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McGriff Hosts 2017 ExecutiveEdge Conference

05/15/2017
McGriff, Seibels & Williams held its 2017 Executive Edge conference in mid-May at the Broadmoor Resort in Colorado Springs, Colorado. The event provided a unique opportunity for professionals from all sides of the risk management arena to discuss topics and trends with decision makers both from the buyer side and carrier side. We appreciate all those who were able to attend this year as well as our co-sponsors (AEGIS, AIG, Allied World, Chubb, Paragon, Sompo International, Tokio Marine HCC, XL Catlin, Zurich). For those who were unable to attend, you missed great camaraderie and education and we hope you make it next year! High level summaries of the sessions are included below.

 

JASON DORSEY KEYNOTE ADDRESS

Jason Dorsey, described as “equal part researcher, social anthropologist and entertainer,” is the expert and lead researcher on Millennials (Gen Y) and Gen Z at The Center for Generational Kinetics. Jason appears regularly on national television to share his research and provide context on Millennials, Gen Z, and debate the generational divide. He thoroughly entertained the Executive Edge audience with facts about and practical actions for dealing with multiple generations in the workplace.

Speech summary video
Extended slide deck
Our brand-new research on Gen Z
 

DIRECTOR & OFFICERS LIABILITY CLAIMS DEVELOPMENTS

Dan Bailey, of Bailey Cavalieri, L.P., walked conference attendees through recent D&O claim developments, including the significant increase in shareholder class action claims filed in 2016 and ytd 2017. He clarified meaningful litigation trends (the migration of M&A-related litigation from Delaware state courts to federal courts, increase in actions against foreign issuers, and increase in actions against firms in the life sciences industry). Dan also discussed adequacy of D&O limits, forum selection clauses, SEC enforcement actions and the evolution of entity investigation insurance coverage, as well as the Yates Memo, FCPA claims, and cyber security related D&O claims.

DAN BAILEY WHITE PAPER
 

CYBER SECURITY / THREAT MODELING

Cyber Security experts from G2SGlobal both impressed and shocked Executive Edge attendees with the vast amounts of personal and business proprietary information available on the dark web via deep mining techniques. Intelligence gathering exercises can be useful as part of both a prevention and preparedness strategy, but also in helping quantify possible losses and business impacts. The G2SGlobal team also revealed their financial risk assessment tool built in collaboration with McGriff FSD. They demonstrated how the tool takes global threat data, industry loss data, public information and private financials to model realistic cyber probable loss amounts. These loss estimates can then be subcategorized by industry, region, loss type and more than 30 cyber threat types to realistically present the insured with actual business impacts based on current intelligence. The model is unique in that it is tied to real, verifiable threats against an enterprise and combined with flexible, live inputs from insureds about their actual assets and security programs. A customized and flexible approach to loss quantification will give insurance buyers better metrics on which to base their insurance purchasing decisions.

 

CROSS MODEL INTRODUCTION & DISCUSSION

It is well known that risk-takers weigh their investment decisions in the framework of risk vs. reward. The CROSS Model seeks to utilize this same risk vs. reward framework for weighing both risk retention and risk transfer decisions. With some basic loss experience, premium estimates, and financial inputs from the client, the CROSS Model can provide an objective means to determine the most efficient insurance program from among a set of market options. Our Executive Edge breakout discussion included a brief presentation about the purpose, the inputs, and the outputs for CROSS Model, as well as questions about a variety of applications. For more information or questions about the CROSS Model, contact Trey Tasker at ttasker@mcgriff.com.

 

WAGE & HOUR COVERAGE DEVELOPMENTS

Jeanne Deni (McGriff Denver) and Bain Head (McGriff Houston) hosted a round table discussion regarding the developing landscape within the Wage and Hour Liability insurance marketplace as well as recent Fair Labor Standards Act (FLSA) trends affecting the market. While wage and hour claims have historically been excluded under Employment Practices Liability (EPL) policies, an increase in both wage and hour class action filings and settlements has encouraged carriers to offer solutions for insureds to consider. Many carriers offer sublimited coverage (typically $250,000 defense costs only) for private company insureds, while others offer Wage & Hour Liability Insurance policies (defense and indemnity) for larger clients willing to take a $2 to $5 million retention. Since 2012 there have been over one hundred wage and hour policies bound; half are stand-alone wage and hour policies and the other half contain a tie-in-of-limits with traditional EPL policies. The two most active carriers are Markel Bermuda and Beazley London; however, many carriers, including Argo Bermuda, AWAC Bermuda and AIG, are beginning to offer stand-alone options for insureds to consider and at more competitive retentions. In order to provide indications for wage and hour coverage, underwriters require employee count by state and exemption status as well as details on policies and procedures for classifying employees. Along with a completed application, underwriters may require several additional questions or a meeting / conference call to discuss responses within the application prior to binding coverage. Below is a link to the handouts from the discussion which include recent wage and hour statistics along with a product and market overview.

WAGE & HOUR PRESENTATION

 

REPRESENTATIONS & WARRANTIES / TRANSACTIONAL INSURANCE DISCUSSION

The transactional insurance breakfast session covered a range of topics related to representation and warranty (R&W) insurance and tax- indemnity insurance, including the evolution of the R&W insurance market, the R&W placement process, terms and conditions of R&W policies, and what industries and risks are more or less difficult to insure. Participants heard from the head of a large insurer’s transactional insurance group, a large insurer’s lead claims attorney, and McGriff’s transactional-insurance practice leader. For more information or questions about transactional insurance, contact Michael Wakefield at mwakefield@mcgriff.com.

 

FINANCIAL INSTITUTIONS REGULATORY & LEGAL TRENDS

McGriff’s Financial Institutions (FI) practice moderated a discussion between senior FI underwriters, clients, and a former SEC attorney which focused on the major regulatory and legal trends facing Financial Institutions. All underwriters agreed Financial Institutions continue to be faced with new and unique risks including regulatory enforcement actions, shareholder suits, alleged professional services violations, and complying with regulations set forth by various constituencies and agencies such as FINRA, the SEC and the CFPB.
 
Much of the discussion centered on the continued aggressiveness of the CFPB. One audience member noted CFPB’s warning to banks regarding a review of their compensation programs to ensure they do not incentivize employees to create fake accounts and the expected CFPB investigations into such practices. The agency will also continue to focus on potential predatory lending practices that prevent minority access to mortgages. In addition to the CFPB, the underwriters discussed the continued litigation trend involving false claims act matters.
 
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