Insurance Journal West 2018-11-05 by Insurance Journal

WEST REGION BRONZE Best Agency to Work For – West: North Town Insurance Pie’s Entry into California Comp Market Changing World for P/C Underwriters

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Contents November 5, 2018 • Vol. 96 No. 21 • West

West

National

W1 Pie Founder Talks About Entry into California Workers’ Comp Market

10 Legislation to Protect Sports Medical Professionals Signed 12 Changing World for P/C Underwriters: Guy Carpenter

W4 BRONZE Best Agency to Work For - West: North Town Insurance

Idea Exchange 30 Ask the Insurance Recruiter: Enticing Experienced Producers 32 7 Critical Areas Directors & Officers Should Watch in 2019 36 The Wedge: Do You Hate Your Sales Coach?

16 Closer Look: Top 50 Commercial Lines Leaders 22 U.S. Lawsuit Accuses Walmart of Bias Against Pregnant Employees

W1 PIE FOUNDER TALKS ABOUT ENTRY INTO

CALIFORNIA WORKERS’ COMP MARKET

22 U.S. LAWSUIT ACCUSES WALMART OF

BIAS AGAINST PREGNANT EMPLOYEES

24 Special Report: Inexperienced Drivers, New Ventures Challenge Trucking Insurance Specialists 27 Supreme Court Looks to Favor Business Arbitration with Individuals Over Courts 40 2018 Premium Finance Directory

38 The Competitive Advantage: Why It’s Important to Understand Your Carriers 46 Closing Quote: Helping Americans Bridge the Insurance Gap

46 HELPING AMERICANS BRIDGE

THE INSURANCE GAP

Departments W2 People 11 Declarations 11 Figures 19 Business Moves 28 MyNewMarkets

6 | INSURANCE JOURNAL | WEST NOVEMBER 5, 2018

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OPENING NOTE

Write the Editor: awells@insurancejournal.com

Top 10 Market Conduct Actions

U Publisher Mark Wells mwells@wellsmedia.com

EDITORIAL

SALES

Editor-in-Chief Andrea Wells awells@insurancejournal.com

West Sales Dena Kaplan (800) 897-9965 X115 dkaplan@insurancejournal.com

East Editor Elizabeth Blosfield eblosfield@insurancejournal.com

Romeo Valdez (800) 897-9965 X172 rvaldez@insurancejournal.com

Chief Content Officer Andrew Simpson asimpson@insurancejournal.com

Southeast Editor/MyNewMarkets Amy O’Connor aoconnor@insurancejournal.com South Central Editor/ Midwest Editor Stephanie K. Jones sjones@insurancejournal.com West Editor Don Jergler djergler@insurancejournal.com International Editor L.S. Howard lhoward@insurancejournal.com

Chief Marketing Officer Julie Tinney (800) 897-9965 X148 jtinney@insurancejournal.com

South Central Sales Mindy Trammell (800) 897-9965 X149 mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA and CT) Howard Simkin (800) 897-9965 X162 hsimkin@insurancejournal.com Midwest Sales Lisa Whalen (800) 897-9965 X180 lwhalen@insurancejournal.com East Sales (NY, PA and CT only) Dave Molchan (800) 897-9965 X145 dmolchan@insurancejournal.com

Advertising Coordinator Columnists Erin Burns (619) 584-1100 X120 Chris Burand, Mary Newgard, Randy eburns@insurancejournal.com Schwantz Insurance Markets Manager Contributing Writers Kristine Honey (619) 584-1100 X132 John deCrean, Robert Gordon, khoney@insurancejournal.com

Priya Cherian Huskins, Juan A. Lozano, Stephen M. Murphy, Katrina L. Smeltzer IJ ACADEMY OF INSURANCE Director Patrick Wraight pwraight@ijacademy.com Associate Director Nathan Granitz ngranitz@ijacademy.com

ADMINISTRATION

Chief Financial Officer Mark Wooster mwooster@wellsmedia.com

MARKETING

Marketing Director Derence Walk dwalk@insurancejournal.com Marketing Administrator Gayle Wells gwells@insurancejournal.com

NEW MEDIA

New Media Producer Bobbie Dodge bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop awaldrop@insurancejournal.com

Social Media Manager Ly Short (619) 890-7735 Lshort@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale Sr. Sales & Marketing Coordinator Kelly De La Mora (800) 897-9965 X125 kdelamora@insurancejournal.com

DESIGN/WEB

Chief Technology Officer/ Chief Innovation Officer Joshua Carlson jcarlson@insurancejournal.com V.P. of Design Guy Boccia gboccia@insurancejournal.com Senior Web Developer Chris Thompson cthompson@insurancejournal.com Web Developer Jeff Cardrant jcardrant@insurancejournal.com Web Developer Terrance Woest twoest@wellsmedia.com

CIRCULATION

Circulation Manager Elizabeth Duffy eduffy@wellsmedia.com

8 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

ntimely claims handling and failure to provide required compliant claims, underwriting, and policyholder service disclosures are the U.S. insurance industry’s top compliance shortcomings. That’s according to a review by Wolters Kluwer of U.S. insurers’ market conduct actions published by state insurance regulators during 2017 along with data compiled by the company. The review identifies the business areas that were not only examined by regulators, but also proved to be most challenging for the industry in terms of compliance, according to the government and compliance experts at Wolters Kluwer. “Effectively and sustainably embedding regulatory requirements into claims, underwriting and distribution processes continues to pose challenges for insurers,” said Kathy Donovan, senior insurance compliance counsel, Wolters Kluwer’s. “As routine as many of these compliance challenges may appear, these findings underscore the need for a sound compliance program management system, where regulatory requirements and changes — along with compliance risks and controls — are consistently integrated into an insurer’s exam management program in ways that empower it to strengthen its enterprise controls and audit practices.” The top market conduct actions taken against U.S. property/casualty insurers during 2017: • Failure to acknowledge, pay, investigate or deny claims within specified timeframes • Failure to cancel, non-renew, renew policies in accordance with requirements • Failure to issue correct payments and/or compliant denial notices • Failure to provide required compliant disclosures in claims processing • Using unapproved/unfiled rates and rules, or misapplying rating factors FOR QUESTIONS • Failure to process total loss claims properly REGARDING SUBSCRIPTIONS: Call: 855-814-9547 • Failure to adhere to producer appointment, Outside the U.S., call 847-400-5951 or you may subscribe or change your address online at: termination, records and/or licensing insurancejournal.com/subscribe requirements Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media • Improper/incomplete documentation of Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 underwriting files per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this pub• Failure to provide required compliant lication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended disclosures in underwriting processes to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2016 Wells • Improper/incomplete documentation of Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. claim files. Insurance Journal is a publication of Wells Media Group, Inc.

‘Effectively and sustainably embedding regulatory requirements into claims, underwriting and distribution processes continues to pose challenges for insurers.’

Andrea Wells Editor-in-Chief

POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: For reprints of articles in this issue, contact: Kelly De La Mora at 1-800-897-9965 ext. 125 or kdelamora@wellsmedia.com Visit insurancejournal.com/reprints/ for more information.

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National

‘This legislation not only protects chiropractors and other health professionals who travel with sports teams, it also ensures consistency of care for the athletes who rely on them.’

Trump Signs Legislation to Protect Sports Medical Professionals When Traveling Across State Lines

resident Donald Trump has signed legislation that will protect sports medicine professionals who travel with sports teams by ensuring that their license and liability insurance remains in effect even when they cross state lines. The Sports Medicine Licensure Clarity Act of 2018, as the bill is known, was included in a larger, unrelated piece of legislation (H.R. 302) that passed the Senate overwhelmingly on Oct. 3. The president signed the bill into law Oct. 5. For years, sports health practitioners traveling outside their states to provide care for athletes were left uncovered by their medical malpractice insurance, large-

ly because of jurisdictional issues. Treating injured athletes on the road posed legal and financial risks; if practitioners were sued for malpractice, not only could their home state license be in jeopardy, but their malpractice insurance might not cover them. As the bill was being drafted, American Chiropractic Association (ACA) lobbyists and volunteers worked with Rep. Brett Guthrie (R-Ky.), the chief House sponsor, and the House Committee on Energy and Commerce to ensure that chiropractors would be included in the bill’s final language. The original version may have excluded

10 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

chiropractors from the list of included “sports medicine professionals.” “This legislation not only protects chiropractors and other health professionals who travel with sports teams, it also ensures consistency of care for the athletes who rely on them,” said ACA President N. Ray Tuck Jr. The new law stipulates that healthcare services provided by a covered “sports medicine professional” to an athlete, athletic team, or team staff member in a secondary state outside that professional’s state of licensure will be covered by the appropriate medical malpractice insurance provider. INSURANCEJOURNAL.COM

West Pie Founder Talks About Entry into California Workers’ Comp Market The launch in the state marks the ninth market entry for the Insurtech in six months. By Don Jergler

ie Insurance seems to be slicing its way through workers’ compensation markets in state after state. The Washington, D.C.-based insurtech is a direct provider of workers’ comp that touts its ability to leverage “data analytics, easy-to-use online features, and a seasoned team of insurance experts to create an insurance model that’s as easy as pie.” Pie, which is backed by Greycroft, Aspect Ventures, Sirius Group, Moxley Holdings and Elefund, began offering insurance policies in 2018. The Sirius Group provides insurance backing with $2.5 billion of premium capacity. In October, the company entered California, its ninth market in six months and what promises to be its sweetest opportunity, offering the largest confection of workers’ comp premium in the nation. A recent report from the National Academy of Social Insurance shows Californians accounted for 19.6 percent of all cash and medical benefits paid for work injuries and illnesses in the U.S. Pie’s launch was driven by John Swigart, CEO, who was part of the executive team that led Esurance from a start-up to a $1.3 billion in premium INSURANCEJOURNAL.COM

John Swigart, CEO online agency that was sold to Allstate for $1 billion in 2011. Swigart spoke with Insurance Journal about the company’s growth, it’s entry into the Golden State, how Pie works and why he doesn’t think Pie will put agents out of their jobs. This has been edited for clarity and brevity.

Insurance Journal: California is the 9th

market that Pie has entered within the last six months. Why such rapid expansion and why was California next? Swigart: Well, we’ve always had a picture of being a national company, and so California was able to hit the mark for us.

continued on page W6

NOVEMBER 5, 2018 INSURANCE JOURNAL | WEST | W1

WEST | PEOPLE

Luke Parsons

Andrew Kurata

Mike Cunningham

Kevin Harnetiaux

Jessica White

Don Mollihan

San Francisco, Calif.-based Woodruff Sawyer has named Luke Parsons as a vice president in the private equity and transactional risk group. Woodruff Sawyer has also named Evan Hessel vice president and casualty practice leader. Parsons was previously a principal with Equity Risk Partners. Hessel will be responsible for expanding the current casualty platform and capabilities. He was previously managing director and West Coast casualty leader for Beecher Carlson. Woodruff Sawyer has offices throughout the U.S. Hawaii Insurance Commissioner Gordon Ito has appointed Andrew Kurata deputy commissioner and captive insurance administrator for the department of commerce and consumer affairs insurance division. Kurata previously held the position in an acting capacity. The captive insurance administrator oversees the ongoing regulation of all captives licensed in the state under the insurance commissioner. Kurata has been with the Insurance Division since 2011 as a captive insurance examiner and captive insurance program specialist. Mike Cunningham has been named new co-owner of Shook-Leavitt Insurance Agency in Idaho, which will now do business as Leavitt Inland Pacific Insurance Services. Amy Shook remains with the agency as manager and a licensed agent. The changes will not affect current accounts, and clients will continue to work with those service representatives with whom they are familiar. Cunningham started his insurance career in 1999 and focuses on commercial insurance for the construction industry. Leavitt Inland Pacific Insurance Services is part of Leavitt Group, a privately-held insurance brokerage. EPIC Insurance Brokers and Consultants has named Kevin Harnetiaux senior vice president and chief operating officer of EPIC’s Sacramento, Calif., region, including Gold River, Calif., and Reno, Nev. Harnetiaux joins from the State Fund of California, where he was executive vice president of field operations. Harnetiaux spent most of his earlier career at The Hartford. EPIC is a retail property/casualty insurance bro-

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kerage and employee benefits consultant. San Diego, Calif.-based Cavignac & Associates has named Jessica White a human resources risk advisor. White will provide advice to Cavignac & Associates’ clients to help them reduce the frequency and severity of their employee claims. She primarily interacts with corporate executives and their companies’ respective human resource professionals. White has more than 15 years of experience in human resources. After becoming a licensed attorney, she founded her own firm, JW Employment Law Center, which provided human resources consulting and employment litigation services primarily to the small business community. Cavignac & Associates is a risk management and commercial insurance brokerage firm. GBS Benefits has added Don Mollihan as a senior consultant in Arizona. Mollihan founded Arizona Benefit Consultants LLC in 1995. He has more than 30 years of experience in the brokerage and consulting space. GBS Benefits is part of Leavitt Group, a network of insurance brokers. Alliant Insurance Services Inc. named Brendan Quinlan a senior vice president in its San Francisco, Calif., office. Quinlan was previously area senior vice president with Arthur J. Gallagher & Co. Quinlan is also founder and board member with RiskRadius, a company developing software for brokers and carriers. Newport Beach, Calif.-based Alliant provides property/casualty, workers’ compensation, employee benefits, surety, and financial products and services. San Francisco, Calif.-based Charity First Insurance Services Inc. has named Margarita PazCazares a new business underwriter. Paz-Cazares has more than 25 years of experience as a multiline commercial underwriter. She was previously a senior underwriter for Amtrust/AmCom. She was an account executive and underwriter for Travelers before that. Charity First is a program manager in the property/casualty industry serving nonprofit organizations, religious institutions, and for-profit companies that provide social services and programs. INSURANCEJOURNAL.COM

