Insurance Journal West 2020-11-16 by Insurance Journal

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November 16, 2020 • Vol. 98 No. 22

Contents

Idea Exchange

Special Report

News & Markets

Spotlight: How COVID-19 Is Driving the Opioid Epidemic

Q3 Global Commercial Insurance Pricing Rockets 20% Higher: Marsh

14 Insurers Face Workforce,

26 27

How Independent Agencies Can Set Themselves Apart

Thinking Ahead When Building an Insurance Agency Foundation

The Competitive Advantage: The Un-Strategy

Business Divorce

Living in a Post-Pandemic World

Closer Look: Top 50 Personal Lines Agencies

Risk, Policy Challenges as Pandemic Continues

BRONZE Best Agency to Work For – East: Stanton Insurance Group

BRONZE Best Agency to Work For – Midwest: Korotkin Insurance Group

13 New U.S. Property/ Casualty Insurer Impairments in 2019 Companies Hope to Take California Gig Worker Classification Law Nationwide

Ask the Insurance Recruiter: Two Recruiting Tools Every Insurance Agency Needs

BRONZE Best Agency to Work For – Southeast: Darr Schackow Insurance BRONZE Best Agency to Work For – West: The Buckner Co.

40 42

48 50 Closing Quote: Senior

BRONZE Best Agency to Work For – South Central: Upshaw Insurance Agency

Closer Look: 3 Ps to Consider When Managing the Risks of Assisted Living Facilities

Special Report: Young E&S Professionals Face Toughest Market They Have Ever Seen

Departments 8 Opening Note

16 Declarations

6 | INSURANCE JOURNAL | NOVEMBER 16, 2020

16 Figures

18 Business Moves

20 People

46 My New Markets

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Opening Note Write the Editor: awells@insurancejournal.com

Sexual Harassment in the Workplace

ore than seven in 10 people who experienced workplace sex harassment faced some form of retaliation — including termination, being sued for defamation and denial of promotions, according to a recent report. More than half of the workers (56%) who identified their perpetrator said they were harassed by someone they reported to at work and nearly two in five (37%) said that nothing happened to their harasser. The report, conducted by the National Women’s Law Center (NWLC), analyzed the experiences of 3,317 requests for legal help submitted to the TIME’S UP Legal Defense Fund. This report analyzed cases that came in to the TIME’S UP Legal Defense Fund between Jan. 1, 2018, and April 30, 2020. Among the report’s findings, more than one-third of people (36%) reporting workplace harassment said they experienced physical harassment, sexual assault or rape. More than one in seven people (15%) were threatened with legal action, with losing their job or even physical harm, if they told anyone about their harassment. More than one in five described how sex harassment had a devastating impact on their economic well-being. Nearly one in five said the harassment had long term negative repercussions on their mental health. “The findings reveal the courage it takes for people to come forward and report the harassment and abuse they’re experiencing in the workplace,” said Fatima Goss Graves, president and CEO of the National Women’s Law Center and a co-founder of the Fund. “Repeatedly, survivors endured abuse and once they rebuffed advances or reported it, many were fired, careers were destroyed, some became homeless — and too often, harassers got promotions.” Graves said that until harassers are held accountable, workplaces will remain unsafe for everyone. A few other report findings include: • More than seven in 10 survivors who experienced workplace sexual harassment faced some form of retaliation, including termination, being sued for defamation and denial of promotions. • More than seven in 10 people (72%) said they experienced some form of retaliation when they complained about harassment. • Of those who experienced retaliation, the most common form mentioned was being fired (36%), followed by 19% who said they received poor performance evaluations, had their work products or behavior scrutinized, or were otherwise treated poorly at work. • Individuals are turning first to their employers to report harassment, but employers are failing to take action. Nearly two in three people (64%) reported the harassment to their employer. Of people who reported harassment, nearly three in 10 (29%) said nothing was done about it.

More than seven in 10 survivors who experienced workplace sexual harassment faced some form of retaliation.

The TIME’S UP Legal Defense Fund, which is housed at and administered by the National Women’s Law Center Fund, connects those who experience sexual misconduct in the workplace or in trying to advance their careers with legal assistance. Editor-in-Chief

Andrea Wells

8 | INSURANCE JOURNAL | NOVEMBER 16, 2020

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

ADMINISTRATION / CIRCULATION

Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com

EDITORIAL

Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Elizabeth Blosfield | eblosfield@insurancejournal.com Southeast Editor/MyNewMarkets Amy O’Connor | aoconnor@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor L.S. Howard | lhoward@insurancejournal.com Columnists & Contributors Contributors: Tony Caldwell, Doug Coombs, Louis Lehot, Joe Levy Columnists: Chris Burand, Mary Newgard

SALES / MARKETING

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

DESIGN / WEB / VIDEO

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

ACADEMY OF INSURANCE

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

SUBSCRIPTIONS:

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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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AG R I B U S I N ESS

AVI AT I ON

P E R SO NAL L I N ES

PR O FESSIONAL & EXECUTIV E LIABILITY

CASUALTY

CONSTRUCTION

E N E R GY

PR O P E RTY

E N V I R O N M E N TA L

R E A L ESTATE

H E A LTH CA R E

TR A N S P O RTATI O N

LI F E S C I E N C ES

WO R K E R S’ C O M P E N SATI O N

MARINE RT BI N D I N G

News & Markets Q3 Global Commercial Insurance Pricing Rockets 20% Higher: Marsh

lobal commercial insurance pricing rocketed 20% higher on average in the 2020 third quarter, driven largely by rate hikes in three key lines, according to a new Marsh market update. Marsh said the jump was the largest since launching its Global Insurance Market Index in 2012. It also follows average rate increases hitting 19% in the 2020 second quarter and 14% in Q1. Property insurance rates along with financial and professional lines drove most of the rate hike momentum, Marsh said. Global property insurance pricing grew 21%, and global financial and professional lines saw rate increases hitting 40% on average.

10 | INSURANCE JOURNAL | NOVEMBER 16, 2020

Lucy Clarke, president, Marsh JLT Specialty and Marsh Global Placement, said the rate hikes are stemming largely from pandemic-related market uncertainty. “Uncertainty, particularly related to COVID-19, and loss experience in many lines have both contributed to this three-year trend of increasing insurance costs,” Clarke said in prepared remarks. “For many clients these conditions are occurring at a time when they can least withstand them, and are leading many companies to rethink their insurance buying patterns including increasing retentions, reducing limits, and modifying policy terms and conditions.”

Among the Marsh report’s additional Q3 findings: • Casualty pricing increased an average of 6%, versus 7% during the second quarter. • Latin America saw average rate hikes of 9% for commercial insurance pricing, making it the only region without double-digit increases. The UK (33%) and the U.S. (18%) led the pack. • Price increases in all regions were either equal to or greater than reported Q2 2020 price increases. • D&O pricing in the U.S. and Australia jumped more than 100%. U.S. pricing for the coverage grew nearly 60% on average. • More than 90% of U.S. public company D&O clients reported a price increase. INSURANCEJOURNAL.COM

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News & Markets Insurers Face Workforce, Risk, Policy Challenges as Pandemic Continues

iven that business-as-usual is unlikely to return soon due to the coronavirus pandemic, U.S. property/casualty insurers will continue to face challenges related to virus-related insurance losses and premium volume declines in 2021, according to Fitch Ratings. The operational and risk management challenges of managing workforce flexibility, limiting risk aggregations and reducing claims exposure through clarity of policy terms will endure beyond the pandemic and become “new normal” longer-term drivers of the industry, contend analysts James Auden and Christopher Grimes, authors of “The Next Phase: U.S. Property/ Casualty Insurers.” The analysts estimate that incurred losses from coronavirus claims have reached approximately $8 billion for North American publicly-traded insurers to date and approximately $23 billion, including large global (re)insurers. However, Fitch warns that settlement litigation in some segments could take years and ultimate insured losses will depend on uncertain factors, including: the duration of the pandemic, extent of economic shutdowns from potential future waves of large-case outbreaks, the timing of a return to more normal business and social activity, and the speed and strength of the economic recovery. Higher pricing following recent losses, 14 | INSURANCE JOURNAL | NOVEMBER 16, 2020

compounded by fear and uncertainty of pandemic-related claims, has led to tighter underwriting terms and conditions in many areas, with commercial lines rate increases unseen since 2003. The Council of Insurance Agents & Brokers quarterly Commercial P/C Market Index Survey reported a renewal rate increase of 10.8% for the second quarter. While changes in market conditions do boost the potential for profit improvement when pandemic-related losses subside, larger underwriting profits are required to generate adequate returns to offset investment income declines as a result of persistently low interest rates. “Sharp changes in commercial lines pricing and underwriting conditions provides the industry with a chance for profit improvement when pandemic-related losses subside, though premium revenues in some segments face pressure from exposure reductions tied to economic disruption,” the authors add. According to the report, business interruption (BI) claims are a large source of uncertainty. Even though insurers seem to be winning in courts with their argument that BI requires causation from physical damage to property is largely succeeding in court rulings, the industry remains “vulnerable to future adverse judicial and retroactive legislative actions” in BI and other segments, Fitch advises.

Fitch analysts are also watching directors and officers (D&O), employment practices liability and various errors and omissions coverages where claims from allegations of negligence tied to poor loss prevention or preparation for a pandemic are possible. D&O losses may be influenced by future business bankruptcies and a return to economic growth. Also, the report cautions that personal automobile and workers’ compensation lines that are currently generating favorable results are likely to “show future deterioration from a return to more normal claims trends and competitive pressures on rates.” In workers’ compensation, while virus-related catastrophic claims have been relatively limited, Fitch sees a risk of permanent disability claims going forward. “A slower economic recovery and more persistent unemployment levels could have a more lasting impact on workers’ compensation loss experience ahead,” the report says. The reality that many aspects of “normal” business and social interactions are unlikely to fully return creates challenges in assessing and pricing risk for insurers. “The pace of economic recovery and return to more normal activity will influence claims frequency trends in segments with large recent declines, including automobile and workers’ compensation,” according to the report.. INSURANCEJOURNAL.COM

Life Insurance & Long-Term Care

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Figures

$2.3 Million

$3 Million

The amount the Wisconsin Republican Party in late October reported as having been stolen by hackers from an account used to help reelect President Donald Trump. The party noticed the suspicious activity on Oct. 22 and contacted the FBI on Oct. 29, Republican Party Chairman Andrew Hitt told the Associated Press.

Brandon Gonzales, who was arrested and charged with murder a year ago in a fatal shooting near Greenville, Texas, before being cleared is suing the county sheriff’s office, sheriff and law enforcement officials for more than $3 million. The lawsuit alleges false arrest and imprisonment and malicious prosecution. Gonzales moved to Florida after his release but said the arrest “ruined his life” and that he is still recognized as having been charged with murder.

Declarations Kansas Crop Risk

“Kansas is having a relatively larger increase in crop risk as a response to a one-degree Celsius warming, compared to the other parts of the country.” — Jisang Yu, assistant professor of agriculture economics at Kansas State University, comments on a university-published study that says growing corn and soybeans in Kansas will be increasingly challenging as the climate warms. The study found that drought and heat are currently the biggest reason for crop yield losses and expects that these losses will become more common because of climate change, especially in states that depend heavily on irrigation.

16 | INSURANCE JOURNAL | NOVEMBER 16, 2020

Better Protection Needed

“I feel like they should provide us with better protection by having the masks be mandatory, not just for us but for customers.” — Jamelia Fairley, a single mother who works at a McDonald’s in Florida, said in an Associated Press report that managers initially told her to make masks out of coffee filters and hairnets. She now gets protective gear but said workers often have to serve customers who refuse to wear masks. Fairley, who has seen her weekly hours cut nearly in half, has joined a strike to support raising Florida’s minimum wage to $15 an hour.

A Dropped Bomb

“The middle of the island looks like a bomb was dropped.” — Dodie Vegas describes the impact of Hurricane Zeta on the Louisiana barrier island where, along with her husband, she owns Bridge Side Marina. After making landfall on the southeast Louisiana coast, near Cocodrie, on the evening of Oct. 28 with 110 mph winds, Zeta broke through Grand Isle’s levee and devastated the popular waterside getaway and recreational fishing destination with a population of about 1,500.

INSURANCEJOURNAL.COM

$166 Million

$455,000

That’s how much California regulators are being asked to fine Pacific Gas & Electric for failing to properly inform customers before it cut power to millions of people last year. The sweeping outages without proper notification were “a major public safety failure,” according to a brief by the Public Advocates Office.

The amount LaGrange, Ga., will pay to settle a lawsuit with civil rights groups over claims the city illegally restricted access to utility services that disproportionately affected Black and Latino residents. The plaintiffs — including the Georgia NAACP, the National Immigration Law Center and individual residents — said in their 2017 federal lawsuit that the city threatened to cut off residents’ utilities if they could not provide a Social Security number and a photo ID issued by the state or federal government, or if they didn’t pay outstanding municipal court fines. They argued the policies violated the federal Fair Housing Act, which prohibits discrimination on the basis of race, color or national origin.

Establishing Confidence

“We want drivers of rental cars in New Jersey to be confident that they aren’t being taken for a ride.” — New Jersey Attorney General Gurbir S. Grewal said regarding a discount car rental company operating out of Newark and JFK Airports that has agreed to pay $80,000 in penalties, enter binding arbitration to resolve consumer complaints and change its policies and practices following the New Jersey Attorney General’s Office and the Division of Consumer Affairs’ investigation into alleged fraudulent activity. A consent order with Drivo LLC d/b/a Drivo Rent-A-Car resolves the division’s allegations that Drivo violated New Jersey’s Consumer Fraud Act (CFA).

INSURANCEJOURNAL.COM

ISeeFloods

“We’re really trying to center the residents in that experience, rather than center the tides all the time. If we don’t understand how those three feet are really affecting people, then we don’t know how to plan for it.” — Jared Genova, strategist and business development director for ISeeChange, an app that allows residents to report coastal flood incidents to cities. Miami, Florida, is asking residents to use the app to report king tides, or the highest tides, in their neighborhoods. The city is developing a new stormwater master plan designed to address flooding across the city.

California Wildfires

“Absent a reorientation of California’s approach to wildfire, these alarming trends are likely to worsen.” — A recent report from CoreLogic shows California is home to 76% of the residences on its the top 10 list of homes at elevated risk of wildfire.

NOVEMBER 16, 2020 INSURANCE JOURNAL | 17

Business Moves

East

Griffin Owens Insurance Specialists, Leavitt Group

Griffin Owens Insurance Specialists has affiliated with Leavitt Group. Agents and staff will continue to work with clients from their current location following the affiliation. The affiliation will not affect current accounts, and clients will continue to work with the same personnel with whom they are familiar. Leavitt Group is a privately-held insurance brokerage. Through its association with Leavitt Group, Griffin Owens Insurance will be able to provide clients with greater insurance market access and a range of value-added services and resources.

Alera Group, FNL Insurance Group

Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, has acquired FNL Insurance Group, effective August 1, 2020. For more than 40 years, FNL Insurance Group has been helping clients with their employee benefit and health care insurance needs. The firm is located in Timonium, Md., where it partners with small and mid-sized employers to develop sustainable benefits programs that support employees while keeping costs low. Based in Deerfield, Ill., Alera Group’s more than 2,000 employees serve thousands of clients nationally in employee benefits, property and casualty, retirement services and wealth management. 18 | INSURANCE JOURNAL | NOVEMBER 16, 2020

FNL joins Alera Group through Silberstein Insurance Group (SIG), an Alera Group company. The FNL team will continue serving clients in their existing roles.

