All Industry Day 2016 Recap

Thu, 12/01/2016 - 18:19
by Mary Bonczkowski & Sherry Parker

On November 3, 2016, almost 500 insurance professionals gathered at Braden Auditorium, Illinois State University’s Bone Student Center for the 55th Annual Central Illinois CPCU Insurance All Industry Day.  This is a day set aside to bring insurance professionals together for education and to celebrate the achievement of 780 new Central Illinois designees into the CPCU Society.  A variety of speakers were brought together to inform the audience on topics related to the theme of this year’s program—The Road Ahead: Which Way to the Future.

The program for the morning was moderated by Dave Colee, Voice of the Big Red Marching Machine.  He elicited chuckles from the audience with his reminiscence of past Voice of State Farm days.  After reminding us of our history, he introduced each of the six speakers for the program with interesting details on their backgrounds and topics.

Adam Bennington, IT Analyst for State Farm SYS-Ideas@work.  Adam provided an overview of three Technology trends affecting insurance – specifically insurance in the age of Intelligent Machines.

  1. Machine Learning – a version of artificial intelligence, feeding the algorithms information to do simple tasks; but computers still have the inability to do many things that our brains do with visual cues. Chat bots are machine learning algorithms, in fact, they are able to handle very routine customer service requests.

  2. Big Data – fuels the engine, it is necessary for Machine Learning. It is about what we know about someone through all the minor interactions we have with technology. Essentially, big data helps insurers price and predict risk for customers.

Mobile Revolution and Evolution – for many of our customers, mobile devices are the entry point into their search of the insurance market. Mobile is making insurance claims operations more accurate and safer.

It will be interesting to watch as these technologies intersect more with our business.


Julia Molander, from Cozen O’Connor in San Francisco discussed Driverless Cars and the Impact on Insurance. She provided an overview of the history of Technology of Autonomous Vehicles (AV).  Google is leading the way in the technology with Tesla following. She shared some surprising examples from the trucking industry. One major reason for the trucking industry’s interest in this technology is safety, fuel and other cost savings. Regulation is maturing with the NHTSA released draft regulations in September 2016 to govern operation of AVs federally. They have identified 4 levels of autonomy. Currently, California is leading in the establishment of specific regulations. Major impacts of AV are impacts on safety, fuel consumption, congestion, social benefits of reduced stress, increased mobility for elderly and disabled, and a positive environmental impact due to less emissions. However, this comes with challenges: hacking, costly infrastructure upkeep, loss of control, ownership maintenance needs and governmental oversight over defects. There will likely also be economic disruption due to a loss of driving, oil and potentially insurance related jobs for claim adjusters and clerical workers. Liability exposures will shift to determine who is responsible for any damages including product liability, cyber insurance, and recall insurance. There may be a reduced need for personal auto coverage with impacts to the UM/UIM vs. no-fault coverage conversation, financial responsibility laws and impact of financial health of Insurers.


EllaKate LeFebre, Go-To-Market Analyst at State Farm, discussed Intelligent or Smart Homes and the Internet of Things. What they are, how they work and Insurance applications were the topics presented. Smart homes have abilities within 5 pillars: Fire, Water, Crime, Automation and Control and the newest capability - care for those in our families that we would like to provide assistance for – elderly parents for example. By 2020, it is predicted that 50% of U.S. homes will have a home automation solution. The most likely categories of growth in 2017 are connected cameras, video doorbells, smart locks, and connected light bulbs. Solutions are growing to include everything from 24 hour coverage to specific periods of time for monitoring while away on business travel or vacation. However, even with this technology there are hurdles for Smart Home Companies – price, value proposition, complexity of installation, too many products overwhelming potential customers and a lack of interoperability between the systems requiring more applications on your smart phone. Consumers want the system to be secure, easy to install, and monitored within a simple easy interface.


Michael McGrory, Partner from SmithAmundsen LLC discussed the Emerging Landscape of Legalized Marijuana.  From his presentation, it was easy to see his enthusiasm for being at the forefront of this issue.  As of the I-Day event, there were 25 states and DC which allow medical use, and 4 states and DC which allow recreational use. This is a real industry with real money - $7 billion in 2016 and anticipated up to $20 billion by 2020. But, the federal government still holds that this is a Schedule I Controlled Substance, along with Heroin and Ecstasy with a high potential for abuse. There is no currently federally accepted medical use and there is a lack of accepted safety for use. The DEA is researching movement to a Schedule 2 substance and the DOJ issued the Cole memo which outlines their concerns:  distribution to minors, criminal enterprises, drugged driving, violence and firearms. Illinois regulations are modeled after the Cole memo and have the Compassionate Use of Medical Cannabis Pilot program which will expire on July 1, 2020.  This conflict between federal and state law causes legal issues and stifles the growth of the industry.  Business owners face a number of hurdles:

