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by Jon Spaugy, BIG CEO

Winter 2017-18

AULD LANG SYNE The end of the 2017 is upon us and as we all look forward to the holidays and the New Year, let’s not forget to consider the successes we achieved and the challenges we faced during the past year. As a matter of fact, one of the most popular songs played in the first minute of January 1st exhorts us to drink a toast to “auld lang syne,” Loosely translated, it means “days gone by.” Of course, the end of the year (or “lang syne”) means scores of “best of” lists and recaps of what happened (good and bad) over the preceding 12 months. You’ll see “Man/Woman/Person of the Year” (faked and otherwise), and hear plenty about what went great and not so great. We’ll toast our triumphs and pledge to do better in 2018. For BIG, we pretty much followed our business plan. Growing our annual convention, establishing a solid “minivention” event in Northern California , creating more fun networking events (ball games, picnics, cruises, etc.). Our educational opportunities for members and other insurance professionals increased, as did our meetings. Of course, with any success, it’s what you do to build upon it that’s most important. Don’t rest on your laurels, as the saying goes, especially when there’s more work to do.

Expect BIG things next year as we continue on our upward trajectory. We plan to offer a more diverse series of education seminars, an even better convention program with an expanded trade show, a larger BIG footprint in Northern California, plenty of fun events, and a promise that your BIG membership dues are an excellent investment in your professional development. If you have an idea for a BIG event or a way to improve our operation, or you just want to get involved, please contact me. As I close this final editorial of 2017, I would like to thank everyone who had made BIG possible. From my team keeping my businesses humming and freeing me up to run our BIG machine to the solid core of volunteers who share my vision and make me look good implementing it, I cannot adequately express how much you all mean to me. I hope that is made clear throughout the year. To may family, colleagues and friends, I wish you and yours the best of holidays and a prosperous New Year.

There’s nothing wrong with dreaming BIG. The most memorable achievements resulted from someone saying it can’t be done… and someone else proving it can. But as they say, reach for the stars but keep your feet firmly on the ground. That’s where BIG can be the biggest help.


November/December 2017

Get Active, Get Involved, Get BIG!​

MANAGING STRESS IN OUR LIVES By Ellen & Dana Borowka, MA, Lighthouse Consulting Services

person might have some queasiness in the stomach, begin to bite their nails, and then get some tension in the neck and shoulder muscles that may turn into a painful headache. This person might try going for a walk or meditate as soon as he or she recognizes the stress symptoms. Pinpoint the source of the stress. Look at what is going on underneath the fear and tension – Ask yourself, “What am I stressed about, and why am I so stressed?” Since managingstress is basically a low grade anxiety, it might be helpful to consider if there are any fears involved. Review what emotions you are having about the stress. If you feel anger then you may have to search beneath the anger, and usually there is some hurt or pain. Many people accuse someone or something outside themselves when they get stressed. Who or what do you accuse when you get stressed? Since we have much more control over ourselves then others, it’s important to consider what you can do to make changes to reduce the tension.

As the economy continues to ebb and flow, we all need to be thinking as clearly as we can in order to stay a step or two or three ahead of the curve. The stress or “fear” of the future can prevent individuals and organizations from seeing opportunities that could be staring right at us. Life always seems to be filled with hectic schedules and looming deadlines. So, how do we deal with the daily pressures and stresses at work and home?

Three Steps in Managing Stress


Acknowledge & accept it. Be aware of when you are stressed and take the responsibility to make a change. Some people ignore, minimize or don’t realize that they are stressed, until they get sick or overwhelmed. Don’t try to deny or suppress your stress. It’s important to deal with the situation. How do you suppress it? By eating, drinking, smoking, shopping, fighting…? The first thing to do is to become more aware of stress by monitoring yourself and short circuiting your personal stress cycle. A good way to do this is to ask yourself, “How do I express my stress?” Become familiar with how you react to stress and find ways to interrupt your cycle. For example, someone might first feel worried and confused over an upcoming project. That

Make an action plan. Once you know the source then brainstorm to manage the problem. How can you deal with the situation differently than ever before? Most people are uncomfortable with making changes. Changes are hard and unknown – even a difficult situation is at least familiar. An effective way to make successful changes is to take small steps of change. Think of some small steps that you can take to make changes in your life. Start with one little change and once you become comfortable with that change, then you can move to the next. An example of small changes is someone who is shy and wants to become more comfortable talking with others. That person may first say hi to neighbors, co-workers, etc., then begin to have small light conversations with perhaps the cashier at the supermarket, and ultimately, move on to participating in a club or organization. The key is small, baby steps to making changes.

Helpful Ideas for Dealing with Stress • Set realistic goals and expectations for yourself and your relationships at both home and work.