Midwest

Plexus Groupe, D.H. Tank Insurance

The Plexus Groupe has acquired D.H. Tank Insurance Agency located in the Chicago suburb of Naperville, Ill. Founded in 1968, the Tank Agency is an independent insurance agency specializing in commercial property and casualty and personal lines with an expertise in marine insurance placements worldwide. Tank Agency President Deane H. Tank Jr. joins Plexus as vice president of Business Development. The transaction is the third Plexus acquisition of 2020. Earlier this year, Deer Park, Ill.-based Plexus expanded its national presence by acquiring two Tampa Florida agencies: Artisan Insurance Group and Community Insurance Group. The Plexus Groupe, founded in 1990, offers employee benefits, property and casualty insurance, corporate retirement plans, personal lines insurance, benefits technology services, and mergers and acquisitions services. In addition to Deer Park, Plexus has locations in Atlanta, Chicago, Dallas, Los Angeles, Oklahoma City and Tampa.

ReAlign Insurance Holdings, Summit Specialty

ReAlign Insurance Holdings LLC has

formed Summit Specialty Insurance Co., a new surplus lines insurance carrier based in Nebraska. A wholly owned subsidiary of ReAlign Insurance Holdings Inc. and headed by Timothy McAuliffe, Summit Specialty has received the necessary regulatory approvals to operate as a surplus lines insurer and expects to begin underwriting activity in late 2020. The new carrier is working to achieve authorization to commence underwriting activity in markets across the country in early 2021. McAuliffe, a former Ironshore and AIG specialty casualty executive, also serves as president of ReAlign subsidiaries, Dallasbased National Lloyds Insurance Co. and American Summit Insurance Co. ReAlign’s Nebraska launch comes on the heels of its acquisition of these specialty insurance providers in July. ReAlign Insurance Holdings LLC is an insurance holding company formed by ReAlign Capital Strategies LLC and private investors to acquire and own broadly licensed admitted and surplus lines insurance companies focused exclusively on the specialty program insurance marketplace in the U.S.

South Central

AccuRisk Solutions, Convex Group

AccuRisk Solutions has teamed up with Convex Group to offer occupational accident and employer’s liability coverage to Texas employers that have opted out of workers’ compensation. AccuRisk said the partnership allows it to increase its market share in the occupational insurance arena as well as provide enhanced service to producers and their clients. With operations in London and Bermuda, Convex Group is a specialty insurer and reinsurer focused on complex risks founded by Stephen Catlin and Paul Brand.

Higginbotham, Brisky & Perez Insurance Agency

Independent insurance agency, Higginbotham, and Brisky & Perez INSURANCEJOURNAL.COM

Insurance Agency, an independent firm in Brownsville, Texas, have merged operations, expanding Higginbotham’s reach in South Texas. Both firms broker commercial and personal property and casualty insurance, employee benefits and individual life and health insurance. The union marks Higginbotham’s entrance into Brownsville and adds eight insurance professionals to its coastal region operations for a total of 110. Albert L. Perez Jr. and Linda Brisky Perez, husband and wife owners of Brisky & Perez, will continue leading the office as Brisky & Perez Insurance Agency, A Higginbotham Company. They will collaborate with Higginbotham’s nearby offices in McAllen, Corpus Christi and Victoria to enhance service to coastal customers. Brisky & Perez Insurance Agency dates back 51 years in Brownsville, Texas. Originated as Brisky Insurance Agency, owners Walter and Rusty Brisky sold it to daughter Linda Brisky and her business partner Albert L. Perez Jr. in 1986. The partners married a year later. Through two subsequent agency acquisitions, they expanded their capabilities in all lines of commercial and personal property and casualty insurance and financial services. Higginbotham was founded in 1948 and is headquartered in Fort Worth, Texas, with more than 45 additional offices statewide and in Oklahoma, Georgia, New Mexico and California.

Southeast

USI Insurance, Findley

USI Insurance Services has entered into a definitive agreement to acquire Nashville, Tenn.-based Findley Inc. Subject to customary closing conditions, including regulatory approvals, the transaction is expected to close in November 2020. Founded in 1969, Findley is an independent human resources and employee benefits consulting firm, providing actuarial, benefits and administrative consulting services to private and publicly held companies, the public sector and non-profit organizations. INSURANCEJOURNAL.COM

Findley employs more than 250 associates, serving clients across the country from seven office locations in the Midwest and Southeast. The firm serves organizations ranging from small employers to those with more than 200,000 employees in many industry sectors including healthcare, manufacturing, professional services, retail, financial institutions, nonprofits, multi-employers and government entities. Upon the completion of the transaction, Findley’s actuarial and retirement practices will be joined together with the resources of USI Consulting Group, a provider of defined contribution and defined benefit plan consulting and administration services, to form a national specialized retirement business. Findley’s human capital and health and group benefits practices will also be joined together with USI’s employee benefits resources as an employee benefits consulting and brokerage firm. Valhalla, N.Y.-USI offers property and casualty, employee benefits, personal risk, program and retirement services to large risk management clients, middle market companies, smaller firms and individuals.

Risk Strategies, LaRocca & Associates

Risk Strategies, a privately held national insurance brokerage and risk management firm, has acquired LaRocca & Associates Inc., a specialty brokerage with expertise in health and welfare benefits across several industries. Established in 1980, LaRocca & Associates focuses on employee benefits and property and casualty insurance. It has offices in Miami and Fort Lauderdale, Fla., as well as Atlanta. LaRocca & Associates’ clients include businesses in a variety of industries, from manufacturing to service and hospitality, educational facilities and municipalities and non-profit organizations. LaRocca & Associates also brings a team of health care industry practitioners. According to the company, LaRocca & Associates will now have access to a national platform of products, services and business expertise across specialty practices and industries.

In addition to developing employee benefits programs, LaRocca & Associates also assists clients with compliance administration, technology consulting, employee education, analytics and benchmarking, human resource assistance, human capital management consulting and health and wellness strategies. Risk Strategies is a privately held, national firm with offices across the country. The brokerage offers risk management advice as well as insurance and reinsurance placement for property and casualty, health care and employee benefits risks. Risk Strategies serves commercial companies, non-profits, public entities and individuals and has access to all major insurance markets. Risk Strategies has offices in more than 75 locations nationwide.

West

R.E. Chaix & Associates, National Advantage

R.E. Chaix & Associates Insurance Brokers Inc. has purchased the assets of National Advantage Insurance Services Inc. in Tustin, Calif. National Advantage Insurance Services specializes in commercial auto, propert and casualty and personal lines. R.E. Chaix & Associates is headquartered in Orange County, Calif., and has multiple locations throughout the state. R.E. Chaix & Associates, which is licensed in all 50 states, offers products in property and casualty, professional liability, workers’ compensation, environmental, marine, garage liability, commercial auto, oil and gas, personal lines and special programs.

CRC Group, W. Brown & Associates

CRC Group has completed its acquisition of W. Brown & Associates Property & Casualty, an Irvine, Calif. -based surplus lines broker and managing general agency. Brown & Associates will be part of CRC Group’s Commercial Solutions Division. W. Brown & Associates Aviation was not included as part of the transaction. CRC Group is a wholesale and specialty insurance products. NOVEMBER 16, 2020 INSURANCE JOURNAL | 19

People National

Brokers Guy Carpenter and Marsh, two business units of Marsh & McLennan, announced the appointment of Dean Klisura as president of Guy Carpenter, effective October 1, 2020. In this Dean Klisura newly-created role, Klisura will be responsible for Guy Carpenter’s North America, International, Specialty, and Global Strategic Advisory units and will assist Guy Carpenter CEO Peter Hearn in leading the firm’s overall strategy. Klisura is moving to Guy Carpenter following a 27 year career at Marsh in a variety of senior roles, most recently as president of Global Placement and Advisory. He has also served as global leader of Marsh’s FINPRO Practice, global placement leader for FINPRO and as U.S. Risk Practices and Specialties leader. He will continue to be based in New York. Following Klisura’s transition to his new role, Lucy Clarke, president of Marsh JLT Specialty, will assume additional responsibility for Marsh’s Global Placement operations that Klisura has headed. Marsh Advisory, also formerly part of Klisura’s portfolio, will now report to Flavio Piccolomini, president of Marsh International, and Martin South, president of Marsh U.S. and Canada. Specialty insurer Ascot has started an Excess & Surplus Casualty division for the U.S. and appointed Matthew Roy

as senior vice president for the new wholesale unit. Writing exclusively on a wholesale basis, the division will focus on middle market business in targeted industry groups including construction, manufacturing and hospitality. The new division will initially focus on general liability and auto liability, along with supported and unsupported excess liability. Roy joins Ascot from AXA XL where he was assistant vice president of E&S Primary Casualty. Prior to this, he served as vice president and Northeast regional manager for Wholesale Casualty at Everest Insurance. Based in New York, he will be supported by underwriters in New York, Chicago and Atlanta.

East

IAT Insurance Group has named Chris Fox to its reinsur-

ance business unit as managing director. He is based in IAT’s Newark, N.J., office. Fox comes to IAT after 12 years with Everest Re in both domestic and international Chris Fox positions, most recently as vice president of structured solutions. During his time at Everest, he held roles involving actuarial, underwriting, investment analysis and enterprise risk management. Global law firm Clyde & Co has hired insurance lawyer Marc Voses as a partner in New York to further enhance its U.S. and global insurance practices. Voses joins from Goldberg Segalla, where he was chair

20 | INSURANCE JOURNAL | NOVEMBER 16, 2020

of the Cybersecurity and Data Privacy Group. His practice focuses on handling coverage issues and disputes arising under insurance policies, including cyber, technology and media, energy, directors and officers, management and professional liability and general commercial liability. He also assists insurers in drafting insurance policies covering risks such as cyber, energy, property, technology and management liability. He frequently advises clients concerning data privacy regulations, pre-breach planning and post-breach response, ransomware payment negotiation, fraudulent funds transfer response and recovery, digital assets, business interruption losses and cyber subrogation. The hiring of Voses follows the appointment of cyber specialist Ian Birdsey from Pinsent Masons in London in July.

Southeast

Insurance Office of America (IOA) has promoted Robert J. Peters to the role of chief

operating officer (COO). Peters formerly held the role of COO as part of his more than 25 years of experience in the insurance industry. Peters joined IOA in 2019 as senior vice president of insurance operations. Since then, he has played a role in enhancing the company’s performance as well as transitioning operations in response to the COVID-19 pandemic. Robert Peters In his new role, Peters will lead the company’s ongoing operational transformation and oversee the delivery of

new products and services for clients as well as improved technology capabilities. In addition to his new position, Peters has been appointed to the board of directors as its newest member.

Palomar Insurance Corporation has added Jeremy Dickey as Operations

manager. As a specialist in standardizing, modifying and expediting systems, his focus will be improving methods and planning for personal and commercial insurance programs. Dickey has 20 years of experience as an active duty U.S. Air Force (USAF) officer, combat search and rescue pilot and wing safety commander. Dickey was commissioned as a Second Lieutenant into the USAF and ultimately became an HC-130J Jeremy Dickey Combat Search and Rescue Pilot. He deployed eight times around the world and focused on Air Force Safety Standards and Evaluation. He retired as a Major in July. Palomar Insurance offers management and insurance programs to U.S. and international companies. It is headquartered in Montgomery, Ala., with offices in Georgia and Tennessee.

Beecher Carlson Insurance Services LLC, a specialized

large account insurance broker, has promoted Raven James to director of Diversity & Inclusion (D&I). In this newly created role, James will lead the D&I council in setting D&I strategies for Beecher Carlson. She will INSURANCEJOURNAL.COM

join the company’s executive leadership team and report to Beecher Carlson CEO Joe Siech. She will also be responsible for aligning D&I goals and strategies with Beecher Carlson’s parent company, Brown & Brown, and its Diversity, Inclusion, & Belonging Task Force’s initiatives. James will continue leading the team resources department for Beecher Carlson as vice president of Team Resources. Prior to joining Beecher Carlson, James worked with Liberty Mutual and DHL Supply Chain, establishing initiatives within the workplace to engage teammates and create a competitive edge.

South Central

LP Risk Inc., a part of national specialty insurance distribution company XPT Partners, has hired Alicia Calhoun as senior vice president. Based in Houston, Calhoun will focus on brokerage business with a specialty in energy and construction. Calhoun has 20 years of industry experience. Most recently, she has held positions as senior vice president and practice leader at insurance firms with an emphasis on market and program development. LP Risk Inc. is a full service managing general agency and surplus lines broker. Insurance brokerage IMA Inc. has appointed Ricky Bryan as executive vice president and director of Houston Energy in the company’s new office in Houston. Bryan joins IMA after 15 years in leadership roles at Marsh JLT Specialty as senior vice president and as director INSURANCEJOURNAL.COM

at John L. Wortham & Son. Throughout his career, Bryan has worked with downstream and midstream energy companies, excelling in complex property placements for oil, gas and petrochemical clients.

Midwest

POWERS Insurance & Risk Management in St. Louis, Mo., hired Julia Gonzalez as

Personal Lines sales marketer. Gonzalez will handle the marketing efforts for all personal lines accounts. This includes developing new client lead opportunities, as well as managing client retention support programs. Gonzalez has more than five years of experience in the insurance industry. She previously served in numerous capacities, including as a licensed producer, insurance specialist and customer service representative. POWERS Insurance & Risk Management provides personal and business insurance, surety and risk management. Chicagobased

AccuRisk Julia Gonzalez Solutions LLC named David Przesiek as CEO of Tactical

Risk Solutions. Formerly a senior vice president and chief sales officer for Fallon Community Health, Przesiek is a 25-year veteran of the health insurance industry. At Fallon, Przesiek was responsible for all product lines, including commercial sales and government programs, market research, business and product development, as well as UltraBenefits Inc. and Group Insurance Service Center Inc.,

Fallon’s third-party administrators. AccuRisk Solutions LLC is a Chicago-based managing general underwriter that partners with insurance carriers and healthcare visionaries to provide healthcare and employee benefit solutions.

Bob Gulino has been appointed as head of The Hartford’s Central Division

for the company’s middle and large commercial insurance business. Gulino now leads the sales and underwriting operations for the company’s independent agents, brokers and customers across 13 Midwestern states from Minnesota to Texas. He reports to Tracey Ant, head of field operations and general industries for middle and large commercial insurance. Gulino joined The Hartford in 1999 as a middle market underwriter and has held a number of leadership positions in middle Bob Gulino and large commercial from assistant regional vice president to branch manager in St. Louis, and most recently, regional vice president.

West

IMA Inc. has named Michael Hennessey as vice president and cannabis national practice leader. Hennessey is based in California. He will lead business development and client service efforts across the U.S. He joins IMA after holding a leadership role at ABD Insurance and Financial Services, where he served the

cannabis space in addition to technology, real estate and life science enterprises. MA Financial Group is an independent, employee-owned insurance broker specializing in property and casualty insurance, employee benefits and surety bonds. It is a subsidiary of the IMA Financial Group Inc.

Cline Agency has named “Skip” Robert Raymond Rawstron III as its real

Skip Rawstron

estate practice leader based in Los Angeles, Calif. Rawstron specializes in commercial real estate. He has owned an agency and has been a producer at several national agencies. Cline Agency specializes in insurance and risk management for common interest developments.

MJ Insurance has named Leighann Sargent as director

of personal insurance. Sargent is based in Phoenix, Ariz., and will lead MJ’s Leighann Sargent personal insurance strategy operations and support the company’s growth. Sargent comes to MJ from BridgePoint Risk Management, where she served as senior vice president and regional director. MJ Insurance is a privately-held insurance agency with offices in Phoenix and Indianapolis offering commercial and personal insurance, risk management and employee benefits consulting.

NOVEMBER 16, 2020 INSURANCE JOURNAL | 21

News & Markets 13 New U.S. Property/Casualty Insurer Impairments in 2019 Majority Comprised of Commercial Insurance Lines Exhibit 1 Impairment Review

US Property/Casualty

2019 US P/C Impairments

State of Domicile IL

Company Name American Country Insurance Co.

