Insurance Business America issue 5.04 by Key Media

IBAMAG.COM ISSUE 5.04

TOP PRODUCERS 2017 The country’s 100 best producers revealed FROM THREAT TO OPPORTUNITY Five ways brokers can meet insurtech disruptors head-on

OFC & Spine-SUBBED.indd 2

THE STATE OF COMMERCIAL AUTO How this growing sector can put your business in the fast lane

THE DRONE INVASION

They’re taking over the skies – and they need insurance policies

14/04/2017 5:36:56 AM

IFC-01.indd 36

14/04/2017 5:35:06 AM

IFC-01.indd 37

14/04/2017 5:35:17 AM

ISSUE 5.04

CONNECT WITH US Got a story or suggestion, or just want to find out some more information? twitter.com/InsuranceBizUS

CONTENTS

plus.google.com/+Ibamag facebook.com/InsuranceBusiness America

UPFRONT 04 Editorial

The time is now to revamp the flood insurance market

TOP PRODUCERS 2017 COVER STORY

FEATURES

SHIFT INTO HIGH GEAR

Commercial auto is a wide-ranging niche that brokers can’t afford to ignore

AGENCY INSIGHT

Lovitt & Touché’s Charles Touché explains how going against the grain has helped his agency prosper

Hiscox USA’s Ben Walter discusses how he’s preparing his company to meet the demands of the 21st century

2 www.ibamag.com

Is the deck stacked against private flood insurance?

09 Opinion

Five ways to disrupt the disruptors

10 News analysis

Inside the industry’s hottest new sector: drone insurance

14 Workers’ comp update

FEATURES

08 Head to head

This month’s big movers, shakers and new products

These 100 men and women represent the best of the best in the US insurance industry

INDUSTRY ICON

Consumers are driving the industry’s embrace of the Internet of Things

12 Intelligence

TOP PRODUCERS 2017

PEOPLE

06 Statistics

Opioid prescriptions for injured workers are declining – but not fast enough

16 Technology update

How automation will rewrite the future of corporations

PEOPLE 63 Career path

Alan Jay Kaufman has taken the family business to new heights

64 Other life

Broker Lisa Caraway puts on the greatest show on earth

FEATURES

HOW TO FIND UNTAPPED (NON)PROFITS

As the nonprofit sector faces a new round of challenges, it needs specialized brokers more than ever

IBAMAG.COM CHECK IT OUT ONLINE

02-03_TOC-SUBBED.indd 3

14/04/2017 5:21:17 AM

UPFRONT

EDITORIAL

The fractious future of flood

n March 23 at the Citrus Club Orlando, Insurance Business broke down the flood barriers with its inaugural Flood Risk event. Fast-forward just a few months, and we’re looking at the issue again – this time at CAT Risk 2017 California, a wider catastrophe-focused event designed for brokers and agents, which will take place in San Ramon, California, on July 12. As the world’s largest insurance magazine, hosting conferences like these is nothing new for us – but holding successive events so quickly on the same theme is something of a rarity. So why flood? And why now? While many in the industry are debating the long-term impact of disruptive technologies, the transformation of the flood insurance market is not something that’s going to hit brokers and agents over the next five years – it’s happening right now. As of April 1, the Biggert-Waters Flood Insurance Reform Act and the Homeowners Flood Insurance Affordability Act of 2014 [HFIAA] have prompted a change to the National Flood Insurance Program. In an effort by FEMA to make the NFIP more actuarially sound, the change raised premiums based on updated rate maps and premium multiplier tables to address mounting flood losses.

The transformation of the flood insurance market is not something that’s going to hit over the next five years – it’s happening right now Simultaneously, critics of the NFIP, which incurred $23 billion in debt to the US Treasury following Hurricanes Katrina and Sandy, believe a move to greater collaboration on flood insurance between the government and the private sector will provide additional consumer choice, innovation and competition. Indeed, at the time of publication, the entire future of the NFIP – due to expire on September 30 – is in doubt. In March, Senator Robert Menendez told FEMA that the agency, which manages the NFIP, needs to be more accountable to the people it is supposed to protect. There’s speculation that the program will only be renewed if serious changes are made. All of this debate has left the future of flood insurance at a crossroads – and it’s up to brokers and agents to thoroughly examine the surfaces of the rocky roads ahead. If you didn’t join us in Orlando, we hope to see you in San Ramon so you can gain more of the expert knowledge that you, and your clients, will need to build your own flood defenses. The team at Insurance Business America

www.ibamag.com MAY 2017 EDITORIAL Managing Editor Paul Lucas Journalists Sam Boyer, Jordan Lynn, Lucy Hook, Will Koblensky, Ryan Smith News Writers Lyle Adriano, Louie Bacani, Mina Martin, Gabriel Olano, Allie Sanchez Staff Writers Tim Garratt, Libby McDonald, Joe Rosengarten, Heather Turner Editorial Researcher Hannah Go Copy Editor Clare Alexander

CONTRIBUTORS Michael Lyman, John Mulhall

ART & PRODUCTION Design Manager Daniel Williams Designer Joenel Salvador Production Manager Alicia Chin Traffic Manager Monica Lalisan

SALES & MARKETING Vice President Cathy Masek Media Sales Managers Chris Wills, Chris Anderson, Megan Roth Mktg & Comms Manager Lisa Narroway

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

Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries cathy.masek@keymedia.com, chris.wills@keymedia.com chris.anderson@keymedia.com, megan.roth@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, Singapore, Bengaluru

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 UK jonathan.connelly@keymedia.com T +44 20 7193 0935 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 Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO

4 www.ibamag.com

04-05_Editorial-SUBBED.indd 4

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.

14/04/2017 5:21:43 AM

04-05_Editorial-SUBBED.indd 5

14/04/2017 5:21:50 AM

UPFRONT

STATISTICS

Smart homes, smart consumers

A SNAPSHOT OF CONNECTED DEVICES The number of connected devices in use worldwide reached 8.7 billion in 2012; that’s projected to expand to 50.1 billion by 2020. Meanwhile, there were 6 million developers working on connected devices or Internet of Things software in 2016, and their ranks are likely to more than double in the next 12 months. The regional breakdown of these developers shows a concentration in Asia-Pacific, with North America coming in a distant second.

Smart tech is propelling consumers to look beyond traditional channels for coverage THE MOST popular Smart Home devices include such items as door locks and smoke alarms, so perhaps it’s no surprise that NTT Data Consulting found that the main reasons why consumers upgrade to Smart Home devices are the same as those that lead to the purchase of homeowner’s insurance: safety, security and cost savings. When upgrading to Smart Home technology, customers expect to be rewarded

for it: Two-thirds of consumers in the same survey said they’d be willing to switch carriers if it meant a discount on their policy for using Smart Home devices. And half of younger respondents said they’d be willing to take out a policy with carriers who are also providing services and advice related to Smart Home technology, even if those ‘carriers’ were not traditional insurance providers, but rather a bank or a major tech brand.

