Insurance Journal West 2020-03-23 by Insurance Journal

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March 23, 2020 â&#x20AC;˘ Vol. 98 No. 6

Contents

Idea Exchange

Special Report

News & Markets

Coronavirus Impact on Workersâ&#x20AC;&#x2122; Compensation Limited But Some Workers May Be Covered

Corporate Profiles

Spotlight: The Risks of Pups at Breweries, Wineries, and Beyond

Special Report: Manufacturers Mostly on Their Own; Insurance, Remote Work Not Much Help for Assembly Lines

Ask the Insurance Recruiter: 5 Lies Insurance Agencies Believe About Recruiting

The Wedge: Teach New Producers to Diagnose Success Early and Often

Minding Your Business: Account Manager and CSR Roles and Performance

How Hotels Can Prevent Human Trafficking

Closing Quote: How to Manage Risk in a Hardening Market

Departments 8 Opening Note 6 | INSURANCE JOURNAL | MARCH 23, 2020

12 Declarations

12 Figures

30 My New Markets

32 Business Moves

34 People

INSURANCEJOURNAL.COM

THE TINIEST DETAILS CAN MAKE ALL THE DIFFERENCE WHEN IT COMES TO KNOWING AND SERVICING AN INDUSTRY LIKE NO OTHER.

You need a carrier that specializes in an industry to find an exceptional level of service to match. We make it our business to know all there is to know about manufacturing. And with that deep specialization, comes expertise in underwriting, risk engineering and claims – all working together. All to help you develop customized product solutions that mitigate risk and maximize productivity for your mid- to large-size clients across a number of industries. Add to that an enhanced use of data & analytics, an extensive suite of unmatched capabilities, and a commitment to creating exceptional experiences, and it’s easy to see the difference true specialization can make. The Buck’s Got Your Back.® TheHartford.com/specialization The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT. 20-ML-244331 © February 2020 The Hartford

Opening Note Write the Editor: awells@insurancejournal.com

A Warning from Tomorrow

hile most of the world is focused on preventing the spread of Covid-19, there’s another looming catastrophe almost certain to happen: cyberattacks. A new government report on cybersecurity, “A Warning from Tomorrow,” asserts the nation is seriously underprepared for cyberattacks and is calling for the creation of a federally-funded center to develop cybersecurity insurance certifications and a public-private partnership on cyber risk models. “Our country is at risk, not only from a catastrophic cyberattack but from millions of daily intrusions disrupting everything from financial transactions to the inner workings of our electoral system,” says the report from the Cyberspace Solarium Commission. The commission advocates a strategic approach to cybersecurity that it refers to as “layered cyber deterrence,” which has the goal of a “reduced probability and impact of cyberattacks of significant consequence.” It organizes its proposals around what it calls six pillars: reforming the U.S. government’s structure and organization for cyberspace; strengthening norms and non-military tools; promoting national resilience; reshaping the cyber ecosystem; operationalizing cybersecurity cooperation with the private sector; and preserving and employing the military instrument of national power. According to the report, the country is “dangerously insecure in cyber” and increasingly relies on networks of digital devices that are vulnerable, if not already compromised. “The status quo is inviting attacks on America every second of every day. The status quo is a slow surrender of American power and responsibility,” the report says. The commission says the government needs to step in because the insurance industry is failing to provide financial incentives for better cyber risk management. The commission says the country has lost hundreds of billions of dollars to nationstate-sponsored intellectual property theft using cyber espionage, and that a major cyberattack on the nation’s critical infrastructure and economic system would “create chaos and lasting damage exceeding that wreaked by fires in California, floods in the Midwest, and hurricanes in the Southeast.” The bipartisan commission was established by the 2019 National Defense Authorization Act. Senator Angus King (I-Maine) and Representative Mike Gallagher (R-Wisconsin) are co-chairs. Its members include cyber experts, private sector representatives, members of Congress and senior government officials. These “strategists, technologists, economists and policymakers” were charged with coming up with a comprehensive strategy for how the United States should defend itself. In addition to its insurance proposals, the commission also recommends a new cybersecurity bureau in the State Department and a national data privacy protection law. Another recommendation is that the government institute an economic continuity plan for after a catastrophic cyberattack. It calls for cloud security certification or modernizing corporate accountability reporting requirements, and emphasizes a need for steps to secure elections from foreign intervention. The commission members urged the public to demand that government and private sector leaders “act with speed and agility” to address cybersecurity. Editor-in-Chief

‘The status quo is inviting attacks on America every second of every day.’

Andrea Wells

8 | INSURANCE JOURNAL | MARCH 23, 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: Larry Chasin, John Mina, Jim Sams, John Welty Columnists: Mary Newgard, Catherine Oak, Bill Schoeffler, Randy Schwantz

SALES / MARKETING

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

DESIGN / WEB / VIDEO

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

ACADEMY OF INSURANCE

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

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Property

Workers Compensation

News & Markets Coronavirus Impact on Workers’ Compensation Limited But Some Workers May Be Covered

‘[T]he more widespread COVID-19 becomes, the more difficult it may be for the employee to show that it is work related rather than an ordinary disease of life to which the general public is exposed.’

By Jim Sams

he outbreak of coronavirus has already resulted in some workers’ compensation claims and more are expected. But whether those claims are going to succeed depends on the individual circumstances and the state where the infection occurred. While compensability issues will play out case-by-case, workers’ compensation insurers in at least two states have decided that they will guarantee workers’ compensation benefits for health care workers and first responders. 10 | INSURANCE JOURNAL | MARCH 23, 2020

Kentucky Employers Mutual Insurance Co. announced effective immediately it will pay wage-replacement benefits for any first responder or employee in the medical field who is quarantined because of direct exposure to a person diagnosed with COVID-19. Ryan Worthern, communications director for KEMI, said the insurer’s staff decided to adopt the policy, but informed its board of directors and Gov. Andy Beshear of the decision. “Based on our interpretation of Kentucky workers’ compensation laws and given the unprecedented circumstances

surrounding this pandemic, KEMI policyholders needed the assurance of knowing that KEMI will provide the appropriate care and benefits for those first responders affected by COVID-19,” Worthern said in an email. “Taking care of our own is exactly what KEMI was created to do, and we are grateful to know that our board fully supports this swift action.”

Washington State Fund

KEMI’s announcement follows a decision March 5 by the Washington state Department of Labor and Industries to

continued on page 14

INSURANCEJOURNAL.COM

Figures $19 Million

$100,000

$1 Million

The Connecticut Foundation Solutions Indemnity Company — the new entity charged with overseeing the distribution of state funds to help Connecticut homeowners with crumbling foundations — has finally received a long-awaited $19 million. The captive insurance company had hoped to receive $20 million more in state bonding this year, but the Dec. 7 meeting of the State Bond Commission was canceled.

The minimum amount of liability insurance that would be required for operating a delivery robot in Missouri if a proposed bill is passed by the state’s legislature. The proposal Missouri lawmakers are considering would limit the robots’ weight to 200 pounds, excluding the cargo, and their speed to a maximum of 10 mph. The robots must be capable of navigating on sidewalks and roads without interfering with people or motor vehicles.

The amount in grant funding through the Border Zone Fire Department (BZFD) program that will be going to professional fire departments along the Texas-Mexico border. The funds will provide specialized equipment, maintenance, and medical supplies to support emergency services in local jurisdictions associated with the execution of border security activities. Local jurisdictions include Brownsville, El Paso, Hidalgo, La Grulla, Laredo, Mercedes, Palmview, Rio Grande City, Robstown, Roma, San Juan and Jim Hogg County.

1 in 5

Declarations Distracted Driving Addressed

“With this legislation, South Dakota can join a growing list of states that are taking steps to address distraction-related motor vehicle crashes and fatalities.” — Steve Schneider, American Property Casualty Insurance Association (APCIA) vice president, Midwest region state affairs, comments on a bill passed by the South Dakota Legislature that bans the use of smartphones and other electronic communication devices while driving.

Commercial Auto Claim Severity

“Over the past few years, we have worked diligently to diversify our business mix in specialty insurance, while continuing to work to improve our binding auto results to a level of sustainable profitability. 12 | INSURANCE JOURNAL | MARCH 23, 2020

Ultimately, we have seen greater than expected claim severity throughout all of commercial auto and made the decision to fully focus on our growing specialty lines.” — Naveen Anand, president and CEO of Dallas-based specialty property/casualty insurer Hallmark Financial Services Inc., remarks on his company’s decision to exit its Binding Primary Auto business, which is primary commercial auto coverage written through brokers.

Tenant Lawsuit

“Every tenant has a right to dignified and habitable housing, even in low-cost housing, even in housing of last resort.” — Jamie Trinkle, an attorney for the Oregon Law Center, said an RV park south of Warrenton, Ore., did not provide that to his client and other tenants. His client has filed a lawsuit against the owner alleging negligence over living conditions in a trailer.

That’s the ratio of fatal pedestrian crashes in New Mexico’s largest city last year that occurred in a dimly lighted and highly congested section of historic Route 66 — an area plagued by poverty. An analysis found that Albuquerque saw 42 deaths in 2019 related to fatal pedestrian collisions, and a significant number of these occurred in the area city officials call “forgotten.”

Tornado Devastation

“The dogs started barking before the sirens went off, they knew what was coming. Then we heard the roar.” — East Nashville, Tenn., resident Paula Wade on the moment one of several tornadoes ripped through her neighborhood on March 3. At least six tornadoes were reported to have spawned out of severe storms in the region, shredding dozens of buildings and killing 24 people.

To Shake or Not

“I’m a business person. … But if somebody else does it next time, I might try to be careful because of the coronavirus.” — Anna Alexander, a property manager in Virginia Beach, Va., mulling over whether to shake hands with a customer the next time they reach out to her. INSURANCEJOURNAL.COM

WELCOME

TERRI MORAN! The Surplus Line Association of California welcomes TERRI MORAN OF PAUL HANSON PARTNERS as the new chair of the Board of Directors. We wish her well as she takes the helm and we look forward to working with her. CONGRATULATIONS, TERRI!

slacal.com

News & Markets continued from page 10 pay wage-loss and medical treatment expenses for any health care worker or first responder who is quarantined because of coronavirus exposure. Washington operates a monopoly workers’ comp system, so that policy impacts every employee in the state who is covered by the state system. L&I spokesman Tim Church said the department has already received several workers’ compensation claims due to coronavirus exposure, but he did not know if they were filed by medical or health care workers. Church said a quarantine normally would not be covered by workers’ comp unless the worker was made ill by workplace exposure. Church said coronavirus claims by Washington workers outside of health care or emergency services will be decided on a case-by-case basis.

