GMA June 2019 by VIAA

GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | JUNE 2019

Vermont Insurance Agents Association is a statewide trade association representing nearly 100 independent insurance agencies in Vermont, with more than 900 employees. VIAA member independent insurance agents represent more than one insurance company, and as a result, can offer clients a wider choice of auto, home, business, life and employee benefits.

Seasons May Change, But Our Commitment to the Independent Agent Channel Remains the Same...

ermont Mutual is proud to have served Vermont and the New England market through the longstanding partnership with our Independent Agents. It remains our privilege to work with the finest Independent Agencies in the industry … the only place you can buy a Vermont Mutual policy.

89 State Street, P.O. Box 188, Montpelier, VT 05601 | 800.451.5000 | VermontMutual.com 02

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Vermont Mutual is proud to sponsor the Vermont Insurance Agents Association’s new Education Center in Williston, Vermont.

Green Mountain Agent is a publication of

CONTENT JUNE 2019

04 600 Blair Park Road Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org VIAA Officers President Paul Plunkett, CIC Vice President Alan Kinney Secretary/Treasurer Dan Rodliff National Director Ron Bixby

Directors Chip Ams

Letter from the President

06 Young Agents News Brief

10, 16, 18 Features: Knowledge

20, 24, 28 Features: Sales & Marketing

30 E & O Corner

33 Insurance Commentary

Michael Barrett

Erin Odell, CIC

Company & Agency News

Staff Executive Director Mary Eversole mary@viaa.org

GMA Publication Design LONDONmiddlebury londonmiddlebury.com

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LETTER FROM THE PRESIDENT JUNE 2019

Ahh summer is just around the corner! Time for graduations, weddings, and vacations. The season of sun and fun! It’s been a busy spring at VIAA with our advocacy efforts in the legislature to protect our industry. We are proud of the work we did to defeat H.1 that would have banned non-compete agreements in Vermont. Additionally, we advocated effectively against S.37, Strict Liability and Medical Monitoring. At the end of this session, the bill was passed to include only medical monitoring for exposure to toxic substances. We believe the Governor will veto the bill for the second year in a row. On the federal level, we sent a group to the Big I Legislative Conference in Washington, DC last month. The Young Agents distinguished themselves as emerging leaders and led successful visits with our congressional delegation. As you recall, the Big “I” won a significant victory for us when tax reform was implemented. We are asking principals to participate in a brief survey on how this triumph benefited agencies across the country. We are working on our annual fall event known as EVOLVE2019 and registration will open later this month. This event is new and different than anything we have ever done! Get ready. You do not want to miss it. Over the summer, we will be putting the finishing touches on a new, exclusive market access program for crop insurance for our members and other Big “I” states. This is a truly exciting partnership and demonstrates yet another example of VIAA bringing valuable products and services to our members. It also provides a new revenue source to sustain our association financially. Be sure to check our website for the latest information on this market offering. You will be surprised as to what crops are eligible for this product!

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Paul E. Plunkett, CIC VIAA President

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YOUNG AGENTS

NEWS BRIEF

YACS LEAD ADVOCACY EFFORTS ON CAPITOL HILL

A team of VIAA YACS met with Vermont’s Congressional Delegation last month in Washington D.C: Senator Leahy’s Staff and Representative Peter Welch. The team included Katie Andrews (The Richards Group), Chris Hull (S&H Underwriters), Forrest Oberst (Liberty Mutual). They were joined by VIAA Board Members, Ron Bixby, National Director and Dan Rodliff (NFP), along with VIAA Executive Director Mary Eversole.

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YOUNG AGENTS

NEWS BRIEF

The YACS distinguished themselves with their preparation and presentations to the Congressional Delegation. They also took sometime to give back. The Green Mountain Boys represented the state well in the YACS Gives Back Corn Hole Tournament.

WE WOULD LIKE TO THANK VIAA COMPANY PARNTERS FOR THEIR ON-GOING SUPPORT OF THE YACS. WE EXTEND A SPECIAL THANK YOU TO THE FOLLOWING YAC SCHOLARSHIP FUND DONORS. OUR TRIP WOULD NOT HAVE BEEN POSSIBLE WITHOUT THEIR FUNDING. LEADERSHIP PARTNER

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KNOWLEDGE

EXPRESS YOURSELF: THE HUMAN WAY TO MARKET YOUR AGENCY By Will Jones In 2015, Renado Robinson quit his job with Travelers to start his own independent agency in Fort Mill, South Carolina. Robinson had started his Travelers career in 1997 as the mailman. When he went off on his own, he didn’t have an agency license or any appointments with carriers, and his main marketing strategy was cold calling. Early on, Robinson remembers meeting a prospect at their door. They told him they weren’t interested. Two months later, “I went back with a dozen donuts and said, ‘I’m just trying to sweeten you guys up a little bit,’” he recalls. “A month after that, they called me to write their homeowners.” Robinson ended up saving the couple 40% on their homeowners policy, then followed up with birthday cards later that year. “They called me into their office and said, ‘We’ve been with our current agent for over 10 years, and not once have we ever received a birthday card or any type of recognition,’” Robinson says. “They gave me a copy of their insurance policy booklet and asked me to write their business insurance. That turned into our second-largest commercial account in the office.” Today, Crosswinds Insurance Agency generates over $3.5 million in written premium and employs three full-time staff members. Building a business from the ground up is no easy feat, but if you ask Robinson—or any successful agency owner—about their biggest secret for marketing their business, one rule quickly rises to the top: Don’t talk about insurance. 10

