IFC-01.indd 1
22/01/2016 7:41:17 AM
IFC-01.indd 2
22/01/2016 7:41:27 AM
Your gateway to contractors markets.
CONTRACTORS SOLUTIONS
Placing insurance for different contractors can be a daunting project. At Burns & Wilcox, our network of domestic and international carriers opens doors to the broadest range of markets. Since time is of the essence, we deliver quotes and binders fast. When it comes to finding solutions for every stage of construction, contact the wholesale broker with the tools to make the hard-to-place easy – Burns & Wilcox. 800.521.1918 | burnsandwilcox.com
Commercial | Professional | Personal | Brokerage | Binding | Risk Management Services
38245 Burns Commercial RSZ ad Insurance Business America APPROVED.indd 1 02-03_TOC-SUBBED.indd 3
8/13/15 10:55 AM 22/01/2016 7:11:11 AM
UPFRONT
EDITORIAL
A blast of heat
Q
uick – describe the past year in five words or less. How about ‘cold and nasty’? After all, the severe winter storms that buffeted the East Coast in January and February 2015 are still chilling insurance company balance sheets nearly a year later. You could also cite the frosty state of discourse on Capitol Hill, where standoffs on reform of terrorism, flood and health insurance have been all too common. Or perhaps ‘lukewarm and listless’? Like the slim profit margins of auto insurers as accidents increase and become more costly. Or the steady softening of the property and casualty market. And don’t forget the industry’s initial reaction to a spate of mergers and acquisitions that took the market by storm in late summer last year. But what about ‘hot’? Just plain ‘hot’? That’s how we like it – a warm burst of heat in the cold, drizzly winter that ends another year filled with chilling challenges for insurance professionals.
The common denominator is that each and every person on the Hot 100 list brought their A-game to the job – and then gave a little more
www.ibamag.com FEBRUARY 2016 EDITORIAL Senior Journalist Caitlin Bronson Journalists Ryan Smith Tim Garratt Donald Horne Olivia D’ Orazio Copy Editors Clare Alexander Dean Askin
CONTRIBUTORS Samantha Wright
ART & PRODUCTION Design Manager Daniel Williams Designer Joenel Salvador
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
Production Manager Alicia Salvati Traffic Manager Kay Valdez
EDITORIAL INQUIRIES caitlin.bronson@keymedia.com
SUBSCRIPTION INQUIRIES subscriptions@keymedia.com
ADVERTISING INQUIRIES
The team at Insurance Business America
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, London, Toronto, Sydney, Auckland, Manila
Insurance Business America is part of an international family of B2B publications and websites for the insurance industry INSURANCE BUSINESS CANADA john.mackenzie@kmimedia.ca T +1 416 644 874O
INSURANCE BUSINESS AUSTRALIA peter.smith@keymedia.com.au T +61 2 8437 47OO
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.
4 www.ibamag.com
04-05_Editorial-SUBBED.indd 4
22/01/2016 7:11:48 AM
No animals were harmed during the production of this advertisement
In our third annual Hot 100 list, Insurance Business America has recognized a bevy of industry figures from around the country who put their stamps on 2015. How did they make the list? They brought the heat! Some hit business home runs, reaching new revenue targets and experiencing impressive organic growth in a difficult environment. Others made bold moves, pulling out the stops on bigger-than-ever acquisitions. Some created new product lines for emerging industries such as drones. Still others became the center of national conversation with divisive advertising tactics. The common denominator is that each and every person on the Hot 100 list brought their A-game to the job – and then gave a little more. Our hope is that you’ll look over this list and feel inspired to make a little noise and implement the necessary changes to ensure the insurance sector continues basking in the high temperatures. We’re sure that with this level of talent, 2016 will be just as hot.
TH07
One network has more market access options for your agency.
Whether you are looking for a network, aggregator, cluster, or wholesaler, NETWORKED Insurance Agents is aptly named, staffed and uniquely designed with membership choices that make independent agents more profitable. Is your agency’s success limited by a lack of markets or staff? Our aggregation membership offers relevant, brand name carriers, plus a professional service team more than 100 strong to handle marketing, processing and policy support. Meanwhile, do what you do best: build relationships and generate new business. Could your agency better maximize profit-sharing opportunities? Consider our Direct Access Insurance Services cluster. Either way, only one NETWORK offers options from MARKET ACCESS to DIRECT ACCESS ensuring the best fit for your agency. No animals were harmed during the production of this advertisement
t e
One size does not fit all.
04-05_Editorial-SUBBED.indd TH0760 Networked Insurance5ad (8,25x10,875")-R15.indd 1
Call Jeremy Hermsmeyer at 530-274-6974 or visit networkedins.com/success for more information.
22/01/2016 7:11:54 AMPM 1/12/16 2:56
UPFRONT
STATISTICS
The year ahead
PRICING INCREASES AND DECREASES FOR 2016
The industry looks forward to 2016 and sees increasing challenges – and opportunities – on the horizon
Willis expects 10 lines to see pricing decreases in 2016, and only five to move in the right direction.
LINES EXPECTING DECREASES LAST YEAR was a challenging one for many in the insurance industry. Pricing remained negative in many areas of coverage and flat in others, while the global industry had to deal with a number of disasters. According to the Willis Marketplace Realities 2016 report, the market may continue to be challenging for some time. The annual report, which compiles lists
of different pricing data, predicts that only a handful of lines will see pricing increases over the early part of 2016. However, as traditional risks keep contracting, one market area expected to continue growing over the coming year is cyber insurance – 2016 could be the year cyber cements its place in the insurance landscape. As one of the few growing areas of risk, many in the industry hope it will.
ENERGY (DOWNSTREAM)
$350 to $400 million Limits of cyber insurance available in today’s market
$2 billion
20% to 30%
Current amount of annual cyber premiums
Frequency by which environmental claims rose last year
$671 billion
ACCELERATED SOFTENING
HEALTHCARE PROFESSIONAL
POLITICAL RISKS
SURETY
up to
up to
up to
5% 5% 5%
decrease decrease decrease
Amount of overall P&C policyholder surplus in 2015 Source: Willis Marketplace Realities 2016
QUARTERLY RESULTS SHOW HARD YEAR Recently released quarterly results from some of the world’s biggest players highlight how tough 2015 was for the industry.
AIG
Zurich
$213 million net loss
79% drop in net profit
Nationwide
Munich Re 35% profit fall
FIDUCIARY MARKET PRICING HOLDING STEADY Pricing in fiduciary liability has remained stable and should stay that way, even with increased activity in mergers and acquisitions. 12% 9% 5% 3% 1% 0%
$36 million operating loss, 42% drop in operating earnings
-1% -3% -5%
Hartford Financial Services Group
24% drop in core earnings
Allianz
15% profit dip
Sources: Nationwide, Munich Re, Zurich, Allianz, AIG, Hartford Financial Services Group
6
-9%
Companies with large stock concentrations in benefit plans
Companies without or with limited company stock (on excess layers)
ESOP-owned firms
Private and nonprofit entities
Overall
Source: Willis Marketplace Realities 2016
www.ibamag.com
06-07_Stats-SUBBED 3.indd 6
22/01/2016 7:55:01 AM
LINES EXPECTING INCREASES
EMPLOYEE BENEFITS (INSURED PLANS)
FIDELITY
TRADE CREDIT
CASUALTY
MARINE
PROPERTY TERRORISM AVIATION
up to
up to
up to
10%
5% 10% 10%
decrease decrease decrease
to
15%
up to
15%
decrease
10% to
20%
KIDNAP AND RANSOM
up to
up to
5% 5%
decrease
decrease
up to
8% EMPLOYEE BENEFITS (SELF-INSURED PLANS)
up to
5%
CYBER
ERRORS AND OMISSIONS
up to
up to
decrease
decrease
15% 20% Source: Willis Marketplace Realities 2016
PROPERTY REINSURANCE RATES CONTINUE FALL
PROPERTY LOSSES TRENDING DOWN Thanks to a benign two-year spell, losses in the property market are staying on a downward path.
Property reinsurance rates are expected keep decreasing in 2016 for a fourth consecutive year of decline.
$45 b $40 b
-4%
$35 b
-6%
$30 b
-8%
$25 b
-10%
$20 b
-12% $15 b -14% $10 b -16% $5 b
2013
2014 Overall insured property losses
2015 (first half) Insured NAT-CAT losses Source: Willis Marketplace Realities 2016
-18%
2013
2014
2015
2016 (estimated)
Source: Willis Marketplace Realities 2016
www.ibamag.com
06-07_Stats-SUBBED 3.indd 7
7
22/01/2016 7:12:31 AM
UPFRONT
HEAD TO HEAD
Should the ACA be applied to undocumented workers? The Affordable Care Act continues to be debated – and now some wonder if it should be extended to undocumented workers
Joseph Stringer
Janice Michaud Owner JM Insurance Service
Account executive United Business Insurance Agency
“The ACA is already broken from the insurance perspective. Thirty percent of the co-ops designated to administer the system have gone under. Costs are increasing 40% in some states. Adding undocumented – meaning illegal – workers will hasten its inevitable downfall. I don’t think illegal workers should be allowed any benefits. If they’re legally employed, paying taxes and premiums into the system, they should have the same health benefits any other employee has. The ACA was destined for failure from the beginning. It was designed to offer more services to more people for a lower premium with no regard to insurable underwriting.”
“Undocumented workers shouldn’t be allowed to buy insurance through the state or federal government exchanges. Much of the current vetting that takes place is geared to ensuring legal presence. This is a safeguard protecting American taxpayers and healthcare consumers, as well as those who are legally present. Our healthcare system is already bowing under the cost of overzealous distribution of benefits. Undocumented workers have access to employer coverage, government clinics, emergency rooms and insurance direct through the carrier. They don’t have the burden of the insurance mandate and penalty; this is a leg up for them. First, do no harm.”
“The Congressional Budget Office estimates the cost of the Obamacare subsidies to be around $1.4 billion per year for legal citizens. We’re spending more than $4 billion a year on medical care for another 11 million undocumented aliens. Extending subsidies to undocumented aliens should be done only as part of a comprehensive overhaul of immigration laws, the welfare system and how immigrants can become citizens. Stop the flow of illegals; have a welfare system that helps people become independent rather than supporting them indefinitely; and make it easier to become a citizen, pay taxes and help pay for the healthcare system they want to use.”
Broker Anderson Insurance Associates
Neal Biron
UNDOCUMENTED AND UNPROTECTED There are an estimated 12 million illegal immigrants in the US. Undocumented workers make up an estimated 5% of the American workforce. That’s a large number of uninsured people living in the US, and if Rep. Luis Gutierrez of Illinois has his way, all that would change. Gutierrez wants to expand the Affordable Care Act to cover undocumented workers. It’s an unpopular opinion, and one many insurance brokers don’t share. The issue, they say, is the system itself – the ACA already has a number of problems; adding the fickle issue of undocumented workers would only serve to further weaken the broken system.
8
www.ibamag.com
08-09_Head to Head-SUBBED.indd 8
22/01/2016 7:12:54 AM
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 08-09_Head to Head-SUBBED.indd 9
22/01/2016 7:13:00 AM
UPFRONT
NEWS ANALYSIS
The great cyber imbalance While more companies than ever carry cyber coverage, take-up rates vary widely among various industries, and limits are still lacking
THE SEEMINGLY unstoppable juggernaut of the cyber insurance market finished out 2015 in style. More than half of businesses in the US now carry some cyber coverage, and the segment is expected to triple in size to $7.5 billion by 2020. Yet a series of recent reports suggests this growth hasn’t been equal – or without its qualifications. For one thing, the 32% increase in cyber insurance purchases in 2014 was driven by only a few industries. According to Marsh Risk Management Research, the at-risk sectors of healthcare and education took
companies in that sector purchased standalone cyber insurance in 2014, up from 6% in 2013. This isn’t from lack of awareness – cyber risk tops the list of concerns for manufacturers, according to the 2015 Travelers Business Risk Index. Decision-makers simply are choosing not to purchase the coverage. Communications, media and technology is the second-most uninsured sector against cyber risk. Just 12% of companies bought a policy in 2014, barely shifting from the previous year’s take-up rate of 11%. Surprisingly, the retail/wholesale market is also largely uninsured – only 18% of companies
“The traditional cyber insurance markets run out of capacity between $200 and $300 million” Kevin Kalinich, Aon Risk Solutions the lead in terms of take-up rate. Among healthcare organizations, 50% now carry coverage; 32% of educational institutions do so as well. Hospitality and gaming, and the services industry, also did a great deal of buying in 2014. This helped the US economy reach its overall rate of coverage. But most industries still boast dismal take-up rates. According to the same Marsh report, five markets are particularly untapped. By far, manufacturing is the most uninsured against this risk. Just 8% of
10
carried coverage in 2014. This industry is one especially vulnerable to cyber attacks because of the large quantity of customer credit-card information it collects. High-profile hacks, such as those against Target and Home Depot, have driven up retail’s risk profile, which has made affordable coverage with appropriate limits difficult to find. Rounding out the top five most uninsured industries are power/utilities and financial institutions, both of which have a 21% take-up rate. That’s up from 14% and 17%,
respectively. Robert Hartwig, president of the Insurance Information Institute, says that while insurance professionals certainly have a ways to go toward properly insuring these lagging industries, the numbers are encouraging in one respect. “Every industry is increasing their take-up rate by a substantial percentage,” he says. “The numbers are low, but we expect them to increase rapidly. This is one of the bold new frontiers for insurers.” However, closer analysis reveals that even those companies insured against cyber risk might not be carrying enough coverage. According to the Ponemon Institute, most of the costs associated with a data breach will total less than $1 million. However, there’s a 5% chance the breach will cost a company $20 million or more – and most firms aren’t
www.ibamag.com
10-11_News Analysis-SUBBED.indd 10
22/01/2016 7:13:26 AM
INDUSTRIES MOST UNINSURED AGAINST CYBER RISK While all major industries have increased purchases of cyber coverage, five markets still trail significantly behind in take-up rates, according to Marsh.
8% Manufacturing
12% Communications, media and technology
18% Retail/wholesale
21% Power/utilities
21% Financial institutions 0%
5%
10%
15%
20%
25%
Source: Marsh Risk Management Research
insured for that kind of loss. While cost has a great deal to do with that lack of coverage, another significant reason companies aren’t buying higher limits is that
because the traditional cyber insurance markets run out of capacity between $200 and $300 million,” he says. In 2015, AIG CEO Peter Hancock made
“Every industry is increasing their take-up rate by a substantial percentage. This is one of the bold new frontiers for insurers” Robert Hartwig, Insurance Information Institute they’re just not available. According to Kevin Kalinich, leader of the global cyber risk practice for Aon Risk Solutions (which sponsored the Ponemon study), it’s exceedingly difficult to find policies with adequate limits. “We are working with alternative markets
headlines by suggesting the amount of cyber liability coverage offered by carriers will only cover a fraction of the damages that occur during and after a data breach. “The largest coverage I’m aware of is for a bank that has about $400 million in coverage, which is very small when you think about
it,” Hancock said. “When you compare it to the amount of capacity that’s available for a complex chemical plant, refinery [or] offshore oil platform, the numbers are much, much higher.” Hancock and others are hopeful, however, that as awareness of cyber risk increases, underwriters will start offering higher policy limits. “The willingness of insurers and by others in the industry to provide greater capacity will increase with greater comfort in the maturity of the countermeasures,” Hancock said. Jack Elliott-Frey, a broker with SafeOnline, believes that as more businesses accept the costly reality of cyber risk, insurers will start offering higher limits. “There is a clear picture being painted here,” he says. “Businesses are unaware of the cyber threat, which leads to low demand for cyber insurance, with insurers offering generalized, inadequate policies for the small number of businesses that are requesting them.”
www.ibamag.com
10-11_News Analysis-SUBBED.indd 11
11
22/01/2016 7:13:34 AM
UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
Arthur J. Gallagher & Co.
Brown Hobbs & McMurray Insurance
BHM is a retail insurance broker providing commercial insurance in the Midwest
Integro Insurance Brokers Holdings
Entertainment Insurance Partners
EIP provides insurance and risk management services to artists, promoters, venues and productions across the world
Kaiser Permanente
Group Health Cooperative
Kaiser will pay $1.8 billion for the health insurer, which also provides healthcare services
Lockton Cos.
VIS Corretora de Seguros e Beneficios
The Sao Paulo-based brokerage gives Lockton a larger presence in the growing Brazilian market
Risk Strategies Co.
Re-Solutions Intermediaries
The Minneapolis-based specialist helps healthcare organizations manage risk
Ryan Specialty Group
Hunter George & Partners
The deal will expand RSG’s London footprint, particularly in mergers and acquisitions
Zurich Insurance
Rural Community Insurance Services
Zurich will pay up to $1.05 billion for the US agriculture and crop insurer
XL Catlin introduces product for financial institutions
XL Catlin’s Global Professional business unit is releasing a suite of financial institution bond insurance policies designed to protect against employee dishonesty, burglary, robbery, forgery and other crimes. Among other risks, the new policies include coverage for fidelity, on-premises and intransit loss, and forgery or alteration. The tailored bond coverage is targeted toward stockbrokers, investment bankers and managers, mortgage banks and finance companies, commercial bankers and savings banks, and insurance companies.
Wells Fargo looks to expand insurance division with brokerage acquisitions
Wells Fargo is hoping to expand its presence in the insurance sector with a wave of brokerage mergers and acquisitions. The bank had abandoned its plans to acquire more brokerages years ago when it became clear that its existing businesses were still not fully integrated into the company. Laura Schupbach, executive vice president and head of Wells Fargo Insurance Services USA, said the company chose to “hit the pause button” after inconsistencies among technology platforms and insurer contracts began to slow Wells Fargo’s 2,500-person brokerage and consulting unit. Now, Schupbach says the bank has solved those problems and “upgraded talent,” and is looking to renew efforts to expand. Wells Fargo plans to look specifically for larger brokerages ($20 to $50 million on the low end), as they are “used to serving clients with more sophisticated needs.” Schupbach said the company is especially interested in operations working with healthcare, hospitals and agriculture.
12
Technology insurer launches cyber product for IT risks
OneBeacon Technology Insurance has released a new offering designed to cover information technology risks. Information Technology Solutions – Complete is a modular technology professional liability product intended to address technology companies’ exposure to cybersecurity and communication liability risks, and includes customizable options from first- and thirdparty coverage offerings. It will eventually be written on an admitted basis in all states, with maximum coverage limits of up to $10 million.
www.ibamag.com
12-13_Intelligence-SUBBED.indd 12
22/01/2016 7:14:17 AM
PEOPLE Insurer launches product for craft breweries and distilleries Philadelphia Insurance Companies has introduced a collection of customized coverages for the craft brewery and distilleries industry, which includes property, general liability, product recall, contamination and adulteration and equipment breakdown, automobile and liquor liability, among others. Specialized coverage is also available for breweries and distilleries with tasting rooms, restaurants and special events.
Mass shootings prompt active shooter coverage
Gun violence in the US has become so prevalent that several insurance companies are looking to provide policies to cover active shootings. Offered through Lloyd’s of London affiliate Beazley, the policy insures businesses for up to $5 million and offers additional coverage outside of workers’ compensation policies. It covers companies if they are found not to have taken needed precautions to prevent gun rampages. It also covers “on the scene” costs of an attack, as well as counseling for victims of the incident.
Chubb adds cyberbullying to homeowner’s policy
Chubb has added a new benefit to its home insurance policies for high-net-worth clients – coverage for cyberbullying. Up to £50,000 will be available for services including counseling, temporary relocation, public relations consultants and cybersecurity professionals for customers who suffer from cyberbullying, which the carrier defines as three or more acts by the same person or group to harass, threaten or intimidate a policyholder. The service is primarily aimed at children, one in five of whom are now reported to be victims of cyberbullying.
NAME
LEAVING
JOINING
NEW POSITION
Wayne Bates
Canopius US Insurance
HW Kaufman Financial Group
Corporate senior vice president
Andrew Brand
QBE Insurance Group
Tokio Marine Kiln Group
Liability underwriter
Jodie Braner
Hays Cos.
Willis Group Holdings
Producer, human capital practice
Jon Calverley
Cooper Gay
JLT Re
Director, program and facility capabilities
Tracy Clausen
Hays Cos.
Willis Group Holdings
Account executive, human capital practice
Tim Cooke
Marsh
Allied World Assurance Co.
Vice president and regional head of marine
David Foster
XL Group
Pioneer Underwriters
Chief financial officer
Matthew Gallagher
AIG
Everest Re Group
Director and head, East region, executive solutions group
Jarrod Hill
N/A
ACE
Head of international property business
Kristen H. Martin
N/A
Utica Mutual Insurance Co.
Chief operating officer
Keerome Maybury
Montpelier Re
Novae Group
Senior associate underwriter
Niranjan Nathan
Swiss Re
Ernst & Young
Partner, insurance practice
Robert Schneider
Tatum
Prime Risk Partners
Executive vice president and chief financial officer
Gary Shaughnessy
N/A
Zurich Insurance Group
Chief executive officer, global life
Andrew Williamson
N/A
ACE Ltd.
Head of international marine business
ACE bolsters trade credit unit
ACE Group has announced the appointment of Julian Hudson as the new head of trade credit for ACE Global Markets. Hudson will be tasked with the continued development, profitability and growth of the company’s global trade credit arm. The appointment comes in the wake of ACE’s expansion of its political risk and credit division to Japan. Hudson has been with ACE since 2007, and has a background in product development and distribution.
