Insurance Business America issue 3.06

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IBAMAG.COM ISSUE 3.06

N O S R E C U D O R P nd a – r o gf n i k o o el ng r i r a e s v r i l e d uce e d r o a r p s What her carrier whet

GET IN THE GAME TECHNOLOGY TO TAKE YOUR BUSINESS TO THE NEXT LEVEL

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VACATION SEASON THE TIME IS RIGHT TO BREAK INTO THE HOSPITALITY INDUSTRY

DIRECTORS & OFFICERS WHAT'S AT STAKE WHEN THEY'RE NOT COVERED

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I NTRODUCING

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ISSUE 3.O6

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CONTENTS

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UPFRONT 04 Editorial

The producer-carrier relationship

FEATURES

30

ROOM WITH A VIEW

COVER STORY

22

Americans are vacationing again – and that means the market for hospitality insurance is growing

PEOPLE

INDUSTRY ICON

2

08 News analysis

The FIFA scandal puts reputational risk back in the spotlight

10 Head to head

Closing the gap in business interruption coverage

11 Opinion

Reaching young people isn’t a new issue, writes Karen Costain This month’s big movers and shakers

14 Technology update

Selling telematics data to boost profits

FEATURES

36

THE COST OF DOING BUSINESS

More corporate leaders are waking up to the fact that D&O insurance is a must-have protection

Kaufman Financial Group’s Alan Jay Kaufman is leading the charge to increase the industry’s focus on education

18

The global cyber threat

12 Intelligence

PRODUCERS ON CARRIERS

In this second annual survey, IBA reveals where carriers are living up to producers’ expectations – and where they’re falling short

06 Statistics

16 Workers’ comp update

Liberty Mutual’s diminishing role

T b

FEATURES 34 Agency insight

Johnson, Kendall & Johnson

40 Making movies

10 things you should avoid when making videos to connect with clients

42 Change or die

How to keep your business relevant

PEOPLE 44 Producer profile

49

SPECIAL REPORT

INSURANCE IN THE DIGITAL AGE

Technology is no longer optional for agents – find out where you need to invest now

Eric Reingen found his niche in CrossFit

47 Career path

J.B. Woods’ unlikely road to independence

48 Other life

Ivy Riggs’ colorful creations

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UPFRONT

EDITORIAL

A special relationship

W

hen Google announced its intentions to enter the insurance comparison business, industry analysts sounded off on another round of doomsday predictions for the independent agent.

While agents themselves remain unconcerned about the increasing Internet presence in the insurance business, it’s difficult not to argue that the game has changed. In such an environment, the relationship between agents and their carriers has never been more important. That’s why Insurance Business America is continuing its annual investigation into the state of affairs between producers and carriers.

Hundreds of agents replied to our most recent survey, rating a significant portion of the nation’s 2,758 property/casualty carriers on several factors and identifying just what’s important to today’s agent. We’ll save the results for our cover story (see page 22), but several items from this year’s results stand out.

First, while producers seem to be content with the offerings of their carriers, that’s about as far as the praise extends. In fact, it seems the highest producer

It seems the highest producer priorities ... are most often met with the lowest carrier ratings priorities – such as competitive rates and commitment to the broker distribution channel – are most often met with the lowest carrier ratings. Despite giving lip service to heeding producer feedback, some carriers don’t seem to be living up to their promises.

Second, producer priorities shift quickly, and carriers have struggled to adapt. Even over the past year, there have been several significant shifts in agent sentiment toward insurers. In 2014, for example, producers cited a carrier’s reputation as their number-one priority, but this year – perhaps fueled by the increasingly soft market – competitive rates are at the top of the list.

In this rapidly changing environment, it is imperative that producers and carriers find better ways to communicate their expectations and satisfaction.

This survey is one such tool, but we urge industry representatives to continue making inroads in technology, data visualization, communications platforms, and old-fashioned, in-person exchanges to ensure the special relationship between the agent and the insurer flourishes.

The team at Insurance Business America

www.ibamag.com JULY 2O15 EDITORIAL Senior Journalist Caitlin Bronson Journalists Ryan Smith Tim Garratt Donald Horne Jordan Maxwell Copy Editor Clare Alexander

CONTRIBUTORS Samantha Wright Geoff Anderson Karen Costain

ART & PRODUCTION Design Manager Daniel Williams

SALES & MARKETING Vice President Cathy Masek Media Sales Managers Chris Wills Chris Anderson Marketing and Communications Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

Designer Joenel Salvador Production Manager Alicia Salvati Traffic Manager Kay Valdez

EDITORIAL INQUIRIES caitlin.bronson@keymedia.com

SUBSCRIPTION INQUIRIES subscriptions@keymedia.com

ADVERTISING INQUIRIES

cathy.masek@keymedia.com chris.wills@keymedia.com chris.anderson@keymedia.com

Key Media 78O7 E. Peakview Ave., Suite 115 Centennial, CO 80111, USA tel: +1 720 316 0151 www.keymedia.com Offices in Denver, Toronto, Sydney, Auckland, Manila

Insurance Business America is part of an international family of B2B publications and websites for the insurance industry INSURANCE BUSINESS AUSTRALIA peter.smith@keymedia.com.au T +61 2 8437 47OO

INSURANCE BUSINESS CANADA john.mackenzie@kmimedia.ca T +1 416 644 874O

INSURANCE BUSINESS NZ peter.smith@keymedia.com.au T +61 2 8437 47OO Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss

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PAST| PRESENT |FUTURE Commitments That Last.

As a recognized leader in the specialty marketplace, we customize our dedicated resources specifically to your client’s needs. Our carriers comprise admitted and E&S capabilities in all fifty states, which can serve as a multi-carrier platform to accommodate all your potential insureds.

Specialty Property & Casualty Programs and Products.

(800) 482-2726 | PROGRAMS@MEADOWBROOK.COM

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25/06/2015 11:39:25 PM

UPFRONT

STATISTICS

The continued cyber threat Your clients may not think that a cyber attack is imminent, but data shows that cyber attacks are spreading – and show no sign of slowing down IT SOMETIMES seems like cyber attacks and data breaches are reserved for the biggest companies in the country, but hackers are increasingly targeting small and mediumsized businesses. Sony, Target and Anthem might take the headlines, but a recent report from PriceWaterhouseCoopers found that there are 117,339 incoming attacks each day on global businesses.

$2 billion Estimated worth of the cyber insurance market

200%

Increase in the amount of data online every two years

North America Average cost of security breach: $2.9 million Average number of detected breaches per year: 5,576

From retail to healthcare, manufacturing to real estate, cyber risk is real for all manner of industries, which is why it’s important for every broker to stay informed about this ever-changing threat. Cyber attacks – and cyber insurance – are no longer a futuristic concept. They are here, and they are happening right now, across the country and around the world.

42.8 million

Number of global cyber incidents reported in 2014

48%

Increase in global cyber attacks from 2013 to 2014

THE GLOBAL COST OF CYBER BREACHES North America bears the brunt of cyber attacks when compared with regional averages in terms of estimated financial losses and average detected security breaches each year.

Source: PwC Global State of Information Security Survey 2015, ACE Evolution of Cyber Risk

THE MOST THREATENED INDUSTRIES When asked about the biggest threats to their business, a majority of leaders from several different industries listed cyber crime as their top concern 80% 75%

While multi-million-dollar settlements make the headlines, most security breaches cost less. Nevertheless, they constitute a major potential drain on company finances, especially for small and medium-sized businesses

70% 65% 60% 55% 50%

Financial Profes- Manufac- Transport Healthcare Technology Wholeservices/ sional turing salers banking services

Real Estate

Source: 2015 Travelers Business Risk Index

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WHAT WILL A BREACH COST YOUR CLIENTS?

$49,999 or less 37% $50,000 to $99,999 15% $100,000 - $499,999 15% $500,000 - $999,999 11% $1 million to $9.9 million 7% $10 million or more 11% Don’t know 4%

Source: PwC Global State of Information Security Survey 2015

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Europe Average cost of security breach: $2.3 million Average number of detected breaches per year: 3,918

Asia-Pacific Average cost of security breach: $2.0 million Average number of detected breaches per year: 3,100

Latin America Average cost of security breach: $1.3 million Average number of detected breaches per year: 3,178

Source: PwC Global State of Information Security Survey 2015

CONCERNS VARY BY BUSINESS SIZE Cyber risks and losses take many forms – and depending on the size of the business, leaders tend to have different worries about the type and fallout of a cyber attack

Cyber attacks come in a host of different guises – network security attacks lead the list, but lost or stolen devices are a close second

70 60

% of leaders worried

50

1 Network security attack 25%

40

2 Lost or stolen device

30

20%

16% 4 Rogue employee 15% 5 Company policies 9% 6 Paper 6% 7 Unknown 6% 8 Software error 3% 3 Human error

20 10 0

NETWORK ATTACK LEADS BREACH TRIGGERS

Viruses

Computer damage All businesses

Hacker gaining bank access

Small businesses

Hacking security breach

Mid-sized businesses

Repairing/replacing damaged computers

Unrecoverable loss of data

Large businesses Source: 2015 Travelers Business Risk Index

Source: ACE Evolution of Cyber Risk

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UPFRONT

NEWS ANALYSIS

Red carded As scandal continues to plague FIFA’s reputation, the corporate world’s most dynamic risk – and the policies that cover it – have been brought to the forefront once more THIRTY-FIVE YEARS ago, Joan Jett famously wailed that she was “never gonna care” about her bad reputation. Today, she may be the only one. Indeed, the concerns over brand and reputation as a strategic risk are such that even the global governing body for the world’s most popular sport is not immune.

It’s been a rough few months for FIFA, the Fédération Internationale de Football Association, culminating in the June resignation of the organization’s president, Sepp Blatter, and indictment of nine FIFA officials.

Shadowy allegations and government inquiries have dogged FIFA for the better part of the year, spurring worldwide reflection on power, greed, temptation and the financial fallout that can plague a once-respected brand.

For the insurance community, the tale is a stark reminder that a fall from grace can

taken more than $150 million in bribes for media and marketing rights.

FIFA is also under fire for allegedly taking bribes for the 2018 Russia World Cup and the 2022 Qatar World Cup – accusations currently being investigated by the Swiss government. Moral questions have also come up, as some reports have estimated that more than 1,000 workers have died while building the stadium for the Qatar event, and 4,000 more are estimated to perish by its completion, though it’s difficult to assess how many of these deaths are directly related to the World Cup. In addition to the official government investigations, the scandal has raised questions about a possible relocation of the 2022 World Cup. The financial fallout from that decision could have a severe impact on Qatar, which is expected to spend $200 billion over a 12-year period in preparation.

“A business reputation ... may be irrevocably blemished due to breaches in its ability to conduct business ethically, securely or responsibly” Loretta Worters, the Insurance Information Institute destroy even the most popular and powerful.

Tracing the scandal back to its origins is difficult, but after years of rumors that Blatter and other FIFA officials were accepting bribes and using earmarked money for their own purposes, several officials were indicted in May by the Department of Justice. According to prosecutors, they had

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Already, the country’s stock market has dropped three percentage points due to the threat of relocation.

The government investigations and possible World Cup relocation raise valid questions about global insurance policies, but FIFA’s fall from grace provokes a far more nuanced question about risk management in the 21st

century: Can reputational risk ever truly be insured against, and if so, how effectively?

There is no arguing against reputational fallout as a serious threat to business.

According to Aon’s 2015 Global Risk Management Survey, damage to brand and reputation is the number one risk concerning business executives around the world. Given the unique nature of digital communication, the rising importance of the consumer and the fact that, according to a World Economic Forum study, more than 25% of a company’s market value is directly attributable to its reputation, the concern is hardly surprising.

“A business reputation, particularly the trust placed in the organization by its customers, may be irrevocably blemished due to perceived or actual breaches in its ability to conduct business ethically, securely or responsibly,” says Loretta Worters of the Insurance Information Institute.

While reputational risk can encompass many things – such as pollution or product recalls – in the case of FIFA, the damage is more nebulous. The organization’s current

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A GOOD REPUTATION CAN’T BE BOUGHT ACE asked global business executives how strongly they agree with the following statements Reputational risk is more difficult to manage than any other specific risk category 92% Reputation is our company’s most significant asset 81% We monitor and measure our reputation on an ongoing basis 77% We find it difficult to quantify the financial impact of reputational risks on our business 77% Information and advice on managing reputational risk is difficult to come by 68% We feel inadequately covered for our reputational risks from an insurance perspective 66% Ultimate responsibility for reputational risk lies with the CEO/managing director 56% insurance status is unknown, but the case provides a reasoned argument for the purchase of reputational risk insurance coverage, particularly for large companies and well-known brands.

A reputational risk insurance policy gives the insured the ability to consult with experts whenever a threat to reputation is identified, or at the first sign of negative publicity. It also connects the insured to experts who

television, print and online advertising, as well as the launch of a social media campaign and monitoring of the brand after negative publicity.

Of course, there is only so much an insurance policy can do to diffuse loss due to reputational fallout. According to a global survey conducted by ACE, more than threequarters of respondents agree that it is difficult to quantify the financial impact of

“There is much that insurers and brokers can do collectively to help their clients manage reputational risk” Andrew Kendrick, ACE European Group can develop a communications strategy and manage the disclosure of sensitive information before it becomes public.

Some coverage options can also provide cover for the cost of communications in response to bad publicity, including

reputational risk on their businesses.

“Nevertheless, we believe there is much that insurers and brokers can do collectively to help their clients,” says Andrew Kendrick, president of ACE European Group. “This could include the evolution of new, more

Social media has greatly exacerbated the potential for reputational risks to affect our company 56% Source: ACE

holistic insurance solutions that involve the input of crisis and PR specialists. More generally, it should involve professional risk engineering to improve risk management processes and governance.”

Kendrick recommends brokers work side-by-side with clients to develop better ways of tracking perceptions of their main external stakeholders, such as customers, the media, pressure groups or regulators.

Additionally, brokers should help clients test crisis response plans regularly to allow for a faster response when reputational damage does strike.

While there is no easy answer to the kind of fallout currently afflicting FIFA, encouraging better risk management techniques and ensuring proper coverage can go a long way to reduce the consequences of a loss of good opinion.

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UPFRONT

HEAD TO HEAD

Can business interruption coverage gaps be closed?

Gaps in this coverage could leave clients vulnerable – especially when it comes to claims surrounding civil unrest

Mallory Leonard

David Schaefer President and CEO AHT Insurance

Executive director Rocky Mountain Insurance Information Association

“Civil unrest is one risk that’s generally covered in business insurance policies.

Yet keep in mind that other risks – like weather, theft and unexpected accidents – are likely more common, and can expose a business to liability.

Whether it’s civil unrest or some other concern, it’s important for insurance agents to encourage their business owner clients to meet and discuss business interruption coverage, and to ensure those clients are planning ahead to ensure data backup and recovery does not become an issue – like if computer hardware is damaged – and that the business will be assisted with costs of meeting payroll or temporary relocation due to a loss.”

“There is coverage available for political risks, but there aren’t many carriers that offer business interruption as a part of that coverage, especially for smaller risks.

There are certain elements of business interruption insurance that would be responsive to providing coverage if the government is the one creating the lack of access or loss of use.

The other thing not to forget is that claims of this type have a waiting period that serves as the deductible. Most coverage wouldn’t have been triggered in Baltimore, for example, because the disruption ended before most common deductibles would have been satisfied.”

“The biggest gap in business interruption insurance is not having coverage to pay for loss of revenue and payroll when a business can’t do business.

Clients who weigh the odds that their business will never be a victim of civil unrest are not making a wise bet because insurance will help keep doors open in any insured loss event, such as a fire, tornado or burglary.

Even if there isn’t direct damage, a business interruption policy can save a business when it is unable to operate.

Exclusions, deductibles and interruption causes can vary, so when advising businesses, help them understand what it covers and what it doesn’t.”

Agency owner Allstate, San Diego

Carole Walker

MIND THE GAP Most business owners have some form of business interruption insurance, but that coverage usually only goes so far. Recent instances of civil unrest in Baltimore and Ferguson, Missouri, have highlighted the gaps in coverage that many businesses could face.

Carriers that cover business interruption due to civil unrest are hard to come by, making this type of coverage expensive. What’s more, many policyholders think they’re covered in the case of a riot or even an extreme weather event, but certain exclusions, including mandatory waiting periods, could leave them vulnerable.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email iba@keymedia.com

It’s not a millennial problem Brokers are calling on the industry to better serve millennial clients, but, as Karen Costain writes, reaching out to young people isn’t a new issue MILLENNIALS ARE our existing and future consumers, so we cannot afford to ignore them. For our industry to grow and flourish, we must ensure our business development strategies and marketing plans include awareness campaigns that target the specific needs of the millennial client base.

So what is the optimal strategy to guarantee success? The first issue we have to address is their lack of awareness of our services and products. Millennials need to immediately comprehend the value of their purchases and have the ability to purchase what they want instantly and efficiently. Herein lies our challenge as an industry. We have to embrace new platforms for communicating and educating our clients, and find a way to stay connected to this population so we can ensure they are protected with the right products.

However, the lack of awareness is not specific to millennials. Every generation of 20- to 30-year-olds fails to contemplate protecting themselves. This is an age of spontaneity, of confidence, and there’s no fear of loss. They’re living in the moment. Every generation has experienced this inability to see the value in protecting themselves – this is not a millennial phenomenon. The question is: What does this next generation require us to do to ensure they’re aware that the risks they take today can affect their future? And how can we express the way our products and services can best protect them?