NUMBER OF CONNECTED DEVICES WORLDWIDE 2012

8.7 billion

2013

11.2 billion

2014

14.4 billion

2015

18.2 billion

2016

22.9 billion

2017

50%

of survey respondents expect to purchase Smart Home devices in the future

80%

of US consumers are concerned about security when sharing data from Smart Home devices

73%

of US consumers are concerned about privacy when sharing data from Smart Home devices

28.4 billion

2018

59%

34.8 billion

2019

of insurance carriers have made moves to leverage Smart Home technology

42.1 billion

2020

50.1 billion 0

Source: NTT Data Consulting

IOT INVESTMENT DRIVERS

IOT TECHNOLOGY AND THE GENERATION GAP

The chief motivation for carriers to adopt IoT-friendly policies is to improve relationships with customers, as the technology allows for a more personalized connection.

In NTT Data Consulting’s survey, two clear groups emerged amongst home insurance customers: Seekers, who are younger (72% fall between the ages of 25 and 34), early adopters, and value cost savings; and Keepers, who are older (twice as likely to be between 45 and 64), technology laggards, and value relationships.

WHY ARE CARRIERS EMBRACING THE IOT? 100%

Switched carriers with current home

80% 60%

Will change carrier if not innovative

40% 20% 0%

87%

83%

Improve the Create additional relationship value-added with customers services

83%

81%

80%

Attract potential customers

Improve ability to personalize offerings

Improve brand Source: NTT Data Consulting

35% 22% 46% 26%

Want carrier to 71% anticipate needs

59%

20% Seekers

40%

60%

80%

Keepers Source: Swiss Re, December 2016

www.ibamag.com

06-07_Stats-SUBBED.indd 6

14/04/2017 5:23:13 AM

NUMBER OF DEVELOPERS

6.21 million Currently working on IoT devices/software

24%

5.36 million

EUROPE, MIDDLE EAST AND AFRICA

Plan to do this within six months

2.12 million

NORTH AMERICA

Plan to do this within seven to 12 months

27%

1.36 million

Plan to do this after 12 months

ASIAPACIFIC

41%

LATIN AMERICA

07%

WHERE DEVELOPERS ARE LOCATED Source: The Statistics Portal

CARRIERS VS CONSUMERS: THE PERCEPTION GAP When consumers were asked about insurance companies’ use of Smart Home device data, a telling gap emerged between what consumers thought and how their insurance companies guessed they would respond. I feel protected by my policy

72% 30%

WHAT TECH-SAVVY CUSTOMERS WANT Younger consumers are ready for Smart Home programs from carriers, but they expect benefits such as premium discounts.

I think my insurance company cares 77% about improving my safety and security 26%

22%

My carrier does not see me as 63% a unique customer 33% My agent helps me understand how I 84% can optimize coverage 21% Price

42% 61%

26%

It sounds great – sign me up 55%

Interested in understanding the potential savings Believe that any investment that will reduce premiums is a good idea Are ready to sign up

52%

22%

20% Carriers’ guesses

40%

60%

80%

100%

Consumers’ responses Source: NTT Data Consulting

Source: NTT Data Consulting

www.ibamag.com

06-07_Stats-SUBBED.indd 7

14/04/2017 5:23:24 AM

UPFRONT

HEAD TO HEAD

What will it take to expand private ﬂood insurance? The government’s effort to expand the private market is just one piece of this complex puzzle

John O’Marra

Albert Slap

William Fleischhacker

Senior vice president, property RT Specialty

President Coastal Risk Consulting

Executive managing director and leader, US flood specialty practice group Aon Benfield

“Flood market conditions are hindering the expansion of private flood insurance. Commercial insureds see flood as more of a luxury than a necessity and don’t purchase coverage. The client might not understand their exposure, and the price of coverage is viewed as prohibitive. With limited demand, not many commercial insurance carriers will offer stand-alone flood coverage, particularly for the highest-hazard exposures. The carriers that do offer stand-alone flood coverage do not write enough policies to be able price the risk efficiently, leading to high prices. Limited supply and limited demand combine to hinder the expansion of private flood insurance.”

“NFIP underwrites government-based flood insurance policies using Flood Insurance Rate Maps [FIRMs], which have come under criticism for being backwardlooking and not adjusted for climate change and sea level rise. New technology can flood score every coastal property in the US at extremely high resolution using LIDAR elevation data. After more than 40 years of servicing NFIP flood insurance using FIRMs, a clean break might be difficult for carriers offering private flood insurance. Flood maps will continue to be important for land use planning, zoning and emergency response, but the adoption of new technology will enable more accurate premiums.”

“Customer awareness is a significant obstacle in the US residential flood market, with many falsely believing they are already protected. Private-market insurers are increasingly pursuing the residential flood opportunity, and capacity is regularly coming on stream. This trend will continue as more carriers embrace the vendor flood models for inland and coastal flood exposure, supported as needed by ample reinsurance capacity. We are bullish that, in the coming years, residential customers in low-risk flood zones will receive flood protection offerings – usually as part of a homeowner’s product – which will provide better coverage at affordable prices.”

THE FIGHT TO REFORM FLOOD Representative Jeb Hensarling was clear at the beginning of the year when addressing the congressional push to allow states to expand their private market coverages: “We will pass legislation that begins the transition to a competitive, innovative and sustainable flood insurance market that gives consumers real choices.” With the debt-addled National Flood Insurance Program set to expire in September, Congress is under the gun to reform it, and many see increasing competition in the private market as the logical step. Although the House made moves in this direction last year by passing the Flood Insurance Market Parity and Modernization Act, the Senate failed to take up the bill before it adjourned. (Insurance Business will facilitate further industry discussion of this issue on July 12 in San Ramon, California, at CAT Risk 2017 California.)

www.ibamag.com

08_Head to head-SUBBED.indd 8

14/04/2017 5:23:51 AM

UPFRONT

OPINION

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

The disruptors are coming Digital disruption could upend brokers’ crucial place in the industry, and adaptation is key to survival, write Michael Lyman and John Mulhall AS DIGITAL disruption continues to overturn traditional industries, insurance brokers are in line for a rude awakening. Having long enjoyed an indispensable role at the heart of the insurance industry, helping customers navigate complex decisions and provide services in times of need, brokers face a new reality where technology does the heavy lifting. As data and analytics become intelligent enough to determine risk and identify the best carriers more accurately and quickly than the most highly experienced broker, brokers need a definitive business model shift to maintain their relevance and purpose. The trouble is, they are up against the clock. Dynamic new market entrants are disintermediating brokers by using the small and mid-sized enterprise [SME] market as a launchpad. Likewise, carriers and reinsurers are poaching larger accounts with directto-customer value-added services, such as analytics-driven aggregation. The squeeze on brokers’ top lines has become intense. By 2020, Accenture Strategy estimates that disruptive models and digital platforms could account for as much as 15% to 20% of the P&C SME market. Furthermore, revenues from mid-sized and large customers could erode by up to 20%. With so much at stake, brokers need to fundamentally change their business model – quickly. Moving fast could allow them to reap the rewards by setting new product and service offering standards. Banking and wealth management have shown the way forward – many leading companies are turning the threat of digital disruption into an opportunity to