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West

North Town Insurance Spokane, Washington

Reading a Key to Team Building By Don Jergler

eading is fun. Just ask the employees at North Town Insurance, who were excited when managers at the small agency launched a weekly book reading and discussion session. Employees each have a copy of The Five Dysfunctions of a Team, a popular business title from author Patrick Lencioni that explores team dynamics and offers solutions to help teams perform better. Employees practice different activities associated with the book and they discuss a chapter each week. The exercise is aimed at opening people up to talking about the work environment and solutions to problems, according to Lisa LeBlanc, the firm’s chief operating officer, who said the idea was launched over the summer. “At first it was uncomfortable because it was a very vulnera-

ble type of study,” she said. “By the end, I was amazed how the team was transformed in their trust of each other and their peer-to-peer feedback.” Employees also channeled their positive feedback into responses for Insurance Journal’s annual survey in which they voted North Town as Best Agency to Work For – Bronze award for the West region. The 15-employee firm, which ended 2017 with roughly $1.5 million in revenue, earned high praise from those who took the survey. “Firstly, most recently, we have had very accomplished people, of great quality, character and with their current work, ask to be a part of our team,” one employee wrote. “So awesome and what a statement! I can’t express how proud I am that we are searched out! And another, we do group book studies on team work and self-improvement, amongst

North Town Insurance hosted a community barbecue over the summer. W4 | INSURANCE JOURNAL | WEST NOVEMBER 5, 2018

other things such as outings and get-togethers, to strengthen and purify the bond of the collective team; to enhance and fuel the culture of North Town Insurance.” The employee wrote that Monday was her favorite day of the week. “I look forward to being at work, around my teammates and in a place that feels more home than a career,” the employee wrote. The team environment was one of employees’ most oft-cited positive aspects of the firm. “Our agency has an amazing team that has been pushed by great management staff to become great teammates,” another employee wrote. “We have overcome some big changes and struggles because of the work they have put into training us in insurance knowledge but also how to understand and work with each other’s different personalities. This agency is truly one of a kind.” Several respondents to the survey said they viewed the team-building activities as an investment. “I think my agency is the best to work for because the

amount of care and investment in the people themselves — over sales, numbers and recognition — is unparalleled,” one employee wrote. “It has been hard work, but the heart of the whole team, stemming first from the leadership, cannot be ignored. We are a team to be reckoned. #insuranceDOESNTsuck.” Other team-building exercises included a cruise in August on Lake Coeur d’Alene, a community barbecue and participating in a give-backpack challenge in conjunction with the Boys & Girls Clubs of America. “We commit to hiring the right people. We play together away from work. We donate time and resources to our community. We hold one another accountable,” one employee wrote in explaining what makes the agency the best to work for. LeBlanc said the team-building has also helped build transparency in the office, and that the feedback from the weekly book discussions, as well as regular one-on-one meetings with each team member, has established clear lines of communication all around. “There’s never too much communication and we really promote that,” LeBlanc said. INSURANCEJOURNAL.COM

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WEST | News & Markets continued from page W1

We didn’t want to launch in California and then have it be our first state, just because the size of the state and we wanted to be a little bit more stable in our operations by the time we got there. So we launched in a number of other

states around the country. We did it in California, and it was always very high on our goal list because it is the largest workers’ compensation market in the country. Almost 20 percent of all premium is in California. Obviously,

it has the largest population, but it also has the highest premiums in the country, as well. So, it’s a very, very important market, nationally, for worker’s compensation across the board and it will be a very key and important market for Pie for years to come.

‘We didn’t want to launch in California and then have it be our first state, just because the size of the state and we wanted to be a little bit more stable in our operations by the time we got there. So we launched in a number of other states around the country.’

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IJ: You say in your marketing materials as you head into the Golden State that you’re bringing transparency, fair pricing and convenience to California small business owners. Can you talk about what kind of transparency you’re bringing to California business owners? Swigart: Sure, well just first of all that we think transparency comes with access and we think there just are not that many places where small business owners today can easily shop and see real quotes for workers’ compensation insurance in a digital environment. Most of the offerings from the different insurance companies today are provided through independent agents and not in a digital easily acceptable way. So, if you’re a small business owner and you’re sitting at home on a Thursday night at 11 p.m. and you need to deal with your workers’ compensation insurance, which is a required coverage and every business that has employees has to have it, you don’t have many options and opportunities. So that’s one way we bring transparency to it, another way is through jargon free information about workers’ compensation broadly and about workers’ compensation in California more spe-

continued on page W8

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INSURANCEJOURNAL.COM

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WEST | News & Markets continued from page W6

cifically and trying to make it clear and comprehensible to small business owners what the coverage is, what the protection affords them, and how it’s very important insurance coverage for them to have and the benefits of them and their employees.

IJ: Can you give us an example of what a

policy costs for a typical small business? Maybe a janitorial company and computer repair shop in California? Swigart: The (Workers’ Compensation Insurance Rating Bureau of California) sets the base rates that all companies start with and that’s by class of business, a percentage of payroll. It is charged on an annual basis and so for a janitorial firm, they’re gonna sort of be in a mid-range and the range is for like an accounting firm or an architecture firm or something like that. With office workers sitting at desks with computers, they might have like less than 1 percent of their payroll that they’re paying in workers’ compensation. I think the average in California is 2 to 3 percent range, maybe just under 2 percent depending on the mix of payroll

and it goes up into the higher risk businesses, so you get plumbers, electricians, auto repair shops, restaurants. Then that kind of mid-range, 1.5 to 3 percent kind of range. Then you get riskier businesses painters they might be going up on ladders, general contractors, all the way up to roofers, which are obviously one of the most expensive categories. They could be paying high teens or even in 20 percent of their payroll for workers’ compensation insurance. One of the things that we are bringing with Pie is sophisticated, segmented pricing, so that we are identifying not only the class of the business, but information about the business within its class that we are using to have our underwriters to determine whether we think that the business deserves what’s called a credit or a debit, which is the discount or surcharge on that base rate.

‘I think more and more of this market will shift to direct, essentially none of it happens direct today, and so there’s lots of room for direct model to grow and expand, but I certainly see agents playing a key and important role for a long time to come.’

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Then fundamentally a big piece of what we are doing is just operating in a much more modern, much more technology driven, more efficient environment. So the average expense ratio for commercial line of insurance nationwide and all line of business is about 42 percent. That means 42 cents on the dollar for customers premium is going to the pay the expenses of the insurance company, not paying for the losses and the claims that the customers are actually having, and we think that we can operate at a meaningfully more efficient structure than that and fundamentally just deliver that savings back to the customer in a lower policy price and think that delivers a lot of value to them.

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IJ: What about agents? Do you see them

still fitting into the insurance distribution model? Swigart: A hundred percent, yeah, I think agents play a real important and valuable role. For some customers I think what is true, I saw this in my day with Esurance, where I spent 13 years. Customers are different and some customers wanna do things directly and some customers wanna do things and delegate it to an agent and it will never be only one or the other and so I think there is absolutely a role for agents forever in the long-term. I think more and more of this market will shift to direct, essentially none of it happens direct today, and so there’s lots of room for direct model to grow and expand, but I certainly see agents playing a key and important role for a long time to come.

Web Resource Listen to full audio interview on InsuranceJournal.tv

10/22/18 9:28 AM

INSURANCEJOURNAL.COM

Figures

Declarations

Duck Boat Mediation

“Mediation often leads to faster resolution and allows those affected to avoid a lengthy process of litigation, and most importantly, begin the healing process.” — Ripley Entertainment Inc. spokeswoman Suzanne Smagala-

$1.3 BILLION

The number of tons of frozen, packaged ready-to-eat chicken and pork products produced for restaurants in Louisiana and Texas that were recalled in mid-October by Belle Rose, Louisiana-based A La Carte Foods. The U.S. Food and Drug Administration said the six products contained sausage that had not been federally inspected.

$18.5 BILLION

The amount Minneapolis landlords Stephen Frenz and Spiros Zorbalas, who lost their rental licenses last year, agreed to pay to settle a class-action lawsuit accusing them of improper licensing and other violations. The settlement covers 5,400 tenants dating back to 2012. Tenants could receive up to $10,000 each, with the average expected to be about $2,200. INSURANCEJOURNAL.COM

The estimated loss to the Florida timber industry from Hurricane Michael. Florida Agriculture Commissioner Adam Putnam said pulp mills, sawmills and other production facilities also were damaged in 11 of the state’s top-timber producing counties.

$152,829

The amount in penalties proposed by the Occupational Safety and Health Administration (OSHA) against Hamiltime Herb Co. LLC for safety and health hazards at its Howell, N.J., facility. Among other things, OSHA cited the pet food manufacturer for failing to develop a lockout/tagout program to prevent unexpected machine startup and a respiratory protection program for employees required to wear tight-fitting respirators.

$28 Million That’s the amount of damages Big Island farmers suffered due to the months-long eruption earlier this year of the Kilauea volcano.

Potts comments after the company, along with Branson Duck Vehicles of Branson, Mo., filed to invoke a 1851 law that allows vessel owners to try to avoid or limit legal damages. Facing multiple lawsuits over a summer tourist boat accident in Missouri that killed 17 people, the companies are seeking to enforce mediation.

Drug-Impaired Driving

“Texas needs increased safety-focused leadership at the governor and state legislature level, additional resources, and data-driven strategies to prevent tragedies such as the Concan crash and to reduce the number of fatalities and serious injuries caused by alcohol and other drug-impaired drivers.”

— The National Transportation Safety Board said in a report on its investigation into Jack Dillon Young’s March 2017 collision with a church bus that killed 13 people near Concan, Texas. The NTSB said Young’s use of marijuana and a sedative led to the crash. Young, who survived the crash, said he had taken twice the prescribed dosage of the sedative before the wreck.

Alarming and Unacceptable

“The omission of these sorts of safety measures from Columbia Gas’ operating procedures prior to this disaster is alarming and unacceptable.” — Massachusetts Senators Elizabeth Warren and Ed Markey

said after a review of internal company documents for Columbia Gas, the natural gas company at the center of the explosions north of Boston in mid-September. The senators said Columbia Gas was “woefully unprepared” to prevent or respond to the disaster and didn’t have adequate safety and response measures in place when more than 80 explosions and gas fires struck Lawrence, North Andover and Andover.

Crooked Contractors

“I’ve already heard of crooked contractors who are asking for cash up front and pressuring some to sign an assignment of benefits contract.”

— Florida CFO Jimmy Patronis, in an Oct. 15 press release from

the Department of Financial Services. The state is on alert for assignment of benefits (AOB) abuse after Hurricane Michael for fear it could inflame the current crisis that is leading to higher insurance rates and coverage restrictions.

Phones and Earthquakes

“Most folks expect to get the alerts on their phone and that is of course the preferred way that we’d like to get it into everybody’s hands. Unfortunately, the technology that is built into your phone to send you notifications was not designed with earthquake early warning in mind.”

— Doug Given, earthquake early warning coordinator for the

U.S. Geological Survey, said automated alerts from the fledgling West Coast earthquake early warning system are not ready for use in mass public notification yet.

NOVEMBER 5, 2018 INSURANCE JOURNAL | NATIONAL | 11

NATIONAL | News & Markets

Changing World for P/C Insurance Underwriters: Guy Carpenter

roperty/casualty insurers’ operating environment today is very different than just a few short years ago. Lines that were stable are now volatile and those that have struggled are looking profitable, reinsurance intermediary Guy Carpenter & Co. says in its 2018 Risk Benchmarks Research Report, which focuses on the risk and performance of U.S. P/C insurers. Also, the familiar underwriting cycle has decoupled materially across long-tail casualty lines, with profitability, growth and reserve development moving in widely different directions by line and segment, Guy Carpenter analysts add. It seems that every element of the insurance value chain is evolving rapidly. “The accelerating rate of change has been a constant in the P/C insurance market over

the past several years,” according to Tim Gardner, CEO, North America at Guy Carpenter. “The recent performance of the P/C industry seems a departure from the long-term trend, rather than the familiar regression towards it.”

‘The accelerating rate of change has been a constant in the P/C insurance market over the past several years.’ In its annual review of U.S. insurance statutory financial data, Guy Carpenter found that strong equity market performance pushed industry surplus to its highest level ever at the end of 2017. But the largest year of North American catastrophes since 2005 drove the gross loss ratio of the study’s median insurer

12 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

up 12 percent in just two years. In auto lines, claims frequency and severity increased as road congestion, repair costs and jury awards grew; road speeds increased; and more drivers were distracted by devices. These trends represent a shift for many carriers which, until recently, viewed personal auto insurance as a steady source of profitability, causing some to focus on homeowners or diversify into commercial lines. Meanwhile, more than 60 percent of workers’ compensation carriers have achieved an underwriting profit since 2013, even as rates continue to decline. Though decreasing job readiness and trends in opioid abuse and legalized marijuana may impede future profitability, advancements in claims management and workplace safety are helping carriers manage risk, and many are already adjusting loss trend assumptions for such innovations. “Insurtech innovations that just recently seemed like science fiction now offer insurers more nimble platforms and more granular data to better

price, manage and mitigate risk. Profitable growth over the next 10 years is likely to be driven by realizing greater efficiency by transitioning away from legacy systems and leveraging new technology and data,” said Gardner. Commercial casualty lines saw performance diverge to an extent not seen in over two decades, with correlations on initial and ultimate booked loss ratios dropping from near-perfect dependence to near independence or negative correlation in some cases, as line-specific claims and exposure trends trumped cyclical market conditions. If this decoupling persists, it could mean an increase in diversification benefit for carriers writing multiple commercial casualty lines. Finally, increases in non-modeled losses like wildfires and assignment of benefit claims have implications for existing models calibrated on historic data. Guy Carpenter warns that carriers must factor these and other emerging risks into capital and risk management strategies. INSURANCEJOURNAL.COM

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NATIONAL | Closer Look | Top Commercial Lines Agencies

Commercial Lines Leaders

Top 50 Commercial Lines Agencies

About the Commercial Lines Leaders: The 2018 Commercial Lines Leaders in this special feature are taken from Insurance Journal’s Top 100 Property/Casualty Independent Agencies as reported in August. This list utilizes only the 2017 commercial lines property/ casualty revenue numbers of the independent agencies and brokerages that submitted data to the Top 100 agencies report. For more information on Insurance Journal’s Top 100 Property/Casualty Independent Agencies list, contact awells@insurancejournal.com.

