INSURANCE NEWS FLASH October 31, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance.................................................................................................................................. 8 Technology .......................................................................................................................... 12 Strategy .............................................................................................................................. 18
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Sales & Marketing Insurers target Africa as millions buy cover October 31, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/10/31/insurers-target-africa-as-millions-buycover?ref=rss Global insurance companies are flocking to Africa, where millions of people have started earning enough to afford business cover and protection for their families, said private equity firm LeapFrog Investments. “We’re at an immense inflection point in history where millions of people in Africa are starting to be able to manage risk, and insurers are providing the tools,” Andrew Kuper, founder of LeapFrog, which specializes in insurance and related financial services for emerging consumers, said by phone from Sydney on Oct. 29. “We’re seeing increasing commitment from major insurers in terms of check size and sheer numbers.” American International Group Inc., the largest commercial insurer in the U.S., Swiss Re AG and France’s Axa SA have all invested in LeapFrog funds. The firm sold a minority stake in Kenya’s Apollo Investments Ltd. to Swiss Re on Oct. 8 and last year sold Ghana’s Express Life Co. to Prudential Plc. LeapFrog generated an internal rate of return of about 80% on Express Life, according to Private Equity International. “Financial services is growing at about 19% a year in sub-Saharan Africa, and in Ghana, Kenya and Nigeria it’s even faster,” Kuper said. “It’s about finding the sweet spot within the sweet spot within the sweet spot. The potential for returns is remarkable.” Old Mutual Plc, the insurer that originated in South Africa and is based in London, set aside 5 billion rand ($460 million) to expand in Africa after annual figures consistently showed that the company’s best growth was coming from emerging markets. ‘Most Exciting’ Old Mutual bought a stake in a Kenyan company last year. Sanlam Ltd. and units of the U.S.’s Marsh & McLennan Cos. have also bought stakes in companies on the continent. LeapFrog’s investors are using the firm both to generate returns and to gain insight into markets and companies, according to Kuper. As LeapFrog has started exiting investments from its maiden Fund I, investors are able to evaluate an insurer’s risk-adjusted returns while knowing that any risks to their own reputations is low. For that, they pay a LeapFrog premium, Kuper said. Among LeapFrog’s longest-held and “most exciting” portfolio investments in Africa are AllLife Ltd. in South Africa, ARMLife Plc in Nigeria and Bima, which offers insurance that can be bought on a mobile phone, he said. Having raised Fund II in August, which is oversubscribed at $400 million, LeapFrog plans to start buying more stakes for amounts between $10 million and $50 million. African Attraction The company has invested about $30 million in India’s IFMR Capital, with $370 million earmarked for
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Africa and Asia. LeapFrog will spend as much as $100 million on investments in South Africa, Kuper said. The level of insurance penetration for Africa, measured as a percentage of premiums to gross domestic product, is 3.5%, according to a PricewaterhouseCoopers LLP report released in South Africa on Oct. 21. While this exceeds the emerging markets’ average of 2.7%, it’s lower than the average for advanced markets of 8.3%, and the global average of 6.3%. In Africa “insurers are attracted by projections of strong GDP growth, low penetration rates and the expected growth in demand for insurance as affluence increases,” PwC said. “Nigeria is potentially the largest growth market in Africa. Kenya is clearly also another market with significant growth potential.”
Aon, in Partnership with Hiscox, Offers Ebola Liability Cover October 28, 2014 | Insurance Journal http://www.insurancejournal.com/news/international/2014/10/28/344991.htm Aon has launched an Ebola response product available to all health care institutions and features worldwide coverage on cases brought in the U.S. Negotiated in partnership with Hiscox, the product – called the Ebola liability insurance wrap – covers scenarios where existing liability programs may not apply. The product provides up to $25 million of liability coverage. It is available exclusively through Aon for a period of 60 days. “The Ebola outbreak’s impact on the health care industry is raising questions and uncertainties for our clients around the world,” said Michael J. O’Connor, CEO of Aon Risk Solutions. In addition to the development of the Ebola liability insurance wrap, Aon has been monitoring the current Ebola outbreak and providing guidance to clients directly and through an Aon Ebola Response Room.
Erie Insurance Expands Into Kentucky October 20, 2014 | Claims Journal http://www.claimsjournal.com/news/southeast/2014/10/20/256526.htm Erie Insurance announced its entry into the Kentucky market, offering auto, home and life insurance to residents of the state. This marks the first geographic expansion by the company in more than 10 years. The company offers insurance through independent agents in 11 other states and the District of Columbia. To prepare for its Kentucky launch, the company established a corporate office in Lexington and
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worked with independent insurance agents to open 24 new agencies throughout the state. Approximately 16 more agencies will open by the end of the year for a total of 40, and additional new agencies are planned for 2015. In addition to car, home and life insurance, ERIE will also offer personal catastrophe liability insurance similar to umbrella insurance.
