on private equity, mergers and acquisitions and the construction and real estate industries, among others. Stoutenburgh joins EPIC from The Freeman Co. in Dallas where she served as Risk Finance & Insurance director. Insurance services firm Holmes Murphy has added Jason Mahler in Houston. As the head of Consulting and Actuarial Services for Houston and Central Texas, Mahler will lead the consulting strategy in the area market. He is joining the new leadership team in Houston, along with Travis Brashear, the market leader, and Don Harrison, the head of business development, to grow the local markets and collaborate with ACAP Healthworks on growth opportunities. Mahler brings more than 15 years of experience consulting in all areas of group health and welfare benefit programs, including strategy and design, wellbeing, consumer-driven healthcare, plan financing, procurement and delivery system transformation. Prior to joining Holmes Murphy, he was senior vice president of Health Solutions at Aon.

Jeff Marchino has joined McKinney, Texas-based insurance services firm BevCap

Management as executive vice presi-

Jeff Marchino

dent. Marchino brings more than 25 years of professional experience in employee benefits. Marchino joins the BevCap team from Holmes Murphy & Associates in Dallas. Prior to his time with HMA, Marchino spent 22 years with Aetna in Dallas as sales director. He serves as the treasurer for the Dallas Chapter of Worldwide Employee Benefits.

Midwest

Managing general agency and surplus lines broker J.M. Wilson has promoted

Brianne Hughes

Brianne Hughes to transportation

technician in its Portage, Mich., office. As a transportation technician, she will process commercial transportation policies and endorsements, assist J.M. Wilson underwriters and serve independent insurance agents. Hughes held a temporary receptionist position this summer before being promoted to a full-time associate. Before JM Wilson, she spent nearly a decade in childcare, working as a site director and quality coach for a daycare program.

Venture Underwriters Inc., a division of Allstar Financial Group, is expanding in the Midwest with the opening of a new office in the Chicago market and tapped Dan Moran to manage the new location. Moran relocated from the company’s San Francisco office. He will focus on writing primary general liability within Venture’s appetite for E&S business, both primary and excess liability coverages nationwide.

22 | INSURANCE JOURNAL | NOVEMBER 4, 2019

Alera Group, a

national employee benefits, Sally Prather property and casualty, risk management and wealth management firm based in Deerfield, Ill., appointed Sally Prather as its national Employee Benefits Practice leader. Prather’s responsibilities will include the continued development of the organization’s employee benefits practice, including platform expansion and resource coordination. Prior to joining Alera Group, Prather served as vice president at Paychex Insurance Agency. She brings more than 25 years of experience to her role with Alera Group.

West

Walnut Creek, Calif.-based

Relation Insurance Services has named Paul Saich as

national sales leader. Saich’s primary focus will be to develop and implement growth sales strategies, tactics and action plans for the Relation sales team. He will be based out of Relation’s headquarters in Walnut Creek. He has held various positions at global firms. From 2007 to 2013, he was the CEO of Thoits Insurance Services Inc. Relation Insurance Services is an insurance brokerage that offers risk-management and benefits-consulting services.

Los Angeles, Calif.-based

The Liberty Company Insurance Brokers has named Roy Caswell as executive

Roy Caswell

vice president and director of information technology. Caswell started in the insurance industry in 1992 working at American National Insurance before running his own agency. He has held various IT leadership positions at several insurance firms, including Hull & Co., Marsh and IOA for the past 19 years. The firm has also named Megvarran Lalsa as chief financial officer. Megvarran has 20 years of experience in accounting and finance. Megvarran previously worked at Venbrook Group, SCAN Health Plan, Crescent Healthcare and Cardinal Health.

Starr Insurance Cos.

announced leadership promotions and a new structure for its Western sales region. Starr’s Western region sales operation has been split into two units, Pacific Northwest and Southwest, and two new leaders have been named to head these sales regions. Warren Puffer has been promoted to regional vice president of the Pacific Northwest region, consisting of the San Francisco and Seattle offices. Puffer joined Starr in 2014 and has more than 20 years of insurance experience. Kelly Geoghegan has been promoted to regional vice president of the Southwest region, consisting of the Los Angeles, Scottsdale and Denver offices. Geoghegan joined Starr in 2012 and has more than 17 years of experience in the insurance industry. Puffer and Geoghegan will be responsible for sales, distribution and field leadership as well as broker and client relationships. INSURANCEJOURNAL.COM

Special Report: Agency Errors & Omissions

AGENCY E&O

Risk Rises Along with Rates, Cats and Customer Switching Rates, Terms and Conditions: Agency E&O Survey Results

Sponsored by:

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gency errors and omissions (E&O) coverage is likely the most important insurance policy an agency purchases. As customer demands rise to an all-time high, having the right E&O coverage and ensuring best practices are followed to prevent E&O claims is more important than ever. Today agencies must be diligent about best practices at every level of the organization to protect against E&O claims, experts say. Errors and omissions best practices at the agency level have never been more important than

24 | INSURANCE JOURNAL | NOVEMBER 4, 2019

today, according to Rex Hickling, president of Premier Group Insurance, in Denver, Colo. “Consumer demands have never been greater for immediate gratification across so many product lines, and especially in insurance, with billions of dollars of advertising implying it’s all about price and the product is all the same,” says Hickling, whose agency is an Insurance Journal Top 100 independent agency. Yet when it comes to insurance, products are not always the same and coverage gaps may

INSURANCEJOURNAL.COM

Stayed the same

$25,001 to $50,000 More than $50,000

ediction on E&O Premium m ange at Next Renewal

umber of Agency E&O 4.8% rriers in Past Five Years Annual Cost of Agency E&O Coverage 36.7% 4.0%

58.6%

$1,001 to $2,500

16.4%

$2,501 to $5,000

20.8%

$5,001 to $10,000

14.8%

$10,001 to $15,000 ew E&O Risk Management eps in the$15,001 PasttoYear $25,000

8.8% 7.2% 30.9%

$25,001 to $50,000 Yes No

12.0% 69.1%

More than $50,000

16.0%

10%

15%

Comparison of Changes in E&O Premium INSURANCEJOURNAL.COM By Region Region

Decreased

10%

15%

45.2%

accounts because insurance rates are rising. 2.8% when it comes to an agency’s Agencies have a duty to E&O. ensure that customers are “Everyone likes to save getting the same insurance money at the point of sale product when switching tisfaction with Agency but when a loss occurs there carriers, says Angela Schroder, 15.8% O Terms,sometimes Conditions can be a ‘whom do I president of Houston-based 4.9% d Limits choke’ reaction and ‘why didn’t U.S. E&O Brokers, a national you tell me I could have had retail insurance brokerage Yes that coverage for only pennies 79.4% firm that focuses on errors No on the dollar above what I am and omissions insurance for Somewhat satisfied already paying,’” Hickling said. insurance agents and brokers. If the coverage is not there at “Sometimes they might the time of claim, agents are at move a customer to get a risk. better price, but they need to creased Agency E&O Limit mit 1.2% Customer loyalty isn’t be aware of changing policy 12.0% Last Renewal what it used to be and isn’t forms, especially changing getting any stronger. Last from admitted to non-admitted year more than $6 billion in markets,” she said. “They need Yes 86.8% No advertising was pumped into to be aware of the surplus lines Somewhat satisfied the marketplace to encourage laws in various states and they consumers to shop and switch need to be aware of what that their auto insurance providers, insured needs to sign and how according to J.D. Power. Over they’re going to be placing the O Claimsthe History past year alone, the rate of business.” 12.8% switching among auto insur Mark R. Angelucci, resident Respondents ance shoppers has increased senior vice president and 11.5% 44.9%segment leader for Utica Never had a claim to 35% from 31%, helping to E&O Had a claim indrive the past 5 years down overall insurance National Insurance Group, says 30.8% Had a claim 6 to 10 years ago customer retention by two agents seem to be accessing Had a claim more than 10 years ago percentage points to 88%. markets through wholesalers Also, today’ agents are being more frequently, which means asked more often to shop continued on page 26

$1,000 or less

16.0%

52.0% Increase Decrease occur when customers switch Remain the same carriers. That can be risky

One carrier Two carriers Three carriers

12.0%

Increased

Same

20%

25%

30%

Comparison of Changes in E&O Premium By Region Region

Decreased

Increased

Same

Midwest East South Central Southeast West

22.0% 21.0% 17.0% 15.0% 13.0%

54.0% 49.0% 60.0% 56.0% 40.0%

24.0% 30.0% 23.0% 29.0% 47.0%

Why Change in E&O Carriers Lower price Nonrenewed due to claims Nonrenewed due to change in underwriting criteria Carrier withdrew from agency E&O market Needed broader coverage Other reasons

24.1% 0.9% 0.9% 8.2% 7.3% 9.1%

Risk Management Steps Implemented in Past Three Years Attended an E&O class Agency staff has achieved additional designations More actively utilized an exposure analysis checklist Hired a third-party to perform an agency audit Enhanced agency focus on internal quality control Developed/updated agency procedural manual

76.9% 37.5% 36.1% 6.9% 57.4% 45.8%

Recent E&O Restrictions, Exclusions or Underwriting Changes Deductible Company insolvency Certain breaches of personal data Insured vs. insured Fraud, dishonest acts, illegal acts, false advertising, discrimination Services provided but not covered Pollution and/or mold Restrictions on excess/surplus lines Bodily injury/property damage Fines and penalties Fiduciary failure of money Libel, slander Patents & trade secrets Licensure Other

43.5% 14.7% 14.1% 10.2% 9.0% 6.8% 6.8% 5.1% 5.1% 5.1% 3.4% 2.8% 2.3% 1.1% 18.1%

NOVEMBER 4, 2019 INSURANCE JOURNAL | 25

20%

11.5%

Carrry E&O Coverage

Special Report: Agency Errors & Omissions Protect the assets of the agency Required by my carriers Other

No. 1 Reason Agencies Carrry E&O Coverage

0.8% 11.5%

Protect the assets of the agency Required by my carriers Other

Agency E&O Premium Change in 2019 Compared to 2018 Increased Decreased Stayed the same

