When the countdown ends on 2009, it also brings an end to the first decade of the new millennium. It’s hard to believe how much our world has changed in those 10 short years, from global terrorism (still happening) to the financial meltdown to the ascendancy of the Internet. Let’s look at just a few:

Everything tech. Yes, the Internet was around at the turn of the century, but it wasn’t as ubiquitous as it is now. Since then, a whole generation has grown up with this technology, and that generation is our future employees and customers. While all this has made our lives a lot easier, it’s also phased out a lot of what we were confortable with and raised the bar on customer expectations. A mixed blessing, to say the least.

A world of new risks. The world is smaller, and the risks you underwrite are not like anything that’s been insured before. Acts of terrorism, environmental exposures, professional liability related to new technology standards and expectations — they’re all in the mix, with new risks coming at us every day. The challenge for our industry will be to keep one step ahead of anything new that comes along.

A bigger, smaller agency universe. The agency/brokerage M&A boom may have slowed to a trickle, but the activity of the past 10 years has altered the landscape forever. Big brokerages have gotten bigger by increasingly targeting the midmarket customers that have long been the bread and butter of the average agency. Conversely, the latest IIABA Agency Universe numbers suggest that smaller, startup agencies are on the rise, thanks in large part to the availability of sophisticated automation systems that allow them to compete with bigger players.

More eyes on the industry. Public/political scrutiny of the insurance industry is nothing new, but the seismic financial upheavals of the past 10 years — from the Enron fiasco in 2002 to last year’s subprime mortgage meltdown and AIG bailout and current healthcare debate — have put this most risk-averse industry in the spotlight more than ever before.

And while nobody can predict what the next 10 years will bring, it’s a safe bet that the trends we saw begin at the dawn of the century will continue to play a significant role going forward. And while 2009 was a good year in that we dodged a lot of bullets — from natural disasters to truly bad legislation — it’s inevitable that we’ll stand to take a hit from these and other problems in the future.

What were your biggest concerns in 2009, and what do you predict will dominate the headlines in 2010?

Last June, AA&B took an in-depth look at insurers and agents who were specializing in “green” insurance coverage. Our sources spoke glowingly of the potential for growth in green construction, especially in the area of retrofitting existing buildings — a topic covered in a current Web exclusive article on the subject.

Supporters maintain that adopting green building methods and materials will create a “green collar” job transformation in the U.S.  The latest figures from the USGBC in a “Green Jobs Study” conducted by Booz Allen suggests that green building will support or create 7.9 million jobs between now and 2013. And in certain areas of the country, it seems to be working. One independent study shows California green jobs grew 36 percent from 1995 to 2008.

But President Obama’s campaign promises to create 5 million new green jobs and put the U.S. in the forefront of renewable energy production have failed to materialize. Ironically, China, which for years has been reviled for its profligate use of nonrenewable energy, is now the world leader in the production of off-grid wind turbine generators, according to a recent article in EcoWorld.com.

According to a recent article in Fast Company magazine, there is terrific potential for green job growth in these areas:

• Farmers
• Foresters
• Solar power installers
• Energy efficient builders
• Wind turbine fabricators
• Conservation biologists
• Green entrepreneurs
• Recyclers
• Sustainability systems developers
• Urban planners

This list is inclusive enough to accommodate all levels of workers, from MBAs to retrained blue-collar people.

Nobody should be cheering green jobs more than the insurance industry. With the manufacturing and construction industries struggling to find a place in the “new normal” economy, a burst of new activity in the green jobs area could pull these and other industries out of the doldrums.

But as the California example indicates, it takes more than hope to build the new green collar middle class American worker. Green is “gold” in California in large part because of state and municipal rules mandating green compliance. Like any fledgling industry, green jobs need some government incentive to get off the ground. As long as it’s cheaper to keep doing things the old way, the green promise will remain just that. In China, the government subsidizes wind power, knowing the young industry won’t be self-sustaining for years, but willing to make the investment. It seems if we really want to dig ourselves out of our current economic malaise, our country would be better served by a government that’s willing to invest in the future instead of propping up relics from the past.

Maybe I just have fraud on the brain since attending last week’s annual PLUS International Conference in Chicago (see our Web exclusive article on data breach), where the subject came up a lot, but there does seem to be a lot of synchronicity about fraud issues in the zeitgeist lately. 