Insurers Recruit Crime Insurance Talent From AIG October 16, 2014 | Claims Journal http://www.claimsjournal.com/news/national/2014/10/16/256341.htm Beazley Plc hired Matt Barone from American International Group Inc., becoming the second insurer in a month to recruit from AIG to build groups that sell coverage protecting corporate clients against crimes. Barone joins the fidelity bond and crime team in New York, according to a statement from Dublinbased Beazley. The policies guard companies against theft by their employees or losses from third parties, including those tied to forgery or computer fraud. Commercial insurers are seeking to expand sales of specialty coverage to help counter a decline in the prices that they charge for protection from natural disasters. Warren Buffett’s Berkshire Hathaway Inc. said Sept. 23 that it hired Brian O’Neill from AIG to lead a push into the fidelity and crime market. Beazley, a Lloyd’s of London insurer, said Barone will help with expansion in the U.S. “We are excited to welcome an underwriter of Matt’s depth and experience to our team, and look forward to growing our business, with a particular focus on the larger market and Fortune 500 accounts,” Bill Jennings, underwriter for Beazley’s fidelity bond and crime insurance products, said in the statement. Beazley has been expanding in the U.S. as the world’s largest economy recovers, hiring more than 20 new underwriters and opening offices in Miami and Dallas, in the last two years. Adrian Cox, head of Beazley’s specialty lines division, relocated to the U.S. last year to oversee the expansion.
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AIG Departures AIG has seen managers and top executives depart since Peter Hancock was named chief executive officer to replace Robert Benmosche. Jay Wintrob, who led the U.S. life and retirement business for New York-based AIG, was hired as CEO by distressed-debt firm Oaktree Capital Group LLC. In Asia, Marc Breuil and Marcus Portbury left AIG for Berkshire, a person familiar with the matter said in August. “We fully expected management changes with the new CEO,” Gloria Vogel, an analyst at Drexel Hamilton LLC, said in an Oct. 13 research note. “We expect other executives could still leave by year end.” Matt Gallagher, a spokesman for AIG, didn’t return messages seeking comment. Barone worked for AIG for 16 years, and his focus for the past 12 has been underwriting commercial crime business in the West Coast, Beazley said. He is a graduate of St. John’s University, according to the statement.
Argo Group Announces Investment in Newtopia, Inc October 16, 2014 | Argo Group https://www.snl.com/IRWebLinkX/file.aspx?IID=103333&FID=25663815 SAN ANTONIO--(BUSINESS WIRE)-- Argo Group US Inc., a subsidiary of Argo Group International Holdings, Ltd. (NASDAQ:AGII), an international underwriter of specialty insurance and reinsurance products, announced that it has completed an investment in Newtopia Inc., an innovative health and wellness company that uses behavioral science and genetic information to build highly personalized lifestyle plans for disease prevention. Newtopia partners with health insurers, employers and their employees to improve the health of employees while controlling health care costs, thereby providing an attractive benefit to all parties. In addition to investing in the company, Argo plans to pilot Newtopia’s unique platform within its Argo Group US employee base. “Our employees are Argo’s most important asset,” commented Argo Group Chief Investment Officer Mark Rose. “A formal wellness program was introduced a few years ago and we’ve been very pleased with the high level of employee participation and results. It has made a meaningful difference in raising awareness and improving overall health and wellness. We are very impressed with Newtopia’s quality management, engaging approach to wellness and industry-leading partnerships. We look forward to enabling our employees to benefit from Newtopia’s offerings, as we also participate in Newtopia’s exciting potential through our equity stake in the company.” “Newtopia’s mission is to inspire individuals to make the right lifestyle choices that can help them build healthy lives,” said Newtopia Founder and CEO Jeffrey Ruby. “It is exciting to work with an innovative partner like Argo to demonstrate that we can reduce the incidence and cost of chronic disease through the latest in genetics, behavioral science and engagement.” The terms of the transaction were not disclosed.
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About Newtopia Newtopia is a personalized health company dedicated to inspiring individuals to make the right lifestyle decisions to live healthy. Newtopia’s health engagement approach leverages genetics, the latest engagement science and personality matched coaching to build highly personalized lifestyle plans that deliver sustainable results. Newtopia’s programs and products are guideline and evidence-based and are available across the United States and Canada. More information on Newtopia is available at www.newtopia.com. About Argo Group International Holdings, Ltd. Argo Group International Holdings, Ltd. (NASDAQ:AGII) is an international underwriter of specialty insurance and reinsurance products in the property and casualty market. Through its operating subsidiaries, Argo Group offers a full line of products and services designed to meet the unique coverage and claims handling needs of businesses in four primary segments: Excess & Surplus Lines, Commercial Specialty, International Specialty and Syndicate 1200. Argo Group’s worldwide insurance subsidiaries are rated ‘A’ (Excellent) by A.M. Best with a stable outlook and its U.S. insurance subsidiaries are rated ‘A-’ (Strong) by Standard & Poor’s with a stable outlook. For more information, visit www.argolimited.com.
