wednesday_pp01-17FINAL.qxp
4/23/2013
9:22 PM
Page 1
WED
APR 24 2013
IN BRIEF
Emerging global markets
Ace reports $953 million in first-quarter net income
Insurers see big growth potential in Latin America
Ace Ltd. reported a 2.1% drop in net income, which fell to $953 million during the first quarter of 2013. The insurer’s net written premiums increased 6.3% to $3.8 billion. Its first-quarter 2013 combined ratio improved to 88.2% from 89.2% during the same period in 2012. “Premium revenue growth across the company was very good, with total net premiums up over 6%,” Ace Chairman and CEO Evan G. Greenberg said in a statement.
New Generali commercial unit targets medium, large companies Assicurazioni Generali S.p.A. established a global corporate and commercial business unit aimed at medium and large companies. In a statement Tuesday, the Trieste, Italy-based insurer said the unit has been set up to integrate and develop property/casualty and insurance services for midsize and large companies at the international level. The unit initially will focus on European countries where Generali already is active. Continued on page 22
COLLEGE STUDENT SNAPSHOT Victoria Vu is currently majoring in business administration with a concentration in risk management and insurance at California State University, Fullerton. Ms. Vu recently spoke with Business Insurance about her future plans. PAGE 14
BY JUDY GREENWALD The Latin American market presents significant opportunities for growth, an American International Group Inc. senior executive said at a breakfast Tuesday during the Risk & Insurance Management Society Inc.’s annual conference in Los Angeles. Sanjay Godhwani, Miamibased president of AIG’s property/casualty group, Latin America and the Caribbean, said the insurer has been in the region since opening an office in Cuba in the 1930s. And with a growing middle class, increasing consumer demand and little market penetration, “The race is on to grow market share,” he said.
AIG’s Sanjay Godhwani says insurers are competing intensely for market share in Latin America and the Caribbean.
“We’re all working hard to get ahead of each other,” said Mr. Godhwani, the keynote speaker
at the breakfast sponsored by See GODHWANI page 17
Globetrotting employees need protection BY RODD ZOLKOS With a global risk picture that’s decidedly mixed, organizations with employees traveling around the world are advised to assess the risks and take steps to address them before those employees set off, experts said Tuesday at the Risk & Insurance Management Society Inc.’s annual conference. Speaking on a panel examining Global Risks in 2013: Understanding and Preparing for What Lies Ahead, Iain Donald, senior vice president and
Americas director, global risk analysis, at Control Risks Group Holdings Ltd. in New York, said, “On the security side, global terrorism seems to be at something of a crossroads.” Efforts to control major terrorist groups have had some success, he said, though “there’s a possibility of a re-emergence of safe zones” for some of those groups. Most emergency evacuations of traveling employees are for medical reasons, said See GLOBAL page 17
MID-MARKET RISKS
HERE’S THE DEAL
GLOBAL CONCERNS
Hub execs weigh in on changing exposures
Howie Mandel giving closing presentation
Raising risk managers’ profiles worldwide
PAGE 3
PAGE 4
PAGE 4
Entire contents copyright by Crain Communications Inc. All rights reserved.
Top athletes are laser-focused on being the best. So are we. Discover how we help lower the total cost of risk for businesses worldwide. Visit us at booth #921.
© 2013 Liberty Mutual Insurance 36 US 220506
13bi0085.pdf
RunDate: BI Show Daily Wednesday
Full Page
Color: 4/C
wednesday_pp03-04-18FINAL.qxp
4/23/2013
9:06 PM
Page 1
WEDNESDAY, APRIL 24, 2013
Risks facing mid-market firms evolving Economics, international expansion are concerns BY JOANNE WOJCIK The types of risks challenging middle-market insurance buyers are evolving as the economy recovers and these business owners pursue growth opportunities, according to speakers at a press conference Tuesday during the 2013 Risk & Insurance Management Society Inc. conference in Los Angeles. “Economics is the No. 1 issue that middle-market companies are facing today,” said Julie Zimmer, vice president of sales and middle-market segment leader, at Hub International Ltd. in Chicago. Middle-market companies are pressured by international competition but concerned about the risks associated with international expansion, Ms. Zimmer said. Moreover, they often have insufficient access to capital markets, making it difficult for them to obtain the financing necessary to expand overseas, she said. The rising cost of health care
Economics is the No. 1 concern of midmarket firms, according to Julie Zimmer of Hub International.
and regulatory uncertainty associated with complying with the Patient Protection and Affordable Care Act are top issues for most middle-market companies, Ms. Zimmer said. They also worry that employee health benefit
costs will spill over into the workers compensation sphere if they are not properly managed by the health care system, she said. When it comes to property risks, fire is no longer the No. 1 exposure, according to Ms. Zimmer.