NCCI Watching

The National Council on Compensation Insurance, a rate advisory organization for most U.S. states, said that it remains to be seen whether other states will follow Washington state’s lead. NCCI said that many state workers’ comp statutes exclude “ordinary diseases of life” such as the common cold or flu. However, NCCI said at least 10 states have issued mandates for coverage of coronavirus by health insurers. The directives vary but include coverage for

14 | INSURANCE JOURNAL | MARCH 23, 2020

testing and visits to emergency rooms or urgent care facilities without deductibles or copays, NCCI said. “These measures, if expanded to more states, could have the impact of limiting claim activity in the WC market in those cases where only testing or quarantine are necessary,” NCCI said. John F. Burton, a retired Rutgers University professor and national workers’ compensation expert, told the Society of Human Resources Management that some states have specific lists of occupational diseases in statute, and coronavirus “is certainly not on those lists.” Megan B. Caramore, a partner with Vandeventer Black in Norfolk, told SHRM that obtaining coverage in Virginia will be an uphill battle under that state’s system, but workers covered under federal law. “The Virginia Workers’ Compensation Act requires the claimant to prove that ordinary disease of life arose out of the employment by clear and convincing evidence (a heightened burden of proof),” Caramore explained in an email. “Under the Longshore and Harbor Workers’ Compensation Act, the claimant is frequently entitled to a presumption that the injury/illness is related to the work, and the employer bears the burden of rebutting the presumption.”

Specific Facts

Fisher Phillips, a national law firm that specializes in employment law, said whether COVID-19 is compensable under

workers’ comp depends on the specific facts. The worker must show that the illness or disease arose out of or was caused by conditions peculiar to the work and that he or she had a greater risk of contracting the disease and in a different manner than the general public, the firm said. Woodruff Sawyer, another national employment law firm, gave two examples illustrating how differently state workers’ compensation laws treat occupational illnesses. In South Carolina, a contagious disease is not covered for workers who contracted the disease from co-workers or who faced equal exposure while away from work. In California, employees sickened by communicable diseases were able to get benefits by showing they were particularly vulnerable. Woodruff Sawyer said a Disneyland employee who contracted measles was awarded benefits for the illness in 2015 because he showed he had been exposed to unvaccinated foreign visitors at the park. California workers who were exposed to dust while on the job also won claims seeking coverage for valley fever, which is caused by fungus spores that live in soil.

Case-by-Case

Two insurance carriers gave notice of their stand toward the coming workers’ comp claims in notices earlier this month: Texas Mutual Insurance Co. and SAIF, Oregon’s state-chartered workers’ comp insurer, both issued bulletins that said they will decide whether coronavirus exposure is compensable on a case-by-case basis. Texas Mutual added this caveat: “However, the more widespread COVID-19 becomes, the more difficult it may be for the employee to show that it is work related rather than an ordinary disease of life to which the general public is exposed.” A white paper issued by Aon explains why greater exposure to the general public tends to limit liability for workers’ comp. “While every jurisdiction has specific laws pertaining to workers’ compensation and communicable disease claims, the general rule for most industries is that the matter would likely not be deemed compensable if the employee was considered at no greater risk than the general public.” INSURANCEJOURNAL.COM

News & Markets Chuck E. Cheese Sued Over Hair Stuck in Ticket Machine at Oregon Location

woman is suing a family entertainment center saying her hair got caught in a machine at the Southeast Portland center for 20 minutes. Ashreana Scott is suing CEC Entertainment, also known as Chuck E. Cheese family fun center, for $1,000, alleging that the business was negligent. In addition to the money, Scott has asked for a jury trial, and that Chuck E. Cheese put an adequate warning sign next to the machine. According to the lawsuit, Scott was at the center Dec. 8 when she her hair got caught in a machine where players feed paper tickets which can be redeemed for prizes. The lawsuit says she was stuck for 20 minutes until an

employee freed her. She said the event caused her injuries, discomfort and headaches. Before filing the lawsuit, Scott issued Chuck E. Cheese’s insurance company a written demand to pay the negligence claim, but the insurance company refused to settle, court documents said. A Chuck E. Cheese manager at the location wouldn’t comment on the suit, but said the ticket machines have signs warning people their hair could get caught. Copyright 2020 Associated Press.

Circus Circus in Las Vegas Faces Suit in 2019 Beating Death

he husband of a California woman who was found beaten to death at a Nevada casino is suing the hotel and casino. An attorney for Robert Morris filed the lawsuit in Washoe County District Court in connection with the death of 37-year-old Amber Morris. Morris, of Moreno Valley, California, died of blunt force trauma to her face and head in July 2019. According to an affidavit, her body was discovered lying half-naked near the door of a Circus Circus Reno hotel room. An autopsy found she was strangled, and her face had been stomped on, causing bleeding in her brain. Tevin Raeshaun Johnson, 22, was arrested the following day on an open murder charge. He

pleaded not guilty and is facing trial in November. Morris was staying with her sister at the hotel while her husband finished his contracted work at the Tesla Gigafactory, east of Sparks, Nevada. The lawsuit alleges that Circus Circus Reno failed to provide adequate security to hotel guests. Sara Robbins, a publicist for The Row, which encompasses Circus Circus, Silver Legacy, and the Eldorado, declined to comment. Morris and his attorney are asking for an excess of $15,000 in damages. That also includes damages for past medical and funeral expenses, attorney fees and for costs accrued from the lawsuit. Copyright 2020 Associated Press.

California Employees Who Bring Labor Claims Can’t Recover for Their Unpaid Wages

he California Supreme Court has ruled that plaintiffs in Private Attorney General Act cases cannot recover for their own or their fellow employees’ unpaid wages, but are limited to recovering civil penalties set forth in the California Labor Code. The PAGA statute was enacted in 2004. It authorizes employees to file lawsuits to recover civil penalties on behalf of themselves, other employees and the state of for labor code violations. An

employee who brings a PAGA claim is entitled to keep as much as 25% of the recovery, while the state keeps 75%. Several cases have been brought under the California law, which gives employees the right to step into the shoes of the state labor secretary to bring enforcement actions. Gig economy companies like Uber have faced several such suits, including one ruling two years ago in which a Los Angeles state judge approved a $7.75 million deal offering 1.6 million California drivers

W2 | INSURANCE JOURNAL | MARCH 23, 2020

an average of $1.08 each to resolve one of several U.S. lawsuits challenging the ride-hailing giant’s contractor-based business model. The decision in Z.B., N.A. et al. v. Superior Court (Lawson) imposes a significant limitation on the scope and damages available in such claims, the website JD Supra is reporting. In Lawson, the employer Zions Bancorp sought to compel arbitration of the unpaid wages portion of the recovery. The Court agreed,

and found that back wages are not only subject to arbitration but are unrecoverable in a PAGA case to begin with, ruling that back wages constitute “compensatory damages” paid to the individual employees, not civil penalties payable to the state of California. Based upon the court’s ruling, while employees may pursue their individual wage claims in a civil action, they cannot recover unpaid wages through the PAGA statute, according to JD Supra. INSURANCEJOURNAL.COM

CHANGE IS HARD. CHANGE IS GOOD. The road to change is often long and not always easy to follow. But we’ve started down that road and have a clear vision of where we’re going. We hope you notice the big changes happening at State Fund and, better yet, let us show you where we’re headed. It’s a good thing.

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Dear Reader:

very business has a story to tell. For many corporations, small and large, that story ties closely to the personal lives of their founders. Throughout Insurance Journal’s history, we have come to know and a ppreciate many of the unique stories in our industry. And year after year, we have watched as our advertisers’ and readers’ companies have grown and changed.

As a leading industry news and information source, we are not able to profile all of the corporations that cross our path. Our position as journalists sometimes makes it difficult as well. Consequently, we have created this special supplement to allow our clients, and some of the corporations you may work with on a daily basis, to tell their story ... in their own words. We hope you find this supplement interesting and informative. Best wishes from all of us at Insurance Journal.

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The Road Less Traveled SIAA officially began in 1995, however, that doesn’t account for the experience derived from the SAN Group since 1983. The regional model, also started by Founder and Chairman, Jim Masiello, was successful beyond projections in the northeastern states. As he considered expanding SAN Group beyond the northeast (with encouragement from a number of insurance industry insiders), Masiello came to the conclusion that the best way to succeed in local markets is with good people based in those markets. That’s how the SIAA model was developed. Learn more about the model at siaa.net. SIAA now has 48 master agencies across the continental United States representing all local markets on the mainland US, with member agencies comprising 13% of all independent agencies. SIAA provides independent insurance agency members with:

• • • •

Access to the most competitive insurance companies More income and increased agency value E & S and specialty programs Agency development and support services

The SIAA model has grown exponentially over the last 25 years, evolving into a distinct distribution channel for its strategic partners. SIAA – The Proven Total Solution for Independent Agents, The Proven Distribution System for Strategic Partners

1995 Jim Masiello forms SIAA, with the vision statement: “SIAA is dedicated to the creation, growth, and retention of the independent insurance agency distribution system." The business model is designed to make an independent agency “instantly big”.

2000– 2001

500 Signed independent agency members as the alliance continues to grow, adding to the total number of independent strategic members as well as master agencies across the country.

2015

SIAA Reaches $6 Billion of total in-force premium and signs over 400 new member agencies for the 7th consecutive year.

2007 - 2008

SIAA reaches $2.5 Billion of profitable written premium through more than 2,500 signed member agencies. Establishes Alliance Program Services, which evolves into SIAA MarketFinder â&#x20AC;&#x201C; an E & S and specialty programs division to provide member agencies with the opportunity to write quality risks in hard to place markets. Launches SIAA Marketing to support SIAA, master agencies and member agencies in their sales, marketing and communications efforts. Relaunches insurancedeals4u.com â&#x20AC;&#x201C; the first of its kind, consumer facing website designed to provide online leads from consumers directly to SIAA member agencies.

Launches new online members portal to access SIAA support services, including: MarketFinder, SIAA Marketing and Online Store, Training & Learning Center (TLC), small commercial insurance program, premium financing, and more.

2020

SIAA will exceed $9 Billion of total in-force premium. Signed member agencies represent over 13% of total number of independent agencies in the United States. 459 agencies signed on as new members last year (11 consecutive years over 400). In order to support this level of success â&#x20AC;&#x201C; and all member agencies - SIAA has built a high-quality team with the experience and skills to carry the organization forward for another 25 years!

