e-Insight - May 2023 - Member

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INSIGHT STARTING AN

I NSURANCE REFERRAL PROGRAM

Plus

EVERYTHING YOU NEED TO KNOW

Why Renewals are the Worst Time for Account Rounding The Gen Z Perspective

Insurance that cares SECURA Insurance and Bedford Underwriters work together to provide a comprehensive insurance program for your nonprofit accounts. From food pantries and homeless shelters, to Boys and Girls Clubs and community centers, we have the coverages and services tailored specifically for these unique organizations.

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May 2023

CONTENTS 12

15

23 GEN Z

26

12

Personal Insurance Innovation Amid Industry Challenges - Is it Possible?

15

Why Renewals are the Worst Time for Account Rounding

18

Everything You Need to Know About Starting an Insurance Referral Program

23 24 26 28

Independent Insurance Agents and Carriers: A Relationship Ripe with Opportunity

By Michelle Jackson

By Colby Tunick

By Irene Lopez

By Vertafore

More than 30% of Insurance Agencies Lack Employment Agreements

By Craig Niess

The Gen Z Perspective

By Olivia Scales

2023 EDGE Conference - Wrap-Up

By Rachel Romines

In This Issue

The Independent Insurance Agents of Illinois (IIA of IL) has been providing members with a sustainable competitive advantage since 1899.

7 President’s Message 8 Brett’s 5 Sense 10 Trusted Choice 11 Industry 17 e-Insight

31 Associate News 32 Association Update 33 IIA of IL News 34 Classifieds

info@iiaofil.org | www.iiaofil.org | (800) 628-6436 or (217) 793-6660 | Fax: (217) 793-6744

2009 • 2010 • 2011 • 2012 • 2013 • 2014 2015 • 2016 • 2017 • 2019 • 2020 • 2021 • 2022

Insight is the official publication of the Independent Insurance Agents of Illinois (IIA of IL). The magazine is published monthly for the members of the IIA of IL, with the office located at 4360 Wabash Avenue, Springfield, Illinois 62711-7009; Consumer Website: www.ChooseIndependent.com. The IIA of IL 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 Rachel Romines at rromines@iiaofil.org. For advertising information, contact Tami Hubbell at thubbell@iiaofil.org.

ADVERTISERS

Board of Directors Executive Committee

Chairman of the Board | Jay Peterson, AFIS, LUTCF (217) 935-6605 | jay@peterson.insurance President | Kevin Lesch (630) 830-3232 | klesch@arachasgroup.com President-Elect | Allyson Padilla (618) 393-2195 | allyson@blanksinsurance.com Vice President | Patrick Taphorn, CIC, CSRM (309) 347-2177 | ptaphorn@unland.com Secretary/Treasurer | Cindy Jackman, CIC, CISR (800) 878-9891 x8745 | cjackman@arlingtonroe.com IIABA National Director | George Daly (708) 845-3311 | george.daly@thehortongroup.com

Regional Directors Region 1 | James Sager (618) 322-9891 | james@sagerins.com Region 2 | Ray Roentz (618) 639-2244 | ray.roentz@hwcrins.com

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APPLIED UNDERWRITERS

8

BERKSHIRE HATHAWAY GUARD INS. GROUP

5

EBRM

22

EMC INSURANCE

14

GRINNELL MUTUAL

27

JM WILSON

Cover Tip 2, 16

OMAHA NATIONAL UNDERWRITERS SECURA INSURANCE

35

UFG INSURANCE

6

WEST BEND MUTUAL INSURANCE CO

Region 3 | Christopher Leming (217) 321-3185 | cleming@troxellins.com Region 4 | Bart Hartauer, CIC (815) 223-1795 | hartauer@hartauer.com Region 5 | Noele Tatlock (309) 642-6855 | ntatlock@unland.com Region 6 | Thomas Evans, Jr. (779) 220-6564 | tevans@crumhalsted.com Region 7 | David Jenk, Esq. (312) 239-2717 | djenk@nwibrokers.com Region 8 | Charles Hruska (708) 798-5700 | chas@hruskains.com Region 9 | Lindsey Polzin (630) 513-6600 | lpolzin@presidiogrp.com Region 10 | Mohammed Ali CS (847) 847-2126 | mali@aliminsurance.com At-Large Director | Amiri Curry (847) 797-5700 | acurry@assuranceagency.com At-Large Director | Jeff McMillan (815) 265-4037 | jeff@mcmillanins.com At-Large Director | Patrick Muldowney (312) 595-7192 | patrick.muldowney@alliant.com At-Large Director | Luke Sandrock, CIC (815) 772-2793 | lsandrock@2cornerstone.com

Committee Chairs Budget & Finance | Cindy Jackman, CIC, CISR (800) 878-9891 x8745 | cjackman@arlingtonroe.com Education | Lisa Lukens (618) 942-2556 | salibainsurance@gmail.com Farm Agents Council | Steve Foster (217) 965-4663 | s.foster@ciagonline.com Government Relations | Dustin Peterson (217) 935-6605 | dustin@peterson.insurance Planning & Coordination | Nick Gunn, CIC (309) 691-1300 | nickgunn@nixonagency.com Technology | Brian Ogden (217) 632-2206 | brian@ogdeninsurance.com Young Agents | Renee Crissie (224) 217-6577 | renee@crissieins.com

IIA of Illinois Staff Director of Information and Technology Shannon Churchill - (217) 321-3004 - schurchill@iiaofil.org

Director of Government Relations Evan Manning - (217) 321-3002 - emanning@iiaofil.org

Director of Education and Agency Resources Brett Gerger, CIC - (217) 321-3006 - bgerger@iiaofil.org

Office Administrator Kristi Osmond, CISR - (217) 321-3007 - kosmond@iiaofil.org

Accounting & Admin Services Tami Hubbell, CIC - (217) 321-3016 - thubbell@iiaofil.org

Director of Communications Rachel Romines - (217) 321-3024 - rromines@iiaofil.org

Director of Human Resources, Board Admin Jennifer Jacobs, SHRM-CP Director of Membership Services Tom Ross, CRIS, CPIA - (217) 321-3013 - jjacobs@iiaofil.org - (217) 321-3003 - tross@iiaofil.org Sr. Vice President/Chief Financial Officer Mark Kuchar Products & Services Administrator Janet White, CISR - (217) 321-3015 - mkuchar@iiaofil.org - (217) 321-3010 - jwhite.indep12@insuremail.net Chief Executive Officer Phil Lackman, IOM Director of Prof. Liability & Ins. Products Carol Wilson, CPIA - (217) 321-3005 - plackman@iiaofil.org - (217) 321-3011 - cwilson.indep12@insuremail.net Central/Southern Marketing Representative Lori Mahorney, CISR Elite - (217) 415-7550 - lmahorney@iiaofil.org

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The NFL Carrier Draft The NFL Draft. Always a time where (as Bear fans, stay out of this Taphorns) we can take a look at our team, reassess, and dream of what will be in the coming months.

The last few years, the draft has occurred during our Federal Legislative Conference. The discussion of what could be often trails into what could have been when I start discussing draft picks with my fellow agents from Illinois as well as agents from other states. I forlorn over the picks the Bears didn’t make that end up becoming prominent stars and instrumental pieces in championship teams, outside of Chicago.

This year we took it one step farther. This year we compared the NFL Draft to the insurance industry (possibly because I needed to write this article) but also because we are insurance geeks and sport and business are always great topics of conversation.

So here it is, if we had a draft of Insurance Carriers, who would you choose and why? What factors would go into the selection of those carriers.

This topic was broached to the agents at the bar, ( I mean table) and this is what was decided.

You need to have your A carriers, B Carriers C and D Carriers.

A Carrier: Always Quoted, first choice and business is always driven towards this carrier, strong base commission, good profit sharing program and relationship is something valued by all parties in the agency B Carrier: Necessary to have based on industries/niches written, not first choice but always quoted C Carrier: Developing a relationship, may need it to compete for business in a niche you have, may be regional, or may be a new niche that you are trying to get into.

Finally, we added a D Carrier: this is the company that every agency has, but no one knows why. They don’t get quoted, they never show up…someone should have cancelled the contract but no one ever shows up to ask for production. Often, we hold onto the contract because we know they will help that one client.