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Finance Assurant to acquire French mobile insurance administrator CWI Group October 28, 2014 | Insurance Business Review http://commerciallines.insurance-business-review.com/news/assurant-to-acquire-french-mobileinsurance-administrator-cwi-group-281014-4418370 US-based Assurant Solutions is set to acquire French mobile insurance administrator, CWI Group, for around â‚Ź56m ($71m). The acquisition is said to enhance Assurant's capabilities in mobile device protection, and also to expand its distribution into independent retailers and the financial services affinity market in Europe. Assurant Solutions president and CEO Craig Lemasters said the European companies and consumers continue to lead the way in digital innovation. "By leveraging our leadership position in the UK and the expanded capabilities of CWI Group, we plan to help an increasing number of consumers remain connected with their digital lives," Lemasters added. Established in 2001, CWI Group is an insurance brokerage firm, which is specialized in the creation, distribution and management of affinity insurance in France. With policies sold in independent and franchise telephone stores and mobile phone companies, the company protects around 420,000 mobile insurance devices. The company also supports global financial brands by offering ancillary protection plans to about 30 million cardholders. The company, which has around 170 employees, generates about â‚Ź31m ($39m) in annualized revenue. CWI Group co-founder and president Julien Naquet, along with his current management team, will continue to operate the business. Naquet added: "Assurant Solutions' financial strength and deep expertise in protection programs and services will enhance our growth opportunities." Subject to certain conditions, the transaction is expected to be completed in the fourth quarter of this year.
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Louisville insurance firm makes another acquisition October 27, 2014 | Business Journals http://www.bizjournals.com/louisville/news/2014/10/27/louisville-insurance-firm-makesanother.html Louisville-based Assured Neace Lukens insurance company has made its second acquisition this month. Assured Neace Lukens acquired Troy, Ala.-based Turner & Hamrick LLC on Thursday, according to a news release from Lake Mary, Fla.-based AssuredPartners Inc., parent company of the Louisville firm. Terms of the deal were not disclosed. Turner & Hamrick's annual revenue is about $3.7 million for the agency that specializes in insurance for the trucking industry, businesses, individuals and professional liability, according to the release. Turner & Hamrick's 23 employees will join AssuredPartners and will remain in Turner & Hamrick's Troy, Ala. headquarters and its satellite offices in Birmingham, Montgomery and Daphne, Ala., according to the release. William F. Hamrick, managing member of Turner & Hamrick will serve as the office's managing director. "The Turner & Hamrick acquisition strengthens AssuredPartners presence in the Alabama market," said Tom Riley, president and COO of AssuredPartners. AssuredPartners continues to acquire insurance providers throughout the United States. Earlier this month, Assured Neace Lukens announced it acquired Cincinnati-based Hukill Hazlett Harrington Agency. AssuredPartners acquired Neace Lukens in 2011 and since then has acquired more than 70 insurance firms. AssuredPartners has grown to about $390 million in annual revenue and has more than 80 offices in 27 states, as well as an office in London. Assured Neace Lukens has more than 30 offices in 10 states, including Kentucky and Ohio.
Mercury to Acquire Workmen’s Auto Insurance October 23, 2014 | Insurance & Technology http://www.insurancetech.com/management-strategies/mercury-to-acquire-workmens-autoinsurance/d/d-id/1316900?_mc=RSS_IST_EDT The $8 million transaction is expected to close in early 2015. Multiline insurer Mercury General Corporation has announced its plans to purchase Workmen’s Auto Insurance Company for $8
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million. Pending regulatory approval, the acquisition is expected to close in the first quarter of 2015. Workmen’s is a Los Angeles-based auto insurer that specializes in underwriting non-standard personal auto insurance, primarily in the state of California. In June of this year, it reported a statutory surplus of $9.2 million. Mercury General and its subsidiaries predominantly offer personal auto and homeowners policies President, Employee Benefits, added, "The combination of Pilot with Heffernan will allow Pilot's existing clients to benefit from what Heffernan has built nationwide and we look forward to offering our clients even more by leveraging Heffernan's benefits technology resources." About Heffernan Insurance Brokers Heffernan Insurance Brokers, formed in 1988, is one of the largest independent insurance brokerage firms in the United States. Heffernan provides insurance and financial services products to a range of businesses and individuals. Headquartered in Walnut Creek, Calif., Heffernan has offices in San Francisco, Petaluma, Menlo Park, Los Angeles and Orange County, CA; Portland, OR; St. Louis, MO and New York, NY. Employee-owned, Heffernan Insurance Brokers was named the Top Mid-Sized Broker in the United States to Work for in 2009 by Business Insurance Magazine. The firm has been among the Top Greater Bay Area Philanthropists since 2003, donating more than 10 percent of profits to charity in 2013.
