continued - Mississippi

AGENT
AGENT
M I S S I S S I P P I
VOLUME 34 • NUMBER 4
FALL 2014
INSIDE THIS ISSUE:
Underwriting Performance of Leading
Insurers in Mississippi - 2013
IIAM-PAC Holds Fall Golf Outing
IIAM /IIABL Holds Eleventh Joint
Young Agents Conference
INDEPENDENT
INSURANCE
AGENTS
OF
MISSISSIPPI
800-226-3224
www.fcci-group.com
REGIONAL
PRESENCE.
INDUSTRY
EXPERTISE.
“Insurance is all about partnerships
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Ridgeland, Miss.
Now, let’s talk about your business.
General liability • Auto • Property • Crime
Workers’ compensation • Umbrella
Inland marine • Agribusiness • Surety
Coverage available in 18 states. © 2014 FCCI
MSA_14-Quaka_7x10.indd 1
10/14/14 10:02 AM
AGENT
AGENT
M I S S I S S I P P I
OFFICERS
CHAIRMAN
Scott Gray, Meridian
CHAIRMAN-ELECT
Durr Boyles, Ridgeland
VICE CHAIRMAN
Brian Berry, Centreville
TREASURER
VOLUME 34 • NUMBER 4
FALL 2014
Ray Collins, New Albany
N AT I O N A L D I R E C T O R
Shaw Johnson III, Clarksdale
EXECUTIVE COMMITEE
Tatum Brown, Oxford
DEPARTMENTS
Chairman’s Message..................................................................................5
From the Commissioner............................................................................7
Richard Mattiace, Gulfport
Ray Robertson, Ridgeland
Josh Smith, Brookhaven
Seldon Van Cleve, Indianola
Cecil Vaughan, Columbus
Pam Wilson, Ocean Springs
FEATURES
2014 Best Practices Study Update:
Dudley Wooley, Jackson
Stable But Challenging Environment.......................................................9
ELECTED DIRECTORS
News & Noteworthies.............................................................................13
Charles Crain, Byhalia
Oliver Hitt, Collins
Susan Loflin Johnston, Vicksburg
Gwen Jolly, Aberdeen
“A Rejection Form, a Rejection Form,
My Kingdom for a Rejection Form!”......................................................19
Linda Keenum, Biloxi
IIAM-PAC Fall Golf Outing Held at Dancing Rabbit..........................22
Jon Pointer, Southaven
Spring 2015 Education Calendar...........................................................24
Gray Montgomery, Hattiesburg
Seldon Van Cleve, Indianola
Cecil Vaughan, Columbus
Steven Wallace, Brandon
Pam Wilson, Pascagoula
AREA PRESIDENTS
Hugh Brown (North), Oxford
John Harless (Central), Jackson
IIAM/IIABL Hold Eleventh Joint
Young Agents Conference, August 8-10.................................................27
Underwriting Performance of
Leading Insurers in Mississippi - 2013...................................................33
Frank Bordeaux (Gulf Coast), Gulfport
Josh Smith (Southwest), Brookhaven
STAFF:
ADDRESS ALL CORRESPONDENCE TO:
Independent Insurance Agents of Mississippi
124 Riverview Drive
Flowood, MS 39232-8908
Clinton Graham, President
Lauren Hawkins, Editor
Kathy Roberts
Stephanie Spahn
INDEPENDENT
p: 601.939.9909
iiam@msagent.org
INSURANCE
AGENTS
OF
MISSISSIPPI
Strong Agencies Made Stronger
For more than 35 years Iroquois has helped
make strong, independent agencies even stronger
and more independent. And it shows.
LEADERSHIP
Iroquois recognizes some of its members who have recently played
key leadership positions within the industry:
Durr Boyles
Debbie Shempert
Hugh Brown
Josh Smith
Tatum Brown
Cecil Vaughan
Vice Chairman, IIAM
Boyles Moak Insurance Services
Young Agents Chairman & Executive Committee Member, IIAM
Brown Insurance Agency
President, North Area Association, IIAM
Brown Insurance Agency
National Director, IIAM
Renasant Insurance, Inc.
President, SW Area Assoc. & Executive Committee Member, IIAM
Smith Insurance Agency, Inc.
Executive Committee, IIAM
Galloway-Chandler-McKinney Insurance Agency LLC
Scott Gray
Chairman-Elect, IIAM
Insurance Solutions of Mississippi, Inc.
Independent agents with premium from $1 million to more than $100 million join
The Iroquois Group® for market optimization and strategies to increase their
revenue, profits and agency value—without giving up their independence.
The
®
IROQUOIS Group
To learn more about how Iroquois could further
strengthen your agency, contact Perry Grant at
(205) 910-5961 or pgrant@iroquoisgroup.com and
visit our website at www.iroquoisgroup.com
CHAIRMAN’S
MESSAGE
by Scott Gray
T
he work of an association is never finished; it is ongoing and always evolving! Since I became
president (I mean chairman), I have attended the Southwest area association meeting at Dixie
Springs, the North Mississippi area association outing at Pickwick and the IIAM-PAC Golf
Outing in Philadelphia. I am proud to report that all of these events went well! The year is not over
yet though! We still have several association classes and functions before we say goodbye to 2014.
In November we sent our third delegation of agents to Ole Miss and MSU to speak to insurance students about the opportunities the independent agency system can offer. Over the years,
IIAM has been involved with these insurance schools, and we continue to work to find new ways to
connect and engage with the students. Insurance companies have many advantages when it comes
to offering opportunities for young graduates, and we are working to make sure the independent
agencies themselves don’t miss out on the new talent offered by these soon-to-be graduates.
One of the on-going projects at IIAM is TrustedChoice.com (ProjectCAP). You are probably
aware of the Trusted Choice personal lines portal where consumers can go to find home and auto
insurance and more. I am excited to let you know that there is now a commercial lines portal as well.
Businesses can go to TrustedChoice.com to shop for the coverage they need. Sign up is easy and
is similar to the process you went through when you signed up for the personal lines portal. If you
have not started your TrustedChoice.com presence, what are you waiting for? The longer you wait
the further behind you will be. Remember, the whole idea of the portal is to compete with the direct
writers who have large numbers and budgets. If we all participate, we can greatly increase the online
presence of independent insurance agencies. The association has taken the first step by paying your
Trusted Choice dues. Now it’s your turn to go sign up for the personal and commercial lines portals.
We are also excited to be working on a new task force to discuss member benefits. We want
to be an association that meets our members’ needs and expectations. It is imperative that you take
the time to fill out the IIAM member survey each year and give us an accurate idea of what you
need and want from the association. Speak to your executive committee and board members and
let them know your suggestions and thoughts. While we currently offer more in member benefits
than ever before, there is always room for improvement!
The first annual IIAM-PAC Golf Outing in October was a great success! As with everything
we do, I must thank our staff and most importantly, our company sponsors. We raised funds for
our state PAC, which is very important for the insurance and business environment in Mississippi.
I also want to take this opportunity to remind everyone to donate to InsurPAC, our national PAC.
InsurPAC fights on our behalf at the federal level.
IIAM continues to work hard for our members and we are already well into planning for 2015.
Make sure you mark your calendar for the Agency Management Conference on February 18-19 in
Jackson, the Young Agents Baseball Outing on April 28 in Pearl, and the Annual Convention on
June 14-17 in Destin, Florida. These are all great events that you will not want to miss!
As always, if there is anything we can do for you, please let us know. I look forward to the
remainder of my year as chairman, and if I have not had the opportunity to meet you yet, I hope
I get the chance to do so soon.
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
5
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FROM THE
COMMISSIONER
by Mike Chaney
INSURANCE COMMISSIONER
I
n my article to the agents this month, I’d like to discuss several issues and upcoming events of
importance.
First, a standardized set of building codes across Mississippi will save lives, property and
money. Let’s make that clear.
When the Mississippi Insurance Department decided to support standardized codes for
buildings across our state, we did not make that decision lightly. We made this decision because all
the evidence tells us it is the right thing to do.
Most aspects of building construction––electrical wiring, heating, sanitary facilities––represent a potential hazard to building occupants and users. Although no code can eliminate all risks,
reducing risks to an acceptable level certainly helps.
In December 2011, the Insurance Institute for Building and Home Safety (IBHS) did a study
titled “Rating the States” which looked at building code enforcement in 18 coastal, hurricaneprone states. We were very startled to see that our state garnered a score of FOUR out of a possible
100, placing us at the absolute bottom of the list.
Our building code legislation is not a mandate, as some have said. Any county or municipality in the state can opt out of enacting
or enforcing building codes with a vote of the governing body spread upon their minutes, within 120 days of the effective date of the
legislation, which is Aug. 1, 2014.
Building codes WILL NOT affect landowners wanting to build a barn or a chicken house. The legislation clearly exempts nonresidential farm structures, manufactured homes, industrial manufacturing facilities in areas where they are not already regulated, utilities,
non-public fairgrounds, hunting and fishing camps and many other structures.
