INSIGHT CHECK YOUR
FITNESS LEVEL Is Your Sales Team Fat, Dumb, and Happy? How to Avoid Making Stupid Mistakes Crash Course
in Building Your Marketing Plan
Independent Insurance Agents Every day, you as independent agents put on a rocking show for your clients. We are proud to give you a standing ovation!
Editor & Advertising - Deann French | Graphic Design - Rachel Romines
the journal of trusted choice independent insurance agents of illinois
CONTENTS 13 2018 Insurance Industry Legislative Day
Bret Baier Joins Big “I” Legislative Conference Lineup
Dealing with the Digitalization of the Insurance Industry Check Your Fitness Level Is Your Sales Team Fat, Dumb & Happy? By John Chapin
31 Young Agents In This Issue
7 32 33 38
10 12 34 35 37
Associate News IIA of Illinois News Classifieds
American Family Mutual Insurance Co. v. Krop
Regular Features President’s Message
10 Talent Mistakes CEO’s Can’t Afford to Make How to Avoid Making Stupid Mistakes By John Graham
28 8 Trusted Choice
Industry Government #Back for More - IIA of IL Roadshows Staff Profile People in the News
Insight is the official publication of the Independent Insurance Agents of Illinois (IIA of Illinois). The magazine is published monthly for the members of the IIA of Illinois, with the office located at 4360 Wabash Avenue, Springfield, Illinois 62711-7009; Consumer Website: www.ChooseIndependent.com. The IIA of Illinois welcomes letters discussing concerns of the insurance industry, articles, editorials, other matters of interest to the membership. The editor reserves the right to edit and select submissions for publication. Address submissions for review to email@example.com.
2009 • 2010 • 2011 • 2012 2013 • 2014 • 2015 • 2016 • 2017
firstname.lastname@example.org | www.iiaofil.org | (800) 628-6436 or (217) 793-6660 | Fax: (217) 793-6744 The Independent Insurance Agents of Illinois (IIA of IL) has been providing members with a sustainable competitive advantage since 1899.
Board of Directors
Chairman of the Board | Rick Sutton (309) 692-8544 | email@example.com President | Ryan Hite (309) 688-7316 | firstname.lastname@example.org President-Elect | Patrick Muldowney (312) 595-7192 | email@example.com
BERKSHIRE HATHAWAY GUARD INS. GROUP
Region 1 | Lisa Lukens (618) 942-2556 | firstname.lastname@example.org
Region 2 | Joeseph Heneghan (618) 639-2244 | email@example.com
Region 3 | Jay Peterson, AFIS, LUTCF (217) 935-6605 | firstname.lastname@example.org
KEYSTONE INSURERS GROUP
Vice President | Bill Wirth (618) 939-6368 | email@example.com Secretary/Treasurer | Bennie Jones (312) 960-6200 | firstname.lastname@example.org IIABA State National Director Gregory A. Sandrock, CIC, AFIS (815) 438-3923 | email@example.com
Region 4 | Michael Gonet (815) 339-2411 | firstname.lastname@example.org
Region 5 | Patrick Taphorn, CIC, CSRM (309) 347-2177 | email@example.com
THE IMT GROUP
Region 6 | Rob Messer (815) 459-3300 | firstname.lastname@example.org
Region 7 | Michael-Charles Hilson (708) 333-3378 | email@example.com
W.A. SCHICKEDANZ/INTERSTATE RISK PLACEMENT
Region 8 | Corbin Adams (312) 938-0900 | firstname.lastname@example.org
WEST BEND MUTUAL
Region 9 | Ed Boltz, JD (630) 443-7300 | email@example.com Region 10 | Kevin Lesch (630) 830-3232 | firstname.lastname@example.org At-Large Director | George Daly (708) 845-3311 | email@example.com At-Large Director | Ken Samson, CIC (847) 291-0660 | firstname.lastname@example.org
Committee Chairs Agency/Company Relations | Timothy Nicoud, Jr. (217) 546-6900 | email@example.com Budget & Finance | Bennie Jones (312) 960-6200 | firstname.lastname@example.org Education | Lindsey Polzin, CIC (630) 655-9112 | email@example.com Government Relations | William Lawrence, CIC (309) 827-0007 | firstname.lastname@example.org Planning & Coordination | Cindy K. Jackman, CIC, CISR (618) 457-0471 | email@example.com Trusted Choice | Keith Verisario (847) 699-4040 | firstname.lastname@example.org Young Agents | Allyson Padilla (618) 393-2195 | email@example.com InsurPAC | Thomas J. Walsh, CPCU, CIC, AAI, CRPC (630) 737-0300 | firstname.lastname@example.org IIAPAC | George Daly (708) 845-3311 | email@example.com
IIA of Illinois Staff Education Director, CRM Manager Shannon Churchill - (217) 321-3004 - firstname.lastname@example.org Vice President of Communications Deann French - (217) 321-3022 - email@example.com Products & Services Administrator Melissa Hilgendorf, CIC, CISR - (217) 321-3012 - firstname.lastname@example.org Education Coordinator & Tradeshow Admin Tami Hubbell - (217) 321-3016 - email@example.com Director of Human Resources/Board Admin Jennifer Jacobs - (217) 321-3013 - firstname.lastname@example.org Sr. Vice President/Chief Financial Officer Mark Kuchar - (217) 321-3015 - email@example.com Chief Executive Officer Phil Lackman - (217) 321-3005 - firstname.lastname@example.org
Central/Southern Marketing Representative Lori Mahorney - (217) 415-7550 - email@example.com Vice President, Agents Insurance Services Brian McSherry, CIC - (217) 321-3018 - firstname.lastname@example.org Digital Communications/Web Administrator Rachel Romines - (217) 321-3024 - email@example.com Director of Membership Services Tom Ross, CRIS, CPIA - (217) 321-3003 - firstname.lastname@example.org Accounting Services Administrator Debbie Trudeau - (217) 321-3006 - email@example.com Products & Services Administrator Janet White, CISR - (217) 321-3010 - firstname.lastname@example.org Sr. Products & Services Administrator Carol Wilson, CPIA - (217) 321-3011 - email@example.com
Find us on Social Media
Park Districts Count on IPRF. The Leader in Workers’ Compensation Coverage Since its inception in 1985, the Illinois Public Risk Fund has invited public entities and government agencies to examine its outstanding record for controlling the cost of workers’ compensation coverage. Today, nearly 700 risk managers rely on IPRF for: • It’s AAA Exceptional Rating • Money-Saving Grant Programs • First Dollar Coverage with No Deductible • Consistent Cost Savings Through Low Overhead and Investment Income • A Dedicated Claims Unit with Easy Access and Aggressive Subrogation • Interest-Free Premium Financing Learn why more Park Districts count on IPRF.
www.iprf.com 800-289-IPRF • 708-429-6300 FAX 708-429-6488
P R O U D L Y
S E R V I N G
T H E
P U B L I C
S E C T O R
doesnâ€™t just tell partner agencies what the path looks like, we walk it with them. We understand the challenges independent agencies face and what it takes to propel them towards growth. We work shoulder-to-shoulder with partner agencies to enable them to reach greater levels of success.
Because independence works better together.
Contact Neal Williams: 570.473.2850 | firstname.lastname@example.org keystoneinsgrp.com
Ryan Hite - IIA of Illinois President - (309) 688-7316 - email@example.com
What is Advocacy? The act of pleading for, supporting, or recommending. That is one of the many things The Big “I” and the IIA of IL do for you. While this could (and does) apply to many forms, the main form of advocacy we commonly refer to and see is on the legal and political side. Your association is in constant communication and on alert for any issue that comes up for discussion on both the State and Federal level. The key word there is discussion. Some organizations will let you know when an issue is coming up for a vote. By then, it’s just about too late. Legislators have already made up their minds and it takes significant effort to make the smallest changes. That is why it’s so important to have relationships with your legislators and to have an organization that helps shape good laws to make them better, and cuts bad laws off before they see the light of day. How do we do this? We have a State Political Action Committee called IIAPAC it and supports candidates for and members of the Illinois General Assembly who support the legislative agenda of independent agents. IIAPAC is a bi-partisan committee, making significant contributions to both Republican and Democratic candidates.
InsurPac is one of the reasons that the Big “I” is routinely rated in Fortune magazines top-25 list of most successful lobbying groups in Washington, DC.
Through IIAPAC we defeated: • Compensation and profit sharing disclosure requirements. • Municipal licensure and regulation of insurance agents and agencies. • Taxes, fees and additional small business regulations.
InsurPac has successfully worked on issues such as NARAB II multi-state licensing reform, extension of the Terrorism Risk Insurance Act, Flood Insurance Reform and Reauthorization, Federal Crop Insurance Reform and the Farm Bill renewal, and most recently had significant success for our industry in the Tax Reform Bill.