No matter what level the carrier, Relationship, Technology, Underwriting, Coverage, Claims and financial sustainability are all attributes that are valued in the carriers the agents look for and they all play an important role in our independent agent ecosystem.

Kevin Lesch - IIA of IL President - (630) 830-3232 - klesch@arachasgroup.com may 2023

insight

7

Personal Lines Innovation This hard market will set you apart from your competitors.

Whether that be bad or good is up to you and your agency team. More than ever, consumers will be looking to save a buck but maintain “FULL” coverage (whatever that means).

Agents that merely have the goal to save money and do so by cutting coverages will regret that decision when it comes to claim time. You have to ask yourself and your client, “How much did we really save if we have a claim that isn’t covered or not fully covered?” E&O practices will be super important during this time. You will need sign-offs for everything, as people could deny that things were ever offered when it comes to claim time.

You will need to get creative with coverages, a combination of coverages, and deductible levels. With inflation, claims will cost more, and can take longer to repair the damaged property. All of these factors create increased exposures. Proper insurance coverages have never been more important than now, and the better you do this, the more likely you will retain these clients on the other side of this inflation spike. This is where you show your worth to your clients and really show them the peace of mind they are all looking for when they purchase insurance. You can take away a worry from them so that they can focus on other things.

People do not want someone they purchase something from to create more problems for them. They want those people to solve their problems or stop problems before they happen. For instance, when you buy a car, you want

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to get from point A to point B and not break down and end up in the shop all the time. The same goes true for insurance. People want protection if they have a loss and do not want claims that aren’t properly covered. The most important issue is providing your clients with the most appropriate coverage to have this peace of mind. No one knows your geographical area and claims history of your area more than you.

Price will become your biggest hurdle in a hard market, and there are some ways to lessen this issue. You can raise deductibles. You can bundle coverages. You can sell higher umbrella limits. You can search for innovative insurers that provide quality, affordable coverage (the beauty of being independent). Work with your company representatives to develop creative coverage solutions that provide the best and most affordable options. When a coverage is going to add $120 a year to their policy, present it as $10 per month - $10 sounds way better than $120. At the end of the day, give them real-world examples of clients that didn’t have the proper coverage when a claim occurred and how it negatively impacted the trajectory of their financial well-being. The worst conversation you can have as an agent is when you must tell someone something is not covered. The best conversation is when you tell them not to worry because it is covered. Let’s create more of those best conversations and less of the worst conversations.

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may 2023

Our company partners are part of this as well, and they will have to get very creative to keep pricing down and coverages stable. You will be able to tell the company partners that are trying to navigate this strategically with you instead of against you very quickly. Those company partners that innovate and keep pricing reasonable will earn your loyalty on the other side of this inflation spike as well.

The companies that are in it to maximize agent and consumer experiences will do much better, in the long term, than those that want to maximize profits. I am a firm believer that money and reputational profits will be maximized when a company truly follows its mission statement. Many people don’t consider reputational profits (or, as my accountant friends say, goodwill) as much as monetary profits. I would contend that reputational profits will carry companies through the hard times and make the good times better. Our company relationships will really set the stage for our positive or negative perception of our reputation. Clients won’t notice when those relationships are seamless, but they will definitely notice when those relationships are negative.

One of the things your clients do have is memories. “Did Brett treat me well during the hard times, or did ABC company treat me well during the hard times?” This is where our extremely educated insurance agents will really provide their worth. They will be more creative as they understand the ins and outs of the coverages they are presenting. If you are just doing your 24 hours of continuing education every three years, which includes your three hours of ethics, then you are going to get the minimum service. In these times, you need to maximize your service to your clients, not minimize it. Referrals will come in bunches if people have a great experience during a trying time, and there is no better advertisement than word of mouth.

Brett’s 5Sense (inflation)

Communities in a hard market will be more important than ever, showing the cream rising to the top. If a client sees you out there supporting your community, they will be more likely to support you, even if it means spending a little more money. Three keys are: 1. Bundle, Bundle, Bundle 2. Innovate 3. Community involvement (more than ever as people look at who is helping during times of need).

Do business with companies that treat you well and have collaborative solutions. Develop an agency mission and follow that mission. Consistency is the key to success, along with being adaptive to circumstances while maintaining that consistency.

As always, this is just Brett’s 5 Sense (hopefully we get inflation under control and can return to 2), and I hope it was helpful. If you need any clarification or have any suggestions for future articles please email me at bgerger@iiaofil.org.

Brett Gerger | IIA of IL Director of Education & Agency Resources bgerger@iiaofil.org | (217) 321-3006 may 2023

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Take Advantage of Everything Trusted Choice Has to Offer

Utilize Trusted Choice® Member Resources to enhance your digital marketing efforts for your agency. The Trusted Choice member resource website offers a variety of resources to maintain a robust marketing strategy, as well as trainings related to topics such as enhancing your agency’s website and advertising on social media. All resources are free to members and can help you put your best digital foot forward.

trustedchoice.independentagent.com

industry | INSIGHT

Commercial Rates Up In First Quarter 2023 Steady, Moderate Rate Increases Continue

By MarketBarometer

The composite rate for commercial property and casualty rates increased in a deliberate, modest fashion in the first quarter of 2023 at plus 5%.

The only coverages of notable change were general liability, down from plus 6.7% in Q4 2022 to plus 4.3% in Q1 2023 and EPLI, down from plus 6.3% to plus 3.7%.

By account size, rates decreased for all sizes except those with premiums of $250,000 to $1,000,000 which were up in comparison to Q1 2022 from plus 4% to plus 4.7% in Q1 2023.

Rates by industry group reported transportation as the only quarter over quarter rate increase, which was up from plus 7.3% in Q4 2022 to plus 8% in Q1 2023.

“It’s not surprising to see rates holding steady in the first quarter,” says Richard Kerr, CEO of Novatae Risk Group.

“We will get a better measure of overall composite rates for 2023 in the next two quarters.”

Personal Lines Rates Decrease Slightly US Composite Rate Down Slightly to Plus 5% in First Quarter of 2023 Across the US, rates for personal lines coverage moderated slightly.

“The rating environment for personal lines is tracking with Q4 2022, which is to be expected,” says Richard Kerr, CEO of Novatae Risk Group. “The real action in personal lines comes during wind and wildfire season. However, even now, catastrophe exposed high value property owners are struggling to find coverage without experiencing significant rate increases and restriction of terms such as higher deductibles and reduced coverage.”

Homeowners and personal articles insurance on a composite basis were down slightly in the first quarter of 2023.

Automobile insurance rates are increasing at plus 6.3% for Q1 2023 versus plus 5% in Q4 2022.

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout’s analysis of market conditions. These surveys help to further corroborate MarketScout’s actual findings, mathematically driven by new and renewal placements across the United States.

A summary of the first quarter 2023 personal lines rates is set forth below.

Personal Lines

may 2023

Homeowners under $1,000,000 value

Up 5%

Homeowners over $1,000,000 value

Up 6%

Automobile

Up 6.3%

Personal Articles

Up 3.3% insight

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Personal Amids

Is

Conventional operations in the personal-lines insurance industry are no longer working. Rising loss costs, inflation and growing risks all pose challenges to the insurance industry. However, these challenges may be overcome by targeted underwriting and digitalization.

Insurance is a cyclical business from a performance perspective, but it’s fair to say we’ve never seen a cycle like the one we’re in now. Traditionally, the personal-lines industry operated conventionally with customers buying bundled policies, not modifying their existing coverage and rarely switching carriers.

Now, personal-lines insurers face an uncertain future as they deal with various challenges like inflation, supply chain disruptions, climate change, cyber risk and a rise in digital fraud. These trends push loss costs higher, threatening future profitability.

However, with risk comes opportunity. The pandemic disrupted people’s lives, so consumers expect more from their insurance company. As a result, insurers must deliver innovative products and solutions to meet customer demand and enjoy a competitive advantage in the market.

Industry Challenges The industry and economy dynamics are challenging the personal-lines insurance industry, making profitability and growth difficult. Some industry challenges carriers face include rising loss costs, economic and social inflation, and evolving risks.