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That means, when marketing your services, don’t talk about coverages, don’t talk about your agency’s carrier appointments and, most of all, don’t sell insurance. Instead, connect on a human level. Sell yourself, your story and your people. Talk about your values, your interests and your community. Here are a few pointers on humanizing your agency’s marketing to let your clients and prospects know you’re a person first, and an insurance professional second. Social Media In 2018, nearly half of agencies cited social media in their top three marketing activities, according to the 2018 Future One Agency Universe Study. But mindlessly posting about insurance products will do little to win you many likes, shares and engagements, let alone many customers. “Out of every 10 social media posts, two pertain to insurance—the rest give people a snapshot into my life,” Robinson explains. “Family and lifestyle posts get more engagement. Insurance is insurance, but people want to deal with people they can relate to.”

At his agency, Robinson embraces video marketing by recording short clips in his office and then sharing via Facebook and Instagram. “I have a green wall in my office with my company logo on it, and we do a lot of video in front of that,” he says. “It went from just posting photos and video on social media to people wanting to come in and have their photo taken in front of the green wall.” Robinson also films “60- to 90-second videos highlighting another local businesses,” he says. It’s a great way to engage with other professionals in his community: “They get access to my network and I get access to theirs.” Scott Greene, producer at Elliott Insurance in Springfield, Ohio, recently started marketing with video and found it to be “a huge hit,” he says. After appearing in a spoof video for a friend and local business owner, Greene enlisted the help of a local media agency to try it out. “It’s been great for us in more ways than just trying to sell, because people are really engaging with us,” Greene says. “We posted our last video on Instagram and Facebook, and now we’re making a YouTube channel. We’re all in with it.” And even if you don’t have a huge marketing budget to play with [see p. 40], a great way to grab your audience’s attention is through paid social media advertising. “We do a lot of Facebook boosts, as well as sponsored posts on Instagram,” Robinson says. On Facebook, “you can choose the audience you want to target. If we’re talking high-end homeowners, we’ll target people who are looking up luxury vehicles and houses or certain luxury gifts online, and include that in our characteristics and categories.” Video The most personal way to digitally market your agency is “video, video and video,” says Sydney Roe, digital content manager, TrustedChoice. com. “You want people to feel like they’re in your office, and the communication medium that most resembles that in-person experience is video. If you’re not building that deeper connection with your prospects, someone else will be.” “It’s all about being a human brand,” agrees Peter van Aartrijk, principal with Chromium and coauthor of “The Powers: Ten Factors for Building an Exponentially More Powerful Brand.” “People really enjoy video, especially short ones.”

The idea behind the decision is that “we live in an era where people aren’t doing business 9-5 anymore,” Greene explains. “People still want to do business with people they like. Video is a way we can be in front of people at 4 a.m.” While many agencies may lack technical inhouse video skills, van Aartrijk reminds agents that “it’s not about making a perfectly canned video that is overproduced, boring and long. It’s about making it fun and breathing a little personality into your business.” Website In 2018, nearly two-thirds of agencies cited maintaining and updating their website as one of their top marketing activities, according to the Agency Universe Study. As an independent agent, your website is your “most important office,” van Aartrijk says. “Paying attention to the personality you’re projecting on that site is critically important.” Crosswinds’ website was created by website builder Wix, but all the content is produced internally. When a web user first arrives on the website, they’re greeted with a pop-up chat window that says, “Let’s chat! I’m available to answer your questions.” W W W.V I A A .O R G

“It links to a Wix app on my phone and email, so when someone comments, I can respond either via the app or email,” Robinson explains. “It’s a great tool for when someone just has a quick question or needs a little more information about our agency.” Ultimately, your website should illustrate the value proposition of your agency and the heartbeat of your brand. Most important, “you have to show your people,” van Aartrijk says. “And I’m not just talking about the owner.” And just as it’s important to avoid complex jargon when meeting in person, the same logic applies to your website. “Don’t force your prospects to learn complicated insurance lingo—speak their language,” Roe says. “This will help with SEO, too, because search engine algorithms match a prospect’s search words and phrases to a website that has similar copy.” Charity As many as 87% of consumers will purchase a product because the company advocated for an issue they cared about, according to the 2017 Corporate Social Responsibility Study by Cone Communications. That means aligning your agency with local causes is a great way to connect with consumers beyond insurance. Crosswinds, for example, sponsors PTAs and sports teams at local schools. “We have a monthly e-newsletter, but we don’t include much about insurance,” says Emily McCoy, marketing and community relations coordinator at Davidson & Associates Insurance, an independent agency in Vancouver, Washington. “It’s more client-, community- and team member-focused.” Every issue of Davidson’s e-newsletter contains information about community events and local businesses, introduces or celebrates staff achievements and, most successfully, shares details about the agency’s referral partners program, which highlights a local nonprofit every month. “Each nonprofit is designated a month, and for every quote we give out as a result of a referral, we donate $25 to that nonprofit on behalf of the person who referred them to us,” McCoy says. “It’s all about creating touchpoints and connecting with our community throughout the year.” 12