As a member of Generation X, I witnessed technology transform everything from our purchasing habits to the way we communicate. These changes directly affect the way we as insurance brokers need to design our strategic growth plans for the future.

seconds to win their attention. How do we create awareness in just 30 seconds?

In the travel insurance industry, for instance, we’re working with our partners to create short and impactful YouTube videos that underline the results of what could happen if you don’t have travel insurance products for your vacations. Sometimes you can infuse humor or use a shock-and-awe strategy, but you have to get your point across immediately with a call to action for your audience so they can either do more research or purchase your products online. This is what millennials are searching for and what they respond to. This method creates the awareness they require and presents them with an immediate value, creating an urgency to purchase travel insurance.

It is important to note that insurance brokers and companies have a great deal of privacy and compliance restrictions in regard to what they can and cannot do online. This extends to the point of sale systems and online business-to-consumer sites. Brokers need to be involved in working with regulators

“The next generation absolutely must be able to purchase all their insurance products online – without exception” But millennials are also accustomed to buying what they want the moment they want it, and they have all the tools to purchase products available at their fingertips. This is especially important for brokers to remember as consumers, particularly millennials, increasingly move online.

For instance, if your clients purchase flights and book hotels online, it is imperative that they be able to purchase insurance products online as well.

This change is less a result of the evolution of the Internet; instead, it’s a product of the evolution of the ways we communicate. We have to alter how we communicate with this or any generation. To reach all of our key demographics, we need to communicate with them over the platform of their choosing.

For many millennials, that means social media. However, we are afforded just 30

to allow us to evolve our online presence so we are able to meet the diverse needs of this crucial segment of the population.

Our job is to ensure millennials see the value of insurance protection and that they understand the repercussions should they opt not to purchase this insurance. The next generation must be able to purchase all their insurance products online – without exception. This will not only protect millennials’ financial futures, but also ensure they see insurance brokers as integral components to their financial well-being.

Karen Costain is Allianz Global Assistance’s director of business development for Western Canada. She is a 27-year veteran of the insurance industry, holds a level three general insurance licence and is a certified corporate trainer.

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PRODUCTS

UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Alliant Insurance Services

Mary Roach Insurance Agency

Alliant gains one of the largest insurers of crops for the agribusiness community

Hub International

Lovsted-Worthington Insurance

The Washington state brokerage will have co-branded names with Hub, and CEO Carl Lovsted will join Hub Northwest

J.C. Flowers

AmeriLife

AmeriLife offers seniors-focused annuity, life and health insurance, and will reinvest some proceeds from the sale

Marsh

Sumitomo Life Insurance, American arm

The employee benefits brokerage has offices in five states and specializes in US subsidiaries of Japanese companies

Prime Risk Partners

Cook Maran & Associates

The merger will allow Cook Maran to gain liquidity as well as financial support for growth

Tokio Marine Holdings

HCC Insurance

In a $7.5 billion deal, Tokio Marine expands its US presence as the Japanese insurance industry stagnates

USI Insurance Services

KORE Group

USI will purchase the construction and surety business of the retail brokerage

Hanover enhances insurance program for private companies

Meadowbrook Insurance becomes Fosun’s first US acquisition

Six months after China-based Fosun International announced its intention to purchase Meadowbrook Insurance Group, the deal has become a reality. Archie McIntyre, the senior vice president of business development at Meadowbrook, confirmed the deal was going forward and is now subject to approval from regulators.

“We’re in the process of working through all the necessary things to complete the transaction,” McIntyre said.

“We’re very excited about our merger with Fosun, and very supportive of moving forward.”

Fosun agreed to buy Meadowbrook for about $433 million in December. The deal marks Fosun’s first US-based acquisition, and is expected to be completed during the coming months. It will expand the Chinese conglomerate’s core insurance business and opens the door to the US property/casualty market.

Meadowbrook will maintain its Southfield, Michigan, headquarters and will continue to operate under the Meadowbrook name.

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The Hanover Insurance Group has updated its Private Company Advantage coverage program to include seven customizable coverages for agents and clients, including directors & officers liability, employment practices liability, fiduciary liability, cyber security and privacy, crime, and kidnap and ransom. In addition to the specifically enhanced coverages, all coverage parts include general updates such as managementcontrolled entities covered as a ‘subsidiary,’ coverage territories expanded to anywhere in the world, and claims reporting as soon as practicable but no later than 90 days after the end of the policy period.

IronHealth introduces bundled payment coverage

A specialty healthcare unit of Ironshore is launching a program designed to protect healthcare providers from financial risks linked to bundled payment contracts. The news comes as the Centers for Medicare and Medicaid Services [CMS], as well as commercial payors and self-funded employers, are transitioning to bundled payment contracts.

“IronHealth has created a two-tiered product that leverages a first-dollar post-surgical complication cover via our BLISCare product with a Provider Excess of Loss limit into a single, seamless program that offers unparalleled financial risk protection for providers,” said IronHealth president Matt Dolan.

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30/06/2015 12:12:17 AM

PEOPLE

PEOPLE National Flood Services releases private flood product suite

National Flood Services has intro­ duced three new private flood insurance products. EZ Flood offers up to $750,000 in building and $200,000 in content coverage for single-family residential homes. Excess Flood provides up to $5 million of coverage beyond NFIP limits for residential and commercial properties. FloodWrap fills NFIP coverage gaps affecting basements and their contents, additional living expenses, golf cars and trailers, and septic system pumping. It provides higher limits for decks, loss avoidance coverage and optional excess building limits of up to $500,000 above NFIP limits.

CNA launches new product liability coverage for life sciences

CNA Insurance has introduced a new Life Sciences Products-Work Hazard policy, a rare product liability policy for companies operating in the life sciences sector. The policy, written in the admitted market, offers claims-made product liability coverage on a worldwide basis. With minimum premiums starting at $2,500, the CNA policy is available even to smaller risks. Limits of up to $10 million in the aggregate are available, and coverage can be expanded to include professional and technology liability on a combined, endorsed form. The product is currently available in 30 states and is pending in additional areas.

K&K unveils new program for RV dealers

Aon subsidiary K&K Insurance Group is expanding its franchised powersport dealership program to include recreational vehicle dealers. The comprehensive program also caters to motorcycles, personal watercraft, snowmobile and ATV dealerships.

Coverage options include property, general liability, inland marine, crime, garage liability, garage keepers’ coverage, employment practice liability (in some states), excess, and workers’ compensation, but exclude dealer physical damage. Limits of $1 million are available, with up to $25 million excess.

The program is available to agents without prior appointment or agreement, and is offered in 46 states.

NAME

LEAVING

JOINING

NEW POSITION

Marvin Altamirano

AmWINS Group

Worldwide Facilities

Property broker

Russell Brown

QBE North America

Aspen Insurance Holdings

Senior vice president and head of US distribution

Christopher Donelan

Endurance Re

Endurance Specialty Holdings

Chief underwriting officer and head of global casualty reinsurance

Steve Falecki

Fireman’s Fund Insurance Company

Victor O. Schinnerer & Company

Vice president and forest & logging practice leader

Marie-France Gelot

Marsh & McLennan

Lockton Companies

Senior vice president of insurance claims counsel

Jill Groshek

Travel Guard

Berkshire Hathaway Travel Protection

Vice president of underwriting

Jennifer Knox

American International Group

Swiss Re Corporate Solutions

Vice president and sales leader, North America West

Michael O’Connell

N/A

Willis North America

New York-based financial institutions industry leader

Karl Olson

Marsh LLC

Burns & Wilcox Brokerage

Vice president and professional liability and regional practice leader

Courtney Pino

N/A

EPIC Insurance Brokers and Consultants

Commercial insurance broker

Charlie Rozes

York Specialized Loss Adjusting

Jardine Lloyd Thompson Group

Group finance director

Garrick L. Smith

AIG UK

Guy Carpenter & Company

Managing director and US sales leader, excess & surplus lines specialty practice

Francie Starnes

Aon Risk Services

Worldwide Broker Network

President and COO

Ian Story

N/A

Arthur J. Gallagher & Co.

CFO, international division

Steven S. Zeitman

N/A

W.R. Berkley Corp.

President of Admiral Insurance

Mazman tapped for new real estate practice group

Ironshore has named Edward Mazman to lead its newly established real estate industry practice group. Based in Boston, Mazman will assume the role in addition to his current responsibilities as executive vice president of the Ironshore US property unit.

The global real estate property practice group will offer a broad range of specialty insurance programs for office buildings, shopping malls, hospitality facilities, educational institutions and residential housing complexes.

NAS Insurance expands cyber team

Four new executives have joined Encino, California-based NAS Insurance as the underwriting manager expands its operations in cyber liability and technology E&O. Jared Hopkins will join NAS as assistant vice president for the Southeast region in Atlanta, Michael Karbassi will hold the same role for the Northeast region in Boston, and Claude Ronnel will be vice president for the Midwest region in Chicago. Rounding out the team is Genevieve Alexander, who joins NAS as vice president for the Western region. She will be based in Los Angeles.

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UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS Nautilus enhances cyber coverage Nautilus has introduced a new endorsement to its cyber coverage designed to fill in the cracks that may appear in a standard general liability policy. The endorsement has been framed around helping policyholders combat the stress of data breaches by offsetting costs associated with a cyber attack. Services provided include notification assistance, cyber investigation and crisis management expenses, as well as regulatory proceeding expenses. Nautilus offers this coverage as a $25,000 sublimit within its general liability policy for a flat, low minimum premium on more than 1,100 ISO classes, based on certain eligibility guidelines.

Chinese hackers access ‘deeply personal’ info Hackers with links to China accessed information on mental illnesses, drug and alcohol use, past arrests, bankruptcies and other sensitive material of nearly anyone who has applied for or received security clearance from the government in the last three decades. More than 4 million people had been investigated for a security clearance as of October 2014, according to government records, and officials believe nearly everyone had their data exposed in the breach. The White House is currently putting the number of compromised records at between 9 million and 14 million, going back to the 1980s.

Ransomware on the rise, warns McAfee Cybersecurity firm McAfee says that incidents of ransomware are on the rise.

The threat involves malicious software that infects a device and locks the user

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out until they pay a ransom to release it.

In the first quarter of 2015, new Adobe Flash malware samples increased by 317%. Researchers attribute the rise to several factors: the popularity of Adobe Flash as a technology, user delay in applying available Adobe Flash patches, new methods to exploit product vulnerabilities and a steep increase in the number of mobile devices that can play Adobe Flash files.

Study highlights industrychanging technology

A new study has concluded that software as a service [SaaS] will transform the global insurance industry over the next five years. The report

by Ovum reveals that a third of global insurance companies are using or trialing SaaS solutions, although they remain cautious on risk, regulatory and compliance grounds. Among the reasons for implementing SaaS are cost reduction and flexibility; rolling out software across a growing business can be less expensive when using cloud based solutions rather than in-house systems.

New technology discussed at hurricane conference

One new item introduced at the sixth annual Hurricane Conference in Greenville, N.C., shows promise in mitigating flood damage claims. Dr. Rick Knabb with the National Hurricane Center in Miami spoke about a new storm surge predictor that will help emergency managers warn residents about flooding potential. “With the development of that new product,” Dr. Knabb said, “that gives us an idea on when the coastal storm surge might occur, which will allow us to make good operational decisions about evacuations and things like that.”

Allstate looks to sell driver data Privacy concerns soar as a major insurer considers selling telematics data Privacy concerns over the use of telematics by insurance companies were heightened last week as one of the nation’s leading auto carriers said it was considering selling consumer driving data.

According to statements made Thursday by Allstate Chairman and CEO Tom Wilson, the property/casualty insurer hopes to profit from the sale of telematics data and then pass on savings to consumers by lowering premiums.

Wilson likened the possibility of selling data to the way Google sells personal information on those who use its search engine.

“There are lots of people who are monetizing data today,” Wilson said during a New York conference. “You get on Google, and it seems like it’s free. It’s not free. You’re giving them information – they sell your information.

Could we, should we sell this information we get from people driving around to various people and capture some additional profit source and perhaps give a better value proposition to our customers? It’s a long-term game.”

The possibility of insurers selling driving information is one of the reasons roughly half of the driving population views telematics negatively, according to a 2014 Deloitte. In fact, its analysis revealed that 47% of respondents were completely uninterested in a usage-based insurance program, regardless of any discount that may ensue.

Analyst John Lucker anticipates concerns over privacy will bifurcate the auto insurance market in the near-term – some carriers will

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adopt telematics, while others will stick to traditional underwriting factors for those concerned with privacy.

Wilson, however, does not anticipate significant resistance from policyholders. In fact, he believes potential savings will outweigh any other concerns.

“We’re not seeing any huge consumer

“There are lots of people who are monetizing data today” pushback,” he said. “You’ll see a rapid uptake when the pricing technology is right.”

When that time comes, Deloitte recommends that insurance companies help assuage privacy concerns with “disclosure of cybersecurity measures and providing proactive communication and education.”

Allstate recently announced a 48% drop in its auto insurance income during the first quarter of 2015. Like Geico and other insurers, Allstate plans to mitigate the fallout by raising auto insurance premiums. Wilson said the company plans to expedite planned auto insurance price increases thanks to the increase in non-weather related auto losses. Already, Allstate rate increases in April exceeded those for the entire first quarter.

A SNAPSHOT OF TELEMATICS ACCEPTANCE • Percentage of drivers willing to allow insurers to track motorist behavior with a mobile device: Yes No Depends on the discount

26% 47% 27%

• Size of discount needed before agreeing to a telematics program: 35% 30% 25% 20% 10% 5% 0%

1-5%

6-10%

11-15%

16-20%

20%+

Discount Source: Deloitte Center for Financial Services

Q&A

John Lucker

The monetization of telematics data

Principal DELOITTE CONSULTING LLP

Fast facts Lucker is the coinventor of three predictive modeling patents and has two other predictive modeling patents pending

Do you think the sale of telematics data will dampen public enthusiasm for embracing this technology?

A lot of the surveys show that the public doesn’t necessarily care, as long as a couple of things happen. Number one is that their privacy is maintained, and also that the consumer believes that they’re getting value for what they’re giving up. When things become lopsided from a value perspective, that’s when I think things really get sticky.

There are things that I think can be done with telematics data … that would actually be very positive for consumers and would provide certain aggregators of telematics data with a real value proposition.

One of the things that I’m intrigued by is at what point in time will consumers generate enough telematics data, through various mechanisms, that they can actually purchase or generate a ‘driving résumé,’ for lack of a better term, that they can then use to market themselves to insurers. It’s almost like a reverse auction: ‘Here’s my driving résumé … it portrays me as a responsible and safe driver.

And I’m looking to buy insurance. Who wants to sell it to me?’ It’s conceptually very similar to someone who has a great credit score.

How can telematics data potentially be useful for insurance brokers, specifically those with clients in the commercial vehicle space?

I think monitoring the behavior of fleets and the movement of fleets could be a very valuable thing for an insurance company. From the broker perspective, I think if a broker could arrange the relationship with the fleet owner to install telematics capabilities in their vehicles, the broker could actually facilitate that driving résumé. That could be very valuable for that broker to be able to get great product and service and price to the fleet owner, and that fleet owner could potentially have that résumé as well.

What else should brokers be aware of in terms of telematics?

From my perspective, there’s been far too much focus in the insurance arena on telematics as a way to more granularly price. I personally think this is a foolish approach for a lot of insurers to take because the rating of auto insurance today uses a lot of variables that are essentially proxies for behavior. What happens as a result of [telematics] is you tend to narrow the price bands to be more precise and that price band, while it becomes more accurate, also narrows the range … [so] rather than having a broad price range available to a consumer and then consumers make choices based on that, there’s a much narrower price range, and it becomes a much more commoditized product. Consumers have less of an ability to differentiate between company A and company B. What I think is the best way to think about the value of telematics, is how can you actually use telematics to help decommoditize the product? How can you build features into your auto insurance product to get a consumer to see that telematics is more valuable to them?

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UPFRONT

WORKERS’ COMP UPDATE

Major workers’ comp provider retreats Liberty Mutual is drawing away from the sector, a move that could increase premiums for everyone

of its comp claims, as well as asbestos and environmental liability.

In place of its comp interests, Liberty Mutual says it is focusing on growing more profitable areas of business, such as safety consulting or comp claims management for companies that self-insure.

“They’ve taken pretty aggressive action to de-emphasize workers’ compensation,”

“They’ve taken pretty aggressive action to de-emphasize workers’ compensation”

Liberty Mutual’s measurable distancing from the workers’ comp market has analysts worried about a disruption in carrier appetite and rising premiums nationwide.

According to information from the National Association of Insurance Commissioners, the Boston-based insurer has slipped from the largest comp carrier in 2012 to number four in the nation. Annual premiums for the line fell by more than a third in the past three years.

NEWS BRIEFS

Officials told reporters the company still plans to remain a significant force in the marketplace, but is “targeting underperforming accounts that were contributing unacceptable results.” Those underperforming accounts include workers’ compensation business unit Summit Holdings Southeast, as well as workers’ comp interests in Argentina.

