Change Managers

2016 Insurance Executives to Watch

Insurance business leaders in 2016 will be expected to both manage change and drive it.
By: | December 14, 2015 • 20 min read

This is not an easy time to run an insurance business; not that there ever was one.

An extended soft market that shows no signs of letting up is putting pressure on carriers. That pressure from one side is being doubled by pressure from another. Investment returns are much less than what carriers realized a few years back.

Add to that burning risks like cyber and global political instability that create more unknowns on top of what we already know to be painfully true.

These times call for tough decisions.

In this issue, we focus on insurance executives who have their work cut out for them in the coming year. The aforementioned market pressures mean that a number of our choices are executives at the CEO-level. Some big deals, led by the CEOs, are in the works and we expect to see more.

The push for scale is pressuring some carriers to acquire other carriers.


Deals that double or triple revenues look pretty in press releases. But those charged with the task of combining cultures and keeping customers know that the real work begins once the acquisition is finalized.

And what goes on once companies combine can be anything but pretty. Mishandle the merger or fail to marry cultures and what looked like a union made in heaven can give one a painful feeling of buyer’s remorse. Losing customers on top of the failed marriage can double the pain.

Mega-mergers — risky as they are — aren’t the only thing on the minds of insurance leaders. The talent question: how to recruit, retain and best employ talent is another challenge.

It’s a fact that there isn’t enough talent coming into this industry to fill the ranks of those leaving it.

The pressure has become even greater to put retained talent to its best use.

The task of these executives, under these conditions, is not merely to do a good job. That won’t cut it.

The task is to do a superlative job.


Further, Faster

122015_01_CS_EGreenbergEvan Greenberg
Chairman and CEO
ACE Ltd.

ACE Ltd. will complete the acquisition of Chubb in the first quarter of 2016, combining a business with $97 billion in assets with one of $51 billion in assets.

The combination of ACE’s global footprint with Chubb’s strengths in mid-market commercial, surety, specialty and high net worth relationships promises to be a strong one.

“We believe the combined company will have enhanced growth and earning power compared to the two companies on a stand-alone basis,” ACE officials wrote in its third quarter 2015 filing with the Securities and Exchange Commission.

Insurance observers are watching eagerly to see how the ACE leadership team, led by CEO and Chairman Evan Greenberg, will move to push the respected Chubb brand into Europe and beyond.

The Chubb deal might have distracted some of us from the fact that earlier this year, ACE bought the high net worth business of Fireman’s Fund, picking up assets of almost $750 million. As an indication of how market pressures are driving executive decision making, ACE’s strong move into the high net worth realm is an interesting one.

Within the space of a year, ACE has greatly increased its presence in the high net worth arena and has added a highly respected brand to its stable. It might take a couple of years for Greenberg and ACE to incorporate Chubb’s team into their culture. But Greenberg and his team are well-known for being very quick movers.

“Quite frankly, ACE moves as fast as any company I interact with,” Marsh’s Peter Zaffino told us in 2014.

We’ll be watching for more swift action from Greenberg and ACE in 2016.


Talent in Numbers

Madhu TadikondaMadhu Tadikonda
Chief Underwriting Officer, Commercial

Lots of insurance leadership moves were made in 2015 with an eye to the future.

Perhaps none so bold as AIG’s, which moved Madhu Tadikonda, its chief science officer, commercial, into the position of commercial chief underwriting officer.

It’s not an appointment being made in isolation. Under the guidance of John Doyle, the CEO of AIG’s commercial operation, the company has been adding science and engineering talent by the fistful over the last couple of years.

“Madhu is an outstanding leader who has led the development of data-driven tools in insurance and other industries,” Doyle said of the appointment.


Relatively new to insurance — Tadikonda joined AIG in 2013 — and to an underwriting position, Tadikonda said he sees much to admire in this industry.

“Every commercial entity — across geographies, size, etc.  —  is managing its core risks through insurance and that means the industry has an ability to partner with clients on its most crucial issues,” Tadikonda said.

“That is a very compelling and powerful place to be,” he added.