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Events Another great way to show the human side of your agency is to take your agency’s brand to local events. Davidson does 10-15 events per year, the biggest of which is Give More 24— an annual day of giving in southwest Washington that raises money for local nonprofits. In 2018, the event raised $1.3 million in the course of 24 hours for 155 nonprofits. “We’re the presenting sponsor at that event, and our agency team also volunteers to help them raise money,” McCoy adds. When it comes to marketing at events, different agencies in different communities require different approaches. In Greene’s town, for example, “the county fair is a huge deal,” he says. Elliott Insurance sets up a booth every year and sponsors local kids’ 4-H projects. “We also do time checks over the speaker system saying that we are in one of the buildings, we’re giving something away and asking people to stop by,” Greene says. “It’s been successful just by getting our name in to the community.” Elliott Insurance also sponsors local little league teams, and the effect has spanned generations. “We had one new customer say, ‘I played for Elliott Insurance back in 1987,’” Greene says. “Some people think this stuff doesn’t stick with people, but it does.” But remember: Showing the human side of your agency only works if you are reaching your target audience. “The heart of marketing is consumer attention,” Roe says. “Instead of asking yourself, ‘What should I be doing?’ Ask yourself, ‘Where is my consumer’s attention?’” “In the old days, marketing was all about who could shout the loudest. But now you’ve got to meet people where they are,” van Aartrijk agrees. “In an industry that is all about taking risks, agents are often afraid to make a mistake by trying things.” What if you try something and it doesn’t work? Just because one idea fails doesn’t mean a different one will, too. “If you see that something isn’t working, try another avenue,” Robinson says. “Don’t give up—marketing plays an integral part in growing your agency.”” Will Jones is IA assistant editor.

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Access the members-only Big “I” Virtual University, at

Rea l Qu esti o n s , Rea l A nswers

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Live and On-Demand Education The Big “I” Virtual University oﬀers a wide range of live and on-demand education taught by leading insurance industry experts from across the country developed speciﬁcally for independent agents. All VU webinars include access to the live event and a link to the post-event on-demand recording, and our 90-minute deep dive sessions also include a transcript, a valuable and value-added reference tool.

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PROOF OF INSURANCE: DECLARATION PAGE OR BINDER? ByBig “I” Virtual Univeristy Faculty

KNOWLEDGE

As proof of insurance on a home equity loan, a bank is requesting the homeowners policy declaration page listing them as the second mortgagee and will not accept a binder. Q: Does the bank have the right to request a dec page listing them as mortgagee, or do they have to accept a binder? Response 1: A bank can demand whatever it wants if it is required by its mortgage documents. Response 2: If I was a bank, I wouldn’t accept a binder either. Binders only show coverage for a set number of days, whereas the dec page shows coverage for the entire policy year. If your customer is going to get the loan, you’ll need to comply with the bank’s request. Response 3: A bank can request any form of evidence of coverage they desire. Response 4: New York State law requires a mortgage lender to accept a binder at a home closing. You can download a copy of the law from the Big “I” New York. Response 5: The mortgagee has the right to receive a copy of the policy and dec page. They should also get the same information at every renewal. Carriers often send these items to mortgagees automatically. Midway through the policy, we also recommend sending evidence of insurance. Response 6: Check your state’s insurance and banking laws. Some states have statutes that require the bank to accept a binder as evidence of insurance. Response 7: When listing a mortgagee, the carrier should send the bank a copy of the policy automatically, as well as notifying them if the policy lapses. If the carrier has not sent them a copy, you are free to do so. I don’t recommend issuing binders for mortgagees. Instead, issue the ACORD Evidence of Property Insurance form. 16

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However, you only need to issue the Evidence of Property form if the policy has not yet been endorsed with a new mortgagee, or if it is a new policy. If the policy already exists with the mortgagee’s name on it, simply send the mortgagee a copy. Response 10: If a policy has been issued, the bank will typically not accept a binder. According to the Department of Financial Services for New York, “Insurance binders are the equivalent of temporary insurance until a formal policy is issued. Once a formal policy is issued, the binder is no longer in effect, and therefore it is the lender’s decision of whether or not to accept a binder as evidence of insurance.” If the homeowners policy is already in force, offer an ACORD 27 to evidence the coverage for the second mortgagee, pending revised declarations or an endorsement to add the lender as a second mortgagee. Considering many insurers can produce updated declarations within a few days, the ACORD 27 should satisfy the lender until you can provide the new declarations listing them. This question was originally submitted by an agent through the VU’s Ask an Expert Service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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The Certified Insurance Service Representative (CISR) designation program is a nationally recognized education program directed at a very particular job description in the agencyâ€”the customer service representative. CISR COURSES MAY BE TAKEN FOR CE CREDITS FOR THOSE NOT SEEKING THE DESIGNATION.

