 Aloha and welcome to Business in Hawaii with Reg Baker. We broadcast live every Thursday at 2 o'clock until 2.30 at the Think Tech Studios in the Pioneer Plaza in beautiful downtown Hololulu. We have a great technical staff here today and we also have a very interesting guest who comes with a variety of experience. We've got Darren Matsuda, who is formally an attorney, has got some good legal background, but decided to become an insurance broker, particularly in the commercial markets here in Hawaii. And so he's going to be sharing with us today some of the nuances of commercial insurance and some of the do's and the don'ts. Darren, welcome to the show. Hi, Reg, thank you for having me. Sure. Now you came to Hawaii quite a while ago, but originally you're from Northern California? Yeah. Yes, I came over in 1999. I was recruited out of law school to come over to Hawaii. And who recruited you? The law firm, Bays Deaver Lung and Rose. Yeah. Good firm then. Yeah. Very good firm. And what did you do with them? I was a commercial litigation attorney. I did a lot of insurance business construction and employment law for a number of years. So you worked on the insurance side of things from a legal perspective before you decided to jump to the other side? Correct. And how long did you do that? I did that for about eight years. And so what did you learn during that process of eight years of working the other side of the fence, so to speak? Well, being an attorney is a lot of work. I learned a lot of things about contracts, learned a lot of things about negotiation skills and the practice of law. And some of the do's and don'ts of insurance too, right? Yeah. That's good. So you learned how to defend, I guess, or go after the insurance companies, in a sense. Were you supporting the insurance companies or were you going after the insurance companies? Often we worked for insurance companies, so often I did some coverage council work. Sometimes we did go after insurance companies on the other side, so it was both sides of the fence. All right. But that's great training. Yes, correct. That's a great way to learn the industry. Correct. How many years of doing that you decided to jump to the other side and start your own insurance business? Yes, I did. About 10 years ago, I had an opportunity to go into insurance and change my lifestyle a little bit and I decided to do that. Was that the primary reason to, you know, lifestyle change or was it something about the industry that got you passionate? Yeah, you know, part of it was lifestyle change, a little bit more time. And you know, I saw that some of the skills you have as an attorney could definitely translate it towards the insurance business, and so I thought it was a good background to take with me. Very good. And then, and so now you're working in your own business with a bunch of other people or are you somewhat independent or how does that work? Correct. Well, I'm an independent insurance broker with the insurance firm, ACW Group. Okay. And what do you do there? Well, I have my own book of business, but I usually am the representative of certain businesses on their insurance needs. So I service their insurance, I make placements for them, I take care of their accounts. Right. And you know, just full disclosure, you also cover my insurance needs. And so that's how, you know, actually we started, we got introduced to each other back in my old HMAA days, right? Correct. Right. And so you handle some big companies. I mean, HMAA is one. I know that personally because I was there working with you on it. So you've got some very large companies and you also have, in my case, some very small companies. Yes. It's the full spectrum. I work with both small businesses and big businesses in Hawaii. That's good. And which ones do you prefer? Well, you know, it's kind of funny. All small businesses and big businesses, they have a lot of similarities. There's some differences, but you know, I like working with people. And that's the biggest thing. It's important when you're in that kind of business, right? Correct. The relationships you build with the people. Correct. Right. And you work not only the property and casualty, but you're also, you get involved in health care insurance a little bit too. Yeah. So I do the property and casualty, professional liability. And I also do employee benefits, workers comp, TDI, medical. Very good. So it's a pretty broad spectrum. No life? In case I'll do some life, you know, especially key management for some businesses that need that. More, you know, what we try to do is we try to do the whole gamut. Some bonding. If we do a lot of construction companies that have some bonding needs, so we'll go ahead and do that. You know, hopefully we take care of all the insurance needs that a client will have. Right. And that's full service. I mean, it sounds like you've got all the different lines that anybody would ever need. Yes. So we're licensed or I'm licensed in all aspects of insurance. That's very good. I guess is this a growing industry or I guess a business is growing? The number of businesses don't necessarily grow. So I mean, what's the state of the insurance business right now? Is it an opportunity? Is it growing or what's the status? I think it is. I mean, there's there's opportunity and there's always new businesses coming