The Princeton graduate and Stanford MBA also said he finds the long tenures of many insurance professionals unique.

“From a talent perspective, one of the things that has surprised me is that most senior insurance leaders have been in the industry their entire careers, and there is a lot less import/export of individuals and skill-sets that I’ve seen in other areas,” he said.

“I think that creates an opportunity for the insurance industry, as I believe experts from other industries could have a lot to add to carriers,” he said.

Tadikonda said his chief challenge will be finding the right mix between data insights and underwriter judgment.

“We have uncovered a number of interesting patterns and trends by mining AIG’s historical data,” Tadikonda said.

“That is a great guide for underwriting. But, given the markets that AIG plays in, that is not enough. The input and perspective of the experienced underwriter needs to be woven in.”


Guiding Growth With a Steady Hand 

122015_01_CS_JCelluraJoseph Cellura
President, North American Casualty Division
Allied World Insurance Co.

In 2008, Joe Cellura joined Allied World, eventually growing into the role of president of Allied World’s North American Casualty division with $50 million in annual written premium in excess casualty and a 10-member team. He hit the ground running and hasn’t slowed down since.

Rolling in additional units, launching products and expanding geographies (including Bermuda), that business grew to $800 million in 2014, and is on track to exceed that in 2015. The Allied World North American Casualty team now numbers 120.

Construction, design and engineering make up a sizeable portion of the business that Cellura oversees. With recovery now in full swing, that business will continue to keep underwriters on their toes, he said, with widespread adoption of alternative project delivery methods such as design-build as well as public-private partnerships.

“You start getting into those relationships — there are a lot of long-term complexities to make sure you’re accounting for. It continues to challenge the underwriters to really understand the risks that they’re bearing in the programs they’re putting together.”

Cellura is focused not just on growing the business, but growing it wisely.

“The key is to continue to build the infrastructure to support the business and be good stewards of our commitment to service and promise to pay claims. I’m focused on efficient systems, claims and data management. … It’s a long-term commitment to your customers and to your shareholders so you’ve got to be able to serve that business for a long time.”

Another key to managing growth is not allowing the business to spin off into distractions and excess complexity.

“The strategy is to keep it simple,” said Cellura. “It’s one of the toughest things growth company managers face. How do you maintain what made you great and continue to give people professional growth opportunities without creating a matrix organization with layers of managers managing managers?”


Track Record of Success

122015_01_CS_DCohenDavid Cohen
President and Chief Underwriting Officer
Aspen Insurance

David Cohen is bringing his specialty insurance insights and his track record of success in building business to Aspen, where he will work with Aspen Insurance CEO Mario Vitale to continue the company’s profitable growth.

“Aspen is a true underwriting company,” said Cohen, who formerly was president-USA, Liberty International Underwriters, and chief underwriting officer, LIU Global Casualty. “It was founded by underwriters and it is driven by achieving superior underwriting results.”

As president, CUO and a member of Aspen’s group executive team, Cohen said he is “looking to broaden the product set and expand geographical distribution of key products in the right markets. … Innovating effective approaches to emerging exposures, like cyber, is something we do well and we intend to focus on this even more in the future.”


While not discounting the challenges of “overabundance of competition” and the soft market, he is convinced Aspen can continue its sterling results in the U.S., which is on track to exceed $600 million of net earned premium in 2015 and an expense ratio of less than 16 percent.

“The margin for error is small when there is such pressure on terms and conditions,” he said, noting, however, that Aspen’s product diversification, geography and “underwriting and claims talent” are crucial in any market conditions.

He said there are still “great opportunities for profit,” but it requires exploring new product areas and expanding geographical distribution of key products, while exiting unprofitable lines.

Also important, Cohen said, is “finding the best way to exploit data via analytics [which] is both an enormous challenge and a tremendous opportunity.”

“It’s not easy to continually improve consistency and quality in underwriting and claims handling, but we are doing that and I’m convinced those qualities — much more than a low price — are highly valued by insureds and brokers.”