Positive initiatives that passed include: • Agency principals’ ownership of expirations. • Insurance producer tort reform. • Department of Insurance market conduct examinations of PEOs and payroll companies.
Your contribution via your pocketbook and/or active involvement is crucial and much appreciated.
On the Federal level, InsurPac is the Political Action Committee managed by the Independent Insurance Agents & Brokers of America (IIABA). It was established in 1975 to complement IIABA’s legislative program, and has since become one of the largest insurance PAC’s in the country.
Our two main events are coming up this spring, and I want to personally invite and challenge you to see firsthand how your association works to benefit you. Illinois Insurance Industry Legislative Day – April 11th – Wyndham Hotel – Springfield, IL. Big “I” Legislative Conference – April 18-20th – Grand Hyatt – Washington DC For more information or to register for these events, please check out our newly redesigned website www.iiaofil.org or contact Jennifer Jacobs at the IIA of IL office, 217-321-3013 or firstname.lastname@example.org.
in Building Your Marketing Plan
If you haven’t already, now is the time to start brainstorming and developing your agency’s marketing strategy for 2018. So where do you start? The Message When weighing your marketing strategy, begin with the message. What should people know about your agency? What do you want to express to your community? More importantly, what do you want your community to say about you when your brand is mentioned? Whatever you decide to put out there for the world to see, make sure to make it clear, make it quick and make it pop. Follow this format and you’ll be on your way to creating a message tailor made for your audience in a voice unique to your agency. The Medium You’ve crafted your message, now it’s time to decide where and how to bring it directly to your audience? Of course traditional marketing and advertising should hold a special place in your marketing strategy. However, in today’s digital landscape consumers are also contributing to your agency’s marketing whether you like it or not. They won’t hesitate to shout from the rooftops how amazing or poor their experience with your business was, whether on social media or giving their two cents on a business review page. 8
Get out in front of these conversations and meet modern consumers where they are: social media, consumer blogs, review sites, etc. In short, get digital! There’s no one size fits all when it comes to marketing, but consistency is key. Start with building your website presence, then take some time to test drive both new and old marketing channels. Finally, make sure your unique message is shouted across whatever channels you find work best. The Means Ultimately, your agency’s business bottom line makes all the difference in your marketing dos and don’ts for the year. Luckily for Trusted Choice® members, the consumer brand offers ways to ease the financial pressure when it comes to marketing. By taking advantage of the 2018 Marketing Reimbursement Program (MRP), agencies can cut costs and save big on their marketing budgets. Trusted Choice will reimburse a portion of marketing related expenses incurred in 2018 by Trusted Choice agencies who cobrand their advertising and marketing materials and/or create or update their digital presence. New members and first-time MRP users could be reimbursed up to $1,250.
Tier 1: New members and first-time MRP users receive up to $750 for use of the Trusted Choice logo on any consumer-focused items including, but not limited to, Freedom Campaign ad materials, promotional items, original advertising (non-Freedom campaign ads), or collateral items like business cards or stationery. Tier 2: All eligible agency members receive a onetime reimbursement up to $500 for a digital upgrade using a web developer/vendor, including updates to an agency website, social media or mobile app. The digital upgrade must include the Trusted Choice logo, Pledge of Performance, and link to the Trusted Choice website. Available for all agency locations who have not been reimbursed for a digital upgrade in 2016 or 2017.
When coupled with the 2018 Marketing Reimbursement Program, the wealth of perks and resources already available to Trusted Choice members can help your agency create and deliver a customized and sound message, for the right medium, all while providing the means to do so. To apply for the 2018 Marketing Reimbursement Program or learn about other valuable resources from Trusted Choice contact TrustedChoice@iiaba.net or visit independentagent.com/mrp today.
Insurance Agency Mergers & Acquisitions in 2017 B
Agency M&A deals in U.S. and Canada soar 31 percent. Private equity/hybrid buye Property-casualty agencies most often sold; sales of employee benefits agencies ne Mergers and acquisitions of insurance agencies last year broke all records in 2017, according to OPTIS Partners’ annual report. The OPTIS database recorded 604 deals in the United States and Canada in 2017, a 31 percent jump from 461 in 2016. “This whopping increase exceeded expectations,” said Timothy J. Cunningham, managing director of OPTIS, an investment banking and financial consulting firm specializing in the insurance industry. “We expect the beat to go on in 2018.” The report covers agencies selling primarily propertyand-casualty insurance, agencies selling both P&C and employee benefits, and employee benefits agencies. Private equity/hybrid buyers accounted for 382 transactions, 63 percent of the total, compared with 56 percent in 2016. “The concentration of PE /hybrid buyers has grown steadily since we began tracking deals in 2008 when only four of the top 10 buyers had private equity backing,” Cunningham said. The 2017 report lists PE/hybrid as a new buyer category. It includes all private-equity-backed buyers plus certain privately owned buyers with material internal or external financial support for acquisitions. The top five buyers were Acrisure (92 acquisitions), Hub International (49), Alera Group (38), Broadstreet Partners (32) and Gallagher (30). All were in in the PE/hybrid category except publicly owned Gallagher. Privately owned brokerages completed 128 transactions from 105 unique buyers in 2017, up from 114 acquisitions from 87 separate buyers in 2016. This was a record number both of deals and unique buyers.
By seller type, property-and-casualty-focused agencies dominated the list. They accounted for 301 of the 2017 transactions, 49.8 percent of the total. Employee benefits brokers accounted for 174 transactions, 28.8% of the total, nearly a 90 percent increase from 2016. “The explosion in employee benefits agency sales was fueled by Alera, Acrisure, and several other active acquirers,” Cunningham said. Agencies selling both property/casualty and employee benefits coverages were sold in 86 deals last year. There were 43 sales in the “other” category, which includes managing general agents, third-party administrators and other types of sellers. The statistics pointed to these key lessons, according to Daniel P. Menzer, partner: • The inventory of interested sellers remains high. • It’s hard to perpetuate agencies internally. Third parties are willing to pay much more than internal buyers. Few agency owners will leave that much money on the table. • A strong economy, a stable insurance market, and easy access to relatively inexpensive capital for buyers all spurred activity. • There are plenty of investors and lenders willing to fund PE/hybrid buyers. • If you’re a buyer, pay attention to cash flow and be careful not to overpay. • If you’re a seller, identify the best cultural and operational fit. Take advantage of strong pricing before things change.
Agency Acquisitions by Year
Total agency mergers and acquisitions by year, US and Canada, 2008-2017. Source: OPTIS Partners. 10
7 Break Record
uyers account for 63 percent of deals. nearly double. The actual number of sales was greater than the number reported, as many buyers and sellers do not report transactions, and some acquirers do not report small transactions, Cunningham said. â€œThe OPTIS database, however, tracks a consistent pool of the most active acquirers, including other announced deals, and is, therefore, a reasonably accurate indication of deal activity in the sector,â€? he added. The full report, 2017 Agent & Broker Mergers & Acquisition Update, can be read online at http://optisins.com/ wp/2018/01/december-2017-ma-report.
OPTIS (www.optisins.com) was ranked as the fourth most active agent-broker M&A advisory firm in 2017 and fifth most active in 2014, 2015 and 2016 by SNL Financial. Focused exclusively on the insurance distribution marketplace, Chicago-based OPTIS offers merger & acquisition representation for buyers and sellers, including due-diligence reviews. It provides appraisals of fair market value; financial performance review, including trend analysis and internal controls; and ownership transition and perpetuation planning. Contact: Tim Cunningham, OPTIS Partners, email@example.com, 312-235-0081, Dan Menzer, OPTIS Partners, firstname.lastname@example.org, 630-520-0490, or Henry Stimpson, Stimpson Communications, 508-647-0705, Henry@StimpsonCommunications.com.
Agency Acquisitions by Seller Type
Insurance agency mergers and acquisitions, US and Canada, by buyer type, 2008-2017. Source: OPTIS Partners
Agency Acquisitions by Buyer Type
Insurance agency mergers and acquisitions, US and Canada, by seller type, 2008-2017. Source: OPTIS Partners february 2018
InsurPac Smashes Fundraising Record InsurPac, the federal political action committee for independent insurance agents & brokers, established a new record in 2017 with $1,111,564.52 in receipts. This is a $40,000 increase over last year and the sixth time InsurPac has topped one million dollars in receipts during a calendar year. InsurPac remains one of the largest small business PACs in the country and is credited with making the Big “I” one of the most well-respected business associations in Washington. Although InsurPac raised more money than ever before in 2017, it must continue to raise the bar as other industry PACs enjoy similar growth. As a deluge of competing interest groups clamor for attention in Washington, D.C., PACs have never been more important for breaking through the noise. For more information on InsurPac, visit www.iiaofil.org/Government/Political-Action-Committees/ InsurPAC. Illinois was among 32 states that met their InsurPac fundraising goals. We gratefully acknowledge all who contributed to our fundraising success in 2017.
