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October 5, 2020 • Vol. 98 No. 19
Contents News & Markets
10
Idea Exchange
Special Report
16
More Firms Turning to Insurance Captives in Tightening Market: Marsh
Spotlight: Hotel Sector Sees Tough Times, High Rates in Insurance Market
Improved Underwriting in 2019: AM Best
Compensation Premiums Down 8% in First Half of 2020
14 P/C Mutual Insurers
18 Plaintiffs Win One, Lose
24 Closer Look: Workers’
27
The Role of Mentorships in Building a Strong Workforce
38
Remote Work: Protecting Against Employee Crime
40
One in COVID-19 BI Legal Fight
Overall Best Agency to Work For: RightSure
Is It Covered?: Homeowners Coverage Gaps? Here Are Some ‘Mower’
D&O Pressured But Insurers Big Enough to Handle: Fitch
GOLD Best Agency to Work For – East: William A. Smith & Son Insurance
The Wedge: The Most Expensive Data Breach You’ll Ever Have
GOLD Best Agency to Work For – Midwest: The Starr Group
Minding Your Business: To Improve Profitability and Sales, ‘Fire’ Your Small Commercial Accounts
19
31
32 33
34
GOLD Best Agency to Work For – South Central: G&G Independent Insurance
35
GOLD Best Agency to Work For – Southeast: SouthGroup Insurance Services
42 45
50
Closing Quote: Think You’re Not an Influencer? Think Again
36
GOLD Best Agency to Work For – West: Wood Gutmann& Bogart Insurance Brokers
Departments 8 Opening Note 6 | INSURANCE JOURNAL | OCTOBER 5, 2020
12 Declarations
12 Figures
22 People
20 Business Moves
44 My New Markets
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Coverage from
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RSG Transactional Risks Europe
SUITELIFE Underwriting Managers
Concord Specialty Risk
JEM Underwriting Managers
Ryan Re Underwriting Managers
Technical Risk Underwriters
CorRisk Solutions
LifeScienceRisk
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Trident Marine Managers
EmergIn Risk
PERse
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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
Value of Employee Benefits
T
he pandemic has brought to light the importance of having the right protections in place, especially those that protect life and health. According to The Hartford’s Future of Benefits Study some 40% of U.S. workers now say they will consider purchasing life insurance during their next open enrollment as a result of COVID-19. “The pandemic is shining new light on the benefit programs offered to employees through their workplace, revealing features they might have been overlooking,” said Jonathan Bennett, head of Group Benefits at The Hartford. “People are facing challenging circumstances – whether it is the shattering experience of losing a loved one or becoming sick themselves – and are now recognizing the value of financial protection provided by life insurance and other benefit options.” In particular, the survey uncovered a shift in attitudes among younger workers. Bennett said the insurer has been conducting research about millennials’ preferences for many years and has found that the youngest generation typically has the lowest participation rates in company-sponsored benefits so a shift in their thinking is encouraging. This latest study found that employees in their early twenties (generally considered Gen Z and younger millennials) are now more likely to upgrade or buy additional benefits offered by their company than they were before the pandemic began. While more workers overall showed interest in upgrading or purchasing additional benefits, the youngest workers indicated the most notable shifts in attitudes. The study, which polled U.S. workers and human resource benefit decision makers before the COVID-19 outbreak in the U.S. in early March 2020 and again in mid-June, found that employees say they would consider purchasing the following benefits during their next open enrollment because of COVID-19: • Life insurance: 40% • Short-term disability insurance: 30% • Long-term disability insurance: 29% • Critical illness insurance: 27% • Hospital indemnity insurance: 23%
‘While more workers overall showed interest in upgrading or purchasing additional benefits, the youngest workers indicated the most notable shifts in attitudes.’
The study’s first wave was fielded from Feb. 27 – March 13, 2020, just before the pandemic escalated in the U.S., and included 761 employers and 1,503 employees. The second wave was fielded from June 15 – June 30, 2020, and included 567 employers and 1,038 employees. The employers surveyed were HR human resource professionals who manage/decide employee benefits and employees surveyed were actively employed. The margin of error is employer +/- 4% and employee +/-3% at a 95% confidence level.
Andrea Wells Editor-in-Chief 8 | INSURANCE JOURNAL | OCTOBER 5, 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: Jessica Jeffress, Brian Lester, Phokham O’Connor, Joseph Petrelli, Jim Sams Columnists: Catherine Oak, Bill Schoeffler, Randy Schwantz, Bill Wilson
SALES / MARKETING
Chief Marketing Officer Julie Tinney | jtinney@insurancejournal.com West Sales Dena Kaplan | dkaplan@insurancejournal.com Romeo Valdez | rvaldez@insurancejournal.com South Central Sales Mindy Trammell | mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA, CT) Howard Simkin | hsimkin@insurancejournal.com Midwest Sales Lisa Whalen | (800) 897-9965 x180 East Sales (NY, PA and CT only) Dave Molchan | (800) 897-9965 x145 Sales & Marketing Coordinator Ashley Berg | aberg@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com Insurance Markets Manager Kristine Honey | khoney@insurancejournal.com Senior Strategist Pam Simpson | psimpson@insurancejournal.com Social Media Manager Ly Short | Lshort@insurancejournal.com Marketing Administrator Gayle Wells | gwells@insurancejournal.com Marketing Director Derence Walk | dwalk@insurancejournal.com
DESIGN / WEB / VIDEO
V.P. of Design Guy Boccia | gboccia@insurancejournal.com 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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Outside the US, call (847) 400-5951 Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2020 Wells Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Media Group, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Dept, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: Contact (800) 897-9965 x125 or visit insurancejournal.com/reprints
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Proceed with Safety® Workers’ Compensation: Excess • Large Deductible • Large Guaranteed Cost • Defense Base Act • TEXcess® Commercial Auto • Commercial General Liability • Umbrella / Excess Liability • Public Entity Liability Cyber Risk • Loss Portfolio Transfers • Self-Insurance Bonds
News & Markets More Firms Turning to Insurance Captives in Tightening Market: Marsh
M
ore organizations are using captives for insurance protection and financial flexibility in response to today’s risk and insurance landscape. In its 2020 captive report, insurance broker Marsh says that that tightening global insurance market conditions throughout 2019 led to higher captive utilization with steep premium volume growth in several coverage lines. For example, supply chain, business interruption, and contingent business interruption premiums written by Marshmanaged captives rose 283% on average in 2019. All-risk property premiums rose 64% on 10 | INSURANCE JOURNAL | OCTOBER 5, 2020
average, led by the energy and financial institutions sectors, which saw all-risk property premiums rise 151% and 104%, respectively. The trend towards greater captive use has continued in the first half of 2020 amid increasingly challenging insurance market conditions and the impact of the global COVID-19 pandemic, Marsh said. Marsh said it formed a record 76 new captive insurance companies from January through July this year, up over 200% compared to the same period in 2019. “While none of the new captives formed so far in 2020 specifically cover pandemic-related losses, organizations are using their captives to help navigate them
through the global COVID-19 pandemic,” according to Ellen Charnley, president of Marsh Captive Solutions. “Financial flexibility is one of the key advantages of owning captives, and since March 2020, Marsh has helped owners free $3 billion from their captives using short-term liquidity tactics, such as intercompany lending, to help them respond to cash-flow challenges brought on by the pandemic,” she said. Marsh’s 2020 Captive Landscape Report: Captives Offer Value in Uncertain Times report is based on approximately 1,240 Marsh-managed captives around the world that agreed to share their data on an anonymous and aggregated basis. INSURANCEJOURNAL.COM
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Figures
28 With the addition of nine new indictments, 28 people now have been charged in an extended federal probe into the staging of automobile accidents in Louisiana, according to U.S. Attorney Peter G. Strasser. The current indictments allege the nine defendants intentionally used vehicles to cause staged accidents with commercial carriers. They cover two separate incidents in which the victim trucking bus and insurance companies paid out approximately $707,500 for these two fraudulent claims.
$52 MILLION The amount in damages tenants who sued over “horrendous” living conditions at a Kansas City low-income housing development have been awarded by Jackson County Judge Joel Fehestock. The tenants sued KM-T.E.H. Realty 8 and Michael Fein last year for ignoring complaints about roach and rat infestations, raw sewage, a lack of air conditioning and heat, and apartment ceilings that had collapsed at the 169-unit Ruskin Place Apartments complex.
Declarations Utah Fires
“I guess the only positive thing is next year there won’t be anything left to burn.” — Rep. Brad Last, R-Hurricane, commenting on Utah’s wildfire season, which has broken records for the number of human-caused fires and the costs to taxpayers.
12 | INSURANCE JOURNAL | OCTOBER 5, 2020
Shareholder Value
“This transaction creates value for GAINSCO’s shareholders and is especially opportunistic for our GAINSCO team, agency base, policyholders and plans for future growth.” — GAINSCO Executive Chairman Bob Stallings, in a statement announcing that State Farm Mutual Automobile Insurance Co. is acquiring the Dallasbased nonstandard auto insurer in a $400 million cash transaction. It will be the first time in State Farm’s 98-year history that it has acquired an insurance company. The acquisition is expected to close in early 2021. Headquartered in Dallas, GAINSCO also has a regional office in Miami, Fla.
Kenosha Fires
“To put into context, that’s three years of fire loss for us in the span of about a week.” — Kenosha, Wisc., Fire Chief Charles Leipzig says damage from the unrest over the police shooting of Jacob Blake has now topped $11 million. He told the Police and Fire Commission the record fire loss came in the days following the Aug. 23 shooting of Blake, who was left partially paralyzed by the gunshots to his back.
INSURANCEJOURNAL.COM
$230,000 Is how much an Everett, Wash., construction company with a history of safety violations is facing in fines after inspections at two Seattle job sites reportedly found numerous problems that placed workers at significant risk. Chilos Builders LLC was recently cited for eight safety violations, including exposing employees to fall hazards while working two and three stories above ground.
$166,000 An administrative law judge with the independent Occupational Safety and Health Review Commission has upheld penalties from the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) against Timberline Hardwood Floors LLC, a custom hardwood-flooring manufacturer that falsely claimed to have corrected previously cited hazards. The company was ordered to pay $166,265.
Fossil Fuel Underwriting
“The insurance industry is underwriting and investing in fossil fuels which we now know are the key drivers of climate change. … As insurance customers, we are therefore expressing our desire for insurance coverage in the U.S. market that isn’t tied to supporting fossil fuels and actively supports renewable energy.” — In a letter, a group of about 60 American businesses have urged their insurers to stop providing coverage to and investing in fossil fuel producers. The companies, including outdoor-gear producer Patagonia and ice-cream maker Ben & Jerry’s, a unit of Unilever, called on U.S. insurers to drop ties to coal, oil and gas.
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An American Tragedy
“New York will continue to aggressively investigate the bad actors that caused the opioid crisis – an American tragedy that has taken too many lives and caused irrevocable harm to communities in our state and across the country.” — New York Governor Andrew Cuomo said in a statement regarding The New York State Department of Financial Services’ (DFS) August 20 move to file charges and initiate administrative proceedings against Teva Pharmaceutical Industries Ltd. and its subsidiaries, as well as Allergan PLC and its subsidiary Allergan Finance LLC, in connection with the opioid crisis. These charges are the third set to be filed in DFS’ ongoing investigation into the entities that created and perpetuated the opioid crisis.
Safety Practices Failure
“The Jackson County Park Marina did not observe several existing safety best practices and guidelines created for and used by the marina industry.” — Investigators for the National Transportation Safety Board, in a recent report that examined a Jan. 27 Alabama marina fire. Eight people were killed by the fire, which also did more than $500,000 in damage. In the report, investigators said the fire was accidentally started but the marina’s “limited fire safety practices” contributed to the severity of the fire and loss of life. The cause of the fire could not be determined but it was noted to have started near an electrical panel.
OCTOBER 5, 2020 INSURANCE JOURNAL | 13
News & Markets P/C Mutual Insurers Improved Underwriting in 2019: AM Best Top 10 Hold 72% of Market: AM Best
D
espite a highly competitive property/casualty insurance industry and pressures on operating performance, U.S. mutual insurance companies reported continued improvement in underwriting performance in 2019 and managed to grow surplus. According to the AM Best Market Segment Report, “U.S. Mutuals’ Strong Balance Sheets at the Fore Amid Pandemic,” net premiums written (NPW) for AM Best-rated mutuals grew by a modest 2.6% in 2019. Although the pace has slowed in recent years, AM Best noted that its rated mutuals have seen NPW growth every year since 2010. Net income for these carriers decreased more than 16% in 2019 to $16.8 billion, following a strong 2018 when net income tripled due to lower losses from catastrophic events. AM Best said the lower net income for 2019 was largely attributable to a 7.2% reduction in net investment income and a 32.9% reduction in realized capital gains. According to AM Best, the 10 largest
Top 10 Mutual P/C Carriers (2019 NPW, $ millions)
1. State Farm ($65,100) 2. Liberty Mutual ($32,268) 3. USAA Group ($22,981) 4. Nationwide Group ($17,993) 5. Farmers Insurance ($14,494) 6. American Family ($11,842) 7. Auto-Owners Group ($8,586) 8. Erie Group ($7,478) 9. Auto Club Group ($4,547) 10. CSAA Group ($4,031)
Source: AM Best Market Segment Report, U.S. Mutuals’ Strong Balance Sheets at the Fore Amid Pandemic
14 | INSURANCE JOURNAL | OCTOBER 5, 2020
rated mutuals account for approximately 72% of NPW in 2019, and the top 25, for nearly 83%. The mutual segment’s policyholders’ surplus increased by 9.6% in 2019 to $349.3 billion, driven by nearly $21 billion in unrealized capital gains, as compared with $14 billion in unrealized capital losses in 2018. In contrast to 2016 and 2017, relatively fewer severe weather-related events occurred in 2018 and 2019, which helped lead to an improvement in the mutual segment’s incurred loss ratio. However, despite an improvement in rate adequacy and underwriting results, the segment incurred modest underwriting losses in 2018 and 2019. The segment recorded a combined ratio of 101.0 in 2019, unchanged from 2018. The median policyholders’ surplus size of these fated companies is $169 million, and the median five-year average combined ratio is 97.5%, indicators of the overall health and stability of the organizations’ balance sheets. Approximately 65% wrote more than half of their business in one state in 2019, while one line of business accounted for more than half of NPW for 42% of them. The P/C insurance companies in this AM Best report are mutuals, insurance cooperatives, and reciprocal exchanges, which
include risk retention groups and state funds, and comprised 276 U.S.-domiciled rating units as of December 31, 2019. Over the past 10 years, AM Best-rated mutuals have held approximately 40% of the P/C industry’s market share. The ratings outlook for 80% of these firms in the mutual segment is stable. Of this cohort, the median policyholders’ surplus size is $169 million, and the median five-year average combined ratio is 97.5%, indicators of the overall health and stability of the organizations’ balance sheets. AM Best found that, as is the case for the rest of the industry, COVID-19 is having an impact on the mutual insurance segment— from commercial multi-peril exposure to business interruption claims to extensive reorganization of employee office arrangements to substantial premium refunds — as the fundamentals of insured exposure have been radically altered. A considerable increase in policyholder dividends in first-half 2020 over the same period in 2019 partially reflects these premium refunds, although some may be reported as other underwriting expense, or even as reduced premiums. AM Best said the impact of COVID-19 is likely to extend beyond third-quarter 2020 results. INSURANCEJOURNAL.COM
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Spotlight: Hotels & Motels Hotel Sector Sees Tough Times, High Rates in Insurance Market By Andrea Wells
T
he hotel industry was one of the first industries affected when COVID-19 forced the travel industry into standstill, and many predict it will also be one of the last industries to recover. Even as travel has ticked up slightly since the beginning days of the pandemic, the hotel industry remains on the brink. According to a recent report by the American Hotel and Lodging Association ( AHLA), nearly one-third of hotels have less than half of their typical, pre-crisis staff working full time, and some are considering additional lay-offs. The AHLA conducted the survey of hotel industry owners, operators, and employees from September 14-16, with more than 1,000 respondents. Key findings include the following: • 68% have less than half of
their typical, pre-crisis staff working full time currently. • Half of hotel owners said that they are in danger of foreclosure by their commercial real estate debt lenders due to COVID-19. • Without further governmental assistance, 74% of respondents said they would be forced into further layoffs. • More than two-thirds of hotels (67%) report that they will only be able to last six more months at current projected revenue and occupancy levels absent any further relief.
