POLICY WINTER 2020

POLICY WINTER 2020

Oklahoma’s Magazine

HAPPY HOLIDAYS

from your friends at Big I Oklahoma!

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WINTER 2020 | VOL. 63 NO. 23 EDITORIAL STAFF PUBLISHER Denise Johnson, CIC

MANAGING EDITOR Jerri Culpepper GRAPHIC DESIGNER Brandy Akbaran

CHIEF OF STAFF AND OPERATIONS Josh Reasnor DIRECTOR OF MARKETING AND COMMUNICATIONS Courtney Bloom WORKERS’ COMP PROGRAM ACCOUNT MANAGER Susan Starr WORKERS’ COMPENSATION SERVICE ACCOUNT MANAGER Kortney Wahkinney DIRECTOR OF SALES, EVENTS AND NEW MEMBERSHIP Shania Slavick SPECIALTY LINES PROGRAM ACCOUNT MANAGER Cindy Munden, CISR CONTINUING EDUCATION AND PROFESSIONAL DEVELOPMENT COORDINATOR Hannah Stendel WORKERS’ COMPENSATION CUSTOMER SERVICE AGENT Jeanette Madrid

POLICY is the official publication of the Big I OK. POLICY is published quarterly and distributed to all member agencies and other interested parties in Oklahoma. Manuscripts and contributions are welcome and will be considered for publication at the discretion of the Big I OK Publications Committee.

Correspondence and advertising inquiries may be addressed to IIAO, P.O. Box 13490, Oklahoma City, OK 73113.

Ph: (405) 840-4426 or 1-800-324-4426

Visit www.bigiok.com

WINTER 2020

28

COVER

COLUMNS

HAPPY HOLIDAYS FROM YOUR FRIENDS AT BIG I OKLAHOMA

4 OUR FUTURE IS BRIGHT Chris Mosley, Chairman

FEATURES

7 REFLECTIONS ON A PRODUCTIVE YEAR Denise Johnson, CIC

PROFESSIONAL STAFF

PRESIDENT/CHIEF EXECUTIVE OFFICER Denise Johnson, CIC

24

24 WHY PRODUCERS FAIL – AND WHY YOURS DON’T HAVE TO 28 NEWSMAKERS 30 IN BRIEF 31 EDUCATION CALENDAR

12 COVID-RELATED COVERAGE LITIGATION UPDATE Tom Cooper 17 YOUNG AGENTS COMMITTEE EMBRACING CHANGE Candice Richardson 19 THE BIG I CAN HELP INCREASE YOUR AGENCY’S VALUE AND VITALITY Chris Floyd, CIC, CRM 20 CULTIVATING YOUR GARDEN FOR THE NEW YEAR Sara Bradshaw Ray, CIC 22 A WATERSHED MOMENT FOR OKLAHOMA Glen Mulready

POLICY 3

OUR FUTURE IS BRIGHT

Chris Mosley, CIC

CHAIRMAN

O

ur future at the Big I is secure for the next generation! As we wind down the year, thankfully, and look forward to a bright 2021, we realize everyone is getting a little older, a little grayer and thoughts of the future of our industry sometimes come to the forefront. We have no worries.

I must brag on our Oklahoma Young Agents, chaired by Candice Richardson,

Time is something that should never be taken for granted; relationships should not be, either. We are a very fortunate industry in that we have the opportunity to touch so many lives – an example is this past spring, when we raised $95,000 for the Oklahoma Food Bank, proving we are a powerful group and can do great things working as one. Let us remember our fortunes this holiday season and share with others. as they have grabbed national attention for Oklahoma Young Agents. Recently, the Oklahoma Young Agents received the Outstanding Breakthrough Award.

Embarrassingly, I had to ask, what does that award encompass? The national YAC recognized the outstanding efforts

4 POLICY

of OUR Young Agents Committee, who have gone above and beyond to serve our young agents. The governor wanted to be a top 10 … well, we hit No. 1!

There are many opportunities to be involved with the Young Agents of Big I Oklahoma. Check out the website, www.bigiok.com, and go to the Young Agents tab for upcoming activities.

Please encourage your employees to become involved with their industry, to be involved with their association, all the while making lifelong friends.

While it has been asked of the chairman to write quarterly columns, I was at a loss on the subject matter.

I reviewed many prior letters with detailed coverage answers and expert advice, and it made me even more aware of the value of the Big I. We have a wealth of knowledge at our fingertips, and with a stroke of a keyboard, we can find many answers to questions which arise in our daily operations; all you need to do is start at bigiok.com or call the office in Oklahoma City.

Speaking of answers, the Board had agreed to a contract for consulting services, which will be available for members for a fee. As I have mentioned before, the goal for the Big I is to be

WINTER 2020

We Do Business the Honest, OldFashioned Way. our own trusted advisor for our fellow agents. The Association is constantly looking at new ways to provide innovative services to our membership.

As we close the year, gather with family, all the while social distancing, we reflect upon the year behind us. Time is something that should never be taken for granted; relationships should not be, either.

We are a very fortunate industry in that we have the opportunity to touch so many lives – an example is this past spring, when we raised $95,000 for the Oklahoma Food Bank, proving we are a powerful group and can do great things working as one. Let us remember our fortunes this holiday season and share with others.

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I wish everyone a great holiday season, and here’s to a wonderful 2021. n

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POLICY 5

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REFLECTIONS ON A PRODUCTIVE YEAR

M

erry Christmas! I’m not even sure how to comment on the past year. … 2020 has been as unprecedented as “unprecedented” can be.

I feel like the way that we do school, church, business and life is completely different than one year ago.