Marsh expands its flood insurance capabilities with Torrent acquisition October 20, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/10/20/marsh-expands-its-flood-insurancecapabilities-wit?ref=rss Marsh, a global leader in insurance broking and risk management, today announced that it has signed a definitive agreement to acquire Torrent Technologies, Inc., a leading service provider to Write Your Own (WYO) insurers participating in the National Flood Insurance Program (NFIP). The transaction is subject to customary closing conditions. Terms were not disclosed. Torrent’s approximately 100 employees will combine with Marsh’s existing flood insurance specialists and remain headquartered in Kalispell, Montana, to create a Flood Center of Excellence, offering the industry’s most comprehensive suite of flood insurance products and services. “Torrent Technologies is widely recognized as having the most advanced and unique suite of cloudbased technology solutions that interface with WYO insurers and the NFIP, including real-time, paperless claims handling and web-based pricing tools,” said Peter Zaffino, President and CEO of Marsh. “We are excited about the opportunities this partnership presents for us as we look to further innovate in the flood insurance segment.” Travis Pine, Chairman and CEO of Torrent, added: “We have always been impressed with Marsh’s flood experience and strong commitment to the NFIP. We couldn’t be happier to join the firm and are excited that this combination will provide our clients the most advanced and holistic suite of NFIP-related capabilities available in the market.”
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The transaction marks an expansion of the existing relationship between the two firms. In 2013, Marsh began using Torrent’s platform to access the NFIP.
Assurant Sells Specialty Group to Global Indemnity October 17, 2014 | Insurance & Technology http://www.insurancetech.com/management-strategies/assurant-sells-specialty-group-to-globalindemnity/d/d-id/1316737?_mc=RSS_IST_EDT The American Reliable Insurance Company unit was valued at $114 million.Assurant Specialty Property, a business segment of Assurant, has sold its general agency business and associated insurance carrier, American Reliable Insurance Company, to Global Indemnity Group Inc., a subsidiary of Global Indemnity plc, for approximately $114 million in cash. Based in Scottsdale, Ariz., American Reliable Insurance offers specialty personal lines and agricultural insurance through general and independent agents. The business said it recorded approximately $250 million of GAAP net earned premiums in 2013. The sale represents a change in strategy for the parent company. "Assurant Specialty Property is focused on accelerating our momentum within the mortgage and multifamily housing industries," Gene Mergelmeyer, president and CEO of Assurant Specialty Property, said in a press release. "The sale of American Reliable Insurance Company allows us to better align our portfolio of businesses, increase resources allocated toward these markets and strengthen our core business." The deal with Global Indemnity, a specialty insurance and reinsurance provider based in Ireland that owns several other US insurance companies, is expected to close following regulatory approval and satisfaction of customary closing conditions.
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Technology MiddleOak Policy Admin Revamp Kick-Starts the Business October 28, 2014 | Insurance & Technology http://www.insurancetech.com/policy-administration/middleoak-policy-admin-revamp-kickstarts-the-business/d/d-id/1317019?_mc=RSS_IST_EDT A new policy admin system helps transform MiddleOak's internal processes, speeds time to market, and enables leveraging data and analytics.While hammering out a commercial habitation expansion strategy in late 2010, Middletown, Conn.-based MiddleOak determined its legacy policy administration system couldn’t keep up. “The system’s capabilities were unable to keep pace with the business demand and was hampering our ability to grow as we desired,” recalls Sean Sweeney, senior VP of IT for the personal, commercial, and specialty P&C insurer. “It also lacked capabilities for handling large policies.” MiddleOak (affiliated with Bloomington, Ill.-headquartered Country Financial, $15 billion in total assets) began its policy admin evaluation in 2011 with six contenders, which it narrowed to three. In the process, the insurer discovered advantages to skipping the initial wave of modernizations. "Just a few years ago, new platforms required considerable customization,” notes Vern Abbott, MiddleOak’s VP of IT. “Now, such solutions contain tool sets enabling company-specific configurations that avoid the complexity of customization, which is especially critical for efficient maintenance and upgrades.” After further scrutiny, PolicyCenter by Guidewire Software of San Mateo, Calif., rose to the top. “It provided a system we could maintain ourselves, enabling us to speed time to market,” says Sweeney. Also, policy admin comprised only a portion of the overall initiative. Other key technology adoptions occurring concurrently included document and content management as well as rating and building valuation software. “Each of those deployments was more significant efforts than our 20-person IT staff had undertaken before,” says Abbott. “This made Guidewire’s strong consulting services, implementation methodology, and knowledge transfer capabilities important considerations for selecting them as our policy administration partner.” With a contract inked in January 2012, a core implementation team of about 20 business, IT, and Guidewire representatives was formed. The implementation team divided the project into two parallel tracks: one for design and configuration, the other for systems integration. Over the life of the project, approximately 300 people would play a role, including about 15 agencies spread across the states designated for the first of three rollout phases. The core team also coordinated with the Country Financial IT organization, which invested in a new virtualized server farm to house MiddleOak’s various new systems.