86.5%

33.9% 49.4% 16.7%

Prediction on E&O Premium m Change at Next Renewal 52.0%

45.2%

Increase Decrease Remain the same

Satisfaction with Agency E&O Terms, Conditions and Limits

2.8%

15.8% 4.9%

Yes No Somewhat satisfied

79.4%

Increased Agency E&O Limit mit at Last Renewal Yes No Somewhat satisfied

1.2%

12.0%

86.8%

continued 25 Agencyfrom E&Opage Premium

86.5%

dealing with anybody in a flood

AnnualtheCost Cov proneof area Agency – and everybodyE&O is they need to communicate Change in 2019

capable terms and conditions. “Excess 33.9% of flooding – getting Compared topolicies 2018 49.4% $1,000 or lessdisclosures 4.0% and signatures and surplus lines often Increased where customers acknowledge contain unique restrictions Decreased 16.7%were offered or conditions,” he said. $1,001“The to $2,500that they 16.4% Stayed the same retail agent needs to be clear on flood and they chose not to them.” $2,501 to $5,000purchase, that’s a practice that we like to instill in our agents.” Reduction of coverage notices are critical. “Because $10,000 Prediction on$5,001 E&O to Premium m When it comes to com14.8% mercial lines, documenting sometimes they’re reducing Change at Nextsavings Renewal coverage declinations on loss limits for premium so $10,001 to $15,000 8.8% 52.0% of use for a business is also they may be choosing lesser 45.2% IncreaseSchroder said. critical. “Make sure you’re coverage,” Decrease $15,001 to $25,000offering those coverages 7.2% if Agencies can protect themRemain the same 2.8% selves and their clients by using they’re available to that class $25,001 to $50,000 12.0% as well as coverage checklists of business and get customers signed reduction of coverage to acknowledge that they were More to than $50,000offered additional coverages, forms. “That’s going help 16.0% Satisfaction Agency but they chose not to purthem the most inwith the long-run,” 0% 15.8% 5% said. 10% 15% 20 chase,” Bunch Schroder added.Conditions E&O Terms, 4.9% When a major catastrophe agrees with that and Angelucci Limits occurs, some customers might advice. “Obtain client sign-off Yes Comparison inwere E&O Premium 79.4% claim they never offered on allNo coverages offered that of Changes coverage. are not purchased and check By Region Somewhat satisfied “They might say, ‘I wanted carefully on information Region Decreased Increased the coverage, but the agent Same provided to carriers on subMidwest 22.0% 54.0% missions – signed applications didn’t sell it to me.’ The agent 24.0% East 21.0% 49.0% 30.0% Increased Agency mitneeds to an important controlE&O for Limit are have that documen1.2% South Central 17.0% 60.0% 23.0% 12.0% their agency,” tation to protect this he told at loss Lastexposure,” Renewal Southeast 15.0% 56.0% 29.0% Bunch warns. Insurance Journal. West 13.0% 40.0% 47.0% Sign-offs are especially Angelucci isn’t aware of Yes important in catastrophe-prone any particularly new agency 86.8% No E&O claims trends despite two areas,Somewhat according Gordy Why Change in E&O Carriers satisfied years with significant natural Bunch, president and CEO catastrophe losses, but a traof TWFG Insurance based in Lower price 24.1% ditional trend has continued: The Woodlands, Texas, near Nonrenewed due to claims 0.9% holding their agents carriers Houston. Nonrenewed in underwriting criteria 0.9% E&O Claims Historydue to change accountable for accurately operators in from agency “For agency Carrier withdrew E&O market 8.2% 12.8% of Respondents Needed broader coverage 7.3% representing risks to them. cat prone areas, documenting 11.5% 44.9%several claims 9.1% reasons “We have seen conversations, documenting Never hadOther a claim Had a claim in the past 5 years where the carrier will pay the disclosures on things that may 30.8% Had a claim to 10covered” years ago policyholder’s claim, then be excluded or6not Had a claim more than 10 years ago sue the agent for incorrect is crucial, heRisk said. “If you’re Management Steps Implemented

in Past Three Years

E&O Claims History of Respondents Never had a claim Had a claim in the past 5 years Had a claim 6 to 10 years ago Had a claim more than 10 years ago

11.5%

44.9%

30.8%

26 | INSURANCE JOURNAL | NOVEMBER 4, 2019

Number of Agency E&O Carriers in Past Five Years

an E&O class Number Attended of Agency E&O 4.8% designations Agency staff has achieved additional Carriers in Past Five utilized Years an exposure analysis checklist More actively

12.8%

4.8%

Hired a third-party to perform an agency audit 36.7% 58.6%control Enhanced agency focus on internal quality One carrier Two carriers Developed/updated agency procedural manual Three carriers

76.9% 37.5% 36.1% 6.9% 57.4% 45.8%

Recent E&O Restrictions, Exclusions or Changes INSURANCEJOURNAL.COM New E&OUnderwriting Risk Management Deductible

43.5%

information about the risk,” he said. Cyber is one area where accurate representation of coverage is critical. “Agents should be diligent about offering cyber coverage and obtaining written declination of coverage if the insured does not elect to purchase it,” Angelucci advised. “It is important for agents to be clear if the cyber coverage provides online fraud coverage or check any crime-bond coverages to verify if coverage is provided under those forms.” An agency should not expect a carrier to come to the rescue. According to Bunch, carrier relationships with agencies are unique and while one carrier may be more willing than another to help the agency in an error situation, overall an agency can’t count on that happening. “For the most part it’s the agent’s responsibility and that’s what the E&O coverage is there for,” he said. “Carriers are not going to be absorbing losses that they otherwise wouldn’t incur just because they have a relationship with an agency. I’m not going to say they never do that, but it’s not a common practice that they want to do and repeat. “It’s part of their duty as insurance carriers to make sure that they’re going after subrogation if there is subrogation to be had,” Bunch said. “That’s why it’s critical for agents and producers to document, document, document.”

What to Buy and Why?

Just as the agency getting customers the proper coverage is important, so is the agency buying the right E&O coverage. “In selling a regulated product line, such as insurance,

the party that is licensed is held to a higher degree of accountability,” Hickling said. “Agency owners know all too well that the E&O market is hardening, deductibles are rising, and sometimes there are baseless cases where defense must still be provided that can affect one’s eligibility and pricing.” Proactive best practices not only help to prevent E&O claims but can simultaneously provide a better and more consultative customer experience, Hickling added. The result is coverage and protection that better meets the needs of the client. Insurance Journal’s Academy of Insurance Director Patrick Wraight says finding the right E&O coverage at the right price is personal. “My best advice of what to look for when buying E&O coverage is to find the best possible coverage for a price that you’re comfortable paying from a carrier that you can trust,” Wraight said. “Trusting carriers includes their financial stability, how long they have written E&O, and what their claims process is like.” These are the problems that all consumers of insurance, including agents, seek to solve when buying insurance. “Obviously, an agency should review their terms, conditions, limits, and deductibles before renewal to make sure that they are getting the coverage that they need at a reasonable price,” he added. Jim Stoddard, senior vice president at Top 100 independent agency Haylor, Freyer & Coon based in Syracuse, N.Y., is responsible for purchasing all insurance programs for this firm. He recommends to other agency owners that they do for

E&O Limits Purchased $2 million or less per claim $3 million per claim $4 million per claim $5 million per claim $6 million to $10 million per claim $11 million-plus per claim

47.6% 9.2% 5.2% 15.6% 10.4% 12.0%

Most Important Issues When Selecting E&O 1. Claims handling experience 2. Price 3. Longevity of the E&O carrier in providing this coverage 4. Extended reporting period (tail) options 5. Direct access to underwriting and claims personnel 6. Availability of risk management information/advice 7. Flexibility with deductible options 8. Ease of use/technology 9. Payment plan options 10. Willingness to accept newer agencies

Agencies with Risk Management Plan to Mitigate E&O During Natural Disasters Yes, we have a specific risk manage plan for natural disasters We have some steps in place for natural disasters We are planning to write a plan for natural disasters No, we do not have an E&O disaster risk management plan

21.3% 25.7% 3.0% 49.6%

themselves exactly what they conversation with whoever E&O from Agentit is that you’re working with doPurchased for their clients. Trade “We take and consider the to minimize the risk as much Association same advice that we give to as you can.” Stoddard says: 51.2%at the 48.8% our clients; discuss limits of “Because end of the day, Yes coverage to purchase,” he said. when things go bad, and they No “We often will ask the question do sometimes go bad, knowing or answer the question, how that you’ve got the proper much should I buy by saying, amounts of E&O coverage to ‘You should buy as much as handle whatever that disaster Agency Requires you can afford that allows you is” makes all the difference. 19.5% E&O is an agent’s Continuing Education to sleep well at night.’” Agency If thinking of changing an disaster plan, he says. E&O carrier, think about what Agencies should also review 80.5% Yes conditions dictate first, market their E&O policies when they No he says. “Then you’ve got to are considering acquiring be all in and you need to do other agencies, considering a your homework and review merger, or want to open other all Agency those terms, conditions, That Specialize office locations, Wraight said. continued on page 28 coverages, and have a thorough

in Particular Markets

52.9%INSURANCE 47.1% JOURNAL | 27 NOVEMBER 4, 2019

INSURANCEJOURNAL.COM Yes

$5 million per claim $6 million to $10 million per claim $11 million-plus per claim

15.6% 10.4% 12.0%

Special Report: Agency Errors & Omissions Most Important Issues When Selecting E&O continued page 27 1. Claimsfrom handling experience clients of the risks. “It is my job

Agency E&O Survey: Premiums Trend Up But Market Remains Stable

“It2. would to shop their E&O coverage, Priceseem to be good risk management if they review the right?” she said. “But there’s no 3. Longevity of the E&O carrier in providing this coverage E&O policies of any agencies time that I want to ever change 4. Extended reporting period (tail) options that they might acquire or people’s carriers,” she said. “We 5. Direct to underwriting andlike claims personnel ccording to Insurance Journal’s 2019 Agency E&O merge with,”access he added. don’t to change coverage 6. Availability of risk management information/advice survey, nearly half of all respondents (49.4%) saw an Agents should make sure from one carrier to another increase in their E&O renewal premium from 2018 to that limitswith are appropriate 7. their Flexibility deductible options unless like the coverage is 2019, and 45.2% expect another increase at their next renewal. and deductibles enhanced in some way – higher 8.that Easetheir of use/technology In the South Central region, 60% of survey respondents make sense, Wraight said. limits or broader coverage – or 9. Payment plan options reported higher agency E&O premiums while only 40% said “My best advice is to be a there’s something you can’t get 10. Willingness to accept newer agencies their agency’s E&O premiums rose in the West. coverage expert,” Wraight said. with your current carrier,” she For nearly one-third of respondents (31.0%), the increase in “Know the policies that you said. Maybe that carrier won’t premium was due to agency growth/expansion/acquisition. work with. Be able to explain cover a certain line of business, However, 27.1% said their agency E&O premium increased potential coverage gaps and be for example. due to carrier’s rates increasing. Only 5.4% said the increase able to make recommendations Schroder always recommends to her clients that it’s was due to the agency’s own claims experience and just 8.9% about filling coverage gaps.” best to stay as consistent as noted the increase in premium was due to changes in their Overall, U.S. E&O Brokers’ Yes, we have a specific risk manage plan for natural disasters 21.3% possible. “With your limit, your policy such as higher limits of coverage. Schroder describes today’s We have some steps in as place fordeductible natural disasters 25.7% and your carrier,” Mark R. Angelucci, resident senior vice president and E&O agency E&O marketplace We are planning to write a plan for disasters shenatural said. “Your carrier is there 3.0% segment leader for Utica National Insurance Group, says the “very fair.” No, we do not have an E&O disaster risk management plan 49.6% for the long haul, and you agency E&O market is competitive for loss-free, well-run agen When asked to shop agency cies. “There have been a couple carrier withdrawals and some should be with them.” E&O coverage, she reminds newer entrants are doing some re-underwriting – pricing,” he added. But availability is still good. “Terms and conditions are stable for the longer-term carriers.” One survey respondent agreed, noting that: “Pricing remains flat with increases only due to an increase in agency exposure. New carriers popping up, but we are leery of mov51.2% 48.8% ing to them not knowing what kind of experience they have.” One area experience change is agency E&O deductibles. Yes Some 44.5% of survey respondents reported recent changes No to policy deductibles. Company insolvency exclusions (14.7%) and certain breaches of personal data (14.1%) were other areas survey respondents noted as recent areas of change in coverage. However, the vast majority of respondents (79.4%) were satisfied with available E&O terms, conditions and limits 19.5% on their agency E&O policies. Most important, check the backend of the agency E&O policy, advises Angela Schroder, president of Houston-based U.S. E&O Brokers. 80.5% Yes “A lot of times people are looking at the front of the No policy and they’re not looking at the back for those hidden exclusions,” she said. “We actually have some carriers that are limiting punitive damages up to a sublimit. You have to pay attention.”

