Resources Magazine Summer 2017

2 Resources | Summer 2017

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Contents FEATURES

ALLIANCE NEWS

4 Cyber and Social Media Risks

12 Dynamics Master Sales Class

Important issues to dialogue about with your high profile clients

20 Train Your Team

Facing High Net Worth Families

By Anna Brusco, CIC, CPRM

14 Expert Perspective: Underwriting

Learn a proven sales process with personalized training Map your career track and customize your learning experience

Chief Underwriting Officer for Zurich, North America, Geno Fernandez, discusses the future of the industry

26 The Sun Never Sets Presenting new CPRM designees and a new online learning environment

28 Passion and Perseverance

CISR Janice McNary inspires as she pursues her goals

35 Ask Bettie Shutting down posers and celebrating performers

COLUMNS

36 The Dallas MEGA

8 Tech Beat

Join in on the know-how, networking, and hospitality

It’s Eight O’Clock in the Morning—Do You Know Where Your Data Files Are?

By Jerry Hargrove, J.D., CIC, CPIA, FCLA, SCLA, PICS, LICS, CBIA

37 In the Spotlight

Industry accolades and achievements

22 Risky Business Automated Vehicle Technology—An Academic Perspective

By Risk Management Grad Students: Shannon N. Crowder; Robin S. Joines; Brian R. McLeod, CPA; Liz Schmitt; and Casee Walley

32 Coverage Corner Crime Coverage—Beyond Employee Dishonesty

By Chris Christian, CIC, RPLU

Pictured on front cover: Dr. William T. Hold, CIC, CPCU, CLU, President of The National Alliance, and Richard Kerr, CIC, ARM, Founder of the Council for Insuring Private Clients (CIPC), pause to capture a proud moment with Anna Brusco, CIC, CPRM, VP and National Distribution Manager for AIG Private Client Group, CPRM speaker, and member of the CIC Board of Governors, at the inaugural CPRM conferment ceremony.

Pictured right: Beverly Messer, CIC, CRM, CISR, Senior VP of Academic Development at The National Alliance, raises a toast to the new CPRM designees.

Read all about it on page 26!

We b s i t e : TheNationalAlliance.com

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EMAIL: alliance@scic.com

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Phone: 8 00-6 3 3-2 165

BY ANNA BRUSCO, CIC, CPRM

4 Resources | Summer 2017

H

igh net worth individuals and families rely on technology at an ever increasing pace to simplify their lives and keep them connected. This makes it more important than ever to understand the multitude of first- and third-party exposures presented by technology, as well as ways to mitigate these risks.

From a first-party perspective—especially with the increase in smart devices in the home (referred to as the Internet of Things, or IoT)—individuals are exposing themselves to an entirely new threat level. The Internet of Things is a concept of everyday objects being connected to the Internet, able to identify themselves via unique identi-

fiers, and able to aggregate and share data. Walk into anybody’s home today and you’ll find smart devices in every room—smart televisions, devices such as the Nest that enable you to control the temperature of your house remotely, smart refrigerators—and beyond the home—smart wearable devices such as Fitbit. These devices are growing in popularity at such a quick pace that AIG data experts believe that by 2020, we could see 40 to 50 billion devices on Earth, or roughly 4–5 devices per person.

With new smart devices flooding the marketplace every day, it should come as no surprise that innovation of new smart home technologies has far surpassed security protocols of many of these devices.

Since the general population isn’t fully informed about how easy it is to infiltrate these types of devices, these manufacturers try to get away without expensive security safeguards.

Some companies who produce these devices don’t have the capital or experience to ensure their devices are fortified against possible breaches from cybercriminals. Since the general population isn’t fully informed about how easy it is to infiltrate these types of devices, these manufacturers try to get away without expensive security safeguards.

There currently are no widely accepted national or global security standards for IoT devices.

However, after a massive smart camera and DVR attack, known as

a Distributed Denial of Service (DDoS), last November, the security concern of IoT devices garnered the attention of Congress. A DDoS attack is an attempt to make a website unavailable by overwhelming it with traffic from multiple sources. The hackers in this attack were able to easily infiltrate into insecure DVRs and security cameras to access and control a portion of the Internet, resulting in several well-known sites, such as Twitter and Netflix, being down for hours. The hackers were able to wreak a good amount of havoc (and financial loss to the companies impacted) by just hacking into 100,000 devices globally. A House subcommittee meeting took place shortly after this attack where several national cyber security experts called for federal oversight to be developed. If this could happen with just 100,000 devices, cyber experts escalated the concerns of the implications of a much larger attack.

Couple the lack of security standards in IoT devices with the naiveté of the general population in understanding how they are insecure, and it’s easy to see how these devices can be hacked.

How many individuals are resetting factory default passwords or researching the manufacturer of these devices to ensure they’ve included cyber security technology to protect the consumer against an attack? How likely are individuals to purchase devices from larger, well-known manufacturers, which tend to patch security holes more quickly?

Compromised IoT devices can be used to launch dangerous attacks, and in addition to financial gain, cyber criminals also commit attacks for bragging rights.

What if a compromised IoT device enables a hacker to take control of the thermostat in a high net worth individual’s secondary home in the wintertime, disabling heat and causing a massive pipe burst that goes unnoticed?

Another concern of IoT devices is the widespread collection of data (with or without the individual’s knowledge) and how that information is used. Many companies are not readily transparent about what information sharing practices customers are opting into. And cyber thieves know there is a premium on Continued on page 6.

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Cyber and Social Media Risks

…continued from page 5.

the market for stolen data. It used to just be stolen credit card information. Now, with the advent of IoT devices, cyber thieves can steal a lot more data from unsuspecting victims—everything from financial info, to perceived “normal” habits—making identity theft much easier to commit.

Ransomware attacks are also on the rise and something that many cyber experts point to as a quickly evolving risk due to how easy it is to commit an attack. Even

Ransomware is getting more and more sophisticated, harder to detect, and has been found, not only on personal computers, but also on smart phones, and is making its way onto unsecured IoT devices. Think about the high net worth family who unknowingly is being watched in their home through a web camera or nanny cam by a cyber-criminal who plans to extort the family for money by threatening to make compromising photos public.

…high net worth families and those who represent them online need to have a thorough understanding of the repercussions of what they post online under the guise of hiding behind an assumed digital anonymity. would-be cyber-criminals with few technological skills can lease “do-it-yourself” ransomware kits on an anonymous basis on the dark net. Once an individual’s computer is subjected to ransomware, it can be held hostage for ransom. The victim is ordered to pay a certain amount of money—many times in cryptocurrency such as Bitcoin—within a certain amount of hours. This is demanded in order to retrieve a key to decrypt all of the data that the ransomware has been encrypting (unbeknownst to the victim) since the ransomware was first introduced onto the victim’s device.

Another concern of cyber-attacks and cyber extortion is the potential reputational harm inflicted against the high net worth individual from the release of potentially damaging, confidential data and photos, coupled with the various access points for an attack. This is another reason high net worth individuals are attractive as targets of cyber thieves— they likely are more well-known, have more on the line to lose, and therefore might be more willing to “pay up” or command more of a premium for stolen credentials on the dark web. It’s not

Learn More, Earn More The Certified Personal Risk Manager (CPRM) program provides practical and relevant information for insurance professionals working with affluent and high net worth clients. Begin with the CPRM Personal Client Risk Management Course to learn the value and importance of incorporating risk management into the insurance program for clients with unique and complex exposures. Dates for 2017 CPRM Personal Client Risk Management courses are as follows: July 18–20, Dallas, TX; September 19–21, Atlanta, GA; December 5–7, Las Vegas, NV. And keep in mind, The National Alliance Research Academy’s book, Risk Management Essentials, is an excellent resource for detailed information about all types of risk (scic.com/store/publications.html).

6 Resources | Summer 2017

just the individual or family member, but also the household staff members who may have access to the sensitive, private information, presenting another possible access point.

From a third-party perspective, high net worth families and those who represent them online need to have a thorough understanding of the repercussions of what they post online under the guise of hiding behind an assumed digital anonymity. The reality is that everything on social media is discoverable and traceable. High net worth families can expose themselves to a litany of personal injury-type lawsuits, including invasion of privacy (posting pictures of other people’s kids without their permission, for example), slander, and defamation of character. It could be a business that is unhappy with an unfavorable review on a public website and in turn sues the high net worth individual for making false defamatory claims resulting in a slowdown or a shut down of business. In December 2016, the Consumer Review Fairness Act was passed, which protects consumers’ ability to write reviews about businesses online without fear of repercussion. This was, in part, as a result of companies that were requiring their clients to enter into contracts prohibiting them from posting negative reviews about the company online. While the Act provides a layer of protection for consumers’ reviews online, it also states that companies can still sue consumers for reviews they post that are in violation of defamation, libel, or slander laws.

Even if the suit is groundless or baseless, the client is on the hook for the defense, and there is a risk of reputational harm.

High net worth individuals and families should exercise a series of best practices when it comes to how and when they utilize technology—in the home, on the road, and wherever they travel. They should be encouraged to practice good cyber hygiene, such as instituting hardto-crack passwords and changing them often, keeping operating systems and software patches updated and enabling automatic updates, installing antivirus and anti-spyware software, encrypting

About the Author: Anna Brusco, CIC, CPRM Anna Brusco is Vice President and National Distribution Manager for AIG Private Client Group, which caters to high net worth individuals and families. Anna recently led the building and launching of the group’s newest product, Family CyberEdge, a first-to-market cyber insurance coverage specifically designed for high net worth individuals. Anna is also a speaker for the CPRM Program and a member of the CIC Board of Governors.

data, and only downloading software from trustworthy sources.

They should also be made aware of the various liability risks posed, especially through the utilization of social media, and how this could have far reaching financial and legal implications for the family down the line.

From a risk finance perspective, high net worth carriers provide third-party liability coverage associated with cyber liability and social media risks, which would generally fall under the personal injury definition.

From a first-party perspective, coverage is also available in the marketplace for cyber first-party claims. Equally as important to the indemnity provided is the immediate access to cyber security professionals who can address and expeditiously remediate a precarious cyber claims situation, which might also involve risk of reputational harm to the high net worth client in the event stolen information is leaked.

From a risk management perspective, it’s important to establish ongoing dialogue with your high net worth clients regarding both first- and third-party cyber exposures.

Ensure they are practicing good cyber safety when utilizing personal computers, smart devices, and IoT devices. Also, ensure they understand the liability risks presented from utilization of social media. n

Through their generous donations, Academy Research Associates help fund and participate in the research and publication activities of The National Alliance Research Academy and also assist in outreach efforts to attract students to the insurance industry through career-oriented programs offered in cooperation with various educational institutions. For more information about the benefits of becoming a Research Associate, contact William J. Hold at wjhold@scic.com, or call 800-633-2165, ext. 3325.

Companies: AAA, Inc. All Risks American Agents Alliance Assurex Global Bancorp South Insurance Services, Inc. BB&T Insurance Services Bowen, Miclette & Britt Brown & Brown, Inc. CRC Insurance Services, Inc. Calhoun, Thomson, & Matza, LLP HR&R, LLC HUB International Hylant Inspirus ISU Insurance Agency Network Jerry Montgomery Memorial Research Fund Keystone Insurers Group Marble Box MarketScout, Inc. McGriff, Seibles & Williams Patra Corporation Popular Insurance, Inc. Selective Insurance Group, Inc. State Auto Insurance Companies Synergy Comp Insurance Company Texas Capital Bank United Valley Insurance Services USI Southwest Westwood Trust

Zurich North America Associations: Alabama IIA IIAB of Arizona Trusted Choice Insurance Agents of Colorado PIA of Connecticut IIAB of Delaware FAIA PIA Southern Alliance IIA of Illinois IIA of Indiana PIA of Indiana Kansas AIA IIA of Kentucky PIA of Kentucky IIAB of Maryland Massachusetts AIA Michigan AIA Minnesota IIAB PIA of Nebraska and Iowa PIA of New Jersey PIA of New York State IIA of North Carolina Ohio Insurance Agents Association IIA of Oklahoma IIAB of Pennsylvania IIAB of South Carolina Insurors of Tennessee PIA of Virginia and D.C. PIA of Washington/ Oregon PIA of Wisconsin

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T E C H B E AT

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JERRY HARGROVE, J.D., CIC, CPIA, FCLA, SCLA, PICS, LICS, CBIA

It’s Eight O’Clock in the Morning—

Do You Know Where Your Data Files Are? Cyber Extortion via Ransomware

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magine that you arrive at work early one morning and log on to the agency desktop. Suddenly, the screen freezes and a pop-up warning notice appears, informing you that all documents, photos, databases, and other files have

Learn More, Earn More Attend the newly revised CRM Control of Risk Course to learn about first- and third-party cyber exposures and risk control techniques. Also, many Ruble Graduate Seminars and Advanced Risk Seminars include presentations dedicated to cyber risk. For example, check out the James K. Ruble Cyber Risk Seminar being held in Milwaukee, WI, August 21–22. The author of this article will be co-leader of this advanced seminar. To learn more about commercial liability exposures and treatments, attend the NEW CIC Commercial Multiline Institute. In addition, The National Alliance Research Academy’s book, Risk Management Essentials, is an excellent resource for learning about all types of risk (scic.com/store/ publications.html).

