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Bitcoin, Cryptocurrency and Blockchain

Posted By Chris Prewit, Tuesday, January 2, 2018

Article written by Robert Crosby, Executive Director of Independent Insurance Agents of San Antonio

Since this is the start of a new year, I wanted to write about something that has taken the nation and the world by storm. As I delved into the subject of Bitcoin, Cryptocurrency and Blockchain transactions, it became apparent became to me that there is a generational gap of understanding this new currency between the Millennials (Bulls) and Baby Boomers (Bears).

Let’s start with a history lesson.  Bitcoin is a new form of money, a digital currency created in 2008 during the financial crisis.  Blockchain is the tracking mechanism that facilitates any incoming and outgoing bitcoin transfers to and from any internet address at any given time.  During the financial crisis of 2008, people from all over the world felt its debilitating economic effect. As late as the end of 2016 and into 2017, many are still feeling the effects of the dwindling value of their fiat currency or the currency approved by a country’s government.   Satoshi Nakamoto, an unknown person or persons, created the bitcoin concept sometime in 2008.  A key component of bitcoin is decentralization. Decentralization allows us to cross currency barriers making us all a part of the bitcoin ecosystem.  This allows anyone, anywhere, to take part in transactions and contribute to it in our own way.  Rather than relying on a government, bank or middleman, bitcoin belongs to everyone in this “peer to peer” system, making all of us part of the bitcoin network. Bitcoin is driven by individual users and without individual users, there is no bitcoin. The more people that embrace bitcoin, the better it works.  Bitcoin needs an ever-expanding community actively using bitcoin as a payment method either buying goods and services with bitcoins or offering goods and services in exchange for bitcoin. Bitcoin can be used as an investment and traded like a commodity.

As I did a more in-depth analysis, I learned about some of the features and characteristics of bitcoin.   Bitcoin lets you exchange money in a different way than you would with a bank.  Bitcoin makes it possible to transfer value anywhere in the world via the internet in a very easy and quick way.  It allows you to control your money but it does come with great security concerns.  Bitcoin claims that it can provide very high levels of security if used correctly. Because of this, it is important for anyone interested in investing or utilizing bitcoin to take the time to inform yourself before using bitcoin for any transaction.  Bitcoin should be treated with the same care as your wallet, or even more so in same cases. Always remember that it is your responsibility to adapt good practices in order to protect your money. 

Bitcoin is treated as a commodity in the world market with the price of a single bitcoin unpredictably increasing or decreasing over a short period of time due to its young economy, novel nature and sometimes liquid markets. Consequently, keeping your savings with bitcoin is not recommended at this point.  Bitcoin should be seen like a high risk asset and you should never store money that you cannot afford to lose with bitcoin. If you do receive payment with bitcoin, many service providers can convert them to your local currency.

Here is a list of companies that accept Bitcoin. (Last updated on December 6, 2017)

Any transaction issued with bitcoin cannot be reversed.  A bitcoin transaction can only be refunded by the person receiving the funds. That means you should take care to do business with people and organizations that you trust, or that have an established reputation.

All bitcoin transactions are stored publicly and permanently on the network most commonly called a “blockchain."  Anyone can see the balance and transaction of any bitcoin address, however, the identity of the user behind an address remains unknown until information is revealed during a purchase or under some other circumstances.   For this reason, bitcoin transaction addresses should only be used once.  As mentioned before, always remember that it is your responsibility to adopt good practices in order to protect your privacy.

Bitcoin is an experimental new currency that is in active development. Each improvement makes bitcoin more appealing, but also reveals new challenges as the adoption of bitcoin grows.  During these growing pains you might encounter increased fees, slower confirmations, or other service issues. Be prepared for problems and consult a technical expert before making any major investments.   Keep in mind that nobody can predict the bitcoin future.

Bitcoin is not an official currency, but that having been said, most jurisdictions still require you to pay income, sales, payroll and capital gains taxes on anything of value including bitcoin. It is your responsibility to ensure that you adhere to tax and other legal or regulatory mandates issued by the U.S. government and local municipalities.

Next month we will be discussing a more in-depth analysis about “blockchain” and how it is used in the insurance industry.

A final commentary, investing or using bitcoin in commerce is a high risk adventure.   As with any investment, your appetite for risk will determine your willingness to jump into this new form of currency.  I have found that the millennials are willing to take the risk and have already been trading in bitcoin and blockchain.  The Baby Boomers are more conservative and are really struggling with the concept. Consequently, many have have no idea how it works. Whether you are a Millennial or a Boomer, just be careful what you wish for and research, research, research.