Jonathan Michael, RLI Insurance Company Gregory Sandrock, Cornerstone Agency, Inc.
Luke Praxmarer, Corkill Insurance Agency, Inc. Michael Wojcik, The Horton Group
Dan Browne, Forest Agency Inc. George Daly, The Horton Group Walter Fawcett, The Plexus Groupe LLC Fred Garfield, The Horton Group Julie Hearring, Blank’s Insurance Agency Ryan Hite, Eagle Rock Insurance Services Cindy Jackman, Consolidated Insurance Agency, Inc. Bennie Jones, Risk Management Solutions of America, Inc. Bill Kelso, SPRISKA Brokerage William Lawrence, P/L/R Insurance Services Kevin Lesch, Arachas Group, LLC Brian McSherry, McSherry Insurance Agency, Inc. W. Robert Messer, Market Financial Group Ltd. Patrick Muldowney, Alliant/Mesirow Ins. Svcs., Inc. Jay Peterson, Peterson Insurance Services, Inc. William Rademacher, PAR Insurance Services Kenneth Samson, Dasco Insurance Agency, Inc. Rick Sutton, Interstate Risk Placement Inc. Thomas Walsh Jr., TW Group, Inc. William Wirth, Wirth Agency
Craig Concklin, Concklin Insurance Agency, Inc. Christopher Gaddis, Donald Gaddis Co Inc Todd Henricks, Chapman-Henricks Insurance Agency Phil Lackman, Independent Insurance Agents of Illinois Lisa Lukens, Saliba-Yewell Insurance Services, Inc. Todd Mickley, Mickley Insurance Thomas Myers, Smeltzer Insurance Agency Timothy Nicoud, Nicoud Insurance Brian Ogden, Ogden Insurance Agency, Inc. Allyson Padilla, Blank’s Insurance Agency Lindsey Polzin, Wine Sergi & Co., LLC Richard Price, Paul T Price & Son, Inc. Patrick Taphorn, James Unland & Company, Inc. Keith Verisario, Acrisure, LLC, dba All-Security Insurance Agency 12
Edward Bowman, Wine Sergi & Co, LLC Randy Cannady, J L Hubbard Insurance & Bonds Linda Carlton-Huber, C F & H Insurance Agency, Inc. Lynn Cassens, Hawkins-Cassens Insurance LLC Michelle Crawford-Stock, C F & H Insurance Agency, Inc. Dino Gavanes, Advisors Group, Inc. Jon Jackman, Consolidated Insurance Agency, Inc. Randy Jacobs, Payne Insurance Agency, Inc. Brian Konen, Konen Insurance Agency, Inc. Rebecca Korach, Chartwell Insurance Services Matthew Langlois, Langlois Insurance Agency Tony LiFonti, LiFonti Insurance Services, Ltd Richard Lingenfelter, Lingenfelter Insurance Agency Keith Rademacher, PAR Insurance Services Thomas Ross, Independent Insurance Agents of Illinois William Ryan, Stoutenborough Insurance Agency, Inc. Luke Sandrock, Cornerstone Agency, Inc. Gary Semmer, Esser/Hayes Ins. Group, Inc. James Shanahan, James T. Shanahan Agency, Inc. Jim Stauffenberg, HomeStar Insurance Services LLC
Philip Anderson Anderson, Insurance Agency Kevin Dougherty, Kevin S. Dougherty Insurance Agency, LTD Ronald Hechler, Gully & Hechler Insurance Agency Terry Horn, Horn-McGowan Insurance Agency Daniel Imming, Imming Insurance Agency Mark Kakenmaster, Libertyville Insurance Agency Daniel Kiesewetter, Kiesewetter Insurance Agency Joseph Mikan, Gee-Schussler Insurance Tyler Sandrock, Cornerstone Agency, Inc. Nancy Schwaller, Schwaller Insurance Agency, Inc. Charles Stewart, Lakeview Insurance Agency, Inc. Anna Maria Viti-Welch, Guy Viti Insurance Agency, Inc. Guy Vorsanger, Willow Insurance Services, Inc. Dave White, Sauk Valley Insurance Services, Inc.
Larry Abbe, Abbe Insurance Agency, Inc. Ron Beck, Beck Ins Agency Ken Berberich, TW Group, Inc. Mary Bluhm, TW Group, Inc. Howard Brundage, III, Schulz-Brundage, Inc. Todd Budnik, Lesser Agency Chris Davis, Independent Insurance Agents of Illinois Dan Frost, Frost Group Inc. Vicky Genna, TW Group, Inc. Larry Goss, Larry Goss Insurance Agency Melissa Haley, United Financial Services, Inc. Bart Hartauer, Hartauer Insurance Agency Ray Kilpatrick, The Turner Agency, Inc. Michael Koetting, Koetting Insurance & Resource Agency Randy Law, Lockhart & Law Insurance Agency, Inc. Kirke Machon, ISU- The Machon Agency Lori Mahorney, Independent Insurance Agents of Ilinois Donna McGowan, TW Group, Inc. Jeffrey Murphy, Shore-Murphy & Associates LLC Eric Olds, Olds Insurance Agency Patrick O’Malley, TW Group, Inc. Nancy Polanin, TW Group, Inc. William Snow, The Snow Group, Ltd. Diana Sponholz-Avarado, TW Group, Inc. Charles Squier, Squier Insurance Agency Inc. George Stone, Hill & Stone Insurance Agency Inc. Duane Straughn, Straughn Insurance Agency Philip Stromberg, Beil & Stromberg Insurance Agency, Inc. Kimberly Szadziewicz, TW Group, Inc. Mary Walsh, TW Group, Inc. Carl Youngblood, Draper Insurance Agency
To contribute go to www.iiaofil.org/Government. february 2018
Wednesday, April 11
Wyndham City Centre, Springfield Make a difference and have an impact on your business. Attend the 2018 Insurance Industry Legislative Day. Hear from senior Department of Insurance staff on regulatory issues affecting your agency including the proposed â€œregulatory sandboxâ€? concept from Insurtech companies. Insurance Industry Legislative Day 2018 will feature a new format, with the general session addressing current issues affecting the industry beginning at 2:00 p.m., followed by legislative issues presentations and a networking reception with members of the Illinois General Assembly, Constitutional Officers, and Department of Insurance staff. The visits to the Capitol have been eliminated this year and the entire event will take place at the Wyndham Hotel in Springfield. Learn about the completely revised Premium Fund Trust Account Regulation which brings compliance into alignment with modern insurance and banking practices. Meet with Senate & House Insurance Committee Chairs and gain insight into their thoughts on the industry. Get an update on the pending litigation challenging Illinois Statutory protections for insurance producers.
Registration Fees Early: $30 (before March 29th) Late: $40 (March 30th & later) Hotel rooms are available at the Wyndham. Reservations made by March 20 will be guaranteed at the group rate of $117. Visit the website below to secure your room.
WWW.INSURANCELEGISLATIVEDAY.ORG february 2018
Now a billion dollar company! (Sales passed the mark in 2016.)
Secure financial strength that comes from being a member of the Berkshire Hathaway family.
Nationwide geographical scope.
Our A+ (”Superior”) A.M. Best Company Rating.
An increasingly robust One-Stop Insurance Shopping solution via a BizGUARD Plus product suite that features Workers’ Compensation, Businessowner’s Policy, Commercial Auto, Umbrella, and Professional Liability coverage.
Average annual growth in premium in excess of 25% per year for the past five.
Ongoing product and service enhancements to win renewals and keep a high retention ratio.
Broader appetite for select risks (including Total Insured Property Values as high as $50 million for certain industries and risks).
Our focus on being data-driven and using business intelligence to gain a competitive edge.
A superior combined ratio that (according to A.M. Best) outperforms our peers.
Our commitment to distribution through independent agents!
Higher A.M. Best financial size (i.e., “X”).
Enhanced infrastructure to support growth.
IT BIL Y A
We have agency appointments available. Go to www.guard.com/apply!
