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January 13, 2020 • Vol. 98 No. 1
Contents
Special Report
News & Markets
10
24
Workers’ Comp Profits at Risk from Growing Competition, Lower Rates: A.M. Best
Special Report: Employment Practices Liability Claims in 2020
January 2020 Reinsurance Renewals Varied Significantly, Brokers Say
Special Report: Potential Wage-andHour Claims Could Rise Under New Overtime Rule
14
18 Why It’s Not So Easy Getting Insurers to Defend in Sexual Harassment Cases
Departments
12 Declarations
6 | INSURANCE JOURNAL | JANUARY 13, 2020
28
32
Special Report: 2019 Agents of the Year
12 Figures
19 Business Moves
Idea Exchange
36
Minding Your Business: Industry Trends to Exploit for 2020
42
2020 Meetings & Conventions Directory
40
Closing Quote: How Technology Can Transform the Way Agencies Sell and Service Commercial Lines
22 People
27 My New Markets
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*2017 NU/PIA Independent Agent Survey 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
New Year’s Resolutions
T professionals in 2020 and beyond.
hroughout the year readers can find countless words of wisdom on how to be a better and more successful professional insurance agent inside the pages of Insurance Journal magazine. Here are a few ideas from columnists in no special order that, if you are so inclined and resolved, could be borrowed and followed to help shape your new year. Look for continued advice from these same
Embrace It: Insurance Is NOT a Commodity. Insurance coverage guru Bill Wilson is
adamant: You must know the policies you sell and service and the differences between them. Being able to read, understand and apply policy form language is a critical skill that is a fundamental prerequisite for successfully resolving coverage and claims disputes. Read Wilson’s 2019 “When Words Collide” series or stay tuned for his 2020 “Is It Covered?” series in the next issue of Insurance Journal magazine. Conduct an E&O Audit. An errors and omissions claim can take its toll on an agency. The financial burden can be a huge blow and individuals involved will face tremendous stress, which can impact the morale of the agency. Agencies should hire an independent consultant to do an E&O audit of agency practices. But if that is not in the cards, learn how to conduct a self-audit. Don’t miss more from Bill Schoeffler and Catherine Oak in the Minding Your Business monthly column. Do Your Job. Agents are the translators between two people speaking different languages. Silence is a message that says an agent does not care, yet silence is what small commercial and personal lines clients hear from agents over and over. Many agents think they can’t make money spending time with small customers. But that is the agent’s job. Don’t miss outspoken consultant and monthly “The Competitive Advantage” columnist Chris Burand in upcoming pages of Insurance Journal. Improve Your Hiring Results. There’s a lot of money to be gained or lost in an agency’s hiring process. But most agencies still use a process that doesn’t work because it says: “He seems like a good guy. Let’s give him a shot!” Expert Randy Schwantz offers a system that does work for improving results. It starts with two people: a good cop and a bad cop: The 5-Step Evidence Based Hiring System. Don’t miss Schwantz’s monthly column, “The Wedge,” in upcoming issues. Build a Recruiting Plan. Insurance agencies too readily accept that the job market is tight and there are not many good candidates. They treat the process the same for every position. But consultant and monthly “Ask the Insurance Recruiter” columnist Mary Newgard believes that recruiting is sales and, like sales, it needs a structure and a plan. Don’t miss out on Newgard’s valuable advice in 2020. Response Time. Consumers consider timeliness to be not just one factor but indeed the most important differentiator — above efficiency, professionalism and knowledge. With increasing pressure from insurtechs coupled with rising consumer expectations, response time must now be measured in minutes, not hours or days. That’s just one tip from Tech Talk columnist Tom Wetzel, an longtime insurance marketing consultant, that readers can enjoy once again in 2020.
Here’s to a happy and prosperous new year to you all!
Andrea Wells Editor-in-Chief
8 | INSURANCE JOURNAL | JANUARY 13, 2020
Publisher Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com
ADMINISTRATION / CIRCULATION
Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com
EDITORIAL
Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Elizabeth Blosfield | eblosfield@insurancejournal.com Southeast Editor/MyNewMarkets Amy O’Connor | aoconnor@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor L.S. Howard | lhoward@insurancejournal.com Columnists & Contributors Contributors: Jim Sams Columnists: Catherine Oak, Bill Schoeffler
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 Nathan Granitz | ngranitz@ijacademy.com
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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 2020 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
OUT-EXECUTE verb
To deliver the solution that wins the account
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AG R I B U S I N ESS
AVI AT I ON
P E R SO NAL L I N ES
PR O FESSIONAL & EXECUTIV E LIABILITY
CASUALTY
CONSTRUCTION
E N E R GY
PR O P E RTY
E N V I R O N M E N TA L
R E A L ESTATE
H E A LTH CA R E
TR A N S P O RTATI O N
LI F E S C I E N C ES
WO R K E R S’ C O M P E N SATI O N
MARINE RT BI N D I N G
News & Markets Workers’ Comp Profits at Risk from Growing Competition, Lower Rates: A.M. Best
W
orkers’ compensation carriers’ ability to retain profitable accounts and maintain market share could be challenged due to declining rates and growing competition in the U.S., according to an A.M. Best report. Rate decreases across the United States have led to margin compression in this segment, says the Best’s report, “Declining Rates Could Threaten Profitability of U.S. Workers’ Compensation Line.” As rate levels continue to decline, competitive pressure could mount on workers’ compensation specialists to the point that it will adversely affect not only company income statements, but also balance sheets, especially if companies are unable to set aside adequate capital for loss reserves, the firm’s analysts contend. Meanwhile, the profitability of the workers’ compensation line remains strong, despite extended market softening, as low reported claims frequency, legislative reforms, more effective use of data and predictive analytics and enhanced workplace safety measures drive positive operating results. Insurers in the workers’ compensation 10 | INSURANCE JOURNAL | JANUARY 13, 2020
segment reported an 86.1% combined ratio in 2018, compared with 92.1% in the previous year; however, on a direct basis, loss ratios are deteriorating in 2019 compared with 2018. A.M. Best said it is concerned about reserve adequacy, noting that with the consistent rate decline since 2015, the adequacy of claims reserves in the long term remains uncertain. Additionally, while lost-time claims frequency continues to decline, claims severity continues to rise, driven to a large degree by injuries workers have suffered in motor vehicle crashes. A.M. Best also analyzes the business through its Workers’ Compensation Composite (WCC), which is composed of U.S. companies, including state funds, with workers’ compensation and excess workers’ compensation net premiums of 50% or more of their total net premiums. This analysis finds that as some of the larger writers have decreased their exposure to the workers’ compensation business, specialist writers, included in the WCC, have assumed this business. The WCC accounted for 51.7% of U.S. workers’ compensation net premiums
compared with 33.8% in 2010. The WCC reported $4.6 billion in net income in 2018, a 12.2% year-over-year increase. Through the first half of 2019, the WCC has generated approximately $2.1 billion in net income. A.M. Best currently maintains a stable market segment outlook on the U.S. workers’ compensation industry, the largest component of the U.S. commercial lines segment. But it cautions that despite the positive results across the segment, aggregate direct premiums written have decreased modestly due to the declining rates. Also, while unemployment remains low, spikes in unemployment typically follow long unemployment rate declines and payroll growth may plateau. Consequently, the report warns, any resulting premium growth may dissipate sooner rather than later unless wage growth accelerates. A recent report from Fitch also forecast a dimmer outlook for workers’ compensation than for other lines, noting that workers’ comp rates have declined for almost five consecutive years. INSURANCEJOURNAL.COM
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INL AND MARINE
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PERSONAL LINES
Figures $ 15 Million That’s the size of the jury award that a judge overturned for a former sports columnist for the Los Angeles Times who said he was forced out of his job because of age and health discrimination. Superior Court Judge William A. MacLaughlin said the amount was not justified because of misconduct by the plaintiff’s attorneys and that the award was excessive.
91,000 More than this number of distracted driving crashes have happened in Ohio since 2013, injuring more than 47,000 and killing 305 people, according to Gov. Mike DeWine, who is working on a legislative proposal to upgrade distracted driving to a primary offense. Distracted driving in Ohio currently is a secondary offense for drivers over 18, meaning police must have another reason to pull someone over.
Declarations Employee vs. Contractor
“Little companies just trying to start out won’t be able to afford our services.” — Tamara Ellison, whose Ontario, Calif.-based company bears her name, has used independent contractors in her business. She said she may have to limit the services she offers and raise her prices due to a new California law that makes it harder for companies to treat workers as independent contractors.
12 | INSURANCE JOURNAL | JANUARY 13, 2020
Fair Enforcement
“Employers that fail to comply with the law will continue to see full and fair enforcement.” — Loren Sweatt, principal deputy assistant secretary of Labor for Occupational Safety and Health, said after the Occupational Safety and Health Administration (OSHA) cited Wilmington, Del.-based Dana Railcare for confined space hazards following an employee fatality in Pittston, Penn. The railcar service provider faces $551,226 in proposed penalties.
Louisiana Tort Reform
“We have to let the middle class and the public know that we are attempting as the leaders of this state to help them with these high insurance rates.” — Rep. Sherman Mack, a lawyer aiming to be the next speaker of the Louisiana of Representatives, comments on GOP lawmakers’ plans to try and implement tort reform in the 2020 legislative session. They want to limit damages awarded in car wreck lawsuits, which they say are a leading cause of the costly auto insurance rates in Louisiana.
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$600,000
The amount whiskey distiller Jim Beam was fined by the Kentucky Energy and Environment Cabinet after a July warehouse fire sent nearly a 23-mile plume of alcohol into the Kentucky and Ohio rivers, killing fish. Lightning started the fire at a massive barrel warehouse near the Woodford-Franklin County line. About 40,000 barrels of aging whiskey were destroyed; the runoff poured into a nearby creek and then downstream into the rivers. Dead fish were found along 62 miles of Glenns Creek and the Kentucky River.
$23 Million
A Connecticut jury has awarded more than this amount in damages to an autistic teenager who suffered severe head injuries when his school bus crashed into a tree. Gabriel Goncalves, of Wolcott, was a sixth-grader at the time of the June 2015 crash.
Tragic and Preventable
Not Easily Rattled
“That was the most scared I’ve ever been in my whole life, and I’m not easily rattled. But when the walls start flexing and it sounds like the roof is about to cave in, I get pretty panicked and scared.” — Robert Baker, a worker at the Beechcraft aircraft manufacturing facility in Wichita, Kansas, describes his reaction to an explosion that occurred at the plant on Dec. 27 when a nitrogen line ruptured. No one was killed, but 11 people were taken to hospitals for injuries and four were treated at the scene. Baker had worked at the plant for about a month when the explosion occurred.
INSURANCEJOURNAL.COM
“John’s tragic and preventable death happened as a result of a series of safety-related failures. Learning from these failures will go a long way in making sure that similar tragedies do not happen to another performer or another family.” — Jeffery Harris, attorney for the family of stuntman John Bernecker, who fell to his death from a balcony while on the Atlanta set of the AMC show “The Walking Dead.” The family was awarded $8.6 million in a wrongful death trial that concluded last month. Bernecker’s parents claimed the accident happened because safety measures were skimped on for financial and scheduling concerns. The network and production company argued the fall during a staged fight was an unforeseen accident when Bernecker missed a landing pad 25 feet below.
JANUARY 13, 2020 INSURANCE JOURNAL | 13
News & Markets January 2020 Reinsurance Renewals Varied Significantly, Brokers Say
By L.S. Howard
T
he January 2020 reinsurance renewals saw significant variation in pricing and capacity depending on geography, line of business, cedents’ loss record and client relationships, according to two reports published by brokers Guy Carpenter and Willis Re. Indeed, the market demonstrated more divergence in both pricing and terms and conditions than at any point in many years, said a report from Willis Re, which is titled, “Willis Re 1st View – Markets Diverge.” This is certainly not a one-size-fits-all market, affirmed Guy Carpenter, in its report titled “January 1, 2020 Reinsurance Renewal: An Asymmetrical Market.” In classes where underlying performance remains positive and profitable, cedents often saw renewal prices remain level, or in some cases they saw modest rate decreases, said Carpenter in its report. 14 | INSURANCE JOURNAL | JANUARY 13, 2020
Guy Carpenter said that while reinsurance supply was largely sufficient to meet increasing demand in all but the most constrained areas, outcomes varied significantly by geography, line of business and cedent, with performance one of the key differentiators. “On the other hand, those with more strained operating conditions faced market corrections, some significant,” said Carpenter. “The most pronounced rate increases were localized to specific regions or markets, typically led by successive years of losses, deterioration in performance and/or changing risk perceptions.” The loss environment and shifting appetites of risk have been a catalyst in changing market sentiment, added Carpenter. “The impact of risk reassessments has initiated de-risking exercises throughout many segments of both the primary and reinsurance markets. As a result, many participants have scaled back or withdrawn capacity from several
(underperforming) lines of business, creating a notable impact.” Willis Re noted that some reinsurers are retreating and cutting back their in-force portfolios while others, which have been more bearish in recent years, “are seeing opportunities to capture business and relationships in a rising primary rate environment that is forecast to continue for the next few years.” In loss-free international property catastrophe business, reinsurers didn’t get hoped-for price increases given the persistent oversupply of international catastrophe capacity, continued Willis Re, noting that this resulted in flat to moderate risk-adjusted reductions for Asian, Latin American and EMEA renewals. In general, the Willis Re affirmed, U.S. placements proved more challenging than international renewals, although U.K. motor and some international liability accounts were exceptions to that rule.
continued on page 16 INSURANCEJOURNAL.COM
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News & Markets continued from page 14 Property catastrophe treaty accounts, most of which were loss-free in 2019 and not exposed to loss development, proved less demanding for cedents and their brokers because there was ample available capacity. On the other hand, non-catastrophe-exposed business saw some contraction in capacity for non-cat business as reinsurers adjusted their appetites, said a Willis Re representative, in an emailed comment about the report. While risk-adjusted pricing for the loss-free U.S. catastrophe renewals was flat to slightly up, international catastrophe business renewed flat to slightly down, said Willis Re.
Liability Accounts
Both brokers said that liability classes faced the most upward pricing pressure. Willis Re noted that such pressure was most evident for liability accounts with prior-year loss development and risk programs with an increase in loss frequency and/or severity. “A further disparity exists between pro-rata placements for long-tail liability business, showing less volatility in year-on-year pricing, and excess of loss renewals – several of which have seen sharp pricing increases as a result of the market view that severity has increased.” Carpenter said capacity deployment strategies were realigned in a number of U.S. liability classes, “as reinsurers reacted to pockets of heightened loss ratios and an increasingly difficult legal environment
— both of which are being countered by significant positive rate momentum and underwriting actions within cedents’ primary portfolios.” These loss dynamics are “driven in large part by rising social inflation and a more aggressive plaintiffs’ bar, fueled in some instances by the growing influence of litigation finance,” said Carpenter. While the above loss emergence has thus far been prevalent in the U.S. primary market, some reinsurers are also experiencing similar adverse results, Carpenter said. Further, the broker continued, a firming liability environment was also seen in several regions outside the United States, resulting from a deteriorating performance that is beginning to filter into the reinsurance market.
Retrocession, Alternative Capital Trends
In recent years, reinsurers have ceded increased levels of premium into the retrocession market with the influx of capacity from third party (alternative capital) providers investing in insurance linked securities (ILS). However, that trend was challenged at the Jan. 1, 2020 renewal with the growth of trapped capital, a lack of new capital and continued redemptions from third-party providers, Carpenter confirmed. (Editor’s note: Trapped collateral capital occurs when a cedent does not know the full extent of its losses and will thus wait to allow those losses to fully develop.) Catastrophe losses in 2019, coincided
with continued loss deterioration for certain 2017 and 2018 events, such as Hurricanes Irma and Michael and Typhoon Jebi, eroded or trapped capital for a third year in a row, Carpenter said, noting that increased participations from traditional carriers partially offset trapped third-party capital, but only within certain price parameters.
