Finance Monthlyhad the pleasure to speak with Tracy Alan Saxe, President and CEO of Saxe Doernberger and Vita P.C. (SDV) - an insurance coverage practice firm that represents policyholders in insurance coverage matters. With offices in Connecticut, Florida and California, the firm advocates across the nation to resolve disputes with insurers on all lines of coverage, including general and professional liability, commercial property, business interruption, directors and officers, and pollution coverage. Below, Tracy tells us more about it.
Your career began as a general litigator – can you tell us about that experience? What drew you to the insurance field?
I began my career at a small general practice firm of less than 20 lawyers, in Stamford, Connecticut. There, I tried many cases of all types – both civil and criminal. Beginning in the 1980’s, I worked in insurance coverage doing asbestos insurance coverage work. I began working in this area after a friend of mine from law school who was in-house counsel at Combustion Engineering (later owned by ABB) asked me if I was interested in doing insurance coverage work. At that time, they worked on a lot of asbestos claims and insurance coverage disputes. Initially, I thought that it sounded boring, but once I began doing insurance coverage work, I realised that I loved the intellectual challenge that came with it and started turning away other types of work. By the 1990s, I was doing insurance coverage work to the exclusion of all else. I found insurance coverage to be the most interesting and exciting type of work that I’ve had the chance to do – the exact opposite of what I thought it would be!
It’s been three decades since that day and I haven’t looked back! I find it very exciting to work in this field, on behalf of policyholders. I take great pride in the fact that we level the playing field for policyholders who are up against insurance companies whose sole focus is to use their vast resources to find the areas of a policy that reduce coverage. It’s much more rewarding to be fighting for David than Goliath.
By 1994, I was Co-counsel on a major coverage matter with Anderson Kill and after a couple of years, they asked me to open their Connecticut office for them - something that I happily did. After about three years, it became clear to me that there was a better way to service our clients. This area of law benefits from an efficient, creative and nimble organisation that a large firm typically does not provide. In 1996, We changed the name of the firm, but everything else stayed the same. We started with three lawyers, and today we have 28 lawyers in three offices nationwide.
Over the years, we’ve seen considerable organic growth and we continue to expand. The other very exciting thing about doing insurance coverage work is dealing with liability policies. A liability policy is when Person A is bringing a suit against Person B and Person B is then seeking insurance coverage for that suit. These are called third-party liability policies that are supposed to provide for the expense of Person B’s defense fees and to pay for any settlement or judgment against them. In those matters, we get a bird’s-eye view of the strategic decisions about what goes on in the suit against Person B, which is defended by a different set of lawyers. Our goal is to get the insurer to pay the lawyers’ fees, as well as our client’s settlement. This dynamic gives us the opportunity to work with lawyers all over the country who are very good at their specific field, but don’t do insurance coverage work, adding to our strategic ability.
How can potential insurance disputes be minimized in relation to coverage, so that litigation can be avoided?
There are many ways to do this. Thoughtful strategies on the purchasing side of insurance are important. When it comes to commercial property coverage, we make sure we’ve figured out what the client’s business interruption valuations are. In other words, what type of losses they are likely to sustain because of a business interruption of any sort, making sure they get proper coverage for that. Then, our lawyers look at the actual policy language, with the claim scenario in mind, to make sure that the endorsements give the client the coverage that they expect. In addition, we review your contractual relationships with vendors, customers, sub-contractors, sub-consultants, landlords, tenants, or any variety of contractual relationships, to make sure they have properly specified the insurance coverage that is required of them and to what extent they are required to be an additional insured, to what extent they expect indemnification and the opposite. This is to say to what extent they are providing additional insured coverage to other parties and to what extent they indemnify them, making sure that any indemnity they give or get is actually covered by the respective insurance policy.
On the other side of a litigation avoidance is for our lawyers to come in before bringing any sort of suit against an insurance company, making a thorough examination of where the coverage is and making a thorough rebuttal of denial letters. We work with our clients’ insurance broker to approach the resolution of the matter, in a business-like environment rather than a litigation setting. We try to help them understand the facts, laws and policies that apply and present this in a cohesive fashion so they can put their best foot forward.
What strategies do you employ to successfully defend against a coverage issue?
The most important thing is a detailed understanding of all the key issues and the policy, what laws might apply in which state and where the suit might be brought. Most of the cases that we work on are very large and the way we look at each case is very strategic. When compared to typical litigation, our work is more like three- or four-dimensional chess. For instance, it is very common that the insurance policy we are fighting with the insurance company about has ‘no choice of venue’ or ‘choice of law’ provisions. Our clients are almost uniformly national or global entities which means that the lawsuit can take place anywhere in the country or in other parts of the world as well. The law that’s going to apply could be determined differently in each jurisdiction where the suit might be brought, thus, what we often end up doing is looking at anywhere from four to seven issues that might decide the outcome of the case, before we even decide whether a suit should be brought. We look at each issue under the various different laws that might apply in the specific jurisdiction and then make a strategic determination of where a suit should be brought - if it needs to be brought.
We also need to be fully prepared with the facts that support our position.
At SDV, we find that the quickest settlements come when we are fully prepared to aggressively litigate a case. If not handled aggressively or if you don’t have a comprehensive strategy to start with, cases tend to drag on and become very, very expensive. This is where SDV’s experience as trial attorneys adds great value to our clients. In this area of law, it is critical for clients to have a firm that has experienced general litigators who have tried cases to verdict representing them from Day One. Many cases in this area of law are multi-dimensional, and they can move through a number of stages in litigation. A client needs to know that the firm representing them has attorneys that can build a successful case with trial in mind.
How is mediation used to resolve disputes within the sector?
We find that many cases are helped by mediation and if it’s used at the right time, an early resolution is possible. That’s because many firms do not appreciate that the mediation process is not always a zero-sum game. If used strategically and timed correctly, mediation can help both sides understand their cases first, which in turn, helps both sides begin to see the opportunities where resolution is possible. Mediation is very common in the sector - probably almost every case that we work on involves mediation. Some cases could even require more than one mediation (with a third-party mediator) or a court- side mediation conducted by a magistrate or a judge. It has also become a common practice for us to go through these dispute resolution processes without any suit pending. We often have face-to-face negotiations and include mediation as part of this process.
It is critical for clients to have a firm that utilises this alternative dispute resolution process in a strategic and effective way. Once again, it is helpful to our clients that our partners came to this area of law with decades of experience resolving civil cases through mediation.
What motivates you about working within the field? What are your goals for the future?
I find it very exciting to work in this field, on behalf of policyholders. Typically, my corporate clients are busy working on other things and insurance is not their day-in/day-out business, and neither is litigation. Insurance companies on the other hand are solely focused on insurance, so they are naturally better prepared for this battle than the policyholders. I take great pride in the fact that we level the playing field by coming in with the type of expertise that matches or exceeds the insurance companies’ own expertise on insurance coverage disputes.
Our goals for the future is to continue to build our high-quality clientele and reputation for doing high-level, complex insurance coverage work on behalf of policyholders.
Contact
Saxe Doernberger & Vita, P.C.