Agencies with Risk Management Plan to Mitigate E&O During Natural Disasters

Purchased E&O from Agent Trade Association

Agency Requires Continuing Education

Agency That Specialize in Particular Markets

52.9% Yes No

28 | INSURANCE JOURNAL | NOVEMBER 4, 2019

47.1%

Insurance Journal’s Agency E&O Survey collected more than 300 responses from agency owners nationwide via an online survey in September 2019. Demotech Inc., Insurance Journal’s official research partner, assisted with analysis of this year’s survey results. For more information, contact Andrea Wells at: awells@ insurancejournal.com.

INSURANCEJOURNAL.COM

NATIONAL | Special Report | Best Agency to Work For

East

Chalmers insurance Group Bridgton, Maine

Insurance is All About the Community By Elizabeth Blosfield

teven Cote initially entered the insurance business because of a neighbor, and now as president of Chalmers Insurance Group, he aims to ensure the agency always gives back to its neighboring communities. “Understanding the hard work, collaboration and innovative spirit required to reinforce our value to our clients, carrier partners and communities in which we live and serve,” is an ongoing goal for the agency, Cote says. A 1989 graduate of Bowdoin College, Cote’s goal was to teach and coach at the private high school level when a neighbor who owned a local insurance agency offered him his first job. He says finding the insurance industry instead is something he doesn’t regret. “I accepted his offer to jump head-first into the insurance business and have never looked back,” he told Insurance Journal.

Cote first joined Chalmers Insurance Group, a fourth-generation, family-owned agency headquartered in western Maine, in 2000 as an account manager. He assumed his current role as president in 2014, finding not only a career at the agency that has spanned nearly 20 years so far, but also a family legacy dating back to 1857. Indeed, Chalmers has been in business for 160 years. Dottie Chalmers-Cutter, vice president of operations, and James Chalmers, vice president of sales, currently serve on the leadership team alongside Cote. They are both part of the fourth generation of family to own the agency, which was recently nominated by its employees and won Insurance Journal’s Best Agency to Work For Bronze award in the East region. Employees nominated the agency by answering questions to an anonymous survey. “My co-workers and my management team are

outstanding partners,” one employee wrote. Cote believes the agency differentiates itself by prioritizing communication and collaboration. “More than ever before, our co-workers feel prepared, well-rounded and empowered to serve others in impactful ways,” he says. In fact, one employee explained in the survey that a core value of the agency is community involvement, which it demonstrates through volunteering, attending industry association events and participating on boards. “Our philanthropic committee created a program called Chalmers Cares through which we donate to local non-profits, especially those that deal with children,” the employee wrote. “When we receive a referral, we donate as a thank you.” Another employee added that the agency’s mission is to insure its neighbors with friendly service, as well as build up the communities it

The Chalmers Insurance Group team celebrates earning the MMG Insurance Partnership Award for 2018 INSURANCEJOURNAL.COM

serves. “We can all get behind that sense of purpose,” one employee wrote. “We give back with our knowledge, talent and time to make our community a great place to work and live.” In fact, Cote says one of the best parts of his job is partnering with clients to help them overcome challenges, make informed decisions and achieve important risk management goals. The agency’s commitment to serving its communities also has another benefit: it helped Cote realize his dream of coaching after all. “Our organization’s commitment to serving our communities has afforded me the time and privilege to coach youth basketball for over 28 years!” he says. Cote says his vision for the agency is to continue actively engaging with its clients and carrier partners to ensure that the Chalmers brand of service maintains relevance and offers distinctive value. “I believe Chalmers co-workers are proud to be a part of our four-generation, family owned and operated, fiercely independent insurance agency, whose goal is to caringly steward the business to a fifth generation,” he says. “We are forever respectful of our rich history, but even more excited for our future.”

NOVEMBER 4, 2019 INSURANCE JOURNAL | 29

NATIONAL | Special Report | Best Agency to Work For

Midwest

DSP Insurance Services Schaumburg, Ill.

Nurturing the Entrepreneurial Spirit learning from their mistakes. As a result of its employees’ enthusiasm for their workplace, DSP has been named the Bronze Best Agency to Work For in the Midwest region for 2019. “DSP is a family owned and privately held company offering great flexibility and opportunity to build a desirable career,” commented one employee responding to IJ’s survey. “The agency has a strong entrepreneurial atmosphere and a flat hierarchy allowing direct access to the agency owners/partners. The owners truly care about the company and all employees and are mostly concerned with manageable, profitable growth versus growth at all costs. It’s a great place to work with a bright future.” According to agency President Steve Webster, there’s a strong belief in the “entrepreneurial spirit” at DSP. Among the insurance professionals at DSP, the best fit “is an individual that

does not need to be managed. … ne of five core values They own their that guide the operaown work, their tions of DSP Insurance clients and their Services in Schaumburg, Ill., desk. Employees states: “We will respect and like that type of support all employees.” The culture and work agency also pledges that it will environment,” he “treat our employees as our said in an email to Insurance most valuable resource and Journal. by doing so we will deliver a The agency has 75 superior client experience.” employees and revenues in Judging by their responses the $11 million to $25 million to Insurance Journal’s 2019 range annually. One DSP Best Agencies to Work For team member characterized survey, DSP employees the agency’s atmosphere as clearly appreciate that their “incredibly vibrant,” adding agency’s leadership holds true that management “truly cares to those stated core values. for the well-being of their They treasure the fact that the employees. There is ample agency encourages its staff to support and flexibility when it be innovative and self-directed comes to flex time and work at while providing the support home policies. Our education and encouragement that committee has invested thousands of dollars in our people enables employees to thrive to ensure we all are constantly and achieve success. They also developing and improving.” like that the agency inspires The agency’s leadership employees to work as a team, team went through a transition to support each other, and to this year as a previous owner join together in both celebrating their accomplishments and retired and two current producers took ownership, an employee noted. That the agency’s new leadership has shown a commitment to retaining DSP’s status as an independent agency brought praise from several employees. Others expressed gratitude for the generous support and opportunities the agency provides. Said one: “As my book DSP employees come together in a spirit of giving at the agency’s annual gift of business has rapidly for children in need holiday event. grown, the ownership

By Stephanie K. Jones

30 | INSURANCE JOURNAL | NOVEMBER 4, 2019

has invested in both technology, and human capital for my team. There is a commitment to client success, account management as well as internal work/ life balance that is a true astonishment for me. I see where ownership values the opinions, thoughts, and wishes of all employees. Over the last two years, not only has our agency grown in revenue and head count; individuals that work hard and provide unique skill sets are being promoted, as well as given greater management internally. DSP is evolving into a model agency, and continues to impress me day in and day out.” Webster said he’s pleased that DSP’s employees appreciate their workplace culture and environment. “We are flexible with work schedules, offer work at home and are accommodating to those that need time for their families. We also believe in education and support those that work on their technical skills.” He said management strives to give “employees a voice” and be consistent in “reminding them that what they do matters. We also try to recognize families, birthdays and individual accomplishments when they happen. It’s the little things sometimes that create a positive, caring culture.” Ultimately, employees “are your greatest asset,” Webster said. INSURANCEJOURNAL.COM

NATIONAL | Special Report | Best Agency to Work For

South Central

The Nitsche Group Giddings, Texas

An Atmosphere of Caring By Stephanie K. Jones

he employees at the Central Texas-based independent insurance agency, The Nitsche Group, can’t seem to say enough about how proud they are of the great service the agency provides to its customers. Responding to Insurance Journal’s 2019 Best Agencies to Work For survey, team members at The Nitsche Group attributed the firm’s high client retention rate to its emphasis on client care. “Our customer service is amazing!” wrote one employee, summing up comments made by many others. Another said: “We just continually bring the best options to our clients, regardless of our compensation opportunities.” But great customer service isn’t the only thing they like about The Nitsche Group, which earned the award for the Bronze Best Agency to Work for in 2019 in the South Central region. In declaring their agency as one of the best, team members also cited the opportunities for growth and employee development, the group's diversity, the caring atmosphere and the agency’s rich community involvement, among other things. “The Nitsche Group shows great dedication in helping others. Whether it is an employee in the agency, a client, the community. The agency shows great respect for all and offers all great opportunities to advance in their field,” one INSURANCEJOURNAL.COM

survey respondent stated. ensuring that it Another wrote: “We take doesn’t change. pride in our Agency, we have We hope they feel Integrity, we strive to have the the value we hold expertise to do the best job in this culture and placing our Clients Insurance understand the business to maintain that importance we Another employee who’s business and build their trust.” place in each of them — both been with the agency for 30 Headquartered in Giddings, professionally and personally.” the agency has 124 employees Judging from their responses years said people are always asking when they might retire. and offices across the state. to IJ’s survey, The Nitsche “My answer is ‘I love what I do According to Brigette Group employees do, in fact, and I don’t see myself retiring Burttschell, Senior Marketing feel the love. Said one: “We anytime soon.” Relations, the “agency works are blessed to have very little What would Burttschell say hard to protect and cultivate turn over — once you join this to other firms seeking to create the genuine family culture we agency you become a ‘lifer’ an organization where employwere founded on that fosters and you are treated with such ees want to come to work an atmosphere of earnest respect. When any of our caring and support.” people are going through trying every day? “Focus on leading as a servant. Listen to your The agency has deep roots times we all pull together and employees, learn how to fulfill in the community and a take care of that individual their needs, and offer them the long “history of community when they are down. We leave guidance to grow personally involvement. One of the values ‘no one behind’! It’s true and and professionally. When you we hold highest is the belief this agency is the ‘real thing’! take care of your employees, that our success is defined I count my blessing daily to your employees will take care by how well we contribute to be part of such an amazing of your clients.” the success of others. From organization.” providing scholarships for bettering education to hosting fundraisers for employees and local families in need, our team takes pride in giving back,” Burttschell said in an email to Insurance Journal. Burttschell added that the agency’s leadership believes that “employees understand and embrace how truly different our culture is from others in the industry, and that The Nitsche Group held a “Go Blue” Day to raise awareness for diabetes, with they appreciate the which several employees have been diagnosed and battle daily. effort we put into NOVEMBER 4, 2019 INSURANCE JOURNAL | 31

NATIONAL | Special Report | Best Agency to Work For

Southeast

BKS Partners Tampa, Fla.

Commitment to Culture By Amy O’Connor

hose working for BKS-Partners aren’t just employees – they are referred to as colleagues company-wide, and they really love where they work. More than 90 of the company’s 450-plus “colleagues” responded to Insurance Journal’s 2019 Best Agencies to Work For Survey and praised everything from the company’s founding partners to its opendoor policy on communication to the opportunities BKS offers, both in and out of the office. “Our co-founders are exceptional members of the insurance community who have brought together an astounding place to work and grow. They are not above every employee and can be found in the office on a regular basis,” said one respondent. “They truly have an ‘open door’ and want to be immersed in the culture that they have created … Their guidance and leadership has trickled down to make this firm the best place to work in insurance!”

