4th Quarter Insurance Risk Newsletter 2020

Portrait of Nanci MeadowsInterview with Nanci Meadows, People Champion at Hubb

Hubb is a Brown & Brown Northwest property & casualty customer. 

Tell us about Hubb.

Hubb is a software platform that helps conference and meeting professionals plan, build and manage their onsite and online events from start to finish. Conceived by our CEO, who is a veteran event pro, and understands the need for flexible and responsive tools. Hubb enables planners to control, automate, and expedite the entire program-building process, from calls for papers to final surveys automates. This frees time for managers to focus on strategic planning and more efficient execution. With Hubb powering the back-end, event managers have a central source of accurate, timely information that eliminates the friction of managing content across various platforms. Our virtual events platform also makes events come alive like never before, with immersive, engaging experiences that drive business forward. 


You made a major pivot during COVID-19 to stay relevant in your space. Tell us about that evolution. 

In January & February, things began to change. We started to see the writing on the wall as we got an avalanche of cancellations in Q1, and for a hot minute it was quite scary; we thought this could be devastating for us since events are what we do. We made the decision to quickly pivot our software to focus on virtual events. It was something we’d supported for large clients previously but was not something we’d actively promoted.


We started focusing on creating a really incredible attendee experience. We used our virtual event platform to put on “Untethered”, a virtual event for event planners to show what virtual events could be like. We had nearly 5,000 attendees, which was evidence that the entire industry was in a panic about their careers and the future and looking for solutions. After that, it just took off! So many people were looking for ways to replace in-person with virtual and we’ve been racing to keep up with the demand ever since. We added 25 people to the team in three months bringing us 63 total (almost double where we were before COVID). Now we’re working on projections for next year and looking at bringing on a recruiter. It’s an interesting place to be – and we have some survivor guilt. You know, I’ve heard that survivors of disasters often think, “Why me?” There is so much sorrow around us, yet we’ve been barely able to keep up with the amount of business this environment has generated. However, when we consider the impact our work is having, we know we’re saving careers and helping keep an industry alive. There is a lot of pride and joy in being able to provide virtual solutions for people to connect. Our roots are deep in the events world and we’re grateful to play a large part in helping it continue to thrive.


How has COVID-19 impacted your team?

Our entire company moved to working from home on March 15. I printed a note to put on the front door saying we’d be working remotely and back in the office on March 30…funny how we all thought it would be a short thing initially. But here we are many months later, all still at home.


We have worked in a self-managed team environment since our inception. We say, “people don’t manage people, people manage commitments”. We’ve kept that in the forefront – we are still working with each other, all pulling from the same side of the rope. We’ve always had a flexible schedule policy so it wasn’t a complete change, though we chose to be in the office most of the time because we felt we were better together. Now, however, our work from home was coupled with the daunting task of going after the market in a new way. It was astounding how seamlessly we all worked in that environment. I attribute it to the self-managed environment – it allowed for autonomy and was natural for people to hit the ground running and do what they do best. Over time, it’s been wearying but early on we set up a few calls, “Monday Cup of Joe”, where we chat for 30 mins and people share pictures or talk about what they’re doing, and “Friday Fika” (the Swedish term for coffee break), where we have coffee and a snack and don’t talk about work. These have consistently been highly attended meetings and a great outlet for teams to stay connected. I also survey the team regularly, and the predominant feedback is that they love working from home. We’re looking at how to perpetuate this set-up in the future and potentially use dollars we might have spent on a facility to pour into the team in another way.


How has COVID-19 impacted your customers? 

Since moving to a virtual environment, we’ve had so much more gratitude. Prior to this, business was business, and retrospectives were more about what might have been better. Now, there’s more of a sense of community where virtual events are concerned, and event planners see how successful events can be and how much people enjoy it when they’re in the right venue. There’s more connectedness and genuine gratitude from our clients about what we have helped them pull off from their living rooms.


How has the Brown & Brown Northwest team supported you during this time?

Well, very clearly, some things changed! Our product, our needs in regard to security and coverages overall. The BBNW team stays very proactive and connected. In the midst of this, the last thing we were thinking about was insurance. And honestly, we didn’t have much time to spend on it. The BBNW team has been so helpful; they are proactive in sending everything exactly as needed, with anything highlighted for specifics or signatures and follow-ups to ensure emails are received. The team has pulled it out of our hands and made it so simple, which is invaluable right now. That’s what partnership is. You do what you do best and we’re lousy at it. We love that you pick up the slack and make it easy for us.


Anything else you’d like to share?