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RISKY BUSINESS: SMALL BUSINESS OWNERS NEED YOUR HELP

KNOWLEDGE

By Will Jones Only 64% of small business owners report that their insurance agent discussed risk management services with them, according to the 2019 Small Business Risk Report, a joint effort by Forbes Insights and The Hanover Insurance Group. That means approximately one-third of small businesses are not offered or made aware of important risk management services, some of which are included in their insurance policies. Meanwhile, more than half of small business owners believe they are likely to face a claim in the next five years—which means it’s safe to assume they’re open to having a conversation about implementing risk management procedures that could reduce that likelihood. The findings “represent a great opportunity for independent agents,” says Michael Keane, senior vice president, president of core commercial, The Hanover. “Discussing risk management services as a valueadd to their policy is a great way to help demonstrate the value of their insurance to business owners and is a great way to help insureds mitigate risk.” A majority 69% of small business owners report that multiple types of risk management services would be valuable to their businesses, according to the report. So why isn’t every insurance agent discussing these services with small business owners? “Traditionally, the insurance industry has not focused heavily on the communication of risk management services available to small business owners to mitigate risk,” explains Christina Villena, vice president of risk solutions, The Hanover. Yet, “it’s important for small business owners to understand there are preventative measures that can be taken up front to help prevent losses. Some business owners may mistakenly believe it is difficult, expensive and requires a lot of effort, but there are many risk management tactics that are 18

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fairly simple and straightforward and can be easily implemented.” For example, as many as 53% of small business owners believe employee safety training would be beneficial to reducing risks associated with employee injury, while 50% would value help with employee background checks to deal with employment practices-related risks. Additionally, 48% report that they need equipment theft prevention and recovery risk management strategies. “Small business owners rely heavily on their employees, their equipment and their business property,” Keane says. “Fortunately, these three areas also represent some of the easiest, more economical tactics where you can implement some good, sound risk management.” Additionally, “emerging trends such as cyber risk, reputational risk and liability trends are constantly changing,” Villena says. “Businesses are wise to understand these trends and work with independent agents to understand how they can impact their businesses, as well as how to protect against those risks.” These types of risks are applicable to every industry, and agents can utilize a wide range of resources to educate their clients on how to mitigate them. Most carriers have “tailored solutions for small business owners,” which agents can access via “seminars, on-site consultation, webinars and online offerings,” Villena notes. “Trade associations are another resource that offer risk management information.” Focusing on risk management enables agents to provide valuable counsel to help small business owners protect themselves. “Risk management really should be a part of the initial proposal for new clients and part of the conversation at renewal, as well,” Keane says. “This

reinforces the value of the services that the independent agent can deliver to small businesses.” While “having the proper insurance coverages and then understanding them is certainly important, it will not prevent losses,” Keane says. “We see the most successful independent agents working with leading carriers that have risk management experts, along with partnerships with third parties for value-add benefits, to provide small business owners access to comprehensive risk management services.” Will Jones is IA assistant editor.

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SALES & MARKETING

3 REASONS WHY RELYING ON REFERRALS IS THE KISS OF DEATH By Cam Bob III In Italian, il bacio della morte means “the kiss of death”—a sign given by a mafia boss to signify that a member of the crime family has been marked for death. In insurance, the mark of death is a little different. Like a kiss, an insurance referral seems benevolent. The problem isn’t the referral itself—it’s when an agent says, “We don’t do much online marketing. We get all our business from word of mouth and referrals.” If I had a dollar for every time I’ve heard an agency owner say that, I’d be writing this while nestled inside a hammock on my remote private island. I get it—referrals are the lifeblood of the insurance industry. The fact that you get so many insurance referrals means you’re good at what you do. It means people know and trust you. So how could I sit here in good faith and say it’s bad for a business to rely on referrals? One word: control. Taking your foot off the gas and relying on referrals means giving up your control. Depending on your clients to spread the word about your business puts control of your lead generation in someone else’s hands. What glitters isn’t always gold, and what’s free is not always what’s optimal. If you rely solely on referrals, here are three things you’re missing out on: 1) Precision. Referrals are powerful. But precision beats power, and referrals are not precise. Referrals aren’t necessarily referring the business you want. Sure, referrals grow your book, but do they grow it in the way you want to grow? If you purchased 50 targeted home insurance leads and later found 27 auto insurance leads in your inbox, you would be upset. When you rely on the luck of the draw, this is the reality you face.

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2) Consistency. With referrals, you’re not only dependent upon what comes through the door, but also at the mercy of frequency—or lack thereof. Every time you get a referral, you’re drawing from the well of your agency’s longstanding goodwill with your customers. But eventually, this well of goodwill will run dry. Some days you’ll get a referral, but some days you won’t. For your business to thrive, you need new inquiries every day. 3) Scalability. Out of all the reasons against relying on referrals, this is the most damaging to your potential. You can hire more sales reps, double your advertising budget or buy more leads, and within a month, your pipeline will start to feel the effects. But you can’t turn up the dial on referrals. When it’s time to grow aggressively and you’re relying on referrals, you’re stuck in first gear while the agency down the street kicks it up a notch. Insurance is in an interesting place right now. It seems like there’s a new breakthrough at an InsurTech startup or the incumbent corporate titans every day. It’s almost like the space race. Take back control over your sales funnel. In this mad dash to digitalize the industry, I know with 100% certainty that relying on referrals is the kiss of death for your business. Cam Bob III is founder of Infinity Leads, a customer acquisition agency for independent insurance agencies. In 2018, Bob III was named Young Innovator of the Year by British private equity firm CVC Capital in the development of a cutting-edge digital lead generation system for insurance agencies. Bob III is also the author of “The Digital Insurance Agent,” a step-by-step guide to generating exclusive leads online.

