IBAMAG.COM ISSUE 9.04 | $12.95
TOP
2021 What the industry’s best producers are doing to raise the bar 5-STAR CANNABIS INSURERS
Brokers name the go-to partners in a burgeoning segment of the market
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PREPARING FOR NATURAL DISASTERS What should the industry take away from the deep freeze fiasco in Texas?
THE GATHERING STORM
How severe weather is affecting rates and capacity in commercial property
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ISSUE 9.04
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CONTENTS
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UPFRONT 02 Editorial
Is it time to embrace cryptocurrency?
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SPECIAL REPORT
5-STAR CANNABIS INSURERS
SPECIAL REPORT
TOP PRODUCERS
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Even in the midst of a pandemic, natural disasters and civil unrest, these 128 producers found a way to keep business booming
PEOPLE
INDUSTRY ICON
Breckenridge Group CEO David A. Jordan reflects on leading the company through two years of constant change
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Find out which insurers have set themselves apart by making an early move into a growing new market
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04 Statistics
Key data that should be on your radar this month
06 News analysis
The recent deep freeze in Texas underscored the importance of natural disaster preparedness
08 Intelligence
This month’s big movers, shakers and new products
10 Workers’ comp update
Wearable technology isn’t just keeping workers safe – it’s also making them more productive
12 Technology update
Artificial intelligence holds many benefits for insurance companies
17 Opinion FEATURES
SHELTER FROM THE STORMS
After an active natural disaster season in 2020, what can the commercial property market expect in 2021?
As telehealth options grow, so does the need for cyber risk management
PEOPLE 40 Other life
A taste of the grape life with insurance VP and wine aficionado Charles Boornazian
SPECIAL SECTION
EXECUTIVE INSIGHTS SERIES
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CYBER 2021
FEATURES
FOR THE LONGEST TIME
Russ Bobbitt reveals what has made Purmort & Martin Insurance Agency a fixture in the Sarasota, Florida, community for six decades
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UPFRONT
EDITORIAL
Is cryptocurrency worth another look?
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www.ibamag.com MAY 2017 EDITORIAL Managing Editor Paul Lucas Senior Editor Bethan Moorcraft Journalists Alicja Grzadkowska, Ksenia Stepanova, Mia Wallace News Writers Lyle Adriano, Terry Gangcuangco, Roxanne Libatique, Gabriel Olano
rom ‘no crypto’ to ‘go crypto!’ – as education, awareness and trust in digital currencies grows, society is fast approaching a time when cryptocurrency could become a preferred vehicle for business transactions. The North American cryptocurrency market saw a 300% increase in transactions from the first quarter of 2019 to the fourth quarter of 2020, according to CoinPayments, the world’s largest crypto payment processor. Not only that, but the average transaction size is also growing, which could imply greater levels of trust in digital currencies among businesses and merchants. The insurance industry has a choice to make: take a risk by embracing cryptocurrency and stepping into the future, or take a risk by ignoring cryptocurrency and getting stuck in the past. Engagement with cryptocurrency – whether in the form of insuring digital currencies or enabling cryptocurrency transactions – could quickly become a key differentiator in the customer experience. This is something that all organizations, including those within the insurance industry, are focused on today, especially as the COVID-19 pandemic has unlocked a whole new realm of possibilities in digital customer experiences.
Designer Joenel Salvador Production Coordinators Loiza Razon, Kat Guzman Customer Success Coordinator Bernz Jalandoni
Take a risk by embracing cryptocurrency and stepping into the future, or take a risk by ignoring cryptocurrency and getting stuck in the past
Editorial Inquiries paul.lucas@keymedia.com
Recognizing this, JAG Insurance Group, a Miami-based agency known for embracing innovation and challenging the status quo, recently announced it is investing in new technology to create an infrastructure that supports payment in cryptocurrency. In February 2021, the agency revealed it had issued its first insurance policy using cryptocurrency. Creating a bridge between digital currencies and traditional payment options, JAG is assuming the responsibility of converting cryptocurrency payments and transferring the money to insurance carriers. Is this the future? The JAG team certainly seems to think so, and judging by the social media reaction the move triggered, there are many others out there who not only think cryptocurrency solutions are cool, but recognize them as an important future business reality – one that insurers must engage with. Yes, there are risks associated with cryptocurrency. But the insurance industry is built around the idea of managing and mitigating risks, and it thrives on providing innovative solutions for emerging risks. Cryptocurrency is just one of the new concepts that insurers and brokers will have to wrap their heads around – sooner rather than later.
The team at Insurance Business America
Staff Writers Pete Miller, Ryan Smith Copy Editor Clare Alexander
CONTRIBUTORS Alicia Marsiglia
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Na Su iss All
“I have worked with Nautilus without hesitation since they opened their doors in 1985. Nautilus is a true and loyal friend in the industry. Policy after policy and year after year, they haven’t just earned my respect, they’ve earned my trust.” Mark L. Kaufman Chief Operating Officer Western Security Surplus Insurnace Brokers, LLC
NOBLE Contact Nautilus today.
General Liability | Property | Commercial Excess Inland Marine | Miscellaneous Professional Liability Privacy Breach | Crime www.nautilusinsgroup.com | 800.842.8972 Nautilus Insurance Group products and services are provided through various Surplus Lines insurance company subsidiaries of W. R. Berkley Corporation and offered through licensed Surplus Lines brokers. Not all products and services may be available in all jurisdictions, and the coverage provided by any insurer is subject to the actual terms and conditions of the policies issued. Surplus Lines insurance carriers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds. ©2021 Nautilus Insurance Group. All rights reserved. 04 | 21
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UPFRONT
STATISTICS FLOOD RISK PROJECTED TO INCREASE
4.3 million
Current number of homes in the US with substantial flood risk
THE UPS AND DOWNS OF M&A ACTIVITY The COVID-19 pandemic led to a year-over-year decline in M&A activity in the US in 2020. Overall deal value dropped by 21%, according to Marsh, while the total number of deals fell by 16%. However, most of the decline happened in the second quarter, when the initial shock of the pandemic led to a sharp pause in M&As. Only $77.3 billion worth of deals took place in Q2 2020 – but as the economy adjusted, appetite for M&As rebounded, and the fourth quarter of the year recorded the highest-ever deal M&A value in a single quarter at $545 billion. Meanwhile, Marsh recorded an 11% year-over-year increase in transactional risk insurance placements, placing a total of 1,041 primary and excess policies – the first time it has exceeded 1,000 transactional risk policies in a single year.
M&A DEAL VOLUME IN THE US
Q2
Q3
Q4
2015: $1.8 trillion
$357.5 billion
$20 billion
Q1
$469.3 billion
$465.2 billion
$510.8 billion
2016: $1.48 trillion
Potential annualized losses for properties with substantial flood risk in 2021
$254.9 billion
$32.3 billion
Potential annualized losses for properties with substantial flood risk by 2051
$502.7 billion
$391.4 billion
$327.2 billion
REAL ESTATE UMBRELLA RATES SOAR Umbrella rates in the US real estate sector have seen drastic increases, according to Gallagher, including triple-digit hikes in three segments of the market. Gallagher attributed the higher rates to several factors, including increases in wage costs, medical costs, and the cost of goods and services, along with social inflation.
AVERAGE REAL ESTATE INSURANCE RATE INCREASES, 2020 General liability
Umbrella
Mixed portfolio
Multifamily
400% 200% 100%
7.2 times
Amount NFIP rates would have to increase by 2051 to fully cover the expected risk
80% 60% 40% 20% 0% -20%
Office Source: The Cost of Climate: America’s Growing Flood Risk, First Street Foundation
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Industrial
Retail
Single-family homes
Source: Q1 2021 Real Estate & Hospitality Insurance Market Update, Gallagher
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RATE HIKES LIKELY FOR ARCHITECTS AND ENGINEERS
2017: $1.33 trillion
$325.2 billion
$293.7 billion
$296.9 billion
Almost all providers of architects and engineers’ professional liability are seeking rate increases in 2021, according to a survey by specialist broker Ames & Gough, which attributed the higher prices to significant uncertainty and an increase in claims activity.
$414.3 billion
2018: $1.53 trillion
INSURERS’ ESTIMATED 2021 RATE HIKES FOR A&E PROFESSIONAL LIABILITY $322.3 billion
$423.6 billion
$368.8 billion
$417.5 billion
57%
2019: $1.59 trillion
$477.7 billion
$518.3 billion
$290.9 billion
$306.7 billion
25%
2020: $1.26 trillion
19%
$420.8 billion $218.1 billion
$545.0 billion
$77.3 billion
5% or less Source: US and Canada Transactional Risk Insurance 2020: Year in Review, Marsh
6% to 10%
More than 10%
Source: Ames & Gough Architects & Engineers Professional Liability Insurance Market Survey
CYBER INCIDENT COSTS SPIKE IN 2020
COMMERCIAL INSURANCE PRICES CONTINUE TO RISE US commercial insurance prices rose by 11% in the fourth quarter of 2020, marking the highest quarterly increase since 2003, according to Willis Towers Watson’s latest survey on pricing trends. Amid continued economic uncertainty, prices rose for almost all insurance lines in Q4.
Despite a lower number of cyber incidents in the US in 2020, the average loss from an incident has risen rapidly. Hiscox reports that the median cost of an incident in 2020 clocked in at $50,000, a 400% increase from 2019’s median cost of $10,000.
MEDIAN COST OF ALL INCIDENTS AND BREACHES
YEAR-OVER-YEAR CHANGE IN COMMERCIAL INSURANCE PRICES 12%
FIRMS REPORTING AT LEAST ONCE CYBER EVENT
$10,000
10%
2019
8%
53%
6%
2019
4%
$50,000
2%
2020
41% 2020
0% Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Source: Commercial Lines Insurance Pricing Survey 2020 Q4, Willis Towers Watson
Source: Cyber Readiness Report 2020, Hiscox
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UPFRONT
NEWS ANALYSIS
From deep freeze to an icy chill Record-low temperatures in Texas in February revealed cracks in the state’s risk management, sounding the alarm on the consequences of ignoring past catastrophes
IN FEBRUARY, Winter Storm Uri hit the United States, northern Mexico and parts of Canada, but it left a particularly deep mark on the state of Texas, which experienced some of its coldest weather on record. Because the state’s power grid and residents were severely unprepared, millions of Texans were left without electricity and water for days, and insurance claims related to the storm have started to pile up. The event, known as the ‘deep freeze,’ has topped Hurricane Harvey in insured damage
comparison, winter storms across the country caused just over $2 billion worth of insured losses in 2019. “I’ve lived in Texas my whole life … and I’ve never seen it that cold,” says Terry Holley, regional manager for Texas and Oklahoma at Appalachian Underwriters, who ended up moving homes as the event unfolded and was able to provide shelter to neighbors who experienced burst pipes and had no power. Since the event, he says, communities have started to recover, but “there’s a lot of
“We’re seeing the claims, and they’re going to be coming in for a while across the state” Terry Holley, Appalachian Underwriters estimates and is likely to become the state’s largest claims event ever, according to the Insurance Council of Texas. Chuck Watson, a disaster modeler at Enki Research, believes the severe weather event could result in as much as $90 billion in losses, with $35 billion of that total stemming from physical damages and only $20 billion covered by insurance. By
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damage, and while some people are able to get contractors in to start doing work, there’s a line because supplies are limited.” At Appalachian Underwriters, he adds, “we’re seeing the claims, and they’re going to be coming in for a while across the state.” It’s not the first time Texas has been impacted by a disaster like this. In 2011, the
state experienced single-digit temperatures, which caused 193 generating units to falter, leading to rolling blackouts that affected 3.2 million customers. However, recommendations proposed after the catastrophe, which aimed to better prepare the state’s power grid and its industries for a similar event, were not widely implemented, demonstrating the very real consequences of not taking climaterelated risks seriously. “I’d like to think that we always get smarter … but I now put a question mark over that because of the 2011 and 2021 experiences,” says David Robertson, global head of energy risk consulting at Allianz Global Corporate & Specialty (AGCS). “Where it broke down last time was actually spending the money implementing these recommendations.” The situation in Texas reveals the broader challenges of managing risk in the face of natural catastrophes. While AGCS and other industry players counsel insureds on investing in themselves to protect their shared interests, it’s ultimately the insured’s decision
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THE TEXAS DEEP FREEZE BY THE NUMBERS
4.3 million Power outages reported during the storm’s peak
$18 billion Insured damages expected from the event, according to preliminary estimates
8 Consecutive days where temperatures were 45°F or colder about how to move forward. “I’m an optimist, and I’d like to think the simple answer is yes, they will take all these recommendations under consideration and build a more resilient power generation network,” Robertson says, though he adds that he remains wary.