Insurers face an uncertain future as they deal with various challenges like inflation, supply chain disruptions, climate change, cyber risk and a rise in digital fraud. These trends push loss costs higher, threatening future profitability.

However, with risk comes opportunity.

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insight

1. Rising loss costs Cost of labor, parts and materials contribute to the increase of loss costs. The impact of natural disasters and catastrophes results in more claims, too. Also, driving patterns have returned to pre-pandemic levels, leaving room for more accidents and claims. While safety devices like telematics may help prevent accidents, those features are yet to be widely adopted.

2. Economic and social inflation Higher inflation has caused expenses, claims, demand for goods and supply-chain issues to rise, as well. As a result, premiums are going up and causing customers to leave their existing insurers to purchase new policies at lower rates. For insurers, this means that restoring profitability is harder because if they raise their premiums, they risk losing customers.

For example, TransUnion’s Q2 2022 Insurance Shopping survey showed customer retention challenges for insurers.

Over the previous six months, 39% of insureds shopped for auto insurance, and 21% of those shoppers switched; 30% of insureds shopped for homeowners insurance, and 61% of those shoppers switched.

Additionally, state insurance regulators are reluctant to approve broad rate hikes as they try to tamp down inflation. Even if regulators allow it, insurers risk losing enough customers to offset their higher rates.

And, social inflation is impacting the industry. Social inflation refers to the impact of litigation costs on claim payouts and loss ratios. It threatens the affordability of coverage because it is difficult to predict.

3. Growing risks With so many online insurance transactions, digital fraud (and cyber risk) is rising. Cyber security risks (data breaches, ransomware attacks) are becoming more common. The cost of cybercrime is expected to hit $10.5 trillion by 2025, according to a recent report.

Additionally, in a hardening market, many personal-lines carriers are spending less money on advertising and taking action to slow new business down so they have time to determine prices.

may 2023

al Insurance Innovation dst Industry Challenges

s It Possible?

Lastly, catastrophic climate and weather events, such as hurricanes, are expected to increase in frequency and severity, as are smaller-scale events, such as hail storms, tornadoes and wildfires.

Industry Opportunities With only a few carriers commanding most of the personallines insurance market and hundreds of other insurers making up the rest, competition is fierce. But there are still opportunities to win market share and improve profitability.

Many carriers renew policies year after year without reviewing the risk properly. Failure to adequately price risk leads to missed opportunities. Instead, use targeted underwriting to review your existing book of business to see if and how it has shifted. Re-underwriting is a non-rate change activity that can improve your bottom line without waiting for rate to earn through.

For example, if customers renovate their homes, they may be under-insured depending on the extent of the changes.

For auto policies, several factors cut into profitability, including garage rate evasion, vehicle eligibility and recent violation history. All of these risks would likely impact customers’ premiums, but insurers need the correct data to help identify these risks and price policies properly.

Another tactic is to leverage solutions to provide expense savings or improve pricing. For example, inflation impacts direct mail with postage costs rising and supply chain issues delaying the delivery of envelopes. Instead, increasing digital marketing can allow you to reach more people at a lower cost.

Additionally, some personal-lines insurers offer personal cyber insurance to cover broader cyber risks beyond basic identity theft as an add-on to homeowners, renters or condo policies. However, as of now, only a few companies offer this type of coverage, which provides an opportunity for others to follow suit.

Digitalization The pandemic accelerated the adoption of digital capabilities to replace outdated technology, improve may 2023

By Michelle Jackson

efficiencies and reduce expenses. Luckily, consumers gravitate toward digital experiences and are more comfortable communicating with insurers through digital interactions.

While digitalization offers opportunities for carriers, it also brings challenges - namely, digital fraud. From 2019 through 2021, digital fraud in the insurance industry spiked 54.3%, and from the second quarter of 2021 to the second quarter of 2022, it went up 159% - more than any other sector surveyed, according to TransUnion data.

The insurance industry is a significant target of digital fraud because of the large amount of sensitive consumer data insurance carriers possess. And, because some insurance data systems haven’t been updated recently, they may be more attractive for fraudsters to steal data and use it in other types of fraud. Much recent fraud involves data theft to be used in other industries. Cybercriminals aren’t necessarily filing fake insurance claims; they’re using stolen data to submit fraudulent claims for unemployment benefits or tax returns.

The cost of fraud impacts the loss ratio and increases operational expenses, impacting profitability and increasing consumer premiums. To combat this, a more integrated approach layering different fraud detection capabilities can help build consumer trust and profitable growth will help insurers.

What’s Next?

As insurers deal with the ongoing challenges and trends impacting personal-lines insurance policies, the opportunities to increase profitability require out-of-the-box thinking and innovative solutions.

Insurance carriers need to continue doing business as usual, but when there’s extreme pressure from these converging challenges, it’s worth considering a different, more innovative and data-driven approach during difficult economic times. The business can grow - but with datadriven solutions and technologies.

Michelle Jackson is Senior Director, Insurance Strategy for TransUnion and leads the personal lines insurance market strategy team. insight

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Why

RENEWALS are the

WORST TIME for ACCOUNT ROUNDING Out of the entire year, account rounding within 30-days of the policy expiration has the lowest likelihood of success.

By Colby Tunick

In insurance, customers are only likely to hear from their insurance agent when filing a claim or when it is time to renew their policy. This turns the renewal period into a high-stakes game to learn about changes to an insureds’ needs, and upsell or cross-sell (i.e., account rounding) appropriately. What may come as a surprise though is that out of the entire year, account rounding within 30-days of the policy expiration has the lowest likelihood of success.

Irregular communication with their insurance professional makes most insureds apathetic about spending more money or purchasing another policy. While we are still analyzing the data to confirm the root cause, early results support that the less an insured interacts with their insurance professional or company, the exponentially less likely account rounding successfully during renewals will be.

“It is clear that the insurance industry has a billion-dollar communication and account rounding problem.”

Account rounding during renewals is an uphill battle.

Especially if there is an exposure change that increases the final price of the policy renewal, insureds are likely to defer new purchases. This makes it difficult to multi-line existing accounts, while at the same time increasing the likelihood that the insured will churn.

We uncovered this insight after anonymizing and aggregating hundreds of thousands of policies and reviewing the data for changes to an insureds’ existing coverage. The 30-day window around the renewals period held true regardless of the type of insurance being sold or the size of the premium. While there may be specific agencies or brokerages which are the exception that proves the rule, it is clear that the insurance industry has a billiondollar communication and account rounding problem.

RENEWAL BLUES

According to a new survey by Collinson, less than 50% of insureds hear from their agent, broker, or carrier more than once a year. Perhaps underestimating their appetite for communication, or misunderstanding their motivation for opting out, insurers have begun to shy away even further from reaching out to customers. Respondents said their exchanges were mostly limited to transactional matters like renewals notices (79%); policy updates (67%); and terms and conditions amendments (37%), leading to disinterest and disengagement from consumers.

HOW TO BETTER ACCOUNT ROUND

Insurance professionals need to address purchasing apathy by focusing on digitization efforts on tools that allow proactive and on-demand communication. While insurance agents tend to have high satisfaction scores for insured communication, many lack tools to digitally engage policyholders. In 2020, 44% of US insurance agents flagged digital tools as the most significant resource to invest in, along with digital portals to proactively engage policyholders and convey important news.

During the renewals period itself, insurance professionals should double-down on reducing churn, rather than viewing this periodic interaction as a sales opportunity.

Increasing customer retention rates by 5% increases profits by 25% to 95%, according to research done by Frederick Reichheld of Bain & Company. Renewals are challenging enough, especially in the current climate of rising continued...

may 2023

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premiums and carriers changing their risk appetite. Based on preliminary results, account rounding is on average most effective 120 days before or after the renewal period.

As such, insurance professionals should schedule a followup during this window and have any additional policy conversations during this time.

When a prospect or insured has an immediate insurance need, such as adding a new vehicle, new family member, etc., the optimal time to approach them about covering the risk is as soon as possible. Based on the data we reviewed, following up sooner for new risk equates to a high likelihood of making the sale. Interestingly, this window may also present a foothold for competitors to take business, but more research is required to confirm this.

