Emerging Trends in the U S PropertyCasualty Insurance

Emerging Trends in the U. S. Property-Casualty Insurance Market AASCIF 2016 Annual Conference July 27 th , 2016 Bruce Fisher, CPCU Western Region Sales The Institutes 484 -831 -9077 fisher@theinstitutes. org 1 | The Institutes Risk and Insurance Knowledge Group

Agenda ► Property-Casualty Insurance Industry Trends - U. S Economic State - Job Trends - Technical Insurance Topics Ø Background on The Institutes ► Open Discussion Time 2 | The Institutes Risk and Insurance Knowledge Group

United States Economic Trend US Real GDP Growth Source: US Real GDP Growth Rate (2016). Multpl. Retrieved April 22, 2016, from http: //www. multpl. com/us-real-gdp-growth-rate 3 | The Institutes Risk and Insurance Knowledge Group

Property-Casualty Insurance Job Trends 10 Year Job Trend 2004 – December 2015 P&C/Reininsurance Agency/Brokerages All Employees (thousands) 1 150 1 100 1 050 1 000 950 900 850 800 750 700 650 600 550 500 450 400 2004 2005 2006 2007 2008 Source: Bureau of Labor Statistics December 2015 4 | The Institutes Risk and Insurance Knowledge Group 2009 2010 2011 2012 2013 2014 2015

Property-Casualty Insurance Job Trends Occupation Employment % of Total Agent & Broker 495, 000 31% Claims Policy Clerks/Processing 201, 430 12% CSRs, Raters, Service 185, 030 11% Claims Adjustment/Investigation 165, 360 10% Management/Operations 80, 810 5% Information Technology 68, 430 4% Underwriting 62, 620 4% Analysts 39, 330 2% Legal 29, 350 2% Reinsurance 25, 300 2% Internal Audit/Compliance 24, 520 2% Statistical/Actuarial 18, 870 1% Other 222, 000 14% Total 1, 618, 100 5 | The Institutes Risk and Insurance Knowledge Group Source: Bureau of Labor Statistics May 2014

Technology Advances and Trends Based on a 2016 survey of Institutes Community members: Top 3 Trends Affecting Our Industry: 1. Cyber security 2. Ride sharing 3. Predictive analytics Is Technology a Net Positive or Net Negative? 6 | The Institutes Risk and Insurance Knowledge Group

Technology Advances and Trends ► Telematics Providing potential for usage-based auto insurers to transform an emerging market and offer more differentiating services ►Drones Claims adjusters looking to use drone technology for inspecting claims ► Predictive Modeling The number of companies looking to broaden their use of predictive analytics is on the rise. ►Cyber Risk Cyber risk threats include theft or manipulation of sensitive or private information, computer fraud and viruses 7 | The Institutes Risk and Insurance Knowledge Group

Technology Trend: Data Analytics ► Insurance has always been a data- and technology-driven business. ► Data analytics has become a growing technology trend. ► Professionals need to know how to collect large sets of data and critically analyze their findings for: – Easier collaboration within your organization – Identification of ideal customer and product matches – The purpose of monitoring risk in real time 8 | The Institutes Risk and Insurance Knowledge Group

Industry Pending Talent Gap The industry is facing an impending workforce shortage. ► Our industry is currently 2. 5 million strong and growing steadily. The median age is about 10 years older than the general population, so a large number will retire in the not-so-distant future. ► The Bureau of Labor Statistics estimates that 730, 000 positions will need to be filled between now and 2024. ► Our industry is competing for top millennial talent with better-known industries. 9 | The Institutes Risk and Insurance Knowledge Group

About The Institutes We are the knowledge partner that best empowers risk management and insurance professionals to help those in need. ► ► ► Designations (CPCU, AINS, ARM) Certificate programs Online courses Continuing education (CE) courses Custom Solutions 10 | The Institutes Risk and Insurance Knowledge Group

Why Professional Development ► Demonstrates your commitment to the industry ► Improves your insurance knowledge and builds self-confidence ► Enhances your professional image ► Improves career opportunities and advancement What Our Students Say: 93% Received increased technical knowledge 90% Added value to their organization 83% Feel prepared for long-term career goals 11 | The Institutes Risk and Insurance Knowledge Group

Institutes Top Designation Programs 146, 500 67, 000 46 000 29 000 AINS CPCU 12 | The Institutes Risk and Insurance Knowledge Group AIC ARM

