Insurance Journal West 2020-08-24 by Insurance Journal

AUGUST 24, 2020 I VOL. 98, NO. 16

SALES& MARKETING IDEAS FOR AGENCIES

Intellectual Property:

Tangible vs Intangible

The Art of Collecting During COVID

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August 24, 2020 • Vol. 98 No. 16

Contents

Spotlight: Intellectual Property: The Shift from Tangible to Intangible

Commercial Insurance Prices Up 19% in Q2: Marsh Index

Insured Losses from Hurricane Isaias $3-$5 Billion: RMS

Special Report: 101 Sales, Marketing & Agency Management Ideas

Investors Back Startups for Commercial Auto, Climate Risk, High Risk Homes

Spotlight: The Art of Collecting During COVID-19

Pandemic Boosted Personal Auto Insurers’ Profits in the Short-Term

Cruise Line’s Appeal Backfires: Appellate Court Overturns Limit on Medical Damages

Departments 8 Opening Note 6 | INSURANCE JOURNAL | AUGUST 24, 2020

Idea Exchange

Special Report

News & Markets

16 Declarations

Spotlight: Young Brokerage Founder Targets a ‘Different’ High Net Worth Market

16 Figures

20 People

Ask the Insurance Recruiter: COVID-19 Gives Agencies Time to Evaluate Hiring Methods

The Competitive Advantage: Why the Shotgun Approach Is Nearing Obsoletion

How to Protect Your Base-Jumping, Crocodile-Wrestling, Shark-Diving, Volcano-Luging, Snake-Wrangling CEO

Closing Quote: Why Word of Mouth is Still a Key to Building Your Business

22 Business Moves

42 My New Markets

INSURANCEJOURNAL.COM

Life Insurance & Long-Term Care

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Brighthouse SmartCare, a hybrid life insurance and long-term care product, gives your clients power over the unexpected. Its long-term care benefit and death benefit can grow over time, helping them to keep pace with rising costs. Better yet, if your clients never use the long-term care coverage, their money is put to good use through a death benefit for their loved ones. Brighthouse SmartCare offers: • Preparation for long-term care needs • Protection from unexpected events, such as premature death • The ability to grow benefits over time to meet rising future costs Brighthouse SmartCare is the smart way to gain power over the unexpected. Learn more at brighthousefinancial.com. Brighthouse SmartCare® is an Indexed Universal Life Insurance Policy with Long-Term Care Riders issued by, with product guarantees that are solely the responsibility of, Brighthouse Life Insurance Company, Charlotte, NC 28277 (“Brighthouse Financial”). All guarantees, including any optional benefits, are subject to the claims-paying ability and financial strength of the issuing insurance company. Each issuing insurance company is solely responsible for its own financial condition and contractual obligations. Brighthouse SmartCare has exclusions, limitations, reduction of benefits, and terms under which the policy may be continued in force or discontinued. For costs and complete details of the coverage, please contact your financial professional. May not be available in all states. Brighthouse Financial® and its design are registered trademarks of Brighthouse Financial, Inc. and/or its affiliates. 1903 BDRM631002 ICC18-AP1 5-18-AP1

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Opening Note Write the Editor: awells@insurancejournal.com

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

ADMINISTRATION / CIRCULATION

Not on the Same Page

usiness owners and consumers are rethinking their finances and insurance needs due to the current economic uncertainty. However, new research suggests insurance customers and their agents are not always on the same page. There could be gaps between what agents and their customers think and want. If that’s the case, insurance agents face some challenges when helping customers, according to a report from Nationwide Insurance. At the same time as they face these new obstacles, agents have a “compelling opportunity to serve as a knowledgeable resource for current and prospective customers to strengthen and grow their portfolio or business,” the report says. Nationwide identifies four main themes in its study: • • • •

A perception gap: There are gaps between agents and customers when it comes to perception of service levels. Customers want more than just property and casualty support from agents. Understanding policy coverage and price are shared challenges across all audiences. The economy is a concern, and customers are looking to agents for guidance.

Perception Gap. The study found a perception gap in the value agents believe they are bringing to their customers. Agents are confident they are meeting the needs of their customers, yet some business owners and consumers have a different perspective. The study showed that 95% of agents believe they are always there when their clients need them but just 79% of customers felt the same. Some 94% of agents reported they are regularly checking in with their customers to make sure their policy fits their needs. But only 69% of customers reported sufficient check-ins from their agent. Wants. The research identified areas where agents can go above and beyond traditional insurance guidance. While most customers seek counsel on conventional insurance, some business owners are looking for help on succession planning, disaster recovery and employee benefits. General P/C customers are asking agents about retirement and banking as well. Coverage: The research identified two consistent challenges across those surveyed — understanding policy coverage and finding the best price. The study found 46% of small business owners, 71% of mid-market business owners and 47% of consumers said it is a challenge to understand what is and what is not covered in their policy. Similarly, 55% of agents say they struggle with educating clients on the coverage they need and 46% of agents say providing the level of service customers demand is a challenge. Economy. Over half of agents think their clients feel uncomfortable talking about economic uncertainty. However, more than half of business owners and consumers feel like their agent was prepared to have these discussions.

The Nationwide study found a perception gap in the value agents believe they are bringing to their customers.

Nationwide commissioned Edelman Intelligence to conduct a 20-minute quantitative online survey among a sample of 2,600 U.S. independent insurance agents, small business owners and mid-market business owners. Andrea Wells

Editor-in-Chief

8 | INSURANCE JOURNAL | AUGUST 24, 2020

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: Madeleine Brown, Doug Coombs, Laura Doyle, Sean McNiff, Jim Sams Columnists: Chris Burand, Mary Newgard

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 Web Team Lead Nathan Huebner | nhuebner@insurancejournal.com Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Terrance Woest | twoest@wellsmedia.com Web Developer Ryan Kleshinski | rkleshinski@wellsmedia.com Web Developer James Wagoner | jwagoner@wellsmedia.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com

ACADEMY OF INSURANCE

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

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News & Markets Commercial Insurance Prices Up 19% in Q2: Marsh Index

lobal average commercial insurance prices increased 19% in the second quarter of 2020, the eleventh straight quarter they have risen. Average price increases were driven principally by increases in property insurance rates and financial and professional lines — as was the situation with the first quarter, according to the Global Insurance Market Index released by global insurance broker Marsh. Marsh said the increase was the largest since 2012 and follows increases of 14% in the first quarter and 11% in the fourth quarter of 2019. Prices were up in all geographic regions. The U.S. (18%), UK (31%), Continental Europe (15%), and Pacific (31%) regions all had double-digit pricing increases, largely driven by increases in property and directors and officers (D&O) coverages. Pricing for smaller organizations generally went up less than for midsize to large risks, according to Marsh. Global property insurance was up 19% and global financial and professional lines 12 | INSURANCE JOURNAL | AUGUST 24, 2020

were up 37%, while global casualty pricing was up 7% on average. Property pricing in the U.S. increased 22% in the quarter, with many accounts getting even bigger increases. U.S. casualty pricing was up 8% in the quarter. Workers’ compensation pricing fell 2%. “Overall, underwriters continue to push for higher levels of pricing increases due to the combined effects of social inflation pressures, persistently low yields, and a number of large underwriting losses, including from COVID 19,” the report says. “While capital remains adequate in most lines, insurers’ risk appetite is reduced as they are increasingly cautious in an uncertain environment.” Dean Klisura, president of Global Placement and Advisory at Marsh, said that while pricing movements in the quarter were affected by COVID-19, other large losses contributed to overall pricing pressures. He forecasts that this will continue. “As insurers continue to work through claims in property and directors and offi-

cers, and with the full cost of COVID-19 still developing, upward pressure on pricing is anticipated for the balance of 2020,” Klisura said. Other findings from the Marsh survey say certain D&O markets saw large increases. For example, U.S. public company D&O prices were up 59% on average, with more than 90% of clients experiencing an increase. In the UK, D&O pricing increases average over 100%. A similar situation exists in Australia, where a lack of competition has resulted in capacity shortage. Flow into both the London and Bermuda markets was noticeably higher than in prior quarters as clients sought more options. Deal structure parameters — for example, limits and deductibles — showed little change from the prior quarter. The excess liability market was up 21%, influenced by concerns of increasing claim severity. Auto pricing increased 10%, with over 75% of clients experiencing an increase. INSURANCEJOURNAL.COM

News & Markets Insured Losses from Hurricane Isaias $3-$5 Billion: RMS

stimated total insured losses from Hurricane Isaias will be between $3.0 and $4.5 billion in the U.S. This includes estimated losses to the National Flood Insurance Program (NFIP) of between $400 and $700 million, according to RMS, the catastrophe risk modeling firm. In addition, RMS estimates Hurricane Isaias insured losses for the Caribbean of less than $500 million. “Although Isaias weakened to a tropical storm after landfall, it maintained its intensity as it moved up the U.S. east coast and underwent extratropical transition due to its interaction with a strong jet stream and favorable atmospheric conditions. As a result, many areas of high exposure, especially in the Mid-Atlantic and Northeast, were subject to stronger winds and wind gusts than would otherwise be expected, especially in coastal areas of these regions. "It’s another example of how impactful low intensity storms can be," said Jeff Waters, senior product manager with RMS North Atlantic Hurricane Models. For the U.S., this estimate includes wind, storm surge and inland flood losses across parts of the Southeast, Mid-Atlantic and Northeast regions. The U.S. estimate reflects property damage and business interruption to residential, commercial, industrial and automobile lines of business. RMS said it expects the majority of insured losses to impact residential lines. “The large number of affected exposures, especially in the Mid-Atlantic and Northeast U.S., are likely to produce large claims volumes. Pressure to settle these claims quickly may lead to claims inflation. We also considered the impacts of the COVID-19 pandemic. We expect fewer loss inspections following this event, potentially causing prolonged repairs and recovery times, both of which tend to inflate claims costs,” said Pete Dailey, vice president of Product Management at RMS. The estimate also includes estimated losses to the National Flood Insurance Program (NFIP), which RMS expects to be between US$400m and US$700m. RMS INSURANCEJOURNAL.COM

derived the NFIP losses using an RMS view of NFIP exposure based on the 2019 NFIP policy-in-force data published by FEMA in 2019. RMS expects the majority of total U.S. insured losses to be driven by wind. Storm surge is expected to contribute less than 10% of the total losses. For the Caribbean, this estimate includes wind-only losses, which RMS expects to be less than $500 million. The Caribbean loss estimate includes property damage and business interruption to residential, commercial and industrial lines of business. On August 10, risk modelers at Karen Clark & Co. (KCC) released a similar estimate of $4 billion of insured losses in the U.S. and a lower number of $200 million for the Caribbean. However, KCC did not include costs from the U.S. government’s flood insurance program that are in the RMS number. The KCC estimates cover privately insured wind and storm surge damage to residential, commercial, industrial properties and automobiles. According to insurance broker Aon’s catastrophe risk analysis division, Impact Forecasting, Isaias initially formed as a

tropical storm on July 29, made Bahamian landfall on July 31 and grew into an 85-mile-per-hour storm as it made landfall in Ocean Isle Beach, N.C., on Aug. 3. The storm caused damage in more than 12 East Coast states. Damage included power outages and downed trees that caused structural damage and crushed automobiles. More than three million customers along the Atlantic coast lost power. There was also wind damage to roof coverings and siding and window openings of commercial and residential buildings during the hurricane. Some older buildings sustained severe structural damage. In the Caribbean, high winds caused damage in Puerto Rico, the Dominican Republic and the Bahamas, including downed trees and power lines. More than 350,000 people in Puerto Rico lost power, and the storm damaged a number of communication towers, KCC said. The damage done in the northeastern U.S., including Pennsylvania, New Jersey and New York, looks to be the main driver of insurance and reinsurance industry losses, according to Aon.

AUGUST 24, 2020 INSURANCE JOURNAL | 13

Figures $22.5 Million That’s the size of the judgement Arizona’s attorney general has issued against a New Jersey-based vaping company along with a court order permanently barring the company from selling its products in the state.

$7,074

Declarations The Big One

“This announcement means that California’s world-class earthquake early warning system will be a standard function on every Android phone — giving millions precious seconds to drop, cover and hold on when the big one hits.” — Gov. Gavin Newsom was encouraged that the state’s earthquake early warnings will be a standard feature on all Android phones, bypassing the need for users to download the state’s MyShake app in order to receive alerts.

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The average cost of indemnity claims paid by Florida self-insured employers and insurers for workers with COVID-19 as of June 30, according to a report from the Florida Division of Workers’ Compensation. Governments paid 56 percent of that, insurers 29 percent and private self-insured employers the rest.

Adapting to a New Normal

“As New York begins re-opening, new cutting edge and innovative solutions will be needed to adapt the New York marketplace to a new normal due to COVID-19.” — New York State Department of Financial Services (DFS) Superintendent Linda Lacewell said in a DFS press release announcing FastForward, a new program launched by DFS to support innovators seeking to deliver new solutions in financial services, fintech, insurtech and healthtech for New Yorkers in the COVID-19 era.

The First Time

“We’ve never forecast up to 25 named storms, so this is the first time.” — Gerry Bell, U.S. National Oceanic and Atmospheric Administration’s (NOAA’s) lead hurricane season forecaster, said in a conference call with reporters that the agency has increased this year’s prediction of the number of named tropical storms by 16. The 2020 Atlantic hurricane season, which began on June 1, by early August had already produced nine named tropical storms, two of which reached hurricane strength.

INSURANCEJOURNAL.COM

9 The number of years in prison to which former Ohio insurance agent Gregory Oliver, of Milford, has been sentenced for stealing more than $1.1 million from clients, according to the Ohio Department of Insurance. He also was ordered to pay $990,027.83 in restitution to his victims. Oliver in March had pleaded guilty to six felony theft charges.

$148,264 The amount in penalties the U.S. Occupational Safety and Health Administration (OSHA) has proposed for AA&B Builders Inc. and Ebenezer General Construction Excavating after citing the company for exposing employees to safety hazards on a worksite in Ewing, N.J.

Texas’ COVID Fight

“Renewing this Disaster Declaration will provide communities with the resources they need to respond to COVID-19. … I urge Texans to remain vigilant in our fight against this virus. Everyone must do their part to slow the spread of COVID-19 by wearing a mask, practicing social distancing, and washing your hands frequently and thoroughly.” — Texas Gov. Greg Abbott, in a prepared statement, said the renewal of the statewide disaster declaration related to the coronavirus would allow a better response to the coronavirus pandemic. State health officials on Aug. 7 reported 481,483 people with the virus that has left at least 8,343 dead. The true number of cases in Texas is likely higher because many people have not been tested, and studies suggest people can be infected and not feel sick.

INSURANCEJOURNAL.COM

Malfeasance Allegations

“Plaintiffs in this case raise some of the most disturbing allegations of malfeasance by government actors in Michigan’s history.” — Michigan Supreme Court Justice Richard Bernstein in an opinion ruling that Flint residents whose health and homes were harmed by lead-contaminated water could proceed with a lawsuit against public officials related to the crisis. The lawsuit names then-Gov. Rick Snyder, two former Flint government managers appointed by Snyder and public agencies that repeatedly assured the public that the water was safe. The court’s opinion was a key procedural step in long-running litigation that now will return to the Court of Claims.