Rehab 7/8/2019

Liquidation Primary LOB 8/11/2020 Commercial Auto

Group Affiliation Atlas Financial

American Service Insurance Co., Inc.

7/8/2019

8/11/2020 Commercial Auto

Broadway Insurance & Surety Co., Inc.

3/22/2019

Surety

Atlas Financial

Capson Physicians Insurance Co.

2/11/2019

Florida Specialty Insurance Co.

Gateway Insurance Co. INTEGRAND Assurance Co.

IL PR

10/18/2019 5/31/2019

Lancet Indemnity Risk Retention Group, Inc. Northwestern National Insurance Co. of Milwaukee, WI Physicians Casualty Risk Retention Group, Inc. Physicians Standard Insurance Co.

NV WI

4/12/2019

AL KS

8/16/2019 8/20/2019

8/10/2020 Medical Professional Liability 12/1/2019 Medical Professional Liability

Spirit Commercial Auto Risk Retention Group, Inc. Windhaven Insurance Co.

NV FL

2/27/2019 12/12/2019

10/24/2019 Commercial Auto 1/6/2020 Private Passenger Auto (Nonstandard)

6/28/2019 Medical Professional Liability 10/2/2019 Homeowners 6/10/2020 Commercial Auto 9/25/2019 CMP, Private Passenger Auto (Nonstandard) 4/9/2020 Medical Professional Liability 5/2/2019 Assumed Reinsurance – Property

Atlas Financial

Northwestern National

Windhaven

Source: AM Best data and research

during the period, and 37 remained open as of this report. In addition, there were 55 conservatorships, all of which led directly to either rehabilitation or liquidation.

he U.S. property/casualty industry saw 13 new insurance company impairments in 2019, two more than in 2018, involving entities operating in a mix of lines of business and a variety of states, according to a new AM Best special report. The Best’s Special Report, titled, “2019 U.S. Property/Casualty Impairments Update,” states that four impairments of medical professional liability writers, and another four commercial auto writers, led the 2019 impairments. Overall, from 2000 to 2019, there were 388 property/casualty insurers impairments, according to AM Best. “These impairments consisted of 314 insolvent liquidations and 74 rehabilitations, of which 37 were closed during the period; 37 remained open as of this report.” Primary line of business details was determined for 380 of the 388 impairments as well, and for these 380 impairments, the leading line of business was workers’ compensation, which accounted for 26% of the impairments. AM Best defines impairments as a situation in which a company has been placed, via court order, into conservation, rehabilitation, or insolvent liquidation. Supervisory actions undertaken by insurance department regulators without court order are not considered impairments, 22 | INSURANCE JOURNAL | NOVEMBER 16, 2020

Exhibit 2 US P/C Impairments by Primary Line of Business, 2000-2019

We reviewed the primary lines of business of the companies in the years on unless delays orimpaired limitations were placed leading up to impairment and identified policyholder payments. the line of business for 380 of the 388 lines insurers had more Personalimpairments. The leading line of business wasthan workers’ compensation, impairments workers’ compwhich insurers. accounted for 26% of the impairments. Personal lines insurers accounted for 28% Personal lines insurers accounted for of all impairments, split between private 28%, split between private passenger passenger auto auto(19%) (19%) homeowners andand homeowners (9%). Private passenger auto can be furtheraccounted broken down (9%). Commercial lines insurers as standard (10%) and non-standard auto for 22%, split between other liability/cominsurers (9%). Commercial lines insurers mercial multi-peril (14%) commercial accounted for 22%, and split between other with the remaining 24%(14%) in and auto (8%), liability/commercial multi-peril commercial auto (8%). The remaining 24% specialty lines. was split among specialty lines (Exhibit 2).

No. of Companies

% of Total

Workers' Compensation

25.8

Private Passenger Auto – Standard

10.0

Private Passenger Auto – Non Standard

9.2

Homeowners

8.7

Other Liability, CMP

14.2

Commercial Auto

7.6

Medical Professional Liability

8.4

Title

3.7

Surety

3.7

2.1

2.6

Primary Line of Business

Financial / Mortgage Guaranty Warranty

There were specific causes identified for Other 15 3.9 96Impairment insurersWe impairments. Total 380 100.0 Review US Property/Casualty identified specific causes for 96 of the alleged fraud the fraud leading Fraud orimpairments. Source: AM Best data and research Fraud was or alleged was the Impairments the ofwhile a cause ofin 24 impairments, 22 Exhibit 3 cause, andleading was present in 24context impairments, company’s organizational structure were related primarily to affiliate problems. US P/C Impairments – Specific while 22 were related primarily to affiliate were also part the review. As Catastrophe lossesofcaused 21 impairments, whileCauses, 16 companies became impaired after 2000-2019 problems. experiencing expected, stock rapid companies—the growth. Investment losses were a significant factor in 11 impairments. One No. of 21 impair Catastrophe mostlosses common structure in theof reinsuranceCauses insurer becamecaused impaired because failure;Noted another company was placed into Companies industry—accounted forwarranty 73% of total liquidation after marketing insurance products withoutora alleged license (Exhibit 3). ments, while 16 companies became Fraud – adjudged 24 impairments. Affiliate problems 22 impaired after experiencing rapid growth. Catastrophe losses 21 InvestmentThe losses significantinfactor rise were in RRGaimpairments recent Rapid growth 16 years continued in 2019, accounting for in 11 impairments. Investment losses 11 three of the 13impaired impairments. Duringof 2 became because One insurer Reinsurance failure 1 the 2000-2019 period, 41 RRGs became Unlicensed insurance product 1 reinsuranceimpaired, failure and another company representing 11% of the total. Total 96 was placed They into liquidation accounted for after 4% of marketing impairments Source: AM Best data and research during 2000-2005, 11%without in 2006-2010, warranty insurance products a 18% during 2011-2015, and 18% in 2016of the total. To some extent, the growth license. 2019. To some extent, the growth in RRG impairments reflects the growth in the structure’s in RRG impairments reflects the growth The rise in risk retention group (RRG) popularity, but they may also be due to business plans with unrealistic loss, operating expense, in the structure’s popularity, but operations they may impairments inpricing recentassumptions years continued in and as these self-insurance entities are formed and undertake (Exhibit also be due to business plans with unreal2019, accounting for4).three of the 13 impairistic loss, operating expense, and pricing ments. During the 2000-2019 period, 41 Exhibit 4 assumptions as these self-insurance. RRGs became impaired, representing 11% US P/C Impairments by Organizational Type, 2000-2019 Stocks

Mutuals

Reciprocals

RRGs

2000-2005

129

2006-2010

Years

% Other % Total INSURANCEJOURNAL.COM 4

164

News & Markets Companies Hope to Take California Gig Worker Classification Law Nationwide By Tina Bellon and Munsif Vengattil

ig economy companies want to turn California voters’ decision to make ride-service drivers contractors into a model for the nation, as several states consider requiring drivers from Uber, Lyft and rival services be treated as employees with higher compensation. Voters in California approved a ballot proposal on November 3 by Uber Technologies Inc., Lyft Inc. and its allies that cements app-based food delivery and ride-hailing drivers’ status as independent contractors, rather than employees. Uber’s shares rose 12%, while Lyft jumped 9%. The companies, along with DoorDash, Instacart and Postmates, poured more than $205 million into the campaign. According to California figures, 58% supported the measure. The results are incomplete and must still be certified. The ballot measure, known as Proposition 22, carves an exception for ride and delivery companies in a controversial state labor law and offers gig workers some healthcare, minimum pay and other benefits. The state had said gig workers would have to be treated as employees under the law. “Now, we’re looking ahead and across the country, ready to champion new benefits structures that are portable, proportional, and flexible,” DoorDash Chief Executive Officer Tony Xu said in a statement. Uber, which is scheduled to report third-quarter results after the bell on Thursday, in an email to California customers on Wednesday said the vote paved the way for a more secure future for app-based workers. “We’ll continue to advocate for drivers everywhere, because we agree that they deserve better,” the email said. Uber, Lyft and others have long advocated for what they consider a “third way” in employment law by fusing contractor status with limited benefits. Labor groups INSURANCEJOURNAL.COM

have dismissed the proposal as creating a new underclass of workers with fewer rights and protections. Trend-setting California passed the first state law requiring companies that control how workers do their jobs to classify those workers as employees, and others have followed. Democratic states including New York, New Jersey, Connecticut, Washington, Oregon and Illinois have introduced similar laws or launched audits against gig companies and Massachusetts in July sued Uber and Lyft over allegedly misclassifying their drivers. Massachusetts’ attorney general said the state’s case against Uber and Lyft would continue. The question of whether gig workers should be treated as employees has also become a national issue in U.S. politics and the presidential campaign, dividing Democrats and Republicans. Democratic presidential candidate Joe Biden has voiced strong support for

California’s labor law, while the U.S. Labor Department under President Donald Trump has published a rule that would make it easier to classify workers as independent contractors. Lyft’s Chief Policy Officer Anthony Foxx in a statement on Wednesday said Lyft stood ready to work with all interested parties, including drivers, labor unions and policymakers, to build a stronger safety net for gig workers. Stephen Ju, a Credit Suisse analyst, in a note on Wednesday said Proposition 22’s success may stunt other regional efforts to change classification. Reclassifying drivers in California could have amounted to more than $392 million each for Uber and Lyft in annual employee-related costs, a Reuters calculation showed. The companies warned they could cut 80% of drivers, double prices and even leave California, their home market, if they lost.

Spotlight: Workers' Compensation

Crisis Within a Crisis:

How COVID-19 Is Driving the Opioid Epidemic By Elizabeth Blosfield

hile the current national health conversation has largely centered on the COVID-19 pandemic, which has resulted in more than 200,000 deaths in the U.S. alone and more than a million worldwide according to recent World Health Organization (WHO) data, another ongoing and deadly battle has beaen looming in the background: the opioid crisis. The misuse of and addiction to opioids, including prescription pain relievers, heroin and synthetic opioids such as fentanyl, started becoming widespread in the U.S. in the late 1990s and found its way to the top of the national health radar in 2017 when President Donald Trump officially declared it a public health emergency. Although the nation’s focus may have shifted to the coronavirus pandemic in recent months, the opioid crisis not only remains a challenge, but also may have worsened due to COVID-19. That’s according to speakers during a webinar co-hosted by the American Property Casualty Insurance Association (APCIA) and the U.S. Chamber of Commerce. “The impact that COVID-19 has had on the opioid addiction crisis in the U.S. has been staggering,” said APCIA President and CEO David Sampson. Drug overdose deaths in the U.S. rose 4.6% in 2019 to 70,980, including 50,042 involving opioids, according to data from the Centers for

Disease Control and Prevention (CDC). What’s more, many U.S. states are now reporting a significant rise in drug fatalities for 2020 as COVID-19 has created new obstacles contributing to increased opioid use, abuse and risk of relapse for those in recovery, Sampson said. “For those battling addiction, quarantine and social distancing have resulted in disruptions of treatment and recovery services and limited access to mental health services and peer support,” he said. “Additionally, interrupted routines, loss of work, housing and prolonged stress.” Because opioid use affects respiratory and pulmonary health, those using opioids and other substances are also more susceptible to COVID-19, compounding these two crises, Sampson said.

More Than a Health Issue

With this in mind, speakers added that private/public partnerships will be instrumental in fighting the opioid addiction emergency going forward. “Yes, it’s personal and yes, it’s emotional, but it also impacts business,” said Suzanne Clark, president of the U.S. Chamber of Commerce. “It impacts entire communities. It impacts your workforce. It impacts the economy. And so they’re reasons for business leaders to be at the table and to be part of the solution.” James Carroll, director of the U.S. Office of National Drug Control Policy, agreed, applauding insurance compa-

24 | INSURANCE JOURNAL | NOVEMBER 16, 2020

nies that have stepped up to provide reimbursement for addiction treatment services. Carroll said the current administration has been working to fund these services that are provided through small businesses, hospitals and specialty treatment facilities. “The COVID-19 pandemic has affected everyone, but it has especially affected those in or seeking treatment and long-term recovery [for addiction],” he said. “We know that many are unable to access medication, counseling, recovery support services or mutual aid and response. This administration has mobilized the entire federal government to confront this problem.” Carroll serves as the principal advisor to the President of the United States on drug policies and works to coordinate activities between 16 federal government agencies and departments on behalf of the administration’s effort to reduce

the supply and demand of illicit substances. “We have to be relentless to erase the stigma and address [the opioid crisis’] impact,” he said. It’s an impact that has been far-reaching, not only serving as a public health issue but also an issue of social and economic well-being, according to the National Institute on Drug Abuse. This is why insurers like The Hartford have moved to combat the effects of this crisis. “During COVID-19, unfortu-

INSURANCEJOURNAL.COM

nately, the numbers are going the wrong way,” said The Hartford Chairman and CEO Christopher Swift. “So, we have to double down our efforts.” As a large workers’ compensation provider, The Hartford is working to fight the opioid crisis by providing access to education and programs to reduce opioid use nationwide. This effort, Swift said, will require federal, state and local governments to explore options for increased partnerships with the private sector. “I think it’s a fairly well-known fact … that with a three-to-five day dose of powerful opioids, you could create an addiction problem over a long period of time,” he

INSURANCEJOURNAL.COM

said. “It’s a workforce issue. It costs us money.” The CDC estimates that the total economic burden of prescription opioid misuse in the U.S. is $78.5 billion a year, including the costs of healthcare, lost productivity, addiction treatment and criminal justice involvement. “I think this is more than a health issue,” Swift said. “It’s a workplace productivity issue. We’ve done surveys of small business owners where we have a deep understanding that 56% of them say that they are impacted or believe they will be impacted by opioids in the future.” With this in mind, Swift called upon employers to review their employee benefit plans and ensure they contain addiction support services that meet employee needs. “I think business leaders through their HR department could really look hard at their benefit programs and say, ‘Is it doing everything we can or should do for our employees and their beneficiaries during this period of time?’” he said. “Again, in a lot of our surveys, 47% of small businesses and employers do offer employee assistance programs, but that means 53% don’t.” As one example, Swift said, The Hartford added prescription digital therapeutics for substance use and opioid use disorder to its benefits

package over the past year and began offering a mobile app, as well as a telephonic medical concierge service, that provides real-time support for employees to get help. “We need more companies like The Hartford coming forward and saying, ‘We care about this issue, and we’re going to put our money where our mouth is and commit to erasing the stigma,’” said Courtney Hunter, vice president of state policy for Shatterproof, a national nonprofit organization dedicated to transforming addiction treatments, ending stigma and supporting communities.

Change for the Better

Particularly in light of COVID-19, Hunter and Swift both agreed that it’s more important than ever for business leaders to have an increased communication strategy that makes it safe and comfortable to talk about addiction and mental health. “Language is incredibly important,” Hunter said. “Utilizing the right language and making sure that it’s advancing our policies and our actions around what the healthcare community is saying, which is that addiction is a disease. It is not a moral failing, and we need not have shame.” This has been made easier by advancements in telemedicine and increased use of technology within the health sector, speakers said. “One silver lining to this terrible pandemic is that it has driven a rapid transition to virtual platforms across the treatment and recovery support sectors, as well as the broader recovery community,” Carroll said.

