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<title>December 13 | Insurance Advocate</title>
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<title>Dec Cover</title>
<link>https://www.insurance-advocate.com/2020/12/13/dec-cover/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 17:07:30 +0000</pubDate>
<category><![CDATA[December 13]]></category>
<category><![CDATA[Covers]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12565</guid>
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<title>Risk Retention Groups Report Financially Stable Third Quarter 2020 Results</title>
<link>https://www.insurance-advocate.com/2020/12/13/risk-retention-groups-report-financially-stable-third-quarter-2020-results/</link>
<dc:creator><![CDATA[Guest Author]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 15:59:00 +0000</pubDate>
<category><![CDATA[2020]]></category>
<category><![CDATA[December 13]]></category>
<category><![CDATA[cover]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12548</guid>
<description><![CDATA[<p>By Douglas Powell</p>
<p>A review of the reported financial results of risk retention groups (RRGs) reveals insurers that continue to collectively provide specialized coverage to their insureds while remaining financially stable. Based on reported financial information, RRGs have a great deal of financial stability and remain committed to maintaining adequate capital to handle losses. It is important to note that ownership of RRGs is restricted to the policyholders of the RRG. This unique ownership structure required of RRGs may be a driving force in their strengthened capital position.</p>
The post <a href="https://www.insurance-advocate.com/2020/12/13/risk-retention-groups-report-financially-stable-third-quarter-2020-results/">Risk Retention Groups Report Financially Stable Third Quarter 2020 Results</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p><strong>By Douglas Powell</strong></p>
<p class="p1">A review of the reported financial results of risk retention groups (RRGs) reveals insurers that continue to collectively provide specialized coverage to their insureds while remaining financially stable. Based on reported financial information, RRGs have a great deal of financial stability and remain committed to maintaining adequate capital to handle losses. It is important to note that ownership of RRGs is restricted to the policyholders of the RRG. This unique ownership structure required of RRGs may be a driving force in their strengthened capital position.</p>
<p class="p3"><b>Balance Sheet Analysis </b></p>
<p class="p1">From third quarter 2019 to third quarter 2020, cash and invested assets increased 4.8 percent and total admitted assets increased 5.4 percent. RRGs collectively reported a 3.2 percent increase to policyholders’ surplus. This represents a $167.8 million year-over-year increase to policyholders’ surplus. The level of policyholders’ surplus becomes progressively important in times of difficult economic conditions by allowing an insurer to remain solvent when facing uncertainty.</p>
<p class="p1">Liquidity, as measured by cash and invested assets to liabilities, for third quarter 2020 was 147.3 percent. A value more than 100 percent is considered favorable as it indicates that there was more than a dollar of net liquid assets for each dollar of total liabilities. In evaluating individual RRGs, Demotech, Inc. prefers companies to report leverage of less than 300 percent. Leverage for all RRGs combined, as measured by total liabilities to policyholders’ surplus, for third quarter 2020 was 144.8 percent.</p>
<p class="p1">The loss and loss adjustment expense reserves (loss reserves) to policyholders’ surplus ratio for third quarter 2020 was 94.7 percent. The higher the ratio of loss reserves to surplus, the more an insurer’s stability is dependent on having and maintaining reserve adequacy.</p>
<p class="p1">Regarding RRGs collectively, the ratios pertaining to the balance sheet appear to be appropriate and conservative. These reported results indicate that collectively RRGs remain adequately capitalized and able to remain solvent if faced with adverse economic conditions or increased losses.</p>
<p class="p3"><b>Premium Written Analysis </b></p>
<p class="p1">Since RRGs are restricted to liability coverage, they tend to insure medical providers, product manufacturers, law enforcement officials and contractors, as well as other industries with professional liability.</p>
<p class="p1">RRGs collectively reported over $3.1 billion of direct premium written through third quarter 2020, an increase of 5.7 percent over third quarter 2019. RRGs reported approximtately $1.8 billion of net premium written through third quarter 2020, an increase of 1.7 percent over third quarter 2019.</p>
<p class="p1">The direct premium written to policyholders’ surplus ratio for RRGs collectively for third quarter 2020 was 76.3 percent. The net premium written to policyholders’ surplus ratio for RRGs for third quarter 2020 was 42.6 percent. Please note, the premium written values for these ratios have been adjusted so they can be compared to year-end ratios. An insurer’s direct premium written to surplus ratio is indicative of its policyholders’ surplus leverage on a direct basis, without consideration for the effect of reinsurance. An insurer’s net premium written to surplus ratio is indicative of its policyholders’ surplus leverage on a net basis. An insurer relying heavily on reinsurance will have a large disparity in these two ratios.</p>
<p class="p1">A direct premium written to surplus ratio in excess of 600 percent would subject an individual RRG to greater scrutiny during the financial review process. Likewise, a net premium written to surplus ratio greater than 300 percent would subject an individual RRG to greater scrutiny. In certain cases, premium to surplus ratios in excess of those listed would be deemed appropriate if the RRG had demonstrated that a contributing factor to the higher ratio is relative improvement in rate adequacy.</p>
<p class="p1">In regards to RRGs collectively, the ratios pertaining to premium written appear to be conservative. Income Statement Analysis The loss ratio for RRGs collectively, as measured by losses and loss adjustment expenses incurred to net premiums earned, through third quarter 2020 was 80.1 percent. This ratio is a measure of an insurer’s underlying profitability on its book of business. The expense ratio, as measured by other underwriting expenses incurred to net premiums earned, through third quarter 2020 was 25.0 percent. This ratio measurers an insurer’s operational efficiency in underwriting its book of business.</p>
