IIABL 2023 May Louisiana Agent Newsletter

LOUISIANAAGENT

IIABL Legislative Update

Jeff Albright & Ben Albright May 2023 Page

IIABL STAFF

JEFF ALBRIGHT

Chief Executive Officer

jalbright@iiabl.com

(225) 236-1366

BENJAMIN ALBRIGHT

Vice-President of Strategic Initiatives balbright@iiabl.com

(225) 236-1357

KAREN KUYLEN

Director of Accounting & Finance

kkuylen@iiabl com

(225) 236-1353

JAMIE NEWCHURCH

Director of Insurance Programs

jnewchurch@iiabl.com

(225) 236-1350

KATHLEEN O'REGAN

Director of Communications & Events

koregan@iiabl.com

(225) 236-1360

BRANDI VAN PELT

Insurance Programs Administrator

bvanpelt@iiabl.com

(225) 236-1358

DUSTIN WAMBSGANS

Agency Consultant

dwambsgans@iiabl.com

(225) 236-1361

LISA YOUNG-CROOKS

Director of Member Relations

lyoung@iiabl.com

(225) 236-1351

Donelon Issues $2 Million in Total Fines to McClenny Moseley & Associates for Massive Insurance Fraud Scheme

Horrible Policy Forms and Endorsements to Avoid of Be Wary Of Remind Your Agents: Include Permitted Drivers on the RLI Personal Umbrella Policy Application

The Impact of Mismanagement on Value

3 Strategies to Unlock Insights From Employee Benefits Data

Getting The Most Out of the Tool' is the Top Tech Challenge for Independent Insurance Agencies

3 Ways to Elevate Your Agency's Marketing Strategy with ChatGPT

Get Your Feet Wet Selling Specialty Insurance

Advertiser Index

2023 Industry Partners

IIABL Officers & Board of Directors

IIABL Legislative Update

Bills that IIABL Supports

House Bills

HB 601 (Huval) – Clarifies statutes related to bad faith claims against insurers

Passed the House and Senate Insurance Committee

Will be heard on the Senate floor early next week

If passed out of the Senate will return to the House for concurrence vote

Be on the lookout for grass roots alerts from IIABL!

What does it do?

It DOES NOT remove the bad faith penalties

Clarifies the “satisfactory proof of loss” trigger so policy holders know what they need to do to move their claim forward

Clarifies for companies which claims are/are not bad faith to reduce unnecessary litigation

HB 183 (Firment) – Prohibits the assignment of insurance policy benefits

Passed the House and Senate Insurance Committee

Will be heard on the Senate floor this week

If passed out of the Senate will go to the governor for signature

What does it do?

It prohibits the assignment of benefits for an insurance policy

Assignment of benefits was a significant problem in Florida market

Assignment of benefits was a major problem in the Apex Roofing and McClenny Moseley & Associates scandal in Louisiana

HB 489 (Huval) – Provides relative to ratemaking systems utilized by insurers and rate service organizations

Passed the House and Senate Insurance Committee

Will be heard on the Senate floor early next week

If passed out of the Senate will return to the House for concurrence vote

Jeff Albright & Ben Albright

May 2023

LEGISLATIVEUPDATE

What does it do?

It will eliminate the LDI “12-month” rule and allow insurers to file for rate increases without regard to time since last filing

Requires LDI to approve or disapprove a rate filing within 45-days with no extensions

The original bill would have made Louisiana a use and file state but those provisions were amended out of the bill in the Senate Insurance Committee

HB 569 (Thompson) –Modifies the “ more than 3year rule” for homeowners’ insurance

HB 569 failed to pass the House floor by a vote of 39-56

What does it do?

Modifies the “ more than 3 year rule” Insurance companies wanted to repeal the law entirely

IIABL strongly objected to the repeal

Continued from page 5

Compromise bill simply allows insurance companies to modify deductibles on policies that are more than 3 years old up to a 5% deductible

110 (Firment) – Provides relative to fortified roof endorsements

HB

Passed the legislature and sent to the governor for signature

Requires insurance companies to offer an endorsement which states that in the event a claim requires the insurer to replace the roof, they will pay to upgrade the roof to meet the fortified standard, rather than replacing it with one of like kind and quality.

The carrier can charge whatever additional premium they believe to be actuarially justified for such policy enhancements.

The endorsement is an optional purchase for policyholders, but such an endorsement MUST be made available as an option by Homeowners insurers.

IIABL supports this proposed legislation

LEGISLATIVEUPDATE

HB 294 (Willard), HB 309 (Garofalo), SB 113 (Hewitt) – Provides for certain insurance premium discounts

HB 294 will become law 08/01/2023 as Act No. 1 of the 2023 Session

These are 3 essentially identical bills to mandate discounts for policyholders who bring their homes to the Fortified building standard. The bills do not specify a specific amount for the discount, a carrier can use whatever their actuarial math shows to be justified, but they must provide an actuarially justified discount for Fortified homes.

All 3 bills enjoy broad support amongst the industry, from both sides of the aisle, and across the business community. IIABL also supports all 3 bills.

HB 383 (Amedee) – Requires each insurer subject to the Louisiana Insurance Guaranty Association Law to provide for a data transfer plan and file such a plan with the commissioner of insurance

Passed the legislature and sent to the governor for signature

Requires admitted insurers to file a plan for how their data can be efficiently transferred into LIGA’s systems in the event of an insolvency.

This bill was brought in response to the difficulty that LIGA experienced after the multiple insolvencies of the past year in getting appropriate data to facilitate their taking over claims from insolvent insurers. It does not prescribe a specific method for how the data must be stored or how the transition should work, but insurers will have to think through the process and file it with the department. This should minimize the friction in transferring the data in the event of future insolvencies.

IIABL supports HB 383.

HB 511 (Illg) – Provides relative to the Louisiana Insurance Guarantee Association

Passed the House and Senate Insurance Committee

Recommitted to the Senate Committee on Finance

Continued from page 7

Provides various technical changes to the way LIGA is allowed to defend itself in the courts.Perhaps most importantly, it exempts LIGA from penalties under the bad faith statute.

This is important because, as a quasigovernmental organization, they don’t have a profit incentive to slow-pay or underpay claims. Their claims costs are ultimately passed down to the citizens of Louisiana.

HB 511 was amended in the House Insurance Committee to increase the maximum LIGA assessment to insurers from 1% to 2% IIABL supports the bill.

HB 604 faced opposition from plaintiff attorneys and was deferred in committee.

HB 604 (Garofalo) – Provides for the appraisal process

LEGISLATIVEUPDATE

Provides minimum standards for who can serve as an appraiser or umpire in the appraisal process, and provides a process through which policyholders can participate in appraisal without needing to hire an attorney or appear in court

Virtually every homeowners policy contains an appraisal provision for policyholders who want to dispute the amount of damage that the insurer states in their adjustment, however policyholders often don’t know who to hire to perform their appraisal.This bill would mandate the department keep a list of qualified appraisers from which a policyholder can select an expert local to their area for representation

IIABL supports the bill

Senate Bills

SB 96 (Talbot) – Provides the Louisiana Insurance Guaranty Association and the Louisiana Citizens Property Corporation shall not be liable for certain property damage insurance claims.

Passed the Senate and House Insurance Committee

Will be heard on the House floor early next week

Exempts both LIGA and Citizens from class action lawsuits

This is important beca organizations, they do slow-pay or underpay ultimately passed dow

IIABL supports SB 96.