Unqualified Immunity

“The Constitution says everyone is entitled to equal protection of the law — even at the hands of law enforcement. Over the decades, however, judges have invented a legal doctrine to protect law enforcement officers from having to face any consequences for wrongdoing. The doctrine is called ‘qualified immunity.’ In real life, it operates like absolute immunity.’’ — U.S. District Court Judge Carlton Reeves on his dismissal of a lawsuit against a white Mississippi police officer who he said was racially motivated to pull him over at a traffic stop and search his car.

AUGUST 24, 2020 INSURANCE JOURNAL | 17

News & Markets Investors Back Startups for Commercial Auto, Climate Risk, High Risk Homes By Mark Hollmer

n insurtech managing general agency focused on commercial auto insurance has raised $16 million in new Series A financing, a climate-risk related platform has $4.2 million in new seed financing, and a home insurance reciprocal and MGA focused on catastrophe-prone states is preparing to expand after raising another $35 million. Here are their stories:

HDVI

High Definition Vehicle Insurance (HDVI), an insurtech MGA co-founded by an Esurance pioneer that is focused on commercial auto insurance, raised $16 million in new financing. Munich Re Ventures and 8VC led the Series A round, in which Qualcomm Ventures and Autotech Ventures also participated. HDVI, a Chicago-based startup launched in 2018, said it will use the funding to scale its growth, expand its products and hire more people. This includes expanding the team, launching into new states, and launching additional technology features for agents, fleets and drivers. HDVI CEO and co-founder Chuck Wallace was a co-founder of Esurance (now part of Allstate). Another HDVI co-founder, Reid Spits, is a former investor (at 8VC) who was focused on insurtech and logistics. HDVI is targeting small and mid-size trucking fleets with its coverage and telematics technology.

Demex Group

The Demex Group, a climate risk management and parametric insurance platform, raised $4.2 million in seed funding from financial services investors Anthemis and IA Capital Group. The startup is based in the metro-Washington, D.C., area and pitches its technology as helping to customize and deliver climate resilience through financial risk products and services on a global scale. Plans call for using the money to build the Demex team and support go-to-market for municipalities and enterprise customers. Operating at the intersection of banking and insurance, The Demex Group pitches itself as bringing together decades of experience across technology, finance, risk management, capital markets, commodities, insurance and climate science to develop technology and customized financial solutions that mitigate unique weather risks and seize climate-linked business opportunities. The Demex platform for climate resiliency is designed to shield customers from the financial surprises of volatile weather. Matt Perlman, a partner at IA Capital Group, said the technology helps analyze clients'

18 | INSURANCE JOURNAL | AUGUST 24, 2020

exposures in a “very granular way and generate a precisely calibrated risk transfer solution that goes far beyond traditional weather derivatives and represents the frontier of parametric insurance.” A division of Munich Re – Munich Re Trading LLC (MRTL) – has a previous relationship with Demex, where they jointly developed customized weather index linked hedging instruments to help businesses manage non-catastrophic weather risks (MRTL provides weather risk transfer products and services for industries impacted by increased weather variability.) Demex said MRTL continues to provide risk capital and back office support.

Kin Insurance

Kin Insurance raised $35 million in new venture funding, attracting multiple investors including the investment arm of AAA Insurer CSAA Insurance Group. The Chicago-based home insurer focused on catastrophe prone regions said Commerce Ventures led the Series B round. Hudson Structured Capital Management Ltd. (doing its reinsurance business as HSCM Bermuda), Flourish Ventures, QED, Alpha Edison, Allegis NL Capital, Avanta Ventures (the venture arm of CSAA Insurance Group, a AAA Insurer), August Capital, the University

of Chicago via its Startup Investment Program and others also participated. To date, Kin has raised $86 million including the new round. With money in hand, Kin plans to expand its product from a Florida pilot to homeowners nationally, starting with states most affected by severe weather. Kin’s last financing – $47 million secured in August 2019 – was designed to propel the launch of the company’s Kin Interinsurance Network, a Florida-based insurance carrier designed as a reciprocal insurance exchange so policyholders can have a voice in operations. The arrangement is also intended to give Kin more flexibility so it can innovate in customer-friendly ways and keep costs down. Kin continues as a managing general agent and brokerage in Texas, Georgia and Alabama. Kin said its proprietary platform allows the company to develop and launch new products in as little as a week, price risks in real time and ingest more data than competitors. The company claims its technology also reduces general and administrative expenses – about 15 percent of premiums at legacy homeowner’s insurance companies. Kin sells its products directly to consumers rather than through outside agents. Now focused on growth, Kin said it is hiring tech and sale talent in Chicago and in St. Petersburg, Fla. Tech entrepreneurs Sean Harper (Kin’s CEO) and Lucas Ward launched Kin in 2016. INSURANCEJOURNAL.COM

News & Markets Pandemic Boosted Personal Auto Insurers’ Profits in the Short-Term

s bad as the coronavirus pandemic has been for many insurance lines, personal automobile profits have soared thanks to reduced driving, as quarantines and shelter-at-home restrictions took hold across the United States earlier in 2020, Fitch Ratings said. “Commercial [insurance/ reinsurance] underwriting profits in the personal auto line have sharply increased as reduced driving led to unprecedented reductions in claims frequency” in the first half of 2020, Fitch noted. “This has offset higher incurred losses related to the ongoing coronavirus pandemic in multiple segments, ranging from business interruption to professional liability and workers' compensation. As

INSURANCEJOURNAL.COM

such, virus-related effects on consumer behavior have had a positive impact on first-half 2020 auto insurer earnings.” That’s not going to last, however, as Fitch noted. The recent improved shortterm performance of auto insurers is unsustainable, and we expect profit challenges in the future as regulatory and competitive pressures hinder any rate increases when losses return to historical norms,” Fitch said. “Driving activity is now increasing. While the timing remains uncertain, frequency of claims will eventually move toward traditional levels, and loss severity moves perennially upward for auto insurance.” In the short term, a slowdown in pandemic-related driving has made a huge

impact. According to Fitch, personal auto results for the 2020 first half for eight publicly trade insurers that disclose product results in GAAP reporting showed a 6.5-point decline in the segment combined ratio to a highly profitable 85.5. Information from three major personal auto writers (Allstate, GEICO and Progressive) indicate that claims frequency was down approximately 30% at mid-year 2020 for physical damage and bodily injury claims, while loss severity is up by approximately 10% or more for these coverage classes. Net written premiums for this group declined by 2% for H1 2020 compared to the previous year. Underwriters have responded to this recent reduction in risk exposures

by offering premium returns, renewal price rebates, and policyholder dividends. Fitch estimates that these actions are worth $12 billion to date and will grow further throughout the year. Fitch notes that for accounting purposes, most of the premium adjustments will be recognized in future results. At the same time, the claims benefits from frequency reductions significantly outweigh the value of any premium reductions, Fitch said. There are more rate reductions to come in the near term, based on underwriters’ regulatory filings. That, in turn will produce more decline in auto insurance revenue. Fitch’s full report is “Auto Insurer Profits Driven by Record Drop in Claims Frequency.”

AUGUST 24, 2020 INSURANCE JOURNAL | 19

People National

QBE North America has promoted Steve Gransbury to

head of Specialty Insurance, a new group of existing QBE businesses, and promoted Tara Krauss to head of Accident & Health. The Specialty Insurance unit Gransbury now leads consists of QBE’s Accident & Health, Aviation, and Trade Credit & Surety practices. QBE Specialty Insurance is part of QBE North America’s Specialty & Commercial organization. Previously, Gransbury had been leading Accident & Health, the largest of the three businesses. Krauss has been promoted to replace Gransbury as the leader of QBE Accident & Health. Krauss had already been leading many of these growth and technical initiatives for several years in her most recent role as senior vice president of underwriting operations for Accident & Health. Gransbury joined QBE in 2009 when the company acquired SLG Benefits & Insurance, a program management company co-founded by Gransbury. With 25 years of experience in the insurance, reinsurance and captive industry, Gransbury is a member of the QBE North America Underwriting Committee, National Leadership Team and a past North America representative to the QBE Global Underwriting and Distribution Forum. He began his insurance career as an independent employee benefits consultant. In 1996, he joined LDG Insurance Underwriters, which was later acquired by HCC Insurance Holdings. Krauss has 24 years of industry experience. Since joining QBE in 2009, she has

held several leadership roles with increasing responsibilities. She was named vice president of underwriting operations for Accident & Health in 2013 and then promoted to senior vice president in 2017. Prior to joining QBE, Krauss held various underwriting positions with HCC Insurance (formerly LDG) and SLG Benefits & Insurance.

East

SUITELIFE Underwriting Managers, a managing general

underwriter for full-service hotels, premier hotels, boutique hotels, condo-hotels, resorts and hotel management companies, has hired Zach Gentile as an underwriter. SUITELIFE is a Series of RSG Underwriting Managers LLC (RSGUM). As underwriter, Gentile will be responsible for writing new and renewal business and building a profitable book for SUITELIFE. He will also be responsible for developing business relationships with key hospitality brokers on the East Coast. Gentile comes to SUITELIFE from Willis Towers Watson, where he served as a middle market client manager focusing on higher education, public entities, manufacturing and real estate. He started with Willis Towers Watson as an assistant client manager.

Equisoft,

a global provider of David Nicolai digital business solutions for the insurance and wealth industries, appointed David P. Nicolai as vice president of Insurance Solutions USA in its Philadelphia, Penn., office.

20 | INSURANCE JOURNAL | AUGUST 24, 2020

He brings more than 25 years of technical and business experience in the enterprise insurance software and services space to this role. In his new role at Equisoft, Nicolai will be leading U.S. sales for insurance products and services, working closely with insurance carriers and distributors to help them drive increased growth by enabling acceleration of their digital end-to-end solutions and platform modernizations. Previously, he served as a senior executive at FINEOS, a global core insurance technology vendor, where he oversaw all business development activities in North America and helped drive major corporate initiatives. He also has held various senior roles with insurers and technology vendors.

Southeast

The Liberty Company Insurance Brokers hired David Barkasy to

David Barkasy

establish a presence for the company in South Carolina. Barkasy, who has been in the insurance field for more than 20 years, joins the team as a producer and is based in Charleston, S.C. Barkasy previously worked in commercial insurance for firms including USI, C.T. Lowndes & Company, and Mark Edward Partners. Throughout the years, he’s created a niche in the education, transportation and manufacturing industries.

Rick Leonard, former director of Sales and executive vice president with SUNZ Insurance, has been appointed president of the company.

Leonard has been with SUNZ, a national provider of workers’ compensation insurance, for nearly 10 years and initially joined as Broker Relations executive. Leonard became director of Sales, where he was a part of the growth of the company.  Leonard’s background consists of retail broker experience, field sales, marketing, loss control and client relations. He has more than 18 years of experience in the insurance industry and has been managing a sales team within SUNZ.

DUAL Specialty Underwriting (DSU), the

Management Liability division of DUAL North America, has added Heather Black as a senior underwriter. Black will be located in Nashville, Tenn. Black brings nearly 18 years of experience in the insurance industry with the majority in management liability. Her career began at Chubb Specialty Insurance as a renewal underwriter and she has served in underwriting, management, and product and business development roles. Black most recently held the position of broker with RT Specialty’s Professional & Executive Liability division.

South Central

Overhaul, an Austin,

Texas-based supply chain visibility and risk management technology provider, added former senior vice president of Great American Insurance Group, Lloyd J. “Pat” Stoik, as chief risk officer. In his new role as chief risk officer, Stoik will provide leadership for Overhaul’s shortand long-term vertical business strategy aligning technology INSURANCEJOURNAL.COM

with insurance, as well as continuing to expand the company’s risk management Pat Stoik solutions. Stoik has 35 years of underwriting and broker experience. Prior to his role at Great American Insurance Group, Stoik spent 27 years with the Chubb Group of Insurance Companies in numerous senior leadership positions, including senior vice president of Global Marine with extensive experience managing a global portfolio of business.

Denver-based CAC Specialty added Robert Regueiro as senior vice president and marketing account executive in its Financial Lines Practice in Houston. Prior to joining CAC Specialty, Regueiro most recently led McGriff’s Executive Risk Advisors team in Houston. He specializes in public company directors and officers liability, cyber risks, employment practices liability, fiduciary liability and commercial crime lines of cover. Houston-based CrossCover Insurance Services, a manag-

ing general underwriter (MGU) of middle-market commercial properties, expanded its leadership team with the appointments of Brett Dupre, director of Specialty and Underwriting; Sam McBirney, director of General Property; and Mason Rudloff, director of Technology. Dupre, McBirney and Rudloff are all former AmRisc executives. Dupre served as CEO of Wholesale at AmRisc and served previously at FM

INSURANCEJOURNAL.COM

Global, where he was responsible for the corporate direction of high-hazard occupancies. McBirney, a former Partner at AmRisc, served as president of its largest division, General Property. Rudloff spent the past 15 years at AmRisc, where he was the architect of its underwriting systems while leading a 33-member IT team.

Midwest

Berkley Fire & Marine, headquartered in the Chicago area, promoted Debra Brickner to vice president of Claims and hired Mark Seich as vice president of Marketing, Sales & Distribution. Brickner has 15 years of industry experience working with marine claims and most recently served as senior director of claims. She joined Berkley Fire & Marine in 2016. As Debra Brickner vice president of claims, she will oversee the day-to-day operations of the claims unit and guide the Mark Seich development of claims services. Prior to joining Berkley Fire & Marine, Brickner managed inland marine claims for a U.S. insurance group for more than 10 years. Seich has 13 years of experience with national and regional carriers in the industry. Prior to joining Berkley Fire & Marine, he served most recently as regional vice president and has held various sales and marketing-oriented roles with U.S. insurance carriers. As vice president of Marketing, Sales & Distribution, Seich will lead

all marketing and sales driving initiatives through the field teams and online distribution channel. The Central Insurance Companies, based in Van Wert, Ohio, promoted Jocelyn Pfeifer to senior vice president

of Underwriting. Pfeifer will lead the company’s underwriting organization including Commercial Lines Underwriting, Personal Lines Underwriting, Loss Control and Underwriting Operations. She will be focused on executing Central’s strategy to provide its agency partners with a more robust suite of specialized products to market in Small Commercial, Middle Market Commercial, Programs, Affluent Personal and Middle Market Personal Lines. Pfeifer joined Central in 2003 as a personal lines underwriter in Central’s Southwest regional office. She held several underwriter and supervisor roles in both personal and commercial lines during her career with Central, including the role of commercial lines manager in the Southwest office. For the past two years, Pfeifer has led the Northeast regional office as regional vice president.

West

Aspire General Insurance

in Rancho Cucamonga, Calif., promoted Tyler Nicholson to vice president of marketing and Brad Hinkle to chief claims officer. Nicholson joined Aspire in 2016. He was previously with Vertafore and was with FSC Insurance Solutions before that. Hinkle joined Tyler Nicholson

Aspire in 2015. He was a vice president with Aspire before his promotion. He was previously with Alliance United Insurance Co.