In just the last few days, the San Antonio Express News and MSN News have been writing warning articles about bitcoin. The Express-News reported that the Texas State Securities Board issued a cease and desist order this week against an overseas company selling investment contracts to mine bitcoin. For more information please review the December 29th issue of the Express-News. The article appeared in the Business Section, under the heading of “Texans warned about firm with ties to bitcoin”. MSN news reported on December 29, 2017, that we need to heed Warren Buffett’s warning: Bitcoin is pure FOMO” - the fear of missing out. Both of these articles are great reading regarding bitcoin.

This article references bitcoin.org multiple times.

Tags:  best practices  business  cryptocurrency  industry  Insurance  InsurTech  Technology 

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Business Risk Management in the Age of Increasing Workplace Violence

Posted By Chris Prewit, Monday, December 4, 2017

Article written by Robert Crosby, Executive Director of Independent Insurance Agents of San Antonio

It seems that every week we hear of another incident of violence in our society. Most recently, the shooting at the First Baptist Church in Sutherland Springs, Texas, reminded us that no place is safe from acts of violence. The frequency of these incidents seems to be increasing and the statistics are frightening and sobering.  

According to the Bureau of Labor Statistics, workplace violence is the second leading cause of death in the workplace. This can be one of the most frightening exposures for a company and just one incident can threaten the very survival of the company. The FBI reports that from 2000 and 2015 the number of annual active shooter incidents increased by 2000 percent. With these types of statistics, business owners must consider the ramifications of an incident in their place of business.  

According to CHUBB Insurance, there are several factors to consider when you are deciding whether or not to add workplace violence expense insurance coverage to your insurance portfolio. Expenses incurred in the aftermath of a workplace violence incident are often staggering and unforeseen. These expenses can include crisis management, independent security, employee counseling, public relations, and salaries for victim employees and for replacement employees, medical care, and rest & rehabilitation for employees.  

Additionally, loss of business income is a very real concern. Many business owners may believe that they have adequate insurance coverage with their General Liability insurance policy. However, Commercial General Liability may only respond if the business is considered legally liable for the incident. Business Interruption coverage will only respond if there is damage to your building. If you have to close your doors for a period of time while your staff recovers emotionally or physically, you may not be able to rely on Business Interruption coverage as a source of income replacement while your doors are shut. Workmen’s Compensation coverage very possibly will not cover a non-job-related injury in the workplace. The expenses to add temporary or new permanent employees is another non-covered expense.

Terrorism Coverage only covers events that generate at least $5 million in Property and Casualty losses and a terrorist attack certified by the U.S. Secretary of the Treasury, the Attorney General and the U.S. Secretary of Homeland Security. The September 11 attacks are the only incidents to date that meet those parameters. Most policies do not provide coverage event crisis response teams, victim counseling or funeral costs for employees, customers, visitors, and others.

Every business should consider assessing the risks that their specific type of business may have but there are certain businesses that have an increased risk of violence. Any company that deals with the public, exchanges money, delivers goods and services, works with unstable or violent persons, operates at night, or plans to reduce their workforce with layoffs or outsourcing of operations have an increased chance of a violent incident.  

There are policies in place through various carriers that provide for coverage in areas of third-party liability, crisis mental health specialists, independent forensic analysis's, funeral expenses, public relations, victim employees’ salaries and replacement employees’ salaries, informant rewards, risk assessment and response training and business interruption just to name a few.

A comprehensive risk assessment of your specific business is critical as coverages can vary widely.  Some policies have limitations depending on employee size, types of weapons and other incident specific particulars.

So where do you start? – take time to review your current coverages with your independent insurance agent and have your agent do a complete assessment of your company’s hiring and training practices, and workplace protection policies.

Recovery from any workplace violence incident is very difficult.  The better prepared a company is the more quickly the recovery process becomes and a return to normal operations is more successfully accomplished.