Website: http://www.sdvlaw.com/
Email: coverage@sdvlaw.com
Phone: 203-287-2100
This month, Finance Monthly caught up with Aubrey Mills – a mother, Ms. California Woman of Achievement 2018 and a Business Development Leader at World Financial Group. Below, Aubrey tells us about her passion for educating families, individuals and businesses in ways to make money, save money, and stay out of debt.
What does your daily work consist of and what do you believe you bring to your clients?
Most of my time is spent building relationships with clients and associates. I don’t want to just hire people and have them work for me; I want them to build careers and lives they are proud of. I want to get to know my clients so that I can best guide them on financial decisions. Learning how people work or what makes us think differently was important, not just so I could be a better saleswoman, but so I could better serve my clients. I studied Human Nature and Communication, so I could better understand people. I’m currently learning to better understand other cultures because I believe that everyone deserves the opportunity to be educated financially. I teach free classes to the community and I want to be as effective as possible.
What attracted you to the insurance field and what drives you to push further the boundaries of your work?
I never wanted to work in finance. I came from a low-middle income family and had always assumed that finance people were older men. I once heard a woman speak about finances and I remember two things about what she said: she was raised by a single mom (I’m a single mom) and how hard it was for her growing up that way, and the Rule of 72. It was one of those awakening moments. I didn’t want my children to feel deprived growing up. The Rule of 72, or compound interest, showed me how little I needed to save for retirement and my children’s college fund and how fast my debt was doubling. I have had friends whose spouses didn’t have life insurance and they suddenly passed away. I couldn’t stand to just sit by and continue to watch that happen. Money doesn’t bring a spouse back, but it allows the family to properly grieve.
You commonly work with military families; what challenges are presented for these clients, particularly in the insurance sphere, and how do you help them overcome these?
My biggest obstacle is conveying to them that the insurance they have will not necessarily remain the same when they exit the military. Most of our service members are young and they get a basic ‘money talk’ when they enter, but this is not sufficient. I believe strongly in doing whatever we can for our service members, not just to equip them for keeping us safe and free, but to have a rich and full life after they leave the military. I don’t feel like we are doing enough - not even close. Many of our service members join right out of high school and they now have an income they didn’t have before, so of course they want to spend it. I know when I was aged 18-20, all I did was work, so I can then shop. But this wouldn’t have been the case if I had known what I know now, 13 years later.
Education and getting young people to see the value in saving are two of the most important things I can provide them with.
What have been some of the most difficult issues you have dealt with alongside clients?
Anytime I have an older client with multiple investments, it gets tricky. They have a fear of losing money and a fear of change. Even if they aren’t in guaranteed accounts, they have a hard time switching. That’s where the friendship and rapport that was built comes in. You really must know who they are and how they communicate. You want to build trust, so you can have those hard conversations.
As a thought leader in this field, what would you say must change to ensure a fair and just future for your clients when it comes to insurance?
First of all - be you. Whatever that means. People like you need help from you. When I first started in the industry, I thought I had to fit a mold. It wasn’t until I allowed myself to be unapologetically me that things changed. I love to laugh. I use humour to ease tension and those hard conversations. I’m a bit goofy and I’ve learned that it makes it easier to help others learn as opposed to being uptight and rigid. So just be you.
Secondly - integrity, 100% of the time. I see people come into the industry and they get so blinded by the amount of income you can make, and they chase it. The business that pays is the business that stays. You can’t keep clients and agents if you don’t have integrity and heart.
Website: http://www.worldfinancialgroup.com
The long-awaited General Data Protection Regulation (GDPR) becomes legislation in a week, on 25 May 2018. Below Narrinder Taggar, Partner and defendant personal injury insurance litigation specialist at Shakespeare Martineau, sheds light on the extended implications of the regulation on the insurance sector.
With GDPR coming into play, organisations across a wide variety of sectors and industries, including insurance companies, will be forced to adjust and assess their data protection strategies or face fines of up to €20 million or 4% of annual turnover, whichever is greater.
The GDPR contains rules protecting individuals when their personal data is processed. This also includes further rights around how this personal data is handled and shared with other parties.
The sensitive nature of personal information used in many insurance claims could cause a serious headache for the industry and is set to cause significant disruption to how all parties involved in the insurance claims process store, manage and process personal data. The risk created when information is shared between claimants/their advisors, brokers; insurers and other parties, such as medical professionals, all of which would be classed as “data controllers”, is great.
A data controller determines the purposes, conditions and means of the processing of personal data. The data processor is the entity that processes data on behalf of the data controller.
But what about accident investigators, who are instructed to process data on behalf of the data controller? They may well be data controllers for the purposes of obtaining and drafting witness statements which would be subject to legal professional privilege until such time the statements are disclosed to any third parties. Of course, it should be noted that a claimant does not have a right to access any data which is subject to legal professional privilege.
With the GDPR placing a greater emphasis on transparency and accountability, the insurance industry will have to be even more careful with the storage of sensitive data. With personal data being intrinsically linked to the claims process and regularly being shared with third parties, the need to be prepared is particularly urgent and parties must rethink exactly how this information is shared during the process.
Hard copy documents such as instructions to barristers may have previously been sent in the post. However, under the new GDPR it remains to be seen whether this way of sharing sensitive documents will still be deemed to be a compliant activity. Instead, encrypting files containing sensitive personal data is set to become the norm.
Under the GDPR all data controllers will be responsible to ensure not only that the receiver, or processor, is GDPR-compliant, but also to find how they intend to store and use data and delete the data once it is no longer required. This can be achieved through the arrangement of a data sharing agreement. This might include a description of the data processing, an assessment of any possible risks and how those risks will be mitigated. Because of the need to ensure compliance throughout all stages of the process, those involved in insurance claims, for example insurers and their solicitors, should set up data sharing agreements with their contacts and suppliers; including other data controllers.
However, duty of compliance also continues after the claims have been settled. The 'right to be forgotten' places a responsibility on the controller to delete any personal data if requested by the subject and not to keep data any longer ‘than is necessary for the purposes for which the personal data is processed’. Yet, there are a number of grounds in which data controllers may keep personal data, including if it needs to be retained in case of any further legal proceedings for example appeals. Therefore, organisations may need to set their own retention periods for data depending on the information in question and how it may be used in future. It is worth remembering in this case that any data deemed relevant must be recorded and held securely offline.
Under the new requirements, data controllers will be obliged to report breaches to the relevant authority within the first 72 hours. Should a breach occur under the new legislation, the fault will lie not only with the data controller but could also lie with the data processor who shared the information, making it vital for all parties to be accountable for the information they process.
The GDPR has undoubtedly changed the goal posts for the insurance industry and many questions still remain around the identification of sensitive information and how the usual correspondence between parties will be affected after the new legislation is introduced. With such large penalties coming into play, the worry of doing something wrong has never been greater.
The industry currently awaits further guidance from the UK Information Commissioner on what the legislation will really mean in practice. However, with the deadline fast approaching, doing nothing is no longer an option. The industry must prioritise collaboration and transparency, in order to ensure they are fully prepared for the changes ahead.
London Market insurers must be quick to react to technology developments – such as automation and increased cyber security risk – if they are to successfully navigate the future claims landscape, according to BLM and the Institute of Directors (IoD).
The assertion is amongst others released in volume two of BLM’s Macroeconomic Trends Series, a suite of research papers created with economists at the IoD. The papers look at macroeconomic forces and how they will shape the insurance claims landscape in the London Market. The second paper looks at technology risks through the lens of product liability, motor, employers’ liability and technology-specific claims.