Despite small gains in employment in May and June driven largely by restaurants and bars reopening, the leisure and hospitality sector is still down 4.3 million jobs since February, according to the “Industries at a Glance: Leisure and Hospitality” report by the U.S. Bureau of Labor Statistics at the end of July. The AHLA survey revealed that only 37% of hotels have been able to bring back at least half of their full-time employees, while 36% have been unable to bring back any furloughed or laid off staff. A study by
McKinsey & Co., “Hospitality and COVID-19: How long until ‘no vacancy’ for US hotels?,” suggests that the hotel industry’s recovery to pre-COVID-19 levels could take until 2023 — or longer. “Hotels face the prospect of a long recovery,” the report concluded. “Over the coming months and years, properties’ circumstances will vary based on a number of factors, including chain scale, location, and demand profile.” The insurance industry is trying to figure out how it can best serve this uncertain world of hospitality. “Our industry demands a lot of attention in multiple areas unlike years ago when coverage and price where the main issues to think about,” John Welty, president of SUITELIFE Underwriting Managers, a division of
Ryan Specialty Group, told Insurance Journal. “Whether you are in the high-end space of hospitality, the middle space, or the economy space, each are impacted greatly in today’s world.” Like other areas of the property/casualty insurance market, the hotel sector has been experiencing an uptick in rates due to catastrophe losses and social inflation trends in recent years. That is leading hotels to seek rate relief through higher self-insured retentions. “We’re seeing a lot of the insureds ask for increased deductibles, either wind and hail deductibles sometimes taking those from 2% to 3%, to 4% or 5%, or increasing their other peril deductible for fire, from say $2,500, $5,000, or $10,000 to $25,000, trying to keep their rates lower and mitigate their losses on their own,” said Chris McGovern, senior vice president, National Specialty Programs, at AllRisks. Some insurance carriers are exiting the market or restricting underwriting criteria, Welty added. “In our experience, many carriers are no longer writing hospitality, or they are extremely restrictive,” according to Welty. “We are seeing many carriers pull back by being more restrictive on writing new opportunities as well as a few which have stopped writing hospitality accounts due to the pandemic.” Welty says this has been compounded by ongoing wildfires on the West Coast. Rates are rising in most lines of coverage. “The hospitality industry is seeing double-digit rate increases in property, general liability and umbrella,” he said. INSURANCEJOURNAL.COM
Welty added that the excess umbrella market is very limited offering lower limits with increased prices. The hospitality directors and officers liability market, and employment professional liability market, are also seeing limited capacity with double-digit or higher rate increases. Welty says some hotels might find assistance from returned premiums. “If a policy is auditable, some carriers are waiting until the audit to provide a return premium while other carriers are doing midterm audits to provide some relief,” Welty said. If policies are written as non-auditable, as in surplus lines, carriers have taken many different stances from an account by account basis or on their entire portfolio, he added. “A best practice for a hotel to take is to be in regular and consistent communication with their broker/agent or carrier,” Welty said. “Every carrier and even every branch within a carrier can be different.” In response to COVID, Welty
has seen carriers add a communicable disease exclusion to general liability policies. While pandemic insurance has always been available in the marketplace, the cost has been expensive, he said. “With the COIVD-19 pandemic, we have seen costs continue to increase with substantial deductibles being applied.” In the coming months, Welty advises hotel insurance specialists to focus on the post-COVID hotel customer experience. “Brokers need to think about the post-pandemic ‘guest experience.’ What does that look like and how does insurance play a role in this new normal?” That means extra attention should be given to how agents communicate with their partners. Communication with their carriers, insureds and prospects is critical, he said. Welty added that he has been encouraging brokers and their hotel clients to review the vacancy provision of property policy and decide if a vacancy permit endorsement is
necessary during this time.
Outlook
The good news for hotels is that travel seems to be picking up, albeit slowly. Welty said travel activity has picked up more so in the VRBO (Vacation Rentals by Owner) sector. Travelers are still leery traveling to hotels, especially when some geographical areas of the U.S. continue restrictions on opening local restaurants and bars. “Travel seems to be better in those states which are more open than others.” Going forward, travelers will need assurances that the hotel is clean, sanitized and practicing social distancing, he added. “We have seen an uptick in ‘contactless hotels’ where technology is used rather than a front desk clerk to check you in to the hotel.” But pre-COVID traveling days aren’t likely to return for some time. “We feel that the hotel industry will be slow to get back to pre-COVID with many hotels predicting that 2022 should be back normalcy.”
OCTOBER 5, 2020 INSURANCE JOURNAL | 17
News & Markets Plaintiffs Win One, Lose One in COVID-19 BI Legal Fight By Jim Sams
A
federal judge in Florida late last month denied an insurer’s petition to dismiss a COVID-19 business-interruption lawsuit, while a federal magistrate judge in California threw out a similar claim. Both lawsuits were filed by plaintiffs whose policies excluded coverage for any damage caused by virus. The California judge said arguments that the exclusion didn’t apply were “nonsense,” while the Florida judge found similar arguments plausible. The disparate opinions continue a split among state and federal judges across the nation as to whether business income lost because of COVID-19 closure orders is recoverable through “all risk” commercial property insurance policies. Federal courts in New York, Washington D.C., Texas and Michigan and a state court in Michigan have dismissed COVID-19 business-interruption lawsuits. A federal court in Kansas City, Mo., has allowed three such lawsuits to proceed, as has a state court judge in New Jersey. The latest decision comes from a lawsuit filed by Urogynecology Specialist of Florida against Sentinel Insurance Co. for breach of contract after the carrier denied the medical clinic’s claim for lost income during a statewide closure order. Sentinel said the policy that excluded coverage for “damage caused directly or indirectly by the presence,
growth, proliferation, spread, or any activity of fungi, wet rot, dry rot, bacteria or virus.” U.S. District Judge Anne C. Conway, with the Middle District of Florida in Orlando, found two problems with the insurer’s argument. She said in an order issued last month that the section of the policy that referenced the virus exclusion stated that it modified certain coverage forms, but those forms weren’t provided to the court. More importantly perhaps, Conway said the insurer did not prove that the virus exclusion was “not unambiguous.” “Denying coverage for losses stemming from COVID-19 … does not logically align with the grouping of the virus exclusion with other pollutants such that the policy necessarily anticipated and intended to deny coverage for these kinds of business losses,” her order states. Federal Magistrate Judge Jacqueline Scott Corley, on the other hand, found no ambiguity in the insurance policy that the Hartford Financial Services Group had issued to the Franklin European Wax Center
18 | INSURANCE JOURNAL | OCTOBER 5, 2020
in Fresno, Calif. The policy excluded any damage caused by virus. The wax center argued that it lost income because of the government closure orders, not because of the virus. Corley’s order summed up her opinion about that in one word: “Nonsense.” The magistrate judge noted that the plaintiff’s complaint states, “the coronavirus is proliferating onto virtually every surface and object in, on, and around commercial premises such as that belonging to EWC Fresno, and thereby causing direct physical damage.” Curiously, in another Northern California District case, a federal judge suggested that a pleading that claimed the novel coronavirus was physically on a property may have a better chance of getting a hearing. U.S. District Court Judge Jon S. Tigar on Sept. 14 granted a motion by Travelers Casualty Insurance Co. of America to dismiss a business-interruption lawsuit filed by Mudpie, a children’s store in San Francisco. But Tigar dismissed the case without prejudice, meaning
Mudpie can file again after amending its pleading. Tigar wrote in his order that he was demising the lawsuit because Mudpie did not allege that any “physical force” had caused it to close the store and suffer a loss of income. Tigar said it “is doubtful” that Mudpie will be able to establish a “direct physical loss” of property, but granted the plaintiff leave to amend its complaint anyway. “The court also recognizes, however, that the law concerning business interruption coverage linked to the COVID-19 pandemic is very much in development,” the order states. Instead of amending its complaint, Mudpie on filed an appeal with the U.S. 9th Circuit Court of Appeals in late September. Michael Levine, a policyholders’ attorney for Hunton Andrews Kurth in Washington D.C., said the state of play so far shows suggests that judges are looking for allegations that some tangible, physical change caused the business-income loss. “The one commonality that we’ve seen so far, the courts are looking for some physical manifestation,” he said. “They are saying the closure orders alone aren’t enough and they are saying they want to see some allegation that COVID-19 has at least affected the property.” Levine said those early dismissal orders, however, may be overturned on appeal. Sams is editor of ClaimsJournal.com. INSURANCEJOURNAL.COM
News & Markets D&O Pressured But Insurers Big Enough to Handle: Fitch Woodruff Sawyer Explores D&O Litigation and Insureds’ Understanding
A
s claims related to the economic fallout from the pandemic emerge in the U.S. directors and officers (D&O) liability insurance segment, insurers can expect the claims to take several years to pay out and underwriting losses to continue over the near term, according to Fitch Ratings. However, there is limited risk to ratings of individual D&O insurers as a result of pandemic-related claims, Fitch said, adding that carriers with significant D&O premiums are larger, diversified entities. Also, recent pricing changes are supportive of improving profitability post-pandemic, which will depend on the path of the economic recovery. According to Fitch, P/C insurers with exposure to D&O underwriting are typically larger multiline insurers that can absorb or offset potential losses with results from other segments. It is usually offered as part of a suite of product offerings, representing approximately 1% of total industry direct premiums. At the end of 2019, the 10 largest D&O writers held a combined 67% share of all direct statutory premiums, and only 37 individual organizations wrote greater than $10 million of D&O direct premiums. Underwriting performance for the segment has been hurt by many years of competitive pricing and ongoing increases INSURANCEJOURNAL.COM
in multi-million dollar jury verdicts and claims settlements, as well as rising defense-related costs. Fitch estimates D&O has reported statutory underwriting losses for three consecutive years from 2017 through 2019, including a 106.6% direct combined ratio in 2019. Despite renewal rate pricing skyrocketing, results remain under pressure with the direct incurred loss ratio rising to 62% in the first half of this year, the highest mid-year level in 10 years. The Council of Insurance Agents & Brokers commercial market survey indicates that D&O renewal rates moved 16.8% in 2020 versus a 4.3% increase in 2019. Rates on excess coverage layers are increasing at a higher rate. “Direct written premiums increased by 22.5% for the first half compared to the same period last year, with “pricing momentum poised to propel revenue growth through 2021,” Fitch said. “Changes in underwriters’ risk appetite are leading them to raise insured retentions and lowering policy limits offered that are creating challenges in placing excess layers and larger programs.” The pandemic represents a potential for D&O claims, including allegations against leadership of companies experiencing shareholder value declines or insolvencies from the economic fallout of the pandemic. Organizations that failed to protect
In 2019, insurance agency Woodruff Sawyer forecasted the rise of D&O premiums—the first increase in nearly 10 years—and predicted it would continue on into 2020 and beyond. Today, the broker says that that rise shows no sign of decline as securities class action lawsuits and record settlements, corporate bankruptcies, and COVID-19 continue to impact an already difficult market. To add additional pressure, insurers are watching as over 600 unresolved securities class action court cases wind their way through the judicial system, Woodruff Sawyer says. Woodruff Sawyer’s survey of underwriters reveals that underwriters are concerned that their insureds are not fully aware of the high cost of litigation, with 83% of underwriters saying they believe that companies underestimate the current risk. “That doesn’t bode well for insurance renewals for the riskiest clients—recently IPO’d biotech and technology companies—whose volatile share prices often make them targets for shareholder litigation,” the agency says. The agency shares its outlook in its D&O Looking Ahead Guide 2021 at https:// woodruffsawyer.com/do-notebook/. do-looking-ahead-guide-2021.
employees or customers from exposure to the virus or serious illness could also face claims as could businesses creating protective products or vaccines. In recent years, D&O claims have also emerged in areas including cyber events and employment practices matters where alleged negligence or poor governance practices affected corporate reputations or generated material financial losses. These can lead to more allegations of a lack of management oversight of information system security and lax risk management. Class action filings related to cryptocurrencies are also a recent phenomenon. OCTOBER 5, 2020 INSURANCE JOURNAL | 19
Business Moves
National
OneBeacon, International Bond & Marine Brokerage
OneBeacon Insurance Group said it has acquired International Bond & Marine Brokerage Ltd. (IB&M), a privately held brokerage and risk management firm specializing in the international trade markets. IB&M will retain its brand and operate as a standalone brokerage, offering customs bonds, cargo, liability and other insurance coverages through its current select markets and now additionally through OneBeacon. IB&M, headed by Kevin Tattam, president, is based in Hoboken, N.J., and has an office in Manhattan Beach, Calif. IB&M offers custom bonds, ATA carnet bonds, ocean transportation bonds; marine, E&O/freight legal liability, and business insurance; and a technology platform for logistics companies to manage their transactions. OneBeacon Insurance Group is the marketing brand for the insurance company subsidiaries of Intact Insurance Group USA LLC, a member of Intact Financial Corporation, the largest provider of property and casualty insurance in Canada, and a specialty insurance carrier in North America. Coverages for OneBeacon Insurance Group are underwritten by the following companies: Atlantic Specialty Insurance Co.; Homeland Insurance Company of New York; Homeland Insurance Company of Delaware; OBI America Insurance Co.; OBI National Insurance Co. or The Guarantee 20 | INSURANCE JOURNAL | OCTOBER 5, 2020
Company of North America USA.
East
World Insurance Associates, Airways International Insurance Services
World Insurance Associates LLC acquired Airways International Insurance Services LLC of Mickelton, N.J., on May 1, 2020. Terms of the transaction were not disclosed. Alex Morris founded Airways International Insurance Services in 2006 after more than 30 years of experience in the aerospace Industry. AIIS offers a range of products and services for the aviation and marine industries in addition to sound professional advice and contract reviews. Alex and the AIIS team are licensed pilots with more than 65 combined years of industry and professional underwriting experience. 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.
NFP, Rose & Kiernan
NFP, an insurance broker and consultant that provides property and casualty, corporate benefits, retirement and individual solutions, has acquired Rose & Kiernan Inc. in a transaction that closed effective August 1, 2020. Rose & Kiernan, based in Albany, N.Y., is a multidisciplinary insurance broker with capabilities in property and
casualty, surety and employee benefits. Founded in 1869, the firm provides a variety of solutions, including insurance, employee benefits and risk management, to businesses, individuals and public and private organizations primarily in New York state and New England. The firm was named as one of Insurance Journal’s Top 100 Independent Agencies in August 2019. John Murray, president, chairman and CEO of Rose & Kiernan, will continue to lead the team and its operations in Albany and report to Bill Austin, president of the Northeast region, following the transaction. NFP is an insurance broker and consultant providing specialized property and casualty, corporate benefits, retirement and individual solutions through its licensed subsidiaries and affiliates.