Bret Baier Joins Legislative Conference by Katie Butler Speaker Lineup Mark your calendar for the 2018 Big “I” Legislative Conference, to take place April 18-20, 2018 in Washington, D.C. This annual gathering presents numerous opportunities for Big “I” agents to meet and mingle with the country’s decision-makers. Last year, Big “I” agents stormed Capitol Hill to urge members of Congress to take action on a variety of issues, including the NFIP, the Federal Crop Insurance Program, health care, state insurance regulation and tax reform. The Big “I” continues to uphold its reputation as one of the most impactful and respected associations on the Hill. This year’s schedule of events includes the following: Hill day: On Thursday, April 19, agents will hit Capitol Hill for the association’s annual lobbying day with members of the U.S. Senate, U.S. House of Representatives and their staff. Legislative speakers: In addition to welcoming their constituents, elected officials from both sides of the aisle address the association’s membership throughout the threeday event. The list of past prominent speakers includes modern-day U.S. presidents George W. Bush, Bill Clinton,
George H.W. Bush and the late Ronald Reagan, as well as top congressional leaders from both chambers, including the Speaker of the House, Majority and Minority Leaders and chairs from numerous powerful committees. Political overview: On Friday, April 20, Big “I” President & CEO Bob Rusbuldt will sit down with FOX News Channel’s Bret Baier to discuss the current political landscape and how it affects issues important to independent agents and brokers. Baier is FOX News Channel’s chief political anchor and anchor of “Special Report with Bret Baier,” the top-rated cable news program in its timeslot and consistently one of the top five shows in cable news. Large donor InsurPac reception: All InsurPac donors who contribute $1,000 or more are invited to a special reception on Thursday. This annual event has attracted up to 50 members of Congress and is sure to be well attended. Other annual events that feature prominent political leaders include the young agents and InsurPac state chairpersons legislative luncheon and the large agent/broker and CEO dinner. Check out the full schedule of events and make plans to join your colleagues on the Hill in 2018!
Make the Most of Your Membership -Join the IIA of IL in Washington, DC To assist our members in taking part in the Big “I” Legislative Conference, IIA of IL provides travel incentives, scheduling assistance, and opportunities for members to network with their peers and association leadership while in Washington, D.C. By taking part in the conference, agents will experience the benefits of state and national association membership first-hand. First-time attendees are eligible for reimbursement of their two-night stay at the Grand Hyatt Washington (a $750 value), conference registration ($200 value), and will enjoy hosted events the evenings of April 18th and 19th. The agent is responsible for their flight to Washington, D.C.
Returning attendees are eligible to receive a travel stipend of $250, plus paid conference registration ($200) in addition to hosted events on April 18th and 19th. Returning attendees are responsible for their own hotel costs and travel costs that exceed the stipend provided. Please note: The Big I website indicates the room block is sold out. However, to further assist IIA of IL members, the association has secured a block of rooms at the Grand Hyatt Washington, D.C. that can only be accessed by contacting the state association. Travel incentives are available on a first-come basis until March 2, 2018. For more information, please contact Jennifer Jacobs at (217) 321-3013 or email@example.com. insight
WE’RE POSITIVE ABOUT THE FUTURE. ESPECIALLY YOURS. At Grinnell Mutual, we’re focused on growing long-term, trusting relationships with agents and their clients. Make your future with us — and make a difference in the lives of others every day. Trust in Tomorrow.® Talk to us today.
AUTO | HOME | FARM | BUSINESS
“Trust in Tomorrow.” and “Grinnell Mutual” are registered trademarks of Grinnell Mutual Reinsurance Company. © Grinnell Mutual Reinsurance Company, 2018
Dealing with the
DIGITALIZATION of the
A whitepaper by MFX Services
The insurance industry today is poised for a paradigm shift in the way that technology is deployed to provide products and services to customers. This has primarily been driven by changing business needs and the innovations brought about by myriad insuretech firms, leading to an inevitable shift towards adopting the new digital innovations. Analysts have forecast significant investments geared towards the digitalization of the industry and expect such investments to continue pouring in for several years. It is also expected that an increasing number of new insurance companies will be driven by technology companies to bring better products, services, and customer service in the insurance industry. A forward-looking plan of action, sufficient operational flexibility, an effective implementation strategy, and a willingness to adopt digital disruptions in every aspect of their organization – those insurers that have all of the above can position themselves to leverage the impending digital disruptions to propel their organization to the very forefront of the industry.
Without a system in place to support the analytics and reporting needs of the business, decision-makers may be left with no choice but to rely on conventional timeconsuming manual processes those are more qualitative rather than quantitative in nature. This is bound to cause serious repercussions for the organization, ultimately resulting in missed opportunities and loss of competitiveness. According to a Gartner study, the two following technology platforms are essential for any digital business: 1. Data and analytics platform – This platform should consist of data management programs and analytics applications to enable data-driven decision making 2. Ecosystems platform - This platform’s role should be to support the creation of and connection to external ecosystems, marketplaces, and communities continued...
These adopters of digital technology will have a clear upper hand against their competition. Suitably equipped to cut costs and design more attractive offerings, the digital insurance carriers are sure to acquire a whole new set of customers, thus increasing market share. Those who fail to quickly adopt the new technologies, on the other hand, will struggle to maintain their competitive positions in the midst of a customer-centric, price-sensitive market. Data has always been at the center of the insurance industry, and despite the changes that are to come, data will continue to be the focal point of the industry. In fact, it’s set to play a bigger role to play than ever before. The continued criticality of data in the insurance landscape is ensured by carriers’ need for information-driven strategies in the digitalized business scenario. They’ll have to everage data as an asset, enabling automated decision-making in critical business processes, in order to thrive. This, in turn, is why a digital business technology platform – one that incorporates information management and analytical capabilities – will become a necessity in the future.
Traditionally, there have been two data-centric challenges typically faced by the insurance industry at large. Firstly, there is diffculty in the consolidation of data from various core business systems and third parties across the value chain. Secondly, the lack of a comprehensive view of business-critical data and information is a major hurdle for insurance carriers. This unavailability of an overview of pertinent information means that carriers have a hard time effectively implementing business intelligence practices, which results in suboptimal business decisions and processes. These challenges are now ampliﬁed by the drastically “evolving business environment.”
Insurance carriers can best take on these challenges by rethinking their entire approach – going beyond just data management, and expanding their scope to information management. The implementation of a uniﬁed interactive system can precipitate beneﬁts across the organization. For instance, on the operational front, it can help lower costs through converged communication networks, reducing the necessity for IT management and frequency of travel. A streamlined communication process ultimately results in faster and better decision making and innovation and production cycles, boosting productivity. Uniﬁed interactions can also serve to enhance internal collaboration and innovation, and help support management initiatives. These are just a few examples that illustrate how the Uniﬁed Interactive Interface can drive improvements across the board.
MFX Services, has decades of experience as a services and solutions provider to the property and casualty insurance industry, fully appreciates the diffculty of accessing, consolidating, and validating data. Combining this knowledge of the intricacies of the industry with an understanding of the challenges that lie ahead, our Enterprise Information Management (EIM) solution is speciﬁcally designed to address the needs of those insurance carriers looking to establish themselves as pioneers in the digitalized industry landscape. View entire whitepaper at https://tinyurl.com/MFX-IIA-2018.
e INSIGHT -
FE BR U AR Y
online journal at www.iiaofil.org/Resources/Insight
FITNEESCK YOUR S LEVE L
Is Your DumbSales Team Fa , and H H ow t appy? t, o Avo id Mak ing St upid
M istak es Crash Course in B
uil Marke ding Your ting Pla n
10 Worker’s Compensation Trends to Watch in 2018
By PropertyCasualty360 In this month’s e-Insight. february 2018
CHECK YOUR FITNESS LEVEL
Is your Sales Team Fat, Dumb, By John Chapin
On a scale of 1 to 10, where 1 is not at all, and 10 is a perfect description, how does your sales organization rate according to the following definitions? FAT: Enough clients and business to sustain you for the short term coupled with no consistent effort at chasing new business. Everyone is simply living off of current accounts and otherwise killing time during the workweek. 1-10 ________ Your Rating DUMB: Mediocre to poor sales skills with no interest in developing good to great sales skills. No training initiatives for professional or personal development. 1-10 ________ Your Rating HAPPY: Comfortable because everyone can pay their bills and they’re not missing any meals. 1-10 ________ Your Rating A 6 or higher on any one of these is a big problem. A 6 or higher on two of these is a major problem. And a 6 or higher on all three is an extremely urgent problem and a recipe for disaster.
Sales organizations that have problems in the above areas usually also exhibit one or more of the following traits: • Top producers are supporting bottom producers • No accountability • Allowing negativity and slackers in the workplace • Very little or no actual sales training • More than content with 1 to 3% organic growth in the largest economy ever created on planet Earth So how did your organization rate? If you have a problem, is it something you want to address, or are you “happy” with mediocrity and simple survival? Usually at this point I’m hit with something like: “We should improve BUT,…” one of the following excuses: “It’ll be too much work”, “I’m wearing too many hats and I have no time”, and/or “My people won’t change and I can’t force them to.” First, none of those are true. It doesn’t take a Herculean effort or take a ton of time and your people will change if they see a benefit to changing. That said, step one is to make the decision. If you’re considering staying poor or average, let me give you some food for thought. For starters, we all know it’s better to be at the top, winning. Just ask any of the top sports teams or top organizations in any industry. You might also want to ask the ones at the bottom what it’s like to lose. It sucks. But if you’re fat, dumb, and happy you’re already experiencing anywhere from a little to a lot of suck.
