Insurance Journal West 2019-12-16 by Insurance Journal

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December 16, 2019 • Vol. 97 No. 24

Contents News & Markets

Idea Exchange

Special Report

Commercial Insurance Market Stable in 2020: A.M. Best

Special Report: How One Independent Agency is Changing the World

Applied Systems to Acquire Indio to Digitize Commercial Lines Sales

Special Report: California Agent Brings Christmas ‘Sparkle’ to Those in Need

U.S. Commercial Insurance Prices Were Up 4% in Q3: WTW

Special Report: City of Hope’s 2019 Efforts Raising Hope for Disease Cures

18 18

Fitch Sees Stronger Commercial Lines But Weaker Auto, Workers’ Comp Results Coming

Cryptocurrency Fraud Losses Surge to $4.4 Billion: CipherTrace Report

20 Strong Revenue Growth

for U.S. Public Insurance Brokers: Fitch

22 23

Special Report: The Charity Issue – Photos of Giving

33 Closer Look: Insurer Market Conduct Troubles Often Traced to Claims Handling Errors

Spotlight: Top 25 P/C Insurers’ Direct Premium Written Up 4.9%

When Words Collide: Resolving Claim Disputes Plead Your Case

The Competitive Advantage: The Power and Failure of Anecdotes

The Wedge: Why Hiring New Producers is Such a Crapshoot

44 47

Building Corporate Citizenship Programs that Attract Top Talent

Political Risk Losses Up in 2019, Hitting 68% of Surveyed Firms

4 | INSURANCE JOURNAL | DECEMBER 16, 2019

Ask the Insurance Recruiter: 5 Signs You Need Help for Client Service Openings

Minding Your Business: How to Lower Agency Value

A.M. Best Sees Personal Insurance Business Outlook Remaining Stable for 2020

Departments 6 Opening Note

What Captive Agents Transitioning to Independent Agents Should Consider in Agency Management Systems

Closing Quote: Build on Corporate Social Responsibility to Secure the Next Generation

10 Declarations

10 Figures

14 Business Moves

16 People

46 My New Markets

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Call 800.873.4552 Or visit ThinkPHLY.com/HumanService Non-Profit /For Profit Human Services I Mental Health I Substance Abuse I Home Health Care I Home Medical Equipment Philadelphia Insurance Companies is the marketing name for the property and casualty insurance operations of Philadelphia Consolidated Holding Corp., a member of Tokio Marine Group. All admitted coverages are written by Philadelphia Indemnity Insurance Company. Coverages are subject to actual policy language.

Opening Note Write the Editor: awells@insurancejournal.com

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

Giving Back

ince 2013, Insurance Journal editors have had the pleasure of publishing the very best news in the industry — the good news about good deeds happening across the world thanks to dedicated insurance industry professionals. We have enjoyed pulling together this special issue of Insurance Journal – The Charity Issue — that is filled with stories of charitable efforts by agents, brokers, and carrier partners. It’s always a difficult task to narrow down the stories to a number we could fit in this report, but it's a challenge we value. While the insurance industry financially supports many worthy causes year-round, insurance professionals often give much more than dollars. Sharing of money and time is not only important to the charity, but it’s critical to those who are giving, too. Research conducted by the Harvard School of Public Health shows that “people who volunteered spent 38% fewer nights in the hospital” than non-volunteers. Volunteering connects you to others, is good for your mind and body, brings fulfillment to your life, and can even advance your career! But this isn’t news to the insurance industry or to Insurance Journal. Derence Walk, Wells Media’s marketing director, is the most recent employee to launch his own nonprofit program in Peru. The “It’s Just a Dollar Foundation” collects $1 donations to buy computers for underprivileged kids. Once a year, the foundation will buy as many computers as possible, load them up with art, music, and educational programs, and hand-deliver them to underprivileged kids in parts of the world where access to a computer could make a big difference. This year, computers are being delivered to a small jungle community near Pichanaki, Perú. To learn more, give Derence a call. This is just one of many stories of charitable deeds done by the insurance industry. We hope you will be inspired like we have been by the industry’s generosity and kindness. We encourage all of our readers to give to others who might be without. To all of you who have given and will give, thank you. Best wishes to all for a happy holiday and a healthy and prosperous new year.

Andrea Wells Editor-in-Chief 6 | INSURANCE JOURNAL | DECEMBER 16, 2019

EDITORIAL

Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Elizabeth Blosfield | eblosfield@insurancejournal.com Southeast Editor/MyNewMarkets Amy O’Connor | aoconnor@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor L.S. Howard | lhoward@insurancejournal.com Columnists & Contributors Contributors: Brandon Davis, Gary Miller, Douglas A. Powell, Brad Whatley Columnists: Chris Burand, Mary Newgard, Catherine Oak, Bill Schoeffler, Randy Schwantz, Bill Wilson

SALES / MARKETING

Chief Marketing Officer Julie Tinney | jtinney@insurancejournal.com West Sales Dena Kaplan | dkaplan@insurancejournal.com Romeo Valdez rvaldez@insurancejournal.com South Central Sales Mindy Trammell | mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA, CT) Howard Simkin | hsimkin@insurancejournal.com Midwest Sales Lisa Whalen | (800) 897-9965 x180 East Sales (NY, PA and CT only) Dave Molchan | (800) 897-9965 x145 Sales & Marketing Coordinator Ashley Berg | aberg@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com Insurance Markets Manager Kristine Honey | khoney@insurancejournal.com Senior Strategist Pam Simpson | psimpson@insurancejournal.com Social Media Manager Ly Short | Lshort@insurancejournal.com Marketing Administrator Gayle Wells | gwells@insurancejournal.com Marketing Director Derence Walk | dwalk@insurancejournal.com

DESIGN / WEB / VIDEO

V.P. of Design Guy Boccia | gboccia@insurancejournal.com V.P. of Technology Chris Thompson | cthompson@insurancejournal.com Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Terrance Woest | twoest@wellsmedia.com Web Developer Ryan Kleshinski | rkleshinski@wellsmedia.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop | awaldrop@insurancejournal.com

ACADEMY OF INSURANCE

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

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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

United Way’s Annual Day of Caring 2019

Quenna, UFG Underwriting

It’s simple. Community matters.

Treat people the right way. It’s one philosophy that’s been at the heart of UFG Insurance since our founding in Cedar Rapids, Iowa, in 1946. We believe insurance is a people industry—whether we’re making sure the right coverage is there when communities need it most, or we’re making a difference in someone’s life through volunteer work. In fact, people are so important to us that we celebrate our employees and agents who give back with our annual Go Beyond award and a charitable donation to a nonprofit of the honoree’s choice. And, each year, every UFG employee is gifted time to volunteer in their community. We call it “the right way to do business.” #WeAreUFG

News & Markets Commercial Insurance Market Stable in 2020: A.M. Best

‘[I]mproved market conditions and solid levels of risk-adjusted capitalization that have helped insurers weather short-term profitability challenges.’

he market outlook on the U.S. commercial lines industry for 2020 is stable. according to analysts at ratings firm A.M. Best who cite “improved market conditions and solid levels of risk-adjusted capitalization that have helped insurers weather short-term profitability challenges.” The outlook considers rating activity and underwriting discipline as well as social inflation and uncertainty over emerging exposures including cyber liability. The new Best’s Market Segment Report, titled, “Market Segment Outlook: U.S. Commercial Lines,” notes that commercial lines pricing strengthened in 2019 and pressure on terms and conditions lessened. The report adds that workers’ compensation remains a “strong performer,” despite continued pressure on rates. There are some concerns, however. The impact of social inflation on losses and loss reserves for casualty lines remains a “key headwind facing the overall commercial lines segment,” according to 8 | INSURANCE JOURNAL | DECEMBER 16, 2019

A.M. Best. “Societal views of corporate liability, third-party involvement in litigation financing and the emergence of ‘reviver’ legislation extending the statute of limitations on sexual abuse claims have expanded the effects of social inflation into general liability and directors and officers liability,” the report notes. “Gauging how effective the industry’s actions will be in addressing social inflation will be difficult given that many of the factors driving it remain prevalent.” Other negative factors include property losses being above long-term averages and continued uncertainty about emerging casualty exposures such as cyber liability, opioids and e-cigarettes. On the bright side, A.M. Best believes the momentum of price increases across commercial lines is accelerating, with companies and producers reporting higher rates as 2019 played out. On the property lines side, the pricing actions reflect catastrophe losses in the U.S. and globally in recent years, with 2016 through 2018

exceeding long-term averages. However, reinsurers in 2019 have put forth higher rates and capacity restrictions to address loss trends. According to the report, some of the largest rate increases in 2019 fell to the commercial property sector. A.M. Best’s report outlines other factors that are driving its stable market segment outlook, including: • A.M. Best expects overall current market conditions — price increases and maintenance of discipline with respect to terms and conditions—to continue through 2020; however, the commercial automobile line remains challenged despite several years of substantial rate increases. • Although underwriting results have varied in recent years, due primarily to elevated catastrophe losses, overall operating and net results remain profitable; and • Industry surplus resumed an upward momentum in 2019, with the markets rebounding and lower reported catastrophe losses, and has surpassed its year-end 2017 level. INSURANCEJOURNAL.COM

Cheers!

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Figures

$200,000 The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) cited Arbre Group Holding — doing business as Holli-Pac Inc. — for willful and serious violations of workplace safety and health standards at its Holley, N.Y., facility. The company, which packages frozen fruits and vegetables for retailers, faces more than $200,000 in penalties.

$4.9 Million The amount of a jury award upheld by the Iowa Court of Appeals that had been given to a Texas woman — Brenda Alcala, a software consultant for Genesis Health Systems — after she slipped on ice and broke an ankle outside a Courtyard by Marriott hotel in Bettendorf, Iowa, in January 2010.

Declarations Louisiana Cyberattack

“Now that we’ve had this incident, does that put a target on our back, kind of, for more bad guys to hit our system?” — Louisiana state Sen. Sharon Hewitt, a Republican from Slidell, asked regarding the Nov. 18 cyberattack on Louisiana’s state government computer servers during a legislative committee meeting. Neal Underwood, Louisiana’s deputy chief information officer, replied that the state gets “thousands of attempts to access our system every single day, 365 days a year.”

10 | INSURANCE JOURNAL | DECEMBER 16, 2019

Midwest Flood Buyouts

“It’s the best decision we ever made.” — Tammy Kilgore, who, along with her husband, James, accepted a buyout of their often-flooded home in Mosby, Missouri. The city of Mosby estimates it’s faced 40 floods of varying severity over the past two decades. Kilgore said she has lost count of the number of times her home got wet.

Train Deaths

“There are few railroads you will find who have done more to mitigate these types of issues.” — Patrick Goddard, president of Florida’s new higher-speed passenger rail service, comments on the number of deaths involving the train, which travels at speeds up to 79 mph. The train has the worst per-mile death rate of the nation’s 821 railroads with 40 recorded since the train officially launched, or more than one a month. The majority of deaths have been suicides, while the others involved impatient motorists, pedestrians or bicyclists. The railroad will experiment with infrared motion detectors and drones to patrol tracks.

INSURANCEJOURNAL.COM

$450 MILLION

$10 MILLION

The amount for which more than 40 insurance companies have sued the federal government over the handling of a 2016 Tennessee wildfire that killed 14 people and destroyed or damaged more than 2,500 buildings in Sevier County. Insurers are seeking the funds for claims they paid after high winds brought flames from a wildfire at Great Smoky Mountains National Park into the Gatlinburg area. They alleged the park’s fire crew was not called in when the fire was first spotted, and the fire was not monitored overnight for five consecutive nights, causing it to spread.

The amount the maker of the popular video game League of Legends has agreed to pay to female employees to settle a broad gender discrimination case. Court documents show that Los Angeles-based Riot Games will pay about 1,000 current and former female employees who worked at the company in the last five years. The lawsuit claimed the company paid women less than men, passed them over for promotions and fostered a “bro culture” that excluded them.

Camp Fire Apology

“We remain deeply sorry about the role our equipment had in this tragedy, and we apologize to all those impacted by the devastating Camp Fire.” — PG&E, acknowledging the role of its equipment in a California fire that killed more than 80 people in 2018 and apologized.

INSURANCEJOURNAL.COM

Utter Disregard

“These defendants scammed insurance companies to cut costs in one of the city’s most dangerous industries with utter disregard for their employees’ lives.” — Manhattan District Attorney Cyrus R. Vance Jr. said in a press release regarding unlicensed labor broker Salvador Almonte Jr. and insurance broker Steven Asvazadourian, who were indicted in New York for allegedly underreporting the size

of Almonte’s companies and lying to insurance carriers about the work being performed by employees in order to evade more than $1 million in insurance premiums. This scheme left more than a hundred construction workers underinsured.

DECEMBER 16, 2019 INSURANCE JOURNAL | 11

News & Markets Applied Systems to Acquire Indio to Digitize Commercial Lines Sales By Andrew G. Simpson

eading insurance technology firm Applied Systems has agreed to acquire digital insurance technology startup Indio Technologies. The move will enable Applied Systems to offer Indio’s digitized commercial insurance application and renewal process to its 13,000 agency and brokerage customers and their business customers. Applied Systems plans to integrate Indio into its popular agency management system Epic. As part of Applied Systems, Indio will be able to have its insurtech product installed into more agencies and be able to expand its capabilities sooner than it could do on its own. Both firms are private, and neither would disclose the purchase price. They

hope to close the deal within a month. “What Indio allows us to do is to have a very, very seamless capture of customer risk data at time of renewal or application and seamlessly populate that data into the Epic agency management system. That eliminates double entry for customers, creating productivity for them,” said Applied Systems CEO Taylor Rhodes in an interview with Insurance Journal. “It’s a better customer experience because it takes steps out of what the customers need to do to get an application renewed or granted for the first time. When we talk about integration, we mean you don’t have to type things into more than one system, and the systems work well together.” Indio, founded in 2016 by Mike Furlong, Adam Bratt and Matt Watson, has raised $28 million in venture financing since its start. It is based in San Francisco with an office in Austin, Texas, and has about 80 employees. It says its 360 agency and brokerage customers include 40 of the top

100 U.S. based brokerages. After the deal closes, Indio will be run by Furlong as a division within Applied Systems and will be part of the company’s product strategy effort, according to Rhodes.

Indio Product

“Indio was founded on the belief that technology can make insurance processes faster and simpler while keeping customer experience as the number one priority for an agency,” said Furlong, chief executive officer and co-founder of Indio. Indio’s product speeds up and simplifies the largely manual, paper-and-PDF document-based process of completing carrier commercial lines applications, renewal forms and related documents. Indio promises not only a better experience for customers but also lower costs and reduced risk of errors and omissions for agencies. The software automatically digitizes all of the applications, maps the common data points between all of the forms and year over year, and reduces data redundancy. It then creates a link to a web page with instructions that help customers complete the documents online, asking only for information that is new or needs to be changed. “So instead of sending an email with 10 attachments, long explanations how to go through the documents, and what have you, the agent just generates a link from our system and sends it in an email to the customer. Then our system walks the customer, the

insured, through the application process in a wizard-like, sort of like a TurboTax-like manner,” explained Furlong. Applied Systems, based in University Park, Illinois, is majority-owned by investment funds advised by private equity firm Hellman & Friedman, which bought it in 2013 from the Bain Capital for approximately $1.8 billion. Last year, Google joined JMI Equity and Stone Point Capital as minority investors. Rhodes declined to discuss the payout but said his company has “plenty” of balance sheet strength pay for the deal. Asked about Google’s role in the deal, Rhodes said that while Google bought stock in Applied Systems last year, it is not a funder of this

acquisition. “Certainly, as owners, they participated in the diligence conversation and were excited about it. We have their backing,” he added.

How the Deal Happened

The Applied Systems-Indio deal came together over the past few months. Applied CEO Rhodes said his company was looking for ways to improve its commercial lines systems because it had been hearing from agents and carriers that they were frustrated with the costly and time-consuming sales application and renewal processes of dealing with customers and carriers. He said agents told him they want the process to be “more user-friendly” and able to drive productivity in revenues or costs or, ideally, both. Rhodes said that Applied Systems was aware that many of its agencies already use Indio as a separate system for commercial lines sales and those that did use it praised it. However, these agents that loved Indio said they would love it even more if it were not a point solution but were instead integrated into their overall Applied Systems Epic agency management system.