The process of “how to do things” has changed – meetings are different, classes are different – we’ve all had to change and adapt. It’s the same at the Association.

Programs that have been “institutions” for years are now being presented in a new, “modern” way. Here are some things that we’ve done over the past nine months: • Education went from “on site” in various cities and locations to webinars to “live simulcasts” with students on site (and properly distanced) • We met with some of our legislators (or potential legislators) virtually for the first time and had important discussions about our industry.

a higher level of professional development.

Sara Bradshaw Denise Johnson, CISR, CIC PRESIDENT/CHIEF Ray – who is EXECUTIVE OFFICER no stranger to the Oklahoma family – has created MyNetwork – a national network of facilitated mastermind groups that are based on similar responsibility and leadership levels. It has

There are so many new and exciting things on the horizon – be sure to watch our website www.bigiok.com and read our communication letters.

• We moved our Annual Conference to a virtual platform and had the highest attendance in the past five years!

• We have found new and more efficient ways to run the organization.

There are some NEW things that we’ve implemented to assist you making YOUR business better!

• Shania Slavick is now on staff as our membership coordinator. We’ve seen an increase in new members and an incredible uptick in member engagement. There is so much we have to offer!

benefited so many in our state already, and we feel that it’s something that we can build on as a larger organization.

• Education is going to look very different, too!

You’re going to see more online opportunities than ever before. The CIC/CISR programs are still going strong and will continue to be a necessity for every agency and their associates.

As we look toward 2021 – and it’s got to be better than 2020, right? – we are continually working for new and innovative ways to support YOU, our members in your business. Always feel free to contact us with any thoughts or ideas – we’re here to support you! n

• Another NEW addition to our organization that we’ll be adding to the BigIOK repertoire is

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POLICY 7

From buttons to bread EMC has it covered.

EMC Insurance Companies offers comprehensive coverage tailored to the needs of 98 different types of light manufacturers producing everything from buttons to bread to electronic components. This line offers optional coverage for manufacturers and delivery errors or omissions, plus employment practices liability. Certain coverages are even bundled automatically — meaning whatever your clients make, EMC makes insuring their businesses easier.

www.emcins.com ©Copyright Employers Mutual Casualty Company 2020. All rights reserved.

OkPAC CONTRIBUTORS OkPAC is Big I OK’s political action committee. It provides financial support for state elected officials who will provide support for or have shown support of issues affecting the insurance industry and to those who share our business philosophies. Only individuals or partnerships can make contributions to OkPAC. Under Oklahoma law, OkPAC can accept no contributions from corporations.

2020 Stewart Berrong*

Denise Johnson

TJ and Ashleigh Riley

Bob Bramlett

Gerald Keeton

Michael Ross

Jeff Burton

Jeff Lee

Daniel L. Somers*

Mark Carlin

Avery Moore*

Phillip Smith

Rebecca Easton

Chris Mosley

Joe Strunk

Eitzen Family Trust

Kathy Reeser

Ty and Erin Surber

Vaughn Graham Jr.*

Lori Reynolds

Taber Brokerage

InsurPac CONTRIBUTORS InsurPac is IIABA’s political action committee. It pools the voluntary and individual financial contributions of thousands of independent insurance agents to help elect candidates to Congress who share IIABA’s business philosophies. InsurPac is the largest property-casualty insurance industry PAC in the country.

2020

Jennifer Beale

Vaughn Graham Jr.*

Steve Poleman

Stewart Berrong*

Austin Greenhaw

Kathy Reeser

Kent Bradford

C. Ross Harris

Arthur “Drew” Rickets

Robert Bramlett Jr.

John Hester

T.J. Riley

Travis Brown

Tony Holmes

Michael Ross

Debbie Burton

Jennifer Horton

Nicole Schwarz*

Michael Cole

Denise Johnson

Jane Seals

Scott Cornelius

Gerald Keeton

Richard Shaw

Vicky Courtney

Mark Long

Daniel Somers*

Terry Cupp*

R. Bruce Magill

Mike Spaan

John “Jed” Dillingham

Patrick Mandeville

Richard “Dick” Teubner

David Eaton

Mark McPherson

Ryan Teubner

Philip Eitzen

Kelly Miller

Brad Warwick

Chris Floyd

Sheila Morford

Tamara “Tammy” Watson

Vaughn Graham

David Allen Paine

Contributions as of 10/31/2020. Only gifts of $100 or more are listed, except for Young Agents, whose contributions of any amount are listed. Young Agents are denoted with an asterisk.

Is your name not on the list? Use the contributor’s statement on the back of this page to donate.

WINTER 2020

POLICY 9

Independent Insurance Agents of Oklahoma P.O. Box 13490 | Oklahoma City, OK 73113 P: (405) 840-4426 | F: (405) 840-4450 | info@bigiok.com

INSURE YOUR FUTURE!

By making a contribution to OkPac, you are investing in the future of independent insurance agents across Oklahoma. Please note: All contributions must be made by PERSONAL check or PERSONAL credit card. Company or Agency accounts cannot be used.

CONTRIBUTOR INFORMATION Name: Agency:

Occupation:

Address: City:

State:

Phone:

ZIP:

Email:

Count me in! I want to INSURE MY FUTURE with a personal contribution to OkPac at the following level/amount: (select one) $5,000 - Millenium Level $2,500 - Platinum Level $1,000 - Centennial Level $500 - Gold Level

$250 - Pioneer Level $150 - Founders Level $100 - Young Agent Level Other: $______

I am including a PERSONAL check made payable at OkPac. I will submit payment online via https://okpac.epaypolicy.com National Support: I want to INSURE MY FUTURE on a national level with a personal contribution to InsurPac in the amount of: $________ I am including a separate personal check made out to InsurPac. Please process my credit card. (Note: Card information may not be provided for OkPac.) Credit Card Number: ____________________________________ Expiration Date: _______ Name on Card: ______________________________________________ CVV: __________ Contributions or gifts to InsurPac and OkPac are not deductible as charitable contributions for purposes of federal income tax. Federal and State law require IIABA and BIG I OK to use our best efforts to collect and report the name, mailing address, occupation and name of employer for each individual. Your contribution should be considered strictly voluntary. Any corporate contributions are prohibited.