2010

A strong belief that independent agencies hold tremendous value for consumers and the insurance industry drives the organization at the 15-year mark. The desire to increase agency income and value motivates member agencies as SIAA reaches 3,500 signed member agencies and exceeds $3 Billion of in-force premium.

1995-2010

To learn how you can become part of our success and increase your agency income and value, contact us today. info@siaa.net | siaa.net

My New Markets Earthquake / DIC

Market Detail: Western Security Surplus

Insurance Brokers LLC (www.wssib.com) has 11 carriers offering: DIC, earthquake, flood, EQSL, replacement cost, competitive deductibles, full limits or loss limits, primary or excess limits, limits up to $100 million available, and more. Available limits: As needed Carrier: Unable to disclose States: Ala., Ariz., Ark., Calif., Colo., Fla., Ga., Hawaii, Idaho, Ill., La., Mo., Neb., Nev., N.J., N.M., N.Y., N.C., Ohio, Okla., Ore., Pa., R.I., S.C., S.D., Tenn., Texas, Utah, Wa., and Wash. Contact: Mark Kaufman at 800-733-5844, ext. 2105 or e-mail: markkaufman@WSSIB. com

Contractors Pollution Online

Market Detail: UCPM Environmental

Insurance (www.ucpm.com) offers contractors pollution liability (CPL), a growing product in the environmental insurance industry. Many owners and general contractors are requiring pollution insurance when contracting with subcontractors. To help find CPL options from various carriers, UCPM has partnered with multiple carriers to create an online quoting platform. Due to the automated underwriting process, the online quoting process is more efficient and offers more competitive premiums. Through this

program, retail agents can fill out one app and receive multiple quotes with different limit and deductible options, helping them find the best coverage for the best price for their client. Features of online portal include: immediate pricing and bindable quotes; one simplified online application accepted by all online carriers; multiple limit and deductible options; data analytics that drives competition and evolves carrier offerings; project-specific and annual practice quotes; limits up to $10 million/$10 million; deductibles from $1,000 to $25,000; contractors with projected annual revenues up to $100 million; enhanced coverages such as NODS, TPL and sudden and accidental site coverage; covered analysis to compare quote options side-by-side; every online submission serviced by a construction team broker; live chat with UCPM team members during business hours. With the ability to get multiple bindable quotes in a matter of minutes, the online CPL program can be a one stop shop for retail agents looking to quote CPL. Available limits: Minimum $250,000, maximum $10 million Carrier: Unable to disclose, non-admitted available States: All states Contact: Kevin Doyle at 800-685-8185 or e-mail: kdoyle@ucpm.com

Forestry, Logging, Wood Yard & Construction Inland Marine

Market Detail: SPS – Specialty Programs Solutions (www.spsins.com) has programs available for the following classes in all 50 states: logging operations; woodyard and sawmill operations; chipping operations; land clearing contractors; general contractors and developers; street and road contractors; grading and excavation contractors; builders’ risk; warehouseman’s legal liability; motor truck cargo; installation floaters; fine arts; EDP and medical equipment. Available limits: As needed Carrier: W.R. Berkley Company, One Beacon Insurance States: Ariz., Calif., Colo., Fla., Hawaii, Idaho, Mont., Nev., Ore., Texas and Wash. Contact: Jeff Vaughn at 770-833-3129 or e-mail: jvaughn@spsins.com

Liquor Liability

Market Detail: Centrex Underwriters (www.centrexuw.com) offers liquor liability insurance for adult entertainment, bars and taverns, clubs, comedy clubs, dance halls, fraternal organizations, nightclubs, restaurants, special events, and stores. Available limits: Minimum $50,000, maximum $1 million Carrier: Hudson Specialty Insurance Company States: Ala., Ariz., Ark., Calif., Colo., Dela., D.C., Fla., Ga., Hawaii, Idaho, Ill., Ind., Ky., La., Maine, Md., Mass., Mich., Minn., Miss., Mo., Mt., Nev., N.J., N.M., N.Y., N.C., Ohio, Ore., Pa., R.I., Tenn., Texas, Utah, Vt., Va., Wash., W. Va., and Wyo. Contact: Erik Carlson at 901-767-4754 or e-mail: ecarlson@centrexuw.com

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Business Moves The Andrew Agency, A & R Associates

The Andrew Agency has acquired A & R Associates in Alexandria, Va., effective Jan. 15, 2020. Founded in 1971, A & R Associates provides commercial insurance services to clients throughout Virginia, Maryland and D.C. The Andrew Agency, an independent insurance broker, provides personal and commercial insurance solutions to clients in Virginia, Maryland and D.C.

National

Aon, Willis Towers Watson

Global insurance brokers Aon and Willis Towers Watson announced a definitive agreement to combine in an all-stock transaction with an implied combined equity value of approximately $80 billion. Under the terms of the agreement unanimously approved by the boards of directors of both companies, each Willis Towers Watson shareholder will receive 1.08 Aon ordinary shares for each Willis Towers Watson ordinary share, and Aon shareholders will continue to own the same number of ordinary shares in the combined company as they do immediately prior to the closing. Upon completion of the combination, existing Aon shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis. According to S&P, Aon intends to combine with Willis in an all-stock transaction valued at about $30 billion. (Willis shares will be exchanged to Aon shares.) The combined company, to be named Aon, will be focused on the areas of risk, retirement and health. Combined, the companies have more than $20 billion in revenue. Aon reported $11 billion in revenue with $2.2 billion net income for 2019 compared to $9 billion revenue and $1.4 billion net income for Willis Towers Watson. Aon will maintain operating headquarters in London, United Kingdom. The 32 | INSURANCE JOURNAL | MARCH 23, 2020

parent company will be incorporated in Ireland. The combined firm will have 95,000 employee globally, with what the announcement said will be a “significant presence” in Chicago, New York and Singapore. John Haley will take on the role of executive chairman with a focus on growth and innovation strategy. The combined firm will be led by Greg Case and Aon Chief Financial Officer Christa Davies. The board of directors will comprise proportional members from Aon and Willis Towers Watson’s current directors. The parties expect the transaction to close in the first half of 2021.

East

FBinsure, Nimiroski Insurance Agency

FBinsure has acquired the Nimiroski Insurance Agency, an independent agency located in Attleboro, Mass. Established in 1963, Nimiroski Insurance has been an active member of the Attleboro community for more than 50 years, providing personal and business insurance to more than 1,000 clients. As part of the transition, the Nimiroski office will be relocating to FBinsure’s 8 Park Street location in the Attleboro city center. This is the sixth acquisition for FBinsure in the past four years. Most recently, FBinsure acquired the Jose S. Castelo Insurance Agency of New Bedford, Dartmouth, and Fall River, and the Reid-Hofmann Insurance Agency of West Bridgewater and Mashpee.

Warren Insurance Agency, Satellite Agency Network Group

Warren Insurance Agency Inc. recently joined Satellite Agency Network Group Inc., an alliance of independent insurance agencies in the Northeast. Warren Insurance Agency was founded in 1979 by its owner, Edward Warren, and provides home, auto, life and business insurance coverages to clients in Dorchester, Mass., and the metro Boston area. More than 370 members across eight states have access to more than 45 insurance companies and write more than $808 million in total combined premium at SAN Group. SAN is the founding master agency of SIAA, a national alliance of independent insurance agencies.

Hub International Limited, Kokkoris Insurance Services

Hub International Limited, a global insurance brokerage, has acquired the assets of Kokkoris Corp., d/b/a Kokkoris Insurance Services. Based in Astoria, N.Y., Kokkoris Insurance Services is a boutique insurance agency that provides commercial and personal insurance to clients, especially in the construction, real estate and hospitality industries.

South Central

Davis & Haynes, Stephens Insurance

Little Rock, Ark.-based Stephens Insurance LLC, an affiliate of Stephens Inc., has agreed to divest a substantial portion of its personal lines business to Davis & Haynes Insurance Inc. INSURANCEJOURNAL.COM

Davis & Haynes was established by former Stephens Insurance members Gene Davis, Ben Haynes and Doug Lowe. Haynes, Lowe and the account management team joining Davis & Haynes largely managed the personal lines business being divested. Stephens Insurance President and CEO Miles Stephens said in a media release that Stephens Insurance will concentrate on its commercial lines business. Stephens Insurance currently has more than 170 associates throughout Stephens Insurance’s network of offices in Fayetteville, Ark.; Dallas; Jackson, Miss.; Houston; and Birmingham, Ala.

Southeast

The Hagar Group, Bruening Insurance Agency, Renaissance Alliance

Renaissance Alliance Insurance Services, a membership alliance for independent insurance agencies, has added two new independent insurance agencies to its Florida network. The new agencies include Bruening Insurance Agency of Weston, Fla., and The Hagar Group of Inverness, Fla. Bruening Insurance is a family owned and operated agency serving Florida since 1964. In addition to the Weston office, the agency has an additional office in Jupiter, Fla. J. Bradley Bruening is president. The Hagar Group is the oldest and largest independent insurance agency in Central Florida, and is a family owned and operated company serving Florida clients since 1929. Greg Hagar is president. These agencies bring the total number of agencies that have joined the Renaissance Alliance network in Florida to 13 since opening the office less than a year ago. Founded in 1999, Renaissance Alliance is a membership alliance for independent agencies.

USI Insurance Services Acquire, Full Service Insurance Agency

USI Insurance Services, a provider of risk management, employee benefit and retirement plan consulting, has acquired Franklin, Tenn.-based Full Service Insurance Agency Inc. INSURANCEJOURNAL.COM

Founded in 1975, Full Service Insurance is a middle Tennessee independent insurance agency specializing in commercial insurance, employee benefits and personal risk solutions for businesses and individuals. According to John Pratt, vice president, Full Service Insurance, its clients will continue to have the opportunity to work with its team of local agents, in addition to gaining access to an expanded suite of tools, solutions and expertise available through the USI ONE Advantage. Headquartered in Valhalla, N.Y., USI connects over 7,000 professionals from approximately 200 offices to serve clients’ local, national and international needs.