“What our customers want is to have Indio share data seamlessly back and forth with Epic,” Rhodes said. That was the catalyst for Rhodes contacting Furlong a few months ago to get to know Indio and its team. “As we developed our relationship it was just very clear that Applied with our large platform could really help the Indio team do what they’re doing on a bigger stage and accelerate their reach into the market,” said Rhodes. Furlong said he was not looking to sell Indio before Rhodes came knocking. “The business is growing extremely quickly, and I had no plans to sell and I don’t think we would have done it to anyone else but Applied. We have many mutual users with Applied and they love Applied,” Furlong told Insurance Journal. “When I met Taylor and looked at Applied as the market leader in the agency management systems space, it was clear to me that we could gain much faster and wider market share and adoption on our product…and Applied could help us realize our vision in a faster and more efficient manner,” the insurtech executive said. Rhodes said Applied is in a position to extend the digitization of the submission process beyond agencies and customers to carriers as well. Applied owns IVANS, a cloud-based software for connecting agents and insurers, which the company believes will be able to expand its data exchange capabilities with the addition of Indio. “Our vision here is an absolute endto-end digital process for commercial lines,” Rhodes said, describing a process that starts with simplified data capture with clients, then integrates that data with the agency management system, and finally extends that data digitally into the policy administration system on the carrier side. Connectivity with carriers also interests Indio and is something it has been

working on as well, according to Furlong. Power Move Rhodes took over as CEO at Applied Systems in June, replacing Reid French. Rhodes background is in cloud software having served as CEO of both Rackspace and SMS Assist. Rhodes said he believes the Indio deal is a “differentiating move” for Applied Systems. “If I were a competitor, I’d be worried about this move,” he said. “Indio is a power move for us,” he said. “It really is an exclamation mark on our industry leadership. I think it’s a big statement to our agency and broker customers on the one hand and carriers on the other that we want to continue to push forward and create value for them and to strengthen the relationship between carriers and the channel.” Rhodes thinks additional acquisitions in the insurtech space are likely. “I think what you’re seeing is a normal evolution in an industry that is just starting to wake up to the technology value as opportunity,” he said. “We want to be the place where insurtech creates value for our customers. We don’t want to be a sort of smug incumbent that sits back and let’s insurtech happens to us,” Rhodes said. While insurtechs continue to launch and form partnerships with insurers, reinsurers and agencies, there have only been a handful of insurtech acquisitions reported to date. Perhaps the most notable acquisition, announced last month, is Aon’s purchase of CoverWallet, a digital small to medium commercial insurance platform. It provides Aon with the opportunity to leverage CoverWallet’s platform to develop other digital client experiences. In August 2019, Insurance Technologies Corp. (ITC) acquired Ohio-based Smart Harbor, which provides smart forms, websites and data analytics to insurance agents. In 2018,The Hartford purchased Y-Risk, which has an online hub, gig. protect.com, that lets independent contractors purchase insurance and insurance agency Seeman Holtz Property & Casualty acquired online personal lines insurance agency Goji and its technology platform.

Business Moves

National

MetLife, PetFirst

MetLife has agreed to acquire PetFirst Healthcare, a pet insurance program administrator that distributes its products through animal welfare agencies, direct-to-consumer channels and employers. Indiana-based PetFirst underwrites and administers pet health insurance policies and claims on behalf of New Hampshire Insurance Co., The Insurance Company of the State of Pennsylvania, and Independence American Insurance Co. in approved states. Following the acquisition, PetFirst will continue to market pet insurance through animal welfare societies and its direct-to-consumer channel. Beginning in the summer of 2020, MetLife will offer this pet insurance to employers through its group benefits distribution channel.

East

AssuredPartners, Alton E. Woodford Insurance Agency

AssuredPartners Inc. has acquired Alton E. Woodford Insurance Agency Inc., located in West Hartford, Conn. The team of nine will remain under the leadership of Tallison Noble and Nerissa Smith following the acquisition. Headquartered in Lake Mary, Fla., and led by Jim Henderson and Tom Riley, AssuredPartners Inc. acquires and invests in insurance brokerage businesses in the property/casualty, employee benefits, 14 | INSURANCE JOURNAL | DECEMBER 16, 2019

surety and managing general underwriting space across the U.S. and in London.

Hub International Limited, StoneStreet Pearl River

Hub International Ltd. has acquired the assets of StoneStreet Pearl River LLC. Based in Pearl River, N.Y., and led by Barbara Delaney, StoneStreet is an independent firm providing retirement plan consulting services to defined benefit, defined contribution and non-qualified plans. Delaney will join Hub Northeast and will work with David Reich, national president of Hub Retirement and Private Wealth, and collaborate with Paul Collins, president and CEO of Hub Northeast.

World Insurance Associates, Bucci Insurance Group

World Insurance Associates LLC acquired Bucci Insurance Group of West Warwick, R.I. Founded in 1981, Bucci Insurance Group serves the New England community with personal, commercial and benefit insurance services. Bucci Insurance Group Broker Tony Bucci, COO Mary Pellegrino and their associates will continue to operate from their current location in West Warwick, R.I. Headquartered in Tinton Falls, N.J., WIA is an insurance brokerage.

JGS Insurance, John Manougian Insurance Agency

Jacobson, Goldfarb & Scott Inc. has acquired the John Manougian Insurance

Agency in Silver Spring, Md. Following the acquisition, JMI Founder John Manougian will remain as a consultant, while Chris Manougian and Robin Manougian will serve as vice presidents. They along with the rest of the staff will continue to operate from the agencyâ&#x20AC;&#x2122;s Silver Spring office. JMI will continue to operate as a wholly-owned subsidiary of JGS Insurance with Chris and Robin Manougian as the practice leaders. JMI is as an independent agency. JGS Insurance is as an independent insurance agency that is privately owned.

Midwest

Risk Strategies, Thomas McGee Group

Risk Strategies, a privately held, national insurance brokerage and risk management firm, has acquired Thomas McGee Group, a Missouri-based full-service brokerage with specialty capabilities for large accounts, group and single parent captives, and focused risk management services. Headquartered in Kansas City, TMG also maintains offices and operations in St. Louis. In its employee benefits and commercial lines business, TMG has specialty in group captive insurance programs. TMG has formed and manages self-insured pools. In its third-party administrator group, TMG provides loss adjustment services.

Accel Wealth Management, Premier Advisors

Accel Wealth Management LLC, a financial services division of Accel Holdings Inc., has acquired Premier Advisors LLC, an independent financial management consulting firm in Cedar Rapids, Iowa. The Accel Group, an independent insurance agency, has offices in Cedar Falls, Cedar Rapids, Coralville, Waverly and West Des Moines, Iowa. Premier Advisors will change its name to Accel Wealth Management and Premier Advisors team members will be joining The Accel Group staff in Cedar Rapids. The Accel Group is an independent insurance company that supports clients from locations across Iowa. INSURANCEJOURNAL.COM

South Central

World Insurance Associates, McMillan Insurance Group

World Insurance Associates LLC has acquired McMillan Insurance Group of Fort Worth, Texas. McMillan Insurance Group provides commercial trucking insurance products and services. World Insurance Associates LLC, headquartered in Tinton Falls, N.J., is an insurance brokerage.

Artex Risk Solutions, EWI Re Inc.

Artex Risk Solutions Inc., a captive and alternative risk transfer specialist subsidiary of Rolling Meadows, Ill.-based global insurance brokerage, risk management and consulting services firm, Arthur J. Gallagher & Co., has acquired EWI Re Inc., headquartered in Dallas. EWI offers reinsurance program design and placement services for captives and mutual insurance companies. Led by Steve McElhiney, the EWI team will report to Jennifer Gallagher, president of Artex’s North American operations.

Southeast

PointeNorth Insurance Group, Berger & O’Neal Insurance Group, Holmes-Shaw Agency

PointeNorth Insurance Group, LLC, an independent insurance agency in the Southeast, has acquired two additional insurance agencies in Georgia Berger & O’Neal Insurance Group and Holmes-Shaw Agency. Berger & O’Neal Insurance Group and Holmes-Shaw Agency will maintain their brands, teams and management. Both agencies have joined the PointeNorth Alliance. Michael Berger, former principal and president of Berger & O’Neal Insurance Group, is now a senior vice president of PointeNorth. Hugh Lee O’Neal, Jr., former principal of Berger & O’Neal Insurance Group, is a senior vice president of PointeNorth. Holmes-Shaw Agency specializes in life, health and disability insurance. David Holmes, former senior vice presINSURANCEJOURNAL.COM

ident and CFO of Holmes-Shaw Agency, is vice president of PointeNorth and senior vice president of the Holmes-Shaw Benefit Program. Roy Downey, former senior vice president and Secretary of Holmes-Shaw Agency, is vice president of PointeNorth and senior vice president of the HolmesShaw Benefit Program. J. Taylor Smith, producer of Holmes-Shaw Agency, now serves as producer for both PointeNorth and the Holmes-Shaw Benefit Program.

Patriot Growth Insurance Services, Shapiro Insurance Group

Patriot Growth Insurance Services, LLC, a national insurance agency, has added Shapiro Insurance Group to its platform. SIG is headquartered in Jacksonville, Fla.. Patriot is an insurance services firm that partners with employee benefits and property/casualty agencies across the U.S.

FedNat, 1347 Property Insurance

FedNat Holding Company has completed its acquisition of the homeowners insurance operations of 1347 Property Insurance Holdings Inc., consisting of Maison Insurance Co., Maison Managers, Inc., and ClaimCor LLC, in a cash and stock transaction valued at roughly $51 million. Maison is a property/casualty insurer focused primarily on coastal homeowners markets in Texas and Louisiana. Braun added Doug Raucy and Dean Stroud and their teams have joined FedNat. The $51 million purchase price was comprised of a 50/50 mix of cash and stock, including the issuance of 1,773,102 shares of FedNat common stock. FedNat is a super-regional insurance holding company. 1347 Property Insurance Holdings is an insurance, reinsurance and investment management holding company incorporated in Delaware.

EPIC, Prime Risk Partners

EPIC Insurance Brokers & Consultants and Prime Risk Partners Inc. have joined forces. The transaction previously announced on October 15 has closed. Prime Risk Partners will initially operate

as Prime Risk Partners – an EPIC Company. Prime Risk Partners’ leadership and insurance professionals will continue to provide service from their existing locations.

West

Alliant, Buck & Affiliates

Alliant Insurance Services Inc. has acquired Spokane, Wash-based Buck & Affiliates. Gary Buck, president and CEO, along with the entire Buck & Affiliates team, will join Alliant and continue serving clients from its Spokane headquarters. Buck & Affiliates provides insurance solutions with a large presence in the health and fitness industry. Newport Beach, Calif.-based Alliant provides property/casualty, employee benefits and other services.

A.J. Gallagher, Brown & Brown

Arthur J. Gallagher & Co. has completed a deal for the Pacific Northwest marine business team of Brown & Brown of Washington Inc. and to assume the associated marine book of business. The brokerage team handles marine insurance for a variety of maritime clients. Led by Graham Gardner, the team will operate from offices in Seattle and Newport, Ore., under Jim Buckley, head of Gallagher’s Northwest region retail property/casualty brokerage operations. Arthur J. Gallagher & Co. is a global insurance brokerage headquartered in Rolling Meadows, Ill.

Hub International, HMBD Insurance Services

Hub International has acquired Long Beach, Calif.-based Hamman-MillerBeauchamp-Deeble Inc. d/b/a HMBD Insurance Services. HMBD leadership Dan Roddy, President, and Vice Presidents Todd Miller, Travis England, Jay Semaan and Glenn Agoncillo, will join Hub California. HMBD is an insurance agency providing multi-line insurance solutions. Chicago, Ill.-based Hub is a global insurance broker providing property/casualty and other products and services. DECEMBER 16, 2019 INSURANCE JOURNAL | 15

People National

vice president and actuary for Cologne Re. Olsen is based in New York and reports to Mark Lyons, executive vice president and chief financial officer.

QBE Insurance Group has

appointed

Todd Jones

as CEO North America, succeeding

East Todd Jones

Russ Johnston who the com-

pany said has decided to seek opportunities outside of QBE. Jones joins QBE from Willis Towers Watson, where he was most recently head of Global Corporate Risk and Broking. Prior to that, he was CEO for Willis North America. Jones also previously held a number of senior roles at Aon in North America. The insurer said Jones commenced this role on October 1, 2019, with Johnston providing transitional support. Jones reports to Group CEO Pat Regan as a member of the Group Executive Committee and is based in the company’s New York office. Willis Towers Watson said it has appointed Adam Garrard as leader for the Corporate Risk & Broking segment, replacing Jones. Garrard had been leader of the International business.

American International Group announced Richard Olsen has joined the company

as chief actuary. In this role, Olsen leads the General Insurance global actuarial organization with responsibility for aligning property and casualty pricing, portfolio and reserving practices. Olsen brings 30 years of industry experience to AIG. Most recently, he was chief financial officer of Munich Re’s U.S. P&C reinsurance subsidiary. Previously, he served as head of Central Reserving at Munich Re and spent 21 years with General Re Corp. as senior

Cook Maran, a Prime Risk

partner headquartered in Melville, N.Y., recently hired Eric Patterson as a client advisor. He will operate out of the Cook Maran location in Fair Lawn, N.J. Patterson was previously a Professional Employer Consultant at TriNet Group Inc. in Edison, N.J. Cook Maran, which traces its roots to 1946, has almost 250 employees in eight offices in New York and New Jersey.

Concord Specialty Risk has hired Ilan D. Peress as vice

president and Reps & Warranty Insurance underwriter, where he will take on a leading role in Concord’s Reps & Warranty Insurance practice. Peress will be based in New York, N.Y. For the last two years, Peress has served as Reps & Warranty underwriting counsel for managing general underwriter Ambridge Partners. Prior to that position, he worked as a senior associate at KPMG, providing tax services to private equity and strategic clients in the Mergers & Acquisitions Tax Practice. Before his time with KPMG, Peress was operations manager at Tolt Service Group and Fujitsu, responsible for client management, personnel and budgeting. Boutique insurance recovery and entertainment firm Pasich LLP has expanded

16 | INSURANCE JOURNAL | DECEMBER 16, 2019

Peter Halprin

its national platform and New York footprint with the addition of Peter A. Halprin as a partner. Before joining Pasich LLP, Halprin was a shareholder in Anderson Kill P.C.’s New York office, where he served as deputy co-chair of the Cyber Insurance Recovery Practice. Halprin represents commercial insureds in complex insurance coverage matters, with a particular focus on recovery strategies in relation to captive insurance, cyber crime, natural disasters, professional services, regulatory investigations and technology disputes.

Southeast

PMA Companies Insurance Group has

named

Sabrina Mitchell

as Claims assistant vice Sabrina Mitchell president in the Southeast Region. Mitchell will be responsible for leading PMA’s Southeast Region insurance claims operations and will report directly to Ray DiCello, senior vice president and chief claims officer at PMA Insurance Group. Mitchell joined PMA Companies in 2004 as a Regional Claims supervisor and most recently served as a Regional Claims manager. Atlanta, Ga.-based INSUREtrust has hired Ethan Frymark as an account manager. Frymark is a recent graduate of the University of Georgia Terry School of Business Risk Management and Insurance program. Prior to joining INSUREtrust, Frymark worked at Equifax Inc. During his time at Equifax, he served as an IT Risk and Compliance intern.

ClearPath Mutual Insurance Co.

has appointed

Kim Sellers

as the comKim Sellers pany’s first production underwriter. Sellers will be based out of Burns, Tenn., and will handle agents in Kentucky and Tennessee. As production underwriter, Sellers is responsible for writing new business and retaining quality renewal business, along with managing and building relationships with agency partners. Sellers will evaluate new business submissions and renewal accounts to determine acceptability and the appropriate course of action based on company underwriting guidelines and risk selection standards. In her role, Sellers will travel to agencies and insureds on a regular basis to perform field underwriting and assist agencies with sales presentations. Sellers most recently held the position of workers’ comp production underwriter at FFVA Mutual Insurance of Maitland, Fla. Prior to FFVA, Sellers was a team leader and WC Underwriter at Crump Insurance Group.

South Central

IMA Inc., a national insurance broker specializing in property Donna Pankotai and casualty insurance, employee benefits and surety bonds, has added Donna Pankotai in its Dallas office as team senior vice president and director of Client Services INSURANCEJOURNAL.COM

within its property and casualty division. Before joining IMA, Pankotai was senior managing director for Risk Consulting Partners. Throughout her career, she has held numerous senior management positions with Lockton Companies, Aon and Sedgwick. IMA Inc. is a subsidiary of the IMA Financial Group Inc. Next Level Insurance Agency CEO Danny O’Connell has been elected as president-elect of the National Association

of Insurance and Financial Advisors – Texas (NAIFA-TX)

for 2020. He will continue to lead the organization as president in 2021. O’Connell has been on the association’s board since 2016, most recently as secretary/treasurer. He will follow former Texas Rep. David Farabee of Wichita Falls in the leadership position. Previously, O’Connell served on the board and as president of NAIFA-Dallas. Next Level Insurance Agency is based in Dallas and Addison, with a team that stretches from Florida to Colorado. Headquartered in Austin, NAIFA-TX was founded in 1925 with membership spanning the state. Dallas-based independent insurance brokerage firm

RHSB (Roach Howard Smith & Barton) has hired Cindy Ausmus as account manager

in its Personal Client Services department. Ausmus replaced long time employee Liz O’Neall who retired in September. Ausmus has more than 30 years of experience in personal lines insurance. She joined RHSB from the INSURANCEJOURNAL.COM

YES Insurance Agency, a small firm in North Dallas. Over the years, she has worked for Dexter & Co., Brookstone Insurance, Insurica Insurance and HRH Insurance. A member of Assurex Global, a privately held risk management and commercial insurance brokerage group, RHSB has offices in Dallas and Fort Worth, Texas.

managing the business by focusing on niche specialty markets and targeted distribution with opportunities for sustained profit and growth. Groenheide joins GuideOne from HDI Global Insurance Co., where he served as vice president of Engineering Lines North American Underwriting. Prior to that, he held senior leadership roles with Generali and Zurich North America.