Swift predicts that telemedicine will become more widespread as a complement to in-person medical services in the future. “I don’t think it’s going to replace the traditional approach,” he said. “I think it will augment it and ultimately give people more comfort and confidence.” Most of all, despite the combined impact of the ongoing opioid epidemic as well as the COVID-19 crisis, Swift and Hunter both emphasized the importance of not losing hope. “No one in the world thought we would ever live through a pandemic, at least I didn’t, and we got set back,” Swift said. “Just because we got set back doesn’t mean we give up and run away.” Swift said that instead, it’s time to double down and continue to fight for those with substance use disorders. Clark agreed. “Just like the pandemic, there is light at the end of the tunnel,” she said. “… we know that when companies do well, they can do good. It’s a great joy for me in my job to get to meet companies that are doing so well and then turning around and doing so much good. I think the private sector really does lead the way on so many of society’s challenges.” But with the COVID-19 pandemic and the opioid crisis each exacerbating the other in some ways, is it possible to remain hopeful? “I hear stories of hope every day,” Hunter said. “I work with so many families and people that have lost and continue to advocate and work in this field and change things for the better. So absolutely, we can do it. There’s hope.”

NOVEMBER 16, 2020 INSURANCE JOURNAL | 25

Closer Look: Personal Lines Leaders Personal

About the Personal Lines Leaders: The 2020 Personal Lines Leaders in this special feature are taken from Insurance Journal’s Top 100 Property/Casualty Independent Agencies as reported in August. This list utilizes only the 2019 personal lines property/casualty revenue numbers of the independent agencies and brokerages that submitted data to the Top 100 agencies report. For more information on Insurance Journal’s Top 100 Property/Casualty Independent Agencies list, contact awells@insurancejournal.com.

Lines Leaders Top 50 Personal Lines Agencies

Ranked by Total 2019 Personal Lines P/C Revenue 2020 Rank Company Name

2019 Personal Lines Revenue

2019

2019 Total

Total Number of Employess

Main Office

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 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

$508,171,000 $415,465,145 $186,142,171 $129,899,200 $103,273,276 $103,259,000 $102,000,000 $81,318,488 $81,251,268 $70,550,000 $62,920,392 $54,900,700 $48,000,000 $47,475,855 $41,142,616 $39,472,645 $38,900,000 $34,000,000 $32,552,646 $25,178,538 $23,347,550 $21,415,000 $20,715,000 $19,705,481 $19,351,953 $19,302,658 $18,000,000 $17,500,000 $16,531,000 $16,214,923 $14,000,000 $13,946,224 $13,671,285 $12,742,422 $12,503,713 $11,980,000 $11,195,343 $10,838,961 $10,324,000 $9,909,976 $9,746,233 $8,951,000 $8,826,816 $8,520,457 $8,432,963 $8,387,328 $7,803,402 $6,817,408 $6,500,000 $6,451,532

$1,704,000,000 $3,000,000,000 $1,431,862,851 $865,994,667 $636,857,305 $684,000,000 $647,587,860 $444,973,435 $448,040,713 $501,000,000 $368,000,000 $398,550,250 $275,300,000 $272,050,668 $342,440,505 $544,445,879 $325,350,000 $234,000,000 $138,000,000 $194,238,330 $147,602,234 $70,000,000 $98,799,254 $155,698,729 $135,952,160 $193,026,580 $135,000,000 $153,000,000 $108,000,000 $86,508,295 $143,000,000 $88,829,453 $89,039,764 $75,301,229 $74,236,975 $72,000,000 $93,379,032 $83,376,623 $78,110,000 $64,648,086 $58,417,400 $73,510,000 $56,860,576 $50,094,354 $56,219,753 $60,000,000 $57,365,464 $47,127,790 $90,000,000 $42,594,350

$508,171,000 $1,572,638,745 $1,510,981,673 $1,058,043,992 $1,124,011,947 $618,313,000 $104,545,000 $87,294,211 $81,251,268 $83,300,000 $90,580,308 $426,273,250 $142,000,000 $1,144,426,508 $223,978,435 $456,547,620 $43,800,000 $34,000,000 $72,218,344 $131,703,121 $108,108,955 $1,247,087,000 $42,332,000 $60,211,621 $26,877,713 $194,051,217 $54,000,000 $66,000,000 $144,592,000 $68,387,459 $150,000,000 $581,953,162 $55,140,175 $16,273,769 $55,302,327 $23,780,000 $52,241,029 $52,343,835 $42,107,000 $98,956,691 $36,089,661 $22,200,000 $23,439,878 $155,482,214 $15,616,598 $22,627,979 $25,921,385 $25,217,693 $48,500,000 $102,052,311

3,835 12,633 7,958 6,787 7,512 3,755 501 1,114 139 115 860 1,987 988 4,085 1,890 5,577 35 275 424 951 750 8,000 330 419 165 1,191 57 610 1,051 440 1,800 2,600 248 74 422 195 365 405 364 600 241 300 180 793 116 175 225 110 310 720

Huntington Beach, Calif. Chicago, Ill. Caledonia, Mich. Lake Mary, Fla. Valhalla, N.Y. Columbus, Ohio Cerritos, Calif. Miami, Fla. West Hills, Calif. The Woodlands, Texas Tampa, Fla. Boston, Mass. Bangor, Maine Newport Beach, Calif. Cedar City, Utah New York, N.Y. Denver, Colo. Minneapolis, Minn. Natick, Mass. Richmond, Va. Missoula, Mont. Kansas City, Miss. Columbus, Ohio Virginia Beach, Va. Rochester, Minn. Longwood, Fla. San Carlos, Calif. Salt Lake City, Utah Fort Worth, Texas Poughkeepsie, N.Y. Deerfield, Ill. San Francisco, Calif. East Providence, R.I. Needham, Mass. Buffalo, N.Y. Kingston, Mass. Carmel, Ind. Tinton Falls, N.J. Milwaukee, Wisc. Oklahoma City, Okla. Port Washington, Wisc. Traverse City, Mich. Batavia, N.Y. Denver, Colo. Edmonds, Wash. Norwalk, Conn. Lancaster, Wisc. Honolulu, Hawaii Memphis, Tenn. Toledo, Ohio

Confie HUB International Acrisure LLC AssuredPartners Inc. USI Insurance Services BroadStreet Partners Inc. AIS Insurance* Univista Insurance Westwood Insurance Agency* TWFG Insurance Services Baldwin Risk Partners Risk Strategies Cross Insurance Alliant Insurance Services Inc. Leavitt Group NFP Premier Group Insurance Inc. HomeServices Insurance Eastern Insurance Group LLC** The Hilb Group LLC PayneWest Insurance Inc. Lockton Companies Huntington Insurance** Towne Insurance** Atlas Insurance Brokers LLC Insurance Office of America Inc. Professional Insurance Associates PCF Insurance Services Higginbotham Marshall & Sterling Enterprises Inc. Alera Group EPIC Insurance Brokers & Consultants Starkweather & Shepley Insurance Brokerage Inc. Kaplansky Insurance Lawley Insurance RogersGray Shepherd Insurance LLC World Insurance Associates LLC Robertson Ryan & Associates INSURICA Inc. Ansay & Associates High Street Insurance Partners Tompkins Insurance Agencies Inc.** IMA Financial Group The Advantage Group LLC John M. Glover Agency TRICOR Inc Atlas Insurance Agency Inc. Sunstar Insurance Group Hylant

Editor’s Note: * = Carrier Owned Agency; ** = Bank Owned Agency

26 | INSURANCE JOURNAL | NOVEMBER 16, 2020

INSURANCEJOURNAL.COM

Idea Exchange: Workers' Comp

COVID-19 and Workers’ Comp a Moving Target, But Some Certainties Exist for Employers

his year could be the most controversial rate recommendation in the 107-year history of the California workers’ compensaBy David Poms tion system. Why? Because we are dealing with a virus we’ve never experienced before. The medical community is still learning about COVID-19 transmission, treatment and prevention. Plus, there’s scant evidence to date on the long-term health effects of the virus. W2 | INSURANCE JOURNAL | NOVEMBER 16, 2020

Both the National Council on Compensation Insurance and the Insurance Information Institute have publicly said it’s too early to know the full impact of COVID-19 on workers’ comp insurance. But industry watchers believe a trend is definitely emerging where overall claims are down, which could benefit insurer loss ratios. One thing is certain: there are many, many factors at play. Senate Bill 1159, California’s “presumption” law, was signed into law on Sept. 17. Going beyond the scope and coverage of efforts by

other states, SB 1159 generally establishes that exposure to COVID-19, a highly infectious disease that can be contracted in a wide variety of ways, is a reasonably anticipated exposure. Previously, employees needed to present medical evidence that their illness was related to work. They also were required to provide a reasonable factual basis for asserting that the workplace caused their illness. Under SB 1159, any covered worker who contracts COVID-19 is now presumed to have contracted the virus at work.

continued on page W4

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Idea Exchange: Workers' Comp continued from page W2

Although the new law creates a higher burden for employers and could trigger a surge in claims, high rates of unemployment and telecommuting could act as a counterbalance because fewer people on a job site creates fewer opportunities for infection. Further complicating this calculus is denial of COVID-19 claims, which so far appears to be trending downward. Although the June 2020 report of the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) on the impact of the economic downtown didn’t take into consideration the impact of COVID-19 on claims volume, it concluded that “it is possible and perhaps likely that growth in [COVID and cumulative trauma] claims will more than offset the impact of the economic slowdown on claim frequency.” WCIRB has proposed a 2.6% increase in advisory pure premium rates. Although some have expressed concerns, now is not the time to rush to a judgement — WCIRB doesn’t make its decisions capriciously or in a vacuum and it relies on time-tested, proven methodologies. WCIRB also strives for fairness in its rate recommendations so employers in less-exposed industries see a smaller surcharge than businesses that have medium to high exposure to COVID-19. After issuing its proposed 2.6% increase, WCIRB then announced it would not, in fact, be changing the average recommended premium of $1.56 per $100 of payroll. However, based on early claims experience and the impact of SB 1159, WCIRB has adjusted some underlying recommendations, including the average premium cost per $100 of payroll based on business classification. It added two classifications to the original four, which effectively widens the range to 0.01 per $100 of payroll for the least exposed to 0.24 for the most exposed. Throughout the summer, the number of COVID-19 workers’ compensation claims soared, with total estimated costs as

high as $2 billion for employers and their insurers. The cost of COVID-19 claims filed by workers subject to SB 1159 could be in the range of $600 million to $2 billion, according to WCIRB. The mid-range estimate of $1.2 billion represents about 7% of the pre-pandemic $18.3 billion annual cost of workers’ compensation claims. This gives us a general sense of the magnitude of COVID-19 on workers’ comp costs. Is it significant? Yes. Is it insurmountable? Not at all, because California has an excellent workers’ comp system in place and insurers are required to charge actuarially justified premiums and reserve appropriate funds to pay future claims. A closer look at other COVID-19 costs reveals a hospital stay for treatment of the virus can run into the tens of thousands of dollars, with costs ranging from $38,000 for a privately insured, in-network patient to $73,000 for an uninsured patient, according to FAIR Health. With an estimated 15-20% of Americans infected with COVID-19 requiring hospitalization, FAIR Health estimates the total costs for all hospitalized COVID-19 patients will be in the range of $362 billion - $1.5 trillion in charges and $139 billion - $558 billion in estimated allowed amounts. That’s a wide range of costs, which of course depends heavily on any changes in the rates of infection in the U.S. going forward. In early October, WCIRB held a public hearing on California’s workers’ comp rates and in the coming months is expected to announce its approved advisory pure premium rates. While it’s difficult to know with any certainty how this will play out, employers should know this: under California law, a covered worker who contracts COVID-19 is presumed to have contracted the virus at work, thereby making it a work-related illness. However, an employer may rebut this presumption. Employers should take heed of these significant developments as SB 1159 is now the law of the land in California. To

‘But industry watchers believe a trend is definitely emerging where overall claims are down, which could benefit insurer loss ratios.’

W4 | INSURANCE JOURNAL | NOVEMBER 16, 2020

minimize liability under the new law, employers can take several immediate steps including: • Prepare a written plan of measures you are taking to prevent COVID-19 in the workplace • Comprehensively identify any active or potential hazards in the workplace such as unsafe or unhealthy practices or operations • Provide training for employees and supervisors about how to prevent employee exposure to COVID-19 • Establish standardized procedures for identifying and controlling access to hazards • Supervise employees exposed or potentially exposed to hazards • Communicate to employees about the employer’s health and safety rules and programs • Have a written letter prepared in the event that an employee has a COVID-19 infection in the workplace. It’s also a good idea to keep pertinent documentation on hand including: • Actions taken to eliminate employee exposure to hazards created by the violation as soon as the violation is discovered • Daily steps taken to address potential and actual violations • Information submitted to the Workers’ Compensation Claims Administrator • All notices of outbreak or infection of workers that are issued to employees. We’re living in unprecedented times and the pandemic has taken all of us out of our comfort zone. The California workers’ comp system is built to handle the unexpected and employers would do well to respond to this unprecedented period of uncertainty with preparedness and patience. Poms is the founder and president of Poms & Associates, an independent insurance brokerage and risk management firm based in the greater Los Angeles area. Phone: (818) 449-9300; Email: dpoms@pomsassoc.com INSURANCEJOURNAL.COM

Special Report: Best Agency to Work For

East

Stanton Insurance Group Cherry Hill, New Jersey

A Family Atmosphere at Stanton Insurance Group

By Elizabeth Blosfield

hile Stanton Insurance Group (SIG) is in the business of providing insurance for cars, homes and businesses, President David W. Stanton says the agency is also about much more than that. “As a local business, we have a responsibility to make our community a better place and to provide nurture and opportunity for our employees,” he tells Insurance Journal. SIG, a family-owned insurance agency based in Cherry Hill, N.J., strives to ensure that the environment within the agency, as well as outwardly with clients and the community, remains one that feels like a family. “Put simply, our strong values and focus on people sets us apart from other insurance agencies,” Stanton says. “The relationships we form with clients, employees and the community always come first.” This focus on relationships not only with clients but also with employees has seemingly paid off, as SIG’s employees nominated it as one of Insurance Journal’s Best Agencies to Work For this year, and it won the bronze award in the East region. Employees nominated the agency through responses to an anonymous survey. “This is a family run agency,” one employee writes. “They treat all employees as family. All employees treat their customers with the same respect. When you are treated like family, it’s easy to treat others… INSURANCEJOURNAL.COM

with the same compassion, empathy and concern.” Another employee writes that the friendships developed over the years between coworkers at SIG make coming to work a pleasure. “I enjoy what I do and have been doing it for over 24 years,” the employee says. Employees point to the agency’s involvement in fostering animals and devoting time to animal shelters, as well as the Christmas parties held every year for employees, as just a couple of ways SIG prioritizes its agency and community members alike. “SIG is a socially responsible firm and believes in strength through diversity,” one employee adds in the survey. “SIG employs a diverse group of professionals with strong backgrounds in several disciplines including education, construction, finance and technology.” Additionally, Stanton says that as many of the agency’s clients have been impacted by the COVID-19 pandemic, SIG has worked hard to ensure it maintains strong relationships with clients and works with them to get through this challenging time. He adds that SIG has made sure to take care of its employees during this difficult time as

well by offering the ability to work from home, not making any cuts to staff or salaries and ensuring safety precautions are in place for employees working in the office, including enhanced cleaning procedures, plexiglass separators, protective equipment and temperature checks. “Now more than ever, it’s very important to us that our employees feel valued,” he says. However, he points to the hard work of SIG’s employees as one of the biggest reasons the agency has continued to succeed through the COVID-19 crisis this year. “I am most proud of our employees for rallying around our agency and each other during an incredibly challenging time,” he says. “This is the best team we’ve ever had, and they deserve all the credit.” Stanton’s advice to other agency owners striving to make their agency a best place to work is to make building posi-

tive relationships with clients, employees and the community a top priority. With this as an ongoing priority at SIG, Stanton adds it has allowed him to continue doing what he loves: focusing on family. “My father and father-in-law were both in the insurance business, which inspired me to go out on my own and start Stanton Insurance Group,” he said. “I enjoy what I do the most because it allows me to make my family a priority in my life. I have four children, and I can proudly say I have never missed a sporting event or activity.”