“At BKS Partners we are not just workers. We are treated as people with lives outside of work. We are given the ability to take care of family if needed and are supported by our team,” wrote another. Respondents said they are driven to go above and beyond for their clients at BKS because that is the company culture. Though the company has grown substantially and now has 40 offices in four states, it has never lost its mission. “Our holistic approach allows us to offer our clients a onestop shop for their insurance and risk management needs. In addition, our risk map approach allows us to identify gaps or issues in their current policies that they may not already be aware of,” said one employee. A one-stop shop, an employee care center, the BKS Risk Map and program stewardship were just a handful of reasons that colleagues listed for how BKS sets itself apart from other agencies and why they are proud to work there. Colleagues also praised

the company’s commitment to its communities and work/life balance. “Our agency has been recognized as one of the Top 100 Best Workplaces for Women,” said one respondent. “As a working mom with small children it is very important to me that my employer understands where I am in life right now. Two of our founding partners are mothers and I believe that is a contributing factor to our company culture that embraces women. At BKS Partners, we are also given multiple opportunities throughout the year to give back to our community in whatever area we choose to. We have a strong commitment to building stronger communities and the joy we gain from [doing so] is immeasurable. We have a Colleagues In Action program that is focused on giving back to the communities we live and work in. BKSPartners provides colleagues with support, time off and resources to get involved in our communities and causes that

BKS-Partners’ colleagues participated in a bike building activity to support two local children’s homes during their annual Energy Retreat. 32 | INSURANCE JOURNAL | NOVEMBER 4, 2019

we are passionate about. This year, BKS-Partners also started the Passion Project, which gives colleagues the opportunity to submit an application to receive up to $1,500 to pursue a passion that they have not been able to do for one reason or another. Three colleagues were chosen earlier this year - one to visit Africa to assist with HopeAlive268, one to visit Hawaii to honor a late spouse and another to help startup a mobile community service project.” BKS Co-Founder Laura Sherman said the company works to create an environment for its colleagues that “fosters inclusivity, encourages innovation and inspires creativity.” “It’s an honor and a delight to know that our colleagues have nominated BKS-Partners as a 2019 Best Agency to Work For,” Sherman said. “Our culture is owned by everyone, and as a result, continues to evolve as we continue to bring on colleagues and expand geographies." Sherman says the management team works on developing and nurturing its company culture and at making its colleagues feel valued. “We understand the impact culture has on our colleagues’ well-being, their passion for clients, their productivity and longevity,” she said. INSURANCEJOURNAL.COM

NATIONAL | Special Report | Best Agency to Work For

West

EPG Insurance Scottsdale, Ariz.

Controlling Your Own Destiny

To implement the strategies in an effective way, ou control your own the firm holds destiny. quarterly offsite That’s a cliché, but meetings to set one would be hard-pressed to goals, and they find a better way to summarize meet weekly for a few hours. the mindset at EPG Insurance. Schmidt calls EPG a “Christ The Scottsdale, Ariz.-based centered agency,” where “faith firm has lately been rolling out is the foundation of every a “future org” chart at meetings decision we make.” Employees and showing people what their who nominated the firm as next step could be. a Best Agency to Work For The chart is projected out mentioned that, along with the five years, with the idea being firm’s willingness to help the that is what the firm may look community and contribute to like when it grows to that size, charitable causes. said Jeff Schmidt, an EPG However, the ability to feel principal. in control of their own destiny That is among the many was an overwhelming favorite reasons a majority of the firm’s EPG attribute. 24 employees took the time “We allow the employees to fill out nomination forms to set their own goals at the for Insurance Journal’s Best beginning of each year in addition to the company goals that Agency to Work For award. we set,” one employee wrote. EPG was awarded Bronze in the “This allows them to feel in West. control of their own destiny. EPG, which reports annual Basically, we say, ‘If you are revenues of $3.8 million, looking for a pay increase or started the future organization promotion, you know exactly chart about three months ago. the path to pursue to hit the goal.’” Another employee liked that workers are viewed as much more than just a way to add revenue. “I have worked in a fair share of industries the last few years and EPG holds the standards high for the way they take care of the employees who work Scottsdale, Ariz.-based EPG Insurance has initiated several new operational here,” the employee strategies designed to let employees know they control their own destinies and wrote. “Especially in that there are plenty of opportunities for advancement. the insurance industry,

By Don Jergler

INSURANCEJOURNAL.COM

The chart is intended to show all employees, from those just starting out in customer service roles to top producers, that they have room to move up. Blank slots on the chart are left in several spots, including coveted posts – sales manager, chief financial officer, commercial lines manager – so people can envision their names going there some day. “As soon as we did that, we had three or four people who called a meeting with us and said, ‘I want that role,’” Schmidt said. “It’s open for the taking. Whoever wants to elevate their game to that level can have that.” The chart is among numerous initiatives the firm has recently undertaken to up its game under new operational strategies that are in part outlined in two books by business author Gino Wickman – Rocket Fuel, and Traction, according to Schmidt, who asked managers and employees to read the books awhile back.

I have yet to hear about a company that takes better care of their employees and their revenue than EPG Insurance. Most businesses are all about numbers, and even though numbers are highly important, what I appreciate the most about this company is that they don’t make it seem that numbers are what their prime focus is, and I think that is also what helps fuel the overall success of this agency.” Another employee noted that the agency takes advantage of “the positive reinforcement factor” by offering team-building social activities and workshops. “We are not a huge corporate office, and the company size definitely helps with everyone being willing to work together,” the employee wrote. “Overall, I’ve been here a little over a year, and not once have I felt the stress that one has when they go into work and truly hate their job. I’ve felt that stress, but never at EPG Insurance.” Schmidt stressed the importance of being a team, getting everyone to know their roles and to look for ways to improve themselves. “It’s just a really cohesive team of people and everybody knows exactly what is expected of them and everybody’s rowing in the same direction,” Schmidt said.

NOVEMBER 4, 2019 INSURANCE JOURNAL | 33

Spotlight: Trucking

Managing Liability

from Electronic Logging Devices on Commercial Vehicles

By Todd Bateson

perating commercial vehicles, whether as a single driver or the owner of a fleet, carries with it significant liability. And, risks are only increasing. The commercial automobile insurance line has been a loss leader since 2011. AM Best estimates that the 2018 industry combined ratio was 112.9% with a forecast of continued elevated loss driven by adverse loss frequency and severity trends. Distracted drivers, congested highways and driver shortages all contribute to the adverse frequency trends. At the same time, increased litigation, medical inflation and higher vehicle repair costs are increasing the costs of claims. It is against this backdrop that the Electronic Logging Device (ELD) rule has come into force. Congressionally mandated and part of MAP-21, the ELD rule is meant to

improve driver safety. Yet, while ELDs, often called telematics, are a positive development for operators of commercial vehicles, they can also be an entirely new source of litigation liability. Thus, anyone working with commercial automobile insurance must understand where those liabilities come from and how to counsel policyholders about mitigating them.

Understanding the ELD Rule

The ELD rule established by the Federal Motor Carrier Safety Administration (FMCSA) mandates the use of ELDs by commercial vehicle drivers that must prepare hours of service (HOS) records of duty status (RODS). The rule also provides minimum performance and design standards for ELDs. According to the FMCSA, the ELD rule “is intended to help create a safer work environment for drivers, and make it easier and faster to accurately track, manage,

34 | INSURANCE JOURNAL | NOVEMBER 4, 2019

and share RODS data. An ELD synchronizes with a vehicle engine to automatically record driving time for easier, more accurate HOS recording.”

Litigation Exposure from ELDs While ELDs are intended to increase safety, their use can increase a company’s exposure to potential litigation because of how much data they gather. Under the FMCSA rule, ELDs must link to the commercial vehicle engine’s electronic control module (ECM). This connection between ELD and ECM provides not just the information required for hours of service but the opportunity to access a range of telematics information such as fuel usage, idle time, GPS location and driver behavior including hard brake events, speeding events and rapid acceleration. Some ELD products can also assign a score to driver behavior data that may be used by their employer. The information obtained

through an ELD system can be a powerful business tool for commercial fleet operators. The data can empower commercial fleet operators to make more informed decisions that save time and money, eliminate safety risks and improve the bottom line. Telematics can also be used to develop driver coaching and safety programs. However, if a driver is involved in a collision, that helpful data might also be discoverable in litigation. This is particularly worrisome given the recent trend where plaintiffs’ lawyers are going after increased jury awards and loss settlements in cases involving commercial vehicle accidents. To do this, plaintiffs’ lawyers are frequently employing “reptile theory” strategies in litigation. Rather than litigating the circumstances of a particular accident, a plaintiff’s attorney using this strategy will put the company on trial. They INSURANCEJOURNAL.COM

will attempt to show that the organization doesn’t take safety seriously and is only interested in making money while putting the general public at risk.

‘The key to mitigating litigation risk is demonstrating the company has taken every possible step to improve driver safety — and ELDs are a powerful tool for that.’ To make the streets safer, they will argue, the jury must punish the company by hitting them where it hurts — their wallets. This is called the “reptile theory” because these types of arguments are meant to appeal to the so-called human “reptile brain” that protect us from perceived threats. In other words, plaintiffs’ lawyers try to make jurors fear something similar will happen INSURANCEJOURNAL.COM

to them if they don’t force the company to change with a verdict that imposes a large damages amount. Plaintiffs’ attorneys are now routinely requesting ELD data as part of discovery in lawsuits involving commercial vehicle accidents. They also request documentation for any driver coaching or training based on that data. In addition, not being able to produce a record of how it used ELD data can also harm a company’s case.

Mitigating the Risks from ELDs The threat of litigation might make complying with the ELD rule and using the collected data seem problematic and a headache waiting to happen. However, there are ways to both mitigate litigation liability and reap the benefits of ELD telematics. That should be the focus of any conversation that insurance agents and others have with commercial vehicle policyholders. The key is for a company to

develop proactive protocols for handling telematics. Showing that the company has made active use of ELD data can greatly enhance the case for the defense in accident litigation. In addition, the information provided from telematics after an accident may help to show that the driver’s actions did not contribute to the accident, potentially limiting liability. Ways to demonstrate a company has been proactive in preventing accidents and limiting liability include: • Taking the time to under stand its ELD system and the information it provides; • Establishing clear guidelines for when to review the data; • Clearly communicating company expectations to drivers; • Developing a system to use telematics to address drivers not meeting expectations with coaching and corrective action; and • Maintaining documentation of any and all driver coach-

ing and mentoring activities. The proactive use of telematics is a win-win for commercial vehicle owners. Not only do telematics help them benefit from the valuable insights ELDs provide regarding driver behavior, but telematics will also help reduce litigation liability in the process. The key to mitigating litigation risk is demonstrating the company has taken every possible step to improve driver safety — and ELDs are a powerful tool for that. Insurance carriers should encourage commercial vehicle policyholders to embrace their ELDs, use them correctly and actively leverage the data to improve safety. Doing so is one way we can help improve the viability of commercial vehicle insurance. Bateson is executive vice president, transportation at IAT Insurance Group. Website: www.iatinsurance.com. Phone: 678-381-8549 Email: Todd. Bateson@iatinsurance.com.

NOVEMBER 4, 2019 INSURANCE JOURNAL | 35

Idea Exchange: When Words Collide Resolving Claim Disputes:

STEP 3

Research and Document the Interpretation – Part 3 of 3

n the past two columns, we examined eight legal and contractual principles nonlawyers can use to resolve most claim disputes By Bill Wilson without litigation. In this month’s column, we’ll wrap up this discussion with nine other principles.