Next, mark your calendars for November 15, 2014 through February 15-2015 which is the Healthcare Marketplace open enrollment
period. Coverage for those who enroll during this time period will begin in 2015. Individuals may also qualify for Special Enrollment
Periods outside of Open Enrollment if they experience certain qualifying life events like marriage, birth or adoption. Consumers can find
out if they qualify for a Special Enrollment Period by starting a Marketplace application. They can find out if they qualify here: (https://
www.healthcare.gov/)
Consumers can also contact the Marketplace Call Center to apply by phone. Be sure to tell the representative if you believe you
qualify for a Special Enrollment Period. Call 1-800-318-2596 (TTY: 1-855-889-4325) 24 hours a day, 7 days a week.
Mississippi’s Small Business Health Options Program (SHOP), One, MississippiTM, is currently open for small employers with
fifty (50) or fewer employees. One, Mississippi assists qualified small employers with providing comprehensive health insurance coverage
to their employees. Currently there are eleven (11) plans available through UnitedHealthcare and over ninety (90) agents certified to
assist employers with signing up for coverage through One, Mississippi. To learn more about the valuable benefits of providing health
insurance coverage through One, Mississippi, please visit www.onemississippi.com or call 1-855-9MS-SHOP (1-855-967-7467).
During open enrollment, those looking to purchase a new Medicare Supplement policy or find out changes in Medicare coverage can get assistance from the MID MEDICARE SUPPLEMENT SHOPPERS GUIDE. The guide is available online now on the
MID website (http://www.mid.ms.gov/consumer/seniors.aspx). Printed copies may be obtained by contacting the MID CONSUMER
SERVICES DIVISION at 1-800-562-2957, or email your request to consumer@mid.ms.gov.
Finally, since this issue will be the last published before the holidays, agents need to make sure their customers are aware of the
important cooking, heating and decorating fire safety messages promoted by the department on a special page on the MID Website.
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
7
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2014 Best Practices Study Update:
STABLE BUT CHALLENGING
ENVIRONMENT
Study offers current benchmarking information
and now includes staffing statistics.
The completion of the 2014 Best Practices Study marks its
22nd anniversary. The study, first conducted 1993 and updated
every year since, provides the compiled year-end results of the
country’s top performing independent insurance agencies in six
revenue categories ranging from less than $1.25 million to more
than $25 million.
Still Good but Getting Tougher…
The 2014 Study compilations are based on 12/31/13 FYE
results, although 10% of the participating firms submitted data
based on fiscal year-ends within the first two quarters of 2014.
While agency performance remains strong, several key results
indicate a more challenging environment has emerged for the
Best Practices Agencies.
Organic growth rates, pro-forma profitability margins, and
the Rule of 20 scores were flat or fell slightly across all revenue
categories. These results reflect the continued softening of the
property-casualty market during 2013. Maintaining robust
performance levels in the near future may become more difficult
if these market conditions continue.
Growth
Last year’s study revealed the highest organic growth rates since
2008. This year’s study shows a different picture with only one study
group achieving an increased growth rate of at least one percentage
point. Nevertheless, growth rates remained in the high single digits
with two study groups achieving double digit growth rates.
Profitability
Pro-forma profit margins–the actual profitability of an agency if
non-reoccurring/extraordinary expenses and revenue, and excessive
owner compensation and perks are normalized–were also strong but
again stagnant. As revenue growth rates slowed, profit margins were
and will be under increased pressure, and are likely to result in either
no growth or negative growth in the coming year.
Pro-Forma Profit Margin
<1.25M
1.25-5M
2.5-5M
5-10M
10-25M
>25M
2013
30.3%
31.1%
27.1%
25.2%
20.1%
21.7%
2014
29.0%
30.6%
27.9%
25.1%
21.7%
19.9%
Operating profit margins grew slightly. The operating profit
is the pre-tax profit of an agency excluding supplemental income
(contingent, bonus, and investment income). P-c contingent
and life-health bonus income has historically contributed
significantly to an agency’s profit margin. Over the last decade,
however, that source of revenue has shrunk. Best Practices
Agencies focused on becoming less dependent on it by reducing
expenses, becoming more efficient and finding other sources of
revenue. As a result the operating profits continued to improve.
Operating Profit Margin
<1.25M
1.25-5M
2.5-5M
5-10M
10-25M
>25M
2013
17.4%
12.8%
10.4%
9.6%
5.9%
7.5%
2014
17.3%
13.3%
12.8%
10.1%
7.6%
7.9%
Net Revenue Organic Growth Rate (excludes acquired revenue)
<1.25M
1.25-5M
2.5-5M
5-10M
10-25M
>25M
2013
6.9%
9.1%
9.5%
8.9%
10.4%
9.2%
2014
4.6%
10.5%
7.8%
8.1%
10.8%
8.8%
The Rule of 20 scores were down this year, reflecting the
flat growth and profitability results. A score of 20 or more
indicates that an agency is maintaining a healthy balance
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
9
WHY WALK
WHEN YOU CAN SOAR?
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The Big “I” and Swiss Re Corporate Solu ons are commi ed to providing IIABA
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.
Stable But Challenging Environment
(continued)
between its efforts to grow its revenues and to sustain or enhance
its profitability. Typically, a core of 20 or more indicates that
an agency will achieve, through profit distributions and/or
stock appreciation, an industry standard rate of return on the
investments it is making in the people, systems and activities
needed to grow and operate the agency.
Last year the service staff data was changed to offer salary
ranges for the key service and sales support positions and to provide
the total number of staffing needed to support each line of business.
More information on all the Best Practices products and
resources can be found online at www.independentagent.com/
bestpractices or email bestpractices@iiaba.net with questions.
Rule of 20 Scores
Mississippi Best Practices Agencies
Participate in 2014 Study
Four Mississippi agencies participated in the 2014 Best
Practices Study. Thanks to the following agencies for their
participation in this year’s study and congratulations on your
selection as Best Practices Agencies.
Galloway-Chandler-McKinney Insurance, Columbus
Ross & Yerger Insurance, Jackson
SouthGroup Insurance & Financial Services, Ridgeland
Wellington Associates, Flowood
<1.25M
1.25-5M
2.5-5M
5-10M
10-25M
>25M
2013
23.0
24.7
23.7
21.5
21.3
20.0
2014
18.2
23.7
20.8
20.3
20.3
19.0
New for this Year
The 2014 study contains several new staffing statistics
including the number of remote worker and administrative staff
(accounting and HR). The number of workers, total payroll and
the payroll as a percentage of net revenues are included.
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© Copyright Employers Mutual Casualty Company 2014. All rights reserved.
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
11
2015
Ole Miss
Insurance
SYMPOSIUM
March 18-19
The Inn at Ole Miss
CONFIRMED SPEAKERS
Glenn Renwick
Chairman, President and CEO, Progressive Insurance
Dr. Robert P. Hartwig
President, Insurance Information Institute
Julie Rochman
President and CEO, Insurance Institute for Business and Home Safety
Joel Wood
Senior Vice President of Government Affairs, The Council of Insurance Agents and Brokers
Brian Deitz
Partner, Reagan Consulting
For more information contact:
Kathy Shoalmire @ (662) 915-2830 or kshoalmire@bus.olemiss.edu
NEWS & NOTEWORTHIES
Lemon Mohler Insurance Agency Undergoes
Major Building Renovations
Lemon Mohler
Insurance Agency is
currently renovating their
office which is probably
the oldest building still
standing in downtown
Ocean Springs. The
building was built in
1897, and Scott Lemon’s grandfather opened a furniture store
in the building in 1915. Scott’s grandfather, J.K. Lemon Jr., and
grandmother, Eleanor Lemon, remodeled the building in 1965 for
use as a realty and insurance office, and Scott’s father, Brad, along
with partner Mark Mohler, renovated the second floor in two
phases from 1998 to 2000. Lemon Mohler’s Ocean Springs office is
temporarily located at 434 Porter Avenue until the renovations are
complete in January or February of 2015.
AmFed Announces New Director of Marketing
AmFed is proud to announce Michele Harris has joined the
company as Director of Marketing. Michele comes with a wealth
of experience within the industry that will help sustain and build
upon the growth AmFed has experienced in recent years.
Michele comments “I am fortunate to be joining such a respected
company that prides itself on being the leading provider of insurance
solutions, I look forward to being a part of the AmFed family.”
AmFed, a Mississippi –domiciled company, is a regional
workers’ compensation insurer as well as provides risk
management options through our Third Party Administration
division in addition to offering Excess & Surplus insurance
through our Managing General Agency.
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National Security has provided competitive, affordable insurance to policyholders for over 50 years,
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Elba, Alabama
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
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NEWS & NOTEWORTHIES
Jay Mooney announced as Territory
Manager of the Year for Liberty Mutual
Insurance
Jay Mooney, Territory Manager of
Mississippi, has been announced as the 2013
Territory Manager of the Year for the Southeast
Region of Business Insurance.