Midwest
Associated Agencies, Bensman Risk Management, Bensman Associates
Associated Agencies Inc., a privately held insurance and risk management firm based in Rolling Meadows, Ill., has acquired Bensman Risk Management Inc. and Bensman Associates Ltd., a Bannockburn, Ill.-based insurance, risk management and strategic planning firm led by CEO Bob Bensman. Associated and its individual insurance business, Auto & Home, will work with The Bensman Group to further develop a high-net-worth individual insurance and risk advisory practice. Bob Bensman began The Bensman Group in 1976. Through the years, the firm has grown from being primarily focused on life insurance to a multi-discipline financial services firm, including individual and corporate services. Bensman will continue as CEO and founder of Bensman Risk Management Inc. and Bensman Associates Ltd., a division of Associated Insurance and Risk Management Advisors.
Keystone Agency Investors, Midwest Risk Partners
Keystone Agency Investors, a new strategic partnership formed by Keystone INSURANCEJOURNAL.COM
Insurers Group and Bain Capital Credit, has acquired four St. Louis, Missouri-based insurance agencies, which together will form Midwest Risk Partners LLC, a custom insurance platform serving the greater St. Louis area. Midwest Risk Partners is comprised of former partner agencies including St. Charles Insurance Group LLC, Jerome L. Howe Inc., Eagle Insurance Agency LLC, and Bowersox Insurance Agency Company. Combined, each agency’s product suite includes insurance and risk management services for businesses including workers’ compensation, claim and risk management programs, health and wellness programs, benefits, and financial services, as well as a full line of personal insurance products. Midwest Risk Partners marks KAI’s fourth acquisition since launching in July 2020.
South Central State Farm, GAINSCO
State Farm Mutual Automobile Insurance Co. is acquiring Dallas-based nonstandard auto insurer, GAINSCO, in a $400 million cash transaction. It will be the first time in State Farm’s 98-year history that it has acquired an insurance company, the company said. The acquisition, which is expected to close in early 2021, is subject to the approval of GAINSCO’s shareholders, the expiration or termination of the applicable waiting period under the Hart-ScottRodino Antitrust Improvements Act of 1976, obtaining regulatory approvals, and satisfaction of other customary closing conditions. GAINSCO, founded in 1978, specializes in minimum-limits personal auto coverage and actively distributes its nonstandard personal auto products through independent retail agents in Arizona, Florida, Georgia, New Mexico, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, Ohio and Alabama. Its insurance operations are conducted through its subsidiary, MGA Insurance Company Inc., a Texas corporation. Headquartered in Dallas, GAINSCO also has a regional office in Miami, Florida. INSURANCEJOURNAL.COM
Under the merger agreement, upon closing State Farm Mutual will acquire 100% GAINSCO Inc. stock; GAINSCO shareholders will receive approximately $107.38 per share in cash. GAINSCO will continue to operate as a separate company and brand with continued focus on its current objectives. Over time, the parties expect to provide State Farm agents the opportunity to distribute GAINSCO products in addition to State Farm products and services. Barclays Capital Inc. was the financial adviser to State Farm, and Mayer Brown LLP served as legal counsel for State Farm. Sherman & Company was the financial adviser to GAINSCO, and Hunton Andrews Kurth LLP served as legal counsel for GAINSCO.
Hub International, Hollis Companies, Employee Benefits Corp., Todd & Associates
Chicago-based global insurance brokerage Hub International Limited has acquired the assets of Hollis Companies L.L.C. and The Employee Benefits Corp., located in Metairie, Louisiana. In a separate transaction, Hub acquired the assets of Todd & Associates LLC, an independent insurance agency located in Lake Charles, Louisiana. TEBC and Hollis Companies are an employee benefits consulting firm providing benefits solutions, workplace-wellness plans and guidance on compliance issues to clients. Michael Hollis, president and CEO of TEBC and Hollis Companies, will join Hub Gulf South and report to Hub Gulf South President Shaun Norris. Todd & Associates is an independently owned agency with more than 100 years of combined experience in the insurance industry. The agency provides insurance products and services tailored to clients’ specific risk needs, including medical professional liability insurance. Hub said this expertise in healthcare supports its specialty practices by complementing and strengthening Hub’s existing capabilities. Louis Todd, owner of Todd & Associates,
along with his team, will join Hub Gulf South.
Southeast
Brown & Brown, Frank E. Neal & Co.
Brown & Brown of Tennessee Inc., a subsidiary of Brown & Brown Inc., has acquired substantially all of the assets of the Frank E. Neal & Co. Agency, according to an announcement from J. Scott Penny, chief acquisitions officer of Brown & Brown Inc., and Wink, Mark and Brent Neal, the owners of Frank E. Neal & Co. Frank E. Neal & Co. has provided commercial, surety, personal and employee benefits insurance options to entrepreneurs, businesses and individuals throughout the Southeast region of the United States for more than 45 years. The agency has specialized in providing surety bonds and commercial insurance products within the construction industry. The Frank E. Neal team will join with the existing Brown & Brown of Tennessee team in Nashville. Brown & Brown of Tennessee operates under local leadership of Ryan Rothrock and regional leadership of John Esposito. Brown & Brown Inc. is an insurance brokerage firm, providing risk management to individuals and businesses.
West
Arthur J. Gallagher & Co., Erin P. Collins & Associates
Arthur J. Gallagher & Co. has acquired Kingman, Ariz.-based Erin P. Collins & Associates Inc. Erin Collins and his associates will continue to operate from their current locations under the direction of Scott Gregory, head of Gallagher’s Southwest region employee benefits consulting and brokerage operations. ECA is an employee benefits and workplace well-being consultant serving clients throughout Arizona from offices in Kingman and Phoenix. Arthur J. Gallagher is an insurance brokerage, risk management and consulting services firm headquartered in Rolling Meadows, Ill. OCTOBER 5, 2020 INSURANCE JOURNAL | 21
People National
Venture Insurance Programs, a West Chester,
Pa.-based national insurance program administrator, has launched Community Care, a new insurance program for community and social services, including nonprofits and for-profits. In conjunction with the launch, Venture has brought on former GuideOne Social Services Underwriter Erin Crawford Peterson to be its new practice leader. Community Care will be written on an admitted and non-admitted basis through three carriers rated “A” (Excellent) or better by A.M. Best. Community Care provides liability, property, auto, inland marine, crime and umbrella coverage for lines of business that include community services, counseling and treatment centers, food and nutrition services, residential facilities and shelters, sports and recreation, education, arts and culture, animal-related and associations and clubs. Prior to joining Venture Programs, Peterson served as nonprofit and human service commercial underwriter for GuideOne Insurance in Des Moines, Iowa. She has also served as senior underwriter in the human services department for Philadelphia Insurance Companies.
East
EverQuote Inc., an online
insurance marketplace, has added Michael Aldous as vice president of Insurance Data and Product Services. Aldous joins EverQuote from Liberty Mutual Insurance, where he led teams responsible for the development and launch of digital accident and health
products. Aldous also led Liberty’s Voluntary Benefits Underwriting Organization. Throughout his 15-year tenure with Liberty, Aldous worked with numerous products at all stages in the insurance product lifecycle. According to Lee Bossio, executive vice president of Insurance Data and Product Services, Aldous’ experience at Liberty Mutual will be beneficial as it continues to invest in further supporting the growth of its marketplace offerings.
ABD Insurance and Financial Services has named Deirdre Finn as senior vice
president of the company’s Executive Risk Solutions (ERS) National Practice. Finn will be based out of ABD’s NYC offices. In this role, Finn will oversee the company’s management liability insurance lines of business, which include directors and officers liability, employment practices liability and fiduciary liability, and will join the Executive Steering Committee. Finn joins ABD after nearly a decade at Beazley where, as West Coast manager, she oversaw premium growth. Her previous positions include senior vice president and West Coast manager at Navigators Management Company, as well as similar roles at Axcelera Specialty Risk and Reliance National Insurance Company. ABD’s ERS practice offers management liability professionals, certified risk managers attorneys and claims advocacy. ABD Insurance and Financial Services provides risk management, insurance brokerage, human resources and retirement consulting services.
22 | INSURANCE JOURNAL | OCTOBER 5, 2020
Miniter Group has named Donald Marthey as
Don Marthey
vice president of Business Strategy and Tracking Operations. In this role, Marthey will oversee the strategic direction of Miniter’s Borrower-CentricSM insurance tracking operations. He joined Miniter as a vice president of sales in 2019 and helped contract lenders in the Western states, including Alaska and Hawaii. Earlier this year, Marthey was called upon to transition to operations and assist with the growth of the tracking operation. He began his career as operations section manager at National City Bank. He then moved to American Modern Insurance Group, where he spent the next 21 years. During this time, he took on roles with increasing responsibility, culminating in a position as strategic planning director. Before joining Miniter Group, Marthey was the director of operations for Seattle Specialty. Miniter Group is a Norwell, Mass.-based provider of collateral risk transfer solutions to the lending industry, providing blanket and lender-placed insurance solutions to more than 550 lenders in 45 states.
Southeast The
Tennessee Department of Commerce Joshua Clark & Insurance (TDCI) has hired Joshua Clark as its new director of Business Development for the Insurance Division. As the director of Business
Development for the Insurance Division, Clark will focus on expanding the use of captives as a risk management option for businesses. Clark most recently served as a consultant for EXL Loss Control. As part of his new role, Clark will establish objectives with the Tennessee Captive Insurance Association to help them promote captive insurance within the state. Tennessee currently has more than 203 licensed captive insurance companies and 471 approved cell companies for a total of 674 risk-bearing entities, compared to 652 at the end of 2019.
CRC Group
has promoted Mississippibased Claire Willis as CRC Claire Willis Group’s national Personal Lines Practice leader. The move comes as part of the company’s increased focus on the personal lines marketplace, according to the company. Willis joined CRC Group in 2006 as a personal lines underwriter. Since joining CRC, she has managed a large personal lines book of business and worked closely with personal lines carriers. As the Personal Lines Practice leader, Willis will work to grow CRC Group’s personal lines footprint nationwide and will represent CRC Group with key markets to assist with its expansion and gain more market support. CRC Group CEO Dave Obenauer said the company has invested in new personal lines talent across the country over the past 12 months while at the same time investing in technology to establish an INSURANCEJOURNAL.COM
online personal lines agent portal that is scheduled to rollout this fall.
USG Insurance Services Inc.,
a national Mark Morgan wholesaler and managing general agency, has hired Mark Morgan as a producer and broker in Tampa, Fla. Morgan has 19 years of industry experience, most recently serving as director of New Business Development for CAT Program at Community Association Underwriters in Tampa. At USG, Morgan will focus on the development of retail agents and brokerage property markets as part of the National Brokerage Property division, specifically specializing in complex CAT driven property accounts. USG said the move was part of its plan to continue expanding its Brokerage Property team nationally.
South Central
Dallas-based Risk Point Underwriters LLC named Scott A. Hoy as executive vice president for the specialty auto dealer underwriting unit. Hoy will be responsible for driving growth and serving customers through independent agents across its Risk Point programs for dealer open lot and garage package for franchised auto, motorcycle, RV and heavy truck dealerships. Hoy’s leadership background in these industries and specialization comes from 25 years of experience at Victor, Marsh & McLennan’s managing general agency business, SeaFire Insurance Services, a managing general underwriter specializing in INSURANCEJOURNAL.COM
automotive dealerships, and as the national vice president of sales for Zurich and Universal Underwriters Group.
Western Security Surplus (WSS), a part of XPT Partners, hired industry veteran Suzy Baird as senior broker and
underwriter with Houston Surplus Lines (HSL), a division of WSS. Baird is based in Houston. Most recently, Baird held the position of production underwriter with Southwest Risk in Houston. Her previous experience includes serving as assistant vice president and branch manager with MJ Hall & Company in its California and Alaska offices. She began her career with AIG, later followed by Bowes & Company. WSS is headquartered in Plano, Texas, with employees also located in California.
Midwest
Chicago, Ill.-based HUB International Ltd. added Geoff Hatfield and Scott Webb to the Central region executive team. Hatfield joined as chief strategy officer and Webb as chief sales officer - new roles responsible for driving growth in the Central region. Both will be based in Chicago. Both were regional sales leaders at Aon and then held national sales leadership roles at Gallagher. HUB is an insurance brokerage providing property and casualty, life and health, employee benefits, investment and risk management products and services. Westfield Center, Ohiobased property and casualty insurance company, Westfield, added Jennifer Palmieri as
chief people officer. With more than 20 years Jennifer Palmieri of human resources leadership experience, Palmieri is leading all aspects of Westfield’s talent management strategy, people related practices and the human resources team. She serves as a leader on the Enterprise Leadership Team, driving an integration between Westfield’s business strategies and talent management capabilities with a focus on building diversity across the workforce and ensuring an inclusive culture. Prior to joining Westfield, Palmieri spent nearly 18 years at Cigna, a global health services company, where she most recently served as vice president of HR with the global technology team. Early in her career at a boutique HR consulting firm, Palmieri delivered talent solutions across a variety of companies with a focus on the technology sector. St. Louis, Missouri-based
POWERS Insurance Linsey Morris & Risk Management added Linsey Morris as com-
mercial lines account manager. Morris has more than 15 years of experience in the insurance industry. In this position, she will be responsible for the ongoing management of commercial clients, retaining new and renewal clients and assisting the company’s producers in order to enhance business development. Morris previously worked for POWERS in its personal lines department for five years.
Prior to rejoining POWERS, she worked at various local insurance agencies in different capacities.
West
The Liberty Company Insurance Brokers has named Kip Tryon as vice president of
marketing and branding. Tryon has been involved with Liberty’s Kip Tryon outreach marketing efforts, and after four years in roles of increasing responsibility, he will now oversee a team dedicated to promoting Liberty. Separately, The Liberty Company Insurance Brokers has also named Sean Borchardt as a partner in the Woodland Hills, Calif., office. Borchardt has more than 15 years of experience. He Sean Borchardt previously has held positions at Gallagher, Relations Insurance and Tolman & Wiker. The Liberty Company Insurance Brokers is an independently owned broker with offices throughout the U.S. Irvine, Calif.-based Burnham
Benefits Insurance Services Inc. has named Chris Martin as chief
growth officer. Martin has 30 years of experience in the healthcare Chris Martin and insurance industries. Prior to joining Burnham Benefits, he was chief business development officer at Crossover Health. Burnham Benefits is a privately held employee benefits consulting and brokerage firm.