SB 106 (Smith) – Requires written request of the insu records in connection with insurance claim

Requires an insurer to the claim file on their o requested. This right was already states that an insurer f to penalties under the The original version of problematic provision that claim files be kept subjecting an insurer t faith penalties instead act penalties, which w increase in litigation.

IIABL worked with the proposed law to its cu SB 106.

The bill has passed the Insurance committee.

floor debate in the Ho

Continued from page 8

143 (Henry) – provides for former officers of insolvent insurers

SB

Precludes people that had a controlling interest in an insurance company that went insolvent from operating a new insurance company in Louisiana unless given a specific exception by the commissioner of insurance.

IIABL supports the bill.

SB 143 has passed the Senate and the House Committee. It should be heard on the House floor soon.

SB 156 (Duplessis) – Provides that no property insurance policy shall prohibit an insured from hiring a public adjuster

The department brought this bill in response to a situation that has arisen recently. At least one property insurer in the state has started adding an endorsement to their policy which states that the policyholder cannot hire a public adjuster on a claim related to the policy.

LEGISLATIVEUPDATE

Several agents alerted IIABL about the endorsement, and we brought it to the attention of the department They issued a directive stating that such endorsements were illegal and unenforceable, but a property insurer challenged them in the administrative law court which held in favor of the insurer that the department did not have the authority to prohibit such an endorsement.

IIABL has supported the bill throughout the process. However, some of the insurers using the form stated that it was a make-or-break issue for their companies – that they would have to stop writing in Louisiana if the law passed We worked with them to compromise, and the current version of the bill prohibits the endorsement on all personal lines policies and on admitted commercial policies.Surplus, commercial policies are still allowed to use the endorsement. After that compromise, there has been little objection to SB 156.

It has passed the Senate and the House Insurance Committee. It should be heard on the House floor soon

SB 196 (Peacock) – Creates the Litigation Financing Disclosure and Security Protection Act

Provides transparency into 3rd party financing of litigation.

There has been a recent rise in the prominence of 3rd party financing of litigation with both foreign and domestic investors providing the payments for lawsuits in return for a cut of any reward (often on a contingency basis), and the returns on those investments have been substantial These financing agreements can lead to frivolous lawsuits and can bias the settlement process of the case.

SB 196 does not seek to outlaw those financing agreements, but it requires that such agreements must be disclosed as part of the court proceedings so that the judge/jury, defendant, and plaintiff are aware of all interested parties in the suit.

IIABL supports the bill.

SB 196 has passed the Senate and is awaiting a hearing in House Civil Law

Bills that IIABL opposes House Bills

HB 199 (Romero) – Provides relative to the State Licensing Board for Contractors

This bill underwent multiple revisions through the process and was ultimately a mixed bag for the insurance industry

Continued from page 9

The author was looking to refine the standards for which contractors are required to be licensed by the Contractor’s Board, and are therefore subject to oversight, education requirements, etc

In its final form, the bill required full licensure for all contractors who perform a job that costs $10,000 or more (down from the existing law of $75,000 or more). We supported this change because of some of the contractor fraud and abuses that we saw in the wake of the recent storms, especially amongst roofers.

However, the final version also added a carve-out for contractors that were working directly for a homeowner who is “acting as a general contractor” for their own project This essentially meant that ALL repairs that don’t have a GC on them would not be subject to licensure. We opposed this change because the current “registration” for contractors performing such work is better than a complete lack of regulation, even if we would prefer to see full licensure.

IIABL ultimately opposed the final version of the bill, as drafted

HB 199 failed to pass the house floor 20 votes to 47 Mandates that insurance companies provide a 5% discount on all auto policies, if the insured is has installed a dash cam.

HB 245 (Carter) – Provides for a five percent insurance rate reduction for motor vehicles with a dashboard camera

The industry opposed the bill because of the mandated percentage. Discounts should be actuarially justified by data that shows how much they reduce claims amounts, not prescribed by legislation without any supporting actuarial data.

IIABL opposed HB 245.

The bill failed to pass out of the House Insurance committee 6 votes to 6

HB 252 (Carter) – Provides for the exclusion of advertising expenses in setting rates or making rate filings

Prohibits insurance companies for including the cost of advertising in their rates

The industry opposed the bill because advertising is a normal business expense which virtually all private companies include in the price of their product, and insurance is no different.

IIABL opposes the bill.

HB 252 passed out of the House Insurance committee 5 votes to 4. It will head to the House floor for debate in the coming weeks.

LEGISLATIVEUPDATE

HB 287 (Cormier) – Imposes time limitations and documentation requirements upon insurance adjusters

Requires that insurers supply the initial copy of the insurer’s field adjuster report to all policyholders immediately upon completion

While we agree in principle with providing transparency in the claims process, the practicalities of this process would significantly impair the claims process. Field adjusters, as a matter of industry standard practice, perform multiple adjustments and then go back to an office to complete all of the reports which are filed and processed by the office staff

This change would significant slow down the claims process, which has already been glacial after recent storms. Other legislation, from last session and in this current one, offer better solutions to the problem without inhibiting the prompt payment of claims.

IIABL opposes HB 287.

The bill met significant opposition when it was heard in House insurance, and it was voluntarily deferred

Continued from page 10

HB 377 (Magee) – Provides for certain property claims settlement practices

Changes the bad faith penalties to be applicable starting 60 days after the insurer or an agent first inspect the property, in person or using technology

While we agree with the author’s intent to provide a clearer timeline for the bad faith process, empowering policyholders to move the claim forward. This solution would result in a massive increase in the amount of litigation.

IIABL opposes this bill.

We encouraged the the author to support Chairman Huval’s bad faith reform package (HB 601) in lieu of proceeding with this bill The bill has not been heard, and we do not expect it to move

Senate Bills

SB 11 (Luneau) – Prohibits insurance rate determinations based on risks classified by gender

Prohibits the use of gender in underwriting.

LEGISLATIVEUPDATE

The industry opposed this bill because it imposes limits on what data they can use in underwriting.

The author also claims that women pay more for auto insurance, which is demonstrably false, and the industry provided data that showed women actually pay less on average than men for auto insurance.

IIABL opposed the bill.

SB 11 passed out of committee and is subject to call on the Senate floor.

Senate Bills

SB 11 (Luneau) – Prohibits insurance rate determinations based on risks classified by gender

Prohibits the use of gender in underwriting.

The industry opposed this bill because it imposes limits on what data they can use in underwriting

The author also claims that women pay more for auto insurance, which is demonstrably false, and the industry provided

Continued from page 11

IIABL opposed the bill.

SB 11 passed out of committee and is subject to call on the Senate floor.

As a side note for those of you that are interested…

SB 208 (Talbot) – Provides for the appointment of the commissioner of insurance

Provides that the commissioner will be appointed instead of elected and provides a process for that appointment.

Would require a 2/3 vote of the legislature to pass.

IIABL is not taking a position on SB 208 because it’s a matter of pure public policy.

This bill has not moved at all (despite the author being the chairman of the committee of jurisdiction) Because it has not been heard, and because 2/3 vote in each house is a high bar to clear, it seems unlikely that the bill will proceed this session.

...

CLIENTS DECREASING COVERAGE IN EXTREMELY HARD MARKET?