8 Resources | Summer 2017

been encrypted. The files are gibberish. You are locked out of your own system. Your data has been hijacked. All at once, the enormity of the situation hits you, and you have a panic attack!

The pop-up warning notice advises you that a decryption key, stored on a secret Internet server, is the only way to recover agency files. All you need to do to solve your problem is to deliver a ransom payment within the time remaining on an onscreen running clock that is ticking down the minutes and seconds. If you don’t pay, the server will automatically eliminate the key when the clock hits 0. (Another prompt used in information hijackings is a “blue screen” window that advises you that your Windows License has expired and that you should call a 1-800 number to reactivate.)

Welcome to “ransomware” (cyber extortion), an exploding exposure to be reckoned with in 2017. All signs point to a banner year for hackers turning to ransomware as a successful business model. A study by cyber risk insurer Beazley found that ransomware attacks quadrupled in 2016 as compared to 2015. Beazley expects the attacks to double in 2017.¹ Ransomware is delivered through many different avenues.

The malware might be activated by opening an email attachment that is actually an executable file, or it might be linked to an archive or an image file you click on, or it may be set in ¹ Beazley Breach Insights—January 2017.

…choosing how to respond to a ransomware threat is a matter of economics over time.

How long will it take to get operational and what will be the cost if you resist paying a ransom? motion by visiting and downloading documents or programs from an untrustworthy website. Once your system has been compromised, the bad actors introduce malicious code that will encrypt, destroy, or corrupt data, reinforcing the threat and the need for your timely monetary response.

To Pay or Not To Pay? After your panic attack subsides, and you catch your breath, it occurs to you that even if you pay the ransom, the hacker may not provide the decryption key.

Good news, perhaps! Past behavior indicates the data will most likely be restored if the hacker is truly in the ransomware business, as opposed to just being a techie engaged in cyber vandalism. The “in-the-business” pros realize that if they fail to furnish the key to restore the data, victims will eventually refuse to pay and the ransom model will no longer be successful.

In reality, choosing how to respond to a ransomware threat is a matter of economics over time. How long will it take to get operational and what will be the cost if you resist paying a ransom? Without pre-loss risk management techniques, including a full off-system backup, cyber experts often argue that failing to pay the ransom is not an option, as other alternatives to data recovery are likely to be more costly. In fact, in many cases, paying the ransom may be the only viable option.

In The Headlines In February 2016, hackers used encryption to quarantine the full operating database of Hollywood Presbyterian Medical Center, a 400+-bed, acute-care facility in Los Angeles. Initial reports claimed the demand from the hacker was more than $3 million in equivalent bitcoin, which is a digital/virtual (cryptography) currency that is hard to trace. However, the hospital reports that it paid 40 (B) bitcoin (around $17,000) for the decryption key to release the encrypted data and resume normal operations. The hospital management realized that the ransom payment was the least expensive and fastest way to recapture the data.

A Little Bit of Ransomware History An early ransom scam involved a “locked” blue-screen interface that informed the user that serious threats were detected on that computer. The notice cautioned that continuing to use the computer could result in compromising its data.

The blue screen provided a toll-free tech support telephone number and advised that a qualified technician was available to remove the adware/spyware. This “tech” vendor just happened to be scanning the Internet and found this specific system had the “blue screen of death” problem. Of course, the proffered support required the payment of a modest fee by credit card. Then, the bad actor often processed the credit Continued on page 10.

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Do You Know Where Your Data Files Are?…continued from page 9. card multiple times until the credit limit was reached, or the system alerted and blocked activity on the card.

Moving out of the late 80s and into the 90s, a number of ransomware scams were introduced. PC Cyborg was followed

by WinLock (2007), a non-encryption scam that locked users out of their desktops. The hackers demanded an immediate payment of a ransom to return control to the user. The good news was that PC Cyborg and WinLock were fairly simple to remove by those with computer know-how.

In 2012, Reveton (Citadel), a social engineering type of intrusion, was introduced to lock out desktops. The Reveton ransomware displayed a warning message that appeared to be an official law enforcement agency notice. It was often shrouded in a screen that had the logo of the FBI, IRS, or the Department of Justice. The notice would accuse a user of being involved in illegal activity such as downloading child pornography, downloading unlicensed software, failure to pay taxes, and other serious illegal acts. Another approach was to threaten to make certain unfavorable information public.

Then came the pitch! For a specific payment, by way of a SMS Payment System or a pre-paid cash card, the problem would—“poof”—vanish.

Moving forward, more sophisticated attackers, such as Cryptolocker, CryptoWall, CTB-Locker, Lockey TeslaCrypt, TorrentLocker, Trojan.Ransomlock.AM (fake blue-screen image), and Fusob, joined the marketplace of cyber crime. Fusob used an intimidating ticking clock to heighten the perception of the need for a response to a ransom demand of $100–$200 dollars, including payment with an iTunes gift card.² Initially, the ransom malware affected only PC operating systems. Then, Apple MAC OS X was hit with the introduction of KeRanger in early 2016. KeRanger targets MAC OS X, and it is believed that KeRanger is launched by the Transmission app, BitTorrent client installer, with an alternate code signature that appears to be an update. Once introduced, KeRanger begins its mischief on day three. The ransom demanded is one bitcoin (B) ($400).³ To add insult to injury, a new twist, Popcorn Time ransomware recently hit the Internet. In this version of the scam, the ransom master agrees to provide a free decryption key if the victim surrenders their email contact cache and at least two of the contacts respond with payment of the ransom.

Closely linked to the ransomware risk is a pure extortion threat. In this scenario, a hacker gains access to the computer system of the target, sends a captured confidential document to confirm the entry, and threatens that the information will

be released unless a specific amount of money or (B) payment is paid in a timely manner. The hacker often threatens to shut the computer system down until payment is received.

Important Risk Management Techniques Cyber criminals are getting better at perfecting their techniques in order to stay one step ahead of the defenders. Users must take advantage of preventative methods to manage the risk. Cyber experts suggest the following strategies: • Be careful what you click on. If in any doubt, don’t click.

• Utilize up-to-date email reader Spam Filters that provide whitelists and blacklists.

• Ignore and delete suspicious/unknown email.

• Keep your operating systems and software updated.

• Use a pop-up blocker.

• Purchase, use, and keep anti-virus (anti-malware) software updated.

• Strictly limit those who are authorized to install and run software.

• Avoid enabling “macros”4 (embedded code commands) from email attachments.

• Make regular data backups to an off-site system not accessible through your operating network.

• Budget for expert advice on risk management options.

• Purchase cyber coverage.

Cyber criminals are getting better at perfecting their techniques in order to stay one step ahead of the defenders. Users must take advantage of preventative methods to manage the risk.

The Insurance Option—Cyber Extortion Extortion—ransomware events include both first-party and third-party claims. Definitions must be carefully read, and the scope of the definition of “loss” is crucial.

First-party loss includes: • Actual amount of the ransom payment. Some insuring agreements only pay the amount of interest on a loan used

² Mobile Ransomware Use Jumps—PCWorld IDG Consumer & SMB, Dec. 2016. ³ FileCoder was discovered by Kaspersky Lab in 2014. However, KeRanger is thought to be the first totally functional ransomware to infect OS X. Source: Claud Xiao and Jin Chen, Paloalto Networks.® “Macro malware usually hides in Microsoft Word or Microsoft Excel documents. These malicious documents are sent as spam email attachments, or inside ZIP files attached to spam emails. They use files names designed to entice you into opening them.” (Source: Microsoft-Malware Protection Center)

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to pay the ransom and only for a specific period of time.

Some only pay defined “extortion” expenses.

• System (Network) Interruption Business Income for a stated number of days (30–60–90–120 days) subject to a waiting period (may be written as Network Interruption).

• Rehabilitation (recovery/restoration) of digital assets. Carefully review policy terms that apply to what items are not included in this grant of coverage. Is the cost of the insured’s employees to assist in the recovery process, as well as overtime, included? What about the cost of replacement software licenses and mitigation costs?

• Does a sublimit and/or deductible apply?

• Does the carrier require the use of “nominated vendor(s)” for specific resources?

• Are costs for forensic investigative services (or professional fees) to identify the source of the attack and assist in security measures to mitigate/avoid future losses paid?

Third-party loss includes: • Is the insured unable to provide services or products to clients and/or partners? Does the insuring agreement respond to claims filed by third parties alleging damages due to the insured’s failure to provide that service or product?

• Is there a possibility of a security breach (corporate or personal protected data) arising out of the extortion attack?

If so, does the insuring agreement address claims by third parties (clients/partners) alleging resulting damages?

• Are regulatory costs and fines reimbursed?

Selected conditions and exclusions include: • Immediate notice to the carrier is usually a condition of coverage and is due prior to payment.

• Terms may require specific authorization by the carrier before payment. This can be problematic given the ticking clock.

• Exclusion for acts of foreign enemies or governments.

• Government Entity or Public Authority exclusion.

• Extortion Threats must occur, or be notified, within the policy period and in accordance with other conditions of the policy.

Cyber policies are not uniform and the agent/broker and insured must carefully read the policy and seek specific advice on terms that are not clearly understood.

Another Opportunity Crime Coverage is a possible protection option. ISO coverage CR 00 40 Kidnap/Ransom And Extortion Coverage Form and CR 00 41 Kidnap/Ransom And Extortion Policy include the following two Insuring Agreements: 1. Kidnap/Ransom And Extortion—Direct Loss.

This pays, in part, for the loss of “property” surrendered as an extortion payment resulting directly from an extortion threat to introduce a virus or malicious instruction into a “computer system.”

2. Kidnap/Ransom And Extortion—Expenses Incurred.

This pays for “expenses” incurred by the named insured resulting directly from an event covered under Insuring Agreement 1. While the definition of covered “expenses” is broad, it does not provide for payment of loss of earnings incurred.

Another concern is that the definition of “property” does not include virtual currency payment. It is limited to money, monetary instruments, securities, services, and items of tangible property. The general definition for “monetary instruments” does not include virtual currency. Would the insurer consider “monetary instruments” to include virtual currency?

Do not leave it to chance—seek an endorsement to make sure the money value of any virtual payment will be paid and that the condition for Valuation–Settlement terms conforms.5 This article partially touches the scope of the ransomware exposure and the risk management and insurance aspects of the subject matter. The purpose is to encourage agents/brokers and risk managers to get involved in understanding the basics and to work with cyber and crime insurance specialists in designing coverages to be offered.

Be vigilant and urge clients to practice good risk management and to purchase cyber-specific insurance! n 5

Includes material copyrighted by Insurance Services Office, Inc., 2012.

• Many cyber package policies have an absolute ransomware (extortion) exclusion regardless of broad wording in other insuring agreements chosen.

About the Author: Jerry Hargrove, J.D., CIC, CPIA, FCLA, SCLA, PICS, LICS, CBIA

• A requirement to keep confidential the existence of extortion coverage, except for notice to law enforcement authorities.

Jerry Hargrove retired as president of Northside Insurance Services in December 2003, after 36 years as an independent agent. He continues as Principal of Insurance Litigation Counselors, LLC, EdTrak™ Insurance Seminars, LLC, and Bank Insurance Examiners, LLC. Jerry has been a member of The National Alliance’s National Faculty since 1986.

• A broad exclusion for dishonest, fraudulent, criminal or malicious act, error or omission, or any intentional or knowing violation of the law, if committed by any of the insureds. Seek separation of insureds language for this exclusion.

• A series of related events are considered a single loss subject to a single limit.

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Act Now—This is the Only Opportunity in 2017! Dallas, TX, Area • October 9–13

T

he acclaimed Dynamics of Selling process has revolutionized the sales careers of a generation of insurance producers—dramatically increasing closing ratios and personal income. While many generic sales programs are available, Dynamics remains the only “insurance specific” sales process developed and taught by active sales leaders in our industry.

With a limited class size, the Dynamics Master Sales Class is a career-changing, five-day program designed to immerse participants in a proven process through practice opportunities and individual coaching not available in a two-day format. Further Master Sales Class training will reinforce a marketing regimen guaranteed to answer the always asked question: “How do I get in the door?”

of 10! Why wait years to figure out on your own the skills we can teach you in five days!

Veteran Producers: The Dynamics faculty team has been instructing seasoned producers for years. It’s amazing how—as the years pass—we forget the basics that brought us to success. It’s time to recharge and up your game. Consider how the very best athletes continue to train because they are driven to remain the very best!

Dynamics Master Sales Class Highlights • Understand Major Industry Changes & How to Leverage Them for Personal Success • Study the Five Traits That Make Up Only 20% of Producers Sales Stars

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• Learn the Skills of Selling in Any Market Cycle

Why Spend Five Days in Sales Training?

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• Develop a Method to Avoid the Price-Driven Sale • Create a Value Proposition Tied to Your Buyer’s Actual Needs

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Faculty The Dynamics Master Sales Class will always be led by a member of the Dynamics senior staff and assisted by Dynamics associates—all are active and highly successful producers with both current knowledge and years of experience in the industry and in training. Each has an uncanny ability to leave the script, taking the difficult and explaining it simply in a highly motivational way.