Tim Smith, partner at BLM who co-led the writing and insights within this paper said: “We have a thriving technology sector in the UK, but given changes ahead we foresee significant knock-on effects on a number of traditional markets. The pace of technology advancement can leave entire industries playing catch-up, which is why it’s so important for the insurance market to understand the impact these will have and adapt accordingly.”
Jim Sherwood, partner at BLM and co-leader of the paper said: “From our work across the London Market with insurers, brokers and managing general agents, we know the importance of understanding how emerging risks will impact the volume and nature of claims. We hope this paper will provide the market with a better understanding of what’s on the horizon and how technology will continue to affect all aspects of insurance.”
The paper also argues that employers’ liability (EL) insurers must react to the growing use of automation and increased self-employment.
Malcolm Keen, associate at BLM said: “Whilst disputes continue as to the definition of an ‘employee’, changes in the nature of employment are affecting the pool of those who can potentially be compensated for an injury or illness by an EL insurer.
“We’ve seen significant rises in self-employment in the UK, with a million more workers since 2008 opting to ‘be their own boss’, and technology is playing a key role in enabling this. On top of that. the increased use of automation will likely to affect the profile of the UK labour market in the short, medium and long-term.
“Coupled together, we expect this may shrink the extent to which the financial burden of injuries or illness caused by work is borne by insurers.”
The Macroeconomic Trends Series will continue to cover other other key claims categories for the London Market in the coming months. This is the second series of papers from BLM and the IoD, with these volumes building on the trends and reflections last identified in 2016.
(Source: BLM)
As part of this month’s Professional Excellence feature, Finance Monthly speaks with Michael Kasula - the owner and Founder of Brokerage Agency Producer Resources. Based in the Chicagoland area, the company is a tightknit community that aims to find like-minded partners, grow businesses, and build lasting relationships. Producer Resources’ mission is to become a valuable partner for the advisers they serve, saving them time and money with the design and implementation of life insurance planning. Here Michael tells us about setting up Producer Resources, their identity and mission and his new company Clarus Hall.
How did you decide to start your own company?
Very early on in my career, I knew I wanted to start my own organisation and be a trusted resource for agents in the life insurance space. In 2013, I was already having success being that resource, but I was working for someone else. That company was going through an acquisition and I knew that changes were coming. That same year, I had a client meeting at a coffee shop in the north suburbs of Chicago. During my presentation to him, he interrupted me and asked, “Why don’t you start your own company?” I had already been forming Producer Resources in my head, but a question like that - from one of my best clients - got me even more excited. I knew there was never going to be a better time, so this is how I decided to found Producer Resources in 2013.
What was the process of setting up Producer Resources like? How did you attract your first customers?
When I was first looking at who I wanted to attract and retain with Producer Resources, it was pretty simple - life insurance advisers who wanted to grow their business without having to grow their overhead. We are an extension of an adviser’s business - that is the message I started with and a big reason why Producer Resources has been so successful. Whether you need case design, advanced sales, or underwriting assistance, we are an experienced and professional team aiming to help our partner firms. I am a value person and I look for opportunities everywhere. If someone has an idea or a referral, I look at how I can use that for the benefit of my clients and my business. That’s what Producer Resources is all about.
In what ways have the company’s services evolved over time?
Producer Resources is a full-service extension of an adviser. From case design to policy issue, we have what an independent life insurance adviser is looking for. This couldn’t happen without our amazing and passionate team. Through a few changes on the sales side of the company, I think we have found our identity - an elite unit working together rather than independently as satellites. This has kept everyone invested in and accountable for the same goals and allows me to manage our company’s growth and be tactical about it.
Equally important, in an industry plagued by a lack of technology, we’re constantly giving our advisers the most up-to-date software out there. We’ve added different tools to help an adviser be their best with their clients: in-force policy management tools, interactive product presentations, co-branded marketing material and presentations, etc.
What are the challenges that US insurance companies have been facing over the past year?
I’m not an actuary, but knowing the way they invest their large general accounts, I would have to say interest rates have been the most challenging hurdle insurance companies have faced in recent years. When they receive premium payments, these monies are locked up for long durations. With interest rates this low, it is difficult to keep pricing competitive. Some companies have put premium or death benefit restrictions on products and some have just stopped sales of certain products altogether.
In the political arena, we’re seeing hotly debated regulations from the Department of Labour. Insurance companies have a lot of housekeeping to do to make sure they are compliant with any guidelines that have or will be enacted. There is also that grey area of fixed annuities and life insurance and what will and won’t be part of the eventual DOL decision. As far as public perception, some carriers have faced increased scrutiny in the last year due to increased COIs, reduced dividend/crediting rates, or just a general lack of customer service. In a constantly evolving market, I think carriers need to learn how to streamline their process; from application submission to ordering there in force illustrations, things need to be made more efficiently. In some ways, insurance companies need to get with the times and I think the DOL is attempting to address that, at least on the transparency side, with regulations. We’ll see how that goes. Regardless of that, improving transparency and technology for the benefit of their customers will serve the industry well, and their customers will be better because of it.
What differentiates Producer Resources from its competitors in Illinois?
I think the biggest differentiator is that Producer Resources is in high-growth mode, and we are passionate about what we do. We have a young and motivated team, with a mission to change the industry. I realise that can sound a bit presumptuous, but we have a vision, we work hard, and we’re getting closer to our goal every day. I want advisers to know that when they partner with us, their life insurance business gets done as efficiently and successfully as possible.
At our core, we are a team of highly skilled life insurance professionals that offer expertise in sales, advanced design, case management, and underwriting. We also have several strategic partnerships in the life insurance industry and closely related industries that we frequently use for the benefit of our advisers. To give you an idea of our capabilities—one of our best producing advisers runs his company as the only member, keeping his overhead low and focusing on networking and building his client base. He utilizes us for everything else. Together, we recently put in force a large estate planning case that we’ve been working on for the better part of a year. He told us that partnering with us was the best decision he’s made in his entire career.
What does 2018 hold for you and your company?
One of the key exciting things happening to us is the new company we are rolling out - Clarus Hall. “Clarus” is Latin for clear, bright, and shining. We combined the word with “Hall” because we want our members to think of our group not as a static place, but somewhere they can move forward with bright, like-minded people. With Clarus Hall, we are creating an organisation where life insurance professionals can get the support, comradery and growth opportunity they are looking for in a long-term partner. This group is going to eventually consist of 100-150 life insurance advisers that want to be part of something that allows them to grow while maintaining their independence. They will have additional resources with our firm and will have bonus and profit sharing opportunities to make their compensation very competitive and allow them to grow with our group.
What more can you tell us about Clarus Hall? What are your goals with this organisation?
We want to create a place for the advanced life insurance adviser to partner with a firm of significance to give them the support they need to grow their business. When we attract enough life insurance professionals to partner with Clarus Hall, we can create something much larger than any of these firms can do by themselves. Giving us depth, we will be heard by others. I want to make this firm’s initiative also marketing to the public on the importance of life insurance, attracting key advisers such as CPAs, attorneys, investment managers, property and casualty agents - anyone in the business that is looking for a group of vetted life insurance professionals to help their client with any type of estate or business planning need.
