Wisconsin Independent Agent Magazine March 2019 Issue

wisconsin

INDEPENDENT AGENT MARCH 2019

20 19

r a e Y y r a s r e v i n n A

120TH

May 15-17, 2018 T S E W T T IO R R A M N O MADIS MADISON, WI

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INDEPENDENT AGENT MARCH 2019

Insurance Bartender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Government Affairs New Law Requires OCI Bulletin Review and Certification. . . . . . . . . . . . . . . . . . . . . . 12

On The Cover…

Commentary From Counsel State of the State: A Q&A with Former OCI Chief Legal Counsel, Zach Bemis. . . . 14

We are only two months away from our Annual

Virtual University Ask an Expert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

our 120th year, with a great lineup of speakers,

Ignore the Qualified Lead Ratio at Your Own Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Risky Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Sales Best Practices Crash Course: 3 Most Valuable Metrics . . . . . . . . . . . . . . . . . . . . . . . 22

Convention, InsurCon2019! Join us to celebrate CE courses, Innovation classes, and our beloved Convention Showcase Exhibition Hall (over 90 vendors, and cash giveaways!). We will have a special guest appearance by new Commissioner

Agency Operations Leading Gen Z: It’s A Millennial Thing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

of Insurance, Mark Afable, a Keynote speech

Emerging Leader Spotlight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

lecture from charismatic demographics expert,

Sales Top 10 Ways to Increase Sales in the New Year: Part 2. . . . . . . . . . . . . . . . . . . . . . . 26

John Maketa, and will have Wisconsin comedian,

E&O How a Claim is Made. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Thursday night with an hour show. Join us for

Members in the News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Food for Thought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Independent Insurance Agents of Wisconsin 725 John Nolen Drive, Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 ■ Fax: (608) 256-0170 ■ Web: www.iiaw.com Executive Vice President - Matt Banaszynski 2018-2019 Executive Committee President............................................................ Jason Bott Robertson-Ryan & Associates - 330 East Kilbourn Ave., Milwaukee, WI 53202 President-Elect............................................. Chris Costakis Avid Risk Solutions- 2501 Parmenter Street, Ste 200A Middleton, WI 53562 Secretary-Treasurer......................................Darrel Zaleski Spectrum Insurance Group, 4233 Southtowne Drive, Eau Claire, WI 5470 Chairwoman of the Board.................................Lise Meyer Meyer Insurance Agency, Inc., P.O. Box 130, Sauk City, WI 53583 State National Director ................................Steve Leitch Leitch Insurance - P.O. Box 85, River Falls, WI 54022 2018-2019 Board of Directors Mike Ansay, Ansay & Associates, 101 East Grand Ave. #11, Port Washington, WI 53704 Nick Arnoldy Marshfield Insurance Agency, Inc., 208 West 5th Street Marshfield, WI 54449 Mike Harrison R&R Insurance Services, Inc., 1581 East Racine Avenue Waukesha, WI 53146 Dan Lau Robertson Ryan & Associates, Inc., 330 East Kilbourn Avenue Milwaukee, WI 53202 Aaron Marsh Marsh Insurance Services, Inc., 11 East Newton Street Rice Lake, WI 54868 Marc Petersen American Advantage - Petersen & Assoc., Inc. 14785 West National Ave. New Berlin, WI 53151 Joanne Lukas Szymaszek Johnson Insurance Services LLC 555 Main Street Racine, WI 53405 Chad Tisonik HNI Risk Services LLC P.O. Box 510187 New Berlin, WI 53151 Pam Utpadel Universal Insurance Advisors, Inc. 100 West Lawrence Street Appleton, WI 54911 WISCONSIN INDEPENDENT AGENT

from MLB pitcher and Olympian, Jim Abbott, a

Charlie Berens, closing out the Convention on this two-day and night event, head to www. iiawconvention.com, and we will see you there!

> A DVERTISERS & INFORMATION

2018-2019 Committee Chairs

Emerging Leaders............................................. 2

Agency Services............................................ Ruth Vorwald Johnson Insurance Services, 7401 144th Ave, Kenosha wi 53142

InsurCon2019 Schedule..................................... 4

Automation/Technology................ Cathleen Christensen Hierl Insurance, Inc., Fond du Lac, WI 53937

Prelicensing Schedule....................................... 7

Emerging Leaders.................................................. Dan Lau Robertson Ryan & Associates, 330 East Kilbourn Ave, Milwaukee, WI 53202

BH GUARD.........................................................11

Employee Benefits........................................... Mike Farrell David Insurance Agency, Inc., 1300 South Green Bay Road, Racine, WI 53406

Keystone.......................................................... 15

Government Affairs............................................. Jeff Thiel R&R Insurance Services, Inc., P.O. Box 1610, Waukesha, WI 53187 Industry Relations............................................Janel Bazan Johnson Insurance Services, 525 Junction Road, Madison WI 53517 Membership & Marketing........................ Jamie Durocher Arlington/Roe & Co., 5530 Ryan Road, Houston, MN 55943

CE Calendar . .................................................... 6 AHP..................................................................10 AAA.................................................................. 14 IMT................................................................... 17 West Bend........................................................18 IIAW Agency Solutions..................................... 20 Badger Mutual.................................................. 21 Western National . .......................................... 24 Robertson Ryan ............................................. 27 JM Wilson........................................................ 34 Acuity . ........................................................... 35 SECURA........................................................... 36 MARCH 2019 | 3

SPEAKERS &

SCHEDULE OF EVENTS

ENTERTAINMENT

WEDNESDAY, MAY 15

Jim Abbott was born September 19, 1967 in Flint, Michigan without a right hand. He was an All-American hurler at Michigan, won the Sullivan Award in 1987, was the pitcher for the Gold Medal Olympic Team in 1988, and threw a 4-0 no-hitter for the New York Yankees versus Cleveland (September 4, 1993).

Jim played for 10 seasons on four different teams and ended his big league playing career in 1999.

Abbott has worked with The Department of Labor’s Office of Disability Employment Policy (ODEP) on several initiatives encouraging businesses to hire people with disabilities.

9:00 AM11:00 AM

IIAW BOARD MEETING

11:00 AM

CONVENTION REGISTRATION OPENS; LUNCH

12:15 PM1:00 PM

Agency of the Future - Matt Banaszynski, CEO IIAW This seminar will cover a variety of technologies that the insurance industry is currently deploying to provide a better customer experience, and increase employee efficiency and sales while decreasing expense.

12:15 PM2:00 PM

Medicare for All et al, Association Health Plans and Medicaid Expansion - Dave Grunke (2 CE) Review the 8 major proposals and plans, examine the current status of Association Health Plans, discuss the multiple impacts of Medicaid Expansion in Wisconsin on Hospitals, Physicians and the ACA Marketplace.

12:15 PM2:00 PM

Auto Tech Committee Seminar - TBD (2 CE pending)

1:15 PM2:00 PM

Basics of Experience Rating - Tad Cleveland and Melanie Lindseth, WCRB

2:10 PM3:00 PM

State of the Auto Industry - Rex Dachenbach, West Bend Mutual (1 CE) Overview of the current status of the auto industry, including rates/rating, industry profitability and growth, legal/regulatory, and distribution channels.

2:10 PM3:00 PM

Interactive Agency Needs Assessment - Mallory Cornell, Vice President, IIAW This interactive session will give participants a firsthand look at how technology is helping the IIAW identify agency exposures and provide the resources for effective mitigation.

3:10 PM4:00 PM

Cyber - Lisa DeMichael and Sarah Campbell, Chubb (1 CE) This course outlines the current cyber environment and the exposures that security breaches create for an organization from a cost and reputation standpoint.

3:10 PM4:00 PM

Technology tools to implement in your agency to help your employees drive efficiency and profitability Auto Tech Committee

4:15 PM6:15 PM

WELCOME REMARKS, ASSOCIATION MEETING & AWARDS Hors d’oeuvres and cocktails, everyone encouraged to attend!

Today, in addition to often being a Guest Pitching Instructor during Spring Training for the Los Angeles Angels, Jim Abbott is a motivational speaker.

John Maketa is a Fellow and advisory board member of The Work Institute and a guest lecturer at the Fox School of Business at Temple University. In 2013, he was invited as a subject matter expert to participate in the Global Digital Innovation Initiative at the United Nations General Assembly. John is a co-author of the bestselling book Now You’re Thinking! and a research analyst of the 2014 EDA Trends in Executive Development Benchmark Report. John is a powerwalker who lives in Pennsylvania with his generation X wife, Lisa, and Generation Y son, Jack.

Charlie Berens - comedian, host, actor and Emmy-winning journalist - is a dynamic talent in the comedy world. Berens is the creator and star of the Manitowoc Minute. In 6 months, he transformed the viral video series into an hour-long variety show and selling out venues.

Charlie’s career extends beyond the Manitowoc Minute by creating content for Funny or Die, TBS Digital and Fox Sports.

Berens is regularly featured on Funny or Die. His comedic mashups, including “If Jack Dawson Was Really From Wisconsin,” have garnered more than 13 million views.

Additionally, he performs stand-up around the Los Angeles area.

6:15 PM– 9:00 PM

COMPANY HOSPITALITY & ENTERTAINING

9:00 PM– 12:00 AM

EMERGING LEADERS SOCIAL - Cowboy Jacks Saloon (across street)

REGISTRATION Annual convention registration options are below:

*FIRST OVERNIGHT AT MARRIOTT WEST*

FULL REGISTRATION **EARLY BIRD** Members: $199 Non-Members: $239 AFTER MAR 31st Members: $239 Non-Members: $279

THURSDAY, MAY 16

FULL SPOUSE REGISTRATION: $129

7:45 AM– 9:00 AM

CONVENTION REGISTRATION OPENS Light Breakfast Buffet

WEDNESDAY ONLY REGISTRATION: Member: $149 Non-Member: $189

8:30 AM– 9:30 AM

JOHN MAKETA: Charting the Course through Demographic Change Examine how demographics play a significant role in 21st century workplace, major competency gaps of next generation leaders, and introduce the competencies required to succeed in the 21st century.

9:35 AM– 10:35 AM

DAIS - Discuss making the industry agency-centric through the Internet of Insurance, a risk syndication network that will connect agents, carriers on a shared platform.

10:45 AM– 12:15 PM

CEO PANEL, with introduction from special guest Commissioner of Insurance, Mark Afable (1 CE)

12:30 PM– 2:00 PM

LUNCH (PLATED) & KEYNOTE SPEAKER, JIM ABBOTT MLB pitcher and Olympian, born with only one hand, will talk about his experiences in life and how they led him to discover a customizable secret to success: A Adjustability, D - Determination, A - Accountability, P - Perseverance, T - Trust.

THURSDAY ONLY REGISTRATION: Members: $189 Non-Members: $229 Group reservations of 8 or more receive a 10% discount. This applies to full registrations only.

For complete descriptions, please go to www.iiawconvention.com.

Cancellations received by April 5th will be refunded, less a $10 processing fee. No refunds will be given for cancellations received after April 5th.

Attire is business casual for all convention events.

EXHIBITING Exhibitor registration fees are as follows: Member registration: $900 Non-Member: $1000 - Early Bird pricing is $50 off until Mar 31st -

2:15 PM– 4:45 PM

CONVENTION SHOWCASE & NETWORKING Cash bar, coffee, water

For complete details and to register as an exhibitor, please visit www.iiawconvention.com or email Kerry@iiaw.com.

5:00 PM– 6:00 PM

COCKTAIL RECEPTION honoring IIAW president, Jason Bott All are welcome, please join us for some drinks!