Ben Albright

May 2023

The dangers it presents for Agents E&O and how to protect yourself

We are regularly hearing from members about how their clients are being forced to buy less coverage or go without coverage because of the massive increases in rates in our current market crisis. While this is certainly an understandable, if unfortunate, reality of our situation, it can present some real challenges for agents. From an Agent’s Errors & Omissions perspective, any time a client moves from more coverage to less coverage is a potential exposure. It’s important for us to be vigilant during this market upheaval, and to take extra precautions to document our files and protect against E&O

What can I do to minimize my exposure? 1 2 3

Document, Document, Document!

Don’t recommend decreases in coverage or going bare

Require a signature when a policyholder wants to decrease or remove coverage

COVERAGEDECREASES

Documentation is the key

This mantra is always true in the E&O world, but it bears extra attention when a client decides to decrease or go without coverage. Agents should document EVERY communication with the policyholder in these situations. Emails should be easy – just drop them into your Agency Management System. Other channels may take a little more work, but they can be equally important. If a client texts you that they’re considering going without coverage, be sure to export it to a format that can be saved in your AMS. If you hear about it on a phone call or talking in-person, make a record of the conversation in an activity in your AMS, or –even better send the client a follow-up email wherein you recap the conversation as you understood it, and document the follow-up email in your AMS.

Any E&O defense lawyer will tell you: documentation is THE best thing for their defense case in any lawsuit. For a perspective on how

Continued from page 14

important it is, consider Swiss RE –IIABL's exclusive E&O market for members. Any Swiss RE policyholder that has sufficient documentation in their AMS come claim time, gets their deductible instantly cut in half. The carrier is willing to reduce your retention by HALF just for documenting the file.

Coverage recommendations

Another challenge for agents in this market is recommending appropriate coverage. Like any good agent, you want your client to be fully covered in the event of a claim, but the realities of this absurdly hard market can make that impractical. In some cases, the policyholder can’t afford their renewal. In other cases, you may be completely unable to find a company willing to write the full limits because capacity is so limited in certain areas. In either case, how do you square the desire to secure full coverage for the policyholder against the realities you’re facing?

COVERAGEDECREASES

This is an instance where it’s important to overcommunicate with your insured. Explain to them exactly what they will be getting under the quote proposal and how it compares to expiring –including and especially any areas where the coverage is being decreased. Be sure to include any increases in retention caused by coinsurance, decreased limits, etc. in your proposal and get a signature – more on that below. If you are unable to secure a quote for the full, expiring limits, be upfront and explicit about that in your quote proposal. As an agent, you do NOT have a legal responsibility to fully assess the client’s insurance needs or to secure sufficient coverage to provide full coverage. You DO have a legal obligation to inform the policyholder of what they are buying when you present a quote, and best practices are to also state that additional coverages or higher limits may be available. But if the amount you are proposing is the highest limit you can muster, that’s important to tell the insured as well.

It is also important that, as an agent, you don’t RECOMMEND buying lower coverage limits. While it may be a necessity in certain cases, that should be a decision made by the policyholder, not prescribed by the agent. This can sometimes feel disingenuous or self-serving, but it is not only an important protection for you against E&O lawsuits,

it’s the right thing to do for the policyholder. An agent telling an insured that they SHOULD buy a lower limit is virtually a guaranteed payout on an E&O claim if a loss exceeds the policy limit. The policyholder is, likewise, relying on you to inform them of what is available on the market. But it is up to the insured to decide how much limit they need.

Get a signature

This is a natural part of the documentation, but it’s important enough to have its own section! When you present your formal

Continued from page 15

proposal – and if you aren’t using a formal proposal beyond the quote proposal provided by the insurer, you should create one, but that’s perhaps a topic for another day you should include space for them to acknowledge any coverage decreases. Anywhere that the quoted coverage is less than expiring, you should get a signature to enshrine in writing that you made the policyholder aware of the decrease and they made the decision to accept it.

This is an exceptional defense if ever you should find yourself in an E&O suit. Cases often come down to “he said” “she said.” If you can then show that the policyholder was distinctly aware of the change, and that they acknowledged their decision to decrease coverage by signing the proposal, your defense team will go into court with big smiles on their faces.

Bonus E&O Tip: Time to cross-sell flood!

This is unrelated to my main topic, but let me drop in a bonus tip. Hurricane season is coming, and you have some clients that don’t have flood insurance. Take a few minutes to cross-sell that line, and you’ll not only round out your accounts, but you’ll have a good E&O defense if one of your uninsured clients gets flooded. Again, being able

COVERAGEDECREASES

to show that you offered the coverage is an excellent defense in the event of a claim.

Every modern AMS system can spit out a report showing all your accounts with property insurance but no flood and the associated email address. Run it. Feed that into your email platform’s mail merge system. Make a single template email that says “Our records indicate that you don’t have flood insurance written with us. Your property insurance does not cover flood. Please contact our agency if you’d like a quote on flood insurance.” Hit send. Save the email in your AMS. Done.

Conclusion

We know that Agents E&O isn’t top of mind during this market disaster, but this is also the time when you need to be most aware. Sit down with the other staff members in your agency and make them aware of the dangers of the coverage decreases we’re seeing in this hard market. If there is anything that the association can do for you, please let us know. We’re always here to help.

Continued from page 16

NOW AVAILABLE! THE STATE OF TECH REPORT

I'm excited to tell you that Catalyit's 2023 State of Tech in Independent Agencies Report is now available for you to download!

Catalyit surveyed agencies around the country to learn about the technology they are using and how they feel about it. Agents also rated their top carrier partners on the technology support they provide. You may have taken the survey yourself, but even if you didn't, you can still access the results.

The report shares findings from the survey and insights on agency tech trends. Here are four key findings that I found very interesting:

More agencies are using Marketing Automation platforms (with a 15% increase year-over-year) for email and text marketing, prospecting, client retention, pre-renewal processes, cross-selling, and up-selling. Cybersecurity continues to be a weak point for agents and needs to be a priority. Data Analytics tools are underutilized, and with more strategic insights, agencies can make more informed business decisions that improve overall efficiency and performance. Development and use of Commercial Lines Quoting/Rating platforms is growing, with 25% of respondents utilizing at least one of these solutions.

I encourage you to download the full 36-page State of Tech Report to see all the results, explore the latest insights, and learn what the data means for independent agencies.

Get the report

Catalyit

25 April 2023

Despite the frequency of flooding, inflation and an uncertain economic outlook can make flood insurance a difficult sell.

At the beginning of 2023, the U.S. witnessed historic flooding in California before tornadoes, hail and straight-line winds swept across Mississippi, Alabama and Georgia. Despite the frequency of these events and flood insurance's rising profile, inflation and an uncertain economic outlook can make flood insurance a difficult sell.

Nevertheless, agents shouldn't be deterred. “Now is a critical time for agents to discuss the importance of flood insurance with all of their customers," says Cassie Masone, vice president, flood operations, Selective Insurance. “As prices for goods and services rise, consumers look to pare their expenses; flood insurance should not be an item to cut back on."

Here are three ways agents can demonstrate that they are knowledgeable about their clients' risks and educate them about why they should purchase flood insurance coverage:

1) Integrate flood into every conversation. Flooding is the single most common peril properties face, according to FEMA, and it's also the most costly. Yet, many clients are unaware that they need flood insurance or, if they are aware, how they can purchase coverage.