Tags:  advice  articles  best practices  business  Insurance  World Issues 

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Exit Strategy: Succession Planning for your Small Business

Posted By Chris Prewit, Tuesday, August 1, 2017

Original article published by the Frost Brokerage Service

You have worked hard and overcomed obstacles to build the business you always dreamed was possible. With skill, ingenuity, even a little luck, you’ve succeeded in doing what few people achieve. While you’ve been concentrating on marketing issues, training and recruiting employees, and oh yes selling insurance, you probable may not have given much thought to the time when you will no longer be part of your business through retirement, becoming incapacitated or even dying or leaving for another reason. But business advisors say that neglecting to plan your own exit strategy would be a costly mistake. Why should you plan? Without succession planning, small business owners put their own future and the future of the business they have worked hard to build at risk. Lack of a comprehensive plan can have a negative impact on an owner’s future options, such as the business assets and value, employees and customers, tax obligations, even the businesses very existence. The stakes are so high that most of family and small businesses without a plan fail to make the transition because no one is willing or able to take on the ownership role. That is a sobering thought for small businesses owners who expect to hand over the business to a family member or trusted employee or who will need to sell their business at the best price to fund a future retirement or other enterprise. Perhaps it’s surprising, then, that only 50 percent of American small business owners have a transition plan, according to the Exit Planning Institute, and most of those with plans haven’t documented or communicated them to others. That is a critical omission and ideally, business owners should plan for their exit from the beginning, even if they don’t anticipate leaving for decades. There are three pillars of planning. Succession planning is not a cookie-cutter process with one model that fits everyone perfectly the professional advocate preparation based on “three key pillars”.  You must maximize the value of your business, prepare yourself personally and financially, and plan the act of your life.

Maximize the value of your business, what does that mean? Like many owners, you may want or need to sell your business someday. That can be complicated. Statistically, only 20 to 30 percent of small businesses on the market sell, and approximately 75 percent of owners who do sell profoundly regret the decision within 12 months. Business owners may have unrealistic assumptions about the value of their business. Believing that healthy sales and balance sheets automatically equate to a big return when the company is sold is not realistic. Potential buyers may not agree, especially if they can’t see concrete evidence of value. If selling your agency is part of your plan, ensure that your company is in the strongest possible position, financially and operationally. You will want to minimize areas of risk for your agency, such as preparing others to step into leadership roles, ensuring that essential employees want to stay when you leave, and diversifying your customer base and carriers.

Prepare yourself personally and financially with professional help. Planning a successful exit is a complex and sometimes delicate undertaking that can require the skills and specialized knowledge of multiple professionals. As much as 90 per cent of a typical business owner’s net worth is tied up in the agency and that can complicate the planning process. That’s why an owner should form a team of knowledgeable professionals to help the owner navigate all the issues. The professional recommends the services of a certified exit planning advisor, an attorney, tax advisor, CPA, banker and wealth advisor to review the owner’s personal assets, help explore all available options and ensure the owner’s wishes are accommodated.

Plan the third act of your life.

Building a business means decades of your life’s passion, identity and personal self-worth are linked to your agency. Although leaving that behind can bring changes in family relationships, personal wealth and free time, new realities may not be all you expected. Many agency owners incorrectly assume that they will retire happily to a life of golf, extensive travel and time with the grandchildren. Life’s third act often requires more for lasting fulfillment. Life coaches can help the retired owner determine the owner’s passions and match them with opportunities, such as serving on corporate or nonprofit boards, starting family foundations or even entering into other business ventures. This is your life enjoy it, you deserve it!!!

Tags:  advice  business  careers  retirement  strategy  succession planning 

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Career Path

Posted By Chris Prewit, Wednesday, July 5, 2017

Few of us take the time to actually plan our careers. Too often, a career is something that just seems to happen to us. We take a job, and five years later we discover that we have a “career”. The career planning process is relevant and valuable whether you are in the first year of your first job, or 20 years into your career. A good career path can help you make your career happen instead of just settling for what shows up

Current thinking on career management emphasizes five possible career directions. Understanding these strategies can help you in your career planning process since some certain types of movement are available in some jobs and not others.

  • Upward movement-the traditional conception of career growth. Typically an option for larger companies with multiple layers of management.
  • Downward movement-sometimes a positive career move when you have been promoted or hired into the wrong role and you have a mismatch of values or competencies for a position.
  • Lateral movement-movement from one job type to another.
  • Moving on-sometimes career goals can best be realized by moving on to a position in another organization.
  • Enrich the current job-involves developing yourself and expanding the duties in your present job. This is a traditional path in smaller P & C agencies.

The following is a simple four step process to keep your career path on track.

  1. Setting my values compass is the first step. A good compass will help you find True North when there is no visibility. Likewise, having clearly articulated values that tie to your key life roles and goals allow you to identify what’s truly important and to orchestrate your activities into big accomplishments over the long run, such as completing the education and work experience required to obtain a more challenging and higher paying position.

