UNIVERSITY OF ILLINOIS

FINANCE 230

INTRODUCTION TO INSURANCE 

PROFESSOR STEPHEN D’ARCY

PROPERTY & CASUALTYINSURANCE BROKERAGE

Guest Speaker:

SCOTT STRICKLAND, CPCU, ARMSENIOR VICE PRESIDENT

Brown & Brown Insurance, Inc. Seattle, Washington

UNIVERSITY OF ILLINOISCHAMPAIGN-URBANAWOHLERS: ROOM 141

10:00 AM Friday - October 6, 2006

• Introduction

• Scott Strickland-Background & Experience

• Brown & Brown Overview

• Property & Casualty Insurance Brokerage

• B&B Career Opportunities

• Insurance Humor?

• The End

Introduction

Background/Experience

Scott Strickland, CPCU, ARM

Scott Strickland

Scott Strickland

Scott Strickland, CPCU, ARMSenior Vice President

Education: • B.A. Finance from University of Illinois, 1974

– Emerson Cammack, 8 Hours Insurance including this course

• M.B.A. from University of Michigan, 1976• Associate in Risk Management (ARM), 1985• Chartered Property Casualty Underwriter (CPCU), 1986• Certified Public Accountant (CPA), 1979 Inactive, 7/1/03

Scott Strickland

Professional Experience: • Brown & Brown of Washington, Senior Vice President,

Account Executive, 2001 to Present• Raleigh, Schwarz & Powell, Inc., - Senior Vice President,

1991 – 2001• Addington, Baldwin & McDaniel, Inc., Producer, 1986 - 1991• Safeco Insurance Company, Special Risk Underwriter, 1984 -

1986• Alexander & Alexander, Inc., Seattle, Producer, 1981 – 1984• CNA Insurance Companies, Chicago, Risk Management

Consultant, 1976 - 1981

Scott Strickland

Specialties: • Risk Management• Construction• Social Service Agencies

Industry Service: • Course Instructor, ARM• Published Articles and Association Seminars / Speaker• Member: Puget Sound Chapter of CPCU’s, American Institute

of CPA’s, Washington Society of CPA’s• Insurance Agent and Broker Licensed in the following states:

WA, AK, AZ, CA, IL, MA, NM, and NY.

Scott Strickland

Community Service: • Member

– Washington Asphalt Pavement Association– Washington USL&H Workers’ Compensation Assigned Risk

Plan – Audits & Investments

• Past Officer– USL&H Governing Committee – Treasurer 4 years– Washington Society of CPA’s – Group Insurance 10 years

• Community Psychiatric Clinic – Board of Trustees, Treasurer 6 years

Brown & Brown Insurance, Inc.

http://www.brown-n-brown.com/contacts.html

Brown & Brown

• At Brown & Brown (B&B), we know that we must be as agile as the cheetah in order to thrive in the currently very competitive insurance environment. Our unique culture has enabled us to quickly chase down new opportunities, adapt our products and services to best meet market demands, and satisfy our many and varied clients.

• Our drive to be the best has made B&B one of the

largest and most respected independent insurance intermediaries in the nation, with over 67 years of continuous service. The Company is ranked as the sixth largest such organization in the United States by Business Insurance magazine.

Brown & Brown

• Brown & Brown is one of the selected companies that make up the Standard & Poor’s Mid-Cap 400 Index. FORBES magazine ranked Brown & Brown at #48 on its 2005 list of “America’s Best Small Companies.” FORTUNE magazine ranked B&Bsm at #69 on its 2004 list of “America’s Fastest Growing Companies.”

• In 2004, 2005 and again in 2006, Brown & Brown has been designated as a Mergent's Dividend Index Achiever. This distinct honor is based on a record of 10 or more consecutive years of dividend increases, which has been achieved by less than 3% of U.S. listed dividend-paying companies.

Brown & Brown

PC Insurance Brokerage

Property Casualty Insurance Brokerage

PC Insurance Brokerage

– “Captive or Direct Writer Agent vs. Independent Agent”• Personal Lines vs. Commercial

– Personal - Homeowners, Auto» State Farm, Allstate, Geico, Progressive, Farmers

– Commercial-PC, Surety, Marine» CNA, Chubb, Lloyds London etc.