up and in addition to that, there's there may be people that aren't happy with their current situation. So you're always looking to grow your business, which we've which I've done pretty successfully over the years. Very good. And I guess, you know, when you first get into a new client, you don't necessarily have all of their insurance needs. You kind of go in and start helping them maybe in one area and then you just kind of grow and expand into other areas. Correct. You know, and that's where that relationship building becomes so important. You know, I guess I've also heard of, you know, insurance reviews, you know, where I guess someone will come in and take a look at the all the insurance that a company might have and then provide some feedback. You know, as a professional in that area, define what that is, maybe walk us through how that works. Well, usually I might get an opportunity either from someone calling me or someone being referred to me or myself reaching out to a business. And insurance review usually for me is getting to know the client first, really understanding what a client does, what kind of business they do and the types of risks that they face in their everyday business. And after we do that, we kind of, we try to look at what they have, what they currently have, what their current coverage is and whether they're coverage correctly and then, you know, really try to pitch or tell them what we can provide to them. You know, I have a unique background. My background can help them become a part of their business team. And that's what I see myself as not just an insurance agent who just makes maybe places insurance, but a person who's really a part of your business team. For example, if a company is entering a contract, most contracts have insurance requirements. And before they enter that contract, I want to be a part of that so I can advise that client whether, you know, some of the requirements they may have as a part of that contract are either too egregious or too overbearing or if it's cost effective. And most of the time, if you do that before you enter a contract, those terms are negotiable. Exactly. So if they are a little over the top, you're in a position to kind of push back a little bit and, you know, and maybe satisfy their needs, but in a different way. Correct. And a lot of times, you know, most of the contracts are written by attorneys. And many attorneys may not understand the current insurance market. And sometimes an attorney's job is to make sure their client is protected as best as they can. But sometimes that protection can be a little bit cost-prohibitive for the client. Well, in some of these contracts, is it always very clear what the insurance requirements are or sometimes does it take a little digging to find out? Well, a lot of it may be what I call insurance lingo. So someone who may not be in the insurance business isn't going to understand what certain coverages are that they may require. And sometimes some of the requirements are out of date. The insurance forms change periodically. And sometimes it's impossible to meet some of those contract requirements. So it's good that if we're involved from the beginning, we can go through that with you. And so we're not, you're not getting into a contract where you might be in breach of because there's no way for you to meet those requirements. And that's an interesting point. So I guess some of the terminology could be a little bit stale. Yes. And I guess the insurance industry tends to be a constantly moving and changing type of industry. You know, there's all kinds of risks that are out there. And they tend to change fairly often. And I guess what some of the litigation takes place, it changes, I guess, the nature of some of the coverage. And so if they're not updating these standard contract forms, there could be something in there that either doesn't make any sense, or maybe over the top, or maybe need to be added. Right, right. So, and that's part of what you can assist people with is taking a look at this and identifying it. Yeah. Yeah, and then offer solutions. Yeah, that's, that's what we like to do. I mean, we want to be a part of your team as you're just, I like your accounting or your, your attorney. We want to be viewed by the client and be in regular conversations with you to help you do the best you can in your business. And well, and that's both protecting what you've got, but also addressing the needs, but maybe keeping it cost effective. Exactly. So there's, and part of the insurance reviews to make sure, you know, to identify these areas of opportunity. How long does an insurance review usually take? I mean, if somebody wanted to ask, I know it depends upon the size of the company, right, contracts and all that, but generally for a medium sized business, it's, you know, I got maybe 10 or 20 employees. It's less than a million in sales. How long do you think it takes to do an insurance review? Well, for us, it may take, you know, a while, because we, if we look at your policies, we like to go ahead and go through them and see what you currently have. And really get to know you face to face time. It may take, you know, just a meeting because we would just want to interview you and have you have a chance to interview us or interview myself to see what I can bring to the table. And