“I always encourage independent agents to have their staff integrate the flood conversation into every sale in the same way that many already do with other ancillary coverages like excess liability make it part of the routine," says John Hannah, assistant vice president, lending and insurance solutions, SWBC.

“It's shocking how many insureds genuinely don't know they can even purchase flood insurance coverage if they don't live in a special flood hazard area, purchase more coverage than the NFIP offers, or look at alternatives to the NFIP that don't require elevation certificates or waiting periods," Hannah says.

As extreme weather events increase in frequency and severity, “clients are relying on us advisors to point out the perils that face their biggest assets," agrees Steve Rivera, partner, national personal

Olivia Overman

IA Content Editor

FLOODINSURANCE

lines practice leader, The Liberty Company Insurance Brokers. “Clients don't know what they don't know, so bringing your expertise to the table and showing clients that you are looking out for their best interest and allowing them to make informed decisions will always go very far with gaining their trust and building long-term relationships."

2) Understand the coverages available in your flood insurance market. “Risk Rating 2.0 has changed how the NFIP is pricing flood policies, so any agent looking to write an NFIP policy must understand the new rating guidelines associated with Risk Rating 2.0," Masone says. “They should be looking to their Write-Your-Own carrier for support to ensure they obtain all of the new rating elements required to get an accurate price."

Additionally, private and excess flood insurance coverage should be understood to ensure agents offer full-value flood coverage for their clients.

Continued from page 21

“It's also worth mentioning that every homeowners conversation surrounding flood should include additional living expense coverage, which is not available through the NFIP, but is regularly available if you're offering coverage through the private or excess market sometimes it's included at no additional cost," Hannah says.

For high net-worth clients, “agents must understand the risk and be aware of coverage restrictions in the NFIP and available private market policies to offer excess flood insurance if warranted by the building type," Masone says. “Primary limits could be exhausted quickly, so tapping into an excess product could provide the extra coverage that a customer needs."

However, insuring high net-worth homes against flood can be complex. “These structures are often built with high-quality, unique materials and are often very custom in design and features," says Wes Brum, account executive, Insurance Associates Inc.

FLOODINSURANCE

“Insuring a high net-worth home is much more than insuring just a home," Brum says. “The clients who own high-value homes often will also have fine jewelry, arts, antique or luxury vehicles, and watercrafts."

“Purchasing excess flood insurance is a prudent move for homeowners with asset values that far exceed the parameters of primary flood coverage, which limits coverage at $250,000, especially if you are in a high-risk flood zone," Rivera adds.

3) Explain how technology is improving the experience. Technologies, including artificial intelligence (AI) and 3D property data, are becoming dominant features in the underwriting process. The use of drones to create aerial images of risk areas can help carriers and agents identify and manage risks.

“Many insurers are using aerial imagery in their underwriting process to look for surrounding hazards and, more importantly as it relates to flood insurance, be able to identify ground elevations and foundation types, which will likely impact the rate or cost of a flood insurance policy," Brum says.

“Climate change may be out of an insurance company's control; however, utilizing technology and AI to develop accurate catastrophe and flood modeling may be invaluable to an insurer as it will assist carriers in creating new products, increased limits but most importantly, predicting the probability of risks before they occur and mitigating those risks to avoid and reduce the number of casualties," Brum explains.

With technological advances, “carriers are able to remove the unnecessary steps from the underwriting process by streamlining the submission to quote process," says John Stammen, CEO, Convr, an AI company serving commercial insurance organizations. “Whether you're writing flood insurance or any other type of insurance, it's about data and there's more data out there than we can consume."

Continued from page 22

Speed and efficiency are key to supporting the underwriting process and AI is emerging as the game-changing technology of the insurance sector. As the use of AI expands, agents and carriers have the ability “to take a submission and pull out the critical elements of data, look at the publicly available data sources in real-time, fuse all that together, and then present to the underwriter answers that pre-qualify a submission," Stammen says.

Olivia Overman is IA content editor.

Here is a collection of findings from recent studies that reveal the true extent of distracted driving in 2023.

The auto insurance market is in distress. Most notably, rates are rising, which is being driven by increases in claims severity and frequency due to inflation, worker shortages and supply chain disruption.

While these factors have cumulated over the past few years, an already prevalent—yet just as impactful—phenomenon continues to impact the auto insurance space: distracted driving. Since April is Distracted Driving Awareness Month, here is a collection of findings from recent studies that reveal the true extent of distracted driving in 2023:

4 S T U D I E S T H A T R E V E A L D I S T R A C T E D D R I V I N G I S W O R S E T H A N Y O U T H O U G H T

1) Dog days are here. An overwhelming 91% of drivers who drove with their dog over the past 12 months interacted with them while on the road, according to new data from Selective Insurance. On top of that, nearly half (48%) of drivers admit that they are more distracted when their pet is in the vehicle than when it isn't.

The study also found that in the past 12 months, of drivers who own dogs, more than one-third (36%) gave their dog food, treats, or water while driving; over a quarter (27%) of drivers have taken a photo or video of their pooch; and nearly onequarter (23%) revealed that they held their pet in place all while driving.

While these distractions may seem minimal, almost 1 in 10 drivers (9%) have gotten into a car accident as a result of having their dog in their vehicle, the study found.

DISTRACTEDDRIVING

2) Smile you're on camera. Unsafe driving is on the rise and Generation Z and millennials aren't letting off the gas, according to a new Nationwide Agency Forward study, which unveiled some frightening driving habits from some of the youngest drivers on the road: Gen Z. Unfortunately, 34% of Gen Z admitted that they video chatted while driving, according to the study, which also found that 59% of Gen Z say they are more impatient on the road than a year ago and 47% agree they are driving faster.

It's not just younger drivers making the roads unsafe, though. Of all drivers surveyed, 54% admit to driving 10 or more mph above the speed limit, 56% have eaten while driving and 12% said they have used or checked social media while driving. What's worse, 7% have watched a movie while driving. A movie!

Continued from page 25

“The trends we're seeing are not heading in the right direction," said Beth Riczko, president, p&c personal lines at Nationwide. “This unnecessary multitasking behind the wheel is not worth the risk and drivers create danger for themselves, the passengers, others on the road, and even pedestrians."

3) Work, work, crash. Emotional distraction, drowsiness and work-related stress all play significant roles in unsafe driving behaviors, according to the 2023 Travelers Risk Index on distracted driving. Specifically, 37% of workers surveyed said that they have taken work-related calls, texts or emails while driving. When asked why, 44% said that it might be a work-related emergency, and 43% responded that they felt the need to always be available.

LOUISIANA

DISTRACTEDDRIVING

Further, more than 75% of drivers said that they have experienced stress or intense emotions while behind the wheel, and 62% said that they have driven while drowsy. Notably, 70% of survey respondents said that they believe distracted driving is more of a problem now than it has been over the past few years. That finding is underscored by estimates from the National Safety Council, which show that deaths due to preventable traffic crashes in 2022 increased by 18% compared with pre-pandemic levels.

“Driving is a series of microdecisions made in quick succession throughout the course of a trip," said Chris Hayes, assistant vice president of workers compensation and transportation, risk control, at Travelers. “Any type of distraction a device, a sleepless night or stress can make the difference between reaching your destination safely or not."