‘This shift has manifested itself more acutely in the primary market, as underperformance across multiple lines of business over several years has led to market hardening.’ “Just as increasing capital levels and retrocessional reinsurance purchasing contributed to attractive pricing and products in previous years, constrained capacity and robust demand set the scene for a complicated renewal this year, particularly for collateralized quota share and sidecar vehicles,” said Carpenter. Retrocessional property catastrophe business saw “signs of stress,” said Willis Re, particularly with aggregate placements. “Some re-pricing and re-structuring was necessary in order to secure required capacity, especially where buyers were seeking large limits,” the broker continued. “Occurrence placements were largely straightforward, especially for those buyers who have maintained consistent long-term counterparty relationships.” Willis Re said ILS capacity growth broadly stalled during the last 12 months, and in some cases declined, as a result of collateral trapped from losses emerging in 2019 as well as loss development from prior year events in 2017 and 2018. The impact of the ILS capacity reduction has been most acutely felt on aggregate collateralized retrocession contracts, quota shares/sidecars and lower end pillared products, Willis Re said, adding, however, that a small number of ILS funds showed
continued on page 21
16 | INSURANCE JOURNAL | JANUARY 13, 2020
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News & Markets Why It’s Not So Easy Getting Insurers to Defend in Sexual Harassment Cases
By Jim Sams
W
hile Harvey Weinstein’s insurers have reportedly agreed to pay $47 million to settle civil suits against the movie producer, most policyholders should prepare for an epic legal battle just to get their insurers to defend them against accusations of sexual misconduct. Insurance litigator Joan M. Cotkin, with the Pillsbury Winthrop Shaw Pittman law firm in Los Angeles, said in a recent blog post that insurers are “stonewalling insureds” who ask for a defense against sexual harassment or assault allegations. At the same time, carriers are selling sexual abuse insurance coverage through new forms as endorsements or as optional coverage in other liability policies, she said. “Yet even those cautious organizations that have purchased such coverage will not be guaranteed the insurance company will defend,” she said. “Often, a coverage lawsuit is the only way to secure coverage.” Cotkin makes no mention of Weinstein in her essay, but he and his former employer, Disney Corp., faced exactly that 18 | INSURANCE JOURNAL | JANUARY 13, 2020
situation in both civil and criminal court. More than 30 actresses and employees have filed lawsuits against Weinstein and the Manhattan district attorney has charged him with rape, predatory sexual assault and a variety of employment law violations. He was scheduled to stand trial on the criminal charges beginning Jan. 6. The New York Times reported recently that Weinstein and his bankrupt Miramax studio have reached a tentative $25 million settlement agreement with “dozens of misconduct victims.” That payout would be part of an overall $47 million settlement that would close out Miramax’s obligations in the bankruptcy filing, anonymous sources told the Times. Weinstein’s insurers started suing him even before the New York City police arrested him on May 25, 2018. The previous March, Federal Insurance Co., Chubb Indemnity Insurance Co. Vigilant Insurance Co., Pacific Indemnity Insurance Co., Great Northern Insurance Co. filed a suit seeking a declaration that the various personal insurance policies issued to Weinstein did not cover the alleged misconduct. Chubb said in the filing that the carriers
had issued multiple coverages, including homeowners, property, fine arts, auto and personal liability, from 1994 to 2018. In all 80 insurance policies had been issued to Weinstein and his family members. Chubb said all of the policies excluded liability for claims for damages as a member of a board of a corporation. Some of the policies also specifically excluded sexual molestation, misconduct, abuse or harassment. Chubb argued that Weinstein’s “egregious, intentional acts” do not constitute an accident or an offense that would warrant coverage. Each policy also excluded damages caused by intentional acts that could have been foreseen by a reasonable person. Insurers that covered Disney filed their own lawsuits. Disney is involved because it acquired Miramax in 1993. Steadfast Insurance Co. filed a suit in July 2018 asking for a declaration that an employment practices liability policy issued to Walt Disney Co. does not cover Weinstein’s actions. Steadfast paid defense costs with a reservation of rights, but argued it should be able to recoup those expenses because Weinstein’s intentional actions were excluded from coverage. Axis Surplus Insurance Co. filed a similar lawsuit on Aug. 17, 2018. The company had issued a directors and officers policy to the Walt Disney Co. with a $25 million policy limit but claimed that Weinstein’s actions were not covered because his conduct was not performed in his capacity as a director, officer or employee of Miramax. The New York Times article said Weinstein had reached a “global settlement,” but did not report on which insurers specifically are part of the deal or how they will share in the costs. Weinstein’s case is widely cited as sparking the #MeToo movement after the New York Times first reported on the accusations against him in 2017. In her blog post, attorney Cotkin said there has been a rash of lawsuits claiming sexual
continued on page 21
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News & Markets Women Win $13M in Lawsuit Against Porn Site in California
T
he owners and operators of a San Diego, Calif.based porn website must pay $12.7 million after a judge found them liable for fraud and breach of contract for lying to women about how their explicit videos would be distributed, according to a court ruling. The site, GirlsDoPorn, was sued by nearly two dozen women who claimed they were deceived and coerced into making sex videos without knowing the footage would be posted on the internet. San Diego Superior Court Judge Kevin Enright, who presided over a four-monthlong trial, ruled in favor of all 22
plaintiffs and against a total of 13 defendants, the newspaper said. Among the defendants are website owners Michael James Pratt, 36, and Matthew Isaac Wolfe, 37, and adult film actor Ruben Andre Garcia, 31. Attorneys for the defense were not immediately available for comment. Enright found that the individuals and various affiliated businesses had operated as a single business entity and therefore all were liable. He awarded the women $9.45 million collectively in compensatory damages and $3.3 million in punitive damages.
Women Sue Frontier Airlines in Colorado Over Sex Assaults by Passengers
T
wo women who say they were sexually assaulted by passengers on Frontier Airlines flights sued the Denver-based budget carrier for allegedly refusing to help them and either not having or failing to follow policies to respond to assaults. The class action lawsuit was filed Dec. 16 by two Denver residents. The Associated Press does not normally name people who have been sexually assaulted. One woman said she was sexually assaulted by a man on a flight from Denver to Providence on or about Oct. 20, 2018, and was not allowed to change her seat afterward while the other said she was sexually assaulted by a man on
a Denver to Florida flight on or about Nov. 30, 2018. Both say they reported the assaults to flight attendants, who did not report them to anyone else and did not request that law enforcement meet the planes. A Frontier spokeswoman could not comment on pending litigation. The lawsuit seeks to represent any other passengers who were sexually assaulted on Frontier flights from Dec. 16, 2017, to the present. The lawsuit notes that the FBI issued a warning in 2018 that the number of sexual assaults by passengers reported on commercial flights has been increasing. Copyright 2020 Associated Press. All rights reserved.
W2 | INSURANCE JOURNAL | JANUARY 13, 2020
The judge also granted the women’s request for ownership rights to their images that appeared on videos produced by the defendants and were posted on several adult websites. In addition, the judge ordered the defendants to take down the women’s sex videos. The judge also ordered the GirlsDoPorn website owners to prominently post in recruitment ads that videos would go on the internet. Women who sign up to make the videos must get copies of the legal agreement ahead of time and give permission before their names or personal information are used. “The money’s one thing but these guys have ruined (the plaintiffs’) lives and we have to clean this up as much as possible,” Ed Chapin, attorney
for the women, said after the judge issued the decision. At trial, defense attorneys argued that the women were over 18, understood what they were doing, accepted payment and in some cases returned to San Diego again and again to make more videos. The plaintiff’s attorneys said the videos were not immediately posted on the internet and defendants later refused requests to take down the films. Some of the women testified that although they accepted performing sex on camera to earn money, the subsequent publicity ruined their lives and careers. The women were identified in the suit only as “Jane Does 1-22.” Copyright 2020 Associated Press. All rights reserved.
Southern California Insurance Agent Arrested for Allegedly Pocketing Premiums
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alifornia Department of Insurance detectives in early January arrested insurance agent Gelinda Phann Keo, 43, on one felony count of grand theft after she allegedly pocketed a client’s insurance payment. The CDI found Keo, doing business as Global Cargo Insurance Agency, collected $5,500 in premium payment for a cargo policy for a client’s business that included international bonds. The client was notified customs could not verify the bonds, which caused delays in shipments. The insurance policy Keo secured had been cancelled due to non-payment of premium, reportedly leaving
the business without insurance coverage for months. The client paid an additional $5,500 to the insurance company in order to obtain a valid insurance policy. A CDI administrative action against Keo’s license is pending. The case is being prosecuted by the L.A. County District Attorney’s Office. INSURANCEJOURNAL.COM
Feds to Investigate Deadly Tesla Crash in California
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he National Highway Traffic Safety Administration is investigating the crash of a speeding Tesla that killed two people in a Los Angeles suburb, the agency announced. The agency wouldn’t say whether the Tesla Model S was on Autopilot when it crashed on Dec. 29 in Gardena. That system is designed to automatically change lanes and keep a safe distance from other vehicles. The black Tesla had left a freeway and was moving at a high rate of speed when it ran a red light and slammed into a Honda Civic at an intersection, police said. A man and woman in the Civic died at the scene. A man and woman in the Tesla were hospitalized with non-life threatening injuries. No arrests were immediately made. An NHTSA statement said the agency has assigned its special crash investigation
team to inspect the car and the crash scene. That team has inspected a total of 13 crashes involving Tesla vehicles believed to be operating on the Autopilot system. Results were published in two of those cases, one of which involved Autopilot. Results are pending in the other 10 cases. Another Tesla crash killed a woman in January in Indiana. State police said the driver, Derrick N. Monet, 25, of Prescott Valley, Ariz., was seriously injured after he rear-ended a fire truck parked along an interstate. His wife, Jenna N. Monet, 23, was pronounced dead at a hospital. Derrick Monet told investigators he regularly uses Autopilot mode, but didn’t recall whether he had it activated at the time. Earlier this month, a Tesla struck a police cruiser and a disabled vehicle in Connecticut but nobody was seriously hurt. The driver said he was using the Autopilot system and had
California State Fund Declares 15% Dividend for 2019 Policy Year
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alifornia State Compensation Insurance Fund announced plans to distribute a roughly $55 million dividend to its qualifying policyholders with policies that took effect between Aug. 20 and Dec. 31, 2019. The dividend amounts to 15% of the estimated annual premium reported during that time period. This announcement follows up State Fund’s August declaration of a 15% mid-year dividend that applied to all policies incepted between Jan. 1 and INSURANCEJOURNAL.COM
Aug. 19, 2019. The dividend distribution for the entire year equals roughly $160 million. Through 2019, State Fund is reporting roughly $1.2 billion in premium and $110 million in realized capital gains. Since its creation in 1914, State Fund has paid out more than $5 billion in dividends to policyholders. State Fund policyholders eligible for a 2019 dividend will begin to receive dividend payments during the second half of next year.
looked around to check on his dog in the back seat. Both Tesla and the NHTSA have advised that advanced driver assist systems such as Autopilot aren’t entirely autonomous but require human drivers to pay attention at all times. But several crashes — some fatal — have been blamed on driver inattention linked to overconfidence in such systems. In one crash report, the National Transportation
Safety Board referred to it as “automation complacency.” The National Transportation Safety Board has criticized Tesla’s Autopilot. In September, that agency said that in a 2018 crash in Culver City where a Tesla hit a fire truck, the design of the Autopilot system “permitted the driver to disengage from the driving task.” Nobody was hurt in that accident. Copyright 2020 Associated Press. All rights reserved.
Black Guest at Oregon Hotel Sues Over ‘No Party’ Promise
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n African American woman who says she was required to sign a “no party policy” when she checked into her Portland, Ore. hotel filed a $300,000 lawsuit against the Marriott chain, claiming it singled her out because of her race. Felicia Gonzales claims the front desk clerk at the Residence Inn by Marriott Portland Downtown/ Convention Center told her that all guests had to sign the policy. But Gonzales says she watched white guests check in after her who weren’t required to sign it.
The company doesn’t comment on pending lawsuits. The no party policy, provided by Gonzales’ attorneys, says it's to inform all guests of noise limits and “not to insinuate any distrust in the ‘average’ guest.” The suit seeks $300,000 for embarrassment, frustration, humiliation and “feelings of racial stigmatization,” and says it could later be amended to add $1 million in punitive damages. The suit was filed in Multnomah County Circuit Court. Copyright 2020 Associated Press. All rights reserved.
JANUARY 13, 2020 INSURANCE JOURNAL | W3
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Business Moves
National
Cigna, New York Life
Health insurer Cigna Corp. said has agreed to sell its disability insurance and accidental death coverage unit for company employees to New York Life Insurance Co for $6.3 billion. The company said it expects to use the net proceeds of about $5.3 billion for share repurchases and repayment of debt in 2020 and raised its share repurchase authority by $3 billion to $4 billion.
East
Relation Insurance Services, S.T. Good Insurance
Relation Insurance Services, a privately owned insurance brokerage that offers property and casualty, risk management, employee benefits and TPA-consulting services through its family of brands across the U.S., has acquired S.T. Good Insurance Inc., an insurance brokerage in Delaware and the tri-state area. This acquisition further expands Relation’s national footprint and is Relation’s first acquisition in the region. Led by Jeffrey Good, S.T. Good is headquartered in Newark, Del., and has been providing commercial insurance services to middle market clients for more than 40 years. S.T. Good employees will continue operating out of the firm’s existing location in Newark. The acquisition marks Relation’s fifth this year as the company continues to deepen its specialty service offerings, INSURANCEJOURNAL.COM
broaden its national footprint and continue its steady growth trajectory.
Alera Group, HR inTune
Alera Group, a national employee benefits, property and casualty, risk management and wealth management firm, has acquired the business assets of HR inTune, effective October 1, 2019. HR inTune, located in Berwyn, Penn., is a human resource consulting firm that helps to address complex workforce management needs through different configurations of HR outsourcing. The firm offers an array of HR services, including compensation program implementation, HR compliance, leadership training, technology analysis and support, and more. HR inTune joins Alera Group through its Philadelphia location. The HR inTune service team will continue serving clients in their current roles. Based in Deerfield, Ill., Alera Group’s more than 1,800 employees serve thousands of clients nationally in employee benefits, property and casualty, risk management and wealth management.
Element Risk Management, Barnes & Phillips Insurance & Financial Services, Crawford Insurance Company, Brenner Insurance
Element Risk Management has acquired three new insurance agencies in Virginia and Pennsylvania. Barnes & Phillips Insurance & Financial Services of Woodstock, Va., Crawford Insurance Company of Strasburg, Va., and Brenner Insurance in Hollidaysburg, Penn.,
are now part of the Element Risk family. Before joining Element Risk, Barnes & Phillips served customers in Virginia’s Shenandoah Valley for more than 50 years. The staff will remain in place to continue serving customers in Woodstock, New Market and the surrounding area. Barnes & Phillips President Blake Phillips will move into a new role as vice president of Commerical Lines. The staff at Crawford Insurance Company, also located in the Shenandoah Valley, remains unchanged as well. They will continue their presence in the community, remaining in their office on East King Street. Family-owned and operated since 1919, Brenner Insurance is the most recent agency to join Element Risk. Its staff will also remain in place at its Uptown Hollidaysburg, Penn., office. Element Risk Management is an independent insurance agency based out of West Chester, Penn. Element provides personal, commercial and specialty insurance, as well as risk management.