Liberty Mutual also paid a Berkshire Hathaway company $3 billion last year to take over some

Baltimore police, city workers to receive $1.7 million

The recent protests in Baltimore following the shooting of Freddie Gray have resulted in 169 police officers and city employees filing workers’ compensation claims, and the city expects the payout to total $1.7 million.

The costs will initially be drawn from a rainy day fund, but the city will apply for 75% reimbursement from the Federal Emergency Management Agency. More than 380 businesses also have sustained damages; city officials report 61 buildings as burned beyond repair.

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Michael Lagomarsino, an assistant vice president with ratings company AM Best, told the Boston Globe.

Industry officials wonder what Liberty Mutual’s retreat will mean for the marketplace.

Ishita Sengupta, director of workers’ compensation at the National Academy of Social Insurance think tank, told the Globe premiums could rise as employers are left with fewer options for workers’ comp policies. That, in turn, could persuade business owners to provide even fewer comp benefits to workers.

Trends such as rising medical costs and accountable care organizations have persuaded more companies to scale back their comp exposure. Humana made headlines in March when it announced it was selling Concentra, its occupational health and physical therapy unit, to M.J. Acquisition Corp. for $1.06 billion.

Mistake inflating workers’ comp claims costs by 51%

According to a recent study from the National Council on Compensation Insurance, delayed injury reporting can increase eventual comp claim costs by up to 51%. Median costs for occupational injury claims reported within two weeks were the lowest – at $13,120 – and were higher for all claims brought two weeks or later. NCCI researchers also discovered that attorneys were involved in 31.7% of claims made four weeks or more after the initial injury, as compared to just 12.8% of claims made the day of the accident.

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Q&A

Evelina Radeva

Michigan as a model for low workers’ comp costs

Policy analyst WORKERS COMPENSATION RESEARCH INSTITUTE

Fast fact The WCRI is an independent, nonprofit research organization founded in 1983 that provides high-quality, objective information about public policy issues related to workers’ compensation systems

What was the purpose of the WCRI’s latest study, “CompScope Benchmarks for Michigan”?

This report is part of our annual Benchmarking studies, which monitor the performance of state workers’ compensation systems in 17 states, focusing on indemnity benefits, overall medical payments, duration of temporary disability, litigiousness, benefit delivery expenses, timeliness of payment, and other metrics. It examines how these system performance metrics have changed over time.

A key finding of the study was that Michigan had lower workers’ compensation costs – the average claim size has fallen over a three-year period. Why do you think that is?

In our report, we analyzed both less and more mature claims. In other words, we use more mature claims – claims with 36 months of maturity – to show interstate comparisons and some longer-term trends. More mature claims typically reflect most of the ultimate payments made to injured workers than claims with less maturity.

On the other hand, we report on less mature claims to show most recent and emerging trends. We also focus on claims with more than seven days of lost time, as most of the total dollars are in this category of claims.

Total costs per claim with more than seven days of lost time in Michigan decreased moderately (4%) between 2008 and 2011 (based on claims with 36 months of maturity). This likely reflects the impact from the economic recession, when wages of injured workers

The top four business sectors with aging workers

According to data from the Census Bureau’s LEHD program, nearly a quarter of employees in the utilities, manufacturing, public administration and educational services industries are 55 or older. “The data is pretty clear that people who are over 65 tend to have more injuries and illnesses, and when they do get sick, they tend to stay out longer than younger people,” said Dr. Steven Weisbart of the Insurance Infromation Institute.

“This would cause workers’ comp claims to rise.”

in Michigan decreased, the average size of lump-sum settlements (known as redemptions in Michigan) decreased, as well as the percentage of claims with settlements.

Based on less mature claims, from 2012 to 2013, total costs per claim in Michigan grew 8%, which was a change compared with the prior years, when costs per claim were stable or decreasing.

One contributing factor to lower-than-typical indemnity benefits per claim with more than seven days of lost time in Michigan was the shorter duration of temporary disability. Medical payments per claim with more than seven days of lost time were lower than typical, likely related to price regulations.

What can other states learn from Michigan’s example?

Michigan workers’ compensation system is relatively stable, with no major policy debates or reforms. The last major changes in the system occurred in 2011, when the legislation codified important decisions of the Michigan Supreme Court. In addition, according to the Compensation Advisory Organization of Michigan, the average premium paid by employers in Michigan has decreased since 2010.

Based on our report over a five-year period, many cost components, such as indemnity benefits, medical payments, benefit delivery expenses, defines attorney payments, and medical and legal expenses per claim grew slower in Michigan than most of the study states.

Study finds nurses significantly reduce comp costs

A study conducted by Liberty Mutual Insurance and its wholly owned third-party administrator, Helmsman Management Services, analyzed 42,000 workers’ compensation cases and found that the costs of claims was substantially higher when nurses were not involved in rehabilitation efforts. When controlling for type and severity of injury, the researchers discovered that cases that featured nurses tending to claimants resulted in 18% lower future medical costs, 26% lower overall claim costs and a 15% faster claim resolution.

California workers’ comp premiums jump 11%

California’s workers’ comp volume soared by almost 11% in 2014, reaching a total exceeding $11.4 billion. As a result, 2014 marked the third consecutive year that the tally rose by over $1 billion.

Last year’s total was $4.5 billion more than the industry’s 10-year low in 2009, but is still less than the state’s record high of $16.1 billion. The premium total also increased, which the California Workers’ Compensation Institute attributes to growth in premium rates and covered payroll, as well as a rebounding economy.

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PEOPLE

INDUSTRY ICON

DEMANDING THE BEST How can the insurance industry make itself more attractive as a career?

First-class education, says Alan Jay Kaufman, the chairman, president and CEO of H.W. Kaufman Financial Group FORMER SOUTH African president Nelson Mandela once said, “Education is the most powerful weapon which you can use to change the world.” Alan Jay Kaufman certainly believes it can change the insurance industry.

A highly accomplished and educated industry leader, Kaufman traces his passion for education back to his own days as a student. He holds a BA from Michigan State University in finance, insurance and accounting, and a JD from the University of Notre Dame Law School. Additionally, he’s studied international law in England at the London School of Economics, has been active with the American Bar Association, and has lectured and written a number of articles. “[Education] helped my career immensely because it built up my credentials and knowledge and credibility,” he says.

Once a founding senior partner of the Michigan law firm Kaufman, Payton & Chapa, Kaufman took the opportunity to enter the insurance industry in 1996, acquiring the H.W. Kaufman Financial Group, which was founded by his late father founded in 1969. The Group’s largest subsidiary is Burns & Wilcox, the largest independent wholesale broker in the US. Arriving from the legal arena, Kaufman bought with him a belief that continues to drive his efforts to improve education in insurance. “I recognized in law … that you have to have the best lawyers. Otherwise, you can’t be competitive. You can’t hire

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average; you can’t hire just good. You have to hire the best.”

Discussing hiring practices in insurance, Kaufman opines that there’s much work to do. “The insurance companies have perpetuated average in many cases, as opposed to hiring the best.”

He says there’s been too great a focus on numbers hired rather than the quality of hires. “We have to have more companies with higher expectations and hiring better people, and paying for those people. The

insurance professionals via training and education programs.

“We established the Kaufman Institute, our corporate university, to not only train people coming into our company who were fairly recent graduates, but also … lateral hires … [with] a lack of education in insurance,” he says. “What we’re doing is offering classes and a curriculum to build up their knowledge and expertise so they can become more competitive, more knowledgeable and, most importantly, do the best

“What we’re doing is offering classes and a curriculum to build up employees’ knowledge and expertise so they can become more competitive, more knowledgeable and, most importantly, do the best job … for our clients” compensation is not going to, in itself, make the difference. You need compensation [and] the top people, with expectations that they are dedicated and [will] work hard.”

Educating the industry When it comes to endeavors to attract the best to the industry by improving education, no one could accuse Kaufman of not walking the walk. In 2007, he founded the Kaufman Institute, which offers professional development opportunities to

job … for our clients.”

Kaufman says his insurance vacancies are now easier to fill, which he attributes to spreading word of the Institute’s offerings.

“It’s a lot easier for us to hire today than it was five or six years ago. We have a lot more people who are … applying because of the reputation that we have, and they want to enter our Kaufman Emerging Leaders Program [KELP]. They want to join us so they can have the opportunity to get into our … Kaufman Advanced Management

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PROFILE Name: Alan Jay Kaufman Company: H.W. Kaufman Financial Group Title: Chairman, president and CEO Years in the industry: 19 Fast fact: In 2001, Kaufman established the Herbert W. Kaufman Memorial Scholarship, which provides annual grants to exceptional college students who pursue insurance careers

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PEOPLE

INDUSTRY ICON Program [KAMP]. These programs and the other educational opportunities we have are a major attraction for people, knowing that we’re educating people to be true professionals in insurance. Our curriculum, I think, is unmatched, and it’s been a major reason for our success story.”

Aside from increasing interest in its education programs, Kaufman notes other indicators of the Kaufman Institute’s success. “A disproportionate number of people have come up through the ranks who have been educated with the Kaufman Institute and KELP and KAMP. These young professionals have been very successful in our company.”

university level, which very few in the US are offering,” he says. “Why should someone think about insurance if [a] school doesn’t even have an insurance class?”

Kaufman doesn’t want to see insurance coursework offered at just any college, though. “You want leading, major universities and their colleges to offer insurance-related programs, or even a whole insurance degree,” he says. “But just as a starting point, to have a professor teaching insurance would go a long way to people recognizing that [there is] career potential with insurance. Without that exposure in school, they’re going to pursue other careers.”

“You want to be on the team that has the best players, not the team that has average players.

If you have a team with excellent players, people will be attracted and you’ll be able to recruit them” Of course, the benefits of that education have spread much wider than the Kaufman Group. “Many of our competitors have sought these individuals out because our reputation is such that everybody wants our trained and educated people,” Kaufman says.

Industry impact Kaufman would like to see the industry as a whole place a stronger emphasis on education, which he believes is a starting point to changing recent graduates’ perceptions about insurance as a potential career.

“You want to be on the team that has the best players, not the team that has average players,” he explains. “If you have a team with excellent players, people will be attracted and you’ll be able to recruit them.”

He also thinks it’s time the industry increased its financial support of insurance-specific education. “They have to support some universities that have the capability to offer insurance classes at a

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Kaufman also emphasizes the need for rich course content. “It has to be focused on specific areas of insurance. It can’t just be one general class, and that’s it. There has to be a bit of meat on the bone.”

Once again, Kaufman is leading by example. “Since I’m a graduate of Michigan State University, I recently endowed a professorship in insurance and risk management, and hopefully that will set an example for others to follow, whether it be Michigan State or other universities of that high caliber, to encourage universities to offer insurance programs.”

Securing the professorship meant Kaufman donated more than $1 million to the university, but he feels the investment was well worth it if it inspires other industry leaders to invest in insurance education. “We do need universities to prioritize insurance as a degree track that students are attracted to,” he says. “It is a great career.”

H.W. KAUFMAN FINANCIAL GROUP AT A GLANCE

IN THE BEGINNING The company was founded by Alan Jay Kaufman’s father, Herbert W. Kaufman, in 1969

GLOBAL NETWORK H.W. Kaufman Financial Group has nearly 1,600 employees working in more than 50 offices throughout the US, Canada and England

SIZE AND SCALE The company has 15 subsidiaries, including Burns & Wilcox, North America’s largest independently owned specialty insurance wholesaler, which writes more than $1 billion in annual premium

EDUCATION The Kaufman Institute has offered more than 15,000 courses

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THE HANOVER… Committed to Independent Agents since 1852 Listening. Solving. Executing.

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FEATURES

COVER STORY: PRODUCERS ON CARRIERS

ties i r o i r pp ers i o t r r r i a e c th do w w o o n h k ut rs e b , c r u e i d arr Pro c a g p? n i u t e c r e l u se meas when

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THE RELATIONSHIP between producers and carriers has always been important, but it’s more vital than ever with the advent of technology and constantly shifting consumer expectations.

Producers know exactly what they’re looking for in a carrier. For our annual Producers on Carriers survey, Insurance Business America asked hundreds of independent agents and brokers to rank the importance of nine aspects of carrier performance, including: • Competitive rates • Claims processing • Carrier reputation and financial stability • Commitment to the broker distribution channel • Range of products offered • Quick quotes • Underwriting expertise • Technology and automation capabilities • Marketing support We asked producers to rate each category’s importance to them on a scale of 1-9, with 1 being unimportant and 9 being vital. We also asked survey respondents to rate their carriers’ performance in each of those categories on a 1-9 scale, with 1 being poor and 9 being superb.

The good news is that most carriers are doing fairly well in most areas. The bad news is that, according to producers, “fairly well” is about as good a rating as they can give for some of the areas they considered most important. In the area of competitive rates – which producers rated as the most vital – survey respondents gave carriers their lowest rating. Producers also seem to feel carriers are underperforming when it comes to marketing support and technology and automation.

COMPETITIVE RATES

Producer priority: 1st Carrier performance: 9th Let’s get the worst news out of the way first: Producers wholeheartedly agreed that competitive rates were the most vital aspect of carrier performance, rating it an average 8.25 out of a possible 9. More than half of producers surveyed ranked competitive rates at a full 9, and a further 40.74% rated it at a 7 or 8. None of the survey respondents ranked competitive rates at a 1 or a 2.

And yet, carriers fared worse in this category than any other. Producers ranked carrier performance at an average of just 6.65 out of a possible 9. While technically not a bad score, it’s still perilously close to mediocre. And carriers

WHAT ASPECT OF CARRIER PERFORMANCE MATTERS MOST TO PRODUCERS? We asked producers to rate aspects of carrier performance on a scale of 1-9, with 1 being not at all important and 9 being extremely important

8.25 8.24 8.22 7.94 7.91 7.76 7.74 7.72 7.13

Competitive rates Claims processing Carrier reputation and financial stability Commitment to the broker distribution channel Range of products offered Quickquotes Underwritingexpertise Technology and automation capabilities Marketing support 0

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COMPETITIVE RATES How much of a priority is it to producers?

8.25 6.65

Average carrier rating 0

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Producers speak out “Insurance scoring has created inflated rates for some clients. It’s my personal opinion that the merits of the insured should impact the rate, not their credit score” “Multivariant rating makes it difficult to know where they’re competitive. Even they don’t know for sure” received fewer 9 rankings for their competitive rates than in any other category. What’s more, 14.82% of respondents rated their carriers at a 1, 2 or 3.

Producers weren’t shy about voicing their dissatisfaction with their carriers’ rates. “Quit with the huge rate increases year to year,” wrote one respondent. “Show some stability.”

“Rate increases have priced [my carrier] out of competitiveness,” another said. “I no longer send new business quotes to them.”

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FEATURES

COVER STORY: PRODUCERS ON CARRIERS CLAIMS PROCESSING

respondents gave their carriers 8 or 9 ratings in the category, and none gave their carriers a 1 or 2.

Producer priority: 2nd Carrier performance: 2nd Claims processing was almost as important to producers as competitive rates, scoring an average 8.24 out of 9. In fact, 64% of respondents rated claims processing at a 9 – more than any other category. The good news is that carriers fared much better here, scoring an average 7.59 out of 9. In fact, nearly 63% of survey respondents scored their carriers at an 8 or a 9 when it came to claims processing, and none scored their carriers at a 1.

That’s not to say all producers were satisfied, however. “Wake up the claims department!” wrote one.

“Their internal systems are either very poor or their employees are incompetent,” complained another. “The third option is that failing to pay commissions and customer claims is a company policy to increase their bottom line. They need to fix their problems in this area! They are the only option on the federal exchange in our market area for the most popular hospital, so we’re forced to use them.”

CLAIMS PROCESSING How much of a priority is it to producers?

8.24 7.59

Average carrier rating 0

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Producers speak out “Very slow to close claims” CARRIER REPUTATION AND FINANCIAL STABILITY

Producer priority: 3rd Carrier performance: 1st While it came in third in terms of importance, carrier reputation was still a big deal to producers. Survey respondents rated its importance at an average 8.22 out of 9.

So it’s a good thing carriers did exceptionally well in that area. Producers rated their carriers at an average 7.94 out of 9 in the category. Almost 76% of survey

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CARRIER REPUTATION AND FINANCIAL STABILITY How much of a priority is it to producers?

8.22 7.94

Average carrier rating 0

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COMMITMENT TO THE BROKER DISTRIBUTION CHANNEL

Producer priority: 4th Carrier performance: 6th Producers felt it was very important that carriers were committed to the broker distribution channel. Survey respondents rated the importance of that commitment at an average 7.94 out of 9. In fact, nearly 55% of producers surveyed rated its importance at a full 9, and a further 18.87% rated it at an 8. Only one respondent felt it wasn’t important at all.

Carriers performance was a bit uneven in this category. Producers gave carriers a decent average score of 6.98 out of 9, and indeed, early 60% of respondents rated their carriers at an 8 or 9 when it came to their commitment to brokers. However, a fair number – nearly 15% – rated their carriers between 1 and 4, showing that many brokers still don’t feel their carriers are truly committed to them.

Producer comments bear that out. “Be more committed to the independent agent,” wrote one survey respondent. “Stop reducing CM and profit-sharing, and assist agents in recruiting and training.”

“Get to know the agents you are placing business for,” wrote another.

COMMITMENT TO THE BROKER DISTRIBUTION CHANNEL How much of a priority is it to producers?

7.94 6.98

Average carrier rating 0

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IBAM3.0

IBA is seeking agents and brokers who are reaching great levels of success in the insurance industry. Nominees must be aged 35 or under.