For insurance sales, a constant challenge has been, and remains, how do we know what we do not know? This challenge equally applies to timing account rounding as it does learning about new needs, and estimating churn risk approaching renewals. Please note that the preliminary results above are averages, with significant deviation when broken down into age, geographic area, and exposure sub-groups. So while for an average insured, following up within 120 before or after the renewal period is optimal for account rounding, for some, it may be 7 or 140 days.

Digitization, and more specifically digital transformation, provides a way to pinpoint when account rounding activities should occur, and the exact policy or service that the client will be interested in. Acquiring the capabilities to understand what every prospect or insured wants allows companies to become competitive against larger players, and increase market share accordingly.

CREATING MEANINGFUL CHANGE

Don’t just take our word for it. We recommend running a report from your agency management system that breaks down the proportion of new sales 30-days before and after the renewal period versus the rest of the year. We would also love to hear from you if your results align or are drastically different from what our findings are. Feel free to reach out to us at support@refocusai.com.

Colby Tunick is the CEO of ReFocus AI, a retention analytics platform for insurance brokers. When not helping brokers increase their revenue by 2%, you can find him running on & mountain biking on San Diego trails. He can be reached at colby@refocusai.com.

During the renewals period itself, insurance professionals should double-down on reducing churn, rather than viewing this periodic interaction as a sales opportunity.

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e INSIGHT -

online journal at www.iiaofil.org/Resources/Insight

M AY 20 23

INSIGH T

I N S U RS TA R T I N G A N ANCE R E F E PRO RRA E

Plus

GRAM

V E RY T H IN G YO W hy R U NE E D TO Time foenewals ar e KNOW the r Accou nt Rou Wor st nding T he G en Z P er spec tive

L

Five Tips to Strengthen Broker and Carrier Partnerships

By ThreeFlow may 2023

In this month’s e-Insight. insight

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EVERYTHING YOU NEED TO KNOW ABOUT

STARTING AN

I NSURANCE REFERRAL REF ERRAL PROGRAM

By Irene Lopez

Referral programs are a powerful tool for insurance companies to generate new business from an existing pool of customers. Learn more about why you need an insurance referral program and best practices for setup in this detailed guide.

Insurance referral programs are a powerful marketing tactic for all types of insurance agencies to scale their growth.

Aside from generating new business, insurance referral programs are also a great way to encourage and track your agency’s word of mouth.

In this article, we cover why your insurance agency needs a referral program, best practices when creating your own insurance referral program, plus practical examples of how these referral marketing strategies have been used by realworld insurance companies.

What is an Insurance Referral Program?

An insurance referral program encourages your clients to share your insurance agency with their peers, and then rewards them with an incentive for each peer who becomes your client. When done right, an insurance referral program helps you bring in new clients, gives you instant visibility on where your referrals come from, and scales your insurance agency’s growth.

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Why Do You Need an Insurance Referral Program?

An insurance referral program is a low-cost yet effective way to get promising new leads for your insurance agency.

Developing an effective insurance referral program requires strategic thought, creative referral ideas, and a little bit of work. But the results can be well worth it.

There are many reasons why you should consider an insurance referral program.

• Referrals can help reduce your customer acquisition costs. You are leveraging your existing customer base to refer leads to you, and their word of mouth is practically free.

• Referral programs make it easier for customers to share information about your insurance agency and more motivating thanks to offered incentives.

• Even if customers are satisfied with your agency, they may need an extra push before they refer new business may 2023

to you. Not every devoted client is going to refer leads on their own otherwise. Your referral program incentive creates the needed motivation.

• Referred leads have a higher chance of becoming customers compared to other leads because they trust their peer’s recommendations far more than traditional ads.

• Research points out a whopping 92% of global consumers trust earned media over other ads. This includes reviews or word-of-mouth recommendations from friends and family.

• People with similar backgrounds, tastes, and lifestyles tend to make similar choices.

• Insurance referral programs can be applied to any form of insurance with the same potentially great results. This includes life insurance, home insurance, auto insurance, business insurance, and real estate insurance, among many other types.

• Referred customers are more likely to bundle multiple types of insurance coverage (if you offer them). For instance, they might start off wanting life insurance.

But while talking to them, you may be able to show them the benefits of taking homeowners’ insurance or auto insurance as well. Because they trust their friend’s recommendation of your agency, they may be willing to make more of an investment in you.

• Referred customers are more likely to remain your customers for longer periods, giving them a higher customer lifetime value. Again, that happens because they trust their friend’s recommendation.

• Customers who recommend you to their friends also develop a stronger relationship with you, as they become more invested in your success.

• Insurance referral programs let you easily track every referral your customers make, and use the data you collect about your program to improve your success. It’s pointless to have a referral program without any means to measure how it’s doing. For example, tracking allows you to find your best sources of lead generation, whether it’s specific individuals or your social media channels.

• Referral programs let you accelerate the growth of your agency and effectively scale. Done right, you will get exponentially more leads for potential customers over time.

Know Your Customers

Before You Start an Insurance Referral Program

Customer service is uniquely important for insurance sales because most insurance products in the same space (i.e., automobile, home) are relatively similar. The customer experience is actually the biggest differentiating factor.

• Who have been loyal customers the longest? If you’ve been keeping in touch with the customers and have a long-standing relationship to fall back on, they could be potential first picks.

• Use NPS (Net Promoter Score) surveys to see who is most likely to promote you. An NPS survey is used to measure customer satisfaction by asking how likely a customer is to refer clients to your insurance agency. Focus on the customers who love you the most. These are your “promoters,” or those who receive a score of 9 or 10 on the NPS scale.

• Find out if some customers have already referred friends to your agency, without prompting. These are potentially your brightest superstars. They’re happy customers who are eager to share the news with others in their circle.

You’ll need to provide a stellar experience to convince a customer to buy and stay with your business.

Know the Laws That Govern Insurance Referrals in Your Area

There are a couple of things to consider before you develop and start your own insurance referral program.

Think of your program as a machine with many different moving parts that need to work together in order to run efficiently.

Make Sure You Have Stellar Customer Service

Nothing sells quite like customer service, especially in insurance.

And having a strong base of customers is essential to referral program success. For insurance agents, customer experience is probably the most important reason why customers will want to recommend you. may 2023

Knowing your existing customers goes a long way in getting more new referrals. It’s a bit like ears-to-theground market research. You should answer the following questions about your clients: • How do they get information about your insurance agency? From who or where did your current customers learn about your agency and services? This gives you an idea of channels that you could explore further, to promote your referral program.

• How do they communicate with friends? Find out their preferred channels and use the same channels for sharing in your referral program. This helps them easily refer others in those same channels.

• What motivated them to purchase insurance from you vs. a competitor? This is your USP (Unique Selling Point).

Your USP is usually an advantage that’s unique to you and helps set you apart from the competition • What rewards would motivate them to share with peers, friends, or family members? Information like this can help you develop referral rewards your current clients would be motivated to earn.

Know How Much it Usually Costs to Acquire a New Customer

Customer acquisition costs are helpful for business owners to understand the difference between how much you’re earning from your customer vs. how much you’re spending to gain the customer.

This customer acquisition cost will help you determine how much you want to reward for referrals.

This may be a no-brainer, but at no time should your referral rewards eat so much into your budget that the program is no longer profitable. Your customer acquisition cost shouldn’t be more than the profit you’re generating from your customer.

Determine Which Customers You Should Promote Your Program to First

Look for customers who are likely to be enthusiastic about testing your program.

Your insurance agency referral program can be affected by laws specific to your area. continued...

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In the US, the laws that govern insurance referral programs can vary from state to state. Searching online can help you get an idea about the basics.

But it’s also recommended to get advice from legal experts.

You don’t want to end up breaking the law simply for not knowing about it.

A basic example of one such legal concept is when you reward your customers with a ‘finder’s fee,’ say in the form of cash, gift cards, or credit towards a policy. Sometimes, you are only allowed to do this as long as you don’t reward other licensed insurance agents for referrals.

Best Practices for Insurance Referral Programs

Before you develop your referral rewards programs, factor in these tried-and-tested referral strategies to enhance your offerings and get the best results.

Offer Valuable Rewards for Referrals

Rewards motivate existing customers to refer their friends.