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• Work as a team at home and work. Reach out for support when dealing with difficult problems. • Prioritize your work. Ask your supervisor and co-workers to help you organize your work. Break large projects down into smaller parts.stress4 • Don’t try to do more than you really can. Say no when you need to. • Prepare as much as possible for stressful events. • Realize this is a difficult time and you must take care of yourself: Eat healthy, drink enough water, regularly exercise or take walks. Keep fruit bars, fruit, and crackers in your work area. Take 5-10 minute breathers to the water cooler, window or outside. Take time during the day to stretch and/or do some deep breathing exercises or meditation. • Find ways to relax, like taking warm baths or listening to your favorite music or nature tapes. Get away from stresses by participating in group and individual sports, social events and hobbies.

fear.” We can’t eliminate stress, but we can find ways to balance and use stress to achieve our goals and dreams in life. This article was excerpted from ue.​ ABOUT THE AUTHORS Dana Borowka, MA, CEO and Ellen Borowka, MA, Senior Analyst of Lighthouse Consulting Services, LLC with their organization constantly remain focused on their mission statement – “To bring effective insight to your organization”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. If you would like additional information on this topic or others, please contact Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, or visit their website at ​

• Work to resolve conflicts. Deal with anger and conflict by taking 30-minute timeouts before responding, and listen with empathy. Try to understand why others feel the way they do. • Say to yourself during the day, “I don’t have to be perfect.” • Seek help when stress gets out of control. Some of this may sound like common sense. Yet, if common sense was so common, then we wouldn’t find ourselves in the trouble we do. Many times, we just want to get rid of stress5stress, much like we try not to feel sadness or anger. However, stress and fear are a natural and necessary component of life. Stewart Emory once said, “The absence of fear is not an option that is available to most people. People are looking for that, but that is just not an option. The difference between people who are really making it in the world and the people who are not is simple: The people who are making it in the world are making it and they have


Illegal Auto Policy Moratoriums in Fire Areas Leads to CDI action stop any and all moratoriums on auto insurance and reminding them that such moratoriums and restrictions are prohibited under California Law.” Consumers are urged to contact the California Department of Insurance if their insurer, agent or broker tells them they will not write a new policy or allow changes to an existing auto policy. The toll-free number is 800-927-4357. In a second action taken to help Southland wildfire victims, Commissioner Jones issued a notice to insurers asking them to agree to expedite wildfireclaims handling and adopt a billing grace period. Most insurers agreed to the commissioner’s request to follow expedited claims handling procedures after the October wildfires in Northern California. The commissioner expects insurers to agree to these procedures for the Southern California wildfires. IIn response to insurers imposing moratoriums on writing new private passenger auto policies or prohibiting additions to existing auto policies in the Southern California wildfire areas, InsuranceCommissioner Dave Jones issued a formal notice to insurers directing them to cease any and all moratoriums on auto insurance and reminding them that California law prohibits this practice. Proposition 103 and regulations issued by the commissioner require insurers to write private passenger auto coverage for any consumer who qualifies as a good driver. “Buying new auto coverage or changing your auto insurance coverage any time before you experience a loss is your right as a good driver,” said Insurance Commissioner Dave Jones. “I am committed to making sure consumers’ rights are protected, which is why I issued a notice to all property and casualty insurers writing private passenger auto directing them to

With thousands of homes damaged and destroyed by wildfires blazing across the state, residents face the long and painful task of recovery, which often includes trying to reconstruct destroyed or missing documents. In an effort to speed recovery, Commissioner Jones asked insurers with policyholders in the areas hit by fires to agree to claims handling procedures to bring more timely payments and flexibility with some of the deadlines and documentation typically required by insurers. “These fires are exacting a devastating emotional and financial toll on residents across the state,” said Insurance Commissioner Dave Jones. “Victims need every resource available to them as quickly as possible, which is why I am asking California insurers to adopt these expedited claims handling procedures to get help to policyholders. I strongly encourage California insurers to adopt these procedures to help fire victims begin to put their lives back together.”


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After destructive wildfires, policyholders often find much of what the insurance company needs to process their claim are missing or were destroyed in the fire, such as home inventories, receipts, bills of sale, and vehicle ownership papers. Under the commissioner’s expedited claims handling procedures, policyholders may receive advance payment for up to four months of additional living expenses, 25 percent of policy limits for personal property, and an expedited process for debris removal-a first step in rebuilding. These procedures speed payment for damaged or destroyed vehicles and provide at least 30 days billing leniency for lost renewal notices or those who do not have the ability to have mail forwarded. ​


Sharron Varga Insurance Industry Legend

By Don Lukenbill If you have been involved in the insurance business anytime from a few decades ago to the present time, you have probably met – or at least heard of – Sharron Varga. She is a regular at most BIG events and carries the torch for the Aktion Club, which benefits from the annual BIG golf tournament. Personally, this writer met Sharron through the old Pasadena-based American Agents Alliance group more years ago than either of us want to admit. We did a profile of Sharron a few years back, but decided to revisit our friend and dip our toes into the fountain of knowledge once again. BIG TIMES MAGAZINE: For the few people that don’t know you, let’s start out with a little biographical information. What was your first insurance position and what led you to make it a career? SHARRON VARGA: My first position was a claims clerk in Syracuse, NY, which did not lead me to choose insurance as my career (LOL!). At the company level Back East, I worked in marketing, underwriting, bonds and commercial auto. Prior to making a move to California, I went to work in a small agency. Arriving in CA, I worked for Merrill Lynch as a broker’s assistant. They asked me if I would like to become a broker, but thought it better to get back in sales, in particular insurance sales where I was had the most experience. I started as a marketing rep National Auto and Casualty covering SoCal. Then I made the fateful (!) decision to start my own agency from scratch --- with zero customers. BTM: What have been some significant changes in the insurance business since you started? SV: Significant changes? Of course, your younger readers are really going to laugh, but the biggest advancement has been the computer. In the old days, we rated everything by hand! My first computer was huge and had no rating programs, just individual company