Just today, National Underwriter posted the findings of a new PricewaterhouseCoopers global economic crime survey showing that insurance was the second most fraud-prone industry, right after communications. It’s not surprising that insurance is a target, given the amount of data used in processing products and services. Typical crimes include asset misappropriation (such as inventory theft), accounting fraud, and bribery — all crimes that are easier to commit because of reduced resources deployed for internal controls, according to PwC.

The threat is just as real for the average joe, especially in a world fueled by virtual transactions. Electronic data files are dismayingly easy to hack for expert criminals who know what they’re doing, according to Lori Nugent, partner at law firm Wilson Elser Moskowicz Edelman & Dicker. Lori, a specialist in the security breach area, scared the bejezuz out of me by describing how easy it is for sophisticated hackers, many of whom are part of huge international fraud rings, to grab data like credit card and Social Security numbers and ruin your life.

For agents, the burden is on you to protect your customers’ confidential information — hence the FTC “red flags” ruling. But you shouldn’t need a federal mandate to establish internal safeguards for your firm. In a conversation about data security breaches on the LinkedIn ACT group, several readers offered recommendations on how to start, including:

• Creating a data security plan and establishing proper controls
• Limiting data access with proper security rights assignment
• Establishing a system to eliminate paper in an encrypted repository
• Limiting access to confidential life/health data to restricted employees
• Limiting the ability to access personal information between commercial and personal files
• Establishing security settings so only producers have access to their clients’ data 

Tech guy Steve Anderson has written a book on client data security that’s worth a read — check it out at www.clientdatasecurity.com.

Meantime, with the red flags law looming, what are you doing to secure your clients’ data?

Did you get your flu shot? Are you washing or sanitizing your hands? And more to the point, what’s the absentee level at your office?

Here at the Chicago Summit Business Media office where AA&B is based, we’ve had at least two fairly lengthy employee absences because of some form of flu. Although one case was inconclusive, the other employee is still waiting to get the word from her doctor on whether the illness that kept her out for a week was officially swine flu (which brings up the subject of the H1N1 vaccine shortages, for one thing, but that’s another story).

And while two cases may not sound like much, it seems as if the rest of us are just feeling under the weather to some degree or another — aches and pains, coughing, sneezing, and a general malaise (or maybe it’s just the power of suggestion). Maybe it’s the time of year — daylight savings time, effective last weekend, makes 5 p.m. seem like midnight. Most of us are suffering through not H1N1, but a cold or some less extreme form of the annual annoyance that is the flu (the official line of demarcation between flu and H1N1 is whether or not you get a fever and have stomach issues).

As far as productivity goes, whether you’ve got swine or seasonal flu is a moot point. Sick is sick, and when sick people stay home (as they should), work doesn’t get done. The issue could very well be exacerbated by the fact that many workplaces have been decimated by layoffs over the past year. Add the flu to these shrunken staffs, and companies could be facing a very real production problem.

When the swine flu first raised its ugly head this spring, I spoke with Harry Rhulen, CEO of Firestorm Solutions, which specializes in advising corporations on business continuity, communicable illness and disaster planning. I called Harry today to get an update on what his clients are seeing and to paraphrase Al Jolson at the dawn of talkies, the message was, “You ain’t seen nothin’ yet.”

Although two of his clients have reported deaths related to H1N1, Rhulen believes things still aren’t as bad as they will be by late November and early December, when cold weather and enclosed spaces create the ideal breeding ground for illness. He predicts that by then, 30 or 40 percent of the nation’s workforce could be home sick — if not from swine flu, then from any other typical winter virus.

By now we’re all familiar with what to do to try and prevent the spread of illness, but what about those employees who already have it? Do you have a formal workplace strategy in place to deal with the absences? Are you allowing employees to work from home if they’re getting over the worst of it, or have to take care of sick family members?

The CDC suggests that businesses take a similar approach to the flu, whether it’s H1N1 or seasonal. Key elements to a plan include:

• Revisiting pandemic plans made during the first swine flu threat this spring
• Allow sick workers to remain home with pay and without fear of losing their jobs
• Develop flexible leave policies so employees can care for sick family members
• Share best practices with other businesses in your community
• Add a widget or button to your Web page so employees can stay informed.