Michael Hosford is the Founder & CEO of Synergy and its two branches - SynergyPRO & SynergyPhD. Founded in 2001, Synergy Insurance and Investment Advisery Services helps clients build and manage their wealth. SynergyPRO is the company’s branch that serves the MLB, NFL, NBA and entertainers that Michael and his company have been fortunate enough to represent.
In June 2017, with the help of Co-founders Kurt Marozas and Alex Pina, Michael launched and franchised SynergyPhD to serve pension professionals nationally. This branch is helping people who are educators, fire fighters, and police officers properly select their pension options at retirement.
Here Michael speaks to Finance Monthly about the start of his career, the motivation that drives him and his goals for the future.
Your upbringing was slightly unusual, however you founded your own company during your senior year at Southwest Texas State
University. How did you manage to achieve this and what was the motivation that was driving you?
I think when you grow up without a father and your mother moves out of state when you are 14 years old, this leaves you with two choices. You can either fold or fight back at your chance for a successful life and take advantage of the American Dream. I chose to fight back!
Early on, I learned a few things about myself – that I did not like feeling embarrassed, or not having nice clothes and having to stand in the free lunch line at school. I wanted more and I knew understanding money would be a good start. I put myself through college by working for four years at Wal-Mart, and then launched Synergy, an independent financial advisory firm, during my senior year at Southwest Texas State University.
I graduated with a BBA in Finance in 2001. In 2002, I was asked to address the advisers at a large financial services firm at their Leaders’ Conference in Hawaii. In 2002, I was also named to American General Life’s prestigious Legion of Honor.
I have spoken all over the nation to clients and advisers and I have qualified for the Million Dollar Round Table (MDRT), Court of the Table, and Top of the Table on numerous occasions. In addition to helping hundreds of teachers understand and improve their pension plans, I have helped many HNW individuals including NFL and MLB professional athletes, properly structure their wealth distribution plans. I believe that my success comes from treating each client the way I would personally like to be treated and giving them the care and attention they deserve.
What attracted you to the financial advisory field?
The ability to help people properly plan their future, protect what they have and take care of their families should death, disability or the need for long-term care arise.
What is Synergy’s philosophy?
Our philosophy is protection with steady growth and a complete understanding of the situation, despite what your retirement plan will look like when considering pensions, social security, other assets and net of taxes. I think the reason people are not good at retirement is simple – ‘they have no experience at it and they have never done it before’. To me, it’s important that a future retiree knows where they stand and gets properly educated on insurance and certain annuity products that can provide stabilization and growth when they need the money most. Our philosophy can be described as ‘choose not to lose’.
What would you say are the specific challenges of assisting clients with insurance?
I think one of the challenges is the name ‘insurance’ itself and what some people think about it. If I am on a plane and want to take a nap, I just tell the person next to me: “I sell insurance”, and they won’t say a word to me!
In all seriousness, the ‘fee only’ adviser, and certain talk show hosts, have denounced insurance because they simply do not or do not want to understand the leverage, strength and value these products provide. I jokingly say: ’None of my clients wanted those products prior to being educated, but once needed - they love them’.
What strategies do you implement to minimize financial burdens in regards to insurance packages?
Our strategy is education - help people understand that life is not based on a 20-year or 100-year ‘average rate of return chart’. Life happens daily and there will be both good and bad news. Both scenarios require the need for money. Don’t tie it all up until you’re 59 or when you lose your job. Be in a position to utilize your assets.
Your firm also provides investment advisory services – how are most financial investments structured in Texas?
The investment advisory service allows me to utilize fee-based accounts or charge a fee, should a client simply want an outside option. This allows us to buy low after any market corrections. Given that I am licensed in several other states, I would imagine that Texas is similar to other states and we use the wide range of products available to us.
How do you assess levels of risks for investment strategies? How can you accurately assess the level of risk that an individual is prepared to accept?
We have a unique way of planning. We utilize products that have built-in guarantees to provide a steady and somewhat, predictable income distribution plan. Clients either accept or reject this offer. With markets at all-time record highs, I am concerned that people who say they are ‘risky’ could lose and lose badly, while needing the money they’ve invested. I do not want to be a part of that - I have not forgotten 2001 and 2008.
In what ways has your company changed in recent years?
In recent years, Synergy has downsized some of the adviser affiliations and we are moving forward with a more focused group. We will focus on the franchise model of bringing people in with a high desire to be an entrepreneur, people that have the income or savings to transition into becoming a franchisee and are excited about the opportunity. We’d like to work with professionals that have a high desire to help people, individuals that have won at life previously and want to help SynergyPhD grow into the #1 recognized firm for helping pension employees properly choose their pension options at retirement.
What excites you about the future?
At age 38, married, and the father of four children, I am excited about the future. With 17 years of experience, I feel as excited about this industry as I did at age 21. I am prepared to have 100 franchisee store fronts across the nation within 10 years.
Contact details:
Email: michaelh@synergytx.com
Website: https://www.synergytx.com/
Twitter: @SynergyPro7
Below Mark Boulton, Insurance Sector Lead at Fujitsu UK&I, delves into the introduction of automation and AI in the insurance sphere, touching on the future prospects of the insurance sector throughout 2018.
Insurance has always been a grudge purchase, often seen as a necessity or safety net, but not something that immediate benefit is felt from.
It will have been frustrating for many, therefore, to see that car insurance premiums have risen by 11% on average in the last year alone, according to the Association of British Insurers (ABI).
Many of us may even start to question the value we’re getting for our insurance purchases in light of such news.
The price – which is the most important factor in choosing an insurance package (A New Pace of Change, Fujitsu) – is just one element, however. Compounding this situation is the fact that people often find insurers difficult to deal with, particularly when trying to make a claim.
It’s this group of factors that demonstrate the opportunity the insurance industry has to transform itself into a more value-driven service for customers.
At the heart of any change will be technology, and two of the leading areas here are Artificial Intelligence (AI) and automation. How is technology impacting insurance for the better? There are three main areas to consider - customer experience, assessments and risk mitigation.
Personalisation
Think of going through a process for a life insurance policy. Multiple in-depth questions to taken into account age, lifestyle, and health, with an existing model applied to the answers provided.
Such models have been used for decades at some companies, resulting in off-the-shelf packages for people that do not necessarily reflect them as individuals.
Technology is helping change this. Based on any assessment and wider data analytics, automation can quickly produce more personalised experiences for the customer. This might be a payment model that suits their lifestyle or financial situation or a more nuanced insurance package to reflect their needs.
Such personalisation sit at the heart of the transformation. We’ve seen this across other industries, and it is one crucial way insurers can start to move from transactional-based relationships to value-based relationships with their customers.
Convenience and speed
It’s not just adding value of course, it’s getting the basics right. Services like Amazon Prime and Netflix have totally transformed the expectations we have of all companies when it comes to speed and convenience. We want things served to us exactly how we want them, and quickly.
Insurers have certainly made progress in recent years – for example, it is standard now for policies to be quoted and purchased online. More interestingly, however, is the use of apps and chatbots.
These give a holiday maker who may have lost their camera easy access to their policy, but also the chance to ask questions to the chatbot. Powered by AI, we can expect chatbots to play an increasingly important role in the relationship between insurers and policy holders.