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Jeff is a nationally known expert in all areas of producer management and development. With a tenure of over 45 years, he remains a top producing agent and sales manager working with a wide spectrum of clients in areas ranging from manufacturing and construction to hospitality and the unique world of entertainment.

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Five Days of Power-packed Training for $1,200 • Includes all training, course materials, refreshments during the day, and lunches.

• CE Credit—This program is not filed for CE credit. Top sales and marketing programs are not granted CE by state insurance departments.

The Dynamics Master Sales Class will be presented at: Courtyard and TownePlace Suites by Marriott 2200 Bass Pro Court Grapevine, TX 76051 Transportation and accommodations are the responsibility of the student. A room rate of $119/night for Sales Class participants has been negotiated at the Courtyard and TownePlace Suites venue. Register for the class at:

TheNationalAlliance.com

The Master Sales Class Agenda DAY ONE: State of the Industry • Traits of Top Producers • Why People Buy • Create Your Own Value Proposition You’ll discover how to manage the decision-making process, taking control of your sales career by learning to know yourself, the industry, your clients, and the traits of top producers.

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DAY FOUR: The Three-Step Process—An Overview • Probing Skill Training • Breakout: Probing Drill • Objection Skill Training • Breakout: Create Objection Flash Cards • Qualifications: Moving to Step Two • Basics of Risk Management • Step Two: Protection Review Dive into the deep end with practice, role-playing, and high-level feedback. You’ll discover how to turn objections into opportunities with advanced communication skills.

DAY FIVE: Review the Three-Step Process—Quiz • Step Three: Presentation of Solutions • Role Play with Objections • Your Personal Sales and Income Goals • Taking It to the Streets Day five of the program starts with a review and reinforces what you’ve learned with role playing and objection-strategies. Set your sights high with sales and income goals!

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EXPERT PERSPECTIVE

Underwriting­— Fueling the future of the industry with diverse backgrounds, intellectual curiosity, and new energy An Interview with Geno Fernandez, Chief Underwriting Officer for Zurich in North America

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hat makes a great underwriter? A diverse background, intellectual curiosity, problem-solving skills, and a heart for relationships. That earnest assessment comes from Geno Fernandez, Zurich’s Chief Underwriting Officer in North America. At Zurich, Mr. Fernandez is in charge of underwriting, risk selection, pricing, portfolio management, predictive analytics, and the management of the product suite offered in North America. He joined Zurich in 2012 as the Head of Strategic Execution for North America and was named to his current position in 2016.

But how did a Rhodes Scholar and an Oxford University graduate—with a doctorate in ancient philosophy and a love of theology—move from his track towards the priesthood to the head of underwriting at one of the nation’s largest carriers? And how does his unique perspective influence the vision he has for the future of underwriting?

14 Resources | Summer 2017

In April, Will Hold, V.P. of Business Development at The National Alliance, explored with Mr. Fernandez the path he took into underwriting. They also discussed the central function of the underwriter and how that function may change with the advent of big data sources, analytics, and other powerful predictive technologies. Can advanced telematics, greater analytical and computing firepower, and new data sources undercut the role of the underwriter or will they dramatically transform the way underwriters work and expand the ways they can contribute value to the business? More practically, the two men talked about a concern that exists across the industry—how insurers can deal with an emerging talent gap, as many experienced workers face retirement in the next several years.

We think you will enjoy this interview with Mr. Geno Fernandez, a man who, like most in this industry, values the very human side of insurance and underwriting.

The National Alliance (TNA): You have a fascinating educational background. How did you segue from your theological field of study into insurance, risk management, and underwriting?

Geno Fernandez: I’ll admit, I do have an unusual educational background for someone in my position.

Since I was a boy, I wanted to be a Roman Catholic priest. So after high school, I entered the seminary at the University of Notre Dame. I graduated from Notre Dame and, unexpectedly, was awarded a Rhodes scholarship. I asked my Superiors at the seminary if I should continue on or take the scholarship, and they said, “Take the Rhodes scholarship—take the Rhodes scholarship!” So I went to Oxford University in England and studied ancient philosophy. After that, I went to Rome and studied theology. Before I was to be ordained a priest, I took a big step back, and after some serious thought, decided not to pursue becoming a priest and opted for another direction. I went from there to McKinsey & Company, the management consulting firm.

This was back in the late 90s; there, I became a senior partner and spent the entire time in the insurance practice. I helped develop McKinsey’s underwriting service line and commercially viable, underwrit-

ing improvement programs for a variety of commercial insurance providers, including Zurich, which was a key client of mine and the client that I most respected. It was an easy decision when Mike Foley, the CEO of Zurich North America, said to me, “You should come over and put into practice some of the ideas that you’ve been helping us with over the years.” So almost five years ago now, I joined Zurich, and was very glad to do so. I am now the Chief Underwriting Officer of Zurich in North America.

TNA: Before you took the job with McKinsey, did you know anything about insurance or underwriting?

Was it a focus of yours?

Geno: I knew a lot about what Aristotle had to say about friendship and what St. Thomas Aquinas had to say about the infused moral virtues, which is what I wrote my dissertations on, but I had never taken a business course or studied insurance in particular. I actually learned on the job, over the course of two decades.

I only did insurance at McKinsey, and I basically got connected with it through a group of people who formed the core of the insurance practice—people I’m still in close contact with today and who were my mentors throughout that time, and continue to be so.

TNA: How would you describe the traditional role of the underwriter versus what it is becoming today, and what it will be in the future?

Geno: We read a lot in the insurance press about whether underwriters will survive with all the technological disruptions and the digitization and data and analytics.

I read those things with a mixture of amusement and disbelief, because insurance, at Continued on page 16.

“…insurance, at the end of the day, is a people business, and will remain a people business.”

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15

Underwriting

…continued from page 15.

the end of the day, is a people business and will remain a people business. So those who actually believe that the disruptions will take away the role of human agency in assessing and quantifying and transferring risk, don’t realize that the real disruptions come from the augmentation of the capabilities of underwriters. The commercial insurance companies that will be successful in the future will be those that appropriately augment the capabilities of underwriters. And so, you could scale what they have been able to

the tools—what are the capabilities that they need to be able to do that?

Geno: I was at a conference where one of the speakers related that more digital information was produced last year than in the entire history of humanity. And next year, it will be even more than that! So, we are at a place in time where the access to information is vast and tremendous, and all of that information can be used for the evaluation of risk.

The question is who can analyze the information with the right combination of skills in data science, tech-

“The commercial insurance companies that will be successful in the future will be those that appropriately augment the capabilities of underwriters.” do in the past much more, but relationships and human judgment remain integral to understanding the business operations and the people.

At the core, corporations are collections of people. And when you assess the risks of business, you need to assess the risks inherent in the people. We have invested in predictive analytics and in data science in a big way at Zurich—but in a measured way, I think. Those are all for the augmentation of our underwriters. The commercial underwriter is a key ingredient in the transfer and evaluation of risk, so that when we help our clients understand and protect themselves from risk, they rely on their underwriter and broker to be creative in the structuring of programs specific to their own business. I don’t see that changing in the near term.

TNA: There are so many data science and technology options and data sources that can potentially impact the underwriting of a risk.

How do you see that being managed? Not only the technological tools, but also the people who use

16 Resources | Summer 2017

nology, and in risk awareness to turn all of that data into meaningful insights that are of value to our customers—and that is what Zurich does. Zurich’s investments in data science and technology are there to take advantage of the large number of data sources—sources that smaller competitors may not readily be able to access,and that some larger competitors may struggle to make sense of. It is critical to be able to take data and evaluate it, pick out those characteristics that are lossproducing, and help our customers protect themselves. That’s where we have oriented our entire investment in data and analytics, and no machine can do that creative work.

The machine can give you access to the data sources. It can tell you weather patterns up to ten square feet anywhere in the United States.

It can give you measurements at a level that is mind-boggling. But you still need interpretation; you need to be able to ask the right questions, and you need the intellectual curiosity and problem solving skills which are the distinctive hallmarks of the underwriting profession. And this is why someone of my background

can be successful in it, because what the profession is looking for is intellectually curious problem solvers who care very much about the customer’s success. They must also be business-minded and capable of evaluating and transferring risk.

TNA: You discussed a number of different data sources and technologies—to get down to a practical level—is there one source of data or type of data or one technology tool that you feel has had a bigger impact than anything else up to this point?

Geno: The sources are many and varied, and there is no one particular source that has “moved the needle” more than another. The real source that we’re looking for is good data. In healthcare, you’ve heard about how there are meta-studies going on that are just analyzing the results of other studies? It’s important for us to do that as underwriters as well, so we aren’t reliant on a single source of information, even the very high-quality ones, or other places where we have detailed information that can help us. We look for confirmation across a number of sources. The key skill that data scientists have is not only in knowing where to look, but how to verify, so that we’re not being beholden to the trend of the day. It’s important for underwriters to be in the market and to stay in the market, and so, in a cycle that is measured in hours, not in years, our customers and brokers rely on the stability of our underwriting presence. We need to evaluate information and make changes gradually. This is an industry where presence and fortitude are required.

That’s where a company like Zurich, with its strength and stability, with its leadership and its commitment to people and their augmented skills, through technology and data science, will succeed, and do so by making our technical capabilities a competitive advantage.

TNA: Across the value change of insurance for the end user—the client—the ultimate insured, do

you see the technology and the data sources shared? In the future, how do the broker and the insurance provider work together to build a better risk management program or insurance layering program for the ultimate insured?

Geno: I’m a strong believer that a customer, especially a large commercial customer, values the tripartite relationship among their risk managers, a broker or an agent, and an underwriter and an insurance provider. I think each part in that equation has a strong, meaningful, and enduring role to play in the evaluation of business risk and its transfer. Zurich has long stood for reinforcing the tripartite relationship. Brokers have accessed some of the technology tools and know their customers well. Underwriters, of course, have access to a field of loss information and a field of history that is beyond any particular book of business. And so, it just makes sense for our customers that all of us work together in order to deliver the best result and the best insurance solutions for them. I view this as being a team member—one that our customers value.

TNA: We touched on augmenting the capabilities of the underwriter. There seem to be more people studying math and actuarial science coming into insurance and realizing after a time that actuarial science isn’t for them. They may discover the field of study is too difficult. Maybe they had a hard time passing one exam and know there are nine others they must pass. From your perspective, are those people still valuable in the insurance marketplace?

Geno: Absolutely, everyone in insurance—besides needing to be relationship-driven—needs to be quantitatively literate, or as I like to call it, “numerate.” You do need to understand how accumulations work and how premium can be calculated. You need to understand what the right technical price is and what the walk-away price is

to charge for risks. Those are essentially quantitative or numerate features of our business. The actuary, the data scientist, the mathematician—all of these roles—I like to think of them more in terms of skill. The science of insurance participates in this center between being numerate and quantitatively skilled, which historically, the actuarial profession has been extremely good at giving us. There is access to new and innovative data sources and statistical methods, and a whole army of data scientists coming into the market that can supplement and work with these sources.

We at Zurich find that the partnership between data scientists and traditional actuaries can be very valuable. Finally, underwriters who understand the “people” side of the business, understand the risks, and really understand the industry of the insured, are so important. It is the trifecta of competence. That intersection of quantitative, numerate actuarial skill, data science, the acquisition of new data sources, statistical analysis, and insurance and business literacy in the industry is the recipe, in my mind, that makes for successful risk transfer. Few companies are able to achieve that sweet spot—where technical excellence really becomes a competitive advantage. So, yes, I’m a strong believer and proponent of the actuarial profession and an even stronger proponent of the actuarial skill set and the numerate skill set that more of us should be involved in.

TNA: What is the importance of fundamentally knowing the policy and knowing what is covered, what is not covered, and then how to modify those coverages through endorsements and forms?

Geno: It’s a critical component of how to be a technically excellent company and of serving the risk needs of our customers. In an age where words mean things, especially to lawyers, you need to be able to understand what risks you’re assuming. The principle of insur-

“That intersection of quantitative, numerate actuarial skill, data science, the acquisition of new data sources, statistical analysis, and insurance and business literacy in the industry is the recipe, in my mind, that makes for successful risk transfer. Few companies are able to achieve that sweet spot—where technical excellence really becomes a competitive advantage.” ance, as you know, is aggregating risk across homogenous and similar, statistically significant risk types. In a world that puts increasing value on specialization, it is often difficult to find the homogenous and statistically significant portfolios, but we still need to find them, or the principles of insurance don’t work. So as we look at some of the things you mentioned—the endorsements and form coverages, what is covered, what isn’t—you need to be able to build portfolios of these risks so that the principles of insurance can operate. Then, when a customer has a loss, help is available. That’s what we’re in business for—we’re in business to help our customers when they experience an adverse event. I tell my daughters all the time, “When daddy goes to work, he’s helping people and companies protect themselves from risks like hurricanes and tornadoes.” That’s what gives me so much energy Continued on page 18.