A while back, we conducted a poll on our Web site asking readers if their businesses were doing anything different in the way of company policy to address the possibility of a swine flu outbreak. Most of the few respondents said they weren’t.

Now that the official flu season is here — and things are likely to get worse — I wonder if the answer has changed.

How is your office coping with absenteeism related to seasonal and/or swine flu?

While I was attending the ASCnet TENCon in Kansas City earlier this month, CIAB made big news by announcing a partnership with LexisNexis to build a Web-based insurance exchange for independent producers.

The project, which goes into testing next summer, is designed to make interface easier between insurers and producers– a subject near and dear to the heart of Jeff Yates, the head of IIABA’s ACT group.

However, he cautioned, “let’s not lose sight of the tools we already have” in the ongoing quest for information sharing–specifically, the real time initiative that he and many others have been tirelessly promoting for years. (No coincidence that ASCnet’s new chair is Lisa Parry Becker, whose passion about real time is well documented in the industry.)

Do you think the CIAB insurance exchange will take hold in the industry?

Last month we posted an interview on our Web page with Progressive’s  Karen Barone, national distribution leader for agency business, which proved to be 0ne of our most popular features.

Not surprisingly, part of the article’s interest — or more accurately, controversy — involves Progressive’s promotion of direct purchase along with sales through its agency force. 

Many of our readers pointed to Progressive’s heavy TV advertising — currently featuring the wacky saleswoman character, “Flo” — as testimony to its commitmemt to direct sales and cutting out the middleman. Surprisingly, in spite of the prevalence of Progressive advertising promoting direct sales,  Barone noted that about 65 percent of Progressive’s sales actually come through its more than 30,000 independent agencies.

Now, in recognition of that fact, Progressive is unveiling on Oct. 19 a new Flo commercial, featuring — you got it — an independent agent. (Well, actually, he’s an actor playing an independent agent, kind of like actress Angelina Jolie will play me in “The Laura Toops Story,” but you get the idea.) And, taking a tip from other industry branding programs (remember the Big I and Raymond Burr?), Progressive agents can even access a version of the commercial they can customize with their agency’s branding to run locally.

The thinking behind this move seems pretty sound — an attempt to promote the insurer’s already prevalent independent agency sales. But the end of the commercial — a voiceover that states, “Prices vary based on how you buy” — sums up the controversy. Because, of course, consumers who buy directly through Progressive will pay less than those who go through an agent.

Do you think Progressive’s new campaign will increase agency sales?

One of my favorite TV shows is AMC’s Mad Men, that paeon to the advertising industry of the early 1960s, when (mostly) men smoked and drank and came up with concepts to brand businesses and sell products. Last season, several episodes revolved around Sterling Cooper’s launch of a television department. At first, they’re not sure what to do with it. The department head is overworked, underpaid and disrespected. When he can’t keep up the pace, agency brass tries to fob off script reviews to the curvaceous office manager. And top dog Don Draper sometimes has a tough sell persuading clients of the importance of adding television to their media mix. Sterling Cooper even makes a point of hiring a couple of young guys to keep up with the new cool medium.

This sounds familiar, if you replace “television department” with “social media.”

Throw away everything you know about customer outreach, time management and building a brand. Over the past year, social media (SM) has changed the landscape of all these areas of property-casualty insurance agency operation, from how you manage your employees to staying in touch with your customers.

And the dust hasn’t settled yet. Even the experts are unsure about how social media will shake out in the business world. One thing is certain, however: Ignoring it is not an option.

That much was evident at the first Aartrijk Brand Camp, held this week at the snazzy Hotel Sax in downtown Chicago. The day-and-a-half meeting, attended by a cross-section of agents, carriers and media types, is the premier event hosted by insurance branding guru Peter van Aartrijk (who I knew long before his guru days). Speakers and subjects ranged from the macro view (Brad Keown of Facebook) to the practical (Marcia Hansen of Allstate), and everything in between.

Some of the findings were startling.

• 29% of consumer consumption is digital, and that number is growing
• Facebook has 90 million U.S. users, and plenty of your customers are there
• When it comes to sheer number of users, “Social media is the new porn,” according to Daniel Honigman, digital communicatio9ns supervisor at Weber Shandwick
• 91% of B-to-B decisionmakers participate in social media, 69% for business purposes
• 70 million retiring baby boomers around the globe are being replaced with only 15 million Gen Xers, with 55 million Gen Yers waiting in the wings, according to Deloitte.