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SALES & MARKETING

HOW TO STRETCH YOUR MARKETING BUDGET By Jacquelyn Connelly Only 64% of small business owners report It’s easy to not spend money on marketing. Between keeping the lights on at the office, making sure your agency technology is up to date and compensating your people for a job well done, plenty of deserving areas demand financial attention in a more obvious way. As an agency owner, “you have all these set, fixed prices, and marketing is usually not fixed,” says Robyn Sharp, owner of Sharp Family Insurance and founder of Mega Agency Marketing, a marketing firm that specializes in helping agents use online marketing to grow their agencies. When things get tight, “it’s easy to scrap your marketing budget and say, ‘We don’t have to pay that. We have to pay for all these other things just to stay in business,’” Sharp points out. “But then you end up cutting off your lead sources, and your income goes down. It’s a trap long-term.” Paul Kurnit, clinical professor of marketing at Pace University and CEO of PS Insights, a marketing communications consultancy firm, believes that “in a sales-oriented environment, marketing often gets a bad rap—it’s seen as an expense rather than an investment. But if independents don’t develop a plan, they’re operating rudderless.” Creating a marketing budget—and sticking to it—gives you “a framework to begin from,” Sharp says. “You know this money is available, and you’re investing in your business on a regular basis.” “Given the limited resources at an independent agency today, an agency needs to be very tactical about how they’re spending money for marketing,” says Tim Cunningham, managing director of OPTIS Partners, a mergers & acquisitions consulting firm. “The marketing budget should be reflective of the strategic and business plan. If you don’t know where you’re going, when you get there, you’ll be lost.”

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The Magic Number In 2017, the average agency marketing budget totaled $16,400 per year, according to the 2018 Future One Agency Universe Study. Proportionally, that’s about 19% of the average independent insurance agency’s expenditures—up from 13% in 2015. How does that translate in terms of revenue? Cunningham says agencies should be spending about 2% of revenue on advertising and promotion. Peter van Aartrijk, principal with Chromium and co-author of “The Powers: Ten Factors for Building an Exponentially More Powerful Brand,” agrees, citing data from the Best Practices Study. But few agencies, van Aartrijk believes, are currently “spending at the right level.” “Best Practices agencies are spending 2-3% on a consistent annual basis, and that’s just to maintain business,” van Aartrijk points out. “If you’re getting involved in a merger or you’re expanding your geographical footprint or you’re rolling out a new product line and you really want to get stronger in a certain niche, then you want to be spending more than that.” Kurnit actually places the number much higher, in the 5-10% range. But pinning down a precise percentage of revenue to spend on marketing is “impossible,” he says, because “it depends on the size of the business, the type of business and the trajectory of the business, and it depends on the marketing plan. If the plan feels good, then you retro-fit the budget that feels comfortable.” Not comfortable “like an old pair of shoes,” by the way—“comfortable like a really nice-looking new pair of shoes,” Kurnit jokes. “For people who are not used to marketing, there’s going to be a level of discomfort, and that’s OK. You set goals, but there is no guarantee that you’re going to achieve what you set out to achieve until you take the leap.”

Helen Collins hcollins@viaa.org

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Carrier Support In 2017, an average of 10% of agency marketing budgets came from carrier support programs, according to the Agency Universe Study. But 54% of all agencies say they received no marketing budget support from carrier programs—and 69% of small agencies, which would stand to benefit the most, reported the same. Considering many agencies “can’t afford the time or resources for a full-time marketing person,” says Jennifer Jennings, vice president, marketing and training, Grange Insurance, “if we can help them with robust campaign materials, in addition to some financial support, they have the building blocks of what they need.” Grange offers independent agents marketing benefits packages ranging from $2,500 for new agents all the way up to $50,000 for “our best agency partners,” Jennings says, noting that agencies qualify based on a variety of criteria, including direct written premium, growth factors and loss ratio. Benefits are provided on a shared basis, where agencies pay for their expense up front, and Grange reimburses the agency up to 50%. Agencies can put their funds toward everything from prospecting tools to digital marketing support, agency and design fees, donations, and sponsorships. Dollars may not be available to all agencies, but marketing support from Grange also includes resources like social media plans, campaign templates, lead-generation programs, access to vendor partners for assistance with website buildout and maintenance, and ready-made collateral, such as promotional calendars. “The benefits aren’t just financial,” Jennings explains. “They’re resources available at their fingertips so that our agent partners can work on their businesses.” Cindy Heismeyer, vice president, director of marketing at Selective, agrees. While Selective typically does not offer monetary aid, it customizes marketing support for each agency. “One agency might be focused on retention, another on brand awareness and another on a specialty niche market,” she explains. “We work directly with them to best understand their goals, and then hone in on that.” 26