<p class="p1">The combined ratio, loss ratio plus expense ratio, through third quarter 2020 was 105.1 percent. This ratio measures an insurer’s overall underwriting profitability. A combined ratio of less than 100 percent indicates an underwriting profit and a ratio of more than 100 percent indicates an underwriting loss. In regards to underwriting results, collectively RRGs were unprofitable through third quarter 2020, and reported an aggregate underwriting loss of $68.9 million. However, RRGs collectively reported a net investment gain of $219.0 million and, as a result, a net gain of $137.3 million.</p>
<p class="p1">Despite the underwriting losses, the ratios pertaining to the income statement appear to be appropriate for RRGs collectively.</p>
<p class="p3"><b>Conclusions Based on Third Quarter 2020 Results </b></p>
<p class="p1">Despite political and economic uncertainty, RRGs remain financially stable while providing specialized coverage to their insureds. The financial ratios calculated based on the reported results of RRGs appear to be reasonable, keeping in mind that it is typical and expected that insurers’ financial ratios tend to fluctuate over time. The results of RRGs indicate that these specialty insurers continue to exhibit financial stability.</p>
<p class="p2"><span class="Apple-converted-space"> </span></p>
<p class="p5"><em><span class="s5">Douglas A Powell supports the formulation and assignment of Financial Stability Ratings® (FSRs) for Demotech by providing analysis of statutory financial statements and business information pertaining to insurance companies. He interfaces with clients to assist them in completing a rigorous financial analysis, while also providing insight regarding financial reporting practices and procedures. He also performs financial and operational and peer group analyses, as well as benchmark studies for client companies.</span></em></p>
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<title>Really, Hot …and Cool</title>
<link>https://www.insurance-advocate.com/2020/12/13/really-hot-and-cool/</link>
<dc:creator><![CDATA[Stephen Ruchman]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 11:06:19 +0000</pubDate>
<category><![CDATA[2020]]></category>
<category><![CDATA[December 13]]></category>
<category><![CDATA[Foreword]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12563</guid>
<description><![CDATA[<p>I had to read it twice. Hard to believe it. See if you get it the first time. In a motion made by Park Insurance to have the NY State Supreme Court vacate its order placing Park into Liquidation, the initial text reads as follows: Respondent Park Insurance Company (“Respondent” or “Park”) respectfully submits this […]</p>
The post <a href="https://www.insurance-advocate.com/2020/12/13/really-hot-and-cool/">Really, Hot …and Cool</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p>I had to read it twice.</p>
<p class="p1">Hard to believe it.</p>
<p class="p1">See if you get it the first time.</p>
<p class="p1">In a motion made by Park Insurance to have the NY State Supreme Court vacate its order placing Park into Liquidation, the initial text reads as follows:</p>
<p class="p3">Respondent Park Insurance Company (“Respondent” or “Park”) respectfully submits this memorandum of law in support of its motion: (i) to vacate the Court’s Decision and Order, dated and entered September 22, 2020, which granted the Superintendent of the Department of Financial Services of the State of New York’s (“Petitioner” or “DFS”) Petition for an order appointing the Superintendent and her successors in office as liquidator of Park and directing the liquidator to take possession of the property of Park to liquidate its business and affairs (NYSCEF Doc. No. 477, hereinafter, the “Liquidation Order”); and (ii) for recusal. For the reasons set forth below, the Liquidation Order should be vacated in its entirety and presiding Justice Shlomo Hagler should then recuse himself from further participation in these proceedings.</p>
<p class="p3">This case presents the extraordinary circumstance of an unprecedented order by this Court directing the immediate liquidation of Park while the Court’s brother not only had an existing financial relationship with Park, but was also leveraging his brother’s decision in this case for his personal advantage. Justice Hagler issued the Liquidation Order without disclosing to the parties the disqualifying fact that his brother, Daryl Hagler, is a principal of Park’s single largest policyholder, Senior Care Ambulance, and is otherwise significantly intertwined with Park’s financial prospects.</p>
<p class="p3">Senior Care Ambulance is the largest provider of ambulances in New York City and Justice Hagler was aware of his brother Daryl’s ownership of Senior Care Ambulance long before the trial in this action. Yet no cautionary disclosure of his brother’s interest in Senior Care Ambulance was made by the Court, even when the evidence at trial revealed that ambulances and ambulettes comprised a significant part of Park’s insurance business. Indeed, while these proceedings were ongoing, Senior Care Ambulance extracted a significant premium reduction from Park for its 2019 renewal policy, and Daryl Hagler advised Mr. Polsinelli that he “knew everything” about this proceeding pending before his brother. Park, for its part, was in no position to refuse the demands of its largest policyholder because of the temporary restraining order entered by Justice Hagler prohibiting it from writing new business.</p>
<p class="p3">If the existing financial relationship between Park and Justice Hagler’s brother was not enough, Daryl Hagler continued to inject himself into Park’s financial affairs as a result of Justice Hagler’s Liquidation Order. Critically, once that order was entered, Daryl Hagler began exploring a potential acquisition of an interest in Park through two separate groups with whom Thomas Polsinelli, the President of Park, was in discussions. It can hardly be coincidence that Daryl Hagler, who had previously told Mr. Polsinelli that he “knew everything” about Park’s pending proceedings before his brother, suddenly materialized to explore taking a controlling position in Park and save it from liquidation soon after his brother ordered that very liquidation. Importantly, during a conference before Justice Hagler, where these disqualifying conflicts were raised, Justice Hagler was unable to say definitively that the investment entity in which he personally held an interest, along with Daryl Hagler, was not the intended source of funds for the proposed investment(s) in Park.</p>