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Agile lends to success In a first for MiddleOak, much of the PolicyCenter deployment used agile methodology. “During the early sprints specific developers and business analysts formed such tight bonds they wanted to continue working together,” Abbott says. “To help keep enthusiasm levels high, we formed microteams within the larger effort to accommodate these requests.” By November 2013 the new platform rolled out successfully to the first four states. “Positive feedback from our agency network and our internal employees came in immediately,” says Sweeney. “This continued as we launched an additional 10 states in January of 2014 and another 18 in February, for a total of 32.” Unsurprisingly, the initiative has been transformative. “Before, our discussions with the business centered on how long it would take to make even small adjustments. Today, with changes occurring within minutes instead of weeks, discussions are about how we leverage data and analytics -- which were unavailable to us before -- to take advantage of market opportunities.” Additionally, re-engineering business processes and workflows end-to-end has boosted output efficiency and quality. “Employees who previously were dedicated to mundane tracking activities are now performing the higher-value work involved with risk valuation and underwriting,” explains Sweeney. “This gives them a positive career path.” The new system has also impacted distribution heavily. “Although we expected about a 50% adoption rate for our automated underwriting portal, it’s now over 70% and continues to increase,” says Abbott. “So, as we look toward 2015, our primary enhancements are around agent entry and workflows to keep that momentum going.”
Mercury Insurance enhances business process automation and information management with OnBase by Hyland October 28, 2014 | OnBase http://www.onbase.com/en/about/media-room/press-releases/mercuryinsurance#.VFDTBSKUfts CLEVELAND – October 28, 2014 – Mercury Insurance, a leading property and casualty insurer in California, selected OnBase to convert from multiple document management systems. Using OnBase, Mercury will leverage a single, streamlined process automation and paperless workflow solution across their company. By replacing its document management systems with OnBase, an agile and flexible enterprise content management (ECM) solution, Mercury Insurance will gain greater efficiency in all departments and reduce ongoing support and maintenance costs. Phase one of the conversion successfully integrated OnBase with Guidewire PolicyCenter® to enhance document management and workflow for Mercury’s national underwriting operations. In subsequent phases, Mercury Insurance will integrate OnBase with Guidewire ClaimCenter® and Guidewire BillingCenter® to complement and extend capabilities, including electronic foldering functionality from within Guidewire’s InsuranceSuite™. As the only ECM solution provider in Guidewire’s SolutionConnect program, OnBase developed a seamless, secure integration to complement and extend functionality within InsuranceSuite™. This integration enables faster, more accurate processing and a reduction in implementation and training costs.
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“We are delighted to welcome Mercury Insurance into our insurance community. We look forward to helping Mercury Insurance continue to streamline processes and become more efficient,” said Cheryl Nulman, insurance industry marketing manager at Hyland, creator of OnBase. Working with OnBase’s service team, Mercury Insurance created a roadmap to expand its solution and gain additional returns into the future. After it completes its conversion to OnBase, Mercury plans to leverage the OnBase Field Adjuster App for Windows 8 application to help its adjusters in the field gather and process pertinent claims information and data while away from their workstations. "Becoming a paperless organization is just the beginning of the benefits we will see with OnBase,” said Allan Lubitz, SVP and CIO at Mercury Insurance. “OnBase is a configurable solution that will meet our immediate ECM and repository needs but will also provide business process automation throughout the organization to ensure our employees have the right information at the right time to ultimately make better, faster, and more informed decisions.”