I want to figure out what relevant insurances or what relevant coverages will pertain to you or your company. Right. And I would assume that if somebody had all this documentation there, you know, you have a cup of coffee, spend a little bit of time, but you could probably get something done in four or five hours, six hours or more. Oh, yeah, yeah, definitely. Usually for our face to face meeting, maybe half an hour, an hour, you know, I do some background research too. Most most businesses have websites and I like to really look at the website and, you know, get to know that business. Right. So you've added a little bit. Correct. You do your research. So you come in a little bit prepared. You know, and I know in my case when I decided to, you know, change insurance carriers on a professional liability insurance basis, I believe you were able to get more insurance for about 20% or so less. So it worked out as a sweet deal for me. And I'd like to think that there may be other opportunities like that. And that's one of the reasons why I've got you on the show, is that, you know, there's, you know, to come in and do this insurance review, take a look at what the needs are, try to find some of the pookas maybe, you know, and address those. But you could end up getting a better insurance coverage package for at least no more than or maybe even in some cases, less than what you're currently paying. And often that's the case because there are a lot of markets and there's a lot of competition between the insurance companies for a particular client or an account. Depending on the client and depending on the loss history or their claim history, but most often there's going to be some competition out there where insurance companies may compete over a different account. A lot of times it's how you portray the story to the carrier of what this client is about. And that's why the review process is really getting to know about you as the client or you as the business. Okay, well, I want to just continue on this topic just for a little bit more but we're going to go on a short break. Okay. And then when we come back, we'll kind of maybe go through a case study on how this would work because I think this could be a good opportunity for some people to get better coverage for less price, you know, if given that opportunity. But this is business in Hawaii with Reg Baker. I'm here today with Darren Matsuda who is a commercial insurance broker here in town and we're talking about how to save you on insurance costs. So we'll be right back in about a minute. Hi. Aloha, I'm Richard Emory. I'm with co-host Jane Sugimura of Kondo Insider, Hawaii's weekly show about association living. The purpose of these videos is to educate board members and Kondo residents about issues relating to association living. We hope they're helpful and that they assist in resolving problems that affect the relationship between boards and their residents. Each week, Thursday at 3 p.m., we bring you exciting guests, industry experts who for free will share their advice about how to make your association a better place to live and answer a lot of very interesting questions. Aloha, we hope you'll tune in. Looking to energize your Friday afternoon? Tune in to Stand the Energy Man at 12 noon. Aloha Friday here on Big Tech Hoy. Hi, this is Reg Baker, business in Hawaii. We are back. You caught me by surprise there. Thank you. Anyways, Darren Matsuda is here today. We've been talking a little off camera about some of the stuff that he does in his past time or in his free time rather than just fighting the battles of insurance, but he's quite an accomplished coach. Darren, can you just tell us a little bit about your coaching and what you do there? Yeah, I'm the head basketball, varsity basketball coach at Punahou School. At Punahou? Yeah, I've been there for about 10 years. This will be my seventh year as the varsity head coach. And I've enjoyed my time there. It's been a great experience. It's been a lot of fun and it's been very rewarding working with kids and helping them become better people. I would imagine. That sounds like a lot of fun and you've got, and this is pretty much a year round thing for you. We have basketball season, but definitely it's a year round job. There's administration to deal with the seven teams and we have a pretty large basketball tournament where we bring 16 teams in from all over. We have some from California and Oregon, China, Japan, different countries. So it's a big undertaking, but it's very rewarding. It's very fun. They come here. Do you ever get to go there? Yes, every other year Punahou, we're very fortunate to have Punahou School give us the ability to go on a trip every other year. So we've gone to the mainland every other year and we may do an international trip coming up. Wow, nice. So it must keep you pretty busy and you also have a family at home too. You got to spend time with. Oh yes, I have two young kids, Reese and Jaden and my wife, Lisa. Yeah, you can't forget the wife. Very good. So they get to see you once in a while. Yes. All right, good. Well, before we went on break, we're talking a little bit about doing an insurance review and looking at maybe opportunities to cover some risks that may not be covered or to maybe even explore how to get coverage for less cost. Can you just walk