Ranked by Total 2017 Commercial Lines P/C Revenue 2018 2017 Rank Rank Agency Name 1 1 2 2 3 3 4 6 5 4 6 5 7 7 8 9 11 10 9 11 8 12 10 13 14 14 13 15 18 16 16 17 17 18 19 22 20 23 21 24 22 21 23 25 24 26 25 27 26 30 27 28 28 34 29 33 30 38 31 32 39 33 34 47 35 48 36 44 37 36 38 39 41 40 43 41 42 35 43 46 44 45 46 47 48 45 49 49 50

2017 Commercial Lines P/C Revenue

2017 Total P/C Revenue

2017 Other than P/C Revenue

2017 Total P/C Premium Written

Lockton Companies $1,056,394,000 $1,073,929,000 $490,360,000 $8,050,353,000 HUB International $1,047,596,000 $1,357,083,000 $500,869,000 $10,036,095,000 Alliant Insurance Services Inc. $765,756,747 $782,577,900 $309,565,154 $5,484,433,677 Acrisure LLC $547,390,271 $747,628,431 $290,192,296 $7,030,450,753 USI Insurance Services $525,911,817 $600,917,117 $489,305,709 $4,970,675,196 AssuredPartners Inc. $501,060,456 $610,969,843 $416,220,690 $4,290,986,340 BroadStreet Partners Inc. $340,900,000 $471,154,000 $74,891,000 $3,688,691,000 EPIC Insurance Brokers & Consultants $267,101,816 $284,767,295 $115,150,264 $2,000,000,000 Risk Strategies Company $183,121,000 $209,710,000 $49,500,000 $2,650,000,000 NFP $180,600,000 $258,000,000 $1,071,000,000 $1,500,000,000 Integro Insurance Brokers $167,609,000 $183,357,000 $91,784,000 $3,959,000,000 Insurance Office of America Inc. $151,687,220 $171,579,999 $22,047,028 $1,662,783,938 Leavitt Group $134,944,000 $168,661,000 $87,147,000 $1,331,379,000 IMA Financial Group Inc. $116,590,615 $125,222,732 $32,766,498 $1,401,472,659 Higginbotham $98,525,000 $110,184,000 $62,661,000 $767,629,000 Woodruff Sawyer $94,800,000 $96,100,000 $32,100,000 $940,900,000 Heffernan Insurance Brokers $89,191,701 $94,343,653 $27,025,484 $722,395,860 BXS Insurance** $79,135,000 $90,439,000 $27,978,000 $664,825,201 Hylant Group Inc. $76,210,635 $81,750,932 $48,099,345 $693,000,000 INSURICA Inc. $74,405,373 $83,186,632 $14,699,321 $597,198,733 PayneWest Insurance $70,918,265 $95,249,555 $23,105,235 $788,864,179 Cross Financial Corp., dba Cross Insurance $67,800,900 $117,100,000 $23,000,000 $900,000,000 Assurance $64,773,165 $70,888,785 $34,558,966 $540,093,407 Propel Insurance $60,500,000 $65,000,000 $12,600,000 $483,000,000 Hilb Group $59,493,196 $74,366,496 $37,977,679 $540,126,996 Prime Risk Partners Inc. $54,361,005 $79,201,558 $17,595,820 $534,349,084 The Graham Company $44,744,845 $48,667,737 $8,266,088 $289,475,530 Marshall & Sterling Enterprises Inc. $43,967,615 $59,026,579 $18,432,632 $353,790,246 Houchens Insurance Group Inc. $41,576,865 $45,766,832 $19,875,438 $331,962,000 Parker Smith & Feek Inc. $41,084,000 $44,337,000 $11,735,000 $324,058,000 Relation Insurance Services (formerly Ascension Inc.) $41,047,000 $48,145,000 $49,305,000 $418,652,000 The Horton Group Inc. $37,964,647 $43,751,056 $28,669,846 $338,722,833 LMC Insurance & Risk Management Inc. $36,191,859 $40,117,566 $15,651,402 $294,681,603 Eastern Insurance Group LLC** $35,096,984 $64,297,757 $19,265,538 $389,642,483 Professional Insurance Associates Inc. $35,000,000 $50,000,000 $0 $350,000,000 Lawley Insurance $34,782,347 $45,858,150 $25,530,775 $331,293,675 Bowen, Miclette & Britt Insurance Agency LLC $34,286,005 $37,778,095 $10,075,675 $264,090,415 Andreini & Company $34,068,565 $35,861,648 $9,045,360 $231,602,314 The Mahoney Group $32,926,218 $34,956,410 $5,581,700 $291,171,439 Starkweather & Shepley Insurance Brokerage Inc. $32,726,885 $50,177,012 $5,020,948 $327,014,154 Alera Group $32,700,000 $37,500,000 $202,000,000 $0 TrueNorth $32,054,564 $36,545,570 $20,114,949 $813,000,000 James G Parker Insurance Associates $32,033,785 $37,905,000 $4,575,000 $320,000,000 Towne Insurance** $31,691,037 $45,711,697 $14,488,881 $327,025,676 Insureon $31,487,860 $31,487,860 $0 $297,999,041 Bolton & Company $30,012,160 $27,977,533 $18,643,889 $246,283,640 ABD Insurance and Financial Services $29,000,000 $30,500,000 $33,900,000 $228,100,000 Moreton & Company $28,780,212 $32,360,865 $15,697,393 $375,000,000 Charles L. Crane Agency $28,000,000 $33,000,000 $5,000,000 $33,000,000 Sunstar Insurance Group $27,577,547 $32,452,746 $2,385,066 $291,365,770

No. of Main Employees Office 7,000 10,190 3,032 4,388 7,155 5,100 2,770 1,308 1,075 4,300 1,118 1,077 1,645 672 925 442 420 635 678 572 727 820 490 343 667 583 187 431 282 224 469 376 285 400 55 399 218 210 175 233 1,100 310 210 312 254 186 275 204 270 224

Website

Kansas City, Mo. Chicago, Ill. Newport Beach, Calif. Caledonia, Mich. Valhalla, N.Y. Lake Mary, Fla. Columbus, Ohio San Francisco, Calif. Boston, Mass. New York, N.Y. New York, N.Y. Longwood, Fla. Cedar City, Utah Denver, Colo. Fort Worth, Texas San Francisco, Calif. Walnut Creek, Calif. Tupelo, Miss. Toledo, Ohio Oklahoma City, Okla. Missoula, Mont. Bangor, Maine Schaumburg, Ill. Tacoma, Wash. Richmond, Va. Atlanta, Ga. Philadelphia, Pa. Poughkeepsie, N.Y. Bowling Green, Ky. Bellevue, Wash. Walnut Creek, Calif. Orland Park, Ill. West Des Moines, Iowa Natick, Mass. San Carlos, Calif. Buffalo, N.Y. Houston, Texas San Mateo, Calif. Mesa, Ariz. East Providence, R.I. Deerfield, Ill. Cedar Rapids, Iowa Fresno, Calif. Virginia Beach, Va. Chicago, Ill. Pasadena, Calif. San Mateo, Calif. Salt Lake City, Utah St. Louis, Mo. Memphis, Tenn.

www.lockton.com www.hubinternational.com www.alliant.com www.acrisure.com www.usi.com www.assuredpartners.com www.broadstreetcorp.com www.epicbrokers.com www.risk-strategies.com www.nfp.com www.integrogroup.com www.ioausa.com www.leavitt.com www.imacorp.com www.higginbotham.net www.woodruffsawyer.com www.heffins.com www.bxsi.com www.hylant.com www.insurica.com www.paynewest.com www.crossagency.com www.assuranceagency.com www.propelinsurance.com www.hilbgroup.com www.primeriskpartners.com www.grahamco.com www.marshallsterling.com www.higusa.com www.psfinc.com www.relationinsurance.com www.thehortongroup.com www.lmcins.com www.easterninsurance.com www.piainc.com www.lawleyinsurance.com www.bmbinc.com www.andreini.com www.mahoneygroup.com www.starshep.com www.aleragroup.com www.truenorthcompanies.com www.jgparker.com www.towneinsurance.com www.insureon.com www.boltonco.com www.theabdteam.com www.moreton.com www.craneagency.com www.sunstarinsurancegroup.com

Editor’s Note: ** = Bank Owned Agency

16 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

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Business Moves | NATIONAL Hays Cos., Brown & Brown

Brown & Brown Inc. has agreed to acquire the assets of the Hays Companies insurance operations. The deal for the Minnesota-based insurance broker with $200 million in revenue marks the largest acquisition ever by Brown & Brown in its 75-year history. Headquartered in Minneapolis, Hays Cos. is comprised of more than 700 risk management and employee benefits professionals in 32 locations across 21 states. The transaction is expected to close in November 2018. Jim Hays formed the Hays Companies 24 years ago. Since formation, Hays, along with Mike Egan, Bill Mershon, Steve Lerum and others have helped grow the firm. The Hays Companies name, the executive group, and account teams will not change, according to Hays. Hays Companies will operate as a region inside Brown & Brown Retail, one of four divisions. The Retail division brought in $940 million in revenue in 2017, which was 50 percent of the company’s total. The operations will continue to be led by Hays, as chief executive officer of the Hays Companies, and Egan will continue to serve as president/ chief operating officer. Following completion of the transaction, Hays will join Brown & Brown as vice chairman and will serve on the board of directors, and Eagan will become a regional president of the Brown & Brown Retail Segment. Eagan will continue reporting to Hays and Jim will report up to Powell Brown, CEO of Brown & Brown. INSURANCEJOURNAL.COM

Based in Daytona Beach, Fla., Brown & Brown is one of the largest insurance brokers in the world and one of the most active acquirers of agencies. This year alone, it has already done 19 deals with total annualized revenue topping $95 million.

HIIG, Creative Risk Underwriters

Houston International Insurance Group has agreed to purchase the remaining shares it did not own of Creative Risk Underwriters, a managing general underwriting agency based in Marietta, Ga., specializing in Medical Stop Loss. Following completion of the transaction, CRU will be integrated into HIIG Accident & Health (HIIG A&H) with Michael Remeika, founding partner and president of CRU, serving as president of the combined companies and reporting to L. Byron Way, chief executive officer of HIIG A&H. The combined companies are expected to generate more than $125 million in gross written premium in 2019. Based in Houston, HIIG is an insurance holding company formed in 2007 by Stephen L. Way. HIIG’s subsidiary insurance companies consist of Houston Specialty Insurance Co. and Imperium Insurance Co. The insurance companies are rated A/A- (Excellent) by A.M. Best Company.

Seeman Holtz Property & Casualty, Spencer Insurance Agency

Florida-based Seeman Holtz Property & Casualty Inc. has acquired Spencer Insurance Agency LLC, headquartered in

Hobe Sound, Fla. Spencer Insurance Agency has been serving the Eastern coast of Florida for over 25 years and offers coverage for homes, vehicles or personal assets.

Mitchell International, Genex

Mitchell International, a San Diego, Calif.-headquartered provider of technology, connectivity and information to the property and casualty insurance and collision repair industries, and Genex, a provider of clinical solutions to the workers’ compensation, auto and disability insurance markets, have entered into a definitive merger agreement in which Genex will become a new division of Mitchell. In this transaction, Mitchell will expand its capabilities and resources in order to further assist clients across the auto, workers’ compensation and disability claims process. Genex will become a new division of Mitchell focused on clinical solutions, complementing Mitchell’s Auto Physical Damage, Casualty and

Pharmacy Solutions divisions. The merger is subject to customary closing conditions, including regulatory approvals.

Worldwide Facilities LLC, Draco Insurance Solutions Inc.

Worldwide Facilities LLC, a national wholesale insurance broker, managing general agent and program underwriter, has acquired the assets of Draco Insurance Solutions Inc., a Boston, Mass.-based program manager specializing in the public transportation sector. The Draco team, led by Executive Vice President Scott Stevens, has underwriting expertise in the primary transportation space with a particular emphasis on the public auto sector.

IAT Insurance Group, IFIC Surety Group Inc.

IAT Insurance Group, a Raleigh, N.C.-headquartered provider of specialty property and casualty products, has finalized its acquisition of Newark, N.J.-headquartered IFIC Surety Group Inc.

continued on page 20

NOVEMBER 5, 2018 INSURANCE JOURNAL | NATIONAL | 19

NATIONAL | Business Moves continued from page 19 Company to MLMIC Insurance Company.

Alliant Insurance Services, Zande Group

IFIC consists of International Fidelity Insurance Company and its subsidiary Allegheny Casualty Insurance Company. Following the acquisition, IFIC becomes IAT’s seventh business unit, joining Specialty, Commercial Transportation, Programs, Assumed Reinsurance, Excess Casualty Mid-Market and Inland Marine. IAT plans to maintain the IFIC brand following the acquisition, which reflects IAT’s entry into the surety market.

MLMIC Insurance Company, National Indemnity Company

MLMIC Insurance Company, formerly known as Medical Liability Mutual Insurance Company, has completed its conversion from a property and casualty mutual insurance company to a property and casualty stock insurance company and its acquisition by National Indemnity Company, a subsidiary of Berkshire Hathaway Inc. The conversion and acquisition follow a September 6, 2018, approval by the superintendent of the New York

State Department of Financial Services and a September 14, 2018, vote of policyholders of MLMIC with policies in effect on July 14, 2016. The cash consideration resulting from the conversion will be paid out to eligible policyholders – policyholders with policies in effect from July 15, 2013 through July 14, 2016 – or their designees as promptly as practicable, according to a MLMIC press release. As a subsidiary of Berkshire Hathaway, MLMIC will have enhanced capacity and financial strength to continue to serve New York State physicians, hospitals and dentists, the press release stated. MLMIC remains the largest underwriter of medical professional liability insurance in New York and continues to be a New York-focused medical malpractice writer regulated by New York state. It will be operated by the same board of directors and staff. Per an amended and restated charter, MLMIC has changed its full name from Medical Liability Mutual Insurance

20 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

Alliant Insurance Services has acquired the property/casualty insurance services firm, Zande Group, based in Des Plaines, Ill. Zande Group delivers premium, tailored commercial and personal insurance products and services to clients both in Illinois and throughout the United States. The firm provides a broad array of products and solutions, including risk management, workers’ compensation, fiduciary liability, directors and officers liability (D&O), inland marine and cyber insurance. Zande Group will maintain its current leadership and will continue to service its diverse portfolio of clients. Terms of the agreement were not disclosed. Headquartered in Newport Beach, California, Alliant Insurance Services Inc. provides property/casualty, workers’ compensation, employee benefits, surety, and financial products and services to clients nationwide.