We anticipate hybrid version events will be the primary modality in the future. It’s a great failsafe, if a company needs to flip to virtual, it’s ideal to have a product in your back pocket that allows a quick and seamless transition. With this new reality on the horizon, we anticipate further growth both in our business and within our teams – Hubb will continue to get bigger and better.

What’s New in the Market: 2021 Market Forecast

Last year at this time, our What’s New in the Market article discussed the hardening commercial insurance market. Over the past several years, natural disasters, increasing sexual harassment liability from the #MeToo movement, gigantic verdicts in transportation, and property damage claims all joined forces to impact the insurance market into increasing rates. However, when we wrote that article no one could have imagined the events that would unfold in 2020.  


The effects of COVID-19, and the local restrictions that have followed, have impacted small and large businesses alike in unprecedented ways. Hospitality, travel, restaurants/bars, camps/childcare, and gyms have especially been impacted. But how has this influenced the commercial insurance marketplace overall? The restrictions on businesses and stay-at-home recommendations in the Pacific Northwest (and across the country) have had an array of effects on commercial insurance carriers.  


Some results have had a positive impact, such as a much lower frequency and severity of automobile accidents as people aren’t commuting and traveling at previous levels. This has resulted in a much more profitable year for commercial auto insurance carriers than in recent years.  


Other results have been less positive. With many businesses’ revenues and operations down significantly over last year, and still others closing permanently, carriers are seeing a significant reduction in ratable exposures at policy renewal. Additionally, many carriers are providing large returns of premium on audited lines of business. This decrease in incoming revenue and return of premiums to insureds has led to lower profitability than carriers budgeted for in 2020.


Some of the changes in the way insureds are doing business has also led to an increase in exposures.  With a larger number of employees working remotely than ever, cyber liability exposures are unprecedented. Cyber insurance was already experiencing significant losses due to social engineering claims, phishing attacks, and ransomware. Now they are challenged with managing the cyber safety of employees working outside their normal operations. Not only are more employees working remotely than before, but the way they are doing business has changed. For example, doctors and mental health professionals are offering telehealth appointments and virtual sessions that weren’t offered in the past. This results in new and untested potential cyber issues.


Significant uncertainty surrounds the magnitude of COVID-19’s impact on the commercial insurance industry at this point. While there seems to be rough consensus that it will be dramatic, ultimate effects will likely hinge on the duration of quarantine efforts, the number of people infected, and the resulting macroeconomic impact. However, there is no doubt that the rate increases we saw in early 2020 prior to COVID-19 will continue into 2021. 


As we look to 2021, we can expect carriers will continue to seek the rate increases they planned on prior to COVID-19, though potentially to a lessened degree for some lines of coverage. Umbrella/excess liability, commercial property, cyber, and management liability (directors & officers and employment practices liability) will continue to see the potential for significant rate increases in 2021. However, carriers are now indicating less rate need in commercial auto and general liability coverages for 2021 than they originally predicted. While every commercial client’s exposures and coverages are different, carriers are predicting average increases of 5-10% for all lines of coverage in 2021 in the Pacific Northwest, with umbrella/excess liability taking the largest rate increases of 10+%.

Photo of Cyber RiskRisk Management: Preventing Cyberattacks on Remote Employees

The COVID-19 pandemic has solidified remote work as a new operational standard. Employers should expect this trend to only grow in the future. In fact, many major companies, such as Twitter and Microsoft, have indicated that remote work will be an indefinite option for their employees. 


While this is exciting in many ways, remote work also comes with unique challenges—namely, cybersecurity. There are a number of cybersecurity risks that remote employees face, but there are also potential solutions for each.


Cyber Threats to Monitor

Hackers have been assaulting businesses since the first computer was invented, always trying new methods of gaining critical information. Depending on the size of the organization, it may receive dozens or thousands of hacking attempts each day. These attempts are typically brushed aside by IT security teams and firewalls. However, with employees working from home, those protections aren’t as guaranteed.


The following are some of the most common cyber threats facing individuals:

    • Phishing and vishing: Phishing is an attempt to gain personal information, such as computer passwords, social security numbers or other data. Hackers and scammers will impersonate a legitimate company and send fake emails to solicit this information, typically with a phony threat. Vishing, or voice phishing, takes this process a step further. This is when a scammer spoofs a legitimate phone number (from within the organization or otherwise) and poses as an IT help desk, using that alias to solicit personal information. These calls may even be routed to personal cellphones, making it harder for organizations to catch. Vishing attempts are a recent trend, but are increasingly prevalent. Employers should review existing cybersecurity policies to directly address vishing.
    • Malware: Malware is a type of computer virus that is typically disguised as an innocuous program, email attachment or link. These viruses infect computers and can do any number of tasks, typically hidden to the user. For instance, they might store password data, track website activity or download personal files. 
    • Brute force attacks: Brute force attacks are when hackers try logging into someone’s account many, many times. These attempts work most often when individuals reuse usernames and passwords across different accounts. A hacker may expose the information to one account, then use those credentials everywhere else they can think of, eventually gaining access.