The Liberty Brad Hinkle Company Insurance Brokers named Clint Phillips

to head its new Bakersfield, Calif., office and named Melissa Merrick as director of agency integration and onboarding. Phillips has 19 years of experience in the Bakersfield area, where he has specialized in the construction and oil and gas industries. He was most recently at Walter Mortensen Insurance. Merrick is located in the Clint Phillips Los Angeles, Calif., office. Merrick will be heading the agency partners and producer integration and Melissa Merrick onboarding team. She was previously with Newfront Insurance.

Lockton Pacific Series named Thomas Ricks as vice

president of data analytics. Ricks is based in Lockton’s San Francisco, Calif., office. Ricks was previously a vice president with Aon. He started his career with Blue Shield of California. Lockton Pacific Series has eight offices throughout the Western U.S., including Portland, Sonoma, San Francisco, Sacramento, Encino, Los Angeles, Irvine and San Diego.

AUGUST 24, 2020 INSURANCE JOURNAL | 21

Business Moves

East

World Insurance Associates, Millennium Medical Solutions Corp.

World Insurance Associates LLC acquired Millennium Medical Solutions Corp. of Armonk, N.Y., on June 1, 2020. Millennium Medical Solutions Corp. is an employee benefits consulting boutique agency that specializes in commercial healthcare. It also specializes in professional employer organizations (PEOs) and helps clients determine which would be best for their unique business situation. As part of the transaction, Alex Miller joins WIA as head of PEOs. WIA is headquartered in Tinton Falls, N.J., and is a full-service insurance brokerage providing asset and lifestyle protection with risk management, insurance and benefit consulting services for individuals and businesses. Since its founding in 2012, WIA has completed 63 acquisitions and serves its customers from 49 offices in 12 states and Washington, D.C.

Specialty Program Group, Beacon Hill Associates

Specialty Program Group LLC, an operator of specialty insurance brokerages and underwriting facilities, has acquired the assets of Beacon Hill Associates Inc., an environmental wholesale brokerage firm, including BHA’s PartnerOne (P1) environmental underwriting division. Since 1990, BHA/P1 has been providing environmental liability insurance to insurance agents and brokers nationwide. 22 | INSURANCE JOURNAL | AUGUST 24, 2020

Following the acquisition, current leadership will continue to run all aspects of the operation and will work closely with SPG leadership to launch their environmental platform. Headquartered in Summit, N.J., SPG focuses on expanding program underwriting and specialty businesses.

CBIZ, Prince-Wood Insurance

CBIZ Inc. has acquired substantially all of the assets of Prince-Wood Insurance L.L.C. of Woodbridge, Va. Established in 1967, PWI provides property and casualty insurance to small and mid-sized businesses in Northern and Central Virginia, Maryland and Washington, D.C. PWI has seven employees and approximately $1.2 million in annual revenue. CBIZ Inc. is a provider of financial, insurance and advisory services to businesses throughout the U.S. Financial services include accounting, tax, government health care consulting, transaction advisory, risk advisory and valuation services. Insurance services include employee benefits consulting, retirement plan consulting, property and casualty insurance, payroll and human capital consulting. CBIZ has more than 100 offices in 31 states.

Midwest

PCF, Avidity Insurance

PCF Insurance Services, headquartered in Woodland Hills, Calif., has acquired Avidity Insurance, an Overland Park,

Kansas-based independent insurance agency founded in 2013 by Will Wilson. Avidity offers home, auto, business, life and specialty insurance products and services. Founded in 1987, PCF is a full-service insurance brokerage firm that provides complete risk management solutions with a broad array of property and casualty, life and health, employee benefits and workers’ compensation insurance products. Led by CEO and Chairman Peter Foy, PCF is a portfolio company of HGGC, a middle market private equity firm based in Palo Alto, Calif. HGGC was co-founded by former San Francisco 49ers Hall of Fame quarterback, Steve Young, who serves as the firm’s president.

USI Insurance Services, Colburn Group Insurance

USI Insurance Services has acquired Troy, Mich.-based Colburn Group Insurance. All of the agency’s team members, including Harry Colburn, chairman, and Pamela Haron, president, will be joining USI. Colburn Group is an independent insurance agency specializing in commercial insurance, employee benefits and personal risk solutions for businesses and individuals. Valhalla, N.Y.-based USI is an insurance brokerage and consulting firm delivering property and casualty, employee benefits, personal risk, program and retirement solutions to large risk management clients, middle market companies, smaller firms and individuals.

Brown & Brown, HAUSER

Brown & Brown Inc. has entered into an agreement to acquire the assets of HAUSER in Ohio. The deal is expected to close in September, subject to certain closing conditions. HAUSER focuses on insurance solutions for private equity groups and their portfolio companies. The agency was founded 50 years ago by the Hauser family and is now under the leadership of Mark Hauser and James Stines. HAUSER will INSURANCEJOURNAL.COM

continue to operate from its headquarters in Cincinnati, Ohio, led by James Stines. Florida-based Brown & Brown Inc. is an insurance brokerage firm, providing risk management solutions to individuals and businesses.

Brown & Brown, Buiten & Associates

Brown & Brown of Michigan Inc., a subsidiary of Brown & Brown Inc., has acquired substantially all the assets of Buiten & Associates, located in Grand Rapids, Mich. Since 1935, Buiten & Associates has provided a wide variety of insurance products and services to businesses and individuals throughout Michigan. The Buiten & Associates team will continue operating from their existing office in Grand Rapids under the leadership of Paul Buiten.

Alera Group, Alper Services

Deerfield, Illinois-based Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, has acquired Alper Services LLC in Chicago. The acquisition was effective August 1. Founded in 1966 and led by CEO Leslie Morse, Alper Services focuses on providing insurance solutions that minimize risk, protect assets and reduce liabilities for clients throughout the Midwest and Chicagoland area. Along with its expertise in property and casualty, trade credit, employee benefits and financial services solutions for middle-market corporations, the firm is known for its claims service model and AuditRate division. It was named a Best Practices Agency four years in a row by the Independent Insurance Agents and Brokers of America. Alper Services joins Alera Group through GCG Financial, an Alera Group company located in Deerfield. The Alper Services team will continue serving clients in their existing roles.

South Central

One80 Intermediaries, National Underwriting Services

One80 Intermediaries has acquired INSURANCEJOURNAL.COM

National Underwriting Services Inc. in San Antonio, Texas. The terms of the acquisition were not disclosed. National Underwriting Services is a a managing general underwriter that provides medical stop loss coverage for self-funded employers across the U.S. One80 Intermediaries is a national wholesale broker, program manager and insurance aggregator headquartered in Boston.

Southeast

World Insurance Associates, Novak Agency Insurors

World Insurance Associates LLC acquired Novak Agency Insurors of Largo, Fla., on June 1, 2020. Novak Agency Insurors will be managed out of WIA’s Saint Petersburg office by Gregory D. Leifer, principal of World Insurance Associates. According to Rich Eknoian, CEO and co-founder of World Insurance Associates LLC, Novak Agency specializes in commercial insurance, which will complement WIA’s focus on personal lines in Florida with the West Coast Group and Dan Woron Agency acquisitions. Giordano, Halleran & Ciesla provided legal counsel to WIA, and legal counsel for Novak Agency Insurers was not disclosed. Scali Group advised WIA on the transaction. World Insurance Associates LLC is headquartered in Tinton Falls, N.J., and is a full-service insurance brokerage offering risk management, insurance and benefit consulting services for individuals and businesses.

Worldwide Facilities, Clearwater Underwriters

Worldwide Facilities LLC, a national wholesale insurance broker, managing general agent and program underwriter, has acquired Clearwater Underwriters Inc., a surplus lines MGA based in Clearwater, Fla. Clearwater Underwriters was established in 1991 to provide a market for retail agents in the placement of

excess flood coverage in the state of Florida. Since that time, the company has expanded its product line to include flood, professional liability, personal and commercial lines. Davis Moore, CEO of Worldwide Facilities, said the acquisition increases Worldwide Facilities’ offering of specialty programs. Don Waters Jr., president of Clearwater Underwriters, said the move expands its capabilities while it continues to offer a range of services and benefits to its affiliates. Marsh, Berry & Company Inc. served as a financial advisor to Worldwide Facilities in this transaction. PhiloSmith & Company served as an advisor to Clearwater Underwriters Inc. Worldwide Facilities is a national wholesale insurance broker, managing general agent and program underwriter.

West

Higginbotham, Pat Campbell

Higginbotham and Pat Campbell Insurance, an independent agency in Las Cruces, N.M., have merged operations. Both firms broker commercial and personal property and casualty insurance, employee benefits and individual life and health insurance. This is Higginbotham’s first brickand-mortar location in New Mexico. The acquisition adds a fifth state to its footprint. Higginbotham named Pat Campbell as owner and Kerry Hixon as a managing director. The office will have access to all of Higginbotham’s resources to introduce and enhance services to southern New Mexico business owners and residents. Pat Campbell Insurance is a commercial and personal property and casualty insurance, employee benefits and individual life and health insurance broker. Fort Worth, Texas-based Higginbotham is an insurance and financial services firm that brokers business insurance, employee benefits, retirement plans, executive benefits, life insurance and home and auto insurance from more than 250 regional and national carriers. AUGUST 24, 2020 INSURANCE JOURNAL | 23

Spotlight: Intellectual Property Intellectual Property: The Shift from Tangible to Intangible

he demand for intellectual property (IP) cover has been increasing year on year as businesses become more aware of the threat not only to their own IP, but also the potential that By Madeleine Brown they may face a claim of infringement by another company. It seems that agents, brokers

and insurers have experienced a surge in enquiries from U.S. companies over recent months, the drivers of which appear to be two-fold.

COVID-19

Firstly, the global pandemic has not only forced many companies to adopt new ways of going about their day-to-day business, but it has also forced many to reassess the importance of their intangible assets. While it’s a well established fact that intangible assets have

24 | INSURANCE JOURNAL | AUGUST 24, 2020

become an increasingly important factor on a company’s balance sheet with regard to its overall value, having to lock-up their premises and move to a work-from-home environment has served as a wake-up call for many that these intangible exposures need the same level of protection previously afforded their bricks and mortar. In many ways, COVID-19 has accelerated a trend that was already well underway with the shift from tangible business models such as manufacturing

to intangible business models such as selling or licensing IP rights and technologies. Those companies who hadn’t perhaps realized the value of the IP within their business — whether it’s within their brand, their creativity or their products and services — are now looking at how they can protect it in this new environment and for some, it will not be just through registering patents, trademarks or copyright. The second driver is maybe a little less obvious. For many INSURANCEJOURNAL.COM

companies nowadays, affirmative exposures arise in their obligations under contracts. This is impacting many lines of insurance, and is no different for IP insurance.

Contractual indemnity

Contractual terms and conditions relating to IP infringement used to prevail only in contracts where IP infringement was a particular concern. But now IP infringement terms and conditions are being applied, especially by larger corporates, as standard in all their contracts with other companies. This means they are now being seen in contracts for products and services that are not highly exposed to IP infringement allegations such as construction contracts, events management contracts, management consulting, professional training and even contracts for plumbing services. Contracts containing strict indemnities relating to IP are being pushed harder and with monetary uncertainty. Particularly in the current

economic climate, firms are looking to outsource this risk. These contracts not only have indemnity language but insurance is now being listed as a requirement to cover this indemnity — and with limit of indemnity requirements being set at as much as $5 million or higher, this is more than most small to medium sized companies can manage so they need to offset the risk.

‘In many ways, COVID-19 has accelerated a trend that was already well underway with the shift from tangible business models such as manufacturing to intangible business models such as selling or licensing IP rights and technologies.’ Litigation

What will always make IP challenging is the fact that claims are almost always managed outside the public domain. Managing negotiations and settlements out of court hides the reality of IP risk. However, as clients realize the importance of their

IP, we are likely to see the rise of litigation. Indeed, according to patent litigation data provider Cipher.ai, Q2 in 2020 was the busiest quarter for U.S. patent infringement court filings, both made by operating companies and non-practicing entities (sometimes known as patent trolls), in over three years, which might indicate the start of a new contentious period. Businesses increasingly want to enforce their IP and maintain their market share, and at the same time there is continual need to defend their IP against competitors and patent trolls. It’s not uncommon to see litigation that has no real merit but is started as a strategic move to bring forward a licensing deal or to even remove the other party from the market. Small and medium sized companies are unlikely to have their own legal departments ready and waiting for a lawsuit to land, but that doesn’t make them powerless to protecting themselves.

IP Insurance

So how do companies source this protection? Many are unaware that their traditional insurance policies do not provide adequate coverage and those that are, don’t know how to bridge this gap. The first step should be through their broker — but unfortunately this is where they may encounter a problem. Historically, arranging IP insurance has been a time consuming and expensive process and without traction for brokers. As a result, many have switched off and moved on to

focus on more profitable lines despite their clients requirements. However, while IP may appear complicated to arrange on the surface, it doesn’t have to be. It’s important that brokers remember that it is just another type of insurance and their clients have a real need for the valuable protection that it provides. The good news is that while IP insurance remains a small market, it has adapted. Quotations by some markets can be provided on the same day and with no upfront fees to pay. Clear and broad coverage is also now available so this, combined with an efficient and effective service, makes it a far simpler process for brokers to find the right level of protection for their clients. They just need to ask clients about those contractual indemnities or even more simply just whether they hold any IP. The truth is that IP insurance is sector-agnostic. Most businesses, of most sizes, in most industries will have an intellectual property risk whether they realize this or not and their risk in intangible assets is rising. Brokers do need to recognize their need and remember that IP cover is really just another type of insurance — all it takes to bridge the gap is to start the conversation with their clients. Brown is an intellectual property underwriter at CFC Underwriting, London, UK. With over a decade’s experience of underwriting intellectual property risks around the world, she heads up CFC’s IP practice. Email: mbrown@cfcunderwriting.com

