Spring 2015 Issue of the Dallas Insurance Insider

DIIDallas Insurance Insider

Five Dangerous Myths of Network Security

A Deeper Look at The Ponemon Cost of Data Breach Analysis

21st Century Digital Agency

IIAD’s New TRIIAD Program

Digital Marketing Trends in 2015

Spring 2015 Official Publication of the Independent Insurance Agents of Dallas

5 Presidential address

7 EXECUTIVE ADDRESS

9 young agents presidential address

11 FIVE DANGEROUS MYTHS OF NETWORK SECURITY

13 2015 IIAD GOLF TOURNAMENT

15 INSURANCE EMPLOYMENT SERVICES

17 YOUNG AGENTS OF DALLAS

19 A DEEPER LOOK AT THE PONEMON COST OF DATA BREACH ANALYSIS

20 IIAD MEMBERSHIP BENEFITS

21 IIAD’S NEW MEMBERS

22 21ST CENTURY DIGITAL AGENCY

26 WORKERS COMPENSATION OR NON-SUBSCRIPTION: IS THERE A THIRD OPTION?

28 FIVE TIPS FOR SOCIAL MEDIA ENGAGEMENT

29 LARGE VALUE PROPERTY AND EARTHQUAKE: WHAT LIMITS ARE ENOUGH?

31 INSURANCE EMPLOYMENT SERVICES: TRIIAD PROGRAM

32 DEFINING DIGITAL MARKETING

33 DIGITAL MARKETING TRENDS IN 2015

35 FEBRUARY LUNCHEON Make a Wish Send Off Party

37 IIAD’S AMCL PROGRAM

IF YOU ARE INTERESTED IN CONTRIBUTING AN ARTICLE, PLEASE CONTACT ELIZABETH NELSON

AT 214-217-2900 OR [email protected]

TABLE OFCONTENTS

3

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While we can’t guarantee dividends every year, Texas Mutual Insurance Company has returned over $1.6 billion to safety-conscious

policyholder owners since 1999. Texas Mutual Insurance Company is rated ‘A’ by A.M. Best Company.

Your Clients Belong at the Corner of Safety and Dividends.

What if there was a workers’ comp provider that really cared about safety?

They cared so much that they rewarded policyholder owners who prevented

accidents with $1.6 billion in dividends? That would make a real difference—so

we made it happen. Texas Mutual is committed to helping agents deliver one,

simple message: Work Safe, Texas. It ’s not just good advice—it ’s the place

where Safety and Dividends come together. And it’s where your clients belong.

Learn more about safety-focused workers’ comp at WorkSafeTexas.com.

PRESIDENTIAL ADDRESS

Texas Agents like most Independent Agents across America have advanced their agencies with technological change to help stream line their processes and beef up profi tability. However, I have stated many times to my Staff that nothing happens service wise or process wise until a “Sale Happens” which in turn kick starts Agency service activity. We are merely kidding ourselves to think that we are a service organization fi rst. Independent Agents bring Value to their Agency when we establish a culture of sales that permeates the very being and fabric of our Agency Operations. When we lose sight of that we begin the demise of our operation and the slow path of diminished top line revenue and eventual bottom line disgust. I read an article recently that stated “If an agency can’t create an effective sales organization, it can’t create enough growth to satisfy its insurance carriers. And if it can’t create enough growth, the Top Producers in the Agency could very well bolt for greater opportunities”. The owners of sales-driven agencies incorporate steps to perpetuate their sales culture and enhance their growth: 1. Employ incredible talent with an inherent drive to search out prospective clients.2. Incorporate a sales training program that helps build a solid foundation for your incredible talent.3. Develop and implement workfl ows for marketing, selling and processing business.4. Apply proper technology to manage these workfl ows. Somewhere at the very genesis of an agency was an individual or two that embraced a Sales Culture allowing the Agency to grow and sustain itself. Agencies must fi nd a way to reinvent those individuals in order to continue its growth and profi tability.

Brook CRAWFORDYour presdient,

Independent Insurance Agents of Dallas and its Board of Directors along with its Executive Director and Staff have no better goal than to help foster the success and wellbeing of its Agent members by providing information and a platform to enhance the Sales Culture of our Agent Members and Associate Members. In turn we must be provided input via our IIAD Survey to understand the challenges and needs of our Members. I encourage all of our membership to complete our annual Survey and provide the Board of Directors information that could lead to added benefi ts to enhance the Prosperity of our Member Agencies.

We are all Blessed to be born, live and work in a Country that allows us the freedom and independence to choose a vocation of our choice unencumbered by forces that would push us in any particular direction other than our own choosing. We have chosen wisely as Independent Agents and the fruits of our labor are abundant and rewarding; which we should never take for granted. Though we are fi ercely independent we do band together as an Association for the enrichment of ourselves and one another, and in doing so we strengthen our independence in ways we could not otherwise.

Thanks for your participation in IIAD.