Leveraging New Company’s Combined Strength

122015_01_CS_JToccoJoe Tocco
Chief Executive, Americas
XL Catlin

The unification of XL and Catlin created a powerful insurance provider. Joe Tocco, previously the chief executive of XL’s North American property and casualty businesses, assumed the role of CEO of XL Catlin Americas region on May 1, 2015, which entails the oversight of 49 offices and more than 1,800 employees.

“One of the biggest challenges I’ve faced since that day is the integration of the two teams,” Tocco said, “but it’s been a rewarding experience because both groups are comprised of talented and well-respected underwriters.”

A second challenge has been the added responsibility of Latin American business, a new region for Tocco.

“We have done great work in Brazil, and are continuing to invest in Mexico. We’re looking to build up some scale and open insurance operations in several other Latin American countries, hopefully within the next 12 to 24 months,” Tocco said.

He will also nurture a company culture that “breeds innovation” in creating more unique solutions for clients. For example, XL Catlin recently partnered with leading cyber breach response providers to offer a broader solution for clients seeking that coverage.

“We’ve done work in advanced fuel cell technology, and some new product recall products as well,” Tocco said.

Market disruption, largely driven by heavy M&A activity, is a top concern for 2016, but could also open the door for new opportunities.

“We have over 30 lines of business. We’re a leading provider of a number of products. We can issue policies in more than 160 countries,” Tocco said.

“We have the flexibility to pull the lever on businesses that will be more profitable, and slow down those that won’t be.”


A New Way of Doing Business

122015_01_CS_BDuperreaultBrian Duperreault
Hamilton Insurance Group

Brian Duperreault has a long history of taking on big projects that had a major impact on the industry.

His move to acquire Cigna’s commercial property/casualty business when he led ACE is one example. His bold leadership to help Marsh & McLennan recover following the financial crisis is another.

Duperreault, CEO of Hamilton Insurance Group since 2013, helped transform Bermuda into a global insurance center, beginning in 1994 when he took over at ACE. Now, he’s setting his sights on London and the United States.

In London, Lloyd’s Syndicate 3334 was acquired by Hamilton in April 2015. A narrow niche player, Hamilton plans to diversify the portfolio by adding lines like Space, Professional Lines and Treaty Reinsurance, creating a relatively traditional Lloyd’s syndicate.

For the U.S. operation, Duperreault is focusing on “a more technologically advanced approach to accepting business and placing business.”


“The fact is the industry model in the U.S. is highly expensed. Business acquisition and management run to 30 percent — a percentage that few industries would accept.”

Duperreault wants to effectively apply the “wonderful world of data science” to the business.

That means using data to assist potential insureds in applying for insurance as well as using “algorithmic science to make [underwriting] decisions.”

“We are not inventing new products, we’re improving the way we provide them,” he said, noting that his U.S. operation in Princeton, N.J., targets the insurance needs of small and midsize enterprises.

While he may “someday” take Hamilton public, his current plan is to grow organically, and find U.S. partners “who share our vision.”

“We have found a number of producers who want to change,” he said. “They recognize that the way we do business has to change and they want to be a part of it, not a victim of it.”


Uncommon Perspective

122015_01_CS_NGoodwinHiscoxNicole Goodwin
Chief Underwriting Officer
Hiscox USA

This past summer, Nicole Goodwin was appointed chief underwriting officer of rapidly growing Hiscox USA, which primarily specializes in serving small and middle-market businesses with less than $1 billion in annual revenue. Hiscox’s core professional liability and small commercial products are driving year-on-year growth, both in the broker channel and in its direct-to-consumer business.

Goodwin will help lead the company’s push towards scale with deeper market penetration in key areas. She noted that there are a myriad of opportunities for the company to expand its footprint.

“Despite our fast, profitable growth, we still see ourselves as only a blip on the screen relative to the opportunity,” she said.

“Cyber is an area in particular where that rings true. Hiscox was one of the first markets to underwrite cyber and hacker business interruption and has been doing so consistently for nearly 20 years. With the exponential growth we are seeing in that marketplace, we believe our heritage and expertise in that area will allow us to compete well against the flood of new, first-time market entrants into that space.”