Jay graduated from Mississippi College with
a Bachelor of Science in Business Administration in
2006 and a Masters in Business Administration in 2008.
Founded in 1912 Boston-based Liberty Mutual Insurance
is currently ranked 76th on the Fortune 100 list of largest
companies in the U.S. based on 2013 revenue. Liberty Mutual
provides a full range of commercial lines products and services
for large, mid-sized and small commercial customers. Liberty
Mutual employs more than 50,000 people in approximately
900 offices throughout the world. For a full description of the
Company’s business operations, products and distribution
channels, please visit Liberty Mutual’s Investor Relations web
site at www.libertymutual.com/investors
(continued)
LUBA Sponsors Business Women Luncheon
LUBA Workers’ Comp served
as co-sponsor of Mississippi
Business Journal’s “50 Leading
Business Women in Mississippi”
luncheon. Pictured, from left, are
Diane Coleman of Ross & Yerger
Insurance, and Katie Crochet and
Debbie Lowe with LUBA. The
luncheon honors the state’s most
influential women in the business community.
Customer Service Representative of the Year
Awarded to IIAM Member
The ACSR of the Year Award is
presented annually and honors the
outstanding professional achievements of
an ACSR designation holder. The winner
of this year’s national award was Ruth of
Insurance & Risk Managers in McComb.
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M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
15
NEWS & NOTEWORTHIES
AssuredPartners Holds Ribbon Cutting for
New Office
AssuredPartners, Inc.,
formerly Hancock Insurance
Agency, recently held a Ribbon
Cutting and Open House
for their new office located at
6798 US Hwy. 98 West, Suite
20 in Hattiesburg. The event was attended by their associates,
clients and company partners.
IIAM Members Attend CPCU Society Meeting
The annual CPCU
Society Meeting was held
on September 20-23 2014 in
Anaheim, California. The local
CPCU Chapter, Mississippi
Magnolia CPCU Society Chapter, had several participants at
the Annual Meeting. The guest speaker was Earvin “Magic”
Johnson, who is prominently known for his 13 season NBA
(continued)
career, but has also made a name for himself by helping build
communities through economic development. Pictured are:
Preston Gough, III, Cheri Stribling, Magic Johnson, Scot
Catington, and Nathan Vancil.
CPCU Raises Funds for Batson Children’s
Hospital
The MS Magnolia CPCU
Chapter raises money for the
Batson Children’s Hospital each
year at Christmas along with
the donation from winning
“The Magical Ways We Transform Lives” contest through the
National CPCU Society. The hospital uses the money to buy
gifts for the children. Santa delivers the gifts to children in the
hospital during Christmas. Our Chapter has supported the
Children’s Hospital since the late 1980’s.
Pictured are Matthew Johnson, Dr. TiShawn Thames,
Pepper Weed-Cooper, Cheri Stribling, Jerry Horner, Donna
Glover, Scott Catington, and Jay Thames.
Please judge us by the company we keep!
Berkshire Hathaway Group
We are proud of our parentage (and our cousins!)
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To learn more about agency appointments
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M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
17
NOT THINKING
ABOUT OUR WORKERS’ COMP
Luckily, it gets LUBA’s undivided attention.
888.884.5822 • LUBAwc.com
Rated A- Excellent by A.M. Best.
“A Rejection Form, a Rejection Form,
My Kingdom for a Rejection Form!”
A cautionary tale with apologies to William Shakespeare
By Richard F. Lund, JD
I
n his play “Richard III”, William Shakespeare relates the tale
of King Richard III in which Richard is unhorsed on the battle
field at the most crucial moment. In a desperate attempt to
save himself, he cries out: “A horse, a horse, my kingdom for
a horse!” Unfortunately for Richard, no horse is delivered and
Henry dispatches him, succeeds to the throne as Henry VII and
marries Princess Elizabeth of the House of York.
This very famous story highlights how one asset can be the
most important factor in determining the success or failure of
a person, especially when timing is critical. For Richard, it was
his horse. For you as an insurance agent, while not as noble or
glamorous, it can be the coverage rejection form. While certainly
an agent won’t lose his life without this form, the financial impact
can be devastating. And to the contrary, if such a form is in
obtained, not only may it save the day, it may also be financially
rewarding if you are insured by Swiss Re Corporate Solutions.
A case in point: In 2011, an agent was retained to procure
personal auto liability and umbrella coverage on behalf of his
customer. The policy had UIM limits of $250,000/ $500,000
aggregate and an accompanying umbrella policy had a $1MM
limit. At that time, according to the agent, the customer signed
a UM/UIM rejection form for the umbrella policy. Under this
particular state law, an applicant must execute a signed UIM
waiver form during the application process in order to waive
UIM coverage under an umbrella policy. Additionally, the agency
agreement with the insurance carrier expressly stipulated that
the agency retain for the period specified in the underwriting
requirements, all original, signed applications, driver exclusions,
selections and rejections of optional coverage, premium discount
documents, vehicle inspection reports, and power of attorney.
After the primary and umbrella policies were issued, the customer
was involved in a serious accident that resulted in a significant brain
injury. The claimant sought the full $1MM umbrella limit from the
carrier. (Notably under the law of the state, if an insurer fails to pay a first
party UIM claim within thirty days, it may be subject to the assessment
of double damages). The carrier contacted the agency to determine if
any such waiver existed and after a thorough search, none was found.
The carrier was required to pay the $1MM limit of the umbrella policy
and then tendered a $1MM policy limit indemnification demand
against the agency. Due to the agency’s inability to locate the waiver and
the language of the agency agreement, the claim was paid.
There are two key points to remember from this tale: the first
is to always read your agency agreements thoroughly and be fully
aware of their terms. The explicit language of the agreement was
that it was the agency’s duty to retain copies of certain documents
and in particular to this case, the waiver of coverage form. Therefore,
liability for indemnity to the carrier was absolute. Had the agency
read and understood this provision, perhaps better care would have
been taken to ensure that the document was retained. When you
are presented with any written agreement that you must sign in
order to be able to do business with a company, be sure to read the
document thoroughly and if you have questions concerning the
provisions, consult with your own attorney to review and advise you
of any provisions you may not understand. In many instances, some
provisions may be negotiated if you or your attorney do not believe
they properly state or protect your interests.
The second key point is to properly document and retain
rejections of coverages. Offers of higher limits can, and would have in
this case, prevented a significant exposure in which a claim was later
made as it related to the coverage limit. And, if you are insured under
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
19
A Rejection Form, a Rejection form...
(continued)
a policy issued by Swiss Re Corporate Solutions/Westport Insurance
Corporation, you may reap a financial benefit. Under the Deductible
Reduction feature of the policy, if an insured agency generates and
maintains contemporaneous written documentation of a customer’s
refusal to accept any type of coverage or limit recommendation made
by the agency, and there is subsequently a claim alleging a failure to
secure such recommended type of coverage or limit, then 50% of the
deductible relating to that claim will be waived
up to a maximum of $12,500, or until dismissal
of the allegations, whichever is first. For example,
in the case above, if the agency had the signed
waiver in its file, and an action was brought against
the agency and costs were incurred, the agency
would have been responsible for only 50% of their
deductible. Had the deductible been $10,000 for
example, the agency would have saved $5,000,
perhaps enough to buy a horse!
For more information about how to
properly document your files, go to www.iiaba.
net/eohappens and look under “Prevention
Tools”. To learn more about the coverages that
you should be offering to your customers, look
for the “Virtual Risk Consultant” as well.
Hopefully this has given you a little help
so that when you are on the battlefield in your
everyday business, you won’t end up like Richard
III crying out “A rejection form, a rejection form,
my kingdom for a rejection form!”
*Richard F. Lund, JD, is a Vice President and Senior
Underwriter of Swiss Re/Westport, underwriting insurance agents
errors and omissions coverage. He has also been an insurance agents
E&O claims counsel and has written and presented numerous E&O
risk management/ loss control seminars, mock trials and articles
nationwide since 1992.
Copyright 2013 Swiss Re
Stability. Longevity.
This article is intended to be used for general
informational purposes only and is not to be relied
upon or used for any particular purpose. Swiss Re shall
not be held responsible in any way for, and specifically
disclaims any liability arising out of or in any way
connected to, reliance on or use of any of the information
contained or referenced in this article. The information
contained or referenced in this article is not intended to
constitute and should not be considered legal, accounting
or professional advice, nor shall it serve as a substitute
for the recipient obtaining such advice. The views
expressed in this article do not necessarily represent the
views of the Swiss Re Group (“Swiss Re”) and/or its
subsidiaries and/or management and/or shareholders.
20
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
Integrity
I IAM IIAM-PAC Fall Golf Outing
PAC
Held at Dancing Rabbit
A
gents from across the state traveled to the Dancing
Rabbit Golf Course at the Pearl River Resort in
Choctaw, MS, for the first annual IIAM-PAC
Fall Golf Outing on October 16, 2014. Following the golf
tournament, agents and company representatives gathered that
evening for a reception and dinner.