Do the initial market research to find out what types of referral rewards will genuinely entice your customers. You don’t want to end up with a referral rewards program no one participates in.

• Cash, gift cards, and discounts are seen to be the most motivating insurance referral rewards for your current clients.

• Cash works for customers who love monetary incentives and immediate gratification.

• Gift cards and discounts on premiums can be motivating for practical-minded customers who are looking for things to make their lives easier or better.

• Cash, a discount on a later premium payment, or a gift card are effective rewards for new customers.

Here are a few ways you can promote your referral program: • Highlight information about our program on your website. Make sure it’s easy to find and located in a prominent position on your website. For instance, you could add a hero image or a banner on your homepage.

You could also do referral buttons on your top and bottom menus leading the user to more information on your program.

• Develop email sequences focused exclusively on your referral program. Avoid bombarding your clients with emails by turning them off in the process. And remember to send promotional emails only after you’ve sent emails providing value and sharing helpful resources first. It’s a delicate balance, so err on the side of caution.

• Add a promotional section for your referral program in a clearly visible section of your email newsletters.

• Add a promotional link at the bottom of your email signatures. It’s a more discrete method of marketing, but it can still help you cover all the bases.

• Share information about your referral program across all your social media accounts.

• If you have a customer portal, remember to add links or highlighted sections that talk about your referral program on the portal too.

• Don’t be afraid to ask for referrals in direct conversations with customers.

PRO TIP: Be consistent. Directly ask for referrals on a recurring basis, especially among your best customers.

For example, after someone has been a customer for a year, you might personally remind them of your referral program every six months.

It’s always best to reward both the referring customer and the new customer, with a “double-sided” reward structure.

Keep track of how often you use these direct reminders, though, so you don’t annoy a customer.

This strategy goes a long way to generating customer referrals for life. Of course, you’ll need to ensure that referral rewards like these are legal in your state or region.

Make Your Program Easy to Use and Understand

PRO TIP: Rewards should be available every time a customer makes a successful referral, to create the most effective growth engine.

Even better? Offer tiered rewards, where the incentive increases in value after someone makes a certain number of successful referrals. So, as the number of referrals increases, so does the value of the incentives for your clients.

A tiered rewards structure can be a highly motivating incentive for your customers to sign up for your insurance agency referral program.

Promote Your Program in a Variety of Ways

After you build your program, it’s time to start promoting it. Customers need to know the program exists so they can share it and earn rewards.

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Clients often have short attention spans when browsing online. Once you have their attention, you want them to complete the action of referring someone to you before they leave the site.

Make your referral recommendation process simple, or your customers will just leave and go elsewhere.

• The golden rule is for your clients to refer a friend in the least number of clicks or taps possible. Avoid rerouting to another page where customers have to fill up yet another form.

• Give your customers flexibility in how they make referrals. Customers should have multiple options for sharing, including social media channels, email, and/or a unique referral link that can be shared almost anywhere.

• Customers should know exactly what you want them to do when they skim your referral landing page. Do they know where and how they need to submit the referrals?

Do they know they have options for how to share it with friends?

• Lay out all the benefits clearly so customers know exactly what’s in it for them. Insurance companies, in particular, promote the intrinsic benefit of helping a friend get access to great insurance. may 2023

A referral call to action is key to accomplishing this. We’ve created a comprehensive guide that shows you exactly how to create effective referral call-to-action buttons.

PRO TIP: Create a referral FAQ page that outlines program terms and common concerns, to eliminate other obstacles that may keep people from referring friends.

• The best FAQs address all the possible questions that your customer may have about joining the program.

• Stick to simple and easy-to-read and understand responses.

• Avoid making the FAQs too wordy or too detailed.

Write Notes of Appreciation for Successful Referrals

Human nature thrives on appreciation. Sometimes we can do things for others without expecting anything in return.

But we always feel validated and valued when someone appreciates what we’ve done for them. It’s a great concept to apply in insurance referral programs.

• Publicly thank customers who referred their friends in your email newsletters and social media accounts, when their friends sign on to become customers.

• Privately recognize these successful referrals as well – send thank-you notes to existing customers when their friends become your new customers.

PRO TIP: If you offer insurance to businesses and someone’s referral resulted in a new business client, consider sending a shareable gift to the referring client along with the thank you note (such as a chocolate box or charcuterie board).

This gift might encourage others at the business to make referrals as well. It shows quite simply how much you appreciate your clients’ support.

Use Referral Software to Track, Manage, and Automate Your Program

As you grow your agency and business starts to flow in, you may find your manual tracking methods no longer work very well.

Manual tracking can also be inefficient if you have more than one business or insurance type on your plate.

This is where referral marketing software comes in. The right referral software streamlines your program creation process and removes the hassle of manually managing your referral rewards program.

Automation features can help you save time. You can set up manual tasks to run repetitively on their own, and spend more time on the more crucial task of converting leads to customers.

Thanks to the referral links it generates, referral software lets you track exactly where every referral came from and instantly issue rewards for successful referrals.

Referral software also collects program data used to measure success and refine your program structure.

Knowing where the kinks are in your strategy can help you figure out how to set things right. You’ll also learn which of your strategies are really moving the needle, so you can focus on replicating or scaling them.

PRO TIP: Referral Rock software lets you set up your program in days (not months), with expert support at every step.

Customize your program and take advantage of automated tracking and promotional features.

Insurance Referral Program Examples

Now that we’ve covered the most important aspects of developing your own insurance referral program, let’s look at some real-life case examples. We’ve hunted down five clear examples from the insurance industry that show you how to practically apply the strategies that we’ve just explained. To view the program examples, go to https:// referralrock.com/blog/insurance-referral-program/.

Conclusion

Insurance referral programs can be a game-changer if you want to take your business to the next level.

Do market research on the types of rewards your customers will appreciate the most and factor these into your reward programs. Promote your program across all your sales channels. Make use of NPS surveys to see how you’re doing, and to make changes if needed based on feedback.

And of course, make sure you’ve chosen the right referral software to maintain your program!

Aside from having a great program, the success of the insurance referral program can rest heavily on how great your customer service and relationship skills are. Appreciate your clients and focus on the relationship so your customers are just as vested in helping you grow your business.

Irene Lopez is Content Writer for Referral Rock. Referral Rock (https://referralrock.com/) is the leading referral software for B2B and B2C brands in all industries. Over 1,000 businesses use Referral Rock to turn their goldmine of customers and fans into powerful brand ambassadors.

Drive more shares, leads, and sales with refer-a-friend programs that integrate across the customer lifecycle – no developers required. Referral Rock offers best-in-class referral tracking, sharing, and engagement experiences, with concierge onboarding. To learn more about how Referral Rock can help you scale through referrals, connect with our sales and success teams at https://referralrock. com/contact/.

You won’t need to track and trace every single referral and make sure they’ve been paid. This feature can be a huge benefit as you start to scale. may 2023

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may 2023

Independent Insurance Agents and Carriers: A Relationship Ripe with Opportunity

By Vertafore In a recent survey of over 1,000 independent agency professionals in the U.S., we found several noteworthy trends when it comes to agency relationships with their carrier partners. This relationship can be complicated, and varies agency to agency, but there are some interesting insights when it comes to communication, technology, and how the end-insured come into play.

The Value of the Independent Agent While direct-to-consumer (DTC) insurance products especially for simple risks - have picked up market share in recent years, the independent agency model continues to have tremendous value for both consumers and carriers.

When we asked our respondents why clients choose to work with an independent agency, several trends were obvious: • Consumers see their agent as a source of risk expertise and as a trusted advisor • Independent agents bring a unique local perspective to their client interactions • Clients feel their agent knows and understands them on a personal level - which is especially helpful when it comes to ensuring they have the right coverage • Working with an agent provides comfort when filing a claim and their personal touch offers peace of mind • Because they work with multiple insurers, independent agents can secure the best coverage at the best price for their clients

How Agents Work With Carriers It is evident from these answers that clients value the personal relationship with their agent - and that’s why carriers continue to invest in improving their agent experience. But what does that experience look like today from the agent perspective?

Communication: When it comes to communicating with their carriers, many agents still rely on traditional methods.