Midwest
High Street Insurance Partners, InPro Insurance Gro
High Street Insurance Partners, an insurance brokerage platform owned by the private equity firm Huron Capital, has acquired InPro Insurance Group, an independent insurance agency in Troy, Mich.. InPro provides commercial, group and personal insurance to businesses ranging from local governments to maintenance services and industrial manufacturing. The acquisition is High Street’s first in Southeast Michigan and gives the company access to InPro’s diverse customer base. InPro President Dave Goodman will remain active in his current role at InPro and is expected to serve as a valuable resource as High Street looks for additional partners across the region. InPro is the seventh acquisition for Traverse City, Michigan-based High Street since its formation by Huron Capital in mid-2018.
continued on page 20
JANUARY 13, 2020 INSURANCE JOURNAL | 19
Business Moves continued from page 19 Based in Detroit, Huron Capital is an operationally focused private equity firm with a long history of growing lower middle-market companies through its proprietary ExecFactor and buy-and-build investment models.
compensation, employee benefits, underwriting, surety, and financial products and services to clients nationwide, including agriculture, aviation, construction, energy and marine, environmental, financial institutions, healthcare, law firms, public entities, real estate, and tribal nations.
USI Insurance Services, Marcotte Insurance Agency
Alera Group, West Texas Insurance Exchange
USI Insurance Services has acquired the Omaha, Neb.-based benefits, retirement and risk management advisory firm, Marcotte Insurance Agency Inc. Founded in 1927, Marcotte is a multi-line insurance agency that has been serving the Midwest for nearly a century. The agency has 48 employees, in Omaha and Kearney, Neb., all of whom will be joining USI under the continued leadership of Marcotte’s president, David Bushey. Headquartered in Valhalla, N.Y., USI is an insurance brokerage and consulting firm that delivers property and casualty, employee benefits, personal risk, program and retirement products and services to large risk management clients, middle market companies, smaller firms and individuals.
South Central
Alliant Insurance Services, TCOR Management
Alliant Insurance Services has acquired TCOR Management, a Texas-based risk management firm. The acquisition will expand the Alliant Energy & Marine talent base by 50 specialists and broaden the surety footprint across Texas. Founded in 1972, TCOR has offices in New Braunfels, Beeville and Tyler, Texas. TCOR provides commercial insurance to the energy and construction industries as well as surety, loss control services, and employee benefits. Rick Dudney, managing partner of TCOR, along with the entire TCOR team, will join the Alliant Energy & Marine group and continue serving clients from its Texas office locations. Headquartered in Newport Beach, California, Alliant Insurance Services Inc. provides property and casualty, workers’ 20 | INSURANCE JOURNAL | JANUARY 13, 2020
Alera Group, an independent national insurance brokerage and wealth management firm, has acquired West Texas Insurance Exchange Inc., located in Odessa, Texas. West Texas Insurance Exchange serves the insurance needs of many businesses throughout Texas and across the United States. The firm concentrates on the oil and gas industry and the trucking industry, while serving clients in a variety of industries. Established in 1962, West Texas Insurance Exchange offers expertise in all types of commercial business insurance, including commercial auto, umbrella liability, workers’ compensation insurance, and employee benefits. All West Texas Insurance Exchange employees will continue operating out of the firm’s existing locations under the name West Texas Insurance Exchange, an Alera Group Company LLC. Based in Deerfield, Illinois, Alera Group’s over 1,800 employees serve thousands of clients nationally in employee benefits, property and casualty, risk management and wealth management.
Southeast
Brown & Brown, Insurance Management Group
J. Scott Penny, chief acquisitions officer of Brown & Brown Inc., and Mark K. Ackerman, the sole shareholder of Insurance Management Group Inc., announced that Brown & Brown of South Carolina Inc. has acquired substantially all of the assets of IMG. IMG was founded in 1977 and specializes in providing a wide range of employee benefits and property and casualty insurance products and services to busi-
nesses and individuals throughout South Carolina. Following the acquisition, the IMG team will operate from their existing office as a branch location of Brown & Brown’s South Carolina retail operations under the leadership of Todd Tyler, executive vice president of Brown & Brown of South Carolina. Mike Keeby, a regional president in Brown & Brown’s Retail Segment, will have oversight responsibility over the newly combined South Carolina retail operations. Brown & Brown Inc. is an insurance brokerage firm, providing risk management to individuals and businesses.
West
AssuredPartners, First Service Insurance Agents & Brokers
AssuredPartners Inc. has acquired First Service Insurance Agents & Brokers Inc. of Roseville, Calif. The team of 28 First Service Insurance staff will remain under the operational leadership of Doug Lindley and Ed Barr. The agency currently reports $5 million in annualized revenues. First Service Insurance offers a variety of services, including specialized coverage for contractors. Lake Mary, Fla., AssuredPartners acquires and invests in insurance brokerage businesses (property/casualty, employee benefits, surety and MGU’s) across the U.S. and in London.
Inszone Insurance, James Swiniuch Agency
Inszone Insurance Services has acquired James Swiniuch Agency Inc. in Tucson, Ariz. James Swiniuch Agency is focused on writing preferred personal lines insurance in Tucso. James Swiniuch Agency becomes the fourth acquisition for Inszone Insurance in Arizona, and ninth on the West coast. Inszone Insurance Services is a privately held Insurance agency based in Sacramento Calif. focused on personal and commercial Insurance for both small and large businesses. INSURANCEJOURNAL.COM
News & Markets continued from page 16 organic capital growth and could therefore gain access to new retrocessional and specialty business at improved prices along with traditional reinsurer capacity. “All these shifting market dynamics prompted retrocession buyers to weigh the alternatives of accepting enhanced volatility potential or considering alternative vehicles, such as catastrophe bonds,” said Carpenter. These combined factors resulted in “significant retrocession rate increases across several types of coverage at the Jan. 1 renewals, “albeit with marked distinctions depending on products, structures, relationships, risk tolerances, loss experiences and performance,” the broker added.
Primary Market Trends
Carpenter said views of risk are changing and risk appetites are responding accordingly for both reinsurers and insurers. “This shift has manifested itself more acutely in the primary market, as underperformance across multiple lines of business over several years has led to market hardening,” said the broker, pointing to Marsh’s Global Insurance Market Index, which shows global commercial insurance pricing, in all lines of business and all regions, rose by 8% in the third quarter of 2019. This marked the eighth consecutive quarter of price increases and it represents the largest rise since the index was initiated in 2012, said Carpenter, quoting its sister company, Marsh. Willis Re affirmed that primary pricing trends have continued to outpace reinsurance pricing adjustments. “This has allowed reinsurers to factor in this positive development, thereby reducing pressure to heavily adjust ceding commissions for many pro rata renewals,” the broker continued.
Capacity Trends
“Overall demand for reinsurance has remained strong and, other than retrocession aggregate and some treaty aggregate covers, most buyers have been able to secure the capacity they require albeit at considerably increased prices for some INSURANCEJOURNAL.COM
stressed classes of business,” according to Willis Re. Some ceding company clients, particularly large global insurers, have decided to retain more risk given the improvement in the underlying business, but other clients have made the transition to excess of loss structures if they were unable to agree satisfactory ceding commission terms with reinsurers, said Willis Re. Pricing corrections in the property catastrophe reinsurance market over the last few years have been localized, and mitigated to some extent by sufficient levels of capacity, said Carpenter, noting that the reinsurance sector, in the main, operates in an environment of abundant capital and capacity. Willis Re said client-centric underwriting by reinsurers was a factor during the January renewals, with preferred clients being able more easily to achieve their renewal requirements both in terms of pricing and conditions than those clients viewed as non-core partners. “An understandable outcome of this has been a wide variance in the quoting process which increased the challenge of establishing market clearing prices,” the broker went on to say. “The renewal period witnessed some difficult negotiations, but the reinsurance market managed to provide its clients with ongoing capacity across most lines of business. The market continues to react in a logical fashion, providing sustainable support for the primary insurance industry, thereby helping to underpin wider
market growth,” said James Kent, Global CEO of Willis Re in a forward to the report. In a statement accompanying the report, David Priebe, chairman of Guy Carpenter, said: “The reinsurance market enters 2020 in a solid position with initial analysis of dedicated reinsurance capital up slightly as compared to a year ago, bolstered by mid-single digit growth in rated capital in 2019. Accounting for the impact of trapped capital, total available capital at January 1 is close to flat. While reinsurers will continue to deploy capacity cautiously, with cedents’ performance and loss experiences scrutinized closely, the sector remains well capitalized overall.”
continued from page 18 harassment in the workplace. A rash of policyholder lawsuits seeking coverage followed. She said most insurers will seek a declaration that they owe no coverage if it looks like the case will be expensive to defend. “Even the most cautious and careful insured, when faced with a high-exposure claim in a lawsuit, will likely have to fight with its insurance companies to secure the insurance benefits it has purchased,” Cotkin said. “Of course, providing notice to the insurance company of any lawsuit or claim made against the insured (early and often!) is essential.”
Sams is the editor of ClaimsJournal.com
JANUARY 13, 2020 INSURANCE JOURNAL | 21
People National
Kelly Geary as National
Executive Risk & Cyber Practice leader.
Sheri Wilbanks
AXA XL Risk Consulting has appointed Sheri Wilbanks as its global Casualty & Environmental Lines of Business manager. Wilbanks will be responsible for building a global casualty and environmental risk consulting practice to provide risk management services for clients and AXA XL’s underwriting teams. A chemical engineer by training, Wilbanks’ insurance career includes tenure with AIG for 15 years, most recently serving as global innovation lead for AIG’s Client Risk Solutions division. Prior to that, she served as Casualty and Financial Lines regional risk consulting manager for AIG Asia. To her new role at AXA XL, she also brings experience with Procter & Gamble, where she began her career as a research and development engineer. She will be based in New York and report to Corinne Vitrac, chief executive of AXA XL Risk Consulting.
East
EPIC Insurance Brokers and Consultants has named
Kelly Geary
Geary and her team bring expertise in cyber and executive risk to EPIC and its clients. Geary has spent the past 20 years focused on cyber and executive risk solutions for organizations. In her role as practice leader, she will lead and direct all cyber and executive risk initiatives across the organization. Geary will also focus on privacy related legal and regulatory changes impacting the organization and provide support in risk management counseling and claims advocacy as part of the Lemme Group, a division of EPIC.
Brian Clifford
Saxe Doernberger & Vita P.C. (SDV) has hired Associate Brian J. Clifford to its Northeast office. Clifford has almost a decade of experience in litigation, including insurance coverage, from depositions and discovery through mediations, trials and appeals. He has
22 | INSURANCE JOURNAL | JANUARY 13, 2020
represented clients on a range of matters, from advising on general liability and excess policies to defending health care providers in medical malpractice actions and trying cases involving complex constitutional and statutory issues. SDV is headquartered in Trumbull, Conn.
Southeast
Lisa Frist
McGriff, Seibels & Williams has made two
hires to its Financial Services Division in Atlanta. Lisa Frist has been added as a claims account executive. Frist joins McGriff with more than eight years of legal experience. Prior to joining McGriff, she served as a litigation and trial practice attorney with the Atlanta office of the international law firm Alston & Bird LLP. Frist will use her experience to advocate for and assist McGriff’s clients in achieving recoveries available through the performance of their insurance contracts, as well as provide advice and insight to clients regarding coverage and claim issues that arise. McGriff, Seibels & Williams also named Vic Gupta as a senior vice president and marketing
account executive in its Financial Services Division.
Vic Gupta
Gupta joins McGriff with 22 years of experience in the insurance industry. Prior to joining McGriff, he served for approximately 14 years - most recently as a vice president - with USI Insurance Services and its predecessor, Wells Fargo Insurance Services. Prior to his brokerage experience, Gupta held various underwriting positions with Chubb and Travelers. Alliant has added Atlanta-based Allen Madden to its Southeast property and casualty team as vice president. Madden will provide integrated risk and insurance products to clients throughout the region. Madden joins Alliant with more than two decades of experience in commercial insurance and financial services. He also has targeted experience managing the risks of the financial sector. Prior to joining Alliant, Madden was senior vce president with a national insurance brokerage and consulting firm.
Beecher Carlson Insurance Services LLC has appointed Brad Darr as Client
Solutions leader, based in Atlanta. In this role, Darr will report directly to Beecher Carlson CEO Joe Siech. As Client Solutions leader, Darr will work to add connectivity throughout the organization. By working with the different product and industry groups within Beecher Carlson, he will facilitate increasing efficiencies and areas for new product development and innovation. Siech said Darr will guide Beecher Carlson’s efforts to increase collaboration throughout the organization and within Brown & Brown, of which Beecher Carlson is a wholly-owned subsidiary.
South Central
Brandon Lege
Stonetrust Commercial Insurance Co., based in Baton
Rouge, La., hired Brandon Lege as director of Loss Prevention and John Moore as a production underwriter. Lege was formerly the safety and training manager for Texas Petroleum Investment Co. in Lafayette and has more than 20 INSURANCEJOURNAL.COM
years of safety and loss prevention experience. Lege will have responsibility for providing risk management and safety services to all Stonetrust policyholders in eight states including Louisiana, Mississippi, Texas, Oklahoma, Arkansas, Nebraska, Missouri and Tennessee. Moore will work with agents in Stonetrust’s Mississippi and Tennessee region. He was formerly a production underwriter with AmFed.
Michael Robbins
Wholesale insurance broker Midlands Management Corp. has appointed Michael Robbins to a brokerage
position in Dallas. Robbins will be responsible for the solicitation of new and renewal commercial business for large and complex accounts. Robbins brings more than 10 years of experience, including technical underwriting expertise, relationships in the industry and a number of years as a commercial producer for a retail agency.
Covington, Louisianabased Fidelis Group Holdings LLC (FGH) has created a new senior management structure INSURANCEJOURNAL.COM
for the company and its subsidiaries, Continental Underwriters Ltd. (CU), Fidelis Marine Underwriters LLC (FM) and Fidelis Claims Service LLC (FCS). Under the new structure, H. Elder Brown Jr. has been named chairman of Fidelis Group. He previously served as president and CEO of Fidelis Group and Fidelis Marine and chairman of Continental Underwriters. Elder Brown III has been named CEO of Fidelis Group. Previously, he served as vice president of Fidelis Group and its subsidiaries, Fidelis Marine and Continental Underwriters. Baldwin Brown has been named chief underwriting officer of Fidelis Marine. He previously served as executive vice president. Teddy B. Boone has been named chief administrative officer of Continental Underwriters. Previously, he served as president and CEO. The changes come as Fidelis Group marks its 50th year in business.
to vice president and chief information officer and Tim Heyroth to vice president and chief sales officer. Thiel joined SECURA in 2015 as vice president of Information Technology. He has more than 22 years combined IT and corporate strategy experience in the insurance industry and other fields. Prior to SECURA, Thiel served as vice president of Information Technology and vice president of Application Development for Ameriprise Auto & Home Insurance. He also held management roles with Schreiber Foods and Kimberly-Clark. Heyroth joined SECURA in 1997 and has held roles in IT, agency automation, as a market manager in Missouri and Illinois, and as a sales director for Illinois, Indiana and Kentucky. Heyroth was promoted to vice president of Sales in April 2014. In this position, he is responsible for developing and implementing sales strategies for all lines of business.
Insurance. Vetter joined ERIE as a commercial underwriter in 1993, later becoming district sales manager in Indiana. He has served as a state commercial insurance manager since 2010, helping to grow commercial premium in the state of Indiana.
Tim Frawley
J.M. Wilson promoted Tim Frawley to senior
property and casualty underwriter in the company’s Arlington Heights, Ill., office. He is responsible for quoting new and renewal accounts for a variety of commercial property and casualty risks, as well as servicing accounts for independent insurance agents. Frawley joined J.M. Wilson in 2016 as an assistant property and casualty underwriter before being promoted to property and casualty underwriter in 2017.
West
Midwest
Bob Vetter
Bob Vetter has
Todd Thiel
SECURA Insurance
in Neenah, Wisc., promoted Todd Thiel
been appointed as vice president and branch manager in the Indiana branch of property and casualty insurer Erie
Genna Burnett
United Valley Insurance Services Inc. has named Genna Burnett as a marketing
specialist. United Valley
has also named Nichole Alanis as a member relations specialist. Burnett assists members on marketing and placing workers’ comp accounts with carriers. She previously worked as an underwriter at Employers Insurance, and prior to that, she was a bank teller. Alanis assists members and vendors with onboarding and trainings. Nichole previously worked as an underwriting support representative at Employers, where she spent the last three years. Prior to that she was a life agent. Idaho Department of Insurance Director
Dean L. Cameron
has been voted vice president-elect of the
National Association of Insurance Commissioners.