Midwest

Dan Wolfgram has been

AmeriTrust Group Inc. in

Dave Sheeran

Southfield, Michigan, promoted Dave Sheeran, executive vice president of Meadowbrook Insurance, to president of the Meadowbrook Insurance Agency. Sheeran has been with Meadowbrook for 10 years. He brings an accounting background and knowledge of group health care benefits to the role. Sheeran has more than 20 years of experience working for insurance agencies. He began his career working in public accounting. His career also included stints as a controller for two Southeastern Michigan companies before he moved to insurance. Founded in 1955, AmeriTrust Group Inc. is a commercial insurance underwriter and insurance administration services provider. Mark Groenheide

GuideOne Insurance in West Des Moines, Iowa, has appointed Mark Groenheide as senior vice president of the Specialty division. In this role, Groenheide is responsible for growing and

named chief operating officer of Milwaukee, Wisconsinbased Badger

Mutual Dan Wolfgram Insurance Co., effective Dec. 2, 2019.

of responsibilities includes evaluating and addressing client risks, marketing and negotiating with insurers, preparing and presenting proposals, managing claims and coordinating client service. She has more than six years of experience in risk management and insurance. She was previously an account manager for Champion Risk & Insurance Services. Her past posts include serving as a client service manager at Arthur J. Gallagher Risk Management and a senior client service associate for William Gallagher Associates.

Valiant Insurance Services in California has named

Wolfgram has more than 30 years of experience in the insurance industry. A longtime employee of R&R Insurance Services Inc. in Waukesha, Wisconsin, Wolfgram began his career in the insurance industry as a personal line salesperson in 1987. He held various leadership and strategic planning roles, including personal lines manager and executive vice president of personal lines. Most recently, Wolfgram was named executive vice president of marketing at R&R Insurance Services in 2012.

an account manager. Rentis’ role entails brokering new business, servicing the renewal book and managing internal procedures. She will also be involved in both marketing and agency and carrier relationships. Rentis has eight years of experience in account management roles, from underwriting to account servicing and renewals. She was previously with DJM Insurance Services, and she was with Hub International before that.

West

Ontario Calif.-based

San Diego, Calif.-based Cavignac & Associates has named Jacquelyn Sousa as an account manager for the agency’s construction practice. In this role, Jacquelyn Sousa Sousa’s scope

Jennifer Rentis as

Jennifer Rentis

Roamnet Insurance Marketing

has hired Anthony Amorelli III as the new marketing manager. He will be reporting to Anthony Amorelli, the firm’s president, and will be responsible for new business development. He has previously worked at CompWest Insurance.

DECEMBER 16, 2019 INSURANCE JOURNAL | 17

News & Markets U.S. Commercial Insurance Prices Were Up 4% in Q3: WTW

.S. commercial insurance prices accelerated during the third quarter of 2019, as the aggregate price change reported by carriers exceeded 4%, according to insurance broker Willis Towers Watson. WTS’s Commercial Lines Insurance Pricing Survey (CLIPS) survey compared prices charged on policies underwritten during the third quarter of 2019 to those for the same coverage during the third quarter of 2018. Data for commercial auto, commercial property, excess/umbrella liability and directors and officers (D&O) all indicated significant price increases. The survey reported price reductions for only one

line — workers’ compensation — although the reductions were more modest in the third quarter than in prior quarters. Price changes were more pronounced for large accounts than those reported for small and mid-market accounts. Specialty lines price increases also trended upward significantly, WTW said. “This quarter we saw the largest overall price shift since 2013,” said Alejandra Nolibos, senior director, Insurance Consulting and Technology, Willis Towers Watson. “Price increases for D&O liability are well into the double digits, with employment practices liability and medical professional liability also showing sizable upward shifts. Commercial auto did not

let up, with insureds looking at double-digit increases again.” Nolbos said the survey confirms that insurers have been responding to worsening loss trends across affected lines through pricing, while other sources suggest terms and

conditions have tightened. “The question is whether and when workers compensation loss trends will turn, too,” she said. CLIPS data are based on both new and renewal business figures from carriers.

Fitch Sees Stronger Commercial Lines But Weaker Auto, Workers' Compensation Results Coming

he U.S. property/casualty insurance sector should see small improvements in underwriting profits in 2019 and 2020, thanks largely to commercial lines price increases, Fitch Ratings predicts in a new report. But personal auto and workers’ compensation will be two lines that buck the trend as they weaken through next year, Fitch said. “Rising premium rates in many commercial lines segments should benefit underwriting profits modestly,” Fitch Managing Director Jim Auden said in prepared remarks. “As that trend accelerates, loss cost trends including disruption from rising litigation costs and

social inflation in the liability space and the ever-present risk of catastrophe losses are issues to watch.” Fitch said it expects pricing changes to moderately outpace loss costs in 2020, leading to a projected 97.0 industry combined ratio in 2020, compared to Fitch’s predicted 98.0 combined ratio for 2019. Commercial lines market rate hikes have trended higher for eight consecutive quarters, according to statistics cited by Fitch, including a 6.2% jump in the 2019 quarter. Fitch cites changes in risk appetite and underwriting limits from several large underwriters in longer tail casualty and large account property business as

18 | INSURANCE JOURNAL | DECEMBER 16, 2019

reasons for the steady increase. The outlook for workers’ compensation and personal auto is not as bright, however. According to the ratings agency, workers’ comp rates have declined for almost five consecutive years (although it remains by some measures as the most profitable commercial lines segments.) Personal auto insurance pricing “appears to have peaked” after a number of years of strong pricing and underwriting decisions that returned the segment to profit in 2018 and 2019, according to the ratings agency. Things changed, at least in terms of premium increases. “Premium rates have now

flattened,” the Fitch report noted about personal auto trends. Direct written premium for U.S. property/casualty insurers should grow by nearly 5% in 2019 and 4.4% in 2020. Net written premiums will grow by 2.5% for 2019, down from 11% in 2019. Net premiums will grow by just under 4% for 2020. Investment income will remain relatively flat in 2020, with portfolio yields hovering around the 3% range. Full year insured losses from cat events should be slightly below the historical norm of 4% in 2019. Insured cat losses hit at 5% of premium in 2018 and 10% in 2017. INSURANCEJOURNAL.COM

News & Markets Study: California Self-Insured Employers Save Over Traditional Workers’ Comp By Don Jergler

new study on California workers’ compensation shows the cost of self-insurance is 14% to 28% less than a traditional workers’ comp policy. It should be noted that the study was commissioned by the California Self-Insurer’s Security Fund, and it was conducted by Bickmore Actuarial. It examines costs for 14 California self-insured employers across a variety of industries and with different self-insured retentions. The study shows the cost of self-insurance is 14% to 28% less than a traditional workers’ comp policy and that self-insured employers receive an average savings of 21%. The savings are driven mainly by the reduction in commissions, profit, marketing and administrative and overhead costs

found in traditional insurance policies, according to the study. The 14 self-insurers evaluated are in a variety of industries that retained more than $150 million in annual workers’ comp loss and allocated loss adjustment expense, and the self-insured retentions of those included in the report ranged from $250,000 to $2.5 million. The self-insurance savings are largely driven by the reduction in commissions, insurance company other acquisition costs, and insurance other/general expenses, which include premium tax. For 2017, the California Workers’ Compensation Insurance Rating Bureau has estimated these costs to total 18% of premium. The study adjusts for the estimated cost of excess insurance purchased by the self-insurer, self-insurance assessments from the California Department of

Industrial relations, and charges by the California Self-Insurers’ Security Fund. Mark Walls, vice president of communications and strategic analysis for Safety National, believes there’s no question that fixed costs for self-insurance are lower, and the expectation is the claims costs should be lower also. “The report focused on the fixed costs associated with self-insurance which are the costs of the insurance and claims administration,” Walls said. “It appears the report assumed the costs of the actual claims would be a constant. However, my experience is that companies that retain risk through self-insurance tend to experience lower claims costs as well. When every dollar is yours, and you are taking care of your valued employees, you have a sharp focus on getting the best possible outcomes on your claims.”

Officials Say Regulation Standards Factor in Alaska Quake Damage

ssessments following Alaska’s enormous 2018 earthquake showed building damage was worse outside Anchorage’s safety area because of reduced regulation, municipal officials said. There was less structural damage in the Anchorage Building Safety Service Area than in the Chugiak-Eagle River area during the 7.1 magnitude earthquake in November 2018, the Anchorage Daily News reported. The safety area covers the Anchorage Bowl south of Eagle River and north of Girdwood. Officials issued 52 notifications indicating severe building damage that prevented occupation in Chugiak-Eagle River, while only 17 were issued in the Anchorage safety service area. A year after the quake, city inspectors have gone through 3,800 buildings in the municipality, officials said. Builders outside the safety area can hire private inspectors and do not need to have plans reviewed, officials said. “The reason they had all the damage in W2 | INSURANCE JOURNAL | DECEMBER 16, 2019

Eagle River is nobody was looking,” said Don Hickel, lead structural inspector for the municipality of Anchorage. “And that’s pretty self-evident.” Proponents of the independent inspection process said the model is equally effective as the system in the safety area and less expensive for home buyers. Some builders also argued the quake struck harder in Eagle River and Chugiak. “The ground movement was drastically different in different parts of Anchorage and Eagle River,” said Chuck Homan of home remodeler Homan Inc. “I just think it was the way the earthquake hit certain areas.” A report written by seismologists for the Alaska Earthquake Center and published by the University of Alaska Fairbanks found “higher rates of building damage outside of the Anchorage Bowl do not

appear to correlate with higher ground motions.” Troy Bloxom, a private inspector, believes the municipality is using the situation to expand its safety service area. “I honestly think the municipality would love to incorporate Eagle River into the service area, because they need the funds,” he said. “Whether or not their numbers are accurate, that’s up for debate.” Copyright 2019 Associated Press. All rights reserved. INSURANCEJOURNAL.COM

News & Markets

Cryptocurrency Fraud Losses Surge to $4.4 Billion: CipherTrace Report

ryptocurrency theft has surged in 2019 compared with last year, with more money flowing through digital exchanges and criminals looking to carry out bigger heists, according to a report from blockchain forensics company CipherTrace obtained by Reuters. Losses from digital currency crime soared to $4.4 billion in the first nine months of the year, up more than 150% from $1.7 billion in all of 2018. “The 150% increase in crypto theft and fraud reflects how criminals are adapting for bigger and better scores,” Dave Jevans, CipherTrace chief executive officer, told Reuters. “Criminals chase money and the money is right here and ripe for the taking. Little attacks are often easy to defend against, but targeted

INSURANCEJOURNAL.COM

attacks are far more lucrative,” he added. Cryptocurrencies have attracted intense regulatory scrutiny around the world, as developers and market participants in the space seek to push this asset class into the mainstream. Two large thefts were the main drivers for the surge this year, CipherTrace said. One of the frauds saw users and customers lose $2.9 billion from an alleged Ponzi scheme involving crypto wallet and exchange, PlusToken. The other big fraud this year was the $195 million that customers lost from Canadian crypto exchange QuadrigaCX following the unexpected death of its 30-year-old co-founder and CEO, Gerald Cotten. “Even without the two

biggest thefts and scams, we are still witnessing many multi-million dollar crimes,” Jevans said. “There is a relatively consistent increase in criminal activity year over year and we don’t expect that to change overnight.” He added that crimes valued under $5 million are often underreported, as exchanges and police teams focus on the bigger more existential threats to businesses. CipherTrace reported that the sector saw just $15.5 million in quarterly thefts and scams in the third quarter, the lowest in two years. Jevans said that while the industry may be seeing fewer reported attacks, criminals were still making out with “bigger wheelbarrows of cash.” CipherTrace had previously noted that the type of crime in

the crypto sector had shifted from thefts to exit scams and other frauds perpetrated by insiders, which showed exchanges have become tougher for criminals to hack. “Today’s attackers are patient and willing to spend more time waiting for a payout,” said Jevans. “Not only have we seen more and more $100 million thefts and scams, those responsible are acting carefully, only cashing out small amounts to stay under the radar.” The report also showed that of the top 120 global crypto exchanges, 65% have weak know-your-customer requirements. “It will no doubt have implications as regulators seek to have KYC information shared globally,” said CipherTrace.

DECEMBER 16, 2019 INSURANCE JOURNAL | 19

News & Markets Fitch Sees Strong Revenue Growth for U.S. Public Insurance Brokers

ublicly traded U.S. insurance brokers are expected to produce strong revenue growth for 2020 given near peak level organic growth and favorable U.S. commercial lines insurance pricing trends. Further, margins remain consistent with investment-grade ratings and are expected to be stable-to-modestly improving in 2020, according to Fitch Ratings’ 2020 U.S. Insurance Broker Outlook report. “Fitch forecasts a stable operating environment for the insurance broker sector. Although profitability levels and organic revenue growth may be at or nearing peak, strong cash flow continues to support servicing of debt obligations,”said Martha Butler, senior director, Fitch Ratings. Butler said that while financial leverage is expected to decline for several brokers it covers, Fitch has incorporated these lower targets into current ratings.

Fitch’s sector outlook for U.S. insurance brokers remains stable supported by strong organic revenue growth and continued favorable profitability. Earnings stability going forward is expected given diverse product and geographic platforms, strong customer retention and technology investments to leverage the industry’s value proposition. Fitch said its rating outlook also remains stable, meaning there is limited potential for rating changes over the next 12-18

months. The sector’s balance sheet strength and operating performance support current ratings. Any potential actions on individual brokers would reflect performance around financial leverage, as measured by debt/EBITDA, the report added. Fitch’s analysis is in line with the thinking by investment analysts at Keefe, Bruyette & Woods in a recent comment on insurance brokerage Brown & Brown. “Margins for insurance carriers are under pressure as current loss trends worsen and favorable prior year reserve development fades. Carriers respond by raising prices — the benefits of which accrue directly to brokers who collect commission on higher prices but don’t pay claims,” the KBW analysts said, adding that they expect pricing improvements to continue into 2020, which should translate into improved organic revenue growth.

A.M. Best Sees Personal Insurance Business Outlook Remaining Stable for 2020

.M. Best has maintained a market segment outlook of stable on the U.S. personal lines industry for 2020, citing a significant decline in catastrophe activity, profitable underwriting performance in the private passenger auto segment and the sector’s overall strong risk-adjusted capitalization levels. A new Best’s Market Segment Report, titled, “Market Segment Outlook: U.S. Personal Lines,” states that following record-breaking catastrophe activity in 2017 and above-average storm losses in 2018, the personal lines industry had a breather in 2019 despite threats from numerous storms. Notably, the decline in catastrophe activity has benefited the homeowners segment. Underwriting

20 | INSURANCE JOURNAL | DECEMBER 16, 2019

actions taken by management teams— through enhanced pricing segmentation, rate increases to match risks and overall improved exposure and concentration management—have also better positioned the segment for continued success. According to the report, results for the private passenger auto segment continue to benefit from a stabilization in loss cost trends and underwriting initiatives focused on rate adequacy. While ongoing severity trends are likely to remain elevated given medical severity and high costs for auto repairs, the reduction in frequency has resulted in a general flattening of rates. This could be short-lived, however, as frequency patterns can change quickly. The report outlines other factors that are driving the stable market segment outlook. Insurtech in the auto market will continue to gain traction, with enhanced sensors

collecting more data that can be used in predictive analytics, underwriting decisions, claims reporting and overall pricing of risks; A significant increase in unrealized capital gains, combined with underwriting profitability and favorable investment returns, allowed surplus to reach record levels in 2019; and an increased focus on data analytics, pricing segmentation, exposure management and ongoing leveraging of technology.

INSURANCEJOURNAL.COM

Special Report: The Charity Issue

How One Independent Agency is Changing the World By Andrea Wells

terling L. Hammack, Jr., the founder of Professional Insurance Associates (PIA) in San Carlos, Calif., was an extensive world traveler. During his life, Sterling visited over 100 countries, including Africa, often with his wife Paula. After Sterling passed away from a long battle with cancer in January 2010, Paula wanted to honor Sterling and his passion for the world by establishing The Sterling L. Hammack Foundation. Founded in 2011, The Hammack Foundation supports communities in Kenya and other parts of Africa by providing funding to support basic human life needs, includINSURANCEJOURNAL.COM

ing health care, potable water, energy and education. The foundation strives to improve living conditions, says Paul Hammack, president of PIA and the son of Sterling and Paula Hammack. The foundation’s projects include drilling water wells, creating water catchment systems, building schools, building teacher and student housing, and building medical clinics. In addition to these projects, the foundation also provides scholarships to help students from primary school through college. Paul says his mother had visited Africa, often with his father, more than 30 times prior to starting the foundation. “Through her visits, she got to know many of the guides

and villages,” he said. Today, PIA is the primary funding source for the foundation. The foundation also receives donations from family, friends and other sources. Paul says the foundation is very hands-on, and Paula plays a key role in how the money is distributed and for what projects to support. “The agency looks at the needs and how we can help,” he said. “Right now, there are a couple of classrooms and student dormitories that need to be constructed, for example,” he said. Aside from private donations, the foundation has held a fundraising golf tournament in the past to support efforts, he added. Much like the privately held, family-run insurance

agency Sterling founded years ago, The Hammack Foundation is a family affair. Last year, Paul and his daughter visited Africa to see first-hand how the foundation is making a difference. Supporting charitable efforts is in the family genes, Paul says. “We’ve always supported charities through church organizations and other small scale events,” he said. “But for my mom, the idea to create a foundation for Africa came from her and my father’s travels,” he said. “She saw they are often missing very basic needs; they have no utilities, no running water.” Learning about those communities inspired Paula and the agency to make a difference by creating the foundation, he added.