Declaration: The contribution listed above was freely and voluntarily given by me from my personal property.

I have not, directly or indirectly, been compensated or reimbursed for the contribution listed above.

Signature: 10 POLICY

Date: WINTER 2015

BIG I OK LEADERSHIP CHAIRMAN Christopher K. Mosley, CIC Mosley Agency Inc., Chickasha

CHAIRMAN-ELECT Stewart L. Berrong, CIC, CRM Ed Berrong Insurance Agency Inc., Weatherford

TREASURER Jerrad Coots Burrows Agency, Claremore

SECRETARY Vaughn Graham Jr., CIC Rich & Cartmill Inc., Tulsa

STATE NATIONAL DIRECTOR Chris S. Floyd, CRM, CIC Brown & Brown Insurance Professionals, Pryor

IMMEDIATE PAST CHAIRMAN Jeff Burton, CIC, CPCU, CRM INSURICA, Oklahoma City

DIRECTOR at LARGE Scott Cornelius ECI Agency, Piedmont

DIRECTOR at LARGE Kathy Reeser VIP Insurance, Edmond

COMPANY LIAISON Mark Gruber CompSource Mutual

DIRECTOR at LARGE Vicky Courtney Ricketts Fennell & Assoc.

Tulsa

YAC CHAIRMAN Candice Richardson Sullivan Insurance Ardmore

MGA LIAISON Phil Lyons Graham-Rogers Inc., Bartlesville

BIG I OK MISSION STATEMENT As the new voice of the independent agents of Oklahoma, Big I OK promotes and provides education, legislative advocacy, innovative concepts and practical solutions, and community and career opportunities.

ABOUT BIG I OK Big I OK is the largest insurance trade association in Oklahoma. With more than 475 independent insurance agencies, we represent nearly 3,000 independent insurance agents and their employees and more than 100 company members. Big I OK member agencies range in size from one person to some of the largest agencies in the region.

Founded in 1906 as the Oklahoma Association of Local Fire Insurance Agents, BIG I OK is a result of the consolidation of the Independent Insurance Agents of Oklahoma, Inc. (IIAO) and the Oklahoma Association of Professional Insurance Agents (OAPIA) on Jan. 1, 1992.

Big I OK policy is set by a board of directors elected at the annual conference. Policy is implemented by a professional staff located in Oklahoma City. BIG I OK’s

mission is carried out through a variety of programs designed to enhance the business of independent insurance agencies.

Big I OK is an active advocate on behalf of independent agents before legislative, regulatory and judicial groups in Oklahoma and at the federal level.

Big I OK is affiliated at the national level with the Independent Insurance Agents and Brokers of America with offices in Alexandria, Virginia, and Washington, D.C. Big I OK is an excellent source of information through POLICY magazine, published quarterly, and the Oklahoma Agent, a monthly newsletter of time-sensitive material for its members.

COVID-RELATED COVERAGE

LITIGATION UPDATE

Tom Cooper, Attorney at Law PIGNATO, COOPER, KOLKER & ROBERSON, P.C.

T

he pandemic’s adverse impact on commerce was quick and catastrophic. Some businesses voluntarily and proactively closed early in the process in order to protect themselves and/or customers. Other businesses wished to stay open (at least to some degree) but could not do so because they were deemed by a government official to be “non-essential.” Still other businesses simply couldn’t keep the doors open financially for obvious reasons. It was not difficult, then, to predict that commercial

Of course, business income claims were and continue to be the most common type of claim, as well as the most litigated. insureds would look their insurers to help minimize their losses.

Of course, business income claims were and continue to be the most common type of claim, as well as the most litigated.

Now that we are several months into the pandemic, I thought it might be helpful to provide some examples from across the country of the types of insureds who’ve made claims, the arguments made for and against coverage, and the ultimate outcome. Not surprisingly, the insurer has typically come out on top (because no matter how you slice it, a business income loss still requires direct physical damage as a triggering event, plus most

policies exclude contamination by viruses, anyway). Surprisingly, though, the agency has been dragged into the litigation in only a small portion of the cases I’ve found (because most insureds are going to have a hard time coming up with a believable argument that they specifically asked their agent for coverage for losses arising out of a pandemic).

In any event, here are some sample cases: FLORIDA – A restaurant sued its insurer, Greenwich, for “significant business losses” after local and state authorities prohibited onsite dining.

The restaurant knew it could not support an argument that there was “direct physical loss of or damage to” the insured premises, so it argued that the physical loss prerequisite can be met by showing that the insured premises became “uninhabitable” or “substantially unusable.” The federal judge was not convinced, and stuck to existing Florida law, which requires tangible damage or alteration to the insured structure. The case was dismissed.

MICHIGAN – A chiropractor sued its insurer, State Farm, after the insurer denied his claim for business income losses. The chiropractor was subject to a government closure order. He argued that State Farm’s virus exclusion was inapplicable because it was unrelated to its loss of income. In other words, the continued on page 14

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WINTER 2020

WHY WALK

WHEN YOU CAN SOAR?