Deadline is on July 24, 2015

Young GUNS 2015

To nominate, go to ibamag.com or email Ryan Smith at ryan.smith@keymedia.com.

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FEATURES

COVER STORY: PRODUCERS ON CARRIERS RANGE OF PRODUCTS OFFERED

QUICK QUOTES

Producer priority: 5th Carrier performance: 3rd

Producer priority: 6th Carrier performance: 5th

Producers definitely wanted their carriers to offer a wide range of products, rating the category at 7.91 out of 9. A whopping 71% of survey respondents rated the importance of product range at an 8 or 9, while none rated it at a 1, 2 or 3.

So how did carriers fare? Relatively well, actually.

Producers rated their carriers’ performance at an average of 7.40 out of 9. More than 81% of respondents rated their carriers at a 7, 8 or 9, and none gave their carrier a 1 rating.

Getting quick quotes wasn’t as important to producers as things like competitive rates and claims processing, but they still felt it was important, rating it at an average 7.76 out of 9. About 54% of producers surveyed rated the importance of getting quick quotes at an 8 or a 9, and none rated it below a 5.

Carriers performed fairly well when it came to getting quotes back quickly, scoring an average 7.06 out of 9.

About half the producers surveyed rated their carriers’ performance at an 8 or a 9. However, about 11% rated their carriers somewhere between 1 and 4, meaning there’s still room for improvement.

Some producers even had horror stories about the length of time it took to get quotes back. “[My carrier is] terrible at getting quotes back in a timely manner,” wrote one. “I’m still waiting on a dental quote that was requested on May 1.” Many others agreed that their carriers needed to “return quotes faster.”

RANGE OF PRODUCTS OFFERED How much of a priority is it to producers?

7.91 7.40

Average carrier rating 0

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Producers speak out “They offer little professional liability coverage – especially dentists’ professional liability”

HOW ARE CARRIERS PERFORMING? We asked producers to rate their carriers’ performance on a scale of 1-9 in the following areas, with 1 being poor and 9 being excellent Carrier reputation and financial stability

7.94 7.59 7.40 7.37 7.06 6.98 6.87 6.80 6.65

Claims processing Range of products offered Underwriting expertise Quick quotes Commitment tothebroker distributionchannel Marketingsupport Technology and automation capabilities Competitive rates 0

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“My carrier is terrible at getting quotes back in a timely manner. I’m still waiting on a dental quote that was requested on May 1” QUICK QUOTES How much of a priority is it to producers?

7.76 7.06

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“If you can’t do it on the system yourself, it isn’t quick”

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26/06/2015 11:29:01 PM

UNDERWRITING EXPERTISE

TECHNOLOGY AND AUTOMATION CAPABILITIES

Producer priority: 7th Carrier performance: 4th

Producer priority: 8th Carrier performance: 8th

Producers were only slightly less concerned about underwriting performance than they were about quick quotes.

Survey respondents scored the importance of underwriting expertise at an average 7.74 out of 9. More than 72% scored it at an 8 or 9, and only one respondent didn’t feel it was important at all.

Carriers seem to be performing well overall when it comes to underwriting. Producers rated their performance at an average 7.37 out of 9. Nearly 76% of producers surveyed felt their carriers’ performance was good or excellent, and only one survey respondent rated his carrier at a 1 in underwriting.

Although producers were satisfied with underwriting expertise overall, there were a few respondents who felt their carriers definitely needed improvement. “Let the underwriters do their job, instead of a computer that you cannot reason with,” one wrote.

“Empower the broker to place coverage with the carrier by setting reasonable and practical underwriting guidelines,” another suggested.

UNDERWRITING EXPERTISE How much of a priority is it to producers?

7.74 7.37

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Producers speak out “Too much change-over. Agents are constantly training new underwriters, and then they’re transferred”

“Empower the broker to place coverage with the carrier by setting reasonable and practical underwriting guidelines”

Producers weren’t as concerned about technology as they were about other categories, but they still felt it was important, rating technology and automation at 7.72 out of 9. Nearly 63% of producers surveyed said top-notch technology and automation were either very important or absolutely vital – and none rated it at a 1, 2 or 3.

Unfortunately, several producers said that carriers could use some improvement in this area. Survey respondents rated their carriers’ performance in the category at just 6.80 out of 9 – the second-lowest score carriers received. Only 27.78% of producers surveyed rated their carriers’ performance as excellent, and more than 22% felt their carriers’ performance was either fair or outright poor.

“Get a system that works and is efficient,” one respondent wrote. Another demanded “better and easier-to-use technology that does more.”

Nearly 63% of producers surveyed said topnotch technology and automation were either very important or absolutely vital TECHNOLOGY AND AUTOMATION CAPABILITIES How much of a priority is it to producers?

7.72 6.80

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Producers speak out “While my carrier’s systems have come a long way, they continue to struggle with reliable technology”

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26/06/2015 11:29:08 PM

FEATURES

COVER STORY: PRODUCERS ON CARRIERS MARKETING SUPPORT

OTHER CONCERNS

Producer priority: 9th Carrier performance: 7th While producers felt marketing support was important – more than 22% of them rated it as vital – it wasn’t as much of a priority as other areas. Producers rated its importance at 7.13 out of 9 – still important, but not as much as, say, competitive rates. While no one rated it as completely unimportant, about 7.4% put its importance between 2 and 4.

Even though producers felt marketing support was the least of their concerns, carriers’ performance still wasn’t living up to their expectations. Producers rated their carriers’ marketing support at 6.87 out of 9. While none gave their carriers the lowest rating in the category, nearly 10% rated their carriers at a 2 or 3.

Even though producers felt marketing support was the least of their concerns, carriers’ performance still wasn’t living up to their expectations 7.13 6.87

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Producers speak out “Most field reps are only checking off a box on their résumé.

Others have no technical expertise – they only know how to sell life insurance”

You know what producers think of carriers overall. But which carriers earned the highest marks from their producer partners? Look for the answer in the next issue of Insurance Business America, where we’ll honor five-star carriers!

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> “[Carriers] need to take into account the business available in the area. Rural agencies are not likely to be as large as urban ones, especially when they keep appointing new agents” > “Commitment to support the independent agency system and to pay and treat agents fairly and with high regard” > “[My carrier] is very much lacking in the area of service. The reps are more interested in taking your tax ID information than hearing the issue. Most often we as brokers are educating the service reps on policy and performance” > “Billing across the board is horrible for clients” > “Premium increase at renewal is not a good idea. Long-term clients without claims should get some … reduction of premium” > “Terrible compensation package for the captive agent force” > “Expand product offerings, improve technology and eliminate insurance scoring on personal lines” > “Bigger commissions, more profit-sharing and reduce the backand-forth during underwriting. Ask everything at once – stop the ‘piecemealing’”

MARKETING SUPPORT How much of a priority is it to producers?

We asked producers if they had other concerns they wanted to share with their carriers – and they did, about everything from the service they received to billing issues. Perhaps most disturbingly, a few also complained of late or missing commission payments. Here’s what some had to say:

> “Address the service issues. Just because you changed the name of your service center to ‘agent center of excellence’ does not mean it’s a quality service station” > “Control your expense ratio. Have leadership that knows the business and cares about each of their markets” > “Remove ‘non-insurance minds’ from executive positions and replace them with people who know the industry, and not just those looking at bottom-line numbers” > “Timely and accurate payment of monthly commissions is very important” > “Actually pay commissions earned”

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26/06/2015 11:29:17 PM

Your favorite insurance magazine

is now available on your iPad Download today at the app store!

How do you want your news? We have you covered: ibamag.com – desktop & mobile, daily e-newsletters, monthly magazine, and now tablet.

The #1 source for the commercial insurance industry 22-29_Producers on Carriers2.indd 29

26/06/2015 11:29:24 PM

FEATURES

HOSPITALITY

ROOM WITH A VIEW The recovering economy has more Americans hitting the road for vacations – and more hotels beefing up their insurance coverage THE HOSPITALITY industry has long held a revered place in our culture’s collective consciousness, and children’s stories like Eloise at the Plaza and Hollywood hits ranging from Lost in Translation and The Grand Budapest Hotel continue to feed our national fixation with the timeless romance of the hotel.

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However, that fixation faltered during the bleakest years of the recession, when business travelers and tourists alike stayed home, causing occupancy and average daily rates in the lodging sector to plunge in markets across the country.

As a result, hotel owners scrambled to cut

costs – including on their insurance coverage.

As the economy has recovered, the lodging industry has bounced back, big time. With more disposable income, people are hitting the road, filling up the nation’s hotels, motels, B&Bs, lodges, retreats and resorts.

The American Hotel and Lodging Association reports that in 2013 (the most recent year comprehensive figures were available), the lodging industry generated a whopping $163 billion in revenue – an increase of 5.4% from the previous year. Industry experts predict this upward trend will continue for years to come,

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“The thing about hotels is that if they are not constantly reinvesting in their properties, they go downhill in quality, which leads to more claims” Eric Arthur, Fulcrum Insurance Programs program manager specializing in hotels and resorts, real estate, habitational, and casino business. “That is a massive amount of premium for insurance companies and program managers like us to target.”

From Motel 6 to the Ritz-Carlton

with strong growth – particularly in international travel to the US – expected to continue at least until 2018.

All of those visitors have to stay somewhere.

The busier they become, the more threats lodging establishments face to their financial well-being and reputation – from a security breach to a patron’s slip and fall – stoking fresh appetite for insurance in the sector.

“It’s a competitive marketplace – there’s over 50,000 hotels out there,” says Eric Arthur, executive vice president of Fulcrum Insurance Programs, a Seattle-based specialty

The hotel/motel sector is a very complicated area, which has led to a great deal of specialization in the insurance industry that serves it.

Today’s lodging establishments run the gamut, from roadside motels catering to the thrifty traveler looking for nothing more than a cheap place to stay the night, to full-service hotels and motels with swimming pools, fitness centers and breakfast buffets, to luxury hotels and destination resorts that essentially have many different businesses (and risks) operating under one roof – golf courses, tennis courts, spas, retail shops, restaurants, even activities like snorkeling or swimming with dolphins.

“The majority of insurers may have a program for each of those but are likely not to focus on all of them; they might have a particular expertise on just resorts, just full-service or just budget motels,” says Ron Abram, principal of Abram Interstate, a multistate MGA in California writing commercial and personal property and casualty coverages throughout the western US. “There are a variety of different kinds of appetite that an insurance company may have, and carriers are very particular about what they want to write or don’t want to write,” Abram says. His agency, for example, specializes in “higher transaction, lower

premium stuff. We write a lot of older motels and hotels and habitational exposures,” where there is less competition on the renewal side.

Loss exposures in the lodging sector vary widely, depending on the type of facility and its clientele. Even the smallest budget motel requires a whole laundry list of insurance products, including general liability, property, innkeeper liability, employment practices, workers’ compensation “and maybe some auto coverage if they have a shuttle or service vehicles,” Abram says.

Take that and extrapolate it to the RitzCarltons of the world, which have myriad

TOP INSURANCE PRODUCTS General liability Property Innkeeper liability Employment practices Employee dishonesty Food spoilage or contamination Auto Workers’ compensation Umbrella coverage

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FEATURES

HOSPITALITY

activities and functions taking place in each location around the globe, and it becomes a “very complicated type of exposure,” Abram says.

Even mid-sized, limited-service hotels “have many different facets and lots of different interesting elements to their policies,” Abram adds.

“And because of their complexity, they are way more interesting to work on than your blanket retail storefront business owner’s policy.”

No matter how many moving pieces a given property might have, the number-one loss exposure at hotels and resorts is something surprisingly simple.

“Fifty to 60% of all claims, in our experience,

have been slip-and-fall-related,” Arthur says. “It could be in the hotel room or going down the stairs; it could be in the parking lot. All over the place, people slip and fall, all the time.”

Industry statistics show that an additional 20% of all claims made against hotels are for loss of, or damage to, personal property of guests, and the average claim costs about $1,600 to settle.

Managing hospitality risk The basic premise of innkeeper’s liability reaches all the way back to the Middle Ages.

“Fearful that innkeepers were working in conjunction with highwaymen who rob

“Every day is different. The risks we look at are unique, and our people have to be prepared for the next new exposure. Our risks don’t fit into a square box” Rupert Hall, MJ Hall and Company FINDING NICHE MARKETS MJ Hall and Company, a wholesale broker and MGA, thrives in the hospitality/ lodging sector by seeking out risks that don’t fit into typical underwriting guidelines – from nudist colonies to ‘gentlemen’s clubs.’ Based in California, the family-owned insurance company also writes a good-sized book of business in Alaska, where it has been doing business since 1964.

“We focus on small-to-mid-market unique resorts that may be religious-based or outdoor/wildlife-based, such as Zen Buddhist retreats, hunting lodges, hot springs resorts or, in some cases, a nudist colony, that would be nonstandard for most underwriters,” says the company’s president, Rupert Hall.

Unique exposures Hall has encountered throughout his career run the gamut from water-borne infections (“We have had people scrape themselves in hot tubs who shouldn’t have stayed in the water”) to hunters shooting other hunters by accident to easement issues that sometimes erupt between neighbors at secluded resort properties.

As for the gentlemen’s clubs, “they are more prevalent than you would think,” Hall says. “Each community tends to have some element of one, whether it’s a large metro area or small rural town.”

Among such clients, assault and battery is a large concern. “Carriers entering that space with their eyes closed often lack a complete understanding of the unique exposures of that type of risk,” Hall says.

All in all, “it’s a dynamic, people-oriented business,” Hall adds. “Every day is different. The risks we look at are unique, and our people have to be prepared for the next new exposure. Our risks don’t fit into a square box.”

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travelers, the law imposed strict liability on the innkeeper when a guest’s property was stolen during his stay,” explained John E. Osborn, an attorney and hospitality law professor, in an article on the sector.

As legal precedent has evolved over the centuries, “this doctrine has survived and affects the rights of hotel guests relating to premises liability, property theft and personal injury,” Osborn wrote – ultimately holding hotels to much a higher standard than other large real estate owners.

Times have changed, as has the hospitality industry and the insurance sector that serves it, but the concept of innkeeper’s liability remains intact.

It’s quite the conundrum. An innkeeper is liable for losses to guests’ property – unless there are clearly mitigating circumstances such as an ‘act of God,’ civil unrest or the guest’s own negligence. And yet, hotel guests often travel with loads of cash and valuables.

Recognizing this potential burden on the hospitality industry, each state has enacted its own innkeeper statutes – laws that limit hotel and motel owners’ exposure in return for adhering to certain industry-specific security standards, such as providing a secure safe and putting suitable locks on doors and windows.

As business picks up in today’s thriving sector, mergers and acquisitions are becoming more and more common. “We are seeing hotels being purchased and sold more so than we have in the past year or two,” Arthur says.

This, in turn, leads to more innovations and upgrades of properties, which reduces claims over the long term.

“The thing about hotels is that if they are not constantly reinvesting in their properties, they go downhill in quality, which leads to more claims,” Arthur says. “Worn carpets and loose hand railings lead to more slip-andfalls, so we like to see properties reinvesting in themselves.”

The rise of social media also has profoundly changed how the insurance industry underwrites hospitality accounts.

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26/06/2015 3:44:02 AM

THE HOSPITALITY SECTOR

BY THE NUMBERS

5,287 Properties*

4,926,543 Guest rooms

$163 billion Revenue in 2013

$68.84

Revenue per available room

62.2%

Average occupancy rate *Based on properties with 15 or more rooms Source: American Hotel and Lodging Association

“When we are considering insuring a hotel, we will go to TripAdvisor and read what the guests have been saying about the hotel,” Arthur says. “You can learn quite a bit about what’s happening – what condition the rooms are in, what the service is like, how the food is – to indicate what kind of management is on site.”

Another new underwriting trend in the hotel/motel sector is rewarding insureds who make eco-friendly investments.

“If they are greening their buildings either through capital investment or through behav-

“Because of their complexity, hotels are way more interesting to work on than your blanket retail storefront business owner’s policy” Ron Abram, Abram Interstate ioral initiatives, we have credits in our rates for that activity,” Arthur says. “We view a direct positive correlation between the quality of risk and green building management practices.

If you get the type of manager who is actually taking the time and spending the money to do these things, they are just a better manager and you should have fewer claims long-term.”

Helping to nurture this trend, Fulcrum has launched the Association of Green Property Owners and Managers, a nonprofit association that teaches hotels and other real estate enterprises how to be green.

Checking in In spite of many new competitors entering the fold, which can be challenging for longtime players, industry experts still see plenty of opportunities within the lodging sector – particularly selling new and emerging add-ons to core program coverages.

“Cyber liability is becoming more and more popular,” Arthur says. “There are still an awful lot of clients out there that don’t have an appreciation for it, and they should. As claims continue to roll in, I think cyber liability is going to be one of the next big things.”

Third-party discrimination coverage also gets less recognition than it deserves, particularly in light of an $8 million verdict awarded in 2000 to a group of an African American guests who sued after they felt discriminated against at a hotel where they were using conference space.

“It’s something hotels need to be very aware of,” Arthur says. “Discrimination – whether pertaining to race, sex or even the American

Disability Act – is obviously something that is not taken lightly, and lodgers can be taken to court. If the front desk clerk says something discriminatory, the whole hotel could be held liable.”