Nearly 60% of agents rely on email, while 27% tend to pick up the phone. Just 11% primarily use the carrier’s website. Fewer than 2% interact via text or in-person.

Many agents report using a combination of several communication methods.

Compensation: We asked respondents about their satisfaction with their compensation from carriers. The good news: most agents view their compensation favorably and just 3% cite it as a major challenge to working with their carriers. At the same time, the responses show there’s room for improvement, particularly around incentive may 2023

programs. Below are the most common answers for each question: I understand my compensation package with each carrier: • Always: 42% • Sometimes: 37% I am paid in a timely manner: • Always: 57% • Sometimes: 26% I can view my compensation information at any time: • Always: 36% • Sometimes: 31% The carriers I work with have great incentive programs: • Always: 15% • Sometimes: 50% • Unsure: 25% Onboarding: From the agent perspective, carriers have some work to do getting them onboarded and ready to sell. We also asked respondents to rate, in general, their onboarding experience with the carriers they work with.

Less than 20% of agents report feeling “very satisfied” with their onboarding. The majority of agents are more ambivalent: 43% answered “somewhat satisfied” and 30% answering “neutral.”

Challenges: A third of survey respondents indicated that their biggest challenge when working with carriers was underwriting response. The second most common challenge was appetites, at 28%. Inconsistent rates and connectivity were the next most common, at 16% and 12%, respectively.

Agencies and Carriers in Sync It is clear from the data that while agents value their carrier relationships, there is opportunity for carriers to improve their agent experience. Investing in that experience benefits the entire insurance distribution channel - from enabling carriers to get their products to more consumers to ensuring agencies are placing their business with the right partner for them and their clients. Technology solutions that streamline the agency-carrier relationship - including onboarding, compensation, and compliance - are essential for carriers to become a partner of choice in the distribution channel.

This article originally appeared on the Vertafore blog at https://www.vertafore.com/featuredblog/independentinsurance-agents-and-carriers-relationship-ripe-opportunity.

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More than 30% of Insurance Agencies Lack Employment Agreements

By Craig Niess

One of the factors that we consider when determining the risk of an agency is whether or not the agency has producer agreements and employment agreements in place. It is essential for agencies to have both non-competition and non-solicitation agreements in place with their employees during normal operations, and especially when going through an ownership transition.

An employment agreement is a contract between the agency and the employee that delineates the expectations of both parties. Employment agreements typically cover items such as compensation, duties, length of employment, and specifics about termination.

To make the employment agreement stronger for producers, an agency should address ownership of the book of business, non-solicitation, and non-competition.

These additional factors will bolster the underlying value of the agency by protecting the renewal revenue stream.

In this article, we will explore the various provisions in an insurance agency employment agreement, the importance of having these agreements in place, the impact they have on agency valuations, and the risk over 30% of agencies are taking by not having employee agreement.

Core Components of an Insurance Agency Employment Agreement Every employee agreement has standard provisions, including duties of the parties, consideration, term, termination, indemnification, confidentiality, severability, assignment, waivers, jurisdiction, and other standard 24

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miscellaneous provisions. However, insurance agency employment agreements have several additional provisions that provided added protections for agency owners to ensure they can effectively protect their businesses, invest in employees, and have mutual benefit for the parties.

The following provisions are essential to insurance agency employment agreements.

Ownership of the Book of Business In the producer agreement, it is essential that an agency stipulates exactly who owns the book of business. If it is not explicitly stated in the agreement, the agency will face exposure and a potential loss of revenue, along with a decrease in agency value.

Non-Solicitation A strong non-solicitation clause ensures that, upon termination, the producer will not prospect or solicit the agency’s clients. Non-solicitation agreements typically stipulate the time period (normally one or two years) that the solicitation of agency clients on behalf of any person, firm, corporation, or partnership is prohibited.

Non-Competition The non-competition language in a producer agreement is meant to protect the agency from the direct competition of a former producer, either as an individual or as part of another firm, for an agreed amount of time. The language is usually structured in a way that will not unreasonably prevent the ability of the ex-employee to find other employment. Sometimes there are geography may 2023

clauses inserted that stipulate that the ex-employee cannot compete in a radius of “X” miles from the agency.

While these agreements are coming under federal scrutiny with the recent Federal Trade Commission (FTC) proposal to ban non-compete agreements, we still strongly recommend agencies include these provisions in their employment agreements. While it is possible the FTC could ban these provisions, it will take some time for them to reach that decision, it will likely be contested in the court system and Congress, and will include many exceptions.

During Normal Operations It should be a matter of routine for agency owners to have both producer and employment agreements in place to protect the value of what is likely their largest asset. But, according to the data we have collected on hundreds of mid-sized independent agencies, that is not necessarily the case. We found that only 62.5% of agencies had producer agreements, and only 68.8% had employment agreements in place.

Well over 30% of the agencies we have worked with are taking large risks by not having these agreements in place.

With the increasingly competitive landscape for talented insurance agency professionals, are you exposing your agency by not having agreements in place?

We strongly recommend that you adopt employment agreements with all of your employees as a best practice.

Change in Ownership When you eventually sell your agency, either internally to key staff or family or via an external sale, the buyers will want everyone at the agency to have signed either a producer or employment agreement. The value of the agency is tied to the ownership of the book of business and

the recurring revenue stream tied to that. If key employees with key accounts have not signed the agreements, the result will be a substantial suppression of agency value.

Protect Yourself We encourage every agency to review their policies regarding producer and employee agreements. While it is key to focus on producers, realize that all of your employees have access to both client information and proprietary knowledge of the agency’s operations, so extending it to everyone is imperative.

Please reach out to me at craig@iavaluations.com for more info on this subject or for sample agreements.

About IA Valuations and Agency Link – Founded in 2017, the IA Valuations team has performed over 200 valuations to independent insurance agencies across the U.S. Our advisors have 25+ years of experience guiding agency owners on maximizing their agency value, planning, and legal needs for ownership transition. In addition, IA Valuations has provided perpetuation planning, financial modeling and business planning for independent insurance agencies. Finally, IA Valuations has advised dozens of agency owners on selling their agencies through our Agency Link process. Agency Link is a platform that connects buyers and sellers together to further the growth and strength of the IA system. To learn more about IA Valuations, please visit IAValuations.com or contact@ iavaluations.com.

The information provided in these documents is general in nature and shall not be construed as personal legal, tax or financial advice for your situation. Please email contact@iavaluations.com to discuss your personal situation.

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2023 INDEPENDENT AGENCY M&A TRENDS AND PREDICTIONS Monday, May 24 • 11:00 am - Noon ct www.iiaofil.org/valuation-webinars

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Check out the IIA of IL Solution Center - Agency Management section, where we have compiled several sample agreements, guidelines, and other employerrelated issues to consider.

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may 2023

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GEN Z PERSPECTIVE The

By Olivia Scales Generation Z’s numbers are increasing in the workforce.

According to the Bureau of Labor Statistics, 70.9% of the civilian noninstitutional population between the ages of 20 and 24 are in the civilian labor force. Pew Research Center defines Generation Z as individuals born between 1997 and 2002, although there are differing cut-offs depending on who you ask (some people use the 1995 cut-off for example). Older Gen Zers, such as myself, are starting their professional careers and we bring a different perspective to the workplace.

But how is Gen Z different from their tenured counterparts?

I love discussing career goals and priorities with friends and colleagues my age. However, I don’t usually see many articles on professional development from professionals my age. That said, let me give you a glimpse of the Gen Z perspective.

WORK & PERSONAL LIFE BALANCE Gen Z brings a unique perspective to the workplace in many ways. One of the most notable is their approach to work-personal life balance. We will work hard during the workday, but we are also less likely to answer work emails after hours or on the weekend unless absolutely necessary.

Gen Z is very open when it comes to prioritizing mental health and personal well-being. By establishing clear boundaries, we increase our chances of maintaining the proper balance between meeting our career ambitions and goals and needs outside of a professional work setting.

JOB FULFILLMENT This is probably my biggest consideration when looking for jobs, and I am not alone. It seems to be a consistent trend when I talk to other professionals my age. I value my time.