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COVID-RELATED COVERAGE LITIGATION UPDATE chiropractor argued that the loss was caused solely by the government closure order, and not by the COVID-19 virus. Of course, it did not take long for the federal judge to rule that the closure order was issued in response to the pandemic, and that the virus exclusion applies. Further, even without the virus exclusion, there would have been no coverage because the insured could not show a tangible, physical loss to the insured premises.

CALIFORNIA – A salon that provided “European wax” services was forced to close and lay off its staff due to state-mandated closures. The insured’s claim for business income losses was denied by Sentinel, and suit followed. In dismissing the case (and labeling the insured’s arguments “nonsense”), the judge noted that the only interpretation of the Complaint is that the loss at hand was directly related to COVID-19. Thus, even if the loss was somehow covered under the basic insuring agreement (which it wasn’t), it was nonetheless excluded by Sentinel’s virus exclusion. The court went a step further by stating that the policy’s civil authority provision does not create coverage, but rather extends coverage when government

orders are issued as the direct result of a covered cause of loss to property in the immediate vicinity of an insured’s property, which of course was not present.

Locally, while there have surely been claims made (and denied) for business income losses, the claims have not been widely published, especially where no lawsuit has followed. That said, there are a few local cases of interest that are pending which will likely garner some attention when a ruling is made.

One of those arises out of the Choctaw Nation of Oklahoma’s closure of its casinos from March until June 2020. The tribe is a participant in TPIP (the Tribal First Property Insurance Program), which has multiple layers of coverage with insurers such as Lexington, Lloyd’s, Homeland, Hallmark, Endurance, Arch, Evanston, Liberty Mutual, RSUI, and Chubb. The tribe’s quest for coverage was denied, and it responded by filing a declaratory judgment suit against the multiple insurers in Bryan County. There have been no rulings in the case thus far (and no agents dragged into the fray), but I will continue to keep an eye on it. n

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Phone: 405.840.9393 Toll Free: 800.299.1951

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YourOGA.com

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We would like to thank our 2020 partners for their continued support of our association!

DIAMOND DELUXE

PLATINUM

GOLD

SILVER Specialty Insurance Managers of Oklahoma | The Hanover Insurance Group | Zenith Insurance Company | Chubb Group of Insurance Companies | Travelers Insurance | EMC Insurance | National American Insurance Company | CNA Insurance | Union Mutual Insurance Company

BRONZE AmWINS Group | Pie Insurance | Producers XL | Markel Specialty Commercial | Equity Insurance Company | RT Specialty - Oklahoma | Risk Placement Services | SIS Wholesale Insurance Services | Columbia Insurance Group | Republic Group | AF Group | BITCO Insurance Companies | Worth Casualty Company | Normandy Insurance Company | ICW Group | Commercial Insurance Underwriters, Inc. | Agency Matrix | Berkshire Hathaway GUARD Insurance Companies | Oklahoma Disaster Restoration | AmTrust Financial Services, Inc. | Patriot National Underwriters, Inc./Old Glory Insurance Company | Houston International Insurance Group (HIIG) | Farmers Alliance Mutual Insurance Company | Southwest Risk, LP | Applied Systems, Inc. | TRILINK Restoration Services, LLC | Hallmark Specialty Personal Lines | Employers, Inc. | MJ Kelly Company | Pennsylvania Lumbermens Mutual Insurance Company | AMERISAFE | Philadelphia Insurance Companies | Taber Brokerage | Central Insurance Companies | Prime Insurance Company | Presort First Class | Heartland General Agency | GAINSCO Auto Insurance | SynerDynamics Group | United Home Insurance Company | Med James, Inc. | The Hartford | State Auto Insurance Company | Old Republic Surety | ePayPolicy | Main Street America Group/The General Insurance | Summit | Hawksoft, Inc. | REInsurePro

WINTER 2020

POLICY 15

Honorary Member: Denise Johnson, President & CEO of Big I OK

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Provide your current and prospective clients with a snapshot of the added benefits of working with a Trusted Choice® Independent Insurance agency.

Customize these materials today!

cobrand.iiaba.net/made-for-you/i-am

16 POLICY

WINTER 2020

YOUNG AGENTS COMMITTEE

EMBRACING CHANGE

T

he Young Agents Committee just wrapped up its virtual conference on Oct. 29,and we had a great turnout with some very entertaining speakers. In today’s world, you just have to “go with the flow” – and that’s exactly what we did, with huge success.

Candice Richardson

YOUNG AGENTS COMMITTEE CHAIRMAN

Also, a HUGE accomplishment was made this year on the National Young Agents level by winning the “Breakthrough” Award. This award shows Also, a HUGE accomplishment was made that Oklahoma is an up-and-coming state this year on the National Young Agents with intentions of growing and maximizing what we can do as a group on a legislative, level by winning the “Breakthrough” charitable, membership and event level. We Award. This award shows that Oklahoma all know that there are challenges in today’s is an up-and-coming state with intentions society to gather and reach out in person, of growing and maximizing what we can so we have some great innovative and fun do as a group on a legislative, charitable, ideas moving forward.

That being said, we have a lot of internal events going on throughout the committee. We have broken out into sub committees so that a few people can really focus on each aspect that the committee represents. We are also doing the Kolbe Testing A & B with Marit Peters (State of Texas, Association CEO). She will give us an in-depth analysis of how well we work as individuals and how well we work together as a team. This will be a great informational process that will help make us all stronger and more understanding of how to move forward as a solid committee.

Lastly, we do have plans to have an IN-PERSON Christmas party in Oklahoma City and Tulsa. The dates are Tuesday, Dec. 15, at The Jones Assembly in Oklahoma City, and then on Thursday, Dec. 17, at

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membership and event level.”