“Fire is not the issue. Now it’s catastrophes, something they may not be able to control by installing sprinklers or alarms,” she said. Oftentimes “there is a lack of true planning around catastrophic events” at middle-market companies, according to Todd Macumber, Chicago-based president of Hub’s risk services division, who also spoke during Tuesday’s press conference. The businesses losses in the aftermath of Superstorm Sandy and the Boston Marathon bombing demonstrate this, he said. “The plan may be old or untested,” he said. Auto fleet safety and combustible dust explosions are two emerging areas of risk for many middle-market companies, according to Mr. Macumber. Distracted driving now accounts for more than 18% of crashes, Ms. Zimmer said, and See HUB page 18
RISK MANAGER OF THE YEAR® & RISK MANAGEMENT HONOR ROLL®
From Left, RIMS Executive Director Mary Roth, RIMS President John Phelps, Risk Manager of the Year Lori Gray, Business Insurance Publisher Mark Stach, Risk Management Honor Roll inductees Dennis Royer, Michael Horvath and Chad Jackson, and BI Editor Gavin Souter. ®
®
BUSINESS INSURANCE
RIMS 2013
3
wednesday_pp03-04-18FINAL.qxp
4/23/2013
9:07 PM
Page 2
FEATUREFLASH/SHUTTERSTOCK.COM
WEDNESDAY, APRIL 24, 2013
Stepping up to the next level Risk management matures globally MIKE TSIKOUDAKIS
Conference close features Howie Mandel BY JOANNE WOJCIK Howie Mandel found a way to turn one of his greatest fears into an opportunity, pursuing a career on stage and screen despite his irrational fear of germs. The Canadian-born comedian revealed his condition, a form of obsessive-compulsive disorder known as mysophobia, during a 2006 appearance on Howard Stern’s radio show, and elaborated on it in his autobiography “Here’s the Deal: Don’t Touch Me.” Born in 1955 in Toronto, Mr. Mandel, 57, has been in show business for more than 30 years and is currently serving as the host and executive producer of the Fox television series “Mobbed” and NBC’s new show “Take it All.” Beyond television, his career also has spanned film and stage, including Wednesday’s 2:15 p.m. performance at the Risk & Insurance Management Society Inc. conference finale. But don’t expect to shake his hand afterward. Because of his condition, Mr. Mandel doesn’t shake hands. In fact, during his infamous early comedy routine, Mr. Mandel pulled a rubber glove over his head and inflated it by blowing on his thumb. But the glove was no joke. He wore it for protection.
4
RIMS 2013
Risk managers around the world want to raise the level of their profession within their organizations with a standard view and definition of risk management. Risk management and enterprise risk management programs differ in maturity across the globe, and an advanced risk management program improves business growth, panelists at the Risk & Insurance Management Society Inc.’s annual conference and exhibition said Tuesday during a session on risk management practices around the world. “There is definitely a positive value that organizations get the more mature their capabilities become,” said panelist Carol Fox, New York-based director of
strategic and enterprise risk practice at RIMS, during the session. The most critical consideration for risk managers around the
world is discerning how to “get value to the organization from See PRACTICES page 18
‘Hypersonic chaos’ a sign of the times BY BILL KENEALY The array of challenges facing risk managers are burgeoning in an era of “hypersonic chaos,” Risk & Insurance Management Society Inc. President John Phelps said Tuesday. Speaking at the 2013 RIMS conference and exhibition in Los Angeles, Mr. Phelps said a combination of factors including rapid technological change, regulatory pressure and economic upheaval have fundamentally altered the world in which risk managers operate. “During the course of my career, what I do has changed radically,” he said. “Uncertainty is faster than ever.” In addition to the speed at which
BUSINESS INSURANCE
RIMS’ Carolyn Snow, John Phelps and Mary Roth discuss rapid changes.
challenges present themselves, risk managers are under increased scrutiny from regulators, ratings agencies and corpo-
rate boards. “There is no more getting it roughly right,” he said. “You have to get it right.”
XL Group ,QVXUDQFH
3URSHUWLHVWUDQVSRUWHQHUJ\DUWPDQXIDFWXULQJLQVXUDQFHDHURVSDFHFRQWUDFWVRUSHRSOH :KHUHYHU\RXUZRUOGLVJRLQJZHšUHKHUHWRKHOS\RXUEXVLQHVVPRYHIDVWIDVWIRUZDUG
MAKE YOUR WORLD GO xlgroup.com
and MAKE YOUR WORLD GO are trademarks of XL Group plc companies. ;/*URXSLVWKHJOREDOEUDQGXVHGE\;/*URXSSOFšVLQVXUDQFHDQGUHLQVXUDQFHVXEVLGLDULHV
13bi0134.pdf
RunDate: BI Show Daily Wednesday
Full Page
Color: 4/C
wednesday_p06FINAL.qxp
4/23/2013
6:58 PM
Page 1
WEDNESDAY, APRIL 24, 2013
More captive insurers forming onshore Reasons include savings in travel costs, premium taxes MIKE TSIKOUDAKIS Small captive formations made up much of the captive growth in 2012, and organizations increasingly are considering onshore domiciles, according to a new report. Marsh Inc.’s 2013 Captive Benchmarking Report, “Discovering Opportunity in the Shifting Captive Landscape,” revealed that in 2012, 55% of companies with captive insurers had onshore captives compared with 45% domiciled in offshore jurisdictions. That compares with last year at 52% and 48%, respectively, and varies significantly from the 19912000 period, when 35% of new captives formed onshore vs. 65% off-
shore, according to the report, which was released Tuesday at the 2013 Risk & Insurance Management Society Inc.’s conference and exhibition. The findings are based on 886 single-parent captives managed by Marsh. “Captives continue to form onshore, mostly from an Americas perspective, but in Europe as well,” said Arthur G. Koritzinksy, Norwalk, Conn.-based managing director of captive solutions for Marsh USA Inc., at a press conference held to discuss the report. The onshore trend went up by 3% in 2012, Mr. Koritzinsky said. Onshore domicile interest was attributed to several factors, including travel cost savings,
changing insurance regulations and potential premium tax savings. While organizations looking to form captive insurance companies are increasingly considering onshore domiciles, large-scale redomestication of existing captives is not occurring. Of the 1,220 captives managed under Marsh, 16 redomiciled to a new jurisdiction in 2012, according to the report, which noted that the majority of the moves were to onshore locations but were not based on a specific event or set of circumstances. Offshore domiciles are ramping up efforts to attract new captives and retain existing captives to address increasing interest for
onshore locations, Michael Cormier, New York-based managing director and CEO for Marsh Risk Solutions, said at the press conference. “I think they’re always looking at how to extend or create a competitive advantage,” he said. To create that advantage, some domiciles may focus on other forms of alternative risk transfers methods to attract organizations, such as insurance-linked securities, sidecars or catastrophe bonds, he said. “The domicile business is like any other business,” Mr. Cormier said. “The ones that have an advantage are trying to figure out ways to extended it, and the ones that don’t are trying to catch up.”