OCTOBER 5, 2020 INSURANCE JOURNAL | 23
Closer Look: Workers' Compensation COVID-19: No One Avoids the Impact
Workers’ Compensation Premiums Down 8% in First Half of 2020
P
rior to discussing the results of our review of aggregate By Joseph L. Petrelli workers’ compensation insurance written in the U.S. during the first half of 2020 versus the first half of 2019, permit me to offer Demotech’s perspective on the impact of COVID-19 on the insurers comprising the property/casualty and life and health insurance industries. COVID-19 has been, and may continue to be, solely an earnings event. With more than 4,000 insurers, P/C and life/health, reporting data to the National Association of Insurance Commissioners, the number of carriers whose solvency is threatened by the COVID-19 is immaterial. As to direct written premium in workers’ compensation, in the aggregate, our mid-year to mid-year comparison of workers’ compensation direct
premium written indicated an overall decrease of approximately 8% was reported in the U.S. for the first six months of 2020 versus the same period in 2019. Although several members of the Top 25 carriers, those with the largest dollar volume of workers’ compensation business volume, were able to resist that trend a bit, the Top 25 saw a period-to-period direct premium written decrease of 5%. This occurred despite several members of the Top 25 reporting increased direct premium written or holding their own: Zurich American Insurance (0%), Insurance Company of the West (32%), American Zurich Insurance (3%), Old Republic Insurance (0%), ACE American Insurance (12%), Arch Insurance (5%), Indemnity Insurance Company of North America (9%), and National Union Fire Insurance Company of Pittsburgh, PA (13%). With the Top 25 writers of workers’ compensation outperforming the aggregate sector
24 | INSURANCE JOURNAL | OCTOBER 5, 2020
on retention of direct written premium, the premium written by insurers ranking number 26 through 689 declined by 9.4%. The dollar decline of workers’ compensation premium volume in the sector from YTD June 30, 2019, to YTD June 30, 2020, was a decrease of nearly $2.3 billion, or 8% overall. Putting this situation in perspective, direct written premiums reported at mid-year 2019 were nearly $28.5 billion, an all-time high for a mid-year report. To get additional perspective on the growth that led to that record in June 2019, the dollar amount of direct written premium on June 30, 2010, was $18.8 billion. Yet, based upon our review of second quarter 2020 data, year-end 2020 workers’ compensation direct written premiums may result in the second consecutive yearend over year-end decline. Clearly, with a premium base consisting of payroll by classification, growth in workers’ compensation premium volume between the June 30, 2020, report, and the
upcoming year-end 2020 report is highly dependent on changes in employment levels. Given the relative impact of COVID-19 by state, in part, year-end 2020 direct premium written will depend on the breadth, depth and scope of the re-openings of the economies in the states that have not yet fully done so. State by state unemployment results have been and remain dependent on the degree to which economies are re-opening. This should be based upon the degree to which COVID-19 related personal and business restrictions were in place through June 30 yet abated or removed over the period July 1 through Dec. 31. The influence of several populous states with established centers of finance and commerce will shape the relative workers’ compensation direct premium written level for the second half of 2020. Concurrently, the ability of the larger states that initiated re-openings earlier than other states will shape the final yearend 2020 results for workers’ INSURANCEJOURNAL.COM
compensation insurance. Similarly, the behavior and response of the employers impacted by COVID-19 will continue to shape the recovery of the workers’ compensation insurance sector. Having reduced payrolls, employers have also reduced their cost of worker’s compensation coverage. If the effort of employees who were laid off, terminated or separated is not apparent and is not missed, why would those employers be incentivized to add back the additional payroll and the related cost of the employees’ workers’ compensation insurance? Concurrently, with travel restrictions in place and interaction with clients and prospects being redefined and working
from home a new normal, might employers reclassify personnel from higher cost classes to lower cost classes, thereby reducing the cost of workers’ compensation even though payroll and head count increase. Although this article has focused on the year-to-year premium volume changes for workers’ compensation, permit me a few random thoughts on other challenges that COVID-19 has created. Return to work programs and light duty efforts have been impacted, whether those that were in place prior to COVID, and those that might have been put in place had COVID not manifested itself. Less than six months after experiencing one of the stron-
gest economies in U.S. history, bankruptcy, downsizing and right-sizing are under serious discussion by employers. COVID’s impact on healthcare providers, i.e., hospitals, employer health plans, Medicaid, Medicare, etc., also impacts patients requiring medical or wage replacement benefits associated with workers’ compensation. The ultimate impact and influence of “working from home” has not yet been seen. Vocational training needs to be reconfigured to reflect the “Beyond COVID economy.” In conclusion, measuring and reporting year-to-year dollar changes in workers’ compensation insurance is an arithmetic exercise. Assessing the impact
of the emergence of the one in 100- year pandemic known as COVID-19 on workers’ compensation insurance will be directly correlated with the changes that COVID-19 has on employment, payrolls and employers. Stakeholders should be comforted that the insurance industry, due to the statutory accounting principles enforced by regulators, is uniquely positioned to respond to the impact of COVID-19, known or unknown. I state again: COVID is an earnings event, not a solvency event. Petrelli is the president and co-founder of Demotech Inc., a Columbus, Ohio-based financial analysis firm. Website: www.demotech.com.
continued on page 26 INSURANCEJOURNAL.COM
OCTOBER 5, 2020 INSURANCE JOURNAL | 25
Closer Look: Workers' Compensation continued from page 25
Industry Workers’ Compensation Direct Premium Written (DPW) Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
DPW Through 6/30 $20,618,828,533 $22,484,181,779 $24,324,470,907 $25,587,654,011 $26,871,226,504 $27,471,995,741 $27,750,183,279 $27,851,664,718 $28,474,143,475 $26,177,784,452
Growth (Loss) $1,804,093,421 $1,865,353,246 $1,840,289,128 $1,263,183,104 $1,283,572,493 $600,769,237 $278,187,538 $101,481,439 $622,478,757 ($2,296,359,023)
% Change 9.6% 9.0% 8.2% 5.2% 5.0% 2.2% 1.0% 0.4% 2.2% -8.1%
DPW Through 12/31 $39,743,363,214 $43,755,244,979 $46,981,116,563 $49,245,124,906 $51,241,191,346 $52,253,269,883 $52,414,653,131 $55,727,832,353 $54,246,197,003 --
Growth (Loss) $3,473,588,572 $4,011,881,765 $3,225,871,584 $2,264,008,343 $1,996,066,440 $1,012,078,537 $161,383,248 $3,313,179,222 ($1,481,635,350) --
% Change 9.6% 10.1% 7.4% 4.8% 4.1% 2.0% 0.3% 6.3% -2.7% --
Data Source: The National Association of Insurance Commissioners (NAIC), Kansas City, Mo., by permission. Information derived from an S&P Global Market Intelligence product. The NAIC and S&P Global Market Intelligence do not endorse any analysis or conclusion based upon the use of this data. This exhibit is based upon the initial reporting of second quarter 2020 data, estimated to be more than 95 percent of the companies that report quarterly. It excludes several large state funds (e.g. California, New York, Pennsylvania) which have not always reported second quarter data.
Top 25 Workers' Compensation Writers Based Upon Dollar Amount of Direct Premium Written (000s omitted)
Rank Company Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Zurich American Insurance Company Travelers Property Casualty Company of America Insurance Company of the West State Compensation Insurance Fund Texas Mutual Insurance Company American Zurich Insurance Company Technology Insurance Company Inc. Old Republic Insurance Company ACE American Insurance Company Accident Fund Insurance Company of America LM Insurance Corporation Arch Insurance Company New Hampshire Insurance Company Twin City Fire Insurance Company Starr Indemnity & Liability Company NorGUARD Insurance Company Charter Oak Fire Insurance Company Pinnacol Assurance Federal Insurance Company Phoenix Insurance Company Indemnity Insurance Company of North America Wesco Insurance Company National Union Fire Insurance Company of Pittsburgh, Pa. Travelers Indemnity Company of America Zenith Insurance Company
Top 25 Total Next 25 Total All Others (639 Companies for 2020) Total (689 Companies for 2020)
Second Quarter 2020 (YTD) $870,906 $634,040 $558,763 $529,813 $497,364 $445,152 $381,329 $366,998 $362,797 $333,470 $288,101 $274,227 $270,411 $268,099 $264,904 $261,941 $253,128 $247,406 $241,211 $237,790 $234,080 $229,432 $223,454 $221,357 $219,050
$8,715,222 $4,191,822 $13,270,741 $26,177,784
Second Quarter 2019 (YTD) $870,893 $700,660 $424,501 $597,569 $565,141 $431,740 $417,771 $366,521 $324,811 $350,487 $321,363 $260,259 $322,641 $291,121 $267,557 $322,150 $279,423 $296,906 $309,979 $247,327 $215,661 $308,641 $196,910 $240,244 $271,771
$9,202,048 $4,596,467 $14,675,629 $28,474,143
% Change 0.00% -9.51% 31.63% -11.34% -11.99% 3.11% -8.72% 0.13% 11.69% -4.86% -10.35% 5.37% -16.19% -7.91% -0.99% -18.69% -9.41% -16.67% -22.18% -3.86% 8.54% -25.66% 13.48% -7.86% -19.40%
-5.29% -8.80% -9.57% -8.06%
Data Source: The National Association of Insurance Commissioners (NAIC), Kansas City, Mo., by permission. Information derived from an S&P Global Market Intelligence product. The NAIC and S&P Global Market Intelligence do not endorse any analysis or conclusion based upon the use of this data. This exhibit is based upon the initial reporting of second quarter 2020 data, estimated to be more than 95 percent of the companies that report quarterly. These figures exclude premiums for several large state funds (e.g. California, New York, Pennsylvania) that have not always reported second quarter data.
26 | INSURANCE JOURNAL | OCTOBER 5, 2020
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News & Markets Steep Drop in California Workers’ Comp IMRs in First Half of 2020
T
he number of independent medical reviews used to resolve California workers’ compensation medical disputes fell sharply in the first half of 2020 as the pandemic took a toll on the state’s economy with statewide unemployment spiking to a record level and workers' comp claim volume on the decline. That’s according to the latest tally by the California Workers Compensation Institute. Under California law, every workers’ comp claims administrator must have a utilization review program to assure that the care provided to injured workers is supported by clinical evidence outlined in medical guidelines adopted by the state. Most treatment requests are approved by UR, but in 2012, state lawmakers adopted IMR to give injured workers a chance to get an independent medical opinion on treatment requests that UR physicians
deny or modify. IMR took effect for all claims in 2013, and CWCI began monitoring IMR activity in 2014. In its latest review, the institute tallied 70,273 IMR decision letters issued in the first half of 2020 in response to applications submitted to the state compared with 85,318 letters issued in the first six months of 2019 – that’s down 17.6%. Once again, about 40% of the letters included decisions on multiple services, but with the decline in letter volume, the total number of primary service decisions fell by 19.3% from 148,069 in the first half of 2019 to 119,514 in the first half of 2020, according to CWCI.
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While IMR volume was down, a review of IMR outcomes in the first half of this year saw little change. “After reviewing the medical records and other information provided to support a disputed treatment request, IMR doctors upheld the UR physician’s modification or denial of the service in 88.8% of the IMRs in the first half of this year compared to the 88.2% uphold rate from 2019,” the CWCI stated. As has been the case since IMR was first adopted, prescription drug requests accounted for the largest share of the January through June IMR decisions (39.8%), though that percentage was down from nearly half of all IMR disputes prior to the state’s adoption of the opioid and chronic pain treatment guidelines at the end of 2017 and the Medical Treatment Utilization Schedule Prescription Drug Formulary in January 2018, according to CWCI. Even with the guidelines and the formulary, opioids still accounted for 29.2% of the 2020 prescription drug IMRs – down only slightly from 30.9% in 2019. The top 10% of physicians identified in the IMR decision letters issued in the 12 months ending in June 2020 accounted for 83% of the disputed service requests during that period, while the top 1% accounted for 40% of the disputed service requests. Additional analyses on the IMR data has been published in a bulletin, which CWCI members and subscribers will find under the Communications tab on the CWCI website. INSURANCEJOURNAL.COM
News & Markets
California Governor Planning to Ban Sale of New Gas Vehicles in 15 Years By Adam Beam
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alifornia will ban the sale of new gasoline-powered passenger cars and trucks in 15 years, Gov. Gavin Newsom announced in late September, establishing a timeline in the nation’s most populous state that could force U.S. automakers to shift their zero-emission efforts into overdrive. The plan won’t stop people from owning gas-powered cars or selling them on the used car market. But in 2035, it would end the sale of all new such vehicles in the state of nearly 40 million people that accounts for more than one out of every 10 new cars sold in the U.S. California would be the first state with such a mandate while at least 15 other countries have already made similar commitments, including Germany, France and Norway. Newsom used the hood of a red, electric-powered Ford Mustang Mach-E to sign an executive order directing state regulators to develop new regulations to meet the deadline. He urged Californians to “pull away from the gas pumps” and encouraged other states to join California for the good of the environment and public health. “If you want to reduce asthma, if you want to mitigate the rise of sea level, if you want to mitigate a loss of ice sheets around the globe, then this is a policy for other states to follow,” Newsom said. While environmental groups cheered the announcement, the oil industry W4 | INSURANCE JOURNAL | OCTOBER 5, 2020
panned it and the automakers’ industry group sought a middle ground, saying it’s committed to increasing zero-emission vehicles but through cooperation among governments and businesses, not by mandates. Meanwhile, White House spokesman Judd Deere said flatly: “President Trump won’t stand for it.” And Larry Kudlow, Trump’s economic adviser, labeled it a “very extreme” position that he doesn’t think other states will follow. Democratic presidential nominee Joe Biden’s campaign didn’t comment directly on Newsom’s plan. But spokesman Matt Hill said Biden believes electric vehicles can create “good-paying union jobs, dominate a fast-growing market worldwide, and meet the demands of the climate crisis.” Tailpipe exhaust from cars, pickups, tractor-trailer rigs and other transportation are the single largest source of air pollution, and California has by far the most cars on the road than any other state. In 2017, the federal government said California emitted 266.5 million tons of carbon dioxide from the burning of petroleum. That’s about the same as the total emissions from Egypt, which has 2.5 times the population. Newsom says his order will reduce greenhouse gas emissions by 35%. But he stressed the benefits went beyond the environment, saying electric cars and trucks are “the next big global industry and California wants to dominate it.”
California is already home to 34 electric vehicle manufacturers – including Tesla, the world’s top-selling maker – and accounts for about half of all electric vehicle sales in the U.S. Some auto industry analysts warned the timeline could be too fast for technology to catch up to customer’s expectations. Battery life and manufacturing costs are still issues that haven’t been resolved, said IHS Markit principal analyst Stephanie Brinley, who studies the North and South American auto markets. Tesla recently announced plans for cheaper batteries with higher energy density, but they are well into the future, she said. “Even if you get a battery like Tesla is talking about, it’s going to take time and money to get there,” Brinley said. The oil and gas industry, meanwhile, criticized Newsom for holding a news conference in front of nearly $200,000 worth of electric cars “as he told Californians that their reliable and affordable cars and trucks would soon be unwelcome in our state.” “Big and bold ideas are only better if they are affordable for us all,” said Cathy Reheis-Boyd, president of the Western States Petroleum Association. “Our industry and the energy we provide will be the part of any solution.” About a dozen states follow California’s lead on auto emissions standards that are more restrictive than federal rules. If those states follow suit on zero-emission vehicles, it could have a huge impact on the U.S. automobile industry. “Newsom can’t claim climate leadership while handing out permits to oil companies to drill and frack,” said Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute. “He has the power to protect Californians from oil industry pollution, and he needs to use it, not pass the buck.” Associated Press writers Tom Krisher in Detroit, Ellen Knickmeyer in Oklahoma City and Seth Borenstein and Kevin Freking in Washington, D.C., in contributed to this report. Copyright 2020 Associated Press. INSURANCEJOURNAL.COM
Idea Exchange: Mentors The Role of Mentorships in Building a Strong Workforce
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entorships are a key component of a comprehensive employee development program. Whether through By Phokham O'Connor a formal program or more organic and casual interactions, insurance organizations have much to gain from encouraging and facilitating mentoring relationships across the organization. By embracing mentorships, insurance organizations are able to increase employee satisfaction and advance leadership development, among many other benefits.