Step 1. Set the vision and ask everyone for their help. Ask people what kind of organization they want to be part of. Highlight the fact that we spend more waking hours at work than at home and ask if it might be better to enjoy the process a little bit more. Ask if we (the whole team) have an obligation to clients, our families, and ourselves to do the best job possible and have the best lives possible. Ask what example we want to set for our kids and the other important people in our lives. We want our kids to give their best in school and other activities, should we be doing the same at work? I mean, if the job’s worth doing, is it worth doing well, or do we want to be average? Do we want to be the New England Patriots, Pittsburgh Steelers (insert favorite, great team here), or the Cleveland Browns (or other losing team)? Let them choose to get on board and be part of, or not be part of, a new positive, growing organization.
b, and Happy? Next, do you feel like you have an obligation and a duty to the organization you take money from? What about your obligation to the people affected by how well or badly your organization runs? If your organization is sub-standard, the client is being hurt. You also have the people who work at the company and their families. Finally, what about you and the people who are important to you? What are your hopes and dreams for the future? The college educations, the weddings, perhaps taking care of your parents, or being able to absorb a catastrophic health issue for you or a loved one? How about the dream home, the vacations, retirement, or maybe a lasting legacy that lives on long after you’re gone? Mere survival doesn’t allow any of those. Finally, is your time on Earth going to be defined as “mediocre”, and is that going to be your legacy once you’re gone? Just some things to consider. If, on the other hand, you’ve decided to change, here are three steps that can go a long way:
Step 2. Set expectations and hold people accountable to those expectations. When you set the expectations, you have to let people know that sales is not a 9 to 5 job. If they’re going to make it, it’s going to take a ton of work, resilience, and persistence. Especially in the beginning they’re going to need to learn the product, your procedures, and maybe even the industry if they’re new to it. Depending upon their sales skills, they may also need to spend a lot of time developing those. You should have set those parameters in the beginning, but if you didn’t, some veterans may have to get to work too. Also, in the new atmosphere, we’re now going to hold people accountable to their quotas. You know who can sell and who can’t. You’ve known since the first week based upon attitude and motivation level. You’re going to have to get tough here. If you’d like, you can delegate this by hiring a great sales coach who can take on the responsibilities of training, monitoring results, and holding people accountable. The key here is to require the slackers to step up or step out. Step 3. Provide training, tools, and resources. Put the support people and systems in place and provide sales training. You want your producers spending their day on sales activities, not paperwork and administrative details. Also, when they are selling you want them as effective as possible. This is an upfront investment that will return tenfold and make you one of the top organizations around. The choice is yours. You know you need to change. If not now, when? The year 2000 was 18 years ago. Seems like yesterday. Tomorrow is 2036. Change before it’s too late. It simply takes a commitment to raise your standards, reset expectations, and ask others to raise their game… If for nothing else, for themselves and their families. To prove to themselves and others what they’re capable of. To ensure that at their end of their lives, they’re not on their deathbed with regrets, wondering “what if”, and neither are you. John Chapin is a sales and motivational speaker and trainer with over 26 years of sales experience. He is the author of the 2010 sales book of the year: Sales Encyclopedia. He can be reached at firstname.lastname@example.org.
If the job’s worth doing, is it worth doing well, or do we want to be average? february 2018
10 Talent Managemen
Downplaying cultural risk. “Shareholders, the media, and consumers – not to mention regulators and prosecutors – will only increase pressure on companies to take a hard look at their corporate culture,” says William Stern, managing director at TMG. “All C-level officers and board members – not just HR – are going to be held accountable for how a company’s culture plays out in both official and unofficial ways, and will need to mitigate the cultural risk that could damage the organization and shareholder value.”
Settling for weekend warriors vs. Ironmen. “It used to be that if you had an executive coach, something was wrong; today, something is wrong if you don’t have a coach,” says Taylor Griffin, chief operating officer of TMG. “Effective leadership development is an Ironman activity – it takes continuous commitment and constant improvement. Treating it as an intermittent activity won’t give people the results needed; companies must identify the truly coachable talent who want to do the hard work of development.”
Ignoring the drafting effect. “Strong executives in a leadership role can often lift the performance of their team, causing people to believe that the whole team is equally talented and capable,” says Matt Bedwell, managing director at TMG. “Unfortunately, this often doesn’t hold true. When that leader moves on and someone else from the team steps into the role, there is a chance that person will fail – much to everyone’s surprise. It’s critical to unbundle the drafting effect by getting very specific in your diagnostics of the leader to see where he or she could be pulling the weight of others.”
Always being “one short.” “CEOs often ask us why, if their company does talent management so well, they are always one short when it comes to finding the right person for an open role,” says Courtney Hamilton, managing director. “Simply having a talent management process in place can instill a false sense of security about one’s bench – it’s necessary but not sufficient. Companies often waste time trying to fix what’s broken when they should be investing in their highest performers and grooming them for future roles.”
Not building competitive muscle. “As growth slows in both the U.S. and abroad, companies can’t wait for the economy to lift all ships,” says Miles. “They must grab market share from competitors in order to grow. Given that there has been such a focus on cost-cutting over the past decade, to the near exclusion of other priorities, there is only a small subset of executives who are willing to really get scrappy and do what it takes to take share.”
The Miles Group (TMG) develops talent strategies for organizations, teams, and individuals – focusing on high-performance, world-class leade cultivate exceptional talent from the C-suite to the next generation of leaders throughout the organization. Clients include many of the Fortune information, visit http://miles-group.com. 22
s Can’t Afford to Make in 2018
06 07 08 09 10
Thinking too small about diversity. “The highest performing teams are often diverse, but the lowest performing teams are often diverse, too,” says Griffin. “Leaders may not have the tools to lead diverse teams, and team members may not be able to express themselves in a way that allows for both a cultural fit and their unique differences. Diversity must be broadened beyond identity diversity – gender and ethnic differences – to include cognitive diversity, which expresses itself through different personality types or leadership styles or the way people think about solving problems. Companies need this full-spectrum diversity to drive growth.”
Not assessing for the ability to “disagree and commit.” “Lack of agreement from a team member isn’t a problem – but a lack of commitment is,” says Stern. “Not everyone can agree on every course of action. People need to be willing to have their air time on a topic, and, if it goes a different way, they need to be able to disagree but still commit 100%. A leader must be assessing the team members’ individual abilities to ‘disagree and commit’; if there is any evidence to the contrary, the leader needs to step in immediately for corrective action.”
Focusing on “change management” vs. maintaining organizational fitness. “When times are good, companies typically get undisciplined about improvement and ‘put on a few extra pounds’ – success covers up a lot of sins,” says Bedwell. “Then, when hard times hit, executives embark on ‘change initiatives’ at which they are unpracticed – and start changing things that are actually working, compounding the problem. Instead of this cycle of gaining a few pounds and then frantically working them off, companies have to maintain ongoing organizational fitness. Building this fitness into your corporate DNA gets you away from project-based change and makes it part of your corporate culture.”
Underleveraging your “top 100.” “CEOs frequently underutilize the top one hundred people in their organization as tools for communicating the vision of the company,” says Miles. “The three layers – a CEO’s direct reports (typically the top 8-11 executives); the next level of direct reports (another 20-30 executives); and then those who fill out the top 100 in a company – are where a CEO can create leverage of inspiration, influence, and alignment. Engaging all three layers by connecting them and their roles to the overall strategy of the company has a dramatic impact on the broader organization. They are the ones who will cascade the strategy and get more people aligned to drive the strategy forward.”
Not investing enough time in your talent’s “micro” moves. “Managing talent has traditionally focused on helping direct reports with their ‘macro’ moves – how they are going to make the significant career moves that will pave the way up the corporate ladder,” says Hamilton. “But focusing on these big moves with new titles ignores some of the most important work of their career, such as being given opportunities to present to the board, lead a key meeting for the company, or lead a big project or initiative. It’s critical to help your talent make these continuous ‘micro’ moves that will aid their development and allow them to truly grow into roles.”
leadership. Through assessments and development, coaching, leadership transition planning, and organizational design, we help clients rtune 100 as well as VC portfolio companies, firms in transition, and organizations around the globe and across industries. For more february 2018
We know what it took to build this business.
And we know what it takes to protect it. Underwriters who know and understand what coverages are necessary to protect the business. Loss prevention professionals who use a hands-on approach to help develop programs tailored to the individual business. Claim reps with the expertise and technology to process claims quickly and efficiently. As an Official Supplier of the Silver LiningÂŽ, you and West Bend will find the right insurance plan for your valued customers. To find out more, talk to your West Bend underwriter.