PointeNorth Insurance Group, Iron Mountain Insurance

PointeNorth Insurance Group LLC, an independent insurance agency in the Southeast with local ownership, has acquired Iron Mountain Insurance, located in Birmingham, Ala. Iron Mountain Insurance, which specializes in property and casualty insurance, has joined the PointeNorth Alliance, which provides additional markets, services, and tools to help agencies develop new talent, grow organically and increase profitability. As a PointeNorth Alliance member, Iron Mountain Insurance can provide customers additional services and specialty programs in the areas of transportation, franchise, non-emergency and emergency ambulance and construction. Matt Kilgore, president of Iron Mountain Insurance, will serve as senior vice president of PointeNorth Insurance Group. Jonathan Scarborough, senior vice president of Iron Mountain Insurance, will also serve as senior vice president of PointeNorth Insurance Group. With the acquisition of Iron Mountain Insurance, PointeNorth Insurance Group expands to more than 200 employees.

Risk Strategies, Atlas Insurance Management

Risk Strategies, a privately held, national insurance brokerage and risk management firm, has acquired Atlas Insurance Management of North Carolina, a company

that works on the formation and management of captive insurance companies. The acquisition was part of Risk Strategies’ purchase of Atlas Group Limited and its affiliated entities. Founded in 2002, Atlas has manages captive insurance entities, as well as forms and operates a number of its own insurers. In particular, Atlas forms and operates protected cell companies, making cells available to captive clients and acting as fronting insurers as well as pooling reinsurers. The Atlas acquisition brings both onshore and offshore capabilities with a presence in multiple domiciles, as well as licenses in 10 U.S. jurisdictions. This expands Risk Strategies' operating presence outside of the United States. It also adds Atlas’ team to Risk Strategies’ client resources. With the addition of Atlas, Risk Strategies is now involved with over 1,000 captive programs. Risk Strategies is a privately held, national firm with offices across the country.

West

Virtus, First Line Insurance Services

Virtus LLC and its subsidiary Virtus Rocky Mountain LLC have acquired the Denver, Colo.-based insurance brokerage firm, First Line Insurance Services. First Line’s focus has been on personal insurance and specialty insurance, catering to vacation rental and storage unit owners. Virtus is a Kansas City-based insurance brokerage and consulting firm.

Alliant, LifeBalance Program

Alliant Insurance Services Inc. has acquired the Portland, Ore.-based LifeBalance Program, adding the well-being discount program to its employee benefits group’s suite of products and services. The entire LifeBalance team will join Alliant and continue serving clients nationwide from its Portland headquarters. Newport Beach, Calif.-based Alliant provides property/casualty, workers’ comp, employee benefits, underwriting, surety, and financial products and services. MARCH 23, 2020 INSURANCE JOURNAL | 33

People National

EPIC Insurance Brokers and Consultants, a retail property

and casualty insurance brokerage and employee benefits consultant, has expanded its insurance offering in the farm and ranch insurance market with a new practice being led by Chris Moore, president of EPIC Farm & Ranch. The Farm & Ranch practice will be a culmination of specialists in Indiana and Florida serving clients across a national footprint. Moore joined EPIC from ONI Risk Partners, where he led the Farm & Agribusiness practice. ONI Risk Partners was a part of the acquisition of Prime Risk Partners by EPIC in November 2019. Moore currently works with more than 100 farm clients across 12 states. The Farm & Ranch practice’s primary focus is working with clients to proactively manage emerging risks. The practice will work in partnership with the team from the Jerry Parks Agency, a division of EPIC and their specialty expertise in equine insurance.

Jay Coon

East

Maryland Insurance Commissioner Al Redmer Jr. has named Jay Coon as deputy commissioner for the Maryland Insurance Administration. Coon is a veteran insurance executive with 30 years of industry experience. Most recently, Coon was second vice president and commercial portfolio lead - agent workstation at Travelers Insurance Co., where

he led a team responsible for business solutions and business architecture for commercial insurance software products. Before his six-year tenure at Travelers, he was an assistant vice president for commercial specialty operations/business architecture at The Hanover Insurance Group for nearly nine years. Earlier in his career, he was an executive at USF&G/ St. Paul Cos. and Aetna Life and Casualty.

Wye River Insurance has appointed Katherine Santarelli as president, leading

day-to-day operations and providing strategic brokering and consulting services for the newly-formed insurance brokerage. The Baltimore, Md.-based boutique brokerage serves real estate and construction professionals in the multifamily industry. Santarelli will work closely with Bozzuto Group Vice Chairman Rick Mostyn, who will now concurrently serve as CEO of Wye River Insurance. Mostyn will offer strategic counsel and guidance based on his more than 40 years of experience in apartment development, acquisition, homebuilding, property management and construction. The startup of Wye River Insurance is a natural evolution for Santarelli, who for 15 years during her time in the insurance industry oversaw the placement of complex controlled insurance programs for The Bozzuto Group and other real estate and construction clients. Prior to joining Wye River Insurance, Santarelli served as the Real Estate and Construction Practice leader at

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RCM&D, in which she directed the placement of builders risk programs for multifamily and retail projects.

Cathy Cobbs

Southeast

Allstar Financial Group has added Cathy Cobbs to

its advertising division as its public relations manager. Cobbs has more than 25 years of experience in the fields of journalism, public relations, and community engagement. Most recently, she worked at Transitions Homeless Center in Columbia, S.C., in the areas of fundraising and community outreach. Cobbs’ functions will include community engagement locally and nationally for Allstar Financial Group’s family of companies. She will work with the Allstar Charitable Foundation to raise public awareness about both the foundation and the company, and its employee volunteer engagement program. The Allstar Charitable Foundation is financed by Allstar’s employees, which is then matched by the company annually. The foundation uses a significant portion of its annual budget to fund 10 regional charities, while other funds are donated to a national organization.

Jose Perez

Southern Insurance Underwriters, Inc. (SIU) has added Jose Perez to the

Commercial Property and Casualty underwriting team. Perez comes to SIU with more than 20 years of experience in the insurance industry and a penchant for developing strong relationships with the independent insurance agents he partners with. Prior to partnering with SIU, Perez served as a commercial property and casualty broker and wrote more than $3 million in new business last year. He also has experience writing personal lines, managing sales and production, and as a compliance officer. Established in 1964 by W.C. Duesenberg, SIU is a 54-yearold managing general agency located in the Atlanta area. SIU offers a range of products and markets to over 3,000 independent insurance agents including personal property, workers’ compensation, inland marine, professional lines, forest products, commercial transportation and commercial property and casualty.

South Central

Carleen Patterson joined Alliant Insurance Services

in Dallas, Texas, as first vice president and practice leader within the company’s Public Entity Group. Patterson is regarded for her property and casualty expertise for large governmental and higher education clients. Additionally, she has experience working with city, county and state governments, as well as school districts, from coast-to-coast. In her new role, Patterson will serve as a national resource to existing clients and prospects. Prior to joining Alliant, INSURANCEJOURNAL.COM

Patterson was a managing director with a global insurance brokerage firm.

Casey Parisoff

Greg Brandon

Greg Brandon has been appointed as executive director of the Surplus Lines Stamping Office of Texas (SLTX). Brandon succeeds Don Meyer, who had served as interim executive director of SLTX since October 2019. For the past 18 years, Brandon has worked for Valero Energy Corporation in San Antonio, Texas. Most recently, he served as director of Property Insurance & Risk Control Engineering since 2007. In this position, he was responsible for management and procurement of global commercial and captive insurance products, directing risk engineering programs, and coordinating annual review and analysis of company claims data. Brandon has been involved with the San Antonio Chapter of the Risk Insurance Management Society (RIMS) for several years, and has held several leadership positions in the organization.

Midwest

St. Louis, Missouri-based

POWERS Insurance & Risk Management has hired Casey Parisoff and Kathy Fagan to

lead its new POWERS Surety Bonds division. Parisoff serves as the national director of Construction Services. He will oversee and manage the new division, which specializes INSURANCEJOURNAL.COM

Kathy Fagan

in insurance, bonding and risk management for various blue-collar industries. Parisoff previously was the managing member and founding partner of a middle market insurance agency based in Overland Park, Kan. Fagan joins Parisoff in the new division as senior bond account executive. She will lead the daily account services of the surety department. The new division will focus on bond products and services for all surety programs to help safeguard the financial well-being of construction clients. These tailored surety services include industry-specific niche specialties in construction, commercial, environmental, healthcare, court and real estate bonds.

Priscilla Hammonds

Grange Insurance in

Columbus, Ohio, named Priscilla Hammonds as assistant vice president of Diversity & Inclusion and Community Relations. Hammonds has served as assistant vice president of Diversity &

Inclusion since joining Grange in 2015. She adds the community relations role as Patricia Eshman retires after more than a decade leading Grange’s community relations team. Before joining Grange, Hammonds served as a senior diversity consultant at Nationwide Insurance, where she developed and executed on diversity and inclusion strategies in support of key company initiatives. Prior to Nationwide, she served in several leadership roles at State Farm Insurance, including as director of Diversity and corporate diversity consultant.

Pat McAuley

West

The Surplus Line Association of California announced that Pat McAuley,

who had served most recently as the senior vice president for the education and compliance department, officially retired on Feb. 28 after more than 25 years with the association. McAuley, who had previously led the SLA’s data analysis department, closed her career by spearheading the launch and implementation of the SLA’s new online learning center. The SLA also recently made two new executive moves.

David Kodama has taken on a newly created role as the SLA’s executive vice president, and JoAnn Del Gatto, the new vice president for the education and compliance department, steps into McAuley’s former job.

David Kodama

JoAnn Del Gatto

Kodama will oversee the education and compliance, financial analysis and digital communications departments. He previously worked for the American Property Casualty Insurers Association. His responsibilities there included the association’s policy development in surplus lines insurance. Previously, he was an actuarial manager and business operations director for CNA. Del Gatto previously worked for 14 years at AIG, where she was chief compliance officer and oversaw global compliance functions. She also recently worked as a regulatory risk and compliance consultant.

Aaron Cohen

Insurance Office of America has added Aaron Cohen to its

Western region. Aaron will expand the firm’s team of cannabis industry specialists as a risk management consultant, and he will be based in Encino, Calif. IOA is an insurance agency headquartered in Longwood, Fla.

MARCH 23, 2020 INSURANCE JOURNAL | 35

Spotlight: Restaurants & Bars Beer Hounds: The Risks of Pups at Breweries, Wineries, and Beyond

s springtime begins, winery and brewery

patios are bound to fill up with patrons looking to enjoy a By Larry Chasin nice meal and drinks in the beautiful weather. In recent years, pets have started to become more frequent guests at these sit-down locations. The trend is convenient for pet owners, who can spend quality time with all of their friends human and canine. A pet-friendly policy can serve to boost business at breweries and wineries, encouraging patrons to hang out longer and enjoy a full glass rather than a tasting. However, allowing pets on the premises also comes with several legal and logistical risks — risks that agents and brokers can help their clients understand.

