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Upfront: March 2015 | Canadian Insurance
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Upfront: March 2015

If you are a certain kind of geek, John Chew is your hero, mainly because he has a really cool job. He’s co-president of the North American Scrabble Players Association, as well as a director of the Toronto Scrabble Club. He also gets to work on a freelance basis organizing tournaments, mainly in Europe and Southeast Asia, for people who need his particular expertise in running large-scale events. Ah, we know what you’re thinking: maybe Chew is taking Scrabble on some kind of goodwill ambassador gig into dangerous spots, where they’re “balancing their racks” in eastern Ukraine and “brailling” tiles in Laos. Maybe there’s intrigue! After all, the running joke used to be that these folks were NSA (National Scrabble Association) before the group’s name was changed.

No drama, no danger—but there is a cultural divide, which Chew chalks up to “the fatalism of Eastern philosophy, and the litigiousness of Western cultures.” He says if he’s running a tourney in Malta or Japan, the venues don’t make a big deal out of insurance, whereas in North America, even small churches and community centres are now under “some pressure from their insurers to make sure that they pass on as much of the liability as possible to renters.” What could possibly pose major risks to this community of fairly sedate but dedicated gamesters, who tend to skew ever so slightly into the older age groups? Apart from say, a slip and fall on a wet church basement floor?

Truthfully, not much. Of course, folks do get upset over the dictionary, which needs to be updated every so often. Prison inmates are passionate about their Scrabble, and there have reportedly been “violent altercations involving the acceptability of words, and in fact, fatalities.” But hey, that’s Oz (which is not an official Scrabble word, by the way).

Reputational risk, however, is a factor. Chew says a blanket liability insurance policy “was a condition on our obtaining a license to use the Scrabble trademark… When we were starting up and we wanted to use the Scrabble license, the trademark owner quite correctly said, ‘Well, we want to make sure that you’ve got adequate insurance coverage so if something happens, and you are using the Scrabble brand, that it’s your insurance that covers it and not ours.’”

Then because of a national championship, they frantically needed coverage for all Scrabble activities at all 200 clubs and 400 tournaments and major events across Canada and the U.S— and they needed it “tomorrow.” When Chew’s business partner and co-president based in Dallas, Chris Cree, looked for it, “The first few places just laughed at him and said, ‘We would have no idea how to price such a thing, nobody’s ever issued such a policy before. We need to know everything there is to know about you and you have no history.’”

No one is laughing now. As it turns out, Chris Cree is a high net worth individual—and as our loyal readers will remember from our last issue, doing it right on the personal side can lead to commercial line business. According to Chew, Cree finally found one local broker and said, “If you guys agree to issue an insurance policy for my Scrabble association, then I will transfer all of my existing insurance business to whatever companies you choose.” Within a couple of hours, “there were five or six agents in his office selling him this, that and the other thing.”

Alas, the coverage doesn’t extend to Chew’s travels, which fall under personal trips, even if he’s working for the great cause of letters with scores. He’s already been to the UK, Austria, the Czech Republic, Spain, Malta, India, Malaysia, Thailand and Japan. Scrabble is “huge” in Nigeria, and Thailand and Nigeria are just a couple of places where Scrabble is actually part of an educational curriculum—there are places where you can get a Scrabble scholarship to go to university. But Chew won’t be booking a flight to Lagos any time soon. As the home of infamous corruption and Boko Haram, it’s on his “personal no-fly list. I’ve been invited repeatedly to go there, but I just duck out of it.”

Oh, and just so you know, the word, “broker,” is worth 12 points in Scrabble.

TRADING PLACES

Expanding its new Canadian operation, Berkshire Hathaway Specialty Insurance has appointed Amanda Sorsak to lead its Property & Energy Claims operation in Toronto. Sorsak comes from Allianz Global Corporate & Specialty, where she worked as executive general adjuster. Sorsak is also licensed professional engineer.

Jonathan AdkissonHeading up Esurance’s Canadian branch as president and COO is Jonathan Adkisson, who has served as Esurance’s CFO since 2003. Prior to joining the company in 2000, he worked in cat management, corporate financial analysis and actuarial at Farmers Group. Esurance expanded into Alberta in February.

Christine LaSala has been named chair of Willis North America. She joined Willis this past July, and in October, she began serving as global head of client advocacy. She will continue to fulfill those responsibilities along with her new position. LaSala is replacing Vic Krauze, who left the company at the end of February. Willis has Canadian offices in Montreal, Toronto, Calgary and Vancouver.

Self-Reflection…With Calculators

Saskatchewan’s Bill 117 is a funny thing. It’s designed, in part, to keep brokers from offering bribes… which made us wonder, does the province really need a legislative act to tell brokers not to slip a few seaplanes or even C-notes to prospective clients?

“This legislature appears to be concerned with outlawing this behavior as a general matter,” says Carol Lyons, a lawyer at Bay Street law firm, McMillan, adding that her firm isn’t aware of “any specific cases” of brokers offering bribes. Given that many brokers sell insurance on commission, the legislation is designed to prevent the public from being “improperly induced” to buy insurance they don’t need or doesn’t provide the right coverage.

Lyons also points out Saskatchewan’s laws currently prohibit life agents from coercing potential customers, and the update only mirrors current unfair practices regulations in other provinces’ legislations. “A somewhat similar concept is contained in the Criminal Code, which prohibits ‘secret commissions,’” she says.

The bill as a whole was drafted with a “consumer protection type of a slant, much more so than the old Insurance Act in Saskatchewan, which has been in place since the 1970s,” says Tim MacLeod, general counsel at SGI.

The bill will also require insurers to conduct self-evaluative compliance audits if requested by the province. Since the focus of insurance regulations on compliance matter is a relatively new phenomenon, Lyons says, “Self-evaluative audits are a significant change in terms of handling new insurance matters.”

I SEE RED

Canadian Insurance in the 1970s seemed unusually preoccupied with pickets. In its October 1971 issue, it put out an article—and guess which way the bias swayed—“Are the companies sitting ducks for trade union organizers?” For January 1973, it worried about the Canadian Labour Congress choosing Toronto as “the target city for a major white collar organizing campaign.” It didn’t seemed consoled by its own reported statistic that only 0.6 percent of employees in insurance, finance and real estate were carrying union cards. The very next month, the magazine shrieked on its table of contents: “Collective bargaining treason?” followed by the article anxiously titled, “Unionization inevitable?”

By The Numbers

$1 Billion Minimum amount of liability insurance that federal railway companies transporting large amounts of dangerous goods must buy under the new safe and accountable rail act.
(source: Transport Canada)
$13 Billion Valuation of airbnb. Most general homeowner insurance policies don’t cover short-term rentals, and airbnb’s host guarantee leaves out cash, art and jewelry.
(source: CBC and Financial Times)

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Copyright 2015 Rogers Publishing Ltd. This article first appeared in the March 2015 edition of Canadian Insurance Top Broker magazine