raise competitive barriers. Vanguard Group’s ‘robo-human’ money management service combines algorithm-driven asset allocation and rebalancing with access to human advisors; the service attracted more than $7 billion in new assets after its launch in 2015. As today’s insurance customers seek greater risk prevention, ease of service, customization and value-added services, platform business models can deliver greater value by enabling

to substantially enhance risk structuring and placement. Outcome-driven loss prevention: Brokers can boost their risk advisory and loss prevention offerings by applying analytics to a robust and expanding universe of structured and unstructured data sources. Risk marketplace with valued services: As trusted intermediaries with technology and analytics capabilities, brokers are uniquely positioned to aggregate multiple value-added services that holistically serve customers’ risk needs, and potentially their balance sheet management. By developing strategic partnerships with providers and enabling access through a common platform, brokers can enhance their value and boost customer loyalty. Innovative carrier solutions: Brokers can capitalize on their access to data via customer proximity and diverse carrier relationships. This will enable them to develop high-impact offerings that synthesize information across transactions for insurers, reinsurers and alternative capital providers.

“Having long enjoyed an indispensable role at the heart of the industry, brokers face a new reality where technology does the heavy lifting” highly efficient transactions that are customized and scalable. Around 83% of insurance executives expect platform-based business models to become part of their growth strategy over the next three years. An additional 81% say platforms will bring organizations together in the digital economy. While brokers won’t disappear, they will need to protect and defend their core business while launching new, value-creating strategies. Platform business models can help them do both. While many brokers may need to buy or partner with others to create them, doing so will help secure their future relevance. Potential new business models to explore include: Next-generation risk placement: By making brokers better equipped to recommend the right carrier, products and insurance program structure for a given risk, automation and analytics have the potential

New risk services: Most new entrants lack core capabilities around risk assessment, transfer and prevention. Brokers can pre-empt disintermediation by partnering with new competitors and offering a suite of services that enhance their ability to offer risk-based services directly to customers. By rethinking their core business model, brokers can formulate a transformational business strategy, maintain their relevance and set new standards for offerings and customer engagement. Michael Lyman and John Mulhall are senior managing directors for Accenture Strategy, where they help clients in the insurance industry develop and implement business strategies that enable high performance.

www.ibamag.com

09_Opinion-SUBBED.indd 9

14/04/2017 5:24:16 AM

UPFRONT

NEWS ANALYSIS

The drone invasion As the usage of unmanned aircraft systems explodes worldwide – driven by growth in the US – IBA takes a closer look at how the expanding insurance market is responding

THE SALE and use of drones, or unmanned aircraft systems [UAS], has skyrocketed in the last few years in both the recreational and commercial space. Though drones are now widely used across the globe, the US is the main driver of that growth; in March, the Federal Aviation Administration projected that the number of small hobbyist drones will surge to more than 3.5 million by 2021, and that the commercial drone fleet will explode to 442,000, compared to 42,000 at the end of last year. Those numbers are even more staggering when compared to the active general aviation fleet in the US, which currently stands at around 204,000, says James Van Meter, aviation practice leader at Allianz Global

to help with humanitarian missions, antipoaching and infrastructure inspection – the inconsistent regulatory landscape across the globe is often a hindrance. The US is largely setting the trend for drone usage, thanks to its active aviation market and comparatively lenient regulatory environment. Many typically associate drones with the military, but the US commercial market is now using the aircraft across all kinds of industries, Van Meter says. “We see all sorts of uses that you can’t even imagine – from delivering cocktails to wildlife control to industrial inspection,” he says. “We are insuring drones in almost every single industry at this point.” Industry sectors with the highest drone

“We’re talking about [unmanned] aircraft eclipsing – just completely outpacing – the manned aircraft space” James Van Meter, Allianz Global Corporate & Specialty Corporate & Specialty. “We’re talking about [unmanned] aircraft eclipsing – just completely outpacing, by huge factors – the manned aircraft space,” Van Meter says. While there is huge demand in markets like Europe and Africa – where Van Meter believes there is growing potential for drones

usage include aerial photography – often for infrastructure inspection, especially in the energy and communications space – and construction, as well as media and production companies, says Chris Proudlove, senior vice president and manager of UAS risks at Global Aerospace. “The one area that has been predicted as

being the largest of all – agriculture – has been slower to adopt drones,” Proudlove says, adding that this is primarily due to the quality of the end product versus the relatively high cost. “This gap will narrow significantly in the coming years, and agriculture still stands to be one of the dominant user industries,” he says, pointing to the fact that many companies are now outsourcing drone services rather than developing their own in-house capabilities. Accordingly, the insurance market for unmanned aircraft is expanding. “Insurers are keen to enter the sector, but the relatively low policy premiums and high administration costs are deterring many from entering,” Proudlove says. As a result, most operators, manufacturers and others in the drone industry rely on aviation insurance for broad policies that will cover their exposures. However, more insurers are beginning to look at the tech-

www.ibamag.com

10-11_News Analysis-SUBBED.indd 10

14/04/2017 5:39:04 AM

RISE OF THE DRONES

56%

Percentage of research and development costs relating to drones incurred in the US

$82 billion

Projected economic growth relating to unmanned aircraft systems by 2025

100,000

Number of jobs the UAS industry will support by 2025

20,362 Number of remote pilots in 2016

281,300 nology and start developing products. “It’s definitely gotten more competitive,” Van Meter says. “We do see standard, traditionally non-aviation markets getting into this space.”

significant claim with prolonged litigation?” Having insured thousands of UAS, Allianz is now seeing claims trickle through. “We’re insuring products and manufacturers who are manufacturing the aircraft

“The relatively low policy premiums and high administration costs are deterring many insurers from entering the sector” Chris Proudlove, Global Aerospace In these cases, claims expertise can be a big issue, he adds. “These are aircraft,” he says. “This is a special field with special regulations, and it has the potential for catastrophic losses – both severe bodily injury and fatalities. If you’re a corporate user of drones, do you really want to have a claims adjuster who isn’t an expert, adjusting what could be a

and components; we’re also insuring software developers – so, we are seeing claims,” Van Meter says. Insurance is increasingly becoming essential in the drone space – startups that may have previously been uninsured are securing contracts that require them to purchase insurance, sometimes at significant limits, while others are obtaining investment with

Projected number of remote pilots by 2021 Sources: Livescience.com; US government; Federal Aviation Authority

the expectation that they are fully insured, Proudlove explains. “As the need for insurance develops, so will products and services to address those needs,” he says. While annual policies are still the benchmark, some on-demand products, such as Verifly in the US, are starting to appear. Insurer appetite will also be driven by evolving drone technology, which is making things like collision avoidance, parachute systems and other safety devices the norm. “Those sort of tech advances are going to continue to advance the overall industry and improve the losses that we are seeing,” Van Meter says. “The drone insurance market is absolutely going to continue to grow. This is probably one of the most explosive growth areas in aviation and in insurance in general.”

www.ibamag.com

10-11_News Analysis-SUBBED.indd 11

14/04/2017 6:12:08 AM

UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Alliant

Burkhardt Consulting

The agreement will give Alliant access to the Northwest market

Arthur J. Gallagher & Co.