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17

Underwriting

…continued from page 17.

for my job. You still need to build homogenous pools of risk, which means that a one-off policy with individual manuscript language, while important in some cases, isn’t the way to build a portfolio. You need to be able to put it all together, and that’s the job of the underwriter and the portfolio manager.

TNA: If you were talking to someone either going into college, graduating from college, or changing careers, what skill sets would you want to see in that individual to consider them as someone who could become a part of the Zurich underwriting team?

Geno: I was just asked that question by one of our trainees! Zurich has one of the largest underwriting trainee programs in the industry.

We bring in people right after college and tell them, “You can be very successful here as an underwriter.

We will give you the tools and access to the specific industry resources you need.” But let me tell you what I look for—first of all, are you an intellectually curious person? Do you want to understand how things work? Someone with a nontraditional background, like engineering, can really succeed as an underwriter because intellectual curiosity is very important. Unless you really understand how an industry works, how it makes money, how loss is aggregated, it’s difficult to transfer risk. The second thing I look for is problem solving ability. Because when our customers have a problem, they are looking at resources, and their brokers and underwriters are there to solve that problem.

And there’s no script. There’s history—but it’s not a script. Despite what I said about homogenous risk groups, companies are unique. The kinds of large companies that we insure are unique in their operations, unique in their supply chain, and unique in their risks. They have different kinds of risk problems.

We need problem solvers who are able to identify what the underlying problem is, be able to articulate it

18 Resources | Summer 2017

well, disaggregate it into its components, and help a customer understand what parts of it they can deal with themselves and retain, and what parts of it they can transfer.

We need not just intellectually curious people, but also problem solvers. Finally, I need people who are relationship people, because this is not going to be an industry run by computers. I need individuals who can have a conversation about a problem and its cause and its solution and not just be a technical expert. Those are the three things I’m looking for in an underwriter— intellectual curiosity, problem solving, and an ability and desire to be with people and be in the market.

need to progress their career at Zurich and in the industry.

TNA: There has been a negative connotation occasionally with consulting companies in relation to their industry clients. How has it been for you to work on the consulting side and then join the company that you consulted for, trying to implement the things you were advising them to do from the other side?

Geno: It’s been awesome. I don’t want to misrepresent either the consulting industry or the insurance industry, with just one person’s experience. Zurich was a client I worked with for ten years before I

“…once people come into the industry— sometimes just to hold down a job—they realize how fascinating it is, and how intellectually curious problem solvers, who are relationship-driven people, can have a lot of professional and personal satisfaction in this industry…”

Zurich also has an apprenticeship program. We are trying to be much more intentional about attracting talent from various backgrounds into the industry, given the changing demographics of our workforce in the U.S. and globally. We’ve established the first-of-its-kind U.S. apprenticeship program for the insurance industry that resembles a program that has been successful in Switzerland for many years now.

We’re hiring and training 100 student workers by 2020. We’re giving them the opportunity to get trained in insurance skills over the course of two years. When they complete the program, they leave with an associate’s degree, no additional college debt, and the skills they

joined the company. When consulting with Zurich, I really did feel like I was a part of the company and understood the company well. I had a deep respect for Zurich and how it stood in the industry. I had a good view of many companies in the industry during my time as a consultant. I learned many things when I came to Zurich.

First, I learned that it is much more difficult to achieve movement in an organization of 55,000 people!

The change management portion of business operations is something different we have to deal with. The second thing I have realized is that, in consulting, you’re able to work on one problem at a time and solve it thoroughly and well and com-

pletely. This provides a lot of satisfaction, as you roll through one problem at a time. Well, that is not the way most companies work. Multiple problems have to be addressed at the same time. I’ve found it’s much more often the case that being generally correct is more important than being precisely right, but late. One thing that I can tell you about precision is that the more you get into it, the more you know that precision will actually fail in the end. So, getting people to move around the “mostly correct” solution is much more important than spending a lot of time on the absolutely precise one. This is something the industry can learn.

Historically, insurance pricing—risk selection and reserving, for example— have been oriented around a level of precision that any one of us would probably say is overly precise. And the key is that both risk selection and pricing are necessary for the transfer of risk. It’s an important lesson to learn that precision helps to a certain extent, but it’s much more important for us to be generally clear on our strategies and get people to move in the same direction. I found at Zurich a culture that embraces people with diverse backgrounds, including the kind of diversity that is from outside the industry or outside of the typical insurance career track—case in point being me!

TNA: Do you have anything that you do for fun—hobbies or any unusual talents?

Geno: I’m going to sound very geeky.

I’m a big reader; I love reading—and not just reading about insurance, although I do like to read about insurance. I like to read about a variety of other things. My wife laughs at me because she knows that what I do to relax is to pull out a good philosophy quarterly or publication of the kind that I used to send article submissions to. I keep up with the discipline.

I like to sail. I don’t know if these count as unusual talents or hobbies, but there is work and my family. My family is the most important thing in

my life; the work is what I spend a lot of time doing outside of my family, and it leaves little time for other hobbies. I try and give back to my community. I was formed in the church and by the church. I’m still a practicing Catholic, and my wife and I are very involved with our local parish. I also try and give back regionally, nationally, and internationally to the church. I’m the Vice-Chairman of our school board in the Archdiocese of Chicago, and I’m a member of the finance council that advises the Cardinal in Chicago on financial decision making for an institution that helps millions of poor people every year. I’ve been involved in the Holy See, helping some of the Cardinals in the Vatican think through some of the management issues and risk issues associated with the church. That’s the way I give back—and maybe that is an unusual talent. I like doing this kind of endeavor; I like putting the gifts that I’ve been given to the service of the people who need it. I think that reflects some of Zurich’s involvement in the community, too. Zurich has a commitment to being present to our local and global communities, not just as a business, but as a socially responsible player.

TNA: Is there anything that we didn’t address in this interview that you would like to touch on?

Geno: I just want to convey in this interview a sense of the positive energy of this time that we are in. There are amazing professional and personal opportunities. Historically, the industry has not been good at attracting people with a diverse set of talents. I think that insurance is one of the most fascinating things you can do in business in general. It gets a bad rap sometimes. After all, few little kid say, “I want to be an insurance agent or underwriter when I grow up.” But once people come into the industry—sometimes just to hold down a job—they realize how fascinating it is, and how intellectually curious problem solvers, who are relationshipdriven people, can have a lot of professional and personal satisfaction in this industry, as I’ve been fortunate enough to discover and have. n

President William T. Hold, PhD, CIC, CPCU, CLU Publisher/Senior Art Director Becky Keeling bkeeling@scic.com Department Editors Beverly A. Messer, CIC, CRM, CISR bmesser@scic.com D. Darelle White III, CIC, CPCU dwhite@scic.com Elsa C. Sanchez, CIC, CRM esanchez@scic.com JoAnn M. Clarke, CIC, CRM, CISR, CSRM, ARM, ARe, AAI, CPIW jclarke@scic.com Editor Donna Loughran Contributing Editor Carol Crysup Contributing Designer Chuck Lickert Resources is published by The National Alliance for Insurance Education & Research, P.O. Box 27027, Austin, TX 78755-2027, 800-633-2165, Fax: 512-349-6194, Internet: TheNationalAlliance.com, email: alliance@scic.com. At present, Resources is available to dues-paid Certified Insurance Counselors (CICs), Certified Insurance Service Representatives (CISRs), Certified Risk Managers (CRMs), Certified School Risk Managers (CSRMs), Certified Personal Risk Managers (CPRMs), and affiliates of The National Alliance Research Academy.

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The National Alliance Standards of Conduct: scic.com/about/Standards_of_Conduct

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RISKY BUSINESS

| FSU GRADUATE STUDENT TEAM

(Detailed on page 25)

Automated Vehicle Technology Current and Emerging Risks—an Academic Perspective

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hat once only existed in the creative minds of science fiction writers is fast becoming a reality—fully automated vehicles. This research studies emerging risks inherent in this exciting new technology.

Many terms are used to describe the next frontier in automobile innovation. Whether we use the term driverless, selfdriving, autonomous, or robotic, in the next decade we are One of the primary goals of The National Alliance Research Academy is to encourage students in college insurance and risk management programs in their academic endeavors. To achieve this objective, The Academy has pioneered relationships with colleges and universities across America and o’ffers aspiring college students the opportunity to use approved university insurance and risk management coursework to earn the University Associate CIC (UACIC) or CRM (UACRM) designations, which, in turn, provide credit toward their CIC or CRM. One of our longstanding academic relationships is with Florida State University, and in 2012, FSU named its topranked risk management and insurance program the Dr. William T. Hold/The National Alliance Program in Risk Management and Insurance (recently awarded the Global Centers of Insurance Excellence [GCIE] designation by the International Insurance Society). The Academy’s affiliation with FSU provides additional value and recognition for your designations and strengthens our collective academic base.

We are proud to showcase here the academic efforts of the FSU students who contributed this article for Resources magazine.

22 Resources | Summer 2017

sure to witness significant advances in automated vehicle (AV) technology. Like most advances in technology we have witnessed over the past 20 years, AV advancement will not only cause disruption within the automobile industry but will also influence changes in data security management and the legal, legislative, and highway safety landscapes. Managing the risk of these changes will pose significant challenges for automobile manufacturers, insurers, courts, legislative bodies, and consumers.

In a recent Wall Street Journal article, Scott Keogh, President of Audi of America, Inc., highlighted an immediate challenge in software development. In his commentary, Mr. Keogh noted that, traditionally, software companies “fail fast” by experimenting in the real word and working out problems on the fly through software patches and updates. This process is not feasible in the world of AVs as automakers face the daunting task of establishing public acceptance and credibility (Keogh, 2016). This nuance in software development is only the tip of the iceberg in managing the multitude of risks that will need to be addressed as AV technology comes online over the next decade.

While there is much work to be done to address emerging issues in risk management associated with AVs, there are more prominent risks associated with cyber risk, liability risk, legislative risk, safety risk, and societal risk that should be examined closely.

Cyber Risk Just a few years ago, the thought of AVs becoming commercially available seemed like science fiction, but the pace of innovation and technological advancements have made this reality. In a 2016 Munich Re survey of 100 risk managers from a variety of industries, fifty-five respondents viewed cyber security as their top concern regarding AVs (Munich Re 2016).

Obviously, AVs require numerous and incredibly complex automation systems, and these systems are vulnerable to cy-

berattack. These threats may come from a variety of sources: political activist hackers, nation-state hackers and intelligence agencies, extremist groups, and criminals (Kiss, 2016).

In response to the wide variety of threats to cyber security, a group of automakers and technology providers have formed a coalition to share information with the common goal of improving cyber security by developing industry standard best practices (Ismail, 2016). This action took place after some notable hacks occurred, such as the 2015 widely publicized white hat hacker’s remote disabling of a Jeep through a security flaw in Chrysler’s infotainment system. Additionally, Tesla has offered a “bounty” to white hat hackers who could expose flaws in Tesla’s automotive information systems. In 2015, one friendly hacker group exposed six vulnerabilities in Tesla’s systems.

Most statues currently hold the vehicle’s owner responsible for accidents. In order to be indemnified by the manufacturer, the owner must prove the manufacturer was negligent.

Most risk managers surveyed do not think there is much likelihood of widespread use of AVs in the next five years, as evidenced in the Munich Re survey which showed that 65% of risk managers have made no preparations for AVs (Munich Re 2016). That said, there does seem to be a strong belief that AVs will eventually become much more mainstream, and the impact is expected to be quite substantial.

The cyber risk related to AVs is considerable, and there will be a significant need for insurance. Currently, cyber risk generates approximately $2 billion of premium in the US, and that number is expected to grow to $7.5 billion of US premium by 2020. AVs will play a key role in this growth (Kiss, 2016).

The Insurance Information Institute estimates that 25% of vehicles sold in 2030 will be autonomous. Tech companies, such as Google, expect that number to be larger and available in the market even sooner (Kiss, 2016). Clearly the cyber risk for AVs will create new types of exposures and spark product opportunities within the insurance industry.

Liability Risk One of the key elements surrounding AVs is the issue of liability—still in its infancy stage as the economy, legal system, and public are introduced to this new transportation mode. While manufacturers market AVs as safe and even accident-free, in truth there is no guarantee that AVs are free from mishaps.

Just last year a person in Williston, Florida, was involved in a fatal crash when a semi-truck turned in front of a Tesla Model S AV operating in autopilot mode (Deamer, 2016). According to a Tesla news release “neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied.” Tesla further noted, “had the Model S impacted the front or rear of the trailer, even at high speed, its advanced crash safety system would have prevented serious injury as it has in numerous other similar incidents” (Tesla, 2016). This fatal crash highlights some limitations of relying too heavily on AV technology in which development is still in its early stages. Another incident was not as severe but had the potential to be. A Google self-driving car was involved in a frightening collision—one in which another vehicle ran a red light and T-boned the AV (Hartmans, 2016). Fortunately, the driver suffered no injuries; however, both vehicles involved in the crash were totaled.