MGA names new head of nonprofits
MGA and program administrator NIF Group has appointed industry veteran Vince Terlaje to fill the role of national director of the MGA’s nonprofit social service program while maintaining his current position of president of NIF Pacific. Terlaje, who joined NIF in 2009, brings several years of experience to the role. In addition to managing underwriting for the nonprofit/social services division of Safeco Insurance Company, he also served as assistant director of product development and territory underwriting director for the Northwest region of Safeco Business Insurance.
www.ibamag.com
12-13_Intelligence-SUBBED.indd 13
13
22/01/2016 7:14:24 AM
UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email insurancebusiness@kmimedia.ca
Diversity is key to long-term success It’s not only important to diversify your business, writes Eddie Besaw, but also to hire a wide range of employees LET’S TALK about diversity. Through my travels, I’ve met many people from various ethnicities, ages and socioeconomic backgrounds. This has given me a great understanding of how diversity can play an important role in your company’s successes and failures. I’m an excellent case study for the importance of diversity in your business success. I grew up in a conservative, predominantly white part of north central Oregon. My understanding of diversity had to grow by leaps and bounds when I entered the industry. For most of my life, all I knew was the white, small-town, conservative experience – which of course meant I could relate mostly to other white, small-town, conservative people. I could either choose to market to white, small-town, conservative people – effectively limiting my business reach – or I could make connections with people of various ethnicities, genders and economic backgrounds, and learn how to market and work with just about anyone. I chose the latter. In doing this, I also made the decision to build my practice with employees from all walks of life. This has provided my business with many advantages, and it can help your business as well. Let’s talk about race, since that’s generally what comes to mind when people say ‘diversity.’ As I mentioned, my past life experience was built out of a white, small-town, conservative neighborhood.
14
In my town, we had two African-American families, a handful of Samoan-American families and two Native American reservations nearby. Visible minorities weren’t commonplace. While we shared some similar trials, I could never understand the racism, bias or struggles any of these families might
probably why your clients work with you in the first place. Aside from your service, they probably like you based on some common ground you share – be it race, gender, age, or possibly that you’re both veterans or grew up in the same neighborhood. In the end, that client chose you for something you are or something you represent. It only makes sense, then, to make your business as diverse as possible. The return on the so-called investment of diversity is a stronger and more profitable business that can relate to a diverse set of clients. I’m sure you’ve heard the saying “the riches are in the niches,” but you should think of diversity in your business as a way to appeal to multiple niches. When your business appeals to a broader set of people, the result is a broader client base from which you can pull. And it’s that broad client base that affords you the ability to build a more successful long-term business. Just look at the makeup of the United States – our population is becoming much more diverse. For your business’s long-term
“When your business is able to appeal to a broader set of people, the result is a broader client base from which you can pull” have endured in their lives. How can I expect to offer solutions tailored to these people if I don’t understand their cultures or past experiences? The truth is, I can’t. However, if I employ a Native American agent, he or she might understand the challenges that come along with growing up on a reservation, for example. There’s no way I could ever imagine what that’s like – and, quite frankly, I’d never want to be so disingenuous to try. I find it not only beneficial to hire diversely, but imperative to my business’s long-term success. Sure, I could hire only white, small-town, conservative types, and conversely market to that group of people. But not only is this small-minded, it’s also extremely limiting to my practice in the long run. Most of us prefer to work with and be around like-minded people, which is
success, it makes sense to reflect this by hiring a diverse range of employees. It means you will be able to relate to people from a broad range of ethnicities, genders and socioeconomic backgrounds. In the end, deciding to either hire diversely or stick to what you know is up to you. I’ve made the decision to hire diversely, and I know my business will be here for the long haul, in part because of it. I feel it makes my business stronger and better suited to handle the changing makeup and economic concerns of our existing and future clients. Eddie Besaw is the founder and CEO of Timberline Wealth Strategies. He and his firm provide solutions to pre-retirees and retirees, including retirement income, Medicare, social security and legacy planning.
www.ibamag.com
14-15_Opinion-SUBBED.indd 14
22/01/2016 7:25:48 AM
Beyond Security®
“It Takes Discipline”
Marty Hacala Fitness Enthusiast General Star President & CEO
“Rolling out of bed at 5am every morning to work out requires discipline. It’s my way of getting the very most out of my busy day. “At General Star, we strive to get the very most out of our wholesale broker relationships. As a member of the Berkshire Hathaway family of companies, our financial strength is unsurpassed. But it’s our disciplined approach to building and maintaining profitable partnerships with a select group of brokers that drives us. “Discipline: Whether sticking with an early morning exercise regimen or standing firm with a limited number of valuable wholesale broker relationships, it remains the cornerstone of our success.” To locate the General Star broker nearest you, visit our website at www.generalstar.com.
© 2015 General Star National Insurance Company is licensed in the District of Columbia, Puerto Rico and all states. General Star National Insurance Company has its principal place of business in Stamford, CT and operates under NAIC Number 0031-11967. Insurance is placed with General Star National Insurance Company by licensed producers. General Star Indemnity Company is an eligible surplus lines insurer in all states, the District of Columbia, Puerto Rico, and the Virgin Islands. It has the status as an unlicensed insurer in California and operates under NAIC Number 0031-37362. Insurance is placed with the General Star Indemnity Company by licensed producers and, for risk that qualify, by licensed surplus lines brokers. Atlanta 404 239 6777
Chicago 312 267 8600
A.M. Best A++ XV
14-15_Opinion-SUBBED.indd 15
Los Angeles 213 630 1930
S&P AA+
New York 212 859 3950
Stamford 203 328 5700
A Berkshire Hathaway Company
22/01/2016 7:25:54 AM
UPFRONT
TECHNOLOGY UPDATE NEWS BRIEFS Telematics are changing driving habits A new survey conducted by the Insurance Research Council [IRC] found that 56% of drivers who employ telematics have adjusted their driving habits. Although 38% indicated their modifications were minor, 18% said they made “significant changes” to driving habits. “While we can’t say with certainty that the changes drivers make are always for the better, or whether beneficial changes that are made become permanent, we can confidently say that the introduction and use of telematics technology is a move in the right direction,” said Elizabeth Sprinkel, the IRC’s senior vice president.
Digital insurance distribution comes to China A new alliance will see the establishment of a nationwide digital insurance company in the booming Chinese market. Global insurer Allianz has teamed up with Chinese Internet search giant Baidu and Asian investor Hillhouse Capital to distribute online insurance solutions catering to the travel, e-commerce, Internet finance, shortterm health, lifestyle and potentially the motor insurance markets in China. “With the speed of innovation taking place, we will see the quick disruption of traditional models. Allianz and its partners are at the forefront of this mega trend,” said George Sartorel, CEO of Allianz Asia Pacific.
Online insurance site investigated for fraud Online HR platform Zenefits is under fire for allegedly permitting salespeople in at least seven states to misrepresent
16
themselves as insurance agents, according to the Washington State Office of the Insurance Commissioner. One primary charge revolves around the possibility that Zenefits allowed unlicensed brokers to sell health insurance products. If verified, the violation may be considered a Class B felony, which carries a $20,000 fine and a 10-year maximum prison sentence.
London poised to take the lead in insurance tech At a seminar hosted by Lloyd’s of London, chairman John Nelson said the UK capital’s combination of insurance and financial services, together with “a rapidly expanding tech sector rivaling Silicon Valley,” could see London become a world leader in technological innovation. Justin Emrich, CIO of underwriter Atrium, added there “is no doubt” the insurance market will be affected by the growth of technology. He added that it’s critical for the industry to embrace new ways of doing business and to offer tech-based solutions for clients.
Brokers overlooking vulnerable industry
According to Marsh Risk Management Research, manufacturing is the industry most uninsured against cyber risk – just 8% of companies purchased stand-alone cyber insurance in 2014. “Brokers need to understand that while so much of the cyber conversation focuses on securing data, there are much more significant risks for [manufacturing] companies,” said Jeremy Barnett, senior vice president of marketing at NAS Insurance. “These companies use automated systems to run very complicated processes, and something like a pipeline or power grid failure, for example, could have a disastrous effect and be covered by components of a cyber policy.”
Earning revenue without drivers An industry expert suggests possible paths to follow if – or when – standard auto coverage becomes obsolete Insurance agents and brokers who feel that autonomous vehicles can wait to be addressed may want to reconsider, as some insiders believe the shift has already begun. “In the US, personal auto underwriting has not made money once in the last five years in the industry as a whole,” says Joe Schneider, director at KPMG Corporate Finance in Chicago. “The commercial auto side has made money once in the same timeframe.” Traditional players should already be engaging in introspective analysis based on these recent trends, he argues. “It’s not as if people are jumping off from this huge cash cow business. What they’re actually doing is having trouble making money in a normal environment,” he says. “So how are they going to make money in a new normal environment?” He foresees two possibilities for auto insurers: adapt to the market opportunities that driverless cars will create, or find profit elsewhere. That deliberation will be necessary, though, since driverless cars will not only result in a “shrinking premium pie,” but also potentially fewer coverages within that pie. Those who choose to adapt may find a niche in commercial auto if drivers begin to abandon personal vehicles in favor of on-demand driverless car services. Otherwise, they might concentrate their efforts on manufacturers. “There’s also product liability – consumers may say, ‘OK, my autonomous vehicle made
www.ibamag.com
16-17_Tech Update-SUBBED.indd 16
22/01/2016 7:26:34 AM
a wrong left-hand turn, so I need to go back to the original equipment manufacturer or software manufacturer,” Schneider says. Those who hope to remain in auto should look to partner with the companies that are developing this technology, he suggests. “That role could be a situation where you buy a car and the insurance company is partnered with its manufacturer, so all the insurance premiums go to that insurance carrier,” he says. “Or maybe the insurance carrier acts as a servicing agent for certain parts of a policy for somebody else.” The other option is that insurers will need to expand into other business sectors “that aren’t fully insurance-related, but may crossover,”
“It’s not as if people are jumping off from this huge cash-cow business” such as heavy data analytics. Schneider encourages his clients to invest in nontraditional sources. “There are companies in the States that are investing in different distribution models, for example, because they know from an auto side that it’s going to be really hard,” he says. More than anything else, however, Schneider says the industry is now “inextricably linked” to the fast-paced innovation occurring in Silicon Valley, and failing to respond will result in entities “burning through a lot of money.” “You really are heading toward becoming Kodak if you don’t do something about it,” he says. “Doing nothing is absolutely not an option.”
Q&A
David Hollander Principal and global insurance practice advisory leader ERNST & YOUNG
Fast fact Hollander has more than three decades of experience working in and advising the insurance industry; he joined Ernst & Young in his current role in 2011
Insurance and technology: 2016 and beyond What interesting trends in technology will the insurance industry see in 2016? The sharing economy creates new opportunities. Technology is rippling through product invention, new entrants coming in, and continued major investments by our carrier clients in streamlining their back offices and making sure they’re positioned to interact with customers – and their brokers, agents and even their own employees – in a very different way.
What do you consider the most exciting technological developments on the horizon? One is the use of software robotics to help clients automate repetitive tasks. If you can describe the rules that [they] should follow, you can have these software robots processing transactions on your behalf 24 hours a day, taking people out of menial roles and allowing folks to focus on more analytical, higher value-added roles, and/or taking costs out. The second one is the use of ... cognitive computing for assisting consumers and others with the sales and service of insurance. There’s a segment of the population … that would prefer an interaction in real time, any time they want it, and we’re finding that in the small commercial space, and in certain service activities, many carriers [are] looking very hard at the whole use of cognitive computing robo-advice for sales activities. That will only increase as the millennial population ages, matures and gets to a business-owning age, which is pretty much now. I’d say the third major category is devices that capture data broadly. If I really understand, much more granularly, not just the driving patterns, but the health patterns of people, the health patterns of buildings, the care you provide to your home or you don’t provide to your home from a security perspective, the nature of pricing insurance and the availability of insurance will be very different. We think bundling is a technique you’re going to see more and more of – one policy for every one of your insurance needs. It really is an exciting world.
How important is it for brokers to be keeping pace with and adopting new and emerging technologies? I’d say there’s a broader theme for the brokers. It’s what happens when your end customer – be it a business or an individual, depending on the line of business – what happens when they begin to know more about their underlying risk than you do, because of the data that’s available. It changes how the product needs to be bought and packaged and sold. Brokers and carriers generally need to be shifting to be health, wealth and risk advisors, not [dealing with] risk transfer solely.
www.ibamag.com
16-17_Tech Update-SUBBED.indd 17
17
22/01/2016 7:26:53 AM
UPFRONT
WORKERS’ COMP UPDATE
Overlooked by workers’ comp Advocates call for modernizing workers’ comp to more adequately cover contract employees
workers’ comp would be “portable,” so workers could take them from job to job. The coalition is pushing for discussion among lawmakers on how this would best be accomplished, thus bypassing litigation that has already arisen from workers with companies, such as Lyft and Instacart, that rely on contractors. The debate over employee status, and consequent eligibility for workers’ compen-
“Another new model is needed to support new ways of work”
A group of labor leaders is calling for change in the way the workers’ compensation system applies to contract workers. In a letter sent to US lawmakers in November, a group of executives and public policy experts from companies including Lyft, Handy and Etsy asked for new contract-worker protections, including workers’ compensation benefits when contract workers are injured. As many as 53 million Americans are now selfemployed; the letter’s authors argue the benefits system hasn’t kept up with “rapid” changes.
NEWS BRIEFS
“Traditionally, benefits and protections such as workers’ compensation, unemployment insurance, paid time off, retirement savings and training/development have been, largely or partly, components of a worker’s employment relationship with an employer,” the letter reads. “The Affordable Care Act has disrupted that model, providing more independent workers a different avenue of access to health insurance. Another new model is needed to support new ways of work.” Under the proposed model, benefits such as
Lawsuit rattles Florida’s workers comp system
Florida’s Supreme Court has accepted a case expected to renew focus on the ‘core’ of the state’s workers’ compensation system – the exclusive remedy provision. The court will evaluate whether the state’s system is sufficient in the wake of 2003 legislation eliminating permanent partial disability benefits. Daniel Stahl, who suffered a back injury while a nurse at Hialeah Hospital, challenged that reform when his physician decided Stahl had reached “maximum medical improvement” and allocated a 7% disability rating in 2005.
18
sation benefits, puts additional pressure on insurance professionals to help employers correctly classify employees. That’s something many companies and agents overlook when submitting workers’ compensation applications, says La’Troya McKinney of Abram Interstate Insurance Services. “If an employer is scheduling their time, telling them who to see or where to go, they are an employee under the labor code, and [the employer] can be fined up to $150 per day per employee for not having comp in place,” McKinney says. She adds that although these stipulations apply primarily in California – where 1099 status is under strictest review – it doesn’t hurt for agents across the country to adopt a similar no-risks attitude. “I tell people that if they base their decisions off regulations in what is one of the most rigid states, they can’t go wrong,” she says.
NY inspector general vows to combat fraud
New York Inspector General Catherine Leahy Scott announced that four people throughout the state have been arrested for workers’ compensation fraud, and more arrests are likely to follow. “I will use the resources of my office to relentlessly pursue anybody who abuses the system at the expense of honest, hard-working New Yorkers. Those who abuse the system should fully expect they will be caught,” Leahy Scott said. Four district attorneys were also involved in the arrests, indicating a “concerted and ongoing effort” to prosecute fraud.
www.ibamag.com
18-19_Workers Comp-SUBBED.indd 18
22/01/2016 7:27:25 AM
Q&A
Greg Nelson Senior advisor and special assistant to the president NATIONAL ECONOMIC COUNCIL, THE WHITE HOUSE
Fast fact A letter entitled “Common Ground for Independent Workers” was recently signed by 40 individuals. It calls upon lawmakers to consider introducing portable workers’ compensation benefits to provide safety and flexibility for more Americans.
Portable workers’ compensation benefits What has driven the recent call for portable workers’ compensation benefits? This group came together because we believe new business models and technological innovations are raising the importance of long-standing questions about flexible and temporary work and the types of benefits and responsibilities workers and companies should expect. By some estimates, there are tens of millions of independent workers in the US, but we don’t currently have a straightforward way to ensure they can easily and affordably access benefits and protections. As we share in the letter: “Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth or when it’s time to retire.”
How do you anticipate that a system of portable workers’ comp benefits would work? At a high level, we’re focused on empowering all independent workers and encouraging the development of benefit and protection policies and models allowing companies and independent workers to prepare for and invest in their futures. We believe benefits and protections should follow workers, not the other way around. We anticipate many different ideas and models may develop – for-profit, not-for-profit and perhaps new hybrids in between. And we believe policy should support the development of possible options. Together, the signatories of the letter have outlined five principles we believe should govern any solution. Independent: Any worker should be able to access
Surgeon facilitated workers’ comp kickbacks
California orthopedic surgeon Dr. Philip Sobol has pled guilty to charges that he facilitated the exchange of financial kickbacks to doctors and chiropractors in exchange for their referral of patients to Pacific Hospital for spinal surgeries and other operations. The surgeries were primarily financed by the California Workers’ Compensation System. The 15year scheme resulted in Pacific Hospital producing $580 million in fraudulent billings. Sobol has agreed to pay back $5.2 million for his role in the scam.
a certain basic set of protections as an individual, regardless of where they source income opportunities. Flexible and pro-rated: People are pulling together income from a variety of sources, so any vehicle should support contributions that can be pro-rated by units of money earned, jobs done or time worked, covering new ways of micro-working across different employers or platforms. Portable: A person should be able to take benefits and protections with them in and out of various work scenarios. Universal: All workers should have access to basic benefits, regardless of employment status. Supportive of innovation: Businesses should be empowered to explore and pilot safety-net options, regardless of the worker classification they utilize. That said, there are also significant and challenging policy questions remaining for this vision to be realized. This diverse group is committed to starting the policy discussion with a shared set of principles to guide future work.
What would be the greatest advantage of allowing for portable workers’ comp benefits? The concept of portable benefits is really a way to deliver both stability and flexibility to working people and their families, by ensuring independent workers have access to meaningful work, protections and benefits in order to lead sustainable lives and realize their dreams. This can and should be consistent with preserving opportunities for flexible work.
Workers’ comp costs down in Colorado
The Colorado Division of Insurance said average workers’ compensation loss costs will decrease 1.9% in 2016 due to improved state safety statistics. In Colorado, lost wages and medical expenses from occupational injuries dropped in 2015. Lost cost averages are calculated using such metrics as frequent injury claims by workers, the length of absences from work, the severity of injuries, the number of treatments needed and any healthcare cost increases.
US Risk swallows Matias Underwriters
US Risk Insurance Group – the sixth-largest property and casualty wholesaler in the country – has acquired Matias Underwriters. As part of the transaction, Glenn Matias will serve as national practice leader and vice president for the workers’ compensation division of US Risk. “We look forward to the impact of Glenn’s extensive expertise in the workers’ compensation arena to continue expanding our presence and better serve our clients,” said US Risk CEO Randall Goss.
www.ibamag.com
18-19_Workers Comp-SUBBED.indd 19
19
22/01/2016 7:27:33 AM
PEOPLE
INDUSTRY ICON
THE ACE OF ALLIANZ Arthur E. Moossmann, president and CEO of Allianz Global Corporate and Specialty in North America, shares his team successes in and outside of insurance
ARTHUR MOOSSMANN’S tale of falling into insurance is similar to that of many of his colleagues. What’s surprising, however, is that before he entered the industry, Moossmann’s working life was more akin to that of Babe Ruth or Ted Williams. “I was a professional baseball player for a few years post-college,” he says. And like both Ruth and Williams, Moossmann’s baseball career began with the Boston Red Sox. Of course, the big question is why he moved from sports to insurance. “I decided that professional athletes just didn’t make enough money and that big insurance executives did,” he jokes. On a more serious note, Moossmann says, “After a few years playing professional baseball, it was time to pursue an alternative career.” The father of a teammate worked for an insurance company in New York that had a management candidacy program. Moossmann successfully applied and began the program. “It was purely by happenstance … that I ended up in insurance.” Helping young people to more deliberately pursue a career in insurance is a task Moossmann describes as near and dear to his heart. He mentions Allianz’s annual associate program, which has been up and
20
running for about 15 years. “We hire 20 to 25 young men and women – recent university graduates from diverse geographic backgrounds – to go through a rigorous 18-month training program with us,” he says. “The intent is, at the conclusion of the 18 months, that the individual be placed in an area of the company that he or she enjoyed, and where we have a need. Fostering the next generation of insurance
Consolidation challenges Reflecting on his own career in insurance, which spans almost four decades, Moossmann cites the recent integration of Fireman’s Fund Insurance Company’s commercial property and casualty business into AGCS as a major challenge. That integration was announced in September 2014 and took effect in January of last year. As part of the plan, Moossmann
“Fostering the next generation of insurance executives is something that Allianz and I feel very passionate about” executives is something that Allianz and I feel very passionate about.” Moossmann describes the associate program as “diverse, interesting and challenging,” and says that by the end of the program, each participant has a well-rounded sense of both the insurance business and the company. Additionally, Allianz and the candidates themselves can more clearly see an individual’s suitability for an insurance career.
was elevated to president and CEO of both AGCS and Fireman’s Fund. “It’s been challenging, rewarding, hard work, but I think everything is going according to, if not ahead of, plan,” he says, citing the integration of the two companies’ cultures, the consolidation of two distribution channels into one and the ability now to take Fireman’s Fund product lines to AGCS clients internationally. “The entertainment piece of business …
www.ibamag.com
20-23_Industry Icon-SUBBED.indd 20
22/01/2016 7:27:56 AM
PROFILE Name: Arthur E. Moossmann Company: Allianz Global Corporate and Specialty [AGCS] Title: President and CEO, North America Age: 60 Years in the industry: 39 Fast fact: AGCS is the Allianz Group’s dedicated carrier for corporate and specialty insurance business. In 2014, it wrote nearly $6 billion in gross premium worldwide.
www.ibamag.com
20-23_Industry Icon-SUBBED.indd 21
21
22/01/2016 7:28:03 AM
PEOPLE
INDUSTRY ICON ARTHUR MOOSSMAN’S CAREER TIMELINE
2015 was a very distinguished, market-leading segment of the business that Fireman’s Fund cultivated,” Moossmann says. “We’ll be offering certain products that were part of the Fireman’s Fund stable throughout the world within the AGCS footprint.” While plenty of work has already gone into the integration, Moossmann says there’s still much to be done, but he has been genuinely impressed by the attitude of staff throughout the process. “Change is never easy for a lot of people, particu-
financial lines piece in the US because that’s [fallen within] the remit of Fireman’s Fund,” he says. “Now, with the aggregated company, we have built a team, hired some of the top industry executives in the underwriting management and claims field, and we will be aggressively pursuing the financial lines segment of the business.” Additionally, Moossmann says AGCS in North America will concentrate on engineering lines. “With the economic improvement in the US over the past few
“We’ll be offering certain products that were part of the Fireman’s Fund stable throughout the world within the AGCS footprint” larly [in] a company that had a very wellrecognized brand associated with one of the more distinguished industries in the US. There was a lot of emotional attachment to the brand. Changing from the fire hat to the AGCS Allianz brand and also consolidating offices … You always worry about how people will react. But I think, to date, one of the greatest surprises and testimony to the team has been the cultural acceptability of the change. People understood why it was necessary and have, I think, adapted well and have accepted and embraced the fact that they’re part of a bigger, more financially secure company within the Allianz family.”