IIAM would like to say a special thanks to FCCI Insurance
Group for being our Event Sponsor, Mathison Insurance
Partners for sponsoring the registration refreshments, LUBA
Workers’ Comp for sponsoring the beverage carts, and Safeco
Insurance for sponsoring the dinner cocktails.
IIAM also appreciates the support of the following hole sponsors:
Beasley General Agency; Berkley Southeast Insurance Group; Brown
& Riding; Dixie Specialty; Eastern Alliance Insurance Group; EMC
Insurance Companies; FCCI Insurance Group; Imperial PFS; Liberty
Mutual Insurance Company; Progressive Insurance; Safeway Insurance
22
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
Company; Selective Insurance Company of America; Small & Rural
Services, Inc.; State Auto; Summit Consulting; The Gulf Agency; TPI
– Tim Parkman, Inc.; and United Fire Group.
Other contributors included: Amerisafe; Anchor Managing
General Agency/Sentry Insurance; Beasley General Agency;
CNA Insurance; Dixie Specialty; Eastern Alliance Insurance
Group; Harold Cross; Liberty Mutual Insurance Company;
Safeco Insurance; Small & Rural Services, Inc.; Southern Cross
Underwriters; Stonetrust Commercial Insurance Company;
Travelers Insurance; and Zurich North America.
Our first place team (pictured bottom left) was: Jacob Clark,
Billy Roberts, Michelle Harris, Harold Cross and Daniel Coleman.
Our second place team was: Chris Brantley, Cary Breedlove,
Jim Matthews and William Jackson.
Our third place team was: Ben Hailey, Mark Koonce,
Michael Lee and Jeff Young.
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
23
Independent Insurance Agents of Mississippi
Spring 2015 Education Calendar
View up-to-date calendar and course descriptions and register online at www.msagent.org
January
Jan. 13 - NFIP Program Changes - Gregg Porter - Oxford
Jan. 14 - NFIP Program Changes - Gregg Porter - Flowood
Jan. 15 - NFIP Program Changes - Gregg Porter - Gulfport
February
Feb. 18-19 - Agency Management Conference - Steve Anderson & Industry Speakers Jackson
March
Mar. 16 - The Truth About EPLI - Angie Heavener - Oxford
Mar. 17 - The Truth About EPLI - Angie Heavener - Flowood
Mar. 18 - E&O Risk Management/Ethics - Angie Heavener - Flowood
Mar. 19 - The Truth About EPLI- Angie Heavener - Hattiesburg
April
Apr. 9 - Professional Development (ACSR 5) - Ray Dixon - Flowood
May
May 12 - Boomers and Their Issues (a.m.) - Lisa Worley - Hattiesburg
May 12 - Coping with a Hardening Market (p.m.) - Lisa Worley - Hattiesburg
May 13 - Boomers and Their Issues (a.m.) - Lisa Worley - Flowood
May 13 - Coping with a Hardening Market (p.m.) - Lisa Worley - Flowood
May 14 - Boomers and Their Issues (a.m.) - Lisa Worley - Oxford
May 14 - Coping with a Hardening Market (p.m.) - Lisa Worley - Oxford
Can’t make it to a classroom course? Sign up today for an ABEN Webcast at
iiam.aben.tv. ABEN Webcasts offer the quality of a classroom course and the
convenience of an online course. There is no test required!
IIAM-PAC Fall Golf Outing
(continued)
Thanks to Our Sponsors
EVENT SPONSOR
BEVERAGE CART SPONSOR
LUBA WORKERS’ COMP
REGISTRATION
REFRESHMENTS SPONSOR
FCCI INSURANCE GROUP
HOLE SPONSORS
Berkley
rance
Southeast Insu
Group
ley
Beaseral
n
Ge cy
Agen
n
Easter Insurance
e
Allianc
p
u
Gro
PFS
erial
Imp
it
Summ lting
u
s
n
o
C
EMC Insurance
Companies
Libertyl Insurance
Mutua any
Comp
e
Selectiv ce Company
n
a
r
u
Ins ica
of Amer
&
Brown
g
in
Rid
FCCI
Insurance
Group
MATHISON INSURANCE
PARTNERS, INC.
y
Safewaance
r
u
s
In any
Comp
ssive
Progre nce
a
r
Insu
Small & Rural
Services, Inc.
The Gulf
Agency
Dixie
Specialty
COCKTAILS SPONSOR
State Auto
TPI – man,
Tim Park
Inc.
United p
Fire Grou
SAFECO INSURANCE
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
25
SIMPLE SOLUTIONS
TO ATTRACT AND
RETAIN CUSTOMERS.
Karen Bailo
GM, Agency Sales
and Distribution
Learn how Progressive leads the independent agent market in awareness, consideration, savings, and customer service*.
To view our product offerings and to become a Progressive appointed agent, visit ProgressiveAgent.com.
Progressive Casualty Ins. Co. & affiliates. *Source: Millward Brown monthly brand tracking study, Q4 2012. 13A00200.B (03/13)
IIAM/IIABL Hold Eleventh Joint Young
Agents Conference, August 8-10
T
he Independent Insurance Agents of Mississippi
and the Independent Insurance Agents & Brokers
of Louisiana recently held the eleventh joint Young
Agents Conference, August 8-10, at the Ritz Carlton in
New Orleans. There was a great crowd this year for the
joint conference where attendees enjoyed a weekend of
continuing education and networking.
Following a golf outing on Thursday, the conference
itself began on Friday afternoon as Young Agents
gathered for a continuing education presentation by Ed
Lamont. Following the education session, young agents
engaged in roundtable discussions hosted by IIAM
and IIABL Executive Committee members. The night
ended with a Welcome Reception.
Young Agents and company representatives had a
chance to earn three more hours of continuing education
on Saturday afternoon with a second presentation by
Ed. After Ed’s presentation, agents enjoyed lunch and
had the opportunity to visit with sponsoring companies
at the “Meet the Sponsors” luncheon. To wrap up the
conference, attendees gathered for one more reception
Saturday night.
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
27
IIAM/IIABL YOUNG AGENTS CONFERENCE
(continued)
3281 Summit Ad
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M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
Service is our specialty; protecting you is our mission ®
960 Holmdel Road, Holmdel, NJ 07733
IIAM/IIABL YOUNG AGENTS CONFERENCE
(continued)
IIAM and IIABL extend a special thanks to the following
companies whose contributions helped make this joint
Young Agents Conference a huge success:
PLATINUM SPONSORS ($1000)
Amerisafe, Inc.
AmWins/Gresham
Assurant Specialty Property
Berkley Southeast
LWCC
Progressive
GOLD SPONSORS ($750)
Access Home
Bailey Special Risks, Inc.
Mathison Insurance Partners, Inc.
Strata Underwriting Managers
Our primary goal has been to provide the best of service to the
specialty lines insurance marketplace. Understanding the
needs and providing rapid response to the independent agent
has been and remains our number one priority.
For Transportation visit www.insurewithnai.com
Garage
General Liability
Property
Transportation
Premium Finance
Liquor Liability
For quick quotes call or visit us on the web
1-800-824-1740 or www.nai1982.com
SILVER SPONSORS ($500)
Anchor MGA/Sentry
LCI Workers Comp
Insurance
LCTA
Berkshire Hathaway
LUBA
Guard Insurance Co.
Midlands Management
Burns & Wilcox
Republic
Centauri Specialty
Southern
Cross/TAPCO
Insurance Co.
Stonetrust Commercial
Dixie Specialty Insurance
Insurance Co.
Gray Insurance
United Fire Group
LA Restaurant SIF
Wright Flood
BRONZE SPONSORS ($250)
Lane & Assoc
Accu-Auto
Lighthouse Property
Americas Insurance
Maison Insurance
ASI
Markel First Comp
Bankers Insurance
McGowan Risk Specialists
Builders Mutual Insurance
MMA Insurance Services
CNA Insurance
Patriot National
EMC
RPS Covington
Encompass
Safehold Special Risk
FCCI
Selective Insurance
Forest Insurance Facilities
Company
Guarantee Service Team
Socius Insurance
Gulfstream
Summit
Consulting
Homebuilders SIF
Travelers
Insurance
Imperial PFS
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
29
we have
a new
name
along with a new
look, and all the
same great
solutions you’ve
come to expect
Effective January 1st Union Standard Insurance Group in Mississippi is now Berkley Southeast Insurance Group
Berkley Southeast Insurance Group (BSIG) is a member company of W. R. Berkley Corporation, a Fortune 500
Company, whose insurance company subsidiaries are rated A+ (Superior) by A. M. Best Company.
A
M
BEST
Our independent agents and policyholders can expect to continue to receive the same outstanding
products, services and solutions, as our staff remains unchanged.