“We can all help make our roads safer by taking simple steps, such as putting our phones in 'Do Not Disturb' mode, speaking up when we see a driver engaging in dangerous behaviors and not calling co-workers when we know that they're behind the wheel," he added.

4) Weekend getaway. Preoccupied driving takes place more often on the days that people are commuting and when traffic tends to be heavier, according to a new study by Arity, a mobility data and analytics company founded by Allstate in 2016, called “Crash course: The state of distracted driving in the U.S."

“On Sundays, when fewer drivers are on the road than on any other day, drivers tend to take a break from their phones," the study said. “They drive faster, focus more, and do less distracted driving. Higher speeds necessitate more attentive driving."

Continued from page 26

The study also found that distracted driving has increased by 30% in the last four years.

Will Jones is IA editor-in-chief.

Louisiana Department of Insurance

02 May 2023

Insurance Commissioner Jim Donelon issued fines totaling $2 million yesterday to Texas law firm McClenny Moseley & Associates (MMA), founding partners James McClenny and John Moseley, and Louisiana managing partner William Huye III for engaging in unfair trade practices and insurance fraud involving at least 850 Louisiana homeowners and policyholders. MMA, McClenny, Moseley and Huye were each fined $500,000, the maximum allowed under current law.

"The illegal insurance scheme perpetrated by McClenny Moseley & Associates is frankly one of the most egregious cases that has ever come through this department," said Commissioner Donelon. "The $2 million in fines should put all bad actors on notice that fraudulent behavior will not be tolerated in Louisiana."

According to findings from the Louisiana Department of Insurance’s (LDI) ongoing investigation, MMA admitted to at least 856 fraudulent misrepresentations that it had been retained by Louisiana policyholders to settle claims when MMA did not represent those policyholders. MMA’s fraudulent behavior included presenting demands for payment pursuant to the consumer’s insurance policy, invoking the appraisal provision of the policy, and receiving and negotiating insurance settlement checks without the authority to do so from the policyholder.

FRAUDSCHEME

Based on the LDI’s investigation, these misrepresentations and unauthorized legal representations were made by MMA with intent to injure, defraud or deceive Louisiana policyholders and insurers for the purpose of diverting insurance claim proceeds to their benefit and collecting predatory professional service fees to which they were not entitled

The LDI previously issued a cease-and-desist order, notice of wrongful conduct and notice of investigative proceedings to MMA on February 17, 2023. A consolidated copy of the four Notice of Fine documents issued on May 1, 2023, is available here.

Any policyholder who believes they may have been fraudulently represented by the law firm McClenny Moseley & Associates is encouraged to

Continued from page 28

contact the LDI Office of Insurance Fraud at 225342-4956. Anyone who believes they have been defrauded or witnessed insurance fraud can report their suspicions by phone or online at www.ldi.la.gov/reportfraud.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov. If you do not wish to receive news releases in the future, please email public@ldi la gov with ‘Unsubscribe’ in the subject line

Horrible Policy Forms and

Today, a NY agent sent me an endorsement that is being attached to CGL policies covering habitational properties. He says this type of endorsement is being used by multiple insurers who write this class of business.

The endorsement in question is called “MAINTENANCE WARRANTY ENDORSMENT” <sic> and, yes, they misspelled “endorsement,” a common signal that a form may be problematic for an insured. The endorsement has a number of grammatical and punctuation issues.

The form includes three exclusions, one being an exclusion for failure to maintain a premises in a safe, sanitary, healthy, habitable, and tenantable condition. Needless to say, an exclusion this broad can be stretched to exclude a lot of things. This is not unusual in the E&S marketplace where forms are frequently developed in-house and not always by skilled and experienced policy form drafters. Which brings me to the next issue.

POLCYFORMSENDORSEMENTS

The form number fits the standard ISO format and begins with “CG 90….” The problem is, unless I’m mistaken, ISO still has no CG 90 series for forms. I don’t stay on top of ISO form changes as well as I used to, but there has not been an ISO “CG 90” form series I’m familiar with. ISO leaves certain categories blank so that subscribing insurers can develop their own “CG” forms within those series.

Compounding the problem, the copyright notice at the bottom of the page says, “Copyright, Insurance Service Office” <sic> and, yes, the proper spelling includes the word “Services,” not “Service.” Sometimes ISO subscribing companies will license ISO language for use in their proprietary non-ISO forms. However, when they do, the copyright notice reads differently than that on a pure ISO form. I discuss this in another blog post:

“Is It ISO or Is It Memorex Insurance Company“

In addition, if it’s a pure ISO form, the copyright notice will include a date reference, but if it’s not a pure ISO form, the copyright notice may not include a date reference.

For independent agents in particular, it is difficult (to say the least) to familiarize yourself with several thousand ISO forms, much less thousands more non-ISO forms. When you encounter a new form, particularly in the E&S marketplace, be VERY VERY careful. When placing coverage for a customer, you may request certain products or forms, but invariably the delivered product will include forms you didn’t request. RTFP!

To dig deeper on this subject, including the critical importance of reviewing policy deliverables, search my web site for “deliverables” and a short list of additional articles will come up:

https://insurancecommentary.com/?

s=deliverables

Continued from page 30

I talk about these issues in my book “When Words Collide: Resolving Insurance Coverage and Claims Disputes.” In addition, not long before I retired from the Big “I,” the late John Eubank, CPCU, ARM and I did a webinar and the handout is still available online:

We give a number of examples of types of non-ISO forms and even specific ISO forms that should be avoided if possible and a few that are often misunderstood.

Once again…RTFP!

Bill Wilson Founder at InsuranceCommentary.com

One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America.

“Horrible Policy Forms and Endorsements To Avoid or Be Wary Of“

REMIND YOUR AGENTS: INCLUDE PERMITTED DRIVERS ON THE RLI PERSONAL UMBRELLA POLICY APPLICATION

Many underlying auto insurance policies don’t rate for permitted drivers or allow them to be added until they are licensed However, that’s not the case when it comes to an RLI Personal Umbrella Policy

If your agents have customers with one or more drivers with a learner’s permit at the time they are applying for RLI Personal Umbrella coverage, it is imperative that the permitted drivers are included for rating. Permitted drivers are considered drivers by application definition for the RLI Personal Umbrella program and must be rated at the time of the application, whether new or renewal. Please remind your agents to review questions #5 and #13 on the new business application and make sure they remind their clients to include their permitted drivers on their renewal questionnaire.

According to the National Highway Traffic Safety Administration (NHTSA), the risk of auto

accidents is higher among 16- to 19-year-olds than any other age group – and that’s the largest age group of permitted drivers While a parent’s first concern is always the safety of their child, it’s important they understand that permitted drivers must be accounted for on an RLI personal umbrella application

A personal umbrella policy increases overall liability coverage with an extra layer of protection beyond what’s covered by homeowners and auto insurance policies. A low-cost personal umbrella protects your customers and their families from hefty judgements stemming from catastrophic lawsuits, for instance, as a result of an auto accident.

Feel free to reach out to your RLI account representative if you have any questions.