and social distancing measures, all of which made preparing for disasters more difficult. But while the pandemic revealed weak points in some companies’ risk mitigation planning, it has also helped certain insurance players learn how to prepare effectively and react quickly when catastrophes hit.
14.9 million Texas residents who reported weather-related operational disruptions Sources: National Weather Service, The New York Times, Associated Press
“I’d like to think that we always get smarter … but I now put a question mark over that” David Robertson, Allianz Global Corporate & Specialty Beyond Texas, the past year has demonstrated the consequences of the increasing frequency and severity in natural catastrophes, including one of the most active Atlantic hurricane seasons on record. At the same time, the US was dealing with the coronavirus pandemic, which brought supply chain disruption, death, emotional distress
“We were able to find a way to still complete our mission, from an essential worker standpoint, in the US,” Ken Tolson, president of network solutions at Crawford & Company, says of the past year. The pandemic has also given the company a leg up on responding to challenging circumstances, Tolson says. During
the deep freeze event in Texas, Crawford was able to increase its adjuster deployments on a daily basis while receiving a steady stream of both residential claims and commercial claims from businesses like hospital systems, lumber yards and multi-resident apartment complexes. “Our employees are on the front lines of helping people return themselves to normal after these cataclysmic weather events, which seem to be coming every single day,” Tolson says. “As tough as last year was, it helped us perfect our deployment and the way we train people and execute when those events do happen.”
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UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
Amwins Group
Worldwide Facilities
The combined wholesale brokerage will represent more than $24 billion in annual premium
Applied Underwriters
Florida Casualty Insurance Company
The acquisition of the Fort Lauderdale-based insurer is part of Applied’s national and international expansion strategy
CRC Group
Griffin General Agency
Houston-based Griffin’s operations include commercial P&C binding and personal lines
Davies
The Littleton Group
The Texas-based TPA and claims adjuster will join Davies’ US Claims Solutions arm
Howden
Sturge & Taylor Associates
The deal expands Howden’s marine insurance offering in the US pleasurecraft market
HUB International
Benefit Strategies Agency; David Trachtenberg Inc.; Finn & Stone; Incentive Systems; Juban Insurance Group; Wellspring Insurance Agency
HUB finalized six new agency acquisitions across the US in March, including two in Philadelphia and four more in Louisiana, Texas, Vermont and Ohio
Randall-Reilly
Central Analysis Bureau
CAB provides risk assessment tools and data for the transportation insurance sector
Sequel
Whitespace Software
Whitespace will gain access to the resources of Sequel and parent company Verisk while retaining its own brand and autonomy
Mosaic Insurance enters war and terrorism market
Mosaic Insurance has begun underwriting war, terrorism and political violence risks globally out of its offices in London and New York. Mosaic’s tailored coverage spans commercial, industrial and residential property risks associated with acts of terror and sabotage, malicious damage, strikes, riots, civil commotion, and war. The firm’s broad range of standalone terrorism products can be written as primary, excess or quota-share coverage to mitigate damage, business disruption costs or lost sales revenues in the event of an attack or threat. Its US operation will offer up to $250 million through syndicated capacity.
Amwins acquires rival in surprise merger
In a move that sent a shock wave through the US specialty insurance market, Amwins Group has signed a definitive agreement to acquire rival wholesale broker Worldwide Facilities. Together, the combined firm will have more than 6,100 employees in 155-plus offices across the US and place more than $24 billion in premium annually. The transaction broadens Amwins’ specialty capabilities in brokerage, underwriting, binding authority and group benefits. It also expands its geographic footprint, especially on the West Coast. “The acquisition of Worldwide is a watershed moment not just for Amwins, but the specialty distribution space,” said Amwins CEO Scott M. Purviance. “Since the beginning, we’ve believed that scale and specialization are key to delivering for our clients. Over the last 19 years, we’ve been able to build an organization that stands out amongst the competition. With the addition of Worldwide to the Amwins family, we are partnering with a very talented group of brokers and underwriters.”
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M.J. Hall lights up cannabis business cover in Arizona
Broker M.J. Hall & Company has partnered with an A-rated insurer to offer its Cannabis Businessowners Policy (CannaBOP) in Arizona. Providing admitted coverage for cannabis industry business owners, CannaBOP includes property limits of up to $10 million in total insured values, $1 million in cannabis stock and up to $2 million in business income. It also features general liability coverage with limits of $1 million per occurrence, as well as $2 million in the aggregate for premises liability, $1 million in limits for products liability and $2 million in the aggregate on a claims-made basis.
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PEOPLE K&K, Markel Specialty team up on recreation insurance
K&K Insurance Group, a subsidiary of Aon, and Markel Specialty, a division of Markel Corporation, have joined forces to offer insurance for motorsports; accident; and events, attractions and recreation property & casualty. “We’re excited to be collaborating with K&K, a recognized market leader in sports, recreation and leisure insurance, in addressing the current and future risk and insurance needs of customers within these segments,” said Markel Specialty president Bryan Sanders. “We believe this collaboration will allow us to profitably grow our admitted portfolio and premium in these key segments.”
Beazley launches D&O products for SPACs
Beazley has rolled out a directors & officers product suite designed specifically for special purpose acquisition companies (SPACs), an increasingly popular type of company set up to facilitate initial public offerings. The needs of SPACs have historically been met through endorsements to existing D&O policies, but Beazley’s new products for US-domiciled SPACs offer dedicated coverage to provide greater clarity from the IPO to the initial business combination. The new coverage is available for either the individuals involved in the SPAC or the entity and individuals combined.
AXIS, Elpha partner on small business cyber solution
AXIS Insurance has teamed up with cybersecurity firm Elpha Secure to provide cyber insurance and software protection for small businesses. The partnership will leverage the Elphaware software as a service application, which offers a suite of cybersecurity tools – including data backups, multi-factor authentication, system restoration and insider threat detection – that work alongside existing security measures. The Elphaware system provides protection from social engineering and ransomware attacks and also enables small businesses to recover quickly after an incident.
NAME
LEAVING
JOINING
NEW POSITION
Amy Barnes
N/A
Marsh
Head of sustainability and climate strategy
Michael Becker
N/A
Broadspire
Chief client officer
David Cloward
Allianz Global Corporate & Specialty
HUB International
Practice leader, entertainment
Olga Collins
Beecher Carlson Insurance Services
Worldwide Broker Network
CEO
Mark Cunningham
N/A
Broadspire
Chief sales and marketing officer
Brian English
Alliant
Liberty Company Insurance Brokers
Vice president
Erica Fichter
N/A
Broadspire
Chief operating officer
Keith Freid
AIG
Berkshire Hathaway Specialty Insurance
Product line officer, private and nonprofit management liability
Mike Hoberman
N/A
Broadspire
President
Bethany Kaiser
Alliant
Liberty Company Insurance Brokers
Senior vice president
Charles E. Makey III
N/A
Merchants Insurance Group
President
Marty O’Hara
AssuredPartners
Newfront Insurance
Principal
Jeff Sickles
N/A
Broadspire
Chief claims officer
Anthony Tatulli
AIG
Berkshire Hathaway Specialty Insurance
Head of executive & professional lines, North America
Worldwide Broker Network names new CEO
Worldwide Broker Network (WBN) has appointed Olga Collins as its new CEO. Collins succeeds Francie Starnes, who will remain with the company through 2021 to guide the transition process. Collins joins WBN from Beecher Carlson Insurance Services, where she has led the multinational practice for the last seven years. Before that, she spent 15 years at UPS as a risk manager. “Olga’s impressive track record of building international insurance relationships and her time as a risk manager gives her a deep understanding of client needs,” said WBN chairman Alex Gilmore. “This is an exciting moment for WBN as we expand and further strengthen our network as the insurance and benefits broker network of choice for multinationals, and Olga is the ideal candidate to lead us forward.”
Merchants Insurance Group gets new president
Merchants Insurance Group has named Charles E. Makey III as its new president. Makey has more than 30 years of industry experience; he joined Merchants as director of sales in 1996 and has held various leadership roles, including managing the New England region. He most recently served as senior vice president of insurance operations. “The appointment of Charlie as our next president is the culmination of a thoughtful succession plan that has been in process for a couple of years,” said former CEO Robert Zak, who retired after more than 25 years in the position and will remain on the company’s board. “His knowledge of the business and energetic manner, coupled with an excellent executive team, will make this transition seamless.”
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UPFRONT
WORKERS’ COMP UPDATE NEWS BRIEFS OSHA introduces pandemic risk program to protect workers
The Occupational Safety and Health Administration has launched a national emphasis program (NEP) designed to protect high-risk workers from COVID-19. The NEP builds on OSHA’s previous COVID-19 enforcement efforts by focusing on companies that put the largest number of workers at critical risk of contracting the virus, as well as employers that retaliate against their own workers for complaints about unsafe and/or unhealthy conditions. The program’s inspections will include follow-up inspections of work sites that OSHA assessed in 2020.
Amazon teams up with Next Insurance to sell workers’ comp
E-commerce giant Amazon is getting into the workers’ compensation insurance market thanks to a new partnership with digital insurance company Next Insurance. The partnership will allow Amazon Business Prime members to obtain a small business insurance quote online from Next. Members will also be able to immediately purchase general liability, professional liability, workers’ compensation, commercial auto and tools & equipment insurance from the insurtech.
Pan-American, 5Star partner on workers’ comp coverage
CRC Group’s 5Star Specialty Programs subsidiary has joined forces with PanAmerican Benefit Solutions (PABS) to offer workers’ compensation coverage for the trucking industry. Designed to address the needs of clerical workers’ compensation class codes as well as W2 fleet risks, the partnership will
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strengthen PABS’ position as a provider of accident and health coverage for the transportation industry. As one of PABS’ key distribution partners, 5Star will be among a select group of providers with access to the workers’ compensation program.