HOTEL

6:00 PM9:00 PM

CONVENTION WRAP PARTY & ENTERTAINMENT

7:30 PM8:30 PM

CHARLIE BERENS Award-winning comedian from Manitowoc Minute *SECOND OVERNIGHT AT MARRIOTT WEST*

All convention events take place at the Madison Marriott West. Rooms, at $151, in our reserved room block for May 15th and 16th, are available now for reservation but will sell out, so book early. Rooms will be available at the standard rate for both days after the block is sold out. Please indicate that you are attending the IIAW Annual Convention to ensure the group rate. Additional rooms for May 15/16th can be reserved at the Comfort Inn & Suites. The hotel reservation deadline is April 24th.

FOR DETAILS VISIT WWW.IIAWCONVENTION.COM

CONTINUING

EDUCATION

IIAW ONLINE AND ON-SITE CE CLASSES JANUARY Date 7 8 10 10 14 14 15 16 17 23 24 28 29 30

FEBRUARY Date 4 5 5 5 6 7 11 11 13 19 19 20 21 25 27

MARCH Date 4 6 7 12 12 13 14 18 18 19 20 21 26 28

Course

Prelicensing Life & Health (onsite, Jan 7-10) Commercial General Liability Coverages E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two Prelicensing Property & Casualty (onsite, Jan 14-17) Business Auto Coverages Workers’ Compensation Farm Liability Coverages Ethical Dilemmas ... Making the Right Choices It’s Not My Fault, or Is It? - Liability Issues in Personal Lines Policies Cyber Liability 10 Things Every Commercial Lines Agent Ought to Know When the Child Becomes the Parent - Aging Parents and Insurance Decisions Personal Auto Policy

Course

Prelicensing Life & Health (onsite, Feb 4-7) E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two E&O: Roadmap to Policy Analysis - Part One Condominiums Contractual Liability ... Separating Fact from Fiction Prelicensing Property & Casualty (onsite, Feb 11-14) Insuring Toys and Collectibles Life Insurance ... Benefits for the Living Insuring Trusts - Protecting Your Client’s Wishes Ethics - Walking a Straight Line Additional Insureds and Certificates of Insurance Fiduciary Liability, ERISA Bonding, and Employee Benefits Liabilit Dispelling the Myths of Workers’ Compensation Homeowners Hot Topics - What You Need to Know

Course

Prelicensing Life & Health (onsite, Mar 4-7) Top 10 Countdown of Personal Lines Coverages & Current Issues Protecting Your Most Valuable Asset E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two Income After Retirement - Where Does the Money Come From?

Business Auto Coverages Prelicensing Property & Casualty (onsite, Mar 18-21) Commercial Property Coverages - Exploring Key Concepts Ethics and Agent Liability It’s Not My Fault, or Is It? - Liability Issues in Personal Lines Policies Farm Vehicle and Equipment Coverages Lying, Stealing, New Types of Fraud: The Importance of Crime Insurance Businessowners Policy (BOP) ... Planning for the Unexpected

*TO REGISTER, PLEASE GO TO IIAW.COM*

Time

8:30AM-4PM 12-3PM 8-11AM 12-3PM 8:30AM-4PM 12-3PM 12-3PM 8-11AM 12-3PM 12-3PM 12-3PM 12-3PM 12-3PM 12-3PM

Time

8:30AM-4PM 8-11AM 12-3PM 4-7PM 8-11AM 12-3PM 8:30AM-4PM 12-3PM 12-3PM 8-11AM 12-3PM 12-3PM 12-3PM 12-3PM 12-3PM

Time

8:30AM-4PM 12-3PM 12-3PM 8-11AM 12-3PM 8-11AM 12-3PM 8:30AM-4PM 12-3PM 12-3PM 12-3PM 8-11AM 12-3PM 12-3PM

WISCONSIN INDEPENDENT AGENT

MARCH 2019 | 7

THE NEXT BIG THING FOR INDEPENDE

INTRODUCING THE INTERNET

The new generation of insurance buyers is impatient. This is a generation that has grown up with the ability to look up anything with the touch of a button; they can even order pizza with a single emoji or connect with kids’ sports teams effortlessly. Despite the multitude of technologies out there, agents and carriers continue to be constrained by available technology that is out of sync with these modern consumer expectations.

Getting millennials engaged with insurance requires a combo of technology firepower and personal advice. New startups are gaining a following by going directly to customers because of antiquated technology in the agency space. But the signs are pointing to a questionable future and limits for the sustainability of those companies. Relationships are critical for expertise, trusted advice, and especially, when something goes wrong and a claim happens. Perhaps this is why these startups have seen some traction in areas of the personal insurance sector with simple coverages, but have run into headwinds in commercial insurance, where businesses prefer an expert advisor who can guide them through the complex range of choices and products available.

Independent agents remain the heart of the insurance industry, and yet the role of an agent has remained largely unchanged by modern technologies. People manage most of life on phones, and instantaneously, but when they get to work everything is manual, and takes days. These outdated processes are expensive: some estimates suggest that 10-15% of the cost of insurance is wasted on paperwork and duplication. That’s $100 billion a year in the U.S. alone. Somehow, billions in insurtech and IT investments have failed to upgrade the core of our industry: the agent/carrier relationship.

Agencies know they can do more with digital tools. Despite all of the tech in the world, it’s frustrating to get to a desk every morning, see you have 25 voicemails from clients, underwriters, adjusters and prospects, and realize that the only way to get through it all is to respond through fax and multiple phone calls. It can take two weeks to get a quote on a small business account, but that should be simple

8 | MARCH 2019

stuff. Why can’t agents have the same tech capabilities at work that they do at home?

The insurance industry has not adequately empathized with agents.

They have few tools for matching their customers to the right carrier with appetite, policyholder persona, and true value to the customer, other than personal knowledge of the kinds of coverage carriers want to provide. Independent agents also have few tools to take advantage of the data that can enable better decision-making. Oftentimes, agencies spend considerable time on a policy, only to learn that the carrier has no interest in the business. In other cases, carriers grow frustrated with the large volumes of “poor” business an agent sends, and they cancel contracts. With the right tools, agents and carriers could better share data, determine risk appetite, and get on the same page quickly.

For agencies to fulfill that role, they need to digitally transform so they can both offer the level of service their customers expect and differentiate on more than price. They must also be able to serve their customers for all of their business risks: right now, businesses need to talk to a different person for each kind of coverage. Becoming exceptional means emphasizing customer experience, which in turn improves conversion rates and retention.

Enter DAIS (DAY-iss). DAIS was formed two years ago to bring together deep insurance knowledge and tech expertise and use today’s latest technology to upgrade the insurance agency without disintermediating the agent’s role as this trusted advisor. DAIS believes in giving agencies > Matt Banaszynski is the CEO of the Independent Insurance Agents of Wisconsin.

Contact him at matt@iiaw.com.

WISCONSIN INDEPENDENT AGENT

ENT AGENTS IS HERE!

INSURANCE BARTENDER

OF INSURANCE

the tools they need to offer better customer service and expand their role as a trusted advisor who can help businesses navigate the complex range of risk and insurance products. They want to help agencies spend less time on administrative tasks, and more time developing talent to excel on service and becoming more proactive in understanding customer needs.

One of the company’s first massive offerings from its broad platform is the Internet of Insurance (IoI), which connects agents and insurers on a shared network, and makes insurance as easy, intuitive, and instantaneous as the services you use in your daily life. DAIS’s pilot partners on the Internet of Insurance are already seeing results, including a 2x increase in their hit-rate since inception of the IoI. An

The Wisconsin Big I in particular has chosen to cooperate closely with DAIS: as a member of the Independent Insurance Agents of Wisconsin, you can have a hand in guiding DAIS’s development process and ensuring the platform matches your actual workflows as an agent.

DAIS believes this approach of partnering with agencies, Big Is, and carriers will succeed by solving the industry’s connectivity problems holistically.

Everyone else is building point solutions, DAIS is the only comprehensive platform solution we’ve found that spans agencies, carriers, and the broader insurance ecosystem. And I’ve talked to everyone, trust me.

The Internet of Insurance is already gaining traction in the industry,

early adopter and visionary, like Wisconsin’s Ansay and Associates, has jumped in with both feet and is already realizing a 20% decrease in marketing costs.

By offering modern, API-driven connectivity, the Internet of Insurance starts by solving the biggest pain-point felt by independent agents everywhere – a streamlined quote intake and submission process. The Internet of Insurance allows agents and carriers to quote products instantaneously: this reduces costs, and improves customer service, making getting a quote the starting point, not the outcome.

Over time, the Internet of Insurance will coordinate an ecosystem around what strengthens the bonds between agents and carriers, providing both with new data sources and new technologies with real-time connectivity in an open system that allows agents to use their own data to improve their processes.

DAIS believes the Internet of Insurance’s vastly improved efficiency will eventually make smaller, more targeted policies profitable. Agencies will also be able to advise policyholders on how to reduce their risks and costs. Loss control, claims handling and even policy creation will be transformed by the speed of the Internet of Insurance.

Agents and carriers need a two-way mirror. A system that can tell you what’s happening real-time so no one has to wonder... Did they get my quote request? Are they interested? What additional information can I provide to get the best terms and conditions? The most important part about a system like this is that it shouldn’t require specialized in-house talent to learn it and use it: new producers and customer service reps can be productive in hours, not months.

To be sure, the Internet of Insurance isn’t the first system to try to connect agencies and carriers online: there are legacy systems that were launched as far back as Reagan’s first term, but these systems are lacking an agent’s perspective and proper incentive alignment. They need a better way to connect that’s faster, easier and helps them grow the business and increase multiples.

DAIS has decided upon an entirely different approach: building trust among agents and carriers and demonstrating its commitment to upgrade the industry. The Internet of Insurance is designed to align incentives between agencies and carriers, allowing partners to both own a stake and help guide the development of the network. It is this approach, not just superior technology, that DAIS believes will succeed where others have failed. DAIS is betting that agents will be the central growth engine for the industry.

as witnessed by an impressive mix of agent and carrier partners, representing $30 billion in premiums with agencies across America.

Beyond Wisconsin, DAIS has partnered with Big I associations in numerous states beyond the WI Big I to bring the IoI to their members.

The insurance industry is changing. DAIS is helping agencies to remove these technology barriers and building the future collaboratively. The right technology platform can help in many new ways. No more paving cow paths.

Attend InsurCon2019 to hear DAIS’s keynote presentation on How to Amazon-Proof the Independent Agent on May 16th. DAIS will discuss how it is making the industry agency-centric through the Internet of Insurance, a risk syndication network that will connect agents, carriers on a shared platform and demo their latest technology. They will also provide IIAW members with the opportunity to sign up to get this cutting-edge technology. Register today at www.iiawconvention.com.

WISCONSIN INDEPENDENT AGENT

MATT ’S MI XO LO GY: Iri sh Mi mo sa

INGREDIENTS

1 part Jameson Caskmates IPA Edition Whiskey 2 parts IPA beer, hoppy and citrus-y are ideal 3 parts grapefruit juice Garnish, grapefruit peel HOW TO MAKE Pour Jameson Caskmates Top with IPA

Stout and grapefruit juic e into glass

Garnish with grapefruit pee

l

MARCH 2019 | 9

The right partner and the right plan for your business.

Together with WPS Health Insurance, Arise Health Plan and Aspirus Arise, Independent Insurance Agents of Wisconsin offer high-quality coverage and networks, affordable plans and a wide range of benefit choices.

The choice is yours!

Build your custom insurance package Health insurance remains one of the most expensive and frustrating employee benefits your business offers. Since the Affordable Care Act (ACA) passed, many have experienced price increases, higher out-of-pocket costs, and limited plan options.