Goodwin has blazed an uncommon trail to the CUO’s seat. Until 2004, she practiced law in San Francisco, focusing on emerging technology, privacy and IP-related risk analysis and counseling.

She joined Hiscox as divisional counsel to the company’s Technology Media & Telecoms division. Most recently, she served as the head of U.S. Claims.

“I don’t come from a traditional underwriting background so I probably feel I have more to prove than the average CUO,” said Goodwin.

“But [I have] a natural curiosity about how we, the marketplace, our customers and partners behave and think about the world and risk often provides sources of new ways of innovating to solve problems internally and externally.”

Feeding the talent pipeline in the face of rapid growth is one of the most immediate challenges Goodwin has been facing in the early months of her tenure as CUO, but she readily admits, “It’s a pretty first-class problem to have.”


Looking East

122015_01_CS_KKelleyKevin Kelley

Ironshore first appeared on the specialty insurance landscape in 2006 and, with the addition of Lexington’s veteran leader Kevin Kelley as CEO in 2008, quickly became a company to keep an eye on.

Now the company’s made another move that’s attracted attention. Fosun International, a China-based company with insurance subsidiaries in Portugal, Israel and China, completed the acquisition of Bermuda-based Ironshore in November.

In addition to the capital support of the much larger Fosun, Kelley points to Asia’s present and future importance to the global economy as being an important driver of the deal.

“We think Asian capital is important because we do believe that Asia will have a big influence over tomorrow’s world and we want to be part of that,” Kelley said.

“We think that having Fosun as a partner is going to be a great way for us to get a glimpse of what the future might look like.”


The Fosun move to acquire Ironshore took place in an environment where rates are soft, investment returns are light, and mergers and acquisitions are prevalent.

Scale is relevant, but so is selectivity and focus, Kelley said.

“In my opinion, picking the right businesses and building the right businesses are probably just as important as scale,” Kelley said.

“So the key for us has been and will continue to be our product focus, to do things that we know and to do things that we believe carry margin over the long haul and to continue to build in particular areas,” he added.

An advantage of the Fosun deal, Kelley said, is that Ironshore will be a wholly-owned subsidiary and won’t undergo any restructuring as it moves forward.

“We don’t have to fracture the company in any way,” Kelley said.

“We don’t have to create synergies that would reduce our potential,” he said.

“What we see here is a great owner who will allow us to continue to build upon what we started to build. We are very excited about it and feel that this is going to be a great home for us.”


The Experience Is What Matters

122015_01_CS_DMichelDebbie Michel
Executive VP of National Insurance Casualty, Liberty Mutual
President, Helmsman Claims Management Services

Under Debbie Michel’s leadership, Helmsman Management Services — Liberty Mutual’s wholly-owned third-party administrator — has grown to become the fifth largest multiline TPA based on total gross revenue. Michel will now bring her experience and leadership to bear on new frontiers as the executive vice president and general manager of Liberty Mutual’s National Insurance Casualty unit, while also retaining her position at the head of Helmsman.

The shift seems a natural one for Michel, and she is eager to offer clients the benefits of her dual role.

“The structure allows us to go to market with the capability for meeting prospects’ needs however they elect to purchase their services,” said Michel, whether that means bundled or unbundled services.

“We’re able to bring these capabilities holistically to the marketplace which I think is a differentiator for us.”

As economic challenges continue to suppress the growth of risk management departments, said Michel, carriers, brokers and TPAs need to step up their game and provide clients with the support, expertise and analytics they need to manage their programs, especially as risk managers struggle more than ever to keep up with the pace of change.

With a view toward growing both the casualty business as well as Helmsman’s operations, Michel has a clear vision of what will drive that growth.

“It’s all about the customer experience” she said.

“To grow a business, you have to retain your business. … If you’re not retaining your customers and creating a great customer experience, it’s darn near impossible to grow. It’s about the dedication to the customer, and really making certain that in all aspects of our business, we’re doing what’s in the best interests of the customer and making sure that experience is solid. [That’s what] positions us well for growth in the future.”