Entirety of Contract

By now, you know what “RTFP” stands for, the ‘PG’ version being “Read The Full Policy.” That interpretation of the acronym falls within this principle. To determine whether coverage exists, you must review the entire contract. For example, in one claim, a homeowners policy insured’s brother-in-law was using his own riding mower to pull fallen tree limbs to a pile following a bad storm. His mower was damaged when a large, suspended limb fell from a tree. He sought coverage under the homeowner’s HO policy. The adjuster denied the claim under the “goodwill” Property of Others coverage in Section II – Liability of the policy because it required that damage to the property of others must be “caused by” an insured, not the case here. The adjuster was interpreting this policy provision correctly, but not the policy in its entirety. His mistake was limiting his search for coverage to the liability section of the policy. In Section I – Property, there is, at the insured’s request, coverage for the property of others if caused by a covered peril. Under the facts and circumstances of this claim, the falling objects peril applies and there was coverage for damage to property of others in this provision. RTFP! 36 | INSURANCE JOURNAL | NOVEMBER 4, 2019

Unconscionable Advantage

If you can make a case for coverage following a claim denial, the insurer must consider it, especially if you cite case law and/or authoritative support for your interpretation. In Smith v. Travelers Indem. Co., 32 Cal. App. 3d 1010, 1017, 108 Cal. Rptr. 643 (Ct. App. 5th Dist. 1973), the court opined that, “An insurer bears a duty to defend its insured whenever it ascertains facts which give rise to the potential of liability under the policy irrespective of the source of the information.” Similarly, if case law supports a position contrary to that taken by the carrier and such case law has been brought to the attention of the insurer, “It cannot hide behind the insured’s ignorance of the law; it cannot conceal its liability. In these circumstances it has the duty to speak and disclose, and to act in accordance with its contractual undertaking.” — Bowler v. Fidelity & Cas. Co., 53 N.J. 313, 327-328, 250 A.2d 580, 588 (1969).

contract, law. It has been used successfully in cases where language added to a certificate of insurance implied coverage where none existed, and the certificate holder relied to his or her detriment on the information on the certificate.

Breach of Contract

An insured had been with the same insurer for more than 40 years and never filed a claim until the current homeowners policy period when the carrier paid a $6,000 windstorm claim and a separate $40,000 fire claim. Following the second claim, the insurer sent a mid-term cancellation notice. The cancellation was invalid, thus breaching the conditions in the insurance contract, because having a loss was not valid grounds for cancellation.

Waiver and Estoppel

If an adjuster has waived a right under the policy, the insurer is estopped from asserting that right later. In one case, an independent adjuster hired by the carrier authorized an insured to begin cleanup following a fire loss. Two weeks later, the insurer sent a house adjuster who attempted to reduce the previously agreed upon settlement by $180,000 because he did not have the opportunity to review the damage prior to cleanup. Waiver and estoppel prevented the coverage reduction.

Detrimental Reliance

Detrimental reliance, or promissory estoppel, is a principle steeped in tort, not INSURANCEJOURNAL.COM

A similar situation arose when an insured was pulled over for a traffic violation and marijuana was discovered in the vehicle. The auto insurer followed that with a cancellation notice but had to rescind it because there was no valid basis in the policy for cancelling for that reason. Breaches of contracts can and do occur on the policyholder side by violating various conditions in policies, including fraud.

Duty of Utmost Good Faith

This is simply a foundational principle of insurance. In one homeowners claim, an elderly widow was paid half of the $26,000 that was needed for repairs following a fire loss. In the claim file, the adjuster had made a handwritten note that he had “lowballed” the homeowner.

The result was that the insured was awarded the additional $13,000 plus $3 million in punitive damages for bad faith. But successful bad faith lawsuits against insurers are uncommon if not rare.

Statutory Supersession

An insurance contract cannot be more restrictive than a statute. However, an insurance contract can be broader than a statute. For example, an auto policy allowed nonrenewal with a 20-day notice; however, state law required a 30-day notice, so it didn’t matter that the policy said 20 days because 30 days was required. On the other hand, if state law permitted nonrenewal with a 20-day notice but the auto policy required a 30-day notice, then the insured should get a 30-day notice.

Agency Accommodations

Sometimes, insurers will pay claims that are arguably not covered as an accommodation to a preferred agency or an important customer or as a goodwill gesture to multiple insureds. If so, it’s probably a good idea that such payments come from a charitable account and not a loss reserve. Some legal jurisdictions have opined that paying a claim for one requires paying an identical claim for all.

Good faith is simply a foundational principle of insurance. This kind of inconsistency can come back to haunt an insurer. For example, as illustrated in Aetna Cas. & Sur. Co. v. Haas, 422 S.W.2d 316 (Mo. 1968), the payment of a claim for one insured but not another may, upon discovery, bind the insurer to coverage of a later claim of the same type. As a result, many insurers are reticent to pay uncovered claims on this basis.

Regulatory Directive

Sometimes, insurance departments act on their statutory ability to regulate in the public interest. On an individual claim basis, that may be the premise of an insurance department’s involvement. However, it’s more likely to be one of mediation, and resolution may be grounded more in perceived fairness than any real regulatory authority. The reality is that insurers may sometimes bow to the recommendations of a regulator to stay in their good graces. Rightly or wrongly, that happens, and our mission here is to include reality and practicality in our exploration of means of resolving coverage and claims disputes. In next month’s concluding column, we will explore the value of regulatory intervention by insurance departments with the staff expertise to intercede in claim disputes. 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.” INSURANCEJOURNAL.COM

NOVEMBER 4, 2019 INSURANCE JOURNAL | 37

Idea Exchange: Diversity 5 WAYS TO

Cultivate D&I in the Workplace T

his is an important time for the insurance industry, as companies across 34 countries recently joined together By Joyce Trimuel in celebration of diversity and inclusion (D&I) through the 2019 Dive In Festival. Dive In has played a crucial role in raising awareness and promoting positive action for diversity since its founding in 2015. It has served as a reminder that a commitment to D&I should be a key component of any companyâ&#x20AC;&#x2122;s day-to-day operations. When a company has a more diverse workforce, it obtains greater access to fresh thinking and new perspectives. Creating a culture in which people know they matter and are part of an organization that is making a difference will ensure that the abilities of all employees are being used to their fullest potential and can drive innovation throughout a company, excelling the business forward.

D&I Supports Business Goals

There is a strong business case for putting D&I into action. The most compelling benefit to having a strong commitment

to D&I is creating a feeling of comfort and inclusivity for employees to be who they are in the workplace. Employees who are comfortable are more likely to engage, which results in increased productivity, innovation and a willingness to go above and beyond when delivering results. A recent McKinsey study revealed that diverse teams make better decisions, and on average, individuals will prepare better for any group exercise that they know involves working with members different from themselves. Therefore, genderdiverse companies are 15% more likely to outperform their competitors, and ethnically-diverse companies are 35% more likely to be more successful than competitors. These numbers are only expected to grow. According to the Deloitte Millennial Survey, 74% of millennials believe their organization is more innovative when it has a culture of inclusion. By the year 2025, 75% of the global workforce will be made up of millennials. Given the higher returns that diversity is expected to bring, paired with millennialsâ&#x20AC;&#x2122; priorities in the workforce and the change that unique perspectives bring, diversity must be a key part of company culture. It is better to invest in D&I now, as

companies that do will continue to pull further ahead, while idle companies will fall further behind.

Making the Change to D&I

Transforming a company into a D&I-focused organization is not easy. While good intentions are there, most organizations do not have the rigorous follow-through with D&I programs that they typically apply for other change programs. This could be because many organizations do not address, or do not know how to address, their D&I agenda as a comprehensive change program with measurable goals, supporting actions, clear accountabilities and with consequences when goals are not being met. To achieve change, it is not sufficient to simply state that the subject is a priority. Despite the various challenges causing companies to struggle with implementing D&I programs, there are certain steps that teams can take to get started with creating a more diverse and inclusive workplace. Assign an Executive Sponsor. When embarking on a new program of D&I activity, it is critical to appoint an executive sponsor, such as an internal employee from the leadership team who will take ownership of the D&I strategies and goals, making sure the effort remains a priority across the entire company. This also helps to ensure that D&I will be discussed at the highest levels in the business and not be viewed as just an HR issue. Incorporate D&I into Employee Training Programs. Make sure the entire staff understands the importance of inclusive

practices and D&I strategies. These training sessions can be taught through webinars and company-wide presentations as well as weaved into onboarding programs for all new employees. Make sure to foster diversity awareness and skills at all levels throughout the organization, as it is important to make sure no department or group is unaware or left out of the company’s goals, strategies, ideas and progress.

When a company achieves a more diverse workforce, it obtains greater access to fresh thinking and new perspectives. Elevate Partnerships. Develop partnerships and contracts with suppliers, associations and businesses owned by diverse demographics. Be sure to bring D&I into your corporate social responsibility efforts. Take the time to research, partner with and invest in each of the diverse communities where you do business. This ensures that D&I is top-of-mind for all employees in their day-to-day work. Expand Operations. Explore new and diverse markets, customers and distribution channels for products and services. One place to start is to research a new diverse group of customers through a marketing campaign. Understand how your brand connects to these new customers. Today’s customers are more demanding than ever before for businesses to meet them where they are in life and in their buying journey. Lead by Example. Promote an environment of acceptance and inclusion by educating yourself on the traits of an inclusive leader. Find ways to develop those traits. This includes cognizance, curiosity, courage to take risks, cultural intelligence, commitment to staying on course and collaborating with diverse teams. The insurance industry has made great strides around D&I efforts from executives, senior leaders and organizations like the Dive In Festival. According to Dive In surveys, 49% of festival participants claim positive culture toward D&I has

improved since last year’s events but there is more work we can do to make sure the insurance industry continues to evolve. We expect D&I efforts to accelerate innovation across companies as employees from diverse backgrounds bring unique perspectives to the table. This can enable employees to challenge

Trimuel is the chief diversity officer at CNA.

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assumptions, try new approaches and think outside of the box when seeking solutions. It is our civic duty to provide an inclusive workplace for employees to thrive in — one that benefits employees and drive business.

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NOVEMBER 4, 2019 INSURANCE JOURNAL | 39

Idea Exchange: The Wedge Agency Growth Secrets:

To Build Your Sales Team, Grow Your Agency and Change Your World

any agencies have a growth rate of 1% to 3%. They have an aging producer force, no systems to drive growth and no way out but to sell to an aggregator. In most cases, they have tried to hire new producers and have failed. They tried a pipeline manager and it failed. They hired a By Randy Schwantz sales trainer, but no growth and it failed. Now they are saying to themselves, “We make money, but we’re not growing…where do we go from here?” You have three real choices: 1. Ride this horse. 2. Sell to an aggregator (prices are at an all-time high). 3. Make a commitment to grow. If you decide you want to grow, there will be a few issues you should consider first. Can you set priorities, and stick with them? Do you feel sorry for lame producers that are stuck in the ’90s? Is “discipline” a foreign or dirty word? Do you hate process? If you can’t stick to a plan. If you feel sorry for bad producers. If you’re not disciplined and can’t stick to a process, you should probably sell. Remember, prices are at an all-time high. However, when you do the math on increasing your growth rate by 6%, 8% or 10%, and compare that to the one-time, big multiple, an aggregator will give you, you might find it more attractive to keep and grow your agency. If you decide you want to grow the next question is how? It’s simple, although not a secret. 40 | INSURANCE JOURNAL | NOVEMBER 4, 2019

Develop your producers into a powerful sales team that wins and watch the revenue flow in.

Building a stronger, more powerful sales team that wins is not as hard as you may think. It takes discipline, structure and commitment. You must train, coach and hold them accountable. Most of your peer competitors struggle with these three things, so they are looking for tricks — something that is easy, doesn’t require work, discipline, structure or commitment. You could call it magic, but magic doesn’t exist in the real world does it? Here is what they are willing to try: • A new website along with some colorful marketing collateral. • Changing the title on their producer’s business card to risk advisor or risk partner. • Implementing a digital marketing program to drive new leads. It’s like telling your child to read muscle magazine to get stronger. At some point your child has to get into the

gym and lift weights. That’s how you get stronger. If you want stronger, more powerful and confident producers then you must do the same thing — train, coach and develop them to become better salespeople. There it is. The “secret” has been revealed. That is exactly what all of the high growth firms are doing; they are training, coaching and developing their salespeople.