Auto Insurance Customer Satisfaction Continues to Rise: J.D. Power October 27, 2014 | Claims Journal http://www.claimsjournal.com/news/national/2014/10/27/256842.htm Auto insurance companies’ focus on their customers during the claims process is reflected in the continuing improvement in satisfaction, according to the J.D. Power 2014 U.S. Auto Claims Satisfaction Study released today. The study measures customer satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of a claim, claimants may experience some or all of the following factors measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement. Overall customer satisfaction with the auto insurance claims process has improved steadily during the past five years to 857 on a 1,000-point scale in 2014 from 842 in 2010. While overall satisfaction improves by a modest 2 points compared with 2013, satisfaction in the service interaction factor increases significantly (+7 points) year over year. Within service interaction, claim professional satisfaction increases significantly (+17) in 2014, primarily driven by higher ratings for responsiveness and concern for the claimant’s situation. “Insurance companies are placing more emphasis on training their employees and representatives to be customer-centric, especially during the interaction process,” said Jeremy Bowler, senior director of the global insurance practice at J.D. Power. “That focus is reflected in the increase in satisfaction, specifically with claim professionals, whose primary responsibility is to accurately estimate the amount of the insurance settlement. Historically, those individuals have been recruited and trained for their technical knowledge but haven’t always been known for being customer service-oriented.” The study finds that the average severity of claims (based on the dollar amount of the loss) has increased for a third consecutive year. That increase in severity is due to a rise in more complex claims—those in which vehicles have significant structural damage and need to be towed—which account for 20 percent of auto claims and 17 percent of claims in which the vehicle is declared a
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total loss. That rise represents a 5 percentage point increase from 2011 when complex claims represented 32 percent of all auto claims. Despite an increase in number of complex claims, insurers are doing a better job handling more complex claims, which typically result in much lower satisfaction scores. Satisfaction with total loss claims in 2014 averages 829, compared with 851 for towed vehicle claims, each claim type improving by 12 points from 2013. Satisfaction with claims in which the vehicle was still drivable after the accident averages 867, down 1 point from 2013. Those improvements in satisfaction with insurers’ handling of complex claims are largely due to insurers managing customer expectations with respect to the timing of the claim and moving the claim along more quickly—key metrics of communicating the settlement, repair time, and paying the customer (if applicable) are all performed faster in 2014. KEY FINDINGS Satisfaction with the claims experience impacts customer retention and referrals. Among delighted claimants (overall satisfaction of 900 or higher), 79 percent say they “definitely will” renew their policy and recommend their insurer. Among displeased claimants (scores of 549 and below), only 13 percent say they “definitely will’ renew and 7 percent “definitely will” recommend their current insurer. Technology-supported, proactive communication increases satisfaction. The percentage of customers receiving email updates on their claim status increases to 24 percent in 2014 from 15 percent in 2011. Satisfaction is highest among claimants who receive digital updates through email, text or smartphone apps. Satisfaction is 918 among the 53 percent of claimants whose agent initiated contact with them during the claims process, compared with 827 among those who initiated contact with their agent. Satisfaction among the 65 percent of claimants who indicate they were provided options of how they could receive claim updates averages 887, compared with 798 among those who are not. On average, it takes 13.4 days from the time loss is reported to the insurer until the vehicle is repaired and returned, 0.2 of a day faster than in 2013. The improvement is due to improved performance when dealing with towed claims, which are repaired and returned 1.6 days faster in 2014 than in 2013 (15.0 days vs. 16.6, respectively). For vehicles declared a total loss, it takes an average of 18.3 days from the time the loss is reported until the claim is paid. Satisfaction is highest among Pre-Boomers (born before 1946) at 911 and lowest among Gen Y (born between 1977 and 1994) claimants at 819. Satisfaction among Boomers (born between 1946 and 1964) is 876, while it is 847 among Gen X (born between 1965 and 1976) claimants. Insurance Rankings Amica Mutual ranks highest in auto claims satisfaction with an index score of 900, a 29-point improvement from 2013. Auto-Owners Insurance ranks second (879), followed by State Farm (869), American Family (868) and Auto Club of Southern California Insurance Group (867). USAA achieves a score of 896, but is not award-eligible because it is an insurance provider open only to U.S. military personnel and their families. The 2014 U.S. Auto Claims Satisfaction Study is based on responses from 10,891 auto insurance customers who settled a claim within the past six months. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed roadside assistance claims. Survey data was collected between November 2013 and August 2014.