We have chosen wisely as independent agents anD the fruits of our labor are abundant and rewarding

“”

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EXECUTIVEADDRESS

April is a monumental month for our work with the Academy of Finance at Woodrow Wilson High School. In addition to InVEST volunteer teaching in the classroom, we are also hosting an Expo where students will learn about building a great resume, making a good impression with dress and interview and creating a solid future for themselves in our industry.

Additionally, we are coordinating with Travelers for a Job Shadow Day, collecting donations for the WWHS Professional Dress Clothes Closet, facilitating the Myron Steves scholarship awards presentations, identifying area independent agents and carriers willing to hire summer interns and pushing the students to complete InVEST scholarship applications.

Why spend so much energy and time with the Academy of Finance at WWHS? What better way to encourage young people to consider insurance as a career? The initial feedback from our recent agency survey indicates that attracting and hiring new talent is the fi rst priority of our members.

Many of these students will have an interest in studying insurance in college or starting an insurance job immediately upon their graduation from High School as a direct result of our members’ time spent as role models with them. Your involvement is critical to perpetuating our industry.

We love our relationship with WWHS, but the need for new blood in our industry cannot be met by one school. If you have a friend, neighbor or relative that works at another school/district, please tell them about the good work we are doing at WWHS. And please keep our new IES initiative TRIIAD (Training & Recruiting for IIAD) in mind for any young people you know that are looking for a way to get into insurance. The program will license, train, educate and then place new talent in entry-level positions.

Please complete your agency surveys if you have not already done so. Your input drives our initiatives. Thank you!

TAMMY LANDEXECUTIVE DIRECTOR OF IIAD,

Your involvement is critical to perpetuating our industry.

“” 7

Gary LINDSEYYoung agents president,

YOUNG AGENTSPRESIDENTIAL ADDRESS

In March, the Young Agents of Dallas hosted the annual sponsor recognition luncheon at Bent Tree Country Club to express gratitude for the generous financial contributions and the partnership of the Young Agents annual sponsors:

AmWins, Burns and Wilcox, Chubb, CRC, Great American Insurance, Hanover, Philadelphia, Republic, Travelers, Texas Mutual, and Union Standard.

Through the assistance of the annual sponsors, the Young Agents have provided food to the homeless, Christmas gifts to needy and sick children, and facilitated networking opportunities among young professionals in the Dallas insurance industry. These accomplishments could not have happened without the unwavering support of the Dallas Young Agent committee members; a collective group of devoted, selfless, and inspirational young professionals. Our Young Agents committee members tirelessly arrange funding, discover and schedule charitable endeavors, and facilitate site preparation for events. Thank you again to everyone who selflessly donates their time:

Vice-President – David Shotts with USI Southwest; Treasury – Jason Merritt with Patterson & Associates and Jose Flores with AIG; Philanthropy – Laura Gazette with Chubb and Erin Eisenrich with Hanover; Education – Annabel Williams with AIG and Shanda Swallers with Baldwin & Cox; Recruitment – Lindsey Kluempers with Boyd, Shackelford, & Barnett, Oscar Silva with Great American,

and Shaunte; Leguin with Cathey Insurance Services; Social – Jake Scott with CRC and Aaron Blain with Berkshire

Hathaway

Lastly, I would like to recognize Jose Flores, the 2014 Young Agent of the Year. Jose Flores was the 2013-2014 President of the Dallas Young Agents. We are grateful for your inspiration, motivation, dedication, and friendship.

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11

With more than 30 of the top brokers and underwriters in Texas, providing resources to help you win business

and grow is always on our to-do list.

AmWINS Brokerage of Texas has expertise in a variety of industries and coverage types including:

Property – all lines including catastrophe perils

Casualty – all lines including energy, construction and manufacturing

Financial Services – D&O, E&O, cyber and professional

Energy – upstream & downstream and control of well

Transportation – short haul, long haul and commercial auto

Worker Injury – workers’ compensation and non-subscription (TX and OK)

Binding Authorities – property, casualty, transportation and packages

Contact any AmWINS Brokerage of Texas broker or underwriter for assistance.

Dallas Office 5910 N. Central Expressway | Suite 500 | Dallas, TX 75206 | 214.528.3999

Houston OfficeTwo Greenway Plaza | Suite 400 | Houston, TX 77046 | 713.481.1680

With more than 30 of the top brokers and underwriters in Texas, providing resources to help you win business

and grow is always on our to-do list.

AmWINS Brokerage of Texas has expertise in a variety of industries and coverage types including:

Property – all lines including catastrophe perils

Casualty – all lines including energy, construction and manufacturing

Financial Services – D&O, E&O, cyber and professional

Energy – upstream & downstream and control of well

Transportation – short haul, long haul and commercial auto

Worker Injury – workers’ compensation and non-subscription (TX and OK)

Binding Authorities – property, casualty, transportation and packages

Contact any AmWINS Brokerage of Texas broker or underwriter for assistance.

