Kentucky IA - November/December 2017

November/December 2017

Together...

We’re making a difference to our members, to our agents, and in our community.

200 Executive Park, Louisville, KY 40207 502.894.8484 | 800.367.5372 | www.kesa.org

What's

Inside

Page 20

Contents

9 A Visit with the Law Firm (Part One) 12 Convention Memories 18 Honoring Our Past Presidents & Chairs

Page 25 Page 29

19 Cheers to 20 Years 20 An Interview with Peggy Porter 25 Clients for Life: From first sale to Long-term Relationship 29 Home is where the Smart Is

In Every Issue The Kentucky IA is the official magazine of the Independent Insurance Agents of Kentucky, and is published bi-monthly.

Editorial offices are located at 13265 O’Bannon Station Way, Louisville, Kentucky 40223.

Telephone:(502) 245-5432 Email: iiak@iiak.org Fax: (502) 245-5750 The Kentucky IA welcomes all advertising and editorial submissions. Inquiries for advertising, news releases and editorial contributions can be directed to Nikki Robins at the editorial office address or via email at nrobins@iiak.org

4 From the Chair

33 Upcoming Events

5 DOI News

34 Advertiser Index

6 Education Calendar

34 Classified Ads

27 Industry Partners

34 Social Media Links

Mission Statement The mission of the Independent Insurance Agents of Kentucky is to be the preeminent advocate for Kentucky Independent Agents and support their business and professional development needs.

www.iiak.org | November/December 2017 | 3

Chair

Officers

From the

Michael G. Johnson, CIC

Chair, Lexington

859.233.1461 Aaron LaRue

Chair-Elect, Bardstown

502.348.0050 Ray A. Robertson, CIC

Vice Chair, Mt. Sterling

859.498.3410 James D. England, AAI

Treasurer, Pikeville

606.437.7361 Stephen R. Kinkade, CPCU, AAI

National Director, Leitchfield

270.259.5465 George L. “Chip” Atkins, III

Immediate Past Chair, Louisville

502.585.3600

Directors Allen J. Crawford, CIC, CSRM

Somerset, 606.679.6311 Kevin T. Desmond

Bellevue, 859.491.5100 Whitney L. Floyd, CISR

Henderson, 270.827.3543 Barrett H. “Skip” McGaw, II, CIC

Madisonville, 270.821.3122 Danny S. Neely, II

Emerging Leader Chair, Winchester

859.744.3857 Chris J. Wiseman, CIC

Bowling Green, 270.781.2020 Laura Yount, CIC, CISR

London, 606.878.0100

Staff

I am humbled that you have put your trust in me, a Yankee from Cleveland, Ohio, to lead the Independent Insurance Agents of Kentucky into its 122nd year.

First, I would like to thank some people who have played a big part in putting me in a position to be successful: my wife, Ali, who gives me the direction, drive, and support to do whatever I choose to take on; my sons, Davis and Donovan; my parents providing me endless possibilities to be successful; Sandra Blain, for allowing me to spend time outside of the agency business to play a part at IIAK; everyone at Al Torstrick Insurance who have supported me and help get things done even if I can’t be there.

I would also like to thank my father-in-law, Al Torstrick, who asked me to join the agency in 2000.

He also is the one that encouraged me to participate in the Young Agent program which started me down the path to where I am today. Thank you to the IIAK staff, who are dedicated to making our memberships as beneficial as possible. They are the real reason this association continues to be successful. Finally, I would like to thank Peggy Porter for her dedication to our industry and our association. It is because of her fiscal responsibility and industry leadership that I am able to report that our Association continues to remain financially strong and admired across the country.

IIAK serves 245 member agencies with an additional 71 member branches. This number is changing every year. It’s easy to point the finger at mergers and acquisitions but there are new insurance agencies opening all the time. There are also agencies that haven’t been able to experience the benefits of IIAK. This year we are going to focus on what it takes to reach these new and untapped agencies. Tara Purvis has started this process by visiting our current members and stopping into nonmember offices so that IIAK is more engaged and asking what these agencies need and how IIAK can help.

As you look around the entire country, it’s no secret that the independent insurance industry is getting older. But the industry isn’t necessarily getting smaller. There are plenty of young, hungry, and talented young people out there. It is up to us to show them the benefits of belonging to and becoming active in IIAK. We can offer them income, professional, and personal growth. When I attended my third convention at the Griffin Gate in Lexington, I was approached by Jordan Clarke, the YA Chair at the time. He ASKED me to become more active. I had the freedom and encouragement from my father-in-law to participate, but it wasn’t until I was asked did I take advantage of it. Thank you, Jordan.

I encourage you to look around your agency and if you have a young professional in your office ASK them to attend events. There are so many benefits IIAK offers, maybe a fresh set of ears will hear what opportunities are not being utilized.

Peggy P. Porter

President & CEO Katie M. Freshley

Education & Events Director Amy Good

Administrative Assistant

There are great opportunities for this association to continue for another 121 years but work is in front of us.

We will do it one step at a time. Let’s take that first step

by ASKING an Emerging Leader, non-active member, or non-member to attend an event.

Tara T. Purvis

Marketing Director Nikki S. Robins

Communications Director Kristie Weyer, CISR

Insurance Services Director

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Michael G. Johnson, CIC

News Department of Insurance

We are fast approaching the end of another year as 2017 comes to a close. The holiday season is upon us! I hope that everyone had a wonderful Thanksgiving spent with family and friends.

When we take time to reflect, we truly have much to be grateful for.

Reviewing this past year at the Department, there have been many positive things taking place. I have been grateful for the opportunity to come on board as the Commissioner and to welcome Patrick O’Connor and Tony Butcher as Deputy Commissioners of Policy and Administration, respectively. This year as a Department, we underwent a reorganization as a result of HB 242 of the 2017 Regular Session. The new Division of Administrative Services was created and Amanda Reid was named director. In addition, the new Division of Insurance Product Regulation was formed as the result of a merge between the Health and Life and Property and Casualty divisions. Tony Butcher continues to serve as the acting director of this division.

The reorganization has created greater collaboration and efficiency between divisions. The Department has seen great team cohesion this past year as we continue to strive to work and serve the people of the Commonwealth and create a healthy environment for the insurance industry.