The new year Looking at the year ahead, Moossmann outlines the focal points of AGCS’ profitable growth strategy for North America, which includes growing its financial lines business. “Financial lines has been a very successful line of business for AGCS globally, but we have never really put a lot of emphasis on the
22
years, you can see the reinvestment in infrastructure projects that had gone unattended for many years.” A focus on liability lines also will be key. “Quite frankly, we haven’t had an appropriate share of that market,” Moossmann says. “We will be concentrating principally on the excess liability fields.” Moossmann concurs with many of his industry colleagues who predict that cyber risk exposure will continue to present a challenge for the market this year. He also sees international terrorism as another challenge for 2016. But whatever the year holds, Moossmann looks forward to the organization he leads being there for the benefit of its insureds. “For our customers, having a financially secure insurance company standing behind them, insuring their risks, should give them a degree of comfort in the challenging times ahead that Allianz will be here and capable of standing up to the challenges of the unforeseen in the near future.”
Becomes president and CEO of AGCS in North America and FFIC
2014
Becomes AGCS’ chief regions and markets officer, Regional Group 2 (North America, South America, London and Nordic & CEE)
October 2009
Appointed to the AGCS SE board of management as the chief underwriting officer of specialty, overseeing the aviation, marine and energy lines of business
January 2009
Becomes global marine head of Allianz Global Corporate & Specialty [AGCS]
2004
Becomes president of specialty insurance for FFIC
1999
Becomes president of marine for Fireman’s Fund Insurance Company [FFIC]
1987
Joins Guardian Royal Exchange as vice president of international hull and liabilities, and later goes on to become president of international marine
1977
Begins career at Talbot Bird & Company as a senior underwriter
www.ibamag.com
20-23_Industry Icon-SUBBED.indd 22
22/01/2016 7:28:09 AM
IBA_U
www.ibamag.com
Insurance Business America is the independent voice for the insurance industry, encompassing news analysis, expert opinion, exclusive interviews and business strategy advice for today’s sophisticated insurance brokers, agents and advice professionals.
KNOW ANYONE WHO SHOULD BE READING INSURANCE BUSINESS AMERICA? IBAMA G.COM
FEATUR E / THE
PE THE SHA N E OF AG ETS TO COM
CHANG ING WORLD
about to and brokers is ates rance agents stig The world of insurm. Insurance Business inve ld g wor radically transfoto do to thrive in a changin d and Casualty ion of Property what you nee
Future: The Evolut saying of the ution. the Agency are g today is not Insurance Distrib WHA Insurance agents are playin Producers at ago, specifically “The role that comfort zones. ding , 20 to 30 years goodbye to their e, Ore., is expan ob Hartman role they played cing,” says R based in Eugen and developing in risk selection and pri The agency, ercial lines comm . lines: on those its focus hor of the report front line of n within specializatio ses, for co-aut agent used to be on the had undernew areas of taxis and bu r o f “The e policy, c n a a r of u n ins transportatio riting and pricing tions of homes, knew very underw inspec did were an. le. ity, who Hartm examp agents g author says , we have had stayed writin the business,” “Historically given that lization and they logy the customer, knew for that today, areas of specia techno used to their ’s a lot less need singly in small information y 50 “There Vince Ada, lines—and increa to more of a there,” says ys approximatel all personal g which emplo s are movin in what in task is director at WHA, ercial—carrier sit comfortably , where the You comm you can’t just r riting model or eight years. people. “But ation and answe black-box underw in the last five fill out an applic tely you have done or 10 to 20 ries.” ss accura yees to multiple indust about the busine have to learn additional emplo how you drive to 60 questions ly hired eight and the car and help the 50 WHA recent ons about you logies that will ers. questi enting techno s are it.” with custom and is implem that’s vely carrier by effecti it—and sales t more l or direct which marketing efforts company interac Multichanne stepping up its auto insurance, also ercial and is y, ing comm al and The agency increasing steadil of premiums, is becom sales in person for 70% s are also in order to grow measures to boost efficiency. says. Carrier is accounts ry d, Hartman matic of what lines, and is taking with the indust commoditize ence is emble insurance aggressively, WHA’s experi on advertising. and mid-size marketing more many small $6bn a year US. Many happening at carriers are ng more than across the ms were brokerages riven, spendi y personal auto, of all P&C premiu ndent lines, notabl agencies and nt, technology-d more efficie They In some with agents and brokers. lized. written by indepe specia are becoming competing ercial lines and ting. agents 2013, focused on comm new approaches to marke Share Report Source: Market ping NEL Insurance CHAN hole in A.M. Best/Independent are also develo of America THE DIRECT a noticeable little choice. Agents & Brokers ics of the larger have punched They may have g econom sales the hole is growin l,” Direct signs that ing to unrave “There are auto, and the model are beginn report, Agents personal 11 MBER 2013 | traditional agent sey & Co. NOVEMBER/DECE a recent McKin according to
57%
IBAMAG.COM ISSUE 3.04
10 | NOVEMB
ER/DECEMBER
2013
TOP
PRODUCERS Find out who made the inaugural list of the industry's best producers GLOBAL REACH LLOYD'S CHAIRMAN ON THE INSURANCE GIANT'S AMBITIOUS GROWTH PLAN
OFC & Spine-SUBBED.indd 2
NEGOTIATE BETTER PROFESSIONAL LIABILITY LEARN THE SECRETS THE NEW RISKS THAT TO WINNING THE DEALS ARE LEAVING YOUR YOU WANT CLIENTS EXPOSED
• In-depth analysis of the latest issues affecting insurance brokers and agents • Expert columnists addressing aspects that impact your business • Exclusive interviews with the industry’s most important players • Our own rundowns of America’s best brokerages and insurers • Analysis of insurance industry reports and research findings • The latest changes in insurance legislation and what you need to do next • Industry photography of the key figureheads and insurance events
To subscribe to Insurance Business America, email lodia.tipon@keymedia.com or call 720-452-2600 www.ibamag.com Insurance Business America is proudly brought to you by Key Media
1/05/2015 2:38:09 AM
www.ibamag.com
20-23_Industry Icon-SUBBED.indd 234 IBA_UpcomingIssues_FP_ad.indd
23
22/01/2016 7:28:16 AMAM 21/07/2015 4:13:08
FEATURES
COVER STORY: HOT 100
These 100 movers and shakers have led the insurance industry to new heights over the past year INDEX BY NAME
24
NAME
PAGE COMPANY
NAME
PAGE COMPANY
NAME
PAGE COMPANY
Anderson, Anne
28
Integro
Buchmueller, Ross
31
PURE
Freudenthal, Dan
30
Agency Flood Resources
Banaszynski, Matt
30
Independent Insurance Agents of Wisconsin
Caldwell, Andrew
35
Smart Choice
Gallagher, J. Patrick
34
Arthur J. Gallagher & Co.
Casserley, Dominic
36
Willis Group
Gayner, Thomas
31
Markel
31
Hiscox
Barton, Curtis
43
Venture Pacific Insurance Services
Catlin, Steve
42
XL Group
Goodwin, Nicole
Beale, Inga
44
Lloyd’s of London
Cavaness, Joel
43
Risk Placement Services
Goss, Randall
35
US Risk Insurance Group
Bentley, Robert
40
Markel
Chase, Brooks
44
Distinguished Programs
Granillo, Diana
43
Leavitt United Insurance
Berkley, William
30
WR Berkley
Cochrane, J. Bruce
40
Rancho Mesa Insurance Services
Greenberg, Evan
32
ACE Group
Biedleman, Justin
38
Arbor Insurance Group
Condrin, J. Paul
42
Liberty Mutual Insurance Group
Greenberg, Maurice
38
Starr Companies
Bixler, Todd
38
K&K Insurance Group
Cooper, W.H.
29
AmWINS
Gulliver, Richard
34
HUB International Limited
Boedker, David
26
Keystone Insurers Group
Cubbin, Robert
30
Meadowbrook
Hamm, Adam
39
North Dakota
Brady, Denis
25
Burns & Wilcox Brokerage
Dorow, Herb
35
Maris Brown Rossell Insurance Group
Hancock, Peter
38
AIG
Branch, Laurie
33
The Iroquois Group
Dybdahl, Kari
47
American Risk Management Resources
Hanuschak, Brian
37
Victor O. Schinnerer & Company
Brown, J. Powell
30
Brown & Brown
Eastwood, Peter
26
Berkshire Hathaway Specialty Insurance
Hays, Jim
42
Hays Companies
Brown, Matt
28
General Star
Eppinger, Fred
25
The Hanover Group
Heffernan, Mike
32
Heffernan Insurance Brokers
Brown, Sam
30
Rancho Mesa Insurance Services
Foley, Brian
39
Corcoran & Havlin Benefits Group
Heinze, Bernd
46
AAMGA
Brown, Stacy
26
Freberg Environmental
French, Reid
44
Applied Systems
Howard, John
32
BB&T
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 24
22/01/2016 9:54:21 PM
WELCOME TO IBA’s annual Hot 100 list. We asked you, the insurance community, to pass on your suggestions for the big names to be considered for inclusion on this list of industry power players. From CEOs and presidents of major insurers to local heroes, the names came flooding in. While this isn’t an exhaustive list of everyone who’s making waves in the insurance industry, we’ve narrowed it down to 100 people we think merit a mention this year – whether it’s for 12 months worth of achievements or one gutsy move that shook up the insurance world in 2015.
2016
DENIS BRADY President BURNS & WILCOX BROKERAGE Denis Brady continues to prove that no challenge is too large. Since taking the helm at Burns & Wilcox Brokerage in 2013, Brady’s bold leadership and aggressive pursuit of the industry’s top talent have turned the firm into one of the most highly regarded wholesale brokers in the business. In 2015, Brady recruited more than a dozen new brokers to join his expert team and opened the doors to three new locations. (Burns & Wilcox Brokerage now operates across eight offices nationwide.) In 2015, Brady also was elected to serve as chair of the Surplus Line Association of California.
FRED EPPINGER President and CEO THE HANOVER GROUP Fred Eppinger assumed leadership of The Hanover Group as its president and CEO in 2003. Under his guidance, The Hanover grew from a regional company to a national carrier, developing a broad portfolio of distinctive and specialized capabilities, which are solely distributed through a select group independent agents. During his tenure, Eppinger oversaw numerous acquisitions – including Chaucer, a leading managing agency at Lloyd’s of London – that give The Hanover a broad international reach. Today, The Hanover is one of the largest and fastest-growing insurance companies in the US. Eppinger has announced he will retire in 2016.
NAME
PAGE COMPANY
NAME
PAGE COMPANY
NAME
PAGE COMPANY
Iordanou, Constantine
47
Arch Capital Group
Miley, Richard
40
BroadStreet Partners
Ryan, Patrick
31
Ryan Specialty Group
Jinhong, Jim
31
NBIS
Moore, Davis
35
Worldwide Facilities
Ryan, T.J.
43
ISU Insurance Agency Network
Jordan, David
35
NetRate Systems
Moore, LeConte
27
DeWitt Stern
Salvatore, Bryan
32
Zurich Insurance
Kelley, Brady
44
NAPSLO
Mumford, Chad
26
Liberty Mutual Insurance Group
Salzmann, Benjamin
40
Acuity
Kelley, Bruce
43
EMC Insurance Group
Nagano, Tsuyoshi
35
Tokio Marine
Sampson, David
26
PCI
Kelley, Kevin
27
Ironshore
O'Brien, Dave
42
Zywave
Scheider, Harrison
36
American Risk Management Resources
Kuzma, Thomas
39
Nautilus Insurance
O'Connor, Michael
34
Aon Risk Solutions
Scotto, Ray
36
TMPAA
Largent, Edward
46
Westfield Insurance
O'Leary, Patrick
36
Trident Insurance Agency
Sicard, Mike
41
USI Insurance Services
Larson, Donald
28
Great American Insurance Group
Palotay, Michael
31
NAS Insurance
Skorupski, Richard
39
Meeker Sharkey Associates
Lindeen, Monica
39
NAIC
Pool, Brian
40
Lonestar Integra Insurance Services Lexington Insurance Company
Lockton Companies
Lockton Companies
42
32
47
Power, Matthew
Tomlinson, John
Lockton, David
44
Atlas General
32
Heritage Insurance Holdings
Pritchard, Bill
28
Beacon Hill Associates/PartnerOne Environmental
Trzos, Bill
Lucas, Bruce
Turner, Timothy
42
RT Specialty
Luttrell, Roger
43
Combined Agents of America
Pusey, Leigh Ann
36
American Insurance Association
Volini, Dominic
28
Wolf Point Advisors
Lyons, Carson
39
AIG
Rao, Nag
28
EZLynx
Wang, Qunbin
38
Fosun International
Masiello, Jim
46
SIAA
Reingen, Eric
26
CrossFit Risk Retention Group
Watkins, Hank
34
Lloyd’s North America
Mattioda, Geno
28
Wolf Point Advisors
Rice, Michael
40
JLT Specialty
Williams, Gregory
43
Acrisure
McKernan, Geof
38
NSM Insurance Group
Rico, Valeria
45
Confie
Williams, Ray
44
SecureRisk
Merrill, Toby
42
ACE Group
Riley, Tom
34
Assured Partners
Zimmer, Greg
36
Alliant Insurance Services
www.ibamag.com
25
FEATURES
COVER STORY: HOT 100 DAVID A. SAMPSON
STACY BROWN
President and CEO PCI
President and managing partner FREBERG ENVIRONMENTAL
David Sampson heads up the Property Casualty Insurers Association of America, which represents more than 1,000 homeowner’s, auto and business insurance companies that together write 39% of the country’s P&C insurance. Sampson spearheads the PCI’s advocacy efforts on the state, federal and global levels. That advocacy paid off with several legislative victories last year, including the inclusion of insurance provisions in omnibus spending bills and a new law in Ohio that helped close coverage gaps for transportation network drivers.
A part of the environmental consulting and insurance industries since 1989, Stacy Brown joined Freberg Environmental in 1998 to develop the company’s site-specific pollution and petroleum storage tank programs. In 2015, Brown significantly bolstered the company’s underwriting depth and service capabilities with the addition of key staff across the country. Brown also has been instrumental in the development of policy forms, rating methods, reinsurance placements and marketing efforts. With FEI founder Mike Hill, Brown also co-authored two award-winning loss control books for environmental consultants and contractors.
PETER EASTWOOD President and CEO BERKSHIRE HATHAWAY SPECIALTY INSURANCE Even before taking the reins at Berkshire Hathaway Specialty Insurance, Peter Eastwood had an impressive resume. He began his career as an AIG underwriter in 1991 and quickly moved up the ranks. At AIG, he most recently served as the president and CEO of the company’s property/casualty business for the Americas. He also served as president and CEO of Lexington Insurance Company, an AIG subsidiary, before stepping into the top job at BHSI. This year, under Eastwood’s guidance, BHSI expanded into Australia, New Zealand, Hong Kong and Singapore, adding to its existing global presence in the US, Canada and India.
ERIC REINGEN Vice president CROSSFIT RISK RETENTION GROUP In 2009, the global CrossFit workout craze was just taking off, and Eric Reingen was fresh out of college. At the time, he didn’t know much about insurance – but he saw potential in CrossFit. Reingen helped pioneer insurance coverage for the CrossFit brand, and his vision has paid off: Today, more than 11,000 CrossFit affiliates have opened up gyms, and Reingen is now the assistant vice president of CrossFit Risk Retention Group – a community-owned group that insures the majority of CrossFit affiliates in the US – and vice president of Nexo Insurance Services, which founded the group and administers it.
26
DAVID E. BOEDKER SR.
CHAD E. MUMFORD
CEO KEYSTONE INSURERS GROUP
Producer LIBERTY MUTUAL INSURANCE GROUP
David Boedker Sr. joined Keystone in 1987 and took the reins as CEO in 1999. Under his leadership, KIG – formed originally as a cooperative arrangement between agencies – changed to a franchisor model and began an expansion that hasn’t stopped yet. Since 2003, KIG has expanded from its home base in Pennsylvania into North Carolina, Virginia, Indiana, Ohio, Kentucky, Tennessee, Georgia, Illinois and, in 2015, Missouri. In addition to his duties at Keystone, Boedker has been a member of the board of directors of Associated Insurance Management since 1986.
One of IBA’s top producers for 2015, Chad Mumford specializes in personal lines products for Liberty Mutual Insurance Group. Mumford made impressive gains in both revenue growth and client growth last year; he cites a passion for continuous education as one of the driving forces behind his success. “Continually educate yourself so as to deliver concise, expert advice to your clients and to ask for referrals,” he says. “If your client views you as an expert, they will feel more confident in referring you to their family, friends and coworkers.”
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 26
22/01/2016 9:54:28 PM
2016
KEVIN H. KELLEY CEO IRONSHORE Under Kevin Kelley’s leadership, Ironshore has expanded its international presence with a global network of offices offering diverse specialty insurances. The past year alone, the company introduced more than 15 new products and programs and made enhancements throughout its global distribution platform. Ironshore was also named a top E&S carrier and ranked as an Advisen Pacesetter Innovator for the fifth consecutive year. Kelley also guided Ironshore through its $1.8 billion acquisition by Fosun in November.
LECONTE MOORE Managing director, entertainment and media division DEWITT STERN With more than 20 years of experience, LeConte Moore knows his way around the insurance business. He’s also good at designing insurance coverage for big events; Moore arranged insurance for Pope Francis’ 2015 visit to the US for the World Meeting of Families. Before that, he insured Miley Cyrus’ “Wrecking Ball” video, Super Bowl XLVIII and four presidential inaugurations. He also handled claims for the canceled Super Bowl and the Ryder Cup following 9/11, as well the canceled Billy Joel/Elton John concert in Vienna. Prior to joining DeWitt Stern in 2004, Moore spent 20 years as the head of Marsh & McClellan’s entertainment practice, which he launched.
.®
There can be no doubt that all our knowledge begins with experience. – Immanuel Kant
www.summitholdings.com
Policies are underwritten by Bridgefield Casualty Insurance Company and Bridgefield Employers Insurance Company, authorized insurers in AL, AR, FL, GA, IN, KY, LA, MS, NC, SC, TN and TX; BusinessFirst Insurance Company, authorized in FL, GA, KY, NC, SC and TN. RetailFirst Insurance company, authorized in FL; Retailers Casualty Insurance Company, authorized in AR, LA, MS and TX. ©2016 Summit Consulting LLC | 2310 Commerce Point Drive, Lakeland, FL 33801
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 27
27
22/01/2016 9:54:34 PM
FEATURES
COVER STORY: HOT 100 DOMINIC VOLINI AND GENO MATTIODA Co-CEOs WOLF POINT ADVISORS Dominic Volini and Geno Mattioda partnered to purchase an established brokerage in 2014. Since then, they’ve maintained an average 30% annual growth rate, a 65% premium growth rate and a 90% retention rate. Volini and Mattioda also launched a business and educational partnership with tech incubator 1871 and are developing a scholarship program for insurance and financial management majors. Together with 1871, Wolf Point Advisors recently launched a healthcare and employee benefits exchange. “I like to think of our firm as being at the forefront of ushering in the next generation of insurance professionals,” Volini says. “We strive to think outside the box from the traditional brokerage model of insurance in every way possible.”
ANNE ANDERSON
NAG RAO
President, US operations INTEGRO
Founder and CEO EZLYNX
As president of US operations for Integro, Anne Anderson provides oversight of the operations and infrastructure of the company’s US offices, bringing her strong brokerage background to bear. Integro expanded its reach with several acquisitions last year, including HealthCare Risk Specialists, AFL Insurance Brokers’ aviation division, and Lemme Insurance Group. Prior to joining Integro, Anderson served as the property and international practice leader at Palmer & Cay and as a managing director and group leader at Marsh.
Nag Rao is constantly pushing the boundaries of innovation at EZLynx, which has become the fastest-growing agency management system and most popular comparative rater. By methodically designing the only single-platform solution for independent agents, EZLynx has introduced several game-changing features – such as Retention Center, which helps agents to manage policy renewals more proactively with better retention results – that have agents switching to EZLynx in record numbers.
Vice president and division manager GENERAL STAR Matthew Brown runs General Star’s new delegated division, created when the company combined its property/casualty and E&O divisions under the same umbrella. Under Brown’s guidance, all of General Star’s fully delegated business will be managed in a single division. Brown joined General Star in 2000 as an underwriter in the casualty department, and served as manager of the Los Angeles Casualty Branch before taking over the new division.
BILL PRITCHARD
DONALD LARSON
President and CEO BEACON HILL ASSOCIATES/ PARTNERONE ENVIRONMENTAL
President & COO GREAT AMERICAN INSURANCE GROUP
Bill Pritchard is a third-generation insurance professional who heads Beacon Hill Associates, a wholesale insurance broker and program administrator that specializes in the placement of environmental insurance and other specialty coverages. Last year, the company launched The Summit, a quarterly e-publication that provides insurance professionals with discussion and analysis of trends in environmental and energy insurance.