Dallas Office 5910 N. Central Expressway | Suite 500 | Dallas, TX 75206 | 214.528.3999

Houston OfficeTwo Greenway Plaza | Suite 400 | Houston, TX 77046 | 713.481.1680

13

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JAIMEE GOEHRING, CIC, CISR

IIAD STAFFING SERVICES - IES

OFFICE: (214) 360-0794

FAX: (214) 360-9989

[email protected]

Finding the right person with the right skills and personality for your team is diffi cult. Posting ads, sorting through applications and resumes, conducting interviews, checking references, and testing skills takes time away from your regular duties. IES empowers you to focus on core job functions while we fi nd you qualifi ed workers.

Visit the Staffi ng Services tab at IIADallas.org for more information on job postings, job descriptions, resume and interview tips, and more.

IIAD STAFFING SERVICES

for information, contact:

INSURANCEEMPLOYMENT SERVICES

Dedicated to bringing people and companies together in a working relationship

Annual Salary

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$30,000.00 $3,600.00 $5,000.00 $2,400.00

$35,000.00 $4,200.00 $7,000.00 $2,800.00

$40,000.00 $4,800.00 $8,000.00 $3,200.00

$45,000.00 $5,400.00 $9,000.00 $3,600.00

$50,000.00 $6,000.00 $10,000.00 $4,000.00

$55,000.00 $6,600.00 $11,000.00 $4,400.00

$60,000.00 $7,200.00 $12,000.00 $4,800.00

15

© 2012 Western Security Surplus, WSS is a licensed Surplus Lines Broker and MGA dealing exclusively with licensed and appointed Retail Insurance Brokers.

California Insurance License #0622580 • Texas License: #15210

W H E T H E R I T ’ S O U R

O U T S T A N D I N G B A R / T A V E R N

P R O G R A M O R A N Y O T H E R

I N S U R A N C E P R O D U C T N E E D E D ,

W S S I S H E L P I N G C U S T O M E R S

T O A S T S U C C E S S !

ReadyT O S E R V E Y O U !

A L W A Y S

Western Security Surplus

Cheers!wssib.com

IIAD Golf TournamentJune 1st, 2015Dallas Athletic Club

University of North Texas graduates who are currently working in the Risk Management and Insurance Industry: We are building a database and network of UNT RMI alumni. Please forward your full name, position at your agency or company, email, phone number, and the year you graduated to [email protected]. We are calling all graduates of UNT regardless of major to enlist; more

information to follow. -Ron Patterson, Patterson & Associates

Class of 1972

17

The Young Agents of Dallas have had an impactful year from philanthropic and educational efforts to networking events. The Young Agents committee is open to insurance professionals under the age of forty. They host a brown bag lunch on the first Wednesday of every month to discuss events and assign tasks. If you are interested in joining and participating, please email

Elizabeth Nelson at [email protected] to be added to the mailing list.

A.M. Best rating of “A”(Excellent) FSC “XII”

Connect with us

I AmTrusted

Get started with an application at amtrustnorthamerica.comor call 877.528.7878 for more information.

Join our unmatched team of independent agents offering workers’ comp and commercial lines insurance, including:

• Small-Business, Multi-Line Coverage

• 6th Largest National Workers’ Comp Provider

• A.M. Best rating of “A” (Excellent)FSC “XII”

19

The Ponemon Institute recently released its annual dissection of data breaches entitled 2014 Cost of Data Breach: Global

Analysis. You may ascertain your own copy here: http://www-935.ibm.com/services/us/en/it-services/security-services/cost-of-data-

breach/

The Ponemon study’s conclusions surface in the majority of Cyber/Privacy insurance marketing materials, so it is worthwhile to take a deeper

look into the study’s findings.$201 is the average cost paid for each lost or stolen record containing sensitive and confidential information in the United States, which contemplates the indirect costs of “extrapolated value of customer loss resulting from turnover or diminished customer acquisition rates.” Lost business income has had a number of coverage approaches in the Cyber marketplace, but customer attrition is hard to measure and indemnify. Evidence of a policy that has paid for customer attrition as a result of a breach, and the forensic accounting used to arrive at an indemnity payment would be welcome to lend credence to the product. Also, the number includes opportunity costs, which is lost time (often of key employees) that could have been used to grow the top or bottom line at a given business. These opportunity costs are significantly defrayed by the purchase of a Cyber/Privacy policy as the policy supplies experts to handle post breach duties. While all of the $201 per record is

likely not insurable or does not have an adequate insurance solution yet, a significant portion is still insurable. Even if the insurable costs are reduced to $150, or even $100 per record, the calculations are enough to make any

prospect take notice.

The study does not include breaches of 100,000 or more compromised records as these “are not typical of the breaches most organizations experience.” The analysis is aimed at middle market entities across the globe, and it is not speaking to large breaches like TJ Maxx, Target, or Michaels, which should make it a little more credible to your clients. With “headline breaches” excluded, the average breach costs a company in the United States $5.4 million and has 29,000 records lost or

stolen.