Kapnick Insurance Group, A.E. Mourad Agency Kapnick Insurance Group has acquired Warren, Mich.-based A.E. Mourad Agency. The Mourad team will join Kapnick in its Troy offices in early 2019. A.E. Mourad is an independent agency that provides a variety of services including small business benefits and commercial and personal insurance.

Kapnick Insurance Group is a fourth generation, privately held professional service firm.

American Financial Group, ABA Insurance Services

American Financial Group Inc., based in Cincinnati, Ohio, is acquiring ABA Insurance Services Inc. from American Bankers Mutual Insurance Ltd. Based in Shaker Heights, Ohio, ABAIS provides directors and officers and other complementary insurance solutions for banks, small businesses and nonprofit organizations, with a history that dates back 30 years. This acquisition will further strengthen Great American’s leadership position in targeted specialty casualty classes of business. Under the terms of the agreement, AFG will pay ABMI approximately $28 million in cash at closing. This business is expected to contribute approximately $50 million in net written premiums on an annual basis. The transaction is expected to close in the fourth quarter, following customary regulatory approvals. Following the transaction, ABAIS will continue to operate under the ABAIS brand and will become Great American Insurance Group’s 34th specialty P/C business unit. American Financial Group is an insurance holding company with assets over $60 billion. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Co. INSURANCEJOURNAL.COM

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NATIONAL | News & Markets pregnancy discrimination in employment. The EEOC filed suit (EEOC v. Walmart Stores East, LP, d/b/a Walmart Distribution Center #6025, Civil Action No. 3:18cv-783) in U.S. District Court for the Western District of Wisconsin after first attempting to reach a pre-litigation settlement through its conciliation process.

U.S. Lawsuit Accuses Walmart of Bias Against Pregnant Employees By Andrew G. Simpson

almart is again being accused of violating federal law by failing to accommodate workers’ pregnancy-related medical restrictions. According to a lawsuit that was brought by the federal Equal Employment Opportunity Commission (EEOC), Alyssa Gilliam and a class of pregnant employees at Walmart’s Distribution Center in Menomonie, Wis., were not allowed to take part in a light duty program offered by the company that is designed to accommodate other workers’ restrictions. “What our investigation indicated is that Walmart had a robust light duty program that allowed workers with lifting restrictions to be accommodated,” said Julianne Bowman, the EEOC’s district director in Chicago who managed the federal agency’s pre-suit admin-

istrative investigation. “But Walmart deprived pregnant workers of the opportunity to participate in its light duty program. This amounted to pregnancy discrimination, which violates federal law.” Walmart spokesman Randy Hargrove called Walmart a “great place for women to work” and said the company plans to defend itself against the allegations. Hargrove also said Walmart has updated its accommodations policy over the last several years and its policies “have always fully met or exceeded both state and federal law and this includes the Americans with Disabilities Act and the Pregnancy Discrimination Act.”

22 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

The giant retailer faces at least two other class action lawsuits alleging pregnancy discrimination, one in New York and one in Illinois. The Illinois lawsuit similarly accuses the firm of denying requests by pregnant women to limit heavy lifting, ladder climbing and other potentially dangerous tasks. The New York case targets Walmart’s absence policy, with two former employees charging they were fired for missing time due to pregnancy medical issues. The alleged conduct violates Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act (PDA), which prohibits

‘But Walmart deprived pregnant workers of the opportunity to participate in its light duty program. This amounted to pregnancy discrimination, which violates federal law.’ The EEOC is seeking full relief, including back pay, compensatory and punitive damages, and non-monetary measures to correct Walmart’s practices going forward. “By accommodating a large percentage of its non-pregnant employees with light duty work while denying those same accommodations to pregnant workers who are similar in their ability or inability to work, Walmart acted in contravention of the law,” Gregory Gochanour, regional attorney of the EEOC’s Chicago District Office, said. Walmart provides “accommodations every day across all of our stores, clubs, distribution centers and offices,” according to Walmart’s Hargrove. “This case is not suitable for class treatment, and we deny the allegations,” he told INSURANCEJOURNAL.COM

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NATIONAL | Special Report | Truckers

Inexperienced Drivers, New Ventures Challenge Trucking Insurance Specialists

By Andrea Wells

he transportation industry is considered a barometer of the U.S. economy. If freight is trending up, so too is the U.S. economy. But capacity constraints for trucking – including a shortage of qualified drivers, low truck supply and the rising costs of doing business – are squeezing trucking firms from all sides. Also, a pending Supreme Court case could put the transportation sector in a further bind. According to the American Trucking Associations’ President and CEO Chris Spear, the trucking industry is undergoing the fastest growth in 20 years. In a late October meeting, he cited tax reform, increases in truck tonnage, employment, manufacturing and equipment orders as

24 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

drivers of the industry’s growth. The positive trend— a rapid increase in the demand for trucking— is being undermined by a driver shortage in a tight labor market. “Right now, the economy is very strong, freight levels are up, but there’s actually not enough drivers and trucks out there to handle the current freight loads,” said Pete Feeney, regional director of SCU Transportation, a CRC Group Company. While the high demand has pushed up the freight rates for truckers, a lack of drivers is holding back some growth. “The driver shortage is a big issue,” Feeney said. Laura Ann Howell, chief operating officer of Reliance Partners, says that the “quick and steep growth trajectory” trucking firms face today is exacerbating the sector’s need for qualified drivers even further. “There is so much freight to move right now and because of that we’ve seen most of our clients grow and add equipment month over month,” says the executive from Reliance, an independent agency in Chattanooga, Tenn., that specializes in transportation. The rising costs of doing business is another constraint on trucking firms. “The cost of a truck today is unbelievably high compared to just five years ago,” Howell said, especially when the costs of safety-related technology are added. “The industry is seeing the cost of some technologies – smart phones and required electronic logging devices (ELD) that are compatible with an app – come down but it’s still very expensive to run a trucking company and their margins are tight.” The cost to insure a trucking company continues to rise as well. Rates skyrocketed over the last couple of years, according to Brad Allen, executive vice president of AmWINS’ Transportation Underwriters. “I’d say in the last quarter or two, they’ve come down a little bit but they’re still high; everybody is averaging rate increases and flat renewals are a thing of the past,” he said. The trucking industry, especially the small-to-mid-sized fleets, is having to scrutinize every aspect of their operation INSURANCEJOURNAL.COM

to cost-save in today’s market, according to Mark Sullivan, transportation underwriter at Midlands a managing general agency and wholesale broker based in Oklahoma City. “They have to do that to pretty much keep their doors open and the cost of insurance plays a huge part in that,” he says. Tom Powell, CEO of Cal Valley Insurance Services, an independent agency based in Fresno, Calif., that has specialized in the trucking industry since opening its doors in 1984, says the trucking industry to some degree has paralleled the experience in the overall commercial auto market. “We’re seeing rate increases in both physical damage as well as in the auto liability piece across the board,” Powell said. “Underwriting has tightened up and there are more demands being asked of the client, in terms of what they’re doing from a safety standpoint.” Powell said underwriters are paying closer attention to hiring practices for employee drivers. There are a lot more requirements on the motor carrier today, he added. Powell doesn’t expect insurance rates to decline anytime soon either. “We didn’t see the rates go down in 2018 and I’m pretty sure that the rates are going to stay where they are at and maybe even potentially grow a little more in 2019,” he said. But Powell remains optimistic. By 2020, Powell believes the trucking insurance market will become a little more competitive. “It’ll take insurance carriers about two-and-a-half years to go through the process of rate increases to get enough dollars where they finally see some kind of profits,” he said. “When those profits start to occur, carriers will reduce rates to get what they consider quality risks.”

New Ventures and Small Fleets

Despite its challenges, the trucking sector presents opportunities for insurance specialists, especially in the small fleet (0-10 units) and new venture space. “New trucking companies are coming online every single day,” Howell said. “As a result, we’ve seen the appetite for new ventures change a little bit because new trucking companies keep popping up.” INSURANCEJOURNAL.COM

AmWINS’ Allen shares one question he hears often from retail agents seeking coverage: “Is a new venture going to be something you can handle?” While new ventures are growing, finding the right insurance company, at the right price, can be difficult, he said. “There is a little bit of a gap right now in the marketplace to write new ventures,” he said. There are plenty of new trucking firms in the marketplace, including drivers who have experience with another trucking company and try to start up their own shop with one or two units, or new truck owners who don’t have experience under their own DOT numbers. However, these new ventures are a challenge to insure. “That ‘new venture’ is looking at a pretty high premium for the uncertainty from an underwriting prospective,” he said. Carriers willing to write these accounts are few and far between. Another constraint, especially for the smaller trucking fleets, is the growth itself, says Feeney. “For example, if you have a small trucking firm, with two units, but they’ve been in business for three years and are looking to pick up another contract and add two more units – that’s easier said than done,” Feeney said. “That’s a challenge because a lot of insurance carriers have strict guidelines on growth.” According to Feeney, in today’s growing trucking sector, smaller fleet accounts, as well as large fleets, are looking to add more units/trucks. “So, if you’re fortunate enough to be able to find a driver and you pick up that contract and then all of a sudden you turn around and say to your agent, add on this unit, the insurer might not go for that,” he said. There are good reasons from an underwriting perspective. “Carrier data shows that when small accounts have X amount of growth, the loss ratios on those accounts tend to jump up. So, that becomes a challenge for those smaller insureds.” If a small trucking firm grows too quickly it may be forced to move to another insurance carrier, and that could be a 50 percent jump in premium, Feeney said. Small trucking firms simply don’t have

the infrastructure to grow at a fast-pace, Sullivan added. “If growth is slow and organic that’s OK. But there can be problems when an operation starts out with two or three units and tries to grow to 15 their first year – they may be adding more revenue for more loads, but they are not investing that back into their company in safety and risk management.” Sullivan knows firsthand the risks. “We were writing a fair amount of new ventures last year but now we’ve slowed down this year because it’s about a 50-50 case that the violation scores will be tremendously horrible or do really well. It’s really just a lack of control when it comes to smaller fleets and their growth,” he said. Sullivan still writes a fair amount of new ventures but reviews the accounts about every six months with a plan in place to monitor the trucking firm’s growth.

Driver Shortage Continues

The ATA estimated the U.S. truck driver shortage at a deficit of 51,000 drivers at the end of 2017; that’s up from a shortage of 36,000 in 2016. The problem is expected to continue into 2019, according to the ATA. Jerry Gillikin, executive vice president of HUB’s transportation practice, says even the promise of higher pay isn’t helping. Transportation firms are raising driver wages and it’s still not enough to fulfil the industry’s needs, he says. Private fleet drivers saw their pay rise to more than $86,000 from $73,000 or a gain of nearly 18 percent since 2013, according to a survey by the ATA. “Every trucking company that we talk to could probably increase their business between 10 and 25 percent overnight if they could find the drivers to fill their trucks,” said Steve Bojan, HUB’s Risk Services Transportation Practice Leader. While hiring drivers is by itself a difficult task, hiring drivers that insurers will approve is another challenge. Trucking companies are trying to cast a wide net when hiring drivers, but their insurers are restricting their applicant pool. “That’s a big part of the challenge,” according to Bojan.

continued on page 26

NOVEMBER 5, 2018 INSURANCE JOURNAL | NATIONAL | 25

NATIONAL | Special Report | Truckers continued from page 25 Insurers have strict guidelines. “They have limits in terms of driver age, in terms of experience. We have clients that would like to hire drivers with one year of experience, but their insurance carrier says you can’t ... they want a minimum of two years of experience,” Bojan said. Most insurance companies want drivers who are at least 21 years old with two years of driving experience, according to Feeney. “And that begs the question, who’s going to insure them for the first two years? And what about people under 21 years old? We’ve got to figure a way to attract more drivers to the industry and then we have to find a way to insure them,” he said. At this point, insurance carriers haven’t really come up with a game plan for how to go about doing that, Feeney said.