Given the often complex nature of insurance policies, chatbots can be a simple way for people to get the answers they need. No need to phone customer services or wait an hour in a call queue; just direct answers delivered instantaneously.
Of course, there is still progress to be made with chatbots, but these will only get better in the years to come.
Apps and chatbots are also interesting because they both rely on and deliver vast amounts of data. The more these are used, the more they can be refined to give people services that suit them better. They fuel the personalised services.
Working together
It’s all very well talking about the benefits and transformative powers of technology, but making these a reality is something many organisations are grappling with.
Something I’ve observed in the financial services industry is the existence of distinct groups of employees. On the one hand, there are those innovation-focused, digital savvy experts who want agility, speed and flexibility. On the other hand, there are those who want to focus on the central facets of their areas products - keeping those long-standing traditions working in good order for the customer.
These two groups are naturally at odds. They often speak in different terms, work in different ways, and approach problems completely differently. Imagine the kinds of conversations that might come up with discussing emerging trends like AI and automation. It’s not easy for them to get to the place they need to.
To be able to respond to the concerns being voiced by consumers, and to harness the business agility needed to respond to market trends, insurance businesses from the c-suite down need to make a culture shift. Driving change from the top is the only way to future proof the business in a digital world that has already changed the state of play for good. We simply cannot afford to rely on the same rules.
Find your digital path now
Our ‘Fit for Digital’ survey found 98% of insurers believed their organisation had been affected by digital. A further 72% said their sector would fundamentally change in the next four years.
Change is inevitable. And the technology that will enable that change - including AI and automation – is here today. Insurers must find the cultural harmony to embrace new digital services and products, without losing the heart of what they already do well.
The next few years will see some insurers thrive and others struggle. To be a thriver, it’s vital to the right digital path now.
Tenzing Advisors is a boutique firm that specializes in the design, analysis, implementation and administration of life insurance plans for affluent families and businesses. Ken Knox founded Tenzing Advisors a decade ago, after working in life insurance brokerage for 16 years. Headquartered in Needham Massachusetts, the company works with both US-based and international clients.
Ken got his start in the life insurance industry in New York City in 1992, as an agent with Connecticut Mutual, which was acquired by Mass Mutual in 1996. He spent the next ten years at two leading independent life insurance brokerage firms in New York and Boston, and has worked with some of the most innovative people in the life insurance industry. Ken and his firm serve as resources to some of the top legal, tax and financial advisors in the US in all life insurance-related matters. Here Ken tells us more about establishing the company, its relationship with M Financial Group and the impact of technological advances on insurance.
What’s the history behind Tenzing Advisors? What are the factors that led you to setting up the company?
I had worked with some of the top people in the industry in each of my prior three stops in New York and Boston. After the Boston firm was acquired by a public company, I decided to start my own firm. Both of my prior firms had been M Member Firms, giving me the opportunity to learn from other top industry professionals in my office and around the country. I was also fortunate to have experience in all aspects of my business; in fact, I had developed comprehensive processes and procedures for staff members to follow. I was determined to combine industry best practices with thorough, objective advice and excellent service. Starting my own firm allowed me have a longer-term focus and the flexibility to base more decisions on building and supporting advisor and client relationships.
Tenzing Advisors takes its inspiration from Tenzing Norgay, the Sherpa who guided Sir Edmund Hillary and his team on the first ascent of Mount Everest. We are also experienced guides who help people reach long-term goals with planning, teamwork and great execution.
Please tell us a little about Tenzing Advisors’ business focus.
Our business is primarily focused on evaluating and providing solutions for affluent and super-affluent individuals and families in estate planning situations. Our clients are often individuals who do not have traditional needs for life insurance, as their wealth allows them to self-insure against a potential loss of income for their families. They are typically represented by sophisticated tax, financial and wealth advisors, and many have family offices who are charged with the responsibility of managing their affairs. We provide objective analysis, showing how life insurance can be an effective tool in transferring wealth to the next generation.
Life insurance provides liquidity that can be used to pay taxes, avoiding the disadvantageous liquidation of other assets and additional tax burdens. Life insurance strategies can be quite straightforward and simple, but for families of significant means, they often require an integrated approach, utilizing and complimenting many other strategies, such as GRATs, QPRTs, charitable giving plans, discounted sales of interests in LLCs and partnerships, inter-family loans and third-party funding, to name just a handful. To be effective, we rely on our skills in communicating complex financial and tax concepts to highly analytical advisors and the end clients, who may not have the same level of financial sophistication, despite their wealth and success.
Many of our clients are business owners or senior executives of valuable businesses, so our work often involves business uses of life insurance. This includes succession planning, risk management, and executive compensation and retention. Insuring buy-sell agreements and key-person coverage are common uses of life and disability insurance.
Many of our engagements begin with a review of existing life insurance plans, and when this is the client’s sole objective, we are pleased to provide a report concluding that no changes are recommended. The client advisors who routinely engage us know that we’re not simply trying to sell life insurance to everyone we encounter. We frequently are able to recommend changes or enhancements to plans, so our credibility is enhanced each time we tell clients that they needn’t change course or buy something new.
Please explain your relationship with M Financial Group and why that is an important aspect of your business.
M Financial Group is a consortium of more than 150 independent life insurance and wealth management firms in the US and abroad that was founded nearly four decades ago. M Financial, which is based in Portland, Oregon, now has over 200 employees that provide support to Member Firms in the areas of client advocacy, industry and marketing intelligence, product innovation and design, underwriting support, and practice management and development.
While the resources and information sharing are vital to my firm’s growth and ability to stay at the leading edge of our industry, M’s proprietary products are perhaps the most visible and compelling point of differentiation. M Financial’s Partner Carriers, including Pacific Life, John Hancock, Prudential, TIAA, Symetra and Nationwide, offer insurance policies that are available only to M Member Firms and our clients. These products, developed jointly with M’s reinsurance company, are priced using our clients’ actuarial experience, resulting in lower costs and better features than most products that are available outside of M Financial. Because we are an independent firm, we also regularly sell non-proprietary policies from M carriers and non-M carriers in order to best meet our clients’ needs in every situation, but our membership brings us unmatched product choices and resources.
What would you say are the specific challenges of assisting clients with life insurance in estate planning and wealth management situations? What are the different challenges you face with your domestic clients vs. your international clients when it comes to estate planning?
Despite the proliferation of wealth managers and financial advisors, there is a profound lack of understanding of life insurance among consumers and financial advisors. A significant portion of US families do not own life insurance, or they are inadequately covered. Some of this can be blamed on the insurance industry itself, which has relied largely on an outmoded distribution system, as well as opaque and confusing products.
Among affluent and super-affluent consumers, this lack of understanding persists. It is often too easy for advisors to dismiss life insurance by telling their clients that they “don’t need it,” which is of course, true. However, those same clients probably don’t need ETF’s, hedge funds, laddered bond portfolios, GRATs, family LLCs, or a variety of other strategies, but their clients often use many of these financial and legal tools in helping them obtain objectives. I disabuse people of the notion that they can’t benefit by using life insurance simply because they don’t have an income replacement need. If a patriarch dies without life insurance or other effective estate planning strategies, resulting in a loss of 50% of the family’s assets, it’s easy to see how even a simple life insurance plan might have provided an effective solution.