Workers’ comp insurer ordered to pay back millions to trucking firm
A federal jury in Ohio has ruled that RLI Insurance must reimburse $2 million that a trucking company paid to an employee who was severely injured at work. The contracted worker, Ryan Marshall, became permanently disabled as the result of a 2014 accident. He sued P.I.&I. Motor Express; the company settled with Marshall in 2019, then filed a lawsuit against RLI Insurance, alleging breach of contract after the insurer refused to provide indemnity. The Ohio jury sided with Motor Express, concluding that Marshall was a temporary employee who was exempted from the employers’ liability exclusion under the company’s policy.
MDGuidelines launches tool to analyze disability durations
MDGuidelines, a developer of pointof-care decision support solutions for insurers, employers and healthcare providers, has launched Durations Analyzer, a new tool to benchmark claims performance. Drawing data from MDGuidelines’ proprietary population database, which includes estimates of typical disability durations for more than 20,000 diagnoses, Durations Analyzer allows users to compare short-term disability or workers’ comp injury/illness durations to MDGuidelines’ population and physiological duration benchmarks. It offers advanced reporting and incorporates diagnostic-level detail with the benchmark information.
Connected workers, protected workers The latest wearable technology is helping to keep workers safe from COVID-19 exposure – and making them more efficient in the process Wearable technology presents a smart, convenient way for industrial and manufacturing organizations to keep tabs on workers and their personal safety amid COVID-19, and data and analytics company MākuSafe recently rolled out updates for its wearable devices to enable just that. “The MākuSafe wearable device contains numerous IoT-enabled sensors that gather data about ever-changing environments around a worker, potentially hazardous human motion, location where these indicators are being detected, proximity to other wearables or other pieces of equipment, and also allow for voice recording of messages from the front lines,” explains Thomas West, vice president of marketing at MākuSafe. “It is all this data that is relevant to worker health and safety, combined with the ability of our cloud computing platform, MākuSmart, to process data in volume and use machine learning and AI and identify trends and patterns that have predictive value in understanding risks and hazards.” Enhancements to the technology now allow it to perform accurate contact tracing and provide health notifications. MākuSafe has also added a new reporting functionality to the MākuSmart platform that presents action-
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able insights through selected templates, including on-demand contact tracing for any given timeframe. The platform provides notifications in real time whenever conditions are unfavorable or when risk thresholds are being approached, giving leaders the ability to take preventative steps to mitigate risks.
“Just like safety glasses, hearing protection and hard hats, workforce wearables are the next evolution” “In addition to being proactive based on data evidence now, there is tremendous value in being able to look back at historical data,” West says. “If a worker experienced a strain from exertion, we have customers who begin to dig into data to see what motion that worker exhibited and look at other workers’ motion and physicality in comparison. Are there other workers exhibiting a similar motion profile who we can keep safe before they experience an incident?” In addition to improving worker safety long after the pandemic, MākuSafe can also help boost productivity. Updates will allow MākuSafe’s wearables to speak to IoT-enabled equipment, which could lead to insights on how to improve worker productivity. MākuSafe can also help clients control access to restricted spaces or machinery based on whose wearable device is present. “Connected workers are the future of every work site across the planet,” says MākuSafe CEO Gabriel Glynn. “Just like safety glasses, hearing protection and hard hats, workforce wearables are the next evolution.”
Q&A
Alek Turko Managing underwriter and office president 5STAR SPECIALTY PROGRAMS
Years in the industry 20 Fast fact Prior to joining the insurance industry, Turko spent seven years working on merchant ships running between Indonesia and Japan and deep-sea tugboats towing container barges from New Jersey to San Juan, Puerto Rico
Driving safety for truckers What was behind 5Star Specialty Programs’ decision to partner with Pan-American Benefit Solutions (PABS) to provide workers’ comp coverage to the trucking industry? 5Star Specialty Programs initially began working with PABS about two years ago in order to write trucking occupational accident business for independent owner-operators and contract drivers. PABS has been an excellent partner for 5Star since day one, and we have experienced significant growth with PABS writing standalone occupational accident business. A deeper partnership was a positive outflow of a solid working relationship already in place around occupational accident insurance. The addition of a workers’ compensation product will now enable us to provide coverage for any W2 employee associated with a trucking company. The WC will only be written on risks where PABS is also writing the occupational accident coverage, as WC is not offered on a stand-alone basis.
What are biggest employee risks in the trucking industry? Truckers – both company drivers and owner-operators – face a variety of risks associated with their occupations. For example, the trucking industry has a high frequency of material handling injuries due to the need to load and unload large or heavy products from trailers. Highway hazards, including distracted drivers, careless motorists, difficult driving conditions and driver fatigue, are another big issue every truck driver faces daily. Slips, trips and falls also occur, often while drivers are exiting their vehicles or checking that loads are secure before traveling. In addition, the sedentary lifestyle and unhealthy eating habits common to on-the-road truckers tend to lead to obesity, which can play a role in the development of many other health concerns.
Has the pandemic exacerbated these risks in any way? Early in the pandemic, the trucking industry slowed significantly for a brief time but rebounded quickly as trucking companies worked hard to deliver essential medical supplies and equipment to front-line workers and ensure store shelves were stocked across the country with necessary consumer goods. During the pandemic, roadway congestion was actually reduced across the country as many people began working from home, making it much easier for truck drivers to make timely deliveries.
How can trucking companies ensure that their own W2 drivers remain safe amid the pandemic? Many larger trucking companies have developed COVID-19 safety guidelines to assist with driver safety while on the road. Trucking companies can also encourage drivers to adhere to all CDC and state-specific safety guidelines and provide their drivers with masks, gloves and hand sanitizer to assist in keeping every driver safe. Companies can also encourage common-sense hygiene practices such as frequent hand washing.
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UPFRONT
TECHNOLOGY UPDATE
Addressing inefficiencies with AI Checking policy data is just the tip of the iceberg in artificial-intelligence-powered policy administration
have a large selection of policy administration systems to choose from, and most carriers had to use their own “home-grown” systems. Rheem also notes that AI solutions can do more than just go over data – they can also resolve inefficiencies in insurers’ day-to-day business. One of the most notable is the process of having insurance products approved by state regulators, while simultaneously determining how best to program for complex algorithm changes and business rules
“Advanced analytics enable insurers to adjust their business to reduce risk”
Patra, a provider of tech-enabled services for the insurance industry, recently cemented a new partnership that will give its clients access to AI-powered policy checking. To deliver these capabilities, Patra tapped expert.ai, a specialist in AI-based natural language understanding (NLU) and natural language processing (NLP). “Advanced analytics enable insurers to adjust their business to reduce risk,” explains Jane Rheem, Patra’s chief data and analytics officer. “By infusing AI and NLP into the Patra
NEWS BRIEFS
workflows, we help insurers automate tasks and processes and optimize staff ’s time to grow their business rather than administer it.” According to Rheem, 80% of insurance data remains unstructured, likely because there is no one policy format that works for all types of insurance. “There is often free-text information from different parties in creating policies and claims, and those raw data inputs are usually stored for future auditing purposes,” she says, adding that until very recently, insurers didn’t
to support the state approval. This is something AI can help to smooth out, Rheem says. Market acquisition activity in the carrier space also poses a data efficiency challenge, especially when both entities have proprietary systems in place. Again, Rheem says, AI can be used to ensure that nothing gets lost during the data migration process. “We see using AI as part of our core processes in a variety of ways to enhance largevolume, predictable processes in insurance,” she says. “At Patra, we know that it is vital to keep a team of insurance-trained people in the loop to support and refine the technology. Using AI is the first step of many that we are working to pair technology and people, bringing exciting changes to the industry.”
Beazley unveils digital business unit, new partnership
Aon and Nayms collaborate on cryptocurrency pilot
Beazley has rolled out a new digital business unit and named a new risk management service partner. The Beazley Digital unit will spearhead a new approach to how the insurer develops, underwrites and delivers digital insurance services to brokers and clients. The new unit’s responsibilities include enhancing the capabilities and reach of the myBeazley online platform. In addition, the company named Praesidium as the provider of enhanced risk management, prevention and response services for Beazley Safeguard policyholders.
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Aon has teamed up with insurtech platform Nayms to support cryptocurrency investors by insuring crypto risk. The two companies will conduct a pilot program with Teller Finance, a decentralized lending protocol, to highlight the ability to scale cover efficiently by matching cryptocurrency assets to liability. Specialist insurer Relm Insurance will serve as the underwriter for the pilot, which Aon touted as the first blockchain-enabled placement of insurance ever conducted with regulated, professional insurance agencies.
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Q&A
Eric Bluhm Senior vice president of sales ZYWAVE
Years in the industry 15 Fast fact Bluhm has held positions in both the insurance and finance industries; he joined Zywave as an inside sales representative
Bridging the gap between agencies and carriers What’s holding insurance agencies back from pursuing greater connectivity with insurers? Carriers and agents both want greater connectivity to streamline and automate the application process, but there are several obstacles to overcome. The first one that comes to mind is business disruption. Many P&C agencies have operated successfully for years by relying on traditional manual processes. They may be worried that changing their workflows will slow down business and impact customer service. Another concern is the potential for unwanted sharing of their information. Many agents are protective of their data, and some may fear they will be ‘data mined’ by carriers, who will share it more broadly. Another potential concern is that automating the application process could diminish an agent’s value, making their role in the insurance-buying process purely transactional, reducing the consultative approach they take during the application process and limiting how they can interact with their clients and prospects.
Many agencies say they have lost opportunities because they couldn’t find a market to quote a risk. What are some ways carriers can better capitalize on these opportunities? The more carriers that connect directly with agencies, the more markets the agents will have. Carriers should work more closely with their appointed agencies to make them aware of their current appetite so agents don’t waste time submitting applications that don’t meet certain carriers’ appetites.
Lloyd’s achieves milestone in digital transition
Lloyd’s of London has published the first version of its Core Data Record (CDR), which aims to enable standardized, quality data to flow through the Lloyd’s market to improve operations, reduce the cost and effort of doing business, and improve customer service. The publication is a key milestone for Lloyd’s Blueprint Two program, the second phase of its strategy to digitize the market. Lloyd’s is collaborating with ACORD to adopt the global standards already used in the London market and internationally.
RecovX Health files patents for claim app
Using a dedicated quoting and proposal platform like Zywave CPQ – P&C can help mitigate this issue, since certain applications will be automatically rejected by certain carriers for not meeting their underwriting guidelines or their current appetite.
What about e-docs – what are the current challenges in adoption? E-docs are a great way for agents to access policy, billing and claims information directly from carriers. Connecting e-docs to an AMS is a great way for agents to get the policy information they need quickly and efficiently. E-docs are a great way to increase carrier and agency connectivity by providing real-time access to critical policy information. Challenges to adoption, however, mirror the answers to the first question, since many agents still rely on collecting this information from carriers via email, mail or fax. The key to adoption is helping them understand that easy access to this information can save them time and provide better customer service to their clients.