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Big Data: Helping Acquire Policyholders October 24, 2014 | Insurance & Technology http://www.insurancetech.com/channels/big-data-helping-acquire-policyholders/a/did/1316941?_mc=RSS_IST_EDT By combining first-party, third-party, and proprietary data, insurers are given the best possible view of a prospect.The insurance industry is jumping on the big data train and not looking back. One recent survey found that P&C insurers plan to increase the number of big data experts with advanced degrees on staff from 21% to 51% by 2016. Some large insurers have been using analytics for several years now, helping them to set customer rates, to identify risks and fraud better, and even to simplify the claims process. More and more insurers today are beginning to use the power of big data throughout the customer life cycle. Faced with a plethora of unstructured data, insurers are now working hard to utilize the data they have so that it reveals useful insights on their customers. Despite their rising investments in analytics across the entire customer engagement process, many insurers still aren’t investing in the one marketing area that could result in a big boost to the bottom line -- customer acquisition. Some of these companies are spending millions of dollars on advertising, most of it focusing on television or big brand-awareness-raising sponsorships that realistically result in very few conversions. In fact, a recent Rocket Fuel report found that digital display ad spend is nine times more effective at driving top-of-mind awareness than TV, radio, and print. The rise of new types of analytics-driven advertising technology allows insurers to develop their digital marketing strategies in much more cost-effective ways. By combining first-party, third-party, and proprietary data, insurers are given the best possible view of a prospect, allowing them to target each consumer’s individual needs and to present them with more competitive quotes, with the objective of converting them. These platforms also allow insurers to track their digital ad spending better throughout the entire buying and selling process, which gives them the measurement tools to make quick changes if they realize a particular strategy isn’t working. Simply put, big data makes it easier to pinpoint target audiences, track successful marketing campaigns, and quickly change campaigns to target the right prospect, with the clear objective of signing the most valuable customers. In addition to managing their ad spend better, and giving them a greater return on this initial investment, using targeted data in the customer acquisition phase will inevitably help insurers down the line. For example, the more customer data auto insurers analyze through their advertising strategies, the better they can identify consumers who are less likely to be a risk to their financial bottom line in the future. While premiums for drivers with good driving histories won’t be as high, they also come with lower odds of these people needing to enter into the claims process due to an accident, a situation that can be costly to both the driver and the insurance company. Hyper-targeted digital marketing campaigns that build upon an insurers' existing big data strategy can mean savings across the entire customer experience. Insurers can then redistribute that money to customers through lower premiums and better service. This helps increase retention rates. As the effectiveness of marketing campaigns grows, engaging high-intent customers is sure to bring the greatest return.
Acrometis helps The General® add Provider eBilling Nationwide 16 | S u t h e r l a n d I n s i g h t s I n s u r a n c e N e w s F l a s h O c t 3 1 , 2 0 1 4
October 20, 2014 | StreetInsider.com http://www.streetinsider.com/Press+Releases/Acrometis+helps+The+General%C2%AE+add+Provi der+eBilling+Nationwide/9921921.html Acrometis successfully implemented provider eBilling for Permanent General Companies, Inc. and its affiliated insurance companies, which advertise as The General®. Leveraging Acrometis’ CLAIMExpert claims processing platform, The General® will now be able to quickly and cost effectively process Personal Injury Protection (PIP) bills. The EDI implementation was completed in under 60 days.
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Strategy Here we go: The insurance industry is hiring October 30, 2014 | Property Casualty 360 http://www.propertycasualty360.com/2014/10/30/here-we-go-the-insurance-industry-ishiring?ref=rss Insurance is on an upswing, according to a report released Thursday by InsuranceJobs.com. The industry added 6,300 jobs in August, based on the latest employment numbers from the U.S. Bureau of Labor Statistics. "The insurance carriers and related activities sub-sector grew by 0.25 percent last month and now sits roughly at 2.45 million employed insurance workers," InsuranceJobs.com wrote in a statement. "Over the past year, the total number of employed workers has increased by 62,400 jobs, or 2.61 percent. In September 2013, the reported number of workers in the insurance carriers and related activities industry was 2.38 million." It isn't just insurance, either. The finance and insurance sector as a whole added 11,100 jobs in September and has grown by 0.73% in the last year, reaching a total of 5.92 million workers. "The largest gains of the past year occurred within the last 4 months: September (+11,100), August (+11,400), July (+10,200), and June (+10,000)," the report read.
Changing the Security Mindset October 29, 2014 | Insurance & Technology http://www.insurancetech.com/security/changing-the-security-mindset/a/did/1317045?_mc=RSS_IST_EDT As cyber attacks evolve in number and complexity, financial services organizations must embrace proactive security strategies. Cyber security is rapidly evolving as an area of concern for insurers, with data breaches occurring more often than ever. Recent data from the Ponemon Institute reveals that 43 percent of businesses have experienced an attack in the past 12 months, and the changing motivation behind them is posing an even greater threat to the industry. “Today, the main driver in hacking is financial,” says Jerry Irvine, CIO of Prescient Solutions and member of the National Cyber Security Task Force. “Criminal, governmental, and third-party organizations are all financially driven.” Modern-day criminals want to be more than nuisances or political rebels, says Irvine, and today’s technology isn’t complex enough to block their attacks. Modern solutions are designed to protect environments with physical perimeters, but the growth of cloud technologies and evolution of hackers’ abilities are rendering these ineffective. Hackers don’t have new tools, but more of them are discovering and exploiting the flaws within existing systems.