Independent Contractors vs. Employees

If rising costs, risky new ventures and a shortage of experienced drivers are not enough for transportation executives and their insurance agents to worry about, there is also a pending U.S. Supreme Court decision — New Prime Inc. vs. Oliveira — involving the trucking industry’s use of independent contractors that could increase the pressure on the transportation industry and insurance market. “We absolutely have our eye on this case,” Bojan said. “The biggest area of growth for truck drivers today is independent contractors.” On Oct. 3, Supreme Court justices heard the case of Dominic Oliveira, a long-haul truck driver who filed a suit against the transportation firm New Prime three years ago, alleging that the company failed to pay him minimum wage and, at times, even charged him for working. The case questions the use of the “independent contractor” designation to reduce pay and benefits for workers who perform identical work duties as employees of the firm. As the battle over issues surrounding independent contractors vs. employees continues, the court’s decision could end up affecting nearly every sec-

tor of the U.S. workforce. “The case turns on whether Oliveira was properly categorized as an independent contractor, and, if so, whether he is entitled to a court hearing on his claims or if he must submit to arbitration,” according to David Fierro, in an article published on the National Independent Truckers Insurance Co.’s website in early October. “Arbitration is generally preferred by employers as a more efficient dispute resolution mechanism, although critics say it can serve as a shield for unfair corporate practices.” According to Fierro, at issue in the case is the meaning of the nearly 100-yearold Federal Arbitration Act (FAA), which exempted certain types of transportation workers from mandatory arbitration agreements. “Specifically, the law exempts ‘contracts of employment.’ Much of the battle being waged is whether, in 1925, that phrase would have included independent contractors or only employees.” “Where we see growth in companies, big growth, is in these owner-operator fleets, especially in urban areas,” Borjan said. “A lot of folks see this as their entree into entrepreneurship. … This case has the potential to fundamentally change the way that owner operators are treated or looked at, depending on how the ruling goes and how specific it is.” In recent months, several states have also been addressing the issue. Recent state Supreme Court rulings in New Jersey and California have limited the definition

26 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

of an independent contractor. Massachusetts and Illinois have also cracked down on the definition. The recent 2018 California Supreme Court ruling in the Dynamex case created what is called an ABC test. Under the ABC test, workers are presumed to be employees and hiring businesses can designate a worker as independent contractors only if they can show three criteria: A) “that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work; and B) “that the worker performs work that is outside the usual course of the hiring entity’s business; and C) “that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.” Right now, the court ruling in California is specifically for the trucking industry. However, it could soon move into other industries, such as ride share services (e.g., Uber and Lyft), beauty salons, real estate and insurance agencies, according to Bill Schoeffler and Catherine Oak of Oak & Associates, authors of Insurance Journal’s Minding Your Business column. Bojan says the Dynamex decision already has made it difficult in California to run an owner-operator fleet because of the requirements in the ABC test. “From an insurance standpoint, it has a huge potential both to affect workers’ compensation and employment practices liability,” he said. “We could see a huge spike in claims if this were to move in a negative direction from the trucking industry standpoint.” There’s a lot on the line, he says. Whatever happens, Gillikin says the insurance industry will find a way to make it work. “We’ve got smart insurance people, and we’ve got smart motor carriers, and we’ll figure out a way to make it keep working for the economy. There’s always something you can do.” INSURANCEJOURNAL.COM

News & Markets | NATIONAL

Supreme Court Looks to Favor Business Arbitration with Individuals Over Courts By Andrew Chung

.S. Supreme Court justices signaled late last month that they may issue more pro-business rulings giving companies wide latitude to use arbitration to resolve disputes with employees, customers or other businesses rather than the courts. The nine justices heard arguments in two cases testing the scope of company agreements forcing disputes to be handled by an arbitrator instead of a judge, one involving a California lamp retailer and the other involving a Texas dental equipment distributor. In their questioning of the parties in the cases, the justices indicated a reluctance to limit the ability of companies to keep such disputes out of court. The conservative-majority Supreme Court in recent INSURANCEJOURNAL.COM

years has issued a series of decisions endorsing the power of arbitration and curbing class-action claims of various types. Both cases heard on Oct. 29 involved appeals of lower court rulings that business groups complained would harm the ability of companies to use arbitration as a way to resolve conflicts and would undermine federal arbitration law. Companies prefer to arbitrate claims because it is cheaper and faster than litigation in court, which carries a greater risk. Businesses also prefer to handle disputes with individuals – instead of groups in class-action lawsuits – because such litigation can result in hefty damages awards by juries and is harder to fight. In May, the justices upheld the legality of compelling workers to sign arbitration

agreements waiving their right to bring class-action claims in a blow to employee rights. Critics have said arbitration can make it tougher to root out misconduct such as discrimination within companies because the proceedings generally are kept private, an issue that has taken on greater resonance with the #MeToo movement against sexual harassment and misconduct. California retailer Lamps Plus Inc. sought to prevent arbitration by workers as a group instead of as individuals in a dispute in which a warehouse employee named Frank Varela filed a class action lawsuit after his and other workers’ personal information was stolen by hackers in a company data breach. The San Francisco-based 9th U.S. Circuit Court of Appeals last year ruled that the claims had to be resolved by an arbitrator rather than a court, but agreed they could move forward as a group, prompting the company’s appeal. At issue is whether courts can allow arbitration as a group

even if an agreement does not explicitly provide for the collective arbitration of claims. Conservative Chief Justice John Roberts said the court in prior cases found that class arbitration is inconsistent with the purpose of arbitration itself, expressing doubt that contracts should be interpreted to allow “a type of arbitration that is like a poison pill.” Liberal Justice Stephen Breyer also raised the court’s precedents buttressing individual-only arbitration as difficult to get around. The other case involved price-fixing claims lodged by Plano, Texas-based dental equipment distributor Archer and White Sales Inc. against other manufacturers and distributors. It centered on whether courts can prevent arbitrators from deciding if an issue can be arbitrated at all. Liberal and conservative justices expressed concern over how to determine when such a demand for arbitration is groundless.

NOVEMBER 5, 2018 INSURANCE JOURNAL | NATIONAL | 27

NATIONAL | MyNewMarkets

Environmental Contractors and Consultants

Market Detail: Landmark E&S

(www.landmark-es.com) offers environmental contractors and consultants a comprehensive package insurance program to assist them with their general liability, pollution and professional liability exposures. Brokers will analyze environmental trends for potential risks and tailor coverages to meet the needs of clients. Available limits: Minimum $1 million, maximum $50 million Carrier: Unable to disclose, admitted and non-admitted States: All states Contact: Fred Baron at 949390-4725 or e-mail: fbaron@ landmark-es.com

Limousine

Market Detail: Lancer Insurance Co. (www.lancerinsurance.com) offers 15 percent commission for new limousine accounts to retail brokers. Coverage is available for stretches, sedans, super-stretches and limo buses. Coverages include commercial automobile liability, automobile physical damage, commercial general liability, garage lia-

bility and garagekeepers legal liability. Liability limits up to $5 million CSL. Coverage provided on a first-dollar basis. Larger accounts can also be underwritten with a liability deductible. Program not available to radio-dispatched vehicles, car service operations and taxis. Available limits: As needed Carrier: Lancer Insurance Co. States: All states except Hawaii, Louisiana, Montana and West Virginia Contact: Elsa Aleman at 516431-4441 or e-mail: ealeman@ lancerinsurance.com

Auto Service Shops

Market Detail: Universal Casualty Risk Retention Group (www.universalcasualty.com) is focused on the auto service industry, specifically geared toward providing products to classes of business that deal with the distribution, rental, and repair of automotive vehicles. Target clients include new and used car dealerships, auto collision and repair shops, truck repair, muffler shops, tire shops, towing, short-term auto rental, transmission shops, auto glass shops, and auto leasing companies (if also operating as a car dealership). All quoting

28 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

is done through partner MGA, Inter Insurance Agency. Available limits: Minimum $50,000, maximum $3 million Carrier: Universal Casualty States: All states Contact: Joe Chvasta at jchvasta@universalcasualty.com

Lender Placed Hazard and Liability

Market Detail: Proctor Financial Inc.â&#x20AC;&#x2122;s (www.pfic. com) REO Guard Lender Placed Hazard and Liability Insurance provides REO insurance property coverage with optional liability for REO/foreclosed properties where no insurance coverage is in place. PFI offers Sale Date Inspections with this insurance product to establish condition of property at date and time of Sheriff Sale. Visit www.pfic.com for more information. Available limits: As needed Carrier: Various, non-admitted States: All states Contact: Amanda Bowers at 248-824-1464 or e-mail: abowers@pfic.com

Surety Bonds

Market Detail: The Bond Exchange (www.bondexchange.com) specializes in

surety bonds, a contract issued by an insurance company that provides a financial guarantee to an interested party (usually a government agency) that a named person or business will adhere to the terms established by the bond. Available limits: Maximum $100 million Carrier: All surety carriers, admitted States: All states Contact: David Gonsalves at 800-438-1162 or e-mail: david. gonsalves@bondexchange.com

Artisan Contractors

Market Detail: Southwest Risk LP Contractors (www.swrisk. com) has experience across multiple contractor disciplines to address all the challenges facing this class today, even in more difficult classes such as residential, EIFS, and industrial work among many others. Eligible contracting classes include: plaster and stucco (including EIFS); roofing; foundation (new and repair); steel and tower erection; utility; plumbing; framing; demolition; excavation; environmental. Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted available States: All states Contact: Customer service at 214-206-4900 This section brought to you by Insurance Journalâ&#x20AC;&#x2122;s sister website: www.mynewmarkets.com

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Idea Exchange

Q&A

Ask the Insurance Recruiter

My agency’s 2019 producer recruiting plans are under way and one thing is clear. We are definitely going to make substantial investments. In years past, we’ve relied on newbies and college grads to fill the ranks. We’ve sprinkled in some mature acquisitions, too. The result is a big gap in the middle. I need a producer experienced enough to hit the ground running but with plenty of production years ahead of them. I’m having a terrible time finding candidates. What should I do? – CEO in Houston

A:: I’d like to tell you a story. I think a Golden Girls’ reference

works here. Picture it, Des Moines, 2006. A 26-year-old who spent two and half years as a transportation producer searches for a new job but agencies turn her away saying she doesn’t really know insurance (only truck insurance). She makes the switch to insurance recruiting, unfamiliar territory to say the least. Fast forward 12 years and that woman is now 38 years old and a partner in the recruiting firm with a practice that recruits producers for the type of agencies that once questioned her sales ability.

Where’s Waldo? Enticing Experienced Producers to Your Agency

etting a picture of who that person is? I’ll never forget that interview experience. In a time such as this, with so much pressure to perpetuate Baby Boomers, I bet you would have hired the 26-year-old me in a second. Now that your profile is the 38-year-old me, your sales pitch is very different. Here’s how experienced producers are enticed to change agencies.

A Breath of Fresh Air

• Do you challenge the conventional norm of running an insurance agency? • Do you abhor the old, stodgy guard that your competitors represent? Experienced producers are attracted to agencies building a different model, vision or concept. Emphasizing ways that you’re an “agency of the future” is most important

30 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

when recruiting local talent. Brokers at competitors have preconceived notions about going to a shop across the street. You want them to be pleasantly surprised when they peek behind the curtain.

Plus One Factor

What does my career look like when I’m 50 years old? At my age, it's far too early to think about post-retirement plans, yet I do think a lot about what my career looks like 10-15 years from now. I’ll still be in insurance recruiting but the day in, day out responsibilities cannot look the same. I’d go crazy. I am a person who needs to evolve. Seasoned producers around my same age want more too - the Plus One Factor. Can your agency offer that? Many agencies cannot. They are flat with owners that work until they are 80 years old and die in their chair. I’m not interested in working for that type of firm and neither are the producers you desire. Plus One Factor examples

By Mary Newgard Capstone Search Group include: Ownership, Sales/ Team Leadership, Division/Ops Leadership, Satellite Expansion and Executive Management.

Stability In An M&A World

A lot of producers ready to make a move say, “Enough is enough.” They are fed up with instability, uncertainty and lack of control that surrounds M&As. Here’s where your agency’s culture is a top selling point. Your leaders’ age and path to success mirror the producer. Your perpetuation plan is set and doesn’t stifle employee growth. Organic growth is still your top priority.

Food For Thought

How insurance agencies typically define an “experienced producer” profile:

• Five to 15 years of sales experience. • Successful validation (at least three years building a book of business). • Between 26-45 years old. • $150,000 to $225,000 first year salary guarantee. • No training required. Can hit the ground running.

Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. For questions and comments, email: asktherecruiter@csgrecruiting.com.

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Idea Exchange

Professional Liability

7 Critical Areas Directors and Officers Should Watch in 2019

By Priya Cherian Huskins

isk management involves looking around the corner to spot future threats. When it comes to director

Image source: D&O DataBox, Woodruff-Sawyer & Co., June 2018 and officer liability, the question is this: What’s on the horizon for directors and officers in 2019? Here are seven critical areas of risk management to consider as you plan for 2019.

1. Securities Class Actions on the Rise

Securities class action lawsuits are on the rise, and data show this will likely persist in 2019.

continued on page 34

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FSC “XV,” “XV,” Stable Stable Outlook Outlook FSC

Idea Exchange continued from page 32

IPOs are a consistent target for securities class action litigation. Adding to this dynamic is the recent decision in Cyan v. Beaver County Employees Retirement Fund. In this case, the U.S. Supreme Court decided unanimously that federal class action lawsuits brought under Section 11 of the Securities Act of 1933 could be brought in all state courts. As a reminder, Section 11 means public companies are strictly liable for material misstatements in their S-1 registration statements, making newly public companies an easier target. The reason the Cyan decision is significant is because there is typically a lower dismissal rate for Section 11 claims in state courts compared to federal courts.

2. #MeToo Impacts the Boardroom

The #MeToo movement that came out of Hollywood permeated almost every industry and is now a board-level issue in corporate America. Signet Jewelers and Wynn Resorts Ltd. are just two companies that have faced director and officer litigation as a result of sexual harassment and misconduct. To prepare, boards of directors need to be willing to have the conversation of what they would do if it happened at their company, including walking through real scenarios and case studies. The board will be a focus should an incident occur. To give the board a fighting chance to defend itself, it’s best to take the temperature of the company sooner than later. In other words, do employees feel that the tone at the top is proactive about #MeToo-type issues?

Professional Liability those who fear inappropriate prosecutions, the DOJ announced in 2018 a “no piling on” policy that would coordinate within the agency and with outside agencies to help avoid “piling on” enforcements for the same misconduct. While it may seem like the DOJ is easing up, it’s a bad idea to become cavalier about compliance. For example, the DOJ increased the number of Foreign Corrupt Practices Act actions it took last year. To prepare, companies will want to review their compliance policies and procedures on a regular basis and update them with changes in the law or as they become aware of enforcement activity at other companies. It’s also a good idea for directors and officers to make sure that indemnification agreements are up to date and able to help defend them quickly and easily if they are accused of wrongdoing.

4. M&A Litigation Persists

Companies that are involved in a merger or acquisition can almost always expect litigation to follow, though data show a downward trend in the percentage of M&A deals challenged by shareholders. The average number of lawsuits per M&A deal has also declined. This can be attributed to the Delaware Court of Chancery decision in the Trulia case in late 2015. The Delaware court took the position against allowing plaintiff attorneys to be awarded lucrative fees in exchange for “disclosure-only” settlements – those settlements in which plaintiff

3. Directors and Officers Face Criminal Prosecutions

No director or officer wants the news they are under investigation from any government agency, let alone the Department of Justice. That’s because the DOJ can criminally prosecute individuals for wrongdoing, resulting in incarceration. In a little bit of good news for 34 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

attorneys are awarded legal fees for doing nothing more for the shareholders they represent than force defendants to provide additional (and often relatively trivial) disclosures about the M&A deal. However, the plaintiff’s bar is nothing if not resourceful. Plaintiffs are now bringing cases that are likely to result in disclosure-only settlements in federal court, often with better results in terms of fee awards compared to what they were experiencing in state court.