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Agents may take advantage of Selective’s Distributed Marketing Platform, for example, to enhance and track proactive communication efforts with clients. “Agents can use it directly, where we create materials that they can send out on their own, and we also will do it on their behalf,” Heismeyer explains. All of Selective’s marketing programs involve a consultative component “to help agents with execution,” adds Bob Redden, vice president, agency development and insurance learning services, Selective. “We have programs to help an agency shape their overall business strategy, core values, mission statement—whatever helps them build that foundation so they can then layer the marketing support on top.” Safeco Insurance, too, helps agencies understand “what their fastest-growing peers are doing, then provides training, tools and resources to help them implement those highgrowth tactics,” explains Dale Steinke, director, independent agent marketing programs. Steinke cites top-used offerings like access to website vendors, retention-focused tools like welcome kits, and Safeco’s Search Score® tool, which assesses how easy it is for

an agency to be found online and whether its website meets customer expectations. Safeco’s four-week Marketer Development Program is also popular. “It teaches dedicated agency marketers everything they need to know to market their insurance agency,” Steinke says. “It’s not just classroom time where you’re being told a bunch of things— you’re actually building out the deliverables of a marketing plan.” Safeco offers loans for agencies to hire dedicated marketers, with the possibility of loan forgiveness, as well as discounts for marketing support programs through its rewards and recognition program. “Our marketing resources help independent agents grow their entire business—not just their Safeco or Liberty Mutual books,” Steinke explains. Maximizing Your Dollars How should you decide which marketing activities [see p. 36] to prioritize when planning your budget? Kurnit says it all starts with defining your goals: “Everything goes back to asking yourself, where’s my business today? Where was my business yesterday, and where do I want my business to be tomor-

row?” “There’s going to be a difference depending on the stage your agency’s at,” Sharp agrees. “For a startup or a small agency, you’re really looking at bringing in leads. You need something that’s going to bring money in the door.” By contrast, a longstanding agency with a large client base, plenty of renewals and a strong foundation to work from “can afford to put a little more money into being stronger in their community and building that long-term brand,” Sharp suggests. One important piece of advice: Save your money for the activities you can track. That means Facebook ads might be a smarter investment than a year’s worth of billboard space. “If you want to get the most from your marketing budget, you really need to have accountability,” Sharp says. “You want to be able to say, ‘I spent this much, and on average, I’m getting this many leads, which turn into this many quotes.’” When you’re a small agency especially, every dollar counts.” Then, if you discover something’s not working, “you can dump it and move on to something else,” Sharp adds. “Budgets can move—they should be flexible,” Kurnit agrees. “Too often, the budget is derived from what last year’s budget was, and you should never do that. That fulfills the prophecy that what you did last year is what you’re going to do next year, and it doesn’t take into account a changing marketplace.” Instead, start from what Kurnit calls “informed scratch.” “History is real, and you should certainly reference the lessons learned from previous years,” he explains. “But then you have to move from that situation analysis to the objectives for the business in the coming year. What do you want to achieve?” Heismeyer gives agencies the same advice she says Selective follows in its own marketing efforts: “Have a strategy, know what you’re trying to accomplish, leverage the tools that are available from partners like us, and be able to change direction if needed— test and go and test and go. When you find what’s right, it’s a matter of scalability and making the best even bigger.” Jacquelyn Connelly is IA senior editor.

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SALES & MARKETING

HOW ONE AGENCY USES VIDEO TO ENHANCE ITS BRAND By Jonathan Tease If you tune in to independent agent Woody Brown’s daily vlog, one of the first videos you’ll find features him taking down his Christmas lights. That’s it. He’s not reviewing policies or offerings strategies for reducing risk. It’s just a guy living his life. In January 2017, Brown challenged himself to share a video every day—the genesis of “Woody 365.” Moments before taking the stage at the Independent Insurance Agents of Georgia’s Fall Insurance Expo, a video titled “Who is Woody Brown?” showed clips of Brown doing everything from singing on stage to walking on the beach with his family. “Lots of agents opt into their carriers’ auto social media posts but aren’t getting engagement because people don’t care about insurance,” Brown said during his presentation. “If you ask me what I do, I’d say that I am an agent at the best agency on the planet, but how does that make me different? Aren’t there a million agents?” “Ultimately,” says Brown, partner at The Rhoads Group, an independent agency in Cumming, Georgia, “it’s your story that separates you from anyone that’s doing exactly what you’re doing.” Brown isn’t the only person in his agency who’s adopted this philosophy toward branding. Clayton Rhoads, founder & CEO, is also behind the push to be more authentic. Rhoads produces a show called “The Grind” that gives local athletes a platform to share how they’re developing their skills while still excelling in the classroom. In addition to the direct benefits of getting his brand out there, this endeavor helps Rhoads establish relationships with people in the community. Rhoads encourages his team to build a brand

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centered on their passions and to share their authentic selves. “I believe you are going to build the best relationships with people who share the same interests as you,” he says. “Why hide those things?” Launching straight into vlogging may be intimidating for those who are uncomfortable with the technical aspects of filming, editing and publishing content. Instead, Rhoads suggests starting small, then scaling up to larger production videos. “Most people don’t recognize the power of one-to-one video messaging,” Rhoads says. “We can film something on our phone and send it directly to someone, saying ‘Thank you for your renewal.’ That’s video marketing.” As with any endeavor, principals want to know what kind of return they can expect from their efforts. Because advertising platforms sometimes overlap, it’s not always easy to determine what influences prospects to make a decision. But if you are aggressively promoting yourself, various marketing channels can work in harmony. “You’ve got to be in the community before you can supplement it with all this other stuff,” Rhoads says. “Then your clients will start saying things like, ‘I met this guy at an event, then saw his billboard, a few weeks later I saw his ad in the paper, and he does this show on Facebook.’ When you ask how they found you, they’ll probably say the last piece of content they saw. But in essence, it took a combination of things to build the trust over time.” Rhoads acknowledges that he’s not tracking return on investment down to the penny. “I believe in it so strongly that I don’t worry about the analytics as much,” he explains. “I’m meeting principals and community leaders. Sometime down the road, I’m sure an opportunity will come up where I can write a policy due to those relationships I’ve formed.” Jonathan Tease is communications coordinator at the Independent Insurance Agents of Georgia, Inc.