Jeffrey Carver, Regional Vice President, continues to lead our staff at the local branch office at
4909 Great River Drive, Meridian, MS 39305.
BSIG takes a broad approach to underwriting for ‘best in class’ business primarily in the construction, light
manufacturing, hospitality, real estate, mercantile, wholesale and business service industries. At Berkley Southeast
Insurance Group we have local people finding practical solutions…. for our agents and policyholders.
For additional information please contact:
Jeffrey Carver at jcarver@berkleysig.com | 601.581.4134
berkleysig.com
local people finding practical solutions
AGENCY MANAGEMENT
CONFERENCE
February 18-19, 2015
The Independent Insurance Agents of Mississippi will host our annual Agency Management
Conference February 18-19, 2015, at the Jackson Country Club.
This year’s continuing education seminars will feature Steve Anderson as well as other industry
leaders. This conference also provides valuable networking opportunities with company
representatives at the “Meet the Companies” reception, an update on legislative issues
affecting the insurance industry, and an overview of association activities.
To register, go to www.msagent.org.
e
v
Sa e
IIAM’S
th e:
t
ANNUAL CONVE
a
D
NT
I
O
N
AND TRADE SHO
W
June 14-17, 2015
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
31
Underwriting Performance of
Leading Insurers in Mississippi - 2013
Todd G. Griffith, Ph.D. Student
Dr. Andre P. Liebenberg, Robertson Chair of Insurance
The University of Mississippi
2013 was a very good year for the U.S. property-liability
insurance industry as net income after taxes almost doubled since
2012. The industry’s strong financial performance was largely due
to a welcome return to underwriting profitability as a result of
continued premium growth accompanied by significantly lower
catastrophe losses. The overall effect of this increased profitability
was a record level of industry capitalization as policyholder surplus
increased by over 10% to roughly $650 billion.
To what extent did the Mississippi insurance market’s
underwriting performance parallel that of the aggregate U.S.
insurance industry? Which lines and insurers performed best and
Line
exhibited the most growth? Who are the leading carriers in the
Mississippi market and how has the composition of leading insurers
changed over the past year? In the remainder of this article, we
examine data from the NAIC to provide answers to these questions.
Overview of Industry Underwriting
Performance in 2013
Premium growth in Mississippi was analogous to the national
market, as direct premiums written increased by 5.2% since 2012
for the 14 major P/C lines reported in Table 1. We report an
increase in direct premiums written for 11 of the 14 lines, with the
Table 1
Totals by Underwriting Line in Mississippi - 2013
Direct Premiums
Written (000s)
2011
2012
2013
2011
Adjusted
Loss Ratio (%)
Personal Auto Liability
769,381
802,363
839,234
% Change
2012-13
4.6%
2012
2013
Net Change
2012-13
1.4
65.1
63.7
65.1
Homeowners
801,259
841,932
890,363
5.8%
67.5
44.6
79.4
34.8
Personal Auto Physical Damage
613,263
634,457
666,430
5.0%
61.3
58.3
97.2
38.8
Workers Compensation
270,822
298,388
325,884
9.2%
66.8
60.0
50.9
-9.1
Other Liability*
273,361
280,518
302,169
7.7%
64.0
44.6
37.6
-7.0
Commercial Auto Liability
193,823
203,047
221,498
9.1%
61.0
62.5
62.1
-0.4
Commercial Multi-Peril (Non-liab)
210,547
227,148
235,672
3.8%
53.3
36.6
133.9
97.3
Fire
137,708
135,358
142,481
5.3%
51.5
37.7
82.7
45.1
Allied Lines
123,928
130,590
128,724
-1.4%
78.9
35.2
232.5
197.3
Inland Marine
127,627
144,174
149,910
4.0%
53.5
32.2
34.7
2.5
Commercial Multi-Peril (Liability)
82,996
89,148
94,277
5.8%
40.2
29.6
38.9
9.3
Medical Malpractice**
83,789
75,562
75,270
-0.4%
21.0
22.0
20.3
-1.7
Commercial Auto Physical Dam.
60,738
67,192
72,890
8.5%
66.8
58.4
92.6
34.2
65.0
50.5
70.2
19.6
Group Accident and Health**
Total
34,956
41,354
33,355
-19.3%
3,784,196
3,971,232
4,178,157
5.2%
*Value in last year’s article for 2012 is incorrect - the correct value is reported here. ** Irregularities reported
Figure 1
Direct Premiums Written
2006-2013
Direct Premiums Written (000s)
4,100,000
4,000,000
3,900,000
3,800,000
3,700,000
3,600,000
3,500,000
2006
2007
2008
2009
2010
2011
2012
2013
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
33
highest growth experienced in Workers’ Compensation (9.2%) and
Commercial Auto Liability (9.1%). Premium growth in Workers’
Compensation during 2013 reflects the continued hardening
of this line combined with sustained economic recovery. The
strong growth in Commercial Auto Liability marks the second
consecutive year of premium increases following 5 consecutive
years of reductions. Turning our attention to underwriting
profitability, the vast majority of P/C lines experienced worsening
of loss ratios. Two notable exceptions are Workers’ Compensation
and Other Liability which incurred 9.1 cents and 7 cents less in
claims per dollar of premium written, respectively.
Leading Carriers for All Lines
and Underwriting Performance
Table 2 and Figure 1 report the top 15 insurance carriers
as ranked by direct premiums written in Mississippi for yearend 2013. Once again State Farm is the top-ranked writer of
Mississippi business, as its market share exceeded 15% for the
Table 2
Performance of Top Fifteen Insurers in Mississippi - 2013
All Underwriting Lines
Market Share
Direct Premiums
Adjusted Loss
Insurer
(%)
Written (000s)
Ratio (%)
STATE FARM GRP
15.2
697,701
83.5
SOUTHERN FARM BUREAU
8.7
396,907
69.3
ALLSTATE
5.6
256,380
68.6
LIBERTY MUTUAL
5.1
233,806
67.2
NATIONWIDE
5.1
232,881
87.5
TRAVELERS
4.5
208,329
58.2
PROGRESSIVE GRP
3.9
177,762
77.8
ZURICH
2.6
118,882
61.7
USAA
2.4
111,316
82.6
AIG
2.4
110,548
29.6
BERKSHIRE HATHAWAY
2.3
107,079
70.5
GUIDEONE INS GRP
2.1
98,085
128.0
ALFA
1.8
84,607
92.8
Farmers
1.7
79,778
74.9
WR BERKLEY CORP GRP
1.7
78,740
66.9
Figure 2
2013 Top Performers’
Premium and Losses
Direct Premiums Written
(000s)
Losses Incurred
(000s)
700000
600000
500000
400000
300000
200000
34
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
BE
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fourth year in a row and its DPW increased by approximately
5% from 2012. Most of the top-15 insurers on our list increased
their books in 2013, with the exception of Alfa, which decreased
DPW by roughly 2.4%. The most impressive premium growth
was by Berkshire Hathaway (16.05%) and Nationwide (11.53%).
The ranking of the top 15 insurers is similar to 2012, with four
exceptions. Liberty Mutual jumped Nationwide for the 4th
position. USAA inched past AIG for the 9th spot and Farmers
dropped two spots to the 14th position. Finally, CNA exited the
list, while GuideOne entered the ranking – capturing the 12th
position.
On average, the top 15 insurers in Mississippi experienced
deteriorating underwriting profitability in 2013. More specifically,
the average loss ratio climbed substantially to 74.6% relative to
51.2% in 2012. The majority of the top carriers experienced a
less profitable year compared to 2012, with the exception of AIG
whose conservative underwriting yielded a loss ratio of 29.6%.
Non-Auto Personal Lines
Fire
As reported in Table 3, Farmers is the new leader in the fire
line, surpassing Assurant. Farmers increased its market share by
Table 3
Top Ten Insurers in Mississippi - 2013
Non-Auto Personal Lines
Insurer
Market Share (%)
2011
2012
2013
Farmers
6.0
8.1
Assurant
8.5
9.8
Southern Farm B.
7.2
Liberty Mutaul
Direct Premiums
Written (000s)
Adjusted
Loss Ratio (%)
2011
2012
2013
2011
2012
2013
9.5
8,267
10,962
13,539
73.3
43.9
78.0
7.6
11,692
13,230
10,861
34.6
25.1
19.2
7.2
7.5
9,897
9,695
10,678
74.4
57.4
53.7
5.7
5.7
5.7
7,796
7,770
8,093
23.1
30.5
114.2
AIG
9.0
6.1
4.4
12,428
8,257
6,284
-2.6
19.9
0.3
Travelers Grp
4.7
4.9
4.3
6,463
6,653
6,083
115.8
1.4
1.5
XL Amer Grp
0.5
1.0
3.8
721
1,414
5,426
23.4
164.2
17.7
Kemper
3.7
3.8
3.5
5,118
5,162
5,034
62.3
43.5
39.0
FM Global Grp
3.8
4.0
3.5
5,300
5,430
4,980
20.0
20.1
88.4
Zurich
2.8
3.3
3.4
3,860
4,412
4,913
101.2
-74.0
13.6
FIRE
ALLIED LINES
Southern Farm B.