DECEMBER 16, 2019 INSURANCE JOURNAL | 21

Special Report: The Charity Issue California Agent Brings Christmas ‘Sparkle’ to Those in Need By Amy O’Connor

small toy drive insurance agency owner Samantha Tradelius started after reading “Dear Santa” letters from kids in need many years ago has turned into a full-blown community effort helping hundreds of people in three California cities. The Sparkle Foundation, a 501(c)(3) founded by Commercial Coverage Insurance Agency owner Tradelius in 2015, has adopted 65 families of single mothers this holiday season. Each family chosen has sent Sparkle a “wish-list” of items so they can have a very special holiday. “We will be attacking the project of helping these single mothers and their children in the San Francisco Bay Area, Sacramento and Los Angeles,” Tradelius said. Working with the local communities around these cities and their law enforcement, the Sparkle Holiday Gift Drive kicked off Nov. 7.

Since then donations for 217 individuals have been pouring in and volunteers have worked tirelessly to sort, wrap and deliver gifts to the families. On Dec. 14, more than 300 volunteers came out to help with the wrapping and gifting of more than $70,000 in donations. “So many community businesses, and people come together to make this happen,” Tradelius said. Sparkle’s efforts have been assisted by her family’s companies, Strickler Insurance Agency in Tarzana Calif., and Lytespeed Learning Center, an online professional insurance education resource that offers pre-licensing and continuing education classes and programs. Others in the industry have provided help as well,

including Scottish American and The Hartford. Raised in Southern California, Tradelius has grown up in the insurance industry. She started teaching classes for LyteSpeed Learning when she was a teenager, then started her own insurance agency at the age of 24. Now, she co-owns Commercial Coverage Insurance with her husband, Paul, and runs the company’s San Rafael, Calif., location. Inspired by her grandmother who raised three kids as a single mom in the ’50s, Tradelius started The Sparkle Foundation to help struggling single moth-

ers. The foundation is run by a board of seven women, with Tradelius serving as executive director. In addition to the holiday gift drive, Sparkle raised enough money through events and donations in 2019 to send 75 kids to local enrichment programs and handed out 700 backpacks this school year. Tradelius said her grandmother worked several jobs to take care of her children. “I wanted to help those moms,” she said. “Sparkle isn’t going to change the world, but it provides a little bit of hope — or sparkle — for someone who needs it.”

‘Sparkle isn’t going to change the world, but it provides a little bit of hope — or sparkle — for someone who needs it.’

22 | INSURANCE JOURNAL | DECEMBER 16, 2019

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Special Report: The Charity Issue City of Hope’s 2019 Efforts Raising Hope for Disease Cures By Don Jergler

he City of Hope’s National Insurance Industry Council had another strong year of raising funds, holding events, and helping out people suffering from diabetes and cancer, according to Ken Birkett, director of development of NIIC for the City of Hope. “It was a very good year,” Birkett said. “We got much needed money to fund novel therapies that wouldn’t normally be funded.” The City of Hope is a renowned research institution offering treatments and working on therapies for cancer and diabetes, and since many of their therapies are novel or relatively untried, little funding comes from the government. The institution must instead rely heavily on philanthropic efforts like those of the NIIC. The NIIC consists of representatives from the property/casualty industry, law firms, brokers, accounting firms, reinsurers, executive placement firms and actuaries in the insurance industry. The NIIC raised roughly $1.1 million through nine events this year, putting it in the range of the average $1 to $2.5 million in charitable donations each year through fundraising events. Events this year included two golf tournaments, bowling tournaments, men’s basketball championship viewing parties, and the annual Spirit of Life Gala, held this year in New York at the J.W. Marriott Essex House on Nov. 13. Birkett reports that 250 people, largely insurance industry INSURANCEJOURNAL.COM

professionals, attended the gala to honor Alan Jay Kaufman, chairman, president and CEO of H.W. Kaufman Group, a diversified financial, insurance and real estate company. The company’s principal subsidiary, Burns & Wilcox, was founded in Detroit by his late father, Herbert W. Kaufman. Burns & Wilcox also held an employee giving program for the City of Hope this year and raised $86,000, and Kaufman himself matched that donation. The Spirit of Life Award gala is NIIC’s key annual fundraising initiative. Each year an honoree Alan Jay Kaufman, chairman, president and CEO of H.W. Kaufman is selected for work done in Group, was honored at the City of Hope’s Spirit of Life Gala, held this their profession and for their year in New York at the J.W. Marriott Essex House on Nov. 13. Left philanthropic efforts. The of him is David VanEgmond, a member of the J.W. Kaufman Group honoree is given The Spirit of board, and on the right is Ken Birkett, director of development of NIIC Life Award, City of Hope’s top for the City of Hope. honor. Past recipients include: Mike Miller, president and CEO • The facility was a pioneer bladder, gynecologic, oral and of Scottsdale Insurance Co.; in bone marrow and stem cell other cancers. Christopher J. Swift, chairman transplants, and has performed • City of Hope holds more and chief executive officer of The Hartford; and Tony Markel, more than 12,000 bone marrow than 300 patents, and submits and stem cell transplants. nearly 30 applications per the name and the man behind • Surgeons at City of Hope year to the Food and Drug building Markel Corp. Administration for investiga The City of Hope operates on have performed more than tional new therapies. a budget of more than $1 billion 10,000 robotic procedures for • Scientists at the facility prostate, kidney, colon, liver, per year, and employs roughly pioneered the 4,000. The Duarte, application of blood Calif.-based facility stem cell transplants has some impressive to treat patients accolades. Here are a with HIV- and AIDSfew: related lymphoma. • Numerous breakthrough cancer drugs, Researchers there including Herceptin, used a new form Rituxan and Avastin, of gene therapy to are based on technology achieve the first pioneered by City of long-term persistence Hope. of anti-HIV genes in • Millions of people patients with AIDSTony Markel, the name and the man behind building related lymphoma. with diabetes benefit Markel Corp., spoke at the City of Hope’s Spirit of Life This treatment from synthetic human Gala, held this year in New York at the J.W. Marriott insulin, developed ultimately may cure Essex House on Nov. 13. Markel is a former Spirit of through research connot only lymphoma, Life recipient. ducted at City of Hope. but also HIV/AIDS. DECEMBER 16, 2019 INSURANCE JOURNAL | 23

NATIONAL | Special Report | The Charity Issue

Frank Winston Crum Insurance FWCI has an enterprise philosophy of philanthropy with a primary focus on helping people who cannot help themselves. FWCI has supported the Tampa Bay community for more than a decade with a commitment to helping the homeless and hungry. The FrankCrum Golf Invitational began in 2007 to benefit Trinity Cafe in Tampa. Since then, the annual event has raised $1,348,723.

Lee Reed Insurance Lee Reed Insurance provided 50 backpacks stuffed with school supplies to area families.

Badger Mutual Insurance Badger Mutual attended Make-AWish Wisconsin's Walk for Wishes on Saturday, August 24. Throughout the summer, the company's employees rallied together to raise more than $20,000 to grant wishes for Wisconsin children living with life-threatening medical conditions. Specifically, the money raised granted the wishes of two kids battling acute lymphoblastic leukemia: Juniper, a 5-year-old from Milwaukee, and Harlow, a 9-year-old from Hartland.

York International York International is a sponsor of the Boys and Girls Club of Mount Vernon Thanksgiving Community Dinner. York employees and family members help shop, decorate, prepare and serve over 200 meals to the seniors, veterans and club members for the past eight years.

24 | INSURANCE JOURNAL | DECEMBER 16, 2019

AssuredPartners Indianapolis, Ind. AssuredPartners is not just in the insurance business. It is in the business of developing strong, lasting relationships, which include its employees, business partners and community.

Chubb In September, teams competed in the 20th annual Chubb Charity Challenge tournament finals, held at The American Club in Kohler, Wisc. This year, two teams tied for first place and were crowned champions of the annual event: Lloyd Sadd Insurance Brokers, playing on behalf of Little Warriors of Edmonton, Ala.; and IMA Select, playing on behalf of Hillcrest Ministries of MidAmerica Inc. of Kansas City. Each of the winning teams will present a $50,000 check to its chosen charity. In total, more than 300 teams participated, raising more than $1 million.

USI Insurance Services

USI has created a corporate social responsibility program known as USI Gives Back, where associates give back to their local communities. Since the program's inception in 2014, more than 7,000 employees have volunteered, impacting nearly two million lives. In 2019 alone, USI associates participated in more than 325 local community service events across the U.S. and Europe, totaling more than 24,000 hours of volunteerism.

AmWINS AmWINS Brokerage of New York Assistant Vice President Tracy Andrews ran the NYC marathon and raised more than $3,600 in support of the Pink Agenda. She did a fantastic job training for this race while working hard at her job and being a mom to 17-month-old Noah, who was cheering her on in NYC, along with her husband, Seth.

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Hunter Insurance

Hunter Insurance collected new, unwrapped toys for the Children's Wishes Holiday Toy Drive. Toys, including dolls, trucks, board games, DVDs, sporting goods and books, were collected for children ranging in age from 2 Â˝ to 18 years old. The nonprofit Children's Wishes provides life-enhancing experiences to children facing significant medical challenges.

LP Insurance Services LP Insurance Services WC Claims Specialists Christi Johnson and Claudia Aguilar volunteer at St. Vincent's Dining Room, which is a part of Catholic Charities in Northern Nevada.

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Lamb Insurance Services Lamb Insurance Services has given back more than $3 million in charitable contributions to its clients' causes and collectively volunteers for more than 500 hours annually, which is more than five hours per employee every year. Lamb has also established a Volunteer Committee. This group engages employees with volunteer opportunities throughout the year, including a November Month of Giving that includes employees volunteering with Share, a program committed to ensuring that no hungry individual or family is turned away from a food cupboard.

Worldwide Facilities LLC Worldwide Facilities participated in IICF's Week of Giving. The Anaheim and Irvine offices teamed up to volunteer in the Second Harvest Food Bank Food Distribution Center in Irvine, Calif. Together, the team bagged almost 6,000 pounds of onions and potatoes to be sent to local pantries where they will be distributed to Orange County residents who would otherwise go hungry.

South & Western South & Western continues to support Texas Little Cuties, a 501(3)(c) non-profit dog and cat rescue located near its headquarters in Dallas, Texas. It holds several fundraisers each year, where its employees enjoy donating much needed supplies and funds to this small all-volunteer shelter that brings a second chance at life for abandoned animals.

Chesapeake Employers Insurance Chesapeake Employers Insurance Company strives to positively impact the lives of Marylanders in need by supporting charitable organizations and causes that are based in Maryland or have a local chapter in the state. It volunteers its time, donates money, and provides resources in a variety of ways. This includes volunteering in the community, awarding grants to Maryland-based charities, holding food drives within its company, and supporting Kids' Chance of Maryland, a scholarship fund to benefit children of catastrophically or fatally injured workers in Maryland.

Harden For the past 30 years, Harden staff members purchased Christmas gifts and toys for the children in the Child Life Program pediatrics ward at University of Florida Health Hospital Jacksonville (formerly known as Shands Children's Hospital). Many of the children have been in the hospital for several months, some in transition from abusive situations, some in long-term physical therapy for injuries and post-surgical care, and some who have been so neglected that they must learn trust and affection. Each year, many Harden associates also volunteer to help wrap and deliver the gifts to the children at the hospital.

Atlas Insurance Agency Atlas Insurance Agency teamed up with Island Holdings (Island Insurance and Pacxa) for its Annual Halloween Party for the children at Kapiolani Medical Center. The party stirs up some emotions as the kids may come to the party connected to medical equipment or are visibly in a serious health condition, however, the joy the party brings to their faces is a remarkable sight and is a reminder of how brave these little keiki are. The purpose of this party is to help take their mind off of their medical challenges and discomfort by having some Halloween fun. The party featured Halloween themed games, crafts and much more entertainment.

DECEMBER 16, 2019 INSURANCE JOURNAL | 25

NATIONAL | Special Report | The Charity Issue

Higginbotham In 2019, Higginbotham sent 16 employees on a 10-day mission trip to Africa with the Zoe Empowers Program, which works to equip orphans and vulnerable children to overcome poverty. It's the first of a three-year commitment by which Higginbotham is sending a group with the program to witness how it helps children. This year's participants returned home with renewed hope that will spur all the firm's employees to support the fund. The fund was established in 2011 to engage employees in philanthropy. Since inception, the fund has raised $2.7 million and granted $2.2 million to nonprofits in its markets.

Heffernan Foundation Giving back to the communities it serves, whether through volunteer opportunities or donations, is a core value of Heffernan Insurance Brokers. Since its inception in 1988, Heffernan has given close to $12 million to charities.

Georgia Agency Partners Inc. Georgia Agency Partners Inc., (GAP) held their 4th Annual Charity Poker Tournament to benefit ALS Society of Georgia. GAP Partners along with our many carrier, broker and vendor partners enjoyed a great evening of Poker and partnership. GAP and our mutual partners raised over $60,000 for this great cause. GAP is proud to support ALS Society of Georgia.

Badger Mutual Insurance Since winter has decided to make an early appearance in the Midwest, Badger Mutual decided to tap into its holiday spirit! The Badger elves started their busy holiday season on Thursday, November 14, delivering dozens of homemade Christmas cookies to the hardworking officers at Milwaukee Police Department - Districts Two and Three to say thank you to all officers for serving and protecting their communities.

26 | INSURANCE JOURNAL | DECEMBER 16, 2019

HUB International Northeast Over the past nine years, employees from HUB International Northeast have supported various nonprofits to support the annual Insurance Industry Charitable Foundation Week of Giving. For the 2019 IICF Week of Giving from Oct. 14-18, HUB Northeast chose to again support Feeding America, whose mission is to collect food and deliver it to soup kitchens, food pantries, homeless shelters and other community food programs.

American Integrity Insurance American Integrity Insurance Group's philanthropic efforts have been ingrained within the company culture since its inception, a fact that became even more evident in 2019. Recognizing how blessed Florida was to escape the wrath of Hurricane Dorian, American Integrity employees wanted to give to those in the Bahamas who were devastated by the storm. The company contributed more than $50,000 to recovery efforts.

NetVU On May 21 at Accelerate, powered by NetVU, conference attendees came together in Cincinnati to give back to the local community. This annual event, Day of Caring, was coordinated by the U-VU Ohio NetVU Chapter.

Gowrie Group Every year between Nov. 1 and Dec. 1, Gowrie Group challenges local community of businesses to team together to raise money for The Shoreline Soup Kitchens & Pantries. This year, Gowrie Group set an ambitious goal of raising $175,000 for the SSKP. Gowrie Group has focused their charitable giving on supporting The Shoreline Soup Kitchens & Pantries every year since 2004, raising more than $1.6 million to benefit the SSKP.

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Stephens & Hobdy Insurance Susan Harris, a producer at Stephens & Hobdy Insurance, is a participant in Leadership Natchez. While touring the local food bank, The Stewpot, she identified a need for a meat slicer, brought this up to the office staff and the staff jumped on it. They decided to team up with the local Dairy Queen and purchased an industrial slicer just in time for Thanksgiving and the holidays.

National Council on Compensation Insurance On Nov. 15, the National Council on Compensation Insurance held its fourth annual Day of Giving. Over 400 employees spent their day volunteering at 14 nonprofit organizations throughout Palm Beach and Broward Counties. NCCI volunteers fanned out across South Florida, giving back to organizations including Boca Helping Hands, Child Rescue Coalition, Habitat for Humanity, the YMCA, and Sea Angels. Volunteer activities involved reading to elementary school children, cleaning our beaches, sorting and handing out food, refurbishing shoes, building homes, and more.

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Ross & Yerger Insurance Inc. Ross & Yerger is committed to charitable giving and sees the need to be a good corporate citizen as part of the firm's identity. Producers are given funds for the purpose of supporting local and national organization. The agency also provides funds to an employee-directed committee to give to local charitable organizations. The agency also allows each employee time during the work week to participate as volunteers. Volunteer opportunities include landscaping work for a local children's home, assisting elementary school children with reading, and volunteering to serve meals at a local homeless shelter.

AIS Auto Insurance Specialists AIS was active in philanthropy again this year. AIS's annual Day of Giving supported the Los Angeles Regional Food Bank. In addition to a financial donation, AIS employees worked assembly lines preparing thousands of pounds of groceries for children, families and seniors in our community. AIS raised over $5,000 on Red Nose Day to fight child poverty and helped to combat food insecurity for children in Southern California. AIS team members also participated in the Walk to End MS, raising close to $9,000.