It is redundant to say a big topic and focus this year was the health insurance market – especially the individual market. The Department worked very hard to ensure that there would be coverage options available for all Kentuckians. For the 2018 plan year, Kentuckians will have the option of Anthem or CareSource depending on their county of residence within the state. Open enrollment began November 1st and continues through December 15th. Due to Anthem’s service area reduction from 120 counties in 2017 to 59 in 2018, former Anthem policyholders will be eligible for a special enrollment period that will continue through March 31st. Rates were revised following the initial filings.

After internal and external discussions, all issuers agreed and did file rates assuming no CSR payments would be made, and rate increases applied to silver level plans only. These rates were reviewed and found to be actuarially justified given each issuer’s unique position in the marketplace and changes in anticipated enrollment and claims. We continue to monitor the federal health insurance policy developments for any implications that may be felt in our state due to the ever-changing and uncertain environment.

In other areas, the Division of Financial Standards continues to oversee ongoing examinations of our domiciled entities. The Department was accredited by the NAIC in 2015 and will be up for accreditation again in 2020. Consumer Protection has been busy this year. From January 1, 2017 to November 7, 2017 there have been 4,547 new complaint files assigned with a total amount of $3,294,966.65 in recovery so far.

The Department continues our review of all regulations in the Insurance Code as part of Governor Bevin’s “Red Tape Reduction” Initiative. The Department has taken action on many different regulations including amendments to update a process, clarify language, or ensure requirements conform to statutory authorization. Unnecessary or burdensome regulations have been entirely eliminated through repeal. As the Department continues this progress, we welcome feedback as we go through this process.

Outreach and the use of social media has been an effort the Department has begun to focus on and work to enhance. In today’s age, communication has been taken to a whole new level with the use of different social media avenues, and we as a Department want to utilize the benefits of this to the fullest potential. Throughout October and November, the Department released multiple Facebook and YouTube videos to update consumers on issues in the individual health insurance market. We anticipate continuing this endeavor to provide quick and direct information to consumers as various insurance issues arise. Be sure check out and follow our Facebook page to stay informed in the year ahead.

Please never hesitate to contact us if I or any of my staff can be of any assistance to you. I want to wish you all the Merriest of Christmases and Happiest of New Years!

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Continuing Education

IIAK has a range of classroom and webcast continuing education courses as well as valuable designation seminars.

See below for our latest offerings.

ONLINE COURSES VIA ABEN: Date/Time

Seminar Name

January 29 @ 1 pm

Agency Management Based E&O and Ethics

3

January 4 @ 3 pm February 1 @ 3 pm

Annuity Basics and Where They Fit

1

January 17 @ 11 am

Business Auto Claims That Cause Problems

2

January 11 @ 11 am February 8 @ 11 am

Business Fraud Protection

1

January 5 @ 11 am February 8 @ 11 am

Certificates of Insurance – Emerging Issues and Other Stuff that May Scare You!

3

January 19 @ 10 am

Commercial Lines Claims That Cause Problems

2

January 17 @ 10 am

Commercial Property Endorsements That Can Make You Money!

2

January 23 @ 1 pm February 22 @ 1 pm

COPE – Property Underwriting and Effective Loss Control

2

January 12 @ 2 pm February 13 @ 2 pm

Data Privacy Insurance

2

January 3 @ 10 am February 7 @ 10 am

Directors and Officers Liability Insurance

2

January 8 @ 1 pm February 12 @ 1 pm

Double Trouble - Certificates of Insurance and Business Auto Endorsements

2

January 18 @ 11 am February 6 @ 9 am

E&O Risk Management – Meeting the Challenge of Change (6 hour course)

6

January 23 @ 10 am

E&O Risk Management – Meeting the Challenge of Change (Part 1)

3

January 25 @ 2 pm

E&O Risk Management – Meeting the Challenge of Change (Part 2)

3

January 11 @ 3 pm February 8 @ 3 pm

Estate Planning Basics

2

January 31 @ 2 pm

Ethics and Business

3

February 27 @ 1 pm

Home Based Business Exposures

2

January 4 @ 11 am February 1 @ 11 am

Hot Topics in Personal Lines

2

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CE Credits

Date/Time

Seminar Name

CE Credits

February 21 @ 2 pm

Liability Issues to Worry About – Indemnity Agreements and Additional Insureds

2

January 23 @ 10 am February 16 @ 10 am

Long Term Care Insurance

2

January 18 @ 11 am February 15 @ 11 am

National Flood Insurance Program Basic Course - 2016

3

January 26 @ 2 pm February 23 @ 2 pm

Personal Fraud Protection

1

January 10 @ 11 am

Personal Lines Claims That Cause Problems

2

January 26 @ 11 am February 23 @ 11 am

Professional Ethics in the Insurance Industry

3

January 11 @ 2 pm February 8 @ 2 pm

Property & Liability Concepts - Comp. Cov. Series

2

January 23 @ 9 am February 27 @ 9 am

Rental Cars: More Than Meets the Eye

2

January 8 @ 1 pm February 12 @ 1 pm

“Shake, Rattle, and Roll with it- Earthquake Basics”

1

January 29 @ 11 am February 26 @ 11 am

Those Kids and Their Cars!

2

January 30 @ 2 pm February 27 @ 2 pm

Top 5 Life Insurance Uses

2

January 2 @ 3 pm February 7 @ 3 pm

What you Need to Know about Employment Law & Coverage

2

January 17 @ 10 am February 15 @ 10 am

Workers Compensation Beyond the Basics

3

Veteran Licensing Program All Kentucky veterans and their spouses can receive their Kentucky Insurance License and help finding a career in insurance, FREE OF CHARGE! Contact IIAK for details 502-245-5432 or iiak@iiak.org

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8 | www.iiak.org | November/December 2017

Commercial | Personal | Farm-Ag | Specialty

A Visit with the Law Firm (Part One) By: Rick Pitts “Sarah, this really irritates me. I don’t want to have to be here, and I don’t think we should have to be involved in this.”

“Well, a hearty good morning to you too, Mr. DeClair.”

Sarah Comfore of the law firm Comfore & Patridge greeted her longtime client, Andy DeClair of the DeClair Insurance Agency.

“I’m sorry, Sarah, I don’t mean to be rude,” Andy said.

“You know that ever since this errors and omissions lawsuit was filed, I’ve had a few sleepless nights. I was just really pleased when the carrier was willing to let you handle the defense.”