28
MATTHEW BROWN
In 2010, Donald Larson became president and COO of Great American Insurance Group’s property and casualty group, which writes more than $5 billion in premiums through 32 different niche specialty insurance businesses. A 42-year employee of Great American and its parent, American Financial Group, Larson has held positions of increasing responsibility throughout his career. Under Larson’s leadership, Great American has consistently received top marks for its performance: It is rated A+ by A.M. Best and has been named one of the 50 top-performing P&C insurance companies by Ward Group.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 28
22/01/2016 9:54:40 PM
2016
W.H. “SKIP” COOPER President AMWINS With more than 25 years of experience in the wholesale insurance industry, Skip Cooper has been a valuable addition to AmWINS Group’s executive team since joining the firm in 2007. During that time, he has helped shape AmWINS’ strategic direction and further position the firm as a global leader in the specialty insurance distribution arena. Last year, under Cooper’s leadership, AmWINS acquired The III Group, an MGA and wholesale broker, and technology company Impact Interactive. Prior to joining AmWINS, Cooper served as executive vice president of CRC Insurance Services, where he formed their property department, as well as AmRisc Underwriting. Prior to CRC, he worked in various industry positions, including underwriting at Fireman’s Fund and internships at Lloyd’s of London.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 29
29
22/01/2016 9:54:47 PM
FEATURES
COVER STORY: HOT 100 J. POWELL BROWN President and CEO BROWN & BROWN
MATT BANASZYNSKI Executive vice president and CEO INDEPENDENT INSURANCE AGENTS OF WISCONSIN Hired as IIAW vice president at the age of 25, Matt Banaszynski was promoted to executive vice president and CEO at just 27, becoming the youngest IIA state executive in the country. He led the IIAW to grow its E&O book of business by 20%, increase its membership base, and create new products and services to help independent agents. He also forged a partnership with the University of Wisconsin-Madison to launch a new professional development conference aimed at creating better insurance leaders, and he turned the IIAW’s government affairs program into a nationally recognized and awardwinning initiative. Banaszynski was recently named as an advisory board member for the University of Wisconsin-Oshkosh Center for Insurance and Risk Management.
30
J. Powell Brown was elected president of Brown & Brown in 2007. In that capacity, he oversees the company’s wholesale brokerage and public entity operations throughout the country. Under Powell’s leadership, Brown & Brown completed several acquisitions in 2015, including the Hall-Wright General Agency, Liberty Insurance Brokers and Bellingham Underwriters. Prior to taking the reins as president, Brown served the company as a regional executive vice president, the profit center leader for the company’s Orlando office, and as a sales producer and marketing manager in Dayton Beach, Fla. Brown also serves on the board of directors of SunTrust Bank/Central Florida.
SAM BROWN Vice president, human services division RANCHO MESA INSURANCE SERVICES After a stint in General Electric’s insurance division, Sam Brown joined Rancho Mesa Insurance Services, where he’s worked to grow the company’s human services product. In 2014, he became a stockholder in the company and was named vice president of its human services group. Brown was an IBA
DAN FREUDENTHAL President AGENCY FLOOD RESOURCES Flooding is the most common – and most costly – natural hazard risk in the US. Dan Freudenthal recognized that risk and decided to do something about it, launching a wholesale brokerage dedicated exclusively to the private flood insurance market. To build Agency Flood Resources, Freudenthal assembled a team of experts to help insurance pros understand their clients’ flood risks and help them design custom flood insurance solutions, effectively creating a one-stop shop for insurance agencies’ flood-related needs.
top producer for 2015, and was the 2015 recipient of the IIABA Anthony J. DiBuduo Award. “An agent has two roles: producer and broker,” Brown says. “The producer in us must continually research prospects, look for opportunities, ask for referrals and make the cold call. The broker side must understand the market, manage client expectations, advocate for clients and understand the insurance coverage. Both roles are equally important and always need tinkering.”
WILLIAM R. BERKLEY
ROBERT S. CUBBIN
Executive chairman WR BERKLEY
President and CEO MEADOWBROOK
William R. Berkley founded WR Berkley as a small company in 1967, and grew it into one of the nation’s top commercial lines P&C insurers. By 2004, WR Berkley had become a Fortune 500 company, and by 2007, it was generating revenues of $5.5 billion. Last year, Berkley moved into the role of executive chairman, handing the CEO reins over to his son, W. Robert Berkley Jr.
Robert S. Cubbin leads Meadowbrook Insurance Group, a specialty niche-focused commercial insurance underwriter and insurance administration services company. Founded in 1955, Meadowbrook today employs nearly 900 people and generates about $750 million in gross written premium each year. In 2015, Cubbin guided Meadowbrook through its acquisition by Fosun International.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 30
22/01/2016 9:54:53 PM
2016
NICOLE GOODWIN
MICHAEL PALOTAY
ROSS BUCHMUELLER
Chief underwriting officer HISCOX
SVP of underwriting NAS INSURANCE
President and CEO PURE
As chief underwriting officer for Hiscox USA, Nicole Goodwin has presided over skyrocketing business; the company reported a near 13% rise in gross written premium in the first nine months of 2015. Goodwin has held various positions at Hiscox; most recently, she served as head of US claims, where she was responsible for driving the strategic direction of Hiscox’s industry-leading claims service.
Michael Palotay has been instrumental in developing NAS’s technology and cyber liability product, recognized as one of the broadest in the market. With NAS since 2009, Palotay is a key leader in the company’s product strategy, marketing, production management and underwriting.
Ross Buchmueller founded PURE, a specialist insurer serving high-networth individuals and families across the US, in 2006. Last year, PURE was named one of the best entrepreneurial companies in the nation by Entrepreneur magazine. The publication also recognized PURE for its outstanding company culture. Prior to founding PURE, Buchmueller launched AIG’s Private Client Group and served as its president for more than six years. He started his career at the Chubb Group, where he held several positions, including senior vice president of Chubb Insurance Company of Europe. Buchmueller serves on the board of directors of the United Way of Westchester and Putnam Counties. He was also a founder of the Private Risk Management Association and continues to serve on its board of trustees.
PATRICK G. RYAN Founder, chairman and CEO RYAN SPECIALTY GROUP Patrick Ryan is something of a legend in the insurance world. In 2010, he founded Ryan Specialty Group – today a global organization boasting a wholesale brokerage, a select group of underwriting managers and other specialty services for agents, brokers and carriers. And RSG isn’t even the first global insurance company Ryan has started; he also founded Aon Corporation and served as its chairman and CEO. When Ryan retired from Aon, the company had grown to more than 500 offices in 120 countries and was generating revenues in excess of $7 billion. Ryan is a member of the International Insurance Society’s Insurance Hall of Fame and a recipient of the Ernst & Young Entrepreneur of the Year Lifetime Achievement Award. In 1987, Ryan received the esteemed Horatio Alger Award, which honors those who are dedicated to the principles of integrity, hard work, perseverance and compassion for others. He also has been recognized as the College of Insurance’s Insurance Leader of the Year and is the recipient of the Insurance Federation of New York’s Free Enterprise Award.
JIM JINHONG EVP, underwriting and business development NBIS As executive vice president of underwriting for NBIS Construction and Transport Insurance Services, Jim Jinhong and his team are credited with increasing NBIS’ written premium by 40% in the last year alone. Jinhong has more than 20 years of experience in underwriting and program development, the last 10 years in heavy construction. Jinhong currently manages NBIS Atlanta’s casualty and Chicago’s property underwriting operations, which includes transport liability, heavy equipment operators (GL), excess casualty, pollution and workers’ compensation. “He and his team have worked tirelessly to improve the product offering NBIS makes available to the heavy construction industry,” says Lisa McAbee, director of business development and marketing at NBIS.
THOMAS S. GAYNER President and CIO MARKEL
As a member of Markel’s threemember Office of the President, Thomas Gayner oversees the company’s investing activities, as well as the diverse industrial and service businesses of Markel Ventures. Markel was recently valued at nearly $12 billion, and its stock has grown at an average annual rate of more than 18%. The Motley Fool has called the company a “mini Berkshire Hathaway.” Gayner also serves as chairman of the board for the Davis Series Mutual Funds and on the boards of Colfax Corporation and Graham Holdings. He’s a trustee of the Community Foundation of Richmond and a member of the Virginia Retirement System’s investment advisory committee. Prior to joining Markel in 1990, Gayner served as vice president of Davenport & Co. of Virginia.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 31
31
22/01/2016 9:55:00 PM
FEATURES
COVER STORY: HOT 100 BRYAN SALVATORE President, specialty products ZURICH INSURANCE As the president of Zurich North America Commercial’s specialty products business unit, Bryan Salvatore oversees the delivery of innovative insurance solutions for more challenging risks. Last year, Salvatore’s unit enhanced its cybersecurity program and expanded its international program to make coverage available to companies doing business globally. Salvatore has been with Zurich for almost two decades; in 2007, he took the reins of the company’s accident & health division, which, under his guidance, expanded its book of business through wider product offerings, new strategic relationships and improvements in servicing and tiered underwriting.
MIKE HEFFERNAN
JOHN HOWARD
President and CEO HEFFERNAN INSURANCE BROKERS
CEO BB&T
Mike Heffernan entered the insurance industry as an intern for Lloyd’s at the age of 22. At 29, he purchased a struggling insurance brokerage with just 10 employees. That brokerage eventually became Heffernan Insurance Brokers, a firm that’s grown over the years to more than 420 employees and nine branches; last year, the company passed $100 million in revenue. Heffernan has been recognized as a Most Admired CEO by the San Francisco Business Times. He also believes in giving back; since its founding in 1988, Heffernan Insurance Brokers has given more than $4 million to charity, and Heffernan employees volunteer about 5,000 hours of their time each year. In 2015, the company’s charitable foundation launched a $100,000 scholarship partnership with College Track.
John Howard has some big shoes to fill as he takes over for retired BB&T Insurance Holdings CEO H. Wade Reece, who guided the company to become the fifth largest insurance broker in the US. However, Howard is more than up to the task. With 20 years of experience in brokerage, underwriting and executive leadership, Howard is stepping up from his previous role as vice chairman and CEO of the company’s wholesale and specialty division. Prior to BB&T’s acquisition of Crump Group in 2012, Howard served as president and CEO of that company. He also has served as president of insurance services for BISYS, president of the Prudential Select Brokerage unit of Prudential Financial and president of the Retirement Services strategic business unit for Consesco.
JOHN TOMLINSON Vice president LOCKTON COMPANIES John Tomlinson has been providing innovative risk management solutions to the entertainment industry for more than 15 years. He spent his early career at his family’s firm in Nashville,
where he helped pioneer insurance for touring bands. After relocating to Los Angeles, Tomlinson immersed himself in the local music landscape, and now represents some of the world’s most notable musicians in EDM, pop, rock and hip-hop. For his pioneering work in insurance for the entertainment industry, Tomlinson was recently named one of Hollywood’s New Leaders by Variety.
EVAN GREENBERG
BRUCE LUCAS
Chairman and CEO ACE GROUP
Chairman and CEO HERITAGE INSURANCE HOLDINGS
Elected to lead ACE Group in 2004, Evan Greenberg certainly had a banner 2015. Under his leadership, ACE Group acquired insurance giant Chubb for $28.3 billion, creating a global leader in commercial and personal property and casualty insurance. In addition to his leadership at ACE Group, Greenberg serves on boards for a number of organizations, including the Coca-Cola Company, the Council of the Americas and the National Committee on United States-China Relations. He’s also chairman of the US-ASEAN Business Council, serves on the Center for Strategic & International Studies Southeast Asia Advisory Board and is a member of the Council on Foreign Relations.
Bruce Lucas leads Heritage Insurance Holdings, which has been the fastest-growing insurance company in the country for two years running. Under Lucas’ leadership, Heritage increased its direct written premium by 134% in 2014 – the largest growth for any P&C insurer in the country. Known for his entrepreneurial and leadership skills, Lucas had built an impressive resume even before coming to Heritage. Prior to taking the lead there, he served as CEO of Infinity Investment Funds and as an attorney with Weil, Gotshal and Manges, where he represented large clients, including GE and Enron. In addition to his leadership at Heritage, Lucas serves as a board member for the Pinellas Educational Foundation.
32
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 32
22/01/2016 9:55:06 PM
2016
LAURIE BRANCH President THE IROQUOIS GROUP Laurie Branch has shepherded The Iroquois Group since 1984. Under her leadership, the group has grown to include more than 2,250 member agencies in 41 states – including about 650 member agencies in the last five years alone. Branch has been recognized with the New York State Women of Excellence Award. She also serves as president of the Olean School Board and is an associate professor and member of the Board of Trustees at St. Bonaventure University.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 33
33
22/01/2016 9:55:12 PM
FEATURES
COVER STORY: HOT 100 TOM RILEY
MICHAEL J. O’CONNOR
President and COO ASSURED PARTNERS
CEO AON RISK SOLUTIONS
Tom Riley co-founded Assured Partners in 2011 and has acted as its president and COO ever since. Under his guidance, Assured Partners has become the fastest-growing independent insurance agency in the nation. In 2015, Riley guided the company through its acquisition by Apax Private Equity. Prior to co-founding Assured Partners, Riley spent more than 20 years with Brown & Brown, progressing from CFO to profit center leader to regional president. During that time, Riley organically grew and acquired companies with more than $350 million in revenue. His final position at Brown & Brown was as chief acquisition officer, during which he was involved in more than 100 acquisitions.
Michael O’Connor heads up Aon Risk Solutions, the global risk management arm of Aon plc, a global giant in risk advice and insurance. Under O’Connor’s leadership, Aon Risk Solutions was recognized as the Captive Manager of the Year and the Employee Benefits Specialist of the Year in October 2014. Before joining Aon in 2008, O’Connor was a partner at McKinsey & Company, where he served as a leader for the North American financial services practice and the North American insurance practice. He also serves on the boards of Chicago’s Rush University Medical Center and Museum of Contemporary Art.
HANK WATKINS President LLOYD’S NORTH AMERICA Hank Watkins heads up market development and operations at Lloyd’s North America. Under Watkins’ leadership, Lloyd’s has become the largest surplus lines insurer largest non-US-domiciled reinsurer in the US. Lloyd’s writes 38% of its global premium in the US – to the tune of $14.6 billion in 2014. Operating from nine offices, Watkins and his team work with syndicate underwriters, coverholders and Lloyd’s brokers to maintain and grow the market’s share of the specialty lines business that initiated the first relationships between London and North America more than 100 years ago. With more than 30 years of experience as an underwriter and broker at Chubb, Barney & Barney, Johnson & Higgins, Marsh and HRH, Watkins actively promotes the insurance industry to students and young professionals. Based in New York, he’s a member of the Board of Overseers at St. John’s University’s School of Risk Management and serves on the boards of the Insurance Industry Charitable Foundation’s Northeast Division and the International Insurance Society.
J. PATRICK GALLAGHER JR. Chairman, president and CEO ARTHUR J. GALLAGHER & CO. As chairman, president and CEO of Arthur J. Gallagher & Co., J. Patrick Gallagher Jr. leads a global team of more than 21,000 employees in 31 countries. The insurance broker and third-party claims administrator has grown substantially in recent years, fueled by robust M&A activity, new business production, and the sale of additional products and services to existing clients. In 2014, total revenues grew more than 45% to top $4.6 billion, and adjusted brokerage and risk management revenues grew 30% to nearly $3.6 billion. Gallagher completed 60 acquisitions in 2014 and another 29 in the first three quarters of 2015, expanding client-service capabilities and establishing robust operating platforms throughout the United Kingdom, Australia, New Zealand and Canada, in addition to the US. In 2015, the company was recognized by the Ethisphere Institute as a World’s Most Ethical Company for the fourth consecutive year, and by Forbes magazine as one of America’s best employers.
34
RICHARD GULLIVER President HUB INTERNATIONAL LIMITED Richard Gulliver has more than 35 years of experience in the insurance industry. As president of HUB International Limited, Gulliver oversees the company’s mergers and acquisitions; during his tenure, HUB has made more than 150 acquisitions, representing more than $1 billion in revenue. In January alone, Hub acquired the assets of three US insurance companies – RPG Solutions, Gathings Insurance Services and Cowan Benefit Services. Gulliver began his career in insurance in 1977, opening a small, one-man shop in Leamington, Ont., which still exists today as a HUB International operation. He also was instrumental in the creation of Network Solutions in 1995, and served as president of that organization. Gulliver played a key role in the creation of HUB International, and has been a critical force in its development and growth. “In the active pursuit of growth, we never lose sight of our moral mandate toward quality and fairness for our customers and employees,” he says.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 34
22/01/2016 9:55:18 PM
2016
TSUYOSHI NAGANO
HERB DOROW
President TOKIO MARINE
Producer MARIS BROWN ROSSELL INSURANCE GROUP
Tsuyoshi Nagano heads up Tokio Marine, a Japan-based global network that has grown dramatically in recent years through multiple acquisitions. Under Nagano’s leadership, Tokio Marine has acquired a number of American insurance companies, including a $7.5 billion deal to acquire HCC Holdings last year, which set a record as the largest acquisition by a Japanese insurer.
ANDREW CALDWELL President SMART CHOICE Andrew Caldwell was named president of Smart Choice, a network of more than 4,500 independent agents and 80 carrier partners, in November 2014. Under Caldwell’s leadership, the network saw its biggest growth year on record in 2015, adding more than 700 new agents. As of the third quarter of 2015, the company had posted personal lines growth of 56% and commercial lines growth of 101%. That translates to about $400,000 per month in new personal lines premium and $350,000 per month in new commercial lines premium. Prior to taking the helm as president, Caldwell served Smart Choice as director of commission accounting, account director, vice president and, most recently, executive vice president of business development.
IBA’s top producer for 2015, Herb Dorow specializes in contractors’, habitational and large property coverage at Maris Brown Rossell Insurance Group. Among IBA top producer nominees, Dorow had the largest revenue growth and second-largest client growth of 2014. The secret to his success, he says, is a passion for helping his clients. “Our clients have a business – and in most cases, a passion,” he says. “They put so much of themselves into creating this dream or success. It’s rewarding to know that on their worst day, we can be their best friend.”
RANDALL GOSS CEO US RISK INSURANCE GROUP Randall Goss founded US Risk Insurance Group in 1986 with a single office and a single product line. Today, the company has 16 offices across the globe, and is one of the largest excess and surplus lines providers in the nation. In January, the company acquired Texas-based MGA American Underwriting Managers, and last year acquired an ownership interest in Strategic Program Managers. Prior to founding US Risk, Goss worked as a certified public accountant for Ernst & Young. He’s also the co-author of the book Accounting and Auditing of Financial Institutions.
DAVIS D. MOORE
DAVID JORDAN
CEO WORLDWIDE FACILITIES
Owner NETRATE SYSTEMS
Davis Moore heads up Worldwide Facilities, a national insurance wholesale broker with offices across the US. Last year, Moore led the company’s recapitalization to better position it for continued growth. He was also elected to a three-year term on the NAPSLO board of directors. In 2014, under Moore’s leadership, Worldwide Facilities saw record growth to more than $500 million in premium volume.
David Jordan founded NetRate Systems in 1998 to create a powerful system for ISO-based commercial lines rating focused on the MGA and program business space. Prior to the founding of NetRate, Jordan served as president of Continental Systems. Jordan, who has more than 40 years of sales management and software development experience, also sits on the board of directors of Pershing Resources.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 35
35
22/01/2016 9:55:24 PM
FEATURES
COVER STORY: HOT 100 LEIGH ANN PUSEY President and CEO AMERICAN INSURANCE ASSOCIATION A prominent player in the insurance industry, Leigh Ann Pusey was recognized by The Hill in 2015 as one of Washington’s top lobbyists – her seventh consecutive appearance on the list. She’s also been recognized by the National
RAY SCOTTO
GREG ZIMMER
PATRICK O’LEARY SR.
Executive director TMPAA
President ALLIANT INSURANCE SERVICES
Producer TRIDENT INSURANCE AGENCY
As president of Alliant Insurance Services, Greg Zimmer is responsible for implementing the strategic direction of the company, as well as for mergers and acquisitions. In 2015, Zimmer oversaw several acquisitions, including Preferred Concepts, Mary Roach Insurance Agency, North Idaho Insurance, QBE US Agencies and American Benefits Consulting. Before joining Alliant in 1998, Zimmer and his partners built a successful financial services firm that was eventually sold to GMAC, where he served as senior vice president. He also served as vice president at Security Pacific.
A veteran producer, Patrick O’Leary has more than 30 years of insurance experience. With a specialty in affluent clients and million-dollar homes, O’Leary easily snagged a spot as one of IBA’s top 10 producers in 2015. According to O’Leary, the most satisfying thing about the job is helping people to protect some of the most valuable things in their lives. “In my particular role, I get to see people see their dream [of purchasing a home] come true,” he says. “I ease the new homeowner through the process of protecting their dream; from there, we continue to build the relationship through continuous interaction.”
Ray Scotto has been the executive director of the Target Markets Program Administrators Association since its launch in 2002. The TMPAA now counts more than 30% of that specialized marketplace as members. The organization offers a host of resources, including an online university, a web-based program marketing portal, best practice designations and two annual meetings. The TMPAA also compiles valuable information on the program space; recent research showed program insurance premiums have nearly doubled in the last five years, outpacing the performance of the overall P&C market.
DOMINIC CASSERLEY
HARRISON W. SCHEIDER
CEO WILLIS GROUP
Assistant vice president AMERICAN RISK MANAGEMENT RESOURCES
Dominic Casserley became the CEO of Willis Group in January 2013 after nearly 30 years at global management consulting firm McKinsey and Company. In that role, Casserley consulted with the world’s leading financial institutions to help solve strategic and operational issues. He also has written two books on financial services, advised business leaders on the former UK Prime Minister’s Business Council for Britain, and has served on the Confederation of British Industry CEO Climate Change Task Force and the Lord Davies review on increasing women’s presence on corporate boards. On this side of the pond, he worked on the Presidential Task Force on Market Mechanisms under Ronald Reagan. Last year, Casserley was instrumental in Willis Group’s $18 billion merger with risk management firm Towers Watson.
36
Journal as one of the most influential women in Washington. Pusey is frequently sought out by national media for her expertise. Prior to leading the AIA, she served as deputy assistant to President George H.W. Bush in the White House Office of Public Liaison, communications coordinator for House Speaker Newt Gingrich and deputy director of communications for the Republican National Committee.
In more than a decade in the insurance business, Harrison Scheider has carved out a specialty in environmental risk. His passion for the business and conscientiousness in developing the expertise to serve his clients well earned him a spot among IBA’s top 10 producers in 2015. “The most satisfying part of my job is solving problems,” Scheider says. “Every day I have the opportunity to develop creative risk management solutions and educate my clients.”