Recognizing the Organizational Value
The organizational impact of mentorship INSURANCEJOURNAL.COM
programs spans far and wide. At the individual level, mentees are able to gain insight and guidance on various challenges or opportunities they are facing. For instance, individuals may seek out mentors to help them successfully transition through a promotion or departmental move, take on additional responsibilities or pursue professional aspirations. Often, individuals may want to hone specific skills or build competencies vital to their longer term career growth. In turn, mentors will have an opportunity to give back by sharing their experiences with others who may be facing situations similar to ones they’ve overcome. They’ll have an opportunity to connect with individuals they may not otherwise interact with, hear fresh perspectives and
gain personal fulfillment by helping others achieve their goals. Additionally, the managers of those being mentored will have engaged and motivated employees, who are actively working toward honing their skills and building additional competencies. These individuals will help build bridges among teams and foster interdepartmental relationships outside of their day-to-day interactions, which can pay dividends in the long run. And the overall organization will build a well-rounded workforce and confident future leaders who are wellequipped to take on new challenges.
Mentorships at All Professional Stages While mentoring relationships often
continued on page 28
OCTOBER 5, 2020 INSURANCE JOURNAL | 27
Idea Exchange: Mentors continued from page 27 occur between a more junior mentee and more seasoned mentor, it’s important to note that mentorships are not just for young professionals. Mentorships are a valuable tool throughout one’s entire professional career, and their dynamics will shift based on current career stages and needs. Even the most accomplished individuals will benefit from the perspectives of trusted advisors. Peer mentorships and reverse mentorships are also common and have their own unique sets of benefits, such as better connecting professionals with younger generations and providing perspective on new tools and technologies. Individuals who are in the same stages of their careers are able to provide support and guidance to one another at the peer level, as they are likely going through similar situations and can directly relate to issues at hand. There’s no limit to the number of mentoring relationships a person might participate in, depending on their career stage, aspirations and current needs.
Building a Successful Relationship
Successful mentoring relationships take work and dedication. Both parties must be committed to the process and make themselves available for regular meetings. To be most impactful, these relationships must be built on trust and honesty; both parties should feel comfortable sharing
openly and honestly and value an outside perspective. Acknowledge the role of the mentor is to inspire, guide and advise, not to simply solve a problem or tell someone what they should do.
‘There’s no limit to the number of mentoring relationships a person might participate in, depending on their career stage, aspirations and current needs.’ Additionally, it’s important to set clear expectations around what the mentee would like to get out of the experience. Make sure the mentee has clear goals, and the person in the mentor role is the best individual to help them on their journey. For instance, if an individual wants to build a specific soft skill, such as presenting more effectively in front of groups or building deeper professional relationships, someone who is skilled in those areas would be best suited to provide support. If an individual’s goal is to secure a leadership position, a successful leader who understands how to build strategic relationships and navigate the corporate landscape may be an ideal match. In many cases, it’s helpful to determine the parameters of the relationship upfront. How often will the mentor and mentee meet? How will the mentee be held
accountable? What is the timeframe for the mentoring relationship? While mentoring conversations may have previously taken place in person, they’re just as impactful in the remote environment. It’s still possible to share coffee over a morning Zoom conversation or schedule a 30-minute virtual lunch meeting. Face-to-face interactions will always be important; try to leverage video conferencing platforms as much as possible. This enables you to read facial expressions and body language to connect on a more meaningful level.
Getting Started
It can be intimidating to create a mentorship program. However, the best thing to do is just start. Even if your initial launch is informal, with loose parameters, employees will benefit. As the program evolves, solicit feedback from both mentors and mentees, learn from your mistakes and make adjustments. Discuss the program with your leadership team and gain organizational buy-in. Participating in a mentorship relationship should be encouraged at all levels of the organization and seen as a commitment to professional development. Ask leaders to help champion the cause and encourage their teams to participate. As you begin to formalize your program, there are a number of considerations. How will you measure the success of a mentoring relationship? Are there specific milestones individuals should work toward? How will mentors and mentees be held accountable? You may even choose to offer micro-mentorships, where individuals can work on a specific skill for a short amount of time. Mentorship programs are a fantastic opportunity to demonstrate your commitment to employee growth and development. By encouraging these relationships, investing in employees and helping them reach their professional goals, you’ll build an engaged and driven workforce. Phokham O’Connor is a talent delivery manager at The Jacobson Group, a provider of talent to the insurance industry. Phone: 800- 466-1578. Email: psiriboun@jacobsononline.com.
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Special Report: Best Agency to Work For 2020 Winners OVERALL
RightSure, Tucson, Ariz.
EAST
Gold - William A. Smith & Son Inc., Newburgh, N.Y. Silver - Deland, Gibson Insurance Associates, Wellesley, Mass. Bronze - Stanton Insurance Group, Cherry Hill, N.J.
WEST
Gold - Wood Gutmann & Bogart Insurance Brokers, Tustin, Calif. Silver - The Liberty Company Insurance Brokers, Woodland Hills, Calif. Bronze - The Buckner Company Inc., Salt Lake City, Utah
SOUTH CENTRAL
Gold - G&G Independent Insurance, Fayetteville, Ark. Silver – INSURICA, Oklahoma City, Okla. Bronze - Upshaw Insurance Agency, Amarillo, Texas
MIDWEST
Gold – The Starr Group, Greenfield, Wis. Silver – DSP Insurance Group, Schaumburg, Ill. Bronze – Korotkin Insurance Group, Southfield, Mich.
SOUTHEAST
Gold – SouthGroup Insurance Services, Ridgeland, Miss. Silver - Fisher Brown Bottrell Insurance, Jackson, Miss. Bronze - Darr Schackow Insurance, Gainesville, Fla.
Is your agency on this list? Tell everyone! For reprints, badges, plaques and more, call (800) 897-9965 x125 or email us at: reprints@ insurancejournal.com
T
he votes are in for the 2020 Best Independent Insurance Agencies to Work For. While 2020 has been an unusual year for agency employees – many of whom have worked remotely for months – the pressures that have come with a global pandemic didn’t sway what they value most about their workplace. Employees in 2020 highlighted the importance of competitive salaries, employee benefits, training and education, and other employee perks as drivers of satisfaction in the workplace. But it’s not all about compensation and benefits. Happiness in the workplace has a lot to do with people, relationships and the agency’s culture. Employees of the winning agencies cite high personal job satisfaction; rate their relationships with their immediate boss or supervisor
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as positive; and express a high opinion of their agency’s owner or principals and their agency’s reputation in the community. Many employees are grateful the best agency owners support local charities and the community. Employees are grateful for the opportunities their agencies provide for them to participate in community service. Employees take pride in working for agencies that are respected and hold strong values and ethics. Employees appreciate the generosity of their agency owners in sharing revenues in the form of bonuses and trips. The best agencies also provide ways to help their employees grow — by giving them the tools and technology they need, and supporting them with education, training, annual performance reviews and, in some cases, mentors. The survey results clearly show
employees value this support. As expected, the winning agencies score high for overall employee benefits including wellness programs and for working conditions that include flex-time and alternative schedules that allow employees to work from home. The best agencies to work for also provide employees with a strong sense of work-life balance, and deliver a workplace environment where employees feel supported wholeheartedly by management and their peers. Many of the employees say they feel like family in their agencies. Insurance Journal wishes to thank the nearly 4,000 customer service representatives, account executives, producers, managers and other agency staff who took the time to nominate their independent insurance agency in this year’s survey. INSURANCEJOURNAL.COM
Special Report: Best Agency to Work For
Overall
RightSure Insurance Group Tucson, Arizona
Tech-First Agency Tackles the ‘Difficult Things’ By Andrea Wells
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rom standup comedy and acting gigs to selling insurance – not the typical career path for the everyday independent agency owner but that is how Jeff Arnold, founder of RightSure Insurance Group, this year’s winner of Insurance Journal’s Overall Best Agency to Work For, got his start in the business. “I literally was an out of work standup comic returning from Hollywood where I had no gigs lined up for the next 10 weeks. I needed to eat and pay rent, so I answered an ad Jeff Arnold for the most cliché of things, “Wanted: Insurance Salesman,’” Arnold said. “From day one of my new career, I was hooked. I could not read enough, learn enough or digest enough about this wonderfully exciting industry.” Arnold’s enthusiasm for the insurance business trickles down to RightSure’s employees who nominated the agency for its top-notch working conditions, overall employee benefits, supportive management, community involvement, and how the agency is maneuvering through COVID-19. One employee described RightSure as: “a great company, feels more like a family than a business, they support their employees, the owner and management go to extremes to help us. Best company ever by far, without exaggeration.” Arnold founded RightSure just 12 years ago, but he INSURANCEJOURNAL.COM
has been working in the insurance industry for nearly three decades. Through his company, Abbey Road Insurance Holdings, he is active in several joint ventures with online aggregators, comparison websites and insurance portals. That entrepreneurial spirit and tech-forward thinking is one attribute Rightsure’s employees noted as important. “We are a technology company first, an insurance agent second,” one employee wrote. “We are constantly creating new ways for a better customer experience online and creating more avenues for clients to obtain and learn about insurance.” Arnold says that RightSure is increasingly powered by AI initiatives, and he believes that gives the agency the “feel” of a tech incubator, which is attractive to younger, more mobile focused staff. The agency, with 52 employees in two Arizona offices, reported property/casualty revenue of $4.4 million in 2019. Arnold says staff consists of a mix of millennials, Gen Z and more seasoned insurance professionals. “Having that diversity of more mature and experienced with younger, less experienced people makes for a great environment,” Arnold added. “Part of our internal mantra is ‘do the difficult things.’ The things that most people want
to avoid but if faced and accomplished will lead to more improvements, greater revenue, deeper employee engagement.” That’s what sets RightSure apart from others in the industry, he added. “Calling back an unhappy renewal client, solving a difficult onboarding practice, having that difficult conversation with that one employee,” he said. One of the most difficult things in recent history has been COVID-19, and Arnold’s leadership through the crisis was mentioned by employees again and again. “Our boss’s ability to get his employees through a pandemic seamlessly, without fear or panic, allowing everyone to continue in their role, working from home, and giving us all the technology needed to be successful in a different environment” was cited as one reason why they felt proud to work at RightSure. Arnold said the single greatest challenge for managing in a COVID world has been making
sure that employees are OK. “And by OK we mean mentally strong.” That meant moving from one or two monthly company meetings to daily “check-ins” five days a week. Most of the meetings were to simply ask, “Is everyone OK?” From those meetings an informal “Moms Group” developed. “Many of our moms wanted a non-judgmental place to share struggles or ask for guidance – for how others were juggling home schooling, workloads, family life,” he said. “People really are the single greatest asset any company has, so it is extremely important to make sure they are OK, engaged, happy and whole.” Arnold’s best advice to other owners – develop a strong culture. “What culture are you wanting in your company and how does that integrate with your overall strategy.” The best laid strategy plans get destroyed by a bad culture.”
RightSure Insurance Group employees value its progressive tech-focused work environment. OCTOBER 5, 2020 INSURANCE JOURNAL | 31
Special Report: Best Agency to Work For
East
William A. Smith & Son Insurance Newburgh, New York
Communication and Teamwork Equal Success By Elizabeth Blosfield
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ot all insurance agents are created equal. At least that’s what William A. Smith & Son Insurance states on its website, a claim that speaks to the agency’s mission of serving clients and employees through strong communication and teamwork. “We really care about our customers and want win/win relationships,” says Jack Smith, executive vice president and owner of the Newburgh, N.Y.headquartered independent agency. “We want to make sure that everybody is served and that they feel good about doing business with us.” With one part-time and 30 full-time employees and annual revenue between $3-$5 million, William A. Smith & Son Insurance is a third-generation independent agency started by Jack’s grandfather. Jack’s father, John Smith Sr., later joined the firm in 1957 and remains as its president, while Jack and his two sisters, Debra Johnson and Cathy McCarty, currently run most of the daily operations as executive vice presidents and owners. The agency was recently nominated by its employees and won Insurance Journal’s annual Best Agency to Work For Gold award in the East region. Employees, who filled out an anonymous survey as part of the nomination, say this honor is deserved due to the agency’s family-focused atmosphere. “[John], who is 87 years old and has over 60 years in the business, is the most hard working and caring individual,”
one employee writes. “He exemplifies the values of leadership and is the glue that keeps our agency together.” Jack, who joined the agency in 2003 after spending 10 years with Kemper Insurance as a commercial underwriter and five years with Computer Sciences Corporation selling software, outsourced services and consulting to the insurance industry, says he was originally drawn to insurance because of the impact he felt he could make on the community. He explains that making this kind of impact starts internally with a strong team. “Each of the players on your team needs to be kind of a champion in their role,” he says. “You have to take care of the people to make your agency the best place for customers to come.” Employees say William A. Smith & Son Insurance is no stranger to prioritizing its people, pointing to the COVID-19 pandemic as one example. “Being given the opportunity to work from home during the COVID-19 pandemic is great,” one employee writes. “I have been given the tools I need to keep working with new customers as well as servicing existing clients.” When the COVID-19 crisis hit in March, the agency was able to transition immediately to work-at-home for all employees due to technology upgrades it has made over the last few years, one employee writes. “We’ve always been big on trying to make sure we’re up to date with our technology,” Jack says, adding that tech-enabled
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communication has served the agency well through these challenging times. “When people are part of your team and your families, you need to over communicate with them,” he says. “Communication enabled by technology has really made it a lot easier for people to deal with what’s going on right now.” Although many William A. Smith & Son employees have elected to return to the office, Jack says the agency hasn’t required that as its priorities have always been about protecting its people and customers. “We want people to be comfortable and feel safe. And if you’re comfortable and safe, you’re going to do a good job. And if you do a good job, your customers are going to be happy,” Jack says. William A. Smith & Son Insurance’s employees say this approach is working. “The company has been
around for nearly 100 years because of its role in the community, how it treats its employees and customers alike,” one employee writes. “No one is a number. They always go above and beyond.” With this in mind, Jack says being recognized as a best agency to work for is an important reminder of why he entered the insurance business in the first place — because of the people and the community. “It validates the things that you think you’re doing to try to make it a fun and productive place for people to want to spend their time every day,” he says. “Because other than sleeping and being with our families, these are the people that we’re with most in our lives.”