Polling of professionals at the firms in the study calculated a 22% chance of a breach of ten thousand records in the next 24 months. The professionals polled most likely saw a lot less probability of a breach until they had one happen to their organization. In addition, one would think that these professionals and their respective organizations have increased the time and money spent on information security, yet they still see a significant probability of loss in spite of their

heightened data security measures.Organizations in healthcare and educational sectors are left with little

excuse not to purchase Cyber/Privacy insurance. The mean breach cost per record across the globe in the study was $145, but Healthcare and Education came in at $359 and $294 per record respectively. We are still seeing both sectors opting to self-insure at an

alarming rate.

While most insured’s and a majority of insurance practitioners first think of hackers when trying to grapple with Cyber/Privacy exposures, only 44% of breaches in the United States are malicious or criminal with 25% due to system glitches and 31% owed to human error. Technical Safeguards and strong IT budgets can only do so much. People make mistakes, lose data, or give personal information away unintentionally. Also, of note is that the study includes lost data. Lost data may not result in any harm to the breached individuals, but in the event that no one can account for the lost data, breach response costs must be incurred according to state and federal

privacy laws and regulations.

While most clients have little time to devote to insurance, someone will educate them on cyber/privacy. Being proactive in educating your clients will go a long way towards loyalty and differentiation on this class of

business.

A Deeper Look at The Ponemon Cost of Data Breach AnalysisMatthew Sheehan CPCU,RPLU,MLIS Vice President- Sheehan/Collins Team | CRC|Crump

Polling of professionals at the firms in the study calculated a 22% chance of a breach of ten thousand records in the next 24 months.A.M. Best rating of “A”

(Excellent) FSC “XII”

Connect with us

I AmTrusted

Get started with an application at amtrustnorthamerica.comor call 877.528.7878 for more information.

Join our unmatched team of independent agents offering workers’ comp and commercial lines insurance, including:

• Small-Business, Multi-Line Coverage

• 6th Largest National Workers’ Comp Provider

• A.M. Best rating of “A” (Excellent)FSC “XII”

MEMBERSHIP BENEFITS

We at IIAD are very proud of the services and benefits we bring to our industry. From recruiting and

networking to education and young professional forums, IIAD is here to serve.“

Tammy Land, IIAD Executive

Director

RecruitingSave money by using IIAD’s in-house recruiter, Jaimee Goehring! Not only will your find your future star employee, but you’ll do it for a fraction of a traditional recruiter’s Finders Fee!

NetworkingNo need to search out carriers throughout the Dallas-Fort Worth metroplex, meet them at one of our networking events!

EducationAttend our lectures and seminars held throughout the year and learn more about topics that regularly affect your business.

WELCOME NEW IIAD MEMBERS!

21

NEW IIAD MEMBERSACE Group (Associate)Tim Rau225 E. John Carpenter Freeway, Suite 1300Irving, TX [email protected]

ICW Group (Associate)Raeshel Parker9442 Capital of Texas Highway NorthArboretum Plaza One, Suite 500Austin, TX [email protected]

Starr Companies (Associate)Dr. Fred Lapointe8401 N. Central Expressway, Suite 515Dallas, TX [email protected]

English Insurance Group, LLC. (Agency)Chris English2231 Ridge Rd., #200Rockwall, TX [email protected]

National Federation of Independent Business (Associate)Deborah Isch400 W. 15th St., Suite 804Austin, TX [email protected]

The Parks Group, Inc. (Associate)Lana ParksP.O. Box 1670Arlington, TX [email protected]

Cathey Insurance Services (Agency)Shaunte LeGuin8150 North Central Expressway, Suite 1450Dallas, TX 75206 [email protected]

Essential Insurance Concepts (Agency)John Hosea2940 N. O’Connor #120Irving, TX [email protected]

MG Risk Advisors DBA MGRA (Agency)Mireya Hawthorne10000 N. Central Expressway, Suite 290Dallas, TX [email protected]

Love Insurance Agency (Agency)Ross Love III5400 E. Mockingbird Ln, Suite 224Dallas, TX [email protected]

Weatherby-Eisenrich Insurance (Agency)Eric Bua540 Silicon Dr., Suite 102Southlake, TX [email protected]

21

Technology is improving and streamlining internal operations, driving efficiency and accuracy of information. It is evolving customer engagement, creating expectations for constant communication and customer servicing through multiple

channels.

With the insurance industry’s high rate of both organic growth and consolidation, it is essential for agencies to develop differentiated offerings to remain competitive in today’s consolidating marketplace. Simultaneously, new, non-traditional entrants are disrupting the insurance industry, forcing agents to further elevate their individualized business proposition and reiterate their value as a trusted advisor to avoid commoditization in the marketplace.To deliver this differentiated level of client service and maintain effective and efficient internal operations, the 21st century agency must continue to evolve into a digital workspace. Paper files will be replaced by digital archives. Mobile devices will deliver access to client information while away from the office. The cloud will provide increased security and flexibility for growth. And the adoption of business intelligence solutions will tap into the abundance of building data to enable more informed decision making.