<p class="p3">Justice Hagler’s close familial (and financial) relationship with a person so entangled in Park’s financial fate, who stands to gain from the business opportunity created by the Liquidation Order, creates a non-waivable conflict of interest which requires Justice Hagler’s recusal. Because Daryl Hagler’s interest in Park could be, and, in fact, was substantially affected by the outcome of these liquidation proceedings, Justice Hagler’s recusal is mandatory under applicable law. Consequently, Justice Hagler lacked jurisdiction to issue the Liquidation Order, and the decision was void ab initio. This disqualifying conflict is not cured by Justice Hagler’s assertion that he was unaware of his brother’s, or Senior Care Ambulance’s, involvement with Park. Vacatur is, therefore, proper pursuant to CPLR 5015(a)(4). Alternatively, given Justice Hagler’s disqualifying conflict of interest, vacatur is appropriate in the interests of substantial justice. At a minimum, these unseemly circumstances give rise to a powerful appearance of impropriety, warranting both vacatur of the Liquidation Order and Justice Hagler’s recusal.</p>
<p class="p1">
<p class="p1">We remind readers that this is a motion, that Judge Hagler is “innocent untilproven guilty”, like any citizen, and may not necessarily be faced with vacating a decision or recusal or both or even faced with conflict itself, as we are unaware of the specific conflict disclosure requirements.</p>
<p class="p1">We note that there is a long history here and that there is another side to all of this. Park has had its bouts with DFS, right and wrong, for some time. It has been an epic contest largely over reserves and restrictions on underwriting.</p>
<p class="p1">But this motion looks pretty ugly, doesn’t it?</p>
<p class="p1">Pass the smell test?</p>
<p class="p1">Park could use a financial boost, perhaps a partner enterprise to bolster its surplus and set it all right.</p>
<p class="p1">Liquidation is drastic and basically causes another problem.</p>
<p class="p1">New York can use all the markets it can get and Park provides sensitive ones.</p>
<p class="p1">This case will be heating up…and we will follow it, hopefully to a happy ending for Park and the public interest….</p>
<p class="p1">………….NOW FOR THE COOL Arthur J. Gallagher & Co. continues its buying spree, acquiring Cool Insuring Agency Inc.,. Cool, founded in 1857, provides commercial, personal, and life and health insurance and services to clients in the northeastern U.S. from offices in Queensbury and Latham, New York, with a focus on the construction, health care and government sectors, which together account for more than half of its revenue. Anthony Mashuta, president and principal of Cool; Ira Neifeld, senior vice president, director and principal; and their associates will continue to operate from their current locations under the direction of Patrick Kennedy, head of Gallagher’s Northeast Region retail property/casualty brokerage operations, and Tom Belmont, Jr., head of Gallagher’s Atlantic Region employee benefit consulting and brokerage operations. Gallagher is headquartered in Rolling Meadows, Illinois and is the fourth-largest brokerage ranked by revenue generated by U.S. clients, according to Business Insurance’s 2020 ranking. SA</p>
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<title>Applied Underwriters Forms Applied Specialty Underwriters</title>
<link>https://www.insurance-advocate.com/2020/12/13/applied-underwriters-forms-applied-specialty-underwriters/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 09:05:14 +0000</pubDate>
<category><![CDATA[2020]]></category>
<category><![CDATA[December 13]]></category>
<category><![CDATA[In The News]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12561</guid>
<description><![CDATA[<p>Christopher Day Named President of the New Company ASU will concentrate on Casualty E&S markets nationwide, initially focusing on New York construction risks Steve Menzies, CEO of Applied Underwriters, has announced the creation of Applied Specialty Underwriters, LLC to focus on select Casualty E&S risks across the country, with an initial focus on large construction […]</p>
The post <a href="https://www.insurance-advocate.com/2020/12/13/applied-underwriters-forms-applied-specialty-underwriters/">Applied Underwriters Forms Applied Specialty Underwriters</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<h2 class="p1"><span class="s1">Christopher Day Named President of the New Company</span></h2>
<p class="p1">ASU will concentrate on Casualty E&S markets nationwide, initially focusing on New York construction risks</p>
<p class="p1"> Steve Menzies, CEO of Applied Underwriters, has announced the creation of Applied Specialty Underwriters, LLC to focus on select Casualty E&S risks across the country, with an initial focus on large construction in New York. Christopher Day, CPCU, has been named President of the new company and will be joined by 11 veteran underwriters in the sector to spearhead Applied Specialty’s development. The Company has identified General Liability, Excess Liability, and Workers’ Compensation for New York construction as its initial offerings. Applied Specialty is presently appointing wholesalers who, in turn, will work with independent agents and brokers to provide the Company’s innovative, customized products and services to businesses.</p>
<p class="p1"> According to Mr. Menzies, the current market segment’s needs and the applied strengths of the assembled team at Applied Specialty will create a new force in the marketplace. “Our year-long research, together with business and broker demand, have led us to create Applied Specialty and to offer the coverages, formats, and pricing they seek for several specialized lines. The naming of Christopher Day to head this effort signifies our commitment to our partners across the nation to provide the leadership and market expertise of an</p>
<p class="p1">experienced, accomplished underwriting professional. Chris has a solid track record as a business developer and multi-product line professional who will now have the advantages of collaborating with an additional eleven sector-focused underwriters and the overall support of our operational staff in Omaha to serve what we believe will be a large, appreciative clientele over the years ahead,” Mr. Menzies stated.</p>
<p class="p1"> Mr. Christopher Day noted that Applied Specialty has already begun to operate in its target market space and information can be found at its website, specialty.auw.com. “Our professional staff has begun to undertake customized solutions with our brokers, and we have started to accept submissions for New York multi-line construction wrap-ups, renewable general contractor policies and construction excess liability placements. Applied Specialty is on its way to a major position in our segments of the insurance marketplace,” Mr. Day said.</p>
