Link to Lloyd's newsletter

Link to Lloyd's newsletter
August 2010

In this issue Golf outing to benefit the Katie School of Insurance BritAmerica Management Group - not your usual American insurance broker Katie School of Insurance student Kelsey Mroczka interns at Lloyd’s W.A. Schickedanz Agency – four generations and going strong Receivable insurance is right on the mark in an unstable market Sneak peek at the Lloyd’s Illinois renovation Insurance Associates run with Elvis!

Golf outing to benefit the Katie School of Insurance Pictured L-R – Marco Flores, Equity Office Properties, Jim Parizek, Arthur J. Gallagher; Tommy Mullins, Katie School of Insurance. For the second year in a row ALB will sponsor a golf outing to benefit the Katie School of Insurance and Financial Services. We're going back to the course at the sylvan Itasca Country Club. Lunch and dinner are included and there will be lots of fun course events and prizes! Register here Itasca Country Club, 400 E. Orchard, Itasca, IL Monday, September 20, 2010 12:30 pm Luncheon buffet \| 1:30 pm Shotgun start \| 6 pm Dinner buffet $125 for golf, lunch and dinner $30 Dinner only option $100 Corporate golf hole sponsorships and signage We hope you can join us for a fun, casual afternoon of golf – and help us support the Katie School of Insurance. back to top

BritAmerica Management Group – not your usual American insurance broker Pictured L-R – BMG Directors Neal James-Crook, Simon Hall, Stephen Wicks. Most people in the insurance business know them as “BMG” but their full name is BritAmerica Management Group Inc. (BMG Inc.) and individually each of those words means something. Essentially they are a small group of expert professionals who manage and arrange the insurance requirements of a diverse group of customers. They also specialize in managing insurance in some quite unusual areas - in particular, Special Risks, Pet Medical and Equine Mortality. They are highly automated and have created a number of web based on-line programs for small transactional business. The BritAmerica part of their name explains a lot more about them. They have offices in Dallas and their Lloyd’s accredited broker is located in the City of London. They are licensed brokers in all 50 US States and their management has over 30 years of experience in both the US and London markets. Much of the business is placed through their London office and underwritten at both Lloyd’s and the London markets. They distribute some Lloyd’s programs directly into the US and work closely with Lloyd’s in Illinois. BMG Director Neal James-Crook said, "BritAmerica also represents various domestic markets, some of which are exclusive. As you can see we’re not your usual American insurance broker, in fact we think we're 'positively unusual'. Perhaps that’s why our business is growing so rapidly. "We are delighted to be ALB members and look forward to meeting fellow members at upcoming functions." For more details please visit their websites at: bmgdallas.com \| Contact: Jeffrey Nelson at jnelson@bmginsurancebrokers.com bmginsurancebrokers.com \| Contact: Neal James-Crook at neal@bmginsurancebrokers.com back to top