Scalability, Flexibility, and Productivity

To support growth goals and continue to attract and retain new clients and employees, agencies require an agency management system that delivers consistent workflows, standardized data, and a modern architecture that is scalable for growth. Consistent workflows provide universal procedures across locations and office branches, as well as simplify employee on-boarding and training. Standardized data provides a single view into an agency’s book of business, enabling them to better service their clients and identify opportunities to cross/upsell. By leveraging a modern agency management system, agencies

can quickly scale business operations across multiple locations and more easily integrate acquired entities. Additionally, through digitally-driven interactions and seamless workflows, leading agencies have gone paperless – cutting costs associated with paper filing and creating additional physical space to expand their employee base.

From a systems standpoint, technology like the cloud can provide agencies flexible access to information while protecting important data in a secure online environment that is not located within the physical office. Cloud solutions provide hardware,

networks, storage, services, applications and interfaces across the Internet, centralizing critical business intelligence and providing on-demand, remote access to information. By leveraging cloud technologies, insurance agencies capitalize on its benefits, including better user experiences, lower IT costs, increased business operations flexibility and stronger IT security.

21st Century Digital Agency

The proliferation of digital technology into society and the global economy has begun to blur the physical and digital worlds, triggering every industry to redefine their technology strategies to maintain

and grow business profitability.

To improve agent productivity, mobile technologies are breaking down the traditional workspace dynamics and enabling agents to deliver personalized client service away from the office while maintaining access to the latest client information. By removing the need to make multiple phone calls back to the office to verify information, agencies increase employee productivity and reduce time spent on duplicative administrative tasks. Additionally, the next wave of insurance professionals are statistically more mobile-connected than any other generation, agencies leveraging mobile capabilities as part of their daily operations will attract and retain top talent to drive business growth and profitability.

Connecting with the Digital ConsumerAs 21st century agencies automate internal business operations and digitalize their workplace, their clients will expect the same amount of online and mobile access to quote, renew, and document their policies and file claims. According to Bain and Company, Inc., more than 40% of Canadian P&C consumers will move purchasing behavior online in the next 3–5 years. To deliver superior online client servicing, leading Canadian insurance agencies have built out their company website and amplified their social presence to provide multichannel

servicing.

A recent Accenture study also reflected this online movement when it found that 72% of consumers would prefer to research products and pricing online. The 21st century agency provides online self-service quoting and pricing for their clients, which is seamlessly linked to an agency management system for automated exchange of information. To ensure agents continue to act as the insured’s trusted advisor, insurance technology is available to document new quoting activities, triggering personal outreach from the agent to the insured for follow-up advice and product guidance. While operating a digital workplace, agencies need to maintain the personal element of their multichannel service, differentiating their business proposition from that of direct

writers.

Article Contribution Courtesy of

“As 21st century agencies automate internal business operations and digitalize their workplace, their clients will expect the same amount of online and mobile access to quote, renew, and document

their policies and file claims.”23

Brokerage. Underwriting. Programs. The new CRC family of companies delivers. Across our eight wholesale-dedicated brands, we have experts who can place risks of any size for nearly any industry.

Our 54 offices, 1,700 employees, and 300 brokers and underwriters wrote more than $4 billion in premium last year. We are ready to introduce you to our growing family and say, "Welcome home to the new CRC!"

www.crcins.com/ourfamily

CRC | CRC|CRUMP | SOUTHERN CROSS | 5STAR | HANLEIGH | NEGLEY | TAPCO | TARGET©CRC Insurance Services, Inc. CA license 0778135, Crump Insurance Services, Inc. CA license 0F44166

Your New Wholesale Family

14001 North Dallas Parkway Suite M100 Dallas, TX 75240972.371.7000 Phone866.723.6510 Toll Free972.371.7010 Fax

7557 Rambler Road,Suite 300, Dallas, TX 75231214.363.7636 Phone800.522.7867 Toll Free214.691.5460 Fax

continued from page 23

25

Today, the agency channel needs to harness the benefits of advanced technology to manage their businesses. Insurance consumers expect greater access to information and more control over their decisions, while insurers continually seek new and better ways to market and sell insurance products. The future of insurance will be shaped by independent agencies ability to lower the cost required to sustain revenue growth and properly service their clients. By implementing technology innovations and becoming a 21st century digital agency, independent agencies enhance an organization’s growth, profitability and agility both

now and in the future.

continued from page 23Agency Gone Digital

Swingle Collins & Associates, one of the largest independent Commercial & Personal insurance agencies in Texas, focuses on providing key benefits to businesses and families, providing customized coverage, the best claims representation, and the finest customer service – all while keeping premiums low. To enhance customer service options, Swingle Collins & Associates employs advanced technology to streamline tasks, automate carrier communications, and provide online client self-service capabilities, successfully modernizing daily business operations and creating a paperless

work environment.