“I understand, Andy. I have experience with these types of suits, and, as I said on the phone, your agency has had a terrific record with regards to errors and omissions lawsuits. If I remember from our last conversation about records retention, you’ve got more than 50 producers in three different locations.” Sarah smiled, “And let me remind you once again that even though we are located here in lovely Quincy, Kentucky, we aren’t immune from errors and omissions lawsuits.”

Andy sighed and said, “I know, and I know you’re right Sarah. But I’ve been thinking about this and I really don’t think that our agency did anything wrong. Look, the guy got notice of cancellation. The fact that we didn’t call him just that one time shouldn’t mean that we are liable for the loss.”

Sarah shifted around a bit uncomfortably. “Andy, we’ll see about that. Let’s take this from the beginning and why don’t you tell me exactly what happened.”

“This is that daggone amusement park that’s on the bypass outside of town. Shoot, I don’t even know if you could call it an amusement park. It’s really just a miniature golf course, an arcade and a glorified root beer stand.

We’ve insured this place through about three different sets of owners.”

Andy looked away. “We didn’t know the new ownership very well when the place sold last year. I suppose the alarm bell should have gone off when the new ownership stripped the insurance package down to its bare minimum. They kept the property coverage in place, but they asked us if they could shut off the liability coverage when they’re closed for the winter.”

“That’s not completely unusual for places like this, is it?”

“No, not completely. It’s at least part of the underwriting consideration for most of the carriers. But that really isn’t the problem in this case. We had these guys on a quarterly billing cycle and over the past six quarters, they were late on two payments and then missed two more payments completely so the policy actually went into cancellation both of those times.”

“I understand, Andy.”

“Ted’s the producer who was handling this account. He was trying to provide good service and trying to forge a relationship with these guys, so when we got the duplicate notice of cancellation from the carrier, he called and asked them words to the effect of ‘hey, what’s up?’ or ‘you understand that you’re going to lose your insurance, don’t you?’” www.iiak.org | November/December 2017 | 9

Andy continued, “This usually got the payment made but they did continually tell us that cash was tight and sort of apologized half-heartedly about all sorts of stuff.”

“So, just as they were getting ready to shut down for the winter months, it happened again. Ted had been out of the office and didn’t get a call made when the policy went into cancellation. That’s when the loss happened.”

Sarah asked, “What was the loss?”

Andy said, “It was a break-in, Sarah. The police report said that they busted in through the back door, smashed up the cash register and didn’t get any cash. The burglars apparently tried to take out the ATM machine and tried to take a couple of the arcade games, but they couldn’t get them out the door. They were all smashed up bad and the burglars also vandalized the place pretty bad too. All in all, it looks like it could be a $20,000 to $30,000 loss.”

Sarah was a bit surprised and wrote notes furiously.

“Our problems started when the carrier – and this is the folks over there at Imperial Fire, a really good carrier of ours – denied the loss. That was correct, because the policy had been canceled and, quite frankly, I think Imperial Fire was done with the whole cancel and immediately reinstate scenario. Sarah, I understand why these clowns didn’t sue Imperial Fire. But why did they sue us?”

Sarah said, “Let me do some explaining here. This may take a while so get comfortable. First, we’ll have to check the paperwork on this, but it sounds like every time there was a nonpayment of premium, Imperial Fire issued the appropriate notice of cancellation.”

Andy jumped in: “Sarah, I’m sorry to interrupt soon, but yes, they did. In fact, it was our receipt of the second copy of the notice of cancellation that prompted Ted to give these guys a call…when he did.”

“That’s not surprising at all, Andy. It’s a fairly common practice and its especially common in the arena of…

Shall we say… Smaller and less sophisticated commercial accounts.”

Andy looked quizzically at Sarah. “Okay, so we’re not alone. That makes me feel at least a little bit better.

But why does doing that create any sort of an exposure for us as an agency? All we’re doing is following up 10 | www.iiak.org | November/December 2017

with the insured after they’ve already gotten a notice of cancellation. Cancellation initiated by the insurance company is really in the insurance companies control.

I just don’t get it. Sarah, we’re just trying to be helpful here. I don’t think we have any responsibility to follow up on a notice of cancellation. It’s just trying to do a nice thing for the insured and also maybe it gives us a little bit of a service advantage against our competition. Why should we be punished for doing that?”

Sarah jumped in: “Here’s where things get legal. The basic premise of errors and omissions lawsuits of this nature is something known as the gratuitous assumption of a duty.

I think, for the most part, you’re absolutely right about not having a basic legal duty to follow up on or call your insureds when the notice of cancellation for nonpayment of premium is issued. However, the theory is that when you start doing it, you have the responsibility to continue to do it because the insured is relying on it.”

Andy looked perturbed. “They’re saying that because Ted made a few calls along the way that we are responsible as an agency for this loss? That doesn’t seem right to me, and, if it is right, we’ve really got some work to do inside the agency.”

“I have reviewed the complaint they filed, and it sure seems to me that this is the theory that the insured is pursuing. We still have some defenses. For instance, there may be a significant argument that some or all of the loss wouldn’t have been covered in any event. The bottom line is that we have important arguments to make, so I don’t want you to despair. What I do want you to know is that this is a theory that ‘walks and talks’ so to speak, meaning that there is at least a theoretical validity to it.”

Andy thought for a few seconds and then said, “Okay, I think we’re going to have to revisit some internal procedures because of this.”

Sarah managed a smile as she said, “I agree Mr. DeClair.

That should be the subject of our next meeting. My schedule is tight for the next few weeks, but I would prefer that we do this sooner rather than later.”

(In the next issue, Sarah and Andy visit again…)

Richard S. Pitts, IIAK’s General Counsel is also part of a member benefit, First Call Free Legal.

Members receive up to a 30-minute phone consultation on an insurance or agency-related matter once a year at no charge. Contact IIAK for more information.

More than 260 attendees joined IIAK at The Brown Hotel for the 121st Annual Convention and Trade Show in Louisville November 8-10.

Chip Atkins then took to the podium to present Chair Awards to Katie Freshley and Peggy Porter for their help during his year as Chair.

Many agents and company representatives began their convention festivities with an afternoon of horse racing at historic Churchill Downs. The 4th race was the Kentucky Trusted Choice Classic and IIABA Chair-Elect, Joe Leahy, was on-hand to present the trophy.