us through maybe how that process works? If there was someone out there that we're gonna just give a one minute or two minute type of a case study on, how does this work? What is the perfect example for you on how this would work? Well, usually, first I get going and I get to learn about your business and see what you do and kind of evaluate what are the risks that are involved with what you do and what can be your potential liability or potential liability pitfalls. And then I'll go through your policies and see if those are placed correctly and make sure the numbers are right. Most insurance policies, especially on the liability side, are gonna be based on revenues or apparel. And if those are understated or overstated, that could be a big difference in how much you're paying or how much you're gonna get audited at the end of the year, which is not a pleasant surprise if you get a large audit at the end of the year. No, especially if there's a balance, too. Right, and then we'll also look on the property side and look at your property values. Maybe you own a building to make sure that that's up-to-date and make sure that's evaluated under using the correct models or the up-to-date models, because a lot of times there are programs that we use that will be able to evaluate a building. Same thing with your business property. And then if you're a specialized company, for instance, let's say you're a security guard or an attorney, there's certain coverages or certain companies that will have different coverages that are specialized for what you do. And we wanna make sure that you have the best coverage possible and try to get you the best price. Right, and as I mentioned earlier, my professional liability insurance is pretty standard stuff. It's not anything fancy, but yet you will be able to get better coverage for less cost. And that was a real surprise. It was a very good surprise to me, and I would imagine there's other people out there that could benefit from that as well. So if they wanted to maybe talk to you a little bit more about this, how would they get in touch with you? Do you have a website? Yeah, we have a website. It's our agency website, it's www.acwgroup.com. ACW.group. Oh, acwgroup.com. Okay, .com. And then my office number is 535-5080. 5080, all right, very good. I'll probably ask you that again, but for somebody that wanna just get in touch with you to find out how to have this review done, and you could probably get this done in just a few hours. And so with a few hours worth of investment, they could end up saving some money on this deal. No guarantees, but it's a possibility. It's probably worth a few hours of time. And to be honest with you, more and often than not, we are able to save people some money. Sometimes not, sometimes they're not covered correctly, and we'll point that out. And at least have them advised on what they need. Well, and that's kind of interesting. And maybe this is a little bit off the topic, but as a professional in that industry, if you found an area that was a big exposure item, I mean, naturally you would explain that to the client, and they would understand that there's this big hole of risk that's not being covered. But it's their choice whether they covered or not. I mean, there's no rule or law regulation that says they have to have that coverage, right? Yeah, correct. And a lot of that's a business decision because there's a lot of potential risks out there. But as long as the business owner knows about those risks and is well-informed, I think that gives people an informed decision. Well, and there could also be some mitigating circumstances that they might take some steps to maybe reduce that risk a little bit. Yes. So, that's interesting. What are some of the more current or high-profile happenings in the industry right now that maybe people should be aware of that they need to get coverage for? I think right now, the big thing, and we learned about that today, and a big news story today is cyber reliability. Yahoo. Yeah, Yahoo came out this morning, probably the biggest cyber breach in the history with 500 million accounts hacked. That's huge. Yeah, and we've been... How many people are in the United States? Well, I'm not sure. 370 million or something, 400 million, whatever, 300, 400 million. I mean, this is more than the entire population of the United States. Yeah, correct. That's amazing. And just on the ground level, what we've been seeing is we've been seeing a lot of what we call ransomware attacks or attempted ransomware attacks, and an example of that is you'll get an email and that email will have an attachment, and this will reply to any business that runs any business over the internet or by email, and they'll open that attachment and it will embed a virus on their computer. And then, and to get rid of that virus, you'll have to call that company up who put the virus on there to take it off. And pay the ransom. And pay the ransom. And the statistics that just came out, I got an email today that has been up 300% from 2015 to 2016, and we've just seen it. I mean, we see it almost every week, either by our clients or we've gotten on ourselves. Yeah, and as of I, I've received some of these myself, and fortunately I've not fallen into the trap of opening them up. But I heard that the ethics of these hackers are beginning