Umbrella insurance is yet another opportunity in the sector. “It’s starting to sink in that after so many years of inflation and an out-ofcontrol tort liability system, you’ve got to have the protection,” Arthur says. “You could go 20 years and never have a claim over $1 million, but on the 21st year, you could have some major catastrophe – that’s why we push it.”

Given the complexity of the hospitality sector and the vast range of exposures it encompasses, Abram has two pieces of advice for producers who might want to tap into it: Focus on a market you can manage, and then do your homework to find the best carrier for your type of risk.

“If you are a small agent on the street, and you write mostly home and auto and a little business, do you have a chance to write the MGM Grand? Probably not,” he says. “But the Dream Inn, just down the road on the corner?

You probably go to the gym or Rotary with that guy. Those are the things an agent should focus on.”

After that, Abram adds, “you need to find someone who specializes in this type of coverage and who really knows the ins and outs. It’s very difficult to sort through all the data that’s out there to find a market with an appetite for a particular kind of risk. And that’s one of the biggest challenges that an agent faces today, is finding out who will do it, and do it at a fair and competitive price.”

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FEATURES

AGENCY INSIGHT

Johnson, Kendall & Johnson Despite employing less than 100 people, Johnson, Kendall & Johnson serves a diverse and sophisticated international clientele. IBA talked to principal John A. Wright about what makes his company tick IBA: How important do you think it is for an agency to have a commitment to specialization? Why does it matter?

John Wright: I think the commitment is centered around competency and knowledge.

If you are specialized in different niches, you should know more than if you just have one client that fits that niche. You can bring your relative experience and the organizational knowledge to bear.

It’s finding those little nuggets, whether it’s in senior living or technology or patent infringement indemnification – all of these things where you acquire a specialized knowledge that other people aren’t thinking about – that’s where you can provide value, if it means something to the client.

IBA: Can you talk about your specializations – especially senior living, social services and international services? How have you been able to build up these specializations and offer true value to your customers?

JW: Our specializations have evolved out of what we do with the general marketplace. We got involved with some of the first continuing care retirement communities in the late 1960s. We have been at the forefront of working with religious-affiliated nonprofit as well as for-profit retirement communities that are geared around care for the senior living niche. We developed risk management models, loss control services and other

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services for these groups to help them manage their entity risk.

Another large niche for us is international work. In the last eight years, there has been a lot of investing in the United States from Europe, mainly to diversify the euro, and we have developed a specialization in being able to serve that niche. The big issue is really the cultural disconnect. Americans tend to think that everybody thinks like us. We have developed a very healthy respect for what we don’t know and we try to go counter to what the typical American approach is – which is, we don’t know everything. We don’t know what the agenda is. We try to listen really hard, and we verify.

Nonprofit social services agencies are assuming a lot of the liability of government agencies, so we are seeing a fair amount of outsourcing occurring with child welfare services, adoption services and care for at-risk populations. That industry has really evolved to be assuming, through contracts, a lot of the obligations that governments typically carry.

We are finding there is a big need and value to

be driven there.

Really, where we create value is when we have dedicated resources that actually solve client problems. That is our definition of value. We could be doing triple somersaults, but if the client doesn’t perceive it as valuable, we are wasting our time.

IBA: What do you think makes you stand out as an agency?

JW: Our talent, our people, our perspective, focusing on solving meaningful problems rather than procuring product, and being engaged in making an impact as a resource for our clients’ business plans. And we have people who are motivated to do that. Our group cares about what they do with clients. I see people here at 10 p.m. because they made a commitment to a client to get something out that is important to the client – I don’t see that culture in too many other places.

People forget that being involved in the insurance business is like juggling dynamite sticks. If you do it wrong, you could put people out of business. If you think about it,

HOW HAS YOUR AGENCY GIVEN BACK TO YOUR LOCAL COMMUNITY? Making a difference is different than just making a lot of money. Last year, we contributed 15% of our profit to charities, including a portion that we can’t deduct since IRS tax code limits corporate charitable deductions. We don’t do that to call attention to ourselves; we do it because it’s important to us. The big cardboard check for the photo op – that’s not us. It’s a big part of our culture to be part of the communities where our clients are.

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FAST FACTS Top specializations Continuing care retirement communities

International services

Benefits

Nonprofit social services agencies

Technology

Year founded: 1956; incorporated in 1959; reorganized by current principals Bruce R. White and John A. Wright in 1994

“Where we create value is when we have dedicated resources that actually solve client problems” you won’t get out of bed in the morning. The key is to make sure people are respecting the responsibilities they have every day.

IBA: What are you doing to attract and grow your talent?

JW: We look at ownership as stewardship.

It’s not our company to sell; it’s our company

to grow and the next generation’s company to grow. We recruit out of colleges. We have a very aggressive three-year mentoring program both for salespeople and account management. We try to give them the tools and resources to be successful. It’s worked well. We have 12 producers that we developed through our mentoring program.

Ownership model: JKJ is privately held; the company is now in its second generation of owners, and is in the process of moving into a third generation Number of employees: 93 Headquarters/location: Newtown, Pa.; licensed in various lines of business in all 50 states Aggregate revenue: $15 million Organic growth: 13% Business structure: JKJ is structured into five different companies • a German joint-venture company • a benefits company • a retirement services group • a financial services group • a property/casualty group

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26/06/2015 3:33:29 AM

FEATURES

D&O INSURANCE

THE COST OF DOING BUSINESS Without directors & officers insurance, the leaders of public, private and nonprofit companies are putting a lot at stake – including their personal assets IN OUR LITIGIOUS society, getting sued is an all-too-common and potentially crippling occurrence – and yet directors and officers of public and private companies and nonprofits often harbor the mistaken assumption that it won’t happen to them.

A 2012 industry survey revealed that more than 80% of public companies believe such a lawsuit is unlikely. Yet 23% of directors and officers said they had already been sued, revealing a startling disconnect between perception and reality.

Directors & officers liability insurance is designed to shore up this gap.

As its name suggests, D&O insurance covers directors and officers for claims made against them (typically by shareholders, creditors, employees, suppliers, customers, competitors, regulators and even fellow directors) while serving on a board of directors and/or as an officer of a for-profit business, privately held firm, nonprofit organization or educational institution.

The intent of any D&O policy, regardless

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of what business sector it is located in, is to protect directors’ and officers’ personal assets against legal claims for wrongful actions or management decisions that they might make on behalf of the organization – including omissions, errors, misstatements, misleading statements, neglect or breach of duty.

Over time, the sector has evolved to also protect the entity itself from financial loss.

A coverage by any other name Carriers often refer to D&O insurance as management liability insurance, says Deborah Dioguardi, a vice president at NIF PRO, NIF Group’s specialty brokerage division for management and professional liability products.

“Some organizations do not refer to their management teams as D&Os and do not have boards of directors,” she explains. “For example, an LLC or an LLP would have members or a management committee.

They should still have a D&O/management liability policy to protect these individuals,

as well as the organization, from financial harm.”

In addition to management liability, other forms of D&O insurance include public off icials liability and general partnership policies.

Whatever you call it, all companies need some form of D&O coverage – whether they are public, private or nonprofit. In many

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LEADING CARRIERS IN THE D&O SECTOR > > > > > > > > > >

cases, the coverage practically sells itself.

“P ublic compa nies rega rd D& O insurance as part of the cost of doing business; they understand D&O insurance is something they have to get because their company is publicly traded,” Dioguardi says. Nonprofits, meanwhile, “will buy it as well, because who would volunteer their time to be part of a nonprofit board if their

ACE Limited AIG Allianz via Allianz Global Chubb Group of Insurance Companies CNA Financial The Hartford HCC Insurance Holdings The Travelers Companies XL Group Zurich Financial Services

personal assets were at stake?”

However, there is a common misconception among both insurance professionals and insureds that small, privately held companies without shareholders or a board of directors don’t need D&O insurance.

“What they don’t realize is that D&O claims are not just made by a minority shareholder or stakeholder – a company can get a D&O claim from pretty much any type of third party,” Dioguardi says. “Suits can be brought by customers, consumer groups, competitors, business partners, deals gone bad, government regulatory agencies ... just about anybody is a prospective claimant against the company.”

Dioguardi spends a large part of her time educating agents and brokers as to why a private company should carry D&O insurance. “This is a loss exposure that privately held companies don’t realize they have,” she says. “Many companies have had claims that would have been covered under a D&O policy if they knew what D&O insurance was and why they should have it.”

Loss scenarios in larger companies, meanwhile, often come from within the fold. For example, an investor might sue a company’s directors and officers after his investment fails to pan out, or a shareholder could bring suit against a company’s directors and officers, their spouses, and the company’s accountants over alleged violations of state securities laws.

Even when a case settles, defense costs

“D&O claims are not just made by a minority shareholder or stakeholder – a company can get a D&O claim from pretty much any type of third party” Deborah Dioguardi, NIF PRO www.ibamag.com

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FEATURES

D&O INSURANCE

WHO IS MAKING D&O CLAIMS? Employees (50% of all claims)

of contract. The D&O policy is responding to that, and it’s going to be a very large claim. If they didn’t have a D&O policy, they probably would go out of business because of the amount we are going to be paying out on this.”

Stockholders Tracking trends

Clients/customers Competitors Other third parties

Brian Thornton has spent his whole career in the D&O sector; he got into it in college when he interned in a D&O claims department, and has been fascinated by it ever since. Today, he is president of ProWriters, a Pennsylvania-based whole-

“We spend a lot of time on the educational side, educating clients and agents and getting them up to speed with what all the markets are doing in regard to cyber liability in the D&O space” Brian Thornton, ProWriters can run into the hundreds of thousands of dollars. The specter of a plaintiff going after the personal assets of not only a company’s directors and officers, but even those of their spouses, ought to be enough to put the fear of God into any business owner, sending them straight to their insurance agent to talk about how to get adequate D&O coverage.

“We have seen plenty of deals gone bad,” Dioguardi says. “I had a situation with a small, privately held company where they entered a joint venture agreement with another company to provide certain services to them, and it basically went bad.

There were allegations of fraud, of breach

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saler and MGA serving the D&O sector.

“For me, it’s interesting because you find something new every day – a new company with a new exposure, and that keeps things fresh,” he says. “And then everything is always changing between the environment, the economy and regulation, and the impact that has on clients.”

In terms of what’s trending in the D&O space, Thornton has observed a lot of mergers and acquisitions over the past few years, leading to more pre- and post-merger claims in the middle market.

Other trends Thornton is tracking include consolidation, rate increases and a shift toward captives in the healthcare space as

smaller hospital groups get absorbed into larger regional networks, and the impact of cyber liability on boardroom discussions as directors and officers start actively considering how to manage and potentially mitigate their risk.

Cyber-related D&O liability claims are currently rare, Thornton says, but that will likely change soon, with securities class action lawsuits on the horizon for companies with cyber exposures.

“We spend a lot of time on the educational side, educating clients and agents and getting them up to speed what all the markets are doing in regard to cyber liability in the D&O space,” he says. “It’s now starting to filter down from just the Fortune 500 or public companies to small businesses understanding that they have that exposure.”

Dioguardi has observed a growing appetite for additional ‘side A’ coverage or monoline side A policies in the D&O space, providing extra safeguards to a company’s directors and officers when the company does not indemnify them.

NIF PRO also is writing D&O insurance in conjunction with employment practices, fiduciary liability, crime, and kidnap and ransom coverage under one policy with separate limits of liability applying toward each coverage section.

“We are also providing cyber liability Indications based off of the information we obtain from the D&O coverage,” Dioguardi adds.

The community association niche Coa stal Insurance Under w r iters, a web-based underwriting company and program administrator headquartered in Florida, specializes in both monoline and package D&O and employment practices liability insurance [EPLI] policies for community association business such as

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condo and homeowners’ associations, golf courses, and country clubs.

With average annual premiums of about $1,000 and a standard deductible of $1,000 to $2,500, D&O policies in the community association niche are an affordable, and essential, coverage. There are more than 300,000 planned communities in the US (the bulk of them in Florida, California and Texas), representing an annual premium volume of about $300 million.

To thrive within this niche, “a lot of it boils down to getting the right coverage to protect board members,” says Sim Bridges, Coastal’s vice president of underwriting.

“The challenge within that is balancing the cost. You’ve got board members trying to protect themselves, and then all the members of the association that are paying the insurance costs.”

Within the niche, Bridges has observed a recent uptick in claims involving the Americans with Disabilities Act, questioning whether service dogs that provide emotional support should be allowed in communities with restrictions on the type and size of dogs, and “lots of breach-of-contract claims.” Concurrently, as the post-recession property market improves, the number of countersuits on

“In the old days … people would just argue. Now, when they have a dispute, they run to an attorney to do the arguing for them. It’s just the litigious society we are in” Chuck Bushong, Coastal Insurance Underwriters foreclosures is on the decline.

Like Dioguardi, Bridges also has observed an appetite for higher limits, particularly within the golf course/country club niche where member owners have been known to sue their association’s board of directors over – for example – failing to purchase adequate insurance coverage to repair tees and greens after a wind event.

“A lot of golf courses are not-for-profit, and if they are not doing well financially, the member owners start blaming people for not managing it properly,” says Coastal president and CEO Chuck Bushong.

Coastal offers a couple of coverages within the community association niche that are unique to the D&O sector.

For example, its policies allow insureds to

A TRINITY OF COVERAGES The average D&O policy for a private company is broken up into three sections: • Side A provides coverage for individual directors and officers in cases where the company, for whatever reason, does not indemnify them.

• Side B covers D&O claims against directors and officers when the company indemnifies them. It is designed to reimburse the organization when it indemnifies the individuals, thereby protecting the company’s balance sheet.

• Side C is for entity coverage, and is designed to eliminate disputes of coverage allocation when directors, officers and the insured organization itself are all named as co-defendants in securities lawsuits.

“If a claim comes in against the director and officers where the company is indemnifying them, it hits the Side B – which is typically what you will see,” Dioguardi says. “Side A claims are not as common as Side B; you only see that in cases where the company can’t make its financial obligation, such as bankruptcy.”

select their own defense counsel. “It’s a big deal,” Bridges says. “If I were in a situation where I was being sued, I would rather have someone I know and trust defending me.”

Bushong describes the ability to choose one’s own attorney as the “number one thing to consider” when choosing a D&O carrier. “It is paramount,” he says, “but most carriers don’t allow you to do that.”

Instead, they require insureds to use a precontracted attorney with whom the carrier has negotiated rates.

Coastal also offers ‘insured versus insured’ coverage for claims by one director or officer against another, or claims by associations against their directors and officers for imprudent business practices.

The coverage is typically limited in D&O liability policies, but is a “big thing” in condos and HOAs, says Bushong.

For example, a homeowner may sue her HOA’s architectural review board for not letting her paint her house a certain color. Conversely, the HOA might sue the homeowner for painting her house that color anyway even after they said no.

“A lot of them are petty disputes, but they do cost money to defend on each side,” Bushong says. “In the old days – in the ’70s and early ’80s – people would just argue.

Now, when they have a dispute, they run to an attorney to do the arguing for them. It’s just the litigious society we are in.”

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FEATURES

MARKETING

Making movies: 10 things to avoid Video can be a great way to engage customers, and these days it costs very little. Video expert Geoff Anderson points out some mistakes to avoid VIDEO IS one of the most powerful and accessible tools we have in business today.

When it is done well, it builds community, creates rapport and enhances your brand.

However, when it is done poorly it can turn away followers, customers and create brand damage.

Here are 10 mistakes to avoid when making videos for your business.

1

No clear audience

As with any marketing activity, it is critical to be clear on who your audience is.

Don’t try to be everything to all people. If you do this, your message will get lost and have little meaning.

By being clear on your audience, you can target your message in a way that truly resonates. If you struggle with your target audience, think about who you would like to be writing a policy for after seeing the video.

If you have a niche for your insurance brokerage, then be clear about it.

2

An unfocused message

The clearer you can be about why you are making the video, the easier it will be to

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focus your message. What is the action or message you want the viewer to take away after watching your video? Keep coming back to this as you draft your scripts and think, “Is this relevant or helpful for my intended audience?”

3

Too much information

The days of getting 10 or 15 minutes of your audience’s time to watch your video have passed. The key now is to keep the content concise and valuable, which goes back to the purpose of your video.

For example, if the purpose is to encourage people to visit your booth at the next industry event or call you to discuss their insurance requirements, then find ways to get to that point quickly and clearly.

Sometimes too much information ends up turning people away, or worse – boring them.

4

Facts instead of emotion

You might be offering the best rates or customer service, but how can you make this information resonate with your audience?

Does it mean they can have less stress if the unthinkable happens and they have to file a

claim? Focus on the emotional needs of your audience and how you can satisfy them.

Keep asking yourself – why does this feature matter to my customer? You can connect with people at an emotional level when you focus on how they will feel and benefit as a result of using your services. Leave the weighty details on your website for those who really need to know.

5

Too much emphasis on you

Keep the focus of your video on the viewer and how your work can help them rather than focusing on yourself. If you find yourself talking about we and I, stop and think about how you can shift it to ‘how you will benefit from this service.’ If you focus more on what’s important for your customer, you are more likely to keep them engaged.

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you shoot in portrait aspect, you will end up with a thin image with black bars on either side. Also avoid using the zoom; this will just reduce the quality of the recording – instead, stand closer to the device to fill the frame.