Nicoud Insurance Services

Nicoud is P&C and employee benefits broker with clients in healthcare, finance and automotive services

HUB International

BCI Group

HUB plans to leverage BCI Group's benefits technology experience to expand its portfolio

KKR and CDPQ

USI

The private equity firm and Canadian pension fund are purchasing the brokerage in a deal worth $4 billion

Risk Strategies

Terrell Insurance Services

The acquisition will give Risk Strategies private client capabilities

Travelers

Simply Business

Simply Business has more than 400,000 online customers and offers products from a broad range of carriers

GSR expands reach in energy and marine markets

Managing general underwriter Global Special Risks has unveiled a realigned product portfolio to address the changing needs of the energy and marine insurance markets. Leveraging its experience in the sector, the company is offering more specialized coverage solutions for its energy and marine clients. “I am excited to announce the realignment of GSR’s products into five distinct underwriting units,” said Steve England, president and CEO of GSR. “Each critical unit is headed by a GSR subject-matter expert and staffed with dedicated underwriters who bring specialized product knowledge to their clients.”

Travelers to buy UK’s biggest business broker

Insurance giant Travelers has agreed buy the UK’s biggest online business insurance broker for approximately $490 million. The move will see Travelers acquire Simply Business from private equity firm Aquiline Capital Partners, which bought the brokerage in April of last year. Simply Business, which has more than 400,000 customers, offers products online on behalf of a broad panel of carriers, including Hiscox, AXA and Zurich. In the past three years, insurance premiums placed by the broker grew approximately 17.5% to total around $113 million in 2016. “Simply Business is a profitable and growing technology company with impressive strategic digital capabilities, leading digital commerce talent and proven small business insurance expertise,” said Travelers CEO Alan Schnitzer. “We look forward to working with our agent and broker partners as we seek to deploy Simply Business’ capabilities with them to make the small commercial insurance transaction easier, faster and more efficient.”

New firm offers policies for Amazon sellers

An Amazon merchant has teamed up with two insurance agents to create a company called Well Insurance, which covers up to $1 million of lost income for sellers who have had their businesses suspended by Amazon. For advice, the team turned to InsuraTech CEO Tim Craig, who took the policy to specialty underwriters at Lloyd’s of London. Lloyd’s agreed to underwrite the policies despite a lack of information on Amazon’s suspension rates or reinstatement terms. The policies were rolled out in March; Craig told Bloomberg he expects to sell at least 20,000 this year.

www.ibamag.com

12-13_Intelligence-SUBBED.indd 12

14/04/2017 5:25:22 AM

PEOPLE Progressive signs up for Google devices

Progressive has become the first insurer to sign up for Google Home’s voice-activated Assistant service, providing auto and home insurance tips. Users can ask questions on a variety of topics, including buying cars and auto insurance, scouting for property, and smart home technologies. “While most people don’t think about insurance much, when they do have a question, Progressive wants to make it as easy as possible for them to get help by being available where, when and how they want to interact with us,” said Dan Witalec, Progressive’s customer acquisition leader.

Willis Towers Watson unveils cyber risk tool

Willis Towers Watson has launched a Cyber Risk Culture Survey tool to address the human element in managing cyber risk. Citing the fact that 90% of its cyber claims were the result of human error, the company designed the tool to identify links among human capital, workplace culture and cyber risk vulnerability. From there, it can enable behavior tracking, risk mitigation and the development of a culture to address vulnerabilities. “While technology has an important role to play, it really needs to be linked with an understanding of the human element,” said head of global cyber risk Anthony Dagostino.

State Farm partners with automotive giant

Major automotive firm Edmunds has announced a partnership with insurer State Farm to provide access to its online tools, including its extensive dealer network, expert car reviews, live shopper advice service and guaranteed pricing. Edmunds said the strategic partnership will allow it to tap a shared customer base already familiar with both brands to jump-start its services. State Farm will be able to contribute to the Edmunds resource by adding value to its existing dealer network and listings for millions of vehicles.

NAME

LEAVING

JOINING

NEW POSITION

John Bruno

N/A

Aon

Chief operations officer

Roy Gordi

N/A

Manulife

President

Curtis Kochman

Ascinsure Specialty Risk

Allied American Underwriters

Vice president

Cyndee Morton

N/A

Safety National

Senior vice president of operations

Mitch Neuhaus

N/A

Safety National

Senior vice president of claims

Keith W. Newell

HUB International

Beecher Carlson Insurance Services

Managing director/producer

Thorsten Querfurt

Oliver Wyman

Willis Towers Watson

Global industry leader for natural resources

Kevin Rabinowitz

Marsh

Integro

Head of placement strategy and carrier engagement

Keith Rogers

N/A

Safety National

Senior vice president and chief actuary

Megan Smith

Grange Insurance

Ohio Insurance Agents

Company partners manager

Angie Strack

N/A

XL Group

Senior vice president and underwriting manager

Safety National announces three major promotions

St. Louis-based Safety National Casualty Corporation has promoted three employees to senior management positions. Cyndee Morton (left) is now the company’s senior vice president of operations, responsible for overseeing its policy services administration and information systems department. Safety National also named two other senior vice presidents: Mitch Neuhaus will lead the company’s claims department, while Keith Rogers will head up its actuarial department. “We are thrilled to welcome three important new members to the senior management team, all of which will bring additional strength to Safety National’s strategic planning and development,” said Safety National CEO Mark Wilhelm.

Ohio Insurance Agents Association adds partnership manager

The Ohio Insurance Agents Association has appointed Megan Smith as company partners manager to build and maintain relationships with its carrier partners. In her new role, Smith will explore how the OIA can leverage carriers’ collective resources to deliver meaningful programs and resources to agents. Smith has a wealth of experience helping independent agents grow their businesses, including advising on digital marketing, perpetuation and customer experience best practices. She was previously a personal lines underwriter for Western Reserve Group and a sales manager at Grange Insurance.

www.ibamag.com

12-13_Intelligence-SUBBED.indd 13

14/04/2017 5:25:27 AM

UPFRONT

WORKERS’ COMP UPDATE

Opioid use falling, but still problematic Prescriptions for injured workers are down in several states, but long-term use remains a major concern

used the drugs long-term. California, New York and Pennsylvania also reported high rates of protracted opioid use; rates were lowest in Missouri and New Jersey. Significantly, the report observed that few injured workers who were using opioids over the long term received psychological evaluations or treatment. Texas, which provided the most psychological support services, only had one in three injured workers undergoing psychological evaluation.