How else can agencies and carriers further improve their connectivity? Agent portals are another way to better connect carriers and agencies. Many carriers have these, but they are not widely utilized or embraced. These portals can share resources from carriers with their appointed agencies. They often incorporate message boards and alerts as a way to create a better dialogue between carriers and agents.
Insurtech RecovX Health has filed 11 patents for the technology behind its InjuryClaimsExpress self-service claim app. According to RecovX Health founder Lee Fogle, the app reduces the time it takes to settle claims by an average of 50% and, by eliminating unnecessary costs, boosts the average net compensation claimants can receive. “Furthermore, our app reduces the cost of claims administration for insurance companies, which has an effect on reducing the overall cost of insurance for everyone,” Fogle added.
Sapiens, ECHO Health team up on digital payments
Insurance software provider Sapiens International has partnered with digital payment company ECHO Health to provide carriers with comprehensive digital payment capabilities. Within Sapiens’ P&C and workers’ compensation software, ECHO’s payment processing solution will enable carriers to eliminate manual payments. Carriers will be able to reconcile payments across multiple modalities with minimal IT requirements, and all client financial data will be streamlined into a single access point.
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PEOPLE
INDUSTRY ICON
WHOLESALER OF CHOICE It’s been a turbulent two years since David A. Jordan took the helm at Breckenridge Group. He tells IBA how putting teams, carrier partners and retailers first has helped the company succeed
DAVID A. JORDAN’S professional career spans more than four decades, and he’s spent each and every one of those years in the insurance industry. At this point, you’d think the day he began working in insurance would be a distant memory, but that’s definitely not the case. “I always remember the date I started working in the industry. It was Monday, March 17, 1980,” Jordan says, adding that it helps that his first day as a management trainee for an AIG subsidiary called New Hampshire Insurance Company happened to fall on St. Patrick’s Day. Even now, he says, “that day has always stayed with me.” Forty-one years later, Jordan has had only three employers. He was with AIG for 21 years in two different stints, including New Hampshire Insurance Company and Lexington Insurance Company, and then spent eight years at Atlantic Mutual Insurance Company. Afterwards, he worked for W.R. Berkley Corporation, stepping into the leadership role at Vela Insurance Services in 2009, before taking on his latest challenge as CEO of Breckenridge Group in 2019. “I consider it a terrific way to build a career – to have had that kind of stability with employers, but also to have had the constant opportunity to upgrade my skills, take on new responsibilities and challenges, and have the chance to advance my career without having
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to go somewhere else to do that,” he says. And while Jordan got his start in insurance on a whim – after answering an advertisement in the Sunday paper about a trainee program – he’s since developed a real passion for the industry. “The ability of our industry to innovate and create new products and services to answer challenges that the economy presents has been a fascinating one to participate
tion at Breckenridge. A casualty underwriting organization focused on the E&S lines industry, Vela distributed its products exclusively through wholesale brokers. One of the key lessons Jordan took away from his 10-year run at the company was that wholesale brokers are some of the smartest, hardestworking people in the industry. “I had dealings with wholesalers previously, but this was an intense experience, and
“[I’m] a firm believer that all the technology in the world doesn’t replace the human interactions that a wholesale broker brings to the retail agent communities they serve and the carrier partners that are so integral to delivering those solutions” in over all these years,” he says. “I constantly have the ability to learn new things, engage with the marketplace and solve problems for business owners around the country.”
Stepping up Jordan’s time as president and CEO of Vela was critical to him landing his current posi-
it really renewed and increased my appreciation for them,” he says. “When the opportunity came up to join Breckenridge as the leader, to me, it just felt like a very natural evolution of my career.” It was also an exciting time to move over to the distribution side of the business, as the commercial property & casualty marketplace
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PROFILE Name: David A. Jordan Title: CEO Company: Breckenridge Group Based in: Kennesaw, Georgia Years in the industry: 41
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PEOPLE
INDUSTRY ICON
was at the beginning of a transition. After some poor results, companies were rethinking their exposures, pricing and coverages. “The timing was especially propitious for wholesale brokers,” Jordan says, “because they act as the safety valve between the retail agents, who are going to find themselves scrambling to identify solutions for their business owner customers, and then on the other side, the insurance carriers, who are trying to deliver more attractive results.” The CEO job at Breckenridge put Jordan firmly in the gatekeeper role of satisfying the needs of retail agents while also ensuring that the company was doing a good job for its carrier partners.
ability to foster an atmosphere of collaboration between its various business units. “It’s been very gratifying to see the fruits of that effort, in terms of cross-marketing products and services, building new relationships, recruiting, and all kinds of investments that we’ve been able to make,” he says. Over the past year, Breckenridge’s employee retention numbers have gone up, demonstrating that its employees feel valued and want to stay with the company to build their careers. Jordan says he’s particularly excited about this achievement because he’s “a firm believer that all the technology in the world doesn’t replace the human interactions that a wholesale broker brings to the retail
“We have to compete based on expertise and relationships, and I couldn’t be more pleased with how our folks have responded to a rapidly changing marketplace” Taking the wheel Once Jordan was in the driver’s seat at Breckenridge, things really got interesting. Between a hardening market and the global pandemic, there have been more than enough changes over the past two years to keep him busy, but Breckenridge’s teams have shown their true strength during this turbulent time. “We’re a mid-size firm, so we have to compete based on expertise and relationships,” Jordan says, “and I couldn’t be more pleased with how our folks have responded to a rapidly changing marketplace.” Since 2019, Breckenridge has added experts to its team around the country, which has helped its three practice areas (comprising several different businesses) enter new product lines and classes of business. The group has also invested in technology initiatives to help make its business more efficient and its people more successful. However, Jordan says the most exciting development has been Breckenridge’s
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agent communities that they serve and the carrier partners that are so integral to delivering those solutions.” As Jordan looks out onto the future of the marketplace, he sees more challenges – but also more opportunities for Breckenridge to set itself apart from competitors and keep delivering critical solutions to retail agents and their insureds. “The challenge for every intermediary – and we’re no exception – is to make sure that we are knowledgeable about what’s happening and that we are educating our customers so that they understand that the game is different today … and then help them work with business owners in their communities to get the appropriate coverages placed,” he says. “Our longstanding relationships in the marketplace enable us to negotiate on an equitable basis with carriers, so our responsibility is to strike the appropriate balance and do the best possible job for all the parties in the transaction.”
BRECKENRIDGE GROUP BY THE NUMBERS
2009 Year Breckenridge Group was formed
6 Specialized brands, including insurance, under the Breckenridge umbrella
16 Number of offices in the US
350+ Number of associates
$275+ million Estimated premium volume
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email iba@keymedia.com
The rise of telehealth Alicia Marsiglia explains why the changing healthcare environment demands protection from an invisible threat: cyber liability THE CORONAVIRUS pandemic has encouraged many changes in the healthcare sector, far beyond management of the disease itself. The emergence of telehealth as an attractive, practical option in a socially distanced world could permanently alter the way we provide and receive medical services. But like many medical innovations, telehealth also opens up a lucrative opportunity for cybercriminals. Telehealth uses technology to digitally connect patients with their care providers, who can deliver advice, diagnoses and even some forms of treatment virtually. Practitioners can use these applications to create digitized notes, helping them meet standards for the upkeep of electronic health records. Telehealth has also spurred the development of ‘virtual rooming assistants’, which can admit patients into digital exam rooms and note medical histories, improving the efficiency of providers. As businesses take advantage of the benefits of telehealth, they may be unaware that they also face an increased risk of cyber liability. The digital transfer of information between patient and provider, followed by the online storage of healthcare data, can be a tempting draw for cybercriminals. Theft of healthcare records is arguably the most lucrative form of cybercrime; a healthcare data record can be valued at up to $250 on the illegal market. By comparison, a payment card is valued at just $5.40, according to Trustwave. This highly personal information can be harvested and sold to forgers, human traffickers or those looking to exploit it for a
ransom. According to the US National Library of Medicine, 41.2 million healthcare records were exposed, stolen or illegally disclosed in 2019 alone. There are a few crucial ways that healthcare providers can combat this threat. Businesses should check their networks for vulnerabilities and ensure that any home devices, in particular, are up to date with
with professional and general liability policies. Packaging cyber coverage with other types of insurance minimizes the chance that a claim falls uncovered into the cracks between carriers. When comparing cyber coverage, healthcare providers and their brokers should keep in mind that endorsements and add-on coverages, while more cost-effective, are not typically designed to provide the full breadth of cyber protection. Look for an insurer that has expertise in both cyber and healthcare liability, and when discussing coverage, ensure that the services and operations planned over the policy period are clearly communicated to obtain suitable protection. As a result of COVID-19, carriers are looking to limit their exposure to similar large-scale events, so it’s also important to review communicable disease exclusions to determine the types of claims and loss amounts a policy covers. The pandemic has revealed our capability to adapt, evolve and triumph under immense pressure, and the healthcare industry is a
“The digital transfer of information between patient and provider, followed by the online storage of healthcare data, can be a tempting draw for cybercriminals” the latest firewalls. Any device that is using Windows 7 should be prioritized for an update, as the discontinued operating system is no longer offering security updates and is at greater risk of viruses and malware. In addition, one of the most effective tools to prevent cyber incidents is cybersecurity education. The rise in COVID-19-related phishing emails offering in-demand items, including N95 masks and ventilators, could be stymied by training employees on what to look for to avoid an attack. Mitigating the damage if a cyberattack occurs is also imperative. Cyber insurance coverage can include emergency response tools and training resources to reduce the impact of a breach on a provider’s bottom line, and it can be conveniently packaged
perfect example. Even when some businesses return to brick-and-mortar locations, virtual services will continue to be a source of revenue for healthcare providers and will remain a convenient choice for patients. The pervasiveness of telehealth will depend on the willingness of health insurers to reimburse for visits over a virtual platform, the extension of temporary directives under state and federal regulation, and, ultimately, on providers’ commitment to protecting themselves and their patients by minimizing cyber risks. Alicia Marsiglia is vice president and allied healthcare product head for Hiscox USA and a Hiscox partner. She has 14 years of professional liability experience, primarily in healthcare lines product management.
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SPECIAL REPORT
TOP
2021
IBA celebrates 128 standout producers who rose above the challenges of 2020 to ascend to the top tier of the US insurance industry
CONTENTS
PAGE
Feature article .............................................. 20 Methodology ................................................ 20 Top Producers 2021 .................................... 24 Profiles .......................................................... 26
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SPECIAL REPORT
TOP PRODUCERS
TOP PRODUCERS: Reaching new heights EVERY CLOUD has a silver lining, and the cloud of 2020 is no exception. Thanks to COVID-19, hurricanes, wildfires and civil unrest, the net income of US insurers dropped roughly 25% year-over-year during the first nine months of 2020, according to the Insurance Information Institute (III). Yet despite the overall bearishness of the market, insurers delivered an estimated $14 billion in premium relief to auto insurance clients, donated nearly $300 million to charities and largely retained the industry’s 2.8 million-strong US workforce – all with only modest increases in premiums, according to III CEO Sean Kevelighan. Kevelighan told attendees at the virtual 2021 Catastrophe Risk Management Confer-
WHERE DO THE 2021 TOP PRODUCERS WRITE BUSINESS? Regional
National
Multinational
ence in March that “2020 proved how this industry can lead through disruption. We can adapt. We can innovate. We can keep our promises and pay claims – even during a global pandemic.” In an additional silver lining, many individual producers have done quite well for themselves over the past year. IBA’s seventh annual Top Producers list features 128 producers from around the country, all of whom reached the $1 million threshold in commission revenue in 2020. Of these, 15 producers crossed the $4 million mark, and one even cracked $11 million. While most of this year’s Top Producers are veterans with more than 11 years of experience, the group also contains a solid showing by individuals new to the industry. From entertainment industry entrepreneurs to transportation experts and real estate gurus, these 128 men and women represent some of the best and brightest talent the US insurance industry has to offer.