Roosevelt’s in Tulsa. So, keep your eyes open for that Save the Date, and plan to join us!

As we move into the holidays and the new year, we are hoping to open up our lunch bunches and happy hours, along with more hands-on charity events. Once that schedule is solidified, we will release it to all Young Agents. As a committee, we are hoping to return to some normalcy and back on track with engaging, networking and getting back to the grind! Thank you all for your support and patience through these times, but trust me, we have a lot going on, with big plans for the future ahead! n

POLICY 17

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THE BIG I CAN HELP

INCREASE YOUR AGENCY’S VALUE AND VITALITY

I

ncreasing your agency’s value and vitality greatly depends on the sales culture of your organization.

Chris Floyd, CIC, CRM Developing a healthy sales culture should be a priority STATE NATIONAL which will have the most impact to your organization.

DIRECTOR It literally has the most direct impact on your agency’s ability to generate revenue impacting your agency’s book value as well as the cultural attraction of high A healthy sales culture is often performers. identifiable by organic growth with Agencies at any stage or size can have the opportunity to implement a sales culture that becomes the fuel to the agency’s engine, which creates optimum earning potential.

Specifically, agencies with older principals and owners should not overlook ways to maximize their agencies’ value as they near retirement sale or a transition phase.

above average new sales volumes supported by strategic producer initiatives that attract high performers. These high performers may also be your perpetuation plan, if strategized correctly.

A healthy sales culture is often identifiable by organic growth with above average new sales volumes supported by strategic producer initiatives that attract high performers. These high performers may also be your perpetuation plan, if strategized correctly.

How does an agency develop a healthy and dynamic sales culture?

A good place to start is by reviewing your own agency’s performance compared to others in similar peer groups, otherwise referred to as benchmarking. The Best Practices Study and other tools provided by the Big I can help you with your analysis in determining your potential level of performances by analyzing a variety of metrics compared to other independent agencies.

SUMMER 2020

As a member of the Big I, you have an incredible amount of resources available to help your agency develop that healthy sales culture.

The Best Practice Study is just one of many ways the Big I can help you as a member. This study, which was a joint effort by the Big I and the Reagan Consulting Group, provides helpful insight to setting up a healthy sales culture. Whether you are just now looking for a place to start or wanting to benchmark your progress against other agencies like yours, you will find many helpful tools, studies and concepts to get you to the next level.

Simply check out the IIABA Best Practices information and start your journey now to a healthier and highperforming agency: www.independentagent.com/bestpractices. n

POLICY 19

CULTIVATING YOUR GARDEN

FOR THE NEW YEAR

Sara Bradshaw Ray, CIC BIG I OK TRANSFORMATIONAL LEARNING COACH

H

ow is it that the same man known as Neutron Jack, for his decimating restructuring prowess, was also a renowned corporate gardener as well? Jack Welch, former CEO of General Electric and touted by Fortune magazine as “the manager of the century,” has oft been quoted as saying “My main job was developing talent. I was a gardener providing water and other nourishment to

The bountiful harvest only comes from the careful cultivation of the soil, hardy seeds that are planted in a fertile environment ripe for growth. As a leader, you are the master gardener for your organization and the cultivation begins with you, but you’re not alone.

We’re here to help and are bringing new resources to our membership designed to do exactly that. Let us know how we can support your team’s growth. our top people. The day you become a leader, it becomes about them. Your job is to walk around with a can of water in one hand and a can of fertilizer in the other hand.”

As the temps drop and we begin to focus on a new year, probably the last thing on your mind is your “garden.” Yet, there’s never been a better time to plan how to provide an environment that will best allow your people to grow much like

20 POLICY

the gardener provides a healthy terrain for their seedlings to prosper.

Planning for the most fertile environment involves four areas that every manager needs to include in their framework for the development of their people. That framework should include creating a desire, the opportunities, baseline assessment and a strategy for growth.

DESIRE Gallup organization’s findings year after year continue to support that engaged employees are those who recognize the value of their contribution to the organization. Think about your own motivation; isn’t it as a result of realizing the role you play in the overall success of your organization? The same can be said for even the newest or lowest paid employee when they see how they fit into the bigger picture of your team and where you’re headed. An inspirational leader embodies the vision of the future and creates the desire to grow along with the organization.

OPPORTUNITIES Engaged employees also clearly see their path forward in your organization or will quickly look for another who is dedicated to help them grow. As a leader, your framework needs to address opportunities for balanced growth. Too often, our development focus is strictly

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devoted to technical skills required for the current role.

A well-rounded professional needs skills in not only the technical areas, but also in communication, as well as productivity and effectiveness.

BASELINE ASSESSMENT A plan for growth has to begin with an awareness of where your greatest opportunities for growth actually are.

Sometimes this process can include a literal assessment of skills and abilities, other times simply stopping long enough to determine areas of opportunities for growth is all that’s needed. The important thing is to determine where you are before you can determine where it is you need to go.

grow as a professional in our industry and within your organization.

The bountiful harvest only comes from the careful cultivation of the soil, hardy seeds that are planted in a fertile environment ripe for growth. As a leader, you are the master gardener for your organization and the cultivation begins with you, but you’re not alone. We’re here to help and are bringing new resources to our membership designed to do exactly that. Let us know how we can support your team’s growth. n

STRATEGY Note the word I used: “strategy” vs. “plan.” A plan is easy enough to put together to comply with licensing requirements or developing some level of technical competency. I intentionally chose the word “strategy” because I’d like to encourage you to see that this is a whole lot more than a plan. When looking at a strategy for growth, this easily includes developing competence, but it also includes so many other things that are necessary for developing our teams holistically.