Brandi Van Pelt bvanpelt@iiabl.com

Brandi Van Pelt May 2023

Burand'sInsuranceAgencyAdvisory Volume28,Number3 April2023

Business valuations, including agency valuations, are completed based on various appraisal standards (indeed, standards do exist although not all appraisers follow them). These standards vary depending on the purpose of the valuation, the use of the appraisal, and the appraiser's professional standards. Different standards apply based upon the appraiser's professional designations and memberships. For example, the standards for valuing gems is different from the standards for valuing dental practices. The standards applicable to a CPA are different from those applicable to a certified appraiser who is not a CPA. All valuations are supposed to be based on an upfront, agreed upon definition of value before

the appraisal begins. As with insurance policies, different definitions of value also exist. In insurance you have replacement cost value, actual cash value, market value, and so on and so forth.

When appraising a business, many definitions of value exist. Typically the two most common definitions are Fair Value and Fair Market Value. It is unfortunate the terms are so similar in name because the definitions and resulting values are often significantly, not only materially, different. Both require the assumption of what a prudent buyer would do upon acquisition, including an adjustment to the ex-owners' compensation to some semblance of the IRS's "Reasonable Compensation" standard.

MISMANAGEMNENTIMPACT

The first thing that comes to mind is the need to watch the Mel Brooks' comedy, "The Producers."

What is the motivation and what are the potential issues involved when considering committed mismanagement? Often this request is associated with some form of fraud. The idea is that someone buys into a business at a deep discount with the intention to flip the business using common market standards that they think they understand, but do not. All kinds of laws and tax regulations prohibit this activity (See ESOP and estate tax rules that have been specifically designed to prevent this from occurring).

Sometimes though, the request is associated with an honest endeavor based on a seller's unwillingness to run the business or attempt to run the business well. Nonetheless, the seller wants an honest valuation that accepts that the management incompetency will be maintained post sale. This violates almost all of the business

Continued from page 33

valuation standards of which I am aware, so a formal valuation is most likely impossible. It would be an outright violation of the standards if an ESOP, estate, third-party shareholders, or bank loans are involved. Assuming the appraiser and client can come to an agreement, including a complete and total release of liability of the appraiser from all applicable standards and liabilities, it could be an interesting exercise.

To some extent, the process is much like making the EBITDA adjustments in a regular valuation, but the adjustments are not the same. For example, typically if a phantom mistress is on the payroll, their compensation is excluded in a standard valuation. With bad management, assuming all partners are in agreement regarding including the paramour, her compensation stays. Using a more common example (the mistress example is not a creative invention on my part), the owners take credit for accounts they do not service, maybe never even sold, but they are credited with those a

MISMANAGEMNENTIMPACT

ccounts. As a result they are paid as if they are servicing those accounts.

Now, let us assume the above example equals ten percentage points of unnecessary expense, not an unusual amount in agencies. Let us further assume an EBITDA multiple of 7 and a based EBITDA of 25% on $1,000,000 in revenue. In a standard valuation, the ten percentage points would be added back making the EBITDA 35% and the value would increase by $700,000 (ten percentage points on $1,000,000 equals $100,000 and multiply that by 7).

But wait! There is more. Less profitable agencies command lower EBITDA multiples, at least usually. Maybe the value goes to 6.5 x $250,000 (25% times $1 million) which equals $1,630,000 instead of 7 times $350,000, which would equal $2,450,000. The difference then is about $825,000. Incompetency is expensive.

Given a choice between competent management and standard valuation parameters or accepting incompetency as a fact, but with a willingness to accept a lower value, the former is the better choice about 99% of the time for most people, but not all. If the incompetency is intransigent, in other words, no hope exists of fixing it and no possibility exists of the buyers refusing to do the deal, then at least acknowledge the issue so the deal is affordable. When the seller insists on maintaining incompetency but also insists on a price based on competency, nothing good can result.

The best example of this situation is when the seller insists on the higher value but simultaneously insists on continuing to be paid far more than they are worth. Even if the loan payments cash flow, not enough cash will remain to enable investment in new producers, new technology, higher staff wages, and so on. The agency will come to a standstill. The new owners will go home nightly deeply frustrated.

Unfortunately, this scenario is common and frankly, it is one reason I really like the IRS's

Continued from page 34

Reasonable Compensation Rules because those regulations allow me to explain to the seller that their goals are not acceptable to the IRS which is far easier than having to tell them they are being too greedy

To each their own. When you own a business, it is your choice whether you choose competency or incompetency. It is a choice. Sometimes the choice is deliberate and sometimes it is subconscious. The owner will make a choice. Whether they make a commitment might be a different matter. Clarity is mentally beneficial regardless of the choice. No matter what some people telling you what you want to hear, incompetency has a steep price, and that price is evident when agency owners choose to run their businesses incompetently. But maybe, like with some people I know, the price is worth it to you.

Used correctly, this data can prompt real, actionable insights that lead to better financial decisions, higher retention, better recruitment, improved company culture and more.

Data-driven decision-making has become an increasingly hot topic, but the correct execution of the concept can be a challenge for companies of all sizes. One key area of focus is employee benefits data.

If used correctly, this data can prompt real, actionable insights that lead to better financial decisions, higher retention, better recruitment, improved company culture and more. But even if teams are sitting on a treasure trove of data, they may not know how to utilize it at least not without assistance from a skilled agent who can

help clients sieve through endless data and answer their questions.

If you're looking to strengthen your relationship with your employee benefits clients, here are three strategies for gathering and deploying employee benefits data to improve both your client's company culture and financial health:

1) Learn to ask the right questions. Like any good research study, data-driven decision-making starts with asking the right questions. It also involves avoiding pitfalls like mistaking correlation for causation, confirmation bias or simply placing too much emphasis on a data point that was ultimately insignificant.

The pressure to demonstrate a return on investment is pervasive in the decision-making process, so it's all the more important for the data to be verified.

Craig Stephens

Chief Revenue Officer of Selerix

An organization's HR leaders should work directly with their benefits advisors and evaluate how strongly a data point could be linked to a return on investment. Also, outcomes are calculated differently, and the process might reveal that the data they thought was valid does not apply to their organization. That can save a company from investing time and money into the wrong strategy.

2) Balance the use of data with company culture. Starting with a specific outcome in mind is key when looking to make a decision that balances employee wellness with company goals. But it's just as important to revisit the outcome to truly understand the overall impact the decision had.

Financially motivated decisions that involve adding or removing a benefit without considering company culture can have heavy repercussions on team morale and even retention. For instance, collecting and analyzing data around the question, “What benefits are currently being over or underutilized?" can help organizations make better financial decisions.

However, it's important that your client takes a little closer look at their team. Benefits, especially related to family planning, may be underutilized today and still be crucial for employee retention. It's important to know the company culture at a personal, even anecdotal level, to gauge what the impact of a decision could be.

3) Streamline data sharing across teams, and verify the methodology used by the benefits provider. Training other functions across the organization to ask the right questions about employee benefits data can help them make better decisions. When different teams are looking at data with a verified methodology that applies to their teams, it makes decision-making around budget, operations and benefits planning not just easier but more reliable.

However, methodologies from providers can differ or simply not be accessible to the user. It's important to go deeper and ask where the data comes from. The gold standard is when providers get their data verified by a reputable third party.

Getting over the initial blocker of not knowing how to utilize employee benefits data not only helps make data-driven financial decisions but also fosters a sense of trust and loyalty in an organization.

Craig Stephens is chief revenue officer of Selerix.