What Are the Risks?

This pet-friendly trend comes as no surprise if we consider that pets are an integral part of American life. Sixtyseven percent of households own pets, according to the National Pet Owners Survey. Another way to put things into perspective is this: In 2019, an estimated $75.38 million was spent on the pet industry in the United States, up from $48.35 million at the beginning of the decade in 2010. This industry is on the rise and could mean big business for those accommodating furry friends in their establishments. Before considering a pet-friendly policy, business owners can research laws addressing pets on restaurant and bar premises in the states where they do business. The Americans With Disabilities Act has long required establishments to allow service animals, and denying entry to patrons with service animals would

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constitute discrimination. Over the past several years, many states have enacted laws that allow or restrict non-service dogs or other pets on outdoor patios at restaurants, breweries, and wineries. In the absence of clear regulations, many business owners simply implemented their own pet policies. However, as the trend has grown, it has become more important to understand these state laws. As of 2020, 17 states allow dogs in outdoor patio areas. So, it is in these states only that pet owners may legally be on the premises with their pawed pals. However, where pets are allowed, there are several restrictions. Some of the more common ones include: • People with pets must enter and exit through outdoor entrances to the patio dining areas, keeping the pet from entering the main dining facility. • Employees must wash

their hands after touching pets and cannot do so while in the process of preparing or serving food. • Pet owners must keep their pets on leashes so they can be held under control at all times. • Pets cannot sit on furniture at the venue, including chairs and tables on the patio. • Pets must not be permitted in any area where food is prepared. Second, before allowing pets on the premises, business owners of breweries, wineries and the like must be aware of potential health concerns. In theory, allowing pets in the establishment opens a number of potential issues that could stem from a pet’s fur to its waste and even to biting risks for other customers. Dog hair and pet waste can not only create an unsanitary dining

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Special Report: Manufacturing

Manufacturers Mostly On Their Own to Face Coronavirus Insurance

Remote Work Not Much Help for Assembly Lines By Andrea Wells

roperty/casualty insurance professionals are trying to provide advice and empathy to their manufacturing clients coping with the effects of the spread of the coronavirus. But they are not able to offer much in the way of insurance coverage. In many areas where manufacturers might be looking to recoup losses, P/C insurance just is not the answer. In traditional claim scenarios, agents and brokers spend their time advising on how to process the insurance claim and how to mitigate losses. “But in this case, it’s uncharted territory. We’re talking about loss of income that’s not a typically covered insurance peril, so it’s not something you could have insured for previously,” says Luke Foley, a producer at Graham Co. based in Philadelphia. The U.S. manufacturing sector began 2020 with hope. After five consecutive months of a contracting manufacturing economy, January 2020 showed signs of growth, according to the Institute for Supply Management, which reported a factory index of 50.9 in January, up from 47.8 in December. Readings above 50 indicate expansion, while those below 50 signal contraction.

But that hope faded when in February, the effects of the coronavirus began showing up – ISM’s factory index dropped to 50.1. Property/casualty insurance professionals are watching closely, trying to determine the effects of the coronavirus on the economy overall and on manufacturing. And trying to help where they can, even though their capabilities to do so are limited.

38 | INSURANCE JOURNAL | MARCH 23, 2020

“I don’t think anyone’s ever experienced anything like this, at least in my lifetime or in the last 50, 60 years,” says Graham’s Foley, who specializes in insurance and risk management programs for large privately-held manufacturing and distribution companies. Foley says most of his manufacturing and distribution clients have enjoyed strong organic growth in recent years.

“That’s a sign of a strong economy.” But the “elephant in the room” – the coronavirus – has his clients on edge. Some already were affected early in the pandemic because of suppliers that operate in China. A March survey by ISM on business and supply chain impacts – before widespread quarantines and business pullbacks — revealed that nearly 75% of companies already INSURANCEJOURNAL.COM

had supply chain disruptions due to coronavirus-related transportation restrictions, and more than 80% believe that their organization will experience some impact because of COVID-19. Of those, one in six (16%) companies report adjusting revenue targets downward an average of 5.6% due to the financial impact of the coronavirus. “The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak,” said Thomas W. Derry, CEO of ISM. “For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States — even if they can get orders filled.” Another survey by the National Association of Manufacturers in early March found that more than 53% of manufacturing firms anticipate a change in their operations in the coming months due to the coronavirus and more than 78% say that uncertainty around the outbreak is likely to have a negative financial impact on their businesses. More than one-third reported supply chain disruptions. The climate for manufacturing clients has been “crazy,” Foley says. “There’s obviously been a change and some fear in clients on what’s to come.” While many industries can have employees work from home, that’s not possible in manufacturing. “When you’re making things and producing in a manufacturing plant or in a warehouse, your product needs to get built,” he said. “You have to be there, so there’s been INSURANCEJOURNAL.COM

concerns over what’s going to happen in the next few weeks.”

Business Interruption

Foley says he’s been advising clients on best practices and ways to minimize business interruption. But there’s no great solution from an insurance standpoint. “Really, it’s a gray area,” according to Foley. “It’s not like a tornado, or wildfires, that wipe out plants.” Coverage could be available in seldom-bought supply chain disruption insurance. “Typically, those [policies] can include coverage for business interruption laws, and they may have, depending on the form, some coverage for a loss resulting from regulatory action or from government,” he said. “But it’s not a commonly purchased coverage.” While past pandemics have disrupted supply chains for manufacturers, Foley believes the coronavirus is different. “There’s been nothing of this magnitude and most clients, if they had been given the option two years ago to purchase this coverage, it was very expensive and they probably didn’t see the value in it honestly.” That may change going forward, he says. The insurance underwriting community is reactive. “They’re reactive in that they will develop insurance products post-incident,” he said. “So they’re going to either come out with a more widespread coverage that’s available so people can protect themselves from this risk in the future, or they’re going to, maybe conversely, make certain policies have more explicit exclusions as well.” Foley says existing coverage will now be tested.

“There’s a realistic scenario that throughout this process there could be people who are trying to trigger coverage and say, ‘Well there’s no real exclusion for an infectious disease. So, I’m going to try to trigger this,’” he noted. “And you never know if there’s one insurance policy, depending on the jurisdiction, that somehow does provide some small limited coverage.” If that happens, he predicts a market where carriers will try to protect themselves even further by putting additional exclusions going forward.

Coverage Unlikely

Chris Boggs, executive director of the Big “I’s” Virtual University, has been receiving calls and emails regarding the insurance implications of the coronavirus. The most common question he is getting is: “Is there business income coverage if a governmental authority (civil authority) requires businesses to close?” The short answer is “no,” Boggs says. “Before business income responds, there must be damage to property leading to the cessation of a business. This requirement applies to business income dependent property losses (supply chain) and civil authority losses covered by business income policies,” according to Boggs.

“Additionally, there is a specific property exclusion applicable to viruses that may (generally will) apply.” This is true for “standard” business income forms, he added. There may be some proprietary forms that respond, but these are rare, he said. In response to the coronavirus, the Insurance Services Office (ISO) created two business income endorsements, but Boggs noted that neither endorsement is assigned a form number. “Why? Because ISO did not file these endorsements on behalf of the industry. Rather, ISO made these advisory forms available for use by any member carrier,” Boggs explained. “Any carrier that desires to use either or both endorsements must file them with the relevant regulatory authority.” Tony Hopkins, vice president of business insurance at The Horton Group based in Orland Park, Ill., added that while the new ISO endorsements could provide a small sublimit in coverage, he hasn’t seen any carriers endorse their policies as of yet or offer similar coverage. If they did, the trigger would mean that the government shut down their location or access to their location. “But we haven’t seen any carriers outwardly offering

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MARCH 23, 2020 INSURANCE JOURNAL | 39

Special Report: Manufacturing continued from page 39 that kind of coverage.” Hopkins, who specializes in manufacturing, welding supply and industrial gas distribution, agrees there is “no express coverage to handle the coronavirus,” he said. “From a business interruption standpoint, from a supply chain standpoint, from a dependent property business income standpoint … because it’s not a physical loss per se to the location.” While there are many unknowns for his manufacturing clients, Hopkins says some have already started to feel the pain from an indirect standpoint and from a supply chain risk. Hopkins believes there could be coverage in “a very unique aspect of the market” that not many clients purchase today. “And that’s through an enterprise risk captive,” he said. “Enterprise risk captives are essentially designed for risks that the market either won’t handle, can’t handle, or doesn’t handle at a price that makes any sense.” But again, while coverage might be found through enterprise risk captives, it’s rare.

Workers’ Comp and Health

Workers’ compensation benefits might be available where an employee is found to have contracted the virus while at work, Hopkins said. However, while workers' comp coverage is a possibility, it’s not easy to prove, according to Boggs. What makes an illness an “occupational illness” and thus compensable under workers’ compensation? “More specifically, how does or might workers’ compensation respond to the coronavirus?” Boggs wrote

in a blog on Insurance Journal’s Academy of Insurance. Two tests must be satisfied before any illness or disease, including the coronavirus, qualifies as occupational and thus compensable under workers’ compensation, Boggs explained.

'First, the illness or disease must be occupational.' First, the illness or disease must be “occupational,” meaning that it arose out of and was in the course and scope of the employment. And second, the illness or disease must arise out of or be caused by conditions “peculiar” to the work. “Whether an illness arises out of and in the course and scope of employment is a function of the employee’s activities,” according to Boggs. “The simplest test toward determining whether an injury ‘arises out of and in the course and scope of employment’ is to ask: Was the employee benefiting the employer when exposed to the illness or disease?” Boggs asked. But he cautions that this “test” is also subject to the interpretations of various state laws. “Qualifying as ‘occupational’ is the low hurdle,” Boggs said. “The higher hurdle is whether the illness or disease is ‘peculiar’ to the work.”

Other Coverage Trends

The coronavirus is not the only challenge facing manufacturers, of course. The manufacturing sector continues to contend with a shortage of labor, which is having an effect on workers’ compensation.