5. Bad Actors Are Being Humiliated

The first Wells Fargo scandal came to light when it was revealed in 2016 that Wells Fargo employees had been secretly creating fake accounts without customers knowing it to boost sales figures and qualify for bonuses. In 2018, the Federal Reserve published a letter it had written to the former lead director of Wells Fargo. The letter noted, among other things, that his “performance in that role is an example of ineffective oversight that is not consistent with the Federal Reserve’s expectations for a firm of WFS’s size and scope of operations.” The letter was a rare instance of a regulator publicly shaming an independent director. The investigation of Wells Fargo was significant, and along the way, multiple Wells Fargo executives were publicly shamed, with lawmakers calling Wells Fargo a criminal enterprise and comparing the former CEO to a common bank robber. For independent directors, especially those serving on boards of companies in highly regulated industries, the message is clear: if they do not do their job well and fraud results, their conduct will be judged both harshly and publicly. In striking the right balance of operating at the director level but still knowing what’s going on in management, public company directors should know what their regulators expect. And if there are wrongdoings, independent directors will need to get much closer to the company’s day-to-day business than they typINSURANCEJOURNAL.COM

shareholder value is their primary fiduciaBlackRock is the No. ry duty. Directors and officers will want 1 U.S.-headquartered to be cautious when considering whether institutional investor, and how to implement Fink’s vision. If a and its CEO Larry Fink board decides to pursue the dual goals of publishes an annual and maximizing shareholder value and maximizing societal good, it will want to be anticipated open letter. explicit about this with shareholders as a In the January 2018 matter of good disclosure. Directors and edition, Fink said that in officers should also review the BlackRock addition to maximizing document titled, “BlackRock Investment shareholder value, public companies should Stewardship Engagement Priorities for have another goal: mak2018” and other useful documents at ing a positive societal BlackRock.com. impact. Boards have a lot on their plates when it Fink noted that “to prosper over time, comes to planning for 2019. When it comes every company must not only deliver to thoughtful risk management for directors and officers, the seven items listed financial performance, but also show how it makes a positive contribution to society.” above provide a useful starting point. The letter was received with mixed Huskins is a partner for Woodruff Sawyer. Email: reviews and presents a conundrum for A&M helps that BIG.pdf 1 maximizing 1/5/16 12:36 phuskins@woodruffsawyer.com PM boards of directors believe

7. Social Expectations

ically do in their normal oversight role.

6. Board’s Role in Cybersecurity

In February 2018, the Securities and Exchange Commission issued interpretive guidance for public companies on how to control and disclose cybersecurity risks and events. The guidance, among other things, made note of the board’s role in cybersecurity oversight: “To the extent cybersecurity risks are material to a company’s business, we believe this discussion should include the nature of the board’s role in overseeing the management of that risk.” The SEC also encouraged disclosure of “how the board of directors engages with management on cybersecurity issues,” so that shareholders can assess the board’s C performance when it comes to the execu-M tion of its risk oversight duties. Boards of Y directors will want to ensure that cyber risk and its mitigation continue to be a regularCM MY topic of discussion. They’ll also want to review the SEC’s CY interpretive guidance with counsel and CMY refine the company’s cyber policies and K disclosures as needed. Separately in 2018, SEC Commissioner Robert Jackson Jr. called cyber threats “the most pressing issue in corporate governance today.” Also in 2018, the SEC settled with Yahoo for $35 million, the first penalty associated with a cyber disclosure investigation. All of this together is a clear signal that addressing cyber threats will be a primary area of focus for the SEC in the foreseeable future.

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NOVEMBER 5, 2018 INSURANCE JOURNAL | NATIONAL | 35

Idea Exchange

The Wedge

If You Don’t Hate Your Sales Coach… Something Could be Wrong

By Randy Schwantz

ver the past 20 years, I’ve surveyed hundreds of high-performing athletes in all levels of sports including professional, college, high school and club sports. Not once have I found an athlete, including Heisman Trophy winners, Hall of Fame winners, Division 1 conference champions or club sport national champions say: “I loved my coach.”

It seems no one does. And it’s interesting to note that many have even said: “I hated playing for him/her.” A coach, whether in sports or selling, is almost always in an adversarial relationship with its players. The conflict is obvious: As a coach, you want your players to work harder, perform better and achieve more. When they don’t rise to that expectation, you have two choices: You can leave them alone or try and find a way to push/pull on them emotionally or with physical demands to get them to rise to the higher level of performance.

The Old School

Old guys like Woody Hayes (Ohio State), Era Parseghian (Notre Dame) and Bear Bryant (Alabama) are etched in our memories standing on the sideline, screaming at the top of their lungs at some kid: “Come on son… you missed that tackle, that was your guy!” Now that I live in the Research Triangle, under the halo of Coach K, I go to a few Duke basketball games. It seems Coach K is capable of an explosion now and then, which is why he took his jacket off in a game, threw it on the floor, stomped his foot and glared so hard at one of his players I thought the kid was going to melt. Not all coaches were screamers. Tom Landry, the former head coach of the

Dallas Cowboys, didn’t raise his voice. He just let guys like Roger Staubach and Tony Dorsett know there was very little job security unless they performed. Landry said: “Leadership is a matter of having people look at you and gain confidence, seeing how you react. If you’re in control, they’re in control.”

If You Want to Be a Great Sales Coach

Every coach, in sales or sports, must deal with the obvious conflict. At the root of the problem is simply that you and your producer probably want different things. As the sales coach, sales leader or agency owner, you want growth. And growth only comes from a producer prospecting bigger and better accounts, then selling and closing those accounts and ultimately retaining them for a long time. But most producers want to remain in their comfort zone. Hence, the conflict: leaders want high performanc and producers want to be comfortable.

When a leader challenges producers to change or modify their beliefs or actions – “Charlie, you need to make more dials, you need to set more appointments, you need to find a way to get commitments and close more deals” – it creates discomfort. It’s no secret that most producers hate role-playing. Getting better at their craft, that of selling, can be overwhelming. It gets them out of their comfort zone.

‘There is probably a lot of potential embedded in your agency. It’s like an oil deposit out in the middle of the desert. To turn that potential into profit, you’re going to have to drill for it. It will not rise to the surface on its own.’ – Randy Schwantz

to help their producers become radically more effective at growing their books of business. And that always starts with gaining clarity about what is wanted. Zig Ziglar changed my life when I once heard him say: “You can get everything in life you want if you will just help enough other people get what they want.” Look, you don’t have to be hated as a sales coach. In fact, you can be loved, admired and respected if you will slow down enough to find out what your producers want and help them get it. Want to be a better sales coach? Here’s an offer: You pay for shipping, I’ll pay for the book - Agency Growth Machine: Transform Producer Potential into Agency Growth and Profit. https://thewedge.net/ freebook

sure you have a strong common ground. From there, create a written plan for this mutual achievement and both of you sign it.

A What Without A How Is Useless

Chris Voss, a former FBI hostage negotiator and author of Never Split the Difference, says: “A what without a how is useless.” As you document what is wanted by each party, you need to take the extra time to define how it will happen. This is powerful in many ways. Think of the brain as a computer; it’s a piece of hardware that will operate in relationship to the quality of its software. When you take the time to help producers with the “how,” it is like writing software for their brains. When I got into the business of developing organic growth technology for insurance agencies, it was with one thing in mind – making it easier for sales leaders

Schwantz is founder of The Wedge Group. Email: randy@thewedge.net. Phone: 214-446-3209. Website: www.thewedge.net.

Remove the Conflict

One way to deal with the conflict is to remove it by having a common outcome or goal that makes the suffering worthwhile. What is that common outcome or goal? You’ll never know unless you ask. This is the secret to becoming a great sales coach who is admired and respected. When you spend time developing that common outcome together, you earn the right to push, pull and stretch your producer out of their comfort zone and grow their performance capability.

Everyone Has Something They Want, Even If They Can’t Admit It

Every producer, both low performers and elite performers, wants something. It’s your opportunity to find out what that is and help them get it. In return, they will perform for you. It could be to annihilate a common enemy. Maybe it’s achieving a certain financial goal. It could be to make their mother or father proud. The critical thing here is to find out what they want and document it. Then you confirm it’s what they want, which opens the door to sharing what you want and making

To give real service you must add something which cannot be bought or measured by money— only sincerity and integrity. Douglas Adams

Frenkel/AIG Psychoanalysts Professional Liability Program For over 40 years, Frenkel & Company has proudly delivered our exclusive insurance products to psychoanalysts industry wide, including APsaA members. This insurance program and other insurance products are a testament of both our knowledge and our commitment to this prestigious industry. We appreciate the opportunity to serve you.

Kenneth C. Hegel, Jr. Senior VP/Unit Manager, Frenkel & Company khegel@frenkel.com // 201-356-0057

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NOVEMBER 5, 2018 INSURANCE JOURNAL | NATIONAL | 37

Idea Exchange

The Competitive Advantage

Why Itâ&#x20AC;&#x2122;s Important to Understand Your Carriers

By Chris Burand

have been analyzing the insurance industry and individual insurers and agencies for a long time now. When I started analyzing the industry, I never imagined, and I have not met any industry veterans who could imagine, this industry having so much surplus. No one could have imagined 15-plus years without a hard market. Think about what has happened since the last hard market: Katrina, Sandy, and the credit crisis, to name just a few. Katrina and Sandy were two of the nationâ&#x20AC;&#x2122;s largest natural catastrophes ever and the credit crisis caused a huge, world-wide financial disruption, yet the insurance market didn't turn. Surplus at the end of 2017, according to A.M. Best, was roughly 280 percent higher than in 1999. The property/casualty industry has so much capital, it is not all being used. Keep in mind, this capital is not equally distributed. Some companies have more than they know what to do with and others are short a competitive perspective. Maybe, or maybe not, their shortage leaves them without the capital required to be profitable while simultaneously maintaining rate competitiveness with companies that have surplus and/or are more profitable.

Not All Capital is Created Equal

A critical point is not all capital is creat-

ed equal. Most I talk to in the industry at the carrier and agency level don't understand that all capital is not created equal relative to surplus. A quantity of surplus is obvious, but the quality of capital is not. There is the obvious equity vs. debt capital. There is also a thing called surplus notes that some companies use to boost the quantity of capital. If you do not know what surplus notes are, I strongly encourage you to research this lower form of capital. The smartest companies have high quality equity capital that also serves as a large investment portfolio upon which they earn outsized investment income. Insurers have not historically made money through underwriting. That is a well-known fact. Less well-known is that the industry has made money in underwriting more often during the past 10 or so years. The industry cannot stand making money through underwriting, so it has reverted to losing money underwriting. Therefore, investment income is critical and with low yields, the size of the investment portfolio is critical to profitability, rate flexibility and organic surplus growth.

Operational vs. Competitive Perspectives

I recently completed an analysis of 50 large P/C companies. Some, from an operational perspective and competitive perspective, are absolutely at a competitive disadvantage because the quality of their surplus/ capital is so much less than stronger competitors. Their strategy is defined by their constraints. In some

38 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

cases, this will determine who sells, who buys, who continues to build strong relationships with clients and who does not. Historically when insurance companies had too much money, they found ways to waste it convincingly. This usually involved massively underpricing resulting in latent under reserving issues, which ultimately was a driving factor in the market cycle. The surplus that appeared to exist, therefore, did not really exist once the under reserving was addressed. These points were usually addressed by the next C-suite and/or hidden in an acquisition. Bad acquisitions are always a great way to waste capital too. The past 10 years, with a couple of notable exceptions, carriers have been far more disciplined with maintaining their pricing and resolve to avoid bad acquisitions. To some degree, they have also greatly benefited from a safer environment the actuaries seem to have failed to predict resulting in premiums increasing faster than claims. The result is the carriers are collectively averaging a $37 billion profit annually. So if your company is not profitable in this environment, it truly may be a personal problem. Two new models have developed that will take much longer, maybe, for the negative effects to develop versus the speed with which poor discipline became evident in the past. One model is the use of alternative capital. One reason the industry has so much capital is the development of alternative capital. Most commonly known sources are catastrophe bonds, captive insurance companies and other creative financial structures. When these models are built well, all parties involved benefit. Other forms of capital, however, are being employed differently that may INSURANCEJOURNAL.COM

catch people unaware. One issue is the captive that may not be legitimately organized. Another may be a captive where the parties involved truly are not adequately finance/insurance educated or wealthy enough to participate on an adequately informed basis. These captives can be made to sound sexy, and the dangerous aspects are overlooked.

RRGs and Reciprocals

Another method involves RRGs and Reciprocals. Both have been around forever and play a constructive role in the marketplace. However, it looks as though some consumers being sold these vehicles do not really understand them. The agents selling these often do not know what they are selling. I have interviewed many agents as to whether they understand the financial mechanisms involved when these entities run short of capital, their call abilities, and few have had any understanding. If the agent does not understand, I doubt the insured understands that the policyholder is the bank, depending on the situation, for capital calls. At one time, these financing entities were modeled differently when capital would accumulate over time and thereby decrease the probability of a capital call. Many RRGs and reciprocals still are. But we now have multiple entities where owners and C-suites are paid de facto dividends off the top, based on revenue and not profit, like private equity is paid. This makes high quality capital more difficult to accumulate, at least organically. The alignment of interests in this model does not exist at the “rubber meets the road” level. The owners benefit most, upfront.