Opioid addiction results in $55 billion in health and social costs every year

A new study by the Workers’ Compensation Research Institute [WCRI] found that the use of prescription opioids among injured workers in the US fell in several states between 2009 and 2014. The study found significant decreases in the amount of opioids given to workers suffering from injuries – from 21% to 30% – in Maryland, Massachusetts, Michigan, Oklahoma, North Carolina and Texas. Still, opioid use remained prevalent among non-surgical claims that registered more than

NEWS BRIEFS

seven days of lost work time. Around 65% to 80% of injured workers in most study states still received opioids, the report said. Louisiana, New York, and Pennsylvania dispensed the highest amounts of opioids. Meanwhile, Wisconsin, Iowa and Missouri registered an increase in average amounts of opioids per claim, but their rates remained lower compared to the median, WCRI added. Long-term opioid use was most prevalent in Louisiana, where one in six injured workers

Report shows WC claims down in Minnesota

A newly released report on the Minnesota Workers’ Compensation System has revealed that the number of paid workers’ compensation claims fell 53% relative to the number of full-time equivalent [FTE] employees from 1997 to 2015. Specifically, the number of paid claims per 100 FTE employees dwindled to 4.1% in 2015, compared to 8.7% in 1997. The study also noted that while higher benefits were paid per claim, costs have gone down relative to payroll because of the downward trend in claim rates.

The Department of Human and Health Services has made sustained efforts to combat the US opioid epidemic through its Opioid Initiative. HHS data reveals that opioid addiction results in $55 billion in health and social costs every year, and another $20 billion in emergency department and inpatient care for opioid poisonings. To address the problem, the Centers for Disease Control and Prevention released prescribing guidelines for patients. The CDC has also awarded more than $30 million to 29 states to encourage safe prescribing practices. “While actions to address prescription opioid abuse must target both prescribers and high-risk patients,” HHS said, “prescribers are the gatekeepers for preventing inappropriate access and providing appropriate pain treatment.”

WCRI launches redesigned website and logo

The Workers’ Compensation Research Institute [WCRI] has announced the redesign of its website and the launch of a new logo. Among other features, the new website has a cleaner design and navigation, improved search capabilities, and an e-commerce feature that allows users to purchase studies and register for events. “One of my goals at WCRI is to improve how we communicate our research and what we offer, especially to policymakers and others system stakeholders,” said John Ruser, president and CEO of WCRI.

www.ibamag.com

14-15_Workers comp update-SUBBED.indd 14

14/04/2017 5:25:48 AM

Q&A

Rich Ives VP of workers’ compensation, claim organization TRAVELERS

Years in the industry 17 Fast fact Predictive severity modeling such as Travelers’ Early Severity Predictor can help reduce costs by providing customized care and getting employees back to the workplace over shorter periods of time

How predictive modeling leads to better outcomes How are medical costs affecting workers’ comp in the US? Will this put pressure on pricing? Medical costs have outpaced, and continue to outpace, the rate of general inflation. Given that roughly 63% of our workers’ compensation costs are attributed to medical, this means our customers’ costs for workers’ compensation claims continue to increase.

past decade that are part of [our programs] are helping to provide significant benefits to our customers and their injured employees. Claim capabilities like our Early Severity Predictor, which is producing up to 50% better outcomes, and concierge nurse service, which helps injured employees return to work 35% faster, are just two examples.

What effect would a potential repeal of Obamacare have on workers’ compensation?

Can you talk a little more about the Early Severity Predictor?

It’s too early to understand the changes that could be coming our way, but we will analyze proposals as they are put forward.

What are the notable effects of insurtech on workers’ compensation? We are excited about the possibilities new digital technology provides us. We have begun leveraging the latest advancements to improve our processes and will continue to roll out new, innovative capabilities that streamline and enhance the claim experience. We have much to say about this area, and we look forward to sharing more in the future.

How will Travelers deal with the expected challenges in the market this year – particularly rising medical costs and “deteriorating prices,” as Fitch Ratings put it? We believe the innovations we have developed over the

Chesapeake names new security director

Maryland-based Chesapeake Employers’ Insurance Company has tapped Stephen Friedman as its director of security and privacy. He was previously a senior internal advisor at the company. In his new capacity, Friedman will ensure that the firm complies with laws and regulations applicable to the privacy and security of policyholder and claimant information. He will also help in the development of policies and procedures to protect company data, as well as facilitate the creation of disaster and incident response schemes.

Travelers created a patent-pending predictive model called the Early Severity Predictor that identifies injured employees who are at high risk of developing chronic pain, which often includes being prescribed painkillers like opioids, as part of their recovery. With our Early Severity Predictor, we can identify injured employees who have the propensity to develop chronic pain early in the duration of their treatment – within weeks, rather than many months later, and before a harmful addiction to pain medications like opioids occurs. Historically, 75% of these at-risk injured workers would have had surgery as part of their treatment. With the [risk modeling platform], these surgeries have been reduced by more than 25%, thus reducing the injured employee’s exposure to opioids. As a result, the Travelers program has improved claim outcome costs – which average approximately $40,000 per injury – by up to 50%, and our approach has helped to measurably reduce the use of prescribed opioids in our workers’ compensation claims.

Pinnacol Assurance issues $50 million in dividends

Colorado-based Pinnacol Assurance is remitting $50 million in workers’ compensation dividend checks to its policyholders for maintaining safe workplaces. The distribution benefited around 53,000 employers throughout the state, or around 94% of the company’s policyholder base. “This dividend is possible because of our policyholders’ commitment to the safety and well-being of their employees, Pinnacol’s financial stability and strength, and a vibrant Colorado economy,” said Pinnacol president and CEO Phil Kalin.

Ohio BWC rewards workplaces for safety

The Ohio Bureau of Workers’ Compensation has presented Safety Innovation Awards to five employers in the state who designed innovative solutions to prevent workplace injuries. “Sometimes a solution to a safety hazard isn’t readily apparent, and it takes extra effort and ingenuity to address a company’s unique needs and challenges,” said BWC administrator and CEO Sarah Morrison. “That’s just what each of these employers did, and we applaud them for going above and beyond to protect their workers.”

www.ibamag.com

14-15_Workers comp update-SUBBED.indd 15

14/04/2017 5:25:53 AM

UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS Vertafore study shows customers still prefer humans

According to a new study from Vertafore, 78% of consumers still prefer to work with a human agent when reporting an insurance claim, while 72% said they would be uncomfortable purchasing insurance through a chatbot. Meanwhile 60% of consumers said they worry that artificial intelligence could automatically deny coverage that would otherwise be approved by a human agent. “Technology investment is absolutely crucial to the success of the insurance industry,” said Vertafore vice president of industry relations Bruce Winterburn. “However, it’s important to remember the vital role agents play in the process.”

Tech firm provides new forensic weather data service

EagleView Technology has announced the availability of a weather forensics service aimed at helping carriers respond to post-event claims. The firm already provides aerial imagery, data analytics and geographic information; its new weather forensics feature, called EagleView Onsite, was developed via a partnership with HailStrike, which also specializes in weather forensics. EagleView said the service allows post-storm property and weather data to be delivered directly to the claims adjuster so they can “determine the most efficient and effective way to settle property claims.”