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 36
22/01/2016 9:55:30 PM
2016
BRIAN HANUSCHAK President VICTOR O. SCHINNERER In September, Brian Hanuschak took the top job at Victor O. Schinnerer & Company, one of the world’s largest underwriting managers of specialty insurance programs. Schinnerer currently handles nearly $500 million in premiums through a network of more than 9,600 active brokers. Prior to his appointment as president, Hanuschak served as the company’s managing director of sales and distribution, spearheading new program development, sales and marketing strategy, and the cultivation of broker and carrier relationships. Before joining Schinnerer, Hanuschak – an industry veteran with more than three decades of experience – was a managing director in the treaty department at Guy Carpenter. He’s also held senior management positions in subsidiaries of Travelers, GE Capital and General Reinsurance.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 37
37
22/01/2016 9:55:36 PM
FEATURES
COVER STORY: HOT 100 MAURICE GREENBERG
JUSTIN BEIDLEMAN
Chairman and CEO STARR COMPANIES Maurice Greenberg is the chairman and CEO of Starr Companies, one of the largest and fastest-growing insurance companies in the world. Under Greenberg’s leadership, Starr has launched several new products (including fraud and impersonation coverage and an umbrella product for small businesses), and has made inroads into the Chinese market with the acquisition of Shanghai-based Dazhong Insurance Company. Until 2005, Greenberg was chairman and CEO of AIG, which he led to become the world’s largest insurance and financial services company. Greenberg also serves on Yale University’s President’s Council on International Activities, as honorary vice chairman of the Council on Foreign Relations and as vice chairman of the National Committee on United States-China Relations.
WANG QUNBIN Executive director and president FOSUN INTERNATIONAL
TODD BIXLER President and CEO K&K INSURANCE GROUP As president and CEO for K&K Insurance Group, Todd Bixler oversees nearly 300 employees in product development, marketing, underwriting, policy issuance and claims handling for one of the leading provider of sports, leisure and entertainment insurance products throughout the US and Canada. Under Bixler’s guidance, K&K has seen a total growth rate of more than 65% in premium and more than 50% in revenue over the last five years. The company also introduced new program coverage last year for resorts, campgrounds, inflatables, Girl and Boy Scouts, RV dealerships, and K-12 accident coverage. Prior to becoming president and CEO, Bixler served as controller, CFO, chief administrative officer, executive vice president and COO.
38
Under the leadership of Wang Qunbin China-based insurance giant Fosun International raised $1.5 billion to fund acquisitions in 2015, and acquired many American insurers, including Meadowbrook and Ironshore. In addition to his duties at Fosun, Wang serves as a director of Ironshore, Nanjing Nangang, Fosun Insurance Portugal and other companies. He’s also been a director of Fosun High Tech since its establishment in 1994. Prior to joining Fosun, Wang was a lecturer at the Genetic Research Institute of Fudan University. He’s the recipient of Enterprise Asia’s Asia Pacific Outstanding Entrepreneur Award and was named 2014’s Best Asian Corporate Director by Corporate Governance Asia. Wang also has been recognized by the Harvard Business Review as one of the world’s best-performing CEOs.
GEOF MCKERNAN CEO NSM INSURANCE GROUP Geof McKernan leads NSM Insurance Group, a leader in the development, implementation, marketing and underwriting of insurance programs for
Producer ARBOR INSURANCE GROUP Justin Biedleman has been in the insurance business for just over five years, but he’s already landed on IBA’s Top Producers list. Specializing in captive insurance solutions with a focus on the construction and restaurant industries, Biedleman says his drive and determination have been key to his success. “Never give up, and don’t let a ‘no’ discourage you from obtaining a ‘yes,’” he says. “A producer can’t be afraid to pick up the phone and begin calling or hit the streets and begin walking in and out of businesses.”
PETER HANCOCK CEO AIG AIG’s Peter Hancock has weathered a tough year. Not only did thirdquarter earnings come in well under analysts’ expectations (and down about 60% from the third quarter of 2014), but Hancock has also had to weather calls from activist investor Carl Icahn, who wants the company to separate its life and mortgage insurance subsidiaries to create three independent companies. Hancock, however, has stood firm, saying that removing AIG’s government designation as a systemically important financial institution would be a distraction from his goal of growing the company while cutting costs.
niche markets. Last year, McKernan helped shepherd a deal in which AIG purchased a controlling stake in the company, a move he said “will power our acquisitions and internal growth plans. Ultimately, AIG’s investment enables us to continue to be an entrepreneurial organization and to seek new opportunities and programs.”
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 38
22/01/2016 9:55:44 PM
2016
RICHARD SKORUPSKI Producer MEEKER SHARKEY ASSOCIATES
THOMAS M. KUZMA President and CEO NAUTILUS INSURANCE Thomas Kuzma joined Nautilus Insurance Group – a leader in excess and surplus lines P&C insurance – in 1986. Since 1997, he’s served as the company’s president and CEO, moving up from his previous position as vice president of underwriting. Last year, under his leadership, Nautilus made several enhancements to its coverage, including additions to its cyber coverage, commercial excess and contractor’s general liability products.
One of IBA’s top producers for 2015, Richard Skorupski had the highest total 2014 volume of any of the nominees. Skorupski says his specialty in insurance and risk management for nonprofit organizations has become extremely important to him. “Ultimately, I felt if I was going to work with businesses, I wanted to work with businesses that had a social conscience and served individuals in need,” he says. “Being an insurance agent allows me to help these organizations meet their goals by protecting their assets.”
MONICA J. LINDEEN President NAIC As president of the National Association of Insurance Commissioners, Monica Lindeen leads the organization’s efforts to establish standards and best practices, conduct peer review, and coordinate regulatory oversight among state insurance commissioners. Lindeen also
ADAM HAMM Insurance commissioner NORTH DAKOTA North Dakota’s insurance commissioner since 2007, Adam Hamm is an active force in the National Association of Insurance Commissioners. The NAIC’s immediate past president, Hamm now chairs the organization’s new Cybersecurity Task Force, which this year released a consumer ‘bill of rights’ related to data breaches. Hamm serves on numerous NAIC committees, and was elected by his fellow insurance commissioners to serve on the US Financial Stability Oversight Council, a 15-member body of the nation’s chief financial regulators, where he represents the interests of state insurance regulators across the nation.
serves as the securities and insurance commissioner of Montana, where she’s overseen more than $5 million in consumer recoveries. She’s also worked hard to serve insurance providers – the number of captives domiciled in Montana has increased by more than 500% during her tenure. Her office also has reduced the approval time for new forms from three weeks to one week. Lindeen is also a recipient of the NAIC’s Excellence in Consumer Advocacy Award.
CARSON LYONS
BRIAN FOLEY
Global product line manager AIG
Producer CORCORAN & HAVLIN BENEFITS GROUP
Carson Lyons has been a lifelong aviation enthusiast. That passion has put him in good stead as AIG’s global product line manager for aerospace – and it allowed him to see a business opportunity in the burgeoning drone craze. Last year, Lyons’ unit launched AIG’s stand-alone unmanned aircraft insurance, which covers physical damage and third-party liability in a way that’s tailored to the unique needs of commercial drone use. As the use of unmanned aircraft grows across numerous industries, Lyons and his team had to craft coverage that was versatile and innovative. And they certainly succeeded: AIG won a 2015 Business Insurance Innovation Award for the program.
After nearly 20 years in the business, Brian Foley knows insurance inside and out. One of IBA’s top 10 producers for 2015, Foley specializes in employee benefits. He was also among the top producers in revenue from new policies and policy growth in 2014. “This business is not easy,” he says. “The most important thing is to consistently bring value to customers and prospective customers. You have to let them know why you are different.”
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 39
39
22/01/2016 9:55:52 PM
FEATURES
COVER STORY: HOT 100 BENJAMIN M. SALZMANN
MICHAEL RICE
CEO ACUITY
CEO JLT SPECIALTY
Under Benjamin Salzmann’s watch, Acuity has gained national recognition as one of the best places to work in the country – it was named the best insurance firm to work for by Fortune magazine. Acuity offers its employees unlimited tuition reimbursement, no cap on paid sick days and a 401(k) plan with an 8% company match – not to mention a 65-foot indoor Ferris wheel at company headquarters. With more than $1.2 billion in revenue, Salzmann’s insistence on happy employees is paying real dividends.
Michael Rice came to JLT Group in 2014 as the CEO of the US specialty division, where he oversees the company’s US operations and the expansion of its specialized industry and product focus. Rice is an acknowledged expert in D&O, fiduciary liability, cyber and professional liability. Last year, under his leadership, JLT Specialty launched an entertainment and hospitality division and a marine specialty practice. The company also partnered with crisis management firm Firestorm to conduct two first-of-their-kind virtual cyber breach exercises for businesses.
RICHARD MILEY President and CEO BROADSTREET PARTNERS Richard Miley founded BroadStreet Partners a little over a decade ago and has led it to become the 15th largest insurance broker in the country, with offices from coast to coast. BroadStreet’s unique co-ownership business model is one that appeals to a variety of partners, from single-owner firms to complicated ESOPs. And it’s been a successful model: BroadStreet has seen a compound annual growth rate of 21% since its founding. Miley’s unique vision for BroadStreet connects the best talent in the industry under a proprietary partnership model that addresses the reality of the industry’s demographics, while simultaneously responding to how entrepreneurs want to pass the torch to the next generation of agency leaders. “Our approach works best for a certain type of agency owner … the ones that are not done leading, not done growing, not done building and not done mentoring,” he says.
President RENAISSANCE ALLIANCE J. Bruce Cochrane heads up Renaissance Alliance, one of the fastest-growing networks in the country. Cochrane launched Renaissance Alliance in 1999. Today, the company consists of more than 90 agencies writing more than $465 million in premium. And Renaissance Alliance isn’t the only insurance innovation Cochrane has pioneered: He also built some of the first group property/liability programs in New England, as well as risk funding alternatives that include group captives, rent-a-captives and self-insured groups.
ROBERT S. BENTLEY
BRIAN POOL
President, US and Canada division MARSH
Producer LONESTAR INTEGRA INSURANCE SERVICES
As president of Marsh’s US and Canada division, Robert Bentley oversees US core brokerage, Canada, and a portfolio of businesses that includes sponsored programs, private client services and The Schinnerer Group, one of the world’s leading underwriting managers of professional liability and specialty programs. In 2015, Marsh was named North America Insurance Broker of the Year by Reactions magazine. A 27-year veteran of insurance, reinsurance and catastrophe modeling, Bentley also has served as COO and a board member at Risk Management Solutions, where he took on global responsibilities for strategic execution across both internal and client-facing operations. Prior to that, he spent 17 years at Guy Carpenter, where he served as global COO, Western Region manager and the head of global analytics.
40
J. BRUCE COCHRANE
Brian Pool was one of IBA’s top 10 producers in 2015. A producer for Lonestar Integra Insurance Services, Pool says the secret to his success is never forgetting his clients’ needs. “Generate clients, not customers, and always pick up the phone when it rings,” he says. “Relationships and trust are a massive part of this industry, and you must have both with your clients if you intend to work with them long-term.”
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 40
22/01/2016 9:56:00 PM
2016
MIKE SICARD President and CEO USI INSURANCE SERVICES Mike Sicard took the helm at USI in 2007. In 2014, he oversaw one of the company’s largest deals ever – the acquisition of 40 brokerages from Wells Fargo Insurance Services. Prior to his service at USI, Sicard served as COO for Willis Group. He also has held positions as the director of strategic planning for Willis Group and the senior engagement manager for McKinsey & Co.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 41
41
22/01/2016 9:56:09 PM
FEATURES
COVER STORY: HOT 100 JIM HAYS
J. PAUL CONDRIN III
CEO HAYS COMPANIES
President of commercial insurance LIBERTY MUTUAL INSURANCE GROUP
Jim Hays founded Hays Companies in 1994. Today, it’s a leading risk management and employee benefits firm with more than 700 employees in more than 30 offices across the country, most recently in New York. It’s now the 18th-largest insurance brokerage in the US, serving industries as diverse as manufacturing, hospitality and aviation. The company also has a long-standing history of giving back, supporting charities such as the United Way and PARC, a nonprofit that provides opportunities for children and adults with developmental disabilities.
J. Paul Condrin III serves as executive VP and president of commercial insurance at Liberty Mutual Insurance Group, where he’s led the commercial insurance unit to embrace emerging technology. Last year, Liberty Mutual was the only carrier to receive Applied Systems’ Pinnacle Award for advancing the adoption of automation. Condrin also has served Liberty Mutual as president of commercial markets, SVP and CFO, and a variety of other roles.
STEVE CATLIN Executive deputy chairman XL GROUP Steve Catlin has been a force in the insurance world for decades since beginning his insurance career in London in 1973. In 1984, he founded Catlin Underwriting Agencies, and eventually transformed the small agency into the Catlin Group, a multinational insurance company with 2,300 employees in 25 countries. Last May, the Catlin Group was acquired by the Ireland-based XL Group, and Catlin became that company’s executive deputy chairman. He was also inducted into the prestigious International Insurance Society’s Insurance Hall of Fame last year.
MATTHEW F. POWER EVP and head of strategic development LEXINGTON INSURANCE COMPANY Matthew Power heads up strategic development at Lexington, the largest US-based surplus lines insurer. Last year, Lexington introduced the innovative Celebrity Product RecallResponse coverage, which covers companies when a celebrity endorser has a public fall from grace. Prior to this role, Power served as AIG’s chief innovation and strategic relationship officer. He’s also worked as president of Risk Specialists Companies, a network of wholly owned AIG brokerage subsidiaries.
42
TOBY MERRILL
DAVE O’BRIEN
Division senior vice president ACE GROUP
CEO ZYWAVE
Toby Merrill heads up ACE Group’s Global Cyber Risk Practice, an award-winning unit that’s pushing the boundaries of cyber risk innovation. In June, ACE Group won the Cyber Risk Innovation of the Year Award for Loss Mitigation Services, and Merrill himself was named the US Cyber Risk Industry Person of the Year. Merrill brings two decades of experience to his position as the Global Cyber Risk Practice’s division vice president. Prior to taking the reins at the unit, Merrill was ACE Group’s vice president and national product manager for network security, privacy and technology E&O liability products in the US.
Under Dave O’Brien’s leadership, insurance technology provider Zywave has expanded its business with the introduction of new products and the acquisition of several insurance technology companies, including P&C software provider Intygral, PLAN DOC Builder and FutureOffice Network. Zywave also has formed strategic partnerships with other companies, including TRICAST and Sitkins Group.
TIMOTHY TURNER President and CEO RT SPECIALTY Timothy Turner, a 25-year veteran of the insurance industry, heads up RT Specialty, Ryan Specialty Group’s wholesale brokerage. Earlier this year, Turner oversaw RT Specialty’s acquisition of A.J. Renner & Associates, a leading wholesale insurance broker in the life science space – and the company where he began his insurance career back in 1987. Prior to taking the reins at RT Specialty, Turner served as president of CRC Insurance Services, at the time the largest wholesale broker in the US. Before he entered the insurance industry, he graduated from the Detroit Police Academy and served on the Wayne County SWAT Team and as an undercover officer with the Michigan State Police’s Narcotics Cocaine Task Force.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 42
22/01/2016 9:56:16 PM
2016
T.J. RYAN III
DIANA GRANILLO
CEO ISU INSURANCE AGENCY NETWORK
Vice president LEAVITT UNITED INSURANCE
T.J. Ryan III has headed up the ISU Insurance Agency Network since 1985. Under his guidance, ISU has grown to become the second-largest agency network in the US, boasting more than $2 billion in written premium, more than 150 offices in 28 states and more than 1,600 full-time employees. It provides its clients with exclusive coverage, expert claims advice and access to more than 350 insurance companies and a nationwide database of insurance knowledge.
ROGER LUTTRELL Chairman COMBINED AGENTS OF AMERICA In 2015, Roger Luttrell took over as the chairman of Combined Agents of America. Founded in 1997, CAA has grown from eight member agents to 52 members who wrote more than $738.5 million in combined property and casualty premiums in 2014. In addition to his duties as CAA chairman, Luttrell is a 35-year industry veteran and a partner and owner of Benton Luttrell Brown Insurance.
BRUCE G. KELLEY President, CEO and treasurer EMC INSURANCE GROUP Bruce Kelley has been president of EMC Insurance Group, one of the world’s largest mutual and cooperative insurers, since 1992.Under Kelley’s leadership, EMC has been named one of the most trustworthy financial companies by Forbes. It also ranked among Chief Executive magazine’s best companies for leaders. Prior to his appointment as president and CEO, Kelley served as executive vice president of EMC and Employers Mutual Casualty Company.
Diana Granillo began her insurance career in 1986 and has worked for both insurance agencies and companies. She joined United Valley in 2004, leading the daily operations of the agency. In January 2006, the board of directors elected Granillo vice president. In addition to the retail agency operations of United Valley, she also has managed the marketing, services and programs departments of the membership organization. In 2014, the retail agency was renamed Leavitt United Insurance, and Granillo has focused on building that entity since its separation from United Valley. She is also an integral part of the merger team, playing a key role in the more than a dozen acquisitions the agency has made over the last 12 years.
GREGORY L. WILLIAMS CEO ACRISURE An accomplished entrepreneur and business leader, Gregory Williams has successfully founded and managed three companies in the course of his career. In 2005, he co-founded Arcisure to invest in independent insurance agencies throughout the US. Under Williams’ leadership, the company has successfully completed more than 110 acquisitions since its inception. And with a compounded annual growth rate of 81%, Arcisure has become one of the largest privately owned insurance companies in the country. Williams also has been a board advisor to various companies, including a top retail design firm, and he’s provided expansion consultation to a production company that has produced more than 60 documentaries for A&E.
JOEL CAVANESS
CURTIS BARTON
President RISK PLACEMENT SERVICES
Co-founder and president VENTURE PACIFIC INSURANCE SERVICES
As president of Risk Placement Services, Joel Cavaness heads up one of the nation’s largest managing general agencies and fastestgrowing P&C wholesalers. His guidance helps drive the company’s innovative program design, commitment to long-term relationships and high professional standards to ensure continual growth. Over the past two years, RPS has acquired nine companies, including Monument Insurance Services, Excel Insurance Services and American Wholesalers Underwriting.
In 1997, Curtis Barton co-founded Venture Pacific Insurance Services, and the company quickly grew to become one of the country’s top independent brokerages, providing commercial and personal lines, benefits, surety, risk management, and financial services. Under Barton’s guidance, the company has maintained double-digit growth each year, including a 33% revenue increase last year. Barton also guided Venture Pacific through the expansion of its proprietary online niche platform and completed the acquisition of two Southern California firms.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 43
43
22/01/2016 9:56:22 PM
FEATURES
COVER STORY: HOT 100 BROOKS CHASE
BRADY KELLEY
President, Distinguished Specialty DISTINGUISHED PROGRAMS
Executive director NAPSLO
A 30-year industry veteran, Brooks Chase leads Distinguished Specialty, a division created by Distinguished Programs’ acquisition of Fulcrum, which combined with Distinguished’s National Specialty Underwriters. The new entity, created in October 2015, specializes in the hospitality and real estate industries – industries on which Chase is an acknowledged expert, having spent the majority of his career managing risk for the resort and hotel industries. Prior to taking the lead at Distinguished Specialty, Chase was president and CEO of the Resort Hotel Association, a member-owned organization that provides insurance products and risk management support for resorts and luxury hotels. He’s also served as president and CEO of the Resort Hotel Insurance Company, and as a member of the American Hotel & Lodging Association’s Risk Management Committee.
RAY WILLIAMS CEO SECURERISK
REID FRENCH CEO APPLIED SYSTEMS Reid French joined Applied Systems in 2011 after seven years at Intergraph Corporation, where he was instrumental in growing revenue by 60%. As CEO, French spearheads the development and fostering of relationships in the Applied community. Under French’s leadership, Applied Systems is meeting the demands of an increasingly global market by providing new technology and expanded multinational capabilities. And French’s vision is paying off: Three Applied products were chosen by IBA readers as top in their field in the 2015 ‘Best of the Best’ rankings – more than any other company.
44
Ray Williams has led SecureRisk since 1995. One of the largest agency partnerships in the nation, SecureRisk is owned by nearly 100 independent agencies, combining to write more than $2 billion in premium for more than 200,000 clients; last year, it was ranked the fourth-largest agency partnership in the nation. In addition to leading SecureRisk, Williams is the CEO and principal of Williams, Turner and Mathis, an insurance agency founded by his father in 1970. His accolades include the Independent Insurance Agents of Georgia’s Past President Award and the IIAGA Edgar Dunlop Award.
Since 2011, Brady Kelley has served as executive director of NAPSLO, where he guides the organization’s staff activities, member services and business operations. Last year, under Kelley’s guidance, NAPSLO pushed for and won several important legislative victories, including the modernization of surplus lines regulation and taxation under the Nonadmitted and Reinsurance Reform Act. Prior to joining NAPSLO, Kelley served as the chief financial and business strategy officer for the National Association of Insurance Commissioners.
BILL TRZOS President and CEO ATLAS GENERAL Under the leadership of Bill Trzos, Atlas General has become one of the largest privately owned program administrators in the nation, and last year entered a strategic partnership with Vanbridge General, an insurance intermediary, capital advisory, insurance and reinsurance management firm. But smart business moves are nothing new to Trzos. In 2001, he founded Cypress Point Insurance Services, where he managed more than $300 million in program premium. Later, he headed the commercial division at Arrowhead Financial, where he managed a team that wrote more than $1.6 billion in premium.
INGA BEALE CEO LLOYD’S OF LONDON Inga Beale is the first female CEO in Lloyd’s of London’s more than 325-year history. Prior to being appointed CEO at Lloyd’s, Beale was group CEO at Canopius Group. She’s also served as group CEO at Convernium in Switzerland and as a member of the Group Management Board for Zurich Insurance Group.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 44
22/01/2016 10:30:15 PM
2016
VALERIA RICO CEO CONFIE Valeria Rico has led the team since at Confie 2012. In four years, she more than doubled the company’s revenues from just under $200 million in 2012 to nearly $500 million at the end of 2015. In the same time, she has grown Confie’s reach to more than 680 offices in 17 states. Under Rico’s leadership, Confie has become the leading personal lines insurance brokerage in the US.