rates installed. Of course now you can buy insurance with your smart phone, so technology has really advanced. Same with marketing. The days of ads in the Pennysaver and Yellow Page ads seem like a lifetime ago. BTM: When did you decide to step away from the dayto-day operations? SV: I didn’t step away from the day-to-day operations till the day I sold my agency. I was always hands on and never worked behind closed doors. I would rarely even be in my office, preferring to be in the “Big Room” where all the activity took place. BTM: What would you say to someone considering a career in insurance? Talk about some solid first steps people can take. SV: I would have a few questions for someone considering our business: Do you like people? Are you honest? Are you willing to work for quite a while until renewals start coming in and you will have much money? Are you willing to continually educate yourself in everything that you sell? Hard work with long hours equals success. BTM: Ultimately, what does it take to be a successful insurance agent or broker? SV: To be successful is basically the same as getting started. Working hard, staying current with your education in the markets and products you are selling. Be ethical and treat your clients as you would like to be treated. They will refer and help do your work for you. Referrals are the golden tickets for a successful business. BTM: Where does a solid insurance trade association (like BIG) fit in? SV: An association such as BIG fits in for all the right reasons. The first advantage is education. Taking


November/December July/August 2017 2017

a “cram course” for C.E. does not give you the same education as sitting in a class/workshop. BIG provides seminars on a continuing basis, monthly and at their conventions. Being part of an association helps you create, build and maintain friendships with your fellow agents, marketing reps, company execs and other insurance professionals. Professional friends often mean referrals, plus it is easier to get appointments if you know the key people. Networking is another cornerstone of success and you need to be seen and recognized. BIG offers opportunities for both. People would ask why I am so friendly and don’t mind making referrals to my “competition.” Simply put, not every agent can write (or wants to write) everything. Isn’t it nice to get a referral from a friendly agent. Remember that referring works both ways! BTM: Your support of BIG is second to none. In fact, you are involved with a charity that benefits from BIG’s annual golf tournament. Talk about the Aktion Club and how you became involved. SV: The Aktion Club is my baby, and one of the reasons I sold my agency was so I could spend more time with my “Special Needs” Kiwanis organization. It seems like I have been busier volunteering than when I was working. But it is “all good” seeing the smiles and feeling the love that you receive from the people being “helped.” I became involved with the Aktion Club while attending a Kiwanis International convention in San Antonio. This young lady stood on the stage and asked us all how many friends and how many clubs we belonged to. She then proceeded to tell her story of how she had never been asked to join a club and did not have any friends until she found an Aktion Club in her area. She brought the room of about 500 people to tears. I met her later in the elevator and as we talked, I made up my mind that is what I wanted to do. I was (and still am) on the board of Pomona Valley Workshop (now Anthesis) and asked the Executive Director if I could start an Aktion Club in our facility. She said I had to get the board to approve it and do the work. It was about ten years ago that I started the club with 22 members. Now we are thriving with around

100 members – people who “have friends,” have a club, and feel like they BELONG. Something we all can take for granted. In case you cannot tell, I could talk about Aktion Club. I cannot thank BIG enough for its financial support. BIG has helped make it possible for our members to attend conventions and other fun activities. Recently, they went on a cruise to Mexico where they did service and had a blast! I invite you all to come to an Aktion Club meeting and feel the energy in the room You will not leave without feeling happy. Just ask Jon! BTM: BIG has always promoted the idea of community service for agents and agencies. Naturally, there is a philanthropic component to helping out, but how can community involvement help business? SV: I always say community involvement served as my agency’s marketing arm for years. I have served on so many boards and met so many wonderful people. You know what? They all had (have) cars, houses, businesses, etc. Who do you think they see all the time and remember when they need insurance? Free leads AND a great feeling from serving your community. Talk about a win/win! BTM: Now that the year is drawing to a close, give us a few reflections on 2017 and some hopes for 2018. SV: My reflection on 2017 is that it went way too fast without enough time to do all that I wanted to do. When someone told me when I was young that the years go faster the older you get I thought they were crazy, after all a year is a year right? But it turns out to be so true. My hope for 2018 is that I will figure out how to manage my endless paperwork lol Also, the hope to move to Hawaii and start another Aktion Club. BTM: If you could go back ten years and talk to Sharron Varga, what would you say to her? SV: I’m not sure I would really have any advice for the 2007 version of Sharron. I would tell her to enjoy the contact with customers and maybe think about merging instead of selling so I could keep that contact. But I do have the freedom to pursue my volunteer activities that keep me going.


BTM: Now fast-forward to 2027. What do you hope to hear about Sharron Varga then? SV: I hope to hear that Sharron and her family and friends are still healthy, she is still volunteering and has kept in contact with all her insurance friends, and is still helping the insurance industry.