Opt for a WPS plan that offers a

ROBUST NETWORK

Choose the narrower Arise Network for a

IIAW heard your concerns and is proud to announce that a new IIAW Association Health Plan is here. IIAW membership is required of the business owner, there is health under- writing, and health insurance must be offered to all eligible employees.

In addition to health insurance, when you team up with WPS Health Insurance, Arise Health Plan, and Aspirus Arise, you’re eligible for exclusive IIAW member pricing on additional services provided by EPIC Specialty Benefits. This lets you offer employer-paid ancillary benefits, such as life, short- term disability, and long-term disability, to your employees.

LOWER PREMIUM Contact us today!

The Benefit Works Julie K. Allord, Broker/Owner Awarded Top Employee Benefits Broker for 2014 6200 Mineral Point Road Madison, WI 53705 Direct line: 608-729-1001 General line: 608-729-1000

Get the option to expand coverage with your

LOCAL CHOICE Aspirus Arise Network Wisconsin Wrap Network (Also includes Aspirus Arise Network)

Note: Aspirus Arise markets products to individuals who reside and businesses domiciled in the green Wisconsin counties and in Shawano County in ZIP code areas beginning with 544 only.

WPS Health Insurance, Arise Health Plan, and Aspirus Arise offer: » Comprehensive, cost-effective networks locally and nationwide » Friendly, local customer service » Help managing your health care » Ethical, honest support » Flexibility of an independent health insurer

We are pleased to recognize the critical role of our partner insurance agents and brokers in helping us achieve another remarkable year.

Thank you for your ongoing commitment to our company.

Berkshire Hathaway

GUARD

Insurance Companies

COMMERCIAL LINES | PERSONAL LINES See state availability at www.guard.com

NEW LAW REQUIRES OCI BULLETIN REVIEW AND CERTIFICATION One of the final actions taken by the previous Republican-controlled state Legislature was passage of Senate Bill 884 (SB 884) during the extraordinary “lame duck” session in December of last year. The bill, now known as 2017 Wisconsin Act 369, mandates new procedures for all state governmental agencies to follow when issuing guidance documents (sometimes referred to as procedural manuals), or what we commonly understand as ‘bulletins’. Act 369 affects all existing and new guidance documents by state agencies, including those from the Office of the

with the OCI for many years, has been a fully transparent and collaborative process where, in many instances, the industry has relied upon the agency’s bulletins to avoid any confusion or unnecessary disruption in the marketplace. A healthy and competitive state insurance market requires stability, consistency and predictability.

In general, guidance documents from OCI have helped maintain a positive market, and therefore we need to ensure that the new process for guidance documents does not create any disruption for our industry,

seeking deference in any proceeding to agency interpretations of law.

Commissioner of Insurance (OCI).

The insurance industry is heavily regulated at the state level and these law changes could directly impact consumers, carriers and agents in the Wisconsin marketplace. At OCI, the agency routinely issues guidance documents in order to help provide clarity and assist the industry in navigating complex statutes or administrative rules. For example, OCI issued a bulletin back on June 29, 2018, specifically related to the use of Certificates of Insurance.

This particular bulletin updated a previous 2012 bulletin to include law changes from legislation enacted in 2017 that defined new unfair marketing practices and imposed new restrictions on the misuse of certificates of insurance. IIAW supported this legislation and the updated bulletin was something we requested and worked on with the OCI so that our agent members were fully informed and in compliance of the law changes.

OCI has issued hundreds of guidance documents that you can find on their website, dating back to 1996. It has been the normal practice that the agency openly works with all stakeholders, including consumers and industry, when issuing guidance documents. It is important to note that guidance documents, or bulletins, from any state agency, do not carry the force of law and are meant only to serve as an informative guide. At the heart of the extraordinary session law changes was the fact that some state agencies have abused the use of guidance documents exceeding their statutory authority. Republican lawmakers used this reasoning - and the importance of transparency - as the basis for scrutinizing and overhauling the process for issuing guidance documents. My experience, and that of my industry colleagues who have worked

or better yet, your customers. The staff at OCI are currently undergoing a thorough and complete review of all existing bulletins, and the agency has less than 6 months to follow the new procedures and to certify all existing guidance documents. It is a significant and time-consuming undertaking by the department that hopefully will not cause disruptions of other important business matters that our members have before the agency. It remains to be seen whether or not the OCI certifies all existing bulletins or only a select number based on their review and compliance with the new law. Any existing bulletins not certified by the Commissioner within the 6-month requirement, will automatically be rescinded.

If there are any specific bulletins from OCI that are of concern, please contact me at misha@leegovernmentrelations.com or Matt Banaszynski at matt@iiaw.com.

Along with this article is a useful overview from the nonpartisan Legislative Fiscal Bureau (LFB) on the new law and exhaustive procedures OCI and other state agencies must follow for existing and issuing new guidance documents.

i. Define “guidance document” as any formal or official document or communication issued by an agency, including a manual, handbook, directive, or informational bulletin, that: (a) explains the agency’s implementation of a statute or rule enforced or administered by the agency, including the current or proposed operating procedure of the agency; or (b) provides guidance or advice with respect to how the agency is likely to apply any statute or rule enforced or administered by the agency, if that guidance or advice is likely to apply to a class of persons similarly affected.

12 | MARCH 2019

Deference by Courts to Agency Interpretation of Law, Notice Requirements, and Guidance Documents.

Create provisions related to deference by courts to agency interpretations of law, notice and comment requirements for guidance documents issued by agencies, and agency rule- making authority. a. Deference. Prohibit a court from according deference to agency interpretations of law in certain proceedings and prohibit agencies from

b. Guidance Documents. Establish various requirements with respect to the adoption and use of guidance documents by agencies, including requirements that agencies must comply with in order to adopt guidance documents. This provision does not apply to the Board of Regents of the University of Wisconsin System, the Technical College System Board and the Department of Employee Trust Funds.

ii. The definition of a guidance document excludes: (a) a promulgated or a proposed rule; (b) a standard adopted, or a statement of policy or interpretation made in the decision of a contested case, in a Department of Revenue private letter ruling, or in an agency decision upon or disposition of a particular matter as applied to a specific set of facts; (c) any document or activity excluded from the definition of a rule, except that “guidance document” includes a pamphlet or other explanatory material described that otherwise satisfies the definition of “guidance document”; (d) any document that any statute specifically provides is not required to be promulgated as a rule; (e) declaratory ruling regarding an administrative action; (f) pleading or brief filed in court by the state, an agency, or an agency official; (g) a letter or written legal advice of the Department of Justice or a formal or informal opinion of the Attorney General; (h) any document or communication for which a procedure for public input is provided by law; and (i) any document or communication that is not subject to the right of inspection and copying under. iii. Require the Legislative Reference Bureau (LRB) to perform duties prescribed by statute related to WISCONSIN INDEPENDENT AGENT

GOVERNMENT AFFAIRS

. guidance documents, including publishing notices of public comment periods on proposed guidance documents. iv. Require each agency to submit each proposed guidance document to the Legislative Reference Bureau (LRB) for publication in the register and to provide a period for persons to submit written comments to the agency on the proposed guidance document. The agency must retain all written comments submitted during the public comment period and consider those comments in determining whether to adopt the guidance document as originally proposed, modify the proposed guidance document, or take any other action. v. Allow for a comment period of less than 21 days with the approval of the Governor.

vi. Require each adopted guidance document, while valid, to remain available on the agency’s Internet site and require the agency to permit continuing public comment on the guidance document. Each guidance document must be signed by the head of the agency below a statement containing certain certifications.

viii. Require an agency to provide a reasonable explanation for proceeding at variance with a guidance document. Allow certain persons to petition an agency to promulgate a rule in place of a guidance document, and make guidance documents subject to the same judicial review provisions as apply to rules.

vii. Provide that a guidance document does not have the force of law and does not provide the authority for implementing or enforcing a standard, requirement, or threshold, including as a term or condition of any license. An agency that proposes to rely on a guidance document to the detriment of a person in any proceeding would afford the person an adequate opportunity to contest the legality or wisdom of a position taken in the guidance document, and an agency may not use a guidance document to foreclose consideration of any issue raised in the guidance document.

ix. Require the Legislative Council staff to provide agencies with assistance in determining whether documents and communications are guidance documents. x. Provide that, as of six months after the bill’s effective date, any guidance document that does not comply with the requirements in the bill is considered to be rescinded.

> Misha Lee, IIAW Lobbyist

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RENEW TODAY!

STATE OF THE STATE: A Q&A WITH FORMER OCI CHIEF LEGAL COUNSEL ZACH BEMIS COMMENTARY FROM COUNSEL

How has your tenure as OCI Chief Legal Counsel changed your outlook on the future of the insurance industry in WI? Working at OCI helped drive home just how robust our insurance market is here in Wisconsin.

It also gave me great faith in the future of the industry in Wisconsin. I saw, every day, how the staff at the agency were thinking about the industry’s future and protecting consumers, and the insurance market as a whole. There is a strong desire for smarter, more effective and efficient regulation. But also a dedication to the core mission of consumer protection and financial solvency standards. The regulatory

create disruption within the industry. That includes insurers, policy makers, regulators, and customers, I think everyone is thinking about the challenges - and opportunities - this disruption will continue to create.

Insurers have partnered with Amazon on smart home products that mitigate risk; Apple now sees itself as a healthcare company; Wearables are being incorporated into policies.

All of this will reverberate through the insurance market. For example, I wouldn’t be surprised to see the unfair inducement law wind up in the spotlight as insurers continue to innovate and new technology becomes integrated into insurance policies.

Staying involved is easier than ever now.

communities, and often incredibly aware of emerging trends. Legislators and regulators are responsive, want to be educated, and to hear from the public. Reach out to them.

system is well designed and protects consumers and companies, not only in the present and near term, but for many, many years from now.

Through social media like Twitter and LinkedIn, information is more accessible than ever.

Agents also need to stay engaged with state regulators and policy makers. The IIAW is certainly a great forum for that. The other thing to keep in mind is that, in government, the perspective of the public is always appreciated.

That is especially true of agents who are on the front lines of the industry, active in their

that effort will continue.

As mentioned earlier, innovation and technology aren’t going anywhere. I wouldn’t be surprised to see efforts aimed at addressing those issues. One avenue on which to focus those efforts has been through a “regulatory sandbox.” That’s the process the OCI has in place to grant some flexibility for innovative products or ideas. The NAIC is now conducting a more active survey of different state approaches to their sandboxes, including things like unfair inducements, e-signature, and data privacy. Any of those issues I could see coming up in the coming years in legislation or regulations.

Finally, I wouldn’t be surprised to see changes in health insurance markets, particularly in the individual market. The Wisconsin Healthcare reinsurance program has started its first year.

New opportunities for coverage through Association Health Plans and short-term, limited duration plans have also come online in the last year. There is always something happening in health insurance, and I’m sure that will continue to be the case.

How do you see the insurance market changing in the next 10 years, and how can current agents and agency owners keep up with that change?

Technology and innovation will continue to be at the forefront of everyone’s mind and

Speak softly

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What legal changes or legislation should we watch out for in 2019?

I expect to see a cyber-security law coming at some point. The NAIC model is out there, and other states have charted their own course.