Here’s your opportunity to think creatively. There are so many ways to facilitate learning and professional development. As I think back on my own experience, I’ve learned through classwork, book studies, interviewing other professionals, coaching, cohorts and networks, and mentoring – and one of the most valuable experiences was on-the-job learning opportunities with a seasoned professional who cared about my growth. My point is to work with the individuals on your team to co-create a strategy that will excite them about the opportunities to

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POLICY 21

A WATERSHED MOMENT FOR OKLAHOMA

Glen Mulready STATE INSURANCE COMMISSIONER

O

n Oct. 15, the Oklahoma Insurance Department announced that the District Court of Oklahoma County approved Providence Washington Insurance Company to complete its Insurance Business Transfer Plan.

With this court’s approval, the plan will transfer substantially all the insurance and reinsurance business underwritten by PWIC to Yosemite Insurance Co., an insurance company in Oklahoma. The transfer will include the

Completing the first IBT in the United States is a huge milestone for Oklahoma and the Oklahoma Insurance Department. liabilities associated with those policies and $38.5 million from PWIC to Yosemite as consideration for assuming those liabilities. Both PWIC and Yosemite are wholly owned subsidiaries of Enstar Group Ltd. The process began in 2019 when PWIC filed its IBT Plan with the Oklahoma Insurance Department. The IBT Plan includes extensive financial documents, the independent expert’s

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report, and a proposed procedure for how the transaction will be communicated to policyholders and other interested parties. The plan was reviewed by an independent expert, department staff and then we authorized PWIC to petition the District Court for approval.

Completing the first IBT in the United States is a huge milestone for Oklahoma and the Oklahoma Insurance Department. This is a big step forward in transforming and invigorating the runoff market. I look forward to completing additional IBT’s in the coming months.

Oklahoma’s IBT law became effective in November 2018 and is the most expansive law in the country. The Oklahoma process closely mirrors Part VII Transfer of the Financial Services & Markets Act of 2000 in the United Kingdom, which has resulted in over 300 successful transfers during the past 20 years. This cutting-edge mechanism focuses on protecting consumers while allowing insurance companies to deploy assets to their areas of focus strategically.

To get more information about Insurance Business Transfers, visit www. oid.ok.gov/regulated-entities/insurancebusiness-transfers/. n

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FEATURE

Why Producers Fail –

and Why Yours Don’t Have To

By Tom Baker

“We

don’t have a clue.”

I was shocked as 12 experienced producers could not answer four critical questions.

may fail; but that doesn’t mean yours have to. If a producer fails, it is due to one or more of the following: 1. No sales playbook 2. No accountability

“How many referrals did you get this year?”

3. An outdated compensation plan

“How do you plan to get new customer referrals?”

. Sales Playbook

“What is your plan to hit your sales goal next year?”

“What is your sales goal this year?”

My questions responded to the agency owner asking his producers how they planned to grow the following year. Each confidently answered, “Referrals”. Not only didn’t they have a clue how to get referrals, but they also lacked the most basic benchmark of any sales professional – a sales goal.

Engaging and compensating any agency position is challenging, but producers are a class all their own. If you have producers, you understand why Chris Burand, president of Burand & Associates, estimates the new producer failure rate is as high as 70% to 80% (April 2020 Insurance Journal article, “Overcoming the New Agent Failure Rate: What it takes to succeed.” Producers

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Implementing a relevant sales playbook is a priority for every agency. Key elements include: Clearly defined sales goal A sales goal is not a sales “suggestion”. It’s not “The sky’s the limit; earn as much as you want.” A sales goal is a responsibility producers are expected to fulfill based on the agency’s needs for performance and profitability.

Disturbing questions Ben Feldman, who sold over $1 billion in life insurance, said, “The key to a sale is an interview, and the key to an interview is a disturbing question.” Disturbing questions identify needs and provide the basis for relevant value propositions to close the sale.

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FEATURE Value propositions Price is not a value proposition. And neither is experience or great customer service. Producers must understand a prospect’s pain points and how the agency can meet their needs.

Hotlist A hotlist includes the top 10 prospects likely to close in the next 30 days.

The list also includes disturbing questions and value propositions leading to the close.

Defined sales process Quoting, providing the lowest price, and reviewing the account at renewal is not a sales process; it’s another stone paving the road to overwhelming commoditization. An effective sales process includes qualifying prospects, preparing proposals (not just quotes), strategically presenting the proposal, handling objections, closing, analyzing/ documenting risks, complying with how the agency does business, and follow-up.

Niche packages Packages include all lines of business for key niches.

For example, a package for a restaurant might include GL, commercial property, commercial umbrella, workers comp, EPLI, key-man, liquor liability, cyber and professional liability.

2. Accountability Producers also fail due to a lack of accountability. After meeting with our 12 “sales professionals,” the owner and I talked about his producers’ vague understanding of the source for their referrals. He said all staff, not just producers, are required to ask for referrals.

“How much money will they lose if they do not ask for referrals?”

as both the positive and negative consequences of doing their job.

Key Performance Indicators (KPIs) are the most effective way to create habits and enable producers to “self-track” their performance. KPIs focus on creating habits that lead to success.

Producers may feel they don’t need accountability, but it is exactly what every sales team needs. Accountability is not a micromanaged “gotcha” moment. It is sound leadership.

KPIs provide owners with the knowledge needed to lead, engage and challenge producers.

Examples include: • • • • • • • •

New premium Completed (video) proposals Account reviews Number of cold calls/new leads Prospective client visits Lunch with clients Customer referrals Accounts with the minimum number of policies for key niches • Compliance with agency processes and procedures For KPIs to be effective, they must be an integral part of the producer’s compensation package. KPI income is not an “opportunity” to earn more money, but a “responsibility” of doing their job.