NOVEMBER 16, 2020 INSURANCE JOURNAL | 27

Special Report: Best Agency to Work For

Midwest

Korotkin Insurance Group Southfield, Michigan

Growing and Evolving for More Than a Century By Stephanie K. Jones

orotkin Insurance Group (KIG) in Southfield, Michigan, may be more than 100 years old, but it’s definitely not stagnating and that’s a definite plus, according to those who work there. With 55 employees and annual revenues in the $1 million to $10 million range, KIG has earned the designation of Insurance Journal’s 2020 Best Agency to Work For in the Midwest region through the enthusiasm employees displayed in their responses to IJ’s 2020 Best Agencies to Work For survey. Employees praised the agency’s growth trajectory and ability to adjust as needed, the respect and care management shows for staff members, its reputation in the community, the service it provides to its clients and much, much more. “Korotkin is a family owned agency that has continued to grow,” one employee commented in the IJ survey. Another said: “The agency is evolving. This makes it great.”

“KIG has become a part of my family and has been for over 22 years,” one long-time employee wrote. “They offer everything you would need to start at the bottom and work your way up the ladder. They are supportive of their employees and want them to succeed in their job. They listen to their employees and are always changing to make the office a better place to work.” “The people I work with are kind, respectful, thoughtful and listen to the employees around them. We share ideas, learn from each other and lean on each other when needed. I’ve never worked at a company where I felt genuinely cared for by the management team like I do at Korotkin,” wrote another employee. The care is intentional, according to KIG President Jeffrey Belen, who said management is “very humbled” that employees nominated the agency for the award. “We want our employees to feel like they want to work here, not that they have to be here. For them to nominate

The team at Korotkin Insurance Group. 28 | INSURANCE JOURNAL | NOVEMBER 16, 2020

us for this award solidifies our goal of creating a work-friendly, family atmosphere,” Belen said. Belen described the agency as something of a hybrid. “We are large and experienced enough to handle very big and complex accounts, while also small enough to provide excellent customer service on a day to day basis.” Several employees noted the agency’s exemplary service to its customers, with praise for the agency’s communication with clients, account management and claims handling. One employee pointed out the “enormous amount of legwork” done annually in reviewing client coverages to “make sure those clients know what they are and ARE NOT covered for.” As an example, they cited a widespread flooding event that demonstrated how the agency’s efforts “made real life differences to people in our community. Our clients had adequate coverage for water damage when so many people did not. Even the contractors that were cleaning out

flooded basements commented that clients from KIG were taken care of much better than other agencies.” “A successful insurance agency knows how important is for its customers to have a better grasp of the industry and the understanding of valuable products and services that are being offered to them. KIG’s clients are well-informed clients, therefore our clients are very loyal clients,” one employee wrote. Another employee lauded the agency’s ethics, saying: “Although they are very eager to write new business, they are an extremely ethical corporation. ... I have been in this industry for a very long time. This is one of the best companies I have ever worked for.” In Belen’s view, the “culture that we have created putting employees first makes this a great place to work every day.” He sees employee care as translating into care for one’s customers. “Always put the needs of your employees first. Treat them like gold, and they in turn will provide exceptional service for your clients,” Belen said. “We are looking forward to the next 100 years!” Belen added. INSURANCEJOURNAL.COM

Special Report: Best Agency to Work For

Southeast

Darr Schackow Insurance Gainesville, Florida

Valued Employees Dedicated to Putting Clients First

By Amy O’Connor

here were many reasons that employees of Florida-based Darr Schackow Insurance nominated their employer as a Best Agency to Work For this year, including its work in the communities it serves and how hard it works for its customers. But respondents of the annual survey by Insurance Journal said the number one reason they love where they work is because of how much their company cares about them, and that hasn’t changed throughout the years as the company has grown. “This agency treats everyone like family and understands family comes first, all the while providing an amazing place to work, and truly wonderful people to work for and with,” said one employee of this year’s Southeast region Bronze Winner. `“The owners truly care about each and every one of us,” another employee stated. “They know us personally and treat us like family. They are big supporters of a healthy work/ home balance as well as good mental health.” The agency, which has eight offices throughout Florida and is licensed in 32 states, offers personal lines including auto, home and watercraft, as well as business insurance options such as workers’ comp and commercial property. Employees said the agency’s growth hasn’t been to the detriment of its culture and family-like atmosphere. “When I started there were

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about eight employees and one office. We now have over 50 employees and multiple offices throughout the state. I feel fortunate to have found this company at such a young age and to have found a career and work family that strives to help make me more successful every day,” a survey respondent said. “They have always provided the opportunity to move up and encouraged growth with every employee.” Another employee said the agency’s leadership, headed up by John Darr and Ray Schackow, values each employee and stays involved in making sure they are successful. “This agency still has that small, family feel while being big enough to have an abundance of resources to help out each client in a personalized way,” said one respondent. “I have over 30 years in the insurance industry and worked in various agencies throughout my career. Darr Schackow is by far the best agency I have worked for. The environment is very professional, and all

are treated like family and act accordingly. I’m proud to work for Darr Schackow Insurance and to be part of such an amazing team,” another employee said. John Darr said the management team is honored to be recognized by its team and said its people make the agency different than any other. “They are knowledgeable and care about their work,” he said. The agency strives to put its people first, he added, and advises all agency owners to make decisions based on what is best for their team. Darr Schackow employees said that attitude – as well as company benefits like vacation time, flex time, and the ability to work from home or the company’s in-office safety precautions during the pandemic – is reflective of the agency’s culture and how it serves its customers. Employees also praised the company’s charity work with the United Way and others.

Employees say the agency is really all about its customers. Company employees said the agency goes the extra mile to make sure its customers have the information they need through educational offerings like videos and webinars, and that helps set it apart from other agencies. “Taking care of our clients is our number one priority. Educating them on coverage to make sure they understand what they are purchasing and what’s available,” an employee said. Said another, “We are committed to helping our clients understand their coverages and risk management profile. At Darr Schackow, we pride ourselves on being trusted insurance advisors and not just sell a cookie cutter policy.”

Darr Schackow Insurance employees say they feel the agency's owners truly care. NOVEMBER 16, 2020 INSURANCE JOURNAL | 29

Special Report: Best Agency to Work For

West

The Buckner Company Salt Lake City, Utah

Three Generations of Doing the Right Thing By Don Jergler

ords like “fair,” “ethical, and “accommodating,” may not top a list of words you’d think would energize workers, but there was no shortage of enthusiasm found in comments from employees who heaped praise on The Buckner Co. in Salt Lake City, Utah. Those words took on even greater meaning during the pandemic, when the firm's leaders had to scramble to accommodate its 178 employees in a working world that was turned upside down. “The way they have handled the COVID-19 pandemic and allowing employees to work from home has been flawless,” wrote one employee. The firm was named Insurance Journal’s Best Agency to Work For in the West region. The Buckner Co. earned the Bronze 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. Among the reasons employees nominating the firm called it out were its contributions to the community and the ethical manner in which managers and employees handle customers. “I have worked for other agencies in the past and Buckner’s community contribution is beyond compare,” one employee wrote, adding that the owner is involved in operations, reviews conducted regularly and on time, and there are plenty of opportunities for development. The firm reports $32 million in revenue and is often growing. But for Terry Buckner, CEO of the firm, ethics is an important part of the equation. “I think people like to work at someplace they can be proud of,” Buckner said. “We push very heavy the need for high ethics.” He explained that insurance isn’t well understood by those who work outside the industry, which means insurance professionals must be serious about instilling trust. “We have to do the right

Buckner Connect Idaho Falls Team USA: Buckner Co. CEO Terry Buckner speaks at an event in which Olympic athletes came together to share their views on what it takes to be a champion. 30 | INSURANCE JOURNAL | NOVEMBER 16, 2020

thing for our clients and for our carriers all the time,” Buckner said. His grandfather started the firm in 1936, passing on the firm to Buckner’s father and uncle, and Buckner purchased the firm from them in the late 1980s. Helping with education is another key to success in business and in attracting and retaining good employees, Buckner said. “We also have pushed, very heavily, the value of education,” he said, adding that the “check book is open for education.” Education was mentioned in several employee comments. “I have worked for The Buckner Co. for just over five-and-a-half years,” wrote one employee. “I have been in the business for 26 years and to date Buckner has provided the best agency experience of my career. I am valued, I am respected, I have great co-workers along with a great work environment. Management has been fantastic. I am given what I need to do my job and the education opportunities here have exceeded any agency I have worked for.” Another employee who’s been in the business about a quarter-century called out some bottom-line reasons why The Buckner Co. is a great place to work. “I have been in this business for 25 years and worked at four different agencies. And have worked for Buckner for the

February 2020, Buckner Ski Day Snowbird: Buckner Co.’s ski day was Feb. 27 at Snowbird Resort in Salt Lake City, Utah. This was a client networking event, but since the firm insures Team USA Ski & Snowboard, they had some of their athletes on the slopes with them. past 15 years,” the employee wrote. “Buckner has always been the most accommodating and fair for the employee and the salaries are more than fair for the marketplace.” Of course, employees in their comments overwhelmingly mentioned ethics. “The employees at Buckner are ethical to the core and we always strive to do what is best for our customers with honesty and integrity at the forefront,” the employee wrote. “This strong ethical base is passed down from our owner and management team and is based on how the team interacts and communicates with our staff,” the employee added. INSURANCEJOURNAL.COM

Special Report: Best Agency to Work For

South Central

Upshaw Insurance Agency Amarillo, Texas

Taking Care of Employees and Customers By Stephanie K. Jones

ne of the things the employees of Upshaw Insurance in Amarillo, Texas, say they like best about their agency is its caring spirit — not only in regard to the employees themselves but to the communities they serve. Founded in 1927 and led by President Cory Bentley, Upshaw Insurance Agency— Insurance Journal’s 2020 Bronze Best Agency to Work For in the South Central region — has annual revenues of $11 million to $25 million, serves clients throughout Texas and is licensed in 50 states. “They are an excellent company to work for. The way I see it is if you take care of them they will take care of you, which is how it should be,” one employee said in responding to IJ’s 2020 Best Agencies to Work For survey. As with the majority of agencies nominated as a Best Agency to Work For, Upshaw’s employees said the agency’s management treats them “like family.” However, one employee also pointed out that, in addition, at Upshaw, “your family comes first, they will always let you take off for family matters.” Another survey respondent noted: “Upshaw is one of the best companies to work for because they are very in tune with the needs of their employees. They know and recognize the importance of balancing life and work and they understand the importance of family.” Several employees praised INSURANCEJOURNAL.COM

the agency’s contributions to the local communities in their service areas. One program consistently highlighted in employee comments is Upshaw’s Power of the Pedal initiative, which has been approved as a 501(c)3. The Power of the Pedal gives “bicycles, locks and helmets to local elementary schools to help children in need. There are a lot of kids that are without transportation, and this program is helping them one at a time. It makes me feel warm and fuzzy to be part of this amazing company, and the things we are involved in throughout the community!” one employee said. Another commented: “The various community outreach projects that we are involved in (Power of the Pedal specifically) make me proud to wear the Upshaw logo wherever I go. People recognize Upshaw as a leader in insurance, but also as a community partner that is invested in the advancement of all people in our city, state and region.” Through Power of the Pedal “in December 2019 our agency gave away 205 bicycles and locks to five different schools and to an organization called Heal the City. Upshaw truly gives back and recognizes the needs of their employees and community,” another employee said. The agency’s competitive compensation, perks and incentives were also recognized by survey respondents. Wrote one: “The producer commission structure at Upshaw is unparalleled by

2020 Winners

OVERALL any other agency in the area, and performance bonuses are achievable and sizable. It is a great all-around place to work for every position.” “They take notice and compensate … on how you are doing with your job performance,” said another survey respondent. One employee wrote that they appreciate “that Upshaw encourages its employees to continue to expand their knowledge base. They will pay for certification courses that not only expand our knowledge base and help us grow professionally but also allow us to better serve our clients.” “They give us a lot of perks such as chair massages and extra benefits,” another employee said. That respondent also lauded the agency’s response to the COVID-19 pandemic, stating: “Even though a lot of major agencies in Amarillo have returned to work full-time due to the pandemic, they have allowed us to continue to work from home since March 2020 for our safety. They have told us that we can come in the office if we want to but it is totally up to us and what we are comfortable doing and that means a lot!” One long-time employee summed up what seems to be the overall perception of the agency, stating: “I have been employed with Upshaw for 40 years, it is an honor to be able to say that.”

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

NOVEMBER 16, 2020 INSURANCE JOURNAL | 31

Closer Look: Assisted Living/Long Term Care 3 Ps to Consider When Managing the Risks of Assisted Living Facilities By Patrick Wraight

ssisted living facilities provide a necessary service to our aging population, but operating them comes with risks. When you consider that they are designed to provide care for our loved ones in ways that many of us are not able to, you understand just how important these facilities can be. An assisted living facility is not a hospital, nor is it a nursing home. An assisted living facility provides a place for people to live when they need some help dealing with their daily lives. It’s not that they are fully confined to a bed or need 24/7 care. They just need a hand with some things, and some need more help than others. A particular type of assisted living facility is the Continuing Care Retirement Community. This type of assisted living arrangement includes several different living situations ranging from folks that need minimal help to couples living together that simply have access to services all the way to those who are living in a more traditional nursing home situation. Whether you are considering bringing an assisted living facility on as a client, or you’re already insuring some, you should be aware that they have particular risks that are associated with them.

People: The risk of dealing with people.

Businesses deal with people. That’s not news. However, when you have a client that is dealing with a specific group of people, that group brings its own risks. Assisted living facilities exist to help our older population to continue to live their lives as independently as their situations allow. Some only need a little help. It can be as small as help with household tasks that they cannot physically do anymore

32 | INSURANCE JOURNAL | NOVEMBER 16, 2020

and reminders here and there to supplement their failing memories. Some residents may need a significant amount of help as their health deteriorates over time. As they deal with their clients, they must have properly certified and trained personnel on staff. This includes the need for groundskeeping and maintenance staff around the premises since it can include multiple buildings with different functions. Beyond that, there is the nutritional

staff, which would have to include cooks, possibly nutritionists, and all of those who will help in serving the residents and keeping the common dining facilities cleaned and ready for use. There are other staff members that these facilities need, such as the medical staff, the staff who work with and help the residents directly, and transportation groups who help to take residents around to appointments or off premises to go shopping. Remember that their goal is to allow their residents to live their lives as normally as they can for as long as they can. In dealing with the selection and training of staff, we should ensure that the client is selecting the appropriate staff members. They need to be certified in their jobs, as needed. Of course, a shuttle van driver doesn’t need a CDL (maybe), but they should be licensed and have a good driving record. That goes for every different area, especially when staff interacts with residents. I’ll just mention that the dieticians or nutritionists should be certified in their field, there should be certified nurse assistants, and other medical professionals with the appropriate credentials. More than that, there should be appropriate background checks done to make sure that the staff is made up of people who are not going to cause harm to the residents. After INSURANCEJOURNAL.COM

all, when you’re dealing with people who need help, their helpers need to be verifiably trustworthy (as much as you can verify that) and capable of helping people who will need their help. They should also receive training on how to deal with people who are having emotional reactions to their current situations. Remember that they are dealing with people who have lived full lives. Many of them still remember themselves as the young strong person that they once were. They don’t always want to live in this situation, so they might become difficult to deal with. Those who are hired to help them should be well trained in helping those who might not always act like they want that help.

Property: The risk of dealing with property.