THE MEETING SPACE YOUâ€™VE BEEN LOOKING FOR

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O &

ER N R O C

PREMIUM AUDIT: ERRORS & OMISSIONS (E&O) LOSS PREVENTION TIPS

Your insureds don’t like surprises, especially when it comes to the topic of audits. Without proper explanation and timely, adequate handling procedures, policies subject to audit can lead to surprises and E&O claims against your agency. Your agency works long and hard to establish a relationship with a prospect. You learn about his or her business, analyze loss exposures, develop and present a comprehensive risk management plan, including insurance coverages, and win the case. Now it’s time to think about audits, as a number of policies are subject to audit. The following are some suggestions for your agency to ensure that your customer understands what it means to be audited and what he or she can expect. Know • Identify which policies are subject to audit. • Determine why the policy is subject to audit, whereas some other policies are not. • Improper Workers Compensation class codes and territory issues are often discovered during an audit, and can result in premium changes.

• Reinforce his or her responsibility to maintain adequate records. Advise what specific information will be needed to complete the audit. Use • Utilize proper premium calculation forms. If the carrier has its own form for calculating premiums for policies subject to audit, use that form. Plan • Strategize how to respond to an audit. • Discuss with agency management, or the producer, the best approach to promptly disclose premium increases to the client. • In the event of a mistake, advise your client that you are looking into the matter. • Collect your information and contact your E&O carrier. • Together, determine if there are any solutions to the problem.

• Check with the carrier prior to choosing classifications and developing premium.

• Discuss how best to communicate with the client.

• Document your conversation.

While not all premium audit problems can be avoided, proper knowledge, explanation, and planning go a long way toward maintaining a positive relationship with your customer and minimizing the E&O exposure to your agency.

Inform • Notify your client in writing, on the proposal, that his or her exposure will be audited. • Explain the audit process and timing. • Clarify the difference between a physical audit, phone audit, and self-reporting audit. • 30

change from the initial proposal or policy premium. Talk to him or her about how growth, previously unknown exposures, changes in operations, new products and/or operations, acquisitions, etc., can result in premium changes.

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The material contained in this article is for informational purposes only and is not for purposes of providing legal advice.You should contact your attorney to obtain advice with respect to any particular issue or problem.

Leasing: A Seamless Customer Experience

But don’t take it from us. Listen to your peers. Agents Express Leasing is an effective solution to manage your clients needs with today’s best equipment technology. Jay Byrnes of Byrnes Agency experienced how easy our leasing solution is for his agency: “As a longtime member of the “Big I”, I always knew of InsurBanc and their commitment to the independent insurance agent. Recently we wanted to update the agency with a new computer network and desktops, so I turned to InsurBanc for leasing options.

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From start to finish I experienced firsthand how seamless it was to conduct business with them. We have a 35 person agency so to update everyone’s computers was a decent size upgrade. InsurBanc made the process very easy and offered attractive terms and competitive rates which helped to manage the agency’s cash flow”. – Jay Byrnes ~ Byrnes Agency How it works: • Lease terms are 24, 36, 48 or 60 months with a minimum transaction of $5,000 • You are looking for 100% equipment financing, including certain soft costs such as software, shipping, installation and maintenance* • No down payments or advance payments are required • Monthly payments can be customized to meet your special business needs • You are looking for potential tax benefits associated with equipment financing**

We invite you to see for yourself. Contact us today for help preserving your cash flow with an equipment lease solution. These materials are for informational purposes only. The availability of any financing described herein is subject to approval of applicant’s credit, the equipment supplier and the equipment. *Soft costs are limited to 20% of the total amount financed. **Nothing herein constitutes tax advice and customers are advised to consult with their own tax advisors prior to electing specific rates or options. Agents’ Express leasing is a program of De Lage Landen Financial Services, Inc., a third party not affiliated with InsurBanc, a Division of Connecticut Community Bank, N.A.

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INSURTECH CONFERENCES: HEAR NO EVIL, SPEAK NO EVIL, SEE NO EVIL

William C. Wilson, Jr., CPCU, ARM, AIM, AAM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and director of the Big “I” Virtual University for over 17 years. W W W.V I A A .O R G

I received this email last month: I attended another conference yesterday: OnRamp Insurance. Lots of talk about tech and customer experience. No talk about coverage and language and why it matters. My response: Has there ever been an insurtech conference where someone speaks as a devil’s advocate to point out some of the problems or issues with trying to insure someone in 60 seconds or with dubious “big data”? I just wrote about an insurtech homeowners quote I got last year where my home’s square footage was understated by 1,200 sq. ft. resulting, in part, in the Coverage A limit quoted being at least $200K too low. I did another quote a week or two ago at the same site and my square footage was OVERstated by 1,600 sq. ft., though the quoted Coverage A limit was still below what I know to be the correct replacement cost. I just wonder if the organizers or participants in these events simply don’t want any naysayers to rain on their parade. The thing is, the technology could be used to do a better job than many agents if the insurtech industry would just get away from the misguided premise that what consumers want and need is fast, easy and cheap. What consumers might want and what they actually need are two completely different things. As I’ve said before, when my son was a few years old, he would have happily subsisted on a diet of chicken nuggets and gummy bears. That was what he wanted, not what he needed, because he was ignorant of nutrition in general and the nutritional value of such ‘food’ in particular. The same is true with regard to consumers and insurance. It’s a combination of ignorance and the perception, fueled by our own industry advertising, that insurance is a commodity differentiated only by price. Instead of easy/cheap/fast, easy/cheap/better is quite possible. There’s a semi-insurtech that provides a commercial lines market. I looked at their application/exposure analysis system a few years ago and it was VERY impressive. The questionnaire/checklist series of questions involved a lot of exposure analysis. It wasn’t fast by any means, but it appeared to be very thorough.

