The Vital Lessons This CPCU Instructor Learns from the Industry’s Young Minds

By: WidMaylleur Gedeon | June 8, 2020

WidMaylleur Gedeon, MBA, CPCU, PMP, ARM, AIDA, ARe, AIAF, AIC-M, AIC, AIT, ARC, AIM, AU-M, AU, AINS, API, AIS, ITIL, CLCS oversees the gig economy portfolio at GEICO. He is a thought leader who has spoken at industry events on the gig economy. He was selected as the 2017 CPCU spokesperson for the CPCU Society Conferment Class to share his CPCU journey. He is also featured as a subject matter expert (SME) in the All New Online CPCU courses at the Institutes. Gedeon can be reached via LinkedIn or at [email protected].

One of my most memorable moments in the insurance industry came last year in New Orleans, Louisiana.

I witnessed some of my CPCU students conferred as new designees. This was the culmination of a journey that started in January of 2017 in Indianapolis, Indiana, with two simple hashtags: #NOLA2019 and #TrustTheProcess.

The road to Louisiana took shape after a ‘Lunch and Learn’ session to promote insurance studies. While it is axiomatic that my students have learned some things from me, they have undoubtedly whetted my appetite for more designations.

Migrating to the United States

My humble beginnings in Haiti helped fuel my deep-seeded passion for learning. After migrating to the United States as a teenager, I started my high school journey in Brooklyn, New York without any knowledge of the English language.

I was determined to achieve the highest recognition possible, so I found creative ways to learn the new language.

During my first year, I spent countless hours each night translating my school work from English to my native French and Haitian Creole.

When I started teaching CPCU courses, I quickly realized that I could leverage my past experience to help my fellow associates learn topics and concepts that may seem “foreign” to them, especially if they had not had experiences in certain departments.

Similar to how I had to become comfortable with being uncomfortable in high school, I hypothesized that my students must develop that same grit posthaste while learning the “insurance language.”

For this audacious challenge to come true for my students, I had to become the “dictionary” that enabled me to not squander my high school years for them.

My audacity was even more pronounced when you consider my échec with CPCU 500. To earn the CPCU designation, one must be able to remain standing after eight rounds. At first, I was knocked out after the first round, but I summoned my “butterfly spirit” and got back up.

Indeed, defeat became my fuel in my quest for the prestigious CPCU designation.

Trusting The Process

Since my students have diverse academic backgrounds and experience, I concluded that I can rapidly leverage the other designations that I hold (e.g. AIC, ARM, ARe, AIDA, AIAF, ARC, et cetera) to explain obtuse concepts and theories in a manner that is easily digestible and relevant to their current roles.

Additionally, using current issues, trends and case studies have done wonders in helping students develop an in-depth understanding of the materials. The unfortunate coronavirus (COVID-19) pandemic has impelled insurance departments to issue a myriad of orders: cancellation moratorium, mandatory premium relief to commensurate with the significant decrease in risk exposures, among others.

My current CPCU class (CPCU 520) has found those examples informative.

The students are seeing how some factors can accelerate the underwriting cycle into a soft market. Leveraging the quarterly financial earnings to further explain the impact of those industry-wide actions on underwriting ratios has been a fortuitous supplement to the course materials.

I have seen how current and future leaders begin to think about business problems in broader terms as a result of the knowledge gained from the course materials. Furthermore, the designation gives some insurance professionals the courage to seek new challenges and develop competencies needed to succeed in position of broader responsibility.

Lifelong Learning

The thirst for knowledge is in each individual student.

They are intellectually curious. They understand that the business acumen they will cultivate by obtaining the CPCU designation will help them to grow with confidence.

As the industry continues to evolve, I have learned that I must keep pace by continuing to obtain more designations or risk the misgiving of pretending to know what I don’t know.

As a lifelong learner, I am constantly guarding against the illusion of accepting a comfort zone. It is that same mindset and discipline that propelled me to graduate high school with honors, and ultimately complete undergraduate (cum laude) and graduate (with distinction) degrees at Long Island University.

In addition to the CPCU designation, I hold 14 other designations from The Institutes, of which Risk & Insurance® is an affiliate. Furthermore, I also hold the Project Management Professional (PMP), Commercial Lines Coverage Specialist (CLCS) and Information Technology Infrastructure Library (ITIL) certifications. The Institutes continues to acknowledge my contribution to the industry by featuring me as a subject matter expert in its all-new online CPCU learning format.

In a sense, history continues to repeat itself. I was fortunate to find teachers who accepted the challenge of teaching me a new language when I migrated to the United States. Now I have an opportunity to pay it forward by helping others learn the insurance language by teaching CPCU courses.

However, I am mindful that my learning is still in its infancy stage.

To echo Socrates, “As for me, all I know is I know nothing.” If I stop trusting the process, I will not only commit a morale hazard, I will run the risk of irrelevancy in the ever-changing industry.

Consequently, my students will not be able to rely on me when they are getting comfortable with being uncomfortable. I have learned a lot from my students while teaching CPCU courses, and I am just getting started. &

How a Carrier Partner Can Help Navigate a Challenging Management and Professional Liability Market

A combination of a choppy economy with increased claims frequency and severity could lead to rate increases in the Management & Professional Liability market.

By: Risk & Insurance | April 3, 2024

Rates in the management & professional liability (M&PL) markets were on the rise from 2020 to early 2023 and are now falling rapidly.

M&PL divisions manage a number of different insurance products including management liability (D&O), professional liability (E&O), employment practices liability (EPL), fiduciary liability policies, cyber, etc. In 2023 and into 2024, a big influence on the marketplace has been the extremely aggressive and softening public company D&O market.

Though these rates have been softening for management liability, that may change over the next few years as companies continue to adjust their business models motivated by economic uncertainty. Layoffs were up nearly 200% last year, Forbes reported, even as other recession indicators, like the inflation rate, improved. A recession could lead to an increased claim activity and force carriers to raise rates.

“Whenever there is a meaningful downturn in the economy, we tend to see claim frequency pop up,” said George Schalick, Jr., senior vice president of the Management and Professional Liability Division at Philadelphia Insurance Companies (PHLY).

With continued fiscal uncertainty, businesses potentially already burdened with pandemic-related claims should seek a carrier with a long history in M&PL products. They will provide much-needed risk management guidance and be better positioned to support their insureds during market fluctuations.

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.