If I devote my time to a company, I want my contributions to be meaningful. This means we are less likely to stay at a job for years at a time for just the pay. If we do not receive that sense of accomplishment in our work, we are not shy about going elsewhere!

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PAY AND BENEFITS This will seem like a direct contradiction to the previous paragraph but hear me out.

As I mentioned, job fulfillment is incredibly important to Gen Z, but to quote one of my friends I discussed this article with, “You gotta be able to live.” Gen Z is less willing to accept the “You have to have the heart for it!” approach. This sentiment is often a justifier for low salaries and wages. Generation Z and Millennials have been more vocal about calling for higher wages. At the end of the day, it truly is a balancing act of doing what you love while also standing up for yourself to make sure you are being fairly compensated.

WORK ENVIRONMENT At a leadership development event I attended recently, we discussed the two elements that younger workers often choose over loyalty to a company: genuine connections with the individuals they collaborate with and passion for the work itself. This trend originated with Millennials and is now embraced by Generation Z. There are many factors that come into play when discussing a company’s work environment. People, generally speaking, want to work for ethical companies with a clear mission. Gen Z specifically places emphasis on a work culture that allows for organic collaboration and authentic relationships. We like it when managers have enough confidence in us to work on tasks without being micromanaged. This strengthens the rapport of work teams, builds employees’ confidence, and provides a sense of fulfillment in their roles.

Diversity is another critical piece of an employer’s work environment. Since Generation Z is one of the more diverse generations, it is important that such diversity is reflected and represented within any given company.

This is more than just meeting the numbers of a diverse may 2023

employee base. It includes making sure all employees feel like their concerns are taken seriously and can exist authentically within their work environment.

In terms of the physical work environment, it may surprise many that many Gen Z workers are wanting more inperson interactions. While we are generalized (albeit somewhat fairly) as a generation that is constantly online, we are fatigued from constantly having a large chunk of work engagements online. Personally, I 100% agree with this sentiment. We are ready to be in person and start building professional relationships!

Olivia Scales recently graduated from Ball State University, with a major in Legal Studies and a minor concentration in Public Policy. She currently works as a Marketing Intern for Lead at Any Level and as a Government Relations Intern for United Way of Central Indiana. Find out more about Lead at Any Level at LeadAtAnyLevel.com.

INDIVIDUAL GROWTH We are used to fast-paced working and educational environments. After all, many of us had to teach ourselves to some extent during the pandemic. We embrace a challenge and are self-sufficient in expanding our skills.

From an employer standpoint, it is worth getting to know your employees and knowing what types of learning opportunities they are interested in. This gives them the ability to personalize their role and bring a holistic perspective to your company.

This by all means is not a comprehensive list; rather a collection of observations both personal and from my peers.

Gen Z brings a unique perspective to the workplace in many ways.

One of the most notable is their approach to work-personal life balance.

may 2023

2023 JM Wilson Insurance Insight OUTLINES.indd 3

1/12/23 10:52 AM insight 27

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conference

EDGE = Excellence, Development, Growth, and Education We Nailed It!

The IIA of IL Young Agents Committee hosted another successful EDGE Conference on April 13-14 at the Holiday Inn in Bloomington/Normal. This conference is unlike any other in the industry. With the focus on professional development gained through unique programming, it was easy to see why the EDGE Conference is still one of the most highly regarded professional development programs for insurance professionals in the Midwest.

The Young Agents Committee packed a punch with speakers flying in from all over the country! First up was David Carothers. He is not only the principal of a successful agency in Florida but also the owner and founder of a marketing firm, investment group for start-up and struggling agencies, creator of an insurance training solution, podcast host, and creator and producer of the first-ever insurance reality show. Carothers used his expertise to explore the ins and outs of a hard market and why it occurs. He also explained how he uses technology to streamline his processes and workflows. For example, frequently, he uses ChatGPT, an artificial intelligence chatbot released last fall. In fact, he used ChatGPT to create questions for the panelists in his second session, a discussion with panelists Cindy Jackman of Arlington/Roe, Chris Knox of The Horton Group, Brian Ogden of Ogden Insurance and Brent Timmerman of The Hanover. And ChatGPT nailed it!

ChatGPT comes with plenty of warnings. It can create wrong or biased information, and users shouldn’t rely solely on ChatGPT. I’ve never used it, but while writing this article, I decided to give it a shot! And…wow.

By Rachel Romines Here is what I typed into the ChatGPT website: “Write a paragraph about using ChatGPT in the insurance industry.”

Here is what ChatGPT wrote: “ChatGPT could be a valuable tool in the insurance industry, as it has the ability to provide quick and accurate responses to customer inquiries. With its natural language processing capabilities, ChatGPT can understand and interpret customer questions and provide relevant information about insurance policies, claims, and other related topics. This can help insurance companies to improve their customer service and enhance the overall customer experience. Additionally, ChatGPT could also be used to streamline insurance underwriting and claims processing by automating certain tasks and improving the efficiency of the process. Overall, incorporating ChatGPT into the insurance industry could lead to improved customer satisfaction, increased efficiency, and a more competitive market.”

Ok, I’m hooked. I had to try one more thing: What I typed: “How can I use ChatpGPT in my insurance agency processes?”

ChatGPT: “There are several ways you can use ChatGPT in your insurance agency processes to improve efficiency and customer service.

Firstly, you can integrate ChatGPT into your website or mobile app to provide a chatbot service that can answer frequently asked questions about insurance policies, claims, and other related topics. This will help customers to quickly find the information they need and reduce the burden on your customer service team.

Secondly, ChatGPT can be used to automate certain tasks in the insurance underwriting and claims processing process. For instance, it can help to verify policy details and assess the validity of claims, which can help to reduce the workload of insurance agents and speed up the process for customers.

L-R: Cindy Jackman, Chris Knox, David Carothers, Brent Timmerman, and Brian Ogden

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Finally, ChatGPT can also be used to provide personalized recommendations to customers based on their individual needs and preferences. For instance, it can help customers to identify the most suitable insurance policies based on their age, occupation, and other factors, which can improve customer satisfaction and retention. may 2023

Overall, incorporating ChatGPT into your insurance agency processes can help you to provide better customer service, streamline your operations, and stay competitive in the marketplace.”

But… I digress. I could spend all day in ChatGPT. For now, I’ll write the rest of this article…

Special guest, John DeJulio, wrapped up day one of the event with “Sell and Create Desire to Close Quickly!”

DeJulio, an international speaker, has given presentations worldwide and helped countless processionals enhance their sales processes to achieve their goals. This unique course showed attendees how to create a lead-generating machine, target the right audience, and so much more!

To end the day, everyone enjoyed Music Bingo – it’s like regular bingo, but better! Everyone enjoyed listening to music from every genre, singing along, and dancing! It was the perfect ending to a day chock-full of learning.

Day two featured two more speakers. Chris Cline, of Agents Council for Technology (ACT), started the day with “Slow Down to Speed Up.” Cline used this concept to explain why it’s important to be nimble and innovative but also act with intent when it comes to aligning strategies to business decisions.

Andrew Bartlett of OotBox Media wrapped up the 2023 EDGE Conference. He discussed effective marketing strategies for insurance agencies and emphasized the importance of understanding your target audience and tailoring your messaging and branding to resonate with them.

We would not be able to hold this event without the generosity of our advertisers, sponsors, and exhibitors.

David Carothers

Thank you to: AmTrust Insurance Applied Underwriters Arlington/Roe & Co. Berkshire Hathaway GUARD Insurance Companies Bliss McKnight, Inc Branch Insurance BriteCo Jewelry & Watch Insurance Donald Gaddis Company ePayPolicy Hippo Insurance Illinois Mutual Indiana Farmers Insurance Insu Serve1 - Insurance Virtual Assistants IPFS JM Wilson Roush Insurance Services, Inc. STONEMARK, INC. “Premium Finance Group” WA Schickedanz/Interstate Risk Placement Does the EDGE Conference need an update? We want your opinion! If you’ve ever attended an EDGE Conference, the Young Agents Committee would like to get your feedback.

What do you like about the event? What do you not like?

What would you like to see at the event in 2024? Send me all your thoughts and opinions at rromines@iiaofil.org.