The Institutes’ Professional Development Offerings As technology and our industry advances, the need for professional development grows” The Institutes’ education offerings provide: ► Self-study options and a flexible learning environment ► Online courses delivered through a digital platform ► Topics ranging from risk management, claims, underwriting, accounting, management, information technology and more 13 | The Institutes Risk and Insurance Knowledge Group

The Institutes’ Professional Development Offerings The CPCU Society A professional community that promotes lifelong learning and development of risk and insurance industry professionals through offering: ► Industry events and workshops ► Networking through local chapters and interest groups ► Current industry news sources, webinars, and publications 14 | The Institutes Risk and Insurance Knowledge Group

The Institutes’ Professional Development Offerings The Institutes Community The only online social platform where you can connect with and learn from over 150, 000 industry professionals ► Offers networking, career advice, inspirational stories, and more! 15 | The Institutes Risk and Insurance Knowledge Group

My. Path, the Collaborative Industry Solution 16 | The Institutes Risk and Insurance Knowledge Group

Millennial Research 17 | The Institutes Risk and Insurance Knowledge Group

Millennial Research Millennials’ career drivers include: • Making a difference in their communities • Opportunities to help people • Job availability and stability • Ability to balance life and work 18 | The Institutes Risk and Insurance Knowledge Group

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My. Path Marketing Industry marketing goals: • • Motivating the industry to get involved in the My. Path effort Amplifying awareness of our existing efforts Current publication placements include: 29 | The Institutes Risk and Insurance Knowledge Group

My. Path Marketing Multichannel marketing approach to reach: • Millennials ages 18 to 27 • Currently in college or entering their first job postschool (including straight-to-work high-school graduates) Launch awareness campaign to: • Appeal to emotions that resonate with millennials • Garner awareness of what the insurance industry offers 30 | The Institutes Risk and Insurance Knowledge Group

Get Involved With My. Path • Be an advocate • Sign up for the My. Path industry newsletter • Create partner profile • Add internships and scholarships • Add industry videos and other relevant content • Submit blog articles 31 | The Institutes Risk and Insurance Knowledge Group

Get Involved With Millennials CPCU Society membership allows you to get involved with millennials through: • CPCU-Loman Education Foundation • Invite students/interns to local chapter meetings • Collegiate Studies for CPCU program • Mentoring • My. Path 32 | The Institutes Risk and Insurance Knowledge Group

Find out more: www. Insure. My. Path. org Contact us at: Contact. Us@Insure. My. Path. org 33 | The Institutes Risk and Insurance Knowledge Group

Knowledge Assessment Solutions (KAS) 34 | The Institutes Risk and Insurance Knowledge Group

KAS Customers’ Knowledge Gaps • Need to figure out the gaps • Need to fill those gaps • Need to be efficient Our Solution - KAS • Pre-assessments on selected topics • Gaps identified • Solutions offered to fill gaps 35 | The Institutes Risk and Insurance Knowledge Group

Examples of KAS Topics Good Faith Claim Handling Assessing and Controlling Property Loss Exposures Commercial Property Homeowners Personal Auto 36 | The Institutes Risk and Insurance Knowledge Group Workers Compensation CGL Commercial Auto Insurance Overview and Marketing Property Loss Exposures Risk Management Insurance Contracts

KAS – How it Works 1. Take Online Assessment 5. Employee takes a postassessment 4. Employee takes Course 37 | The Institutes Risk and Insurance Knowledge Group 2. Assessment scored & reported to employee 3. Employee automatically enrolled in required course

KAS – Individual Results Individual results indicate the knowledge level on that topic: Development Necessary Solid Understanding Excellent 38 | The Institutes Risk and Insurance Knowledge Group

Company Report – Distribution of Scores Assessment – Risk Management Overview Assessment date: October 20 xx The results from the Risk Management Overview assessment taken by your employees are shown below. The average score was 77. The range of scores was a low score of 37 and a high score of 100. 32% 23% 21% 5% 11% 8% Below 50 50 to 59 60 to 69 70 Solid to 79 80 to 89 90 to 100 Development Necessary Below 70% 39 | The Institutes Risk and Insurance Knowledge Group Understandin g 70 -89% Excellent 90 -100%

Company Report – Results by Topic Types of Loss Exposures The Risk Management Process Selecting the Appropriate. . . Risk Management Costs and. . . Present Value and Discounting Implementing Risk. . . Identifying Loss Exposures Feasibility of Risk Mgt. . . Analyzing Loss Exposures A Risk Management Program 40 | The Institutes Risk and Insurance Knowledge Group 76% 84% 90% 43% 49% 77% 69% 94% 91%

It’s all about making the connections!!! 41

Questions? 42 | The Institutes Risk and Insurance Knowledge Group