These cyber threats are made worse when employees are working from home, especially if they conduct business on personal devices or don’t connect to a secure network. That’s why it’s important for employers to proactively address cyber threats with their remote employees.


Protecting Remote Employees

There is no single solution to avoiding cybersecurity threats. But there are key steps that organizations can take to protect their employees and critical data. Below are some of them.

    • Behavioral analytics tracking software: This is software that monitors each individual’s computer habits. Since hackers can impersonate an employee, it’s hard to detect when someone’s credentials have been compromised. With analytics tracking software, the program would be able to spot when a user is displaying abnormal computer usage. This will depend on the individual, but it may include accessing certain files or transferring large chunks of data. 
    • Automated threat detection software: This software is like antivirus programs found on many computers by default. It can scan files and detect malicious programs automatically. Automated threat detection software often pairs with other efforts, such as behavioral analytics. 
    • Comprehensive work-from-home guidelines: Using personal devices to conduct business is an easy way to compromise usernames and passwords. Employers should set clear guidelines regarding acceptable technology to use (often a work-provided laptop) and work locations. For instance, cafes may be off-limits because they often have unsecured networks. 
    • Employee education: Education and training are perhaps the best protection against cyber threats. Employees should know basic cybersecurity tactics, such as how to spot a phishing email, how to recognize a scam caller and how to report a potential security breach. They should also be instructed to not reuse login credentials, especially between work accounts and personal accounts. 


Employee education is especially important, as hackers and scammers become more sophisticated each week. Employers should keep an eye out for new scams and alert employees as needed.


As with any successful initiative, cybersecurity protocols must be observed by all stakeholders within an organization. That means educating everyone, from the top down, about how to protect themselves and their workplace from cyber threats. If even a few individuals go without proper training, the entire organization could be compromised. 


As the business world becomes more connected, cyber threats will get more sophisticated and commonplace. Start educating employees about cybersecurity today to better protect your organization.

Photo of CashEmployee Benefits: Plan Limits for 2021

Many employee benefits are subject to annual dollar limits that are periodically updated for inflation by the IRS.


The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration will be consistent with the new limits. 


Although some of the limits will increase for 2021, most of the limits remain the same. 


Increased Limits

For plan years beginning on or after January 1, 2021, the following limits have increased: 

    • Health savings account contributions:
      • Single coverage—$3,600 (up $50)
      • Family coverage—$7,200 (up $100)
    • High deductible health plan (HDHP) out-of-pocket maximum limit:
      • Single coverage—$7,000 (up $100)
      • Family coverage—$14,000 (up $200)
    • Tax exclusion for adoption assistance benefits—$14,440 (up $140)


Unchanged Limits

Certain limits will not change for 2021, including the flexible spending account salary reduction contribution limit, HDHP minimum deductible, 401(k) contribution limit and transportation fringe benefits monthly limits. 


Courtesy of Benefits Buzz, Zywave, December 2020

Personal Lines: Photo of Happy CoupleHow to Have A Memorable Virtual Holiday

The 2020 pandemic has shown us there are other ways to celebrate birthdays, milestones, weddings or gatherings with our friends, but could we pull off the holidays virtually as well? Here are some tips and ten fun activities to make your virtual holiday a stress-free, memorable event. 


1. Plan a date and time

2. Gather your guest list 

3. Choose a platform

Make sure everyone is set up on the group video platform you want to use. If you’re concerned a grandparent or parent may need help, consider scheduling a test call beforehand so they will be all set (hopefully) when the event begins and don’t forget to remind them to use the biggest screen they have available. 


4. Get the tech

You can do a Zoom call or FaceTime if you have an iPhone or iPad, but one of the best ways to connect is with the Facebook Portal for your television. It’s the easiest and best way to feel like you are actually hanging out together. It has the ability to follow you around, but when you hook it to your TV it makes the screen big enough to actually enjoy! The new Amazon Echo Show also moves so that’s another option. 