The importance of expertise
45%
44%
20
11%
One of this year’s highest-grossing producers is Robby McGehee, president of Smith McGehee Insurance Solutions in Clayton, Missouri, who entered the industry after a stint as a race-car driver. “I graduated college in 1997 and continued my dream to race cars professionally,” he says. “I was blessed to be able to say I got to live my childhood dream when, after years of preparation at the lower levels, I had an opportunity to drive in the 1999 Indianapolis 500, where I finished fifth, received the Rookie of the Year Award and was propelled into a
METHODOLOGY Now in its seventh year, Insurance Business America’s Top Producers list highlights the best-performing insurance professionals from around the country. Starting in January, IBA invited producers to nominate themselves for the 2021 list. To qualify as a Top Producer, producers must have achieved at least $1 million in commission revenue in 2020, with at least 50% commercial P&C business and demonstrated year-over-year growth from 2019. Each nominated producer was required to provide specific details about his or her business to be eligible.
547 Average number of active clients among the 2021 Top Producers
1,042 Average number of policies written by the Top Producers
$2.3 million Average commission revenue of this year’s Top Producers
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five-year career of earning my living driving 200-plus every weekend.” Throughout his racing career, McGehee also worked in IT at his father’s insurance
company, which was sold in 2004, the same year he got out of racing. McGehee stayed on and, in 2011, opened Smith McGehee Insurance Solutions, where he specializes
“We had our best year under COVID. There was a three-month period where new development paused, and we paused with it. But when it turned back on, so did we” Robby McGehee, Smith McGehee Insurance Solutions
in construction liability. “We had our best year under COVID,” he says. “There was a three-month period where new development paused, and we paused with it. But when it turned back on, so did we, and it came back good.” McGehee attributes his competitive advantage to three principles he learned from his father: honesty and integrity, business knowledge, and a willingness to serve. “Buying the client a beer at the ballpark is fun, and I do it, but it’s not in the top 10 reasons of why we work together,” he says. Rather, one of the key reasons McGehee has been able to maintain a loyal client base is that he not only provides cost-effective
Saving the Chemical Industry Money on their Insurance Premiums Consumer Specialties Insurance, RRG (CSI) is the chemical industry’s leading and most reliable source of liability insurance coverage. CSI also is the exclusive partner of the Household & Commercial Products Association (HCPA), the premier trade association representing the broad interests of companies engaged in the manufacturing, formulation, and distribution of specialty chemical products. PRoGRam HIGHlIGHtS Ø Commercial General Liability & Umbrella (including Products Coverage); Ø Limits Available up to 5,000,000; Ø Minimum Premiums Starting at $3,500 (NEW!); Ø Limited Pollution Coverage up to $1,000,000 available;
Ø $250,000 of Product Withdrawal Expense Coverage; Ø Hired and Non-Owned Auto Liability; Ø 10% Premium Credit Upon Completion of “Product Care” Stewardship; Ø 12% Commission to Retail Broker on All New Business.
Our recently expanded BRoaDENING ENDoRSEmENt includes blanket waivers of subrogation, blanket additional insureds, product withdrawal expense, and many other exclusive offerings. *NEW loWER mINImUm PREmIUm oF $3,500 aVaIlaBlE FoR mEmBERS WItH aNNUal REVENUES oF $500,000 oR lESS View our website (www.csiplus.com) for our PRoGRam aPPlICatIoN, FaQ PaGE, PRoGRam BENEFItS aND E-BRoCHURE. CSI is the chemical industry’s leading risk retention group, providing chemical manufacturers and distributors with a financially stable source of liability insurance for over 25 years. We are the exclusive partner of The Household & Commercial Products Association (HCPA - www.thehcpa.org), the industry’s leader for education and legislative advocacy. With membership in the HCPA your clients can participate in HCPA’s Product Care stewardship and best practices program. CSI Policyholders that participate can be eligible to receive additional premium discounts. CSI is endorsed by HCPA and administered by Ames & Gough.
Contact Ames & Gough at 703-827-2277 or email us at csiplus@amesgough.com for more information. 8300 Greensboro Drive l Suite 980 l McLean, VA 22102 l www.amesgough.com
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SPECIAL REPORT
TOP PRODUCERS
HOW LONG HAVE THE 2021 TOP PRODUCERS BEEN IN THE INDUSTRY?
1%
Fewer than 5 years
Six to 10 years
23%
10%
11 to 20 years
21 to 30 years
44% 23%
30+ years
“We believe in analyzing a client’s total cost of risk, not just selling insurance. The more complex an account, the more we are able to excel by structuring unique solutions for our clients” Annie Fleming, Beecher Carlson insurance coverage, but also spends a good chunk of his time talking with general counsels and attorneys about all types of claims. “It’s certainly not exciting,” he says, “but that’s when it matters, and the clients know this.” Going forward, McGehee says he’s focused on growing his business and in-house talent. The only things that can keep him from producing more, he says, are limited capacity and having less energy as he gets older. His advice to those producers just getting into the industry? “Learn the business,” he says. “Be the best at the product you’re selling. If I go into a room to talk about insurance, if I’m not the smartest guy, we’ve
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got a problem! There are very successful producers who depend on supporting expertise. I would say to gain the expertise yourself. Just my way of doing it – no way is wrong if the business comes in.”
Building relationships Another of this year’s highest-grossing producers, Annie Fleming, studied risk management and insurance at the University of Georgia before embarking on a 17-yearplus career specializing in insurance for the real estate, construction, hospitality and retail industries. She’s currently the managing director of the hospitality and real estate unit at Beecher Carlson.
Fleming says the pandemic has propelled her to discover new and creative solutions to optimize connections with clients and markets. But while the technology is great, she says, nothing will ever completely replace in-person interaction with clients, underwriters and industry partners, which she feels is the best way to solidify the trust that’s essential to relationships in this industry. “I am passionate about partnering with clients to help them solve complex problems,” Fleming says. “I work to involve my clients in the development and implementation of strategies, negotiations, and overall process, enabling us to fully understand each organization’s goals and objectives and help to achieve them. I believe in white-glove customer service as well. While the renewal process is extremely important, so is the dayto-day customer service of an account. I take this very seriously and personally.” In the current market, she says, certain risks have become increasingly challenging, but Beecher Carlson has designed and implemented solutions and structures that are popular with clients. “We believe in analyzing a client’s total cost of risk, not just selling insurance,” Fleming says. “The more complex an account, the more we are able to excel by structuring unique solutions for our clients.” Looking ahead to the remainder of 2021 and 2022, Fleming plans to further expand her book of business with best-in-class insurance and risk management programs and by offering superior customer service. And she can’t wait to travel again and meet face-toface with clients and business partners. For young producers just starting out in the industry, Fleming advises them to “focus on your clients and align with a mentor. Focusing on your clients keeps you working toward your and your clients’ shared goals and objectives and helps you to deliver the best insurance programs and solutions possible. Aligning with a mentor can help you to establish a direction for yourself and to develop your career.”
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the insurance business. We’re in the business of developing strong, lasting relationships. Relationships built on trust that we earn day in and day out by working as partners – to achieve common goals.
Power through Partnership assuredpartners.com
Congratulations to our Top 100 Winners
At AssuredPartners, we’re not just in
Jack A. Carra John Costello Maureen Gallagher Trevor Gilstrap Frankie Harris, III Ryan Hurley Joshua Jabour Richard Lonneman Phillip Masi Paul Praxmarer Stephen A. Stefanski Jr. John Henry Ward Eric Weiser Wayne Willis wwww.ibamag.com
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SPECIAL REPORT
TOP PRODUCERS TOP
Producers 2021
Brian A. Payne President Field Insurance Agency of Surfside
Ben D. Smith Managing director Higginbotham
Christopher F. Trapani Executive vice president Eagan Insurance Agency
Phone: 855-238-2411 Email: bpayne@fieldinsuranceagency.com Website: fieldinsuranceagency.com
Bob Bamberger Executive vice president Marsh & McLennan Agency
Clinton Anderson President, national specialty practice HUB International
David W. Clausen CEO Coastal Insurance Solutions
Bob Hendren Managing director – business insurance Higginbotham
Curtis Page Managing director, healthcare practice leader Higginbotham
Phone: 631-782-3175 Email: dclausen@coastalinsurancesolution.com Website: coastalinsurancesolution.com
Bolling (Trey) Starke III President Starke Agency
Dan Overmyer Partner Overmyer Hall Associates
Kendall McEachern Chairman Acentria Insurance
Bradley Meinhardt Area executive vice president; managing director, aerospace Gallagher
Dan Peck Vice president – construction practice James G. Parker Insurance Associates
Blake McEachern Vice president Acentria Insurance
Brett Nilsson Senior vice president, producer The Buckner Company
Phone: 850-269-6703 Email: blake.mceachern@acentria.com Website: acentria.com
Brian Gilberg Vice president Odell Studner
Kevin Mason CEO Acentria Insurance
Brian Hall Partner Overmyer Hall Associates
Phone: 850-269-6710 Email: kevin.mason@acentria.com Website: acentria.com
Brian King Partner AHT Insurance, a Baldwin Risk Partner
Eric Beck Senior vice president, national nonprofit practice leader Marsh & McLennan Agency
Shawn Budney Vice president Acentria Insurance
Brian Krimpelbein Principal/relationship manager HNI Risk Services
Eric Leedom Area vice president Gallagher
Phone: 850-424-2705 Email: shawn.budney@acentria.com Website: acentria.com
Brian Schneider Managing director Higginbotham
Eric Weiser Agency president AssuredPartners
Vik Patel Vice president Acentria Insurance
Brigitte M. Egbert Executive vice president Monarch Insurance Services, an Acrisure Agency Partner
Frank Barbella Founder and CEO SOLV Risk Solutions
Phone: 407-805-9722 Email: vik.patel@acentria.com Website: acentria.com Adam Sammons Vice president Marsh & McLennan Agency
Bruce Ball CEO Britton Gallagher
David McKinnon Senior vice president Fisher Brown Bottrell Insurance Davor Mimica President and CEO InSource Edward M. Smith Executive vice president Marsh & McLennan Agency
Frank J. McMackin IV Area senior vice president Gallagher
Bryan Moore President, risk advisor IBTX
Frankie Harris III Executive vice president of sales AssuredPartners
Adam Sopenski Risk advisor RRL Insurance Agency
Carlos A. Chinchilla Senior executive vice president Frank H. Furman, an Acrisure Agency Partner
Gary Wells Managing partner The Liberty Company Insurance Brokers
Alexander H. Carothers III Commercial P&C risk advisor Harmon Dennis Bradshaw
Charles Fontenelle President/producer Fontenelle & Goodreau Insurance
Greg Myers Executive managing director Beecher Carlson
Alka Manaktala Vice president IOA Insurance
Charles Humphrey Commercial P&C risk advisor Harmon Dennis Bradshaw
Gregory W. Havemeier Senior vice president Gulfshore Insurance, an Acrisure Agency Partner
Allen Chapman Executive vice president HUB International
Charles Reynolds Senior vice president HUB International
Jack A. Carra Senior vice president of sales AssuredPartners
Annie Fleming Managing director Beecher Carlson
Chase Carlisle Vice president Carlisle Insurance, an Acrisure Agency Partner
Jacob Barzivand Producer Paramount Exclusive Insurance
Anthony Miller CEO GS Insurance Solutions
Chip Hoover Executive vice president Marsh & McLennan Agency – Southeast
James Oh Executive vice president Marsh & McLennan Agency – Southeast
Bart McGowan Executive vice president Marsh & McLennan Agency
Chris Leming Senior vice president TROXELL
James W. Untiedt President PentaRisk Insurance
Béat Koszinowski Producer The Buckner Company
Christopher Hopper CEO Crosby Insurance
Jason Young Senior vice president Fisher Brown Bottrell
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TOP
2021
JD Powers President POWERS Insurance & Risk Management
Maureen Gallagher Agency president AssuredPartners
Russ Wardlaw President and partner Insuramax
Jeff McIntosh Agent Energy Insurance Agency
Michael Abacherli Account executive HD Segur, an Acrisure Agency Partner
Ryan Hurley Producer – sales AssuredPartners
Jerrime Kitsos Senior vice president HUB International
Michael Dix Producer Smith Manus, an Acrisure Agency Partner
Ryan Moss Managing partner Higginbotham
Jimbo Floyd President Turner Wood & Smith
Michael Kellam COO Ware Insurance
Ryan Schmidt Client advisor/partner Gulfshore Insurance, an Acrisure Agency Partner
Joe Thompson Partner/client advisor Gulfshore Insurance, an Acrisure Agency Partner
Michael Pollack Executive vice president The Flanders Group, an Acrisure Agency Partner
Ryan Spalding CEO Worthy Insurance Group
Joel Hirschfeld President Hirschfeld & Associates Corp.