The property at an assisted living facility can be extensive. Yet, it can also be small. I have seen some assisted living facilities housed in converted single family dwellings. Imagine a five-bedroom, four-bathroom house converted into a building that is housing 8-12 residents. Now imagine the owner of the building (and business) trying to insure that building on a homeowners’ policy. It doesn’t take long to imagine that the insured would be woefully underinsured for both property and liability, not to mention that the risk doesn’t qualify for a homeowners’ policy. Even if the assisted living facility is a converted single-family dwelling, or even a converted apartment complex, there is more to it than just making sure that there is a INSURANCEJOURNAL.COM

high enough limit to cover the property.

‘Whether you are considering bringing an assisted living facility on as a client, or you’re already insuring some, you should be aware that they have particular risks that are associated with them.’ Getting the proper insurance in place is only part of the issue. That insurance should include commercial property policies with appropriate endorsements to make sure that the insured is covered in the best way they can be. Consider that these facilities will have certain business personal property that is unique to a medical situation. Even some of the beds in these facilities aren’t normal beds. They will have hospital beds in some rooms. They will have other equipment and property that you would expect to see in a medical facility. Beyond that, consider that they may assume some level of responsibility for the residents’ personal property. It’s more likely that they would ask residents to care for their property and that they might even have a signed waiver of responsibility for damaged property. But do they require residents to have some kind of insurance on their property? Add to the risk to property that you have residents who have varying degrees of independence and acceptance of their own limitations. It

would be worth reviewing the facilities' residential cooking facilities and their rules about who gets to cook and where and when.

Public: The risk of dealing with the public.

The residents of assisted living facilities are our parents and grandparents and that in itself touches a nerve with us. For those who are entrusting their family members to live here, they are all feeling a mix of emotions. Some feel guilty that they couldn’t take care of their parent. Others want to take care of them, but mom or dad won’t have it so there’s some sadness, maybe anger there. Some are simply sad to see their first heroes and superheroes in their lives brought back down to being human like the rest of us. Add to that the history of some facilities that have dealt with patient abuse allegations, and you have an environment where there is great risk to the facilities. In this light, it’s even more important that the facility have strict policies regarding the selection, hiring, training and continued employment of all staff. Look at this from a reputational risk standpoint. If there aren’t strict policies in place related to all personnel, and something happens or is alleged to have happened, it makes it possible in the minds of the public that something bad could have happened. It could be worse if there are policies in place, but they are selectively enforced for some staff and not others. Remember that even those staff members whose jobs don’t deal directly with residents can still come in contact with them, and that creates an exposure of staff

who shouldn’t have contact with residents for many different reasons, including their prior criminal records. Consider also what steps the insured may be taking to create positive reputational moments. This could range from partnerships with other organizations that support the mission of helping the residents live their lives as fully as possible to ways that the facility is giving back to the community. These sort of positive touches put the facility in a better position to deal with any potential negative impact of an allegation. Another item to consider is the facility’s plan to react to any negative situation. Will it be proactive with the public if something happens, sharing the information that it has as soon as is practical? Will it hide information until someone asks about it? How will it react to allegations of abuse or mistreatment by staff? How will it support and help any residents that are victims of any mistreatment? These questions need to be answered early and revisited often as part of a disaster preparedness plan because disasters are more than storms, floods and fires. This is certainly not a full treatment of the risks to be managed when the client is an assisted living facility, but it’s a good place to start the conversation. Nothing beats having conversations and getting to know your clients so that you can better help them in their insurance purchases and in their overall risk management. Wraight is director of the Academy of Insurance. Phone: 800-897-9965 ext. 130. Email: pwraight@ijacademy.com

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Special Report: Young Wholesalers

The Under-40 Crowd Remains Upbeat, Sees Now as a Time to Shine 34 | INSURANCE JOURNAL | NOVEMBER 16, 2020

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Akeena Gandhi By Andrea Wells

holesaler brokers of all ages are facing hard market conditions with rising insurance rates, tighter underwriting and fewer carriers willing to write some tough classes. They, like everyone, are also experiencing fewer face-to-face meetings, which they believe are important to building strong relationships. Those challenges appear to be ones that young wholesale brokers are both willing and prepared to tackle. They say they want to solve problems and find better solutions even in what is the most challenging business environment they have ever faced.

The Hard Market

This hard market is a time when the industry’s young surplus lines professionals believe they can shine. “This is the first firming market I have seen since I joined the insurance industry, so it certainly looks a lot different than it did when I started,” said Steve Moughamian, Risk Placement Services (RPS), area senior vice president, brokerage manager, based in Lexington, Ky. “I think the current market conditions have further emphaINSURANCEJOURNAL.COM

Erin Dolan sized the need for specialization and expertise.” Moughamian focuses on the environmental and energy sectors and though they may not be seeing as much turmoil as other sectors, they are also not immune to it, particularly when it comes to excess capacity, larger and more frequent claims and tightening appetites. “With rates increasing and capacity decreasing, it requires proficiency, creativity and strong market relationships to get deals done.” While challenging, the market turmoil makes it a great time to be a wholesaler, said Michaela Breit, a 29-year-old Risk Placement Services broker specializing in healthcare. “When I started, it was a soft market where anybody could really get anything done,” she said. “I had only ever heard rumors of the elusive firm market and that has definitely started to change.” Breit says that being a specialist in the E&S industry is more important now. “It is a great time to be a wholesaler right now,” she said. “Specialists are needed in the E&S industry to help navigate firming market conditions and it’s critical to have a focus in a certain area,” she said. That might include being more of a

Jennifer Kessel technician rather than a salesperson during this critical time of harder market conditions, she added. “You must be able to fully understand the risk that you’re looking at, their operations and what could go wrong to help those business managers and owners dig into coverages and exposures,” she said. That’s one element of the wholesale sector that she enjoys most. “I like being able to figure out a risk and figure out how they can best manage their risks.” Breit, based in Colorado Springs, Colo., is a former Risk Placement Services college intern and made full producer status within two years of joining RPS as a full-time employee. Like many in the industry, Breit found insurance by chance. “I played college golf, and my golf coach had a friend who worked at an insurance company and told me about this internship program that they had,” she said. She interviewed for the program with a company she had never heard of. “I wasn’t even positive of what they did because I had never even heard the word ‘wholesaler’ before.” She was accepted into the program and got her start in the healthcare brokerage team.

She still plays golf, which she says intersects well with work life. “I love to take clients golfing,” she said. “It’s always kind of funny being a girl that is a decent golfer,” she said. “Usually, guys are happy, but some guys get mad when they get beat by a girl.”

Relationships

Relationships are an important part of the insurance business and for young wholesalers that’s a bonus. For 34-year-old Akeena Gandhi, director of the Professional Services Group of CRC in Irvine, Calif., the art of building relationships is one her of favorite aspects of being a wholesaler. It’s the reason she stays in this sector. “I have thought about moving to other areas of the industry; I’ve been approached for a position on the carrier side,” she said. “But I really like what I do as a wholesaler. I really like the relationships that I have with my retail agents and the relationships I have with my underwriters. I like the ability to negotiate and be the middle person between the two,” she said. Being able to help both retail agents and carriers is “just a really fun position,” she said. “I

continued on page 36

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Special Report: Young Wholesalers

Lindsay Moore continued from page 35 love having the ability to go out and visit my clients. You’re not in the office every single day, especially as a broker.” This year has been a bit different than most. Although Gandhi has been working from home since the start of the pandemic, she says this hasn’t affected the relationships she has built the past five years as a wholesale broker. She’s even been able to make new relationships, remotely. “I’m not sure what the future’s going to hold, but I try my best to pick up the phone and call my agents as opposed to just always emailing, especially right now,” she said. The work-life balance the industry offers is a benefit Gandhi values as well. “It’s one of the few industries where you can really have a nice balance between your work life and your home life.” That’s important to young professionals with families like Gandhi. “It’s just a great industry to be around,” she said. “You really do develop nice, strong friendships along the way, whether that be with your clients or your underwriters.” “The relationships you build with your team, carrier partners and clients make this profession extremely

Pilar Summerville rewarding,” agrees 38-year-old Keith J. Shearer, president of Atlanta office of R-T Specialty, who started his career as a 21-year-old intern just after college. “I’ve developed life-long friendships that started out as business relationships and have turned into so much more.” Building relationships is the key to being successful in the E&S insurance industry, he added. “Being knowledgeable is important but the most important aspect is who you know that can help you win deals. You are only as good as your trading partners, as we are all ultimately working as a team.” Lindsay Moore, a 29-year-old casualty broker for Worldwide Facilities in Los Angeles, added that the insurance industry is a tight-knit group so maintaining good relationships is important to achieve success. “Relationships are always going to be around in some way, shape or form,” Moore said. “Your client could be your underwriter the next day, or your underwriter could be underwriting a different company that you do business with the next day.” Always have integrity and treat people with respect, she advised. “You have one chance when you're young to really

36 | INSURANCE JOURNAL | NOVEMBER 16, 2020

Jerwayne Singh establish your reputation, or to ruin it,” she said. “Keep working hard, keep building relationships, and good things will happen.”

More Young People

As much as they like it, there are a few things young wholesalers would like to change about the insurance industry. “One thing I don’t like about the insurance industry is the lack of young professionals,” said Jerwayne Singh, Risk Placement Services, Commercial P&C Underwriter, in Portland, Maine. “I think that there is not enough attention or information out there about this career path, so it is often glanced over.” Singh found his insurance path after a college professor who headed the Risk Management Department at the University of Southern Maine recommended Risk Placement Services for a summer internship. “Within the first few weeks, I knew that this was the career path I wanted to take,” he said. While Singh said an insurance career may not appear as “glamourous or volatile as Wall Street,” it’s a career with the ability to go as far as one can dream. “With this industry, the work you put in reflects the

outcome, with both personal and company goals that you want to strive for,” he said. “For any young person, it’s the ideal profession where if you network correctly, work hard, and understand the business, then the sky is the limit,” Singh added. Breit too wishes the insurance industry had more young professionals in its ranks. “Maybe there are more young professionals in bigger cities, but in Colorado Springs, I am the only young person I know,” she said.

More Diversity

Other young professionals like 38-year-old Pilar Summerville, senior vice president of R-T Specialty based in Los Angeles, would like to see a more diverse industry. Summerville, who specializes in professional and management liability, says that during her 15 years in the insurance industry she doesn’t often see minorities represented, although she thinks this is changing. There’s been a shift in the industry to invest in young talent and diverse talent, she said. “That’s great because one of the keys to being a wholesale broker is that you’ve got to have a high level of energy and drive to really hit INSURANCEJOURNAL.COM

Michaela Breit the ground running,” she said. Some segments of the industry “need development, especially when it comes to diversity and the hiring and promoting of significantly underrepresented groups,” she said. “I think that we’ve made huge strides, especially in the recent times and it’s great to see.” Summerville who studied actuarial science in college says she loves the wholesale brokerage side of the business and encourages other young professionals to find their niche. She mentors other young professionals and is active in the PLUS Foundation’s Diversity Leadership & Mentoring Program (LAMP), which seeks to help participants advance their careers and become motivated leaders. For Summerville and other young professionals, mentors have played an important role in their career success. “My first boss ended up being a mentor to me. He led the professional lines group and had a passion for educating and that was so valuable to me at the beginning of my career,” she said. But the value of a mentor continues even as a person’s career ages, she added. “Whether or not it’s the beginning of the career, or if INSURANCEJOURNAL.COM

Steve Moughamian you’re well tenured, you have to be a student, a constant student,” she said. This is an industry that solves problems. As a wholesale broker that means always “digging deeper” and learning, she added. “I love that our role in the whole equation is to help solve problems,” she said. “I have not one time thought about moving to another industry. I really do love what I do.” Jennifer Kessel, marketing director at USG Insurance Services Inc. based in Canonsburg, Pa., who also serves as a board member for the Wholesale Specialty Insurance Association’s U40 Group, says finding the right mentor isn’t always easy. “The easy way, at least in my experience is looking for someone who can help you with whatever guidance you need,” she said. That might mean finding someone who is an expert in one area or finding someone who has “done it before,” she said. “Then simply say to them, can I pick your brain about this one topic? Or can I have you help me with some guidance around this one thing?” That doesn’t mean they will be your “forever” mentor, she added. “Maybe they’re just a mentor for a six-month period

Keith Shearer

of time to help you get through one issue,” she said. “Break it down into pieces and say, ‘Can I pick your brain about this?’ Then it becomes much easier to forge a natural relationship.” Find multiple mentors, both inside and outside of the business, she suggested.

Great Profession

R-T Specialty’s Shearer says the insurance industry is a great profession for people to start and grow their career path with endless opportunities for meaningful work and community involvement. “Companies are always hiring and looking for good diverse talent no matter what insurance position fits your personal desires,” he said. “Whether it be underwriting, sales, corporate risk management or claims. Lots of options to choose from that you can build a very rewarding career in.” “No matter what your interest, you can find something in the insurance world,” said 31-year-old USG’s Kessel. “If you are interested in sports, you can go into underwriting or become a broker, where you niche yourself into athletes or sports,” Kessel said. “Or if you have an interest in classic cars, you can build a niche around that.” And “we still need accounting folks,

we need finance folks, we need marketing and operations,” she said. “No matter what your interests are, everybody needs insurance, so you can build your career around your interests and passions.” Erin Dolan, senior vice president, analytics and communications at RSUI Group Inc. in Atlanta, who is the current president of WSIA’s Under-40 group, agrees. “There’s something for everybody,” said the 38-year-old. “When I first started in the business, all I heard about was underwriters and brokers. But when you sit back and take a look, there’s the underwriter, the broker, there’s claims, there’s regulatory compliance, there’s CAT modelers, IT professionals, marketing. There really is a lot of opportunity and you can dive into whatever you have an interest and add value.” For Moughamian, the insurance industry has been all positive. “It is certainly an industry that allows you to get out of it what you put in,” he said. “I love the personal aspect of the job, meeting and connecting with our clients and developing lasting relationships.” “It is a great way to make a living, especially coming right out of college,” Breit added.

NOVEMBER 16, 2020 INSURANCE JOURNAL | 37

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Idea Exchange: Ask the Insurance Recruiter Two Recruiting Tools Every Insurance Agency Needs

“

ur agency just hired two junior recruiters. I need a lot of resources to overcome their inexperience. LinkedIn has been our ‘go to’ but they want to charge $10,000 for one seat. I can’t afford $20k for each recruiter to have an account nor can I divide the spot. Is that my best option, or are there other resources that will help them fill our open positions?” ~HR Director. Your agency is accustomed to utilizing tools and resources for sales, service and client retention. What would you do without Salesforce, Zywave, ImageRight and others? I bet you’re constantly evaluating the efficiency and effectiveness of those tools. Hiring resources are no different. The HR director’s issue is one a lot of agencies face. What recruiting resources does your agency need? What will those cost? I’ve made numerous additions, deletions and conversions to Capstone’s ATS, job boards, website and social media, all in an effort to utilize cost effective resources that attract the best applicants. Here’s what I’ve learned. There are a lot of resources available to post jobs and troll for candidates, but insurance is a niche business where you only need 5% to 10% of the candidate population. These recruiting tools can be geared towards insurance recruiting. Not only should they be on your “must have” list, but getting a good ROI means not just buying the resources but consistently using them, tracking progress and defining success.

APPLICANT TRACKING SYSTEM An ATS will help your agency manage candidate volume, create an efficient hiring process, eliminate time wasted on bad applications and shift money you’re spending on outside resources in-house. Recruiterbox’s blog, “18 Undeniable Reasons You Need an Applicant Tracking System,” has reasons to install or upgrade your ATS. A few examples include: • 75% of large companies use an ATS to review and rank resumes before a recruiter sees them; • 20% of companies experience a reduced hiring time; • ATS thins the qualified candidate pool by 75%; • A company with 8 employees can save $10,000 using an ATS. What to Keep In Mind

The ATS’s biggest benefit is improving candidate engagement. Here at Capstone, we utilize our ATS to stay in constant communication with our database. Whether we sourced the person as an active job seeker or a passive recruit, we keep track of important data, set recurring follow ups, apply keywords that are searchable for future openings and automate applications with our job postings.