8

Uninteresting or distracting background

Be aware of what is in the background of the shot, as this will form part of the story you are telling. Avoid filming people up against walls, which creates shadows and looks uninteresting and flat. The more depth you can have in the picture, the better, and a background provides an opportunity to show some additional information that can enhance the character of the presenter or the information you’re sharing.

As with any marketing activity, it is critical to be clear on who your audience is. Don’t try to be everything to all people 6

Poor audio

Viewers will put up with rough visuals, but they won’t forgive poor sound.

No matter what camera you are using, make sure you connect a suitable microphone to it. Ideally, you want to have a camera that allows you to monitor the sound as it is being recorded. That way you can check if there are any rubbing noises or buzzing that could be affecting the quality of the audio. If you can’t plug in headphones while you record, then do a test recording first and listen back to check the quality.

Even if you’re shooting on a smartphone, there are plenty of microphones you can get to ensure the audio sounds right. These include a shotgun, lapel or a handheld microphone.

7

Badly framed

When filming people, make sure you put the top of their head at the top of the frame. Many newbies look through the camera and put the face in the middle of the screen. This results in empty space above the head. Learn to look through the viewfinder as if it is a framed picture on the wall.

Generally, if someone is talking directly to camera, make sure they are centered in the frame. The only time you might play with this is if you want to use the space on the side to add extra information, such as text points. If you are interviewing someone on camera, ensure you give a little space for ‘talking room.’

If you are using your smartphone for filming, then please, please, please make sure you hold the camera in landscape mode. If

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Wobbly cam

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Using cheap technology to impress

A tripod is a must for newbies to avoid shaky hands and wobbly video. You can even get holders for mobile phones that will ensure your shot is steady. Unexplained camera movement distracts the viewer and dilutes the impact of your message.

Cheap and easily accessible devices such as mobile phones are a way to stay connected with your community. However, I wouldn’t recommend trying anything too tricky or impressive using a phone camera, such as a promotional video or green screen effects.

Better-quality lenses, image sensors and audio will give you a better result for that sort of stuff. Talk to the professionals.

Keep the DIY content for maintaining rapport with existing customers. If you are looking to use video to attract new customers, then spend the time and money to work with professionals.

Geoff Anderson is a video producer and owner of Sonic Sight, a corporate video production company. He is also the author of the Amazon Bestseller Shoot Me Now: Making Videos to Boost Business. Visit www.sonicsight.com.au.

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FEATURES

STRATEGY

Change or die Even the greatest and most successful businesses need to adapt and change in order to stay relevant, or else face obsolescence. It’s about anticipating, preparing for and embracing change when needed. Michael McQueen reveals how IN THE early 1930s, with the world in the grip of economic depression, a Danish widowed father of four had a vision. Despite the grim fiscal outlook, Ole Kirk Christiansen purchased a small toy shop in the town of Billund and launched a modest business with the name Leg Godt (Danish for ‘play well’).

Christiansen was a pioneer from the outset – his was the first toy business to embrace a new technology called plastic. Within a few short years, Lego, as the company was now affectionately known, had become the toy of choice for children worldwide.

In the years that followed, Lego evolved and grew. From simple plastic blocks to the release of playsets and the invention of the little yellow man, the company innovated its way to the position of undisputed leader in children’s play.

Until the late 1980s, that is.

As new generations of children began opting for video games rather than plastic playsets, Lego was faced with a dilemma. The company began an 11-year loss stretch – losing $500 million in just two years at their worst point.

By the late 1990s, the casual observer may have been justified in predicting that Lego had run its course and was a dead brand walking.

And yet, the story was far from finished.

Recognizing the need to embrace the digital age, Lego’s strategy was informed by the old adage: If you can’t beat ‘em, join ‘em. Lego entered a series of licensing arrangements with

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well-known movie franchises such as Star Wars, Batman and Indiana Jones to create their own co-branded video games. Buoyed by the success of this new direction, Lego expanded their digital offering with the 2010 release of a massive multiplayer online game, Lego Universe. More recently, they have developed smartphone apps that allow users to build Lego shapes while sitting on the bus.

There is little doubt that Lego today is more powerful, profitable and relevant than ever – the recent release of their blockbuster movie is testament to this. In contrast, Lego’s one-time rival, Meccano, has faded into obscurity.

What can we learn from Lego?

So, what can other brands and businesses learn from this story of adaptation and reinvention?

I would suggest that in order to win the battle to stay relevant over time, organizations and leaders must consistently be willing to do the following:

1

Recalibrate

While an appetite for change is critical to staying ahead of the curve, it is important to discern which fundamentals in an organization should never change. Just as you must

determine load-bearing walls when renovating a house, leaders must identify non-negotiable values, principles and purpose. Tamper with these ‘load-bearing’ fundamentals, and everything may come crashing down.

Before embarking on any change agenda, it is vital to recalibrate an organization with its core DNA and allow this to be a guidepost for strategy and a touchstone for decisionmaking. In the case of Lego, the company’s leadership never lost sight of Lego’s core purpose of inspiring play, creativity and imagination amidst their digital reinvention.

2

Refresh Any gardener knows that regular pruning

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is necessary to maintain the health and vitality of a garden. In the same way, organizations require regular pruning of initiatives, traditions and even people who are inhibiting growth. While pruning can be painful and even disruptive in the short-term, it is critically important.

Consider how Sony CEO Kazuo Hirai embarked on a series of necessary pruning initiatives. In the face of $6.4 billion loss for 2012 and a dramatic downgrade of Sony’s credit rating, Hirai recognized that he would need to act quickly to turn around the ailing tech giant’s fortunes.

leaders and organizations to continually reengineer their internal systems and processes.

Too often, being ‘in a groove’ can easily turn into a rut, and simply repeating the habits that have worked in the past can set you on a collision course with inefficiency and irrelevance.

5

Reposition

As times and needs evolve, so must the positioning of businesses and brands. This could mean developing new products and services, tapping into new markets, or completely overhauling a brand’s messaging.

Just as it is necessary to determine which walls are load-bearing when renovating a house, leaders must identify non-negotiable values, principles and purpose His first step was to end Sony’s decade-long marriage with Swedish mobile phone company Ericsson. Next, Hirai spun off any Sony-owned non-core companies, dramatically streamlined manufacturing processes and cut Sony’s global workforce by roughly 10,000 employees.

3

Reframe

We were all raised to believe the lie that great minds think alike. Nothing could be further from the truth! The greatest and most creative minds have always thought very differently from their peers and the prevailing wisdom of their era. Being able to view the world from a different frame of reference is, in fact, the key to innovation and invention.

Leaders must pay particularly close attention to the views and perspectives of those who have fresh eyes in an organization – often owing to their lack of experience. Such fresh eyes have no trouble thinking outside the box because they have no idea what the ‘box’ even looks like yet.

4

Re-engineer Keeping pace with change will require

To see a brilliant example of a repositioned brand, look no further than 160-year-old glass manufacturer Corning.

In 1908, half of Corning’s revenue came from making glass bulbs. Over time, the Corning brand extended beyond these roots and became known for its high-quality cook- and kitchenware. Today, however, many of Corning’s most lucrative products are ones that didn’t exist 10 years ago. The company now specializes in cathode-ray tubes, fiber optics for HD TVs, and laser technology that enables mobile phones to be fitted with micro projectors.

Corning is a great example of a company rich in tradition and history that has stayed relevant by not being afraid to embrace new products and services as times have changed.

Setting a brand or organization up for enduring relevance involves a principle that every experienced surfer understands well. In order to catch the perfect wave, a good surfer knows the importance of keeping their eyes firmly on the horizon. While a wave is still forming a long way off in the distance, surfers know that this is the time to move – to paddle

SHAKY TIMES: 10 ENDANGERED BRANDS Every year, 24/7 Wall St, which provides critical online analysis and commentary for US equity investors, identifies 10 US brands that it predicts will disappear within a year’s time.

Among the selection criteria are declining sales and losses, disclosures by the parent of the brand that it might go out of business, rising costs that are unlikely to be recouped through higher prices, and companies that have lost the great majority of their customers. The brands predicted to disappear in 2014 were:

out and get in position. Move too late or not at all, and you’ll simply get washed up as the wave crashes over you.

In much the same way, winning the battle for relevance is about anticipating, preparing for and embracing change – no matter how uncomfortable or confronting it may be. As Charles Darwin once observed, “It is not the strongest that survive, nor the most intelligent. Rather,” he said, “it is those who are most responsive to change.”

Michael McQueen is a leading business commentator and four-time bestselling author.

His most recent book ,Winning the Battle for Relevance, explores the importance of reinventing an organization or brand before you are forced to. Visit www.michaelmcqueen.net

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PEOPLE

PRODUCER PROFILE

Thinking inside the box Eric Reingen began insuring CrossFit gyms just as the fitness movement was picking up steam – and now he’s reaping the rewards

ON ERIC REINGEN’S first day of work as an account executive with Nexo Insurance Services in southern California, his boss took him out to meet a new fitness client called CrossFit LA. It was 2009, and the global workout craze known as CrossFit was just taking off – there were only around 200 CrossFit affiliates around the country.

Although Reingen was fresh out of college and didn’t really know much about insurance yet, he did know a thing or two about the ‘functional fitness’ philosophy that CrossFit embraces.

Results are achieved through short, grueling workout sessions like ‘Cindy’ (20 minutes of as many repetitions as you can of five pull-ups, 10 push-ups, 15 squats), and ‘Fight Gone Bad’ (which includes hurling a 20-pound medicine ball at a target 10 feet away).

Reingen also knew an opportunity when he saw one. “CrossFit resonated with me right away,” he says. “I knew that it could very well explode.”

He was right.

Today, well over 11,000 CrossFit-branded affiliates have opened up ‘boxes’ (gyms where workouts

are held under the direction of a CrossFit-certified trainer) across the country and the globe. The near-vertical growth of the sports-fitness brand has been staggering, and so has Reingen’s career trajectory.

The 30-year-old former collegiate soccer player and political science major is now the assistant vice president of CrossFit Risk Retention Group – a communityowned insurance company serving the majority of the CrossFit affiliates in the US.

“CrossFit resonated with me right away.

I knew that it could very well explode”

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An aggressive approach

Founded and administered by Nexo Insurance Services, CrossFit RRG was initially created in response to the reluctance of commercial carriers to provide coverage to CrossFit affiliates because of the perception that they were potentially dangerous and thus a poor risk.

The company’s creation also enabled CrossFit affiliates to assert more control over how they were defending claims – particularly those relating to rhabdomyolysis, a blood disease in which skeletal muscle tissue breaks down rapidly in response to

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extreme exercise, leading to kidney damage.

Over the years, a handful of CrossFit participants have been struck by rhabdo after pushing themselves too hard. The New York Times first reported on the problem in 2005, in an article titled “Getting Fit, Even If It Kills You.” The issue came to a head in 2008, when a former Navy information systems technician named Makimba Mimms sued a CrossFit affiliate training company and one of its trainers in Manassas, Va., contending that an especially intense CrossFit workout had caused him to develop rhabdo.

Rather than allowing CrossFit to bring in defense experts to defend the case – and CrossFit’s reputation – the insurance carriers opted to settle outside of court, Reingen says. The New York Times picked up the story and published another article reporting that CrossFit was inherently dangerous.

It’s a label the brand has been fighting ever since. CrossFit RRG’s risk management strategy centers around letting people know that CrossFit is a lifestyle that is safe and that a lot of people enjoy.

“From a personal injury standpoint, we have been able to prove through the RRG and through the collection of claims and data that CrossFit really is safer, from a claims standpoint, than other fitness norms or fitness companies that are out there,” Reingen says.

This is largely due to the strict guidance that CrossFitters receive from skilled trainers within a class setting “versus people who are just going into the gym and not having much guidance,” Reingen says, adding that “the family nature of a CrossFit affiliate also mitigates a lot of claims.”

While the media continues to scrutinize CrossFit, questioning its injury rate and linking it with rhabdo and other physical ailments, the perception of the brand in the insurance marketplace has changed dramatically.

“Commercial carriers are now trying their best to get a market share of CrossFit affiliates, which has brought on some unexpected competition, but the RRG still has the largest market share compared to any other carrier,” Reingen says. “Community

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PEOPLE

PRODUCER PROFILE

ownership resonates with affiliate owners because the RRG staff understands them and their business.”

“Commercial carriers are now trying their best to get a market share of CrossFit affiliates, which has brought on some unexpected competition, but CrossFit RRG still has the largest market share compared to any other carrier”

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A CLOSER LOOK AT CROSSFIT RRG

The WOD squad CrossFit got its start in 2000 at a backwater gym in Santa Cruz, Calif., under the direction of an iconoclastic personal trainer and former gymnast named Greg Glassman.

CrossFit workouts are short and intense mash-ups of Olympic weightlifting, powerlifting, calisthenics, gymnastics, sprints, plyometrics, and much, much more. They demand that participants work at about the 95% level, the theory being that there is a bigger benefit to a short, high-intensity workout than a longer, lower-intensity endurance workout.

Thanks to its focus on functional fitness, CrossFit rapidly evolved into a preferred training method for military special operators like Navy SEALs, Rangers and Marines, as well as cops and firefighters. But it has attracted hundreds of thousands of mainstream participants as well.

Reingen has been doing CrossFit workouts since he started working for Nexo back in 2009.

“What really drew me toward it was the team aspect,” he says. “I just love being in a class environment where all of the people are suffering the same way you are.”

About a year ago, Reingen took the additional step of becoming a partner in a CrossFit affiliate, where he helps out on the business development side and gets in his workout of the day (or WOD) four to five times a week – usually at noon or right after work.

When he can’t make it to the gym, he works out in his own garage, where he has a small rig for pull-ups, a squat rack, a rower, weights, boxes, kettle bells, jump ropes and a set of rings.

Even for those who aren’t into the super competitive aspect, CrossFit definitely has a way of getting under people’s skin, into their heads. It’s not just the fitness aspect that hooks people, Reingen says. It’s also the sense of community.

“It’s a much different vibe than what you would find in a traditional fitness environment,” he says.

CrossFit RRG is administered by Nexo Insurance Services, and owned by CrossFit affiliate owners who have complete say over what’s in their policies.

The RRG only insures CrossFit affiliates and trainers.

Administratively, it is fully linked with the CrossFit corporate entity, providing for seamless coverage service, along with the assurance that the CrossFit community itself controls how its claims are defended.

Policies offered through the RRG cover both general and professional liability, and are free of restrictions and exclusions that would typically come from other carriers, “whether it’s running outside the box, nutritional advice or creating your own equipment like rings, ropes or pull-up bars,” Reingen says.

While risk retention groups aren’t typically seen in the fitness field, “it’s really not that unique to have a risk retention group for professionals,” Reingen says. “Doctors and lawyers have them. We look at the CrossFit trainer as being a professional who has real expertise in the field of fitness.”

There is a running joke that the number one rule of CrossFit is that you have to talk about CrossFit all the time.

“I think that is pretty much a true commentary on what the CrossFit community is like,” Reingen says.

“And I mean that in the best way possible – because they want so badly for everyone else to do the same thing that has helped them change their lives.”

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PEOPLE

CAREER PATH

FINDING INDEPENDENCE It may have taken a while, but J.B. Woods found his passion: growing independent businesses that serve underrepresented communities 2015

SPEAKS TO AN ASSEMBLY OF PEERS Earlier this year, Woods passed another personal milestone: addressing hundreds of his peers at an event hosted by Chartered Property Casualty Underwriter “Speaking in front of this designated group made me feel really good. That was one of those key moments when I said, ‘I really enjoy this. I’ve come a long way’”

After moving to Colorado in 2006 to escape the Los 2009 Angeles rat race, Woods found that he still craved true OPENS independence. So in 2009, he opened the doors to GREENPOINT Greenpoint Insurance, which specialized in another INSURANCE underserved group: the marijuana industry “It was a lightbulb that went off, and I thought, ‘Here’s a niche that may not be served currently very well in Colorado’”

1999

MOVES TO ALLSTATE After a couple of years with Northwestern Mutual, Woods made the jump to Allstate, where he finally had the opportunity to work independently. He opted to work in an underserved area of Los Angeles that had a strong Hispanic population – the catch, however, was that Woods didn’t speak any Spanish “I hired a team that spoke Spanish, and we started marketing. [The area] was so underrepresented” Like many graduates, Woods didn’t have a clear path when he graduated from Rutgers with a degree in biology and animal sciences. He flirted with the idea of becoming a veterinarian, but ultimately entered the banking industry “My dad was in banking, so that kind of influenced me in that direction”

Woods felt the marijuana industry is a serious one that deserves serious representation, so he helped found the National Cannabis Industry Association “To have an association of cannabis companies in the US is historic in and of itself. As a group, the association allows for partnerships and for the industry’s problems to be resolved through an association”

2010

HELPS FOUND THE NATIONAL CANNABIS INDUSTRY ASSOCIATION

“Running a marathon is like starting a business. You have to start walking.

You’re going to have good days and 2002 RUNS FIRST horrible days, and you have to get MARATHON through the horrible days. Running a marathon to get to the finish line taught me a lot about business” 1996

ENTERS THE INSURANCE INDUSTRY During the mid-90s, Woods envied the lifestyle of his neighbor, an insurance broker, who had fancy cars and, seemingly, a lot of free time. So he joined Northwestern Mutual Life, where he learned about selling “He was really the impetus to make me say I wanted to do that.