40 | INSURANCE JOURNAL | MARCH 23, 2020

“Many manufacturers are challenged with being able to find and attract the best talent. Some just need any talent at all,” Hopkins said. He said the labor shortage is showing up in higher workers’ compensation claims “because they’re getting anyone ‘off the street’ and they lack experience.” Plus, like other industries, the manufacturing sector is also dealing with an aging workforce. Heath J. Kidd, vice president, Industry Solutions Product and Underwriting, National Insurance, at Liberty Mutual, says manufacturers are facing one of the tightest labor markets ever. “Productivity is flat and supply and demand are a problem when it comes to skilled workers. Attracting the best worker is a competitive advantage,” he said. Kidd believes attractive pay and benefits along with a good working environment are key. “Not surprisingly, the companies that pay well have workers who are less likely to get injured, and if they do get injured, they are back to work quicker,” he said. Technology is also changing the manufacturing sector. With that comes new risks, Hopkins says. “With robots and co-bots evolving so quickly, many of the manufacturers and integrators of this equipment aren’t well-versed in safety,” Hopkins added. “We’re seeing our clients put in these machines quickly because they have a demand and just a lack of bodies to be able to produce the goods that are needed to meet on time delivery,” he said. That process is upping the game for risk management to ensure proper safety controls are in place. “And so, we’re

doing a lot of evaluation of this new equipment,” he said. Property and excess liability insurance can be a difficult area for manufacturers. While many classes of manufacturing are seeing the same types of rate increases as the general property market, there are certain classes that are experiencing rate increases north of 200% to 300%, according to Christa Nadler, executive vice president at Risk Placement Services’ Chicago office. “Property rates have been depressed maybe 10-to-15 years, and a lot of the insurance companies that we work with were in a situation where they were paying out more losses than they were collecting and they were struggling to make money,” Nadler said. “That trend has been further exacerbated in manufacturing for some specific industries such as woodworking, food and recycling.” In today’s market, brokers may have only 10-15 markets that will consider quoting those classes, Nadler explained, while for other manufacturing classes they might have an “arsenal of a hundred different markets” to go to for property. But in general, for the “traditional manufacturer,” whether it be a metal or plastics maker, the insurance market hasn’t hardened as much as it has in other industry sectors, Hopkins said. “The exceptions are manufacturers that are running their own fleet of vehicles, where auto and umbrella have been significantly disrupted.” However, Hopkins and others serving the manufacturing sector are waiting to see what the coronavirus pandemic does before it is over. INSURANCEJOURNAL.COM

Idea Exchange: Ask the Insurance Recruiter 5 Lies Insurance Agencies Believe About Recruiting

s you read this list, I want you to think:

• Are these lies present in my firm? • Am I part of the problem? • Can I be part of the solution? Lie #1: Human resources can handle it all. I know plenty of insurance brokers on

Insurance Journal’s Top 100 list that have one HR/talent acquisition staff member managing 50-plus open jobs at one time, or all staffing needs for 80-plus offices. An overwhelming workload hurts the recruiting process, but executives are slow to see this because their disengagement starts when they say, “Recruiting isn’t my problem,” and pass the buck to HR.

The truth: Agencies with successful, comprehensive talent acquisition strategies have an Enterprise Wide Engagement philosophy. No leader is

excused from being invested in the process of sourcing, advertising, interviewing, hiring and onboarding candidates. Executives live out the motto: We’re better together.

Lie #2: We work with multiple recruiters because more is better. Do you allow

multiple producers in your office to call on the same prospect? No, because it’s a terrible idea. For the same reasons you track and cultivate prospective business, you shouldn’t work with multiple recruiters. Five insurance recruiters. That’s the answer most agencies give when I ask how many recruiters are working on their opening. The truth: Better is better. Candidates hate getting called five times and receiving five LinkedIn messages by five different recruiters about the same job. Executives, if you care about your agency’s image then choose one recruiting firm. Do your homework. Be intentional. Don’t fling jobs out there. Don’t make candidates feel like coming to work for you is the same experience as buying a used car.

ideal candidate profile, they fall into the trap of painting a Purple Squirrel. Nearly impossible to find, when the recruiting process goes into its fourth, fifth or sixth month, they don’t make adjustments.

The truth: People are not the same as candidates. Candidates are willing,

in the weeds, then agency leaders need to do the same in every phase of the process. By Mary Newgard

engaged participants in the job search process. If you have 100 people on a prospective employee list, never assume all 100 are candidates. It’s really more like 20-30 people. Your recruiting efforts must be centered on attracting them.

Lie #5: We recruit.

Lie #4: Finding qualified candidates is our biggest recruiting problem. I know

The truth: If it requires insurance experience, it requires recruiting. Insurance

of an agency that’s had five offers declined on a director of operations role in a search nearing the 6-month mark. They believe the failure in hiring someone is due to bad sourcing, but I’ve had countless numbers of candidates say they interviewed with them and will never go to work there. If multiple people have interviewed, then the problem is not sourcing. The problem is leaders who can’t see that the interview process is broken. The truth: Recruiting is a multi-step process. Each step, from sourcing and screening to interviewing, offers and resignation, is equally as valuable as the one before and after. Solely focusing on getting people in the door will never accomplish your hiring goals. If you like to hire people who can roll up their sleeves and work

Imagine one of your producers outlined this kind of business plan: I’m going to change my LinkedIn status to read “I sell insurance.” Plus, I’ll put a billboard up on the interstate. Then, I’ll kick back and wait for the phone to ring.

is a niche and getting harder by the day to fill with job ads. Don’t treat Indeed, ZipRecruiter, CareerBuilder, LinkedIn and Glassdoor as a catch-all. That’s an OK hiring strategy, but a terrible recruiting plan. When you’re recruiting, you’re crushing candidate sourcing through employee referrals, database building and continuous management, proactive cold calling, and networking events and campus recruiting/ internships.

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

Lie #3: There are always more candidates. When hiring managers create an INSURANCEJOURNAL.COM

MARCH 23, 2020 INSURANCE JOURNAL | 41

Idea Exchange: The Wedge

Teach New Producers to Diagnose Success Early and Often

here is a fun phrase in golf, “Drive for show, putt for dough.” It’s a subtle shot at those guys that can By Randy Schwantz rip it off the tee but can’t putt, so they don’t score so well. The reality is even more simple than that: There is a minimum of three parts in the game of golf that you can measure and therefore improve.

1. From the tee is “distance” and “in the fairway.” 2. From the fairway is “green in regulation” and “distance from the cup.” 3. On the green is “number of putts.” Those are your KPIs, or Key Performance Indicators. Yes, you can get intricately more sophisticated with a trackman, measuring plane, club head speed, angle of attack and more. However, a good golf coach will start with those basics to help you build a plan to improve your score. If you don’t keep track, and most amateur golfers do not, then it’s more difficult to diagnose what will improve your score. The same could be said for a new producer. If you don’t keep track, it’s more difficult to diagnose what will improve your ability to hit your new business goal and become the next Million Dollar Producer. With that in mind, here are five KPIs that will ensure you keep on track.

Average Account Size If you want to

be a Million Dollar Producer and obtain financial freedom, you’ll need to write the kind of accounts that will enable you to reach your goal while still being able to have a life. It’s pretty easy math: You need 50 accounts at $20,000 each, 20 accounts at $50,000 each, 100 accounts at $10,000 each, 0r 200 accounts at $5,000 each. Periodically, you need to evaluate this. If you write too many small accounts, it is guaranteed that you will get bogged down in the swamp of renewal, and it will kill your spirit. When that happens, you can easily become a glorified account manager instead of a respected producer.

So, you’ll want to compare your average account size to your goal, both in your existing book and in your prospect pipeline. Why would you prospect an account that won’t get you to your destination?

Number of Appointments

Once you set your new business goal, you’ll have to do some reverse engineering to determine how many accounts you need, with a high probability, to achieve that goal. When that happens, you’ll have a monthly target. Monitoring your “appointments set” frequently, will embolden your confidence that you are on track, or be a gut check that you must improve your prospecting skills and increase activity.

Qualifying Ratio

Suppose you owned a hotel with 100 rooms and your proforma was based upon a 75% occupancy rate to break even. If you go below 75%, you’ll lose money. If you go above 75%, you’ll not only break even but will make money. Your Qualifying Rate could be viewed the same way. Suppose you set your new appointment goal at 34 for the year, and you expected, based upon your differentiation and selling skills, to actively work on 26 of them. Out of the 26, you expect to close 50% and with that, hit your new business goal. What if only 20 are qualified to work on, and you still have a 50% close rate? You just went from closing 13 accounts to only closing 10. A

continued from page 36

significant difference. It’s not the end of the world, if you catch it early. You can adjust your activity and you can improve your ability to find pain. You can adjust, improve and get back on track, if you know the truth. Qualifying Rate is a KPI that is easy to track and keeps you in the know instead of in the dark.

Close Ratio

Quick review: You set a goal of 34 appointments. You plan to qualify 75% as workable deals, meaning you’ll walk away from 25% because they are too small, too weird, no pain, no relationship or the incumbent has a bold grip on them. Of the 75%, or 26 that you work on, you plan to close 50% or 13. That is your close ratio; those that you got by BOR or quoted and won. It’s another powerful KPI, that is easy to measure. If something goes awry here, you can diagnose and fix. If you don’t have your KPIs, it’s like having a poorly performing stock portfolio, but you don’t know which stocks are killing your return.

Activity to Appointment Ratio

Here is the last piece: Your activity to appointment ratios. Let’s do the math again. If you expect to set 34 appointments this year, you will want to determine how much activity it will take to accomplish that. In this example we are going to look at your ability to use the phone to set appointments. There are three sub-ratios to look at. a. Dials to Conversations b. Conversations to Appointment c. Dials to Appointment Dials Conversations Appointments 100 12 2

Dials to Conversations: 12 conversations / 100 dials = 12% effectiveness Conversations to Appointments: 2 Appointments / 12 Conversations = 16% effectiveness Dials to Appointments: 2 Appointments / 100 Dials = 2% effectiveness INSURANCEJOURNAL.COM

This is all easy to measure. If you are good at getting people on the phone, but it’s difficult to convert to an appointment, you can work on that aspect. If you struggle to get people on the phone to have a conversation, then you can add some marketing emails and/or improve your voicemails. By having these KPIs, you can take responsibility for your success.