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THIS is where insurtechs could take the industry if they had a clue what they were doing. Instead, they cater to the base instincts of people because of ignorance or avarice. They’re looking for quantity, booking as many policies with as minimal effort as possible. Cash flow. The fact that they dishonestly or misguidedly lead people to believe they can really sell them insurance in 60-90 seconds makes me think there is more than just gross ignorance involved. If they actually understood the industry and what is at stake for the public, they would know the Amazon “one-click” approach isn’t suited for what we sell. Insurance policies have lots of endorsements for a reason…unless they’re building in a lot of those coverage options, there are people with lots of coverage gaps that don’t have to be there. The insurance industry is founded on good faith and good faith means a lot of things that don’t seem to be part of the business model of a lot of insurtechs. If we consider ourselves professionals, there are certain characteristics of being a professional that we have to meet. One of those is altruism. I don’t see any real altruism, for example, coming from a company like Lemonade other than the charity perception they like to give lip service to. When I got my online homeowners quotes, they never asked me about my boat dock. Assuming they’re using state of the art data resources like satellite imagery, something in their system should have told them that I live on a lake and have a $40K covered boat dock. They should also have access to information that tells them the dock is on Army Corps of Engineers property, not MY “residence premises.” As a result, they would have issued me a homeowners policy with a $40K gap for that exposure alone.

On our neighborhood NextDoor app, someone said they had a slip on their dock that was available for renting. That makes their dock used for business, necessitating another endorsement to cover that exposure. Does anyone at this insurtech know this? Does anyone at this insurtech really care that they may have a book of business full of people who have potentially bankrupting uninsured exposures? I doubt it. Too cool to care. Would a traditional agent ask these questions? Many would not, so I don’t blame this attitude just on insurtechs. There is plenty of room for improvement in traditional channels. That’s where I see the role of technology. Automate processing as best as possible and use RELIABLE information resources to streamline the processes. That should give knowledgeable, caring professionals, with the assistance of AI technology, to devote most of their time to exposure analysis, risk management, advocacy, and education. The industry needs disruption and can benefit greatly from technology, but not the kind being offered by most of the insurtechs I’ve looked at. Everyone knows the U.S. has a great need for rebuilding infrastructure. If we let the equivalent of insurtechs do it, they’d be rebuilding bridges with matchsticks. This message needs to be shared at insurtech conferences, but I’ve not seen any indications that it is.

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Everything you insure is on your shoulders

Who do you trust to have your back? VIAS offers the most prestigious Errors & Omissions carrier(s) in the country: Westport Insurance Company & Utica National Insurance Group

For a quote or for more information contact Helen Collins at hcollins@viaa.org or 1-844-609-1481

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VIAS is a subsidiary of Vermont Insurance Agents Association viaa.org

COMPANY & AGENCY NEWS

Recruit. Assess. Train. Retain.

CREATE YOUR DREAM TEAM! Does the thought of hiring a new employee leave you overwhelmed? Are you seeing turnover, or posting a job, but just aren’t finding the “right” person? You’re not alone. According to the Agency Universe Study 44% of independent insurance agency owners say finding qualified new recruits is their top challenge. Find the right recruits with Big "I" Hires, a one-stop resource for independent insurance agencies to identify, hire and assess top-performing Producers and CSRs.

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NOW HIRING: Commercial Lines Account Manager Recognized in 2016, 2017, 2018 & 2019 as one of the Best Places to Work in Vermont, The Richards Group is currently seeking an experienced Account Manager to join our Commercial Lines team in Bennington or Manchester VT. We are looking for a highly-motivated individual who has strong interpersonal skills and a desire to cultivate positive relationships and provide exceptional service. The Richards Group offers a competitive salary commensurate with experience as well as a comprehensive benefits package. ESSENTIAL DUTIES & RESPONSIBILITIES: The Account Manager works independently and or collaboratively to manage overall client service and administration throughout the issuance and renewal cycle. This position is a client facing role utilizing professional skills in Commercial Property and Casualty insurance to maintain and enhance client relationships while also insuring client profitability.

• High School diploma or equivalent • Active Property & Casualty license • Experience using an application management system (AMS 360 is preferred) •

Knowledge and expertise in Property & Casualty; a thorough understanding of Commercial Insurance Products

• Strong interpersonal skill and a desire to cultivate positive relationships and provide exceptional service • Must have Integrity; A positive attitude; Highly professional; Reliable; Focused; Detailed; Efficient; Must be a Team player and highly self-motivated •

Excellent oral and written communication skills

•

Ability to thrive in a fast-paced work environment

Please send cover letter and resume to: acrawford@therichardsgrp.com

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