Special RIMS 2013 Subscription Offer! One Year of a Premium Subscription + 4 weeks FREE for only $149! Save thousands off the regular rates!
PLUS!
Visit us at Booth #813 and enter to win a new 32GB iPAD* Sign up for a Business Insurance subscription today! Offer good for this event only. Subscribe now! Call 877-812-1587 and mention promo code 434RIMS www.businessinsurance.com/Save
or go to
1RSXUFKDVHQHFHVVDU\:LQQHUZLOOEHQRWL͆HGE\HPDLO 6
RIMS 2013
BUSINESS INSURANCE
FLEXIBILITY. PROTECTION. COMMITMENT.
At Sentry Insurance, we make a powerful promise to our customers – to be there when you need us most. As a mutual company, our business is built on long-term commitment to our customers, not short-term satisfaction of investors and analysts. We have the expertise to help you develop an insurance program to fit your business’s unique risk management needs, including workers’ compensation, general liability, auto and foreign casualty.
tTFOUSZDPN3*.4EBJMZ
Products and safety services are underwritten, issued and/or administered by a member of the Sentry Insurance Group, Stevens Point, WI. For a complete listing of companies, visit sentry.com. Policies, coverages, benefits and discounts are not available in all states. Certain restrictions apply. See policy for complete coverage details. 304700 11/19/12
13bi0131.pdf
RunDate: BI Show Daily
Full Page
Color: 4/C
wednesday_p08FINAL.qxp
4/23/2013
6:39 PM
Page 1
WEDNESDAY, APRIL 24, 2013
HEARD ON THE STREET What did you like most about the conference this year?
tweets FROM RIMS 2013
LISA HAVENS BAILEY Senior vice president and legal counsel Scott & White Healthcare Temple, Texas “One of the values I find coming to this conference is meeting risk managers from other industries, not just from health care, and learning from those risk managers.”
RICH JOHANSON Risk manager Science Applications International Corp. McLean, Va. “I don’t think it’s unique to this year’s conference: the networking. Reconnecting with peers I’ve met in the past and meeting new people is the invaluable part of the conference.”
“Board members are stewards of resources just like farmers,’’ Jeff Lakner, South Dakota Wheat Growers Cooperative. Jennifer Poeschl
Biggest challenge for some risk managers: ensuring they can respond to risks they have not faced before. Marsh
#RIMS2013 panel advises risk managers to make some noise and play a key role in creating social media policies for the workplace. IMRE Financial IQ
Workers comp pharma costs at #RIMS2013: Last 2 years in a row, more deaths from drug overdose than auto accidents WorkCompWire
Thrilled to hear that risk management is now driven top down in Europe rather than bottom up. Will others catch on? Chris Moss
JEFF PETTEGREW Executive director and CEO California Self-Insurers Security Fund Walnut Creek, Calif. “Everyone convenes here, so it gives me an opportunity to talk to many of our 550 members and other parties that are attending RIMS. It’s a valuable convention from the standpoint that we are all in one place at one time, so it makes it a lot more economical and feasible to meet at one time.”
#LSU Grads reunited! @corvelcorp #RIMS2013 Laura Davis
Brody and Telford express the importance of early reporting & investigation to control claims costs #RIMS 2013 Fundamentals of Claims Mgmt. Sedgwick
Our latest industry survey found over 23,000 jobs forecasted in 2013. Insurancecareer
DAVID CONCA Risk manager in transition New York “The exhibit floor is always wonderful, and the speakers and panels are good. It’s also been a joy preparing with some of my colleagues for the panel we are going to speak on (Wednesday). The panel is on advanced concepts on directors and officers liability, and it will focus on the Foreign Corrupt Practices Act.’’
8
RIMS 2013
BUSINESS INSURANCE
Check out cardstacker Bryan Berg building towers, ships and more at the STARR booth at #RIMS2013! Paradigm Outcomes
JOIN THE CONVERSATION at RIMS on Twitter. Use the hashtag #RIMS2013.
RESILIENCE DOESN’T STOP. At , we define a successful company as one that can FM Global overcome adversity and continue onward, often stronger than ever. That’s resilience. Which is why we offer one of the fastest claims processes of any commercial property insurer. After all, the sooner our clients can shake off a disruption, the sooner they’ll be able to have their goals back within reach. Learn more at fmglobal.com/resilience. WHEN YOU’RE RESILIENT, YOU’RE IN BUSINESS.