CAREERS PAGE

Creating or revamping your Careers page is your biggest expenditure but produces the greatest ROI. It’s an easy $15,000 to $20,000 investment. Capstone

has overhauled its website three times in my 15-year career. It has to be able to compete with third party job boards and accomplish the By Mary Newgard following: • Keep money you’d otherwise spend to an outside job board (LinkedIn, Indeed, ZipRecruiter, Careerbuilder) in-house • Require little ongoing cost to upkeep (as opposed to job boards that require money for each job post or yearly contract) • Effectively display speculative/ opportunity jobs as well as immediate openings • Enable you to create, write and format job postings the way you’d like • Showcase your culture with multi media presentations (videos, testimonials & social media links) • Boost SEO and company visibility on social media and Google searches

What to Keep In Mind

Your Careers page influences the candidate experience. In October 2020’s column, I wrote about three indicators for a successful 2021 recruiting plan saying, “The employment ‘journey’ holds the key.” Candidates don’t want you to “do something to them” in the interview process. They want you to “do something FOR them.” Make your Careers page an invitation to experience your agency’s culture and employment opportunities. You can track the candidate experience through Google analytics by monitoring: • What pages candidates visit; • How long they stay on your platform; • What action items they embrace.

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

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Idea Exchange: Marketing How Independent Agencies Can Set Themselves Apart

or independent agents, building a community-based brand has always been a smart way to set themselves apart from their exclusive counterparts. Now, as the next wave of COVID-19 hits the U.S. economy, it’s more important than ever for agents to build brands in their communities in new and cost-effective ways. When done effectively, the independent agent brand — which includes professional advisory services — can compete with exclusive agents and direct distribution channels. These competitors leverage national advertising campaigns to sell just one brand of insurance without offering comparable advice to consumers. It all starts with agents understanding By Doug Coombs and living their brand.

Community Branding

Branding is more than choosing the look of your logo and online identity. Branding tells your agency’s story, and shares your mission, vision and values with your clients and prospects. It engages people to learn more about you, and answers questions such as why you are in this business, what you stand for, and how you are bettering the community. Branding aligns your agency with its audiences, using your logo, messaging, and photos to share how you do business and communicate your value to the public. Creating a consistent look and feel and applying it to all of your marketing campaigns helps make your brand memorable, while a distinctive targeted message can differentiate you from the local competition. Independent agents who brand themselves successfully today will: • Instill confidence in their clients that their independent agency offers the best risk coverage and accessible service when questions or concerns arise. 40 | INSURANCE JOURNAL | NOVEMBER 16, 2020

• Quote policies in real-time while having the value-added capability of offering advice tailored to each client. This effort will retain existing clients and attract more prospects. • Offer both personal and commercial lines, working with individuals, business owners and different sectors of the community when and where they choose to do business. These include people working from home, home-based business owners, and local businesses, including struggling businesses and those thriving during COVID-19. • Ensure their team can do business securely with clients and prospects in person and virtually, from any location, giving sales and customer service staff access to technology while supporting their virtual business environments. Independent agents with quality branding, a customer-centric focus and the ability to use technology effectively will instill confidence in their clients that they have chosen a skilled insurance advisor with the right products at a competitive price. By branding and marketing themselves across their community — and remaining transparent in their mission, vision and values — agencies will be resilient in unpredictable times.

By branding and marketing themselves across their community — and remaining transparent in their mission, vision and values — agencies will be resilient in unpredictable times. Cost-effective Marketing

Marketing your agency within a budget is important to keeping your business steadfast into the future. Research shows that, on average, a potential customer needs to see an ad seven times or more before they buy. Execute consistent marketing campaigns to reach people of all

target ages within a specific radius of your business. Collect, understand, and target marketing campaigns using the data and analytics reporting from your agency management system, Google Analytics website reports and social media impact reports. Understand what your clients and prospects need and then form your marketing campaigns to engage those audiences. For example, in a recent survey by PWC. com, 15% of respondents said they are likely to purchase life insurance due to the impact of COVID-19, while 37% fear that the pandemic may bring future financial impact on their retirement plan. Consider this data and apply it to your marketing campaigns to engage clients and prospects. Use proven tactics to engage the local community such as: • Laying out a quarterly plan for your marketing spend across all channels such as: online advertising with local newspapers or television, radio advertising, direct mail and rack cards. • Building your community brand by participating in the Chamber of Commerce through website sponsorship, posting insurance tips for targeted audiences on shared forums such as community Facebook pages and sponsoring community events. People still want to help and get involved in virtual fundraisers and challenges. • Creating a series of short informative videos with answers to frequently asked questions and insurance tips to reduce risk. Use free social media channels to share these videos and choose the backgrounds wisely to highlight your location, signage, the office lobby, or friendly and informative staff. • Targeting your marketing to different age groups that features language and technology applicable to these specific clients and prospects. Assure each audience that you are able to review their insurance needs, whether it is by phone, email, text or a video conferencing appointment. INSURANCEJOURNAL.COM

You can also stay top of mind in your community by sending local media press releases about your agency’s growth, new hires and significant improvements which are tailored to meet customer needs. In all tactics, remember to point out why your agency is a valued part of the community and use a clear call to action throughout your marketing channels to motivate your clients to call, text or fill out a form to move the transaction forward. Make your call to action obvious on each marketing channel to prompt website and social media visitors to contact you today.

Filling Client Service Gaps

According to Gartner, a key priority for marketers is to keep customers loyal during the current crisis. “When you’re heading into uncertainty, taking care of your existing customers is extremely INSURANCEJOURNAL.COM

important,” says Eric Schmitt, Senior Director Analyst, Gartner. Today, independent agents must take advantage of technologies that enable them to connect with clients on their terms. As McKinsey found in a May 2020 survey, almost 50% of U.S. agents surveyed cited remotely building new customer relationships as the biggest challenge during COVID-19. Identify gaps in your client and prospect journeys to ensure clients have the best customer service possible. Work to improve your technology to shore up any gaps and keep your client base engaged. McKinsey also reported that 44% of agents rated either agent digital tools or customer tools as the number one capability insurers can invest in to support them right now. Agents identified the biggest gaps, or obstacles that currently impede

productivity as electronic signatures, application and submission forms, and client onboarding, and recommended they be digitized. Weigh the costs of technological improvements and decide when and how they can benefit your business. These improvements may increase your client base and deliver the best returns. Independent agents will continue to be a solid force of insurance distribution through this pandemic. They may have to review and change their marketing strategy to reach targeted audiences more often, but with a solid and effective branding and marketing strategy in place, they will maintain and increase their share of business. Coombs is the executive vice president and chief marketing officer of SIAA (Strategic Insurance Agency Alliance, Inc.). Email: dougc@siaa.net. NOVEMBER 16, 2020 INSURANCE JOURNAL | 41

Idea Exchange: Agency Management

Thinking Ahead

When Building an Insurance Agency Foundation

nearly universal problem during the coronavirus pandemic has been running out of programs to binge watch on television. I hate to admit it, but thatâ&#x20AC;&#x2122;s true for me, and it has resulted in my watching obscure architectural programs. In a recent episode, I watched a fascinating building being constructed with an unusual foundation, which though it was different, was uniquely suited for the building and the site. This led me to think about how important, and often overlooked, the foundation of an By Tony Caldwell insurance agency is when first created. The foundation of any business is its legal form of organization. In my experience, that form is chosen as a consequence of a very quick call between the founders and their CPA and not much else. While this generally works out, there are potential opportunities missed. Most agencies are created with some kind of tax pass-through facility like a sub S corporation (S Corp) or Limited Liability Company (LLC). There may be a sole owner of the business, but frequently two or more people form a partnership to create an agency. In these circumstances, real care to anticipate future issues can save many operational and other problems down the road.

Avoiding Partnership Pitfalls

In a partnership, whether organized as a corporation, S Corp LLC, or the true partnership form of legal organization, ownership is generally held on the basis of capital contribution. While that may be entirely adequate, there are other forms of capital besides cash. For example, one partner may be con42 | INSURANCE JOURNAL | NOVEMBER 16, 2020

tributing significant intellectual property in the form of niche market expertise, depth of management experience or important carrier relationships. These noncash contributions have real value, and accommodating them in the ownership structure not only recognizes their value but can potentially avoid future problems. Another structural challenge in a multi-owner insurance agency is how to keep the ownership fair as the agency develops. An insurance agencyâ&#x20AC;&#x2122;s largest asset is its book of business. If one or more shareholders produces a larger-than-average book of business, they may grow frustrated at some point if they feel their equity ownership is disproportionate to their production. These kinds of issues are difficult to deal with in a corporate structure but are easily solved with an LLC, where equity can be divided among different asset classes. For example, an LLC can create separate divisions to own book(s) of business, furniture, fixtures and assets as well as cash to keep this production disparity fair. Another potential problem in small, closely held, multi-owner companies arises when one or more of the owners feels they are doing more work than the other owners and not being fairly compensated. A simple way to deal with this issue structurally is to divide management responsibilities, use benchmarking tools to establish a relative cost for those management responsibilities and pay the responsible owner a salary based on those benchmarks. Another issue to consider in a small business is how owners will take advantage of their unique tax-avoidance opportunities. Things like country club

memberships, automobiles and other perks of ownership are both great benefits of being in business for yourself, but also potentially points of contention, disagreement and fracture with partners. One way to deal with these issues, while keeping financial statements clean, is for each owner to hold his or her interest in a holding company and use that entity for ownership perks. This way, no disparity or jealousy will arise. Everyone will do as they please while being treated fairly. When putting together any business entity, owners who think through all of these issues in advance will help ensure their business not only gets off to a great start but stays the course of time with little or no friction or disagreement.

Creating Unique Structures

My own agency is a good example of creating unique structures as the foundation for a business. Recognizing the potential for just these sorts of problems, my partners and I created an ownership structure using an LLC with three divisions. The first division owned all company physical assets and all owners made an equal contribution to that division. The second division owned our property and casualty business. The third division owned our employee benefits division, which has a different value per dollar of revenue than the property and casualty business. Later, as we added non-owner producers, we agreed to create a fourth division, and the equity and profits attributable from that division would be shared on the same basis as our core asset division, and we each made identical capital contributions to get it started. This unique structure solved for us some of the structural problems described above. Another example is an agency my company assisted during its foundation, growth and sale. This agency took the unusual approach of paying all three owners equally throughINSURANCEJOURNAL.COM

out the agency’s life. One partner produced the lion’s share of the business, another created and managed operations, and the third positioned and sold the agency. Some might think these entrepreneurs’ structure odd because in a typical agency, the producer partner would have been paid a large producer’s commission. But the partner’s business objective was to build an agency quickly and sell it for a best-in-class valuation. Their structure was created to support their business goals, and it worked very well for them.

Making a Change

What if your agency has been in business a long time but some of the problems I mention resonate uncomfortably with you? Change! It is more difficult to reorganize an existing business and repair the foundation than doing it at the beginning. But it can, and should, be done when necessary. Just like a building foundation that has cracked or sagged, you need to call in the specialists. This is where a really good tax advisor (not necessarily the firm that prepares your taxes) and attorney who specializes in business organization can be of tremendous value. There are not only operational improvements that can come from reorganizing but often additional tax advantages. Getting the foundation for your business to support your business needs and objectives is a great project anytime during the life of the agency. In creating a new agency, it’s important, and valuable, to carefully think through not just the tax considerations of ownership structure, but also how you want to operate the business and how you will want to deal with ownership challenges as they come up. Serious discussion among owners, or careful thought by the sole proprietor, along with sound advice from tax advisors and input from experienced owners who have been where you are going, are all great ways to make certain the business you are creating lasts. Caldwell is an author, speaker and mentor who has helped independent agents create over 250 independent insurance agencies. Website: www.tonycaldwell.net. Email: tonyc@oneagentsalliance.net. NOVEMBER 16, 2020 INSURANCE JOURNAL | 43

Idea Exchange: The Competitive Advantage The

UnStrategy

have been legitimately and constructively criticized for spending too much time in my seminars describing the issue By Chris Burand at hand, building urgency to change and identifying what people are doing wrong. The advice I’ve received is to do what other speakers do: Tell stories about what should be done and ignore what should not be done. I’m working on finding the right balance. Psychologically speaking, focusing on the goal is the right advice. “Look to where you want to go.” “Drive to the point.” “Stay focused on the end goal.” All these adages are correct, with a catch. The catch in keeping your eyes on the prize is that the goal must be immediate, 44 | INSURANCE JOURNAL | NOVEMBER 16, 2020

or it lacks tangibility. Additionally, saying, “Stay focused” is easy. Staying focused for a long time is much more difficult. A crucial key to staying focused is eliminating distractions. Many distractions are in the category of “What should not be done.” Another key for focusing more successfully is emphasizing execution rather than strategy. Without intense focus on execution, strategy usually does more damage than good. After all, strategy without execution is worthless, at best. Execution without any new strategy can often work quite well for a long time. Knowing what to do generally should begin with the knowledge of what not to do. Eliminate distractions such as a messy desk so the person can focus on what actually needs to be achieved. The difference is that the person is not focusing on what not to do. Instead, those distractions are being eliminated so the person can focus

on what to do. This is why I begin many presentations with what not to do. The other advantage of this approach is that it prevents many faulty starts. By eliminating the distractions, humans are more likely to find the right solutions more quickly. The way the human brain generally works before those distractions are cleared is it creates an emphasis on finding the exact right solution immediately. A client of mine uses the analogy of fishing (and he is a good fisherman): “I don’t know where the fish are, and I don’t pretend to know where the fish are. I eliminate where they are not which immediately increases the odds of finding them.”

Bayesian Theory

In the high-level numbers world, this is the basis of Bayesian Theory. Quit pretending to have all of the answers or having the INSURANCEJOURNAL.COM

need to discover the right answer the first time. Life is too complex. Eliminate the known losers, and finding the winners will be easier. In sales, what I know relative to this approach is that if one eliminates all potential prospects that will never buy from you, the odds of making sales to others will increase. This strategy is more efficient (take less time), and you will make more money. I also know that insureds do not need agents who do not know what they are doing. I am not saying all insureds need agents who know what they are doing. Not needing incompetent and uneducated agents is not equal to not always needing the smartest agent. Being uneducated is where no success (no fish) exists. Does this mean success is guaranteed if one is well educated in insurance knowledge? No, but the odds are much higher. One of the advantages of eliminating the negative space is that the person minimizes some of life’s complexities. A client sent me the book, “Six Simple Rules: How to Manage Complexity without Getting Complicated.” A great read.

Leadership

Switching to management, why is managing producers so complicated? Because managers make managing producers too complex. They do not eliminate what is known not to work, especially with producers who do not produce. By giving producers extra chances, forgiving them when they don’t follow procedures, and so forth, one is making life more complex. Give them hard parameters for doing their jobs and provide them with the training they need. Then, make it simple – let them decide if they want to

succeed. Quit holding their hand for 10 or 20 years. Why is hand holding so prevalent in the industry? Because people like drama. People dislike accountability. Strategy and strategic planning provide drama without accountability. Simplicity and execution can be boring and carries a high degree of accountability. Many leaders like to portray the charade of power, strategy, big plans and the drama of getting big things done regardless of whether big things ever get done.