3. Compensation Odds are your next producer will not be open to income based solely on commission. Today’s millennial-driven sales force expects and works more effectively when compensation is resultsbased, value-driven and offers a financial “safety net”.

“At what point will their employment be in question if they do not ask for referrals?”

The traditional model empowers producers to, as Al Diamond puts it, “RIP” or “retire in place”. In other words, producers are rewarded for growing their book to the level they can play golf three days a week and pay their bills.

“We don’t want them to feel as though their job is in jeopardy” was his second response.

Consider restructuring your compensation model based on these key components:

“Oh, they won’t lose any money,” he responded.

“Then you don’t have a requirement. You have a request.”

Accountability is empowering others to live by the consequences of their decisions. Without objective and unavoidable consequences, accountability is impossible.

Producers must understand the responsibilities of their job as well

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A. Commission Income The current two-tier split model makes determining producer profitability difficult without knowing how much revenue will be produced. The producer is paid the same split regardless if they achieve their goal. A different approach is to:

POLICY 25

WHY PRODUCERS FAIL continued from page 25 Combine new and renewal into one goal.

Combining revenue enables owners to determine the profitability of a producer’s compensation package. In return, producers must focus on renewals and new business to achieve their maximum commission income.

Offer a “Prime” and “Reduced” split commission rate.

• Commission split The Prime rate is paid when the producer does their job by achieving their monthly combined sales goal.

The Reduced rate is paid when the producer does not achieve the monthly goal.

The chart below is an example of Prime and Reduced commission.

• Tracking Commission income Goals should adjust monthly based on last month’s performance. For example, if the goal is missed by $1,000 in January, $1,000 is added to February’s goal.

26 POLICY

If the producer exceeds their goal for January, February’s goal is reduced by $1,000.

This strategy is fair to the producer because when the current month’s goal is achieved, the producer earns their Prime rate back to the beginning of the compensation period. This ensures producers do not lose their income unless they fail to achieve their goal throughout the compensation period.

When the producer meets their performance and revenue goals, increase their Prime commission rate by 1% annually for the first three years. The message is, “Do your job and you will have more financial security.” That strategy is designed to attract top talent.

B. Salary Income The compensation package is even more attractive when the producer’s salary is increased annually for the first three years – providing they achieve their sales and KPI goals.

See the chart below for an example.

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FEATURE C. Performance Income Performance Income is based on the percentage of the goal producers achieve. A portion of the producer’s total compensation should be based on a calculated evaluation score.

Their Evaluation Score equals the percentage of a Maximum weight equal to the percentage of each KPI goal achieved. For example, if a KPI’s Maximum weight is 10 and the producer achieves 90% of their goal, their score is 9. Maximum weight for all assigned KPIs total of 100.

To achieve their full Performance Income, a score of 95 or above is recommended. Performance Income is most effective when paid quarterly.

Marsh Berry recommends 40% for new and 25% for renewals as a sustainable investment in a sales team. A producer with a $1.6 million premium book will average 30% to 31% commission. In the chart below, the producer’s total compensation is 35% in Year 1 with this updated commission model. The producer makes more money and the owner can

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afford the higher investment because they know the dollars and behaviors they are paying for. The chart below also shows the producer what they will earn annually when they do their job.

Conclusion Producers will fail.

But that doesn’t mean yours have to. COVID-19 has demonstrated our need for change in how we do business. The first change needed is providing producers the sales playbook, accountability and compensation plan they deserve.

POLICY 27

NEWSMAKERS ARROW GROUP TURNS 50

FUTURE INSURANCE LEADERS OF OKLAHOMA

Our 2020 Future Leaders of Oklahoma Insurance Class had the opportunity to tour the Oklahoma Insurance Department and meet the Insurance Commissioner, Glen Mulready.

The Arrow Group officially turned 50 in November!

Pictured from left are Jim Beavers, Terry Cupp and Bruce Schutte. If you see them out in the community, be sure to tell them congratulations!

Our 2020 Future Leaders of Oklahoma Insurance Class volunteered at Sharing Tree.

BIRTHDAY CELEBRATION

Big I Oklahoma staff celebrating Jeanette Madrid’s birthday Be a Newsmaker | What’s happening in your organization?

Celebrating an anniversary, opening a new branch, or have a staff member who has received an outstanding award? Send us your

28 POLICY

news, along with a photo and your logo, so we can recognize those achievements in our POLICY magazine. Please email info@bigiok.com if you have questions.

WINTER 2020

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In Memoriam – Wesley Roy Eitzen Longtime Oklahoma insurance agent Wesley Roy Eitzen died Nov. 17, one day before what would have been 94th birthday.

Born on a farm just north of Homestead, Oklahoma, he was a graduate of Fairview High School Class of 1944. He attended Tabor College for a single semester before entering the Army, where he obtained the rank of sergeant. During this brief time at Tabor, he met the love of his life, Lauretta Martens they were married on May 28, 1948.

In 1952, the couple moved to Wayne, Indiana, where Wes went to work for Brotherhood Life Insurance Co. After 10 years in Indiana, the family moved back to Fairview, where he established Eitzen Insurance. He incorporated his little agency in 1966 and renamed it Eitzen Agency Inc. Wes served the ministry needs of many churches in northwest Oklahoma, selling Brotherhood Mutual Insurance.

He retired in 2008 – the same year he was named as only the second recipient to ever receive the Brotherhood Mutual Agent Legacy award.