Educating clients and advisors on the financial and tax benefits of utilizing life insurance in estate planning is not a challenge with a willing audience, but other challenges may affect any individual, including health issues. Not everyone is insurable, but many people are surprised to learn that we can obtain competitively priced policies for many people who have experienced serious health problems in the past. A high percentage of our clients are in their 60s, 70s and even 80s, so most of our clients have some health issues to be underwritten. Survivorship life insurance, which is issued on two lives, pays a death benefit at the death of the surviving insured (typically a spouse). In many cases, survivorship policies issued with one uninsurable spouse have significantly lower premiums than single life coverage on the healthy spouse.
Occasionally, we face challenges involving limitations or restrictions for foreign nationals who wish to purchase US life insurance products. Fortunately, M Financial has built a very effective resource in this area, assisting us in providing US domestic policies, international corporate benefits, Bermuda-based products and offshore private placement life insurance products when appropriate. It is easier than ever to work with tax experts in various jurisdictions, reaching and assisting clients who might have been outside our range just a handful of years ago.
With more foreign nationals owning real estate and other US assets, the demand for life insurance for these individuals has grown significantly. The ownership of US assets often creates an estate tax liability that life insurance can meet, and the attractiveness of financial assets is enhanced by the fact that these may be protected in the event of political turmoil in their homelands. The US life insurance market has lower cost products and much more capacity than most of the other insurance markets in the world. We work with international tax experts in various jurisdictions to design plans that meet foreign individuals’ needs while avoiding unfavourable tax implications.
Can you comment on the current tax environment in the US? What is your position on the recent tax legislation and the uncertainty relative to the estate tax?
The current tax environment in the US provides us with challenges and opportunities. The Trump administration and the Republican Congress have proposed repeal of the Federal estate tax, as well as reductions in marginal income tax and capital gains tax rates. For the life insurance industry, which sells products offering tax deferral and tax-free benefits, this could obviously lead to reduced sales. Just the talk of estate tax repeal initially caused many families and advisors to halt estate planning while proposals were being developed.
We have already seen many of those clients resume their planning, as tax reform proposals have been met with opposition and the reality of budgetary concerns, government deficits and ballooning debt have crept back into public consciousness. Experienced advisors have lived through past estate tax repeal, and many have counselled their clients about the fickle nature of repeal, especially in light of our fiscal reality. Estate planning is by nature long-term, and plans must be able to weather political changes. Most advisors with whom I speak don’t believe that the estate tax will be repealed, and even if it is, they believe the tax will be reinstituted or replaced in the long run, perhaps with higher rates. This Administration and this Congress have thus far been unable to accomplish much of their agenda, reducing the confidence of those who would like to see some of these taxes reduced or eliminated.
The current tax system has created an opportunity for affluent individuals to enhance their after-tax investment returns using life insurance, and this opportunity even exists for super-affluent clients who invest in hedge funds. Private Placement Life Insurance (PPLI) and Private Placement Variable Annuities (PPVA) allow accredited investors and qualified purchasers to invest in non-registered investment funds (i.e. hedge funds) within a flexible, ultra-low-cost insurance vehicle. While these products, particularly PPLI, can be used in estate planning situations, they are often based on investment decisions, focusing on current taxation. The simple math behind their appeal is that the insurance policy fees are much less than the taxes that are saved or deferred.
What are some of the most common mistakes, in relation to life insurance, that can be detrimental to beneficiaries?
Many of the most common mistakes that we see are related to products purchased many years ago, sometimes without proper disclosure and usually without adequate administration and review. Of course situations exist in which clients’ families wish they had more coverage, and sometimes the policy ownership creates adverse tax implications, but affluent families often have sophisticated advisors to help them avoid these pitfalls.
Older policies often have performed worse than originally projected, due to the declining interest rate environment, poor (or absent) asset allocation decisions and market performance, or changes made by the insurance company. Policies that haven’t been regularly reviewed can be in danger of policy lapse, often with little notice. For an older client, if a policy is in danger of lapse, due to reduced dividends or credited interest, the cost required to maintain coverage may already be too great to bear. If an insurance policy lapses with a loan outstanding, the loaned amount is often taxable as ordinary income. We were able to recently replace policies carrying ballooning loans with new, efficient policies, allowing the clients to repay the loans using policy values and eliminating the risk of potential income tax liabilities of several million dollars per policy.
There are a variety of issues and problems that we find in policy reviews for new clients. Many families are surprised to learn that older policies no longer maintain the expected guarantees if premium payments were not made as planned. Older policies typically matured at age 100, since few people lived that long. As a result, many older universal life policies have little or no benefit once a client reaches that age, but we can often fix this problem if it is identified before a person gets too close to 100.
We occasionally encounter sad situations in which a client agreed to a premium plan designed to increase over time, perhaps with questionable original assumptions. When a client could have easily afforded somewhat higher premiums at younger ages, some unsuspecting families have learned that the higher premiums required to maintain coverage in that insured’s 80s or 90s are simply too much to bear, making the complete (and significant) investment in life insurance a total loss.
Policies that were funded with third party loans or with a “Split-Dollar” structure often face difficulty if there was no adequate exit strategy. These plans, if left unmanaged, can sometimes result in losses and significant tax liabilities. In some cases, the brokers who sold these complex and risky plans haven’t provided service to their clients for years.
What are the particular challenges that insurers in the US have been facing over the past year in relation to changes in what customers expect in terms of products and services?
The continued low interest rate environment has created a challenging environment for the US life insurance industry for many years. Some companies are burdened by minimum guaranteed rates in old insurance products that exceed the current market rates, while all companies have seen their profit margins negatively impacted by lower rates. This, along with increased reserve requirements, has forced many insurance companies to stop offering guaranteed universal life policies, which were the most popular products for estate planning in the past. All of the companies who continue to offer that product have dramatically increased premiums for new policies to reflect their own increased costs. The duration of the fixed income securities in insurance companies’ portfolios will cause carriers to continue to experience downward rate pressure for the foreseeable future, even if rates rise modestly. As one might expect, this challenge has spurred product innovation, such as the development of Indexed Universal Life, which links policy performance to market indices such as the S&P 500 or the Hang Seng.
US insurers also face challenges with distribution, in part due to the decline of the agency model, which provided the bulk of training to new agents over the years. Less young people have been entering the industry. At the same time, consumers desire the ability to research products on their own or with a roboadvisor, with less sales pressure than a stereotypical insurance agent might provide. The complexity of insurance products and the burdensome application process have hindered many consumers’ ability to effectively navigate this without an advocate.
Fortunately, many technological advances are making it possible to obtain life insurance quickly and easily, sometimes in as little as 30 minutes. More advances are forthcoming, and this will change how typical Americans buy insurance. Affluent clients continue to need personalized advice and implementation experience, but IT advances will continue to make the process more convenient.
Can you tell us about your involvement in the community and its impact?
With school-age children, a lot of my community involvement has involved coaching youth sports, so I’d like to believe that I’ve had a positive impact on kids. I’ve also been involved with The Boston Foundation and the University of Rhode Island, in support of disadvantaged families and public education. I’m active in the Association for Advanced Life Underwriting, which is a great organization, dedicated to preserving the ability of our industry to help families provide and protect their financial security.
