Florida Governor to State Farm: On Your Way Out, Here's an Award

The man who is letting insurance giant State Farm exit the state, which some fear will foster a property insurance disaster in Florida, gave the insurer an award this week for innovation and disaster mitigation.

State Farm was recognized by Gov. Charlie Crist with the Governor's Hurricane Conference Corporate Award for "innovation and achievement in public awareness and mitigation advocacy."

The award recognizes State Farm's support of StormStruck, an exhibit at Walt Disney World Resort that enables guests to experience the power of a weather event while learning how to prepare for floods, hail, high winds, lightning and more.

The award was presented at the 2009 Governor's Hurricane Conference in Fort Lauderdale this week.

"Long before disaster strikes, State Farm is there educating the public about safety and disaster preparedness," said Jamie France, property/casualty underwriting manager with State Farm Insurance. "StormStruck allows us to reach millions of people and inspire action before a disaster strikes. We are honored that the Conference recognized our commitment to saving lives and protecting property."

State Farm also recognized the the other sponsors of StormStruck: Walt Disney World, Federal Alliance for Safe Homes, RenaissanceRe, WeatherPredict Consulting and Simpson Strong-tie.

Travelers Launches New Product for Building Services Contractors

Travelers has unveiled a new coverage the company says will help building services contractors better minimize their risks.

Travelers' new IndustryEdge product for Building Services Contractors includes core lines of commercial insurance such as general liability, workers' compensation, commercial auto, property and umbrella, as well as specialized features and solutions. These include:

* Coverage for damage to personal property in the care, custody or control of the insured

* Coverage for scheduled equipment, including optional Lost Keys Coverage, which covers the cost to adjust or install new locks if a client's keys are lost or stolen

* Coverage for theft of a client's property by an identified employee

"In this challenging economic climate, when some building services contractors may not have the means to pay for uncovered claims out-of-pocket, it is imperative that they have adequate insurance coverage and utilize risk management tools and procedures to control costs," said Deb Denker, industry manager for Travelers Commercial Accounts. "Travelers IndustryEdge for Building Services Contractors was designed to help agents and their customers pinpoint the coverage necessary to manage their business."

6 Steps For Agents to Take Before Soft Market Hardens

Most insurance professionals detest a soft market due to the increase in competition, unreasonably low pricing and increased market vulnerability. Some, however, may appreciate a softening precisely because of the change in underwriting and pricing philosophies.

No soft market (or hard one) lasts forever. I'm no economist or fortune teller but I'm confident the hard market will arrive. Just like the "real estate bubble" had to end, carriers cannot sustain both underwriting and investment losses.

What does this mean to retail agents and brokers?

Agencies with a majority of their book placed with preferred carriers may spend additional, unanticipated time trying to re-market those accounts because of the crises being faced by these carriers.

Carriers know that if they continue to entertain risks as they have during the soft market, they could wind up insolvent.

This commentary is not intended to scare; just to remind agents to prepare for the return of the hard market. When the market does turn, the burden once again will be on agents to adapt to the new market-- to which some may not be accustomed or even ever experienced.

Underwriting complacency and pricing latitude will disappear in the next hard market, as in all hard markets.

Additionally, clients accustomed to the current market conditions are going to complain, asking why their renewal offers are so much higher, or why the incumbent carrier is not renewing the policy despite a clean claims history. Being able to satisfactorily answer these questions and successfully retain clients will soon be the mission of every agent.

Don't Be Left Behind
How do agents avoid being left behind when the shift happens? I'm an underwriter and this is not about soliciting business. It's about the reality of the coming marketplace and the need to be prepared. I offer a few suggestions:

* 1. Just as a grocery store operator regularly checks, agents should do the same to make sure current markets are not significantly changing guidelines or increasing rates. If they are, this could mean they are planning to cut a few agencies as soon as they feel that their executives can no longer spend $1.2 million to renovate their offices (I won't say who). Agents who have other preferred carriers should approach them before the market changes. They shouldn't wait until the last minute.

* 2. Agencies should gather individual loss runs and agency loss data as quickly as possible. This is important because if/when markets become insolvent, it is very difficult, if not impossible, to obtain loss runs or analytical reports. Agents shouldn't assume that the insurance departments, guarantee associations or any other governmental agencies can or will assist in securing this data. They will most likely disregard such requests since they work for consumers, not the industry.

* 3. Agents should renew and/or rebuild their relationships with their excess and surplus lines markets. Surplus lines brokers, wholesalers or MGAs make markets available to retail agents who lack the necessary "preferred" markets or need a market for risks normally declined by preferred carriers.

* 4. Agents should not be afraid to ask questions or reach out to past or current contacts. Many insurance practitioners rely on knowledge gained from on-the-job experience, self-education or acquaintances rather than company training programs. Unlike standard carrier underwriters, many excess and surplus lines underwriters have knowledge and direct experience at both the carrier and retail levels. MGA underwriters cannot only advise on current market conditions, but they can also help agents by obtaining rates and coverages not normally available.

* 5. Agencies must automate. More people buy insurance via the Internet. Agencies need to communicate with customers more through technology.

* 6. Participate and invest in industry seminars and conventions. Agents who are well informed understand the deeper aspects of the industry and the market.

The industry will be facing great challenges in the near future. I believe preparation is the best option.

Dealing With a Arizona Speeding Ticket

Be polite if you are given a speeding ticket, because at that time, you don’t have a ton of options. Afterwards, you do have a few different choices. Most of the time, you’ll plea “guilty,” but that is not always the best choice. You can also decide to plead “not guilty,” which means that you have to show up in traffic court to deal with the ticket. If you plead not guilty, you will not have an option to erase the citation with defensive driving school.

Whatever you decide to do, make sure that you are polite with everyone and follow are schedules. If you miss a deadline, you could have to pay additional fines or could lose a not guilty plea. Above all, don’t ignore you ticket – unpaid speeding ticket could lead to jail time.