From Left to Right: Jack Smith, Debra Johnson, John H. Smith Sr., Cathy McCarty) INSURANCEJOURNAL.COM
Special Report: Best Agency to Work For
Midwest
The Starr Group Greenfield, Wisconsin
Nothing More Important than Culture asks our opinions on how to fix them,” another employee LOVE working for this “ wrote. business. I look forward to Tim Starr admitted he was working each day!!!” not initially convinced of the It’s not every day that you importance of culture on a hear an employee of any company’s success. “I needed to be educated into how given business say that, but it’s critical culture is. When I exactly what one respondent to started witnessing the changInsurance Journal’s 2020 Best es and in particular how one, Agencies to Work For survey new people we interviewed said about working at The Starr would reference it, and two, Group in Greenfield, Wisc. that it was the number one That employee was not alone reason employees stay with us in expressing admiration for I knew I had just learned there their agency. The overwhelmingly positive responses to is NOTHING more important in the IJ survey have propelled an organization than culture. The Starr Group — which has Culture is vague and big.” 34 employees and generates Ethics and integrity are a big between $5 million and $10 part of that culture, employees million of revenue annually say, and it’s something they — to win the designation of clearly appreciate. Gold Best Agency to Work “I have been with the organization for over 20 years and For — Midwest. every day feels like a new day. CEO Tim Starr said it is The agency is a very strong “quite amazing to know” that values-based organization and the employees nominated the strength-based organization. agency and participated in the We focus on the strengths survey without management’s of individuals and know knowledge. that differences are needed and accepted,” wrote one employee. “Ethics is a big part of the culture, and it’s not only ‘doing ethical business’ but it is always doing the right thing when in the office or not,” said another. “Regarding insurance, they always take the high road and do what is right for the client. We The Starr Group knows how to have fun! Above, agency team members and their do not sell on price, families enjoy the annual family picnic in 2019. we build solid
By Stephanie K. Jones
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INSURANCEJOURNAL.COM
“The fact that they were not asked to nominate us but rather felt compelled to nominate our agency ... speaks volumes,” he said in an email to IJ. Tim Starr said for him, what makes the agency a great place to work is: “Culture, culture and culture! This is defined via numerous variables but as Mary Starr would share, ‘Culture by design, not default.’ As our Cultural Officer, she has been the creator, maintainer and polisher of this.” In their survey response, an employee praised Mary Starr, The Starr Group’s executive vice president, for continually looking at ways for the agency to “do better” and ensuring employees know they are valued and important to the organization. “We have a management team that seeks out your greatness, harnesses it, and uses it to make you feel highly engaged in your job. The owners actively talk with all employees to identify problem areas and
coverage and risk management programs, and then negotiate for the best value. It is a fundamental difference compared to many of our competitors,” another employee noted. Starr said the agency recognized the coronavirus pandemic had the potential to challenge the company’s culture and took steps to protect not only employees, but customers as well. “Our number one priority was the safety of our teammates and our clients. Ongoing, transparent communication was critical during this time. We invited our team back to our physical offices in June and the majority have gladly returned with enhanced Work from Home options. It was imperative that we not allow the culture we had worked so hard to build to deteriorate during these changing and challenging times,” he said. “We have noticed a self-proclaimed improvement in both emotional and mental wellbeing with this return to an in-person and ‘back to normal’ work setting. Instead of becoming paralyzed with fear and uncertainty our team has flourished during these unprecedented times,” Starr added.
OCTOBER 5, 2020 INSURANCE JOURNAL | 33
Special Report: Best Agency to Work For
South Central
G&G Independent Insurance Fayetteville, Arkansas
All About 'Exceptional Experiences' position our company to be the best highest producing agency not only locally but statewide and nationwide. We are very ambitious and competitive which is something I enjoy,” wrote one employee in their survey response. “I feel like the company is forward thinking and trending upwards consistently in growth and technology. I do not feel like most insurance agencies are taking the same approach, which sets us apart,” said another. One employee described the culture at the agency as “phenomenal” adding: “Leadership does an excellent [job] at picking the right people and ensuring we are treated fairly and given opportunities to grow within our position as
well as opportunity to move up the ladder.” he team at G&G Above all, it’s the Independent Insurance people that make in Fayetteville, Ark., is G&G a great place young, ambitious, motivated, to work, according and passionate about providing to Greer. “Our innovative, exceptional service team is comprised to their customers. And they of energetic, motivated, and love where they work. customer-centric people that G&G Independent Insurance strive to deliver exceptional was selected as Insurance experiences in every interaction. When you are surrounded Journal’s Gold Best Agency to by a team that truly comes Work For — South Central based together to achieve big goals, on the energy, drive, and appreciation for their employers and work is engaging and it’s fun!” peers that employees conveyed he said. in their responses to Insurance One agency initiative that Journal’s 2020 Best Agencies to multiple employees expressed Work For survey. their appreciation for is the “I’m elated, humbled, and Exceptional Experiences appreciative!” G&G CEO Jordan Program, designed not only to Greer wrote in an email to IJ motivate staff but to recognize upon learning his agency was their achievements. a Best Agency to Work “G&G’s purpose is to For finalist. “This nomprovide exceptional ination from the G&G experiences in every team is an indication interaction,” Greer that we are heading in said. It’s a philosophy the right direction and that extends beyond that we should continue providing excellent with our efforts to do customer service. everything we can to “We are equally make our agency the focused on the best place to work for employee experience. our team.” One example is the With 18 employees at process by which we the time of the survey, identify, praise, and G&G Insurance has recognize exceptional annual revenues in the experiences that $1 million to $10 million members of our team range and is anything provide to our clients. but static. Not only do we “We have a young praise and recognize team with high ambition these experiences, to be the best. Our manbut we gamify their During child abuse awareness month, G&G agement is very smart efforts complete with employees came together in support of the and always looking a leaderboard that Children’s Safety Center, a local non-profit advoto be progressive and has each employee cacy group for abused children. think outside the box to playing for a unique
By Stephanie K. Jones
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exceptional experience of their own — a bucket list trip they designed before the year began. The employees at the top of the leaderboard are competing for bucket list trips to Australia, Italy, and Mexico,” he said. Several team members also highlighted the G&G Foundation — an employee-funded and managed nonprofit dedicated to serving the local communities where the agency does business. The foundation is run “by a committee of employees so you get to be involved with something very exciting and meaningful to the community,” an employee said. Other employees praised the agency’s management not only for seeking out employee feedback but listening and acting upon the ideas and suggestions provided by staff. For Greer, that’s an important part of being “intentional about the employee journey.” He said it’s important to involve team members in the process of identifying not only what it means to be a best place to work but also where gaps or opportunities exist that can help take the organization to where it wants to be. “Create anonymous opportunities for your team to give you feedback along the way and, remember, the journey is never over,” Greer said. INSURANCEJOURNAL.COM
Special Report: Best Agency to Work For
Southeast
SouthGroup Insurance Services Ridgeland, Mississippi
A Big Agency with an Even Bigger Heart By Amy O’Connor
E
mployees at SouthGroup example. I enjoy coming environment that promotes to work each day,” said a Insurance Services don’t pride, professionalism and respondent. just like where they opportunity. “I love going to work work – they LOVE it. And going “We consider all of our everyday because I work through the pandemic has employees to be teammates at SouthGroup and I love only reinforced their love and on a championship team of helping people! We have appreciation of their employer, teams,” said Tubertini, who selected as Insurance Journal’s noted employees refer to them- over 20 locations, but we selves as SouthGroupies. “Like function together seamlessBest Agency to Work For - Gold ly using tech and messenger all sports or rock groupies, our in the southeast region. tools,” said another. “We help SouthGroupies are proud to “During this pandemic our each other out with ideas and be associated and care about office has pulled together to SouthGroup and our future.” markets and short cuts to do make things feel as normal as our jobs better. We work hard That sense of pride in their possible for each and every one to make all of our communities place of business was evident that works here as we all have better.” in the dozens of Best Agency had different situations occur Tubertini said he started his to Work For SouthGroup and we have worked as a team first agency at 25 and now 45 employee survey submissions. to keep moving forward,” said years later, he is still excited From the company’s generous one employee. about being in the insurance benefit options, to employee “I have never worked for growth opportunities to the business and looks forward a company that has been so to any future changes and agency’s support services and generous, caring, understanding, willing to reward, shows challenges. its emphasis on giving back to appreciation for the work done, the community, SouthGroup “Most of our SouthGroup understanding of errors and offices enthusiastically encourteam members emphasized age a family atmosphere, and advice on how to correct,” said how lucky they feel to be part another. that spreads throughout the of the organization. entire organization through its The agency, based in “Employees are respected collaboration,” he said. Ridgeland Miss., specializes in and treated with fairness That collaboration was personal and business insurand our opinions are valued. ance through its 22 Mississippi noted by employees in regard Community service is encouraged, and our leaders lead by branch locations and also to the company’s charitable works with clients in work, which includes Tennessee, Arkansas, supporting hundreds Louisiana, Alabama, of nonprofits and Texas and other states. community groups, SouthGroup has 135 schools, and sports employees with revenue teams and hosting of just over $18 million. an annual 5K to President & CEO raise money for Ronnie Tubertini says Blair E. Baton’s he and the SouthGroup Children’s Hospital, partners are very proud located in Jackson, of their dedicated staff. Miss. This cause in One of the independent particular is very agency’s major goals dear to SouthGroup SouthGroup Insurance Services newest employees employees’ hearts as a is to provide a friendly from its acquisition of The Clark Group. and stable working grandson of one team INSURANCEJOURNAL.COM
member was saved thanks to the efforts of the hospital. SouthGroup has raised more than $300,000 for the hospital. As the agency adjusted to the pandemic with flexible working hours and telework opportunities, employees said they were grateful for the support and understanding of their leaders. “The flexibility to work from home all the time (before, during and after the pandemic) has been a lifeline for this working mom,” said a respondent. “In today’s world, flexibility for families is vital, particularly with working moms.” Tubertini said SouthGroup offered flexible working hours telework opportunities even prior to Covid-19. The agency also places a value on education, encouraging all of its licensed agents to be on a continuous education track. All agency should “consider your employees as your greatest asset,” he said. “We are in a service business, whether it is commercial or personal lines, and our agency employees are the face of our agency,” he said. “I’ve always tried to live by the old maxim that you can buy a person’s back, but you can’t buy their heart. I want to have their heart and them have mine.”
OCTOBER 5, 2020 INSURANCE JOURNAL | 35
Special Report: Best Agency to Work For
West When Caring Matters Most By Don Jergler
T
he phrase “truly cares” gets thrown around a lot, but it is being used so often by employees at Wood Gutmann & Bogart Insurance Brokers that it was impossible to write it off as a cliché. “WGB truly cares for its employees,” wrote one employee. That employee also wrote that the firm respects and values women and minorities, who “are given equal opportunities to thrive in our culture” in an environment with “no micromanagement, a lot of autonomy for entrepreneurial spirits.” Employees at the Tustin, Calif.-based firm voted it as Insurance Journal’s Best Agency to Work For in the West region. WBG earned the Gold Award. The nomination process has employees rank the firm in several categories in online forms and also comment on just why theirs is the best agency to work for.
It’s not the first time WGB has been recognized. The firm took home the Silver Award in 2017. That’s truly a big accomplishment. “You got to truly stand behind your principles and your core beliefs,” said Kevin Bogart, CEO of the firm. What are those core beliefs? “It’s people and families before money, frankly,” Bogart said. There was no shortage of employees who made mention in their comments of WGB’s response to the pandemic. In less than a week after stayat-home orders began rolling out, the firm had taken nearly half of its remaining employees who still worked in the office and had them switched over to work-from-home environments. Computers were ordered, those without high-speed internet connections got them set up with the help of IT and many mobile phones were purchased. “I think we bought 75 mobile
Taken at the Wood Gutmann & Bogart lobby. From Left to Right: Bob Gore, president and managing partner of Gore Lieske & Associates Insurance Brokers (an affiliate of WGB); John Janssen, president and partner, WGB Benefits; Peter Barsky, vice president, emerging business group; Kevin Bogart, CEO; Lisa Doherty, executive director, private client services; Rob Lieske, partner and managing director of insurance operations of Gore Lieske & Associates Insurance Brokers; Erik Johansson, president of Performance Bonding (an affiliate of WGB). 36 | INSURANCE JOURNAL | OCTOBER 5, 2020
Wood Gutmann & Bogart Insurance Brokers Tustin, California
phones in one day,” Bogart said. “This has been a harder year money wise due to the expenses to make this happen.” It may help that WBG has been steadily growing its size and revenue. When it won Silver in 2017, the firm reported more than $20 million in revenue. At the end of last year, WGB was at about $33 million in revenue — with the help of $4 million coming from its burgeoning benefits division — with roughly 130 employees and counting. “When the pandemic erupted, they had a contingency plan within a couple of days,” wrote one employee who described WGB’s rapid response to the pandemic. “We held weekly video calls to get the status of our organization and address any concerns anyone had. The leadership isn’t there to simply demand excellence, but their heart is written all over the company. They care.” Another wrote that the firm “was proactive and took the health and well-being of its employees very seriously and at great expense to them.” It’s not just the employees who are cared about, another noted. They’ve created a staff that works in sync with each other “to deliver the best environment to our team while ensuring the integrity of their products doesn’t get overlooked with their customers,” the employee wrote. “Quite simply, I’ve been impressed by how much they care about all
aspects of their business.” Bogart, believes it is the firm’s values that have helped them weather the pandemic so far, and without a single layoff. He’s also looking at 2020 like it deserves to be seen — in the rearview mirror, when better times are upon us — and as an opportunity to achieve in a very brief time what had been a three-year goal to enable more employees to work from home and give them the flexibility to better handle their jobs as well as whatever life throws at them. “We’ll put an asterisk beyond this year and just call it what it was,” Bogart said. “What was probably a three-year project became a one-week project at the start of this crazy thing.” For those who aren’t convinced the firm cares, here's one employee’s comments that should do the trick. “I have said it before I will say it again, they just care,” the employee wrote. “This company is run by good kind people who care about people. I cannot say enough about the leadership, from the owners to the IT and management, they care about the employees and clients. I really feel they want the best for their employees, and they know if their employees are taken care of then employees tend to take care of the company right back. They get it.” INSURANCEJOURNAL.COM
Congratulations to Insurance Journal’s 2020 Best Agencies to Work For
Overall Winner
Idea Exchange: Management Liability
Remote Work:
Protecting Against Employee Crime
T
he business landscape has changed drastically over the past several months as the world has struggled to combat and adapt to a global health crisis. Many organizations successfully By Brian Lester pivoted their workforce to remote work, some even reporting increased productivity as a result. While there may be some positive outcomes of this forced remote environment as companies reconsider their flexible work arrangements and dollars spent on office space, unintended consequences and risks may also emerge. For example, even the smallest breakdown in normal risk management procedures or internal controls can lead to an increase of employee theft claims.
38 | INSURANCE JOURNAL | OCTOBER 5, 2020
Furthermore, with a global pandemic comes global economic uncertainty. Employees are worried about the potential for job loss, economic decline and negative effects on their personal finances. All of these factors also contribute to the likelihood of employee theft. As we continue to navigate these unprecedented times, there are some key areas businesses can focus on to help mitigate the potential of employee crime. When operations are changed quickly, regular procedures such as accounts payable and receivable and tracking inventory are disrupted. Below are some key factors to consider.
Accounts Payable Paper Check. Many companies may
require dual signatures on documents. If unable to adhere to in-person countersignature controls during this time, a new
process should be established. Companies can contact their bank to develop an electronic process for issuing paper checks where necessary. This process would require a dual electronic sign-off through a secure portal before the paper check would actually be issued. Wire Transfer. Ensuring that you are transferring money to the right client is critical. To make sure the appropriate controls are in place, multiple people should be included in the process to initiate and reconcile the transfers.
Accounts Receivable
When entire workforces shift to remote, what happens to incoming mail, including checks and invoices? A process should be put in place that ensures the secure receipt of mail. If a new process is necessary, for example if the mailroom in a large office building is shut down or not staffed, a P.O.