Amazon, Apple and Tesla have ‘opportunities in insurance’

According to a report by Morgan Stanley and Boston Consulting Group, tech giants like Apple, Amazon, Verizon and automaker Tesla are in a good position to sell car insurance as part of a ‘shared

mobility’ program in anticipation of the ubiquity of self-driving cars. The report noted that tech companies can leverage their data capabilities, upon which the emerging usage-based insurance [UBI] is largely based. “We think it is possible to envisage a credible entry strategy for tech giants that leverages driver data collected by navigation apps such as Google Maps, Waze, or Apple Maps services,” the report said.

Insurance still risks being left behind by technology

Insurance has been slower than other industries to adopt and incorporate technology, and while the gap is closing, those that fail to keep pace risk being marginalized, according to Fitch Ratings. The firm said that while improved computer processing capabilities, along with the proliferation of internet use and the development of smart devices, have created new opportunities for insurers, the industry has lagged behind other sectors. However, Fitch believes external pressure from disruptors is spurring insurers to close the gap – in some cases by investing in or partnering with insurtech startups.

Insurers will have “more interesting work” in the age of automation

Insurance professionals might worry about losing jobs to machines, but London School of Economics professor Leslie Willcocks says automation will likely alter jobs instead of eliminating them. “In the longer term, [automation] means people will have more interesting work,” Willcocks said in an interview with McKinsey & Co. “The evidence is that it’s not whole jobs that will be lost, but parts of jobs, and you can reassemble work into different types of job. It will be disruptive, but organizations should be able to absorb that level of change.”

Automation to change corporate structures A new report predicts corporations will evolve into autonomous units as technology advances Blockchain. Robotic process automation. Chatbots. Comparison shopping sites. Insurance brokers might just be becoming familiar with these technologies, but the way they do business could soon get a total makeover as consumers continue to demand that products and services – insurance included – be made available through these platforms. In a recent article circulated by the International Insurance Society, Andrea Potter, insights director at EYQ, poses the question: “[In the future], will companies as an organizing force even be necessary?” Potter argues that technologies – particularly artificial intelligence and blockchain – “will have profound implications for the way markets work. Machines will transact autonomously with other machines, as well as directly with people – automatically requesting service, triggering inventory replenishment or bidding for power.” Potter also argues that value creation will move from traditional corporate structures to the open environment of a world connected by the internet. “The future unit of funding might become specific projects and ideas – or even virtual networks of connected entrepreneurs – and not companies,” she said. “The future could see decentralized autonomous organizations that run on blockchains enter into contractual relationships with other people or machines, build networks of autonomous agents that

www.ibamag.com

16-17_Tech Update-SUBBED.indd 16

14/04/2017 5:26:21 AM

interact with one another, and perform specific objectives.” As technology pushes the corporate organization to adapt, leaders must think about prioritizing innovation and creativity, Potter said, adding that “building unique services into products and bespoke experiences into services will be the differentiator.”

“Building unique services into products and bespoke experiences into services will be the differentiator” Potter also predicted that efficiency will become the de-facto standard in the delivery of products and services, and creativity and the ability to generate value will be highly prized among individuals and organizations. Another imperative for surviving the next wave of technological advances is focusing on leadership strategy. “Managers must be liberated from operations to become strategic programmers of the business machine,” Potter said. Survival will also require a strategy to retain the best talent, she added. “Every company should also reposition itself as a dynamic learning community, made up of people who are committed to it despite having the option to contribute anywhere and everywhere,” she said. “At the end of the day, the best and brightest people will build their affiliations with enterprises that can make them smarter and more capable by a prolonged association.”

Q&A

Harald Felgner IoT architect

Technology: a threat and a tool

AXA SWITZERLAND

Years in the industry 6 Fast fact In a connected insurance model experiment, AXA was able to lower auto premiums by 20%

What are the current applications for the Internet of Things in the insurance industry? IoT is a big challenge to our current business model of insuring ‘dumb’ objects in the property & casualty business line. Think of autonomous cars as an evolution of today’s cars driven by humans, or consider connected tools preventing wrong use. The majority of experts agree that both property and liability claims risks will decrease. The insured will have to be less and less the private individual and more and more manufacturers and service businesses.

IoT devices have the capability to gather and transmit information from homes, cars, even people in real time. How do you see this capability changing the way insurance is priced and delivered? Our working assumption is that the prevention of losses will increase, claims will go down as a result, and insurance prices will go down for those policyholders with reduced risks. Those policyholders willing to subscribe to a connected offer, on the other hand, might additionally shift risk selection, at least during a period where connected insurance offers exist in parallel to non-connected classic offers.

What are the security issues with such capabilities? Internet security is a major challenge, as we saw last October when an IoT botnet was responsible for flooding DNS servers in North America and Europe with traffic, disrupting access to popular websites for all of us. Today, security is part of the user experience of computers and smartphones, as well as the limited range of devices that are connected to the internet.

How can these security issues be addressed? In order to ensure security of an exploding number of separate devices, the security administration, and maybe the device administration overall, has to be shifted to the device vendors or some sort of service layer built into the overall upcoming IoT standards. Maybe there has to be a next step where software administration is no longer in the hands of the consumer, but part of an ever-evolving solution.

Do you think technology is more of a threat or a tool for traditional insurance companies? Technology, in and of itself, is both: threat and tool. Those traditional insurance companies that will not be able to embrace the change – using technology innovation as a tool for new customer experiences – they will be threatened by the current trends. Those insurance companies standing still with their current offers will fall behind sooner or later.

www.ibamag.com

16-17_Tech Update-SUBBED.indd 17

14/04/2017 5:26:27 AM

PEOPLE

INDUSTRY ICON

TAILORED FOR SUCCESS Ben Walter, CEO of Hiscox USA, discusses the challenges of leading a specialty insurance provider and keeping up with the digital revolution

OVER THE last decade, Ben Walter has amassed diverse experience across the financial services, from working as a consultant for The Boston Consulting Group to serving as chief of staff for the COO of Barclays Global Investors. When he decided to make the move into insurance, it was entirely based on his experience with Hiscox. “I had never considered the insurance industry before,” he says. “When I met the team at Hiscox, I was particularly blown away by two things: one, how interesting specialty insurance was as a sector of financial services, and second, how differentiated and special the culture was in the business model of Hiscox.” The opportunity to be part of a business that was new and growing cemented the deal for Walter, and he became COO of Hiscox Group in 2011. Just 12 months later, he took the reins as CEO of its US division, Hiscox USA. According to the company’s strategic report for 2016, Hiscox USA delivered growth of 30% between 2015 and 2016. “Growing and scaling this business in a way that I think is economically sustainable for the long term and delivers real shareholder value [is something] I’m

very proud of,” Walter says. “I think that’s always been the goal, and that’s what we’ve been able to achieve.” Walter believes there are a few things that distinguish Hiscox from its competitors. “We bring Lloyd’s-style specialty underwriting – meaning creative, innovative, solution-oriented underwriting – onshore to the States,” he says. “We do it with a model that is not only high-touch