Nick and Chick

Nick Saban and Bill Belichick are very intelligent and hard driving coaches. They win championships because they recruit well. They train hard and they build competitive advantage. They find good talent and make it better. They have a process to turn their players into great players and their players win. Nick and Chick have one objective: develop their players into great players. When great players do their “thing” they dominate play by play, they win games, and they win championships.

INSURANCEJOURNAL.COM

Nick and Chick coach, train and develop their people to dominate their competition. It’s how they win. It’s why they get enviable results. They have a playbook, and demand every player learn it. Players watch film and study the competition. They lift weights and get strong. Players practice their plays. Nick and Chick develop not just the player, but the person. They help them build a mindset of determination, domination and discipline. And with that, they win.

How to Get Your Competition Fired

I wrote my first book, “The Wedge, How to Stop Selling and Start Winning,” in 1997. I did a follow-up book, “How to Get Your Competition Fired” without saying anything bad about them in 2005. You can clearly see the intent: it’s about winning, not quoting. It’s about dominating your competitor, not tolerating them. It’s about building a differentiation strategy that always works, not cute marketing collateral or new titles so we can avoid our real job, selling. To me, it is the real game. Here is a simple fact when it comes to selling insurance: Someone must lose for you to win. If you can’t get your competition fired, you can’t get hired. It’s simple. It’s direct. It’s true. It’s real.

‘Each possession you look across at the opponent and commit yourself to dominate that person.’ –Nick Saban

The Bill Parcells Family Tree

Mickey Corcoran mentored Bill Parcells. Bill Parcells mentored Bill Belichick. Bill Belichick mentored Nick Saban. Do you see a pattern? These great coaches had a mentor. That’s your next step. Find a mentor, or maybe they’ll find you. Quit trying to Lone Ranger it. Become a student of producer development; it’s the most lucrative skill you could ever develop. You want winners. That’s why you must become a developer of salespeople. You must train them. You must coach them. It’s up to you to make them better. You, too, can do what Nick and Chick do. You can become a trainer. You can become a coach. You can become a developer of great producers. When you do, you will develop a team of perpetual winners that dominate the competition, produce a lot of revenue, and with that, your agency will grow. Your producers will grow their income. You’ll teach them to make money and save money. You’ll teach them that they need to save 25 times whatever they expect to live on at retirement (that’s a minimum of $2.5 million). To do that, they have to save about $55,000 a year for 20 years in a row. And, until they have saved that much, your message is simple: keep making money, keep saving money and grow your wealth.

Many agency owners are stuck in the “old game.” They still promote the 1950s model for selling insurance that they learned from their grandfather. 1) Build relationship. 2) Find coverage gap. 3) Get a better price. 4) Present and hope you win. That old game selling model slowly erodes the confidence of the average producer, making them worse, not better. It slowly erodes your ability to grow your agency as producer confidence diminishes. It’s like cancer; it eats you up from the inside out. It’s a poor way to develop producers. It’s a poor way to grow an agency. It’s a broken model. No more secrets. Schwantz is founder of The Wedge Group. the author of five books including, Agency Growth Machine: Transform Producer Potential into Agency Growth & Profit Email: randy@thewedge.net. Phone: 214-4463209. Website: www.thewedge.net

To give real service you must add something which cannot be bought or measured by money— only sincerity and integrity. Douglas Adams

Frenkel/AIG Psychoanalysts Professional Liability Program For over 40 years, Frenkel & Company has proudly delivered our exclusive insurance products to psychoanalysts industry wide, including APsaA members. This insurance program and other insurance products are a testament of both our knowledge and our commitment to this prestigious industry. We appreciate the opportunity to serve you.

Kenneth C. Hegel, Jr. Senior VP/Unit Manager, Frenkel & Company khegel@frenkel.com // 201-356-0057

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How Grandpa Sold Insurance

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NOVEMBER 4, 2019 INSURANCE JOURNAL | 41

elcome to Insurance Journal’s 2019 Premium Finance Directory, a comprehensive listing of premium finance companies able to assist agents and brokers with their clients’ financing needs. All company information listed in this directory was directly submitted to Insurance Journal. To be listed in future editions of Insurance Journal’s Premium Finance Directory, or any other directory, contact Kristine Honey at: khoney@insurancejournal.com. We hope you find this directory to be a valuable resource when searching for financing options for your clients. Feel free to send us comments and suggestions on how we might improve this directory, or for additional help, e-mail: editorial@insurancejournal.com.

The 2019 Premium Finance Directory is Sponsored By:

AFCO Credit Corp.

Agile Premium Finance

1133 Avenue of the Americas, Ste. 2735-39 New York, NY 10036 Toll-free: 1 (800) 288-6901 Email: newbusiness@afco.com or promptservice@afco.com www.afco.com

475 Half Day Road, Lincolnshire, IL 60069 Phone: (877) 359-7767 Email: sales@agile-pf.com www.agile-pf.com

• AFCO customizes premium finance options for insurance agents, brokers and their customers • Unmatched expertise in premium finance with comprehensive underwriting, legal and support resources • Proven reliability, flexible terms and the ability to support insureds with non-standard needs

A d i vi s i on of Met a B a n k ®

AFS/IBEX Financial Services, Inc. 750 N. St. Paul, Ste. 1500, Dallas, TX 75201 Phone: (800) 299-5626, Fax: (214) 954-0537 Email: service@afsibex.com www.afsibex.com • Proven Stability – We’ve been operating for over 30 years under the same proven leadership, where premium finance is our only focus • Evolving with the times – As a division of MetaBank, our financial strength and stability offer our partners peace of mind that we will be here today, tomorrow, and in the future • Partnering for the future – As a good corporate partner, our programs evolve and enhance the benefits you can offer your insureds, increasing your retention • Ask us about offering agency loans and credit lines

42 | INSURANCE JOURNAL-NATIONAL REGION November 4, 2019

• Driven by innovation and backed by Valley National Bank (NASDAQ: VLY), Agile is one of the fastest growing companies in premium finance. • Offering convenient, efficient premium finance technology solutions designed to make your days more productive. • Agile takes great pride in offering the best customer experience for both agent partners and insureds. We go above and beyond to deliver for our clients. All Island Credit Corp. 80 Skyline Dr., Ste. 100, Plainview, NY 11803 Phone: (516) 605-2835, Fax: (516) 605-2841 Email: info@allislandcredit.com www.allislandcredit.com • Outstanding Customer Service • Competitive Rates • 24/7 Online Access www.insurancejournal.com www.insurancejournal.com

Premium Finance Directory Automated Installment Systems

Capital Premium Financing

Cypress Premium Funding, Inc.

955 Executive Pkwy, Ste. 216, St. Louis, MO 63141 Phone: (800) 624-6308 Email: sales@automatedinstallment.com www.automatedinstallment.com

12235 S. 800 E, Draper, UT 84020 Phone: (800) 767-0705, Fax: (800) 700-3170 Email: info@capitalpremium.net www.capitalpremium.net

28202 Cabot Rd., Ste 435, Laguna Niguel, CA 92677 Phone: (949) 487-0602, Fax: (949) 487-0640 Email: info@cypressfunding.com www.cypressfunding.com

• An industry leading provider of premium finance and installment billing outsource solutions to all segments of the insurance industry for over 30 years. • AIS’s extensive product offerings are technology driven solutions that automate the presentation of payment products and payment options to policyholders. • Our experienced staff consistently delivers innovative services and processing solutions to agencies, general agencies, and insurance carriers throughout the country.

• Industry leading Agency Revenue Programs • Highest level of Agent/Client service available in the industry • Local presence, multiple payment options, and online access

• Internet Account Viewing, Quoting, Reporting and On-Line Payments • Immediate Funding • Cancellation Prevention Programs

Express Premium Finance Company, LLC 21 E. Main St., Ste. 103, Oklahoma City, OK 73104 Phone: (800) 728-2902, Fax: (888) 413-8898 Email: quote@expresspremium.com www. expresspremium.com

Capitol Payment Plan

BankDirect Capital Finance 150 N. Field Dr., Ste. 190, Lake Forest, IL 60045 Phone: (877) 226-5456 Email: marketing@bankdirectcapital.com www.bankdirectcapital.com • BankDirect’s commercial premium finance programs offer agency revenue opportunities, multiple payment options for insureds, e-signature, and cancellation prevention. • Our team of seasoned professionals strives to make premium finance as easy as possible by embracing “out of the box” thinking and taking a consultative approach with our agency partners and their customers. • BankDirect is continually improving its technology based solutions for ease of use, process automation, and efficient workflows.

CAC Acceptance Corporation 3673 Westcenter Dr., Houston, TX 77042 Phone: (888) 422-7755, Fax: (800) 486-1049 Email: info@cacacceptancecorp.com www.cacacceptancecorp.com • We are a Family Company with no obligations to Wall Street or “Big Banking” • More customer service centric to your insured’s & you, the agent, than a wholesaler’s finance company • More liberal payment terms than many insurer plans

www.insurancejournal.com

52 Corporate Circle, Ste. 208, Albany, NY 12203 Phone: (866) 639-1333, Fax: (518) 862-7522 Email: sternj@cappay.com www.cappay.com • Committed to helping insurance agents maintain their competitive edge through premium financing solutions since 1979 • Leading local experts to address the unique needs of the personal lines business • State-of-the-art products and programs that maximize efficiency in quoting, leaving more time to focus on your customers

ClassicPlan Insurance Premium Financing 13750 Pipeline Ave., Chino, CA 91710 Phone: (800) 347-6481, Fax: (909) 628-5490 Email: info@classicplan.com www.classicplan.com • Most lines of business accepted, including Cannabis • Mobile App, credit card payments, ACH and more for insureds payment submission • Extra services to help increase retention and market your agency

COST Financial Group, Inc. 807 W. Highway 50, Ste. 4, O’Fallon, IL 62269 Phone: (800) 844-2678, Fax: (618) 206-3223 Email: daveg@costfinancial.com www.costfinancial.com • COST makes it easy for YOU TO OWN your own Premium Finance Company • COST does the set-up, COST runs the back room, YOU EARN ALL THE PROFIT • Let COST’s 29 years’ experience put the PROFIT from YOUR premium financing IN YOUR POCKET!

• Premium Service • Premium Solutions • Premium People

FIRST Insurance Funding Corp. 450 Skokie Blvd, Ste. 1000, Northbrook, IL 60062 Phone: (800) 837-3707, Fax: (800) 837-3709 Email: marketing@firstinsurancefunding.com www.firstinsurancefunding.com • Best turnaround time and most complete payment options in the industry, including credit cards for down payments • Online quoting and account management with paperless options, mobile app and chat for both agent and insureds • Direct Bill, Automated Payments Solutions, Agency Lending and Leasing programs

Focus Finance, LLC P.O. Box 451899, Sunrise, FL 33345-1899 Phone: (954) 331-4825 Email: info@focusfinance.net www.focusfinance.net • Save time and money by letting us do the work for you; ready to sign Premium Finance Agreements sent via email or fax. • Our payment email reminders and direct customer calls help save over 50% of policies from cancellation. • Payments can be made by phone or online using check or credit card.

November 4, 2019 INSURANCE JOURNAL-NATIONAL REGION | 43

Premium Finance Directory GBC Premium Finance, Inc.