The next presentation was from Make-A-Wish®, the chosen philanthropy for Trusted Choice. This year Trusted Choice has committed more than $412,000 to the foundation and more specifically $10,000 for the Kentucky Chapter. Kentucky Regional Director and “wish dad”, Kevin Lerme shared the positive impact that granting wishes has on children with life-threatening illnesses. He spoke of the impact IIAK funds has made on a local child who’s wish was to visit Disney. More than $800 was raised that morning for the charity, and as with all the money raised in Kentucky, it will stay in the state to grant more wishes. If you would like to donate to the Kentucky chapter of Make-A-Wish, please contact Lisa Reeves at lisar@makeawishky.org.

Convention officially kicked off Wednesday evening at the Opening Reception and Trade Show in the Crystal Ballroom where exhibitors and attendees alike enjoyed their time. After a break for dinner in downtown Louisville, the evening concluded with a dessert reception sponsored by Liberty Mutual Insurance Group and Safeco Insurance.

Thursday started bright and early at the Welcome Breakfast and General Session. Chair Chip Atkins introduced your leadership for 2016-2017 and recognized members who finished their terms on the Board of Directors: Eric Harden, Sharon Hill, Crystal Reid, and David Houk.

IIABA Chair-Elect Joe Leahy followed, informing us of the newest happenings with IIABA and encouraging members to keep up the good work in supporting state and national PACs. He also challenged the membership to take advantage of the resources made available to them through IIAK and IIABA.

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After breakfast, attendees took part in an exclusive meeting with legislators that make up the 2017 Interim Committee on Banking and Insurance. This is the first time since 2009 that the convention has hosted a meeting of this kind. Members connected with their legislators and discussed important issues for the membership to particpate in the legislative process.

There was discussion on Kentucky’s No-Fault automobile law, better known as PIP (Personal Injury Protection), a conversation with the Department of Insurance about the Medicaid waiver, an update from incoming NAIC President, Julie Mix McPeak and an NCOIL update by Rep. Steve Riggs

As with all Conventions, we never leave our guests and spouses without something to do. This year, 15 people enjoyed a mixture of wood, wine and power tools at Pixie Dust where they created a special piece of decor to take home.

Meanwhile, back at The Brown, Commissioner Nancy Atkins spoke during lunch regarding the latest issues affecting Kentucky and the insurance industry at large.

After lunch, attendees met back in the Gallery Ballroom to hear Matt Francis from the FBI discuss the emerging cyber threats that are attacking our society and our industry and how they can protect themselves and their agency from falling victim to these scams. David Pieffer from J.D. Power shared the findings from a recent survey of customer experience and satisfaction in key areas of the property and casualty insurance business.

That evening, everyone gathered back in the Crystal Ballroom for a cocktail reception and TWO great events to support our industry. More than 29 items were up for bid during the silent auction. IIAK partnered with mobile silent auction company Qtego in order to give everyone a chance to have their bids at their fingertips. Another exciting event added to this year’s Convention was a Wine & Bourbon Toss. This ring toss style game not only gave participants the chance to walk away with their favorite spirit. Between these two events, over $11,000 was raised for Kentucky Agents Foundation. A huge thank you to the Emerging Leaders Committee and everyone who participated!

Next was the Leadership Dinner that kicked off with the ceremonial “Passing of the Gavel”, which recognizes past association Presidents and Chairs in attendance, and the swearing in of new leadership.

Michael Johnson, CIC of Al Torstrick Insurance Agency in Lexington was inducted as our newest Chair. Installed alongside Johnson were Aaron LaRue of LaRue-Carey Insurance Group in Bardstown as Chair-Elect and Ray Robertson, CIC of Limestone Agency, Inc. in Mt. Sterling as

By: Nikki Robins

Vice Chair. Whitney L. Floyd, CISR of Field & Main Insurance Services in Henderson, and Chris J. Wiseman, CIC of Van Meter Insurance Agency in Bowling Green, and Danny Neely of Neely & Wake Insurance Agency, Inc in Winchester were also appointed as members of the 2017-2018 Board of Directors.

After officially being handed the gavel, Johnson addressed attendees with his plans for his year as Chair.

(Don’t miss our January/February issue featuring Mike’s Q&A interview!)

Next, Steve Kinkade took the stage to present the E. Starling Holloway award. This award is presented to honor an individual who has made a significant industry contribution, enhanced the ideals and reputation of the insurance industry and made a significant contribution to their state. Peggy Porter, President and CEO was presented with this prestigious honor. Peggy announced her retirement earlier in the year and her last day with IIAK will be January 31, 2018. A video montage of well wishes from her peers and colleagues was shown as a special surprise. Following the Leadership Dinner, guests were invited to a special dessert reception honoring Peggy.

To round out the night, many ventured out to the Sports and Social Club for a night of fun and bowling.

Friday morning, the Emerging Leader Committee inducted their newest Chair, Danny S. Neely, II of Neely & Wade Insurance Agency in Winchester. Eric Harden www.iiak.org | November/December 2017 | 13

from Insuramax in Louisville was presented with the first Michael D. Hepp Award. This award was formerly known as the Outstanding Young Agent of the Year but this year we changed the name to honor an individual that has done more for young agents not just in our state but across the United States.

The conference wrapped up with Rick Pitts and his threehour course, Studies in Ethics: A Hippocratic Oath for Insurance Professionals, which satisfied attendee’s ethics credit.

Of course, none of this would have been possible without the help and support of our Industry Partners. Thank you to all attendees, company representatives and all of our generous sponsors.

Michael Hepp served as the Young Agent Chairman for IIAK, as well as the National Young Agent Chair for IIABA in 1975. He was known for his outstanding leadership, passion for the industry and his way of bringing people together. Hepp’s exceptional leadership reached beyond our state when during his time as Chair the national organization was having discussions about doing away with the young agent programs and national committee. After learning this, Hepp made an appointment with the National President of IIABA and flew to Arkansas to voice his opinion on why a committee for young agents was important and needed to stay. He then had to present in front of the entire National Board in Washington D.C. After hearing his concerns they agreed to keep the young agent committee and its programs if Hepp agreed to Chair the National Young Agent Committee for two consecutive years and gain some momentum and he did just that.