We deliver that service to our key distribution partners and clients with an emphasis on speed and quality.” Another important differentiating factor is the fact that Hiscox takes the claims process very seriously. “We have a saying around here: ‘If it’s gray, we pay,’” Walter says. “If it’s not covered, it’s not covered. But if it’s not clear, we are on the side of the customer, because

“There are plenty of coverages out there that aren’t bought. I think it’s because the industry doesn’t necessarily do the best job at telegraphing why coverage is valuable and how it can make our economy run more smoothly” and high-service, but also tailored to the customer segments we serve, both with respect to the industry they’re in and the size they are, which is a very important segmentation factor. A 10-person company is looking for something very different than a thousand-person company, just like a manufacturer is looking for something different than a professional services firm.

that’s what they’re buying – a promise to pay – and we take that promise seriously. We try to have anybody who has a claim, who’s going through a bad experience, have a great experience with us.”

The hurdles As discussion turns to industry challenges, Walter mentions how insurance has been

www.ibamag.com

18-21_Industry Icon-SUBBED.indd 18

14/04/2017 5:26:47 AM

PROFILE Name: Benjamin A. Walter Company: Hiscox USA Title: CEO Based in: New York City Years in insurance: 10 Fast fact: Walter has an MBA from Northwesternâ&#x20AC;&#x2122;s Kellogg School of Management and a BA from Washington University in St. Louis

www.ibamag.com

18-21_Industry Icon-SUBBED.indd 19

14/04/2017 5:26:53 AM

PEOPLE

INDUSTRY ICON

that are very well tailored to the segment – that just aren’t bought.”

Times ahead In terms of the emerging risk landscape, Walter says what interests him most is the significant shift that’s currently happening in the workforce. “We insure an increasing number of, broadly speaking, gig economy workers, and that is fundamentally changing the relationship between supplier and buyer, between employee and employer,” he says. “Despite legal and legislative efforts to try to minimize that shift, it’s happening and

“[The shift to the gig economy] is inevitable, and I think coming up with new, innovative coverages that respond to the way people work and the way that companies buy their services today is a huge opportunity” out how to efficiently and effectively blend different sources of capital, which might have different return hurdles, into the riskbearing marketplace,” he says. “That will be solved by continual experimentation and, frankly, a Darwinian competition.” And then there’s the issue of underinsurance. “There are plenty of coverages out there that aren’t bought,” Walter says. “I think it’s because the industry doesn’t necessarily do the best job at telegraphing why coverage is valuable and how it can make our economy run more smoothly. “Small business is chronically underinsured,” he continues, “and frankly, small businesses are the ones that really need insurance. There are plenty of small businesses that don’t have a basic general liability or BOP policy. We’re talking about coverages that have existed for 50 years –

HISCOX GROUP BY THE NUMBERS

FIVE -S

slow to become digitally literate. “In a world where every other industry has become digital at a much faster pace, I think the industry has been slow,” he says. “I think embracing new distribution models, new ways of trading, [and] new ways of interacting with customers [and] brokers … is what we can do to solve it, but I think that’s a huge challenge for the industry.” Walter also touches on other challenges insurance is currently facing, including the shortfall of young talent and the sourcing of capital. “The industry is still trying to figure

it’s inevitable, and I think coming up with new, innovative coverages that respond to the way people work and the way that companies buy their services today is a huge opportunity.” So what steps is Hiscox taking to prepare for tomorrow’s insurance industry? “Despite the fact that our US business is only 10 years old, we are starting a process to rip out all of our core technology and replace it,” Walter says. “We are relatively modern for an insurance company – we’re 100% paperless, our workflow is all electronic, yet to keep up with what’s happening in the marketplace, we’re taking what we’ve got and we’re ripping it up and we’re rebuilding it so that it’s scalable, it’s cyber-secure, [and] it can deliver change at a faster pace for a lower cost. That’s a scary but, I think, important thing to do.”

BR C

1901

Year in which the company that became Hiscox Group got its start, underwriting marine insurance as a member of Lloyd’s

2006

Year in which Hiscox opened its first US office

$3.01 billion

Total gross written premium for Hiscox Group in 2016

2,300

Approximate number of Hiscox Group employees worldwide

Number of countries in which Hiscox Group’s employees are based

www.ibamag.com

18-21_Industry Icon-SUBBED.indd 20

14/04/2017 6:12:43 AM

IBA Fiv

S BROKERS ON CARRIERS

7 201

FIVE -S

R CARRIE A R T

WHO ARE THE BEST SPECIALTY INSURANCE CARRIERS? Insurance Business America is rating specialty carriers in this important annual survey, starting May 8th. Participate in the survey by emailing Heather Turner at heather.turner@ibamag.com or enter online at www.ibamag.com

www.ibamag.com

IBA Five-star Carriers Full-page Ad_Updated.indd 8 18-21_Industry Icon-SUBBED.indd 21

14/04/2017 5:27:01 4:34:43 14/04/2017 AMAM

SPECIAL PROMOTIONAL FEATURE

SALES

Three steps to becoming a sales-driven agency If you want to increase your agency’s sales volume, there are three things you must focus on, as EZLynx’s Brenna Johnson outlines

“IF YOU don’t know where you’re going, any road will take you there,” goes the common saying. While the right technology can get you there faster, it may not be where your business needs to be. Efficiency is not an end game; it is the tool that helps you reach your agency goals. You must be making sales to achieve growth and profitability, and to retain top producers. While many agencies are leveraging technology to gain efficiencies, this is only as effective as the culture and processes in your agency. The best technology in the world will fail if the sales task, customer selection and producers are not aligned with the business strategy. Many independent agencies flounder when it comes to strategic planning for marketing and sales. To build a business strategy, you need to understand your target customer and goals. For example, if your agency understands how to successfully write dentists and represents the best markets, your business strategy should stem from this niche. Once the course is set, it’s the culture, process and technology that drive results. Step 1: Culture Cultivating a sales culture that is pervasive throughout an entire agency can be a challenge. Every independent agency relies on sales to grow and remain profitable; however, when it comes down to it, most agencies are not sales environments. Frequently, producers are segregated from the rest of the agency by technology. Pipeline data is collected and managed in one management tool, and policies are serviced in another. Sales teams focus on new leads and prospects in isolation from

the rest of the agency. Too often, the sales process is isolated and completely focused on brand-new prospects. Picture this: An agency purchases or receives a lead from a mortgage company. The producer works that lead and picks up the home policy; however, the client is not interested in moving her auto policies until the renewal in three months, but says the producer can follow up at renewal to see if they are competitive. The producer makes a note somewhere in the pipeline management tool, calendar or even on a notepad. Three months go by, and the producer forgets to follow up. In a better scenario, the producer does follow up, but he is missing information about the home policy because it is not in the same system. Each of these scenarios can leave the insured with the impression that the agency is not working in the best interest of the client, which can cause sales opportunities to slip through the cracks. In the day-to-day activities of servicing policies, agency owners can lose track of the big picture – the need for proactive prospect and client contact. A culture of sales that aligns with the business strategy should be the mindset of not only the sales team, but every single person in the agency. The independent insurance agent’s core competency is the ability to be a trusted advisor to the insured. This means identifying gaps in coverage, communicating those gaps and aiding the consumer in making the right policy decision. In most agencies, it is the customer service representatives who have the most contact with existing clients.