Johnson & Johnson Preferred Financing, Inc.

110 E. 9th St., Ste. A-1126, Los Angeles, CA 91214 Phone: (213) 244-9535, Fax: (213) 236-0759 Email: info@gbcpf.com www. gbcpf.com

200 Wingo Way, Ste. 200, Mt. Pleasant, SC 27464 Phone: (800) 868-5573, Fax: (843) 724-7085 Email: finance@jjpf.com www.jjpf.com

• We specialize in Trucking Insurance Premium Finance, but Finance all Commercial and Personal Lines. • 24/7 Online Access, we are partnered with one of the top software companies in Premium Finance. • We are currently Licensed in CA, TX, NV, AZ, IN, VA, NJ and NY and expending fast.

• Finance most lines of coverage both Commercial and Personal lines • Online software for 24/7 access to quoting, account management and reporting • Multiple funding options for Money in & Money out!

General Agents Acceptance Corporation 23441 S. Pointe Dr., Ste. 220, Laguna Hills, CA 92653 Phone: (949) 470-9674, Fax: (800) 568-5462 Email: james@mygaac.com www.mygaac.com • We increase retention by physically calling the customer before cancelling & giving more time to pay. • We offer competitive rates & exceptional customer service. • You can quote online or send us the quote from the carrier & we will quote the finance agreement for you.

gotoPremiumFinance.com 6200 Canoga Ave., Ste. 400, Woodland Hills, CA 91367 Phone: (888) 875-4000 Ext. 2135, Fax: (818) 610-2066 Email: sales@gotopremiumfinance.com www.gotopremiumfinance.com

• A unique one of a kind paperless premium finance billing option that is also designed to help agents grow their insurance business and increase their income. • Nationwide premium finance provider for agents, MGAs & insurance companies. • Online quoting, online payment options, real time account status, online cancellation holds, customized notice delivery & more.

Imperial PFS 1055 Broadway, 11th Fl, Kansas City, MO 64105 Phone: (800) 838-2350, Fax: (816) 627-0502 Email: marketing@ipfs.com www.ipfs.com • The size and independence of Imperial PFS® provides the financial strength and flexibility to handle a wide range of accounts from large, complex deals to those that are smaller and more streamlined. • As a nationally-recognized premium financing leader, Imperial PFS® is committed to developing technology resources and services to best meeting the needs of Agencies and their Insureds. • Nationwide strength, local service – Imperial PFS® is powered by a network of more than 25 branches strategically located across the United States and in Puerto Rico.

Liberty Premium Finance, Inc. 4 Centerpointe Dr., Ste. 300, La Palma, CA 90623 Phone: (800) 229-8793, Fax: (562) 356-0131 Email: sporter@libertypf.com www.libertypf.com • Flexible monthly payment options for commercial insurance policies • Quote, bind and archive your contracts with our easy-to-use online quoting center • Pay by mail, phone, online or in person with credit card, check or check by fax

Monarch Premium Resources, Inc. Insurance Finance Company, LLC P.O. Box 315, Des Moines, IA 50306-1315 Phone: (800) 247-4190, Fax: (515) 223-0226 Email: Brian@ifcorp.biz or banstoetter@ifcorp.biz www.ifcorp.biz • IFC is independently owned with no ties to insurance companies, agencies or other financial institutions. That gives us flexibility! • Celebrating 50 years in business • Fanatical Service – Flexible rewards and agency incentives – Competitive terms.

28202 Cabot Rd., Ste 435, Laguna Niguel, CA 92677 Phone: (949) 487-0602, Fax: (949) 487-0640 Email: info@MonarchPremium.com www.monarchpremium.com • Exclusive financing arrangements for brokers of Monarch E&S • Interactive Web site for account viewing, reports and On-line payments • Financing Commercial and Personal Lines Insurance Premiums

Mountain West Premium Finance Insurance Payment Company 3025 Windward Plaza, Ste. 400, Alpharetta, GA 30005 Phone: 678-578-6600, Fax: 866-922-0691 Email: newbiz@inspayco.com www.inspayco.com

• State of the art technology allowing ease of doing business for both agent and insured • Personalized customer service –supported by knowledgeable staff with extensive experience in insurance industry as well as premium finance • Flexible payment options most national companies can’t/won’t offer

44 | INSURANCE JOURNAL-NATIONAL REGION November 4, 2019

2535 Kettner Blvd., Ste. 3-A2, San Diego, CA 92101 Phone: (888) 280-0235, Fax: (619) 697-0326 Email: mike@financepremium.com www.financepremium.com • ZERO Down - 100% Financing • Auto-Renewal Premium Financing • Form Your Own Premium Finance Company

www.insurancejournal.com

Premium Finance Directory

NCMIC Finance Corporation

Premins Company

Premium Finance Consulting, LLC

1407 Avenue M, Brooklyn, NY 11230 Phone: (800) 599-3279, Fax: (718) 376-8330 Email: info@preminsco.com www.preminsco.com

1870 N. Corporate Lakes Blvd., Ste. 267824 Weston, FL 33326 Phone: (408) 800-3876 Email: info@premiumfinance.consulting www.premiumfinance.consulting

14001 University Ave., Clive, IA 50325 Phone: 1-(800) 600-9250, Fax: 1-(800) 630-9250 Email: LLogan@ncmic.com www.nfcfinance.com

• Commercial and personal financing for over 50 years • Batched once-a-week cancellations • Get answers and quotes quickly with our fast and effective customer service on the phone and on our customized website

• Better Service, better relationships with a dedicated account manager • Customized programs for niche markets with low down payments • Timely funding and income opportunity for you agency, where permitted

Premium Assignment Corporation A Subsidiary of IPFS Corporation

Prime Rate Premium Finance Corporation

P.O. Box 8800, Tallahassee, FL 32314-8800 Phone: (800) 342-0991, Fax: (800) 286-8999 Email: marketing@premiumassignment.com www.premiumassignment.com

2141 Enterprise Dr., Florence, SC 29501 Phone: (866) 669-0937, Fax: (800) 677-9850 Email: info@primeratepfc.com www.primeratepfc.com

• Exceptional Service • Online Quoting – Ease of Use • Competitive Rates – Flexible Terms

• Financing commercial accounts nationwide • User-friendly 24/7 Web-based access • Exceptional customer service

• Is your agency large enough for a profit sharing arrangement? • Is creating your own premium finance company appropriate for you? • We can assist you in finding the best premium finance relationship for your agency.

Premium Finance Associates P1 Finance 280 Technology Pkwy, Ste. 100, Norcross, GA 30092 Phone: 1 (877) 395-6770, Fax: (404) 745-0737 Email: customerservice@P1Finance.com www.P1Finance.com.com • PARTNERSHIP: Committed to building long term relationships with Insurance Companies, MGAs and their Retail Agent networks • TECHNOLOGY: Best in class, web-based digital technology for 24/7 access, iPad, iPhone and Android App, IVR, for 24/7 access for your customers account status and payments • VALUE: Customizable and flexible payment options and pricing terms to maximize the profitability of your business

PREMCO Financial Corporation P.O. Box 19367, Kalamazoo, MI 49019-0367 Phone: (269) 375-3936, Fax: (269) 375-6913 Email: greg@go-premco.com www.go-premco.com

7603 First Place Dr., B-12 Cleveland, OH 44146 Phone: (866) 374-3630, Fax: (866) 839-3090 Email: info@PremiumFinance.net www.PremiumFinance.net

SIUPREM, Inc.

• Licensed in all 50 states • Insurance Agency Acquisition, Perpetuation and Capitalization loans • Short term loans for Insureds with cash flow issues

Premium Finance Brokerage, LLC P.O. Box 623, Jarrettsville, MD 21084 Phone: (866) 381-6501, Fax: (866) 381-6502 Email: tlarsen@premiumfinancebrokerage.com www.premiumfinancebrokerage.com • Guaranteed Lowest Interest Rates • Access to several national premium finance companies through one point of contact • Flexible payment options, cutting edge technology and a service pledge that’s put in writing

P.O. Box 105611, Atlanta, GA 30348 Phone: (678) 498-4730, Fax: (678) 498-4747 Email: info@siuprem.com www.siuprem.com • Independently owned, full service online premium finance company servicing independent agents since 1969. • Industry leading technologies providing real-time data for online policy service by the insured or the agent. • SIUPREM CARES. Each time a commercial policy is financed with SIUPREM $5 of the proceeds will be committed toward Breast Cancer Awareness and Research.

• We finance all Commercial & Personal lines with same day funding • Rate Share, Profit Sharing, Stock Dividends & Referral Fees • FREE Online payments and the option to pay with Credit/Debit cards

www.insurancejournal.com

November 4, 2019 INSURANCE JOURNAL-NATIONAL REGION | 45

Premium Finance Directory South Bay Acceptance Corp.

Thrifty Financial Services, Inc.

10151 Deerwood Park Blvd., Bldg 100, Ste. 330 Jacksonville, FL 32256 Phone: (800) 393-2012, Fax: (888) 328-6747 Email: contact@sbac-finance.com www.sbac-finance.com

1691 Main St., Springfield, MA 01103 Phone: (800) 919-0015, Fax: (800) 736-5177 Marketing Rep: Mari Roy – (508) 450-0534 Email: thriftyfin@aol.com www.thriftyfinancial.com

• Flexible premium financing programs with multiple benefits for your agency and their insured’s! • 24/7 Online Quoting access, account status verification, activate your own quotes immediately! • Creative Producer compensation options ready to provide you additional income!

Specialty Risk Premium Finance 8824 Youree Dr., Shreveport, LA 71115 Phone: (318) 683-6206 Email: flee@sramga.com www.sramga.com

Stetson Insurance Funding, LLC 6450 Transit Rd., Depew, NY 14043 Phone: 1 (866) 856-1112, Fax: (716) 206-8237 Email: quotes@stetsonfunding.com www.stetsonfunding.com • Fully functional website that allows Brokers and Insureds to easily manage accounts - quoting, inquiry, payments, and reporting. • Best in class customer service team that will personally assist you, as well as an automated response phone system to meet all your customer service needs. • Competitive rates and flexible options for down payments, installments and funding - JUST ASK.

• In house financing for policies written through Specialty Risk Associates • 24-hour web access to accounts for you and your clients • Payment methods like Check by Phone, Echeck, On Line Credit Card and AUTO PAY are available

Stonemark

Standard Premium Finance

Tepco Premium Finance

13590 SW 134th Ave., Ste. 214, Miami, FL 33186 Phone: (800) 592-7753 or (305) 232-2752 Email: Robert@standardpremium.com www.standardpremium.com

1405 S. Rustle Rd., Spokane, WA 99224 Phone: (509) 462-1132, Fax: (509) 622-4702 Email: ncochrane@tepcofinance.com www.tepcofinance.com

· Personal and commercial lines. · No minimum, no maximum premiums. · Our personal service and attention to detail make the difference. · ACH, EFT and credit card payments and down payments. · Revenue-Sharing and traditional commission programs. · Simple one-page online quoting. · E-Sign documents. · The best loyalty rewards program in the business! · If you’re not 100% satisfied, we won’t accept your business.

• Looking to Finance Cannabis Risks • Licensed in 43 States and Counting • Great Service, Competitive Rates/ Compensation Packages

8501 Wade Blvd., Ste. 620, Frisco, TX 75034 Phone: (800) 955-0083 Email: service@stonemarkinc.com www.stonemarkinc.com • Online Payments & Account Status – make payments or review insureds’ accounts, including payment history, 24/7 • Same-day turnaround on finance quote requests and quote revisions • Online Quotes system gives agents the option of producing finance quotes and finance contracts anytime

46 | INSURANCE JOURNAL-NATIONAL REGION November 4, 2019

• The premier premium finance provider for Massachusetts insurance agents for over 25 years. • Seamless quoting integration with SinglePoint rater from Boston Software - requiring zero duplicate data entry for the agent. • Unmatched technology and services proven to boost the customer experience for both insureds and agents.