Today IIABA has a successful national committee, holds an annual 3-day conference and has active young agent committees in all 50 states. Michael Hepp’s passion for this industry and young agents committee ultimately lead him to save young agents, most of us wouldn’t be here today if it wasn’t for what he did.

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www.iiak.org | November/December 2017 | 15

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Offering each and every client an umbrella not only protects those who choose to purchase the coverage. It protects your agency from liability. And it protects your book of business, since studies show that customers who have multiple policies are less likely to move their business elsewhere.

As a Big “I” member, you have access to a stand alone personal umbrella program from A+ rated carrier RLI, featuring: Limits up to $5 million available Excess UM/UIM available in all states You can keep your current homeowner/auto insurer New drivers accepted - no age limit on drivers Up to one DWI/DUI per household allowed Auto limits as low as 100/300/50 in certain cases

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www.iiak.org | November/December 2017 | 17

HONORING

Our Past Presidents & Chairs During the second night of the 121st Annual Convention & Trade Show, IIAK hosted a reception to honor our Past Presidents and Chairs. These men and women represent 40 years of leadership and have decades of experience in our industry from Bill Greenwood who was president in 1983 to Immediate Past Chair David Houk. We are grateful for their service to our association and were happy they were able to join us.

Front Row (L-R): David Houk, Bill Greenwood, Steve Kinkade, Michelle Love, Sandra Blain, Tim Conder, Bill Stiglitz, Roger Kephart Back Row (L-R): John Funkhouser, Phillip Hunt, Michael Hepp, Keith Riley, Tommy Adams, James England, Bill Latta, Steve Ford, Dennis Desmond

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After 20 years of service to our association, 15 as President & CEO, it is bittersweet to see Peggy Porter retire. She is nothing short of a trail blazer in the insurance industry in Kentucky and IIAK will certainly feel different without her. But we know that her legacy will live on and we wish her and her husband Mike all the best on this next chapter in their lives.

See the following pages for a special tribute to Peggy and everything she’s contributed to our association and industry at large.

www.iiak.org | November/December 2017 | 19

In the words of those who worked closely with her...

Peggy is the ultimate professional in her insurance career and everything else she sets out to do. It has certainly been a pleasure to have worked with her leading our Association. I wish nothing but the best for her and Mike as they move to another chapter in their life journey.

Bill Latta What a run we’ve had for the past 10-12 years Peggy. Lots of work and lots of water under the bridge but somewhere along the way Susie and I gained two dear friends in you and Mike. I simply can’t begin to thank you enough for the guidance and leadership you offered to me and so many other “volunteers”.

We sincerely wish you and Mike a long, wonderful, and well-deserved retirement.

Steve Kinkade One of my favorite memories of Peggy’s tenure at IIAK is her work on producer modernization legislation.

There were a lot of ups and downs throughout the process and it took several years to finally get the legislation enacted. Peggy had to use all of her legislative skills to keep it moving forward to final enactment. It was one of her greatest accomplishments during her time with IIAK. Peggy has been a tremendous asset to IIAK and she will be greatly missed. I wish her the best of luck in retirement.

Tommy Adams

An Interview wi How long have you worked in the insurance industry? How did you get started and what attracted you to insurance?

One of the first people I met after moving to Louisville was Cissy Musselman who owned an insurance agency. Cissy introduced me to the President of Blue Cross and Blue Shield of Kentucky (now Anthem) and I was hired as one of their lobbyist.

How did you first get involved with IIAK? While lobbying for Blue Cross I met Ted Bradshaw who was the contract lobbyist for IIAK. In 1997 IIAK decided they wanted to create the Government Affairs Director position and Ted recommended me. The rest is history!!

What do you consider to be IIAK’s greatest accomplishment during your tenure?

There definitely isn’t just one thing.

IIAK’s move from its 25 year home on Linn Station Road to our new headquarters and education center in Eastpoint Business Park in Louisville is one. Another that comes to mind is the three plus years of work the association put

20 | www.iiak.org | November/December 2017

into the passage in 2008 of the Producer Modernization law. And of course keeping the association in excellent financial condition to continue its good work for the next 120 years!

What are you going to miss most?

I will miss the routine and the staff, who are like family. Believe it or not I will miss getting to work with a new Chair every year and all the great Board members who guide the association. I’ll also miss all the wonderful people in the industry that I’ve been privileged to work with and for over the past 20 years.

What are you not going to miss?

As much as I love the staff I will not miss the HR issues that go along with managing people. I’ll not miss airplanes that were part of all the travels for meetings on behalf of IIAK. And I will not miss the daily commute in Louisville traffic!

What kind of changes have you seen take place during your IIAK career?

Wow, where do I start. It’s hard

ith Peggy Porter to believe that 20 years ago cell phones were just being introduced and we communicated with the membership via snail mail. Today I don’t know what we would do without our cell phones and email and all the other electronic ways people can stay connected. It’s no longer an 8-5 business. To stay competitive customers expect 24/7 service and they want to be able to access their agent electronically.

What do you think is the most rewarding thing working with IIAK? I’ve always tried to be low key and do the best job I could for the association. But is has been a true honor to be given the highest honor in the E. Starling Holloway award this year and also receiving the Robinson Award from the Louisville Association of Independent Insurance Agents. I’ve also had the good fortune to be named 20 people to know in insurance

by Louisville Business First and to receive the Woman Leader of the Year from the Women Leaders in Insurance.

What is the one thing that you wish you would have accomplished during your tenure?

I don’t know that there is anything that I feel has been left undone. I feel comfortable that IIAK will be in good hands. Otherwise I wouldn’t feel so comfortable about retiring.

What are your plans for retirement?

Not having a set routine and taking each day as it comes. But definitely lots more golf, fly fishing, traveling and enjoying time with Mike and our dog Benny.

How do you want your tenure as IIAK President and CEO to be remembered?

Here is where Peggy’s answers will go

Peggy, much congratulations to you as you ‘step away’ from your daily responsibilities and look to retirement. I look back on my time with the association and working with you - it was some of the best times in my insurance career. For all the successes achieved throughout your tenure - I say “thank you”. You have always been a very gifted person - good management skills, ability to interact with board members, association members, legislators and insurance company people. Those traits have allowed you to lead and guide the association over these past years. But what stands out to me is just the special person that you are.

You have a good heart and a caring personality - you are my friend. I wish you the very best in this new chapter. May life provide you joy and happiness beyond what you can image.