  • All business must be contained within the state

  • Patents and trademarks are a challenge

  • Prescriptions are impossible, the doctor can suggest a patient is a candidate for cannabis but cannot directly prescribe

  • Another challenge for these businesses is related to taxes - they are not able to claim the usual business expenses as other businesses can

  • They cannot declare bankruptcy

  • Lawyers are not allowed to ethically advise their clients under the federal laws

  • Federal banking restrictions have driven cash only transactions

  • There is a struggle to provide insurance coverage due to the federal issues

Insurance carriers in this area need to follow both the Cole memo and recent Department of Treasury guidance. Regulatory themes include patient access, transparency, security, safety, location, packaging, recall, lab testing. Insurance issues remain in flux due to the federal vs. state views on this topic but, key issues are: Property/Liability Coverage, Product Liability, Employment, health Insurance and Workers Compensation.  Ultimately, these issues will be sorted out in the courts.                                                                                                                                                      


Dave Thomas, Vice President of Sales from the Institutes, began by recapping top challenges facing the industry – Technology, Talent Gaps and Big Data.


What is our role as a CPCU in our industry and in the Society?  We can mentor, guide and lead our colleagues in the pursuit of lifelong learning. We have an obligation to educate those around us about our industry. Through this we can build awareness of career opportunities in the industry. And most importantly, we are the ethical conduct standard bearers of the industry.  


The opportunities are out there for those who want them! The median age in our industry is about 10 years older than the general population, many of whom are approaching retirement.  As a result, the industry will need to fill 70,000 positions a year, but only 14,000 are pursuing risk and insurance degrees.


Dave shared a resource which educates students and young professionals about career options in the P&C Industry, including scholarships to support paid internships.


Our final speaker of the morning session, was Deirdre Manna, Vice President of Political Engagement and Regulatory Affairs, PCI. She discussed a series of Emerging Insurance Issues:

  • Auto Claim Frequency- while 70% of consumers think that auto accidents are declining they are not! In fact, driven in part by congestion, in the first six months of 2016, there was a 10.4% increase in auto deaths.

    • Litigation Environment for Commercial auto and liability limits play a role in the continued increase in litigation and claims in the commercial auto arena

    • True Motion study showed that 92% of drivers use phones or text while driving compared to AAA study that showed 66%

    • The top distracted driving app is Google Maps but YouTube is #5 and Netflix is #10

  • Cyber Insurance Market –

    • Increase in incidents but the number of records exposed was less

    • New York has a strong prescriptive program; requiring a cybersecurity program, policy and a Chief Information Security Officer.

    • National Association of Insurance Commissioners Cyber model is lagging, it weakens uniformity and exclusivity, it does have a no harm trigger for breach notices but has little support

    • Privacy – there were recent changes made to the Graham Leech Bliley Act which no longer require annual privacy notices but the states are slow to adopt these changes . Only 4 states have done so. This will ultimately eliminate this outdated and costly privacy notification requirement.

    • FTC brings enforcement action on bad cybersecurity, even if there is no breach

    • Federal Insurance Office (FIO) Auto Insurance affordability report is pending but thought to identify that insurance is unaffordable for significant % of minority and low income persons.

  • NAIC has a Big Data working group which is focused on regulations related to data vendors, new reporting requirements and new disclosure requirements. They are also interested in establishing regulator tools to monitor Big data in underwriting, rating, claims, and marketing.

  • Insuretech Innovation - start-ups that are connected to our industry

    • Roadside assistance

    • Home monitoring

    • Price comparison raters

    • Predictive analytics

    • Drones for underwriting and claim adjusting


After the speakers concluded, we adjourned to the Ball Room for recognition of the newest Central Illinois designees earning the CPCU certification.  Stanley Plappert, Secretary-Treasurer of the CPCU Leadership Counsel and Roni Goodwin, President of the Central Illinois Chapter of CPCU, presided over the conferment of new designees attending the conference. 


Following a delicious luncheon, Ray McElroy, former NFL Player and Chicago Bears Chaplain, gave a humorous yet thought-provoking talk To Boldly Go – Stepping Out of Ordinary into Extraordinary. His talk spoke to audience members regardless of the roles in our chapter, our companies or our families. He reminded us:

  • to have a mentality that you CAN go

  • to minimize the pressure that tells you that you CAN’T go

  • to mold a team that understands your goal but knows your fears and encourages you TO go

    And finally

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All in all, the 55th CPCU All Industry Day was a great success for all members and guests in attendance.  Special thanks to all the committee members for a job well done!


The 2017 All-Industry Day will be held Thursday, November 2, at Illinois State University’s Bone Student Center. Look for registration to open in late September!

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