On a state government level, lawmakers in Florida have taken proactive action in the establishment of laws governing AVs. In 2015, Florida passed a statute stating that “…a person shall be deemed to be the operator of an autonomous vehicle operating in autonomous mode when the person causes the vehicle’s autonomous technology to engage, regardless of whether the person is physically present in the vehicle while the vehicle is operating in autonomous mode” (Fla Statute 316.85). Under this statute in the state of Florida, the person that engaged the AV technology is deemed to be the driver, even if the person is not in the vehicle.

In the evolution of AVs and laws governing liability in their operation, semiautonomous features are further complicating the legal landscape. Semiautonomous features are typically initiated by the driver when, in the driver’s judgment, the maneuver is safe. However, as pointed out by Mike Ramsey in a Wall Street Journal article, having drivers initiate functions such as automated passing by activating the turn signal could help auto makers clear legal and regulatory hurdles.

Ramsey notes, “a driver theoretically acknowledges road conditions are appropriate for a passing maneuver and therefore takes responsibility for the consequences” (Ramsey, 2016).

Such features could serve as a solution to questions of liability for AV manufacturers such as Tesla Motors.

The Association of British Insurers (ABI) stresses that “cars of the future will need to collect a basic set of core data to prevent drivers being unfairly blamed if technology goes wrong.” The ABI contends that data regarding the autonomous systems and driver interaction should be recorded—not Continued on page 24.

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Automated Vehicle Technology…continued from page 23. specific driver performance (Insurance Journal, 2016). Further complicating questions of liability risk, there is the issue surrounding vehicles that were not originally manufactured to be AVs but had systems installed after the vehicle was sold.

In this case, the manufacturer of the driverless technology could be held liable. However, setting an early trend in establishing clarity to this issue, in 2016, Florida lawmakers passed a statute that exempts the original manufacturers from liability when a third party converts a vehicle to AV technology and a defect in the conversion equipment or installation causes injury (Fla. Statute 316.86).

Until the regulatory piece of the puzzle has been generally accepted, risk managers need to be aware of the gray area that surrounds driverless vehicles. Most statues currently hold the vehicle’s owner (which in most cases is the primary driver) responsible for accidents. In order to be indemnified by the manufacturer, the owner must prove the manufacturer was negligent. Risk managers must be conscious of how the current liability laws are worded and interpreted before integrating AVs into their fleet (Insurance Journal, 2015).

If easily accessible international standards were established, insurance carriers would be able to use those guidelines to determine liability, provide data to car manufacturers to enhance safety, and reduce claims processing costs—overall, resulting in reduced insurance premiums. Until such standards are established, risk managers will face the challenges of navigating the fluid legal and regulatory landscape of AVs.

Legislative Risk In late 2016, the Federal guidelines on AVs were revealed. The government has “opened the door” for driverless vehicles with the caveat of “strong safety oversight” (Kang, 2016). Not only did the government embrace this new technology, $4 billion of the federal budget was set aside for research and development. President Obama promoted AVs by stating, “they could save tens of thousands of lives a year, and the new policy is flexible and designed to evolve with new advances” (Kang, 2016). While the Federal government may have given the thumbs up to the AV industry, there is another hurdle to cross—the public.

Noting that public safety must be delicately balanced with the commercial interests of these large companies that produce this technology, four main areas are addressed in the guidelines: 1) a 15-point point safety standard for the design and development of AVs, 2) a call for states to come up with uniform policies applying to AVs, 3) clarification of how current regulations can be applied to AVs, and 4) development of new regulations on the technology (Kang, 2016).

As of now, whether AVs are welcome in each state is left up to the states to decide. As of mid-2016, only nine states and DC have passed laws addressing AVs—most of these states preclude truly driverless vehicles and require a back-up human driver behind the wheel, and only California, Michigan, and Nevada allow testing of these vehicles (Reynolds, 2016).

States that are silent on AV’s are subject only to regular traffic

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and motor vehicle laws. These silent states will have to determine how to deal with unattended vehicle laws, hands-on steering wheel requisites, seatbelt laws, and driver’s license requirements (Reynolds, 2016). This is merely scratching the surface of the complexity and uncertainty of interpreting existing state laws, which presume human drivers to permit the operation of AV’s. Florida is the only state that allows driverless autos and the statute only requires that a remote operator have the ability to take control of the vehicle in the event of failure (Fla Statute 316.85).

Safety Risk Offering further analysis of the fatal Williston Florida accident involving Tesla AV technology, Dr. Alexander Hars discusses “fundamental flaws” in risk analysis scenarios where a rapid reaction is required in a crisis. Dr. Hars surmises that

…AVs will not do away with the risk of vehicle accidents and physical injury or loss of life entirely because there will always remain an unpredictable human element… further research in how drivers utilize AV technology would have shown that: 1) there are many critical situations where a handoff from the vehicle to the driver cannot be carried out quickly enough to avoid catastrophic consequences and 2) there are many situations where a driver in supervision mode is not able to swiftly detect a lack of capability or misbehavior by the AV software. Hars notes that these are important aspects because when a vehicle drives autonomously for many miles, its passenger will not be as alert as they would be if they were in control. Developers of AV systems simply cannot expect passengers to be fully attentive and ready to take over in a split second. They also cannot expect passengers to understand and immediately correct technical malfunctions or errors (Hars, 2016).

While transitional flaws to AV technology will occur, proponents for vehicle automation contend that one of the greatest benefits this new technology provides is improved safety that will ultimately save lives. According to Aon (2014), AVs would eliminate the need for the human driver, and, therefore, “do away with the risks introduced by continuous human decision-making and driver distraction.”

Unfortunately, AVs will not do away with the risk of vehicle accidents and physical injury or loss of life entirely, because there will always remain an unpredictable human element (e.g. pedestrians, bicyclists, skateboarders). Also, machines, much like human beings, are known to fail—even those with the most sophisticated technologies. AVs require complex

systems that may be vulnerable to cyberattack or system failures that will lead to accident, injury, and loss of life.

Societal Risk Perhaps one of the most significant risks of vehicle automation safety is often overlooked—the social implications of these driverless vehicles. Imagine the following scenario as presented by Jacqueline Howard of CNN: “You’re riding in a driverless car with a loved one. It’s cruising down a one-way, single-lane road with a barricade to the left and a wall to the right. Just a few feet ahead, three pedestrians are hurrying across a crosswalk even though it’s flashing a red signal. The driverless vehicle’s wheels are faster than the pedestrian’s feet, and a collision is inevitable.” (Howard, 2016).

In this scenario, critical questions come to mind: What should the vehicle do? What should it be programmed to do? Understand that this vehicle, although “smart,” has no emotion or reasoning abilities. Should the vehicle hit the barricade or the wall, potentially injuring the passengers to save the pedestrians? Should the vehicle hit the pedestrians to protect its passengers? Where should its loyalty lie? This is just one small example of the social and moral dilemmas that AV technology must solve. Risk managers should thoroughly research and understand these social implications and the potential effect on their industry and their company’s potential liability, both financial and reputational.

Conclusion While AVs will ultimately bring many improvements in the areas of safety, convenience, and efficiency as the technology comes online, risk managers will encounter immense challenges. Developers of this technology will face short and long-term trials of developing and maintaining reliable software. Owners, drivers, and insurers of AVs must adapt to

Crowder

Joines

McLeod

Schmitt

About the Authors: Shannon N. Crowder; Robin S. Joines; Brian R. McLeod, CPA; Liz Schmitt; and Casee Walley This article is a collaborative effort of five risk management students who met while participating in the Florida State University Master of Science in Risk Management and Insurance (MS-RMI) program. It draws on the expertise of the group and their unique experiences, with each member bringing knowledge derived from varying backgrounds, ranging from the insurance and claims industry, the power industry, and the legal field.

Walley

changes in liability risk, along with maintenance and repair costs. Lawmakers will be forced to be proactive in developing standard legislation that will create an environment for consistent application of laws, rules, and regulations governing AVs. Manufacturers must strive to get things right the first time as they face high pressure to develop technology that will meet the expectations of society and the driving public.

With the multitude of risks, both known and yet unknown, risk managers must be proactive in managing current risks but must also be forward-looking to adapt to the many emerging risks that are sure to develop with this new technology. n

Reference List Aon. (2014). “Autonomous Vehicles—The Risks and Rewards of the Future of Personal Transportation.” Retrieved from http://www.aon. com/attachments/risk-services/Automotive-Practice-AutonomousVehicles.pdf Howard, J. (2016). “Driverless cars create a safety ‘dilemma’: passengers vs. pedestrians.” Retrieved from http://www.cnn. com/2016/06/23/health/driverless-cars-safety-public-opinion/ Keogh, Scott. “The Dangers of ‘Self-Driving’ Car Hype.” The Wall Street Journal, Sept. 19, 2016, Retrieved from: http://www.wsj.com/ articles/the-dangers-of-self-driving-car-hype-1474327725 Munich Re. (2016). Most companies unprepared for emergence of autonomous vehicles, according to Munich Re survey. Retrieved from: https://www.munichre.com/us/property-casualty/press-news/pressreleases/2016/av/index.html Kiss, Jemima. (2016). “Your next car will be hacked. Will autonomous vehicles be worth it?” The Guardian. Retrieved from: https://www. theguardian.com/technology/2016/mar/13/autonomous-cars-selfdriving-hack-mikko-hypponen-sxsw Ismail, Nick. (2016). “There remains one overarching concern in the race to autonomous vehicles: data security.” Information Age. Retrieved from: http://www.information-age.com/future-driverlesscars-data-security-123461877/

Reynolds, Michael. (2016). “A State-By-State Guide To Driverless Car Regulations.” LAW360. Retrieved from: https://www.law360.com/ articles/819698/a-state-by-state-guide-to-driverless-car-regulations Kang, Cecilia. (2016). “Self-Driving Cars Gain Powerful Ally: The Government.” The New York Times. Retrieved from: https://www. nytimes.com/2016/09/20/technology/self-driving-cars-guidelines.html Hars, Alexander. (2016). “Fatal Tesla accident exposes fundamental flaws in levels of driving automation framework.” Retrieved from: http://www.driverless-future.com/?p=955 Deamer, Kacey. (2016). “What the First Driverless Car Fatality Means for Self-Driving Tech.” Retrieved from: https://www.scientificamerican. com/article/what-the-first-driverless-car-fatality-means-for-self-drivingtech/ Tesla. (2016). A Tragic Loss. Retrieved from: https://www.tesla.com/ blog/tragic-loss Hartmans, Avery. (2016). “One of Google’s self-driving cars was involved in an accident that sent its driver to the hospital.” Retrieved from: http://www.businessinsider.com/google-driverless-car-accidentdriver-hospital-2016-10

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Updates on new opportunities and hot topics The National Alliance is developing to help you stay competitive, today and tomorrow.

A Gala Night and Proud Occasion for the Certified Personal Risk Manager (CPRM) Designation The CPRM Inaugural Conferment Ceremony and Reception honoring CPRM designees was held at the Rosen Centre in Orlando, Florida, on February 28, 2017.

In introductory remarks, Richard Kerr, CIC, ARM, founder of the Council for Insuring Private Clients (CIPC), spoke of the unbridled enthusiasm necessary to launch such an ambitious program as CPRM. Dr. William T. Hold, CIC, CPCU, CLU, President of The National Alliance, officiated and praised the thirty-two Charter CPRM members—the first to earn this distinguished designation—and the fourteen additional CPRM designees who joined them in the honor at this special conferment event.

Dr. Hold observed, “We congratulate you on your conferment as a Certified Personal Risk Manager—it is a moment we approach with the highest appreciation for what you have accomplished. Your individual achievement signifies a landmark—you are instrumental in shaping the program, in setting the standard, and in establishing the future for personal risk management professionals.”

Dr. Hold honored each CPRM designee individually by welcoming them to the stage and congratulating them on their achievement. A champagne toast was given by Beverly Messer, CIC, CRM, CISR, Senior Vice President of Academic Development at The National Alliance. As glasses were raised in celebration of the Charter and new CPRM designees, she said, “Two and half years ago, we started this journey together, and we’ve really been looking forward to this CPRM inaugural conferment ceremony. Here’s to great relationships, to new and renewed friendships, to a wonderful industry, and most of all—tonight—to CPRM and our amazing CPRM designees!”

A warm reception was held afterwards in recognition of the designees and all attendees of the CIPC Conference. Hundreds of energized insurance and risk

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management professionals filled the Rosen Centre with excitement and discussion about the future of the Certified Personal Risk Manager Program and the bright future of the industry.

One Charter CPRM designee said, “The CPRM Program has been an unbelievable experience for me in terms of knowledge, but also in terms of building relationships with industry leaders. I’m a young producer, so the networking part of this program has been powerful for me. However, it has benefited not just myself. I get to take these ideas, concepts, and connections back to my firm. The CPRM Program has been extremely valuable for us.”

One seasoned veteran expressed his belief in the program, “I’m a new man. I had left the industry, but the CPRM Program and its expert faculty and facilitators encouraged me to discover the fascinating world of high net worth and affluent clients. I’m back in the business, and I’m feeling renewed.”