Opportunities to pick up an additional line of business or fill a gap in coverage are more likely to be identified by someone servicing the policy, but due to the separation, the CSR may never think to ask the right questions. To cultivate a culture of sales, everyone in the agency must feel as responsible for generating sales opportunities as your star producer.

Step 2: Process A true sales organization is larger than a single producer. It is a culture of sales driven by a process that is greater than any one employee. To achieve scalability and growth, a successful agency owner must develop a sales team and build a process that supports the business and marketing strategy. Relying on a single producer to send marketing material, follow up and set appointments will work for a while, but eventually things will begin slipping. Selling new business, especially commercial lines, is timeintensive. These accounts are touched by people throughout an agency during the sales process. A well-defined process for targeting and managing opportunities through the entire customer life cycle ensures that opportunities do not get lost in the shuffle. A well defined process covers more than just the sales funnel – it should feed from the agency’s culture and define things like questions that should be asked during policy servicing to identify opportunities or how cross-sell opportunities should be targeted at renewal. Each of these should also align with and support the business strategy. Once the business strategy and process are defined, an

www.ibamag.com

22-23_EZ Lynx-SUBBED.indd 22

14/04/2017 5:27:22 AM

agency can focus on the sales team. Getting staff buy-in on new philosophies and processes is difficult. When it comes down to it, none of us like change. This can be particularly challenging for successful producers. It is often difficult for them to embrace new processes that will benefit the agency as a whole when it differs from their existing way of doing things. It is important to demonstrate how the process aligns with and supports the agency’s goals – and remember that actions speak louder than words.

Step 3: Technology An agency’s technology should not detract from the culture or process, but rather help support and sustain the direction for the business. Technology is the engine that powers an agency to drive its process forward. Each tool should aid in tracking and enabling the sales process throughout the customer’s life cycle, but the technology should not eradicate relationships. Agencies that manage their sales pipeline, policy servicing, websites and communication tools through different vendors will have a

difficult time presenting a unified experience to the customer or prospect. While technology integrations are the industry standard, working from multiple systems can leave gaps that cause inconsistencies for agencies. The ideal technology will support the entire customer life cycle from a single platform. Agencies need technology that facilitates the process for five main areas: website, marketing, sales, policy servicing and renewal management. In today’s world, an agency’s website is its storefront to the world. It will be visited by current customers as well as leads. The need for a strong local marketing strategy for effective search engine optimization [SEO] is more important than ever. This should be optimized for keywords that support the business strategy. The marketing tools used to drive the lead-generation process can come in a variety of forms. The important part is to keep everyone in the agency on the same page. Managing these through different vendors or integrations brings the risk of missing something or someone at the agency not having a full picture of the agency’s communication to a prospect.

A pipeline management tool is essential for any agency that is serious about increasing sales. The market is saturated with vendors offering great tools that can track anything you want to sell. A successful agency will choose one that aligns with its business strategy to support its culture and process. In insurance, Sales Center, the newest addition to EZLynx’s productivity-focused products, enables any CSR to send sales opportunities directly to the sales team so that the entire agency is working toward a common goal of increasing sales. The more a producer knows about an opportunity, the more cohesive the message. Technology is an important tool to track and monitor the process, but the technology should support and assist the process and culture of an agency. This ties into the process of policy servicing and renewal management. The technology vendor you use should help put your entire agency on the same sales page. Each touchpoint for a customer provides a new chance to be a trusted advisor, which, with the right culture and a defined process, will produce a higher-volume sales funnel. Working from a centralized product helps agencies find money in their existing systems. It’s common knowledge that past contacts make the best prospects; however, if all of your sales or quote data is maintained in a separate system, producers can miss these prospects too. In the words of management guru Peter Druker: “Efficiency is doing things right; effectiveness is doing the right things.” In order for an agency to effectively drive sustainable profitability, its culture, process and technology must be in alignment with the business strategy. Any agency that gets these three key factors working together will position itself to become a sales-driven organization and overcome many of the challenges that other independent agents and brokers face.

EZLynx prides itself on increasing agency efficiency effectively through One Platform solutions. The company’s newest product addition is Sales Center, an insurance-focused pipeline management tool to help agencies align their culture, process and technology effectively. It was announced for limited release in October 2016 and will be available for general release in spring 2017.

www.ibamag.com

22-23_EZ Lynx-SUBBED.indd 23

14/04/2017 5:27:27 AM

FEATURES

COVER STORY: TOP PRODUCERS

TOP

PRODUCERS 2017

Discover the 100 producers who are leading the insurance pack

FOLLOWING AN overwhelming response from producers across the country, the nominations for 2017’s Top Producers were culled into this list of 100 of the industry’s top-performing professionals. To celebrate those producers who rose to the top of the pack, this year’s list

also features the Platinum Producers Club, which gives special recognition to producers with books worth $3 million or more. So what does it take to be a Top Producer in 2017? This year’s winners come from all walks of life and all regions of the country. Experience

counts, but it’s not everything: Nearly 44% of our Top Producers have been in the business for 10 to 25 years, while 24% have been in it for less than 10 years. Impressively, two of this year’s Top Producers made their mark on the industry in under five years.

TOP PRODUCERS INDEX COMPANY

NAME

COMPANY

NAME

COMPANY

Chuck Jennings

Arthur J Gallagher & Co.

Marcia Hahn

Diversified Risk Solutions LLC

Paul Gaglioti II

Acentria Insurance

Kendall McEachern

Acentria Insurance

Kevin Mason

Arthur J Gallagher & Co.

Mark Gresser

Donald F. LaPenna Associates Inc.

Donald LaPenna

Arthur J Gallagher & Co.

Michele Centeno

Donald F. LaPenna Associates Inc.

Michael DeStasio

Acentria Insurance

Shawn Budney

Arthur J. Gallagher & Co.

Mark Purfield

Eagan Insurance Agency

Christopher F. Trapani

Advanced Comp

Fielding Dickey

Arthur J. Gallagher & Co.

Peter Reilly

Eagan Insurance Agency

Marcus Eagan

AHT Insurance

Peter Dean

Arthur J. Gallagher & Co.

Richard Terlecki

Eagan Insurance Agency

Zachary Fanberg

AHT Insurance

David Schaefer

Arthur J. Gallagher & Co.

Scott Wightman

Esser Hayes Insurance Group

Tamara Knight

AHT Insurance

George Forrester

Arthur J. Gallagher & Co.

Tyler LaMantia