<p class="p1">Mr. Christopher Day, CPCU, has held a succession of top positions in the Property and Casualty field during his 28-year career in which he has been responsible for more than $2.5 Billion in premiums. Most recently, he served as President of the Casualty Group at Tokio Marine HCC and, before that, as President, Primary Casualty, for Navigators Group, Inc. Mr. Day had also served as National Product Director – Specialty Primary Casualty for Fireman’s Fund Insurance Company. He holds degrees from Loyola University of Chicago, Graduate School of Business (MBA), and from Denison University (BA, History and Geology) where he captained the swim team. Mr. Day has earned the Chartered Property Casualty Underwriter designation and has participated actively in many industry and charitable groups, notably the Ann and Robert H. Lurie Children’s Hospital of Chicago where he has volunteered for many years.</p>
<p class="p1">The founding of Applied Specialty follows other transactions earlier this year as Applied Underwriters acquired Blue Ridge Specialty Group of Greenfield, South Carolina, a managing general underwriter specializing in trucking-related risks, and acquired the Centauri group of companies from its primary shareholder AXA/XL.</p>
<p class="p1">Applied Underwriters® is a global risk services firm that helps businesses and people manage uncertainty through its business services, insurance, and reinsurance solutions. As a company, Applied Underwriters has been distinguished by its innovative approaches to client care and by its strong financial strength. Applied Underwriters operates throughout the U.S. from its operational headquarters in Omaha, Nebraska. Ratings issuer AM Best has affirmed the Financial Strength Rating of ‘A’ (Excellent) and Long-Term Issuer Credit Ratings of ‘A’ of five companies collectively referred to as North American Casualty Group (NAC). The companies with the affirmed ratings are: California Insurance Co. (CIC), Continental Indemnity Co., Illinois Insurance Co., Texas Insurance Co. and Pennsylvania Insurance Co. All companies are domiciled in Santa Fe, New Mexico. NAC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level, and AM Best expects it to remain at a similar level in prospective years. Balance sheet strength also benefits from the company’s strong liquidity profile, conservative investment strategy, and disciplined reserving. The ratings agency said NAC has a track record of “strong operating earnings, underpinned by its robust underwriting performance” and demonstrated by a five-year average return on equity ratio of 13.1% and a combined ratio averaging 75% (2015-2019).</p>
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<title>Avoiding COVID Scams</title>
<link>https://www.insurance-advocate.com/2020/12/13/avoiding-covid-scams/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 07:04:10 +0000</pubDate>
<category><![CDATA[2020]]></category>
<category><![CDATA[December 13]]></category>
<category><![CDATA[Covid-19]]></category>
<category><![CDATA[MSO Inc.]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12558</guid>
<description><![CDATA[<p>By Sue Quimby The fears and uncertainties of the pandemic of 2020 have brought with them a whole new arena for scammers. As is often the case, scammers prey upon the most vulnerable: the elderly, or those with underlying medical conditions, such as diabetes, who are also the most vulnerable to the infection. Some of […]</p>
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<content:encoded><![CDATA[<p><strong>By Sue Quimby</strong></p>
<p class="p1">The fears and uncertainties of the pandemic of 2020 have brought with them a whole new arena for scammers. As is often the case, scammers prey upon the most vulnerable: the elderly, or those with underlying medical conditions, such as diabetes, who are also the most vulnerable to the infection. Some of the most common scams are related to contact tracing – the process used to try to determine the source of infections and outbreaks – and warn people who may have been exposed to the virus. Some scams offer fake cures or try to sell COVID tests for a fee. Helping clients understand how to identify contact tracing and other COVID 19-related scams, and how to avoid them, is another value -added service of the professional insurance agent.</p>
<p class="p1">A common scam is a text or call to the target – the person being scammed – warning of a local outbreak and saying that the recipient should get tested, or perhaps offering a vaccine. The scammer then offers to connect the target to a “health adviser”. Other scams prey on financial fears brought on by the lockdown. Scammers offer fake work from home opportunities, or try to sell health insurance or financial assistance, such as bogus loans or debt consolidation, to the target. Others purport to have information about government stimulus checks. In all cases, the goal is to obtain personal and financial information that the scammer can use for personal gain. The federal government offers a variety of resources for consumers who want to learn how to recognize and respond to possible scams. (www.fcc.gov/covid-scams)</p>
<p class="p1">Contact tracing is an essential tool in the war to control the spread of any disease. Each positive case who quarantines may prevent an exponential spread of the disease. A recent study showed that the “secondary infection rate” in households – the percent of people who catch COVID-19 from someone they live with – is 53%. This is much higher than previously believed. (www.livescience.com). Just because someone does not feel sick does not mean they are not contagious, as approximately 20% of those infected remain asymptomatic.</p>
<p class="p1">When a legitimate contact tracer calls, they should introduce themselves and advise what health department they are working for. If someone is contacted by a tracer and there is ever a question, the subject can ask the tracer what health department they are calling from, and if the number is called back, will they reach the health department? Another option is to ask for the name of the tracer’s supervisor and a phone number they can call to confirm. Legitimate tracers are asking for health information, not money or personal financial information (www.ftc.gov/coronavirus/scams-consumer-advice).</p>
<p class="p1">There are different procedures for contacts (people who have been exposed to positive cases) and cases (people who have tested positive). Wen calling a contact, the tracer informs them that they were exposed to someone who tested positive, and the contact needs to quarantine for the next 14 days, even if they have no symptoms. The tracer will most likely ask the contact for their address, or at the very least the town the contact lives in. Has the contact been experiencing any symptoms and if so have they been tested? The tracer may ask if the contact is aware they were exposed. Tracers do not tell people to get tested, do not send out testing kits and definitely do not ask for payment info. Finally, there are no penalties for noncompliance. The contact is not required to answer the questions nor to get tested.</p>