8.8
8.2
9.0
10,963
10,725
11,575
98.2
37.9
60.0
FM Global
5.8
7.1
7.1
7,222
9,285
9,153
46.1
25.6
2290.0
Assurant Inc Grp
4.0
4.2
6.3
4,907
5,420
8,140
85.1
81.6
136.6
Alleghany Grp
6.2
5.9
5.9
7,728
7,695
7,589
13.1
36.5
114.5
QBE Ins grp
3.9
5.9
5.7
4,778
7,704
7,302
26.5
3.5
16.8
Ace Ltd Grp
7.4
5.2
5.5
9,175
6,821
7,058
9.2
-33.0
6.3
Travelers Grp
4.8
4.2
4.2
5,908
5,494
5,407
188.3
-21.1
134.7
Zurich
4.0
4.8
4.0
4,918
6,315
5,140
41.4
-0.7
6.6
Axis Capital Grp
2.5
3.5
3.8
3,074
4,556
4,897
29.4
29.3
50.2
Nationwide
3.3
3.5
3.7
4,090
4,625
4,826
66.6
57.3
84.4
State Farm
26.7
26.9
27.2
214,277
226,633
242,370
64.6
45.4
80.1
Southern Farm B.
16.8
17.3
17.5
134,233
145,658
155,570
82.7
54.0
67.4
Allstate
11.2
10.8
10.9
89,741
91,092
97,053
59.4
39.0
69.2
Nationwide
8.7
8.5
8.3
70,011
71,228
73,562
48.2
53.2
92.0
Liberty Mutual
4.6
4.9
5.6
37,079
41,298
50,224
80.4
46.7
88.7
Farmers
5.6
5.4
4.4
44,798
45,795
38,744
75.1
46.5
77.6
USAA
3.2
3.4
3.7
25,367
28,828
33,321
67.5
-31.1
73.8
ALFA
3.0
2.9
2.7
24,010
24,086
24,406
80.1
53.8
108.4
Travelers Grp
2.7
2.7
2.6
21,887
22,371
23,475
74.4
42.0
90.1
MetLife Inc.
2.6
2.6
2.6
21,042
21,907
23,365
60.7
43.6
95.2
HOMEOWNERS
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
35
1.4 percentage points to capture 9.5% of the market’s DPW. Of
the four other insurers that expanded their fire books in 2013, XL
captured a spot on our top ten ranking by almost quadrupling its
DPW. Among the 5 carriers on our ranking that decreased their
market share, AIG led the way with a decrease in DPW of roughly
24%. Assurant, Travelers, FM Global, and Kemper similarly
decreased their DPW by 18%, 9%, 8.3% and 2.5%, respectively.
There was substantial shuffling amongst the top fire line writers
from the 2012 list to 2013. As mentioned previously, notable
movers were XL (who entered in the 7th position) and Munich
Re (who dropped out of the top-10 ranking). Adjusted loss ratios
for the group generally fell below 80%, with the exception of
Liberty Mutual (114.2%) and Travelers (88.4%).
Allied Lines
Southern Farm Bureau remained at the top of the list
capturing a 9% market share and increasing DPW by roughly
8%. As in the fire line, we report that half of the top insurers
increased direct premiums while the other half reduced DPW.
Among the five insurers that increased direct premiums, Assurant
witnessed the most remarkable growth at 50.2%. As a result,
Assurant climbed to the 3rd position on our list, while the top two
insurers retained their position. Of the 5 insurers that reduced
their allied lines books, Zurich and QBE experienced the greatest
reduction in DPW; by 19% and 5%, respectively. The average
loss ratio for the top 10 allied lines writers was roughly 290%
but the range in individual company loss ratios was substantial
with FM Global (2,290%) and ACE (6.3%) at opposite ends of
the loss ratio spectrum. FM Global’s catastrophic direct losses
incurred (of roughly $200 million) was sustained by subsidiaries
Factory Mutual Insurance Company and Affiliated FM Insurance
Company – likely as a result of the severe hail storm that hit the
Jackson area on March 18.
Homeowners
The ranking of leading homeowners’ insurers is almost
identical to 2012 as 8 of the 10 largest writers retained their
respective positions on the list. Liberty Mutual and Farmers
swapped places at the 5th and 6th positions. Farmers was the
only insurer to reduce its homeowners’ book in 2013, writing
15% less premium than in 2012. The remaining 9 insurers
grew their homeowner books, with a range of premium growth
between 1.3% and 15.6%. State Farm maintained the top spot
as it increased its market share marginally to 27.2% by growing
its DPW by approximately 7%. MetLife rounds out the list once
again by maintaining its market share at 2.6%. From Table 1, we
report that while homeowners’ premiums grew in 2013 by 5.8%,
profitability continues to worsen as the average loss ratio for this
“When it happens in the territory-give CAC a call.”
LOCATIONS SERVICING MISSISSIPPI:
•Greenville •McComb •Mobile
•Jackson •Memphis •Tupelo
•Hattiesburg
CLAIMS FAX HOTLINE: 866-455-1777
EMAIL CLAIMS TO: cac@centraladjustment.com
PO Box 25068 • Little Rock, AR 72221 • Ph: 888-227-5506 • Fx: 866-455-1777
36
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
line reached 79.4%. We show that USAA witnessed the most
significant decrease in profitability in this line, as its loss ratio
increased from -31.1% to 73.8%. The worsening of the loss ratio
for this line is to be expected given that the March 18 hail storm
generated over 50,000 homeowners and auto claims and resulted
in total claims payments of over $500 million.
Personal Auto Lines
Auto Liability
greatest premium growth at 20.8% and 4.6%, respectively. Of the
two carriers that decreased their writings in this line, Alfa was the
sole insurer to significantly shrink its book as its DPW decreased
by 5.6%. Southern Farm Bureau wrote almost the same amount
in 2013 as it did in 2012, only decreasing its DPW by a mere
0.1%. Adjusted loss ratios remained below 70% for most of the
leading insurers.
Auto Physical Damage
For the second straight year, premiums in this line increased
marginally. The ranking of the top-10 auto liability writers in
2013 is almost identical to that of 2012. Geico switched places
with Nationwide by capturing the 5th position on the list, while
the remaining eight insurers retained their respective positions.
Eight of the top-10 insurers also reported increased premiums
written, with Liberty Mutual and Allstate experiencing the
Similar to the experience of the auto liability line, the auto
physical damage line saw marginal growth in premium volume in
2013. However, as is apparent in Table 1, underwriting profitability
in this line saw a significant decrease as the average adjusted loss
ratio for Mississippi insurers rose by almost 40 percentage points
– largely as a result of the March 18 hail storm losses. The top-10
rankings were identical to 2012, with State Farm maintaining its
Table 4
Top Ten Insurers in Mississippi - 2013
Auto Personal Lines
Insurer
Market Share (%)
2011
Direct Premiums
Written (000s)
2012
2013
2011
2012
2013
Adjusted
Loss Ratio (%)
2011
2012
2013
PERSONAL AUTO LIABILITY
State Farm
25.6
25.8
25.8
196,976
206,848
216,355
69.6
60.7
69.0
Southern Farm B.
12.7
12.8
12.2
97,333
102,711
102,576
68.8
72.3
69.2
Progressive
11.1
10.7
10.6
85,037
85,717
89,010
55.3
60.2
65.1
Allstate
8.0
8.3
9.0
61,659
66,537
75,734
70.5
71.9
60.1
Berkshire Hathaway
5.5
5.6
5.8
42,532
45,318
48,877
70.9
67.0
63.5
Nationwide
5.7
5.7
5.8
44,125
45,504
48,307
52.0
52.7
50.4
USAA
4.4
4.5
4.5
34,026
36,046
37,994
79.9
65.9
87.9
ALFA
4.0
4.1
3.7
31,116
32,586
30,753
65.3
66.3
65.6
Liberty Mutual
3.0
3.2
3.6
22,815
25,332
30,599
53.2
47.8
53.0
Shelter
2.8
2.8
2.8
21,452
22,808
23,904
67.2
60.6
63.9
112.7
PERSONAL AUTO PHYSICAL DAMAGE
State Farm
26.4
26.5
26.3
161,904
167,831
175,476
71.3
66.9
Southern Farm B.
