Libertate/RiskMD Merge with Ballator Group

ORLANDO, December 18, 2018 / PRNewswire / —

IMMEDIATE RELEASE:  RiskMD and Libertate Insurance merge with Ballator Insurance Group

Ballator Insurance Group (“BIG”) and Libertate Insurance/RiskMD have merged to combine forces in support of insurance placements and data management for Professional Employer Organizations (“PEO’s”).  BIG and its senior management team have created multiple risk-bearing entities with specialization in “governmental entities”, “not for profits” and “automotive dealers”.  Libertate is a general agency focused on the property and casualty insurance needs of the PEO industry and RiskMD manages data based on a recently patented process.

“The combination of these entities is truly accretive” according to the head of Libertate, Paul Hughes.  “I have known the management team of Ballator for many years and we share common values, beliefs and vision.  They are going to be a tremendous influence in the next chapter of supplying best of class capacity, data management and professional consultation to our PEO clientele.  Our combined capabilities allow us to go very deep in what we are able to offer whether as an insurance agent, a due diligence/data consultant or overall trusted advisor.  Our resources are now greater  than ever before.”

According to Ballator CEO Shane Caldwell, “We are very excited about the the addition of Libertate to the Ballator group of companies. Libertate’s specialty focus and RiskMd’s innovative technology will prove to be a great enhancement for our team members and clients.” 

The combination of Libertate’s premiums with that of B.I.G. brings overall property and casualty premiums under management to close to $200m.

Subsidiary or Affiliate? Don’t Wait For a D&O Claim to Find Out.

From contributor Lisa Burbage, director and professional broker with CRC’s Seattle, WA office.

http://crcgroupins.com/Tools-Intel/post/subsidiary-or-affiliate

When insureds own multiple companies, they may assume that all the entities in their portfolio are covered by their corporate management liability policy. That can be an expensive mistake. The reality is that it comes down to the actual wording on their policy.

UNDERSTANDING THE DIFFERENCE

Confusion often arises over whether a company is a covered subsidiary or a potentially non-covered affiliate. This is particularly true for industries such as real estate, restaurants and healthcare that frequently create single-purpose entities to manage the liability risks of separate ventures. Newly created corporations or limited liability companies (LLCs) may be owned in whole or in part by the same owners of the first Named Insured whose name is on the insurance policy, but not by the named insured itself. That distinction is crucial.

STAYING ON TOP OF CHANGES

Because companies are not static, gaps in coverage may arise when an Insured assumes their newly created affiliates are covered under their policies. Over the course of a year, it’s quite possible that insureds have created or invested in new LLCs or corporations. Further heightening the risk, more and more carriers send out automatic renewal quotes, putting the burden on the insured to update their organizational structure with the underwriter.

To avoid finding out that the policy doesn’t provide coverage after a claim is made, it’s important to explain the difference and the potential consequences to clients. This can help clients understand the distinction and to provide more detailed information. Clients should be asked to list every company they want covered along with its ownership structure at every renewal. Uncovered affiliates can usually be added to the policy by endorsement for no charge as long as the rating exposures are included on the application. Not knowing when an entity is an affiliate means that affirmative coverage can’t be granted by endorsement.

BOTTOM LINE

It pays to know your clients’ businesses. Don’t wait for a claim to be denied to discover that a client’s affiliate company isn’t covered by the corporate D&O or EPL policy. Brokers should educate clients on the difference, make sure they properly identify all of the subsidiaries and affiliates they want covered at every renewal, and add them to the policy. Taking a proactive approach now can prevent an expensive claim denial later.

 

Workers Compensation & PEO; Not all States are Created Equal

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According to RiskMD, a proprietary, patented, PEO focused data management and analytics firm, some states consistently outperform others regardless of industry or NCCI hazard code; others may surprise you!