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 45
45
22/01/2016 9:56:38 PM
FEATURES
COVER STORY: HOT 100 BERND HEINZE
EDWARD LARGENT III
Executive director AAMGA
President and CEO WESTFIELD INSURANCE
Bernd Heinze is the executive director of the American Association of Managing General Agents, an organization that represents the interests of MGAs before regulatory agencies, elected officials and other industry associations in the US, Canada and Europe. Heinze is a staunch advocate for AAMGA’s mission and is a leading voice in the industry, making his presence known in legislative matters like TRIA and NARAB and helping to recruit, train and retain the next generation of insurance professionals. In 2015, Heinze helped facilitate the entry of several Canadian MGAs into the organization.
Diverse leadership roles in the property & casualty industry have given Ed Largent unique perspective as the head of Westfield Insurance. Largent joined Westfield in 1986, has been president since 2011, and was appointed CEO and president in July 2015. Under his leadership, Westfield was named the Florida Association of Insurance Agents’ Trusted Choice Company of the Year. Throughout his career, Largent has demonstrated success in leading teams focused on operational performance improvements, strengthening distribution management, investing in claims capabilities, and enhancing the quality and depth of data and analytics to improve business performance. Largent’s diverse background is also exemplified in his volunteer activities; he serves on the boards of several industry and civic organizations.
JIM MASIELLO Founder, chairman and CEO SIAA Jim Masiello is a leading voice in the insurance industry. In 1983, he created the Satellite Agency Network and grew it to 310 member agencies in New England and eastern New York. That model was replicated in 1995 as
the Strategic Insurance Agency Alliance [SIAA], which has created more than 3,400 new independent agencies since 2000. In 2015, SIAA celebrated its 20th anniversary and signed its 5,700th member. Members also reached more than $6 billion in combined in-force premium in 2015. Masiello is a former president of the New Hampshire Life Underwriters Association and the New England Life Insurance Forum.
INDEX BY COMPANY COMPANY
PAGE NAME
COMPANY
PAGE NAME
COMPANY
PAGE NAME
AAMGA
46
Bernd Heinze
Arbor Insurance Group
38
Justin Beidleman
DeWitt Stern
27
LeConte Moore
ACE Group
32
Evan Greenberg
Arch Capital Group
47
Constantine Iordanou
Distinguished Programs
44
Brooks Chase
ACE Group
42
Toby Merrill
Arthur J. Gallagher & Co.
34
J. Patrick Gallagher Jr.
EMC Insurance Group
43
Bruce G. Kelley
Acrisure
43
Gregory L. Williams
Assured Partners
34
Tom Riley
EZLynx
28
Nag Rao
Acuity
40
Benjamin M. Salzmann
Atlas General
44
Bill Trzos
Fosun International
38
Wang Qunbin
Agency Flood Resources
30
Dan Freudenthal
BB&T
32
John Howard
Freberg Environmental
27
Stacy Brown
AIG
38
Peter Hancock
Beacon Hill Associates/PartnerOne 28 Environmental
Bill Pritchard
General Star
28
Matthew Brown
AIG
39
Carson Lyons
26
Peter Eastwood
Great American Insurance Group
28
Donald Larson
Alliant Insurance Services
36
Greg Zimmer
Berkshire Hathaway Specialty Insurance
Hays Companies
42
Jim Hays
40
Richard Miley
Heffernan Insurance Brokers
32
Mike Heffernan
American Insurance Association
36
Leigh Ann Pusey
BroadStreet Partners
American Risk Management Resources
47
Kari A. Dybdahl
Brown & Brown
30
J. Powell Brown
Heritage Insurance Holdings
32
Bruce Lucas
Burns & Wilcox Brokerage
25
Denis Brady
Hiscox
31
Nicole Goodwin
American Risk Management Resources
36
Harrison W. Scheider
Combined Agents of America
43
Roger Luttrell
HUB International Limited
34
Richard Gulliver
AmWINS
29
W.H. "Skip" Cooper
Confie
45
Valeria Rico
Independent Insurance Agents of Wisconsin
30
Matt Banaszynski
Aon Risk Solutions
34
Michael J. O'Connor
Corcoran & Havlin Benefits Group
39
Brian Foley
Integro
28
Anne Anderson
Reid French
CrossFit Risk Retention Group
26
Eric Reingen
Ironshore
27
Kevin H. Kelley
Applied Systems
46
44
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 46
22/01/2016 9:56:44 PM
2016
DAVID LOCKTON
KARI A. DYBDAHL
Chairman LOCKTON COMPANIES
Vice president and broker AMERICAN RISK MANAGEMENT RESOURCES
In 2003, David Lockton became chairman of the company founded by his late brother, Jack. Since then, Lockton has guided the firm to become the world’s largest privately held independent insurance broker. Under his leadership, Lockton has sustained its record of four decades of continuous growth, as well as a 95% client retention rate.
Although still young, Kari Dybdahl has made a name for herself in the insurance industry. She was one of IBA’s top 10 producers for 2015, having grown her book of business by more than 100% each year for the last five years. She also created her own production team last year and recently designed an insurance program for a franchisor with more than 300 franchises, as well as designing and implementing a franchise division for American Risk Management Resources.
CONSTANTINE IORDANOU Chairman ARCH CAPITAL GROUP Constantine Iordanou has been the president and CEO of Arch Capital Group since 2003 and chairman of the board since 2009. Under his leadership, the company’s stock shares hit a new 52-week high in October. Prior to joining Arch, Iordanou served in a variety of positions at Zurich Financial Services and its affiliates, including as senior executive vice president of group operations and business development for Zurich Financial Services, president of Zurich-American Specialties, COO and CEO of Zurich-American and CEO of Zurich North America.
COMPANY
PAGE NAME
COMPANY
PAGE NAME
COMPANY
PAGE NAME
ISU Insurance Agency
43
T.J. Ryan III
NAIC
39
Monica J. Lindeen
Starr Companies
38
Maurice Greenberg
JLT Specialty
40
Michael Rice
NAPSLO
44
Brady Kelley
The Hanover Group
25
Fred Eppinger
K&K Insurance Group
38
Todd Bixler
NAS Insurance
31
Michael Palotay
The Iroquois Group
33
Laurie Branch
Keystone Insurers Group
26
David E. Boedker Sr.
Nautilus Insurance
39
Thomas M. Kuzma
TMPAA
36
Ray Scotto
Leavitt United Insurance
43
Diana Granillo
NBIS
31
Jim Jinhong
Tokio Marine
35
Tsuyoshi Nagano
Lexington Insurance Company
42
Matthew F. Power
NetRate Systems
35
David Jordan
Trident Insurance Agency
36
Patrick O'Leary Sr.
Liberty Mutual Insurance Group
26
Chad E. Mumford
North Dakota
39
Adam Hamm
US Risk Insurance Group
35
Randall Goss
Liberty Mutual Insurance Group
42
J. Paul Condrin III
NSM Insurance Group
38
Geof McKernan
USI Insurance Services
41
Mike Sicard
Lloyd’s of London
44
Inga Beale
PCI
26
David A. Sampson
Venture Pacific Insurance Services
43
Curtis Barton
Lloyd's North America
34
Hank Watkins
PURE
31
Ross Buchmueller
Victor O. Schinnerer & Company
37
Brian Hanuschak
Westfield Insurance
46
Edward Largent III
Willis Group
36
Dominic Casserley
Wolf Point Advisors
28
Geno Mattioda
Wolf Point Advisors
28
Dominic Volini
Worldwide Facilities
35
Davis D. Moore
WR Berkley
30
William R. Berkley
XL Group
42
Steve Catlin
Zurich Insurance
32
Bryan Salvatore
Zywave
42
Dave O'Brien
Lockton Companies
47
David Lockton
Rancho Mesa Insurance Services
30
Sam Brown
Lockton Companies
32
John Tomlinson
Renaissance Alliance
40
J. Bruce Cochrane
Lonestar Integra Insurance Services
40
Brian Pool
Risk Placement Services
43
Joel Cavaness
Maris Brown Rossell Insurance Group 35
Herb Dorow
RT Specialty
42
Timothy Turner
Markel
31
Thomas S. Gayner
Ryan Specialty Group
42
Patrick G. Ryan
Marsh
40
Robert S. Bentley
SecureRisk
44
Ray Williams
Meadowbrook
39
Robert S. Cubbin
SIAA
46
Jim Masiello
Meeker Sharkey Associates
39
Richard Skorupski
Smart Choice
35
Andrew Caldwell
www.ibamag.com
24-47_Hot 100-SUBBED 4.indd 47
47
22/01/2016 9:56:54 PM
FEATURES
PRODUCERS ON NETWORKS
PRODUCERS ON NETWORKS
Insurance Business America asked thousands of producers why they have or haven’t chosen to join a network. In this exclusive article, we reveal what they had to say about the pros and cons of network membership
48
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 48
22/01/2016 7:33:40 AM
S
Are you a member of a network? As part of our survey, we asked producers and agents across the country to tell us if they are part of a network or not. If their answer was yes, we then asked them to rate the benefits of being with a network in terms of their importance to the producer. The list of potential benefits included marketing; access to an increased number of companies and products; claims, administrative and customer support; access to niche and nontraditional markets; business consulting; training and education; and commissions and profit share. Meanwhile, the producers we surveyed who were not already part of a network were asked to explain their reasons for not joining. Options included time commitment, sharing of clients, negative past experiences, cost/loss of commissions and the potential loss of independence. They were also asked what could persuade them to join a network, if anything. So what did producers have to say?
chairman of ABD Insurance & Financial Ser vices, belie ves his company ’s relationship with WBN Global has provided a platform for it to compete globally, thanks in large part to the increased access it has offered to a vast number of new companies and products. “Our network access allows us to compete seamlessly against the large global brokers,” he says. “We could not play in the technology sector without a great network.” Peter Alexakis of PJA Insurance Services, part of Networked Insurance Agents [NIA], also believes that having direct access to major carriers that write a variety of personal and commercial lines has been of great benefit to his business. “As the owner of a small, primarily property & casualty agency with goals to continue to grow our book of business, the combination of focusing on growth with our directly appointed carriers and utilizing the network’s program represents the perfect fit for us,” he says.
LEADING BENEFITS OF BEING IN A NETWORK
COMMISSIONS AND PROFIT SHARE
ACCESS TO AN INCREASED NUMBER OF COMPANIES AND PRODUCTS FROM THE early popularity of MySpace to the global explosion of Facebook, social networks have become part of our everyday lives. However, the concept of networking has been around much longer than the Internet – it has long been seen as key to running a successful business. For many smaller companies, the prospect of making new contacts and entering different markets is something they may not have the time or resources to achieve. In the insurance sector, however, there is a solution in the form of networks and alliances. However, just what do producers want from their networks, and why do some producers prefer to go it alone? Insurance Business America conducted an in-depth survey with producers and agents throughout the US to find out.
IMPORTANCE TO PRODUCERS: 8.88
According to our survey, the most important benefit of being in a network is the increased access to insurance companies and their products – which was also named as the leading benefit in last year’s survey. “When one is first starting on their own, it helps tremendously [to have access to more companies],” says Kevyn Heck of the Kevyn Heck Insurance Agency, a member of the Insurance Producers Network [IPN]. “One could not go out and get access to the carriers we have, for the amount of time we’ve had access to them. It has helped keep the individual costs down and allowed for some quick successes.” Brian Hetherington, CEO and co-
IMPORTANCE TO PRODUCERS: 8.75
Perhaps it’s no surprise that commissions and profit share represented the second most important incentive for producers who had joined a network. In fact, the importance of commissions and profit share has leapt by nearly a full point over the last 12 months, compared to last year’s survey – from 7.79 to 8.75. “It is the case in Minnesota, and in the industry in general, that captive writers are looking for higher commissions by working on their own,” says Frank Whitcomb, consultant to the Minnesota Independent Insurance Agents and Brokers Association. “If they find a network that says, ‘I can give you an expanded market and a high commission split,’ then this is a win-win situation.” Commissions and profits have a role to play, but shouldn’t be seen as the key incentive when choosing a network,
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 49
49
22/01/2016 7:33:50 AM
FEATURES
PRODUCERS ON NETWORKS
OTHER IMPORTANT BENEFITS OF JOINING A NETWORK
MEMBERS ON NETWORK BENEFITS There are many benefits associated with membership in a network or alliance. We asked producers who had joined networks to rate, on a scale of 1 (least important) to 10 (most important), the following benefits:
ACCESS TO NICHE AND NONTRADITIONAL MARKETS 7.84
Access to an increased number of companies and products
MARKETING 7.27 OVERALL BUSINESS CONSULTING 7.13
Commissions and profit share
TRAINING AND EDUCATION 7.11 ADMINISTRATIVE SUPPORT 6.21
Access to niche and nontraditional markets
CUSTOMER SERVICE SUPPORT 6.15
Marketing
Overall business consulting
Training and education
Administrative support
Customer service support
Talent recruitment
Claims support
0
1
2
3
“Our network access allows us to compete seamlessly against the large global brokers. We could not play in the technology sector without a great network” 50
4
5
6
7
8
9
10
however – at least, that’s the verdict of Joe Watts, vice president of Holmes Murphy, which focuses on property & casualty and employment benefits. “Focus on revenue and revenue sharing would be counterintuitive to a collaborative network,” he says. “Having said that, we enjoy a vicarious benefit in partnering with the firms we partner with because insurance carriers view our network collectively. Combined, our member/owners represent a substantial amount of industry revenue. There is benefit in that.”
When selecting a network, it’s not all about access to companies and commissions. Other important benefits highlighted in the survey include access to niche and nontraditional markets, marketing, overall business consulting, and training and education. “I am a huge supporter of training and education for all staff, including management,” says Lisa Greenberg of Cornerstone Specialty Insurance Services, part of the NIA. “I feel that if the management is well-trained and -educated, then the staff will follow suit. Most of my staff, including myself, have insurance designations such as CIC and CISR, and my network has helped with that.” However, when searching for a network, perhaps the most important factor to consider is your individual circumstances and what you need as part of your network relationship. Search for a company that matches your profile and addresses your individual needs. “My advice to anyone looking into a network would be: yes, you will have varying markets and compensation – which is always important to weigh – but there is more to this decision than what we can measure and see on paper,” says Beth DeLaForest of the Aspire Group. “Don’t overlook the importance of being part of a network that has a culture that fits you.” Establishing a true relationship with a network is part of the reason why Brian Hetherington is satisfied with his
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 50
22/01/2016 7:33:55 AM
experience. “Our partners are an extension of our team, and take things personally to literally provide world-class service,” he says. “Our clients end up developing relationships with our partners, and it becomes more than a vendor relationship; it’s a partner relationship. In many cases, these relationships with global firms go back years, and the level of confidence and trust is extraordinary.” Production requirement protection is another factor worthy of consideration, according to Paul Megginson of Risk Management Partners, part of the Iroquois network. “Since we are part of the network, we aren’t scrutinized by the companies as hard for production requirements,” he says. “We still have access to the marketing personnel and resources at those companies, but we aren’t under the gun as much, which is important for us with personal lines markets.”
WHICH BENEFITS ARE LEAST IMPORTANT? CLAIMS SUPPORT
NON-MEMBERS ON NETWORK BENEFITS We also wanted to find out what benefits of membership were most important to those who aren’t part of a network – in other words, which perks might entice them to join in the future. Here’s what they said: Access to niche and nontraditional markets Access to an increased number of companies and products
Marketing
Training and education
Commissions and profit share
Overall business consulting
Talent recruitment
Claims support
Administrative support
IMPORTANCE TO PRODUCERS: 5.51
At the opposite end of the scale, claims support was seen as one of the least important benefits a network can offer to a producer – it scored an average rating of
Customer service support
0
1
2
3
4
5
6
7
8
9
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 51
10
51
22/01/2016 7:34:01 AM
smart PRODUCERS ON NETWORKS FEATURES
Have you made a Smart Choice today?
O
W
to
W • • • • • • •
52
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 52
TO LEARN MORE ABOUT THE SMART CHOICE ® AGENTS PROGRAM, CALL OR VISIT US ONLINE TODAY!
22/01/2016 7:34:07 AM
W
not so smart
e
TS Y!
OVER 4,300 INDEPENDENT AGENTS HAVE.
Why? Because Smart Choice® allows independent agents to be in business for themselves, but not by themselves. We’re the only agency network of our kind to offer: • No up-front or monthly fees • No long-term contracts • Access to nonstandard and excess/surplus markets • Ability to earn 100% commission • Ability to earn bonuses & contingency payments • Agency perpetuation and/or exit planning & support • Complete and full disclosure of all financial details from day one – no surprises
WWW.SMARTCHOICEAGENTS.COM
48-57_Producers on Networks-SUBBED.indd 53
|
888.264.3388
www.ibamag.com
53
22/01/2016 7:34:13 AM
FEATURES
PRODUCERS ON NETWORKS
just 5.51. Many agents felt it was their responsibility to ensure the claims service offered is of a high standard. However, it can still be important for a network to provide support when necessary – at least as a backup. “As an agent, I look to partner with companies who will give my clients the service they deserve at claim time,” says Matthew Milnor of the Milnor Insurance Group, which offers auto, home, health and commercial products and is part of the Smart Choice network. “I’m the face of their insurance first, backed by the actions of the company providing their coverage,” he says. “I look to associate with companies that have excellent claims service and follow-up to give my clients peace of mind and the quick help they need when they need it the most. The network isn’t who the client thinks of first, so I look to provide the kind words and advice to help them navigate through
the claims process as easily as possible.” According to Josh Warren, senior vice president of Equity Risks Partners, “claims support is important, but the opportunity to show that value is rare.” However, Kevyn Heck strongly disagrees with the lack of importance the majority of producers placed on claims support. He
“Many aggregators offer a smooth transition into retirement by offering a fair price for the agency and the financial resources to pull it off ...”
WHAT’S KEEPING YOU FROM JOINING A NETWORK? Time commitment
Cost/loss of commissions
Sharing of clients
Negative past experience
Loss of independence
Don’t meet requirements
0%
54
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
believes that claims support is one of the most essential parts of a network’s offering. “Claims support has great value, especially for me, in a smaller rural area,” he says. “Everyone knows their agent, sees him around town, and if they have poor claims service, it will impact business. So I take part in every claim submitted, as I use it as an opportunity to solidify my relationship with my customer, and I know firsthand how the process was completed. On the other side, I’ve gained a percentage of business from others due to a poor claims experience.”
TALENT RECRUITMENT IMPORTANCE TO PRODUCERS: 5.80
Talent recruitment was one of the least important benefits of joining a network, according to our survey. However, that assessment may be one to watch in the coming years as many industry professionals reach retirement and the need to find new talent takes on added importance. “I haven’t had to look for talent yet, but I know it can be an issue,” says Kevyn Heck. “Our industry is moving toward a time in which talent will be lacking. The industry is a challenge with today’s generation, as the work isn’t easy, you’re getting paid based on what you accomplish, and the hours can be long … there are many who can’t make it past the first year or two.” Kelly Tighe, vice president of sales at West Bend Mutual Insurance Company in Wisconsin, which provides property & casualty insurance in the Midwest, believes that networks can offer a solution to a potential recruitment problem. “The average age of our agency principals is 57, so retirement is on the horizon, and there is pressure to make a good decision since, for many of our principals, the agency is their greatest asset,” he says. “Many aggregators offer a smooth transition into retirement by offering a fair price for the agency, the financial resources to pull it all off, and a path for the current staff to stay
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 54
22/01/2016 7:34:21 AM
THE ONE INDUSTRY EVENT YOU NEED TO ATTEND
WHAT IS A NETWORK? Networks and alliances can take many different forms, but they normally boil down to a number of agencies under one master agency code. Most carriers now recognize networks and alliances, and give additional sub codes to member agencies. Because of its size, the network or alliance gives its individual agencies access to more companies and products, increasing their potential to do business. Larger networks also can often negotiate with carriers for higher commissions and better profit-sharing deals. In return, agencies share profits with the network or alliance in the form of percentages of commissions, monthly fees or a combination of both. Beyond providing access to markets, networks’ offerings can vary widely. Some might just offer the bare bones – increased market access and profit-sharing. Others might also provide members with perks like an agency management system, training opportunities and marketing assistance. and grow in the new organization.” This sentiment is echoed by Paul Megginson. He believes his network was vital in helping him get the training and education one young employee needed. “We are a small agency, so we are very selective when we are looking to add someone to the company,” he says. “We hired a new producer right out of college this past May. We think it’s working well so far. Iroquois assisted us with getting him in the Liberty Mutual producer school and also assisted us with the cost due to our production level.” Kelly Tighe adds: “When it comes to adding producers, we have an industry problem. I do not believe one agency type or another possesses an advantage that has been identified and capitalized on to add young blood into the independent agency system. We all need to work together to figure this out.”
WHAT COULD ENTICE YOU TO JOIN A NETWORK? ACCESS TO NICHE MARKETS 8.53 ACCESS TO INCREASED COMPANIES AND PRODUCTS 8.40 MARKETING 7.87
So what about those who are not currently part of a network? Some of them could be swayed – but it’s up to the networks to really promote their benefits. “If a network could do much more than simply be a social hour and could offer real leads with a proven success track, then it would be a more attractive venture,” says Andrew Quinlan of Tanner, Ballew and Maloof, a property & casualty insurer that currently isn’t associated with a network. “Many times it is hard to see the direct benefits that come from being associated with a network.” “To join a network, it would have to be more or less just a place that I can go to place [more difficult] risks, with no volume requirements, kind of like an E&S broker,” said another survey respondent. However, among those who could potentially be persuaded to join a network, access to niche and nontraditional markets was the number-one incentive, earning an 8.5 importance rating from non-network members. “There are some markets that we can access only due to our network membership,” says Josh Warren. “This is important because we don’t need
marshberry
360 M&A AND ORGANIC GROWTH BEST PRACTICES
MAY 3 MAY 5 MAY 17 MAY 19
Chicago, IL Orlando, FL New York, NY Las Vegas, NV
REGISTER TODAY REGISTER BY FEB 26 AND SAVE $425 CALL ONLINE
800.426.2774 MARSHBERRY.COM/360 SPONSORED BY:
PLATINUM
SILVER
STRATEGIC PARTNERS
MARSHBERRY
Securities offered through MarshBerry Capital, Inc., Member FINRA and SIPC, and an affiliate of Marsh, Berry & Company, Inc.www.ibamag.com 28601 Chagrin Blvd.,55 Suite 400, Woodmere, Ohio 44122 (440.354.3230).