Increasingly, Swingle Collins & Associate’s clients expect sophisticated technology and capabilities, including on-demand self-service for insurance policy information and certificate management. “Time is a valuable commodity, and we understand that it is not always practical to wait for a certificate request to be processed,” said Frank Swingle, founder and president of Swingle Collins & Associates. “Through our Certificate Services, our agents are able to extend this amenity to our valued clients 24/7 by providing a time-effective means to obtain certificates of insurance. In addition to the daily convenience of being able to issue a certificate online, this unique service allows our customers to manage their business in a hassle free and organized fashion, something that is increasingly important as

policy renewal time approaches.”

Leveraging Digital DataFor 2014, Gartner predicted that business intelligence and analytics would remain CIO’s top technology priority. With the exponential growth of data, leading agencies are now evaluating ways to extract and analyze pre-existing data in an intuitive visual format to make more informed business decisions. Agencies can evaluate their book of business, enabling them to better understand retention rates, growth markets, and leading lines of business. Business intelligence solutions also provide information about business metrics such as how efficiently is the business operating, how quickly are tasks being completed, workflow bottlenecks, and which employees are hitting sales

goals.

Business intelligence builds upon the capabilities of the traditional reporting that agencies have relied on to date. Whereas traditional reporting allows agencies to examine “what happened” using data based on a defined set of criteria at a specific moment in time; advanced business intelligence solutions allow agencies to study “why something happened” by using visual representations of their data that are interactive and dynamic. Business intelligence solutions enable agencies to change criteria on the fly and drill deeper into a segment of the business or a subject matter to obtain greater business insights, as well as offer predictive statistical

models to estimate likely future outcomes.

“Business intelligence solutions enable agencies to change criteria on the fly and drill deeper into a segment of the business or a subject matter to obtain greater business insights, as well as offer predictive statistical models to estimate likely future outcomes.”

What is Workers Compensation? Simply, it is an Occupation Injury Benefit Program with the

benefits determined by the state.

What is Non-Subscription: an Occupational Injury Benefit Program with the benefits

determined by the Employer.

If the explanation is this simple, why is Non-subscription considered so complicated? Let’s

go back to the beginning.

If you look up “Non- Subscription” or “Non- Subscriber” in the dictionary or Wikipedia, you will find those words do not exist. They were made up in the 1980’s to describe employers who did not purchase Workers Compensation (WC).

Whoever made up those words did a lousy job. Why would anyone begin a word with the term “non”, a term that can be defined as “against”? What was non-subscription supposed to be “against”? Some agencies felt non-subscription was “against WC”, and thus could not support it, especially with an aggregate policy limit that still prevails today. Other felt they needed to support non-subscription to provide employers an

option.

CPro Associates, Inc. and our A+ XV partner decided to eliminate the old terms and start from scratch. If WC is truly an occupational injury benefit program with the benefits determined by each state, then any Agency should feel comfortable working with an occupational injury benefit program with benefits determined

by the Employer and nopolicy aggregate.

We started with the name. We are anything but a traditional non- subscriber benefit program: we are “The CPro Texas Option”. 33% of all Texas employers—Companies like WalMart and Home Depot, Baylor and Hermann Hospitals, Neiman Marcus and Macy’s, Sonic and McDonald’s, as well as your local garage, the nearest manufacturing or machine shop, and the Bar-B-Q restaurant just down the street---chose an option other than WC; the three

main ones being:

1. Pricing generally 25-40% less than WC, even for credit mod accounts

2. Adoption of advanced risk management techniques and claims control generally

unavailable within the WC system3. WC experience mods drop off after 3

years. Debit mod accounts love thisfeature.

We also looked at the five main reasons we found Employers choose WC:

1. Contractually or legally (i.e. public entities) required to carry WC

2. Agent/Insured unaware that another option exists

3. Insufficient protection to employer for legal liability claims

4. Insufficient benefits to injured employees

5. Participating in a WC dividend plan

Workers Compensation or Non- Subscription:Is There A Third Option?

A comparison with WC is beyond the scope of this Article, but it is easily acknowledged that WC provides certain unparalleled occupational injury benefits: among them lifetime medical and 401 week disability benefits for total disability. Clearly the more hazardous classes should never consider anything other than

WC. In CPro’s estimation, those

classes include, but are not limited to, certain oil and gas classes, airlines, things that go “boom” (refineries, explosive mfg., etc.) and height exposures above two stories (roofers, etc.). Because we feel these classes should remain with WC, we do not offer “The CPro Texas Option” to

them.

To provide the greatest benefit to both large and small non- hazardous employers who are focused on employee safety, reduced expenses and excellent employee benefits, there was much we learned from WC to simplify and update a quarter century old product. What we adopted into “The CPro Texas

Option” are:

- WC provides benefits for medical, disability, death, and

employers liability. So does “The CPro Texas Option”.