<p class="p1">Legitimate contact tracers will not tell anyone who they were exposed to because that is a privacy (HIPAA) violation. The tracers can usually tell a person where they were exposed, such as at work or the grocery store, but that is not always possible due to privacy concerns. In cases of family or friends, the contact often knows who they may have been exposed to.</p>
<p class="p1">For an actual case – one where the subject has tested positive – the tracers know the date of birth and address, and will ask the subject for confirmation so there isn’t any sharing of private medical information with someone who it isn’t meant for. Once again, legitimate tracers never ask for any type of payment. The goal is to warn people who may have been infected and stop further spread. Some counties offer quarantine support services, such as grocery and medication delivery or housing for those who cannot isolate where they are.</p>
<p class="p1">The coronavirus pandemic has opened new avenues for those unscrupulous individuals who look to gain from the misfortune and fears of others. Helping clients recognize and avoid the negative impact of such scams is another sign of the true insurance professional.</p>
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<title>Vast majority of Insurance Customers Prefer Conversational AI and Messaging Experiences</title>
<link>https://www.insurance-advocate.com/2020/12/13/vast-majority-of-insurance-customers-prefer-conversational-ai-and-messaging-experiences/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 06:02:47 +0000</pubDate>
<category><![CDATA[2020]]></category>
<category><![CDATA[December 13]]></category>
<category><![CDATA[Artificial Intelligence]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12554</guid>
<description><![CDATA[<p>LivePerson, Inc. (Nasdaq: LPSN), a global leader in conversational AI, has announced the findings of its 2020 Survey of Consumer Preferences Around Insurance examining consumer attitudes and behavior around interactions with insurers, messaging, and conversational AI and commerce. The 2020 survey of more than 2,500 U.S., U.K., and Australian respondents reveals that the vast majority […]</p>
The post <a href="https://www.insurance-advocate.com/2020/12/13/vast-majority-of-insurance-customers-prefer-conversational-ai-and-messaging-experiences/">Vast majority of Insurance Customers Prefer Conversational AI and Messaging Experiences</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1">LivePerson, Inc. (Nasdaq: LPSN), a global leader in conversational AI, has announced the findings of its 2020 Survey of Consumer Preferences Around Insurance examining consumer attitudes and behavior around interactions with insurers, messaging, and conversational AI and commerce. The 2020 survey of more than 2,500 U.S., U.K., and Australian respondents reveals that the vast majority of consumers trust messaging experiences and chatbots to help them with insurance questions.</p>
<p class="p1"> The survey results point to the need for insurers to put AI-powered messaging options front and center to accommodate evolving behaviors. Nearly half (49%) of respondents said the pandemic has made them rethink their medical and life insurance policies, and 63% say they would use an insurer’s chatbot that could instantly answer questions, including those related to COVID-19 symptoms and testing.</p>
<p class="p1"> “The relationship between consumers and their insurers is built on trust, and the vast majority of consumers now clearly report that they trust insurance companies more if they provide the option to message to get advice, ask questions, and even make purchases,” said Robert LoCascio, founder and CEO of LivePerson. “This is a win-win for policyholders and insurance companies. Policyholders can engage whenever and wherever they want on the messaging channels they love using with family and friends, and insurers can leverage conversational AI to reduce call volume, boost self-service, and exceed customer expectations with an end-to-end digital experience tailored to their needs.”</p>
<p class="p2"><b>Key findings of LivePerson’s 2020 Survey of Consumer Preferences Around Insurance are:</b></p>
<p class="p1"> • Consumers say conversational insurance experiences are in high demand.</p>
<p class="p1">• 75% of consumers say they prefer to have a conversation with someone at their insurance company before making a purchase.</p>
<p class="p1">• 70% say they want the ability to securely text or message with their insurance company.</p>
<p class="p2"><b>Consumers express high levels of trust in Conversational AI and messaging for insurance.</b></p>
<p class="p1">• 70% of consumers say they trust an insurance company more if associates are readily available via messaging to give advice, answer questions, and help with purchases.</p>
<p class="p1">• 71% say they would also trust an insurance company more if it provided personalized service, which Conversational AI can help insurers deliver at scale.</p>
<p class="p1">• The vast majority of respondents say they trust chatbots to help them:</p>
<p class="p4">Provide a quote (76%)</p>
<p class="p4">Change address (75%)</p>
<p class="p4">Make a claim (71%)</p>
<p class="p4">Add a member to coverage (74%)</p>
<p class="p4">Calculate a rate (78%)</p>
<p class="p4">Provide a renewal quote (77%)</p>
<p class="p4">Tell them about waiting periods (82%)</p>
<p class="p4">Update billing information (76%)</p>
<p class="p2"><b>Consumers are much more likely to buy and continue service if given Conversational AI and messaging options.</b></p>
<p class="p1">• 63% said they were more likely to buy insurance from a company if they had the option to message them instead of just call.</p>
<p class="p1">• 65% said they are more likely to stay with an insurance company that offers this service.</p>
<p class="p1">• More than half (51%) say they’d purchase more from an insurance company that offered a chatbot concierge to help, as opposed to strictly self-serve.</p>
<p class="p2"><b>The world’s most innovative insurance brands, like Bupa and Zurich, have seen success deploying conversational experiences for their customers.</b></p>
<p class="p1">LivePerson’s 2020 Survey of Consumer Preferences Around Insurance was conducted in October 2020 via an online survey of 2,574 consumers aged 18 and older in the United States, United Kingdom, and Australia. Respondents were asked a series of questions related to insurance and customer care topics.</p>
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<title>Leadership Is Doing: Axioms That Prompt “Doing” As A Leadership Style and Edge</title>
<link>https://www.insurance-advocate.com/2020/12/13/leadership-is-doing-axioms-that-prompt-doing-as-a-leadership-style-and-edge/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 05:00:38 +0000</pubDate>