SV: The only thing I regret about selling is missing seeing the clients and marketing people that have been friends for so many decades. Thank heaven for Facebook where I keep track of all of you and your trips and family events. You are all my extended family and I love every one of you!​​

BTM: If you could sum up your philosophy for success in a few sentences, what would they be? SV: My philosophy for success is pretty much stated above. Treat everyone like you would like to be treated. Maintain your principles, continue to educate yourself and your staff, and above all, be a balanced person and give back to your community by volunteering. It keeps you young and puts a smile on your face. BTM: Any final thoughts?


November/December September/October 2017 2017

Sidebar with

Harper & Heim Lawyers

By Jon S. Heim, Attorney


nals do, produce and tell a great deal, even far afield of the specific contentions in any particular suit. Lawyers use subpoenas for various purposes. Primary among them are the simple ascertainment and marshalling of facts. A lawyer wants to learn or confirm some information, identifies a witness who does or may know that information, and serves a subpoena for deposition to obtain it. In those common circumstances, the person served, who may be called the “deponent,” is a mere witness. Most subpoenas are served only for this purpose, and therefore are largely benign to the deponent. But there are other motives for subpoenas. Perhaps a lawyer wants to pressure an opponent for settlement. A timely subpoena to a witness with potentially damaging information, or to a client of the deponent who does not want to be bothered with the dispute, may focus the opponent on the entire and increasing cost of litigation, a cost that can include lost goodwill as well as spent money. Remember too that depositions produce transcripts, which may end up in the hands of other adversaries, or of administrative agencies such as the Department of Insurance or the Labor Commissioner’s Office. Lawyers also issue subpoenas to identify potential new suits or new parties to existing suits. These party-fishing subpoenas are the most dangerous to insurance producers and to small businesses in general.

Statues and court administrative rules give attorneys many special powers. One of the most important is the power to issue subpoenas for personal appearance or for production of documents or things. In general, lawyers may issue subpoenas in federal or state cases, without leave of court. These desk-issued subpoenas may compel the attendance of witnesses at deposition, hearing or trial, the production of documents and things (including hard drives and such), or both. In the investigation or “discovery” phase of civil suits, subpoenas may seek information that is not relevant to the issues in the case, if the information is relevant to the broad subject matter or is likely or calculated to lead to admissible evidence. So in many circumstances, lawyers can make insurance professio-

Suppose an injured party’s lawyer sues an uninsured defendant. The lawyer imagines that the lack of insurance may be the fault of an insurance producer. If it is, perhaps there lies another pocket to pick. Unsure, the lawyer serves the producer with a subpoena for deposition and document production. The producer complies by appearing and answering questions under oath, perhaps without counsel and likely with limited if any understanding of the suit’s facts and procedural status. The lawyer’s questions are carefully tailored to extract key or bad facts, without alerting the producer to the current issues or the lawyer’s ulterior objective. The producer may give damaging facts and make admissions, perhaps unknowingly. Soon the producer is added as a defendant, gets counsel and learns all


about the case. However by then, the producer is stuck with his or her sworn, damaging, in-the-fog testimony. Suppose a lawyer is prosecuting a personal injury suit with a wage loss claim. The lawyer serves a subpoena on the injured party’s employer, for both wage documents and deposition of the paymaster. From the subpoena results, the lawyer learns that the employer routinely withholds overtime wages or misclassifies employees as independent contractors. Not much time may pass before the employer, who simply cooperated in providing wage information in an employee’s personal injury suit, is served with a civil action for wage and hour violations, even a class action if enough employees are affected. We at Harper & Heim, Lawyers can assure readers that this party-fishing strategy works. We use it all the time. We often see it used against our insurance producer clients. Regrettably, party-fishing subpoenas look identical to others on their faces, so deponents can measure the party-fishing risk only by considering the circumstances underlying the action and any related insurance transaction. Returning to the personal injury suit hypothetical, the producer who is served with a subpoena may recognize the file or client as problematic, from either memory or file review. Or an employee of the producer may equivocate when asked questions about the file or transaction. Perhaps a subpoena arrives after inquiries -- open or undercover, suave or clumsy -- by attorneys, investigators or anonymous callers. These are just three of many common indicia of party-finding subpoenas.

productive, as when a subpoena is obviously benign (that is, clearly for informational purposes rather than possibly for claim expansion) and the information sought is objective and indisputable. Often, however, direct contact with counsel yields only the wily inquiry and foggy admissions which the deponent is trying to avoid, to boot now off the record and sans evidentiary protections. Better for the deponent or his or her employer, as the case may be, to contact their attorneys, show them the subpoena, and discuss with them the underlying circumstances and the propriety of intervention by counsel. In our experience, again, most subpoenas are indeed benign. But others can be perilous, it is hard to tell the difference, and making that determination is always best done with counsel. If the deponent delays analysis of the situation until after the deposition, the analysis may be more definite, but the admissions and damaging facts will already be established. Call Jon Stanley Heim at (510) 725-7593, or e-mail him at or

In the insurance industry, litigation is proliferate. Insurance producers are ensnared in civil actions much more often than most other businesspersons. In such a fraught climate, producers should approach each subpoena with caution and deliberation. Sometimes newly-served deponents are tempted to contact the subpoenaing counsel directly, in an effort to work everything out without spending money on lawyers. We at Harper & Heim, Lawyers generally discourage such direct contact. Sometimes it can prove