Not Growing or Staying Even

In the more traditional carrier capitalization world, a related but different model seems to have been adapted. This is where a company has determined it cannot grow or maybe doesn't want to grow. A mid-size carrier finally quit going backwards after 10 years of going backwards, becoming approximately half the company it was. That seems purposeful. If a company is not growing, its stockholders are not usually INSURANCEJOURNAL.COM

happy unless dividends and stock buybacks are strong. If a company begins distributing its surplus in this manner, then depending on what its surplus ratio was initially, it either has to reduce its writings accordingly if its ratio was limited or if it had extra surplus to burn, then it simply gives up its cushion but does not use its surplus to grow. In the former, I am sure some companies plan some miraculous reversal at the appropriate time and others plan to sell themselves at a tipping point. From a C-suite/shareholder perspective, this camouflaged wasting asset strategy makes sense if the execution is quality. Their agents and policyholders may still have a different perspective even if execution is good because they both face disruption. If it goes bad, everyone will be unhappy. In the other instance where the company just does not grow but started with extra surplus, regaining growth momentum after not really trying to grow is easier said than done. One factor quite frustrating for agents is how specific companies talk as if they desire to grow but their real strategy is to stay even. How many times can a company say they want to grow but will not write what is being submitted when the submissions are quality and on the carrier’s hit list? Or they will write them at a 10 percent to 30 percent premium over the competition? They are not seriously planning to grow. A few companies may be playing a longer game and appear patient. My guess is they see the follies of some of the capital strategies being used and have decided to slowly (or not) take advantage of their short-term thinking competitors because they are achieving far more growth while remaining profitable and/or waiting to buy competitors when the time is right. In many ways, the short-term strategies are arguably often about enriching a certain class of insiders and the long-term strategies are about building a long-term business that benefits the carrier, their shareholders, agencies, and policyholders over a long period. For agents, understanding your car-

riers in depth, whether they are part of the short-term or long-term game, is well worth your time and energy. While it is not every day you can use this information to benefit your clients, when that opportunity exists the value can be large. Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-485-3868. E-mail: chris@burand-associates.com.

Advertisers Index AmTrust www.amtrustgroup.com 33 Anderson & Murison www.andersonmurison.com 35 Aon Affinity www.aon.com 9 Applied Underwriters www.auw.com 2, 3, 48 Aspen Insurance www.aspen-insurance.com 18 Brecht & Associates www.brechtassoc.com SC6 Brighthouse Financial www.brighthousefinancialpro.com 4, 5 California Earthquake Authority mvp.earthquakeauthority.com W5 CTC Transportation Insurance Services https://insurancetruck.com 21 Frenkel & Company www.cosmeticinsurance.com 37 Great American Insurance Group www.gaig.com 31 Hudson Insurance Company www.hudsoninsgroup.com 23 JM Wilson www.jmwilson.com S2, M4 Lighthouse Holdings, LLC www.lighthousepropertyins.com SC10, S5 Louisiana Commerce & Trade Assoc. www.lctacomp.com SC9, S5 M.J. Hall & Company www.mjhallandcompany.com W6 Midlands Management Corporation www.midlandsmgmt.com SC8 Monarch E&S Insurance Services www.monarchexcess.com W7 Nautilus Insurance Company www.nautilusinsgroup.com 29 Operation Healing Forces www.operationhealingforces.org 45 PersonalUmbrella.Com www.personalumbrella.com 47 Philadelphia Insurance Companies www.phly.com 17 Regions Bank www.regions.com 13 RSG Underwriting Managers www.rsgum.com 14, 15 Ryan Turner Specialty www.rtspecialty.com 7 Shelly, Middlebrooks & O'Leary, Inc. www.shellyins.com S5 State Compensation Insurance Fund www.statefundca.com W3 Surplus Lines Association of California www.slacal.com W8 Tejas American General Agency www.taga1.com SC3, S3 Texas Mutual www.texasmutual.com SC7 Texas Surplus Lines Association www.tsla.org SC5 The Hartford Insurance Group www.thehartford.com 1 United Fire Group www.ufgsolutions.com E5 US Premium Finance www.uspremiumfinance.com 32

NOVEMBER 5, 2018 INSURANCE JOURNAL | NATIONAL | 39

elcome to Insurance Journal’s 2018 Premium Finance Directory, a comprehensive listing of premium finance companies able to assist agents and brokers with their clients’ financing needs. All company information listed in this directory was directly submitted to Insurance Journal. To be listed in future editions of Insurance Journal’s Premium Finance Directory, or any other directory, contact Kristine Honey at: khoney@insurancejournal.com. We hope you find this directory to be a valuable resource when searching for financing options for your clients. Feel free to send us comments and suggestions on how we might improve this directory, or for additional help, e-mail: editorial@insurancejournal.com.

The 2018 Premium Finance Directory is Sponsored By:

AFCO Credit Corp.

All Island Credit Corp.

1133 Avenue of the Americas, Ste. 2735-39 New York, NY 10036 Toll-free: 1 (800) 288-6901 Email: newbusiness@afco.com or promptservice@afco.com www.afco.com

80 Skyline Dr., Ste. 100, Plainview, NY 11803 Phone: (516) 605-2835, Fax: (516) 605-2841 Email: info@allislandcredit.com www.allislandcredit.com

• AFCO provides a broad range of premium finance options supporting the needs of agencies, brokerages and their insureds • Unparalleled expertise in premium finance with comprehensive underwriting, legal and support resources • Proven reliability, flexible terms and the ability to support insureds with non-standard needs

A d i vi s i on of Met a B a n k ®

AFS/IBEX Financial Services, Inc. 750 N. St. Paul, Ste. 1500, Dallas, TX 75201 Phone: (800) 299-5626, Fax: (214) 954-0537 Email: service@afsibex.com www.afsibex.com • Proven Stability – We’ve been operating for over 30 years under the same proven leadership, where premium finance is our only focus • Evolving with the times – As a division of MetaBank, our financial strength and stability offer our partners peace of mind that we will be here today, tomorrow, and in the future • Partnering for the future – As a good corporate partner, our programs evolve and enhance the benefits you can offer your insureds, increasing your retention • Ask us about offering agency loans and credit lines

N40 | INSURANCE JOURNAL-NATIONAL REGION November 5, 2018

• Outstanding Customer Service • Competitive Rates • 24/7 Online Access

Automated Installment Systems 955 Executive Pkwy, Ste. 216, St. Louis, MO 63141 Phone: (800) 624-6308 Email: sales@automatedinstallment.com www.automatedinstallment.com • An industry leading provider of premium finance and installment billing outsource solutions to all segments of the insurance industry for over 30 years. • AIS’s extensive product offerings are technology driven solutions that automate the presentation of payment products and payment options to policyholders. • Our experienced staff consistently delivers innovative services and processing solutions to agencies, general agencies, and insurance carriers throughout the country. www.insurancejournal.com www.insurancejournal.com

Premium Finance Directory BankDirect Capital Finance

Elite Premium Finance

150 N. Field Dr., Ste. 190, Lake Forest, IL 60045 Phone: (877) 226-5456 Email: marketing@bankdirectcapital.com www.bankdirectcapital.com

395 Alhambra Cir., Coral Gables, FL 33134 Phone: (305) 442 7227, Fax: (305) 461 -0131 Email: info@elitepremium.com www.elitepremium.com

• BankDirect’s commercial premium finance programs offer agency revenue opportunities, multiple payment options for insureds, e-signature, and cancellation prevention. • Our team of seasoned professionals strives to make premium finance as easy as possible by embracing “out of the box” thinking and taking a consultative approach with our agency partners and their customers. • BankDirect is continually improving its technology based solutions for ease of use, process automation, and efficient workflows.

Bulldog Premium Finance 6971 W. Sunrise Blvd., Ste. 206, Plantation, FL 33313 Phone: (954) 316-3171, Fax: (954) 316-3156 Email: customerservice@financebulldog.com www.financebulldog.com • Unmatched Premier Personal Customer Service! • Highly Competitive Rates • Ability to Finance Contracts With Any MGA

CAC Acceptance Corporation 3673 Westcenter Dr., Houston, TX 77042 Phone: (888) 422-7755, Fax: (800) 486-1049 Email: info@cacacceptancecorp.com www.cacacceptancecorp.com • We are a Family Company with no obligations to Wall Street or “Big Banking” • More customer service centric to your insured’s & you, the agent, than a wholesaler’s finance company • More liberal payment terms than many insurer plans

Capital Premium Financing 12235 S. 800 E, Draper, UT 84020 Phone: (800) 767-0705, Fax: (800) 700-3170 Email: info@capitalpremium.net www.capitalpremium.net • Industry leading Agency Revenue Programs • Highest level of Agent/Client service available in the industry • Local presence, multiple payment options, and online access

Capitol Payment Plan 52 Corporate Circle, Ste. 208, Albany, NY 12203 Phone: (866) 639-1333, Fax: (518) 862-7522 Email: sternj@cappay.com www.cappay.com • Committed to helping insurance agents maintain their competitive edge through premium financing solutions since 1979 • Leading local experts to address the unique needs of the personal lines business • State-of-the-art products and programs that maximize efficiency in quoting, leaving more time to focus on your customers

ClassicPlan Insurance Premium Financing

Express Premium Finance Company, LLC 21 E. Main St., Ste. 103, Oklahoma City, OK 73104 Phone: (800) 728-2902, Fax: (888) 413-8898 Email: quote@expresspremium.com www. expresspremium.com • Premium Service • Premium Solutions • Premium People

13750 Pipeline Ave., Chino, CA 91710 Phone: (800) 347-6481, Fax: (909) 628-5490 Email: info@classicplan.com www.classicplan.com • Most lines of business accepted, including Cannabis • Mobile App, credit card payments, ACH and more for insureds payment submission • Extra services to help increase retention and market your agency

COST Financial Group, Inc. 807 W. Highway 50, Ste. 4, O’Fallon, IL 62269 Phone: (800) 844-2678, Fax: (618) 206-3223 Email: daveg@costfinancial.com www.costfinancial.com • COST makes it easy for YOU TO OWN your own Premium Finance Company • COST does the set-up, COST runs the back room, YOU EARN ALL THE PROFIT • Let COST’s 29 years’ experience put the PROFIT from YOUR premium financing IN YOUR POCKET!

Cypress Premium Funding, Inc. 28202 Cabot Rd., Ste 435, Laguna Niguel, CA 92677 Phone: (949) 487-0602, Fax: (949) 487-0640 Email: info@cypressfunding.com www.cypressfunding.com • Internet Account Viewing, Quoting, Reporting and On-Line Payments • Immediate Funding • Cancellation Prevention Programs

www.insurancejournal.com

• Financing Commercial & Personal Lines since 1990 - Latin Agent Premium Finance of Choice • Low and High Premiums at Convenient APR Rates • Web Based Software - Excellence in Customer Service

FIRST Insurance Funding Corp. 450 Skokie Blvd, Ste. 1000, Northbrook, IL 60062 Phone: (800) 837-3707, Fax: (800) 837-3709 Email: marketing@firstinsurancefunding.com www.firstinsurancefunding.com • Best turnaround time and most complete payment options in the industry, including credit cards for down payments • Online quoting and account management with paperless options, mobile app and chat for both agent and insureds • Direct Bill, Automated Payments Solutions, Agency Lending and Leasing programs

Focus Finance, LLC P.O. Box 451899, Sunrise, FL 33345-1899 Phone: (954) 331-4825 Email: info@focusfinance.net www.focusfinance.net • Save time and money by letting us do the work for you; ready to sign Premium Finance Agreements sent via email or fax. • Our payment email reminders and direct customer calls help save over 50% of policies from cancellation. • Payments can be made by phone or online using check or credit card.

November 5, 2018 INSURANCE JOURNAL-NATIONAL REGION | N41

Premium Finance Directory GBC Premium Finance, Inc.

Johnson & Johnson Preferred Financing, Inc.

110 E. 9th St., Ste. A-1126, Los Angeles, CA 91214 Phone: (213) 244-9535, Fax: (213) 236-0759 Email: info@gbcpf.com www. gbcpf.com

200 Wingo Way, Ste. 200, Mt. Pleasant, SC 27464 Phone: (800) 868-5573, Fax: (843) 724-7085 Email: finance@jjpf.com www.jjpf.com

• We specialize in Trucking Insurance Premium Finance, but Finance all Commercial and Personal Lines. • 24/7 Online Access, we are partnered with one of the top software companies in Premium Finance. • We are currently Licensed in CA, TX, NV, AZ, IN, VA, NJ and NY and expending fast.

• Finance most lines of coverage both Commercial and Personal lines • Online software for 24/7 access to quoting, account management and reporting • Multiple funding options for Money in & Money out!

General Agents Acceptance Corporation 23441 S. Pointe Dr., Ste. 220, Laguna Hills, CA 92653 Phone: (949) 470-9674, Fax: (800) 568-5462 Email: james@mygaac.com www.mygaac.com • We increase retention by physically calling the customer before cancelling & giving more time to pay. • We offer competitive rates & exceptional customer service. • You can quote online or send us the quote from the carrier & we will quote the finance agreement for you.

Imperial PFS 1055 Broadway, 11th Fl, Kansas City, MO 64105 Phone: (800) 838-2350, Fax: (816) 627-0502 Email: marketing@ipfs.com www.ipfs.com • The size and independence of Imperial PFS® provides the financial strength and flexibility to handle a wide range of accounts from large, complex deals to those that are smaller and more streamlined. • As a nationally-recognized premium financing leader, Imperial PFS® is committed to developing technology resources and services to best meeting the needs of Agencies and their Insureds. • Nationwide strength, local service – Imperial PFS® is powered by a network of more than 25 branches strategically located across the United States and in Puerto Rico.

Insurance Finance Company, LLC gotoPremiumFinance.com 6200 Canoga Ave., Ste. 400, Woodland Hills, CA 91367 Phone: (888) 875-4000 Ext. 2135, Fax: (818) 610-2066 Email: sales@gotopremiumfinance.com www.gotopremiumfinance.com

• A unique one of a kind paperless premium finance billing option that is also designed to help agents grow their insurance business and increase their income. • Nationwide premium finance provider for agents, MGAs & insurance companies. • Online quoting, online payment options, real time account status, online cancellation holds, customized notice delivery & more.