A strategy without a deep foundational knowledge of execution is a multi-story building with a bad foundation. A well-known insurance company that has lost money for 10 consecutive years – years in which carriers averaged about $50 billion in annual profits – and has not materially grown in that time constantly releases great strategic plans with all of the dramatic terms. Its latest is that it will double in size. But, nothing is ever done to successfully execute these plans, or at least the execution does not indicate success. A leader must truly want real results — whether drama is or is not involved — if they are to achieve real results. Their focus must be on achieving the results – the drama, often the strategy, must be set aside. To start, do not consider any strategies that do not have a high degree of black and white accountability built into them. Consider strategies with high probabilities that execution can be achieved. I cannot find much evidence to support that most hedge funds or private equity make much money, except for the managers of these entities. Two though have made a lot of money over a long period

of time. One is Norges Bank Investment Management, Norway’s sovereign fund. The long-time manager of the fund recently retired and offered this advice using an analogy to tennis. First, do not make basic mistakes. Be solid. Only then should one be smart.

Zen and the Art Of…

In tennis terms, this means “Don’t make stupid errors, keep the ball in play, and when you finally do this well, be patient for an opportunity to make a kill shot.” “Zen and the Art of Tennis” (In other words, Zen and the Art of Archery, Zen and the Art of whatever else uses the same philosophy from different angles that might be more beneficial for different readers). I can tell you that my clients who devoted the last two years to developing great basic skills are increasing sales today, in the pandemic, and at a record pace. I believe the least is 15% (not including rate increases). I take some credit relative to my Three Dimensional Training® program. When one truly knows their coverages, deeply knows their coverages, they can be so much smarter and innovative as to how to apply and execute those coverages relative to each specific client. Without deep coverage knowledge, strategic sales and risk management are oxymoronic practices. It means making stupid errors over and over while pretending to be smart. A strategy without a deep foundational knowledge of execution is a multi-story building with a bad foundation. Easy credit will buttress the walls for some time, but no real success will be achieved unless the real estate is sold to someone else quickly. Identify what does not work. Focus on execution and avoid the distractions of sexy initiatives until your foundation is strong enough to support them. Buy into the value of using a more boring but more successful approach, and you are likely to find a lifetime of success for yourself, your employees and your clients. Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-4853868. E-mail: chris@burand-associates.com.

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NOVEMBER 16, 2020 INSURANCE JOURNAL | 45

My New Markets Towing

Market Detail: Arrowhead General

Insurance Agency Inc. (www.arrowheadgrp.com) provides insurance for towing businesses through its Automotive Aftermarket Program (formerly Universal Underwriters). This product provides coverage for established operations with industry experience primarily engaged in towing automobiles. This can include auto club contractors, auto body shops, auto mechanical repair shops, roadside service providers and rotational towing operations. Target markets include: Operations engaged in towing automobiles; operations running a loss ratio of 40% or less over a five-year period; experienced drivers 25-years-of-age or older with clear driving records; trained drivers (wreckmaster certification or state association training preferred); towing radius of less than 300 miles; and total liability limits of $2 million or less (higher limits may be available). Coverage highlights include: property – building replacement; contents (stock and equipment); equipment breakdown; business interruption and extra expense; broad coverage extension endorsement; automobile liability. Crime coverage available includes: money and securities; employee dishonesty; forgery and alteration. General liability coverage includes: products and completed operations; personal and advertising injury; damage to rented premises; employee benefits liability; and medical expenses. Automobile liability coverage includes: commercial tow trucks; other fleet/business vehicles; garagekeepers coverage; and cargo pollution liability. Inland marine coverage includes: mobile equipment floater; motor truck cargo legal liability; electronic data processing equipment; and business income. Arrowhead’s risk management services feature: loss prevention services and tools; driver selection and training programs; employee safety handbook development; fleet maintenance/safety programs; loss prevention bulletins; on-site risk engineering visits to identify property and premises hazards, professional insight into towing industry. Claim services provided by Zurich and include loss prevention services and tools tailored for large and small businesses, 46 | INSURANCE JOURNAL | NOVEMBER 16, 2020

adjusters who can respond to most claims within 48 hours, and on-the-spot check-writing authority. Available limits: As needed Carrier: Zurich States: D.C., Fla. and La. Contact: Marketing Info at 800-669-1889 ext. 8733 or e-mail: marketinginfo@ arrowheadgrp.com

Accountable Care Organization (ACO)

Market Detail: Capitol Special Risks (www. csrisks.com) concept and implementation of accountable care organizations is quickly evolving — health care providers, including primary care physicians, specialists, and hospitals, work together collaboratively and accept collective accountability for the cost and quality of care delivered to a population of patients. Captiol Special Risks can help tailor policies specifically for accountable care organizations. Available coverage includes: errors & omissions, including peer review, utilization review, coordination of care, management and marketing of the ACO, providing quality assurance, and establishment of provider networks; regulatory coverage for judicial, administrative and regulatory proceedings brought on federal, state or local level, and also responds to specifically addressing ACO-specific challenges including dedicated side A coverage - excess coverage for insured persons; employment practices liability including but not limited to, protection for wrongful dismissal, discharge or termination, harassment, discrimination, wrongful failure to employ or promote, deprivation of career opportunity, demotion, evaluation or wrongful discipline, and retaliation claims; fiduciary liability and crime coverage. Available limits: Maximum $25 million per coverage section Carrier: Unable to disclose States: All states Contact: Dorothea Westin at 770-618-1010 or e-mail: dwestin@csrisks.com

Motor Transport Mutual Risk Retention Group

Market Detail: Motor Transport Managers

(MTM) (www.mtmrrg.com) is the exclusive program manager and responsible for daily operation of Motor Transport Mutual Risk Retention Group Inc. MTM RRG is a mutual insurance company that offers auto liability, motor transport cargo liability, and general liability for last mile delivery operators in 49 states (excluding Florida). New brokers welcome with no previous book of business required for an appointment. Program highlights include: last mile delivery for furniture and appliances; 10,000 to 35,000-pound vehicles (up to Class 6); less than 100-mile radius; CAL, MCL, GL offered; excess/ umbrella policy available; one to five units quoted online. Available limits: As needed Carrier: Motor Transport Mutual Risk Retention Group Inc. States: All states except Fla. Contact: Thomas Rogers at 941-894-7208 or e-mail: trogers@mtmanagers.com

Contractors General Liability - FL, GA, NC, SC, TX and TN

Market Detail: Frank Winston Crum Insurance Co. (www.frankwinstoncrum. com) is a commercial insurance carrier that specializes in providing reliable and affordable workers’ compensation and general liability insurance. FWCI conducts business in 37 states through a network of independent agents, and an affiliate relationship with FrankCrum, a professional employer organization (PEO). Available limits: Minimum $750 Carrier: Frank Winston Crum Insurance Co. States: Fla., Ga., N.C., S.C., Tenn., and Texas Contact: Tyler Huerkamp at 866-218-4219 ext. 1426 or e-mail: tylerh@fwcrum.com

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Idea Exchange: Management Business

Divorce

By Louis Lehot

reakups hurt — both financially and emotionally — in both business and in marriage. Just as sociologists have predicted spikes in marital divorce rates, there is now also a noticeable increase in partner disagreements in healthy, thriving businesses. And insurance companies are no exception. Since the first case of the contagious coronavirus was found in the United States on Jan. 20, 2020, the COVID-19 pandemic has had clear and significant implications for businesses, large and small, across the country. Business owners and investors in the insurance industry must now come to terms with the reality of an increase in “business divorces” in 2020 and beyond. A business divorce is one of the most painful events any business owner can experience. From the outsider’s perspective, it is “just business,” but the business divorce often creates just as much 48 | INSURANCE JOURNAL | NOVEMBER 16, 2020

emotional drama as a divorce between spouses. Similar to a marital dissolution, a business divorce can be full of egos, emotions, accusations and expensive legal fees. Often, when it’s all said and done in a business divorce, the divided parts equal less than the pre-divorce whole. No matter how well documented the partners’ business relationship is, a business divorce can still be nasty and expensive as parties look for loopholes in contracts, claim financial irregularities, and more. Today, insurance companies play a pivotal role during times of economic stress by helping companies and people manage risks and cushion against losses. As one of the largest groups of investors, they are especially vulnerable to volatility in financial markets. It would be smart for insurance company owners to take a look at positions with partners, investors and investments, and make some hard decisions to protect their future. The same is true of insurance agencies.

While publicly held companies such as airlines in the news these days tend to have diversified investor and owner bases with a corporate structure to address business challenges, many insurance firms do not. Instead, many insurance firms have two to three partners and one to two primary investors. While these businesses might face a similar economic environment and business challenges resulting from COVID-19, they operate through a partnership where decision-making is not streamlined. During the current COVID-19 pandemic, insurance companies may need to respond drastically when business is not profitable. The current coronavirus crisis and required responses can be the subject of real disagreement among insurance company owners. It may also affect how owners resolve them. Some will seek to sell shares and member interests, while others may invoke dispute resolution procedures and pursue relief under a INSURANCEJOURNAL.COM

governing state statute. We are seeing an increasing number of situations where the owners find that business divorce is their only viable option. According to a recent report by The University of Miami Herbert Business School, with corporate divorces thorough due diligence is recommended to reduce information asymmetries. While industry and location knowledge is essential, organizational culture is a crucial factor that needs to be assessed before entering into a merger. “Not all corporate divorces are bad, some are necessary,” wrote Désirée-Jessica Pély, a visiting scholar. “That’s mainly when you realize the industry is going down; it’s not a good fit anymore. And there are divorces because maybe it was a bad decision to get married in the first place — you didn’t do enough due diligence to investigate.” The report showed that unforeseen “shocks’’ within the industry and cultural dissimilarities were primarily to blame for many breakups. “Shocks” have to do with disruptions in the industry or the economic landscape that neither company could have foreseen and that cause even a well-conceived strategy to go south. For instance, the current COVID-19 scenario is an extreme example of a shock. Insurance companies today are facing

many of the same issues, according to a Law360 expert analysis, including: demand for products may have fallen; supply shortages and delays are affecting companies resulting in scarcity and higher costs; disagreements about employees that are currently not needed and salaries that are no longer affordable; businesses unable to fulfill contracts; fixed costs that will remain due; and cash needs that may have changed significantly. At the onset of COVID-19, there was a great deal of information published about close to impossible exit strategies like force majeure, frustration of purpose, impossibility, outs due to “material adverse change,” management deadlock, and judicial dissolution. Although these are extraordinary times, there is no certainty that these remedies will be successful in an unprecedented pandemic. Consequently, in most cases, business relationships and the contractual agreements cannot just be set aside with equal division of assets and future potential business prospects. Therefore, it is essential that all business partners deal head-on with the operative agreements in their business relationships, with extra scrutiny. During these extraordinary times, planning is crucial. It is best to take out the partner agreements and get ahead of the problems now.

November 16, 2020 November 16, 2020 CorePointe Insurane Company 251 Little Falls Drive Wilmington, DE 19809

General Security National Insurance Company 28 Liberty Street, Suite 5400 New York, NY 10005

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

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

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

INSURANCEJOURNAL.COM

Lehot is the founder of L2 Counsel, P.C., a boutique law firm based in Silicon Valley. Lehot is a corporate, securities and M&A lawyer, and is formerly co-managing partner of DLA Piper’s Silicon Valley office. November 16, 2020 Mobilitas General Insurance Company 5353 West Bell Road Glendale, AZ 85308 Mailing: P.O. Box 23392 Oakland, Ca 94623-0392 The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

Advertisers Index Applied Underwriters 2, 3, 52 www.auw.com Brighthouse Financial www.brighthousefinancialpro.com 15 Cypress P&C www.cypressig.com FL3 EZLynx www.ezlynx.com 12, 13 FSLSO www.fslso.com FL20 GIC Underwriters, Inc. www.gicunderwriters.com FL1 LAAIA - Latin Amer Assoc of Ins Agencies www.laaia.com FL19 Lighthouse Holdings, LLC www.lighthousepropertyins.com SC3, S1, FL5 M.J. Hall & Company www.mjhallandcompany.com W1 Monarch E&S Insurance Services www.monarchexcess.com W3 National General Flood www.ngic.com FL11 PersonalUmbrella.Com www.personalumbrella.com 4, 5 RT Binding www.rtbinding.com 11 Ryan Turner Specialty www.rtspecialty.com 9 Smart Choice Agents Program www.smartchoiceagents.com 7 St. James Insurance Group www.stjamesinsurance.com FL7 St. Johns Insurance Company www.stjohnsinsurance.com FL9 Summit www.summitholdings.com SC1, S3, M1 The Wedge Group www.thewedge.net 51

NOVEMBER 16, 2020 INSURANCE JOURNAL | 49

Closing Quote Senior Living in a Post-Pandemic World

P By Joe Levy

‘With COVID-19, the potential for liability claims could far outpace collected premiums.’

roperty/casualty insurance for senior living facilities has taken a hit this year. The insurance market has been hardening for the last year or two, and the COVID-19 pandemic brought on a wave of new challenges that has only compounded the problem. Brokers who are working with these health care organizations should be particularly wary of increased liability and more stringent underwriting as we move into 2021. This past year has only accelerated the pace of premium rate increases that the senior living world was already facing. Insurance companies are reluctant to provide coverage for organizations because they carry inherent risk. As a result of the intense media coverage and negative publicity directed at the senior living industry, we anticipate families are more likely to file negligence, quality of care issues or wrongful death claims as a result of COVID-19. The expectation among insurance company executives and plaintiffs’ attorneys are that the COVID-19 related liabilities are going to impact the liability market for the next several years. Even with strong risk management plans in place, senior living facilities cannot eliminate this liability altogether. With COVID-19, the potential for liability claims could far outpace collected premiums. Paying out more in claims than they’re bringing in has forced insurance companies to raise rates. Some insurance companies have elected to stop insuring these organizations altogether, which also drives up

50 | INSURANCE JOURNAL | NOVEMBER 16, 2020

rates. It’s a supply-and-demand marketplace. When there is significantly less supply, the cost rises. Even newer carriers in this space are being hit with higher than expected claims volumes. None of this is good news for senior living operators who, historically, have already been operating on thin margins. Over the past several months, they have taken on significant additional expenses to disinfect facilities and obtain additional personal protective equipment. Now, they are faced with the fact that most of the major insurance companies who provide professional and general liability coverage are in the process of adding COVID-19 exclusions. This is almost certainly going to be a universal change for future policies, and brokers should start informing clients to prepare for this at their next renewal. Clients will likely be facing additional exclusions and rising rates for the foreseeable future as insurers continue to grapple with the effects of this tumultuous year and what lies ahead.

Looking Ahead

The bottom line heading into 2021 is that everything is more challenging and taking more time. The liability impact and escalating rates have clients and insurance companies determined to do their due diligence and avoid more financial fallout. Underwriters are scrutinizing risks more closely than ever. Agents and brokers need to demonstrate that their clients are meeting the insurance companies’ requirements before they can

secure coverage. In order to prepare for extremely lengthy and protracted renewals, agents and brokers should be starting the process earlier than under normal market conditions. Their aim should be to be as proactive as possible. Most insurance companies are now requesting a COVID-19 questionnaire. These questionnaires ask reasonable questions about what’s going on in the facility, what additional safety measures have been put in place, how many cases of COVID-19 the facility has had, and how they were dealt with. This might make some clients nervous, but it actually creates an opportunity for open and honest dialogue. A big part of the agent’s job now will be to proactively manage cases and help to prepare clients for anticipated and unanticipated financial challenges. Hopefully, there will soon be a vaccine and abatement of the virus, but even with a solution, we are unlikely to see premiums decrease for the foreseeable future. Agents and brokers will need to take the lessons learned in 2020 with them into the next year. The organizations that thrive will be those that have maintained financial stability and improved their operations to effectively manage and minimize the spread of disease. Hopefully, no matter what the new year holds, we will have learned enough to ensure that we will be better prepared for what lies ahead. Levy is a senior vice president for Risk Strategies’ Health Care practice. INSURANCEJOURNAL.COM

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