Cameron served as Secretary-Treasurer of the NAIC for 2019. The NAIC is part of the state-based system of regulation.
Burns & Wilcox has named Michelle Clark as a managing director in Denver, Colo. Clark oversees day-to-day operations of the Denver team and leads the office’s growth strategy. She has more than 25 years of experience in the insurance industry. She was most recently an executive vice president and broker for RT Specialty.
JANUARY 13, 2020 INSURANCE JOURNAL | 23
Special Report: Employment Practices Liability
Employment Practices Liability Claims in 2020 Biometrics, Cannabis, Sexual Harassment and ADA Website Compliance Top Concerns By Elizabeth Blosfield
A
fter Back to the Future 2 was released in 1989, moviegoers could observe Marty McFly as he traveled to his version of 2015 where fingerprints were used to identify a person, to unlock the front door of a house and to pay a taxi. Thirty years later, the use of biometric identifiers isn’t something only imagined on the big screen. A biometric identifier is any body part that is unique to a person, such as a face, a handprint or a voice, and these identification methods have become increasingly
popular instead of traditional username and password systems, explained Claudia Oliveri, assistant vice president for EPL Claims at Starr Adjustment Services. Oliveri was speaking on a panel at the 2019 Professional Liability Underwriting Society (PLUS) Conference, held in November in National Harbor, Md. Many proponents of biometric data usage today tout its reliability in place of ID cards or passwords, which can be easily lost or stolen, she said. However, one issue Back to the Future 2 didn’t touch on during its foreshadowing is the insurance challenge presented by biometrics. “Biometric information is going to be the number one new claim in 2020?” moderator Kevin O’Hagan, founding partner of O’Hagan Meyer, asked panelists.
24 | INSURANCE JOURNAL | JANUARY 13, 2020
“Yes,” Oliveri replied. This is because the use of biometric information has brought concerns regarding privacy issues in the workplace, and with that, EPL exposures, she explained. “Opponents [of biometric identifiers] are more concerned and worried about the threat of identity theft and data breaches,” she said. “If you lose your fingerprint, there’s no way you’re going to be able to replace it.” With this in mind, concerned states have been passing privacy statutes. In 2008, Illinois was the first state to pass BIPA, or the Biometric Information Privacy Act. While the act doesn’t prohibit the use or collection of biometric information, it sets out key requirements. For example, if private companies or employers want
to use biometrics for things like timekeeping, Oliveri said, they will need to give notice to employees about the intention to collect their fingerprints. They will also need to obtain employees’ written consent and have a retention policy in place regarding how the data will be used, stored and destroyed when it is no longer needed. “If there are any sort of violations, you have penalties imposed,” she said. “$1,000 for negligent violations or $5,000 for intentional violations.” For the insurance industry, BIPA actions have begun to crop up particularly in the EPL realm because employees are bringing many of these actions, Oliveri said. “Depending on the wording of the policy, particularly if an invasion of privacy is an enumerated peril, there’s INSURANCEJOURNAL.COM
usually a trigger there,” she explained. “Then there’s cyber liability, which everyone I hope has, and that would apply as well depending on the [policy’s] definition of privacy and wrongful act.”
‘Biometric information is going to be the number one new claim in 2020?’ Yes. In addition, the California Consumer Privacy Act (CCPA), which requires companies to report to customers upon their request what personal data they’ve collected, why it was collected and what third-parties have received it, is set to begin January 2020. The CCPA not only applies to biometric information, but also gives consumers the right to pursue a private right of action regarding other personal information such as social security numbers or bank account numbers. “I can envision seeing some claims coming on the horizon,” Oliveri said. Although Oliveri labeled biometric information as the top claim area to watch for in 2020, she and other panelists discussed additional areas of concern in the EPL space next year as well, namely cannabis legalization,
Cannabis Legalization
Although the legalization of cannabis has been gaining traction at the state level, the fact that it is still a federal crime to possess, sell or use marijuana INSURANCEJOURNAL.COM
has presented some conflicts in the workplace and elsewhere, said Laurie Mandell, assistant vice president and claims manager in Chubb’s Professional Lines group. “When I first presented this topic about five years ago, 25 states and Washington D.C. had legalized the use of marijuana in some form,” she said. “Today, it would be easier to go through a list of states that had no legalization than to mention the ones who legalized.” Despite cannabis legalization being a hot topic among the insurance industry, particularly at conferences, Mandell said the industry has not seen it evolve as a driving source of claims in the EPL world just yet. She said she believes this is because cannabis legalization is relatively new, so the background law hasn’t been fully developed and states haven’t found their footing in terms of building a cohesive caseload as a precedent. “Why do we view this as being something that’s a hot topic now?” she asked. “Well, first of all, you would assume
the more states that legalize, the more pressure that will be put on the federal government as a whole to take some kind of action.” This, coupled with the fact that states with laws in place have had an increase in employee friendly judgments, means more cases are likely to be seen, Mandell said. She pointed to some examples of cases that have already popped up involving the Americans with Disabilities Act (ADA). “Americans with Disabilities Act prohibits disability discrimination and requires a reasonable accommodation,” she said. “However, the ADA also expressly excludes any employee accommodation leading to the use of medical marijuana in the workplace. And that sets off a conflict.” Additionally, an intersection has been observed between disability claims and family medical leave claims, in which employees returning from approved medical leave test positive for marijuana and are terminated from their employment, Mandell explained. “Cannabis is still the number one drug that pops up in employee drug testing,” she
said. “You can see where there is a concern on that level.” Concerns around testing positive have also arisen because there is no consensus among states about how legalized medical marijuana is handled in the workplace, she added. “You also have almost two sets of different forms of legalization related to medical marijuana,” Mandell said. “You have employers in certain states allowed to enforce the zero-tolerance policy and set their own rules. And then you have states where they tell the employers, ‘No, you cannot terminate your employee if they test positive.’” Another likely issue going forward for states that have legalized cannabis is how to measure if somebody is high when they come into the office, she added. “If someone comes in tired, or someone’s clothes smell like weed, is that enough for [an employer] to say you’re intoxicated?” she said.
Sexual Harassment Issues in the Workplace
While cannabis legalization has been a hot topic in the
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Special Report: Employment Practices Liability continued from page 25 insurance industry, another workplace issue that has garnered increased awareness is sexual harassment. Barry Postman, board certified civil trial attorney at CSK Legal, explained that although Equal Employment Opportunity Commission (EEOC) charges in general are down, sexual harassment in the workplace is one area where these charges have risen slightly. “What we’re seeing is the EEOC’s role in these investigations is much more significant than it’s ever been,” he said.
‘We have moved on because the plaintiff’s bar has found a larger location that we all love to visit and stay in, which is the internet world.’ Postman stated the reasons for this could be increased awareness and pressure to pursue these actions, as well as the EEOC having more time as overall charges are down. “It’s not just the investigations; it’s also the enforcement,” he said. “They’re filing more lawsuits than they have ever filed.” In fact, just last year, the EEOC filed 66 lawsuits, with 44 of those being related to sexual harassment — a more than 50% increase from 2017, according to EEOC’s Preliminary Fiscal Year 2018 Sexual Harassment Data report. The EEOC also collected $70 million for victims of sexual harassment in 2018, which was up from $47.5 million in 2017, the report stated. Another issue that has
arisen on the back of sexual harassment in the workplace is co-employment relationships, Postman added. “I don’t think it’s a new thing,” he said. “I just think there’s more awareness of co-employment relationships post-Me Too. People are aware of the perhaps impropriety of it. It’s something that’s talked about. It’s something that’s reported on, and it’s an issue we have to deal with,” Postman said.
ADA and the Internet
Outside of the office, another area to watch in the EPL space is third-party claims regarding ADA website cases, panelists said. “These are the same claims that we used to see with the brick-and-mortar stores where a person went from restaurant to restaurant to restaurant and claimed they could not gain access because there were no ramps,” Mandell said. “We have moved on because the plaintiff’s bar has found a larger location that we all love to visit and stay in, which is the internet world.” Overall, ADA lawsuits have nearly tripled over the past five
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years, Mandell said. “The first half of 2019 is 12% higher than the number of suits that we saw in 2018,” she explained. “But more interestingly, there were more website access suits filed in the first half of 2018 than in all of 2017.” O’Hagan pointed to one trend that could be contributing to the amount of lawsuits in which the same company is sued multiple times, even after reaching a settlement to remediate its website. “Once they remediate it, because the guidelines are so loose and it’s impossible to enforce, another blind person can come to court and claim that the new version doesn’t quite meet the standards,” he said. “I’ve represented people who have had four or five claims for the same website.” Part of the problem is the current approach used to attack these claims by companies and insurers isn’t working, Mandell said. “[They’re saying], ‘We’re going to dive in, we’re going to either resolve the problem or make a de minimis settlement to get rid of this claim, and let’s hope that nobody else brings
a suit,” she said. “This doesn’t put the activity to bed.” Instead, the best way to handle these issues is to have website experts review and approve of the current system, as well as to make sure employers are savvy about job application forms on their websites, Mandell said. “Some people come in and claim, ‘I’m an applicant, and I was affected or disadvantaged by your website not being compliant for me,’” she said. Other top sources of EPL claims mentioned during the panel discussion related to transgender employee discrimination, employers exercising religious objections, the gender pay gap and gig economy employees unable to claim independent contractor status. As panelists discussed how these areas are creating new exposures in EPL insurance, they urged the industry to pay close attention to these topics heading into 2020. “All of the topics covered today are new exposures for EPL insurance that I would say didn’t exist five or 10 years ago,” O’Hagan said, “and that we’re paying claims on.” INSURANCEJOURNAL.COM
My New Markets LumberPro Worker’s Compensation Program
Market Detail: Novum Underwriting Partners (www.novumuw.com) represents multiple A.M. Best A-rated carriers that provide workers compensation to the lumber, wood products and building material industries. A workers compensation dividend option is also available to those who qualify. Novum’s experience is rooted in manufacturing, finished wood products and expands into retail/wholesale businesses. Available limits: As needed Carrier: Unable to disclose, admitted States: All states except Alaska and Hawaii Contact: Nate Mathis at 812-340-8916 or e-mail: nate.mathis@novumuw.com
Franchisor Sponsored Cyber Insurance for Franchisees
Market Detail: Miami Specialty Risk’s (www.miamispecialtyrisk.com) cyber coverage is available for privacy and security breaches not caused by the franchisor or its third party service providers. Maximum limit of $2M per occurrence/ aggregate; minimum deductible of $2,500 and minimum premium of $500. Coverage highlights: full first and third party cyber coverage for franchisee-controlled computer system; affirmative coverage for PCI fines, penalties, and assessments; optional coverage for breach response expenses outside the limit; franchisor granted vicarious liability coverage for breaches caused by the franchisee; customer attrition loss (coverage for unusual business churn following a breach event); customer attrition mitigation coverage sub-limit; coverage for value of compromised gift/rewards cards. Franchisees can
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receive discounts for participating in this program. Available limits: Minimum $1 million, maximum $2 million Carrier: Lloyd’s of London States: All states Contact: Mary Guzman at 404-290-8155 or e-mail: mary.guzman@miamispecialtyrisk. com
Middle Market
Market Detail: McKee Risk Management (www.mckeerisk.com) has secured partnerships with highly-rated carriers to provide middle market insurance in all 50 states. Anything that doesn’t fit in its other specialty programs could find a home in the Middle Market unit. This includes coverage options for restaurants (incl. liquor), apartment buildings, hotels, banks, retail/wholesale shops, technology ventures and more. Available limits: Minimum $50,000 Carrier: Unable to disclose, admitted States: All states except Ky., N.Y., and Wa. Contact: Jon Schauer at 484-674-4067 or e-mail: jschauer@mckeerisk.com
Restaurant Insurance Offered by International Underwriting Agency
Market Detail: International Underwriting Agency (www.iua.bz) target segments include: franchise restaurant, restaurant chain; fast food/take out; food truck (NY, CT, VA, DC); family restaurant; liquor sales up to 100%; sports bars; night clubs; exotic clubs; comedy clubs. All AM Best A- or better carriers available. Lines offered include: general liability; liquor liability; property; umbrella; EPLI and workers’ compensation as package or monoline. Available Limits: As needed Carrier: Unable to disclose, admitted or non-admitted available. States: Ala., Ariz., Calif., Colo., Conn., Dela., D.C., Fla., Ga., Ill., Ind., Ky., La., Md., Mass., Mich., Neb., Nev., N.J., N.Y., N.C., Ohio, Ore., Pa., R.I., S.C., Tenn., Texas, Va., W. Va., and Wisc. Contact: Danny Lee at 718-4618088 or e-mail: dlee@iua.bz
Recall Crisis Recovery PLUS (RCR PLUS®) Market Detail: Professional Liability
Insurance Services, Inc. – Underwriting Facilities (www.plisinc.com) offers essential coverage for manufacturers. All manufactured consumer goods considered under this program including food and beverage. A manufacturing facility can be challenged with a recall, government ban or adverse publicity event at any moment. Recent legislation and stricter regulations may result in a costly recall experience even for the most cautious manufacturer. Recall Crisis Recovery Plus has been developed by PLIS, Inc. to provide coverages for manufacturers in all industries. RCR PLUS reimburses for revenue loss, rehabilitation and related recall expenses. PLUS contains coverage options including adverse publicity, insured’s customer’s loss of profits, counterfeit products coverage and inoculations, vaccinations, and testing. In addition, crisis management assistance for this policy plays an important role in preventing and managing recall events. The knowledge and expertise in various pathogens, ever-changing regulations and business recovery methods are crucial when dealing with government authorities and the media. Obtain coverage and gain a crisis management resource to assist anytime throughout the policy period. Available limits: Maximum $18 million Carrier: Certain Underwriters at Lloyd’s, non-admitted States: All states Contact: PLIS Product Team at 512-328-0677 or e-mail: underwriting@plisinc.com
This section brought to you by Insurance Journal's sister website:
www.mynewmarkets.com
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Special Report: Employment Practices Liability Potential Wage-and-Hour Claims Could Rise Under
New Overtime Rule By Andrew G. Simpson
N
ew federal rules on overtime pay, which began January 1, change for the first time since 2004 the threshold for who is entitled to overtime pay — and who is not. The new rule raises the income threshold that employees must reach to $684 per week, or $35,568 per year, to qualify as exempt from overtime. Employers are allowed to count up to 10% (or $3,556.80 per year) in bonuses or commissions towards the threshold. Workers making less than the threshold are entitled to earn one and one-half times their regular rate of pay for all hours over 40 during a work week.
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Failure to properly implement the new regulations could expose employers to wage-and-hour type claims under the Fair Labor Standards Act (FLSA). For some employers, that could mean employment practices liability insurance claims. That’s one reason Chris Williams is trying to raise awareness. Williams is employment practices liability product manager for Travelers. He is responsible for employment practices underwriting strategy, including policy language, target markets, overall profitability of the book, marketing, and serving as a general resource for underwriters on employment practices. In a recent talk with Insurance Journal, Williams discussed the overtime rule change and what it means for employers, employees and insurance. There’s so much else going on in the area of employment practices, the overtime pay issue hasn’t gotten much attention. “That is a concern because the law’s already fairly complicated for employers to comply with,” Williams said. “Then, anytime you have a change in a complex law, you’re likely to see one, compliance challenges, and two, potential litigation coming out of that.” Williams said the starting point is understanding the basics of the current rule compared to the new rule that starts in January.