'GETTING THE MOST OUT OF THE TOOL' IS THE TOP TECH CHALLENGE FOR INDEPENDENT INSURANCE AGENCIES

Will Jones

IA Editor in Chief

As agency revenue increases, so does the challenge of getting the most out of the tool, rising from 62% of agencies that generate $500,000 to $1 million up to 76% of agencies that generate between $3 million and $5 million.

Recently, Catalyit published “The State of Tech in Independent Insurance Agencies." By partnering with 25 Big “I" state associations, Catalyit surveyed independent insurance agencies across the country to learn about their current tech stack, as well as what they think about the effectiveness and appropriateness of each tool.

The report surveyed agency staff from a spectrum of businesses that varied in terms of the number of employees from 1 to 100 and total revenue from less than $500,000 to more than $5 million. It covered both the amount of usage and satisfaction of tools that independent insurance agencies use every day. Nearly 500 agencies participated in the survey.

"Technology is no longer just a backroom activity that keeps computers running," the report said "Tech is a profit center. What software agencies use, what tools, integrations, processes, and data agencies harness are all critical in driving profit. With the right tech, your agency will thrive."

While the possibilities are virtually endless for agencies to supercharge their business with the right technology and, more specifically, the right combination of technology, agents are facing a number of challenges.

As an agency grows, the average number of technology platforms they use increases. Agencies with less than $500,000 in revenue use an average of 6.2 platforms, which rises to 8.9 for agencies that generate $1 million to $2 million, and 11.7 for and more than $5 million in revenue, according to the report

However, scaling provides unique technological challenges. Between “finding the right tool," “implementing the tool," and “getting most of the

TECHCHALLENGE

tool," the latter was far and away the biggest challenge, according to the report. For agencies with less than $500,000 in revenue, half of the 167 respondents in that category said it was the biggest challenge.

But as an agency's revenue increases, so do challenges for getting the most out of the tool, rising from 62% of agencies that generate $500,000 to $1 million, up to 76% of agencies that generate between $3 million and $5 million. Meanwhile, “finding the right tool" was a challenge that is most heavily experienced in the lower revenue categories.

“There is a challenge in finding the tool, but a lot of agencies have already chosen the tools that they're using and maybe they've chosen multiple tools that overlap," explains Steve Anderson, CEO and co-founder of Catalyit. “There's more of a focus now on not just what tech is out there, but making sure they're maximizing what they already have that's what we call maximizing their tech stack."

Continued from page 38

Meanwhile, an agency management system (AMS) is vital for managing daily agency operations. From tracking client interactions and policy administration to tracking marketing and sales activity, an AMS offers a unified platform that impacts all aspects of an agency.

Applied Epic is the most popular system, according to the report, which illustrates Applied and Vertafore's dominance in this area of the market. It does also note that HawkSoft is a cost-effective option for smaller agencies.

Further, compared to the results of last year's report, HawkSoft saw significant growth among agencies with revenue under $500,000 and Applied Epic experienced a 22% increase among those with $3 million to $5 million in revenue. The report explores nearly every aspect of independent insurance agency tech. From accounting and agency compliance to chatbots, password managers and website development. Also, as new technology tools such as generative artificial intelligence continue to develop, many of

TECHCHALLENGE

the tech solutions mentioned in this report are expected to experience significant improvements in the coming years.

The report showed that more agencies are using marketing automation platforms with a 15% increase year-over-year for email and text marketing, prospecting, client retention, prerenewal processes, cross-selling, and up-selling.

“There are more and more stories coming out about agencies having success with marketing," Anderson says. “[Technology] helps their client have a consistent experience and these tools allow their staff to be able to be more efficient, providing that consistent quality experience."

“A big problem with agencies over the years is they just don't follow up on all the work they're doing. It's what I call 'follow-up failure,'" Anderson continues. “But they shouldn't have to remember to, and that's what computers and automation can help with. We're just seeing more agencies adopt and realize how these tools can help them provide a consistent quality service experience to their clients."

For decades, agents have experienced challenges when integrating technology into existing systems and ensuring they work harmoniously with their carrier partners' systems. This year, Catalyit gauged agents' perceptions of how well these partners support them. The top 10 most positively ranked companies included eight regional carriers and two national carriers.

“Over the years, there's been lots of conversation about agents and carriers and how they work together, and what we're trying to do is put some actual numbers around that," Anderson adds.

“How satisfied are agents with carriers and what can agents, carriers and the vendors do to improve the ecosystem, all in service of the policyholder, the agency customer, and the carrier policyholder."

Will Jonesis IA editor-in-chief.

Jason Walker President Agency Revolution

When harnessed properly, the potential for insurance agents to utilize artificial intelligence in their marketing strategies is immense.

Artificial intelligence (AI) fuels unforgettable action sequences in “The Terminator," sentimentality in the children's flick “WALL-E" and a worst-case scenario in “2001: A Space Odyssey." But in real life, AI when harnessed properly provides opportunity and a competitive advantage.

The potential for insurance agents to utilize AI in their marketing strategies is immense. Let's consider what AI is and its implications for the industry.

The Rapid Rise of Generative AI

Generative AI, or technology that automates the creation of written text and imagery, is one of today's leading topics of conversation. With its quick adoption in seemingly every industry imaginable, tech visionaries such as Elon Musk and Steve Wozniak have signed an open letter addressed to AI labs

CHATGPT

requesting a temporary hold on the evolution of AI systems until their implications are addressed although Musk is still developing Twitter's own AI program, according to Forbes.

One of the most well-known examples of generative AI is ChatGPT. OpenAI, an AI-focused research lab, developed ChatGPT using a large language model to create enriched text-based responses from user-generated prompts.

ChatGPT's “intelligence" is only as strong as its ability to retrieve and organize the context of publicly available content, as well as apply the context supplied by a user in the interface's prompt.

While many of us have used the tool to create funny stories and poems about our circle of friends, family and colleagues, ChatGPT's true power can be realized through practical applications in business.

Continued from page 41

It is easy to imagine risk associated with any topic, and generative AI without parameters can take us down a multitude of “what if" rabbit holes. When we focus and consider generative AI like ChatGPT, insurance agents can begin thinking of rules or parameters that make it a viable solution for the agency.

How to Use ChatGPT to Assist Your Agency's Marketing Efforts

The work of an agency requires discipline, timeliness, insurance knowledge and constant communication. Whether any members of the agency staff possess professional writing skills, they're necessary when conducting day-to-day activities, especially when marketing the business to prospects and clients.

The marketing media and forums are diverse Facebook, LinkedIn, agency websites, blogs, press

CHATGPT

releases and paid advertisements to name a few but with ChatGPT, they can become manageable.

Below are three immediate areas that can benefit from the drafting capabilities of ChatGPT.

1) Pipeline prospecting. Agencies generate leads through multiple sources, and managing the opportunities is a full-time job. There is repetition of certain sales activities that can benefit from a formulaic approach to communication.

Using ChatGPT's prompt to enter the agency's brand voice, a description of the sales stage and the intent to sell the prospect based on the appropriate line of business, agents can create a first-draft message for each leg of the nurturing journey that provides a nearly complete email and text communication to the audience.

The oversight and authority of the agent's expertise is still paramount in the process, but creating the prospect communication is assisted by AI.

2) Social media posts. Building a social calendar and posting timely content are not new concepts to agents. However, adding personalization from the agency's voice is often a missed opportunity. Instead of introducing an article with a personalized social caption that announces the agency's point of view, agents often default to hurriedly sharing the article only. This results in low audience engagement and a premature belief that social selling is not a viable strategy.