Message to Producers

Your agency owner or sales manager is a very busy person. They generally do not have time to hold your hand and guide you along this path. You can either fall into a state of mediocrity and do what comes naturally or take control of your own destiny by becoming your own performance coach. Here is my recommendation. To become your own performance coach, take these five KPIs and put them on a spreadsheet, handwrite them or if you have a technology platform like we provide our iWin Agency Growth System Members, use that. Get your goals defined with precision, then update your worksheet weekly. Get three highlighter markers: green, yellow and red. At the end of each week, spend five minutes comparing your Actual to Goal. Using your highlighters, green for where you are on track or surpassing your goal, yellow for caution areas, and red for falling behind. Face the truth with courage. Take control and fix your problems. You might be a great appointment setter, but can’t find pain, so you quote and lose. You might be great at closing, but you are way short on appointments. The cause could be a lack of activity (too few dials), or your phone pitch is weak. Learning to self-diagnose will put you way ahead of most of your peers and competitors. Good luck and I look forward to seeing you in the line that says, “Million Dollar Producers” only! Schwantz is founder of The Wedge Group. He’s also the author of the book Agency Growth Machine. Phone: 214-446-3209. Email: randy@thewedge.net.

environment, they can cause discomfort or spread illness due to allergies and other issues. Agents and brokers should talk to their clients about the risks involved in welcoming pets into their facilities and whether a pet-friendly policy could hurt or help business. As agents and brokers talk to their brewery and winery clients about their pet polices, they can recommend several steps these business owners can take to mitigate their risk. These steps include: Obtain a pet-friendly permit: Management should confirm their business meets local guidelines for obtaining pet-friendly permits. Use the appropriate signage: To that end, brewery and winery owners should post signage at the front of their buildings and on the patios indicating pets are allowed and stating the rules. Restrict staff contact with pets: Staff should be restricted from making contact with pets while on shift, since this runs the risk of transmitting germs to the food. Have staff dedicated to keeping the venue clean: Staff should keep the patio completely clean of any animal hair, dander, waste and more. Any waste must be cleaned up with animal friendly chemicals within five minutes and staff should maintain a log for inspectors and customers. Require leashes: By requiring pet owners to use leashes, management can make sure pets are always under control and watched by their owners. Also, any pets on site should have a collar or harness with a current rabies tag and registration tag. Restrict pet access: Pets cannot be allowed to use seats, tables, countertops or any surfaces, as this opens up the chance for health hazards. Pets should also not be allowed to contact dishes or utensils. Utilize single-use, disposable containers: All food and water provided to pets should be in single-use, disposable containers to minimize the chance of cross contamination. Today, pets are as much a part of the family as anyone, and with this growing trend has come a great opportunity. Larry Chasin is president of Pak Programs. Email: larryc@pakprograms.com. MARCH 23, 2020 INSURANCE JOURNAL | 43

Idea Exchange: Minding Your Business Account Manager and CSR Roles and Performance

ccount managers are the backbone of an agency. Account managers (AM) are also called customer service representatives (CSR) and are By Catherine Oak critical to the agency’s reputation. Many are the key to retention, and clients look to them to get their needs met. Producers are very dependent on them to not only and Bill Schoeffler service the accounts but often to help close the sale. The question for most agency owners is how to grade account manager performance and determine productivity and appropriate roles? It is often quite hard to find or develop good account managers. Agencies tend to “steal” the good ones from each other. Current low unemployment rates exacerbate the lack of AMs availabile on the open market. Scarcity of quality employees has a profound impact on agency performance and profitability, since less qualified employees often are filling the void. Account managers make up roughly half of all employees in an agency. Keeping in mind that payroll is the largest expense in any agency, the productivity of the account managers is directly related to the profitability of the agency. The hiring and retention of good AMs, including establishing fair and motivating compensation, is a key to increasing profits and agency value.

Job Fundamentals

The role of the account manager boils down to the collection, processing and distribution of information. The collection 44 | INSURANCE JOURNAL | MARCH 23, 2020

of information aspect tends to be the most significant skill. The AM needs to know what information to gather (technical skills) and how to ask for it (interpersonal skills). In some agencies, the AM is also becoming a good salesperson, selling additional coverages the client needs, like business interruption, EPLI and umbrella policies. The account manager also needs to be a “people” person. Good social skills and the ability to act as a go-between for the different parties — clients, producers, underwriters and agency owners — are a must. Good time management skills are important for AMs. The typical account manager spends about half of her/his time talking to clients or insurance company personnel, gathering and distributing information and problem solving. The balance of her/his time is spent on paperwork and computer input. The latter items are tasks that an AM/CSR could often delegate to an assistant or clerical person, so they have time to cross sell, explain coverages, handle claims and keep the relationship strong. This improves profitability and productivity. The delegation is called “staff stratification” and is the delegation of clerical tasks to the least costly QUALIFIED employee!

Job Performance

The first step to evaluating job performance is to write a job description spelling out the account manager’s tasks and responsibilities and making sure both parties agree to it. It is best to have the AM draft the list of tasks they do and then show those to the manager to create their job description. It is important to include predetermined performance standards. An account manager needs to know what size book

management expects her/him to handle. Management, on the other hand, needs to offer proper training and support to allow the account manager to get to the productivity level expected. There are several ways to objectively measure job performance. Many automation systems allow the tracking of transactions by account manager. These automated reports reflect the information recorded on the agency database as the AMs move through their daily work. This allows management to review the volume of work performed by each account manager. Transactions required will vary based on the composition of the book of business handled. Some types of business are more labor intensive than other types, for example contractors require a fair amount of hands-on work for certificates and changes to the policy. Another method is to compare the number of accounts and commission dollars handled by each account manager. It is important, however, to compare apples to apples. Breakdown the AM’s books of business by line of business (personal, commercial, life and health). Then determine the average size account in each line (commission dollars divided by number of accounts). The last step is to compare performance to a benchmark. This method provides a clear indication about the profitability of an account manager and the book of business that they handle. It must be noted that even a good AM could be stuck with a troublesome book of business and appear to be unproductive. Management needs to use the performance numbers in their proper context. Even if each account manager in an agency is measured relative to each other, a problem may occur if each AM handles a vastly unique book of business. For example, one AM may have a larger number of contractors that could require more labor than another account manager’s book, which is mostly retail businesses or even BOPs. Sometimes, the producer that works on the account with the account manager does not do their job and delegates a lot of their work to the AM. In other cases, producers may be controlling and not INSURANCEJOURNAL.COM

delegate enough of the service work to the AM. When looking at the agency’s results by department and by AM, these questions need to be asked if the AM workload results seem too high or too low compared to the standards. Performance should also be based on subjective measurements. Once a year, key clients handled by each account manager should be surveyed to see what they think of the service they are receiving. Underwriters of the key markets should also be asked for input on the performance of each AM. Performance rating should be a combination of subjective and objective criteria. An account manager’s strength (and value to the agency) may be partially hidden if performance is graded on only one type of input. A good performance review form for the AM to complete on their performance should also be used and completed on their anniversary date. The manager and the producers who work with the AM should look over the review and provide their input.

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AM Role Path to AE

The AM position can also be a path to a newly created position in many agencies called the account executive (AE). This role is a hybrid between an AM and a producer since agencies have a very hard time finding good producers. One solution is to move good, long term account managers into this AE role. This is essentially a producer role to maintain and handle existing accounts without a focus on new sales. Often, some of the smaller accounts of the owner and key producers are placed with the AE. If producers retire and their accounts cannot be made “house” accounts, an AE can be assigned instead. The AE is usually paid 15% to 25% of the book of commissions handled and should have an AM or CSR to delegate the clerical service work to.

Job Compensation

The next big question is what is fair compensation? The first criterion is to make sure it is affordable compensation. Hiring the world’s best account manager is not a good idea if the cost will sink the

The hiring and retention of good account managers, including establishing fair and motivating compensation, is a key to increasing profits and agency value. company. Compensation needs to be in line with job duties and responsibilities. A good way to look at compensation is to do a quick reality check. Simply take the commission dollars to be handled by an account manager and subtract compensation costs (include taxes and benefits) to determine what the “spread” is for that specific position. The next step is to evaluate if the remaining dollars are enough to cover producer compensation, overhead and provide a fair return to the owners. This analysis will have to rely on a “gut feel” rating. Unfortunately, there are many variables from agency to agency. However, some benchmarks show a net spread

continued on page 46

MARCH 23, 2020 INSURANCE JOURNAL | 45

Idea Exchange: Minding Your Business continued from page 45 (after all expenses are factored) of around $50,000 in average agencies and $85,000 in high-performing agencies to be a good marker. The bottom line for this process is to see if there is a fair return to owners after expenses are taken out. A low return or loss will require an adjustment to compensation (AMs or producers), a decrease in overhead costs, or an increase in the book size. If adjustments are not feasible, then management must think about rehabilitating or getting rid of that specific book of business, especially small commercial accounts. The analysis of affordable compensation is important, however, what an owner may feel is appropriate may not be the same as what they will need to pay. Today’s strong economy has a tremendous impact on what the prevailing wages are. A recent Insurance Journal survey shows the average salary of PL AMs/ CSRs ranges from a low in the Midwest of $43,273 to a high in the West of $76,667. Salaries for CL AMs/CSRs seemed to range from $50,061 in the Southeast to $85,561 in the West. Quite a bit of additional good compensation information for various other agency positions and for producers was

in this survey. (See Insurance Journal’s 2020 Agency Salary Survey in the Feb. 24 issue for more information). What must be noted is that salaries have gone up in recent years but there has not been a corresponding increase in the commission dollars handled. Major reasons for the stagnant size of the account manager’s book of business are often soft market conditions and lower commissions paid by the carriers. It also seems that automation has increased the account manager workload, because everyone expects more and more information and service. Also, carriers expect the agencies to do more of the insurance companies’ work without getting paid for it.

Incentive Compensation

Many agencies today do not want to just keep giving annual raises, especially with long-term employees that are at the top of the compensation level in their area. The way to do this and provide motivation is to give bonuses or other incentives when extraordinary work has been done, or when additional sales through cross selling are achieved, as well as great retention. All of these areas can give the AM/CSR additional compensation or incentives, like

time off, a company trip, childcare and the like. Some agencies regularly give their service employees rewards when they have increased sales or send cross sell leads to other departments.

Outside Services for AM Duties

There are various sources that agencies can use to provide support to the AMs, such as Patra, ResourcePro, Insuserve-1, Virtual Insurance Pro, WAHVE and eDesk (Nationwide). These are for-hire services for agencies that handle clerical items, like policy checking, certificates, endorsements and the like for a very affordable rate. Some offer full backroom support as well. Services and prices vary greatly, so research for the best fit and cost effectiveness. These services can provide relief to agencies that can’t find the great service employees they need, especially for commercial lines.