5. Send the link 

6. Send reminders 

7. Select your theme

Get your guests into the party spirit by having a theme. Here are some easy ideas for the virtual holiday party setting: 

    • Christmas PJ Party 
    • Ugly Sweater Party 
    • Cookie Decorating Party
    • Wine Tasting Party
    • Holiday Charades
    • Cocktail Christmas


8. Set some constraints

The number of people trying to talk, background noise and interruptions can turn a virtual event into a disaster. Set some ground rules and expectations on how to signal a person has something to say and when to mute.


9. Play some tunes

No party is complete without music, and although you could share a playlist with your guests and have everyone hit play at the same time, we all know it’ll be difficult to make that work smoothly. You can try playing something on your computer or another device near you and have the sound travel through your microphone—but the quality may not be as good. The ideal scenario is to connect your music’s audio output directly to the video conferencing app, but how you do this will depend on the platform you use. Typically, there will be a way to share your computer sound within the share screen option. 


10. Plan some fun activities

Depending on your budget and the time you want to put into planning your party, there are plenty of ways you can entertain your guests. Here are 10 fun activities: 

1. Care Packages/Secret Santa: Get inventive and festive by putting together some fun holiday-themed care packages that you can send to your family or can send to each other. You can include ornaments, recipes, gifts, holiday movies and more, and then have everyone open their packages together on the call.

2. Holiday Trivia: Who doesn’t love trivia?! Having a set of holiday fun facts to keep people guessing could pair well with the Cocktail Christmas theme.

3. Dress your Pet Contest: A fun idea for your pet-lovin’ friends and family would be to have a “Best Dressed Pet” contest.

4. Holiday Home Tour: If you are using your phone or a portable device, take your family or friends outside to see your decorations, or stay inside to scope your tree or favorite cozy corner. You could also take pictures ahead of time and watch the holiday home slideshow over a cup of hot apple cider.

5. Virtual Holiday Bingo: Have your party goers prepare Bingo cards in advance (or have them emailed and printed) to play this fun variant on the traditional game! Bingo is a great holiday game that encourages interaction and cheer.

6. Virtual Holiday Scavenger Hunt: Ask your partiers to roam their homes and neighborhoods on an epic holiday adventure. Set your own goals, such as “Find a red ornament” or “Show a holiday movie.” This is a holiday activity that feels festive and exciting!

7. Virtual Card Exchange: Holiday cards are a great addition to the spirit of giving, and everyone can entertain one another by showing off their personalized holiday cards, where sent electronically or through snail mail. Put a twist on it by exchanging cards as a whole or doing it individually.

8. Name that Tune Holiday Edition: Name your favorite holiday tunes in this twist on a classic party game. Have each of your players race to identify the melody within holiday songs. Ask your team to either hum the tunes or sing part of a song. The other players must listen and identify the carol.

9. Virtual Dance Party: Host a stylish and festive event for everyone by scheduling a dance party! You can set this up in advance by curating a playlist on Spotify, where everyone can add their favorite holiday tunes to the mix. Then pick a date, set up your virtual call, and let everyone cut loose!

10. Watch a Movie Together: Using Netflix Party or other party streaming service, you can set up a holiday film viewing event that everyone can take part in. You can even ask everyone to join in with their families and suggest their favorite films, taking a poll for which holiday movie you decide to watch.


No matter what you do, we hope you have the chance to connect with loved ones in some capacity this holiday season.

Photo of Construction SiteSurety: Infrastructure Spending

“Infrastructure Spending.” Who knew two words could simultaneously perk up the ears of almost every business owner nationwide? We are talking about two trillion (yes, with a T…) dollars forcefully injected into the U.S economy to put thousands of “high priority” projects back on-line. Subsequently, millions of currently furloughed or laid-off employees will be springing back to work across the United States – over two million jobs expected to be added back by 2024 and another seven hundred thousand more by 2029. Not to mention the United States is decades behind on investing in its infrastructure.* 


What does this mean for surety? That every contractor – not just the ones who work on roads or bridges – should be preparing their businesses to be ready for the possible bi-partisan infrastructure package to be passed in the near future. Thousands of green-lit jobs and projects that are currently on hold because of the lack of money would be immediately funded and the bidding wars will commence. The pandemic is awful, and we aren’t out of the thick of it yet, but this is an opportunity for the United States to restart on its infrastructure. Reassess, repair, rebuild and ultimately find a massive return on investment in the short and long term.


As they say, tomorrow is never promised. We will sit and wait as a nation until federal relief is sent, and in the interim Brown & Brown can be your guide to help push through these times of crisis.

*Source: Infrastructure Investment, SFAA – https://cdn.ymaws.com/www.surety.org/resource/resmgr/covid/InfrastructureInvestment0715.pdf

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