48-57_Producers on Networks-SUBBED.indd 55
22/01/2016 7:34:28 AM
FEATURES
PRODUCERS ON NETWORKS
these markets very often, so when we do need them, our network affiliation gives us access to senior-level professionals that otherwise probably wouldn’t work with us due to our lack of premium volume and consistent submission flow.” However, Kevyn Heck disagrees with the weight being placed on this aspect by non-network members. “Access to carriers that support the primary purpose of your agency is the main benefit,” he says. “If one spends all their time chasing niche and nontraditional business, you’ll do a lot of quoting and won’t write as much business as you will if you are servicing the majority of people/ businesses you come in contact with each day.”
WHY DO SOME AGENCIES AVOID NETWORKS? LOSS OF INDEPENDENCE 41.67% TIME COMMITMENT 34.30% NEGATIVE PAST EXPERIENCES 32.57%
When asked why they had not signed up for a network, potential loss of independence was cited by more than 40% of non-member respondents as the main reason for steering clear. “I would be concerned with joining, and then having all new rules, policies and procedures to follow,” said one survey respondent. “Also, I would not want to have all of my business information shared with other businesses. We are in a very small
LISA GREENBERG
Agency name: Cornerstone Specialty Insurance Services Location: Irvine, Calif. Annual premiums: $15 million+ Primary focus: Commercial and personal lines Network: Networked Insurance Agents Main reason for joining a network: When I first started my agency, the commitment to production volume was a huge factor. Most insurance companies want high volume in order to have a direct appointment. Joining NIA provided me with access to many, if not all, of the top insurance carriers that I needed to grow my agency without the high-volume production commitments. This allowed me to focus on starting my company.
PAUL MEGGINSON Agency name: Risk Management Partners Location: Flowood, Miss. Annual premiums: $15 to $16 million Primary focus: Business and personal lines Network: Iroquois Main reason for joining a network: The main reason we joined Iroquois was to be able to access new markets, as well as existing ones, at the same level as agencies much larger than us. There are several things that attracted us to Iroquois: access to markets, improved profit-sharing agreements, improved commissions and other resources like assistance with producer development.
56
WHICH NETWORK? So you’re convinced – a network is right for you. But which do you choose, and how do you join?
Check out your options. Research the networks and alliances operating in your state. Find out what markets they’ll open to you, what profit-sharing arrangements they have and what their requirements for membership are. Talk to members. Ask them about their experiences as members of the network. Let them know they should be frank about their experiences – good and bad – with the network. Be prepared. Most networks will have an application process. Many of them will want to look at your books or run a credit report. No network or alliance wants to partner with a failing agency. rural area, and I feel that many people in this area would view a network association as a large business, and I don’t think they want to do business with a large corporation. I would want all business to belong to me, not the network, and I would have to keep full control over it. I don’t want to become part of a large conglomerate.” However, according to the producers we spoke to, this fear often dissipates once you are actually part of a network. Beth DeLaForest, for example, believes that comprehensively searching the market to find the right network for you can resolve this issue. “I think it depends on the network and ... the culture of that network as to if you feel you lose independence,” she says.
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 56
22/01/2016 7:34:37 AM
“It also depends on the mindset of the person making the decision. You have to know that you are part of a bigger whole. I personally went from being a producer at an agency into a network, so I have felt more independent, which is what I was looking for.” “We haven’t lost our connection with the companies that we already had,” says Paul Megginson. “If anything, I think our network has enhanced it. Obviously that was a concern for us as well, but it’s not a concern any longer.” According to Josh Warren, networks can even help companies retain their independence. “We use the members of the network because we choose to – not because we have to,” he says. “We have access to
brokers and resources that are important to our clients, and we have the flexibility to use any broker that we want.” Kevyn Heck agrees: “To me, the benefits of the network, and the value they represent, far outweigh any lack of independence.”
Is a network right for you? When asked, “If you were to switch networks, what would motivate you to make the change?” the vast majority of respondents simply stated, “I wouldn’t switch.” What’s apparent from the survey results is that there is overwhelming support for networks among the producers who are already enjoying their benefits. Whether
PETER ALEXAKIS
Agency name: PJA Insurance Services Location: Riverside, Calif. Annual premiums: $5 million Primary focus: Small and medium-sized businesses Network: Networked Insurance Agents Main reason for joining a network: I joined NIA because, through my years in the industry, I knew they had the best business model that fit my business and personal goals. Specifically, as an owner of a small retail insurance agency with a ‘generalist’ and established book of business, I knew NIA could provide both the markets and service necessary for our new business venture to launch and grow successfully.
MATTHEW MILNOR
Agency name: The Milnor Insurance Group Location: Columbus, Ohio Annual premiums: $1 million Primary focus: Personal and commercial lines Network: Smart Choice Main reason for joining a network: Prior to joining a network, my commercial lines options were limited to one company. In joining Smart Choice, I was able to get several commercial markets. With so many options, I can now be competitive in product and premium for just about any prospect referred to my agency.
“We use the members of the network because we choose to – not because we have to. We have access to brokers and resources that are important to our clients, and we have the flexibility to use any broker that we want” it’s access to new products and niche markets, commissions and profits, or a general boost for marketing, networks are providing a host of advantages, and producers are reaping the rewards: An eye-catching 57% of our respondents reported annual volumes between $1 and $10 million. However, among those who were not part of a network, nearly one-third reported a negative past experience. So while the positives appear overwhelming, the survey results suggest that it’s vital to ensure you take a thorough overview of the various networks available and take advantage of what is a highly competitive marketplace. Ensure you find a network that matches your profile, suits your individual insurance sector, offers profitsharing arrangements you’re satisfied with and, above all, puts yours needs first. If selected carefully, networks can offer small agencies the platform to act like larger ones – and that might be just what’s needed to secure their long-term success. In the next edition of Insurance Business America, we’ll look at how producers feel the various networks are performing – and get reaction from the networks themselves.
www.ibamag.com
48-57_Producers on Networks-SUBBED.indd 57
57
22/01/2016 7:34:45 AM
FEATURES
CYBER INSURANCE
THE INTERNET OF THINGS Internet-connected devices – from thermostats to nuclear reactors – are presenting the next big risk in cyber insurance giant Target’s computer systems. The breach was a perfect example of how something as mundane as an HVAC system, once connected to the Internet, can be used as a portal to bring a corporate behemoth to its knees. “Embedding technology can offer companies improvements in efficiency and safety, but the risk is they could open additional points of entry for individuals with malicious intent,” says Matt Kletzli, head of management liability and cyber protection program manager at Victor O. Schinnerer & Company. “A premise of risk management is that the remedy for one risk could actually create new risks for organizations. The same may be true for these technological advances.”
The insecurity of things This is the essential conundrum of the Internet of Things: We live in an era in
JUST A FEW years ago, people used the Internet to connect with other people. Now, the things we own make that connection – in many cases, without our involvement. “It’s gone from computers to cell phones and well beyond that,” says Tim Francis, cyber insurance lead at Travelers. “In the old days, you had a fridge and freezer, and it kept stuff cold. Now, your fridge knows what’s inside of it, and when you are low on eggs, it
58
can tell you and order the eggs for you.” As our devices start to connect outside the home and have more and more personal information on them, there is now the possibility – as far-fetched as it may seem – of a data breach taking place in the fridge, toaster or thermostat. Indeed, the biggest retail hack in US history started with a smart thermostat that proved to be a convenient back door to retail
“We should embrace the technology, but we also need to understand the risks that go along with it” Tim Francis, Travelers
www.ibamag.com
58-61_Ad led Cyber-SUBBED.indd 58
22/01/2016 7:35:23 AM
which devices with sensors connected to the Internet collect, store and analyze massive amounts of data, and play an increasingly prominent role in the physical world. Vast in scope, the IoT is one of the fastestgrowing aspects of information technology, and has huge implications for the insurance industry. An estimated 10 billion devices are connected to the Internet today, and that figure is projected to double or triple by 2020. A recent study conducted by the McKinsey Global Institute estimates that the IoT will have a total potential economic impact of $3.9 to $11.1 trillion a year by 2025. The ever-expanding IoT business classes present opportunities for the insurance
WHO NEEDS IOT COVERAGE? Manufacturers: While not particularly vulnerable to a traditional cyber breach, “they may be incredibly exposed to the Internet of Things because they have devices connecting throughout the Internet, and that could lead to other compromises that could result in physical or property damage,” says Travelers’ Tim Francis. “It’s an area of exposure that is underappreciated.” Healthcare: In the past decade, the healthcare sector has been one of the biggest beneficiaries of the IoT. Technologies on the horizon range from sensors and microcomputers fitted in the human body that could monitor health conditions, to highly automated devices and processes that could help increase the efficiency of critical treatments with a limited human interface. Education: Innovations such as Internet-enabled and interactive smart classrooms and various student tracking systems could help to make schools more secure.
“We don’t even know all the potential things out there that could impact the Internet, computers and the Internet of Things” John Coletti, XL Catlin industry to cover the risks associated with them; one study estimates that 70% of the most commonly used IoT devices contain vulnerabilities. “I think that we don’t talk enough in the cyber industry about things that use computers that aren’t about privacy,” says Michael Palotay, senior vice president of underwriting and head of the cyber product team at NAS Insurance. “Manufacturers use computers to keep their assembly lines running; utility companies use old legacy computer controls. All of those systems are vulnerable and not easily upgraded. When they get hacked or even malfunction, it can have a big effect.” IoT issues dominate today’s business environment as well. “Devices are connecting to other devices, and in many ways, are not being watched as carefully as you might think,” Francis says. “People don’t always check those connections, and as was seen in the Target security breach, they can be used as a means of entry into the company. We should embrace the technology, but we also need to understand the risks that go along with it.”
Industrial-scale threats Those risks run the gamut from privacy breaches and device malfunctions to industrial espionage and cyber terrorism events. The IoT pertains to more than just small devices – it also includes some of the world’s largest assets, such as trains, gas and wind turbines, oil refineries, factories, harbors and smart grids, all of which are now equipped with Internet-connected sensors and actuators.
“The biggest evolutionary step in cyber liability insurance has to do with nondata-breach types of risk that have to do with cyber risk relating to control systems – when someone hacks into the power grid and shuts down a utility company, or damages a manufacturing plant and shuts off equipment and disrupts the whole supply chain,” says Jeremy Barnett, senior vice president of marketing at NAS Insurance. The aggregation potential in such a scenario can be devastating. If a utility company gets shut down, for example, so are tens of thousands of other customers who rely on electricity to run their businesses. “And now you have this wide ring of business interruption claims, and it’s ultimately related back to a software issue or cyber breach,” Barnett says. “It has nothing to do with data, but it has to do with the cyber crime affecting these control systems.” Taken to a grand level, such scenarios could even spin out into state-sponsored cyber terrorism. “But at the same time,” Barnett adds, “you can imagine the evolution of corporate espionage when competitor A wants to take down competitor B, what they can do to disrupt their competitor’s business. That’s an emerging risk where cyber liability insurance is now starting to fit in.”
Emerging products Insurers that are working to develop effective IoT coverage solutions spend a lot of time trying to imagine the seemingly outlandish loss scenarios that may well be at their doorsteps within a few short years. For example, Kletzli says, “let’s say an organization decides to embed technology to
www.ibamag.com
58-61_Ad led Cyber-SUBBED.indd 59
59
22/01/2016 7:35:30 AM
FEATURES
CYBER INSURANCE
improve the operation of its delivery trucks. For instance, they could install a speed governor, a camera and Bluetooth to alert the driver if they start to fall asleep, or a device that monitors the operating efficiency of the vehicle. What if the device becomes compromised and sends the information feed back to the main system with a little something extra, a virus that crashes the system? What if instead of crashing the system, it opens a back door into the system to get past the firewalls? What if the camera and Bluetooth feed ends up with embarrassing or personal
Laurie who represents insurance companies on cybersecurity and cyber insurance issues. First-party property policies are often silent on whether they respond to cyberrelated damage, Vitkowsky says, whereas in the third-party context, losses involving bodily injury or physical damage to tangible property will lead to product liability claims. “Unless the policy is tailored to the unique qualities of IoT devices, coverage questions will arise,” he says. Experts agree that aggregation will be a top area of focus throughout the cyber
“Embedding technology can offer companies improvements in efficiency and safety, but the risk is they could open additional points of entry for individuals with malicious intent”
TOP CYBER BUSINESS CLASSES BY TAKE-UP RATE
50%
32%
Healthcare
Education
26%
21%
Hospitality/gaming
Financial
21%
18%
Power/ utilities
Retail
Matt Kletzli, Victor O. Schinnerer & Company information being monitored and disclosed?” At this point, there are still a lot more questions than answers when it comes to IoT insurance concerns – such as who is liable when a device malfunctions because of defects in its software design, or when its network is hacked and the devices are manipulated, and what forms of insurance will respond. “We want to be thoughtful about what we create, and innovative at same time, since technology is evolving and cyber and data breaches are evolving,” says John Coletti, senior vice president at XL Catlin. “We are creating new product, but we are going about it very carefully.” Over the past few years, a few companies have started introducing policies that would indemnify against claims for bodily injury and property damage related to cyber incidents. “And throughout, insureds have also sought to recover cyber losses under traditional liability insurance policies,” says attorney Vince Vitkowsky, a partner at Seiger Gfeller
60
insurance market over the next couple of years, as insurance companies try to ready themselves for the most devastating events. “Something will happen – a cyber terrorism attack or some sort of super virus – that impacts a large amount of policyholders,” Coletti says. “Risk modeling seeks to predict what is the maximum potential loss from certain scenarios. It’s tricky because we don’t even know all the potential things out there that could impact the Internet, computers and the Internet of Things.”
How to sell it It may seem overwhelming, but the Internet of Things is here to stay. “You will have to learn this stuff. It is not a passing fad,” Coletti says. “Educate yourself, and know what you are talking about.” And, he adds, “don’t be afraid to ask underwriters questions. They are very educated, very smart and willing to answer any questions that you have.” Producers should look for opportunities to cross-sell cyber and IoT coverage to
Source: Marsh
existing books of business, Palotay advises. “A lot of insurance agents don’t understand the market well, and they don’t want to look like they don’t have all the answers,” he says. “But there are lots of interesting insurance opportunities in the sector.” For example, he says, “business interruption insurance is very applicable to companies that don’t have private information but are controlling a lot of important things. Industrial applications are a very under-penetrated area with very big exposures.” “I would advise anyone to get familiar with the sector,” Kletzli agrees. “Get comfortable and make sure you are offering it on all accounts. There are very few accounts that aren’t electronically connected somewhere.”
www.ibamag.com
58-61_Ad led Cyber-SUBBED.indd 60
22/01/2016 7:35:38 AM
CYBER LIABILITY INSURANCE
State-of-the-art insurance coverage plus expert risk management and breach response services to protect your business and your reputation. That’s Cyber Strong.
CYBER STRONG. nasinsurance.com/cyber
58-61_Ad led Cyber-SUBBED.indd 61
www.ibamag.com
61
22/01/2016 7:35:46 AM
PEOPLE
PRODUCER PROFILE
Making the major league He once thought he’d be making calls behind home plate – but driving in insurance home runs became Ed Mackoul’s passion instead ALTHOUGH ED MACKOUL comes from an insurance family, he never imagined he’d join the business himself. “No one ever thinks they are going to get into insurance, I can tell you that!” says the now-president of Mackoul & Associates, a second-generation Long Island agency specializing in insurance for condominiums, apartments and co-ops. Rather, Mackoul had perhaps an even more unusual ambition – he dreamed of becoming a major league baseball umpire. In his early 20s, he took a break from his bartending job in New York and headed off to a five-week training school in Florida. Mackoul was hoping to be selected for an umpire development program that would place him in the minor leagues, from which he could work his way up to the majors. The school was in Daytona Beach. Mackoul had so much fun there that he says he “wasn’t all that focused on, you know, all that serious stuff about being an umpire for those five weeks.” So while he finished the program, he didn’t make it to the next level and was sent home with the message: “You are talented, but you are not serious.” He went back to his bartending gig, saved his money for another year and gave umpire school another shot. This time, he was a star student and was accepted into the umpire development program. In the meantime, Mackoul had met the woman he
would marry. Between his desire to settle down and his father’s urging, Mackoul made a tough call, deciding to forgo his dream of umping in the minor leagues. Instead, at 23, he went into the family business.
Sink or swim Mackoul’s father, Bob, had gotten his start as a life insurance agent in the ’70s. In 1987, he opened his own property & casualty firm, Mackoul & Associates. When Mackoul and his brother joined the business in 1995, “it was a small agency, and there was no sales manager or anything like that,” he says. The two brothers were left to their own devices. Mackoul’s job was to sell health insurance. “Basically, we just got stuck in an office and were told, ‘Okay, now produce,’” he recalls. “It was a sink-or-swim scenario. The first year was really, really difficult. Neither one of us was doing very well. There was no guidance, so sometimes we’d sit in the office and talk fantasy baseball or whatever.” After a year, things got so bad that Mackoul’s brother was fired by their dad. (He returned to the firm several years later in good graces.) It was a turning point for Mackoul. “After my brother left, I kind of hit my stride,” he says. “I told my father, ‘I don’t really like just sitting at a desk selling health insurance.’”
“I love what I do. I love going out and developing the clients, and I love the educational aspect”
62
www.ibamag.com
62-63_Producer Profile-SUBBED.indd 62
22/01/2016 7:37:03 AM
GOING TO MACKOUL SCHOOL Mackoul recently developed a series of classes for property management firms and boards of co-ops and condos. The classes address the topics Mackoul feels are most confusing about community association insurance, including: Who’s responsible for what when property damage occurs in a condo or co-op organization What should be required each time a contractor is hired The various insurance policies co-ops and condos, and their managers, should have The minimum limits they should maintain The firm, at that point, was becoming well-known in the area of real estate co-ops and condos, and Mackoul really wanted to get involved in that side of the business. So he combed through the office’s file cabinets and computer records. He searched for clients and prospects the firm had lost over the years and started cold-calling them. Eventually, his hard work paid off, and he developed a number of clients.
Home run Over the next decade or so, Mackoul & Associates received more and more recognition for its expertise in the co-op and condo niche. The firm eventually developed a commercial umbrella program that was spun off into a separate venture, New Empire Group. In the meantime, Mackoul took on more and more responsibility. He bought into ownership in 2002 and now leads the organization. He has become a highly respected and sought-after expert on the insurance needs and challenges of co-ops and condos. “I find everything to be interesting, I’ve gotta tell you,” he says. “I love what I do. I love going out and developing the clients, and I love the educational aspect.” Mackoul is proud of how the agency has grown in both size and stature over the past 21 years – from four employees when he got there to an enthusiastic team of 35 or so now. He credits the staff (who call themselves ‘Mackoulies’) and his father’s mentorship for his success. Mackoul occasionally sees a couple of his classmates from umpire school on television, umpiring in the major leagues. Today, they’re living the dream he’d once imagined for himself. But he has no regrets. In his own way, he’s hit the major leagues as well.
www.ibamag.com
62-63_Producer Profile-SUBBED.indd 63
63
22/01/2016 7:37:10 AM
FEATURES
AGENCY INSIGHT
PARKER, SMITH & FEEK Founded during the Great Depression, this agency is still going strong almost eight decades later because of its commitment to core values and creating value for clients, explains CEO Greg Collins
IBA: How do you balance wealth creation and value creation? Greg Collins: We talk about that a lot here. I believe you create value for your clients, you create value for your employees, and you create value for your investors. You keep those three in equilibrium, and you don’t do something that benefits one that harms another. By virtue of doing that, wealth comes as a consequence of doing great work.
IBA: What are PSF’s core values? GC: We have four core values we talk about all the time, and that I see exhibited every day. Focus on client objectives: Clients come to us with issues, problems and risk management decisions that need to be made, and our job is to solve those problems, not to sell them stuff. Commit to the success of all team members: A lot of our new business development comes as a result of what happens in our practice groups – making clear that we work as a team, that we win as a team, that there isn’t just one person who serves the client’s needs. It takes a lot of people to provide appropriate service to the kinds of clients we’re working with. And our unique compensation system supports that. Act with uncompromising integrity: Integrity means being true to your word, acting professionally with your clients and your carrier partners, and always doing what’s right. As an example, we have a very large claims department. We’re enormous
64
advocates, and we push our carriers hard on behalf of our clients. But we’re also fair and professional in our approach. Our carriers understand and appreciate that and enjoy doing business with us. Demonstrate intellectual curiosity: We make a huge commitment to education. We’ve got an internal leadership training process for our next generation of leaders, and we provide regular educational classes to our clients. Our clients love it. Our feeling is that a well-informed client is a better client.
IBA: How important do you think it is for an agency to have a commitment to specialization? GC: To some extent, it depends upon what your marketplace focus is. We do business primarily with large privately held companies, many of whom pay hundreds of thousands of dollars for insurance. It’s important to them, and they have high expectations for the level of expertise and service they receive. I believe at that level, specialization is critical.
IBA: What are your practice groups, and how do they function?
GC: Construction, real estate, healthcare, manufacturing, technology, professional services, food and energy. Our focus in these practice groups is to be thought leaders, to entrench ourselves as a part of that industry. What I really love about them is they’re cross-departmental. Everybody comes together – our P&C folks, our surety folks, our benefits folks. Certainly they have a line-of-business specialty, but they’re focused on being industry experts as well.
IBA: What are you doing to attract and grow your talent? GC: We’ve been very intentional about bringing younger professionals, many of whom did not have previous insurance experience, into entry-level account executive positions. They have had successful careers in banking or other industries, but are looking for the type of opportunity that exists at a privately held, employee-owned company. To put these young people in practice groups has been enormous for them – and for the practice groups, too. You get this injection of energy and youth. It’s great for everybody.