- WC provides No Dollar Limit Medical. “The CPro Texas

Option” also provides “NoDollar Limit” Medical.

- Each benefit has its own limits; one benefit does not reduce

any other. “The CProTexas Option” also provides separate

limits for each benefit.- Under WC, every employee has their own benefits. In a common

occurrence, one employee’s benefit does not reduce benefits to another

employee involved in the same occurrence. “The CPro Texas

Option” provides every employee their own individual benefits.

- WC does not have an aggregate: neither does “The CPro

Texas Option”.- Under WC, the EL section

protects the employer on a per person basis, and usually at a

maximum of $1,000,000. “The CPro Texas Option” provides legal liability protection to the Employer on a per

person basis. With the maximum$5,000,000 limit and a 20 person

occurrence, up to $100,000,000 of legal liability

($5mil x 20 employees) would be available to the employer.

“The CPro Texas Option” is not a substitute for WC. It is an

Occupational Injury BenefitProgram that provides options not generally available within the WC

system, such as:

- WC provides disability benefits of up to 70% (75% for

employees making less than$8.50/hour) of the average weekly wage. “The CPro Texas Option” allows the employer to choose

benefit levels from 70% to 90%.- The current maximum weekly disability limit under WC is $861. For higher wage industries,

“The CPro Texas Option” provides weekly benefits up to $1,000.

- WC provides up to 401 weeks of disability benefits for total

disability. “The CProTexas Option” provides the

employer choices of 2, 3, or 5 year benefit periods.

- Legal liability claims under WC must be filed in the courts.

“The CPro Texas Option” provides mandatory arbitration. Under WC, legal liability requires a death and gross negligence. For employers

not purchasing WC, to have legal liability, an employer’s negligence

must be the proximate cause of the injury.

Both are high bars but WC is higher. Arbitration is one of the advanced risk management techniques used by

“The CPro Texas Option”.

No article can provide a comprehensive overview of “The CPro Texas Option”. This discussion did not even touch upon the advanced risk management and claims handling techniques that allow “The CPro Texas Option” to offer an Aristocratic Product at a Democratic price: priced competitively with traditional non- subscriber products, even with “The CPro Texas Option’s” significantly enhanced benefits, and

up to 25%-40% less than WC.

For additional information, or to schedule a meeting to discuss “The

CPro Texas Option”in greater detail, contact Alan Hardin

at [email protected].

27

Alan Hardin is CEO of CPro Associates, Inc., an MGA specializing in “The CPro Texas Option” Occupational Injury Plan and large

account three year WC policies.

[email protected]

www.cproassociates.com

29

Following is a rule of thumb presuming that the PML method is the best practice method short of an engineering study. Example follows: a high-rise building located in an earthquake prone area (Rule of Thumb:

within one hundred miles of an active fault line.)The building value is sixty million dollars and has a single foundation. PML underwriting attempts to estimate or nominate the probable maximum damage and cost associated with the repair. In this case the PML is between ten and fifteen percent of the Total Insurable Value. Hence, on this building the exposure is expected to be between a six and nine million-dollar maximum. Consequently, a maximum earthquake limit between six and nine million dollars would be recommended, but not qualified in the Proposal. Keep in mind that this example assumes to be located upon or within one hundred miles of a fault line. The PML damage estimate is based on an event of 6.0 to 7.0 magnitude. Experience suggests that building damages begin to appear at 6.0 depending on age and construction. This scenario contemplates a five percent of value deductible. As a point of information, no significant earthquake event has triggered insured claims or damages in the U S since 1992. None have ever occurred or been paid in Texas according to my

sources.On buildings and locations that are not a single foundation, the exposures can increase exponentially. For example, take a condominium association located in Dallas with a Total Insurable Value of thirty million dollars and seventy-six buildings. The average building value is $394,000. At a five percent deductible per

building, the deductible would be $19,736. The overall aggregate deductible would be 1.5 million dollars. Presuming that the foundation cost on a single building is eighteen percent (my number), the exposure to damaged or totaled foundations would be about around five million dollars. overall total or $70,000 per building. Worst-case scenario, if an event damaged foundations to the extent that it triggered a tear down and rebuild, the fifty thousand dollars collected after deductible (per building) would be woefully deficient. If this were a result of ordinance, it would open a second area of discussion, which I am not addressing here. The exposure to underwriters in this scenario is much greater, hence, the cost for a million dollar primary DIC Policy would be higher, even prohibitive, and the capacity would be

limited.According to my limited research, the average consumer of a single building buys an earthquake limit between two and half and five million dollars, which is usually between five and ten percent of the Total Insurable Value. The average consumer on a property with multiple or many buildings generally buys a basic one million dollar earthquake Limit and the cost is usually between five thousand and ten thousand dollars annually for that

primary DIC Policy.My personal opinion is that we are 2,000 miles east of California and 600 miles west of New Madrid on the North American Tectonic Plate and have never been classified as an earthquake zone by the USGS. We have never had a case of minor earthquake damage to buildings in recorded history. DIC Coverage is not

usually required by Lenders or Owners.