Here we looked at undeveloped loss ratios and frequency as a function of claim count per $1M in payroll by NCCI hazard code according to the following groupings;

  • Hazard Groups A & B
  • Hazard Groups C, D & E
  • Hazard Groups F & G

We looked at this data both on national and state specific levels for the past seven years and found that the performance of some states may surprise you. This is based on client company performance aggregated at the state and national levels, regardless of policy structure.

NY and CA, for example, maintained their lowest loss ratios in Hazard Groups F & G and performed most poorly in Hazard Groups A & B over this seven-year period.

NJ, MA, and the National Aggregate performed best by both loss ratio and frequency over the past seven years in Hazard Groups C, D & E.

Performance by loss ratio for TX, FL and IL, increased incrementally as the hazard levels increased, however for these states, the incident of loss (frequency) consistently occurred higher within the Hazard Groups A & B than within the Hazard Groups C, D & D.

Analyzing your historical data is one of the best ways to predict future trends in your book of business and evaluate appropriate pricing of clients.

Find out what truths are hidden in your data.

Speak to a RiskMD representative to learn more.  www.riskmd.com

MMC Poised to Become Reinsurance Goliath

In the move to buy Jardines Lloyds Thompson Group (JLT), MMC (Marsh) is poised to be the biggest global reinsurance intermediary by 40% over Aon.  Both groups have been active in PEO placements and it will be interesting to see the new combined vision.

MMC (re)insurance business to be 40 percent bigger than rival Aon

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MMC’s $5.6bn acquisition of Jardine Lloyd Thompson Group (JLT) will cement the group’s position as the industry’s largest global broker based on (re)insurance revenues and will also create a 40 percent top line differential based on 2017 results.

Last year, MMC’s risk and insurance services division posted revenues of $7630mn vs Aon’s total (re)insurance revenues of $6378mn.

However, JLT’s risk and insurance division posted revenues of £1065.8mn in 2017, the equivalent of $1396mn at today’s exchange rate of £1:$1.31.

MMC-JLT-top-line-40%-higher

On pro-forma terms, this would make the combined group’s top line based on 2017 (re)insurance revenues as high as $9026mn; a significant milestone from Aon’s $6378mn, or 40 percent higher.

Earlier today, re-Insurance revealed that a combined Guy Carp-JLT Re will become the largest reinsurance intermediary, overtaking Aon’s reinsurance arm, Aon Reinsurance Solutions Business.

Aon’s reinsurance arm posted revenues of $1.43bn while a combined Guy Carp-JLT Re will have marginally higher revenues of $1.47bn based on 2017 reported numbers.

While there will inevitably be some fall-out from such a significant M&A, the gap will be the largest between the two firms for over thirty years when they both led a major consolidation drive in the 1990s (see table).

It is also the largest ever acquisition undertaken among (re)insurance intermediaries trumping the $2bn Marsh paid to acquire another UK broking heavyweight, Sedgewick, in 1998 and the $2.1bn that Willis paid in 2008 for US retailer Hilb, Rogal & Hobbs.

Marsh’s focus on building out its US mid-market business in recent years has seen the group regain its number one position after a few years of revenue pre-eminence by Aon followings its 2008 £844mn acquisition of reinsurance intermediary Benfield and also the particular privations endured by MMC at the hands of the near-obsessed former NY attorney-general Eliot Spitzer in 2004-05.

Below is a history of major broking M&A between US and UK broking firms. The big, once again, are set to get bigger.

PEO Super Bowl 2018 – NAPEO

The industry Super Bowl has started in Phoenix, NAPEO 2018!

Right off an awesome WCI 360 in Orlando wci360.com, where the PEO industry was once again given a full day of programming in the largest insurance industry conference countrywide, Phoenix Is now the destination for all things PEO’s from today until Friday.  I am sure Mr. Cleary and team have their game faces on and will throw an awesome event as always.  Beautiful facility to start for sure.