November/December 2017

Carve Out Your Niche: Get Your Arms Around the Pot of Gold By John Graham Even though they keep us healthy, primary care physicians get paid less than specialists who sit atop the medical totem pole. It’s the same story with attorneys, accountants, and others. In other words, generalists don’t seem to do so well. If we have problem, we want the best. We want an expert, a specialist. It’s the same with P&C insurance agencies and producers. Clients like to think they’re working with someone who gives them an edge, who knows more, and will do a better job. Yet, most insurance people don’t seem to get it. They do everything they can to promote their name and how much they give back to the community, but never get around to telling us why it’s in our best interest to do business with them. It’s been this way since the dawn of the agency system, when all it took to succeed was a telephone, a filing cabinet, a business card, and seen by everyone in town. Name recognition was reason enough to buy insurance from them. Since it isn’t that way today, they dash around like the squirrels of summer, grabbing every possible acorn and even stealing more from each other. If customers want to do business with an expert, why wouldn’t it be smart to get off the old track and follow a different path? Instead of being known for your name become known for what you know, your expertise. In other words, become a niche agency or a niche producer. Here is a short-list of possibilities: Workers’ Comp specialist Cyber Security specialist Small Business expert High-Value Home specialist Condo specialist Community Business specialist Non-Profit specialist

Municipality expert Professional Office specialist Construction specialist A [fill in the blank] expert All this came to mind when reading about a recent J.D. Power small commercial business study. It highlighted an 18-point decrease in customer service satisfaction in the fewer than five to 10 employee group, but a 13-point increase in those businesses with 11 to 50 employees. It’s doubtful that anyone in the insurance business will question these findings, since small BOPs don’t get much attention. Producers are more interested in spending time chasing after bigger acorns. Yes, there are those who will argue that online sales take business away from them. More likely, small, community-based businesses feel abandoned and don’t see value in working with a local agent, all because agents don’t pay much attention to them. If the acorn falls at their feet, they’ll do it. The small BOP is just one example. The issues are the same for just about every line.


November/December 2017

Yet, having a niche market changes the dynamics for an agency or a producer. Instead of chasing business or trying to get in the door for an appointment, a specialty gives prospects a reason for doing business with you and here is why: It separates you from the competition It gives prospects a reason to listen to you; you know something and are not just selling something It gives you the opportunity to review coverages, point out gaps, and offer recommendations

ABOUT THE AUTHOR John Graham is the co-owner of GrahamComm, a marketing services and sales consulting firm specializing in the insurance industry. The firm’s unique “Magnet Marketing” strategy is designed to attract and hold customers. His articles on marketing, sales and business trends can be found on his website, johnrgraham. com, and his free monthly eBulletin, “No Nonsense Marketing and Sales Ideas,” is also available there. Contact him at​

Simply put, a niche gives you what you need to be successful; it creates client confidence and trust, what every agent wants. On top of that, niches are a magnet. Start by writing a BOP and get business auto, homeowners, personal auto, umbrella, and second home, not to mention referral business. In other words, a niche sets you apart from your competitors. But, most importantly, it gives you something special to market that resonates with prospects. It also gives you the opportunity to get your arms around the pot of gold.



WHY INSURANCE COMPANIES ARE SHORTENING 12-MONTH POLICY TERMS I was asked last week why private passenger automobile insurers were cutting the terms of policies from 12 months to 6 months. Was the marketing hardening? Yes, the market is hardening was my CLEAR response, because it is. Why? There are several reasons. The state of world and USA economy; the investment assets held for sale or investment (CDO’s, CLO’s, MBS’s and other asset backed fixed income securities); consumers not buying insurance and lower limits of insurance, changing payment and buying patterns, etc.; companies preparing themselves for sale, including mergers and

acquisitions; companies preparing to take the business models direct to consumers bypassing the agents and brokers; product lines that are not performing well or profitably which affect the “core product lines”; companies operating in earthquake and hurricane prone environments; and general instability and financial mayhem that plagues all financial markets today. Let’s look at these closely. The USA economy and the world/global economy are in the one of the strongest bull markets since both the Great Recession and the Great Depression. Many assets today are worth multiples of what they were in 8.2008. Real estate, banks, insurance companies, S&L’s and reinsurance companies all have assets on their balance sheets they must “mark to market” (Warren Buffet calls this “mark to myth” and it is true; there is no way to value this stuff) under GAAP, SAP and SEC