HOW DO YOU GIVE BACK TO YOUR COMMUNITY? We’re committed to serving the community that has blessed us so much over the past 78 years. So we set a budget we routinely exceed. Plus, we make sure we get every employee on board who wants to be involved in what we’re doing. Our staff actively participates in charitable work throughout the year in a diverse crosssection of causes. The firm recognizes the contribution our team makes to our community and seizes every opportunity to support their actions by providing funds, resources or time for their efforts.
www.ibamag.com
64-65_Agency Insight-SUBBED.indd 64
22/01/2016 10:37:14 PM
FAST FACTS
Major clients/industries served: Construction Real estate Technology Healthcare and life sciences Manufacturing Professional services Energy Food processing Year founded: 1937 Ownership structure: Privately held S-corporation
“The trick is to put good people in a great culture where they can do their best work ...” IBA: How does your branch office in Anchorage fit into the picture?
IBA: What makes you stand out as an agency?
GC: We have 30 people up there. It’s a great office, and it has been very important to us. It’s a wonderful marketplace. It’s interesting – the Alaska economy and the Washington economy tend to be counter-cyclical, which is really helpful. Alaska was doing fantastic during the recession and carried us from a profit standpoint when we were down in Washington. So we’ve had this great balance that has helped us a lot.
GC: I think the difference between insurance agencies ... all comes down to culture. It comes down to why you’re doing what you’re doing. Our ‘why’ is about our values. Our ‘why’ is about walking the talk every day on these things that we believe. The trick in business is to put good people in a great culture where they can do their best work, and free them to really focus on creating value for your clients in a positive, collegial environment.
Offices: Licensed brokerage in all 50 states with offices in Bellevue, Wash., and Anchorage, Alaska Number of employees: 195 Sales: More than $400 million in policy premiums annually Partners: More than 300 national and international insurance companies Awards: • 2014 Elite Agency, Insurance Business America • Ranked in Top 100 US Insurance Brokers, Business Insurance • National Underwriter 2011 Agency of the Year • National Underwriter 2011 Technology and Operations Champion • Multi-year winner, PAR Excellence Award • 2010 IIABA Best Practices Agency
www.ibamag.com
64-65_Agency Insight-SUBBED.indd 65
65
22/01/2016 10:40:03 PM
FEATURES
ENVIRONMENTAL INSURANCE
Something in the air How indoor air quality is driving the new environmental insurance market ENVIRONMENTAL INSURANCE has always been associated with stuff that happens outside – chemical spills, Superfund sites, overturned oil tanker trucks. But there is also an urgent and growing need for coverage indoors – largely due to pollution, fungus, mold and bacteria exclusions on sublimit property and general liability policies. “The biggest mistake made by sellers and buyers of insurance in general is that they operate under the assumption that pollution exclusions only apply to hazardous waste,” says David Dybdahl, president of American Risk Management Resources Network. “That has never been the case.” Over the past 10 years, new exclusions on contamination claims have hit the property and liability insurance market very quietly, leaving building owners and vendors twisting in the wind with significant indoor air quality exposures that they and their insurance agents might not even be aware of. “A lot of things could be excluded as contamination claims, in both property and environmental policies,” Dybdahl says. “The effects of these new exclusions are very underappreciated by buyers and sellers of insurance. The need for coverage expanded a lot, and the buyers never responded – not because it was so expensive, but because they never looked for environmental insurance in the first place. They never knew they needed to.”
The wild world of indoor airborne contaminants Claims from indoor air quality loss exposures generally fall into two categories on liability policies: bodily injury and property damage.
66
Bodily injury claims frequently arise when people are exposed to airborne irritants emanating from building itself. Building materials – contaminated drywall, furniture finishes, composite wood flooring, carpet glue, paint – can give off toxic fumes that sicken the building’s inhabitants, triggering allergies, asthma and a host of other health problems. Making matters worse, “there is no natural ventilation in a modern office building, so unless an air exchange system is taking care of it, the building is probably not venting properly, and the concentration builds up,” says Bill Pritchard, founder and president of Beacon Hill Associates. There might also be outside pollutants getting into a building, which can lead to bodily injury of a building’s inhabitants.
even an old abandoned tank no one knew was there that is venting into the building. Then there are organic problems, such as mold growing in the ducts of a building’s HVAC system. Moisture gets in, the mold starts to multiply, and before you know it, mold spores are being transmitted throughout the building, leading to poten-
“The biggest mistake made by sellers and buyers of insurance in general is that they operate under the assumption that pollution exclusions only apply to hazardous waste” David Dybdahl, American Risk Management Resources Network “Any number of things can get into the lower extremities of a building,” Pritchard says. “We saw one claim where a contractor put a gas generator near an air intake, and the fumes were getting sucked into the building.” Other external culprits include radon, methane leaks, a fuel spill on a neighboring property that was not properly cleaned up, or
tially devastating property damage as well as bodily injury claims. “All mold needs to grow is warmth, moisture and a food source,” Pritchard says. “You could have mold growing inside your walls and have no idea.” Indeed, the EPA estimates that one-third to one-half of all structures have damp condi-
www.ibamag.com
66-70_Ad Led Environmental-SUBBED.indd 66
22/01/2016 7:38:18 AM
Beacon Hill_January 2016sized:Layout 1
Providing quality
Environmental Insurance
from trusted carriers for over 25 years
tions that may encourage development of indoor pollutants such as molds and bacteria. A building plagued by such issues is said to have ‘sick building syndrome,’ a serious problem with sometimes deadly consequences for its inhabitants, and serious financial impacts for building owners and contractors
EXPECT THE UNEXPECTED Insurance professionals should be ready for anything when it comes to indoor air quality claims. Jim Ziogas of Rockhill Environmental recalls one recent scenario that involved an extensive wine collection that was kept in a basement that had flooded. “During the dry-out process, the contractor raised the interior temperature to 90 degrees, which also raised the temperature of the wine collection,” he says. The property owner brought suit, and wine experts were brought in to testify as to whether the increased temperature had diminished the value of the wine. “I’d never dreamed an indoor air quality claim would require the testimony of wine experts!” Ziogas says.
who have not sought out adequate environmental insurance to protect themselves from the exposure.
Growing threats While mold spores, external pollutants and off-gassing building materials can all lead to serious health issues, it’s Legionnaires’ disease that the American Industrial Hygiene Association characterizes as “the most lethal building-related illness associated with waterborne bacteria.” The disease is entirely environmental; it isn’t passed from person to person. Rather, people become infected with Legionella bacteria after inhaling the mist from water sources where the bacteria thrive – potable water systems, fountains, cooling towers and hot tubs – in homes, hospitals and hotels. Legionnaires’ disease is on the rise across the nation. According to the Centers for Disease Control and Prevention, incidence of the disease in the general population increased 320% in the first decade of the new millennium. And it continues to escalate, as evidenced by last summer’s record-setting outbreak in New York City that claimed at least a dozen lives.
♦ GL & Pollution Liability ♦ Professional Liability ♦ Premises Pollution Liability ♦ Auto & Pollution Liability ♦ And much more
www.b-h-a.com www.ibamag.com
66-70_Ad Led Environmental-SUBBED.indd 67
67
22/01/2016 7:38:26 AM
1/14/
FEI-I/B
FEATURES
ENVIRONMENTAL INSURANCE “The recent outbreak of Legionnaires’ disease in New York City in August 2015 is a good case in point on the wide-ranging effects of pollution exclusions,” Dybdahl says. “Losses associated with bacteria are specifically excluded by fungi and bacteria exclusions found in virtually all general liability and property insurance policies today.” Category 3 water – a government term for water that is contaminated with bacteria – is another area of particular concern for exclusions pertaining to indoor air quality. All water in a drain or sewer pipe, water on carpeting for more than two days, floodwaters, tidal surges, wind-driven ocean water and any water that comes in contact with soil are all considered to be Category 3. By default, the fungi to bacteria exclusion in GL and sublimit property policies applies to Category 3 water losses. “A sewer leak in a high-rise apartment building can easily be a $10 million problem,” Dybdahl says. “If the owner of the building has not done something about the fungi to bacteria sublimit that has likely been slipped into their property policy, they will have $10,000 to deal with a $10 million problem, and nobody told them about it. That’s quite a gap.” The fact that there has been continuously affordable environmental insurance for the entire time exclusions have been in place “doesn’t help on the E&O side of things” for insurance agents, Dybdahl adds. Despite the affordability and availability of the product, “there seems to be a historical aversion to buying this type of coverage,” he says. “There seems to be a stigma about it.”
Who needs IAQ coverage? Most insurance producers and buyers have no idea that pollution and fungi/mold/bacteria exclusions can make indoor air quality issues excluded causes of loss. “Because of these exclusions, every school, commercial building, hotel, condominium and apartment building needs a specially modified environmental impairment liability insurance policy to fill the resulting coverage gaps,” Dybdahl says. “Less than 1% of these buildings have functional environmental insurance in place today.” That said, some types of buildings need the coverage more than others. As a rule of thumb,
68
“If contractors have anything to do with water, they have the possibility of getting sued when it is alleged that the homeowner suffered because of exposure to mold” Jim Ziogas, Rockhill Environmental HOW AFFORDABLE IS COVERAGE? A best-in-class environmental impairment liability [EIL] policy can be obtained for as little as $3,500 on a commercial building, according to David Dybdahl of American Risk Management Resources Network, and that premium can cover more than one building on a property schedule. If the commercial properties have a good water intrusion loss prevention plan in place, EIL insurance can cost as little as $300 per building for a $1 million policy limit, subject to the $3,500 minimum premium. These water intrusion loss prevention plans from underwriter-preapproved water damage restoration contractors are available at no cost to insurance applicants and have the ability to reduce the environmental insurance rates for commercial property owners by up to 70%. older buildings tend to have fewer problems with indoor air quality than newer ones. That’s because they are less airtight, so more fresh air is able to get in from outside and circulate around the building. And any facility that may have healthcompromised people in it – hospitals, senior care centers, nursing homes, day-care centers – needs particularly robust coverage for indoor air quality exposures, Pritchard says. Insurance professionals also may not realize that most general liability policies have a pollution exclusion that applies to a wide range of contaminants, especially in the standard market. Thus, industry experts agree, contractors and consultants tend to have woefully inadequate coverage for indoor air quality exposures, either for bodily injury claims or property damage that could ensue. “Most of them are completely uncovered from that indoor air quality standpoint,” says Jim Ziogas, assistant vice president at Rockhill Environmental. “When it comes to artisan contractors – plumbers, roofers, HVAC specialists and the like – the vast majority are uncovered.” At the same time, there has been a growing awareness on the part of the public that they can hold people responsible for environmental
exposures, including those having to do with indoor air quality. Homeowners in every state are filing against all manner of contractors, “from the general contractor to plumbers to roofers and even general handymen, alleging that their shoddy work has led to the growth of mold,” Ziogas says. “If they have anything to do with water, they have the possibility of getting sued when it is alleged that the homeowner suffered because of exposure to mold.” Many contractors go years without facing that kind of a suit, “but all it takes is one uncovered claim for a contractor to realize how expensive it can be to defend against that homeowner who is alleging a wide array of health effects from mold or even carpet fumes,” Ziogas says. Consultants who are in the business of measuring and testing indoor air quality are also at risk. “Indoor air quality suits tend to revolve around judgment,” Ziogas says. “Consultants make a living testifying, not only to the results of their testing, but their opinion as to the causation of the mold or even the effects of it. I’m concerned as to whether the consultant has adequate coverage in place to backstop those things.” There are a number of specialized environmental policies that can resolve the gap in
www.ibamag.com
66-70_Ad Led Environmental-SUBBED.indd 68
22/01/2016 7:38:41 AM
FEI-I/B FEB 2015.qxp_Layout 1 1/23/15 11:32 AM Page 1
A&E Architects & Engineers
EIL Environmental Impairment Liability
HMA Hazardous Materials Trucking
O&G Oil & Gas
FFX Follow Form Excess
LEL Lender Environmental Liability
PPL Products Pollution Liability
EIL
ECC Engineers Consultants & Contractors
Environmental Impairment Liability
Freberg Environmental Need environmental coverage? At Freberg Environmental all you have to do is pick your program. From Architects & Engineers, to Environmental Contractors, to Lender Liability and Products Pollution, we have the environmental insurance program you need. With nearly 25 years of environmental expertise, we are not the new kid on the block. Freberg underwriters are among the best in the business and they get things done. Quickly. Over the years, Freberg Environmental has become the “go-to” environmental market for innovative solutions to all kinds of environmental risk. We have earned our reputation by providing the fast, friendly and knowledgeable service you have come to expect. Pick your program.
A&E Architects & Engineers HMA Hazardous Materials Trucking O&G Oil & Gas FFX Follow Form Excess LEL Lender Environmental Liability PPL Products Pollution Liability ECC Engineers Consultants & Contractors EIL Environmental Impairment Liability
Call Freberg Environmental.
Freberg Environmental Insurance 2000 South Colorado Boulevard Tower II • Suite 800 • Denver, CO 80222 Toll Free: 800.377.4152 • Fax: 303/623-8101 FEIinsurance.com In CA dba: FEI, Insurance Services
66-70_Ad Led Environmental-SUBBED.indd 69
www.ibamag.com
69
22/01/2016 7:38:48 AM
FEATURES
ENVIRONMENTAL INSURANCE coverage for indoor air quality exclusions. These policies can be split into two broad categories: those that cover the buildings themselves (premises or site-specific coverage) and those covering people such as contractors and consultants. Buildings require an environmental impairment liability [EIL] policy – a basic type of environmental insurance that is written for a specific location and provides coverage for pollution conditions at or emanating from that site. Contractor’s environmental liability insurance covers the same things as EIL, but instead of insuring a specific location, it insures a contractor’s operations. Contractors and consultants must also carry specialized professional liability insurance – without a pollution exclusion – to cover their environmental exposure.
Trends, challenges and opportunities For a long time, environmental insurance professionals battled the reputation that coverage was too expensive. But today, the soft market means that premiums are at their lowest point in history – making for a buyer’s market and a potentially easy sell for brokers. “We have seen minimums fall by as much as 50% in a lot of cases,” Ziogas says. “What is available today is also a lot more robust than what was available just five years ago. Often we include optional additional endorsements and enhancements as standard offerings on things that used to be unavailable, or that required a lot of additional information.” Underwriting also has become more streamlined. “It used to be brutally hard,” Pritchard says. “Now it’s not entirely different
from other insurance products. It’s fitting in and becoming more mainstream. That’s a trend that will continue into 2016 and beyond.” But according to Dybdahl, there is still a long way to go. “The challenge in the sector today is the distribution channel – insurance products are in oversupply,” he says. “Insurance agents either don’t pay attention to pollution exclusions, or what they think they know about them is technically inaccurate.” Even when agents or brokers do attempt to fill the coverage gaps created by exclusions with environmental insurance, fundamental coverage flaws are very common. “This is especially true when an environmental insurance policy that was originally designed for outdoor use is sold to a customer who needs coverage for indoor environmental loss exposures,” Dybdahl says. Producers hoping to tap into this market should spend some time examining their existing book of business to identify where there might be indoor air quality exposures. “Look at the impact and what it would mean for an insured’s business if they had a significant environmental loss,” Pritchard says. “You would be surprised to find there are a number of accounts that would benefit from having more coverage – indoor air quality is an issue for so many Main Street-type businesses.” To avoid coverage mistakes, most insurance agents and brokers will need to seek out specialists in environmental risk management and insurance. “All the training in the world on traditional property & casualty insurance does not prepare an insurance agent or broker to work with environmental insurance,” Dybdahl
“Look at the impact and what it would mean for an insured’s business if they had a significant environmental loss. You would be surprised to find there are a number of accounts that would benefit from having more coverage” Bill Pritchard, Beacon Hill Associates 70
5 INDOOR AIR QUALITY TRENDS Jim Ziogas of Rockhill Environmental notes the following trends pertaining to indoor air quality:
1 2
A recent spike in indoor air quality claims having to do with off-gassing of spray foam insulation
An explosion in the numbers of contractors specializing in mold remediation, along with a new mandate to separate mold remediation specialists from mold consultants in order to protect consumers from fraud
3
New requirements for independent verification of qualifications for indoor air quality professionals, led by the state of New York, which now requires licenses for both mold remediators and consultants
4
A concern that many contractors calling themselves restoration and remediation contractors are really more remodeling or general construction contractors, rather than true water damage specialists
5
Franchise owners becoming more specific and specialized in regard to the insurance they require individual contractors to carry, leading to fewer environmental markets that can truly meet or exceed those requirements says. “A working knowledge of the environmental risks, laws and insurance drivers in certain classes of business is relatively easy to master with a good coach.” Ultimately, Pritchard advises, “there are two conversations you should be having with your clients: How broadly can you buy coverage? And, how good are your controls? Insurance companies don’t give you everything you want just because you ask for it. Underwriters will give coverage for new conditions or for pre-existing ones, but you have to provide evidence that you have conducted your environmental due diligence before they can consider insuring you for unknown pre-existing conditions.” “The biggest challenge for producers is to recognize when there is an exposure and to broach the subject,” Ziogas adds. “There is a tremendous opportunity in our marketplace.”
www.ibamag.com
66-70_Ad Led Environmental-SUBBED.indd 70
22/01/2016 7:38:58 AM
PEOPLE
CAREER PATH
HOLLYWOOD ENDING
Kent Hamilton was always torn between his passion for the performing arts and his penchant for insurance, but he eventually brought the two together 2013 JOINS FRONT ROW INSURANCE When his non-compete was up, Hamilton decided to re-enter the insurance industry. A former colleague reached out from north of the border; Hamilton joined Toronto-based Front Row Insurance Brokers as president of the Los Angeles branch “We’ve been at it for two years. I couldn’t be more grateful”
1983
1987
FINDS WORK WITH TRUMAN VAN DYKE COMPANY Hamilton married his passions at the Truman Van Dyke Company, which provided insurance to the film industry. Van Dyke sold the company in 2008, but Hamilton stayed until 2012. Upon leaving, he signed a non-compete clause and used his time away from insurance to learn screenwriting
GETS A JOB AT FARMERS INSURANCE At his father’s suggestion, Hamilton went on insurance job interviews. One interviewer laughed at him upon hearing his work experience. But Farmers decided to hire Hamilton, and success came quickly. However, the standard insurance industry just wasn’t as fulfilling as he’d hoped “The job was OK, but I didn’t really fit. I was always interested in film and theater as well as insurance”
1974 WORKS AT TRINITY SQUARE THEATRE Hamilton used the income he’d generated from odd jobs to travel the country. He eventually landed in Rhode Island, where he helped construct the Trinity Square Theatre, did stage work, wrote plays and worked in film before moving to Newport “A TV movie, The Scarlet Letter, came to town, so they hired me to be a carpenter. They put me in charge as a manager of students from Harvard and Boston University who were interning, and we rebuilt 1640s Boston” After his number came up during the Vietnam War draft, Hamilton left the University of Houston’s Bates College of Law to pursue theater courses. He began acting professionally at the New Alley Theatre and in commercials. He also wrote plays and poetry, which he read on the radio “I thought I was going to be drafted into the war, and I figured I had only a couple months to maybe live. But the physical showed I was draft-exempt because of a back injury”
“I understood what it was to be an artist, to write, produce and work on the sets. I knew enough about insurance and enough about production” 1980 MOVES TO HOLLYWOOD Hamilton’s co-workers on The Scarlet Letter convinced him to follow them back to Hollywood. He became a prop maker with Paramount Pictures, working on productions such as Mork and Mindy. The work was interesting, but Hamilton ultimately decided it wasn’t for him
1970 GOES TO BERKELEY, CALIFORNIA
1969
LEAVES LAW SCHOOL
After failing to bring San Francisco’s Committee Theatre to Houston, Hamilton moved to Berkeley. There he witnessed the growing Vietnam War protests. Hamilton studied improv with the Experimental Wing, wrote stage plays and worked with an insurance company his father – an insurance executive – recommended “I was always really good at math, so I was hired to do accounting work”
www.ibamag.com
71_Career Path-SUBBED.indd 71
71
22/01/2016 7:39:23 AM
PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE E-mail iba@keymedia.com
1873
Year of the first billiards world championship
TRICK SHOT For John Rooney II, competitive billiards has become the perfect balance to his work in insurance 72
MUCH LIKE the insurance industry, the world of competitive billiards is diverse and varied. That’s one of the reasons John Rooney II was drawn to the game, which he hadn’t thought of since college. “I was looking for a hobby, something to do,” he says. “My wife suggested I take it up.” He started playing casually, but decided to join the Minnesota Valley League in 2011 at the behest of his cousin.
9
Number of members on Cy’s II, Rooney’s billiards team
11
Number of teams playing in the Minnesota Valley League
“I didn’t know she was in a league,” Rooney says of the cousin he hadn’t seen in several years. “I mentioned I started playing pool and she said, ‘How about joining our team?’” Rooney’s nine-member team is sponsored by Cy’s, a bar in Chaska, Minn. It’s composed of a great mix of players. “It has quite the diversity of members, from all walks of life,” Rooney says. “It’s a nice diversion – it’s a lot of fun.”
www.ibamag.com
72-IBC_Other Life-SUBBED.indd 72
22/01/2016 7:39:45 AM
Complex risks require specialized solutions
Ryan Specialty Group can help
Ryan Specialty Group is dedicated to creating sophisticated insurance and risk management solutions for complex and unusual risks. Our approach to specialty coverage has been defined through collaboration with industry leaders and management teams whose expertise and experience has allowed us to innovate and customize products. Perpetually client-centric, RSG prides itself on its execution on behalf our clients. www.ryansg.com | marketing@ryansg.com A special thank you to Insurance Business America for honoring Pat Ryan and Tim Turner in this year's Hot 100 List!
R-T Specialty, LLC (RT) and RSG Underwriting Managers, LLC (RSGUM) are Delaware Limited Liability Companies based in Illinois and subsidiaries of Ryan Specialty Group, LLC (RSG). In California: R-T Specialty Insurance Services, LLC Lic. #0G97516 (RT) and RSG Insurance Services, LLC, Lic. #0E50879 (RSGUM). Š 2016 Ryan Specialty Group, LLC.
72-IBC_Other Life-SUBBED.indd 73
22/01/2016 7:40:22 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. Š2016 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.
OBC.indd 47
22/01/2016 7:41:59 AM