to deteriorate because back when they first started coming out, you'd pay the ransom, you'd get your computer and your files back and everything'd be okay. Now some of them are just deleting everything anyways, even when they get paid. And what's worse is that they can get into your address book. And so what we've been seeing is you may have your client list or your client address book in your outlook, for example. And then everybody that's in your outlook or your emails, they'll be getting an email from you with the same virus on it. And that's where liability comes into play. Yeah, and I've gotten some of those of clients. I've had clients send me an email with something that I wasn't expecting to receive, whether it be a link or an attachment or something. And I guess because I've seen this so many times, I automatically know. And I wasn't expecting it from that person. And so I knew it was something had been hacked. And I have found that a lot of it comes from the Gmail, the Yahoo mail, the MSN hotmail, that kind of stuff. Some of the more, I guess, common services and not so much from some of the individual domain name type, although that does happen. Yeah, and actually that's been, we've been seeing a lot more of that, in fact. I've gotten some emails from my own clients under their own email address. And it's a masking email. So the cyber criminals will get ahold of their email address and it will look like an email from your client, but it will actually have a phishing of ours on there or ransom virus on there. They're getting tricky. I know that the IRS just today sent out two or three notices to people that that type of stuff is coming out under the, I guess, the heading of an IRS communication. The scams asking for payment and downloading viruses and that sort of thing. And the cyber reliability coverage is pretty broad nowadays from a lot of companies. So we're talking about ransomware. There's actually some cyber reliability insurance companies that will pay the ransom. And not only does it pay the ransom, it will pay for the repair costs. It can pay for the data restoration in case you lose your data and the cost to repair the software hardware. And that's really nice coverage because ransomware has become a big issue now. Generally, people think of cyber reliability and they think they only need it if they have PCI, which is a protective consumer information like credit cards, social security numbers, medical records, and in the past, businesses felt that only if I have that information or if I take that information, should cyber reliability be relevant to me. But with the new types of cyber crime coming out, it's applicable to any business. Well, one of the big targets now are tax return preparers. And particularly with a smaller independence where they'll actually hack into the tax software that they're using to get access to all that data, which is virtually everything. Name, social security number, date of birth, everything is in there. And identity fraud is very high risk. And that's a big part of the cyber reliability coverage because in Hawaii we have what's called a Hawaii notification law. So if you were to get breached and you had that type of information, by law you have to send out and notice to all your clients that this happened, our system got breached and this is what type of information got exposed. And if there happens to be a claim or you get, unfortunately, if you get sued for that, the insurance covers not only the suit and the defense, but also the notification costs and identity monitoring. Because a lot of times what happens with these cases is, especially if it's a number of individuals, it might settle and part of the settlement is providing the identity theft and identity monitoring. And the insurance will cover that. Well, and it's number one, good to know about this, but number two, it's good to stay on top of this because it's constantly changing. I mean, this is a very active part of the, I guess, the fraud that's going on across the country. And not only to have the proper coverage, but also, I think sometimes, the insurance companies you work with provide some guidance on how to mitigate that fraud and have the firewalls and the other type of security measures in place to prevent it. Yeah, and most, a lot of cyber policies now will have risk management, or risk management manuals and programs. And it's good for everybody in your company nowadays to understand what the risks are and the pitfalls are and understand how to handle incoming emails, how to handle those sort of things to prevent anything from happening. And that's also a service that a lot of the insurance companies provide. That's great. And I wish we had more time, but the show is that we've run out of time. We can come back later and we can maybe have a little workshop on how to maybe protect yourself and what some of the more common tactics are. But thank you for being on the show today. Thank you for having me. This is Business in Hawaii with Reg Baker. I've been talking with Darren Matsuda here and we've been talking about some pretty scary stuff, but I think important to the small business community to protect not only themselves, but also their customers. But we air live every Thursday at two o'clock from two to two thirty. Hope to see you next week. Until then, aloha.