– “Retailer”• Agent-Represents Insurer• Broker-Represents Insured / Client

– “Wholesaler”• Surplus Lines Broker

– “Filings with Association / Regulator• Managing General Agent

PC Insurance Brokerage

– Client Advocacy to Insurer• Specifications-Identify Risks-Exposures to

Loss to Underwriters• Translator Between Management & Insurer

– Operations Summary» Annual Report/10K etc.-Websites» Private Companies-Start Up» Management Background

– ACORD & Supplemental Applications– Insurer Loss History-5 + Years– Establish Premium Exposure Base

PC Insurance Brokerage

• Coverage– Interpreter of Coverages to Management

• Claims– “Find” Coverage in the Event of Loss

• Safety– Interface on Risk Control Issues between Insured and

Insurer• Premium Audits

– Resolve Disputes on Manual Interpretations– Insurance Brokers and Agents of the West

• http://www.ibawest.com

PC Insurance Brokerage

Brown & Brown CultureHonesty and integrity are cornerstones of the Brown & Brown (B&B) culture.  The Company's reputation depends on the conduct of its representatives. All persons who are associated with the Company are expected to conduct themselves professionally and ethically in the course of their duties, and to comply with all laws applicable to the Company's operations. At Brown & Brown we know that the price of integrity is eternal vigilance.

PC Insurance Brokerage

– Importance of Broker Honesty & Integrity– Fraud Potential-Insurance Brokerage

• Risk of Loss-Accident / Occurrence Relatively Low

• Collect Premium Today – Promise to Pay Loss in Future

– “Long Tail” Business » General Liability-Products Liability» Wraps / OCIPS / Construction Defect (10

year Statutes of Limitation / Repose)

PC Insurance Brokerage

– Complexities of Insurance Contracts• Delete Exclusion, Deceptive Marketing

– New York Attorney General Elliott Spitzer• Conflicts of Interest• Sanctions, Fines, Penalties

– Large Brokers-Marsh, AON, Willis, Gallagher– Insurer Complicity-AIG, Zurich,

– Security-Insolvency / Bankruptcy• State Regulatory Environment• Insurance Accounting GAAP vs. Statutory

Accounting

PC Insurance Brokerage

– Producer Client Experience• In-Terminal Services, Chicago– Largest

Intermodal Container Handler• Malcolm Drilling , San Francisco– Largest

Drilling Contractor• University of Michigan-Hospital Med Mal• Disney World-Orlando

– Workers’ Compensation Wrap

• Asphalt Paving– Superior Asphalt – Washington– WWC – New Mexico

PC Insurance Brokerage

• Manson Construction – Largest Marine Contractor– Port of Jacksonville, Florida– http://www.jaxport.com/sea/mol.cfm– $140 Million Construction Project– Insurance Requirements

» General Liability» Marine Liability – Protection & Indemnity» Workers’ Compensation – Including: Florida State

Act, US Longshore & Harborworkers’ Act, and Jones Act-Seamen

» Pollution Liability» Excess Liability» Builders’ Risk – Property in Course of Construction-

Florida Wind/Flood

PC Insurance Brokerage

– Brokerage Positions• Management, Producer, Account Executive,

Marketing

– Sales and Service• Compensation – Client Fees and Insurer

Commissions– 40% of New Business– 20% of Renewal Business

• Specialization – Contract Review– Construction – High Risk

PC Insurance Brokerage

– Relationships• Clients

– Senior Management» President, CFO, Controller, Risk Manager» Goal Move From Service Provider /

Commodity to Management Team

• Underwriters– Mutual Trust– Partnership vs. Adverse Roles

Our desire is to attract and retain the best talent in our business. If you think you'd like to run with our team of athletes, please contact Brown & Brown, Inc. See B & B Career Videohttp://www.bbinsurance.com/careers.shtml

 

Insurance Careers

Tonight 7 PM at Illinois Soccer Stadium (near softball tennis facilities by South Farms) Illinois Soccer hosts Minnesota and again on Sunday at Noon against Ohio State.

Come Support the # 1 Big TEN Fighting Illini!!!

Beer drinkers beware: 4 percent of U.S. hops crop burnsPOSTED: 9:53 a.m. EDT, October 3, 2006

YAKIMA, Washington (AP) -- Federal investigators were set Tuesday to begin an investigation into a fire that ruined about 4 percent of America's yield of hops, used as flavoring in the brewing of beer and ale.

The fire started shortly before noon Monday in a 40,000-square-foot (3,600-square-meter) warehouse operated by S.S. Steiner Inc., one of the four largest hop buyers in the Yakima Valley of central Washington. By mid-afternoon flames engulfed most of the building, sending up plumes of smoke and a pungent aroma.

The End