News & Markets Cruise Line’s Appeal Backfires: Appellate Court Overturns Limit on Medical Damages By Jim Sams

federal appellate court has affirmed a $1.2 million jury award to a woman who broke her arm after tripping over a bucket on a cruise ship. That may have been the least significant part of the ruling in Higgs v. Costa Crociere S.P.A. Co. In the same decision, the 11th Circuit Court of Appeals abolished a longstanding practice by South Florida federal judges to limit medical damage awards in maritime cases to the amount paid. What’s more, the panel upheld jury instructions that told jurors they could assume the cruise line was trying to hide something because it had concealed evidence. Houston personal injury attorney Robert Chaffin said it’s been a long fight for his client, Michigan resident Joyce D. Higgs, who is now 73. Two juries have awarded damages of more than $1 million. He said the company that owns Costa Cruises didn’t offer his client a penny for her claim until trial. “Cruise lines, when dealing with injured people, kind of take a hard line,” he said during a telephone interview. “They make you work for your money, if you know what I mean.” Higgs tripped over a bucket filled with dirty water after loading her plate at the breakfast buffet while abroad the Costa Luminosa on Christmas Eve, 2014. She said the bucket was placed behind a corner, so she did not see it as she turned. The fall broke her humerus and caused a permanent shoulder disability, Chaffin said. Chaffin sued the Italian cruise line, Costa Crociere, for negligence at its home base in South Florida and won at trial. A jury awarded about $1.1 million in damages and deducted 15% to account for Higgs’ degree of fault. The 11th Circuit overturned the award, finding that the trial judge had inappropriately excluded evidence 26 | INSURANCE JOURNAL | AUGUST 24, 2020

that Higgs had fallen down several times before. The case went to trial again, this time with evidence about Higgs’ alleged propensity to fall presented to the jury. Chaffin said while he prepared for trial, Costa did not disclose during discovery that one of its security employees, Kavita Kamble, had investigated Higgs’ accident and had taken photographs of the scene. Higgs’ grandson, who was also on the cruise along with several other family members, tried to take photographs but cruise line staffers blocked his access. The grandson, however, was able to see Kamble taking photos. When responding to discovery requests, the cruise line’s attorneys said there were no photographs taken of the scene. Incensed, Higgs’ attorneys filed a motion for discovery sanctions. Costa argued that Kamble’s photos were privileged. U.S. District Judge James I. Cohn granted Higg’s sanctions motion, saying the discovery violation was “egregious.” He approved instructions that the jury may make an “adverse inference” because the cruise line did not reveal Kamble’s investigation or her photographs. The second jury also found in Higgs’ favor and awarded about $1.1 million in damages for pain and suffering, plus about $61,000 for medical costs. Costa appealed the verdict, arguing that the jury’s findings were not supported by evidence and that the jury instruction had unfairly prejudiced the jury against it. The 11th Circuit disagreed. “The evidence showed that a Costa employee placed a bucket — more than one foot tall and filled with dirty water — behind a blind corner in a highly-trafficked breakfast buffet pathway,” the appellate court said. “That this placement would pose a danger of tripping would have been obvious to anyone, including to any employee who knowingly placed

the bucket there.” The appellate panel also upheld the jury instructions, saying Costa’s failure to reveal the identify of Kavita Kamble, despite the district court’s order to disclose all evidence, was a serious violation of discovery rules. “Indeed, because Costa concealed her identity throughout the first trial and disclosed it only two weeks before the second, Higgs has never had the opportunity to depose her, and we still do not know what she might have said,” the panel said. Higgs’ filed a cross-appeal that raised the issue of medical damages. The jury found that Higgs should be awarded the amount that doctors billed for her injury — about $61,000 — not the $16,000 that her health insurer, United Healthcare, paid for her treatment. Chaffin said it is the practice of judges in the South Florida District

continued on page 27 INSURANCEJOURNAL.COM

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News & Markets California Court Rules Amazon Liable Like Other Retailers for Defective Products By Lisa Baertlein

mazon.com can be held liable like other traditional retailers for injuries from defective products sold, a California state appeals court ruled in mid-August. The decision overturned a San Diego Superior Court ruling that the world’s biggest online retailer was shielded from liability because it acted as a service provider, which is not subject to California product liability law. In addition to selling its own inventory, Amazon allows third-party vendors to list products for sale on its website. From the California Court of Appeal opinion in Bolger v Amazon: “...Amazon placed itself between Lenoge and Bolger in the chain of distribu-

tion of the product at issue here. Amazon accepted possession of the product from Lenoge, stored it in an Amazon warehouse, attracted Bolger to the Amazon website, provided her with a product listing for Lenoge’s product, received her payment for the product, and shipped the product in Amazon packaging to her. Amazon set the terms of its relationship with Lenoge, controlled the conditions of Lenoge’s offer for sale on Amazon, limited Lenoge’s access to Amazon’s customer information, forced Lenoge to communicate with customers through Amazon, and demanded indemnification as well as substantial fees on each purchase.”

The appeals court found that Amazon played a pivotal role in every step of plaintiff Angela Bolger’s purchase of a replacement laptop battery from Amazon third-party seller Lenoge Technology HK Ltd. Bolger alleged that the battery burst into flames, resulting in severe burns. “Whatever term we use to describe Amazon’s role, be it ‘retailer,’ ‘distributor,’ or merely ‘facilitator,’ it was pivotal in bringing the product here to the consumer,” the appeals court held. (Reporting by Baertlein in Los Angeles and Nate Raymond in Boston; Editing by Greg Mitchell and Dan Grebler) Copyright 2020 Reuters.

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continued from page 26 to limit medical damage awards to the amounts actually paid. He said he had appealed rulings that imposed limits a few times before, but Higgs’ case was the first time his argument was addressed in a ruling. The 11th Circuit said courts have long held that damage awards should not be offset by amounts paid by third parties. For example, if a woman’s car is destroyed by an accident, it should not matter that her rich uncle bought her a new car to replace when determining the amount of damages. The principle is known as the collateral source rule. The appellate panel said a jury award for medical damages should not be reduced because the injured party had purchased insurance that covered those costs; plaintiffs are entitled to recover the reasonable value of treatment for their injuries,

regardless who pays for the expenses. On the other hand, determining the value of medical services is a tricky question because medical providers habitually bill for far more than they are paid. The panel said the amount paid for services can vary greatly depending on contracts that have been negotiated by health insurers. Some courts have found that awarding damages based on the amount billed will lead to large overstatements of value, and so have limited awards to the paid amounts. But the 11th Circuit said limiting recovery to the amount actually paid would in effect result in uneven recoveries for plaintiffs who suffered similar injuries. For example, a person who receives care through Medicare would be paid less because the federal government drives a harder bargain than private insurers. The court said it also would not oppose allowing defendants to enter into evidence the amount

that a plaintiff actually pays for medical services. “For these reasons, we hold that the appropriate measure of past medical expense damages in a maritime tort case is the amount determined to be reasonable by the jury upon its consideration of all relevant evidence, including the amount billed, the amount paid, and any expert testimony and other relevant evidence the parties may offer,” the court concluded. Chaffin said the ruling will be important in future cases where medical damages are in question. “It’s a big thing,” he said. “The rule adopted now is that both parties can offer evidence as to the reasonable and necessary costs of the medical procedures/services involved,” he explained in an email. “Jury could conceivably award full amount of bills, amount of bills actually paid or something in between. Pretty much a new rule for methodology of awarding medical costs but it makes good sense.” The cruise line’s attorney, Richard J. McCalpin in Miami, did not respond to an email requesting comment.

Sams is the editor of ClaimsJournal.com.

Special Report: Sales and Marketing

28 | INSURANCE JOURNAL | AUGUST 24, 2020

INSURANCEJOURNAL.COM

start presenting your solutions.

Dennis Pauls, PCF Insurance Services 6. CTA. Don’t forget a call

to action (CTA) when you advertise/promote. What do you want the reader/consumer of content to do as a result of encountering your ad/promotion? Visit your website, call you, watch a video? Be specific.

Doug Coombs, SIAA (Strategic Insurance Agency Alliance Inc.) 7. Content Is King. Fresh

1. Offset Negativity. What can

you show your clients that you are doing to help them during the pandemic? Everyone is tired of hearing how all their business income (BI) claims are denied. What are you doing to offset all that negativity? Chris

Burand, Burand & Associates 2. Engage with Followers.

Social media is now a vital tool when it comes to sales and marketing, but social media managers must remember that engagement is key. Gaining likes and followers is great, but you also want to listen to your followers’ needs and acknowledge their likes and commentary. From a simple “thank you” to private messaging those who leave unfavorable reviews to review their concerns, engagement could be the key to not only making a sale, but also changing an opinion and gaining an even larger following.

Toshya Leonard, Appalachian Underwriters Inc. 3. Address Risks. Identifying

and gaining agreements to address risks of loss drives change behavior far more readily than offering gains. Frank

Pennachio, Oceanus Partners, a INSURANCEJOURNAL.COM

ReSource Pro Company 4. Claims Opportunity. The

best time to ask for referrals is at the time you deliver good claims service, a visit, a check, whatever. This is the purpose of insurance, and it shows that the policy they purchased did what it was supposed to in their hour of need. If the client is commercial, like an auto dealer, ask for the name of a few of their key competitors and ask if you can use their name. If a homeowner, get the name of a few neighbors, friends or family to refer you to. Catherine Oak, Oak &

Associates 5. Focus On Them. When

you’re talking to your prospects, focus on them, not your products or services. Ask the simple question, “What’s important to you?” And then listen to what they say. You’ll be surprised how much they tell you. Don’t assume you know what they need or want. Once they start talking, keep probing with more questions to truly understand their needs before you

content is the best content. Building awareness is about consistency. Developing brand equity doesn’t happen overnight. Continually posting content to your blog and evaluating your content’s performance is critical to growing your brand. Zach Weeks, ITC 8. Polite Persistence. Adopt a policy of “polite persistence” when pursuing a prospect. The number one mistake we see people make is to stop selling too soon. It may take 5 or 6 outreach efforts to make a sale. Business development campaigns that stop at 1 or 2 contacts are leaving money on the table. Unless the prospect says “no,” keep trying in a professional manner.

Margaret Grisdela, Legal Expert Connections Inc. 9. Check Up. Check on

your customers during the pandemic. For some clients, just receiving a phone call can further cement your relationship with them. Your interest and involvement will pay off in referrals and goodwill. Pipelines get rebuilt that way, which leads to growth. David

Tralka, InsurBanc

10. A Non-Response Is Not a No. Business executives

are busy, time-starved and juggling multiple initiatives. Responding to an email solicitation, no matter how well crafted, is not a top priority. But that doesn’t mean they aren’t reading what you share. To increase response rates, brokers must be persistent and consistent in their messaging and share insights and content that directly relates to their prospect’s needs, challenges and risks. Your prospects expect you to give up. Prove them wrong by developing insightful content that piques their curiosity and is relevant to their role. Susan Toussaint,

Oceanus Partners, a ReSource Pro Company 11. Mine Existing Books.

Review databases to identify, contact and re-solicit any “lost” or “prospective” clients within the last three years. Harrison

Brooks, Reagan Consulting 12. Pay Attention. Too often, I

see agents not paying attention to what’s being built around their area and trying to get in front of a new development too late. As soon as a new neighborhood or multi-use area is announced, find out who the owners and builders are and try to set up meetings with them. That way, you already have a foot in the door when people start buying, giving you a one-up on the competition.

Zach Rogers, AAA 13. Online Reputation. Manage

your online reputation. Don’t let it manage you. Publicly respond to all online reviews on Google, Yelp, Facebook, etc. Whether the review is glowing, challenging or just a star ranking, responding publicly gives your agency the opportunity to

continued on page 30 AUGUST 24, 2020 INSURANCE JOURNAL | 29

Special Report: Sales and Marketing continued from page 29

not? Expressing interest and taking feedback might well make a buyer into a repeat customer. For a five dollar mask, a feedback process is hard to cost justify. But how about for a $1, 000 homeowners policy? A $10,000 BOP? How about other products? I like to buy, but I like to rebuy when I find that product that suits me just right.

Charles Wasilewski, Aartrijk 16. Show Gratitude. Despite

demonstrate your core values, mission and willingness to engage. It also allows you the chance to turn around a bad customer experience for the reviewer ... and online shoppers get to see it. Dshanya

Reese, Watkins Insurance Group 14. LinkedIn Live Broadcasting & Special Events. Take

advantage of the NEW 2020 marketing and advertising tools that LinkedIn offers. This is going to replace the Facebook Small Business Advertising madness all over again. From live video broadcasting to help you establish a LinkedIn expert authority to building your fan base or an audience. Utilize the new LinkedIn Events to promote webinars and special virtual seminars to help you promote your solutions/products. Patrick Zerarka, Iroquois

that I used for dusty jobs like sanding or fertilizing. Not that comfortable. I moved on to find a light colorful mask made of shirt fabric by a local tailor. It was roomy, but I soon found out that having the thick straps around my ears wasn’t going to work, and the metal stay in front of the nose would not stay in the middle of the mask. So I moved on to the disposable masks you’ve probably seen. Lightweight with light elastic cords I can barely feel on my ears. These are my favorites. Likewise, if you provide someone with a product or service, are you taking the time to follow up with them to see: How does it fit? How does it feel? What’s working? What’s

our reliance upon all things digital and virtual, showing gratitude the old fashioned way is key to developing and retaining a network that will support you. Whether dropping muffins to a referral source, an orchid to a customer at deal closing, or a handwritten thank you note to follow up on a meeting, having an attitude of gratitude is never going to fail you. Make these gestures your signature.

Pam Simpson, Wells Media Group Inc. 17. Know Your Coverages. Selling

based on backslapping is dead with social distancing. The only good alternative is to actually know your coverages and sell your expertise. Chris Burand,

Burand & Associates 18. Floaters. Suggesting a

Personal Article Floater for prized possession(s) may

lower an overall package premium due to adding an additional policy to earn a larger multi-policy discount.

Warren Wettenstein, Wettenstein Insurance 19. Plug into Executive Leadership Networks. Leverage existing relationships with leading clients to meet new contacts and serve as an expert resource for their professional communities who may be seeking insurance advice and guidance. Harrison

Brooks, Reagan Consulting 20. Stand Out. Customers

are being deluged with vendors using email to stay in contact given limited in-person meetings. What are you doing to stand out from all the other emails? Would a phone call be better? Chris Burand, Burand &

Associates 21. Use Video. It’s more

engaging, reaches multiple senses, and viewers of video tend to retain more than a message with a single sensory input. Video creation resources are more prevalent and less expensive than in the past. Share the video through your website, email and social media. Doug Coombs, SIAA

(Strategic Insurance Agency Alliance Inc.) 22. Process People. Create pro-

Group 15. The New Four-Letter Word in 2020: Mask. These simple

devices have become a lifesaving necessity. But they’re not without their problems. While mostly a safety accessory, they also tell me a story about sales and retention. My first coronavirus mask this year was a P95 model from my garage 30 | INSURANCE JOURNAL | AUGUST 24, 2020

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cesses that leverage technology so your time and attention can be spent on clients and prospects. Kitty Ambers, AVYST.

payoff that causes people to move. Dennis Pauls, PCF

Insurance Services 34. Adapting to Virtual Platforms. Transition from

com 23. Let Data Guide You.

face-to-face meetings to video interactions and providing relevant, real-time content online that clients and prospects can easily access. Harrison Brooks,

According to the 2020 Dodge Construction Outlook report, over 776,000 construction starts are projected for the year. There’s a lot of builders risk opportunity for personal and commercial lines agents to grab, and it’s quick to issue.

Alan Ferguson, US Assure 24. Zooming. Create a

Reagan Consulting 35. Prepare for a Hard Market.

professional looking Zoom background. Justin Foa, Foa &

smooth. A combination of an agent and technology make a huge difference. Luis Castro,

Son Corporation 25. Advocate. Be the custom-

Univista Insurance 29. Walk Away. It’s OK. Not

er’s advocate by protecting everything they have. Look for every opportunity to cross sell each customer. The more products a customer has with you, the better the retention.