Michael Shea Executive vice president LassiterWare Insurance, an Acrisure Agency Partner
Ryan Von Haden Partner/vice president, business insurance specialist TRICOR Insurance
John Costello Executive vice president, sales AssuredPartners John Daughton President Vanner Insurance Agency John Gaynier Executive vice president Rogers Gray John J. Sirabella Jr. Account executive CLG Insurance, an Acrisure Agency Partner John Henry Ward Vice president, sales executive AssuredPartners Jonathan Axel Managing partner The Liberty Company Insurance Brokers Joseph DeLucchi President CAL Insurance & Associates Joshua Jabour Sales executive AssuredPartners Aerospace Karin Venegas Managing director – business insurance Higginbotham Karl Henley Executive vice president, partner SeibertKeck Insurance Partners Kyle A. Kozel Senior risk consultant Lakenan Insurance Larry Hansard Area director – healthcare practice Gallagher Leslie McLerran Vice president, producer Falcon Insurance Agency of Houston
Michael Sullivan Vice president, growth practice lead Embroker Michael Tomasulo Managing partner AHT Insurance, a Baldwin Risk Partner Michael Trammell Senior vice president Ironwood, a Marsh & McLennan Agency Company Mike Todorovich President Lockton Companies Nathan Durham Executive vice president Marsh & McLennan Agency Neal Papevies Senior vice president Beecher Carlson Paul Praxmarer Agency president, producer AssuredPartners Phillip Lane Vice president Insurance Office of America Phillip Masi Agency president AssuredPartners Ray Deaton Executive vice president and COO Commercial Insurance Solutions, an Acrisure Agency Partner Richard Lonneman Executive vice president, sales AssuredPartners Richard Terlecki Area senior vice president Gallagher
Sam Sackler Senior vice president Fisher Brown Bottrell Sarah Wheeler-Monyette Senior vice president Marsh & McLennan Agency – Southeast Shawn P. McBride President Acrisure Affiliated Insurance Agencies Stephen A. Stefanski Jr. Executive vice president, sales AssuredPartners Steven Fisk Principal Marsh & McLennan Agency Tim Powers Broker Missouri General Insurance Agency Tim Spear Client advisor/partner Gulfshore Insurance, an Acrisure Agency Partner Timothy Cline CEO Cline Agency Insurance Brokers Todd Jackson Senior vice president Bolton & Company Tom Quintero Vice president of risk management solutions IBTX Tressa Bishop Vice president, community associations practice USI Insurance Services Trevor Gilstrap Senior vice president and energy practice leader AssuredPartners Trey Wood Executive vice president Turner, Wood & Smith Insurance
Marcus Eagan Vice president Eagan Insurance
Robby McGehee President Smith McGehee Insurance Solutions, an Acrisure Agency Partner
Mark Doscher Principal Marsh & McLennan Agency
Robert Baldacci Account executive National Housing Insurance Group
Will Denbo Managing partner Commercial Insurance Associates
Mark Harrington Account executive Taggart Insurance
Robert Culpepper Senior executive vice president Marsh & McLennan Agency
Will Giambalvo Area senior vice president Gallagher
Matthew Harrell Managing director Franklin Street
Roberto C. Menendez Commercial risk advisor Frank H. Furman, an Acrisure Agency Partner
Zachary Fanberg Vice president Eagan Insurance
Wayne Willis Executive vice president, employee benefits AssuredPartners
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SPECIAL REPORT
TOP PRODUCERS
BRIAN PAYNE President and CEO, FIELD INSURANCE AGENCY OF SURFSIDE
B
rian Payne has turbo-charged the Field Insurance Agency of Surfside and taken it into the 21st century. When he started at the company as an intern in 2003, Payne understood the technology changes the industry was seeing and knew they would become common practice sooner rather than later. “I was young and familiar with using computers every day,” he says. “I wasn’t any type of genius by any means on the computer, but all of these companies were starting to move more and more toward the digital-type platforms that we know of today. It’s kind of crazy, because in 2003, the insurance industry certainly wasn’t like it is now. I wanted to embrace this change and be ready for it.” In the early 2000s, Payne went from an intern to purchasing the company. Shortly thereafter, things “snowballed,” and he focused on hiring the right people with the
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right amount of drive and making adjustments to manage growing pains. Today, nearly 20 years later, Payne has more than 40 members on his team, who meet the needs of more than 25,000 clients and help protect billions of dollars in insured value. With five offices across coastal South Carolina, the company specializes in catastrophe-exposed property – both personal and commercial – and is a top retail writer of flood insurance coverage. “The property business, catastrophic property and flood, is the name of the game,” Payne says. “It’s our bread and butter, and we know the marketplace.” Payne attributes his success to excellent service, delivered quickly. Unlike in the old days, he says, it’s imperative in today’s market to be digitally savvy, available 24/7 and capable of turning around requests quickly. “The old-school ‘get a quote and get it
back to you in four or five days or a week or so later, as you get around to it,’ it’s not the route to go anymore,” he says. “You’ve got to be able to put a number on something quickly and get it turned around to the consumer very fast in order to be able to close at a high ratio. We work alongside some absolutely awesome carriers, brokers and underwriters and have many great relationships with them.” And close at a high ratio he has – Payne landed in the top 10 among IBA’s 2021 Top Producers. It’s an accomplishment he shares with his colleagues. “I am honored to take credit for awards of this magnitude, and for that I am so grateful,” he says. “But I truly can’t thank my team enough – they are dedicated and proven professionals. We wouldn’t be where we are today without their focus and commitment to each other and to those we serve. For that, I am most appreciative.”
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Blake McEachern, left, with his father, Acentria chairman Kendall McEachern
BLAKE MCEACHERN Vice President, ACENTRIA INSURANCE
A
s the son of an insurance visionary, Blake McEachern knew at an early age that he was destined for a career in the insurance industry. Blake’s father, Kendall McEachern, began his career in insurance as a risk manager for multifamily properties. In April 2010, Kendall co-founded and launched Acentria Insurance, headquartered in Destin, Florida, with just 25 team members and $5 million in revenue. His leadership and guidance were responsible for Acentria Insurance being named as an Employer of Choice, Top Insurance Workplace and Best Agency to Work For. A Foundation Risk Partners Company, Acentria has become a premier agency within the Southeastern US with more than 700 team members, 50 locations and over $90 million in revenue. While attending the University of Central
Florida, Blake decided to intern at an insurance agency in Lakeland, Florida. One would think that growing a book of business would come easily to Blake, with his father lending a helping hand along the way. However, Kendall wanted to ensure that Blake was set up for future success by insisting he grow his book organically so he would have the knowledge, expertise and gain respect both within the industry and with his clients. Blake joined the Acentria family in 2011. Starting out as a generalist, he quickly found his niche in the commercial real estate arena, specializing in multifamily. He has since grown his book from zero to more than $1 million and boasts a client retention rate of over 97%. “The best industry advice my father gave to me was to always do right by your clients,” Blake says. “It will always come back around.”
Blake is a two-time IBA Young Gun. While his father has been recognized twice as Agent of the Year and five times as an IBA Top Producer, this is the first year Blake is being recognized as a Top Producer and the last year his father will have the privilege in sharing those same honors with him. Kendall passed away in January 2021, but not before bestowing a lifetime of knowledge, wisdom and work ethic on his beloved son, Blake. Kendall leaves a lasting legacy on Acentria’s culture, success, industry-wide reputation – and on all of those fortunate to have worked alongside him. Congratulations to both Blake and Kendall for the prestigious honors of being named Top Producers. They share in these honors with Acentria’s other co-founder and CEO, Kevin Mason, and vice presidents Shawn Budney and Vik Patel.
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SPECIAL REPORT
TOP PRODUCERS
T
DAVID W. CLAUSEN
CEO, COASTAL INSURANCE SOLUTIONS
his year marks the 20th anniversary of CEO David Clausen founding Coastal Insurance Solutions on Long Island, New York. “We were a small-town agency servicing the standard home and auto back then,” Clausen says. “We began to narrow our focus and sharpen our skills toward properties located on the water. Inherent in that are homes of higher value.” Fast-forward to 2021, and Coastal Insurance Solutions has expanded to 20 states across America and is servicing an exclusive clientele. “We’re a leader in high-net-worth insurance,” Clausen says, adding that Coastal Insurance Solutions has unique access to all the high-net-worth carriers that are writing in the US. “If your net worth is over $5 million and you own a home that would cost more than $1 million to rebuild, you have multiple cars – that’s where we specialize,” he says. “It’s a niche segment of the personal lines insurance sector, which is high-value home insurance and high-networth insurance focused on protecting our clients’ lifestyle.” Using technology to build relationships with clients has been critical to Coastal Insurance Solutions’ meteoric rise, says Clausen, who has consistently been named to IBA’s Top Producers list. “Focusing on the customer has remained at the core of what we do.”