GRADUATES Life insurance is extremely challenging, and Northwestern FROM RUTGERS Mutual did a great job of motivating their agents. But for me, life UNIVERSITY insurance wasn’t the ticket”

1986

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PEOPLE

OTHER LIFE

SPINNING STRAIGHT Ivy Riggs takes a hands-on approach – to helping clients manage environmental risks and to creating hand-woven tapestries

TELL US ABOUT YOUR OTHER LIFE! Email iba@keymedia.com

AS AN EXECUTIVE underwriter for PartnerOne Environmental, Ivy Riggs works to move the environmental insurance industry forward. But when she gets home, she often finds herself turning a spinning wheel.

Riggs’ passion for weaving started with a trip to Hokitika, New Zealand, in 2004 for her 10th wedding anniversary. “It’s this little artsy community, a really neat little place,” she says. “I found this shop where they sold spinning wheels, hand-crafted from trees that are only found in New Zealand.”

Riggs says she fell in love with the wheel and knew she had to bring it

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Number of weaving pieces completed 48

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home to Colorado, though ushering it through customs wasn’t easy. “They had no idea what it was,” she says.

“They went through the entire box.”

Stateside, Riggs took a spinning class and started producing more yarn than she knew what to do with.

Someone suggested weaving, since that uses more yarn than traditional knitting. A couple of communitycenter courses, and Riggs found her newest passion. Over the last decade or so, she has honed her skills, and is now proudly displaying her work at a show celebrating the 50th anniversary of the Handweavers Guild of Boulder.

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Hours spent weaving a single show piece

100

Yards of yarn used to weave a show piece

SPECIAL REPORT

TECHNOLOGY SUMMER 2015

Technology used to be a simple convenience, but it’s become a necessity today. Insurance Business America takes a look at how producers are using technology – and where they might be lacking

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SPECIAL PROGRAM REPORT DIRECTORY

TECHNOLOGY

AS CUSTOMERS become more technology-savvy, they’re also becoming more demanding; they expect the businesses they frequent to be technologically up-to-date.

Many people, in fact, won’t do business with a company that doesn’t have a website, and for some, the lack of a mobile presence is a sure sign of an amateur operation.

“People will always be concerned about implementing technology and the cost required,” says ITC president Laird Rixford. “I could always throw out the classic line, ‘Well, what does it cost if you don’t implement it?’ If you’re considered a dinosaur, if the consumer’s expectations aren’t being met by your organization, will they continue to stay with you long-term? The answer is probably no.”

But how do producers feel about the technology solutions on offer today? Insurance Business America wanted to know, so we surveyed hundreds of insurance pros about their involvement with technology. We asked how many producers used three of the most common technology solutions – agency management systems, customer relationship management systems and comparative rate/quote tools – and how much they felt those systems helped their businesses. We also talked with three execs at the forefront of insurance technology to find out where they feel agencies might be missing opportunities.

able to implement technology in your agency is the mindset that you need to have. When you have that type of mindset, you’re willing to put the effort into vetting that technology, proving that technology is going to work for you, and dedicating yourself and your staff to using that technology to its fullest ability and not just have it sit on the shelf.”

“Given where we sit as a vendor, we spend a lot of time with customers – large, small, all over the landscape,” says Michael Howe, senior vice president for product development at Applied Systems. “And to an agency, they feel that investment in technology is no longer nice to have – it’s now essential. They’re at different points across the continuum; some are early adopters who’ve had the technology for years. All the way at the other end of the continuum, we encounter agencies that are literally at the starting blocks. But it’s essential, and we see the data bear that out. In companies that are performing the best, and have improved their performance the most over time, it can almost always be traced back to investments in technology that have helped them be more effective and efficient.”

So how are today’s agencies using technology? Here’s how the numbers shook out.

A vital piece of the puzzle

Agency management systems

Years ago, using technology well generally meant more convenience for the independent agency – but it wasn’t necessarily something that could make or break a business.

Plenty of insurance agencies operated just fine with filing cabinets, Rolodexes and perhaps one employee preternaturally gifted at keeping track of volumes of information.

That’s not really possible anymore, Rixford says. While agencies don’t necessarily need to upgrade to every new software that comes down the pike, they’d better be tech-savvy if they want to keep their doors open for long.

“I would say that it’s important to keep up with technology,” he says. “Not always the cutting-edge technology – sometimes you need to let that technology prove out. But being technology-savvy and willing and

The vast majority of producers are using agency management systems, according to IBA’s survey; 82% of survey respondents said they use an agency management system in their business.

Most producers seemed pretty satisfied with those systems’ performance, too; more than 58% said they liked or loved their agency management system, while only about 10% reported disliking the system.

There were some common complaints about agency management systems, however; producers noted difficulty of use, lack of integration with other systems and even reporting inaccuracy as frequent problems.

“It could be more user-friendly,” wrote one respondent.

“The workflow in setting up a new account should be more logical and intuitive. The data captured should move to each policy type. The download should be PDF. They’re just beginning to do this … but most carriers are still not working with them to make the data in the file sync with the data at the company level.”

That lack of carrier participation is actually a common problem, reports Chad Adams, information technology director for Assurance.

“In order to get data into our systems, we’re doing it by hand,” he says. “There’s very little data interchange between the carriers by us electronically. If you type it in by hand and you make an error, then that policy is

WHICH TECH SOLUTIONS DO YOU USE?

AGENCY MANAGEMENT SYSTEM

Yes: 82% No: 18%

CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM Yes: 30% No: 70%

COMPARATIVE RATE/QUOTE TOOLS Yes: 53% No: 47%

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LAIRD RIXFORD: DON’T MISS THE BOAT ON MARKETING AUTOMATION IBA: How important is technology when it comes to marketing?

LR: Everybody talks about being where the consumer is when they’re there. That’s where technology is enabling people. The technology that Geico and Progressive and the direct writers have had for many years where people can go online, get a quote, buy that policy directly online, have all the marketing tied into the website – that technology satisfies the consumer’s need any time of day or night.

Technology has finally caught up, and it’s been offered to agencies for quite a few years now to enable them to compete with these online players.

That’s what’s exciting to me. I’ve spoken to a lot of people, and they seem to have resolved themselves that they can’t compete with these direct writers.

But the same technology they offer, a local agency can offer as well.

IBA: And customers simply expect it now.

Laird Rixford President, ITC While most agencies make use of technology solutions to improve their internal processes, many aren’t taking full advantage of technology’s ability to reach customers, says ITC’s Laird Rixford.

IBA: Are there technology solutions you feel aren’t being implemented widely enough?

Laird Rixford: Where I believe people are really missing the boat are two places. One is analytics – understanding your customer base, being able to target your customers, what they want, what they need. What makes analytics even more powerful is what you do with it. If you simply put analytics together and say, ‘Thirty percent of my business is coming from this one neighborhood,’ but you don’t do anything with it, analytics don’t mean a thing.

And that’s the second part where I believe agencies ... miss the boat – marketing automation.

You can have marketing automation products that integrate with your rating or your management system. Now you know that 30% of your business is coming from this group or this area, and you’re able to email market to them, text-message market – even send out mailers that are directed to that target market. [Agencies] have technology that automates their internal processes, but they don’t tie that to a process that allows them to market to new customers.

LR: This is something I feel needs to be addressed.

We’re talking about utilizing technology to improve your agency – but consumers are the real drivers of technology. They expect technology. Everybody says

“Everybody talks about being where the consumer is when they’re there.

That’s where technology is enabling people” millennials expect technology, but frankly, that’s out the window now. My 67-year-old father and my 10-year-old cousin both expect technology to be there at their knees.

Technology that can help improve agencies also will make the customer’s buying experience much better with agencies that have adopted that technology. If you’re able to make your entire experience technology-savvy and make the consumer feel like you’ve met their needs in the tech world, that becomes part of the consumer expectation that’s been set by those companies.

Agencies need to look at it this way: Implementing technology is not just doing it for technology’s sake. It’s not just implementing technology to improve your internal business processes. It’s not implementing technology to improve sales.

It’s implementing technology because that is the consumer’s expectation moving forward.

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26/06/2015 11:27:16 PM

SPECIAL PROGRAM REPORT DIRECTORY

TECHNOLOGY

PRODUCER ATTITUDES TOWARD AGENCY MANAGEMENT SYSTEMS

Do not use: 18% Extreme dislike: 5% Dislike: 5% Neutral: 14% Like: 32% Love: 26%

wrong. If you get it from the carrier, then you have the record of truth. But the difficulty is the carriers themselves.

They all use different systems on the back end, and they have very little incentive to help us or make their systems newer or better.”

CRMs While the vast majority of survey respondents said they used agency management systems, relatively few used customer relationship management systems, or CRMs. Just 29.55% of those surveyed said they used a CRM, and those who did found it less user-friendly than agency management systems.

Only 15.38% of survey respondents reported liking or loving their CRMs, while nearly 10% said they felt relatively neutral about them. Another 4.85% reported that they actively disliked their CRMs.

CHAD ADAMS: THE INDUSTRY NEEDS MORE FOCUS ON ANALYTICS

”We don’t take enough advantage of the data that we have – especially those of us who are mid-sized” IBA: Surely most firms are using data, at least to some extent.

Chad Adams Information technology director, Assurance Finding ways to gather the right data – and make intelligent use of the data you have – will be vital in the to the insurance industry in the future, according to Assurance’s Chad Adams.

IBA: What’s the biggest technological issue facing the industry right now?

Chad Adams: We don’t take enough advantage of the data that we have – especially those of us who are mid-sized. You hear and see all of the stuff about Google and Facebook wanting to become insurance brokerages in some form – and that’s terrifying, because they have the analytics on their side. They have the potential to do targeted sales in an extremely focused way.

CA: We’re not using data as effectively as we could. Taking the data and using it to help take care of our clients is difficult. Many agencies that are smaller or mid-sized don’t have the money to hire a data scientist, so we have to do it on our own.

That’s not to say smaller companies don’t make any use of data – but to get the insights a larger company can, those things are difficult for us, I think. Very few of us have the capability of using our data as effectively as we should.

IBA: So is there a solution?

CA: There are several systems out there right now for analytics and business intelligence that allow agents like us to gain better insight into our own data using the pre-built stuff that they’ve done. There’s a lot of query architecture and access that they’ve built into the software. While that’s helpful, I think the issue is that we still don’t have access to data people – people with degrees in statistics who can make sense of all of that. Perhaps it’s incumbent upon us to start recruiting them. Perhaps we can’t afford to pay a top-level data scientist, but at this point, anything’s better than nothing.

We have to be prepared for companies like Google or Amazon to become insurance sellers. While they certainly have the advantage on us in analytics and big buckets of cash, we have the edge on them in having done this for years and years.

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26/06/2015 11:27:23 PM

Increase productivity across your agency TODAY, AGENCIES NEED TO DELIVER FASTER SERVICE to meet higher client

expectations. With the fastest-growing agency management soware and the industry’s leading online client self-service application, Applied enables you to increase productivity to enhance client service.

Learn how Swingle Collins increases productivity to enhance client service with Applied. appliedsystems.com/productivity FRANK SWINGLE

President Swingle, Collins & Associates

appliedsystems.com 53

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26/06/2015 11:27:27 PM

SPECIAL PROGRAM REPORT DIRECTORY

TECHNOLOGY

PRODUCER ATTITUDES TOWARD CRMS

Do not use: 70% Extreme dislike: 3% Dislike: 3% Neutral: 9% Like: 9% Love: 6%

“It doesn’t build relationships,” complained one respondent of his CRM. “It needs marketing possibilities.”

“It’s clumsy and unstable,” wrote another.

Ease of use and compatibility issues were also common complaints. “[The CRM’s] outdated design requires heavy manual data input and unduly repetitive info demands,” wrote one respondent. “[It] lacks efficiency and easy use, which limits its applicability. Far short of the sales pitch for the CRM.”

Comparative rate/quote tools A little more than half of the producers surveyed said they used comparative rate/quote tools, but most of those who used them felt they helped their business.

Of those surveyed, 47.32% didn’t use comparative rate/quote tools at all, while more than 36% used them and either liked or loved them. Only 6.82% of survey respondents said they disliked the tools.

Complaints about accuracy were a common theme among those who used comparative rate/quote tools.

“Pricing and rating rarely seem accurate, which is either the program’s fault, or the updating is not getting priority,” wrote one respondent. “Too much disparity.”

“I don’t like comparative raters because none of them are accurate,” wrote another. “I use SEMCAT because it is not a comparative rater.”

“Since companies want to change from a simple base product to a specialized multi-tiered, multi-packaged endorsement product, the rater has not kept up with these variances, and prices are no longer dependable,” wrote another producer. “It is now just used to populate each company with basic information, and the agent has to

PRODUCER ATTITUDES TOWARD COMPARATIVE RATE/ QUOTE TOOLS

Do not use: 47% Extreme dislike: 3% Dislike: 3% Neutral: 10% Like: 18% Love: 18%

enter the company’s rating system and clean it up to reflect actual selections.”

No longer optional Despite these concerns, however, most agencies realize that it’s simply impossible to stay in business these days without adopting technology solutions.

“I would say that the industry has come a long way since 1985 when we launched our comparative rater,” Rixford says. “You did rates manually on paper then. A lot of technology has been adopted by agencies – especially rating systems, management systems and document storage systems. That’s where people have embraced it.

If you asked them, ‘Could you live without your management system; could you live without your rater?’

– they say in surveys that they couldn’t live without their management systems or rating systems. Their future growth is based on those being there.”

“In some ways you could argue that the idea that technology is something that can help a business improve is not exactly new,” Howe says. “Take Applied Systems, for example – we’ve been around for 30-plus years now. To some extent, technology as a core enabler is a long-established principle. But what we’ve seen over the last couple of years is a more aggressive move toward additional and different types of technology.

People are starting to think of technology not as that back-office thing that someone in some other department does. They’re thinking of it more strategically. It’s on the minds of executives. It’s on the minds of folks engaging with the customers and trying to drive new sales. It’s no longer a back-office thing; it’s a strategic issue. That’s really the shift.”

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26/06/2015 11:27:37 PM

You + ITC A Successful Pair

MARKETING RATING MANAGEMENT

One Company.

One Goal.

Yours.

Our goal is to help you reach your goal, whatever that may be.

Whether you are looking fo for a website, agency marketing help, a comparative rater or agency management system, ITC can help. Like how cookies are better with milk, you and ITC mak make a great team as we provide you with the technology you need to succeed.

Visit us online at GetITC.com Or call us at (800) 383-3482

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26/06/2015 11:27:44 PM

SPECIAL PROGRAM REPORT DIRECTORY

TECHNOLOGY

MICHAEL HOWE: REACHING BEYOND YOUR OWN FOUR WALLS

“We see agencies wanting to better connect with others in the industries they do business with.

They recognize that they’re no longer just four walls; they can’t operate as an island”

Michael Howe Senior VP of product development Applied Systems Technology should be used for more than just organizing documents, says Michael Howe, senior vice president of product development for Applied Systems; it should be a bridge to your customers and partners.

IBA: Are you seeing any shifts in the way the insurance industry is using technology?

Michael Howe: I would say historically, to the extent that people used technology, it tended to focus on an internal operational improvement. It hasn’t gone away; managing your operations is still, of course, important. But what we’re seeing is that’s no longer sufficient. We see agencies wanting to better connect with others in the industries they do business with. They recognize that they’re no longer just four walls; they can’t operate as an island. Connecting with carriers, for example – that’s a huge amount of time and focus and manpower dedicated to just the information that needs to flow back and forth between carriers and agencies. So the more that you can automate that, the more you’ll see a huge gain in productivity and profitability.

Another example – at the end of the day, an agency is a sales and service organization. As the world changes and people, broadly speaking, adopt different technology, the agency has to adapt to that. The agency has to be ready to serve

their customers 24/7. The world is changing around the agencies, and the ones that are forward-thinking find that being able to better connect with their customers and their partners is essential to their competitiveness.

Moreover, for the agencies in particular, carriers are increasingly investing in going directly to the end customer. You could argue it’s a competitive differentiator today for agencies to invest in the technologies I’m describing – but you also could argue that it’s quickly becoming not just a differentiator, it’s becoming a mandate.

IBA: As a technology vendor, you must have an interesting perspective on how the insurance world is adapting to new tech solutions.

MH: From Applied Technology’s perspective, we’re tied at the hip with the agencies. So it’s our responsibility to introduce new technology – help agencies think about business intelligence, help them think about mobile, help them think about the cloud. It’s our responsibility to stay on top of all those new technologies and bring them to bear for our customers.

One of the really big shifts we see is the shift to the cloud. The days of people taking on hardware, taking on software, taking on all the people with the skills to manage the hardware and software, and doing it all in-house – those days are numbered.

More and more, people are saying, ‘Why do I need to do this? I’m an insurance agent – I don’t know what I’m doing when it comes to that stuff.’

Increasingly people are moving from hosting that software itself to moving to the cloud. At Applied, we are seeing a very rapid shift on how people buy and consume software. That’s played out in a variety of other industries in the last five or 10 years. It’s happening in real time in ours.

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More technology use leads to more business Even smaller agencies can benefit from adopting technology A NEW STUDY by Velocify and ITC shows that larger, more successful insurance agencies tend to be heavy users of technology. Larger agencies’ investment in technology also was found to be more likely to grow compared to smaller agencies or those whose revenues are static or shrinking.