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Box can be used to maintain security. Monitoring Company Assets. Many companies are struggling to handle inventory and ensuring accurate accounting when existing controls and methods are no longer available. Modifications might be necessary to bridge the gap during this time. Vendor/Client Controls. Vendor partners and clients are facing the same challenges. If a vendor is requesting changes to accommodate for their company situation, ensure they are legitimate to avoid any scams. Similarly, speak to clients about their internal controls as company information may be susceptible while in their systems. Mike Henning, a broker at Risk Placement Services, agrees that procedural controls are vital when protecting a company against theft. “It is important that company computer systems are programmed with electronic separation of duties with strict employee authorities and boundaries, dual authorizations and request confirmations all logged and captured,” Henning said. "With less physical employee interaction and oversight, systems have to be programed so employees aren’t able access and process anything over their authority.”
Employee Challenges
We are living through extraordinary times, and companies need to be mindful that their employees are having to handle pressures personally as well as professionally. Some of the key areas of concern include:
Technology and equipment
Shifting to remote work means employees, in all permutations of living situations, are relying on their own WiFi networks. Whether they live in a suburban home or in a large apartment or condo building, their network may not be as secure as when in the office. Network security should be a high priority at this time. Additionally, some employees may not have a home office or appropriate technological set-up for long-term remote work. Ensuring employees can work efficiently and comfortably from home is INSURANCEJOURNAL.COM
important for business continuity as well as the well-being of employees.
Time Pressure/Stress In addition to feeling as if they are not
properly equipped with technology, many employees have families at home with them. With schools closed and children at home or remote-learning, employees are facing additional stressors while at work/home. This pressure, or perceived pressure, can lead to cutting corners or careless over-sight.
Fewer Employees Many companies are operating with
fewer people. Whether a result of coworkers out of work due to illness or acting as a caretaker for those that are, or pandemic related layoffs and operating with a “skeleton” crew, duties that used to be segregated may not be any longer.
Cybercrime and Social Engineering
In uncertain times, the last thing many of us think about is cybersecurity. Cyber criminals are taking advantage of the world’s distraction due to current events to create new ways of targeting the public and manipulating employees to gain access to company systems. According to Henning, “it is more important than ever to confirm requests coming to employees are legitimate because companies of all sizes are more vulnerable than ever to social engineering attack.” As smaller businesses receive relief loans from the government, attacks on computer systems are increasing as criminals attempt to gain access to these funds. Companies must remain vigilant in monitoring their system. Some security best practices include the following: Identify phishing scams. The coronavirus pandemic has led to a rise in email phishing scams. IT departments should provide information and training so employees understand how to verify that an e-mail is authentic. For example, sometimes email addresses are slightly modified to look legitimate. Employees should carefully check the “from” email address and domain. Some of the topics criminals are using to draw people into scams include:
• • • • • • • •
General pandemic terms or news, including alerts for breaking news and links to fake news websites. Requests for verification of personal information to receive financial relief such as loans or an economic stimulus check from the government. False shipping notifications. Unsolicited contact from medical professionals, government agencies, health organizations or any apparent authority figure. Infected infographics, maps and tracking apps. Advertisements for masks, hand sanitizers or any products that are in short supply, including fake testing kits and bogus cures and vaccines. Charitable contributions. Airline carrier and vacation refunds. Job opportunities.
Avoid Typosquatters. “Typosquatters”
take advantage of common misspellings or slightly modify website addresses to re-direct people to malicious websites. If an employee identifies a suspicious email: • Do not click on any links. • Check the website spelling. • Hover over a link to determine if it’s legitimate. • Open a browser and hand type the website address.
Eventually, this pandemic will pass, and we will get back to some form of “normal.” When we do, it’s possible that we’ll have implemented alternate business procedures that we’ll choose to maintain moving forward, helping us to weather future possible events such as natural disasters, technology outages, travel interruptions and future pandemics. No matter what disruptions may occur, if a company can remain vigilant in controlling internal procedures, stay mindful of the challenges their employees face and educate their workforce on emerging cybercrime trends, it will go a long way in preventing crime loss. Lester is assistant vice president, fidelity, at OneBeacon Management Liability. Website: onebeaconml. com. OCTOBER 5, 2020 INSURANCE JOURNAL | 39
Idea Exchange: Is It Covered?
Logic & Language and Forms & Facts Homeowners Coverage Gaps? Here Are Some ‘Mower’
I
n 2018, the Insurance Journal published an article titled “Lawnmower Injuries Remain Source of Serious Injury and High By Bill Wilson Costs.” A study cited in the article stated each day during the mowing season, about 30 people are injured or maimed in lawnmower accidents, with the average cost of injuries requiring medical attention $37,000. This doesn’t include lost time, pain and suffering, etc. that may also be recoverable. It’s easy to see how a lawnmower injury involving negligence on the part of the owner or operator can potentially result in a claim exceeding the standard $100,000 40 | INSURANCE JOURNAL | OCTOBER 5, 2020
homeowner policy liability limit. But even an average medical claim can cause financial disaster for a homeowner whose policy doesn’t cover the claim at all. You'd be astonished at how tenuous coverage can be for the use of a riding lawn mower. Let’s compare the policy language between the three most recent Insurance Services Office (ISO) HO 00 03 (HO3) forms. The 1991 edition of the ISO HO3 extends liability coverage to a riding lawnmower “Used to service an ‘insured’s residence.” The 2000 edition of the ISO HO3 extends liability coverage to a riding lawnmower “Used SOLELY to service an ‘insured’s residence.” The 2011 edition of the ISO HO3 extends liability coverage to a riding lawnmower “Used solely to service a residence.”
To illustrate the differences, let’s apply them to a claim scenario. I’m cutting my yard and my riding mower runs out of gas. My next-door neighbor has a riding mower with a full tank, so I use his. While using it, the mower overturns into a ditch, the blade comes off, and another neighbor is severely injured. (This actually happened except that there was no injury.) If I have the 1991 HO3, I’m covered while using my own, or any other, riding mower on my residence premises. As long as I use the vehicle at some point to service my own residence, I’m covered using it anywhere else in the world. If I have the 2000 HO3, I have no coverage because my neighbor’s riding mower isn’t used solely to service MY (“an ‘insured’s’”) residence premises. If I have the 2011 HO3, I might have covINSURANCEJOURNAL.COM
erage. As long as the riding mower is used solely to service “a” residence, for example his and mine, I’m covered. But what if the neighbor had used the riding mower to mow the lawn at the church immediately behind his home? Now there’s no coverage because the mower hasn’t been used solely to service a residence. How many of your customers are aware of this? How many of your staff members are aware of this given the likelihood that you may represent multiple homeowners insurers with varying ISO edition dates or even their own proprietary forms? Before we move on, what if my nextdoor neighbor is also sued as the owner and servicer of the riding mower in this claim? Would his HO3 cover him? If he has the 1991 HO3, he’s covered if his riding mower is ever used to service his INSURANCEJOURNAL.COM
residence premises. If he has the 2000 HO3, he has no coverage because, now that the riding mower has been used to service a residence other than his own, he has no coverage now or in the future. If he has the 2011 HO3, again, it depends on whether his riding mower has been used to service any premises that are not residential premises, such as the church property behind his home. But wait, as it turns out, several neighbors had mowed that property, but my next-door neighbor had only mowed the parsonage lawn. Since the parsonage is a residence, NOW he has coverage. Doesn’t this all make logical sense? Imagine explaining this to a customer who asks simply, “Does my homeowners insurance cover me on my riding mower?” Given that Halloween is fast approaching, let’s examine one more liability scenario. In my old neighborhood, one of the residents would attach a flatbed trailer to his large John Deere lawn tractor, cover it in hay, and haul small children throughout the neighborhood trick or treating. What if one of them falls off and suffers a traumatic brain or cervical injury? If he has the 1991 HO3, he’s covered as long as he has used the riding mower to service his own residence premises. If he has the 2000 HO3, he has no coverage, nor will he have any coverage from now on when he mows his own yard because the riding mower is no longer used SOLELY to service his residence premises.
‘Think of the millions of homeowners who use riding lawn mowers — virtually all of them unaware that they may be riding around on a potentially catastrophic homeowners exclusion.’ If he has the 2011 HO3, he has no coverage because he clearly is not using the vehicle to service a residence of any kind. So far, we’ve been talking hypothetically and only about the homeowners liability
exposure. Similar language is used to determine coverage for first-party property damage to a motor vehicle that services the premises. To show you the extremes to which this language can be taken, consider an actual claim brought to my attention last year. An insured bought a $6,000 lawn tractor and put it in his garage overnight. The next morning, he discovered it was stolen. The claim was denied with a rationale it wouldn’t matter which edition ISO HO3 he had. According to the adjuster, because the vehicle had never been “used to service” the premises, he had no coverage under the HO3-s motor vehicle exclusion. It may seem ludicrous, but it is correct if you accept a literal reading of the policy. That brings us to soapbox time. Is the complexity of this coverage/exclusion warranted? We only looked at the ISO form but there are far more variations in non-ISO policies. Think of the millions of homeowners who use riding lawn mowers — most unaware that they're riding around on a potentially catastrophic homeowners exclusion. Should ALL uses of riding mowers be covered? Of course not. There’s actually a lawn mower racing association and coverage for that activity isn’t warranted under a homeowners policy. However, most other uses probably are, even the foolish idea of hauling young children around in the dark on Halloween eve. While we don’t have time to explore it here, take my word that there is potentially more liability coverage in an ISO homeowners policy for a four-year-old riding an ATV at 40 mph than there is a 40-year-old riding a lawn mower at 4 mph. The only requirement for the use of an owned recreational vehicle is that it be used on an “insured location.” If it’s non-owned, the coverage is worldwide. There is no “residence” limitation. Nor is there any sense to how motor vehicle coverage applies in most homeowners policies. Shouldn’t we fix this? Wilson, CPCU, ARM, AIM is the founder and CEO of InsuranceCommentary.com and the author of four books, including “When Words Collide: Resolving Insurance Coverage and Claims Disputes.” OCTOBER 5, 2020 INSURANCE JOURNAL | 41
Idea Exchange: The Wedge The Most Expensive
Data Breach You’ll Ever Have
L
ast week, a producer in one of my classes was distracted beyond belief — fidgeting with his mobile device, sending emails, and texting. As happens to most of us when we’re By Randy Schwantz nervous, his leg was shaking like a tree in the middle of a Texas thunderstorm. I tried to get his attention twice, to no avail. So, this time, I screamed, “Bob, what
the hell is going on over there?”
He looked up with a sordid frown on his face and said, “Someone hacked my bank
account.” “Oh man, I’m sorry. How much did they get?” “About $600 so far,” which to him was more than beer change. “But, I think I have it under control,” Bob reaffirmed himself.
That is a breach. Someone broke in, took Bob’s money, and left. But it’s nothing compared to the data breach most agency owners suffer every year. When someone doesn’t observe a law,
42 | INSURANCE JOURNAL | OCTOBER 5, 2020
agreement, or code of conduct, it’s a breach. By definition, when a producer doesn’t enter prospects into your pipeline system, that is a data breach. You’re probably laughing and thinking,
“Randy, that’s not a data breach. That’s just producers being producers.”
Right, and when a Russian hacker bores a hole through your firewall and steals your money, you’ll say, “that’s not a breach,
that’s just Russian hackers being Russian hackers.”
So why is this the most expensive data breach you’ll probably ever have? In economic terms, it’s pretty simple. When you don’t have valuable data from your producers’ pipeline, you have to listen to B.S. litany: • How hard they work. • All the great things they’re working on. • All the calls they’re making. • How they will “absolutely” make their numbers. The problem is, you have no way to validate, verify, or substantiate any of it until it is too late. It’s not until they miss their quarterly
goal, then their annual goals, then their decade goals, and ultimately their career goals, that it’s too late. You categorize this in your mind as not necessary, just a nice to have. But when you dig deeper, this costs you not just thousands of dollars every year, it costs you millions over your business’ lifetime. The irony is you pay $50,000 to $100,000 a year to make sure someone is managing your accounts receivable and accounts payable along with updating your P&L. Nice job! You’ve done a great job of recording and reviewing the past. We know, only a fool would argue against doing that. But you flunked the test of managing your future because of the most horrific data breach possible. You made it okay for your producers to tell you, “Kiss it, I’m not putting my data there.” You say, “Not a problem,” but your sales meetings are becoming even more lifeless. And your administrative assistant scowls every Friday when you say, “Need that pipeline report for Monday’s meeting.” Because she knows it’s code words for INSURANCEJOURNAL.COM
“Track down every producer and ask them to update the spreadsheet.” The problem with the spreadsheet is simple — it’s naked. Most agencies update their spreadsheets with: • Name of the business; • (Maybe) a buyer’s name; • Potential revenue (probably premium); • One line of poorly written notes; • No information about the incumbent; • No information about the risk. There’s nothing you can sink your teeth into, and it drives you mad. You get to the sales meeting on Monday morning and review the list with the team. “Charlie, let’s go through your stuff. You’re
working on the Texas Roadhouse restaurant. How’s it going with them?” Charlie has a vivid response, “Pretty good.” You ask him, “What do you think of your chances of closing this?”
Charlie states, “Probably better than
50/50.”
You confirm, “Do you have carriers lined
up?”
Charlie verifies, “Yes, sir.” You ask him, “Need any help?” Charlie ends with, “No, I think we’re good,
sir.”
Then you repeat the same motions with the next producer. Would the meeting be more useful if you had data to strategize how to win the deal together? Would it be more beneficial if your producers captured your competitors’ proposals and put them in your system? That way, you could then quickly review them and see just how great, or sorry, the competition stacks up. Would the sales meetings be more effective if instead of the “kiss it” attitude, your producers shared information on their competitor’s agents to figure out how they can stand out? Would it be more advantageous if they
knew whom the incumbent was so that you could help your producer win by broker of record instead of quoting on the account? Would you feel more in control of your producers if their goals and accounts sold were in your data system, so you could instantly review their progress with these goals? I’m sure you think this is foolish and that it’s overkill. But I’m 100% certain that Bill Belichick, Nick Saban, and Mike Krzyzewski couldn’t run their organization without player data. I’m 100% confident that Tiger Woods, Phil Mickelson, and Jordan Speith wouldn’t be caught dead without their humidity, wind direction, and stimpmeter reading data. By definition, data is facts and statistics collected together. It’s the antithesis of B.S. Schwantz is founder of The Wedge Group. He’s also the author of the book Agency Growth Machine. Phone: 214-446-3209. Email: randy@thewedge.net.