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rules. But these assets are doing well. Unemployment is hovering at 5%. But there is a sense among investors like me that a recession could occur at any moment. Investment in equipment, technology is not near the levels of 2008, but it is rising. As part of this insurance companies have experienced the appreciation of fixed and equity income assets. Under SAP (statutory accounting principles) these assets must be marked down unless the reason for any impairment is only temporary. (I don’t see temporary in today’s markets ANYWHERE.) Many CDO’s, CLO’s and MBS’s can be valued properly now. Equity investments have my 100% support as I like many of you have investments in these banks, large and small. This brings me to consumption. In 4.2008 we took the consumers “ATM” away from him: his home. The consumer can no longer borrow against it unless his FICO score is 750 or greater using 2nd mortgages, 3rd mortgages (who the hell takes this many out?) or HELOC’s (home equity lines of credit). Fred Sands a former famous LA realtor (he sold out 10 years ago) was asked a question at a seminar last year in Palm Springs, CA: “Fred why are we in such a deep recession?” Fred’s answer: “You have kids straight out of college buying $2M homes, with incomes of $100K@year! You cannot afford a $2M house on $100K@year!” Option ARM’s, “liars loans”, negative amortization ARM’s with interest only components and other “new” underwriting mechanisms are the real culprit, in concert with Wall Street converting these mortgages into securities with an insurance policy, and then turning them into so-called AAA rated bonds, packaging them up and then selling them to insurance companies, reinsurance companies, banks, S&L’s, Fannie Mae, Freddie Mac and other financial intermediaries like Countrywide (now part of Bank of America) or brokerage firms like Merrill Lynch (also part of Bank of America now). These firms bought trillions of this stuff, WORLDWIDE. Hence the issues with banks and insurers and reinsurers outside of the USA. You cannot turn a junk bond into a AAA security with just an insurance policy wrapping and saying they will pay if the underlying debtor does not. AIG wrote $440B of this stuff and forgot to tell investors (like me and you) they did it! There are 2 million USA homes in foreclosure as of 2.2009. There

were 8 USA million homes who have negative equity as of 2.2009. There were 4 million homes that were sold to people who could not afford them, and are destined to foreclosure. Folks when we cleaned up this mess and cycle this out of the system, THEN we get recovery and banks are lending again, although more conservatively. Consumers are buying more insurance today and with lower deductibles, higher limits and many more “bells and whistles”. Insurance carriers who have modest balance sheets are raising rates and now are looking for merger partners. It is ironic to be looking for buyers in the worst recession since 1929’s depression. There many people with cash right (like me) now buying large deals You will see more mergers and acquisitions of insurers in the next 10 years than at any time in history, assuming money and credit flows again. And it will flow again. Many of you know in 2015 GEICO displaced ALL (Allstate) as the USA’s 2nd largest PPA (private passenger auto) insurer. I suspect in the next 7-14 years GEICO will also displace State Farm as the #1. GEICO’s expense structure is 13%-15% depending on where we are in the market cycles. Also GEICO spends almost $3B@ year on advertising alone. LET ME REPEAT THAT: $3 Billion@YEAR ON ADVERTISING ALONE. No one even comes close to that. NO ONE. Folks direct marketing of PPA insurance is growing faster and more aggressively EVERY day. GEICO has expense structures of 13%-15%. PGR’s (Progessive’s) is 19% (and that is good). TRV’s (Travelers) is around 21%. It is hard to beat GEICO’s price advantage. But you can beat them with personalized service. Companies that operate in catastrophic prone markets (earthquake and hurricane) have suffered greatly over the past decade. When you blow holes in balance sheets from losses like Katrina, Wilma and Rita, guess what? You have to raise prices. And that hardens markets. Admittedly the USA has not suffered any real cat hits since 2004-2005. But that is no solace. What happens if an 8 thrust fault hits downtown LA? Can you count that high? I cannot. Hardening of the markets are seen now as a result of cleaning up global financial crisis. Potential future in-


flation is a variable. Interest rates are and will continue to RISE. Negative USA GDP is an issue. The main reason debt rises is NOT financial company bailouts (READ THIS CAREFULLY SENATORS ELIZABETH WARREN, BERNARD SANDERS, ELIJIAH CUMMINGS, JOHN LEWIS, CHARLES SCHUMER, RICHARD DURBIN, PATRICK LEAHY, KAMALA HARRIS AND DIANE FEINSTEIN, YOU MORONS). It is falling tax revenues. Aggressive counter-cyclical fiscal policy also plays a big role. The good news: USA is STILL able to borrow at LOW rates. But for how long? The bad news: In the past financial crisis were contained to country or region specific. In today’s case it is global, where all markets are suffering, not just China, Europe or emerging worlds. Far too long we have estimated growth and incomes to be absurdly high and wonderful. Now we are paying price. President Trump and his team mean to mitigate these issues. Let’s hope Democrats will HELP them and not stand in their way

ABOUT THE AUTHOR Stephen Samuel Santoro is a former senior executive officer from two Fortune 200 Insurance Holding Companies. Both firms were/are traded on the NYSE. Stephen’s background focused on reinsurance in both USA and tax haven venues. He has worked in the insurance business and related businesses since 1981. Stephen also has owned controlling interests in 3 managing general agencies in CA and GA. You can contact him at 310.305.0459 (direct), 801.835.3369 (Whatsapp), (email), Stephen S. Santoro (Twitter), and Stephen Samuel Santoro (Facebook, Snapchat, Linked In).​

I hope this gives you more insight as what you can expect in the 2017-2018 insurance and reinsurance markets.

You decide folks! Thank you to Jon Spaugy and the Board of BIG for allowing my viewpoints. I’ll be back next time!


November/December 2017

DOES SOCIAL MEDIA SPELL THE END OF THE SOCIAL GRACES? The ‘social graces’ are becoming a thing of the past as users tweet and post opinions and information in the virtual world that they would not likely share in their immediate social circles. Professor Leslie Shore offers these 5 reminders for avoiding poor social media etiquette pitfalls: 1. Don’t respond to a post or comment out of emotion. Take time to process what you have read or seen and allow yourself time to reflect on your thoughts before commenting out of anger or frustration. Remember that everyone is entitled to their own opinions. 2. Remember who your ‘friends’ are. Before sharing your thoughts on politics or religion, or posting something provocative or controversial, keep in mind who your audience is. Is it worth creating tension with your family, friends, coworkers, etc.? 3. Keep your personal conversations personal. There is no need to take your private life public. Tweeting your boyfriend you love him or telling your sister how angry you are on Facebook will only open up dialogue to those who have no need for involvement.