‘Employers are going to have to one, figure out who those individuals are. And two, they’re going to have to make sure they’re tracking their time, and if those folks are working more than 40 hours per week, they’re going to have to make sure that they’re compensated on a time-and-a-half basis for that time in excess of 40 hours per week.’ INSURANCEJOURNAL.COM
Under the FSLA, employees that satisfy three requirements — they are paid on a salary basis, they are paid more than $23,660 per year, and they perform certain functions considered executive, administrative, or professional duties — are currently not entitled to overtime wages. “For example, if you’re an executive, you’re a manager in an organization, you’re managing folks, you have the ability to hire, to fire people, and you make more than $23,660 per year, you are not entitled to overtime,” he explained. Exempt executive, administrative and professional employees include teachers and academic administrators in elementary and secondary schools, outside sales employees and employees in certain technology occupations, according to the Department of Labor. Certain casual, seasonal and farm workers are also exempt from the overtime requirement. For the new year, while the definitions and exemptions for those doing executive, administrative, professional and other work remain, the key change for employers to be aware of is that the salary threshold is going up from $23,660 to $35,568 per year. “As a result of that, you’re going to have folks that are now within that pay band
that are going to be entitled to overtime that previously weren’t entitled to overtime,” Williams said. “Employers are going to have to one, figure out who those individuals are. And two, they’re going to have to make sure they’re tracking their time, and if those folks are working more than 40 hours per week, they’re going to have to make sure that they’re compensated on a time-anda-half basis for that time in excess of 40 hours per week.” While $35,568 is the threshold and where the primary impact is felt, there is an upper limit as well. The high threshold under what is called the highly-compensated employee rule is going from $100,000 to $107,432. “In other words, if you make more than $107,000, you have some administrative or executive functions within the organization, and you’re doing non-manual work, you’re not going to be entitled to overtime,” he explained. The upper limit rarely is an issue. “We don’t see very much claim activity arising out of those individuals. It’s much more on the lower spectrum,” Williams noted. In addition to the federal rule, depending on the state they are in, employers may
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Special Report: Employment Practices Liability continued from page 29 have state laws on overtime pay they must follow as well. California is one such state. “Employers in those situations are obligated to comply with both the state and the federal law. For example, in California, most of our overtime wage claims that we see pertain to state law as opposed to claims under the Fair Labor Standards Act,” he said. Williams sees a few potential trouble spots for employers. “One of the things we see today is employers, and I don’t think a lot if it is malicious - I just think it’s a misunderstanding of what their obligations are - but they may not pay their employees overtime," he said. “They may not correctly classify individuals as exempt or not exempt, meaning they’re entitled to overtime. They may not track their time correctly.” Another area is claims for not compensating workers for time they spend putting on their gear to prepare for work. “If you work in a meat processing plant or something like that, you have to put on protective gear, and then you weren’t compensated for that time,” he said.
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There are things employers should do to prepare for the new overtime situation, according to Williams. “Employers will want to go back and make sure that they’ve correctly identified who is now entitled to overtime and are they, in fact, tracking their time and making sure those individuals are compensated correctly," he said. “It’s probably a good idea, given this change in the law, to review all your employees and make sure that you classify them correctly and you’re tracking their time properly and that you’re compensating them appropriately.” Williams also noted that some employers may decide to raise the salary of their workers above the threshold of $35,568 to avoid an overtime issue. However, in order to avoid paying overtime for those workers, the employer would need to make sure the worker also qualified for an exemption under professional, administrative or executive. “In other words, if the employer raised the salary of a worker above $35,568 per year, and the worker did not qualify for one of the exemptions, the worker would still be entitled to overtime,” he said. Williams recalled that happened in some cases after the Obama Administration in 2016 initiated an even higher threshold of $47,000. Some employers
increased the pay of some of the workers beyond that threshold. But then, the Obama change was struck down in court in September 2017 when a judge ruled that the ceiling was set too high and might apply to some management workers who are supposed to be exempt from overtime pay protections. Business groups and 21 Republican-led states had sued to challenge the 2016 rule. The Department of Labor estimates that 1.2 million additional workers will be entitled to overtime pay as a result of the increase to the standard salary level, while an additional 101,800 workers will be entitled to overtime pay as a result of the increase under the highly-compensated employee rule. Williams urges agents to advise their clients to take advantage of resources available to them to be sure they are in compliance— whether that be a human resources department, payroll processor or general counsel. He also recommends the DOL’s website that has information about the final rule. Williams added that a number of insurance carriers including Travelers also have resources available. “It’s sort of a matter, one, of employers educating themselves, and then two, taking action on that information,” he said.
Wage-and-Hour Claims
Those caught not in compliance could face wage-and-hour claims. Defense costs only for such claims may be covered under employment practices liability insurance (EPLI) but only for those purchasing a separate endorsement under their EPLI. It’s not part of the traditional EPLI. (Coverage of unpaid wages may be available to large firms with sizable self-retentions but this coverage is not typically available to small and medium firms.) “A lot of carriers, including Travelers, will provide a sublimit that applies to defense expenses only for wage-and-hour claims. That generally includes issues like failure to pay overtime, misclassifying workers as exempt, potentially misclassifying workers INSURANCEJOURNAL.COM
as independent contractors when they’re in fact employees,” Williams explained. There are certain state statutes, like in California, where employers are obligated to provide rest and meal periods. The separate coverage would include defense expenses for those types of claims as well. Travelers offers a sublimit up to $250,000. “I think the market’s generally between $100,000 and $250,000, and there may be some outliers beyond that,” he said. As it’s been 15 years since the overtime rule was changed, this is in a way a new exposure - one agents may want to explore with clients. “I think that’s a good idea. We sell this coverage to privately held companies and nonprofits, and we try to be proactive in selling it because it’s an exposure for employers that’s out there,” Williams said. He noted that these claims are attractive to the plaintiffs’ bar because there is a fee shifting provision in the statute so that if the plaintiff prevails on the claim, they’re entitled to their attorneys’ fees. “You can have cases where the actual recovery amount may not be that significant in terms of the unpaid wages, but the attorney fee is potentially significantly more than that unpaid wage portion,” he said.
Other EPLI Issues
Overtime is hardly the only pressure on employment practices liability insurance (EPLI) these days when workplace issues are in the news on a regular basis. EPLI provides protection against many kinds of employee lawsuits including claims alleging sexual harassment; discrimination based on age, race, gender or disability; wrongful termination, hiring or promotions; retaliation and wrongful infliction of emotional distress. According to Williams, there are two areas in particular where EPLI is currently seeing increasing claims activity: sexual harassment and privacy. “I’ll start off with the sexual harassment, and there’s been an uptick, particularly in severity, on those claims. There’s been an uptick in the frequency of those claims as well. It’s a challenging environment to litigate one of those cases in,” he said. INSURANCEJOURNAL.COM
The second issue is biometric claims, driven by the Illinois biometric information privacy act.
The Department of Labor estimates that 1.2 million additional workers will be entitled to overtime pay as a result of the increase to the standard salary level, while an additional 101,800 workers will be entitled to overtime pay as a result of the increase under the highly-compensated employee rule. “One of the requirements under that is that if you’re going to use biometric information of your customers or employees, you have to get a signed release from the employee or customer,” he said. A number of employers have been using fingerprint technology to scan employees in and out and to clock when they’re coming and leaving work. In many cases, they did not get a signed release from the employee.
“That’s resulted in class action claims brought against those employers alleging violation of this statute, sort of quasi-invasion-of-privacy claims,” he said. Other claims areas that are relatively new include websites not in compliance with the Americans with Disabilities Act. “The website isn’t compliant if it doesn’t allow the disabled individual full use of that website because it hasn’t been programmed properly,” he said. Travelers is among the insurers that will provide workplace violence expense reimbursement coverage that reimburses employers for certain expenses in the event of a workplace violence event. The expenses might include counseling, additional security, and services of a public relations firm to help a business through the crisis. An employment practice claim is not a recommended experience. “No one’s ever gone through an EPLI claim— which is a tremendously burdensome process in terms of the documents that have to be turned over, all the emails, the personnel files, the deposition the employer has to go through— no one’s gone through that process and ever said, ‘Boy, we’d like to do that again,’” Williams said. JANUARY 13, 2020 INSURANCE JOURNAL | 31
2019 AGENTS of the Year
Welcome to Insurance Journal’s Agents of the Year report. This report features 20 agents who define what it means to be a successful independent agent today. These agents are more than top sellers. While they have achieved impressive success in sales and demonstrated laudable business intelligence
Jared Bradshaw MaxPro Insurance Solutions Valencia, California
Jared Bradshaw specializes in commercial insurance, specifically hard-to-place risks, writing all lines of commercial for various industries and classes. Workers’ comp is another of his specialties, having written roughly $2 million in premium in the past two years. Bradshaw has owned and operated insurance businesses since 2011. His first ownership experience was a Farmer’s agency, which he built up and sold in early 2017. While running that agency, he created his own independent commercial insurance brokerage to handle the business Farmers would not accept. Before becoming an agency owner, he ran a number of businesses in the fitness industry, including several fight gyms.
and entrepreneurial skills, they also have shown they have a passion for what they do and a commitment to professionalism and, in many cases, specialization. For them, being an insurance agent is more than a job. Insurance Journal’s Agents of the Year come from all regions of the country, live
and work in cities or towns big and small, and know the importance of giving back. Information included in this report was voluntarily submitted online by agents and was supplemented by other public information sources. There are many more agents who deserve mention than are profiled here.
Carolyn Konecki
Barbara Galgiani
Trae Vaughan
Katie Jackson
Cavignac & Associates San Diego, California Carolyn Konecki is a professional risk manager specializing in personal insurance for successful individuals and families. She’s become an expert at customizing coverage to protect tangible assets such as estate homes, luxury vehicles, collector cars, watercraft, aircraft and collectibles, such as jewelry, art, wine and antique furnishings. Konecki was recruited into the insurance business in 2004, when she joined her husband, John, at his independent agency, Konecki Insurance. The couple sold the agency at the end of 2012 to the Leavitt Group. She joined Cavignac & Associates in 2015 to start their private client division. In less than five years, she built a $4 million book of business. Konecki says her success is a result of hard work, target marketing and knowledge.
LP Insurance Services Reno, Nevada Barbara Galgiani specializes in both recreational and commercial marine industry — marinas, boat yards, hospitality, excursion boats, marine contractors. Roughly 90% of her revenue comes from this specialty. After working as an account manager for a specialized brokerage, she joined a firm in Modesto to become a fulltime producer, starting with no book of business. During that time, she not only built her own book of business, but expanded her education by completing several designations. After 20 years with the Modesto firm, she switched to LP Insurance Services. One rule of success: "I always look at options for my clients, as if I was the client," she says. In her free time, she is a dedicted volunteer with Hospice of San Joaquin.
Brock Insurance Chattanooga, Tennessee Trae Vaughan specializes in construction and real estate insurance and bonding and captives. Vaughan, whose father is an independent agent in Mississippi, grew up in a home where insurance was discussed frequently. He worked in the agency in high school and pursued a risk management degree in college at Mississippi State. Vaughan later landed an underwriting position with Travelers in the construction department. After nearly five years there, he had the chance to work for one of the agencies he handled at Travelers. "Having a mentors has been a real key to success," he says. "There's typically no need to reinvent the wheel, just look at those in your business who you most want to emulate and learn from them!"
Acentria Insurance Destin, Florida Katie Jackson has spent nearly 30 years in the insurance industry focusing on all lines of property and casualty insurance. As a vice president for the last six years with Acentria Insurance, Jackson has worked diligently to uphold the company’s high standards. She works hard to stay on top of industry trends, including being involved with networking groups and client relations. Co-workers say her knowledge of the industry and devotion to serving her clients makes her an asset to the company. Aside from her passion for her work in the insurance industry, Jackson devotes much of her spare time to animal rescue efforts in her area. She serves on the board of directors for Tu-Bahd Horse Rescue, a non-profit organization in Port St. Lucie, dedicated to the rescue of horses from life-threatening situations.
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2019 AGENTS of the Year Tom Hammond
John Wilkens
Michael Lieberman
Brian Schneider
Tony Hopkins
Midwest Insurance Agency Inc. Elk Grove Village, Illinois Tom Hammond has been in the insurance business since 2000. He credits honesty, hard work, self-discipline and a great team around him at Elk Grove Village, Ill.based Midwest Insurance Agency for his achievements in the industry. "I am a forward-thinker and push myself and people to think ahead of the curve," he says. Hammond's specialties are geared toward the transportation industry for both fleets and non-fleets, as well as transportation owner/ operator-based product and service programs. His primary area of focus is the Midwest, although he has some larger accounts throughout the country. Hammond says a key to success is remaining accessible to clients. "I operate in a relatively small space of the world, but most of my clients know that when they have me, they get more than just an insurance agent," he says. "I am a friend, an advisor, a consultant, and their insurance agent."
Robert Wilkens Insurance Agency Bogota, New Jersey John Wilkens is a second-generation insurance agent who says he takes pride in providing clients at Bogota, N.J.-based Robert Wilkens Insurance Agency with the best combination of coverage and pricing. Wilkens' area of specialty is personal lines package business including umbrella and small business BOP/Workers’ Comp/Commercial Auto. His book of business serves Florida, N.J., N.Y. and Pennsylvania. Wilkens has been involved for the past 17 years in growing the agency from two to 23 employees, two to 18 direct carrier appointments, and up to nearly $18 million in premium volume with three locations, he says. He adds that his secret to success is having the right infrastructure with a talented team that allows the agency to grow while not losing touch with existing clients. "We…separate ourselves not only on choice/ service but also communicating with our clients regularly," he says.
Foa & Son New York, New York Michael Lieberman credits his time as the general manager of a seafood restaurant in New York, N.Y., for propelling him into the insurance industry. He says quick thinking during a power outage impressed a recruiter, and his focus on seafood early on helped him develop a specialty that could be expanded to other sectors of the food and beverage industry. Today, he serves as a senior vice president and Food & Beverage Practice leader at New York, N.Y.based Foa & Son. Food and beverage importers, processors and distributors account for 98% of his commercial lines income. Lieberman's book of business serves all 50 U.S. states and territories outside of the U.S. He says one key to success is focusing on being a value add to a particular industry. "Our industry specific knowledge, technical capabilities, combined with our market relationships, will allow us to continue providing solutions to our valued clients, while delivering well managed risks to underwriters," he says.
Higginbotham Fort Worth, Texas Brian Schneider serves as a managing director at Higginbotham in Fort Worth, Texas. He is a generalist with expertise in private equity, real estate, public sector, restaurants and the franchise space. His book of business serves all 50 U.S. states. Before joining Higginbotham in 2010, Schneider worked at State Farm Insurance & Financial Services. His strategy for success has been executing his goals and putting clients first, he says. "Exceed client expectations and provide innovative solutions for risk management and risk transfer," he says. "Referrals continue to be the main growth strategy, by maintaining a strong work ethic and putting clients’ interests first." Schneider says growing his business has been a result of referrals from clients, centers of influence and within Higginbotham as he seeks to add value for each client he serves. "I add value to my clients by finding ways above and beyond implementing insurance policies to be a valuable partner," he says.
The Horton Group Waukesha, Wisconsin Tony Hopkins has served as a shareholder, vice president and sales leader at Waukesha, Wisc.-based The Horton Group since 2004. Hopkins' areas of specialty are manufacturing, welding supply and industrial gas distribution moving and storage and mergers and acquisitions, and he serves all 50 U.S. states through his book of business. Hopkins says specialization has been most helpful in growing his book of business. "It’s the easiest way to gain confidence as a young producer by building expertise, network and a loyal client base," he says. He says doubling down on the theory of specialization, as well as remaining immersed in the insurance industry and in clients’ industries, has been a key to his success. He began early in his career by gaining various insurance designations and paying attention to what drives his clients’ industries. "If you don’t know insurance; it’s not easy to sell it," he says.