The Leavitt Group of Boise The Leavitt Group of Boise recently implemented an initiative they call Leavitt Acts of Kindness. The goal was to bring joy and support to members of their community. One month they made goodies for delivery service people (USPS, FedEx, Amazon). Another project consisted of gathering essentials for a family whose home burned down. Their most recent project was partnering with the Idaho Anti-Trafficking Coalition to furnish a safe house and provide backpacks with personal care kits for women that have been victims of human trafficking.

Confie Confie contributes to several charitable efforts. For the third year in a row, Confie is a corporate sponsor of Toys for Tots, an organization that collects and distributes unwrapped toys to children during the holiday season. In previous years, Confie donated over $2 million in advertising services to help spread the word about the charity. It also donated over 2,500 toys for children to enjoy. As a part of the IICF Week of Giving, the company also hosted a Hygiene Build Kit event at its corporate office in Huntington Beach, where members of the community could get basic self-care supplies.

The Horton Group Part of the mission at Horton is to strive to be good for its employees and good for the community. Horton's Helping Hands is an employee-funded charity campaign where employees' time, talent, and dedication are invested in local causes to make a big difference. The ongoing focus of the program is to perpetuate the campaign and outreach to foster employee involvement while providing visibility, support, and transparency of our community involvement and charitable financial support.

HBT/Leavitt Group Every year Bob Klontz, Bill Cowart, and a group of employees join the Auburn Food bank to deliver Thanksgiving meals to shut-ins. The group prepares the meals, visits and brings happiness to the people in need. This year the firm started a new tradition to help out local charities. Each office was ordered a Christmas tree and a set of instructions. Each choose a charity, got a list of items the charity was in need of, and had a tree decorating competition using those items.

DECEMBER 16, 2019 INSURANCE JOURNAL | 27

NATIONAL | Special Report | The Charity Issue

ReSource Pro Over the last year, ReSource Pro's U.S.-based teams devoted time to painting homes for Habitat for Humanity of Lincoln, hosting 4 blood drives, and threw an ice cream social for 80 at-risk youth in New York City. It also partnered with the insurance fraternity Gamma Iota Sigma to create cards for patients at the Children's Hospital & Medical Center in Omaha, Neb. In ReSource Pro's China office, the team partners with Caring for Stray Animals to feed the animals and make repairs around the facility.

Ames & Gough Ames & Gough's McLean, Va., office worked with Doorways for Women & Families to adopt four individuals for the holidays. A giving tree was set up so its employees could purchase requested gifts of clothing, other necessities and gift cards for distribution to families at the organization's first annual holiday bazaar. Ames & Gough's Boston office worked wwith DOVE (Domestic Violence Ended) to adopt a family of four through DOVE's Holiday Assistance Program. The office purchased food, toiletries, clothing, and gift cards for the parent to buy children's gifts.

Arch Insurance Group/McNeil In August, members of the Arch Insurance Strategy and Distribution team along with senior leaders from McNeil & Co. partnered on a Habitat build in upstate New York. The site includes a home renovation and the construction of two new houses. Employees installed roof trusses for one of the new structures.

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Pennsylvania Lumbermens Mutual Insurance Co. The team at Pennsylvania Lumbermens Mutual Insurance Co. participated in the United Way Employee Giving Campaign. In October 2019, PLM supported local charities throughout the country and the United Way of Greater Philadelphia and Southern New Jersey Impact Fund with fundraising and volunteer activities. More than $175,000 was pledged to 200-plus organizations around the country.

Strategic Insurance Agency Alliance Over the last three years, SIAA raised more than $520,000 for organizations benefiting and assisting veterans and people battling cancer. Around Veteran's Day, SIAA issued a $15,000 match challenge to their member agencies, master agencies and partner companies. A total of $34,675 was raised for the Wounded Warrior Project. A Pink Evening in Boston with SIAA raised over $80,000 this year and $200,000 over the last three years for Dana-Farber Cancer Institute/The Jimmy Fund to fight cancer.

Pacific Specialty Insurance Company Pacific Specialty participated in the 2019 Smile Makers Angel Gift Project and have been involved with this charity since 2015. The Counsel on Aging gave the company a small stack of "Angels" that have the first name of the individual, their clothing size, age and what item they would like for the holidays. Employees choose an Angel (or more than one!) and go shopping for what they need. They are then delivered back to the Counsel on Aging in Orange County where volunteers wrap, deliver and help fulfill holiday wishes for a senior.

Ansay & Associates Ansay & Associates provides all associates four paid volunteer days each year to use toward the charity or community event of their choice. Ansay & Associates volunteers and donates to local charities by sponsoring and supporting community events like the UW-Madison Carbone Cancer Center 5K Walk/Run. The Humane Society, Big Brothers Big Sisters, Habitat for Humanity, United Way, Junior Achievement, Toys for Tots and Portal Inc. are other local community groups they support throughout the year.

Jackson Sumner & Associates Jackson Sumner and Associates employees choose the charity they wish to raise money for and holds several small fundraisers throughout the year for employees to participate in. There is a chili cookoff, cookie-grams, penny wars, an ugly Christmas sweater contest, an annual corn hole tournament and more to raise money. Last year, more than $4,000, was collected and matched by management. The company also does an adopt-ahighway litter clean-up twice a year, gives every employee five hours of paid volunteer service time off, and collected children's books for the iLead IIANC library drive and canned goods for the Brantley Center at Appalachian State University. INSURANCEJOURNAL.COM

UFG Insurance UFG Insurance provides time-off hours for each employee to use for volunteering. The company created its Go Beyond award in 2015, which gifts two nonprofits $5,000 each to honor the volunteerism of Go Beyond winners, like Mark Christman of AssuredPartners in Louisiana (pictured). Additionally, UFG sponsored more than 70 community-bettering efforts in 2019. Through its distracted-driving awareness program, UFG representatives have hosted more than 330 free educational sessions nationwide.

ABD Insurance and Financial Services ABD encourages its team to be actively involved in community and charity groups as donors, volunteers, and leaders. ABD's Giving Committee coordinates support for events including the IICF, the Foundation for Agency Management Excellence (FAME) Scholarship Program, annual Alzheimer's Association walk, annual on-site Red Cross blood drives, and more. In addition, ABD's annual Golf Tournament for The American Cancer Society has raised more than $350,000 in the last 10 years. ABD's charitable program Learning Without Limits partners with the Golden State Warriors to provide Bay Area youth with engaging educational experiences. Close to 2,000 students have had the opportunity to experience and learn Science, Technology, Engineering and Mathematics (STEM) as well as understanding the value of giving back. INSURANCEJOURNAL.COM

Fisher Brown Bottrell Insurance Inc. Fisher Brown Bottrell associates volunteered at the Mississippi Food Network (MFN) and helped prepare over 500 boxes of food for distribution. MFN is the only food bank in Mississippi and distributes nearly 2 billion pounds of donated food and grocery products annually to help feed the hungry.

NFP Numerous NFP offices around the country engaged in fundraising as part of a companywide initiative to raise awareness of Alzheimer's disease. Collectively, NFP raised $33,739 through fundraisers and Walk to End Alzheimer's events. In addition to participating in events, throughout 2019 NFP offered resources to employees to increase education surrounding Alzheimer's disease.

MAPFRE USA Fundaciรณn MAPFRE, a nonprofit organization created by MAPFRE that is active in 30 countries, teamed with the City of Boston on Look Both Ways, Boston, to reduce traffic-related fatalities and serious crashes and collisions. The kickoff event in September featured hands-on virtual reality driving stations and other interactive exhibits. Look Both Ways, Boston supports the City's Vision Zero plan and aligns with the Fundaciรณn's focus on prevention and road safety.

Midwest Employers Casualty At Midwest Employers Casualty (MEC), community service allows our employees to reflect on the difference they are making in society. By volunteering, our employees gain a greater understanding of their roles in the community as well as the impact of their contributions on those in need of service. Operation Food Search is a St. Louis-based non-profit organization dedicated to ending hunger in the greater St. Louis metropolitan area. Through their work, they serve an estimated 200,000 people in need each month. MEC employees organize campaigns to help Operation Food Search. Through contributions of time, food items, and financial donations, MEC employees give back to our community and lighten the burden on local families.

BRP Group Inc. After Hurricane Dorian caused so much devastation in the Bahamas BRP colleagues came together to gather supplies to help the region with its relief efforts. Numerous supplies were donated by BRP colleagues.

WCF Insurance WCF Insurance started the Legacy of Learning Scholarship Program in 1990 to give educational assistance to spouses and children of workers who lost their lives in compensable industrial accidents while working for WCF policyholders. The program helps people realize educational goals that, because of the loss of a breadwinner, they might not have otherwise achieved. With the presentation this year of 28 Legacy of Learning Scholarships, WCF has awarded over 1,200 scholarships in excess of $2.25 million since 1990. The scholarship recipients whose abilities and energy help them overcome life's challenges are inspiring.

DECEMBER 16, 2019 INSURANCE JOURNAL | 29

NATIONAL | Special Report | The Charity Issue

Western National Insurance Group Over the past decade, Western National has developed a community partnership with Bloomington, Minn.-based VEAP, a non-profit social services organization serving Twin Cities-area communities. Western National launched a program, Driving Away Hunger, in 2011 to annually donate a vehicle to VEAP to support its Transportation Program. In 2017, Western National assisted VEAP in obtaining its first Mobile Food Pantry. In 2019, Western National donated a 2019 11-passenger Nissan van to the organization to be used for various programs.

Gaspar Insurance Services The West Valley YMCA is a community-driven organization that Gaspar Insurance is proud to support. For many consecutive years, CEO Tim Gaspar has sat on the Board of Managers and helped sponsor various events. The main focus of the West Valley YMCA is to make a positive impact on the community. It accomplishes this through many programs geared toward health and wellness, families, and kids and teens.

Insurance Office of America Ronald McDonald House Charities was selected as the community outreach philanthropy for the IOA Western Region in 2019. IOA offices throughout the Western Region volunteered to prepare and serve lunch at several Ronald McDonald House locations, assisted with the Walk for Kids fundraiser in Orange County and sponsored and participated in the Trackman 28th Annual Golf Tournament in San Diego, among other volunteer activities. IOA has invested volunteer hours enhancing a home away from home place of relief for families of critically ill children in nearby hospitals.

Crane Agency Crane Agency's employees come together during the holidays and throughout the year to support several charitable initiatives. In 2019, Crane Agency raised funds and donated items to support multiple charities including Feed My People, Operation Food Search and the Toys for Tots Marine Drive. Earlier this year, employees participated in the STLIA School Supply Drive and collected more than 600 items to help local children in need. In November, volunteers partnered with UPC Heartland to help build a ramp at the Ferguson Community Market Garden.

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Texas Mutual Insurance Company Texas Mutual's community program, TXM for Texas, focuses on the communities where its employees live and work and supports organizations across Texas that are making an impact in their areas. Every fourth Thursday of the month, Texas Mutual employees staff and manage Central Texas Food Bank's largest mobile pantry in Austin, Texas. With Thanksgiving on November 28, employees stepped in to volunteer on a Monday morning to help families in need. Volunteers helped unload food and tables from the truck and distributed over 17,000 pounds of food. Senator John Cornyn stopped by to help pass out food and show his support.

The Plexus Groupe Associates from The Plexus Groupe's Corporate Office volunteered at Sleep in Heavenly Peace, a non-profit organization that builds bunk beds for children who don't have their own bed to sleep in. In July, Plexus associates and interns spent an afternoon preparing materials for the Build Day. The group finished enough bed components to complete the assembly of 25 beds. Leading up to the Build Day, Plexus associates spent several weeks fundraising and collecting contributions. With the matching company gift, Associates were able to reach their financial goal.

Assurance

Alliant Alliant employees nationwide joined in on the company’s first-ever World Food Derby. The companywide event, which centered upon World Food Day on October 16, yielded a bountiful harvest of results: more than $73,000 in combined cash and food donations, more than 1,400 total volunteer hours completed or pledged, hundreds of employee participants and more than 50 organizations served.

A particularly memorable charity event for many employees in 2019 was Assurance’s 10th makeover for Special Spaces Chicagoland. Special Spaces is a nonprofit that creates dream bedrooms for children with life-threatening medical illnesses. With Assurance’s monetary donation and employee’s time, a child’s bedroom is transformed into a place where a child can dream and imagine while addressing their medical needs. One Friday in May, Assurance employees put on their interior design hats and volunteered to makeover a bedroom for a young spunky girl, Siya.

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News & Markets Political Risk Losses Up in 2019, Hitting 68% of Surveyed Firms

survey of 41 major corporations by broker Willis Towers Watson found that 61% believe political risk levels increased in 2019 while 68% have actually suffered a political risk loss. Disruption of international trade was considered the most significant risk in the majority of regions, the survey found. Trade sanctions were cited by 58% of respondents as a concern for their operations in Europe, while 70% of respondents in Asia Pacific were worried about trade sanctions. For Russia and The Commonwealth of Independent States, the figure was 77%. Sanctions against Russia, Iran and Venezuela, a trade war involving China, and the threat of Brexit in Europe were reported as concerns by respondents. Concerns about political violence were the highest in Africa (74%) and the Middle East (71%), with respondents reporting that new technologies such as drone strikes could exacerbate such risks.

‘During 2019, there was an increase in the proportion of companies reporting that they had experienced political risk losses.’ During 2019, there was an increase in the proportion of companies reporting that they had experienced political risk losses. For example, 54% of respondents had experienced a loss due to political violence, compared to 48% in 2018, and 46% reported losses due to trade sanctions or import / export embargoes in 2019, compared to 2018’s figure of 40%. (See

graphic below for details of the types of political risk losses experienced by firms). At the same time, the Willis Towers Watson survey said, 32% of companies with revenues exceeding $1 billion reported experience of a catastrophic (more than $250 million) political risk loss. “It is clear from our survey that political risk continues to increase, and that related financial losses are on the rise,” said Paul Davidson, chairman of Financial Solutions at Willis Towers Watson, in a statement accompanying the survey results. “Corporations now face a strategic choice: to either maintain their global business models while accepting, mitigating or transferring the political risks associated with them, or attempting to realign them-

Types of Political Risk Losses experienced

2019

2018

Political violence or forced abandonment

54%

48%

Currency transfer restrictions or inconvertibility

50%

58%

Trade sanctions or import/export embargo

46%

40%

Expropriation or creeping expropriation

29%

25%

Sovereign non-payment

18%

Figure 1. Types of Political Risk losses experienced 32 | INSURANCE JOURNAL | DECEMBER 16, 2019

selves with the emerging shape of a new and apparently more nationalist global landscape.” The vast majority of respondents (71%) stated that emphasis on political risk management at their company had increased since 2018, and nearly 40% felt that they were facing more pressure from investors regarding political risk management. The survey found that recent developments such as the China-U.S. rivalry and the sanctions that have arisen as a result have made political risk more tangible. As in previous years, the study included follow-up interviews with a panel of survey participants. The panel’s top risks of concern included the following: • U.S.-China strategic competition • Middle East regional stability • Environmental/Social/Governance (ESG) shock. While this risk did not appear among the top ten in 2018, panelists indicated that rising tensions between business and society were increasingly leading to political risk events. INSURANCEJOURNAL.COM

Closer Look: Claims Insurer Market Conduct Troubles Often Traced to Claims Handling Errors By Jim Sams

istakes by claims professionals were the most common reason for enforcement actions against U.S. property and casualty insurers in 2018, taking the No. 1 and No. 2 spot on a top 10 list issued by the Wolters Kluwer consulting firm. In fact, five of the 10 top reasons documented by Wolters Kluwer involved errors in claims handling. The Boston-based compliance consulting firm reviewed every market conduct examination and enforcement action taken by state regulators in 2018, said Senior Compliance Counsel Kathy Donovan. The number of individual citations examined numbered in the hundreds, she said. “The claims area is one combined area that has many moving parts, many individual timeframes — timeframes that aren’t necessarily the same from state to state,” Donovan said. “So it’s no surprise at all that once again failure to acknowledge claims, investigate or deny claims, within specific time frames in the states certainly takes the top spot for the exam process for 2018.” In order of frequency, the claims-related mistakes that prompted sanctions by insurance regulators were for: • Failure to acknowledge, pay, investigate or deny claims within specified timeframes; • Failure to provide required disclosures in claims processing; • Failure to issue correct INSURANCEJOURNAL.COM

payments or denial notices; • Failure to process total loss claims properly; • Improper/incomplete documentation of claim files. Donovan said for property and casualty insurers, the commercial auto, personal auto, workers’ comp and homeowners lines drew the most enforcement actions. She said in personnel auto, several states have passed strict notice requirements, especially for claims involving total loss. In workers’ comp, states enforce deadlines to ensure injured workers receive wage-loss benefits. Donovan said many state insurance departments use an informal process to deal with complaints. Other states — notably California — perform dozens of market conduct exams each year. Not surprisingly, California was also the location for several of the examples Donovan mentioned when dis-

cussing the findings of Wolters Kluwer’s review during a webinar. The review found six instances where the California Department of Insurance cited an insurer for failing to disclose all benefits available under a policy or explain the coverage, time limits and other policy provisions, Donovan said. Also in California, citations were issued because the insurer did not notify claimants that the driver of an insured vehicle was determined to be principally at fault. “I see this year in and year out as a criticism in California automobile exams,” Donovan said. New Jersey was the source of other examples. In one instance, a carrier failed to notify a claimant that coverage for a rental vehicle was available. The carrier protested, saying it informs only its own policyholders if rental coverage is available, but the state examiner said there are no exceptions to the statute.