Katie Curvel, We Insure 26. WIIFM (What’s In It For Me). When communicating

a change, whether it be to clients, prospects or employees, try to think from their perspective about WHY they should be interested in the change. If they understand that there will ultimately be a personal benefit, they will be more likely to adopt and maybe even help promote the change. Sara Holloway, Morris &

Garritano 27. Respect. Treat every

customer with respect. Let them ask questions and don’t use abbreviated answers. Most customers do not know the meaning of BOP or U/M, for example. Robert Lee Jr.

28. Invest in Technology.

Create a platform to support agents and clients. Guarantee top-level customer service and make the experience of purchasing an insurance policy

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MarshBerry 32. Quote Disasters.

every prospect that you meet with is the right fit for you or your firm, and that’s OK. Don’t waste time trying to force something that doesn’t need to happen and move on to the next opportunity. Zack Pittman,

Depending on client’s commercial/home property address, even if running a mono-line quote, it is worthwhile to also quote flood, earthquake and/or umbrella as potential additional sale(s). This demonstrates that you put in more time to help clients and improves agency retention. Warren Wettenstein,

MarshBerry 30. Know the Audience.

Wettenstein Insurance 33. Emotional Side. People

Educate your team on the importance of knowing their audience. Go beyond understanding their business and identify their personality style. The way you ask questions and deliver solutions to their challenges should be directed toward their individual personality style. Don Folino,

MarshBerry 31. Partner Up. Creating a team approach to new business helps encourage efficiencies and allows you to grow exponentially. Hire and train specialists for each stage of the sales process. For example, partner those that are good at opening doors with those that are good at closing business. Ben Swann,

make buying decisions using the emotional side of their brain. Presenting the most logical or price competitive solution does not always win. Your solution needs to address issues such as if you can save them money and what can their business do with those savings. How does your solution impact their associates? If they are a contractor, does your solution allow them to bid on more or better contracts? Remember, it’s the emotional

There are plenty of indications of a hard market. Preparing your agency for the risk management conversations and education customers will need can position your agency to spend less time servicing and more time selling during a hard market. Eddie Riveiro, Westfield 36. Be Honest. Want to know how we sell? By being honest. Honesty is the best policy when it comes to your prospects and insureds. When you’re honest, they would believe your words and stay loyal no matter who they come across trying to sell to them. Build that relationship by having an open-door policy.

Kitty John, Prestige International Insurance Group Inc. 37. Consolidate. Reassess your

current portfolio of carriers and wean off those contracts that are under performing through a formal book roll or transfer as part of your consolidation efforts. Small portfolios that aren’t at profit share can be a waste of time and money.

Damon Johnson, Westfield 38. Selling vs. Marketing. We

know that customers continue to shop, and they are shopping for something more than products. They are shopping for a dependable process — an advisor. In many ways, the industry equates selling to marketing, but they are not the

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Special Report: Sales and Marketing continued from page 31 same. Craig Welsh, Westfield

39. Disruption Isn’t the Same for Everyone. Try to

not assume that everyone else has the same reaction to disruption that you do. In the year 2020, there’s been plenty of disruption I’ve had to learn from. I’ve found that I’ve taught people I never thought I would and have learned from people I didn’t think I would. This could mean something good for your business. Charles

Wasilewki, Aartrijk 40. Tech Tools. Use inexpen-

sive web-based tools to make it look like you have a full staff of designers and content producers. Tools such as Canva, WeVideo, Vyond, Magisto and Slidebean will help you up-level your visual content efforts without having to hire designers or expensive agencies. Leslie Lash, The American

Equity Underwriters Inc. 41. It’s a Context Battle, Not a Content Battle. When

purchasing keywords, it may seem daunting competing against large carriers or agencies. However, when it comes to keywords, it’s a context battle, not a content battle. Find the keywords that work best for your agency. Choose specific keywords, not general keywords. It will help your pocket and your page ranking.

Zach Weeks, ITC 42. Action Conquers Fear. We spend too much time thinking of ideas and trying to develop strategies but are slow to take action. Don’t let that be the case with you. Zack Pittman,

MarshBerry 43. Ask and Know. There

tends to be two distinct sales approaches when it comes to successful vs. unsuccessful producers. Assume and Guess,

or Ask and Know! Frank Cox, MarshBerry 44. Explain the Policy. Take

time to explain the policy to your client. Do a thorough analysis and review of their policy and help them understand it so they can make an informative decision. Ariel

Rivera, Deer Insurance Agency LLC and AIMS Society board member 45. Virtual Executive Presence. Now more

than ever, we need to effectively use technology to connect with our prospects and clients. We need to ensure others are comfortable with it, too. When we use technology platforms for meetings and presentations, we need to pay particular attention to our executive presence. Professional dress (at least from the waist up), grooming, intentional eye contact and practicing what we are going to say with confidence are all critically important to our effectiveness. Sandra Usleman,

USI 46. Don’t Be Afraid to Fail.

Sales is very much like baseball batting averages. You might only close 35%, which means you “failed” 65% of the time. Don’t let that stop you. Focus on the wins, not the losses. Jim

Mitchell 47. Make it Personal. Find a

way to personalize your content on large and small scales, whether that’s by segmenting your database for broad promotions like home remodeling or asking more questions in a one-on-one setting to tailor your conversation. You’ll find more success when you make

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the content more about the customer and less about you.

Melinda Stivers, US Assure 48. Strengthen Your Online Reviews. One of the best ways

to expand your insurance agency’s client base is to elevate your online reputation. Clients can help you do that by submitting positive online reviews.

key people to teach difficult concepts or promote unique products. [For example, see below the avatar of National Alliance Commercial Lines expert Paul Martin teaching the insurance concept of personal property.] Paul Martin, The

National Alliance for Insurance Education & Research 53. Do the Right Thing. Do

Heather McIlhany, Pie Insurance 49. Is Your Heart In Your Brand?

Think of your insurance brand as a lively, pumping heart that invigorates your business. Your personal and company brands must pump the red stuff of vitality each day, every day, 24/7. Charles Wasilewski,

what is right, not what is easy. I was taught this at a very young age, and it has certainly helped me over the years. I always go above and beyond to sell the right coverage, not the cheap and easy coverage. Many of us wholesalers have the same carriers and capacity, but making sure to use them correctly for each particular client will help get you the deal even if it is the more difficult road to sell. Abby

Aartrijk 50. Focus on Current Clients.

Daugherty, All Risks Ltd. 54. Current Book of Business.

Stop hunting for sales outside of your office. The opportunity for new business sales lays with your current clients. 51. Plant the Seed. Do they really know what your office sells? Maybe they think you only sell homeowners and didn’t think about you for their auto insurance. Or maybe they don’t realize that they need a personal umbrella policy. Plant the seed of curiosity. Send an email with case scenarios or include these case scenarios in your newsletter. That will help them understand the coverage and their exposure.

I’ve found that working my existing book of business is the best way to both grow my business and fully service my clients. The key for me has been fine-tuning our Client Needs Assessment, a fact finder of 10 questions we use to identify the needs of the client. One year after using the CNA in our agency, our agency’s production doubled. One of our most successful agents saw an 88% increase in her sales over the course of a year. The CNA has allowed me to be a million-dollar producer, and

Dulce SuarezResnick, Acentria Insurance, AIMS Society board member. 52. Avatars. Use

software tools to create animated avatars of your INSURANCEJOURNAL.COM

I’m thrilled to be sharing it with other agents in the senior market insurance industry. That CNA has been the single BEST sales tip for us by a long shot.

Michael Sams, New Horizons Insurance Marketing 55. Make Friends with the Gatekeeper. The person at the

desk knows everything about the company and all its internal struggles. They can connect you with the right people and help navigate for new opportunities. For new opportunities, a gatekeeper can be your Trojan horse into keeping your name in front of the right people. For existing customers, a great gatekeeper will protect you from competition. Instead of figuring out a way to get past the gatekeeper, focus on a way to get to know them each time you call or stop in.

is a low-touch industry. This term refers to industries that only require annual attention. Because the process only occurs once a year, consumers are more likely to notice a poor experience. Your customer experience must be smooth and seamless to convert modern insurance shoppers.

Zach Weeks, ITC 59. You’re Fired! Fire your

worst customers, making room for better customers. It’s OK to say no. Craig Most, Most

Insurance, part of the InsureOne family, AIMS Society past president 60. Activate Community Involvement. Many agents

sure you are offering your services through multiple channels — website, social media, email, telephone, video conferencing and faceto-face (where feasible in our COVID-19 world). Even clients who purchase insurance online want personalized advice from a broker. Margaret Woodruff,

are already involved in their communities in some way: volunteering, donating, offering their expertise. However, not enough agents are talking about that involvement, often out of fear of coming across as disingenuous. Keep it authentic by making any promotion around your involvement more about the nonprofit or cause than your agency. Tell stories on your blog about the impact being made in your community, highlight milestones of the nonprofit in your newsletter, or even offer charitable donations through your referral program.

Victor Insurance Holdings 57. Specialize. Be a coverage

Shannon Chatman 61. Complete Submissions.

Chris Beardslee, Allied Insurance Managers Inc. 56. Multiple Channels. Make

specialist in a specific industry or sector. Write articles and follow leaders in the marketplace. Get your name and personal brand associated with the things you are most invested in and you will never work a day in your life. Damon Johnson,

Westfield 58. Consumer Experience Has Never Been More Important.

Technology is the cornerstone of consistently excellent customer experiences. Insurance INSURANCEJOURNAL.COM

The more information you can offer up front, the better. In addition to completed applications or loss runs, it is always helpful to include a summary of the risk and target premiums. This allows underwriters to determine whether or not they can be competitive, and will slice through some of the back and forth. Underwriters also tend to treat full submissions with priority. Danielle Fitzsimmons

62. Right Platform. Be intentional in choosing a review platform to invest in and invite satisfied clients to write reviews for you. Always follow up and let them know you value their feedback. Heather McIlhany, Pie Insurance 63. The Journey. Keep the

consumer journey in mind. Customers want choice, quality and fast service. Exceed their expectations to keep your customers and gain referrals.

Katie Curvel, We Insure 64. Offer Everything. Make

sure that the insured knows the scope of what you can offer. Not long ago, as a favor to a landlord client, we wrote a little GL policy for a tenant of his who needed the GL to comply with his lease. I spoke to the tenant and explained that we can write everything he might need. Turned out that he had a Lloyd’s of London homeowners for his beautiful brick town house

in a lovely neighborhood in Brooklyn. We rewrote it and his auto, umbrella, etc. as well. The premium is over $10,000. Annually. Marty Lebson, EPIC

Brokers, AIMS Society past president 65. SMILE! Even when you

are on the phone. You can tell when someone is smiling or if they are dreading the conversation. Meagan Mariotti 66. Solar. Most homeowners and some business building owners neglect to increase their Replacement Valuations AFTER installing Solar Panels. Worthwhile asking clients during annual review.

Warren Wettenstein, Wettenstein Insurance 67. Listen More than You Talk. The best way to sell

yourself is to make sure others enjoy doing business with you. Most people like to talk about themselves, so ask questions! You will learn more about your client and be better prepared

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Special Report: Sales and Marketing lifetime if you desire to be successful. Frank

continued from page 33

to service them well by understanding their needs. Stephanie Moose 68. Reach Out. Many insurance professionals may be hesitant to communicate with their policyholders, fearing that they may "poke the bear." But having recently surveyed over 2,000 U.S. auto insurance consumers, we have discovered that the reverse seems to be true. It seems that if you’re quiet too often, your customers might quit. 74% of respondents said that they want to hear from their insurer at renewal in addition to receiving a renewal notice and just over half (57%) said they are open to outreach at other times during the term. Most startling was the stat that 47% of policyholders who switched carriers said that the insurer's failure to reach out influenced their decision to switch. Ian Griffin, LexisNexis

Cox, MarshBerry 72. People Skills.

People eventually do business with sales people that they know, like and trust. The speed at which you build trust with a new prospect is highly contingent on your people skills. Frank

Cox, MarshBerry 73. Spend the Time to Fill Out a Thorough Submission.

Risk Solutions 69. Get to Know Your Clients. Get to know your

clients beyond talking about exposures and coverages. Give the human aspect to the client along with your insurance services. Building a foundation of a relationship beyond coverages helps to make you the client’s go-to person for your field of expertise. It also makes it more difficult for the client to shop their business when they have a connection to you other than just talk of insurance. Find out their hobbies/interests and implement that into your meetings with them whenever possible. Ashlee Paieda

70. Low Hanging Fruit.

New business opportunities

were hard enough to secure prior to Covid-19. Now many businesses have eliminated visitors altogether. Reviewing your existing book of business to cross sell other lines of coverage and revisiting accounts you had worked on in previous years can help increase your new business activity. Chris

Wilfore 71. Art of Persuasion. Sales

methods may change over time, but the principles never will. The art of persuasion is something to pursue for a

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Having seen hundreds of submissions that come in, I know that taking the necessary time to prepare a thorough submission is well worth it. I know we’ve heard this before, but it can make a huge difference on the underwriter’s ability to understand the risk and place it effectively. The more info you can accurately convey, the better the underwriter understands the risk, which makes for clearer communication before and after the sale. Hand-written submissions with several blank spots are like resumes written in crayon. J.D. Babuder 74. Prioritizing. If you want to be punctual with your clients, make sure to take the time to create a to-do list every day. Make sure to list the importance of each task and do the important ones first. List no more than six tasks in total daily so you’re not overwhelmed. You’ll find you get what needs to be done on time completed, and what’s unimportant gets prioritized accordingly. J.D. Babuder 75. Retention. Your account managers control a huge

part of your revenue growth. Reward them for improving your retention. Set a goal to beat last year’s retention, track your results every month and bonus them based upon the improvement. Everyone wins when you save dollars from going out the door. Diane Hipp 76. Thank You. Start every communication, letter, text or email with the words “thank you.” It demonstrates appreciation and will transform relationships favorably.

Skip Rawstron 77. Build Authentic Connections.

When it comes to communicating with current and future customers, the message matters much more than the channel. Authenticity is essential, and showing the unique personality of your agency and your agency staff in all communication helps build stronger client relationships. At the end of the day, people like doing business with people they connect with. Nick Andrews

78. Open Communication.

Different levels of communication are applicable to different types of accounts and situations. Sometimes an email isn’t effective in communicating details on an account, especially if the account has a story behind losses or unique exposures. But on more straightforward accounts, an email or two might be all that is needed. Regardless of the type of communication, it is always important to communicate openly and to be honest and forthcoming with information. Time is valuable to everyone, INSURANCEJOURNAL.COM

so openly and effectively communicating is a win-win for everyone. Danielle Fitzsimmons 79. Watch Your Words. We in the insurance industry use so many acronyms. We understand our own terms, usually. But think of customers or prospects who don’t work in our industry. Does it make good business sense to invest the time in a customer relationship to explain terms and why they’re relevant?

Charles Wasilewski, Aartrijk 80. Always Have a Plan. When

it comes to digital marketing, always have a plan. A social media calendar and a strategic pay-per-click campaign go a long way. The best plans win.

Zach Weeks, ITC 81. Mine Your Resources.

A few ways agents can spot builders risk opportunities include: identifying clients with homes built one decade ago or more and proactively contacting them about future projects, researching public permits and asking clients for friends and family referrals.