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2019 AGENTS of the Year Edward Nagel
Brian Payne
Brad Baumgartner
DeeAnn Hansen
Shawn Budney
IBTX Risk Services San Antonio, Texas Edward Nagel has been in the insurance business for more than 31 years, starting off as an underwriter and then quickly transitioning to sales where he has remained as a producer ever since. He has focused on many niches during his time in the business, including construction, oil & gas, food manufacturing and distribution, heavy manufacturing, wholesale and distribution, emerging markets and trucking. He works throughout the U.S. as well as outside of it. For Nagel, educational opportunities in the industry have been a key component to his success. "Continuing my knowledge and education in insurance has afforded me the unique experience to help my clients," he said. "That has allowed me to grow my book of business as well as generate revenue from providing additional loss control services." He said focusing on offering more than just an insurance policy and providing a holistic approach to managing risk has helped him the most.
Field Insurance Agency Surfside Beach, South Carolina A specialist in residential and commercial lines catastrophe-exposed property coverages, as well as the flood insurance market, Brian Payne says he has big expectations of himself and his team when it comes to creating a high-level office culture. With 17 years of experience in the property and casualty industry, Payne has built a team of more than 25 people who work to assist clients in managing risks with an emphasis on the E&S market. Payne also serves on various carrier council teams and has been awarded many awards over the years from carriers for top performance, both regionally and nationally. Payne said his team utilizes many forms of digital advertising methods as well as traditional approaches. "This industry is my passion. Many of my clients are very aware of that and it is very compelling knowing they trust me to assist in protecting them along their journeys," Payne says.
IMA Inc. Denver, Colorado Brad Baumgartner isn’t just an insurance agent who has built a successful book of business in both commercial insurance and employee benefits for health & human services, not-for-profits and construction over the last 17 years. He also has spent the last seven years coaching and mentoring new producers with his agency. For Baumgartner, he is simply paying forward the support he received from a number of mentors that have helped him over his career. "These individuals spent hours of their time coaching me, joining me in prospect and client meetings and providing me with valuable feedback," he says. He also learned from his father, who was in the commercial insurance industry for over 35 years, and his older brother, a top wholesale broker in the country. "One of the most critical lessons that I have learned is to always put yourself in the client’s shoes,” he says. "Learning to be honest at all costs ... is paramount."
Wyoming Financial Insurance Cheyenne, Wyoming DeeAnn Hansen specializes in construction with an emphasis on general contractors involved in street/road, underground utilities including water/sewer mains, vertical building, ready mix, and subcontractors working on these projects. Roughly 80% of Hansen’s book of business involves a type of construction. The balance is in manufacturing, RV dealerships, restaurants and other areas. Hansen began her career as a policy typist. She later became a commercial lines account manager and then a commercial lines producer. She now works for a large writer of surety bonds, which goes hand-in-hand with her business. She earned a CIC designation, and an CRIS designation from IRMI that is construction-focused education. Education is vital to career success, she says. "Most of my clients have been with me for over 20 years and all my new business is now referrals due to excellent service standards we abide by."
Acentria Insurance Destin, Florida "The art of the deal" is a motto that Shawn Budney has followed in his almost 20 years in the insurance industry, with his key to success originating from the core basis of relationship building with clients and prospects. As vice president for Acentria Insurance, based out of the Jacksonville, Fla., office, Budney specializes in national multi-family, commercial real estate and high hazard risk management. Described as a team player, Budney works with other producers across the organizational platform to round out his accounts focused on multi-family, HOA and condos. He was a multiple time recipient of the Top Gun award with his previous employer as well as Acentria’s current and Top Producer for two consecutive years. Building rapports with clients, attending multi-family trade-shows, and attending educational seminars has been helpful to helping him grow his book of business. In his free time, Budney enjoys offshore fishing or boating in Florida.
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2019 AGENTS of the Year Francesca Forlivio Lipp
Jeff McIntosh
Brian Kapiloff
Tim Woods
Bret Lawrence
JMG Insurance Corp. Norwalk, Connecticut Francesca Forlivio Lipp specializes in personal lines and habitational risks, but commercial and life/health accounts also are represented in her book of business. She began her career at JMG in 2014 as a human resource manager. With an office adjacent to the personal lines service team, she began "dabbling in personal lines sales outside of normal business hours." The experience "sparked a passion I did not know existed," she says. Forlivio Lipp has developed her book of business while continuing to serve as HR manager at JMG. "Though the youngest producer in JMG, I was the highest new business producer in personal lines in 2019," she says. She attributes her success to a passion for helping people protect their most valuable assets, relationships, prompt client responses, quick turn arounds and asking for referrals. "This is my life’s passion and I will be here in the family business for the long haul," Forlivio Lipp says.
Energy Insurance Agency Inc. Lexington, Kentucky Jeff McIntosh believes developing relationships with good underwriters leads to good business. "I learned very early on the value of a good relationship with my underwriters," McIntosh says. Awareness of the importance of relationship building has served him well. McIntosh has been involved in the insurance business since 1987 and with Energy Insurance Agency since 1989. Throughout his career and concentrating on business in Kentucky, he’s written more than $130 million in commercial premiums and more than $14 million in carrier revenues. He is so passionate about giving full and complete information to underwriters to ensure clients are properly covered, he’s even written a textbook on the subject. The book, "Insurance Genius, the Commercial Insurance Detective," teaches students and agents how to complete commercial insurance applications, he says.
Insgroup Inc. Houston, Texas Though he began his insurance career with a focus on personal lines, Brian Kapiloff has since built a large specialty team that handles a book of business that exceeds $6.5 million and focuses exclusively on commercial real estate risks. He is a fourth-generation independent agent, having joined in 1992 the agency his great-grandfather started in the 1940s, which has now grown to be one of the largest independent firms in Texas and a top 100 agency nationally. "The biggest factors in growing my book have been our constant focus on the real estate industry for nearly 25 years, and the talent that we’ve been able to attract and retain. We’ve also had a lot of success in recent years developing young talent internally," Kapiloff says. He says the agency’s succession plan will allow it to maintain its independence and manage its business on a "forever" timeline. The firm also invests in resources and technology to improve its service offerings, Kapiloff says.
Farmer Woods Group, a Leavitt Group Affiliate Phoenix, Arizona While Tim Woods and his team at Farmer Woods Group are mostly generalists by design, the majority of their book is concentrated in construction, real estate, manufacturing, retail, energy and professional services. But, he says, they make an effort to maintain a diversified client mix to insulate themselves from market conditions as much as possible. "Investing in, developing and empowering the Farmer Woods Group team and surrounding myself with the most elite professionals in the industry has been the most proven recipe for success," Woods says. The support of his individual team along with his business partners has allowed him to continue serving the military as a volunteer Thunderbird for the past eight years. With their backing, he also has been able to personally raise millions of dollars for charity, and collectively, their contributions over the 85-year history of the agency are approaching $160 million.
Woodruff Sawyer San Francisco, California Bret Lawrence specializes in the construction industry, working with contractors to help them identify, mitigate and manage risk. Manufacturing and real estate also are a part of his book. Serving large and small businesses in California and nationwide, Lawrence partners with clients to improve their overall risk profile and manage their cost of risk. He began his insurance career as a transportation underwriter, moving to the brokerage side in 2004 when he joined Woodruff Sawyer. He credits much of his success to the support he gets from a strong, clientfocused team. "My team puts a substantial emphasis on team versus the individual," he says. A featured speaker for the past 13 years at Cal Poly San Louis Obispo, his alma mater, Lawrence enjoys introducing the insurance industry to students and supporting the career development of those new to the industry.
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JANUARY 13, 2020 INSURANCE JOURNAL | 35
Idea Exchange: Minding Your Business
Industry Trends to Exploit for 2020
T By Catherine Oak and
he insurance industry is so intertwined into the economy and society, that just about any noticeable change in either will have some impact for the insurance industry. That is why it is imperative for agency owners to watch and learn about major trends when they start. Following are the seven key trends that insurance agencies should be tracking for 2020.
1. Natural Disasters’ Effect on Insurance
Bill Schoeffler
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Insurance companies will need to rethink the underwriting and models used in areas prone to natural disasters. The spread of concentrated housing into previous rural areas has exacerbated the losses due to natural disasters in recent years, whether it's hurricanes in the east, tornados in the midwest or fires in the west. The typical approach by insurance companies after a natural disaster is to apply for rate increases and/or plan modifications, non-renew risks in disaster prone areas or add more underwriting restrictions. However, insurance regulators are pushing back and demanding more
from the insurance companies. In response to the wave of non-renewals and cancellation in fire-prone areas, California imposed a one-year moratorium that prevents insurers from canceling customers in areas impacted by recent wildfires. The consulting firm Milliman estimates that the combined 2017 and 2018 wildfires in California wiped out about twice the underwriting profits made in the state for the past 26 years. Needless to say, carriers view California as no longer profitable and subject to extreme risk exposure. So, regulators will need to work with insurance companies to strike a plan that works for both the insured and the insurers. A big issue for California, as well as many other states is that regulators base the pricing of insurance on historical experience, not projections for the future. The California wildfires of 2017 and 2018 were anomalies that bypass the current method of pricing insurance. Insurance agencies don’t have a lot of clout to help resolve this problem at the high level, but they can help their own clients with a few small steps. Educating the client on how they can mitigate risks INSURANCEJOURNAL.COM
to fires, floods, hurricanes, etc., is very helpful. We also advise agencies to review with the client the limitations of their current coverage and then offer any new options available. People will still need insurance, despite the regular threat of natural disasters. So, agents will need to work with the way the system works now. We advise agency producers to draft a letter to clients letting them know of the limitations of the coverage they can now provide, such as Fair Plans or Lloyd’s of London coverage to make sure that if another natural disaster occurs, the agency’s E&O exposure and coverage is not at stake.
2. Health Care Act Legislation
Two years into the Trump administration, there is still no major legislative change to the Affordable Care Act (ACA), but some changes did occur. Despite the lack of new legislation, the few INSURANCEJOURNAL.COM
executive actions that President Trump did eliminate are the re-imbursement to health insurance companies that President Obama allowed via Executive Order. Any losses the companies face are no longer subsidized. Thus, the insurance companies increased their 2018 and 2019 rates to cover previous losses in anticipation of these change. Also, the 40% tax on highcost employer plans (Cadillac tax) has been
pushed out to 2022. With the Democrats in charge of the House, it is hard to predict what will happen. Bottom line is that the major changes brought in by the ACA, such as accepting pre-existing conditions, will remain and only minor changes are likely to occur.
Employers are getting squeezed on the cost of health care. Employers are getting squeezed on the cost of health care. According to PricewaterhouseCoopers, health insurance premiums are expected to rise by 6% in 2020. Companies are taking a hard look at affordable options, such as high deductible health plans, which can be paired with health savings accounts. Telemedicine is also on the rise. This “virtual care” allows employees/patients to consult with a medical provider via a computer, smartphone, or tablet, usually at a much lower cost. First, most agencies offer insurance to their employees. Any changes to the
continued on page 38 JANUARY 13, 2020 INSURANCE JOURNAL | 37
Idea Exchange: Minding Your Business the long-run, as insurtech settles down and understands the parameters of the insurance industry, there will be a revived focus on streamlining the sales and service process. Insurance agencies need to incorporate new technology sooner rather than later, because it will be a game changer with respect to productivity and efficiency.
4. Market Conditions
continued from page 37
Affordable Care Act or the cost of health care in general will affect the firm’s employee benefits expenses. Changes also impact those agencies that sell health insurance. It is possible that a change to the current system could affect premiums, commission rates and even the ability to sell health insurance.
3. Insurtech
It seems that some insurtech firms are becoming more receptive to working with agents rather than find ways to eliminate them, at least for now. The insurance industry seemed like a ripe target for these new startups to disrupt the industry by cutting costs and generating profits for their new ideas. The current distribution and service channels (i.e. insurance agents and brokers) were one of the areas of focus. However, the role of sales and service staff at insurance agencies was underestimated and the system is very complex, thus, it is not easily replaced with an algorithm. Many insurtech firms with the big dollars backing them focused on breaking into the insurance company side since it seemed like that had the most potential to make the largest amount of money. The smaller startup firms see that 38 | INSURANCE JOURNAL | JANUARY 13, 2020
their best approach is to make incremental improvements to the current system and not re-invent the wheel. One such example is Indio Technologies which solved a perennial problem for agents by turning the application and renewal process into a fully digital, modern customer experience. The firm was acquired by Applied Systems at the end of 2019 and it is expected to be integrated. Smart Harbor is another firm that developed products and services specifically for independent agencies, such as a mobile app that customers can use when buying insurance. Insurance Technologies Corp. purchased Smart Harbor in August of 2019. One thing to expect for 2020 is a fair amount of M&A activity as the insurance companies and service providers to the insurance industry buy up the new competition. With all these new startups, there might be some more options and real improvement in available software for agencies that make the job of the service and sales staff easier. The 20-plus year wait for helpful agency automation seems to be over. However, in
Overall, the insurance industry was resilient for 2019 and should continue to do well for 2020. Both commercial and personal lines are seeing a hardening of the market. MarketScout reported that U.S. commercial property/casualty insurance rates rose 4% on average in the third quarter of 2019, up from 3% during the second quarter. By industry class, habitational and transportation businesses saw the highest average rate increases at 6% and 7.5%, respectively. Deloitte reported that the hardening property/casualty market is a worldwide phenomenon, with increases in all major geographic regions for the third straight quarter of 2019. A key driver to the current hard market in personal lines is related to the losses from recent natural disasters. It will take at least a year or two for insurance companies and regulators to work out the new approach to risk assessment, underwriting and pricing. Commercial auto will continue to face challenges as the claims frequency and severity trends continue to point upward. Interestingly, technology is both part of the problem and part of the solution since distracted drivers result in more frequent and more severe accidents. However, the
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growth in use of telematics in vehicles should reduce accidents. Expect most lines to show rate increases of at least 5% during 2020. The one exception will be workers’ compensation, which on average will remain steady or decrease during 2020. Various sources report that workplace injuries have been declining, while the combined loss ratio in most states is well under 100%, which creates the current soft market. The new law in California, which has a tighter definition of an independent contractor, will create a flood of new employees that will be covered by workers’ comp, and the long-term impact is not clear at this point. For 2020, the independent agent should pay close attention to the market trends because their clients will notice the rate changes and start looking around. Agencies that have competitive carriers will do well and can pick up new clients from their competitors. However, during a hard market, eventually all carriers will raise their rates, so don’t focus on selling by price alone. Work with the clients well before the renewal date to assess their true current risks and offer solutions that will differentiate your agency from the competition.
5. 2019 M&A Activity and Pricing
M&A activity is expected to continue during 2020, according to our discussions with key acquirers. As long as insurance agencies remain profitable, there will be buyers. The current prices paid by publicly traded brokers, large regionals and agencies funded by private equity firms are already extremely high and will likely continue to be high for the valuable, desirable firms. Since the supply is dwindling, the prices may be even higher for those that remain if they fit the profiles of the key buyers today. Acrisure and HUB continue to be the leaders of national broker purchases. Acrisure completed 100 transactions in 2019 and management expects to do the same level in 2020, maybe slightly more. Their volume hit almost $2 billion in 2019. HUB closed 70 transactions in 2019, which was an all-time high. They expect to close about the same number in 2020. INSURANCEJOURNAL.COM
They are a buyer that really helps agencies with producers and markets, and they handle some of the internal HR and accounting operations, too. Assured Partners is very competitive and closed over 50 transactions this past year and expect to do the same next year. They have revenue earnouts that are very attainable. Foundation Risk Partners, a somewhat new buyer, had its first acquisition in November 2017. This past year they did several acquisitions and will continue that trend in 2020. Arthur J. Gallagher picked up their pace this year especially in California. They will be aggressive nationwide and are especially looking for the right people to grow in areas they have not been in before. A really nice mid-sized national broker, Risk Strategies, is based out of Boston. They did 25 deals in 2019, which was one of their biggest years. They are being more selective in buying agencies with specific niches, like employee benefits, healthcare, real estate and transportation agencies. In 2020, they expect to do another 20 to 25 transactions. Brown & Brown did 20 deals in 2019 and expects to have the same amount of activity in 2020. Main offices are Chicago, Atlanta, Boston and Chesterfield, Mo. BroadStreet Partners, NFP and Relation are funded by private equity and venture capitalists. They continue to aggressively solicit and buy independent agencies and have large amounts of capital to pay well. Private equity firms have been buying up insurance agencies for their investors. This makes a lot of sense because the return on investment is typically 20% to 30% plus, which is greater than most other available investments today. Private equity firms are paying typically 8 to 9 times EBITDA as down payments. In addition, there are usually earn-out bonuses that can also be significant as a multiple of EBITDA or topline, which we prefer for
our clients. When the value is translated to a multiple of revenue this means 2.75 to 3.5 times revenue. Sometimes the down payments require at least 10% to 25% of the acquirer’s stock and can also be required on at least one of the large buyer’s earn-outs.