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Hackers have an advantage over businesses because they collaborate and share effective criminal procedures and malware systems. Organizations don’t share their information as openly as hackers do, says Irving, which places them at a great disadvantage in terms of cyber security, and increases their risk of lawsuits. It’s no longer enough for insurers to strengthen the outside barriers to their organizations. They must also secure exactly what they need to protect: their data. Now is the time for organizations to forego a reactive approach to security in favor of more proactive strategies. “We have to understand that there is going to be a breach,” Irving emphasizes. “Because of the lack of perimeters and accessibility of data, there have to be larger constraints around the data itself.” He recommends that insurers begin by conducting a risk assessment, a process significantly more complex for organizations than for consumers. In addition to defining regulatory and compliance requirements, insurers must detail and inventory everything that relates to their data. This involves determining which apps access each set of data, as well as categorizing information as critically confidential. To minimize damage in the event of a data breach, carriers should have an incident response plan, says Kirstin Simonson, underwriting director for Travelers Global Technologies. Many businesses lack a responsive strategy, she says, or a team in place to mitigate the effects of a cyber attack. “That’s really a discussion that needs to cross multiple disciplines within the organization,” Simonson says of developing a response plan. Information and security experts, general counsel, and boardlevel executives should collaborate to identify business objectives, which entities are at risk, and how to best respond to a breach.
HM Insurance Hires SVP, Marketing & Strategy October 23, 2014 | Insurance & Technology http://www.insurancetech.com/management-strategies/hm-insurance-hires-svp-marketing-andstrategy/d/d-id/1316897?_mc=RSS_IST_EDT The appointee will lead initiatives in strategic planning, market research, and business analytics. HM Insurance Group has announced the appointment of Mark Nave as SVP of strategy and marketing. He fills the empty slot left by Matt Rhenish, who was named company president and COO earlier this year. Nave joins HM from management consulting firm McKinsey & Company. As engagement manager, he led teams of consultants and collaborated with health and financial services organizations to develop solutions to their problems. He has also held leadership roles in sales, marketing, and product management within the technology sector at companies including RF Micro Devices and Robert Bosch GmbH. In his new role, Nave will manage business analytics, market research, strategic planning, product development, project management, events, and marketing and communications for HM. “We are excited to have Mark on the leadership team at HM,” Rhenish said in a statement. “With his
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strong background in strategic development and business transformations, he brings excellent business analysis and problem-solving capabilities that can build on our success.�
Heffernan Insurance Brokers Acquires Pilot Employee Benefits LLC, Expanding its Employee Benefits offerings in the Tri-State Area October 20, 2014 | Yahoo Finance http://finance.yahoo.com/news/heffernan-insurance-brokers-acquires-pilot-185200204.html Heffernan Insurance Brokers, one of the largest full-service, independent insurance brokerage firms in the United States, acquires Pilot Employee Benefits. The firm has purchased the assets of Pilot Employee Benefits of Melville, NY effective October 20, 2014. The Pilot leadership personnel, consisting of Managing Senior Vice President Joshua Senders, and Managing Senior Vice President Benjamin Senders, will oversee Heffernan's newest office, located in Long Island. Family owned and operated for over 50 years, Pilot has developed benefits programs and solutions for a wide variety of companies and thousands of employees. They are led by the Senders family, Mark, Josh and Ben, who have built a successful platform, upon which Heffernan plans to expand in the coming years. Pilot will be joining forces with Heffernan's New York City office, integrating employee benefits solutions alongside its current property and casualty insurance efforts. "Josh, Ben and their team's breadth of experience in the Benefits industry will enhance and support our growing operations in the Tri-State area," said Mike Heffernan, President and CEO of Heffernan Insurance Brokers. "We see great success in combining our existing P&C and Benefits expertise in New York with the sales and service capabilities of the Senders and their team." Joshua Senders, Managing Senior Vice President, Employee Benefits, added, "The combination of Pilot with Heffernan will allow Pilot's existing clients to benefit from what Heffernan has built nationwide and we look forward to offering our clients even more by leveraging Heffernan's benefits technology resources." About Heffernan Insurance Brokers Heffernan Insurance Brokers, formed in 1988, is one of the largest independent insurance brokerage firms in the United States. Heffernan provides insurance and financial services products to a range of businesses and individuals. Headquartered in Walnut Creek, Calif., Heffernan has offices in San Francisco, Petaluma, Menlo Park, Los Angeles and Orange County, CA; Portland, OR; St. Louis, MO and New York, NY. Employee-owned, Heffernan Insurance Brokers was named the Top Mid-Sized Broker in the United States to Work for in 2009 by Business Insurance Magazine. The firm has been among the Top Greater Bay Area Philanthropists since 2003, donating more than 10 percent of profits to charity in 2013.
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