The CPRM Program is the result of an effort led by The National Alliance. The Council for Insuring Private Clients (CIPC) approached The National Alliance with the idea of creating a first-class education and

designation program that would be challenging and well recognized, enabling those serving high-profile and affluent clients to provide excellent, professional risk management and insurance protection at a high level. An Advisory Council comprised of the largest and most recognized insurance carriers (AIG, Chubb) that are writing high net worth business, as well as top agencies, brokers, and underwriters from across the country specializing in this niche, were instrumental in helping shape the program.

The first CPRM course was launched in October 2014. All five CPRM courses have received “excellent” evaluations

across the board from participants.

CPRM courses are scheduled in major cities across the country. To view the schedule and register, visit our website at TheNationalAlliance.com.

Following is a list of the 32 Charter CPRMs and 14 additional CPRM designees who were recognized at this inaugural conferment ceremony.

Charter CPRMs: Jaclyn Aguado, CPRM Michael J. Alvarez, CPRM, CPIA Deloss D. Buseman, CIC, CPRM Terri L. Fisher, CPRM, CISR Ernie Holmes, CPRM, AAI Jocelyn R. Howard, CIC, CPRM, CISR Courtney Nicole Kerr, CPRM, CISR Tia Marie Mongno, CPRM John Zachary Moores, CPRM Kimberly Nager, CPRM, CISR Linden Chalfant Nelson, CIC, CPRM Kathryn A. Norris, CPRM Nicole Nouhra, CPRM Kimberlyn Inhae Pak, CPRM Tracy L. Pitre, CPRM, CISR John-Michael Politte-Corn, CIC, CRM, CPRM Sharon Posman, CIC, CPRM, CISR, AFIS Valerie J. Privett, CIC, CPRM, LUTCF Robert J. Ray, CIC, CRM, CPRM Andrea K. Reyes, CPRM Susanne M. Roberts, CPRM, CPCU Anthony Ruidiaz, CPRM Jessica Sailor, CIC, CPRM, CPIA Laura Rice Sherman, CPRM, CAPI Wendy Solei, CPRM Stephanie Staley, CPRM Jason Lee Stanfield, CIC, CPRM Kathleen M. Stinson, CPRM Jordon P. Street, CPRM Katherine A. Turk, CIC, CPRM, ARM Jennifer Vanderlip, CPRM Kristina Zebratski, CIC, CPRM Additional CPRMs recognized: Desiré J. Albion, CIC, CPRM, AAI Ronald R. Assise, CIC, CPRM Anna M. Brusco, CIC, CPRM Keleigh Buchanan, CPRM Tami L. Chartier, CPRM Thomas P. Danaher, CPRM, CLU, CPIA, AAI Travis M. Gensler, CIC, CPRM Carter W. Hall, CIC, CRM, CPRM Patti Lynn Hensler, CIC, CPRM, CISR Kathy Walton McGarry, CIC, CPRM Denise D. Metz, CPRM, CPSR Stephanie Perkins, CIC, CPRM, AAI Cynthia A. Stanley, CPRM, CISR Hope Wolman, CPRM

Announcement from our Online Team:

We’ve Moved—into Our New Online Learning Environment!

Since the beginning of the year, The National Alliance Online Team has been hard at work, transitioning courses into our new learning environment for online learning, and the preliminary product launch has been fantastic! There’s a new look and feel for both Instructor-Led and Self-Paced Online Courses.

We’ve received great feedback from participants about the new interface and the responsiveness of the system. And you will love this—not only can you conveniently access the courses from any computer—from home or work—you can also use a tablet or your cell phone! Additionally, you’ll find the tablet and phone environment just as responsive as that of the computer experience.

The premier CIC and CRM InstructorLed Online Courses have already been moved into the new learning environment. You’ll be happy to know that you’ll encounter the same quality, high-level curriculum and inspiring, top instructors in your online experience. Participants attend live webinar sessions in addition to completing required readings and optional self-quizzes, and all of these work great in the new environment. These online courses continue to be packed with relevant examples and scenarios and explain the technical material in

understandable, concrete business terms.

All nine CISR SelfPaced Online Courses are also now available in the new learning environment.

Currently, CSRM courses are being migrated into our state-of-the-art interface and are expected to become available in this context by mid-June. The Self-Paced Online Courses still combine technical knowledge with practical, real-world case examples, quality curriculum, and professional expertise. In addition, the helpful quizzes, exercises, navigation map, course mentor, Insurance Forms Library, and structured learning objectives with linked assessments continue to be there to help you learn and study—and you still have the luxury of 60 days to complete a course!

We think you will find the new learning environment user-friendly, with an easyto-use, intuitive interface. The navigation controls are immediately understandable, and the core navigation design allows you to move freely within the course structure, going to any section you want. You can’t get lost—the course setup will let you know what required materials you need to complete before you take the final exam.

So check out our new online learning environment and take control of your education with the convenience and ease of online courses— either Instructor-Led or Self-Paced!

All National Alliance online courses now use the same platform and are integrated with our website, so there’s more information available at the user’s fingertips.

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One CISR’s story of determination and accomplishment in the face of great personal challenge.

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articipants face different kinds of personal challenges while seeking the completion of the designation programs—so why do they persevere in this pursuit?

What meaning do everyday—yet extraordinary—people find in continuing education? It is the quality of the people who become CISRs, CICs, and other proud designation holders that illuminates and enhances each designation from within. It is dedicated and inspired people, like Janice McNary, who continue their dreams, despite circumstance, and fill this wonderful, people-oriented industry with greatness. And now… here is Janice’s special story.

Janice McNary has over 20 years of experience in the insurance industry. She began her career in life insurance, moved to the health and welfare sector, and finally settled in the property and casualty arena, which is the predominant focus of her current career. She has worked for other Fortune 500 insurance companies, but when the opportunity opened up to work for Willis Towers Watson in Florida, she jumped at the chance. Janice relocated to Florida from Atlanta, Georgia, where she was employed at the time.

Janice has worked at Willis for about a year now. She is a Client Service Representative—which she describes as similar to a Client Account Manager position. She explained, “I am responsible for renewing and placing business for a book of business, as well as marketing for new accounts, overseeing billing, and providing any other insurance services that clients need.”

Janice said, “I became interested in earning two key designations when I started working in the commercial insurance industry—the CRIS and CISR. While at my previous job, I worked toward the CRIS (Construction Risk Insurance Specialist), but I moved to Florida before I could complete that program. I still plan to obtain this credential, as well as others. Continuing education is a priority for me.

When I was younger, I put my educational pursuits on hold for the concerns of parenthood and other life milestones. Several years ago, I realized the value of having educational goals and the satisfaction experienced in meet

ing them. In 2012, I went back to school and finished my Associate’s Degree in Healthcare Administration.

At work, I saw how designations could transform a career—not just in the respect they garnered, but in growing a book of business. The technical knowledge gained in working toward these credentials is a valuable commodity, and clients realize how that knowledge benefits them.

When clients see that a designee knows what they are doing, a strong foundation of trust is built. When I came on board with Willis, one of their requirements was to gain the CISR designation—a goal I aspired to already.”

During her course of study to complete the CISR program, Janice had what she thought was a minor medical issue emerge. She shared, “It was just a boil under my arm. Like most people, I went to a drugstore and found an over-thecounter salve to take care of it. However, the boil didn’t go away. In consulting with doctors about it, I was referred for a mammogram. After that test, I received the call that everyone dreads. A lump was identified, and my doctor wanted it biopsied. Being a person of faith, I went into prayer mode immediately and called my sister who is a seven-year breast cancer survivor. She reassured me that it was probably nothing—that the biopsy was just a precautionary measure. While waiting for the test results, I studied diligently for my CISR exam because I wanted to pass it and have an important goal out of the way.”

Janice said that it was difficult at times to continue to study—not knowing what to expect from the biopsy. “My family and I had just moved to Florida at the end of May. I had only been with Willis at this point for about 90 days.

I was very stressed and worried about losing my job because of the time I had already taken off to attend doctors’ appointments. I decided to let my company know what was going on with my health. If they let me go, I would just have to accept it and trust in God to make a way.

“I have to honestly say that my main manager, Kim Arvanitis, and director, Teresa Fillmon, at Willis were extremely understanding and supportive. They stuck by me as I went through the diagnosis process. I did share my health situation with my immediate coworkers because we had grown close in a short period of time. I felt I needed to tell them what was going on. They would have to back up my accounts in the event that I had to be away from work for a long period of time.”

Waiting to get the results of the biopsy continued to be a stressful experience for her. Janice said, “I hate that I received the diagnosis call at work, but fortunately, I had team members around me who knew the situation and helped me through it. I realized I couldn’t be at work any longer that day; I just wanted to go home and to be with my family. There was the initial shock that this was happening to me at this time in my life. I experienced depression, but, as I said, I have a sister who is a cancer survivor, and she helped me tremendously. She lives in Illinois, and Continued on page 30.

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Passion & Perseverance

…continued from page 29.

she and one of my best friends flew to Florida within the week to attend medical appointments with me. They treated me like a queen; I didn’t have to do anything. They made sure I stayed positive and laughed often. They took my worries away—I thank God for them.”

Janice confided, “As you can imagine, having the stress of a new job, a new environment, my youngest daughter, Alice, in a new school, and now this impending health issue hanging over me—it was tough. Alice took it the hardest when she first heard my diagnosis, but she knew that she had to be there for me. She really stepped up; she waited on me hand and foot. She kissed me when I was down and gave me love. She fixed meals for me and took such good care of me. Alice is humble and sweet and is a loving, caring daughter. I want to give her the highest accolades and let her know how much I appreciate her care while I was going through the most difficult time in my life. She was and continues to be my strong support.”

Janice had occasions after some of the chemo treatments where her white blood cell count would drop dangerously low, and she could not be around the general public. Cancer patients undergoing chemotherapy have compromised immune systems that are highly susceptible to infection.

Her manager made accommodations at those times to remove her from the general team area and put her in a private space so that anyone who was sick would not come in contact with her. With this adjustment, she could continue to go into work. Even with these precautions, Janice did wind up in the hospital with a high temperature after one chemo treatment.

Willis had a group of coworkers who met regularly to encourage one another and study for the CISR exams. Janice remarked, “Because we all had such a great relationship and supported each other already with the CISR learning process, I felt comfortable sharing my health situation with them. They were very supportive and caring—I could feel

“I saw how designations could transform a career— not just in the respect they garnered, but in growing a book of business. The technical knowledge gained in working toward these credentials is a valuable commodity, and clients realize how that knowledge benefits them. When clients see that a designee knows what they are doing, a strong foundation of trust is built.”

Janice went on to explain, “When you first hear the word cancer, you think the worst. The words, ‘death or short life span,’ come to mind. I struggled with denial, anger, depression—all of those grief reactions that surface unexpectedly. It took me a while to work through them, regroup, and realize that God is with me and has the last word in my story. At that point, I decided that as long as I had my strength, I would keep living life fully.” She added, “That is why I kept at my CISR studies, because I am a determined person who believes that with God all things are possible and that the old adage is true: where there is a will, there is a way. I knew that even while I was going to have to undergo chemotherapy, I could still study, if needed, right from the chemo chair. I might feel weak afterwards, but I was still alive, and I knew I would get through it if I persevered. I wanted to prove to myself and to others that I could do the work and that I could keep going. I knew that the goal of achieving the CISR—a goal I had wanted for so long—would help move me through a present with cancer to a cancer-free future. It made me feel less handicapped.”

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their love. One of the women I work with gave me a handblown, glass breast cancer ribbon that her husband made.

I keep that as a special token. The team also gave me an inspirational book, and I read from it often. I tell my coworkers how much they mean to me, and they always ask if I need anything. Some of them have loved ones who are fighting cancer or have passed away from it. They know how dealing with this disease feels.”

Janice completed the CISR Program in September 2016.

As the day of the CISR pinning ceremony approached, she felt sad because the timing of it conflicted with her chemotherapy treatment. She said, “I worked so hard to achieve the CISR designation! What I didn’t know was that Teresa Fillmon had spoken with The National Alliance team and made special arrangements for me to receive my pin first. That was such an emotional moment for me. I felt so special and cared for—not only by Willis, but also by The National Alliance organization. That they would change the schedule of the ceremony so I could attend early really moved me—I will always remember

it. I thank them from the bottom of my heart! They showed me their great care and their awareness of the seriousness of my illness by doing that. Other friends at the ceremony, who knew what I was going through, revealed later that it touched them deeply, too.”

Janice wants her story to offer something meaningful. She said, “We all have many unknowns in our lives—new jobs or job losses, new houses, new marriages or divorces, new babies, and new illnesses. We all fear these unknowns when they first occur, but we endure and make it through them, learning by doing what makes a whole, fully lived life. If we allow fear and stress to set in, then we will never get past these challenging unknowns and become successful in life.

Cancer is my unknown, and I have decided that I will not allow it to defeat me. That is why I pray, read scriptures, and look for positive, uplifting quotes and messages; these sustain my belief that I will be okay and beat this disease.”