13bi0129.pdf
RunDate: BI Show Daily Wednesday
Full Page
Color: 4/C
wednesday_p10FINAL.qxp
4/23/2013
4:02 PM
Page 1
WEDNESDAY, APRIL 24, 2013
Robert Cartwright Jr. Robert Cartwright Jr., Exton, Pa.-based board member of the Risk & Insurance Management Society Inc., is loss prevention manager for the Northeast zone of vehicle service and tire retailer Bridgestone Retail Operations L.L.C. He contributes to RIMS lobbying efforts through his participation in the annual RIMS on the Hill conference. He recently spoke with Business Insurance Associate Editor Sheena Harrison about how risk managers can cope with a hardening workers compensation market and improve safety in their organizations. Edited excerpts follow.
Q
What are the most pressing legislative issues risk managers should be aware of on the federal and state levels?
A
On the federal level right now, we’re looking at the renewal for the Terrorism Risk Insurance Act of 2002 Reauthorization Act of 2013, which basically deals with the ability for entities to be insured in case of a terrorist attack or acts of terrorism. One of the things we’re looking at right now is a longterm availability and the affordability of insurance for any nuclear, biological, chemical, or radiological events caused by terrorists. It expires in 2014, so we’re looking for a long-term solution because it affects all lines of business — commercial property, workers comp, auto, general liability. The second thing, which I think affects both large and small markets, is the Strengthening Medicare and Repaying Taxpayers Act, which basically is one of the things that helps people be able to resolve their workers comp claims. The SMART Act was recently passed, now we’re just trying to make sure it gets implemented. Because even though a bill gets passed, it still needs to get put in the pipeline and pushed through. There’s a lot of savings there that are available for employers, both small and large. We just need to have the Medicare set-aside act in place.
Q
What are some of the main challenges companies are facing regarding employee safety?
10
RIMS 2013
BUSINESS INSURANCE
A
One of the things I’m seeing is education. I think we’ve looked at safety from a high level, and now the education of it and the involvement with the employees is very critical. The U.S. Occupational Safety and Health Administration has strengthened its ability to regulate and to monitor what employers are doing. But I think we want to get the inclusiveness of the employees. A lot of what we’re seeing right now is safety programs or safety committees that make sure that there’s a tiein and a buy-in for both the employer and the employee so they don’t see safety as a one-sided thing. I think the pendulum has swung too far on the one side, where employers didn’t have the inclusiveness of the employees. I think the pendulum is starting to swing toward the middle, and it benefits both the company and the workers at the same time.
Q
With the workers compensation market hardening, what are some best practices employers can use to help reduce their comp claims and costs?
A
Along with using third-party administrators, you’ve got to have a very good relationship with folks in the medical field, with folks in the legal field, and make sure that everybody’s on the same page. And claims administration needs to be done in a timely manner. The second thing helping employers reduce their claims costs is basically looking at their
activities to see why things are happening. A lot of times we look at a claim and we say, ‘OK, this is what happened.’ But we haven’t really measured why it happened to look at where we can do things from a prevention standpoint. With rates increasing, companies maybe need to look a little bit closer at why these events are happening to begin with and put in safety processes and/or tighten up with company practices that they already have in place. That will help to reduce some of their claims. Then when claims do happen, get other parties involved as soon as possible — investigation, medical attention and legal. That will minimize the time of something that could be handled within six months, versus it being handled in 18 months.
Q
How can loss-control professionals develop a relationship with insurance buyers in their companies to help both sides do their jobs more effectively?
A
The best way to develop a relationship with insurance buyers is to take the time to educate them with the nuances of the business. Each organization and industry has its own culture that factors into the type of insurances they require and how existing coverages should be modified. On-site visits are a great example of that education process. Having insurance buyers see first-hand how the organization operates can give them a better feel of how and why the business model works, and in turn provide them with the knowledge to make wellinformed recommendations for the organization.
Helping your
hedge risk.
Customized risk solutions grown here. Our sustainable solutions are rooted in our specialized knowledge, hands-on experience and a disciplined underwriting approach. At Endurance, we enable our clients to manage their exposure. FINANCIAL STRENGTH
INSURANCE
UÊA (Excellent)ÊvÀÊ° °Ê iÃÌÊ86ÊÃâiÊV>Ìi}ÀÞ®
*À«iÀÌÞÊUÊ >ÃÕ>ÌÞÊEÊ"Ì
iÀÊ-«iV>ÌÞÊ }ÀVÕÌÕÀiÊUÊ*ÀviÃÃ>Ê iÃÊ
UÊA (Strong)ÊvÀÊ-Ì>`>À`Ê>`Ê*À½Ã
www.endurance.bm
13bi0126.pdf
BE R M U D A S I N G A P O R E S W I T Z ER L A ND U N I T E D K I N G D O M U N I TE D S T A T E S
RunDate: BI Show Daily
Full Page
Color: 4/C
wednesday_p12FINAL.qxp
4/23/2013
4:03 PM
Page 1
WEDNESDAY, APRIL 24, 2013
LOCAL FLAVOR
BEACHCOMBER CAFE AT CRYSTAL COVE BEACH 15 Crystal Cove Laguna Beach, Calif. www.thebeachcombercafe.com
Santa Monica Pier provides a range of activities for visitors.