31

33

800.800.4007 [email protected] midlandsmgt.com

Texas Non-SubscriptionA Texan Has the Right To Choose an Alternative Form of Workers’ Compensation!

35

800.800.4007 [email protected] midlandsmgt.com

Texas Non-SubscriptionA Texan Has the Right To Choose an Alternative Form of Workers’ Compensation!

2015 February Member Luncheon:IIAD Members Support Make a Wish Recipient with Send Off

PartyAt the 2015 February Member Luncheon, IIAD had a few special guests present. First was Matthew Sheahen with CRC, who instructed the continuing education course. Charlie Kingdollar, Vice President and Emerging Issues Officer at Gen Re, was the guest speaker and he

challenged IIAD members brains with his engaging topic about emerging issues. Charlie briefly touched on

nanotechnology, smart cars, and the NFL.

Breana Bladel, IIAD’s Make-a-Wish grant recipient, was in attendance with her mother, father, two sisters, and Make-a-Wish representative. IIAD Members wore pink and decked out the Oak Room at the Bent Tree Country Club in recognition of Breana’s heart replacement that took place last year. The IIAD Board of Directors presented gifts to her, including a $500 gift card for her trip to Disneyworld. IIAD’s send off party also featured Janet Bernstein, who sang her rendition of “A Whole New

World”.

IIAD is proud to sponsor the Bladel family’s trip to Disneyworld and wishes them happiness and prosperity in the future. Thank you, IIAD members, for your continued

philanthropic support of our community.

Tammy LandExecutive Director of IIAD

Jaimee GoehringDirector of

Insurance Employment Services

Elizabeth NelsonMarketing and Communications

Director of IIAD

IIAD’s Account Manager Certification Program is a blend of online and classroom training courses that will set the foundation of knowledge about Commercial lines that a new Account Manager needs to be successful in an

independent agency.

Each track includes online training, provided by WebCE, intended to cover an overview of the lines and two ½ day classroom courses taught by experienced IIAD members discussing the lines in more detail; adding

real-world experience and examples to the concepts.

Participants will need to complete the WebCE 7-hour online training first; then, register for two separate half-day sessions

of classroom trainings taking place at the IIAD Conference Center.

AMCL costs $300 for IIAD members and $450for others. For more information, visit www.IIADallas.org

Exclusively available through WebCE & IIADACCOUNT MANAGER COMMERCIAL LINES

Independent Insurance Agents of Dallas has teamed up with WebCE, the leading insurance continuing education provider in North America, to bring you a unique

certification program designed specifically for the Account Manager.This course is offered quarterly.

37

txconstructionwc.com Gina O’Hara: [email protected] • 888.275.2626, ext. 6324

Place your Texas Mutual insureds into a Texas Construction Association (TCA) safety group, and receive $100! TCA safety groups save your clients money and build your loyal customer base — you keep all the commission and control of the account.

1. If your client is not already a TCA member, they can join TCA direct. Fill out the TCA membership application at txconstructionwc.com. Membership dues start as low as $200/year.

2. Submit a workers’ comp application directly to Texas Mutual Insurance Company, and ask them to quote it in the TCA group.

Get Lower Workers’ Comp Premiums for Your Construction Clients. Earn a $100* Bonus.

* $50 for the producer/$50 for the CSR

2 MYRON STEVES www.myronsteves.com

4 TEXAS MUTUAL www.texasmutual.com

6 HULL & CO www.hullco.com 8 GENESIS RESOURCES www.genesisresources.com

10 BURNS & WILCOX www.burnsandwilcox.com 12 AmWINS BROKERAGE OF TEXAS www.amwins.com

14 Commercial ideas WWW.commideas.com

16 western security surplUS www.wssib.com

18 AMTRUST www.amtrustgroup.com

24 CRC | CRC CRUMP www.crcins.com 34 MIDLANDS www.midlandsmgt.coM 34 AMERISAFE www.AMERSAFE.COM

31 chubb www.chubb.com

36 u.s. risK www.usrisk.com

38 texas construction association www.texcon.org

40 SERVICE LLOYDS INSURANCE COMPANY www.servicelloyds.com

THE DALLAS INSURANCE INSIDER IS DESIGNED,

EDITED, AND PUBLISHED BY ELIZABETH NELSON.

FOR ADVERTISING READERSHIP, INQUIRIES, AND

ARTICLE SUBMISSIONS, PLEASE CONTACT

214-217-2900 OR [email protected].

INDEX TO ADVERTISERS

We’re still the same Texas workers compensationcarrier you have counted on for over 30 years.

We’ve just updated our look.

To learn more about our companycall (800) 299-6977 or visit www.servicelloyds.com.