13.4
13.1
12.9
82,053
83,128
86,026
64.6
56.5
83.1
Allstate
11.1
10.8
10.4
67,788
68,701
69,073
45.4
43.7
83.4
Progressive
8.5
8.7
9.0
52,345
55,151
59,742
65.2
64.4
103.7
Berkshire Hathaway
4.9
5.2
5.4
29,876
33,209
36,213
64.6
64.3
100.1
101.7
Nationwide
5.0
5.1
5.2
30,684
32,268
34,659
50.8
52.0
USAA
4.5
4.6
4.8
27,391
29,472
31,656
64.3
66.7
94.8
ALFA Ins Grp
4.0
3.9
3.7
24,741
24,970
24,470
66.0
61.1
109.7
Liberty Mutual
2.9
3.0
3.6
17,974
19,340
24,323
52.9
46.6
84.5
Shelter
2.4
2.4
2.4
14,961
15,173
16,087
61.1
55.5
116.2
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
37
strong presence in this line, with a market share of 26.3%. The ten
insurers including on this list capture roughly 84% of the market
share in auto physical damage in the Mississippi market. Nine of
the top ten insurers in this line increase their DPW from the year
before. Among those nine insurers, Liberty Mutual and Geico
(Berkshire Hathaway) experienced the greatest growth by 25.8%
and 9%, respectively. Similar to our findings in the personal auto
liability line, we report that Alfa was the only insurer to reduce its
DPW, a 2% reduction. Adjusted loss ratios for all of the top-10
insurers deteriorated. Shelter’s loss ratio was the worst (116.2%),
with State Farm’s loss ratio not far below (112.7%).
Commercial Liability Lines
Commercial Multi-Peril Liability
Insurers writing business in commercial multi-peril liability
encountered premium growth for the second consecutive year,
Table 5
Top Ten Insurers in Mississippi - 2013
Commercial Liability Lines
Insurer
Direct Premiums
Written (000s)
Market Share (%)
2011
2012
Adjusted
Loss Ratio (%)
2013
2011
2012
2013
2011
2012
2013
COMMERCIAL MULTI-PERIL LIABILITY
Travelers
11.3
11.6
11.7
9,403
10,301
11,065
58.8
8.5
39.3
Nationwide
9.2
9.7
10.4
7,677
8,622
9,847
43.8
39.0
36.3
FCCI Mut Ins
7.3
8.0
8.3
6,051
7,152
7,857
25.0
-2.4
19.2
WR Berkley
6.2
6.3
6.0
5,122
5,602
5,701
19.9
16.5
61.4
Zurich Ins Grp
6.1
5.9
4.9
5,100
5,219
4,650
-3.4
-5.3
14.6
Liberty Mutual
4.7
4.1
4.1
3,872
3,644
3,840
71.8
50.4
58.9
CNA Ins Grp
4.9
4.7
3.9
4,035
4,151
3,709
-3.2
21.4
80.1
State Farm
4.3
4.0
3.9
3,569
3,568
3,678
61.1
30.0
22.2
State Natl Grp
0.1
0.1
3.7
67
77
3,456
-0.0
42.1
21.3
Tokio Marine Holdings
3.4
3.6
3.4
2,790
3,167
3,218
39.2
33.4
-4.1
WORKERS COMPENSATION
Liberty Mutual
21.0
18.8
17.1
56,748
56,158
55,733
83.3
64.9
57.7
Travelers
8.4
9.1
9.7
22,743
27,240
31,661
67.8
71.5
48.2
Zurich Ins Grp
7.8
6.9
6.7
21,218
20,637
21,840
43.7
-6.8
28.1
WR Berkley
4.8
5.8
6.3
12,942
17,219
20,574
72.7
58.1
46.5
AIG
7.9
5.4
5.6
21,467
16,076
18,212
43.5
56.2
-19.3
BCBS of SC Grp
6.9
5.8
4.3
18,665
17,347
13,918
98.2
113.0
86.2
Hartford
3.2
3.4
3.4
8,767
10,078
10,932
93.0
43.3
28.3
63.8
LUBA Cas Ins Grp
2.2
2.6
3.3
6,004
7,817
10,682
233.5
66.2
Amerisafe Grp
2.4
2.7
2.9
6,627
7,958
9,489
41.2
56.2
6.9
Stonetrust
2.0
2.4
2.7
5,336
7,277
8,722
7.0
12.1
94.8
MACM
29.2
30.9
27.1
24,331
23,229
20,335
-31.0
-2.9
4.0
Healthcare Providers
10.1
10.5
11.8
8,386
7,910
8,846
50.4
17.3
17.8
Fairfax
11.1
7.5
9.9
9,265
5,652
7,449
67.1
-2.8
20.7
Caregivers United Liab
7.9
8.4
7.9
6,582
6,301
5,918
26.7
-11.9
5.2
CNA Ins Grp
5.5
5.4
5.1
4,613
4,072
3,824
-0.8
-3.8
25.0
WR Berkley
4.6
4.3
4.5
3,867
3,263
3,354
20.9
13.8
37.2
White Mountains Grp
3.1
2.2
3.7
2,566
1,680
2,790
3.1
13.4
45.2
State Volunteer Mutual
3.2
3.3
3.3
2,635
2,463
2,468
-0.4
40.4
23.8
Doctors Co Grp
4.0
3.7
3.0
3,350
2,754
2,266
-39.7
103.1
124.6
Berkshire Hathaway
2.1
2.3
2.5
1,741
1,728
1,915
41.9
63.0
295.3
MEDICAL MALPRACTICE
38
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
following several years of DPW reductions. Eight of the top10 insurers experienced substantial increases in premiums written
while CNA and Zurich shrunk their books by roughly 10%. State
National Group increased its DPW by an incredible 4,392%,
capturing a 3.7% market share. Consequently, State National
captured a top 10 spot at number nine. Once more, Travelers
retained the top position and continued to increase its premiums
written in this line.
Workers Compensation
The increase in premiums written and underwriting profitability
for the aggregate Mississippi workers compensation market
continues as reported in Table 1. Direct premiums written grew by
almost 10% and growth in this line was 9.2% and the underwriting
performance increase was over 9 percentage points. This trend is
evident among the top ten insurers reported in Table 5. Eight of
the top-10 writers reported premium increases that ranged from 6%
(Zurich) to 37% (LUBA). There was limited movement in relative
market shares among the top-10 and the leading three insurers were
unchanged from 2012. Liberty Mutual was the clear market leader
once again, with over one-sixth of the premiums written in this line.
In the bottom portion of the rankings, Ace was removed from the
top-10 and replaced by Stonetrust who increased its DPW by 20%.
The majority of the top insurers in this line experienced favorable
movements in adjusted loss ratios, with only Amerisafe and Zurich
witnessing loss ratio increases.
Medical Malpractice
The largest malpractice carrier in the state by a wide margin,
Medical Assurance Company of Mississippi (MACM), reported
a reduction in direct premiums written following a one-year DPW
increase. MACM’s market share decreased slightly to 27.1%,
while Healthcare Providers and Fairfax, the 2nd and 3rd ranked
insurers, increased their market shares marginally. The top-10
insurers maintained their total market share in this line with just
under 80%. However, nine of the top-10 insurers experienced a
decrease in underwriting profitability with loss ratios ranging from
295.3% (Berkshire Hathaway) to 124.6% (Doctors). In aggregate,
the average loss ratio for Mississippi medical malpractice business
remains extremely profitable at around 20% (see Table 1).
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
39
Commercial Auto Lines
Commercial Auto Physical Damage
Aggregate premiums written in this line increased by roughly
5%. In contrast, aggregate loss ratios increased by almost 40
percentage points. Travelers remained at the top of the market
share rankings but continued its contraction in this line for the
third consecutive year, allowing Progressive and Old Republic
to creep towards the top. While Travelers and Progressive did
not exhibit significant changes in their premiums written, Old
Republic increased its DPW by 23% from 2012. Consequently,
Old Republic continues to capture more market share with 7.3%
of the market. Seven of the top-10 writers increased their DPW,
with Old Republic reporting the highest growth of the group
and Nationwide a close second. In terms of profitability, nine
writers reported higher loss ratios in 2013. As in commercial
auto liability, Canal reported the greatest increase in Loss ratios
(49.4%).
Commercial Auto Liability
Table 1 reports that commercial auto liability premiums written in
Mississippi increased by an impressive 9.1% from 2012, thus marking
the second straight year of increasing revenues. In addition, the
aggregate loss ratio for this line fell by seven percentage points, indicating
enhanced underwriting profitability. Table 6 reports that nine of the
top-10 insurers experienced premium growth. Top-ranked Travelers
reported DPW volume 3% higher than in 2012 and 8th ranked AIG’s
book increased by 55%. The only insurer that reported a premium
reduction was Progressive (3%). Although four of the top-10 insurers
reported improved profitability, substantial increases in loss ratios by the
remaining six insurers resulted in an average loss ratio deterioration for
our leading carriers. Among those carriers that experienced a reduction
in underwriting profitability, Canal reported the greatest increase in Loss
Ratio at 114.6% -- a 48.9% increase from 2012.