Mary Stiglic, US Assure 82. Adjust. Track what’s work-

ing and continuously adjust your processes accordingly.

Kitty Ambers, AVYST.com 83. Positive Reviews. Ask

every customer for an online review. Earning positive reviews takes effort, and most customers do not share feedback unless they have had a bad experience. Set up an automatic request via email to make it easy for your customers to review your agency. Katie

Curvel, We Insure 84. Building-Less. Expand

market area without brick and mortar. An emerging opportunity from the pandemic is that prospects and customers are willing and able to engage INSURANCEJOURNAL.COM

virtually, which can provide new market opportunities for producers and agents without investing in fixed infrastructure. 85. Agency Value. A value proposition is an authentic representation of the unique capabilities that agents bring to customers — a true reflection of significance. When you define your agency value proposition, be sure it is based on actionable ways to address both employee and customer needs. It will be the foundation upon which agents can differentiate their business. Craig Welsh, Westfield

86. Understand the Problem.

Every client comes to us for a solution to some type of problem. Listen to them with kindness and empathy. Offer sound responsible advice and do your best to make sure they understand you. Ariel Rivera,

Deer Insurance Agency LLC and AIMS Society board member 87. Get Personal. Let clients

and prospects get to know your brokers to facilitate stronger relationships. Post short profiles on social media, including what they like to do in their off hours, how they got into insurance, etc. Margaret

Woodruff, Victor Insurance Holdings 88. Upfront. Put your value

statements upfront. Many sales people begin talking about

themselves or their services, or even off topic (sports) to build rapport. One of the worst phone opening statements is, “Can I have 30 seconds of your time to discuss my product?” You already wasted a third of that asking permission. People are busy. Begin the conversation with three ways companies like your prospect have benefited from working with your agency. Quantify with examples of dollars gained. Then back up those claims with details later in the conversation. Steve Pearson, ISU

Insurance Agency Network 89. Develop Communication Skills. The vast majority of

sales people are bad listeners, and in turn, have poor communication skills. You want to differentiate from your competition? Try actually listening to what your prospect is telling

you and focus on your ability to acknowledge the conversation at hand. Zack

Pittman, MarshBerry 90. Be an Expert. Build a

reputation as an expert. If you are active in commercial sales,

it pays to invest in becoming a go-to expert in a particular sector or industry and its associated coverages. Obtaining certifications and education valued in the industry will earn additional credibility with customers and place you at the center of the consultative sales process. Industry associations and groups can be a starting point to set you on your way. 91. Be Patient. When you get a lead, that becomes your baby, and you have to work and take care of that baby until they fully mature. Patience and dedication are what people give up on. Even if it doesn’t work out, still be kind because when they’re up for renewal, they will want the best service.

Kitty John, Prestige International Insurance Group Inc. 92. Networking. Referrals,

introductions and networking have never been easier. Catching people when they are available, meeting new people on their time in the ways they want to interact just takes a little patience. Building your network is critical to attaining and maintaining good business flow. Damon Johnson, Westfield 93. Choosey. Successful sales organizations allow their team

members to choose whom they work with and when. This allows you to identify quickly who on your team is good at the various roles. The best closer will always get more opportunities than the one that thinks they are the best. Ben

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Special Report: Sales and Marketing continued from page 35 Swann, MarshBerry 94. Communicate with Policyholders on Their Terms. There is something

about email that puts the reader in control. Phone calls and text messages are immediate, but you may end up being perceived as pestering. Policyholders want engagement but they want it on their terms. Our recent consumer research showed that over 90% of respondents said that email was their No. 1 preference for communication from their insurer. Now there are some caveats to that — 55% of older respondents said their second most preferred method of contact was a phone call,

EXTRA Ideas! Embrace Digital. To attract

new clients and employees to your business, you need to offer effective digital services, from online applications and insurance purchasing tools to streamlined data systems, automated marketing and customer relationship management platforms. Margaret Woodruff,

Victor Insurance Holdings Be a Knowledge Source. It’s

a great way to build customer loyalty and leverage content you receive from carriers. Have a resource page on your website, write a weekly or monthly blog, send regular eblasts, and build on your role as a trusted advisor for your clients. Margaret

Woodruff, Victor Insurance Holdings When They Need You. When

sometimes your underwriter’s decision can be changed when presented with additional information. If you find out something new that paints a more favorable picture of the risk, don’t be afraid to ask your underwriter to take another look. Stephanie Moose

whereas mobile app notifications rated high with younger respondents. Either way, you can’t go wrong with email. Ian

Griffin, LexisNexis Risk Solutions 95. Listen Proactively.

Chances are, we likely will not write every account that comes our way. Sometimes helping an agent can just be about listening to them. Giving your client suggestions on situations, or respectfully giving them a quick declination, can often help save them time. With so much being done via email and not by phone or in-person anymore, taking the time to get to know each other better helps to build a stronger agency relationship. Your client will feel more confident working with

reaching out to policyholders, don’t assume that all they want to talk about is price. While price is front of mind in many cases, our research shows that consumers have other things on their mind as well. Be open to engaging your policyholder – get to know what is happening in their lives so you can be there when they need you. We found that many of them have other things on their mind — 39% want to discuss additional coverage, 31% were interested in discussing bundling options and some, especially younger folks, may want to provide feedback. Ian Griffin, LexisNexis

Risk Solutions Bring Your Submission to Life.

Having a completed Acord application, loss runs and an experience mod worksheet is a nice start. But to truly bring a submission to life for your underwriters, it’s important to provide a narrative with as

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97. Leave Them with Valuable Knowledge. You’ll find not

someone they know and trust when the next opportunity arises. Sandy Higgins 96. Ask Again. Don’t be afraid to ask again with better information. It will not be to your long-term benefit to challenge every declination. However,

much detailed background information as possible regarding any large losses, as well as the corrective action taken to help mitigate any similar losses in the future. Telling the whole story can often help improve the chances of securing a competitive quote. Chris Wilfore

Keeping Clients Satisfied.

Hidden behind every complaint is a wish. Look for that wish and try to make it happen for your client. J.D. Babuder

only success, but a sense of immense satisfaction by talking with your clients in great detail. Take all the time necessary to make sure the client completely understands the purpose of your questions. By sharing your expertise, you will gain their trust, bring in more referrals and leave them with valuable knowledge. Susan Loving

Dealing with Rejection. In every rejection lies the seed for success. If you look hard enough, you can find a guide for your actions moving forward. J.D. Babuder

Identify Strengths and Specialties. Figure out what

sets you apart from your competition. Is it service? Is it price point? Is there a class that one of your markets writes consistently? Determine your areas of opportunity and

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98. Grow with Your Product.

Insurance, like everything else, is constantly evolving. Laws change, technology advances and consumer needs expand. Ten years ago, we would have never fathomed we’d need an insurance solution for rideshares or

marijuana stores. Think outside the box when you see a new class of business instead of shutting it down when it doesn’t fall under your standard guidelines. Julia Vogel 99. Stick to Your Plan. Have a written sales plan and don’t cut corners executing it. Many people who are good “talkers” think they can cut corners and either “wing it” or don’t follow their plans. Sales is a process, and that process needs to be followed EVERY time. Jim Mitchell

100. Build Relationships.

then focus your energy on maximizing success there. This will help your reputation and hit ratio. Stephanie Moose Embrace Technology. Offer texting, electronic auto ID cards or claim reporting on a mobile app. Who says only captives can have these advantages? Diane Hipp Not About You. Ask questions with the intent of learning, not talking. Try getting through an entire sales call without talking about yourself. Eric Kuhen,

MarshBerry Take Stock. I encourage sales

professionals to frequently take STOCK. Stop. Take a look around. Opportunities are everywhere. Craft a plan to try something new. KISS — Keep It Simple, Stupid! Kitty Ambers,

AVYST.com Good Habits. Foster good hab-

its around time management and life-long learning. Kitty

Ambers, AVYST.com

INSURANCEJOURNAL.COM

Communicate. Implement consistent, informative and engaging communication. This keeps your business visible and at the top of your network’s mind. The next time the opportunity arises, your connections will know to go to you. Katie Curvel, We Insure Deepen Your Database. During these unprecedented times, getting prepared will pay huge benefits in the short to midterm. Damon Johnson, Westfield Branding. Brand is not a statement; it is a business culture in action. And it represents the actions associated with a business’s core values. Brand drives how to position a business in the market. Craig

Welsh, Westfield Cybersecurity Is a Necessity.

Insurance has always had a cybersecurity target on it’s back. The personally identifiable information (PII) in your comparative rater and

Go beyond just grinding out submissions with quotes or declines. Reach out to your agents throughout the year to check in on how they are doing and to see if there is anything you can help with. They might have something on their desk that they didn’t think would fit, but after chatting, you might be able to offer a solution, even if it is only to point them in the right direction.

team and make meaningful introductions. Be more than just their “insurance resource.”

Eric Kuhen, MarshBerry

Danielle Fitzsimmons 101. Be More. Help

your clients grow their business. Understand who they sell to, get to know their business development

agency management system is worth more than you think. Make sure you’re considering cybersecurity into your agency budget. Zach Weeks, ITC

Reduce Your Agency’s Security Risk. ID Federation’s survey of 400 independent agents found an agency must manage

between 35 and 7,200 passwords for workers to access business partners’ systems. Ask carriers to change that by telling them SignOn Once could provide fast, secure access to multiple partners.

Mike Foy, Foy Insurance Group Dealing With Change. We

know change is inevitable. What are you going to do when that change comes? Will you embrace it? Will you reject it? How you answer this question will determine your insurance legacy. J.D.

Babuder Online Reviews. Knock out

your competition by beating them in the online reviews game. Set up an internal program for account managers to solicit online reviews. Reward the team for attempts and track progress. You’ll see numbers increase, leaving your competition in the dust. Diane Hipp

AUGUST 24, 2020 INSURANCE JOURNAL | 37

Spotlight: Private Client

The Art of Collecting

During COVID-19 T

here is an art to buying art. Traditionally, for collectors, that typically included an in-person component at galleries, auction By Laura Doyle houses and fairs. However, with COVID-19 shuttering many doors, the sale of fine art has shifted from an in-person experience to a virtual one. Following the emergence of COVID-19, the art world underwent years of digital transformation in only three short months. Various industries are preparing to make long-term operational changes, and the art world is no exception. Though some would-be buyers remain wary, others are eager to add to their collections. Collecting art in the era of COVID requires a few cru-

38 | INSURANCE JOURNAL | AUGUST 24, 2020

cial considerations and it remains vital that insurance agents and brokers are equipped to help their clients navigate this shift. Below are three areas that should be top-of-mind for art collectors today.

The Economy and its Effect on Art

The uncertainty of the economy and its effect on the art market is likely weighing heavily on the minds of collectors. However, fluctuation in the art market is common, so it is important for clients to continue obtaining regular appraisals for existing collections. As part of this process, clients should seek a trusted partner who can help ensure existing and recently acquired pieces are properly appraised. Why? Appraisals help a collector understand fair-market value and retail-replacement value, the latter of

which is especially important for insurance purposes. But not all appraisers are equally qualified. It is therefore imperative that agents and brokers advise clients to consult one of the three major appraiser organizations: The Appraisers Association of America, American Society of Appraisers, or the International Society of Appraisers. In today’s socially distanced environment, these organizations are equipped to do much of the necessary work virtually using technology. Clients will also want to seek an appraiser who has experience with that particular kind of art as some specialize in different mediums and genres. Finally, advise clients to avoid appraisers who charge a fee based on the percentage of the item’s value — that could suggest a conflict of interest. INSURANCEJOURNAL.COM

Ensuring Provenance and Condition Virtually

Though some collectors are pausing further purchasing due to COVID-19, recent auctions and private sales suggest there is still strong interest among many buyers. While the medium through which a purchase is made might have changed, one thing has not — it continues to remain critical to seek provenance documents to understand ownership history. This helps to ensure that the seller has clear title, and the piece is what it is purported to be. Clients should also obtain a condition report to understand any structural or surface damage issues, and to identify any prior restoration treatment — a normal request made even more important when a client is unable to view a potential acquisition in person. Conservators can act as the client’s “eyes” by completing a detailed condition report with high resolution photos. These two points are especially vital the older the piece is.

While some clients might be familiar with a valuable articles policy, relatively new art collectors might not understand why a standard homeowners policy is not sufficient.

transporting and storing valuable artwork. This includes ensuring the transport vehicle has air ride systems to reduce the risk of damage from vibration, is temperature and humidity controlled, and has a security system in place (inclusive of two drivers). Once the piece has arrived safely, help clients understand how to keep their valuables safe. From a risk management perspective, this includes recommending they hire professional art installers and advising them against displaying artwork in high traffic areas of the home or underneath a bathroom, HVAC vent, sprinkler head or water-using appliance. Safeguarding clients’ new art acquisitions also involves an insurance discussion. While some clients might be familiar with a valuable articles policy, relatively new art collectors might not understand why a standard homeowners policy is not sufficient. Once the difference is recog-

nized, insurance agents and brokers should work with clients to find a valuable articles policy that offers worldwide protection with no deductible, automatic coverage for new items, and an agreed value feature with a market value enhancement. In the event of a covered total loss, clients will get 100% of the agreed value as a cash settlement, and if the market value of the item has increased, clients may benefit from inflation protection up to 150% of the itemized value, up to the policy limit. Though COVID-19 has greatly impacted the art community, this change presents a unique opportunity for agents and brokers to add additional value to collector clients. After all, as the art world becomes more digitized, it is likely that digital buying will soon become the new normal and will be here to stay. Doyle is vice president, art, jewelry and value collections manager at Chubb. She can be reached at: lmdoyle@chubb.com.

SUPERIOR INSURANCE COVERAGE

FOR WHAT YOUR CLIENTS VALUE MOST

If a client is concerned with the piece’s provenance, they should consult with a researcher to ensure there are no issues. They can also check the Art Recovery International database or the Art Loss Register, which tracks lost and stolen art.

The Post-Purchase Safeguards

Following the purchase of a piece, insurance advisors should advise clients as they normally would, emphasizing the transportation process, which is likely to be different than pre-pandemic. For example, depending on location, some art handlers may still be closed or experiencing a shortage in staff due to COVID-19. Given uncertainty, it is more important than ever that clients hire only reputable companies that specialize in INSURANCEJOURNAL.COM

ISA Private Client Group offers unique solutions for your clients’ homes, automobiles, collections, and more – backed by prompt, professional service and experienced, knowledgeable advisors. 800.622.8272 isapcg.com

AUGUST 24, 2020 INSURANCE JOURNAL | 39

Spotlight: Private Client How One Young Brokerage Founder Plans to Target a ‘Different’ High Net Worth Market By Elizabeth Blosfield

s a self-taught app developer, when Hayden Kopser sees a problem, he seeks to build a solution. So, when he observed during his time working at AIG that some brokerages weren’t adequately servicing high net worth accounts, he saw an opportunity to build an independent brokerage that focuses on the specialized coverage needs of affluent clients. “Some of the exposures that myself and most people in the country don’t ever have to think of or worry about are big needs for these folks,” he said. “And I found a lot of brokers may be focused on the middle market type business and then somehow one of these [accounts] fell into their laps and they just didn’t know how to properly handle it.” With this mission in mind, North Improvement LLC was born in April 2019. Kopser is co-founder and president of the boutique risk advisory and insurance brokerage based in New Jersey and New York City. The brokerage provides coverage solutions for home, auto, business, liability, condos and co-ops and art and jewelry, all geared toward the needs of high net worth clients. While it recently celebrated one year in business, the idea for the brokerage first crossed Kopser’s mind several years earlier when he was promoted to a senior underwriting role at AIG after initially being hired as a temporary employee in June 2014.