I expect Wisconsin to come up with its own unique approach that reflects the vibrant insurance market we have here, and balances the interests of the different insurers, agents, and, most importantly, consumers. We started working on it while I was at OCI, and I expect

What are you looking forward to in your new position at G&K? I’m excited to enter the private sector for the first time since graduating law school. I’m incredibly fortunate to have had the chance to work for the state in the legislature and for OCI, but am now excited to use the knowledge and experience I’ve developed to assist Godfrey & Kahn clients as they navigate that system. > Zach Bemis is an administrative and regulatory attorney at Godfrey & Kahn, and a member of the firm’s Insurance Practice and Political Law Groups. Zach previously served as Chief Legal Counsel at the Wisconsin Office of the Commissioner of Insurance where he was responsible for providing legal counsel to the Commissioner’s Unit and overseeing OCI’s Legal Unit.

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VIRTUAL UNIVERSITY

ASK AN EXPERT

Q:

UM/UIM Umbrella Coverage

A:

Here are three (3) examples:

Why would a person purchase UM/UIM umbrella coverage when a person’s medical insurance (less deductibles and co-pay) would cover such a loss? What else would a person be able to recover from either of these coverages?

1. A party with modest liability limits hit a young family van in the side. The mother and one child were killed. A second child was paralyzed from the waist down. The third child is quadriplegic. Both paralyzed children were preschool age.

2. A young small business owner was severely injured by a party with statutory minimum limits. The owner was unable to work for months and incurred large medical rehabilitation related expenses not covered by health insurance. Their business managed to survive but was greatly diminished. Thirty (30) years later the man is still limited by injuries.

3. A high honors student suffers catastrophic brain injury caused by another party. After seven (7) figures in medical expenses and exemplary care over several years, the person can function at a marginal level as an adult.

------UM pays what a tortfeasor’s liability should pay. In addition to medical bills, the at-fault party could owe for pain and suffering, lost wages, and other non-medical losses.

than you would under your own medical insurance. UM - UIM is similar but it is attached to your own policy to protect you when the other party has no insurance or lower limits than you need.

Then your policy limits would be available for the difference between your limit and their zero or low limits. You still have to prove liability on their part and prove up the loss but your options and recovery are much broader than under a medical insurance policy.

------The UM/UIM also pays for all other consequential losses arising from the bodily injury loss. That includes loss of income and pain & suffering awards. The health insurance coverage does not pick that up.

------An umbrella policy is designed to increase the limits provided by underlying policies. It is not designed to provide basic coverages provided by other policies.

------Medical insurance does not cover pain and suffering, loss of consortium, disfigurement or other general damages. UM/UI’M will pay what the insured could legally expect to recover from the UN or under insured motorists.

-------

------Damages from UM/UIM would pay far more than medical expenses – including loss of income of the injured person as well as derivative damages, such as loss of consortium, etc. I have seen more than one UIM claim in the multi-million-dollar category (including a woman who was pregnant and lost her unborn child in an accident that was not her fault).

------It would pay medical expenses not covered by the medical insurance such as for deductibles, co-pays and excluded procedures and treatment. It also would pay for pain and suffering, lost wages, disability etc. Think of it as a third-party liability policy it terms of scope of coverage. If someone hit you while you were in your car, on your bicycle or a pedestrian, you

Lost wages, child and adult care services, wheel chair for the street, wheelchair for the beach, wheelchair ramps, lifts to move the quadriplegic from different rooms and to and back from the shower and purchasing wheelchair accessible vans and equipment to name a few reasons.

------Keep in mind that UM/UIM coverage is essentially liability coverage - the liability coverage the at-fault driver didn’t have or didn’t have enough of. It pays more than just medical expenses.

It can pay for loss of consortium, pain & suffering, loss of income and, in some cases, punitive damages. Also, some health policies exclude auto accidents.

-------

would have broader recovery under their PAP liability insurance The Virtual University is a Big “I” members-only resource. Many articles are based on real-life questions received by the Ask an Expert service. This service ensures that the information is current and topical. Go to www.independentagent. com/Education/VU/. You will need to login with your IIABA username and password before using the VU. The IIABA does not assume and has no responsibility for liability or damage which may result from the use of any of this information.

16 | MARCH 2019

WISCONSIN INDEPENDENT AGENT

Pain and suffering along with mental anguish. Don’t forget lost wages if WC does not apply. Also, do not forget loss of consortium from the passing or loss of affection from a loved family member. I would encourage you to preview TV advertising from a member of the Bar Association for additional recoverable issues not listed herein.

At least offer to the client with signature from both spouses for their election to decline, otherwise your E&O will be providing the coverage less your deductible.

------UM or UIM covers “Bodily Injury”, which is more than what medical payments coverage will pay for doctors, hospital bills, medical expenses, etc. Bodily injury under UM would cover the equivalent of what you might recover from the at-fault driver in an accident if they had adequate liability limits. This could include all of those medical expenses, but also lost wages, pain

and suffering, etc. You might be injured and have $10,000 of medical bills, but the driver who struck you might be legally liable to you for $100,000, $500,000, or more. If you were injured to the extent that you could never walk again, never work again, never play catch with your young child, etc… you would not be happy with just having your medical bills paid. That is the difference between liability and simple medical payments. UM and UIM step in to pay when the driver who caused your injury either had no liability coverage or had lower limits than your injury warranted.

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IGNORE THE QUALIFIED LEAD RATIO AT YOUR OWN RISK

Agencies calculate and make decisions based on many ratios including liquidity ratios, the retention ratio, quote-tobind ratio and the closing ratio. But there is one ratio agencies might ignore – the Qualified Lead Ratio.

This ratio tells the agency what percentage of leads in its database are good leads and not just names taking up memory. In simplest terms, the qualified lead ratio tells an agency how beneficial its prospect database really is to the producers and the agency.

business. Some people are just hard to deal with and aren’t worth the heartache regardless of the income; and

Let’s first introduce how the ratio is calculated.

Then the term “qualified lead” is defined.

This is not necessarily an all-inclusive list of what is required for a lead to be considered “qualified.” The agency may have additional qualifiers. Once the agency has its qualifiers, the key is: if any of the qualifiers is missing, the lead is not a qualified lead.

Qualified Lead Ratio Calculation # of “Qualified Leads” / Total # of Prospects in Database = Qualified Lead Ratio

• That falls within the agency’s or producer’s niche.

Why This is Important The calculation is easy to understand; the difficulty lies in defining a “qualified lead.”

Defining “Qualified Lead” Agencies have a database of leads or “prospects.” Some call this a list of suspects rather than prospects, and I tend to agree.

Regardless what this pile of names is called, every agency has them. The question answered by the Qualified Lead Ratio is, how many of these prospects/suspects have to potential to actually turn into clients?

A pile of names with no possibility of actually becoming clients is just as useless as having no prospect list. An agency must have prospects to gain clients. But what the agency needs is a prospect list made of qualified leads.

What constitutes a “qualified lead”? A qualified lead is one: • For which the agency has a market: The agency has prospects in the list that none of its carriers will write, ever; • Generates the desired and needed income. Not all business is good business. Remember, every client requires time. If the revenue generated by the client is too low to pay for the necessary time to service the client (an internal business decision), the agency shouldn’t pursue the prospect; • Is a client with whom the agency wants to do WISCONSIN INDEPENDENT AGENT

Undertaking the investment of time and effort needed to research the database and calculate this ratio is absolutely essential. The primary benefit of calculating this ratio is that the agency is forced to define its focus - not just its niche, but its focus.

When an agency defines its focus, it is not distracted by shiny objects, squirrels and jingling keys. Knowing who and what fits the agency frees the agency to invest time in pursuing those leads, that business and those people. This results in improved closing ratios and increased income.

For instance, if the agency’s database of 1,000 prospects/suspects contains 200 restaurants yet none of its markets writes restaurants – that 200 is simply a distraction and taking up space. Likewise, if the agency decides that the account must generate at least $100 per hour of time spent working on and servicing the client, yet 300 of the 1,000 prospects produce less than $200 in revenue (making them unprofitable based on the internal requirement and the fact that at least 10 hours is necessary to appropriately service the clients during the year), the agency can eliminate them from the database. Again, these prospects are just a distraction.

This same process applies to the other “qualified lead” requirements. Once the agency has undertaken this process, the qualified lead ratio is calculated. The goal is a database of 100 percent qualified leads. Accomplishing this goal

requires on-going diligence.

“Wait a minute; if I am going through my leads database and deleting unqualified leads as I go, why do I need to calculate the qualified lead ratio?”

That’s a heck of a good question. There is no reason to calculate the ratio, unless the obvious benefit of having the ability to empirically address lead sources is apparent. For example: • If the producers are required to “fill the funnel” with 50, 100, 200 or whatever number of prospects/suspects each year, it is imperative this ratio is calculated to discover if the producers are just “throwing in names” or appropriately pre-qualifying their leads.

Throwing in big numbers of prospects doesn’t mean anything if they don’t fit the agency’s focus.

• If the agency purchases leads, it is important to know the quality of those leads compared to the agency focus. The ability to concretely present results to the entity from which leads are purchased allows the agency to negotiate better leads or better pricing. “Anecdotal evidence” holds very little weight, empirical calculations are hard for the lead supplier to dispute.

When historical data is analyzed, the agency can better anticipate future results. If half the leads input by producers are of poor quality, this indicates the need to better train the producers. If half the leads supplied by the lead generation company are lousy, this indicates a need to better inform the company or hire a new company. Agency results are improved because the quality of leads is improved.

Remember the old adage, “garbage in, garbage out.” When the leads database is full of garbage leads, production results will also be garbage.

Conversely, a high-quality source generates high quality results. In more dollar-centric terms – when the agency knows the qualified lead ratio, it experiences greater success. > Chris Boggs, Executive Director of the Independent Insurance Agents and Brokers of America (Big “I”) Virtual University

MARCH 2019 | 19

RISKY BUSINESS

BUILDING A BETTER TODAY: IIAW EXPANDS AGENCY RISK MANAGEMENT PROGRAM

Many of you are familiar with the wise words from author and motivational speaker, Simon Sinek. I recently came across this quote from him and believe that it aligns with the approach we take as risk managers.

“The goal is not to be perfect by the end, the goal is to be better today.”

As risk managers, we look at risks as they relate to five key pillars of the agency: Technology, Regulatory, Strategic, Operational, and Financial. Again, the goal is not to be perfect (this will oftentimes get in the way of progress, as we know), but rather to be better than we were yesterday.

Does the agency have the right technology to meet their customer service expectations and protect their client’s information? Does the agency meet regulatory requirements, both for their agency licenses as well as adhering to carrier agreements?

Does the agency have an E&O exposure we can mitigate using risk

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management checklists, a website review or an update to policies and procedures? Many of the mitigation steps can easily be resourced through the vast portfolio of documents and information made available to members by the IIAW. The bottom line is that we understand that there isn’t a “one size fits all” approach to building a successful agency, and some businesses will be able to implement change in more areas than others - but the goal is to improve. To be better.

Because this aspect of our service portfolio is so essential to the future of the independent agency, we have expanded our risk management team. Please join me in welcoming Evan Leitch, Technology and Risk Advisor, to the IIAW. Evan is currently finishing his final semester at UW-Madison and will be graduating in May with majors in Risk Management & Insurance and Marketing. Evan is no stranger to the insurance industry. His family has owned an independent agency in River Falls, WI since 1983 and he has completed internships with both The IMT Group as well as CUNA Mutual. Evan will be joining the team full-time in June but has already begun working on marketing and risk management projects for the Association.

Over the past year, the IIAW has continued to invest in resources that will add value for carriers and independent agencies. We will proactively continue to build these programs by exploring new technology solutions, adding to our portfolio of resources and, of course, ensuring we have the right team of professionals ready to work for you.