Rachel Romines is the Communications Director and Young Agents Liaison for the IIA of IL.

may 2023

More photos on next page.

Stay up to date on all Illinois Young Agents hosted events & activities at www.ILYoungAgents.com. insight

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John DeJulio

Chris Cline

Andrew Bartlett

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may 2023

associate news | INSIGHT Thank you to our Associate Members.

Diamond Level

Platinum Level

Gold Level Arlington/Roe Blue Cross/Blue Shield of IL Keystone Insurance Group, Inc. Pekin Insurance

Progressive Surplus Line Association of Illinois

Silver Level Imperial PFS IMT Insurance SECURA Insurance West Bend Mutual Insurance Co.

Bronze Level A. J. Wayne & Associates AAA Insurance AMERISAFE AmTrust North America Auto-Owners Insurance Co. Badger Mutual Insurance Company Berkley Management Protection Berkshire Hathaway Guard Insurance Companies BluSky Restoration Contractors BriteCo Jewelry & Watch Insurance Central Illinois Mutual Insurance Company Chubb Columbia Insurance Group Continental Western Group Cornerstone National Insurance Company Cowbell Cyber Donald Gaddis Company, Inc. Donegal Insurance Group EMC Insurance Encova Insurance Erie Insurance Group Foremost Choice Property & Casualty Forreston Mutual Insurance Company Frankenmuth Insurance Grinnell Mutual Reinsurance Company IA Valuations

may 2023

Illinois Mine Subsidence Ins. Fund Illinois Public Risk Fund Indiana Farmers Insurance Insurance Program Managers Group J M Wilson Liberty Mutual/Safeco Insurance Madison Mutual Insurance Company Main Street America Insurance Maximum Independent Brokerage, LLC Mercury Insurance Group Method Workers Comp Midwest Insurance Company Nationwide NHRMA Mutual Workers’ Compensation Previsor Insurance & Missouri Employers Mutual PuroClean Disaster Services Rockford Mutual Insurance Company ServiceMaster DSI SERVPRO of Gurnee Society Insurance SPRISKA - Specialty Risk of America Travelers UFG Insurance UIG - The Agent Agency Utica National Insurance Group W. A. Schickedanz Agency, Inc./Interstate Risk Placement Western National Insurance Westfield insight

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Association Update April Wrap-Up

College Athlete Advertising Campaign

April marked the end of the IIA of IL’s first campaign with MOGL - a marketplace connecting college athletes with brands everywhere. With help from a grant from Trusted Choice, the IIA of IL created a campaign with athletes to explain the importance of an Independent Insurance Agent.

The MOGL team, with input from IIA of IL staff, reached out to many college athletes, starting with those from Illinois or attending college in Illinois, and then expanded to well-known national schools.

In all, 17 college athletes posted to their social media feeds on the importance of a Trusted Choice Independent Agent.

The goal in this campaign was to not only explain the difference between an independent and captive agent, but to also encourage these young athlete’s followers to visit TrustedChoice.com to find a local agent.

Go to https://tinyurl.com/TC-Campaign to view the wrap-up video.

IIA of IL CEO Phil Lackman currently serves as Vice President of Independent Agent Association Executives (IAAE), a group of executives from states under the Big “I” Umbrella.

This month, Phil virtually attended IAAE’s second annual summit, a collaborative effort to improve communication between the states and the Big “I”.

GOVERNMENT AFFAIRS.

IIA of IL members and association staff attended the Big “I” Federal Legislative Conference in Washington, D.C. in late APril. Twenty-four Illinois members and staff attended 13 congressional meetings spread out between two days. We had extremely productive meetings with many members of congress and/or their staff. Staff returned from the event at press time. Here is a sneak peek of some of the photos from the visit to our nation’s Capital. Read the full update on the event in the June issue of Insight.

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may 2023

iia of il news | INSIGHT

May 24

8:00 am - 4:00 pm • Virtual Class This course strengthens your ability to have productive, assured interactions with your commercial customers in the area of commercial casualty exposures and coverages. In this course the focus is the Business Auto Policy, the Workers Compensation Policy and Excess Liability Policies. You will improve your understanding in each of these areas.

Topics: Business Auto Exposures and Coverages, Workers Compensation & Employers Liability Insurance Policy, Commercial Umbrella and Excess Liability Policies

www.iiaofil.org/education

New Members

Education

member agency

over 30 classes a month

Fox River Insurance Services, Ltd. Naperville, IL

Pre-Licensing, CIC, CISR, E&O, Ethics, Flood, Webinars

The Grady Agency Mount Sterling, IL Mitul Patel Insurance Agency Shaumburg, IL Southwest Insurance Center Plainfield, IL Tower Insurance and Risk Management Services Lombard, IL

bronze associate member BriteCo Jewelry & Watch Insurance Evanston, IL For information regarding IIA of IL membership or company sponsorship, contact Tom Ross, Director of Membership Services, at (217) 321-3003, tross@iiaofil.org.

may 2023

Mark Your Calendar

October 10-12 East Peoria, IL

ILConvention.com insight

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INSIGHT

| classifieds

for the insurance professional by the insurance professional

INDEPENDENT INSURANCE AGENCIES WANTED

AGENCY WANTED

GALO Insurance Agency, Inc (847) 832-0888 steve@galoagency.com

Visit www.ciagonline.com for contact information.

20. 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.

17. We are an Independent family-owned agency located in the Chicago area. We are looking to expand through growth and acquisition. If you have a small to medium sized agency and are looking to sell, call or send us a message. We are strictly looking for Personal Lines and Small Commercial accounts with preferred companies.

AGENCY/AGENTS/PRODUCERS WANTED

02. 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, BuySell 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! We’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.

OPPORTUNITIES/SPACE AVAILABLE/RETAIN OWNERSHIP

13. 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:

Dan Browne will provide an agency evaluation/appraisal at little cost to you. Please call:

Nancy Solomon Martini, Miller & Schloss, Inc. (847) 291-1313 Ron@martini-miller.com

Dan Browne or Cathy Hall Forest Insurance (708) 383-9000 www.forestinsured.com/mergers-acquisitions

We Make Hiring Easier

+

CareerPlug’s hiring software helps agents attract more qualified candidates, identify the right candidates with confidence, and improve hiring results.

CareerPlug will provide IIA of IL members access to a free account that can be used to post jobs, manage applicants, and improve the organizations’ employment brand. Association members can also access a “Pro” version of CareerPlug for a special rate to take hiring to the next level.

Learn more about CareerPlug and check out the brand new IIA of IL job board at

www.iiaofil.org

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may 2023

THINK UFG

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ufginsurance.com/services © 2023 United Fire & Casualty Company. All rights reserved.

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It Pays To Get A Quote From Applied.® Learn more at auw.com/MoreToLove or call sales (877) 234-4450 ©2023 Applied Underwriters, Inc. Rated A- (Excellent) by AM Best. Insurance plans protected U.S. Patent No. 7,908,157.

Our Preferred Payment Processor for Insurance 844-372-9300

Get 3 Months Free + Free Upgrade: Exciting news! Our preferred digital payment processor, ePayPolicy, is offering our members their first three months of ePayPolicy for free. And on top of that, new and existing customers have the chance to upgrade to their Integrated Plan for no extra cost (saving you $25/month).

With ePayPolicy’s payment solution, you can collect credit card and ACH payments online while passing on transaction fees to the insureds. You get access to a streamlined dashboard where you can manage your account and transactions.

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MORE IMAGINATION.

MORE TO LOVE FROM APPLIED.® Workers’ Compensation • Transportation – Liability & Physical Damage • Fine Art & Collections • Structured Insurance Construction – Including New York and Project-Based Primary & Excess Liability • Financial Lines • Aviation & Space Homeowners – Including California Wildfire & Gulf Region Hurricane • Environmental & Pollution Liability • Public Entity Shared & Layered Property • Warranty & Contractual Liability • Reinsurance • Infrastructure • Surety • Entertainment & Sports

...And More To Come.

It Pays To Get A Quote From Applied.® Learn more at auw.com/MoreToLove or call sales (877) 234-4450 ©2023 Applied Underwriters, Inc. Rated A- (Excellent) by AM Best. Insurance plans protected U.S. Patent No. 7,908,157.