A Final Thought

Hiring and keeping a good account manager requires management practice, which is both art and science. Review the numbers to make sure all of the statistics are in line, but make sure the subjective side is also included in the process. It often proves true that it is better to hire a well-qualified AM and pay them more than to just fill the position with a low paid, not-so qualified person. Highly productive account managers/CSRs handle more work with less supervision and thereby can save expenses in the long run. For the typical agency, the quality of the account manager determines the quality of the service and the quality of the agency overall. The path to reaching top performing agency status is not easy, but the right account managers are necessary for the journey. 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.

46 | INSURANCE JOURNAL | MARCH 23, 2020

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Idea Exchange: Hospitality

Checking In with

No Way out:

How Hotels Can Prevent Human Trafficking

nytime there’s a huge event like the Super Bowl where a large number of people convene By John Welty from different locations, often to party, illegal activities such as human and sex trafficking tend to heat up, and thus, hit the national radar. Before this year’s game, the Miami Herald highlighted how traffickers already had begun laying traps and setups to ensnare guests and visitors into trafficking rings. While it is important to increase vigilance during events such as these, it’s also crucial to recognize this is a year-round concern. Law enforcement in Miami proactively warned hotels and ride share drivers to prepare for these dangers in advance of the Super Bowl, but a heightened level of awareness to this crime is really needed at all times, particularly for the hospitality industry.

A Growing Problem

Not surprisingly, hotels tend to play a INSURANCEJOURNAL.COM

significant role in trafficking cases, as they offer potential traffickers a private location to shelter victims before transporting them. Data from the National Human Trafficking Resource Center (NHTRC) indicates that between December 2007 and Dec. 31, 2017, there were 3,596 instances of human trafficking involving a hotel or motel. Further, hotels and motels were the third most common venue for sex trafficking in 2019 and have been routinely in the top three since 2013. Recent news stories help to highlight the severity of the problem of human trafficking for the hotel industry. According to USA Today, in late 2019, several lawyers approached a federal panel to consolidate 21 pending lawsuits alleging hotel chains across the country had ignored warning signs of human trafficking at their establishments. One of these cases, in Columbus, Ohio, involved a woman who sued three separate hotel chains claiming that employees overlooked clear evidence of trafficking. This evidence she cited included signs hotel operators

should train staff to be on the lookout for, including trash cans filled with condoms, cash payments for rooms and the guests refusing housekeeping services. In a second example, 12 hotel chains in Detroit were named in a lawsuit for ignoring signs of human trafficking. One of the victims was a 17-year-old, who was kidnapped at school and taken to a hotel, where she says she was held and abused. The lawsuit states that there were clear warning signs, such as her inability to make eye-contact with staff, her lack of identification or luggage, violent altercations that went on in the hallways involving her, and more. Her representation stated, “Despite all of those opportunities to see what was happening, they just kept accepting the money for the rooms,” indicating negligence on the part of the hotel and its staff.

Making a Difference

As is clear in these examples, hotels can play a significant role in human trafficking

continued on page 48 MARCH 23, 2020 INSURANCE JOURNAL | 47

Idea Exchange: Hospitality continued from page 47 cases and stand to suffer heavy damages if found guilty. Insurance cannot protect a hotel if there is clear evidence that hotel staff was aware of the incidents and failed to act. Insurers of the hospitality industry must make it a priority to educate their clients on the importance of staying attentive and identifying warning signs. First, agents and brokers can consider providing information to their clients regarding the potential warning signs. The Department of Homeland Security shared some health signs to look for, including: • Malnourishment, poor hygiene or injuries, • The guest in question has no money or identification or is dressing inappropriately for their age, • Owner of the room only pays in cash and frequently brings in new guests. • Guests refuse to allow hotel staff to

Advertisers Index Applied Underwriters www.auw.com 2, 3,52 Berkley Luxury Group www.berkleyluxurygroup.com E2, M1 EZLynx 18, 19 www.ezlynx.com Golden Bear Insurance www.goldenbear.com 11 Iroquois Group www.iroquoisgroup.com 24, 25 JM Wilson www.jmwilson.com S2, M2 Leavitt Group Enterprises, Inc www.leavitt.com 16, 17 Liberty Mutual www.libertymutualgroup.com 9 M.J. Hall & Company www.mjhallandcompany.com W1 Monarch E&S Insurance Services www.monarchexcess.com W4 Nationwide Mutual www.nationwide.com 37 PersonalUmbrella.Com www.personalumbrella.com 4, 5 Professional Liability Insurance Services www.plisinc.com 28, 29 SIAA www.siaa.net 22, 23 SIS Wholesale www.sisinsure.com 31 Smart Choice Agents Program www.smartchoiceagents.com 20, 21 State Compensation Insurance Fund www.statefundca.com W3 Surplus Lines Association of California www.slacal.com 13 Texas Mutual www.texasmutual.com SC1 The Hartford Insurance Group www.thehartford.com 7 The Nitsche Group www.thenitschegroup.com 26, 27

48 | INSURANCE JOURNAL | MARCH 23, 2020

enter the room but request housekeeping services. To identify these issues, hoteliers need to incorporate strict training and education regiments. While mandatory training programs already exist by law, agents and brokers can encourage their policyholders in this space to do more to minimize the chance of a trafficking incident, including: 1. Take a stand. Taking part in campaigns such as the American Hotel & Lodging Association’s No Room for Trafficking can help spread awareness that these crimes will not be tolerated. To that end, establishing a clear, anti-trafficking policy can further this message.

2. Create a detailed Abusive Act and Human Trafficking policy. A written policy

detailing training, detection, response, reporting and documentation of any abusive acts or trafficking will establish clear protocol and rules to follow.

3. Implement regular training sessions.

These training sessions will not only keep staff aware of the latest prevention practices but will emphasize the importance of staying prepared so they can intervene when necessary. 4. Drop the Do Not Disturb. In response to safety threats, Disney hotels have removed Do Not Disturb signs, replacing them with room occupied signs. This provides Disney staff with the right to enter rooms for maintenance, repairs, or to check on guest and property safety, according to the New York Times. This trend has caught on at hotels across the country recently.

These are just a few of the many steps agents and brokers can recommend to policyholders in the space. Human trafficking is still a far too widespread issue in the hospitality industry. Hotels with untrained, unprepared staff offer criminals a safe haven to execute their plans. To help put a stop to this, agents and brokers can make their hospitality clients aware of the steps necessary to identify and act on any and all warning signs and encourage training and education for employees. Welty is the president for SUITELIFE Underwriting Managers, a series of RSG Underwriting Managers LLC, an all-lines insurance and risk program for premier hotels, resorts, luxury boutiques, gated communities and hotel management companies.

March 23, 2020 Amrock Title Insurance Company 5910 N. Central Expressway, Ste. 1445 Dallas, TX 75206 The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Title 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 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

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March 23, 2020

Hartford Insurance Company of Illinois 4245 Meridian Parkway Aurora, IL 60504-7901

Benchmark Insurance Company 150 Lake Street West Wayzata, MN 55391

Hartford Insurance Company of the Southeast One Hartford Plaza Hartford, CT 06155

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 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 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

March 23, 2020

Scottsdale Indemnity Company One West Nationwide Blvd. Columbus, OH 43215-2220

National Fire and Indemnity Exchange 6030 Bancroft Avenue St. Louis, MO 63109

Cerity Insurance Company 244 Fifth Avenue, Suite 2148 New York, NY 10001

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.

March 23, 2020

National Casualty Company One West Nationwide Blvd. Columbus, OH 43215-2220

Freedom Specialty Insurance Company One West Nationwide Blvd. Columbus, OH 43215-2220

MDAdvantage Insurance Company of New Jersey 100 Franklin Corner Road Lawrenceville, NJ 08648

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

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MARCH 23, 2020 INSURANCE JOURNAL | 49

Closing Quote How to Manage Risk in a Hardening Market

By John Mina

financial market that’s in correction territory, coronavirus pandemic fears and an insurance industry hard market for the first time in years. Are these issues related or becoming more so? What’s an insured to think right now? The rapidly hardening insurance market is the result of several factors that can be summed up by saying that we’re paying today for our prior sins. The industry has had persistent high loss ratios since 2013, primarily caused by an increase in frequency of severe property and liability losses and spiraling litigation costs with ever higher jury awards. Even if you haven’t had a particularly poor loss record, insured losses in the aggregate have steadily been rising without corresponding rate increases until just recently. While insurers are now

taking in more premiums, they aren’t offsetting the increasing losses they’ve been paying out. Even worse, the risks they insured in prior years appear to have been underpriced and are developing at a faster rate than expected.

Changing Market Cycles

In prior hard insurance markets, we’ve seen enthusiasm to increase insurance prices tamped down, typically after a six- to 12-month period. The ability to quickly move capital into the market to take advantage of the higher returns usually offsets the price increases in a typical supply-and-demand scenario. That hasn’t happened yet and unfortunately, based on how the losses for prior years are developing, it’s not likely to happen anytime soon. In fact, many insurers, including Berkshire Hathaway and Liberty Mutual, recently reported unexpected fourth quarter 2019

underwriting losses. New capital is going to wait on the sidelines and see some market stabilization before moving back in to start the price reduction cycle again. A global economy that’s currently reacting to coronavirus and supply chain disruption isn’t going to help. As liquidity decreases, investors with capital to deploy are going to look for relatively safe havens to boost returns, not to a disrupted marketplace. Alas, the current insurance marketplace is likely to be hard for a while yet. This leaves us in the midst of rising insurance rates at a time when business risks are seemingly more prevalent than ever. Cyber breaches, climate change, pandemic, trade and political risks are at the top of mind for most business leaders. Now is prime time for companies

to take a thoughtful step back and reassess how they view and manage risk within their organization. Insureds with a strong risk management perspective and a track record of low claim activity don’t necessarily have to be swept up in the insurance market drama.

Holistic View

Taking a holistic view of risk can help identify ways to treat risk beyond just buying insurance. Analytical tools like risk maps, 360 reviews, gap analyses and a focus on total cost of risk can help companies take a broader approach to managing and financing their overall business risks. Higher deductibles and self-insurance — either through a captive or other self-funding mechanism — are also ways to mitigate the continuing rate increases in the insurance market. Mina is CEO of the national insurance brokerage Risk Strategies.

Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com. Follow us at bigdoghq.com.