Joe Barnes Saying that we’ll miss you is really not enough. When I think of Peggy Porter I think of your enthusiasm, your get-it-done spirit and your smile. Your legacy is that you’ve assembled a team that will keep going and keep doing the job that you did. You should be proud of that and we’re proud of you.

Tim Conder Peggy, together we have helped to strengthen the insurance industry for independent agents, and I have you to thank for it. I can’t say enough good things about you and Mike. I hope that both of you enjoy your time together. Thank you for all you’ve done for me and all of the independent insurance agents that belong to our association.

Rep. Jeff Greer

www.iiak.org | November/December 2017 | 21

Peggy, you need to know that you have a profound effect in your field and also on your friends. I wish you the best and happiest retirement you can ever have. Thank you for the joy you’ve brought me.

Cissy Musselman Peggy, when I first met you I wondered ‘how is this small petite lady going to do in Frankfort?’ I found out pretty soon that you had a lot of tenaciousness, you were always prepared and you’re smart. People trusted you and that went a long way. As an insurance agent, I appreciated that because I knew I was always well represented. Then you proved it as you took over the association and we’ve been so proud of your 20 years.

Good luck and have a great time in your retirement.

Steve Ford

Congratulations Peggy We will miss you

I think you were one of the first people that I called when I was starting to tell folks that I was thinking about running for office. And I think you were one of the first people who tried to talk me out of it! But I think its all worked out of the best and I appreciate your support. I hope you and Mike enjoy your retirement years together.

Rep. Bart Rowland Peggy, its going to be a different job here in Frankfort without you. I have many fond memories of working with you over the years on numerous bills and issues. You’re a great help to me personally and the industry. We will miss you and wish you the best in your days to come in your retirement.

Prentice Harvey

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www.iiak.org | November/December 2017 | 23

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Clients for Life By: John Chapin

From first sale to Long-term Relationship I’ve had a lot of people ask me about client retention because it’s something I’ve been very successful at over the years. On that note, here’s how I did it from the initial sale all the way through the entire long-term relationship.

Steps to take with the initial sale: Step 1: Verbally thank the client for his business when you close the sale.

Step 2: Review expectations and what will happen next.

Whatever your particular steps are, go over these steps with the client and let him know how and when he will be kept up to date.

Step 3: Ask the client if he has any final questions, thank him once again for his business, and reiterate when he will next hear from you or someone from your company.

Step 4: Send a handwritten thank-you note the day you get the order. *Sign the thank-you note in blue ink and include your business card.

Step 5: Introduce other team members they might be working with.

Step 6: Follow up and deliver what you say you’ll deliver.

At a minimum you must deliver what you say you will,

when you say you will. Ideally you’ll deliver more than you say you will. Always try to give something extra.

Step 7: Call or stop by in-person before, during, and after initial delivery of the product or service. It’s particularly important in the beginning of the relationship to communicate often. This may feel like micro-managing and it is. You have to ensure everyone does what they’re supposed to do and everything goes smoothly on this initial sale. It’s best to follow a check-list.

Step 8: Survey the client on how you did. Do this step inperson or on the phone. What did you do well and what could have been done better? * – Note: Depending upon the size and significance of an order, it may be appropriate to thank a client with more than a thank-you note. You may also do this for more than just the initial order. Here are some various ways to do that: • Small gifts: golf balls, nice pens, cups, etc.

• Gift certificates • A gift to one of his favorite charities • An investment in client’s business or something else they are involved in • Vacations or trips to trade shows and other industry events www.iiak.org | November/December 2017 | 25

Next, shift your focus to building a life-long relationship.

Step 9: Reach out 18 to 26 times per year.

Reach out in a variety of ways: phone calls, e-mails, regular mail, in-person visits, Fed-Ex, etc. a) Three contacts: Send out a holiday, birthday, and anniversary card.

In addition to sending out holiday cards, you can send gift baskets, bottles of wine, champagne, and other items to your best clients. Also, Thanksgiving and New Year’s Cards (potential fourth and fifth contacts) stand out because few people send them, but I’d still send a December Holiday Card. b) Here are some other ways to reach out to clients 18-26 times.

• Send cards for promotions, new babies, and other celebratory events.

• Send Get-well cards.

• Visit clients in the hospital.

• Send items pertaining to their interests and hobbies such as books and t-shirts.

• Act on personal information about your clients’ family members and send out notes to acknowledge graduations and similar events.

• Get your clients on the mailing list for company publications.

• Develop your own newsletter or monthly article and send it out to your clients.

• Attend events sponsored by clients.

• Do business with your client and send them business if possible.

• Send copies of industry articles that may affect their business or simply be of interest.

• A good business book or resource Note: You are an expert. You are expected to be learning, reading, and passing applicable and valuable information on to your clients and prospects.

• Send information out on new products.

• Send promotional items.

• Donate money to their favorite charities or events they sponsor.

• Drop by with baseball tickets.

• Take clients to lunch, dinner, other sporting events, shows, or out to play golf or some other activity.

• Connect them with other companies, other people they’d like to meet, and other professionals such as lawyers, CPAs, insurance agents, and Realtors, and vendors.

• Send them potential new employees.

• Connect on social media. (Use discretion and your best judgment here) Step 10: Practice these overall client rules: • Always make the client your number one priority.

• Keep communicating. Focus on good, solid communication.

• Personalize the relationship and always seek to build and strengthen it.

• Let clients know you appreciate their business and that you don’t take them for granted.

• Focus completely on the client and how you can help.

YOUR BUSINESS. OUR PROMISE. FCCI Insurance Group has been insuring businesses and doing what we say we’ll do for more than 58 years. We partner with our agents to provide expertise in underwriting, risk management and claims handling that help businesses thrive and face the future with confidence.

Craig Evans Director, Underwriting Indianapolis, Indiana

General liability • Auto • Property • Crime Workers’ compensation • Umbrella Inland marine • Agribusiness • Surety Coverage available in 18 states and D.C. © 2017 FCCI

26 | www.iiak.org | November/December 2017

• Always do what’s best for them.

• Stay on your toes and do what you say you’ll do.

• Go above and beyond. Deliver more than you say you will.

Note: You don’t need to follow this plan with all your accounts, only with the clients you want to keep. Most likely your largest clients. If you follow the 80/20 Rule, you will be doing this with your top 20% of accounts that give you 80% of your business.