“All of the while, my goal really from when I became an underwriter and got inside the brokerages was to start my own,” he said. “I knew it wasn’t something I could do overnight, but that was in the back of my head, and it was really just a matter of when I could go ahead and do that.”

Hayden Kopser, North Improvement Co-Founder and President. Perhaps a familiar story to many in the industry, Kopser said he wasn’t initially seeking a career in insurance. “I was a self-taught app developer,” he said. “I put seven apps on the iPhone and iPad app stores and that was my intent, building a career around that.” After beginning at AIG as a temp, he liked the industry and the people he worked with so much that when he was offered a full-time position a few months later, he took the opportunity. “From my experience, the people in the industry are awesome,” he said. “There are probably few industries that are more relationship-driven than insurance.” Within four years of starting

40 | INSURANCE JOURNAL | AUGUST 24, 2020

at AIG, Kopser rose seven levels through the company to hold the dual titles of senior underwriter and national cyber expert. In these roles, he was responsible for servicing and growing a book of more than $21,000,000 in annual premiums while educating the internal workforce and brokers on cyber insurance, according to his bio on North Improvement’s website. He credits his time at AIG for helping him launch his insurance career as well as gain insight into how various brokerages operate. Founded in April 2019, North Improvement LLC is a boutique risk advisory and insurance brokerage based in New Jersey and New York City. “If I had only worked with the big shops, I would have only seen how maybe an Aon or a Marsh operates,” he said. “So I was able to see how those guys operated, but also how the mom and pops worked, how they structured their businesses, how they grew or didn’t grow depending on what their goals were.” This is when Kopser first noticed that some high net worth clients were being underserved by brokerages, especially among an aging insurance workforce, he said. In 2014, management consulting firm McKinsey & Co. reported that the average age of an insurance agent in the U.S. is 59. “When you’re 59, you’re starting and have already began to think about your retirement, so the last thing on your mind is growing,” Kopser said.

As a result, he said he noticed some older brokerage owners sitting on renewals, which provided an opportunity for someone hungry for growth to chase those accounts. On the carrier side, he said mergers and acquisitions of the last several years, as well as the formation of new companies, have led to a flourishing affluent market space. These two scenarios created the perfect opportunity for him to launch North Improvement, he said. “For me as a broker, there’s no better time to serve clients because I often have so many opportunities for them to get better coverage, to save money, to do any number of things,” he said. Although plenty of opportunity exists for young people in insurance, Kopser said, he also emphasized that founding an independent brokerage doesn’t come without its challenges. “When I say we started from zero, we may have even started from negative some number,” he said. After leaving AIG, Kopser needed to register North Improvement in each state in which it does business, which currently include New Jersey, New York, Connecticut, Florida, Georgia, Illinois, Colorado, New Hampshire, Virginia, Vermont, Rhode Island, Massachusetts, Maine and Pennsylvania. He also needed to set up its agency management system, as well as its accounting, technology and marketing platforms, he said. “A lot of this work was in the way of even being able to do the normal insurance work,” INSURANCEJOURNAL.COM

‘For me as a broker, there’s no better time to serve clients because I often have so many opportunities for them to get better coverage, to save money, to do any number of things.’

he said. “I knew the industry, I knew how to sell, I knew what the products were, but I didn’t know some of the tedious things behind the scenes…I think that the biggest challenge was really keeping my eyes on the prize of what we were intending to do and not getting bogged down in the frustration of, ‘Oh, I can’t immediately start selling insurance.’” Another, more unexpected challenge for the brokerage has been operating in its infancy during the COVID-19 pandemic, he said. “If this pandemic had hit six or seven months earlier, we’d be in a very different scenario probably financially,” he said. “You can never predict a pandemic, but you certainly need to be able to budget to financially ride out some type INSURANCEJOURNAL.COM

of storm.” Kopser said not only did he focus on creating a detailed budget and gaining startup capital early on, but capitalizing on his app development background has allowed him to focus on the brokerage’s digital presence. “Thankfully, we were started as a digital brokerage,” he said. “So now, we’re really getting back to basics and improving our digital presence, which I think in the long-run, it will be tremendously beneficial to do that.” North Improvement aims to serve clients using technology to simplify the quoting process and allow policyholders 24/7 digital access to policies, as well as give clients the ability to request changes, send claim information and access certif-

icates of insurance through its app and website. These early lessons from his own experience serve as some of Kopser’s advice for anyone seeking to start their own independent brokerage. “You need to have that startup capital,” he said. “You also want to have people available who are going to be willing to invest down the road.” It’s also important to gain experience first. “You could be a tremendous salesman, you could be good as a broker, a great negotiator, but unless you understand how things like rates are developed, how to read an insurance contract and how to be able to speak to how it’s going to react to certain claims scenarios, you’re never going to be able to provide the ultimate value to

your clients,” he said. North Improvement is continuing to build on its foundation, as well as build up its digital presence and improve on its technology, Kopser said. Its long-term plans are to seize the opportunities presented by an aging insurance workforce through agency acquisitions and an increased focus on millennial high net worth clients. “Maybe the future of wealth and the high net worth space looks different than in the past and the present,” he said. “You can already tell that it does in many ways.” However, at this stage, Kopser has one primary shortterm goal for the brokerage. “We’re one year old,” he said. “So grow, grow, grow. That’s it. We’re really looking to grow organically.”

AUGUST 24, 2020 INSURANCE JOURNAL | 41

My New Markets Transportation Underwriting

Market Detail: The Transportation

Underwriters at Worldwide Facilities (www.wwfi.com) specialize in commercial auto and represent top rated admitted and non-admitted carriers. New ventures or those with years of experience – risks large and small – are eligible. Target classes include: business auto; public livery; trucking, and more. Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted available States: All states Contact: Chris Garrison at cgarrison@ wwfi.com

Landslide, Mudslide, Mudflow in one DIC policy including Earthquake

Market Detail: WNC Insurance Services’

(www.wncfirst.com) program provides real coverage for both landslide and mudslide perils under one policy. Coverage features include: earthquake, landslide and flood coverage for homes and dwellings; primary, secondary, seasonal, vacant and renovation properties; standalone earthquake/landslide-only perils if required; coverage A limits from $75,000 to $2 million; low deductibles from 5%; payment options include credit card, ACH and escrow; competitive commission and quote price. Available limits: As needed Carrier: Tokio Marine Kiln (wholly owned parent company of WNC States: Ariz., Calif., Nev., and Ore. Contact: Scott Phillips at 949-352-4627 or e-mail: SPhillips@wncfirst.com

Automotive and Trucking Dealership Insurance and Risk Management

Market Detail: Dealer Risk Services (www.

dealerriskservices.com) offers coverage for the myriad of challenges automotive dealerships face. From protecting expensive inventory to dealing with the public, the risk profile can be extensive. Dealer Risk Services has more than 30 years of experience in program management, product development, risk management and education in this industry. DRS will 42 | INSURANCE JOURNAL | AUGUST 24, 2020

consider multiple risks, wheter it’s a single point placement or the creation of a captive for a multiple point dealer group. Available limits: As needed Carrier: Unable to disclose States: All states Contact: Steven Gibson at 321-733-6253 or e-mail: sgibson@dealerriskservices.com

Midlands Residential & Commercial Roofing Contractors Market Detail: Midlands Management

Corp.’s (www.midlandsmgt.com) insurance program directly addresses the needs of roofing contractors - commercial and residential. Coverage features include: non-admitted in all states; $1 million per occurrence/$2 million aggregate; three stories or less; no hot tar or torch down; minimum deductible: $1,000; commercial and residential contractors - exception California, no residential; safety & risk management services provided; contractors pollution liability; pro liability. Available limits: As needed Carrier: Unable to disclose, admitted States: All states except Colo. and N.Y. Contact: Mandee Wilson at 800-800-4007 or e-mail: mwilson@midman.com

Inland Marine - Combination

Market Detail: Shield Commercial Insurance Services (www.shieldins. net) offers big coverage for small tools. Enhanced combination inland marine coverage with limits up to $75,000. Featuring one-click blanket coverage that includes: small tools; equipment & job site property; installation floater; employee tools & clothing; contractor inland marine coverage to fit a full range of business needs, with limits from $5,000 to $75,000, and premiums from $225 to $750. Low, one-rate deductible of $1,000, with no coinsurance. Specialized program partnership with Nationwide. No statement of values necessary. Available limits: Minimum $5,000,

maximum $75,000

Carrier: Nationwide States: All states except Alaska, Colo.,

Dela., D.C., Ill., Maine, Mass., Mont., N.H., N.J., N.M., N.Y., R.I., Vt., and Wash. Contact: Robert Anderson at 760-345-9029 or e-mail: randerson@shieldins.net

Pawn Shop Insurance

Market Detail: All Risks Ltd., (www. allrisks.com) offers coverage for pawn shops, which face numerous financial risks, including the loss of product market value, inability to resell items, theft, and property damage. Coverage highlights include: nationwide coverage except Hawaii; many key coverage extensions available at no additional costs; minimum premium: package – $1,250. Available coverages include: general liability, property, products completed operations, employee benefits liability, hired & non-owned auto. Available limits: Minimum $1,250 Carrier: Unique/Stonegate Insurance Company States: All states except Hawaii Contact: All Risks, Ltd. at 877-428-8004 or e-mail: allrisksmnm@allrisks.com

This section brought to you by Insurance Journal's sister website:

www.mynewmarkets.com

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Idea Exchange: Ask the Insurance Recruiter COVID-19 Gives Agencies Time to Evaluate Hiring Methods

he original title for this article was “Post-COVID Recruiting” but I don’t know what “post” means anymore. It seems we’ve reached a reality that will extend farther than most of us predicted earlier this year. As we adjust to the new normal, recruiting has started to evolve within insurance agencies. Some changes are a direct response to COVID, i.e., new safety measures for in-person interviews. Others were long overdue, and the shutdown created space for new hiring strategies. I encourage you to spend time evaluating your agency’s hiring methods. Let the term “retail” in retail agency remind you that word-of-mouth is everything. That’s why the hiring process has the greatest ability to affect an agency’s success or failure. Insurance professionals are your prospective candidates. What they think about your brand, recruiting approach, engagement style and interview process means everything.

How to Evaluate Your Agency’s Hiring Methods Step One: Branding Reboot

Focus on attracting the right candidates not just any candidate. Insurance professionals with similar work experience, values and goals will engage with your brand. Social media is the largest platform to differentiate yourself from all other brokers. Start with these questions: 1. What percentage of our social media content centers on career opportunities? 2. How do applicants hear about us — job boards, employee referrals or direct solicitation? 3. How readily available is information about our benefits, compensation, job openings, team events and volunteerism? 4. What reviews have former and current employees posted on Google and Glassdoor about working at our company? INSURANCEJOURNAL.COM

Step Two: Sourcing Methods

Insurance producers tell me they receive five to 10 LinkedIn messages a week from recruiters. This inundation becomes numbing. You need a lot of tools in your toolbox. Ask the following questions: • Should LinkedIn be our primary method of direct solicitation (and for which positions)? • Do we monitor engagement and response rates? Are these impacted by the position of the person who sends a message or makes a call? • Can we enhance our employee referral program to garner more leads? • What insurance specific associations have social media boards to tout our employment opportunities? • Do we expect our producers to identify sales candidates when they attend local networking/social events?

Step Three: Interview Process

Few agencies need practice making a hire. You’ve been down this road before, but a well-worn path needs routine maintenance. Re-envision your interview process with the following goals in mind:

The Candidate Experience: • •

Did we personalize the interview experience for each applicant? Do they view us as trustworthy, transparent and informed?

• Did we communicate clearly, fulfill promises and meet deadlines? • Did we ask for feedback, even the applicants we didn’t hire?

Talent Management:

• Does HR conduct pre-interview prep sessions with hiring By Mary Newgard managers? • When and how do we gather critical information for EEOC purposes? • Do we have a continuous, sustainable recruiting plan, or do we only solicit candidates when there is a formal opening? • Do our employees participate in the hiring process? How can the new hiring process positively impact current employees (and retention rates)? • How frequently do offers need to be revised? What percentage of offers are declined, lead to a counteroffer or are reneged upon at a later date?

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

AUGUST 24, 2020 INSURANCE JOURNAL | 43

Idea Exchange: The Competitive Advantage Why the Shotgun Approach Is Nearing Obsoletion

the higher end of the 2% to 5% range. All things won’t remain the same, however, because competition will require carriers to cut rates and offer better coverages with some of those savings. This means carriers arriving late to the party will lose and they will lose terribly. Not only will their rates and coverages be less competitive, their growth will be cut as they lose clients, and the clients they keep may be the wrong clients. Adverse selection will likely occur. The market is already clearly showing how some carriers in some lines are accelerating their growth and profits simultaneously. While on the other hand, some carriers’ premiums and loss ratios are deteriorating simultaneously. If you are a distributor, would it make sense to know which carriers are likely to be the winners and which are likely to be the losers?

Shotgun Approach

n the one hand, the shotgun approach to selling insurance has an incredibly bright future with the By Chris Burand automated quoting systems available to the public (see Policygenius’ Series D round of $100 million, pitchbook.com). IT makes this approach less expensive and scalable. These automated systems are just too inexpensive, and humans are too expensive. The automated systems will win. Carriers that are still dependent — either partially or entirely — on humans are feeling intense pressure to improve their results. They have identified several important processes by which they can reduce their expense ratios. While much of the public focus is on how insurance will be sold to the public cheaply and directly and how a couple of innovative carriers have spent big money on behavioral economics, less focus has been applied to 44 | INSURANCE JOURNAL | AUGUST 24, 2020

the agent-carrier relationship. The smartest carriers with the best execution have already built full underwriting systems employing machine learning and can effectively pre-fill applications. When carriers pre-fill an application they have also pre-rated it (unless they’ve screwed something up). The expense savings and improved underwriting is probably worth between two and five percentage points. That may not sound like a lot, but it is a huge savings in the insurance carrier world. For a few carriers on the fence, three percentage points is quite possibly the difference between remaining viable and being sold. Pre-filling and pre-underwriting may almost certainly over time have a two-fold savings. The first and most obvious savings involves the automation, accuracy, time savings, etc. The second is that carriers will not need to pay agents to complete applications or upfront underwrite. The savings, all else being equal, will therefore likely be on

Along the lines of additional expense savings, the shotgun approach will fail relative to the winning carriers. They already possess software to track submissions, the quality of those submissions, whether the broker in its entirety provides quality submissions, and whether the broker submitting prospects that regularly meet their appetite and underwriting guidelines. The not so current carriers lack this software. The time savings, to the carriers who have the software is huge. They can decide then to accommodate a high cost, low return model by continuing to deal with shotgunners blocking markets or they can work with human distributors who focus on quality at a much lower cost and far higher ROI. By saving time, the carriers can also invest in more growth, better relationships, or simply pass on savings to insureds through lower premiums. The logic is pretty much rock solid, but most agents will ignore it. The model of shotgunning inadequate submissions is very expensive to agencies and carriers, and it is often indicative of incompetent agents and poor risks. If the account is a quality account handled by a competent agent, a quality submission will be made to no more than three known markets INSURANCEJOURNAL.COM

that are a good fit and where alignment will exist for all parties. As I stated at the beginning of this article, high cost low quality strategies will not work because the machines will win that war.