“

DREAM BIG, START SMALL. BUT MOST OF ALL, START.” SIMON SINEK

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> Mallory Cornell, MBA IIAW Vice President and Director of Risk Management

MARCH 2019 | 21

BEST PRACTICES CRASH COURSE:

3 MOST VALUABLE METRICS Michael Newsom wasn’t an immediate convert when he first encountered the Best Practices Study a decade ago.

“I’ll be honest—I was initially overwhelmed,” says Newsom, fifth-generation owner of W.J. Wheeler Insurance Agency in Bethel, Maine.

“It’s cool to have good data, but if you have to work too hard for it, by the time you get it, you’re exhausted.”

That’s a common response to the Best Practices Study, a joint effort of the Big “I” and Reagan Consulting, Inc., which celebrated its 25th anniversary with the update released last fall. Since 1993, the Best Practices Study has aimed to help agencies measure themselves against best-in-class agencies, identify performance gaps, and better manage their businesses to address problem areas.

After switching to a management system that streamlines reporting and comparison with Best Practices benchmarks, Newsom now believes digging into the numbers is well worth the effort.

“Our participation in Best Practices has had a trickle-down effect where we never look at numbers in their absolutes anymore,” Newsom explains. “Now we ask, ‘Compared to what?’ That gives us a better picture of how we’re doing, and then lets us drill down into, ‘OK, what were we doing well that led to improvements? How can we keep doing that, and what are our roadblocks?’”

To help you begin the process of sorting through such a wealth of information, the 2018 Best Practices Study Update outlines the three most valuable metrics to target.

Sales Velocity (current year new business / prior-year commissions and fees) According to Reagan Consulting, an agency’s organic growth is driven by four primary factors: exposures and rate changes, which are largely outside the agency’s control; and client retention and new business generation, which an agency can proactively manage.

John Merrill, vice president at Reagan Consulting, points out that even lowerperforming firms generally report client retention rates around 88-90%, with Best Practices agencies coming in around 95%.

“Retention rates are relatively steady within the industry,” he explains. “There’s not as much

22 | MARCH 2019

room for differentiation with a customer base that is consistently sticky industry-wide.”

That leaves new business generation as the single most important factor when evaluating organic growth versus your peers—and that’s where the sales velocity metric comes into play. “It’s great to talk about organic growth in general, but that doesn’t really tell the whole story as to whether or not you really have a sales culture,” says Tom Doran, partner at Reagan Consulting.

“If your agency’s growing at 6% a year and so is mine, but you’ve got a 15% sales velocity and I’ve only got a 10% sales velocity, what we know is you have a much more vibrant sales culture than I do,” Doran continues.

What’s a good sales velocity? It depends on your revenue category, but on average, Best Practices agencies clock in around 12-13%.

This is Newsom’s favorite metric—“we can make big changes to the agency quickly by making dramatic changes to new business,” he explains. “Your sales velocity drives the conversation around your sales culture.” or Newsom’s 10-employee agency, measuring sales velocity resulted in “figuring out we had to make some investments in a sales team,” he says. “We’ve developed some incentive tools internally for our folks who don’t have production, and we’ve invested in technology that gives our producers more feedback.”

Trey Starke, president of Starke Agency, Inc. in Montgomery, Alabama, agrees that of the four drivers of organic growth, new business generation is his agency’s top concern. His response: hiring young people and developing them.

“We’re not going out and raiding another agency and their book of business, because to be honest with you, the other agencies are not following Best Practices,” explains Starke, who notes that 6.5% of his sales velocity is driven by producers who are under the age of 35—a significantly higher proportion than the 2% average among the rest of his revenue category.

According to Reagan’s research, agencies with particularly high sales velocities typically report substantial new business contributions from multiple generations of agency producers.

“You don’t want to be too concentrated in one

age group,” Merrill explains. “You don’t want to see all your new business generation in the senior category that could be retiring within the next five to 10 years.”

But especially in smaller cities, recruiting young talent can be easier said than done.

“We’ve had zero luck with millennials sticking around,” says Cindy Widener Winn, president of Widener Insurance Agency, Inc. in Johnson City, Tennessee, whose youngest producer is currently 45. “We’re still looking for that magic person.”

In the meantime, Widener’s approach to maximizing new business generation relies heavily on cross-selling and account-rounding.

Because the agency’s business mix is about 45% commercial lines, 40% personal lines and 15% benefits, “we really work with our business clients on their personal lines as well as their employees’ personal lines, and then our personal lines staff tries to determine if they are decision-makers in any type of businesses that are local,” Widener Winn explains.

It’s a great example of a situation in which client retention and new business generation go hand in hand—the agency has a 96.2% retention rate, and Widener Winn says her existing client base is “where we get most of our new business.”

Pro Forma EBITDA Margin (pro forma EBITDA / pro forma net revenue) Along with organic growth, profitability is the key driver of an agency’s value. Here, an agency’s pro forma EBITDA margin is an ideal metric because it “eliminates some of the noise” that gets in the way of an accurate evaluation of profitability, Merrill says.

“Looking at profit alone tells you almost nothing, because an agency may have bonused a lot of the potential profit out, or they may have all kinds of personal expenses running through the agency that they could discontinue in a moment,” Doran explains.

EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, or “pre-tax income adding back interest charges, depreciation of fixed assets, and WISCONSIN INDEPENDENT AGENT

SALES

amortization of intangible assets. Essentially, it’s your pre-tax operating cash flow,” Merrill explains. “Pro forma adjustments are made to reported EBITDA to normalize earnings for items that are distortive to the operating profile of the agency, which commonly include non-recurring or one-time charges and personal or owner expenses running through the agency.”

Among Best Practices agencies, pro forma EBITDA margins average about 24% across all revenue categories, with high-profit Best Practices agencies closely monitoring what Reagan identifies as the four major expense categories: compensation, operating, selling and administrative.

“If I’m an agency owner and I’ve found that my profit is lower than I would like it to be, the question I have to ask myself is, ‘OK, where is the problem?’” Doran says. “The first step in solving the problem is understanding where the problem lives.”

According to Merrill, compensation comprises more than half of net revenue for most agencies: “Employee costs, including salaries and wages, bonuses, commissions and benefits, are always going to be the primary component of your operating expenditures, and typically the primary driver when you focus on profitability.”

Widener Winn agrees that the expense category that can “get out of control” is compensation. “You have good staff, and you want to reward them well—you want to give them raises, bonuses, etc.,” she says. “That is probably my biggest challenge.”

“I’ve seen hundreds of agencies, and I can tell you that 99.5% of the time when they’re missing it, they’re missing it because of compensation,” Starke agrees. “Everybody’s got a different model and a reason for it—‘This guy’s an owner and we can’t tell him we’re not going to pay him commission on $250 income accounts,’ or ‘We’re in Chicago and the salaries are a lot higher.’ You’ll hear every excuse you can think of.”

“There are a dozen things that go into the compensation question,” Doran agrees. “Do you have too many people? Are your systems not efficient? Is it taking you more people than the average agency to process business?

WISCONSIN INDEPENDENT AGENT

Do you pay your producers too much? Are you paying market-level compensation to your people? You have to dive deeper into the underlying drivers to identify specifically where the issues may lie.”

But taking a closer look at your expenses by category is also an opportunity to discover where your agency may be unique among your peer group. At Newsom’s agency, for example, compensation expenses are higher than average because the business is employeeowned.

“Whether it goes into profits that are distributed to owners or whether it goes into their salaries or benefits, it’s all their money,” Newsom explains. “Everybody owns the company, and when you’re an owner, you get perks.”

Starke, too, says his agency “gets dinged on the percentage of our support staff based on revenue,” but believes his staff infrastructure feeds the agency’s high client retention rate.

“We also spend a lot more on education and training than our peers, but we know what we’re doing,” Starke adds. “That’s an investment we want to make in our business.”

Rule of 20 (organic growth + [1/2 x pro forma EBITDA margin]) Reagan has determined that in evaluating the valuation of an agency, growth is roughly two times as important as profitability.

Think about it this way: “If an agency is looking at a strategic decision where one direction is expected to add 1% organic growth to the firm versus an alternative direction that would cut a cost, it would need to provide 2% incremental pro forma EBITDA to break even from an agency valuation standpoint,” Merrill explains—assuming no crossover impact in each scenario.

This is where the Rule of 20 score comes in—it assesses an agency’s balance of growth and profitability, and whether or not the combination is leading to strong shareholder returns. Best Practices agencies average a score of 16-17, but a score of 20 or higher indicates that the agency is generating very high shareholder returns.

Your Rule of 20 score could be low for any number of reasons. Maybe you’re spending

too much in one of the aforementioned expense categories.

Or “maybe your sales velocity is well below your peers and then you see your selling expenses are also well below. In isolation, you may think the lower expense factor which is contributing to higher profitability is positively contributing to the value of your agency,” Merrill says.

“However, you might not be adequately investing in your producers in a way that enables them to generate new business,” Merrill continues. “If you make an investment in some tools that will unlock production potential, it could pay off by driving new business and increasing overall agency valuation going forward, despite the increase in selling expenses.”

For Widener Winn, balancing profitability and growth requires keeping a close eye on sales goals. “You have to know what levels you’re wanting to achieve, measure them weekly, monthly and quarterly, and figure out what you need to do differently if it isn’t working out,” she explains. “You have to have goals and plans, and then review them and reinvent the way you’re going to strive to reach those goals.”

Reviewing reports on a weekly basis enables Widener Winn to identify where her staff needs to problem-correct. If a producer isn’t hitting their marks, for example, “sometimes you have to make the decision to terminate relationships, or reevaluate that employee to a service role,” she says.

Or maybe the issue is specific to a particular line—in that case, she might speak with the department head and help them come up with a solution. Either way, “hopefully we spot the problem long before it hits the long-term sales numbers.”

As Newsom puts it, “you live by two masters, right? An agency that isn’t growing at all could be super profitable, and an agency that’s growing like gangbusters could be losing money. The Rule of 20 just helps you realize you can’t neglect one of them. Long-term, you have to serve both.”

> Jacquelyn Connelly is IA senior editor

MARCH 2019 | 23

LEADING GEN Z: IT’S A MILLENNIAL THING

AGENCY OPERATIONS

As an educator at the University of North Carolina at Pembroke, I have noticed that Generation Z has all the answers in the palm of their hand at all times.

They are able to quickly check information presented to them because they are extremely resourceful with technology.

Generally defined as those born between the mid-1990s and mid-2000s, Gen Z has been exposed to technology in business models and communication throughout their lives. Gen Zs are accustomed to products and services being delivered to them immediately. They require transparency between all channels of business and want to be in the know about all that’s going on. They want to understand the value they’re going to receive when spending money on products and services.

And now, Gen Zs are beginning to graduate from high school and college and are rapidly infiltrating the workforce. So, what does that mean for the insurance industry? What does that mean as an independent agency owner?

What does it mean to millennial leaders?

And how do we cultivate and lead one of the

fastest-growing generations in our workforce?

Gen Z is challenging the workforce to think differently every day. As millennial leaders, we must listen and learn to understand their thought processes and motivations. As Gen Zs enter the workforce, they will demonstrate that they can take any task and provide answers from online research much faster than any other generation—even millennials. This means the rest of the workforce must adjust the way that we approach them with tasks.

Millennial agency leaders must lead in a way that makes Gen Zs feel as if they’re being coached, rather than told, empowering them to take on tasks on their own and proving we trust in their ability to achieve results. There will be many coachable moments along the way, and it is important to understand the Gen Z way of thinking to do that effectively.

As a result, millennial leaders must adapt our leadership techniques to be most effective.