“Social media is fast becoming an alarmingly anti-social method of communication,” Communication Expert and Author, Professor Leslie Shore. ABOUT THE AUTHOR Leslie is the owner of Listen to Succeed, a consultancy that focuses on using listening analytics to help clients achieve their highest level of effective communication. Her book Listen to Succeed is used in universities, businesses, and non-profits throughout the United States and Canada. Learn more at​

4. Stay truly connected to those who matter. Don’t wish your family a happy birthday on Facebook; pick up the phone or make the trip to see them. Instead of sending invites, thank you’s, and holiday cards online, send your loved ones something they can keep forever. 5. Don’t brag. No one likes a bragasaurus in person, so why would they ‘like’ one on social media. It’s fine to tell folks what you’re doing and share good news, but if it turns into a brag-fest, you will be un-liked, un-linked, and un-followed!


November/December 2017


Make the Most of Your Minutes: 15 Quick Tips to Help Stressed-Out Professionals Better Manage Their Time ​By Jackie Gaines

how to handle your hot minutes, you can work with the clock instead of against it. Make the most of your time and achieve a healthier and happier work-life balance with these tips: Prioritize sleep so you can function when you’re awake. If you do nothing else, prioritize your sleep needs. You will be more productive and feel more ambitious when you get the rest your body requires. Schedule sleep like any other daily activity on your todo list. Pencil in a stopping point in your day and stick to it without fail. Then wind down with a book or another relaxing bedtime ritual to help you drift off to sleep. Establish what the “workday” means to you and your boss. It’s common for employers to call or e-mail you after hours, but it is up to you to decide whether or not you’re available after hours. If you choose to be off-duty on nights and weekends, that is your choice (and your right!). Just make sure you respectfully address your “workday” limits to your boss upfront, so everyone is clear on the boundaries.

Ask any working professional what they could use more of, and you’ll probably keep getting the same answer. Time. In the frantic pace of the digital age, time is something everyone seems to be short on now. (It’s almost laughable that we once thought technology would help create more leisure time!) But if workers could figure out how to make the most of their waking moments, they could be far more productive and happy regardless of their time constraints. Success at work and in life often comes down to one thing: developing better time management skills. Our minutes have become hot since time is so scarce these days, and we toss them away without a second thought. The truth is, we are always going to have obligations, deadlines, and responsibilities, but if you learn

Don’t stay on your e-mail all day. Constantly checking your inbox is distracting and slows you down. Designate a few times in your workday to check e-mail so that you remain in control of your schedule and aren’t being reactive to new messages as they appear.


November/December 2017

Choose human connection over technology. Though technology has improved our lives, it comes with its own set of problems. E-mails and texts are convenient, but they create room for confusion and miscommunication. Whenever possible, talk in person in order to get your message across clearly. Learn to say no and mean it. It’s okay to turn down invitations, cancel plans, or disconnect from the outside world every now and then. Saying no is a skill that will benefit you throughout life, so allow yourself to politely start bowing out of unnecessary commitments right now. Set achievable goals each day. Even the most thoughtfully constructed to-do list will be useless if it is too ambitious. What’s the point of writing down unachievable tasks? We’re not superheroes and shouldn’t try to be. Make your daily goals small enough that you can actually get them done. Remember that you can always do more if you have the time. Give multi-tasking the ax. It is ineffective and counterproductive. People work best when they give focused attention to the task at hand, so aim to work on only one project at a time and give yourself permission to forget about other priorities until you are done.

versation, and you often lose important info as a result. When you are talking with a coworker, manager, or anyone else, be sure that you turn off that pesky inner monologue and focus when it is the other person’s turn to speak. Don’t be a sheep. While maintaining the status quo is often a good thing (especially at work), there may come a time when it is advisable to stop following the herd and innovate in the name of productivity. If you can envision a way to work smarter and better, you may just create new best practices for your place of work that will save time and increase quality. Stop shuffling papers. Most of us waste a lot of time shuffling papers from one pile to another. Chances are that your desk is full of paper you don’t know what to do with. To stop this maddening cycle by touching each sheet of paper just once and figure out the appropriate action. Either put it in a to-do pile so you can deal with it immediately, a file (for documents you must keep), or the trash. This keeps the papers moving and keeps you sane! Step away from the Internet. Surfing the web is a huge time waster for most people. An innocent little break often turns into an hour (or more) of wasted time that you can’t get back—especially when you should be working or headed to bed to get some rest. Shut off access to the Internet at a certain time each day to avoid getting lost in cyberspace. Have some fun along the way. It’s important to remember that stressed-out people aren’t all that productive. You have to relax and schedule “recharge time” into your life to avoid burnout—especially if you have an intense work environment. Be sure to build in time for fun on the weekends and on some evenings but try to make work fun, too. If appropriate at your office, find ways to infuse a little lighthearted play into your workday.