Peer Acquisitions
Local peer buyers and internal buyers cannot compete at the high prices and multiples since they need to pay out of cash flow. So, there will continue to be a price differential between those that receive offers from the well-funded buyers and those that sell internally or to local competitors. However, some independents prefer not to sell to a much larger, often publicly traded firm. Often the existing firm is completely transformed a few years later, and not always for the better. There is at times a sense of pressure to produce and writing larger accounts is expected. These criteria are not a good fit for many agencies, even medium-sized service oriented independent agencies. In addition, producers in these acquired agencies have to sometimes write commercial lines and benefits accounts that are over $2,500 for some and $5,000 in commission for other acquirers to get paid. However, there are other acquirers that leave the agency alone and won’t even change its name, such as Acrisure and Broadstreet.
Agency Pricing
Sellers today still get prices from other peer independents in the 1.5 to 2.0 times range, if there is at least close to a 25% to 30% profit margin. As a multiple of EBITDA (earnings before interest and depreciation) these values are in the 6 to 7 range. In the earn-out portion of the “price” the seller is expected to grow the business, not just maintain it. Terms based on future growth should be discounted when determining value based on cash today. So, if an agency “gets” 1.75
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Idea Exchange: Minding Your Business continued from page 39 to 2.25 times revenue today, this is actually a “price” closer to 1.3 to 1.6 times revenue, projected three years out. With the economy continuing to improve and the ability to get credit lines from banks, the value of agencies and sale pricing is still very good with independents and national firms, especially because there are so many acquirers. There is often misunderstanding about what the “real prices” being offered are. Some of the deals have a sizable portion of the “price” based on earn-outs for future performance.
6. Internal Perpetuation Can Be Difficult
If an owner sells internally, it is usually for less than the value of an external sale. There is risk that the internal candidates might not work out, nor do they often have the money to do a buy-out. Often the retiring principal needs to finance the deal for the internal candidate. It is hard for small- and medium- sized independent agencies to internally perpetuate. The next generation often does not have the management and sales skills set to be able to retire the majority owner. The terms for internal purchases are still typically 20% to 30% down, with the buyout over five to 10 years, depending on the agency’s cash flow and whether or not the internal buyer has any money of their own. An internal buy-out rarely has an earn-out component, so the value should be conservative, to not jeopardize the internal buyer being able to use the agency’s cash
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flow to pay the loan off over time. Buyers often want the retiring owners to move on after a few years, so then they can manage the firm, without their influence.
With a new presidential election in full swing, there is no guarantee that the lower tax structure that President Trump put in place will continue. 7. Tax Law Changes May Occur
From the insurance agency perspective, tax reform has had its initial and perhaps biggest impact directly on the owners and employees for their personal income taxes. This includes any changes to corporate taxes, since the majority of agencies are privately held. Corporate taxes were reduced and then offset that with elimination of some deductions. With a new presidential election in full swing, there is no guarantee that the lower tax structure that President Trump put in place will continue. For agency owners this also includes whether or
not capital gains will be at its current low federal rate of 20%. Some agencies looking at the sale option are concerned about this and may decide to cash in on their investment before the election occurs to guarantee the lower rates.
Summary
Being proactive and knowing how current trends will affect the firm is the first step. Managing the agency in a way that exploits these trends will then allow the firm to succeed. Agency owners need to establish business and marketing plans. Good communication within the firm is imperative. Having meetings and planning sessions is a good way to get everyone involved and headed in the right direction. Oak & Associates knows that the key trends in this article are important for owners to pay attention to for the coming year. Contact Oak & Associates if purchasing a Sales and Marketing or Business Planning template is of interest or if a planning session is desired. 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. INSURANCEJOURNAL.COM
VP of Design
Guy Boccia Congratulations to Guy Boccia and the design team at Wells Media Group! Insurance Journal magazine was just awarded Best Table of Contents, B2B Magazine. Both Insurance Journal and Carrier Management also won honorable mentions in the category of Best Graphic Art, B2B Print. See this guy? ( Who, ironically, is named ‘Guy’? ) We’re super proud of him.
2020 Insurance Industry Meetings & Conventions Directory Welcome to Insurance Journal's 2020 Insurance Industry Meetings and Conventions Directory. The information in this directory is taken from a larger database containing additional information on these and other meetings, including industy-related seminars, conferences and workshops. The online Insurance Journal events database can be found at: www.InsuranceJournal.com/events Meeting planners are invited to add new meetings, conventions and seminars to the databse free of charge, all year long. 2020 CIWA Industry Days Jan 12-14 Hilton La Jolla Torrey Pines La Jolla, CA California Insurance Wholesalers Association https://ciwa.net
2020 Gamma Iota Sigma Ohio Regional Conference
NIIA Annual Trade Show
Motor Carrier Insurance Considerations
IIAT's 57th Annual Joe Vincent Management Seminar
WSIA Surplus Lines Management
Jan 14-15 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
Big 'I' Winter Meetings
Jan 14-18 New Orleans Marriott New Orleans, LA Independent Insurance Agents & Brokers of America https://www.independentagent.com
Advanced Underwriting
Jan 16-17 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
Rural Agents Conference
Jan 22-23 Airport Holiday Inn Des Moines, IA Independent Insurance Agents of Iowa https://www.iiaiowa.com
2020 Gamma Iota Sigma Georgia Regional Conference
Jan 24-25 Grand Hyatt Atlanta Buckhead Atlanta, GA Gamma Iota Sigma https://events.bizzabo.com/218903
2020 Gamma Iota Sigma New York Regional Conference
Jan 24-25 St. John's University Manhattan Campus New York, NY Gamma Iota Sigma https://events.bizzabo.com/219259
Jan 24-25 The Westin Great Southern Columbus Columbus, OH Gamma Iota Sigma https://events.bizzabo.com/219072
Jan 26-28 Renaissance Austin Hotel Austin, TX Independent Insurance Agents of Texas https://www.iiat.org/edu-and-events/ events/joe-vincent-seminar
Windstorm Insurance Conference Jan 26-30 Hilton Orlando Buena Vista Palace at Disney Springs Resort Orlando, FL Windstorm Insurance Network https://events.windnetwork.com 2020 Rural & Small Conference
Jan 27-30 DoubleTree Hotel Wichita Airport Wichita, KS Kansas Association of Insurance Agents https://kaia.growthzoneapp.com/events
Insurance Day at the Capitol Jan 27-28 Capitol Building Charleston, WV Independent Insurance Agents of West Virginia https://www.iiawv.org/Events/Pages/ InsuranceDay/default.aspx PIANY MetroRAP
Jan 30 Sheraton New York, Times Square New York, NY PIA of New York https://pia.org
2020 - Farm Agents Mid-Winter Meeting
Jan 30-31 Crowne Plaza Springfield, IL Independent Insurance Agents of Illinois https://www.iiaofil.org/Events/AnnualEvents
Jan 30 Atlantis Reno Reno, NV Nevada Independent Insurance Agents https://www.niia.org/Products/Pages/ NIIATradeshow/default.aspx
Feb 3-6 Emory University Goizueta School of Business Atlanta, GA WSIA Wholesale & Specialty Insurance Association https://www.wsia.org
Motor Carrier Insurance Considerations
Feb 6-7 Hyatt Place DFW DFW Airport, TX MCIEF http://mcief.org
Northern California Insurance Professional Ski Day
Feb 9-10 Base Camp So. Lake Tahoe South Lake Tahoe, CA Northern California Insurance Professional Ski Day https://www.eventbrite.com/o/ northern-california-insurance-professionals-9373508450
Advanced Coverage
Feb 10-11 Hyatt Place DFW DFW Airport, TX MCIEF http://mcief.org
NAMIC Claims Conference
Feb 11-13 Omni Amelia Island Plantation Amelia Island, FL NAMIC https://www.namic.org/edu/claims
Advanced Underwriting
Feb 12-13 Hyatt Place DFW DFW Airport, TX MCIEF http://mcief.org
Insurance Day on the Hill Feb 13-Jan 13 Iowa State Capitol Des Moines, IA
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Independent Insurance Agents of Iowa https://www.iiaiowa.com
Georgia Young Agents Sales & Leadership PRO Camp Feb 19-20 The Classic Center/Hyatt Place Athens, GA Independent Insurance Agents of Georgia https://www.iiag.org/Events/Pages/ YACSalesAndLeadership/default.aspx
Young Insurance Professionals Winter Retreat
Feb 20-21 Snowshoe Mountain Snowshoe, WV Independent Insurance Agents of West Virginia https://www.iiawv.org/Events/Pages/ YARetreat/default.aspx
Envision 2020
Spring Conference
Mar 4-5 Columbia Metropolitan Convention Center Columbia, SC Independent Insurance Agents & Brokers of South Carolina https://www.iiabsc.com/Events/Pages/ SpringConference/default.aspx
Motor Carrier Insurance Considerations
Mar 5-6 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
Advanced Coverage Mar 9-10 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
Feb 24-26 Amway Grand Plaza Grand Rapids, MI Michigan Association of Insurance Agents https://www.michagent.org/convention/ home
Advanced Underwriting Mar 11-12 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
2020 IIANC Technology Symposium
I-Day Los Angeles Mar 11 Pasadena Convention Center Pasadena, CA BCP - LA - SFV https://iday.us/
Feb 27 Embassy Suites Cary, NC Independent Insurance Agents of North Carolina https://www.iianc.com
Women & Diversity: Expanding Opportunity in Insurance
Feb 27-28 Intercontinental Barclay New York, NY American Property Casualty Insurance Association, LICONY and ACLI https://apci.org
2020 WSIA Underwriting Summit Mar 1-4 JW Marriott Desert Springs Resort & Spa Palm Desert, CA WSIA Wholesale & Specialty Insurance Association https://wsia.org NAMIC Commercial Lines Seminar
Mar 4-6 Renaissance Chicago Downtown Hotel Chicago, IL NAMIC https://www.namic.org/edu/commercial-lines
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2020 Spring Conference
Mar 12-13 Hilton Garden Inn St. George, UT Utah Association of Independent Insurance Agents https://www.iiaba.net
2020 WSIA Insurtech Conference Mar 15-18 Sheraton New Orleans Hotel New Orleans, LA WSIA Wholesale & Specialty Insurance Association https://wsia.org Insurors Agency Growth Conference Mar 25-26 Franklin Marriott Cool Springs Franklin, TN Insurors of Tennessee http://www.insurors.org
North Carolina Surplus Lines Association Annual Convention
Mar 25-27
Grandover Greensboro, NC North Carolina Surplus Lines Association https://www.ncsla.com/annual-convention/registration
30th Annual MAIA Small Agency Conference
Mar 26-27 Holiday Inn Columbia, MO Missouri Association of Insurance Agents https://www.moagent.org/default.aspx
YAC Sales & Leadership Conference Mar 26-27 Wyndham Bonnet Creek Orlando, FL Florida Association of Insurance Agents https://www.faia.com/salc Georgia Young Agents Committee Will Weston IV Charity Golf Tournament
Mar 26 University of Georgia Golf Course Athens, GA Independent Insurance Agents of Georgia https://www.iiag.org/Events/Pages/ WillWestonClassic/default.aspx
2020 PIA Advocacy Day
Mar 31-Apr 1 Hilton Crystal City Arlington, VA National Association of Professional Insurance Agents https://pianet.com/government/piaadvocacyday
2020 Spring Conference
Apr 2-3 Kearney, NE Independent Insurance Agents of Nebraska https://www.iian.org/Education/Pages/ Events/Spring_Conference/Spring%20 Conference.aspx
Insurance Council of Texas Workers' Compensation Seminar
Apr 2 TCEA Conference Center Austin, TX Insurance Council of Texas https://www.insurancecouncil.org
SIR Spring Research Workshop Summit
Apr 5-7 Omni San Antonio at the Colonnade San Antonio, TX Society of Insurance Research https://www.sirnet.org/SIRMember/ Events/2020_Spring_Workshops/Collector. aspx JANUARY 13, 2020 INSURANCE JOURNAL | 43
2020 Insurance Industry Meetings & Conventions Directory Auto Insurance USA
PIANY LIRAP
IE 2020 InsureExpo Apr 16-17 Winston Salem, NC Independent Insurance Agents of North Carolina https://www.iianc.com
MIIAB Expo 2020
Apr 16-17 Radisson Blu Aqua Hotel Chicago, IL Insurance Nexus by Reuters Events https://events.insurancenexus.com/auto/
NAMIC Personal Lines Seminar
Apr 20-22 Renaissance Chicago Downtown Hotel Chicago, IL NAMIC https://www.namic.org/edu/personal-lines
Leadership Conference Apr 21-22 BIG I Kentucky https://www.iiak.org/Events/Pages/ LeadershipConf/default.aspx Agents Council for Technology (ACT) Meeting Apr 22 Rosen Centre Orlando, FL Agents Council for Technology https://www.independentagent.com/
ACT Meeting
IRES Foundation National School on Market Regulation Apr 26-28 Hyatt Regency Tamaya Resort Santa Ana Pueblo, NM IRES Foundation https://www.ires-foundation.org
2020 MIAA Annual Convention Apr 27-28 DoubleTree Hotel South Portland, ME Maine Insurance Agents Association https://www.maineagents.net/Events/ Pages/MIAAConv/default.aspx IAIABC The Forum 2020 Apr 27-30 Wyndam Grand Clearwater Beach Clearwater Beach, FL International Association of Industrial Accident Boards and Commissions http://www.iaiabc.org/forum
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Apr 29 Crest Hollow Woodbury, NY PIA of New York https://pia.org
InsurCon2020
May 11-12 Kalahari Resorts Wisconsin Dells, WI Independent Insurance Agents of Wisconsin https://www.iiaw.com/page/insurcon
Apr 29 Mystic Lake Center Prior Lake, MN Minnesota Insurance Agents & Brokers Association https://www.miia.org/Events/Pages/MCon/ default.aspx
Insurance AI and Innovative Tech USA
16th Annual Insurance Public Policy Summit
I Day San Diego 2020 May 12 Town and Country Resort and Convention Center San Diego, CA Independent Agents & Brokers of San Diego http://www.iiabsandiego.com
124th AIIA Convention & Trade Show
2020 Big "I" Legislative Conference May 13-15 Washington, DC Independent Insurance Agents & Brokers of America https://www.independentagent.com
Apr 29 Ronald Reagan Building and International Trade Center Washington, DC Networks Financial Institute https://www.indstate.edu/business/NFI
May 3-5 THE LODGE at Gulf State Park Gulf Shores, AL Alabama Independent Agents Association https://www.aiia.org
IIABCal Blue Ribbon Conference May 3-7 Mauna Lani Beach Resort Kamuela, HI Independent Insurance Agents & Brokers of California https://member.iiabcal.org/Events/BlueRibbon-Conference NAMIC Directors' Bootcamp 2.0
May 4-6 Hyatt Regency Clearwater Beach Resort and Spa Clearwater, FL NAMIC https://www.namic.org/edu/dbc
2020 TMPAA Mid-Year Meeting
May 4-6 Tampa Marriott Water Street Tampa, FL Target Markets Program Administrators Association http://www.targetmkts.com
Farm Ag Conference 2020
May 5 Beck Agricultural Center, Purdue West Lafayette, IN Independent Insurance Agents of Indiana https://www.bigi.org
May 12-13 Radisson Blu Aqua Hotel Chicago, IL Insurance Nexus by Reuters Events https://events.insurancenexus.com/analyticsusa/