<category><![CDATA[December 13]]></category>
<category><![CDATA[Leadership]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12551</guid>
<description><![CDATA[<p>Leadership Is Doing is the title of Pamela Newman’s entertaining and useful new tome that presents a series of axioms that characterize – or should – the approaches leaders take personally. I enjoyed it, especially as it comes from a former “Top Gun” at AON, responsible for a major book of their business. Her CV […]</p>
The post <a href="https://www.insurance-advocate.com/2020/12/13/leadership-is-doing-axioms-that-prompt-doing-as-a-leadership-style-and-edge/">Leadership Is Doing: Axioms That Prompt “Doing” As A Leadership Style and Edge</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1"><i>Leadership Is Doing</i> is the title of Pamela Newman’s entertaining and useful new tome that presents a series of axioms that characterize – or should – the approaches leaders take personally.</p>
<p class="p1">I enjoyed it, especially as it comes from a former “Top Gun” at AON, responsible for a major book of their business.</p>
<p class="p1">Her CV is shared modestly, but as a friend of long standing, I can state that I have come to know both Pamela as a thought leader, business leader, and as a dedicated philanthropist.</p>
<p class="p1">Pamela has received the highest awards given by the John Cabot University of Rome and by the College of Mount St Vincent, noting her charitable and social responsibility advocacies i.e that she demonstrates a sense of profound love of fellow man and a serious commitment to putting that into action. Pamela’s CV bespeaks an adroit intelligence and remarkable achievement as head of a major enterprise within a major enterprise (AON). It fails to express her innate grace and joie de vivre, so highly prized among her many, many friends across the insurance business and the nation. Although she has travelled among the top protagonists in our country and has numbered among her professional clientele at least one US President and scores of top CEO’s and leaders, Pamela remains exceedingly well grounded in the latest literature, art events and charitable opportunities. Always a force in a field that was once called insurance, but now prefers “risk transfer,” Pamela has arranged for the underwriting of some of the most challenging risks on the planet and some of the most difficult exposures imaginable. Her acute, surgical approach to the analysis of causalities and options has made her a leader in the field, to the point where the oldest insurance magazine in the country, the Insurance Advocate, presented her on its cover as The Insurance Professional of the Year, 2016. In selecting friends and colleagues with whom to share our lives, pleasures and challenges, one always hopes for personal characteristics such as kindness, reserve and fidelity and to the unwritten rules of behavior that distinguish great people. In this context her advice is well understood.</p>
<p class="p1"> A typical Chapter reads quickly and sets out bite sized observations that may appear obvious but bear repeating and reflection.</p>
<p class="p1">Here is one Chapter:</p>
<p class="p1">
<p class="p2"><b>“LEADERSHIP IS DOING” AXIOM #7: THE VALUE OF THE MENTOR/PROTÉGÉ RELATIONSHIP</b></p>
<p class="p1">“A great way to measure where you are on the scale of being a true leader is to ask and answer for yourself this question: “How many protégés am I mentoring?” Implicit in leadership talent is the ability to persuade other people to follow you. I have had, over the last couple of years, the opportunity to be a protégé to an outstanding leader. When I became a Civilian Aide to the Secretary of the Army, I truly had very little concept of how to perform this important function. Wonderful William (Bill) Murdy (former CASA – Connecticut) reached out to me and asked me if he could guide and educate me on the responsibilities of being a Civilian Aide to the Secretary of the Army. Bill is a West Point graduate and has had an incredibly successful career as a leader in business. I have taken pleasure in watching how well Bill navigates me and improves my skill sets. What I specifically noticed was that he did three things:</p>
<p class="p1">1. Bill took the time to evolve me. Leaders recognize that if you are going to get people to follow your thinking, it’s a significant time investment. Bill took the time out of his own schedule to meet with me and introduce me to various aspects of the Army. In our first visit, he helped me understand what the Army Corps of Engineers does. In the next visit, what the Head of Public Relations for the Army is about. After each meeting, with various units of the Army, Bill debriefed me about what we had learned from that branch of the Army.</p>
<p class="p1">2. Bill Murdy displays the incredible focus it takes to be a leader. A leader captures people, captures the room, and captures the entire environment he or she is occupying. He or she listens intently and nods as he or she absorbs what I am saying. As he or she learns the information I am sharing, he or she registers comprehension with frequent commentary and acknowledgement. Leaders practice their capacity to focus. When they make an introduction, they hold their eye contact just slightly longer than customary. In conversations they keep their eyes glued to the eyes of the other person. Leaders lean into other people. Leaders reflect in facial cues that they hear the other person. One of the highest compliments I ever received was from a woman name Dinny Monroe who said to me “You listen like what you are hearing is the missing link to the final equation”. Leaders focus on listening.</p>
<p class="p1">3. Bill Murdy has an open way. He doesn’t see a reason to build walls in a relationship. Transparency is critical. Not only do leaders talk about their families and their children, they also talk about their vacation plans, their retirement plans and their plans for the weekend. Leaders are not afraid for their protégés to see their foibles and their failings. By being vulnerable, they remarkably gain leadership respect.”</p>
<p class="p4"><span class="s5">Book available from Outskirts Press.</span></p>
<h3 class="p1">Selected Chapter headings from L<i>eadership is Doing</i></h3>
<ul>
<li class="p1"><b>Visualize the Outcome</b></li>
<li class="p1"><b>Refuse to Tolerate Prejudice</b></li>
<li class="p1"><b>Put Your Own Needs Aside</b></li>
<li class="p1"><b>Plan What You Need To Do</b></li>
<li class="p1"><b>Leaders Comprehend</b></li>
<li class="p1"><b>The Value of the Mentor/Protégé Relationship</b></li>
<li class="p1"><b>Leaders Inspire Others</b></li>
<li class="p1"><b>Leadership Moments are Derived</b></li>
<li class="p1"><b>From a Collection of Short Events.</b></li>