Personally, I am celebrating my 18’th NAPEO and look forward to seeing all of my old friends that also have dedicated their respective careers to PEO.  Can’t wait to rock it out again with you, starting for some of us at the NAPEO Political Action Committee dinner this evening.

The 2018 Workers’ Compensation Institute 360

#wci360

The 2018 WCI 360 is up and running in Orlando!  Every year Co-Chairmen Mr. Rissman and Mr. McConnaughhay bring this annual event to another level.  The educational programming, entertainment and ability to catch up with a multitude of people all in one place make this a can’t miss event.

The Workers’ Compensation Institute (WCI) is a nonprofit educational organization that serves as a comprehensive resource to all workers’ compensation stakeholders. The WCI is an outgrowth of the long-established Florida Workers’ Compensation Institute. FWCI remains in existence under the WCI umbrella and continues its Florida focus, while the national organization provides a broader outreach across all states.

I am honored to be able to moderate a session during the Florida Association of Insurance Agents (“FAIA”) this coming Tuesday the 21’st.

Integrating Professional Employer Organizations (PEO) And The Independent Agency System

Tuesday, August 21’st, 2018
10:15 – 11:15 am

Crystal Ballroom J1
Convention Level

Integrating Professional Employer Organizations (PEO) and The Independent Agency System

Our panel is comprised of friends and  industry stalwarts Phil Urso (CoAdvantage), Robert Rodriguez (Engage), Troy Reynolds (Stonehenge) and Andy Olwert (NextLevel).

The scope of our programming is as follows:

Historically, licensed insurance agents and Professional Employer Organizations have had some success in developing partnerships together and there have been more than a few PEO’s born out of the independent agency model. The agency brings the PEO insurance sophistication and deal flow and the PEO brings the independent agency value-added services such as payroll, human resources and regulatory compliance. It seems like the perfect integration of professional services, potentially in a one-stop arrangement in an integrated manner. There have also been misunderstandings and mistrust of the PEO model. Our panelists will explore the following subjects in detail to include but not limited to:

– Historic issues with the distribution relationship between independent agents and PEOs
– Changes in the national regulatory landscape for PEOs and independent agents when transacting co-employment
– Current definition of a PEO and value propositions
– Health insurance as a PEO driver and its impact on PEOs
– What does the future bring for PEOs and how do independent agents fit in?

Hope to see you at the convention!

Is Your Co-Employed Policy Being Evidenced Properly on your Acord 25 Certificate of Liability Insurance (COI)?

PEO COI 101

A Professional Employer Organization (PEO) can secure workers’ compensation coverage for their client companies a number of different ways.  The structure and naming conventions used on each policy are often set by the state in which coverage is afforded.  The NCCI classes these policy types with an Policy Type Code of 1-8.  The attributes of each policy type dictates how coverage for that policy should be evidenced on an Acord 25 Certificate of Liability Insurance (COI).  Not surprisingly, however, many agencies servicing PEO clients, who have limited knowledge of the complex and varying PEO policy structures used to properly insure co-employed employees, often evidence coverage improperly on COIs.

Below is a brief tutorial outlining the 5 most common PEO policy types to help you make sure your COIs are being generated properly.

Common PEO Policy Types:

  1. Master Policy
    1. 1st Named insured is PEO
    2. Policy includes the applicable blanket Alternate Employer Endorsement(s) as required by each state, extending coverage to the client companies of the PEO
    3. Co-employment exists
    4. NCCI Policy Type 8
  2. Multiple Coordinated Policy (MCP)
    1. Naming convention is established by the State(s) where coverage is provided and typically includes both the PEO and Client Company as the 1st named insured
      1. i.e. “PEO Name L/C/F Client Name”
      2. i.e. “PEO Name for workers leased to Client Name”
    2. No alternate employer endorsement is needed as both the PEO and the Client are named as insureds on the policy
    3. Co-employment exists
    4. NCCI Policy Type 4
  3. Client Direct Purchase
    1. 1st Named insured is the Client Company
    2. Policy includes an alternate employer endorsement naming the PEO
    3. Co-employment exists; coverage is also extended to non-leased employees
    4. NCCI Policy Type Code 7
  4. Mini-Master Policy
    1. 1st Named insured is PEO
    2. Policy includes an alternate employer endorsement naming only one client company and its affiliated entities
    3. Co-employment exists
    4. NCCI Policy Type Code 5
  5. Alternate Services Offering (ASO)
    1. 1st Named insured is the Client Company
    2. Policy does not include an alternate employer endorsement and the PEO is not named on the policy
    3. NO co-employment exists
    4. NCCI Policy Type Code 1