Maintaining Underwriting Discipline

122015_01_CS_MParkerMatt Parker
Markel Specialty

When Matt Parker became president of Markel Specialty on April 1, he began his first foray into managing multiple lines of business, having formerly served as managing executive of FirstComp, a single-product company.

“I had to learn the nuances of the various businesses that comprise Markel Specialty,” Parker said.

“We have great people running each of those businesses, so a key thing for me was to understand where I could help them without being overbearing.”

Markel Specialty has been consistently profitable for the past 25 years. According to the company’s third quarter financial report, Markel produced a lower combined ratio, at 88 percent, in all underwriting segments compared to the third quarter of 2014. Quarterly operating revenue rose 3.3 percent year over year, to $1.34 billion. Analysts credit disciplined underwriting for the solid results.


“We have to be very prudent about the type of risk we’re writing, and if we’re not getting the price that we think is adequate, we just don’t write it,” Parker said.

“That’s Markel’s style. We have to price things appropriately for the long term.”

In 2016, Parker plans to improve performance and reduce expenses by ensuring that people with the right skill-sets are handling the right responsibilities. Over the last several months, that has meant moving some key staffers around.

“We’ve shuffled things around to make sure we’re putting our best foot forward, and I think we’ll have a more consistent and unified view of underwriting across some of our specialty commercial products,” he said.

“Looking forward to 2016, I’m excited that, despite the soft market and pressure in pricing, we’re projecting growth across every single Markel Specialty unit.”


Investing in Talent for Improved Distribution

122015_01_CS_BGriffithBrian Griffith
Executive Vice President, Field Management & Distribution
QBE North America

Brian Griffith’s move to QBE North America in late August 2015 was part of what he describes as a “migration of talent” to an organization going through a substantial reorganization.

In his new role as executive vice president, field management and distribution, Griffith will be responsible for growing relationships and improving collaboration with the 1,400 agents and brokers that the insurer currently does business with. In 2014, QBE NA reported gross written premiums of $5.3 billion.

“QBE today plays in small business, in the middle market, and in risk management. We have a huge program business at over $1 billion, a huge crop business, 11 specialty businesses and a personal lines business,” Griffith said.

“We’ll be taking a hard look at agent/broker segmentation, understanding deeply the businesses they play in, and where it overlaps with our businesses.”

Strengthening regional hubs in Connecticut, New York City, Chicago, San Francisco, Dallas and Atlanta will pave the way for improved communication with and greater access to distribution partners. Each hub will have “a critical mass of talent,” including standard underwriters, some specialty underwriters, and sales executives.

“We’re looking to hire 40-plus field staff in the next six months to really improve connections with our trading partners in those regions,” Griffith said.

Investing in talent is a key growth strategy for Griffith and QBE as a whole. Building up regional hubs and local centers of excellence will enable QBE to better align its assets with changing needs in the market, which also serves as a defense against softening prices.

“We’ll combat the softening market by getting closer to existing customers,” Griffith said. “It’s about getting the right distribution partner, in the right geography, with the right products.”


Big Shoes

122015_01_CS_ASchnitzerAlan D. Schnitzer

There may be no harder shoes to fill in the insurance business than those of Jay Fishman, who stepped down as the CEO of Travelers Dec. 1.

The company’s financial performance has never been better. It reported net written premiums of $6.19 billion in the third quarter of 2015 — a record — and is receiving praise from analysts for its approach to revitalizing its personal lines business.

“Travelers has a unique and impressive franchise in the United States,” analyst Cliff Gallant of Nomura Securities wrote of the company earlier this year.

But step down Fishman must, as he addresses a well-publicized health issue.


Into those shoes now steps Alan Schnitzer, formerly CEO of the company’s Business and International Insurance segment.

Fishman stays on as executive chairman.

The timing of our publication deadline for December couldn’t have been worse for Schnitzer to provide comment — he officially took over on Dec. 1, as this issue went to print and was readying himself to take over the reins of a company with $27.1 billion in revenues as of the end of 2014.