By John Graham
Most mistakes are just plain stupid. “I just wasn’t thinking,” we say. Stupid mistakes aren’t intentional. But the genie is out of the bottle. The damage is done.
capabilities and knowledge to handle today’s demands. They’re functionally obsolete and, unintentionally, they make inappropriate decisions, stupid mistakes.
Sure, we can try to “minimize the damage” by claiming “we’re only human” and dismiss it with “everybody makes mistakes.” Not today. As the news makes clear, there’s no place to hide. Everything is transparent. Both individuals and businesses suffer from the harm caused by stupid mistakes.
Point: Most of us rely on our past performance as a guide, failing to recognize that it’s inadequate, rendering us functionally obsolete and prone to making stupid mistakes.
So, what do we do about it? Hope for the best? Ride it out? Or, pretend it wasn’t that important? Here’s how to avoid making stupid (and possibly harmful) mistakes: 1. Stop looking in the mirror Maybe the troublesome attitude started with the company’s founder. It would not be surprising that someone with King as their first name might have an ego problem. And if you were King C. Gillette of the famed Gillette Company, it might rub off on the entire operation. For nearly a century, others in the shaving blade business tried to topple Gillette from its throne. It didn’t work, which may have caused the company to believe it was indomitable. If so, it was a stupid mistake. Then, came the disruptors with little money, but with low prices and home delivery. These interlopers, Harry’s and Dollar Shave Club, were largely ignored, until they nicked the king. Finally, Gillette got in the act with a copycat “club” offering reduced prices and home delivery. Point: If you keep your face glued to the mirror, all you see is yourself - and that spells trouble. 2. Face your limitations The worst fate that can befall anyone is becoming functionally obsolete. It applies to structurally sound and safe bridges with too narrow lane widths and inadequate vertical clearances that fail to meet current traffic demands. When this occurs, a bridge is functionally obsolete. It’s a danger if it isn’t retrofitted or replaced. It happens to individuals, departments, managers, and organizations, as well. They no longer have the skills, february 2018
3. Challenge yourself During a family discussion of current events, the father answered a question quickly and confidently. A few seconds later, his newly minted son-in-law spoke up (politely) with a different answer from his iPhone, shocking the older man because what he thought he knew was wrong. This is what two researchers call “the illusion of explanatory depth,” which means that we think we know more than we do, which is not only pervasive, but causes us to draw erroneous conclusions that lead to making stupid mistakes. We’re often irritated by those who seem to question everything, who burst our little bubbles. They slow things down and create confusion. But before being too critical, they may be doing us a favor by nudging us to ask the one question that makes a difference: “How do I know what I think I know?” Point: Ignorance isn’t bliss; it’s a severe handicap. 4. Think it through We all have our own ideas and because they’re ours, it’s inevitable we become overly invested in them. They’re our “children” and should anyone dare to disagree or fail to warm up to them, we almost instinctively get our back up and get ready for a battle. And that’s when we get off track. Instead of solving problems, we persist in pursuing ill-conceived solutions - and make stupid and unnecessary mistakes. This is why thinking it through is so critical. In his book, How to Think, Alan Jacobs says thinking is “not the decision itself but what goes into the decision, the continued... insight
Independent Insurance Agent
What Makes Us the Midwest’s Premier Managing General Agency & Excess Surplus Lines Broker? ▶ Our customer service is second to none ▶ Industry expertise. Over 175 years underwriting experience with one call
▶ Over 60 industry leading markets ▶ We do not outsource any of our operations. Everything is handled right here in the USA
Transportation & Trucking
Oil & Gas
Property and Casualty Insurance | Restaurants ▪ Bars ▪ Taverns | Liquor Liability | Habitational | Contractors Transportation & Trucking | Commercial Auto | Garage | Used Car Dealers | Repair Shops | Public Transportation Specialty Lines Products | Excess & Surplus Lines Brokerage
www.was-irp.com | email@example.com
W. A. Schickedanz Agency, Inc.
Interstate Risk Placement, Inc.
300 West Main Street PO Box 445 Belleville, IL 62222
7320 N. Villa Lake Dr PO Box 3765 Peoria, IL 61612
Phone: (618)233-0644 Fax: (618)233-0672
Phone: (309)692-8544 Fax: (309)693-0402
consideration, the assessment. It’s testing your own responses and weighing the available evidence.” Then Jacobs adds, “It’s grasping, as best you can and with all available and relevant senses, what is, and it’s also speculating, as carefully and responsibly as you can, about what might be.” Point: In other words, thinking something through means considering the consequences. 5. Make it personal Sales spiels, elevator speeches, presentations, and other messaging often cause unexpected problems. Even though their objective is to help us perform more effectively, they can do just the opposite. For example, even the most carefully prepared and “polished” presentations can fall short of its goal. While we may think we “aced it,” those listening may think differently. It even happens with presenters on the premier storytelling venue, The Moth. Some are more gripping than others. Here’s the problem: By putting so much energy into getting the words, tone, gestures and everything else right, we get
all wrapped up with what we want to get across. When this happens, we unintentionally build a barrier that separates us from our listeners, readers or customers. In his book, To Sell is Human, Daniel Pink tells what an Israeli radiologist did to overcome the impersonal nature of his job. He imagined that every scan he looked at was that of his father. “You can borrow from this insight with this simple technique for moving others,” writes Pink. “In every encounter, imagine that the person you’re dealing with is your grandmother.” He calls it the ultimate way to make sure you’re making it personal. Point: Unless we make it personal, it can end up as a stupid mistake. All of us make enough mistakes without carrying the extra burden of downright stupid ones that get us in unnecessary trouble. We’re far better off if we know the triggers so we can avoid making stupid mistakes. John Graham of GrahamComm is a marketing and sales strategy consultant and business writer. He is the creator of “Magnet Marketing,” and publishes a free monthly eBulletin, “No Nonsense Marketing & Sales Ideas.” Contact him at firstname.lastname@example.org, 617-774-9759 or johnrgraham.com.
Most of us rely on our past performance as a guide, failing to recognize that it’s inadequate, rendering us functionally obsolete and prone to making stupid mistakes. Your one-stop shop for all of your difficult to insure needs. WE INSURE THE TOUGH STUFF Transcom is a specialized insurance wholesaler serving independent agencies in Illinois, Indiana, and Wisconsin. Our focus is writing commercial auto risks of all types, garage business, and E&S type property and casualty risks.
General Liability and Garage
Commercial Auto and Trucking
We have earned broad authority from our carrier partners so that most businesses can be underwritten and issued efficiently from our Madison office.
✔ ✔ ✔ ✔
Serving agents in Illinois, Indiana, and Wisconsin. Industry recognized carriers. Experienced underwriters. Knowledgeable and skilled support staff.
(800) 360-3303 transcom-ga.com february 2018
American Family Mutual Insurance Co. v. Krop Amicus Summary
The Independent Insurance Agents of Illinois filed a brief with the Illinois Supreme Court on January 9, 2018 to help it decide a case of statewide importance that the Court is currently considering. The brief has since been accepted by the Supreme Court. The Court’s ruling could have a major impact on two statutes that were drafted by the IIA and its counsel, Richard M. Waris and Matthew J. Egan of Pretzel & Stouffer, Chartered. These statutes, which were passed by the Illinois General Assembly, limit the duties that Illinois insurance producers owe to their customers (the Illinois Insurance Placement Liability Act) and set forth the time limit by which lawsuits may be initiated against insurance producers (the Statute of Limitations for Claims Against Insurance Producers). In 2017, the Appellate Court in the case of, American Family Mut. Ins. Co. v. Krop, created common law which disregarded those statutes. Now the appeal to the Illinois Supreme Court will turn on whether an insurance producer can be sued more than two years after he procured a homeowners policy for a customer (who was provided a copy of that policy) and whether a producer owes a fiduciary duty to his/her customer. 28
In May of 2017, the Illinois Appellate Court issued an opinion holding that the statute of limitations for claims against an insurance producer does not begin to run until an insurance carrier denies coverage. The Appellate Court predicated its holding upon its conclusion that fiduciary duties existed between insurance producers and their customers. This decision contradicted long-standing Illinois court decisions which held that an insured has a duty to read and understand the contents of the insurance policies that it receives. See, State Farm Fire & Casualty Co. v. Mann, 172 Ill. App. 3d 86, 94 (1st Dist. 1988) and Foster v. Crum & Forster Insurance Cos., 36 Ill. App. 3d 595, 598 (5th Dist. 1976). In addition, the Appellate Court’s ruling also ignored the language of the Insurance Placement Liability Act, which explicitly states that an insurance producer does not owe a fiduciary duty to a customer in connection with the procurement of a policy of insurance. Seeing that the Appellate Court’s decision significantly weakened two statutory protections for insurance producers that the IIA had worked hard to obtain, the IIA hired the law firm of Pretzel & Stouffer, Chartered to prepare a brief on its behalf which urges the Illinois Supreme Court to reverse the Appellate Court’s holding.