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Wes was active in the community of Fairview, serving on the town’s chamber of commerce (where he was honored as a Lifetime Achievement Award recipient in 2018) and on the Fairview Diamond Jubilee committee, and also as a city councilman. He was an active member of the Fairview Lions Club for over 55 years (serving as president in 1975-76) and was active in FHS Sports Boosters.

Condolences may be made online at www.piercefuneralhomes.com.

POLICY 29

IN BRIEF WELCOME, HANNAH!

NEW AGENCY MEMBERS

Please help us welcome the newest member of our team, Continuing Education and Professional Development coordinator Hannah Stendel!

Hannah has been with Big I OK since November. She received her bachelor’s degree in liberal applied studies in behavioral science with a minor in Parks in Recreation from Southeastern Oklahoma State University. She is super excited to be a part of the team and serve our agents as they continue their education! Before Big I OK, she worked in several different capacities from remodeling homes, mental health, bookstore management, food banks, and coffee shops. In her spare time she loves hiking with her husband, John, crafting, or binge watching The Office...again.”

Please welcome our new agency member, Holly Jones, Holly Jones Insurance, LLC.

Please welcome our new agency member, Rebecca Eubanks, Tulsa Insurance Guy LLC.

BIG I OK NEW AGENCY MEMBERS AllAmerican Insurance Services LLC – Hydro

JK Meadors & Co. – Stillwater

Barry W. Tims – Tulsa

Keenan Insurance Agency – Tulsa

Best Insurance Inc. – Tulsa

MetroPlex – Yukon & Norman

Canopy Insurance – Edmond

Mike Zimmerman Insurance Agency – Sand Springs

Darren Perry Agency – Muskogee Espino Insurance – Tulsa

Moore Agency, Inc dba Moore-Lancaster Agency – Wagoner

Flippo Insurance – Broken Arrow

Omni Financial Group, LLC. – Woodward

Harmon Insurance – Broken Arrow

Penn Point Insurance LLC – Edmond

Hennessey Insurance LLC dba Painter Insurance – Hennessey

Scherer Insurance LLC – Tulsa

Hinson Insurance – Seminole, Shawnee & Ada

Tulsa Insurance Guy LLC – Tulsa

Insurance Professionals of Oklahoma – Tahlequah

Weddle Insurance Agency, LLC – Edmond

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The Thunder Insurance Group – Oklahoma City

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2021 EDUCATION CALENDAR Unless shown otherwise, all classes will be offered in both our on-site, COVID-friendly classroom at the Big I Oklahoma building in Oklahoma City as well as live stream simulcast of the physical classroom instructor and participants

JANUARY

JULY

January 15: Free Friday Ethics Webinar

July 16: Free Friday Ethics Webinar

FEBRUARY

AUGUST

February 9: CISR Life and Health Essentials February 10: CISR Elements of Risk Management February 11: CISR Insuring Commercial Property February 12: CISR Commercial Casualty I February 19: Free Friday Ethics Webinar

August 3: CISR Personal Auto August 4: CISR Personal Residential August 5-6: CIC Personal Lines August 20: Free Friday Ethics Webinar

MARCH March 12: Free Friday Ethics Webinar March 23: CISR Personal Lines Miscellaneous March 24-25: CIC Commercial Multiline March 26: CISR Commercial Casualty II APRIL April 6: CISR Personal Residential April 7: CISR Personal Auto April 23: Free Friday Ethics Webinar April 28-29: James K. Ruble Graduate Seminar MAY

SEPTEMBER September 8-9: CIC Agency Management September 10: CISR Insuring Commercial Property September 17: Free Friday Ethics Webinar OCTOBER October 5: CISR Personal Lines Miscellaneous Webinar October 15: Free Friday Ethics Webinar October 19: CISR Commercial Casualty I October 20-21: James K. Ruble Graduate Seminar NOVEMBER November 5: Free Friday Ethics Webinar November 10: CISR Elements of Risk Management Webinar November 17-18: CIC Commercial Property November 19: CISR Commercial Casualty II November 30: CISR Life and Health Essentials

May 12-13: CIC Commercial Casualty May 21: Free Friday Ethics Webinar JUNE June 18: Free Friday Ethics Webinar June 23-24: CIC Insurance Company Operations June 25: CISR Agency Operations

DECEMBER 1-2: CIC Life & Health 10: Free Friday Ethics Webinar

WWW.BIGIOK.COM/EDUCATION WINTER 2020

POLICY 31

Independent Insurance Agents of Oklahoma PO Box 13490 Oklahoma City, OK 73113 RETURN SERVICE REQUESTED

PRSRT STD U.S. POSTAGE PAID Oklahoma City, OK Permit No. 1659

Imperial PFS® makes it easier than ever to digitize your business with the IPFS Insurance Cortex™

FRED BARKER | fred.barker@ipfs.com | 405.202.8102

Imperial PFS has been working with Oklahoma agents for over 25 years and has the endorsement of the Big I of Oklahoma.

Fees may apply where applicable by state law. ACH payments may result in a fee where applicable by state law. For credit card payments, our payment processing partners, FIS and Plug n Pay, charge a technology fee of $12.50 for payment under $400 or 2.99% for payment of $400 or more. 2 IPFS’ down payment processing services are provided as a convenience only and are subject to prior agreement to IPFS’ terms and Conditions. Imperial PFS® is a trade name affiliated with IPFS Corporation® (IPFS®), a premium finance company. Access to products described herein may be subject to change and are subject to IPFS’ standard terms and conditions in all respects, including the terms and conditions specifically applicable to use of IPFS’ website and mobile application and IPFS’ eForms Disclosure and Consent Agreement. Copyright © 2020 IPFS Corporation. All rights reserved.