F
SIGHTS
rom the sun to the waves to the people watching, taking a trip to the ocean might just be the best way to experience southern California. Venice Beach, a local favorite, has plenty of entertainment to offer. Its boardwalk is regularly packed with
street vendors and performers, including musicians, dancers and even mimes on occasion. For a $10 day pass, health nuts can work out at the infamous Muscle Beach Gym, which was once the home gym of Arnold Schwarzenegger and Lou Ferrigno.
QUEEN MARY AT LONG BEACH 1126 Queens Hwy. Long Beach, Calif. www.queenmary.com While the Queen Mary eventually retired to Long Beach, Calif., in 1967, today’s visitors have the opportunity to experience every era of the historic vessel’s career. While its initial construction was delayed during the Great Depression, the ocean liner finally made its maiden voyage in 1936, providing guests with a ballroom, squash court and two cocktail bars and swimming pools. It earned the nickname “Grey Ghost” while serving as a troop ship in World War II, but the Queen Mary was returned to its more glamorous state by 1947. Today, guests can take tours covering these periods, as well as others focused on its more ghoulish history.
12
RIMS 2013
BUSINESS INSURANCE
JUAN CAMILO BERNAL/SHUTTERSTOCK
the
Less than three miles away sits the Santa Monica Pier, which provides a range of activities for visitors. Besides the aquarium, trapeze school, retro arcade and historic carousel, the pier is home to Pacific Park. This amusement park offers a number of games and rides, including a Ferris wheel, all located on the pier. For those easily stricken with motion sickness, the pier has plenty of places to eat, stores to shop in, and even a bait and tackle shop to do a little fishing off the pier. Santa Monica Beach itself stretches three and a half miles, offering opportunities for biking, fishing, surfing, volleyball and swimming. Sunbathers can even visit three “Butler Beach” locations to rent chairs, towels and other beach necessities. For additional information, visit www.venicebeach.com, santamonicapier.org, and www.santamonica.com.
In the 1920s, visitors and residents built small shelters along the beach at Crystal Cove, but by the late 1930s these beach dwellers were asked to vacate their cottages. Thanks to some preservation efforts on behalf of the original landowners, Crystal Cove was turned into a state park, with many of the renovated cottages still intact and now available for rent. In 2006, one of those cottages was converted into the Beachcomber Café, serving meals that would put the normal beachside tourist trap to shame.
ONE PICO AT THE SHUTTERS ON THE BEACH HOTEL 1 Pico Blvd. Santa Monica, Calif. www.shuttersonthebeach.com/ santa-monica-fine-dining Winner of Wine Spectator’s 2012 Award of Excellence, this restaurant has a wine list to keep even Californians pleased. Add a menu with everything from grilled Spanish octopus to slow-braised Colorado lamb shank, and the only thing better might be its views of the beach.
OVERARCHING Executive Assurance Specialty Units Large Commercial Group (LCG) Financial Institutions/Financial Services (FI/FS) Alternative Asset Protection (AAP) Growth & Middle Market (GMM)
Product Offerings Directors & Officers Liability (D&O) Employment Practices Liability (EPL) Fiduciary Liability Commercial Crime
Take a closer look into Arch’s Executive Assurance programs.
ARCH
SM
www.archinsurance.com
A.M. Best: “A+” Standard & Poor’s: “A+”
Insurance coverage is underwritten by one or more member companies of Arch Insurance Group in North America, which consists of (1) Arch Insurance Company (a Missouri corporation, NAIC # 11150) with admitted assets of $2.70 billion, total liabilities of $2.13 billion and surplus to policyholders of $563.48 million, (2) Arch Specialty Insurance Company (a Nebraska corporation, NAIC #21199) with admitted assets of $437.77 million, total liabilities of $166.01 million and surplus to policyholders of $271.76 million and (3) Arch Excess & Surplus Insurance Company (a Nebraska corporation, NAIC # 10946) with admitted assets of $61.30 million, total liabilities of $2.2 million and surplus to policyholders of $59.06 million. All figures are as shown in each entity’s respective Annual Report for the year ended December 31, 2012. Executive offices are located at One Liberty Plaza, New York, NY 10006. Not all insurance coverages or products are available in all jurisdictions. Coverage is subject to actual policy language. This information is intended for use by licensed insurance producers. © 2013 Arch Insurance Group Inc.
13bi0124.pdf
RunDate: BI Show Daily
Full Page
Color: 4/C
wednesday_p14FINAL.qxp
4/23/2013
4:05 PM
Page 1
WEDNESDAY, APRIL 24, 2013
College Student Snapshot: Victoria Vu What are your post-college career goals? My post-college career goal is to work for an insurance brokerage and study for the associate in risk management and chartered property casualty underwriter exams in order to obtain those professional designations. How did you become interested in risk management? I became interested in risk management through my involvement with Gamma Iota Sigma Center for Insurance Studies, and the Orange County, Calif., chapter of RIMS. My sister Briana recruited me into GIS during her presidency,
where I was able to interact with various insurance professionals and be knowledgeable about the various opportunities within the industry. The director of GIS, Weili Lu, is an energetic and passionate supporter of the insurance industry who has hosted professional events, seminars, and scholarships for students interested in pursuing a risk management and/or insurance career. As a student member of RIMS, I attended luncheon workshops hosted by the RIMS Orange County chapter to learn about current topics in risk management and network with a group of amicable and supportive individuals.