That indicates a technology gap that may only get wider.

The study shows that agencies that rely heavily on technology generally see revenue and productivity gains as they adopt that technology. For instance, agencies that make thorough use of sales and marketing technology tend to have greater revenue growth and sell up to 43% more policies per producer and up to 13% more per household.

Heavy technology users are also twice as likely as non-users to have better sales processes in place, the study found.

“Technology has transformed the insurance industry for both buyers and sellers,” says Velocify CEO and president Nick Hedges. “Our goal with this study was to uncover the technologies that will help agencies effectively grow and compete in this evolving marketplace. We are deeply invested in the success of our clients in the insurance industry, and we want to continue to offer new ways for them to rise above the competition.”

“The results of this survey have confirmed what we see in the industry every day,” adds Laird Rixford, president of ITC. “Agencies who commit themselves to adopt and then actually use technology are successful. Consumers have high expectations of the companies they do business with.

For an agency to have success today and continued success in the future, they need to invest in technology throughout their organization.” Among the study’s other findings: • Agencies with significant revenue growth were 34% more likely to plan increased technology investments than agencies with shrinking revenues.

• Direct-to-consumer agencies were 26% more likely than independent agencies to plan increased technology investments.

• Agencies with 100 or more employees were an average of 93% more likely to heavily use technology than those with 10 or fewer employees.

According to the study, some specific technology solutions seemed especially useful in boosting policy growth: • Agencies that used lead management software sold

POLICY GROWTH PER PRODUCER 50% 40% 30% 20% 10% 0%

Lead man- Automated Compara- Agency Marketing agement dialer tive rater manage- automament tion system

CRM

Velocify and ITC

POLICY GROWTH PER HOUSEHOLD 16%

12%

8%

4%

0%

Lead management

CRM

Marketing Automated Comparative automation dialer rater Velocify and ITC

43% more policies per producer and 13% more per household.

• Agencies using automated dialers sold 43% more policies per producer and 7% more per household.

• Agencies using CRM software saw a 15% increase in policies per producer and an 11% increase in policies per household.

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TECHNOLOGY DIRECTORY SUMMER 2015 PROGRAM DIRECTORY CUSTOMER RELATIONSHIP MANAGEMENT SOFTWARE

58

PAGE

SOFTWARE

QUOTERS & RATERS

PAGE

SOFTWARE

PAGE

59

ABS

61

Applied Rater

62

Aptean Pivotal CRM

59

AccuAgency Management System

61

Accenture

63

Base CRM

59

Agency Impact

61

AgencyPortal®

63

Blue Camroo

59

Agency Master

61

BindExpress Suite

63

Bpm’online

59

Agency Matrix

61

Blue Cod Technologies

63

C2CRM

59

AgencyIntel

61

Collabor8

63

CampaignerCRM™

59

AgencyPro

61

Comtec

63

Claritysoft

59

Agent & Broker Software (ABS)

61

Consis International

63

Click HQ

59

Agent Intelligence

61

EIS Suite Insurance Solution

63

Commerce CRM

59

AgentCubed

61

Epic-Premier

63

GoldMine

59

AMS 360 l Vertafore Agency Platform

61

GameChanger®

63

Gold-Vision CRM

59

Applied Epic

61

Garvin-Allen

63

Highrise

59

Applied TAM

61

Global IQX Platform

63

InfoFlo

59

Applied DORIS

61

Instec

63

Infor

59

AMS 360 l Vertafore Agency Platform

61

Insurance Core Systems

63

Infusionsoft

59

eAgent

61

Insurance Noodle

63

Insightly

59

Ebix

61

Insurity

63

Leadmaster

59

Eclipse

61

Integrated Insurance Platform

64

Maximizer

59

EZLynx

61

NetRate

64

Microsoft

59

Gen4Systems

62

Oracle for Insurance

64

Mothernode

60

Green Wave

62

PCIS

64

NetSuite

60

HawkSoft

62

Priority Data

64

Nimble

60

IMS I

62

Ravello Solutions

64

Nutshell

60

Insly

62

Sapiens

64

Oncontact

60

InsurancePro

62

Silverline Software

64

Oracle

60

Jenesis Software

62

Solartis Insure On-Demand

64

Pipedrive

60

Newton

62

Stingray System

64

PipelineDeals

60

Nexsure Agency Management

62

Tata Consultancy Services Limited

64

Pipeliner

60

Powerquote

62

TIA

64

Prophet

60

QQ Catalyst, QQ Evolution

62

Tropics Breeze

64

Sage

60

sigXP

62

Salesforce

60

Strategic Insurance Software

62

Vikaran InsuranceExpert

64

Salesnet

60

The Agency Advantage

62

Xuber Insurance Software

64

SalesNexus

60

VRC Insurance Systems

62

Zags Suite

64

SAP

60

Soffront

60

SugarCRM

60

WORK[etc]

60

Workbooks CRM

60

Zoho CRM

60

Act!

INDEX

AGENCY MANAGEMENT SYSTEMS

www.ibamag.com

TECHNOLOGY DIRECTORY SUMMER 2015

SAAS OR ON-PREMISE SOLUTION SAAS

ON-PREMISE SOLUTION

MOBILE ACCESSIBLE

EMAIL MARKETING

DATA CAP PER USER

UNLIMITED

DATA IMPORT FORMAT

Act! Swiftpage ACT! LLC 866-873-2006 www.act.com

.csv

Aptean Pivotal CRM 855-411-2783 www.aptean.com

.csv

Base CRM Base 855-964-1010 www.getbase.com

.csv, .xls, .txt

Blue Camroo BlueCamroo Inc. www.bluecamroo.com

.csv

Bpm’online Bpm’online sales 617-765-7997 www.bpmonline.com

.csv, .xls

C2CRM Clear C2 Inc. 972-304-7100 www.clearc2.com

.csv, .xls

CampaignerCRM™ Campaigner 855-EASY-CRM www.campaignercrm.com

.csv, .xls

Claritysoft 888-838-7487 www.claritysoft.com

.csv, .xls

Click HQ Click Innovation Ltd +44 0845 88 00 203 www.clickhq.co.uk

.csv

Commerce CRM Commence Corporation 877-COMMENCE 732-380-1750 www.commence.com

.csv, .xls, .txt

GoldMine HEAT Software USA Inc. 800-443-5457 www.goldmine.com

.csv

Gold-Vision CRM Gold-Vision 201-793-3946 www.gold-vision.com

.csv, .xls, .txt

Highrise www.highrisehq.com

.csv, .xls

InfoFlo Carmel Vision Inc. 646-465-7676 855-INFOFLO www.carmelvision.com

.csv

Infor 646-336-1700 866-244-5479 www.infor.com

.csv, .xls, .txt

Infusionsoft 866-800-0004 www.infusionsoft.com

.csv

Insightly Insightly Inc. 888-999-4039 www.insightly.com

.csv, .xls

Leadmaster LeadMaster, LLC 800-699-4164 www.leadmaster.com

.csv

Maximizer Maximizer Software Inc. 604-601-8000 www.maximizer.com

.csv, .xls, .txt

Microsoft 888-477-7989 www.microsoft.com

.csv, .xls

www.ibamag.com

58-64_CRM Directory_Updated 3-SUBBED.indd 59

EMAIL INTEGRATIONS

ANALYTICS

FREE TRIAL VERSION

CUSTOMER RELATIONSHIP MANAGEMENT

59

26/06/2015 3:40:31 AM

TECHNOLOGY DIRECTORY SUMMER 2015 PROGRAM DIRECTORY

SAAS OR ON-PREMISE SOLUTION SAAS

CUSTOMER RELATIONSHIP MANAGEMENT

60

58-64_CRM Directory_Updated 3-SUBBED.indd 60

ON-PREMISE SOLUTION

MOBILE ACCESSIBLE

EMAIL MARKETING

DATA CAP PER USER

UNLIMITED

DATA IMPORT FORMAT

Mothernode Mothernode, LCC 214-960-4581 www.mothernode.com

.csv, .xls

NetSuite NetSuite Inc. 877-638-7848 www.netsuite.com

.csv

Nimble info@nimble.com www.nimble.com

.csv

Nutshell Nutshell, Inc. 888-336-8808 www.nutshell.com

.csv

Oncontact WorkWise LLC 800-490-9010 www.oncontact.com

.csv, .xls

Oracle 800-392-2999 www.oracle.com

.csv, .xls, .txt

Pipedrive Pipedrive Inc. 855-979-1414 www.pipedrive.com

.csv, .xls

PipelineDeals 866-702-7303 www.pipelinedeals.com

.csv, .xls

Pipeliner Pipeliner Sales Inc. 888-843-6699 www.pipelinersales.com

.csv

Prophet Avidian Technologies Inc. 800-399-8980 www.avidian.com

.csv

Sage Sage Software Inc. 866-996-7243 www.na.sage.com

.csv, .xls, .txt

Salesforce Salesforce.com Inc. 855-548-8295 www.salesforce.com

.csv

Salesnet 866-732-8632 www.salesnet.com

.csv, .xls, .txt

SalesNexus SalesNexus LLC 800-862-0134 713-862-0001 www.salesnexus.com

.csv, .xls

SAP 800-872-1727 www.sap.com

.csv, .xls, .txt

Soffront Soffront Software Inc. 800-SOFFRONT www.soffront.com

.csv, .xls, .txt

SugarCRM SugarCRM Inc. 408-454-6900 www.sugarcrm.com

.csv

WORK[etc] WORKetc Pty Ltd. 800-322-7860 www.worketc.com

.csv, .xls, .txt

Workbooks CRM Workbooks.com +44 0118 303 0100 www.workbooks.com

.csv

Zoho CRM 888-204-3539 Zoho Corporation Pvt. Ltd. www.zoho.com

.csv

EMAIL INTEGRATIONS

ANALYTICS

FREE TRIAL VERSION

www.ibamag.com

26/06/2015 3:40:43 AM

TECHNOLOGY DIRECTORY SUMMER 2015

CLAIMS TRACKING

PERSONAL LINES SUPPORT

COMMERCIAL LINES SUPPORT

COMMISSION RECONCILIATION

DIRECT BILL

MOBILE ACCESS

WEB BASED

OPERATIONAL ACCOUNTING

COMPARATIVE RATES INTEGRATION

FILLABLE ACORD FORMS

ABS Agency Business Systems, Inc. 503-659-6752 www.agencybusys.com AccuAgency Management System AccuAuto Assurance Systems Inc. 800-229-2009 www.accuauto.net Agency Impact Agency Impact Inc. 800-405-4049 www.agencyimpact.com

AGENCY MANAGEMENT SYSTEMS

Agency Master Instech Software 888-547-9321 www.agencymaster.net Agency Matrix Agency Matrix, LLC 800-45-MATRIX www.agencymatrix.com AgencyIntel 800-898-7212 www.agencyintel.com AgencyPro Agency Software Inc. 800-342-7327 agencysoftware.com Agent & Broker Software (ABS) Terrace速 Software Inc. 415-848-7300 www.terrace.com Agent Intelligence Online Database Solutions 888-689-3823 905-943-4448 www.onlinedatabase solutions.com AgentCubed 877-424 5888 www.agentcubed.com AMS 360 l Vertafore Agency Platform Vertafore, Inc. 800-444-4813 www.vertafore.com Applied Epic Applied Systems, Inc. 708-534-5575 800-786-1362 www.appliedsystems.com Applied TAM Applied Systems, Inc. 708-534-5575 800-786-1362 www.appliedsystems.com Applied DORIS Applied Systems, Inc. 708-534-5575 800-786-1362 www.appliedsystems.comw Aspire Impowersoft, Inc. 866-574-0008 www.impowersoft.com eAgent 877-676-6067 www.eagent.net Ebix 404-418-9861 www.ebix.com Eclipse North American Software Associates, Inc. (320) 352 1801 www.nasasoft.com EZLynx 877-932-2382 www.ezlynx.com

www.ibamag.com

61

TECHNOLOGY DIRECTORY SUMMER 2015 PROGRAM DIRECTORY

CLAIMS TRACKING

PERSONAL LINES SUPPORT

COMMERCIAL LINES SUPPORT

COMMISSION RECONCILIATION

DIRECT BILL

MOBILE ACCESS

WEB BASED

OPERATIONAL ACCOUNTING

COMPARATIVE RATES INTEGRATION

FILLABLE ACORD FORMS

Gen4Systems Gen4 Systems, LLC 800-689-9390 www.gen4systems.com

AGENCY MANAGEMENT SYSTEMS

Green Wave SPI Software Solutions Inc. 336-333-2889 www.spisoftware solutions.com HawkSoft HawkSoft Inc. 866-884-4680 www.hawksoftinc.com IMS I Xanatek 800-875-6033 www.xanatek.com Insly Insly Ltd. 800-440-4982 www.insly.com InsurancePro Insurance Technologies Corporation 800-383-3482 www.getitc.com Jenesis Software Jenesis Software Inc. 844-770-0016 828-245-1171 www.jenesis software.com Newton Agency Systems 800-990-1983 www.agency systems.com Nexsure Agency Management XDimensional Technologies Inc. 800-789-2567 www.xdimensional.com www.nexsure.com Powerquote Quomation Insurance Services, Inc. 801-226-1395 www.quomation.com QQ Catalyst, QQ Evolution QQ Solutions Inc. 800-940-6600 www.qqsolutions.com sigXP Keal Technology 800-268-5325 www.keal.com Strategic Insurance Software 800-747-9273 www.sisware.com The Agency Advantage Advantage Information Systems, Inc. 800-833-5179 www.agency advantage.com VRC Insurance Systems VRC insurance Systems, Inc. 818-707-4295 www.vrcis.com

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WEB BASED

QUOTING

RATING

ISSUANCE

POLICY ADMINISTRATION

CLAIM MANAGEMENT

UNDERWRITING

BILLING

ANALYTICS

ISO FORMS

Accenture 312-842-5012 877-889-9009 www.accenture.com AgencyPortal速 Agencyport Software 866-539-6623 www.agencyport.com Applied Rater 402-218-1495 www.appliedsystems.com

QUOTERS & RATERS

BindExpress Suite SpeedBuilder Systems Inc. 803-227-0225 www.speedbuilder systems.com Blue Cod Technologies Blue Cod Technologies, Inc. 508-683-1700 bluecod.com Collabor8 Iter8 888-999-7107 www.iter8.com Comtec Comtec Ltd. 888-427 9536 +972 3 9201 666 www.comtecglobal.com Consis International, LLC 800-4-CONSIS www.consisint.com EIS Suite Insurance Solution EIS Group Properties, Ltd. 415-402-2622 www.exigen insurance.com Epic-Premier Epic-Premier Insurance Solutions, Inc. 888-999-7736 863-686-5110 www.epic-premier.com GameChanger速 Decision Research Corp.

800-836 6057 www.decision research.com Garvin-Allen 877-325-9062 www.garvin-allen.com Global IQX Platform Global IQX 646-774-2946 www.globaliqx.com Instec Insurance Information Technologies 630-955-9200 www.instec-corp.com Insurance Core Systems Terrace Software Inc. 941 -342-0077 www.focus technologies.net Insurance Noodle 888-466-8868 www.insurance noodle.com Insurity Insurity Inc. 866-476-2606 www.insurity.com

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WEB BASED

QUOTING

RATING

ISSUANCE

POLICY ADMINISTRATION

CLAIM MANAGEMENT

UNDERWRITING

BILLING

ANALYTICS

ISO FORMS

Integrated Insurance Platform MFXchange Holdings Inc. 866-639-6399 www.mfxfairfax.com

QUOTERS & RATERS

NetRate NetRate Systems 855-471 1657 www.netrate.com Oracle for Insurance Oracle 800-633-0738 www.oracle.com PCIS P&C Insurance Systems, Inc. 646-442-8827 www.pcisvision.com Priority Data 877-273-7774 www.prioritydata.com Ravello Solutions 678-578-5406 www.ravellosolutions.com Sapiens Sapiens International +972 3 790 2000 www.sapiens.com Silverline Software Silverline Software Inc. 478-953-9922 888-856-6388 www.silvervinesoftware.com Solartis Insure On-Demand Solartis Inc. 570-842-7094 www.solartis.com Stingray System Maximum Processing Inc. 866-674-7284 www.stingraysystem.com Tata Consultancy Services Limited 602-682-3500 www.tcs.com TIA TIA Technology +45 7022 7620 www.tiatechnology.com Tropics Breeze Tropics Software Technologies Inc. 941-955-1234 www.gotropics.com Vikaran InsuranceExpert Vikaran Solutions LLC 630-512-8800 www.vikaransolutions.com

Xuber Insurance Software www.xuber.com

Zags Suite Zags Inc. 817-307-3256 www.zags.info

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We built our company anticipating the

NEW NORMAL AND BEYOND.

In the new normal, the global economy becomes more complex every year. So do the risks. From Asia and Latin America to Europe and Australia, we have experienced specialists dedicated to your corner of the world. In fact, our global Industry Practice Group continues to develop new solutions across our product lines, so whether you’re insuring cargo, construction or crime, our coverage will be focused. www.ironshore.com

The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service.

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26/06/2015 3:45:22 AM

Expect big things in workers’ compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide.

For information call (877) 234-4450 or visit auw.com/us. Š2015 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

Insurance plans protected U.S. Patent No. 7,908,157.

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