What does that look like? First, we must ask questions and be curious about a Gen Z employee’s thoughts, rather than drowning them with our own beliefs about the way things should be done. We must understand that they’re accustomed to receiving information in a very timely manner, so when we communicate with them, we need to be brief and prompt. Finally, in the decisionmaking process, we must make Gen Zs feel included and part of the team. And we must embrace the fact that they will always be thinking outside the box and coming up with more efficient ways of doing things.

Millennial agency leaders have an opportunity to make a difference in the lives of the next generation. Let’s use the tools we have to lead and support Gen Z to build a stronger tomorrow. > Owen Thomas is an agent and senior account executive at Dial Insurance in Lumberton, North Carolina.

EMERGING LEADER SPOTLIGHT Each month we will be featuring one of the active members of our Emerging Leaders Committee. Our March Emerging Leader is Ryan Waite from Neckerman Insurance Services in Madison, WI. Tell us your name and a little more about you: My name is Ryan Waite and I work with Neckerman Insurance Services in Madison, WI.

an agency owner or a carrier needs to make to stay profitable.

How long have you been on the Emerging Leaders committee? This is my fourth year on the Emerging Leaders Committee.

Why should a new agent join the EL committee? New agents and even younger seasoned agents can benefit. There are some carrier reps, CSRs and even agency owners on the committee so it’s not strictly agents. If someone wants to test the waters with the EL committee, they could start by attending the professional development and social events the committee puts on in 2019.

How did you hear about the Emerging Leaders Committee? Another agent in my office had a framed “Wisconsin Young Agent of the Year” award and he highly recommended getting involved.

Why did you choose to become active with the Emerging Leaders committee? I had found great value in the Sales & Leadership Conference each year. Being a part of the team and putting together events to enhance our industry sounded appealing. The networking, friendships and insurance lessons I’ve learned outside of the classroom have become invaluable.

What is your favorite EL event or activity that you’ve done with the EL group? The PriSim event: Business War Games was an incredible learning experience. We were split into teams and had to make decisions while running an insurance carrier as well as a separate insurance agency. All of your decisions made significant differences in your bottom line. It made me appreciate what goes into each decision WISCONSIN INDEPENDENT AGENT

What is your spirit animal? The Hamm’s Beer bear.

Where is your favorite vacation spot? Anywhere internationally that I’ve never visited before. I’m always up for new adventures!

Do you have any pets? My daughters sometimes pretend they’re cats.

Does that count?

What is one professional goal for you in the next 3-5 years? I would like to focus on 2-3 niche markets. The other EL committee members have offered great advice to start a niche from scratch. Another great reason to be a part of the committee!

MARCH 2019 | 25

SALES

TOP 10 WAYS TO INCREASE SA PART 2

It’s time to finish building our “Top 10 List” for the New Year. This time we look at items 6 though 10. If you missed the first 5 ways to increase sales in the New Year be sure to visit the first article...

Enjoy the list and be sure to implement all 10 ideas. I know that you will have a perfect 10 year if you do!

6. Get referrals Referrals are the most profitable source of leads because they close dramatically faster than a cold lead, a lead from a trade show, website, advertisement or virtually any other source.

In fact, one Engage private coaching client transformed their business from a 68:1 closing ratio to an 80% closing ratio by moving their sales team from making from “cold calls” to “referred calls”.

The first step is to make sure your customers are happy! The happier your customers are the happier they will be to refer you to their own friends, colleagues and associates. A referral from a customer is the highest form of trust.

Trust is built on consistent behavior over time, starting with continuously showing your customers that you’re focused on their needs.

Once you’ve established that level of trust, identify “apostles” among your most loyal customers, and empower them to crusade for your product or service.

The second step is to make a direct request.

Try something like: I would love to meet the VP of sales for your supplier ACME corp. Can you help me by providing an introduction?

Yes, you have to do the research first to find out who you should be referred to. It’s worth the extra step as a direct request such as the one above is almost always granted.

Finally, always reward customers who send business your way. At a minimum, a handwritten thank you note will show them you appreciate the effort they made. At the maximum, a gift will help you secure that relationship - and likely lead to even more referrals in the future.

7. Acknowledge your clients You’ll be surprised how much this matters and how dramatic the results can be! For new customers, always say “thank you” they day you receive your first job order with a hand written thank you card. You should also say

26 | MARCH 2019

thanks after that order is filled. This second thank you can be a letter, a small gift or a phone call from you and/or the owner of the business or branch manager. After that, if it doesn’t make sense to offer thanks for every order, make sure you do it at twice per year.

I encourage you to use handwritten thank you notes - preferably ones that aren’t branded with your logo to look like an advertisement.

In addition, many of our clients have gone one step further and developed a special “welcome kit” for new clients, complete with a thank you note, small but meaningful present and useful information or perks for doing business with them. For instance, my karate school includes a 20% discount coupon for Dairy Queen in their welcome package, as a reward for having a good workout! My insurance company sends a small emergency kit along with their automobile policy renewals and one top staffing companies I work with design an HR guide to send to all their HR clients.

8. When negotiating, don’t add value if your customer won’t value it When dealing with the pricing objection sales people often make the mistake of piling on extras that the client may not want or need.

The result is that it will cost you more to give the customer something they couldn’t care less about in the first place - a perfect lose-lose proposition.

When I ask many of the sales people I coach why they do this, they usually tell me it’s because they “think the customer will like this.” Thinking the customer will like something is the same as assuming they will like it. You only need to think back to grade school to remember what happens when we assume.

Value, like beauty, is in the eye of the buyer.

Ask questions to find out what, besides price, would keep the customer from giving their business to someone else. Then set to work to provide them with as many of those concessions as you can. If the client doesn’t want any extras, then you can’t use the value vs. price argument to win this business. Quit trying and go on to something else.

In today’s highly competitive marketplace, pricing pressure is a constant menace. If you want to be successful, you need to make sure the deals you are closing are profitable ones. Be extra careful of offering so much that the client actually ends up costing you money. If your client base is too price sensitive, go out and find new clients that want the value you have to offer - not just the lowest price. It’s not easy, but it is simple to do if you have conviction.

9. Take control of the follow-up process and STOP chasing!

Chasing the client down to get them to sign an agreement is not selling. Instead this year commit to controlling the customer call back and follow up process. For example: When a client tells you the timing is not right, ask them to be more specific. “Thanks for letting me know that next month is better for you.

What date would you want to place the order?”

Or: “I would be happy to call you back next month. Would Tuesday, July 11th at 10:00 a.m. work for you?”

Don’t take “don’t worry - I’ll call you!” as an answer. You need to stay in control of the follow-up. For example, if the client offers to call you back when they are ready try: “Thanks for wanting to stay on top of this, Bob. How about, if I don’t hear from you by the 15th, I’ll call you on the 16th at 10:00 a.m.?”

Question them into a corner - and close them when they get there. Tell your clients: “I would be happy to call you back next month. Do you mind if I ask, what will have to be different in May to make you want to buy from me then?”

Or take the opposite approach, and ask: “Will anything change over the next few weeks that will cause you not to buy?” Once the prospect assures you that they do want to do business with you, you can respond with: “Great! Let’s get your order into production now so your project won’t be delayed, and we’ll deliver it after July 1st.”

10. Build client retention system Sales people and business owners may already be familiar with the statistic that suggest that it’s anywhere from five to 20 times less expensive to sell to existing clients than it is WISCONSIN INDEPENDENT AGENT

ALES IN THE NEW YEAR to land new ones. Less common, however, are those who heed that advice and adjust their sales strategy so that client-retention activities are as habitual as prospecting. And yet that’s precisely the level of commitment that’s required to make your client-retention efforts successful over the long term. This year make a commitment to increase the revenue you receive from your existing customer base by ensuring that they are purchasing your full range of products or services for their complete line of business units.

Consistent client-retention efforts send a powerful message to your customers that you’re serious about maintaining a deep, longterm relationship with them and are willing to prove it on a regular basis with hard work and even a little creativity. Your goal should be to reach out to your existing client base every 30 days with a meaningful and high value touch point. You can use email, the phone, live events or direct mail. Or use a different

media each month. Whatever is right for your business, the magic number you need to remember for staying on the top of your client’s mind is that 30-day marker.

Looking for a great source of ideas? Make a point of looking at what other successful sales people and organizations are doing to win repeat business from their clients. It doesn’t matter if they are in a completely different line of work from yours. If the ideas they are executing are solid and are producing results, the odds are good that you can find ways to import them into your own business.

There’s no denying that it can be timeconsuming to be constantly scouting for clientretention activities and mining them for great ideas. That’s why it’s important to find learning opportunities where you can quickly gain ideas from others who have implemented their own retention strategies and can show you first-hand what works well in organizations of all sizes. This is a topic that I will be covering in great detail at my Sales Mastery Workshop.

Specifically, I’ll be helping participants develop their own client-retention template, complete with “how-tos” for building deep, trusting relationships with prospects and clients quickly and more easily than before.

And there’s our top 10! To tie them all together, I’ve spoken before about the importance of having a personal philosophy for success — that no matter what you are selling, you are your own brand. This year be sure to implement these top 10 sales approaches to enhance your personal approach to sales. Your efforts will get noticed. By adopting proven strategies — even the unconventional ones — and investing in opportunities to learn from the pros, you’ll be shaping an approach to sales and customer retention that’s as unique as your personal signature. And there is always increased profit in that! > Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.

JOIN a Top 100 Agency

How we grew from 28 Producers to 95 Producers.

Q: What markets do you have?

A. As the largest independent agency in Wisconsin, RRA has strong carrier relationships. We offer over 50 CL, 30 PL and 45 EB carrier partners.

Q: Will I make more money?

A. Yes, we offer one of the strongest returns to Producers. We pay all office costs including staff salaries. You continue to own your business/book but enjoy all the advantages of being with a larger agency, including profit sharing.

Q: How can I maximize my time?

A. We handle staff management, HR, accounting, IT, rating, office management and other administrative details. This allows Producers to spend more time with their families or growing their book on their terms.

Q: How does carrier contingency work?

A. Producers can share in ALL contingencies. Because of our size, our contingent return is more predictable and stable to our Producers.

Q: Do you have a solid perpetuation plan?

A. Scaling back hours, retiring or planning for the unexpected should be a priority. We help connect Producers with similar interests and backgrounds to develop a buy/sell plan where they are comfortable.

Q: What technology resources do you offer?

A. A dedicated IT department ensures technology resources are performing and the latest tools are being reviewed. We operate on Applied Epic and offer Zywave, AcuComp and HR Workplace Services.

Q: Who owns the book?

A. Simple, the Producer maintains 100% ownership without a non-compete.

Learn More: Chris Illman I cillman@robertsonryan.com I 800.258.0277 I www.RobertsonRyan.com

WISCONSIN INDEPENDENT AGENT

HOW A CLAIM IS MADE

Fans of the TV show “How It’s Made” enjoy watching how some of the most seemingly mundane objects in the industrialized world today are created. The show’s presentation of the steps and materials it takes to create objects as simple as a mirror or silk glove make us more appreciative of how easily these things are available to us.

And yet, the life cycle of any object is more than the sum of its parts; each step in the process of making those parts is a story of its own.

Luckily for most, the life cycle of a professional liability claim is a mystery.

For those who have had the experience, some perhaps didn’t really know what stage their E&O claim was in until it affected their deductible or until their E&O carrier paid to defend and settle. If you are one of the curious, stay tuned and enjoy; here’s the story of how an E&O claim is created - with no commercial interruptions.

28 | MARCH 2019

How a claim is defined First, the claim is created by policy definition.