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My New Markets Hired & Non-Owned Auto - Delivery Market Detail: Pacific Excess Insurance
Marketing Inc., (www.pacificexcess.com) has markets for clients who want to offer delivery due to COVID-19 restrictions on social distancing, including restaurants, grocery stores, and other food delivery. It will also now consider liquor stores. Availability of HNOA six to 12 month policies. Pacific Excess carrier’s application must be used. No cannabis operations. Minimum premiums, taxes and fees apply. Available limits: Minimum $100,000, maximum $2 million Carrier: Unable to disclose, non-admitted States: Ariz., Calif., Colo., Ga., Idaho, Ill., Iowa, Ks., Mo., Neb., Nev., N.J., N.M., Okla., Ore., Texas, Utah, Wash., and Wisc. Contact: Juli Queen at 800-222-5582 or e-mail: jqueen@pacificexcess.com
Credit Insurance
Market Detail: Meridian Finance Group (www.meridianfinance.com) is a specialized broker of trade credit insurance (also known as accounts receivable insurance) as well as political risk insurance and related kinds of coverage. Source for receivable put options and other non-insurance credit risk management tools. Arranger of cross-border trade credit and other international financial services. Available limits: As needed Carrier: Unable to disclose States: All states Contact: Greg Mendell at 310-260-2130 or e-mail: gmendell@meridianfinance.com
Small Business Workers' Compensation
Market Detail: Pie Insurance (agencies. pieinsurance.com) was born from the intersection of technology, data, machine learning, and insurance. This combination allows the company to offer workers’ compensation coverage at a competitive price to almost 70% of class codes. Coverage is custom made for small business clients - save with pricing and coverage made exclusively for small business owners. Pie offers coverage rated A- by AM Best and backed by Sirius Group—providing 75 years of insurance. Pie is rated
Excellent on Trustpilot by customers for the experience and service. Protection for clients’ employees if a workplace accident does happen through a simple claims process to help the injured team member get back to work. Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted available States: Alaska, Ariz., Ark., Calif., Colo., Dela., D.C., Fla., Ga., Ill., Ind., Iowa, Ks., Ky., La., Md., Mich., Miss., Mo., Neb., Nev., N.H., N.J., N.M., N.Y., N.C., Okla., Pa., R.I., S.C., Tenn., Texas, Utah, Vt., Va., W. Va., and Wisc. Contact: Rebecca Sunshine-DeWitt at 855705-2716 or e-mail: contact@pieinsurance. com
Expediting COVID-19 Related Risks
Market Detail: Breckenridge Insurance Services (www.breckis.com) has experienced both small and large companies stepping in to help fight COVID-19. Many professional liability, health care, and life science markets are fast-tracking submissions for new or changing risks that are starting or modifying operations to help with the pandemic relief. Breckenridge Insurance Services brokers is expediting coverage placements as needed to help, including for the following types of risks: Retired health care providers (docs, EMTs,
nurses, etc.) coming out of retirement to help aid in treatment who need malpractice; pharma/nutraceuticals producing medicine for treatment and/or developing new meds and vaccines; medical product manufacturers (or manufacturers transitioning from regular products to needed products) – things like respiratory devices, ventilators, masks, testing kits, etc. as oftentimes current coverage will not cover the transition as a new class of products; clinical research organizations; clinical trials of COVID-19 drugs and/or vaccines; health care facilities – labs testing for the virus, drive through testing facilities, new “transition” hospitals (i.e., hotels, etc. being transitioned to care for non-critical patients); engineers helping to design new products; scientists; biohazard clean up and medical waste companies (GL/PL/ Pollution); telemed companies; contractors pro for those helping to build medical facilities; technology, website and/or communications companies providing key support; and other professionals helping. To help expedite submissions, please attach the following: Any governmental contracts that they are working under; resume(s) of key personnel (or a narrative of their experience); If they are an existing business, loss runs (even if they are from a product they are transitioning from). To review if your clients’ current policies are properly covering them or if they are a new entity, please reach out to your broker or email us at partner@breckis.com. Available limits: As needed Carrier: Tokio Marine Kiln (wholly owned parent company of WNC) States: All states Contact: Breckenridge marketing at 855-728-8822 or e-mail: partner@breckis. com
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Idea Exchange: Minding Your Business To Improve Profitability and Sales, ‘Fire’ Your Small Commercial Accounts
W
e all know about the Pareto Principle, the 80/20 rule. It also applies when analyzing the profitability and the work required for an agency’s book of business. Roughly 20% of the accounts generate 80% of the revenue, and 20% of the accounts take 80% of the staff’s time to service them. Problems occur when the accounts that require a lot of service work are not the ones generating considerable revenue. By Catherine Oak and To improve profitability, the agency needs to focus on medium and large commercial accounts only. There is not much margin to sell and service small accounts. Many of Bill Schoeffler
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Idea Exchange: Minding Your Business continued from page 45 those accounts could also cost the agency in profits. When analyzing the profitability of a business, it is essential to consider the production costs and the servicing costs. “Costs” can involve time or money. There is a minimal amount of time required by the producer and the service staff to acquire a new piece of business. The smaller the account, the more likely the agency will lose money to acquire it. Once the account is a client, the amount of time required to service the account, and the renewal commission paid to the producer will determine its profitability. For a small account, a few hours of service work and a 30% renewal commission to the producer will not let the account break even for your agency.
Define Small
The definition of “small” will vary based on the geographic area (urban/suburban/ rural) and the local business demographics (type and size of businesses), as well as the resources of the agency (talent of sales/ staff and available carriers). In New York City, there are a lot of large accounts that can be written. In Truckee, Calif., (Lake Tahoe area), a good-sized account might be a local restaurant. Agencies without adequate resources (talent and market access) will not be competitive on large accounts, regardless of their location. Each agency needs to establish its own definition of size. For example, a small account can be defined as one that generates less than $1,000 in commissions, or $10,000 in premium. The threshold can be adjusted periodically. As an alternative, the accounts in the bottom 20% by size in the book of business can be defined as the “small” accounts.
How to Handle Small Accounts
Once the small accounts are identified, a game plan needs to be established. There are three common approaches to handle them: 1) establish a Select Business Unit, 2) outsource the service work, or 3) sell or non-renew the small accounts (“fire” the accounts). The first step to consider is the role 46 | INSURANCE JOURNAL | OCTOBER 5, 2020
of the producer for small accounts. It might be tough to implement, but producers should not be involved with small accounts. Going forward, commissions for accounts written should be subject to a minimal size threshold in order to be compensated, including renewals. A book of business report for each producer should be run in descending order by commission. This will help establish how much each producer will be affected financially by not compensating them for the small accounts. It is also helpful to determine how much time they spend on those accounts.
‘Agencies that focus on medium and large accounts will find that producers and service staff have more time to improve service, generate new sales, and cross-sell accounts.’ If there is a real financial impact on individual producers, the level may need to be lowered, or their commissions might need to be grandfathered on existing accounts for a period of time. For new business, some agencies will pay a first year only commission on the small accounts, but nothing on renewals. One noticeable benefit of removing small accounts from a producer’s book is the amount of time it will save the producers. Even if only a couple of hours per year are spent per account, that time will add up. This approach lets producers have more time for new sales and cross-selling.
The time saved not handling small accounts can be spent to acquire one or two large accounts that could easily offset the income lost from the small accounts.
Set Up a Select Business Unit
It is very common for commercial accounts under a certain level to be handled only by service staff in a specialized commercial lines department. It should be called the “Select” Busines Unit (SBU) or “special” as opposed to “small,” as sometimes the business owner put in this department might feel they are less worthy of the agency’s attention. The SBU service personnel have responsibilities similar to that of personal lines service staff. In other words, the SBU personnel completely handle the account once it is already on the books. They are often the ones to initially sell the accounts as well. Responsibilities include rating and preparing quotes, placement and marketing (new and renewal), day-to-day client service and insurance company relationships associated with client service. If an agency chooses to let producers continue to sell new small accounts, once the account is sold, the producer should introduce the SBU service person that will handle the account going forward to the client. This can be done in a cover letter sent to the client with the new policy, or the service person will contact the client via the telephone to introduce themselves.
Outsource the Service Work
Instead of an internal small business department, some agencies will outsource the service work. There are a few different
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Idea Exchange: Minding Your Business continued from page 46 routes for outsourcing service work, so understanding the costs and types of service offered is imperative. The first means of outsourcing to consider is the service departments that some of the insurance companies offer. These are reasonably cost-effective and specialize in the clients’ policies since they write them. The one downside is that most agencies will have multiple carriers, and not all carriers offer this type of service. That means only a portion of the small accounts can be serviced this way. Also, clients need to be “trained” to directly contact the insurance carrier for their service work rather than calling the agency first. Another approach is to contract with businesses that provide outsourced services to insurance agencies. There are differences between these companies, but generally, they can provide full customer service to an agency, and it can be done seamlessly. Most of these services send the work offshore to India, China or the Republic of the Philippines. These services are usually not cheap, but with a large enough book of business, they can be cost-effective. Some services charge a split of the commissions and handle it from start to finish, as well as account rounding. Patra is such a service some of our clients have used, and they charge 50% of the commissions. Other services exist, such as ResourcePro and eDesk.
establish the platform for better future performance. Often, the smaller clients can be challenging to deal with, take up a lot of time to service or can be a placement issue that usually ends up in an excess and surplus lines (E&S) market. As accounts renew, producers and service staff should be able to recommend the non-renewal of “problem” accounts. These would be accounts that are costing the agency a lot of time compared to the commissions generated. If there are just a handful of “problem” accounts, they can be referred to a competitor down the street. This approach makes the “termination” more amicable. Although a non-renewal is lost commission to the agency, when the staff is allowed to clean up the book and rid the agency of these headaches gracefully, then the staff will have more time to focus on tasks that help the agency, including new business sales and cross-selling. It will also improve the morale of the staff. If the agency has a sizeable book of small accounts, it can be packaged up and sold. Some agencies specialize and like to work with small accounts. New agencies are also willing to buy accounts to increase their volume. This can be a win-win-win for the buyer, seller and clients. Regarding price, everything is negotiable, but a 50% split of renewal commissions for two or three years is usually fair for the buyer and seller.
‘Fire’ the Accounts
Summary
Agencies should consider getting rid of some or all small accounts. This can be done by a combination of non-renewing the accounts or selling them. This will be a reduction of revenue, at least in the short term, but it will improve profitability and
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no producer involvement. Also, using less expensive commercial lines service staff or account managers for the SBU is recommended if the accounts are handled internally. A specialized unit allows that service staff to gain more knowledge in small accounts since many are often harder to place and can end up being placed with an E&S wholesaler. It is always recommended that producers are paid for what they do. However, it is equally important to make sure that what they “do” cannot be performed by a perfectly qualified commercial lines account manager or CSR. Producer compensation expense for small accounts often makes small accounts much less profitable for an agency. Agencies that focus on medium and large accounts will find that producers and service staff have more time to improve service, generate new sales and cross-sell accounts. The best place to start is to “fire” problem accounts and delegate small commercial accounts to a specialized internal agency unit or to someone else outside the agency. Oak is the founder of the consulting firm, Oak & Associates, based in Northern California and Central Oregon. Schoeffler is an associate of the firm. Oak & Associates specializes in financial and management consulting for independent insurance agencies, including valuations, mergers/acquisitions, sales and marketing planning as well as perpetuation planning. Phone: 707-935-6565. Email: catoak@gmail.com.
For an agency to make money on small accounts, they have to be handled less, more efficiently and by fewer people, i.e.,
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OCTOBER 5, 2020 INSURANCE JOURNAL | 49
Closing Quote Think You’re Not an Influencer? Think Again
E
By Jessica Jeffress
You don’t have to be a ‘person of influence’ to be influential. — Scott Adams, Dilbert
very year my agency participates in a conference called the Global Leadership Summit. One of the themes this past year was “influence,” which was defined as “the capacity to have an effect on the character, development or behavior of someone or something.” This concept of influence really resonated with me. The summit speakers said anyone who has influence is a leader. While many of us may not consider ourselves as leaders in the traditional sense, we all have influence. And the argument can be made that as a result of having influence, we are all leaders. Skeptical? Hang with me. One day the NetVU executive board was discussing member engagement and why people choose to attend chapter meetings, our annual Accelerate conference or a webinar. It quickly became obvious that our members do these things because they are leaders — because they want to make themselves and their firms better. They are also influencers, because, whether they realize it or not, every time they share a best practice, a tip or a trick, they are influencing others.
to flatten the curve, kept our operations moving and kept kids focused on schoolwork. We’ve even spread joy, happiness and laughter with others during virtual happy hours. It hasn’t always been easy. Many of us have probably wanted to cry a little, or rip out our rapidly growing hair to express frustration and anxiety. But throughout this period, we’ve all — directly or indirectly —had an enormous influence on the world by changing our behavior. As a result of exercising this influence, each of us is a leader, and leaders make things happen. Maybe you’re thinking: “That’s not me.” “I’ve never set an example for anyone.” “Nobody follows me.” “I’m terrified of speaking in public.” “I’m quiet in meetings.” “I don’t want to be the center of attention.” “I’m not a leader.” I recently ran across a quote from Scott Adams, who created the comic strip Dilbert: “You don’t have to be a ‘person of influence’ to be influential. In fact, the most influential people in my life are probably not even aware of the things they’ve taught me.”
Change for the Better
I remember going to a first-time attendee session at my first NetVU Accelerate conference and seeing all these people who had so much passion and confidence. They were strong leaders and they had a ton of influence, and then there was little ol’ me, the millennial with two years of agency experience and no clue
During the pandemic, we’ve each had a huge influence on the world around us: in our homes and communities, and with our employers. Sheltering in place, working from home, using technology in ways we’ve never used it before and caring for others has influenced our world. We’ve worked hard 50 | INSURANCE JOURNAL | OCTOBER 5, 2020
Even a Novice
what anyone was talking about. I took a notebook full of notes with a ton of ideas for things to change or implement. Some were very simple, while others were pretty comprehensive. And then I was on my way home from the conference and the reality hit me. I felt very alone and faced many challenges. I had a ton of work waiting for me at the office. I had taken notes about some things I wasn’t confident I knew much about. And there were many at my agency with much more experience. Sound familiar? But I also had a network of people who had been in that same boat that were supporting me. I leaned on the friends I’d made at NetVU, and guess what happened? Our agency implemented a ton of changes that made our organization better. The experience made me better too. My professional network of friends helped me see the influence I could have on my agency, and it helped me become a stronger leader. Take advantage of the influence you have. You don’t have to be a manager or an agency principal to have influence. You don’t have to be the most senior staff member. You don’t have to be an extrovert. You just have to have the passion to make things better, and the courage to use your influence to do just that. Jeffress is associate vice president – business insurance and employee benefits —at Peel & Holland and chairman of the Network of Vertafore Users (NetVU.com). INSURANCEJOURNAL.COM
AN OPEN LETTER FROM AMERICA’S PROFESSIONAL INDEPENDENT AGENTS To Our Carrier Partners: This is a time of challenge for both carriers and the independent agents who sell their insurance products. A unique and unprecedented crisis is forcing all of us to innovate solutions to problems we have not had to deal with before. As 2020 began to unfold, the United States and the whole world were confronted with the effects of the coronavirus crisis. There was the initial surge of COVID-19 cases, followed by what appeared to be an easing, and then the most recent resurgence of the virus. Agencies have faced economic uncertainty and potential hardship as we continue to serve our clients while doing the work needed to stabilize the market and be the representatives of carriers to make that happen. At the same time, we face growth challenges as a result of the new business landscape. We are thankful for the various actions taken by a multitude of carriers to support us, their appointed agents, during this difficult time. It is in the interest of all in our industry to do what we can to ensure financial stability going forward. In this challenging environment, a stable, profitable book is as important as reasonable expectations for growth, especially given the COVID impact. It is important that we all adapt to the new challenges of an insurance marketplace that has changed significantly and will continue to change going forward. Some of what worked in 2019 will not necessarily be effective in 2020 and beyond. We will continue to look to our carrier partners to support our joint efforts to ensure our mutual success. Signed, Members of the National Association of Professional Insurance Agents
National Association of Professional Insurance Agents
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