With ChatGPT, agents can prompt the tool to summarize an article and add appropriate hashtags, emojis and a thought-provoking question that keeps the audience captivated and interactive on the post. ChatGPT's summary is a first draft that agents can edit, but the initial creation rewards users with time.

Notice the recurring theme of “first draft." When agents control the outputs by generating the prompts based on their business intentions, then the guide rails for the agency will be established.

Continued from page 42

3) Marketing automation. Thanks to marketing automation technology that connects with and triggers messaging from the policy activity in agency management systems, agents can work with marketing sequences and client segmentation to cross-sell and renew their existing books of business As the agency grows and client books evolve, there is always a need to extend the breadth of communications so that messaging keeps up with the changes in the market.

ChatGPT is a valuable resource to build the first draft of new messaging templates Agents can set up the prompt with specifics about the client segment, the required value proposition and the intended volume and length of messages in the sequence. ChatGPT will return suggested content, and the agent is steps closer to completing the work in less time than beginning from nothing

CHATGPT

Agencies deserve assistance with their marketing practices, and ideally marketing solutions providers already offer a dose of human counsel along with their technology platforms. After all, that is the tried-and-true client service formula that agencies have deployed for decades.

Even with the best solutions partners, there are moments when agents require a quick first draft of written material to publish on social or via email. In those moments, generative AI tools like ChatGPT come in handy.

Continued from page 43

Jason Walker is president of Agency Revolution, the leading provider of digital marketing solutions for the insurance industry.

GET YOUR FEET WET SELLING SPECIALTY INSURANCE

Learn five tips to dive into this profitable market and reel in more business from existing home and auto accounts.

Specialty vehicle owners make excellent customers because they care about protecting their lifelong passions their boats, motorcycles, recreational vehicles (RVs), all-terrain vehicles (ATVs) and so on. With complex insurance needs, they're naturally coverage focused and value an independent agent's guidance.

In fact, Safeco and Liberty Mutual research indicates these customers offer nearly twice the average written premium per household, with higher retention and a better loss ratio compared to home and auto customers. Even better, you don't need to be a gearhead or avid angler to build relationships among this coveted demographic.

Where to Start

Your current home and auto customers make a great starting point for specialty leads There's a good chance many of them own one or more specialty vehicles that could benefit from tailored protection. You see, many specialty vehicle owners end up with policies through 1-800-number carriers if their vehicles are insured at all.

Liberty Mutual & SafeCo Insurance

SPECIALTYINSURANCE

Once you take care of a customer's immediate need for a home or auto quote, don't stop there. Ask also about what other exposures they might have. As their trusted advisor, you're doing them a service to dig deeper and ensure their prized possessions are protected.

Use these five tips to uncover their needs, guide them toward the right coverage and deepen your relationship.

1) “Tell me about all the motorized vehicles you own." Do they have any motorcycles, boats, RVs, campers, classic cars, ATVs, utility terrain vehicles (UTVs), golf carts or micro-mobility devices, such as e-bikes or scooters? Find out what coverage they have, if any they may not even have considered insuring their specialty vehicles. Explain the benefits of additional coverage, like liability protection while they're using their vehicle, or coverage for custom parts and gear.

2) Every time you insure a truck or SUV, ask, “Does it have a trailer hitch?" If it does, they're likely hauling something you can insure. Again, find out what it is and explain the benefits of protecting their treasured toys. Remember that asking about their hobbies or how they spend their weekends provides an opportunity to protect something they really love. They'll appreciate you're looking out for them and educating them on coverage options.

3) Explain the benefits of bundling with a single carrier. While sometimes you might want to split the account if there are substantial savings, generally speaking, bundling with a single carrier is beneficial to the customer. Make sure they're aware that bundling can minimize risk, thanks to complementary coverages. Explain how they can potentially reduce their overall insurance costs in the long run through discounts and other benefits, like Safeco's single-loss deductible. Let them know bundling also simplifies their insurance fewer forms and bills to deal with and a single point of contact for claims.

Continued from page 45

4) It's OK to quote a specialty vehicle as part of a package, even if they didn't ask. Most customers won't object to you quoting a package along with their immediate need for auto, home or what have you. It shows you're looking to build a relationship with them and you're taking a holistic look at their coverage needs. Even if they don't choose to buy specialty coverage right away, they'll likely value the extra insight and advice.

5) Remember that cross-selling specialty is often a process, not a one-time event. If you offer to cover their specialty vehicle and they say no, don't push; take notes and follow up at renewal or whenever makes sense for your business. After all, a no today doesn't mean no forever. No just means “not right now." The more often you offer specialty vehicle coverage, the better your close rate will get.

SPECIALTYINSURANCE

Strengthen Your Book With Specialty Insurance

The expertise, coverage and discounts you offer as a trusted advisor go a long way toward building a lasting relationship. Learn to meet the needs of specialty vehicle owners and you can build a solid book of loyal clients.

Want to go deeper with specialty? Become an expert in specialty insurance programs and you'll better recognize opportunities to cross-sell and improve your retention.

Continued from page 46

IIABL 2022-2023

BOARD OF DIRECTORS & OFFICERS

PRESIDENT, MICHAEL SCRIBER

PRESIDENT-ELECT, ARMOND K. SCHWING

SECRETARY-TREASURER, BRET HUGHES

NATIONAL DIRECTOR, JOHNNY BECKMANN, III

PAST PRESIDENT, DONELSON P. STIEL

YOUNG AGENT REPRESENTATIVE, KRYSTAL GATHE

ANN BODKIN-SMITH

MATTHEW DEBLANC

CHRISTY DESOTO

ROB W. EPPERS

MATT GRAHAM

CHRISTOPHER S. HAIK

STUART HARRIS

ROSS HENRY

CHARLES H. LEBLANC

CRAIG MARTEL

LYDIA MCMORRIS

A. EUGENE MONTGOMERY, III

JOE KING MONTGOMERY

HARTWIG "ROBBY" MOSS, IV

ROBERT LOUIS PALMER, JR.

RANDY PERISE

ROBERT G. RIVIERE

ROBERT STONE

Scriber Insurance - Ruston

Schwing Insurance Agency, Inc. - New Iberia

Hughes Insurance Services, Inc - Gonzales

Assured Partners - Metairie

David H. Stiel, Jr. Agency - Franklin

HUB International Gulf South, Ltd. - Baton Rouge

Thomson Smith & Leach Insurance Group - Lafayette

Continental Insurance Services - Marrero

1st Insurance of Marksville - Marksville

Risk Services of Louisiana - Shreveport

Lincoln Agency - Ruston

Higginbotham Insurance - Lafayette

McClure, Bomar & Harris, LLC - Shreveport

Henry Insurance Service, Inc. - Baton Rouge

Bourg Insurance Agency, Inc. - Donaldsonville

Insurance Unlimited of LA, LLC - Lake Charles

Alliant Insurance Services - Baton Rouge

Community Financial Insurance Center, LLC - Monroe

McGriff Insurance Services - Monroe

Hartwig Moss Insurance - New Orleans

Insurance Underwriters, Ltd. - Metairie

Blumberg and Associates - Ponchatoula

Riviere Insurance Agency - Thibodaux

Stone Insurance, Inc. - Metairie