We are the premier insurer for luxury condos, co-ops, rentals, class “A” office buildings & upscale restaurants. Berkley Luxury Group’s mission is to provide underwriting and claims expertise to two very specialized luxury markets. Our name clearly identifies what we offer; tailored, all-inclusive insurance solutions for luxury condo, co-op, rental properties, class “A” office buildings and fine dining restaurants.
Contact us for coverage options
301 Route 17 N, Suite 900 Rutherford, NJ 07070 (800) 504-7012
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21/12/2018 4:49:29 AM
09/04/2021 4:27:42 am
SPECIAL REPORT
2021
CANNABIS INSURANCE Brokers name the insurers that are providing the best policies and service in a rapidly growing segment of the market
CONTENTS
PAGE
Feature article .............................................. 30 Methodology ................................................ 31 5-Star Cannabis Insurers 2021 .................. 33 Award winners by category ........................ 34
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SPECIAL REPORT BUSINESS STRATEGY
5-STAR CANNABIS INSURERS
5-STAR CANNABIS INSURERS:
High-grade providers EXPECTATIONS ARE running high in the US cannabis market. Despite the COVID-19 pandemic’s deleterious effect on many sectors of the economy, the legal cannabis industry boomed in 2020. It’s currently valued at $15 billion and is anticipated to grow to up to $37 billion by 2024, according
to Marijuana Business Daily. And all that new business will need insurance coverage. “We are quite bullish on the growth in this particular sector,” says John Donahue, president of M.J. Hall & Company, a surplus lines brokerage based in California. “This is the first emerging market to hit the insur-
WHAT’S MOST IMPORTANT TO BROKERS WHEN CHOOSING A CANNABIS INSURANCE POLICY?
Very important
Important
Neutral
Unimportant
Very unimportant
Policy coverage
Service to the broker
John Donahue, M.J. Hall & Company
Underwriting expertise
Ability to create bespoke policies
Claims payment/processing
Policy pricing
Access to risk mitigation partners
Online platform
0%
30
20%
“We are quite bullish on the growth in this particular sector. This is the first emerging market to hit the insurance space in a considerable amount of time”
40%
60%
80%
100%
ance space in a considerable amount of time. Many are and have been on the sidelines.” Of those insurers still hesitant to jump into the sector, many are concerned with legal complications and exposures due to differences in state and federal laws. But things are changing. Congress recently reintroduced the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, a bill to federally decriminalize cannabis, which was passed by the House late last year but failed in the Senate. And in March, a bipartisan group of senators introduced the Clarifying Law Around Insurance of Mari-
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juana (CLAIM) Act, which would “create a safe harbor for insurers engaging in the business of insurance in connection with a cannabis-related legitimate business and for other purposes.” Clearly, progress on these fronts is needed to bolster the sector. “On the federal level, the government has not clarified the contradiction between state and federal law enough,” Donahue says. That’s limiting capacity in the cannabis space, says Crileen Kixmoeller, vice president of underwriting at James River Insurance, one of IBA’s 5-Star Cannabis Insurers. “I don’t see the standard markets writing this business as admitted business on a national scale until there is legalization at the federal level,” she says.
Challenges and opportunities With the legal aspects of this space still in flux, what distinguishes a leading provider of cannabis insurance in today’s market? Kixmoeller cites James River Insurance’s ability to tailor coverage to each client’s unique needs. “We ask a lot of questions, not because we want to pester our clients, but because we want to do the best possible job for them,” she says, adding that “as an insurer, I think the most important thing we have to offer is our service. Timely response to requests for quotes, quick turnaround on policy issuance, being kind to one another when transacting business [are all important] – we’re all under stress in this current world.” Donahue likewise emphasizes the importance of customer service and also highlights the need to understand all elements of the business – from cultivation to processing – as a key indicator of competence. “When an organization has this degree of depth in the industry, it can place more difficult-to-write risks and develop larger limits to address the needs of a wider breadth of insureds,” he says. Providing excellent service also means being in tune with your clients’ key chal-
lenges. In the cannabis space, that includes compressed capacity for property and excess liability, Kixmoeller says, as well as a possible tightening of regulations on quality control and testing. In addition, she says, “many segments of the insurance industry are experiencing an ongoing hard market. It’s very possible that it could bleed over into cannabis.” Donahue, on the other hand, sees limited risks and lots of opportunities. COVID-19 ended up being a boon for the cannabis space, as state after state designated cannabis dispensaries essential operations. And looking ahead to 2022, he sees existing legal challenges likely giving way to greater opportunities, as legalization efforts are expected to succeed. When it comes to the biggest issues clients have in this space, Donahue says retail producers are concerned with redefining bodily injury. He’s also seen a tightening of protective safeguard endorsements to deal with theft losses from last summer. “Cannabis is an expensive commodity that can generate large losses with a relatively small amount of product,” he says. Kixmoeller urges brokers and clients in the space to perform due diligence. “Make sure you’ve read the quotes first and that they are complete and contain the information that was presented and best represents the business,” she says. “It’s much easier to make changes at that stage than to try to undo errors or incorrect information on a policy.” And what about pricing for cannabis insurance? “We do see some increases in the property portion of the premium, which could be a result of the overall market, as well as the first-party losses that have plagued the industry over the last year,” Donahue says. Kixmoeller notes that “pricing thus far for cannabis on the liability side has been trending down, but as I said earlier, this could change. Other lines of coverage are seeing significant rate increases due to under-reserving, social inflation in jury
METHODOLOGY ‘Market-leading’ is a phrase many insurance companies like to use when describing their products. Now 10 companies can claim that title on the back of hard market research from the people who matter most: insurance brokers. To select the best cannabis insurers for 2021, IBA surveyed hundreds of brokers to gain a keen understanding of what insurance professionals think of current market offerings. Brokers were first quizzed on what features they thought were most important in a cannabis insurance policy and then asked how the insurers they dealt with rated on those attributes. Insurers were measured on the strength of their relationships with brokers, ability to handle claims, underwriting expertise and, most importantly, the strength of the individual products they provide.
89% of brokers said policy coverage is important when choosing a cannabis insurer
81% of brokers said a cannabis insurer’s overall service to brokers is important
67% of brokers said underwriting expertise is an important quality in a cannabis insurer
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SPECIAL REPORT BUSINESS STRATEGY
5-STAR CANNABIS INSURERS
NUMBER OF WINNERS BY CATEGORY General liability 8 Property liability 9 Professional liability 2 Package liability 5 Product liability 3 Workers’ compensation 3 MGAs 3
“Many segments of the insurance industry are experiencing an ongoing hard market. It’s very possible that it could bleed over into cannabis” Crileen Kixmoeller, James River Insurance awards and claims payments, and depressed pricing for so many years.” While insurers that do participate in the cannabis space “are quite good at assessing the risk,” Donahue says, he notes that capacity is limited. “We are seeing some serious capital moving into this space. Facilities are becoming larger and larger. It is not uncommon to see a statement of values well in excess of $100 million. Since reinsurers seem somewhat reluctant to enter the space, capacity is constrained.”
32
What brokers want Of the hundreds of brokers IBA surveyed about their cannabis insurance providers, an overwhelming majority (89%) said policy coverage is of the utmost importance when selecting an insurer in this space. A couple of brokers noted that while pricing is also important, having enough coverage is critical for cannabis businesses. “In this field, it is better to be overinsured,” one broker said, while another said “the most important thing is that carriers have a comprehensive
policy that provides the most coverage and the most coverage benefits for the client.” Nearly as many brokers (81%) said service is critical when choosing a cannabis insurer. One noted that service includes both underwriting and claims handling and lamented the state of the latter in the cannabis space. “As the industry matures and we learn more about the risk of cannabis businesses, claims handling will decide who is good and who is bad,” the broker said. Another pointed out that speedy service is paramount: “[Brokers don’t want] to wait on turnaround of a submission. If they have good customer service, they will have a good turnaround time.” Also key to brokers is underwriting expertise – 67% rated it as an important factor when choosing a cannabis insurer. For one broker, finding an underwriter who is easy to work with is crucial, while another said they only work with underwriters who have a proven track record. A third emphasized sector knowledge: “In cannabis, there are a lot of changing legal aspects – policies and forms aren’t always in line with legalization, so we need to work with underwriters who really know what they are doing and what is going on in the industry.” The ability to customize policies was also an important factor for well over half of brokers (60%). As one broker put it, “Customization is important because there are many restrictions on cannabis companies.” Another noted that the “best carriers can tailor the coverage policy to clients’ specific needs.” Meanwhile, 56% of brokers said claims payment/processing speed was key. One pointed out that most companies outsource their claims, but said the best insurers in this space are the ones with internal claims handling teams. Another noted that claims handling and management are especially critical in workers’ compensation insurance. Relatively unimportant to brokers when choosing a cannabis policy were pricing (deemed important by only 37% of brokers), access to risk mitigation partners (26%) and an insurer’s online platform (22%).
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2021
CANNABIS INSURANCE GENERAL LIABILITY Cannasure Insurance Services CannGen
PACKAGE LIABILITY Cannasure Insurance Services CannGen
Canopius Insurance Golden Bear Insurance James River Insurance Company Kinsale
Quadscore Veracity Insurance Worldwide Facilities
Veracity Insurance Worldwide Facilities
PROPERTY LIABILITY Admiral Insurance CannGen
PRODUCT LIABILITY Cannasure Insurance Services Golden Bear Insurance Kinsale
Canopius Insurance Golden Bear Insurance James River Insurance Company
WORKERS’ COMPENSATION Admiral Insurance
Kinsale
CannGen
Quadscore
Canopius Insurance
Veracity Insurance Worldwide Facilities
PROFESSIONAL LIABILITY Admiral James River Insurance Company
MGAs CannGen Veracity Insurance Worldwide Facilities
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SPECIAL REPORT BUSINESS STRATEGY
5-STAR CANNABIS INSURERS
SUMMARY: 5-STAR CANNABIS INSURERS BY CATEGORY Insurer/MGA
General liability
Property liability
Professional liability
Package liability
Product liability
Workers’ compensation
MGAs
Admiral Insurance
Cannasure Insurance Services
CannGen
Canopius Insurance
Golden Bear Insurance
James River Insurance Company
Kinsale
Quadscore
Veracity Insurance
Worldwide Facilities
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FEATURES
SECTOR FOCUS: COMMERCIAL PROPERTY
Shelter from the storms IBA checked in with property insurance experts to find out how extreme weather events are impacting the commercial property sector AS THE saying goes, when it rains, it pours. And last year it poured. Just as Americans were learning to deal with the COVID-19 pandemic and trying to process the worldwide uprisings for racial justice, Mother Nature hit the country with a season of wild weather. Not only were there record numbers hurricanes in the North Atlantic and raging fires in the West, but there were also considerable hail and thunderstorm problems in the central US, as well as recent cold-snap events this winter in the South. These incidents continue to affect the commercial property insurance market. “Following 2020’s very active hurricane season, we’ve all seen a pretty drastic shift in the way both insurance companies and reinsurers are treating wind/hail and named windstorm coverage,” says Shawn Woedl, president and CEO of REInsurePro, adding that many insurers are reducing capacity and property rates are increasing in a rapidly hardening market. The appetite for wildfire risk has followed a similar path – insurance companies are increasingly cautious. There’s been a tightening of protection class requirements, and many carriers are requesting more underwriting information for coverage. “The number of moratoriums assigned to wildfires
alone over the last 12 months far outnumber those from hurricanes,” Woedl says. Then there’s hail and wind/tornado events. Derechos, a destructive type of windstorm, pummeled the Midwest and other areas, prompting carriers to use wind gates to start modeling wind and hail exposures. “Not only did we see an increased frequency and severity, we also saw areas of the country not prone to these wind/hail events get in on the action as well,” Woedl says. What’s more, flooding – brought on by hurricanes and other severe storms – has caused substantial losses, prompting insurers to increase premiums three- or fourfold just to break even. And the recent winter storm that affected Texas and other Southern states led to water damage from frozen pipes and will likely lead to premium increases, higher deductibles and limited appetite moving forward. Valerie Turpin, executive vice president of property at Arch Insurance, says severe weather is the one factor that has consistently impacted the commercial property market over the past couple of years. “This includes increased losses from wildfires due to drought-like conditions in some areas, as well as flooding in other areas,” she says. “The loss severity has been
BY THE NUMBERS: SEVERE WEATHER IN THE US
22 Billion-dollar severe weather events in the US in 2020 – the highest annual number on record
7 Billion-dollar tropical cyclones that struck the US in 2020
7 Average annual number of billion-dollar disasters in the US between 1980 and 2020
15.1 Average annual number of billion-dollar disasters in the US between 2015 and 2020 Source: Billion-Dollar Disasters, NOAA/NCEI
aggravated by additional factors, such as the lack of adequate repairs after prior damage, economic factors that reduce expenditures for preventive maintenance, social inflation, changes in legislation, and an increased cost of materials and labor.”