Janice observed, “You just never know when you share something like a cancer diagnosis with people how they will react. You are not telling them in order to gain sympathy, but to let them know where you are and for their support and positivity. It’s good for those around someone who has cancer to realize that having cancer is a mental and psychological fight, not just a physical one. As long as you have an honest, positive attitude and a loving, open faith, you will be okay and live a rewarding, happy life. No battle will be too big for you to handle. The road may get rocky, but you will make it through.”

Giving Thanks

Get the book that guides you through the challenges of hiring the right people, effectively managing their performance, and compensating them strategically.

Hiring, Managing, and Compensating Insurance Agency Personnel—published by The National Alliance Research Academy and coauthored by Jon Persky, CPA, CIC, PHR, and Jenny Foster, CIC—does all that, and more. Compiling survey results from over 700 industry participants, this 350+ page HR guide delivers valuable insider information on: • How to determine the type of employees you need and how to find them • Tips on how to interview candidates • Checking out a candidate’s background • How and what to test candidates for • Guidelines on how to terminate employees • Federal employment laws • How to handle HOT topics, including marijuana use, gender identity, and social media issues

“Personally, I would like to acknowledge my sister, Teresa French, who was and is my rock; my daughters, Monique and Alice; and my hubby, Jorden. Professionally, I would like to recognize those at Willis who show me so much support and love—not only Teresa Fillmon, Client Service Manager; and Kimberly Arvanitis, CISR, Client Services Supervisor; but also a group of Client Service Representatives that includes Lisa Jakubowski, CISR, SBCS; Judy King, AFIS, CISR; Therese Bright, AIS, CISR; Betsy Sevilla, CISR; Diana Herner, CISR; Amy Ferland, CISR; and Andrea Newman, CISR.”

• What motivates employees

Conclusion: We, at The National Alliance, are uplifted by the human stories behind people’s pursuit of our designations. Approximately 2,000 people a year become CISRs, and each one of them has a designation autobiography to share. As the CISR Program goes global, the variety and diversity of the stories increase. Willis Towers Watson alone has 1,387 CISR designees worldwide, and many employees within the company form study groups to help each other in their CE journey.

• Non-piracy agreements

Designees, we celebrate your dreams and aspirations, continued in the face of personal challenges.

You inspire us. n

• How to compensate and incentivize employees In addition, you’ll receive many customizable sample forms and lists, including: • Employment applications • Offer of Employment letter • New employee checklist • Performance evaluations • Termination checklist • Job descriptions • Employee handbook …and many more! + s&h Paperback

eBook

Resources | Summer 2017

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COVERAGE CORNER

|

BY CHRIS CHRISTIAN, CIC, RPLU

Crime Coverage

Beyond Employee Dishonesty

A

lthough some form of crime coverage is generally available as part of an insured’s property coverage, insureds’ needs related to crime have evolved beyond the basic employee dishonesty, robbery, and burglary coverages. In response to these evolving needs,

Learn More, Earn More As a part of the NEW CIC Commercial Multiline Institute, an EPL subject is included, as well as Crime Coverages & Endorsements and Cyber Exposures and Coverages. For advanced consideration of these key issues, explore upcoming James K. Ruble Graduate Seminars. MEGA Seminars also provide current approaches on these topics; at the Dallas MEGA, October 16–19, Mr. John Immordino, CIC, CRM, RPLU, will present “Cyber Liability—What Every Agent Should Know and Insurance for EPL, Cyber, and Professional Liability Exposures—Hot Topics and Trends. Additionally, two publications from The National Alliance Research Academy—P&C Insurance Essentials and Executive Liability Insurance—contain detailed sections on cyber and crime coverages (scic.com/store/publications.html).

32 Resources | Summer 2017

management liability carriers, and some monoline crime carriers, have brought more robust offerings to the marketplace.

There are two common reasons an insured might need to obtain standalone crime coverage, or look to their management liability carrier to add a crime coverage part: the need for higher limits than are readily available in a package policy and the need for coverage of theft of clients’ property.

Package carriers’ appetites and capacity in these regards vary widely. If an insured is pleased with their package carrier in all other regards, it’s much easier to place a standalone crime policy or add the appropriate crime coverage to the insured’s management liability placement, than it is to hunt down a different property market that will fit the bill. On rarer occasions, an insured will need to place crime coverage separately, due to losses or nature of operations or property to be covered.

A garden-variety crime form will cover Employee Theft (also known as Employee Dishonesty, or Fidelity coverage), theft of money or property from inside or outside the premises, computer fraud, funds transfer fraud, and loss due to fraudulent money orders or counterfeit currency having been accepted.

It’s important to note that each of these coverages must be selected or triggered. They are not generally provided on a bundled basis.

High-Tech Causes of Loss A word regarding computer fraud and funds transfer fraud, before we get into the low-tech causes of loss—many agents and insureds believe that a crime policy will cover cyber

While cyber deception certainly would appear to fall within some of the definitions in either the computer fraud or funds transfer fraud coverages, if you read the crime policy wording carefully… deception under the computer fraud or funds transfer fraud coverage part. Cyber deception is that loss which occurs when your insured’s accounts payable person receives an email or phone call that appears to be from a bona fide vendor, customer or co-worker (usually an executive), and is instructed to transfer funds to an ACH (automated clearing house) account which turns out to be owned by a fraudster. This is also known as “fake president letter fraud,” “social engineering fraud,” “fraudulent instruction,” or a host of other names.

While cyber deception certainly would appear to fall within some of the definitions in either the computer fraud or funds transfer fraud coverages, if you read the crime policy wording carefully, you will find that coverage applies to situations where systems were manipulated, or where instructions were fraudulently delivered to the financial institution. Coverage does not pertain where humans are manipulated, and in cyber deception schemes, human manipulation is the linchpin.

A crime policy may be endorsed to include coverage for cyber deception, or such coverage might be obtained on a cyber policy, but an unmodified ISO crime form does not include this coverage. Not only is there no trigger for it—the “voluntary parting” exclusion will bar coverage.

Standalone Form Features Once an agent realizes they might need a somewhat more sophisticated solution for their insured’s crime needs, it’s appropriate to turn to some of the monoline crime markets, or to those that provide crime as part of a management liability suite of coverages. Again, appetites and capacity vary, but some of the benefits you might be able to find in this marketplace are as follows:

Coverage for the insured’s ERISA bond The ERISA bond is the bond required by law to secure assets in the insured’s retirement plan. These bonds are fairly easily available from monoline markets, but can also be included in a crime policy very effectively and efficiently.

Client property coverage This generally applies to theft by an employee of the insured, and can apply to the client’s money, securities and/or other property. You will want to check the policy to see what types of property are covered. Some cover only money. Some cover only money that the insured is holding in its own bank accounts on behalf of clients. Other policies provide coverage for all manner of types of property, regardless of how the insured may access them. If your insured is a home health agency looking for coverage in case an employee steals a client’s jewelry, you would want to be sure such an exposure is covered under the forms proposed.

Vendor theft This covers theft of the insured’s money, securities or other property by a vendor’s employee.

Charge card coverage This covers loss arising from fraudulent use of the insured’s credit card. Please note that there is no broadly available solution for insureds that are looking for coverage for loss caused by the insured accepting a fraudulent credit or debit card in payment of goods or services. The same challenge exists with regard to accepting bad checks. Voluntary parting becomes an issue, and this is generally a risk which is borne by the insured, although there may be some exceptions.

Continued on page 34.

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33

Crime Coverage…continued from page 33.

Personal accounts coverage This covers the insured’s senior executives for loss arising from forgery or alteration of checking documents for the executives own personal bank accounts.

Telephone toll fraud This coverage applies to loss arising from the insured’s telephone system being compromised and made to dial long distance, running up an unusually high telephone bill.

The above are just some of the features one might be able to obtain on a standalone form. Carriers have various additional features to distinguish themselves in the marketplace, and there are robust options from which to choose.

About the Author: Chris Christian, CIC, RPLU Chris Christian is a member of The National Alliance National Faculty.

She stumbled into insurance in 1985 as a temporary worker in a bankowned agency and got hooked on the delightful mix of legal concepts, contracts, sales, and services that comprise the industry. She has specialized in professional liability since 1991, working on the carrier and wholesaler sides.

In addition to her daily practice of the art and science of wholesale brokering, Chris is a frequent contributor to industry publications, speaker at events and educational seminars, and the author of Cyber Insurance Basics, available on Amazon.

The bare bones employee dishonesty, robbery, and burglary coverages are generally easily found, but if you have an insured with claims history or with an unusual nature of operations, the standalone or management liability marketplace may still be of use. There are some classes of business, such as payday lenders, check cashing establishments, gambling locations, or marijuana dispensaries that have an inordinate amount of cash on-hand, and their package markets often will not be able to provide adequate solutions for the insured’s crime needs. Insureds that have any significant amount of precious metals or high-valued small inventory can also run into issues with carrier appetites.

Whenever an insured has had claims problems, the most important thing to address with underwriters is the remediating actions taken to increase controls to prevent future claims. Of course, an audit to ensure that there are no further losses lurking, but not yet discovered, is also helpful.

Crime forms of all stripes have many provisos, limitations, and requirements that controls be in place, and so on, and can be very detailed in how coverage may or may not apply. Certainly, we are often faced with unexpected declinations of coverage, especially when a loss scenario is outside the traditional employee embezzlement framework.

With the advent of the standalone markets, we have found that underwriters are constantly expanding, revising, and enhancing their offerings, so there’s no telling what will be available in the crime policies of the future. Whatever it is, it will be of value to those insureds that want to protect their assets. n

Attend the 2017 Entrepreneurial Insurance Symposium!

Network. Learn. Be Inspired—and Get Update Credit!

MarketScout’s 11th annual Entrepreneurial Insurance Symposium will be held Sept. 6–7, 2017, in Dallas, Texas, to promote innovation in the insurance industry. Until recently, our industry had long been in need of a think-tank, or incubator, supporting new insurance concepts and ideas. In response to that need, MarketScout, with support from The National Alliance, created the Entrepreneurial Insurance Symposium, where over 400 forward-thinking insurers, intermediaries, and agents come together to share new ideas, trends, and concepts related to insurance distribution, underwriting, and automation.

You won’t want to miss this exciting event—open to all insurance and risk management professionals.

Business Insurance magazine will be this year’s recognized media partner. Participants who attend the entire two-day symposium will have the opportunity

34 Resources | Summer 2017

Panelists and attendees from the 2016 Symposium.

to receive significant CE credit, and CIC, CRM, and CPRM designees can receive update credit, as well.

For more details and to register, go to

scic.com/courses/eis

Dear Bettie, I recently purchased a copy of The National Alliance Research Academy’s newest publication, Hiring, Managing, and Compensating Insurance Agency Personnel. The first chapter covers some very useful material about the pros and cons of conducting background checks on job candidates, including verification of prior employment and education. This got me to wondering, has The National Alliance ever come across an instance of someone misrepresenting themselves as a designee? And if so, what do you do about it?

—Margaret Parten, CPRM

Do you have a question to “Ask Bettie?”

Bettie Duff, Senior Vice President of Customer Care, has been with us more than 35 years and is the person to contact for information on just about anything related to operations and procedures.

Email your questions to: bduff@scic.com.

Dear Margaret, Thank you for inquiring. It’s unfortunate, but yes, we have had instances brought to our attention where individuals, who either lost or never completed their designation, were representing themselves as National Alliance designees—either through email, correspondence, marketing, or social media. We take this issue very seriously! It is our responsibility to protect our designees, the integrity of the designation, and the reputation of The National Alliance, as a whole. We also have a four-step policy we utilize to address unauthorized use of our designations: 1. Contact them personally 2. Follow up with a certified letter 3. Check social media for compliance 4. Engage legal counsel, if necessary It is disappointing to realize that certain people are willing to compromise their integrity by making false claims about their credentials, and we do our best to safeguard against such activity. The value of National Alliance programs is characterized by the distinguished individuals who rightfully earn and maintain their designations. We are incredibly proud of and honored by the commitment our designees make—to continuous learning, leadership, and building the professionalism of the industry. You are the crème de la crème!

—Bettie Dear Bettie, My favorite part of Resources magazine is the “In the Spotlight” section that highlights fellow designees’ accomplishments and awards. As a fervent supporter of continuing education, our agency has a large number of National Alliance designees among its ranks, and I’d love to find a way to acknowledge their dedication. Can I send you their names and get them featured “In the Spotlight”?

—Jenny Lynn Curtis, CIC, CISR

Dear Jenny Lynn, We would be happy to honor your team of designees! We were recently contacted by an agency that had over 10 CISR Elites, in addition to a number of other designees, and we were delighted to “spotlight” them in our magazine. In fact, we invite any agency or company with multiple National Alliance designees to send us their head-counts or list of names, and we’ll give a cheer in Resources for your team’s commitment to professionalism and life-long learning. We’re always pleased to feature individuals’ accomplishments, as well.

—Bettie

Resources | Summer 2017

35

Margaret Hunt Hill Bridge

Dallas James K. Ruble MEGA Seminar • October 16–19, 2017 Come to the Dallas Ruble MEGA Seminar in October and bring your family and friends!

The MEGA offers customizable, practical learning that is immediately usable, cuttingedge, and market focused—all in a lively destination location.