<li class="p1"><b>Leadership is About Change of Behavior</b></li>
<li class="p1"><b>The U.S. Army Teaches People</b></li>
<li class="p1"><b>How to Be Leaders</b></li>
<li class="p1"><b>Leaders Understand the Power of Purpose</b></li>
<li class="p1"><b>Leaders React to Social Change</b></li>
<li class="p1"><b>Leaders Do More Than Listen</b></li>
<li class="p1"><b>Leadership Means Getting Up</b></li>
<li class="p1"><b>Again After Falling Down</b></li>
<li class="p1"><b>Respect Is an Art Form</b></li>
<li class="p1"><b>People Never Forget Leaders</b></li>
<li class="p1"><b>Leaders Have Excellent</b></li>
<li class="p1"><b>Communication Skills</b></li>
<li class="p1"><b>Leaders Know Small Acts are</b></li>
<li class="p1"><b>as Important as Large Ones</b></li>
<li class="p1"><b>Show Up When You Are Needed</b></li>
<li class="p1"><b>Leaders See the Opportunity No One Else Sees</b></li>
<li class="p1"><b>Leaders Improve the World</b></li>
<li class="p1"><b>One Foot in Front of the Other</b></li>
<li class="p1"><b>Leaders Teach</b></li>
<li class="p1"><b>Leaders “Break Glass”</b></li>
<li class="p1"><b>Restructure the Paradigm</b></li>
<li class="p1"><b>Leaders are Visionaries</b></li>
<li class="p1"><b>Listen Hard</b></li>
</ul>
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<title>From the Files, Some Fraudulent “Beauties”</title>
<link>https://www.insurance-advocate.com/2020/12/13/from-the-files-some-fraudulent-beauties/</link>
<dc:creator><![CDATA[Barry Zalma]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 02:57:47 +0000</pubDate>
<category><![CDATA[2020]]></category>
<category><![CDATA[December 13]]></category>
<category><![CDATA[On My Radar]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12546</guid>
<description><![CDATA[<p>Owner of Durable Medical Equipment Companies Admits Role In $16 Million Dollar Kickback Scheme Albert Davydov, 28, of Rego Park, New York, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an indictment charging him with conspiring to violate the Anti-Kickback statute. Davydov, the owner of a group of related durable medical equipment […]</p>
The post <a href="https://www.insurance-advocate.com/2020/12/13/from-the-files-some-fraudulent-beauties/">From the Files, Some Fraudulent “Beauties”</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1"><b>Owner of Durable Medical Equipment Companies Admits Role In $16 Million Dollar Kickback Scheme</b></p>
<p class="p2">Albert Davydov, 28, of Rego Park, New York, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an indictment charging him with conspiring to violate the Anti-Kickback statute.</p>
<p class="p2">Davydov, the owner of a group of related durable medical equipment (DME) companies admitted his role in a conspiracy to pay kickbacks in exchange for durable medical equipment on November 13, 2020.</p>
<p class="p2">According to documents filed in this case and statements made in court: Davydov, the owner of nine DME companies, participated in a scheme to pay kickbacks in exchange for doctors’ orders for medically unnecessary orthotic braces. Once Davydov and his conspirators received the completed doctor’s orders, they billed Medicare and other federal and private health care benefit programs for the braces. Davydov concealed his ownership of the DME companies by falsely reporting to Medicare that various straw owners owned the companies.</p>
<p class="p2">As part of his plea agreement, Davydov agreed that the improper benefit conferred was over $16 million for the charged conspiracy to violate the federal Anti-Kickback statute. The conspiracy charge to which Davydov pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest. Sentencing is scheduled for March 25, 2021.</p>
<p class="p1"><b>Texas Man Sentenced to Prison for Fraudulently Billing Government Medical Insurance Programs</b></p>
<p class="p1"><b>Prosecution Is Part of Effort Against Fraudulent ‘Telehealth’ Scams</b></p>
<p class="p2">Patrick Siado, 39, of Houston, was sentenced to 51 months in federal prison and ordered to pay $50,075 in restitution by U.S. District Court Chief Judge J. Randal Hall after pleading guilty to one count of Conspiracy. After completion of his prison sentence, Siado must serve three years of supervised release.</p>
<p class="p2">As described in court documents and testimony, Siado admitted that he and unindicted co-conspirators hired individuals to solicit information and take DNA swabs from low-income and elderly residents. The individuals were paid $150 for each “patient,” with the information used by other conspirators to submit fraudulent claims to Medicare and Medicaid. Siado would then receive an illegal</p>
<p class="p1"><b>The Essential Resource for The Insurance Fraud Professional</b></p>
<p class="p2">Zalma’s Insurance Fraud Letter – Page 10 kickback ranging from $100 to $575 per test accepted for billing, which typically generated a claim to Medicaid of more than $30,000 each.</p>
<p class="p2">The Southern District of Georgia has now charged 30 individuals and companies as part of the nationwide crackdown on fraudulent genetic testing, and prescribing of orthotic braces and pain creams, identifying more than $1.5 billion in losses to Medicare and Medicaid.</p>
<p class="p2">Inglewood Women Plead Guilty to Running Scheme to bill Medi-Cal For Substance Abuse Counseling</p>
<p class="p2">Mesbel Mohamoud, 47, and her mother-in-law, Erlinda Abella, 66, also of Inglewood, pleaded guilty to one count of health care fraud in separate hearings before United States District Judge Philip S. Gutierrez.</p>
<p class="p2">The Inglewood, California woman and her mother-in-law, who both ran a South Los Angeles drug and alcohol abuse treatment program, each pleaded guilty today to a health care fraud charge for fraudulently submitting more than $500,000 in claims for services that did not qualify for reimbursement or were never provided.</p>
<p class="p2">Mohamoud was the owner and executive director of The New You Center Inc. (TNYC), located in the Vermont Knolls neighborhood of South Los Angeles. Abella, who co-founded TNYC with Mohamoud in 2005, was the company’s program director.</p>
<p class="p2">TNYC had contracts to provide medically necessary substance abuse treatment services through the Drug Medi-Cal program to adults and teenagers in Los Angeles County.</p>
<p class="p2">According to Mohamoud’s and Abella’s plea agreements, from January 2009 to December 2015, TNYC submitted false and fraudulent bills for counseling sessions that were not conducted at all, were not conducted at authorized locations, or did not comply with Drug Medi-Cal regulations regarding the length of sessions or the number of clients.</p>
<p class="p2">Mohamoud and Abella also allegedly caused TNYC to bill for clients who did not have a substance abuse problem, to falsify documents related to services supposedly provided to clients, and to forge client signatures on documents such as sign-in sheets.</p>