 

Proper COI Structure by PEO Policy Type:

Policy Type Insured Section of COI Description of Operations (DOO) section of COI Notes
Master Name of PEO as listed on the Policy Dec Page Client Company being evidenced and effective date when coverage was extended to that Client Company is stated here DOO should include a disclaimer stating coverage is extended to leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
MCP Name of PEO and Client Company as listed on the Policy Dec Page Client Company being evidenced and effective date when coverage was extended to that Client Company is stated here DOO should include a disclaimer stating coverage is extended to leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
Client Direct Name of Client Company as listed on the Policy Dec Page PEO is listed as alternate employer DOO should include a disclaimer stating coverage is extended to leased and non-leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
Mini-Master Name of PEO as listed on the Policy Dec Page Client Company being evidenced and effective date when coverage was extended to that Client Company is stated here DOO should include a disclaimer stating coverage is extended to leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
ASO Name of Client Company as listed on the Policy Dec Page Nothing specific to co-employment is needed Nothing specific to co-employment is needed

Speak to an experienced PEO agent to learn more.

 

Buffett Not Eager for Berkshire to Be Cyber Insurance Leader

https://www.insurancejournal.com/news/national/2018/05/07/488425.htm

Some intriguing comments from Warren Buffet on the State of cyber insurance.  My favorite (which I agree with), “I don’t think we or anybody else really knows what they’re doing when writing cyber” insurance, Buffett said Saturday at his firm’s annual meeting in Omaha, Nebraska. “We don’t want to be a pioneer on this.”

From both sides off the table (agent and underwriter) there is still much more to learn in this burgeoning insurance product line which has increased premiums written 35% in the last two years.

Buffett Not Eager for Berkshire to Be Cyber Insurance Leader

By and | May 7, 2018

 

Warren Buffett said he doesn’t want Berkshire Hathaway Inc. being a leader on cyber insurance because neither he nor others in the industry really know the risk.

“I don’t think we or anybody else really knows what they’re doing when writing cyber” insurance, Buffett said Saturday at his firm’s annual meeting in Omaha, Nebraska. “We don’t want to be a pioneer on this.”

Buffett said that cyber risk is part of his estimate that every year carries about a 2 percent chance of a super catastrophe that would cause $400 billion or more of insured losses. While that kind of disaster will wipe out many companies, Berkshire will aim to keep its exposure low enough to remain profitable in such a year, the 87-year-old chairman said.

Buffett said he’s fine with writing some cyber policies to remain competitive, but doesn’t want to be among the top three in the industry. Anyone who claims to know the base case or worst case for losses is “kidding themselves,” he said.

[Property/casualty insurers wrote $1.35 billion in direct written premium for cyber insurance in 2016, a 35 percent jump from 2015, according to reports by Fitch Ratings and A.M. Best.

According to the reports, the largest cyber insurance writers are American International Group, XL Group and Chubb. These companies had a combined market share of approximately 40 percent at year-end 2016. The top 15 writers of cyber held approximately 83 percent of the market in 2016.

Completing the top 10 writers of cyber ranked by direct premium written are: Travelers, Beazley, CNA, Liberty Mutual, BCS Insurance (owned by Blue Cross licensees), AXIS Insurance Group and Allied World.]