Table 6
Top Ten Insurers in Mississippi - 2013
Commercial Auto Lines
Insurer
Direct Premiums
Written (000s)
Market Share (%)
2011
2012
2013
Adjusted
Loss Ratio (%)
2011
2012
2013
2011
2012
2013
COMMERCIAL AUTO LIABILITY
Travelers
11.8
11.5
10.9
22,965
23,412
24,045
62.3
67.0
50.6
Progressive
9.6
9.9
8.8
18,571
20,130
19,467
56.7
57.2
64.0
Zurich Ins Grp
6.6
7.2
7.2
12,800
14,675
15,992
31.3
48.7
43.6
WR Berkley
5.2
5.4
5.0
10,020
11,049
11,044
75.7
33.1
29.2
FCCI Mutual
3.6
4.0
4.4
7,025
8,033
9,704
56.5
30.9
36.1
Nationwide
3.0
3.3
4.0
5,903
6,775
8,768
48.0
60.4
74.3
Liberty Mutual
4.5
3.7
3.8
8,771
7,480
8,414
64.2
35.5
69.7
AIG
2.9
2.5
3.5
5,683
4,978
7,698
21.5
127.8
56.3
Old Republic
2.7
2.8
3.5
5,150
5,739
7,673
50.4
26.5
86.4
Canal
4.2
3.5
3.4
8,092
7,063
7,515
95.3
65.7
114.6
COMMERCIAL AUTO PHYSICAL DAMAGE
40
Travelers
10.0
9.5
8.9
6,065
6,393
6,466
81.3
51.1
88.8
Progressive
8.5
8.5
7.8
5,140
5,718
5,663
63.7
61.3
64.1
Old Republic
6.1
6.4
7.3
3,705
4,320
5,302
63.9
59.9
51.2
Zurich Ins Grp
5.3
5.1
5.1
3,210
3,456
3,725
47.2
70.3
76.1
WR Berkley
4.1
4.3
4.0
2,502
2,897
2,944
54.3
41.8
62.8
Liberty Mutual
3.0
3.9
3.9
1,798
2,604
2,820
71.5
42.8
75.6
Nationwide
3.2
3.4
3.8
1,966
2,306
2,762
68.6
52.2
79.6
Canal
4.7
5.3
3.6
2,830
3,543
2,624
81.7
53.9
103.3
Assurant Inc
5.3
4.1
3.6
3,205
2,776
2,618
58.4
48.6
63.3
FCCI Mutual
3.2
3.1
3.4
1,915
2,106
2,488
55.2
73.4
116.5
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
Other Commercial Lines
Inland Marine
In aggregate, insurers writing inland marine insurance
enjoyed premium growth of 4%, and only experienced a marginal
worsening in underwriting profitability with the adjusted loss
ratio increasing by 2.5%. The list of leading inland marine
writers in Mississippi remained the same from 2012 with only
one ranking change. Liberty Mutual increased its market share
to 5.5% -- barely inching past Southern Farm Bureau for the
4th position. CNA continued to solidify its position as market
leader by increasing its DPW and capturing 13% market share.
AIG held onto its 2nd position, although it was the third year in a
row in which its market share decreased. While the top 3 insurers
reported higher profits, 6 of the remaining leaders experienced
higher adjusted loss ratios.
Commercial Multi-Peril (Non-liability)
This line of business experienced a moderate increase in
premiums but a significant reduction in profitability as DPW
increased by just less than 3.8% and the adjusted loss ratio
increased by over 97 percentage points (see Table 1). The adverse
loss experience is once again likely due to the March 18 hail storm
Table 7
Top Ten Insurers in Mississippi - 2013
Other Commercial Lines
Insurer
Market Share (%)
Direct Premiums
Written (000s)
Adjusted
Loss Ratio (%)
2011
2012
2013
2011
2012
2013
2011
2012
2013
CNA Ins Grp
9.4
11.7
13.0
11,993
16,883
19,424
45.3
35.2
29.3
AIG
12.5
11.2
8.7
15,961
16,178
13,106
11.6
16.6
5.8
FM Global
4.1
6.7
5.6
5,205
9,660
8,385
296.2
14.1
-24.8
Liberty Mutaul
5.6
5.1
5.5
7,182
7,407
8,269
81.9
30.5
60.7
Southern Farm Bureau
5.6
5.4
5.5
7,208
7,841
8,261
74.5
53.0
70.2
State Farm
2.9
4.8
5.4
3,737
6,966
8,084
10.7
5.7
6.8
Life of the South Corp
5.4
4.9
4.7
6,936
7,108
7,102
38.3
38.2
45.1
Zurich Ins Grp
4.0
4.0
4.4
5,098
5,703
6,576
8.8
8.9
8.0
Travelers
4.5
4.4
4.4
5,768
6,344
6,570
31.4
20.5
30.0
Assurant Inc
5.0
4.2
3.8
6,405
6,097
5,628
28.0
55.5
57.9
INLAND MARINE
COMMERCIAL MULTI-PERIL (NON-LIABILITY)
Zurich
10.1
10.4
10.7
21,243
23,695
25,250
112.7
40.3
149.2
Travelers
10.6
10.3
10.2
22,395
23,288
23,988
-153.0
6.5
120.6
Nationwide
7.0
7.6
7.9
14,828
17,229
18,700
55.8
55.9
254.3
State Farm
7.1
6.7
6.5
14,924
15,209
15,379
33.2
29.4
108.1
WR Berkley
4.2
4.1
4.0
8,767
9,319
9,504
45.9
67.6
85.1
Liberty Mutual
3.3
3.5
4.0
6,883
7,850
9,411
15.0
35.7
53.5
Chubb
4.2
4.0
3.6
8,787
9,143
8,518
97.0
12.1
78.2
State Auto Mutual Grp
2.7
3.0
3.3
5,665
6,771
7,804
89.7
46.5
98.5
Southern Farm Bureau
3.2
3.3
3.3
6,842
7,606
7,714
59.3
52.4
75.8
CNA INS Grp
3.1
3.2
3.2
6,430
7,272
7,459
10.5
40.5
163.8
QBE Ins Grp
40.0
41.8
40.1
13,980
17,305
13,383
47.0
25.7
80.5
AIG
8.0
14.7
14.7
2,813
6,075
4,905
51.5
36.2
45.3
State Farm
13.1
10.8
12.3
4,588
4,448
4,088
93.5
92.3
79.4
BCS Ins.
5.1
5.2
6.8
1,775
2,139
2,260
91.9
40.2
53.0
Zurich
7.4
6.8
6.1
2,592
2,823
2,050
108.0
81.9
76.0
Federated Mutual
4.4
3.9
4.7
1,543
1,622
1,565
125.7
79.8
56.2
Fairfax
3.4
4.0
4.0
1,191
1,654
1,350
56.4
46.6
66.5
Ace Ltd Grp
3.8
3.1
3.2
1,343
1,286
1,068
18.1
31.8
31.2
Swiss Re Grp
2.5
2.5
1.6
871
1,037
541
78.4
182.4
82.4
CNA Ins Grp
1.4
1.1
1.5
475
468
487
-205.4
-475.3
-614.3
GROUP ACCIDENT & HEALTH
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
41
in Jackson that resulted in roughly $500 million in losses incurred.
Zurich retained its position as the largest writer of this line in
Mississippi for the second consecutive year. Travelers was a close
second capturing 10.2% market share, a slight decrease from 2012.
Nationwide and State Farm held onto their 3rd and 4th positions
in the rankings that they have occupied for several years. With the
exception of Chubb, all of the top insurers increased their DPW
in this particular line. Liberty Mutual led the charge with a 20%
increase in DPW from 2012. As alluded to above, every one of
the top-10 insurers reported increases in adjusted loss ratios. Most
notably, Chubb and Travelers reported over 500 percentage point
increases in their adjusted loss ratios.
Group Accident & Health
As reported in Table 1, aggregate premium volume in this
line reduced by 19.3% in 2013 and aggregate profitability declined
by roughly 19.6%. The market leader, QBE, reduced its book by
over one-fifth, which only decreased its market share be less than
2%. The exit from the rankings of HCC enabled CNA to capture
the 10th position. The remaining top-ten insurers remained
unchanged, although there was some shuffling in positions. Nine
of the leading insurers decreased direct premiums written in this
line, with Swiss Re posting the largest premium reduction (48%).
Average profitability for the leading writers improved as five of the
top-10 reported significant declines in adjusted loss ratios.
Summary and Conclusion
Last year we reported that the Mississippi insurance market
appeared to be recovering well. Our review of the 2013 market
results provide some support for an optimistic view of the local
market as aggregate premiums written in Mississippi grew by 5.2%.
We report that all but three lines examined experienced premium
growth. The vast majority of the top-15 insurers on our list grew
their books of Mississippi business in 2013 and only one insurer
(Alfa) saw a reduction in premiums written. Unfortunately, the top
15 insurers in Mississippi also experienced an average deterioration
in underwriting profitability in 2013, as the average loss ratio for
this group increased by almost 24 percentage points. A large driver
of this deterioration in loss ratios is the March 18 hail storm. As
in previous years, it is our hope that next year we are able to report
continued premium growth and improved loss experience.
S AV E T H E DAT E
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Of Mississippi
www.mjkelly.com
800.873.8374
42
M I S S I S S I P P I A G E N T • FA L L 2 0 1 4
August 6-8, 2015
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