Listen up! Active listening consists of being present and engaged when communicating with another person, but it’s not as easy as it sounds. It’s very common to forget to listen after you speak your thoughts in a con-

Practice breathing and mindfulness. Imagine how productive you could be if you could focus, calm all anxious thoughts, and truly be present. You can find out by practicing mindfulness. Breathing is a tool for achieving


a relaxed, clear state of mind. There are multiple methods for achieving this state, including tai chi, meditation, yoga, or simple breathing exercises. Find one that resonates for you and practice it daily.

goals in a timely manner. While you won’t ever succeed long-term by racing the clock, you can drop your bad habits, improve ineffective practices, and kick stress to the curb so that your whole life improves.

Stop owning other people’s stuff. How often do you hear yourself saying, “Never mind, I’ll do it myself”? Probably more often than you’d like, and this habit takes up your precious minutes in no time. The solution is to hold others accountable for their responsibilities. This includes your children, your spouse, and your colleagues. Let “never mind...” be the exception instead of the rule.


Let go and delegate. Learn to know when to let someone else handle a task. It can be hard to relinquish control, but it is also necessary to delegate, especially if you’re in a leadership position. Remember that delegating is not admitting you can’t handle your responsibilities—not at all. Rather, it’s about maximizing the potential of your entire workforce.

Jackie Gaines is a high-performing senior executive with a progressive career encompassing more than 38 years of sustained leadership and accomplishments with major health systems and organizations. With passion, creative energy, and vision, she motivates diverse groups of people toward success. She has dedicated most of her career to the advancement of quality healthcare programs throughout the United States, particularly those focused on the care of the poor and underserved.

Remember that you have two choices when trying to manage your time. You can either let your priorities and obligations run your life, or you can take charge of your minutes and let them work for you to achieve your


November/December 2017

TIME TRAVELING STEALS THE SHOW AT THE BIG HOLIDAY PARTY The holiday season got off to a BIG start at the Ontario Doubletree as insurance professionals from across the region gathered to celebrate and connect with friends and colleagues. As usual, BIG’s resident emcee Adam Meyerson kept everybody entertained as he led the crowd into a “Jingle Bells” sing along complete with a “car keys” jingle-off to create a festive mood. But the time traveling began as people began arriving at the party. Decked out in their finest Elizabethan dress, the Upland High School Choir entertained everybody with 16th century Christmas carols as they walked through the entrance. Later, everyone was treated to a concert by these talented teens and were set for an enchanting evening. The entertainment was thanks to Citibest Insurance, who also donated several raffle prizes.

The show progressed to the early 30’s as Adam and Jon Spaugy performed an impromptu vaudeville act while distributing. “Jonny the Elf” made an appearance and was highlighted several times. Matt Speed also lent a hand for the raffle prize distribution. The final time stop was the 1980’s as the “Flux Capacitors” made a return engagement from the convention party last May. After a tease with “Back on Time,” the band got the crowd swaying with “Last Christmas” and “Jonny the Elf” got everyone on the dance floor as the 80’s anthem “Don’t You Forget About Me” (including the raised fist) let people know where (when?) they were. And that was good.


November/December 2017

New Year’s Fun Facts

S​ ince different cultures use different calendars, the “New Year” can start at different times. However, most of the world (including the United States) uses the Gregorian calendar, introduced by Pope Gregory in 1582. So January 1st is the first day of the New Year in the majority of countries. Ringing in the New Year is a global phenomenon with interesting local traditions. While we are all aware of the countdown and ball-drop in Times Square, there are others – known and obscure – that merit repeating. Speaking of the Times Square celebration, did you know that the tradition first began in 1907 and the original ball was made of iron and wood? The current ball is made of Waterford Crystal, weighs 1,070 pounds, and is six feet in diameter.

“forget-the-year parties” are held to bid farewell to the problems and concerns of the past year and prepare for a new beginning. The Scots observe Hogmanay (hog-mah-NAY), a rousing Scottish New Year’s celebration. One of the traditions is “first-footing.” Shortly after midnight on New Year’s Eve, neighbors pay visits to each other and impart New Year’s wishes. Traditionally, “first foots” used to bring along a gift of coal for the fire, or shortbread. It is considered especially lucky if a tall, dark, and handsome man is the first to enter your house after the New Year is rung in. Thanks to Fact Monster ( for the interesting facts.​

A traditional southern New Year’s dish is Hoppin’ John—black eyed peas and ham hocks. An old saying goes, “Eat peas on New Year’s day to have plenty of everything the rest of the year.” Noisemaking and fireworks on New Year’s eve is believed to have originated in ancient times, when noise and fire were thought to dispel evil spirits and bring good luck. In Greece, New Year’s Day is also the Festival of St. Basil, one of the founders of the Greek Orthodox Church. One of the traditional foods served is Vassilopitta, or St Basil’s cake. A silver or gold coin is baked inside the cake. Whoever finds the coin in their piece of cake will be especially lucky during the coming year. The Spanish ritual on New Year’s Eve is to eat twelve grapes at midnight. The tradition is meant to secure twelve happy months in the coming year. The New Year is an important holiday in Japan, and is a symbol of renewal. In December, various Bonenkai or


November/December 2017