If you care about your clients, treat them right, build strong relationships, and keep them happy, you will rarely have to worry about having enough business. Not only will they stay with you, they will also refer business associates, friends, and family. In addition, if you’re working with happy, life-long customers all day, your work and life will be much more enjoyable.

Thank You 2017 Industry Partners (as of 12/01/17) Diamond

Platinum

John Chapin is a motivational sales speaker and trainer. For his free newsletter, or to have him speak at your next event, go to: www. completeselling.com John has over 29 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. He can be reached at johnchapin@ completeselling.com.

Gold Acuity KEMI Liberty Mutual Risk Placement Services, Inc. Safeco Silver

Want to be an Industry Partner?

Contact Nikki Robins Communications Director nrobins@iiak.org

AFCO Amerisafe, Inc. Grange Insurance Company Keystone Insurers Group KY Associated General Contractors Motorists Insurers Group Secura Insurance State Auto Insurance Company

Bronze Alexander J. Wayne & Associates Anthem Blue Cross & Blue Shield Auto-Owners Insurance Company BITCO Insurance Companies Burns & Wilcox LTD Columbia Insurance Group FCCI Insurance Group FFVA Mutual Insurance Company Frankenmuth Mutual Insurance

InsurBanc J.M. Wilson KESA Market Finders Insurance Corp Midwestern Insurance Alliance Prime Insurance Companies SwissRe Corporate Solutions Summit Westfield Insurance

www.iiak.org | November/December 2017 | 27

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By: Jacquelyn Connelly

Today, 15 billion “smart” devices use wireless technology to talk to us and each other, according to Intel. This Internet of Things (IoT) is expanding rapidly: Intel projects that by 2020, it will consist of 200 billion devices. That’s approximately 26 smart objects for every human being in the world.

Accenture reports that 44% of insurers expect connected devices to drive revenues over the next three years, while more than 60% have already launched or piloted solutions that incorporate connected devices. And although the insurance world’s foray into telematics has so far focused mainly on auto, the home is the next frontier for insurance organizations to make their mark.

From water and air quality sensors to smart thermostats, alarm systems, door locks and video monitoring equipment, “all sorts of electronics can be installed in the home which a carrier can have a role in,” says John Lucker, advisory principal at Deloitte & Tousche and Global Advanced Analytics Market Leader. “But it requires the carrier to develop a broader story than just ‘We just sell insurance.’”

“What gets commoditized is policy and coverage,” agrees Stephanie- Trunzo, chief operations officer, chief digital officer and partner at PointSource, a digital transformation firm. “Home telematics is going to give insurance organizations the ability to differentiate based on data, value and knowledge.”

Why Smart Home?

Jessica Groopman, research director and principal analyst with Harbor Research, says smart home telematics span three categories: energy management; convenience, health and comfort; and safety and protection.

“As insurance companies are providing benefits across all three of those areas—tangible value, whether it’s in the form of safety, cost savings, energy efficiency or just a notable difference in convenience—that becomes interesting to consumers,” explains Groopman, who heads research strategy and specializes in consumer-side IoT. Trunzo believes the most immediate opportunities for insurers lie in “things that avoid creating a claims process cycle”—smart devices that enable them to step in before a homeowner experiences a loss, -shifting the focus from reactionary services to risk mitigation and loss prevention.

“It’s all about monitoring the system not only when there’s a problem, but for preventive care as well,” Trunzo says. “You’re giving homeowners the ability to take better care of the systems in the first place.”

That’s the inherent value of the smart home: Homeowners want to avoid loss. “They don’t want water in their house, they don’t want their floors ripped up, they don’t want the inconvenience,” Lucker says.

“At the end of the day, it’s great that if there is water damage, the company is going to step in and pay,” agrees Gwenn Bézard, Aite Group cofounder, research director and insurance practice leader. “But in the first place, it would be better to not have to go through the headache. The ideal scenario is there is no claim.”

If a heater breaks down, for example, pipes may freeze in the middle of winter while a homeowner is on vacation. “When you come back, you may have a flood because the pipes burst,”

www.iiak.org | November/December 2017 | 29

Bézard points out—but not if the insurance company notices first with the help of a smart thermostat. “The insurance company could be more part of the solution, helping with monitoring and dispatching a technician if something’s wrong.”

And smart home telematics improve the insurance experience in another key area, as well: Because they track real-time behavior, they provide a clearer foundation for pricing and underwriting standards.

“Let’s be honest—insurers are probably not best known for providing a ton of transparency into the rating, underwriting and pricing variables they use,” says Drew Doleski, product leader IoT, connected home at Verisk Insurance Solutions. “An IoT-driven structure is a big step forward in terms of transparency.”

Beyond Commodity At a time when debate is swirling about commoditization of personal lines insurance, smart home telematics present an opportunity for insurance companies and agencies to increase their value proposition beyond the traditional scope.

“In an industry where customers have now been trained that the only thing they should care about is price, that’s a very difficult place for an agent to be,” Lucker says. “As price goes lower and lower, that means the only way for agents to maintain growth is to sell more. But they’re being asked to sell more in an essentially static market—or, in some cases, a declining market.”

Compared to auto insurance, where customers might be more likely to leave their needs in digital hands, most consumers want a human face on their home insurance. “One of the things that’s unique about the home is that it’s our home,” Groopman says.

“It’s one of our most intimate realms. If you have an issue in the home, that’s going to be something that feels very vulnerable.

And that’s not the time when you’re going to want to particularly depend on a dashboard.”

Groopman anticipates that smart home telematics could help agents transition from a sales role “to really a product experience or service experience role—both for ongoing experience for customer support and what happens when things go terribly wrong.”

Smart home telematics, then, give agents a forward-thinking platform on which to “build their relationship and show value to the policyholder by recommending a fix,” Trunzo explains. “That helps the agent create a tighter relationship and show more value to their customers. It helps the policyholder, and it certainly helps the insurance company, because they’re going to keep the cost of claims down that way.”

This win-win-win is why companies like Allstate, Liberty Mutual and State Farm are already investing heavily in smart home telematics: All three have partnered with Iris by Lowe’s, a smart home management system, to deliver related products and services to their customers.