P.O. Box 315, Des Moines, IA 50306-1315 Phone: (800) 247-4190, Fax: (515) 223-0226 Email: Brian@ifcorp.biz www.ifcorp.biz • IFC is independently owned with no ties to insurance companies, agencies or other financial institutions. That gives us flexibility! • Ask us about IFC Direct and OneClick Universal Integration. • Fanatical Service – Flexible rewards and agency incentives.

Insurance Payment Company 3025 Windward Plaza, Ste. 400, Alpharetta, GA 30005 Phone: 678-578-6600, Fax: 866-922-0691 Email: newbiz@inspayco.com www.inspayco.com

• State of the art technology allowing ease of doing business for both agent and insured • Personalized customer service –supported by knowledgeable staff with extensive experience in insurance industry as well as premium finance • Flexible payment options most national companies can’t/won’t offer

N42 | INSURANCE JOURNAL-NATIONAL REGION November 5, 2018

Liberty Premium Finance, Inc. 4 Centerpointe Dr., Ste. 300, La Palma, CA 90623 Phone: (800) 229-8793, Fax: (562) 356-0131 Email: sporter@libertypf.com www.libertypf.com • Flexible monthly payment options for commercial insurance policies • Quote, bind and archive your contracts with our easy-to-use online quoting center • Pay by mail, phone, online or in person with credit card, check or check by fax

Monarch Premium Resources, Inc. 28202 Cabot Rd., Ste 435, Laguna Niguel, CA 92677 Phone: (949) 487-0602, Fax: (949) 487-0640 Email: info@MonarchPremium.com www.monarchpremium.com • Exclusive financing arrangements for brokers of Monarch E&S • Interactive Web site for account viewing, reports and On-line payments • Financing Commercial and Personal Lines Insurance Premiums

Mountain West Premium Finance 2535 Kettner Blvd., Ste. 3-A2, San Diego, CA 92101 Phone: (888) 280-0235, Fax: (619) 697-0326 Email: mike@financepremium.com www.financepremium.com • 0% down and 0% APR program available! • Finance RRG and non-rated carriers • Proactive Cancellation Prevention Program with ALL forms of payment accepted.

www.insurancejournal.com

Premium Finance Directory

NCMIC Finance Corporation 14001 University Ave., Clive, IA 50325 Phone: 1-(800) 600-9250, Fax: 1-(800) 630-9250 Email: LLogan@ncmic.com www.nfcfinance.com • Nearly 25 years of building lasting customer relationships; we excel at this! • Flexible loans, low down payments & great repayment plans for ALL of your insureds • Income opportunity for your agency, where permitted

Premins Company

Premium Finance Consulting, LLC

1407 Avenue M, Brooklyn, NY 11230 Phone: (800) 599-3279, Fax: (718) 376-8330 Email: info@preminsco.com www.preminsco.com

135 Weston Rd., Weston, FL 33326 Phone: (408) 800-3876 Email: info@premiumfinance.consulting www.premiumfinance.consulting

• Commercial and personal financing for over 50 years • Batched once-a-week cancellations • Get answers and quotes quickly with our fast and effective customer service on the phone and on our customized website

• Is your agency large enough for a profit sharing arrangement? • Is creating your own premium finance company appropriate for you? • We can assist you in finding the best premium finance relationship for your agency.

Premium Assignment Corporation A Subsidiary of IPFS Corporation

Prime Rate Premium Finance Corporation

P.O. Box 8800, Tallahassee, FL 32314-8800 Phone: (800) 342-0991, Fax: (800) 286-8999 Email: marketing@premiumassignment.com www.premiumassignment.com

• Financing personal lines and commercial accounts nationwide • Pre-approved loans up to $100,000 with no minimum premium • User-friendly 24/7 Web-based access and multiple payment options for insureds

• Exceptional Service • Online Quoting – Ease of Use • Competitive Rates – Flexible Terms

Premium Finance Associates P1 Finance 280 Technology Pkwy, Ste. 100, Norcross, GA 30092 Phone: 1 (844) 217-5674, Fax: (678) 226-7942 Email: customerservice@P1Finance.com www.P1Finance.com.com • PARTNERSHIP: Committed to building long term relationships with Insurance Companies, MGAs and their Retail Agent networks • TECHNOLOGY: Best in class, web-based digital technology for 24/7 access to quoting and customer database, with 24/7 access for your customers to verify account status and make payments • VALUE: Customizable and flexible payment options and pricing terms to maximize the profitability of your business

PREMCO Financial Corporation P.O. Box 19367, Kalamazoo, MI 49019-0367 Phone: (269) 375-3936, Fax: (269) 375-6913 Email: greg@go-premco.com www.go-premco.com • We finance all Commercial & Personal lines with same day funding • Rate Share, Profit Sharing, Stock Dividends & Referral Fees • FREE Online payments and the option to pay with Credit/Debit cards

www.insurancejournal.com

2141 Enterprise Dr., Florence, SC 29501 Phone: (866) 669-0937, Fax: (800) 677-9850 Email: info@primeratepfc.com www.primeratepfc.com

7603 First Place Dr., B-12 Cleveland, OH 44146 Phone: (866) 374-3630, Fax: (866) 839-3090 Email: info@PremiumFinance.net www.PremiumFinance.net • Licensed in all 50 states • Insurance Agency Acquisition, Perpetuation and Capitalization loans • Short term loans for Insureds with cash flow issues

Premium Finance Brokerage, LLC P.O. Box 623, Jarrettsville, MD 21084 Phone: (866) 381-6501, Fax: (866) 381-6502 Email: tlarsen@premiumfinancebrokerage.com www.premiumfinancebrokerage.com • Guaranteed Lowest Interest Rates • Access to several national premium finance companies through one point of contact • Flexible payment options, cutting edge technology and a service pledge that’s put in writing

SIUPREM, Inc. P.O. Box 105611, Atlanta, GA 30348 Phone: (678) 498-4730, Fax: (678) 498-4747 Email: info@siuprem.com www.siuprem.com • Independently owned, full service online premium finance company servicing independent agents since 1969. • Industry leading technologies providing real-time data for online policy service by the insured or the agent. • SIUPREM CARES. Each time a commercial policy is financed with SIUPREM in 2019, $5 of the proceeds will be committed toward the new goal of $70,000 for Breast Cancer Awareness and Research.

November 5, 2018 INSURANCE JOURNAL-NATIONAL REGION | N43

Premium Finance Directory South Bay Acceptance Corp. 10151 Deerwood Park Blvd., Bldg 100, Ste. 330 Jacksonville, FL 32256 Phone: (800) 393-2012, Fax: (888) 328-6747 Email: contact@sbac-finance.com www.sbac-finance.com • Flexible premium financing programs with multiple benefits for your agency and their insured’s! • 24/7 Online Quoting access, account status verification, activate your own quotes immediately! • Creative Producer compensation options ready to provide you additional income!

Specialty Risk Premium Finance 7600 Fern Ave., Bldg. 600, Shreveport, LA 71105 Phone: (318) 683-6206 Email: flee@sramga.com www.sramga.com • In house financing for policies written through Specialty Risk Associates • 24-hour web access to accounts for you and your clients • Payment methods like check by phone, Echeck and AUTO PAY are available

Stonemark 8501 Wade Blvd., Ste. 620, Frisco, TX 75034 Phone: (800) 955-0083 Email: service@stonemarkinc.com www.stonemarkinc.com • Online Payments & Account Status – make payments or review insureds’ accounts, including payment history, 24/7 • Same-day turnaround on finance quote requests and quote revisions • Online Quotes system gives agents the option of producing finance quotes and finance contracts anytime

Superior Payment Plan, LLC 6450 Transit Rd., Depew, NY 14043 Phone: 1 (866) 856-1112, Fax: (716) 206-8237 Email: info@superiorpayment.com www.superiorpayment.com • Fully functional website that allows Brokers and Insureds to easily manage accounts - quoting, inquiry, payments, and reporting. • Best in class customer service team that will personally assist you, as well as an automated response phone system to meet all your customer service needs. • Competitive rates and flexible options for down payments, installments and funding - JUST ASK.

Top Premium Finance Company

A Division of Premier America Credit Union 19867 Prairie St., Chatsworth, CA 91311 Phone: (800) 458-2228, Fax: (818) 721-3840 Email: TopMarketing@toppremiumfinance.com www.TopPremiumFinance.com • State-of-the-art technology to optimize broker efficiency • 24/7 quoting and account access with our online database • Ability to Finance Broker Fees • Competitive and flexible rates to assist brokers in a multitude of policies • 0-4% Producer Fee capability, adjustable to any policy

Tepco Premium Finance 1405 S. Rustle Rd., Spokane, WA 99224 Phone: (509) 462-1132, Fax: (509) 622-4702 Email: ncochrane@tepcofinance.com www.tepcofinance.com

• Looking to Finance Cannabis Risks • Licensed in 43 States and Counting • Great Service, Competitive Rates/ Compensation Packages

Thrifty Financial Services, Inc. 1691 Main St., Springfield, MA 01103 Phone: (800) 919-0015, Fax: (800) 736-5177 Marketing Rep: Mari Roy – (508) 450-0534 Email: thriftyfin@aol.com www.thriftyfinancial.com • The premium finance solution for Massachusetts insurance agents for 25 years. • State of the Art online technology. • Customer service that’s the best in the business and a full-time local marketing manager.

N44 | INSURANCE JOURNAL-NATIONAL REGION November 5, 2018

US Premium Finance 280 Technology Pkwy, Ste. 200, Norcross, GA 30092 Phone: 1 (866) 246-9691, Fax: 1 (866) 246-9692 Email: customerservice@uspremiumfinance.com www.USPremiumFinance.com • SERVICE: Knowledgeable network of experts delivering the best customer experience in the industry • TECHNOLOGY: User-friendly software with 24/7 access to quoting and your customer database • VALUE: Flexible terms and competitive rates to maximize the profitability of your business

www.insurancejournal.com

We heal relationships wounded at war. They’ve seen things no one should see. Every frontline Special Operator has some degree of Post Traumatic Stress Syndrome. Divorce rates are escalating at an alarming rate. Depression and suicide rates amound active duty and newly retired Special Operations Forces are up sharply. More than 22 veterans are committing suicide each day.

You can help. Operation Healing Forces provides retreats for U.S. Special Operations Forces veterans and their spouses. • 100% of every dollar we receive supports special operations wounded couple participation. • Over 400 retreat participants have been served since 2012. • Founded by Gary & Tony Markel.

To find out more, and to donate, visit us at

operationhealingforces.org

Closing Quote Helping Americans Bridge the Insurance Gap

By Robert Gordon

onsumers seldom think about auto and homeowners insurance until the unthinkable happens and they need to file a claim. However, with increasing frequency, Mother Nature is bringing widespread devastation to the U.S. So far, this is proving to be another damaging year. CoreLogic, a property information services company, estimates Hurricane Florence will cause wind and flood losses between $20 billion and $30 billion while early estimates project Hurricane Michael will cause between $15 billion to $21 billion in damages. Tragically, a majority of the families and communities hit by Florence and Michael were uninsured and will face additional challenges recovering from the devastation because of the gap in their insurance protection. Even with insurers paying out record sums and playing an instrumental role in the recovery process, the Geneva Association found that the U.S.

has more uninsured exposure than any other country. The numbers tell the story. Upwards of 80 percent to 85 percent of the homes and businesses hit by Hurricanes Florence and Michael did not have flood insurance. The insurance gap associated with earthquake insurance is also glaring, with 90 percent of homeowners and businesses in California lacking basic earthquake protections. States from Alaska to Maine face the threat of earthquake. However, too many Americans across the country donâ&#x20AC;&#x2122;t fully understand their risk nor the need for earthquake insurance. Renters are not exempt from natural disasters, and those who donâ&#x20AC;&#x2122;t have insurance can face financial challenges as they try to replace their belongings. Without renters insurance, an individual assistance grant from the Federal Emergency Management Agency may be their only option. Drivers are not exempt from the insurance gap. A 2017 study by the Insurance Research Council reported that roughly one-in-eight drivers is uninsured. Responsible drivers that follow mandatory liability insurance laws pay the price for other drivers that make the conscious choice to drive without insurance and are sometimes left with no protection after an accident. Now that the insurance gap has been identified, the ques-

46 | INSURANCE JOURNAL | NATIONAL NOVEMBER 5, 2018

tion becomes what can we do about it? Consumers, businesses, public policy leaders and the insurance industry can all play a role in bridging the insurance gap. The most urgent need is for Congress to reauthorize the National Flood Insurance Program, which is set to expire again on Nov. 30. Enacting a long-term bill with reforms that expand consumersâ&#x20AC;&#x2122; flood insurance options will provide consumers with more choice and stability. Policymakers and insurers should continue working together to bring more flood insurance options to the marketplace. Private sector participation in the flood insurance market could increase options and lower costs. The industry should work to better educate consumers about the insurance gap and what coverage is needed. Agents are on the front lines of financial literacy and are in an

key position to send a wake-up call for consumers to financially prepare. Insurers are also working with regulators and policyholders on new products and solutions for underserved markets, such innovative coverages for cyber exposure, autonomous vehicles and the gig economy. Insurers are also working with policymakers and communities on improving land use policies and building standards to improve disaster resiliency. Insurance is the critical safety net that helps individuals and communities rebound from catastrophes to small auto accidents. Now is the time to bridge the insurance gap so the nation is prepared for everything from disasters to the mishaps on our congested roads. Gordon is senior vice president of policy, research and international for the Property Casualty Insurers Association of America INSURANCEJOURNAL.COM

ERIN, LANDLORD/AMATEUR BOXER Your insured is complicated, which is why we make getting them a standalone personal umbrella so simple. Because landlords donâ&#x20AC;&#x2122;t always fit into a package, you can answer just 4 questions for a $5 million policy that works with their existing coverage. Available online 24/7 from an Admitted carrier, rated A+ XV by A.M. Best. Unbox the umbrella. Quote and order now at PersonalUmbrella.com. Family-owned and operated. Proudly dog-friendly. Available nationally. Underwriting criteria varies by state. Visit us online for guideLines. California Insurance License 0D08438. A.M. Best rating effective October 2018. For the latest rating, visit ambest.com.

Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com. ©2018 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.