Katie School of Insurance student Kelsey Mroczka interns at Lloyd’s Kelsey Mroczka and Bill Lally, students at the Illinois State University Katie School of Insurance and Financial Services, served internships at Lloyd's in London this summer. Kelsey is a recipient of the 2010 Lloyd's Illinois Scholarship. Here is her report. This summer I was very fortunate to receive an international internship at Lloyd’s from the Illinois State University Katie School of Insurance and Financial Services. The internship allowed me and another Katie School student to follow members of the Lloyd’s market in London for four weeks. Before I took off for the UK I did some initial research and wrote a paper so I could better understand the workings of the London market. I thought I was as prepared as I could possibly be. When I got to London I experienced a completely different culture and way of doing business from what I was used to in the US. I was surrounded by professionals – some as young as me – who had been working at Lloyd’s for a number of years and knew much more than I could imagine about this unique marketplace. I was a little intimidated at first, but I soon immersed myself in their business lifestyle to learn as much as I could, ask as many questions as I could, and embrace a way of life different from my own. My education this summer at Lloyd’s has made me a better student of insurance, a better businesswoman, and a better person in general. My fellow intern, Bill Lally, and I worked with underwriters from Kiln, Beazley, Brit and Amlin, to name a few. We also followed brokers from firms such as Arthur J. Gallagher, Miller and BMS. Because I was able to see how these two aspects of the business work, I have a much better understanding of how the London market operates as a whole. I gained a new appreciation for the work the underwriters and brokers do, and how important their relationships are. Most mornings Bill and I would meet with the underwriter or broker we would be following that day at their office – generally located within a few blocks of the Lloyd’s building and relatively easy to find. They would tell us what they did and the role they played in the market, give us a tour of their office and introduce us to a number of their co-workers. Bill and I would explain where we were from, why we were there, and what we were studying in school. Many people were surprised to learn that we actually studied insurance in a formal program! Between 10 and 11 a.m. the streets would be filled with people dressed in suits headed to Lloyd’s – with Bill and I among them. Until lunch time, we usually split up and sat with different underwriters as they looked over accounts brought to their box by brokers. If we were following a broker we would accompany them around the Room as they presented risks to the underwriters. It was always very interesting to see the different types of relationships that had been established – some over many years – and the unique styles the brokers used with different underwriters as they presented them with the risks they wished to have insured. At about 1:00 p.m. every day Lloyd’s would clear out almost completely and we would head to lunch. I noticed that lunches were longer and more “relaxed” than those in the US. I quickly realized that this time was used for socializing, meeting with colleagues, and for forming or building upon relationships. Everybody was friendly, sociable and outgoing with one another, even if they were actually competitors in the marketplace. After lunch, it was back to Lloyd’s for another couple of hours to finish placing risks or writing risks left over from the morning. Although the days were long, I was able to learn so much about the different syndicates, the types of risks they wrote, and how they managed their relationships. Bill and I also had days where we did not sit with underwriters or follow brokers. Once, Terry Hayday of LMA took an entire day to show us around the Lloyd’s building, explain the architecture, and tell us some of the history of Lloyd’s. We even got to visit the Adams Room on the top floor! It is amazing to think about how long the market has been in existence and all of the different buildings and locations that have been home to Lloyd’s. Leaving the US for a whole month and experiencing another culture was definitely very exciting – if a little bit scary at times. Everyone I met at Lloyd’s went out of their way to make me feel at home and teach me as much as they could. This experience has already helped me to grow and mature as a person and will benefit me greatly as I begin my career in insurance. I had some of the best times of my life during the four weeks of my internship and I will never forget the lessons I learned and the people I met and worked with this summer at Lloyd’s of London. back to top

W.A. Schickedanz Agency – four generations and going strong Pictured L-R – Dave Miller CPCU, Robin Bryan CISR, Mike Miller, Suzie Guest, Steve Miller, Linda Duke, Jack Miller, Tina Juenger and Jack Heller. ALB member and Lloyd’s coverholder W.A. Schickedanz Agency is a four generation, family owned business with more than 75 years of knowledgeable, reliable service. The Schickedanz Agency has flourished, grown and expanded from a single agent selling life insurance to one of the largest managing general agencies in the Midwest. With three offices in Illinois and Arkansas, the agency provides trusted, professional commercial lines underwriting services across three states. The Schickedanz Agency is nationally recognized and holds both domestic and international underwriting contracts with multiple insurers. How they began W.A. Schickedanz moved, in the mid 1920’s, from selling life insurance in a nearby small farm town to the city of Belleville, Illinois. There he headed up the brokerage operations of an existing insurance agency and significantly improved the performance of his division. Seeking a more rewarding role, W.A. drew upon his experience and expertise and optimistically formed his own organization in 1930, the W.A. Schickedanz Agency. The new corporation received its first managing general agency contract in 1932 with Bituminous Casualty Corporation. Who they are now Continuing with the family tradition set by W.A. Schickedanz, the agency has brought together four generations of executives and underwriters. Mr. Schickedanz was followed into agency leadership by his son-in-law, Carl J. Miller, who joined the agency upon returning from World War II in 1945, and became the agency’s President in 1968. In 1969, C. Jack Miller, the grandson of the agency’s founder, joined the agency, becoming agency President in 1984, and currently serves as the corporation’s third president. Steven C. Miller, also third generation, joined the agency as an underwriter in 1972 and currently serves as executive vice president/secretary. Great-grandsons David A. Miller and Michael A. Miller are the most recent additions to the agency. David, current vice president and underwriting manager, joined the agency in 1998. Michael joined the agency in 2003 and is a commercial auto underwriter. The Schickedanz Agency has been an active member of the AAMGA for nearly 30 years. Jack has served and chaired several AAMGA Committees over the years. They believe the resources provided by the AAMGA enable their executives to efficiently interact and network with colleagues and associates from around the world. They see AAMGA sponsored events as opportunities to easily communicate with key players in the industry and to effectively build their business. The educational opportunities enable their staff and underwriters to stay abreast of the current trends and regulatory/compliance changes. The Schickedanz Agency understands it can be hard to get special insurance. They excel in these areas providing special insurance, such as liquor liability, trucking and transportation, workers compensation, hospitality, specialty healthcare, specialty contractors, garage liability, tow trucks and wreckers, and manufactured homes. They value their customers and extend a helping hand to accelerate their business in the right direction. You can learn more about the W.A. Schickedanz Agency at waschickedanz.com back to top