The IIA reached out to Richard Waris, Matthew Egan, and Brendan Nelligan of Pretzel & Stouffer because of that firm’s long history and experience representing insurance professionals throughout Illinois and the fact that Richard Waris and Matt Egan initially drafted the language that became the Insurance Placement Liability Act as well as the Statute of Limitations in question. Accordingly, where a policy had been in effect for multiple years and renewed by the customer several times, the customer was charged with knowledge of its contents and could not subsequently raise a claim against its insurance producer alleging wrongful denial of coverage by the insurer or wrongful procurement of the policy. In the Kropp case, the clients renewed the policy even after the carrier denied coverage and initiated a declaratory judgment action against them. In its brief filed with the Illinois Supreme Court, the IIA traced the long-standing history of Illinois cases holding that an insured has a duty to read and understand its insurance policy, and the manner by which that straightforward rule had been eroded by court decisions finding that insurance producers owed a fiduciary duty to their customers. The IIA also described how it led the effort in the General Assembly to pass the Insurance Placement Liability Act, which explicitly states that no cause of action brought by any person shall subject insurance producers to civil liability under standards governing a fiduciary relationship, except in limited circumstances pertaining to the wrongful retention or misappropriation of premiums or claim payments. Throughout its brief, the IIA explained to the Supreme Court the manner in which insurance producers procure insurance policies for consumers, and how that relationship differs drastically from those other legal relationships where fiduciary duties exist. It argued that the essence of a fiduciary relationship is where one party is essentially dominated by another: partners, attorney and client, guardian and ward, trustee and beneficiary, etc. This essential element of dominance simply does not exist in the relationship between an insurance broker and its customers. For example, a customer may choose to engage any independent insurance broker to secure a desired policy, or may simultaneously work with multiple brokers who will then compete against one another to try to procure a policy of insurance for the customer. Moreover, customers have full freedom of choice and have no obligation to follow an insurance producer’s recommendations as to the types or amount of coverage to obtain.
If insurance brokers truly enjoyed the dominance that is the touchstone of a fiduciary relationship, brokers would consistently procure for and bind the customer to the Cadillac of policies covering every conceivable risk at Cadillac prices. Such a practice would limit the customer’s risk of inadequate coverage, while also resulting in higher premium payments and therefore likely higher commissions for the broker. However, in Illinois it is the customer that enjoys the final say as to her coverage needs and the premium she can afford. Nielsen v. United Services Automobile Ass ‘n, 244 Ill.App.3d 658, 667 (2nd Dist. 1993). In its brief, the IIA urged that it has a unique perspective on the issues in the case and how those issues might affect the insurance markets in this state. In particular, the IIA’s brief argued that important state-wide considerations have been undermined by the reasoning of the Appellate Court, which plainly misconstrued the Insurance Placement Liability Act by finding the existence of a fiduciary relationship between an insurance producer and its customer-in direct contravention of the plain language of the statute itself. Of all the briefs submitted to Supreme Court, the IIA is the only party focusing on the lack of a fiduciary relationship between independent insurance agents and their customers. The brief filed on behalf of the defendant/ agent Varga seemed to accept that insurance brokers owed fiduciary duties to their customers! Finally, the IIA argues that the Appellate Court’s decision encourages customers to stick their heads in the sand and place all risk of loss on the broker. It is our position that where the customer accepts and repeatedly renews the policy obtained by the producer, Illinois courts should appropriately hold the insured to be on notice of any deficiencies apparent on the face of the policy so as to trigger the statute of limitations. The case is not likely to be fully ready for argument before the Supreme Court until late spring of 2018 with an ultimate decision coming in the fall or even next year. Nevertheless, we will continue to monitor the case and to look out for the interests of insurance producers throughout the State of Illinois.
BE WORRY FREE WITH IMT
We understand the importance of partnerships and take great pride in building strong, stable relationships with our agents and policyholders. Through experienced claims expertise and hightouch customer service, we are there when we are needed most. Learn how you can represent IMT Insurance & Wadena Insurance at imtins.com/contact_us.
imtins.com | west des moines, iowa
© 2018 Society Insurance
Cyber liability coverage that actually repairs digital damage. Small detail. Big difference. Cyber attacks can cause catastrophic financial loss, and in the last 12 months 50% of U.S. small businesses have been breached by hackers.* So it’s more a matter of when your customers will be attacked than if. But with Society, there’s no reason to panic. Our comprehensive cyber liability coverage protects businesses from things other policies usually don’t, like privacy breaches, cyber extortion and payment card company rule violations. Because we understand how to keep your customers truly covered. To discuss an agency appointment, give us a call at 888-5-SOCIETY or visit societyinsurance.com. *2016 State of SMB Cybersecurity Report
1/8/18 10:40 AM
conference ed! d d A t Jus
ter r a C n Alto
Hotel Indigo, Naperville
Beyond the Policy
Dig deep with Alton Carter, award-winning author of The Boy Who Carried Bricks and Aging Out. His journey has not been easy, but through his resilience he’s created techniques to overcome obstacles and he’s going to share his strategies with attendees. Alton will help agents look at their weakness, strengths, and personal issues that are keeping them from reaching business goals while helping them discover ways they can make their office and community a better place.
Alton joins these top-notch speakers:
Joe Bonura Joe will show you how to “Sharpen Your Edge” so that you can maximize your earnings potential in the competitive world of Insurance Sales.
Jim will address the current needs of the independent agent as it applies to Identity Theft for them and their clients.
Trevor Shylock Trevor will show you how to identify your preferred communication style, its strengths, and its challenges to better understand the communication process and where it tends to break down.
Robb Zbierski Robb will teach you how to structure your goals for maximum impact and also teach attendees how to set up their calendar in a way that will help them find at least an extra 10 hours a week.
www.ILYoungAgents.com february 2018
Thank you to our Associate Members.
Diamond Level Members
Standard Property & Casualty, a National General Company
Gold Level AAA Insurance Agent/Broker Review Company Arlington/Roe Blue Cross/Blue Shield of IL
Silver Level Grinnell Mutual Reinsurance Company Imperial PFS Surplus Line Association of Illinois
The IMT Group West Bend Mutual Insurance Co.
Bronze Level A.J. Wayne & Associates AMERISAFE Atlantic Specialty Lines Auto-Owners Insurance Co. Berkshire Hathaway Guard Insurance Companies Burns & Wilcox, Ltd. Chicagoland Carstar Columbia Insurance Group Donald Gaddis Company, Inc. Echelon Property & Casualty Insurance Co. Encompass Erie Insurance Group Farmers Mutual Hail Foremost Insurance Group Forreston Mutual Insurance Company Grange Mutual Casualty Co. Illinois Mine Subsidence Insurance Fund Illinois Public Risk Fund Interstate Risk Placement IPMG J. C. Restoration J M Wilson Keystone Insurers Group, Inc. 32
Liberty Mutual Madison Mutual Insurance Company MarshBerry Maximum Ind. Brokerage, LLC Mercury Insurance Company of IL MetLife Auto & Home Motorists Insurance Group Nationwides ProAg Rockford Mutual Insurance Co. Safeco Insurance Selective Insurance Company of America ServiceMaster DSI Society Insurance Specialty Risk of America Transcom General Agency Travelers United Fire Group Utica National Insurance Group W.A. Schickedanz Agency, Inc. Western National Insurance Westfield Insurance Company
IIA OF ILLINOIS NEWS Education Classes february
13 15 28
CISR - Commercial Casualty 1 Rolling Meadows Ethics Springfield Errors & Omissions Bloomington
New Members member agency Northwest Insurance Brokers Chicago, IL
5 6 6 7 8 14 15 20 21 27
Ethics Rolling Meadows CISR - Personal Auto Pekin CISR - Life & Health Rolling Meadows CIC - Agency Management Rolling Meadows
Reliance Insurance Agency, Inc. Westmont, IL
associate copper level BMO Harris Bank, N.A. Chicago, IL
For information regarding IIA of Illinois membership or company sponsorship, contact Tom Ross, Director of Membership Services, at (217) 321-3003, email@example.com.
CISR - Personal Residential Springfield Ethics Champaign CISR - Personal Residential Orland Park Ethics Edwardsville Ethics Westmont CISR - Agency Operations Lake Bluff
Online Education www.iiaofil.org February & March Featured Online Classes General Homeowners | Cyber Liability | Personal Auto Errors & Omissions | Property & Liabiliy Concepts The Dirty Dozen | Commercial General Liability When the Child Becomes the Parent - Aging Parents Who Is An Insured? | Workers Compensation Farm Liability | Business Income | Insuring Toys 10 Things Every Commercial Lines Agents Ought to Know Fiduciary Liability, ERISA Bonding, and Employee Benefits National Flood Insurance Program Basic Course Insurance Hobby and Small Farms | And More!