  2. After you have established your value compass direction, then you set out to map a five year career path. Competencies are the underlying characteristics of a five year career path. Knowing what you are competent of doing will give you direction. Some examples of competencies are easily identifiable such as skills and knowledge. Less obvious examples of competencies include items like behavioral traits/preference, motives, social roles. They can be found in position descriptions, through personality and trait testing like the “Omnia Profile”

  3. Providing provisions for the journey. It’s time to really dig in and be with honest yourself. Which competencies have you mastered and which you need to develop in order to start you journey and to successfully navigate your five year plan.

  4. Staying the course, the following are development methods to keep your career compass pointed true North.

Here are a few recommendations on where to start:

  • Designations, for example CIC, CRM and CPCU.
  • Classroom and insurance company training classes
  • Online training
  • Coaching/Mentoring
  • Cross-Training
  • Challenging Assignments
  • Volunteer Projects
  • Reading

Best wishes and good luck on your career journey!

Tags:  advice  best practices  business  Career planning  careers  industry 

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The Importance of an Elevator Pitch

Posted By Chris Prewit, Monday, May 1, 2017

 

This Article was Originally Written by Catherine Conlan, Monster.com

 

Everyone needs an elevator pitch. When you’re looking for a new job, you can use it to inform employers and recruiters about yourself, or to make a connection at a networking event. When you’re already employed, you can use an elevator pitch to tell influencers or decision-makers about how you can add value to whatever project they’re pursuing. Your elevator pitch should be informative, and you must be able to deliver it flawlessly, at any time, with little warning. You never know when opportunity might knock. Craft a standout pitch and deliver it with verve every time using these tips.


Start with a script. The goal is for the listener to walk away knowing exactly who you are and what you can do. Avoid using complex language or industry jargon when you write your pitch. You want to be able to connect with a wide variety of people and have them understand what you’re talking about.


It is critical to use the right pitch for the right situation. A pitch delivered in a social setting, for example should tell the employer why you are special in a compelling manner. It should not be sales-ish. A sales pitch is different in that you are pitching the sale of your solution to the listener’s problem. Once you have the text of your pitch, practice it. You need to be able to deliver it naturally without rushing or sounding too pushy. Recite it out loud in front of a mirror so you can perfect your body language as well. Once you’ve made your elevator pitch out, then what? Stop talking and wait for the other person to ask a question or a make a comment if they want to learn more. The most important part of an elevator pitch is to connect with another human being.

Tags:  Business  Marketing  Networking  Sales 

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TDI Issues Draft of Hail Litigation Report

Posted By Chris Prewit, Wednesday, November 2, 2016

An interesting article by Bill Kidd appeared in the latest issue of The Insurance Record


There is growing involvement from attorneys and public adjusters in the litigation of Texas hail damage claims. The Texas Department of Insurance (TDI) staff revealed their initial findings to the Senate Business and Commerce Committee on October 5, 2016.  Lt. Governor Dan Patrick has directed the committee to monitor “the number of lawsuits related to property claims filed as a result of multiple hailstorms and weather-related events across Texas”.  The committee was directed to examine “negative consumer trends that may result in market disruption such as higher premiums and deductibles, less coverage, non-renewals, and inability to insure coverage due to insurance carrier withdrawal from the state”.  The committee was to then make recommendations on legislative action that is needed. TDI issued a data call on May 20, 2016 to collect information on hailstorm residential property claims litigation with response due August 19, 2016.  Approximately 140 separate insurance companies submitted responses. The data highlighted the following information. Before 2012, known attorney or public adjuster representation “was about 0.4% (one in 250 claims)”. “After 2011, known attorney or PA representation was about 4 to 4.5 % (one in 22 to 25 claims), or an increase of about 10 times or 900%. The data also revealed that the rate of lawsuits increased.  Before 2012, the lawsuit rate was about 1.5 to 2% but after 2011, the lawsuit rate increased by 1,400%. The TDI warned that “the results should be considered preliminary.” The TDI’s results are based on 40,000 randomly sampled windstorm and hail claims.

 

The data also indicated a majority of claims with attorney or PA involvement are in South Texas. “South Texas accounts for 4% of all sampled windstorm and hail claims and about 53% of claims with known attorney or PA involvement” TDI reported.  Seven insurers stated that they “intentionally reduced, limited, or stopped writing policies in Texas as a direct result of increased claims litigation from weather related perils.”  Two of those companies also opted not to renew policies.  Counties affected include Hidalgo, Maverick, Potter, Randall and Webb. One company increased its minimum wind deductible for new business policies statewide. “Twelve companies stated that they have increased rates for residential lines of insurance as a direct result of claims litigation” TDI Reported. TDI plans to finalize its analysis before the 2017 legislative session.

Tags:  articles  blog  business  hail  industry  Insurance  litigation 

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