What do you hope to learn at RIMS 2013? During the RIMS 2013 conference, I would like to learn about the different risk practices in the various industries, as well as the cyber risks in an organization. This would be my first time attending the RIMS conference, and I am excited to meet and learn from all of the risk managers and professionals at the conference. What’s your favorite movie? My favorite movie is “Penelope.” What’s your favorite book? My favorite book is “Little Women.”
Victoria Vu is set on a career in risk management. Currently majoring in business administration with a concentration in risk management and insurance at California State University, Fullerton, where she is president of the Gamma Iota Sigma Center for Insurance Studies, she will be graduating as part of the Class of 2013. Ms. Vu recently spoke with Business Insurance Associate Editor Bill Kenealy about her future plans.
Meet and Greet Editorial Team at Booth #813 STAFF
APRIL 22 MONDAY
Mark Stach - Publisher
10 a.m.-11:15 a.m.
Gavin Souter- Editor
10 a.m.-noon
APRIL 23 TUESDAY
Paul Bomberger- Managing Editor
9 a.m.- 10:30 a.m.
Roberto Ceniceros- Senior Editor Bill Kenealy - Associate Editor
10 a.m.-11:30 a.m. 9 a.m.- 10:30 a.m.
Mike Tsikoudakis - Associate Editor
10:30 a.m.-noon
Joanne Wojcik- Senior Editor
3:45 p.m. - 5 p.m.
Rodd Zolkos - Senior Editor
1:30 p.m. - 2:45 p.m.
Follow all the latest RIMS 2013 news from our twitter feed @businsmagazine And while you’re at the booth register to win a new 32gb Wi-Fi iPad
14
RIMS 2013
BUSINESS INSURANCE
APRIL 24 WEDNESDAY
“Dempsey Partners brought balance to the claim process by being courteous, credible and smart, opening the lines of communication with the adjuster and, ultimately, their purse strings.”
talk to us.
c a l l u s t o d ay f o r a n u n b i a s e d , e x p e r t v i e w , t h a t y o u c a n t r u s t.
we know what’s on the line.
Visit dempseypartners.com or call 800.762.5052. Wilton, ct t Atlanta t Chicago t Dallas t Irvine New York t San Francisco t Tokyo Claims t Valuation t Forensics t Risk Consultation
se e us at r i ms 2 0 13 booth # 5 13
13bi0082.pdf
RunDate: BI Show Daily Wednesday
Full Page
Color: 4/C
wednesday_p16.qxp
4/23/2013
3:46 PM
Page 1
WEDNESDAY, APRIL 24, 2013
16
RIMS 2013
BUSINESS INSURANCE
wednesday_pp01-17FINAL.qxp
4/23/2013
9:25 PM
Page 2
WEDNESDAY, APRIL 24, 2013
GLOBAL Continued from page 1
Alex Puig, region security director-Americas, travel security services, at Control Risks’ office in Trevose, Pa. By comparison, the number of evacuations for political reasons is “extremely small,” he said. Regarding traveling employees’ exposure to global health crises, Dr. Myles Druckman, senior vice president and medical director, Americas region medical services, at International SOS Assistance Inc. in Los Angeles, said the health care infrastructures in many of the emerging market countries that businesses are targeting lag other aspects of their development. “You might be in an area where
you’re in a five-star hotel and you might assume there’s a five-star health facility in the area but it’s a big difference,” Dr. Druckman said. Companies need to assess the local health risks in those areas, he said, then plan, train and take steps to prevent employee health issues. Christopher Koppang, vice president, risk management, at Interstate Hotels & Resorts Inc. in Arlington, Va., said preparation is the key to addressing employee travel exposures. “We just have to have a plan in place to respond to these things when they occur,” he said. “From a corporate standpoint we’ve got ‘go’ and ‘no go’ countries,” Mr. Koppang said, and he encouraged organizations to utilize brokers and consultants in making their plans for protecting traveling employees.
GODHWANI Continued from page 1
Jardine Lloyd Thompson Group P.L.C. He compared Latin America to other regions, saying that Latin America’s economy is growing at a faster pace than developed economies. “We’re feeling bullish” about the prospects for insurance in the region, he said. “The hard part” for insurance companies is antiquated systems and business processes. In addition, he said, “It takes a great deal to convert the nonbuyer to a buyer.” “The loss ratio is good, but the expense ratio is burdensome,” Mr. Godhwani said, and insurers must invest “to make sure they can keep their expense ratio in line and not be burdened with that in the future.” Mr. Godhwani said after his speech that one major area of
growth for commercial insurance is in the small market enterprise segment. About 70% to 90% of Latin American businesses “would actually qualify as small business,” he said. On the large commercial side, he said, “the space is going to get bigger and bigger” and more complex. As Latin American companies sell products around the globe, “they’re going to have a need for more complex insurance products,” Mr. Godhwani said. Also speaking at the breakfast was Elizabeth Stephens, Londonbased partner, credit, political & security risks and financial risks for JLT Specialty Ltd. Ms. Stephens referred in her remarks to the 2014 World Cup and the 2016 Summer Olympics both in Brazil. While the economic boost of sporting events on a nation’s gross domestic product “is likely to be short-lived,” she said there’s still opportunity for investments in Brazil.