This adds up to nothing less than a quantum shift in how we do business. Statistically, the future face of business will be increasingly female, Hispanic, and very comfortable with all forms of Web 2.o technology. This is the demographic we need to attract and understand, both as employees and customers. Much of our communication with them boils down to authenticity, transparency and trust — words not typically associated with insurance.

Take employees, for example. Because much of social media blur the lines between the personal and professional, your employees can be your company’s goodwill ambassadors everywhere in the virtual world. The Brand Camp speakers agreed that instead of building firewalls between your employees and this online world, you should be training them on its use. The thinking is that they’re going to be popping onto Facebook and YouTube on company time, anyway; you might as well make sure they’re doing it right when it comes to representing your business.  Bottom line: If you hired them, you should be able to trust them to do right by you — radical thinking from what most of us are used to!

Social medial also mean instant and constant accessibility.  Not too long ago, I would have “covered” this event by writing up the proceedings for publication in a magazine, which readers would get more than a month later. Reporters covering the Brand Camp tweeted their comments for instant delivery throughout the event, updated their Facebook or LinkedIn pages, or blogged about it, with plenty of room for others to comment (feeedback is a key element of social media).

This doesn’t mean the “old” communication methods are dead. Press releases are alive and well as a way to stay on a publication’s radar, and in spite of the growth of “unofficial” sites, there is still plenty of cachet in being written about in a recognized publication (whew! Good news for us formerly ink-stained wretches!). But social media needs to be part of your branding arsenal, and like any other branding effort, must be thoughtfully integrated into the mix.

What is your agency doing with social media to promote your business?

Businesses give plenty of lip service to ethics, but you have to wonder how many really take it seriously. Corporations are awash in sensitivity training, sexual harassment prevention workshops and other endless efforts to promote ethics. Yet many of these same businesses have also contributed to the financial mess we’re in today — by promoting salary and bonus policies that emphasize profit over common sense.

The issue of ethics, or lack thereof, is exacerbated in tough economic times. It’s no surprise that insurance fraud is up across the board for the first half of 2009, according to the NICB, or that crimes like burglaries and break-ins are on the rise in even the safest communities.  I currently serve on the national ethics committee of the American Society of Business Publication Editors (ASBPE), where the convergence of print and online content have blurred the line between editorial and advertisement – at a crucial time when advertising dollars are growing ever scarcer. When businesses are fighting for survival, the concept of ethics can seem like a quaint anachronism from a more profitable past.

Ironically, as times get tougher, ethics become more important — or should.  AA&B ran a “Last Word” editorial in April by a programs insurance broker who blamed the seemingly endless soft market for the cutthroat competition that was trumping professionalism and in-depth customer knowledge. She complained that unethical newcomers were passing themselves off as experts and using discount rates to entice formerly loyal clients, who, financially squeezed themselves, were seduced by cheaper premiums. Think of the E&O claims that await an agent or broker who doesn’t really understand a client’s risk!

On a larger scale, the lack of ethics in the financial services industry has not only put us into a global recession, but now has the Feds breathing down the industry’s neck for tighter regulation. Based on the industry’s past irresponsibility, this should neither be surprising nor unwarranted.

That’s why the CPCU Society‘s recent unveiling of “A Guide to Organizational Ethics Policy” couldn’t come at a better time.  The Society’s ethics committee collected 75 ethical codes of conduct from different insurance organizations and compiled a list of 12 steps an insurance business can take to ensure it is operating ethically.

Not surprisingly, the first and most impotant step is to “create an ethical mission of the organization,” a single sentence that broadly describes the organization’s goal. Sample statements include “Treat customers, vendors, employees, owners and regulators as we would wish to be treated,” or “Place the interests of those with whom we have business relationships above our own interests.” The other 11 steps boil down to communicating and enforcing this statement.

Does your agency have an ethics policy? Tell us about it, and why it was adopted.

It’s hard to believe it’s been 8 years since the terrorist attacks on the WTC and the Pentagon. Do you remember what you were doing when it happened?