.

www.summitholdings.com Policies are underwritten by Bridgefield Casualty Insurance Company and Bridgefield Employers Insurance Company, authorized insurers in AL, AR, FL, GA, IN, KY, LA, MS, NC, SC, TN and TX; BusinessFirst Insurance Company, authorized in FL, GA, KY, NC, SC and TN. ©2017 Summit Consulting LLC | 2310 Commerce Point Drive, Lakeland, FL 33801

30 | www.iiak.org | November/December 2017

.®

“Your home is most likely the most valuable asset you have, so we see it as helping our customers better protect the major investment of their life,” says Justin Herndon, media relations manager at Allstate. “We’re trying to transition what people expect from a typical insurance company, because it’s not just about protection and paying your premium every six months or a year.”

Expanding the Ecosystem Moving forward, the value of smart home telematics will extend beyond the insurer/agent/insured relationship. While the first stage centers on the consumer, the second wave will revolve around creating a business-to-business ecosystem.

“IoT is going to enable more than just interoperability across devices—it’s really going to enable interoperability across industries,” Doleski agrees. “That’s a really unique opportunity for insurers to deliver those differentiated value propositions and services. Maybe it’s just helping people live smarter, or maybe it’s saying, ‘If you change these behaviors, we can help you reduce your energy bill’—something that’s historically outside the scope of what insurance does.”

Jacquelyn Connelly (jacquelyn.connelly@iiaba.net) is IA senior editor.

The Creepiness Factor

Consider a hailstorm that damages a particular area. A roofing supply company could pay attention to weather information, notice where there’s been a hailstorm, use a drone to collect information about the damage, estimate which supplies are necessary and report back to the insurer.

As the Internet of Things (IoT) continues permeating all areas of human interaction, one of the biggest hurdles businesses will face is what Gwenn Bézard, Aite Group cofounder, research director and insurance practice leader, calls “the creepiness factor”: consumer unease with companies collecting private information about their lives.

“Then, the insurance company’s working with their ecosystem of suppliers and contractors network to respond,” Trunzo predicts.

“Now, you can leverage all this exact same kind of thinking to create much more intelligence in the supply chain of all the people who are involved.”

“A lot of the concern comes from distrust and a lack of transparency about what is being used and why,” points out Stephanie Trunzo, chief operations officer, chief digital officer and partner at PointSource, a digital transformation firm. “Perception is set by expectations.”

If an insurance company builds a solid supply chain and network of partnerships while maintaining a strong relationship with the homeowner through the sensors that give them first notice of loss, “they can then help ensure they’re getting the best price on fixes or contract work or materials,” Trunzo explains. “That’s another way to really differentiate: When something bad does happen and you need to activate this policy, we’re helping you save as much money as possible not just on the policy itself, but on anything you need to pay out of pocket as well.”

According to John Lucker, advisory principal at Deloitte & Tousche and Global Advanced Analytics Market Leader, “all the research shows that customers tend to not worry about these things as much if they believe the value equation is in their favor— if they’re getting more for that sacrifice of privacy than they’re giving up in the information they’re generating.”

Lucker says it’s an opportunity for insurance companies and agencies to become trusted resources for information rather than just a source of reimbursement when things go south. “If I’m looking for an exterminator, it would be great to be able to go to my insurance company and say, ‘Who do you recommend?’” he points out. “Better yet, if I use this exterminator and they send the insurance company a report that says ‘John’s house is bug-free,’ maybe you give me a discount because that discount would be less than the average loss of a bug event.”

Herndon says Allstate has similar plans. “We want customers to look at our agents as not just somebody you occasionally look to for a home review,” he explains. “We want them to be able to depend on them for advice, too. It’s not just about selling insurance anymore. It’s about protecting and making life easier.”

Privacy concerns, then, will fall away if organizations capitalize on one thing in particular: consent. “So much of this comes back to the user’s ability to choose,” explains Jessica Groopman, research director and principal analyst with Harbor Research. “The ability to communicate how consumer data is being used, sold, shared and given to third parties becomes central to consumers actually understanding what it is they are giving away.”

“It’s only creepy when I haven’t consented to use my information to do something within my policy,” agrees Drew Doleski, product leader - IoT, connected home at Verisk Insurance Solutions. “How we get to the point in the home where everybody’s feeling super comfortable with this—that’s an industry-wide challenge, but the indicators are there. This is the future.”

—J.C.

We know what it took to build this unique business.

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Save These Dates Check out these great events near you!

Agents Legislative Day

Happy Holidays!

The IIAK staff wishes you Happy Holidays and a safe and prosperous New Year.

February 7, 2018 Frankfort

CRM: Financing of Risk February 20-23, 2018

The association office will be closed on the following days during the holiday season:

Frankfort

Leadership Conference May 16 & 17, 2018 Owensboro

Monday, December 25 Tuesday, December 26 Monday, January 1

122nd Annual Convention & Trade Show November 14-16, 2018 Louisville

Public Entity Insurance Agents • • • • • •

Membership Benefits

Welcome New Members

Owned by Agencies Directed by Agents Special Company Relationships Exclusive Programs & Markets Networking with Peers Revenue Opportunities

E.M. Ford & Company – Owensboro | Henderson Energy Insurance, Inc. – Lexington | Barbourville | Florence Higgins Insurance & Benefits – Hopkinsville

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Ready to Join? Contact: Terry Quested

Executive Director, ARM of Kentucky tq@ARMAgent.net | 800.336.2228 Available Territories: armofkentucky.com/territories

Strong as MANY. Powerful as ONE.

www.iiak.org | November/December 2017 | 33

WE’RE SOCIAL

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Established Louisville agency interested in acquiring insurance agencies in Jefferson and surrounding counties. If you are interested in selling, merging, or need assistance with perpetuation, we would like to talk with you in confidence.

Independent with top best markets looking to expand presence in Jefferson, Oldham or Shelby counties. Wanting Personal lines, Producer or book of business to move or purchase. All arrangements possible, in strict confidence.

Call R. Alex Rankin, CPCU or Philip Anderton, CIC, at Sterling G. Thompson, Co. at 502-585-3277

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Please send inquiries to Turner Insurance Agency, 2460 Shelbyville Road, Shelbyville, KY 40065 or call Kurt Turner, CPCU at 502-633-6060.

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For classified ads or to advertise in the Kentucky IA, contact: Nikki Robins, Communications Director at nrobins@iiak.org or call 502-245-5432.

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