Not a member? Visit RIMS Hub at #1021 and learn how you can join for only $100 plus applicable chapter dues
BUSINESS INSURANCE
RIMS 2013
17
wednesday_pp03-04-18FINAL.qxp
4/23/2013
9:08 PM
Page 3
WEDNESDAY, APRIL 24, 2013
PRACTICES
“Natural (catastrophe) events were the biggest exposures,” he said, noting recent disasters in Australia, China, Japan and Thailand. “There is strong appetite in Asia to promote risk management professionalism,” he said. And risk
managers in Asia are seeking more recognition within their organizations. “It’s about ensuring that top management in companies have a fair understanding of what (risk management) means,” Mr. Baron said. “There’s a need for professionals to speak the language of business and interpret the data and analytics,” Ms. Fox said. “But if we’re going to raise the level of the profession, we have to talk about and figure out what we want to be and put some standardization around that,” she said. The risk management associations across the world — including RIMS, FERMA and the PanAsia Risk & Insurance Management Association — must work together to create a standardized understanding of risk management, Mr. Luzzi said. “We need to find a definition that will be a worldwide definition,” he said. If asked today “ ‘What is a risk manager,’ we’ll have various answers to this simple question,” Mr. Baron said.
said. “Cyber risks are just as important as property risks, but only a third of companies insure this risk,” Ms. Zimmer noted. By contrast, “they would never not insure their property,” she said. Reputational risk is also a growing concern for middle-market companies, both Ms. Zimmer and Mr. Macumber said. Warren Buffett, chairman of Berkshire Hathaway Inc. in Omaha, Neb., once said “it takes 20 years to build a business, but just five minutes to destroy one,” Mr. Macumber said. But with the proliferating use of social media such destruction could happen even faster, said Ms. Zimmer. Since most middle-market insurance buyers have made up their minds about what insurance
they’re interested in buying before they contact their brokers, intermediaries need to be proactive in providing education, innovation and resources to those buyers long before such decisions are made, according to Ms. Zimmer. The insurance buying process for middle-market firms has changed significantly in recent years, Ms. Zimmer said, since “60% to 70% of buying decisions are made before they contact us.” And because the individuals responsible for such buying decisions often wear many hats in most middle-market companies, they need that information to be packaged succinctly and delivered in multiple formats via technology as well as in person, Mr. Macumber said.
Continued from page 4
what you’re doing,” she said. In North America, “We’re seeing that we’re beyond that tipping point,” Ms. Fox said. Risk management and ERM functions within organizations are seen as necessary disciplines driven by members of the board of directors, she said. “Primary focus still remains on risk avoidance, loss reduction and assurance,” Ms. Fox said, noting that organizations face growing expectations and value in strategic risk management efforts. European risk management practices are focused on risk governance among top-level managers, risk reporting and communications, and synergies between internal audit and risk management, said panelist Jorge Luzzi, president of the Federation of European Risk Management Associations, based in Brussels. “The basics are in place. We need to grow on that,” Mr. Luzzi said.
AP PHOTO
Natural catastrophes, including recent disasters in Australia, China, Japan and Thailand, represent the biggest exposures for middle-market companies. Here, dogs help firemen search for survivors after Saturday’s 7.0-magnitude earthquake in China’s Sichuan Province.
The main risk management objective in Asia is to provide reasonable assurance that a company is managing its risks properly, said panelist Franck Baron, group general manager of risk and insurance for International SOS Assistance Inc.
HUB Continued from page 3
there is a shortage of “good, safe drivers.” In addition, the use and development of clean energy presents challenges, such as “roof loading” caused by the weight of heavy solar collectors, blade failures in wind turbines, and vehicle servicing safety when alternative fuels like natural gas are used, Mr. Macumber said. As more middle-market companies use the Internet for commerce, their vulnerability to potential cyber attacks from both external and internal hackers increases, according to Mr. Macumber. Moreover, such companies often have fewer internal
18
RIMS 2013
Todd Macumber of Hub discussed emerging areas of risk for middlemarket companies Tuesday.
staff to identify gaps in protection and to put internal controls in place to prevent intruders, he
BUSINESS INSURANCE
wednesday_p19FINAL.qxp
4/23/2013
7:29 PM
Page 1
WEDNESDAY, APRIL 24, 2013
BEST OF SHOW The Risk & Insurance Management Society Inc. has selected the exhibitor Best of Show winners for the 2013 conference and exhibition. The winners are picked by a group of conference attendees, according to RIMS, with judges weighing various criteria, including presentation of product, creative use of space, and overall design and layout.
Lloyd’s of London is the winner in the large category.
Progressive Medical Inc. took top honors in the medium category.
Modern Medical took the top spot in the small category.
BUSINESS INSURANCE
RIMS 2013
19
wednesday_p20.qxp
4/23/2013
7:42 PM
Page 1
WEDNESDAY, APRIL 24, 2013
20
RIMS 2013
BUSINESS INSURANCE
www.BusinessInusrance.com/W2W2013
DEAD
LINE
FO R N
OMIN
ATION S
JULY
31
2013 LEADERSHIP WORKSHOP AND AWARDS LUNCHEON
SAVE THE DATE December 3, 2013 New York Marriott Marquis Do you know a woman who deserves to be recognized for her outstanding contributions to your organization? Nominate her for the2013 Women to Watch Award.