The World Economic Forum recently launched its Global Platform for Geostrategic Collaboration to bring together leading policy research institutions (think tanks) to engage the global public on geostrategic challenges in a multipolar world.
The platform aims to fill the urgent need for leaders and experts to understand the world through the eyes of their counterparts in other regions and find better ways to strengthen cooperation.
Within this mission, the forum’s platform will bring together insurers, tech firms and governments together to find ways to tackle risks from new technology such as drones and driverless cars.
Mark Boulton, Insurance Sector Lead at Fujitsu UK & Ireland, had this to say:
“The impact that technology has on our life goes far beyond convenience and speed. With new capabilities come a whole new range of responsibilities, and it is time insurers rethink their approach towards new products, such as drones and driverless cars, and the risks they bring to the table. Assigning liability becomes more and more of a grey area as complex technologies emerge, blurring the lines between the decision-maker and the enabler.
“It is therefore paramount insurers understand these changes are transformational for the entire industry, and old rules cannot be applied to these emerging risks. The way we collect and share data, and the impact of IoT for instance has the potential to revolutionise the industry. It can also offer a great opportunity to scale up to those insurance providers who will seize the moment.
“This represents an important state of change. We will need to learn to co-exist with machines, and both the risk factor and future changes will have to accommodate this. Incorporating new technologies such as driverless cars will not happen overnight – a carefully thought out set of rules of integration needs to be in place. Of course, this will add risk and insurance complexity.
“Ultimately, new technologies represent a business change for the better; revolutionising not only the way in which an insurance organisation company works but the services they can provide to customers by embracing a future in a digital world.”
Michael Bender has worked in the insurance broking industry for over 30 years, specialising in the placement of International Binding Authority contracts for Coverholders in Liability and Property classes. As a Managing Director, he is responsible for the day-to-day running of B&W Brokers. Here he speaks to Finance Monthly about the company’s beginnings, his involvement in it, and the advantages and challenges of his role.
You helped set up B&W Brokers in 2015 – what was the process like? What were some of the challenges that you were faced with?
B&W Brokers was set up in 2015 by my business partner Neil Walton. I was sitting at home on gardening leave adhering to my restrictive covenants imposed by my previous employer whilst Neil forged ahead with our plan to set up a Lloyd’s Broker. The toughest part for me personally was that I was unable to meaningfully assist Neil until after 18 months from when I gave my leaving notice in.
The FCA Approval Application process was very time consuming and arduous and the information required was endless, but with the assistance of an outside third party was completed and agreed within 10 months. Once FCA Approval was granted, we sought Lloyd’s of London Broker Status Approval and this was completed and agreed within a further 4 months.
Shortly after B&W’s Lloyd’s Approval was confirmed, I managed to negotiate an agreeable arrangement with my previous employer which enabled me to start working at B&W and also allowed some of the colleagues who had previously worked with me to join us at B&W.
In real terms, in January 2016 B&W was finally up and running and the clients we had been previously dealing with, for the most part, decided to move to us.
What were the company’s priorities towards its clients from the very beginning? Have these changed, 2 years later?
Our priority was to make the change of broker process as easy as possible for those clients that chose to join us and to continue to be a professional, independent, honest and loyal broker to them.
The first priority I believe was achieved and the second part to this day remains the same to our existing clients and to any clients that may join us in the future.
What would you say are the benefits of being a specialist boutique broker?
The benefit of being a boutique broker is that we can provide clients with a personal service. We do not overstretch ourselves by trying to handle business we have no knowledge of. We avoid clashes of interest between our clients and this has resulted in us maintaining loyalty from our clients. Over 50% of our clients have been with us, as individuals, for over 20 years.
As with any new business, cash flow is a major consideration and with the help of Neil Walton’s other company Centor Insurance & Risk Management, which assisted us with some funding, after a relatively short period, we have managed to stand on our own two feet. The fact that the company has no debt and even managed to pay its shareholders a dividend in its first full year, is a testament to how well the business of the company has bedded in.
As a Managing Director, what are the main day-to-day challenges that you face?
The main challenge, apart from compliance, for me is to keep the clients happy. In an ever-changing market, where IT & Data capture is becoming increasingly more important, we need to keep up with our competitors or even move ahead if possible.
What is the most rewarding aspect of your role?
Being able for the most part to be in control of my own destiny for the first time in my career.
Also, it is rewarding to be able to make decisions with my senior colleagues that will determine how B&W Brokers will hopefully grow and evolve.
What is your overall mission for the company? How do you ensure this mission is upheld?
Our mission is to stick by our principles and encourage other like-minded individuals to join us to help grow the company. In a society that has increasing pressure to succeed we do not want to be sitting on our hands, but we do not want to grow by changing our ethos either.
What do you anticipate for the future of B&W Brokers?
I would anticipate that we have steady growth for 2017 in the main current territories that we trade in, namely Canada and Australia and then look to broaden our appetite for business in other classes of business and territories in 2018 onwards.
For our size, we are a profitable company and this will always be a focus of ours no matter what potential growth is achieved.
One of our strengths is that we have a “Hard Core” of Lloyd’s Underwriters who have supported us over the years and have remained with us through thick and thin. We want to continue this approach by achieving the same in other classes of business.
Our aim is always to see Underwriters and our Coverholders make a profit on the business they write. This has not always been easy when contracts become large in volume and underwriting focus is sometimes lost but we endeavour to give a balance of business to our markets so this may be achieved.
If you would like to find out more about B&W Brokers Limited please email info@bandw.london or visit www.BandW.London.
“In an industry that provides a product that a client is forced to buy for one reason or another we aim to make the process of buying insurance less painful for our insureds.”
Our September Expert Insight section benefits from an interview with Raymond Walker - Founder, Chairman and CEO of Caribbean Assurance Brokers Ltd. in Jamaica.
Over the last 34 years, Raymond has led a distinguished management, sales and marketing career. He was introduced to the industry as a Salesman at the then Life of Jamaica (LOJ) and quickly moved up the ranks to Vice President of Marketing. After a successful tenure at LOJ, Raymond then moved on to Blue Cross of Jamaica, where, as the Executive Vice President of Marketing & Services, he further realized that advocacy and the ultimate representation of any client would be best achieved via Insurance Broking and not so much within the confines of an insurance company. This idea truly resonated and reinforced Raymond’s desire to establish an Insurance Brokerage.
In 2005, he gathered a team of dedicated professionals, who shared his vision and together they formed Caribbean Assurance Brokers Ltd. (CAB), a multi-line insurance brokerage, offering the full spectrum of General, Employee Benefits, Individual Life, International Health, International Life, Travel and Credit Union Members insurance products and services to cover all possible needs while providing the best terms with greatest value for money.
As Chairman of CAB’s Marketing and Business Development Committee of the Board, Raymond frequently reviews strategies and initiatives designed to differentiate CAB from its competitors. Some of these initiatives have not only allowed CAB to create valuable market niches but have also expanded the company’s reach and scope well beyond the shores of Jamaica.
Please tell us a little about the typical insurance matters that Caribbean Assurance Brokers Limited deal with?