New Jersey also demands a thorough claim file. Donovan said one insurer was cited because its adjuster had not included emails concerning the claim in the file. The adjuster countered that the documentation was available within the company’s email server, but the examiner said all relevant documents must be in the file. Another issue cited by New Jersey regulators was examiners putting blank templates of required notices in the claim file with blanks where necessary information should be. Donovan said the examiner found that to be a violation because there was no evidence the required notice had been sent. Donovan said she hopes insurance carriers take note of the findings to improve compliance systems. “It helps insurance companies understand the operational challenges that other companies in their lines of business are suffering,” she said.

DECEMBER 16, 2019 INSURANCE JOURNAL | 33

Idea Exchange: Technology What Captive Agents Transitioning to Independent Agents Should Consider in Agency Management Systems

here’s a storm brewing for many captive insurance agencies and their agents, and that storm may be lengthy. By Gary Miller As an example, Nationwide is one of a number of captive insurance companies that are actively converting their captive agents to the independent model. Nationwide has announced and is actively shifting entirely to the independent agency distribution model with a projected completion date of July 1, 2020. If you are a captive agent with any company and are now facing the challenge of finding new agency management system

34 | INSURANCE JOURNAL | DECEMBER 16, 2019

software, selecting the wrong system may have injurious, long-term results to your business, so knowing the potential pitfalls and solutions is critical. The problem is that you don’t know what you don’t know, and it’s not your fault. Is there a Holy Grail available yet for a complete agency management system? Regardless of whether you are a captive or independent agent, let’s examine some essential components and relevant factors that should help you in your search for a new agency management system.

Security

First, software security should be your foremost concern. When evaluating agency management system software, at a

Your new agency management system should streamline your workflow, not cause bottlenecks. minimum, make sure your data is encrypted seamlessly with a high-level encryption called Federal Information Processing Standard (FIPS), a U.S. government computer security standard used to accredit cryptographic modules. What does that mean for your agency? That means even if your agency’s network is compromised, your actual data files are safe. Compliance is a vital concern for insurance agencies and you'll probably be under more scrutiny in the future as the indepenINSURANCEJOURNAL.COM

dent agency distribution model landscape grows. Make sure your data is protected “at rest and in motion.” When encrypted to the FIPS your clients’ Personal Identifiable Information (PII) and Personal Health Information (PHI) are secure. In addition, verify that all documents put into your new agency management system are encrypted to the same FIPS level. This means all data in every form in your new system is encrypted and protected. You need to decide what is the best working environment for your agency system from three distinct setup types. The three setups are: 1) Local computer install where everything (database and system) resides on a single computer; 2) Local network install where the database is located on a centrally managed server and your agency management system is located on workstations connected to the network; 3) A cloud install (data and system are on the cloud) which allows the user to access your system from anywhere they have an internet connection. What’s really important when choosing a company is that they should provide all three options for you. They should have the ability to easily and immediately convert your system’s setup at any time to fit the changing needs of your agency. If they don’t offer all three options? Keep looking. Buyer beware of “legacy” agency management system applications, meaning they were originally written years ago. Instead of updating their technology software, some software companies simply continue to patch and sell their old technology as new versions.

Ease of Use

After software security, the most critical factor to consider is ease of use. You can have the most secure system in the world, but if it’s too complicated and unwieldy, it will have a long learning curve, wasting too much of your time, and frustrating users. Ease of use with an intuitive system that has an exceptionally rapid learning curve is a very important factor during the INSURANCEJOURNAL.COM

final decision-making process. Your new agency management system should streamline your workflow, not cause bottlenecks. It should be intuitive, not only to IT departments or your admin, but for all users. It should provide full functionality for every aspect of conducting your business, not only for broad categories such as accounting, insurance documentation, sales management, etc., but for a multitude of sub-categories. A great agency management system should not require large amounts of time dedicated to the tech side but should allow you to focus your valuable time on your clients, building new business, and achieving even greater success. Speaking of your admin, if not you, they obviously should be heavily involved in the evaluation and final decision-making process. Your new system should have more features and options than you would ever expect to use, because in all likelihood, as your business continues to grow you will need some features later that you don’t need now. That being said, the new system should give the admin full control of customizing those screens, turning on or off the features as needed. The admin should also have complete customization control over the features accessible by each individual user. Does the software you are investigating require you to exit one system to access another? Keep looking, because that software is a time and money waster. A user should never need to leave the system to import or export data/documents or complete any other function. Also, email integration and mail merge should be a given within every component with the new system.

Support

Client support is an extremely important factor when choosing an agency management system. Look for a company offering the “Gold Standard” of client support which consists of four levels of on-going

support. Those four levels are: 1) An integrated help manual that consists of screen shots showing you step by-step instructions for all the various software functions and is available directly in the application 24/7/365. 2) An online help video library which takes the help manual a huge step further and consists of video clips with voice overs showing you step- by-step instructions for all the various agency management system functions. These videos should be accessible online 24/7/365 or directly from within the application 24/7/365. 3) An online support request system which allows you to email your questions to the company’s technical support team for answers. 4) A direct access support system which allows you to schedule a day and time for a member of the company’s techni cal support team to contact you, and with your permission, directly access your computer, showing you, as you watch, how they are resolving any issues you may be experiencing.

Additional Options

Finally, a deal-breaker factor in your decision-making process is what are your options after the installation if the software does not perform as promised? Any reputable company should offer you, at a minimum, a 30-day, money-back guarantee. If not, and they only offer excuses as to why they don’t offer a guarantee, then keep looking. If they are making excuses before the sale, just imagine what they will be like after the sale if you need help. If you make the right decision, your new agency management system should successfully support your business for decades to come. To borrow a line from the movie Indiana Jones and the Last Crusade, “Choose wisely.” Miller is the chief marketing officer for Trinilogics LLC. Email: gary.miller@trinilogics.com. DECEMBER 16, 2019 INSURANCE JOURNAL | 35

Spotlight: Top 25 P/C Carriers P/C Direct Premium Written Up 4.9%

irect premium written (DPW) for property/casualty insurance companies continues to increase, albeit By Douglas A. Powell gradually. At year-end 2018, total DPW for all P/C insurers aggregately increased approximately 4% over 2017, an increase of $33.3 billion. For year-end 2018, nearly $670 billion of DPW was reported, which was a record high for the industry. Through nine months of 2019, the insurance industry’s growth trend has continued, as DPW for all P/C insurers aggregately increased

approximately 4.9% over 2018. For the nine months ending September 30, 2019, P/C companies comprising the Top 25 insurers in terms of DPW growth increased their DPW 12.4 percent, or $8.6 billion, over the same period in 2018. This continues the Top 25 insurers’ impressive display of premium growth and financial stability. The Top 25 accounted for 35% of the growth in the P/C insurance industry’s DPW. In contrast, the remainder of the industry reported an increase in DPW of approximately 3.7%, or $16.2 billion, year over year. Although the market continues to exhibit signs of firming and DPW continues to increase, P/C insurers should not expect a

traditional hard market in the near future. More importantly, it is possible that the double-digit premium growth experienced in the historical hard market cycles may have created unrealistic premium growth expectations for this current recovery. It is more realistic that expectations should relate to gradual, stable growth. There is always a fair amount of uncertainty in making projections based on third quarter data, but if the industry continues to hold to its 10 year historical pattern, growth in 2019 would again result in the highest level of year-end DPW ever reported by the P/C industry. Powell is a senior financial analyst with Demotech Inc. Email: dpowell@demotech.com.

Top 25 Property/Casualty Companies Based upon dollar amount of direct premium written (DPW) growth.

Company Name

American Bankers Insurance Co. of Florida Allstate Fire and Casualty Insurance Co. Progressive County Mutual Insurance Co. Allstate Vehicle and Property Insurance Co. Travelers Personal Insurance Co. ACE Property and Casualty Insurance Co. United Financial Casualty Co. Progressive Direct Insurance Co. GEICO Casualty Co. Nationwide Mutual Insurance Co. USAA Casualty Insurance Co. United Services Automobile Association Zurich American Insurance Co. Factory Mutual Insurance Co. Auto-Owners Insurance Co. Nationwide Insurance Co. of America Ohio Security Insurance Co. Progressive Select Insurance Co. Starr Indemnity & Liability Co. Root Insurance Co. Farmers Insurance Exchange USAA General Indemnity Co. ACE American Insurance Co. Federal Insurance Co. GEICO Advantage Insurance Co.

DPW 9/30/2019

$3,976,892,448 $7,341,806,106 $2,800,581,767 $2,534,443,016 $691,592,732 $2,082,327,536 $1,728,089,396 $3,081,695,304 $4,112,863,741 $2,179,870,123 $5,560,290,640 $6,714,800,593 $4,945,647,501 $2,569,557,205 $3,079,623,973 $909,387,231 $2,022,579,772 $2,002,134,807 $1,699,247,947 $307,363,751 $3,907,580,618 $3,596,947,460 $3,822,493,027 $4,588,176,641 $1,668,766,509

Top 25 P/C Companies by DPW Growth $77,924,759,844 All Other P/C Companies $457,614,875,488 Total $535,539,635,332

DPW 9/30/2018

$3,265,832,320 $6,781,085,498 $2,291,205,276 $2,091,950,794 $294,054,181 $1,697,598,634 $1,355,619,425 $2,710,578,592 $3,743,044,280 $1,814,804,397 $5,202,532,648 $6,368,190,121 $4,615,714,589 $2,262,906,684 $2,791,333,021 $633,476,279 $1,765,193,366 $1,749,302,868 $1,446,913,522 $55,569,831 $3,661,256,287 $3,351,360,554 $3,580,175,495 $4,346,603,093 $1,428,365,272

$ Growth

$711,060,128 $560,720,608 $509,376,491 $442,492,222 $397,538,551 $384,728,902 $372,469,971 $371,116,712 $369,819,461 $365,065,726 $357,757,992 $346,610,472 $329,932,912 $306,650,521 $288,290,952 $275,910,952 $257,386,406 $252,831,939 $252,334,425 $251,793,920 $246,324,331 $245,586,906 $242,317,532 $241,573,548 $240,401,237

$69,304,667,027 $8,620,092,817 $441,377,354,224 $16,237,521,264 $510,682,021,251 $24,857,614,081

% Growth

21.77% 8.27% 22.23% 21.15% 135.19% 22.66% 27.48% 13.69% 9.88% 20.12% 6.88% 5.44% 7.15% 13.55% 10.33% 43.56% 14.58% 14.45% 17.44% 453.11% 6.73% 7.33% 6.77% 5.56% 16.83%

12.44% 3.68% 4.87%

Data Source: The National Association of Insurance Commissioners, Kansas City, Mo., by permission. Information derived from an SNL product. The NAIC and SNL do not endorse any analysis or conclusion based upon the use of its data.

36 | INSURANCE JOURNAL | DECEMBER 16, 2019

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Idea Exchange: Ask the Insurance Recruiter 5 Signs You Need Help for Client Service Openings

n 2020 the average time it will take an insurance agency to hire an experienced Account Manager will be three and half to four months. When I tell clients this, one of three responses follow:

Surprise: “Wow, really? I never would have guessed.” Confirmation: “Yep. I understand. It was the same way last year.” Fear: “Oh no! I better figure out a plan.” Experienced is the operative word. It will not take you as long to find CSRs, assistants and analysts with less than two years of career experience making less than $45,000. These candidates apply through job boards and attend career fairs. However, the more compensation and experience increases so does the challenge of finding qualified candidates because commercial P&C, employee benefits and high net worth personal lines account managers: • Do not apply as frequently through job boards. • Are categorized as passive job seekers. • Fall into a broad compensation range of $70,000-$175,000. • Job tenure is two to three times greater than CSRs and assistants.

5 Signs You Need a Recruiter’s Help for Client Service Openings Unique: This account manager role feels set apart, unusual and more challenging than previous openings. Examples can

include a) supports an executive producer’s book, b) the accounts are large and complicated, or c) there’s been retention or culture problems within your team. Capacity: 40-80 open job requisitions isn’t unheard of with larger regional brokers and are typically managed by much smaller HR departments than alpha broker’s talent acquisition groups. It’s hard to keep up with application flow, find time to recruit on more difficult postings and manage each interview process to the fullest. Location: The $150,000 account executive you need doesn’t exist in a 200-mile radius. Referral sources and your existing database are useless. You’re staring down the barrel of relocation candidates. History: Your last two $85,000 account manager jobs took four months each to fill. Your LinkedIn connections are tapped out, and you’ve tried to recruit everyone at a competitor. You want a faster fill rate on the next opening with a more diverse candidate pool. Structure: You’re not sure if the position requires a full-time employee. What if this turns out to be a 30 hour/week job or it’s on a new team that might not be stable enough for a permanent hire? Here comes contract and portfolio careers.

Emerging Client Service Roles

2020 Agency Client Service Recruiting Trends

My first response is any time but that seems a little self-serving, right?! My advice is to evaluate each job instead of making a sweeping generalization like, “We do or not work with recruiters.” Look at what makes sense – the position, location, capacity and cost containment. Find a trusted partner; an advocate who knows how to tell your agency’s story and is committed to the process no matter how long it takes.

Your 2020 motto should be: “If it requires insurance experience it requires recruiting.” • Client Service openings account for 60% of an agency’s recruiting time and cost. • 3:1 employee benefits to P&C job opening ratio. • $70,000-plus salary roles; expect a 90-120 day fill timeline. • Job boards are weakened after 30 days of posting. The most successful methods of sourcing service candidates are: Employee referrals; Direct Solicitation from Competitors; and Social Media

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Get ready for the migraines! If you have one of these openings on the horizon expect a more difficult search.

By Mary Newgard

Account Executive Roles + One

• Management/team leadership (the earth isn’t flat, but a lot of service teams are). • Consultants (leveling up the service team. The pivot from $100,000 AE to the $125,000-$175,000 earner)

Actuaries with a Personality

• a.k.a. analytics/mathematical geniuses/ Excel wizards who get out from behind a desk. • Most prevalent in benefits, agencies want highly technical employees in heavy client facing roles.

Non-Traditional or Vertical Product Lines

• Commercial P&C risk management divisions want account managers/account executives with niche expertise (healthcare, construction, transportation, environmental, cyber, management liability, so on and so forth)

When You Need to Call a Recruiter

Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. Email: asktherecruiter@ csgrecruiting.com.

DECEMBER 16, 2019 INSURANCE JOURNAL | 37

Idea Exchange: When Words Collide Resolving Claim Disputes:

STEP 4 Plead Your Case T

his concluding column of this series, Step 4 of the claim resolution process, addresses how you convince the insurer that a By Bill Wilson claim is covered, examining the balance between the role of policy language and the role of logic and reason, then wrapping up the entire series by returning to the first column which identified the two fundamental premises of claims resolution.

Language vs. Logic

The legendary Bob Smith, retired, of the Florida Association of Insurance Agents was known to say, “If you can’t argue the form, argue logic; if you can’t argue logic, argue the form.” The reality is (or should be) that, if you can only argue one of these, unambiguous form language should always rule. However, if you can argue both language and logic, your position is going to prevail, I believe, over 90% of the time. To illustrate when language and logic are at odds, take a homeowners claim involving the freezing of an outdoor hot tub water line and pump. The HO policy excludes such freezing damage but makes an exception if reasonable care was used to “Maintain heat in the building…or…shut off the water supply and drain all systems and appliances of water.” The insured did, in fact, maintain heat in the dwelling, which did nothing to for the outdoor plumbing. The adjuster made that logical argument that the exception shouldn’t apply. However, the policy language was clear the loss was covered. So, the carrier paid the claim and presumably later modified the form language to 38 | INSURANCE JOURNAL | DECEMBER 16, 2019

damage? Logic would dictate that “earth movement” doesn’t cover a single rock or airborne movement. In any case, the adjusters in both cases paid the claims.