Motor Carrier Insurance Considerations
May 14-15 Sonesta Suites Scottsdale Scottsdale, AZ MCIEF http://mcief.org
Advanced Coverage May 18-19 Sonesta Suites Scottsdale Scottsdale, AZ MCIEF http://mcief.org NAMIC Farm Mutual Forum
May 19-20 Hilton St. Louis at the Ballpark St. Louis, MO NAMIC https://www.namic.org/edu/forum
Go BIG 2020
19-May TBA Syracuse, NY BIG I New York https://www.biginy.org/connect/Pages/ Go%20Big/default.aspx
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2020 Insurance Industry Meetings & Conventions Directory Advanced Underwriting May 20-21 Sonesta Suites Scottsdale Scottsdale, AZ MCIEF http://mcief.org PIA Oregon|Idaho Conference & Trade Show
Jun 3-4 Salishan Resort Gleneden Beach, OR Professional Insurance Agents Oregon|Idaho https://www.piawest.com/m/custom_page. asp?page=PIAORIDConference
Young Agents Conference
Jun 4-5 Clearwater Casino Resort Poulsbo, WA Independent Insurance Agents & Brokers of Washington https://www.wainsurance.org/Events/ Pages/YAConference/default.aspx
123rd IIAG Annual Meeting, Convention & Trade Show & Young Agents 52nd Annual Conference Jun 4-7 Omni Amelia Island Plantation Amelia Island, FL Independent Insurance Agents of Georgia https://www.iiag.org/Events/Pages/ Convention/default.aspx
2020 IIAM Convention & Trade Show
Jun 7-10 Destin, FL Independent Insurance Agents of Mississippi https://www.msagent.org/Events/Pages/ IIAMAnnualConventionandTradeShow. aspx
IIAT InsureCon
Jun 10-12 San Antonio, TX Independent Insurance Agents of Texas https://www.iiat.org/edu-and-events/ events/insurcon
Indenpendent Insurance Agents of Arkansas https://www.iiaar.org/Events/ Pages/Conv/default.aspx
Advanced Coverage
Jun 15-16 Hyatt Place Indianapolis Keystone Indianapolis, IN MCIEF http://mcief.org
IIARI Annual Convention Jun 15-17 Wyndham Atlantic Resort Newport, RI Independent Insurance Agents of Rhode Island https://www.iiari.com/Events/ Pages/Annual%20Convention/default.aspx 2020 SITE Annual Conference
Jun 15-17 JW Marriott New Orleans New Orleans, LA Society of Insurance Trainers & Eds https://www.insurancetrainers. org/2020-annual-conference
Annual Trade Show & Convention Jun 16-18 Ramkota Hotel Casper, WY Association of Wyoming Insurance Agents https://www.awia.com/Events/Pages/ Convention/default.aspx Advanced Underwriting Jun 17-18 Hyatt Place Indianapolis Keystone Indianapolis, IN MCIEF http://mcief.org IMCA Annual Conference and Showcase
Jul 16-17 Hyatt Regency Austin Austin, TX Insurance Council of Texas https://www.insurancecouncil.org/
TSLA 2020 Mid-Year Meeting
Jul 19-22 Four Season Westlake Westlake Village, CA Texas Surplus Lines Association http://tsla.org/meetings_2020_mid.htm
NAMIC Agricultural Risk Inspection School Jul 21-23 Hilton St. Louis at the Ballpark St. Louis, MO NAMIC https://www.namic.org/edu/agrisk
AIIA Young Agents Summer Conference Jul 29-Aug 1 Hilton Pensacola, FL Alabama Independent Insurance Agents Association https://www.aiia.org/young-agents-conference.html Motor Carrier Insurance Considerations
Jul 30-31 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
Advanced Coverage Aug 3-4 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
IIAV Annual Conference & Exposition 2020 Jun 24-26
Advanced Underwriting Aug 5-6 Residence Inn Orlando Airport Orlando, FL MCIEF http://mcief.org
Marriott Virginia Beach Oceanfront Virginia Beach, VA Independent Insurance Agents of Virginia https://www.iiav.com/Events/Pages/ IIAVConvention/default.aspx
Big I Annual Convention
NAMIC Management Conference
46 | INSURANCE JOURNAL | JANUARY 13, 2020
Insurance Council of Texas 28th Annual Property & Casualty Insurance Symposium
Jun 22-24 Omni Hotel at Championsgate Orlando, FL Insurance Marketing & Communications Association http://imcanet.com
FAIA's 2020 Convention Jun 10-12 Gaylord Palms Resort Orlando, FL Florida Association of Insurance Agents https://www.faia.com/convention2019 Jun 11-13 Hilton Convention Center Branson, MO
NAMIC https://www.namic.org/edu/mgmtconf
Jun 28-Jul 1 Omni Amelia Island Plantation Amelia Island, FL
FSLA 60th Annual Convention
Aug 5-7 Boca Raton Resort & Club Boca Raton, FL Florida Surplus Lines Association http://www.myfsla.com INSURANCEJOURNAL.COM
LAAIA 50th Annual Convention
Aug 5-8 The Diplomat Beach Resort Hollywood, FL Latin American Association of Insurance Agencies http://www.laaia.com
Young Agents Conference
Aug 6-9 Marriott Resort at Grande Dunes Myrtle Beach, SC Independent Insurance Agents & Brokers of South Carolina https://www.iiabsc.com/Events/Pages/ EventsCalendar/default.aspx
2020 Big "I" State Convention
Aug 9-12 The Grove Hotel Boise, ID Independent Insurance Agents & Brokers of Idaho https://www.iiabi.org/events
VCIA 2020 Annual Conference
Aug 10-13 Davis Center/DoubleTree by Hilton Burlington, VT Vermont Captive Insurance Association http://www.vcia.com/Events/ AnnualConference/tabid/87/Default.aspx
NAMIC Leadership Development Workshop
Aug 11-12 Hyatt Centric Chicago Magnificent Mile Chicago, IL NAMIC https://www.namic.org/edu/leaddev
IIABAZ's 86th Annual Convention & Trade Show Aug 20-21 Talking Stick Resort & Casino Phoenix, AZ Independent Insurance Agents and Brokers of Arizona http://www.iiabaz.com/Convention
101st Annual UIA Convention
Sep 9-11 Embassy Suites South Jordan, UT Utah Association of Independent Insurance Agents https://www.iiaba.net
2020 WSIA Annual Marketplace
Sep 13-16 Manchester Grand Hyatt San Diego & Marriott Marquis San Diego Marina
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San Diego, CA WSIA Wholesale & Specialty Insurance Association https://wsia.org
IIABW/PIA Joint Annual Conference
Sep 16-18 Tulalip Resort Marysville, WA Independent Insurance Agents & Brokers of Washington http://www.wajointconference.com/
Annual Convention, Trade Show & Expo
Sep 16-17 Prairie Meadows Convention Center Altoona, IA Independent Insurance Agents of Iowa https://www.iiaiowa.com/Events/Pages/ Convention/default.aspx
Insurance Council of Texas Workers' Compensation Conference Sep 17 Austin Omni Hotel at Southpark Austin, TX Insurance Council of Texas https://www.insurancecouncil.org/
American Agents Alliance Conference & Expo Sep 17-19 JW Marriott Desert Springs Resort & Spa Palm Desert, CA American Agents Alliance https://agentsalliance.com/
IAIABC 106th Convention
Sep 21-24 Grand Hyatt Denver Denver, CO International Association of Industrial Accident Boards and Commissions http://www.iaiabc.org/convention
EVOLVE 2020
Sep 23-25 Doubletree Hotel, South Burlington, VT Vermont Insurance Agents Association https://www.viaa.org/Events/Pages/ convention/default.aspx
Annual Conference Sep 23-24 TBA Bismarck, ND Independent Insurance Agents of North Dakota https://www.iiand.org/Events/Pages/ AnnualConference/default.aspx
113th Annual Convention Sep 30-Oct 2 Embassy Suites Lincoln, NE Independent Insurance Agents of Nebraska https://www.iian.org/Education/Pages/ Events/Annual_Convention/default.aspx 2020 Annual Convention Oct 4-6 The Lodge at Deadwood Deadwood, SD ndependent Insurance Agents of South Dakota https://www.iiasd.org/Events/Pages/ Convention/default.aspx MCIEF Annual Conference
Oct 8-9 Hyatt Regency Orlando International Airport Orlando, FL MCIEF http://mcief.org
Annual Convention Oct 11-13 Omni Grove Park Inn Asheville, NC Independent Insurance Agents & Brokers of South Carolina https://www.iiabsc.com/Events/Pages/ EventsCalendar/default.aspx AIIAB Annual Convention & Trade Show
Oct 13-15 The Hotel Alyeska Girdwood, AK Alaska Independent Insurance Agents & Brokers https://www.aiiab.org/Events/Pages/ default.aspx
SIR Annual Conference
Oct 18-20 Westin Cincinnati Cincinnati, OH Society of Insurance Research https://www.sirnet.org
20th Annual TMPAA Summit Oct 19-21 Westin Kierland Resort Scottsdale, AZ Target Markets Program Administrators Association http://www.targetmkts.com 2020 Annual Convention Oct 20-21 Westin Hotel Downtown Indianapolis, IN Independent Insurance Agents of Indiana https://www.bigi.org JANUARY 13, 2020 INSURANCE JOURNAL | 47
2020 Insurance Industry Meetings & Conventions Directory IIAG CONNECT Fall Insurance Expo Oct 28-30 Brasstown Valley Resort Young Harris, GA Independent Insurance Agents of Georgia https://www.iiag.org ACORD Connect Oct 29 Swiss Re
Armonk, NY ACORD http://acordconnect.org
IIAD's Jim Millerman Insurance Convention Nov 5 Irving Convention Center Irving, TX
Independent Insurance Agents of Dallas http://www.iiadallas.org
TSLA 2020 Annual Meeting Nov 8-9 Four Seasons Hotel Austin, TX Texas Surplus Lines Association http://tsla.org/meetings_2020_annual.htm
January 13, 2020
January 13, 2020
January 13, 2020
Pennsylvania Lumbermens Mutual Insurance 2005 Market St., Suite 1200 Philadelphia, PA 19103
NORGUARD INSURANCE COMPANY 39 Public Square Wikes-Barre, PA 18701
AMGUARD 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.
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.
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.
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.
January 13, 2020
January 13, 2020
January 13, 2020
Horace Mann Property & Casualty Insurance Company 1 Horace Mann Plaza Springfield, IL 62715
Fidelity and Guaranty Insurance Company One Tower Square Hartford, CT 06183
St. Paul Guardian Insurance Company One Tower Square Hartford, CT 06183
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.
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 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.
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.
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.
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.
48 | INSURANCE JOURNAL | JANUARY 13, 2020
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Golf Tournament & Trade Show Nov 11-12 IBA Kern County http://ibakern.com/tradeshow/
2020 IIAC Mid-Year Convention
Nov 12 Aqua Turf Plantsville, CT Independent Insurance Agents of Connecticut https://www.iiact.org/Events/Pages/ Mid-Year/default.aspx
Annual Convention & Trade Show Nov 18-20 Hyatt Regency Louisville Louisville, KY BIG I Kentucky https://www.iiak.org/Events/Pages/ Convention/default.aspx
January 13, 2020 January 13, 2020
January 13, 2020
EASTGUARD INSURANCE COMPANY 39 Public Square Wikes-Barre, PA 18701
Clear Blue Insurance Company B7 Tabonuco 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 Accident, Health, and Property 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 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.
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.
Continental Heritage Insurance Company 200 Park Avenue, Suite 400 Orange Village, OH 44122 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.
Advertisers Index January 13, 2020
January 13, 2020
Spinnaker Insurance Company 1 Pluckemin Way, Suite 102 Bedminster, NJ 07921
Everest National Insurance Company 251 Little Falls Drive Wilmington, DE 19808
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 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.
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.
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Access Home Insurance www.accesshomeinsurance.com SC3 Applied Underwriters 2, 3, 52 www.auw.com Brecht & Associates www.brechtassoc.com SC2 Golden Bear Insurance www.goldenbear.com 17 IIA of Houston www.iiah.org SC2 Monarch E&S Insurance Services www.monarchexcess.com W4 Nationwide Mutual www.nationwide.com 15 Pacific Gateway Insurance Services www.pgiainsurance.com W1 PersonalUmbrella.Com www.personalumbrella.com 4, 5 Philadelphia Insurance Companies www.phly.com 7 RSG Underwriting Managers www.ryansg.com 51 RT Binding www.ryansg.com 11 Ryan Turner Specialty www.ryansg.com 9 Texas Mutual www.texasmutual.com SC1
JANUARY 13, 2020 INSURANCE JOURNAL | 49
Closing Quote How Technology Can Transform the Way Agencies Sell and Service Commercial Lines
By Michael Rabinowitz
C
onsumers are embracing digital purchasing habits, and that is creating new challenges for independent insurance agencies. At first these were only seen on the personal lines side of the business — in the forms of heightened customer expectations and increased competition from the direct channel. But now these same marketing forces are being seen in commercial lines as well. In order to compete, independent insurance agencies must invest to match the expectations of the new connected consumer society. In the client’s mind, the “customer experience” defines how you do business. And the customer is always watching, so your agency must be efficient.
In order to win, independent insurance agencies must continue to deliver on their competitive edge — superior personalized service, before and after the sale. But as the complexity of writing and servicing commercial risks widens, the toll these policies take on agencies can fast become overwhelming. Significant productivity gains are required if an agency hopes to land larger accounts and remain profitable doing it. The challenge agencies face is twofold: • Scale the output of their organizations to the growing demands of the commercial insurance landscape. • Scale their knowledge and expertise to the growing complexity of commercial accounts. Local agencies are suddenly facing competition from all over the country, so expanding the types of businesses they pursue is becoming critical for continued success. Commercial lines have always come with a steep learning curve. Now the flood of new carriers and superspecialized risk products have made merely “keeping up” difficult. Understanding the needs of the customer and the
range of insurance products to best protect them is the core of commercial insurance — and that aspect must shine through. It often comes down to knowing carrier appetites. Agencies are looking at technology to offer guidance, provide winning focus, and multiply results. Here are some key areas where software can transform time-consuming workflows: 1. Lead management – The ability to scale is imperative and leveraging automation will improve the reach and quality of marketing efforts. The goal is to reach more prospects with less resources. The right sales tool also provides visibility into the overall sales pipeline, while keeping agents focused on the prospect right in front of them. 2. Submissions – Lost commercial submissions can be expensive. There are just so many opportunities for something to slip between the cracks. Employing a central hub to organize and track submissions not only keeps the agency aware of the current disposition of transactions, but it can also highlight potential opportunities to help win the account and lift the profitability of the agency.
3. Carrier Appetites –
Leverage third-party services for guidance on carrier appetites and the evolving products available. This is often the key to staying ahead of the game. 4. Certificates – Certificates are perhaps the most time-consuming and costly activity imposed on agencies. Look for solutions, with serviceability in mind, that streamline the process and provide self-service options wherever possible. (Clients have learned to prefer self-service in recent years.) 5. Schedules – Maintaining large schedules can be fraught with errors. Collaboration with the insured is key. So, leverage software that focuses on productivity gains like providing direct import and export capabilities. Additionally, look for these same tools to validate and compare schedule revisions against existing data. Technology can gift back a significant portion of your agency’s scarcest resource — time. What you choose to do with that time will determine how your agency competes. Rabinowitz is a product manager for EZLynx.
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