The Westport Insurance Agents Professional Liability policy defines a claim as: 1.) a n insured has received a summons, a subpoena, or any other notice of legal process; 2.) a n insured has received notice of any “suit”; 3.) a n insured has received notice of a written demand, or a written demand for money or services; or

4.) a n insured has received a request to provide a recorded statement.

In any or all of these instances, the claim must be immediately reported by the agency to the E&O carrier.

Reporting the claim to the E&O carrier: behind the scenes Once the claims department receives notice, a claims specialist contacts the insured agency to notify them that a claim has been received. A claim file is opened, and the claims specialist reviews the applicable deductible, policy limits, WISCONSIN INDEPENDENT AGENT

E&O

retro date, and confirms that the policy is in force. A determination is then made as to whether the alleged error or omission of the “claim” is covered by the policy. If the allegations fall within the coverage terms, the claims specialist then attempts to determine the insured’s potential liability. The claims specialist will speak with individuals from the agency who were involved in the matter, including the agency principal to determine what happened. He or she will ask them about standard agency procedures and practices and will check to see whether the underlying carrier (or others) have made payments yet. They will also ask for any and all documentation from the agency file so they can review it to support the agency’s defenses to the claim.

Many times, the allegations of the claim do not indicate that the agent has made any error. In those cases, the claims specialist will advise the claimant that their claim has no valid basis and will deny the claim. However, if the allegations may give rise to a valid claim, and if a lawsuit has not yet been filed, the claims specialist will ask for documentation that supports the claimant’s allegations. If the claimant has retained an attorney, the claims specialist will work directly with the attorney. The claims specialist will then review the information they provide and determine what further action to take to resolve the claim.

representative in a court of law. In some cases, Swiss Re has enhanced the E&O policy with an endorsement that allows insureds to choose their own defense counsel, subject to some limitations.

The DC will meet with the insured and begin the discovery process. This begins by requesting written discovery and may include subpoenas of various records including tax returns, receipts, or payroll records. Depositions are another part of discovery. Depositions are sworn testimony of the parties, witnesses and experts in order to determine what their testimony will be at trial. Individuals involved in the alleged error from the agency are deposed in most cases to document their side of the story. All of this is used to help build the agency’s defense and may also factor into the ongoing updates of the reserves. The agency’s potential liability is the logical conclusion that develops in the mind of the claims specialist as the discovery process unravels the facts.

Bringing in Defense Counsel

Mediation, summary judgment, or trial

If a lawsuit results from the allegations of a claim, the claims specialist will choose appropriate Defense Counsel for the agency, sometimes referred to as the “DC”. The DC selected usually comes from a panel of defense attorneys that have a proven history of excellence in defending insurance agents’ errors and omissions claims. The DC represents and has an ethical and professional obligation to the insured first and is the insured’s WISCONSIN INDEPENDENT AGENT

The claims specialist will then analyze, with the help of the defense counsel, how a judge or jury will view the agency’s liability and establish the expense, defense, and loss reserves. Defense counsel will continue to have regular contact with the insured, following the case to the end and keeping the insured informed about progress, delays, and the eventual outcome.

In many cases, it is appropriate for a case to be mediated. This is a non-binding process involving an independent third party whereby an attempt is made to negotiate a settlement. The process is non-binding because it is voluntary, and the parties are not required to reach a settlement. If a settlement is not reached, the case continues in the litigation process.

In some instances, where there is no dispute as to the facts of the case and the evidence clearly supports the agency and law supports the agency, the DC will file a motion summary judgment. This is a request where the attorney will ask a judge to determine as a matter of law that the claimant’s case should be dismissed.

It can only happen if the material facts are not in dispute such as whether a faxed document was received by the intended recipient or whether an injured worker is an employee of the plaintiff. The goal is to save time and money that would be spent further representing the insured by going to a jury trial when it is clear that there is no basis for the claim. If the motion is unsuccessful, the case goes continues in the litigation process.

A trial can last from one day to several weeks. On average, most E&O trials last two or three days. After the jury or the judge has reached its verdict and the trial has ended, either side may seek to appeal the verdict if they believe that the verdict was against the weight of the evidence or that there was an error as a matter of law. This can add several months to the process.

At some point, just like a mirror or a silk glove, the claim will finally come to an end. The entire process, from the first demand letter to the agency to the final closing letter from defense counsel or the claims specialist, can last from just a couple of months to a couple of years.

Either way, the goal is to successfully defend the agency and resolve the claim.

Being accused of making an error is never pleasant. But hopefully now you will have a better understanding of the life cycle of a claim and will be prepared if it should ever happen to you. ©2009 Swiss Re. All rights reserved.

> Shirley Zelenski is an Underwriting Vice President of Westport Insurance Corporation, a member of the Swiss Re group. Shirley can be reached at shirley_zelenski@swissre.com

MARCH 2019 | 29

News Members in the

are pleased to add three employees formerly with Robert W. Schmidt & Co., and now have a Wisconsin office in the greater Milwaukee area.”

“The purchase of Robert W. Schmidt & Company combined with the scale of our independent, family-owned company will bring expanded access to Wisconsin independent agents.

Representing over 200 markets allows us to provide agents with additional products, expertise and the opportunity to serve their clients even more,” Roe said.

Larson Promoted to Leadership Role at Wisconsin’s Integrity Insurance

Bob Schmidt, Jr., who founded Robert W. Schmidt & Company in 1991, said “I have enjoyed working with independent Wisconsin insurance agents over 30 years. I am pleased to have found a company to purchase our business which shares our spirit and expertise as problem solvers and able to deliver coverage solutions for specialty property and casualty risks. Our clients are in good hands.”

Integrity Insurance, headquartered in Appleton, Wisconsin, has promoted Mischel Larson from personal lines underwriter to personal lines underwriting supervisor.

Ben Salzmann Marks 20 Years as Acuity CEO

In her new supervisor role, Larson is responsible for leading the personal lines underwriting team, supporting growth initiatives and driving decision-making in addition to strengthening our ability to provide insurance solutions to agency partners. She will also serve on the Integrity management team.

Larson has more than 10 years’ experience in the insurance industry including personal and commercial underwriting, workers’ compensation and personal injury protection claims.

Mischel Larson She holds multiple insurance designations (SCLA, AIS and AINS) and is currently working toward a CPCU. Integrity Insurance, established in 1933, offers auto, home and business insurance through a network of independent agents throughout Iowa, Minnesota and Wisconsin. With partner Grange Insurance based in Columbus, Ohio — the 13-state enterprise has $2 billion in assets and $1 billion plus in annual revenue and holds an A.M. Best rating of “A” Excellent.

Source: Integrity Insurance

Arlington/Roe Completes Acquisition of Wisconsin Surplus Lines Broker Indianapolis-based managing general agent and wholesale insurance broker Arlington/Roe & Co. has completed the acquisition of Robert W. Schmidt & Company LLC, a special risk broker located in the Milwaukee suburb of Brookfield, WI, according to James A. Roe, CPCU, President of Arlington/ Roe. Arlington/Roe, founded in 1964, is a family-owned managing general agent and wholesale property and casualty insurance brokerage firm headquartered in Indiana with 200 staff members in nine state offices and premium volume over $220 million.

“This purchase allows us to add a ninth state office and effectively doubles our Wisconsin staff,” Roe said. “We chose Wisconsin as an expansion state for Arlington/Roe and have three associates working in the state. We

30 | MARCH 2019

On January 25, Ben Salzmann marked his 20th year as Acuity’s President and CEO. Over the past 20 years, Acuity has experienced a period of growth and financial strength unparalleled in the industry.

The insurer has grown at more than twice the industry average rate from less than $250 million in 1998 to over $1.5 billion in revenue under Salzmann’s tenure. Its policyholders’ surplus, a key indicator of financial strength in the insurance industry, has grown at nearly three times the industry average and surged from under $190 million in 1998 to $2.1 billion at year-end 2018. This growth has led to robust hiring, including plans to hire more than 160 employees in 2019 alone. Over that same period, Acuity has nearly tripled its geographic footprint.

Additionally, Acuity’s consistent, strong performance has garnered much recognition over the past two decades. The company has been named for 19 consecutive years to the Ward’s 50 list of top-performing property-casualty companies, one of only three insurers in the nation to achieve that accomplishment. Acuity has earned multiple Stakeholder Team Accomplishment Recognition™ (STAR) Awards from independent financial analysis firm Demotech, Inc., putting the company among the top 1 percent of insurers nationwide. Acuity has also received numerous recognitions from independent agents, including the prestigious 2018 PIA National Company Award of Excellence.

Over the past 20 years, Acuity has also consistently been ranked as a top employer, including by Forbes magazine, Fortune magazine, and the American Business Awards. The insurer has been featured in national publications for innovations in recruiting and employment and maintains an average voluntary turnover rate of just 2%.

“It is an honor and a privilege to serve Acuity,” Salzmann said. “We have a tremendous team of staff and agents who are committed to doing what is right for our customers and working toward our mutual success. I simply could not ask to work with WISCONSIN INDEPENDENT AGENT

better people, and I am truly thankful each and every day.”

Salzmann first joined Acuity in 1990. Prior to Acuity, he served at Foremost Insurance in Grand Rapids, Michigan, and was part of early development efforts utilizing artificial intelligence in insurance. He is a Phi Beta Kappa graduate in liberal arts from the University of Wisconsin, has a computer information systems degree from Aquinas College in Grand Rapids, Michigan, and earned a master’s degree in business administration from the University of Wisconsin.

Acuity Insurance, headquartered in Sheboygan, Wisconsin, insures over 100,000 businesses, including 300,000 commercial vehicles, and nearly a half million homes and private passenger autos across 27 states. Rated A+ by A.M. Best and S&P, Acuity employs over 1,300 people.

Robertson Ryan & Associates Promotes Christine Rogers Robertson Ryan & Associates is pleased to announce Christine Rogers has been promoted to the newly developed position of Senior Vice President of Customer Service. “As a top 100 US insurance agency, Robertson Ryan continues to add new offices and team members regularly. With this growth, having a central vision and voice for service excellence is essential. We place the greatest importance on service for our insureds and Christine has demonstrated great success in client services leadership,” said Allan Degner, Robertson Ryan’s Vice President of Marketing.

Most recently Christine served as Vice President of Benefits and Personal Insurance. In her new role Christine oversees all customer service for Robertson Ryan. This will create a more unified approach for our processes, policies and most importantly our culture. 2019 marks Christine’s 24th year with Robertson Ryan and she is a proven and respected member of the leadership team and in the insurance industry.

Rogers shared, “As a key member of the management team I feel it is important to understand all aspects of our departments and agency so I can lead by experience and personally step in when and where needed. I enjoy problem solving, team collaboration and making a difference.”

“Christine is a proven leader and now oversees more than 150 industry leading insurance professionals. Her critical thinking, insurance knowledge and strategic leadership style will ensure her success in managing the account executives and service teams for Robertson Ryan’s 95+ Agent Owners,” said Chris Illman, Robertson Ryan’s Chief Executive Officer.

Founded in 1960, Robertson Ryan & Associates, Inc. offers a broad range of solutions for Business, Benefits and Personal Insurance.

We counsel and assist more than 30,000 clients from small businesses to national accounts in all industries. With over 250 team members and 130 insurance companies we are the largest independent agency in WI and 54th largest privately held agency in the nation. Robertson Ryan is unique in that each agent is an Agent Owner. Learn more at www.robertsonryan.com.

Acuity Generates Record Profits in 2018 Acuity released its 2018 financial results, which showed that WISCONSIN INDEPENDENT AGENT

the insurer set new records across key areas of measurement while exceeding the industry’s performance in those areas.