Receivable insurance is right on the mark in an unstable market by Jennie Cullen, Global Asset Connection Whether you believe we are – slowly – coming out of the worst economy since the Great Depression or headed for a “double dip recession”, trade credit insurance is the hot topic. The largest trade credit insurance companies have seen a record number of inquiries and applications. Trade credit (receivable) insurance, which covers nonpayment of receivables, has been a US product for more than 100 years. Interest in receivable insurance historically has peaked after a recession, but there is renewed interest because receivable insurance is not only of benefit when a claim needs to be paid. According to the PricewaterhouseCoopers latest CEO survey (conducted in the fourth quarter of 2009) 84% of the respondents reported that they anticipate making changes to the way they approach managing credit risk, with 41% indicating the changes will be significant Receivable insurance provides the tools to assist a company manage their risk and grow their sales. An important element of growing a business is offering competitive credit terms to customers. Receivable insurance allows companies to sell on open account and monitors the buyers - so if there is any change in a buyer’s situation, the policyholder is notified. The other set of “eyes and ears” is imperative now more than ever. Even if coverage is lowered because of an adverse change, the policyholder knows what he is dealing with and can adjust to cash up front. The insurance company will cover any unpaid outstanding invoices. Another opportunity to grow sales is to look at the export market. President Obama wants to double exports in the next five years and there will be more incentives for exporters. Receivable insurance allows a US company to sell safely anywhere in the world. The private carriers have automated systems where a policyholder can just as quickly qualify a buyer in Boston as in Beijing. It quickly assesses all aspects of an overseas transaction (company, country, business sector and political risk). Think of how that process can assist the CEO to monitor several areas of risk. Receivable insurance is much less expensive and not as onerous as a Letter of Credit. Who would you buy from – a company that says “Fine, I will ship immediately and you can pay in 90 days!” or “Fine, as long as we receive an irrevocable Letter of Credit from your bank”? Finally, and some feel this is the most important benefit, this insurance can improve a company’s financial situation to a lender. It gives the lender the comfort level to lend against foreign receivables and can ameliorate a customer concentration issue. In certain situations, the lender will give better borrowing rates. In 2008 and 2009, the carriers had to cut coverage dramatically and paid record claims. They are now underwriting risk in sectors that that the banks are still feeling squeamish about – such as automotive and retail. Today, companies are frightened and inertia is our greatest problem. Receivable insurance assists in day to day business by controlling risk, increasing sales and improving financial profiles. That is why receivable insurance is right on the mark in this uncertain market. Jennie Cullen, Global Asset Connection Domestic and International Factoring/Insurance/Collections/Financing 312 388 0728 \| jennie@gaconnection.net back to top

Sneak peek at the Lloyd’s Illinois renovation In the last issue, we told you that Lloyd’s Illinois was getting a makeover. Well, the carpenters have put down their hammers and the dust has settled! Lloyd’s Illinois is now fully operational in a bright, modern new space that embodies the international brand of the world’s leading specialist insurance market. We’re still located on the 38th floor in the landmark tower at 181 W. Madison. Architect Greg Tabb has spun the office on its axis, opened up spectacular views of Lake Michigan and the North Loop, created innovative collaboration spaces behind glass walls, and provided us with an open and sophisticated workplace. When you walk in the doors you know instantly that you are in an international office of Lloyd’s of London. We’re planning a formal open house in October, but please feel free to visit us any time to see our swell new digs – or you can get a sneak peek here. back to top

Insurance Associates run with Elvis! Pictured L-R – Christa Ferris, Chartis; Katie DuMoulin, Lloyd's; Megan Ware, Navigators; John O'Hara, Lloyd's; Elvis. The Insurance Associates recently participated in the 13th annual Elvis is Alive 5K race in Chicago, benefitting Girls on the Run - a non-profit prevention program that encourages preteen girls to develop self-respect and healthy lifestyles through running. 25 IA members and friends from A.J. Renner, Allianz, Chartis, Colemont, Crump, General Star, Genesis, Hartford, Lloyd's, Marsh, Navigators, R-T Specialty, Sedgwick, Travlers and Travis-Pedersen came out for the "running of the Elvi" along Chicago's scenic lakefront. The post-race party included performances by Elvis impersonators and a hotly contested "best dressed Elvis" contest. You can see information about IA and their upcoming charity and networking events here. back to top Views expressed in this newsletter do not necessarily reflect the opinion of Lloyd's or ALB. While every effort has been made to ensure that the information given is accurate, no responsibility (legal or otherwise) is accepted by Lloyd's for any errors or omissions. Copyright © 2010 Association of Lloyd's Brokers