Join IIA of IL leadership and Staff members for this FREE program.
re o M kFor
ac B #
• Let us know your agency’s needs • Make sure you are getting the most out of your Association membership • Find out how changes to the Premium Fund Trust Account Regulation will ease agency compliance • Network
Tuesday, March 6 LaSalle – Uptown Grill, 601 1st Street
Luncheon - Noon Rockford – Giovanni’s, 610 N Bell School Road Cocktail Reception - 5:00
Wednesday, March 7 Lake Bluff – United Services by Permaco Inc. Luncheon - Noon West Chicago – Prairie Landing Golf Club, 2325 Longest Dr. Cocktail Reception - 5:00
Wednesday, March 14 Marion – Bennie’s Italian Food, 309 N. Market St. Luncheon - Noon O’Fallon – Bella Milano, 455 Regency Park Cocktail Reception - 5:00
Thursday, March 22 Peoria – TBD
Luncheon - Noon
Complete your FREE registration at www.iiaofil.org. 34
Staff Profile Shannon Churchill
Education Director/Convention Coordinator/CRM Manager
Number of Years at the IIA of IL: In June I will celebrate my 20th year. What do you like most about your job? Our members. That’s what keeps me coming back day after day. I find great joy in helping them protect the members of their communities. The variety in what we do, how we do it, and figuring out what they need is the best part of my job. Tell us about the first job you ever had: I started babysitting when I was young. There were a lot of young kids in our neighborhood. In high school, I was a Subway Sandwich Artist. Yes, our local town opened a Subway, and I was one of the first employees. They called us “Sandwich Artists.” Little did I know, that title would forever change the way I look at the tasks I work on. After HS graduation I started working for the Association as a telemarketer, and from there took on various assignments and jobs as needed. When my Mom, Sandy Cuffle, retired in 2011, I took over her role ending up when I am today. If you could have any career other than this what would it be? A teacher. What is your favorite: Pastime: Watching my daughters’ sporting events, cooking & reading Food: Pizza or Mac-n-Cheese Movie: The Notebook TV Show: I love Netflix. The only regular TV shows I watch are Grey’s Anatomy and The Walking Dead. Band: I love any music I can sing or dance along to. My all-time favorites...Garth Brooks, Reba McEntire, and George Strait. Tell us about your family: My husband, Bob, and I are high school sweethearts. We became friends my freshman year of high school and started dating soon after. We were married shortly after finishing college, and will celebrate our 15th anniversary this year. I love you honey! We have been blessed with two amazing daughters. Abby is 12 and loves school, basketball and volleyball. She wants to be a teacher when she grows up. Lilly is four and also loves school and gymnastics. She wants to be a cheerleader and “gymnastics girl” when she gets older. Their social calendars keep us pretty busy. Name one thing on your bucket list: Visiting all 50 states. What is your biggest fear? Snakes or dying - It’s a tie. Of what are you most proud either personally or professionally? My children. Family is everything. Name something people would be surprised to know about you. I am extremely shy...I have to hide it away though when we are conducting a meeting or event, so you might not realize it if you have met me. february 2018
IIA of IL Members Named 2017 Agents of the Year by Insurance Journal
QBE North America, an integrated specialist insurer, announced the appointment of Daniel Franzetti as Chief Operating Officer, effective immediately. Franzetti continues his role as Chief Claims Officer for QBE North America, and will add to these responsibilities by overseeing all North American operations, systems, architecture, communications and branding. He will remain a member of the QBE North America Executive Management Board, reporting to QBE North America Chief Executive Officer Russell Johnston.
Congratulations to two IIA of IL members made the top ten list of agents for 2017 as determined by Insurance Journal.
With over thirty years of experience in the insurance industry, Franzetti has deep experience in and knowledge of the business. Leveraging his experience working across the organization through claims, the combined role will be integral to executing QBE North America’s strategy as an integrated specialist insurer, helping to maximize enterprise-wide opportunities that will enable the company to solidify its brand within the marketplace. Before joining QBE North America, Franzetti, who succeeds Bob James, was Chief Claims Officer for Zurich Australia Insurance Limited and Senior Vice President, leading Zurich’s Claims Technical Shared Services in North America. Franzetti received a Juris Doctor degree from New York Law School, a Masters of Business Administration degree from Rutgers University-Newark, and a Bachelor of Arts degree from Colgate University.
Joe Redshaw, of Redshaw Insurance Agency in Rushville and Mike Richmond of The Horton Group in Orland Park. According to Insurance Journal, “The 2017 Agents of the Year define what it means to be a successful independent agent today. These agents are more than top sellers. While they have achieved impressive success in sales and demonstrated laudable business intelligence and entrepreneurial skills, they also have shown they have a passion for what they do and a commitment to professionalism and, in many cases, specialization. For them, being an insurance agent is more than a job.”
amerisafe.com - 800.897.9719
SAFE ABOVE ALL Strong and steady, constantly raising the bar. All great accomplishments have a certain level of hazard involved, but AMERISAFE has workers’ comp down to the detail. It’s a large part of why we retain 90%* of our policyholders. The best protection is being proactive.
*Policyholder retention rate based on voluntary business that we elected for renewal quote: 92.7% in 2016.
people in the news
QBE North America Appoints Daniel Franzetti Chief Operating Officer
for the insurance professional by the insurance professional
AGENCY FOR SALE
53. Joliet: primarily personal lines agency with book of smaller commercial clients. Owner looking to retire although willing to stay on part time for smooth transition. Total agency approx. $1.2 million in sales. Agency had been in Joliet since 1981. Currently on Applied Systems TAM. Contact:
Dfrench@iiaofil.org Reference# AFS53
SHARED SPACE FOR RENT
99. Shared Space for Rent. 6400 SF office located at 127 N. Walnut St., Itasca, has availability for startups, insurance agents, salespeople, consultants, professionals, etc.; who are in need of class A space without the cost. Monthly fees range from $375 and include: Receptionist/ Clerical, internet, conference rooms, kitchen, classroom/ break room. Printing and clerical services are also available. Short term or long term rentals are available. Wed are in downtown Itasca across from the Metra station. Close to expressways. For information contact:
Dino Gavanes 630-779-0566. dino_gavanes@ advisersinc.com
20. Agency Wanted. Since 2004, Central Illinois Agents Group LLC has been providing independent agents with a variety of markets with contingency opportunities. Agents have availability to several markets that they may not be able to sustain or maintain on their own. We have markets for personal, commercial, agricultural and crop insurance lines. Let us help you get to the next level. Visit www. ciagonline.com for contact information.
Visit www.ciagonline.com for contact information.
02. Agency/Agents/Producers Wanted. Forest Park/Oak Park agency for over 60 years, will meet your needs by providing space, markets, marketing & sales support, automation, merging with or purchasing your agency. Perpetuation/ Succession Plans, Buy-Sell Agreements also available. We have experienced, educated and dedicated staff for you and your clients. Have access to our numerous companies, office services and many other resources. Retain ownership in your book with contingency. Please look closely at us- we are an agency you want to do business with! Weâ€™ve done it before, we know how- we make it easy! Visit our website at forestagency.com/agents.html, or call for a confidential discussion and a list of Agency benefits. Dan Browne will provide an agency evaluation/appraisal at little cost to you. Please call:
Dan Browne or Cathy Hall Forest Agency (708) 383-9000 firstname.lastname@example.org
OPPORTUNITIES/SPACE AVAILABLE/RETAIN OWNERSHIP
13. Opportunities/Space Available/Retain Ownership. We are a 100 year old Northbrook agency looking to discuss any mutually beneficial opportunity. Our producers, mergers, clusters and agency purchases receive 50% commissions on new and renewal business without any expenses. We can provide: office space, phones, agency management system, service renewals and changes. The companies we represent are: Badger Mutual, Employers Mutual, General Casualty, Guide One, Hartford, Kemper, Progressive, Rockford Mutual, Safeco, State Auto, Travelers and Met Life. Contact:
Nancy Solomon Martini, Miller & Schloss, Inc. (847) 291-1313 Ron@martini-miller.com
Dropping. Public Entities in Illinois are currently experiencing one of the most competitive insurance markets of the past 20 years. The ICRMT is here to help you write your local townships. With over 35 years of expertise, The ICRMT offers townships in Illinois broad coverages and comprehensive risk management services at competitive premiums. The complete solution for your local township. Contact us today at 888.377.5845
FOR MORE INFORMATION: TODD GREER
Executive Vice President Senior Vice President 314.293.9707 630.377.5845 email@example.com firstname.lastname@example.org
VP Business Development 630.485.5885 email@example.com
Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com.
©2018 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.
Online journal for trusted choice independent insurance agents of illinois