With four full days of topic choices, this event remains unique—an unmatched value in the industry. Choose from more than 20 four-hour topics and design your own personal seminar to fit your interests and professional focus. You only pay for your required 16 hours, and you can attend as many sessions as you wish. Create your own schedule, balancing just the right amount of class time with sightseeing and family leisure time.

Dealey Plaza–site of John F. Kennedy Assasination

Designed to provide high-interest sessions for many specializations, the MEGA is exclusively for dues-paid CICs, CRMs, and CPRMs. You can reconnect with industry friends, network with top experts, and get in touch with what’s happening around the country—all while participating in America’s most advanced insurance and risk management CE. Take a look at a sampling of the exciting sessions at the Dallas MEGA: • Advanced Time Element Coverage • Captive Insurance—The Risk Manager’s Perspective

Texas State Fair: 9/29/17–10/22/17

• Lloyd’s Access: Better Serve Your Clients • Insurance for EPL, Cyber, and Professional Liability Exposures—Hot Topics and Trends • Anatomy of a Lawsuit: An Insurance and Risk Management Seminar • The Invasion of the Drones!

• Navigating Marine Workers Compensation • And So Much More! (A complete agenda can be viewed at TheNationalAlliance. com/20171019TXRMG.) No matter what you are looking for—something BIG is waiting for you in Dallas! This southwestern city has many entertainment districts that offer you an exciting and diverse visit! From family-friendly offerings to vibrant nightlife and exciting venues, you can do and see it all in the Dallas-Ft. Worth Metroplex.

Renaissance Dallas-Richardson Hotel The hotel is located adjacent to Galatyn Park Plaza, the DART Light Rail, and the Eisemann Performing Arts Center—all in the heart of the Telecom corridor.

Ferris Plaza Fountain, Union Station, Reunion Tower

Renaissance Dallas-Richardson Hotel 900 East Lookout Dr. Richardson (Dallas Area), TX 75082

ONLINE OPTION

Call 972-367-2000 for reservations. Ask for The National Alliance group rate to receive the special price of $139 for single or double accommodations (based on availability—cutoff 10/2/17). Parking is Online Ruble MEGA Seminar • Aug. 28–Sept. 14 complimentary. Bring In addition to our celebrated classroom MEGA Seminars, your parking ticket we’re now offering MEGAs online. Satisfy your update inside for validation. requirement by selecting the four 4-hour sessions that Internet access is interest you most, from a list of eight topic choices. included in the guest Visit scic.com/courses/RUBLE/mega_seminars. room rate.

36 Resources | Summer 2017

“Autumn at the Arboretum” Fesitval—Dallas Arboretum and Botanical Garden: 9/23/17–11/22/17

A Collection of Success Stories and Press Clippings from Around the World

IntheSpotlight Designees Dominate Lists of 2017 Power Brokers and Rising Stars The following National Alliance designees were named to Risk and Insurance magazine’s lists of 2017 Power Brokers and Power Broker Risking Stars: Martha Acker, CIC, CRM, is President of Health Care for Arthur J. Gallagher & Company in Birmingham, AL, and was named a Health Care Power Broker.

Brandon Cole, CIC, CRM, CSRM, CPCU, ARM-P, RPLU, AINS, is a CISR Faculty member and an Area VP for Arthur J. Gallagher & Company in Irvine, CA. Brandon was named a Rising Star and a NonProfit Power Broker.

Michael Gong, CIC, is an Area VP for Arthur J. Gallagher & Company in Fresno, CA. Mike was named a Rising Star and a Real Estate Power Broker.

Acker

Cole

Gong

Hensley

Lucarelli

Joski

McKenzie

Nash

Perry

Salagan

Shinkle

Tanner

Zimmerschied

Zutel

Courtney Hensley, MBA, CRM, CISR, is an Account Executive with Aon Risk Services South, Inc., in Franklin, TN. She was named a Rising Star as well as an Education Power Broker.

Kimberly Lucarelli, CIC, is a Senior Sales Director for Oswald Companies in Cleveland, OH, and was named a Private Client Power Broker.

Linda Joski, CRM, is an Area VP for Arthur J. Gallagher & Company in Brookfield, WI, and was named a Workers Comp Power Broker.

Machelle McKenzie, CIC, CRM, is a Director at Crystal & Company in Houston, TX. She was named a Workers Comp Power Broker.

Kelly Ann Nash, CIC, CISR, is Sales and Operations Leader for Marsh & McLennan in Chicago, IL. Kelly was named a Rising Star as well as a Private Client Power Broker.

Joseph Perry, CIC, CRM, ARM, LIC, CWCP, CPCU, is a VP at Aon in Southfield, MI, and was named a Public Sector Power Broker.

Rebecca Salagan, CIC, CPCU, is a Senior Broker with Aon in Southfield, MI, and was named a Retail Power Broker.

Laura Sherman, CPRM, CAPI, CPRM Faculty member (not pictured here), was featured in the Spring 2017 issue of Resources. She was named a Private Client Power Broker.

Ryan W. Shinkle, CIC, CRM, is an Area VP for Arthur J. Gallagher Risk Management in Lafayette, LA. He was named a Risking Star and a Construction Power Broker.

Brian Tanner, CIC, is a Principal/Producer with EPIC Insurance Brokers in Birmingham, AL, and was named a Traditional Energy Power Broker.

Timothy Zimmerschied, CIC, CPCU, ARM, AAI, is a Senior VP with Arthur J. Gallagher Risk Management in Greensboro, NC. Timothy was named a Transportation Power Broker.

Federico Zutel, CIC, is a Senior VP with Willis Towers Watson, Inc., in Miami, FL. Federico was named a Rising Star and a Real Estate Power Broker.

Resources | Summer 2017

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A Collection of Success Stories and Press Clippings from Around the World

IntheSpotlight Designees Make the List: Elite Women 2016

University of Houston Downtown Taps New Talent

We would like to congratulate the seven CICs who were named to Insurance Business magazine’s list of Elite Women 2016: Amber Carver, CIC, is a top producer for Burns & Wilcox and manages all underwriting activities for their Salt Lake City office; Diane Champoux, CIC, AAI, is President of The Champoux Insurance Group in Lewiston, ME; Sonya Edwards, CIC, ACSR, is Operations Manager at Bryan Insurance Agency in Graham, TX, and was also the Texas “Outstanding CSR of the Year” in 2013; the highlyaccomplished Sharon Emek, Ph.D., CIC, is the founder and CEO of WAHVE (Work At Home Vintage Employees, LLC), headquartered in Avon, CT; Gilliam McCarron, CIC, is a VP at Lakeside Insurance Center, LLC, in Arvada, CO, as well as a CIC/CISR Committee member; dual-designee Jennifer Pierce, CIC, CRM, of Dallas, TX, is an AVP of business development with AIG; and Amy Smith, CIC, CPCU, AU, is the Director of Ross & Yerger’s CL, PL, and new business in Jackson, MS.

Priscilla Oehlert, MBA, CIC, CRM, ARM, has been hired as Director of the Insurance and Risk Management Center at the University of Houston Downtown (UHD) and Wayne Dauterive, CIC, CRM, ARM, Oehlert RF, CRIS, has been named Chairman. Ms. Oehlert brings to the position extensive risk management corporate and consulting experience, and she is a National Alliance Ed Consultant and CISR/ CRM Faculty member, as Dauterive well as the co-author of Risk Management Essentials, published by The National Alliance Research Academy. Mr. Dauterive is currently VP of Risk Management for Metro National Corporation and also serves as VP of Metro National’s captive insurance program, CART. His career has included a variety of risk management positions, and he has contibuted significantly to the curriculum at UHD.

Smith

Pierce

Carver

Champoux

Edwards

Emek

McCarron

Wraight Joins Insurance Journal Patrick Wraight, CIC, CRM, CISR, AU, AINS, and CISR Faculty member was recently named Director of the Insurance Journal’s Academy of Insurance. He brings to the position his experience as a senior training specialist for Citizens Property Insurance Corporation, and as an underwriter and underwriter trainer for McNeil & Company, Inc. Insurance Journal

38 Resources | Summer 2017

Stangler Honored Pewaukee (WI) School District Director of Buildings and Grounds, John Stangler, CSRM, was named the 2017 School Facilities Manager of the Year at the WASBO (Wisconsin Association of School Business Officials) Spring Conference. The award acknowledges his leadership in schools, commitment to professional development, active participation in his profession, and role in his community. Lake Country Now

Have you been “IntheSpotlight”?

To submit an item for editorial consideration, send article with photo to: The National Alliance/Resources, P.O. Box 27027, Austin, TX 78755-2027, or email bkeeling@scic.com.

TheNationalAlliance.com

Brennan Joins Board Latonya Brennan, CSRM, was recently sworn in as the newest member of the Board of Trustees for Brookdale Community College, in Middletown, NJ. Brennan currently serves as Area VP for Arthur J. Gallagher and Company Risk Management Services in Princeton and has previously worked with the New Jersey School Boards Association and the New Jersey Schools Insurance Group. She is also a past president of the Associate Business Members of the New Jersey Association of School Business Officials.

Mau Steps Up Tracy D. Mau, CISR, CRIS, COO and managing partner with Strovis Holdings, was recently elected President of the Independent Insurance Agents & Brokers of Horry and Georgetown Counties in South Carolina. Tracy previously served as the group’s VP and has been a member since 2006.

Tapley Elected The Maine Insurance Agents Association recently elected Wendy J. Tapley, CIC, as Chairwoman. Wendy is the owner of Tapley Insurance Agency in York, ME. She is also the VP and Director of the Insurance Group of New England; a past President of the Greater York Region Chamber of Commerce Board of Directors; and is currently Chairwoman of the York Maine Marketfest Committee.

Recognition for Reichman The PIA of New Jersey presented Steven A. Reichman, CIC, their Community Service Award during their annual conference in June. Steven is VP of Business Development for ADP/Statewide Insurance Agency in Florham Park, NJ, as well as a CIC/CISR Committee member and past CIC Board member. He received this citation in appreciation for his ongoing efforts and unwavering support of Special Olympics New Jersey and New Jersey’s professional insurance agents. PIANJ News Release

CICs Take the Lead in Connecticut The PIA of Connecticut recently elected four CICs to lead their Board: Michael A. Krause, CIC, VP of Anderson-Krause, Inc., in Branford, CT, was named President-Elect for 2017–18, and is also VP and Chairman of PIACT’s Association Programs Committee and a member of the Executive/ Budget and Finance Committee; Mark R. Connelly, CIC, President and CEO of Fairfield County Bank Insurance Services, LLC, in Ridgefield, CT, was named VP; Shannon Rabbett, CIC, principal of Rabbett Insurance Agency in Windsor, CT, was named Secretary; and Loretta Lesko, CIC, VP of Operations for the DiMatteo Group in Shelton, CT, was named Immediate Past President.

Krause

Connelly

Rabbett

The PIACT also re-elected two CICs as Board members: Herbert Olson, CIC, CPCU, ARM, (not pictured) Sales Producer for John Lesko M. Glover Agency in Berlin, CT, and member of the PIACT’s Legislative/ Business Issues Committee; and Kimberly Tompkins, CIC, AIS, AINS, CRIS, ACSR, PHM, CPIA, Agency Operations Manager for HAI Group in Cheshire, CT, and our 2002 Outstanding CSR of the Tompkins Year in Connecticut, as well as PIA National’s National CSR of the Year in 2003. PIACT News Release

CIC Benchmark Anniversaries This year marks some pretty impressive anniversaries of conducting CIC institutes in certain states. We’re proud to make available the best continuing education in the industry, raising the bar of professionalism, and enhancing careers in every state, and beyond.

Celebrating 35 Years West Virginia Celebrating 45 Years North Carolina South Carolina Iowa Kansas

Celebrating 45 Years Kentucky Montana Oklahoma Utah Virginia/DC Washington

Resources | Summer 2017

39

PRSRT STD U.S. Postage

PAID Austin, TX Permit No. 93

The more you know, the more strategically you can grow…

Attention Agency Owners, Managers, and Supervisors: For 30 years, the Growth and Performance Standards (GPS) study has been the leading resource for independent agency benchmarks—information that empowers YOU to make strategic comparisons of your agency’s financial and productivity results to those of peer group agencies. The National Alliance Research Academy is now conducting the survey for the 11th edition of the GPS study, and this is your chance to step up and participate in critical industry research that can help you grow your agency!

• Use GPS benchmarks to identify positive and negative variances that will inform your decisions about how to improve the performance of your agency.

• Specifically compare income and expense averages, productivity standards, balance sheet ratios, and agency profile measures.

• The Academy will complete the financial portion of the questionnaire for you, if you wish.

• All data from agency financial statements is maintained by The Academy in a totally confidential manner.

WIN a Scholarship! Participate in the GPS survey to be entered into a drawing to WIN one of 20 scholarships, each good for one online CIC or CRM course! (Scholarships are valued at $430 each.)

50% off! Participants are also entitled to purchase one copy of the new GPS study at 50% off the regular price.

Participate in the survey:

surveymonkey.com/r/T2BL5HP