<p class="p2">For example, in September 2013, TNYC submitted a fraudulent claim for Medi-Cal reimbursement in the amount of $62.15 for a three-hour counseling session for a client on August 17, 2013 – the same day when the client was hospitalized and did not receive any counseling from TNYC.</p>
<p class="p2">In court documents, Mohamoud further admitted she knew that among the acts Abella directed TNYC counselors to engage in included enrolling clients in TNYC’s substance abuse treatment program even if the clients had used drugs or alcohol only occasionally or even just once.</p>
<p class="p2">Mohamoud and Abella admitted that TNYC submitted approximately $527,313 in false and fraudulent claims for group and individual substance abuse counseling services and was paid $260,101 on those claims.</p>
<p class="p2">Texas Physician Sentenced to Five Years for Multi-Million Medicare Fraud Scheme Yolanda Hamilton, M.D., 57, of Harris County, Texas, the physician-owner and operator of HMS Health and Wellness Center, PLLC, was sentenced by U.S. District Judge Keith P. Ellison of the Southern District of Texas. Judge Ellison also ordered the defendant to pay $9.5 million in restitution.</p>
<p class="p2">Hamilton, a Texas physician was sentenced to five years in prison November 18, 2020 for her role in a multi-million Medicare fraud scheme.</p>
<p class="p2">Hamilton was convicted by a federal jury of one count of conspiracy to commit health care fraud, one count of conspiracy to solicit and receive health care kickbacks, and two counts of false statements relating to health care matters in October 2019. According to the evidence presented at trial, from January 2012 to August 2016, Hamilton conspired with others to defraud Medicare by signing false and fraudulent home healthcare paperwork that was used to submit fraudulent claims to Medicare.</p>
<p class="p2">Hamilton and her co-conspirators made it appear that the patients qualified and received home healthcare services, when they often did not. In fact, members of the conspiracy paid the patients to receive the home healthcare services, which were often medically unnecessary, not provided, or both. The evidence also showed that Hamilton required home healthcare agencies to pay an illegal kickback, which Hamilton disguised as a “co-pay,” in exchange for Hamilton certifying and recertifying patients for home healthcare services.</p>
<p class="p2">Hamilton typically would not release the home healthcare paperwork until the home healthcare companies or their marketers paid her the kickback, the evidence showed. The scheme resulted in approximately millions in false and fraudulent claims for home-health services to Medicare and in Hamilton receiving over $300,000 in kickbacks.</p>
<p class="p2">All defendants are presumed innocent until convicted beyond a reasonable doubt in a court of law. To date, several co-conspirators including marketers, patient recruiters along with doctors, and nurses who purchased plans of care and other signed medical documents from Hamilton have been charged, found guilty, or pleaded guilty to conspiracy to commit health care fraud and/or paying or receiving kickbacks.<span class="Apple-converted-space"> </span></p>
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<title>FLAMES: AAIS Data-Driven Fire Risk Model Sparks Approval</title>
<link>https://www.insurance-advocate.com/2020/12/13/flames-aais-data-driven-fire-risk-model-sparks-approval/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Sun, 13 Dec 2020 01:55:16 +0000</pubDate>
<category><![CDATA[December 13]]></category>
<category><![CDATA[In The News]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12543</guid>
<description><![CDATA[<p>Fire Loss and Mitigation Evaluation Score (FLAMES) helps insurers predict expected fire severity more accurately AAIS (American Association of Insurance Services) has received approval from the Florida Office of Insurance Regulation for its new predictive model. The AAIS Fire Loss and Mitigation Evaluation Score (FLAMES) is a significant improvement on existing methods of quantifying expected […]</p>
The post <a href="https://www.insurance-advocate.com/2020/12/13/flames-aais-data-driven-fire-risk-model-sparks-approval/">FLAMES: AAIS Data-Driven Fire Risk Model Sparks Approval</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1">Fire Loss and Mitigation Evaluation Score (FLAMES) helps insurers predict expected fire severity more accurately AAIS (American Association of Insurance Services) has received approval from the Florida Office of Insurance Regulation for its new predictive model. The AAIS Fire Loss and Mitigation Evaluation Score (FLAMES) is a significant improvement on existing methods of quantifying expected severity of fire losses.</p>
<p class="p1">Current methods of measuring fire risk reflect fire protection capabilities within the geographic boundaries of individual fire departments, but ignore variation in capabilities and claims severity across communities. Using fire department boundaries also makes it difficult for insurers to integrate risk scores into underwriting systems and processes.</p>
<p class="p1">“Our Member carriers have expressed frustration with existing methods of assessing fire risk, which haven’t kept pace with changes in public fire protection capabilities and modern mitigation approaches,” said AAIS CEO Ed Kelly. “Our Data Engineering and Actuarial Team took a rigorous, analytical approach to solving this decades-old problem, and now insurance carriers and regulators can have a more accurate picture of fire risk.”</p>
<p class="p1">Several key principles guided the development of the FLAMES model, including the need for a more data-driven, analytical solution that is acceptable to insurance carriers, regulators, and other industry professionals. AAIS evaluated a wide range of data including National Fire Incident Reporting System (NFIRS) data, carrier claims data, weather, crime, economic activity, fire station locations, fire hydrant coverage, traffic patterns, population density, building stock characteristics, and vacancy rates, which best reflected the drivers of loss.</p>
<p class="p1">Current approaches prioritized the location of insured properties relative to fire protection resources and infrastructure. According to Matt HindsAldrich, PhD, AAIS Senior Risk Strategy Lead, “Legacy models have been overly simplistic given advancements in local fire protection. Rather than a checklist of input measures to grade individual local fire department performance, FLAMES measures outcomes in terms of severity of fire losses by ZIP code.<span class="Apple-converted-space"> </span></p>
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