Highlighting Acuity’s 2018 performance is a 93.5 combined ratio, over 8 points better than the insurer’s competitors in the property/casualty industry. This marks the 8th consecutive year Acuity has earned a combined ratio of less than 100.

Acuity showed strength and growth in many other areas in 2018 as well. The company continued to add to policyholders’ surplus—essential for fulfilling its promise of financial protection to customers—ending the year at a record $2.034 billion (GAAP). Assets increased to $4.465 billion (GAAP). Additionally, Acuity generated a net income of over $200 million for the first time in its 93-year history.

“Acuity is a consistent source of strength for our independent agent partners and the hundreds of thousands of individuals, families, businesses, and workers who depend on us to be there when disaster strikes,” said Ben Salzmann, Acuity President and CEO. “Our continued strong performance reflects the hard work of everyone at Acuity and confirms that we are doing things right—pricing products fairly and accurately, maintaining underwriting discipline, and operating at a high level of efficiency.”

In 2018, Acuity also combined outstanding financial performance with strong revenue growth of over $100 million. The company’s 7.2% increase in written premium was the highest in four years and exceeded the industry average. Fueled by $255 million in new business premium, Acuity finished 2018 with over $1.5 billion in total written premium for the first time in company history.

In commercial lines, Acuity surpassed 82,000 quote requests received for the first time ever and maintained an all-time-high 43.7 success ratio on writing those accounts. In personal lines, Acuity surpassed $400 million in written premium for the first time ever.

Acuity sets aggressive growth plans to hire hundreds more employees, expand into more states

by Lauren Anderson Coming off of a record growth year, Sheboygan-based property and casualty insurer Acuity is positioning itself to hire hundreds more employees over the next three years and continue expanding into new states.

The company is on track to hire 160 new employees this year, with plans to add another 200 in 2020, and 250 more in 2021, said Ben Salzmann, president and chief executive officer.

Acuity currently has more than 1,300 employees, about 1,000 of whom are based at the company’s Sheboygan headquarters.

The company completed a $170 million expansion of its corporate headquarters in 2017, doubling the total building space to a total of 1.2 million square feet. This year, the company plans to add another 600 spots to its 1,300-space parking ramp at the campus.

Next year, the company plans to finish and occupy a wing of the headquarters that is currently unfinished, Salzmann said.

“That should last us another three years,” he said.

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we can stand behind all of our claims, so we can protect our customers.”

Salzmann attributes Acuity’s growth to the quality of its independent agents.

“We sell through independent agents and independent agents sincerely care about their customers. They make sure they’re getting the right protection, that they’re getting great value, that the insurance company will settle claims fairly and quickly,” he said. “Insurance is really a relationship, reputation business and we work very hard on relationships.”

Salzmann cited hiring and training enough employees as the biggest hindrance to the company’s growth.

Eventually, the company expects to build two office towers on its campus.

“You can only assimilate so many new employees,” he said.

“I would say five years from now, we’ll build one tower and 10 years from now we’ll do another one,” Salzmann said.

In 2018, Acuity had record revenue of $1.54 billion, a 7.2 percent increase from its 2017 revenue of $1.44 billion.

The company, which has grown over the past 14 years from writing insurance in eight states to now operating in 27 states, is on pace to expand its service territory by one new state each year, Salzmann said.

Acuity often hires new college graduates – with education backgrounds ranging from business to computer science to liberal arts – and trains them in house.

The company has made a name for itself thanks to several unique design features at its headquarters, including a 65-foot indoor Ferris wheel, 27,000-square-foot fitness center, climbing wall and the world’s largest free-flying American flag.

In August 2018, Acuity expanded to New Hampshire. This August, it will begin doing business in Virginia. After that, the company has its sights on Oregon, New York, Washington and California.

In 2018, Acuity made Forbes’ list of America’s Best Mid-Size Employers, along with its Best Employers for Women list.

“That kind of geographic expansion in the property/casualty insurance industry is very, very rare,” said Wally Waldhart, vice president of sales and communications at Acuity.

SECURA Insurance names top-performing agencies for 2018

Commercial auto is Acuity’s largest and fastest-growing line of business.

Meanwhile, the company surpassed $400 million in written premium in personal lines last year. But the company’s leadership prides itself on not setting sales goals.

“We don’t believe in sales goals,” Salzmann said. “Insurance is risk bearing.

And if we say we as an organization want to grow 5 percent, that 5 percent gets assigned to everybody in each territory. But maybe there is some place where it doesn’t match, and then they start making bad decisions because they feel pressure … In some years, if it’s a recession, maybe we shrink and maybe that’s the right thing to do. So we don’t set sales goals. Where it can happen naturally, we make it happen.”

According to a Deloitte report, the national property and casualty sector enjoyed a strong fiscal 2018, thanks to sustained economic growth, rising interest rates and higher investment income. The industry saw growth in written premium of 4.6 percent in 2017, the highest percentage in the past decade, followed by a 12.7 percent increase in the first half of 2018.

Salzmann said Acuity is well positioned for growth thanks to its financial strength. It has received A+ ratings from both A.M. Best and Standard & Poor’s.

“We don’t have any debt; almost every business you look at has business loans that they have to pay as they go,” he said. “We’re very conservative and that gives us the ability to be, according to A.M., the strongest, so

32 | MARCH 2019

SECURA Insurance announced its leading agencies for 2018, naming Ansay & Associates, LLC as the Top-Performing Agency for 2018.

Agency Chairman and CEO, Mike Ansay, accepted the award at a ceremony in January, during the company’s annual Premier Agent Professional Development Conference. The independent agency is headquartered in Port Washington, Wis., with 12 locations throughout the state.

To earn this prestigious recognition, independent agencies met specific criteria based on their premium volume, profitability, growth, retention, and loss history with the insurance carrier.

“Our independent agents are our sales force and the true lifeblood of our organization, and we look forward to recognizing their outstanding performance each year at our Premier Conference,” said Dave Gross, President & CEO, SECURA Insurance. “As a mutual insurance company, we view our agents’ success as a fundamental part of our success, working together to provide our policyholders with the coverage they need and the service they deserve.”

Spectrum Insurance Group of Eau Claire, Wis., was among five other agencies to receive top-performing agency awards, is a three-time award winner and has represented SECURA since 2016.

WISCONSIN INDEPENDENT AGENT

ABOUT SECURA INSURANCE SECURA Insurance is headquartered in Appleton, Wis. More than 475 independent insurance agencies in 12 states represent the company, which provides a broad range of competitive commercial, personal, farm, nonprofit, and special events products. It is known for providing exceptional service to its agents and policyholders since 1900. The carrier also is a Ward’s Top 50 company for outstanding results in financial performance and consistency over a five-year period.

SECURA Insurance empowers success for associates, independent agents, and policyholders 2018 Annual Report reflects a year of growth, financial strength, and future investment SECURA Insurance released the 2018 Annual Report this week sharing details of its strong financial performance and continued growth. SECURA continues to outperform industry results and showed significant gains in the past year. The company is based in Appleton, Wisconsin and serves policyholders in twelve states.

“2018 was an incredible year of growth for SECURA and on behalf of everyone in our company, I’m proud to share the financial results of our hard work and continued focus on our policyholders and independent agents,” said Dave Gross, President & CEO. “As a mutual company, financial performance is not the only way we measure success, and yet we deliver outstanding results year-overyear. That growth empowers us to continue expanding our business and services to our independent agents and a growing number of policyholders.”

SECURA’s financial success is directly linked to the close relationships the company has with independent insurance agents.

“When we bring on a new agency partner, we want only the best to represent our company and serve our policyholders,” said Gross. “We look for experience, compassion, and a demonstrated commitment to providing excellent customer service, so the agency reflects our customer-centric philosophy as a carrier of choice.”

SECURA grew direct written premium to $670.3 million, which was an 8.9 percent increase. Profitability also finished ahead of plan and is expected to outperform the industry average.

In addition to premium growth, SECURA grew its workforce in 2018 by 53 full-time positions and plans to continue that trend in 2019 and beyond. The company is currently building a new headquarters in Fox Crossing, with an estimated completion date of October 2019. For more information about SECURA’s growth in the Fox Cities, visit secura.net/report. For career opportunities, visit secura.net/careers.

Privately Owned Third-Generation Fond du Lac Business Hierl Insurance Proudly Reaches 100 Year Milestone Hierl Insurance Inc., a third-generation insurance agency, is celebrating their 100th anniversary serving the Fond du Lac and Fox Valley communities.

continues to be family owned and operated. Harry T. Hierl was succeeded by his son, Tom Hierl and grandson, Mike Hierl, who is the current President of the company.

“My father started [Hierl] when he was 22 years old in 1919, with the original sign stating that Hierl served the community with Insurance, Real Estate and Loans.” said Tom Hierl.

Since its start, Hierl has narrowed their scope of service and now engages their expertise strictly in the Employee Benefits and Property and Casualty lines of business.

Beginning 100 years ago with Harry T. Hierl, the underpinnings of the legacy within Hierl Insurance has been community involvement. From father to son to grandson, it was never enough to just write a check but more important to give of your time and your knowledge. This principle - rooted in kindness, selflessness and integrity - was not only preached but practiced by every generation of Hierls. From charitable causes to organizational leadership, Harry, Tom and Mike Hierl always embraced an opportunity to do good, give back and encourage others around them to do the same.

Over the course of 2019, Hierl will share a heartwarming look inside how the agency got its start 100 years ago. Some of these include sharing valuable lessons learned along the way, and endearing memories from the Hierl family, the employees and the community over the years.

We invite our community into our story to see the moments and people that have made this such an incredible journey.

Throughout the year, we will be conducting monthly trivia contests with fun historical facts about our agency and local community on social media, as well as sharing a monthly newsletter that is sure to make you proud to be a part of the community that has helped Hierl grow to who they are today.

Hierl invites friends throughout the community to share in their celebration using #hierl100 throughout the year.

“A lot of the reward of working at Hierl comes from helping each employee reach his or her goals and be connected to their family,” explained Mike.

The Hierl100 celebration will culminate in an event in August.

More details to follow on this event in the future.

A third-generation family owned business, Hierl’s goal is for you to “Expect More and Demand Better.” Since 1919, Hierl has earned the trust of Wisconsin employers by using insight and innovative technology to create unique strategies that protect business owners, their employees and their budgets. Hierl’s mission is to provide clients with the wisdom and tools necessary to build a more engaged, productive and loyal workforce. With locations in Fond du Lac and Appleton, Hierl’s expertise in employee benefits, commercial insurance, human resources and wellness creates a great business team. Learn more at hierl.com.

Started in 1919 by Harry T. Hierl, the Hierl agency has been and WISCONSIN INDEPENDENT AGENT

MARCH 2019 | 33

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(800) 666-5692 | JMWILSON.COM 34 | MARCH 2019

WISCONSIN INDEPENDENT AGENT

Think you have what it takes to be an insurance agent?

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Join Acuity CEO Ben Salzmann and Emmy-Winning TV Host John

McGivern for this hour-long game show that will test our three contestants to see if they really have what it takes to be P&C Insurance Agents! But you’ll be the real winner when you take home a shiny new CE credit! Watch now at acuityu.com.

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An original farm boy Meet Curt, one of our Farm-Ag experts.

He and others on his team were farm kids themselves, so they’ve got firsthand, practical knowledge about a farmer’s insurance needs.

It’s the born-and-raised kind of expertise we look for in a team. And they’re supported by our caring claims group so your clients can get back to the work at hand, just like they’ve done for generations.

SECURA Farm-Ag. It’s how you grow. secura.net/farm-ag

Commercial | Personal | Farm-Ag | Specialty