Quality Counter

For human agents, the only way to counter is with quality, quality, quality. Whether it be quality submissions and quotes, quality clients, or quality technical knowledge — likely all three. Quality is inherent to the winning model dependent on human sales and touches. It is very easy to scale selling the wrong coverages or inadequate coverages to the masses who treat all insurance as a commodity. If human agents are to win, humans need to play in the part of the market where quality actually matters. To that extent, coverage knowledge and sales ability all have to improve dramatically. The coverages being sold regularly, based on my E&O audits and teaching of coverage classes, are just too inadequate for the modern world. A large part of the commercial insurance world will benefit from an entirely different perspective of treating insurance as a supply chain factor. Coming from this angle, one applies a much more holistic approach. For consumers who can’t see past the insurance premium invoice, holistic

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approaches won’t work. Many producers, carriers, insurtechs and others can’t see very far into the future either, so these parties are all made for each other.

For human agents, the only way to counter is with quality, quality, quality. Those folks’ futures will be limited, at least for the human agents and carriers dependent on humans in a low-quality environment. Not only will computers sell the wrong coverages more cheaply, quality human organizations that combine quality analytics with old-fashioned discipline will likely be less expensive, too. For example, my consulting work shows that just old-fashioned discipline, especially while using my analytics can save 20% on processing costs. A few other old-fashioned factors I strongly recommend usually increase sales by about 10%. Combine that with the really fancy analytic systems using behavioral economics and sales increase at a far lower cost to carriers and distributors, perhaps by as much as an initial 40% cost savings and an additional 10% initial growth. In some lines, there exists interesting new risk management technology that can substantially reduce the probability of

liability claims and the severity of claims. This reduces agencies’ E&O exposure and carriers’ loss ratios. Therefore, if a carrier reduces its commission rates from 13% to 9% as some carriers are planning on doing, an agency operating in a high expense, shotgun environment will lose quickly because their commissions will decrease by 30%. They won’t survive. However, an agent who has achieved significant efficiency can operate profitably at 9%. Better yet, their compensation likely won’t even decrease to 9% because their carriers and clients are likely to pay more for their services. Their profit margins are likely to increase and as their competitors fall by the wayside, their growth will accelerate. How many will succeed, I do not know. But I doubt any of the high cost, low quality shotgun independent agents will survive. The odds are obvious. For anyone reading this article and thinking this forecast is theoretical, it is not. My firm has already thoroughly tested it in live, real-world agencies with every point advocated and their success far exceeded industry norms. Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-4853868. E-mail: chris@burand-associates.com.

AUGUST 24, 2020 INSURANCE JOURNAL | 45

Idea Exchange: High Net Worth How to Protect Your Base-Jumping, Crocodile-Wrestling, Shark-Diving, Volcano-Luging, Snake-Wrangling CEO

here’s a scene in the 2004 movie, Along Came Polly, when an unemployed actor named Sandy Lyle (Philip Seymour Hoffman) is stalking an executive suite like a big-game huntBy Sean McNiff er on the Serengeti. His prey is a conference table filled with dour-looking insurance executives. Yes, you know who you are. The mission: to convince these insurance bigwigs that they should agree to underwrite a policy to the tune of $50 million to protect his buddy, Leland Van Lew (Bryan Brown), a base-jumping, crocodile-wrestling, shark-diving, volcano-luging, snake-wrangling CEO. Van Lew makes Richard Branson look like an introvert. It’s a scenario that’s played out on a

regular basis in the C-Suite in companies throughout the world as traditional insurance can no longer keep up with the executive that craves danger and excitement along with his morning cup of coffee. And that excitement always appears to be reaching new levels of danger. Years ago, it was scary when the head of a company trekked up to the top of Mount Everest to bask in the serenity of the open air. Unfortunately, that journey might have been a cakewalk in comparison to what’s happening now. These days, that journey up to the summit is being shared by a virtual conga line of adventurers, all jockeying for a spot at the top of the world. We now witness lines stretching to the top, taking on Disney World-like proportions with people waiting up to two hours to partake in their little piece of history. The result? In 2019 alone, there were 11 deaths among those who undertook the journey.

And it’s not just falling off the mountain that can claim a life. German climber Ralf Dujmovits says that long queues at the summit can be hazardous because “when people have to wait in queues, they risk running short of oxygen — and may not have enough oxygen left on their way down.”

Good News-Bad News

It’s easy to focus the need for coverage on the daredevil CEO. But there are others who are equally as important, and equally as in danger. And the Richard Bransons of the world, those who need protection from outside forces, are equally as dangerous as a 26,200-foot summit. Herein lies the insurance world’s example of a good newsbad news scenario. The good news is indeed good. Yes, cancer remains a dreaded diagnosis, but America is showing great progress

against some of the most deadly forms, particularly lung cancer and the aggressive skin cancer, melanoma. Researchers have reported the largest-ever one-year decline in the U.S. cancer death rate, a drop of 2.2% between 2016 and 2017, according to the American Cancer Society. The rate has fallen resoundingly — nearly 30% — from 1991 to 2017, affecting nearly 3 million lives. When a key person falls victim to cancer (or other fatal diseases) it can wreak havoc on a company, especially if the victim is a rainmaker whose vision drives the company’s success. And now the “bad” news. The executive doesn’t necessarily have to pass in order for it to impact a business. Medical advances have helped slow the progress of this horrific disease. But what is the impact on a company if the CEO needs to be away from their desk to undergo two years of chemotherapy? And it doesn’t even have to be a high-profile company. Every case doesn’t have to spotlight a high-profile Fortune 500 company. There are many mid-level corporations where the key person is just as valuable to the company’s mission.

Brooks Bell, the 38-year-old founder & CEO of Brooks Bell, a consulting firm in Raleigh, N.C., was recently diagnosed with stage 3 colon cancer. Bell has stepped down from her duties as CEO to focus on her health. The consulting firm founded in 2003 was recently valued at over $8 mil-

lion. The firm specializes in optimization services for enterprise brands with offices in Raleigh and San Francisco. High-earning executives like Brooks Bell who have a minimum of 25 years left in their career are faced with a personal

continued on page 48

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AUGUST 24, 2020 INSURANCE JOURNAL | 47

Idea Exchange: High Net Worth continued from page 47 financial risk to their family’s future generational wealth and a loss of income due to a serious illness or injury. To help illustrate, let’s assume Bell earns $750,000/ year, the income exposure for the next 25 years is over $18 million (not including salary increases or bonuses). What does your client own that is worth $18 million and isn’t fully insured?

High Limit Protection

Traditional U.S. insurance markets can’t provide what Bell needs to make up for potential lost wealth. Fortunately, there are products such as high limit income protection and corporately owned key person disability that are available to fill the financial abyss that can occur in her lifestyle and protect her business should she be unable to perform her executive duties. True, many key persons are protected by life insurance, or at the very least a succession plan, should the key person pass away. But statistics show the risk of disability during the working years is significantly higher than the risk of death. A 45-year-old executive is three times more likely to suffer a disability lasting longer than 90 days than to die before the age of 65. It’s estimated less than 35% of the corporations that secure key person life insurance secure the corresponding key person disability coverage primarily because the company’s board or chief financial officer (CFO) is unaware a key person disability policy is available. In either circumstance, the corporation faces significant loss. Let’s look at another example of how things could potentially go south without the right protection in place. As a team, the CEO and CFO of a Texasbased hospital network with $4 billion in revenue were responsible for aggregating and integrating hospitals into their system. These two key players were instrumental in driving deals and visualizing the hospital network’s growth. The hospital board knew it was no secret that should one or both go down due to an illness or disabling injury, the hospital would suffer significant financial implications.

For these reasons, the hospital sought key person disability coverage for both the CEO and CFO. Fortunately, utilizing the unique capabilities of the Lloyd’s of London insurance market, the company procured a $30 million and a $15 million key person disability policy for the CEO and CFO respectively. The policies, payable to the hospital in a lump sum after 12 months, provided a financial cushion for the hospital board should the CEO and/or CFO be unable to perform their duties.

Evaluate Risk for High-Level Execs

Advisors need to evaluate the risk to key personnel and c-suite executives by looking at how they are leveraged against the success of the company, and the impact should they not be able to perform their duties. Ask yourself if that person left in the middle of the night, who could successfully run the company? And what would be the cost to replace that

person from outside if no one was in place in-house? Or are they irreplaceable? Another product worth investigating in this scenario is disability buy-sell coverage which, among other features, can protect private and public organizations from the risk of a career-ending disability to the owner by protecting the remaining partners and funding their financial obligations to repurchase the disabled owners’ equity shares in full. Case in point: five partners of a young successful Chicago investment firm valued at almost $40 million needed disability buy-sell coverage to fund their buy-sell agreement should either partner incur 18 months of disability. Each partner was in his 30s or 40s. The coverage fully funds the buy-out agreement in the event one of the five partners of the firm becomes permanently disabled, allowing the partners to leave their investments intact rather than drawing them down to fund their stock repurchase obligation. The

partners of the investment firm now had a real solution in place in the event one of them became disabled. Furthermore, they were able to market their succession plan, promoting the firm’s stability and establishing trust while courting new investors. But what happens when a short-term need arises for unique or catastrophic coverage to establish or supplement a company’s traditional key person life insurance should an accident befall someone resulting in death or disability? To have this happen to a key executive is a tragedy. To have it happen to five executives at the same time could be catastrophic. Picture five top executives at a privately-owned healthcare company boarding a plane bound for a private retreat in Costa Rica. The trip will also include activities such as ATV-riding, surfing and zip lining. That’s a lot of human capital sitting together at 35,000 feet. If one or all of the executives should perish or be dismembered, the

effects to the company would be catastrophic. Fortunately, all parties were able to secure a corporately-owned accidental death and accident only disability policy that covered the flights back and forth and all activities during the seven-day retreat. Sadly, sometimes protecting the risk is more personal, and accidents are a part of life for that particular individual. But it makes the need for coverage no less critical. Roy Halladay, an eight-time All-Star and two-time Cy Young Award-winning former pitcher of the Toronto Blue Jays and Philadelphia Phillies, died when the plane he was piloting crashed off the coast of the Gulf of Mexico in 2017. Roy Halladay’s story is a tragic reminder to others engaging in avocations like race car driving, piloting, scuba diving and mountain climbing. Accidental death insurance provides a fast and simple solution to protect your clients while participating in your high-risk passions. In our fast-passed society where events always seem to be happening at warp speed, your clients are at greater risk today than they have ever been. The protective bubble that traditional insurance offers will only hold up so long under the relentless onslaught that daily life offers, from the urge to scale sky-high summits to traveling to and through the world’s hot zones in

August 24, 2020 Oceanview Life and Annuity Company 1819 Wazee Street, Second Floor Denver, CO 80202 The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Life, Accident and Health Insurance in the Commonwealth of Massachusetts. 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.

order to close the next big business deal. This is when you need to be certain you have the right coverage in place before it is needed. McNiff is the vice president of business development and marketing at Exceptional Risk Advisors, Mahwah, N.J. Exceptional Risk Advisors is a Lloyd’s of London Coverholder, advising clients on high-limit specialty life, accident and disability products. Email: Sean. McNiff@exceptionalriskadvisors.com.

August 24, 2020 MMG Insurance Company 44 Maysville Road Presque Isle, ME 04769 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.

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AUGUST 24, 2020 INSURANCE JOURNAL | 49

Closing Quote Why Word of Mouth is Still a Key to Building Your Business

By Doug Coombs

‘Regular word-of-mouth referrals can easily make an independent insurance agency stronger.’

hink of the last time you received excellent service from someone who went above and beyond on your behalf. Did you tell someone else about it? If you did, you were participating in word-of-mouth marketing. Word-of-mouth marketing is not new. People have always talked to others about their experiences with products, services and brands. Today, whether it is through referrals or our social media channels, word of mouth is still an effective way for an agency to build its brand and grow its business.

Something to Talk About

Word-of-mouth marketing is based on the fact that people are more easily influenced by family members, friends and people they know and trust. More than talking about products or companies, they prefer to talk about their experiences

and interactions with those products and brands. They want to tell stories. So, every experience and interaction matters. If you only interact with clients once a year, such as at policy renewal, your clients may not see you as different than one of the large direct writers they can tap into online. That’s not much to talk about. But excellent customer service, building rapport and being a trusted advisor who offers value and good advice is something different. Build rapport with your clients by demonstrating you understand their needs and then finding appropriate solutions. This also means asking questions about changes in their lives such as marriage, home ownership, career changes, teenagers getting their driver’s licenses, etc. Word-of-mouth marketing is a conversation, and every conversation is an opportunity. An annual look at a client’s exposures can help work up a plan with pricing and policy differences. But that’s just the start. Establishing regular communications through techniques like quarterly calls, monthly newsletters or emails can differentiate you from the direct writers and give your clients valuable content they can share. Another good way to build relationships and create stories is to get involved and support your community, offering local sponsorships or volunteering your time. It shows you value your clients and prospects, and

50 | INSURANCE JOURNAL | AUGUST 24, 2020

by participating in community events, you can be in the public eye regularly. Having conversations with people who have a common interest builds trust and rapport, and it’s these valuable contact moments and touchpoint interactions that give people a story to tell.

Sharing and Referrals

Social media is a great tool in word-of-mouth efforts, giving the stories and opinions of people a faster and wider reach. Agencies can connect with clients and share helpful tips and tricks to protect their assets, all of which their clients can share again. And remember to be social: post relevant personal stories, photos and videos in the community, all of which your followers can like and share too. Other social media tactics include encouraging satisfied clients to leave testimonials and reviews on your channels and posting inspiring messages to motivate your audience to a call to action. Remember to

be consistent. Post weekly or bi-weekly at approximately the same time. Make it easy for clients to talk about you. For example, if you send an email newsletter, include links so readers can share it on their social media network or via email. And when you get positive feedback from your clients, ask them for a referral. If you fear that question will put them off, ask that they let their friends and family know that you are here for them as well. Regular word-of-mouth referrals can easily make an independent insurance agency stronger. Excellent client service and follow-through is rare. By making one client happy, they may promote your quality work and share your contact information by text or email. People choose independent insurance agents for their insurance expertise and exemplary client service and because they value knowing who they are buying from personally. Independent agents value their clients as well and can nurture these relationships further to last a lifetime. Coombs is the executive vice president and chief marketing officer at SIAA. Email: dougc@siaa.net.

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