Dalton’s 3 Rules of Claim Negotiation

reflect the more logical argument against coverage. The superiority of language over logic works both ways. Property stored outdoors within the fenced yard of a business was stolen. The property policy included theft coverage but also had a burglary protective safeguards endorsement attached. The adjuster determined the burglar alarm on the building was not functional at the time of the theft and denied the claim. The reality is that, even if the alarm system was functional, it would not have sounded since the theft was not to property inside the building. However, the policy made no such qualification and the endorsement was effectively provided on a warranty basis and interpreted literally. Excluded by language though logic would imply that there should be coverage. Language wins. But, when you can argue language (especially in the cloak of ambiguity) shrouded in logic, your argument becomes more powerful. For example, in the February column of this series, I gave an example of claims involving damage by a falling boulder that were denied on the basis of the “earth movement” exclusion. The policies in question did not define “earth movement,” “earth" or “movement.” The argument for coverage was supported by logic. For example, dictionary definitions cited referred to “earth” as essentially a plural term, like soil, rocks, etc., not a single, solitary big rock or boulder. What if a vandal threw a rock through a plate glass window? Would that be covered if the policy covers vandalism or is the rock “earth” that is “moving” and excluded? What about a dust or sand storm? Is that moving “earth” and excluded or does the windstorm peril cover any resulting

In the cinematic tour d’ farce, Road House, head bouncer Dalton had three rules for resolving disputes: (1) expect the unexpected, (2) take it outside and (3) be nice. Be prepared for the occasional unexpected “cranial inversion” claim denial that was discussed in the February column, though those denials are usually very easy to overturn. For us, “take it outside” does not refer to a fistfight in the agency parking lot (though I have a story about that I might share another day), but rather let’s resolve the claim, one way or

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another, without litigation. The third rule, though, is the important one…be nice. There is no tougher job in this industry than being a claims professional. The variety and depth of skills and knowledge required to do the job properly is significant. And, keep in mind, that no matter what the adjuster decides, someone is likely to be unhappy. Treat adjusters the way they deserve to be treated, with consideration and professionalism.

Appealing a Claim Denial

By following the process outlined in this year-long series, you should be successful in overturning over 90% of claim denials that are arguably covered. Most of these reversals begin and end with the front-line adjuster. But sometimes claims may have

to be appealed to a supervisor or manager who has more experience, decision-making authority or bargaining power. Occasionally a claim may be appealed to the carrier’s home office, though my experience has been the farther you get away from the source, the less likely you may be to prevail without litigation. In some situations, you may be able to get your state insurance department involved, though, frankly, I believe this has become less likely. When I worked for the Tennessee affiliate of the Big “I” trade association, I was able to get scores of claim denials reversed through the combined deliberations of the agent, insurer, association and regulatory staffs. And, of course, there is always litigation…or the threat of litigation. I recall a

‘If you can’t argue the form, argue logic; if you can’t argue logic, argue the form.’

particularly frustrating denial involving a lady who sold a $29,000 diamond ring to someone who gave her a counterfeit cashiers check. Even though she had theft coverage, and had scheduled the ring on her HO policy on a wide open perils basis, the carrier refused to pay, claiming the cause of loss was “voluntary parting,” something often excluded by commercial property policies but not even remotely an exclusion under her HO policy. The claim appeal went all the way to the insurer’s home office claims and legal departments and still the carrier refused to pay. I knew someone who knew someone who knew one of the best known trial lawyers in the country. We sent the correspondence on the claim to the law firm, a demand letter was sent under the attorney’s signature to the insurer and the claim was settled within two weeks.

Final Words

If I were to try to summarize this entire series of articles into three foundational principles, it would be this: First, insurance is not a commodity differentiated only by price, though you wouldn’t know that from most price-focused industry advertising. Second, the purpose of insurance is to insure, to look for coverage, not loopholes. An insurance policy is not an escape room game. Third, the foundational principle of the industry is to assist people and organizations in minimizing their exposure to serious or catastrophic financial loss, a premise seemingly lost on insurtechs who claim they can place your insurance in 60 seconds. I hope this column has convinced you that many uncovered claims can be prevented and that most claims that involve legitimate differences of opinion as to coverage can be resolved fairly and equitably without litigation. With that, I’ll close this series with a fond RTFP! Wilson, CPCU, ARM, AIM is founder and CEO of InsuranceCommentary.com and the author of the book “When Words Collide: Resolving Insurance Coverage and Claims Disputes.”

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DECEMBER 16, 2019 INSURANCE JOURNAL | 39

Idea Exchange: The Competitive Advantage

The Power and Failure

of Anecdotes

eghan Moran at Johns Hopkins University studied 263 “avowedly anti-vaccine websites … [tracking] how many By Chris Burand made powerful use of anecdotes – [and found that] a tragic story to stir fear and sympathy in a parent can be a more effective spur to action than any number of statistics.” – The Economist 3-30-19 40 | INSURANCE JOURNAL | DECEMBER 16, 2019

Anecdotes powerful enough to ruin young lives versus direct evidence is proof the power of a story surpasses science or facts almost every time. Since time began, snake oil salesmen have always found willing and gullible customers because stories sell. So, learn to tell stories! However, if you want a healthy child or a healthy company, depend upon science rather than slick stories. Stories work to sell, but stories without science fail to work. Selling and working are not synonymous, but people, sellers and buyers

both, get confused. One of the reasons companies lauded in magazines often fail is because the stories told make for great magazine articles, but lacking science (good management decisions and processes) the company eventually fails. One can think of internet-based companies along these lines, too. If the people involved can keep the differences straight in their own minds, why not combine them – stories work to sell and science works to succeed? As a snake oil salesman might say, “a sale requires zero effectiveness post INSURANCEJOURNAL.COM

money exchange.” This mindset is why so much insurance sold has inadequate coverage. The producer is only concerned with the sale, not the coverage. Time after time I have asked audiences, agency executives, broker executives, and producers how much commission is generated on a properly written account. For example, what is the minimum commission on a properly written commercial account? Properly means writing all the applicable coverages. We then look at how many accounts fail to generate that much commission, i.e., how many accounts are written inadequately. The number is always at least 50% of accounts are written inadequately.

A Matter of Luck

Consumers buy insurance trusting they are getting the coverage they need — but they only get the coverage they need in these situations if they do not have an uncovered loss. That is just a matter of luck. They buy because of the story rather than the science of whether the coverage matches their exposures. If buying insurance, look past the story and get the facts. What are your exposures and does the policy provide coverage for those exposures? We call these items “coverages” because an exposure means being exposed and coverage is supposed to cover the exposure. It is rather simple, but I find some people have lost the connection between the two and the public may not understand it at all. Another angle is how carrier and agency leaders are victims of storytelling themselves. This industry has been running on stories and over-simplistic vaccine tales for a long, long time, and this has contributed to the loss of connection between the concepts of exposures and coverages. Lots of people have made lots of money telling stories to storytellers and storytellers are easy marks themselves when a story is good. If you want to operate intelligently, use actual facts. Here are a few.

Cross-selling increases retention. Great story, no known science. Cross-selling and retention may (or may not) be correlated but correlation is not causation. Furthermore, all cross-selling is not equal. It may be one thing to cross-sell auto and home, but cross-selling auto and life is not the same sale. Understand that each kind of cross-sale is different. Therefore, the science of cross-selling is different for each line. Recognizing this point, in my experience and in my training of producers, makes a huge difference in sales success. Using the personal lines cross-sale as an example, what causes retention and cross-selling correlation is a mutual cause. It absolutely is not force feeding an extra sale down someone’s throat that causes retention to increase. A person who is unlikely to shop around is a person who is most likely willing to bundle. It is the person’s underlying personality that causes the two variables to move in concert rather than one of the other variables causing the other variable to move. Revenue per person drives profit. No proof of this statement exists except in theory. Perhaps no proof exists because the right tests have not been conducted, especially tests controlled for like kind agencies (for example, the same amount of personal lines sales for the same size agency, etc.). A correlation exists between revenue per person and the size of the agency. Many of those agencies have grown large by investing in technology that allows people to be more productive, but not necessarily more profitable. The productivity savings is the result of the technology. Personality tests winnow out bad sales people. Personality tests are not behavioral tests and tests for staff are not indicative of successful producer hires. Just give this some thought. A test designed for staff, at least a good one, involves testing for detail, process, diligence, etc. These are people who generally do not want to sell. A test designed for producers has one primary

‘The only people I ever convince that facts trump stories are those with critical thinking skills who are often people who do not tell stories well.’

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variable: Will they ask for the sale? How different can these positions be? To use one test for both makes no sense. But the stories told convincing people that one test fits all — those are good stories. Insurance companies all have the same investment income. Another great and powerful myth is that insurance companies all make the same investment income. Two factors are involved in all investment equations. The first variable is yield. Insurance companies’ yields commonly vary between 2.5% and 8% today. In and of itself, the difference in yields is huge. The second variable is how much money is invested. Some companies have huge investment portfolios, and some have rather tiny investment portfolios. Take a company with a 6% yield and a $50 billion investment portfolio who makes $3 billion compared with another company with a 7% yield but only a $25 billion portfolio who only makes $1.75 billion. Which carrier has the most profit, the most capacity, the most flexibility? Over the last 100 years, carriers have only made money based on their investments, so investment income makes all the difference in the world.

Myths vs. Hard Math

I test myths with hard math. The only people I ever convince that facts trump stories are those with critical thinking skills who are often people who do not tell stories well. Rather than the charismatic people person, inadequate story tellers may be the best people to run agencies and companies. Emotional and fake stories are just too powerful for people without strong critical thinking skills. The problem with facts that contradict stories is that people really, truly want to believe the stories. Stories tug their heart strings. For them to disavow a story is emotionally stressful. To disavow facts is pretty easy. How do you feel about the efficacy and dangers of vaccines?

Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-485-3868. E-mail: chris@burand-associates.com. DECEMBER 16, 2019 INSURANCE JOURNAL | 41

Idea Exchange: The Wedge

Why Hiring New Producers is Such a Crapshoot

ou probably think this is a horrific analogy and has zero relevance to hiring new producers. If that is the case, By Randy Schwantz you’ll surely dismiss the idea and continue to train, coach and develop new producers your way. I hope it’s working for you. My feeling, after working with hundreds and hundreds of new producers in our industry, is that the process of preparing a producer to be at least very good at their craft is not that much different from getting a freshman athlete prepared to be a contributing member of their team. Just yesterday, I had a training class with 22 people. One was a quarterback in high school, one was a libero in college, and a third was a college linebacker. They were also relatively new producers in their firm with an average of one year’s experience. To put this into context, I teach producers how to bust the incumbent relationship using their proactive services rather than relying on price, coverage and relationship. The firm I was working with has invested a lot of money in building out its capabilities in the areas of loss control, claims management, data and analytics, and rolling all of those features into a branded risk management theme. By the way, hundreds of firms have done this. All you have to do is go to your competitor’s website, and they’ll have something that they have trademarked, like RiskManagement365 or ClaimsHarness 24, as a way of branding their risk management platform. It’s good stuff. But the problem is that most producers have never become a student of the services those platforms represent. That creates an interesting problem for a new producer. Agency owners are in their ear 42 | INSURANCE JOURNAL | DECEMBER 16, 2019

telling them, “We invest a lot of money in our differentiated platform, it’s called RiskManagement365,” but, they never demand nor have a plan to get the producer deep enough into the weeds to really learn what’s in the risk management playbook. Back to sports: I asked the quarterback, “How many plays were in your playbook?” He said there were 80-plus. “How many did you have to memorize and be able to perform for you to get on the field?” He said all of them. I shot back, “Isn’t that virtually impossible to learn that many plays?” He responded, “Not if you are committed.” I kept going by asking him how many plays are there in your RiskManagement365 platform? He said he didn’t know. I asked why don’t you know? His response, “We have all sorts of marketing stuff, but no real playbook. Not sure what I need to learn.” I then asked the volleyball player a similar question about her college volleyball experience. “Did you guys have a playbook?” Of course, she responded. “Did you have to know it to get out on the court and play?” Yes, if not it would be a mess. And I ended with the linebacker. “What about you guys, what did you have to learn? Did you study game film? Did you have defensive plays you ran?” Yes, yes and yes, he said. We then talked a few minutes about their weight room regime; frequency, effort and technique. Again, as you’d imagine, a pretty tight routine to develop the athlete.

Being Prepared

Few coaches would put an athlete in a game who wasn’t prepared to play. And yet, in our industry, we hire new producers, send them to a two-week course to get an overview about coverage, then direct them to their office or cubical with a

computer and a chair and wish them good luck. They are told: “Do the best you can to set appointments. When you get an appointment, let us know, and we’ll send someone with you.” Is it any surprise that many more fail than succeed? If you looked at this like a head coach, you’d have a playbook that you’d want your producers to memorize. As they memorized the playbook, you’d practice the playbook and coach them through their mistakes, helping them to embed the learning. All of this is simply intended to build their competence, and confidence, so that INSURANCEJOURNAL.COM

when they are in the real game, they are ready to perform. Now, if you grew up in the insurance industry, or if you worked for a carrier before becoming a producer, or if you are just an amazing self-starter and one who gets it done, you’re probably saying, “no one had to teach me to be a producer. I figured it out on my own.” I would like to encourage you to think about this differently and take your new producers through the six steps below to get them started on their path to success:

1. Goal Setting. Get goals dialed in tight;

dials, appointments, wins, and revenue booked.

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2. Prospect Database. Build a database

of a minimum of 200 businesses that underwriters want and are of sufficient size that if they write it, they’d want to keep it. 3. Sales Process. Memorize a sales process. Role play it frequently to get it embedded in their vocabulary, and it seems natural. 4. Differentiators. Memorize at least 12 proactive service differentiators. 5. Cold Call Process. Teach them a process that boldly gets the buyer’s attention and leads to appointments, not X-dates. 6. Coaching Sessions. Give them honest feedback weekly based on effort and activity.

Go to Breakfast

If you don’t feel prepared to do this yet, call up a local high school football coach, donate $500 to his program and ask him to go to breakfast. At breakfast, get that coach to lay out his development program for his athletes. It will probably blow you away how much he’s asking of his players. It will surely challenge you to raise your expectations, be a bit more demanding and likely help you become a better coach. Schwantz is founder of The Wedge Group. He’s also the author of the book Agency Growth Machine. Insurance Journal readers may receive a free copy (just pay shipping) at thewedge.net/free-agm. Phone: 214-446-3209. Email: randy@thewedge.net. DECEMBER 16, 2019 INSURANCE JOURNAL | 43

Idea Exchange: Minding Your Business

How to Lower Agency Value

s the M&A frenzy continues, buyers keep pushing the envelope when it comes to agency value. The private equity firms were initially paying top dollar to their first acquisition of a large, wellrun firm platform acquisition. But now, many of the follow up acquisitions are offered similar deals.

By Catherine Oak

and Bill Schoeffler

What is Value?

When an agency owner sells their business, what are they really selling? The purchase price may include some value for receivables, retained cash, desks, office equipment, cars and computers. However, the main value of an insurance agency comes from its intangible assets. 44 | INSURANCE JOURNAL | DECEMBER 16, 2019

Agency value is based on the cash flow that the business can generate. A buyer is looking for an existing business, its current clients, employees and other factors. These are assets that any business has. There is a clear pattern of the components contained in a high value agency versus a low value agency. Both agencies may appear to run relatively smooth. They may even both provide the owners with a comfortable living. However, an astute buyer will look beneath the veneer to analyze how each agency is running. Buyers are interested in the sustainable earnings that the firm can generate year after year. Both firms may have similar earnings under the current structure and with the current owners. In a high value agency, the potential earnings will remain long after the current owners sell. Low value agencies have a high risk that the earnings will not continue, so the buyer will heavily discount value. There are several factors that distinguish a high value agency from a low

value agency. Owners of low value agencies are often caught by surprise because they did not understand how the manner in which they run their business would adversely impact the agency value.

Low Productivity

The profitability of any agency is directly related to compensation costs. These expenses are typically two-thirds of revenue. Therefore, low productivity and overstaffing will lower profits and thus lower the agency value. Small agencies are impacted more by overstaffing than larger firms. If an agency needs only the equivalent of two and a half full-time CSRs, but they have three fulltime CSRs, they are 20% overstaffed. A large firm could have 33 CSRs but only need 30. The extra three CSRs accounts for only a 10% overstaffing condition. It is not unusual for an agency to have a long-term employee that did not grow with the firm. That employee often works inefficiently or performs work that INSURANCEJOURNAL.COM

is redundant to other employees. The owner keeps that employee around out of a sense of loyalty. Loyalty in this case does not necessarily mean it is in the best interest of both parties. If the seller insists the buyer keep all the employees, then the buyer can only afford to pay a lower price. A buyer who inherits extra employees, without any stipulation to retain them, most likely will fire them after the sale in order to generate a profit so they can pay the seller. Either way, someone loses — a lower value for the business or the firing of unnecessary employees after the sale — due to the seller’s management style. Agency staff should always be well trained to allow them to grow with the ever-changing business environment. Productivity standards need to be set and adhered to. Performance reviews should be given annually at their anniversary date. Employees that fail to keep up should be put on notice and fired if their performance does not improve.

No Producer Contracts

There are many excuses not to have a producer contract: they are expensive to draft, they cause ill-will between parties, they are easily broken, etc. All of these excuses have some element of truth. The important point is that the lack of producer contracts will lower the agency’s value because no contracts increase the risk associated with the agency’s continued earnings potential. Two topics all producer contracts need to cover are compensation and ownership of the business. Some agencies may also have a deferred compensation plan for the producer. Excessive producer compensation will certainly lower the agency value since it will lower profits. A buyer is also interested in a clear understanding of who owns the business. Agencies without contracts for their producers might feel that the agency owns the business. But it often happens that the producers do not agree, and they may eventually walk away with their books of business. The agency then has little or no recourse since there is no formal agreement. The bottom line is that INSURANCEJOURNAL.COM

you cannot sell what you do not own. Buyers often make their purchase offer contingent upon having all producers sign a contract, which also must stipulate that the agency owns the business.