At Caribbean Assurance Brokers Limited, our role is to act on behalf of our clients by identifying and providing advice in their area of interest. We place a high value on our client’s needs, and so, as a multi-line insurance brokerage, we enroll in all areas, whether it be Employee Benefits, General Insurance, Individual Insurance or International Insurance.
How do you manage the diversity of your services so that there is synergy between each offering?
We place a high value on a strong team approach, which ensures that our clients benefit from the collective expertise of our diverse specialists. In addition to several types of meetings, there exists a range of cross-selling opportunities throughout the company. There are weekly internal CAB-inet meetings that we use to discuss the week’s plans from each area, Management meetings at the beginning of each month, used to discuss the performances of the previous month and our monthly Staff meetings, where we use the opportunity to keep all staff members informed and involved in all product lines. These meetings were designed to ensure that everyone is aware at all times, and along with our cross-selling advantages, they assist in keeping the synergy between each offering within the company.
What would you say are the specific challenges of assisting clients with insurance?
In the insurance industry, one of the greatest challenges recognized is that not many clients understand the intricacies of risk. The average person may only consider the cost, not realizing that the cheaper option may not necessarily be within their best interest. At Caribbean Assurance Brokers, we take the time out to educate our clients, which is key, because we are aware that some persons do not even recognize the importance of insurance, which at times, makes it difficult for us to get clients to allocate sufficient time for a wholesome discussion on their risk profile. Moreover, it is perceived that even with sophisticated clients, there is still a fundamental mistrust of insurance. People tend to want to see the ‘fine print’.
What strategies do you implement to minimize financial burdens in regards to insurance packages?
At CAB, we operate within a much lower cost regimen than our competitors because we generate at least 65% of our own energy needs via Solar Panels. With electricity being a major cost driver in Jamaica, we are able to operate at lower margins I.e. lower commission rates. This is critical, as margins in terms of commission rates impact the premium, so we can offer competitive products at lower rates.
What are the particular challenges that insurers in the Caribbean have been facing over the past year in relation to changes in what customers expect in terms of products and services?
The brokerage arena is characterized by fierce competition, and once there is a competitive arena, people will shop around. Clients expect to receive the greatest value for the smallest outlay. Fierce competition leads companies to lower their rates to maintain their clients, while other companies lower theirs to pull clients. Also, extremely fierce competition is likely to come from some of the very same insurance companies for which we solicit business.
It is also observed that the increase level of awareness of a more sophisticated market in the Caribbean is driving expectations of our clients to the extent that they are demanding first-world products and services at third-world premiums.
Can you tell Finance Monthly about your involvement in the community and its impact?
In June 2006, our Social Club Outreach Committee decided that part of its mandate would be to give back to the community in a very real way because we felt that as a new company, we needed to not only do well but also to do good. Therefore, any contribution that we made towards national development would not only give great personal satisfaction to the staff, but also generate a very positive response in the community in which we operate. We make most of our contributions to the development of young minds at the Reddie’s Place of Safety, which has been a haven to orphans, as well as abandoned and abused youngsters. This program continues to date, which involves the provision of groceries to the Home each month along with several interactions with the children during the holiday periods. The children have now become an integral part of the lives of our Team and are involved in all of CAB’s social activities.
In addition to the Reddies Place of Safety, we have awarded scholarships to two members of the community. One has graduated from high school, now attending University and the other has graduated from high school and is now an honour student. Caribbean Assurance Brokers remains committed to these children, as we believe the future success of Jamaica lies with the development of the hearts and minds of the nation’s youth.
What makes your company unique?
Caribbean Assurance Brokers Ltd has exclusive rights to certain products, namely our International Comprehensive Health Insurance Programme (ICHIP) and our short-term Medical Travel Insurance Product, Assured Travel. Our ICHIP Programme allows clients to access first-world medical health services. The plan carries a zero deductible option locally and globally, except for the USA. It provides up to $2 million worth of coverage each year and requires no medical examinations and no age limit amongst other premium benefits.
Our Assured Travel Product provides Travel Insurance to clients with the convenience of direct payment online, and access to an extensive International Provider Network of Medical services with 24-hour emergency access anywhere in the world.
Another value proposition that CAB has introduced to its clients is our loyalty program, which will assist in our customer retention, expansion and acquisition.
In recognition of our amazing and loyal clients, we have recently launched our Caribbean Assurance Brokers Loyalty Programme (CABLP), where our customers are given their personal loyalty card which provides them access to receive discounts, savings and cashback at over 200 merchants and providers locations island wide; which includes leading supermarkets, wellness centers, retail stores, hotels, pharmacies, hospital, restaurants, gym and much more. This is our way of giving back to our valued customers and another winning competitive edge.
Howard Ebo is the Managing Partner of Commonwealth of Atlanta – a company that was formed to address the needs of individuals, executives and small to midsize companies (with revenues between 300K and 15M) that were underserved by larger financial institutions. Here Howard tells us more about the company, the services that it offers and the most common challenges that it is faced with.
Please tell me a little about the typical insurance matters Commonwealth of Atlanta deals with?
At Commonwealth of Atlanta we specialize in all types of risk management through insurance. Dependant on a client’s needs, we may recommend term life, universal life, variable universal life, whole life and/or disability income insurances for protection. We take a 21st century approach to addressing client and business needs by examining their entire financial picture and then helping them towards their unique goals. We provide solutions utilizing our strategic partners in advance planning, insurance concepts, and product partners to help solve for client’s concerns resulting in peace of mind. We specialize in four core areas:
- Wealth Accumulation
- Risk Management
- Tax Reduction Strategies
- Retirement and Estate Planning
In fact, we were recently featured in the Wall Street Journal, Atlanta Wealth Guide, which highlighted our 21st Century service oriented approach to servicing clients.
What would you say are the specific challenges of assisting clients with insurance?
Our 21st century approach to address business owner’s needs is remarkable. We strategize with our internal experts to provide advance planning concepts which helps our clients view insurance as protection as well as an asset to their long term plans.
What strategies do you implement to minimize financial burdens in regards to insurance packages?
Our 21st century approach allows for flexibility and creativity when coming up with recommendations for clients. Our access to premiere advance planning experts allows us to bring our best collective thoughts and strategies to consider.
What are the particular challenges that insurers in the US have been facing over the past year in relation to changes in what customers expect in terms of products and services?
Consumers have been faced with a need to know more as they take on more financial responsibilities; some of which may have been covered or shared with an employer in the past. At Commonwealth of Atlanta we believe in educating our clients to help them make informed decisions for their families and businesses. Whatever the situation is, we help educate and close gaps by providing personalized service.
How are you currently lobbying or working towards the development of new insurance regulations or permissible strategies in the state of Atlanta, or nationally?
Many of our agents at Commonwealth of Atlanta are active members in national financial associations to stay abreast and adapt to changes in regulations. All of our agents complete continuing education in the financial industry, which enables them to bring the most current thinking and best strategies to serve our clients.
Can you tell us about your involvement in the community and its impact?
At Commonwealth Atlanta we support and encourage individual and group activities in support of our community. Our agents work on passion projects such as Atlanta Community Food Bank, Open Hand and many more, volunteering their time and talents.
Contact details:
Address: 5909 Peachtree Dunwoody Road, Building D, Suite 990, Atlanta, GA 30328
Phone: (+1) 678-342-3100
Website: cwbfs.com