“Those of you who have met Alan know that he is a leader of extraordinary talent, judgment, versatility and heart. He brings deep knowledge of our company and our business to his new role,” Fishman wrote in a letter to Travelers employees in August, in announcing that he is battling a variant of Amyotrophic Lateral Sclerosis, or ALS.


Cutting Through the Talk

122015_01_CS_PHorganPaul Horgan
Zurich Global Corporate in North America

Ignore the “noise,” said Paul Horgan, newly appointed CEO of Zurich Global Corporate in North America.

“We are a strong organization, a global corporation that still has intentions to renew a very high percentage of our portfolio,” he said.

“Our biggest challenge is working through the noise in the market. When you cut through all of the talk, when you talk to people, brokers and customers, Zurich is still AA-rated, and the company will deploy $3 billion excess capital by the end of 2016. I inherited a terrific franchise in Global Corporate,” Horgan said.

The “noise” is talk about Zurich restructuring after seeing profits and income decline. It is of the company’s losses from the Tianjin explosion and potential losses related to the Volkswagen scandal.

But Horgan argues that Zurich has unmatched global capacity, thousands of risk engineers, thought leaders, captive solutions and risk insights to help new and current customers.

“We are a true strategic partner, somebody who is adding value to the customer,” he said. “We really haven’t made any major changes.”

The restructuring has not affected Zurich Global Corporate operations, he said.

In North America, the only changes have been to stop writing equipment breakdown as a stand-alone policy, and to stop writing workers’ compensation and primary casualty for the trucking business in the U.S.

Zurich Global Corporate is focused on its core casualty business, Horgan said, which is writing workers’ comp, general liability and auto products as well as continuing to grow its property book and international business.

“We are in 216 countries,” Horgan said. “It’s a differentiator for us. No one else can match our capabilities in that space.

“The goal is to continue to build on the franchise I inherited, to focus on being the best account writer for large and complex risks,” he said.

The R&I Editorial Team can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Focus: Workers' Comp

Do You Have Employees or Gig Workers?

The number of gig economy workers is growing in the U.S. But their classification as contractors leaves many without workers’ comp, unemployment protection or other benefits.
By: and | July 30, 2018 • 5 min read

A growing number of Americans earn their living in the gig economy without employer-provided benefits and protections such as workers’ compensation.


With the proliferation of on-demand services powered by digital platforms, questions surrounding who does and does not actually work in the gig economy continue to vex stakeholders. Courts and legislators are being asked to decide what constitutes an employee and what constitutes an independent contractor, or gig worker.

The issues are how the worker is paid and who controls the work process, said Bobby Bollinger, a North Carolina attorney specializing in workers’ compensation law with a client roster in the trucking industry.

The common law test, he said, the same one the IRS uses, considers “whose tools and whose materials are used. Whether the employer is telling the worker how to do the job on a minute-to-minute basis. Whether the worker is paid by the hour or by the job. Whether he’s free to work for someone else.”

Legal challenges have occurred, starting with lawsuits against transportation network companies (TNCs) like Uber and Lyft. Several court cases in recent years have come down on the side of allowing such companies to continue classifying drivers as independent contractors.

Those decisions are significant for TNCs, because the gig model relies on the lower labor cost of independent contractors. Classification as an employee adds at least 30 percent to labor costs.

The issues lie with how a worker is paid and who controls the work process. — Bobby Bollinger, a North Carolina attorney

However, a March 2018 California Supreme Court ruling in a case involving delivery drivers for Dynamex went the other way. The Dynamex decision places heavy emphasis on whether the worker is performing a core function of the business.

Under the Dynamex court’s standard, an electrician called to fix a wiring problem at an Uber office would be considered a general contractor. But a driver providing rides to customers would be part of the company’s central mission and therefore an employee.

Despite the California ruling, a Philadelphia court a month later declined to follow suit, ruling that Uber’s limousine drivers are independent contractors, not employees. So a definitive answer remains elusive.