Account Ownership and Deferred Comp

Agencies that allow producers to have ownership in their book of business must understand how that impacts value. If the book is owned entirely by the producer, many buyers will not include it in the revenue stream or might pay the producer directly as part of the deal. This is because the agency owner does not own that business; the producer does. If the producer threatens to walk, the buyer may end up paying for that business twice. It is better for agency value when the agency retains full ownership in the business and then sets up a deferred compensation or vesting plan to allow the producer some equity for their efforts. This eliminates any dispute on ownership while still satisfying the producer’s need for building equity and a retirement plan.

Producers Tied to All Accounts

Many owners and producers see virtue in the fact that they know all their clients and have an excellent relationship with each one. There is a difference between knowing your clients and having your clients dependent upon the owner or producer for most things. Agencies whose clients are tied to the owner/producer are less desirable to a buyer than an agency whose clients don’t have a strong bond to the owner/ producer. Or at least there is also a strong bond between the client and the service staff in high value firms. A buyer needs to know that there will be a smooth transition of ownership without the fear of losing key accounts. If the seller is really tied to their accounts, a buyer may require the seller to stick around for a few more years than the typical two or three years to assist in the transfer of the relationships. Many deals are also done on a retention basis. If the departure of the owner or producer also means the departure of

the clients, the earn-out to the seller will dramatically decrease. It is better to have the client look to the service staff for their day-to-day service needs rather than the owners or producers. Owners and producers should mainly be involved with the initial sale, remarketing of medium-to-large accounts and problem solving for major issues. Only the service staff should handle the small accounts. Accordingly, a producer should be paid renewal commission only for medium and large accounts. Keep in mind that small and large are relative. A large regional broker might consider accounts under $5,000 in commission as small. Whereas, a small firm might set the small account limit at $500 in commission. The key to value is profit. If a firm is paying 30% commission to a producer for small accounts that the producer does not even work on, then that 30% is pulled from the bottom line.

The Last Word

There are many factors that a buyer considers when looking at buying an agency. The main consideration is the ability to create and sustain a profit. Most of the active national buyers today only do deals with agencies that generate at least 25% to 30% or more in profits. Most buyers are interested in well-run firms that would enhance their current business situation. Agencies that are poorly managed have fewer interested buyers and often get low offers for the business. A good credo to follow is to always run a business as if it is going to be sold today. Streamlined operations have fewer problems and generate better bottom line profits. The owners of these agencies will make more money now and in the future. Oak is the founder of the consulting firm, Oak & Associates, based in Northern California and Central Oregon. Schoeffler is an associate of the firm. Oak & Associates specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, sales and marketing planning as well as perpetuation planning. Phone: 707-935-6565. Email: catoak@gmail.com. DECEMBER 16, 2019 INSURANCE JOURNAL | 45

My New Markets Relocation and Moving Insurance Programs

Market Detail: RelocationInsurance.com

(www.relocationinsurance.com) offers moving insurance, storagae insurance, mobile storage insurance, fine art moving insurance, military moving insurance, loading and unloading insurance, senior moving insurance, and small move insurance. Available limits: As needed Carrier: Unable to disclose States: All states Contact: Randi Krantz at 201-383-8425 or e-mail: Randi.krantz@relocationinsurance.com

BOP - Small Business Insurance Market Detail: Greenwood General

Insurance Agency’s (www.gwmga.com) BOP/small business programs offer premiums on classes from “A” rated carriers. Minimum premium starts at $350. Phone quotes available and quotes on both property and general liability. Target classes include: apartment buildings (best program rates); buildings – lessors risk (best program rates); car washes; construction – most classes; day care centers; distributors; garage operations/ gasoline stations; hotels & motels (best program rates); land – vacant or LRO (best program rates; laundries and dry cleaners; parking lots; party rental stores; recycling centers; restaurants (including bars and taverns); retail stores; security and patrol agencies; special events; tanning salons and tattoo parlors; textile mfg./printing/ silk screening; truckers GL. Available limits: Minimum $1 million, $3 million maximum Carrier: Admitted – Metlife, Blackboard and more; non-admitted available States: All states Contact: Richard Badouz at 626-817-9100 or e-mail: richard@gwgeneral.com

UAV / Drone / UAS

Market Detail: RV Nuccio & Associates

Insurance Brokers Inc (rvnuccio.com) offers UAS insurance to provide liability, physical damage, and hired/non-owned 46 | INSURANCE JOURNAL | DECEMBER 16, 2019

coverage. Our appetite includes real estate agents, photographers/videographers, film producers, engineers, and more. Available online 24/7. Available limits: Minimum $100,000, maximum $5 million Carrier: U.S. Specialty Insurance Co. States: All states Contact: Robert Nuccio at 800-364-2433 or e-mail: support@rvnuccio.com

Private Flood Residential & Commercial

Market Detail: Flood Risk

Solutions Inc. (www.floodsol. com) is a tech-driven MGU and a Lloyd’s Coverholder, exclusively focused on flood insurance. Primary/excess, residential, small and large commercial risks. Access to over a dozen private market flood programs, including FRS exclusive and proprietary programs. FRS also manages NFIP books of business on behalf of select partners. Contracted partners may use quote/bind residential and small commercial using FRS online portal. For new appointments or to discuss NFIP book rollovers, please submit application online at https://www.floodsol.com/auth/ register or contact Phil Martin. Available limits: Minimum $25,000, maximum $50 million Carrier: Unable to disclose, admitted and non-admitted available States: Ala., Ariz., Calif., Colo., Conn., Dela., Fla., Ga., Ill., Ky., La., Maine, Md., Mass., Mich., Miss., Nev., N.H., N.J., N.M., N.Y., N.C., Ohio, Ore., Pa., R.I., S.C., Tenn., Texas, Utah, Vt., Va., Wash., W. Va., and Wyo. Contact: Phil Martin at 727-256-1991 or e-mail: phil@floodsol.com

Directors and Officers for Community Associations

Market Detail: Preferred Property

Programs (www.ppp-quotes.com) offers a directors and officers liability policy designed to address exposures of community associations. A+ rated carrier; broad definition of “claim” provides

coverage for monetary and non-monetary damages; employment practices liability coverage with defense expense coverage for wage and hour claims included; coverage for directors, officers, trustees, employees, committee members, volunteers, in addition to coverage for independent community association managers and builder developers; punitive and exemplary damages coverage where insurable under applicable state law; coverage for insured versus insured claims (both insured person vs. insured person and entity organization); defense expense coverage for breach of contract claims; and coverage for insured persons in outside director capacity. Available limits: Minimum $1 million, maximum $1 million Carrier: Berkley Offshore States: Unable to disclose, admitted Contact: Wayne Dow at 213-399-0079 or e-mail: wdow@jgsinsurance.com

Business Auto

Market Detail: Litchfield Special Risks (www.lsrinc.org) coverage eligibility includes: Up to 20 unit accounts; vehicles under 20,000 lbs; travel in a local and intermediate radius; up to $1 million in combined single limit. Targeted classes include contractors, distributors, dry cleaners, office, funeral homes and retail shops, and more. Must be written as a package with general liability. Available limits: Maximum $10 million Carrier: Various, Admitted and NonAdmitted availabe States: Ariz., Calif., Colo., Fla., Ill., Iowa, Ks., Mo., Neb., Nev., N.M., Tenn., Texas and Utah Contact: Liliana Del Hoyo at 915-533-1111, ext. 158 or e-mail: lili@lsrinc.org

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Idea Exchange: Talent Building Corporate Citizenship Programs that Attract Top Talent

orporate citizenship is no longer a “nice-to-have” for employers. It’s a crucial element of a company’s overall strategy, impacting By Brad Whatley employer brand, the satisfaction of current staff and even customers’ purchasing decisions. Today’s organizations are expected to not only strategize how to be most profitable, but also how to give back and positively affect society. According to the Governance and Accountability Institute, 86% of S&P 500 companies published sustainability

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reports in 2018, compared to just 20 percent in 2011. The push toward corporate citizenship has gained momentum and many insurance organizations publicly and proudly share their programs and reports with customers, shareholders and other stakeholders. These efforts are vital in attracting and engaging top insurance talent, especially when it comes to members of younger generations. A recent survey found 90% of Generation Z believes companies must take action on social and environmental issues and 75% research companies’

stances on these issues. In addition to being an important factor as candidates review and evaluate potential employers, corporate social responsibility (CSR) programs have a true impact on company culture. By prioritizing these programs, insurance organizations can boost employee morale and create a spirit of giving and charity within their organizations. If you’re ready to build or enhance your CSR program, there are a few key ways to ensure it’s successful, while improving your employ-

‘Encourage their participation and create a sense of friendly competition to build buzz and make things fun.’

continued on page 48

DECEMBER 16, 2019 INSURANCE JOURNAL | 47

Idea Exchange: Talent continued from page 47 er brand and attracting high-performing professionals.

Develop a Plan

It’s one thing to decide you need a CSR program. It’s another to bring to life a program that strategically aligns with your overall business goals and values. Determine how your CSR program will support your business objectives and how it will enhance your company from a culture, recruiting and business perspective. Enlist individuals from across the organization to sit on your CSR committee and drive its efforts. If you’re just launching your program, you may want to start small with pilot events to gauge interest and build momentum. This enables you to share a few opportunities that require monetary investment (such as sponsoring a charity event or implementing environmentally responsible programs) along with others that don’t (for instance, a company-wide food or toy drive.) Use these as stepping stones and start to formulate expected ROI to share with senior leadership, while beginning to garner employee participation.

Choose Your Causes

There are many worthy causes to support, and narrowing down where to invest your time and budget may be a difficult decision. By developing criteria for evaluating each opportunity, you can leverage an objective framework to guide your decisions. Use your company’s core values and mission to develop these standards. You may want to support organizations that relate to your industry and are non-divisive, for instance, those that serve underprivileged populations and children. They could be local causes, where you can see a direct impact on your community. Or, if you’re a larger organization with multiple offices, you may want to support organizations that have a similar presence. Time and budget commitments also play a role in selecting the opportunities that are right for your company. Leverage your CSR committee to identify and build partnerships with programs that align with your business goals.

‘Individuals are looking to join organizations that share their own values and enable them to make a difference in their communities and society as a whole.’

Gain Buy-In from Leadership

For a CSR program to be adopted throughout the company, support needs to come from the top. Although your executive team may be on board with the general idea of a CSR program, it’s important to ensure time and budget are dedicated to getting it off the ground. Additionally, by proactively championing chosen causes, participating in events and encouraging staff to spend time volunteering, leaders are demonstrating their commitment to the program. This enables employees to openly rally around causes, feel confident in taking time out of their days to contribute, and gain a sense of shared excitement and purpose. 48 | INSURANCE JOURNAL | DECEMBER 16, 2019

Encourage Employee Participation

While executives should fully support your efforts, successful CSR programs are often employee run and driven. Many professionals have a passion for service and making a societal impact. Encourage their participation and create a sense of friendly competition to build buzz and make things fun. For instance, whether you’re donating backpacks and school supplies, sponsoring underserved children during the holidays or collecting canned goods, pitting internal teams against each other can increase donations and build camaraderie. Encourage managers to support employees who want to participate and champion volunteer opportunities. Seek feedback at the end of each year to better understand what employees found valuable, reevaluate what other organizations are doing and make any tweaks.

Share Your Impact

ing and retention tool. Make sure to promote your efforts, both internally and externally. Share photos from volunteer events on your social media platforms to illustrate how employees are actively giving back. Encourage employees to join the conversation by engaging with your company posts and using hashtags. Include the causes your company supports on your website and within your recruiting materials. At the same time, arm recruiters with talking points on December 16, 2019 Clear Blue Insurance Company B7 GTabonuco Street, Suite 912 Guaynabo, PR 00968 The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

December 18, 2019 West Bend Mutual Insurance Company 1900 South 18th Avenue West Bend, WI 53095 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.

Your CSR program is a valuable recruitINSURANCEJOURNAL.COM

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your CSR program and provide concrete examples to discuss with candidates in interviews. Corporate citizenship is an important part of your organizationâ&#x20AC;&#x2122;s overall vitality, corporate culture and employer brand. Individuals are looking to join organizations that share their own values and enable them to make a difference in their communities and society as a whole.

Prioritize a CSR program, gain buy-in throughout your company and share your impact to help solidify your position as an employer of choice.

December 18, 2019

December 16, 2019

Dominion Dental Services Inc. 251 18th Street South, Suite 900 Arlington, VA 22202

Pennsylvania Lumbermens Mutual Insurance 2005 Market St., Suite 1200 Philadelphia, PA 19103

EASTGUARD INSURANCE COMPANY 39 Public Square Wikes-Barre, PA 18701

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Life, Accident and Health Insurance in the Commonwealth of Massachusetts.

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 amend their Foreign Company License to transact Accident, Health, and Property 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.

December 16, 2019

Great Divide Insurance Company 475 Steamboat Road Greeenwich, CT 06830

AMGUARD INSURANCE COMPANY 39 Public Square Wikes-Barre, PA 18701

NORGUARD INSURANCE COMPANY 39 Public Square Wikes-Barre, PA 18701

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.

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Whatley is senior vice president of The Jacobson Group, a global provider of talent to the insurance industry. Email: bwhatley@jacobsononline.com. Phone: 312-884-0465.

Applied Underwriters www.auw.com 2, 3, 52 Encova Insurance www.encova.com S1; M1 Golden Bear Insurance www.goldenbear.com 9 M.J. Hall & Company www.mjhallandcompany.com W1 Philadelphia Insurance Companies www.phly.com 5 United Fire Group www.ufgsolutions.com 7

DECEMBER 16, 2019 INSURANCE JOURNAL | 49

Closing Quote Build on Corporate Social Responsibility to Secure the Next Generation of Professionals

By Brandon Davis

ith unemployment at an all-time low, companies are implementing smarter strategies to gain an advantage in attracting and retaining talent. That effort involves finding ways to appeal to workers of different generational cohorts, including millennials, which have become the largest generation in the U.S. labor force. So, how can a company do this? Research shows a solution is corporate social responsibility (CSR) – a self-regulating model that allows companies to conduct business ethically and meaningfully. By 2020, millennials will make up 50% of the American workforce, according to Cone Communications’ 2016 Millennial Employee Engagement Study. Millennials, it reports, are seeking greater involvement in CSR commitments through work and expect their employers to lead the way. The insurance industry is uniquely positioned to help its professionals make a difference both at work and in the community. Why? Insurers’ business models are rooted in helping customers during

difficult times and putting communities back together after disaster strikes. Meshing that fidelity with a commitment to social good is attractive to not only millennials, but to any workers who want to feel they can change the world for the better.

Looking Inward

The industry must provide employees with a path for community outreach. According to the Cone study, 64% of millennials won’t take a job if a potential employer doesn’t have strong CSR practices, demonstrating the importance of this requirement to that population of the workforce. Across the industry, insurers have developed suites of CSR touchpoints. Here are a few examples of what CNA is doing: • Corporate and employee giving. CNA supports the generosity of its employees by matching contributions to qualified nonprofits – up to $5,000 per year. • Diversity and inclusion. A culture that welcomes employees from all types of backgrounds and life experiences is a benefit to employees, the company and customers.

50 | INSURANCE JOURNAL | DECEMBER 16, 2019

• Employee volunteerism. Employees are engaged in the communities in which they live and work and are encouraged to seek manager approval to volunteer when they want. • Environment Sustainability. Beyond supporting organizations financially, green practices have been incorporated for many years.

Looking Outward

In addition to policies that can be implemented within a company, insurers can look outward to partner with organizations that are shaping the future of the industry. Gamma lota Sigma offers programs, partnerships, campus engagement and a lifelong professional network to lead diversification of the industry’s student talent. The Insurance Careers Movement is a grassroots effort to spread the word that insurance is the career trifecta: stable, rewarding and limitless. This shows graduates with diverse backgrounds that insurance has a place for them. And philanthropic groups like the Insurance Industry Charitable Foundation unite the strength of the industry by providing grants and opportunities for

The insurance industry is uniquely positioned to help its professionals make a difference both at work and in the community. volunteer service, as well as by inspiring leadership and promoting the power of diverse talent. IICF events empower industry professionals, especially those seeking experience in collaborative leadership roles, to volunteer with a sense of purpose as they grow professionally while bringing their employers together to deepen their community impact. This empowerment helps to build a bold, talented, socially conscious and diverse workforce for the future. In today’s competitive talent market, it behooves every insurance organization to look inward and outward in providing opportunities for employees to make a positive community impact. If employees see their values reflected in the opportunities they can tap into at work, it creates a stronger connection for them and makes the company an employer of choice. Davis serves as Director of Public Relations and Corporate Social Responsibility for CNA. He also serves as an Advisory Board Member for the Insurance Industry Charitable Foundation (IICF). INSURANCEJOURNAL.COM

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