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FEATURES
SECTOR FOCUS: COMMERCIAL PROPERTY
Market impact In the face of these extreme weather events, Woedl and Turpin both feel that commercial property rates aren’t high enough to account for the increased exposures. “Despite almost three years of rate increases across the commercial property market, recent catastrophe losses suggest that pricing remains inadequate,” Turpin says. “This is partly due to catastrophe model error, but there continues to be a large amount of model uncertainty from inaccurate model input data, including the lack of details surrounding building construction and roof types. In addition, valuation of real and personal property remains an ongoing industry-wide issue, leading to inaccurate loss estimates and inadequate pricing. Current models appear to underestimate costs that are difficult to quantify, such as those associated with social inflation, ordinance or law, and changes in legislation. One remediation method is to reduce coverage, but this has not reduced exposure in the same proportion.” Woedl agrees that commercial property rates remain inadequate, “which is why we are experiencing a rapidly hardening property market,” he says. “This holds particularly true
“Not only did we see an increased frequency and severity, we also saw areas of the country not prone to these wind/ hail events get in on the action as well” Shawn Woedl, REInsurePro for the habitational markets.” Insurers of multifamily dwellings have had bad few years, he explains, causing increases in reinsurance costs, which are being passed on to consumers. “Deductible structures, policy endorsements and coverage limitations/sublimits within the policies available are increasingly
36
important for us to educate our clients on,” Woedl says. “This hardening/softening market cycle occurs every five to 10 years, and the best thing we can do is ride the storm out and focus on other ways to add value to our clients. We should all be striving to do this anyway, but it is increasingly important now. The agents who sell solely on price are going to have a difficult
next couple of years, at least.” The increase in extreme weather events has also pushed more commercial property business into the E&S market over the past several years. “These markets are an advantage for all of us to be using in our industry,” Woedl says. “Oftentimes, these E&S carriers have a better appetite for the risks we are placing with them. In addition, they can offer greater flexibility with both the coverage forms wanted – or required to have by a lender – as well as flexibility with rates. Commercial risks are almost always considered higher-risk by the industry as a whole, and partnering with E&S carriers who understand these risks and have appropriately modeled and charged for them helps to stabilize property rates, even in a hard market.”
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THE COSTLIEST EXTREME WEATHER EVENTS Since 1980, the US has seen 285 natural disasters that have resulted in losses of more than $1 billion. The total losses for those disasters come in at around $1.9 trillion – and tropical cyclones account for just over half of that total.
Tropical cyclone Flooding
Severe storm
Wildfire
5%
3%
Winter storm
Drought Freeze
2%
8% 14%
53% 15%
Source: Billion-Dollar Disasters, NOAA/NCEI
“Despite almost three years of rate increases across the commercial property market, recent catastrophe losses suggest that pricing remains inadequate” Valerie Turpin, Arch Insurance Turpin has also noticed “a sharp increase in business moving to the E&S market, mostly from large accounts that used to be written with a single carrier. With the change in risk appetite of these traditional carriers, brokers are building capacity on a shared and layered basis, which increases the complexity of the placement, ultimately increasing
coverage gaps, causing business to flow into the E&S market.”
The takeaway for brokers In this market, “brokers have been under tremendous pressure from their clients to place adequate cover at an acceptable price,” Turpin says. “They have developed a compli-
cated roadmap of the appetite of each carrier. Consequently, the number of options that have been reviewed and quoted on each deal has drastically increased.” Woedl notes that in a hardening market, every opportunity and renewal is increasingly important – and more difficult. He believes it’s crucial for brokers to stay in front of emerging trends in the market and keep educating themselves. “[We should be] focusing on which companies are scaling back on their offerings in our space and which ones are remaining competitive and even doubling down,” he says. “Keep an eye out for new carriers that begin to get into different parts of our industry, as they could prove to be the next hot market that gives you an advantage over the agents you’re competing against.”
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FEATURES
AGENCY INSIGHT
For the longest time Purmort & Martin Insurance Agency has served its local community for more than 60 years. President and CEO Russ Bobbitt tells IBA how the agency has survived and thrived – and what’s keeping its insurance experts on their toes
IBA: How has the leadership of Purmort & Martin evolved during your six decades serving the community of Sarasota, Florida? Russ Bobbitt: The agency started out as a very small shop opened by Paul Purmort and his two sons. A year later, Rick Martin joined, and it was renamed Purmort & Martin. Over the years, the agency grew, and then one of the brothers left and opened up an agency across town, but Purmort & Martin continued to operate. In 1997, I joined the firm, and in 2004, I became an owner with one of the founder’s sons, one of the founders and another agent. We purchased Mr. Martin’s shares in 2007. In 2012, I purchased another partner’s shares, and then in 2018, I bought out the last partner, so I became the sole owner.
IBA: How has the agency’s book of business changed since you joined? RB: We’ve always been primarily a property & casualty agency, so not really focused on life and health or benefits. We started out with a personal lines focus, and we’ve evolved more into having a commercial lines focus, but I’m trying to balance out the book, so we’re rolling back to personal lines a little bit more.
IBA: What do you see as the key insurance issues facing clients in the Sarasota community? RB: In Florida right now, we have a bit of a
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homeowner’s insurance crisis, and there are a lot of factors that have contributed to it, [such as] low rates and [the fact that] over the past few years, we’ve had a number of hurricanes where carriers have had to pay out a lot of claim dollars. We also have huge amounts of litigation in Florida, and there are certain areas that pay what are called fee multipliers that are very detrimental to the insurance environment. For commercial lines, we also have a hardening market here in Florida. Commercial auto has been a loss leader for a long time, probably for the past four or five years. One of the factors for that is we’ve got social inflation on some verdicts, where people are thinking that certain cases are worth more money, so they settle for more, and [we’ve also had] artificially low rates for many years. We are also facing a challenge with management liability because of COVID, where employment practices liability and
directors & officers coverages are very tough to get, and renewals have been coming in with high increases.
IBA: What do you think has helped Purmort & Martin stand the test of time thus far? RB: The main thing that I attribute it to is always staying focused on the fact that the client is the number-one priority. It’s embedded into our culture, it’s embedded into the way that we communicate externally, and it’s embedded into the way that we operate every day. We have a culture program that is called the Think program, which says that you always need to stop and think about the way you operate and how it affects others, being mindful of the way that they feel about something – primarily clients, but we’re also focused on our employees and carrier partners.
ABOUT PURMORT & MARTIN INSURANCE AGENCY Purmort & Martin Insurance Agency has been a part of the Sarasota, Florida, community for more than 60 years. It’s one of the area’s oldest locally owned insurance agencies, as well as one of its largest. The agency’s mission is to provide independent business owners and individuals with professional advice on insurance products that meet their unique needs. Recently, the agency grew even further on the back of its acquisition of another local business, the P&C insurance agency Jeff DeJongh & Associates. DeJongh, who has more than 18 years of sales and management experience in the insurance, financial services, and medical and dental device industries, has joined Purmort & Martin as vice president of sales.
www.ibamag.com
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FAST FACTS : PURMORT & MARTIN AREAS OF EXPERTISE Commercial lines Personal lines Life insurance Marketing Accounting
Year founded: 1959 Headquarters: Sarasota, Florida Number of employees: 25+ Leadership: Russ Bobbitt, president and CEO
“The client is the number-one priority. It’s embedded into our culture, it’s embedded into the way that we communicate externally, and it’s embedded into the way that we operate every day” IBA: How has that approach played out during the past year? RB: We always need to put ourselves in our clients’ shoes – we need to understand their thinking and be mindful of the way they’re looking at things. I think that’s very important – I think it’s important for our staff and agents to under-
stand that, and for our external salespeople to convey that, we always need to understand that people are going through different things than we are and that they don’t see things the same way we do. We need to understand their points of view before we can convey our message and do our job – and that’s serving them.
IBA: How is Purmort & Martin ensuring its long-term survival? RB: The way you survive is to grow, and you can grow two ways – you can grow organically or by acquisition. At Purmort & Martin, we’re doing both. We’re adding salespeople who are specializing in different areas, and they’re helping with the organic growth. With their development, they then produce more business. We’re very bullish on the future, as far as renewals go with our clients, because of the way that we handle our renewals and servicing our clients, but we also are going to continue to look to acquire agencies – generally those that are smaller than we are – for acquisition growth. So we’re going to use those two factors, and we’re just going to keep pushing ahead.
www.ibamag.com
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Boornazia n’s favorite wine is a PulignyMontrachet chardonnay paired with stea med cla ms or fish a nd chips
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Years since Boornazian began the WSET program
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A TOAST TO HERITAGE Insurance VP Charles Boornazian’s ancestral lineage led him to a newfound passion for wine TRACING HIS ancestral roots not only led Charles Boornazian to discover his family’s past, but also inspired him to dive into the wide world of wine. “Approximately 30 years ago, my loved ones had a family tree constructed,” says Boornazian, who serves as vice president of risk alternatives at Insurance Office of America. “It revealed that one
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of my ancient Armenian ancestors owned a vineyard and was a winemaker. I always enjoyed certain wines during my college years, so I decided to learn more about wine.” Boornazian is also proud of the fact that the world’s oldest documented winery was found in Armenia, dating back more than 6,000 years. This led him to deepen
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