Top Premium Finance Company A Division of Premier America Credit Union 19867 Prairie St., Chatsworth, CA 91311 Phone: (800) 458-2228, Fax: (818) 721-3840 Email: TopMarketing@toppremiumfinance.com www.TopPremiumFinance.com • 24/7 quoting and account access with our online database • Competitive and flexible rates to assist brokers in a multitude of policies • 0-4% Producer Fee capability, adjustable to any policy

US Premium Finance 280 Technology Pkwy, Ste. 200, Norcross, GA 30092 Phone: 1 (866) 246-9691, Fax: 1 (866) 246-9692 Email: customerservice@uspremiumfinance.com www.USPremiumFinance.com • SERVICE: Knowledgeable network of experts delivering the best customer experience in the industry • TECHNOLOGY: User-friendly software with 24/7 access to quoting and your customer database • VALUE: Flexible terms and competitive rates to maximize the profitability of your business

www.insurancejournal.com

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Idea Exchange: Talent

How a Culture of Change Helps Modernization Efforts

echnology and innovation have become competitive differentiators as the insurance industry evolves. Insurance By Judy Busby companies are connecting with individuals in new ways and working toward providing personalized and innovative customer experiences, while and Jessica DeMars streamlining internal processes. As organizations explore modernization initiatives and partner with insurtechs to develop cutting edge offerings, change management is playing a large role in effective implementation. In order to successfully adopt new processes and tools, it’s important to have the right talent in place to lead these strategic initiatives. Additionally, forward-thinking companies are creating a culture of change within their organizations to help ensure modernization efforts are embraced and 48 | INSURANCE JOURNAL | NOVEMBER 4, 2019

executed as smoothly as possible. This includes being thoughtful about specific transitions, as well as hiring and developing innovative talent that will lead future change.

Human Element of Change

Effective modernization involves much more than implementing a new system or process. Today’s leaders must not only plan the logistics of a transition, but also prepare their employees psychologically and emotionally for the change. Many professionals have a fear of failure and the unknown, sentiments that should be accounted for and acknowledged during this time. Similar to grieving, individuals commonly go through a certain process when faced with a major change. This change curve includes an initial reaction — often shock or denial — and disruption, which may manifest as fear or anger. The final two stages of the change curve are exploration and rebuilding. During these stages, the change is accepted and employees begin to commit to the new way of doing things. Rather than expecting employees

to embrace a new idea right away, anticipate these four stages and adjust your strategy and timing accordingly. At the same time, it’s important to have the right leaders in place to lead through the change. Without empathetic, emotionally intelligent and forward-thinking individuals spearheading the charge, it’s unlikely modernization efforts will be easily adopted by employees. These leaders should focus on the “who” just as much as the “what” and encourage both formal and informal two-way dialogue. Employees throughout the entire organization or department can be change advocates. In fact, there are typically three categories employees fall into during times of transition: early adopters, neutral individuals and resistors. Early adopters are excited about changes; they willingly embrace new concepts and actively take on challenges. Most organizations have a handful of these individuals; leverage their energy to build momentum and influence others, including their peers. The neutral — or wait and see — demographic, comprises the largest group and tends to adopt change when there is perceived personal gain. They can be swayed through incentives and influenced by early adopters. Resistors are the most difficult to successfully manage, as they are the least likely to adopt changes and can potentially create organizational roadblocks. Expect this group to question everything and to be skeptical of changes. Use their hesitations to your advantage. Talk with members of this group in private and ask them to share apprehensions and fears. Use this information to better position broader communication around the change and proactively mitigate concerns that might be raised by others. Communication and timing are key when undergoing technological transformations. Be transparent and provide as much information as you can up front. Share details about what a modernization initiative will entail including the timeline, and current and future impact on roles and responsibilities. By offering information, anticipating concerns and building INSURANCEJOURNAL.COM

‘Innovation and modernization can be ignited across the organization, from every level and department by intentionally planning for those who can affect, and who will be affected by, a change.’ momentum throughout the process, leaders will be able to cultivate a culture that embraces change and can effectively and efficiently adopt modernization projects.

In addition to successfully implementing and managing change, organizations must create a culture that encourages innovative thinking to stay ahead in today’s quickly evolving climate. Companies can gain inspiration from insurtech firms, which encourage agile and flexible environments focused on pushing boundaries. Consider your organization’s existing talent and grow those individuals into innovative leaders capable of leading modernization efforts, while identifying any gaps. Are they constantly curious? Can they translate technical language into common terms and articulate executable business strategies? Do they have a natural tendency to influence? When bringing in external talent, think outside of your organization’s standard talent pool to include individuals with the right skills and attributes to move your

company forward. These may be individuals from within insurance, insurtech or outside of the industry completely. Look for those who are solution-oriented, with a growth mindset and strategic vision. These characteristics and skills should align to your organization’s needs and overall strategy. Insurtech companies are also constantly innovating and coming up with new, more effective solutions. Incorporate some of these philosophies into your organization by inviting employees of all levels to contribute ideas. This could be through methods such as a world café or other structured discussion format. Provide prompts such as “Wouldn’t it be great if…” or “I wish my leaders would…” to provoke thoughts and conversation. Advance innovative thinking by inviting employees to contribute ideas for other functional areas and departments. Take this a step further by gaining outside perspective from customers. It’s easy to get caught up in deadlines and daily tasks. Set aside time for everyone within the organization to think about ideas and share challenges,

November 4, 2019

Sagamore Insurance Company 111 Congressional Blvd Carmel, IN 46032

CM Regent Insurance Company 300 Sterling Parkway, Suite 100 Mechanicsburg, PA 17050

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.

The above company has made application to the Division of Insurance to obtain a 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.

Ignite Innovation

INSURANCEJOURNAL.COM

solutions and opportunities. While change is often difficult, it’s necessary for staying relevant and successful. Innovation and modernization can be ignited across the organization, from every level and department by intentionally planning for those who can affect, and who will be affected by, a change. Insurance organizations that attract the right professionals, emphasize innovation and grow empathetic leaders will be best poised for future success. Busby, senior vice president, executive search and corporate strategy, and DeMars, vice president, talent partnerships, are both with The Jacobson Group, a global provider of talent to the insurance industry. Emails: jbusby@jacobsononline.com; jdemars@ jacobsononline.com.

Advertisers Index Abram Interstate www.abraminterstate.com W2 Applied Underwriters www.auw.com 2, 3, 52 Brecht & Associates www.brechtassoc.com SC4 Frenkel & Company www.cosmeticinsurance.com 39 Great American Insurance Group www.gaig.com 17 Hudson Insurance Company www.hudsoninsgroup.com 51 InsurBanc www.insurbanc.com 37 JM Wilson S2, M2 www.jmwilson.com Louisiana Commerce & Trade Assoc. www.lctacomp.com SC5, S3 M.J. Hall & Company www.mjhallandcompany.com W4 Midlands Management Corporation www.midlandsmgmt.com SC2 Monarch E&S Insurance Services www.monarchexcess.com W1 Nationwide Mutual www.nationwide.com 9 Pacific Gateway Insurance Services www.pgiainsurance.com W3 Philadelphia Insurance Companies www.phly.com 21 PSIC - Pacific Specialty Insurance Co. www.pacificspecialty.com 23 QBE www.qbededicated.com 7 Regions Bank www.regions.com 15 Texas Mutual www.texasmutual.com SC1 Texas Surplus Lines Association www.tsla.org SC3 The Hartford Insurance Group www.thehartford.com 5 United Fire Group www.ufgsolutions.com 11

NOVEMBER 4, 2019 INSURANCE JOURNAL | 49

Closing Quote 5 Ways to Protect Small Businesses Against Seasonal Risks

n a recent ing to the 2019 Small Insurance Business Risk Report Journal poll, only from Forbes Insights 12% of independent and The Hanover agents reported that Insurance Group. their small business Small businesses customers have also should consider By Christina Villena contacted them adding safety training about increased for seasonal workers. risks and exposures that arise Theft during the holiday season. With increased traffic and While alarming, it also is an sales over the holidays, unforimportant reminder of the tunately, comes an increased opportunity this presents for risk of theft — which also agents to deliver value to their was noted as one of the top customers, making them more five areas of risk by business aware of looming exposures owners in the same 2019 Small and mitigating their insurance Business Risk Report. Day-torisks. day inventory and customer By partnering with an independent agent, small business activity management often fall owners can better prepare for to the wayside due to heavier potential challenges during foot traffic, longer lines and what for many is one of the busy employees. Many small busiest times of the year. Below businesses may benefit from are five areas of increased risk the theft mitigation insights that agents can review to help and tips that may be available make the most of the season. through their insurers. The holiday season is an opportune

Seasonal Employees

Many small businesses hire seasonal employees to meet the increased demands. While many business owners can find themselves in a rush to hire staff and recognize these employees will only stay on for a short time, it is important they ignore the temptation to forego proper background checks. Temporary employees are both an asset and a liability to a business and business owners are well advised to plan for both. Insurance programs often offer discounts on background checks as a service to their customers. In fact, this offering was rated a top-valued risk management service by small business owners accord50 | INSURANCE JOURNAL | NOVEMBER 4, 2019

time for agents to help business owners reduce theft and boost the bottom line.

Slips and Falls

Slip and fall accidents — and the litigation that accompanies them — are both common and largely preventable. With people more distracted than ever, an increase in foot traffic, and more precipitation likely in many parts of the country, slips and falls are increasingly common during the holiday season. Small businesses can reduce the number of accidents by preparing their places of business through on-site logistics, like proper signage and maintenance adjustments, monitoring display to avoid tripping hazards, and making sure there is enough clearance between aisles. This way they are both taking preventative measures.

Cyber

Just as foot traffic picks up at the holidays, so does online shopping and the number of digital transactions. Not surprisingly, so does the risk

of cyber security incidents. The 2019 Small Business Risk Report also concluded that 67% of small business owners believe they are more vulnerable to cyber security breaches as they transition their businesses to be more digital. Experts are available to help with cyber risk management services focused on data breach preparation and remediation — so agents can help their customers understand their options.

Driver Safety

For small businesses that rely on delivering products to customers’ door steps or loading docks, some of the risks above can come into play — such as seasonal drivers, theft from vehicles, and slips and falls, for example — in addition to the worry of proper driver safety training. Just as small business owners should be sure to conduct background checks for new employees, they also should take the time to provide training for new drivers and perhaps take the opportunity to provide additional training for more experienced drivers. Busier roads, stressed and distracted motorists, and larger fleets of delivery vehicles on the road, combined with winter weather in colder climates, have the potential to significantly increase risks. As Small Business Saturday and the holidays approach, now is the best time to sit down with customers and explain the options available to help protect their businesses. Villena is vice president, loss control for The Hanover Insurance Group. INSURANCEJOURNAL.COM

Think again. Hudson has a seasoned team of professionals focused solely on trucking. We work closely with our commercial auto clients to customize insurance solutions to meet specific needs and help manage the total cost of risk. With 100 years of experience, more than $1 billion in gross written premiums and excellent financial security, Hudson is a long-term partner committed to helping its clients succeed. When you need coverage for the long haul, THINK HUDSON.

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