I was driving north on 294 on my way to work at NAII (now PCI) and listening to erstwhile Chicago radio shock-jock Mancow Muller gibbering about a plane hitting first one tower, then the second. By the time I walked into the office, the news about the Pentagon attack was being broadcast. My first thought was that a massive planned air attack was moving west, and that a downtown Chicago target would be next on the list.

Of course, there weren’t any attacks on Chicago, but that didn’t keep the events of that day from changing all of our lives, on both a professional and personal level. I recall spending the next week or so in a state of shock and uncertainty. When would another attack happen? Where was Osama bin Laden? Were there still people buried alive in the WTC rubble? How could insurance craft coverage and pricing to protect against similar events? And how could someone write about the impact of such an unprecedented event when history was still happening?

I wasn’t alone. Both businesses and people were afraid to travel, conduct business, make long-term plans. 9/11 may not have launched the recession of the early 2000s, but it sure didn’t help. In the aftermath, a burgeoning global recession went viral, following heady years of stock market growth, dot-com mania, and relief that we dodged the 1999 Y2K or Armegeddon bullet. 

Ultimately, of course, insurance took a huge hit — between property, business interruption, aviation, workers’ comp, life and liability payouts, the cost came to almost $40 billion, according to III. The human cost was much higher.  Zurich, Marsh and Aon, all of which had offices in the Twin Towers, had their share of fatalities among the almost 3,000 who died as a result of the attacks.

Today, in spite of a couple of wars and the Dept. of Homeland Security, we don’t seem to be any safer. According to risk modeling firm Risk Management Solutions (RMS), potential insured losses from a terrorist attack rose 8 percent in 2008, based on the growing threat of chemical and biological attacks. (This doesn’t even take into account the threat of cyber-terrorism, which could wreak more havoc on the civilized world than a dozen 9/11s).

We live in a world that has been unalterably changed because of what happened on 9/11. Today’s children, many of whom can never know what things were like before the threat of global terrorism, can never comprehend the more carefree times we were lucky enough to have experienced. It’s pretty sad when you have to pity the young.

Texting while driving (TWD) has been in the news a lot lately — most recently because of a new gone-viral video on YouTube that dramatizes its dangers. Although it’s frequently lumped into the category of “distracted driving,” TWD is a far cry from just talking on a cell phone. Talking basically translates to a phone and a crunched-up shoulder, leaving one hand free for steering. For the unskilled among us, TWD frequently requires the use of both hands — one to hold the device and the other to text. It also involves translating abstract thought into written language, no matter how truncated that language may be. Most importantly, TWD requires a driver to take his eyes off the road, making it both mentally and physically distracting. 

While drunk driving is being driven into oblivion by a convergence of tougher policing and DUI laws and social pressure from groups like MADD and the general public, TWD doesn’t seem to have the same stigma. Drunk driving is bad in part because it suggests a lack of a self-control. Texting while driving frequently involves work — and in today’s neo-Puritanical society where people are working longer and harder than ever, what could possibly be wrong with working constantly, even behind the wheel?

And guess what? Your peers are not only doing it, but admitting to it.  We conduct a weekly “quick poll” on the AA&B Web site, with questions ranging from the silly (name your favorite fast food) to the serious (weighing in on the health insurance reform debate). The question that has gotten the biggest response so far was, “Have you ever texted while driving?” — and almost a third of the respondents admitted that they had. If TWD levels are that significant among insurance people – who should really know better – the numbers are probably much higher in the general population.

While unscientific, our survey suggests that TWD isn’t the exclusive domain of Gen Y-ers, who I don’t think comprise much of AA&B‘s readership. Text-intensive social networks like Twitter are peopled primarily by the 35-and-up demographic. Maybe it’s just me, but the thought of a horde of aging drivers texting and hurtling down the expressway at 85 mph in their 5,000-pound SUVs beats the hell out of any Stephen King novel for scare value.

But the tide may be turning. Some states are passing laws prohibiting TWD, and federal legislation is on the table as well. A recent survey by Nationwide Insurance found that 80 percent of Americans favor a ban on texting while driving, while two thirds favor a ban on cell phone calls, and more than half say they would support a ban on cell phone use altogether.

It’s unclear whether any laws will really stop the hard-core from texting while driving, but at least it might make them stop and think — even if they’re only thinking about avoiding a costly ticket or better yet, a jail sentence.

And for those of you who are proud of your TWD ways — please let me know when you plan on being on the road so I can stay home.