A Legislative Movement

Misclassification of workers as independent contractors introduces risks to both employers and workers, said Matt Zender, vice president, workers’ compensation product manager, AmTrust.

“My concern is for individuals who believe they’re covered under workers’ compensation, have an injury, try to file a claim and find they’re not covered.”

Misclassifying workers opens a “Pandora’s box” for employers, said Richard R. Meneghello, partner, Fisher Phillips.

Issues include tax liabilities, claims for minimum wage and overtime violations, workers’ comp benefits, civil labor law rights and wrongful termination suits.

The motive for companies seeking the contractor definition is clear: They don’t have to pay for benefits, said Meneghello. “But from a legal perspective, it’s not so easy to turn the workforce into contractors.”

“My concern is for individuals who believe they’re covered under workers’ compensation, have an injury, try to file a claim and find they’re not covered in the eyes of the state.” — Matt Zender, vice president, workers’ compensation product manager, AmTrust

It’s about to get easier, however. In 2016, Handy — which is being sued in five states for misclassification of workers — drafted a N.Y. bill to establish a program where gig-economy companies would pay 2.5 percent of workers’ income into individual health savings accounts, yet would classify them as independent contractors.

Unions and worker advocacy groups argue the program would rob workers of rights and protections. So Handy moved on to eight other states where it would be more likely to win.


So far, the Handy bills have passed one house of the legislature in Georgia and Colorado; passed both houses in Iowa and Tennessee; and been signed into law in Kentucky, Utah and Indiana. A similar bill was also introduced in Alabama.

The bills’ language says all workers who find jobs through a website or mobile app are independent contractors, as long as the company running the digital platform does not control schedules, prohibit them from working elsewhere and meets other criteria. Two bills exclude transportation network companies such as Uber.

These laws could have far-reaching consequences. Traditional service companies will struggle to compete with start-ups paying minimal labor costs.

Opponents warn that the Handy bills are so broad that a service company need only launch an app for customers to contract services, and they’d be free to re-classify their employees as independent contractors — leaving workers without social security, health insurance or the protections of unemployment insurance or workers’ comp.

That could destabilize social safety nets as well as shrink available workers’ comp premiums.

A New Classification

Independent contractors need to buy their own insurance, including workers’ compensation. But many don’t, said Hart Brown, executive vice president, COO, Firestorm. They may not realize that in the case of an accident, their personal car and health insurance won’t engage, Brown said.

Matt Zender, vice president, workers’ compensation product manager, AmTrust

Workers’ compensation for gig workers can be hard to find. Some state-sponsored funds provide self-employed contractors’ coverage.  Policies can be expensive though in some high-risk occupations, such as roofing, said Bollinger.

The gig system, where a worker does several different jobs for several different companies, breaks down without portable benefits, said Brown. Portable benefits would follow workers from one workplace engagement to another.

What a portable benefits program would look like is unclear, he said, but some combination of employers, independent contractors and intermediaries (such as a digital platform business or staffing agency) would contribute to the program based on a percentage of each transaction.

There is movement toward portable benefits legislation. The Aspen Institute proposed portable benefits where companies contribute to workers’ benefits based on how much an employee works for them. Uber and SEI together proposed a portable benefits bill to the Washington State Legislature.


Senator Mark Warner (D. VA) introduced the Portable Benefits for Independent Workers Pilot Program Act for the study of portable benefits, and Congresswoman Suzan DelBene (D. WA) introduced a House companion bill.

Meneghello is skeptical of portable benefits as a long-term solution. “They’re a good first step,” he said, “but they paper over the problem. We need a new category of workers.”

A portable benefits model would open opportunities for the growing Insurtech market. Brad Smith, CEO, Intuit, estimates the gig economy to be about 34 percent of the workforce in 2018, growing to 43 percent by 2020.

The insurance industry reinvented itself from a risk transfer mechanism to a risk management mechanism, Brown said, and now it’s reinventing itself again as risk educator to a new hybrid market. &

Susannah Levine writes about health care, education and technology. She can be reached at [email protected] Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]