Nomination deadline July 31, 2013 For sponsorship and event information, please contact Susan Stilwill, Advertising Sales Director,
[email protected], or call 312-649-5224 or Martha Donato, Director of Events & Brand Marketing,
[email protected], or call 845-545-0653 Presented by:
13bi0135.pdf
RunDate: BI Show Daily
Full Page
Color: 4/C
wednesday_p22FINAL.qxp
4/23/2013
6:19 PM
Page 1
WEDNESDAY, APRIL 24, 2013
IN BRIEF Continued from page 1
Colorado House passes stop-loss insurance bill The Colorado House of Representatives approved legislation that would restrict stop-loss insurance sold to small employers. The bill would amend Colorado's existing laws by establishing minimum specific attachment points of $20,000 for medical stop-loss coverage sold to self-insured employers with 50 or fewer full-time workers. It also would set minimum aggregate attachment points of 120% of expected claims, or $20,000, whichever is lower.
AROUND THE HALL EXHIBITORS AT RIMS
Pension funding declines for largest employer plans Funding levels of the nation’s largest employer pension plans dipped in 2012 despite employers’ highest contributions in five years and improved investment gains, Towers Watson & Co. said Tuesday. The consulting firm’s analysis of financial statements filed by sponsors of the 100 largest pension programs found that plans on average were 77.8% funded at the end of 2012, a decline from 2011’s average 78.5% funding level. Pension plan size was based on plan liabilities at the end of 2011.
offered various activities and attractions at their booths Tuesday to lure RIMS attendees. Clockwise from the top are: American Technologies Inc., Starr Cos., Rosenberg & Parker Surety Bonds and Express Scripts Inc.
RIMS 2013 VIDEO
For more on the conference, check out Business Insurance’s daily RIMS 2013 videos at www.businessinsurance.com/video.
Publisher/General Manager, Strategic Business Media: Mark Stach (Chicago) Associate Publisher/ Online General Manager: Paul D. Winston (Chicago) Editor: Gavin Souter (Chicago) Editor-at-Large: Jerry Geisel (Washington) Managing Editor: Paul Bomberger (Chicago) Assistant Managing Editors: Charmain Benton (Chicago); Aranya Tomseth (Chicago) Art Editor: William Murphy (Chicago) Senior Editors: Roberto Ceniceros (Boise); Judy Greenwald (San Jose); Mark A. Hofmann (Washington); Sarah Veysey (London); Joanne Wojcik (Denver); Rodd Zolkos (Chicago) Associate Editors: Matt Dunning (New York); Sheena Harrison (Chicago); Bill Kenealy (Chicago); Mike Tsikoudakis (Chicago) Copy Desk Chief: Katherine Downing (Chicago) Copy Editor: Ann Reus (Chicago) Video Producer/Copy Editor: Anna Gaynor (Chicago Director of Research: Angelina Villarreal (Chicago) Editorial Cartoonist: Roger Schillerstrom (Chicago) Advertising Sales Director: Susan Stilwill (Chicago) Regional Sales Managers: Ron Kolgraf (Boston); Robert B. Murray (New York); Mary Pemberton (Denver) Southeast & Classified Advertising Manager: Monique Murray (New York) Production Manager: J. Thomas Janka (Chicago) Assistant to the Publisher: Justine Karl (Chicago) Director of Events and Brand Marketing: Martha Donato (New York) Audience Marketing Director: Michelle O’Malley (Chicago) Director of Demand Generation Services: Steve Susina (Chicago) Marketing Manager Kathy L. Barnes (Chicago) Digital Product Manager: Christina Kneitz (Chicago) EDITORIAL: Boise: 208-286-1425; Chicago: 312-649-5200; Denver: 303-278-7444; London: 44-207-457-1400; New York: 212-210-0100; San Jose: 408-774-1500; Washington: 202-662-7200 ADVERTISING: Boston: 617-292-4856; Chicago: 312-649-5224; Denver 303-898-4043; New York: 212-210-0136 SUBSCRIPTIONS & SINGLE COPY SALES: 1-877-812-1587 (U.S. & Canada) 1-313-446-0450 (All other locations) Business Insurance is published by Crain Communications Inc. Crain Communications Inc. Board of Directors Chairman: Keith E. Crain President: Rance Crain Treasurer: Mary Kay Crain Cindi Crain Executive Vice President/Operations: William A. Morrow Senior Vice President/Group Publisher: Gloria Scoby Vice President/Group Publisher: Christopher Crain Vice President/Production & Manufacturing: Dave Kamis Chief Information Officer: Paul Dalpiaz G.D. Crain Jr.: Founder (1885-1973) Mrs. G.D. Crain Jr.: Chairman (1911-1996) Merrilee P. Crain: Secretary (1942-2012) S.R. Bernstein: Chairman-executive committee (1907-1993)
PHOTOS BY MICHAEL MARCOTTE
22
RIMS 2013
BUSINESS INSURANCE
13bi0120.pdf
RunDate: BI Show Daily Wednesday
Full Page
Color: 4/C
Up here, Challenges are Crystal Clear
In the world of risk management, it takes clear vision to build effective solutions to complex challenges. Alterra is a market-leading, global enterprise ready to offer you a wide range of reliable specialty insurance and reinsurance products. Superior financial strength. Excellent ratings. Disciplined underwriting. It’s clear to us. Let’s make it clear for you. // www.alterracap.com
Better talent. Better results. Specialty Insurance & Reinsurance
13bi0123R.pdf
Ratings: A.M. Best: A / S&P: A / Fitch: A / Moody’s: A3
RunDate: BI Show Daily Wednesday
Full Page
Color: 4/C
